Document:

Exhibit
10.5

THE CORPORATEPLAN

FOR RETIREMENT SM 100

(PROFIT SHARING/401(K) PLAN)

A
FIDELITY PROTOTYPE PLAN

Non-Standardized Adoption
Agreement No. 001

For use With

Fidelity Basic Plan Document No.
10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	
  Plan Number: 26175

  	
   

  	
   

  
	
  The CORPORATEplan for
  RetirementSM 100

  	
   

  	
  Non-Std
  PS Plan

  
	
   

  	
   

  	
  10/09/2003

  

© 2003 FMR Corp.

All
rights reserved.

 

 

 

ADOPTION AGREEMENT

ARTICLE 1

NON-STANDARDIZED PROFIT SHARING/401(K) PLAN

1.01        PLAN
INFORMATION

 

(a)                                  Name of Plan:

This is the Vonage
401(k) Retirement Plan (the “Plan”)

(b)                                  Type of Plan:

(1)                                  ̈            401(k) Only

(2)                                 þ            401(k) and Profit Sharing

(3)                                  ̈            Profit Sharing Only

(c)                                  Administrator Name (if not the Employer):

	
   

  
	
   

  
	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Telephone Number:

  	
   

  
			

 

The Administrator
is the agent for service of legal process for the Plan.

(d)                                  Plan Year End (month/day): 
12/31

(e)                                  Three Digit Plan Number: 001

(f)                                    Limitation Year (check one):

(1)                                 o            Calendar Year

(2)                                 þ            Plan Year

(3)                                 o            Other:

(g)                                 Plan Status (check appropriate box(es)):

(1)                                 o            New Plan Effective Date:

(2)                                 þ            Amendment Effective Date:  1/1/2005

 

1

 

This is (check one):

(A)                               o                                    an amendment
and restatement of a Basic Plan Document No. 10 Adoption Agreement previously
executed by the Employer; or

(B)                               þ                                      a conversion to
a Basic Plan Document No. 10 Adoption Agreement.

The original effective
date of the Plan:             3/1/2001

(3)                                 o                                    This is an
amendment and restatement of the Plan and the Plan was not amended prior to the
effective date specified in Subsection 1.01(g)(2) above to comply with the
requirements of the Acts specified in the Snap Off Addendum to the Adoption
Agreement.  The provisions specified in
the Snap Off Addendum are effective as of the dates specified in the Snap Off
Addendum, which dates may be prior to the Amendment Effective Date.  Please read and complete, if necessary, the
Snap Off Addendum to the Adoption Agreement.

(4)                                 o                                    Special Effective Dates - Certain provisions of the
Plan shall be effective as of a date other than the date specified above.  Please complete the Special Effective Dates
Addendum to the Adoption Agreement indicating the affected provisions and their
effective dates.

(5)                                 o                                    Plan Merger Effective Dates.  Certain plan(s) were merged into the Plan and
certain provisions of the Plan are effective with respect to the merged plan(s)
as of a date other than the date specified above.  Please complete the Special Effective Dates
Addendum to the Adoption Agreement indicating the plan(s) that have merged into
the Plan and the effective date(s) of such merger(s).

1.02        EMPLOYER

 

(a)                                  Employer Name:                 Vonage
Holdings Corp                                                                                       

Address:                                2147
Route 27                                                                                                       

	
   

  	
  Edison, NJ 08817-3365

  
	
   

  	
   

  
	
   

  	
  Contact’s Name:

  	
  Michael Porta

  
	
   

  	
   

  	
   

  
	
   

  	
  Telephone Number:

  	
  (732) 528-2600

  

 

(1)                                 Employer’s Tax
Identification Number:            11-3547680

 

2

 

(2)                                 Business form
of Employer (check one):

(A)                               þ                                    Corporation or
limited liability company taxed as a corporation

(B)                               o                                    Sole
proprietor, partnership, or limited liability company taxed as a sole
proprietor or partnership

(C)                               o                                    Subchapter S
corporation

(D)                               o                                    Tax-exempt
organization

(E)                                 o                                    Governmental
entity

(3)                                 Employer’s
fiscal year end:                12/31                                                                                       

(4)                                 Date business
commenced:                5/1/2000                                                                                 

(b)                                  The term “Employer” includes the following Related Employer(s) (as
defined in Subsection 2.01(rr)) (list each participating
Related Employer and its Employer Tax Identification Number):

                                                                                                                                                                                

                                                                                                                                                                                

                                                                                                                                                                                

                                                                                                                                                                                

1.03        TRUSTEE

 

	
  (a)

  	
  Trustee Name:

  	
  Fidelity Management Trust Company

  
	
   

  	
  Address:

  	
  82 Devonshire Street

  
	
   

  	
   

  	
  Boston, MA 02109

  

 

1.04        COVERAGE

 

All
Employees who meet the conditions specified below shall be eligible to
participate in the Plan:

(a)                                  Age Requirement (check one):

(1)                                 o            no age requirement.

(2)                                 þ            must have attained age:  21 (not
to exceed 21).

(b)                                  Eligibility Service Requirement (check one):

 

3

 

(1)                                 Eligibility to Participate in Plan (check one):

(A)                               o                                    no Eligibility
Service requirement.

(B)                               þ                                    three months of
Eligibility Service requirement (no minimum number Hours of Service can be
required).

(C)                               o                                    six months of
Eligibility Service requirement (no minimum number Hours of Service can be
required).

(D)                               o                                    one year of
Eligibility Service requirement (at least 1,000 Hours of Service are required
during the Eligibility Computation Period).

(c)                                  Eligible Class of Employees (check one):

Note:  The Plan may not cover employees who are residents of
Puerto Rico.  These employees are
automatically excluded from the eligible class, regardless of the Employer’s
selection under this Subsection 1.04(c).

(1)                                 þ                                    includes all
Employees of the Employer.

(2)                                 o                                    includes all
Employees of the Employer except for (check the appropriate box(es)):

(A)                               o                                    employees
covered by a collective bargaining agreement.

(B)                               o                                    Highly
Compensated Employees as defined in Code Section 414(q).

(C)                               o                                    Leased
Employees as defined in Subsection 2.01(cc).

(D)                               o                                    nonresident
aliens who do not receive any earned income from the Employer which constitutes
United States source income.

(E)                                 o                                    other:

	
   

  	
   

  
	
   

  	
   

  

 

Note:  The Employer should exercise caution when excluding
employees from participation in the Plan. 
Exclusion of employees may adversely affect the Plan’s satisfaction of
the minimum coverage requirements, as provided in Code Section 410(b).

 

4

 

(d)                                  The Entry Dates shall be (check one):

(1)                                 o                                    the first day
of each Plan Year and the first day of the seventh month of each Plan Year.

(2)                                 o                                    the first day
of each Plan Year and the first day of the fourth, seventh, and tenth months of
each Plan Year.

(3)                                 þ                                    the first day
of each month.

(4)                                 o                                    the first day
of each Plan Year.  (Do not select if there is an Eligibility Service requirement of more
than six months in Subsection 1.04(b) or if there is an age requirement of more
than 20 1/2 in Subsection 1.04(a).)

(e)                                  Date of Initial Participation - An Employee shall become
a Participant unless excluded by Subsection 1.04(c) above on the Entry Date
immediately following the date the Employee completes the service and age
requirement(s) in Subsections 1.04(a) and (b), if any, except (check one):

(1)                                 o                                    no exceptions.

(2)                                 o                                    Employees
employed on the Effective Date in Subsection 1.01(g)(1) or (2) shall become
Participants on that date.

(3)                                 þ                                    Employees who
meet the age and service requirement(s) of Subsections 1.04(a) and (b) on the
Effective Date in Subsection 1.01(g)(1) or (2) shall become Participants on
that date.

1.05        COMPENSATION

 

Compensation for purposes of determining contributions shall be as
defined in Section 5.02, modified as provided below.

(a)                                  Compensation Exclusions:  Compensation shall
exclude the item(s) listed below for purposes of determining
contributions.  (Check the appropriate
box(es)):

(1)                                 o                                    No
exclusions.  (Must be selected if Section 1.10(a)(3), Safe Harbor Matching Employer
Contributions, or Section 1.11(a)(3), Safe Harbor Nonelective Employer
Contributions, is selected.)

(2)                                 o                                    Overtime Pay.

(3)                                 o                                    Bonuses.

 

5

 

(4)                                 o                                    Commissions.

(5)                                 þ                                    The value of a
qualified or a non-qualified stock option granted to an Employee by the
Employer to the extent such value is includable in the Employee’s taxable
income.

(6)                                 þ                                    Severance Pay.

Note:  If the Employer selects Option (2), (3), (4), (5), or
(6) with respect to Nonelective Employer Contributions, Compensation must be
tested to show that it meets the requirements of Code Section 414(s) or
401(a)(4).  These exclusions shall not
apply for purposes of the “Top Heavy” requirements in Section 15.03, or for
allocating non-safe harbor Nonelective Employer Contributions if the Integrated
Formula is elected in Subsection 1.11(b)(2).

(b)                                  Compensation for the First Year of Participation -
Contributions for the Plan Year in which an Employee first becomes a
Participant shall be determined based on the Employee’s Compensation (check
one):

(1)                                 o                                    for the entire
Plan Year.

(2)                                 þ                                    for the portion
of the Plan Year in which the Employee is eligible to participate in the Plan.

Note:  If the initial Plan Year of a new Plan consists of
fewer than 12 months from the Effective Date in Subsection 1.01(g)(1) through
the end of the initial Plan Year, Compensation for purposes of determining the
amount of contributions, other than non-safe harbor Nonelective Employer
Contributions, under the Plan shall be the period from such Effective Date
through the end of the initial year. 
However, for purposes of determining the amount of non-safe harbor
Nonelective Employer Contributions and for other Plan purposes, where
appropriate, the full 12-consecutive-month period ending on the last day of the
initial Plan Year shall be used.

1.06        TESTING
RULES

 

(a)                                  ADP/ACP Present Testing Method - The testing method for
purposes of applying the “ADP” and “ACP” tests described in Sections 6.03 and
6.06 of the Plan shall be the (check one):

(1)                                 o                                    Current Year Testing Method - The “ADP” or “ACP” of
Highly Compensated Employees for the Plan Year shall be compared to the “ADP”
or “ACP” of Non-Highly Compensated Employees for the same Plan Year.  (Must choose if
Option 1.10(a)(3), Safe Harbor Matching Employer Contributions, or Option
1.11(a)(3),

 

6

 

                                                                                                Safe Harbor Formula, with respect to Nonelective Employer Contributions
is checked.)

(2)                                 þ                                    Prior Year Testing Method - The “ADP” or “ACP” of
Highly Compensated Employees for the Plan Year shall be compared to the “ADP”
or “ACP” of Non-Highly Compensated Employees for the immediately
preceding Plan Year.  (Do not choose if Option 1.10(a)(3), Safe Harbor Matching Employer
Contributions, or Option 1.11(a)(3), Safe Harbor Formula, with respect to
Nonelective Employer Contributions is checked.)

(3)                                 o                                    Not
applicable.  (Only if Option 1.01(b)(3), Profit Sharing Only, is checked or Option
1.04(c)(2)(B), excluding all Highly Compensated Employees from the eligible
class of Employees, is checked.)

Note:  Restrictions apply on elections to change
testing methods that are made after the end of the GUST remedial amendment
period.

(b)                                  First Year Testing Method - If the first Plan Year
that the Plan, other than a successor plan, permits Deferral Contributions or
provides for either Employee or Matching Employer Contributions, occurs on or
after the Effective Date specified in Subsection 1.01(g), the “ADP” and/or “ACP”
test for such first Plan Year shall be applied using the actual “ADP” and/or “ACP”
of Non-Highly Compensated Employees for such first Plan Year, unless otherwise
provided below.

(1)                                 þ                                    The “ADP”
and/or “ACP” test for the first Plan Year that the Plan permits Deferral
Contributions or provides for either Employee or Matching Employer
Contributions shall be applied assuming a 3% “ADP” and/or “ACP” for Non-Highly
Compensated Employees.  (Do not choose unless Plan uses prior year
testing method described in Subsection 1.06(a)(2).)

(c)                                  HCE Determinations:  Look Back
Year - The look back year for purposes of determining
which Employees are Highly Compensated Employees shall be the
12-consecutive-month period preceding the Plan Year, unless otherwise provided
below.

(1)                                 o                                    Calendar Year Determination - The look back year shall
be the calendar year beginning within the preceding Plan Year.  (Do not choose
if the Plan Year is the calendar year.)

(d)                                  HCE Determinations:  Top Paid
Group Election - All Employees with Compensation exceeding $80,000
(as indexed) shall be considered Highly Compensated Employees unless Top Paid
Group Election below is checked.

 

7

 

(1)                                 o                                    Top Paid Group Election - Employees with
Compensation exceeding $80,000 (as indexed) shall be considered Highly
Compensated Employees only if they are in the top paid group (the top 20% of
Employees ranked by Compensation).

Note:  Effective for determination years beginning on or
after January 1, 1998, if the Employer elects Option 1.06(c)(1) and/or
1.06(d)(1), such election(s) must apply consistently to all retirement plans of
the Employer for determination years that begin with or within the same
calendar year (except that Option 1.06(c)(1), Calendar Year Determination,
shall not apply to calendar year plans).

1.07        DEFERRAL
CONTRIBUTIONS

 

(a)                                  þ            Deferral Contributions - Participants may elect to have
a portion of their Compensation contributed to the Plan on a before-tax basis
pursuant to Code Section 401(k).

(1)                                 Regular Contributions - The Employer shall make a
Deferral Contribution in accordance with Section 5.03 on behalf of each
Participant who has an executed salary reduction agreement in effect with the
Employer for the payroll period in question, not to exceed 90% of
Compensation for that period.

Note:  For Limitation Years beginning prior to 2002, the
percentage elected above must be less than 25% in order to satisfy the
limitation on annual additions under Code Section 415 if other types of
contributions are provided under the Plan.

(A)                               o                                    Instead of
specifying a percentage of Compensation, a Participant’s salary reduction
agreement may specify a dollar amount to be contributed each payroll period,
provided such dollar amount does not exceed the maximum percentage of
Compensation specified in Subsection 1.07(a)(1) above.

(B)                               A Participant
may increase or decrease, on a prospective basis, his salary reduction
agreement percentage as of the next Entry Date.

Note:  Notwithstanding the provisions of Subsection
1.07(a)(1)(B), if Option 1.10(a)(3), Safe Harbor Matching Employer
Contributions, or 1.11(a)(3), Safe Harbor Formula, with respect to Nonelective
Employer Contributions is checked, the Plan provides that an Active Participant
may change his salary reduction agreement percentage for the Plan Year within a
reasonable period (not fewer than 30 days) of receiving the notice described in
Section 6.10.

 

8

 

(C)                               A Participant
may revoke, on a prospective basis, a salary reduction agreement at any time
upon proper notice to the Administrator but in such case may not file a new
salary reduction agreement until any subsequent Entry Date.

(2)                                 o                                    Additional Deferral Contributions - The Employer may allow
Participants upon proper notice and approval to enter into a special salary
reduction agreement to make additional Deferral Contributions in an amount up
to 100% of their Compensation for the payroll period(s) in the final month of
the Plan Year.

(3)                                 o                                    Bonus Contributions - The Employer may allow Participants upon
proper notice and approval to enter into a special salary reduction agreement
to make Deferral Contributions in an amount up to 100% of any Employer paid
cash bonuses designated by the Employer on a uniform and non-discriminatory
basis that are made for such Participants during the Plan Year.  The Compensation definition elected by the
Employer in Subsection 1.05(a) must include bonuses if bonus contributions are
permitted.

Note:  A Participant’s contributions under Subsection
1.07(a)(2) and/or (3) may not cause the Participant to exceed the percentage
limit specified by the Employer in Subsection 1.07(a)(1) for the full Plan
Year.  If the Administrator anticipates
that the Plan will not satisfy the “ADP” and/or “ACP” test for the year, the
Administrator may reduce the rate of Deferral Contributions of Participants who
are Highly Compensated Employees to an amount objectively determined by the
Administrator to be necessary to satisfy the “ADP” and/or “ACP” test.

1.08        EMPLOYEE
CONTRIBUTIONS (AFTER-TAX CONTRIBUTIONS)

 

(a)                                  o                                    Employee Contributions - Participants may not
currently make after-tax Employee Contributions to the Plan, but the Employer
does maintain frozen Employee Contributions Accounts.

1.09        QUALIFIED
NONELECTIVE CONTRIBUTIONS

 

(a)                                  Qualified Nonelective Employer Contributions - If Option
1.07(a), Deferral Contributions, is checked, the Employer may contribute an
amount which it designates as a Qualified Nonelective Employer Contribution to
be included in the “ADP” or “ACP” test. 
Qualified Nonelective Employer Contributions shall be allocated to
Participants who were eligible to participate in the Plan at any time during
the Plan Year and are Non-Highly Compensated Employees either (A) in the ratio
which each Participant’s “testing compensation”, as defined in 

 

9

 

                                                Subsection
6.01(t), for the Plan Year bears to the total of all Participants’ “testing
compensation” for the Plan Year or (B) as a flat dollar amount.

1.10        MATCHING
EMPLOYER CONTRIBUTIONS  (Only if Option 1.07(a),
Deferral Contributions is checked)

 

(a)                                  þ            Basic Matching Employer Contributions (check one):

(1)                                 o                                    Non-Discretionary Matching Employer Contributions - The Employer
shall make a basic Matching Employer Contribution on behalf of each Participant
in an amount equal to the following percentage of a Participant’s Deferral
Contributions during the Contribution Period (check (A) or (B) and, if
applicable, (C)).

Note:  Effective for Plan Years beginning on or after January
1, 1999, if the Employer elected Option 1.11(a)(3), Safe Harbor Formula, with respect
to Nonelective Employer Contributions and meets the requirements for deemed
satisfaction of the “ADP” test in Section 6.10 for a Plan Year, the Plan will
also be deemed to satisfy the “ACP” test with respect to Matching Employer
Contributions if Matching Employer Contributions hereunder meet the
requirements in Section 6.11.

(A)                               o            Single Percentage Match:  ___%

(B)                               o            Tiered Match:

____% of the first ___%
of the Active Participant’s Compensation contributed to the Plan.

____% of the next ___% of
the Active Participant’s Compensation contributed to the Plan,

____% of the next ___% of
the Active Participant’s Compensation contributed to the Plan.

Note:  The percentages specified above for basic Matching
Employer Contributions may not increase as the percentage of Compensation
contributed increases.

(C)                               o                                    Limit on
Non-Discretionary Matching Employer Contributions (check the appropriate
box(es)):

(i)                                    o                                    Deferral Contributions in excess of ___%
of the Participant’s Compensation for the period in question shall not be
considered for non-discretionary Matching Employer Contributions.

 

10

 

Note:  If the Employer elected a percentage limit in (i)
above and requested the Trustee to account separately for matched and unmatched
Deferral Contributions made to the plan, the non-discretionary Matching
Employer Contributions allocated to each Participant must be computed, and the
percentage limit applied, based upon each payroll period.

(ii)                                o                                    Matching Employer Contributions for each
Participant for each Plan Year shall be limited to $_______.

(2)                                 þ            Discretionary
Matching Employer Contributions - The Employer may make a basic
Matching Employer Contribution on behalf of each Participant in an amount equal
to the percentage declared for the Contribution Period, if any, by a Board of
Directors’ Resolution (or by a Letter of Intent for a sole proprietor or
partnership) of the Deferral Contributions made by each Participant during the
Contribution Period.  The Board of
Directors’ Resolution (or Letter of Intent, if applicable) may limit the
Deferral Contributions matched to a specified percentage of Compensation or
limit the amount of the match to a specified dollar amount.

(A)                               o                                    4% Limitation on Discretionary Matching Employer Contributions for Deemed
Satisfaction of “ACP” Test - In no event may the
dollar amount of the discretionary Matching Employer Contribution made on a
Participant’s behalf for the Plan Year exceed 4% of the Participant’s
Compensation for the Plan Year.  (Only if Option 1.11(a)(3), Safe Harbor Formula, with respect to
Nonelective Employer Contributions is checked.)

(3)                                 o                                    Safe Harbor Matching Employer Contributions - Effective
only for Plan Years beginning on or after January 1, 1999, if the Employer
elects one of the safe harbor formula Options provided in the Safe Harbor
Matching Employer Contribution Addendum to the Adoption Agreement and provides
written notice each Plan Year to all Active Participants of their rights and
obligations under the Plan, the Plan shall be deemed to satisfy the “ADP” test
and, under certain circumstances, the “ACP” test.

(b)                                  o                                    Additional Matching Employer Contributions - The Employer
may at Plan Year end make an additional Matching Employer Contribution equal to
a percentage declared by the Employer, through a Board of Directors’ Resolution
(or by a Letter of Intent for a sole proprietor or partnership), of 

 

11

 

                                                                                                the Deferral
Contributions made by each Participant during the Plan Year.  (Only if
Option 1.10(a)(1) or (3) is checked.)  The Board of Directors’ Resolution (or Letter
of Intent, if applicable) may limit the Deferral Contributions matched to a
specified percentage of Compensation or limit the amount of the match to a
specified dollar amount.

(1)                                 o                                    4% Limitation on Additional Matching Employer Contributions for Deemed
Satisfaction of “ACP” Test - In no event may the
dollar amount of the additional Matching Employer Contribution made on a
Participant’s behalf for the Plan Year exceed 4% of the Participant’s
Compensation for the Plan Year.  (Only if Option 1.10(a)(3), Safe Harbor Matching Employer
Contributions, or Option 1.11(a)(3), Safe Harbor Formula, with respect to
Nonelective Employer Contributions is checked.)

Note:  If the Employer elected Option 1.10(a)(3), Safe Harbor
Matching Employer Contributions, above and wants to be deemed to have satisfied
the “ADP” test for Plan Years beginning on or after January 1, 1999, the
additional Matching Employer Contribution must meet the requirements of Section
6.10.  In addition to the foregoing
requirements, if the Employer elected either Option 1.10(a)(3), Safe Harbor
Matching Employer Contributions, or Option 1.11(a)(3), Safe Harbor Formula,
with respect to Nonelective Employer Contributions, and wants to be deemed to
have satisfied the “ACP” test with respect to Matching Employer Contributions
for the Plan Year, the Deferral Contributions matched may not exceed the
limitations in Section 6.11.

(c)                                  Contribution Period for Matching Employer Contributions - The
Contribution Period for purposes of calculating the amount of basic Matching
Employer Contributions described in Subsection 1.10(a) is:

(1)                                 o                                    each Plan Year.

(2)                                 þ                                      each payroll
period.

The Contribution Period
for additional Matching Employer Contributions described Subsection 1.10(b) in
the Plan Year.

(d)                                  Continuing Eligibility Requirement(s) - A
Participant who makes Deferral Contributions during a Contribution Period shall
only be entitled to receive Matching Employer Contributions under Section 1.10
for that Contribution Period if the Participant satisfies the following
requirement(s) (Check the appropriate box(es). 
Options (3) and (4) may not be elected together; Option (5) may not be
elected with Option (2), (3), or (4); Options (2), (3), (4), (5) and (7) may
not be elected with respect to basic Matching Employer Contributions if Option
1.10(a)(3), Safe Harbor Matching Employer Contributions, is checked):

 

12

 

(1)                                 þ                                    No requirements.

(2)                                 o                                    Is employed by
the Employer or a Related Employer on the last day of the Plan Year.  (Only if the Contribution Period is the Plan Year.)

(3)                                 o                                    Earns at least
501 Hours of Service during the Plan Year. 
(Only if the Contribution Period is the Plan
Year.)

(4)                                 o                                    Earns at least
1,000 Hours of Service during the Plan Year. 
(Only if the Contribution Period is the Plan
Year.)

(5)                                 o                                    Either earns at
least 501 Hours of Service during the Plan Year or is employed by the Employer
or a Related Employer on the last day of the Plan Year.  (Only if the Contribution
Period is the Plan Year.)

(6)                                 o                                    Is not a Highly
Compensated Employee for the Plan Year.

(7)                                 o                                    Is not a
partner or a member of the Employer, if the Employer is a partnership or an
entity taxed as a partnership.

(8)                                 o                                    Special
continuing eligibility requirement(s) for additional Matching Employer
Contributions.  (Only if Options 1.10(a)(3), Safe Harbor Matching Employer and (b),
Additional Matching Employer Contributions, are checked.)

(A)                               The continuing
eligibility requirement(s) for additional Matching Employer Contributions
is/are:  ____________ (Fill in number of applicable eligibility requirement(s) from above.)

Note:  If Option (2), (3), (4), or (5) above is selected,
then Matching Employer Contributions can only be funded
by the Employer after the Plan Year ends.  Matching Employer Contributions funded during
the Plan Year shall not be subject to the eligibility requirements of Option
(2), (3), (4), or (5).  If Option (2),
(3), (4), or (5) is adopted during a Plan Year, as applicable, such Option
shall not become effective until the first day of the next Plan Year.

(e)                                  þ            Qualified Matching Employer Contributions - The Employer
may make a Qualified Matching Employer Contribution that may be used to satisfy
the “ADP” test on Deferral Contributions and excluded in applying the “ACP”
test on Employee and Matching Employer Contributions.  Qualified Matching Employer Contributions
shall be allocated to Participants who meet the continuing eligibility
requirement(s) described in Subsection 1.10(d) above and who are Non-Highly
Compensated Employees for the Plan Year.

 

13

 

Note:  Qualified Matching Contributions may not be
excluded in applying the “ACP” test for a Plan Year if the Employer elected
Option 1.10(a)(3), Safe Harbor Matching Employer Contributions, or Option
1.11(a)(3), Safe Harbor Formula, with respect to Nonelective Employer
Contributions, and the “ADP” test is deemed satisfied under Section 6.10 for
such Plan Year.

1.11        NONELECTIVE
EMPLOYER CONTRIBUTIONS

 

Note:  An Employer may elect both a fixed formula and a
discretionary formula.  If both are
selected, the discretionary formula shall be treated as an additional
Nonelective Employer Contribution and allocated separately in accordance with
the allocation formula selected by the Employer.

(a)                                  o            Fixed Formula:  An Employer may elect both the
Safe Harbor Formula and one of the other fixed formulas.  Otherwise, the Employer may only select one
of the following.)

(1)                                 o                                    Fixed Percentage Employer Contribution - For each Plan Year, the
Employer shall contribute for each eligible Active Participant an amount equal
to ___% (not to exceed 15% for Plan Years
beginning prior to 2002 and 25% for Plan Years beginning on or after January 1,
2002) of such Active Participant’s Compensation.

(2)                                 o                                    Fixed Flat Dollar Employer Contribution - For each Plan Year,
the  Employer shall contribute for each
eligible Active Participant an amount equal to $           .

(3)                                 o                                    Safe Harbor Formula - Effective only with respect to Plan Years
that begin on or after January 1, 1999, the Nonelective Employer Contribution
specified in the Safe Harbor Nonelective Employer Contribution Addendum is
intended to satisfy the safe harbor contribution requirements under the Code
such that the “ADP” test (and, under certain circumstances, the “ACP” test) is
deemed satisfied.  Please complete the
Safe Harbor Nonelective Employer Contribution Addendum to the Adoption
Agreement.  (Choose only if Option 1.07(a), Deferral Contributions, is checked.)

(b)                                  þ            Discretionary Formula - The Employer may decide each
Plan Year whether to make a discretionary Nonelective Employer Contribution on
behalf of eligible Active Participants in accordance with Section 5.10.  Such contributions shall be allocated to
eligible Active Participants based upon the following (check (1) or (2)):

(1)                                 o                                    Non-integrated Allocation Formula - In the ratio that each
eligible Active Participant’s Compensation bears to the total 

 

14

 

                                                                                                Compensation
paid to all eligible Active Participants for the Plan Year.

(2)                                 þ                                    Integrated Allocation Formula - As (A) a percentage of
each eligible Active Participant’s Compensation plus (B) a percentage of each
eligible Active Participant’s Compensation in excess of the “integration level”
as defined below.  The percentage of
Compensation in excess of the “integration level” shall be equal to the lesser
of the percentage of the Active Participant’s Compensation allocated under (A)
above or the “permitted disparity limit” as defined below.

Note:  An Employer that has elected the Safe Harbor formula
in Subsection 1.11(a)(3) above may not take Nonelective Employer Contributions
made to satisfy the safe harbor into account in applying the integrated
allocation formula described above.

“Integration level” means
the Social Security taxable wage base for the Plan Year, unless the Employer
elects a lesser amount in (A) or (B) below.

(A)                               100% (not to exceed 100%) of the Social Security
taxable wage base for the Plan Year, or

(B)                               $       
(not to exceed the Social Security taxable
wage base).

“Permitted disparity
limit” means the percentage provided by the following table:

	
  The
  “Integration Level” is ___% of the Taxable Wage Base

  	
   

  	
  The
  “Permitted Disparity Limit” is

  
	
   

  	
   

  	
   

  
	
  20% or
  less

  	
   

  	
  5.7%

  
	
  More
  than 20%, but not more than 80%

  	
   

  	
  4.3%

  
	
  More
  than 80%, but less than 100%

  	
   

  	
  5.4%

  
	
  100%

  	
   

  	
  5.7%

  

Note:  An Employer who maintains any other plan that provides
for Social Security Integration (permitted disparity) may not elect Option
1.11(b)(2).

(c)                                  Continuing Eligibility Requirement(s) - A
Participant shall only be entitled to receive Nonelective Employer
Contributions for a Plan Year under this Section 1.11 if the Participant
satisfies the following requirement(s) (Check the appropriate box(es) - Options
(3) and (4) may not be elected together; Option (5) 

 

15

 

                                                may not be
elected with Option (2), (3), or (4); Options (2), (3), (4), or (5) may not be
elected with respect to Nonelective Employer Contributions under the fixed
formula if Option 1.11(a)(3), Safe Harbor Formula, is checked):

(1)                                 o                                    No
requirements.

(2)                                 þ                                    Is employed by
the Employer or a Related Employer on the last day of the Plan Year.

(3)                                 þ                                    Earns at least
501 Hours of Service during the Plan Year.

(4)                                 o                                    Earns at least
1,000 Hours of Service during the Plan Year.

(5)                                 o                                    Either earns at
least 501 Hours of Service during the Plan Year or is employed by the Employer
or a Related Employer on the last day of the Plan Year.

(6)                                 o                                    Special
continuing eligibility requirement(s) for discretionary Nonelective Employer
Contributions.  (Only if both Options 1.11(a)(3), safe harbor Nonelective Employer
Contribution, and 1.11(b), discretionary Nonelective Employer Contributions,
are checked.)

(A)                               The continuing
eligibility requirement(s) for discretionary Nonelective Employer Contributions
is/are:  _______ (Fill in number of
applicable eligibility requirement(s) from above.)

Note: 
If Option (2), (3), (4), or (5) above is selected then Nonelective
Employer Contributions can only be funded by the
Employer after the Plan Year ends.  Nonelective Employer Contributions funded
during the Plan Year shall not be subject to the eligibility requirements of
Option (2), (3), (4), or (5).  If Option
(2), (3), (4), or (5) is adopted during a Plan Year, such Option shall not
become effective until the first day of the next Plan Year.

1.12        EXCEPTIONS
TO CONTINUING ELIGIBILITY REOUIREMENTS

 

o                                    Death, Disability, and Retirement Exception to Eligibility Requirements - Active Participants who do not meet
any last day or Hours of Service requirement under Subsection 1.10(d) or
1.11(c) because they become disabled, as defined in Section 1.14, retire, as
provided in Subsection 1.13(a), (b), or (c), or die shall nevertheless receive
an allocation of Nonelective Employer and/or Matching Employer
Contributions.  No Compensation shall be
imputed to Active Participants who become disabled for the period following
their disability.

 

16

 

1.13        RETIREMENT

 

(a)                                  The Normal Retirement Age under the Plan is (check one):

(1)                                 þ                                    age 65.

(2)                                 o                                    age ___
(specify between 55 and 64).

(3)                                 o                                    later of age            
(not to exceed 65) or the fifth
anniversary of the Participant’s Employment Commencement Date.

(b)                                  þ            The Early Retirement Age is the first day of the month after the
Participant attains age 55.0 (specify 55
or greater) and completes 5.0 years of
Vesting Service.

Note:  If this Option is elected, Participants who are
employed by the Employer or a Related Employer on the date they reach Early
Retirement Age shall be 100% vested in their Accounts under the Plan.

(c)                                  þ                                    A Participant who becomes disabled, as defined in Section 1.14, is
eligible for disability retirement.

Note:  If this Option is elected, Participants who are
employed by the Employer or a Related Employer on the date they become disabled
shall be 100% vested in their Accounts under the Plan.

1.14        DEFINITION
OF DISABLED

 

A Participant is disabled if he/she (check the appropriate box(es)):

(a)                                  o                                    satisfies the
requirements for benefits under the Employer’s long-term disability plan.

(b)                                  þ                                    satisfies the
requirements for Social Security disability benefits.

(c)                                  þ                                    is determined
to be disabled by a physician approved by the Employer.

1.15        VESTING

 

A Participant’s vested interest in Matching Employer Contributions
and/or Nonelective Employer Contributions, other than Safe Harbor Matching
Employer and/or Safe Harbor Nonelective Employer Contributions elected in
Subsection 1.10(a)(3) or 1.11(a)(3), shall be based upon his years of Vesting
Service and the schedule selected below.

 

17

 

(a)                                  Vesting Schedule

Note: 
The vesting schedule selected below applies only to Nonelective Employer
Contributions and Matching Employer Contributions other than safe harbor
contributions under Option 1.11(a)(3) or Option 1.10(a)(3).  Safe Harbor contributions under Options
1.11(a)(3) and 1.10(a)(3) are always 100% vested immediately.

(1)                                 Nonelective Employer Contributions and Matching Employer Contributions (check one):

(A)                               o                                    N/A - No
Employer Contributions other than safe harbor Nonelective Employer
Contributions and/or safe harbor Matching Employer Contributions

(B)                               o                                    100% Vesting
immediately

(C)                               þ                                    3 year cliff
(see C below)

(D)                               o                                    6 year
graduated (see D below)

(E)                                 o                                    Other vesting
(complete E below)

	
  Years of Vesting Service

  	
   

  	
  Applicable Vesting Schedule(s)

  	
   

  
	
   

  	
   

  	
  C

  	
   

  	
  D

  	
   

  	
  E

  	
   

  
	
  0

  	
   

  	
  0

  	
  %

  	
  0

  	
  %

  	
  —

  	
  %

  
	
  1

  	
   

  	
  0

  	
  %

  	
  0

  	
  %

  	
  —

  	
  %

  
	
  2

  	
   

  	
  0

  	
  %

  	
  20

  	
  %

  	
  —

  	
  %

  
	
  3

  	
   

  	
  100

  	
  %

  	
  40

  	
  %

  	
  —

  	
  %

  
	
  4

  	
   

  	
  100

  	
  %

  	
  60

  	
  %

  	
  —

  	
  %

  
	
  5

  	
   

  	
  100

  	
  %

  	
  80

  	
  %

  	
  —

  	
  %

  
	
  6 or more

  	
   

  	
  100

  	
  %

  	
  100

  	
  %

  	
  __

  	
  %

  

 

Note:  A
schedule elected under E above must be
at least as favorable as one of the schedules in C
or D above.

1.16        PREDECESSOR
EMPLOYER SERVICE

 

o                                    Service for purposes of
eligibility in Subsection 1.04(b) and vesting in Subsection 1.15(a) of this
Plan shall include service with the following predecessor employer(s):

 

18

 

1.17        PARTICIPANT
LOANS

 

Participant
loans (check
one):

(a)                                  þ            are allowed in accordance with Article 9 and loan procedures outlined
in the Service Agreement.

(b)                                  o            are not allowed.

1.18        IN-SERVICE
WITHDRAWALS

 

Participants
may make withdrawals prior to termination of employment under the following
circumstances
(check the appropriate box(es)):

(a)                                  þ            Hardship Withdrawals - Hardship withdrawals from a
Participant’s Deferral Contributions Account shall be allowed in accordance
with Section 10.05, subject to a $500 minimum amount.

(b)                                  þ            Age 59 1/2 - Participants shall be entitled to receive a
distribution of all or any portion of the following Accounts upon attainment of
age 59 1/2 (check one):

(1)                                 o            Deferral Contributions Account

(2)                                 þ            All vested account balances.

(c)                                  Withdrawal of Employee Contributions and Rollover Contributions -

(1)                                 Employee
Contributions may be withdrawn in accordance with Section 10.02 at any time.

(2)                                 Rollover
Contributions may be withdrawn in accordance with Section 10.03 at any time.

(d)                                  o            Protected In-Service Withdrawal Provisions - Check if
the Plan was converted by 

plan
amendment or received transfer contributions from another defined contribution
plan, and benefits under the other defined contribution plan were payable as
(check the appropriate box(es)):

(1)                                 o            an in-service withdrawal of vested employer
contributions maintained in a Participant’s Account (check (A) and/or (B)):

(A)                               o            for at least _______ (24 or more)
months.

(B)                               o            after the Participant has at least
60 months of participation.

 

19

 

(2)                                 o                                    another
in-service withdrawal option that is a “protected benefit” under Code Section
411(d)(6).  Please complete the Protected
In-Service Withdrawals Addendum to the Adoption Agreement identifying the
in-service withdrawal option(s).

1.19        FORM
OF DISTRIBUTIONS

 

Subject
to Section 13.01, 13.02 and Article 14, distributions under the Plan shall be
paid as provided below.  (Check the
appropriate box(es).):

(a)                                  Lump Sum Payments - Lump sum payments are
always available under the Plan.

(b)                                  o            Installments Payments - Participants may elect
distribution under a systematic withdrawal plan (installments).

(c)                                  þ            Annuities (Check if the Plan is retaining any annuity
form(s) of payment.)

(1)                                 An annuity form
of payment is available under the Plan for the following reason(s) (check(A)
and/or (B), as applicable):

(A)                               þ            As a result of the Plan’s receipt of
a transfer of assets from a defined contribution plan or pursuant to the Plan
terms prior to the Amendment Effective Date specified in Section 1.01(g)(2),
benefits were previously payable in the form of an annuity that the Employer
elects to continue to be offered as a form of payment under the Plan.

(B)                               o            The Plan received a transfer of
assets from a defined benefit plan or another defined contribution plan that
was subject to the minimum funding requirements of Code Section 412 and
therefore an annuity form of payment is a protected benefit under the Plan in
accordance with Code Section 411(d)(6).

(2)                                 The normal form
of payment under the Plan is (check (A) or (B)):

(A)                               o            A lump sum payment.

(i)                                    Optional
annuity forms of payment (check (I) and/or (II), as applicable).  (Must
check and complete (I) if a life annuity is one of the optional annuity forms
of payment under the Plan.)

(I)    o                               A married Participant who elects an annuity
form of payment shall receive a qualified joint and ___% (at least
50%) survivor 

 

20

 

                                                                                                annuity. 
An unmarried Participant shall receive a single life annuity, unless a
different form of payment is specified below:

                                                                                                

(II)                                o                                    Other annuity form(s) of payment.       Please complete Subsection (a) of the
Forms of Payment Addendum describing the other annuity form(s) of payment
available under the Plan.

(B)                               þ            A life annuity (complete (i) and
(ii) and check (iii) if applicable).

(i)                                    The normal form
for married Participants is a qualified joint and 50% (at least 50%) survivor annuity.  The normal form for unmarried Participants is
a single life annuity, unless a different annuity form is specified below:

                                                                                                                                

(ii)                                The qualified
preretirement survivor annuity provided to a Participant’s spouse is purchased
with 100% (at least 50%) of
the Participant’s Account.

(iii)     þ            Other annuity form(s) of
payment.  Please complete

Subsection (a) of the Forms of Payment Addendum describing the other
annuity form(s) of payment available under the Plan.

(d)      o                       Other Non-Annuity Forms of Payment - As a result of the Plan’s
receipt of a transfer of assets from another plan or pursuant to the Plan terms
prior to the Amendment Effective Date specified in 1.01(g)(2), benefits were
previously payable in the following form(s) of payment not described in (a),
(b) or (c) above and the Plan will continue to offer these form(s) of payment:

____________________________________

(e)      o        Eliminated
Forms of Payment Not Protected Under Code Section 411(d)(6).  Check if either (1) under the Plan terms
prior to the Amendment Effective Date or (2) under the terms of another plan
from which assets were transferred, benefits were payable in a form of payment that
will cease to be offered after a specified date.  Please complete 

 

21

 

                                                                                                Subsection (b)
of the Forms of Payment Addendum describing the forms of payment previously
available and the effective date of the elimination of the form(s) of payment.

1.20        TIMING
OF DISTRIBUTIONS

 

Distribution
shall be made to an eligible Participant from his vested interest in his
Account as soon as reasonably practicable following the date the Participant’s
application for distribution is received by the Administrator, but in no event
later than his Required Beginning Date, as defined in Subsection 2.01(ss).

1.21        TOP
HEAVY STATUS

 

(a)                                  The Plan shall be subject to the Top-Heavy Plan requirements of Article
15 (check one):

(1)                                 o                                    for each Plan
Year, whether or not the Plan is a “top-heavy plan” as defined in Subsection
15.01(f).

(2)                                 þ                                    for each Plan
Year, if any, for which the Plan is a “top-heavy plan” as defined in Subsection
15.01(f).

(3)                                 o                                    Not
applicable.  (Choose only if Plan covers only employees subject to a collective
bargaining agreement.)

(b)                                  In determining whether the Plan is a “top-heavy plan” for an Employer
with at least one defined benefit plan, the following assumptions shall apply:

(1)                                 o                                    Interest
rate:  ___% per annum.

(2)                                 o                                    Mortality
table:  ______________.

(3)                                 þ                                    Not
applicable.  (Choose only if either (A) Plan covers only employees subject to a
collective bargaining agreement or (B) Employer does not maintain and has never
maintained any defined benefit plan during the five-year period ending on the
applicable “determination date”, as defined in Subsection 15.01(a).)

(c)                                  If the Plan is or is treated as a “top-heavy plan” for a Plan Year,
each non-key Employee shall receive an Employer Contribution of at least 3.0 (3, 4, 5, or 7 1/2)%
of Compensation for the Plan Year in accordance with Section 15.03.  The minimum Employer Contribution provided in
this Subsection 1.21(c) shall be made under this Plan only if the Participant
is not entitled to such contribution under another qualified plan of the
Employer, unless the Employer elects otherwise below:

 

22

 

(1)                                 o                                    The minimum
Employer Contribution shall be paid under this Plan in any event.

(2)                                 o                                    Another method
of satisfying the requirements of Code Section 416.  Please complete the 416 Contribution Addendum
to the Adoption Agreement describing the way in which the minimum contribution
requirements will be satisfied in the event the Plan is or is treated as a “top-heavy
plan”.

(3)                                 o                                    Not
applicable.  (Choose only if Plan covers only employees subject to a collective
bargaining agreement.)

Note:  The minimum Employer contribution may be less than the
percentage indicated in Subsection 1.21(c) above to the extent provided in
Section 15.03.

(d)                                  If the Plan is or is treated as a “top-heavy plan” for a Plan Year and
no vesting schedule was elected in Subsection 1.15(a)(1), for such Plan Year
and each Plan Year thereafter, the following vesting schedule shall apply (Only if
Option 1.01(b)(1), 401(k) Only, is checked) (check one):

(1)                                 o                                    Not
applicable.  (Choose only if Plan covers only employees subject to a collective
bargaining agreement.)

(2)                                 o                                    100% vested
after, ____ (not in excess of 3)
years of Vesting Service.

(3)                                 o                                    Graded vesting:

	
   

  	
  Years
  of Vesting Service

  	
   

  	
  Vesting
  Percentage

  	
   

  	
  Must be
  at Least

  
	
   

  	
  0

  	
   

  	
   

  	
   

  	
  0%

  
	
   

  	
  1

  	
   

  	
   

  	
   

  	
  0%

  
	
   

  	
  2

  	
   

  	
   

  	
   

  	
  20%

  
	
   

  	
  3

  	
   

  	
   

  	
   

  	
  40%

  
	
   

  	
  4

  	
   

  	
   

  	
   

  	
  60%

  
	
   

  	
  5

  	
   

  	
   

  	
   

  	
  80%

  
	
   

  	
  6 or more

  	
   

  	
   

  	
   

  	
  100%

  

 

1.22        CORRECTION TO MEET 415 REQUIREMENTS
UNDER MULTIPLE DEFINED CONTRIBUTION PLANS

 

If the Employer maintains
other defined contribution plans, annual additions to a Participant’s Account
shall be limited as provided in Section 6.12 of the Plan to meet the
requirements of Code Section 415, unless the Employer elects otherwise below
and 

 

23

 

completes the 415
Correction Addendum describing the order in which annual additions shall be
limited among the plans.

(a)                                  o            Other
Order for Limiting Annual Additions.

1.23        INVESTMENT
DIRECTION

 

Participant Accounts
shall be invested in accordance with the investment directions provided to the
Trustee by each Participant for allocating his entire Account among the
Options listed in the Service Agreement.

1.24        RELIANCE
ON OPINION LETTER

 

An adopting Employer may
rely on the opinion letter issued by the Internal Revenue Service as evidence
that this Plan is qualified under Code Section 401 only to the extent provided
in Announcement 2001-77, 2001-30 I.R.B. 
The Employer may not rely on the opinion letter in certain other
circumstances or with respect to certain qualification requirements, which are
specified in the opinion letter issued with respect to this Plan and in
Announcement 2001-77.  In order to have
reliance in such circumstances or with respect to such qualification requirements,
application for a determination letter must be made to Employee Plans
Determinations of the Internal Revenue Service. 
Failure to fill out the Adoption Agreement properly may result in
disqualification of the Plan.

This Adoption Agreement
may be used only in conjunction with Fidelity Basic Plan Document No 10.  The Prototype Sponsor shall inform the
adopting Employer of any amendments made to the Plan or of the discontinuance
or abandonment of the prototype plan document.

1.25        PROTOTYPE
INFORMATION:

 

	
   

  	
  Name of Prototype Sponsor:

  	
  Fidelity Management & Research Company

  
	
   

  	
  Address of Prototype Sponsor:

  	
  82 Devonshire Street 

  Boston, MA  02109

  
	
   

  	
   

  	
   

  

Questions regarding this
prototype document may be directed to the following telephone number:  1-800-343-9184.

 

24

EXECUTION PAGE

(Fidelity’s Copy)

IN WITNESS WHEREOF, the Employer has caused this
Adoption Agreement to be executed this 3rd day of December, 2004.

 

	
   

  	
  Employer:

  	
  VONAGE

  
	
   

  	
  By:

  	
  /s/ John Rego

  
	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  	
   

  
	
   

  	
  Employer:

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
  Accepted by:

  	
   

  	
   

  
	
  Fidelity Management Trust Company, as Trustee

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  Date:

  	
   

  
	
  Title

  	
   

  	
   

  	
   

  	
   

  
						

 

 

25

EXECUTION PAGE

(Employer’s Copy)

IN WITNESS WHEREOF, the Employer has caused this
Adoption Agreement to be executed this 18th day of November, 2004.

 

	
   

  	
  Employer:

  	
  VONAGE

  
	
   

  	
  By:

  	
  /s/ John Rego

  
	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  	
   

  
	
   

  	
  Employer:

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
  Accepted by:

  	
   

  	
   

  
	
  Fidelity Management Trust Company, as Trustee

  	
   

  	
   

  
	
  By:

  	
  /s/ Delphia D. Lawrence

  	
   

  	
  Date:

  	
  11/22/04

  
	
  Title

  	
  Authorized Signatory

  	
   

  	
   

  	
   

  
						

 

 

26

 

AMENDMENT EXECUTION PAGE

This page is to be
completed in the event the Employer modifies any prior election(s) or makes a
new election(s) in this Adoption Agreement. 
Attach the amended page(s) of the Adoption Agreement to this execution
page.

The following section(s)
of the Plan are hereby amended effective as of the date(s) set forth below:

	
  Section Amended

  	
  Page

  	
  Effective Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

IN WITNESS WHEREOF,
the Employer has caused this Amendment to be executed this ______ day of
______________, _____.

	
  Employer:

  	
   

  	
   

  	
  Employer:

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accepted by:

  	
   

  	
   

  	
   

  
	
  Fidelity Management Trust Company, as Trustee

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  Date:

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  
									

 

 

27

 

ADDENDUM

Re:  SPECIAL EFFECTIVE DATES

for

Plan Name:           Vonage
401(k) Retirement Plan

(a)      o                 Special Effective Dates for Other Provisions - The
following provisions (e.g., new eligibility requirements, new contribution
formula, etc.) shall be effective as of the dates specified herein:

	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  

 

 

(b)                                                                                  o            Plan Merger Effective Dates - The following plan(s) were
merged into the Plan after the Effective Date indicated in Subsection
1.01(g)(1) or (2), as applicable.  The
provisions of the Plan are effective with respect to the merged plan(s) as of
the date(s) indicated below:

	
  (1)

  	
  Name of merged plan:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Effective date:

  	
   

  
	
   

  	
   

  	
   

  
	
  (2)

  	
  Name of merged plan:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Effective date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (3)

  	
  Name of merged plan:

  	
   

  
	
   

  	
   

  
	
   

  	
  Effective date:

  	
   

  	
   

  
						

 

28

 

	
   

  	
  (4)

  	
  Name of merged plan:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Effective date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (5)

  	
  Name of merged plan:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Effective date:

  	
   

  	
   

  
						

 

29

 

ADDENDUM

Re:  SAFE HARBOR MATCHING EMPLOYER CONTRIBUTION

for

Plan Name:           Vonage
401(k) Retirement Plan

(a)                                  Safe Harbor Matching Employer Contribution Formula

Note: 
Matching Employer Contributions made under this Option must be 100%
vested when made and may only be distributed because of death, disability,
separation from service, age 59 1/2, or termination of the Plan without the
establishment of a successor plan.  In
addition, each Plan Year, the Employer must provide written notice to all
Active Participants of their rights and obligations under the Plan.

(1)                                 o            100% of the first 3% of the Active
Participant’s Compensation contributed to the Plan and 50% of the next 2% of
the Active Participant’s Compensation contributed to the Plan.

(A)                               o            Safe harbor Matching Employer
Contributions shall not be made on behalf of Highly Compensated
Employees.

Note: 
If the Employer selects this formula and does not elect Option
1.10(b), Additional Matching Employer Contributions, Matching Employer
Contributions will automatically meet the safe harbor contribution requirements
for deemed satisfaction of the “ACP” test. 
(Employee Contributions must still be tested.)

(2)                                 o            Other Enhanced Match:

____% of the first ____%
of the Active Participant’s Compensation contributed to the plan,

____% of the first ____%
of the Active Participant’s Compensation contributed to the plan,

____% of the first ____%
of the Active Participant’s Compensation contributed to the plan.

Note: 
To satisfy the safe harbor contribution requirement for the “ADP” test,
the percentages specified above for Matching Employer Contributions may not
increase as the percentage of Compensation contributed increases, and the
aggregate amount of Matching Employer Contributions at such rates must at least
equal the aggregate amount of 

 

30

 

Matching Employer
Contributions which would be made under the percentages described in (a)(1) of
this Addendum.

(A)                               o                                    Safe harbor
Matching Employer Contributions shall not be made on behalf of Highly
Compensated Employees.

(B)                               o                                    The formula
specified above is also intended to satisfy the safe harbor contribution
requirement for deemed satisfaction of the “ACP” test with respect to Matching
Employer Contributions.

Note: 
To satisfy the safe harbor contribution requirement for the “ACP” test,
the Deferral Contributions matched cannot exceed 6% of a Participant’s
Compensation.

 

31

ADDENDUM

Re:  SAFE HARBOR NONELECTIVE EMPLOYER CONTRIBUTION

for

Plan Name:  Vonage
401(k) Retirement Plan

(a)                                  Safe Harbor Nonelective Employer Contribution Election

(1)                                 o                                    For each Plan
Year, the Employer shall contribute for each eligible Active Participant an
amount equal to ______% (not less than 3% nor
more than 15%) of such Active Participant’s Compensation.

(2)                                 o                                    The Employer
may decide each Plan Year whether to amend the Plan by electing and completing
(A) below to provide for a contribution on behalf of each eligible Active
Participant in an amount equal to at least 3% of such Active Participant’s
Compensation.

Note: 
An Employer that has selected Subsection (a)(2) above must amend the
Plan by electing (A) below and completing the Amendment Execution Page no later
than 30 days prior to the end of each Plan Year for which safe harbor
Nonelective Employer Contributions are being made.

(A)                               o                                    For the Plan
Year beginning __________, the Employer shall contribute for each eligible
Active Participant an amount equal to __________% (not less than 3% nor more
than 15%) of such Active Participant’s Compensation.

Note: 
Safe Harbor Nonelective Employer Contributions must be 100% vested when
made and may only be distributed because of death, disability, separation from
service, age 59 1/2, or termination of the Plan without the establishment of a
successor plan.  In addition, each Plan
Year, the Employer must provide written notice to all Active Participants of
their rights and obligations under the Plan.

(b)                                                                                  o                                    Safe harbor
Nonelective Employer Contributions shall not be made on behalf

of Highly Compensated Employees.

(c)                                                                                  o                                    In conjunction
with its election of the safe harbor described above, the

Employer
has elected to make Matching Employer Contributions under Subsection 1.10 that
are intended to meet the requirements for deemed satisfaction of the “ACP” test
with respect to Matching Employer Contributions.

 

32

ADDENDUM

Re:  PROTECTED IN-SERVICE WITHDRAWALS

for

Plan Name:  Vonage
401(k) Retirement Plan

(a)                                  Other In-Service Withdrawal Provisions - Other in-service withdrawal options available under the Plan are
specified below:

 

33

ADDENDUM

Re:  FORMS OF PAYMENT

for

Plan Name:  Vonage
401(k) Retirement Plan

(a)                                  The following
optional forms of annuity will continue to be offered under the Plan:

Straight life annuity

Single Life Annuity with Installment refund

Fixed period annuities for any period of whole months which is not less than 60
and does not exceed the Life Expectancy of the member where the Life Expectancy
is no recalculated

Single life annuities with certain periods of 5, 10 or 15 years

Survivorship life annuities with installment refund and survivor percentages of
66 2/3% or 100%

(b)                                  The following
forms of payment were previously available under the Plan but will be
eliminated as of the date specified in subsection (4) below (check the
applicable (box(es) and complete (4)):

(1)                                 o            Installment Payments.

(2)                                 o            Annuities.

(A)                               o                                    The normal form
of payment under the Plan was a lump sum and all optional annuity forms of
payment not listed under Section 1.19(c)(2)(A)(i) are eliminated.  The eliminated forms of payment include the
following:

 

(B)                               o                                    The normal form
of payment under the Plan was a life annuity and all annuity forms of payment
not listed under Section 1.19(c)(2)(B) are eliminated.  (Complete (i) and (ii) and, if applicable, (iii).)

(i)                                    The normal form
of payment for married Participants was a qualified joint and ___% (at least 50%) survivor annuity.  The normal form for unmarried Participants
was a single life annuity, unless a different form is specified below:

                _______________________________________

 

34

 

(ii)                                The qualified
preretirement survivor annuity provided to a Participant’s spouse was purchase
with _% (at least 50%) of the
Participant’s Account.

(iii)                            The other
annuity form(s) of payment previously available under the Plan included the
following:

 

(3)                                 o                                    Other Non-Annuity Forms of Payment.  All other non-annuity forms of payment that
are not listed in Section 1.19(d) but that were previously available under the
Plan are eliminated.  The eliminated
non-annuity forms of payment include the following:

________________________________________________

(4)                                 The form(s) of
payment described in this Subsection (b) will not be offered to Participants
who have an Annuity Starting Date which occurs on or after ________ (cannot be earlier than September 6, 2000).  Notwithstanding the date entered above, the
forms of payment described in this Subsection (b) will continue to be offered
to Participants who have an Annuity Starting Date that occurs (1) within 90
days following the date the Employer provides affected Participants with a
summary that satisfies the requirements of 29 CFR 2520.104b-3 and that notifies
them of the elimination of the applicable form(s) of payment, but (2) no later
than the first day of the second Plan Year following the Plan Year in which the
amendment eliminating the applicable form(s) of payment is adopted.

 

35

ADDENDUM

Re:  415 CORRECTION

for

Plan Name:  Vonage
401(k) Retirement Plan

(a)                                  Other Formula for Limiting Annual Additions to Meet 415 -If the
Employer, or any employer required to be aggregated with the Employer under
Code Section 415, maintain any other qualified defined contribution plans or
any “welfare benefit fund”, “individual medical account”, or “simplified
medical account”, annual additions to such plans shall be limited as follows to
meet the requirements of Code Section 415:

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

36

ADDENDUM

Re:  416 CONTRIBUTION

for

Plan Name:  Vonage
401(k) Retirement Plan

(a)                                  Other Method of Satisfying the Requirements of 416 - If the
Employer, or any employer required to be aggregated with the Employer under
Code Section 416, maintains any other qualified defined contribution or defined
benefit plans, the minimum benefit requirements of Code Section 416 shall be
satisfied as follows:

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

 

37

THE CORPORATEPLAN FOR RETIREMENTSM 100 (PROFIT SHARING/401(K)
PLAN)

ADDENDUM TO ADOPTION
AGREEMENT

FIDELITY BASIC PLAN DOCUMENT
No. 10

RE:  ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION
ACT OF 2001 (“EGTRRA”) AMENDMENTS for

Plan Name:  Vonage
401(k) Retirement Plan

PREAMBLE

Adoption and Effective Date of
Amendment.  This amendment of the Plan is adopted to
reflect certain provisions of the Economic Growth and Tax Relief Reconciliation
Act of 2001 (“EGTRRA”).  This amendment
is intended as good faith compliance with the requirements of EGTRRA and is to
be construed in accordance with EGTRRA and guidance issued thereunder.  Except as otherwise provided below, this
amendment shall be effective as of the first day of the first plan year
beginning after December 31, 2001.

Supersession of Inconsistent
Provisions.  This amendment shall supersede the provisions
of the Plan to the extent those provisions are inconsistent with the provisions
of this amendment.

(a)                                  Catch-up Contributions. 
The Employer must select either (1) or (2) below to indicate whether
eligible Participants age 50 or older by the end of a calendar year will be
permitted to make catch-up contributions to the Plan, as described in Section
5.03(b)(1):

(1)                                  þ            Catch-up
contributions shall apply effective January 1, 2002, unless a later effective
date is specified herein,

(2)                                  o            Catch-up
contributions shall not apply.

Note: 
The Employer must not select
(a)(1) above unless all plans of all employers treated, with the Employer, as a
single employer under subsections (b), (c), (m), or (o) of Code Section 414
also permit catch up contributions (except a plan maintained by the Employer
that is qualified under Puerto Rico law), as provided in Code Section 414(v)(4)
and IRS guidance issued thereunder.  The
effective date applicable to catch-up contributions must likewise be consistent
among all plans described immediately above, to the extent required in Code
Section 414(v)(4) and IRS guidance issued thereunder.

(b)                                  Plan Limit on Elective
Deferral for Plans Permitting Catch-up Contributions. 
This Section (b) is inapplicable if the Plan converted to this Fidelity
document from any other document effective after April 1, 2002.

For Plans that permit catch-up
contributions beginning on or before April 1, 2002, pursuant to (a)(1) above,
the 60% Plan Limit described in Section 5.03(b)(2) shall apply 

 

38

beginning April 1, 2002,
unless (b)(1) or (b)(2) is selected below. 
For Plans that permit catch up contributions beginning after April 1,
2002, pursuant to (a)(1) above, the Plan Limit set out in Section 1.07(a)(1)
shall continue to apply unless and until the Employer’s election in (b)(2)
below, if any, provides for a change in the Plan Limit.

(1)           o            The Plan Limit set out in Section
1.07(a)(1) shall continue to apply on and
                                after
April 1, 2002.

(2)           o            The Plan Limit set out in Section
l.07(a)(1) shall continue to apply until
                                _____________
(cannot be before April 1, 2002), and the Plan Limit after
                                that date
shall be ______% of Compensation each payroll period.

(c)                                  Matching Employer
Contributions on Catch-up Contributions.  The Employer
must select the box below only if the Employer selected (a)(1) above, and the
Employer wants to provide Matching Employer Contributions on catch-up
contributions.  In that event, the same
rules that apply to Matching Employer Contributions on Deferral Contributions
other than catch-up contributions will apply to Matching Employer Contributions
on catch-up contributions.

o                                    Notwithstanding anything in 2.01(l) to
the contrary, Matching Employer Contributions under Section 1.10 shall apply to
catch-up contributions described in Section 5.03(b)(1).

(d)                                  Rollovers of After-Tax
Employee Contributions to the Plan.  The Employer
must mark the box below only if the Employer does not want the Plan to
accept Participant Rollover Contributions of qualified plan after-tax employee
contributions, as described in Section 5.06, which would otherwise be effective
for distributions after December 31, 2001:

o                                    Participant Rollover Contributions or
direct rollovers of qualified plan after-tax employee contributions shall not
be accepted by the Plan at any time.

(e)                                  Application of the Same
Desk Rule.  The Employer must mark the box below only if
the Employer wants to discontinue the application of the same desk rule set
forth in Section 12.01(a).

þ                                    Effective for distributions from the Plan
after December 31, 2001, or such later date as specified herein ________, a
Participant’s elective deferrals, qualified nonelective contributions and
qualified matching contributions, if applicable, and earnings attributable to
such amounts shall be distributable, upon a severance from employment as
described in Section 12.01(b), effective only for severances occurring after   ______________ (or, if no date is entered,
regardless of when the severance occurred).

 

39

Amendment Execution

(Fidelity’s Copy)

IN WITNESS WHEREOF, the Employer has caused this
Amendment to be executed this _____ day of __________________, ____.

	
  Employer:

  	
  _________________________

  	
   

  	
  Employer:

  	
  __________________________

  
	
  By:

  	
  _________________________

  	
   

  	
  By:

  	
  __________________________

  
	
  Title:

  	
  _________________________

  	
   

  	
  Title:

  	
  __________________________

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accepted by:  Fidelity
  Management Trust Company, as Trustee

  	
   

  
	
  By:

  	
  _________________________

  	
   

  	
  Date:

  	
  __________________________

  
	
  Title:

  	
  _________________________

  	
   

  	
   

  	
   

  

 

 

40

Amendment Execution

(Employer’s Copy)

IN WITNESS WHEREOF, the Employer has caused this
Amendment to be executed this 18th day of November, 2004.

	
  Employer:

  	
  VONAGE

  	
   

  	
  Employer:

  	
  __________________________

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ John
  Rego                                     

  	
   

  	
  By:

  	
  __________________________

  
	
  Title:

  	
  CFO

  	
   

  	
  Title:

  	
  __________________________

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accepted by: 
  Fidelity Management Trust Company, as Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:   s/ Delphia D. Lawrence                              

  	
   

  	
  Date:

  	
  11/22/04

  	
   

  
	
   

  	
       Delphia
  D. Lawrence

  	
   

  	
   

  	
   

  
	
  Title:     Authorized
  Signatory            

  	
   

  	
   

  	
   

  
							

 

 

41

Amendment Execution

(Employer’s Copy)

IN WITNESS WHEREOF, the Employer has caused this
Amendment to be executed this _____ day of __________________, ____.

 

	
  Employer:

  	
  _________________________

  	
   

  	
  Employer:

  	
  __________________________

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  _________________________

  	
   

  	
  By:

  	
  __________________________

  
	
  Title:

  	
  _________________________

  	
   

  	
  Title:

  	
  __________________________

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accepted by: 
  Fidelity Management Trust Company, as Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  _________________________

  	
   

  	
  Date:

  	
  __________________________

  
	
  Title:

  	
  _________________________

  	
   

  	
   

  	
   

  

 

 

42

 

AMENDMENT EXECUTION PAGE

This page is to be
completed in the event the Employer modifies any prior election(s) or makes a
new election(s) in this Adoption Agreement. 
Attach the amended page(s) of the Adoption Agreement to this execution
page.

The following section(s)
of the Plan are hereby amended effective as of the date(s) set forth below:

	
  Section Amended

  	
   

  	
  Page

  	
   

  	
  Effective Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.07

  	
   

  	
   

  	
   

  	
  01/01/2006

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

IN WITNESS WHEREOF, the
Employer has caused this Amendment to be executed this 14th day of
November, 2005.

 

	
  Employer:

  	
  Vonage Holdings Corp

  	
   

  	
  Employer:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ Michael Porta

  	
   

  	
  By:

  	
   

  
	
  Title:

  	
  Director of Human Resources

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accepted by:

  	
   

  
	
   

  	
   

  
	
  Fidelity Management Trust Company, as Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  Trinidad Salinas

  	
   

  	
  Date:

  	
  12/5/05

  
	
   

  	
  Trinidad Salinas

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Authorized Signatory

  	
   

  	
   

  	
   

  

 

 

 

43

 

1.07        DEFERRAL
CONTRIBUTIONS

(a)  þ                                                                Deferral Contributions - Participants may elect to
have a portion of their Compensation contributed to the Plan on a before-tax
basis pursuant to Code Section 401(k).

(1)                                 Regular Contributions - The Employer shall make a
Deferral Contribution in accordance with Section 5.03 on behalf of each
Participant who has an executed salary reduction agreement in effect with the
Employer for the payroll period in question, not to exceed 75% of
Compensation for that period.

Note: 
For Limitation Years beginning prior to 2002, the percentage elected
above must be less than 25% in order to satisfy the limitation on annual
additions under Code Section 415 if other types of contributions are provided
under the Plan.

(A)                               o                                    Instead of
specifying a percentage of Compensation, a Participant’s salary reduction
agreement may specify a dollar amount to be contributed each payroll period,
provided such dollar amount does not exceed the maximum percentage of
Compensation specified in Subsection 1.07(a)(1) above.

(B)                               A Participant
may increase or decrease, on a prospective basis, his salary reduction
agreement percentage as of the next Entry Date.

Note:  Notwithstanding the provisions of Subsection
1.07(a)(1)(B), if Option 1.10(a)(3), Safe Harbor Matching Employer
Contributions, or 1.11(a)(3), Safe Harbor Formula, with respect to Nonelective
Employer Contributions is checked, the Plan provides that an Active Participant
may change his salary reduction agreement percentage for the Plan Year within a
reasonable period (not fewer than 30 days) of receiving the notice described in
Section 6.10.

(C)                               A Participant
may revoke, on a prospective basis, a salary reduction agreement at any time
upon proper notice to the Administrator but in such case may not file a new
salary reduction agreement until any subsequent Entry Date.

(2)                                 o                                    Additional Deferral Contributions - The Employer may allow
Participants upon proper notice and approval to enter into a special salary
reduction agreement to make additional Deferral Contributions in an amount up
to 100% of their Compensation for the payroll period(s) in the final month of
the Plan Year.

 

44

 

(3)                                 o                                    Bonus Contributions - The Employer may allow Participants upon
proper notice and approval to enter into a special salary reduction agreement
to make Deferral Contributions in an amount up to 100% of any Employer paid
cash bonuses designated by the Employer on a uniform and non-discriminatory
basis that are made for such Participants during the Plan Year.  The Compensation definition elected by the
Employer in Subsection 1.05(a) must include bonuses if bonus contributions are
permitted.

Note:  A
Participant’s contributions under Subsection 1.07(a)(2) and/or (3) may not cause
the Participant to exceed the percentage limit specified by the Employer in
Subsection 1.07(a)(1) for the full Plan Year. 
If the Administrator anticipates that the Plan will not satisfy the “ADP”
and/or “ACP” test for the year, the Administrator may reduce the rate of
Deferral Contributions of Participants who are Highly Compensated Employees to
an amount objectively determined by the Administrator to be necessary to
satisfy the “ADP” and/or “ACP” test.

 

45

AMENDMENT EXECUTION PAGE

This page is to be
completed in the event the Employer modifies any prior election(s) or makes a
new election(s) in this Adoption Agreement. 
Attach the amended page(s) of the Adoption Agreement to this execution
page.

The following section(s)
of the Plan are hereby amended effective as of the date(s) set forth below:

	
  Section Amended

  	
   

  	
  Page

  	
   

  	
  Effective Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.19(c)

  	
   

  	
   

  	
   

  	
  10/28/2005

  
	
  1.19(d)

  	
   

  	
   

  	
   

  	
  10/28/2005

  
	
  Addendum re: Forms of Payment, (a)

  	
   

  	
   

  	
   

  	
  10/28/2005

  
	
   

  	
   

  	
   

  	
   

  	
   

  

IN WITNESS WHEREOF, the
Employer has caused this Amendment to be executed this 26th day of October,
2005.

 

	
  Employer:

  	
  Vonage Holdings Corp

  	
   

  	
  Employer:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ Michael Porta                                

  	
   

  	
  By:

  	
   

  
	
  Title:

  	
  Director of Human Resources

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accepted by:

  	
   

  
	
   

  	
   

  
	
  Fidelity Management Trust Company, as Trustee

  	
   

  
	
  By:

  	
   

  	
   

  	
  Date:

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  

 

 

46

 

1.19        FORM
OF DISTRIBUTIONS

* 
*  *  *  *

(c)                                  o            Annuities (Check if the Plan is retaining any annuity
form(s) of payment.)

(1)                                 An annuity form
of payment is available under the Plan for the following reason(s) (check (A)
and/or (B), as applicable):

(A)                               o                                    As a result of
the Plan’s receipt of a transfer of assets from another defined contribution
plan or pursuant to the Plan terms prior to the Amendment Effective Date
specified in Section 1.01(g)(2), benefits were previously payable in the form
of an annuity that the Employer elects to continue to be offered as a form of
payment under the Plan.

(B)                               o                                    The Plan
received a transfer of assets from a defined benefit plan or another defined
contribution plan that was subject to the minimum funding requirements of Code
Section 412 and therefore an annuity form of payment is a protected benefit
under the Plan in accordance with Code Section 411(d)(6).

(2)                                 The normal form
of payment under the Plan is (check (A) or (B)):

(A)                               o            A lump sum payment.

(i)                                    Optional
annuity forms of payment (check (I) and/or (II), as applicable).  (Must
check and complete (I) if a life annuity is one of the optional annuity forms
of payment under the Plan.)

(I)                                    o                                    A married Participant who elects an
annuity form of payment shall receive a qualified joint and ___% (at least 50%) survivor annuity.  An unmarried Participant shall receive a
single life annuity, unless a different form of payment is specified below:

(II)                                o                                    Other annuity form(s) of payment.  Please complete Subsection (a) of the Forms
of Payment Addendum describing the other annuity form(s) of payment available
under the Plan.

 

47

 

(B)                               o            A life annuity (complete (i) and
(ii) and check (iii) if applicable).

(i)                                    The normal form
for married Participants is a qualified joint and ____% (at least 50%) survivor annuity.  The normal form for unmarried Participants is
a single life annuity, unless a different annuity form is specified below:

 

(ii)                                The qualified
preretirement survivor annuity provided to a Participant’s spouse is purchased
with ____% (at least 50%) of the
Participant’s Account.

(iii)  o                   Other annuity form(s) of
payment.  Please complete Subsection (a)
of the Forms of Payment Addendum describing the other annuity form(s) of
payment available under the Plan.

(d)                                                                                  o                                    Other Non-Annuity Form(s) of Payment - As a result of the Plan’s
receipt of a transfer of assets from another plan or pursuant to the Plan terms
prior to the Amendment Effective Date specified in 1.01(g)(2), benefits were
previously payable in the following form(s) of payment not described in (a),
(b) or (c) above and the Plan will continue to offer these form(s) of payment:

	
   

  
	
   

  
	
   

  

 

48

*  *  * 
*  *

ADDENDUM

Re:  FORMS OF PAYMENT

for

Plan Name:           VONAGE

(a)           The following optional forms of annuity will continue
to be offered under the Plan:

	
   

  
	
   

  
	
   

  

 

*  *  * 
*  *Exhibit
10.6

LEASE

Lessor

23 MAIN STREET
HOLMDEL ASSOCIATES LLC

to:

VONAGE USA INC.

Lessee

Building:

23 Main Street

Holmdel, New Jersey

 

 

TABLE OF
CONTENTS

	
   

  	
   

  	
  Page

  
	
  1.

  	
  DESCRIPTION:

  	
  5

  
	
  2.

  	
  TERM:

  	
  5

  
	
  3.

  	
  FIXED BASIC
  RENT:

  	
  5

  
	
  4.

  	
  USE AND
  OCCUPANCY:

  	
  5

  
	
  5.

  	
  CARE AND REPAIR
  OF PREMISES/ENVIRONMENTAL COMPLIANCE:

  	
  6

  
	
  6.

  	
  ALTERATIONS,
  ADDITIONS OR IMPROVEMENTS:

  	
  10

  
	
  7.

  	
  ACTIVITIES
  INCREASING FIRE INSURANCE RATES:

  	
  11

  
	
  8.

  	
  ASSIGNMENT AND
  SUBLEASE:

  	
  11

  
	
  9.

  	
  COMPLIANCE WITH
  RULES AND REGULATIONS:

  	
  16

  
	
  10.

  	
  DAMAGES TO
  BUILDING:

  	
  16

  
	
  11.

  	
  EMINENT DOMAIN:

  	
  19

  
	
  12.

  	
  INSOLVENCY OF
  LESSEE:

  	
  20

  
	
  13.

  	
  LESSOR’S
  REMEDIES ON DEFAULT:

  	
  20

  
	
  15.

  	
  SUBORDINATION OF
  LEASE:

  	
  25

  
	
  16.

  	
  SECURITY
  DEPOSIT:

  	
  25

  
	
  17.

  	
  RIGHT TO CURE
  LESSEE’S/LESSOR’S BREACH:

  	
  26

  
	
  18.

  	
  MECHANIC’S
  LIENS:

  	
  28

  
	
  19.

  	
  RIGHT TO INSPECT
  AND REPAIR:

  	
  28

  
	
  20.

  	
  SERVICES TO BE
  PROVIDED BY LESSOR/LESSOR’S EXCULPATION:

  	
  28

  
	
  21.

  	
  INTERRUPTION Of
  SERVICES OR USE:

  	
  31

  
	
  22.

  	
  ELECTRICITY/GAS:

  	
  31

  
	
  23.

  	
  ADDITIONAL RENT:

  	
  32

  
	
  24.

  	
  ESTOPPEL:

  	
  41

  
	
  25.

  	
  HOLDOVER
  TENANCY:

  	
  41

  
	
  26.

  	
  RIGHT TO SHOW
  PREMISES:

  	
  41

  
	
  27.

  	
  LESSOR’S WORK -
  LESSEE’S DRAWINGS:

  	
  42

  
	
  28.

  	
  WAIVER OF TRIAL
  BY JURY:

  	
  42

  
	
  29.

  	
  LATE CHARGE:

  	
  42

  
	
  30.

  	
  LESSEE’S
  INSURANCE:

  	
  42

  
	
  31.

  	
  NO OTHER
  REPRESENTATIONS:

  	
  45

  

 

 

i

 

	
  32.

  	
  QUIET ENJOYMENT:

  	
  45

  
	
  33.

  	
  INDEMNITY:

  	
  45

  
	
  34.

  	
  ARTICLE HEADINGS:

  	
  45

  
	
  35.

  	
  APPLICABILITY TO
  HEIRS AND ASSIGNS:

  	
  46

  
	
  36.

  	
  PARKING:

  	
  46

  
	
  37.

  	
  LESSOR’S
  LIABILITY FOR LOSS OF PROPERTY:

  	
  46

  
	
  38.

  	
  PARTIAL
  INVALIDITY:

  	
  46

  
	
  39.

  	
  LESSEE’S BROKER:

  	
  46

  
	
  40.

  	
  PERSONAL
  LIABILITY:

  	
  47

  
	
  41.

  	
  NO OPTION:

  	
  47

  
	
  42.

  	
  DEFINITIONS:

  	
  47

  
	
  43.

  	
  LEASE COMMENCEMENT:

  	
  48

  
	
  44.

  	
  NOTICES:

  	
  48

  
	
  45.

  	
  ACCORD AND
  SATISFACTION:

  	
  49

  
	
  46.

  	
  EFFECT OF
  WAIVERS:

  	
  49

  
	
  47.

  	
  LEASE CONDITION:

  	
  49

  
	
  48.

  	
  MORTGAGEE’S
  NOTICE AND OPPORTUNITY TO CURE:

  	
  49

  
	
  49.

  	
  LESSOR’S
  RESERVED RIGHT: [INTENTIONALLY OMITTED]

  	
  50

  
	
  50.

  	
  CORPORATE
  AUTHORITY:

  	
  50

  
	
  51.

  	
  LESSEE’S
  EXPANSION/RELOCATION:

  	
  50

  
	
  52.

  	
  MISCELLANEOUS:

  	
  50

  
	
  53.

  	
  PURCHASE
  CONTINGENCY:

  	
  52

  
	
  54.

  	
  RENEWAL OPTION:

  	
  52

  
	
  55.

  	
  SIGNAGE:

  	
  55

  
	
  56.

  	
  GENERATOR:

  	
  55

  

 

ii

 

LEASE, is made the
24th day of March, 2005 between 23 MAIN STREET HOLMDEL ASSOCIATES
LLC (“Lessor”) whose address is c/o Mack-Cali Realty Corporation,
11 Commerce Drive, Cranford, New Jersey 07016 and VONAGE USA INC. whose
address is 2147 Route 27, Edison, New Jersey 08817.

PREAMBLE

BASIC
LEASE PROVISIONS AND DEFINITIONS

In addition to other terms elsewhere defined in this
Lease, the following terms whenever used in this Lease shall have only the
meanings set forth in this section, unless such meanings are expressly
modified, limited or expanded elsewhere herein.

1.                                       ADDITIONAL RENT shall mean all sums
payable by Lessee hereunder in addition to Fixed Basic Rent payable by Lessee
to Lessor pursuant to the provisions of the Lease.

2.                                       BUILDING shall mean 23 Main Street,
Holmdel, New Jersey.

3.                                       COMMENCEMENT DATE is the day after
the day that Lessor shall close on the purchase of the Premises.  The ADDITIONAL PREMISES
COMMENCEMENT DATE shall be the later of (i) the date Lessor
makes the Additional Premises available to Lessee and (ii) one (1) year
anniversary of the Commencement Date.

4.                                       DEMISED PREMISES OR PREMISES shall
be deemed to be 350,000 gross rentable square feet constituting the entire
Building, and deemed to be consisting of 262,500 gross rentable square feet of
the Building (“Initial Premises”) and 87,500 gross rentable square feet of the
Building (“Additional Premises”) shown on Exhibit A attached hereto and made a
party hereof, together with the Property (as defined herein).  The Demised Premises shall not be deemed to
include the Additional Premises until the Additional Premises Commencement
Date.  Prior to the Additional Premises
Commencement Date, Lessee shall permit the occupants of the Additional Premises
to utilize four (4) parking spaces for each 1,000 gross rentable square foot of
the Additional Premises in the Building without charge.  Thereafter, the Demised Premises shall
include all parking areas and spaces at the Property.

5.                                       EXHIBITS shall be the following,
attached to this Lease and incorporated herein and made a part hereof.

	
   

  	
  Rent Rider

  	
   

  	
   

  
	
   

  	
  Exhibit A

  	
   

  	
  Location of
  Premises

  
	
   

  	
  Exhibit A-1

  	
   

  	
  Property

  
	
   

  	
  Exhibit B

  	
   

  	
  Rules and
  Regulations

  
	
   

  	
  Exhibit C

  	
   

  	
  Lessee’s Work

  
	
   

  	
  Exhibit D

  	
   

  	
  Permitted
  Encumbrances

  
	
   

  	
  Exhibit E

  	
   

  	
  Commencement
  Date Agreement

  
	
   

  	
  Exhibit F

  	
   

  	
  Letter of Credit
  Form

  

 

 

1

 

6.                                       EXPIRATION DATE shall be midnight
on the day before the twelfth (12th) anniversary of the Rent
Commencement Date plus the number of days, if any, to have the lease expire on
the end of a calendar month, unless extended or modified pursuant to any option
contained herein.

7.                                       FIXED BASIC RENT shall be
calculated in accordance with the Rent Rider attached hereto and made a part
hereof and shall include Lessor’s good faith estimated budget of anticipated
hard and soft costs associated with the purchase and lease of the Building and
Property.  Notwithstanding the estimated
budget set forth on the Rent Rider, the Fixed Basic Rent will be calculated
using Lessor’s actual costs for the categories set forth on the budget.  Lessee shall have no obligation to pay Fixed
Basic Rent and Additional Rent pursuant to Article 23 hereof applicable to the
Initial Premises until the fifth (5th) month anniversary of the
Commencement Date (the “Rent Commencement Date”) as more fully set forth on the
Rent Rider.  Lessee shall have no
obligation to pay Fixed Basic Rent and Additional Rent pursuant to Article 23
hereof applicable to the Additional Premises until the fifth (5th)
month anniversary of the Additional Premises Commencement Date (the “Additional
Premises Rent Commencement Date”) as more fully set forth on the Rent
Rider.  Upon final determination of the
Fixed Basic Rent, Lessor shall deliver to Lessee a statement of Lessor’s
calculation of the Fixed Basic Rent certified by Lessor as true and correct.  Lessee shall be responsible for the payment
of all utilities applicable to the Premises on the Commencement Date with
respect to both the Initial Premises and Additional Premises.

8.                                       LESSEE’S BROKER shall mean Grubb
& Ellis Company.

9.                                       LESSEE’S PERCENTAGE shall be 75%
for the period commencing on the Commencement Date through and including the
day prior to the Additional Premises Commencement Date and 100% for the period
commencing on the Additional Premises Commencement Date through and including
the Expiration Date.

10.                                 PARKING SPACES shall mean a total
of four (4) unassigned spaces for each 1,000 gross rentable square feet of the
Premises.

11.                                 PERMITTED USE shall be general
office use and such ancillary uses as are incidental thereto, including, but not
limited to, data center, cafeteria, child day care, fitness center, product
assembly and packaging (“Permitted Uses”) and such other uses consented to by
Lessor (which consent Lessor shall not unreasonably withhold, condition or
delay) and as may be permitted by applicable zoning laws, rules, regulations
and ordinances.  Subject to the Permitted
Uses, Lessor shall be permitted to restrict Lessee from using the Premises for
uses other than the Permitted Uses, if, in Lessor’s reasonable judgment, such
uses would impair (i) the value of the Premises, (ii) the physical integrity of
the Building or (iii) the reputation of the Building, Lessor or any affiliate
of Lessor.

12.                                 PROPERTY shall be as shown on
Exhibit A-1.

 

2

 

13.                                 SECURITY DEPOSIT shall be SEVEN
MILLION AND 00/100 DOLLARS ($7,000,000.00).

Lessee shall deliver to
Lessor an irrevocable negotiable letter of credit issued by and drawn upon such
commercial bank selected by Lessee and acceptable to Lessor (at its sole
discretion) (JP Morgan Chase Bank shall be deemed acceptable to Lessor) and in
form and content acceptable to Lessor (also at its sole discretion) (the form
attached hereto as Exhibit F shall be deemed acceptable to Lessor) for the
account of Lessor, in the sum of SEVEN MILLION AND 00/100 DOLLARS
($7,000,000.00).  Said letter of credit
shall be for a term of not less than one (1) year and shall be automatically
renewed by the bank (without notice from Lessor) (i.e. an “evergreen” letter of
credit), until Lessor shall be required to return the security to Lessee
pursuant to the terms of this Lease but in no event earlier than thirty (30)
days after the Expiration Date, and any renewed letter of credit shall be
delivered to Lessor no later than thirty (30) days prior to the expiration of
the letter of credit then held by Lessor. 
If any portion of the security deposit shall be utilized by Lessor in
the manner permitted by this Lease, Lessee shall, within ten (10) business days
after written request by Lessor, replenish the security account by depositing
with Lessor, in cash or by letter of credit, an amount equal to that utilized
by Lessor.  Failure of Lessee to comply
with the provisions of this Article in all material respects shall constitute a
material breach of this Lease and Lessor shall be entitled to present the
letter of credit then held by it for payment (without notice to Lessee).  If the cash security is converted into a
letter of credit, the provisions with respect to letters of credit shall apply
(with the necessary changes in points of detail) to such letter of credit
deposit.  In the event of a bank failure
or insolvency affecting the letter of credit, Lessee shall replace same within
twenty (20) days after being requested in writing to do so by Lessor.

Provided that this Lease
is in full force and effect, Lessee has complied with each of its obligations
under this Lease in all material respects and Lessee has not been in default
under this Lease beyond applicable notice and cure periods at any time during
the immediately preceding twelve (12) month period, then commencing on the
fifth (5th) year anniversary of the Rent Commencement Date and on
each annual anniversary of the Rent Commencement Date thereafter (each such
date being a “Reduction Date”), the security deposit shall be reduced by ONE
MILLION AND 00/100 DOLLARS ($1,000,000.00).

Provided that (i) this
Lease is in full force and effect, (ii) Lessee has complied with each of its
obligations under this Lease in all material respects, (iii) Lessee has a net
worth of at least FIVE HUNDRED MILLION AND 00/100 DOLLARS ($500,000,000.00) and
(iv) a credit rating of at least BBB with a positive outlook (or an equivalent
shadow rating), then Lessor shall return the entire Security Deposit required
hereunder promptly after the written request of Lessee and no Security Deposit
shall be required under this Lease.

Any monetary default by
Lessee under this Lease beyond applicable notice and grace periods shall be
deemed a failure by Lessee to comply with its obligations under this Lease in a
material respect.

 

3

 

14.                                 TENANT’S North American Industry
Classification (“NAICS”) Number is _____.

15.                                 TERM shall mean the period
commencing on the Commencement Date and ending on the Expiration Date, unless
extended pursuant to any option contained herein.

— END OP PREAMBLE —

 

4

 

W I T N E S S E T H

For and in consideration of the covenants herein
contained, and upon the terms and conditions herein set forth, Lessor and
Lessee agree as follows:

1.                                       DESCRIPTION:

Lessor hereby leases to
Lessee, and Lessee hereby hires from Lessor, the Premises as defined in the
Preamble as shown on the plan or plans, initialed by the parties hereto, marked
Exhibit A attached hereto and made part of this Lease in the Building as
defined in the Preamble (hereinafter called the “Building”), and that certain
parcel of land (hereinafter called “Property”) as described on Exhibit A-1
attached hereto and made part of this Lease, together, with the nonexclusive
right to use the Common Areas with Lessor and other lessees, subject however,
to the Permitted Encumbrances set forth in Exhibit D hereto.

2.                                       TERM:

The Premises are leased
for a term to commence on the Commencement Date, and to end at 12:00 midnight
on the Expiration Date, all as defined in the Preamble.

3.                                       FIXED
BASIC RENT:

The Lessee shall pay to
the Lessor during the Term commencing on the Rent Commencement Date or
Additional Premises Rent Commencement Date, as the case may be, the Fixed Basic
Rent as defined in the Preamble (hereinafter called “Fixed Basic Rent”) payable
in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts. The
Fixed Basic Rent shall accrue at the rate set forth in the Rent Rider attached
hereto and made a part hereof and shall be payable, in advance, on the first
day of each calendar month during the Term at the Monthly Installments as
defined in the Preamble, except that a proportionately lesser sum may be paid
for the first month of the Term of this Lease if the Term commences on a day
other than the first day of the month, in accordance with the provisions of
this Lease herein set forth.  Lessor
acknowledges receipt from Lessee of the first monthly installment by check,
subject to collection, for Fixed Basic Rent for the first month of the Lease
Term.  Lessee shall pay Fixed Basic Rent,
and any Additional Rent as hereinafter provided, to Lessor at Lessor’s above
stated address, or at such other place as Lessor may designate in writing,
without demand and without counterclaim, deduction or set off.

4.                                       USE
AND OCCUPANCY:

The Lessee shall use and
occupy the Premises for the Permitted Uses. 
Such Permitted Uses shall not permit or cause any effluent, pollution or
other condition that is by law, noxious or offensive.  Lessor represents and warrants that use of the
Premises for general office purposes is consistent with the Certificate of Use
and Occupancy to be issued by the local public authority.  It being a reasonable consideration of this
Lease, that the use of the Premises shall be limited, to those uses as
otherwise hereinbefore specified, and 

 

5

 

Lessee may not use the
Premises for manufacturing.  Lessee shall
not operate the Building in a manner that compromises the physical integrity of
the Building or the Building Systems beyond normal wear and tear or the uses
contemplated herein.  The Lessee shall
not use or occupy or permit the Premises to be used or occupied, nor do or
permit anything to be done in or on the Building Area, in a manner which will
in any way violate any certificate of occupancy affecting the Premises unless
Lessee shall, at its own cost and expense, obtain such amendments to the
existing certificate of occupancy or as required to permit such other use.

In addition to the
foregoing, Lessee shall have the exclusive right to utilize the helipad located
at the Property, provided that such use is in accordance with all laws and
requirements of governmental authorities. 
Lessee shall obtain, at its sole cost and expense, any governmental
permits and approvals required in connection with the use of the helipad.  Lessor shall cooperate with Lessee in Lessee’s
efforts to obtain such permits and approvals, provided that Lessor shall have
no obligation to expend any monies in connection therewith.  Lessor shall provide the maintenance of the
helipad at Lessee’s sole cost and expense so long as Lessee elects to continue
use of the helipad.

5.                                       CARE
AND REPAIR OF PREMISES/ENVIRONMENTAL COMPLIANCE:

(a)                                  Lessee
acknowledges and agrees that this is a net lease that is completely carefree to
Lessor, except as expressly set out in this Lease; that Lessor is not
responsible during the Term for any costs, charges, expenses, and outlays of
any nature whatsoever arising from or relating to the Premises, Building or
Property, or the use and occupancy thereof, or the contents thereof, or the business
carried on therein; and Lessee shall pay all costs, charges, expenses and
outlays of every nature and kind relating to the Premises except as expressly
set out in this Lease.  Lessee shall pay
Lessee’s Percentage of the Operating Costs relating to the Premises except as
expressly set out in this Lease.  Lessee
shall take good care of the Premises and shall not do or suffer any waste
thereon.  Subject to Paragraph 4 of the Preamble,
Lessee shall pay Lessor the cost of all repairs to the Premises, Building and
Property of every kind and nature, ordinary as well as extraordinary,
structural as well as non-structural, foreseen as well as unforeseen, whether
necessitated by legal requirements, wear, tear, obsolescence or defects, latent
or otherwise, necessary to keep the Property, Building and Premises in good
order and condition as a first-class property. 
Lessee shall keep all portions of the Premises, including without
limitation, the fixtures and equipment thereof and the bathrooms and the
lavatory facilities contained therein in good working order and in a clean and
orderly condition.  Lessor, at Lessee’s
sole cost and expense, shall also be required to repair and maintain the
Building’s utility and mechanical systems, including the plumbing, electrical
and heating, ventilation and air conditioning systems.  Lessee, at its sole cost and expense, shall
maintain and repair, if necessary, the data center located within the Premises.

Notwithstanding anything
contained herein to the contrary, Lessor shall make all repairs to the
structure of the Building (which for purposes hereof, shall mean the footings,
foundations, structural parts of the exterior walls (excluding windows

 

6

 

and glass) facade and
structural steel of the Building).  To
the extent that the costs of such structural repairs are capitalized in
accordance with generally accepted accounting principles, the cost shall be
borne by Lessor; otherwise, the costs of such repairs shall be included in Operating
Costs pursuant to Article 23 hereof.

To the extent that the
cost of any repairs by Lessor to the heating, ventilation and air conditioning
system are capitalized in accordance with generally accepted accounting
principles, such costs shall be amortized over the lesser of (1) ten (10) years
or (2) the useful life of the repair, and the cost shall be included in
Operating Costs in each Lease Year for such portion of the amortization period
which occurs during the Term.  The cost
of any repairs to the heating, ventilation and air conditioning system that are
not capitalized in accordance with generally accepted accounting principles
shall be included in Operating Costs for the year incurred.

Lessor shall make all
repairs to the roof of the Building.  The
cost of roof repairs shall be included in Operating Costs pursuant to Article
23 hereof; provided, however, that if such costs are capitalized in accordance
with generally accepted accounting principles, the following paragraph shall
apply.  Any roof replacement shall be
deemed a capital expenditure and shall be capitalized in accordance with
generally accepted accounting principles.

All costs (other than
structural repair costs (which are the sole responsibility of Lessor if such
costs are capitalized in accordance with generally accepted accounting
principles), HVAC repair costs and Lessee’s Legal Compliance Waste Water
Treatment Costs, as defined herein), including those required by laws and
requirements of any governmental or quasi-governmental authority (except as set
forth herein), that are capitalized in accordance with generally accepted
accounting principles shall be included in Operating Costs for the year
incurred; provided, however, if such capital expenditures for any one calendar
year exceeds $175,000.00, then (i) Lessee shall pay Lessor the initial
$175,000.00 of such capital expenditures in the year incurred and (ii) the
balance in subsequent year(s), provided that the sum of all costs for capital
repairs for which Lessee shall be responsible hereunder shall not exceed
$175,000.00 in any Lease Year. 
Notwithstanding the foregoing, Lessee’s share of the cost of capital
expenditures with respect to the roof only shall not exceed in the aggregate
$350,000.00.

Notwithstanding the
foregoing, if the waste water treatment system requires a modification,
alteration, repair or replacement to comply with any change in any law or
requirement of governmental or quasi-governmental authority, then the cost of
such modification, alteration, repair or replacement shall be shared by Lessor
and Lessee as follows:  Lessor shall bear
sixty-six and 67/100 percent (66.67%) of the cost and Lessee shall bear
thirty-three and 33/100 percent (33.33%) of the cost.  In any event, Lessee’s share of such cost
shall not exceed in the aggregate One Hundred Thousand and 00/100 Dollars
($100,000.00).  The costs of any
modifications, alterations, repairs or replacements to the waste water
treatment system, other than to comply with a change in any law or requirement

 

7

 

of governmental or
quasi-governmental authority shall be subject to the other provisions of this
Article 5 (i.e., if not capitalized in accordance with generally accepted
accounting principles, the cost would be included in Operating Costs in the
year incurred and if capitalized in accordance with generally accepted
accounting principles, it would be governed by the immediately preceding
paragraph).

Notwithstanding the
foregoing, Lessee shall have no obligation to pay any capital costs arising
during the last year of the Term; provided, however, that any capital costs
incurred by Lessor during the Term (i) to comply with any law or requirement of
any governmental or quasi-governmental authority necessitated by Lessee’s use
(other than ordinary office use) or particular manner of use or (ii) by reason
of Lessee’s use of the Premises (other than the Permitted Uses) or Lessee’s
particular manner of use of the Premises or (iii) resulting from Lessee’s
negligence or willful misconduct shall be entirely borne by Lessee in the year
incurred without any amortization and without being subject to any cap or
included in any capital expenditures subject to a cap.  The term “repairs” shall include
replacements, restorations, and/or renewals when necessary.  All repairs made by Lessor shall be
substantially equal in quality and workmanship to the original work.  Except as specifically set forth herein, in
no event shall Lessor have any obligation to make any repairs, replacements or
alterations to the Property, Building or Premises at Lessor’s expense, it being
the intention of the parties hereto that Lessee assume the actual and
reasonable cost of all of the repair and maintenance obligations therein.

All payments by Lessee
under this Section 5(a) shall be made within thirty (30) days after Lessee’s
receipt of an invoice therefor.  Any
capital expenditures that are payable by Lessee hereunder over a period of more
than one (1) year shall include interest at the annual rate of two (2) percentage
points above the prime rate at the time of expenditure of JP Morgan Chase Bank
(or its successor) but in no event to exceed ten percent (10%) per annum (“Interest
Rate”).  This interest factor shall be in
addition to any annual or lifetime cap on capital expenditure payments for
which Lessee is responsible hereunder.

ENVIRONMENTAL

(b)                                 Compliance with Environmental Laws.  Lessee shall, at Lessee’s own expense,
promptly comply with each and every federal, state, county and municipal
environmental law, ordinance, rule, regulation, order, directive and
requirement, now or hereafter existing (“Environmental Laws”), applicable to
Lessee or Lessee’s operations at the Premises. 
In no event shall Lessee have any obligation to remediate any
environmental condition other than that which directly relates to Lessee’s acts
or omissions during the Term of this Lease. 
In addition, Lessee shall not be responsible for any environmental
conditions unless resulting from the acts or omissions of Lessee or its agents.  Lessee shall not release, discharge or
dispose of, or permit, or suffer any release, discharge or disposal of any
Hazardous Material at the Premises in violation of any Environmental Law.  

 

8

 

Lessee shall not permit or suffer the manufacture, generation, storage,
transmission or presence of any Hazardous Material over or upon the Premises in
violation of any Environmental Law.  “Hazardous
Material” shall mean (i) Any hazardous, toxic or dangerous waste, substance or
material defined as such in (or for the purpose of) CERCLA, SARA, RCRA, or any
other Environmental Law as now or at any time hereafter in effect; (ii) any
other waste, substance or material that exhibits any of the characteristics
enumerated in 40 C.F.R. §§ 261.20 through 261.24, inclusive, and those
extremely hazardous substances listed under Section 902 of SARA that are
present in threshold planning or reportable quantities as defined under SARA
and toxic or hazardous chemical substances that are present in quantities that
exceed exposure standards as those terms are defined under Section 6 and 8 of
OSHA and 29 C.F.R. Part 1910; (iii) any asbestos or asbestos containing
substances whether or not the same are defined as hazardous, toxic, dangerous
waste, a dangerous substance or dangerous material in any Environmental Law;
(iv) “Red Label” flammable materials; (v) all laboratory waste and by-products;
and (vi) all biohazardous materials.”

Lessee shall:  (i) promptly, upon learning thereof, notify
Lessor of any violation of, or non-compliance with, potential violation of or
non-compliance with, or liability or potential liability under, any
Environmental Law concerning the Premises, (ii) promptly make (and deliver to
Lessor copies of) all reports or notices that Lessee is required to make under
any Environmental Law concerning the Premises and maintain in current status
all permits and licenses required under any Environmental Law concerning the
Premises, (iii) immediately comply with any orders, actions or demands of any
Governmental Authority (as herein defined) with respect to the discharge,
clean-up or removal of Hazardous Materials at or from the Demised Premises due
to a breach of a covenant set forth in Section 5(b) above, (iv) pay when due
the cost of removal of, treatment of, or the taking of remedial action with
respect to, any Hazardous Material on the Premises which is required by an
Environmental Law due to a breach of a covenant set forth in Section 5(b), (v)
keep the Premises free of any lien imposed pursuant to any Environmental Law in
respect of a breach of a covenant set forth in Section 5(b), (vi) from time to
time, upon the request of Lessor, execute such affidavits, certificates and
statements concerning Lessee’s knowledge and belief concerning the presence of
Hazardous Materials on the Premises and (vii) otherwise comply with all
Environmental Laws concerning the Premises. 
In no event shall any of Lessee’s remedial action relating to
subsections (iii), (iv) or (v) above, involve engineering or institutional
controls, a groundwater classification exception area or well restriction area
and Lessee’s remedial action shall meet the standard remediation standards for
soil, surface water, groundwater and drinking water for commercial office establishments.  Promptly upon completion of all required
investigatory and remedial activities, Lessee shall, at Lessee’s own expense,
to Lessor’s satisfaction, restore the affected areas of the Premises, the
Building or the Property, as the case may be, from any damage or condition
caused by the investigatory or remedial work.

 

9

 

(c)                                  Lessor Audit.  Lessee shall permit Lessor and its
representatives access to the Premises, from time to time, to conduct an environmental
assessment, investigation and sampling. 
The cost of such assessment, investigation or sampling shall be borne by
Lessor, unless such assessment indicates the existence of environmental
contamination in violation of Environmental Laws and such contamination is the
result of Lessee or, Lessee’s, agents, employees, contractors, assignees,
subtenants, licensees and invitees acts or omissions, in which event, Lessee
shall bear the cost of such environmental investigation.

6.                                       ALTERATIONS,
ADDITIONS OR IMPROVEMENTS:

(a)                                  Lessee
shall have no right to make any structural alteration, change, additions or
improvement (a “Structural Alteration”), to the Premises or any appurtenances
thereto without the prior written consent of Lessor in each instance, which consent
shall not be unreasonably withheld or delayed (and if no response is given by
Lessor within ten (10) business days after Lessor’s receipt of Lessee’s
request, together with all applicable documentation, e.g., plans and
specifications, same shall be deemed given). 
Lessee shall, however, be permitted to make any non-structural
changes to the Premises without the consent of Lessor, provided that (i) Lessee
shall have given Lessor prior written notice of such change in the event of a
change costing $50,000.00 per annum or more; (ii) the change and the work
necessary to complete the change will not adversely affect operation of the
Building Systems or the exterior or structure of the Building; and (iii) Lessee
has satisfied all other applicable terms, covenants and conditions set forth in
Lessee’s Alterations in EXHIBIT “C” hereto. 
If the conditions set forth in clauses (i), (ii) and (iii) are not
satisfied, then Lessor’s consent shall be required, which consent shall not be
unreasonably withheld or delayed.  “Building
Systems” shall be deemed to include the Building structure, and any life safety
system (sprinkler, alarm), plumbing system associated with water and sewer
mains and those servicing the common areas, electrical systems associated with
the main Building supply and those servicing the common areas or the other
Building System components, heating, ventilation and air conditioning systems
or its components, excluding supplemental HVAC units installed by Lessee.  Lessee may install interior stairs within the
Premises, provided that Lessee otherwise complies with the provisions of this
Article 6.  At the end of the Term,
Lessor, at its option, may require Lessee to remove the stairs and repair any
damage caused by the installation or removal of such stairs.

If Lessor shall grant its
consent to the making of a Structural Alteration, then the same shall (i) be
performed at the sole cost and expense of Lessee, (ii) be performed in a good
and workmanlike manner, and in compliance with all applicable legal requirements
(including existing zoning requirements), insurance requirements and
Environmental Laws, (iii) be consistent with the Permitted Use, (iv) not in any
way render the Premises other than a complete, self containing operating unit,
(v) be performed in accordance with plans and specifications approved prior to
the commencement of any work by the appropriate Governmental Authorities and by
Lessor, which consent shall not be

 

10

 

unreasonably withheld or
delayed (and if no response is given by Lessor within ten (10) business days
after Lessor’s receipt of Lessee’s request, together with all applicable
documentation, e.g., plans and specifications, same shall be deemed given), and
(vi) be performed under the supervision of a licensed architect approved by
Lessor and in accordance with Exhibit C, as may be amended from time to time.

(b)                                 (1)                                  Any
and all Structural Alterations made in accordance with the foregoing paragraph
shall immediately become the property of Lessor.

(2)                                  Any and all
contractors to be involved in performing work shall be selected by Lessee and
approved by Lessor, which approval shall not be unreasonably withheld or
delayed (and if no response is given by Lessor within ten (10) days, same shall
be deemed given).

(3)                                  In the event of any
Structural Alteration as provided for in this Section, the Rent payable
hereunder shall not be reduced or abated in any manner whatsoever.

(4)                                  No Structural
Alterations shall involve the removal of any fixtures, equipment or other
property in the Premises which are not Lessee’s property, unless Lessor’s prior
written consent is first obtained and unless such fixtures, equipment or other
property shall be promptly replaced, at Lessee’s expense and free of superior
title, liens and claims, with fixtures, equipment or other property (as the
case may be) of like utility and at least equal value (which replaced fixtures,
equipment or other property shall thereupon become the property of Lessor),
unless Lessor shall otherwise expressly consent in writing.

7.                                       ACTIVITIES
INCREASING FIRE INSURANCE RATES:

Intentionally omitted.

8.                                       ASSIGNMENT
AND SUBLEASE:

(a)                                  Except
as otherwise specifically provided in this Section 8, neither this Lease, nor
the Term and estate hereby granted, nor any part thereof, nor the interest of
Lessee in any sublease or the rental thereunder, shall be assigned, mortgaged,
pledged, encumbered or otherwise transferred by Lessee or Lessee’s legal
representatives or successors in interest, by operation of law or otherwise,
and neither the Premises, nor any part thereof, nor any Lessee’s Property,
shall be encumbered in any manner by reason of any act or omission on the part
of Lessee or anyone claiming under or through Lessee, or shall be sublet or be
used or occupied or permitted to be used or occupied or utilized for desk or
storage space by anyone other than Lessee or for any purpose other than as
specifically permitted by this Lease, without the prior written consent of
Lessor, which in the case of assignment or subletting, such consent shall not
be unreasonably withheld, conditioned or delayed.

 

11

 

In the event Lessee
desires to assign this Lease or sublease all or part of the Premises to any
other party, the terms and conditions of such assignment or sublease shall be
communicated to the Lessor in writing prior to the effective date of any such
sublease or assignment, solely with respect to any sublease or assignment,
which its terms, including any options to renew, covers that remainder of the
Term or expires within the twelve (12) month period immediately preceding the
Expiration Date, prior to such effective date, the Lessor shall have the
option, exercisable in writing to the Lessee, to:  (i) recapture in the case of subletting, that
portion of the Premises to be sublet or all of the Premises in the case of an
assignment (“Recapture Space”) so that such prospective sublessee or assignee
shall then become the sole Lessee of Lessor hereunder, or (ii) recapture the
Recapture Space for Lessor’s own use and the within Lessee shall be fully
released from any and all obligations hereunder with respect to the Recapture
Space.

(b)                                 If
this Lease is assigned, whether or not in violation of the provisions of this Lease,
Lessor may collect rent from the assignee. 
If the Premises or any part thereof be sublet or be used or occupied by
anybody other than Lessee, whether or not in violation of this Lease, Lessor
may, after default by Lessee and expiration of Lessee’s time to cure such
default, if any, collect rent from the sublessee or occupant.  In either event, Lessor may apply the net
amount collected to the rents herein reserved, but no such assignment,
subletting, occupancy or collection shall be deemed a waiver of any of the
provisions of Section 8(a) above, or the acceptance of the assignee, sublessee
or occupant as tenant, or a release of Lessee from the further performance by
Lessee of Lessee’s obligations under this Lease.  The consent by Lessor to an assignment,
mortgaging or subletting pursuant to any provision of this Lease shall not in
any way be considered to relieve Lessee from obtaining the express consent of
Lessor for any other or further assignment, mortgaging or subletting.  References in this Lease to use or occupancy
by anyone other than Lessee shall not be construed as limited to sublessees and
those claiming under or through sublessees but as including also licensees and
others claiming under or through Lessee, immediately or remotely.  The listing of any name other than that of
Lessee on any door of the Premises or on any sign on the Premises, or
otherwise, shall not operate to vest in the person so named any right or
interest in this Lease or in the Premises, or be deemed to constitute, or serve
as a substitute for, any prior consent of Lessor required under this Section,
and it is understood that any such listing shall constitute a privilege
extended by Lessor which shall be revocable at Lessor’s will by notice to
Lessee.  Lessee agrees to pay to Lessor
any reasonable counsel fees incurred by Lessor in connection with any proposed
assignment of Lessee’s interest in this Lease or any proposed subletting of the
Premises or any part thereof, if Lessor’s consent thereto is required.  Neither any assignment of Lessee’s interest
in this Lease nor any subletting, occupancy or use of the Premises or any part
thereof by any person other than Lessee as provided in this Article, nor any
application of any such rent as provided in this Article shall, under any circumstances,
relieve Lessee herein named of its obligations fully to observe and perform the
terms, covenants and conditions of this Lease on Lessee’s part to be observed
and performed.

 

12

 

Lessor, however, shall
not in any event be obligated to consent to the assignment of this Lease
unless:  (i) in the reasonable judgment
of Lessor the proposed assignee is of a character and financial worth such as
is in keeping with the standards of Lessor in those respects for the Premises,
or the assignee can otherwise secure and guaranty the payment to Lessor of all
Fixed Basic Rent and Additional Rent and any other amounts due from Lessee
pursuant to this Lease in a manner reasonably satisfactory to Lessor; (ii) the
nature of the proposed assignee’s business and its reputation are in keeping
with the character of the Premises and the use thereof; (iii) the purpose for
which the proposed assignee intends to use the Premises assigned to it are uses
expressly permitted by and not expressly prohibited by this Lease; (iv) no
Event of Default shall have occurred and be continuing; and (v) Lessee shall
reimburse Lessor for all reasonable costs that may be incurred by Lessor in
connection with the said assignment, including the costs of making
investigations as to the acceptability of a proposed assignee and legal costs
incurred in connection with the granting of any requested consent.

(c)                                  (1)           Notwithstanding anything contained in
Sections 8(a) and 8(b), in the event that, at any time or from time to time
during the Term, Lessee desires to sublet all or any part of the Premises, and
Lessor’s consent is required, Lessee shall notify Lessor of such desire and
shall:  (i) submit to Lessor in writing
the name and address of the proposed subtenant, a reasonably detailed statement
of the proposed subtenant’s business, reasonably detailed financial references
for the proposed subtenant and any other information reasonably requested by
Lessor, and (ii) submit to Lessor the material financial terms of the proposed
sublease.

(2)                                  Within ten (10)
business days after Lessor receives Lessee’s notice requesting Lessor’s consent
to a specific subletting or assignment, Lessor shall notify Lessee whether it
consents to such subletting or assignment. 
If Lessor denies Lessee’s request for consent to a specific subletting
or assignment, Lessor shall specify in writing, the reason(s) therefor.  If Lessor fails to respond within such ten
(10) business day period, Lessee may send Lessor a second notice which notice
shall provide in capitalized and bold type letters that Lessor’s failure to
respond to such request within five (5) business days shall be deemed Lessor’s
consent to such subletting or assignment, and if Lessor fails to respond to
such request within five (5) business days after Lessor’s receipt of such
second notice, Lessor shall be deemed to have consented to such subletting or
assignment.  Lessor, however, shall not
in any event be obligated to consent to the proposed sublease for which Lessor’s
consent is required or the commencement of the term unless:  (i) in the reasonable judgment of Lessor the
proposed subtenant is of a character and financial worth such as is in keeping
with the standards of Lessor in those respects for the Premises, and the nature
of the proposed subtenant’s business and its reputation are in keeping with the
character of the Premises and the use thereof; (ii) the purpose for which the
proposed subtenant or assignee intends to use the portion of the Premises
sublet or assigned to it are uses expressly permitted by and not

 

13

 

expressly prohibited by this Lease; (iii) no Event of Default shall
have occurred and be continuing; and (iv) Lessee shall reimburse Lessor for all
reasonable costs that may be incurred by Lessor in connection with the said
sublease, including the costs of making investigations as to the acceptability
of a proposed subtenant and legal costs incurred in connection with the
granting of any requested consent.

(3)                                  With respect to each
and every subletting authorized by the provisions of this Section it is further
agreed and understood between Lessor and Lessee that:  (i) the subletting shall be, and each such
sublease shall expressly provide that is, subject and subordinate at all times
and in all respects, to this Lease, (ii) no subletting shall be for a term
ending later than one day prior to the Expiration Date originally provided for
herein and that part, if any, of the proposed term of any sublease which shall
extend beyond a date one day prior to the Expiration Date originally provided
for herein (or any sooner date of the expiration of the term or termination of
this Lease) is hereby deemed to be a nullity and (iii) there shall be delivered
to Lessor, within ten (10) days after the commencement of the term of the
proposed sublease, notice of such commencement and a fully executed copy of the
proposed sublease (unless previously submitted).

(4)                                  Anything herein
contained to the contrary notwithstanding, Lessee shall not advertise but may
list its space for subletting or assignment, at a rental rate lower than the
rental rate then being paid by Lessee to Lessor.

(d)                                 No
assignment or sublet of any portion or all of the Premises shall be valid
unless Lessee shall have first provided to Lessor:  (i) a duplicate original of the assignment or
subletting document; (ii) an instrument in form and substance satisfactory to
Lessor signed executed by the assignee in which assignee shall expressly assume
observance and performance of, and agreed to be personally bound by, all of the
terms, covenants and conditions of this Lease which are to be performed or
observed by Lessee following the effective date of the assignment.  No assignment or sublet of any portion or all
of the Premises shall be deemed or act as a release of Lessee from the
performance by Lessee of Lessee’s obligations under this Lease.  Lessee’s liability shall be joint and several
with any successors (immediate or remote) in interest of Lessee and such joint
and several liability in respect of Lessee’s obligations hereunder shall not be
discharged, released or impaired in any respect by any agreement or stipulation
made by Lessor modifying any of the obligations or terms of this Lease, or by
any waiver or failure of Lessor to enforce any of the obligations under this
Lease.

(e)                                  If
Lessee is a corporation other than a corporation whose stock is listed and
traded on a nationally recognized stock exchange, the provisions of Section a
shall apply to a transfer (however accomplished, whether in a single
transaction or in a series of related or unrelated transactions) of stock (or
any other mechanism such as, by way of example, the issuance of additional
stock, a stock voting agreement or change in class(es) of stock) which results
in a change of “control” (as hereinafter

 

14

 

defined) of Lessee as if such transfer of stock (or other mechanism)
which results in a change of control of Lessee were an assignment of this Lease,
and if Lessee is a partnership or joint venture, said provisions shall apply
with respect to a transfer (by one or more transfers) of an interest in the
distributions of profits and losses of such partnership or joint venture (or
other mechanism, such as, by way of example, the creation of additional general
partnership or limited partnership interests) which results in a change of
control of such a partnership or joint venture, as if such transfer of an
interest in the distributions of profits and losses of such partnership or
joint venture which results in a change of control of such partnership or joint
venture were an assignment of this Lease. 
The provisions of clauses (a) and (b) of this Article shall not apply to
transactions entered into by Lessee with: 
(i) a Lessee Affiliate (as hereinafter defined); or (ii) a corporation
into or with which Lessee is merged or consolidated, or with an entity to which
all or substantially all of Lessee’s business/assets are transferred or to any
sale of all or substantially all of Lessee’s stock, or a transfer of all or
substantially all of partnership or membership interests, provided (a) there
has not been an Event of Default under this Lease, (b) in the case of clause
(ii) above, such merger, consolidation or transfer of business/assets, sale of
stock or transfer of partnership or membership interests is for a legitimate
business purpose and not principally for the purpose of transferring the
leasehold estate created hereby, and (c) in the case of clause (ii) above, the
assignee or successor entity has a net worth as evidenced by financial
statements delivered to Lessor and certified by an independent certified public
accountant in accordance with generally accepted accounting practices
consistently applied (“Net Worth”) after such merger, consolidation or
acquisition and assumption equal to or greater than ONE HUNDRED MILLION AND
00/100 DOLLARS ($100,000,000.00) and a credit rating of at least BBB with a
positive outlook (or an equivalent shadow rating).  Lessee shall deliver to Lessor proof
reasonably satisfactory as to Lessee’s Net Worth and credit rating within ten
(10) days prior to the effective date of the transaction.  In determining the Net Worth of the assignee
or successor for purposes of this Section, Lessee may, at its option, include
the Net Worth of any surviving predecessor Lessee continuing to have liability
on or under this Lease and/or any guarantor of Lessee’s obligations under this
Lease.  A “Lessee Affiliate” or “Affiliate
of Lessee” means a corporation or other entity controlled by, controlling or
under common control with Lessee.  As
used in this Lease, the terms “control”, “controlled by” or “under common
control with” shall mean ownership of (x) more than forty percent (40%) of the
outstanding voting stock of a corporation (or other majority equity and control
interest if not a corporation), and (y) the possession of power to direct or
cause the direction of the management and policy of such corporation or other
entity, whether through the ownership of voting securities, by statute or
according to the provisions of a contract. 
Lessee may sublet all or any portion of the Premises or assign this
Lease to an Affiliate of Lessee without Lessor’s consent or recapture rights,
provided that Lessee shall continue to be liable under this Lease.

Notwithstanding anything
contained herein, Lessee shall have the right, without being required to obtain
the consent of Lessor or being subject to Lessor’s

 

15

 

recapture rights
hereunder, to permit portions of the Premises to be used under so-called “desk
sharing” arrangements by persons or entities which are an Affiliate of Lessee
or have a business relationship with Lessee, other than landlord-tenant or
sublandlord-subtenant (any such person or entity, a “User”), and which User
shall only use desk space in the Premises for the purposes permitted by this
Lease, and subject to and in compliance with the following terms and
conditions:

(1)                                  A User shall have no
rights under this Lease;

(2)                                  no separate entrances
to the Premises from public areas shall be constructed to access the space used
by any User;

(3)                                  any breach or
violation of this Lease by a User shall be deemed to be and shall constitute a
default by Lessee under this Lease, and any act or omission of a User shall be
deemed to be and shall constitute the act or omission of Lessee under this
Lease;

(4)                                  the right of a User
to occupy a portion of the Premises shall not be deemed to be an assignment of,
or sublease under, this Lease and any occupancy of the Premises shall
automatically terminate upon expiration or earlier termination of this Lease;

(5)                                  Lessee hereby
indemnifies and holds harmless Lessor, any lessor and any mortgagee against
loss, claim or damage (excluding consequential) arising from the acts or
omission of any User; and

(6)                                  no User, assignee or
subtenant shall be entitled, directly or indirectly, to diplomatic or sovereign
immunity, and each User shall be subject to the service of process at and the
jurisdiction of the courts of, the State of New Jersey.

9.                                       COMPLIANCE
WITH RULES AND REGULATIONS:

Lessee shall observe and
comply with the rules and regulations hereinafter set forth in Exhibit B
attached hereto and made a part hereof. 
Lessee acknowledges that the rules and regulations attached as Exhibit B
are applicable while Lessee is the sole tenant in the Building. At such time(s)
that Lessee is not the sole tenant in the Building, Lessor may prescribe such
reasonable rules and regulations that Lessor deems necessary.  The Rules and Regulations shall be prescribed
and enforced in a non-discriminatory manner. 
Lessee shall not place a load upon any floor of the Premises exceeding
the floor load which it was designed to carry and which is allowed by law.  Such installations shall be placed and
maintained by Lessee, at Lessee’s expense, in settings sufficient, in Lessees
reasonable judgement, to absorb and prevent vibration, noise and annoyance.

 

16

 

10.                                 DAMAGES
TO BUILDING:

(a)                                  If
the Premises or any part thereof shall be damaged or rendered inaccessible by
fire or other casualty, Lessee shall give prompt notice thereof to Lessor and
Lessor shall proceed (subject to the provisions of this Section) with reasonable
diligence to repair or cause to be repaired such damage.  The Fixed Basic Rent and Additional Rent
shall be abated proportionately to the extent that the Premises shall have been
rendered Untenantable (as hereinafter defined) or inaccessible, such abatement
to be from the date of such damage or destruction to the date which is thirty
(30) days following the date the Premises shall no longer be Untenantable or
inaccessible.  “Untenantable” shall mean
actual inability to use space in the Premises for the purposes permitted by
Article 4.

(b)                                 (1)                                  If
the Building shall be totally damaged or the whole or material part of the
Building shall be rendered Untenantable by fire or other casualty and the
estimate referred to in Section 8(b)(2) exceeds twelve (12) months, then and in
such events Lessor may, at its option, terminate this Lease and the Term and
estate hereby granted by giving Lessee not less than  thirty (30) days, nor more than sixty (60)
days, notice of such termination, within ninety (90) days after the date of
such damage.  In the event that such
notice of termination shall be given, this Lease and the Term and estate hereby
granted shall terminate as of the date provided in such notice of termination
(whether or not the Term shall have commenced) with the same effect as if that
were the Expiration Date, and the Fixed Rent and Additional Rent shall be
apportioned as of such date of sooner termination, and any prepaid portion of
Fixed Rent and Additional Rent for any period after such date shall be refunded
by Lessor to Lessee.

(2)                                  If the Building or
any material part of the Building shall be damaged or Untenantable or
inaccessible by fire or other casualty, Lessor shall deliver to Lessee, within
ninety (90) days after such fire or other casualty, the estimate of a reputable
architect or general contractor of the time necessary to complete the required
repairs and restore and rebuild the Building to the level of demising walls or
to provide access.  If such estimate
exceeds twelve (12) months from the date of such casualty, or if Lessor fails
to deliver such notice, then in such events, Lessee may serve on Lessor, within
thirty (30) days of its receipt of Lessor’s notice or the expiration of ninety
(90) days from the fire or casualty, as the case may be (time being of the
essence with respect thereto), notice of its intention to terminate this Lease
on a date which shall be not more than ninety (90) days from the date of Lessee’s
notice.  If Lessee gives notice of its
intention to cancel this Lease as provided herein, then in such events, this
Lease shall terminate on the expiration of such ninety (90) day period as if
such termination date were the Expiration Date, and the Fixed Rent and
Additional Rent shall be apportioned as of such date of sooner termination and
any prepaid portion of Fixed Rent and Additional Rent for any period after such
date shall be refunded by Lessor to Lessee. 
Lessee’s failure to

 

17

 

notify Lessor within the ninety (90) day period shall be deemed a
waiver of the right to terminate this Lease.

(c)                                  If
the Building or any non-de minimis part thereof (for purposes hereof, a non-de
minimis part of the Premises shall mean such portion of the Premises which, if
left unrestored, would render the balance of the Premises inadequate for the
conduct of Lessee’s normal business operations) shall be damaged or rendered
Untenantable or inaccessible by fire or other casualty, and Lessee and Lessor
have not terminated this Lease pursuant to Section 8(b) and Lessor has not
completed the making of the required repairs and restored and rebuilt the
Premises and/or access is not restored within twelve (12) months from the date
of such fire or other casualty, Lessee may serve notice on Lessor of its intention
to terminate this Lease on a date not more than thirty (30) days after the
expiration of such twelve (12) month period and if within thirty (30) days
thereafter, Lessor shall not have substantially completed the making of the
required repairs and restored and rebuilt the Premises to the level of demising
walls, or provided access, then in such events, this Lease shall terminate on
the date set forth in Lessee’s notice as if such termination date were the
Expiration Date, and the Fixed Basic Rent and Additional Rent shall be
apportioned as of such date of sooner termination and any prepaid portion of
Fixed Basic Rent and Additional Rent for any period after such date shall be
refunded by Lessor to Lessee.

(d)                                 Lessor
shall not be liable for any inconvenience or annoyance to Lessee or injury to
the business of Lessee resulting in any way from such damage by fire or other
casualty or the repair thereof.

(e)                                  Lessor
need not restore fixtures and improvements owned by Lessee.  Notwithstanding any of the foregoing
provisions of this Section, if by reason of some action or inaction on the part
of Lessee or any of its employees, agents, officers, directors or contractors,
Lessor shall be unable to collect all of the insurance proceeds (including rent
insurance proceeds) applicable to damage or destruction of the Premises by fire
or other cause, then, without prejudice to any other remedy which may be
available against Lessee, the abatement of Fixed Rent provided for in this
Section shall not be effective to the extent of the uncollected insurance
proceeds.

(f)                                    Lessee
shall, at its own cost and expense, remove all of Lessee’s property from the
Premises as Lessor shall require in order to repair and restore the Premises
and Lessor shall not be obligated to commence repairs or restoration of the
Premises until such property has been removed by Lessee from the damaged
portion of the Premises.  Should Lessee
neglect, fail, or refuse to remove its aforesaid property within fifteen (15)
days after Lessor’s request, the provisions for abatement of Fixed Basic Rent
contained herein shall be suspended and of no force and effect whatsoever until
Lessee has completed such removal.  In no
event shall the Lessor be required to repair or replace Lessee’s merchandise,
trade fixtures, furniture, furnishings, inventory and equipment.

 

18

 

(g)                                 If
all or substantially all of the Premises are damaged or rendered Untenantable
or inaccessible by fire or other casualty during the last year of the Term and
it will take more than ninety (90) days to rebuild the Premises, then either
party may terminate this Lease on thirty (30) days’ notice to the other party.

11.                                 EMINENT DOMAIN:

(a)  Termination. 
If (i) all of the Premises are taken in a condemnation, or (ii) a
portion of the Premises are taken in condemnation and Lessee determines in good
faith that it will be economically unfeasible to operate its business in any
facility that could be reconstructed on the remaining portion of the Premises,
this Lease will terminate and all obligations under it will cease as of the
date upon which possession is taken by the condemnor.  Upon such termination, the Fixed Basic Rent
and Additional Rent will be apportioned and paid in full by Lessee to Lessor to
that date, all Fixed Basic Rent and Additional Rent prepaid beyond that date
will be repaid by Lessor to Lessee, and Lessee will comply with subsection
(e).  lf, after a partial condemnation of
the Premises, Lessee remains in possession of the remaining portion of the
Premises after the date on which the condemnor takes possession of the portion
of the Premises taken in condemnation, then Lessee shall be deemed a holdover
tenant pursuant to Article 25 hereof for such period commencing thirty (30)
days after the date upon which the condemnor took possession of the condemned
portion of the Premises.  If Lessor
disputes any determination by Lessee that it will be economically unfeasible to
operate its business in any facility that could be reconstructed on the remaining
portion of the Premises, upon request of either party, the matter will be
submitted to arbitration in accordance with the rules of the American
Arbitration Association (“AAA”) at the office of the AAA nearest the Building.

(b)  Partial Condemnation.  If there is a partial condemnation and this
Lease has not been terminated pursuant to subsection (a), Lessor will promptly
restore the Building and other improvements on the Property to a condition and
size as nearly comparable as reasonably possible to their condition and size
immediately prior to the taking; the time of restoration will be extended for
time lost due to Force Majeure, provided that Lessor diligently pursues such
restoration during such Force Majeure period. 
Lessor shall retain the proceeds of any condemnation award
recovered.  In that event, there will be
an equitable abatement of the Fixed Basic Rent and Additional Rent, commencing
from and after the date on which the condemnor takes possession.

(c)  Award.  If a condemnation affecting Lessee occurs,
Lessee will have the right to make a claim against the condemnor for removal
expenses, business dislocation damages and moving expenses to the extent that
such claims or payments do not reduce the sums payable by the condemnor to
Lessor.  Lessee waives all claims against
Lessor and all other claims against the condemnor, and Lessee assigns to Lessor
all claims against the condemnor including, without limitation, all claims for
leasehold damages and diminution in value of Lessee’s leasehold.

(d)  Temporary Taking.  If the temporary use of the whole or any part
of the Premises shall be taken at any time during the Term by the condemnation
or eminent domain, the

 

19

 

Term shall not be reduced
or affected in any way and Lessee shall continue to pay in full the Fixed Basic
Rent and Additional Rent, but Lessee shall be entitled to, and shall, receive
the entire award for such taking.  If the
period of occupation and use by the sovereign shall extent beyond the
termination of this Lease and any renewals thereof, the award for such taking
shall be apportioned between Lessor and Lessee as of the date of such
termination.

12.                                 INSOLVENCY
OF LESSEE:

Intentionally omitted.

13.                                 LESSOR’S
REMEDIES ON DEFAULT:

(a)                                  (1)                                  If
any one or more of the following events shall happen and shall not have been
cured within any applicable grace period herein provided:

(i)                                     if default shall
be made in the due and punctual payment of Fixed Basic Rent or Additional Rent
payable by Lessee under this Lease when and as the same shall become due and
payable, and such default shall continue for a period of ten (10) days after
written notice thereof from Lessor to Lessee (provided that no such notice
shall be required if, during the period of one (1) year immediately preceding
the date of default, there shall have been two (2) or more defaults in the due
and punctual payment of Fixed Basic Rent or Additional Rent payable by Lessee
under this Lease when and as the same shall have been due and payable following
the required notice and the expiration of the applicable cure period); or

(ii)                                  if default shall be
made by Lessee in performance of, or compliance with, any of the covenants,
agreements or conditions contained in this Lease and either (i) in the case of
a default or a contingency which can with due diligence be cured within thirty
(30) days, such default shall continue for a period of thirty (30) days after
written notice thereof from Lessor to Lessee, or (ii) in the case of a default
or a contingency which cannot with due diligence be cured within thirty (30)
days, Lessee shall fail, after written notice thereof from Lessor, to proceed
promptly and with all due diligence to commence to cure the same and thereafter
to prosecute the curing of such default with all due diligence (it being
intended that, in connection with a default which is not susceptible of being
cured with due diligence within thirty (30) days the time of Lessee within
which to cure the same shall be extended for such period as may be necessary
for the curing thereof with all due diligence); or

(iii)                               if Lessee shall file a
voluntary petition seeking an order or relief under Title 11 of the United
States Code or similar law of any jurisdiction applicable to Lessee, or Lessee
shall be adjudicated a debtor, bankrupt or insolvent, or shall file any
petition or answer seeking, consenting to or acquiescing in any order for
relief, reorganization, arrangement,

 

20

 

composition, adjustment, winding-up, liquidation, dissolution or
similar relief with respect to Lessee or its debts under the present or any
future bankruptcy act or any other present or future applicable federal, state
or other statute or law, or shall file an answer admitting or failing to deny
the material allegations of a petition against it for any such relief or shall
generally not, or shall be unable to, pay its debts as they become due or shall
admit in writing in any filing with any court or Governmental Authority its insolvency
or its inability to pay its debts as they become due, or shall make a general
assignment for the benefit of creditors or shall seek or consent or acquiesce
in the appointment of any trustee, receiver, examiner, assignee, sequestrator,
custodian or liquidator or similar official of Lessee or of all or any part of
Lessee’s property or if Lessee shall take any action in furtherance of or
authorizing any of the foregoing; or

(iv)                              if any case, proceeding
or other action shall be commenced or instituted against Lessee, seeking to
adjudicate Lessee a bankrupt or insolvent, or seeking an order for relief
against Lessee as debtor, or reorganization, arrangement, composition,
adjustment, winding-up, liquidation, dissolution or similar relief with respect
to Lessee or its debts under the present or any future bankruptcy act or any
other present or future applicable federal, state or other statute or law, or
seeking appointment of any trustee, receiver, examiner, assignee, sequestrator,
custodian or liquidator or similar official of Lessee or of all or part of
Lessee’s property, which either (i) results in the entry of an order for
relief, adjudication of bankruptcy or insolvency or such an appointment or the
issuance or entry of any other order having similar effect or (ii) remains
undismissed for a period of ninety (90) days; or if any case, proceeding or
other action shall be commenced or instituted against Lessee seeking issuance
of a warrant of execution, attachment, restraint or similar process against
Lessee or any of Lessee’s property which results in the taking or occupancy of
the Premises or an attempt to take or occupy the Premises which shall not have
been vacated, discharged, or stayed or bonded pending appeal within ninety (90)
days after the entry thereof; or

(v)                                 if any financial
statement or other information furnished to Lessor by Lessee in connection with
this Lease is materially false or misleading;

then and in any such
event (hereinafter sometimes called an “Event of Default”) Lessor may give written
notice (“Termination Notice”) to Lessee specifying such Event of Default or
Events of Default and stating that this Lease and the Term shall expire and
terminate on the date specified in the Termination Notice, which shall be at
least ten (10) days after the giving of the Termination Notice, and on the date
specified therein this Lease and the Term and all rights of Lessee under this
Lease shall expire and terminate, it being the intention of the Lessor and
Lessee hereby to create conditional limitations, and Lessee shall remain liable
as provided in this Article 13 and in accordance with those provisions of this
Lease

 

21

 

which are specifically
stated herein to survive the expiration or other termination of this Lease.

(2)                                  Notwithstanding the
provisions of Section 13(a), if there shall be an Event of Default at any time
or from time to time under the provisions of subdivision (i) of Section
13(a)(1), Lessor may, in lieu of giving a Termination Notice, at any time after
the occurrence of any such Event of Default and during the continuance thereof,
institute an action for the recovery of the Fixed Basic Rent and/or Additional
Rent in respect of which an Event of Default shall have occurred and be
continuing.  Neither the commencement of
any such action for the recovery of Fixed Basic Rent and/or Additional Rent nor
the prosecution thereof shall be deemed a waiver of Lessor’s right to give a
Termination Notice in respect of any such Event of Default during the
continuance thereof and Lessor may, notwithstanding the commencement and
prosecution of any such action, give a Termination Notice and terminate this
Lease pursuant to Section 13(a) at any time during the continuance of such
Event of Default.

(3)                                  If, at any time, (i)
Lessee shall be comprised of two or more persons, or (ii) Lessee’s obligations
under this Lease shall have been guaranteed by any person other than Lessee, or
(iii) Lessee’s interest in this Lease shall have been assigned, the word “Lessee”,
as used in subdivisions (iv) and (v) of Section 13(a)(1), shall be deemed to
mean any one or more of the persons primarily or secondarily liable for Lessee’s
obligations under this Lease.  Any monies
received by Lessor from or on behalf of Lessee during the pendency of any
proceeding of the types referred to in said subdivision (iv) of Section
13(a)(1) shall be deemed paid as compensation for the use and occupation of the
Premises and the acceptance of any such compensation by Lessor shall not be
deemed an acceptance of rent or a waiver on the part of Lessor of any rights
under Section 13(a).

(b)                                 In
the event that this Lease shall be terminated as provided in this Section,
Lessor or Lessor’s agents may, immediately, or at any time thereafter, without
further notice, enter upon and re-enter the Premises and possess and repossess
itself thereof, by summary proceedings, ejectment or otherwise, and have, hold
and enjoy the Premises and the right to receive all income of and from the
same.  No re-entry by Lessor pursuant to
this Section shall be deemed an acceptance of a surrender of this Lease nor
shall it absolve or discharge Lessee from any liability under this Lease.

(c)                                  In
the event that this Lease shall be terminated as provided in this Section,
Lessor may, at any time or from time to time thereafter, relet the Premises or
any part thereof, for such term or terms (which may be greater or less than the
period which would otherwise have constituted the balance of the Term) and on
such conditions (which may include concessions or free rent, which shall,
however, be amortized over the entire term for the purpose of determining
damages under this Section) as Lessor may determine, to any tenant which it may
deem suitable and

 

22

 

satisfactory and for any use and purpose it may deem appropriate and
may collect and receive the rents therefor. 
Lessor shall use commercially reasonable methods in making such
reletting.  Lessor, at its option, may
make such repairs, alterations, additions, improvements, decorations and other
physical changes in and to the Premises as Lessor considers advisable or
necessary in connection with any such reletting or proposed reletting, without
relieving Lessee of any liability under this Lease or otherwise affecting any
such liability.  Lessor shall in no way
be responsible or liable for any failure to relet the Premises, or any part
thereof, or for any failure to collect any rent due upon such reletting.  Lessor shall not in any event be required to
pay Lessee (but shall credit Lessee, to the extent set forth in this Section,
with) any sums received by Lessor on a reletting of the Premises, or any part
thereof; whether or not in excess of the rent reserved in this Lease.

(d)                                 Lessee,
on its own behalf and on behalf of all persons claiming through or under Lessee
including all creditors, does hereby waive any and all rights and privileges,
so far as is permitted by law, which Lessee and all such persons might
otherwise have under any present or future law, to (i) the service of any
notice of intention to re-enter or institute legal proceedings to that end,
excluding service of process, (ii) redeem the Premises, (iii) re-enter or
repossess the Premises, or (iv) restore the operation of this Lease, after
Lessee shall have been dispossessed by a judgment or by warrant of any court or
judge, or after any re-entry by Lessor or after any expiration or termination
of this Lease and the Term, whether such dispossess, re-entry, expiration or
termination shall be by operation of law or pursuant to the provisions of this
Lease.  The words “re-enter,” “re-entry”
and “re-entered” as used in this Lease shall not be deemed to be restricted to
their technical legal meanings.

(e)                                  In
the event the Lessee shall dispute the validity or amount, or the time or
manner of payment of, any rent claimed by Lessor to be due from Lessee under
this Lease, Lessee shall nevertheless pay the same and such payment may be
without prejudice to Lessee’s position if Lessee so requests at the time of
payment.  If the dispute shall be finally
determined in Lessee’s favor by a court of competent jurisdiction or
arbitration, Lessor shall within a reasonable period of time not to exceed
sixty (60) days pay Lessee the amount of Lessee’s overpayment of such rent,
together with interest as provided hereunder. 
Lessee’s failure to observe and perform the provisions of this Section
shall be deemed a default under subdivision (i) of Section 13(a).

(f)                                    In
the event that this Lease be terminated as a result of an Event of Default on
the part of the Lessee and whether or not the Premises be relet, Lessor shall
be entitled to retain all monies, if any, paid by Lessee to Lessor, whether as
advance rent or otherwise, but such monies shall be credited by Lessor against
any rent due at the time of such termination, or at Lessor’s option against any
damages payable by Lessee, and Lessor shall be entitled to recover from Lessee,
and Lessee shall pay to Lessor the following:

 

23

 

(i)                                     All rent to the
date upon which this Lease and the Term shall have terminated, and

(ii)                                  All expenses
reasonably incurred by Lessor in recovering possession of the Premises
(including reasonable attorneys’ fees and the costs of summary or other legal
proceedings), restoring the Premises to good order and condition, maintaining
the Premises in good order and condition while vacant, altering or otherwise
returning the same to the condition that same were in upon delivery of the
Premises to Lessee on the Commencement Date, the same to be paid by Lessee to
Lessor on demand, and

(iii)                               All expenses incurred by
Lessor in reletting the Premises, including brokerage commissions, tenant
improvement costs, rent concessions and other inducements, and

(iv)                              The amount by which the
rent which, but for the termination of this Lease, would have been payable
under this Lease from the date of termination to the Expiration Date exceeds
the rental and other income, if any, collected by Lessor in respect of the Premises,
or any part thereof, subject nevertheless to the provisions of Section 13(c),
said amount to be due and payable by Lessee to Lessor on the several days on
which the rent reserved in this Lease would have become due and payable for the
period which otherwise would have constituted the unexpired portion of the Term
(that is to say, upon each of such days Lessee shall pay to Lessor the amount
of deficiency then existing).

Whether or not Lessor shall have collected any monthly
deficiencies aforesaid, Lessor shall be entitled to recover from Lessee on
demand, as and for liquidated damages, a lump sum payment equal to the amount
by which the Fixed Basic Rent and Additional Rent payable hereunder for the
period which otherwise would have constituted the unexpired portion of the Term
(due account being taken of amounts, if any, collected under clause [3] of
Section 13(a), and conclusively presuming the Additional Rent to be the same as
was payable for the year immediately preceding such termination or re-entry and
thereafter increasing by five (5%) percent per annum) exceeds the then rental
value of the Premises for the same period both discounted at a rate equal to
then applicable Treasury Rate to present value. 
If the Premises or any part thereof be reset by Lessor for the unexpired
portion of the Term, or any part thereof, before presentation of proof of such
liquidated damages to any court, commission or tribunal, the amount of rent
reserved upon such reletting shall be deemed prima facie to be the fair and reasonable
rental value for the part or the whole of the Premises so relet during the term
of the reletting.  Nothing herein
contained shall limit or prejudice the right of the Lessor to prove for and
obtain as damages by reason of such termination an amount equal to the maximum
allowed by any statute or rule of law in effect at the time when, and governing
the proceedings in which, such damages are to be proved, whether or not such
amount be greater or less than the

 

24

 

amount of liquidated damages referred to above (due
account to be taken, however, of the amounts, if any, collected under this
Section 13).

(g)                                 In
no event shall Lessee be entitled to receive any excess of the rental and other
income collected by Lessor in respect of the Premises over the sums payable by
Lessee to Lessor hereunder.  In no event
shall Lessee be entitled in any suit for the collection of damages pursuant to
this Section to a credit in respect of any such rental and other income, except
to the extent that such rental and other income is allocable to the portion of
the Term in respect of which such suit is brought and is actually received by
Lessor prior to the entry of judgment in such suit.

(h)                                 Separate
actions may be maintained by Lessor against Lessee from time to time to recover
any damages which, at the commencement of any such action, have then or
theretofore become due and payable to Lessor under Section, without waiting
until the end of the Term and without prejudice to Lessor’s right to collect
damages thereafter.

14.                                 Intentionally Omitted.

15.                                 SUBORDINATION
OF LEASE:

This Lease shall, at
Lessor’s option, or at the option of any holder of any underlying lease or
holder of any mortgage or trust deed (hereinafter sometimes collectively
referred to as “Senior Encumbrances”), be subject and subordinate to any such
underlying leases and to any such mortgage or trust deed which may now or
hereafter affect the real property of which the Premises form a part, and also
to all renewals, modifications, consolidations and replacements of said
underlying leases and said first mortgage or trust deed, provided that Lessor
shall obtain a customary, commercially reasonable non-disturbance agreement
from the holder of any such underlying lease, mortgage or trust deed.  Lessor shall cause to be included in such non-disturbance
agreement a provision that recognizes Lessor’s obligation to apply insurance
proceeds toward restoration of the Building and the Premises and does not
otherwise alter any of the terms of this Lease. 
Any expenses charged by the mortgagee in connection with the obtaining
of the aforesaid agreement shall be paid by Lessor.  Although no instrument or act on the part of
Lessee shall be necessary to effectuate such subordination, Lessee will,
nevertheless, execute and deliver such further commercially reasonable
instruments confirming such subordination of this Lease as may be desired by
the holders of said mortgage or trust deed or by any of the Lessor’s under such
underlying leases.  If any underlying
lease to which this Lease is subject terminates, Lessee shall, on timely
request, attorn to the owner of the reversion.

16.                                 SECURITY
DEPOSIT:

Lessee shall deposit with
Lessor on or before March 17, 2005, TIME BEING OF THE ESSENCE,
the Security Deposit as defined in the Preamble for the full and faithful
performance of Lessee’s obligations under this Lease, including without
limitation, the surrender of possession of the Premises to Lesser as herein
provided.  If Lessor applies

 

25

 

any part of said Security
Deposit to cure any default of Lessee, Lessee shall, on demand, deposit with
Lessor the amount so applied so that Lessor shall have the full Security
Deposit on hand at all times during the Term of this Lease.  In the event a bona fide sale, subject to
this Lease, Lessor shall have the right to transfer the Security Deposit to the
vendee, and Lessor shall be considered released by Lessee from all liability
for the return of the Security Deposit; and Lessee agrees to look solely to the
new lessor for the return of the Security Deposit, and it is agreed that this
shall apply to every transfer or assignment made of the Security Deposit to the
new lessor.  Provided this Lease is not
in default, the Security Deposit (less any portions thereof used, applied or
retained by Lessor in accordance with the provisions of this Article 16), shall
be returned to Lessee after the expiration or sooner termination of this Lease
and after delivery of the entire Premises to Lessor in accordance with the
provisions of this Lease.  Lessee
covenants that it will not assign or encumber or attempt to assign or encumber
the Security Deposit and Lessor shall not be bound by any such assignment,
encumbrance or attempt thereof.

In the event of the
insolvency of Lessee, or in the event of the entry of a judgement in any court
against Lessee which is not discharged within thirty (30) days after entry, or
in the event a petition is filed by or against Lessee under any chapter of the
bankruptcy laws of the State of New Jersey or the United States of America,
then in such event, Lessor may require the Lessee to deposit additional
security in an amount which in Lessor’s sole judgement would be sufficient to
adequately assure Lessee’s performance of all of its obligations under this
Lease including all payments subsequently accruing.  Failure of Lessee to deposit the security
required by this Article 16 within ten (10) days after Lessor’s written demand
shall constitute a material breach of this Lease by Lessee.

17.                                 RIGHT
TO CURE LESSEE’S/LESSOR’S BREACH:

(a)                                  If
Lessee breaches any covenant or condition of this Lease, Lessor may, on thirty
(30) days notice to Lessee (except that in case of emergency a lessor notice
appropriate to the circumstances shall be required), cure such breach at the
expense of Lessee and the actual and reasonable amount of all expenses,
including reasonable attorney’s fees, incurred by Lessor in so doing shall be
deemed Additional Rent payable on demand.

(b)                                 If
(i) Lessor fails to perform any of its obligations under this Lease (other than
by reason of Lessee’s acts or omissions or Force Majeure), which failure (A)
materially interferes with Lessee’s use of the Premises for the conduct of its
business and (B) Lessor fails to commence to remedy such failure to perform
within ten (10) business days from the date Lessee notifies Lessor of such
failure and (ii) in the case of any such failure (A) Lessee again notifies
Lessor after the expiration of such ten (10) business day period of such
failure and of Lessee’s intention to cure same, which notice shall specify that
such notice is being given in accordance with this Article 17, and shall
contain the following statement in capitalized bold type:  “IF YOU
FAIL TO PERFORM THE OBLIGATION REFERENCED IN THIS NOTICE WITHIN THE TIME PERIOD
SPECIFIED IN ARTICLE 17 OF THE LEASE, WE SHALL EXERCISE OUR SELF-HELP REMEDIES
UNDER THAT SECTION” and (B) such

 

26

 

failure continues for not less than five (5) consecutive days from the
date Lessor receives such second notice, provided that, in the case of a
failure which for causes beyond Lessor’s reasonable control cannot with due
diligence be cured with such 5-day period, such 5-day period shall be extended
for such period as may be necessary to cure such failure provided that Lessor
shall be diligently prosecuting such cure, then at Lessee’s election and as
Lessee’s sole remedy (if Lessee elects to exercise its self-help rights hereunder),
Lessee may take such actions as may be reasonably necessary to cure such
failure.  Lessor shall reimburse Lessee
for the reasonable out-of-pocket costs incurred by Lessee in performing same
within ten (10) business days after receipt by Lessor of a written statement
from Lessee as to the amount of such costs, provided the performance of such
obligation by Lessee does not adversely affect the structure, electrical, HVAC,
plumbing or mechanical systems of the Building. 
The amount reimbursed (excluding Excess Costs, hereinafter defined) by
Lessor shall be included in Operating Costs; provided, however, if the cost
incurred by Lessee in exercising its self-help right hereunder shall exceed the
amount that Lessor would have incurred and which would have been included in
Operating Costs had Lessor performed its obligations, then such excess amount (“Excess
Costs”) shall not be included in Operating Costs and the Excess Costs shall be
borne solely by Lessor.  If Lessor fails
to reimburse Lessee for the reasonable out-of-pocket costs incurred by Lessee
hereunder, then the costs shall not be included in Operating Costs and Lessee
shall have the right to offset the Excess Costs against the management fee(s)
thereafter coming due Lessor under this Lease. 
Such offset amount shall include interest at the Interest Rate from the
date of the expenditure to the date Lessee shall be actually or effectively,
i.e., through offset of the management fee(s) reimbursed by Lessor.  Lessee shall provide Lessor with reasonable evidence
of the cost of such work performed by Lessee hereunder.  For purposes hereof, Lessor shall be deemed
to have commenced to cure a failure or service interruption if Lessor has begun
to take such action as is reasonably practicable under the circumstances (e.g.,
inspecting the situation, calling necessary contractors, etc.), even thought
actual repairs may not have commenced. 
In the exercise of Lessee’s rights under this Section 17(b), Lessee
agrees that Lessee shall use only those contractors then on the approved list
of contractors for the Building, as such list may be furnished from time to
time during the Term by Lessor to Lessee. 
In the event Lessee exercises the self-help remedies in accordance with
this Section 17(b), Lessee hereby agrees to indemnify, defend, pay on
behalf of and hold harmless Lessor and its respective partners, joint
venturers, directors, officers, invitees, agents, servants and employees (each,
an “indemnitee” for purposes of this provision) from and against any
loss, damage, liability, cost, claim or expense (including reasonable attorney’s
fees and disbursements) arising from or in connection with Lessee’s negligence
or willful misconduct in the exercise of such self-help remedies, including,
without limitation, any accident, injury or damage whatsoever occurring in,
about or to the Building or the structure, electrical, HVAC, plumbing or
mechanical systems of the Building as a result of Lessee’s performance of its
self-help remedies under this Section 17(b).  In no event shall Lessee have any rights
under this Section

 

27

 

17(b) if the failure or service interruption
was caused by Force Majeure or any act, omission, negligence or willful
misconduct of Lessee or any of its contractors, agents, employees, servants,
licensees or invitees or if Lessee is in default under this Lease beyond
applicable notice and grace periods.

(c)                                  If
Lessee exercises any of its self-help rights under this Article 17, Lessee
shall not be entitled to any rent abatement under Article 21 hereof in respect
of the occurrence in question other than any rent abatement which may have
accrued prior to Lessee exercising such self-help rights.

18.                                 MECHANIC’S
LIENS:

Lessee shall, within
thirty (30) days after notice from Lessor, discharge or satisfy by bonding or
otherwise any mechanic liens for materials or labor claimed to have been
furnished to the Premises on Lessee’s direction.  If Lessee shall fail to cause such lien to be
discharged within the period aforesaid, then, in addition to any other right or
remedy, Lessor may, but shall not be obligated to, discharge the same by
bonding proceedings, if permitted by law (and if not so permitted, by deposit
in court).  Any amount so paid by Lessor,
including all costs and expenses paid by Lessor in connection therewith shall
constitute Additional Rent payable by Lessee under this Lease and shall be paid
by Lessee to Lessor on demand.

19.                                 RIGHT
TO INSPECT AND REPAIR:

Lessor may enter the
Premises at any reasonable time on reasonable notice to Lessee (except that no
notice need be given in case of emergency) provided that a representative of
Lessee is present (provided that Lessee shall make such representative
available to Lessor) for the purpose of inspection or the making of structural
repairs, replacements or additions in, to, on and about the Premises or the
Building, or such other repairs, replacements or additions as required by this
Lease or required to safeguard the Building or Property.  Lessee shall have no claims or cause of
action against Lessor by reason thereof. 
When performing work within the Premises, Lessor shall use commercially
reasonable efforts to minimize interference with Lessee’s use and occupancy of
the Premises.  In no event shall Lessee
have any claim against Lessor for interruption of Lessee’s business, however
occurring, including but not limited to that arising from the negligence of
Lessor, its agents, servants or invitees, or from defects, errors or omissions
in the construction or design of the Premises and/or the Building, including
the structural and non-structural portions thereof.

20.                                 SERVICES
TO BE PROVIDED BY LESSOR/LESSOR’S EXCULPATION:

Subject to intervening
laws, ordinances, regulations and executive orders, Lessor agrees as part of Operating
Costs, to furnish the following:

(a)                                  Lessor
shall furnish cold water to the Premises for ordinary lavatory, drinking, and
office cleaning purposes.  Lessor shall
install or arrange to have the water company install a water meter at Lessee’s
expense which Lessor shall thereafter maintain at Lessee’s reasonable expense
unless such maintenance can be

 

28

 

performed by the water company in which case the water company shall
bill Lessee directly for all maintenance expenses and Lessee shall pay for
water consumed as shown on said meter at the cost of same charged to Lessor by
the water company.  Lessor, at Lessee’s
sole cost and expense, shall furnish rubbish removal services as required and
janitorial services and Premises cleaning. 
Lessor shall maintain and repair, as required, the exterior areas of the
Building and, in connection therewith, furnish landscaping and snow removal
services and otherwise keep such areas adequately lighted, reasonably clean and
in good order, condition and repair, and Lessee shall pay Lessee’s Percentage
share thereof.

(b)                                 Lessor
shall provide Lessee with conduits, pipes, tubes and wiring for the supply of
electricity, gas, water, sewer and telephone service to the point of connection
to the Premises.  Lessee shall have
reasonable access to the utility feeds in the portion of the Additional
Premises located in Pod A-1 to perform work in the Building (the “Utility Feed
Area”); provided that Lessee shall take reasonable safeguards to minimize
interference with the tenant occupying the Utility Feed Area.  Lessee shall cooperate with such tenant to
minimize such interference. 
Notwithstanding the foregoing, in the event of an emergency, Lessor
shall provide Lessee with full and unfettered access to the Utility Feed Area
and shall include provisions in any sublease of any portion of the Property
which confirms such access rights in favor of Lessee.  All services other than as provided pursuant
to Section a. hereof to be provided to, or which shall be necessary for the
conduct of, Lessee’s operations within the Premises, including, without
limitation and for purposes of illustration, the furnishing of electric current
and gas energy (subject, however, to the provisions of Article 6), telephone,
and any other utility or service which Lessee shall deem necessary or
desirable, shall be separately arranged, metered, maintained and paid for by
Lessee.  Lessee’s utilities shall be
separately metered, except as otherwise provided in this Lease, and all costs
of any utilities not separately metered shall be reasonably apportioned by
Lessor and shall constitute Additional Rent. 
Lessee, at its sole cost and expense, shall cause the Premises to be
kept clean and in a good and orderly condition as befits similar buildings in
Monmouth County.  In the event Lessee
shall employ a contractor to provide any services to the Premises, such
contractor (and any subcontractors) shall agree to employ only such labor as will
not result in jurisdictional disputes or strikes.  Lessee shall inform Lessor of the names of
any contractor or subcontractor Lessee proposes to use in the Premises at least
fifteen (15) days prior to the beginning of work by such contractor or subcontractors.

In addition to the
services to be performed by Lessor under this Lease, Lessor, at Lessee’s sole
cost and expense, shall provide complete management of the Property and
Building, excluding providing child care center operations, fitness center,
security and food services; it being understood, that Lessee shall contract for
such services directly with contractors reasonably acceptable to Lessor and the
cost of all such services shall be borne solely by Lessee.  All services to be provided by Lessor or at
the direction of Lessor shall be awarded to qualified third party service
providers who were the low bidders pursuant to a commercially reasonable
competitive bidding process.  Lessee
shall have the right, exercisable

 

29

 

at Lessee’s
reasonable discretion, to disapprove of any service provider and, upon
providing notice to Lessor of such disapproval, Lessor shall re-bid the job and
promptly retain a replacement service provider pursuant to a commercially
reasonable bidding process.  Notwithstanding
the foregoing, Lessee agrees that Lessor shall have the right to engage the
services of janitorial contractors using union personnel, although such
contractor may not be the lowest bidder; although it will be the lowest bidder
of the union janitorial contractors. 
Lessee shall pay Lessor, as Additional Rent, a management fee in an
amount equal to two and one-half percent (2.5%) multiplied by the sum of
the following:  (i) Fixed Basic Rent;
(ii) Additional Rent not reimbursable to Lessee (i.e., such Additional Rent
that is not subject to refund to Lessee); and (iii) base building utility cost
(which for purposes hereof shall be deemed $1.00 per rentable square foot of
the Premises per annum).  If Lessor
reasonably believes that the base building utility costs exceeds $1.00 per
rentable square foot per annum, then Lessor shall cause a survey to be
performed by an independent engineer to determine the base building utility
cost.  If the survey determines that the
base building utility cost exceeds $1.00 per rentable square foot per annum,
then Lessee shall pay a management fee based upon such determination and Lessee
shall pay the cost of the survey.  If the
survey determines that the base building utility cost does not exceed $1.00 per
rentable square foot per annum, then there shall be no adjustment to the
management fee and Lessor shall pay the cost of the survey.  Such management fee shall be payable in
installments in the same manner as the Additional Rent pursuant to Article 23
hereof, mutatis mutandis.  The
base building utility cost shall mean all utility and energy costs, including
any fuel surcharges or adjustments with respect thereto, incurred for
electricity, water, sewer, gas and other utilities, not to include the
electricity supplied to the lights and outlets of Lessee occupied or to be
occupied office space in the Building (as opposed to what would typically be
considered “common areas” in a multi-tenanted building).

(b)                                 Lessee
shall provide its own security service at its sole cost and expense.  Lessor or any third party tenant may provide
security services for such third (3rd) party tenant and the cost thereof shall
not be included in Operating Costs.  If
Lessee fails to provide reasonably adequate security, Lessor shall have the
right to do so, at Lessee’s sole cost and expense.

Notwithstanding any
provisions of this Lease, Lessor shall not be liable for failure to furnish any
of the aforesaid services when such failure is due to Force Majeure, as
hereinafter defined.  Lessor shall not be
liable, under any circumstances, including, but not limited to, that arising
from the negligence of Lessor, its agents, servants or invitees, or from
defects, errors or omissions in the construction or design of the Premises
and/or the Building, including the structural and non-structural portions
thereof, for loss of or injury to Lessee or to property, however occurring,
through or in connection with or incidental to the furnishings of, or failure
to furnish, any of the aforesaid services or for any interruption to Lessee’s
business, however occurring.  Nothing
contained herein shall be deemed

 

30

 

a waiver of Lessee’s
right of constructive eviction if Lessor fails to perform its obligations under
this Lease or a waiver of Lessor’s default under this Lease.

(c)                                  Lessor
shall not be liable in damages or otherwise, for any delay or failure in Lessee’s
receiving any such utilities from the utility company(ies) and in no event
shall such delay or failure, regardless of cost, constitute an eviction of
Lessee or termination of this Lease.

(d)                                 Access
to the Premises is 24 hours per day each day of the year.

(e)                                  Lessee
shall have the right to obtain telecommunications service from such providers
as it shall elect.  Lessor shall allow
such providers to establish and maintain a point of entry in the ground floor
of the Building, and Lessor shall not be entitled to charge any fee as a
condition to permitting access to the Building or the Premises or for
establishing a point of entry in or serving Lessee or any other customers in
the Building.  Lessee and its service
providers shall have the right to install conduits and cables from the Premises
into the ground floor of the Building, through the foundation wall, across the
Property and to the street or other utility right of way in order to connect
with such providers, all in such manner and along such route as Lessor shall
reasonably determine; provided, that Lessor may not require Lessee to share any
conduit or cable of another occupant or of Lessor, and Lessee shall not be
required to share its conduit or cable with another occupant or with
Lessor.  Any such work to the structure
of the Building shall be subject to Lessor’s consent as more fully set forth in
Article 6 hereof.

21.                                 INTERRUPTION
OF SERVICES OR USE:

Interruption or
curtailment of any service maintained in the Building or at the Property, if
caused by Force Majeure, as hereinafter defined, shall not entitle Lessee to
any claim against Lessor or to any abatement in rent, and shall not constitute
a constructive or partial eviction, unless Lessor fails to take measures as may
be reasonable under the circumstances to restore the service without undue
delay.  If the Premises are rendered
untenantable in whole or in part, for a period of five (5) consecutive business
days or thirty (30) days in any calendar year, by (i) the making of repairs,
replacements or additions, other than those made with Lessee’s consent or
caused by misuse or neglect by Lessee, or Lessee’s agents, servants, visitors
or licensees, (ii) Lessor’s failure to make any repairs or perform any
obligation which is Lessor’s responsibility, or (iii) Lessor’s failure to
supply any service or utility required to be supplied by Lessor, there shall be
a proportionate abatement of Fixed Basic Rent and Additional Rent from and
after said fifth (5th) consecutive business day or thirty-first (31st)
day in any calendar year and continuing for the period of such
untenantability.  In no event, shall
Lessee be entitled to claim a constructive eviction from the Premises unless
Lessee shall first have notified Lessor in writing of the condition or
conditions giving rise thereto.

 

31

 

22.                                 ELECTRICITY/GAS:

Lessor shall cause
electricity and gas to be supplied to the Building and to permit Lessee to
receive electricity for Lessee’s use of the Premises, including the heating,
ventilation and air conditioning (“HVAC”) system.  Lessee shall pay for Lessee’s separate supply
of electric current and gas energy by direct application to, and arrangement
with, the public utility companies servicing the Building.  Lessee shall have the right to negotiate with
the supplier or suppliers of electricity and gas or require Lessor to obtain
electricity and gas from alternate suppliers selected by Lessee.  The applicable utility company shall provide
such meters used to measure such electricity and gas service.  Lessee shall pay all charges with respect to
consumption of electricity and gas applicable to the Premises.  If, pursuant to a Legal Requirement or the
policies or operating practices of the public utility company servicing the
Building, Lessee is no longer permitted to obtain electrical energy or gas
directly from the public utility company, Lessor will furnish electrical energy
and/or gas to the Premises either, at Lessor’s option, on a “check-metering”
basis or a rent inclusion basis.  Lessor
shall give Lessee notice at least thirty (30) days prior to the date on which
Lessor shall commence furnishing electrical energy and/or gas to the Premises
(unless such notice is not feasible under the circumstances, in which event
Lessor will give Lessee such notice as is given to Lessor by the public utility
company), which notice will shall confirm Lessor will so furnish electrical
energy and/or gas to the Premises at the cost Lessor charged by the public
utility company.  If any utilities cannot
be separately metered or assessed or are only partially separately metered or
assessed and are used in common with other lessees of the Building, Lessee will
pay to Lessor an equitable apportionment of such charges for utilities used in
common with other lessees of the Building, based on the square footage of floor
space leased to each lessee using such common facilities, the average
electrical or gas consumption of each lessee and other pertinent
considerations, in addition to Lessee’s payment of the partially separately
metered charges.  Lessee shall defend,
indemnify and hold Lessor harmless from and reimburse Lessor for all liability,
damages, costs, fees, expenses, penalties and charges (including, but not
limited to, attorneys’ fees and disbursements) incurred in connection with (i)
Lessee’s failure to pay for any electricity or gas provided to Lessee hereunder
or (ii) misuse or neglect by Lessee of the meters(s) and equipment supplying
the electricity or gas.

(a)                                  Lessee’s
use of electric current in the Premises shall not exceed the capacity of any
electrical conductors and equipment in or otherwise serving the Premises.

(b)                                 Lessor
shall not be liable in any way to Lessee for any loss, damage or expense which
Lessee may sustain or incur as a result of any failure, defect or change in the
quantity or character of electrical or gas energy available for redistribution
to the Premises pursuant to this Paragraph nor for any interruption in the
supply and Lessee agrees that upon reasonable notice (except no notice shall be
required in emergencies) such supply may be interrupted for inspection, repairs
and replacement and in emergencies.  In
any event, the full measure of Lessor’s liability for any interruption in the
supply due to Lessor’s acts or omissions shall be an abatement of rent and
additional rent.  In no event shall
Lessor be liable for any business interruption suffered by Lessee.

 

32

 

23.                                 ADDITIONAL
RENT:

It is expressly agreed
that Lessee will pay in addition to the fixed Basic Rent provided in Article 3
above, Additional Rent equal to Lessee’s Percentage (as defined in the
Preamble) of the cost for each of the categories of expenses set forth in this
Article 23.

For purposes of this
Article 23, a “Lease Year” shall mean the Calendar Year, except that the First
Lease Year shall commence on the Commencement Date and end on December 31 of
such Calendar Year and the Last Lease Year shall end upon the expiration of the
Term.

(a)                                  Taxes

(i)                                     During the Term
commencing on the Rent Commencement Date, Lessee shall pay to Lessor as
Additional Rent, Lessee’s Percentage, as defined in the Preamble, of all taxes,
assessments, general and special, ordinary as well as extraordinary, charges,
levies and impositions or payments required to be made in lieu thereof,
including, but not limited to, water and sewer rents and charges (collectively
referred to hereinafter as the “Taxes”) presently or hereinafter in effect,
which are or may be made liens upon or against the Building and the Property
and which are allocable to the Term.

(ii)                                  If any Taxes are
levied, assessed, or imposed on the Building or the Property or on the income
or rents derived therefrom as a substitute, in whole or in part, for the
current ad valorem real estate tax, Lessee shall pay the same, measured
however, as though the Premises were the sole asset of Lessor.

(iii)                               Commencing on the Rent
Commencement Date with respect to the Initial Premises or Additional Premises
Rent Commencement Date with respect to the Additional Premises, Lessee shall
pay Lessee’s Percentage of Lessor’s estimate of Taxes for the First Lease Year
and as set forth in Lessor’s itemized statement for each Lease Year thereafter
in equal monthly installments, in advance, as Additional Rent, together with
Fixed Basic Rent.  Following the
expiration of each Lease Year, Lessor shall furnish Lessee with a written
statement of the actual Taxes levied against the Building and Property for such
Lease Year and Lessee shall, within thirty (30) days after receipt of Lessor’s
statement, pay, as Additional Rent, the deficiency, if any, in Taxes payable by
Lessee for such Lease Year; and if, at the end of such Lease Year, the total
amount paid by Lessee as Lessee’s Percentage is greater than the actual amount
required to be paid for such Lease Year, then the amount of such excess will be
applied by Lessor to the next succeeding monthly installment of Fixed Basic
Rent due hereunder, and if there is any such excess during the Last Lease Year,
then the amount of such excess will be refunded to Lessee by Lessor within
ninety (90) days after Lessor’s statement is furnished.  All

 

33

 

such adjustments shall be subject to verification pursuant to Article
23f).  If the First Lease Year and Last
Lease Year is less than a period of 365 days, then Additional Rent payable
during these respective lease years shall be the amount equal to (i) Lessee’s
Percentage (as defined herein), multiplied by (ii) the Taxes for the calendar
year which includes the First Lease Year or Last Lease Year, as the case may
be, divided by twelve and multiplied by the number of months (including any
portion of a month) during the First Lease Year or Last Lease Year, as the case
may be.  Lessor may, if it shall so
desire, seek a reduction of the assessed valuation of the Building or the
Property for the purpose of reducing Taxes thereon.  If Lessor elects not to contest Real Estate
Taxes for any Lease Year, Lessee may request that Lessor contest Real Estate
Taxes for such Lease Year, provided that Lessor shall have no obligation to
expend any sums in connection with such contest.  Lessor shall, however, act in good faith when
determining not to contest Real Estate Taxes for any Lease Year.

(iv)                              Receipts.  Lessor shall, upon Lessee’s request, furnish
to Lessee copies of the official receipts from relevant taxing authorities or
billing entities or other evidence reasonably satisfactory to Lessee evidencing
the payment of any Taxes.

(b)                                 Operating Costs

(i)                                     Operating Costs
shall mean any or all expenses incurred by Lessor in connection with the
operation of the Building and the Property, including all expenses incurred as
a result of Lessor’s compliance with any of its obligations hereunder other
than Lessor’s work pursuant to Article 27 hereof but excluding those capital
expenditure items for which Lessor is obligated to bear the sole cost under
this Lease, and such expenses shall include: 
(1) salaries, wages, medical, surgical and general welfare benefits,
(including group life insurance) pension payments and other fringe benefits of
employees of Lessor engaged in the operation and maintenance of the Building
(the salaries and other benefits aforesaid of such employees servicing the
Building shall be customary and reasonable and comparable to those of employees
servicing similar Buildings located in the County of Monmouth); (2) payroll
taxes, worker’s compensation, uniforms and dry cleaning for the employees
referred to in subdivision (1); (3) the cost of all charges for rent, casualty,
war risk insurance (if obtainable from the United States government) and of
liability insurance, terrorism insurance for the Building and the Property to
the extent that such insurance is required to be carried by Lessor under any
superior lease or superior mortgage or if not required under any superior lease
or superior mortgage then to the extent such insurance is carried by owners of
buildings comparable to the Building; (4) the cost of all building supplies;
(5) Repair and Maintenance Expenses; (6) the cost of all charges for
management, window cleaning and service contracts for the Building and the
other service facilities related thereto; and (7) and all other items

 

34

 

properly constituting operating costs in accordance with generally
accepted accounting principles and not otherwise specifically excluded
hereunder, Operating costs shall not include; (a) administrative wages and
salaries of those not directly involved in the servicing of the Building or any
personnel above the level of Property Manager (provided that if any Building personnel
services the Building and other buildings owned and/or managed by Lessor or an
affiliate of Lessor, Lessor shall reasonably allocate the wages and salaries of
such personnel among the buildings they service more than one building); (b)
real estate brokerage commissions; (c) franchise taxes or income taxes of
Lessor; (d) Taxes; (e) interest and amortization under mortgages; and (f) rent
payable under any superior lease.  The
following items shall be excluded from Operating Costs:  (1) leasing commissions and any other costs
related to leasing, including, without limitation, leasehold improvements for
other tenants and marketing costs; (2) cost of repairs or replacements incurred
by reason of fire or other casualty (except a reasonable deductible shall be
included in Operating Costs), or caused by the exercise of the right of eminent
domain; (3) costs incurred in performing work or furnishing services to or for
individual tenants (including Lessee) at such tenant’s expense; (4) debt
service or other financing or refinancing costs on or in connection with any
mortgages now or hereafter encumbering the Building and/or Property; (5) the
cost of performing or furnishing services for tenants other than Lessee at
Lessor’s expense, to the extent that such work or service Lessor is not
obligated to furnish to or for Lessee at Lessor’s expense; (6) the cost of
attorneys’, accountants’ and other professional fees incurred in connection
with negotiating and drafting leases with other tenants, or in connection with
disputes with other tenants or any other litigation or arbitration; (7) costs
incurred in the sale or refinancing of the Building and/or Property; (8)
interest or penalties due to Lessor’s violations of law, (9) advertising and
promotional expenses; (10) depreciation, amortization and interest payments;
(11) leasehold improvements made for other tenants; (12) Taxes; (13) ground
rent under any superior lease; (14)) costs incurred by Lessor due to the
violation by Lessor of the terms and conditions of any lease of space in the
Building, including this Lease; (15) overhead and profit increment paid to
Lessor or to subsidiaries or affiliates of Lessor for goods and/or services in
or to the Building to the extent the same exceeds the costs of such goods
and/or services rendered by unaffiliated third parties on a competitive basis;
(16) advertising and promotional expenditures and costs of signs in or on the
Building or the Property identifying the owner of the Building; (17) tax
penalties incurred as a result of Lessor’s failure to make payments and/or file
any tax or informational returns when due; (18) costs arising from the
negligence or fault of Lessor or its agents, or any vendors, contractors, or
providers of materials or services selected, hired or engaged by Lessor or its
agents including, without limitation, the selection of building materials; (19)
notwithstanding any contrary provision of the Lease, including,

 

35

 

without limitation, any provision relating to capital expenditures, any
and all costs arising from the presence of hazardous materials or substances
(as defined by Environmental Laws) in or about the Premises, the Building or
the Property including, without limitation, hazardous substances or materials
in the ground water or soil, not placed or released in the Premises, the
Building or the Property by Lessee or the condition exacerbated by Lessee; (20)
costs arising from Lessor’s charitable or political contributions; (21) costs
arising from defects in the base, shell or core of the Building or improvements
installed by Lessor; (22) costs for or associated with the acquisition of any
extraordinary paintings, sculptures, decorative wall hangings or other objects
of art; (23) costs (including in connection therewith all attorneys’ fees and
costs of settlement, judgments and payments in lieu thereof) arising from
claims, disputes or potential disputes in connection with potential or actual
claims litigation or arbitrations pertaining to Lessor and/or the Building
and/or the Property; (24) costs associated with the operation of Lessor’s
business to the extent that the same are distinguished from the costs of
operating the Building and the property, including accounting and legal
matters, costs of any disputes between Lessor and any of its employees, any
costs associated with the mortgaging of the Property or any other financing
related to the Building, the Property or Lessor’s interest therein, disputes of
Lessor with Building management or any costs, fees or expenses paid in
connection with disputes with other tenants; (25) any entertainment, dining or
travel expenses for any purpose; (26) any flowers, gifts, etc. provided to any
entity whatsoever, to include, but not be limited to, Lessee, employees, vendors,
contractors, prospective tenants and agents; (27) “In-house” legal and/or
accounting fees; (28) reserves for bad debt or for future improvements,
repairs, additions or the like and (29) management fees, it being understood
that Lessee is paying a management fee pursuant to Article 20 hereof.

Whether capital
expenditures shall be included in Operating Costs shall be determined in
accordance with Article 5 hereof.

(ii)                                  During the Term
commencing on the Rent Commencement Date, Lessee shall pay to Lessor, Lessee’s
Percentage of Operating Costs. 
Commencing on the Rent Commencement Date with respect to the Initial
Premises and the Additional Premises Rent Commencement Date with respect to the
Additional Premises, Lessee shall pay Lessee’s Percentage of Lessor’s estimate
of operating costs for the First Lease Year and as set forth in Lessor’s
itemized statement for each Lease Year thereafter, in equal monthly
installments, in advance as Additional Rent, together with Fixed Basic Rent.  Following the expiration of each Lease Year,
Lessor shall furnish Lessee with an itemized statement of the actual Operating
Costs for such Lease Year and Lessee shall, within thirty (30) days after
receipt of such itemized statement, pay, as Additional Rent, the deficiency, if
any, in charges payable by Lessee for such Lease Year; and if, at the end

 

36

 

of such Lease Year, the total amount paid by Lessee as Lessee’s
Percentage is greater than the amount required to be paid for such Lease Year,
then the amount of such excess will be applied by Lessor to the next succeeding
monthly installment of Fixed Basic Rent hereunder; and if there is any such
excess during the Last Lease Year, then the amount of such excess will be
refunded to Lessee by Lessor within ninety (90) days after Lessor’s itemized
statement is finished.  All such
adjustments shall be subject to verification pursuant to Article 23(d)
hereof.  If the First Lease Year or Last
Lease Year is less than a period of 365 days, then Additional Rent payable
during these respective lease years shall be the amount equal to (i) Lessee’s
Percentage (as defined herein), multiplied by (ii) the Operating Costs for the
calendar year which includes the First Lease Year or Last Lease Year, as the
case may be, divided by 365 and multiplied by the number of days (including any
portion of a month) during the First Lease Year or Last Lease Year, as the case
may be.

(c)                                  Intentionally
omitted.

(d)                                 Intentionally
omitted.

(e)                                  Repair and Maintenance Expenses

Repair and Maintenance
Expenses shall mean all costs and expenses incurred by Lessor for replacement,
repair and maintenance of all or any part of the Building and Property (except
to the extent set forth in Article 5 hereof).

(f)                                    Books and Reports and Rights to Review

a.                                       At
any time hereafter and from time to time, Lessor shall furnish to Lessee a
statement (“Lessor’s Statement”) setting forth (i) Lessor’s actual Operating
Costs, Repair and Maintenance Expenses and Common Utility Expenses and/or actual
Taxes for a period which shall have expired only if a final statement has not
been previously rendered, and/or (ii) Lessor’s reasonable estimate of Operating
Costs, Repair and Maintenance Expenses and Common Utility Expenses and/or Taxes
for the current period.  Within thirty
(30) days next following rendition of each such Lessor’s Statement, Lessee
shall pay to Lessor the entire amount, if any, shown on such Lessor’s Statement
as being due with respect to any period which shall have expired.  In addition, Lessee shall pay to Lessor, on
the first day of each month following rendition of each such Lessor’s
Statement, on account of the estimated Additional Rent thereafter payable, a
proportionate sum of the total Additional Rent shown upon such Lessor’s Statement
as being Lessor’s reasonable estimate for the current period on an annual basis
(it being agreed that Lessor’s estimate shall in any event be deemed reasonable
if it is based on actual Operating Costs, Repair and Maintenance Expenses and
Common Utility Expenses (or any one or more items thereof) and/or actual Taxes
for a period which shall have expired

 

37

 

immediately prior
thereto, so that one month prior to the end of such period, Lessee’s Percentage
share of the increase shall be paid in full, and Lessee shall continue to pay
Additional Rent on such basis until receipt of a subsequent Lessor’s
Statement.  Such Additional Rent shall be
due and payable at the same time as each monthly installment of Fixed Basic
Rent.

1.                                       A
reconciliation shall be made upon each Lessor’s Statement as follows:  Within ninety (90) days following the end of
each annual period, Lessor shall deliver to Lessee Lessor’s Statement for that
period; Lessee shall be debited with any Operating Costs, Repair and
Maintenance Expenses and Common Utility Expenses and/or actual Taxes payable as
shown on such Lessor’s Statement, and credited with the aggregate of the total
amount, if any, paid by Lessee in accordance with the provisions of the
preceding paragraph on account of the estimated Additional Rent, for the period
or item in question, and, within thirty (30) days next following rendition of
such Lessor’s Statement, Lessee shall pay Lessor the amount of any net debit
balance shown thereon a Lessor shall apply against the next ensuing
installments of Fixed Basic Rent and Additional Rent the net credit balance
shown thereon, or at the Expiration Date, any balance due Lessee shall be paid
to Lessee.  Lessor’s failure to provide
Lessor’s Statement within such ninety (90) day period shall not prevent Lessor
from submitting a statement thereafter and collecting the Additional Rent set
forth therein (subject to Section 23(f).b.2. below) or otherwise be deemed a
release of Lessee’s obligation to pay Additional Rent for such annual period.

2.                                       Without
limiting the preceding provisions of Section 23(f)(a), it is understood that
Lessor shall furnish a Lessor’s Statement, for each calendar year falling
wholly or partially within the Term.

b.                                      1.             Lessor’s failure to render Lessor’s
Statements with respect to any period shall not prejudice Lessor’s right to
render a Lessor’s Statement with respect to that or any subsequent period,
except Lessor shall not have the right to deliver a Lessor’s Statement more
than one (1) year after the end of an annual period.  The obligations of Lessor and Lessee under
the provisions of this Section with respect to Additional Rent shall survive
the expiration or any sooner termination of the Term.

2.                                       Each
final Lessor’s Statement for any annual period shall be conclusive and binding
upon Lessee unless within one (1) year after receipt of such Lessor’s
Statement, Lessee shall notify Lessor that it disputes the reasonableness or
correctness of Lessor’s Statement, specifying to the extent known by Lessee the
respects in which Lessor’s Statement is claimed to be unreasonable or

 

38

 

incorrect.  Pending the determination of such dispute by
agreement or otherwise, Lessee shall pay Additional Rent in accordance with the
applicable Lessor’s Statement, and such payment will be without prejudice to
Lessee’s position.  If the dispute shall
be finally determined in Lessee’s favor by arbitration pursuant to this
Section, Lessor shall forthwith pay Lessee the amount of Lessee’s overpayment
of Additional Rent resulting from compliance with Lessor’s Statement, together
with the cost of any audit conducted by Lessee (but such audit cost shall be
paid by Lessor only if Lessee’s overpayment exceeded 5% of the amount actually
due).

3.                                       Lessee
shall have the right, at its sole cost and expense, to audit Lessor’s books and
records for any portion of Lessor’s Statement. 
Lessee’s right under the provisions of this Section 23 may be exercised
only once for any Lessor’s Statement and if Lessee fails to audit within said
one-year period, then in such event, Lessee’s rights as provided herein with
respect to that particular Lessor’s Statement shall be deemed waived.

4.                                       (i)            Lessee acknowledges that Lessor maintains
its records for the Property at the offices of its managing agent as it may
change from time to time, and Lessee agrees that any review of records as
provided for in this Section 23 shall take place at the offices of Lessor’s
managing agent, which may change from time to time, provided that at all times
copies shall be in the United States. 
Lessee acknowledges and agrees that any records reviewed by it shall
constitute confidential information of Lessor which shall not be disclosed to
anyone other than the Lessee’s accountants, attorneys and advisors, and the
principals of Lessee, or if required by law or in connection with any
litigation or arbitration, and disclosure or dissemination of such information
shall be deemed a material breach of this Lease and Lessor shall be entitled to
all its remedies at law or in equity.

(ii)                                  In the event that
Lessee finds an error in Lessor’s Statement, such error shall be:  (a) promptly corrected in the event that
Lessor agrees with Lessee, or (b) resolved by agreement between Lessor and
Lessee in the event that Lessor does not agree with Lessee.  In the event that Lessor and Lessee are
unable to resolve such error, then in such event the error shall be determined
by arbitration by an arbitrator selected by the American Arbitration
Association, whose decision on the dispute will be final and binding upon both
parties.  If the Disputed Item (as
hereinafter defined) is agreed upon by Lessor and Lessee, or found by the
arbitrators, to be greater or lesser than the amount set forth in Lessor’s
Statement, then in such event:

 

39

 

(i)                                     if Lessee has
overpaid its obligations for a preceding period, the amount of such overpayment
shall be credited against Lessee’s subsequent payments of fixed Basic Rent and
Additional Rent, and any balance then due shall be paid to Lessee at the
Expiration Date; or (ii) if Lessee has underpaid its obligations for a
preceding period, the amount of such underpayment shall be paid to Lessor with
Lessee’s next installment obligation of Operating Costs, Repair and Maintenance
Expenses and Common Utility Expenses and/or actual Taxes.

(iii)                               (a)           In the event that Lessor and Lessee
are unable to resolve a dispute concerning the reasonableness and/or correctness
of any specific item on Lessor’s Statement (hereinafter referred to as the “Disputed
Item”), then the matter shall be submitted to arbitration in accordance with
the provision set forth above.

(b)           In no event shall the arbitrator
enlarge upon, or alter or amend, this Lease or Lessor’s or Lessee’s rights as
provided in this Lease, it being understood that the sole issue for
determination by the arbitrator shall be the single issue of fact as to the
reasonableness and/or correctness of the Disputed Item.  The arbitrator shall be certified public
accountants who are disinterested and are currently practicing in the Union
County, New Jersey area with at least ten (10) years experience in evaluating
and auditing common area maintenance charges.

(c)           Except as otherwise provided in the
following sentence, the fees and expenses of an arbitration proceeding shall be
borne by the losing party.  The fees of
respective counsel engaged by the parties the fees and expenses of expert
witnesses and other witnesses called and the cost of transcripts shall be borne
by the parties engaging such counsel or calling such witness or ordering such
transcripts.

c.                                       Lessee
shall pay and discharge, or cause to be paid and discharged, the following
items, regardless of to whom or how incurred, all taxes and assessments, if
any, which shall or may during the Term be charged, levied, assessed or imposed
upon, or become a lien upon, the personal property of Lessee used in the
operation of the Demised Premises and which, if not paid by Lessee, would be
collectible from Lessor.

d.                                      Lessor,
at Lessee’s request and at Lessee’s sole cost and expense, shall, in a timely
manner, for each relevant period during the Term, for each Tax applicable to
the Property, seek the largest reduction of the assessed

 

40

 

valuation of the Property
available to Lessor by the commencement and diligent prosecution of the
appropriate tax reduction proceeding.

24.                                 ESTOPPEL:

Lessor and Lessee agree
at any time and from time to time, within twenty (20) days after request by the
other, to execute, acknowledge and deliver a statement certifying to the
requesting party or any party it designates (i) the Commencement Date, the Rent
Commence Date and the Expiration Date hereunder, (ii) that this Lease is
unmodified and in full force and effect (or if there have been modifications,
that the Lease is in full force and effect as modified and stating the
modifications), (iii) the dates to which the Fixed Basic Rent and Additional Rent
have been paid, (iv) whether or not to the knowledge of the signer of such
statement (a) the other party is in default in keeping, observing or performing
any term, covenant, agreement, provision, condition or limitation contained in
this Lease and, if in default, specifying each such default, (b) either party
is holding any funds under this Lease in which the other has an interest (and,
if so, specifying the party holding such funds and the nature and amount
thereof), and (c) there is any amount then due and payable to either party to
the other and (v) to the knowledge of the signer of such statement, any other
factual statement in connection with this Lease, it being intended that any
such statement delivered pursuant to this Section may be relied upon by Lessor
or Lessee and any party with whom it is dealing.

25.                                 HOLDOVER
TENANCY:

If Lessee holds
possession of the Premises after the Expiration Date of this Lease, Lessee
shall become a tenant from month to month under the provisions herein provided,
but at one hundred fifty percent (150%) of the monthly Fixed Basic Rent for the
last month of the Term plus the Additional Rent, for the first six (6) months
of Lessee’s holding over and two hundred percent (200%) of the monthly Fixed
Basic Rent for the last month of the Term thereafter, plus the Additional Rent,
which shall continue as provided in the Lease which sum shall be payable in
advance on the first day of each month, and without the requirement for demand
or notice by Lessor to Lessee demanding delivery of possession of said
Premises, and such tenancy shall continue until terminated by Lessor, or until
Lessee shall have given to Lessor, at least thirty (30) days prior to the
intended date of termination, a written notice of intent to terminate such tenancy,
which termination data must be as of the end of a calendar month Lessee’s
obligations under this Section shall survive the expiration or sooner
termination of the Lease.  The time
limitations described in this Article shall not be subject to extension for
Force Majeure.

26.                                 RIGHT
TO SHOW PREMISES:

Lessor may show the
Premises to prospective purchasers and mortgagees; and during the twelve (12)
months prior to termination of this Lease, to prospective tenants, during
Building Hours on reasonable notice to Lessee, during reasonable times and on
the condition that Lessor is accompanied by a representative of Lessee, Lessee
shall make such representative available to Lessor upon reasonable notice.

 

41

 

27.                                 LESSOR’S
WORK - LESSEE’S DRAWINGS:

Lessee shall accept the
Premises “as is”.  Such term shall mean
in the same condition and repair in which the prior tenant vacated such space,
and Lessee shall be responsible for any demolition and removal of any
improvements existing in the Premises in connection with the prior tenant’s
occupancy, and all other work as may be necessary to convert the Premises to
Lessee’s requirements and to comply with any and all requirements of
Governmental Authority, except as specifically set forth herein.  Lessor shall not be responsible for
performing any work with respect to such space, except that Lessor shall
perform such work in the Building as may be required to deliver the Building to
Lessee in good operating condition and such other work as Lessor shall
determine is reasonably necessary upon review of the due diligence materials
Lessor has prepared or caused to be prepared for the Premises.  Lessor shall deliver copies of the due
diligence materials to Lessee.  The cost
of such work shall be included in the calculations set forth in the Rent Rider
attached hereto and in the determination of the Fixed Basic Rent.  Any work, changes or improvements made to
such space shall be performed at Lessee’s expense in accordance with the terms of
this Lease, including Exhibit C attached hereto and made a part hereof.

28.                                 WAIVER
OF TRIAL BY JURY:

To the extent such waiver
is permitted by law, the parties waive trial by jury in any action or
proceeding brought in connection with this Lease or the Premises.

29.                                 LATE
CHARGE:

Anything in this Lease to
the contrary notwithstanding, at Lessor’s option, Lessee shall pay a Late
Charge of five percent (5%) of any installment of Fixed Basic Rent or
Additional Rent paid more than ten (10) days after the due date thereof, to
cover the extra expense involved in handling delinquent payments, said Late
Charge to be considered Additional Rent. 
The amount of the Late Charge to be paid by Lessee shall be reassessed
and added to Lessee’s obligations for each successive monthly period until
paid.

Notwithstanding anything
in this Article to the contrary, Lessor shall waive a Late Charge one time
during each Lease Year provided, however, the installment of Fixed Basic Rent
or Additional Rent so due is paid by the twentieth (20th) day of the
month.  Payment received subsequent to
the twentieth (20th) of the month during these grace periods shall require a
Late Charge to be reassessed and added to Lessee’s obligations hereunder.

30.                                 LESSEE’S
INSURANCE:

(a)                                  Lessee
covenants to provide at Lessee’s cost and expense on or before the earlier of
(i) the Commencement Date, or (ii) Lessee’s taking actual possession for the
purpose of completing any improvement work, and to keep in full force and
effect during the entire Term and so long thereafter as Lessee, or anyone
claiming by, through or under Lessee, shall occupy the Premises, insurance
coverage as follows:

 

42

 

(i)                                     Commercial General
Liability Insurance with contractual liability endorsements with respect to the
Premises and the business of Lessee in which Lessee shall be adequately covered
under limits of liability of not less than $2,000,000 for injury or death to
any one person and $5,000,000 for injury or death to more than one person and
$1,000,000 with respect to property damage.

(ii)                                  Fire and Extended
Coverage, Vandalism, Malicious Mischief, Sprinkler Leakage and Special Extended
Coverage Insurance in an amount adequate to cover the cost of replacement of
all Lessee’s personal property and personal property leased by Lessee,
decoration, trade fixtures, furnishings, equipment in the Premises and all
contents therein.  Lessor shall not be
liable for any damage to such property of Lessee by fire or other peril.

(iii)                               Worker’s Compensation
Insurance in the minimum statutory amount covering all persons employed by
Lessee.

(iv)                              Said limits shall be
subject to periodic review and Lessor reserves the right to increase said
coverage limits if, in the reasonable opinion of Lessor, said coverage becomes
inadequate and is less than that commonly maintained by tenants in similar
buildings in the area by tenants making similar uses.  On or before the Commencement Date, and
thereafter at Lessor’s request, Lessee shall provide Lessor evidence of the
insurance coverage required herein in the form of a duplicate original
insurance policy, an insurance binder (countersigned by the insurer), or
Evidence of Insurance (in form ACORD 27) for each of the insurance policies
Lessee is required to carry in compliance with its obligations under this
Lease.

(v)                                 If at any time during
the term of this Lease, Lessee owns or rents more than one location, its
liability policy shall contain an endorsement to the effect that the aggregate
limit in the policy shall apply separately to each location owned or rented by
Lessee.

(b)                                 All
of the aforesaid insurance shall (i) name Lessor as an additional insured on a
primary basis (except with respect to the coverages set forth in clause
30(a)(ii) and 30(a)(iii)); (ii) shall be written by one or more responsible
insurance companies licensed in the State of New Jersey satisfactory to Lessor
and in form satisfactory to Lessor; (iii) contain endorsements substantially as
follows:

“It is understood and agreed that the insurer will
give to Lessor (or any successor Lessor), c/o Mack-Cali Realty Corporation, 11
Commerce Drive, Cranford, New Jersey, thirty (30) days prior written notice of
any material change in or cancellation of this policy.”

and (iv) shall be
written on an “occurrence” basis and not on a “claims made” basis.

 

43

 

(c)                                  Lessee
shall be solely responsible for payment of premium and Lessor (or its designee)
shall not be required to pay any premium for such insurance.  Lessee shall deliver to Lessor on or before
the Commencement Date, and at least fifteen (15) days prior to the expiration
of such policy, either a duplicate original or an insurance certificate it
being the intention of the parties hereto that the insurance required under the
terms hereof shall be continuous during the entire Term of this Lease and any
other period of time during which pursuant to the Term hereof, said insurance
is required.  Any insurance carried by
Lessee shall be in excess of and will not contribute with the insurance carried
by Lessor for injuries or damage arising out of the Premises.

(d)                                 Lessee
agrees, at its own cost and expense, to comply with all rules and regulations
of the National Fire Protection Association (NFPA) National Fire Code with
respect to its use and occupancy of the Premises.

(e)                                  Lessor
makes no representation that the limits of liability specified to be carried by
Lessee or Lessor under the terms of this Lease are adequate to protect Lessee
against Lessee’s undertaking under this Article 30, and in the event Lessee
believes that any such insurance coverage called for under this Lease is
insufficient, Lessee shall provide, at is own expense, such additional
insurance as Lessee deems adequate.

(f)                                    In
the event the Premises or its contents are damaged or destroyed by fire or
other insured casualty, (i) Lessor hereby waives its rights, if any, against
Lessee with respect to such damage or destruction, even if said fire or other
casualty shall have been caused, in whole or in part, by the negligence of
Lessee, and (ii) Lessee hereby waives its rights, if any, against Lessor with
respect to such damage, or destruction, even if said fire or other casualty
shall have been caused, in whole or in part, by the negligence of Lessor, provided,
however, such waivers of subrogation shall only be effective with respect to
loss or damage occurring during such time as Lessor’s or Lessees policies of
fire insurance (as the case may be) shall contain in clause or endorsement
providing in substance that the aforesaid waiver of subrogation shall not
prejudice the type and amount of coverage under such policies or the right of
Lessor or Lessee (as the case may be) to recover thereunder.  If, at any time, Lessor’s or Lessee’s
insurance carrier refuses to write insurance which contains a consent to the
foregoing waiver of subrogation, Lessor or Lessee, as the case may be, shall
notify the party thereof in writing, and upon the giving of such notice, the
provisions of this Section shall be null and void as to any casualty which
occurs after such notice.  If Lessor’s or
Lessee’s insurance carrier shall make a charge for the incorporation of the
aforesaid waiver of subrogation in its policies, then the party requesting the
waiver shall promptly pay such charge to the other party upon demand.  In the event the party requesting their
waiver fails to pay such charge upon demand, the other party shall be released
of its obligation to supply such waiver.

 

44

 

31.                                 NO
OTHER REPRESENTATIONS:

No representations or
promises shall be binding on the parties hereto except those representations
and promises contained herein or in some future writing signed by the party
making such representation(s) or promise(s).

32.                                 QUIET
ENJOYMENT:

Lessor covenants that if,
and so long as, Lessee pays Fixed Basic Rent, and any Additional Rent as herein
provided, and performs Lessee’s covenants hereof, Lessor shall do nothing to
affect Lessee’s right to peaceably and quietly have, hold and enjoy the
Premises for the Term herein mentioned, subject to the provisions of this
Lease.

33.                                 INDEMNITY:

Subject to Section 30f of
this Lease, Lessee shall indemnify and save harmless Lessor and its agents
against and from:  (a) any and all claims
(i) arising from (x) the conduct or management by Lessee, its subtenants,
licensees, its or their employees, agents, contractors or invitees on the
Premises or of any business therein, or (y) any work or thing whatsoever done,
or any condition created (other than by Lessor for Lessor’s or Lessee’s
account) in or about the Premises during the Term of this Lease or during the
period of time, if any, prior to the Commencement Date that Lessee may have
been given access to the Premises, or (ii) arising from any negligent or
otherwise wrongful act or omission of Lessee or any of its subtenants or
licensees or its or their employees, agents, contractors or invitees, and (b)
all costs, expenses and liabilities incurred in or in connection with each such
claim, action or proceeding brought thereon. 
In case any action or proceeding be brought against Lessor by reason of
any such claim, Lessee, upon notice from Lessor, shall resist and defend such
action or proceeding.

Subject to Section 30f of
this Lease, Lessor shall indemnify and save harmless Lessee and its agents
against and from:  (a) any and all claims
(i) arising from (x) the conduct of management by Lessor, its employees,
agents, contractors or invitees, or their employees, agents, contractors or
invitees on the Premises, or (y) any work or thing whatsoever done, or any
condition created (other than by Lessee) in or about the Premises during the
Term of this Lease, or (ii) arising from any negligent or otherwise wrongful
act or omission of Lessor or any of its employees, agents, contractors, or
invitees, or their employees, agents, contractors or invitees, and (b) all
costs, expenses and liabilities incurred in or in connection with each such
claim, action or proceeding brought thereon. 
In case any action or proceeding be brought against Lessee by reason of
any such claim, Lessor, upon notice from Lessee, shall resist and defend such
action or proceeding.

34.                                 ARTICLE
HEADINGS:

The article headings in
this Lease and position of its provisions are intended for convenience only and
shall not be taken into consideration in any construction or interpretation of
this Lease or any of its provisions.

 

45

 

35.                                 APPLICABILITY
TO HEIRS AND ASSIGNS:

The provisions of this
Lease shall apply to, bind and inure to the benefit of Lessor and Lessee, and
their respective heirs, successors, legal representatives and assigns.  It is understood that the term “Lessor” as
used in this Lease means only the owner, a mortgagee in possession or a term lessee
of the Building, so that in the event of any sale of the Building or of any
lease thereof, or if a mortgagee shall take possession of the Premises, the
Lessor herein shall be and hereby is entirely freed and relieved of all
covenants and obligations of Lessor hereunder accruing thereafter, and it shall
be deemed without further agreement that the purchaser, the term lessee of the
Building, or the mortgagee in possession has assumed and agreed to carry out
any and all covenants and obligations of Lessor hereunder.

36.                                 PARKING:

Lessee’s occupancy of the
Premises shall include the use of the outside parking spaces only as set forth
in the Preamble, all of which will be unassigned The parking spaces may be used
only by the Lessee and invitees of Lessee at any and all times.  Prior to the Additional Premises Commencement
Date, Lessee shall comply with such reasonably prescribed rules and regulations
of Lessor with respect to the parking areas.

37.                                 LESSOR’S
LIABILITY FOR LOSS OF PROPERTY:

Lessor shall not be
liable for any loss of property from any cause whatsoever, including but not
limited to theft or burglary from the Premises, and any such loss arising from
the negligence of Lessor, its agents, servants or invitees, or from defects,
errors or omissions in the construction or design of the Premises and/or the
Building, including the structural and non-structural portions thereof, and
Lessee covenants and agrees to make no claim for any such loss at any time.

38.                                 PARTIAL
INVALIDITY:

If any of the provisions of
this Lease, or the application thereof to any person or circumstances, shall to
any extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such provision or provisions to persons or circumstances other
than those as to whom or which it is held invalid or unenforceable, shall not
be affected thereby, and every provision of this Lease shall be valid and
enforceable to the fullest extent permitted by law.

39.                                 LESSEE’S
BROKER:

Lessor and Lessee each
represents and warrant to the other party that the broker, as defined in the
Preamble is the sole broker with whom each party has negotiated in bringing
about this Lease and each party agrees to indemnify and hold the other party
and Lessor’s mortgagee(s) harmless from any and all claims of other brokers and
expenses in connection therewith arising out of or in connection with the
negotiation of or the entering into this Lease by Lessor and Lessee.  In no event shall Lessor’s mortgagee(s) have
any obligation to any broker involved in this transaction.

 

46

 

40.                                 PERSONAL
LIABILITY:

Notwithstanding anything
to the contrary provided in this Lease, it is specifically understood and
agreed, such agreement being a primary consideration for the execution of this
Lease by Lessor, that there shall be absolutely no personal liability on the
part of Lessor’s constituent members (to include but not be limited to,
officers, directors, partners and trustees) their respective successors,
assigns or any mortgagee in possession (for the purposes of this Article,
collectively referred to as “Lessor”), with respect to any of the terms,
covenants and conditions of this Lease, and that Lessee shall look solely to
the equity of Lessor in the Building for the satisfaction of each and every
remedy of Lessee in the event of any breach by Lessor of any of the terms,
covenants and conditions of this Lease to be performed by Lessor, such
exculpation of liability to be absolute and without any exceptions whatsoever.

Notwithstanding anything
to the contrary provided in this Lease, it is specifically understood and
agreed, such agreement being a primary consideration for the execution of this
Lease by Lessee, that there shall be absolutely no personal liability on the part
of Lessee’s officers, directors, partners, shareholders and trustees and their
respective successor with respect to any of the terms, covenants and conditions
of this Lease.

41.                                 NO
OPTION:

The submission of this
Lease Agreement for examination does not constitute a reservation of, or option
for, the Premises, and this Lease Agreement becomes effective as a Lease
Agreement only upon execution and delivery thereof by Lessor and Lessee.

42.                                 DEFINITIONS:

(a)                                  Affiliate — Affiliate shall mean any
corporation or other entity related to Lessee as a parent, subsidiary or
brother-sister corporation so that such corporation or other entity and such
party and other corporations or other entities constitute a controlled group as
determined under Section 1563 of the Internal Revenue Code of 1986, as amended
and as elaborated by the Treasury Regulations promulgated thereunder or any
business entity in which Lessee has more than a fifty percent (50%) interest.

(b)                                 Building Systems — Any and all of the
following:  (a) the elevators of the
Building; (b) the core toilets and utility closets of the Building; and (c) the
heating, air conditioning, ventilating, mechanical, condenser water, plumbing,
domestic water, sanitary, sprinkler (but not sprinkler heads or related horizontal
piping), fire control and alarm and life safety and security systems of the
Building and other systems of the Building.

(c)                                  Common Areas — shall include all that
area outside the Building including but not limited to parking areas,
sidewalks, curbs, grounds, on site water lines, electric lines, gas lines,
sanitary sewer lines and storm water lines, and roadways associated with the
Property.

 

47

 

(d)                                 Force Majeure — Force Majeure shall
mean and include those situations beyond Lessor’s reasonable control, including
by way of example and not by way of limitation, acts of God; strikes; shortages
of labor, supplies or materials; or, where applicable, the passage of time
while waiting for an adjustment or insurance proceeds.  Any time limits required to be met by either
party hereunder, whether specifically made subject to Force Majeure or not,
except those related to the payment of Fixed Basic Rent or Additional Rent,
shall, unless specifically stated to the contrary elsewhere in this Lease, be
automatically extended by the number of days by which any performance called
for is delayed due to Force Majeure.

(e)                                  Governmental Authority — “Governmental
Authority” shall mean any Federal, state or local government or any department,
political subdivision, bureau, agency, office or officer thereof, or any other
governmental authority having jurisdiction over the requirements of every
statute, law, ordinance, regulation, rule requirement, order or directive, now
or hereafter made by such Federal, state or local government or any department,
political subdivision, bureau, agency, office or officer thereof.

(f)                                    Lessee’s Percentage — The parties agree
that Lessee’s Percentage, as defined in the Preamble, reflects and will be continually
adjusted to reflect the ratio of the gross square feet of the area rented to
Lessee [the numerator] as compared with the total number of gross square feet
of the Building Area (or additional buildings that may be constructed within
the Property) [the denominator] measured outside wall to outside wall.

43.                                 LEASE
COMMENCEMENT:

Notwithstanding anything
contained herein to the contrary, except as provided in Section 27, if
Lessor cannot deliver possession of the Initial Premises or Additional
Premises, as provided for in Article 27(a), to Lessee at the commencement of
the agreed Term as set forth in Article 2, this Lease shall not be void or
voidable, nor shall Lessor be liable to Lessee for any loss or damage resulting
therefrom, but in that event, the Term shall be for the full term as specified
above to commence from and after the date Lessor shall have delivered
possession of the Initial Premises or Additional Premises to Lessee, as the
case may be, or from the date Lessor would have delivered possession of the
Initial Premises or Additional Premises to Lessee, as the case may be, but for
Lessee’s failure to timely supply to Lessor such drawings and/or information
required by Exhibit B or for any other reason attributable to Lessee (herein
the “Commencement Date”) and to expire on the Expiration Date, unless extended
by Lessee pursuant to the exercise of its Renewal Options pursuant to Article
54 hereof, and if requested by Lessor, Lessor and Lessee shall, by a writing
signed by the parties, ratify and confirm said Commencement and Expiration
Dates and Additional Premises Commencement Date.

44.                                 NOTICES:

Any notice by either
party to the other shall be in writing and shall be deemed to have been duly
given only if delivered personally or sent by registered mail, certified mail
or

 

48

 

nationally recognized
overnight delivery service return receipt requested in a postage paid envelope
addressed, if to Lessee, at the above described Building; if to Lessor, at Lessor’s
address as set forth above; or, to either at such other address as Lessee or
Lessor, respectively, may designate in writing. 
Notice shall be deemed to have been duly given, if delivered personally,
on delivery thereof, and if mailed, upon a party’s receipt or rejection as
evidenced by a bill of lading, return receipt or upon delivery if personally
served.

45.                                 ACCORD
AND SATISFACTION:

No payment by Lessee or
receipt by Lessor of a lesser amount than the rent and additional charges
payable hereunder shall be deemed to be other than a payment on account of the
earliest stipulated Fixed Basic Rent and Additional Rent, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment for Fixed Basic Rent or Additional Rent be deemed an accord and
satisfaction, and Lessor may accept such check or payment without prejudice to
Lessor’s right to recover the balance of such Fixed Basic Rent and Additional
Rent or pursue any other remedy provided herein or by law.

46.                                 EFFECT
OF WAIVERS:

No failure by Lessor to
insist upon the strict performance of any covenant, agreement, term or
condition of this Lease, or to exercise any right or remedy consequent upon a
breach thereof, and no acceptance of full or partial rent by Lessor during the
continuance of any such breach, shall constitute a waiver of any such breach or
of such covenant, agreement, term or condition. 
No consent, or waiver, express or implied, by Lessor to or of any breach
of any covenant, condition or duty of Lessee be construed as a consent or
waiver to or of any other breach of the same or any other covenant, condition
or duty, unless in writing signed by Lessor.

47.                                 LEASE
CONDITION:

Intentionally omitted.

48.                                 MORTGAGEE’S
NOTICE AND OPPORTUNITY TO CURE:

Lessee agrees to give any
mortgagees and/or trust deed holders, by registered mail, a copy of any notice
of default served upon Lessor, provided that, prior to such notice, Lessee has
been notified in writing (by way of notice of assignment of rents and leases or
otherwise) of the address of such mortgagees and/or trust deed holders.  Lessee further agrees that, if Lessor shall
have failed to cure such default within the time provided for in this Lease,
then the mortgagees and/or trust deed holders shall have an additional thirty
(30) days within which to cure such default, or if such default cannot be cured
within that time, then such additional time as may be necessary (but not to
exceed ninety (90) days), if within such thirty (30) days, any mortgagee and/or
trust deed holder has commenced and is diligently pursuing the remedies
necessary to cure such default, in which event this Lease shall not be
terminated while such remedies are diligently pursued to completion.

 

49

 

49.                                 LESSOR’S
RESERVED RIGHT:  [INTENTIONALLY
OMITTED]

50.                                 CORPORATE
AUTHORITY:

If Lessee is a
corporation, Lessee represents and warrants that this Lease and has been duly
authorized and approved by the corporation’s Board of Directors.  The undersigned officers and representatives
of the corporation represent and warrant that they are officers of the
corporation with authority to execute this Lease on behalf of the corporation,
and within fifteen (15) days of execution hereof, Lessee will provide Lessor with
a corporate resolution confirming the aforesaid.  Lessee hereby warrants and covenants to and
for the benefit of Lessor as follows: 
(a) Lessee and each of its subsidiaries, predecessors, agents, direct
and indirect owners and their respective affiliates has at all applicable times
been, is now and will in the future be, in compliance with U.S. Executive Order
13224 and no action, proceeding, investigation, charge, claim, report or notice
has been filed, commenced or threatened against any of them alleging any
failure to so comply; (b) neither Lessee nor any Guarantor or any of their
respective agents, subsidiaries or other affiliates has, after due
investigation and inquiry, knowledge or notice of any fact, event,
circumstance, situation or condition which could reasonably be expected to
result in (i) any action, proceeding, investigation, charge, claim, report or
notice being filed, commenced or threatened against any of them alleging any
failure to comply with the Order, or (ii) the imposition of any civil or
criminal penalty against any of them for any failure to so comply; (c) the
names, addresses, and in the case of entities, jurisdiction of formation or
organization, as the case may be, of Lessee and each Guarantor and the
predecessors, agents, subsidiaries, direct and indirect owners, and affiliates
of each of them are set forth on the attached Exhibit H (titled “Executive
Order 13224 Compliance Information”), and none of them are included in the
United States Treasury Department’s Office of Foreign Assets Control list; and
(d) prior to any changes in direct or indirect ownership of Lessee or any
Guarantor, Lessee shall give written notice to Lessor signed by Lessee and each
Guarantor (i) advising Lessor in reasonable detail as to the proposed ownership
change, and (ii) affirming that the representations and warranties herein
contained will remain true and correct.

Lessor represents and
warrants that the corporate officer set forth below has the authority to enter
into this Lease.

51.                                 LESSEE’S EXPANSION/RELOCATION:

Intentionally omitted.

52.                                 MISCELLANEOUS:

(a)                                  No
Underground Storage Tanks:  Lessee
warrants and represents that it will, at no time, install any underground
storage tanks anywhere in the Premises or on the Property.  A breach of this covenant shall be deemed a
default under the Lease, and Lessor shall have the right to terminate the Lease
upon the happening of such event.

 

50

 

(b)                                 Refuse
Removal:  Lessor, at Lessee’s sole cost
and expense, shall be responsible for removal of Lessee’s trash from the
Premises and discharge of same to the dumpsters located in the rear parking
lot.  Lessor, at Lessee’s sole cost and
expense, shall also be responsible for having the trash removed from the
dumpsters.

(c)                                  Lessor’s
Consent:  If Lessee believes that the
Lessor has unreasonably withheld its consent and/or delayed its consent, then
Lessee’s sole remedy shall be to seek specific performance.  The Lessee shall have no right to seek money
damages.  Lessee’s waiver as to no other
claims or causes of action as a result of Lessor’s actions in refusing to
consent hereunder shall not apply if it is judicially determined that Lessor
acted in bad faith or maliciously with respect to its refusal to consent
hereunder.  The parties agree that the
question of Lessor’s reasonableness in refusing to consent hereunder may be
submitted to expedited arbitration in accordance with the rules of the office
of the American Arbitration Association (or any successor) within or nearest to
Union County, New Jersey.

(d)                                 Overtime
HVAC:  Lessee shall be entitled to make
use of the HVAC system beyond the Building Hours (as defined below), at Lessee’s
sole cost and expense.  The parties shall
establish a protocol to determine how to measure the number of hours Lessee is
using overtime HVAC service.  It is
understood and agreed that Lessee shall pay the sum of TWELVE AND 50/100
DOLLARS ($12.50) per hour per pod for air conditioning or heating services.  In addition, Lessee shall pay the cost of labor
and maintenance of the HVAC system and utilities servicing the HVAC system in
accordance with this Lease.  The Building
contains four (4) pods as shown on Exhibit A.

In no event shall
the Lessee pay less than the sum of TWELVE AND 50/100 DOLLARS ($12.50) per hour
per pod for such overtime air conditioning or heating service.

Building
Hours — Monday through Friday, 8:00 a.m. to 6:00 p.m.,
and Saturdays, 8:00 a.m. to 1:00 p.m., but excluding Building holidays as
reasonably determined by Lessor from time to time.

(e)                                  Multi
tenanted:  The parties acknowledge that
the Building will be multi-tenanted for approximately one (1) year during the
initial Term.  During such period, Lessee
shall reasonably cooperate with Lessor to enable Lessor to manage the Building
in a first class manner, including obeying such reasonable rules and
regulations as may be necessary to operate the common areas of the Building, if
any, and the Property.

(f)                                    Within
ten (10) business days after Lessor’s request, Lessee shall provide Lessor with
Lessee’s then current audited financial statements, if available, and if not
available, the then current income statement and balance sheet, certified by
Lessee’s Chief Financial Officer or Lessee’s most highly ranked financial
officer.  Lessor shall execute a
commercially reasonable confidentiality agreement within

 

51

 

which Lessor agrees to only share such information for a legitimate
business purpose, e.g. financing of the Property.

53.                                 PURCHASE
CONTINGENCY:

This Lease is contingent
upon Lessor acquiring the Property and Building within forty-five (45)
days after the date of execution and delivery of this Lease by Lessor and
Lessee.  If Lessor fails to acquire the
Property and Building within such forty-five (45) day period, then this
Lease shall be null and void and of no further force or effect and neither
party shall have further liability to the other.

54.                                 RENEWAL
OPTION:

(a)                                  If
the term of this Lease shall then be in full force and effect and Lessee has
complied fully with its obligations hereunder, Lessee shall have the option to
extend the term of this Lease for two (2) successive periods of five (5) years
each (the first five (5) year period being hereafter referred to as the “First
Renewal Term” and the second five (5) year period being hereafter referred to
as the “Second Renewal Term”) commencing on the day immediately following the
Expiration Date of the initial Term or First Renewal Term, as the case may be,
provided however that Lessee shall give Lessor notice of its election to extend
the term no earlier than twenty-one (21) months prior to the applicable
Expiration Date nor later than fifteen (15) months prior to the applicable
Expiration Date, TIME BEING OF THE ESSENCE
in connection with the exercise of each of Lessee’s options pursuant to this
Article.

(b)                                 Such
extension of the term of this Lease shall be upon the same covenants and
conditions, as herein set forth except for the Fixed Basic Rent (which shall be
determined in the manner set forth below), and except that Lessee shall have no
further right to extend the term of this Lease after the exercise of the second
option described in paragraph (a) of this Section.  If Lessee shall duly give notice of its
election to extend the term of this Lease, the First Renewal Term or the Second
Renewal Term, as the case may be, shall be added to and become a part of the
Term of this Lease (but shall not be considered a part of the initial Term),
and any reference in this Lease to the “Term of this Lease”, the “Term hereof”,
or any similar expression shall be deemed to include such renewal term, and, in
addition, the term “Expiration Date” shall thereafter mean the last day of the
applicable renewal term.  During the
First Renewal Term or the Second Renewal Term, Lessor shall have no obligation
to perform any alteration or preparatory or other work in and to the Premises
and Lessee shall continue possession thereof in its “as is” condition.

(c)                                  If
Lessee exercises its option for the either renewal term, the Fixed Basic Rent
during the First Renewal Term or the Second Renewal Term, as the case may be,
shall be ninety-five percent (95%) of the fair market rent for the
Premises, as hereinafter defined.

 

52

 

(d)                                 Lessor
and Lessee shall use their best efforts, within thirty (30) days after Lessor
receives Lessee’s notice of its election to extend the Term of this Lease (“Negotiation
Period”), to agree upon the Fixed Basic Rent to be paid by Lessee during the
First Renewal Term or Second Renewal Term, as the case may be.  If Lessor and Lessee shall agree upon the
Fixed Basic Rent for the applicable renewal term, the parties shall promptly
execute an amendment to this Lease stating the Fixed Basic Rent for the
applicable renewal term.

(e)                                  If
the parties are unable to agree on the Fixed Basic Rent during the Negotiation
Period, then within fifteen (15) days after notice from the other party, given
after expiration of the Negotiation Period, each party, at its cost and upon
notice to the other party, shall appoint a person to act as an appraiser
hereunder, to determine the fair market rent for the Premises.  Each such person shall be a real estate
broker or appraiser with at least ten years’ active commercial real estate
appraisal or brokerage experience (involving the leasing of office space as
agent for both landlords and lessees) in the County of Monmouth.  If a party does not appoint a person to act
as an appraiser within said fifteen (15) day period; the person appointed by
the other party shall be the sole appraiser and shall determine the aforesaid
fair market rent.  Each notice containing
the name of a person to act as appraiser shall contain also the person’s
address.  Before proceeding to establish
the fair market rent, the appraisers shall subscribe and swear to an oath
fairly and impartially to determine such rent.

If the two appraisers are
appointed by the parties as stated in the immediately preceding paragraph, they
shall meet promptly and attempt to determine the fair market rent.  If they are unable to agree within forty-five
(45) days after the appointment of the second appraiser, they shall attempt to
select a third person meeting the qualifications stated in the immediately
preceding paragraph within fifteen (15) days after the last day the two
appraisers are given to determine the fair market rent.  If they are unable to agree on the third
person to act as appraiser within said fifteen (15) day period, the third
person shall be appointed by the American Arbitration Association (the “Association”),
upon the application of Lessor or Lessee to the office of the Association
nearest the Building. The person appointed to act as appraiser by the
Association shall be required to meet the qualifications stated in the
immediately preceding paragraph.  Each of
the parties shall bear fifty percent (50%) of the cost of appointing the third
person and of paying the third person’s fees. 
The third person, however selected, shall be required to take an oath
similar to that described above.

The third appraiser shall
conduct such hearing and investigations as he may deem appropriate and shall,
within thirty (30) days after the date of his appointment, determine the fair
market rent by selecting the fair market rent determined by either the
appraiser selected by Lessor or the appraiser selected by Lessee.  The third appraiser shall have no discretion
other than to choose the fair market rent determined by one of the other two
appraisers by the process commonly known as “baseball arbitration”.

 

53

 

Notwithstanding the
foregoing, in no event shall (i) the Fixed Basic Rent during the First Renewal
Term be less than the Fixed Basic Rent during the last year of the initial Term
of this Lease and (ii) the Fixed Basic Rent during the Second Renewal Term be
less than the Fixed Basic Rent during the last year of the First Renewal Term.

(f)                                    After
the fair market rent has been determined by the appraiser or appraisers and the
appraiser or appraisers shall have notified the parties, at the request of
either party, both parties shall execute and deliver to each other an amendment
of this Lease stating the Fixed Basic Rent for the First Renewal Term or the
Second Renewal Term, as the case may be.

(g)                                 If
the Fixed Basic Rent for the First Renewal Term has not been agreed to or
established prior to the commencement of First Renewal Term, then Lessee shall
pay to Lessor an annual rent (“Temporary Rent”) which Temporary Rent shall be
equal to one hundred percent (100%) of the Fixed Basic Rent payable by Lessee
for the last year of the initial Term. 
If the Fixed Basic Rent for the Second Renewal Term has not been agreed
to or established prior to the commencement of Second Renewal Term, then Lessee
shall pay to Lessor an annual rent (“Temporary Rent”) which Temporary Rent
shall be equal to one hundred percent (100%) of the Fixed Basic Rent payable by
Lessee for the last year of the First Renewal Term.  Thereafter, if the parties shall agree upon a
Fixed Basic Rent, or the Fixed Basic Rent shall be established upon the
determination of the fair market rent by the appraiser or appraisers, at a rate
at variance with the Temporary Rent (i) if such Fixed Basic Rent is greater
than the Temporary Rent, Lessee shall promptly pay to Lessor the difference
between the Fixed Basic Rent determined by agreement or the appraisal process
and the Temporary Rent, or (ii) if such Fixed Basic Rent is less than the
Temporary Rent, Lessor shall promptly pay to Lessee to Lessee’s subsequent
monthly installments of Fixed Basic Rent the difference between the Temporary
Rent and the Fixed Basic Rent determined by agreement or the appraisal process.

(h)                                 In
describing the fair market rent, the appraiser or appraisers shall be required
to take into account the rentals at which leases are then being concluded (as
of the last day of the initial Term for the First Renewal Term and as of the
last day of the First Renewal Term for the Second Renewal Term) (for five (5)
year leases without renewal options with the lessor and lessee each acting
prudently, with knowledge and for self-interest, and assuming that neither is
under undue duress) for comparable space in the Building and in comparable
office buildings in the County of Monmouth.

(i)                                     The
option granted to Lessee under this Article 54 may be exercised only by Lessee,
its affiliates, permitted successors and assigns, and not by any subtenant or
any successor to the interest of Lessee by reason of any action under the
Bankruptcy Code, or by any public officer, custodian, receiver, United States
Trustee, trustee or liquidator of Lessee or substantially all of Lessee’s
property.  Lessee shall have no right to
exercise this option subsequent to the date Lessor

 

54

 

shall have the right to give the notice of termination referred to in
Article 13 of the Lease unless Lessee cures the default within the applicable
grace period.  Notwithstanding the
foregoing, Lessee shall have no right to extend the term if, at the time it
gives notice of its election (i) Lessee shall not be in occupancy of at least
seventy-five percent (75%) of the Building or (ii) more than twenty-five
percent (25%) of the Building shall be the subject of a sublease.

55.                                 SIGNAGE:

Lessor shall, at Lessee’s
sole cost and expense, include Lessee’s name and any other names designated by
Lessee on the entrance doors to the Building. 
The Building shall be named for Lessee or, at Lessee’s option, any
affiliate of Lessee and a sign to that effect, reasonably acceptable to Lessor
and Lessee shall, at Lessee’s option, be placed on the front of the Building
and at the vehicular entrance of the Property. 
The rights of Lessee contained in this Section shall also apply to any
subtenant of all or substantially all of the Premises.  Except for the signs provided in this Section
(a) no other identification signs shall be placed by Lessor outside or on the
Building or in the lobby of the Building (other than names on the lessee
directory or entrance doors to lessee space) and (b) Lessee shall not place or
suffer to be placed or maintain any sign, awning or canopy upon or outside the
Premises or in the Building; nor shall Lessee place at the store front any
sign, decoration, lettering or advertising matter of any kind without first
obtaining Lessor’s written approval and consent in each instance.  All signs shall be of a size, color and
design as is reasonably approved in writing by Lessor and maintained by Lessor
in good condition, repair and appearance at all times, according to Lessor’s
standards and the laws of the municipality having jurisdiction over such
signs.  If Lessor shall deem it necessary
to remove any sign in order to paint or to make any repairs, alterations or
improvements in or upon the Premises or any part thereof, Lessor shall have the
right to do so, provided the same be removed and replaced at Lessor’s cost and
expense unless having been occasioned by fault of Lessee.  Lessor shall have the right, with or without
notice to Lessee, to remove any signs (paper or otherwise) installed by Lessee
in violation of this paragraph and to charge Lessee the cost of such removal
without liability to Lessee for such removal. 
Notwithstanding the foregoing, from and after the Additional Premises
Commencement Date, Lessee’s rights hereunder shall only be in effect during
such time that Lessee leases at least eighty percent (80%) of the entire
Building.  At such time that Lessee does
not lease at least eighty percent (80%) of the entire Building, Lessor shall
promulgate such reasonable signage rules and regulations as Lessor deems
necessary.

56.                                 GENERATOR:

Lessor acknowledges that
Lessee, at its sole cost and expense, may install an emergency generator
outside of the Building or on the roof of the Building, the exact location of
which to be subject to Lessor’s prior approval, which approval shall not be
unreasonably withheld, conditioned or delayed. 
Lessee, at its sole cost, shall be responsible for obtaining any
governmental approvals necessary with respect to the installation and operation
of the generator.  Lessor shall have no
obligation to perform any maintenance or repairs with respect to the generator,
the cost of which shall be borne solely by Lessee.

 

55

 

If the generator shall be
located on the roof of the Building, the generator shall be properly screened
to Lessor’s reasonable satisfaction. 
Lessor make no representation of the suitability of the roof of the
Building for the installation thereof. 
If Lessor’s structural engineer deems it advisable that there be
structural reinforcement of the roof in connection with the installation of the
generator, Lessor shall perform same at Lessee’s cost and expense and Lessee
shall not perform any such installation prior to the completion of any such
structural reinforcement.  Lessee, at its
sole cost and expense, shall promptly repair any and all damage to the rooftop
or to any other part of the Building caused by the installation, maintenance
and repair, operation or removal of the generator.  Lessee shall be responsible for all costs and
expense for repairs of the roof which result from Lessee’s use of the roof for
the construction, installation, maintenance, repair, operation and use of the
generator.  All installations made by
Lessee on the rooftop or in any other part of the Building pursuant to the
provisions of this Article 56 shall be at the sole risk of Lessee, and neither
Lessor, nor any agent or employee of Lessor, shall be responsible or liable for
any injury or damage to, or arising out of, the generator.  Lessee’s indemnity under Article 33 shall
apply with respect to the installation, maintenance, operations, presence or
removal of the generator by Lessee.  If
the installation of the generator on the rooftop or act or omission relating
thereto should revoke, negate or in any material manner impair or limit any
roof warranty or guaranty obtained by Lessor, then Lessee shall reimburse
Lessor for any loss or damage sustained incurred by Lessor as a result of such
impairment or limitation.

EACH PARTY AGREES
that it will not raise or assert as a defense to any obligation under the Lease
or make any claim that the Lease is invalid or unenforceable due to any failure
of this document to comply with ministerial requirements including, but not
limited to, requirements for corporate seals, attestations, witnesses,
notarizations, or other similar requirements, and each party hereby waives the
right to assert any such defense or make any claim of invalidity or
unenforceability due to any of the foregoing.

IN WITNESS
WHEREOF, the parties hereto have hereunto set their hands and seals the day and
year first above written.

	
  LESSOR:

  	
   

  	
  LESSEE:

  
	
  23 MAIN STREET
  HOLMDEL ASSOCIATES LLC

  	
   

  	
  VONAGE USA INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Mack-Cali Texas
  Property L.P., sole member 

  	
   

  	
   

  
	
  By: 

  	
  Mack-Cali Sub
  XVII, Inc., general partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Mitchell E.
  Hersh

  	
  By: 

  	
  /s/ John Rego

  
	
   

  	
  Mitchell E.
  Hersh

  President and Chief Executive Officer

  	
   

  	
  Name:

  Title: CFO

  

 

 

56

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