Exhibit
10.32                    
 
                   LEASE
 
                                TMT RESTON I & II, INC.,
 
                                      as Landlord,
 
                                       and
 
                          TALK AMERICA INC.,
 
                                 as Tenant
 
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TABLE OF CONTENTS                                                 Page

   
1. USE AND RESTRICTIONS ON USE          
 1
2. TERM                             
 2
3. RENT            
 3
 4. RENTADJUSTMENTS                                               
 4  5. SECURITY DEPOSIT   7
 6.ALTERATIONS                                                          8
 7. REPAIR                                                        
 9  8. LIENS                                                             9  9.
ASSIGNMENT AND SUBLETTING                                   10  10.
INDEMNIFICATION                                                 12  11.
INSURANCE                                                         12  12. WAIVER
OF SUBROGATION                                 13  13. SERVICES AND
UTILITIES                               13  14. HOLDING
OVER                        15  15.
SUBORDINATION                                             15  16. RULES AND
REGULATIONS                                   16  17. REENTRY BY
LANDLORD                                16  18.
DEFAULT                                       16  19.
REMEDIES                                       18  20. TENANT’S BANKRUPTCY OR
INSOLVENCY                            21  21. QUIET
ENJOYMENT                               22  22. CASUALTY           22  23.
EMINENT DOMAIN                        24  24. SALE BY
LANDLORD                                     24  25. ESTOPPEL CERTIFICATES  25
 26. SURRENDER OF PREMISES  25  27. NOTICES       26  28. TAXES PAYABLE BY
TENANT   26  29. RELOCATION OF TENANT  27  30. DEFINED TERMS AND HEADINGS   27

 
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   31. TENANT’S AUTHORITY                                  27
32. FINANCIAL STATEMENTS AND CREDIT REPORTS
 28
33. COMMISSIONS       
 28    34. TIME AND APPLICABLE LAW  28    35. SUCCESSORS AND ASSIGNS  28    36.
ENTIRE AGREEMENT  28    37. EXAMINATION NOT OPTION  29    38. RECORDATION  29   
39. PARKING   29    40. LIMITATION OF LANDLORD’S LIABILITY  29  EXHIBIT A -
FLOOR PLAN DEPICTING THE PREMISES   A-1  EXHIBIT A-1 - SITE PLAN  A-1-1  EXHIBIT
B - INITIAL ALTERATIONS  B-1  EXHIBIT C - COMMENCEMENT DATE MEMORANDUM  C-1
 EXHIBIT D - RULES AND REGULATIONS  D-1  EXHIBIT E - FORM OF GUARANTY  E-1

 
 
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LEASE
REFERENCE PAGES
BUILDING:
Reston Plaza I
12030 Sunrise Valley Drive
Reston, VA 20191
LANDLORD:
TMT Reston I & II, Inc., a Delaware corporation
LANDLORD’S ADDRESS:
c/o RREEF
8280 Greensboro Drive, Suite 550
McLean, Virginia 22102
Attn: Mark Arena, District Manager
with a copy (which shall not constitute notice) to:
Covington & Burling
1201 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2401
Attention: Robert J. Gage, Esq.
ADDRESS FOR RENT PAYMENT:
TMT Reston I & II, Inc.
P.O. Box 13517
Newark, NJ 07188-0517
LANDLORD’S REGISTERED AGENT FOR SERVICE OF PROCESS:
Commonwealth Legal Services Corporation
4701 Cox Road, Suite 301
Glen Allen, VA 23060-6802
LEASE REFERENCE DATE:
October 28, 2004
TENANT:
Talk America, Inc., a Pennsylvania corporation
TENANT’S NOTICE ADDRESS:
(a) As of beginning of Term:
Talk America Holdings, Inc.
12020 Sunrise Valley Drive
Reston, Virginia 20191
Attn: Bill McGrath, Senior VP
with a copy (which shall not constitute notice) to:
 Talk America Holdings, 
6805 Route 202
New Hope, PA 18938
Attn: Legal Department 

 
 
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(b) Prior to beginning of Term (if different):
Talk America Holdings, Inc.
12020 Sunrise Valley Drive
Reston, Virginia 20191
Attn: Bill McGrath, Senior VP
with a copy (which shall not constitute notice) to:
Talk America Holdings, Inc.
6805 Route 202
New Hope, PA 18938
Attn: Legal Department
GUARANTOR
Talk America Holdings, Inc.
GUARANTOR’S NOTICE ADDRESS
Talk America Holdings, Inc.
6805 Route 202
New Hope, PA 18938
Attn: Bill McGrath, Senior VP
PREMISES IDENTIFICATION:
Suite Number 160 on the first (1st) floor of the Building (for outline of
Premises see Exhibit A)
PREMISES RENTABLE AREA:
Approximately 1,136 rentable sq. ft. (for outline of Premises see Exhibit A)
SCHEDULED COMMENCEMENT DATE:
November 1, 2004
TERM OF LEASE:
Approximately one (1) year, one (1) month beginning on the Commencement Date and
ending on the Termination Date. The period from the Commencement Date to the
last day of the same month is the “Commencement Month.”
TERMINATION DATE:
November 30, 2005
ANNUAL RENT:
Twenty Three and 00/100 Dollars ($23.00) per rentable square foot per annum,
subject to an escalation of three percent (3%) per annum on  each anniversary of
the Commencement Date, commencing with the first (1st) anniversary of the
Commencement Date.

 
 
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MONTHLY INSTALLMENT OF RENT

 Lease Year  Rentable Square Footage  Annual Rent Per Square Foot  Annual Rent
 Monthly Installment of Rent  1  1,136  $23.00  $26,128.00  $2,177.33  2  1,136
 $23.69  $26,911.84  $2,242.65

Pro-rated for a partial Lease Year
 
 
BASE YEAR (EXPENSES):
January 1, 2005 to December 31, 2005
BASE YEAR (INSURANCE):
January 1, 2005 to December 31, 2005
BASE YEAR (TAXES):
January 1, 2005 to December 31, 2005
BUILDING SIZE
approximately 77,875 sq. ft.
TENANT’S PROPORTIONATE SHARE:
1.46%
SECURITY DEPOSIT:
$2,177.33
ASSIGNMENT/SUBLETTING FEE:
$2,500.00
AFTER-HOURS HVAC COST:
$40.00 per hour, subject to change at any time, from time to time.
REAL ESTATE BROKER DUE COMMISSION:
None
TENANT’S SIC CODE:
4812
BUILDING BUSINESS HOURS:
Monday - Friday, 8:00 a.m. - 6:00 p.m.
Saturday, 8:00 a.m. - 1:00 p.m.
AMORTIZATION RATE:
10%

The Reference Pages information is incorporated into and made a part of the
Lease. In the event of any conflict between any Reference Pages information and
the Lease, the Lease shall control. This Lease includes the Exhibits, all of
which are made a part of this Lease.
 
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[SIGNATURES CONTAINED ON NEXT PAGE]
WITNESS:
By:____________________________
Title:
LANDLORD:
TMT RESTON I & II, INC.,
a Delaware corporation
 
By: RREEF MANAGEMENT COMPANY,
a Delaware corporation
 
By: /s/ Mark Arena
Name: Mark Arena
Title: District Manager
Dated: 11/3/04
ATTEST:
By: /s/ Craig H. Pizer 
Name: Craig H. Pizer
Title: Associate General Counsel
[Corporate Seal]
TENANT:
TALK AMERICA, INC.,
a Pennsylvania corporation
By: Aloysius T. Lawn IV 
Name: Aloysius T. Lawm IV
Title: EVP- General Counsel
Dated: 10/28/04

LEASE
 
By this Lease Landlord leases to Tenant and Tenant leases from Landlord the
Premises in the Building as set forth and described on the Reference Pages. The
Premises are depicted on the floor plan attached hereto as Exhibit A, and the
Building is depicted on the site plan attached hereto as Exhibit A-1. The
Reference Pages, including all terms defined thereon, are incorporated as part
of this Lease.
 
1. USE AND RESTRICTIONS ON USE.
 
    1.1. The Premises are to be used solely for general office purposes. Tenant
shall not do or permit anything to be done in or about the Premises which will
in any way obstruct or interfere with the rights of other tenants or occupants
of the Building, including, but not limited to, any exclusive rights of another
tenant or occupant of the Building, or injure, annoy, or disturb them, or allow
the Premises to be used for any improper, immoral, unlawful, or objectionable
purpose, or commit any waste. Tenant shall not do, permit or suffer in, on, or
about the Premises the sale of any alcoholic liquor without the written consent
of Landlord first obtained. Tenant shall comply with all governmental laws,
ordinances and regulations applicable to the use of the Premises and its
occupancy and shall promptly comply with all governmental orders and directions
for the correction, prevention and abatement of any violations in the Building
or appurtenant land, caused or permitted by, or resulting from the specific use
by, Tenant, or in or upon, or in connection with, the Premises, all at Tenant’s
sole expense. Tenant shall not do or permit anything to be done on or about the
Premises or bring or keep anything into the Premises which will in any way
increase the rate of, invalidate or prevent the procuring of any insurance
protecting against loss or damage to the Building or any of its contents by fire
or other casualty or against liability for damage to property or injury to
persons in or about the Building or any part thereof.
 
    1.2. Tenant shall not, and shall not direct, suffer or permit any of its
agents, contractors, employees, licensees or invitees (collectively, the “Tenant
Entities”) to at any time handle, use, manufacture, store or dispose of in or
about the Premises or the Building any (collectively “Hazardous Materials”)
flammables, explosives, radioactive materials, hazardous wastes or materials,
toxic wastes or materials, or other similar substances, petroleum products or
derivatives or any substance subject to regulation by or under any federal,
state and local laws and ordinances relating to the protection of the
environment or the keeping, use or disposition of environmentally hazardous
materials, substances, or wastes, presently in effect or hereafter adopted, all
amendments to any of them, and all rules and regulations issued pursuant to any
of such laws or ordinances (collectively “Environmental Laws”), nor shall Tenant
suffer or permit any Hazardous Materials to be used in any manner not fully in
compliance with all Environmental Laws, in the Premises or the Building and
appurtenant land or allow the environment to become contaminated with any
Hazardous Materials. Notwithstanding the foregoing, Tenant may handle, store,
use or dispose of products containing small quantities of Hazardous Materials
(such as aerosol cans containing insecticides, toner for copiers, paints, paint
remover and the like) to the extent customary and necessary for the use of the
Premises for general office purposes; provided that Tenant shall always handle,
store, use, and dispose of any such Hazardous Materials in a safe and lawful
manner and never allow such Hazardous Materials to contaminate the Premises,
Building and appurtenant land or the environment. Tenant shall protect, defend,
indemnify and hold each and all of the Landlord Entities (as defined in Article
30) harmless from and against any and all loss, claims, liability or costs
(including court costs and attorney’s fees) incurred by reason of any actual or
asserted failure of Tenant to fully comply with all applicable Environmental
Laws, or the presence, handling, use or disposition in or from the Premises of
any Hazardous Materials by Tenant or any Tenant Entity (even though permissible
under all applicable Environmental Laws or the provisions of this Lease), or by
reason of any actual or asserted failure of Tenant to keep, observe, or perform
any provision of this Section 1.2.
 

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2. TERM.

    2.1. The Term of this Lease shall begin on the date (“Commencement Date”)
which shall be the earlier of: (a) the date upon which Tenant begins Beneficial
Occupancy of the Premises; or (b) the later to occur of Landlord’s tendering of
the Premises to Tenant and the Scheduled Commencement Date as shown on the
Reference Pages, and shall terminate on the date as shown on the Reference Pages
(“Termination Date”), unless sooner terminated by the provisions of this Lease.
Landlord shall tender possession of the Premises with all the work, if any, to
be performed by Landlord pursuant to Exhibit B to this Lease substantially
completed. Tenant shall deliver a punch list of items not completed within ten
(10) days after Landlord tenders possession of the Premises and Landlord agrees
to proceed with due diligence to perform its obligations regarding such items.
Tenant shall, at Landlord’s request, execute and deliver a memorandum agreement
provided by Landlord in the form of Exhibit C attached hereto, setting forth the
actual Commencement Date, Termination Date and, if necessary, a revised rent
schedule. Should Tenant fail to do so within thirty (30) days after Landlord’s
request, the information set forth in such memorandum provided by Landlord shall
be conclusively presumed to be agreed and correct. Tenant acknowledges that it
enters into this Lease without any representations or warranties by the
Landlord, or anyone acting or purporting to act on behalf of Landlord, as to the
present or future condition of the Premises or the appurtenances thereto or any
improvements therein or of the Building, except as specifically set forth in
this Lease. It is further agreed that Tenant does and will accept the Premises
“AS IS” in their present condition as of the date hereof and the Landlord has no
obligation to perform any work therein. Notwithstanding any provision in this
Lease to the contrary, if the Term has not commenced within one (1) year after
the date of this Lease, this Lease shall automatically terminate on the first
(1st) anniversary of the date hereof. The sole purpose of the preceding sentence
is to avoid any possible interpretation that this Lease violates the Rule
Against Perpetuities or other rule of law against restraints on alienation.
 
    2.1.1. Notwithstanding any provision in this Lease to the contrary, Tenant’s
leasing of the Premises shall expire simultaneously with the expiration or
earlier termination of that certain Lease Agreement, dated April 28, 2000
entered into by and between Reston Plaza I & II, LLC ("Reston"), as landlord,
and Talk.com, Inc. ("Talk.com"), as tenant, as amended by that certain First
Amendment to Lease, dated May 6, 2004 entered into by and between Landlord, as
landlord and successor-in-interest to Reston, and Tenant, as tenant and
successor-in-interest to Talk.com, and as further amended by that certain Second
Amendment to Lease dated as of the date hereof entered into by and between
Landlord, and Tenant (collectively, the “Reston II Lease”), and Tenant shall
surrender possession of the Premises to Landlord in accordance with the terms of
this Lease, including without limitation, Section 26 herein.

    2.2. Tenant agrees that in the event of the inability of Landlord to deliver
possession of the Premises on the Scheduled Commencement Date for any reason,
Landlord shall not be liable for any damage resulting from such inability, but
Tenant shall not be liable for any rent until the time when Landlord can, after
notice to Tenant, deliver possession of the Premises to Tenant. No such failure
to give possession on the Scheduled Commencement Date shall affect the other
obligations of Tenant under this Lease, except that if Landlord is unable to
deliver possession of the Premises within one hundred twenty (120) days after
the Scheduled Commencement Date (other than as a result of strikes, shortages of
materials, holdover tenancies or similar matters beyond the reasonable control
of Landlord and Tenant is notified by Landlord in writing as to such delay),
Tenant shall have the option to terminate this Lease unless said delay is as a
result of: (i) Tenant’s request for changes to the Final Plans (defined in
Exhibit B) (or other Tenant change orders); (ii) Tenant’s acts or omissions
which result in Landlord’s inability to obtain timely a certificate of occupancy
for the Premises, if any, provided that Landlord shall have expressly agreed to
obtain same; (iii) based upon Tenant’s Final Plans, the inclusion in Tenant’s
Improvements by either party hereunder of any materials, finishes, or other
items which: (A) require a long lead time for procurement and installation; or
(B) are non-Landlord Building standard materials, finishes, or other items; or
(iv) Tenant’s failure to timely (a) furnish timely its requirements or agree to
any plans and specifications and/or construction cost estimates or bids; (b)
approve or revise any plans and specifications as provided in the Project
Schedule; (c) cause the timely performance or completion by a party employed by
Tenant (each of the foregoing, a “Tenant Delay”). If any delay is the result of
a Tenant Delay, the Commencement Date and the payment of rent under this Lease
shall be accelerated by the number of days of such Tenant Delay.

    2.3. Notwithstanding that the Term or Commencement Date may not have yet
occurred, if Landlord shall permit Tenant or any person or entity lawfully
acting by or through Tenant to possess or otherwise use the Premises prior to
the Term or Commencement Date, such possession or use shall be subject to all
the provisions of this Lease as if the Term and Commencement Date had otherwise
commenced or occurred; provided, however: (i) Tenant shall not be obligated to
pay Annual Rent or Tenant’s proportionate share of Expenses, Insurance Costs, or
Taxes with respect to any period prior to the actual Term or Commencement Date;
and (ii) such early possession and use shall not be included in determination of
the Lease Year, as defined in Section 4.1.1 of this Lease. If Tenant or such
person or entity should enjoy such early possession or use of the Premises, the
Term of the Lease shall be deemed to have so commenced solely for the purpose of
causing Tenant’s covenants, obligations, indemnities, and other agreement under
the Lease during the Term to be effective and binding upon Tenant during such
early possession (such as, but not limited to, Tenant’s being obligated to
obtain all insurance required of it under the Lease). Said early possession and
use shall not advance the Termination Date. Subject to the provisions of this
Lease, including Section 2.1, prior access to, and use of, the Premises by
Tenant or Tenant’s agents or vendors for the purposes of installing furniture,
fixtures, or equipment of Tenant shall not advance the Term or Commencement
Date.
 

 
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3. RENT.

    3.1. Tenant agrees to pay to Landlord the Annual Rent in effect from time to
time by paying the Monthly Installment of Rent then in effect on or before the
first day of each full calendar month during the Term, except that the first
full month’s rent shall be paid upon the execution of this Lease. The Monthly
Installment of Rent in effect at any time shall be one-twelfth (1/12) of the
Annual Rent in effect at such time. Rent for any period during the Term which is
less than a full month shall be a prorated portion of the Monthly Installment of
Rent based upon the number of days in such month. Said rent shall be paid to
Landlord, without deduction or offset and without notice or demand, at the Rent
Payment Address, as set forth on the Reference Pages, or to such other person or
at such other place as Landlord may from time to time designate in writing. If
an Event of Default occurs, Landlord may require by notice to Tenant that all
subsequent rent payments be made by an automatic payment from Tenant’s bank
account to Landlord’s account, without cost to Landlord. Tenant must implement
such automatic payment system prior to the next scheduled rent payment or within
ten (10) days after Landlord’s notice, whichever is later. Unless specified in
this Lease to the contrary, all amounts and sums payable by Tenant to Landlord
pursuant to this Lease shall be deemed additional rent.

    3.2. Tenant recognizes that late payment of any rent or other sum due under
this Lease will result in administrative expense to Landlord, the extent of
which additional expense is extremely difficult and economically impractical to
ascertain. Tenant therefore agrees that if rent or any other sum is not paid
when due and payable pursuant to this Lease, a late charge shall be imposed in
an amount equal to the greater of: (a) Fifty Dollars ($50.00), or (b) six
percent (6%) of the unpaid rent or other payment. The amount of the late charge
to be paid by Tenant shall be reassessed and added to Tenant’s obligation for
each successive month until paid. The provisions of this Section 3.2 in no way
relieve Tenant of the obligation to pay rent or other payments on or before the
date on which they are due, nor do the terms of this Section 3.2 in any way
affect Landlord’s remedies pursuant to Article 19 of this Lease in the event
said rent or other payment is unpaid after date due.

    3.3. Notwithstanding anything to the contrary contained herein, if the
Commencement Month is not a full calendar month, such Commencement Month shall
be deemed for all purposes of this Lease to be part of the First Lease Year and
Tenant shall pay additional Annual Rent for such Commencement Month calculated
on a per diem basis at the Annual Rental Rate for the First Lease Year.

4. RENT ADJUSTMENTS.
 
    4.1. For the purpose of this Article 4, the following terms are defined as
follows:
 
        4.1.1. Lease Year: Each consecutive twelve (12) month period falling
partly or wholly within the Term; provided, however, if the Commencement Month
is not a full calendar month, then the first Lease Year shall consist of the
Commencement Month and the subsequent twelve (12) consecutive month period.
 
      4.1.2. Expenses: All costs of operation, maintenance, repair, replacement
and management of the Building (including the amount of any credits which
Landlord may grant to particular tenants of the Building in lieu of providing
any standard services or paying any standard costs described in this Section
4.1.2 for similar tenants), as determined in accordance with generally accepted
accounting principles, including the following costs by way of illustration, but
not limitation: water and sewer charges; utility costs, including, but not
limited to, the cost of heat, light, power, steam, gas; waste disposal; the cost
of janitorial services; the cost of access control and monitoring services
(including any central station signaling system); costs of cleaning, repairing,
replacing and maintaining the common areas, including parking and landscaping,
window cleaning costs; labor costs; costs and expenses of managing the Building
including management and/or administrative fees; air conditioning maintenance
costs; elevator maintenance fees and supplies; material costs; equipment costs
including the cost of maintenance, repair and service agreements and rental and
leasing costs; purchase costs of equipment; current rental and leasing costs of
items which would be capital items if purchased; tool costs; licenses, permits
and inspection fees; wages and salaries; employee benefits and payroll taxes;
accounting and legal fees; any sales, use or service taxes incurred in
connection therewith. In addition, Landlord shall be entitled to recover, as
additional rent (which, along with any other capital expenditures constituting
Expenses, Landlord may either include in Expenses or cause to be billed to
Tenant along with Expenses and Taxes but as a separate item), Tenant’s
Proportionate Share of: (i) an allocable portion of the cost of capital
improvement items which are reasonably calculated to reduce operating expenses;
(ii) the cost of fire sprinklers and suppression systems and other life safety
systems; and (iii) other capital expenses which are required under any
governmental laws, regulations or ordinances which were not applicable to the
Building at the time it was constructed; but the costs described in this
sentence shall be amortized over the reasonable life of such expenditures in
accordance with such reasonable life and amortization schedules as shall be
determined by Landlord in accordance with generally accepted accounting
principles, with interest on the unamortized amount at one percent (1%) in
excess of the Wall Street Journal prime lending rate announced from time to
time. Expenses shall not include Taxes, Insurance Costs, depreciation or
amortization of the Building or equipment in the Building except as provided
herein, loan principal payments, costs of alterations of tenants’ premises,
leasing commissions, interest expenses on long-term borrowings or advertising
costs. If any Direct Expenses are shared jointly between or among the Building
and another building, such as, but not limited to, Reston Plaza II, such costs
shall be allocated proportionately between or among such buildings based upon
the rentable square footage of each building, or such other equitable manner as
Landlord shall deem appropriate.
 
 
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        4.1.3. Taxes: Real estate taxes and any other taxes, charges and
assessments which are levied with respect to the Building or the land
appurtenant to the Building, or with respect to any improvements, fixtures and
equipment or other property of Landlord, real or personal, located in the
Building and used in connection with the operation of the Building and said
land, any payments to any ground lessor in reimbursement of tax payments made by
such lessor; and all fees, expenses and costs incurred by Landlord in
investigating, protesting, contesting or in any way seeking to reduce or avoid
increase in any assessments, levies or the tax rate pertaining to any Taxes to
be paid by Landlord in any calendar year. Taxes shall not include any corporate
franchise, or estate, inheritance or net income tax, or tax imposed upon any
transfer by Landlord of its interest in this Lease or the Building or any taxes
to be paid by Tenant pursuant to Article 28. If any Taxes are shared jointly
between or among the Building and another building, such as, but not limited to,
Reston Plaza II, such costs shall be allocated proportionately between or among
such buildings based upon the rentable square footage of each building, or such
other equitable manner as Landlord shall deem appropriate.
 
        4.1.4. Insurance Costs: Any and all insurance charges of or relating to
all insurance policies and endorsements deemed by Landlord to be reasonably
necessary or desirable and relating in any manner to the protection,
preservation, or operation of the Building or any part thereof. If any Insurance
Costs are shared jointly between or among the Building and another building,
such as, but not limited to, Reston Plaza II, such costs shall be allocated
proportionately between or among such buildings based upon the rentable square
footage of each building, or such other equitable manner as Landlord shall deem
appropriate.

    4.2. If in any calendar year, (i) Expenses paid or incurred shall exceed
Expenses paid or incurred in the Base Year (Expenses) and/or (ii) Taxes paid or
incurred by Landlord shall exceed the amount of such Taxes which became due and
payable in the Base Year (Taxes), and/or (iii) Insurance Costs paid or incurred
by Landlord shall exceed the amount of such Insurance Costs which became due and
payable in the Base Year (Insurance Costs), Tenant shall pay as additional rent
for such calendar year Tenant’s Proportionate Share of each such excess amount.

    4.3. The annual determination of Expenses and Insurance Costs shall be made
by Landlord and shall be binding upon Landlord and Tenant, subject to the
provisions of this Section 4.3. During the Term, Tenant may review, at Tenant’s
sole cost and expense, the books and records supporting such determination in an
office of Landlord, or Landlord’s agent, during normal business hours, upon
giving Landlord five (5) days advance written notice within sixty (60) days
after receipt of such determination, but in no event more often than once in any
one (1) year period, subject to execution of a confidentiality agreement
acceptable to Landlord, and provided that if Tenant utilizes an independent
accountant to perform such review it shall be one of national standing which is
reasonably acceptable to Landlord, is not compensated on a contingency basis and
is also subject to such confidentiality agreement. If Tenant fails to object to
Landlord’s determination of Expenses and Insurance Costs within ninety (90) days
after receipt, or if any such objection fails to state with specificity the
reason for the objection, Tenant shall be deemed to have approved such
determination and shall have no further right to object to or contest such
determination. In the event that during all or any portion of any calendar year
or Base Year, the Building is not fully rented and occupied Landlord shall make
an appropriate adjustment in occupancy-related Expenses for such year for the
purpose of avoiding distortion of the amount of such Expenses to be attributed
to Tenant by reason of variation in total occupancy of the Building, by
employing consistent and sound accounting and management principles to determine
Expenses that would have been paid or incurred by Landlord had the Building been
at least ninety-five percent (95%) rented and occupied, and the amount so
determined shall be deemed to have been Expenses for such calendar year.

    4.4. Prior to the actual determination thereof for a calendar year, Landlord
may from time to time estimate Tenant’s liability for Expenses, Insurance Costs
and/or Taxes under Sections 4.1, Article 6.3 and Article 28 for the calendar
year or portion thereof. Landlord will give Tenant written notification of the
amount of such estimate and Tenant agrees that it will pay, by increase of its
Monthly Installments of Rent due in such calendar year, additional rent in the
amount of such estimate. Any such increased rate of Monthly Installments of Rent
pursuant to this Section 4.4 shall remain in effect until further written
notification to Tenant pursuant hereto.
 
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    4.5. When the above mentioned actual determination of Tenant’s liability for
Expenses, Insurance Costs and/or Taxes is made for any calendar year and when
Tenant is so notified in writing, then:

        4.5.1. If the total additional rent Tenant actually paid pursuant to
Section 4.3 on account of Expenses, Insurance Costs and/or Taxes for the
calendar year is less than Tenant’s liability for Expenses, Insurance Costs
and/or Taxes, then Tenant shall pay such deficiency to Landlord as additional
rent in one lump sum within thirty (30) days of receipt of Landlord’s bill
therefor; and

        4.5.2. If the total additional rent Tenant actually paid pursuant to
Section 4.3 on account of Expenses, Insurance Costs and/or Taxes for the
calendar year is more than Tenant’s liability for Expenses, Insurance Costs
and/or Taxes, then Landlord shall credit the difference against the then next
due payments to be made by Tenant under this Article 4, or, if the Lease has
terminated, refund the difference in cash. Tenant shall not be entitled to a
credit by reason of actual Expenses and/or Taxes and/or Insurance Costs in any
calendar year being less than Expenses and/or Taxes and/or Insurance Costs in
the Base Year (Expenses and/or Taxes and/or Insurance).

    4.6. If the Commencement Date is other than January 1 or if the Termination
Date is other than December 31, Tenant’s liability for Expenses, Insurance Costs
and Taxes for the calendar year in which said Date occurs shall be prorated
based upon a three hundred sixty-five (365) day year. Tenant’s obligation to pay
Tenant’s Proportionate Share of any unpaid Expenses, Insurance Costs, and Taxes
which are otherwise due and payable under this Lease shall survive the
expiration or earlier termination of the Term.

5. SECURITY DEPOSIT.

    5.1. Tenant shall deposit the Security Deposit with Landlord upon the
execution of this Lease. Said sum shall be held by Landlord as security for the
faithful performance by Tenant of all the terms, covenants and conditions of
this Lease to be kept and performed by Tenant and not as an advance rental
deposit or as a measure of Landlord’s damage in case of Tenant’s default. If
Tenant defaults with respect to any provision of this Lease, Landlord may use
any part of the Security Deposit for the payment of any rent or any other sum in
default, or for the payment of any amount which Landlord may spend or become
obligated to spend by reason of Tenant’s default, or to compensate Landlord for
any other loss or damage which Landlord may suffer by reason of Tenant’s
default. If any portion is so used, Tenant shall within five (5) days after
written demand therefor, deposit with Landlord an amount sufficient to restore
the Security Deposit to its original amount and Tenant’s failure to do so shall
be a material breach of this Lease. Except to such extent, if any, as shall be
required by law, Landlord shall not be required to keep the Security Deposit
separate from its general funds, and Tenant shall not be entitled to interest on
such deposit. If Tenant shall fully and faithfully perform every provision of
this Lease to be performed by it, the Security Deposit or any balance thereof
shall be returned to Tenant at such time after termination of this Lease when
Landlord shall have determined that all of Tenant’s obligations under this Lease
have been fulfilled.

    5.2. As additional security for the faithful performance by Tenant of all
covenants, conditions and agreements of this Lease, Talk America Holdings, Inc.,
(“Guarantor”) has executed and delivered to Landlord the Continuing Lease
Guaranty (the “Guaranty”), in the form attached hereto as Exhibit E,
unconditionally guaranteeing to Landlord the due and punctual payment and
performance by Tenant of all of Tenant’s obligations hereunder for the time
period and as otherwise more particularly set forth in the Guaranty. No right or
remedy available to Landlord under the Guaranty or this Lease shall extinguish
any other right to which Landlord may be entitled. In furtherance of the
foregoing, it is understood that in the event Tenant fails to perform any of its
obligations hereunder, any amounts recovered by Landlord under the Guaranty
shall not be deemed liquidated damages. Landlord may apply such sums to reduce
Landlord’s damages and such application of funds shall not preclude Landlord
from recovering from Tenant or the Guarantor jointly and severally all
additional damages incurred by Landlord by reason of Tenant’s failure to perform
hereunder.
 
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6. ALTERATIONS.

    6.1. Except for those, if any, specifically provided for in Exhibit B to
this Lease, Tenant shall not make or suffer to be made any alterations,
additions, or improvements, including, but not limited to, the attachment of any
fixtures or equipment in, on, or to the Premises or any part thereof or the
making of any improvements as required by Article 7, without the prior written
consent of Landlord. When applying for such consent, Tenant shall, if requested
by Landlord, furnish complete plans and specifications for such alterations,
additions and improvements. Landlord’s consent shall not be unreasonably
withheld with respect to alterations which (i) are not structural in nature,
(ii) are not visible from the exterior of the Building, (iii) do not affect or
require modification of the Building’s electrical, mechanical, plumbing, HVAC or
other systems, (iv) will not interfere with the use and occupancy of any other
portion of the Building by any other tenant or their invitees; (v) do not and
will not, whether alone or taken together with other improvements, require the
construction of any other improvements or alterations in other tenant’s space or
the Common Areas; and (vi) in aggregate do not cost more than $2.50 per rentable
square foot of that portion of the Premises affected by the alterations in
question.

    6.2. In the event Landlord consents to the making of any such alteration,
addition or improvement by Tenant, the same shall be made by using either
Landlord’s contractor or a contractor reasonably approved by Landlord, in either
event at Tenant’s sole cost and expense. If Tenant shall employ any contractor
other than Landlord’s contractor and such other contractor or any subcontractor
of such other contractor shall employ any non-union labor or supplier, Tenant
shall be responsible for and hold Landlord harmless from any and all delays,
damages and extra costs suffered by Landlord as a result of any dispute with any
labor unions concerning the wage, hours, terms or conditions of the employment
of any such labor. In any event Landlord may charge Tenant an administrative fee
not to exceed five percent (5%) of the cost of such work to cover its overhead
as it relates to such proposed work, plus third-party costs actually incurred by
Landlord in connection with the proposed work and the design thereof, with all
such amounts being due five (5) days after Landlord’s demand.

    6.3. All alterations, additions or improvements proposed by Tenant shall be
constructed in accordance with all government laws, ordinances, rules and
regulations, using Building standard materials where applicable, and Tenant
shall, prior to construction, provide the additional insurance required under
Article 11 in such case, and also all such assurances to Landlord as Landlord
shall reasonably require to assure payment of the costs thereof, including but
not limited to, notices of non-responsibility, waivers of lien, surety company
performance bonds and funded construction escrows and to protect Landlord and
the Building and
appurtenant land against any loss from any mechanic’s, materialmen’s or other
liens. Tenant shall pay in addition to any sums due pursuant to Article 4, any
increase in real estate taxes attributable to any such alteration, addition or
improvement for so long, during the Term, as such increase is ascertainable; at
Landlord’s election said sums shall be paid in the same way as sums due under
Article 4. Landlord may, as a condition to its consent to any particular
alterations or improvements, require Tenant to deposit with Landlord the amount
reasonably estimated by Landlord as sufficient to cover the cost of removing
such alterations or improvements and restoring the Premises, to the extent
required under Section 26.2.

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7. REPAIR.

    7.1. Landlord shall have no obligation to alter, remodel, improve, repair,
decorate or paint the Premises, except as specified in Exhibit B if attached to
this Lease and except that Landlord shall repair and maintain the structural
portions of the Building, including the basic plumbing, air conditioning,
heating and electrical systems installed or furnished by Landlord. By taking
possession of the Premises, Tenant accepts them as being in good order,
condition and repair and in the condition in which Landlord is obligated to
deliver them, except as set forth in the punch list to be delivered pursuant to
Section 2.1. It is hereby understood and agreed that no representations
respecting the condition of the Premises or the Building have been made by
Landlord to Tenant, except as specifically set forth in this Lease.

    7.2. Tenant shall, at all times during the Term, keep the Premises in good
condition and repair excepting damage by fire, or other casualty, and in
compliance with all applicable governmental laws, ordinances and regulations,
promptly complying with all governmental orders and directives for the
correction, prevention and abatement of any violations or nuisances in or upon,
or connected with, the Premises, all at Tenant’s sole expense.

    7.3. Landlord shall not be liable for any failure to make any repairs or to
perform any maintenance unless such failure shall persist for an unreasonable
time after written notice of the need of such repairs or maintenance is given to
Landlord by Tenant.

    7.4. Except as provided in Article 22, there shall be no abatement of rent
and no liability of Landlord by reason of any injury to or interference with
Tenant’s business arising from the making of any repairs, alterations or
improvements in or to any portion of the Building or the Premises or to
fixtures, appurtenances and equipment in the Building. Except to the extent, if
any, prohibited by law, Tenant waives the right to make repairs at Landlord’s
expense under any law, statute or ordinance now or hereafter in effect.

8. LIENS.

    8.1. Tenant shall keep the Premises, the Building and appurtenant land and
Tenant’s leasehold interest in the Premises free from any liens arising out of
any services, work or materials performed, furnished, or contracted for by
Tenant, or obligations incurred by Tenant. In the event that Tenant fails,
within ten (10) days following the imposition of any such lien, to either cause
the same to be released of record or provide Landlord with insurance against the
same issued by a major title insurance company or such other protection against
the same as Landlord shall accept (such failure to constitute an Event of
Default), Landlord shall have the right to cause the same to be released by such
means as it shall deem proper, including payment of the claim giving rise to
such lien. All such sums paid by Landlord and all expenses incurred by it in
connection therewith shall be payable to it by Tenant within five (5) days
Landlord’s demand.
 
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9. ASSIGNMENT AND SUBLETTING.

    9.1. Tenant shall not have the right to assign or pledge this Lease or to
sublet the whole or any part of the Premises whether voluntarily or by operation
of law, or permit the use or occupancy of the Premises by anyone other than
Tenant, and shall not make, suffer or permit such assignment, subleasing or
occupancy without the prior written consent of Landlord, such consent not to be
unreasonably withheld, and said restrictions shall be binding upon any and all
assignees of the Lease and subtenants of the Premises. In the event Tenant
desires to sublet, or permit such occupancy of, the Premises, or any portion
thereof, or assign this Lease, Tenant shall give written notice thereof to
Landlord at least sixty (60) days but no more than one hundred twenty (120) days
prior to the proposed commencement date of such subletting or assignment, which
notice shall set forth the name of the proposed subtenant or assignee, the
relevant terms of any sublease or assignment and copies of financial reports and
other relevant financial information of the proposed subtenant or assignee.

    9.2. Notwithstanding any assignment or subletting, permitted or otherwise,
Tenant shall at all times remain directly, primarily and fully responsible and
liable for the payment of the rent specified in this Lease and for compliance
with all of its other obligations under the terms, provisions and covenants of
this Lease. Upon the occurrence of an Event of Default, if the Premises or any
part of them are then assigned or sublet, Landlord, in addition to any other
remedies provided in this Lease or provided by law, may, at its option, collect
directly from such assignee or subtenant all rents due and becoming due to
Tenant under such assignment or sublease and apply such rent against any sums
due to Landlord from Tenant under this Lease, and no such collection shall be
construed to constitute a novation or release of Tenant from the further
performance of Tenant’s obligations under this Lease.

    9.3. In addition to Landlord’s right to approve of any subtenant or
assignee, Landlord shall have the option, in its sole discretion, in the event
of any proposed subletting or assignment, to terminate this Lease, or in the
case of a proposed subletting of less than the entire Premises, to recapture the
portion of the Premises to be sublet, as of the date the subletting or
assignment is to be effective. The option shall be exercised, if at all, by
Landlord giving Tenant written notice given by Landlord to Tenant within thirty
(30) days following Landlord’s receipt of Tenant’s written notice as required
above. However, if Tenant notifies Landlord, within five (5) days after receipt
of Landlord’s termination notice, that Tenant is rescinding its proposed
assignment or sublease, the termination notice shall be void and the Lease shall
continue in full force and effect; provided, however, Tenant’s failure to
rescind its proposed assignment or sublease shall be deemed a waiver of such
rescission right by Tenant. If this Lease shall be terminated with respect to
the entire Premises pursuant to this Section, the Term of this Lease shall end
on the date stated in Tenant’s notice as the effective date of the sublease or
assignment as if that date had been originally fixed in this Lease for the
expiration of the Term. If Landlord recaptures under this Section only a portion
of the Premises, the rent to be paid from time to time during the unexpired Term
shall abate proportionately based on the proportion by which the approximate
square footage of the remaining portion of the Premises shall be less than that
of the Premises as of the date immediately prior to such recapture. Tenant
shall, at Tenant’s own cost and expense, discharge in full any outstanding
commission obligation which may be due and owing as a result of any proposed
assignment or subletting, whether or not the Premises are recaptured pursuant to
this Section 9.3 and rented by Landlord to the proposed tenant or any other
tenant.

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    9.4. In the event that Tenant sells, sublets, assigns or transfers this
Lease, Tenant shall pay to Landlord as additional rent an amount equal to one
hundred percent (100%) of any Increased Rent (as defined below), less the Costs
Component (as defined below), when and as such Increased Rent is received by
Tenant. As used in this Section, “Increased Rent” shall mean the excess of (i)
all rent and other consideration which Tenant is entitled to receive by reason
of any sale, sublease, assignment or other transfer of this Lease, over (ii) the
rent otherwise payable by Tenant under this Lease at such time. For purposes of
the foregoing, any consideration received by Tenant in form other than cash
shall be valued at its fair market value as determined by Landlord in good
faith. The “Costs Component” is that amount which, if paid monthly, would fully
amortize on a straight-line basis, over the entire period for which Tenant is to
receive Increased Rent, the reasonable costs incurred by Tenant for leasing
commissions and tenant improvements in connection with such sublease, assignment
or other transfer; (excluding therefrom, however, any costs or expenses
attributable to any vacancy factor).

    9.5. Notwithstanding any other provision hereof, it shall be considered
reasonable for Landlord to withhold its consent to any assignment of this Lease
or sublease of any portion of the Premises if at the time of either Tenant’s
notice of the proposed assignment or sublease or the proposed commencement date
thereof, there shall exist any uncured default of Tenant or matter which will
become a default of Tenant with passage of time unless cured, or if the proposed
assignee or sublessee is an entity: (a) with which Landlord is already in
negotiation; (b) is already an occupant of the Building unless Landlord is
unable to provide the amount of space required by such occupant; (c) is a
governmental agency; (d) is incompatible with the character of occupancy of the
Building; (e) with which the payment for the sublease or assignment is
determined in whole or in part based upon its net income or profits; or (f)
would subject the Premises to a use which would: (i) involve increased personnel
or wear upon the Building; (ii) violate any exclusive right granted to another
tenant of the Building; (iii) require any addition to or modification of the
Premises or the Building in order to comply with building code or other
governmental requirements; or, (iv) involve a violation of Section 1.2. Tenant
expressly agrees that for the purposes of any statutory or other requirement of
reasonableness on the part of Landlord, Landlord’s refusal to consent to any
assignment or sublease for any of the reasons described in this Section 9.5,
shall be conclusively deemed to be reasonable.

    9.6. Upon any request to assign or sublet, Tenant will pay to Landlord the
Assignment/Subletting Fee plus, on demand, a sum equal to all of Landlord’s
costs, including reasonable attorney’s fees, incurred in investigating and
considering any proposed or purported assignment or pledge of this Lease or
sublease of any of the Premises, regardless of whether Landlord shall consent
to, refuse consent, or determine that Landlord’s consent is not required for,
such assignment, pledge or sublease. Any purported sale, assignment, mortgage,
transfer of this Lease or subletting which does not comply with the provisions
of this Article 9 shall be void.

    9.7. If Tenant is a corporation, limited liability company, partnership or
trust, any transfer or transfers of or change or changes within any twelve (12)
month period in the number of the outstanding voting shares of the corporation
or limited liability company, the general partnership interests in the
partnership or the identity of the persons or entities controlling the
activities of such partnership or trust resulting in the persons or entities
owning or controlling a majority of such shares, partnership interests or
activities of such partnership or trust at the beginning of such period no
longer having such ownership or control shall be regarded as equivalent to an
assignment of this Lease to the persons or entities acquiring such ownership or
control and shall be subject to all the provisions of this Article 9 to the same
extent and for all intents and purposes as though such an assignment.

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10. INDEMNIFICATION.

    10.1. None of the Landlord Entities shall be liable and Tenant hereby waives
all claims against them for any damage to any property or any injury to any
person in or about the Premises or the Building by or from any cause whatsoever
(including without limiting the foregoing, rain or water leakage of any
character from the roof, windows, walls, basement, pipes, plumbing works or
appliances, the Building not being in good condition or repair, gas, fire, oil,
electricity or theft), except to the extent caused by or arising from the gross
negligence or willful misconduct of Landlord or its agents, employees or
contractors. Tenant shall protect, indemnify and hold the Landlord Entities
harmless from and against any and all loss, claims, liability or costs
(including court costs and attorney’s fees) incurred by reason of (a) any damage
to any property (including but not limited to property of any Landlord Entity)
or any injury (including but not limited to death) to any person occurring in,
on or about the Premises or the Building to the extent that such injury or
damage shall be caused by or arise from any actual or alleged act, neglect,
fault, or omission by or of Tenant or any Tenant Entity to meet any standards
imposed by any duty with respect to the injury or damage; (b) the conduct or
management of any work or thing whatsoever done by the Tenant in or about the
Premises or from transactions of the Tenant concerning the Premises; (c)
Tenant’s failure to comply with any and all governmental laws, ordinances and
regulations applicable to the condition or use of the Premises or its occupancy;
or (d) any breach or default on the part of Tenant in the performance of any
covenant or agreement on the part of the Tenant to be performed pursuant to this
Lease. The provisions of this Article shall survive the termination of this
Lease with respect to any claims or liability accruing prior to such
termination.

11. INSURANCE.

     11.1. Tenant shall keep in force throughout the Term: (a) a Commercial
General Liability insurance policy or policies to protect the Landlord Entities
against any liability to the public or to any invitee of Tenant or a Landlord
Entity incidental to the use of or resulting from any accident occurring in or
upon the Premises with a limit of not less than $1,000,000.00 per occurrence and
not less than $2,000,000.00 in the annual aggregate, or such larger amount as
Landlord may prudently require from time to time, covering bodily injury and
property damage liability and $1,000,000 products/completed operations
aggregate; (b) Business Auto Liability covering owned, non-owned and hired
vehicles with a limit of not less than $1,000,000 per accident; (c) insurance
protecting against liability under Worker’s Compensation Laws with limits at
least as required by statute with Employers Liability with limits of $500,000
each accident, $500,000 disease policy limit, $500,000 disease--each employee;
(d) All Risk or Special Form coverage protecting Tenant against loss of or
damage to Tenant’s alterations, additions, improvements, carpeting, floor
coverings, panelings, decorations, fixtures, inventory and other business
personal property situated in or about the Premises to the full replacement
value of the property so insured; and, (e) Business Interruption Insurance with
limit of liability representing loss of at least approximately six (6) months of
income.

    11.2. The aforesaid policies shall (a) be provided at Tenant’s expense; (b)
name the Landlord Entities as additional insureds (General Liability) and loss
payee (Property—Special Form); (c) be issued by an insurance company with a
minimum Best’s rating of “A:VII” during the Term; and (d) provide that said
insurance shall be written on an occurrence basis and shall not be canceled
unless thirty (30) days prior written notice (ten days for non-payment of
premium) shall have been given to Landlord; a certificate of Liability insurance
on ACORD Form 25 and a certificate of Property insurance on ACORD Form 27 shall
be delivered to Landlord by Tenant upon the Commencement Date and at least
thirty (30) days prior to each renewal of said insurance.

      11.3. Whenever Tenant shall undertake any alterations, additions or
improvements in, to or about the Premises (“Work”) the aforesaid insurance
protection must extend to and include injuries to persons and damage to property
arising in connection with such Work, without limitation including liability
under any applicable structural work act, and such other insurance as Landlord
shall require; and the policies of or certificates evidencing such insurance
must be delivered to Landlord prior to the commencement of any such Work.

12. WAIVER OF SUBROGATION.

    12.1. So long as their respective insurers so permit, Tenant and Landlord
hereby mutually waive their respective rights of recovery against each other for
any property loss insured by fire, extended coverage, All Risks or other
insurance now or hereafter existing for the benefit of the respective party but
only to the extent of the net insurance proceeds payable under such policies.
Each party shall obtain any special endorsements required by their insurer to
evidence compliance with the aforementioned waiver.

13. SERVICES AND UTILITIES.

    13.1. Provided Tenant shall not be in default under this Lease, and subject
to the other provisions of this Lease, Landlord agrees to furnish to the
Premises during Building Business Hours (specified on the Reference Pages) on
generally recognized business days (but exclusive in any event of Sundays and
national and local legal holidays), the following services and utilities subject
to the rules and regulations of the Building prescribed from time to time: (a)
water suitable for normal office use of the Premises; (b) heat and air
conditioning required in Landlord’s judgment for the use and occupation of the
Premises during Building Business Hours; (c) cleaning and janitorial service;
(d) elevator service by nonattended automatic elevators, if applicable; and, (e)
equipment to bring to the Premises electricity for lighting, convenience outlets
and other normal office use. To the extent that Tenant is not billed directly by
a public utility, Tenant shall pay, within five (5) days of Landlord’s demand,
for all electricity used by Tenant in the Premises. The charge shall be at the
rates charged for such services by the local public utility. Alternatively,
Landlord may elect to include electricity costs in Expenses. In the absence of
Landlord’s gross negligence or willful misconduct, Landlord shall not be liable
for, and Tenant shall not be entitled to, any abatement or reduction of rental
by reason of Landlord’s failure to furnish any of the foregoing, unless such
failure shall persist for an unreasonable time after written notice of such
failure is given to Landlord by Tenant and provided further that Landlord shall
not be liable when such failure is caused by accident, breakage, repairs, labor
disputes of any character, energy usage restrictions or by any other cause,
similar or dissimilar, beyond the reasonable control of Landlord. Landlord shall
use reasonable efforts to remedy any interruption in the furnishing of services
and utilities.

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    13.2. Should Tenant require any additional work or service, as described
above, including services furnished outside ordinary business hours specified
above, Landlord may, on terms to be agreed, upon reasonable advance notice by
Tenant, furnish such additional service and Tenant agrees to pay Landlord such
charges as may be agreed upon, including any tax imposed thereon, but in no
event at a charge less than Landlord’s actual cost plus overhead for such
additional service and, where appropriate, a reasonable allowance for
depreciation of any systems being used to provide such service. The current
charge for after-hours HVAC service, which is subject to change at any time, is
specified on the Reference Pages.

    13.3. Wherever heat-generating machines or equipment are used by Tenant in
the Premises which affect the temperature otherwise maintained by the air
conditioning system or Tenant allows occupancy of the Premises by more persons
than the heating and air conditioning system is designed to accommodate, in
either event whether with or without Landlord’s approval, Landlord reserves the
right to install supplementary heating and/or air conditioning units in or for
the benefit of the Premises and the cost thereof, including the cost of
installation and the cost of operations and maintenance, shall be paid by Tenant
to Landlord within five (5) days of Landlord’s demand.

    13.4. Tenant will not, without the written consent of Landlord, use any
apparatus or device in the Premises, including but not limited to, electronic
data processing machines and machines using current in excess of 2000 watts
and/or 20 amps or 120 volts, which will in any way increase the amount of
electricity or water usually furnished or supplied for use of the Premises for
normal office use, nor connect with electric current, except through existing
electrical outlets in the Premises, or water pipes, any apparatus or device for
the purposes of using electrical current or water. If Tenant shall require water
or electric current in excess of that usually furnished or supplied for use of
the Premises as normal office use, Tenant shall procure the prior written
consent of Landlord for the use thereof, which Landlord may refuse, and if
Landlord does consent, Landlord may cause a water meter or electric current
meter to be installed so as to measure the amount of such excess water and
electric current. The cost of any such meters shall be paid for by Tenant.
Tenant agrees to pay to Landlord within five (5) days of Landlord’s demand , the
cost of all such excess water and electric current consumed (as shown by said
meters, if any, or, if none, as reasonably estimated by Landlord) at the rates
charged for such services by the local public utility or agency, as the case may
be, furnishing the same, plus any additional expense incurred in keeping account
of the water and electric current so consumed.
 
    13.5. Tenant will not, without the written consent of Landlord, contract
with a utility provider to service the Premises with any utility, including, but
not limited to, telecommunications, electricity, water, sewer or gas, which is
not previously providing such service to other tenants in the Building. Subject
to Landlord’s reasonable rules and regulations and the provisions of Articles 6
and 26, Tenant shall be entitled to the use of wiring (“Communications Wiring”)
from the existing telecommunications nexus in the Building to the Premises,
sufficient for normal general office use of the Premises. Tenant shall not
install any additional Communications Wiring, nor remove any Communications
Wiring, without in each instance obtaining the prior written consent of
Landlord, which consent may be withheld in Landlord’s sole and absolute
discretion. Landlord’s shall in no event be liable for disruption in any service
obtained by Tenant pursuant to this paragraph.

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14. HOLDING OVER.

    14.1. Tenant shall pay Landlord for each day Tenant retains possession of
the Premises or part of them after termination of this Lease by lapse of time or
otherwise at the rate (“Holdover Rate”) which shall be Two Hundred Percent
(200%) of the greater of (a) the amount of the Annual Rent for the last period
prior to the date of such termination plus all Rent Adjustments under Article 4;
and (b) the then market rental value of the Premises as determined by Landlord
assuming a new lease of the Premises of the then usual duration and other terms,
in either case, prorated on a daily basis, and also pay all damages sustained by
Landlord by reason of such retention. If Landlord gives notice to Tenant of
Landlord’s election to such effect, such holding over shall constitute renewal
of this Lease for a period from month to month or one (1) year, whichever shall
be specified in such notice, in either case at the Holdover Rate, but if the
Landlord does not so elect, no such renewal shall result notwithstanding
acceptance by Landlord of any sums due hereunder after such termination; and
instead, a tenancy at sufferance at the Holdover Rate shall be deemed to have
been created. In any event, no provision of this Article 14 shall be deemed to
waive Landlord’s right of reentry or any other right under this Lease or at law.

15. SUBORDINATION.

    15.1. Without the necessity of any additional document being executed by
Tenant for the purpose of effecting a subordination, this Lease shall be subject
and subordinate at all times to ground or underlying leases and to the lien of
any mortgages or deeds of trust now or hereafter placed on, against or affecting
the Building, Landlord’s interest or estate in the Building, or any ground or
underlying lease; provided, however, that if the lessor, mortgagee, trustee, or
holder of any such mortgage or deed of trust elects to have Tenant’s interest in
this Lease be superior to any such instrument, then, by notice to Tenant, this
Lease shall be deemed superior, whether this Lease was executed before or after
said instrument. Notwithstanding the foregoing, Tenant covenants and agrees to
execute and deliver within ten (10) days of Landlord’s request such further
instruments evidencing such subordination or superiority of this Lease as may be
required by Landlord.

16. RULES AND REGULATIONS.

    16.1. Tenant shall faithfully observe and comply with all the rules and
regulations as set forth in Exhibit D to this Lease and all reasonable and
non-discriminatory modifications of and additions to them from time to time put
into effect by Landlord. Landlord shall not be responsible to Tenant for the
non-performance by any other tenant or occupant of the Building of any such
rules and regulations.
 
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17. REENTRY BY LANDLORD.

   17.1. Landlord reserves and shall at all times have the right to re-enter the
Premises to inspect the same, to supply janitor service and any other service to
be provided by Landlord to Tenant under this Lease, to show said Premises to
prospective purchasers, mortgagees or tenants, and to alter, improve or repair
the Premises and any portion of the Building, without abatement of rent, and may
for that purpose erect, use and maintain scaffolding, pipes, conduits and other
necessary structures and open any wall, ceiling or floor in and through the
Building and Premises where reasonably required by the character of the work to
be performed, provided entrance to the Premises shall not be blocked thereby,
and further provided that the business of Tenant shall not be interfered with
unreasonably. Landlord shall have the right at any time to change the
arrangement and/or locations of entrances, or passageways, doors and doorways,
and corridors, windows, elevators, stairs, toilets or other public parts of the
Building and to change the name, number or designation by which the Building is
commonly known. In the event that Landlord damages any portion of any wall or
wall covering, ceiling, or floor or floor covering within the Premises, Landlord
shall repair or replace the damaged portion to match the original as nearly as
commercially reasonable but shall not be required to repair or replace more than
the portion actually damaged. Tenant hereby waives any claim for damages for any
injury or inconvenience to or interference with Tenant’s business, any loss of
occupancy or quiet enjoyment of the Premises, and any other loss occasioned by
any action of Landlord authorized by this Article 17.

    17.2. For each of the aforesaid purposes, Landlord shall at all times have
and retain a key with which to unlock all of the doors in the Premises,
excluding Tenant’s vaults and safes or special security areas (designated in
advance), and Landlord shall have the right to use any and all means which
Landlord may deem proper to open said doors in an emergency to obtain entry to
any portion of the Premises. As to any portion to which access cannot be had by
means of a key or keys in Landlord’s possession, Landlord is authorized to gain
access by such means as Landlord shall elect and the cost of repairing any
damage occurring in doing so shall be borne by Tenant and paid to Landlord
within five (5) days of Landlord’s demand.

18. DEFAULT.

    18.1. Except as otherwise provided in Article 20, the following events shall
be deemed to be Events of Default under this Lease:

    18.1.1. Tenant shall fail to pay when due any sum of money becoming due to
be paid to Landlord under this Lease, whether such sum be any installment of the
rent reserved by this Lease, any other amount treated as additional rent under
this Lease, or any other payment or reimbursement to Landlord required by this
Lease, whether or not treated as additional rent under this Lease, and such
failure shall continue for a period of five (5) days after written notice that
such payment was not made when due, but if any such notice shall be given, for
the twelve (12) month period commencing with the date of such notice, the
failure to pay within five (5) days after due any additional sum of money
becoming due to be paid to Landlord under this Lease during such period shall be
an Event of Default, without notice.

    18.1.2. Tenant shall fail to comply with any term, provision or covenant of
this Lease which is not provided for in another Section of this Article and
shall not cure such failure within twenty (20) days (forthwith, if the failure
involves a hazardous condition) after written notice of such failure to Tenant
provided, however, that such failure shall not be an event of default if such
failure could not reasonably be cured during such twenty (20) day period, Tenant
has commenced the cure within such twenty (20) day period and thereafter is
diligently pursuing such cure to completion, but the total aggregate cure period
shall not exceed ninety (90) days.

    18.1.3. Tenant shall fail to vacate the Premises immediately upon
termination of this Lease, by lapse of time or otherwise, or upon termination of
Tenant’s right to possession only.

    18.1.4. Tenant shall become insolvent, admit in writing its inability to pay
its debts generally as they become due, file a petition in bankruptcy or a
petition to take advantage of any insolvency statute, make an assignment for the
benefit of creditors, make a transfer in fraud of creditors, apply for or
consent to the appointment of a receiver of itself or of the whole or any
substantial part of its property, or file a petition or answer seeking
reorganization or arrangement under the federal bankruptcy laws, as now in
effect or hereafter amended, or any other applicable law or statute of the
United States or any state thereof.

    18.1.5. A court of competent jurisdiction shall enter an order, judgment or
decree adjudicating Tenant bankrupt, or appointing a receiver of Tenant, or of
the whole or any substantial part of its property, without the consent of
Tenant, or approving a petition filed against Tenant seeking reorganization or
arrangement of Tenant under the bankruptcy laws of the United States, as now in
effect or hereafter amended, or any state thereof, and such order, judgment or
decree shall not be vacated or set aside or stayed within sixty (60) days from
the date of entry thereof.

    18.1.6. Any Event of Default by Talk America Holdings, Inc. as that term is
defined by the Reston II Lease shall be an Event of Default hereunder without
any notice or opportunity for cure.

    18.1.7. Guarantor shall become insolvent, admit in writing its inability to
pay its debts generally as they become due, file a petition in bankruptcy or a
petition to take advantage of any insolvency statute, make an assignment for the
benefit of creditors, make a transfer in fraud of creditors, apply for or
consent to the appointment of a receiver of itself or of the whole or any
substantial part of its property, or file a petition or answer seeking
reorganization or arrangement under the federal bankruptcy laws, as now in
effect or hereafter amended, or any other applicable law or statute of the
United States or any state thereof.
 
    18.1.8. A court of competent jurisdiction shall enter an order, judgment or
decree adjudicating Guarantor bankrupt, or appointing a receiver of Guarantor,
or of the whole or any substantial part of its property, without the consent of
Guarantor, or approving a petition filed against Guarantor seeking
reorganization or arrangement of Guarantor under the bankruptcy laws of the
United States, as now in effect or hereafter amended, or any state thereof, and
such order, judgment or decree shall not be vacated or set aside or stayed
within sixty (60) days from the date of entry thereof.
 
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19. REMEDIES.

    19.1. Except as otherwise provided in Article 20, upon the occurrence of any
of the Events of Default described or referred to in Article 18, Landlord shall
have the option to pursue any one or more of the following remedies without any
notice or demand whatsoever, concurrently or consecutively and not
alternatively:

      19.1.1. Landlord may, at its election, terminate this Lease or terminate
Tenant’s right to possession only, without terminating the Lease.

       19.1.2. Upon any termination of this Lease, whether by lapse of time or
otherwise, or upon any termination of Tenant’s right to possession without
termination of the Lease, Tenant shall surrender possession and vacate the
Premises immediately, and deliver possession thereof to Landlord, and Tenant
hereby grants to Landlord full and free license to enter into and upon the
Premises in such event and to repossess Landlord of the Premises as of
Landlord’s former estate and to expel or remove Tenant and any others who may be
occupying or be within the Premises and to remove Tenant’s signs and other
evidence of tenancy and all other property of Tenant therefrom without being
deemed in any manner guilty of trespass, eviction or forcible entry or detainer,
and without incurring any liability for any damage resulting therefrom, Tenant
waiving any right to claim damages for such re-entry and expulsion, and without
relinquishing Landlord’s right to rent or any other right given to Landlord
under this Lease or by operation of law.

        19.1.3. Upon any termination of this Lease, whether by lapse of time or
otherwise, Landlord shall be entitled to recover as damages, all rent, including
any amounts treated as additional rent under this Lease, and other sums due and
payable by Tenant on the date of termination, plus as liquidated damages and not
as a penalty, an amount equal to the sum of: (a) an amount equal to the then
present value of the rent reserved in this Lease for the residue of the stated
Term of this Lease including any amounts treated as additional rent under this
Lease and all other sums provided in this Lease to be paid by Tenant, minus the
fair rental value of the Premises for such residue; (b) the value of the time
and expense necessary to obtain a replacement tenant or tenants, and the
estimated expenses described in Section 19.1.4 relating to recovery of the
Premises, preparation for reletting and for reletting itself; and (c) the cost
of performing any other covenants which would have otherwise been performed by
Tenant.
 
        19.1.4. Upon any termination of Tenant’s right to possession only
without termination of the Lease:

        19.1.4.1. Neither such termination of Tenant’s right to possession nor
Landlord’s taking and holding possession thereof as provided in Section 19.1.2
shall terminate the Lease or release Tenant, in whole or in part, from any
obligation, including Tenant’s obligation to pay the rent, including any amounts
treated as additional rent, under this Lease for the full Term, and if Landlord
so elects Tenant shall continue to pay to Landlord the entire amount of the rent
as and when it becomes due, including any amounts treated as additional rent
under this Lease, for the remainder of the Term plus any other sums provided in
this Lease to be paid by Tenant for the remainder of the Term.

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        19.1.4.2. Landlord shall use commercially reasonable efforts to relet
the Premises or portions thereof to the extent required by applicable law.
Landlord and Tenant agree that nevertheless Landlord shall at most be required
to use only the same efforts Landlord then uses to lease premises in the
Building generally and that in any case that Landlord shall not be required to
give any preference or priority to the showing or leasing of the Premises or
portions thereof over any other space that Landlord may be leasing or have
available and may place a suitable prospective tenant in any such other space
regardless of when such other space becomes available and that Landlord shall
have the right to relet the Premises for a greater or lesser term than that
remaining under this Lease, the right to relet only a portion of the Premises,
or a portion of the Premises or the entire Premises as a part of a larger area,
and the right to change the character or use of the Premises. In connection with
or in preparation for any reletting, Landlord may, but shall not be required to,
make repairs, alterations and additions in or to the Premises and redecorate the
same to the extent Landlord deems necessary or desirable, and Tenant shall pay
the cost thereof, together with Landlord’s expenses of reletting, including,
without limitation, any commission incurred by Landlord, within five (5) days of
Landlord’s demand. Landlord shall not be required to observe any instruction
given by Tenant about any reletting or accept any tenant offered by Tenant
unless such offered tenant has a credit-worthiness acceptable to Landlord and
leases the entire Premises upon terms and conditions including a rate of rent
(after giving effect to all expenditures by Landlord for tenant improvements,
broker’s commissions and other leasing costs) all no less favorable to Landlord
than as called for in this Lease, nor shall Landlord be required to make or
permit any assignment or sublease for more than the current term or which
Landlord would not be required to permit under the provisions of Article 9.

        19.1.4.3. Until such time as Landlord shall elect to terminate the Lease
and shall thereupon be entitled to recover the amounts specified in such case in
Section 19.1.3, Tenant shall pay to Landlord upon demand the full amount of all
rent, including any amounts treated as additional rent under this Lease and
other sums reserved in this Lease for the remaining Term, together with the
costs of repairs, alterations, additions, redecorating and Landlord’s expenses
of reletting and the collection of the rent accruing therefrom (including
reasonable attorney’s fees and broker’s commissions), as the same shall then be
due or become due from time to time, less only such consideration as Landlord
may have received from any reletting of the Premises; and Tenant agrees that
Landlord may file suits from time to time to recover any sums falling due under
this Article 19 as they become due. Any proceeds of reletting by Landlord in
excess of the amount then owed by Tenant to Landlord from time to time shall be
credited against Tenant’s future obligations under this Lease but shall not
otherwise be refunded to Tenant or inure to Tenant’s benefit.

    19.2. Upon the occurrence of an Event of Default, Landlord may (but shall
not be obligated to) cure such default at Tenant’s sole expense. Without
limiting the generality of the foregoing, Landlord may, at Landlord’s option,
enter into and upon the Premises if Landlord determines in its sole discretion
that Tenant is not acting within a commercially reasonable time to maintain,
repair or replace anything for which Tenant is responsible under this Lease or
to otherwise effect compliance with its obligations under this Lease and correct
the same, without being deemed in any manner guilty of trespass, eviction or
forcible entry and detainer and without incurring any liability for any damage
or interruption of Tenant’s business resulting therefrom and Tenant agrees to
reimburse Landlord within five (5) days of Landlord’s demand as additional rent,
for any expenses which Landlord may incur in thus effecting compliance with
Tenant’s obligations under this Lease, plus interest from the date of
expenditure by Landlord at the Wall Street Journal prime rate.

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    19.3. Tenant understands and agrees that in entering into this Lease,
Landlord is relying upon receipt of all the Annual and Monthly Installments of
Rent to become due with respect to all the Premises originally leased hereunder
over the full Initial Term of this Lease for amortization, including interest at
the Amortization Rate. For purposes hereof, the “Concession Amount” shall be
defined as the aggregate of all amounts forgone or expended by Landlord as free
rent under the lease, under Exhibit B hereof for construction allowances
(excluding therefrom any amounts expended by Landlord for Landlord’s Work, as
defined in Exhibit B), and for brokers’ commissions payable by reason of this
Lease. Accordingly, Tenant agrees that if this Lease or Tenant’s right to
possession of the Premises leased hereunder shall be terminated as of any date
(“Default Termination Date”) prior to the expiration of the full Initial Term
hereof by reason of a default of Tenant, there shall be due and owing to
Landlord as of the day prior to the Default Termination Date, as rent in
addition to all other amounts owed by Tenant as of such Date, the amount
(“Unamortized Amount”) of the Concession Amount determined as set forth below;
provided, however, that in the event that such amounts are recovered by Landlord
pursuant to any other provision of this Article 19, Landlord agrees that it
shall not attempt to recover such amounts pursuant to this Paragraph

    19.4. If, on account of any breach or default by Tenant in Tenant’s
obligations under the terms and conditions of this Lease, it shall become
necessary or appropriate for Landlord to employ or consult with an attorney or
collection agency concerning or to enforce or defend any of Landlord’s rights or
remedies arising under this Lease or to collect any sums due from Tenant, Tenant
agrees to pay all costs and fees so incurred by Landlord, including, without
limitation, reasonable attorneys’ fees and costs. TENANT EXPRESSLY WAIVES ANY
RIGHT TO: (A) TRIAL BY JURY; AND (B) SERVICE OF ANY NOTICE REQUIRED BY ANY
PRESENT OR FUTURE LAW OR ORDINANCE APPLICABLE TO LANDLORDS OR TENANTS BUT NOT
REQUIRED BY THE TERMS OF THIS LEASE.

    19.5. Pursuit of any of the foregoing remedies shall not preclude pursuit of
any of the other remedies provided in this Lease or any other remedies provided
by law (all such remedies being cumulative), nor shall pursuit of any remedy
provided in this Lease constitute a forfeiture or waiver of any rent due to
Landlord under this Lease or of any damages accruing to Landlord by reason of
the violation of any of the terms, provisions and covenants contained in this
Lease.

    19.6. No act or thing done by Landlord or its agents during the Term shall
be deemed a termination of this Lease or an acceptance of the surrender of the
Premises, and no agreement to terminate this Lease or accept a surrender of said
Premises shall be valid, unless in writing signed by Landlord. No waiver by
Landlord of any violation or breach of any of the terms, provisions and
covenants contained in this Lease shall be deemed or construed to constitute a
waiver of any other violation or breach of any of the terms, provisions and
covenants contained in this Lease. Landlord’s acceptance of the payment of
rental or other payments after the occurrence of an Event of Default shall not
be construed as a waiver of such Default, unless Landlord so notifies Tenant in
writing. Forbearance by Landlord in enforcing one or more of the remedies
provided in this Lease upon an Event of Default shall not be deemed or construed
to constitute a waiver of such Default or of Landlord’s right to enforce any
such remedies with respect to such Default or any subsequent Default.

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    19.7. Any and all property which may be removed from the Premises by
Landlord pursuant to the authority of this Lease or of law, to which Tenant is
or may be entitled, may be handled, removed and/or stored, as the case may be,
by or at the direction of Landlord but at the risk, cost and expense of Tenant,
and Landlord shall in no event be responsible for the value, preservation or
safekeeping thereof. Tenant shall pay to Landlord, upon demand, any and all
expenses incurred in such removal and all storage charges against such property
so long as the same shall be in Landlord’s possession or under Landlord’s
control. Any such property of Tenant not retaken by Tenant from storage within
thirty (30) days after removal from the Premises shall, at Landlord’s option, be
deemed conveyed by Tenant to Landlord under this Lease as by a bill of sale
without further payment or credit by Landlord to Tenant.

    19.8. If more than one (1) Event of Default occurs during the Term or any
renewal thereof, Tenant’s renewal options, expansion options, purchase options
and rights of first offer and/or refusal, if any are provided for in this Lease,
shall be null and void.

20. TENANT’S BANKRUPTCY OR INSOLVENCY.

    20.1. If at any time and for so long as Tenant shall be subjected to the
provisions of the United States Bankruptcy Code or other law of the United
States or any state thereof for the protection of debtors as in effect at such
time (each a “Debtor’s Law”):

        20.1.1. Tenant, Tenant as debtor-in-possession, and any trustee or
receiver of Tenant’s assets (each a “Tenant’s Representative”) shall have no
greater right to assume or assign this Lease or any interest in this Lease, or
to sublease any of the Premises than accorded to Tenant in Article 9, except to
the extent Landlord shall be required to permit such assumption, assignment or
sublease by the provisions of such Debtor’s Law. Without limitation of the
generality of the foregoing, any right of any Tenant’s Representative to assume
or assign this Lease or to sublease any of the Premises shall be subject to the
conditions that:

        20.1.1.1. Such Debtor’s Law shall provide to Tenant’s Representative a
right of assumption of this Lease which Tenant’s Representative shall have
timely exercised and Tenant’s Representative shall have fully cured any default
of Tenant under this Lease.
 
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        20.1.1.2. Tenant’s Representative or the proposed assignee, as the case
shall be, shall have deposited with Landlord as security for the timely payment
of rent an amount equal to the larger of: (a) three (3) months’ rent and other
monetary charges accruing under this Lease; and (b) any sum specified in Article
4; and shall have provided Landlord with adequate other assurance of the future
performance of the obligations of the Tenant under this Lease. Without
limitation, such assurances shall include, at least, in the case of assumption
of this Lease, demonstration to the satisfaction of the Landlord that Tenant’s
Representative has and will continue to have sufficient unencumbered assets
after the payment of all secured obligations and administrative expenses to
assure Landlord that Tenant’s Representative will have sufficient funds to
fulfill the obligations of Tenant under this Lease; and, in the case of
assignment, submission of current financial statements of the proposed assignee,
audited by an independent certified public accountant reasonably acceptable to
Landlord and showing a net worth and working capital in amounts determined by
Landlord to be sufficient to assure the future performance by such assignee of
all of the Tenant’s obligations under this Lease.

        20.1.1.3. The assumption or any contemplated assignment of this Lease or
subleasing any part of the Premises, as shall be the case, will not breach any
provision in any other lease, mortgage, financing agreement or other agreement
by which Landlord is bound.

        20.1.1.4. Landlord shall have, or would have had absent the Debtor’s
Law, no right under Article 9 to refuse consent to the proposed assignment or
sublease by reason of the identity or nature of the proposed assignee or
sublessee or the proposed use of the Premises concerned.

21. QUIET ENJOYMENT.

    21.1. Landlord represents and warrants that it has full right and authority
to enter into this Lease and that Tenant, while paying the rental and performing
its other covenants and agreements contained in this Lease, shall peaceably and
quietly have, hold and enjoy the Premises for the Term without hindrance or
molestation from Landlord subject to the terms and provisions of this Lease.
Landlord shall not be liable for any interference or disturbance by other
tenants or third persons, nor shall Tenant be released from any of the
obligations of this Lease because of such interference or disturbance.
 
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22. CASUALTY - 22 - M:\26954\Reston I\Talk America Holdings\Talk America, Inc.
Lease Agreement.doc 10/28/2004 9:59 AM

    22.1. In the event the Premises or the Building are damaged by fire or other
cause and in Landlord’s reasonable estimation such damage can be materially
restored within one hundred eighty (180) days, Landlord shall forthwith repair
the same and this Lease shall remain in full force and effect, except that
Tenant shall be entitled to a proportionate abatement in rent from the date of
such damage. Such abatement of rent shall be made pro rata in accordance with
the extent to which the damage and the making of such repairs shall interfere
with the use and occupancy by Tenant of the Premises from time to time. Within
forty-five (45) days from the date of such damage, Landlord shall notify Tenant,
in writing, of Landlord’s reasonable estimation of the length of time within
which material restoration can be made, and Landlord’s determination shall be
binding on Tenant. For purposes of this Lease, the Building or Premises shall be
deemed “materially restored” if they are in such condition as would not prevent
or materially interfere with Tenant’s use of the Premises for the purpose for
which it was being used immediately before such damage.

    22.2. If such repairs cannot, in Landlord’s reasonable estimation, be made
within one hundred eighty (180) days, Landlord and Tenant shall each have the
option of giving the other, at any time within ninety (90) days after such
damage, notice terminating this Lease as of the date of such damage. In the
event of the giving of such notice, this Lease shall expire and all interest of
the Tenant in the Premises shall terminate as of the date of such damage as if
such date had been originally fixed in this Lease for the expiration of the
Term. In the event that neither Landlord nor Tenant exercises its option to
terminate this Lease, then Landlord shall repair or restore such damage, this
Lease continuing in full force and effect, and the rent hereunder shall be
proportionately abated as provided in Section 22.1.

    22.3. Landlord shall not be required to repair or replace any damage or loss
by or from fire or other cause to any panelings, decorations, partitions,
additions, railings, ceilings, floor coverings, office fixtures or any other
property or improvements installed on the Premises by, or belonging to, Tenant.
Any insurance which may be carried by Landlord or Tenant against loss or damage
to the Building or Premises shall be for the sole benefit of the party carrying
such insurance and under its sole control.

    22.4. In the event that Landlord should fail to complete such repairs and
material restoration within sixty (60) days after the date estimated by Landlord
therefor as extended by this Section 22.4, Tenant may at its option and as its
sole remedy terminate this Lease by delivering written notice to Landlord,
within fifteen (15) days after the expiration of said period of time, whereupon
the Lease shall end on the date of such notice or such later date fixed in such
notice as if the date of such notice was the date originally fixed in this Lease
for the expiration of the Term; provided, however, that if construction is
delayed because of changes, deletions or additions in construction requested by
Tenant, strikes, lockouts, casualties, Acts of God, war, material or labor
shortages, government regulation or control or other causes beyond the
reasonable control of Landlord, the period for restoration, repair or rebuilding
shall be extended for the amount of time Landlord is so delayed.

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    22.5. Notwithstanding anything to the contrary contained in this Article:
(a) Landlord shall not have any obligation whatsoever to repair, reconstruct, or
restore the Premises when the damages resulting from any casualty covered by the
provisions of this Article 22 occur during the last twelve (12) months of the
Term or any extension thereof, but if Landlord determines not to repair such
damages Landlord shall notify Tenant and if such damages shall render any
material portion of the Premises untenantable Tenant shall have the right to
terminate this Lease by notice to Landlord within fifteen (15) days after
receipt of Landlord’s notice; and (b) in the event the holder of any
indebtedness secured by a mortgage or deed of trust covering the Premises or
Building requires that any insurance proceeds be applied to such indebtedness,
then Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within fifteen (15) days after such requirement
is made by any such holder, whereupon this Lease shall end on the date of such
damage as if the date of such damage were the date originally fixed in this
Lease for the expiration of the Term.

    22.6. In the event of any damage or destruction to the Building or Premises
by any peril covered by the provisions of this Article 22, it shall be Tenant’s
responsibility to properly secure the Premises and upon notice from Landlord to
remove forthwith, at its sole cost and expense, such portion of all of the
property belonging to Tenant or its licensees from such portion or all of the
Building or Premises as Landlord shall request.

23. EMINENT DOMAIN.

    23.1. If all or any substantial part of the Premises shall be taken or
appropriated by any public or quasi-public authority under the power of eminent
domain, or conveyance in lieu of such appropriation, either party to this Lease
shall have the right, at its option, of giving the other, at any time within
thirty (30) days after such taking, notice terminating this Lease, except that
Tenant may only terminate this Lease by reason of taking or appropriation, if
such taking or appropriation shall be so substantial as to materially interfere
with Tenant’s use and occupancy of the Premises. If neither party to this Lease
shall so elect to terminate this Lease, the rental thereafter to be paid shall
be adjusted on a fair and equitable basis under the circumstances. In addition
to the rights of Landlord above, if any substantial part of the Building shall
be taken or appropriated by any public or quasi-public authority under the power
of eminent domain or conveyance in lieu thereof, and regardless of whether the
Premises or any part thereof are so taken or appropriated, Landlord shall have
the right, at its sole option, to terminate this Lease. Landlord shall be
entitled to any and all income, rent, award, or any interest whatsoever in or
upon any such sum, which may be paid or made in connection with any such public
or quasi-public use or purpose, and Tenant hereby assigns to Landlord any
interest it may have in or claim to all or any part of such sums, other than any
separate award which may be made with respect to Tenant’s trade fixtures and
moving expenses; Tenant shall make no claim for the value of any unexpired Term.

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24. SALE BY LANDLORD.

    24.1. In event of a sale or conveyance by Landlord of the Building, the same
shall operate to release Landlord from any future liability upon any of the
covenants or conditions, expressed or implied, contained in this Lease in favor
of Tenant, and in such event Tenant agrees to look solely to the responsibility
of the successor in interest of Landlord in and to this Lease. Except as set
forth in this Article 24, this Lease shall not be affected by any such sale and
Tenant agrees to attorn to the purchaser or assignee. If any security has been
given by Tenant to secure the faithful performance of any of the covenants of
this Lease, Landlord may transfer or deliver said security, as such, to
Landlord’s successor in interest and thereupon Landlord shall be discharged from
any further liability with regard to said security.

 
25. ESTOPPEL CERTIFICATES.

    25.1. Within ten (10) days following any written request which Landlord may
make from time to time, Tenant shall execute and deliver to Landlord or
mortgagee or prospective mortgagee a sworn statement certifying: (a) the date of
commencement of this Lease; (b) the fact that this Lease is unmodified and in
full force and effect (or, if there have been modifications to this Lease, that
this lease is in full force and effect, as modified, and stating the date and
nature of such modifications); (c) the date to which the rent and other sums
payable under this Lease have been paid; (d) the fact that there are no current
defaults under this Lease by either Landlord or Tenant except as specified in
Tenant’s statement; and (e) such other matters as may be requested by Landlord.
Landlord and Tenant intend that any statement delivered pursuant to this Article
25 may be relied upon by any mortgagee, beneficiary or purchaser, and Tenant
shall be liable for all loss, cost or expense resulting from the failure of any
sale or funding of any loan caused by any material misstatement contained in
such estoppel certificate. Tenant irrevocably agrees that if Tenant fails to
execute and deliver such certificate within such ten (10) day period Landlord or
Landlord’s beneficiary or agent may execute and deliver such certificate on
Tenant’s behalf, and that such certificate shall be fully binding on Tenant.

26. SURRENDER OF PREMISES.

    26.1. Tenant shall arrange to meet Landlord for two (2) joint inspections of
the Premises, the first to occur at least thirty (30) days (but no more than
sixty (60) days) before the last day of the Term, and the second to occur not
later than forty-eight (48) hours after Tenant has vacated the Premises. In the
event of Tenant’s failure to arrange such joint inspections and/or participate
in either such inspection, Landlord’s inspection at or after Tenant’s vacating
the Premises shall be conclusively deemed correct for purposes of determining
Tenant’s responsibility for repairs and restoration.

    26.2. All alterations, additions, and improvements in, on, or to the
Premises made or installed by or for Tenant, including carpeting (collectively,
“Alterations”), shall be and remain the property of Tenant during the Term. Upon
the expiration or sooner termination of the Term, all Alterations shall become a
part of the realty and shall belong to Landlord without compensation, and title
shall pass to Landlord under this Lease as by a bill of sale. At the end of the
Term or any renewal of the Term or other sooner termination of this Lease,
Tenant will peaceably deliver up to Landlord possession of the Premises,
together with all Alterations by whomsoever made, in the same conditions
received or first installed, broom clean and free of all debris, excepting only
ordinary wear and tear and damage by fire or other casualty. Notwithstanding the
foregoing, if Landlord elects by notice given to Tenant at least ten (10) days
prior to expiration of the Term, Tenant shall, at Tenant’s sole cost, remove any
Alterations, including carpeting, so designated by Landlord’s notice, and repair
any damage caused by such removal. Tenant must, at Tenant’s sole cost, remove
upon termination of this Lease, any and all of Tenant’s furniture, furnishings,
movable partitions of less than full height from floor to ceiling and other
trade fixtures and personal property (collectively, “Personalty”). Personalty
not so removed shall be deemed abandoned by the Tenant and title to the same
shall thereupon pass to Landlord under this Lease as by a bill of sale, but
Tenant shall remain responsible for the cost of removal and disposal of such
Personalty, as well as any damage caused by such removal. In lieu of requiring
Tenant to remove Alterations and Personalty and repair the Premises as
aforesaid, Landlord may, by written notice to Tenant delivered at least thirty
(30) days before the Termination Date, require Tenant to pay to Landlord, as
additional rent hereunder, the cost of such removal and repair in an amount
reasonably estimated by Landlord.
 
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    26.3. All obligations of Tenant under this Lease not fully performed as of
the expiration or earlier termination of the Term shall survive the expiration
or earlier termination of the Term Upon the expiration or earlier termination of
the Term, Tenant shall pay to Landlord the amount, as estimated by Landlord,
necessary to repair and restore the Premises as provided in this Lease and/or to
discharge Tenant’s obligation for unpaid amounts due or to become due to
Landlord. All such amounts shall be used and held by Landlord for payment of
such obligations of Tenant, with Tenant being liable for any additional costs
upon demand by Landlord, or with any excess to be returned to Tenant after all
such obligations have been determined and satisfied. Any otherwise unused
Security Deposit shall be credited against the amount payable by Tenant under
this Lease.

27. NOTICES.

    27.1. Any notice or document required or permitted to be delivered under
this Lease shall be addressed to the intended recipient, by fully prepaid
registered or certified United States Mail return receipt requested, or by
reputable independent contract delivery service furnishing a written record of
attempted or actual delivery, and shall be deemed to be delivered when tendered
for delivery to the addressee at its address set forth on the Reference Pages,
or at such other address as it has then last specified by written notice
delivered in accordance with this Article 27, or if to Tenant at either its
aforesaid address or its last known registered office or home of a general
partner or individual owner, whether or not actually accepted or received by the
addressee. Any such notice or document may also be personally delivered if a
receipt is signed by and received from, the individual, if any, named in
Tenant’s Notice Address. Service of process upon Landlord shall be served upon
Landlord’s Registered Agent for Service of Process, as designated on the
Reference Pages, with a copy (which shall not constitute notice) to Landlord at
Landlord’s Address as set forth on the Reference Pages.

28. TAXES PAYABLE BY TENANT.

    28.1. In addition to rent and other charges to be paid by Tenant under this
Lease, Tenant shall reimburse to Landlord, upon demand, any and all taxes
payable by Landlord (other than net income taxes) whether or not now customary
or within the contemplation of the parties to this Lease: (a) upon, allocable
to, or measured by or on the gross or net rent payable under this Lease,
including without limitation any gross income tax or excise tax levied by the
State, any political subdivision thereof, or the Federal Government with respect
to the receipt of such rent; (b) upon or with respect to the possession,
leasing, operation, management, maintenance, alteration, repair, use or
occupancy of the Premises or any portion thereof, including any sales, use or
service tax imposed as a result thereof; (c) upon or measured by the Tenant’s
gross receipts or payroll or the value of Tenant’s equipment, furniture,
fixtures and other personal property of Tenant or leasehold improvements,
alterations or additions located in the Premises; or (d) upon this transaction
or any document to which Tenant is a party creating or transferring any interest
of Tenant in this Lease or the Premises. In addition to the foregoing, Tenant
agrees to pay, before delinquency, any and all taxes levied or assessed against
Tenant and which become payable during the term hereof upon Tenant’s equipment,
furniture, fixtures and other personal property of Tenant located in the
Premises.

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29. RELOCATION OF TENANT.

    29.1. Landlord, at its sole expense, on at least sixty (60) days prior
written notice, may require Tenant to move from the Premises to other space of
comparable size and decor in order to permit Landlord to consolidate the space
leased to Tenant with other adjoining space leased or to be leased to another
tenant. In the event of any such relocation, Landlord will pay all expenses of
preparing and decorating the new premises so that they will be substantially
similar to the Premises from which Tenant is moving, and Landlord will also pay
the expense of moving Tenant’s furniture and equipment to the relocated
premises. In such event this Lease and each and all of the terms and covenants
and conditions hereof shall remain in full force and effect and thereupon be
deemed applicable to such new space except that revised Reference Pages and a
revised Exhibit A shall become part of this Lease and shall reflect the location
of the new premises.

30. DEFINED TERMS AND HEADINGS.

    30.1. The Article headings shown in this Lease are for convenience of
reference and shall in no way define, increase, limit or describe the scope or
intent of any provision of this Lease. Any indemnification or insurance of
Landlord shall apply to and inure to the benefit of all the following “Landlord
Entities”, being Landlord, Landlord’s investment manager, and the trustees,
boards of directors, officers, general partners, beneficiaries, stockholders,
employees and agents of each of them. Any option granted to Landlord shall also
include or be exercisable by Landlord’s trustee, beneficiary, agents and
employees, as the case may be. In any case where this Lease is signed by more
than one person, the obligations under this Lease shall be joint and several.
The terms “Tenant” and “Landlord” or any pronoun used in place thereof shall
indicate and include the masculine or feminine, the singular or plural number,
individuals, firms or corporations, and their and each of their respective
successors, executors, administrators and permitted assigns, according to the
context hereof. The term “rentable area” shall mean the rentable area of the
Premises or the Building as calculated by the Landlord on the basis of the plans
and specifications of the Building including a proportionate share of any common
areas. Tenant hereby accepts and agrees to be bound by the figures for the
rentable square footage of the Premises and Tenant’s Proportionate Share shown
on the Reference Pages; however, Landlord may adjust either or both figures if
there is manifest error, addition or subtraction to the Building or any business
park or complex of which the Building is a part, remeasurement or other
circumstance reasonably justifying adjustment. The term “Building” refers to the
structure in which the Premises are located and the common areas (parking lots,
sidewalks, landscaping, etc.) appurtenant thereto. If the Building is part of a
larger complex of structures, the term “Building” may include the entire
complex, where appropriate (such as shared Expenses, Insurance Costs or Taxes)
and subject to Landlord’s reasonable discretion.

31. TENANT’S AUTHORITY.

    31.1. If Tenant signs as a corporation, partnership, trust or other legal
entity each of the persons executing this Lease on behalf of Tenant represents
and warrants that Tenant has been and is qualified to do business in the state
in which the Building is located, that the entity has full right and authority
to enter into this Lease, and that all persons signing on behalf of the entity
were authorized to do so by appropriate actions. Tenant agrees to deliver to
Landlord, simultaneously with the delivery of this Lease, a corporate
resolution, proof of due authorization by partners, opinion of counsel or other
appropriate documentation reasonably acceptable to Landlord evidencing the due
authorization of Tenant to enter into this Lease.

32. FINANCIAL STATEMENTS AND CREDIT REPORTS.

    32.1. At Landlord’s request, Tenant shall deliver to Landlord a copy,
certified by an officer of Tenant as being a true and correct copy, of Tenant’s
most recent audited financial statement, or, if unaudited, certified by Tenant’s
chief financial officer as being true, complete and correct in all material
respects. Tenant hereby authorizes Landlord to obtain one or more credit reports
on Tenant at any time, and shall execute such further authorizations as Landlord
may reasonably require in order to obtain a credit report.
32.2. At Landlord’s request, Guarantor shall deliver to Landlord a copy,
certified by an officer of Guarantor as being a true and correct copy, of
Guarantor’s most recent audited financial statement, or, if unaudited, certified
by Guarantor’s chief financial officer as being true, complete and correct in
all material respects. Guarantor hereby authorizes Landlord to obtain one or
more credit reports on Guarantor at any time, and shall execute such further
authorizations as Landlord may reasonably require in order to obtain a credit
report.

33. COMMISSIONS.

    33.1. Each of the parties represents and warrants to the other that it has
not dealt with any broker or finder in connection with this Lease, except as
described on the Reference Pages. Tenant hereby agrees to indemnify, defend
(with counsel reasonably acceptable to Landlord) and hold Landlord harmless from
and against any claims by a broker or finder relating to Tenant’s breach or
alleged breach of Tenant’s foregoing representation or warranty.

34. TIME AND APPLICABLE LAW.

    34.1. Time is of the essence of this Lease and all of its provisions. This
Lease shall in all respects be governed by the laws of the state in which the
Building is located.

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35. SUCCESSORS AND ASSIGNS.

    35.1. Subject to the provisions of Article 9, the terms, covenants and
conditions contained in this Lease shall be binding upon and inure to the
benefit of the heirs, successors, executors, administrators and assigns of the
parties to this Lease.

36. ENTIRE AGREEMENT.

    36.1. This Lease, together with its exhibits, contains all agreements of the
parties to this Lease and supersedes any previous negotiations. There have been
no representations made by the Landlord or any of its representatives or
understandings made between the parties other than those set forth in this Lease
and its exhibits. This Lease may not be modified except by a written instrument
duly executed by the parties to this Lease.

37. EXAMINATION NOT OPTION.

    37.1. Submission of this Lease shall not be deemed to be a reservation of
the Premises. Landlord shall not be bound by this Lease until it has received a
copy of this Lease duly executed by Tenant and has delivered to Tenant a copy of
this Lease duly executed by Landlord, and until such delivery Landlord reserves
the right to exhibit and lease the Premises to other prospective tenants.
Notwithstanding anything contained in this Lease to the contrary, Landlord may
withhold delivery of possession of the Premises from Tenant until such time as
Tenant has paid to Landlord any security deposit required by Article 4, the
first month’s rent as set forth in Article 3 and any sum owed pursuant to this
Lease and provided to Landlord such other items required under this Lease,
including, but not limited to evidence of adequate insurance and evidence of
authority of Tenant to enter into this transaction.

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38. RECORDATION.

    38.1. Tenant shall not record or register this Lease or a short form
memorandum hereof without the prior written consent of Landlord, and then shall
pay all charges and taxes incident such recording or registration.

39. PARKING.

    39.1. Tenant shall have the privilege to use up to three and six-tenths
(3.6) unreserved, uncovered parking spaces per one thousand (1,000) rentable
square feet of the Premises at no additional cost on a non-exclusive basis which
shall be used in common with other tenants, invitees and visitors to the
Building, of which allotment of parking spaces, Tenant shall have the privilege
to contract with the parking garage operator in the Building to use up to one
and three-tenths (1.3) unreserved, covered parking spaces per one thousand
(1,000) rentable square feet of the Premises located in the parking garage of
the Building at the prevailing market rate for such spaces, provided that Tenant
contracts for such spaces within sixty (60) days of the Commencement Date. At
the discretion of the garage operator and depending on the availability of
spaces, Tenant shall lose its privilege to contract for such spaces if Tenant
shall fail to contract for such spaces in any subsequent month. The current rate
for such space is Twenty and 00/100 Dollars ($20.00) per space per month,
subject to change at any time and from time to time. The foregoing shall not be
deemed to provide Tenant with an exclusive right to any parking spaces or any
guaranty of the availability of any particular parking spaces or any specific
number of parking spaces.

    39.2. As used in this Article 39, “Landlord” shall be deemed to include an
independent parking facility operator contracted by Landlord to operate the
Building’s parking facility, if any. Tenant acknowledges that Landlord may at
some time establish a standard license agreement (the "Parking License
Agreement") with respect to the use of parking spaces. Tenant, upon request of
Landlord, shall enter into such Parking License Agreements with Landlord
provided that such agreement does not materially alter the rights of Tenant
hereunder with respect to the parking spaces. No deductions or allowances shall
be made for days when Tenant or any of its employees does not utilize the
parking facilities or for Tenant utilizing less than all of the Parking Spaces.
Tenant shall not assign or sublease any of the Parking Spaces without the
consent of Landlord. Furthermore, Tenant agrees that it and its employees shall
observe reasonable safety precautions in the use of the Building’s parking
facility, and shall at all times abide by all rules and regulations promulgated
by Landlord governing the use of the Building’s parking facility. It is
understood and agreed that Landlord does not assume any responsibility for, and
Tenant hereby expressly releases and discharges Landlord and Landlord Entity
from any liability, and hereby waives any claim against Landlord and Landlord
Entity, for any damage or loss to any automobiles parked in the parking facility
or to any personal property located therein, or for any injury sustained by any
person in or about the parking facility. Landlord shall have the right to
temporarily close the Building parking facility or certain areas therein in
order to perform necessary repairs, maintenance and improvements to the Building
parking facility or the Building; provided, however, that (except in the case of
emergency) Landlord shall provide reasonable advance notice of such closure to
Tenant. Tenant shall not store any automobiles in the Building parking facility
without the prior written consent of Landlord. Except for emergency repairs,
Tenant shall not perform any work on any automobiles while located in the
Building parking facility.

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40. LIMITATION OF LANDLORD’S LIABILITY.

40.1. Redress for any claim against Landlord under this Lease shall be limited
to and enforceable only against and to the extent of Landlord’s interest in the
Building. The obligations of Landlord under this Lease are not intended to be
and shall not be personally binding on, nor shall any resort be had to the
private properties of, any of its or its investment manager’s trustees,
directors, officers, partners, beneficiaries, members, stockholders, employees,
or agents, and in no case shall Landlord be liable to Tenant hereunder for any
lost profits, damage to business, or any form of special, indirect or
consequential damages.
[SIGNATURES CONTAINED ON NEXT PAGE]
 
 
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WITNESS:
By:____________________________
Title:
LANDLORD:
TMT RESTON I & II, INC.,
a Delaware corporation
 
By: RREEF MANAGEMENT COMPANY,
a Delaware corporation
 
By: Mark Arena
Name: Mark Arena
Title: District Manager
Dated: 11/03/04
ATTEST:
By: /s/ Craig H. Pizer 
Name: Craig H. Pizer
Title: Associate General Counsel
[Corporate Seal]
TENANT:
TALK AMERICA, INC.,
a Pennsylvania corporation
By: Aloysius T. Lawn IV 
Name: Aloysius T. Lawn IV
Title: EVP - General Counsel
Dated:10/28/04

 
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EXHIBIT A - FLOOR PLAN DEPICTING THE PREMISES
 
attached to and made a part of Lease bearing the
Lease Reference Date of 10/28/2004 between
TMT Reston I & II, Inc., as Landlord and
Talk America, Inc., as Tenant
 
Exhibits A and A-1 are intended only to show the general layout of the Premises
as of the beginning of the Term of this Lease. They do not in any way supersede
any of Landlord’s rights set forth in Article 17 with respect to arrangements
and/or locations of public parts of the Building and changes in such
arrangements and/or locations. It is not to be scaled; any measurements or
distances shown should be taken as approximate.
 
 
 
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EXHIBIT A-1 - SITE PLAN
 
attached to and made a part of Lease bearing the
Lease Reference Date of 10/28/2004 between
TMT Reston I & II, Inc., as Landlord and
Talk America, Inc., as Tenant
 
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EXHIBIT B
 
attached to and made a part of Lease bearing the
Lease Reference Date of 10/28/2004between
TMT Reston I & II, Inc., as Landlord and
Talk America, Inc., as Tenant
[INTENTIONALLY OMITTED]
 
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EXHIBIT C - COMMENCEMENT DATE MEMORANDUM
 
attached to and made a part of Lease bearing the
Lease Reference Date of 10/28/2004 between
TMT Reston I & II, Inc., as Landlord and
Talk America, Inc., as Tenant
 
COMMENCEMENT DATE MEMORANDUM
 
THIS MEMORANDUM, made as of __________, 2004, by and between TMT Reston I & II,
Inc., a Delaware corporation, (“Landlord”) and Talk America, Inc. (“Tenant”).
 
Recitals:
 
A. Landlord and Tenant are parties to that certain Lease, dated for reference
_________, 2004 (the “Lease”) for certain premises (the “Premises”) consisting
of approximately 1,136 square feet at the building commonly known as Reston
Plaza I located at 12030 Sunrise Valley Drive, Reston, VA 20191.
 
B. Tenant is in possession of the Premises and the Term of the Lease has
commenced.
 
C. Landlord and Tenant desire to enter into this Memorandum confirming the
Commencement Date, the Termination Date and other matters under the Lease.
 
NOW, THEREFORE, Landlord and Tenant agree as follows:
 
1. The actual Commencement Date is ________________.
 
2. The actual Termination Date is ____________________.
 
3. The schedule of the Annual Rent and the Monthly Installment of Rent set forth
on the Reference Pages is deleted in its entirety, and the following is
substituted therefor:
 
[insert rent schedule]
 
4. Capitalized terms not defined herein shall have the same meaning as set forth
in the Lease.
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date and year first above written.
 
WITNESS:
By:____________________________
Title:
LANDLORD:
TMT RESTON I & II, INC.,
a Delaware corporation
 
By: RREEF MANAGEMENT COMPANY,
a Delaware corporation
 
By:
Name: Mark Arena
Title: District Manager
Dated:
ATTEST:
By:_____________________________
Name:
Title:
[Corporate Seal]
TENANT:
TALK AMERICA, INC.,
a Pennsylvania corporation
By:______________________________
Name:
Title:
Dated:________________________

NOT FOR EXECUTION
 
 
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EXHIBIT D - RULES AND REGULATIONS
 
attached to and made a part of Lease bearing the
Lease Reference Date of 10/28/2004 between
TMT Reston I & II, Inc., as Landlord and
Talk America, Inc., as Tenant

1.     No sign, placard, picture, advertisement, name or notice shall be
installed or displayed on any part of the outside or inside of the Building
without the prior written consent of the Landlord. Landlord shall have the right
to remove, at Tenant’s expense and without notice, any sign installed or
displayed in violation of this rule. All approved signs or lettering on doors
and walls shall be printed, painted, affixed or inscribed at Tenant’s expense by
a vendor designated or approved by Landlord. In addition, Landlord reserves the
right to change from time to time the format of the signs or lettering and to
require previously approved signs or lettering to be appropriately altered.

2.     If Landlord objects in writing to any curtains, blinds, shades or screens
attached to or hung in or used in connection with any window or door of the
Premises, Tenant shall immediately discontinue such use. No awning shall be
permitted on any part of the Premises. Tenant shall not place anything or allow
anything to be placed against or near any glass partitions or doors or windows
which may appear unsightly, in the opinion of Landlord, from outside the
Premises.

3.     Tenant shall not obstruct any sidewalks, halls, passages, exits,
entrances, elevators, or stairways of the Building. No tenant and no employee or
invitee of any tenant shall go upon the roof of the Building.

4.     Any directory of the Building, if provided, will be exclusively for the
display of the name and location of tenants only and Landlord reserves the right
to exclude any other names. Landlord reserves the right to charge for Tenant’s
directory listing.

5.     All cleaning and janitorial services for the Building and the Premises
shall be provided exclusively through Landlord. Tenant shall not cause any
unnecessary labor by carelessness or indifference to the good order and
cleanliness of the Premises. Landlord shall not in any way be responsible to any
Tenant for any loss of property on the Premises, however occurring, or for any
damage to any Tenant’s property by the janitor or any other employee or any
other person.

6.     The toilet rooms, toilets, urinals, wash bowls and other apparatus shall
not be used for any purpose other than that for which they were constructed. No
foreign substance of any kind whatsoever shall be thrown into any of them, and
the expense of any breakage, stoppage or damage resulting from the violation of
this rule shall be borne by the Tenant who, or whose employees or invitees,
shall have caused it.

 
  7.     Tenant shall store all its trash and garbage within its Premises.
Tenant shall not place in any trash box or receptacle any material which cannot
be disposed of in   the  ordinary and customary manner of trash and garbage
disposal. All garbage and refuse disposal shall be made in accordance with
directions issued from time to time by Landlord. Tenant will comply with any and
all recycling procedures designated by Landlord.

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  8.     Landlord will furnish Tenant two (2) keys free of charge to each door
in the Premises that has a passage way lock. Landlord may charge Tenant a
reasonable amount for any additional keys, and Tenant shall not make or have
made additional keys on its own. Tenant shall not alter any lock or install a
new or additional lock or bolt on any door of its Premises. Tenant, upon the
termination of its tenancy, shall deliver to Landlord the keys of all doors
which have been furnished to Tenant, and in the event of loss of any keys so
furnished, shall pay Landlord therefor.

9.     If Tenant requires telephone, data, burglar alarm or similar service, the
cost of purchasing, installing and maintaining such service shall be borne
solely by Tenant. No boring or cutting for wires will be allowed without the
prior written consent of Landlord.

10.     No equipment, materials, furniture, packages, bulk supplies, merchandise
or other property will be received in the Building or carried in the elevators
except between such hours and in such elevators as may be designated by
Landlord. The persons employed to move such equipment or materials in or out of
the Building must be acceptable to Landlord.

11.     Tenant shall not place a load upon any floor which exceeds the load per
square foot which such floor was designed to carry and which is allowed by law.
Heavy objects shall stand on such platforms as determined by Landlord to be
necessary to properly distribute the weight. Business machines and mechanical
equipment belonging to Tenant which cause noise or vibration that may be
transmitted to the structure of the Building or to any space in the Building to
such a degree as to be objectionable to Landlord or to any tenants shall be
placed and maintained by Tenant, at Tenant’s expense, on vibration eliminators
or other devices sufficient to eliminate the noise or vibration. Landlord will
not be responsible for loss of or damage to any such equipment or other property
from any cause, and all damage done to the Building by maintaining or moving
such equipment or other property shall be repaired at the expense of Tenant.

12.     Landlord shall in all cases retain the right to control and prevent
access to the Building of all persons whose presence in the judgment of Landlord
would be prejudicial to the safety, character, reputation or interests of the
Building and its tenants, provided that nothing contained in this rule shall be
construed to prevent such access to persons with whom any tenant normally deals
in the ordinary course of its business, unless such persons are engaged in
illegal activities. Landlord reserves the right to exclude from the Building
between the hours of 6 p.m. and 7 a.m. the following day, or such other hours as
may be established from time to time by Landlord, and on Sundays and legal
holidays, any person unless that person is known to the person or employee in
charge of the Building and has a pass or is properly identified. Tenant shall be
responsible for all persons for whom it requests passes and shall be liable to
Landlord for all acts of such persons. Landlord shall not be liable for damages
for any error with regard to the admission to or exclusion from the Building of
any person.

13.     Tenant shall not use any method of heating or air conditioning other
than that supplied or approved in writing by Landlord.

14.     Tenant shall not waste electricity, water or air conditioning. Tenant
shall keep corridor doors closed. Tenant shall close and lock the doors of its
Premises and entirely shut off all water faucets or other water apparatus and
electricity, gas or air outlets before Tenant and its employees leave the
Premises. Tenant shall be responsible for any damage or injuries sustained by
other tenants or occupants of the Building or by Landlord for noncompliance with
this rule.

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15.     Tenant shall not install any radio or television antenna, satellite
dish, loudspeaker or other device on the roof or exterior walls of the Building
without Landlord’s prior written consent, which consent may be withheld in
Landlord’s sole discretion, and which consent may in any event be conditioned
upon Tenant’s execution of Landlord’s standard form of license agreement. Tenant
shall be responsible for any interference caused by such installation.

16.     Tenant shall not mark, drive nails, screw or drill into the partitions,
woodwork, plaster, or drywall (except for pictures, tackboards and similar
office uses) or in any way deface the Premises. Tenant shall not cut or bore
holes for wires. Tenant shall not affix any floor covering to the floor of the
Premises in any manner except as approved by Landlord. Tenant shall repair any
damage resulting from noncompliance with this rule.

17.     Tenant shall not install, maintain or operate upon the Premises any
vending machine without Landlord’s prior written consent, except that Tenant may
install food and drink vending machines solely for the convenience of its
employees.

18.     No cooking shall be done or permitted by any tenant on the Premises,
except that Underwriters’ Laboratory approved microwave ovens or equipment for
brewing coffee, tea, hot chocolate and similar beverages shall be permitted
provided that such equipment and use is in accordance with all applicable
federal, state and city laws, codes, ordinances, rules and regulations.

19.     Tenant shall not use in any space or in the public halls of the Building
any hand trucks except those equipped with the rubber tires and side guards or
such other material-handling equipment as Landlord may approve. Tenant shall not
bring any other vehicles of any kind into the Building.

20.     Tenant shall not permit any motor vehicles to be washed or mechanical
work or maintenance of motor vehicles to be performed in any parking lot.

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21.     Tenant shall not use the name of the Building or any photograph or
likeness of the Building in connection with or in promoting or advertising
Tenant’s business, except that Tenant may include the Building name in Tenant’s
address. Landlord shall have the right, exercisable without notice and without
liability to any tenant, to change the name and address of the Building.

22.     Tenant requests for services must be submitted to the Building office by
an authorized individual. Employees of Landlord shall not perform any work or do
anything outside of their regular duties unless under special instruction from
Landlord, and no employee of Landlord will admit any person (Tenant or
otherwise) to any office without specific instructions from Landlord.

23.     Tenant shall not permit smoking or carrying of lighted cigarettes or
cigars other than in areas designated by Landlord as smoking areas.
 
24.      Canvassing, soliciting, distribution of handbills or any other written
material in the Building is prohibited and each tenant shall cooperate to
prevent the same. No tenant shall solicit business from other tenants or permit
the sale of any good or merchandise in the Building without the written consent
of Landlord.

25.    Tenant shall not permit any animals other than service animals, e.g.
seeing-eye dogs, to be brought or kept in or about the Premises or any common
area of the Building.

26.     These Rules and Regulations are in addition to, and shall not be
construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of any lease of any premises in the
Building. Landlord may waive any one or more of these Rules and Regulations for
the benefit of any particular tenant or tenants, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor of any
other tenant or tenants, nor prevent Landlord from thereafter enforcing any such
Rules and Regulations against any or all of the tenants of the Building.

27.     Landlord reserves the right to make such other and reasonable rules and
regulations as in its judgment may from time to time be needed for safety and
security, for care and cleanliness of the Building, and for the preservation of
good order in and about the Building. Tenant agrees to abide by all such rules
and regulations herein stated and any additional rules and regulations which are
adopted. Tenant shall be responsible for the observance of all of the foregoing
rules by Tenant’s employees, agents, clients, customers, invitees and guests.

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EXHIBIT E - FORM OF GUARANTY
 
                        attached to and made a part of Lease bearing the
Lease Reference Date of 10/28/2004 between
TMT Reston I & II, Inc., as Landlord and
Talk America, Inc., as Tenant
 
CONTINUING GUARANTY OF LEASE
 
 
THIS CONTINUING GUARANTY OF LEASE (the “Guaranty”) is made and executed this __
day of ___________, 2004 from (i) TALK AMERICA HOLDINGS, INC., a Delaware
corporation (hereinafter referred to as “Guarantor”) to (ii) TMT RESTON I & II,
INC., a Delaware corporation, its successor and assigns (hereinafter referred to
as “Landlord”).
 
 
W I T N E S S E T H :
 
WHEREAS, Landlord has entered into that certain Lease Agreement with a Lease
Reference date of ______________________, 2004, (the “Lease”), whereby Landlord
has agreed to lease to Talk America, Inc., a Pennsylvania corporation
(hereinafter referred to as “Tenant”) certain premises (hereinafter referred to
as the “Premises”) comprising approximately 1,136 rentable square feet of the
office building commonly known as Reston Plaza I and located at 12030 Sunrise
Valley Drive, Reston, Virginia, as described in the Lease; and
 
WHEREAS, Tenant is wholly owned by Guarantor; and
 
WHEREAS, by reason of the foregoing relationship, it is in Guarantor’s direct
interest and advantage to assist Tenant in securing Landlord’s agreement to
execute the Lease; and
 
WHEREAS, Landlord is willing to execute and deliver the Lease to Tenant only if
Guarantor guarantees to Landlord the prompt performance by Tenant of all the
covenants, terms, conditions and obligations to be performed by Tenant under the
Lease.
 
NOW, THEREFORE, in consideration of the foregoing, and for the purposes of
inducing Landlord to execute the Lease, Guarantor agrees as follows:
 
1.     Guarantor warrants and represents to Landlord that: (a) the making and
performance of this Guaranty by Guarantor will not result in the breach of any
term, condition or provision of, or constitute a default under, any contract,
agreement or other instrument to which Guarantor is a party or by which
Guarantor may be bound, or result in a breach of any regulation, order, writ,
injunction or decree of any court or any commission, board or other
administrative agency entered in any proceeding to which Guarantor is a party or
by which it may be bound; (b) Guarantor’s representation contained in the
Recitals set forth hereinabove (all of which are incorporated herein by this
reference and made a part hereof) are true, accurate and complete; and (c) under
penalty of perjury, the written financial statements and other written
information presented to Landlord by Guarantor in connection with the Lease are
true, accurate and complete, and do not omit any material fact or amount
necessary to avoid making such statements and information misleading.

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2.     Guarantor hereby absolutely, unconditionally, irrevocably, jointly and
severally, guarantees to Landlord (i) the prompt and complete payment by Tenant
to Landlord of the fixed minimum rental payable by Tenant to Landlord under the
Lease, (ii) the prompt and complete payment by Tenant to Landlord of all other
sums of money payable by Tenant to Landlord under the Lease, (iii) the prompt
and complete performance by Tenant of all covenants, conditions, terms and
obligations to be performed by Tenant under the Lease, and (iv) the prompt and
complete payment by Tenant to Landlord of all damages, costs and expenses that,
by reason of the Lease, may become payable by Tenant to Landlord. Guarantor
hereby agrees to fully defend upon request (with counsel approved by Landlord),
indemnify, and hold Landlord harmless from any cost, claim, liability, damage or
expense (including, but not limited to attorneys’ fees and expenses and court
costs) which Landlord incurs in the event Tenant, as tenant, does not punctually
pay, perform, or fulfill all of its obligations under the Lease.

3.     At Landlord’s request, Guarantor shall deliver to Landlord a copy,
certified by an officer of Guarantor as being a true and correct copy, of
Guarantor’s most recent audited financial statement, or, if unaudited, certified
by Guarantor’s chief financial officer as being true, complete and correct in
all material respects. Guarantor hereby authorizes Landlord to obtain one or
more credit reports on Guarantor at any time, and shall execute such further
authorizations as Landlord may reasonably require in order to obtain a credit
report.

4.     Guarantor’s liability hereunder shall in no way be affected by any
indulgence, extension, or forbearance which Landlord may grant to Tenant with
respect to the payment or performance of any obligation of Tenant, or any
waiver, on the part of Landlord of any breach of the Lease by Tenant; and
Guarantor waives any requirement that Guarantor be notified of any such
indulgence, extension, forbearance or waiver, and Guarantor waives notice of
such matters and of any default by Tenant under the Lease.

5.     In the event of the default by Tenant in the performance of any of its
covenants or obligations under the Lease, Guarantor covenants and agrees to
perform such obligations forthwith upon demand (in the same manner as if the
same constituted the direct primary obligation and liability of Guarantor),
including, without limitation, payments of all sums owing to Landlord by reason
of such default.

6.     Landlord shall have the right, at any time and from time to time, to
enforce all rights and remedies available to Landlord under the Lease,
including, without limitation, agreements with Tenant modifying or changing any
of the terms of provisions of the Lease, extending or renewing the time of
payment of any such payable under the Lease, compromising or making settlement
of any obligation of Tenant under the Lease, terminating the Lease or resuming
possession of the Premises, making demand upon or instituting legal proceedings
against Tenant, granting any indulgence, extension or forbearance to Tenant with
respect to the performance of any obligation of Tenant, or waiving any breach of
the Lease by Tenant, all without notice to, or consent of, Guarantor and without
affecting the continuing validity and enforceability of this Guaranty.

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7.     Provided Landlord gives Tenant proper notice as may be set forth in the
Lease, Landlord may make demand and/or institute legal proceedings against
Guarantor for the performance of any obligation of Tenant under the Lease
without first proceeding in any way against Tenant and without enforcing any
rights or remedies under the Lease.

8.     No reasonable delay of the Landlord in exercising any rights and/or
powers hereunder or in taking any action to enforce the performance of Tenant’s
obligations under the Lease shall operate as a waiver as to such rights or
powers or in any manner prejudice any or all of Landlord’s rights and powers
hereunder against Guarantor.

9.     All claims which Guarantor may have against Tenant by reason of this
Guaranty, whether by way of subrogation to any position of Landlord or for
contribution or reimbursement, shall be subordinate to any outstanding claims
which Landlord then has against Tenant. Guarantor hereby releases Landlord from
all liability to Guarantor or Tenant for failing to recognize or observe or
protect any legal or equitable rights of Guarantor with respect to Tenant or the
Premises or the Lease.

10.     This Guaranty may not be modified, altered or terminated except pursuant
to an instrument in writing executed by Guarantor and Landlord. No waiver of any
provision of this Guaranty shall be valid unless in writing and signed by
Landlord. A failure of Landlord to insist upon strict performance of any
obligation or covenant of Guarantor under this Guaranty in any one or more
instances shall not be construed as a waiver or relinquishment of the right to
insist upon strict performance of such obligation or covenant in the future.

11.     This Guaranty shall be construed and enforced in accordance with the
laws of the Commonwealth of Virginia. Guarantor hereby waives notice of
nonpayment, nonperformance, or nonobservance or any notice of acceptance of this
Guaranty and any other notice to or demand upon Guarantor which Landlord might
otherwise be required to give or make in connection with any matter relating to
this Guaranty. Guarantor waives any legal obligation, duty or necessity for
Landlord to proceed first against Tenant, as tenant, or to exhaust any remedy
Landlord may have against Tenant, as tenant, it being agreed that in the event
of a default or failure in performance in any respect by Tenant, as tenant under
the Lease, Landlord may proceed and have the right of action solely against
Guarantor and/or any other guarantor of the Lease or Tenant, as tenant or
jointly against Guarantor and/or any other guarantor of the Lease and Tenant, as
tenant. Furthermore, to the extent applicable, Guarantor hereby waives the
benefit of Sections 49-25 and 49-26 of the Code of Virginia (2001) as amended.
Guarantor hereby expressly, knowingly and irrevocably consents and waives any
objection to the jurisdiction of any state or federal court situated within the
Commonwealth of Virginia over any suit, action or proceeding whether for damages
or for injunction, specific performance or for any other prohibitory or
mandatory relief arising out of or relating to this Lease. Guarantor hereby
expressly, knowingly and irrevocably agrees that all claims in respect of such
suit, action or proceeding may be heard and determined in such state or federal
court situated within the Commonwealth of Virginia. Having received the advice
of competent legal counsel, Guarantor hereby expressly, knowingly, and
irrevocably waives, to the fullest extent it may effectively do so, objection to
defending any such suit, action or proceedings in such state or federal court,
based on the defense of forum non conveniens (inconvenient forum) for the
maintenance of such suit, action or proceeding. Guarantor appoints hereby
Aloysius T. Lawn as agent for the purpose of accepting service of process
(“Guarantor’s Agent”). Should Guarantor’s Agent be unavailable, disabled, or
otherwise unable or unwilling to accept service of process, Guarantor appoints
the Clerk of the Virginia State Corporation Commission, or such other official
provided for under the laws of the Commonwealth of Virginia, as agent for the
service of process. Guarantor hereby expressly, knowingly, and irrevocably
consents to service of all writs, processes and summons in any such suit, action
or proceeding by mailing thereof to either (a) Guarantor at Guarantor’s Notice
Address (defined herein) or (b) Guarantor’s Agent’s Notice Address (or the
Secretary of the Commonwealth), by United States certified mail, postage
prepaid, return receipt requested or by Federal Express overnight delivery,
courier charges prepaid, signature of recipient required. Guarantor also hereby
expressly, knowingly and irrevocably consents and waives any objection to the
enforcement by execution against property or otherwise of any relief ordered in
such suit, action or proceeding in any federal or state court of the United
States or any court of any foreign state. The consent and waiver under this
paragraph shall not limit the rights of Landlord to bring any suit, action or
proceeding against Guarantor in any other jurisdiction for such relief, or of
any party to serve process in any other manner permitted by law, or to obtain
execution of judgment in any jurisdiction.

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12.     All notices required or desired to be given by either party to the other
under this Guaranty shall be in writing and shall be personally delivered or
sent by nationally available overnight courier or by certified mail, return
receipt requested, postage prepaid, and shall be effective upon actual receipt
as verified by written acknowledgement of delivery (or upon the date such
delivery is refused) in the case of personal or overnight delivery and by the
return receipt (or upon the date such delivery is refused) in the case of
certified mail. A party shall designate a change of address or agent by notice
to the other party at least ten (10) days before such change is to become
effective. All notices to the respective parties shall be addressed and sent as
follows (the “Notice Address”):

Landlord: TMT Reston I & II, Inc.
c/o RREEF
8280 Greensboro Drive
Suite 550
McLean, Virginia 22102
Attn: Patrick N. Connell, Vice President
with a copy, said copy not constituting notice, to:
Covington & Burling
1201 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
 
Attn: Robert J. Gage, Esq.
 
Guarantor: Talk America Holdings, Inc.
6805 Route 202
New Hope, PA 18938
Attn: Bill McGrath, Senior VP
 
with a copy, said copy also constituting notice, to Guarantor’s Agent :
 
Aloysius T. Lawn, General Counsel
Talk America Holdings, Inc.
6805 Route 202
New Hope, PA 18938

13.     This Guaranty shall be binding upon Guarantor, its successor or assigns,
and shall inure to the benefit of, and be enforceable by Landlord, its
successors or assigns, and by any successor to the interest of landlord under
the Lease.

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14.     Guarantor shall pay to Landlord all costs, including without limitation
attorneys’ fees and expenses, court costs, expert witness fees, and other
disbursements and costs of collection, incurred by Landlord in connection with
enforcing any provision of this Guaranty, whether or not any action or lawsuit
is actually instituted by Landlord.

15.     This Guaranty is absolute and is not conditioned in any way upon the
genuineness, validity, regularity or enforceability of the Lease, provided that
the Lease was signed by Tenant.

16.     Guarantor’s obligations under this Guaranty shall be unaffected by any
discharge or release of the Tenant, its successors or assigns, or any of their
debts, in connection with any bankruptcy, reorganization, or other insolvency
proceeding or assignment for the benefit of creditors; any rejection or
disaffirmation of the Lease in any bankruptcy, reorganization, or other
insolvency proceeding or assignment for the benefit of creditors; or any
reduction, modification, impairment or limitation of the liability of the
Tenant, its successors or assigns, or of Landlord’s remedies under the Lease, in
connection with any bankruptcy, reorganization or other insolvency proceeding or
any assignment for the benefit of creditors. In addition, if Landlord is
required to disgorge or pay back to the Tenant’s estate any payments made by the
Tenant under the Lease in connection with any bankruptcy, reorganization or
insolvency proceeding, Guarantor’s obligations as to such payments shall be
reinstated.

17.     In the event that any covenant, condition or other provision herein
contained is held to be invalid, void or illegal by any court of competent
jurisdiction, the same shall be deemed severable from the remainder of this
agreement and shall in no way affect, impair or invalidate any other covenant,
condition or other provision herein contained.
 
[SIGNATURES ON NEXT PAGE]
 
 
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IN WITNESS WHEREOF, the undersigned have executed this Guaranty on the day and
year first above written
 
ATTEST:
By: _________________________________
Name: ______________________________
Title: _______________________________
Date: _______________________________
GUARANTOR:
Talk America Holdings, Inc.,
a Delaware corporation
By: _______________________________
Name: ____________________________
Title: ______________________________
Date: ______________________________

[corporate seal]
CITY ) ) ss: STATE )
 
 
BEFORE ME, a Notary Public in and for the jurisdiction aforesaid, personally
appeared this date _______________________________, personally well known (or
satisfactorily proven) to me to be the person whose name is subscribed to the
foregoing and annexed Guaranty bearing date as of ________________ ___, 2004,
who, being by me first duly sworn, did depose and state that he/she is the
_______________________________ of Talk America Holdings, Inc., a Delaware
corporation, which entity is a party of the foregoing and annexed Guaranty, and
that he/she, being duly authorized so to do, executed said Guaranty on behalf of
said entity and acknowledge the same as its free act and deed for the uses and
purposes herein contained.
 
 
SUBSCRIBED AND SWORN TO before me this ___ day of _____________, 2004.
 
[notary seal] _____________________________________
Notary Public
My Commission expires:

NOT FOR EXECUTION