Document:

c60096_ex10-58.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

Exhibit 10.77

WAVE2WAVE COMMUNICATIONS, INC.

2009 EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLAN

1. DEFINITIONS.

     Unless otherwise specified or unless the context otherwise requires, the following terms, as used in this Wave2Wave Communications, Inc. 2009 Employee and Director Equity Incentive Plan, have the
following meanings: 

Administrator means the Board of Directors, unless it has delegated power to act on its behalf to the Committee, in which case the Administrator means the Committee. 

Affiliate means a corporation which, for purposes of Section 424 of the Code, is a parent or subsidiary of the Company, direct or indirect. 

Agreement means an agreement between the Company and a Participant delivered pursuant to the Plan and pertaining to a Stock Right, in such form as the Administrator shall approve. 

Board of Directors means the Board of Directors of the Company. 

Cause means, with respect to a Participant (a) dishonesty with respect to the Company or any Affiliate, (b) insubordination, substantial malfeasance or non-feasance of duty, (c) unauthorized
disclosure of confidential information, (d) breach by a Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or similar agreement between the Participant and the Company or any Affiliate, and (e)
conduct substantially prejudicial to the business of the Company or any Affiliate; provided, however, that any provision in an agreement between a Participant and the Company or an Affiliate, which contains a conflicting definition of Cause for
termination and which is in effect at the time of such termination, shall supersede this definition with respect to that Participant. The determination of the Administrator as to the existence of Cause will be conclusive on the Participant and the
Company. 

Code means the United States Internal Revenue Code of 1986, as amended including any successor statute, regulation and guidance thereto. 

Committee means the committee of the Board of Directors to which the Board of Directors has delegated power to act under or pursuant to the provisions of the Plan. 

Common Stock means shares of the Company’s common stock, $0.0001 par value per share. 

Company means Wave2Wave Communications, Inc., a Delaware corporation. 

Disability or Disabled means permanent and total disability as defined in Section 22(e)(3) of the Code. 

Employee means any employee of the Company or of an Affiliate (including, without limitation, an employee who is also serving as an officer or director of the Company or of an Affiliate),
designated by the Administrator to be eligible to be granted one or more Stock Rights under the Plan. 

Exchange Act means the Securities Exchange Act of 1934, as amended. 

Fair Market Value of a Share of Common Stock means: 

     (1) If the Common Stock is listed on a national securities exchange or traded in the over-the-counter market and sales prices are regularly
reported for the Common Stock, the closing or, if not applicable, the last price of the Common Stock on the composite tape or other comparable reporting system for the trading day on the applicable date and if such applicable date is not a trading
day, the last market trading day prior to such date;

     (2) If the Common Stock is not traded on a national securities exchange but is traded on the over-the-counter market, if sales prices are not
regularly reported for the Common Stock for the trading day referred to in clause (1), and if bid and asked prices for the Common Stock are regularly reported, the mean between the bid and the asked price for the Common Stock at the close of trading
in the over-the-counter market for the trading day on which Common Stock was traded on the applicable date and if such applicable date is not a trading day, the last market trading day prior to such date; and 

     (3) If the Common Stock is neither listed on a national securities exchange nor traded in the over-the-counter market, such value as the
Administrator, in good faith, shall determine. 

ISO means an option meant to qualify as an incentive stock option under Section 422 of the Code. 

Non-Qualified Option means an option which is not intended to qualify as an ISO.

Option means an ISO or Non-Qualified Option granted under the Plan. 

Participant means an Employee or director of the Company or an Affiliate to whom one or more Stock Rights are granted under the Plan. As used herein, “Participant” shall include “Participant’s Survivors” where the context requires. 

Plan means this Wave2Wave Communications, Inc. 2009 Employee and Director Equity Incentive Plan. 

Securities Act means the Securities Act of 1933, as amended. 

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Shares means shares of the Common Stock as to which Stock Rights have been or may be granted under the Plan or any shares of capital stock into which the Shares are changed or for which they are
exchanged within the provisions of Paragraph 3 of the Plan. The Shares issued under the Plan may be authorized and unissued shares or shares held by the Company in its treasury, or both. 

Stock-Based Award means a grant by the Company under the Plan of an equity award or an equity based award which is not an Option or a Stock Grant.

Stock Grant means a grant by the Company of Shares under the Plan. 

Stock Right means a right to Shares or the value of Shares of the Company granted pursuant to the Plan -- an ISO, a Non-Qualified Option, a Stock Grant or a Stock-Based Award. 

Survivor means a deceased Participant’s legal representatives and/or any person or persons who acquired the Participant’s rights to a Stock Right by will or by the laws of descent and
distribution. 

2. PURPOSES OF THE PLAN.

     The Plan is intended to encourage ownership of Shares by Employees and directors of the Company and its Affiliates in order to attract and retain such people, to induce them to work for the benefit of
the Company or of an Affiliate and to provide additional incentive for them to promote the success of the Company or of an Affiliate. The Plan provides for the granting of ISOs, Non-Qualified Options, Stock Grants and Stock-Based Awards. 

3. SHARES SUBJECT TO THE PLAN. 

     (a) The number of Shares which may be issued from time to time pursuant to this Plan shall be the sum of: (i) 10,000,000 shares of Common Stock and (ii) any shares of Common Stock that are represented
by awards granted under the Company’s Stock Incentive Plan that are forfeited, expire or are cancelled without delivery of shares of Common Stock or which result in the forfeiture of shares of Common Stock back to the Company on or after
November 20, 2009, or the equivalent of such number of Shares after the Administrator, in its sole discretion, has interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction in accordance with
Paragraph 24 of this Plan; provided, however, that no more than 2,416,000 Shares shall be added to the Plan pursuant to subsection (ii). 

     (b) Notwithstanding Subparagraph (a) above, on the first day of each fiscal year of the Company during the period beginning in fiscal year 2011, and ending on the second day of fiscal year 2019, the
number of Shares that may be issued from time to time pursuant to the Plan, shall be increased by an amount equal to the lesser of (i) 2,320,000 or the equivalent of such number of Shares after the Administrator, in its sole discretion, has
interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction in accordance 

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with Paragraph 24 of the Plan; (ii) 3% of the number of outstanding shares of Common Stock on such date; and (iii) an amount determined by the Board of Directors.

     (c) If an Option ceases to be “outstanding”, in whole or in part (other than by exercise), or if the Company shall reacquire (at not more than its original issuance price) any Shares issued
pursuant to a Stock Grant or Stock-Based Award, or if any Stock Right expires or is forfeited, cancelled, or otherwise terminated or results in any Shares not being issued, the unissued or reacquired Shares which were subject to such Stock Right
shall again be available for issuance from time to time pursuant to this Plan. Notwithstanding the foregoing, if a Stock Right is exercised, in whole or in part, by tender of Shares or if the Company or an Affiliate’s tax withholding obligation
is satisfied by withholding Shares, the number of Shares deemed to have been issued under the Plan for purposes of the limitation set forth in Paragraph 3(a) above shall be the number of Shares that were subject to the Stock Right or portion
thereof, and not the net number of Shares actually issued. 

4. ADMINISTRATION OF THE PLAN.

     The Administrator of the Plan will be the Board of Directors, except to the extent the Board of Directors delegates its authority to the Committee, in which case the Committee shall be the
Administrator. Subject to the provisions of the Plan, the Administrator is authorized to: 

     (a) Interpret the provisions of the Plan and all Stock Rights and to make all rules and determinations which it deems necessary or advisable
for the administration of the Plan; 

     (b) Determine which Employees and directors shall be granted Stock Rights; 

     (c) Determine the number of Shares for which a Stock Right or Stock Rights shall be granted, provided, however, that in no event shall Stock
Rights with respect to more than 3,000,000 Shares be granted to any Participant in any fiscal year; 

     (d) Specify the terms and conditions upon which a Stock Right or Stock Rights may be granted;

     (e) Make changes to any outstanding Stock Right, including, without limitation, to reduce or increase the exercise price or purchase price,
accelerate the vesting schedule or extend the expiration date, provided that no such change shall impair the rights of a Participant under any grant previously made without such Participant’s consent;

     (f) Buy out for a payment in cash or Shares, a Stock Right previously granted and/or cancel any such Stock Right and grant in substitution
therefor other Stock Rights, covering the same or a different number of Shares and having an exercise price or purchase price per share which may be lower or higher than the exercise price or purchase price of the cancelled Stock Right, based on
such terms and conditions as the Administrator shall establish and the Participant shall accept; and 

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     (g) Adopt any sub-plans applicable to residents of any specified jurisdiction as it deems necessary or appropriate in order to comply with or
take advantage of any tax or other laws applicable to the Company, any Affiliate or to Participants or to otherwise facilitate the administration of the Plan, which sub-plans may include additional restrictions or conditions applicable to Stock
Rights or Shares issuable pursuant to a Stock Right; 

provided, however, that all such interpretations, rules, determinations, terms and conditions shall be made and prescribed in the context of not causing any adverse tax consequences under Section 409A of the Code and preserving
the tax status under Section 422 of the Code of those Options which are designated as ISOs.  Subject to the foregoing, the interpretation and construction by the Administrator of any provisions of the Plan or of any Stock Right granted under it
shall be final, unless otherwise determined by the Board of Directors, if the Administrator is the Committee. In addition, if the Administrator is the Committee, the Board of Directors may take any action under the Plan that would otherwise be the
responsibility of the Committee.

     To the extent permitted under applicable law, the Board of Directors or the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may
delegate all or any portion of its responsibilities and powers to any other person selected by it. The Board of Directors or the Committee may revoke any such allocation or delegation at any time. Notwithstanding the foregoing, only the Board of
Directors or the Committee shall be authorized to grant a Stock Right to any director of the Company or to any “officer” of the Company (as defined by Rule 16a-1 under the Exchange Act). 

5. ELIGIBILITY FOR PARTICIPATION.

     The Administrator will, in its sole discretion, name the Participants in the Plan; provided, however, that each Participant must be an Employee or director of the Company or of an Affiliate at the
time a Stock Right is granted. Notwithstanding the foregoing, the Administrator may authorize the grant of a Stock Right to a person not then an Employee or director of the Company or of an Affiliate; provided, however, that the actual grant of such
Stock Right shall be conditioned upon such person becoming eligible to become a Participant at or prior to the time of the execution of the Agreement evidencing such Stock Right.  ISOs may be granted only to Employees who are deemed to be residents
of the United States for tax purposes. Non-Qualified Options, Stock Grants and Stock-Based Awards may be granted to any Employee or director of the Company or an Affiliate. The granting of any Stock Right to any individual shall neither entitle that
individual to, nor disqualify him or her from, participation in any other grant of Stock Rights or any grant under any other benefit plan established by the Company or any Affiliate for Employees or directors. 

6. TERMS AND CONDITIONS OF OPTIONS. 

     Each Option shall be set forth in writing in an Option Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Administrator may
provide that Options be granted subject to such terms and conditions, consistent with the terms and conditions specifically required under this Plan, as the Administrator may deem appropriate including, without limitation, subsequent approval by
the

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shareholders of the Company of this Plan or any amendments thereto. The Option Agreements shall be subject to at least the following terms and conditions: 

     (a) Non-Qualified Options: Each Option intended to be a Non-Qualified Option shall be subject to the terms and
conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject to the following minimum standards for any such Non-Qualified Option: 

	 	
(i)        	
Exercise Price: Each Option Agreement shall state the exercise price (per share) of the Shares covered by each Option, which exercise price shall be determined by the Administrator
and shall be at least equal to the Fair Market Value per share of Common Stock on the date of grant of the Option.
  
	 
	 	
(ii)        	
Number of Shares: Each Option Agreement shall state the number of Shares to which it pertains.
  
	 
	 	
(iii)        	
Option Periods: Each Option Agreement shall state the date or dates on which it first is exercisable and the date after which it may no longer be exercised, and may provide that the
Option rights accrue or become exercisable in installments over a period of months or years, or upon the occurrence of certain conditions or the attainment of stated goals or events.
  
	 
	 	
(iv)        	
Option Conditions: Exercise of any Option may be conditioned upon the Participant’s execution of a Share purchase agreement in form satisfactory to the Administrator providing
for certain protections for the Company and its other shareholders, including requirements that:
  
	 
	 	 	
A.        	
The Participant’s or the Participant’s Survivors’ right to sell or transfer the Shares may be restricted; and
  
	 
	 	 	
B.        	
The Participant or the Participant’s Survivors may be required to execute letters of investment intent and must also acknowledge that the Shares will bear legends noting any applicable restrictions.
  
	 

     (b) ISOs: Each Option intended to be an ISO shall be issued only to an Employee who is deemed to be a resident
of the United States for tax purposes, and shall be subject to the following terms and conditions, with such additional restrictions or changes as the Administrator determines are appropriate but not in conflict with Section 422 of the Code and
relevant regulations and rulings of the Internal Revenue Service: 

	 	
(i)        	
Minimum standards:
    The ISO shall meet the minimum standards required of Non-Qualified Options,
    as described in Paragraph 6(a) above, except clause (i) thereunder. 
  

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	 	(ii)    	
Exercise Price:
    Immediately before the ISO is granted, if the Participant owns, directly
    or by reason of the applicable attribution rules in Section 424(d) of the
    Code:
  
	 	 	 
	 	 	A.  	10% or less of
    the total combined voting power of all classes of stock of the Company
    or an Affiliate, the exercise price per share of the Shares covered by
    each ISO shall not be less than 100% of the Fair Market Value per share
    of the Common Stock on the date of grant of the Option; or

	 	 	 	 
	 	 	B.  	More than 10% of the total combined voting power of
    all classes of stock of the Company or an Affiliate, the exercise price
    per share of the Shares covered by each ISO shall not be less than 110%
    of the Fair Market Value per share of the Common Stock on the date of grant
    of the Option.

	 	 	 
	 	(iii)	Term of Option:
    For Participants who own:
	 	 	 
	 	 	A.   	10% or less of
    the total combined voting power of all classes of stock of the Company
    or an Affiliate, each ISO shall terminate not more than ten years from
    the date of the grant or at such earlier time as the Option Agreement may
    provide; or

	 	 	 	 
	 	 	B. 	More than 10% of the total combined voting power of
    all classes of stock of the Company or an Affiliate, each ISO shall terminate
    not more than five years from the date of the grant or at such earlier
    time as the Option Agreement may provide.

	 	 	 
	 	(iv)	Limitation on Yearly Exercise:
    The Option Agreements shall restrict the amount of ISOs which may become
    exercisable in any calendar year (under this or any other ISO plan of the
    Company or an Affiliate) so that the aggregate Fair Market Value (determined
    on the date each ISO is granted) of the stock with respect to which ISOs
    are exercisable for the first time by the Participant in any calendar year
    does not exceed $100,000. 

7. TERMS AND CONDITIONS OF STOCK GRANTS. 

     Each Stock Grant to a Participant shall state the principal terms in an Agreement duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant.  The
Agreement shall be in a form approved by the Administrator and shall contain terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject to the following minimum standards: 

     (a) Each Agreement shall state the purchase price per share, if any, of the Shares covered by each Stock Grant, which purchase price shall be
determined by the Administrator but shall not be less than the minimum consideration required by the Delaware General Corporation Law, if any, on the date of the grant of the Stock Grant;

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     (b) Each Agreement shall state the number of Shares to which the Stock Grant pertains; and 

     (c) Each Agreement shall include the terms of any right of the Company to restrict or reacquire the Shares subject to the Stock Grant,
including the time and events upon which such rights shall accrue and the purchase price therefor, if any. 

8. TERMS AND CONDITIONS OF OTHER STOCK-BASED AWARDS. 

     The Administrator shall have the right to grant other Stock-Based Awards based upon the Common Stock having such terms and conditions as the Administrator may determine, including, without limitation,
the grant of Shares based upon certain conditions, the grant of securities convertible into Shares and the grant of stock appreciation rights, phantom stock awards or stock units. The principal terms of each Stock-Based Award shall be set forth in
an Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Agreement shall be in a form approved by the Administrator and shall contain terms and conditions which the
Administrator determines to be appropriate and in the best interest of the Company. 

     The Company intends that the Plan and any Stock-Based Awards granted hereunder be exempt from the application of Section 409A of the Code or meet the requirements of paragraphs (2), (3) and (4) of
subsection (a) of Section 409A of the Code, to the extent applicable, and be operated in accordance with Section 409A so that any compensation deferred under any Stock-Based Award (and applicable investment earnings) shall not be included in income
under Section 409A of the Code.  Any ambiguities in the Plan shall be construed to effect the intent as described in this Paragraph 8. 

9. EXERCISE OF OPTIONS AND ISSUE OF SHARES. 

     An Option (or any part or installment thereof) shall be exercised by giving written notice to the Company or its designee (in a form acceptable to the Administrator, which may include electronic
notice), together with provision for payment of the aggregate exercise price in accordance with this Paragraph for the Shares as to which the Option is being exercised, and upon compliance with any other condition(s) set forth in the Option
Agreement.  Such notice shall be signed by the person exercising the Option, shall state the number of Shares with respect to which the Option is being exercised and shall contain any representation required by the Plan or the Option Agreement.
Payment of the exercise price for the Shares as to which such Option is being exercised shall be made (a) in United States dollars in cash or by check, or (b) at the discretion of the Administrator, through delivery of shares of Common Stock held
for at least six months (if required to avoid negative accounting treatment) having a Fair Market Value equal as of the date of the exercise to the aggregate cash exercise price for the number of Shares as to which the Option is being exercised, or
(c) at the discretion of the Administrator, by having the Company retain from the Shares otherwise issuable upon exercise of the Option, a number of Shares having a Fair Market Value equal as of the date of exercise to the aggregate exercise price
for the number of Shares as to which the Option is being exercised, or (d) at the discretion of the Administrator (after consideration of applicable securities, tax and accounting implications), by

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delivery of the grantee’s personal recourse note bearing interest payable not less than annually at no less than 100% of the applicable Federal rate, as defined in Section 1274(d) of the Code, or (e) at the discretion of the
Administrator, in accordance with a cashless exercise program established with a securities brokerage firm, and approved by the Administrator, or (f) at the discretion of the Administrator, by any combination of (a), (b), (c), (d) and (e) above or
(g) at the discretion of the Administrator, by payment of such other lawful consideration as the Administrator may determine. Notwithstanding the foregoing, the Administrator shall accept only such payment on exercise of an ISO as is permitted by
Section 422 of the Code. 

     The Company shall then reasonably promptly deliver the Shares as to which such Option was exercised to the Participant (or to the Participant’s Survivors, as the case may be).  In determining
what constitutes “reasonably promptly,” it is expressly understood that the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation (including, without limitation, state securities or
“blue sky” laws) which requires the Company to take any action with respect to the Shares prior to their issuance. The Shares shall, upon delivery, be fully paid, non-assessable Shares. 

     The Administrator shall have the right to accelerate the date of exercise of any installment of any Option; provided that the Administrator shall not accelerate the exercise date of any installment of
any Option granted to an Employee as an ISO (and not previously converted into a Non-Qualified Option pursuant to Paragraph 27) without the prior approval of the Employee if such acceleration would violate the annual vesting limitation contained in
Section 422(d) of the Code, as described in Paragraph 6(b)(iv). 

     The Administrator may, in its discretion, amend any term or condition of an outstanding Option provided (i) such term or condition as amended is permitted by the Plan, (ii) any such amendment shall be
made only with the consent of the Participant to whom the Option was granted, or in the event of the death of the Participant, the Participant’s Survivors, if the amendment is adverse to the Participant, and (iii) any such amendment of any
Option shall be made only after the Administrator determines whether such amendment would constitute a “modification” of any Option which is an ISO (as that term is defined in Section 424(h) of the Code) or would cause any adverse tax
consequences for the holder of any Option including, but not limited to, pursuant to Section 409A of the Code. 

10. ACCEPTANCE OF STOCK GRANTS AND STOCK-BASED AWARDS AND ISSUE OF SHARES.

     A Stock Grant or Stock-Based Award (or any part or installment thereof) shall be accepted by executing the applicable Agreement and delivering it to the Company or its designee, together with
provision for payment of the aggregate exercise price, if any, in accordance with this Paragraph for the Shares as to which such Stock Grant or Stock-Based Award is being accepted, and upon compliance with any other conditions set forth in the
applicable Agreement.  Payment of the purchase price for the Shares as to which such Stock Grant or Stock-Based Award is being accepted shall be made (a) in United States dollars in cash or by check, or (b) at the discretion of the Administrator,
through delivery of shares of Common Stock held for at least six months (if required to avoid negative accounting treatment) and having 

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a Fair Market Value equal as of the date of acceptance of the Stock Grant or Stock Based-Award to the purchase price of the Stock Grant or Stock-Based Award, or (c) at the discretion of the Administrator (after consideration of
applicable securities, tax and accounting implications), by delivery of the grantee’s personal recourse note bearing interest payable not less than annually at no less than 100% of the applicable Federal rate, as defined in Section 1274(d) of
the Code, or (d) at the discretion of the Administrator, by any combination of (a), (b) and (c) above; or (e) at the discretion of the Administrator, by payment of such other lawful consideration as the Administrator may determine. 

     The Company shall then, if required by the applicable Agreement, reasonably promptly deliver the Shares as to which such Stock Grant or Stock-Based Award was accepted to the Participant (or to the
Participant’s Survivors, as the case may be), subject to any escrow provision set forth in the applicable Agreement.  In determining what constitutes “reasonably promptly,” it is expressly understood that the issuance and delivery of
the Shares may be delayed by the Company in order to comply with any law or regulation (including, without limitation, state securities or “blue sky” laws) which requires the Company to take any action with respect to the Shares prior to
their issuance. 

     The Administrator may, in its discretion, amend any term or condition of an outstanding Stock Grant, Stock-Based Award or applicable Agreement provided (i) such term or condition as amended is
permitted by the Plan, (ii) any such amendment shall be made only with the consent of the Participant to whom the Stock Grant or Stock-Based Award was made, if the amendment is adverse to the Participant, and (iii) any such amendment shall be made
only after the Administrator determines whether such amendment would cause any adverse tax consequences to the Participant, including, but not limited to, pursuant to Section 409A of the Code. 

11. RIGHTS AS A SHAREHOLDER.

     No Participant to whom a Stock Right has been granted shall have rights as a shareholder with respect to any Shares covered by such Stock Right, except after due exercise of the Option or acceptance
of the Stock Grant or as set forth in any Agreement, and tender of the aggregate exercise or purchase price, if any, for the Shares being purchased pursuant to such exercise or acceptance and registration of the Shares in the Company’s share
register in the name of the Participant. 

12. ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS. 

     By its terms, a Stock Right granted to a Participant shall not be transferable by the Participant other than (a) by will or by the laws of descent and distribution, or (b) as approved by the
Administrator in its discretion and set forth in the applicable Agreement provided that no Stock Right may be transferred by a Participant for value. Notwithstanding the foregoing, an ISO transferred except in compliance with clause (a) above shall
no longer qualify as an ISO. The designation of a beneficiary of a Stock Right by a Participant, with the prior approval of the Administrator and in such form as the Administrator shall prescribe, shall not be deemed a transfer prohibited by this
Paragraph.  Except as provided above, a Stock Right shall only be

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exercisable or may only be accepted, during the Participant’s lifetime, by such Participant (or by his or her legal representative) and shall not be assigned, pledged or hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar process. Any attempted transfer, assignment, pledge, hypothecation or other disposition of any Stock Right or of any rights granted thereunder contrary to the provisions of this
Plan, or the levy of any attachment or similar process upon a Stock Right, shall be null and void. 

13. EFFECT ON OPTIONS OF TERMINATION OF SERVICE OTHER THAN FOR CAUSE OR DEATH OR DISABILITY. 

     Except as otherwise provided in a Participant’s Option Agreement, in the event of a termination of service (whether as an Employee or director) with the Company or an Affiliate before the
Participant has exercised an Option, the following rules apply: 

     (a) A Participant who ceases to be an Employee or director of the Company or of an Affiliate (for any reason other than termination for Cause,
Disability, or death for which events there are special rules in Paragraphs 14, 15, and 16, respectively), may exercise any Option granted to him or her to the extent that the Option is exercisable on the date of such termination of service, but
only within such term as the Administrator has designated in a Participant’s Option Agreement. 

     (b) Except as provided in Subparagraph (c) below, or Paragraph 15 or 16, in no event may an Option intended to be an ISO, be exercised later
than three months after the Participant’s termination of employment.  The provisions of this Paragraph, and not the provisions of Paragraph 15 or 16, shall apply to a Participant who subsequently becomes Disabled or dies after the termination
of employment, director status or consultancy; provided, however, in the case of a Participant’s Disability or death within three months after the termination of employment, director status or consultancy, the Participant or the
Participant’s Survivors may exercise the Option within one year after the date of the Participant’s termination of service, but in no event after the date of expiration of the term of the Option. 

     (c) Notwithstanding anything herein to the contrary, if subsequent to a Participant’s termination of employment, termination of director
status or termination of consultancy, but prior to the exercise of an Option, the Board of Directors determines that, either prior or subsequent to the Participant’s termination, the Participant engaged in conduct which would constitute Cause,
then such Participant shall forthwith cease to have any right to exercise any Option. 

     (d) A Participant to whom an Option has been granted under the Plan who is absent from the Company or an Affiliate because of temporary
disability (any disability other than a Disability as defined in Paragraph 1 hereof), or who is on leave of absence for any purpose, shall not, during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated
such Participant’s employment, director status or consultancy with the Company or with an Affiliate, except as the Administrator may otherwise expressly provide; provided, however, that, for ISOs, any leave of absence granted by the
Administrator of greater than ninety days, unless pursuant to a contract or statute that guarantees the right to reemployment, shall 

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cause such ISO to become a Non-Qualified Option on the 181st day following such leave of absence. 

     (e) Except as required by law or as set forth in a Participant’s Option Agreement, Options granted under the Plan shall not be affected by
any change of a Participant’s status within or among the Company and any Affiliates, so long as the Participant continues to be an Employee or director of the Company or any Affiliate. 

14. EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR CAUSE. 

     Except as otherwise provided in a Participant’s Option Agreement, the following rules apply if the Participant’s service (whether as an Employee or director) with the Company or an Affiliate is terminated for Cause prior to the time that all his or her outstanding Options have been exercised: 

     (a) All outstanding and unexercised Options as of the time the Participant is notified his or her service is terminated for Cause will
immediately be forfeited. 

     (b) Cause is not limited to events which have occurred prior to a Participant’s termination of service, nor is it necessary that the
Administrator’s finding of Cause occur prior to termination. If the Administrator determines, subsequent to a Participant’s termination of service but prior to the exercise of an Option, that either prior or subsequent to the
Participant’s termination the Participant engaged in conduct which would constitute Cause, then the right to exercise any Option is forfeited. 

15. EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR DISABILITY. 

     Except as otherwise provided in a Participant’s Option Agreement: 

     (a) A Participant who ceases to be an Employee or director of the Company or of an Affiliate by reason of Disability may exercise any Option
granted to such Participant: 

	 	
(i)        	
To the extent that the Option has become exercisable
    but has not been exercised on the date of Disability; and 
  
	 	 	 
	 	(ii) 	In the event rights to exercise the Option
    accrue periodically, to the extent of a pro rata portion through the date
    of Disability of any additional vesting rights that would have accrued
    on the next vesting date had the Participant not become Disabled. The proration
    shall be based upon the number of days accrued in the current vesting period
    prior to the date of Disability. 

	 	 	 

     (b) A Disabled Participant may exercise such rights only within the period ending one year after the date of the Participant’s termination
due to Disability, notwithstanding that the Participant might have been able to exercise the Option as to some or all of the Shares on a later date if the Participant had not become Disabled and had continued to be an Employee or director

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or, if earlier, within the originally prescribed term of the Option. The Administrator shall make the determination both of whether Disability has occurred and the date of its occurrence (unless a procedure for such determination
is set forth in another agreement between the Company and such Participant, in which case such procedure shall be used for such determination).  If requested, the Participant shall be examined by a physician selected or approved by the
Administrator, the cost of which examination shall be paid for by the Company. 

16. EFFECT ON OPTIONS OF DEATH WHILE AN EMPLOYEE OR DIRECTOR. 

     Except as otherwise provided in a Participant’s Option Agreement: 

     (a) In the event of the death of a Participant while the Participant is an Employee or director of the Company or of an Affiliate, such Option
may be exercised by the Participant’s Survivors: 

	 	
(i)        	
To the extent that the Option has become exercisable
    but has not been exercised on the date of death; and 
  
	 	 	 
	 	(ii) 	 In
        the event rights to exercise the Option accrue periodically, to the extent
    of a pro rata portion through the date of death of any additional vesting
    rights that would have accrued on the next vesting date had the Participant
    not died. The proration shall be based upon the number of days accrued
    in the current vesting period prior to the Participant’s date of death. 

	 	 	 

     (b) If the Participant’s Survivors wish to exercise the Option, they must take all necessary steps to exercise the Option within one year
after the date of death of such Participant, notwithstanding that the decedent might have been able to exercise the Option as to some or all of the Shares on a later date if he or she had not died and had continued to be an Employee or director or,
if earlier, within the originally prescribed term of the Option.

17. EFFECT OF TERMINATION OF SERVICE ON UNACCEPTED STOCK GRANTS. 

     In the event of a termination of service (whether as an Employee or director) with the Company or an Affiliate for any reason before the Participant has accepted a Stock Grant, such offer shall
terminate. 

     For purposes of this Paragraph 17 and Paragraph 18 below, a Participant to whom a Stock Grant has been offered and accepted under the Plan who is absent from work with the Company or with an Affiliate
because of temporary disability (any disability other than a Disability as defined in Paragraph 1 hereof), or who is on leave of absence for any purpose, shall not, during the period of any such absence, be deemed, by virtue of such absence alone,
to have terminated such Participant’s employment, director status or consultancy with the Company or with an Affiliate, except as the Administrator may otherwise expressly provide. 

     In addition, for purposes of this Paragraph 17 and Paragraph 18 below, any change of employment or other service within or among the Company and any Affiliates shall not be

13

treated as a termination of employment, director status or consultancy so long as the Participant continues to be an Employee or director of the Company or any Affiliate. 

18. EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE OTHER THAN FOR CAUSE OR DEATH OR

       DISABILITY.

     Except as otherwise provided in a Participant’s Stock Grant Agreement, in the event of a termination of service (whether as an Employee or director), other than termination for Cause, Disability,
or death for which events there are special rules in Paragraphs 19, 20, and 21, respectively, before all forfeiture provisions or Company rights of repurchase shall have lapsed, then the Company shall have the right to cancel or repurchase that
number of Shares subject to a Stock Grant as to which the Company’s forfeiture or repurchase rights have not lapsed. 

19. EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE FOR CAUSE. 

     Except as otherwise provided in a Participant’s Stock Grant Agreement, the following rules apply if the Participant’s service (whether as an Employee or director) with the Company or an
Affiliate is terminated for Cause: 

     (a) All Shares subject to any Stock Grant that remain subject to forfeiture provisions or as to which the Company shall have a repurchase right
shall be immediately forfeited to the Company as of the time the Participant is notified his or her service is terminated for Cause. 

     (b) Cause is not limited to events which have occurred prior to a Participant’s termination of service, nor is it necessary that the
Administrator’s finding of Cause occur prior to termination.  If the Administrator determines, subsequent to a Participant’s termination of service, that either prior or subsequent to the Participant’s termination the Participant
engaged in conduct which would constitute Cause, then all Shares subject to any Stock Grant that remained subject to forfeiture provisions or as to which the Company had a repurchase right on the date of termination shall be immediately forfeited to
the Company. 

20. EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE FOR DISABILITY. 

     Except as otherwise provided in a Participant’s Stock Grant Agreement, the following rules apply if a Participant ceases to be an Employee or director of the Company or of an Affiliate by reason
of Disability: to the extent the forfeiture provisions or the Company’s rights of repurchase have not lapsed on the date of Disability, they shall be exercisable; provided, however, that in the event such forfeiture provisions or rights of
repurchase lapse periodically, such provisions or rights shall lapse to the extent of a pro rata portion of the Shares subject to such Stock Grant through the date of Disability as would have lapsed had the Participant not become Disabled. The
proration shall be based upon the number of days accrued prior to the date of Disability. 

14

     The Administrator shall make the determination both as to whether Disability has occurred and the date of its occurrence (unless a procedure for such determination is set forth in another agreement
between the Company and such Participant, in which case such procedure shall be used for such determination).  If requested, the Participant shall be examined by a physician selected or approved by the Administrator, the cost of which examination
shall be paid for by the Company. 

21. EFFECT ON STOCK GRANTS OF DEATH WHILE AN EMPLOYEE OR DIRECTOR. 

     Except as otherwise provided in a Participant’s Stock Grant Agreement, the following rules apply in the event of the death of a Participant while the Participant is an Employee or director of the
Company or of an Affiliate:  to the extent the forfeiture provisions or the Company’s rights of repurchase have not lapsed on the date of death, they shall be exercisable; provided, however, that in the event such forfeiture provisions or
rights of repurchase lapse periodically, such provisions or rights shall lapse to the extent of a pro rata portion of the Shares subject to such Stock Grant through the date of death as would have lapsed had the Participant not died. The proration
shall be based upon the number of days accrued prior to the Participant’s death. 

22. PURCHASE FOR INVESTMENT.

     Unless the offering and sale of the Shares to be issued upon the particular exercise or acceptance of a Stock Right shall have been effectively registered under the Securities Act, the Company shall
be under no obligation to issue the Shares covered by such exercise unless and until the following conditions have been fulfilled: 

     (a) The person who exercises or accepts such Stock Right shall warrant to the Company, prior to the receipt of such Shares, that such person is
acquiring such Shares for his or her own account, for investment, and not with a view to, or for sale in connection with, the distribution of any such Shares, in which event the person acquiring such Shares shall be bound by the provisions of the
following legend (or a legend in substantially similar form) which shall be endorsed upon the certificate evidencing the Shares issued pursuant to such exercise or such grant: 

	 	 	
“The shares represented by this certificate
    have been taken for investment and they may not be sold or otherwise transferred
    by any person, including a pledgee, unless (1) either (a) a Registration
    Statement with respect to such shares shall be effective under the Securities
    Act of 1933, as amended, or (b) the Company shall have received an opinion
    of counsel satisfactory to it that an exemption from registration under such
    Act is then available, and (2) there shall have been compliance with all
    applicable state securities laws.” 
  

15

     (b) At the discretion of the Administrator, the Company shall have received an opinion of its counsel that the Shares may be issued upon such
particular exercise or acceptance in compliance with the Securities Act without registration thereunder. 

23. DISSOLUTION OR LIQUIDATION OF THE COMPANY. 

     Upon the dissolution or liquidation of the Company, all Options granted under this Plan which as of such date shall not have been exercised and all Stock Grants and Stock-Based Awards which have not
been accepted will terminate and become null and void; provided, however, that if the rights of a Participant or a Participant’s Survivors have not otherwise terminated and expired, the Participant or the Participant’s Survivors will have
the right immediately prior to such dissolution or liquidation to exercise or accept any Stock Right to the extent that the Stock Right is exercisable or subject to acceptance as of the date immediately prior to such dissolution or liquidation. Upon
the dissolution or liquidation of the Company, any outstanding Stock-Based Awards shall immediately terminate unless otherwise determined by the Administrator or specifically provided in the applicable Agreement. 

24. ADJUSTMENTS.

     Upon the occurrence of any of the following events, a Participant’s rights with respect to any Stock Right granted to him or her hereunder shall be adjusted as hereinafter provided, unless
otherwise specifically provided in a Participant’s Agreement: 

     (a) Stock Dividends and Stock Splits.  If (i) the shares of Common Stock shall be subdivided or combined into
a greater or smaller number of shares or if the Company shall issue any shares of Common Stock as a stock dividend on its outstanding Common Stock, or (ii) additional shares or new or different shares or other securities of the Company or other
non-cash assets are distributed with respect to such shares of Common Stock, the number of shares of Common Stock deliverable upon the exercise of an Option or acceptance of a Stock Grant shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made including, in the exercise or purchase price per share, to reflect such events. The number of Shares subject to the limitations in Paragraphs 3(a), 3(b) and 4(c) shall also be
proportionately adjusted upon the occurrence of such events. 

     (b) Corporate Transactions. If the Company is to be consolidated with or acquired by another entity in a
merger, consolidation, or sale of all or substantially all of the Company’s assets other than a transaction to merely change the state of incorporation (a “Corporate Transaction”), the Administrator or the board of directors of any
entity assuming the obligations of the Company hereunder (the “Successor Board”), shall, as to outstanding Options, either (i) make appropriate provision for the continuation of such Options by substituting on an equitable basis for the
Shares then subject to such Options either the consideration payable with respect to the outstanding shares of Common Stock in connection with the Corporate Transaction or securities of any successor or acquiring entity; or (ii) upon written notice
to the Participants, provide that such Options must be exercised (either (A) to the extent then exercisable or, (B) at the discretion of the Administrator, any such Options being made partially or fully exercisable

16

for purposes of this Subparagraph), within a specified number of days of the date of such notice, at the end of which period such Options which have not been exercised shall terminate; or (iii) terminate such Options in exchange
for payment of an amount equal to the consideration payable upon consummation of such Corporate Transaction to a holder of the number of shares of Common Stock into which such Option would have been exercisable (either (A) to the extent then
exercisable or, (B) at the discretion of the Administrator, any such Options being made partially or fully exercisable for purposes of this Subparagraph) less the aggregate exercise price
thereof. For purposes of determining the payments to be made pursuant to Subclause (iii) above, in the case of a Corporate Transaction the consideration for which, in whole or in part, is other than cash, the consideration other than cash shall be
valued at the fair value thereof as determined in good faith by the Board of Directors. 

     With respect to outstanding Stock Grants, the Administrator or the Successor Board, shall as to outstanding Stock Grants make appropriate provision for the continuation of such Stock Grants on the
same terms and conditions by substituting on an equitable basis for the Shares then subject to such Stock Grants either the consideration payable with respect to the outstanding Shares of Common Stock in connection with the Corporate Transaction or
securities of any successor or acquiring entity.  In lieu of the foregoing, in connection with any Corporate Transaction, the Administrator may provide that, upon consummation of the Corporate Transaction, each outstanding Stock Grant shall be
terminated in exchange for payment of an amount equal to the consideration payable upon consummation of such Corporate Transaction to a holder of the number of shares of Common Stock comprising such Stock Grant (to the extent such Stock Grant is no
longer subject to any forfeiture or repurchase rights then in effect or, at the discretion of the Administrator, all forfeiture and repurchase rights being waived upon such Corporate Transaction). 

     In taking any of the actions permitted under this Paragraph 19(b), the Administrator shall not be obligated by the Plan to treat all Stock Rights, all Stock Rights held by a Participant, or all Stock
Rights of the same type, identically. 

     (c) Recapitalization or Reorganization.  In the event of a recapitalization or reorganization of the Company
other than a Corporate Transaction pursuant to which securities of the Company or of another corporation are issued with respect to the outstanding shares of Common Stock, a Participant upon exercising an Option or accepting a Stock Grant after the
recapitalization or reorganization shall be entitled to receive for the price paid upon such exercise or acceptance if any, the number of replacement securities which would have been received if such Option had been exercised or Stock Grant accepted
prior to such recapitalization or reorganization. 

     (d) Adjustments to Stock-Based Awards. Upon the happening of any of the events described in Subparagraphs a, b
or c above, any outstanding Stock-Based Award shall be appropriately adjusted to reflect the events described in such Subparagraphs. The Administrator or the Successor Board shall determine the specific adjustments to be made under this Paragraph
24, including, but not limited to the effect of any, Corporate Transaction and, subject to Paragraph 4, its determination shall be conclusive. 

17

     (e) Modification of Options. Notwithstanding the foregoing, any adjustments made pursuant to Subparagraph a, b
or c above with respect to Options shall be made only after the Administrator determines whether such adjustments would constitute a “modification” of any ISOs (as that term is defined in Section 424(h) of the Code) or would cause any
adverse tax consequences for the holders of Options, including, but not limited to, pursuant to Section 409A of the Code. If the Administrator determines that such adjustments made with respect to Options would constitute a modification or other
adverse tax consequence, it may refrain from making such adjustments, unless the holder of an Option specifically agrees in writing that such adjustment be made and such writing indicates that the holder has full knowledge of the consequences of
such “modification” on his or her income tax treatment with respect to the Option. This paragraph shall not apply to the acceleration of the vesting of any ISO that would cause any portion of the ISO to violate the annual vesting
limitation contained in Section 422(d) of the Code, as described in Paragraph 6(b)(iv). 

25. ISSUANCES OF SECURITIES.

     Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares subject to Stock Rights.  Except as expressly provided herein, no adjustments shall be made for dividends paid in cash or in property (including without limitation, securities) of
the Company prior to any issuance of Shares pursuant to a Stock Right. 

26. FRACTIONAL SHARES.

     No fractional shares shall be issued under the Plan and the person exercising a Stock Right shall receive from the Company cash in lieu of such fractional shares equal to the Fair Market Value
thereof. 

27. CONVERSION OF ISOS INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOS.

     The Administrator, at the written request of any Participant, may in its discretion take such actions as may be necessary to convert such Participant’s ISOs (or any portions thereof) that have
not been exercised on the date of conversion into Non-Qualified Options at any time prior to the expiration of such ISOs, regardless of whether the Participant is an Employee of the Company or an Affiliate at the time of such conversion. At the time
of such conversion, the Administrator (with the consent of the Participant) may impose such conditions on the exercise of the resulting Non-Qualified Options as the Administrator in its discretion may determine, provided that such conditions shall
not be inconsistent with this Plan. Nothing in the Plan shall be deemed to give any Participant the right to have such Participant’s ISOs converted into Non-Qualified Options, and no such conversion shall occur until and unless the
Administrator takes appropriate action.  The Administrator, with the consent of the Participant, may also terminate any portion of any ISO that has not been exercised at the time of such conversion. 

18

28. WITHHOLDING.

     In the event that any federal, state, or local income taxes, employment taxes, Federal Insurance Contributions Act (“F.I.C.A.”) withholdings or other amounts are required by applicable law
or governmental regulation to be withheld from the Participant’s salary, wages or other remuneration in connection with the exercise or acceptance of a Stock Right or in connection with a Disqualifying Disposition (as defined in Paragraph 29)
or upon the lapsing of any forfeiture provision or right of repurchase or for any other reason required by law, the Company may withhold from the Participant’s compensation, if any, or may require that the Participant advance in cash to the
Company, or to any Affiliate of the Company which employs or employed the Participant, the statutory minimum amount of such withholdings unless a different withholding arrangement, including the use of shares of the Company’s Common Stock or a
promissory note, is authorized by the Administrator (and permitted by law). For purposes hereof, the fair market value of the shares withheld for purposes of payroll withholding shall be determined in the manner set forth under the definition of
Fair Market Value provided in Paragraph 1 above, as of the most recent practicable date prior to the date of exercise. If the Fair Market Value of the shares withheld is less than the amount of payroll withholdings required, the Participant may be
required to advance the difference in cash to the Company or the Affiliate employer. The Administrator in its discretion may condition the exercise of an Option for less than the then Fair Market Value on the Participant’s payment of such
additional withholding.

29. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION. 

     Each Employee who receives an ISO must agree to notify the Company in writing immediately after the Employee makes a Disqualifying Disposition of any Shares acquired pursuant to the exercise of an
ISO. A Disqualifying Disposition is defined in Section 424(c) of the Code and includes any disposition (including any sale or gift) of such Shares before the later of (a) two years after the date the Employee was granted the ISO, or (b) one year
after the date the Employee acquired Shares by exercising the ISO, except as otherwise provided in Section 424(c) of the Code. If the Employee has died before such Shares are sold, these holding period requirements do not apply and no Disqualifying
Disposition can occur thereafter. 

30. TERMINATION OF THE PLAN.

     The Plan will terminate on November 20, 2019, the date which is ten years from the earlier of the date of its adoption by the Board of Directors and the date of its approval by the shareholders of the Company.  The Plan may be terminated at an earlier date by vote of the shareholders or the Board of Directors of the Company;
provided, however, that any such earlier termination shall not affect any Agreements executed prior to the effective date of such termination. Termination of the Plan shall not affect any Stock Rights theretofore granted. 

19

31. AMENDMENT OF THE PLAN AND AGREEMENTS. 

     The Plan may be amended by the shareholders of the Company. The Plan may also be amended by the Administrator, including, without limitation, to the extent necessary to qualify any or all outstanding
Stock Rights granted under the Plan or Stock Rights to be granted under the Plan for favorable federal income tax treatment as may be afforded incentive stock options under Section 422 of the Code (including deferral of taxation upon exercise), and
to the extent necessary to qualify the shares issuable upon exercise or acceptance of any outstanding Stock Rights granted, or Stock Rights to be granted, under the Plan for listing on any national securities exchange or quotation in any national
automated quotation system of securities dealers.  Any amendment approved by the Administrator which the Administrator determines is of a scope that requires shareholder approval shall be subject to obtaining such shareholder approval.  Any
modification or amendment of the Plan shall not, without the consent of a Participant, adversely affect his or her rights under a Stock Right previously granted to him or her. With the consent of the Participant affected, the Administrator may amend
outstanding Agreements in a manner which may be adverse to the Participant but which is not inconsistent with the Plan.  In the discretion of the Administrator, outstanding Agreements may be amended by the Administrator in a manner which is not
adverse to the Participant. 

32. EMPLOYMENT OR OTHER RELATIONSHIP. 

     Nothing in this Plan or any Agreement shall be deemed to prevent the Company or an Affiliate from terminating the employment, consultancy or director status of a Participant, nor to prevent a
Participant from terminating his or her own employment, consultancy or director status or to give any Participant a right to be retained in employment or other service by the Company or any Affiliate for any period of time. 

33. GOVERNING LAW.

     This Plan shall be construed and enforced in accordance with the law of the State of Delaware. 

20Exhibit
10.78

Option No.________

WAVE2WAVE
COMMUNICATIONS, INC.

Stock Option Grant Notice

Stock Option Grant under the Company’s

2009 Employee, Director and Consultant Equity Incentive Plan

	
  

 	
  

 	
  

 	
  

 
	
 1.

 	
 Name and Address of Participant:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 
	
 2.

 	
 Date of Option Grant:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
 3.

 	
 Type of Grant:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
 4.

 	
 Maximum Number of Shares for which this Option is
 exercisable:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
 5.

 	
 Exercise (purchase) price per share:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
 6.

 	
 Option Expiration Date:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
 7.

 	
 Vesting Start Date:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 
	
 8.

 	
 Vesting Schedule: This Option shall become
 exercisable (and the Shares issued upon exercise shall be vested) as follows
 provided the Participant is an employee, director or Consultant of the
 Company or of an Affiliate on the applicable vesting date:

 

	
 On the first anniversary of the
 Vesting Start Date

 	
  

 	
 up to
 ____________ Shares

 
	
  

 	
  

 	
  

 
	
 On the second anniversary of the
 Vesting Start Date

 	
  

 	
an
 additional __________ Shares

 	
  

 
	
  

 	
  

 	
  

	
 On the third anniversary of the
 Vesting Start Date

 	
  

 	
 an
 additional __________ Shares

 

          The
foregoing rights are cumulative and are subject to the other terms and
conditions of this Agreement and the Plan.

          The
Company and the Participant acknowledge receipt of this Stock Option Grant
Notice and agree to the terms of the Stock Option Agreement attached hereto and
incorporated by

reference herein, the Company’s 2009 Employee, Director and
Consultant Equity Incentive Plan and the terms of this Option Grant as set
forth above.

	
  

 	
  

 	
  

 
	
  

 	
 WAVE2WAVE COMMUNICATIONS, INC.

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	

 

 
	
  

 	
 Name:

 	
  

 
	
  

 	

 

 
	
  

 	
 Title:

 	
  

 
	
  

 	

 

 
	
  

 	
  

 
	
  

 	

 

 
	
  

 	
 Participant

 

2

WAVE2WAVE
COMMUNICATIONS, INC.

STOCK OPTION AGREEMENT - INCORPORATED
TERMS AND CONDITIONS

          AGREEMENT
made as of the date of grant set forth in the Stock Option Grant Notice by and
between Wave2Wave Communications, Inc. (the “Company”), a Delaware corporation,
and the individual whose name appears on the Stock Option Grant Notice (the
“Participant”).

          WHEREAS,
the Company desires to grant to the Participant an Option to purchase shares of
its common stock, $0.0001 par value per share (the “Shares”), under and for the
purposes set forth in the Company’s 2009 Employee, Director and Consultant
Equity Incentive Plan (the “Plan”);

          WHEREAS,
the Company and the Participant understand and agree that any terms used and
not defined herein have the same meanings as in the Plan; and

          WHEREAS,
the Company and the Participant each intend that the Option granted herein
shall be of the type set forth in the Stock Option Grant Notice.

          NOW,
THEREFORE, in consideration of the mutual covenants hereinafter set forth and
for other good and valuable consideration, the parties hereto agree as follows:

	
  

 	
  

 
	
  

 	
 1. GRANT OF OPTION.

 

                    The
Company hereby grants to the Participant the right and option to purchase all
or any part of an aggregate of the number of Shares set forth in the Stock
Option Grant Notice, on the terms and conditions and subject to all the
limitations set forth herein, under United States securities and tax laws, and
in the Plan, which is incorporated herein by reference. The Participant
acknowledges receipt of a copy of the Plan.

	
  

 	
  

 
	
  

 	
 2. EXERCISE PRICE.

 

                    The
exercise price of the Shares covered by the Option shall be the amount per
Share set forth in the Stock Option Grant Notice, subject to adjustment, as
provided in the Plan, in the event of a stock split, reverse stock split or
other events affecting the holders of Shares after the date hereof (the
“Exercise Price”). Payment shall be made in accordance with Paragraph 9 of the
Plan.

	
  

 	
  

 
	
  

 	
 3. EXERCISABILITY OF OPTION.

 

                    Subject
to the terms and conditions set forth in this Agreement and the Plan, the
Option granted hereby shall become vested and exercisable as set forth in the
Stock Option Grant Notice and is subject to the other terms and conditions of
this Agreement and the Plan.

	
  

 	
  

 
	
  

 	
 4. TERM OF OPTION.

 

                    This
Option shall terminate on the Option Expiration Date as specified in the Stock
Option Grant Notice and, if this Option is designated in the Stock Option Grant
Notice as an ISO and the Participant owns as of the date hereof more than 10%
of the total combined voting power of all classes of capital stock of the
Company or an Affiliate, such date may not be more than five years from the
date of this Agreement, but shall be subject to earlier termination as provided
herein or in the Plan.

                    If
the Participant ceases to be an employee, director or Consultant of the Company
or of an Affiliate for any reason other than the death or Disability of the
Participant, or termination of the Participant for Cause (the “Termination
Date”), the Option to the extent then vested and exercisable pursuant to
Section 3 hereof as of the Termination Date, and not previously terminated in
accordance with this Agreement, may be exercised within three months after the
Termination Date, or on or prior to the Option Expiration Date as specified in
the Stock Option Grant Notice, whichever is earlier, but may not be exercised
thereafter except as set forth below. In such event, the unvested portion of
the Option shall not be exercisable and shall expire and be cancelled on the
Termination Date.

                    If
this Option is designated in the Stock Option Grant Notice as an ISO and the
Participant ceases to be an employee of the Company or of an Affiliate but
continues after termination of employment to provide service to the Company or
an Affiliate as a director or Consultant, this Option shall continue to vest in
accordance with Section 3 above as if this Option had not terminated until the
Participant is no longer providing services to the Company. In such case, this
Option shall automatically convert and be deemed a Non-Qualified Option as of
the date that is three months from termination of the Participant’s employment
and this Option shall continue on the same terms and conditions set forth
herein until such Participant is no longer providing service to the Company or
an Affiliate.

                    Notwithstanding
the foregoing, in the event of the Participant’s Disability or death within
three months after the Termination Date, the Participant or the Participant’s
Survivors may exercise the Option within one year after the Termination Date,
but in no event after the Option Expiration Date as specified in the Stock
Option Grant Notice.

                    In
the event the Participant’s service is terminated by the Company or an
Affiliate for Cause, the Participant’s right to exercise any unexercised
portion of this Option even if vested shall cease immediately as of the time
the Participant is notified his or her service is terminated for Cause, and
this Option shall thereupon terminate. Notwithstanding anything herein to the
contrary, if subsequent to the Participant’s termination, but prior to the
exercise of the Option, the Board of Directors of the Company determines that,
either prior or subsequent to the Participant’s termination, the Participant
engaged in conduct which would constitute Cause, then the Participant shall
immediately cease to have any right to exercise the Option and this Option
shall thereupon terminate.

                    In
the event of the Disability of the Participant, as determined in accordance
with the Plan, the Option shall be exercisable within one year after the
Participant’s termination of

2

service due to Disability or, if earlier, on or prior
to the Option Expiration Date as specified in the Stock Option Grant Notice. In
such event, the Option shall be exercisable:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 to the extent that the Option has become exercisable
 but has not been exercised as of the date of the Participant’s termination of
 service due to Disability; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 in the event rights to exercise the Option accrue
 periodically, to the extent of a pro rata portion through the date of the
 Participant’s termination of service due to Disability of any additional
 vesting rights that would have accrued on the next vesting date had the
 Participant not become Disabled. The proration shall be based upon the number
 of days accrued in the current vesting period prior to the date of the
 Participant’s termination of service due to Disability.

 

                    In
the event of the death of the Participant while an employee, director or
Consultant of the Company or of an Affiliate, the Option shall be exercisable
by the Participant’s Survivors within one year after the date of death of the
Participant or, if earlier, on or prior to the Option Expiration Date as
specified in the Stock Option Grant Notice. In such event, the Option shall be
exercisable:

	
  

 	
  

 	
  

 
	
  

 	
 (x)

 	
 to the extent that the Option has become exercisable
 but has not been exercised as of the date of death; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (y)

 	
 in the event rights to exercise the Option accrue
 periodically, to the extent of a pro rata portion through the date of death
 of any additional vesting rights that would have accrued on the next vesting
 date had the Participant not died. The proration shall be based upon the
 number of days accrued in the current vesting period prior to the
 Participant’s date of death.

 

	
  

 	
  

 
	
  

 	
 5. METHOD OF EXERCISING OPTION.

 

                    Subject
to the terms and conditions of this Agreement, the Option may be exercised by
written notice to the Company or its designee, in substantially the form of Exhibit A
attached hereto. Such notice shall state the number of Shares with respect to
which the Option is being exercised and shall be signed by the person
exercising the Option. Payment of the Exercise Price for such Shares shall be
made in accordance with Paragraph 9 of the Plan. The Company shall deliver such
Shares as soon as practicable after the notice shall be received, provided,
however, that the Company may delay issuance of such Shares until completion of
any action or obtaining of any consent, which the Company deems necessary under
any applicable law (including, without limitation, state securities or “blue
sky” laws). The Shares as to which the Option shall have been so exercised
shall be registered in the Company’s share register in the name of the person
so exercising the Option (or, if the Option shall be exercised by the
Participant and if the Participant shall so request in the notice exercising
the Option, shall be registered in the Company’s share register in the name of
the Participant and another person jointly, with right of survivorship) and
shall be delivered as provided above to or upon the 

3

written order of the person exercising the Option. In
the event the Option shall be exercised, pursuant to Section 4 hereof, by any
person other than the Participant, such notice shall be accompanied by
appropriate proof of the right of such person to exercise the Option. All
Shares that shall be purchased upon the exercise of the Option as provided
herein shall be fully paid and nonassessable.

	
  

 	
  

 
	
  

 	
 6. PARTIAL EXERCISE.

 

                    Exercise
of this Option to the extent above stated may be made in part at any time and
from time to time within the above limits, except that no fractional share
shall be issued pursuant to this Option.

	
  

 	
  

 
	
  

 	
 7. NON-ASSIGNABILITY.

 

                    The
Option shall not be transferable by the Participant otherwise than by will or
by the laws of descent and distribution. If this Option is a Non-Qualified
Option then it may also be transferred pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act or the rules thereunder. Except as provided above in this
paragraph, the Option shall be exercisable, during the Participant’s lifetime,
only by the Participant (or, in the event of legal incapacity or incompetency,
by the Participant’s guardian or representative) and shall not be assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation or other disposition of
the Option or of any rights granted hereunder contrary to the provisions of
this Section 7, or the levy of any attachment or similar process upon the
Option shall be null and void.

	
  

 	
  

 
	
  

 	
 8. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.

 

                    The
Participant shall have no rights as a stockholder with respect to Shares
subject to this Agreement until registration of the Shares in the Company’s
share register in the name of the Participant. Except as is expressly provided
in the Plan with respect to certain changes in the capitalization of the
Company, no adjustment shall be made for dividends or similar rights for which
the record date is prior to the date of such registration.

	
  

 	
  

 
	
  

 	
 9. ADJUSTMENTS.

 

                    The
Plan contains provisions covering the treatment of Options in a number of
contingencies such as stock splits and mergers. Provisions in the Plan for
adjustment with respect to stock subject to Options and the related provisions
with respect to successors to the business of the Company are hereby made applicable
hereunder and are incorporated herein by reference.

	
  

 	
  

 
	
  

 	
 10. TAXES.

 

                    The
Participant acknowledges and agrees that (i) any income or other taxes due from
the Participant with respect to this Option or the Shares issuable upon
exercise of this 

4

Option shall be the Participant’s responsibility; (ii)
the Participant was free to use professional advisors of his or her choice in
connection with this Agreement, has received advice from his or her
professional advisors in connection with this Agreement, understands its
meaning and import, and is entering into this Agreement freely and without
coercion or duress; (iii) the Participant has not received and is not relying
upon any advice, representations or assurances made by or on behalf of the Company
or any Affiliate or any employee of or counsel to the Company or any Affiliate
regarding any tax or other effects or implications of the Option, the Shares or
other matters contemplated by this Agreement and (iv) neither the Company its
Affiliates, nor any of its officers or directors, shall be held liable for any
applicable costs, taxes, or penalties associated with the Option if, in fact,
the Internal Revenue Service were to determine that the Option constitutes
deferred compensation under Section 409A of the Code.

                    If
this Option is designated in the Stock Option Grant Notice as an ISO and there
is a Disqualifying Disposition (as defined in Section 15 below) or if the Option is
converted into a Non-Qualified Option and such Non-Qualified Option is
exercised, the Participant agrees that the Company may withhold from the
Participant’s remuneration, if any, the minimum statutory amount of federal,
state and local withholding taxes attributable to such amount that is
considered compensation includable in such person’s gross income. At the
Company’s discretion, the amount required to be withheld may be withheld in
cash from such remuneration, or in kind from the Shares otherwise deliverable
to the Participant on exercise of the Option. The Participant further agrees
that, if the Company does not withhold an amount from the Participant’s
remuneration sufficient to satisfy the Company’s income tax withholding
obligation, the Participant will reimburse the Company on demand, in cash, for
the amount under-withheld.

	
  

 	
  

 
	
  

 	
 11. PURCHASE FOR INVESTMENT.

 

                    Unless
the offering and sale of the Shares to be issued upon the particular exercise
of the Option shall have been effectively registered under the Securities Act
of 1933, as now in force or hereafter amended (the “1933 Act”), the Company
shall be under no obligation to issue the Shares covered by such exercise
unless and until the following conditions have been fulfilled:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 The person(s) who exercise the Option shall warrant
 to the Company, at the time of such exercise, that such person(s) are
 acquiring such Shares for their own respective accounts, for investment, and
 not with a view to, or for sale in connection with, the distribution of any
 such Shares, in which event the person(s) acquiring such Shares shall be
 bound by the provisions of the following legend which shall be endorsed upon
 any certificate(s) evidencing the Shares issued pursuant to such exercise:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 “The shares represented by this certificate have
 been taken for investment and they may not be sold or otherwise transferred
 by any person, including a pledgee, unless (1) either (a) a Registration
 Statement with respect to such shares shall be effective under the Securities
 Act of 1933, as amended, or (b) the Company shall have received an opinion of
 counsel satisfactory to it that an exemption from registration under such Act
 is

 

5

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 then available, and (2) there shall have been
 compliance with all applicable state securities laws;” and

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 If the Company so requires, the Company shall
 have received an opinion of its counsel that the Shares may be issued upon
 such particular exercise in compliance with the 1933 Act without registration
 thereunder. Without limiting the generality of the foregoing, the Company may
 delay issuance of the Shares until completion of any action or obtaining of
 any consent, which the Company deems necessary under any applicable law
 (including without limitation state securities or “blue sky” laws).

 

	
  

 	
  

 
	
  

 	
 12. RESTRICTIONS ON TRANSFER OF SHARES.

 

          12.1
The Shares acquired by the Participant pursuant to the exercise of the Option granted hereby shall not be transferred by the
Participant except as permitted herein.

          12.2
In the event of the Participant’s termination of service for any reason, the Company shall have the option, but not the obligation,
to repurchase all or any part of the Shares issued pursuant to this Agreement (including, without limitation, Shares purchased after
termination of service, Disability or death in accordance with Section 4 hereof).  In the event the Company does not, upon the
termination of service of the Participant (as described above), exercise its option pursuant to this Section 12.2, the restrictions
set forth in the balance of this Agreement shall not thereby lapse, and the Participant for himself or herself, his or her heirs,
legatees, executors, administrators and other successors in interest, agrees that the Shares shall remain subject to such
restrictions.  The following provisions shall apply to a repurchase under this Section 12.2:

	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 The per share repurchase price of the Shares to be sold to the Company upon exercise of its option under this Section 12.2 shall be
equal to the Fair Market Value of each such Share determined in accordance with the Plan as of the date of repurchase provided,
however, in the event of a termination by the Company for Cause, the per share repurchase price of the Shares to be sold to the
Company upon exercise of its option under this Section 12.2 shall be equal to the lesser of the Exercise Price and the Fair Market
Value on the date of the repurchase.

 
	
  

 
	
  

 	
 (ii)

 	
 The Company’s option to repurchase the Participant’s Shares in the event of termination of service shall be valid for a period of 12
months commencing with the date of such termination of service.

 
	
  

 
	
  

 	
 (iii)

 	
 In the event the Company shall be entitled to and shall elect to exercise its option to repurchase the Participant’s Shares under
this Section 12.2, the Company shall notify the Participant, or in case of death, his or her Survivor, in writing of its intent to
repurchase the Shares.  Such written notice may be mailed by the Company up to and including the last day of the time period provided
for in Section 12.2(ii) for exercise of the Company’s option to repurchase.

 

6

	
  

 	
  

 	
  

 
	
  

 	
 (iv)

 	
 The written
 notice to the Participant shall specify the address at, and the time and date
 on, which payment of the repurchase price is to be made (the “Closing”). The
 date specified shall not be less than ten days nor more than 60 days from the
 date of the mailing of the notice, and the Participant or his or her
 successor in interest with respect to the Shares shall have no further rights
 as the owner thereof from and after the date specified in the notice. At the
 Closing, the repurchase price shall be delivered to the Participant or his or
 her successor in interest and the Shares being purchased, duly endorsed for
 transfer, shall, to the extent that they are not then in the possession of
 the Company, be delivered to the Company by the Participant or his or her
 successor in interest.

 

          12.3
It shall be a condition precedent to the validity of any sale or other transfer
of any Shares by the Participant that the following restrictions be complied
with (except as hereinafter otherwise provided):

	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 No Shares
 owned by the Participant may be sold, pledged or otherwise transferred
 (including by gift or devise) to any person or entity, voluntarily, or by
 operation of law, except in accordance with the terms and conditions
 hereinafter set forth.

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 Before
 selling or otherwise transferring all or part of the Shares, the Participant
 shall give written notice of such intention to the Company, which notice
 shall include the name of the proposed transferee, the proposed purchase
 price per share, the terms of payment of such purchase price and all other
 matters relating to such sale or transfer and shall be accompanied by a copy
 of the binding written agreement of the proposed transferee to purchase the
 Shares of the Participant. Such notice shall constitute a binding offer by
 the Participant to sell to the Company such number of the Shares then held by
 the Participant as are proposed to be sold in the notice at the monetary
 price per share designated in such notice, payable on the terms offered to
 the Participant by the proposed transferee (provided, however, that the
 Company shall not be required to meet any non-monetary terms of the proposed
 transfer, including, without limitation, delivery of other securities in
 exchange for the Shares proposed to be sold). The Company shall give written
 notice to the Participant as to whether such offer has been accepted in whole
 by the Company within 60 days after its receipt of written notice from the
 Participant. The Company may only accept such offer in whole and may not
 accept such offer in part. Such acceptance notice shall fix a time, location
 and date for the Closing on such purchase (“Closing Date”) which shall not be
 less than ten nor more than sixty days after the giving of the acceptance
 notice, provided, however, if any of the Shares to be sold pursuant to this
 Section 12.3 have been held by the Participant for less than six months, then
 the Closing Date may be extended by the Company until no more than ten days
 after such Shares have been held by the Participant for six months if
 required under applicable accounting rules in effect at the time. The place
 for such Closing shall be at the Company’s principal office. At such Closing,
 the Participant shall accept payment as set forth herein and shall deliver to
 the Company in exchange

 

7

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 therefor
 certificates for the number of Shares stated in the notice accompanied by
 duly executed instruments of transfer.

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)

 	
 If the
 Company shall fail to accept any such offer, the Participant shall be free to
 sell all, but not less than all, of the Shares set forth in his or her notice
 to the designated transferee at the price and terms designated in the
 Participant’s notice, provided that (i) such sale is consummated within six
 months after the giving of notice by the Participant to the Company as
 aforesaid, and (ii) the transferee first agrees in writing to be bound by the
 provisions of this Section 12 so that such transferee (and all subsequent
 transferees) shall thereafter only be permitted to sell or transfer the
 Shares in accordance with the terms hereof. After the expiration of such six
 months, the provisions of this Section 12.3 shall again apply with respect to
 any proposed voluntary transfer of the Participant’s Shares.

 
	
  

 	
  

 	
  

 
	
  

 	
 (iv)

 	
 The
 provisions of this Section 12.3 may be waived by the Company. Any such waiver
 may be unconditional or based upon such conditions as the Company may impose.

 

          12.4
In the event that the Participant or his or her successor in interest fails to
deliver the Shares to be repurchased by the Company under this Agreement, the
Company may elect (a) to establish a segregated account in the amount of
the repurchase price, such account to be turned over to the Participant or his
or her successor in interest upon delivery of such Shares, and
(b) immediately to take such action as is appropriate to transfer record
title of such Shares from the Participant to the Company and to treat the
Participant and such Shares in all respects as if delivery of such Shares had been
made as required by this Agreement. The Participant hereby irrevocably grants
the Company a power of attorney which shall be coupled with an interest for the
purpose of effectuating the preceding sentence.

          12.5
If the Company shall pay a stock dividend or declare a stock split on or with
respect to any of its Common Stock, or otherwise distribute securities of the
Company to the holders of its Common Stock, the number of shares of stock or
other securities of the Company issued with respect to the shares then subject
to the restrictions contained in this Agreement shall be added to the Shares
subject to the Company’s rights to repurchase pursuant to this Agreement. If
the Company shall distribute to its stockholders shares of stock of another
corporation, the shares of stock of such other corporation, distributed with
respect to the Shares then subject to the restrictions contained in this
Agreement, shall be added to the Shares subject to the Company’s rights to
repurchase pursuant to this Agreement.

          12.6
If the outstanding shares of Common Stock of the Company shall be subdivided
into a greater number of shares or combined into a smaller number of shares, or
in the event of a reclassification of the outstanding shares of Common Stock of
the Company, or if the Company shall be a party to a merger, consolidation or
capital reorganization, there shall be substituted for the Shares then subject
to the restrictions contained in this Agreement such amount and kind of
securities as are issued in such subdivision, combination, reclassification,
merger, consolidation or capital reorganization in respect of the Shares
subject immediately prior thereto to the Company’s rights to repurchase
pursuant to this Agreement.

8

          12.7
The Company shall not be required to transfer any Shares on its books which
shall have been sold, assigned or otherwise transferred in violation of this
Agreement, or to treat as owner of such Shares, or to accord the right to vote
as such owner or to pay dividends to, any person or organization to which any
such Shares shall have been so sold, assigned or otherwise transferred, in
violation of this Agreement.

          12.8
The provisions of Sections 12.1, 12.2 and 12.3 shall terminate upon the
effective date of the registration of the Shares pursuant to the Securities
Exchange Act of 1934.

          12.9
The Participant agrees that in the event the Company proposes to offer for sale
to the public any of its equity securities and such Participant is requested by
the Company and any underwriter engaged by the Company in connection with such
offering to sign an agreement restricting the sale or other transfer of Shares,
then it will promptly sign such agreement and will not transfer, whether in
privately negotiated transactions or to the public in open market transactions
or otherwise, any Shares or other securities of the Company held by him or her
during such period as is determined by the Company and the underwriters, not to
exceed 180 days following the closing of the offering, plus such additional
period of time as may be required to comply with Marketplace Rule 2711 of the
National Association of Securities Dealers, Inc. or similar rules thereto (such
period, the “Lock-Up Period”). Such agreement shall be in writing and in form
and substance reasonably satisfactory to the Company and such underwriter and
pursuant to customary and prevailing terms and conditions. Notwithstanding
whether the Participant has signed such an agreement, the Company may impose
stop-transfer instructions with respect to the Shares or other securities of
the Company subject to the foregoing restrictions until the end of the Lock-Up
Period.

          12.10
The Participant acknowledges and agrees that neither the Company, its
shareholders nor its directors and officers, has any duty or obligation to
disclose to the Participant any material information regarding the business of
the Company or affecting the value of the Shares before, at the time of, or
following a termination of the service of the Participant by the Company,
including, without limitation, any information concerning plans for the Company
to make a public offering of its securities or to be acquired by or merged with
or into another firm or entity.

          12.11
All certificates representing the Shares to be issued to the Participant
pursuant to this Agreement shall have endorsed thereon a legend substantially
as follows: “The shares represented by this certificate are subject to
restrictions set forth in a Stock Option Agreement dated _________, 200__ with
this Company, a copy of which Agreement is available for inspection at the
offices of the Company or will be made available upon request.”

	
  

 	
  

 	
  

 
	
  

 	
 13. NO
 OBLIGATION TO MAINTAIN RELATIONSHIP.

 

                    The
Participant acknowledges that: (i) the Company is not by the Plan or this
Option obligated to continue the Participant as an employee, director or
Consultant of the Company or an Affiliate; (ii) the Plan is discretionary in
nature and may be suspended or terminated by the Company at any time; (iii) the
grant of the Option is a one-time benefit which 

9

does not
create any contractual or other right to receive future grants of options, or
benefits in lieu of options; (iv) all determinations with respect to any such
future grants, including, but not limited to, the times when options shall be
granted, the number of shares subject to each option, the option price, and the
time or times when each option shall be exercisable, will be at the sole
discretion of the Company; (v) the Participant’s participation in the Plan is
voluntary; (vi) the value of the Option is an extraordinary item of
compensation which is outside the scope of the Participant’s employment or
consulting contract, if any; and (vii) the Option is not part of normal or expected
compensation for purposes of calculating any severance, resignation,
redundancy, end of service payments, bonuses, long-service awards, pension or
retirement benefits or similar payments.

	
  

 	
  

 	
  

 
	
  

 	
 14. IF OPTION IS
 INTENDED TO BE AN ISO. 

 

                    If
this Option is designated in the Stock Option Grant Notice as an ISO so that
the Participant (or the Participant’s Survivors) may qualify for the favorable
tax treatment provided to holders of Options that meet the standards of Section
422 of the Code then any provision of this Agreement or the Plan which
conflicts with the Code so that this Option would not be deemed an ISO is null
and void and any ambiguities shall be resolved so that the Option qualifies as
an ISO. Nonetheless, if the Option is determined not to be an ISO, the
Participant understands that neither the Company nor any Affiliate is
responsible to compensate him or her or otherwise make up for the treatment of
the Option as a Non-Qualified Option and not as an ISO. The Participant should
consult with the Participant’s own tax advisors regarding the tax effects of
the Option and the requirements necessary to obtain favorable tax treatment
under Section 422 of the Code, including, but not limited to, holding period
requirements.

                    Notwithstanding
the foregoing, to the extent that the Option is
designated in the Stock Option Grant Notice as an ISO and is not deemed to be an ISO
pursuant to Section 422(d) of the Code because the aggregate Fair Market Value
(determined as of the Date of Option Grant) of any of the Shares with respect
to which this ISO is granted becomes exercisable for the first time during any
calendar year in excess of $100,000, the portion of the Option representing
such excess value shall be treated as a Non-Qualified Option and the
Participant shall be deemed to have taxable income measured by the difference
between the then Fair Market Value of the Shares received upon exercise and the
price paid for such Shares pursuant to this Agreement. 

	
  

 	
  

 	
  

 
	
  

 	
 15. NOTICE TO
COMPANY OF DISQUALIFYING DISPOSITION OF AN ISO.

 

                    If
this Option is designated in the Stock Option Grant Notice as an ISO then the
Participant agrees to notify the Company in writing immediately after the
Participant makes a Disqualifying Disposition of any of the Shares acquired
pursuant to the exercise of the ISO. A Disqualifying Disposition is defined in
Section 424(c) of the Code and includes any disposition (including any sale) of
such Shares before the later of (a) two years after the date the Participant
was granted the ISO or (b) one year after the date the Participant acquired
Shares by exercising the ISO, except as otherwise provided in Section 424(c) of
the Code. If the Participant has died before the Shares are sold, these holding
period requirements do not apply and no Disqualifying Disposition can occur
thereafter.

10

	
  

 	
  

 	
  

 
	
  

 	
 16. NOTICES.

 

                    Any
notices required or permitted by the terms of this Agreement or the Plan shall
be given by recognized courier service, facsimile, registered or certified
mail, return receipt requested, addressed as follows:

If to the
Company: 

	
  

 	
  

 
	
  

 	
 Wave2Wave
 Communications, Inc.

 
	
  

 	
 433
 Hackensack Avenue

 
	
  

 	
 Hackensack,
 NJ 07601

 
	
  

 	
 Attention:
 Eric Mann, Chief Financial Officer

 

If to the
Participant at the address set forth on the Stock Option Grant Notice 

or to such
other address or addresses of which notice in the same manner has previously
been given. Any such notice shall be deemed to have been given upon the earlier
of receipt, one business day following delivery to a recognized courier service
or three business days following mailing by registered or certified mail.

	
  

 	
  

 	
  

 
	
  

 	
 17. GOVERNING
 LAW.

 

                    This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware, without giving effect to the conflict of law principles
thereof. For the purpose of litigating any dispute that arises under this
Agreement, the parties hereby consent to exclusive jurisdiction in the State of
New Jersey and agree that such litigation shall be conducted in the state
courts of New Jersey or the federal courts of the United States for the
District of New Jersey.

	
  

 	
  

 	
  

 
	
  

 	
 18. BENEFIT OF
 AGREEMENT.

 

                    Subject
to the provisions of the Plan and the other provisions hereof, this Agreement
shall be for the benefit of and shall be binding upon the heirs, executors,
administrators, successors and assigns of the parties hereto.

	
  

 	
  

 	
  

 
	
  

 	
 19. ENTIRE
 AGREEMENT.

 

                    This
Agreement, together with the Plan, embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof. No statement, representation, warranty,
covenant or agreement not expressly set forth in this Agreement shall affect or
be used to interpret, change or restrict, the express terms and provisions of
this Agreement, provided, however, in any event, this Agreement shall be subject
to and governed by the Plan.

11

	
  

 	
  

 	
  

 
	
  

 	
 20. MODIFICATIONS
 AND AMENDMENTS.

 

                    The
terms and provisions of this Agreement may be modified or amended as provided
in the Plan.

	
  

 	
  

 	
  

 
	
  

 	
 21. WAIVERS AND
 CONSENTS.

 

                    Except
as provided in the Plan, the terms and provisions of this Agreement may be
waived, or consent for the departure therefrom granted, only by written
document executed by the party entitled to the benefits of such terms or
provisions. No such waiver or consent shall be deemed to be or shall constitute
a waiver or consent with respect to any other terms or provisions of this
Agreement, whether or not similar. Each such waiver or consent shall be
effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent.

	
  

 	
  

 	
  

 
	
  

 	
 22. DATA PRIVACY.

 

                    By
entering into this Agreement, the Participant: (i) authorizes the Company and
each Affiliate, and any agent of the Company or any Affiliate administering the
Plan or providing Plan recordkeeping services, to disclose to the Company or
any of its Affiliates such information and data as the Company or any such
Affiliate shall request in order to facilitate the grant of options and the administration
of the Plan; (ii) waives any data privacy rights he or she may have with
respect to such information; and (iii) authorizes the Company and each
Affiliate to store and transmit such information in electronic form.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

12

Exhibit
A

NOTICE OF EXERCISE OF STOCK OPTION

 [Form for Unregistered Shares]

To:     Wave2Wave
Communications, Inc.

Ladies and
Gentlemen:

          I
hereby exercise my Stock Option to purchase __________ shares (the “Shares”) of
the common stock, $0.0001 par value, of Wave2Wave Communications, Inc. (the
“Company”), at the exercise price of $_____ per share, pursuant to and subject
to the terms of that certain Stock Option Agreement between the undersigned and
the Company dated ________, 200_.

          I
am aware that the Shares have not been registered under the Securities Act of
1933, as amended (the “1933 Act”), or any state securities laws. I understand
that the reliance by the Company on exemptions under the 1933 Act is predicated
in part upon the truth and accuracy of the statements by me in this Notice of
Exercise.

          I
hereby represent and warrant that (1) I have been furnished with all
information which I deem necessary to evaluate the merits and risks of the
purchase of the Shares; (2) I have had the opportunity to ask questions
concerning the Shares and the Company and all questions posed have been
answered to my satisfaction; (3) I have been given the opportunity to obtain
any additional information I deem necessary to verify the accuracy of any
information obtained concerning the Shares and the Company; and (4) I have such
knowledge and experience in financial and business matters that I am able to
evaluate the merits and risks of purchasing the Shares and to make an informed
investment decision relating thereto.

          I
hereby represent and warrant that I am purchasing the Shares for my own
personal account for investment and not with a view to the sale or distribution
of all or any part of the Shares.

          I
understand that because the Shares have not been registered under the 1933 Act,
I must continue to bear the economic risk of the investment for an indefinite
time and the Shares cannot be sold unless the Shares are subsequently
registered under applicable federal and state securities laws or an exemption
from such registration requirements is available.

          I
agree that I will in no event sell or distribute or otherwise dispose of all or
any part of the Shares unless (1) there is an effective registration statement
under the 1933 Act and applicable state securities laws covering any such
transaction involving the Shares or (2) the Company receives an opinion of my
legal counsel (concurred in by legal counsel for the Company) stating that such
transaction is exempt from registration or the Company otherwise satisfies
itself that such transaction is exempt from registration.

Exhibit A-1

          I
consent to the placing of a legend on my certificate for the Shares stating
that the Shares have not been registered and setting forth the restriction on
transfer contemplated hereby and to the placing of a stop transfer order on the
books of the Company and with any transfer agents against the Shares until the
Shares may be legally resold or distributed without restriction.

          I
understand that at the present time Rule 144 of the Securities and Exchange
Commission (the “SEC”) may not be relied on for the resale or distribution of
the Shares by me. I understand that the Company has no obligation to me to register
the sale of the Shares with the SEC and has not represented to me that it will
register the sale of the Shares.

          I
understand the terms and restrictions on the right to dispose of the Shares set
forth in the 2009 Employee, Director and Consultant Equity Incentive Plan and
the Stock Option Agreement, both of which I have carefully reviewed. I consent
to the placing of a legend on my certificate for the Shares referring to such
restriction and the placing of stop transfer orders until the Shares may be
transferred in accordance with the terms of such restrictions.

          I
have considered the Federal, state and local income tax implications of the
exercise of my Option and the purchase and subsequent sale of the Shares.

          I
am paying the option exercise price for the Shares as follows:

	
  

 	
  

 	
  

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 
	
  

 	
 Please issue
 the Shares (check one):

 
	
  

 	
  

 	
  

 
	
  

 	
 o

 	
 to me; or

 
	
  

 	
  

 	
  

 
	
  

 	
 o

 	
 to me and
 ________________, as joint tenants with right of survivorship

 

and mail the
certificate to me at the following address:

	
  

 
	

 

 
	
  

 
	

 

 
	
  

 
	

 

 

Exhibit A-2

          My
mailing address for shareholder communications, if different from the address
listed above is:

	
  

 
	

 

 
	
  

 
	

 

 
	
  

 
	

 

 

	
  

 	
  

 
	
  

 	
 Very truly
 yours,

 
	
  

 	
  

 
	
  

 	

 

 
	
  

 	
 Participant
 (signature)

 
	
  

 	
  

 
	
  

 	

 

 
	
  

 	
 Print Name

 
	
  

 	
  

 
	
  

 	

 

 
	
  

 	
 Date

 
	
  

 	
  

 
	
  

 	

 

 
	
  

 	
 Social
 Security Number

 

Exhibit A-3

Exhibit
B

NOTICE OF EXERCISE
OF STOCK OPTION

[Form for
Employees for Shares registered in the United States]  

To:     Wave2Wave
Communications, Inc.

IMPORTANT NOTICE: This form of Notice of Exercise may
only be used at such time as the Company has filed a Registration Statement
with the Securities and Exchange Commission under which the issuance of the
Shares for which this exercise is being made is registered and such
Registration Statement remains effective.

Ladies and Gentlemen:

          I
hereby exercise my Stock Option to purchase _________ shares (the “Shares”) of
the common stock, $0.0001 par value, of Wave2Wave Communications, Inc. (the
“Company”), at the exercise price of $________ per share, pursuant to and
subject to the terms of that Stock Option Grant Notice dated _______________,
200_.

          I
understand the nature of the investment I am making and the financial risks
thereof. I am aware that it is my responsibility to have consulted with
competent tax and legal advisors about the relevant national, state and local
income tax and securities laws affecting the exercise of the Option and the
purchase and subsequent sale of the Shares.

          I
am paying the option exercise price for the Shares as follows:

	
  

 
	

 

 

          Please
issue the Shares (check one):

          o to me; or 

          o to me
and ____________________________, as joint tenants with right of survivorship,

	
  

 	
  

 
	
  

 	
 at the following address:

 
	
  

 	
  

 
	
  

 	

 

 
	
  

 	

 

 
	
  

 	

 

 

Exhibit B-1

          My
mailing address for shareholder communications, if different from the address
listed above, is:

	
  

 	
  

 
	
  

 	

 

 
	
  

 	

 

 
	
  

 	

 

 

	
  

 	
  

 
	
  

 	
 Very truly yours,

 
	
  

 	
  

 
	
  

 	

 

 
	
  

 	
 Participant
 (signature)

 
	
  

 	
  

 
	
  

 	

 

 
	
  

 	
 Print Name

 
	
  

 	
  

 
	
  

 	

 

 
	
  

 	
 Date

 
	
  

 	
  

 
	
  

 	

 

 
	
  

 	
 Social Security
 Number

 

Exhibit B-2

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