10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2005

Commission File No. 000-26728

TALK AMERICA HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	23-2827736
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)
6805 Route 202	18938
New Hope, PA	(zip code)
(Address of principal executive offices)

(215) 862-1500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
None	Not applicable

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, Par Value $.01 Per Share

Rights to Purchase Series A Junior Participating Preferred Stock

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [ ] No [ X]

Indicate by check mark if the registrant is not required to file reports pursuant to section 13 or Section 15(d) of the Act.

Yes [ ] No [ X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment of this Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]Accelerated filer [ X ]Non-accelerated filer [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes [ ] No [ X]

As of June 30, 2005, the aggregate market value of the voting stock held by non-affiliates of the registrant, based on the average of the high and low prices of the common stock on June 30, 2005 of $10.04 per share as reported on the Nasdaq National Market, was approximately $277,788,698 (calculated by excluding solely for purposes of this form outstanding shares owned by directors and executive officers).

As of March 1, 2006, the registrant had issued and outstanding 30,396,192 shares of common stock, par value $.01 per share.

DOCUMENTS INCORPORATED BY REFERENCE

None.

ITEMS OMITTED PURSUANT TO RULE 12b-25

Item 6, Item 7, Item 8, Item 9A, Item 15 - Financial Statement Schedules and Exhibits 23, 31 and 32.

TALK AMERICA HOLDINGS, INC. AND SUBSIDIARIES

INDEX TO FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2005

ITEM NO.	PAGE NO.
PART I
1.     Business.	2
1A.  Risk Factors	33
1B.  Unresolved Staff Comments	41
2.     Properties	42
3.     Legal Proceedings	42
4.     Submission of Matters to a Vote of Security Holders	42
PART II
5.    Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases        of Equity Securities	44
9.     Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	44
9B.  Other Information	44
PART III	45
PART IV
15.   Exhibits	45

Unless the context otherwise requires, references to "us," "we," and "our" or to "Talk America" refer to Talk America Holdings, Inc. and its subsidiaries.

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PART I

Cautionary Note Concerning Forward-Looking Statements

 Certain of the statements contained in this Form 10-K Report may be considered "forward-looking statements" for purposes of the securities laws. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These forward-looking statements are intended to provide our management’s current expectations or plans for our future operating and financial performance, based on our current expectations and assumptions currently believed to be valid. For these statements, we claim protection of the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of forward-looking words or phrases, including, but not limited to, "believes," "estimates," "expects," "expected," "anticipates," "anticipated," "plans," "strategy," "target," "prospects" and other words of similar meaning in connection with a discussion of future operating or financial performance. Although we believe that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to have been correct.

 All forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from those expressed or implied in the forward-looking statements. This Form 10-K Report includes important information as to risk factors in the "Risk Factors" section and in the "Business" section under the headings “Business Strategies,” "Business Operations," "Competition" and "Regulation" and in "Management’s Discussion and Analysis of Financial Condition and Results of Operations." In addition to those factors discussed in this Form 10-K Report, you should see our other reports on Forms 10-K, 10-Q and 8-K subsequently filed with the Securities and Exchange Commission from time to time for information identifying factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements.

ITEM 1. BUSINESS.

Overview

Talk America Holdings, Inc., through its subsidiaries, is a leading competitive communications services provider offering integrated voice and data services, including local, long distance, enhanced voice features and dedicated Internet access services, to commercial (primarily small and medium-sized business) and residential customers. We are focused on markets where we have our own networking assets. Today, we are collocated in 313 end offices in Michigan, Ohio, Kentucky, Tennessee, North Carolina, Louisiana, Mississippi, Alabama, Florida and Georgia. As of December 31, 2005, including the lines of Network Telephone Corporation, which we acquired on January 3, 2006, we had approximately 745,000 local voice and data equivalent lines, of which approximately 466,000 were on our own network. The balance of our customers are“off-net” (that is, our services over another carrier’s networking facilities) and represent a large, profitable base of bundled phone service customers that we service using the wholesale operating platforms of the incumbent local exchange companies.

We expanded into the commercial business market with the acquisition in July 2005 of LDMI Telecommunications, Inc. (“LDMI”), a privately held facilities-based competitive local exchange provider serving business and residential customers primarily in Michigan and Ohio. On January 3, 2006, we further significantly expanded our network and commercial business through our acquisition of Network Telephone Corporation (“NTC”), a privately held facilities based competitive local exchange provider serving commercial customers in the Southeast. During 2005, we also completed the construction of our network in Michigan, integrated this network with LDMI’s network assets and migrated over 200,000 lines from the incumbent local exchange company wholesale platform to our network.

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Our business strategy is to continue to expand our network and grow our “on-net” (that is, our services over our own networking facilities) customer and revenue base through (i) organic growth in our core markets, serving both commercial and residential customers; (ii) additional acquisitions that either supplement our existing markets or offer expansion into new markets; and (iii) enhancement of our product portfolio. Growth in our business, both commercial and residential, on our network will permit us to leverage our investment in our network facilities due to the complementary telecommunication traffic or usage patterns of these customer bases.

We have developed our own proprietary integrated order processing, provisioning, leads management, billing, payment, collection, customer service and information systems that enable us to provide high-quality service to our customers. We have automated the business processes required to migrate our customers off the incumbent local exchange company platform to our local network. To promote our services and to generate new sales, we use both our internal and partner sales forces and we use our own sales and customer service centers. We focus on providing consumers value through competitively priced plans designed to fit their particular telecommunication needs, broad feature selections, consolidated billing and customer service.

Talk America Inc. (formerly, Talk.com Holding Corp. and Tel-Save, Inc.), our predecessor and now our principal operating subsidiary, was incorporated in Pennsylvania in May 1989 as a provider of long distance phone service. We were incorporated in June 1995. In 2000, we decided to expand beyond our historical long distance service offerings and utilize the unbundled network element platform to enter the large local telecommunications market and diversify our product portfolio through the bundling of local service with our core long distance service offerings. The address of our principal executive offices is 6805 Route 202, New Hope, Pennsylvania 18938 and our telephone number is (215) 862-1500.Our web address iswww.talkamerica.com. We make available free of charge on our website, www.talkamerica.com, our annual report on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, and amendments to our reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we file such material with, or furnish it to, the Securities and Exchange Commission.

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OUR SERVICES AND PRODUCTS

We provide our commercial and residential customers with a variety of bundled phone service packages, stand-alone long distance services, data and Internet access products and a broad range of business communication services.

Commercial Services and Products

We provide our business customers a wide range of voice, data and advanced services designed to meet their needs. Our SmarT product, which utilizes a single connection to deliver both integrated voice service and high-speed data service, is our primary commercial product for new sales; our primary competitor, AT&T, does not offer an equivalent service. In 2006, we will continue to develop new commercial products to expand our portfolio, while introducing existing products and services into markets that were previously not serviced.

Voice Services. Our commercial voice service offerings allow our business customers to build the calling plan that best suits their organization's needs. We offer basic dial tone service and vertical features, such as call forwarding, line hunting and voicemail. We also offer domestic and international long distance services, both bundled with local voice services and on a stand-alone basis. These voice services are available with unlimited local and long distance calls or calls billed on a per-minute basis, depending upon calling patterns and the needs of the business.

Data Services. Our commercial data service offerings are designed to provide our customers with a full range of data services. We offer high-speed data transmission services with data connection speeds as high as 6.0 megabytes per second, or Mbps. We also offer high-speed data transmission services that are integrated with a voice product and delivered simultaneously over the same connection. In addition, we are one of only four companies in the United States certified as an ANX (Advanced Network Exchange) Service Provider, which allows us to supply data services to certain types of enterprises, such as Ford, Dow Chemical, General Motors, Delphi, and Visteon.

Advanced Services. We offer business customers several advanced services to assist them with their data and business needs, including: (i) data hosting services (shared, dedicated and collocated), (ii) managed security services (firewall, virtual private networking, anti-virus/SPAM, vulnerability assessment and compliance reporting), and (iii) professional services management (technical project management, wide and local area network, or WAN/LAN, design and development, technical assessment and maintenance).

Residential Services and Products

We provide residential customers with a wide-range of voice calling plans and, beginning with our deployment of networking assets in Michigan in 2005, data services.

Voice Services. We offer our residential customers the flexibility to create their own phone service package, including local phone service, long distance phone service or a combination thereof. We offer several different local and long distance calling plans tailored to the customer’s calling needs. Our local phone service customers receive free “member-to-member” calling and may add additional features and services to their service, including enhanced domestic and international calling plans, caller identification and voicemail.

Data Services.Customers who receive our local phone service may also purchase data services from us. We offer both digital subscriber line services (DSL) and dial-up access services. Our DSL service, which utilizes ADSL2+ technology, is available to customers on our local network whose wiring permits it. This service provides access speeds of up to 4.0 Mbps download speed and enables us to offer download speeds of up to 8.0 Mbps. We offer a standard and accelerated dial-up access service to all of our phone service customers. The accelerated dial-up services utilize compression, caching and other technologies that reduce the time for certain web pages to download to users' computers when compared to standard dial-up access services.

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NETWORK OPERATIONS

How We Provide Local Voice and Data Services

Overview

We offer telecommunications services to commercial (small and medium size businesses) and residential customers in our markets through either the use of our own network facilities and the unbundled network element loops or T-1 circuits of the incumbent local exchange carriers, or, through wholesale agreements with carriers.

In 2003, we began deploying networking assets in Michigan. At the end of 2004, we had approximately 25,000 local voice equivalent lines on our own network in 8 end offices in Michigan. In July 2005, in an effort to both expand our networking footprint and accelerate our market entry into the business communication services segment, we acquired LDMI, a facilities-based communications provider in Michigan and Ohio. The deployment of our own networking assets, along with the acquisition of LDMI, enabled us to migrate more than 200,000 local voice equivalent lines to our own network in 2005 and end the year with 341,000 local voice and data equivalent lines on our own network in 151 end offices in Michigan and Ohio. In January 2006, we acquired NTC, a facilities-based communications provider in the Southeast United States. The acquisition of NTC added 156 more end offices in 8 states throughout the Southeast and 125,000 local voice and data equivalent lines on our network.  Subsequent to the end of the year we have opened 6 additional end offices in the Southeast United States.  Prior to construction of our network, we delivered our services exclusively through the use of the unbundled network element platforms of the incumbent local exchange companies. The following map details our local networking assets as of March 1, 2006:

       

As a result of these acquisitions, we have expanded into the commercial market and now provide a full suite of voice and data offerings, including specialized services such as hosted applications and security services in these areas to small and medium-sized business customers. In addition to adding significantly to our commercial services capabilities, these transactions provide residential growth opportunities in our networking markets while allowing us to realize capital expenditure savings and operating synergies.

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Composition of Our Network

Our local network is comprised of equipment and facilities that are either owned or leased by us and certain telecommunication services for which we contract with a variety of other carriers. We maintain certain pieces of equipment that are collocated in end office sites owned or leased by AT&T (formerly SBC), the incumbent local exchange company in Michigan and Ohio, and by BellSouth, the incumbent local exchange company throughout the Southeast United States. The incumbent local exchange companies provide us with access to these end offices through both our interconnection agreements with the incumbent local exchange company or through state and/or federal regulations that require the incumbent local exchange companies to provide us access to certain elements. Such access, however, may be conditioned upon our paying charges for upgrading the power supply or physical layout of the end office.

In order to provide a customer with voice and data service on our local network delivered via a copper loop, we must first submit an order with the incumbent local exchange company to move, or “hot cut,” the customer’s existing copper loop. The loop is the copper telephone line that connects the customer’s premises to the incumbent local exchange company’s switch. We hot cut transfer the customer’s loop from the incumbent local exchange company’s switch to our loop carrier equipment in the end office at the incumbent local exchange company’s end office assigned to that customer.

Upon confirmation that the customer line has been switched to either our digital loop carrier and digital subscriber line access multiplexer equipment or our broadband loop carrier equipment, we update numerous external databases, including E911 databases, which, as the customer’s local phone provider, we are required to timely and accurately update.

Once the loop is cut over to our network, we switch local voice traffic between the customer’s premises and the public switched telephone network using either circuit switch-based or packet switch-based technology, depending upon the location of the customer and how our network is deployed in that geographic area.

Like many networks today, most of our network carries local voice traffic via a circuit switch-based network. Circuit switch-based systems establish a dedicated channel for each telecommunication signal (such as a telephone call for voice or fax), maintain the channel for the duration of the call, and disconnect the channel at the conclusion of the call. The balance of our network utilizes packet switch-based systems, a newer technology that we began introducing in 2005. Under packet switch-based systems, the information to be transmitted is formatted into a series of shorter digital messages called “packets”. In addition to supporting data, packet switch-based systems have been used for long haul voice traffic and is now being deployed to support local phone service. Each packet consists of a portion of the complete message plus the addressing information to identify the destination and return address. A key feature that distinguishes Internet architecture from the public telephone network is that on the packet-switched Internet, a single dedicated channel between telecommunication points is not required. Packet switch-based systems may offer several advantages over circuit switch-based systems, particularly the ability to commingle packets from several telecommunications sources together simultaneously onto a single channel. For most telecommunications, particularly those with bursts of information followed by periods of “silence,” the ability to commingle packets provides for superior network utilization and efficiency, resulting in more information being transmitted through a given telecommunication channel. We believe that, in the future, most new networks will be based on packet switching to take advantage of transport efficiencies, more open standards for interoperability, lower capital costs and easier deployment and maintenance.

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In Grand Rapids, Michigan and Atlanta, Georgia, we have deployed a newly developed soft-switch technology. The soft-switch is a distributed computer system that performs the same functions as a circuit switch. It can support both circuit and packet-switched communications. We use this technology to complement and relieve traffic from our Lucent 5ESS-2000 circuit switches. Soft-switch technology is currently being used by very few residential phone providers and, to our knowledge, has not been used on this scale. We expect however, that, if successful, the soft-switched technology will enable us to enter into more markets because of the lower cost of the soft-switch technology compared to the cost of traditional circuit switch technology.

We continue to actively explore other new networking technology opportunities with a variety of vendors in order to decrease our cost of delivering service, reduce our reliance upon the incumbent local exchange companies and provide local telephone services through new, innovative methods of delivery. 

Internet Access Services

We offer SDSL, ADSL2+, and T1 Internet access to customers who are on our local network. These services are provided through either broadband loop carrier equipment or digital loop carrier equipment and digital subscriber line (or DSL) access multiplexer equipment. We are dependent upon a small number of vendors to provide us with this equipment and failure to attain the equipment in a timely manner will affect our ability to offer these services. Some of our network customers will not be able to receive ADSL service due to line conditions, the presence of a fiber-optic cable connection to their premises and other limitations of the incumbent local exchange company’s line facilities and customer premises wiring. We utilize a third party vendor to supply modems to our ADSL customers to enable them to establish an ADSL connection at their premises. Commercial customers receive their modems and routers via our installation and activation process, which includes a technician visit to install, test and verify service delivery to each business customer.

We also offer dial-up Internet access service, whether or not such customer is on our local network. The service is provided through a third party vendor, who also hosts the email service for both our dial-up and ADSL services.

Collocation Equipment

Each collocation at an incumbent local exchange company’s end office facility contains a standard configuration of equipment, including DSL and DS-1 aggregation equipment, Internet protocol (or IP) and ATM routing equipment and facility interface equipment to connect to each carrier we are collocated with. The collocations generally use a DS3 uplink transport to link the collocation to the backbone of our network. These DS3 interconnects carry voice, data and in-band management traffic. Each collocation is also outfitted with remote access terminal equipment in order to assess and diagnose any collocation network anomalies and provide remote repair whenever possible.

Our Atlanta, Georgia and Michigan collocations have recently been augmented with the broadband loop carrier technology offering IP-based connectivity for ADSL2+ and IP controlled voice services over the same copper loop. We also have TDM transport equipment to provide multiplexing and fiber interfaces in the more heavily populated collocations.

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Transport

The Michigan and Ohio customer lines in each collocated end office are aggregated and connected to our Lucent 5ESS-2000 switches, using DS3 or higher capacity transmission equipment that we lease primarily from AT&T, the incumbent local exchange company, supplemented by leases with competitive access providers. The Southeast customer lines in each end office are aggregated and connected to our Lucent 5ESS-2000 switch located in Atlanta, Georgia, and Distinctive Remote Modules in 12 other Southeast locations, using DS3 or higher capacity transmission equipment that we lease primarily from BellSouth, the incumbent local exchange company, supplemented by leases with competitive access providers. This transmission is referred to as transport. As we expand our local switching capacity during 2006, these dedicated transport facilities, dark fiber (otherwise unused fiber optic cable that is leased by us for transport), and entrance facilities may, under the FCC’s rules, be unavailable to us on an unbundled basis at cost-based rates along certain routes. This may adversely impact us where our own switching facilities have been deployed and could substantially impede our plans to deploy additional network facilities. We could be forced to use other means to effect this deployment, including the use of facilities purchased from the incumbent local exchange carrier at higher tariffed special access rates or transport services purchased from other competitive access providers.   In either event, our cost of service could rise dramatically and our plans for a service roll-out using our own network facilities could be delayed substantially or derailed entirely.

Our Lucent 5ESS-2000 switches are generally considered extremely reliable and feature the Digital Networking Unit-SONET technology. The Digital Networking Unit is a switching interface that is designed to increase the reliability of these switches and to provide much greater capacity in a significantly smaller footprint. We deliver the line side services to our customers through a packet gateway that converts the traditional voice services to packet-based services in order to integrate voice and data on to a single customer loop. This loop is terminated to a customer router that delivers analog voice and packet-based data to each customer premises. Our switches are connected to other carriers in the public switched telephone network through circuit trunking equipment. We lease the circuit trunking equipment primarily from the incumbent local exchange companies. If the incumbent local exchange companies are no longer required to provide this circuit trunking equipment or to provide it at Total Element Long Run Incremental Cost, or TELRIC, based rates, we will be forced to acquire this trunking equipment at higher rates from either a competitive access provider, if available, or, if they are willing to lease the trunking equipment to us, from the incumbent local exchange company. The equipment that comprises this physical layer of our network can support both voice and data communications technologies.

How We Provide Our Long Distance Phone Services

Our long distance network is comprised of equipment and facilities that are either owned or leased by us. We contract for certain telecommunication services with a variety of other carriers. We own, operate and maintain three Lucent 5ESS-2000 switches in our long distance network, which feature the Digital Networking Unit-SONET technology. The switches are connected to each other by connection lines and digital cross-connect equipment that we own or lease. We also have installed lines to connect our long distance switches to switches owned by various local telecommunication service carriers. We are responsible for maintaining these lines and have entered into a contract with a third party vendor with respect to the monitoring, servicing and maintenance of this equipment. In addition to the three long distance switches we have in service currently, in 2005, we decommissioned two of our other switches as part of our network optimization.

With respect to connections to local carriers, international and operator assisted services, in December 2003, we entered into a four-year master carrier agreement with AT&T. The agreement provides us with a variety of services, including transmission facilities to connect our long distance network switches as well as services for international calls, local traffic, international calling cards, overflow traffic and operator assisted calls. The agreement also provides that, subject to certain terms and conditions, we will purchase these services exclusively from AT&T during the term of the agreement, provided, however, that we are not obligated to purchase exclusively in certain cases, including if such purchases would result in a breach of any contract with another carrier that was in place when we entered into the AT&T agreement, or if vendor diversity is required. Our AT&T agreement establishes pricing and provides for annual minimum commitments based upon usage as follows: 2006 - $32 million and 2007 - $32 million and obligates us to pay 65 percent of the revenue shortfall, if any. In February 2006, we amended the AT&T agreement to provide that certain services that we purchase or may purchase from AT&T (and its affiliates) will now count toward the minimum commitment. With this amendment we anticipate that we will not be required to make any shortfall payments under this contract. To the extent that we are unable to meet these minimum commitments, however, our costs of purchasing the services under the agreement would correspondingly increase.

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Additional Network Technologies and Management Solutions

We have extensive testing facilities in Pensacola, Florida and Detroit, Michigan, where we conduct rigorous testing of new technologies including service provider and customer premises equipment. As network technologies advance, we are continuing to evaluate network transport and have kept our infrastructure flexible enough to migrate to any topology when beneficial.

We also operate a centralized network management center in Reston, Virginia and regionalized subscriber management centers in Detroit, Michigan and Pensacola, Florida. Our network management center monitors our network elements facilities and elements 24 hours a day, 7 days a week to identify and resolve any network anomalies and/or customer -related service issues. Our regionalized subscriber monitoring centers provide proactive customer monitoring for the commercial customer base and are directly aligned with switch technicians and regional network technicians in the field to quickly and accurately respond to any requirement identified.

Telecommunications and data technologies evolve quickly in this industry. We believe that our network design positions us to rapidly implement future voice and data switching technology and seamlessly migrate to new topologies while keeping costs low and delivering quality services to our customers.

INTEGRATED INFORMATION SYSTEMS

We have integrated leads management, order processing, provisioning, billing, payment, collection, customer service and information systems that enable us to offer and deliver high-quality, competitively priced telecommunication services to our customers and process millions of call records each day. These operational support systems were developed by us and customized for our business and operational requirements and, due to the system's component-based architecture, provide an extensible framework for the introduction of new products and services.

We use "state-of-the-art" software and hardware applications and products to support our systems and development efforts. During 2005, we successfully migrated our Talk America Inc. database systems from an Informix to an Oracle architecture. As a result of our acquisition of LDMI and NTC, we are currently operating and maintaining three separate information systems. In 2006, we will begin to enhance and consolidate the database systems to support our commercial and residential product offerings on a single integrated operating system, but there can be no assurances that we will be able to integrate these systems timely and successfully. Through dedicated electronic connections with our local and long distance networks and the incumbent local exchange companies, we have designed our systems to process information on a "real time" basis. We have automated the business processes required to deploy and support our local circuit switch-based network, and continue to automate the business processes required to provide DSL service. The information functions of our systems are designed to provide easy access to all information about a customer, including volumes and patterns of use. This information can be used to identify emerging customer trends and to respond with services to meet customers' changing needs. This information also allows us to identify unusual usage by an individual customer, which may indicate fraud. FCC rules, however, limit our use of customer proprietary network information. See "Regulation."

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Our core operational support systems include the following:

·   Our leads database system is utilized in the marketing of our telecommunication services. The leads database system enables us to alter telemarketing campaigns to track areas where mass advertisements are airing, manage the product sales price by customer, zone and state, maintain customer credit information, and comply with various regulatory requirements.

·   Our automated order processing system enables us to shorten the customer provisioning time cycle and reduce associated costs. Prior to submitting an order to provision a customer to our service, our system processes the customer's credit history, and, once the customer's credit is approved, the customer's service record detailing the customer's existing phone service is immediately verified. In addition, our system has enabled us to significantly increase our customer provisioning rate for qualified and verified orders while reducing the number of orders that are rejected by the incumbent local exchange company, reducing manual work requirements.

·   Our automated service provisioning system enhances our ability to add customer lines to our telecommunication service and to change the features associated with that particular customer's service, reducing manual work requirements.

·   Our billing system enables us to preview and run a bill cycle for the many different, tailored service packages, increasing customer satisfaction while minimizing revenue leakage in the provision of local telecommunication service.

·   Our automated payment and collections management system is integrated with our billing and customer relationship management system. This system increases the efficiency of our collection process, accelerates the recovery of accounts receivable and assists in the retention of valuable customers.

·   Our customer relationship manager system, enables our customer service representatives to access data in a real-time, organized manner, while the representative is speaking with the customer, thereby reducing the length of customer service calls and improving the customer experience.

In addition, we maintain our own web sites at www.talkamerica.com, www.talk.com, www.ldmi.com and www.networktelephone.net to provide for customer sign-up and to provide customers and potential customers with information about our products and services as well as billing information and customer service.

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SALES AND MARKETING

We focus on targeting, acquiring and retaining profitable commercial and residential customers that we can directly provision to our own network platform by providing savings, simplicity and service. We currently market to customers to whom we can provide service over our own network in Michigan, Ohio and the Southeast United States. We continue to seek new marketing partners and arrangements to expand both our opportunities to attract customers to our services and the products and services that we offer to our customers.

We use diverse sales and marketing channels to reach the commercial and residential markets with our service offerings. Our sales and marketing efforts focus on (i) marketing to business customers voice, data and advanced services applications, and (ii) marketing to residential customers a bundle of local and long distance phone services with complementary data services. We market to commercial customers utilizing the Talk America, LDMI and Network Telephone brands and residential customers utilizing the Talk America brand.

We market our commercial services in the Michigan and Ohio markets predominantly through our direct sales force and partner sales force, and, in the Southeast markets, almost exclusively through our direct sales force. We purchase business lead databases to assist our direct sales force in targeting particular customers. Our commercial independent agents also usually provide other types of communication or data services to the businesses to which they market our products and services. Often, these customers rely heavily upon the independent agent in making a decision regarding their voice and data services.

We market our residential services within our targeted markets through the following channels:

·   Telemarketing - We operate our own call centers and purchase residential lead databases utilized for targeted, professional and courteous outbound telesales campaigns.

·   Direct Mail - We purchase residential lead databases utilized for demographically targeted direct mail campaigns designed to direct inbound calls to our telemarketing centers.

·   Referrals - We solicit potential customers by gathering their names from our existing customers through the use of referral promotions and our free member-to-member calling.

·   Online Marketing - We have developed a productive online marketing presence, through traditional online media and business relationships.

·   Direct Sales - Utilizing independent agents, we solicit new customers in targeted geographic areas.

·   Broadcast Media - We solicit inbound subscriber calls through advertising on television, radio and in print.

We employ a targeted approach to customer acquisition and use database-marketing tools to identify and prioritize target customers. For our business customers, we offer customized communications, data, Internet and specialized network solutions that permit us to work with our business customers to meet their needs. For our residential customers, we offer our customers the ability to build their own telecommunications package beginning with an extended local calling area, a diverse selection of intrastate and interstate calling plans, discounted feature packages and “a la carte” feature selection, and several options for Internet access. While we do not actively market our stand-alone long distance telecommunications service, we offer the long distance telecommunications service when contacted by persons located in those regions where local service is unavailable. We also add long distance customers when the customer requests its local service provider to provide the customer with our long distance telecommunications service. Customers can switch to us online, through a telesales representative, through a direct sales agent, or through an authorized independent agent, each of which uses consultative sales tools to assist the customer’s creation of the right plan for their telecommunications needs.

At the point of sale, we provide each customer with an estimate of their first month’s invoice, including all fees and taxes. Customers are able to keep their same phone lines and number, can easily add features, and, generally within days of the sale, residential customers are switched to our service and receive a personalized welcome kit explaining their service. For our business customers, we enter into service relationships through negotiated contracts that specify the services we offer and that bind the customers to a term commitment, with penalties for early termination.

We only actively market our services in those markets where we can provision customers directly to our own network facilities. In addition, we offer, but do not actively market, services to customers that cannot be provisioned to our own network facilities and that we service using services purchased from the incumbent local exchange company under negotiated wholesale arrangements.

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REGULATION OF OUR SERVICES

Overview

We are subject to federal, state, local and foreign laws, regulations, and orders affecting the rates, billing, terms, and conditions of certain of our service offerings, our costs and other aspects of our operations, including our relations with other service providers. Regulation varies in each jurisdiction and may change in response to judicial proceedings, legislative and administrative proposals, government policies, competition and technological developments. We cannot predict what impact, if any, such changes or proceedings may have on our business or results of operations, and we cannot guarantee that regulatory authorities will not raise material issues regarding our compliance with applicable regulations.

The FCC has jurisdiction over our facilities and services to the extent they are used in the provision of interstate or international communications services or as otherwise required by federal law. State regulatory commissions, commonly referred to as PUCs, generally have jurisdiction over facilities and services to the extent they are used in the provision of intrastate services. Local governments may assert authority to regulate aspects of our business through zoning requirements, permit or right-of-way procedures and franchise fees. Foreign laws and regulations apply to communications that originate or terminate in a foreign country. Generally, the FCC and state public utility commissions do not regulate Internet, video conferencing and certain data services, although the underlying communications components of such offerings may be regulated. Our operations also are subject to various environmental, building, safety, health and other governmental laws and regulations.

Federal law generally preempts state statutes and regulations that restrict the provision of competitive local, long distance and enhanced services; consequently, we generally are free to provide the full range of local, long distance and data services in every state. While this federal preemption greatly increases our potential for growth, it also increases the amount of competition to which we may be subject.

Federal Regulation

The Communications Act of 1934, as amended, or the “1934 Act,” grants the FCC authority to regulate interstate and foreign communications by wire or radio. We are regulated by the FCC as a non-dominant carrier and are subject to less comprehensive regulation than dominant carriers. Nevertheless, we remain subject to numerous requirements of the Communications Act, applicable to most common carriers, which require us to offer service upon reasonable request and pursuant to just and reasonable charges and terms that are not unjustly or unreasonably discriminatory. The FCC has authority to impose additional requirements on non-dominant carriers.

The Telecommunications Act of 1996, or the “1996 Act,” amended the 1934 Act to eliminate many barriers to competition in the U.S. communications industry, by setting standards for relationships between communications providers, including between new entrants, such as our company, and the Regional Bell Operating Companies and other incumbent local exchange companies. In general, the 1996 Act requires incumbent local exchange companies to provide competitors with nondiscriminatory access to, and interconnection with, the incumbent local exchange company networks, and to provide unbundled network elements at cost-based prices. The FCC and state public utility commissions have adopted extensive rules to implement the 1996 Act, and revisit such regulations on an ongoing basis in light of court decisions and as marketplaces evolve.

Legislation has recently been introduced in Congress that would rewrite substantial portions of the 1996 Act. Any effort to reform the 1996 Act could result in changes that would materially reduce the obligations of the incumbent local exchange companies to interconnect with, or provide unbundled network elements to, competitors. Any such legislative change could have a material adverse impact on our business and operations.

Long Distance Competition

Section 271 of the 1934 Act, enacted as part of the 1996 Act, established a process by which a Regional Bell Operating Company could obtain authority to provide long distance service in a state within its region. The process required demonstrating to the FCC that the Regional Bell Operating Company has adhered to a 14-point competitive checklist and that granting such authority would be in the public interest. Each of the Regional Bell Operating Companies already has received FCC approval to provide long distance services in each state within its respective region, resulting in increased competition in certain markets and services. The Regional Bell Operating Companies have a continuing obligation to comply with the checklist. Section 272 of the 1934 Act requires that, for a period of three years after receiving Section 271 approval in any state (absent an FCC extension), a Regional Bell Operating Company must comply with certain other structural and operational safeguards, including the provision of in-region long distance service through a separate affiliate.

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Local Service Regulation

The 1996 Act required the FCC to establish national rules implementing the local competition provisions of the 1996 Act, which impose duties on all local exchange carriers, including competitive local exchange companies such as our company, to provide network interconnection, reciprocal compensation, resale, number portability and access to rights-of-way.

The 1996 Act imposes additional duties on incumbent local exchange companies, including the duty to provide access on an unbundled basis to individual network elements on non-discriminatory terms and cost-based rates; to allow competitors to interconnect with their networks in a nondiscriminatory manner at any technically feasible point on their networks; to permit collocation of competitors' equipment at the incumbent local exchange company premises; and to offer retail services at wholesale rates to competitive local exchange companies for resale.

Unbundled Network Elements

Access to incumbent local exchange companies’ unbundled network elements at cost-based rates is critical to our business. Historically, our local telecommunications services were predominantly provided through the use of combinations of unbundled network elements, and it was the availability of cost-based rates for these elements that had enabled us to price our local telecommunications services competitively. However, the obligation of incumbent local exchange companies to provide the unbundled network elements upon which we have relied at such cost-based rates is the subject of recent regulatory action that resulted in the availability of these elements being substantially reduced or otherwise subject to significantly higher, non-cost-based rates.

The 1996 Act requires incumbent local exchange companies to provide requesting telecommunications carriers with nondiscriminatory access to network elements on an unbundled basis at any technically feasible point on rates, terms and conditions that are just, reasonable and nondiscriminatory, in accordance with the other requirements set forth in Sections 251 and 252 of the 1934 Act. The 1996 Act gives the FCC authority to determine which network elements must be made available to requesting carriers such as us. For network elements that are not proprietary, the Commission is required to determine whether the failure to provide access to such network elements would impair the ability of the carrier seeking access to provide the services it seeks to offer. The FCC has determined that most network elements are nonproprietary in nature and thus are subject to the "impair" standard. The FCC's initial list of incumbent local exchange company network elements that are required to be unbundled on a national basis was first released in 1996 and has been subject to almost constant review and revision since then.

When the FCC first adopted unbundled network element rules, it indicated that it would reexamine the list of unbundled network elements every three years. In December 2001, the FCC initiated its first so-called “triennial review” of those rules. In August 2003, in the Triennial Review Order, or TRO, the FCC substantially modified its rules governing access to unbundled network elements. The FCC redefined the "impair" standard, concluding that a requesting carrier is impaired when a lack of access to an unbundled network element poses barriers to entry, including operational and economic barriers that are likely to make entry into a market uneconomic. The FCC limited requesting carrier access to certain aspects of the loop, transport, switching and signaling databases unbundled network elements but continued to require some unbundling of these elements. In the TRO, the FCC also determined that certain broadband elements, including fiber-to-the-home loops in greenfield situations, broadband services over fiber-to-the-home loops in overbuild situations, packet switching and the packetized portion of hybrid loops, are not subject to unbundling obligations.

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All of the FCC’s decisions regarding unbundling have been the subject of judicial review. Most recently, on March 2, 2004, the U.S. Court of Appeals for the District of Columbia Circuit, or the D.C. Circuit, in United States Telecom Ass'n v. FCC, or the USTA II decision, vacated certain portions of the TRO and remanded to the FCC for further proceedings. Specifically, the D.C. Circuit vacated the FCC's delegation of decision-making authority to state commissions and several of the FCC's nationwide impairment determinations. The D.C. Circuit found that the FCC used a flawed methodology when making certain impairment determinations, including those relating to the mass market switching and local transport network elements, and remanded those determinations to the FCC for further analysis and justification. The D.C. Circuit affirmed the FCC's decision to relieve the incumbent local exchange companies from unbundling obligations with respect to broadband elements. The D.C. Circuit did not make a formal pronouncement regarding the status of the FCC's findings regarding enterprise market loops, batch hot cuts or preemption of inconsistent state laws. The FCC and the United States Solicitor General declined to seek certiorari from the Supreme Court. The National Association of Regulatory Utility Commissioners and a coalition of competitive local exchange companies separately petitioned for certiorari. The Supreme Court denied those petitions.

Thereafter, the FCC released a series of orders that further reduced the facility unbundling obligations of incumbent local exchange carriers. First, in orders released in August 2004, the FCC extended relief from the unbundling obligations to fiber-to-the-home loops serving predominantly residential multiple dwelling units and granted the same relief to fiber-to-the-curb that it has applied to fiber-to-the-home.

Second, on October 27, 2004, the FCC issued an order granting requests by the Regional Bell Operating Companies that the FCC forbear from enforcing the independent unbundling requirements of Section 271 of the 1934 Act with regard to the broadband elements that the FCC had determined in the TRO are not subject to unbundling obligations (fiber-to-the-home loops, fiber-to-the-curb loops, the packetized functionality of hybrid loops and packet switching). The FCC declined to address broader forbearance requests by SBC and Qwest, who had asked the FCC to forbear from applying applicable Section 271 requirements to any element that the FCC has determined no longer meets the impairment standard.

Third, on December 15, 2004, the FCC adopted rules modifying the unbundling obligations for incumbent local exchange companies under Section 251 of the 1934 Act, substantially reducing the incumbent local exchange companies’ obligation to provide unbundled local switching as well as certain levels of unbundled loops and transport. The FCC issued final rules on February 4, 2005 in its Triennial Review Remand Order, or TRRO. Those rules were effective on March 11, 2005. In response to the USTA II decision, the FCC clarified that it evaluated impairment with regard to the capabilities of a reasonably efficient competitor. The FCC also modified the impairment standard set forth in the TRO by: (1) setting aside the TRO’s “qualifying service” interpretation of section 251(d)(2), but prohibiting the use of unbundled network elements for the provision of exclusively long distance or exclusively wireless services; (2) drawing inferences regarding the prospects for competition in one geographic market based on the state of competition in another, similar market; and (3) determining that in the context of local exchange markets, a general rule prohibiting access to unbundled network elements whenever a requesting carrier is able to compete using an incumbent local exchange company’s tariffed special access offering would be inappropriate. It is not clear at this time whether we will be successful in finding viable substitutes for unbundled switching and the other elements affected by the TRO, the USTA II decision or the TRRO and what the ultimate effect will be on our business and operations. However, as a result of these decisions, the availability of unbundled network elements at cost-based rates has been substantially reduced and will have a material effect on the way we conduct our business and operations and may have a material adverse effect on our profitability.

The principal parts of the TRRO regarding unbundled switching and unbundled loops and transport and the expected impact to our business are summarized below:

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Local Switching: The FCC eliminated an incumbent local exchange company’s obligation to provide local switching (and the unbundled network element platform, in particular, upon which we have historically relied) to requesting carriers at Total Element Long Run Incremental Cost, or TELRIC, rates. In doing so, the FCC found that competitive local exchange companies are not impaired nationwide without access to unbundled local switching. The FCC adopted a twelve-month transition plan for competitive local exchange companies to transition away from the unbundled network element platform commencing on March 11, 2005 and ending on March 10, 2006. The transition plan applied only to our customer base as it existed on March 11, 2005 and we were able to obtain local switching for those customers at a rate per customer equal to the greater of: (1) the rate at which we leased that combination of elements on June 15, 2004, plus one dollar; and (2) the rate, if any, the applicable state public utility commission establishes between June 16, 2004 and the effective date of the FCC’s order, for the unbundled network element platform, plus one dollar.

Because local circuit switching effectively became unavailable to us for new orders as of March 11, 2005, we were unable to offer our telecommunications services as we had done in the past for new customers. As a result, to provide service to customers that were not on our own network facilities, we signed commercial agreements with AT&T (formerly SBC), Verizon and BellSouth. The terms of these commercial agreements enable us to continue offering high quality telecommunications services to our customers who were previously served on unbundled network element platforms. In addition, we could serve customers by other means, including through total service resale agreements with the incumbent local exchange companies, by migrating customers onto the networks of other facilities-based competitive local telephone companies or by purchasing critical network elements on an unbundled basis at "just and reasonable" rates pursuant to Section 271 of the 1996 Act, which presumably will be higher than the rates currently available to us.  Since network element purchases pursuant to Section 271would be on an unbundled basis, we would need to pay additional charges to combine these elements. For existing customers, as detailed earlier, the FCC announced a one year transition during which we migrated customers to our own network facilities and to commercial arrangements with the incumbent local exchange carriers. At this time, no regional bell operating company has offered elements industry wide through Section 271, although in January 2006, the Georgia Public Service Commission voted to commence a proceeding to set rates for unbundled loops, transport, and switching that must be made available by the incumbent local exchange carrier, BellSouth, pursuant to Section 271 of the 1996 Act.

This determination and others by the FCC, courts, or state commission(s) that make unbundled local switching and/or combinations of unbundled network elements effectively unavailable to us in some or all of our geographic service areas, require us either to provide services in these areas through other means, including resale of the incumbent local exchange companies' retail services, commercial agreements with incumbent local exchange companies, purchase of special access services, or the purchase of network elements from the Regional Bell Operating Companies at "just and reasonable" rates under Section 271 of the Act, in all cases likely at significantly increased costs, or to provide services over our own switching facilities, if we are able to deploy them.

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Although the incumbent local exchange companies’ unbundling requirements for local circuit switching arising under Section 251 of the 1996 Act have been eliminated by the TRRO, competitive carriers’ access to local circuit switching on an unbundled basis is preserved under Section 271 of the 1996 Act as a condition to the Regional Bell Operating Company’s ability to provide in-region long distance services. However, the local circuit switching element, if accessible to competitive carriers only pursuant to Section 271 of the 1996 Act, are likely to be offered at significantly higher rates and subject to less favorable terms and conditions imposed by the incumbent local exchange companies, including the possibility that the incumbent local exchange companies will not be required to combine unbundled local circuit switching provided pursuant to Section 271 with other non-unbundled network elements or tariffed services. 

Because of the (a) significant changes to the FCC rules that previously required the incumbent local exchange companies to provide us access to the unbundled network element platform at TELRIC rates, and (b) increases in TELRIC rates for network elements adopted by various state PUCs, the rates that we are charged by the incumbent local exchange companies to provide our services increased significantly in 2004 and 2005 and will likely continue to increase over time, despite the fact that the FCC has prohibited both SBC and Verizon from affirmatively seeking state commission-approved TELRIC rate increases for a period of two years from the closing dates of their mergers with AT&T and MCI, respectively. These cost increases have and will continue to lead us to increase our product pricing for customers located in those areas where we do not currently have or plan to deploy network facilities, which we believe inhibits our ability to add new customers and to retain existing customers. While these price increases may increase our current revenues from such customers, it will adversely affect our ability to retain such customers on our service and negatively affect our revenues over time.

Local Loops and Transport: The FCC also made impairment findings and placed certain limitations with respect to local loops and dedicated interoffice transport. The FCC established 10 DS1s and 12 DS3s as the maximum transport a carrier can purchase per route. Furthermore, for local loops, the FCC concluded that competitive local exchange companies are impaired without access to (1) DS1-capacity loops except in any building within the service area of a wire center containing 60,000 or more business lines andfour or more fiber-based collocators; and (2) DS3-capacity loops except in any building within the service area of a wire center containing 38,000 or more business lines andfour or more fiber-based collocations. The FCC determined that competitive local exchange companies are not impaired without access to dark fiber loops in any instance. For dedicated transport, the FCC found that competitive local exchange companies are impaired without access to (1) DS1 transport except on routes connecting a pair of wire centers where bothwire centers contain at least four fiber-based collocators or at least 38,000 business lines; and (2) DS3 or dark fiber transport except on routes connecting a pair of wire centers where bothwire centers contain at least three fiber-based collocators or at least 24,000 business lines. The FCC concluded that competitive local exchange companies are not impaired without access to entrance facilities connecting an incumbent local exchange company’s network with a competitive local exchange company’s network in any instance. For both local loops and dedicated transport, the FCC adopted a twelve-month transition plan for competitive local exchange companies to transition away from the use of DS1 and DS3 loops and dedicated transport where there is no impairment, and an eighteen-month transition plan to transition away from dark fiber. The transition plans apply only to the customer base as it exists on March 11, 2005, and do not permit competitive local exchange companies to add new dedicated transport unbundled network elements in the absence of impairment. During the transition periods, competitive local exchange companies will retain access to unbundled high-capacity loops and transport at a rate equal to the greater of: (1) 115% of the rate the requesting carrier paid for the unbundled network element on June 15, 2004; and (2) 115% of the rate the state commission has established or establishes, if any, between June 16, 2004, and the effective date of the FCC’s order.

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The determination of whether a particular network element is either impaired or unimpaired in a particular market, as defined in the FCC’s final rules, has a significant effect on markets where we already have networking facilities and on our plans for entering a new market. It is difficult to predict which geographic areas will become unimpaired for network elements because the incumbent local exchange companies are using non-public information to determine the thresholds for availability; while we may challenge the incumbent local exchange companies’ threshold assumptions, we may not be successful in such challenges. If a market is determined to be unimpaired, we may be unable to cost-effectively offer service in that market.

The incumbent local exchange companies have issued accessible letters, which announced that they would not provision any loops in areas that they deemed to be unimpaired and further that they would not provision any transport on routes they deemed to be competitive. Although we and other competitive local exchange carriers are challenging this action, if the incumbent local exchange companies are successful, our business could be negatively impacted. On September 9, 2005, SBC issued a revised list of its Michigan end offices that SBC maintains meets the FCC’s criteria for non-impairment. After a successful challenge on December 20, 2005, the Michigan PUC required AT&T (formerly SBC) to file all of its data with the Commission to support its assertion that certain wire centers are non-impaired for the provision of high capacity loops and transport and to re-classify any wire center in which the former AT&T was identified as a competitive fiber based collocator. In January 2006, AT&T complied with such requirement and provided a revised list of wire centers it deemed as unimpaired for either loops or transport. As part the proceeding, competitive carriers are given an opportunity to inspect wire centers identified in the January 2006 AT&T list and challenge AT&T’s designation of the wire centers as unimpaired. We are participating in this proceeding and expect a resolution by April 15, 2006. We cannot predict the outcome of these wire center challenges or whether they will have any impact on our operations. If AT&T were to prevail on its current position, we would be limited in our ability to purchase local loops and dedicated interoffice transport. As we expand our local network during 2006, the unavailability of these dedicated transport facilities, dark fiber and entrance facilities under the FCC’s rules at cost-based rates may adversely impact us where our own switching facilities have been deployed and could substantially impede our plans to deploy additional network facilities. We could be forced to use other means to effect this deployment, including the use of facilities purchased from the incumbent local exchange carrier at higher tariffed special access rates or transport services purchased from other competitive access providers.   In either event, our cost of service could rise dramatically and our plans for a service roll-out for use of our own network facilities could be delayed substantially or derailed entirely.

Beginning in 2003, we deployed networking assets in Michigan and, as of December 31, 2005, including the lines from the January 3, 2006 acquisition of NTC, we had approximately 466,000 local voice and data equivalent lines on our network. We are continuing the expansion of our network by collocating our networking equipment in the incumbent local exchange companies’ end offices to provide service over our own network. We have, and continue to improve, the automation of the business processes required to provide local network-based services.  We are utilizing next generation networking equipment for the build-out of our network in Grand Rapids and certain other areas in Michigan, as well as in the Atlanta market.

Our business strategy is to serve small and medium-sized businesses, in addition to residential consumers, in those areas where we have our own network facilities. Expansion into this business market increases our addressable market in such areas and permits us to leverage our investment in our network facilities due to the complementary telecommunication traffic or usage patterns of these business customers and our residential customers. We continue to explore acquisitions that will further expand our marketing footprint.

Furthermore, we utilize enhanced extended links, or EELs, which are a combination of dedicated interoffice transport and high capacity loops, to provide T-1 level services to medium-sized businesses. While the FCC did not explicitly restrict the availability of EELs, the incumbent local exchange companies have taken the position that EELs are not available in any geographic area where DS1 transport is not available as a network element at TELRIC rates. A negative determination on this issue by the FCC or the public utility commission in any state in which we provide services could negatively affect our network rollout and results of operations.

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Where competitive local exchange carriers are deemed “impaired,” under the FCC’s new rules, they are permitted to lease unbundled network elements at rates determined by state PUCs employing the FCC's TELRIC forward looking, cost-based pricing model. On September 15, 2003, the FCC opened a proceeding reexamining the TELRIC methodology and wholesale pricing rules for communications services made available for resale by incumbent local exchange companies in accordance with the 1996 Act. This proceeding will comprehensively re-examine whether the TELRIC pricing model produces unpredictable pricing inconsistent with appropriate economic signals; fails to adequately reflect the real-world attributes of the routing and topography of an incumbent local exchange company's network; and creates disincentives to investment in facilities by understating forward-looking costs in pricing Regional Bell Operating Company network facilities and overstating efficiency assumptions. We have participated in this proceeding as a member of a consortium of competitive local exchange companies. To date, the FCC has not issued revised TELRIC rules; thus the TELRIC methodology still governs our pricing for loops purchased from the incumbent local exchange companies. We cannot predict if the FCC will order new TELRIC pricing or if Congress will amend the 1996 Act, affecting such pricing. The application and effect of a revised TELRIC pricing model on the communications industry generally and on certain of our business activities cannot be determined at this time but it would have a material impact on our business.

On December 12, 2005 the FCC granted, in part, a petition for forbearance filed by Qwest Corporation seeking relief from statutory and regulatory obligations that apply to it as the incumbent local exchange company in the Omaha-Council Bluffs, NE-IA Metropolitan Statistical Area (“Omaha MSA”). The FCC relieved Qwest of certain legacy monopoly regulations after finding that the Omaha MSA was subject to facilities-based competition, including the substantial infrastructure investment made by Cox Communications, Inc. in its competitive network. Specifically, the FCC relieved Qwest of the obligation to provide unbundled network elements to competitors in 9 of Qwest’s 24 wire center service areas in the Omaha MSA. The FCC left in place, however, unbundling requirements such as interconnection and interconnection-related collocation obligations, as well as Section 271 obligations to provide wholesale access to local loops, local transport, and local switching at just and reasonable rates. For mass market telephone services, the FCC granted Qwest relief from dominant carrier regulations that apply to it in the entire Omaha MSA. Specifically, the Commission granted Qwest’s request to forbear from applying price cap, rate of return, 15-day tariffing and 60-day discontinuance regulations to Qwest for its provision of interstate mass market exchange access services and broadband Internet access services. On October 6, 2005, the incumbent local exchange company in Alaska asked that similar forbearance relief be granted in the Anchorage, Alaska market. We expect other incumbent local exchange carriers to file similar petitions covering other markets.

Broadband Services

On March 25, 2005, the FCC issued an order finding that a state commission may not require an incumbent local exchange carrier to provide digital subscriber line (“DSL”) service to an end user customer over the same unbundled network element loop that a competitive local exchange provider uses to provide voice services to that end user. Incumbent local exchange carriers, with the exception of AT&T and Verizon for a limited period of time as a result of the FCC’s merger orders, may now lawfully refuse to offer stand-alone DSL service to their retail customers, making it more difficult for us to attract new voice customers that want to retain their existing incumbent-provided DSL service.

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On August 5, 2005, the FCC issued an order finding that wireline broadband Internet access services are “information services” functionally integrated with a telecommunications component and therefore eliminated the long-standing requirement that incumbent local exchange companies share the underlying transmission component used to provide Internet access services. The FCC had previously required facilities-based providers to offer that wireline broadband transmission component separately from their Internet service as a stand-alone service on a common-carrier basis, and thus had previously classified that component as a telecommunications service. As a result, incumbent local exchange companies may now refuse to offer underlying broadband transmission services to unaffiliated providers of broadband services or charge above-cost rates that make it economically infeasible for unaffiliated providers to compete with the incumbent local exchange company’s broadband services. We use unbundled high capacity services purchased from incumbent local exchange carriers as network elements to provide Internet access to some of our customers. These carriers may contend that, as a result of the FCC’s wireline broadband order, they will no longer provide high capacity facilities as network elements for use in providing Internet access. If so, we may be forced to substitute higher priced special access services for this purpose.

Subsequently, Verizon filed a petition asking the FCC to extend the Wireline Broadband Order to all packetized and optical special access services. If granted, this would enable incumbent local exchanges companies to offer most services that are not TDM-based on an unregulated basis. The petition is one that asks the FCC to forbear from regulation of its packetized and optical services, and the deadline for decision is March 19, 2006.

SBC-AT&T and Verizon-MCI Mergers and the Announced AT&T-BellSouth Merger

On October 31, 2005, the FCC approved the SBC-AT&T and Verizon-MCI mergers, subject to certain conditions. The merger conditions, which the FCC set out in two separate orders issued on November 17, 2005, include: (1) the Regional Bell Operating Companies are prohibited from affirmatively seeking any increase in state-approved rates for unbundled network elements for a period of two years from the respective merger closing dates; (2) the Regional Bell Operating Companies shall not raise rates for DS1 and DS3 private line service provided by AT&T and MCI for a period of 30 months from the respective merger closing dates; (3) the Regional Bell Operating Companies shall not increase their interstate access rates for a period of 30 months following the respective merger closing dates; (4) for a period of 30 months following the merger closing dates, the Regional Bell Operating Companies will not provide special access offerings to their wireline affiliates that are not available to other similarly situated special access customers on the same terms and conditions; and (5) within 12 months of the respective merger closing dates, the Regional Bell Operating Companies will offer “stand-alone” Asynchronous Digital Subscriber Line (“ADSL”) service throughout their regions for two years. The mergers of AT&T with SBC and Verizon with MCI effectively eliminated the two largest competitive local exchange carriers in the United States, each of which was a strong voice in federal and state lobbying related to telecommunications matters. These mergers will place an increased demand on our resources and employees for lobbying and other regulatory matters and there can be no assurances that our efforts will prove effective.

On March 5, 2006, AT&T and BellSouth announced that they had entered into an agreement to merge the companies. The proposed merger, which is subject to regulatory approval, will merge our two largest vendors into one entity. This merger, if completed, may have an adverse impact on our business.

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Interconnection Agreements

Pursuant to FCC rules implementing the 1996 Act, we negotiate interconnection agreements with incumbent local exchange companies to obtain access to unbundled network elements and other services, generally on a state-by-state basis. These agreements typically have two- to three-year terms. We currently have interconnection agreements, or their equivalent, in effect with AT&T, BellSouth, Verizon and Qwest in the states where such companies act as the incumbent local exchange company. Our agreements generally are subject to amendment based upon a change of law. Following the adoption or vacating of unbundling rules, the incumbent local exchange companies typically invoke the change of law provisions in our interconnection agreements. These provisions generally provide that when a party to the agreement believes that its obligations under the agreement have changed as a result of a change in applicable law, it may request that the other party enter into negotiations to amend the agreement, and that in the event the parties are unable to agree upon an amendment, thedispute is to be arbitrated either by a neutral arbitrator or by the relevant state commission.

We have participated in and continue to participate in generic “change of law” proceedings to determine the affect of the change of law on the various unbundling rules as a result of the TRO and TRRO. We have signed “change of law” amendments as required by those proceedings. The affect of these amendments are to implement the TRO and TRRO into our interconnection agreements, thereby eliminating our access to local switching and curtailing our access to unbundled loops and transport as required by the FCC rules.

We are in the process of renegotiating certain of our interconnection agreements and/or replacing them by opting into other carriers’ existing agreements. In addition, due to regulatory changes, we are frequently negotiating amendments to our existing interconnection agreements to reflect these changes. We are generally negotiating these agreements with little leverage or ability to actually negotiate the terms. If any negotiation process does not produce, in a timely manner, an interconnection agreement that we find acceptable, we may petition the applicable PUC to arbitrate any open issues. Arbitration decisions in turn may be reviewed by federal courts. We cannot predict how successful we will be in negotiating terms critical to our provision of local network services, and we may be forced to arbitrate certain provisions of necessary agreements. Pending the completion of such proceedings and approval of successor agreements, we operate in these states with these incumbent local exchange companies under the rates, terms and conditions of the predecessor agreements pursuant to their evergreen provisions. Other interconnection agreement arbitration proceedings before various state commissions brought by other carriers may result in decisions that could affect our business, but we cannot predict the extent of any such impact. As an alternative to negotiating an interconnection agreement, we may adopt, or opt into, another carrier's approved agreement, in its entirety. We cannot predict whether an acceptable alternative will be available for us to opt into at such time as we are looking for a new or successor agreement in any given state with a particular incumbent local exchange company.

Collocation

FCC rules generally require incumbent local exchange companies to permit competitors to collocate equipment used for interconnection and/or access to unbundled network elements. Changes to those rules, upheld in 2002 by the D.C. Circuit, allow competitors to collocate multifunctional equipment and require incumbent local exchange companies to provision cross-connects between collocated carriers. We cannot determine the effect, if any, of future changes in the FCC’s collocation rules on our business or operations.

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Access Charges

We pay access charges to local exchange carriers for the origination and termination of our long distance communications traffic. Generally, intrastate access charges are higher than interstate access charges. Therefore, to the extent access charges increase or a greater percentage of our long distance traffic is intrastate, our costs of providing long distance services will increase. As a local exchange provider, we bill long distance providers access charges for the origination and termination of those providers' long distance calls. Accordingly, in contrast with our long distance operations, our local exchange business benefits from the receipt of intrastate and interstate long distance traffic. As an entity that collects and remits access charges, we must properly track and record the jurisdiction of our communications traffic and remit or collect access charges accordingly. The result of any changes to the existing regulatory scheme for access charges or a determination that we have been improperly recording the jurisdiction of our communications traffic could have a material adverse effect on our business.

The FCC has indicated that its existing carrier compensation rules constitute transitional regimes that will conclude upon the establishment of a new interstate intercarrier compensation regime based on bill-and-keep or another alternative. Because we both make payments to and receive payments from other carriers for the exchange of local and long distance calls, we will be affected by changes in the FCC's intercarrier compensation rules. We cannot predict the impact that any such changes may have on our business.

Our costs of providing long distance services, and our revenues for providing local services, also are affected by changes in access charge rates imposed on competitive local exchange companies. Pursuant to the FCC's 2001 CLEC Access Charge Order, which lowered the rates that competitive local exchange companies may charge long distance carriers for the origination and termination of calls over local facilities, access rates were reduced during 2003 and were reduced again during 2004. AT&T and Sprint have appealed the CLEC Access Charge Order to the D.C. Circuit, arguing that the FCC's benchmark rates are too high.

The FCC issued the first Access Charge Reform Report and Order in 1997. Although the FCC has since issued five further orders in that docket, several petitions for reconsideration and clarification of the 1997 Order remain pending. On December 15, 2003, the FCC issued a public notice requesting that the parties to such petitions file supplemental notices identifying any issues that were raised in the petitions and that have not been otherwise resolved. We cannot predict whether the FCC will further modify its access charge rules as a result of this proceeding, or the effect that any such changes would have on our business.

Over the last several years, the FCC has granted incumbent local exchange companies significant flexibility in pricing interstate special and switched access services. In August 1999, the FCC granted immediate pricing flexibility to many incumbent local exchange companies and established a framework for granting greater flexibility in the pricing of all interstate access services once an incumbent local exchange company market satisfies certain prescribed competitive criteria. In February 2001, the D.C. Circuit upheld the FCC's prescribed competitive criteria. To date, the FCC has granted pricing flexibility in numerous specific markets to the Regional Bell Operating Companies. This pricing flexibility may result in Regional Bell Operating Companies lowering their prices in high traffic density areas, including areas where we compete or plan to compete. We anticipate that the FCC will continue to grant incumbent local exchange companies greater pricing flexibility for access services if the number of actual and potential competitors increases in each of these markets.

The FCC issued a Notice of Public Rulemaking on February 10, 2005 in WCC Docket No. 05-25. This notice includes a broad examination of the regulatory framework that is applied to local exchange carriers’ interstate special access services preventing them from exceeding certain prices after June 30, 2005. In conducting this examination, the FCC announced that it seeks comment on the special access regulatory regime that should follow the expiration of the Coalition for Affordable Local and Long Distance Service plan, including whether to maintain or modify the Commission’s pricing flexibility rules for special access services. We cannot predict whether the FCC will further modify its access change rules as a result of this proceeding or the effect that any such changes would have on our business.

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On February 10, 2005, the FCC also adopted a Further Notice of Proposed Rulemaking, and solicited comment on whether to adopt any of seven different comprehensive proposals for reform of the FCC's existing rules relating to intercarrier compensation. Further action in that proceeding could lead to substantial changes to the way that reciprocal compensation, switched access and universal charges are established and administered, and could lead to material reductions in our intercarrier compensation revenues.

 During late 2005, petitions for declaratory ruling were filed by SBC, Vartec, Grande and Frontier asking the FCC to clarify in various ways the extent to which IP-enabled services are subject to the assessment of switched access charges, and how access charge liability should be parsed out when several carriers participate in the transport and termination of IP-enabled services. During the same timeframe, two carriers and a coalition of mid-sized incumbent local exchange companies asked the FCC to adopt new rules designed to reduce the amount of so-called “phantom traffic” terminated over their networks. Traffic is referred to as “phantom” when it lacks certain signaling information required to determine its originating location or jurisdictional character. Resolution of these petitions could result in the imposition of access charges on certain IP-based services.

Detariffing

Consistent with other deregulatory measures, the FCC has largely eliminated carriers' obligations to file tariffs with the FCC containing prices, terms and conditions of service. In lieu of federal tariffs, the FCC requires carriers to post information relating to the rates, terms, and conditions of services on their corporate web sites. Detariffing precludes our ability to rely on filed rates, terms and conditions as a means of providing notice to customers of prices, terms and conditions under which we offer services, and requires us instead to rely on individually negotiated agreements with end users. We remain subject to the 1934 Act's requirements that rates, terms and conditions of communications service be just, reasonable and not discriminatory, and we are subject to the FCC's jurisdiction over customer complaints regarding our communications services.

Universal Service

Section 254 of the 1934 Act and the FCC's implementing rules require all communications carriers providing interstate or international communications services to periodically contribute to the Universal Service Fund, or USF. The USF supports four programs administered by the Universal Service Administrative Company with oversight from the FCC: (i) communications and information services for schools and libraries, (ii) communications and information services for rural health care providers, (iii) basic telephone service in regions characterized by high communications costs or low income levels, and (iv) interstate common line support. Periodic USF contribution requirements currently are measured and assessed based on the total subsidy funding needs and each contributor's percentage of the total of certain interstate and international end user communications revenues reported to the FCC by all communications carriers. We measure and report our revenues in accordance with rules adopted by the FCC. The contribution rate factors are calculated and revised quarterly and we are billed for our contribution requirements each month based on projected interstate and international end-user communications revenues, subject to periodic true up.

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USF contributions may be passed through to consumers on an equitable and nondiscriminatory basis either as a component of the rate charged for communications services or as a separately invoiced line item. Since April 1, 2003, communications carriers have been prohibited from using a separate line item on invoices to identify, as a recovery of USF contributions, amounts that exceed the rate of actual USF contributions.

A proceeding pending before the FCC has the potential to significantly alter our USF contribution obligations. The FCC is considering changing the basis upon which our USF contributions are determined from a revenue percentage measurement to a connection or telephone number measurement. Adoption of this proposal could have a material adverse affect on our costs, our ability to separately list USF contributions on end-user bills and our ability to collect these fees from our customers.

The application and effect of changes to the USF contribution requirements and similar state requirements on the communications industry generally and on certain of our business activities cannot be predicted. If our collection procedures result in over-collection, we could be required to make reimbursements of such over-collection and be subject to penalty, which could have a material adverse affect on our business, financial condition and results of operations. If a federal or state regulatory body determines that we have incorrectly calculated or remitted any USF contribution, we could be subject to the assessment and collection of past due remittances as well as interest and penalties thereon. No such proceeding has been commenced at this time against us.

Telephone Numbering

The FCC oversees the administration and the assignment of local telephone numbers, an important asset to voice carriers, by NeuStar, Inc., in its capacity as North American Numbering Plan Administrator. Extensive FCC regulations govern telephone numbering, area code designation and dialing procedures. Since 1996, the FCC has permitted businesses and residential customers to retain their telephone numbers when changing local telephone companies, referred to as Local Number Portability. The availability of number portability is important to competitive carriers like us, because customers, especially businesses, may be less likely to switch to a competitive carrier if they cannot retain their existing telephone numbers.

 On November 3, 2005, BellSouth filed a petition at the FCC asking the commission to revise the system by which the costs of implementing local number portability are recovered. Specifically, BellSouth has asked the Commission to move from a system where cost recovery is allocated according to a carrier’s proportion of overall industry revenue to a cost recovery mechanism based on usage. If adopted, the modifications could significantly increase our LNP charges.

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Communications Assistance for Law Enforcement Act

The Communications Assistance for Law Enforcement Act, or CALEA, requires communications providers to provide law enforcement officials with call content and call identifying information under a valid electronic surveillance warrant, and to reserve a sufficient number of circuits for use by law enforcement officials in executing court-authorized electronic surveillance. Because we provide facilities-based services, we incur costs in meeting these requirements. Noncompliance with these requirements could result in substantial fines. Although we will attempt to comply, we cannot assure that we would not be subject to a fine in the future.

Network Information

FCC rules protect the privacy of certain information about customers that communications carriers, including us, acquire in the course of providing communications services. Such protected information, known as Customer Proprietary Network Information, or CPNI, includes information related to the quantity, technological configuration, type, destination and the amount of use of a communications service. The FCC's initial CPNI rules prevented a carrier from using CPNI to market certain services without the express approval of the affected customer, referred to as an opt-in approach. In July 2002, the FCC revised its opt-in rules in a manner that limits our ability to use the CPNI of our subscribers without first engaging in extensive customer service processes and record keeping. Certain states have also adopted state-specific CPNI rules. On January 30, 2005 the FCC issued an order requiring all wireline and wireless carriers to file with the Federal Communications Commission ("FCC" or "Commission") a certificate verifying that they are in full compliance with the Commission's customer proprietary network information ("CPNI") rules. We use our subscribers' CPNI in accordance with applicable regulatory requirements and complied with the FCC’s January 30, 2005 order. However, if a federal or state regulatory body determines that we have implemented those guidelines incorrectly, we could be subject to fines or penalties. In addition, on February 10, 2006, the Commission released the text of a Notice of Proposed Rulemaking asking for comment on whether various proposals are feasible and/or advisable: (a) requiring carriers to adopt a consumer-set password system; (b) requiring carriers to record audit trails which would show all instances when a customer’s CPNI records were accessed, what information was disclosed and to whom; (c) requiring data stored by carriers to be encrypted; (d) requiring carriers to remove identifying information from customer records they maintain; and (e) requiring carriers to notify customers when the security of CPNI may have been breached. We cannot predict whether any or all of these proposals will be ultimately adopted by the Commission or what the impact of implementation of new CPNI rules would have on our operations.

Billing

In 1999, the FCC first adopted its so-called “Truth-in-Billing” rules, which specify the information that must be included in, and the format of, carrier invoices for telecommunications services. The primary objective of the FCC’s Truth-in-Billing regulations is to reduce telecommunications fraud, including slamming and cramming, by making telephone bills easier for subscribers to read and understand. Pursuant to the Truth-in-Billing rules, carrier bills must be clearly organized and “clearly and conspicuously” satisfy the following requirements: (1) identify each service provider associated with each charge on the bill; (2) where charges for more than one carrier appear on the same bill separate charges by service provider; (3) identify any “new” service provider, that is, a service provider that did not bill the subscriber for service during the previous billing cycle; (4) describe billed charges by use of a brief, clear, non-misleading, plain language description of the service or services rendered; (5) distinguish between “deniable” and “non-deniable” charges, i.e., where a bill contains charges for basic local service, the bill must distinguish between charges for which non-payment will result in the disconnection of basic local service and those charges for which non-payment will not result in such disconnection; and (6) carriers must include a toll-free number for billing questions.

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Regulation of Internet Service Providers and VoIP

To date, the FCC has treated Internet service providers, or ISPs, as enhanced service providers exempt from federal and state regulations governing common carriers, including the obligation to pay access charges and contribute to the USF. Nevertheless, regulations governing the disclosure of confidential communications, copyright, excise tax and other requirements may apply to our Internet access services. In addition, Congress has passed a number of laws that concern the Internet and Internet users. Generally, these laws limit the potential liability of ISPs and hosting companies that do not knowingly engage in unlawful activity. Congress is actively considering a variety of Internet regulation bills, some of which, if signed into law, could impose obligations on us to monitor the Internet activities of our customers.

Where communications service providers have offered enhanced services in addition to their communications services, the FCC and state PUCs generally have exempted the enhanced service component and its associated revenue from legacy communications regulations. Some of the services we provide are enhanced services. Future and pending FCC and state proceedings may significantly affect our future provision of enhanced services.

The use of the public Internet and private Internet protocol networks to provide voice communications services, including voice-over-Internet protocol, or VoIP, is a relatively recent market development. The provision of such services is largely unregulated within the United States. In a 1998 Report to Congress, the FCC declined to conclude that IP telephony services constitute telecommunications services and stated that it would undertake a subsequent examination of whether certain forms of phone-to-phone Internet telephony are information services or telecommunications services. The FCC indicated that, in the future, it would consider the extent to which phone-to-phone Internet telephony providers could be considered telecommunications carriers such that they could be subject to regulations governing traditional telephone companies. The FCC also stated that, although it did not have a sufficient record upon which to make a definitive ruling, the record suggested that, to the extent that certain forms of phone-to-phone IP telephony appear to possess the same characteristics as traditional communications services and to the extent the providers of those services utilize circuit-switched access in the same manner as interexchange carriers, the FCC may find it reasonable to require that IP telephony providers pay charges similar to access charges. The FCC recognized, however, that it should consider forbearing from imposing rules that would apply to phone-to-phone Internet telephony providers if they were classified as telecommunications carriers. To date, the FCC has not imposed regulatory surcharges or traditional common carrier regulation upon providers of Internet communications services.

Several pending FCC proceedings will affect the regulatory status of Internet telephony. On February 12, 2004, the FCC adopted a notice of proposed rulemaking to address, in a comprehensive manner, the future regulation of services and applications making use of Internet protocol, including VoIP. In the absence of federal legislation, we expect that through this proceeding, the FCC will resolve certain regulatory issues relating to VoIP services and develop a regulatory framework that is unique to IP telephony providers or that subjects VoIP providers to minimal regulatory requirements. We cannot predict when the FCC may take such actions. The FCC may determine that certain types of Internet telephony should be regulated like basic interstate communications services, rendering VoIP calls subject to the access charge regime that permits local telephone companies to charge long distance carriers for the use of the local telephone networks to originate and terminate long-distance calls, generally on a per minute basis. The FCC also may conclude that Internet telephony providers should contribute to the USF. The FCC's pending review of intercarrier compensation policies (discussed above) also may have an adverse impact on enhanced service providers.

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In a series of decisions issued in 2004, the FCC clarified that the FCC, not the state PUCs, has jurisdiction to decide the regulatory status of certain IP-enabled services, including certain types of VoIP. On November 12, 2004, in response to a request by Vonage Holdings Corp. (“Vonage”), a VoIP services provider, the FCC issued an order preempting the Minnesota PUC from imposing traditional telephone company regulation of VoIP service, finding that the FCC alone could make such decisions because the service cannot be separated into interstate and intrastate communications without negating federal rules and policies. In September 2003, the Minnesota PUC had issued an order requiring Vonage to comply with Minnesota laws that regulate telephone companies. That order was appealed to the U.S. District Court for the District of Minnesota, which issued a permanent injunction based on its determination that federal communications law preempts the Minnesota PUC from imposing state law common carrier telecommunications regulations on information service providers such as Vonage. The Minnesota PUC appealed the judgment to the U.S. Court of Appeals for the Eighth Circuit. While the appeal was pending, the FCC issued its preemption order. In an order filed December 22, 2004, the Eighth Circuit concluded that the intervening FCC preemption order was binding on the court and could not be challenged in the litigation. On that basis, the Court of Appeals affirmed the judgment of the district court, that the Minnesota PUC did not have jurisdiction to regulate the provision of the Vonage services. Four state commissions, including Minnesota, and the National Association of State Utility Consumer Advocates (“NASUCA”) have asked federal appeals courts to overturn the FCC’s November 2004 order.

On October 18, 2002, AT&T filed a petition with the FCC seeking a declaratory ruling that would prevent incumbent local exchange companies from imposing traditional circuit-switched access charges on phone-to-phone IP services. In April 2004, the FCC issued an order concluding that, under current rules, AT&T's phone-to-phone IP telephony service is a telecommunications service upon which interstate access charges may be assessed. AT&T's service consists of an interexchange call initiated by an end user who dials 1 + the called number from a regular telephone. When the call reaches AT&T's network, AT&T converts it into an IP format and transports it over AT&T's Internet backbone. AT&T then converts the call back from the IP format and delivers it to the called party through local exchange carrier local business lines. This decision is thus limited to interexchange service that: (1) uses ordinary customer premises equipment with no enhanced functionality; (2) originates and terminates on the public switched telephone network; and (3) undergoes no net protocol conversion and provides no enhanced functionality to end users due to the provider's use of IP technology. The FCC made no determination regarding retroactive application of its ruling, and stated that the decision does not preclude it from adopting a different approach when it resolves the IP-Enabled Services or Intercarrier Compensation rulemaking proceedings.

On February 5, 2003, pulver.com filed a petition with the FCC seeking a declaratory ruling that its Free World Dialup service, which facilitates point-to-point broadband Internet protocol voice communications, is neither telecommunications nor a telecommunications service as these terms are defined in the 1934 Act. The FCC granted the pulver.com petition on February 12, 2004, establishing that Free World Dialup is an information service, as defined in the 1934 Act. The FCC limited this finding to VoIP services that, like Free World Dialup, exist solely as an Internet application, similar to electronic mail and instant messaging, and which do not rely on the public switched telephone network. Information services are subject to federal regulatory authority, but may not be regulated by state authorities.

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On February 23, 2005, the FCC denied a petition filed by AT&T requesting that the FCC deem its “enhanced” prepaid calling card plan interstate and informational in nature, and thus exempt from universal service and intrastate access charge payments. The FCC ruled that the AT&T prepaid calling cards at issue constituted “telecommunications service” that is subject to the assessment of switched access charges and universal service fund assessments. The FCC also requested further comment on whether other types of prepaid cards, including those that provide callers the option to listen to information or are transmitted using internet protocol technology, are also subject to switched access charge and universal service fund assessment.

Other aspects of VoIP and Internet telephony services, such as regulations relating to the confidentiality of data and communications, copyright issues, taxation of services, licensing and 911 emergency access, may be subject to federal or state regulation. For instance, in 2002 the FCC undertook an examination of whether emergency 911 requirements should be extended to packet-based networks and services, and on June 3, 2005 it released an order requiring providers of certain Voice over Internet Protocol services to provide enhanced 911 emergency services to their customers. Similarly, changes in the legal and regulatory environment relating to the Internet connectivity market, including regulatory changes that affect communications costs or that may increase the likelihood of competition from Regional Bell Operating Companies or other communications companies could increase our costs of providing service.

Taxes and Regulatory Fees

We are subject to numerous local, state and federal taxes and regulatory fees, including but not limited to a 3% Federal excise tax on communications service, FCC regulatory fees and PUC regulatory fees. We have procedures in place to ensure that we properly collect taxes and fees from our customers and remit such taxes and fees to the appropriate entity pursuant to applicable law and/or regulation. If our collection procedures prove to be insufficient or if a taxing or regulatory authority determines that our remittances were inadequate, we could be required to make additional payments, which could have a material adverse effect on our business.

On July 2, 2004, the Internal Revenue Service issued an advance notice of proposed rulemaking asking for public comment on expanding the current 3% excise tax to new communications services, such as VoIP and other IP-based services, applications, and technologies, to reflect changes in technology. The comment cycle ended September 30, 2004. We cannot predict the outcome of this proceeding on our business.

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Federal Legislation

For the past several years, there has been a concerted effort, particularly by the regional bell operating companies and their allies, to rewrite the 1934 Act and the 1996 Act by repealing or weakening their pro-competition provisions. Until recently, that effort did not gain much traction, but, with the introduction of legislation in both the House and Senate in 2006, the dynamics have shifted, and the Congress has begun to consider seriously moving legislation.

In the Senate, in late 2005, Senator Ensign (R-NV) and 14 co-sponsors introduced S. 1504, the Broadband Investment and Consumer Choice Act, which would grant extensive regulatory relief to the regional bell operating companies and other incumbent local exchange carriers. Soon thereafter Senator Jim DeMint (R-SC) introduced legislation that would phase out most existing telecommunications regulations. As drafted, both pieces of legislation would phase out most existing interconnection and network unbundling requirements over time. Partially in response to the Ensign bill, the Chairman of this Committee, Senator Ted Stevens (R- AK), has announced a sweeping set of hearings to review a broad range of telecommunications issues - from regulation and competition to intercarrier compensation and USF. These hearings began in earnest in January, and the Chairman is likely to introduce legislation after the hearings.

In the House, the Chairman (Joe Barton (R-TX)) and the Ranking Democrat (John Dingell (D-MI)) of the Energy and Commerce Committee directed their staff in September 2005 to release a draft bill. While not as deregulatory as the Ensign and DeMint bills, this draft also substantially limits the pro-competition provisions of the 1996 Act. The staff has received voluminous comments from a large number of companies and groups, many of whom criticized one or more provisions of the draft. Staff later released a new version of the bill, but it was not supported by the Democrats on the Committee because it took a much more pro-regional bell operating company view on critical issues. Hearings were held on this bill, and, once again, the staff is redrafting, but any new draft is unlikely to appease the many opponents of the legislation. These range from competitive providers, who are upset about the deregulatory provisions, to cable operators and municipalities, who oppose the video franchising relief awarded the incumbent local exchange companies. Despite the opposition, Chairman Barton has stated that he would like the Telecommunications Subcommittee to consider the bill in March 2006 and for the full Committee to consider the bill in late March or April. The chances of enactment of such sweeping federal telecommunications legislation in 2006 is uncertain. However, passage of any such legislation could substantially reduce or eliminate our ability to interconnect with incumbent local exchange carriers or lease their unbundled facilities at cost-based rates.

Additional legislation during 2006 is possible to address Congressional concerns that the FCC does not have jurisdiction to extend USF assessments to intraLATA and local calling, to clarify the scope of FCC jurisdiction over VoIP services, and to limit the ability of local governments to require telephone companies to obtain video franchise rights. Legislation is also possible to address customer proprietary network information to address Congressional concerns with regard to impersonation of consumers in order to illegally obtain calling information (pre-texting) as well as other issues relating identify fraud and privacy. We are unable to predict when any such legislation will be enacted and if such legislation will have an impact on our operations.

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State Regulation

The 1934 Act maintains the authority of individual states to impose their own regulation of rates, terms and conditions of intrastate services, so long as such regulation is not inconsistent with the requirements of federal law. Because we provide communications services that originate and terminate within individual states, including both local service and in-state long distance toll calls, we are subject to the jurisdiction of the PUC and other regulators in each state in which we provide such services. For instance, we must obtain a Certificate of Public Convenience and Necessity or similar authorization before we may commence the provision of communications services in a state. We have obtained Certificates of Public Convenience and Necessity to provide facilities-based or resold competitive local and interexchange service in every state, including the District of Columbia. As our local service business expands, we may offer additional intrastate services and may become subject to additional state regulations.

In addition to requiring certification, state regulatory authorities may impose tariff and filing requirements and obligations to contribute to state universal service and other funds. State commissions also have jurisdiction to approve negotiated rates, and to establish rates through arbitration for interconnection, including rates for unbundled network elements.

We also are subject to state laws and regulations regarding slamming, cramming and other consumer protection and disclosure regulations. These rules could substantially increase the cost of doing business in any particular state. State commissions have issued or proposed several substantial fines against competitive local exchange companies for slamming or cramming. The risk of financial damage from slamming, in the form of fines, penalties and legal fees and costs, and to business reputation is significant. A slamming complaint before a state commission could generate substantial litigation expenses. In addition, state law enforcement authorities may use their consumer protection authority against us if we fail to meet applicable state law requirements.

States also retain the right to sanction a service provider or to revoke certification if a service provider violates relevant laws or regulations. If any regulatory agency were to conclude that we are or were providing intrastate services without the appropriate authority, the agency could initiate enforcement actions, which could include the imposition of fines, a requirement to disgorge revenues, or refusal to grant regulatory authority necessary for the future provision of intrastate services.

We may be subject to requirements in some states to obtain prior approval for, or notify the state commission of, any transfers of control, sales of assets, corporate reorganizations, issuance of stock or debt instruments and related transactions. Although we believe such authorizations could be obtained in due course, there can be no assurance that state commissions would grant us authority to complete any of these transactions, or that such authority would be granted on a timely basis.

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Rates for intrastate switched access services, which we provide to long-distance companies to originate and terminate in-state toll calls, are subject to the jurisdiction of the state in which the call originated and /or terminated. Such regulation by states could have a material adverse affect on our revenues and business opportunities within that state. State PUCs also regulate the rates incumbent local exchange companies charge for interconnection of network elements with, and resale of services by, competitors. In response to the USTA II decision and the FCC's TRO and TRRO proceedings, some state commissions have continued proceedings to address issues affecting the rates, terms and conditions of intrastate services while other states suspended or terminated their proceedings. Any such proceedings may affect the rates, terms, and conditions contained in our interconnection agreements. The pricing, terms and conditions under which the incumbent local exchange company in each of the states in which we currently operate offers such services may preclude our ability to offer a competitively viable and profitable product within these and other states prospectively.

Some states are considering enactment of legislation that would deregulate incumbent local exchange company broadband facilities and services. If such legislation became law, it could prevent state regulators from requiring that incumbent local exchange companies allow competitive carriers to interconnect with critical facilities used to provide broadband services on reasonable terms.

In November 2005, the Michigan Telecommunications Act was renewed for four years and was amended to eliminate retail price regulation over most telecommunication services.

Local Regulation

In some municipalities where we have installed facilities, we are required to pay license or franchise fees based on a percentage of our revenue generated from within the municipal boundaries. We cannot guarantee that fees will remain at their current levels following the expiration of existing franchises or that other local jurisdictions will not impose similar fees.

Federal and State Regulation of Marketing

Our current and past direct and partner marketing efforts all require compliance with relevant federal and state regulations that govern the sale of telecommunication services. The FCC and many states have rules that prohibit switching a customer from one carrier to another without the customer’s express consent and specify how that consent must be obtained and verified. Most states also have consumer protection laws that further define the framework within which our marketing activities must be conducted. While directed at curbing abusive marketing practices, the design and enforcement of these rules can have the incidental effect of entrenching incumbent local exchange companies and hindering the growth of new competitors, such as our business.

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Our marketing efforts are carried out through a variety of marketing programs, including referrals from existing customers, outbound telemarketing, direct sales through independent agents, broadcast media, online marketing initiatives and direct mail. Restrictions on the marketing of telecommunication services are becoming stricter in the wake of widespread consumer complaints throughout the industry about "slamming" (the unauthorized change of a customer’s service from one carrier to another carrier) and "cramming" (the unauthorized provision of additional telecommunication services). The 1996 Act strengthened penalties against slamming, and the FCC issued and updated rules tightening federal requirements for the verification of orders for telecommunication services and establishing additional financial penalties for slamming. In addition, many states have been active in restricting marketing through new legislation and regulation, as well as through enhanced enforcement activities. On October 1, 2003, the FCC's rules and regulations governing the creation and enforcement of national "do not call" databases became effective, which has had the effect of reducing the total number of leads available to us for outbound telemarketing (which is currently one of our important sales channels) in a given market. On February 18, 2005, the FCC released new rules that clarified certain aspects of the national “do not call” database. Notwithstanding, we can still market to these leads through our other sales channels, including direct mail. Our marketing activities have subjected us to investigations or enforcement actions by government authorities. The constraints of federal and state regulation, as well as increased FCC, Federal Trade Commission and state enforcement attention, could limit the scope and the success of our marketing efforts and subject them to enforcement actions, which may have an adverse effect on us.

Statutes and regulations designed to protect consumer privacy also may have the incidental effect of hindering the growth of newer telecommunication carriers such as us. For example, the FCC rules that restrict the use of "customer proprietary network information" (information that a carrier obtains about its customers through their use of the carrier’s services) may make it more difficult for us to market additional telecommunication services (such as local and wireless), as well as other services and products, to our existing customers.

Other Domestic Regulation

We are subject to a variety of federal, state, and local environmental, safety and health laws, and regulations governing matters such as the generation, storage, handling, use, and transportation of hazardous materials, the emission and discharge of hazardous materials into the atmosphere, the emission of electromagnetic radiation, the protection of wetlands, historic sites, and endangered species and the health and safety of employees. We also may be subject to laws requiring the investigation and cleanup of contamination at sites we own or operate or at third-party waste disposal sites. Such laws often impose liability even if the owner or operator did not know of, or was not responsible for, the contamination.

We operate several sites in connection with our operations. We are not aware of any liability or alleged liability at any operated sites or third-party waste disposal sites that would be expected to have a material adverse effect on us. Although we monitor our compliance with environmental, safety and health laws and regulations, we cannot give assurances that it has been or will be in complete compliance with these laws and regulations. We may be subject to fines or other sanctions by federal, state and local governmental authorities if we fail to obtain required permits or violate applicable laws and regulations.

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OUR COMPETITION

We face significant competition in all of our service areas, both residential and business. The telecommunications industry is highly competitive. Major participants in the industry regularly introduce new services and marketing activities. Competition in the telecommunication industry is based upon the ability to offer services at competitive prices, customer service, billing service and perceived quality. We face competition in all of our service areas, including voice, data, Internet, managed services, etc. Competition has led to lower prices for services.

Our principal competitors are AT&T and BellSouth, incumbent local exchange companies in our networked markets. On March 5, 2006, AT&T and BellSouth announced that they had entered into an agreement to merge the companies. The proposed merger, which is subject to regulatory approval, if completed, may have an adverse impact on our business. The incumbent local exchange companies are well-capitalized, well-known companies that have the capacity to "bundle" other services, such as local and wireless telephone services and high speed Internet access, with long distance telephone services. The incumbent local exchange companies' name recognition in their existing markets, the established relationships that they have with their existing local service customers, their ability to take advantage of those relationships, and the FCC’s final rules regarding the unbundled network element platform that are favorable to the incumbent local exchange companies, also make it more difficult for us to compete with them. These companies as well as other incumbent local exchange companies and the major carriers, including Verizon, have targeted price plans at residential customers with significantly simplified rate structures and with bundles of local services with long distance, which may lower overall local and long distance prices. Competition is also fierce for the small and medium sized businesses that we also serve. In addition, other competitive local exchange carriers, cable televisions companies, direct broadcast satellite companies, other DSL resellers as well as technological substitutions such as VoIP, high-speed cable and broadband internet service, e-mail and wireless services are additional competitors to our services. Many of our competitors have greater financial, technical and marketing resources.

During 2005, the number of competitors in the telecommunication industry shrank significantly as a result of the FCC’s final rules regarding access to the incumbent local exchange companies’ networks. We expect other competitive local exchange carriers to likewise decide to cease marketing in 2006, resulting in very limited competition for the incumbent local exchange company.

EMPLOYEES

As of December 31, 2005, we employed approximately 1,100 persons. Following the acquisition of NTC, we employed approximately 1,500 persons as of January 4, 2006. We consider relations with our employees to be good.

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ITEM 1A. RISK FACTORS

Our business is subject to extensive regulation that continues to change, and we are therefore exposed to a variety of risks.

Our marketing and provision of telecommunication services is subject to significant regulation and may be adversely affected by regulatory developments at the federal, state and local levels. These regulations can, among other things, affect the way we conduct our business, the types of services we may offer, how we can market our services, the rates we are permitted to charge for our services, the availability to us of services and network access that we may need from others and the rates we must pay them for these services and the use of their networks, all of which may reduce the revenue we generate from our operating activities and the profitability of our business. These regulations can affect the level of regulation of other telecommunication services providers, including the incumbent local exchange carriers, or ILECs, and their ability to compete with us. These regulations also determine the level of contribution we must make to state and federal telecommunication subsidy programs. If we fail to comply with applicable regulations, or if the regulations change in a manner adverse to us, including in any of the ways described in some of the following risk factors, our business and operating results may suffer.

Our own local network is dependent upon our ability to obtain access to key network elements from some of our primary competitors. If we are unable to obtain these elements on acceptable terms, we may not be able to continue to offer our telecommunications services on a profitable basis, if at all.

We will not be able to provide our local voice and data services on a profitable basis, if at all, unless we are able to obtain key network elements from some of our primary competitors on acceptable terms. To offer local voice and data services in a market, we must connect our network with the network of the incumbent carrier in that market. This relationship is governed by an interconnection agreement between us and the incumbent carrier. We also must lease from these or other providers the telephone and data transmission lines we need to connect customers to our network. Our ability to provide our local voice and data services is dependent on existing regulations that require these elements to be provided to us on specified terms and on the compliance by our competitors with these provisioning regulations. In addition, because we rely on a limited number of suppliers for access to these network elements, we are vulnerable to the risk that we may not be able to renew or renegotiate our contracts with these suppliers on favorable terms or be able to obtain services under these contracts promptly.

As a result of recent and pending regulatory changes, the incumbent carriers in the future may be able to increase significantly the rates they charge us for these network elements and services, or even decline to provide some of these network elements and services under certain circumstances. The rates that these or other providers may charge us under future interconnection, lease or resale agreements may not allow us to offer usage rates that are low enough to attract a sufficient number of network services customers or to operate at satisfactory profit margins. In addition, recent and pending regulatory developments and related judicial decisions have restricted the list of network components that incumbent carriers are required to make available on a nondiscriminatory basis to competitive carriers such as we.

These developments or future similar developments could limit or terminate our access to the network components we need to provide local voice and data services and maintain and expand our own local network and could adversely affect our ability to grow our customer base and cost-effectively offer services in our existing and planned markets.

33

Our need to comply with extensive government regulatory requirements could increase our costs and slow our growth and ongoing changes in regulatory requirements could adversely affect our competitive position.

We are subject to varying degrees of federal, state and local regulation. The FCC exercises jurisdiction over us with respect to interstate and international services. For example, we must comply with various federal regulations, such as the duty to contribute to universal service subsidies. State regulatory commissions exercise jurisdiction over us because we provide intrastate services. We are required to obtain regulatory authorization and/or file tariffs at state agencies in most of the states in which we operate. Constructing a network and selling telephone service is also subject to numerous local regulations such as building codes and licensing. Such regulations vary on a city by city and county by county basis. Failure to comply with federal and state reporting and regulatory requirements may result in fines or other penalties, including loss of certification to provide services.

The ILECs with whom we compete generally have significantly greater resources than we do to pursue their regulatory and legislative agendas in the jurisdictions where we compete. State authorities may continue to relax restrictions on the ILECs through increased pricing flexibility for their services and other regulatory relief, which could have a material adverse effect on competitive service providers, including us. Future regulatory provisions may be less favorable to competitive service providers and more favorable to the ILECs. Changes in current or future regulations adopted by the FCC or state regulators, or other legislative, administrative or judicial initiatives relating to the communications industry, could have a material adverse effect on our business, operating results and financial condition.

Increased regulation of marketing may hinder our ability to obtain new customers and may expose us to increased costs and certain liabilities.

Our current and past direct and partner marketing efforts all require compliance with relevant federal and state regulations that govern the sale of telecommunication services. The FCC and many states have rules that prohibit switching a customer from one carrier to another without the customer’s express consent and specify how that consent must be obtained and verified. Most states also have consumer protection laws that further define the framework within which our marketing activities must be conducted. While directed at curbing abusive marketing practices, the design and enforcement of these rules can have the incidental effect of entrenching incumbent local exchange companies and hindering the growth of new competitors, such as our business.

Our marketing efforts are carried out through a variety of marketing programs, including referrals from existing customers, outbound telemarketing, direct sales through independent contractors, broadcast media, online marketing initiatives and direct mail. In recent years, restrictions on the marketing of telecommunication services have become stricter, including the creation of national "do not call" databases, and the enforcement of the restrictions by federal and state regulatory authorities has intensified. Our marketing activities have subjected us to investigations or enforcement actions by government authorities. The constraints of federal and state regulation, as well as increased FCC, Federal Trade Commission and state enforcement attention, could limit the scope and the success of our marketing efforts and subject them to enforcement actions, which may have an adverse effect on us.

Statutes and regulations designed to protect consumer privacy also may have the incidental effect of hindering the growth of newer telecommunication carriers such as we. For example, the FCC rules that restrict the use of "customer proprietary network information" (information that a carrier obtains about its customers through their use of the carrier’s services) may make it more difficult for us to market additional telecommunication services (such as local and wireless), as well as other services and products, to our existing customers.

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We are in a highly competitive industry.

We face significant competition in all of our service areas, both business and residential. The telecommunications industry is highly competitive. Major participants in the industry regularly introduce new services and marketing activities. Competition in the telecommunication industry is based upon the ability to offer services at competitive prices, customer service, billing service and perceived quality. We face competition in all of our service areas, including voice, data, Internet and managed services. Many of our competitors have greater financial, technical and marketing resources. Competition has led to lower prices for services.

Our principal competitors are AT&T and BellSouth, the incumbent local exchange carriers in our networked markets. The incumbent local exchange carriers are well-capitalized, well-known companies with significantly greater resources than we. They have the capacity to "bundle" other services, such as local and wireless telephone services and high speed Internet access, with long distance telephone services. On March 5, 2006, AT&T and BellSouth announced that they had entered into an agreement to merge the companies. The proposed merger, which is subject to regulatory approval, will merge our two largest vendors into one entity. This merger, if completed, may have an adverse impact on our business.

The incumbent local exchange carriers' name recognition in their existing markets, the established relationships that they have with their existing local service customers, their ability to take advantage of those relationships, and their ability to apply their significantly greater resources to influence applicable regulations in ways that are more favorable to them, also make it more difficult for us to compete with them. These companies as well as other incumbent local exchange carriers and the major carriers, including Verizon and Sprint Nextel, have targeted price plans at residential customers with significantly simplified rate structures and with bundles of local services with long distance, which may lower overall local and long distance prices. Competition is also fierce for the small- and medium-sized businesses that we also serve. Other competitive local exchange carriers, such as we, are competitors to our services.

We are also experiencing increasing competition from wireless communication companies. Telecommunications carriers that offer both wireless and landline telecommunications services can offer bundled services that may be more attractive to our customers than landline offerings alone. Mobile wireless is also "cannibalizing" long distance minutes and local landline installations. In addition, several wireless competitors operate or plan to operate wireless telecommunications systems that encompass most of the United States, which could give them a significant competitive advantage. We currently do not offer wireless services in our bundle of services. We could also face additional competition from users of new wireless technologies including, but not limited to, currently unlicensed spectrum.

Additionally, cable companies and companies using the cable lines for access to the customer, direct broadcast satellite companies, other DSL resellers, as well as technological substitutions such as Voice over Internet Protocol, or VoIP, high-speed cable and broadband internet service and e-mail are competitors to our services. Many of these service providers are able to offer service at lower prices and have begun replacing the traditional land line telecommunications provider, such as we.

If we are not able to compete successfully against our existing competitors and the new entrants into the telecommunication services market, our financial condition and results of operations could be materially and adversely affected.

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We have increased and will continue to increase prices for those customers that we are unable to service over our own local network, which will result in increased customer attrition and associated loss of revenues.

As a result of the changes in government regulation that effectively prevent us from profitably obtaining new customers in markets where we do not have our own local network, we have increased rates for our existing customers that are located in such markets and plan to continue increasing rates for these customers to reflect the increasing costs to us of providing telecommunication services to them. While these price increases may increase our current revenues from such customers, it will adversely affect our ability to retain such customers on our service and negatively affect our revenues over time. These price increases will also result in these customers seeking other providers for their telecommunications needs, further bolstering the dominance of the incumbent local exchange companies, with whom we compete, in these markets.

We may be unable to replace those customers that leave our service.

Purchasers of our residential local bundled product, which represent the large majority of our customers, are not obligated to purchase any minimum amount of our services, and can stop using our services at any time without penalty. Our customers may not continue to buy their local and/or long distance telephone service through us. If a significant portion of our customers were to decide to purchase telecommunications service from other service providers, we may not be able to replace these customers. Furthermore, we do not intend to seek to replace those customers that are outside the service area of our local networks. A high level of customer attrition is common in the telecommunications industry, and our financial results are affected by this attrition. Attrition is attributable to a variety of factors, including our termination of customers for nonpayment, changes in the economy, public impression of the quality of our services and the initiatives of existing and new competitors who, to attract new customers, may

·   implement national advertising campaigns,

·   utilize telemarketing programs, and

·   provide cash payments and other forms of incentives.

While we cannot predict future pricing by our competitors, we anticipate aggressive price competition to continue. Lower prices offered by our competitors could contribute to an increase in our customer turnover, or churn.

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We rely upon our local network, long-distance network, proprietary back office technology and information systems, and third parties to provide services to our customers. Interruption or failure of, or failure to manage, these systems increases the likelihood that we could incur losses or face other difficulties.

Since we operate our own local and long distance switches, our network is subject to the risk of significant interruption. Fires or natural disasters, for example, could cause damage to our switching equipment or to transmission facilities connecting our switches. Any interruption in our services over our network caused by such damage could have a material adverse impact on our financial condition and results of operations. In operating our network, we may be unable to connect and manage a large number of customers or a large quantity of traffic at high speeds. Any failure or perceived failure to achieve or maintain high-speed data transmission could significantly reduce demand for our services and adversely affect our operating results. In addition, computer viruses, break-ins, human error, natural disasters and other problems may disrupt our network. The network security and stability measures we implement may be circumvented in the future or otherwise fail to prevent the disruption of our services. The costs and resources required to eliminate computer viruses and other security problems may result in interruptions, delays or cessation of services to our customers, which could decrease demand, decrease our revenue and slow our planned expansion.

We rely on our proprietary back office technology to support all aspects of our operations. Should our systems fail and we are unable to return them to operation in an acceptable timeframe or lose valuable customer data, our operational and financial condition will be adversely affected. If we are unable to integrate the back-office systems of our newly acquired companies, or to maintain or enhance our back office information systems, we may not be able to expand our revenue as quickly as we plan or to compete effectively. Sophisticated back office information systems are vital to our revenue growth and our ability to monitor costs, bill customers, initiate, implement and track customer orders and achieve operating efficiencies. We must select products and services offered by third-party vendors and efficiently integrate those products and services into our existing back office operations. We may not successfully implement these products, services and systems on a timely basis, and our systems may fail to perform as we expect. A failure or delay in the expected integration or performance of our back office systems could slow the pace of our expected revenue growth or harm our competitiveness by adversely affecting our service quality.

We obtain services from various long distance and local carriers of telecommunications services for our customers. If these carriers fail to provide service or the provision of such services is interrupted, our customers would still hold us responsible and this could have a material adverse effect on our financial condition and results of operations.

We obtain the majority of our network equipment and software from third party suppliers. In addition, we rely on these suppliers for technical support and assistance. If any of our suppliers were to terminate our relationship or were to cease making the equipment we use, our ability to maintain, upgrade or expand our network could be impaired. Although we believe that we would be able to address our future equipment needs with equipment obtained from other suppliers, such equipment could prove to be incompatible with our network or only compatible with significant modifications and cost. If we are unable to obtain the equipment necessary to maintain our network, our ability to attract and retain customers and provide our services would be impaired and our results of operations could be materially adversely affected.

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Difficulties presented by natural disaster, economic, political, legal, health, accounting and business factors could negatively affect our business.

We provide services in various states across the United States. As a result, our business is subject to political and economic fluctuations in various states and geographic regions. In addition, we currently have physical assets and employees in sixteen states.

The day-to-day operation of our business is highly dependent on the integrity of our communications and information technology systems, and on our ability to protect those systems from damage or interruptions by events beyond our control. Sabotage, computer viruses or other infiltration by third parties could damage our systems. Such events could disrupt our service, damage our facilities, damage our reputation, and cause us to lose customers, among other things, and could harm our results of operations. In addition, a catastrophic event could materially harm our operating results and financial condition. Catastrophic events could include a terrorist attack on the United States, or a major earthquake, hurricane, fire, or similar event that affects our central offices, corporate offices, network operations center or network equipment. We believe that communications infrastructures, such as the ones on which we rely, may be vulnerable in the case of such an event and our markets, which are generally urban markets, may be more likely to be the targets of terrorist activity. If we fail to manage these operations successfully, our ability to service our clients and grow our business will be seriously impeded.

We currently use soft-switching IP technology in lieu of traditional switching to offer local service in certain markets, which may result in operational failures and higher-than-anticipated costs.

We currently use soft-switching IP technology in certain markets to reduce our costs of servicing our existing and new customers. We are initially implementing the technology in Grand Rapids, Michigan and Atlanta, Georgia and continue to evaluate the use of this technology in other markets. IP technology enables voice and data services to be carried using common transport elements, reducing the cost of providing services compared to traditional circuit switched technology. However, in contrast to the legacy circuit-switch technology used by the ILECs and other providers of communications services, our network is based on IP technology. This technology is much newer than that used by the legacy carriers and has not been used on active networks for as long. Although we believe that IP technology is well-designed for the provision of a broad array of communications services to large numbers of users, we have and could continue to encounter difficulties in adapting our IP-based network to meet the requirements of future technological advancements or to handle increasingly higher volumes of voice and data traffic as we grow our business or as our customers’ usage increases. Further, the newer IP technology may prove to be unreliable over a long period of time. Any failure of our network could cause us to lose market share and could materially harm our results of operations.

We must continue to keep pace with technological changes in our industry in order to succeed.

We face rapid and significant changes in technology. The telecommunications industry has changed significantly over the past several years and is continuing to evolve rapidly. Emerging technologies and services, such as VoIP applications, broadband services and advanced wireless offerings, could alter the economic conditions under which the telecommunications industry operates. New technologies also could lead to the development of new, more convenient and cost-effective services. In addition, the preferences and requirements of customers are rapidly changing. Our ability to retain current customers and attract new customers may be highly dependent on whether we choose the technologies that have the greatest customer acceptance, are able to adopt these new technologies and offer new services when appropriate, or can compete successfully against other service providers that use these new technologies. We cannot predict the effect of technological changes on our business. The development and offering of new services in response to new technologies or consumer demands may require us to increase our capital expenditures significantly.

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We depend upon qualified personnel to implement our strategy and achieve our goals. The loss of qualified personnel or our inability to attract and retain key personnel could materially harm our business.

Our success in implementing our strategy and achieving our goals will depend, in large part, upon the contributions of our qualified technical, marketing, programming, engineering, sales and management personnel. We also rely on independent contractors to market and sell our services. If we are unable to attract and retain experienced and motivated personnel, including a large and effective direct sales force, we may not be able to obtain new customers or sell sufficient amounts of service to execute our business plan.

Competition for qualified personnel is intense. The loss of the services of qualified personnel, or the inability to attract, retain and motivate qualified personnel, may prevent us from achieving our goals and could have a material adverse effect on our business, financial condition and results of operations. We do not have "key man" life insurance on any of our officers or directors.

The rapid development of our own network and the efforts to expand its capacity and our customer base places a significant strain on our management, operational, financial and information management systems and controls, personnel and other resources. Failure to implement and improve the operational and financial information management systems and controls necessary to support this growth and to maintain our other resources at a pace consistent with industry changes and the growth of our business could cause customers to switch to other telecommunication service providers, which would have a material adverse effect on us.

Failure to provide adequate service to our customers could have a negative effect on our financial condition.

We are focused upon providing our customers with quality service. We believe that satisfactorily servicing our customers will encourage customers to remain on our service and positively separate us from our competitors. If we are unable to provide adequate service to our customers, including customer service, we could experience greater attrition of our existing customers and a decrease in new customers, which could have a negative effect on our financial condition.

If we are unable to successfully continue our acquisition strategy, our growth may suffer.

In the past twelve months, we have relied on our acquisitions of other companies to supplement our internal expansion of our network and customer base and a significant portion of our current network assets and lines on net have been added through these acquisitions. In that period, we have acquired customers and assets through our acquisitions of LDMI and NTC. In connection with these acquisitions, we expended an aggregate of approximately $39 million of our cash-on-hand and issued 1.8 million shares of our common stock. While we intend, as part of our growth strategy, to actively seek to identify and pursue further acquisitions on acceptable terms, which could include the payment of cash or the issuance of shares of our stock, we do not know whether we will be able to make such acquisitions or the size, timing or terms thereof. If we are unable to continue to identify, fund and complete acquisitions on acceptable terms, our ability to implement our growth strategy and continue the expansion of our network and customer base could be significantly hampered, with potentially adverse consequences to our competitive flexibility, revenues and operating results.

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We may not be successful with the integration of our acquisitions.

As part of our growth strategy, we seek to supplement internal expansion with targeted acquisitions. We may not be successful in integrating any newly acquired businesses into our operations. The integration of acquired businesses poses a number of significant risks, including the following:

·   we may be unable to retain skilled management, technical, sales and back office personnel of acquired companies;

·   customers of acquired companies may resist our marketing programs, pricing levels or services;

·   we may not successfully incorporate the services of acquired businesses into our package of service offerings;

·   the attention we can devote to any one acquired company may be restricted by our allocation of limited management resources among various integration efforts;

·   our acquisition and integration activities may disrupt our ongoing business activities;

·   we may be unable to maintain uniform standards, controls, procedures and policies throughout all of our acquired companies; and

·   our relationships with vendors may be adversely affected.

We have never attempted to integrate operating platforms of this scale, or with the necessity to serve business customers, and there can be no assurance that we will be successful in integrating these customers or be able to enhance these systems on a timely basis. Even if acquired companies eventually contribute to an increase in our profitability, the acquisitions may adversely affect our operating results in the short term. Our operating results may decrease as a result of transaction-related expenses we record for the period in which we complete an acquisition. Our operating results may be further reduced by the higher operating and administrative expenses we may incur in the periods immediately preceding and following an acquisition as we seek to integrate the acquired business into our operations.

Furthermore, companies that we may acquire may not have adequate controls and procedures, including internal control over financial reporting, or may have control systems that are not compatible with ours. We will be required to integrate these companies with our disclosure and financial reporting controls and procedures. Our failure to do so in a timely manner could have the adverse results discussed below under the heading, “There are risks with our financial reporting.”

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We may be required to seek financing to support our ongoing efforts to implement our growth strategy through acquisitions.

We have to date been meeting our ongoing cash requirements (including for the conduct of our operations, acquisitions and capital expenditures) from our cash-on-hand and from cash generated from operations. However, our continued growth through further acquisitions, may require that we seek alternative sources of funding. While we believe that we would have access to financing in the public or private markets, there can be no assurance as to the timing, amounts, terms or conditions of any such financing or whether it could be obtained on terms acceptable to us. The terms of any debt financing will likely include restrictive covenants that could limit our operating flexibility and our flexibility in planning for, or reacting to changes in, our business, any of which could place us at a competitive disadvantage.

There are risks with our financial reporting.

We have reported material weaknesses in our internal control over financial reporting in the past and additional material weaknesses could be identified in the future. These control deficiencies resulted in the restatement of our financial statements for each of the quarters in 2003 and year ended December 31, 2003, and the first, second and third quarters of 2004 and certain audit adjustments to the fourth quarter 2004 financial statements.

Any failure by us to maintain or implement required new or improved controls or to integrate any newly acquired companies with such controls, or any difficulties we encounter in their implementation or such integration, could result in additional significant deficiencies or material weaknesses, cause us to fail to meet our periodic reporting obligations or result in material misstatements in our financial statements. Any such failure could also adversely affect the results of periodic management evaluations and annual auditor attestation reports regarding the effectiveness of our internal control over financial reporting. The existence of a material weakness could result in errors in our financial statements, including errors that would not be prevented or detected, which in turn could result in a restatement of our financial statements, cause us to fail to meet our reporting obligations and cause investors to lose confidence in our reported financial information, leading to a decline in our stock price.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

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ITEM 2. PROPERTIES.

We own a 24,000 square foot facility in New Hope, Pennsylvania that serves as our headquarters and is the location of executive, finance, marketing, legal and certain information technology development departments. We also own a 32,000 square foot facility located in Palm Harbor, Florida for our sales, provisioning and customer service operations. We lease 10,000 square feet of office space in Reston, Virginia, that is the location of our networking personnel and our network management center. We lease 43,000 square feet of office space in Southfield, Michigan, (LDMI’s former headquarters) that is the location of certain networking, sales, finance and information technology personnel. We also lease 54,000 square feet of office space in Pensacola, Florida, (NTC’s former headquarters), where certain networking, sales, finance and information technology personnel are located.

We also lease properties in the cities in which switches for our network have been installed and where we have local sales offices. These other leased facilities included, as of March 1, 2006, 22 office facilities and nine switch facilities in 25 U.S. cities.

ITEM 3. LEGAL PROCEEDINGS.

We are party to a number of legal actions and proceedings arising from our provision and marketing of telecommunications services (including matters involving do not call, customer proprietary network information and billing regulations), as well as certain legal actions and regulatory matters arising in the ordinary course of business. We believe that the ultimate outcome of the foregoing actions will not result in a liability that would have a material adverse effect on our financial condition or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

EXECUTIVE OFFICERS OF THE REGISTRANT

Our executive officers, as of March 1, 2006, were as follows:

Name	Age	Position
Edward B. Meyercord, III (1)	40	Chief Executive Officer, President and Director
Warren Brasselle	48	Executive Vice President - Network Operations
Jeffrey Earhart	44	Executive Vice President - Customer Operations
Aloysius T. Lawn, IV	47	Executive Vice President - General Counsel and Secretary
Timothy W. Leonard	45	Chief Information Officer
Patrick O'Leary	50	Executive Vice President - Business Services
Thomas Walsh	46	Senior Vice President - Finance and Treasurer
Paul Walker	41	Senior Vice President - Marketing
Mark Wayne	48	Senior Vice President - Business Sales
David G. Zahka	46	Chief Financial Officer

(1)   Director whose term expires in 2006.

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All officers are elected annually by the Board of Directors and hold office until their successors are elected and qualified.

EDWARD B. MEYERCORD, III. Mr. Meyercord currently serves as our Chief Executive Officer and President. From May 2001 through December 2003, Mr. Meyercord served as our President. He served as our Chief Financial Officer between August 1999 and December 2001 and Chief Operating Officer between January 2000 and May 2001. He joined us in September of 1996 as the Executive Vice President, Marketing and Corporate Development. Prior to joining us, Mr. Meyercord was a Vice President in the Global Telecommunications Corporate Finance Group at Salomon Brothers, Inc., based in New York. Prior to Salomon Brothers he worked in the corporate finance department at PaineWebber Incorporated. Mr. Meyercord is also a member of our Board of Directors.

WARREN BRASSELLE. Mr. Brasselle currently serves us as Executive Vice President - Network Operations. Between April 2000 and February 2004, Mr. Brasselle served us as Senior Vice President - Operations. Prior to joining us, Mr. Brasselle was Vice President of Operations for Cable and Wireless North America since 1996, where he was broadly responsible for the design, provisioning, and maintenance of Cable & Wireless' voice, data, and IP network. Mr. Brasselle also held a variety of operational positions at MCI and Williams Telecommunications.

JEFFREY EARHART. Mr. Earhart currently serves us as Executive Vice President - Customer Operations. Between 2000 and 2004, he served us as Senior Vice President - Customer Operations and between 1997 and 2000, as Vice President, Operations. Mr. Earhart originally joined us as our Director of Retail Sales and Provisioning in 1990, a position he held until 1992. Prior to rejoining us in 1997, Mr. Earhart served as President of Collective Communications Services, an independent long distance reseller of our long distance services.

ALOYSIUS T. LAWN, IV. Mr. Lawn joined us in January 1996 and currently serves as our Executive Vice President - General Counsel and Secretary. Prior to joining us, from 1985 through 1995, Mr. Lawn was an attorney in private practice.

TIMOTHY W. LEONARD. Mr. Leonard joined us in September 2000 and currently serves as our Chief Information Officer. Prior to joining us, from 1991 through 2000, Mr. Leonard was an independent contractor who performed engagements in the information technology area for numerous Fortune 1000 companies. From 1988 to 1991, Mr. Leonard served as a senior consultant with the PA Consulting Group, an information technology consulting company.

PATRICK O'LEARY. Mr. O'Leary currently serves as our Executive Vice President - Business Services. Mr. O'Leary joined us in July 2005 in connection with our acquisition of LDMI, where he served as Chairman of the Board, Chief Executive Officer and President. Prior to joining LDMI in 1995, Mr. O'Leary served as the Director of Marketing for Allnet Communications, a telecommunications provider.

THOMAS M. WALSH. Mr. Walsh joined us in September 2000 and currently serves as our Senior Vice President - Finance and Treasurer. Before joining us, he served as director of finance at Comcast Cellular Communications, a telecommunications company, from 1996 to 1999, and Regional Controller of SBC Mobil Systems, a successor corporation, from 1999 to 2000. Prior to Comcast Cellular Communications, he worked for Call Technology Corporation, a telecommunications company, where he was responsible for all finance and accounting functions as Chief Financial Officer. Prior to his tenure with Call Technology Corporation, Mr. Walsh served as an Audit Manager for Ernst & Young. Mr. Walsh is a Certified Public Accountant.

PAUL WALKER. Mr. Walker joined us in January 2005 and currently serves as our Senior Vice President - Marketing. Prior to joining us, he served as the Director of Marketing for Worldnet, a telecommunications division of AT&T, for fourteen years.

MARK WAYNE. Mr. Wayne currently serves as our Senior Vice President - Business Sales. Mr. Wayne joined us in July 2005 in connection with our acquisition of LDMI, where he served as the Executive Vice President of Sales and Marketing. Prior to joining LDMI in 2001, he served as President, Chief Operating Officer and a member of the Board of Directors of BullsEye Telecom. Prior to that, he served as director of marketing, local services at Midcom Communications and vice president, marketing and vendor relations at USN Communications in Chicago. Mr. Wayne also spent 13 years at Ameritech, where he was a senior director at Ameritech Information Industry Services.

DAVID G. ZAHKA. Mr. Zahka joined us in December 2001 as Chief Financial Officer. Before joining us, he spent more than 15 years with PaineWebber Incorporated, and its successor UBS Warburg, where he served most recently as Executive Director of the Financial Sponsors Group. At PaineWebber, Mr. Zahka also served as Senior Vice President of Debt Capital Markets and First Vice President of its Utility Finance Group.

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information; Holders; Dividends

Our common stock, $.01 par value per share, is traded on the Nasdaq National Market under the symbol "TALK." As of March 1, 2006, there were approximately 870 record holders of our common stock. We have never declared or paid any cash dividends on our capital stock and do not anticipate paying cash dividends in the foreseeable future. High and low quotations listed below are actual closing sales prices as reported by the Nasdaq National Market:

Common Stock	Price Range Of Common Stock
		High		Low
2004
First Quarter	$	12.05	$	8.14
Second Quarter		10.05		7.07
Third Quarter		7.70		5.05
Fourth Quarter		7.47		5.01
2005
First Quarter		6.71		5.85
Second Quarter		10.21		6.26
Third Quarter		11.61		8.58
Fourth Quarter		10.01		8.63

Stock Purchases

We made no purchases of our common stock in the quarter ended December 31, 2005. On June 1, 2004, we announced that our Board of Directors had authorized a share buy back program for us to purchase up to $50 million of our outstanding shares. The shares may be purchased from time to time on the open market and in private transactions. There is currently no stated expiration date for this program and through December 31, 2005, we had not purchased any shares under this program.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9B. OTHER INFORMATION.

None.

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PART III

The information called for by Part III of Form 10-K (Item 10 — Directors and Executive Officers of the Registrant, Item 11 — Executive Compensation, Item 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, Item 13 — Certain Relationships and Related Transactions, and Item 14 — Principal Accounting Fees and Services), to the extent not set forth in Part I of this Form 10-K Report under the caption“EXECUTIVE OFFICERS OF THE REGISTRANT,” is incorporated by reference from our definitive proxy statement, which will be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Annual Report relates. The information regarding our executive officers included in Part I of this Annual Report under the caption “EXECUTIVE OFFICERS OF THE REGISTRANT” is incorporated herein by reference.

PART IV

ITEM 15. EXHIBITS

(a)

(3) EXHIBITS:

EXHIBIT

NUMBER DESCRIPTION

3.1 Our composite form of Amended and Restated Certificate of Incorporation, as amended through October 15, 2002 (incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K, dated October 16, 2002).

3.2 Our Bylaws (incorporated by reference to Exhibit 3.2 to our registration statement on Form S-1 (File No. 33-94940)).

3.3 Certificate of Designation of Series A Junior Participating Preferred Stock dated August 27, 1999 (incorporated by reference to Exhibit A to Exhibit 1 to our registration statement on Form 8-A (File No. 000-26728)).

4.1 Specimen of Talk America Holdings, Inc. common stock certificate (incorporated by reference to Exhibit 4.1 to our Annual Report on Form 10-K for the year ended December 31, 2002).

4.2 Form of Warrant Agreement for MCG Credit Corporation dated August 9, 2000 (incorporated by reference to Exhibit 4.3 to our Annual Report on Form 10-K for the year ended December 31, 2000).

4.3 Form of Warrant Agreement for MCG Credit Corporation dated October 20, 2000 (incorporated by reference to Exhibit 4.4 to our Annual Report on Form 10-K for the year ended December 31, 2000).

4.4 Form of Warrant Agreement for MCG Finance Corporation dated October 20, 2000 (incorporated by reference to Exhibit 4.5 to our Annual Report on Form 10-K for the year ended December 31, 2000).

10.1 Employment Agreement with Aloysius T. Lawn, IV dated July 30, 2004 (incorporated by reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).*

10.2 Employment Agreement with Edward B. Meyercord, III dated January 1, 2004 (incorporated by reference to Exhibit 10.2 to our Annual Report on Form 10-K for the year ended December 31, 2003).*

10.3 Tel-Save Holdings, Inc. 1995 Employee Stock Option Plan (incorporated by reference to Exhibit 10.15 to our registration statement on Form S-1 (File No. 33-94940)).*

10.4 Stock Option Agreement, dated as of November 13, 1998, with Gabriel Battista (incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K dated January 20, 1999).*

10.5 1998 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.14 to our Current Report on Form 8-K dated January 20, 1999).*

10.6 2000 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.31 to our Registration Statement on Form S-4 (No. 333-40980)). *

10.7 Form of Non-Qualified Stock Option Agreement, dated December 12, 2000, for each of Gabriel Battista, Aloysius T. Lawn IV and Edward B. Meyercord, III (incorporated by reference to Exhibit 10.40 to our Annual Report on Form 10-K for the year ended December 31, 2000).*

10.8 Rights Agreement dated as of August 19, 1999 by and between the Talk.com Inc. and First City Transfer Company, as Rights Agent (incorporated by reference to Exhibit 1 to our registration statement on Form 8-A (File No. 000-26728)).

10.9 Employment Agreement with Thomas M. Walsh dated as of May 9, 2005 (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q dated March 31, 2005).*

10.10 Indemnification Agreement with Thomas M. Walsh dated as of August 7, 2000 (incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q dated November 14, 2000).*

10.11 Non-Qualified Stock Option Agreement with Thomas M. Walsh dated as of August 7, 2000 (incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q dated November 14, 2000).*

10.12 Lease by and between Talk.com Holding Corp. and University Science Center, Inc. dated April 10, 2000 (incorporated by reference to Exhibit 10.54 to our Annual Report on Form 10-K for the year ended December 31, 2000).

10.13 Lease by and between The Other Phone Company, dba Access One Communications and University Science Center, Inc. dated December 8, 1999 (incorporated by reference to Exhibit 10.55 to our Annual Report on Form 10-K for the year ended December 31, 2000).

10.14 Restated Access One Communications Corp. 1997 Stock Option Plan (incorporated by reference to Exhibit 4.2 to our registration statement on Form S-8 (File No. 333-52166).*

10.15 Restated Access One Communications Corp. 1999 Stock Option Plan (incorporated by reference to Exhibit 4.3 to our registration statement on Form S-8 (File No. 333-52166).*

10.16 Employment Agreement with Jeffrey Earhart dated July 30, 2004 (incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2004). *

10.17 Employment Agreement with Warren Brasselle dated July 30, 2004 (incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2004). *

10.18 Employment Agreement with Timothy Leonard dated March 15, 2005 (incorporated by reference to Exhibit 10.18 to our Annual Report on Form 10-K for the year ended December 31, 2004).*

10.19 Lease by and between Talk America Inc. and BTS Owners LLC, dated as of July 1, 2003 (incorporated by reference to Exhibit 10.24 to our annual Report on Form 10-K for the year ended December 31, 2003).

10.20 Amendment to Office Lease by and between Michigan Plaza LLC (predecessor-in-interest to BTS Owners LLC) and Talk America Inc. dated November 30, 2005 (filed herewith).

10.21 First Amendment, dated as of September 19, 2001, to the Rights Agreement dated as of August 19, 1999, by and between Talk America Holdings, Inc. and First City Transfer Company, as Rights Agent (incorporated by reference to Exhibit 10.9 to our Current Report on Form 8-K filed on September 24, 2001).

10.22       Employment Agreement with David G. Zahka dated July 30, 2004 (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).*

10.23 Our 2001 Non-Officer Long Term Incentive Plan (incorporated by reference to Exhibit 4.1 to our registration statement on Form S-8 (File No. 333-74820).*

10.24 Office Lease by and between TMT Reston I & II, Inc. and Talk America Inc. dated as of September 16, 2005 (filed herewith).

10.25 Our 2003 Long Term Incentive Plan (incorporated by reference to Exhibit B of our Definitive Proxy Statement filed on May 6, 2003).*

10.26 Second Amendment to Rights Agreement, dated as of December 13, 2002, to the Rights Agreement dated as of August 19, 1999, by and between Talk America Holdings, Inc., First City Transfer Company and Stocktrans, Inc. (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on December 13, 2002).

10.27 2005 Executive Officer and Management Bonus Program Summary (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on April 26, 2005) *

10.28 2005 Supplemental Incentive Compensation Plan Summary (incorporated by reference to Exhibit 10.2to our Current Report on Form 8-K filed on April 26, 2005). *

10.29 Consulting Agreement between Talk America Holdings, Inc. and Gabriel Battista, dated as of January 1, 2005 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K dated January 1, 2005).

10.30 Indemnification Agreement with Edward B. Meyercord, III dated January 1, 2004 (incorporated by reference to Exhibit 10.4 to our Annual Report on Form 10-K for the year ended December 31, 2003).

10.31 Employment Agreement with Gabriel Battista dated January 1, 2004 (incorporated by reference to Exhibit 10.6 to our Annual Report on Form 10-K for the year ended December 31, 2003).*

10.32 Agreement and Plan of Merger dated May 23, 2005 among LDMI Telecommunications, Inc., Talk America Holdings, Inc. and Lion Acquisition Corp. (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on May 23, 2005).

10.33 Escrow Agreement, dated as of July 13, 2005 among LDMI Telecommunications, Inc., Talk America Holdings, Inc., the representatives named therein and U.S. Bank National Association, as Escrow Agent (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on July 13, 2005).

10.34 Agreement and Plan of Merger dated as of October 18, 2005 among NT Corporation, Talk America Holdings, Inc. and THNetco, Inc. (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on October 18, 2005).

10.35 Employment Agreement with Patrick O'Leary dated July 13, 2005 (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed on July 13, 2005).*

10.36      Employment Agreement with Mark Wayne dated July 13, 2005 (filed herewith).*

10.37 Summary of Talk America Holdings, Inc. Non-Employee Director Compensation (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on December 28, 2005).*

10.38 Talk America Executive Nonqualified Savings Plan (incorporated by reference to Exhibit 4.1 to Registrant's Registration Statement on Form S-8 (Registration No. 333-131230)).*

10.39 Executive Officer and Management Bonus Program Summary, as amended as of February 14, 2006 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on February 14, 2005).*

10.40 2006 Executive Officer and Management Bonus Program Summary (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on February 14, 2005).*

10.41 2006 Supplemental Incentive Compensation Plan Summary (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed on February 14, 2005).*

10.42 Office Lease by and between Cordova Associates, LLC and NT Corporation dated as of September 7, 2000 (filed herewith).

10.43 Amendment to Office Lease by and between Cordova Associates, LLC and NT Corporation dated as of November 28, 2001 (filed herewith).

10.44 Second Amendment to Office Lease by and between Cordova Associates, LLC and NT Corporation dated as of October 21, 2002 (filed herewith).

10.45 Office Lease by and between BSRT Phoenix Business Park, LLC and LightNetworks, Inc. dated as of January 13, 2000 (filed herewith).

10.46 Amendment to Office Lease by and between BSRT Phoenix Business Park, LLC and LightNetworks, Inc. dated February 17, 2000 (filed herewith).

10.47 Second Amendment to Office Lease by and between BSRT Phoenix Business Park, LLC and LightNetworks, Inc. dated April 17, 2000 (filed herewith).

10.48 Assignment of Office Lease by and between LightNetworks, Inc., Network Telephone Corporation and BSRT Phoenix Business Park, LLC dated September 21, 2000 (filed herewith).

10.49 Amendment to Office Lease by and between Phoenix Business Park, LLC, successor to DA Phoenix, LLC, successor to BSRT Phoenix Business Park LLC and Network Telephone Inc., successor to LightNetworks, Inc. dated August 4, 2005 (filed herewith).

10.50 Amendment to Office Lease by and between Phoenix Business Park, LLC and Network Telephone Inc., dated October ___, 2005 (filed herewith).

10.51 Amendment to Office Lease by and between Phoenix Business Park, LLC and Network Telephone Inc., dated December 21, 2005 (filed herewith).

10.52 Amendment to Office Lease by and between Phoenix Business Park, LLC (successor in interest to BSRT Phoenix Business Park, LLC and Network Telephone, Inc. (successor in interest to LightNetworks, Inc.) dated as of January 9, 2005 (filed herewith).

10.53 Office Lease by and between American Center LLC and LDMI Telecommunications, Inc. dated as of January 28, 2003 (filed herewith).

10.54        First Lease Modification to Office Lease by and between American Center LLC and LDMI Telecommunications, Inc. dated as of February 13, 2003 (filed herewith).

10.55        Second Lease Modification to Office Lease by and between American Center LLC and LDMI Telecommunications, Inc. dated as of May 9, 2003 (filed herewith).

10.56        Third Lease Modification to Office Lease by and between American Center LLC and LDMI Telecommunications, Inc. dated as of October 22, 2003 (filed herewith).

10.57        Fourth Lease Modification to Office Lease by and between American Center LLC and LDMI Telecommunications, Inc. dated as of May 19, 2004 (filed herewith).

10.58       Fifth Lease Modification to Office Lease by and between American Center LLC and LDMI Telecommunications, Inc. dated as of February 1, 2005 (filed herewith).

10.59       Six Lease Modification to Office Lease by and between American Center LLC and LDMI Telecommunications, Inc. dated as of May 1, 2005 (filed herewith).

10.60       Seventh Lease Modification to Office Lease by and between American Center LLC and LDMI Telecommunications, Inc. dated as of October 1, 2005 (filed herewith).

10.61 Office Lease by and between Galleria Equities, LLC and LDMI Telecommunications, Inc. dated May 31, 2000 (filed herewith).

10.62 Office Lease by and between Southfield Technecenter Re 1 LLC and Talk America Inc. dated February 24, 2003 (filed herewith).

10.63       Talk America Holdings, Inc. 2003 Long Term Incentive Plan Non-Qualified Stock Option Agreement for Non-Employee Directors (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on December 29, 2005).

14.1 Code of Ethics (incorporated by reference to Exhibit 14.1 to our Annual Report on Form 10-K for the year ended December 31, 2003).

21.1 Our Subsidiaries (filed herewith).

* Management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: March 16, 2006

TALK AMERICA HOLDINGS, INC.

          By: /s/ Edward B. Meyercord, III

                Edward B. Meyercord, III

                Chief Executive Officer, President

                and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant in the capacities and on the dates indicated.

SIGNATURE  TITLE          DATE

/s/ Edward B. Meyercord IIIChief Executive Officer,                                   March 16, 2006

Edward B. Meyercord, III                   President and Director

                                                           (Principal Executive Officer)

/s/ David G. Zahka Chief Financial OfficerMarch 16, 2006

David G. Zahka (Principal Financial Officer)

/s/ Thomas M. Walsh Senior Vice President - Finance                                 March 16, 2006

Thomas M. Walshand Treasurer

                                                       (Principal Accounting Officer)

/s/ Gabriel Battista Chairman of the BoardMarch 16, 2006

Gabriel Battistaof Directors

/s/ Mark S. FowlerDirectorMarch 16, 2006

Mark S. Fowler

/s/ Robert J. KorzeniewskiDirectorMarch 16, 2006

Robert J. Korzeniewski

/s/ Ronald R. Thoma                                     DirectorMarch 16, 2006

Ronald R. Thoma

EX-10.20

                    Exhibit 10.20

AMENDMENT TO LEASE

THIS AMENDMENT TO LEASE (the amendment) is made as of the 30th day of November 2005 by and between MICHIGAN PLAZA LLC, a Delaware limited liability company (hereinafter referred to as "Landlord") and TALK AMERICA INC., a Pennsylvania corporation (hereinafter referred to as "Tenant");

WITNESSETH:

WHEREAS, Landlord's predecessor-in-interest (BTS Owners LLC) and Tenant entered into a Lease dated as of July 1, 2003 the lease) pursuant to which Tenant is leasing 4,753 square feet of Rentable area on the 42nd floor (the Existing Premises) of the building (the Building) located at 205 North Michigan Avenue, Chicago, Illinois; capitalized terms not specifically defined herein shall have the meaning ascribed to such terms in the Lease; and

WHEREAS, Tenant wishes to expand the leased premises and extend the Term of the Lease and Landlord desires to accommodate Tenant;

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tennant agree as follows:

1. Extension of Initial Term. The term of the Lease is hereby extended to August 31, 2009 and accordingly the defined term "Termination Date" as used in the Lease in amended to be August 31, 2009.

2. Additional Premises. As of February 1, 2006 (the "Effective date") Landlord hereby leases to Tennant and Tennant hereby accepts from Landlord the 1,460 square feet of Rentabel Area on the 42nd floor of the Building depicted on Exhibit A attached hereto and made apart hereof (them "Additional Premises") for a term commencing on the Effective Date and terminating on the Termination date. From and after the Effective Date the Premises shall consist of both the Existing Premises and the Additional Premises, constituting 6,213 square feet of Rentable Area in the aggregate. From and after the effective date, all references to the Premises ion the lease shall be deemed to refer to the Existing Premises and the Additional Premises.

3. Possession of the Additional Premises.

a. Possession of the Additional Premises shall be tendered to Tenant by Landlord in their "as-is" condition upon full execution of this Amendment. The Tenant's taking possession of any portion of the Additional Premises shall be conclusive evidence that such portion of the Additional Premises was in good order and satisfactory condition when the Tenant took possession. NO promise of the Landlord to construct, alter, remodel or improve the Premises or the Building and no representation by Landlord or its Agents respecting the condition of the Additional Premises have been made to Tenant or relied upon by Tenant other than as may be contained in this Amendment to the Lease.

b. Tenant shall perform any construction or renovations in the Additional Premises in accordance with the terms of the Tenant Work Letter attached to the Lease as is such Tenant Work Letter were attached to this Amendment and incorporated herein, except that the Allowance shall be $51,100.00 rather than the amount set forth in the Tenant Work letter. In addition, Landlord will pay Gastinger Walker Harden Architects up to $116.80 for the preparation of a preliminary space plan and $58.40 for one revision thereto. Tenant may allocate up to $7300.00 of any unused portion of the Allowance to the next Rent due under the Lease for the Additional Premises. Notwithstanding anything herein or in the Lease to the contrary, Tenant shall cause the electricity for the Additional Premises to be metered together with the electricity for the Existing Premises.

c. Tenant's obligation to pay Rent for the Additional premises shall commence on the Effective date even if Tenant's work (as defined in the Tenant Work letter) shall not be completed. Under no circumstances shall the occurrence of any of the events described in this Section 3 be deemed to accelerate or defer the Termination Date. If Tenant takes possession of any portion of the Additional Premises prior to the effective date, such possession shall be pursuant to all of the terms, covenants and conditions of the Lease, excluding the obligation to pay Base Rent and Additional Rent for the Additional Premises.

4. Rent. Schedule 1 to the lease shall be superseded by Schedule 1 attached hereto and made a part hereof. As of the Effective Date, Tenant's Proportionate Share for purposes of determining for purposes of determining taxes and operating expenses payable by tenant under the Lease shall be 0.639% (rater than 0.489%). Provided Tenant is not in default under the Lease and subject to the terms of Section 22 of the Lease, the two (2) monthly installments of Base Rent and Additional Rent for February, 2006 and March 2006 for the Existing premises (and only the Existing premises) shall be abated in full and not payable by Tenant.

5. Miscellaneous. The preambles to this Amendment are incorporated into the body of this Amendment as if restated herein.

6. Governing Law. Interpretation of this Amendment shall be governed by the laws of the state of Illinois.

7. No Other Consideration. The mutual obligations of the parties as provided herein are the sole consideration for this Amendment and no representations, promises or inducements have been made by the parties other than as appear in this Amendment. This Amendment may not be amended except in writing signed by both Parties.

8. Brokers. Tenant represents And warrants to Landlord that neither it nor its officers or agents nor anyone acting on its behalf has dealt with any real estate broker, other than MB real estate services LLC ("MB") and The John Buck Company ("Buck") in the negotiation or making of this Amendment, and Tenant agrees to indemnify and hold harmless Landlord from any and all claims, liability, costs and expenses (including attorney fees) incurred as a result of any inaccuracy in the foregoing representation and warranty. Landlord represents and warrants to Tenant that neither it nor its officers or agents nor anyone acting on its behalf has dealt with any real estate broker, other than MB and buck, in the negotiation or making of this Amendment and Landlord agrees to indemnify and hold harmless Tenant from any and all claims, liability, costs and expenses (including attorneys' fees) incurred as a result of any inaccuracy in the foregoing representation and warranty. Landlord shall pay all of the commissions due to MB and Buck.

9. Full Force and Effect. Except as modified herein the lease is hereby ratified and confirmed and the terms, covenants, conditions and agreements therein contained remain in full force and effect.

IN WITNESS WHEREOF, the parties executed this Amendment as of the day and year first written above.

LANDLORD

MICHIGAN PLAZA LLC, a Delaware limited liability company

By: /s/ Alan Gordon

Name: Alan Gordon

Title: Vice President

Talk America Inc.

By: /s/ Aloysius T. Lawn IV
Name: Aloysius T. Lawn IV

Title: EVP - General Counsel

EXHIBIT A

ADDITIONAL PREMISES

SCHEDULE 1

BASE RENT

Existing Premises (4,753 rentable square feet)

Period	Annual Per Square Foot Base Rate	Monthly Base Rate	Annual Base Rent
Rent Commencement Date - May 31, 2004	$17.25	$1,765.25	$21,183.00
June 1,2004 -May 31, 2004	$17.25	$7,030.48	$84,365.75
June 1, 2005 -May 31, 2006	$18.25	$7,228.52	$84,365.75
June 1, 2006 - may 31, 2007	$18.75	$7,426.56	$89118.75
June 1, 2007 - May 31, 2008	16.00	6337.33	76048.00
June 1, 2008 - May 31, 2009	16.50	6,535.38	78,424.50
June 1, 2009 - August 31, 2009	17.00	6,733.42	80,801.00

BASE RENT

Additional Premises (1,460 square feet)

Period	Annual Per Square Foot Base Rate	Monthly Base Rate	Annual Base Rent
February 1, 2006 - May 31, 2006	$15.00	$1,825.00	$21,900.00
June 1,2006 -May 31, 2007	$15.50	$1,885.83	$22,630.00
June 1, 2007 -May 31, 2008	$16.00	$1,946.67	$23,360.00
June 1, 2008 - may 31, 2009	$16.50	$2,007.50	$24,090.00
June 1, 2009- August 1, 2009	17.00	2068.33	24820.00

EX-10.24

                    Exhibit 10.24

LEASE

between

TMT RESTON I & II, INC.,

as Landlord,

and

TALK AMERICA INC.,

as Tenant

TABLE OF CONTENTS

1.USE AND RESTRICTIONS ON USE.

2.TERM.

3.RENT.

4.RENT ADJUSTMENTS.

5.SECURITY DEPOSIT.

6.ALTERATIONS.

7.REPAIR.

8.LIENS.

9.ASSIGNMENT AND SUBLETTING.

10.INDEMNIFICATION.

11.INSURANCE.

12.WAIVER OF SUBROGATION.

13.SERVICES AND UTILITIES.

14.HOLDING OVER.

15.SUBORDINATION.

16.RULES AND REGULATIONS.

17.REENTRY BY LANDLORD.

18.DEFAULT.

19.REMEDIES.

20.TENANT’S BANKRUPTCY OR INSOLVENCY.

21.QUIET ENJOYMENT.

22.CASUALTY

23.EMINENT DOMAIN.

24.SALE BY LANDLORD.

25.ESTOPPEL CERTIFICATES.

26.SURRENDER OF PREMISES.

27.NOTICES.

28.TAXES PAYABLE BY TENANT.

29.INTENTIONALLY OMITTED.

30.DEFINED TERMS AND HEADINGS.

31.TENANT’S AUTHORITY.

32.FINANCIAL STATEMENTS AND CREDIT REPORTS.

33.COMMISSIONS.

34.TIME AND APPLICABLE LAW.

35.SUCCESSORS AND ASSIGNS.

36.ENTIRE AGREEMENT.

37.EXAMINATION NOT OPTION.

38.RECORDATION.

39.PARKING.

40.LIMITATION OF LANDLORD’S LIABILITY.

EXHIBIT A - FLOOR PLAN DEPICTING THE PREMISESA-1

EXHIBIT A-1 - SITE PLANA-1-1

EXHIBIT A-2 - EXPANSION SPACEA-1-2

EXHIBIT B - INITIAL ALTERATIONSB-

EXHIBIT B-1 - PROJECT SCHEDULEB-1-1

EXHIBIT C - COMMENCEMENT DATE MEMORANDUMC-1

EXHIBIT D - RULES AND REGULATIONSD-1

EXHIBIT E - FORM OF GUARANTYE-

LEASE

REFERENCE PAGES

BUILDING:	Reston Plaza II 12020 Sunrise Valley Drive Reston, VA 20191
LANDLORD:	TMT Reston I & II, Inc., a Delaware corporation
LANDLORD’S ADDRESS:	c/o RREEF 8280 Greensboro Drive, Suite 550 McLean, Virginia 22102 Attn: Patrick N. Connell, Vice President / Regional Director with a copy (which shall not constitute notice) to: Covington & Burling 1201 Pennsylvania Avenue, N.W. Washington, D.C. 20004-2401 Attention: Robert J. Gage, Esq.
ADDRESS FOR RENT PAYMENT:	TMT Reston I & II, Inc. P.O. Box 13517 Newark, NJ 07188-0517
LANDLORD’S REGISTERED AGENT FOR SERVICE OF PROCESS:	Commonwealth Legal Services Corporation 4701 Cox Road, Suite 301 Glen Allen, VA 23060-6802
LEASE REFERENCE DATE:	February 28, 2006
TENANT:	Talk America Inc., a Pennsylvania corporation
GUARANTOR	Talk America Holdings, Inc., a Delaware corporation
TENANT’S NOTICE ADDRESS:
(a) As of beginning of Term:	Premises with a copy (which shall not constitute notice) to: Talk America Inc. 6805 Route 202 New Hope, Pennsylvania 18938 Attn: Legal Department
(b) Prior to beginning of Term (if different):	Premises with a copy (which shall not constitute notice) to: Talk America Inc. 6805 Route 202 New Hope, Pennsylvania 18938 Attn: Legal Department
PREMISES IDENTIFICATION:	Suite Number 250 on the second (2nd) floor of the Building (for outline of Premises see Exhibit A)
PREMISES RENTABLE AREA:	Approximately 10,019 sq. ft. (for outline of Premises see Exhibit A)
COMMENCEMENT DATE:	December 1, 2005
TERM OF LEASE:	Approximately four (4) years, zero (0) months and zero (0) days beginning on the Commencement Date and ending on the Termination Date. The period from the Commencement Date to the last day of the same month is the “Commencement Month.”
TERMINATION DATE:	November 30, 2009
EXTENSION OPTION	Subject to the provisions set forth in Section 2.2, Tenant shall receive an option to extend the Term of this Lease for all or a portion of the Premises for one (1) consecutive extension term of five (5) consecutive years
EXPANSION SPACE OPTION	Subject to the provisions set forth in Section 2.3, Tenant shall receive an option to lease any remaining portion of the second (2nd) floor of the Building that shall become vacant and available or is reasonably expected by Landlord to become vacant and available during the first two (2) years of the initial Term of this Lease
ANNUAL RENT:	Twenty six and 00/100 Dollars ($26.00) per rentable square foot per annum, subject to an escalation of three percent (3%) per annum on each anniversary of the Commencement Date, commencing with the first (1st) anniversary of the Commencement Date.
RENT ABATEMENT (Article 3):	Subject to the provisions set forth in Articles 3 and 19 of this Lease, Tenant shall receive an abatement during the first (1st) full calendar month of the Term of this Lease equal to one hundred percent (100.0%) of such Monthly Installment of the initial Annual Rent.

MONTHLY INSTALLMENT OF RENT:

Lease Year	Rentable Square Footage	Annual Rent Per Square Foot	Annual Rent	Monthly Installment of Rent
1˚	10,019	$26.00	$260,494.00	$21,707.83
2	10,019	$26.78	$268,308.82	$22,359.07
3	10,019	$27.58	$276,324.02	$23,027.00
4	10,019	$28.41	$284,639.79	$23,719.98

˚ Subject to an abatement as set forth in Section 3.1.1.

BASE YEAR (EXPENSES):	January 1, 2006 to December 31, 2006
BASE YEAR (INSURANCE):	January 1, 2006 to December 31, 2006
BASE YEAR (TAXES):	January 1, 2006 to December 31, 2006
BUILDING SIZE	approximately 48,886 sq. ft.
TENANT’S PROPORTIONATE SHARE:	20.49%
SECURITY DEPOSIT:	$21,707.83, subject to the provisions set forth in Section 5
ASSIGNMENT/SUBLETTING FEE:	$1,500.00
AFTER-HOURS HVAC COST:	$40.00 per hour, subject to change at any time, from time to time.
HOLIDAYS	New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day, subject to change at any time, from time to time.
REAL ESTATE BROKER DUE COMMISSION:	Studley (Virginia), Inc.
TENANT’S SIC CODE:	4812
BUILDING BUSINESS HOURS:	Monday - Friday, 8:00 a.m. - 6:00 p.m. Saturday, 8:00 a.m. - 1:00 p.m.
AMORTIZATION RATE:	10%

The Reference Pages information is incorporated into and made a part of the Lease. In the event of any conflict between any Reference Pages information and the Lease, the Lease shall control. This Lease includes the Exhibits, all of which are made a part of this Lease.

[SIGNATURES CONTAINED ON NEXT PAGE]

WITNESS: By: /s/ Patricia M. Webel Name: Patricia M. Webel Title: Property Manager	LANDLORD: TMT RESTON I & II, INC., a Delaware corporation By:RREEF Management Company, a Delaware corporation By: /s/ Patrick N. Connell Name: Patrick N. Connell Title: Vice President / Regional Director Dated: 9-26-05
ATTEST: By: /s/ Craig H. Pizer Name: Craig H. Pizer Title: Associate General Counsel - Assistant Secretary [Corporate Seal]	TENANT: TALK AMERICA INC. a Pennsylvania corporation By: /s/ Aloysius T. Lawn, IV Name: Aloysius T. Lawn IV Title: EVP- General Counsel Dated: 9-19-05

LEASE

 By this Lease Landlord leases to Tenant and Tenant leases from Landlord the Premises in the Building as set forth and described on the Reference Pages. The Premises are depicted on the floor plan attached hereto as Exhibit A, and the Building is depicted on the site plan attached hereto as Exhibit A-1. The Reference Pages, including all terms defined thereon, are incorporated as part of this Lease.

1.    USE AND RESTRICTIONS ON USE.

 1.1     The Premises are to be used solely for general office purposes. Tenant shall not do or permit anything to be done in or about the Premises which will in any way obstruct or interfere with the lease rights of other tenants or occupants of the Building, including, but not limited to, any exclusive lease rights of another tenant or occupant of the Building, or injure, annoy, or disturb them, or allow the Premises to be used for any improper, immoral, unlawful, or objectionable purpose, or commit any waste. Tenant shall not do, permit or suffer in, on, or about the Premises the sale of any alcoholic liquor without the written consent of Landlord first obtained. Tenant shall comply with all governmental laws, ordinances and regulations applicable to the use of the Premises and its occupancy and shall promptly comply with all governmental orders and directions for the correction, prevention and abatement of any violations in the Building or appurtenant land, caused or permitted by, or resulting from the specific use by, Tenant, or in or upon, or in connection with, the Premises, all at Tenant’s sole expense. Tenant shall not do or permit anything to be done on or about the Premises or bring or keep anything into the Premises which will in any way increase the rate of, invalidate or prevent the procuring of any insurance protecting against loss or damage to the Building or any of its contents by fire or other casualty or against liability for damage to property or injury to persons in or about the Building or any part thereof. Landlord represents that, to the best of Landlord’s actual knowledge (defined as the personal knowledge of Patrick N. Connell, Vice President and Regional Director of RREEF Management Company), as of the Commencement Date, the common areas of the Building and appurtenant land are in compliance with all applicable laws.

 1.2Tenant shall not, and shall not direct, suffer or permit any of its agents, contractors, employees, licensees or invitees (collectively, the “Tenant Entities”) to at any time handle, use, manufacture, store or dispose of in or about the Premises or the Building any (collectively “Hazardous Materials”) flammables, explosives, radioactive materials, hazardous wastes or materials, toxic wastes or materials, or other similar substances, petroleum products or derivatives or any substance subject to regulation by or under any federal, state and local laws and ordinances relating to the protection of the environment or the keeping, use or disposition of environmentally hazardous materials, substances, or wastes, presently in effect or hereafter adopted, all amendments to any of them, and all rules and regulations issued pursuant to any of such laws or ordinances (collectively “Environmental Laws”), nor shall Tenant suffer or permit any Hazardous Materials to be used in any manner not fully in compliance with all Environmental Laws, in the Premises or the Building and appurtenant land or allow the environment to become contaminated with any Hazardous Materials. Notwithstanding the foregoing, Tenant may handle, store, use or dispose of products containing small quantities of Hazardous Materials (such as aerosol cans containing insecticides, toner for copiers, paints, paint remover and the like) to the extent customary and necessary for the use of the Premises for general office purposes; provided that Tenant shall always handle, store, use, and dispose of any such Hazardous Materials in a safe and lawful manner and never allow such Hazardous Materials to contaminate the Premises, Building and appurtenant land or the environment. Tenant shall protect, defend, indemnify and hold each and all of the Landlord Entities (as defined in Article 30) harmless from and against any and all loss, claims, liability or costs (including court costs and attorney’s fees) incurred by reason of any actual or asserted failure of Tenant to fully comply with all applicable Environmental Laws, or the presence, handling, use or disposition in or from the Premises of any Hazardous Materials by Tenant or any Tenant Entity (even though permissible under all applicable Environmental Laws or the provisions of this Lease), or by reason of any actual or asserted failure of Tenant to keep, observe, or perform any provision of this Section 1.2.

2.  TERM.

 2.1 The Term of this Lease shall begin on the Commencement Date. The parties hereby acknowledge that Talk America Holdings, Inc. (“Parent”), a Delaware corporation, is currently in possession of the Premises pursuant to that certain lease agreement dated April 28, 2000 by and between Landlord, as successor-in-interest to Reston Plaza I & II, LLC, and Parent, as successor-in-interest to Talk.com, as amended by that certain First Amendment to Lease dated May 6, 2004 and that certain Second Amendment to Lease dated , 2004 (as amended, the “Prior Lease”) and that Tenant is the wholly-owned subsidiary of Parent. The parties also acknowledge that Tenant is currently in possession of approximately 1,136 rentable square feet on the first (1st) floor of that certain building located at 12030 Sunrise Valley Drive in Reston, Virginia pursuant to the terms of that certain lease agreement dated October 28, 2004, by and between Landlord and Tenant (the “Reston I Lease”). Tenant acknowledges that it enters into this Lease without any representations or warranties by the Landlord, or anyone acting or purporting to act on behalf of Landlord, as to the present or future condition of the Premises or the appurtenances thereto or any improvements therein or of the Building, except as specifically set forth in this Lease. It is further agreed that Tenant does and will accept the Premises “AS IS” in their present condition as of the date hereof and the Landlord has no obligation to perform any work therein. Notwithstanding any provision in this Lease to the contrary, if the Term has not commenced within one (1) year after the date of this Lease, this Lease shall automatically terminate on the first (1st) anniversary of the date hereof. The sole purpose of the preceding sentence is to avoid any possible interpretation that this Lease violates the Rule Against Perpetuities or other rule of law against restraints on alienation.

  2.1.1 The parties agree that the Prior Lease shall terminate pursuant to a separate agreement by and between Landlord and Tenant (“Prior Lease Termination Agreement”). The Prior Lease, the Prior Lease Termination Agreement and the Reston I Lease shall constitute the “Related Agreements.” Any Event of Default as defined in the Related Agreements existing as of the Commencement Date of this Lease shall constitute an immediate Event of Default (as defined hereinafter), to which no notice by Landlord to Tenant shall be required. Any default under any of the Related Agreements shall constitute a default hereunder, as further set forth in Section 18.1.2.

 2.2 Provided that: (i) Tenant is in physical possession and actual occupancy of the Premises and no Event of Default exists at the time of the exercise of such option or arises subsequent thereto, and no event exists which by notice and/or the passage of time would constitute an Event of Default if not cured within the applicable cure period provided under this Lease; and (ii) Tenant has not sublet or assigned any of its rights, title, and interest in and to this Lease, Tenant shall have the option to extend this Lease with respect to all or a portion of the Premises for one (1) consecutive extension term of five (5) consecutive years, provided Tenant notifies Landlord in writing of its exercise of such option not sooner than twelve (12) months nor later than nine (9) months prior to the Termination Date. Annual Rent during such extension term shall be at one hundred percent (100%) of the fair market rate, including market concessions, as determined by the mutual agreement of Landlord and Tenant, and provided that Tenant shall post an increase in its Security Deposit which is commensurate with such new Annual Rent. Such Annual Rent for the extension term shall escalate at the fair market escalation rate as determined by the mutual agreement of Landlord and Tenant, provided that in no event shall such Annual Rent escalate at less than the escalation rate of three (3%) per annum. All other provisions of this Lease shall remain the same during the extension term, except that Tenant shall have no further extension option and the Base Year shall be the first (1st) full calendar year of the extension term. Should Landlord and Tenant be unable for any reason to agree upon a new Annual Rent and/or escalation rate within forty-five (45) days after Tenant’s exercise of this option, then the Annual Rent and/or escalation rate, as applicable, shall, at Tenant’s sole option and discretion, be determined by appraisal by a board of three (3) real estate brokers, one of whom shall be named by Landlord, one by Tenant, and the two so appointed shall select a third. Such brokers shall be members of the Greater Washington Association of Commercial Realtors or any successor thereto, licensed in the Commonwealth of Virginia, and each shall have not less than ten (10) years’ experience in the field of commercial office leasing in the Washington, D.C. metropolitan area. Each shall be recognized as being ethical and reputable within its field. Landlord and Tenant agree to make their appointments promptly within ten (10) business days after the expiration of the forty-five (45) day period, and the two brokers shall promptly select a third broker within fifteen (15) days thereafter. Each broker shall, within thirty (30) days after selection of the third broker, submit its determination of the Annual Rent and/or escalation rate, as applicable, and the Annual Rent and/or escalation rate, as applicable, shall be deemed to be the rent and/or escalation rate, as applicable, determined by the third broker, unless it is higher than the higher of the two values determined by the first two brokers, in which event the higher of the first two appraisals shall be the Annual Rent and/or escalation rate, as applicable, or unless it is lower than the lower of the two values determined by the first two brokers, in which event the lower of the first two appraisals shall be the Annual Rent or escalation rate, as applicable. In arriving at its rental rate determinations, each broker shall consider and analyze all material components of the Lease, and review terms being offered to prospective office tenants for comparable space in comparable office buildings and locations in the northern Virginia metropolitan area for leases commencing on or about the time of commencement of the extension period. In no event shall the escalation rate be less than three percent (3%) per annum. Landlord and Tenant shall each pay the fee of the broker selected by it and they shall share equally the payment of the fee of the third broker.

 2.3Provided that: (i) Tenant is in physical possession and actual occupancy of the Premises and no Event of Default exists at the time of the exercise of such option or arises subsequent thereto, and no event exists or arises subsequent thereto which by notice and/or the passage of time would constitute an Event of Default if not cured within the applicable cure period provided under this Lease; and (ii) Tenant has not sublet or assigned any of its rights, title, and interest in and to this Lease, and subject to any pre-existing rights granted to other tenants, if at any time during the first two (2) years of the initial Term of this Lease any remaining portion of the second (2nd) floor of the Building (each such portion, an “Expansion Space”), as shown on Exhibit A-2, attached hereto, shall become vacant and available or is reasonably expected by Landlord to become vacant and available, Landlord shall notify Tenant of the availability of such Expansion Space in writing and Landlord shall provide Tenant with a copy of the proposed terms and conditions (“Proposed Expansion Space Terms”) under which Landlord shall offer such Expansion Space, including the Annual Rent and the date of anticipated delivery of possession. Tenant shall have ten (10) days from the date of Landlord’s notice to Tenant to advise Landlord in writing that Tenant accepts such Expansion Space (“Expansion Space Election Period”) on the Proposed Expansion Space Terms, in its “AS IS” condition, with all Building systems servicing such Expansion Space in working condition at Landlord’s reasonable expense, and agrees that it shall become a part of the Premises. Tenant shall be solely responsible for all repairs, improvements, alterations, fixtures and furnishings to be made or installed in Expansion Space. Subject to the terms and conditions of Article 6 of this Lease, Tenant shall obtain Landlord’s prior written approval of Tenant’s drawings, plans and specifications before commencing construction of improvements. Tenant’s obligation to commence payment of Annual Rent for such Expansion Space shall occur on the day the Expansion Space is substantially completed by Tenant, but in no case longer than the earlier to occur of (i) sixty (60) days from the initiation of the construction of improvements or (ii) sixty (60) days from the date of delivery of possession by Landlord to Tenant. If Tenant shall not so elect to lease Expansion Space within the Expansion Space Election Period, Landlord may lease such Expansion Space to a third party. In the event Landlord and Tenant agree on lease terms pursuant to this Section 2.3, the parties shall enter into an amendment modifying this Lease to set forth such lease terms within thirty (30) days of the parties’ agreement; provided, however, if either party shall fail to do so after Tenant shall have exercised its option for the Expansion Space, they shall each be bound by their mutual agreement as to the Annual Rent and additional rent. Annual Rent for such Expansion Space shall be at one hundred percent (100%) of the fair market rate, including market concessions provided to Tenant pursuant to this Lease, as determined by the mutual agreement of Landlord and Tenant, provided that Tenant shall post an increase in its Security Deposit which is commensurate with the additional Annual Rent of such Expansion Space. Such Annual Rent for the Expansion Space shall escalate at the fair market escalation rate as determined by the mutual agreement of Landlord and Tenant, provided that in no event shall such Annual Rent escalate at less than the escalation rate of three (3%) per annum. All other provisions of this Lease shall remain the same with respect to the Expansion Space. Should Landlord and Tenant be unable for any reason to agree upon the Annual Rent and/or escalation rate within forty-five (45) days after Tenant’s exercise of this option, then the Annual Rent and/or escalation rate, as applicable, shall be determined by appraisal by a board of three (3) real estate brokers, one of whom shall be named by Landlord, one by Tenant, and the two so appointed shall select a third. Such brokers shall be members of the Greater Washington Association of Commercial Realtors or any successor thereto, licensed in the Commonwealth of Virginia, and each shall have not less than ten (10) years’ experience in the field of commercial office leasing in the Washington, D.C. metropolitan area. Each shall be recognized as being ethical and reputable within its field. Landlord and Tenant agree to make their appointments promptly within ten (10) business days after the expiration of the forty-five (45) day period, and the two brokers shall promptly select a third broker within fifteen (15) days thereafter. Each broker shall, within thirty (30) days after selection of the third broker, submit its determination of the Annual Rent and/or escalation rate for such Expansion Space, as applicable and the Annual Rent and/or escalation rate for such Expansion Space, as applicable, shall be deemed to be the rent and/or escalation rate, as applicable, determined by the third broker, unless it is higher than the higher of the two values determined by the first two brokers, in which event the higher of the first two appraisals shall be the Annual Rent and/or escalation rate, as applicable, or unless it is lower than the lower of the two values determined by the first two brokers, in which event the lower of the first two appraisals shall be the Annual Rent or escalation rate, as applicable. In arriving at its rental rate determinations, each broker shall consider and analyze all material components of the Lease, and review terms being offered to prospective office tenants for comparable space in comparable office buildings and locations in the northern Virginia metropolitan area for leases commencing on or about the time of commencement of the extension period. In no event shall the escalation rate be less than three percent (3%) per annum. Landlord and Tenant shall each pay the fee of the broker selected by it and they shall share equally the payment of the fee of the third broker. Notwithstanding anything contained herein to the contrary, Tenant shall have no right to lease from Landlord and Landlord shall have no obligation to lease to Tenant any such Expansion Space which shall become vacant and available or is reasonably expected by Landlord to become vacant and available after the first two (2) years of the initial Term of this Lease.

3.    RENT.

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

  3.1.1Notwithstanding the foregoing, provided that there shall not exist any Event of Default, and subject to the provisions of Section 19.3 below, the Monthly Installment of Annual Rent due for the first (1st) full calendar month following the Commencement Date shall be abated. Nothing in this Section 3.1.1, however, shall be interpreted to except or excuse Tenant from any additional rent or other amounts due under this Lease or the Prior Lease to Landlord.

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

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

4.   RENT ADJUSTMENTS.

 4.1For the purpose of this Article 4, the following terms are defined as follows:

  4.1.1 Lease Year: Each consecutive twelve (12) month period falling partly or wholly within the Term; provided, however, if the Commencement Month is not a full calendar month, then the first Lease Year shall consist of the Commencement Month and the subsequent twelve (12) consecutive month period.

  4.1.2 Expenses: All costs of operation, maintenance, repair, replacement and management of the Building (including (A) the amount of any credits which Landlord may grant to particular tenants of the Building in lieu of providing any standard services or paying any standard costs described in this Section 4.1.1 for similar tenants and (B) the portion of shared expenses allocable to the Building as provided for in the final sentence of this Section 4.1.2), as determined in accordance with generally accepted accounting principles, including the following costs by way of illustration, but not limitation: water and sewer charges; utility costs, including, but not limited to, the cost of heat, light, power, steam, gas; waste disposal; the cost of janitorial services; the cost of access control and monitoring services (including any central station signaling system); costs of cleaning, repairing, replacing and maintaining the common areas, including parking and landscaping, window cleaning costs; labor costs; costs and expenses of managing the Building including management and/or administrative fees; air conditioning maintenance costs; elevator maintenance fees and supplies; material costs; equipment costs including the cost of maintenance, repair and service agreements and rental and leasing costs; purchase costs of equipment; current rental and leasing costs of items which would be capital items if purchased; tool costs; licenses, permits and inspection fees; wages and salaries; employee benefits and payroll taxes; accounting and legal fees; any sales, use or service taxes incurred in connection therewith. In addition, Landlord shall be entitled to recover, as additional rent (which, along with any other capital expenditures constituting Expenses, Landlord may either include in Expenses or cause to be billed to Tenant along with Expenses and Taxes but as a separate item), Tenant’s Proportionate Share of: (i) an allocable portion of the cost of capital improvement items which are reasonably calculated to reduce operating expenses; (ii) the cost of fire sprinklers and suppression systems and other life safety systems; and (iii) other capital expenses which are required under any governmental laws, regulations or ordinances which were not applicable to the Building at the time it was constructed; but the costs described in this sentence shall be amortized over the reasonable life of such expenditures in accordance with such reasonable life and amortization schedules as shall be determined by Landlord in accordance with generally accepted accounting principles, with interest on the unamortized amount at one percent (1%) in excess of the Wall Street Journal prime lending rate announced from time to time. Expenses shall not include Taxes, Insurance Costs, depreciation or amortization of the Building or equipment in the Building except as provided herein, loan principal payments, costs of alterations of tenants’ premises, leasing commissions, interest expenses on long-term borrowings or advertising costs. If any Expenses are shared jointly between or among the Building and another building, such as, but not limited to, Reston Plaza I, such costs shall be allocated proportionately between or among such buildings based upon the rentable square footage of each building, or such other equitable manner as Landlord shall deem appropriate.

  Notwithstanding anything to the contrary, Expenses shall not include Taxes, Insurance Costs, depreciation or amortization of the Building or equipment in the Building except as provided herein, loan principal payments, costs of alterations of tenants’ premises, leasing commissions; interest expenses on long-term borrowings; advertising costs; wages and salaries for off-site employees and employees at the Building above the level of district manager; costs of repairs, restoration, replacements or other work occasioned by (1) fire, windstorm or other casualty of a customarily insurable nature (whether such destruction be total or partial) and either (aa) payable (whether paid or not) by insurance required to be carried by Landlord under this Lease, or (bb) otherwise payable (whether paid or not) by insurance then in effect obtained by Landlord, (2) the exercise by governmental authorities of the right of eminent domain, whether such taking be total or partial; (3) the gross negligence or intentional tort of Landlord, or any subsidiary or affiliate of Landlord, or any representative, employee or agent of same, or (4) the act of any other tenant in the Building, or any other tenant’s agents, employees, licensees or invitees to the extent Landlord has the right to recover and actually recovers the applicable cost from such person; attorneys’ fees, costs, disbursements and other expenses incurred in connection with negotiations for leases with tenants, other occupants, or prospective tenants or other occupants of the Building, or similar costs incurred in connection with disputes with tenants, other occupants, or prospective tenants; allowances, concessions and other costs and expenses incurred in completing fixturing, furnishing, renovating or otherwise improving, decorating or redecorating space for tenants (including Tenant), prospective tenants or other occupants and prospective occupants of the Building or vacant, leasable space in the Building; costs of the initial construction of the Building; deductions for depreciation of the original Building when initially constructed; costs of expenses relating to another tenant’s or occupant’s space which were in excess of the Building standard services then being provided by Landlord to all tenants or other occupants in the Building, whether or not such other tenant or occupant is actually charged therefor by Landlord; payments of rent made on any debt payments made under any ground or underlying lease or leases, except to the extent that a portion of such rental payments is reasonably allocable to ad valorem/real estate taxes and increased property values as a result of such leases; except as real estate taxes may be increased due to a re-assessment of the Building upon any of such events, costs incurred in connection with the sale, financing, refinancing, mortgaging, selling or change of ownership of the Building, including brokerage commissions, attorneys’ and accountants’ fees, closing costs, title insurance premiums, transfer and recordation taxes as a result of such action, and interest charges; costs, fines, interest, penalties, legal fees or costs of litigation incurred due to the late payments of taxes, utility bills and other costs incurred by Landlord’s failure to make such payments when due; costs incurred by Landlord for trustee’s fees, partnership organizational expenses and accounting fees except accounting fees relating solely to the ownership and operation of the Building (exclusive of the incremental accounting fees to the extent incurred separately in reporting operating results to the Building owners or lenders); any compensation paid to clerks, attendants or other persons in commercial concessions operated by Landlord or in the parking garage of the Building; Landlord’s income and franchise taxes (other than those business taxes which relate solely to the operation of the Building); all amounts which would otherwise be included in operating expenses which are paid to any affiliate or subsidiaries of Landlord, to the extent the costs of such services exceed the competitive rates for similar services of comparable quality; costs or expenses of utilities directly metered to tenants of the Building and payable separately by such tenants; moving expense costs of tenants of the Building to the extent not provided by Landlord (i) to Tenant and (ii) generally to other initial tenants of the Building; advertising and promotional costs associated with the leasing of the Building; costs incurred to correct violations by Landlord of any law, rule, order or regulation which was in effect as of the Commencement Date; electric power costs for which any tenant directly contracts with the local public service company; and management fees in excess of fair market management fees.

  4.1.3Taxes: Real estate taxes and any other taxes, charges and assessments which are levied with respect to the Building or the land appurtenant to the Building, or with respect to any improvements, fixtures and equipment or other property of Landlord, real or personal, located in the Building and used in connection with the operation of the Building and said land, any payments to any ground lessor in reimbursement of tax payments made by such lessor; and all fees, expenses and costs incurred by Landlord in investigating, protesting, contesting or in any way seeking to reduce or avoid increase in any assessments, levies or the tax rate pertaining to any Taxes to be paid by Landlord in any calendar year. Taxes shall not include any corporate franchise, or estate, inheritance or net income tax, or tax imposed upon any transfer by Landlord of its interest in this Lease or the Building or any taxes to be paid by Tenant pursuant to Article 28. If any Taxes are shared jointly between or among the Building and another building, such as, but not limited to, Reston Plaza I, such costs shall be allocated proportionately between or among such buildings based upon the rentable square footage of each building, or such other equitable manner as Landlord shall deem appropriate.

  4.1.4Insurance Costs: Any and all insurance charges of or relating to all insurance policies and endorsements deemed by Landlord to be reasonably necessary or desirable and relating in any manner to the protection, preservation, or operation of the Building or any part thereof. If any Insurance Costs are shared jointly between or among the Building and another building, such as, but not limited to, Reston Plaza I, such costs shall be allocated proportionately between or among such buildings based upon the rentable square footage of each building, or such other equitable manner as Landlord shall deem appropriate.

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

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

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

 4.5When the above mentioned actual determination of Tenant’s liability for Expenses, Insurance Costs and/or Taxes is made for any calendar year and when Tenant is so notified in writing, then:

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

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

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

5   SECURITY DEPOSIT.

 5.1Tenant shall deposit the Security Deposit with Landlord upon the execution of this Lease. Notwithstanding the foregoing, Landlord and Tenant acknowledge and agree that Parent previously has deposited a security deposit with respect to the Premises under the Prior Lease in the amount of Forty Thousand Nine Hundred Fifty and 50/100 Dollars ($40,950.50) (the “Prior Lease Security Deposit”). Landlord and Tenant acknowledge and agree that, in accordance with the terms and conditions of the Prior Lease Termination Agreement, Landlord shall continue to hold a portion of such Prior Lease Security Deposit equal to the Security Deposit hereunder and that, subject to Landlord’s right to apply any or all of such Prior Lease Security Deposit pursuant to the terms of the Prior Lease, Landlord shall refund the remaining balance, if any, of the Prior Lease Security Deposit to Parent on or before December 31, 2005. The Security Deposit shall be held by Landlord as security for the faithful performance by Tenant of all the terms, covenants and conditions of this Lease to be kept and performed by Tenant and not as an advance rental deposit or as a measure of Landlord’s damage in case of Tenant’s default. If Tenant defaults with respect to any provision of this Lease, Landlord may, after the applicable cure period, use any part of the Security Deposit for the payment of any rent or any other sum in default, or for the payment of any amount which Landlord may spend or become obligated to spend by reason of Tenant’s default, or to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant’s default. If any portion is so used, Tenant shall within ten (10) days after written demand therefor, deposit with Landlord an amount sufficient to restore the Security Deposit to its original amount and Tenant’s failure to do so shall be a material breach of this Lease. Except to such extent, if any, as shall be required by law, Landlord shall not be required to keep the Security Deposit separate from its general funds, and Tenant shall not be entitled to interest on such deposit. Provided that Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, the Security Deposit or any balance thereof shall be returned to Tenant at such time after termination of this Lease when Landlord shall have determined that all of Tenant’s obligations under this Lease have been fulfilled, but in any event no later than sixty (60) days after the expiration of this Lease.

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

6   ALTERATIONS.

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

 6.2In the event Landlord consents to the making of any such alteration, addition or improvement by Tenant, the same shall be made by using a contractor reasonably approved by Landlord, at Tenant’s sole cost and expense. If Tenant shall employ any contractor and such contractor or any subcontractor of such contractor shall employ any non-union labor or supplier, Tenant shall be responsible for and hold Landlord harmless from any and all delays, damages and extra costs suffered by Landlord as a result of any dispute with any labor unions concerning the wage, hours, terms or conditions of the employment of any such labor. In the event that Tenant requests and Landlord provides supervisory services to Tenant in connection with such work, Landlord may charge Tenant an administrative fee not to exceed five percent (5%) of the cost of such work to cover its overhead as it relates to such proposed work. Furthermore, Tenant shall reimburse to Landlord any third-party costs actually incurred by Landlord in connection with the proposed work and the design thereof (including review of such proposed work and design), with all such amounts being due ten (10) days after Landlord’s demand, which will be submitted with reasonable supporting information.

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

7   REPAIR.

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

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

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

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

8   LIENS.

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

9   ASSIGNMENT AND SUBLETTING.

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

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

 9.3In addition to Landlord’s right to approve of any subtenant or assignee, Landlord shall have the option, in its sole discretion, in the event of any proposed subletting or assignment, to terminate this Lease, or in the case of one or more proposed sublettings (together with any prior sublettings) of twenty percent (20%) or more of the Premises in the aggregate for a period constituting the all or substantially all of the remainder of the Term (exclusive of any extension term), to recapture the portion of the Premises to be sublet, as of the date the subletting or assignment is to be effective. The option shall be exercised, if at all, by Landlord giving Tenant written notice given by Landlord to Tenant within thirty (30) days following Landlord’s receipt of Tenant’s written notice as required above. However, if Tenant notifies Landlord, within five (5) days after receipt of Landlord’s termination notice, that Tenant is rescinding its proposed assignment or sublease, the termination notice shall be void and the Lease shall continue in full force and effect; provided, however, Tenant’s failure to rescind its proposed assignment or sublease shall be deemed a waiver of such rescission right by Tenant. If this Lease shall be terminated with respect to the entire Premises pursuant to this Section, the Term of this Lease shall end on the date stated in Tenant’s notice as the effective date of the sublease or assignment as if that date had been originally fixed in this Lease for the expiration of the Term. If Landlord recaptures under this Section only a portion of the Premises, the rent to be paid from time to time during the unexpired Term shall abate proportionately based on the proportion by which the approximate square footage of the remaining portion of the Premises shall be less than that of the Premises as of the date immediately prior to such recapture. Tenant shall, at Tenant’s own cost and expense, discharge in full any outstanding commission obligation which may be due and owing as a result of any proposed assignment or subletting, whether or not the Premises are recaptured pursuant to this Section 9.3 and rented by Landlord to the proposed tenant or any other tenant.

 9.4In the event that Tenant sells, sublets, assigns or transfers this Lease (excluding an assignment, sublease or other transaction as permitted by Section 9.8), Tenant shall pay to Landlord as additional rent an amount equal to seventy five percent (75%) of any Increased Rent (as defined below), less the Costs Component (as defined below), when and as such Increased Rent is received by Tenant. As used in this Section, “Increased Rent” shall mean the excess of (i) all rent and other consideration which Tenant is entitled to receive by reason of any sale, sublease, assignment or other transfer of this Lease, over (ii) the rent otherwise payable by Tenant under this Lease at such time. For purposes of the foregoing, any consideration received by Tenant in form other than cash shall be valued at its fair market value as determined by Landlord in good faith. The “Costs Component” is that amount which, if paid monthly, would fully amortize on a straight-line basis, over the entire period for which Tenant is to receive Increased Rent, the reasonable costs incurred by Tenant for leasing commissions and tenant improvements in connection with such sublease, assignment or other transfer (excluding therefrom, however, any costs or expenses attributable to any vacancy factor).

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

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

 9.7If Tenant is a corporation, limited liability company, partnership or trust, any transfer or transfers of or change or changes within any twelve (12) month period in the number of the outstanding voting shares of the corporation or limited liability company, the general partnership interests in the partnership or the identity of the persons or entities controlling the activities of such partnership or trust resulting in the persons or entities owning or controlling a majority of such shares, partnership interests or activities of such partnership or trust at the beginning of such period no longer having such ownership or control shall be regarded as equivalent to an assignment of this Lease to the persons or entities acquiring such ownership or control and shall be subject to all the provisions of this Article 9 to the same extent and for all intents and purposes as though such an assignment. The foregoing limitation shall not apply to the ordinary purchase and sale of shares of Tenant if Tenant is a corporation, the voting stock of which is listed on a nationally-recognized securities exchange as defined in the Securities Exchange Act of 1934, as amended or superseded.

 9.8Notwithstanding the foregoing provisions of this Article to the contrary, Tenant shall be permitted to assign this Lease, or sublet all or a portion of the Premises, to a Qualified Tenant Affiliate (as hereinafter defined) of Tenant without the prior consent of Landlord, if all of the following conditions are first satisfied:

  9.8.1No Event of Default by Tenant shall have occurred and no event exists which by notice and/or the passage of time would constitute an Event of Default if not cured within the applicable cure period provided under the Lease, if any;

  9.8.2a fully executed copy of such assignment or sublease, the assumption of this Lease by the assignee or acceptance of the sublease by the sublessee, and such other information regarding the assignment or sublease as Landlord may reasonably request, shall have been delivered to Landlord;

  9.8.3the Premises shall continue to be operated solely for general office purposes or other use acceptable to Landlord in its sole discretion;

  9.8.4Tenant shall pay all third party costs reasonably incurred by Landlord in connection with such assignment or subletting, including without limitation attorneys’ fees (such third party costs not to exceed $1,500.00 per such assignment or subletting) and the Assignment/Subletting Fee set forth on the Reference Page of the Lease; and

  9.8.5such Qualified Tenant Affiliate shall possess a creditworthiness and financial net worth acceptable to Landlord in its reasonable discretion (as evidenced by a copy of such entity’s financial statements covering its most recent fiscal year, audited by an independent certified public accounting firm (if available), or if not available, certified by such entity’s chief financial officer).

  Tenant acknowledges (and, at Landlord’s request, at the time of such assignment or subletting shall confirm) that in each instance Tenant shall remain liable for performance of the terms and conditions of the Lease despite such assignment or subletting. If such sublease is for less than all of the Premises, tenant and such sublessee agree to construct at their expense a Building standard multi-tenant corridor on the applicable floor, if required by, and in accordance with applicable laws. Such Qualified Tenant Affiliate’s use of the Premises, in whole or in part, shall not violate any exclusive right granted to another tenant in the Building. As used herein, the term “Qualified Tenant Affiliate” shall mean an entity which (i) directly or indirectly controls Tenant; or (ii) is under the direct or indirect control of Tenant; or (iii) is under common direct or indirect control with Tenant; or (iv) is the successor-in-interest to Tenant after a merger, sale of substantially all of the assets of Tenant or public offering of Tenant’s stock. As used in this Article 9, the term “control” shall mean ownership of fifty-one percent (51%) or more of the voting securities or rights of the controlled entity.

10   INDEMNIFICATION.

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

11   INSURANCE.

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

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

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

12   WAIVER OF SUBROGATION.

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

13   SERVICES AND UTILITIES.

 13.1Provided Tenant shall not be in default under this Lease, and subject to the other provisions of this Lease, Landlord agrees to furnish to the Premises during Building Business Hours (specified on the Reference Pages) on generally recognized business days (but exclusive in any event of Sundays and Holidays), the following services and utilities subject to the rules and regulations of the Building prescribed from time to time, such services to be reasonably commensurate with industry standard for suburban commercial office buildings in the Reston, Virginia submarket, of a similar age, size and quality to the Building: (a) water suitable for normal office use of the Premises; (b) heat and air conditioning required in Landlord’s judgment for the use and occupation of the Premises during Building Business Hours; (c) cleaning and janitorial service; (d) elevator service by nonattended automatic elevators, if applicable; (e) snow removal and pest control; and, (f) equipment to bring to the Premises electricity for lighting, convenience outlets and other normal office use. Landlord shall include electricity costs in Expenses. In the absence of Landlord’s gross negligence or willful misconduct, Landlord shall not be liable for, and Tenant shall not be entitled to, any abatement or reduction of rental by reason of Landlord’s failure to furnish any of the foregoing, unless such failure shall persist for an unreasonable time after written notice of such failure is given to Landlord by Tenant and provided further that Landlord shall not be liable when such failure is caused by accident, breakage, repairs, labor disputes of any character, energy usage restrictions or by any other cause, similar or dissimilar, beyond the reasonable control of Landlord. Landlord shall use reasonable efforts to remedy any interruption in the furnishing of services and utilities.

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

 13.3Wherever heat-generating machines or equipment are used by Tenant in the Premises which affect the temperature otherwise maintained by the air conditioning system or Tenant allows occupancy of the Premises by more persons than the heating and air conditioning system is designed to accommodate, in either event whether with or without Landlord’s approval, Landlord reserves the right, upon providing Tenant with ten (10) days advanced written notice, to install supplementary heating and/or air conditioning units in or for the benefit of the Premises and the cost thereof, including the cost of installation and the cost of operations and maintenance, shall be paid by Tenant to Landlord within ten (10) days of Landlord’s demand.

 13.4 Provided that Landlord’s engineer has concluded in writing that any walls or structural Building elements being used for the installation and existence of such equipment have the capacity to hold such equipment, Tenant may, at its sole expense and subject to Landlord’s prior reasonable approval, including determination that sufficient capacity exists in the base Building systems to support the Tenant’s Supplemental HVAC (as defined hereinafter), install, in accordance with the provisions of Article 6 above, Tenant’s own supplemental heating and cooling equipment (“Tenant’s Supplementary HVAC”) in and for the benefit of the Premises. Tenant shall provide Landlord with complete information concerning Tenant’s Supplementary HVAC, including drawings, plans and specifications and upon request shall furnish additional information with respect thereto. If Landlord should retain design professionals to assist Landlord in evaluating Tenant's Supplementary HVAC drawings, plans or specifications for the Premises pursuant to this Section, such services and related fees and expenses shall be at Tenant's expense. All such work shall be conducted in accordance with Article 6 of this Lease. If Tenant’s Supplementary HVAC shall require electric current in excess of the electric current normally supplied to the Premises or if there are other costs or expenses arising from such installation, use, maintenance, and/or removal of such Supplementary HVAC, Tenant shall pay such additional costs as provided in Section 13.5 below and as may otherwise be incurred. If Tenant is unable to install such Supplementary HVAC for any reason, there shall be no abatement of rent, no constructive eviction, and no liability of Landlord by reason of any injury to or interference with Tenant’s business caused by the absence of such Supplementary HVAC.

 13.5 Tenant will not, without the written consent of Landlord, use any apparatus or device in the Premises, including but not limited to, electronic data processing machines and machines using current in excess of 2000 watts and/or 20 amps or 120 volts, which will in any way increase the amount of electricity or water usually furnished or supplied for use of the Premises for normal office use, nor connect with electric current, except through existing electrical outlets in the Premises, or water pipes, any apparatus or device for the purposes of using electrical current or water. If Tenant shall require water or electric current in excess of that usually furnished or supplied for use of the Premises as normal office use, Tenant shall procure the prior written consent of Landlord for the use thereof, which Landlord may refuse, and if Landlord does consent, Landlord may cause a water meter or electric current meter to be installed so as to measure the amount of such excess water and electric current. The cost of any such meters shall be paid for by Tenant. Tenant agrees to pay to Landlord within ten (10) days of Landlord’s demand , the cost of all such excess water and electric current consumed (as shown by said meters, if any, or, if none, as reasonably estimated by Landlord) at the rates charged for such services by the local public utility or agency, as the case may be, furnishing the same, plus any additional expense incurred in keeping account of the water and electric current so consumed.

 13.6 Tenant will not, without the written consent of Landlord, contract with a utility provider to service the Premises with any utility, including, but not limited to, telecommunications, electricity, water, sewer or gas, which is not previously providing such service to other tenants in the Building. Subject to Landlord’s reasonable rules and regulations and the provisions of Articles 6 and 26, Tenant shall be entitled to the use of wiring (“Communications Wiring”) from the existing telecommunications nexus in the Building to the Premises, sufficient for normal general office use of the Premises. Tenant shall not install any additional Communications Wiring, nor remove any Communications Wiring, without in each instance obtaining the prior written consent of Landlord, which consent may be withheld in Landlord’s sole and absolute discretion. Landlord’s shall in no event be liable for disruption in any service obtained by Tenant pursuant to this paragraph.

 13.7 Without Landlord's prior written permission, to be granted or withheld in Landlord’s sole and absolute discretion, Tenant will not attach any sign on any part of the outside of the Premises or the Building, or on any part of the inside of the Premises that is visible outside the Premises, or in the halls, lobbies, windows, or elevator banks of the Building. Regarding the Permitted Sign (defined hereinafter) and any other approved sign: (i) Tenant will comply with and be subject to the requirements of any and all governmental authorities having jurisdiction over the Building, (ii) Tenant shall maintain at its expense the Permitted Sign and any other approved sign, (iii) such Permitted Sign and any other approved sign shall not violate any other tenant’s signage rights; and (iv) Tenant shall, prior to the end of the Term of this Lease, and at its expense, remove the Permitted Sign and any other approved sign and restore any affected portion of the Building to a condition similar to that which existed prior to the installation of the sign at the time of such removal. If Tenant fails to do so, Landlord may remove all such signs without notice to Tenant and at Tenant's expense. Tenant will not use the name of the Building for any purpose other than the address of the Building. Subject to the foregoing and provided that there shall not exist any Event of Default, and no event exists which by notice and/or the passage of time would constitute an Event of Default if not cured within the applicable cure period provided under this Lease, Tenant may maintain a sign on the outside of the Building at a location to be determined by Landlord in its sole and absolute discretion, the design of which shall be subject to Landlord’s prior written approval, to be granted or withheld in Landlord’s sole and absolute discretion (the “Permitted Sign”).

14   HOLDING OVER.

 14.1Tenant shall pay Landlord for each day Tenant retains possession of the Premises or part of them after termination of this Lease by lapse of time or otherwise at the rate (“Holdover Rate”) which shall be One Hundred Fifty Percent (150%) of the greater of (a) the amount of the Annual Rent for the last period prior to the date of such termination plus all Rent Adjustments under Article 4; and (b) the then market rental value of the Premises as determined by Landlord assuming a new lease of the Premises of the then usual duration and other terms, in either case, prorated on a daily basis, and also pay all damages sustained by Landlord by reason of such retention. If Landlord gives notice to Tenant of Landlord’s election to such effect, such holding over shall constitute renewal of this Lease for a period from month to month at the Holdover Rate, but if the Landlord does not so elect, no such renewal shall result notwithstanding acceptance by Landlord of any sums due hereunder after such termination; and instead, a tenancy at sufferance at the Holdover Rate shall be deemed to have been created. In any event, no provision of this Article 14 shall be deemed to waive Landlord’s right of reentry or any other right under this Lease or at law.

15   SUBORDINATION.

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

 15.2Provided that no Event of Default shall have occurred hereunder during the Term, Landlord shall request and obtain a non-recordable subordination, non-disturbance, and attornment agreement for Tenant from any current and future holder of any mortgage and from the future lessor under any ground lease affecting the Building on such mortgagee’s and/or ground lessor’s standard forms (collectively, “SNDA”); provided, however, in no event shall: (i) Landlord’s failure to obtain an SNDA be a breach of the Lease, provided that Landlord shall have used its reasonable efforts as required of it in this paragraph to obtain an SNDA; provided, however, if Landlord fails to obtain, at a minimum, an SNDA for Tenant on such mortgagee’s and/or ground lessor’s standard forms as described in this paragraph, the sole remedy for such failure shall be that Tenant’s automatic subordination (as may have been evidenced in writing in Section 15.1) as provided in this Article shall be deemed null and void; and (ii) any such SNDA be recorded or prepared in recordable form unless Landlord and such mortgagee or ground lessor shall expressly so authorize it in writing in advance. If any such SNDA shall be recorded in the land records of the Commonwealth of Virginia without the prior written consent of Landlord and any such mortgagee or ground lessor, Tenant shall cause the same to be discharged of record within two (2) business days after the later to occur of the date of recordation or notice from Landlord or any such mortgagee or ground lessor to so discharge such SNDA. If Tenant shall fail to cause such SNDA to be so discharged timely, such failure shall constitute an immediate Event of Default hereunder for which Tenant shall be afforded no further time for cure as may otherwise be provided elsewhere in this Lease. Tenant’s obligation shall survive the expiration or earlier termination of this Lease. In addition, Tenant hereby appoints Landlord as Tenant’s attorney-in-fact (which appointment is coupled with an interest and is irrevocable) for the sole and express purpose of removing any such improperly recorded SNDA from such land records at any time and from time to time. In connection with the exercise of such power, Landlord shall be entitled to execute any and all documents which may be required in connection with the removal of the SNDA from record.

16   RULES AND REGULATIONS.

 16.1Tenant shall faithfully observe and comply with all the rules and regulations as set forth in Exhibit D to this Lease and all reasonable and non-discriminatory modifications of and additions to them from time to time put into effect by Landlord. Landlord shall not be responsible to Tenant for the non-performance by any other tenant or occupant of the Building of any such rules and regulations. Following actual notice to Landlord from Tenant of conduct of another tenant or occupant of the Building, Landlord shall use reasonable efforts to investigate the same and, if such conduct is determined by Landlord in its sole and absolute discretion to be in violation of such tenant’s lease or other Building rule or regulation, then Landlord shall use reasonable efforts have such tenant cease such conduct; provided, however, that Landlord shall be deemed to have made reasonable efforts to have such tenant cease such conduct if Landlord has taken one or more of the following actions in a reasonably timely manner: (i) placed a telephone call to such tenant’s premises or (ii) caused Landlord’s personnel or another representative to visit such tenant’s premises. Tenant acknowledges and agrees that (A) Landlord’s undertaking of either of the identified actions identified in items (i) or (ii) of the preceding sentence shall be deemed reasonable notwithstanding the efficacy of such action by the Landlord; and (B) Landlord shall not be required by the terms of this Lease at any time to undertake or prosecute any legal action with respect to such tenant or its conduct.

17   REENTRY BY LANDLORD.

 17.1With reasonable notice to Tenant (which may be verbal), except in the case of emergency in which case no notice shall be required, Landlord reserves and shall at all times have the right to re-enter the Premises to inspect the same, to supply janitor service and any other service to be provided by Landlord to Tenant under this Lease, to show said Premises to prospective purchasers, mortgagees or tenants, and to alter, improve or repair the Premises and any portion of the Building, without abatement of rent, and may for that purpose erect, use and maintain scaffolding, pipes, conduits and other necessary structures and open any wall, ceiling or floor in and through the Building and Premises where reasonably required by the character of the work to be performed, provided entrance to the Premises shall not be blocked thereby, and further provided that the business of Tenant shall not be interfered with unreasonably. Landlord shall have the right at any time to change the arrangement and/or locations of entrances, or passageways, doors and doorways, and corridors, windows, elevators, stairs, toilets or other public parts of the Building and to change the name, number or designation by which the Building is commonly known. In the event that Landlord damages any portion of any wall or wall covering, ceiling, or floor or floor covering within the Premises, Landlord shall repair or replace the damaged portion to match the original as nearly as commercially reasonable but shall not be required to repair or replace more than the portion actually damaged. Tenant hereby waives any claim for damages for any injury or inconvenience to or interference with Tenant’s business, any loss of occupancy or quiet enjoyment of the Premises, and any other loss occasioned by any action of Landlord authorized by this Article 17, excluding any claims for personal injury or physical damage to Tenant’s property as a result of Landlord’s gross negligence or willful misconduct.

 17.2For each of the aforesaid purposes, Landlord shall at all times have and retain a key with which to unlock all of the doors in the Premises, excluding Tenant’s vaults and safes or special security areas (designated in advance), and Landlord shall have the right to use any and all means which Landlord may deem proper to open said doors in an emergency to obtain entry to any portion of the Premises. As to any portion to which access cannot be had by means of a key or keys in Landlord’s possession, Landlord is authorized to gain access by such means as Landlord shall elect and the cost of repairing any damage occurring in doing so shall be borne by Tenant and paid to Landlord within ten (10) days of Landlord’s demand, provided that Landlord’s inability to gain access is due to the actions or omissions of Tenant or its representatives.

 18  DEFAULT.

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

  18.1.1Tenant shall fail to pay when due any sum of money becoming due to be paid to Landlord under this Lease, whether such sum be any installment of the rent reserved by this Lease, any other amount treated as additional rent under this Lease, or any other payment or reimbursement to Landlord required by this Lease, whether or not treated as additional rent under this Lease, and such failure shall continue for a period of five (5) days after written notice that such payment was not made when due, but if any two (2) such notices shall be given in a twelve (12) month period, for the twelve (12) month period commencing with the date of the second such notice, the failure to pay within five (5) days after due any additional sum of money becoming due to be paid to Landlord under this Lease during such period shall be an Event of Default, without notice.

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

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

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

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

  18.1.6Any Event of Default as defined in the Prior Lease, the Prior Lease Termination Agreement and/or the Reston I Lease shall be an Event of Default hereunder without any notice or opportunity for cure.

19    REMEDIES.

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

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

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

  19.1.3Upon any termination of this Lease, whether by lapse of time or otherwise, Landlord shall be entitled to recover as damages, all rent, including any amounts treated as additional rent under this Lease, and other sums due and payable by Tenant on the date of termination, plus as liquidated damages and not as a penalty, an amount equal to the sum of: (a) in the event of termination for any reason other than by lapse of time, an amount equal to the then present value of the rent reserved in this Lease for the residue of the stated Term of this Lease including any amounts treated as additional rent under this Lease and all other sums provided in this Lease to be paid by Tenant, minus the fair rental value of the Premises for such residue; (b) in the event of termination for any reason other than by lapse of time, the value of the time and expense necessary to obtain a replacement tenant or tenants, and the estimated expenses described in Section 19.1.4 relating to recovery of the Premises, preparation for reletting and for reletting itself; and (c) the cost of performing any other covenants which would have otherwise been performed by Tenant.

  19.1.4Upon any termination of Tenant’s right to possession only without termination of the Lease:

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

   19.1.4.2Landlord shall use commercially reasonable efforts to relet the Premises or portions thereof to the extent required by applicable law. Landlord and Tenant agree that nevertheless Landlord shall at most be required to use only the same efforts Landlord then uses to lease premises in the Building generally and that in any case that Landlord shall not be required to give any preference or priority to the showing or leasing of the Premises or portions thereof over any other space that Landlord may be leasing or have available and may place a suitable prospective tenant in any such other space regardless of when such other space becomes available and that Landlord shall have the right to relet the Premises for a greater or lesser term than that remaining under this Lease, the right to relet only a portion of the Premises, or a portion of the Premises or the entire Premises as a part of a larger area, and the right to change the character or use of the Premises. In connection with or in preparation for any reletting, Landlord may, but shall not be required to, make repairs, alterations and additions in or to the Premises and redecorate the same to the extent Landlord deems necessary or desirable, and Tenant shall pay the cost thereof, together with Landlord’s expenses of reletting, including, without limitation, any commission incurred by Landlord, within ten (10) days of Landlord’s demand. Landlord shall not be required to observe any instruction given by Tenant about any reletting or accept any tenant offered by Tenant unless such offered tenant has a credit-worthiness acceptable to Landlord and leases the entire Premises upon terms and conditions including a rate of rent (after giving effect to all expenditures by Landlord for tenant improvements, broker’s commissions and other leasing costs) all no less favorable to Landlord than as called for in this Lease, nor shall Landlord be required to make or permit any assignment or sublease for more than the current term or which Landlord would not be required to permit under the provisions of Article 9.

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

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

 19.3Tenant understands and agrees that in entering into this Lease, Landlord is relying upon receipt of all the Annual and Monthly Installments of Rent to become due with respect to all the Premises originally leased hereunder over the full Initial Term of this Lease for amortization, including interest at the Amortization Rate. For purposes hereof, the “Concession Amount” shall be defined as the aggregate of all amounts forgone or expended by Landlord as free rent under the lease, under Exhibit B hereof for construction allowances (excluding therefrom any amounts expended by Landlord for Landlord’s Work, as defined in Exhibit B), and for brokers’ commissions payable by reason of this Lease. Accordingly, Tenant agrees that if this Lease or Tenant’s right to possession of the Premises leased hereunder shall be terminated as of any date (“Default Termination Date”) prior to the expiration of the full Initial Term hereof by reason of a default of Tenant, there shall be due and owing to Landlord as of the day prior to the Default Termination Date, as rent in addition to all other amounts owed by Tenant as of such Date, the amount (“Unamortized Amount”) of the Concession Amount determined as set forth below; provided, however, that in the event that such amounts are recovered by Landlord pursuant to any other provision of this Article 19, Landlord agrees that it shall not attempt to recover such amounts pursuant to this Paragraph 19.3. For the purposes hereof, the Unamortized Amount shall be determined in the same manner as the remaining principal balance of a mortgage with interest at the Amortization Rate payable in level payments over the same length of time as from the effectuation of the Concession concerned to the end of the full Initial Term of this Lease would be determined. The foregoing provisions shall also apply to and upon any reduction of space in the Premises, as though such reduction were a termination for Tenant’s default, except that (i) the Unamortized Amount shall be reduced by any amounts paid by Tenant to Landlord to effectuate such reduction and (ii) the manner of application shall be that the Unamortized Amount shall first be determined as though for a full termination as of the Effective Date of the elimination of the portion, but then the amount so determined shall be multiplied by the fraction of which the numerator is the rentable square footage of the eliminated portion and the denominator is the rentable square footage of the Premises originally leased hereunder; and the amount thus obtained shall be the Unamortized Amount.

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

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

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

 19.7 To secure the payment of all rentals and other sums of money becoming due from Tenant under this Lease, Landlord shall have and Tenant grants to Landlord a first lien upon the leasehold interest of Tenant under this Lease, which lien may be enforced in equity, and a continuing security interest upon all goods, wares, equipment, fixtures, furniture, inventory, and other personal property of Tenant situated on the Premises. Such property shall not be removed therefrom without the consent of Landlord until all arrearages in rent as well as any and all other sums of money then due to Landlord under this Lease shall first have been paid and discharged. Upon the occurrence of an Event of Default, Landlord shall have, in addition to any other remedies provided in this Lease or by law, all rights and remedies under the Uniform Commercial Code, including without limitation the right to sell the property described in this Section 19.7 at public or private sale upon five (5) days’ notice to Tenant. Tenant shall execute all such financing statements and other instruments as shall be deemed necessary or desirable in Landlord’s reasonable discretion to perfect the security interest hereby created.

 19.8Any and all property which may be removed from the Premises by Landlord pursuant to the authority of this Lease or of law, to which Tenant is or may be entitled, may be handled, removed and/or stored, as the case may be, by or at the direction of Landlord but at the risk, cost and expense of Tenant, and Landlord shall in no event be responsible for the value, preservation or safekeeping thereof. Tenant shall pay to Landlord, upon demand, any and all expenses incurred in such removal and all storage charges against such property so long as the same shall be in Landlord’s possession or under Landlord’s control. Any such property of Tenant not retaken by Tenant from storage within thirty (30) days after removal from the Premises shall, at Landlord’s option, be deemed conveyed by Tenant to Landlord under this Lease as by a bill of sale without further payment or credit by Landlord to Tenant.

 19.9If more than two (2) Events of Default occur during the Term and/or any renewal thereof, Tenant’s renewal options, expansion options, purchase options and rights of first offer and/or refusal, if any are provided for in this Lease, shall be null and void.

20   TENANT’S BANKRUPTCY OR INSOLVENCY.

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

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

   20.1.1.1Such Debtor’s Law shall provide to Tenant’s Representative a right of assumption of this Lease which Tenant’s Representative shall have timely exercised and Tenant’s Representative shall have fully cured any default of Tenant under this Lease.

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

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

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

21    QUIET ENJOYMENT.

 21.1Landlord represents and warrants that it has full right and authority to enter into this Lease and that Tenant, while paying the rental and performing its other covenants and agreements contained in this Lease, shall peaceably and quietly have, hold and enjoy the Premises for the Term without hindrance or molestation from Landlord subject to the terms and provisions of this Lease. Landlord shall not be liable for any interference or disturbance by other tenants or third persons, nor shall Tenant be released from any of the obligations of this Lease because of such interference or disturbance.

22   CASUALTY

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

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

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

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

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

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

23   EMINENT DOMAIN.

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

24   SALE BY LANDLORD.

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

25   ESTOPPEL CERTIFICATES.

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

26   SURRENDER OF PREMISES.

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

 26.2All alterations, additions, and improvements in, on, or to the Premises made or installed by or for Tenant, including carpeting (collectively, “Alterations”), shall be and remain the property of Tenant during the Term. Upon the expiration or sooner termination of the Term, all Alterations shall become a part of the realty and shall belong to Landlord without compensation, and title shall pass to Landlord under this Lease as by a bill of sale. At the end of the Term or any renewal of the Term or other sooner termination of this Lease, Tenant will peaceably deliver up to Landlord possession of the Premises, together with all Alterations by whomsoever made, in the same conditions received or first installed, broom clean and free of all debris, excepting only ordinary wear and tear and damage by fire or other casualty. Notwithstanding the foregoing, if Landlord elects by notice given to Tenant at least ten (10) days prior to expiration of the Term, Tenant shall, at Tenant’s sole cost, remove any Alterations, including carpeting, so designated by Landlord’s notice, and repair any damage caused by such removal. Tenant must, at Tenant’s sole cost, remove upon termination of this Lease, any and all of Tenant’s furniture, furnishings, movable partitions of less than full height from floor to ceiling and other trade fixtures and personal property (collectively, “Personalty”). Personalty not so removed shall be deemed abandoned by the Tenant and title to the same shall thereupon pass to Landlord under this Lease as by a bill of sale, but Tenant shall remain responsible for the cost of removal and disposal of such Personalty, as well as any damage caused by such removal. If there has been a monetary default by Tenant during the six (6) months preceding the expiration or earlier termination of this Lease, then in lieu of requiring Tenant to remove Alterations and Personalty and repair the Premises as aforesaid, Landlord may, by written notice to Tenant delivered at least thirty (30) days before the Termination Date, require Tenant to pay to Landlord, as additional rent hereunder, the cost of such removal and repair in an amount reasonably estimated by Landlord.

 26.3All obligations of Tenant under this Lease not fully performed as of the expiration or earlier termination of the Term shall survive the expiration or earlier termination of the Term Upon the expiration or earlier termination of the Term, Tenant shall pay to Landlord the amount, as reasonably estimated by Landlord, necessary to repair and restore the Premises as provided in this Lease and/or to discharge Tenant’s obligation for unpaid amounts due or to become due to Landlord. All such amounts shall be used and held by Landlord for payment of such obligations of Tenant, with Tenant being liable for any additional costs upon demand by Landlord, or with any excess to be returned to Tenant after all such obligations have been determined and satisfied. Any otherwise unused Security Deposit shall be credited against the amount payable by Tenant under this Lease.

27   NOTICES.

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

28   TAXES PAYABLE BY TENANT.

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

29   INTENTIONALLY OMITTED.

30   DEFINED TERMS AND HEADINGS.

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

31   TENANT’S AUTHORITY.

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

 32  FINANCIAL STATEMENTS AND CREDIT REPORTS.

 32.1At Landlord’s request and so long as the Tenant is not a corporation, the voting stock of which is listed on a nationally-recognized securities exchange as defined in the Securities Exchange Act of 1934, as amended or superseded, Tenant shall deliver to Landlord a copy, certified by an officer of Tenant as being a true and correct copy, of Tenant’s most recent audited financial statement, or, if unaudited, certified by Tenant’s chief financial officer as being true, complete and correct in all material respects. Tenant hereby authorizes Landlord to obtain one or more credit reports on Tenant at any time, and shall execute such further authorizations as Landlord may reasonably require in order to obtain a credit report.

33   COMMISSIONS.

 33.1Each of the parties represents and warrants to the other that it has not dealt with any broker or finder in connection with this Lease, except as described on the Reference Pages. Each party hereby agrees to indemnify, defend and hold the other party harmless from and against any claims by a broker or finder relating to such party’s breach or alleged breach of the foregoing representation or warranty. Landlord agrees to pay the Broker identified on the Reference Pages of this Lease in accordance with the terms of a separate agreement entered into with such Broker.

34   TIME AND APPLICABLE LAW.

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

35   SUCCESSORS AND ASSIGNS.

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

 36  ENTIRE AGREEMENT.

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

37   EXAMINATION NOT OPTION.

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

38   RECORDATION.

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

39   PARKING.

 39.1During the Term of this Lease, provided that Tenant timely pays the fee therefor, Tenant shall have the privilege to use up to thirty-six (36) unreserved, surface parking spaces and up to sixteen (16) unreserved, covered parking spaces (collectively, the “Parking Spaces,” singularly, a “Parking Space”) in the parking facility for the Building at the prevailing market rate for such spaces (the “Monthly Parking Rate”). Such fee shall constitute additional rent under this Lease. The current rate for a Parking Space is Twenty and 00/100 Dollars ($20.00) per space per month, subject to change at any time and from time to time.

  39.1.1Notwithstanding the foregoing, provided that there shall not exist any Event of Default, and no event exists which by notice and/or the passage of time would constitute an Event of Default if not cured within the applicable cure period provided under this Lease, following the Commencement Date the Monthly Parking Rate shall be abated for the initial Term of this Lease. Nothing in this Section 39.1.1, however, shall be interpreted to except or excuse Tenant from any additional rent or other amounts due under this Lease to Landlord.

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

40   LIMITATION OF LANDLORD’S LIABILITY.

 40.1Redress for any claim against Landlord under this Lease shall be limited to and enforceable only against and to the extent of Landlord’s interest in the Building. The obligations of Landlord under this Lease are not intended to be and shall not be personally binding on, nor shall any resort be had to the private properties of, any of its or its investment manager’s trustees, directors, officers, partners, beneficiaries, members, stockholders, employees, or agents, and in no case shall Landlord be liable to Tenant hereunder for any lost profits, damage to business, or any form of special, indirect or consequential damages.

[SIGNATURES CONTAINED ON NEXT PAGE]

WITNESS: By: /s/ Patricia Webel Name: Patricia Webel Title: Property Manager	LANDLORD: TMT RESTON I & II, INC., a Delaware corporation By:RREEF Management Company, a Delaware corporation By: /s/ Patrick N. Connell Name: Patrick N. Connell Title: Vice President / Regional Director Dated: 9-26-05
ATTEST: By: /s/ Craig H. Pizer Name: Craig H. Pizer Title: Associste General Counsel - Assistant Secretary [Corporate Seal]	TENANT: TALK AMERICA INC. a Pennsylvania corporation By: Aloysius T. Lawn IV Name: Aloysius T. Lawn IV Title: Executive Vice-President - General Counsel Dated: 9-19-05

EXHIBIT A - FLOOR PLAN DEPICTING THE PREMISES

attached to and made a part of Lease bearing the

Lease Reference Date of 2/28/2006 between

TMT Reston I & II, Inc., as Landlord and

Talk America Inc., as Tenant

Exhibits A, A-1 and A-2 are intended only to show the general layout of the Premises as of the beginning of the Term of this Lease. They do not in any way supersede any of Landlord’s rights set forth in Article 17 with respect to arrangements and/or locations of public parts of the Building and changes in such arrangements and/or locations. They are not to be scaled; any measurements or distances shown should be taken as approximate.

[Missing Graphic Reference]

EXHIBIT A-1 - SITE PLAN

attached to and made a part of Lease bearing the

Lease Reference Date of 2/28/2006 between

TMT Reston I & II, Inc., as Landlord and

Talk America Inc., as Tenant

EXHIBIT A-2 - EXPANSION SPACE

attached to and made a part of Lease bearing the

Lease Reference Date of 2/28/2006 between

TMT Reston I & II, Inc., as Landlord and

Talk America Inc., as Tenant

EXHIBIT B - INITIAL ALTERATIONS

attached to and made a part of Lease bearing the

Lease Reference Date of 2/28/2006 between

TMT Reston I & II, Inc., as Landlord and

Talk America Holdings, Inc., as Tenant

1.Landlord and Tenant hereby approve the Project Schedule attached as Exhibit B-1.

2.Tenant shall cause its architect and engineer, at its sole expense, to complete all drawings, plans and specifications necessary for the construction of Tenant’s leasehold improvements to be located in the Premises (“Tenant’s Improvements”), including but not limited to, MEP working drawings as required for the permitting and construction of the Premises. Tenant’s architect and engineer shall be subject to Landlord’s reasonable approval; provided, however, Landlord hereby approves KTA Group, Inc. as Tenant’s architect and engineer. Landlord shall provide Tenant with all existing architectural, mechanical, electrical and plumbing plans for the Premises, including any plans in Landlord’s possession that were completed on behalf of prior tenants. All of Tenant’s Improvements and the related drawings, plans and specifications shall comply with applicable laws, shall be suitable for obtaining all necessary construction permits and shall be submitted to Landlord for Landlord’s approval (upon approval by Landlord, the “Final Plans”). Such approval of Landlord shall not be unreasonably withheld, conditioned or delayed (except with respect to matters affecting the base Building structure or systems, for which Landlord’s approval may be granted in Landlord’s sole and absolute discretion). Landlord shall approve or disapprove the drawings, plans and specifications for Tenant’s Improvements in accordance with the Project Schedule and Tenant shall cause any required revisions to be made. Any revisions to drawings, plans and specifications made pursuant to this paragraph shall be made at Tenant’s expense. If Landlord shall retain design professionals to assist Landlord in evaluating Tenant’s drawings, plans or specifications for the Premises pursuant to this Paragraph 2, such services and related reasonable fees and expenses shall be at Tenant’s expense.

3.Tenant shall cause its own contractor to construct Tenant’s Improvements. Tenant’s contractor shall be approved by Landlord, such approval not to be unreasonably withheld, conditioned or delayed subject to the following conditions:

(a)Tenant shall indemnify, defend (with counsel reasonably acceptable to Landlord), and hold harmless Landlord, Landlord’s managing agent, Landlord’s affiliates, and Landlord’s invitees from and against any all losses, damages, costs (including costs of suits and attorneys’ fees), liabilities or causes of action arising out of or relating to Tenant’s Improvements, including but not limited to mechanic’s, materialman’s or other liens or claims (and all costs or expenses associated therewith) asserted, filed or arising out of any such work. Without limiting the generality of the foregoing, Tenant shall repair or cause to be repaired at its expense all damage caused by its contractor and Tenant shall reimburse Landlord for all reasonable costs incurred by Landlord to repair any damage caused by Tenant’s contractor. All parties contracting with Tenant to furnish labor, services, materials, suppliers or equipment with respect to the Premises shall look solely to Tenant for payment of same and Tenant’s purchase orders and contracts shall state this requirement.

(b)Tenant's contract with any contractor with whom Tenant contracts with respect to Tenant's Improvements shall include (i) a provision requiring such contractor to keep the Premises, the Building and appurtenant land and Tenant's leasehold interest in the Premises free from any liens arising out of any work performed with respect to Tenant's Improvements; (ii) an express waiver of any rights the contractor, any subcontractor or any materials supplier may have to claim a mechanic's, materialman's or other lien or claim arising out of any work performed with respect to Tenant's Improvements; and (iii) a provision requiring such contractor to indemnify, defend (with counsel reasonably acceptable to Landlord) and hold harmless Landlord, Landlord’s managing agent, Landlord’s affiliates, and Landlord’s invitees from and against any and all losses, damages, costs (including costs of suits and attorneys' fees), liabilities or causes of action arising out of or relating to Tenant's Improvements, including but not limited to mechanic's, materialman's or other liens or claims (and all costs or expenses associated therewith) asserted, filed or arising out of any work performed with respect to Tenant's Improvements. Tenant shall provide Landlord with final unconditional lien waivers from each contractor with whom Tenant has contracted with respect to Tenant’s Improvements upon final completion of Tenant’s Improvements.

(c)Tenant’s contractor shall conduct its work in such a manner so as not to unreasonably interfere with any construction occurring in the Building, or to disrupt any tenant’s business in the Building and shall comply with Landlord’s rules and regulations applicable to all work being performed in the Building. Landlord shall use commercially reasonable efforts to provide access to the Building and necessary Building systems in order for Tenant to perform its work; provided, however, Landlord need not open the Building outside of normal Business Hours and Landlord shall not incur any third party costs related thereto.

(d)Tenant’s contractor shall maintain such insurance, including but not limited to Builder’s all-risk insurance, and bonds in full force and effect as may be reasonably requested by Landlord or as required by applicable law, and all such insurance shall be with a carrier and in a form acceptable to Landlord. Landlord shall not be responsible for the storage of Tenant’s materials or Tenant’s Improvements.

4.Provided that no uncured default exists under the Lease, and no event exists which, with the giving of notice and passage of time or both would constitute a default, Landlord covenants and agrees that Landlord will contribute to Tenant an amount of $12.00 per rentable square foot of the Premises (“Landlord’s Allowance”) to be applied solely toward: (i) any required construction, demolition, architectural, wiring, engineering, and design costs and (ii) costs of obtaining required permits or other governmental approvals necessary for Tenant’s Improvements; provided, however, up to twenty percent (20%) of Landlord’s Allowance shall, at Tenant’s election, be applied toward the costs of purchasing and installing supplemental HVAC equipment, furniture and fixtures in the Premises or credited against Annual Rent. Landlord shall disburse Landlord’s Allowance directly to Tenant to be applied towards the cost of constructing Tenant’s Improvements, upon satisfaction of the following payment conditions: (a) as to construction, design and engineering costs, Landlord receives evidence of payment by Tenant of invoices approved by Tenant and Tenant’s architect or engineer and which are reasonably acceptable to Landlord; (b) as to permits or other governmental approvals necessary for Tenant’s Improvements, Landlord receives paid receipts and evidence that such permits or other governmental approvals have been issued by the applicable governmental authority (collectively, the foregoing constitute the “Payment Conditions”); and (c) as to supplemental HVAC equipment, furniture and fixtures, Landlord receives paid receipts and evidence that such items have been installed within the Premises and/or Building. Moreover, prior to each such payment by Landlord, the following conditions also shall be satisfied: (i) receipt by Landlord of invoices and/or applications for payment recovering all labor and materials expended and used and subject to a ten percent (10%) retainage until completion of all Tenant’s Improvements, (ii) architect’s and general contractor’s percentage of completion affidavits certifying that the work covered by such invoice and/or application for payment is complete and in place, in form acceptable to Landlord in its sole discretion, (iii) partial lien waivers covering work with respect to which any materialman or contractor was previously paid pursuant to an earlier payment by Landlord (and final unconditional lien waivers with respect to final contract payments upon final completion of Tenant’s Improvements) in form acceptable to Landlord in its sole discretion; (iv) as-built plans (upon final completion) covering all architectural work and mechanical, electrical, plumbing and structural engineering, (v) certification at Tenant’s expense of Tenant’s architect (or Landlord’s architect if Tenant has not retained an architect) that the portion of the Tenant’s Improvements for which payment is being sought has been installed in a good and workmanlike manner in accordance with approved plans and applicable codes and ordinances, and (vi) with respect to final payment and release of retainage, any licenses or permits required by any applicable governmental authority for Tenant’s legal occupancy of the Premises and use of the equipment installed therein. Landlord need not pay Tenant for such charges more frequently than one (1) time per month. In no event shall any portion of Landlord’s Allowance be disbursed if Tenant is in default (or will be in default upon notice and/or lapse of time) under the Lease. Tenant shall cause all costs with respect to Tenant’s Improvements to be timely paid by Tenant, subject to reimbursement by Landlord of the Landlord’s Allowance. Payments to Tenant’s contractor are to be made in full within thirty (30) days of substantial completion of Tenant’s Improvements, subject to Tenant’s withholding ten percent (10%) retainage until completion of all Tenant’s Improvements as provided above. Tenant shall use Landlord’s Allowance within twelve (12) months following the full execution of the Lease or the commencement of construction, whichever is earlier. The costs of any improvements above the foregoing Landlord’s Allowance remaining after payment of (x) the construction costs related to the Tenant’s Improvements and (y) such other costs as described above, shall be paid for solely by Tenant.

5.All payments to Landlord pursuant to this Work Agreement shall constitute additional rent under the Lease, and in the event of nonpayment thereof by Tenant, Landlord shall have all of the rights and remedies set forth in the Lease.

6.Any delay in Tenant’s contractor’s completion of Tenant’s Improvements caused by Landlord Delay (as hereinafter defined) shall result in a day-for day extension of the Commencement Date, except to the extent attributable to Tenant. As used herein, the term “Landlord Delay” shall mean any actual, incremental delays to the extent resulting from (i) Landlord’s failure to make decisions or take actions in accordance with the Project Schedule or (ii) performance or completion by a party employed by Landlord. Notwithstanding anything to the contrary contained herein, Tenant shall notify Landlord within five (5) days after discovering any act or failure to act by Landlord that could cause a Landlord Delay, or Tenant shall waive any right to claim Landlord Delay for such act or failure to act.

EXHIBIT B-1 - PROJECT SCHEDULE

attached to and made a part of Lease bearing the

Lease Reference Date of 2/28/2006between

TMT Reston I & II, Inc., as Landlord and

Talk America Holdings, Inc., as Tenant

Landlord and Tenant agree to the following schedule of obligations with respect to Tenant’s Improvements.

Timing
(a) On or before [INSERT DATE]	Tenant to submit its space plan for the Premises to Landlord for Landlord's review and approval, not to be unreasonably withheld, conditioned or delayed.
(b) On or before 5 business days after Landlord's receipt of the space plan	Landlord to approve or disapprove the space plan.
(c) On or before 5 business days after Landlord's receipt of Tenant's plans and, if applicable, the MEP plans.	Landlord to approve or disapprove the proposed plans and, if applicable, MEP plans (upon such approval, the “Final Plans”).
(d) On or before 5 business days after Landlord's approval of the revised Final Plans.	Landlord and Tenant to agree upon general contractors to submit bids.
(e) On or before 5 business days from receipt of contractor's pricing.	Tenant to review, negotiate (with Landlord's assistance), and approve all pricing, as the same may be adjusted, and Landlord to approve or disapprove any changes to the Final Plans.
(f) Upon Landlord's approval of Tenant’s contractor and any changes to the Final Plans, and, if applicable, Tenant's delivery to Landlord of the T.I. Shortfall.	Tenant to engage Tenant's contractor to commence construction of the Tenant's Improvements.

EXHIBIT C - COMMENCEMENT DATE MEMORANDUM

attached to and made a part of Lease bearing the

Lease Reference Date of 2/28/2006 between

TMT Reston I & II, Inc., as Landlord and

Talk America Inc., as Tenant

COMMENCEMENT DATE MEMORANDUM

THIS MEMORANDUM, made as of __________, 20__, by and between TMT Reston I & II, Inc., a Delaware corporation (“Landlord”) and Talk America Inc., a Pennsylvania corporation (“Tenant”).

Recitals:

A.Landlord and Tenant are parties to that certain Lease, dated for reference _________, 20__ (the “Lease”) for certain premises (the “Premises”) consisting of approximately ________ square feet at the building commonly known as Reston Plaza II located at 12020 Sunrise Valley Drive, Reston, VA 20191.

B.Tenant is in possession of the Premises and the Term of the Lease has commenced.

C.Landlord and Tenant desire to enter into this Memorandum confirming the Commencement Date, the Termination Date and other matters under the Lease.

NOW, THEREFORE, Landlord and Tenant agree as follows:

1.The actual Commencement Date is ________________.

2.The actual Termination Date is ____________________.

3.The schedule of the Annual Rent and the Monthly Installment of Rent set forth on the Reference Pages is deleted in its entirety, and the following is substituted therefor:

[insert rent schedule]

4.Capitalized terms not defined herein shall have the same meaning as set forth in the Lease.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year first above written.

WITNESS: By:____________________________ Name: Title:	LANDLORD: TMT RESTON I & II, INC., a Delaware corporation By:RREEF Management Company, a Delaware corporation By:___________________________ Name: Patrick N. Connell Title: Vice President / Regional Director Dated:________________________
ATTEST: By:_____________________________ Name: Title: [Corporate Seal]	TENANT: TALK AMERICA INC., a Pennsylvania corporation By:______________________________ Name: Title: Dated:________________________

EXHIBIT D - RULES AND REGULATIONS

attached to and made a part of Lease bearing the

Lease Reference Date of 2/28/2006 between

TMT Reston I & II, Inc., as Landlord and

Talk America Holdings, Inc., as Tenant

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

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

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

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

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

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

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

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

9.If Tenant requires telephone, data, burglar alarm or similar service, the cost of purchasing, installing and maintaining such service shall be borne solely by Tenant. No boring or cutting for wires will be allowed without the prior written consent of Landlord, not to be unreasonably withheld, conditioned or delayed.

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

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

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

13.Tenant shall not use any method of heating or air conditioning other than that supplied or approved in writing by Landlord, such approval not to be unreasonably withheld, conditioned or delayed. Any such existing equipment which was previously approved by Landlord under the Prior Lease is automatically approved under this Lease.

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

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

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

17.Tenant shall not install, maintain or operate upon the Premises any vending machine without Landlord’s prior written consent, except that Tenant may install food and drink vending machines solely for the convenience of its employees. Any existing machines previously approved by Landlord under the Prior Lease are automatically approved under this Lease.

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

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

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

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

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

23.Tenant shall not permit smoking or carrying of lighted cigarettes or cigars other than in areas designated by Landlord as smoking areas.

24.Canvassing, soliciting, distribution of handbills or any other written material in the Building is prohibited and each tenant shall cooperate to prevent the same. No tenant shall solicit business from other tenants or permit the sale of any good or merchandise in the Building without the written consent of Landlord.

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

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

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

EXHIBIT E - FORM OF GUARANTY

attached to and made a part of Lease bearing the

Lease Reference Date of 2/28/2006 between

TMT Reston I & II, Inc., as Landlord and

Talk America Inc., as Tenant

CONTINUING GUARANTY OF LEASE

THIS CONTINUING GUARANTY OF LEASE (the “Guaranty”) is made and executed this __ day of ___________, 2004 from (i) TALK AMERICA HOLDINGS, INC., a Delaware corporation (hereinafter referred to as “Guarantor”) to (ii) TMT RESTON I & II, INC., a Delaware corporation, its successor and assigns (hereinafter referred to as “Landlord”).

W I T N E S S E T H :

WHEREAS, Landlord has entered into that certain Lease Agreement with a Lease Reference date of ______________________, 2005, (the “Lease”), whereby Landlord has agreed to lease to Talk America Inc., a Pennsylvania corporation (hereinafter referred to as “Tenant”) certain premises (hereinafter referred to as the “Premises”) comprising approximately 10,019 rentable square feet of the office building commonly known as Reston Plaza II and located at 12020 Sunrise Valley Drive, Reston, Virginia, as described in the Lease; and

WHEREAS, Tenant is wholly owned by Guarantor; and

WHEREAS, by reason of the foregoing relationship, it is in Guarantor’s direct interest and advantage to assist Tenant in securing Landlord’s agreement to execute the Lease; and

WHEREAS, Landlord is willing to execute and deliver the Lease to Tenant only if Guarantor guarantees to Landlord the prompt performance by Tenant of all the covenants, terms, conditions and obligations to be performed by Tenant under the Lease.

NOW, THEREFORE, in consideration of the foregoing, and for the purposes of inducing Landlord to execute the Lease, Guarantor agrees as follows:

28.   Guarantor warrants and represents to Landlord that: (a) the making and performance of this Guaranty by Guarantor will not result in the breach of any term, condition or provision of, or constitute a default under, any contract, agreement or other instrument to which Guarantor is a party or by which Guarantor may be bound, or result in a breach of any regulation, order, writ, injunction or decree of any court or any commission, board or other administrative agency entered in any proceeding to which Guarantor is a party or by which it may be bound; (b) Guarantor’s representation contained in the Recitals set forth hereinabove (all of which are incorporated herein by this reference and made a part hereof) are true, accurate and complete; and (c) under penalty of perjury, the written financial statements and other written information presented to Landlord by Guarantor in connection with the Lease are true, accurate and complete, and do not omit any material fact or amount necessary to avoid making such statements and information misleading.

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

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

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

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

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

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

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

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

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

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

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

Landlord:TMT Reston I & II, Inc.

c/o RREEF

8280 Greensboro Drive

Suite 550

McLean, Virginia 22102

Attn: Patrick N. Connell, Vice President / Regional Director

with a copy, said copy not constituting notice, to:

Covington & Burling

1201 Pennsylvania Avenue, N.W.

Washington, D.C. 20004

Attn: Robert J. Gage, Esq.

Guarantor:Talk America Holdings, Inc.

6805 Route 202

New Hope, PA 18938

Attn: Bill McGrath, Senior VP

with a copy, said copy also constituting notice, to Guarantor’s Agent :

Aloysius T. Lawn, General Counsel

Talk America Holdings, Inc.

6805 Route 202

New Hope, PA 18938

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

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

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

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

44.   In the event that any covenant, condition or other provision herein contained is held to be invalid, void or illegal by any court of competent jurisdiction, the same shall be deemed severable from the remainder of this agreement and shall in no way affect, impair or invalidate any other covenant, condition or other provision herein contained.

[SIGNATURES ON NEXT PAGE]

IN WITNESS WHEREOF, the undersigned have executed this Guaranty on the day and year first above written

    ATTEST:     By: /s/ Craig H. Pizer Name: Craig H. Pizer Title: Associate General Counsel Date: 9-19-05 GUARANTOR:   Talk America Holdings, Inc., a Delaware corporation     By: /s/ Aloysius T. Lawn IV Name: Aloysius T. Lawn IV Title: EVP - General Counsel Date: 9-19-05

[corporate seal]

CITY)ss:

STATE)

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

SUBSCRIBED AND SWORN TO before me this ___ day of _____________, 2005.

[notary seal]_____________________________________

Notary Public

My Commission expires:

________________________

EX-10.36

               ;      

                    Exhibit 10.36

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of the 13th day of July, 2005, between Talk America Holdings, Inc., a Delaware corporation (“Company”), and Mark A. Wayne (“Employee”), and amends and supercedes that certain Employment Agreement dated July 20, 2004, as amended, among LDMI Telecommunications, Inc. and Mark A. Wayne (“Former Agreement”).

Preliminary Statement

WHEREAS, Company desires to employ Employee and Employee desires to be employed by Company; and

WHEREAS, Company and Employee desire to enter into this Agreement that sets forth the terms and conditions of said continued employment.

NOW THEREFORE, in consideration of the foregoing, the mutual covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned hereby agree as follows:

1.Employment. Company agrees to employ Employee, and Employee accepts such employment and agrees to serve Company, on the terms and conditions set forth herein. Except as otherwise specifically provided herein, Employee’s employment shall be subject to the employment policies and practices of Company in effect from time to time during the term of Employee’s employment hereunder (including without limitation its practices as to reporting and withholding). Employee and Company agree that the Employee Severance Retention Agreement between LDMI Telecommunications, Inc. and Mark Wayne dated July 12, 2005 shall remain in full force and effect (a copy of which is attached hereto).

2.Term of Agreement. The term of Employee’s employment hereunder shall continue in effect for a period of three (3) years after the date hereof, except as hereinafter provided (the “Term”).

3.Position and Duties. Except as may otherwise be agreed upon between Company and Employee, Employee shall perform such duties and have such responsibilities as Senior Vice President - Business Sales of the Company, and such other duties and responsibilities consistent with the foregoing duties and responsibilities as may be reasonably assigned or delegated to him from time to time by the Company’s Chief Executive Officer or the Company’s Board of Directors (the “Board”), including, without limitation, service as an employee, officer or director of affiliates (as that term is defined in Rule 405 of the Securities Act of 1933, as amended (the “Act”)) of Company (collectively, “Affiliates”) without additional compensation. References in this Agreement to Employee’s employment with Company shall be deemed to refer to employment with Company or an Affiliate. Employee shall perform his duties and responsibilities to the best of his abilities in a diligent, trustworthy, business like and efficient manner. Employee shall devote substantially all of his working time and efforts to the business and affairs of Company; provided, however, that nothing in this Agreement shall preclude the Employee from (i) engaging in charitable activities and community affairs; (ii) managing his personal investments and affairs, subject to the limitations of Section 10 hereof; and (iii) acting as a director of another corporation if the Chairman of the Board or the Chief Executive Officer of Company shall have consented to Employee’s accepting such directorship.

       4.Compensation and Related Matters.

4.1Base Salary. During the Term, Company shall pay to Employee an annualized base salary of not less than $175,000, subject to review from time to time by the Board (“Base Salary”). Base Salary shall be paid in accordance with Company’s usual and customary payroll practices.

4.2Benefit Plans and Arrangements.

(i)Employee shall be entitled to participate in and to receive benefits under Company’s employee benefit plans and arrangements (including, but not limited to, bonus plans) as are made available to the Company’s senior executive officers during the Term, which employee benefit plans may be altered from time to time at the discretion of the Board (collectively with the benefits referred to in Section 4.3, the “Benefits”).

(ii)Notwithstanding the foregoing, for the balance of 2005, Employer shall only be entitled to bonuses and sales commissions under LDMI Telecommunications, Inc. bonus plans. Employee shall be eligible to receive during the balance of 2005 a cash bonus under the LDMI Telecommunications, Inc. bonus plans based upon achievement by Employee of goals and objectives (the “Bonus Objectives”) to be established and determined by the Chief Executive Officer of Company, which Bonus Objectives shall be provided quarterly in writing to Employee. The cash bonus shall be as determined by the CEO of Company.

(iii) Without limitation of the generality of the foregoing, the Benefits shall include a minimum of three (3) weeks of paid vacation each calendar year, which, if not used in its entirety in any year, may be carried over to the next succeeding calendar year, provided that Employee shall not be entitled to more than five (5) weeks of paid vacation in any calendar year. Employee acknowledges and agrees that bonuses, annual or otherwise, are performance-based and discretionary with the Company’s Chief Executive Officer and the Board.

4.3Perquisites. During the Term of his employment hereunder, Employee shall be entitled to receive fringe benefits as are made available to the Company’s senior executive officers. In addition, during the Term, Company will provide Employee with an automobile, as Company shall determine, and Company shall keep such automobile fully insured in accordance with Company’s practices for similarly situated employees.

4.4Expenses. Company shall promptly reimburse Employee for all normal and reasonable out-of-pocket expenses related to Company’s business that are actually paid or incurred by him in the performance of his services under this Agreement and that are incurred, reported and documented in accordance with Company’s policies.

4.5Options. It is the Company’s intention that Employee shall be granted options to purchase shares of Common Stock of Talk America Holdings, Inc. in an amount and at such time as may be approved by the Compensation Committee of Talk America Holdings, Inc. after such time as the shareholders of Talk America Holdings, Inc. approve the 2005 Incentive Plan.

5.Termination. The Term may be terminated under the following circumstances:

5.1Death. The Term shall terminate upon the Employee’s death.

5.2Disability. If Employee becomes physically or mentally disabled during the term hereof so that he is unable to perform services required of him pursuant to this Agreement for an aggregate of six (6) months in any twelve (12) month period (a “Disability”), Company, at its option, may terminate Employee’s employment hereunder.

5.3Cause.Upon written notice, Company may terminate the Term for Cause. For purposes of this Agreement, Company shall have “Cause” to terminate Employee’s employment hereunder upon (i) material breach by Employee of any material provision of this Agreement if Employee fails to cure such breach in the 30 day period following written notice specifying in reasonable detail the nature of the breach; (ii) willful misconduct by Employee as an employee of Company in connection with misappropriating any funds or property of Company or attempting to willfully obtain any personal profit from any transaction in which Employee has an interest that is adverse to the interests of Company ; (iii) Employee’s gross neglect or unreasonable refusal to perform the duties assigned to Employee under or pursuant to this Agreement if Employee fails to eliminate such neglect in the 30 day period following written notice specifying in reasonable detail the nature of the gross neglect; or (iv) conviction or plea of nolo contendere by Employee to a felony or a misdemeanor involving moral turpitude.

5.4By Employee.

(i)Employee may terminate employment hereunder for any reason (other than Good Reason) upon sixty (60) days’ prior written notice to Company, provided that, upon the giving of such notice by Employee, Company may establish an earlier date for the termination of the Term and such termination under this Section 5.4.

(ii)Employee may terminate employment hereunder for Good Reason immediately and with notice to Company. “Good Reason” for termination by Employee shall include, but is not limited to, the following:

(a)Material breach of any provision of this Agreement by Company, which breach shall not have been cured by Company within thirty (30) days of receipt of written notice of said material breach;

(b)Failure by Company to maintain Employee in a title and position commensurate with that referred to in Section 3 of this Agreement without Employee’s express written consent;

(c)The assignment to Employee of any duties inconsistent with the Employee’s title and position as contemplated by Section 3 of this Agreement, or any other action by Company that results in a diminution of Employee’s position, authority, duties or responsibilities without Employee’s express written consent; or

(d)The relocation of Company’s offices at which Employee is principally employed to a location more than 50 miles away from Southfield, Michigan, or Company’s requiring Employee to be based anywhere other than Company’s offices in Southfield, Michigan without Employee’s express written consent except for required travel on Company’s business to the extent substantially consistent with Employee’s travel obligations during the year preceding the date of this Agreement (including, without limitation, periodic travel to and work at Company’s offices in Pennsylvania, Florida and Virginia).

5.5Without Cause. Company may otherwise terminate the Term at any time upon written notice to Employee.

6.Compensation In the Event of Termination. Except as otherwise provided in Section 7.3, in the event that Employee’s employment pursuant to this Agreement terminates prior to the end of the Term of this Agreement, Company shall make payments to Employee as set forth below:

6.1By Employee for Good Reason; By Company Without Cause. In the event that Employee’s employment hereunder is terminated: (i) by Employee for Good Reason or (ii) by Company without Cause, then Company shall (a) pay to Employee all amounts due to Employee pursuant to any bonus or commission that was due to Employee as of the date of such termination, pursuant to the terms of such bonus or commission (a “Due Bonus”), (b) continue to pay and provide Employee the Base Salary and Benefits to which Employee would be entitled hereunder in the manner provided for herein for the period of time ending on the first anniversary of the date of such termination, (c) reimburse Employee for expenses that may have been incurred, but which have not been paid as of the date of termination, subject to the requirements of Section 4.4 hereof and (d) one hundred percent (100%) of the outstanding stock options granted to the Employee that are unvested shall immediately vest and become exercisable.

6.2By Company for Cause; By Employee Without Good Reason. In the event that Company shall terminate Employee’s employment hereunder for Cause pursuant to Section 5.3 hereof or Employee shall terminate his employment hereunder without Good Reason, all compensation and Benefits, as specified in Section 4 of this Agreement, heretofore payable or provided to the Employee shall cease to be payable or provided, except for (a) any Base Salary, Due Bonus and Benefits that may have been earned and are due and payable but that have not been paid as of the date of termination and (b) reimbursements for expenses that may have been incurred, but that have not been paid as of the date of termination, subject to the requirements of Section 4.4 hereof.

6.3Death. In the event of Employee’s death, Company shall not be obligated to pay Employee or his estate or beneficiaries any compensation except for (a) any Base Salary, Due Bonus and any Benefits that may have been earned and are due and payable but that have not been paid as of the date of death, (b) reimbursement of expenses that may have been incurred, but that have not been paid as of the date of death, subject to the requirements of Section 4.4 hereof, and (c) all outstanding stock options granted to Employee that are unvested shall immediately vest and become exercisable and Employee’s estate or beneficiaries, as the case may be, shall have the right to exercise any of such stock options during the period commencing on the date of death and ending on the first anniversary of the date of such termination or for the remainder of the period set forth in the option agreement applicable to the option in question (the “Exercise Period”), if less.

6.4Disability. In the event of Employee’s Disability, Company shall not be obligated to pay Employee or his estate or beneficiaries any compensation except for: (a) any Base Salary, Due Bonus and any Benefits that may have been earned and are due and payable but that have not been paid as of the date of such Disability; and (b) reimbursement for expenses that may have been incurred but that have not been paid as of the date of Disability, subject to the requirements of Section 4.4 hereof. Upon termination due to Disability, fifty percent (50%) of the outstanding stock options granted to Employee that are unvested shall immediately vest and become exercisable and Employee or his estate or beneficiaries, as the case may be, shall have the right to exercise any of such stock options during the period commencing on the date of Disability and ending on the second anniversary of the date of the Disability or for the remainder of the Exercise Period, if less.

6.5No Mitigation. In the event of any termination of employment under Section 5 or Section 7.3, Employee shall be under no obligation to seek other employment; provided, however, to the extent that Employee does obtain other employment subsequent to the termination of Employee’s employment hereunder, Company’s obligations to continue to pay or provide Benefits under this Agreement for the period from and after the date of commencement of such other employment shall terminate.

7.Change in Control.

7.1Change in Control. For purposes of this Agreement, “Change in Control” shall be deemed to have occurred if:

7.1.1any Person (as defined in Section 3(a)(9) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than Company or any Significant Subsidiary (as defined below), becomes the Beneficial Owner (as defined in Rule 13d-3 under the Exchange Act; provided, that a Person shall be deemed to be the Beneficial Owner of all shares that any such Person has the right to acquire pursuant to any agreement or arrangement or upon exercise of conversion rights, warrants, options or otherwise, without regard to the 60-day period referred to in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Company or any Significant Subsidiary (as defined below) representing 50% or more of the combined voting power of the Company’s, or such Significant Subsidiary’s, as the case may be, then outstanding securities;

7.1.2during any period of two years, individuals who at the beginning of such period constitute the Board and any new director (other than a director designated by a person who has entered into an agreement with Company to effect a transaction described in 7.1.3, 7.1.4 or 7.1.5) whose election by the Board or nomination for election by stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, but excluding for this purpose any such new director whose initial assumption of office occurs as a result of either an actual or threatened election contest or other actual or threatened solicitation of proxies or consents by or on behalf of an individual, corporation, partnership, group, association or other entity other than the Board, cease for any reason to constitute at least a majority of the Board of either Company or a Significant Subsidiary;

7.1.3the consummation of a merger or consolidation of Company or any subsidiary of Company owning directly or indirectly all or substantially all of the consolidated assets of Company (a “Significant Subsidiary”) with any other entity, other than a merger or consolidation that would result in the holder(s) of voting securities of Company or a Significant Subsidiary outstanding immediately prior thereto continuing to hold more than fifty percent (50%) of the combined voting power of the surviving or resulting entity outstanding immediately after such merger or consolidation;

7.1.4the stockholders of Company approve a plan or agreement for the sale or disposition of fifty percent (50%) or more of the consolidated assets of Company in which case the Board shall determine the effective date of the Change of Control resulting therefrom; or

7.1.5any other event occurs that the Board determines, in its discretion, would materially alter the structure of Company or its ownership.

7.2Options Vesting. In the event of a Change in Control of Company, all outstanding options granted to you by Company shall vest immediately and become exercisable as to all shares then subject thereto that are not then vested and exercisable.

7.3Termination after Change in Control.

7.3.1If a Change of Control shall occur during the Term of this Agreement, the term of Employee’s employment hereunder shall continue in effect until the later of the first anniversary of the date of the Change in Control and the date that the Term would otherwise have terminated without regard to the extension in this sentence, except for earlier termination as provided in Section 5 of this Agreement. The rights and obligations of Employee and Company under this Agreement upon or after any termination of the Term shall survive any such termination.

7.3.2Notwithstanding the provisions of Section 6 hereof, if a Change in Control has occurred and Employee’s employment hereunder is terminated within one year of such Change in Control: (i) by Employee for Good Reason or (ii) by Company without Cause, then Company shall (a) pay to Employee the Base Salary and Benefits through the date of termination plus all amounts due to Employee pursuant to any Due Bonus; (b) pay to Employee, as severance pay, a lump sum amount equal to the sum of (x) twelve months’ Base Salary plus (y) an amount equal to the average annual incentive bonus earned by Employee from Company during the last four (4) completed fiscal years of Company preceding the date of Change in Control, or if Employee was not an officer during any or all of such prior four (4) fiscal years, the average of the incentives received during the fiscal years when Employee was such an officer; (c) for a period of one year after the date of termination, arrange to provide Employee with life, disability, sickness and accident, health, vision and dental insurance benefits substantially similar to those that Employee was entitled prior to the Change in Control, as well as with the other fringe benefits and perquisites to which Employee was entitled pursuant to Section 4.3 at the Company’s expense; and (d) reimburse Employee for expenses that may have been incurred, but which have not been paid as of the date of termination, subject to the requirements of Section 4.4 hereof.

8.Unauthorized Disclosure. Employee shall not, without the prior written consent of Company, disclose or use in any way, either during the Employee’s employment with Company or thereafter, except as required in the course of such employment, any confidential business or technical information or trade secret acquired in the course of such employment (including, without limitation of the generality of the foregoing, any and all information referred to in Section 10 hereof), whether or not conceived of or prepared by him, that is related to the actual or anticipated business, services, research and development of Company or any of its Affiliates or to existing or future products or services of Company or any of its Affiliates; provided, that the foregoing shall not apply to (i) information that is not unique to Company or that is generally known to the industry or the public other than as a result of Employee’s breach of this covenant, (ii) information known to the Employee prior to the date he first became an employee of Company or any of its Affiliates (except insofar as it is part of the information that is the exclusive property of Company as provided in Section 10), or (iii) information that Employee is required to disclose to or by any governmental or judicial authority; provided, however, if Employee should be required in the course of judicial or administrative proceedings to disclose any information, Employee shall give Company prompt written notice thereof so that Company may seek an appropriate protective order and/or waive in writing compliance with the confidentiality provisions of this Agreement. If, in the absence of a protective order or the receipt of a waiver by Company, Employee is nonetheless, in the written opinion of its counsel, compelled to disclose information to a court or tribunal or otherwise stand liable for contempt or suffer other serious censure or penalty, Employee may disclose such information to such court or tribunal without liability to any other party hereto.

9.Tangible Items. All files, records, documents, manuals, books, forms, reports, memoranda, studies, data, calculations, recordings, correspondence, in whatever form they may exist, and all copies, abstracts and summaries of the foregoing and all physical items related to the business of Company and its Affiliates, other than merely personal items, whether of a public nature or not, and whether prepared by Employee or not, are and shall remain the exclusive property of Company and its Affiliates and shall not be removed from their premises, except as required in the course of employment by Company or its Affiliates, without the prior written consent of Company, and the same shall be promptly returned by Employee on the termination of Employee’s employment with Company, its Affiliates or at any time prior thereto upon the request of Company.

10.Inventions and Patents. Employee agrees that all inventions, innovations, ideas, concepts, improvements, developments, methods, designs, analyses, drawings, reports, and all similar or related information that relates to the actual or anticipated business, services, research and development of Company or any of its Affiliates or existing or future products or services of Company or any of its Affiliates, tangible or intangible, and that are conceived, developed or made by or at the direction of Employee while employed by Company, and all rights to the results and proceeds of any thereof and all now known and hereafter existing rights of every kind and nature throughout the universe, in perpetuity and in all languages, pertaining to such results and proceeds and all elements thereof for all now known and hereafter existing uses, media and form will be owned exclusively by Company; and the foregoing is inclusive of a full irrevocable and perpetual assignment to Company. Employee acknowledges that there are, and may be, new uses, media, means and forms of exploitation throughout the universe employing current and/or future technology yet to be developed, and the parties specifically intend the foregoing full, irrevocable and perpetual grant of rights to Company to include all such now known and unknown uses, media and form of exploitation, throughout the universe. Employee agrees to execute at any time upon the Company’s request such further documents or do such other acts (whether before, during or after the Term) as may be required to evidence and/or confirm the Company’s ownership of any or all of the foregoing. The termination, completion or breach of this Agreement for any reason and by either party shall not affect the Company’s exclusive ownership of any or all of the foregoing.

11.Certain Restrictive Covenants. Employee agrees that, during the Term and for a period one year immediately following termination of his employment with Company for any reason, provided that Company has met and continues to meet its obligations pursuant to the terms of this Agreement following termination, he will not act either directly or indirectly as a partner, officer, director, five or more percent stockholder, employee, employer or consultant or render advisory or other services for, or in connection with, or become interested in, or make any substantial financial investment in any firm, corporation, business entity or business enterprise competitive with the business of Company, except with the express written consent of the Board. Employee further agrees for a period of one year immediately following termination of his employment with the Company for any reason, provided that Company has met and continues to meet its obligations pursuant to the terms of this Agreement following termination, he will not employ or offer to employ, call on, solicit, actively interfere with Company’s or any Affiliate’s relationship with, or attempt to divert or entice away, any employee of Company or any Affiliate.

12.Employee Representations. Employee hereby represents and warrants to Company that (i) the execution, delivery and performance of this Agreement by Employee does not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which Employee is a party or by which he is bound, (ii) except as disclosed to Company in writing prior to the execution of this Agreement, Employee is not a party to or bound by any employment agreement, non-compete agreement or confidentiality agreement with any other person or entity, and (iii) upon the execution and delivery of this Agreement by Company, this Agreement shall be the valid and binding obligation of Employee, enforceable in accordance with its terms.

13.Company Representations.Company represents and warrants (i) that it is duly authorized and empowered to enter into this Agreement, (ii) that the performance of its obligations under this Agreement will not violate any agreement between it and any other person, firm or organization and (iii) upon the execution and delivery of this Agreement by the Employee, this Agreement shall be the valid and binding obligation of Company, enforceable in accordance in accordance with its terms.

14.Remedies. Employee acknowledges that the restrictions and agreements contained in this Agreement are reasonable and necessary to protect the legitimate interests of Company, and that any violation of this Agreement will cause substantial and irreparable injury to Company that would not be quantifiable and for which no adequate remedy would exist at law and agrees that injunctive relief, in addition to all other remedies, shall be available therefor.

15.Effect of Agreement on Other Benefits.Except as specifically provided in this Agreement, the existence of this Agreement shall not be interpreted to preclude, prohibit or restrict Employee’s participation in any employee benefit plan, program or arrangement provided to officers, directors or employees of Company.

16.Rights of Executive’s Estate. If Employee dies prior to the payment of all amounts due and owing to him under the terms of this Agreement, such amounts shall be paid to such beneficiary or beneficiaries as Employee may have last designated in writing filed with the Secretary of Company or, if Employee has made no beneficiary designation, to Employee’s estate. Such designated beneficiary or the executor of his estate, as the case may be, may exercise all of Employee’s rights hereunder. If any beneficiary designated by Employee shall predecease Employee, the designation of such beneficiary shall be deemed revoked, and any amounts that would have been payable to such beneficiary shall be paid to Employee’s estate. If any designated beneficiary survives Employee, but dies before payment of all amounts due hereunder, such payments shall, unless Employee has designated otherwise, be made to such beneficiary’s estate. In the event of Employee’s death or judicial determination of his incompetence, reference in this Agreement to Employee shall be deemed where appropriate, to refer to his beneficiary, estate or other legal representative.

17.Severability. It is the intent and understanding of the parties hereto that if, in any action before any court or agency legally empowered to enforce this Agreement, any term, restriction, covenant, or promise is found to be unreasonable and for that reason unenforceable, then such term, restriction, covenant, or promise shall not thereby be terminated but that it shall be deemed modified to the extent necessary to make it enforceable by such Court or agency and, if it cannot be so modified, that it shall be deemed amended to delete therefrom such provision or portion adjudicated to be invalid or unenforceable, such modification or amendment in any event to apply only with respect to the operation of this Agreement in the particular jurisdiction in which such adjudication is made.

18.Notice. For the purposes of this Agreement, notices, demands and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when received if delivered in person or by overnight courier or if mailed by United States registered mail, return receipt requested, postage prepaid, to the following addresses:

If to Employee:

Mark A. Wayne

19512 Coventry

Riverview, Michigan 48192

If to Company:

Talk America Holdings, Inc.

6805 Route 202

New Hope, Pennsylvania 18938

Attn: General Counsel

Either party may change its address for notices by written notice to the other party in accordance with this Section.

19.Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by Employee and Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of Pennsylvania relating to contracts made and to be performed entirely therein.

20.Headings. The headings in this Agreement are inserted for convenience only and shall have no significance in the interpretation of this Agreement.

21.Successors. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their heirs, personal representatives and successors, including without limitation any Affiliate to which Company may assign this Agreement. Employee may not assign or transfer his rights to compensation and benefits, except by will or operation of law and except as provided in Section 16 above.

22.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

23.Release. Employee agrees to release and hereby releases all claims or causes of action described in the next sentence that Employee may have against Company or LDMI Telecommunications, Inc. or any of their parents, subsidiaries, affiliates, directors, officers, partners, employees, successors, agents, attorneys, assigns, insurers, or employee benefit programs and the trustees, administrators, fiduciaries, or insurers of such programs (“Releasees”). Employee hereby releases all claims or causes of action (whether presently known or unknown) or obligations of any and all kinds and nature arising on or before the date of execution of this Agreement that Employee has or may have against Releasees arising out of the Former Agreement. Employee also specifically agrees and understands that the release contained in this paragraph includes claims that Employee presently does not know or suspect to exist, even if Employee would not have entered into this Agreement had Employee known that those claims existed. Employee understands and agrees that the foregoing release means that Employee is giving up the right to sue the Releasees on any claim or cause of action released.

IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the day and year first written above.

TALK AMERICA HOLDINGS, INC.

By: /s/ Aloysius T. Lawn, IV

Name: Aloysius T. Lawn, IV

Title: EVP - General Counsel

/s/ Mark A. Wayne

                  Mark A. Wayne

Employee

EX-10.42

                     Exhibit 10.42

TRIPLE NET COMMERCIAL LEASE

This Triple Net Lease is made and entered into this 7th day of September, 2000, at Pensacola, Florida, by and between CORDOVA ASSOCIATES, LLC, a Florida limited liability company or its assigns, (hereinafter referred to as “Lessor”), and NT Corporation, a Delaware corporation, (hereinafter referred to as “Lessee”).

WITNESSETH:

WHEREAS, Lessor is the owner of an 80,000 square foot building located on the property described in Exhibit A, attached and incorporated by reference and which building, together with the parking facilities specifically assigned to Lessee as described herein are hereinafter referred to as “Leased Premises”.

WHEREAS, Lessee desires to lease the Leased Premises from the Lessor and Lessee desires to lease the Leased Premises to the Lessee;

NOW THEREFORE, in consideration of the foregoing and in consideration of their covenants, terms, and conditions hereinafter expressed, the parties hereto agree as follows.

ARTICLE I

DESCRIPTION, USE, TERM, AND RENT

1.01   Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Leased Premises; to be used only as an office building and corporate headquarters for Lessee’s communications business and in accordance with uses normally incident thereto and for no other purpose, for the term of 180 months, commencing on the Commencement Date (which shall be the earlier of the date Lessee first occupies any portion of the Leased Premises or the date a certificate of occupancy is issued for the Lessee’s initial occupancy), and ending on the 15^th annual anniversary of the Commencement Date which is the “Expiration Date”. For the first five (5) years of the term the annual rental shall be $16.00 per square foot of the Leased Premises; for the second five (5) years of the term (years 6-10 inclusive) the annual rental shall be $17.50. per square foot of the Leased Premises; and for the third five (5) years of the term (years 11-15, inclusive) the annual rental shall be $19.00 per square foot of the Leased Premises; and throughout the term all rental payments shall be net of all taxes, maintenance, and insurance, all of which shall be paid by Lessee. Annual rental shall be paid by Lessee in equal monthly installments along with any and all applicable sales or use taxes.  

1.02   The parties acknowledge that the Leased Premises consists of 80,000 square feet. Beginning on the Commencement Date rental shall be based on 40,000 square feet until the earlier of: (i) the date Lessee occupies any portion of the remaining 40,000 square feet; or (ii) the date a certificate of occupancy is issued for Lessee’s occupancy of such remaining 40,000 square feet, at which time rental shall be based on 80,000 square feet.  

1.03   Lessee shall pay Lessor at such place as the Lessor shall designate from time to time in writing, the aforesaid monthly rental payments plus sales or use taxes thereon, without demand, set-off, off-set, counterclaim or deduction of any kind, each in advance due on or before the first day of each calendar month during aforesaid term: Rental for any portion of a calendar month shall be pro-rated on a daily ratable basis.  

ARTICLE II

INSURANCE AND INDEMNIFICATION

2.01 Lessee agrees to and shall secure at its expense from a good and responsible company or companies doing business in the State of Florida, and maintain during the entire term of this Lease, the following coverages all of which shall name Lessor as an additional insured:  

(1)   fire and extended casualty coverage insurance in an amount not less than one hundred (100%) percent of the value as determined by Lessor in its discretion of the Leased Premises and other improvements installed from time to time in, on or about the Leased Premises.  

(2)   Public liability insurance in an amount determined appropriate by the Lessor for loss from an accident resulting in bodily injury to or death of persons, and for loss from an accident resulting in damage to or destruction of property.  

(3)   Workers Compensation Insurance as and to the extent required by Florida law.  

(4)   Casualty insurance for the replacement value of Lessee’s equipment, furnishing, fixtures, and assets located in, on or about the Leased Premises.  

2.02   Lessee shall, on demand provide evidence of such insurance to the Lessor. Each of the policies required of the Lessee shall expressly provide that such policies shall not be canceled or altered without ten (10) days prior written notice to the Lessor.  

2.03   Lessee agrees that, in the event of loss due to any of the perils for which it has agreed to provide insurance, Lessee will look solely to its insurance for recovery.  

2.04   If the Lessee at any time during the term hereof should fail to secure or maintain the forgoing insurance, the Lessor shall be permitted to obtain such insurance on the Lessee’s name as the agent of the Lessee, and shall be reimbursed by the Lessee for the cost of the insurance premiums. The Lessee shall pay the Lessor interest on paid insurance premiums at the highest lawful rate, computed from the date the premiums have been paid until reimbursement to Lessor has been made.  

2.05   Proceeds from any policy or policies relating to coverage of the Leased Premises shall be payable to the Lessor, who shall use such proceeds as provided below.  

(1)   If the Leased Premises should be totally destroyed by fire, flood, or other casualty, or if they should be so damaged that rebuilding or repairs cannot reasonably be completed within One Hundred Twenty (120) working days from the date of such loss (within the Lessor’s discretion), then this Lease shall terminate, and rent shall be abated for the unexpired portion of this Lease, effective as of the date of said loss. If rebuilding or repairs can be reasonably completed within One Hundred Twenty (120) working days from the date of said loss (within the Lessor’s discretion), then the Lessor shall, within such time period, undertake to rebuild or repair the Leased Premises and other improvements to substantially the same condition in which they existed prior to such loss, and no adjustment for rent shall be made, unless such repair or rebuilding exceeds the aforesaid One Hundred Twenty (120) day period, in which case rent shall be abated on a daily ratable basis beginning on the first day after the expiration of such One Hundred Twenty (120) day period. If the Leased Premises are partially destroyed so as to render a portion of the Leased Premises untenantable (in Lessor’s discretion), then this lease shall not terminate and Lessor shall undertake to repair or rebuild such portion and rent shall be equitably abated for the untenantable portion until such repair or rebuilding is substantially complete.  

2.06   Lessor shall not be liable to Lessee for (i) any accident of damage caused by elevators, heating, plumbing, lighting, electrical, sewer, or other utility lines or fixtures, (ii) any accident, injury, or death occurring in connection with the Leased Premises, (iii) or thefts or losses of or damage to any goods, cash, personal effects, automobiles, or personal property stored or placed by Lessee, or Lessee’s employees, agents, visitors, licensees, or invitees, in, on, or about the Leased Premises. Lessee covenants and agrees to indemnify and hold Lessor harmless from and against any and all claims, damages, liabilities, obligations, expenses, costs, causes of action, or other injuries of every kind and every nature arising out of Lessee’s use and occupancy of the Leased Premises, including but not limited to full indemnification for Lessor’s attorneys fees and expenses, including those incurred in enforcing this indemnification obligation.  

ARTICLE III

WASTE AND NUISANCE

3.01   Lessee shall not commit of suffer to be committed any waste on the Leased Premises, nor shall Lessee maintain, commit or permit the maintenance or condition of any nuisance on the Leased Premises or use the Leased Premises for any unlawful purpose or in any way other than as permitted by private and/or public regulations or restrictions.  

ARTICLE IV

REPAIRS, MAINTENANCE & UTILITIES

4.01   Lessee shall maintain the Leased Premises and equipment, fixtures, and improvements therein in a condition fit for their intended use and shall make all necessary repairs including all repairs of the Leased Premises and improvements in, on, or about the Leased Premises occasioned by Lessee’s use of the Leased Premises, including but not limited to maintenance and repair of all heating, cooling, ventilation, plumbing, electrical, utility and sewer systems, and all interior and exterior improvements (including parking lot lighting) regardless of the damages, condition, repair, or actions which necessitate the repair or maintenance. Lessor shall repair and maintain at its cost solely the roof, parking lot surface and basic structural components of the building located on the Leased Premises. All other repairs and maintenance shall be performed by Lessee at its sole cost and expense regardless of the events which necessitate the repair or maintenance.  

4.02   Lessee shall also have the following affirmative obligations:  

(1)   To keep the portion of the leased Premises including parking facilities assigned to Lessee as clean and sanitary as the condition of the premises permits.  

(2)   To dispose from the Leased Premises all rubbish, garbage, and other waste in a clean and sanitary manner.  

(3)   Not to permit any person on the premises with Lessee’s permission to willfully or wantonly destroy, deface, damage, impair or remove any part of the Leased Premises or the facilities, equipment, improvements, or appurtenances thereto.  

(4)   To immediately notify the Lessor of any damage or other condition of the Leased Premises or equipment or improvements therein.  

(5)   To pay when due any and all amounts required under any and all shared maintenance, easement, or license agreements to which the Leased Premises are subject.  

(6)   To supply the Leased Premises with all utilities required by Lessee for its occupancy and to pay any and all charges related thereto, including the installation, repair, and maintenance of all utility lines, fixtures and equipment.

ARTICLE V

ALTERATIONS, IMPROVEMENTS, AND FIXTURES

5.01   Lessee hereby accepts the Leased Premises and the building in their present condition as suitable for the use intended by Lessee. Lessee shall not alter or improve the Leased Premises without the prior written consent of the Lessor, and any and all alterations, additions, improvements, and fixtures made or placed in or on said premises including floor and wall coverings, lighting fixtures, window blinds and coverings, and installed equipment and fixtures, shall on expiration, or sooner termination of this Lease, belong to the Lessor, without compensation to the Lessee; provided, however, that Lessor shall have the option to be exercised upon expiration or sooner termination of this Lease, to require Lessee to remove any or all of such additions, improvements, or fixtures. It is contemplated that Lessee shall alter, improve, remodel, and reconstruct the Leased Premises and install fixtures and equipment therein all at Lessee’s sole cost and expense and in a manner reasonably acceptable to Lessor for the purpose of meeting Lessee’s needs. Forty Thousand (40,000) square feet of the Leased Premises shall be improved by Lessee within the first two (2) years of the term and the remainder of the Leased Premises shall be improved within two (2) years thereafter. Any and all improvements constructed by Lessee shall be constructed solely through contractors, subcontractors, architects, engineers and similar construction service providers acceptable to Lessor all at Lessee’s sole cost and expense.  

5.02   Lessor shall have the right from time to time during the term or any extended term of this Lease to construct in or on the Leased Premises such buildings, improvements, equipment, fixtures, or other facilities as Lessor deems necessary or convenient for Lessor’s purposes.  

5.03   The parties specifically covenant and agree that the Lessee shall have the right to affix a sign, logo, or other symbol on the exterior of the building if the following conditions are met:  

(1)   Said sign, logo, or symbol is first approved in writing by the Lessor and applicable regulatory agencies; and  

(2)   Lessee shall, at Lessee’s expense promptly remove said sign, logo, or other symbol upon expiration of the lease term and repair or restore the exterior of the building to its original state prior to the commencement of the lease term.  

ARTICLE VI

TAXES

6.01   During the entire term of this lease, Lessee covenants and agrees to pay any and all special assessments, ad valorem taxes, or other charges and encumbrances of every kind and every nature as may be levied by any and all governmental authorities on the property described in Exhibit A, including but not limited to ad valorem real property taxes. Should Lessee fail to pay said taxes, when due, Lessor shall have the right to pay said taxes on Lessee’s behalf and Lessee shall be obligated to reimburse Lessor for all amounts expended by Lessor plus interest thereon at the highest lawful rate from the date Lessor makes such payments until Lessor is fully reimbursed by Lessee.  

ARTICLE VII

QUIET POSSESSION

7.01   Lessor shall on the Commencement Date of the term of this Lease place Lessee in quiet possession of the Leased Premises and shall secure the Lessee in the quiet possession thereof for the aforesaid lease term against all persons lawfully claiming possession during the aforesaid lease term.  

7.02   This Lease and any extensions of the term hereof is subordinate to any and all encumbrances given by Lessor to secure funds for any purpose deemed appropriate by Lessor and to any and all renewals, extensions, modifications, replacements, or refinancings thereof. This provision shall be self-operative, and no further instrument of subordination shall be required by any mortgagee or holder of any encumbrance. In confirmation of such subordination, upon Lessor’s request, Lessee shall promptly execute any requisite or appropriate certification or other document. In the event that any proceedings are brought for the foreclosure of any such mortgage or encumbrance, Lessee shall attorn to the purchaser at such foreclosure sale and shall recognize such purchaser as the lessor under this lease, and Lessee hereby waives the provisions of any right to terminate or otherwise adversely affect this lease and the obligations of Lessee hereunder in the event that any such foreclosure proceeding is prosecuted or completed. Lessee hereby covenants and agrees to promptly execute such documents as may be reasonably required to confirm the terms of this section 7.02.  

7.03   Lessee agrees at any time and from time to time, upon not less than ten (10) days written notice by Lessor to execute, acknowledge, and deliver to Lessor, a statement in writing (i) certifying that this lease is unmodified and in full force and effect, or if there have been modifications, that this lease is in full force and effect as modified and stating any such modifications; (ii) certifying that Lessee has accepted possession of the Leased Premises; (iii) stating that no rental amounts under this lease have been paid more than thirty (30) days in advance; (iv) stating the address to which notices to Lessee should be sent; (v) certifying that Lessee as of the date of any such certification, has no charge, lien, claim, or set off under this lease or otherwise against the rental amounts due hereunder; and (vi) specifying such default of Lessor, if any, which Lessee may assert.  

Lessee further agrees that it will not seek to terminate this lease by reason of any act or omission of Lessor until Lessee shall have given written notice of such act, omission, or default to any mortgagee’s of Lessor from time to time.

7.04   If, in connection with securing financing for the Leased Premises, an institutional lender shall request reasonable modifications of this lease as a condition to such financing, Lessee shall not unreasonably withhold or delay its consent so long as such modifications do not materially increase the obligations of Lessee hereunder and do not materially adversely affect Lessee’s leasehold interest or Lessee’s use and enjoyment of the Leased Premises.  

ARTICLE VIII

POSSESSION

8.01   If Lessor shall be unable for any reason whatsoever to deliver possession of the Leased Premises on the Commencement Date of the term hereof, Lessor shall not be liable to Lessee for any damage caused thereby, not shall this Lease thereby become void or voidable, not shall the term hereof be in any way extended, but in any such event, Lessee shall not be liable for any rent herein provided until such time as Lessor can and does deliver possession.  

ARTICLE IX

TERMINATION & EXTENSION

9.01   Lessee is hereby granted and shall, if not at the time in default under this Lease, have an option to extend the term of this Lease from the termination date hereon for an additional period of 120 months, but on the same terms, covenants, and conditions herein contained, except that the rent may be increased within Lessor’s discretion, notwithstanding any limitations herein.  

9.02   This option shall be exercised only by Lessee’s delivering to Lessor in person or by United States Registered or Certified Mail, written notice of Lessee’s election to extend the term of this Lease, on or before the 180 days prior to the end of the term hereunder.  

9.03   In the event Lessee does not extend this Lease as herein provided and holds over beyond the expiration of the term hereof, such holding over shall be deemed a month-to-month tenancy only, at the rent herein provided, payable on the first of each and every month thereafter until the tenancy is terminated in the manner provided by law.  

ARTICLE X

SURRENDER OF PREMISES

10.01  Lessee shall, without demand therefore and at Lessee’s own cost and expense within 3 days after expiration or sooner termination of the term hereof, or of any

      extended term hereof, remove all property belonging to Lessee (other than fixtures or improvements), repair all damage to the Leased Premises caused by the Lessee, and 

                 restore the Leased Premises to the same or better condition they were in at the commencement of this Lease, reasonable wear and tear accepted. Any property not so

                 removed shall be deemed to have been abandoned by Lessee and may be retained of or disposed of by Lessor. Any costs or expense, including attorneys’ fees, incurred by

                 Lessor in removing such property shall be an obligation of the Lessee.

ARTICLE XI

CONDEMNATION

11.01   If, during the term of this Lease or any extension or renewal thereof, all of the Leased Premises should be taken for any public use under any law, ordinance, or regulation or by right of eminent domain, or should be sold to the condemning authority under threat of condemnation, this Lease shall terminate and the rent shall be abated during the unexpired portion of this Lease, effective as of the date of the taking of the said premises by the condemning authority.  

11.02   If less than all of the Leased Premises shall be taken for any public use under any law, ordinance or regulation, or by right of eminent domain, or should be sold to the condemning authority under threat of condemnation, then, at the Lessor’s sole and exclusive discretion, this Lease shall either terminate or the Lessor shall forthwith, at Lessor’s sole expense, restore and reconstruct the building and other improvements situated on the Leased Premises, provided such restoration and reconstruction shall make the same reasonably tenantable and suitable for the use for which the premises are leased, and this Lease shall not terminate. During such time as Lessee is unable to maintain possession of any portion the Leased Premises as a result of condemnation, the rent payable hereunder shall be equitably abated as to such portion on a daily ratable basis.  

ARTICLE XII

DEFAULTS AND REMEDIES

12.01   If Lessee shall allow the rent to be late more than five (5) days after the date due, or shall remain in default under any other condition of this Lease for a period of ten (10) days after written notice of such default from Lessor, or should any person other than Lessee secure possession of the premises, or any part thereof, by reason of any receivership, bankruptcy proceedings, or other operation of law in any manner, whatsoever, Lessor may its sole and exclusive option, without further notice to Lessee: accelerate the full rental amount due for the remaining term hereof in which event the full rental amount due for the remaining term hereof shall be immediately due and payable in full; terminate this Lease in its entirety; without terminating the lease re-enter and take possession of said premises and remove all persons and property therefrom, without being deemed guilty by any means of trespass, and re-let the premises or any part thereof, for all or any part of the remainder of the lease term, to a party satisfactory to Lessor, and at such monthly rental as Lessor may be able to secure; cure such default on Lessee’s behalf without thereby waiving such default (and Lessor’s cost in undertaking such cure shall bear interest at the highest lawful rate until Lessor is reimbursed in full); or exercise any other rights or remedies as may be available to Lessor under applicable law. Should Lessor take possession and be unable to re-let or should such monthly rental obtained on re-letting be less than the rental Lessee is obligated to pay hereunder, plus the expense of re-letting, including reasonable attorneys’ fees and costs of any additional improvements for such new tenant, then Lessee shall pay the amount of such deficiency to Lessor. It is expressly agreed that in the event of default by Lessee hereunder, Lessor shall have a lien upon all goods, chattels, or personal property of any description belonging to Lessee which are placed in or become a part of the Leased Premises, as security for rent and other obligations due and to become due for the remainder of the current lease term, which lien shall not be in lieu of or in any way affect any statutory Lessor’s lien given by law, but shall be cumulative thereto; and Lessee hereby grants to Lessor a security interest in all such personal property placed in said Leased Premises for such purposes. In the event of Lessor’s default, Lessor may take possession of all of Lessee’s property on the premises and may sell the same at public or private sale after giving Lessee reasonable notice of the time and place of any such sale, for cash or on credit, or for prices and terms as Lessor deems appropriate, with or without having the property present at such sale. The proceeds of such sale will be applied first to the necessary and proper expense of removing, storing, and selling such property, then to the payment of any rent due or costs or expenses or attorneys’ fees incurred by the Lessor or to be due or incurred under this Lease, with the balance, if any, to be paid to Lessee. All rights and remedies of Lessor under this Lease shall be cumulative, and none shall exclude any other right or remedy at law or equity. Such rights and remedies may be exercised and enforced concurrently and whenever and as often as occasion therefore arises.  

12.02   If the Lessor materially defaults in the performance of any term, covenant, or condition required to be performed by Lessor under this Agreement, Lessee shall give Lessor not less than thirty (30) days written notice to Lessor of such default and Lessor shall undertake to cure such default to the reasonable satisfaction of Lessee within said thirty (30) day period or if said cure cannot be reasonably completed within such thirty (30) days Lessor shall commence during said thirty (30) days and diligently pursue thereafter, a resolution of said default reasonably acceptable to Lessee.  

ARTICLE XIII

INSPECTION

13.01   Lessee shall permit Lessor and its agents to enter into and upon the Leased Premises at all reasonable times for the purpose of inspecting the same or for the purpose of maintaining or making repairs or alterations to the building, improvements, fixtures, or equipment therein.  

ARTICLE XIV

PARKING

14.01   Lessor shall assign to Lessee that specified number of parking spaces as is reasonably required by Lessee for Lessee’s occupancy which spaces shall be located in the parking lot adjacent to the building affixed to the Leased Premises. Lessor reserves the right from time to time, to designate or specify different parking spaces from those initially assigned. Lessor shall have no liability with respect to automobiles or contents thereof parked in said parking spaces. Lessee shall adhere to and cause all of Lessee’s guests, employees, agents, invitees, and Licensees, to adhere to any and all parking regulations as from time to time established by Lessor. Any parking spaces not assigned to Lessee for its use and occupancy may be used by Lessor for any other use or purpose Lessor deems appropriate.  

ARTICLE XV

ASSIGNMENT AND SUBLEASE

15.01   Lessee shall not assign this Lease nor sublet all or any portion of the Leased Premises without the prior written consent of Lessor.  

15.02   Lessor is expressly given the right to assign any or all of its interest under the terms of this lease and upon such assignment shall have no further liability or obligation hereunder.  

ARTICLE XVI

MISCELLANEOUS

16.01   All notices provided to be given under this Agreement shall be given by Certified Mail or Registered Mail, addressed to the proper party, at the following address:

Lessor’s Address:

Cordova Associates, LLC

Attn: Charles A. Emling, III

605 Chesapeake Dr.

Gulf Breeze, FL 32561

Lessee’s Address:

NT Corporation

815 South Palafox Place

Pensacola, FL 32501

All notices shall be deemed given when deposited in the United States Mail, regardless of whether or not delivery occurs. The aforesaid address may be changed by either party by giving notice such change as set forth herein to the other party, provided that such notice is actually delivered.

16.02   This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors-in-interest, and assigns when permitted by this Agreement.  

16.03   This Agreement shall be construed under and in accordance with the laws of the State of Florida.  

16.04   In case any one or more of the provisions contained in this Lease shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof, and this Lease shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein.  

16.05   This Lease Agreement constitutes the sole agreement of the parties hereto and supersedes any prior understandings or written or oral agreements between the parties respecting the subject matter contained herein.  

16.06   No amendment, modification, or alteration of the terms hereof shall be binding unless the same is in writing, dated subsequent to the date hereof, and duly executed by the parties hereto.  

16.07   The rights and remedies provided by this Lease are cumulative, and the use of any one right or remedy by either party shall not preclude or waive its rights to use any or all other remedies. Such remedies are given in addition to any other rights the parties may have by law, statute, ordinance, equity, or otherwise.  

16.08   No waiver of the parties hereto of any default or breach of any term, condition or covenant of this Lease shall be deemed to be a waiver of any other breach of the same or any other term, condition, or covenant contained herein. In the event Lessee breaches any of the terms of this Agreement whereby the Lessor employs attorneys to protect or enforce its rights hereunder and prevails, then the Lessee agrees to pay to the Lessor all reasonable attorneys’ fees so incurred by the Lessor.  

16.09   Neither Lessor nor Lessee shall be required to perform any term, condition, or covenant in this Lease so long as such performance is delayed, prevented or frustrated by any acts of God, strikes, walk-outs, material or labor restrictions by any governmental authority, civil riot, floods, and any other cause not reasonably within the control of the Lessor or Lessee, and which, by the exercise of good diligence, Lessor or Lessee is unable, wholly or in part, to prevent or overcome.  

16.10   Time is of the essence of this Agreement.  

16.11   If Lessor shall convey title to the demised premises pursuant to a sale or exchange of said property, the Lessor shall not be liable to Lessee or any immediate or remote assignee or successor of Lessee as to any act or omission from and after such conveyance.  

16.12   RADON IS A NATURALLY OCCURRING RADIOACTIVE GAS THAT, WHEN IT HAS ACCUMULATED IN A BUILDING IN SUFFICIENT QUANTITIES, MAY PRESENT HEALTH RISKS TO PERSONS WHO ARE EXPOSED TO IT OVER TIME. LEVELS OF RADON THAT EXCEED FEDERAL AND STATE GUIDELINES HAVE BEEN FOUND IN BUILDINGS IN FLORIDA. ADDITIONAL INFORMATION REGARDING RADON AND RADON TESTING MAY BE OBTAINED FROM YOUR COUNTY HEATH UNIT.

IN WITNESS WHEREOF, the undersigned Lessor and Lessee hereto have executed this Agreement as of the date first written above.

        Witness Print Name Susan Forehand       Witness Print Name Stephanie Oberhausen       Witness Print Name Matthew Durney       Witness Print Name Susan Forehand LESSOR:   CORDOVA ASSOCIATES, LLC.   By: /s/ Charles A. Emling, III CHARLES A. EMLING, III Managing Member           LESSEE:   NT CORPORATION   By: /s/ Ray Russenberger Ray D. Russenberger, President

STATE OF FLORIDA

COUNTY OF ESCAMBIA

The foregoing instrument was acknowledged before me this 7th day of September, 2000, by CHARLES A. EMLING, III, as its Managing Member of CORDOVA ASSOCIATES, LLC, who ( ) is personally known to me or ( ) has produced a driver’s license as identification and has not taken an oath.

            /s/ Susan Forehand

NOTARY PUBLIC-STATE OF FLORIDA

Commission No.: CC707094

Expiration Date: 2-6-02

STATE OF FLORIDA

COUNTY OF ESCAMBIA

The foregoing instrument was acknowledged before me this 7th day of September, 2000, by Ray D. Russenberger, as President of NT Corporation, and who ( ) is personally known to me or ( ) has produced a driver’s license as identification and has not taken an oath.

            /s/ Susan Forehand

NOTARY PUBLIC-STATE OF FLORIDA

Commission No.: CC707094

Expiration Date: 2-6-02

EX-10.43

                    Exhibit 10.43

AMENDMENT TO TRIPLE

NET LEASE

WHEREAS, CORDOVA ASSOCIATES, LLC, a Florida limited Liability Company (“Lessor”), and NT CORPORATION, A Delaware Corporation (“Lessee”), entered into a Triple Net Commercial Lease (“Lease”) dated September 7, 2000; and

WHEREAS, Lessor and Lessee desire to amend certain terms of said Lease; it is therefore, for good and valuable consideration, the receipt of which is hereby acknowledged. Agreed as follows:

1.   Effective on December 1, 2001, Lessee shall lease the 40,000 square feet on floor two pursuant to the terms set forth in 1.01 of the Lease. This shall be deemed to be the second year of the Lease and the rent will change on December 1, 2005.

2.   Lessor has previously paid to Lessee $10.00 per square foot for the construction of improvements to the first floor.

3.   Lessee shall have an option to lease the first floor effective on December 1, 2003, for 156 months, on the payment terms set forth in 1.01 of the Lease and subject to all other terms of the Lease except as amended herein. This option shall expire on November 30, 2003, and must be exercised in writing delivered to Lessor no later htan May 31, 2003. If exercised, the rent payments will be determined as being in the third year of the first five years and the rent will increase on December 1, 2005.

4.   If the option set forth in paragraph 3 is not timely exercised, Lessee shall pay to Lessor the sum of One Million, Two Hundred and Eighty Thousand Dollars ($1,280,000.00) for failing to exercise the option and in consideration of the execution of this Amendment by Lessor. This payment will be due in cash in one payment made from Lessee to Lessor not later than June 30, 2003.

5.   Lessor will pay to Lessee $10 per square foot for the renovations of the second floor. Theses funds shall be solely the construction of improvements on the second floor relating to HVAC, electrical, plumbing, and mechanical. Lessor will reimburse Lessee for 20% of the costs of said improvements as the work is performed, and upon presentation of receipts and invoices acceptable to Lessor up to a maximum of $10 per square foot. Once the construction on the second floor is complete, the remaining balance of the $10 per square foot will be paid from Lessor to Lessee. Lessee shall record the appropriate Notice of Commencement setting forth that the interest of Lessor is not liable for any construction liens pursuant to Section 713.10, Florida Statute.

6.   While construction is being completed on the second floor, Lessee can occupy the first floor without the payment of any rent until December 31, 2002. Lessee must vacate the first floor by that date.

7.   Lessee shall pay to Lessor at the time of the execution of this Amendment an administration fee in the amount of Ten Thousand Dollars ($10,000.00) for the execution of this Amendment.

8.   Except as amended herein, the Lease remains unchanged and in full force and effect.    

Executed this 28^th day of November, 2001 with an effective date of December 1, 2001.

        Witness Print Name _____________________________       Witness Print Name   Kelly Johnson       Witness Print Name  Dianna Merritt       Witness Print Name  Keri Laudig LESSOR:   CORDOVA ASSOCIATES, LLC.   By: /s/ Matthew W. Durney Matthew W. Durney Managing Member           LESSEE:   NT CORPORATION   By: /s/ Ray D. Russenberger Ray D. Russenberger, President

STATE OF FLORIDA

COUNTY OF ESCAMBIA

The foregoing instrument was acknowledged before me this 7th day of December, 2000, by Matthew W. Durney, as its Managing Member of CORDOVA ASSOCIATES, LLC, who ( ) is personally known to me or ( ) has produced a driver’s license as identification and has not taken an oath.

              /s/ Merrith Wilconsin

NOTARY PUBLIC-STATE OF FLORIDA

Commission No.: 909458

Expiration Date: 2-10-04

STATE OF FLORIDA

COUNTY OF ESCAMBIA

The foregoing instrument was acknowledged before me this 7th day of December, 2000, by Ray D. Russenberger, as President of NT CORPORATION, who ( ) is personally known to me or ( ) has produced a driver’s license as identification and has not taken an oath.

     s/ Merrith Wilconsin

NOTARY PUBLIC-STATE OF FLORIDA

Commission No.: 909458

Expiration Date: 2-10-04

EX-10.44

                    Exhibit 10.44

SECOND AMMENDMENT TO TRIPLE

NET LEASE

WHEREAS, CORDOVA ASSOCIATES, LLC, a Florida Limited Liability Company (“Lessor”), and NT CORPORATION, a Delaware Corporation (“Lessee”), entered into a Triple Net Commercial Lease (“Lease”) dated September 7, 2000; and

WHEREAS, Lessor and Lessee entered into an Amendment to the Lease dated November 28, 2001 (“First Amendment”); and

WHEREAS, Lessor and Lessee desire to amend certain terms of said Lease and the First Amendment by this Second Amendment To Triple Net Lease (“Second Amendment”); it is therefore, for good and valuable consideration, the receipt of which is hereby acknowledged, agreed as follows:

1.   Floor two was to be leased under the First Amendment effective December 21, 2001. This date has now been changed to August 1, 2002. Rent paid through July 31, 2002, is rent for floor one. Lessee will vacate floor one as of August 1, 2002. This lease of floor two shall be deemed to be the second year of the Lease and the rent will change on August 1, 2005. The last three years of the lease term of floor two are terminated and the lease of floor two shall terminate on August 1, 2012.  

2.   Paragraph 3 of the First Amendment is amended to state that the option to lease is for 120 months instead of 156 months.  

3.   Lessee shall pay to Lessor at the time of the execution of this Second Amendment an administration fee in the amount of Ten Thousand Dollars ($10,000.00) for the execution of this Second Amendment.  

4.   Except as amended herein, the Lease and First Amendment remain unchanged and in full force and effect.  

Executed this 21 day of October, 2002.

        Witness Print Name  Susan Forehand       Witness Print Name  Merrith Wilconsin       Witness Print Name  Susan Forehand       Witness Print Name  Merrith Wilconsin LESSOR:   CORDOVA ASSOCIATES, LLC.   By: /s/ Matthew W. Durney Matthew W. Durney Managing Member           LESSEE:   NT CORPORATION   By: /s/ Danyelle Kennedy Danyelle Kennedy, CFO and Secretary

STATE OF FLORIDA

COUNTY OF ESCAMBIA

The foregoing instrument was acknowledged before me this 21st day of October, 2002, by Matthew W. Durney, as its Managing Member of CORDOVA ASSOCIATES, LLC, who ( ) is personally known to me or ( ) has produced a driver’s license as identification and has not taken an oath.

                                                                                        /s/ Susan Forehand

NOTARY PUBLIC-STATE OF FLORIDA

Commission No.: DD083341

Expiration Date:  2-6-06

STATE OF FLORIDA

COUNTY OF ESCAMBIA

The foregoing instrument was acknowledged before me this 21st day of October, 2002, by Ray D. Russenberger, as President of NT CORPORATION, who ( ) is personally known to me or ( ) has produced a driver’s license as identification and has not taken an oath.

              /s/ Susan Forehand

NOTARY PUBLIC-STATE OF FLORIDA

Commission No.: DD083341

Expiration Date:  2-6-06

EX-10.45

                    Exhibit 10.45

STATE OF GEORGIA

COUNTY OF DEKALB

LEASE AGREEMENT

THIS LEASE, made this 13^th day of January, 2000 by and between BSRT Phoenix Business Park LLC, an Illinois limited liability company (hereinafter called “Lessor”) and LightNetworks, Inc., (hereinafter called “Lessee”).

WITNESSETH:

WHEREAS, Lessor is the owner of Phoenix Business Park (hereinafter called the “Business Park”, said Business Park, the parcel of land upon which it and its amenities are situated and all improvements and betterments of any nature thereon are hereinafter collectively called the “Property”); and

WHEREAS, Lessee wishes to lease from Lessor space known as 2700 NE Expressway, Building B, Suite B-900, Atlanta, DeKalb County, GA 30345 of the Business Park, as outlined on the diagram marked Exhibit A attached hereto and by this reference incorporated herein (hereinafter called the “Premises”);

NOW THEREFORE, in consideration of the payment of the rent and the keeping and performance of the covenants and agreements by Lessee as hereinafter set forth, Lessor does hereby lease to Lessee, the Lessee does hereby lease from Lessor, the Premises. Except as otherwise provided in this lease Lessee hereby accepts the Premises in their condition existing as of the date hereof.

FOR AND IN CONSIDERATION of the leasing of the premises as aforesaid, the parties hereby covenant and agree as follows:

1.   TERM. The term (hereinafter called the “Lease Term”) of this Lease shall commence on the earlier of substantial completion or May 1, 2000 (hereinafter called the “Commencement Date”) and, unless sooner terminated pursuant to the provisions hereof, shall expire at midnight at the end of the 66^th (sixty sixth full month, (See Special Stipulations.)

2.   RENT.

2.1   Lessee agrees to pay an annual base rental (hereinafter called “Annual Base Rental”) for each year during Lease Term determined in accordance with this Paragraph. During the first year of the Lease Term, Annual Base Rental shall be (see Special Stipulations). The Annual Base Rental for each subsequent year of the Lease Term shall adjust according to the Rent Schedule described on Exhibit C and by this reference incorporated herein. If the final period of the Lease Term is not equal to one year, Annual Base Rental for such partial year shall be prorated based on a 30 day month and a 360 day year.

2.2   Annual Base Rental shall be paid in equal monthly installments (hereinafter called “Base Rent”), said Base Rent to be paid in advance on the first day of every calendar month (except that the first month’s rent shall be paid at the time this Lease is executed). For any partial month, Base Rent shall be adjusted on the basis of a 30 day month.

2.3   Upon execution of this Lease by Lessee, Lessee shall pay a deposit in the amount of Eighteen thousand one hundred and thirty four dollars and eighty eight cents ($18,134.88) (hereinafter called the “Security Deposit”), which Security Deposit may be applied by Lessor towards (but not necessarily in satisfaction of) Lessor’s damage or injury by virtue of any default by Lessee in the performance of Lessee’s covenants and obligations under this Lease. If at the expiration or other termination of this Lease the Security Deposit has not been previously applied and Lessee is not in default of any of its covenants, the Security Deposit shall be returned to Lessor without interest.

2.4   If Lessee shall commit more than two defaults of this Lease within any twelve month period, irrespective of whether such default is cured, then, without limiting the other rights and remedies of Lessor hereunder, the Security Deposit shall be automatically increased by 100 percent of its current amount and such increased amount shall be paid by Lessee to Lessor within five (5) days of written notice from Landlord of said default. Failure of Lessee to timely increase the Security Deposit as aforesaid shall be a default hereunder.

2.5   Lessee shall pay the rent and all other sums, amounts, liabilities and obligations which Lessee herein assumes or agrees to pay or is liable for (whether designated Base Rent, additional rent, Common costs, taxes, insurance, costs, expenses, damages, loses, or otherwise) (all of which are hereinafter called “Amount Due”) promptly at the time and in the manner herein specified without deduction, setoff, abatement, counterclaim or defense, and regardless of whether or not the Lease Term has previously ended. If any Amount Due is not received by Lessor on or before the date on which the same is due, Lessee shall pay Lessor interest on such Amount Due from the date on which the same was due until the date the same in actually paid at a rate per annum equal to the lessor of (i) the prime rate of interest announced by NationsBank, Atlanta, Georgia (or successor thereto) from time to time plus five percent (5%) or (ii) the maximum rate permitted by applicable usury law. Any Amount Due shall be paid at such place or places as Lessor may from time to time designate in writing.

3.   TAXES AND INSURANCE STOPS; COMMON COST RECOVERY

3.1   For every whole or partial calendar year during the Lease Term, Lessee agrees to pay as additional rent the excess of actual Taxes over the Tax Base, “Actual Taxes” means the result obtained by (i) dividing Taxes by the Area of the Business Park, and (ii) multiplying the result by the Area of the Premises. “Area of the Premises” means 26,378 square feet, plus any subsequent additions thereto. “Area of the Business Park” shall mean the area of all space in the Business Park (including expansions thereof, if any), which is presently 110,639 square feet. “Taxes for any calendar year shall mean (i) personal property taxes imposed upon the Property or any part thereof, (ii) real estate taxes, assessments, sanitary taxes, and any other governmental charge, general or special, ordinary or extraordinary, now or hereafter levied or assessed against or allocable to the Property or any portion thereof, or Lessor, as owner of the Property, and (iii) fees and charges of consultants incurred by Lessor with respect to items (i) and (ii) of this sentence to the extent that it reduces taxes. “Tax Base” means the product obtained by multiplying the Area of the Premises by Base Year 2000Taxes divided by Area of the Business Park.

3.2   For every whole or partial calendar year during the Lease Term, Lessee agrees to pay as additional rent the excess of Actual Insurance Premiums over the Insurance Base. “Actual Insurance Premiums” means the result obtained by (i) dividing Lessor’s Insurance Premiums by the Area of the Business Park, and (ii) multiplying that result by the Area of the Premises. “Lessor’s Insurance Premiums” means the premiums charged by Lessor’s insurers for Lessor’s Insurance during the calendar year in question. “Lessor’s Insurance” means insurance carried by Lessor attributable or allocable to the Property for fire and extended coverage insurance, public liability and property damage insurance, rent loss insurance, and any other insurance which Lessor is required to carry by the holder of any Mortgage on the Property or any part thereof. “Insurance Base” means the product obtained by multiplying the Area of the Premises by Base Year 2000 Lessor’s Insurance Premium divided by Area of the Business Park.

3.3   For any partial calendar year payments under Paragraphs 3.1 and 3.2 shall be prorated based on the actual number of days in such partial year. If Actual Taxes for any calendar year are less than the Tax Base, no payment shall be due under Paragraph 3.1, nor will Lessor have any obligation to make any payment or reimbursement to Lessee on account thereof. If Actual Insurance Premiums for any calendar year are less than the Insurance Base, no amount shall be due Lessor under Paragraph 3.2 nor will Lessor have any obligation to make any payment or reimbursement to Lessee on account thereof. Lessor will send Lessee a statement of statements showing amounts due under Paragraph 3.1 or 3.2 as the case may be, and the amounts reflected on any such statements shall be due and payable in full 30 days after any such statement is mailed by Lessor; provided, however, that for the calendar year in which the Lease Term expires, Lessor may bill Lessee under Paragraph 3.1 and 3.2 for such partial calendar year at any time within 60 days prior to the expiration of the Lease Term, with said bill or bills being due and payable on the earlier of 30 days after mailing thereof or the day the Lease Term expires, said bill or bills to be bsed on Lessor’s estimate of the amount due Lessor, with an appropriate adjustment or adjustments being made a t such time as actual figures are available.

3.4   For every whole or partial calendar year during the Lease term, Lessee agrees to pay as additional rent Lessee’s Proportionate Share of Common Costs, as hereinafter set forth.

3.4.1   “Lessee’s Proportionate Share of Common Costs” means the result obtained by (i) dividing Common Costs by the Area of the Business Park, and (ii) multiplying that result by the Area of the Premises. “Common Costs” mean (a) all expenses incurred by Lessor allocable or attributable to, or for the operation and maintenance of the Property, or any part thereof, other than Taxes and Lessor’s Insurance Premiums, including, without limitation, costs incurred for property management; lighting; painting; policing of common areas; interior and exterior cleaning; traffic control; driveway, sidewalk and parking lot maintenance; garbage or debris collection and removal; landscape maintenance and replacement; and utility line maintenance and replacement; and electric, water and sewer charges not separately metered to lessees of the Business Park, and (b) and all levies, assessments, special assessments, dues and other charges allocable to the Property by virtue of any owner’s association or similar group of which Lessor is a part, the Property’s share of costs of maintenance and repair of common amenities (such as roadways, lakes streams, paths, and entrances) for the Project known as Phoenix Business Park, of which the Property is a part, including any expansions of the Project, and covenants, restrictions or other agreements affecting the Property or any portion thereof, including those described in Section 23 hereof.

3.4.2   From and after the Commencement Date, Lessee agrees to pay Lessor on the first day of each month during the Lease Term a sum equal to one-twelfth of Lessor’s estimate of Lessee’s Proportionate Share of Common cost for the calendar year (or portion thereof) in question. For the calendar year in which the Commencement Date occurs, Lessor’s estimate of Lessee’s Proportionate Share of Common Costs shall be deemed to be $.50 per square foot times the Area of the Premises. For each subsequent calendar year or portion thereof during the Lease Term, Lessor will provide Lessee with an estimate of Common Costs and a calculation of the monthly payment due under this subparagraph 3.4.2. If Lessor does not provide said data prior to January 1 of the calendar year in question, Lessee shall continue paying monthly amounts from the previous calendar year until a new estimate is provided, at which time Lessee shall pay any shortfall for previous months (or take a credit against subsequent payments). For any period of less than a month, an appropriate proration will be made based on the actual number of days involved. Lessee’s responsibility to pay any increases in Common Costs shall be limited to no more than a 10% (ten percent) increase over the previous years actual Common costs.

3.4.3   After each calendar year, Lessor will furnish Lessee with a statement of Lessee’s Proportionate Share of Common Costs for such year. If Lessee’s Proportionate Share of Common Costs exceeds the estimated payments made by Lessee under subparagraph 3.4.2 for the year in question. Lessee will pay such excess within 30 days after Lessor’s statement is mailed; if said estimated payments exceed Lessee’s Proportionate Share of Common costs, the overpayment will be credited against the next payments coming due under subparagraph 3.4.2 hereof. For any partial calendar year, an appropriate proration will be made based on the actual number of days involved.

3.5   The payment obligations set forth in this Section 3 shall survive the expiration of the Lease Term.

4. USE.

4.1 Lessee shall use the Premises only for office/warehouse purposes, and for no other purpose without the prior written consent of Lessor. Lessee shall operate its business at the Premises in a reputable manner in compliance with all applicable laws, ordinances, Business Park rules, regulations, covenants, restrictions and other matters shown on the public records, now in force or hereafter enacted. Lessee will not permit, create or maintain any disorderly conduct, trespass, noise or nuisance, whatsoever, about the Premises or the Common Areas, or annoy or disturb any persons occupying other parts of the Property.

4.2Lessee shall not install any equipment that will exceed or overload the capacity of the Business Park, or the utility facilities located at the Premises. If any equipment installed by Lessee shall require additional utility facilities, the same shall be installed by Lessor at Lessee’s expense in accordance with plans and specifications approved by Lessor prior to installation.

4.3Lessee shall not, and shall not allow or suffer (whether intentionally or ortherwise), any Hazardous Substance to be introduced, kept, stored, created, emitted, released, impregnated or discharged into, on or in the Property (including sanitary and storm sewer systems), the Business Park or the Premises. As used herein “Hazardous Substance” means any hazardous, toxic or dangerous waste, substance or material, whether or not in excess of maximum levels set by any governmental or other authority, including, but not limited to the cost of removal of any Hazardous Substance from the Property, the Business Park, or the Premises; the cost of repairing and restoring the same; loss, expense or damage relating to the existence of any Mortgage (including cost of compliance with lender requirements and damage caused by default, acceleration or foreclosure); reimbursement for any fines or impositions imposed by any governmental authority, agency or court; and the cost of complying with the requirement of any governmental authority, agency or court. Lessee, at Lessee’s cost and risk will be permitted to store and use reasonable quantities of fuel for Lessee’s generator and the storage and use of reasonable quantities of UPS batteries. The storage, use and location of said items will meet all governing and regulating authorities’ requirements and will need to be approved by Lessor, which shall not be unreasonably withheld.

5. UTILITIES.

5.1Lessee shall pay for electricity, gas, telephone and other utility service supplied to the Premises.

5.2Unless due lessor’s gross negligence, Lessor shall not be held liable for any damage or injury suffered by Lessee or by any of Lessee’s licensees, agents, invitees, servants, employees, contractors or subcontractors, resulting directly or indirectly from the installation, use or interruption of any utility service to the Premises or Property. No temporary interruption of services shall relieve Lessee from fulfillment of any covenant of this Lease or constitute a constructive eviction.

6. MAINTENANCE.

6.1 Lessor shall keep the roof foundation, exterior walls and all sewer and utility lines to the Business Park in good order and repair, except as to damage to which Section 14 is applicable.

6.2Lessor shall have no obligation to make any repairs unless and until Lessee notifies Lessor in writing of the necessity thereof, in which event Lessor shall have a reasonable time in which to make such repairs.

6.3Lessee shall keep the Premises maintained free from all litter, dirt, debris and obstructions and in a clean and sanitary condition. Notwithstanding anything herein to the contrary, Lessee shall maintain, replace and repair any improvements (including, but not limited to, utility lines, sewer connections, plumbing, wiring and glass) which are or were installed for Lessee. Lessee will purchase, keep in force and provide Lessor with a copy of a maintenance agreement in form and substance satisfactory to Lessor, from a contract satisfactory to Lessor, covering the heating and air conditioning equipment serving the Premises. At the expiration or other termination of this Lease, Lessee shall surrender the Premises (and keys thereto) in as good condition as when received, ordinary wear and tear only accepted. Lessor shall warrant all HVAC equipment for a period of one year from the Commencement Date of this Lease.

7. FORCE MAJEURE. In the event that Lessor shall be delayed or hindered in or prevented from the performance of any act required hereunder by reason of strikes, lock-outs, labor troubles, inability to procure materials, failure of power, restrictive government laws or regulations, riots, insurrection, war or other reason of a like nature (other than for financial reasons) not the fault of Lessor, then performance of such act shall be excused for the period of the delay and the period for the performance of such act shall be extended for a period equivalent to the period of such delay. The provisions of this Section 7 shall not cancel or postpone or delay the due date of any payment to be made hereunder.

8. PROPERTY AND LIABILITY INSURANCE.

8.1Throughout the Lease Term, Lessor will insure the Business Park (excluding foundations and excavations) and the machinery and equipment contained therein owned by Lessor (excluding any property with respect to which Lessee is obligated to insure pursuant to Paragraph 8.3 below) against damage by fire, lightning, explosion and extended coverage, in amounts and with carriers satisfactory to Lessor. All property of Lessee, Lessee’s agent, servants, employees, invitees, licensees, contractors, subcontractors, or any other person, shall be on the Premises at the risk of Lessee only, and Lessor shall not be responsible therefor. Upon written notice from lessee, Lessor shall provide Lessee written proof of insurance.

8.2Lessee shall comply with all insurance regulations so the lowest fire, lighting, explosion, extended coverage and liability insurance rates available for the Business Park may be obtained by Lessor, and nothing shall be done or kept in or on the Premises by Lessee which will cause cancellation of any such insurance or increase the rate thereof, or threat thereof. Lessee shall remedy any condition giving rise to such cancellation, reduction or cost increase or threat thereof within five (5) days after notice thereof by Lessor.

8.3Lessee shall, during its occupancy of the Premises and during the entire Lease Term, at its sole cost and expense, obtain, maintain and keep in full force and effect, and with Lessee, Lessor and Lessor’s mortgages named as additional insurers therein as their respective interests may appear, all insurance required by law and such insurance as is reasonably required by Lessor for risks against which a prudent tenant would protect itself, including, without limitation, the following:

8.3.1Upon property of every description and kind owned by Lessee and located at the Property or for which Lessee is legally liable or installed by or on behalf of Lessee, including, without limitation, furniture, fittings, installations, alterations, additions, partitions and fixtures, in an amount not less than one hundred percent (100%) of the full replacement cost thereof.

8.3.2Public liability insurance in an amount not less than $2,00,000.00 for any one occurrence or such higher limits as Lessor may reasonably require from time to time; such insurance shall include a waiver of subrogation clause in favor of Lessor and coverage against liability for bodily injuries or property damage arising out of the use by or on behalf of Lessee of owned, non-owned or hired automobiles and other vehicles for a limit not less than that specified above.

8.4All insurance policies shall be taken out with companies licensed and registered to operate in the State of Georgia acceptable to Lessor and in form satisfactory to Lessor. Lessee shall deliver certificates evidencing such insurance policies, and any endorsement, rider or renewal thereof, to Lessor; certificates evidencing renewals shall be delivered to Lessor in no event less than thirty (30) days prior to any material change, cancellation or termination thereof.

9.   ALTERATIONS AND IMPROVEMENTS.

9.1  The agreements of Lessor and Lessee concerning the work necessary to prepare the Premises for occupancy are set forth in the Special Stipulations, further identified as Exhibit “B’ attached. If Lessee does not occupy the Premises, or if lessee vacates the Premises prior to August 31, 2005, in either event through no default of Lessor, Lessee shall, notwithstanding any termination of this Lease, pay Lessor upon demand (as an Amount Due) for the cost of all work described on Exhibit B or otherwise done to the Premises by or on behalf of Lessee, less the percentage of said amount equal to the number of days for which Base Rent was paid divided by the number of days in the Lease Term.

9.2   Other than the matters specified in this Lease, Lessee shall not make any alterations, additions or improvements in or to the Premises, nor install or attach fixtures in or to the Premises, without the prior written consent of Lessor which shall not be unreasonably withheld, excepting alterations of cosmetic nature not exceeding $10,000.00 (ten thousand dollars) in cost. All alterations, additions or improvements made, installed in or attached to the Premises by Lessee shall be made at Lessee’s expense in a good and workmanlike, manner, strictly in accordance with the plans and specifications approved by Lessor. Prior to the commencement of any such work by Lessee, Lessee shall deliver to Lessor certificates issued by insurance companies licensed and registered to operate in the State of Georgia, evidencing that workers’ compensation insurance, public liability insurance and property damage insurance, all in amounts satisfactory to Lessor are in force and effect and maintained by all contractors and subcontractors engaged by Lessee to perform such work.

9.3   Lessee shall keep the Premises free from all liens, rights to liens or claims of liens of contractors, subcontractors, mechanics or materialmen for work done or materials furnished to the Property at the request of Lessee. If any claim of lien, or other statutory notice relating to mechanics and materialmen’s liens, is filed, Lessor may, but shall not be obligated to, discharge the same either by paying the amount claimed to be due or by procuring the discharge of such lien or statutory notice by deposit or by bonding proceedings. Any amount so paid by Lessor and all costs and expenses, including without limitation attorneys’ fees incurred by Lessor in connection therewith shall constitute additional rent payable by Lessee on demand. Lessee shall not have the authority to subject the interest or estate of Lessor or the Property or any part thereof to any liens, right to liens or claims of liens for services, materials, supplies or equipment furnished to Lessee.

9.4   All alterations, additions or improvements, including, but not limited, to, fixtures, partitions, counters and window and floor coverings, which may be made or installed by either of the parties hereto upon the Premises, irrespective of the manner of annexation and irrespective of which party may have paid the cost thereof, excepting only movable office furniture, office equipment and appliances put in at the expense of Lessee, shall be the property of Lessor, and shall remain upon and be surrendered in good condition with the Premises at the expiration or other termination of this Lease. Notwithstanding the forgoing, however, if Lessor so elects, it shall be Lessee’s obligation prior to expiration of this Lease at the Lessee’s expense (notwithstanding the expiration of the Lease Term) to restore the Premises to the condition they were in previous to such alterations, additions, improvements, partitions and fixtures.

10.   ASSIGNMENT OR SUBLETTING.

10.1   Lessee shall not assign this lease, or any interest herein, or sublet or allow any other person, firm or corporation to use or occupy the Premises, or any part thereof, without the prior written consent of Lessor, which consent will not be unreasonably withheld. Any consent by Lessor under the preceding sentence shall not be deemed to be a consent to any subsequent event within the scope of the preceding sentence. An assignment of stock, membership units, general partnership or other ownership interest in Lessee, or any merger, consolidation or other corporate reorganization shall be deemed an assignment within the meaning of this Paragraph. Lessee will provide Lessor notice of such assignment of stock that does not require Lessor’s approval. Notwithstanding, Lessee and Assignee shall be liable for the performance of all terms and conditions of this Lease.

10.2   If Lessee shall make any assignment of this lease or shall make any subletting hereunder in any way not authorized by the terms hereof, the acceptance by Lessor of any rent or other Amount Due from any person claiming as assignee, sublessee or otherwise shall not be construed as a recognition of or consent to such assignment or subletting or as a waiver of the right of Lessor thereafter to collect any rent from lessee, it being agreed that Lessor may at any time accept rent or any other Amount Due under this Lease from any person offering to pay the same without thereby acknowledging the person so paying as a Lessee in place of Lessee hereinabove named, and without releasing said Lessee from the obligations of this lease, but the same shall be taken to be a payment on account by Lessee.

10.3   In the case of any assignment consented to or permitted by Lessor hereunder, at the time of such assignment Lessee shall pay Lessor as consideration therefor, as Additional Rent, an amount equal to all sums and other consideration paid to Lessee by the assignee for or by reason of such assignment (including any sum paid for the sale, rental or use of Lessee’s property) less the reasonable brokerage commissions and legal fees, if any actually paid by Lessee to unaffiliated third parties in connection with such assignment. In the case of any subletting consented to or permitted by Lessor hereunder, at the time of such subletting, Lessee shall pay Lessor as consideration therefore, as additional rent, an amount equal to any rents, additional charges or other consideration payable under the sublease to Lessee by the subtenant (including any sums paid for the sale, rental or use of Lessee’s property) which are in excess of the Base Rent during the term of the sublease in respect of the subleased space, less the reasonable brokerage commissions retrofitting costs and legal fees, if any, actually paid by Lessee to unaffiliated third parties in connection with such subletting.

11.   DEFAULTS.

11.1   In the event that (i) the Base Rent or any additional rent herein reserved, or any part thereof, or any other Amount Due, shall not be paid when due and within five (5) days after written notice from Lessor, or (ii) Lessee shall fall to comply with any of the other terms, covenants, conditions or agreements herein contained or in any of the rules and regulations now or hereafter established for the government or operation of the Business Park, or (iii)Lessee shall fail to comply with any term, provision, condition or covenant of any other agreement between Lessor and Lessee within thirty (30) days after written notice from Lessor, or (iv) Lessee makes an assignment for the benefit of creditors, fails to pay its debts as they mature, seeks, prepares to seek, or has filed against it, any petition for relief under any federal, state or other bankruptcy, debtor relief or insolvency law now or hereafter enacted, or a receiver or trustee is appointed for any substantial portion of lessee’s assets or business; then, in any such event, Lessor shall have the option, but not the obligation, to do any or more of the following:

11.1.1   Terminate this Lease, in which event Lessee shall surrender the Premises to Lessor immediately without further notice or demand; and Lessor may, without further notice or demand, thereupon enter the Premises and take possession of same, and expel, remove and put out of possession Lessee and its effects, using such help, assistance and force in so doing as may by needful and proper, without being liable for prosecution or damages therefore, and without prejudice to any other remedy allowed in such cases. If Lessor exercises its rights under this subparagraph 11.1.1, Lessee agrees that in addition to any other recovery permitted hereunder or by law, Lessor shall be entitled to recover all Amounts Due (with interest as herein provided) plus fees and costs under Section 28 hereof, as elements of Lessor’s damages.

11.1.2   Without terminating this Lease and without in any way diminishing Lessee’s liability for the payment of all Annual Base Rental, additional rent and all other Amounts Due, whether past due or which come due during the remainder of the Lease Term (except for the credit for rentals collected upon reletting set forth in the next sentence), retake possession of the Premises (whether by self-help, dispossessory or eviction proceeding or otherwise), and , if Lessor desires to do so (though it shall have absolutely no obligation to do so), rent same, or any part thereof, for Lessee’s account for such term or terms and for such rent and upon such conditions as Lessor may, in its sole discretion, think best, making such changes, improvements, alterations and repairs to the Premises as may be required. In the event Lessor does relet the Premises pursuant to this Paragraph, whether or not Lessor elects to collect liquidated damages hereunder, all rent received by Lessor from such reletting during the Lease Term shall be applied as follows: first, to the payment of any Amount Due other than Base Rent; second, to the payment of any costs and expenses of such reletting, including but not limited to brokerage fees, attorney’s fees, and costs of such changes, improvements, alterations and repairs; third to Base Rent due and unpaid hereunder; fourth, any residue shall be held by Lessor and applied in payment of future rent or damage as the same may become due and payable hereunder; and fifth, when all of Lessee’s obligations have been satisfied, any balance remaining shall be paid to Lessee. In the event lessor exercises its rights under this Paragraph 11.1.2. at Lessor’s sole option Lessee shall pay Lessor upon demand as liquidated damages for Lessee’s breach and not as a penalty, an amount equal to the sum of (i) all unpaid Annual Base Rental discounted at the rate of six (6%) percent per annum from the date each installment is due hereunder, plus (ii) all Amounts Due (with interest as herein provided), plus (iii) fees and costs as provided in Section 28 hereof. It is the express intent of the parties that the liquidated damages provided for in the preceding sentence be treated as a full liquidation of damages for such breach, the parties agreeing that said liquidated damages are a fair and reasonable pre-estimate of Lessor’s damages and that the actual amount of damages sustained by Lessor in the event of breach is not readily ascertainable.

11.1.3   Correct or cure such default and recover such amount expended as an Amount Due hereunder.

11.1.4   Recover any and all costs incurred by Lessor resulting directly, indirectly, proximately or remotely from such default, including, but not limited to reasonable attorneys’ fees, as an Amount Due hereunder.

11.2   In the event of a default or threatened default of this Lease by Lessee, Lessor shall be entitled to all equitable remedies, including without limitation injunction and specific performance. The various rights, remedies, powers, options and elections of Lessor reserved, expressed or contained in this Lease are cumulative, and no one of them shall be deemed to be exclusive of the others, or of such other rights, remedies, powers, options or elections as are now, or may hereafter, be conferred upon Lessor by law or in equity. Failure by Lessor to enforce one or more of the remedies herein provided shall not be deemed or construed to constitute a waiver of such default, or any violation or breach of any of the terms, provisions, or covenants herein contained, or a waiver of Lessor’s right thereafter to insist upon strict compliance with the terms hereof.

12.   DAMAGE AND CONDEMNATION.

12.1   In the event during the Lease Term the Premises are damage by fire or other casualty, but not to such an extent that repairs and rebuilding cannot reasonably be completed within one hundred eighty (180) days of the date of the event causing such damage, Lessor may, at Lessor’s option, repair and rebuild the Premises. If Lessor elects to repair and rebuild the Premises which said notice shall be given to Lesssee within sixty (60) days of said damage, this Lease shall remain in full force and effect, but Lessor may require Lessee to temporarily vacate the Premises while the same are being repaired and, subject to the provisions of this Paragraph 12.1, rent shall abate during this period to the extent that the Premises are untenantable; provided, however, that Lessor shall not be liable to Lessee for any damage or expense which temporarily vacating the Premises may cause Lessee. If the Premises are not repaired, rebuilt or otherwise made suitable for occupancy by Lessee within the aforesaid one hundred eighty (180) day period, Lease shall have the right, by written notice to Lessor, to terminate this Lease, in which event rent shall be abated for the unexpired Lease Term, effective as of the date of such written notification, but the other terms hereof shall remain in full force and effect. If Lessor elects not to repair and rebuild the Premises said notice shall be given to Lessee within sixty (60) days or if the Business Park or any part thereof be so damaged that repairs and rebuilding cannot reasonably be completed within one hundred eighty (180) days of the date of the event causing such damage, which said notice shall be given to Lessee within sixty (60) days of Lessor or Lessee may be written notice to the other party terminate this Lease in which event rent shall be abated for the unexpired Lease Term, effective as of the date of such written notification, but the other terms hereof shall remain in full force and effect.

12.2   In the event the Business Park shall be taken, in whole or in part, by condemnation or the exercise of the right of eminent domain, or if in lieu of any formal condemnation proceedings or actions, if any, Lessor shall sell and convey the Premises, or any portion thereof, to the governmental or other public authority , agency, body or public utility, seeking to take said Premises or any portion thereof, then Lessor, at its option, may terminate this Lease as of the date possession is taken by the condemning authority upon ten (10 ) days prior written notice to Lessee and prepaid rent shall be proportionately refunded from the date of possession by the condemning authority. All damages or other sums awarded in connection with any condemnation or taking of any portion of the Premises or the Property, or paid as the purchase price for any conveyance in lieu of formal condemnation proceedings, whether for the fee or the leasehold interest, shall belong to and be the property of Lessor. Lessee shall execute and deliver any instruments as Lessor may deem necessary to expedite any condemnation proceedings or to effectuate a proper transfer of title to such governmental or other public authority, agency, body or public utility seeking to take or acquire the said lands, and Premises or any portion thereof. If Lessor chooses not to terminate this Lease, then to the extent and availability of condemnation proceeds received by Lessor and subject to the rights of any mortgagee thereto, Lessor shall at the sole cost and expense of Lessor and with due diligence and in a good and workmanlike manner, restore the Premises within a period of six (6) months after the date of the physical taking, and such restoration shall make the same reasonably tenantable and suitable for the general use being made by lessee prior to the taking; provided, however, that Lessor shall have no obligation to restore and reconstruct Lessee’s leasehold improvements unless and to the extent that Lessor receives an award of condemnation proceeds specifically designated as compensation for such improvements. Notwithstanding the foregoing, if Lessor has not completed such restoration and reconstruction on or before six (6) months after the date of physical taking or if the Premises (or so much thereof as would render them untenantable) are taken in condemnation, Lessee shall have the right to cancel this Lease by prompt notice after such occurrence. If this lease continues in effect after such physical taking, the rent payable hereunder shall be equitably adjusted both during the period of restoration operations of Lessor and during the unexpired portion of the Lease Term.

12.3   In the event Lessor, during the Lease Term, shall be required by any governmental authority or the order or decree of any court, to repair, alter, remove, reconstruct or improve any part of the Premises, such repairs, alterations, removal reconstruction or improvement shall not in any way affect the obligations or covenant of Lessee herein contained, and Lessee hereby waives all claims for damages or abatement of rent because of such repairs, alterations, removal, reconstruction or improvement, except that rent shall abate during the period of and to the extent of untenantability; provided, if Lessor reasonably concludes that the work involved cannot be reasonably accomplished within one hundred eighty (180) days, Lessor may at its option terminate this lease by notice to Lessee; provided, further, that where the requirement by a governmental authority to repair, alter, remove, reconstruct or improve any part of the Premises arises out of any act of omission or commission by Lessee, then such repair, alteration, removal, reconstruction or improvement shall be effected promptly at the sole cost and expense of Lessee, and there shall not, in any event, be any abatement of rent nor any right in Lessee to terminate this Lease.

13.   TRANSFER. This Section shall apply only at such times and from time to time as the Area of the Premises is 5,000 square feet or less. In the event the Premises are increased to a size greater than 5,000 square feet, Lessor hereby reserves the right, at its sole option and upon giving at least sixty (60) days prior written notice to Lessee, to transfer and remove Lessee from the Premises from time to time to any other available space in the Business Park of substantially equal area. Lessor hereby agrees to bear the expense of such transfer and removal, as well as the expense of any renovations or alterations which are necessary to make the new space conform substantially in layout and apportionment to the Premises.

14.   LIABILITY OF LESSOR. Notwithstanding that joint or concurrent liability may be imposed upon Lessor orLessee by law, Lessee and Lessee shall indemnify, defend and hold harmless the other party and the Property at each parties expense, against any loss, cost, damage or expense (including attorneys’ fees and court costs) relating to or as a result of (a) any default or failure to comply with the terms hereof (whether in connection with termination hereof or otherwise) by the other party or any permitted sub-tenant hereunder; (b) any act or negligence of the other party or its agents, contractors, employees, invitees or licensees; and (c) all claims for damages to persons or property by reason of the use or occupancy of the Premises not caused by the other party. Moreover, either party shall not be liable for any damage or injury to the Premises, the other party’s property, to the other party, its agents, contractors, employees, invitees or licensees, arising from any use or condition of the Property or the act or neglect of co-tenants or any other person, or the malfunction of any equipment or apparatus serving the Premises. Any and all claims against either party for any damage referred to in this Section 14 are hereby waived and released by the other party. Notwithstanding anything contained herein to the contrary, in the event either party incurs any liability to the other party hereunder, such liability shall be satisfied only out of the other party’s interest in the Premises, it being agreed that the liability of each party, its venturers, partners (individually and as partners), shareholders, officers, agents and employees, shall in all events be satisfied out of the other party’s interest in the Premises.

15.   RIGHT OF ENTRY.Lessor reserves the right to use at its discretion, the Business Park and every part thereof, except the interior of the Premises, in any manner which does not materially interfere with the use of the Premises to be made by Lessee hereunder. Lessor reserves the right, for itself or its mortgagees and prospective purchasers, or their respective agents and duly authorized representatives, to enter and be upon the Premises at any time and from time to time to inspect the Premises to see that Lessee is complying with all obligations hereunder and to repair, maintain, alter, improve and remodel, but Lessor shall not materially interfere with Lessee’s normal operations except in case of an emergency. Lessee shall not be entitled to any compensation, damages or abatement or reduction in rent on account of any such repairs, maintenance, alterations, improvements or remodeling. Except as otherwise provided in this Lease, nothing contained in this Section 15 shall imply any duty on the part of Lessor to repair, maintain, alter, improve or remodel.

16.   BUSINESS PARK RULES AND REGULATIONS. Lessor reserves the right to establish reasonable rules and regulations pertaining to the use and occupancy of the Business Park which rules and regulations may be changed by Lessor from time to time. As and when established, such rules and regulations will be deemed incorporated in this Lease. Lessee shall comply with any such rules and regulations established by Lessor.

17.   PROPERTY LEFT ON THE PREMISES. If upon the expiration of this Lease, or if the Premises should be vacated or abandoned by lessee at any time, or this Lease should terminate for any cause, Lessee or Lessee’s agents, servants, employees, invitees, licensees, contractors, subcontractors or any other person should leave any property of any kind or character in or upon the Premises, the fact of such leaving of property in or upon the Premises shall be conclusive evidence of intent by Lessee or such person to abandon such property, and such leaving shall constitute abandonment of the property unless Lessee continues to pay rent. Lessor, its agents or attorneys, shall have the right and authority upon one (1) days written notice to Lessee or anyone else except as required by law, to remove and destroy, store, sell or otherwise dispose of, such property, or any part thereof, without being in any way liable to Lessee or anyone else therefor. Lessee shall be liable to Lessor for all expenses incurred under this Section, notwithstanding the expiration or termination of this Lease. The proceeds from the sale or other disposition of such property shall belong to the Lessor as compensation for the removal and disposition of said property.

18.   OTHER INTERESTS.

18.1   This Lease and Lessee’s interest hereunder shall at all times be subject and subordinate to the lien and security title of any deeds to secure debt, security agreement, mortgages, or other interests heretofore or hereafter granted by Lessor or which otherwise encumber or affect the Premises and to any and all advances to be made thereunder and to all renewals, modifications, consolidations, replacements, substitutions and extensions thereof (all of which are hereinafter called the “Mortgage”). This clause shall be self operative and no further instrument of subordination need be required by any holder of any Mortgage. Lessee hereby waives and releases any claim it might have against Lessor or any other party for any actions lawfully taken by the holder of any Mortgage. Upon written request from Lessee, Lessor will endeavor to get Lessee a Non-Disturbance Agreement.

18.2   In the event of a sale or conveyance by Lessor of Lessor’s interest in the Premises (including a long term ground lease) other than a transfer for security purposes only, Lessor shall be relieved, from and after the date of transfer, of all obligations and liabilities accruing thereafter on the part of Lessor, provided that the new Owner assumes all obligations and liability of Lessor from and after the transfer and provided that any funds in the hands of Lessor at the time of transfer in which Lessee has an interest shall be delivered to the successor of Lessor. This Lease shall not be affected by any such sale and Lessee shall attorn to the purchaser or assignee.

18.3   If the holder of a Mortgage shall hereafter succeed to the rights of Lessor under this Lease, whether through possession of foreclosure action or delivery of a new lease, Lesseee shall, at the option of the holder of such Mortgage, attorn to and recognize such successor as Lessee’s landlord under this Lease and shall promptly execute and deliver any instrument that may be necessary to evidence such attornment. Upon such attornment, this Lease shall continue in full force and effect as a direct lease between every successor landlord and Lessee, subject to all of the terms, covenants and conditions of this Lease and Lessee’s tenancy hereunder shall not be disturbed so long as Lessee is in full compliance with the terms and conditions hereof.

18.4   In the event that Lessee is notified of the existence of any Mortgage and of the address of the holder of any such Mortgage, Lessee agrees that it will give the holder of any such Mortgage notice of any claimed default by Lessor under this lease, and will exercise no remedies which it may have on account thereof until fifteen (15) days have elapsed after the receipt of such notice by the holder of said Mortgage without cure thereof.

18.5   Lessee shall, at Lessor’s request, promptly execute, acknowledge and deliver any instrument which may be required to evidence or confirm the subordination and attornment provisions set forth in Paragraphs 18.1, 18.2 and 18.3 hereof and, upon Lessee’s failure to do so, Lessor may, in addition to any other rights or remedies hereunder, execute, acknowledge, and deliver any document needed to accomplish same, as the agent and attorney-in-fact of Lessee, and Lessee hereby irrevocably and unconditionally constitutes Lessor as its attorney-in-fact for such purpose, Lessee acknowledging that such appointment is coupled with an interest.

19.   LANDLORD’S LIEN.

19.1   All property of Lessee now or subsequently located upon the Premises during the Lease Term shall be held and bound by a continuing lien and security interest for payment of rent, damages all other Amounts Due, and for full performance of all agreements to be performed by Lessee hereunder, and Lessee hereby grants a security interest therein to Lessor for such purpose.

19.2   Lessee covenants to occupy the Premises on or before th Commencement Date. Lessee shall not abandon or vacate the Premises at any time during the Lease term, whether by operation of law or otherwise. Notwithstanding vacating the Premises and being current on Lessee’s rental obligations shall not constitute a default.

20.   DELAYED POSSESSION. If Lessor shall fail to deliver to Lessee actual possession of the Premises by the Commencement Date rent shall abate until such possession is given, but Lessor shall not be liable to Lessee for such failure nor shall the Lease Term be thereby extended. Notwithstanding the foregoing, however, if the Premises are not available for occupancy by lessee within sixty (60) days after the Commencement Date through no default of Lessee, this lease shall be voidable by either party, and if voided, any payments made to Lessor by Lessee hereunder shall be immediately refunded to Lessee; provided however that such date shall be extended to the extent permitted under Section 7 hereof. The Premises shall be “available for occupancy” when they are so completed that Lessee may conduct nominal operations, or when a Certificate of Occupancy has been issued for the Premises, whichever is earlier.

21.   HOLDING OVER. In the event of holding over by Lessee after the expiration or earlier termination of this Lease, there shall be no renewal of this Lease by operation of law but Lessee shall be a tenant at sufferance, and Lessee shall pay Lessor for the period of such hold-over an amount equal to one and one-half times the Base Rent and rent due under Paragraph 3.5 which would have been payable by Lessee had the hold-over period been part of the original Lease Term, together with any other Amount Due under this Lease. Lessee shall vacate and deliver the Premises to Lessor upon Lessee’s receipt of notice from Lessor to vacate. No holding over by Lessee, whether with or without consent by Lessor, or acceptance of rent by Lessor, shall operate to reinstate, continue or extend the Lease Term.

22.   NO WAIVER. Lessee understand and acknowledges that no assent, express or implied, by Lessor to any breach of any one or more of the terms, covenants or conditions hereof, shall be deemed or taken to be a waiver of any succeeding or other breach, whether of the same or any other term, covenant or condition hereof, or of Lessor’s right thereafter to insist upon strict compliance with the terms hereof.

23.   COMPLIANCE WITH PROTECTIVE COVENANTS. In addition to and without any way limiting any of the foregoing provisions, Lessee shall comply with any reasonable protective covenants now or hereafter of record against the Property and with any changes to such covenants and/or rules and standards duly adopted in accordance with the procedures for either therein.

24.   SIGNS. Lessee shall not install, paint, display, inscribe, place or affix any sign, picture, advertisement, notice, lettering or direction (hereinafter collectively called a “Sign”) which could be visible from outside of the Premises without first securing written consent from Lessor therefor. Any Sing permitted by Lessor shall at all times conform with all municipal ordinances or other laws, regulations, deed restrictions and protective covenants applicable thereto. Lessee shall remove all Signs at the expiration or other termination of this Lease, at Lessee’s sole expense, and shall in a good and workmanlike manner properly repair any damage cause by the installation, existence or removal of Lessee’s Signs.

25.   ESTOPPEL CERTIFICATE: Lessee shall, at any time, and from time to time, upon not less than ten (10) days prior written notice from Lessor, execute, acknowledge and deliver to Lessor without charge a statement in writing in such form and substance as may be required by Lessor (a) certifying that this Lease is unmodified and in full force and effect and the dates to which the rent and other charges are paid in advance, if any; (b) certifying the Commencement Date of this Lease and the monthly Base Rent and additional rent under Paragraph 3.7 hereof being paid by Lessee; (c) acknowledging that there are not, to Lessee’s knowledge, any uncured defaults on the part of Lessor or Lessee hereunder and that Lessee has no right of offset, counterclaim or deduction from or against future rentals; (d) stating that no rent not yet due and payable as of the date of the letter has been paid in advance and no concessions, rebates, allowance or other considerations for free or reduced rent in the future have been granted; (e) all improvements or other work required to be made or performed by the Lessor have been fully completed in accordance with the plans and specifications therefor and to the satisfaction of the Lessee; and (f) the lessee has accepted and occupied the Premises, and Lessee is in full and complete possession of the Premises and actively conducting its business therein. Any such statement may be relied upon by any prospective purchaser of or Lender upon the security of the Premises.

26.   COMMON AREA CONTROL.

26.1   Lessee acknowledges and agrees that all areas outside of the Premises shall at all times be subject to the exclusive control and management of Lessor.

26.2   Lessee and its servants, agents, employees, contractors, subcontractors, invitees, and licensees shall not be entitled to use more of the parking spaces from the Business Park than four spaces per thousand square feet of Area of the Premises. Lessor shall have the right, but not the duty, to assign parking spares to tenants of the Business Park.

26.3   UTILITY DEREGULATIONS

a.   Lessor Controls Selection. Lessor has advised Lessee that presently Georgia Power Company (“Electric Service Provider”) is the utility company selected by Landlord to provide electric service for the Business Park. Notwithstanding the foregoing, if permitted by law, Lessor shall have the right at any time and from time to time during the Lease Term to either contract for service from a different company or companies providing electric service (each such company shall hereinafter be referred as an “Alternate Service Provider”) or continue to contract for service from the Electric Service Provider.

b.   Lessee Shall Give Lessor Access. Lessee shall cooperate with Lessor, the Electric Service Provider, and any Alternate Service Provider, at all times and, as reasonably necessary, shall allow Lessor, Electric Service Provider, and any Alternate Service Provider reasonable access to the Business Park’s electric lines, feeders, risers, wiring and any other machinery within the Premises.

c.   Lessor Not Responsible for Interruption of Service. Unless due to Lessor’s gross negligence or willful misconduct, Lessor shall in no way be liable or responsible for any loss, damage or expense that Lessee may sustain or incur by reason of any change, failure, interference, disruption, or defect in the supply or character of the electric energy furnished to the Premises, or if the quantity or character of the electric energy supplied by the Electric Service Provider or any Alternate Service Provider is no longer available or suitable for Lessee’s requirements, and no such change, failure, defect, unavailability or unsuitability shall constitute an actual or constructive eviction, in whole or in part, or entitle Lessee to any abatement or diminution of rent or relieve Lessee from any of its obligations under the Lease.

27.   NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed to have been given and effective when delivered in person or when deposited in the United States mail, return receipt requested, addressed, if to Lessor, at the address set forth on the first page of this Lease, or to such other addresses as lessor may direct from time to time by fifteen (15) days prior written notice, and if to Lessee, at the Premises. Lessee hereby appoints as its agent to receive service of all dispossessory or distraint proceeding and notices in connection therewith, the person in charge of or occupying the Premises at the time; and if no person is in charge of or occupying the Premises, then such service or notice may be made by attaching the same on the main entrance to the Premises and on the same day enclosing, directing, stamping and marking by first class mail a copy of such service or notice to Lessee at the last known address of Lessee.

28.   ATTORNEY’S FEES.If any Amount Due hereunder is collected by or through an attorney, Lessee agrees to pay fifteen (15%) percent thereof as attorneys’ fees together with any costs and expenses which Lessor incurs in attempting to enforce any of the obligations of Lessee under this Lease, if Lessee does not prevail in such proceedings.

29.   HOMESTEAD. Lessee waives all homestead rights and exemptions which it may have under any law as against any obligations owing under this Lease. Lessee hereby assigns to Lessor its homestead and exemption.

30.   ACCORD AND SATISFACTION. No payment by Lessee or receipt by Lessor of a lesser amount than the Base Rent, additional rent or any other amount due herein stipulated shall be deemed to be other than on account of the earliest of the same then due, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and Lessor may accept such check or payment without prejudice to Lessor’s fight to recover the balance of such rent or pursue any other remedy provided in this lease.

31.   BROKERS. Other than NAI/Brannen Goddard (hereinafter collectively called “Agent”), Lessee warrants and represents that it has had no dealings with any broker or agent in connection with this Lease and covenants to pay, hold harmless and indemnify Lessor from and against any and all cost, expense or liability for any compensation, commissions and charges claimed by any broker or agent with respect to this Lease or negotiations thereof who purports to have been engaged by Lessee.

32.   MISCELLANEOUS.

32.1   All the terms and provisions of this Lease shall be binding upon and apply to the successors, permitted assigns and legal representatives of Lessor and Lessee or any person claiming by, through or under either of them or their agents or attorneys, subject always, as to Lessee, to the restrictions contained in Section 10 hereof. Words of any gender used in this Lease shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural unless the context otherwise requires.

32.2   The captions are inserted in this lease for convenience only, and in no way define, limit, or describe the scope of intent of this Lease or of any provision hereof, nor in any way affect the interpretation of this Lease.

32.3   This lease is made and delivered in, and shall be interpreted, construed and enforced with, the laws of the State of Georgia.

32.4   This Lease and the schedules and exhibits attached hereto and forming part hereof set forth all of the covenants, promises, agreements, conditions and understandings between Lessor and Lessee concerning the Premises and the property, and there are no covenants, promises, terms, conditions or understandings either oral or written, between them other than as are herein set forth. Except as herein otherwise provided, no subsequent alteration, amendment, change or addition to this Lease shall be binding upon Lessor or Lessee unless reduced to writing and signed by the Party to be bound thereby.

32.5   The terms, conditions, covenants and provisions of this Lease shall be deemed to be severable and legally independent. If any clause or provision herein contained shall be adjudged to be invalid or unenforceable by a court of competent jurisdiction or by operation of any applicable law, it shall not affect the validity of any other clause or provision herein, but such other clauses or provisions shall remain in full force and effect.

32.6   This Lease, or any portion hereof, shall not be recorded, unless both parties hereto agree to such recording.

32.7   Time is of the essence of this Lease.

32.8   This Lease shall create the relationship of landlord and tenant between Lessor and Lessee, and nothing contained herein shall be deemed or construed by the parties hereto, or by any third party, as creating the relationship or principal and agent or of partnership, or of joint venture, or of any relationship other than landlord and tenant, between the parties hereto; no estate shall pass out of Lessor; Lessee has only a usufruct not subject to levy and sale.

For additional terms and stipulations of this Lease (if any) see Exhibit C, attached hereto and by this reference incorporated herein.

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

LESSOR: BSRT Phoenix Business Park L.L.C

        BSRT PORTFOLIO CORP., its managing members

         By: /s/_______________

        Vice President

LESSEE:LightNetworks, Inc.

By: M. Eston Kirby, Jr.

          VP of Planning

{CORPORATE SEAL}

EXHIBIT “A”

EXHIBIT “B”

Special Stipulations

Lease Agreement between BSRT Phoenix Business Park L.L.C., as Lessor, and LightNetworks, Inc., as Lessee, dated____________________, 19______ for 26,378 rentable square feet.

These Special Stipulations are made and entered into contemporaneously with the Lease Agreement described above. In the case of any conflict between the Special Stipulations and the Lease, these Special Stipulations shall control. All terms used herein shall be the same as defined in the Lease.

1.   Base Rent

Lessee’s Base Monthly Rental shall adjust as follows:

Period		Rent/SF	Annual Base Rent	Monthly Base Rent
Commencement Date	Month 6	$4.13	$108,941.14	$9,078.43
Month 7-	Month 18	8.25	217,618.50	18,134.88
Month 19-	Month 30	8.50	224,213.00	18,684.42
Month 31-	Month 42	8.75	230,807.50	19,233.96
Month 43-	Month 54	9.01	237,665.78	19,805.48
Month 55-	Month 66	9.29	245,051.62	20,420.97

2.   Broker Disclosure

NAI/Brannen Goddard has acted as Agent for the Lessor and Lessee in this transaction and will be paid a commission by Lessor pursuant to a separate agreement.

3.   Temporary Space

Upon the full execution of the Lease, Lessee may occupy Suite B-450, approximately 7,776 square feet at Phoenix Business Park on a rent free basis until Lessee’s Premises are ready for occupancy at which time Lessee will relocate to Lessee’s Premises. Lessee shall abide by all other terms and conditions of Lease during Lessee’s occupancy of the temporary space. Additionally, Lessee is responsible for all Lessee’s utility costs to the temporary space during said time. The temporary space shall be returned to Lessor in the same condition as privded Lessee, normal wear and tear accepted. Lessor reserves the right to move Lessee, at Lessor’s expense, to alternative space, Suite C-200, approximately 7,726 square feet, should Lessor have a new Lessee for Suite B-450.

4.   Premises Improvements Allowance

Lessor, at an expense not to exceed $15.00/SF ($395.670.00) (“Improvement Allowance”), shall complete improvements to the Premises per mutually agreed upon construction drawings. Lessee shall provide Lessor permittable drawings no later than February 15, 2000. Should there be any delay in the delivery of premises to Lessee by May 1, 2000 due to Lessor not receiving permittable plans by February 15, 2000, this Lease shall commence May 1, 2000. Said Improvement Allowance shall go toward the cost of Lessee’s improvements, architectural fees and a construction management fee equal to five percent (5%) of said costs. The Improvement Allowance may not be used to pay for non-construction items, such as rent, moving expenses, furniture or telecommunications equipment. Should the actual improvement costs exceed the Improvement Allowance, Lessee shall pay Lessor said excess amount within 30 days of the receipt of an invoice from Lessor for said amount. Notwithstanding Lessor, at Lessor’s expense, and at an expense not be part of the Improvement Allowance, shall replace all HVAC units.

5.   Irrevocable Letter of Credit.

As part of this Lease, Lessee shall provide Lessor an Irrevocable Letter of Credit (“L.C.”), which is assignable, acceptable to Lessor in the amount of $200,000.00 (two hundred thousand dollars and no cents). Provided Lessee is not in default of the Lease, the L.C. will be reduced to $100,000.00 (one hundred thousand dollars and no cents) at the end of the 36^th month of the Lease term and reduced to $0.00 at the end of the 48^th month of the Lease term. A copy of the L.C. is attached to and made part of this Lease as Exhibit “C”.

6. First Right of Offering

Provided Lessee is not in default and upon receiving interest from a Third Party in Suite B-700, approximately 5,198 square feet, Lessor will first offer in writing to Lessee said space at terms and conditions as the Premises would be offered to any other Third Party. Lessee has three (3) business days to agree with Lessor on business terms and subsequently three (3) more business days to execute an Amendment to Lease said space. Should Lessee not respond to Lessor’s written notification within three (3) business days, Lessor will be free to lease said space to said Third Party.

EXHIBIT “C”

L.C.

EX-10.46

                    Exhibit 10.46

FIRST AMENDMENT TO LEASE AGREEMENT

THIS FIRST LEASE AMENDMENT is made and entered into this 17^th day of February, 2000 among BSRT Phoenix Business Park, L.L.C., as Landlord, and LightNetworks, Inc., a Georgia Corporation as Tenant.

WITNESSETH

WHEREAS, Landlord and Tenant entered into a Lease Agreement (“Lease”) for the use and occupancy of the certain premises (the “Premises”) by Tenant located in Phoenix Business Park, 2700 N.E. Expressway, Building B, Suite B-900, Atlanta, GA 30345 (the “Building”) dated January 13, 2000; and

WHEREAS, Landlord and tenant do hereby intend to amend and modify the Lease as herein set forth.

NOW THEREFORE, in consideration of the mutual covenants and conditions contained herein the received insufficiency which are hereby acknowledged, the parties hereto agree as follows:

1.   Expansion

Effective February 15, 2000 Tenant will add to the Premises approximately 5198 rentable square feet known as Suite B-700, Exhibit “A” attached. For the purposes of this Lease, tenant’s Premises shall now be defined as 31,576 rentable square feet.

2.   Expansion Space Lease Term

The Lease Term for the expansion space shall commence February 15, 2000 and expire at the same time as the main space, Suite B-900 expires, at the end of the sixty sixth (66^th) month of the Lease term as described and defined in the Lease.

3.   Expansion Space Rent Schedule

February 15, 2000- February 29, 2000	$1,786.81/half month
March 1, 2000- Month 18 (as defined in the Lease)	$3,573.63/month
Month 19- Month 30 (as defined in the Lease)	$3,681.92/month
Month 31- Month 42 (as defined in the Lease)	$3,790.21/month
Month 43- Month 54 (as defined in the Lease)	$3,902.83/month
Month 55- Month 66 (as defined in the Lease)	$4,024.12/month

4.   Expansion Space Security Deposit

Upon the execution of this First Amendment to Lease Agreement, Tenant shall pay to Landlord an amount of $3,573.63 which shall be added to and made a part of Tenant’s Security Deposit as defined in the Lease.

5.   Expansion Space Premises

Lessor, at an expense not to exceed $15.00/SF ($77,790.00) (“Improvement Allowance”) and no later than September 30, 2000 shall complete improvements to the Premises per mutually agreed upon construction drawings. Said Improvement Allowance shall go toward the cost of Lessee’s improvements, architectural fees and a construction management fee equal to five percent (5%) of said costs. The Improvement Allowance may not be used to pay for non-construction items, such as rent, moving expenses, furniture or telecommunications equipment. Should the actual improvement costs exceed the Improvement Allowance, Lessee shall pay Lessor said excess amount within 30 days of the receipt of an invoice from Lessor for said amount. Notwithstanding Lessor at Lessor’s expense, and at an expense not to be part of the Improvement Allowance shall replace all HVAC units.

6.   Expansion Space Irrevocable Letter of Credit

As part of the First Amendment to Lease Agreement, Lessee shall provide Lessor an Irrevocable Letter of Credit (“L.C.”), which is assignable, acceptable to Lessor in the amount of $40,000.00 (forty thousand dollars and no cents) within thirty (30) days of the execution of this Amendment. Provided Lessee is not in default of the Lease, the L.C. will be reduced to $20,000.00 (twenty thousand dollars and no cents) at the end of the 36^th month of the Lease term and reduced to 0.00 at the end of the 48^th month of the Lease term. A copy of the L.C. is to be attached to and made part of this Amendment as Exhibit “B”.

Exhibit “B”

L.C. (to be attached)

Except as expressly amended or modified hereby, the terms and conditions of the First Amendment to Lease Agreement, as amended, shall be and remain in full force and effect and are hereby confirmed by Landlord and Tenant.

The terms and conditions of this First Amendment shall inure to the benefit of, and be binding upon, the successors, assigns and legal representative of the parties hereto.

LESSOR:BSRT Phoenix Business Park L.L.C.

By:BSRT PORTFOLIO CORP., its managing member

By: /s/________________________________________

Vice President

           < font id="TAB2" style="LETTER-SPACING: 9pt">         

LESSEE: LightNetworks, Inc.

By: Joseph Phillips

Title   Leasing Administrator

Attest:_________________________________________

{CORPORATE SEAL}

EX-10.47

                    Exhibit 10.47

SECOND AMENDMENT TO LEASE AGREEMENT

THIS SECOND LEASE AMENDMENT, is made and entered it this 7^th day of April, 2000 among BSRT Phoenix Business Park, LLC, as Landlord, and LightNetworks, Inc., a Georgia Corporation, as Tenant.

WITNESSETH

WHEREAS, Landlord and Tenant entered into a Lease Agreement (“Lease”) for the use and occupancy of the certain premises (the “Premises”) by Tenant located in Phoenix Business Park, 2700 N.E. Expressway, Building B, Suite B-900, Atlanta, GA 30345 (the “Building”) dated January 13, 2000; and

WHEREAS, Landlord and tenant do hereby intend to amend and modify the Lease as herein set forth.

NOW THEREFORE, in consideration of the mutual covenants and conditions contained herein the received insufficiency which are hereby acknowledged, the parties hereto agree as follows:

1.   Expansion

Effective May 1, 2000 Tenant will add to the Premises approximately 9,846 rentable square feet known as Suite B-400, Exhibit “A” attached. Effective June 15, 2000. Tenant will add to the Premises 7,776 rentable square feet known as Suite B-450, Exhibit “A” attached. For the purposes of this Lease, Tenant’s Premises shall be defined as 41,422 rentable square feet as of May 1, 2000, and 49,198 rentable square feet as of June 15, 2000.

2.   Expansion Space Rent Schedule

Suite B-400

May 1, 2000- Month 18 (as defined in the Lease)	$6,974.25/month
Month 19- Month 30 (as defined in the Lease)	$7183.48/month
Month 31- Month 42 (as defined in the Lease)	$7398.98/month
Month 43- Month 54 (as defined in the Lease)	$7620.95/month
Month 55- Month 66 (as defined in the Lease)	$7849.58/month

Suite B-450

June 15,2000-June 30, 2000 (as defined in the Lease)	$2754.00/half month
July 1, 2000- Month 18 (as defined in the Lease)	$5508.00/month
Month 19- Month 30 (as defined in the Lease)	$5673.24/month
Month 31- Month 42 (as defined in the Lease)	$5843.44/month
Month 43- Month 54 (as defined in the Lease)	$6018.74/month
Month 55- Month 66 (as defined in the Lease)	$6199.30/month

3.   Expansion Space Security Deposit

Upon the execution of this Second Amendment to Lease Agreement, Tenant shall pay to Landlord an amount of $12,482.25 which shall be added to and made a part of Tenant’s Security Deposit as defined in the Lease.

4.   Expansion Space Premises

Lessor, at an expense not to exceed $6.00/SF ($105,732.00) (“Improvement Allowance”) and no later than September 30, 2000 shall complete improvements to the Premises per mutually agreed upon construction drawings. Said Improvement Allowance shall go toward the cost of Lessee’s improvements, architectural fees and a construction management fee equal to five percent (5%) of said costs. The Improvement Allowance may not be used to pay for non-construction items, such as rent, moving expenses, furniture or telecommunications equipment. Should the actual improvement costs exceed the Improvement Allowance, Lessee shall pay Lessor said excess amount within 30 days of the receipt of an invoice from Lessor for said amount.

Except as expressly amended or modified hereby, the terms and conditions of the First Amendment to Lease Agreement, as amended, shall be and remain in full force and effect and are hereby confirmed by Landlord and Tenant.

LESSOR:BSRT Phoenix Business Park L.L.C.

By:BSRT PORTFOLIO CORP., its managing member

By: /s/_____________________________________

Vice President

LESSEE: LightNetworks, Inc.

By: Joseph Phillip

Title  Director - Network Deployment and Construction

Attest:_____________________________________

{CORPORATE SEAL}

EX-10.48

                     Exhibit 10.48

PHOENIX BUSINESS PARK

ASSIGNMENT OF LEASE

LightNetworks, Inc. (“Assignor”) and Network Telephone Corporation (“Assignee”) and BSRT Phoenix Business Park, L.L.C. (“Lessor”) hereby agree as follows:

1.   Recitals.

1.  Recitals.

(a)   Assignor, as Lessee and Lessor executed and delivered a certain Lease Agreement dated January 13, 2000 (the “Lease”), which Lease was amended by a First Amendment to Lease Agreement dated February 17, 2000 and a Second Amendment to Lease Agreement dated April 17, 2000.

(b)   Capitalization terms used herein shall have the same meanings as in the Lease.

(c)   Assignor desires to assign the Lease to Assignee and Lessor has agreed to consent to such Assignment upon the terms and conditions hereof.

2.Assignment and Acceptance.

(a)   For and in consideration of ten and no/1000 dollars and other good and valuable consideration, Assignor hereby assigns to Assignee all of Assignor’s right, title and interest in and to the Lessee’s interest under the Lease. Assignor agrees to indemnify, defend and hold Assignee harmless from and against all claims, losses, damages, costs and fees assessed against Assignee in connection with the Lease for any time period prior to the effective date of this Assignment.

(b)   Assignee accepts the foregoing Assignment and agrees to be bound by the terms and conditions of the Lease as if Assignee had been an original party thereto. Assignee will indemnify, defend and hold Assignor harmless from and against all claims, losses, damages, costs and fees assessed against Assignor in connection with the Lease for any time period from and after the Effective Date of this Agreement.

3.Consent.

Lessor hereby consents to the foregoing Assignment conditioned upon receipt by Lessor, on or prior to the effective date of this Agreement, of a letter of credit or cash deposit in the amount of $240,000.00 representing the replacement of the Irrevocable Letter of Credit required by Paragraph 5 of Exhibit “B” (Special Stipulations) of the Lease as amended by Paragraph 6 of the First Amendment to the Lease, which has been cashed by Lessor to cure a default by Lessee under the Lease.

4.Effective Date.

The Effective Date of this Assignment is September 21, 2000.

SIGNATURES ON FOLLOWING PAGE

Executed this 21^st day of September, 2000.

Assignor:

LightNetworks. Inc.

By: Jeffrey D. Smock_

Title: President & CEO

Assignee:

Network Telephone Corporation

By: Johney Matthew

Title: EVP/ CFO

Lessor:

BSRT Phoenix Business Park, L.L.C.

By:Robert G. Higgins

Title:Vice President

EXHIBIT “B”

Special Stipulations

EX-10.49

                    Exhibit 10.49

AMENDMENT TO LEASE

THIS Amendment made this 4^th day of August 2005, by and between Phoenix Business Park, LLC, successor Lessor to DA Phoenix, LLC, successor to BSRT Phoenix Business Park LLC, an Illinois Limited Liability Company, as “Lessor” and Network Telephone Inc., successor in interest to LightNetworks, Inc., as “Lessee”.

WITNESSETH:

WHEREAS, the parties hereto made and entered into a Lease Agreement dated January 13, 2000, for premises located at 2700 NE Expressway, Suites B-700-900, Atlanta, Georgia 30345.

WHEREAS, the parties wish to modify the Lease Agreement as hereinafter provided.

WHEREAS, the terms Lessor and Landlord shall have the same meaning herein; and the terms Lessee and Tenant shall have the same meanings herein.

NOW THEREFORE, in consideration of the exchange of valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that said lease shall be amended as follows:

1.   Conditional Release of a Portion of the Premises. The Premises as drawn on Exhibit “A” of this Amendment to Lease shall demonstrate the Released Premises as shaded, Lessor shall, at its own cost, build the demising wall that will separate the Premises from the Released Premises. Tenant shall be responsible for leaving the Released Premises in the original condition that it accepted the Premises.

2.   Release of Lessee’s Maintenance Obligation. Lessee shall be released immediately after the construction and completion of the Demising Wall that will be built to separate the Premises from the Released Premises upon execution of this Amendment to Lease, from any obligation to maintain the Released Premises, including its JVAC systems and other maintenance obligations for the Released Premises until the end of the Term.

3.   Furniture and Vacate. Lessee shall remove all furniture that are currently in the Released Premises and vacate it immediately. Lessee shall remove its security, and phone/Data cabling if it desires no later than 8/12/05.

4.   The Premises, after the construction and completion of the Demising Wall shall constitute and comprise 14,412 rentable square feet as shown on Exhibit “A’ of this Amendment to Lease.

5.   Tenant shall be responsible for 50% of all costs and obligations of the 1,311 Common Area for the restrooms that will be created when the Demising Wall is constructed and the network Telephone Wall, as shown on Exhibit “A”, is built.

6.   Landlord shall be responsible for the cost and construction of the Network Telephone demising Wall, as well as construction items identified on attached Action Item List under Landlord Cost. The second list headed Tenant Cost, will be completed by Landlord at Tenant’s cost. Landlord will provide Tenant with itemized cost of each item specified. Any Tenant Cost will be amortized into the base rental rate on a straight line basis over the 5 year renewal term. Landlord is also responsible for the cost of replacing any of the HVAC units, if each unit has been properly maintained by a licensed certified HVAC technician, on at least a quarterly basis for the duration of the Term, and one should be deemed by Landlord’s HVAC Contractor to be unrepairable during the Term.

7.   New Base Rent and New Term

November 1, 2005-October 31, 2006	$11,409.50 per month
November 1, 2006-October 31, 2007	$11,751.76 per month
November 1, 2007-October 31, 2008	$12,104.34 per month
November 1, 2008-October 31, 2009	$12,467.47 per month
November 1, 2009-October 31, 2010	$12,841.50 per month

8.   Lessee shall have two (2) five (5) year renewal options at the then Market Rate. Such options must be exercised by providing written Notice not less than 180 days in advance.

9.   Tenant shall retain a Letter of Credit in favor of the Landlord in the amount of $100,000 with a bona fide banking institution that shall meet Landlord’s approval. Such Letter of Credit shall be in the same form and working as the current one that Landlord and its Lender hld for Tenant. Should Landlord refinance the Park or Property, or any portion of it, and if Landlord’s new Lender does not require such Letter of Credit to be held as collaterally assigned for the Landlord’s note, and Tenant is not in Default, then such Letter of Credit shall no longer be a necessary instrument of Security for the Lease and it may be replaced with a Security Deposit in the amount of one month’s rental the time of such change. In addition Landlord will return to Tenant the existing cash security deposit, if one shall exist, within 30 days of execution.

10.   Landlord formally rescinds the Default Letter it sent in April, 2005 and state that Tenant is not in Default at the time of the execution of this Amendment to Lease.

11.   Tenant shall indemnify Landlord against any and all claims by a Broker in conjunction with this Amendment.

The monthly rental shall be paid under the same terms and conditions as specified in the Lease Agreement, except as provided herein.

All other terms, provision and covenants of the Lease Agreement shall remain full force and effect.

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

“LESSOR”

Phoenix Business Park, LLC

By:_______________________

Title:Manager

“LESSEE”

Network Telephone Inc.

By: Danyelle Kennedy Lantz

Title: CFO and Secretary

EX-10.50

                    Exhibit 10.50

AMENDMENT TO LEASE

THIS Amendment made this day of October 2005, by and between Phoenix Business Park, LLC, successor Lessor to DA Phoenix, LLC, successor to BSRT Phoenix Business Park L.L.C., an Illinois Limited Liability Company, as "Lessor" and Network Telephone, Inc., successor in interest to LightNetworks, Inc, as “Lessee".

WITNESSETH:

WHEREAS, the parties hereto made and entered into a Lease Agreement dated January 13, 2000, for premises located at 2700 NE Expressway, Suites B-700 - 900, Atlanta, Georgia 30345 .

WHEREAS, the parties hereto amended the Lease on August 4, 2005;

WHEREAS, the parties wish to modify the Lease Agreement as hereinafter provided.

WHEREAS, the terms Lessor and Landlord shall have the same meaning herein; and the terms Lessee and Tenant shall have the same meanings herein

NOW, THEREFORE, in consideration of the exchange of valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that said lease shall be amended as follows:

1. New Size of the Premises. The Premises as drawn on Exhibit “A” of this Amendment to Lease shall demonstrate the new Premises. The Premises shall comprise 15,067 rentable square feet. Lessor shall, at its own cost, build the demising wall that will separate the Premises from the adjacent tenant. Lessee shall be responsible for maintaining the Premises as stated in the Lease and the previous Amendments of the Lease.

2.   Lessee’s Maintenance Obligation. Lessee shall be responsible for the maintenance of the newly added portion of the Premises that was formerly known as the Common Area Restrooms, after the construction and completion of the Demising Wall that has been built to separate the Premises from the adjacent tenant’s premises

3.   HVAC For The Newly Added Portion Of The Premises. Currently, the HVAC that services the restrooms located in the newly added portion of the Premises is being serviced by the adjacent tenant. Lessee acknowledges this fact and understands that the adjacent tenant is currently responsible for maintaining this unit and has no current plans to alter this situation. Lessor shall act as a facilitator to attempt to keep the restrooms’ HVAC operational and temperature reasonably maintained. Lessee further acknowledges that it may, at its own expense, at a later date, adjust the ducts and air flow within its restroom areas so that its’ own HVAC system services this area and therefore not the adjacent tenant’s HVAC system (servicing this area).

4.   Lessor shall not be responsible for the cost and construction of any of the work that Lessee wishes to perform to modify its own plans within its’ Premises other than constructing the Demising wall. Furthermore, Lessor shall not be required to install the Network Telephone Wall by the restrooms that was previously mentioned in the Amendment prior to this one. Lessor shall not be required to “shorten the wall” for the Common Area Restrooms since there will no longer be any common are restrooms.

5.   Lessor shall be responsible to cut in and frame the Network Telephone logo window. Lessee shall pay for the cost of the window, glass, and mullion frame around the window.

6.   New Base Rent and New Term.

November 1, 2005 - October 31, 2006$11,928.04 per month

November 1, 2006 - October 31, 2007$12,285.88 per month

November 1, 2007 - October 31, 2008$12,654.46 per month

November 1, 2008 - October 31, 2009$13,034.09 per month

November 1, 2009 - October 31, 20010$13,425.11 per month

7.   If at any time in the future, a governing authority deems that the restroom plan for the adjacent tenant can not be reasonably adjusted to meet the proper building code, then Lessor shall have the right, but not the obligation, to immediately nullify this Amendment for this sole reason and shall rebuild the walls mentioned at its’ cost and the rentals shall adjust accordingly from the time of substantial completion of the common area restroom walls that will be created.

8.   Each party shall indemnify, defend, and hold harmless from and against any and all costs, expenses and liabilities for commissions or other compensation or charges claimed by any broker or agent who claims to have acted on behalf of one party or the other in relation to this Amendment or the Lease.

The monthly rental shall be paid under the same terms and conditions as specified in the Lease Agreement, except as provided herein.

All other terms, provision and convenants of the Lease Agreement shall remain in full force and effect.

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

"LESSOR"

Phoenix Business Park. LLC

By:/s/__________________________

Its:___________________________

"LESSEE"

Network Telephone, Inc.

By: /s/ Danyelle Kennedy

It's: CFO and Secretary

EX-10.51

                   Exhibit 10.51

AMENDMENT TO LEASE

THIS Amendment made this 21^st day of December, by and between Phoenix Business Park, LLC, successor Lessor to DA Phoenix, LLC, successor to BSRT Phoenix Business Park LLC, an Illinois Limited Liability Company, as “Lessor” and Network Telephone Inc., successor in interest to LightNetworks, Inc., as “Lessee”.

WITNESSETH:

WHEREAS, the parties hereto made and entered into a Lease Agreement dated January 13, 2000, for premises located at 2700 NE Expressway, Suites B-700-900, Atlanta, Georgia 30345.

WHEREAS, the parties hereto amended the Lease on August 4, 2005;

WHEREAS, the parties wish to modify the Lease Agreement as hereinafter provided.

WHEREAS, the terms Lessor and Landlord shall have the same meaning herein; and the terms Lessee and Tenant shall have the same meanings herein.

NOW THEREFORE, in consideration of the exchange of valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that said lease shall be amended as follows:

1.   New Size of the Premises. The Premises as drawn on Exhibit “A” of this Amendment to Lease shall demonstrate the new Premises. The Premises shall comprise 15,067 rentable square feet. Lessor shall, at its own cost, build the demising wall that will separate the Premises from the adjacent tenant. Lessee shall be responsible for maintaining the Premises as stated in the Lease and the previous Amendments of the Lease.

2.   Lessee’s Maintenance Obligation. Lessee shall be responsible for the maintenance of the newly added portion of the Premises that was formerly known as the Common Area Restrooms, after the construction and completion of the Demising Wall that has been built to separate the Premises from the adjacent tenant’s premises.

3.   HVAC for the Newly Added Portion of the Premises. Currently, the HVAC that services that restrooms located in the newly added portion of the Premises is being serviced by the adjacent tenant. Lessee acknowledges this fact and understands that the adjacent tenant is currently responsible for maintaining this unit and has no current plans to alter this situation. Lessor shall act as a facilitator to attempt to keep the restrooms’ HVAC operational and temperature reasonably maintained. Lessee further acknowledges that it may, at its own expense, at a later date, adjust the ducts and air flow within its restroom areas so that is’ own HVAC system services this area and therefore not the adjacent tenant’s HVAC system (servicing this area).

4.   Lessor shall not be responsible for the cost and construction of any of the work that Lessee wishes to perform to modify its own plans within its’ Premises other than constructing the Demising wall. Furthermore, Lessor shall not be required to install the Network Telephone Wall by the restrooms that was previously mentioned in the Amendment prior to this one. Lessor shall not be required to “shorten the wall” for the Common Area Restrooms since there will no longer be any common area restrooms.

5.   Lessor shall be responsible to cut in and frame the Network Telephone logo window. Lessee shall pay for the cost of the window, glass, and mullion frame around the window.

6.   New Base Rent and New Term.

November 1, 2005-October 31, 2006	$11,928.04 per month
November 1, 2006-October 31, 2007	$12,285.88 per month
November 1, 2007-October 31, 2008	$12,654.46 per month
November 1, 2008-October 31, 2009	$13,034.09 per month
November 1, 2009-October 31, 2010	$13,425.11 per month

7.   If at any time in the future, a governing authority deems that the restroom plan for the adjacent tenant can not be reasonably adjusted to meet the proper building code, then Lessor shall have the right, but not the obligation, to immediately nullify this Amendment for this sole reason and shall rebuild the walls mentioned at its’ cost and the rentals shall adjust accordingly from the time of substantial completion of the common area restroom walls that will be created.

8.   Each party shall indemnify, defend, and hold harmless from and against any and all costs, expenses and liabilities for commissions or other compensation or charges claimed by any broker or agent who claims to have acted on behalf of one party or the other in relation to this Amendment or the Lease.

The monthly rental shall be paid under the same terms and conditions as specified in the Lease Agreement, except as provided herein.

All other terms, provisions and covenants of the Lease Agreement shall remain in full force and effect.

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

“LESSOR”

Phoenix Business Park, LLC

By: /s/ Emanuel S. Fialkow

Title: Manager

“LESSEE”

Network Telephone Inc.

By: /s/ Danyelle Kennedy

Title: CFO and Secretary

EX-10.52

                     Exhibit 10.52

AMENDMENT TO LEASE

THIS Amendment made this 21^st day of December, by and between Phoenix Business Park, LLC, successor Lessor to DA Phoenix, LLC, successor to BSRT Phoenix Business Park LLC, an Illinois Limited Liability Company, as “Lessor” and Network Telephone Inc., successor in interest to LightNetworks, Inc., as “Lessee”.

WITNESSETH:

WHEREAS, the parties hereto made and entered into a Lease Agreement dated January 13, 2000, for premises located at 2700 NE Expressway, Suites B-700-900, Atlanta, Georgia 30345.

WHEREAS, the parties hereto amended the Lease on August 4, 2005;

WHEREAS, the parties wish to modify the Lease Agreement as hereinafter provided.

WHEREAS, the terms Lessor and Landlord shall have the same meaning herein; and the terms Lessee and Tenant shall have the same meanings herein.

NOW THEREFORE, in consideration of the exchange of valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that said lease shall be amended as follows:

1.   New Size of the Premises. The Premises as drawn on Exhibit “A” of this Amendment to Lease shall demonstrate the new Premises. The Premises shall comprise 15,067 rentable square feet. Lessor shall, at its own cost, build the demising wall that will separate the Premises from the adjacent tenant. Lessee shall be responsible for maintaining the Premises as stated in the Lease and the previous Amendments of the Lease.

2.   Lessee’s Maintenance Obligation. Lessee shall be responsible for the maintenance of the newly added portion of the Premises that was formerly known as the Common Area Restrooms, after the construction and completion of the Demising Wall that has been built to separate the Premises from the adjacent tenant’s premises.

3.   HVAC for the Newly Added Portion of the Premises. Currently, the HVAC that services that restrooms located in the newly added portion of the Premises is being serviced by the adjacent tenant. Lessee acknowledges this fact and understands that the adjacent tenant is currently responsible for maintaining this unit and has no current plans to alter this situation. Lessor shall act as a facilitator to attempt to keep the restrooms’ HVAC operational and temperature reasonably maintained. Lessee further acknowledges that it may, at its own expense, at a later date, adjust the ducts and air flow within its restroom areas so that is’ own HVAC system services this area and therefore not the adjacent tenant’s HVAC system (servicing this area).

4.   Lessor shall not be responsible for the cost and construction of any of the work that Lessee wishes to perform to modify its own plans within its’ Premises other than constructing the Demising wall. Furthermore, Lessor shall not be required to install the Network Telephone Wall by the restrooms that was previously mentioned in the Amendment prior to this one. Lessor shall not be required to “shorten the wall” for the Common Area Restrooms since there will no longer be any common area restrooms.

5.   Lessor shall be responsible to cut in and frame the Network Telephone logo window. Lessee shall pay for the cost of the window, glass, and mullion frame around the window.

6.   New Base Rent and New Term.

November 1, 2005-October 31, 2006	$11,928.04 per month
November 1, 2006-October 31, 2007	$12,285.88 per month
November 1, 2007-October 31, 2008	$12,654.46 per month
November 1, 2008-October 31, 2009	$13,034.09 per month
November 1, 2009-October 31, 2010	$13,425.11 per month

7.   If at any time in the future, a governing authority deems that the restroom plan for the adjacent tenant can not be reasonably adjusted to meet the proper building code, then Lessor shall have the right, but not the obligation, to immediately nullify this Amendment for this sole reason and shall rebuild the walls mentioned at its’ cost and the rentals shall adjust accordingly from the time of substantial completion of the common area restroom walls that will be created.

8.   Each party shall indemnify, defend, and hold harmless from and against any and all costs, expenses and liabilities for commissions or other compensation or charges claimed by any broker or agent who claims to have acted on behalf of one party or the other in relation to this Amendment or the Lease.

The monthly rental shall be paid under the same terms and conditions as specified in the Lease Agreement, except as provided herein.

All other terms, provisions and covenants of the Lease Agreement shall remain in full force and effect.

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

“LESSOR”

Phoenix Business Park, LLC

By:/s/_______________________

Title:_______________________

“LESSEE”

Network Telephone Inc.

By:/s/_____________________

Title:_____________________

EX-10.53

            0; Exhibit 10.53

LEASE

Between

                                              American Center LLC,

as Landlord

     And

                                   LDMI Telecommunications, Inc.,

as Tenant

LEASE

THIS LEASE is made and entered into as of January 28, 2003, by and between American Center LLC, a Michigan Limited Liability Company (the "Landlord"), having its principal office at 20500 Civic Center Drive, Suite 3000, Southfield, Michigan 48076, and Tenant named below who agree as follows:

SECTION 1.

                                                                                   BASIC LEASE PROVISIONS

1.01The following basic lease provisions are an integral part of this Lease and are referred to in other Sections of this Lease.

(a)Tenant's name and jurisdiction of formation:

LDMI Telecommunications, Inc. a Michigan corporation

Tenant Social Security/Taxpayer Identification Number:38-2940840

Tenant Standard Industrial Classification (SIC) Code Number: 4813 and 4899

(b)Tenant's Address:

8801 Conant Street

Detroit, MI 48211

After Commencement Date:

27777 Franklin Road - Suite 400

Southfield, MI 48034
 

(c)Manager's NameREDICO Management, Inc.

and Address:20500 Civic Center Drive

                                                  Suite 3000

                                                  Southfield, Michigan 48076

(d)Project Name:        American Center

      Building Name:                    American Center

     Building Address:27777 Franklin Road

                                                    Southfield, MI 48034

(e)Premises:Floor:4^th and 5^th

Suite Number:                                        400 and 500

Square Feet:                                           38,336 rentable / 36,290 usable

(f)Term:

Scheduled Occupancy Date:                                      June 1, 2003

Scheduled Expiration Date of Initial Term:November 30, 2013

Initial Term:                      Ten (10) years Six (6) months

(g)Base Rent:

Date	Monthly Base Rent	Annual Base Rent
6/1/03 - 5/31/04	$66,289.33	$795,471.96
6/1/04 - 5/31/05	$67,886.67	$814,640.04
6/1/05 - 5/31/06	$69,484.00	$833,808.00
6/1/06 - 5/31/07	$72,678.67	$872,144.04
6/1/07 - 5/31/08	$74,276.00	$891,312.00
6/1/08 - 5/31/09	$75,873.33	$910,479.96
6/1/09 - 5/31/10	$77,470.67	$929,648.04
6/1/10 - 5/31/11	$79,068.00	$948,816.00
6/1/11 - 5/31/12	$80,665.33	$967,983.96
6/1/12 - 5/31/13	$82,262.67	$987,152.04
6/1/13 - 11/30/13	$82,262.67	N/A
	Aggregate	$9,445,032.06

(h)Tenant's Proportionate Share:

Tenant’s Proportionate Share of Operating Expenses, Utilities and Taxes:

38,336 Rentable square feet in the Premises divided by

488,465 Rentable square feet in the Building = 7.8483%

Tenant’s Proportionate Share of Office Tower Space Cleaning:

38,336 Rentable square feet in the Premises divided by

442,370 Rentable square feet in the Building = 8.6660 %

(i)  Number of Tenant’s Designated Parking Spaces: Ten (10) at an initial increase of additional rent of $75.00 per space per month.

(j)Security Deposit: NONE

(k)Tenant Improvement Allowance: See Exhibit D

(l)Base Year: 2004

(m)Permitted Use:Office Use

SECTION 2.

THE PREMISES

2.01Landlord, in consideration of the rents to be paid and the covenants and agreements to be performed by Tenant, hereby leases to Tenant the premises set forth in Section 1.01(e) (the "Premises") in the building(s) (the "Building") described in Section 1.01(d), together with the right to use the parking and common areas and facilities which may be furnished from time to time by Landlord (collectively the "Common Areas"), including, without limitation, all common elevators, hallways and stairwells located within the Building, and all common parking facilities, driveways and sidewalks, in common with Landlord and with the tenants and occupants of the Project, their agents, employees, customers, clients and invitees. No later than thirty (30) days after the date of this Lease, Tenant, at its sole cost and expenses, may engage an architect to measure the floor area of the Premises in accordance with the BOMA Standard (as defined below) using a common area load factor of 5.638%, and to certify the results of such measurement to Landlord and Tenant in writing. If Landlord disputes the results, Landlord, Landlord’s architect, if any, Tenant, and Tenant’s architect shall meet and resolve the dispute within five (5) days a the delivery of Landlord’s notice. If the measured Rentable Floor Area of the Premises as accepted by Landlord and Tenant is more than 1% different from that specified in Section 1.1(e), the Annual Base Rental and Monthly Installments of Base Rent and Tenant Improvement Allowance shall each be recomputed, using the square footage figure of the measured Rentable Floor Area of the Premises. Landlord and Tenant agree that in such event, they shall each execute an amendment hereto or, at Landlord’s option, a restatement hereof reflecting the changes in Rentable Floor Area, Proportionate Share, Annual Base Rent, Monthly Installments of Base Rent and Tenant Improvement Allowance. The "BOMA Standard" means the Standard Method for Measuring Floor Areas as published by the Secretariat, Building Owners and Managers Association International (“BOMA”) (ANSI/BOMA Z65-1996), approved June 7, 1996. If Tenant fails to so measure on its own initiative, Tenant agrees that the Premises and the Building shall be deemed to include the number of rentable square feet set forth in Section 1.01(h) and in no event shall Tenant have the right to challenge, demand, request or receive any change in the base rent or other sums due hereunder as a result of any claimed or actual error or omission in the rentable or usable square footage of the Premises, the Building or the Project. However, should Landlord make any alterations or additions to the Building which change the total rentable square footage of the Building or if Tenant relocates within the Building, the calculation in 1.01 (h) will be adjusted in accordance with the BOMA Standard. Landlord reserves the right at any time and from time to time to make alterations or additions to the Building or the Common Areas, and to demolish improvements on and to build additional improvements on the land surrounding the Building, during which time Tenant shall continue to have access to the Building and the Premises and Tenant’s use of the Premises shall not be materially adversely affected, and to add or change the name of the Building from time to time, in its sole discretion without the consent of Tenant and the same shall not be construed as a breach of this Lease. The Building, the other buildings listed in Section 1.01(d), the Common Areas and the land surrounding the Building and the Common Areas are hereinafter collectively referred to as the "Project".

2.02Landlord agrees to construct the improvements to the Premises (the "Tenant Improvements") in accordance with the space plan(s) (as it may be amended by approved change orders, the "Plans"), attached as Exhibit "A". Landlord shall develop and deliver to Tenant construction documents for the construction of the Tenant Improvements, together with a line item construction budget estimating the cost of the Tenant Improvements, all of which shall be subject to Tenant ‘s approval, which approval shall not be unreasonably withheld or delayed. Landlord will use commercially reasonable efforts to develop and submit the final construction documents and the line item budget to Tenant in order for Tenant to meet the deadlines described in Section 2.04 below. Landlord shall do all work and do all things necessary to obtain building permits necessary to build and construct the improvements in accordance with the Plans (including, but not limited to, obtaining necessary building permits, occupancy permits and construction drawings. All material changes from the Plans which Landlord determines are necessary during construction shall be submitted to Tenant for Tenant's approval or rejection. If Tenant fails to notify Landlord of Tenant's approval or rejection of such changes within five (5) business days of receipt thereof, Tenant shall be conclusively deemed to have approved such changes. Landlord's approval of the Plans shall not constitute a representation, warranty or agreement (and Landlord shall have no responsibility or liability for) the completeness or design sufficiency of the Plans or the Tenant Improvements, or the compliance of the Plans or Tenant Improvements with any laws, rules or regulations of any governmental or other authority.

2.03The provisions of Exhibit D, special provisions, shall govern the cost of constructing Tenant Improvements.

2.04Landlord intends to construct the Tenant Improvements and deliver the Premises "ready for occupancy" (as defined below) to Tenant on the Scheduled Occupancy Date set forth in Paragraph 1.01(f). The Premises will be conclusively deemed "ready for occupancy" on the earlier to occur of when: (i) the work to be done under this Paragraph has been substantially completed and after the issuance of a conditional or temporary certificate of occupancy for the Premises by the appropriate government agency within whose jurisdiction the Building is located (provided the conditions set forth in the conditional or temporary certificate of occupancy do not materially interfere with the use of the Premises by Tenant), or (ii) when Tenant takes possession of the Premises (except pursuant to the provisions set forth in Exhibit D, Section D6). The Premises will not be considered unready or incomplete if only minor or insubstantial details of construction, decoration or mechanical adjustments remain to be done within the Premises or Common Areas of the Building, or if only landscaping or exterior trim remains to be done outside the Premises, or if the delay in the availability of the Premises for Tenant's occupancy is caused in whole or in material part by Tenant. By occupying the Premises, Tenant will be deemed to have accepted the Premises and to have acknowledged that they are in the condition called for in this Lease, subject only to "punch list" items (as the term "punch list" is customarily used in the construction industry in the area where the Project is located) identified by Tenant by written notice delivered to Landlord within ten (10) days after the date Landlord tenders possession of the Premises to Tenant in accordance with the terms hereof. If in good faith Landlord is delayed or hindered in construction by any labor dispute, strike, lockout, fire, unavailability of material, severe weather, acts of God, restrictive governmental laws or regulations, riots, insurrection, war or other casualty or events of a similar nature beyond its reasonable control ("Force Majeure"), the date for the delivery of the Premises to Tenant "ready for occupancy" shall be extended for the period of delay caused by the Force Majeure. If Landlord is delayed or hindered in construction as a result of change orders or other requests by, or acts of, Tenant (“Tenant Delay”) the date for the delivery of the Premises to Tenant “ready for occupancy” shall be extended by the number of days of delay caused by Tenant Delay. The Scheduled Occupancy Date as extended as a result of the occurrence of a Force Majeure or Tenant Delay or with the consent of Tenant, is herein referred to as the Occupancy Date. Notwithstanding anything set forth in this Lease to the contrary, in the event the Occupancy Date does not occur on or before the date which is six (6) months after the date (the “Approval Date”) of the approval of the construction documents and line item budget for the Tenant Improvements by Landlord and Tenant, except for delays caused by Force Majeure or Tenant Delays or with the consent of Tenant, then Tenant, as its sole and exclusive remedy, shall have the right to notify Landlord of Tenant’s intent to terminate this Lease by the delivery of written notice thereof to Landlord of such failure and if Landlord shall fail to deliver the Premises to Tenant "ready for occupancy" within ten (10) days after such notice, this Lease shall automatically terminate and neither Landlord nor Tenant shall have any further obligations to the other hereunder. In addition, if Tenant approves a preliminary space plan for the Premises prior to February 1, 2003, and if the Approval Date occurs prior to March 1, 2003, in the event the Occupancy Date does prior to July 1, 2003, except for delays caused by Force Majeure or Tenant Delays or with the consent of Tenant, then Tenant, as its sole and exclusive remedy, shall have the right to receive a rental abatement of one (1) day of Base Rent for each day that elapses between July 1, 2003 and the actual Occupancy Date (which rental abatement shall commence upon the Commencement Date), and the Term shall be extended by a like number of days. If Tenant does not meet the February 1 or March 1 deadlines, then the July 1 date shall be extend for each day that elapses until Tenant preliminary space plan or the Approval date occurs, as the case may be. Otherwise, Landlord shall not be subject to any liability for failure to deliver possession of the Premises to Tenant "ready for occupancy" on the Scheduled Occupancy Date and the validity of the Lease shall not be impaired by such failure.

SECTION 3.

THE TERM

3.01The initial term of this Lease (the "Initial Term or "Term"") will commence (the "Commencement Date") on the earlier of: (i) the date Tenant takes possession of the Premises; or (ii) the Occupancy Date; or, (iii) the date the Occupancy Date would have occurred in the absence of Tenant Delay. Unless sooner terminated or extended in accordance with the terms hereof, the Lease will terminate the number of Lease Years and Months set forth in Paragraph 1.01(f) after the Commencement Date. If the Commencement Date is other than the first day of a calendar month, the first Lease Year shall begin on the first day of the first full calendar month following the Commencement Date. Upon request by Landlord, Tenant will execute a written instrument confirming the Commencement Date and the expiration date of the Initial Term.

SECTION 4.

THE BASE RENT

4.01From and after the Commencement Date, Tenant agrees to pay to Landlord, as minimum net rental for the Initial Term and Option Terms of this Lease, the sum(s) set forth in Paragraph 1.01(g) (the "Base Rent"). The term "Lease Year" as used herein shall be defined to mean a period of twelve (12) consecutive calendar months. The first Lease Year shall begin on the date determined in accordance with Section 3.01. Each succeeding Lease Year shall commence on the anniversary date of the first Lease Year.

4.02Base Rent and other sums due Landlord hereunder shall be paid by Tenant to Landlord in equal monthly installments (except as otherwise provided herein), in advance, without demand and without any setoffs or deductions whatsoever, on the first day of each and every calendar month (the "Rent Day") during the Initial Term and Option Terms, if any, at the office of Manager as set forth in Section 1.01(c), or at such other place as Landlord from time to time may designate in writing. In the event the Commencement Date is other than the first day of a calendar month, the Base Rent for the partial first calendar month of the Initial Term will be prorated on a daily basis based on the number of days in the calendar month and will be paid in addition to the rent provided in Paragraph 4.01 above. Base Rent for such partial calendar month and for the first full calendar month of the first Lease Year shall be paid upon the execution of this Lease by Tenant.

SECTION 5.

LATE CHARGES AND INTEREST

5.01Any rent or other sums payable by Tenant to Landlord under this Lease which are not paid within five (5) business days after they are due will be subject to a late charge of three percent (3%) of the amount due for first occurrence per calendar year that an amount payable is not paid within five (5) business days after it is due, and ten (10%) percent of the amount due for any subsequent occurrence that an amount payable has not been paid within five (5) business days after such amount was due. Such late charges will be due, and payable as additional rent on or before the next Rent Day.

5.02Any rent, late charges or other sums payable by Tenant to Landlord under this Lease not paid within ten (10) business days after the same are due will bear interest at a per annum rate equal to the lowerhigher of: (i) City Bank Prime plus four (4%) percenteighteen (18%) percent per annum, or (ii) the highest rate permitted by laweleven percent (11%) per annum. Such interest will be due and payable as additional rent on or before the next Rent Day, and will accrue from the date that such rent, late charges or other sums are payable under the provisions of this Lease until actually paid by Tenant.

5.03Any default in the payment of rent, late charges or other sums will not be considered cured unless and until the late charges and interest due hereunder are paid by Tenant to Landlord. If Tenant defaults in paying such late charges and/or interest, Landlord will have the same remedies as Landlord would have if Tenant had defaulted in the payment of rent. The obligation hereunder to pay late charges and interest will exist in addition to, and not in the place of, the other default provisions of this Lease.

 SECTION 6.

OPERATING EXPENSES, UTILITIES, AND TAXES

6.01In the event that Operating Expenses for the Project, in any calendar year, exceed the Operating Expenses for the Base Year (as defined in Paragraph 1.01(l)), Tenant shall pay to Landlord, as additional rent, Tenant's Proportionate Share (as defined in Paragraph 1.01(h)) of any such excess. Tenant's obligations hereunder shall be pro-rated for any calendar year in which Tenant is obligated to pay rent for only a portion thereof. For the purposes of this Section, the term "Operating Expenses" shall mean and include those expenses paid or incurred by Landlord for: maintaining, operating, owning, and repairing the Project, providing electricity, steam, water, sewer, fuel, heating, lighting, air conditioning, window cleaning, janitorial service, personal property taxes, insurance (including, but not limited to, fire, extended coverage, liability, worker's compensation, elevator, boiler and machinery, war risk, or any other insurance carried in good faith by Landlord and applicable to the Project); painting, uniforms, management fees, supplies, sundries, sales, or use taxes on supplies or services; wages and salaries of all persons engaged in the operation, maintenance and repair of the Project, and so-called fringe benefits, including social security taxes, unemployment insurance taxes, providing coverage for disability benefits, pension, hospitalization, welfare or retirement plans, or any other similar or like expenses incurred under the provisions of any collective bargaining agreement, or any other similar or like expenses which Landlord pays or incurs to provide benefits for employees so engaged in the operation, maintenance and repair of the Project; the charges of any independent contractor who, under contract with Landlord or its representatives, does any of the work of operating, maintaining or repairing the Project; capital expenditures; legal and accounting expenses including, but not limited to, such expenses as relate to seeking or obtaining reductions in, and refunds of, real estate taxes; or any other expenses or charges, whether or not hereinbefore mentioned, which in accordance with generally accepted accounting and management principles would be considered as an expense of maintaining, operating, owning or repairing the Project.

Notwithstanding anything contained in this Lease to the contrary, if for any reason, including but not limited to imposition of governmental requirements, laws or regulations, or in the event Landlord deems it’s necessary or prudent to expend monies directly or indirectly for the purpose of attempting to reduce energy consumption of the Building and if by generally accepted accounting principles or sound accounting and management principles those funds expended are, or may be treated as capital expenditures, then the calculation of the cost of such capital expenditure that Tenant shall also pay shall equal: (i) its prorata share of the utility charges actually incurred, in accordance with this Lease; plus (ii) its prorata share of the savings generated by the capital expenditures for the applicable period, which savings shall be applied toward amortization of those capital expenditures until such time as the savings from the energy reduction have fully amortized and paid for the capital expenditure.

The term “Operating Expenses” shall not include the following items:

(1)The cost of repairs and general maintenance due to casualty or condemnation paid by proceeds of insurance, by Tenant or by other third parties, and the cost of alterations attributable solely to tenants other than Tenant;

(2)Any ground lease rental or mortgage principal or interest;

(3)Costs, including permit, license and inspection costs, incurred in renovating or otherwise improving, decorating, painting or redecorating vacant space at the Project (except to the extent that such costs are included in connection with the common areas) or to correct defects in the construction of the Project;

(4)Depreciation and amortization, except on materials, tools, supplies and vendor type equipment purchased by Landlord to enable Landlord to supply services Landlord might otherwise contract for with a third party, where such depreciation and amortization would otherwise have been included in the charge for such third party’s services, all as determined in accordance with generally accepted accounting principles (“GAAP”) consistently applied and amortized over the reasonable useful life;

(5)Attorney’s fees and accountants’ fees incurred in connection with disputes with present tenants or other occupants of the Project (not including disputes, the resolution of which would directly benefit all tenants in the Project);

(6)Except as otherwise set forth above, the costs of new (as opposed to replacement) capital improvements; provided, the amortization of the cost of capital improvements which are in replacement of existing capital improvements shall be amortized over the reasonable useful life;

(7)Amounts paid or incurred by Landlord to affiliates in excess of the prevailing market rate for management or services in the building or for supplies or materials at other first class office buildings in the area;

(8)Interest, principal, points and fees on debt or amortization on any mortgage or mortgages or any other debt instrument encumbering this Lease or the Project;

(9)All items and services for which Tenant or any other tenant of the Project reimburses Landlord, including costs of excess or additional services provided to any tenant that are directly billed to such tenant;

(10)Tax penalties incurred as a result of Landlord’s negligence or inability or unwillingness to make payments when due;

(11)Landlord’s general corporate overhead and general administrative expenses other than those permitted in this Lease;

(12)Any political or charitable contributions made by Landlord;

(13)Any amount for which Landlord receives reimbursement from others, including without limitation, from insurers;

(14)Marketing expenses, Tenant Improvements and leasing commission incurred in leasing office or other space in the Project;

(15)Expenses incurred in connection with services above Building Standards of the type that are not provided to Tenant but which are provided to other tenant(s) of the Building of Project;

(16)Lights and power costs for individual tenant premises.

(17)Collector quality art work but Operating Expenses will include reasonable and customary decorations.

6.02If the Project is not fully rented during all or a portion of any year, then Landlord may electshall to make an appropriate adjustment of the Operating Expenses and Real Estate Taxes (as defined below) for such year and for the Base Year employing sound accounting and management principles, to determine the amount of Operating Expenses and Real Estate Taxes that would have been paid or incurred by Landlord had the Project been fully rented; and the amount so determined shall be deemed to have been the amount of Operating Expenses and Real Estate Taxes for such year. If any expenses relating to the Project, though paid in one year, relate to more than one calendar year, at the option of Landlordshall such expense may be proportionately allocated among such related calendar years. In addition, in the event any Operating Expense or Real Estate Tax applies to only some portion of the Project or is partially allocable to other buildings or projects, Landlord mayshall allocate such expense among such buildings and projects in accordance with sound accounting and management principles to determine the amount of Operating Expenses and Real Estate Taxes for the Project and the Building.

6.03In the event that Real Estate Taxes (as hereinafter defined) for the Project, in any calendar year, exceed the Real Estate Taxes for the Base Year, Tenant shall pay to Landlord, as additional rent, Tenant's Proportionate Share of any such excess over and above the Base Real Estate Taxes (as hereinafter defined). The "Base Real Estate Taxes" shall be the Real Estate Taxes shown on the bills for which the "due date" occurs in the Base Year. "Real Estate Taxes" as used herein shall mean real estate taxes, assessments (general, special, ordinary or extraordinary) sewer rents, rates and charges, taxes based upon the receipt of rent, and any other federal, state or local charge (general, special, ordinary or extraordinary) which may now or hereafter be imposed, levied or assessed against the Project or any part thereof, or on any building or improvements at any time situated thereon. In the event the State of Michigan or any political subdivision thereof having taxing authority shall modify, repeal or abolish the ad valorem tax on real property, or impose a tax or assessment of any kind or nature upon, against, or with respect to the Project or the rents payable by Tenant or on the income derived from the Project, or with respect to Landlord's ownership interest in the Project, which tax is assessed or imposed by way of substitution for or in addition to all or any part of the Real Estate Taxes, then such tax or assessment shall be included within the definitions of "Real Estate Taxes"; provided, however, nothing herein contained shall impose an obligation on Tenant to pay the general income tax or Michigan Single Business Tax liabilities of Landlord, except to the extent such a tax is being used to fund governmental functions presently or previously funded by ad valorem taxes on real property.

6.04At any time and from time to time, Landlord may reasonably estimate the amount by which current Real Estate Taxes and Operating Expenses are expected to exceed the Real Estate Taxes and Operating Expenses for the Base Year (the "Estimated Excess Expenses"). Tenant shall pay its Proportionate Share of the Estimated Excess Expenses by depositing with Landlord on each Rent Day during the term hereof an amount equal to one-twelfth (1/12) of its annual share of the Estimated Excess Expenses. Landlord shall deliver to Tenant, within a reasonable period of time after the close of each calendar year, an annual statement indicating the amount by which the Real Estate Taxes and Operating Expenses actually incurred in that calendar year exceed the Real Estate Taxes and Operating Expenses for the Base Year (the "Actual Excess Expenses"). In the event that the Actual Excess Expenses exceed the Estimated Excess Expenses, Tenant shall pay Tenant's Proportionate Share of the difference to Landlord within fifteen (15) days of delivery of the annual statement. In the event that Estimated Excess Expenses exceed Actual Excess Expenses, then at Landlord's option Tenant shall either be reimbursed to the extent that Tenant's payments toward Tenant's share of the Estimated Excess Expenses exceed Tenant's Proportionate Share of the Actual Excess Expenses, or Tenant shall be granted a corresponding credit against the Base Rent or other sums next due Landlord hereunder or refunded to the Tenant within thirty (30) days after the end of the Lease Term.

6.05Tenant shall be responsible for and pay before delinquent all municipal, county, and state taxes assessed, levied or imposed during the term of this Lease, and all extensions thereof, upon the leasehold interest and all furniture, fixtures, machinery, equipment, apparatus, systems and all other personal property of any kind whatsoever located at, placed in or used in connection with the Premises.

6.06Landlord agrees with Tenant that Landlord will furnish heat and air conditioning during normal business hours (8:00 a.m. to 6:00 p.m. Monday through Friday, and Saturday 9:00 a.m. to 2:00 p.m.,excluding Building holidays). Landlord shall provide adequate thermal environmental comfort and air velocity limits for the leased premises in accordance with the standards of the American Society of Heating, Refrigeration and Air-Conditioning Engineers, Inc. (“ASHRAE”), in ASHRAE-55. Fresh air levels shall be maintained in accordance with current ASHRAE-62 Standards, as amended (ventilation for acceptable air quality),usual and customary janitorial services, as set forth in Exhibit "C", and provide water and sewer service to the Premises and hot and cold water for ordinary lavatory purposes in the common area restrooms. However, if Tenant uses or consumes water for any other purpose or in unusual quantities (of which fact Landlord shall be the sole judge) Landlord may install a water meter at Tenant's expense which Tenant shall thereafter maintain at Tenant's expense in good working order and repair, to register such water consumption. Tenant shall pay for the quantity of water shown on said meter, together with the sewer rents, debt service and other charges made by the local utilities for water and sewer service, as additional rent, at the secondary rate per gallon (general service rate) established by the applicable governmental authority or the applicable utility company providing the water. Whenever machines or equipment which generate heat are used in the Premises which affect the temperature otherwise maintained by the air-conditioning system, Landlord reserves the right after seven (7) days prior notice to install supplementary air-conditioning equipment in the Premises, and the cost thereof, and the expense of operation and maintenance thereof, shall be paid by Tenant to Landlord. Although Landlord will provide air-conditioning and/or heat upon the prior request of Tenant in accordance with Building practices for hours other than regular business hours, Tenant will pay Landlord's charges for providing such service. Said charges shall include a cost equal to the cost to operate the equipment for Tenant's expanded business hours and days, and Landlord's maintenance, equipment amortization and other appropriate charges which Landlord determines are attributable to operating the equipment for periods in excess of the normal business hours described above. Currently the charges for the after hours HVAC are $165.00 per hour for one full floor, $80.00 per hour for one-half floor, and the charges for fans only are $60.00 per hour for one floor, $30.00 per hour for one-half floor. All such charges are subject to change at Landlord’s sole discretion, based upon increases in the actual or reasonably estimated cost thereof.

6.07Tenant shall pay all charges made against the Premises for electricity used upon or furnished to the Premises as and when due during the continuance of this Lease. To the extent electricity is not separately metered for the Premises, Landlord shall make a determination of Tenant's usage of electricity supplied to the Building, and Tenant agrees to pay for such electricity within thirty (30) days after request therefor from Landlord. Whether or not metered, Tenant shall pay for the electricity at the secondary rate (general service rate) established by the applicable governmental authority or the applicable utility company providing the electricity. Tenant shall also pay for fluorescent or other electric light bulbs or tubes and electric equipment used in the leased Premises.

Notwithstanding anything to the contrary contained in this Section 6.07, the Premises, pursuant to the Plans, is metered separately for electricity.

SECTION 7.

USE OF PREMISES

7.01Tenant shall occupy and use the Premises during the Term for the purposes set forth in Section 1.01(m) only, and for no other purpose without the prior written consent of Landlord which consent shall not be unreasonably withheld or delayed. Tenant agrees that it will not use or permit any person to use the Premises or any part thereof for any use or purpose in violation of the laws of the United States, the laws, ordinances or other regulations of the State or municipality in which the Premises are located, or of any other lawful authorities, or any building and use restrictions which , now or hereafter affecting the Premises or any part thereof.

7.02Tenant will not do or permit any act or thing to be done in or to the Premises or the Project which could reasonably be expected to will invalidate or be in conflict with any terms or conditions required to be contained in any property or casualty insurance policy authorized to be issued in the State of Michigan or any term or condition of the Insurance Services Office’s (ISO) Commercial Property Insurance and/or Commercial General Liability Insurance Conditions or any different or additional terms and conditions of any insurance policy in effect on the Premises or the Project from time to time (collectively the “Building Insurance”) as notified by Landlord, nor shall Tenant do nor permit any other act or thing to be done in or to the Premises or the Project which could reasonably be expected to shall or might subject Landlord to any liability or responsibility to any person or for property damage, nor shall Tenant use the Premises or keep anything on or in the Project except as now or hereafter permitted by the fire regulations, the fire department or zoning, health, safety, land use or other regulations. Tenant, at Tenant’s sole cost and expense, shall comply with all requirements and recommendations for the Premises set forth by any property or casualty insurer or reinsurer providing coverage for the Premises or the Project or by any person or entity engaged by Landlord or Manager to perform any loss control, analysis or assessment for the Premises or the Project. Tenant shall not do or permit anything to be done in or upon the Premises or the Project or bring or keep anything therein or use the Premises or the Project in a manner which increases the rate of premium for any Building Insurance or any property or equipment located therein over the rate in effect at the commencement of the Term of this Lease. In addition, Tenant agrees to pay Landlord the amount of any increase in premiums for insurance which may be charged during the term of this Lease resulting from the act or omissions of Tenant or the character or nature of its occupancy or use of the Project or the Premises, whether or not Landlord has consented to the same. Any scheduled or “make-up” of any insurance rate for the Premises, the Building or the Project issued by any insurance company establishing insurance premium rates for the Premises, Building or the Project shall be prima facie evidence of the facts therein stated and of the several items and charges in the insurance premium rates then applicable to the Premises, the Building or the Project. Tenant shall give Landlord notice promptly after Tenant learns of any accident, emergency, or occurrence for which Landlord is or may be liable, or any fire or other casualty or damage or defects to the Premises, the Building or the Project which Landlord is or may be responsible or which constitutes the property of Landlord.

7.03Tenant shall not perform acts or carry on any activities or engage in any practices which may injure the Premises or any portion of the Project or which may be a nuisance or menace to other persons on or in the Project. Tenant shall pay all costs, expenses, fines, penalties, or damages which may be imposed upon Landlord by reason of Tenant's failure to comply with the provisions of this Section.

7.04Tenant will not place any load upon any floor of the Premises exceeding the floor load per square foot area which it was designed to carry and which is allowed by law. Landlord reserves the right to reasonably prescribe the weight and position of all safes, business machines and mechanical equipment. Such items shall be placed and maintained by Tenant, at Tenant's expense, in settings sufficient in Landlord's judgment, to absorb and prevent vibration, noise and annoyance. If at any time any windows of the Premises are temporarily or permanently closed, darkened or covered in connection with any work performed in the Premises or elsewhere on the Project for any reason whatsoever, including Landlord’s own acts, Landlord shall not be liable for any damage Tenant may sustain thereby, and the same shall not be considered a default under this Lease and Tenant shall not be entitled to any compensation therefore nor abatement of any Base Rent or any other sums due hereunder, nor shall the same release Tenant from its obligations hereunder nor constitute an eviction, construction, actual or otherwise.

7.05During the term hereof, and consistent with janitorial services provided by Landlord, Tenant will keep the Premises in a clean and wholesome condition, will use the same in a careful and proper manner, and generally will comply with all laws, ordinances, orders and regulations affecting the Premises and the cleanliness, safety, occupancy and use thereof. Tenant will not commit waste in or on the Premises, and will use the Premises in accordance with the Rules and Regulations of the Project, as set forth in Exhibit B, attached hereto and made a part hereof.

7.06As between Landlord and Tenant, after the completion of the Tenant Improvements by Landlord Tenant shall be responsible for any alterations, changes or improvements to the Premises which may be necessary in order for the Premises and Tenant's use thereof to be in compliance with the Americans with Disabilities Act of 1990 and its state and local counterparts or equivalents (the "Disabilities Act") during the term of this Lease.

7.07For the purposes of this Lease, the term "Hazardous Materials" shall mean, collectively, (i) any biological materials, chemicals, materials, substances or wastes which are now or hereafter become defined as or included in the definition of "hazardous substances", "hazardous wastes", "hazardous materials", "extremely hazardous wastes", "restricted hazardous wastes", "toxic substances", "toxic pollutants", or words of similar import, under any applicable Environmental Law (as defined below) and (ii) any petroleum or petroleum products and asbestos in any form that is or could become friable.

7.08For the purposes of this Lease, the term "Environmental Laws" shall mean all federal, state, and local laws, statutes, ordinances, regulations, criteria, guidelines and rules of common law now or hereafter in effect, and in each case as amended, and any judicial or administrative interpretation thereof, including, without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases or Hazardous Materials or otherwise related to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials. Environmental Laws include but are not limited to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended; the Resource Conservation and Recovery Act, as amended; the Clean Air Act, as amended; the Clean Water Act, as amended; and their state and local counterparts or equivalents.

7.09Tenant shall not (either with or without negligence) cause or permit the escape, disposal or release of any Hazardous Materials. Tenant shall not allow the storage or use of such Hazardous Materials on the Premises or the Project in any manner prohibited by the Environmental Laws or by the highest standards prevailing in the industry for the storage and use of such Hazardous Materials, nor allow to be brought into the Premises or the Project any such Hazardous Materials except to use in the ordinary course of Tenant’s business, and then only after written notice is given to Landlord of the identity of such Hazardous Materials and Landlord consents in writing to the use of such materials. Landlord shall have the right at any times during the term of this Lease to perform assessments of the environmental condition of the Premises and of Tenant’s compliance with this Section 7.09. If at the time that Landlord performs or causes to be performed any such assessment and such assessment or inspection proves that Tenant as a result of the acts and/or omissions of Tenant, Tenant’s employees, invitees, licensees, servants, agents, contractors or designees has caused any (i) non-compliance with any Environmental Law or the highest standards prevailing in the industry for the storage and usage of Hazardous Materials; (ii) damage; or (iii) contamination, or that Tenant is otherwise in default under this Section 7.09 then Tenant shall promptly reimburse Landlord for the cost of the assessment. In connection with any such assessment, Landlord shall have the right to enter and inspect the Premises and perform tests (including physically invasive tests), with twenty four (24) hour prior notice, except in the case of emergency and provided such tests are performed in a manner that minimizes disruption to Tenant. Tenant will cooperate with Landlord in connection with any such assessment by, among other things, responding to inquires and providing relevant documentation and records. Tenant will accept custody and arrange for the disposal of any Hazardous Materials that are required to be disposed of as a result of those tests. Landlord shall have no liability or responsibility to Tenant with respect to any such assessment or test or with respect to results of any such assessment or test. If during the period covered by Tenant’s liability and obligation under this Lease including Section 7.11 any lender or governmental agency shall ever require testing to ascertain whether or not there has been any release of Hazardous Materials, then the reasonable costs thereof shall be reimbursed by Tenant to Landlord upon demand as additional charges if such requirement applies to the Premises or Tenant's activities on the Project and provided such testing indicates that there has been a release of any Hazardous Material and such release is a result of the acts and/or omissions of Tenant, Tenant’s employees, invitees, licensees, servants, agents, contractors or designees. If any inspection indicates any (i) non-compliance with any Environmental Law or the highest standards generally prevailing in the industry for the storage and use of Hazardous Materials and such non-compliance is the result of the actions or omissions of Tenant, Tenant’s employees, invitees, customers, visitors, licensees, servants, agents, contractors of designees; (ii) damage resulting from the acts and/or omissions of Tenant, Tenant’s employees, invitees, licensees, servants, agents contractors or designees; or (iii) contamination resulting from the acts and/or omissions of Tenant, Tenant’s employees, invitees, licensees, servants, agents, contractors or designees, Tenant shall, at its cost and expense, remedy such non-compliance, damage or contamination. In addition, Tenant shall execute affidavits, representations and the like from time to time at Landlord’s request concerning Tenant’s best knowledge and belief regarding the presence of Hazardous Materials on the Premises. Irrespective of whether Landlord elects to inspect the Premises, if Hazardous Materials are found on or about the Premises, Landlord shall have no responsibility, liability or obligation whatsoever with respect to the existence, removal or transportation of the Hazardous Material or the restoration and remediation of the Premises. Tenant’s obligations under this Section 7.09 with respect to any environmental condition shall not be applicable to the extent that such environmental condition (a) exists prior to the commencement of the initial term of the Lease, or (b) results from (i) the actions or omission of Landlord either before the commencement of this Lease, during the term hereof or after the termination of this Lease, or (ii) the actions or omissions of any preceding or succeeding tenant or owner of the Premises, or (iii) the actions or omissions of any person or entity who or which is not a subtenant, employee, agent, invitee, customer, visitor, licensee, contractor or designee of Tenant. Further, Landlord shall have the right to require Tenant to immediately terminate the conduct of any activity in violation of the Environmental Law, the highest standards prevailing in the industry for the storage and use of Hazardous Materials or, if none exist, the standards determined by Landlord.

7.10Tenant further agrees that it will not, by either action or inaction, invite or otherwise cause agents or representatives of any federal, state or local governmental agency to enter onto the Premises or the Project and/or investigate the Premises or the Project. This agreement does not allow Tenant to obstruct any such entry or investigation and the mere fact of a regulatory agency entry or investigation without Tenant's involvement either by action or inaction shall not be deemed a breach of this lease. Nothing set forth in this paragraph shall prohibit Tenant from reporting any fact or condition which Tenant has been advised it has a legal obligation to report provided Tenant first notifies Landlord of such fact or condition and Tenant's intention to report the fact or condition.

7.11After the completion of the construction of the Tenant Improvements by Landlord Tenant shall indemnify, hold harmless and defend Landlord, its licensees, servants, agents, employees and contractors from any loss, damage, claim, liability or expense (including reasonable attorney’s fees) arising out of the failure of the Premises or Tenant’s use thereof to be in compliance with Disabilities Act. Tenant shall not be required to indemnify, hold harmless or defend Landlord for the failure, if any, of the common areasCommon Areas (including the parking areas, ramps and walkways) to comply with the Disabilities Act. Tenant shall indemnify, hold harmless and defend Landlord, its licensees, servants, agents, employees and contractors for any loss, damage, claim, liability or expense (including reasonable attorney’s fees) arising out of any violation of any Environmental Law(s) by Tenant or its responsible parties (as described in Section 7.09 above) on the Premises or the Project which occurs after the date hereof. Tenant shall notify Landlord as soon as possible after Tenant learns of the existence of or potential for any such loss, damage, claim, liability or expense arising out of any violation or claimed suspected violation of any Environmental Law(s) or the Disabilities Act. In the event Tenant refuses to address such violation or suspected violation within five (5) days of such notice from Landlord, and, thereafter, to investigate such violation or suspected violation, and promptly commence and diligently pursue any action required to address such violation or suspected violation, Landlord shall have the right, in addition to every other right and remedy it may have hereunder, to terminate this Lease by giving ten (10) days prior written notice thereof to Tenant, and upon the expiration of such ten (10) days, this Lease shall terminate. The covenants set forth herein shall survive the expiration or earlier termination of this Lease.

SECTION 8.

INSURANCE

8.01Commencing on the Commencement Date, Tenant shall, during the Term of this Lease, maintain in full force and effect policies of commercial general liability insurance (including premises, operation, bodily injury, personal injury, death, independent contractors, products and completed operations, broad form contractual liability and broad form property damage coverage), in a combined single limit amount of not less than Five Million Dollars ($5,000,000), per occurrence (exclusive of defense costs), against all claims, demands or actions with respect to damage, injury or death made by or on behalf of any person or entity, arising from or relating to the conduct and operation of Tenant’s business in, on or about the Premises (which shall include Tenant’s signs, if any), or arising from or related to any act or omission of Tenant or of Tenant’s principals, officers, agents, contractors, servants, employees, licensees and invitees. Whenever, in Landlord’s reasonable judgment, good business practice and changing conditions indicate a need for additional amounts or different types of insurance coverage due to the conduct and operation of Tenant’s business in, on or about the Premises, or arising from or related to any act or omission of Tenant or of Tenant’s principals, officers, agents, contractors, servants, employees, licensees and invitees which may increase the risk of liability, Tenant shall, within ten (10) days after Landlord’s request, obtain such insurance coverage, at Tenant’s sole cost and expense.

8.02Commencing on the Commencement Date, Tenant shall obtain and maintain policies of workers' compensation and employers' liability insurance which shall provide for statutory workers' compensation benefits and employers' liability limits of not less than that required by law.

8.03Commencing on the Commencement Date, Tenant shall obtain and maintain insurance protecting and indemnifying Tenant against any and all damage to or loss of any personal property, fixtures, leasehold improvements, alterations, decorations, installations, repairs, additions, replacements or other physical changes in or about the Premises, including but not limited to the Tenant Improvements, and all claims and liabilities relating thereto, for their full replacement value without deduction or depreciation. In addition, if Tenant shall install or maintain one or more pressure vessels to serve Tenant’s operations on the Premises, Tenant shall, at Tenant’s sole cost and expense, obtain, maintain and keep in full force and effect appropriate boiler or other insurance coverage therefore in an amount not less than One Million and No/100 Dollars ($1,000,000.00) (it being understood and agreed, however, that the foregoing shall not be deemed a consent by Landlord to the installation and/or maintenance of any such pressure vessels in the Premises, which installation and/or maintenance shall at all times be subject to the prior written consent of Landlord). All insurance policies required pursuant to this Paragraph 8.03 shall be written on a so-called "all risk" form and shall be carried in sufficient amount so as to avoid the imposition of any co-insurance penalty in the event of a loss. Such insurance shall provide the broadest coverage then available, including coverage for loss of profits or business income or reimbursement for extra expense incurred as the result of damage or destruction to all or a part of the Premises.

8.04All insurance policies which Tenant shall be required to maintain pursuant to this Section 8 shall, in addition to any of the foregoing: be written by insurers which have an A.M. Best & Company rating of "A", Class "X", or better and who are authorized to write such business in the State of Michigan and are otherwise satisfactory to Landlord; be written as “occurrence” policy; be written as primary policy coverage and not contributing with or in excess of any coverage which Landlord or any ground or building lessor may carry; name Landlord, the Manager, and Landlord's mortgagee and ground or building lessor, if any, as additional insureds; be endorsed to provide that they shall not be cancelled, failed to be renewed, diminished or materially altered for any reason except on thirty (30) days prior written notice to Landlord and the other additional insureds; and provide coverage to Landlord, Landlord's property management company, and Landlord's mortgagee whether or not the event or occurrence giving rise to the claim is alleged to have been caused in whole or in part by the acts or negligence of Landlord, Landlord's property management company, or Landlord's mortgagee. At Landlord's option, either the original policies or certified duplicate copies of the original policies will be delivered by Tenant to Landlord at least ten (10) days prior to their effective date thereof, together with receipts evidencing payment of the premiums therefor. Tenant will deliver certificates of renewal for such policies to Landlord not less than thirty (30) days prior to the expiration dates thereof. No such policy shall contain a deductible or self insured retention greater than $5,000.00$25,000.00 per claim, nor shall any such policy be the subject of an indemnification or other arrangement by which any insured is obligated to repay any insurer with respect to loss occurring on the Premises.

8.05If Tenant fails to provide all or any of the insurance required by this Section 8 or subsequently fails to maintain such insurance in accordance with the requirements hereof, then after giving one (1)three (3) business days written notice to Tenant, Landlord may (but will not be required to) procure or renew such insurance to protect its own interests only, and any amounts paid by Landlord for such insurance will be additional rental due and payable on or before the next Rent Day, together with late charges and interest as provided in Section 5 hereof. Landlord and Tenant agree that no insurance acquired by Landlord pursuant hereto shall cover any interest or liability of Tenant and any procurement by Landlord of any such insurance or the payment of any such premiums shall not be deemed to waive or release the default of Tenant with respect thereto.

SECTION 9.

DAMAGE BY FIRE OR OTHER CASUALTY

9.01It is understood and agreed that if, during the Term hereof, the Project and/or the Premises shall be damaged or destroyed in whole or in part by fire or other casualty, without the fault or neglect of Tenant, Tenant's servants, employees, agents, visitors, invitees or licensees, which damage is covered by insurance carried pursuant to Section 8 above, unless Landlord elects to terminate this Lease as provided in Paragraph 9.02 below, Landlord shall cause the Project and/or the Premises to be repaired and restored to good, tenantable condition with reasonable dispatch at its expense; provided, however, Landlord shall not be obligated to expend for such repair or restoration an amount in excess of insurance proceeds made available to Landlord for such purpose, if any. Landlord's obligation hereunder shall be limited to repairing or restoring the Project and/or the Premises to substantially the same condition that existed prior to such damage or destruction.

9.02If (i) more than fifty (50%) percent of the floor area of the Premises shall be damaged or destroyed, (ii) more than twenty-five (25%) percent of the Project shall be damaged or destroyed, or (iii) any material damage or destruction occurs to the Premises or the Project during the last twelve (12) months of the Initial Term or Option Term, as the case may be, then Landlord may elect to either terminate this Lease or repair and rebuild the Premises. In order to terminate this lease pursuant to this Paragraph, Landlord must give written notice to Tenant of its election to so terminate, such notice to be given within ninety (90) days after the occurrence of damage or destruction fitting the above description, and thereupon the term of this Lease shall expire by lapse of time ten (10) days after such notice is given and Tenant shall vacate the Premises and surrender the same to Landlord, without prejudice, however, to Landlord's rights and remedies against Tenant under the Lease provisions in effect prior to such termination, and any rent owing shall be paid up to such date and any payments of rent made by Tenant which were on account of any period subsequent to such date shall be returned to Tenant. Tenant acknowledges that Landlord will not carry insurance on Tenant's furniture and/or furnishings or any fixtures or equipment, improvements, or appurtenances removable by Tenant and agrees that Landlord will not be obligated to repair any damage thereto or replace the same.

9.03Tenant shall give immediate notice to Landlord in case of fire or accident at the Premises. If Landlord repairs or restores the Premises as provided in Paragraph 9.01 above, Tenant shall promptly repair or replace its trade fixtures, furnishings, equipment, personal property and leasehold improvements in a manner and to a condition equal to that substantially existing prior to the occurrence of such damage or destruction.

9.04If the casualty, or the repairing or rebuilding of the Premises pursuant to Paragraphs 9.01 and 9.02 above shall render the Premises untenantable, in whole or in part, a proportionate abatement of the rent due hereunder shall be allowed from the date when the damage occurred until the date Landlord completes the repairs on the Premises or, in the event Landlord elects to terminate this Lease, until the date of termination. Such abatement shall be computed on the basis of the ratio of the floor area of the Premises rendered untenantable to the entire floor area of the Premises. If Tenant cannot conduct its business in a reasonable manner in the floor area still remaining tenantable after the casualty, or the repairing or rebuilding of the Premises, then the entire Premises shall be deemed untenantable.

9.05Tenant shall not entrust any property to any employee, contractor, licensee, or invitee of Landlord. Any person to whom any property is entrusted by or on behalf of Tenant in violation of foregoing prohibition shall be deemed to be acting as Tenant’s agent with respect to such property and neither Landlord nor its agents shall be liable for any damage to property of Tenant or of others entrusted to employees of the Project, nor shall Landlord or its agents be liable for any such damage caused by other tenants or persons in, upon or about the Project or caused by operations or construction of any private, public or quasi-public work.

9.06Within fifteen (15) days of any damage or destruction to the Premises described in Section 9.01, Tenant shall provide written notice to Landlord requesting an estimate of the time required to substantially repair or restore the Premises. If Tenant fails to request said estimate by providing written notice to Landlord within such time period, Tenant’s right to terminate this Lease under this paragraph shall be deemed waived. Within a reasonable time of receipt of Tenant’s notice, Landlord shall provide a written notice to Tenant (the “Landlord Casualty Repair Estimate Notice”) indicating the scheduled completion date to repair or restore the Premises “ready for occupancy” as defined in Section 2.04 to substantially the same condition it existed immediately prior to the damage or destruction. If the scheduled completion date in the Landlord Casualty Repair Estimate Notice is more than one-hundred eighty (180) days after the date of the damage or destruction or more than sixty (60) days during the last twelve (12) months of the Term of the Lease (in each case, the “Restoration Period”), then Tenant may elect to terminate this Lease. In order to terminate this Lease pursuant to this paragraph, Tenant must give written notice to Landlord of its election to so terminate, such notice (the “Tenant Casualty Termination Notice”) shall be given within thirty (30) days of the date the Landlord Casualty Repair Estimate Notice and thereupon the Term of this Lease shall expire by lapse of time thirty (30) days after Tenant Casualty Termination Notice is given and Tenant shall vacate the Premises and surrender the same to Landlord, without prejudice, however, to Landlord’s rights and remedies against Tenant under the Lease provisions in effect prior to such termination, and any rent owing shall be paid up to such date and any payments of rent made by Tenant which were on account of any period subsequent to such date shall be returned to Tenant.

 SECTION 10.

REPAIRS, RENOVATIONS AND ALTERATIONS

10.01Tenant shall, at Tenant's sole expense, keep the interior of the Premises and the fixtures therein in good condition, reasonable wear and tear excepted, and will also repair all damage or injury to the Premises and fixtures resulting from the carelessness, omission, neglect or other action or inaction of Tenant, its servants, employees, agents, visitors, invitees or licensees. Such damage shall be promptly repaired or damaged items replaced by Tenant, after ten (10) days written notice from Landlord and at Tenant’s at its sole expense, to the reasonable satisfaction of Landlord. If Tenant fails to make such repairs or replacements, Landlord may do so and the cost thereof shall become collectible as additional rent hereunder and shall be paid by Tenant within ten (10) days after presentation of statement therefor. Landlord shall maintain, and shall make all necessary repairs and replacements to, the Building, the heating, air conditioning and electrical systems located therein, and the Common Areas, provided that at Landlord’s option, (i) Tenant shall make all repairs and replacements arising from its act, neglect or default and that of its agents, servants, employees, invitees and licensees, or (ii) Landlord may make such repairs and replacements and the costs thereof shall become collectable as additional rent hereunder and shall be paid by Tenant within five (5) days after presentation of a statement therefore. Tenant shall keep and maintain the Premises in a clean, sanitary and safe condition, and shall keep and maintain the interior of the Premises in full compliance with the laws of the United States and State of Michigan, all directions, rules and regulations of any health officer, fire marshal, building inspector, or other proper official of any governmental agency having jurisdiction over the Premises, and the requirements of Landlord's mortgagee, all at Tenant's full cost and expense, and Tenant shall comply with all requirements of law, ordinance and regulation affecting the Premises. Tenant shall make all non-structural repairs to the Premises as and when needed to preserve them in good order and condition. All the aforesaid repairs shall be of quality or class equal to the original construction. Tenant shall give Landlord prompt written notice of any defective condition in any plumbing, heating system or electrical lines located in, servicing or passing through the Premises and following such notice, Landlord shall remedy the condition with due diligence but at the expense of Tenant if repairs are necessitated by damage or injury attributable to Tenant, Tenant's servants, agents, employees, invitees or licensees. There shall be no allowance to Tenant for diminutions of rental value and no liability on the part of Landlord by reason of inconvenience, annoyance or injury to business arising from Landlord, Tenant, or others making or failing to make any repairs, alterations, additions, or improvements in or to any portion of the Building or the Premises or in and to the fixtures, appurtenances or equipment thereof. The provisions of this Section 10 with respect to the making of repairs shall not apply in the case of fire or other casualty which are dealt with in Section 9 hereof.

10.02Tenant shall not make any renovations, alterations, additions or improvements to the Premises without Landlord's prior written consent which consent shall not be unreasonably withheld. All plans and specifications for such renovations, alterations, additions or improvements shall be approved by Landlord prior to commencement of any work. Landlord's approval of the plans, specifications and working drawings for Tenant's alterations shall create no responsibility or liability on the part of Landlord for their completeness, design sufficiency, or compliance with laws, rules and regulations of governmental agencies or authorities, including but not limited to the Americans with Disabilities Act, as amended. Notwithstanding the foregoing, Tenant may make cosmetic alterations to the Premises (i.e., painting, wall papering, new carpeting and the like) costing $25,000.00 or less with notice but without Landlord’s consent provided such alterations do no effect the mechanical, electrical, plumbing, communication, fire, or safety systems of the Building. All renovations, alterations, additions or improvements made by Tenant upon the Premises, except for movable office furniture and movable trade fixtures installed at the expense of Tenant, shall be and shall remain the property of Landlord, and shall be surrendered with the Premises at the termination of this Lease, without molestation or injury. In addition, Landlord may designate by written notice to Tenant the alterations, additions, improvements and fixtures made by or for Tenant, which shall be removed by Tenant at the expiration or termination of the Lease and Tenant shall promptly remove the same and repair any damage to the Premises caused by such removal. Tenant shall not remove, nor be obligated to remove, the Tenant Improvements shown on the Plans.

10.03Tenant agrees that all renovations, alterations, additions and improvements made by it pursuant to Paragraph 10.02, notwithstanding Landlord's approval thereof, shall be done in a good and workmanlike manner and in conformity with all guidelines provided by Landlord and all laws, ordinances and regulations of all public authorities having jurisdiction, that materials of good quality shall be employed therein, that the structure of the Premises shall not be impaired thereby, that the work shall be carried out and completed in an orderly, clean and safe manner, and that, while the work is being performed, Tenant shall maintain builder's risk insurance coverage for any improvements in excess of $25,000.00 with Landlord as a named insured, which insurance coverage shall meet the criteria set forth in Section 8.

SECTION 11.

LIENS

11.01Tenant will keep the Premises free of liens of any sort related to the acts, omissions or contracts of Tenant, and will hold Landlord harmless from any such liens which may be placed on the Premises except those attributable to debts incurred by Landlord. In the event a construction or other lien shall be filed against the Building, the Premises or Tenant's interest therein as a result of any work undertaken by Tenant or its employees, agents, contractors or subcontractors, or as a result of any repairs or alterations made by or any other act of Tenant or its employees, agents, contractors or subcontractors, Tenant shall, within two (2)thirty (30 days after receiving notice of such lien, discharge such lien either by payment of the indebtedness due the lien claimant or by filing a bond (as provided by statute) as security for the discharge of such lien. In the event Tenant shall fail to discharge such lien by payment or bond, after notice, Landlord shall have the right to procure such discharge by filing such bond, and Tenant shall pay the cost of such bond to Landlord as additional rent upon the next Rent Day in accordance with Section 5 hereof.

SECTION 12.

EMINENT DOMAIN

12.01If all of the Premises are condemned or taken in any manner (including without limitation any conveyance in lieu thereof) for any public or quasi-public use, the term of this Lease shall cease and terminate as of the date title is vested in the condemning authority. If (i) more than fifty (50%) percent of the floor area of the Premises shall be condemned or taken in any manner, or (ii) more than twenty-five (25%) percent of the Building shall be condemned or taken, or (iii) any material condemnation or taking occurs during the last twelve (12) months of the Initial Term or Option Term, as the case may be, or (iv) such a portion of the parking area on the Land is so condemned or taken that the number of parking spaces remaining are less than the number required by applicable zoning laws or other building code for the Building, then Landlord may elect to terminate this Lease. In order to terminate this Lease pursuant to this Paragraph, Landlord must give Tenant written notice of its election to so terminate, such notice to be given not later than ninety (90) days after the completion of such condemnation or taking, and thereupon the term of this Lease shall expire on the date set forth in such notice, and Tenant shall vacate the Premises and surrender the same to Landlord, without prejudice, however, to Landlord's rights and remedies against Tenant under the Lease provisions in effect prior to such termination, and any rent owing shall be paid up to such date and any payments of rent made by Tenant which were on account of any period subsequent to such date shall be returned to Tenant.

12.02If this Lease is not terminated following such a condemnation or taking, Landlord, as soon as reasonably practicable after such condemnation or taking and the determination and payment of Landlord's award on account thereof, shall expend as much as may be necessary of the net amount which is awarded to Landlord and released by Landlord's mortgagee, if any, in restoring, to the extent originally constructed by Landlord (consistent, however, with zoning laws and building codes then in existence), so much of the Building as was originally constructed by Landlord to an architectural unit as nearly like its condition prior to such taking as shall be practicable; provided, however, Landlord shall not be obligated to expend for such restoration an amount in excess of condemnation proceeds made available to Landlord, if any. Landlord's obligation hereunder shall be limited to restoring the Building and/or the Premises to substantially the same condition that existed prior to such condemnation or taking.

12.03If this Lease is not terminated pursuant to Paragraph 12.01, the Base Rent and other sums payable by Tenant hereunder, as adjusted as provided herein, shall be reduced in proportion to the reduction in area of the Premises by reason of the condemnation or taking. If this Lease is terminated pursuant to Paragraph 12.01, the minimum net rental and other charges which are the obligation of Tenant hereunder shall be apportioned and prorated accordingly as of the date of termination.

12.04The whole of any award or compensation for any portion of the Premises taken, condemned or conveyed in lieu of taking or condemnation, including the value of Tenant's leasehold interest under the Lease, shall be solely the property of and payable to Landlord. Nothing herein contained shall be deemed to preclude Tenant from seeking, at its own cost and expense, an award from the condemning authority for loss of its business, the value of any trade fixtures or other personal property of Tenant in the Premises or moving expenses, provided that the award for such claim or claims shall not be in diminution of the award made to Landlord.

12.05Notwithstanding Landlord’s right to terminate this Lease pursuant to Section 12.01 above, Tenant may elect to terminate this Lease if: (i) more than fifty percent (50%) of the floor area of the Premises shall be condemned or taken in any manner, or (ii) any material condemnation or taking occurs to the Premises during the last twelve (12) months of the Initial Term or Option Term, as the case may be, or (iii) if the Restoration Period (as defined below) for the aforementioned (i) or (ii) is more than one-hundred eighty (180) days after the date of said condemnation or taking (individually referred to as the “Qualified Condemnation”). In order to terminate this Lease pursuant to Qualified Condemnation (i) or (ii) above Tenant shall, within fifteen (15) days after the completion of said condemnation or taking, provide written notice to Landlord indicating its intent to terminate its Lease, and thereupon the Term of this Lease shall expire by lapse of time thirty (30) days after said notice from Tenant is given and Tenant shall vacate the Premises and surrender the same to Landlord, without prejudice, however, to Landlord’s rights and remedies against Tenant under the Lease provisions in effect prior to such termination, and any rent owing shall be paid up to such date and any payments of rent made by Tenant, which were on account of any period subsequent to such date shall be returned to Tenant. If Tenant fails to provide written notice to Landlord within such time period, Tenant’s right to terminate this Lease under this paragraph shall be deemed waived. In order to terminate this Lease for Qualified Condemnation (iii), Tenant shall within fifteen (15) days of the completion of the taking of Qualified Condemnation (i) or (ii), provide written notice to Landlord requesting an estimate of the time required to substantially restore the Premises. If Tenant fails to provide written notice to Landlord within such time period, Tenant’s right to terminate this Lease under this paragraph shall be deemed waived. Within a reasonable time of receipt of Tenant’s notice requesting the restoration time frame, Landlord shall provide a written notice to Tenant (the “Landlord Condemnation Restoration Estimate Notice”) indicating the scheduled completion date to repair or restore the Premises as described in Section 12.02 (the “Restoration Period”). If the Restoration Period is more than one-hundred eighty (180) days after the date of said condemnation or taking, then Tenant may elect to terminate this Lease. In order to terminate this Lease, Tenant must give written notice to Landlord of its election to so terminate, such notice (the “Tenant Condemnation Termination Notice”) shall be given within fifteen (15) days of the date of the Landlord Condemnation Restoration Estimate Notice and thereupon the Term of this Lease shall expire by lapse of time thirty (30) days after Tenant Condemnation Termination Notice is given and Tenant shall vacate the Premises and surrender the same to Landlord, without prejudice, however, to Landlord’s rights and remedies against Tenant under the Lease provisions in effect prior to such termination, and any rent owing shall be paid up to such date and any payments of rent made by Tenant which were on account of any period subsequent to such date shall be returned to Tenant.

SECTION 13.

ASSIGNMENT OR SUBLETTING

13.01Tenant agrees not to assign or in any manner transfer this Lease or any interest in this Lease without the prior written consent of Landlord, and not to sublet the Premises or any part of the Premises or to allow anyone to use or to come in, through or under the Premises without Landlord's consent, which consent shall not be unreasonably withheld or delayed. Any attempted subletting or assignment without Landlord's consent shall be voidable in Landlord's sole discretion and, at Landlord's option, shall grant Landlord the right to terminate this Lease or to exercise any of the other rights or remedies it may have hereunder. If consented to, no assignment or subletting shall be binding upon Landlord unless the sublessee or assignee shall deliver to Landlord an instrument (in recordable form, if Landlord so requests) containing an agreement of assumption of all of Tenant's obligations under this Lease. In no event may Tenant assign, sublet or otherwise transfer this Lease or any interest in this Lease at any time while an Event of Default exists hereunder. Landlord may, in its sole discretion, refuse to give its consent to any proposed subletting or assignment or exercise its other rights hereunder for any reason, including, but not limited to, the financial condition, creditworthiness or business reputation of the proposed sublessee or assignee, the prevailing market or quoted rental rates for space in the Building or other comparable buildings, and the proposed use of the Premises by, or business of, the proposed sublessee or assignee. One consent by Landlord to a subletting or assignment will not be deemed a consent to any subsequent assignment, subletting, occupation or use by any other person. Neither the consent to any assignment or subletting nor the acceptance of rent from an assignee, subtenant or occupant will constitute a release of Tenant from the further performance of the obligations of Tenant contained in this Lease. A dissolution, merger, consolidation, or other reorganization of Tenant and the issuance or transfer of twenty (20%) percent or more of the voting capital of Tenant to persons other than shareholders as of the beginning of such period within any twelve (12) month period, shall each be deemed to be an assignment of this Lease, and as such, prohibited without Landlord's prior written consent. Notwithstanding anything in this paragraph to the contrary, notwithstanding the foregoing, the merger, consolidation, or other reorganization of Tenant and the sale of all or substantially all of Tenant’s assets shall be permitted hereunder with thirty (30) day prior written notice, but not prior approval, of Landlord if the resultant entity after such transaction has, and has maintained for each of the two (2) full fiscal years preceding the transaction, a net worth exceeding Five Million Dollars ($5,000,000), determined in accordance with general accepted accounting principles, consistently applied, and Tenant furnishes Landlord evidence reasonably acceptable to Landlord of the net worth standard. Landlord may allow the occupancy of the Premises by Tenant’s parent company or a subsidiary or an affiliate which is wholly owned by Tenant (the “Related Entity”), or the assignment of this Lease or the subletting of all or a portion of the Premises to a Related Entity provided that: (i) Tenant shall give written notice to Landlord at least thirty (30) days prior to said proposed occupancy, assignment or subletting setting forth the terms thereof together with such financial and other information Landlord may request; and (ii) any such occupancy, assignment or subletting shall not constitute a release of Tenant from the further performance of the obligations of Tenant contained in this Lease; and (iii) any such occupancy, assignment or subletting shall be subject to Sections 13.03 and 13.04.

13.02In the event Tenant desires to sublet all or a portion of the Premises or assign this Lease, Tenant shall give notice to Landlord setting forth the terms of the proposed subletting or assignment together with such financial and other information Landlord may request. Landlord shall have the right, exercisable by written notice to Tenant within sixty (60)thirty (30) days after receipt of Tenant's notice, (i) to consent or refuse to consent thereto in accordance with Paragraph 13.01 above, or (ii) to terminate this Lease which termination may, in Landlord's sole discretion, be conditioned upon Landlord and the proposed subtenant/assignee entering into a new Lease. However, in the event Landlord desires to elect to terminate this Lease, it shall first notify Tenant of its desire whereupon Tenant may withdraw the request within ten (10) days after Landlord’s notice by the delivery of written withdrawal thereof to Landlord whereupon Landlord shall withdraw its recapture option and Tenant shall remain fully obligated under this Lease.

13.03Upon the occurrence of an Event of Default, as defined under Section 18, if all or any part of the Premises are then sublet or assigned, Landlord, in addition to any other remedies provided by this Lease or by law, may, at its option, collect directly from the sublessee or assignee all rent becoming due to Landlord by reason of the subletting or assignment. Any collection by Landlord from the sublessee or assignee shall not be construed to constitute a waiver or release of Tenant from the further performance of its obligations under this Lease or the making of a new Lease with such sublessee or assignee.

13.04In the event Tenant shall sublet all or a portion of the Premises or assign this Lease, one-half of all of the sums of money or other economic consideration received by Tenant or its affiliates, directly or indirectly, as a result of such subletting or assignment, whether denominated as rent or otherwise, which exceed in the aggregate the total sums which Tenant is obligated to pay Landlord under this Lease (prorated to reflect obligations allocable to that portion of the Premises subject to such sublease) shall be payable to Landlord as additional rent under this Lease without effecting or reducing any other obligation of Tenant hereunder.

SECTION 14.

INSPECTION OF PREMISES

14.01With twenty four (24) hour prior notice, except in the case of an emergency, Tenant agrees to permit Landlord to enter the Premises for the purpose of inspecting the same and to show same to prospective purchasers, tenants or mortgagees of the Project, and to make such repairs, alterations, improvements or additions as Landlord may deem necessary or desirable, and Landlord shall be allowed to take all material into and upon the Premises that may be required therefor without the same constituting an eviction of Tenant in whole or in part and the rent reserved shall in no way abate while said repairs, alterations, improvements, or additions are being made, by reason of loss or interruption of business of Tenant, or otherwise. Landlord will give Tenant reasonable notice prior to an entry by Landlord pursuant to this Section 14.01, except in the case of emergencies in which event no notice need be given. Landlord shall use reasonable efforts not to disrupt, disturb or interfere with the conduct of Tenant’s business during such entry. Notwithstanding the foregoing, Landlord may enter the Premises with less than twenty four (24) hours prior written notice if Tenant gives Landlord its permission to do so.

SECTION 15.

FIXTURES AND EQUIPMENT

15.01All fixtures and equipment paid for by Landlord, excluding movable equipment with is funded with that portion of the Tenant Improvement Allowance with may be used for ancillary equipment acquisition is in accordance with Section D.1 below, and all fixtures and equipment which may be paid for and placed on the Premises by Tenant from time to time but which are so incorporated and affixed to Premises that their removal would involve damage or structural change to Premises will be and remain the property of Landlord.

15.02All tenant furnishings, office equipment and tenant fixtures (other than those specified in Sections 10.02 and 15.01), which are paid for and placed on the Premises by Tenant from time to time (other than those which are replacements for fixtures originally paid for by Landlord) will remain the property of Tenant.

SECTION 16.

PARKING AREAS

16.01Tenant and its agents, employees, customers, licensees and invitees shall have the non-exclusive right to use in common with Landlord and all other tenants and occupants of the Building and their respective agents, employees, customers, licensees and invitees, the Common Area parking and loading dock facilities, if any, on the Land, and all driveways, entrances and exits located within the Project necessary to provide a means of ingress and egress to and from the Premises. Such use of parking facilities shall be subject to, and consistent with, the Rules and Regulations of the Project (as set forth in Exhibit B), together with such reasonable modifications and additions as may be made thereto during the term of this Lease. Landlord shall designate the number of parking spaces set forth in Paragraph 1.01(i) in the parking lot or parking garage of the Project for the exclusive use of Tenant (the “Tenant's Designated Parking Spaces”). Tenant shall pay Landlord, as additional rent on each Rent Day, an amount set forth in Section 1.01(i). Such sums may be increased by Landlord from time to time by the delivery of thirty (30) days prior written notice to Tenant. Within thirty (30) days of receipt of such notification, Tenant may: (i) accept such increase; or (ii) reject such increase for all or any of its exclusive spaces, in which event Tenant's exclusive parking rights for such spaces shall terminate. If Tenant accepts such increase or fails to reject such increase within the thirty (30) day period, then commencing with the next Rent Day following Landlord's notice, the amount of additional rent payable hereunder shall be increased accordingly. Notwithstanding anything contained herein to the contrary, Landlord shall have the right to relocate Tenant's Designated Parking Spaces within the parking lot of the Project to a place with is not materially farther away from the primary entrance to the Building, and Landlord shall have the right to designate other parking spaces in the parking lot for the exclusive use of others. Tenant agrees to be bound by parking regulations in effect at the Project, together with reasonable modifications or additions as may be necessary during the term of this Lease, as more fully described in Exhibit "B", attached hereto and made part hereof.

SECTION 17.

NOTICE OR DEMANDS

17.01All bills, notices, requests, statements, communications, or demands (collectively, "notices or demands") to or upon Landlord or Tenant desired or required to be given under any of the provisions hereof must be in writing. Any such notices or demands from Landlord to Tenant will be deemed to have been duly and sufficiently given if a copy thereof has been personally delivered, mailed by United States certified mail, return receipt requested, postage prepaid, or sent via overnight courier service to Tenant at the address of the Premises or at such other address as Tenant may have last furnished in writing to Landlord for such purpose. Any such notices or demands from Tenant to Landlord will be deemed to have been duly and sufficiently given if delivered to Landlord in the same manner as provided above at the address set forth at the heading of this Lease or at the address last furnished by written notice from Landlord to Tenant. The effective date and the delivery date of such notice or demand will be deemed to be the time when it is personally delivered, three (3) days after it is mailed or the day after it is sent via overnight courier as herein provided.

SECTION 18.

BREACH; INSOLVENCY; RE-ENTRY

18.01Each of the following shall constitute an Event of Default under this Lease: (i) Tenant's failure to pay rent or any other sum payable hereunder for more than five (5) business days after written notice of such failure has been delivered to Tenant (but if one notice has been given in any twelve (12) month period, no further notice shall be required during such twelve (12) month period)when due; (ii) Tenant's failure to perform any of the non-monetary terms, conditions or covenants of this Lease to be observed or performed by Tenant for more than seven (7)thirty (30) days after written notice of such failure shall have been delivered to Tenant except in connection with a breach which cannot be remedied or cured within said thirty (30) day period, in which event the time of Tenant within which to cure such breach shall be extended for such time as shall be necessary to cure the same, but only if Tenant, within such thirty (30) business day period, shall have commenced and diligently proceeded to remedy or cure such breach; (iii) if Tenant is named as the debtor in any bankruptcy proceeding, or similar debtor proceeding, and any such proceeding, if involuntary, is not dismissed or set aside within sixty (60) days from the date thereof; (iv) if Tenant makes an assignment for the benefit of creditors or petitions for or enters into an arrangement with creditors or if a receiver of any property of Tenant in or upon the Premises is appointed in any action, suit or proceeding by or against Tenant, or if Tenant shall admit to any creditor or to Landlord that it is insolvent, or if the interest of Tenant in the Premises shall be sold under execution or other legal process; or (v) if Tenant shall abandon the Premises, vacate the Premises for a period of more than fifteen (15) consecutive days, or suffer this Lease to be taken under any writ of execution. Upon the occurrence of any Event of Default, Landlord, in addition to any other rights and remedies it may have hereunder or by law, shall have the immediate right of re-entry, and may remove all persons and property from the Premises and it shall have the right to abandon or otherwise dispose of such property in any way it may deem fit which is not in contravention of applicable law. In addition, Landlord shall have the right, but not the obligation, to store all or some of the property which may have been removed in a public warehouse or elsewhere at the cost of, and for the account of, Tenant, all without service of notice or resort to legal process and all without being deemed guilty of trespass or becoming liable for any loss or damage which may be occasioned thereby.

18.02In the event Landlord shall elect to re-enter the Premises in accordance with Paragraph 18.01, or should Landlord take possession of Premises pursuant to legal proceedings or pursuant to any notice provided by law, Landlord may either terminate this Lease or may from time to time without terminating this Lease, make such alterations and repairs as Landlord may deem necessary in order to relet the Premises, and relet the Premises or any part thereof for any such term or terms (which may be for a term extended beyond the term of this Lease) and at such rental or rentals, and upon such other terms and conditions as Landlord may deem advisable.

18.03Upon the reletting of the Premises in accordance with Paragraph 18.02, all rentals received by Landlord from such reletting shall be applied in the following order of priority: (a) to the payment of any additional rent payable as provided in Section 5 hereof, including interest and late charges; (b) to the payment of any other indebtedness other than rent due hereunder from Tenant to Landlord; (c) to the payment of the actual costs and expenses of obtaining possession, restoring and repairing the Premises and the actual costs and expenses of reletting, including brokerage and reasonable attorneys' fees; and (d) to the payment of any rent and other sums due and unpaid under this Lease. The remainder, if any, shall be held by Landlord and applied in payment of future rent as the same may become due and payable hereunder. If the rental received from such reletting during any month is less than that to be paid during that month by Tenant hereunder, Tenant shall pay any such deficiency to Landlord monthly. No such re-entry or taking possession of the Premises or any part thereof by Landlord shall be construed as an election on its part to terminate this Lease unless a written notice of such intention is given to Tenant or unless the termination thereof is decreed by a court of competent jurisdiction.

18.04Notwithstanding any reletting of the Premises without termination in accordance with Paragraph 18.02, Landlord may at any time after the occurrence of any Event of Default, terminate this Lease and, in addition to any other remedies Landlord may have, Landlord may recover from Tenant all damages it may incur by reason of Tenant's breach, including, without limitation, the reasonable cost of recovering and reletting the Premises and reasonable attorneys' fees incidental thereto and the worth at the time of the termination of the amount of rent and other charges payable hereunder for the remainder of the Term, all of which amounts shall be immediately due and payable by Tenant to Landlord.

18.05In case suit shall be brought or an attorney otherwise consulted, for recovery of possession of the leased premises, for the recovery of rent or any other amount due under the provisions of this Lease, or because of the breach of any other covenant herein contained on the part of either Landlord or Tenant to be kept and performed, or any other action against Tenantagainst one of the parties by the other Landlord, or because of any claimed breach of this Lease by either party Landlord or any other action against one of the parties by the otherLandlord by Tenant, (and Landlord shall be the prevailing party), Tenantthe non-prevailing party shall pay to the prevailing party shall pay to Landlord all expenses incurred therefor, including a reasonable attorneys’ fee. In addition, Landlord and Tenant hereby waive trial by jury in any action, proceeding or counterclaim brought by Landlord or Tenant against the other on any matter whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord to Tenant, the use or occupancy of the Premises by Tenant or any person claiming through or under Tenant, any claim of injury or damage, and any emergency or other statutory remedies; provided, however, the foregoing waiver shall not apply to any action for personal injury or property damage.

 SECTION 19.

SURRENDER OF PREMISES ON TERMINATION

19.01At the expiration (or earlier termination) of the Term hereof, Tenant will surrender the Premises (including the Tenant Improvements shown on the Plans, attached hereto as Exhibit A) broom clean and in as good condition and repair as they were at the time Tenant took possession, reasonable wear and tear and insured casualty excepted, and promptly upon surrender will deliver all keys and building security cards for the Premises to Landlord at the place then fixed for the payment of rent. At the expiration of the Lease term, Tenant will, at its own cost and expense, repair or pay the cost of restoration with respect to any damage to the Premises arising from the removal of any trade fixtures or similar items. Tenant shall have no rights of removal as to property affixed or otherwise placed on or in the Premises by or at the expense of Landlord, its predecessors, successors or assigns, provided, however, upon expiration of the Term of this Lease other than in accordance with Section D5, Tenant may remove the movable equipment with is funded with that portion of the Tenant Improvement Allowance with may be used for ancillary equipment acquisition is in accordance with Section D.1 below . All costs and expenses incurred by Landlord in connection with repairing or restoring the Premises to the condition called for herein, together with the costs, if any, of removing any property of Tenant together with any property designated by Landlord pursuant to Section 10.02, left on the Premises, shall be paid by Tenant on demand. Tenant shall remove all property of Tenant and make all repairs necessitated thereby at its own cost, as directed by Landlord. Tenant's obligation to observe or perform this covenant shall survive the expiration or other termination of the Term of this Lease.

SECTION 20.

PERFORMANCE BY LANDLORD OF THE COVENANTS OF TENANT

20.01If Tenant fails to pay any sum of money, other than Base Rent, required to be paid hereunder or fails to perform any act on its part to be performed hereunder, including, but not limited to, the performance of all covenants pertaining to the condition and repair of the Premises pursuant to Section 10 above, and if such failure shall not otherwise be cured within the time, if any, provided herein, then upon two (2) days notice for emergency repairs and ten (10) days notice for non-emergency repairs Landlord may (but shall not be required to), without waiving or releasing Tenant from any of Tenant's obligations, make any such payment or perform any such other act. All sums so paid or incurred by Landlord and all incidental costs, including, but not limited to, the cost of repair, maintenance or restoration of the Premises, shall be deemed additional rental and, together with interest thereon computed at the rate set forth in Section 5 hereof from the date of the notice of payment by Landlord until the date of repayment by Tenant to Landlord, shall be payable to Landlord on demand. On default in such payment, Landlord shall have the same remedies as on default in payment of rent. The rights and remedies granted to Landlord under this Section 20 shall be in addition to, and not in lieu of, all other remedies, if any, available to Landlord under this Lease or otherwise, and nothing contained herein shall be construed to limit such other remedies of Landlord with respect to any matters covered herein.

 SECTION 21.

SUBORDINATION; ESTOPPEL CERTIFICATES

21.01This Lease is subject and subordinate to all ground leases, underlying leases, and mortgages, if any, now or hereafter made, which may now or hereafter affect the Project and to all renewals, modifications, consolidations, replacements and extensions of any such ground leases, underlying leases and mortgages. This clause shall be self-operative and no further instrument of subordination shall be necessary. Notwithstanding the foregoing, Landlord reserves the right to declare this Lease prior to the lien of any ground lease, underlying lease, or mortgage now or hereinafter placed upon the real property of which the Premises are a part by recording a written notice of such priority with the register of deeds. Tenant covenants and agrees to execute and deliver, within ten (10) days after requested by Landlord, such further instrument or instruments subordinating this Lease (or declaring the Lease prior and superior) to any lease or proposed lease or to the lien of any such mortgage or mortgages as shall reasonably be desired by Landlord, any lessor or proposed lessor, and any mortgagees or proposed mortgagees.

21.02In the event any proceedings are brought for foreclosure of, or in the event of the conveyance by deed in lieu of foreclosure of, or in the event of the exercise of the power of sale under, any mortgage made by Landlord covering the Premises, Tenant hereby attorns to the new owner, and covenants and agrees to execute any instrument in writing reasonably satisfactory to the new owner whereby Tenant attorns to such successor in interest and recognizes such successor as Landlord under this Lease.

21.03Tenant, within ten (10) days after request (at any time or times) by Landlord, will execute and deliver to Landlord an estoppel certificate, in form reasonably acceptable to Landlord, certifying: (i) to the Commencement Date and expiration date of the Term; (ii) that this Lease is unmodified and in full force and effect, or is in full force and effect as modified, stating the modifications; (iii) that Tenant does not claim that Landlord is in default in any way, or listing any such claimed defaults and that Tenant does not claim any rights of setoff, or listing such rights of setoff; (iv) to the amount of monthly rent and other sums due hereunder as of the date of the certificate, the date to which the rent has been paid in advance, and the amount of any security deposit or prepaid rent; (v) that Tenant agrees to provide any mortgagee of Landlord with notice of any default by Landlord hereunder and give such mortgagee the opportunity to cure such default within sixty (60)thirty (30) days of such mortgagee's receipt of notice of such default; and (vi) such other matters as may be reasonably requested by Landlord. Any such certificate may be relied upon by any prospective purchaser, mortgagee or lessor of the Premises or any part thereof.

SECTION 22.

QUIET ENJOYMENT

22.01Landlord agrees that at all times when no Event of Default exists under this Lease, Tenant's quiet and peaceable enjoyment of the Premises, in accordance with and subject to the terms of this Lease, will not be disturbed or interfered with by Landlord or any person claiming by, through, or under Landlord.

SECTION 23.

HOLDING OVER

23.01If Tenant remains in possession of the Premises after the expiration of this Lease without executing a new lease, Landlord shall have the right to deem Tenant to be occupying the Premises as a tenant from month to month and the Base Rent for each month will be one hundred fifty percent (150%) of the regular monthly installment of Base Rent payable for the last month of the Term of this Lease for the first two (2)six (6) months after expiration and two hundred percent (200%) of the greater of: (a) the regular monthly installment of Base Rent payable for the last month of the Term of this Lease; or (b) the then prevailing market rates of rent for the Project determined by Landlord in its sole and absolute discretion. This provision shall not preclude Landlord from terminating the lease or recovering any and all damages Landlord may incur as a result of Tenant's failure to timely deliver possession of the Premises to Landlord or from exercising any other right or remedy it may have hereunder.

SECTION 24.

REMEDIES NOT EXCLUSIVE; WAIVER

24.01Each and every of the rights, remedies and benefits of Landlord provided by this Lease are cumulative, and are not exclusive of any other of said rights, remedies and benefits, or of any other rights, remedies and benefits allowed by law.

24.02The failure of Landlord to seek redress for violation of, or to insist upon the strict performance of, any covenant or condition of this Lease or of any of the rules or regulations set forth or hereafter adopted by Landlord, shall not prevent a subsequent act which would have originally constituted a violation from having all the force and effect of an original violation. The receipt by Landlord of rent with knowledge of the breach of any covenant of this Lease shall not be deemed a waiver of such breach and no provision of this Lease shall be deemed to have been waived by Landlord unless such waiver be in writing signed by Landlord. One or more waivers of any covenant or condition by either party shall not be construed as a waiver of a further or subsequent breach of the same covenant or condition, and the consent or approval by Landlord to or of any act by Tenant requiring Landlord's consent or approval will not be deemed to waive or render unnecessary Landlord's consent or approval to or of any subsequent similar act by Tenant. No payment by Tenant or receipt by Landlord of a lesser amount than the monthly rental herein stipulated shall be deemed to be other than on account of the earliest stipulated rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and Landlord shall accept such check or payment without prejudice to Landlord's right to recover the balance of such rent or pursue any other remedy provided in this Lease.

 SECTION 25.

WAIVER OF SUBROGATION

25.01Landlord and Tenant hereby release each other and their respective agents and employees from any and all liability to each other or anyone claiming through or under them by way of subrogation or otherwise for any loss or damage to property caused by or resulting from risks insured against under the property insurance for loss, damage or destruction by fire or other casualty carried by the parties hereto and which was in force at the time of any such loss or damage or which would have been so covered had the insurance required hereunder been maintained; provided, however, that this release shall be applicable only with respect to loss or damage occurring during such time as the releasor's policies of insurance contain a clause or endorsement to the effect that any such release shall not adversely affect or impair such policies or prejudice the right of the releasor to recover thereunder. Landlord and Tenant each agrees that it will require its property insurance carriers to include in its policy such a clause or endorsement. However, if such endorsement cannot be obtained, or shall be obtainable only by the payment of an additional premium charge above that which is charged by companies carrying such insurance without such waiver of subrogation, then the party undertaking to obtain such waiver shall notify the other party of such fact and such other party shall have a period of ten (10) days after the giving of such notice to agree in writing to pay such additional premium if such policy is obtainable at additional cost (in the case of Tenant, pro rate in proportion of Tenant’s rentable area to the total rentable area covered by such insurance); and if such other party does not so agree or the waiver shall not be obtainable, then the provisions of this Section 25.01 shall be null and void as to the risks covered by such policy for so long as either such waiver cannot be obtained or the party in whose favor a waiver of subrogation is desired shall refuse to pay the additional premium. If the release of either Landlord or Tenant, as set forth in the second sentence of this Section 25.01, shall contravene any law with respect to exculpatory agreements, the liability of the party in question shall be deemed not released, but no action or rights shall be sought or enforced against such party unless and until all rights and remedies against the other’s insurer are exhausted and the other party shall be unable to collect such insurance proceeds. The waiver of subrogation referred to above shall extend to the agents and employees of each party (including, as to Landlord, the Manager), but only if and to the extent that such waiver can be obtained without additional charge (unless such party shall pay such charge). Nothing contained in this Section 25.01 shall be deemed to relieve either party from any duty imposed elsewhere in this Lease to repair, restore and rebuild.

Notwithstanding any other term or provision of this Lease to the contrary, Landlord and Tenant hereby release each other and their respective agents and employees from any and all liability to each other or anyone claiming through or under them by way of subrogation or otherwise for any loss or damage to property caused by or resulting from risks insured against under the property insurance for loss, damage or destruction by fire or other casualty carried by the parties hereto and which was in force at the time of any such loss or damage, or which would have been so covered had the insurance required hereunder been maintained. If the release of either Landlord or Tenant, as set forth in this Section 25.01, shall contravene any law with respect to exculpatory agreements, the liability of the party in question shall be not released, but no action or rights shall be sought or enforced against such party. The waiver of subrogation referred to above shall extend to the agents and employees of each party (including as to Landlord, the Manager). Nothing contained in this Section 25.01 shall be deemed to relieve Landlord from any duty imposed elsewhere in this Lease to repair, restore and rebuild. Landlord and Tenant agree that all casualty insurance that they each maintain shall contain full waivers of subrogation, and that the mutual release and waivers of subrogation granted by each party hereto to the other shall be fully effective, for the benefit of each party, and their agents, employees, sublessees, successors and assigns whether or not the insurance required to be maintained hereunder is, in fact, maintained or in force.

SECTION 26.

RIGHT TO SHOW PREMISES

26.01Landlord may, with reasonable notice, show the Premises to prospective tenants and brokers for the Premises, no sooner than six (6) months prior to the expiration (or early termination) of the Initial Term hereof, and may display signs about the Project and elsewhere advertising the availability of the Premises. Landlord shall use reasonable efforts not to disrupt, disturb or interfere with the conduct of Tenant’s business during such entry.

SECTION 27.

INDEMNIFICATION

27.01Tenant at its expense will defend, indemnify, save and hold harmless Landlord, its invitees, licensees, servants, agents, employees, affiliated entities and contractors, from and against any loss, damage, claim of damage, liability or expense, (including attorney fees) to or for any person or property, whether based on contract, tort, negligence or otherwise, arising directly or indirectly out of or in connection with the condition of the Premises, the occupation, use or misuse thereof by Tenant or any other person, the acts or omissions of Tenant, its invitees, licensees, servants, agents, employees or contractors, the failure of Tenant to comply with any provision of this Lease, or any event on or relating to the Premises, whatever the cause or any litigation or other proceeding by or against Tenant to which Landlord is made a party, other than the intentional, willful or maliciousnegligent act of Landlord which causes an injury which was neither either expected or intended by Landlord when it performed the act in question. The provisions of this Section 27.01 will survive the expiration or termination of this Lease.

27.02Landlord, at its expense, will defend, indemnify, save and hold harmless Tenant, its licensees, servants, agents, employees, affiliated entities and contractors: from and against any loss, damage, claim of damage, liability or expense (including attorneys’ fees) to or for any person or property, whether it is based on contract, tort, negligence or otherwise, or arising directly or indirectly out of or in connection with the condition of the Common Areas or the other parts of the Project not leased to or occupied by others, the use or misuse thereof by Landlord, its licensees, servants, agents, employees, or contractors, the failure of Landlord to comply with the terms of this Lease, or any event on or relating to the Common Areas or the other parts of the Project not leased to or occupied by others, whatever the cause, or any litigation or other proceeding by or against Landlord to which Tenant is made a party, other than the intentional, willful, or malicious or negligent act of Tenant which causes injury and/or damages. Notwithstanding anything to the contrary, the provisions set forth in this Section 27.02 shall not apply for any time period where Tenant has contracted for use or occupancy, under separate agreement and on a temporary basis, any portion of the Common Areas or any portion of the Project other than the Premises. The provisions of this indemnification shall survive expiration and termination of this Lease.

SECTION 28.

DEFINITION OF LANDLORD; LANDLORD'S LIABILITY

28.01The term "Landlord" as used in this Lease so far as covenants, agreements, stipulations or obligations on the part of Landlord are concerned is limited to mean and include only the owner or owners of the Premises at the time in question, and in the event of any transfer or transfers of the title to such fee Landlord herein named (and in case of any subsequent transfers or conveyances the then grantor) will automatically be freed and relieved from and after the date of such transfer or conveyance of all personal liability for the performance of any covenants or obligations on the part of Landlord contained in this Lease thereafter to be performed so long as such transferee assumes the obligations of Landlord hereunder.

28.02Landlord shall not be in default or breach hereof, and Landlord shall have no liability if This Lease and the obligation of Tenant to pay rent hereunder and perform all of the other covenants and agreements hereunder on the part of Tenant to be performed shall in no way be affected, impaired or excused because Landlord is unable to fulfill any of its obligations under this Lease or otherwise is unable to supply or is delayed in supplying any service expressly or implied to be supplied or is unable to make, or is delayed in making any repairs, additions, alterations or decorations or is unable to supply or is delayed in supplying any equipment or fixtures if Landlord is prevented or delayed from so doing by reasons of a “Force Majeure”. A Force Majeure shall be shortages of materials, acts of God, governmental restrictions, strike or labor troubles or any cause beyond Landlord's reasonable control including, but not limited to, government preemption in connection with a national emergency or by reason of any rule, order or regulation of any department or subdivision thereof of any government agency or by reason of the conditions of supply and demand which have been or are affected by war or other emergency.

SECTION 29.

SECURITY DEPOSIT AND SECURITY INTEREST

29.01Upon execution hereof, Tenant shall deliver to Landlord cash in the amount set forth in Paragraph 1.01(j), above, which Landlord is to retain as security for the faithful performance of all the covenants, conditions and agreements of this Lease, but in no event shall Landlord be obligated to apply the same upon rents or other charges in arrears or upon damages for Tenant's failure to perform the said covenants, conditions, and agreements; Landlord may so apply the security at its option, and Landlord's right to the possession of the Premises for nonpayment of rent or for any other reason shall not in any event be affected by reason of the fact that Landlord holds this security. The said sum, if not applied toward the payment of rent in arrears or toward the payment of damages suffered by Landlord by reason of Tenant's breach of the covenants, conditions and agreements of this Lease, is to be returned, without interest thereon, to Tenant when this Lease is terminated, and fully performed by Tenant, according to these terms, and in no event is the said security to be returned until Tenant has vacated the Premises and delivered possession to Landlord.

29.02In the event that Landlord repossesses the Premises because of Tenant's default or because of Tenant's failure to carry out the covenants, conditions and agreements of this Lease, Landlord may apply the said security upon all damages suffered to the date of said repossession and may retain the said security to apply upon such damages as may be suffered or shall accrue thereafter by reason of Tenant's default or breach. Landlord shall not be obligated to keep the said security as a separate fund, but may mix the said security with its own funds. In the event Landlord shall use any part of the Security Deposit, Tenant shall, upon demand, deposit with Landlord the full amount so used, in order that Landlord shall have the full Security Deposit on hand at all times during the Term of this Lease. In the event of a sale or lease of the Building and the transfer of the Security Deposit to the purchaser or lessee, Landlord shall be released from all liability for the return of the Security Deposit. Tenant shall have no legal power to assign or encumber the Security Deposit herein described.

29.03To secure the faithful performance of all covenants, conditions and agreements of this Lease to be performed and observed by Tenant and to secure the payment of all rent and other sums which may be due Landlord under this Lease, Tenant hereby grants Landlord a security interest in all property, equipment, fixtures, chattels, inventory and general intangibles and the proceeds thereof, whether now owned or hereafter acquired, which may at any time be placed in or upon the Leased Premises or used or useable in connection with Tenant's business (collectively the "Collateral"). Upon the occurrence of an Event of Default, Landlord may exercise any of its rights and remedies provided by the Uniform Commercial Code. The proceeds of any such sale, after payment of Landlord's expenses, shall be applied to the payment of Tenant's obligations hereunder and satisfaction of such Event of Default. Enforcement of this security interest shall be in addition to and shall not waive, alter, limit or affect in any manner any other remedies available to Landlord. Tenant agrees that upon Landlord's request it shall execute and deliver all such financing statements as may be necessary to perfect this security interest. Provided no Event of Default exists under the terms of this Lease, then within thirty (30) days after the expiration of the Term, Landlord shall deliver all such termination statements as Tenant may reasonably request, whereupon the security interest granted by this Section 29 shall terminate.

SECTION 30.

RULES AND REGULATIONS

30.01Tenant shall faithfully abide by and observe the rules and regulations for the Building, a copy of which is attached hereto as Exhibit B and made a part hereof, and, after notice thereof, all additions thereto and modifications thereof of uniform applicability from time to time promulgated in writing by Landlord.

SECTION 31.

SIGNS AND ADVERTISING

31.01No signs, lighting, lettering, pictures, notices, advertisements, shades, awnings or decorations will be displayed, used or installed by Tenant except as approved in writing by Landlord, which approval shall not be unreasonably withheld or delayed. All such materials displayed in and about the Premises will be such only as to advertise the business carried on upon the Premises and Landlord will control the location, character and size thereof. Tenant shall not cause or permit to be used any advertising materials or methods which are reasonably objectionable to Landlord or to other tenants of the Building, including without limiting the generality of the foregoing: loudspeakers, mechanical or moving display devices, unusually bright or flashing lights and similar devices the effect of which may be seen or heard from outside the Premises. Tenant shall not solicit business, sell or display merchandise, or distribute hand bills or other advertising matter in the parking area or other Common Areas.

 SECTION 32.

GENERAL

32.01If, by reason of the occurrence of unavoidable delays due to acts of God, governmental restrictions, strikes, labor disturbances, shortages of materials or supplies or for any other cause or event beyond a party's reasonable control, Landlord or Tenant is unable to furnish or is delayed in furnishing any service required by either party under the provisions of this Lease, or Landlord or Tenant is unable to perform or make or is delayed in performing or making any installations, decorations, repairs, alterations, additions, or improvements, required to be performed or made under this Lease, or is unable to fulfill or is delayed in fulfilling any of their respective other obligations under this Lease excluding, however, Tenant obligation to pay Base Rent, Operating Expenses, real Estate Taxes, Additional Rent or any other sum due hereunder, no such inability or delay shall constitute a default, breach or an actual or constructive eviction in whole or in part, or, except as otherwise expressly provided herein, entitle Tenant to any abatement or diminution of rental or other charges due hereunder or otherwise relieve Tenant or Landlord from any of its obligations under this Lease, or impose any liability upon Landlord or its agents by reason of inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's business, or otherwise.

32.02This Lease is being entered into and executed in the State of Michigan, and all questions with respect to the construction of this Agreement and the rights and liabilities of the parties shall be determined in accordance with the provisions of the laws of the State of Michigan.

32.03Many references in this Lease to persons, entities and items have been generalized for ease of reading. Therefore, references to a single person, entity or item will also mean more than one person, entity or thing whenever such usage is appropriate (for example, "Tenant" may include, if appropriate, a group of persons acting as a single entity, or as tenants-in-common). Similarly, pronouns of any gender should be considered interchangeable with pronouns of other genders.

32.04Section headings appearing in this Lease are for convenience only. They do not define, limit or construe the contents of any paragraphs or clauses contained herein.

32.05Landlord reserves the right should it become necessary to comply with required laws and regulations, or to assure the health, safety and welfare of Tenant or other occupants of the building to relocate Tenant in other comparable contiguous space in the Building upon not less than sixty (60) days prior written notice to Tenant. Landlord shall pay the cost of moving Tenant to new space, and the cost or reinstalling all of Tenant’s fixtures and equipment so that the new space is fully functional for the conduct of Tenant’s business as conducted in the old space. If Tenant does not wish to accept such relocation, Tenant may object thereto by written notice to Landlord within ten (10) days after the notice from Landlord. In the event Tenant fails to object within such ten (10) day period, Tenant shall be deemed to have accepted the relocation. In the event Tenant so objects, Landlord may rescind the notice of intention to relocate Tenant or may reaffirm said intention, in which event Tenant may terminate this Lease by written notice to Landlord within five (5) days after the affirmation notice from Landlord. In the event Tenant fails to notify Landlord of its termination within such five (5) day period, it shall be deemed to have accepted the relocation. If Tenant terminates this Lease pursuant this paragraph, Tenant must vacate the Premises within thirty (30) days following Tenant's notice to Landlord of termination. As to any relocation of Tenant to substitute space, such substitute space shall (i) be comparable to the Premises, (ii) be contiguous to itself (iii) contain substantially the same tenant improvements, of equal or better quality, to those in the Premises, and (iv) be as suitable as the Premises for the conduct of Tenant’s business, and such substitute space and the Premises shall be concurrently available to Tenant as necessary to provide for continuity in Tenant’s business and to permit relocation of Tenant’s equipment and facilities with reasonable minimal interruption in such business.

32.06The covenants, conditions and agreements contained in this Lease shall bind and inure to the benefit of Landlord and Tenant and their respective heirs, distributees, successors, administrators and executors provided, however, that no assignment by, from, through, or under Tenant in violation of any of the provisions hereof shall vest in the assigns any right, title, or interest whatsoever. All provisions of this Lease are and will be binding on the successors and permitted assigns of Landlord and Tenant.

32.07Time shall be and is of the essence in this Lease and with respect to the performance of all obligations of Landlord and Tenant hereunder.

32.08Any services which Landlord is required to furnish pursuant to the provisions of this Lease may, at Landlord's option, be furnished from time to time, in whole or in part, by employees of Landlord or by the managing agent of the Project or by one or more third persons.

32.09Landlord shall have the right at any time, and from time to time, to unilaterally amend the provisions of this Lease if Landlord is advised by counsel that all or any portion of the monies paid by Tenant to Landlord hereunder are, or may be deemed to be, unrelated business income within the meaning of the United States Internal Revenue Code or regulation issued thereunder, and Tenant agrees that it will execute all documents or instruments necessary to effect such amendment or amendments, provided that no such amendment shall result in Tenant having to pay in the aggregate more money on account of its occupancy of the Premises under the term of this Lease as so amended and provided, further, that no such amendment or amendments shall result in Tenant receiving under the provisions of this Lease less service than it is entitled to receive, nor services of a lesser quality.

32.10Neither Landlord nor Landlord's agents have made any representations or promises with respect to the physical condition of the Building, the Land or the Premises, or with respect to the rents, leases, expenses of operation or any other matter or thing affecting or related to the Premises except as expressly set forth herein; and no rights, easements or licenses are acquired by Tenant by implication or otherwise except as expressly set forth in the provisions of this Lease.

32.11Annually and at any other time, upon request, Tenant shall promptly furnish Landlord financial statements reflecting Tenant's and any Guarantor's current financial condition. All such financial statements shall be in such form and contain such detail as Landlord shall reasonably request. Any financial statement, or any other information given Landlord by Tenant under this Section 32.11 shall remain confidential.

32.12In case any provision of this Lease or any agreement or instrument executed in connection herewith shall be invalid, illegal or unenforceable, such provision shall be enforced to the fullest extent permitted by applicable law, and the validity, legality and enforceability of the remaining provisions hereof and thereof shall not in any way be affected or impaired thereby. This Lease shall not be construed more strictly against one party than against the other, merely by virtue of the fact that it may have been prepared by counsel for one of the parties, it being recognized that both Landlord and Tenant have contributed substantially and materially to the preparation of this Lease.

32.13This Lease can be modified or amended only by a written agreement signed by Landlord and Tenant. This Lease and the Exhibits attached hereto and forming a part hereof set forth all of the covenants, agreements, stipulations, promises, conditions and understandings between Landlord and Tenant concerning the Premises, and there are no covenants, agreements, stipulations, promises, conditions or understanding, either oral or written, between them other than set forth herein or therein.

32.14Tenant will not record this Lease or a memorandum hereof, and will not otherwise disclose the terms of this Lease to anyone other than its attorneys, accountants or employees who need to know of its contents in order to perform their duties for Tenant. Any other disclosure will be an Event of Default under the Lease. Tenant agrees that Landlord shall have the right to publish a "tombstone" or other promotional description of this Lease.

32.15Except as disclosed in writing to Landlord, Tenant represents and warrants to Landlord that there are no claims for brokerage commissions, other than Friedman Real Estate Group, or finder's fees in connection with this Lease as a result of the contracts, contacts or actions of Tenant, and Tenant agrees to indemnify Landlord and hold it harmless from all liabilities arising from any such claim arising from an alleged agreement or act by Tenant (including, without limitation, the cost of counsel fees in connection therewith); from other than Friedman Real Estate Group, such agreement to survive the termination of this Lease. Landlord agrees to be responsible for paying all commissions payable to Friedman Real Estate Group in connection with this Lease.

32.16The matters set forth on Exhibit D, Special Provisions, if any, are hereby accepted and agreed to between Landlord and Tenant and incorporated herein by reference.

IN WITNESS WHEREOF Landlord and Tenant have executed this Lease as of the date and year first above written.

LANDLORD:TENANT:

AMERICAN CENTER LLC, a Michigan Limited Liability Company	LDMI TELECOMMUNICATIONS, INC. a Michigan corporation
By: Southfield Office Manager, Inc.

By:  /s/ Paul A. StodulskiBy: /s/ Michael Mahoney

Printed: Paul A. StodulskiPrinted: Michael Mahoney

Its: SecretaryIts: CFO

EXHIBIT A

SPACE PLAN

Approved by Tenant:

TENANT:

LDMI TELECOMMUNICATIONS, INC.,

a Michigan corporation

By: /s/ Michael Mahoney

Printed: Michael Mahoney

Its: CFO

EXHIBIT B

RULES AND REGULATIONS OF THE PROJECT

Tenant agrees for itself, its employees, agents, clients, customers, licensees, invitees and guests, to comply fully with the following rules and regulations and with such reasonable modifications thereof and additions thereto as Landlord may make for the Project. All rules and regulations set forth in this Exhibit B shall be in addition to, and shall in no way limit, the provisions of the Lease.

1.The Common Areas of the Project shall not be used by Tenant for any purpose other than those for which they are intended or designated.

2.Landlord has the right to reasonably control access to the Project and refuse admittance to any person or persons without satisfactory identification or a pass issued by Tenant during hours reasonably determined by Landlord.

3.No person shall disturb other occupants of the Building by making loud or disturbing noises.

4.Soliciting, peddling and canvassing is prohibited in the Project and Tenant shall cooperate to prevent the same. No vending machine shall be operated in the Building by any tenant without the prior written consent of Landlord.

5.All deliveries and removals of furniture, equipment or other bulky items must take place after notification to Landlord, during such hours and in such manner as Landlord shall reasonably determine. Tenant shall be responsible for all damage or injury resulting from the delivery or removal of all articles into or out of the Project or the Premises. No load shall be placed on the floors or in elevators in excess of the limits which shall be established by Landlord.

6.Tenant shall not use any equipment emitting noxious fumes or offensive odors unless they are properly vented at Tenant's expense.

7.Nothing shall be attached to the interior or exterior of the Building without the prior written consent of Landlord.

8.No sign or other representation shall be placed on the interior or exterior of the Building without prior written consent of Landlord, which consent shall not be unreasonably withheld.

9.No hazardous articles, bicycles, vehicles or animals of any kind (other than wheelchairs and motorized scooters or other vehicles utilized by handicapped person and seeing-eye dogs) shall be brought into or kept in or about the Building without the prior consent of Landlord.

10.No marking, painting, drilling, boring, cutting or defacing of the walls, floors or ceilings of the Building, other than that which is reasonably necessary for the hanging of art work, diplomas and similar objects which do not require any material alteration to any wall, floor or ceiling, shall be permitted without the prior written consent of Landlord.

11.The electrical system and lighting fixtures in the Building shall not be altered or disturbed in any manner without the prior written consent from Landlord. Any alterations or additions must be performed by licensed personnel authorized by Landlord.

12.The toilets and other plumbing fixtures shall not be used for any purpose other than that for which they are designed. No sweepings, rubbish or other similar materials or substances shall be deposited therein.

13.Smoking is prohibited in the elevator(s), hallways, corridors, stairs, lobbies and other interior common areas of the Project unless clearly designated to the contrary by Landlord.

14.Tenant shall not waste electricity, water or air-conditioning, and shall cooperate fully with Landlord to assure the most effective operation of the Building's heating and air-conditioning. Tenant shall not adjust any controls other than room thermostats installed for Tenant's use. Tenant shall not tie, wedge or otherwise fasten open any water faucet or outlet. Tenant shall keep all corridor doors closed.

15.Tenant assumes full responsibility for protecting the Premises from theft, burglary, robbery and pilferage. Except during Tenant's normal business hours, Tenant shall keep all doors to the Premises locked and other means of entry to the Premises closed and secured.

16.Tenant or Tenant's employees shall not distribute literature, flyers, handouts or pamphlets of any kind in any of the common areas of the Project without the prior written consent of Landlord.

17.Tenant shall not sell or prepare any food or beverages in or from the Premises without Landlord's prior written consent, except for coffee, tea, soft drinks, candy, soup and microwave foods prepared for consumption by Tenant, Tenant’s servants, employees, agents, clients, customers, licensees, invitees, visitors, and contractors.

18.Tenant shall not permit the use of any apparatus for sound production or transmission in such manner that the sound so transmitted or produced shall be audible or vibrations therefrom shall be detectable beyond the Premises.

19.Tenant shall keep all electrical and mechanical apparatus free of vibration, noise and air waves which may be transmitted beyond the Premises.

20.No floor covering shall be affixed to any floor in the Premises by means of glue or other adhesive without Landlord's prior written consent, which consent shall not be unreasonably withheld.

21.Tenant shall not use the name of the Building for any purpose other than that of the business address of Tenant (which it may do, at its own risk, in the event the name of the Building changes), and shall not use any picture or likeness of the Building in any circulars, notices, advertisements or correspondence.

22.Tenant shall not obstruct sidewalks, entrances, passages, courts, corridors, vestibules, halls, elevators and stairways in or about the Building, nor shall Tenant place objects against glass partitions, doors or windows which would be unsightly from the Building's corridors, or from other areas of the Building.

23.Tenant shall not make any room-to-room canvass to solicit business from other tenants of the Building.

24.No additional locks or similar devices shall be attached to any door and no locks shall be changed without Landlord's prior written consent, which consent shall not be unreasonably withheld. Upon termination of this Lease or of Tenant's possession of the Premises, Tenant shall surrender all keys for door locks and other locks in or about the Premises and shall make known to Landlord the combination of all locks, safes, cabinets and vaults which are not removed by Tenant.

25.Tenant shall not install or operate any machinery or mechanical devices of a nature not directly related to Tenant's ordinary use of the Premises without Landlord's prior written consent.

26.Except in the case of any emergency in which event prompt notice shall be given to Landlord, Tenant shall not employ any person to perform any cleaning, repairing, janitorial, decorating, painting or other services or work in or about the Premises, except with the approval of Landlord, which approval shall not be unreasonably withheld or delayed.

27.Tenant shall ascertain from Landlord the maximum amount of electrical current which can safely be used in the Premises, taking into account the capacity of the electric wiring in the Building and the Premises and the needs of other tenants, and shall not use more than such safe capacity. Landlord's consent to the installation of electric equipment shall not relieve Tenant from the obligation not to use more electricity than such safe capacity.

28.Tenant shall not overload any floor or elevator and shall not install any heavy objects, safes, business machines, files or other equipment without having received Landlord's prior written consent as to size, maximum weight, routing and locations thereof. Safes, furniture, equipment, machines and other large or bulky articles shall be brought through the Building and into and out of the Premises at such times and in such manner as Landlord shall direct (including the designation of elevator) and at Tenant's sole risk and responsibility. Prior to Tenant's removal of any such articles from the Building, Tenant shall obtain written authorization therefore from Landlord.

29.Tenant shall not in any manner deface or damage the Building.

30.Tenant shall not bring into the Building or Premises inflammables such as gasoline, kerosene, naphtha and benzine, or explosives or any other articles of intrinsically dangerous nature.

31.Movement into or out of the Building of furniture or office equipment, or dispatch or receipt by Tenant of any merchandise or materials other than hand-delivered packages, which requires the use of elevators or stairways or movement through the Building entrances or lobby, shall be restricted to the hours designated by Landlord. Tenant assumes all risk of damage to any and all articles so moved, as well as injury to any person or property in such movement, and hereby agrees to indemnify Landlord against any loss resulting therefrom.

32.Landlord shall not be responsible for any lost or stolen property, equipment, money or jewelry from the Premises or the public areas of the Building regardless of whether such loss occurs when the Premises are locked.

33.The Premises shall not be used for housing, lodging, sleeping or for any immoral or illegal purpose.

34.The work of the janitor or cleaning personnel shall not be hindered by Tenant after 5:30 p.m. and the windows may be cleaned at any time. Tenant shall provide adequate waste and rubbish receptacles to prevent unreasonable cost to Landlord in discharging its obligations regarding cleaning services.

35.Tenant will refer all contractors or installation technicians performing any work on the Premises or the systems thereof rendering any service for Tenant for supervision and approval of Landlord, which approval shall not be unreasonably withheld, before performance of any contractual services.

36.Parking Regulations:

(i) Cars WILL NOT park in the designated "Reserved" spaces. There will be no parking in any area of the Project other than those areas clearly marked and defined for parking.

(ii) Parking will be on the basis of first-come, first-served except for Designated Parking Spaces.

(iii) Parkers will be expected to park their cars in an orderly manner within the marked stalls provided.

(iv) It is recommended that cars be left in a "brakes on, doors locked" condition at all times.

(v) No car will be allowed to park in any driveway area or in any manner which will interfere with the normal flow of traffic.

(vi) Cars parked illegally will be towed at the car owner's expense.

(vii) Tenant agrees that all its employees have been fully informed as to the content of these regulations.

(viii) Landlord or Landlord's agents and employees shall not be liable for and Tenant waives all claims resulting from any accident or occurrence in and upon the parking area.

(ix) All automobiles parked in the parking areas shall be in good condition and repair, utilized for personal transportation, not commercial in nature (excluding service vehicles while the person is performing services at the Premises) and driven and handled at the risk of the owner. Notwithstanding the foregoing, Tenant shall have the right to park (but not repair) not more than three (3) of Tenant’s service vans per night, one of which may be parked nightly on a regular basis and the remaining two (2) of which shall may only be parked nightly on an occasional basis.

(x) Automobile owner or owner's agents shall not wash, wax or otherwise clean or prep the interior/exterior of vehicles or perform any maintenance whatsoever on vehicles within the parking area or on any part of the parking lot servicing the Building.

(xi) In the event that automobile owner's use of the parking area violates any local, county or state law, regulation or ordinance, automobile owner's right to utilize the parking area shall immediately cease. In addition, in no event shall Tenant permit its employees, licensees, invitees or other occupants to use more than Tenant's Proportionate Share of the existing parking spaces for the Project.

(xii) Parking areas shall not be used to store vehicles or for parking large commercial or recreational vehicles.

Tenant shall be responsible for the observance of all the foregoing rules and regulations by Tenant's employees, agents, clients, customers, invitees, licensees and guests. Landlord shall not be responsible for any violation of the foregoing rules and regulations by other tenants of the Building and shall have no obligation to enforce the same against other tenants. Landlord shall have the right to amend these rules and regulations from time to time in accordance with the terms of the Lease.

Approved by Tenant:

TENANT:

LDMI TELECOMMUNICATIONS, INC.,

a Michigan corporation

By: /s/Michael Mahoney

Printed: Michael Mahoney

Its: CFO

 EXHIBIT C

DAILY JANITORIAL SERVICE

(a)All waste paper baskets and ashtrays are emptied and cleaned.

(b)All furniture and cleared desks are dusted as required.

(c)All carpeting is vacuum cleaned daily as required.

(d)All doors, doorknobs, and glass are wiped down as required.

(e)Walls are spot cleaned as required.

(f)Windows are spot cleaned as required.

            (g) All corridors, common areas, common area bathrooms, and elevators are cleaned daily, which includes washing all tile floors, washing out the sinks and stalls, vacuum    

                  cleaning the hallway carpeting, cleaning out the drinking fountains and spot cleaning the walls and mirrors where necessary.

       (h) All hard surface flooring shown on the Plans is vacuum cleaned daily as required. Such hard surface flooring will be washed on a bi-monthly basis.

Approved by Tenant:

TENANT:

LDMI TELECOMMUNICATIONS, INC.,

a Michigan corporation

By: /s/ Michael Mahoney

Printed: Michael Mahoney

Its: CFO

EXHIBIT D

SPECIAL PROVISIONS

D1 EXCESS TENANT IMPROVEMENT COSTS.

Landlord shall provide up to Nine Hundred Forty-Eight Thousand Eight Hundred Sixteen Dollars ($948,816.00) (the "Tenant Improvement Allowance") for the tenant improvements. Tenant shall be responsible for all costs in excess of the Tenant Improvement Allowance to construct the Tenant Improvements in accordance with the Plans. In the event the cost of completing the Tenant Improvements is less than the Tenant Improvement Allowance, Landlord shall retain the difference and Tenant shall have up to twelve (12) months to use the remaining balance of the Tenant Improvement Allowance for other improvements to the Premises or for other ancillary leasehold improvements, such as the installation of equipment, facilities and business communication facilities to the Premises, however, in no event shall such excess Tenant Improvement Allowance available for Tenant’s use for such ancillary costs exceed Ninety Four Thousand Eight Hundred Eighty One and 60/100 Two One Hundred Fifty Eighty Nine Thousand Seven Hundred Sixty Three and 20/100 Dollars ($94,551.60) ($189,763.20) ($250,000.00). If Tenant elects to use any or all of such remaining balance of the Tenant Improvement Allowance Tenant shall provide ten (10) days prior written notice to Landlord of its intent to use all or a portion of such remaining balance of the Tenant Improvement Allowance within thirty (30) days of such notice to Landlord. After the twelfth (12^th) lease month Tenant have no claim for and not be entitled to receive any such sums. In the event the estimated cost of completing the Tenant Improvements in accordance with the Plans as a result of Tenant changes shall exceed the Tenant Improvement Allowance, the Landlord shall provide Tenant with a Change Order (as defined below), documenting such increased cost and Tenant shall reimburse Landlord for such increased costs pursuant to the payment terms set forth in such Change Order.

D2 CHANGE ORDERS.

A.   Request for Change. Tenant may request changes to the Plans. In order to request a change, Tenant must give written notice to Landlord of its election to make changes to the Plans (the “Request for Change Notice”). Tenant shall describe in the Request for Change Notice such proposed changes and instruct Landlord whether or not Tenant desires Landlord to stop all construction of the Tenant Improvements. Within three (3) business days of receipt of Tenant’s Request for Change Notice, Landlord shall provide either: (a) Tenant with a written notice (the “Change Order”) describing the proposed work, the cost, and the delay to the TI Completion Date and/or increase the amount of days constituting the Renovation Period, if any; or, (b) a written notice to Tenant indicating the date by which it can respond to the Request for Change Notice with the information required under (a) above, and the delay of the TI Completion Date and/or the increase of the amount of days constituting the Renovation Period. Tenant shall have three (3) days to approve, in writing, the Change Order. In the event Tenant does not accept the Change Order within said three (3) day period, the Plans will remain as last approved by Tenant and Landlord shall continue with the construction of the Tenant Improvements, if pursuant to the Request for Change Notice, construction had been stopped.

B.   Landlord’s Consent to Change. Any changes by Tenant to the Plans shall be subject to Landlord’s prior written consent, as evidenced by Landlord’s delivery of a Change Order. Landlord shall not unreasonably withhold its consent to any such changes, so long as the changes do not create a Design Problem (as defined in Paragraph F below).

C.   Tenant Reimburses Landlord for Landlord’s Increased Costs. If any such changes requested by Tenant and approved by Landlord increase the cost to Landlord of the construction of the Tenant Improvements shown on the Plans, beyond the Tenant Improvement Allowance Landlord shall provide Tenant with Change Order(s) documenting such increased costs beyond the Tenant Improvement Allowance and Tenant shall reimburse Landlord for such increased costs beyond the Tenant Improvement Allowance pursuant to the payment terms set forth in the Change Order(s).

D.   Costs Defined. The costs charged by Landlord to Tenant pursuant to Paragraph C hereof shall be an amount equal to the costs incurred by Landlord beyond the Tenant Improvement Allowance to:

(a)   review the requested changes (including, without limitation, the cost of retaining outside engineering consultants);

(b)   revise the Plans; and

(c)   cause the Tenant Improvements, as reflected by the revised Plans, to be constructed to the extent those costs exceed the costs that Landlord would have had to pay to cause the Tenant Improvements to be constructed (as reflected by the then-existing Plans) if such changes had not been made.

E.   Change Order Constitutes “Tenant Delay.” If pursuant to the Request for Change Notice, Tenant requests to stop all work in process until it receives a Change Order, or, if any Change Order delays Landlord’s completion of the Tenant Improvements shown on the Plans, then such delay shall constitute a Tenant Delay. However, the first three (3) business days of delays resulting from change orders requested by Tenant (calculated on a cumulative basis), shall not constitute a Tenant Delay, provided only if such delay was not caused by Tenant’s request to stop construction. In addition, if pursuant to the Request for Change Notice, Tenant elects to stop all work in process until it receives a Change Order, such election shall constitute a Tenant Delay.

F.   Design Problem.The term “Design Problem” shall mean an alteration that will:

(a)   adversely affect the Building’s structural integrity as determined by the Landlord or Landlord’s architect;

(b)   possibly damage the building systems, such as the HVAC or electrical system;

(c)   not comply with applicable laws or codes;

(d)   adversely affect the interior or exterior appearance of the Building and/or the Common Areas.

D3 RIGHT OF FIRST REFUSAL.

D3.01                      (a)For purposes of this Lease, the following terms shall have the following meanings:

(i)The "Protected Space" shall mean outlined and identified as the “Protected Space” on Exhibit E.

(ii)The "Initial Tenants" shall mean all occupants of any portion of the Protected Space whose occupancy is pursuant to, under or through a lease with Landlord of such portion of the Protected Space that is in effect on the date of this Lease,

(b)Provided (i) Tenant is the Tenant originally named or Related Entity (defined in Section 13.01) herein, (ii) Tenant actually occupies all of the Premises originally demised under this Lease, or such space is occupied by Tenant or an approved successor and (iii) Tenant is not in has no uncured default under the terms and conditions of this Lease as of the date of the giving of the "RFR Notice" or the "RFR Space Inclusion Date" (as such terms are hereinafter defined), if at any time during the term of this Lease Landlord shall receive an offer to lease all or any part of the Protected Space from any person or entity other than an Initial Tenant (or their affiliates) which Landlord may desire to accept, Landlord shall offer to Tenant the right to lease the RFR Space (as defined below) by notifying Tenant in writing (the "RFR Notice") of the basic terms of such offer. The RFR Notice shall include the base rent, square footage and location of the space (which shall include only the Protected Space covered by the offer such described space being the “RFR Space”), tenant improvement allowance, and term of the offer to lease. If the space described in the offer to lease Landlord receives includes all or a portion of the Protected Space plus other space in the Project, Landlord shall have the RFR Space consist only of the Protected Space or portion thereof covered by the offer without the other space. If the space described in the offer to lease Landlord receives is for only a portion of the Protected Space, Landlord shall have the RFR Space consist of only such portion of the Protected Space. In addition, if the term described in the offer to lease Landlord receives extends beyond the Initial Term of this Lease, Landlord shall have the right, in its sole and absolute discretion, to have the RFR Notice state that the term for the RFR Space will be co-terminus with the Initial Term (and in such case Landlord shall have the right to make an appropriate adjustment to the base rent, tenant improvement allowance and other terms before stating them in the RFR Notice), or to have the RFR Notice state that the term for the RFR Space is the longer term.

D3.02 Tenant may accept the offer set forth in the RFR Notice by delivering to Landlord an unconditional acceptance (hereinafter called the "Tenant Acceptance") of such offer within ten (10) days after delivery by Landlord of the RFR Notice to Tenant. Tenant shall only have the right to accept the RFR Notice in its entirety, not in part, and only on the terms provided in the RFR Notice. If Tenant timely delivers the Tenant Acceptance, the RFR Space shall be added to and included in the Premises on the later to occur of (i) the day that Landlord receives the Tenant Acceptance or (ii) the date such RFR Space shall become available for Tenant's possession as set forth in the notice and if none is set forth in the notice, then determined in accordance with Section D5.03 (hereinafter called the "RFR Space Inclusion Date"). If Tenant does not accept the RFR Notice within the ten (10) day period set forth above, Landlord may (but shall not be obligated to) proceed to lease all or any portion of the RFR Space, and Tenant shall no longer have any rights with respect to the RFR Space whatsoever, whether all or any portion of such space is leased as described in the RFR Notice or otherwise at any time, to any person or entity and under any terms and conditions. Time shall be of the essence with respect to the giving of the Tenant Acceptance.

D3.03If Tenant delivers the Tenant Acceptance, Tenant agrees to accept the RFR Space in accordance with the terms of the RFR Notice and, if none are stated, then otherwise in its condition and state of repair existing as of the RFR Space Inclusion Date and understands and agrees that except as otherwise set forth in the RFR Notice, Landlord shall not be required to perform any work, supply any materials or incur any expense to prepare such space for Tenant's occupancy. Within thirty (30) days after giving the Tenant Acceptance, Tenant shall execute a lease amendment providing for the addition of the RFR Space to the Premises and the modification of all lease terms affected by the addition of the RFR Space to the Premises. Unless otherwise provided in the RFR Notice, the lease amendment shall provide that the RFR Space shall become available for Tenant's possession within ninety (90) days after the date of the RFR Notice and such date shall be considered the "Scheduled Occupancy Date" described in Section 2.04 of this Lease and the provisions of Sections 2 and 3 shall apply to the Plans for the Tenant Improvements, the construction of the Tenant Improvements, the payment for the Tenant Improvements, the delivery of possession of the RFR Space, the establishment of the RFR Inclusion Date and Commencement Date for the term for the RFR Space.

D3.04Tenant must accept all RFR Space offered by Landlord at any one time if it desires to accept any of such RFR Space.

D3.05Notwithstanding the foregoing, Tenant's rights hereunder are subject and subordinate, in each and every respect, to any rights of first refusal, options or other rights, however designated, of any tenant of the Building under any existing Building lease at the time of execution of this Lease.

D3.06All rights under this Section D3 shall terminate upon the expiration of the Initial Term of this Lease.

D3.07Landlord shall use its best efforts to comply with the provisions of this Section D3, but its failure to comply shall not constitute an event of default under this Lease.

D4 DEFERRED RENT.

D 4.01   Deferral Periods - As an inducement to rent the Premises, Tenant requests to modify the Base Rent (as that term is defined in the Lease) due for the periods, defined in the table below (collectively called the “Deferral Periods”), and Landlord is willing to do so pursuant to the terms set forth in Section D4.03 below.

Deferral Periods
Lease Month*	Deferral Period
6/1/03 - 6/30/03	the "First Deferral Period"
7/1/03 - 7/31/03	the "Second Deferral Period"
8/1/03 - 8/31/03	the "Third Deferral Period"
9/1/03 - 9/30/03	the "Fourth Deferral Period"
10/1/03 - 10/31/03	the "Fifth Deferral Period"
11/1/03 - 11/30/03	the "Sixth Deferral Period"
12/1/03 - 12/31/03	the "Seventh Deferral Period"
1/1/04 - 1/31/04	the "Eighth Deferral Period"
2/1/04 - 2/29/04	the "Ninth Deferral Period"
3/1/04 - 3/31/04	the "Tenth Deferral Period"
4/1/04 - 4/30/04	the “Eleventh Deferral Period”
5/1/04 - 5/31/04	the “Twelfth Deferral Period”
6/1/04 - 6/30/04	the "Thirteenth Deferral Period"
7/1/04 - 7/31/04	the "Fourteenth Deferral Period"
8/1/04 - 8/31/04	the "Fifteenth Deferral Period"
9/1/04 - 9/30/04	the "Sixteenth Deferral Period"
10/1/04 - 10/31/04	the "Seventeenth Deferral Period"
11/1/04 - 11/30/04	the "Eighteenth Deferral Period"
12/1/04 - 12/31/04	the "Nineteenth Deferral Period"
1/1/05 - 1/31/05	the "Twentieth Deferral Period"
2/1/05 - 2/28/05	the "Twenty-First Deferral Period"
3/1/05 - 3/31/05	the "Twenty-Second Deferral Period"
4/1/05 - 4/30/05	the “Twenty-Third Deferral Period”
5/1/05 - 5/31/05	the “Twenty-Fourth Deferral Period”

The term “Lease Month”, as used herein, shall be defined to mean a full calendar month.

*Predicated upon the first Lease Month commencing on June 2, 2003. If the first Lease Month does not commence on June 1, 2003, all Lease Months identified as the Deferral Periods shall be adjusted accordingly.

D 4.02   Deferralof Base Rent. The amounts defined in the table below the “Deferred Rent”, of the Base Rent due for each Deferral Period will be paid according to Paragraph D4.03 below, and the balance of the Base Rent will be paid according to the Lease.

For Deferral Periods (defined above)	DEFERRED RENT
First Deferral Period	$66,289.33, the "First Deferred Rent"
Second Deferral Period	$66,289.33, the "Second Deferred Rent"
Third Deferral Period	$66,289.33, the "Third Deferred Rent"
Fourth Deferral Period	$66,289.33, the "Fourth Deferred Rent"
Fifth Deferral Period	$66,289.33, the "Fifth Deferred Rent"
Sixth Deferral Period	$66,289.33, the "Sixth Deferred Rent"
Seventh Deferral Period	$66,289.33, the "Seventh Deferred Rent"
Eighth Deferral Period	$66,289.33, the "Eighth Deferred Rent"
Ninth Deferral Period	$66,289.33, the "Ninth Deferred Rent"
Tenth Deferral Period	$66,289.33, the "Tenth Deferred Rent"
Eleventh Deferral Period	$66,289.33. the “Eleventh Deferred Rent”
Twelfth Deferral Period	$66,289.33, the “Twelfth Deferred Rent”
Thirteenth Deferral Period	$33,943.34, the " Thirteenth Deferral Rent"
Fourteenth Deferral Period	$33,943.34, the "Fourteenth Deferral Rent"
Fifteenth Deferral Period	$67,886.67, the "Fifteenth Deferral Rent"
Sixteenth Deferral Period	$33,943.34, the "Sixteenth Deferral Rent"
Sixteenth Deferral Period	$33,943.34, the "Seventeenth Deferral Rent"
Eighteenth Deferral Period	$67,886.67, the "Eighteenth Deferral Rent"
Nineteenth Deferral Period	$33,943.34, the "Nineteenth Deferral Rent"
Twentieth Deferral Period	$33,943.34, the "Twentieth Deferral Rent"
Twenty-First Deferral Period	$67,886.67, the "Twenty-First Deferral Rent"
Twenty-Second Deferral Period	$33,943.34, the "Twenty-Second Deferral Rent"
Twenty-Third Deferral Period	$33,943.34, the “Twenty-Third Deferral Rent”
Twenty-Fourth Deferral Period	$33,943.34, the “Twenty-Fourth Deferral Rent”

D 4.03   Payment of the Deferred Rent. The unpaid total of Deferred Rent, for the Deferral Periods, shall be forgiven by Landlord at the expiration of the Initial Term of this Lease, so provided that Tenant has not suffered an uncured monetary Event of Default for which Landlord has exercised all its remedies under Sections 18.02, 18.03 or 18.04 of the Lease. Upon the occurrence of an Event of Default under the Lease (subject to any cure periods provided to Tenant), and pursuant to the provisions set forth in Section 18 of this Lease, the unpaid Deferred Rent together with accrued and unpaid interest at prime plus two percent (2%) per annum will be due in full and shall be payable.

D 4.04   Confirmation. Landlord and Tenant confirm that this Section D4, DEFERRED RENT is not an amendment of the term “Base Rent” as that term is used in the Lease. Tenant will pay its share of (“Common Area Expenses” or Operating Expenses”) for all other amounts due under the Lease without regard to this Section D4.

D 4.05   Confidentiality - Tenant will not record this Section D4 or a memorandum hereof, and will not otherwise disclose the terms of this Section D4 to anyone other than its attorneys, accountants or employees who need to know of its contents in order to perform their duties for Tenant or any party approved in writing by Landlord.

D5 RIGHT TO TERMINATE EARLY.

D5.01 Provided Tenant shall not have an uncured default under any of the terms of this Lease, Tenant has merged or consolidated with another company and such merger or consolidation requires Tenant to move outside the boundary lines of the State of Michigan, or if such merger or consolidation eliminates the need for the Premises to be used as the corporate headquarters and its ancillary offices by the resultant entity after such merger or consolidation, Tenant shall have the right (the "Tenant Termination Right") to terminate this Lease at the conclusion of the ninety-sixth (96^th )eighty fourth (84^th) lease month (the "Termination Date") of the Initial Term by paying an early termination fee of One Million Two Hundred Three Thousand Three Hundred Thirty-Six Dollars and 90/100 ($1,203,336.90) (the "Termination Fee"). In order to exercise the Tenant Termination Right, Tenant shall provide written notice to Landlord of its intent to terminate this Lease at least one (1) year prior to the Termination Date and pay the Termination Fee at the time the notice is given. If Tenant does not exercise the Tenant Termination Right, fails to provide Landlord with the one (1) year prior written notice, or fails to pay the Termination Fee at the time the notice is given, this Tenant Termination Right shall automatically terminate. This Tenant Termination Right is personal to Tenant and may not be transferred nor assigned in any way, except in connection with the above described merger or consolidation or to a Related Entity. Notwithstanding the foregoing, this right shall apply only to such space leased at the time of the execution of this Lease and shall not include space related to any Rights of First Refusal, Options, or other rights, howsoever designated in this Lease, unless Tenant also pays all unamortized cost related to such other space.

D5.02 Provided Tenant shall not have an uncured default under any of the terms of this Lease, in the event Landlord places a “Restricted Name” (as listed below) on the top of the Building during the Initial Term of the Lease, Tenant shall have the right (the "Restricted Name Termination Right") to terminate this Lease without the payment of any termination fee. In order to exercise the Tenant Termination Right, Tenant shall provide written notice to Landlord of its intent to terminate this Lease within thirty (30) days after the earlier of (i) the installation of the Restricted Name or (ii) written notice from Landlord that it intends to install a Restricted Name on the top of the Building. If Tenant does not exercise the Restricted Name Termination Right, fails to provide Landlord written notice within the thirty (30) day period, or if Landlord shall send a written notice of revocation of installation of the Restricted Name to tenant within ten (10) days after the delivery of the Tenant’s exercise notice and thereafter promptly remove the Restricted Name for the top of the Building, this Restricted Name Termination Right shall automatically terminate. This Restricted Name Termination Right is personal to Tenant and may not be transferred nor assigned in any way, except in connection with the above described merger or consolidation or to a Related Entity. The following are the “Restricted Names” :

McLeodUSA

Allegiance

XO

TDS Metrocom

Choice One

Sage Telecommunications

SBC Ameritech

Focal

Qwest

AT&T

Talk America

Bullseye

D6 WORK PERFORMED BY TENANT.

Tenant and Tenant’s agents and contractors may enter the Premises prior to completion of the Tenant Improvements in order to make the Premises ready for Tenant’s use and occupancy by means of activities including, but not limited to, furniture, telephone, and data installation and cabling as applicable. Such entry prior to completion of the Tenant Improvements is conditioned upon Tenant and Tenant’s agents, contractors, workmen, mechanics, suppliers, and invitees working in harmony and not interfering with Landlord and Landlord’s contractors in doing the Tenant Improvements or with other tenants and occupants of the Building. Tenant agrees that any such entry into the Premises shall be deemed to be under all of the terms, covenants, conditions, and provisions of the Lease (including, without limitation, all insurance agreements), except as to the covenant to pay Rent thereunder, and further agrees that Landlord shall not be liable in any way for any injury, loss, or damage which may occur to any items of work constructed by Tenant or to other property of Tenant that may be placed in the Premises prior to completion of the Tenant Improvements, the same being at Tenant’s sole risk. Landlord agrees to cooperate with Tenant and Tenant’s agents and contractors. Landlord, or its agent, shall retain physical control of the job site.

D8 TENANT REVIEW RIGHT.

Provided no Event of Default exists under the Lease, Tenant shall have the right, at its sole cost and expense, to review Landlord’s records at the Manager’s office relating to Real Estate Taxes and Operating Expenses for the Base Year and any subsequent year solely for the purpose of determining the amounts paid by Tenant pursuant to Section 6 of this Lease. However, Tenant may only conduct a review (i) upon reasonable notice to Landlord so as to allow Landlord sufficient time to compile its records and make them available to Tenant at Manager’s office and upon reimbursement to Landlord for its costs and expenses incurred in connection with such review; (ii) not more than sixty (60) days after Tenant receives the Annual Statement of Real Estate Taxes and Operating Expenses for the subject year, regardless of whether the year in question is the Base Year or any subsequent year; (iii) not more than once during any Lease Year; and (iv) by using an internal auditor or an independent certified public accountant acceptable to Landlord in all respects which are not working for Tenant on a contingency fee basis.

D9 NON-DISTURBANCE.

In the event of subordination of this Lease, the subordination shall be conditioned upon the agreement of the mortgagee or lessor that in the event of foreclosure or the assertion of any other rights under the mortgage or lease, this Lease and the rights of Tenant hereunder shall continue in effect and shall not be terminated or disturbed so long as Tenant continues to perform and no Event of Default exists under this Lease. Landlord shall use commercially reasonable efforts to obtain a subordination, non-disturbance and attornment agreement from its existing lender within thirty (30) days after the date hereof.

D10 OPTION TERM.

Provided that no default exists under this Lease and provided no default shall have existed within a period of one (1) year prior to the notification hereunder by Tenant, Tenant shall have the right to extend the Initial Term of this Lease for two (2) terms of five (5) Lease Years each (individually an "Option Term" and collectively the "Option Terms"), provided that Tenant shall deliver to Landlord written notice of its election to extend the Term of this Lease at least twelve (12) months prior to the expiration date of the Initial Term of this Lease. The failure of Tenant to exercise its right to extend the Lease for any Option Term shall void all subsequent Option Terms. Terms, covenants and conditions applicable to the Option Term shall be as then promulgated by Landlord, except as hereinafter specifically set forth. Except for the granting of this Option Term and except as expressly otherwise provided herein this Lease, the rent shall be adjusted as below. The Initial Term and the Option Terms, if exercised, are sometimes collectively referred to hereinafter as the "Term". Base Rent for each Option Term shall be as follows: the rent for the Option Terms shall be at 90% of then prevailing market levels for comparable renewal space at the Building but not, in any event, less than the Base Rent payable at the end of the then current Term.

Approved by Tenant:

TENANT:

LDMI TELECOMMUNICATIONS, INC.,

a Michigan corporation

By: /s/ Michael Mahoney

Printed: Michael Mahoney

Its: CFO

EXHIBIT E

PROTECTED SPACE

Approved by Tenant:

TENANT:

LDMI TELECOMMUNICATIONS, INC.,

a Michigan corporation

By: /s/ Michael Mahoney

Printed: Michael Mahoney

Its: CFO

EX-10.54

                     Exhibit 10.54

FIRST LEASE MODIFICATION

THE LEASE AGREEMENT dated January 28, 2003 by and between AMERICAN CENTER LLC, a Michigan Limited Liability Company f/k/a AMERICAN CENTER ACQUISITION, LLC, a Michigan Limited Liability Company successor in interest to HALL AMERICAN CENTER ASSOCIATES: LIMITED PARTNERSHIP, a Michigan Limited Partnership (the “Landlord”), and LDMI TELECOMMUNICATIONS INC., a Michigan corporation (the “Tenant”) for Suites #400 and #500 consisting of 38,336 rentable square feet (the “Premises” or “demised premises”) in the AMERICAN CENTER (the “Building”) 27777 Franklin Road, Southfield, Michigan 48034 (the “Project”) is hereby modified as follows:

1.Tenant shall lease Suite #1660 on an “as-is” basis (the “Additional Office Space”) consisting of 1,258 rentable / 1,108 usable square feet (as marked on Exhibit “A”) of Office Space for a term of ten years, six months to become effective June 1, 2003 and expire November 30, 2013. Landlord shall not be responsible for constructing any improvements in the Additional Office Space for the benefit of Tenant or any other person. Landlord’s delivery of the Additional Office Space to Tenant shall not constitute a representation, warranty or agreement, and Landlord shall have no responsibility or liability for, the completeness, design sufficiency, or the compliance of the Additional Office Space with any laws, rules or regulations of any governmental or other authority,

2.DELETION OF CERTAIN TERMS AND CONDITIONS - Section 1.01 (g), BASE RENT, of the Lease dated January 28, 2003 is deleted in its entirety and replaced with the following:

The Base Monthly Rent shall be:

Date	Existing	Additional Office Space	Total Monthly Base Rent	Annual Base Rent
6/1/03 - 5/31/04	$66,289.33	$2,175.29	$68,464.62	$821,575.44
6/1/04 - 5/31/05	$67,886.67	$2,227.71	$70,114.38	$841,372.56
6/1/05 - 5/31/06	$69,484.00	$2,280.13	$71,764.13	$861,169.56
6/1/06 - 5/31/07	$72,678.67	$2,384.96	$75,063.63	$900,763.56
6/1/07 - 5/31/08	$74,276.00	$2,437.38	$76,713.38	$920,560.56
6/1/08 - 5/31/09	$75,873.33	$2,489.79	$78,363.12	$940,357.44
6/1/09 - 5/31/10	$77,470.67	$2,542.21	$80,012.88	$960,154.56
6/1/10 - 5/31/11	$79,068.00	$2,594.63	$81,662.63	$979,951.56
6/1/11 - 5/31/12	$80,665.33	$2,647.04	$83,312.37	$999,748.44
6/1/12 - 5/31/13	$82,262.67	$2,699.46	$84,962.13	$1,019,545.56
6/1/13 - 11/30/13	$82,262.67	$2,699.46	$84,962.13	$509,772.78*
			Aggregate	$9,754,972.02

60;* total is for six months

3.Effective upon the date of this First Lease Modification, the Existing Office Space and the Additional Office Space for a total square footage of 37,398 usable / 39, 594 rentable square feet shall be called the Premises.

4.The Base Year shall remain 2004.

5.DELETION OF CERTAIN TERMS AND CONDITIONS - Section 1.01 (h), TENANT’S PROPORTIONATE SHARE, of the Lease dated January 28, 2003 is deleted in its entirety and replaced with the following:

TENANT'S PROPORTIONATE SHARE:

Tenant’s Proportionate Share of Operating Expenses, Utilities and Taxes:

39,594 Rentable square feet in the Premises divided by

488,465 Rentable square feet in the Building = 8.1058%

Tenant’s Proportionate Share of Office Tower Space Cleaning:

39,594 Rentable square feet in the Premises divided by

442,370 Rentable square feet in the Building 8.9504%

6.DELETION OF CERTAIN TERMS AND CONDITIONS - Section D1, EXCESS TENANT IMPROVEMENT COSTS, of the Lease dated January 28, 2003 is deleted in its entirety and replaced with the following:

EXCESS TENANT IMPROVEMENT COSTS - Landlord shall provide up to Nine Hundred Forty-Eight Thousand Eight Hundred Sixteen Dollars ($979,951.50) (the "Tenant Improvement Allowance") for the tenant improvements. Tenant shall be responsible for all costs in excess of the Tenant Improvement Allowance to construct the Tenant Improvements in accordance with the Plans. In the event the cost of completing the Tenant Improvements is less than the Tenant Improvement Allowance, Landlord shall retain the difference and Tenant shall have up to twelve (12) months to use the remaining balance of the Tenant Improvement Allowance for other improvements to the Premises or for other ancillary leasehold improvements, such as the installation of equipment, facilities and business communication facilities to the Premises, however, in no event shall such excess Tenant Improvement Allowance available for Tenant’s use for such ancillary costs exceed Ninety Four Thousand Eight Hundred Eighty One and 60/100 Two One Hundred Fifty Eighty Nine Thousand Seven Hundred Sixty Three and 20/100 Dollars ($94,551.60) ($189,763.20) ($250,000.00). If Tenant elects to use any or all of such remaining balance of the Tenant Improvement Allowance Tenant shall provide ten (10) days prior written notice to Landlord of its intent to use all or a portion of such remaining balance of the Tenant Improvement Allowance within thirty (30) days of such notice to Landlord. After the twelfth (12^th) lease month Tenant have no claim for and not be entitled to receive any such sums. In the event the estimated cost of completing the Tenant Improvements in accordance with the Plans as a result of Tenant changes shall exceed the Tenant Improvement Allowance, the Landlord shall provide Tenant with a Change Order (as defined below), documenting such increased cost and Tenant shall reimburse Landlord for such increased costs pursuant to the payment terms set forth in such Change Order.

7.DELETION OF CERTAIN TERMS AND CONDITIONS - Section D4.02, Deferral of Base Rent, of the Lease dated January 28, 2003 is deleted in its entirety and replaced with the following:

Deferralof Base Rent - The amounts defined in the table below the “Deferred Rent”, of the Base Rent due for each Deferral Period will be paid according to Paragraph D4.03 of the Lease, and the balance of the Base Rent will be paid according to the Lease.

For Deferral Periods (defined above)	DEFERRED RENT
First Deferral Period	$68,464.62, the "First Deferred Rent"
Second Deferral Period	$68,464.62, the "Second Deferred Rent"
Third Deferral Period	$68,464.62, the "Third Deferred Rent"
Fourth Deferral Period	$68,464.62, the "Fourth Deferred Rent"
Fifth Deferral Period	$68,464.62, the "Fifth Deferred Rent"
Sixth Deferral Period	$68,464.62, the "Sixth Deferred Rent"
Seventh Deferral Period	$68,464.62, the "Seventh Deferred Rent"
Eighth Deferral Period	$68,464.62, the "Eighth Deferred Rent"
Ninth Deferral Period	$68,464.62, the "Ninth Deferred Rent"
Tenth Deferral Period	$68,464.62, the "Tenth Deferred Rent"
Eleventh Deferral Period	$68,464.62. the “Eleventh Deferred Rent”
Twelfth Deferral Period	$68,464.62, the “Twelfth Deferred Rent”
Thirteenth Deferral Period	$35,057.19, the " Thirteenth Deferral Rent"
Fourteenth Deferral Period	$35,057.19, the "Fourteenth Deferral Rent"
Fifteenth Deferral Period	$70,114.38, the "Fifteenth Deferral Rent"
Sixteenth Deferral Period	$35,057.19, the "Sixteenth Deferral Rent"
Seventeenth Deferral Period	$35,057.19, the "Seventeenth Deferral Rent"
Eighteenth Deferral Period	$70,114.38, the "Eighteenth Deferral Rent"
Nineteenth Deferral Period	$35,057.19, the "Nineteenth Deferral Rent"
Twentieth Deferral Period	$35,057.19, the "Twentieth Deferral Rent"
Twenty-First Deferral Period	$70,114.38, the "Twenty-First Deferral Rent"
Twenty-Second Deferral Period	$35,057.19, the "Twenty-Second Deferral Rent"
Twenty-Third Deferral Period	$35,057.19, the “Twenty-Third Deferral Rent”
Twenty-Fourth Deferral Period	$35,057.19, the “Twenty-Fourth Deferral Rent”

8.NON-DISCLOSURE - Tenant will not record this Lease or a memorandum hereof, and will not otherwise disclose the terms of this Lease to anyone other than its attorneys, accountants or employees who need to know of its contents in order to perform their duties for Tenant. Any other disclosure will be an event of Default under the Lease. Tenant agrees that Landlord shall have the right to publish a "tombstone" or other promotional description of this Lease.

Except as hereinabove specifically provided to the contrary, all of the remaining terms, covenants, and agreements contained in said Lease, and all modifications thereafter, shall remain in full force and effect and shall be applicable to the Premises as described in said Lease is hereby acknowledged, ratified, and confirmed by the parties hereto.

TENANT:LANDLORD:

LDMI TELECOMMUNICATIONS, INC., a Michigan corporation	AMERICAN CENTER LLC, a Michigan Limited Liability Company f/k/a AMERICAN CENTER ACQUISITION, LLC, a Michigan Limited Liability Company successor in interest to HALL AMERICAN CENTER ASSOCIATES: LIMITED PARTNERSHIP, a Michigan Limited Partnership
	By: Southfield Office Manager, Inc.

BY: /s/ Michael MahoneyBY: /s/ Paul A. Stodulski

Printed  Michael Mahoney                                                                                                           Printed: Paul A. Stodulski - Secretary

DATED: 2/13/03 DATED: 2/13/03

EXHIBIT A

ADDITIONAL OFFICE SPACE

Approved by Tenant:

LDMI TELECOMMUNICATIONS, INC., a Michigan corporation

By: /s/ Michael Mahoney

Printed: Michael Mahoney

Its: CFO

EX-10.55

                     Exhibit 10.55

SECOND LEASE MODIFICATION

THE LEASE AGREEMENT dated January 28, 2003 and modified thereafter, by and between AMERICAN CENTER LLC, a Michigan Limited Liability Company f/k/a AMERICAN CENTER ACQUISITION, LLC, a Michigan Limited Liability Company (the “Landlord”), and LDMI TELECOMMUNICATIONS INC., a Michigan corporation (the “Tenant”) for Suites #400, #500 and #1660 consisting of 39,594 rentable square feet (the “Premises” or “demised premises”) in the AMERICAN CENTER (the “Building”) 27777 Franklin Road, Southfield, Michigan 48034 (the “Project”) is hereby modified as follows:

1. Tenant shall lease Storage Space #7 and Storage Space #8 (the “Storage Space”) consisting of 250 square feet (as marked on Exhibit “A”) for a term of ten years, six months to become effective June 1, 2003 and expire November 30, 2013.

2.DELETION OF CERTAIN TERMS AND CONDITIONS - Section 1.01 (g), BASE RENT, of the Lease dated January 28 2003 and modified thereafter, is deleted in its entirety and replaced with the following:

The Base Monthly Rent shall be:

Date	Existing	Storage Space	Total Monthly Base Rent	Period Base Rent
6/1/03 - 5/31/04	$68,464.62	$229.17	$68,693.80	$824,325.60
6/1/04 - 5/31/05	$70,114.38	$239.58	$70,353.96	$844,247.52
6/1/05 - 5/31/06	$71,764.13	$250.00	$72,014.13	$864,169.56
6/1/06 - 5/31/07	$75,063.63	$260.42	$75,324.05	$903,888.60
6/1/07 - 5/31/08	$76,713.38	$270.83	$76,984.21	$923,810.52
6/1/08 - 5/31/09	$78,363.12	$281.25	$78,644.38	$943,732.56
6/1/09 - 5/31/10	$80,012.88	$291.67	$80,304.55	$963,654.60
6/1/10 - 5/31/11	$81,662.63	$302.08	$81,964.71	$983,576.52
6/1/11 - 5/31/12	$83,312.37	$312.50	$83,624.88	$1,003,498.56
6/1/12 - 5/31/13	$84,962.13	$322.92	$85,285.05	$1,023,420.60
6/1/13 - 11/30/13	$84,962.13	$322.92	$85,285.05	$511,710.30*
			Aggregate	$9,790,034.94

* total is for six months

3.Effective upon the date of this Second Lease Modification, the Existing Office Space consisting of 37,398 usable / 39,594 rentable square feet of Office Space together with the Storage Space consisting of 250 usable square feet shall be called the Premises.

4.The Base Year shall remain 2004. The Tenant’s Proportionate Share shall remain:

Tenant’s Proportionate Share of Operating Expenses, Utilities and Taxes:

39,594 Rentable square feet in the Premises divided by

488,465 Rentable square feet in the Building = 8.1058%

Tenant’s Proportionate Share of Office Tower Space Cleaning:

39,594 Rentable square feet in the Premises divided by

442,370 Rentable square feet in the Building 8.9504%

6. DELETION OF CERTAIN TERMS AND CONDITIONS - Section D4.02, Deferral of Base Rent, of the Lease dated January 28, 2003 and modified thereafter, is deleted in its entirety and replaced with the following:

Deferralof Base Rent - The amounts defined in the table below the “Deferred Rent”, of the Base Rent due for each Deferral Period will be paid according to Paragraph D4.03 of the Lease, and the balance of the Base Rent will be paid according to the Lease.

For Deferral Periods (defined above)	DEFERRED RENT
First Deferral Period	$68,693.80, the "First Deferred Rent"
Second Deferral Period	$68,693.80, the "Second Deferred Rent"
Third Deferral Period	$68,693.80, the "Third Deferred Rent"
Fourth Deferral Period	$68,693.80, the "Fourth Deferred Rent"
Fifth Deferral Period	$68,693.80, the "Fifth Deferred Rent"
Sixth Deferral Period	$68,693.80, the "Sixth Deferred Rent"
Seventh Deferral Period	$68,693.80, the "Seventh Deferred Rent"
Eighth Deferral Period	$68,693.80, the "Eighth Deferred Rent"
Ninth Deferral Period	$68,693.80, the "Ninth Deferred Rent"
Tenth Deferral Period	$68,693.80, the "Tenth Deferred Rent"
Eleventh Deferral Period	$68,693.80. the “Eleventh Deferred Rent”
Twelfth Deferral Period	$68,693.80, the “Twelfth Deferred Rent”
Thirteenth Deferral Period	$35,176.98, the " Thirteenth Deferral Rent"
Fourteenth Deferral Period	$35,176.98, the "Fourteenth Deferral Rent"
Fifteenth Deferral Period	$70,353.96, the "Fifteenth Deferral Rent"
Sixteenth Deferral Period	$35,176.98, the "Sixteenth Deferral Rent"
Seventeenth Deferral Period	$35,176.98, the "Seventeenth Deferral Rent"
Eighteenth Deferral Period	$70,353.96, the "Eighteenth Deferral Rent"
Nineteenth Deferral Period	$35,176.98, the "Nineteenth Deferral Rent"
Twentieth Deferral Period	$35,176.98, the "Twentieth Deferral Rent"
Twenty-First Deferral Period	$70,353.96, the "Twenty-First Deferral Rent"
Twenty-Second Deferral Period	$35,176.98, the "Twenty-Second Deferral Rent"
Twenty-Third Deferral Period	$35,176.98, the “Twenty-Third Deferral Rent”
Twenty-Fourth Deferral Period	$35,176.98, the “Twenty-Fourth Deferral Rent”

8. MINOR WORK - The cost of performing or providing the Minor Work in accordance with the Plans attached as Exhibit “A”, shall be born by the Landlord.

9.NON-DISCLOSURE - Tenant will not record this Lease or a memorandum hereof, and will not otherwise disclose the terms of this Lease to anyone other than its attorneys, accountants or employees who need to know of its contents in order to perform their duties for Tenant. Any other disclosure will be an event of Default under the Lease. Tenant agrees that Landlord shall have the right to publish a "tombstone" or other promotional description of this Lease.

Except as hereinabove specifically provided to the contrary, all of the remaining terms, covenants, and agreements contained in said Lease, and all modifications thereafter, shall remain in full force and effect and shall be applicable to the Premises as described in said Lease is hereby acknowledged, ratified, and confirmed by the parties hereto.

TENANT:LANDLORD:

LDMI TELECOMMUNICATIONS, INC., a Michigan corporation	AMERICAN CENTER LLC, a Michigan Limited Liability Company
	By: Southfield Office Manager, Inc.

By: /s/ Michael Mahoney   By: /s/ Paul A. Stodulski

Printed: Micheal MahoneyPrinted:  Paul A. Stodulski - Secretary

DATED: 5/20/03                                                              0;                    DATED: 5/23/03 

EXHIBIT A

STORAGE SPAC
 

Minor Work: Landlord shall tear down dividing wall and eliminate door in Storage Space #8 as marked and finish to match.

Approved by Tenant:

LDMI TELECOMMUNICATIONS, INC., a Michigan corporation

By: /s/ Michael Mahoney

Printed: Michael Mahoney

Its: CFO

EX-10.56

                      Exhibit 10.56

THIRD LEASE MODIFICATION

THE LEASE AGREEMENT dated January 28, 2003 and modified thereafter, by and between AMERICAN CENTER LLC, a Michigan Limited Liability Company f/k/a AMERICAN CENTER ACQUISITION, LLC, a Michigan Limited Liability Company (the “Landlord”), and LDMI TELECOMMUNICATIONS INC., a Michigan corporation (the “Tenant”) for Suites #400, #500, #1660 consisting of 39,594 rentable square feetand Storage Space #7 and #8 consisting of 250 square feet (the “Premises” or “demised premises”) in the AMERICAN CENTER (the “Building”) 27777 Franklin Road, Southfield, Michigan 48034 (the “Project”) is hereby modified as follows:

1. Tenant shall lease Suite #1680 (the “Expansion Space”) consisting of 3,779 square feet (as marked on Exhibit “A”) to become effective February 1, 2004 and expire November 30, 2013.

2.DELETION OF CERTAIN TERMS AND CONDITIONS - Section 1.01 (g), BASE RENT, of the Lease dated January 28, 2003 is deleted in its entirety and replaced with the following:

The Base Monthly Rent shall be:

Date	Existing	Storage Space	Expansion Space	Total Monthly Base Rent	Total Base Rent for Period
6/1/03 - 1/31/04	$68,464.63	$229.17	$0.00	$68,693.80	$549,550.40
2/1/04 - 5/31/04	$68,464.63	$229.17	$6,534.52	$75,228.32	$300,913.28
6/1/04 - 5/31/05	$70,114.38	$239.58	$6,691.98	$77,045.94	$924,551.28
6/1/05 - 5/31/06	$71,764.13	$250.00	$6,849.44	$78,863.57	$946,362.84
6/1/06 - 5/31/07	$75,063.63	$260.42	$7,164.35	$82,488.40	$989,860.80
6/1/07 - 5/31/08	$76,713.38	$270.83	$7,321.81	$84,306.02	$1,011,672.24
6/1/08 - 5/31/09	$78,363.13	$281.25	$7,479.27	$86,123.65	$1,033,483.80
6/1/09 - 5/31/10	$80,012.88	$291.67	$7,636.73	$87,941.28	$1,055,295.36
6/1/10 - 5/31/11	$81,662.63	$302.08	$7,794.19	$89,758.90	$1,077,106.80
6/1/11 - 5/31/12	$83,312.38	$312.50	$7,951.65	$91,576.53	$1,098,918.36
6/1/12 - 5/31/13	$84,962.13	$322.92	$8,109.10	$93,394.15	$1,120,729.80
6/1/13 - 11/30/13	$84,962.13	$322.92	$8,109.10	$93,394.15	$560,364.90
				Aggregate	$10,668,809.86

  ;

3.Effective February 1, 2004, the Existing Office Space and the Expansion Space totaling 40,958 usable / 43,373 rentable square feet of Office Space together with the Storage Space consisting of 250 usable square feet shall be called the Premises (as marked on Exhibit “A-1”).

4.The Base Year shall remain 2004. Effective February 1, 2004 the Tenant’s Proportionate Share shall be changed to:

Tenant’s Proportionate Share of Operating Expenses, Utilities and Taxes:

43,373 Rentable square feet in the Premises divided by

488,465 Rentable square feet in the Building = 8.879%

Tenant’s Proportionate Share of Office Tower Space Cleaning:

43,373 Rentable square feet in the Premises divided by

442,370 Rentable square feet in the Building 9.805%

5. DELETION OF CERTAIN TERMS AND CONDITIONS - Section D4.02, Deferral of Base Rent, of the Lease dated January 28, 2003 and modified thereafter, is deleted in its entirety and replaced with the following:

Deferralof Base Rent - The amounts defined in the table below the “Deferred Rent”, of the Base Rent due for each Deferral Period will be paid according to Paragraph D4.03 of the Lease, and the balance of the Base Rent will be paid according to the Lease.

For Deferral Periods (defined above)	DEFERRED RENT
First Deferral Period	$68,693.80, the "First Deferred Rent"
Second Deferral Period	$68,693.80, the "Second Deferred Rent"
Third Deferral Period	$68,693.80, the "Third Deferred Rent"
Fourth Deferral Period	$68,693.80, the "Fourth Deferred Rent"
Fifth Deferral Period	$68,693.80, the "Fifth Deferred Rent"
Sixth Deferral Period	$68,693.80, the "Sixth Deferred Rent"
Seventh Deferral Period	$68,693.80, the "Seventh Deferred Rent"
Eighth Deferral Period	$68,693.80, the "Eighth Deferred Rent"
Ninth Deferral Period	$75,228.32, the "Ninth Deferred Rent"
Tenth Deferral Period	$75,228.32, the "Tenth Deferred Rent"
Eleventh Deferral Period	$75,228.32, the “Eleventh Deferred Rent”
Twelfth Deferral Period	$75,228.32, the “Twelfth Deferred Rent”
Thirteenth Deferral Period	$38,522.97, the " Thirteenth Deferral Rent"
Fourteenth Deferral Period	$38,522.97, the "Fourteenth Deferral Rent"
Fifteenth Deferral Period	$77,045.94, the "Fifteenth Deferral Rent"
Sixteenth Deferral Period	$38,522.97, the "Sixteenth Deferral Rent"
Seventeenth Deferral Period	$38,522.97, the "Seventeenth Deferral Rent"
Eighteenth Deferral Period	$77,045.94, the "Eighteenth Deferral Rent"
Nineteenth Deferral Period	$38,522.97, the "Nineteenth Deferral Rent"
Twentieth Deferral Period	$38,522.97, the "Twentieth Deferral Rent"
Twenty-First Deferral Period	$77,045.94, the "Twenty-First Deferral Rent"
Twenty-Second Deferral Period	$38,522.97, the "Twenty-Second Deferral Rent"
Twenty-Third Deferral Period	$38,522.97, the “Twenty-Third Deferral Rent”
Twenty-Fourth Deferral Period	$38,522.97, the “Twenty-Fourth Deferral Rent”

6. In addition to Section D1, EXCESS TENANT IMPROVEMENT COSTS, of the Lease dated January 28, 2003, Landlord agrees to provide the following Allowance toward Tenant Improvements of the Expansion Space:

EXCESS TENANT IMPROVEMENT COSTS - Landlord shall provide up to Ninety-three Thousand, Five Hundred Thirty and 25/100 Dollars ($93,530.25) (the "Tenant Improvement Allowance") for the tenant improvements. Tenant shall be responsible for all costs in excess of the Tenant Improvement Allowance to construct the Tenant Improvements in accordance with the Plans. In the event the cost of completing the Tenant Improvements is less than the Tenant Improvement Allowance, Landlord shall retain the difference. In the event the estimated cost of completing the Tenant Improvements in accordance with the Plans as a result of Tenant changes shall exceed the Tenant Improvement Allowance, the Landlord shall provide Tenant with a Change Order (as defined below), documenting such increased cost and Tenant shall reimburse Landlord for such increased costs pursuant to the payment terms set forth in such Change Order.

9.NON-DISCLOSURE - Tenant will not record this Lease or a memorandum hereof, and will not otherwise disclose the terms of this Lease to anyone other than its attorneys, accountants or employees who need to know of its contents in order to perform their duties for Tenant. Any other disclosure will be an event of Default under the Lease. Tenant agrees that Landlord shall have the right to publish a "tombstone" or other promotional description of this Lease.

Except as hereinabove specifically provided to the contrary, all of the remaining terms, covenants, and agreements contained in said Lease, and all modifications thereafter, shall remain in full force and effect and shall be applicable to the Premises as described in said Lease is hereby acknowledged, ratified, and confirmed by the parties hereto.

TENANT:LANDLORD:

LDMI TELECOMMUNICATIONS, INC., a Michigan corporation	AMERICAN CENTER LLC, a Michigan Limited Liability Company
	By: Southfield Office Manager, Inc.

By: /s/ Michael MahoneyBy: /s/ Paul A/ Stodulski 

Printed: Michael Mahoney         Printed: Paul A. Stodulski 

Its: CFO Its: Treasure 

Date: 11-10-03Date: 11-14-03

EXHIBIT A

EXPANSION SPACE

Approved by Tenant:

LDMI TELECOMMUNICATIONS, INC., a Michigan corporation

By: /s/ Michael Mahoney

Printed: Michael Mahoney

Its: CFO

Date: 11/10/03 

EXHIBIT A-1

PREMISES SPACE PLAN

Approved by Tenant:

LDMI TELECOMMUNICATIONS, INC., a Michigan corporation

By: /s/ Michael Mahoney

Printed: Michael Mahoney

Its: CFO

Date: 11/10/03

EX-10.57

                     Exhibit 10.57

FOURTH LEASE MODIFICATION

THE LEASE AGREEMENT, dated January 28, 2003 and modified thereafter, by and between AMERICAN CENTER LLC (“Landlord”), a Michigan Limited Liability Company f/k/a AMERICAN CENTER ACQUISITION, LLC, a Michigan Limited Liability Company, and LDMI TELECOMMUNICATIONS INC. (“Tenant”), a Michigan corporation, for Suites 400, 500, 1660, 1680 consisting of 43,373 rentable square feetand Storage Space #7 and #8 consisting of 250 square feet (the “Premises” or “demised premises”) in the AMERICAN CENTER (the “Building”) 27777 Franklin Road, Southfield, Michigan 48034 (the “Project”) is hereby modified as follows:

1.Satellite Dish

(a) Tenant, at its sole expense has the right to erect, maintain and operate on the roof of the building, one (1) two foot (2’) diameter satellite dish (“Tenant Facilities”). Tenant, at its sole expense shall do all work necessary to prepare and to install transmission lines, connecting the Tenant Facilities to the transmitters and receivers in the Premises. All of Tenant’s construction and installation work (“Tenant’s Work”) shall be performed at Tenant’s sole cost and expense and in a good and workmanlike manner, in accordance with Tenant’s specifications and subject to Landlord’s General Requirements for Building Alterations as outlined in Exhibit “G” attached, and the provisions outlined below and in such a manner as not to damage the roof or void the roof warranty. Title to the Tenant Facilities shall be in Tenant. Tenant shall remove all Tenant Facilities at its sole expense on or before the expiration or earlier termination of the term in such a manner so as not to void the roof warranty and, provided Tenant repairs any damage to the roof of the property caused by such removal.

(b) Landlord shall provide to Tenant, Tenant’s employees, agents and subcontractors with two (2) days prior written notice (except in the case of an emergency), access to the roof of the building. Tenant shall proceed with Tenant’s Work in accordance with the following schedule:

(i) Tenant shall submit to Landlord working drawings (“Working Drawings”) prepared by Tenant.

(ii) Landlord shall, within twenty (20) days of receipt, either approve such Working Drawings or designate by notice to Tenant the specific changes required to be made to the Working Drawings or request additional information, which Tenant shall provide; and Tenant shall resubmit the modified Working Drawings to Landlord within twenty (20) days. If Landlord fails, within such twenty (20) day period, either to approve the Working Drawings or to advise Tenant of the specific modifications to be made thereto in order to gain Landlord’s approval, the Working Drawings shall be deemed approved by Landlord on the expiration of such twenty (20) day period if no response is forthcoming.

(iii) Tenant shall have the right at any time with two (2) days prior written notice (except in the case of an emergency), following the full execution of this Agreement, access to the roof for the purposes of: making necessary engineering surveys, inspections, other reasonably necessary tests (“Tests”) and constructing the Tenant Facilities (in accord with (ii) above).

(c) Tenant at its expense will defend, indemnify, save and hold harmless Landlord, its licensee, servants, agents, employees, affiliated entities and contractors, from and against any loss, damage, claim of damage, liability or expense, (including attorney fees) to or for an any person or property, whether based on contract, tort, negligence or otherwise, arising directly or indirectly out of or in connection with the Tenant Facilities installed by Tenant or any other person, licensee, servant, agent, employee or contractor, for the Tenant Facilities, whatever the cause or an any litigation or other proceeding by or against Tenant, or any person, licensee, servant, agent, employee or contractor, for the Tenant Facilities.

(d) Tenant shall bear the cost of any damage to the Property and/or the roof of the Property, or any increase in the Operating Expenses or Real Estate Taxes that may be incurred as a result of the installation of the Tenant Facilities or Tenant’s Work.

(e) Tenant’s installation, maintenance and operation of the Tenant Facilities as defined herein shall not interfere with Landlord’s operation of the building, cause radio or television interference to any Tenant of the building, or cause signal interference to any communication equipment operating on the Property, provided such radio communication equipment was installed by Landlord or any of Landlord’s Tenants prior to the commencement of this Lease. In the event any such interference is caused by Tenant, Tenant shall, at its own expense, provide and install any filter, isolators and other equipment necessary to eliminate such interference.

(f) Tenant will be responsible for all marking and lighting requirements of the Federal Aviation Administration (“FAA”) or the Federal Communications Commission (“FCC”) specifically associated with the construction, maintenance, or operation of Tenant’s Facilities of the Property, but none other. Tenant shall indemnify and hold Landlord harmless from any fines or other liabilities caused by Tenant’s failure to comply with such requirements. Should Tenant be cited by either the FCC or FAA because Tenant’s Facilities are not in compliance and should Tenant fail to cure the conditions of noncompliance within the time frame allowed by the citing agency, Landlord upon notice may proceed to cure the conditions of noncompliance.

2. The Tenant Facilities shall be operated on a month to month basis for a term of no more than nine (9) years and six (6) months, commencing June 1, 2004 and expiring no later than November 30, 2013, with a Monthly Base Rent of Three Hundred and 00/100 Dollars ($300.00).

3. Non-Disclosure - Tenant will not record this Lease or a memorandum hereof, and will not otherwise disclose the terms of this Lease to anyone other than its attorneys, accountants or employees who need to know of its contents in order to perform their duties for Tenant. Any other disclosure will be an event of Default under the Lease. Tenant agrees that Landlord shall have the right to publish a "tombstone" or other promotional description of this Lease.

Except as hereinabove specifically provided to the contrary, all of the remaining terms, covenants, and agreements contained in said Lease, and all modifications thereafter, shall remain in full force and effect and shall be applicable to the Premises as described in said Lease is hereby acknowledged, ratified, and confirmed by the parties hereto.

LANDLORD:		TENANT:
AMERICAN CENTER LLC, a Michigan Limited Liability Company		LDMI TELECOMMUNICATIONS, INC., a Michigan corporation
By: Southfield Office Mananger, Inc.
By:	/s/ Paul Stodulski		By:	/s/ Michael Mahoney
Printed:	Paul Stodulski		Printed:	Michael Mahoney
Its:	Secretary		Its:	CFO
Date:	5-19-04		Date:	5-19-04

EXHIBIT G

GENERAL REQUIREMENTS FOR BUILDING ALTERATIONS

     1.  All work must meet all requirements of national, state and local building codes and Title III of the Americans With Disabilities Act (“ADA”).

    2.  Tenant/Contractor shall be responsible for making applications for, securing and paying for all permits, governmental, and utility company fees.

3.   Before work commences on any building alterations, final plans must be submitted to REDICO Management, Inc. for Landlord’s review and approval.

4.   All contractors must supply REDICO Management, Inc. with Workers Compensation and General Liability insurance, with coverages not less than those stated in the lease as required from the Tenant, naming REDICO Management, Inc. and Landlord as additional insureds. In addition, Tenant must supply REDICO Management, Inc. with the insurance coverage required by the lease, prior to the commencement of construction of tenant improvements.

5.   Tenant/Contractor shall at all times keep the Premises free from accumulation of waste material or rubbish caused by operations. At the completion of work, Tenant/Contractor shall remove its waste materials and rubbish from and about the Project as well as all its tools, construction equipment, machinery and surplus materials.

6.   Any dust producing work must be coordinated with the Building Management before proceeding, in order to prevent tripping the fire alarm. Tenant shall pay for the cost of any false alarms and shall provide Landlord with proof of such payment.

7.   All work shall be done so as not to hinder any building or tenant operations.

8.   All cold water supply lines must be insulated.

9.   Whenever a tap is made from an existing water valve, a new shut-off valve and space valve must be installed.

10.   All work with fire sprinkler systems and fire alarms must be coordinated with Building Management before commencement of such work.

11.   All window treatments must be building standard.

12.   All phone equipment must be installed in Tenant’s suite.

13.   Tenant shall be responsible to repair, at its own cost and expense, any damages to the common areas caused by Tenant’s work and/or Tenant’s contractors.

14.   A copy of the final certificate of occupancy and a set of as-built drawings must be sent to REDICO Management, Inc. before final payment.

15.   Copies of full unconditional waivers of lien for work performed holding Landlord and REDICO Management, Inc. harmless must be provided to REDICO Management, Inc.

It will be Tenant/Contractor’s responsibility through its architects/engineers to incorporate all applicable requirements of Title III of ADA into the Project. Any approval by Landlord of Tenant’s plan, however, cannot and does not warranty or guarantee that this Project will comply with all interpretations of the ADA requirements and/or the requirements of other federal, state and local laws, rules, codes, ordinances and regulations as they apply to this Project.

Approved by Tenant:

TENANT:
LDMI TELECOMMUNICATIONS, INC., a Michigan corporation
	By:	/s/ Michael Mahoney
	Printed:	Michael Mahoney
	Its:	CFO
	Date:	5-19-04

EX-10.58

                     Exhibit 10.58

FIFTH LEASE MODIFICATION

THE LEASE AGREEMENT, dated January 28, 2003, and modified thereafter, by and between AMERICAN CENTER LLC (“Landlord”), a Michigan Limited Liability Company, and LDMI TELECOMMUNICATIONS INC. (“Tenant”), a Michigan Corporation, for Suites 400, 500, 1660 & 1680 consisting of 43,373 rentable square feetand Storage Space #7 and #8 consisting of 250 square feet (the “Premises” or “demised premises”) in the AMERICAN CENTER (the “Building”) 27777 Franklin Road, Southfield, Michigan 48034 (the “Project”) is hereby modified as follows:

1.   Tenant Monument Signage -During the term of the Lease, Landlord shall permit Tenant to add, at Tenant’s sole cost and expense, Tenant’s name (the “Tenant Monument Signage”) to the exterior monument sign (the “Project Monument”). Tenant shall pay Landlord Two Hundred Fifty and 00/100 Dollars ($250.00) per month as Additional Rent for the Tenant Monument Signage. Landlord reserves the right to prescribe the position, size, color, lettering style, and any graphics or logos for the Tenant Monument Signage on the Project Monument. Furthermore, Landlord reserves the right at any time to relocate the position of the Tenant Monument Signage anywhere on the Project Monument. In the event Landlord elects to such relocation then Landlord shall relocate the Tenant Monument Signage at is sole cost and expense. At the expiration of the Lease term, Tenant will, at its sole cost and expense, remove the Tenant Monument Signage (whether or not Landlord has ever relocated it) from the Project Monument and pay the cost of restoration with respect to any damage or color change to the Project Monument arising from the removal of the Tenant Monument Signage.

2.   Tenant’s Designated Parking Spaces - Tenant shall lease one (1) additional Designated Parking Space at an increase of additional rent of $75.00, for a total of eleven (11) Designated Parking Spaces.

3.   The monthly Base Rent shall be as follows:

Date	Office Space	Storage Space	Satellite Dish	Monument Signage	11 Designated Parking Spaces	Total Monthly Base Rent	Total Rent for the Period
2/1/05 - 5/31/05	$76,806.36	$239.58	$300.00	$250.00	$825.00	$78,420.94	$313,683.76
6/1/05 - 5/31/06	$78,613.57	$250.00	$300.00	$250.00	$825.00	$80,238.57	$962,862.84
6/1/06 - 5/31/07	$82,227.98	$260.42	$300.00	$250.00	$825.00	$83,863.40	$1,006,360.80
6/1/07 - 5/31/08	$84,035.19	$270.83	$300.00	$250.00	$825.00	$85,681.02	$1,028,172.24
6/1/08 - 5/31/09	$85,842.40	$281.25	$300.00	$250.00	$825.00	$87,498.65	$1,049,983.80
6/1/09 - 5/31/10	$87,649.61	$291.67	$300.00	$250.00	$825.00	$89,316.28	$1,071,795.36
6/1/10 - 5/31/11	$89,614.28	$302.08	$300.00	$250.00	$825.00	$91,291.36	$1,095,496.32
6/1/11 - 5/31/12	$91,264.03	$312.50	$300.00	$250.00	$825.00	$92,951.53	$1,115,418.36
6/1/12 - 5/31/13	$93,071.23	$322.92	$300.00	$250.00	$825.00	$94,769.15	$1,137,229.80
6/1/13 - 11/30/13	$93,071.23	$322.92	$300.00	$250.00	$825.00	$94,769.15	$568,614.90
						Aggregate	$9,349,618.18

4.   Non-Disclosure - Tenant will not record this Fifth Lease Modification or a memorandum hereof, and will not otherwise disclose the terms of this Fifth Lease Modification to anyone other than its attorneys, accountants or employees who need to know of its contents in order to perform their duties for Tenant. Any other disclosure will be an event of Default under the Lease. Tenant agrees that Landlord shall have the right to publish a "tombstone" or other promotional description of this Fifth Lease Modification.

Except as hereinabove specifically provided to the contrary, all of the remaining terms, covenants, and agreements contained in said Lease, and all modifications thereafter, shall remain in full force and effect and shall be applicable to the Premises as described in said Lease is hereby acknowledged, ratified, and confirmed by the parties hereto.

LANDLORD:		TENANT:
AMERICAN CENTER LLC, a Michigan Limited Liability Company		LDMI TELECOMMUNICATIONS, INC., a Michigan Corporation
By: Southfield Office Manager, Inc.
By:	/s/ Paul Stodulski		By:	/s/ Michael Mahoney
Printed:	Paul Stodulski		Printed:	Michael Mahoney
Its:	Secretary		Its:	CFO
Date:	2-1-05		Date:	2-1-05

EX-10.59

                    Exhibit 10.59

SIXTH LEASE MODIFICATION

THE LEASE AGREEMENT, dated January 28, 2003, and modified thereafter, by and between AMERICAN CENTER LLC (“Landlord”), a Michigan Limited Liability Company, and LDMI TELECOMMUNICATIONS INC. (“Tenant”), a Michigan Corporation, for Suites 400, 500, 1660 & 1680 consisting of 43,373 rentable square feetand Storage Space #7 and #8 consisting of 250 square feet (the “Premises” or “demised premises”) in the AMERICAN CENTER (the “Building”) 27777 Franklin Road, Southfield, Michigan 48034 (the “Project”) is hereby modified as follows:

1.   Satellite Dish - Effective April 21, 2005, Tenant, at its sole expense has the right to erect, maintain and operate, one (1) additional two foot (2’) diameter satellite dish on the roof of the Building (together with the one (1) existing satellite dish, the “Tenant Facilities”), under the same terms and conditions as those prescribed in Section 1 of the Fourth Lease Modification dated May 19, 2004.

2.   The Tenant Facilities shall be operated on a month-to-month basis during the term of the Lease and, commencing May 1, 2005, Tenant shall pay a monthly Base Rent of Three Hundred and 00/100 Dollars ($300.00) per satellite dish.

3.   The monthly Base Rent shall be as follows:

Date	Office Space	Storage Space	Tenant Facilities	Monument Signage	11 Designated Parking Spaces	Total Monthly Base Rent	Total Rent for the Period
5/1/05 - 5/31/05	$76,806.36	$239.58	$600.00	$250.00	$825.00	$78,720.94	$78,720.94
6/1/05 - 5/31/06	$78,613.57	$250.00	$600.00	$250.00	$825.00	$80,538.57	$966,462.84
6/1/06 - 5/31/07	$82,227.98	$260.42	$600.00	$250.00	$825.00	$84,163.40	$1,009,960.80
6/1/07 - 5/31/08	$84,035.19	$270.83	$600.00	$250.00	$825.00	$85,981.02	$1,031,772.24
6/1/08 - 5/31/09	$85,842.40	$281.25	$600.00	$250.00	$825.00	$87,798.65	$1,053,583.80
6/1/09 - 5/31/10	$87,649.61	$291.67	$600.00	$250.00	$825.00	$89,616.28	$1,075,395.36
6/1/10 - 5/31/11	$89,614.28	$302.08	$600.00	$250.00	$825.00	$91,591.36	$1,099,096.32
6/1/11 - 5/31/12	$91,264.03	$312.50	$600.00	$250.00	$825.00	$93,251.53	$1,119,018.36
6/1/12 - 5/31/13	$93,071.23	$322.92	$600.00	$250.00	$825.00	$95,069.15	$1,140,829.80
6/1/13 - 11/30/13	$93,071.23	$322.92	$600.00	$250.00	$825.00	$95,069.15	$570,414.90
						Aggregate	$9,145,255.36

4.   Non-Disclosure - Tenant will not record this Sixth Lease Modification or a memorandum hereof, and will not otherwise disclose the terms of this Sixth Lease Modification to anyone other than its attorneys, accountants or employees who need to know of its contents in order to perform their duties for Tenant. Any other disclosure will be an event of Default under the Lease. Tenant agrees that Landlord shall have the right to publish a "tombstone" or other promotional description of this Sixth Lease Modification.

[Signature block on next page]

Except as hereinabove specifically provided to the contrary, all of the remaining terms, covenants, and agreements contained in said Lease, and all modifications thereafter, shall remain in full force and effect and shall be applicable to the Premises as described in said Lease is hereby acknowledged, ratified, and confirmed by the parties hereto.

LANDLORD:		TENANT:
AMERICAN CENTER LLC, a Michigan Limited Liability Company		LDMI TELECOMMUNICATIONS, INC., a Michigan Corporation
By: Southfield Office Manager, Inc.
By:	/s/ Paul Stodulski		By:	/s/ Michael Mahoney
Printed:	Paul Stodulski		Printed:	Michael Mahoney
Its:	Secretary		Its:	CFO
Date:			Date:

EX-10.60

                    Exhibit 10.60

SEVENTH LEASE MODIFICATION

THE LEASE AGREEMENT, dated January 28, 2003, and modified thereafter, by and between AMERICAN CENTER LLC (“Landlord”), a Michigan Limited Liability Company, and LDMI TELECOMMUNICATIONS INC. (“Tenant”), a Michigan Corporation, for Suites 400, 500, 1660 & 1680 consisting of 43,373 rentable square feetand Storage Space #7 and #8 consisting of 250 square feet (the “Premises” or “demised premises”) in the AMERICAN CENTER (the “Building”) 27777 Franklin Road, Southfield, Michigan 48034 (the “Project”) is hereby modified as follows:

1.   Satellite Dish - Effective October 1, 2005, Tenant, at its sole expense has the right to erect, maintain and operate, one (1) additional two foot (2’) diameter satellite dish on the roof of the Building (together with the two (2) existing satellite dishes, the “Tenant Facilities”), in the location indicated in Exhibit A attached hereto, under the same terms and conditions as those prescribed in Section 1 of the Fourth Lease Modification dated May 19, 2004.

2.   The Tenant Facilities shall be operated on a month-to-month basis for three (3) months from October 1, 2005 to December 31, 2005. Tenant shall pay a monthly Base Rent of Two Hundred and 00/100 Dollars ($200.00) for the one (1) additional satellite dish.

3.   Non-Disclosure - Tenant will not record this Sixth Lease Modification or a memorandum hereof, and will not otherwise disclose the terms of this Sixth Lease Modification to anyone other than its attorneys, accountants or employees who need to know of its contents in order to perform their duties for Tenant. Any other disclosure will be an event of Default under the Lease. Tenant agrees that Landlord shall have the right to publish a "tombstone" or other promotional description of this Sixth Lease Modification.

Except as hereinabove specifically provided to the contrary, all of the remaining terms, covenants, and agreements contained in said Lease, and all modifications thereafter, shall remain in full force and effect and shall be applicable to the Premises as described in said Lease is hereby acknowledged, ratified, and confirmed by the parties hereto.

LANDLORD:		TENANT:
AMERICAN CENTER LLC, a Michigan Limited Liability Company		LDMI TELECOMMUNICATIONS, INC., a Michigan Corporation
By: Southfield Office Manager, Inc.
By:	/s/ Paul Stodulski		By:	/s/ Michael Mahoney
Printed:	Paul Stodulski		Printed:	Michael Mahoney
Its:	Secretary		Its:	CFO
Date:			Date:

EXHIBIT A

SPACE PLAN

TENANT:
LDMI TELECOMMUNICATIONS, INC., a Michigan Corporation
	By:	/s/ Michael Mahoney
	Printed:	Michael Mahoney
	Its:	CFO
	Date:

EX-10.61

                Exhibit 10.61

LEASE

THIS LEASE, made as of the 31st day of March, 2000, by and between the Landlord and Tenant hereinafter defined in Sections 1(a) and 1(c), respectively.

W I T N E S S E T H:

1.Basic Lease Provisions.

The following sets forth basic data hereinafter referred to in this Lease and, where appropriate, constitute definitions of the terms hereinafter listed:

(a) Landlord: FCN Associates, L.L.C., a Michigan limited liability company.

(b) Landlord's Address: 26877 Northwestern Highway, Suite 101, P.O. Box 70, Southfield, Michigan 48037-0070.

(c) Tenant: MGC Communications, Inc. d/b/a Mpower Communications Corp., a Nevada corporation.

(d) Tenant's Address: 3301 North Buffalo Drive, Las Vegas, Nevada 89129

(e) Building: That certain office building known as 300 Galleria Officentre located in the City of Southfield, County of Oakland and State of Michigan.

(f) Demised Premises: The premises known as Suite 100, located on the first floor of the Building, containing approximately 12,079 square feet of usable floor area and 13,529 square feet of rentable floor area as shown on the floor plan attached hereto as Exhibit "A".

(g ) Commencement Date: June 1, 2000 (provided that in the event Tenant shall occupy the switch room area prior to June 1, 2002, the Lease shall commence on a pro-rata basis as to the switch room area and any ancillary areas used in connection therewith on the date Tenant so occupies the switch room area).

(h) Expiration Date: The last day of the one hundred twentieth (120^th) complete calendar month following the Commencement Date.

(i) Basic Rental:

a. For the period beginning on the Commencement Date and ending on May 31, 2001, Basic Rental shall be $25,930.58 per month ($23.00 per square foot per annum), provided in the event the Lease shall commence as to the switch room area and ancillary areas prior to June 1, 2000 pursuant to Section 1(g) above, then the Basic Rental payable for the period beginning on the Commencement Date and ending on May 31, 2000 shall be prorated based upon the total rentable area of the switch room area and ancillary areas so occupied;

b. For the period beginning on June 1, 2001 and ending on May 31, 2002, Basic Rental shall be $26,494.29 per month ($23.50 per square foot per annum);

c. For the period beginning on June 1, 2002 and ending on May 31, 2003, Basic Rental shall be $27,058.00 per month ($24.00 per square foot per annum);

d. For the period beginning on June 1, 2003 and ending on May 31, 2004, Basic Rental shall be $27,621.71 per month ($24.50 per square foot per annum);

e. For the period beginning on June 1, 2004 and ending on May 31, 2005, Basic Rental shall be $28,185.42 per month ($25.00 per square foot per annum);

f. For the period beginning on June 1, 2005 and ending on May 31, 2006, Basic Rental shall be $28,749.13 per month ($25.50 per square foot per annum);

g. For the period beginning on June 1, 2006 and ending on May 31, 2007, Basic Rental shall be $29,312.83 per month ($26.00 per square foot per annum);

h. For the period beginning on June 1, 2007 and ending on May 31, 2008, Basic Rental shall be $29,876.54 per month ($26.50 per square foot per annum);

i. For the period beginning on June 1, 2008 and ending on May 31, 2009, Basic Rental shall be $30,440.25 per month ($27.00 per square foot per annum); and

j. For the period beginning on June 1, 2009 and ending on May 31, 2010, Basic Rental shall be $31,003.96 per month ($27.50 per square foot per annum).

(j) Base Expenses: Expenses (as defined in Section 14.1(a) hereof) incurred for the 2000 calendar year.

(k) Deposit: $31,003.96.

(l) Renewal Option: Two (2) five (5)-year options (see Article 29 hereof).

(m) Tenant Improvement Allowance. $90,238.43 ($6.67 per rentable square foot).

2. Demised Premises.

2.1 Landlord, in consideration of the rents to be paid and the covenants to be performed by Tenant, and upon and subject to the terms and provisions herein set forth, does hereby lease unto Tenant the demised premises described in Section 1(f) hereof together with the non-exclusive right and easement to use the exterior and interior common and public areas and facilities which may from time-to-time be furnished by Landlord, including parking areas and decks (other than the enclosed parking garage), in common with Landlord and the tenants and occupants (their agents, employees, customers and invitees) of the Building and of adjacent buildings now or hereafter constructed (such exterior and interior common areas and facilities to be hereinafter referred to as the "common areas").

2.2 Landlord reserves the right (a) to designate certain parking areas for the exclusive use of designated tenants or for short term parking, (b) to make changes, alterations, additions, improvements, repairs or replacements in or to the Building (including the demised premises) and the fixtures and equipment thereof as well as the interior and exterior common areas, including the construction of additional buildings and parking decks; (c) to eliminate, substitute and/or rearrange the interior and exterior common areas as Landlord deems appropriate in its discretion, and (d) to erect, maintain and use pipes, ducts, conduits and wires in and through the demised premises in locations which will not materially interfere with Tenant's use thereof.

2.3 Landlord hereby grants to Tenant, with no additional payment to Landlord, the right, at Tenant's sole cost and expense, and on a non-exclusive basis, to install and operate such conduits, fiber optic and other cables and materials (the "Connecting Equipment") in the existing shafts, ducts, conduits, chases, utility closets and other facilities of the Building, as is necessary or desirable to connect Tenant’s equipment in the demised premises to Tenant's customers in the Building, to Tenant's communications network and to any local telephone company. All work by Tenant pursuant to this Section 2.3 shall be performed in accordance with Article 8 hereof. Landlord further grants to Tenant a right of access at all times to the areas where such Connecting Equipment is located for the purpose of maintaining, repairing, testing and replacing the same, provided (a) Tenant agrees to comply with Landlord's reasonable rules and regulations regarding access to the Building during non-business hours, and (b) Tenant shall not have the right to enter any other tenant space or non-public space in the Building other than the demised premises without the prior consent of Landlord.

3. Term and Construction.

3.1 The term of this Lease shall commence on the Commencement Date (as defined in Section 1(g) hereof) and expire on the Expiration Date (as defined in Section 1(h) hereof), subject to any extensions pursuant to Article 29 hereof.

3.2 Tenant shall accept the demised premises in their then "as is" condition as of the Commencement Date, and Tenant acknowledges that no representations as to the condition of the demised premises have been made by Landlord or its agents (except as expressly set forth in this Lease), and no obligations as to renovating, improving or adding to the same have been assumed by Landlord (except as expressly set forth in this Lease). Any changes, alterations or improvements which Tenant wishes to make to the demised premises shall be made at Tenant's sole cost and expense and in accordance with Article 8 and Exhibit “C” hereto. Landlord shall use its best efforts to substantially complete the Tenant Improvement Work (as defined in Exhibit "C" attached hereto) and obtain all governmental approvals required for the occupancy of the demised premises within sixty (60)days following the approval by Tenant of the Tenant Improvement Cost (as defined in Exhibit "C") subject to any long lead items

4. Basic Rental.

Tenant shall pay to Landlord as rent for the demised premises the Basic Rental set forth in Section 1(i) hereof. The installment of Basic Rental payable with respect to the first month of the term hereof shall be payable upon the execution of this Lease, and thereafter the Basic Rental shall be paid, in advance, upon the first day of each and every successive calendar month after the first month throughout the term of this Lease; provided, however, that if the Commencement Date is other than the first day of a calendar month or the Expiration Date is other than the last day of a calendar month, then the rental for such first or last fractional month shall be such portion of the monthly rental then in effect as the number of days in such fractional month bears to the total number of days in the calendar month.

5. Use and Occupancy.

The demised premises shall be used and occupied for office use and for the operation of a telecommunications facility and purposes incidental thereto and for no other purposes without the written consent of Landlord. Tenant shall comply with all requirements of the insurance policies, the American Insurance Association and the National Fire Protection Association relating to the demised premises and the Building, and Tenant shall not use the demised premises in any manner which will in any way increase the existing rate of, or otherwise affect, any fire or other insurance upon the demised premises or the Building, or adversely affect or interfere with any services required to be furnished by Landlord to Tenant or to any other tenants or occupants of the Building or with the proper and economical rendition of any such service. Tenant shall not use the demised premises for any purpose in violation of any law, municipal ordinance, or regulation, nor shall Tenant perform any acts or carry on any practices which may injure or cause waste in or about the demised premises or the Building or be a nuisance, disturbance or menace to the other tenants of the Building. Tenant shall not use, store or place in or upon the demised premises any toxic or hazardous substances or materials. Tenant shall comply with any occupancy certificate or directive issued pursuant to any law by any public officer as well as the provisions of all recorded documents affecting the demised premises, insofar as they relate to the condition, use or occupancy of the demised premises. If any use of the demised premises shall cause the rate of insurance on the Building to be increased, Tenant shall pay the amount of any such increase.

6. Utilities and Services.

6.1 Landlord will arrange for the furnishing of electricity to the demised premises, and Tenant shall pay for such electricity at the applicable secondary rates dictated by Detroit Edison. Such charge to Tenant for electricity shall be payable, as additional rent, in monthly installments payable within thirty (30) days following receipt of an invoice from Landlord.

6.2 Landlord shall furnish the demised premises with (a) heat, ventilation and air conditioning to the extent required for the occupancy of the demised premises to standards of comfort, and during such hours, as reasonably determined by Landlord for the Building (which hours, until Landlord shall otherwise designate, shall be from 7:00 a.m. to 7:00 p.m. on weekdays and from 8:00 a.m. to 3:00 p.m. on Saturdays; in each case except holidays), or as may be prescribed by any applicable policies or regulations adopted by any utility or governmental agency, provided Landlord shall not be required to provide supplemental ventilation and air conditioning to the demised premises required by reason of heat generating equipment or lighting other than building standard lights, or if the demised premises shall be occupied by a number of persons in excess of the design criteria of the air conditioning system, or to accommodate any other extraordinary ventilation or air conditioning requirements of Tenant, and (b) elevator service. It is understood and agreed that the Basic Rental does not include janitorial services in the demised premises. In the event Tenant desires to receive janitorial services in any portion of the demised premises, Tenant shall pay the cost of such services. In addition, Landlord shall replace all burned out fluorescent (only) tubes, ballasts and starters.

Landlord shall not be in default hereunder or be liable for any damages directly or indirectly resulting from, nor shall the rental herein reserved be abated or an actual or constructive eviction or partial eviction be deemed to have occurred by reason of: (1) the installation, use or interruption of use, of any equipment in connection with the furnishing of any of the foregoing services, (2) failure to furnish or delay in furnishing any such services when such failure or delay is caused by accident or any condition beyond the reasonable control of Landlord or by the making of necessary repairs or improvements to the demised premises or to the Building, or (3) any limitation, curtailment, rationing or restriction on use of water, electricity, steam, gas or any other form of energy serving the demised premises or the Building. Landlord shall use reasonable efforts diligently to remedy any interruption in the furnishing of such services.

Notwithstanding the preceding paragraph, in the event that Tenant is prevented from using, and does not use, the demised premises or any portion thereof, for more than five (5) consecutive business days as a result of any failure of Landlord to provide services to the demised premises as a result of the negligence or willful act of Landlord, its agents, contractors or employees, then Tenant's Basic Rental and additional rent shall be abated or reduced, as the case may be, after expiration of the 5-day period for such time that Tenant continues to be so prevented from using the demised premises or a portion thereof, in the proportion that the rentable area of the portion of the demised premises that Tenant is prevented from using, and does not use, bears to the total rentable area of the demised premises.

6.3 Tenant shall pay, as additional rent, the cost of providing (i) all heating, ventilating and air conditioning, including all related utility costs, to the demised premises in excess of that required to be provided by Landlord pursuant to Section 6.2 hereof, provided Landlord shall have no obligation to provide heating, ventilating or air conditioning to the extent same cannot be provided utilizing the existing equipment servicing the Building, (ii) janitorial service in excess of the service required to be provided by Landlord pursuant to Section 6.2 hereof, and (iii) any other special service required by reason of Tenant's use of the demised premises during other than normal business hours or for other than normal office purposes. Tenant shall notify Landlord in writing at least forty-eight (48) hours prior to the time it requires heating, ventilating and air conditioning during periods the same are not otherwise furnished by Landlord pursuant to Section 6.2 hereof.

7. Repairs.

7.1 Landlord shall maintain (i) the common areas, including any lobbies, stairs, elevators, corridors and restrooms, (ii) the windows and exterior walls, roofs, foundations and structure of the Building, and (iii) the mechanical, plumbing and electrical equipment servicing the Building, in good order and condition as reasonably determined by Landlord. Notwithstanding the foregoing, Tenant shall pay the cost of any repairs occasioned by the act, neglect or default of Tenant, its agents, employees, invitees and contractors.

7.2 Subject to the provisions of Section 7.1 hereof, Tenant shall keep the demised premises and every part thereof (including any special equipment installed in the demised premises such as supplemental HVAC equipment, transformers, plumbing, and fire extinguishers, and any other alterations, additions or improvements, whether installed by Landlord or Tenant) in good condition and repair. All repairs made by or on behalf of Tenant shall be made and performed in such manner as Landlord may designate, by contractors or mechanics approved by Landlord and in accordance with the rules and regulations relating thereto annexed to this Lease as Exhibit "B" and all applicable laws, codes and regulations. Subject to the provisions of Article 8 hereof regarding the obligation to restore improvements, Tenant shall, at the end of the term hereof, surrender to Landlord the demised premises in the same condition as when received, except for ordinary wear and tear, repairs required to be made by Landlord, and damage by fire, earthquake, act of God or the elements. Landlord has no obligation, and has made no promise, to alter, remodel, improve, repair, decorate or paint the demised premises or any part thereof and no representations respecting the condition of the demised premises or the Building have been made by Landlord to Tenant except as expressly set forth herein.

7.3 In the event that Landlord shall deem it necessary or be required by any governmental authority to repair, alter, remove, reconstruct or improve any part of the demised premises or of the Building, then the same shall be made by Landlord with reasonable dispatch (unless the same shall result from Tenant's act, neglect, default or mode of operation, in which event Tenant shall make all such repairs, alterations and improvements or, at Landlord's option, Landlord shall make such repairs, alterations and improvements and shall be promptly reimbursed by Tenant for the cost incurred by Landlord in so doing), and should the making of such repairs, alterations or improvements cause any interference with Tenant's use of the demised premises, such interference shall not relieve Tenant from the performance of its obligations hereunder nor shall such interference be deemed an actual or constructive eviction or partial eviction or result in an abatement of rental. Notwithstanding the preceding sentence, in the event that Tenant is prevented from using, and does not use, the demised premises or any portion thereof, for more than five (5) consecutive business days as a result of Landlord's performance of such work, then Tenant's Basic Rental and additional rent shall be abated or reduced, as the case may be, after expiration of the 5-day period for such time that Tenant continues to be so prevented from using the demised premises or a portion thereof, in the proportion that the rentable area of the portion of the demised premises that Tenant is prevented from using, and does not use, bears to the total rentable area of the demised premises.

8.Alterations.

Tenant shall not make any alterations, additions or improvements to the demised premises (whether or not the same may be structural in nature) or attach any fixtures or equipment thereto without Landlord's prior written consent, which consent shall not be unreasonably withheld. All such alterations, additions or improvements shall be performed by contractors or mechanics approved by Landlord (which approval shall not be unreasonably withheld) and in accordance with the rules and regulations annexed hereto as Exhibit "B" and all applicable laws, codes and regulations. Tenant shall furnish Landlord with such sworn statements and waivers of lien as Landlord shall request in connection with such work and shall comply with such other reasonable safeguards and controls as Landlord shall require. Any such alterations, additions or improvements made by either party hereto to the demised premises shall become the property of Landlord upon their installation or completion and shall remain upon, and be surrendered with, the demised premises at the expiration or termination of this Lease (except that Tenant shall have the right to remove any trade equipment, emergency generator and/or supplemental HVAC equipment installed by Tenant at Tenant’s cost and expense, provided (i) Tenant shall repair any damage caused by such removal, and (ii) in the event Tenant desires to remove supplemental HVAC equipment servicing a particular area, Tenant shall restore the base building system in such area, including ductwork, diffusers and VAV boxes, to the extent such improvements existed as of the date hereof). Notwithstanding the foregoing, (i) Landlord may require Tenant to remove any additions made by Tenant to the demised premises after the completion of the Tenant Improvements (as defined in Exhibit “C”) and to repair any damage caused by such removal (so long as Landlord shall have indicated that such removal and restoration may be required at the time Landlord consented to such addition), and (ii) if Tenant has not removed its property and equipment within ten (10) days after the expiration or termination of this Lease, Landlord may elect to retain the same as abandoned property.

9. Insurance and Indemnification.

9.1 Landlord shall provide and keep in force, or cause to be provided or kept in force, during the term hereof: (a) commercial general liability insurance with respect to Landlord's operation of the Building and the common areas for bodily injury or death and damage to property of others; (b) fire insurance (including standard extended coverage endorsement perils and leakage from fire protection devices) in respect of the Building and the common areas, excluding Tenant's trade fixtures, equipment, personal property and leasehold improvements; and (c) loss of rental income insurance; together with such other insurance as Landlord, in its sole discretion, elects to obtain. Insurance provided by Landlord shall have such limits of liability, deductibles and exclusions, and shall otherwise be on such terms and conditions as Landlord shall from time to time determine reasonable and sufficient. Tenant acknowledges that Landlord's loss of rental income insurance may provide that (i) payments thereunder by the insurer will be limited to a period of twelve (12) months following the date of any destruction and damage, and (ii) no insurance proceeds will be payable thereunder in the case of destruction or damage caused by any occurrence other than fire and other risks included in the standard extended coverage endorsement perils of a fire insurance policy.

9.2 Tenant shall indemnify and hold Landlord harmless from any damage to any property or injury to or death of any person occurring in, upon or about the demised premises, unless caused by the negligence or willful act of Landlord, its agents or employees. The foregoing indemnity obligation of Tenant shall include reasonable attorney's fees, investigation costs and all other costs and expenses incurred from the first notice that any claim or demand is to be made or may be made. The provisions of this Section 9.2 shall survive the termination of this Lease with respect to any damage, injury or death occurring prior to such termination.

9.3 Tenant shall procure and keep in effect commercial general liability insurance, including property damage and contractual liability, on an occurrence basis with bodily injury and property damage combined single limits of liability of not less than Two Million Dollars ($2,000,000) per occurrence, insuring Landlord and Tenant against any liability arising out of the ownership, use, occupancy or maintenance of the demised premises and all areas appurtenant thereto. From time to time, Tenant shall increase the limits of such policies to such higher limits as Landlord shall reasonably require.

9.4 Tenant shall procure and keep in effect fire insurance (including standard extended coverage endorsement perils and leakage from fire protection devices) for the full replacement cost of Tenant's trade fixtures, equipment, personal property and any leasehold improvements installed by Tenant.

9.5 Tenant shall deliver policies of the insurance required pursuant to Sections 9.3 and 9.4 hereof or certificates thereof to Landlord on or before the Commencement Date, and thereafter at least thirty (30) days before the expiration dates of the then current policies. Such insurance shall name Landlord as an additional insured, shall specifically include the liability assumed hereunder by Tenant, and shall provide that it is primary insurance and not excess over, or contributory with, any other valid, existing and applicable insurance in force for or on behalf of Landlord, and shall provide that Landlord shall receive thirty (30) days notice from the insurer prior to any cancellation or change of coverage.

10. Assignment and Subletting.

10.1 Except as expressly permitted pursuant to this Article 10, Tenant shall not, without the prior written consent of Landlord, which consent shall not be unreasonably withheld, assign, transfer, hypothecate, or mortgage this Lease or any interest herein or sublet the demised premises or any part thereof, or permit the use of the demised premises by any party other than Tenant. Any assignment, transfer (including transfers by operation of law or otherwise), hypothecation, mortgage, or subletting without such written consent shall give Landlord the right to terminate this Lease and to re-enter and repossess the demised premises, but Landlord's right to damages shall survive. No consent by Landlord to any assignment, transfer, hypothecation, mortgage or subletting on any one occasion shall be deemed a consent to any subsequent assignment, transfer, hypothecation, mortgage or subletting by Tenant or by any successors, assigns, transferees, mortgagees or sublessees of Tenant. The acceptance of rental by Landlord from any other person shall not be deemed a waiver by Landlord of any provision hereof. In the event of any such assignment, transfer, hypothecation, mortgage or subletting (including pursuant to Section 10.3 hereof), Tenant shall remain fully and primarily liable to perform all of the obligations of Tenant under this Lease and in the event of a default hereunder, Landlord may proceed directly against Tenant without the necessity of exhausting remedies against such assignee or successor.

10.2 If at any time or from time to time during the term of this Lease, Tenant desires to sublet all or any part of the demised premises or to assign this Lease, Tenant shall give notice to Landlord ("Tenant's Subletting Notice") setting forth the proposed subtenant or assignee and the terms of the proposed subletting or assignment. Landlord shall have the option, exercisable by notice given to Tenant within twenty (20) days after Tenant's Subletting Notice is received, (a) to consent or refuse to consent thereto, (b) if Tenant's request relates to a subletting, to terminate this Lease as to the portion of the demised premises to be sublet, or (c) if Tenant's request relates to an assignment, to terminate this Lease. In the event Landlord shall consent to the proposed subletting or assignment, Tenant shall be free for a period of one hundred eighty (180) days thereafter to sublet such space or to assign this Lease, provided that the subtenant or assignee and the terms of the sublease or assignment shall be as set forth in Tenant's Subletting Notice.

In the event Tenant shall so sublet a portion of the demised premises or assign this Lease, fifty percent (50%) of all of the sums or other economic consideration received by Tenant as a result of such subletting or assignment, whether denominated rentals or otherwise under the sublease or assignment, which exceed, in the aggregate, the total sums which Tenant is obligated to pay Landlord under this Lease (prorated to reflect obligations allocable to that portion of the demised premises subject to such sublease for the period of time covered by such sublease and after deducting therefrom the costs incurred by Tenant in connection with such sublease or assignment, such as brokerage commissions and tenant improvement costs) shall be payable to Landlord as additional rental under this Lease without affecting or reducing any other obligation of Tenant hereunder.

10.3 Notwithstanding the provisions of Sections 10.1 and 10.2 hereof, (i) Tenant may assign this Lease or sublet the demised premises or any portion thereof, without Landlord's consent and without extending any option to Landlord, to any entity which controls, is controlled by or is under common control with Tenant, provided that said assignee assumes, in full, the obligations of Tenant under this Lease, and (ii) Tenant shall have the right to enter into co-location and similar agreements, without Landlord’s consent and without extending any option to Landlord, with certain suppliers, licensees and customers of Tenant to permit such parties to install certain communications equipment in the demised premises in order to interconnect with Tenant’s equipment or to permit Tenant to manage or operate such parties’ equipment, or as may be required pursuant to applicable law.

10.4 Notwithstanding anything to the contrary contained herein, Tenant shall not have the right to assign this Lease or sublet any portion of the demised premises (including pursuant to Section 10.3 hereof) (i) for any medical or dental use, (ii) to any governmental or quasi-governmental agency, (iii) for any use which will generate substantially more pedestrian or automobile traffic than that generated by Tenant, (iv) in violation of any recorded restrictions applicable to the Building, (v) in violation of any provisions of any leases covering the Building or adjacent buildings, nor (vi) for any use which is incompatible with the operation of a first-class office building.

11. Damage or Destruction.

11.1 In the event the demised premises or any portion of the Building necessary for Tenant's use of the demised premises are damaged or destroyed in whole or in part during the term hereof by fire or other casualty insured against by Landlord's fire and extended coverage insurance policy covering the Building, Landlord shall, at its own cost and expense, repair and restore the same to tenantable condition with reasonable dispatch, and during such time as any portion of the demised premises is unusable by reason of such damage, the rent herein provided shall abate in such proportion as that part of the demised premises so rendered unusable bears to the entire demised premises.

11.2 Notwithstanding the provisions of Section 11.1 hereof, if, in the reasonable opinion of Landlord, (i) the demised premises cannot be restored to tenantable condition within a period of one hundred twenty (120) days following the commencement of such restoration work, and/or (ii) the cost of performing such restoration work exceeds the proceeds of such insurance by more than One Hundred Thousand Dollars ($100,000), then Landlord shall not be required to make any repairs and Landlord shall have the right to terminate this Lease upon written notice to Tenant within sixty (60) days after the date of such fire or other casualty, in which event (i) this Lease shall terminate ninety (90) days following Tenant’s receipt of such notice and Landlord and Tenant shall be released from any and all liability thereafter accruing hereunder, and (ii) Tenant shall remove any equipment or personal property from the demised premises within ninety (90) days following receipt of such notice.

11.3 If the demised premises are to be repaired under this Article 11, Landlord shall repair any injury or damage to the Building itself and the leasehold improvements in the demised premises to be constructed or installed by Landlord, excluding leasehold improvements in excess of building standard. Tenant shall perform, and pay the cost of, repairing any other improvements in the demised premises and shall be responsible for carrying such casualty insurance as it deems appropriate with respect to such other improvements. Tenant shall, at its own cost and expense, remove such of its furniture and other belongings from the demised premises as Landlord shall require in order to repair and restore the demised premises.

11.4 Landlord and Tenant do hereby waive and release each other of and from any and all rights of recovery, claims, actions or causes of action, against each other, their agents, officers and employees, for any loss or damage that may occur (including, without limitation, loss or damage to the demised premises, the Building, leasehold improvements, personal property, furniture and fixtures) by reason of fire, the elements or any other cause which could be insured against under the terms of standard fire and extended coverage insurance policies, regardless of cause or origin. Landlord and Tenant shall each obtain from their respective insurers under all policies of fire insurance maintained by either of them a waiver of all rights of subrogation which the insurer of one party might have against the other party consistent with the foregoing waiver, and Landlord and Tenant shall each indemnify the other against any loss or expense, including reasonable attorneys' fees, resulting from the failure to obtain such waiver from their respective insurers.

12. Eminent Domain.

If all or any substantial part of the demised premises shall be taken by any public authority under the power of eminent domain, then this Lease shall terminate as to the part so taken as of the date possession of that part shall be taken, and Landlord and Tenant shall each have the right to terminate this Lease upon written notice to the other, which notice shall be delivered within thirty (30) days following the date notice is received of such taking. In the event that neither party hereto shall terminate this Lease, Landlord shall, to the extent the proceeds of the condemnation award are available (other than any proceeds awarded for the value of any land taken), make all necessary repairs to the demised premises and the Building to render and restore the same to a complete architectural unit and Tenant shall continue in possession of the portion of the demised premises not taken under the power of eminent domain, under the same terms and conditions as are herein provided, except that the rent reserved herein shall be reduced in direct proportion to the amount of the demised premises so taken. All damages awarded for such taking shall belong to and be the property of Landlord, whether such damages be awarded as compensation for diminution in value of the leasehold or to the fee of the demised premises; provided, however, Landlord shall not be entitled to any portion of the award made separately to Tenant for removal and reinstallation of trade fixtures, loss of business, or moving expenses, provided such award to Tenant does not reduce the award otherwise payable to Landlord.

13. Rules and Regulations.

Tenant shall faithfully observe and comply with the rules and regulations set forth on Exhibit "B" annexed hereto and thereby made a part hereof, together with such other reasonable rules and regulations as Landlord shall promulgate from time to time which are of uniform applicability to all tenants of the Building and of which Tenant shall have received notice. Landlord shall not be responsible to Tenant for the noncompliance by any other tenant or occupant of the Building with any such rules and regulations.

14. Expenses and Taxes.

14.1 The following terms shall have the following meanings:

(a) The term "Expenses" shall mean the actual cost incurred by Landlord with respect to the operation, maintenance, repair, replacement and administration of the Building and the common areas, including, without limitation, (i) the costs incurred for air conditioning, mechanical ventilation, and heating of the Building and the common areas; cleaning (including janitorial services,but excluding janitorial services within premises leased to tenants); rubbish removal; snow removal; general landscaping and maintenance; window washing; elevators; escalators; porters and matron services; electric current; management fees; protection and security services; repairs, replacement, and maintenance; insurance; supplies; wages, salaries and employee benefits respecting service and maintenance employees and management staff; uniforms and working clothes for such employees and the cleaning thereof; expenses imposed pursuant to any collective bargaining agreement with respect to such employees; payroll, social security, unemployment and other similar taxes with respect to such employees and staff; sales, use and other similar taxes; Landlord's Michigan Single Business Tax; water rates and sewer charges and personal property taxes; depreciation of movable equipment and personal property which is, or should be, capitalized on the books of Landlord, and the cost of movable equipment and personal property which need not be so capitalized, as well as the cost of maintaining all such movable equipment and personal property; and any other costs, charges and expenses which, under generally accepted accounting principles and practices, would be regarded as maintenance and operating expenses, (ii) the cost of any capital improvements made to the Building or the common areas by Landlord after the Commencement Date that are intended to reduce other Expenses, or made to the Building or the common areas by Landlord after the date of this Lease that are required under any governmental law or regulation which was not applicable to the Building and the common areas as of the Commencement Date, such cost to be amortized over such reasonable period as Landlord shall determine, together with interest on the unamortized balance at the rate set forth in Section 14.4 hereof, and (iii) Taxes (as defined in Section 14.1(b) hereof).

Expenses shall not include depreciation on the Building or the common areas other than as set forth above; costs of services or repairs, replacements and maintenance which are paid for by proceeds of insurance, by other tenants (in a manner other than as provided in this Article 14), or third parties; tenant improvements; real estate brokerage commissions; interest; and capital items other than replacements and those referred to in clause (ii) above. Those Expenses for a given calendar year which vary with the occupancy of the Building, shall be adjusted in accordance with Landlord's reasonable estimate of what Expenses for such calendar year would have been had the total Building been occupied and had the total Building been furnished all services for the entire such calendar year. In the event any common areas service more than one building in the Galleria Officentre complex, the Expenses relating to such common areas shall be allocated among the buildings served thereby in a fair and equitable manner.

(b) The term "Taxes" shall mean the amount of all ad valorem real property taxes and assessments, special or otherwise, levied upon, or with respect to, the Building and the common areas, or the rent and additional charges payable hereunder, imposed by any taxing authority having jurisdiction. Taxes shall also include all taxes, levies and charges which may be assessed, levied or imposed in replacement of, or in addition to, all or any part of ad valorem real property taxes as revenue sources and which in whole or in part are measured or calculated by or based upon the Building, the freehold and/or leasehold estate of Landlord or Tenant, or the rent and other charges payable hereunder. Taxes shall include any expenses incurred by Landlord in determining or attempting to obtain a reduction of Taxes. Taxes shall be allocated to the calendar year in which same first become due.

(c) The term "Base Expenses" shall mean Expenses incurred for the 2000 calendar year.

(d) The term "Additional Expenses" for any given calendar year shall mean the amount, if any, by which the Expenses incurred by Landlord in such calendar year shall exceed Base Expenses.

(e) The term "Tenant's Share" shall mean the percentage arrived at by dividing the total square footage of rentable floor area in the demised premises by the total square footage of rentable floor area in the Building (including the demised premises). In the event the Building shall be increased or decreased during the term hereof, Tenant's Share shall be adjusted accordingly.

14.2 Tenant shall pay to Landlord, as additional rental, Tenant's Share of Additional Expenses in the manner and at the times herein provided.

Prior to the beginning of each calendar year, or as soon thereafter as practicable, Landlord shall give Tenant notice of Landlord's estimate of Tenant's Share of Additional Expenses for the ensuing calendar year. On or before the first day of each month during the ensuing calendar year, together with the payments of Basic Rental, Tenant shall pay to Landlord one-twelfth (1/12th) of such estimated amount, provided that until such notice is given, Tenant shall continue to pay the amount currently payable pursuant hereto. Landlord, at its option, may elect to request quarterly or semi-annual estimated payments by Tenant in lieu of monthly estimated payments.

Within one hundred eighty (180) days after the close of each calendar year, or as soon after such one hundred eighty (180) day period as practicable, Landlord shall deliver to Tenant a statement prepared by Landlord of Tenant's Share of Additional Expenses. If on the basis of such statement, Tenant owes an amount which is less than the estimated payments for such calendar year previously made by Tenant, Landlord shall credit such excess amount against the next payment(s) due from Tenant to Landlord of Additional Expenses. If on the basis of such statement, Tenant owes an amount which is more than the estimated payments for such calendar year with respect to Additional Expenses previously made by Tenant, Tenant shall pay the deficiency to Landlord within fifteen (15) days after delivery of such statement.

If the Commencement Date shall be other than the first day of a calendar year or the Expiration Date shall be other than the last day of a calendar year, Tenant's Share of Additional Expenses which is applicable to the calendar year in which such commencement or termination shall occur shall be prorated on the basis of the number of calendar days within such year as are within the term hereof.

14.3 In addition to the monthly rental and other charges to be paid by Tenant hereunder, Tenant shall pay (or reimburse Landlord if paid by Landlord) for any and all taxes (other than net income taxes and taxes included within Taxes) whether or not now customary or within the contemplation of the parties hereto upon, measured by or reasonably attributable to the cost or value of Tenant's equipment, furniture, fixtures and other personal property located in the demised premises or by the cost or value of any leasehold improvements made in or to the demised premises by or for Tenant (other than the Tenant Improvements) regardless of whether title to such improvements shall be in Tenant or Landlord. Tenant shall have the right to contest the amount of any taxes assessed upon the equipment, furniture, fixtures and personal property in the demised premises, provided Tenant first pays the amount assessed in a timely manner.

14.4 Except as above provided, all rental and additional rental shall be paid to Landlord without notice or demand and without deduction or offset, in lawful money of the United States of America at Landlord's address for notices hereunder or to such other person or at such other place as Landlord may from time to time designate in writing. All amounts payable by Tenant to Landlord hereunder, if not paid within ten (10) days following the date payment is due, shall bear interest from the due date until paid at a rate equal to two percent (2%) in excess of the then current "prime rate" of Michigan National Bank (or one (1) of the other five (5) largest banks in the metropolitan Detroit area), but not in excess of the highest rate permitted by applicable law. If no such prime rate is announced by Michigan National Bank (or any of such five (5) largest banks), the prime rate shall be deemed to be twelve percent (12%). Any and all money and charges required to be paid by Tenant pursuant to the terms of this Lease shall be paid as additional rental whether or not the same may be designated "additional rental" herein.

15. Quiet Enjoyment.

Landlord warrants that Tenant, upon paying the rental and other charges due hereunder and performing all of Tenant's obligations under this Lease, shall peacefully and quietly hold, occupy and enjoy the demised premises throughout the term hereof, without molestation or hindrance by any person holding under or through Landlord, subject, however, to the provisions of this Lease and to any mortgages or ground or underlying leases referred to in Article 16 hereof. Any diminution or shutting off of light, air or view by any structure which may be erected on lands adjacent to the Building shall in no way affect this Lease or impose any liability on Landlord.

16. Subordination.

16.1 This Lease is and shall be subject and subordinate, at all times, to the lien of any mortgage or mortgages which may now or hereafter be placed upon the demised premises, the Building or the land, and to all advances made or hereafter to be made upon the security thereof and to the interest thereon, and to any agreements at any time made modifying, supplementing, extending or replacing any such mortgages. At the option of a purchaser at a foreclosure sale, this Lease shall remain in full force and effect after, and not be extinguished by, the foreclosure of any such mortgage, and Tenant shall attorn to the purchaser at the foreclosure sale under all of the terms, conditions and covenants of this Lease for the balance of the term hereof, provided if this Lease is deemed terminated and extinguished by such a foreclosure, at the option of a purchaser at a foreclosure sale, Tenant shall enter into a new lease with the purchaser at the foreclosure sale upon the same terms and conditions as this Lease, except that the term of the new lease shall be equal to what would have been the balance of the term of this Lease had it not been terminated. Notwithstanding the foregoing, at the request of the holder of any of the aforesaid mortgage or mortgages, this Lease may be made prior and superior to such mortgage or mortgages.

16.2 At the request of Landlord or any mortgagee of the Building, Tenant shall execute and deliver such further instruments as may be reasonably required to implement the provisions of this Article 16.

17. Nonliability of Landlord.

17.1 Landlord shall not be responsible or liable to Tenant for any loss or damage that may be occasioned by or through the acts or omissions of persons occupying adjoining premises or any part of the area adjacent to, or connected with, the demised premises or any part of the Building, or for any loss or damage resulting to Tenant or its property from theft or a failure of the security systems in the Building, or from burst, stopped or leaking water, gas, sewer or steam pipes, or for any damage or loss of property within the demised premises from any cause whatsoever; and no such occurrence shall be deemed to be an actual or constructive eviction from the demised premises or result in an abatement of rental unless caused by the gross negligence or willful act of Landlord, its agents or employees.

17.2 In the event of any sale or transfer (including any transfer by operation of law) of the demised premises, Landlord (and any subsequent owner of the demised premises making such a transfer) shall be relieved from any and all obligations and liabilities under this Lease except such obligations and liabilities as shall have arisen during Landlord's (or such subsequent owner's) respective period of ownership, provided that the transferee assumes in writing all of the obligations of Landlord under this Lease which arise subsequent to the transfer. Tenant shall attorn to such new owner.

17.3 If Landlord shall fail to perform any covenant, term or condition of this Lease upon Landlord's part to be performed, and if as a consequence of such default, Tenant shall recover a money judgment against Landlord, such judgment shall be satisfied only against the right, title and interest of Landlord in the Building and out of rents or other income from the Building receivable by Landlord, or out of the consideration received by Landlord from the sale or other disposition of all or any part of Landlord's right, title and interest in the Building, and neither Landlord nor any of the members of the entity comprising the Landlord herein or the partners thereof, nor anyone claiming by, through or under Landlord, shall be liable for any deficiency. Notwithstanding anything to the contrary contained in the Lease, Tenant agrees, on its behalf and on behalf of its successors and assigns, that any liability of Landlord with respect to the Lease shall never exceed the amount of $5,000,000, and Tenant shall not be entitled to any judgment in excess of such amount.

18. Waiver.

One or more waivers of any covenant, condition or provision herein contained by Landlord shall not be construed as a waiver of a subsequent breach of the same or any other covenant, condition or provision herein contained; and the consent or approval by Landlord to or of any act by Tenant requiring Landlord's consent or approval shall not be deemed to waive or render unnecessary Landlord's consent or approval to or of any subsequent similar act by Tenant. If Landlord commences any summary or other proceeding for nonpayment of rent or the recovery of possession of the demised premises, Tenant shall not interpose any counterclaim of whatever nature or description in any such proceeding, unless the failure to raise the same would constitute a waiver thereof. To the extent permitted by law, Landlord and Tenant hereby waive trial by jury in any action, proceeding or counterclaim brought by either against the other on any matter whatsoever arising out of, or in any way connected with, this Lease.

19. Bankruptcy.

19.1 In the event (a) Tenant shall make a general assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts as they become due or shall file a petition in bankruptcy, or shall be adjudicated as insolvent or shall file a petition in any proceeding seeking any reorganization, arrangements, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, or shall file an answer admitting or fail timely to contest or acquiesce in the appointment of any trustee, receiver or liquidator of Tenant or any material part of its properties; (b) within ninety (90) days after the commencement of any proceeding against Tenant seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such proceeding shall not have been dismissed, or within ninety (90) days after the appointment, without the consent or acquiescence of Tenant, of any trustee, receiver or liquidator of Tenant or of any material part of its properties, such appointment shall not have been vacated; or (c) this Lease or any estate of Tenant hereunder shall be levied upon under any attachment or execution and such attachment or execution is not vacated within ten (10) days, then, and in any of such events, Landlord may terminate this Lease by written notice to Tenant; provided, however, if the order of court creating any of such disabilities shall not be final by reason of the pendency of such proceedings, or appeal from such order, or if the petition shall have been withdrawn or the proceedings dismissed within ninety (90) days after the filing of the petition, then Landlord shall not have the right to terminate this Lease so long as Tenant performs its obligations hereunder.

19.2 If, as a matter of law, Landlord has no right on the bankruptcy of Tenant to terminate this Lease, then if Tenant, as debtor, or its trustee, wishes to assume or assign this Lease, in addition to curing or adequately assuring (as defined below) the cure of all defaults existing under this Lease on Tenant's part on the date of filing of the proceeding, Tenant, as debtor, or the trustee or assignee, must also furnish adequate assurances (as defined below) of future performance under this Lease. For the purposes hereof, (i) "adequate assurance" of curing defaults existing as of the date of filing of the proceeding shall mean the posting with Landlord of a sum in cash sufficient to defray the cost of such a cure, and (ii) "adequate assurance" of future performance under this Lease shall mean posting a cash deposit equal to the rent and all other charges payable by Tenant hereunder (including charges payable under Article 14 hereof) for three (3) months of the term, and in the case of an assignee, assuring Landlord that the assignee is financially capable of assuming this Lease, and that its use of the demised premises will not be detrimental to the other tenants in the Building or Landlord. In a reorganization under Chapter 11 of the Bankruptcy Code, the debtor or trustee must assume this Lease or assign it within one hundred twenty (120) days from the filing of the proceeding, or he shall be deemed to have rejected and terminated this Lease.

20. Landlord's Remedies.

20.1 In the event Tenant shall fail to pay the rent or any other obligations involving the payment of money reserved herein when due, Landlord shall give Tenant written notice of such default and if Tenant shall fail to cure such default within ten (10) days after receipt of such notice, Landlord shall, in addition to its other remedies provided herein or at law or in equity, have the remedies set forth in Section 20.3 below.

20.2 If Tenant shall be in default in performing any of the terms of this Lease other than the payment of rent or any other obligation involving the payment of money, Landlord shall give Tenant written notice of such default, and if Tenant shall fail to cure such default within thirty (30) days after the receipt of such notice, or if the default is of such a character as to require more than thirty (30) days to cure, then if Tenant shall fail within said thirty (30) day period to commence or thereafter proceed diligently to cure such default within a reasonable period of time (not to exceed ninety (90) days after the receipt of such notice), then, and in either of such events, Landlord may (at its option and in addition to its other remedies) cure such default for the account of Tenant and any sum so expended by Landlord shall be additional rent for all purposes hereunder, including Section 20.1 above, and shall be paid by Tenant with the next monthly installment of rent.

20.3  If any rent or any other obligation involving the payment of money shall be due and unpaid or Tenant shall be in default upon any of the other terms of this Lease, and such default has not been cured after notice and within the time periods provided in Sections 20.1 and 20.2 above, or if the demised premises are abandoned or vacated, then Landlord, in addition to its other remedies, shall have the immediate right to terminate this Lease and/or recover possession of the demised premises. Should Landlord elect to re-enter or take possession pursuant to legal proceedings or any notice provided for by the law, Landlord may relet the premises or any part thereof on such terms and conditions as Landlord shall in its sole discretion deem advisable. The avails of such reletting shall be applied first, to the payment of any indebtedness of Tenant to Landlord other than rent due hereunder; second, to the payment of any reasonable costs of such reletting, including the cost of any reasonable alterations and repairs to the demised premises; third, to the payment of rent due and unpaid hereunder; and the residue, if any, shall be held by Landlord and applied in payment of future rent as the same may become due and payable hereunder. Should the avails of such reletting during any month be less than the monthly rent reserved hereunder, then Tenant shall during each such month pay such deficiency to Landlord. The obligations of Tenant shall survive any termination of this Lease pursuant to this Section 20.3.

20.4 All rights and remedies of Landlord hereunder shall be cumulative and none shall be exclusive of any other rights and remedies allowed by law.

20.5 If as a result of any breach or default in the performance of any of the provisions of this Lease, either party uses the services of an attorney in order to secure compliance with such provisions or recover damages therefor, or to terminate this Lease or evict Tenant from the demised premises, the prevailing party shall be reimbursed by the other party upon demand for any and all attorneys' fees and expenses so incurred by the prevailing party.

20.6 In the event Tenant shall abandon or surrender the demised premises, or be dispossessed by process of law or otherwise, any personal property belonging to Tenant and left on the demised premises shall be deemed to be abandoned, or, at the option of Landlord, may be removed by Landlord at Tenant's expense.

21. Holding Over.

It is hereby agreed that in the event of Tenant holding over after the termination of this Lease, thereafter the tenancy shall be from month to month in the absence of a written agreement to the contrary, and Tenant shall pay to Landlord a monthly occupancy charge equal to one hundred fifty percent (150%) of the sum of (a) the monthly Basic Rental payable hereunder for the last lease year, plus (b) all other charges payable by Tenant under this Lease for the last lease year, such charge to be payable from the expiration or termination of this Lease until the end of the calendar month in which the demised premises are delivered to Landlord in the condition required herein, and Landlord's right to damages for such illegal occupancy shall survive.

22. Entire Agreement.

This Lease shall constitute the entire agreement of the parties hereto; all prior agreements between the parties, whether written or oral, are merged herein and shall be of no force and effect. This Lease cannot be changed, modified or discharged orally, but only by an agreement in writing signed by the party against whom enforcement of the change, modification or discharge is sought.

23. Notices.

All notices, consents, requests, demands, designations or other communications which may or are required to be given by either party to the other hereunder shall be in writing and shall be deemed to have been duly given when personally delivered or deposited in the United States mail, certified or registered, return receipt requested, postage prepaid, or sent by U.S. Express Mail or any nationally recognized overnight carrier with a signed receipt obtained upon delivery, and addressed as follows: (a) to Tenant at the address set forth in Section 1(d) hereof with a copy to Tenant at 171 Sully’s Trail, Suite 202, Pittsford, New York, Attention: Legal Department, or to such other place as Tenant may from time to time designate in a notice to Landlord, or delivered to Tenant at the demised premises, (b) to Landlord at the address set forth in Section 1(b) hereof, or to such other place as Landlord may from time to time designate in a notice to Tenant. Tenant hereby appoints as its agent to receive the service of all dispossessory or distraint proceedings and notices thereunder the person in charge of or occupying the demised premises at the time, and if no person shall be in charge of or occupying the demised premises at the time, then such service may be made by attaching the same to the main entrance of the demised premises.

24. Inability to Perform.

If, by reason of the occurrence of unavoidable delays due to acts of God, governmental restrictions, strikes, labor disturbances, shortages of materials or supplies or for any other cause or event beyond Landlord's reasonable control, Landlord is unable to furnish or is delayed in furnishing any utility or service required to be furnished by Landlord under the provisions of this Lease or any collateral instrument, or is unable to perform or make, or is delayed in performing or making, any installations, decorations, repairs, alterations, additions or improvements required to be performed or made under this Lease or under any collateral instrument, or is unable to fulfill, or is delayed in fulfilling, any of Landlord's other obligations under this Lease or any collateral instrument, no such inability or delay shall constitute an actual or constructive eviction in whole or in part, or entitle Tenant to any abatement or diminution of rental or other charges due hereunder or relieve Tenant from any of its obligations under this Lease, or impose any liability upon Landlord or its agents by reason of inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's business, or otherwise. If, by reason of the occurrence of unavoidable delays due to acts of God, governmental restrictions, strikes, labor disturbances, shortages of materials or supplies or for any other cause or event beyond Tenant’s reasonable control, Tenant is unable to perform its obligations under this Lease (other than Tenant’s obligations to pay rent hereunder), Tenant shall be excused from the performance of such obligations for the period of any delay caused by any such event.

25. Security Deposit.

Upon the execution of this Lease, Tenant has deposited with Landlord the amount set forth in Section 1(k) hereof (hereinafter referred to as the "Deposit"). The Deposit shall be held by Landlord as security for the faithful performance by Tenant of all of the provisions of this Lease to be performed or observed by Tenant. If Tenant fails to pay rent or other charges due hereunder, or otherwise defaults with respect to any provision of this Lease, Landlord may, but shall have no obligation to, use, apply or retain all or any portion of the Deposit for the payment of any rent or other charge in default or for the payment of any other sum to which Landlord may become obligated by reason of Tenant's default or to compensate Landlord for any loss or damage which Landlord may suffer thereby. If Landlord so uses or applies all or any portion of the Deposit, Tenant shall, within ten (10) days after demand therefor, deposit cash with Landlord in an amount sufficient to restore the Deposit to the full amount thereof. Landlord shall not be required to keep the Deposit separate from its general accounts. If Tenant performs all of Tenant's obligations hereunder, the Deposit, or so much thereof as has not theretofore been applied by Landlord, shall be returned, without payment of interest or other increment for its use, to Tenant (or, at Landlord's option, to the last assignee, if any, of Tenant's interest hereunder) at the expiration of the term hereof and after Tenant has vacated the demised premises. No trust relationship is created herein between Landlord and Tenant with respect to the Deposit.

26. Liens.

Any mechanic's lien filed against the demised premises or the Building for work claimed to have been done or materials claimed to have been furnished to Tenant shall be discharged by Tenant within ten (10) days thereafter. For the purposes hereof, the bonding of such lien by a reputable casualty or insurance company reasonably satisfactory to Landlord shall be deemed the equivalent of a discharge of any such lien. Should any action, suit, or proceeding be brought upon any such lien for the enforcement or foreclosure of the same, Tenant shall defend Landlord therein, by counsel satisfactory to Landlord, and pay any damages and satisfy and discharge any judgment entered therein against Landlord.

27. Entry by Landlord.

27.1 Landlord and its designees may enter the demised premises at reasonable hours and upon reasonable notice (except in the event of an emergency or any entry to perform janitorial services requested by Tenant) to (a) inspect the same, (b) exhibit the same to prospective purchasers, lenders or tenants, (c) determine whether Tenant is complying with all of its obligations hereunder, (d) supply janitorial service and any other services to be provided by Landlord to Tenant hereunder, (e) post notices of nonresponsibility, and (f) make repairs to the demised premises, to any adjoining space or to any other portion of the Building, provided that all such work shall be done as promptly as reasonably possible. Tenant hereby waives any claim for damages for any injury or inconvenience to, or interference with, Tenant's business, any loss of occupancy or quiet enjoyment of the demised premises or any other loss occasioned by such entry.

27.2 Landlord shall at all times have and retain a key with which to unlock all of the doors in, on or about the demised premises (excluding Tenant's vaults, safes and similar areas designated in writing by Tenant in advance); and Landlord shall have the right to use any and all means which Landlord may deem proper to open said doors in any emergency in order to obtain entry to the demised premises, and any entry to the demised premises obtained by Landlord by any of said means, or otherwise, shall not under any circumstances be construed or deemed to be a forcible or unlawful entry into or a detainer of the demised premises or an eviction, actual or constructive, of Tenant from the demised premises, or any portion thereof.

28. Estoppel Certificate.

At any time and from time to time upon ten (10) days prior request by Landlord, Tenant will promptly execute, acknowledge and deliver to Landlord, a certificate indicating (a) that this Lease is unmodified and in full force and effect (or, if there have been modifications, that this Lease is in full force and effect, as modified, and stating the date and nature of each modification), (b) that Tenant is in occupancy of the demised premises and any work to be performed by Landlord has been satisfactorily completed, (c) the date to which rental and other sums payable hereunder have been paid, (d) that neither Landlord nor Tenant is in default under this Lease and Tenant knows of no fact which with the passage of time or giving of notice would constitute such a default by Landlord or Tenant, (e) there are no actions, whether voluntary or otherwise, pending, or to its knowledge threatened, against Tenant under the bankruptcy laws of the United States or any state thereof, and (f) such other matters as may be requested by Landlord or its mortgagee. Any such certificate may be relied upon by any prospective purchaser, mortgagee or beneficiary under any deed of trust of the Building or any part thereof. In the event Tenant shall fail to deliver the certificate within the time period stated above, such failure shall be a default under this Lease and Tenant shall be deemed to have confirmed as true the matters stated in (a) through (e) above.

29. Option to Renew.

Provided that Tenant is not in default under any of the terms and conditions of this Lease, then Tenant shall have the right to extend the term of this Lease for two (2) additional terms of five (5) years each, by giving Landlord written notice of its intention to exercise such option right not later than six (6) months prior to the expiration of the then current term. In the event Tenant shall so exercise any such option to extend the term, then the term of this Lease shall be extended for an additional five (5) years upon the same terms and conditions stated herein, except that the Basic Rental payable with respect to such option period pursuant to Article 4 hereof shall be the prevailing rent in effect at the time such option is exercised for a term beginning and ending at the same time as such renewal term for comparable space in the Galleria Officentre complex, provided that in no event shall the annual Net Rental (as hereinafter defined) payable for the renewal term be less than the Net Rental payable for the last year of the preceding term. The term "Net Rental" for a year shall mean the difference between the Basic Rental payable for such year and the total dollar equivalent of Base Expenses applicable for such year (assuming Tenant pays separately for certain services as provided in Article 6 hereof).

30. Emergency Generator.

Tenant shall have the right, at its sole cost and expense, to install an emergency generator (the "Mpower Generator") in a location designated by Landlord, subject to the following:

a. Tenant shall first obtain such governmental approvals, authorizations and permits as are required to install and operate the Mpower Generator.

b. All plans and specifications for the installation of the Mpower Generator and its connection to the demised premises must be approved, in advance, by Landlord. The installation of the Mpower Generator shall be performed in a manner approved by Landlord.

c. Tenant shall pay the entire cost of installing the Mpower Generator, including any modifications to the generator area required to accommodate and screen the Mpower Generator.

d. Tenant shall maintain the Mpower Generator and any related equipment, at its sole cost and expense, in good order and condition and will repair any damage to the Building and/or any other equipment caused by the Mpower Generator and/or the installation thereof. Landlord shall not be liable to Tenant or to any other person for any loss or damage to the Mpower Generator regardless of cause, other than the negligence or acts of Landlord, its agents or employees.

e. Tenant shall have the right to install a diesel generator, provided (i) any fuel tank shall be located above ground and within the frame of the generator, (ii) Tenant shall install such spill protection and other tank monitoring devices as shall be required by governmental codes and regulations, (iii) Tenant shall provide Landlord with copies of all warranties and evidence of any testing required by law, and (iv) Tenant shall indemnify Landlord from and against any and all costs and liability arising from a leak from such fuel tank, including, without limitations, any clean-up costs.

f. Upon the termination of the Lease, Tenant will have the right to remove the Mpower Generator, provided, (i) the Mpower Generator is removed within thirty (30) days following the termination of the Lease, and (ii) Tenant shall repair all damage to the Building and/or any other equipment caused by the removal of the Mpower Generator.

31. Miscellaneous.

31.1 The words "Landlord" and "Tenant" as used herein shall include the plural as well as the singular. If there is more than one Tenant, the obligations hereunder imposed upon Tenant shall be joint and several.

31.2 Submission of this instrument for examination or signature by Tenant does not constitute a reservation of, or option for, lease, and it is not effective as a lease or otherwise until execution and delivery by both Landlord and Tenant.

31.3 The agreements, conditions and provisions herein contained shall, subject to the provisions of Articles 10 and 17 hereof, apply to and bind the heirs, executors, administrators, successors and assigns of the parties hereto.

31.4 Tenant shall not, without the consent of Landlord, use the name of the Building for any purpose other than as the address of the business to be conducted by Tenant in the demised premises. Landlord reserves the right to select the name of the Building and to make such changes of name as it deems appropriate from time to time.

31.5 Tenant warrants and represents that it has had no dealings with any real estate broker or agent in connection with the negotiation of this Lease, and it knows of no real estate broker or agent who is entitled to a commission in connection with this Lease, other than CB Richard Ellis. Landlord and Tenant each agree to indemnify and hold the other harmless of and from any and all loss, cost, damage or expense (including, without limitation, all counsel fees and disbursements) by reason of any claim of, or liability to, any other broker claiming through it and arising out of, or in connection with, the execution and delivery of this Lease.

31.6 If any provisions of this Lease shall be determined to be illegal or unenforceable, such determination shall not affect any other provisions of this Lease and all such other provisions shall remain in full force and effect.

31.7 This Lease shall be governed by, and construed in accordance with, the laws of the State of Michigan.

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

WITNESSES:FCN ASSOCIATES, L.L.C.

By Nemer Management Co., Inc.

Managing Agent

Milford Nemer                          By: /s/ Milford Nemer

Milford Nemer, President

                                                                                                (Landlord)

MGC COMMUNICATIONS, INC. d/b/a MPOWER

COMMUNICATIONS CORP.

By:/s/________________________

Title: SVP - Engineering Operations

(Tenant)

EXHIBIT "A"

Diagram

EXHIBIT "B"

RULES AND REGULATIONS

A.Wherever the word "Tenant" or "Landlord" appears herein, it is understood and agreed that it shall mean their agents, associates, employees, customers, visitors and invitees.

B.The exterior and interior common areas of the Building, including all sidewalks, entrances, corridors, elevators, stairways and the atrium, shall not be obstructed or used for any purpose other than access to and from the demised premises. Parking areas shall be used only for transient parking by tenants, their employees and visitors and shall not be used for storage of vehicles, for parking vehicles during non-business hours or for parking large commercial or recreational vehicles. Tenant shall comply with all other restrictions on the use of certain parking spaces, including spaces reserved for designated parties or for short term parking. Landlord shall not be responsible or liable for any damage to, or theft of, vehicles parked in the parking area.

C.Landlord has the right to control access to the Building and to refuse admittance during non-business hours determined by Landlord to any person or persons without satisfactory identification or a pass issued by Landlord. Tenant shall comply with all regulations promulgated by Landlord regarding access to the Building during non-business hours, including, without limitation, restrictions on use of certain entrances, registration and identification procedures, and alarm procedures.

D.Landlord's employees will not perform any work outside of their regular duties unless specifically authorized to do so by Landlord.

E.No person shall disturb other occupants of the Building or other adjoining buildings by making loud or disturbing noises or by behaving in any other manner which would disturb such other occupants. Tenant shall not cause or permit unusual or objectionable odors to be produced upon or permeate from the demised premises, including any equipment emitting noxious fumes.

F.Soliciting, peddling and canvassing is prohibited in the Building and Tenant shall cooperate to prevent the same. No vending machine shall be operated in the Building without the prior written consent of Landlord.

G.All deliveries and removals of furniture, equipment or other heavy or bulky items must take place after notification to Landlord, during such hours and in such a manner as shall be determined by Landlord. Tenant shall be responsible for all damage or injury resulting from the delivery or removal of all such articles into or out of the Building or the demised premises. Tenant must arrange for the removal of all cartons, large boxes and containers from the Building and such items cannot be deposited in the dumpsters at the Building. No load shall be placed on the floor of the demised premises or in elevators in excess of the limits which shall be established by Landlord. Tenant's equipment shall be placed and operated only in locations approved by Landlord.

H.Nothing shall be attached to the interior or exterior walls of the Building or the demised premises (other than normal items weighing less than 20 pounds each) without the prior written consent of Landlord, which consent will not be unreasonably withheld. Building standard blinds shall be used in all windows and no other window treatments or objects shall be attached to, hung in or used in connection with any window or door of the demised premises without the prior written consent of Landlord. No article shall be placed on any window sill.

I.No sign, picture, lettering, notice or advertisement of any kind shall be painted or displayed on or from the windows, doors, roof, or outside walls of the Building. All of Tenant's interior sign painting or lettering shall be done in a manner approved by Landlord, and the cost thereof shall be paid by Tenant. In the event of a violation of the foregoing by any Tenant, Landlord may remove same without any liability and may charge the expense incurred for such removal to such Tenant. Landlord will provide building standard tenant identification in the building directories.

J.No additional locks shall be placed on any door in the Building without Landlord's prior written consent. All changes made to the locks on doors in the Building must be approved by Landlord and performed by the locksmith designated by Landlord. A reasonable number of keys will be furnished by Landlord and Tenant shall not make or permit any duplicate keys to be made.

K.Tenant shall not install or operate any steam or gas engine or boiler or carry on any mechanical business in the demised premises, or use oil, burning fluids, camphene or gasoline for heating or lighting, or for any other purpose (other than the diesel fuel used to operate Tenant’s generator outside of the Building). No article deemed extra hazardous on account of fire or other dangerous properties, or any explosive, shall be brought into the demised premises or the Building. Portable electric space heaters are prohibited.

L.No bicycles, vehicles or animals of any kind shall be brought into or kept in or about the Building or the demised premises.

M.No marking, painting, drilling, boring, wiring, cutting or defacing of the Building or the demised premises shall be permitted without the prior written consent of Landlord. Plastic protective floor mats shall be maintained over all carpeted areas under desk chairs with casters. Any carpeting cemented down shall be installed with a releasable adhesive.

N.The electrical system and lighting fixtures in the Building and the demised premises shall not be altered or disturbed without Landlord's prior written consent specifying the manner in which it may be done and by persons authorized by Landlord. Extension cords shall not be used in the demised premises without the prior written consent of Landlord and shall, at a minimum, be 14-gauge, 3-wire, grounded, UL approved with molded ends. Hot plates (cooking) are prohibited and only approved electric coffee percolators and microwave ovens shall be permitted. Tenant shall not place any mechanical, electrical or telephone equipment in any area outside of the demised premises without the prior written consent of Landlord.

O.The toilets and other plumbing fixtures shall not be used for any purpose other than those for which they are designed. No sweepings, rubbish or other similar substances shall be deposited therein. Any repair or extra cleaning costs resulting from any misuse of the plumbing fixtures or the restrooms shall be paid by the Tenant who shall have caused the same. No person shall waste water by interfering or tampering with the faucets or otherwise. Toilet tissue and paper towels may not be removed from the restrooms.

P.Additional security or janitorial service required by a Tenant will be contracted through Landlord using the same company that the Landlord has under contract to provide such service. Tenant shall not employ or contract with any person to do cleaning or perform janitorial services in the demised premises without the prior written consent of Landlord.

Q.Tenant assumes responsibility for protecting the demised premises from theft, robbery and pilferage. Tenant shall be responsible for locking all doors to the demised premises.

R.No area outside of the demised premises shall be used for storage at any time. All garbage shall remain within the demised premises until removal by janitorial personnel. Tenant shall pay the cost of removing trash from the demised premises in excess of that generated by normal office operations or at times other than the normally scheduled cleaning of the demised premises.

S.Smoking is prohibited in all common areas of the Building, including, without limitation, lobbies, corridors, elevators, restrooms, stairwells and the atrium.

T.The demised premises shall not be used for the purposes of hiring employees to work outside of the demised premises or for any other purpose which would generate more pedestrian or vehicular traffic than that generated by normal office uses.

EXHIBIT "C"

                                          CONSTRUCTION

Landlord and Tenant shall comply with the following procedures regarding the Tenant Improvements (which term shall be understood herein to mean any and all construction and other work required to remodel the demised premises from their “as-is” condition to be ready for occupancy by Tenant, excluding any furniture, data/telephone cable, fixtures, equipment or personal property of Tenant):

(a)On or before March 28, 2000, Tenant shall, at its sole cost and expense, prepare complete architectural and engineering working plans and specifications (sealed by an architect and engineer licensed in the State of Michigan) for the construction of the Tenant Improvements (the "Plans and Specifications").

(b)Within three (3) business days after receiving the Plans and Specifications, Landlord shall notify Tenant of its approval or disapproval thereof, in the latter event specifying the reasons therefor. Landlord agrees not to unreasonably withhold its approval of such Plans and Specifications. In the event Landlord shall disapprove the Plans and Specifications, Landlord and Tenant shall meet to resolve same, and following such meeting, Tenant shall cause such Plans and Specifications to be appropriately modified to accommodate the reasonable objections of Landlord discussed at such meeting.

(c)Within five (5) business days after receiving the final Design Plans and Specifications, Landlord shall cause its designated general contractor to submit to Tenant a quotation for the cost of constructing the Tenant Improvements in accordance with the Plans and Specifications, which quotation shall be reasonably itemized and shall include (i) any and all costs incurred to perform the Tenant Improvements, including, without limitation, the cost of any governmental permit and plan review fees, plus (ii) a fee of twelve percent (12%) of such total cost of the work for the general contractor's overhead, supervision and insurance. Tenant shall have the right to reasonably approve all subcontractors and subcontractor bids and to require Landlord to obtain competitive bids for any subcontractor work from qualified subcontractors reasonably approved by Landlord. It is understood that Tenant shall have the right to use the existing improvements in the demised premises in their as-is condition free of charge.

(d)Within two (2) business days after receiving Landlord's quotation, Tenant shall notify Landlord of its approval thereof or suggest modifications to the Plans and Specifications to reduce the cost of constructing the Tenant Improvements. The cost of any subsequent change orders to the original contract will be computed based upon the cost of the work plus twelve percent (12%) of such cost as the general contractor's fee, provided no change orders shall be issued without the prior written approval of Tenant. The total amount of the approved quotation, as increased by subsequent change orders, will be referred to herein as the "Tenant Improvement Cost". Upon receiving Tenant's approval of Landlord's quotation, Landlord shall cause its designated general contractor to commence construction of the Tenant Improvements and perform such work in a good and workmanlike manner.

(e)The Tenant Improvement Allowance set forth in Section 1(m) hereof, shall be paid by Landlord to the general contractor and subcontractors performing the work. Tenant shall pay the amount, if any, by which the Tenant Improvement Cost shall exceed the Tenant Improvement Allowance (as defined in Section 1(m) hereof), such excess to be paid within thirty (30) days following receipt of invoices to be issued upon completion of phases of the Tenant Improvements (such invoices to Tenant to be accompanied by copies of invoices from the subcontractors together with appropriate lien waivers).

EX-10.62

SOUTHFIELD TECHNECENTER

LEASE

BY AND BETWEEN

SOUTHFIELD TECHNECENTER RE 1 LLC

(As Landlord)

AND

TALK AMERICA INC.

(As Tenant)

Article 1Lease of Premises

Section 1.1Basic Lease Provisions and Definitions.

Section 1.2Leased Premises.

Article 2Term and Possession

Section 2.1Lease Term.

Section 2.2Construction of Tenant Improvements.

Section 2.3Surrender of the Premises.

Section 2.4Holding Over.

Section 2.5Options.

Article 3Rent

Section 3.1Base Rent.

Section 3.2Additional Rent.

Section 3.3Late Charges.

Article 4Security Deposit

Article 5Use

Section 5.1Use of Leased Premises.

Section 5.2Covenants of Tenant Regarding Use.

Section 5.3Landlord's Rights Regarding Use.

Article 6Utilities and Services

Section 6.1Services to be Provided.

Section 6.2Additional Services.

Section 6.3Interruption of Services.

Article 7Maintenance and Repairs

Section 7.1Tenant's Responsibility.

Section 7.2Landlord's Responsibility.

Section 7.3Alterations.

Article 8Casualty

Section 8.1Casualty.

Section 8.2Fire and Extended Coverage Insurance.

Section 8.3Waiver of Subrogation.

Article 9Liability Insurance

Section 9.1Tenant's Responsibility.

Section 9.2Tenant's Insurance.

Article 10Eminent Domain

Article 11Assignment and Sublease

Article 12Transfers by Landlord

Section 12.1Sale and Conveyance of the Building.

Section 12.2Subordination and Estoppel Certificate.

Section 12.3Lender's Right.

Section 12.4Non-Disturbance Agreement.

Article 13Default and Remedy

Section 13.1Default.

Section 13.2Remedies.

Section 13.3Landlord's Default and Tenant's Remedies.

Section 13.4Limitation of Landlord's Liability.

Section 13.5Nonwaiver of Defaults.

Section 13.6Attorneys' Fees.

Article 14Right of First Offer

Section 14.1Exercise of Expansion Right.

Section 14.2Terms for Expansion Area

Article 15Right of First Refusal

Article 16Notice and Place of Payment

Section 16.1Notices.

Section 16.2Place of Payment.

Article 17Hazardous Materials

Article 18Mold Monitoring, Inspecting, and Remediation

Section 18.1Monitoring of Leased Premises.

Section 18.2Inspection of Leased Premises.

Section 18.3Remediation of Mold.

Article 19Telecommunications Use

Section 19.1Telecommunications Equipment and Systems.

Section 19.2Fiber Access.

Section 19.3Co-Location.

Article 20Storage Space

Article 21[Reserved]

Article 22Miscellaneous

Section 22.1Benefit of Landlord and Tenant.

Section 22.2Governing Law.

Section 22.3Force Majeure.

Section 22.4Condition of Premises.

Section 22.5Examination of Lease.

Section 22.6Indemnification for Leasing Commissions.

Section 22.7Quiet Enjoyment.

Section 22.8Severability of Invalid Provisions.

Section 22.9Representations and Warranties.

Section 22.10Survival.

Section 22.11Financial Statements.

Section 22.12Preparation of Lease.

Section 22.13Abandonment.

Section 22.14Security Systems.

Section 22.15Construction Allowance.

Lease Agreement

This Lease is executed this 24th day of February, 2003, by and between Southfield TechneCenter RE 1 LLC, a Michigan limited liability company ("Landlord"), and Talk America Inc., a Pennsylvania corporation ("Tenant").

WITNESSETH:

Article 1Lease of Premises

Section 1.1Basic Lease Provisions and Definitions.

A. Building Address: 21314 Melrose Avenue, Southfield, Michigan 48075; Building No. 10 (the "Building"); located in Southfield TechneCenter (the "Park");

B.Rentable Area:

Leased Premises: 6,978 rentable square feet

Building: 41,226 rentable square feet

Park: 605,386 rentable square feet

C. Tenant's Share of Building Premises Expenses: A fraction in which the numerator is the rentable square footage of the Leased Premises and the denominator of which is the rentable square footage within the Building. Tenant’s Share of Building Premises Expenses has been calculated to be 16.93%.

Tenant's Share of Park Expenses: A fraction in which the numerator is the rentable square footage of the Leased Premises and the denominator is the rentable square footage within all of the buildings in the Park with tenants that share the Park Expenses. Tenant’s Share of Park Expenses has been calculated to be 1.15%.

D.Minimum Annual Rent:

Period	Annual Minimum Rent per sq. ft.	Annual Minimum Rent	Monthly Minimum Rent
Lease Year 1	$10.75	$75,013.50	$6,251.13
Lease Year 2	$11.07	$77,246.46	$6,437.21
Lease Year 3	$11.40	$79,549.20	$6,629.10
Lease Year 4	$11.75	$81,991.50	$6,832.63
Lease Year 5	$12.10	$84,433.80	$7,036.15
Lease Year 6	$12.46	$86,945.88	$7,245.49
Lease Year 7	$12.84	$89,597.52	$7,466.46
Lease Year 8	$13.22	$92,249.16	$7,687.43
Lease Year 9	$13.62	$95,040.36	$7,920.03
Lease Year 10	$14.03	$97,901.34	$8,158.45

“Lease Year 1” shall be the one-year period commencing on the Commencement Date, and each subsequent Lease Year shall be the one-year period beginning on the annual anniversary of the Commencement Date. However, if the Commencement Date is other than the first day of a calendar month, the first Lease Year shall begin on the first day of the first full calendar month following the Commencement Date, and each subsequent Lease Year shall be the one-year period beginning on the annual anniversary of the first Lease Year. During the period (if any) beginning on the Commencement Date and ending on the first day of the first Lease Year, Tenant’s obligation to pay Minimum Annual Rent shall be pro-rated based on the rate for the first Lease Year.

Upon execution of this Lease, Tenant shall pay Landlord the first month’s installment of Minimum Annual Rent and the Security Deposit referenced in Section 1.1.G.

E. Lease Term: Beginning on the Commencement Date and ending ten (10) years after the beginning of the first Lease Year;

F. Commencement Date: Upon execution of this Lease by Landlord and Tenant;

G.            Security Deposit: $6,251.00

H. Brokers: Signature Associates, representing Landlord, and The John Buck Company and Paragon Corporate Realty Services, representing Tenant;

I. Permitted Use: Installation, operation, maintenance and replacement of telecommunications equipment and switching/transmission facilities, including, without limitation, a local and/or long distance switch, node, hub, customer collocation and related equipment, together with general offices and other uses normally related thereto, and for no other purpose without the written consent of Landlord. Without limiting the foregoing, Tenant shall have the right to install, operate, repair, maintain and replace fiber optic or other cable and related equipment according to all governmental codes and regulations and in accordance with this Lease for the purpose of providing telecommunications services to the public, including to other tenants of the Park;

J.Address for notices (as such addresses may be changed pursuant to Section 16.1):

Landlord:Southfield TechneCenter

c/o Grubb & Ellis Management Services, Inc.

26555 Evergreen

Suite 500

Southfield, Michigan 48075

Facsimile No.: (248) 357-0923

Attn: Southfield TechneCenter Property Manager

and

Southfield TechneCenter RE 1 LLC

c/o Pomeroy Investment Corporation

74 E. Long Lake Road

Bloomfield Hills, MI 48304

Facsimile No.: (248) 723-2109

Attn: Director of Asset Management

Tenant:Talk America Inc.

6805 Route 202

New Hope, PA 18938

Facsimile No.: (215) 862-1960

Attn: General Counsel

Address for rental and other payments:

Southfield TechneCenter

c/o Grubb & Ellis Management Services, Inc.

26555 Evergreen

Suite 500

Southfield, Michigan 48075

Facsimile No.: (248) 357-0923

Attn: Southfield TechneCenter Property Manager

Section 1.2Leased Premises.

Landlord hereby leases to Tenant and Tenant leases from Landlord, subject to all of the terms and conditions set forth herein, that portion of the Building referenced in Section 1.1A of the Basic Lease Provisions and designated on Exhibit A attached hereto (the "Leased Premises"). Tenant acknowledges that it has had the opportunity to measure the Leased Premises and agrees that the Leased Premises shall be deemed to include the number of square feet set forth in Section 1.1.B. and in no event shall Tenant have the right to challenge, demand, request or receive any change in the base rent or other sums due hereunder as a result of any claimed or actual error or omission in the measured square footage of the Leased Premises. Landlord also grants to Tenant, together with and subject to the existing rights and those other rights granted from time to time by Landlord to others, the nonexclusive right to use for vehicular and pedestrian ingress and egress and parking of passenger vehicles the "Building Premises" and "Common Areas" within the Park and the parking area adjoining the Building and designated on Exhibit B. The Leased Premises does not include, and Landlord excludes from the Leased Premises, the exterior walls and roof of the Building and the land beneath the Building. Subject to the terms and conditions set forth in Articles 7 and 19 of this Lease, Landlord further grants to Tenant the right to install and use certain Telecommunications Equipment, supplemental air conditioning system(s), fiber optic cable, a back-up power supply and related equipment and systems on the roof and in other portions of the Building and the Park, together with the right to use certain Storage Space (as defined in Article 20) located in the Park as set forth in Article 20.

"Building Premises" shall mean the Building and the area within and appurtenant to the Building designated for use in common by all tenants of the Building and their respective employees, agents, customers, invitees and others including by way of illustration, but not limitation, sidewalks, landscaped areas, parking areas and driveways appurtenant to the Building, and as depicted on Exhibit B, attached hereto and incorporated herein by this reference. The area of the Building Premises may be adjusted from time to time as necessary; provided that any such adjustment shall not materially impact Tenant’s rights to use the Leased Premises and other areas of the Park as provided in this Section 1.2.

"Common Areas" shall mean the areas within the Park that are designated for use in common by all tenants of the Park (which do not include areas defined as the Building Premises or any common areas appurtenant to any other building within the Park) and their respective employees, agents, customers, invitees and others, and include by way of illustration, but not limitation, sidewalks, landscaped areas, storm and sanitary sewer systems and other utilities servicing the Park, access and perimeter roads, truck passageways (which may be in whole or in part below grades), and driveways; and any portion of the Park not heretofore included within Common Areas shall be included when so designated and improved for common use. Notwithstanding the foregoing, Tenant will not participate in any costs associated with any parking lot maintenance other than that within the Building Premises. The area of the Common Areas may be adjusted from time to time as necessary.

Article 2Term and Possession

Section 2.1Lease Term.

The term of this Lease (the original approximately 10-year lease term referred to in Section 1.1.E. is hereinafter sometimes referred to as the “Original Term”; and the Original Term as extended by Tenant pursuant to Section 2.5 by the exercise of any Option Terms is hereinafter referred to as the “Lease Term”) shall be the period of time specified in the Basic Lease Provisions and shall commence on the Commencement Date described in the Basic Lease Provisions. Upon delivery of possession of the Leased Premises to Tenant, Tenant shall execute a letter of understanding acknowledging (i) the Commencement Date of this Lease, and (ii) that Tenant has accepted the Leased Premises for occupancy and that the condition of the Leased Premises (including any tenant finish improvements constructed thereon), the Building Premises and Common Areas were at the time satisfactory and in conformity with the provisions of this Lease in all respects. Such letter of understanding shall become a part of this Lease. If Tenant takes possession of and occupies the Leased Premises, Tenant shall be deemed to have accepted the Leased Premises as described above, even though Tenant may not have executed the letter of understanding.

Section 2.2Construction of Tenant Improvements.

Tenant has personally inspected the Leased Premises and accepts the same "as is" without representation or warranty by Landlord of any kind and with the understanding that Landlord shall have no responsibility with respect thereto except as otherwise specifically set forth in this Lease.

Section 2.3Surrender of the Premises.

Upon the expiration or earlier termination of this Lease, or upon the exercise by Landlord of its right to reenter the Leased Premises without terminating this Lease, Tenant shall immediately surrender the Leased Premises to Landlord, in broom-clean condition and in good order, condition and repair, except for ordinary wear and tear and damage which Tenant is not obligated to repair. Tenant shall also remove its personal property, trade fixtures and any of Tenant's alterations (other than the “Approved Alterations” described in Section 7.3) designated by Landlord including by way of illustration, but not limitation, wiring and cabling; promptly repair any damage caused by such removal; and restore the Leased Premises to the substantially similar condition existing prior to the installation of the items so removed. If Tenant fails to do so, Landlord may restore the Leased Premises to such condition at Tenant's expense, Landlord may cause all of said property to be removed at Tenant's expense, and Tenant hereby agrees to pay all the costs and expenses thereby reasonably incurred. All property of Tenant which is not removed within fifteen (15) days following Landlord's written demand therefore shall be conclusively deemed to have been abandoned by Tenant, and Landlord shall be entitled to dispose of such property without thereby incurring any liability to Tenant. The provisions of this section shall survive the expiration or earlier termination of this Lease.

Section 2.4Holding Over.

If Tenant retains possession of the Leased Premises after the expiration or earlier termination of this Lease with Landlord’s consent, Tenant shall become a tenant from month to month at one hundred fifty percent (150%) of the Monthly Rental Installment in effect at the end of the Lease Term (plus Additional Rent as provided in Article 3 hereof), and otherwise upon the terms, covenants and conditions herein specified, so far as applicable. Acceptance by Landlord of rent after such expiration or earlier termination shall not result in a renewal of this Lease, and Tenant shall vacate and surrender the Leased Premises to Landlord upon Tenant being given ten (10) days priorwritten notice from Landlord to vacate. The foregoing provisions of this Section 2.4 shall neither be construed to give Tenant any right to remain in possession of the Premises or any part thereof after the Expiration Date, nor to waive any of Landlord's rights under this Lease to collect any damages to which Landlord may be entitled, whether direct or consequential.

Section 2.5Options.

(a)If Tenant shall not then be in material default under any of the terms and conditions of this Lease, Tenant shall have the right to extend the term of this Lease for an additional successive period of five (5) years (the "First Option Term"), provided that Tenant shall deliver to Landlord written notice of its election to extend the term of this Lease at least twelve (12) months prior to the expiration date of the Original Term, time being of the essence.

(b)If Tenant shall not then be in material default under any of the terms and conditions of this Lease and Tenant shall have elected to extend the term of this Lease for the First Option Term, Tenant shall have the right to extend the term of this Lease for an additional successive period of five (5) years (the "Second Option Term"), provided that Tenant shall deliver to Landlord written notice of its election to extend the term of this Lease at least twelve (12) months prior to the expiration date of the First Option Term, time being of the essence.

(c)If Tenant shall not then be in material default under any of the terms and conditions of this Lease and Tenant shall have elected to extend the term of this Lease for the First and Second Option Terms, Tenant shall have the right to extend the term of this Lease for an additional successive period of five (5) years (the "Third Option Term"), provided that Tenant shall deliver to Landlord written notice of its election to extend the term of this Lease at least twelve (12) months prior to the expiration date of the Second Option Term, time being of the essence. For purposes of this Section 2.5, any default of Tenant relating to the payment of rent or other sums due pursuant to this Lease shall be deemed material if such amount is outstanding on the date Tenant exercises its right to extend the term of the Lease for any Option Term and Tenant fails to pay such amount within seven (7) days of receiving written notice from Landlord that such amount is outstanding.

(d)Other than as expressly otherwise provided herein, all of the covenants, agreements, terms and conditions contained in the Lease shall remain in full force and effect during the Option Terms except that the Minimum Annual Rent during each Option Term shall be equal to the greater of (i) the "Fair Market Rental Rate" for the Leased Premises, or (ii) one hundred three percent (103%) of the rental rate paid by Tenant during the last year of the immediately preceding term, with three percent (3%) annual increases thereafter. For purposes hereof, "Fair Market Rental Rate" shall mean the Minimum Annual Rent, on a so-called "net" basis, that would be paid by a willing tenant, not compelled to lease, and accepted by a willing landlord, not compelled to lease, for the Leased Premises as of the pertinent date taking into consideration rent for comparable premises in comparable buildings in the relevant competitive market including the amount of space and length of term taken by the tenant and the creditworthiness and quality of the tenant, but ignoring the value of all improvements to the Leased Premises that Tenant made at its own expense (except those improvements that Landlord requires Tenant to leave upon termination of the Lease). Immediately upon the exercise by Tenant of an option to extend the term of the Lease pursuant to this Section 2.5, Landlord and Tenant shall commence good faith negotiations to determine the Fair Market Rental Rate of the Leased Premises for the Option Term. In the event that Landlord and Tenant are not able to agree on the Fair Market Rental Rate of the Leased Premises for the Option Term within three (3) months of Tenant's exercise of an option, Landlord and Tenant shall each appoint an appraiser (the "Party-Selected Appraisers") who is a licensed real estate broker with experience leasing comparable types of properties in the Detroit metropolitan area within one (1) month after the expiration of such three (3) month period. Within fifteen (15) days of the date the last Party-Selected Appraiser is selected, the Party-Selected Appraisers shall select a third appraiser (the "Independent Appraiser"; the Independent Appraiser and the Party-Selected Appraisers are hereinafter collectively referred to as the "Appraisers") who is certified as a licensed real estate broker with experience leasing comparable types of properties in the Detroit metropolitan area . Thereafter, the Appraisers shall determine the Fair Market Rental Rate of the Leased Premises. If the Appraisers are unable to agree upon such value within two (2) months of the date the last Appraiser is selected, the Fair Market Rental Rate of the Leased Premises for the Option Term shall be equal to the Fair Market Rental Rate determined by the Appraiser whose determination is between the values determined by the other Appraisers. The fees of the Independent Appraiser shall be borne equally by Landlord and Tenant and each party shall be responsible for the fees of the Appraiser selected by it. If either party fails to appoint a qualified appraiser within the time provided herein, the determination of the appraiser appointed by the other party shall be binding and conclusive on the parties. Upon determination of the Minimum Annual Rental pursuant to this Section 2.5(d) for the subject Option Term, the parties shall enter into a writing evidencing such determination. The procedure described in this Section 2.5(d) shall be used to determine the Fair Market Rental Rate for each Option Term.

(e)The right to exercise the Option Terms shall be null and void upon an assignment of this Lease or sublease of more than fifty percent (50%) of the Leased Premises to an assignee or sublessee unless such assignee or sublessee is (1) an Affiliate of Tenant (as defined in Article 11) or controls a majority interest in the assets of Tenant, or (2) if Landlord has released Tenant from liability pursuant to this Lease, has a net worth equal to or greater than Tenant on the date of such assignment or sublease.

Article 3Rent

Section 3.1Base Rent.

Tenant shall pay to Landlord as Minimum Annual Rent for the Leased Premises the sum specified in the Basic Lease Provisions, payable in equal consecutive Monthly Rental Installments, in advance, without deduction or offset, beginning on the Commencement Date and on or before the first day of each and every calendar month thereafter during the Lease Term. The Monthly Rental Installment for partial calendar months shall be prorated based on the number of days during the month this Lease was in effect in relation to the total number of days in such month.

Section 3.2Additional Rent.

In addition to the Minimum Annual Rent specified in this Lease, Tenant agrees to pay to Landlord for each calendar year during the Lease Term, as "Additional Rent”, the sum of (A) Tenant's Share of Building Premises Expenses and (B) Tenant's Share of Park Expenses.

"Park Expenses" shall mean the Operating Expenses and Real Estate Taxes for the Common Areas.

“Building Premises Expenses” shall mean the Operating Expenses and Real Estate Taxes for the Building Premises.

"Operating Expenses" shall mean all of Landlord's expenses for operation, repair, replacement and maintenance as necessary to keep the Building Premises and Common Areas in good order, condition and repair (including all additional direct costs and expenses of operation and maintenance of the Building Premises which Landlord reasonably determines it would have paid or incurred during such year if the Building had been fully occupied) including, but not limited to, utilities; refuse disposal; stormwater discharge fees; license, permit, inspection and other fees; fees and assessments imposed by any covenants or owners' association; tools and supplies; security services; market based management fees; insurance premiums and deductibles; the cost of capital improvements or replacements designed to protect the health and safety of the tenants in the Building; and maintenance and repair of the driveways and parking areas (including snow removal), exterior lighting facilities, landscaped areas, walkways, curbs, drainage strips, sewer lines, exterior walls, foundation, structural frame, roof and gutters. The forgoing list of Operating Expenses is for definitional purposes only and shall not impose any obligations upon Landlord to incur such expenses or provide such service.

Notwithstanding anything to the contrary, the following items shall be excluded from the definition of Operating Expenses:

(a)   Costs of decorating, redecorating, or special cleaning or other services not provided on a regular basis to tenants of the Building;

(b)   Wages, salaries, fees and benefits paid to executive personnel or officers or partners of Landlord;

(c)   Any charge for depreciation of the Building or other structures in the Park or equipment; provided, however, that if any expense incurred by Landlord in operating the Park is required to be capitalized, rather than expensed, in accordance with generally accepted accounting principles, the cost of such item shall not be included within the definition of Operating Expenses, but such item shall instead be depreciated over its useful life in accordance with generally accepted accounting principles and such depreciation shall be included within the definition of Operating Expenses;

(d)   Interest or other financing charge;

(e)   Any charge for Landlord’s income taxes, single business taxes, excess profit taxes, franchise taxes or similar taxes on Landlord’s business; provided, however, that such items may be included within Real Estate Taxes if the requirements set within the definition of Real Estate Taxes are satisfied;

(f)   All costs relating to activities for the solicitation and execution of leases of space in the Building or other buildings in the Park or the relocation of existing tenants;

(g)   All costs and expenses of operating a commercial enterprise in the Park to the extent revenues from such commercial enterprise are not applied to reduce Operating Expenses;

(h)   All costs for which Tenant or any other tenant in the Park is being charged other than pursuant to the operating expense clauses;

(i)   The cost of any electric current furnished to the Leased Premises or any rentable area of the Building or other portions of the Park for purposes other than the (1) operation of Park equipment and machinery, (2) the lighting of public toilets, stairways, shaftways, parking lots, roads, and sidewalks, and (3) the operation of Building machinery or fan rooms;

(j)   The cost of correcting defects in the construction of the Building, other structures in the Park, or in the Park equipment, except conditions (not occasioned by construction defects) resulting from ordinary wear and tear will not be deemed defects for the purpose of this category;

(k)   The cost of any repair made by Landlord because of the total or partial destruction of the Building or other structure in the Park or the condemnation of a portion of the Building or other structure in the Park;

(l)   Any increase in insurance premium to the extent that such increase is caused or attributable to a unique use or occupancy of another tenant;

(m)   The cost of any items for which Landlord is reimbursed by insurance or otherwise compensated by parties other than tenants of the Park pursuant to clauses similar to this paragraph;

(n)   The cost of any additions or capital improvements to the Building or other structure in the Park subsequent to the date of original construction;

(o)   The cost of any repairs, alterations, additions, changes, replacements, and other items which, under generally accepted accounting principles, are properly classified as capital expenditures to the extent they upgrade or improve the Building or other structure in the Park, as opposed to replacing existing items which have worn out;

(p)   Any operating expense representing an amount paid to a related corporation, entity or person that is in excess of the amount which would be paid in the absence of such relationship;

(q)   The cost of tools and equipment used initially in the construction, operation, repair and maintenance of the Building and other structures in the Park;

(r)   The cost of any work or service performed for or facilities furnished to any tenant of the Park to a greater extent or in a manner more favorable to such tenant than that available, performed for, or furnished to Tenant;

(s)   The cost of alterations of space in the Park leased to other tenants;

(t)   The cost of overtime or other expense to Landlord in curing its defaults to the extent such costs are greater than that which would be incurred by Landlord if Landlord was not in default;

(u)   Capital improvements or expenditures incurred to reduce operating expenses shall only be included in operating expenses to the lesser of the annual amortized amount of said improvements or expenditures (over the useful life of the improvement or item) or the actual savings;

(v)   Ground rent or similar payments to a ground lessor; and

(w)   Salaries paid to employees above the Building Manager (if there is a Building Manager and not a Park Manager) or Park Manager level;

(x)   Fees paid to attorneys and accountants that are not paid in connection with the operation of the Park as a whole;

(y)   Commissions paid to brokers; and

(z)   Advertising and promotion costs.

"Real Estate Taxes" shall include any form of real estate tax or assessment, general, special, ordinary or extraordinary, and any license fee, commercial rental tax, improvement bond or bonds, levy or tax (other than inheritance, personal income or estate taxes) imposed upon the Building Premises and Common Areas by any authority having the direct or indirect power to tax, together with the reasonable costs and expenses of contesting the validity or amount of Real Estate Taxes as follows. Any costs, expenses and attorneys' fees (including the costs of tax consultants) incurred by Landlord in connection with the negotiation for reduction in the assessed valuation of land, buildings and improvements comprising the Park and any protest or contest of real estate taxes and/or assessments shall be included within the term "Real Estate Taxes". If at any time during the Lease Term the present method of taxation or assessment shall be so changed that there shall be substituted for the whole or any part of said taxes, assessments, duties, charges, fees or payments now or hereafter levied, assessed or imposed on real property, a capital levy or other tax levied, assessed, or imposed on the real property and/or the rents reserved herein, then all such capital levies or other taxes shall, to the extent that they are so substituted, be deemed to be included within the term "Real Estate Taxes". If the property is not separately assessed, then Tenant's liability shall be an equitable proportion of the real estate taxes for all of the land and improvements included within the tax parcel assessed. Landlord's reasonable determination thereof, in good faith, shall be conclusive.

Other than as set forth in the third sentence of the preceding paragraph, the following items shall be excluded from the definition of Real Estate Taxes:

(a)   Inheritance taxes;

(b)   Gift taxes;

(c)   Transfer taxes;

(d)   Franchise taxes;

(e)   Excise taxes;

(f)   Net income taxes;

(g)   Profit taxes (including single business taxes);

(h)   Capital levies;

(i)   Late payment charges and penalties as long as Tenant has made all payments required pursuant to this Lease on a timely basis; and

(j)   Special assessments levied against property other than real estate to the extent such property does not relate to the operation of the Park.

Landlord shall use commercially reasonable standards, consistently applied, in determining Tenant's Rentable Area as set forth in 1.1 B, the Rentable Area of the Building, and the Rentable Area of other buildings in the Park.

Landlord's determination of the Rentable Areas made in good faith shall conclusively be deemed correct for all purposes hereunder, including without limitation the calculation of Tenant's Share of Park Expenses, Tenant's Share of Building Premises Expenses, and Tenant's Minimum Annual Rent; provided that Tenant shall have an opportunity to measure any space that becomes part of the Leased Premises after the Commencement Date, including but not limited to any Expansion Area or any Right of First Refusal Area.

Tenant shall pay, prior to delinquency, all taxes assessed against and levied upon trade fixtures, furnishings, equipment and all other personal property of Tenant contained in the Leased Premises or elsewhere. Tenant shall cause such trade fixtures, furniture, equipment and all other personal property to be assessed and billed separately from the Leased Premises.

(a)Payment of Adjusted Additional Rent. The Additional Rent shall be estimated annually by Landlord, and written notice thereof shall be given to Tenant at least thirty (30) days prior to the beginning of each calendar year. In the case of the year in which the term of this Lease commences, written notice of the estimated Additional Rent shall be given to Tenant prior to the Commencement Date. Tenant shall pay to Landlord each month, at the same time the Monthly Rental Installment is due, an amount equal to one-twelfth (1/12) of the estimated Additional Rent.

(b)Increases in Estimated Additional Rent. If Real Estate Taxes or Operating Expenses increase during a calendar year, Landlord may increase the estimated Additional Rent during such year by giving Tenant thirty (30) days written notice to that effect, and thereafter Tenant shall pay to Landlord, in each of the remaining months of such year, an amount equal to the amount of such increase in the estimated Additional Rent divided by the number of months remaining in such year.

(c)Adjustment to Actual Additional Rent. Within one hundred twenty (120) days after the end of each calendar year, Landlord shall prepare and deliver to Tenant a statement showing the actual Additional Rent and installments of Additional Rent paid during such calendar year. Within thirty (30) days after receipt of the aforementioned statement, Tenant shall pay to Landlord, or Landlord shall credit against the next rent payment or payments due from Tenant, or if the Lease has terminated, then reimbursement to Tenant as the case may be, the difference between the actual Additional Rent for the preceding calendar year and the estimated amount paid by Tenant during such year. If this Lease shall commence, expire or be terminated on any date other than the last day of a calendar year, then the Additional Rent for such partial calendar year shall be prorated on the basis of the number of days during the year this Lease was in effect in relation to the total number of days in such year.

(d)Tenant Verification. Tenant or its accountants shall have the right to inspect, at reasonable times and in a reasonable manner, during the one-year period following the delivery of Landlord's statement of the actual amount of the Additional Rent, such of Landlord's books of account and records as pertain to and contain information concerning such costs and expenses in order to verify the amounts thereof. However, Tenant may only conduct such audit (i) upon not less than thirty (30) days prior notice to Landlord, (ii) at a time mutually agreed upon by Landlord and Tenant during normal business hours, (iii) not more than once during any calendar year, and (iv) if such audit is conducted by employees of Tenant or a national or regional independent certified public accounting firm. Tenant's failure to inspect during the one-year period shall forever waive and terminate Tenant's right to inspect Landlord's books with respect to the Additional Rent set forth in the applicable statement. Except for disclosures required in administrative or judicial proceedings or in any dispute with Landlord under this Lease, Tenant shall keep confidential all information obtained during such audit that is not otherwise publicly available, and shall cause any person conducting such audit on behalf of Tenant to execute an agreement for the benefit of Landlord to do the same.

Section 3.3Late Charges.

Tenant acknowledges that Landlord shall incur certain additional unanticipated costs and expenses, including administrative costs and attorneys' fees, if Tenant fails to timely pay any payment required hereunder. Therefore, as compensation for such additional expenses, and in addition to the other remedies available to Landlord hereunder, if any payment of Minimum Annual Rent or any other sum or charge required to be paid by Tenant to Landlord hereunder shall become overdue for a period of five (5) business days, a late charge of seven percent (7%) of the payment so due shall be paid by Tenant as additional rent. In addition, if Tenant fails to pay any sum or charge required to be paid by Tenant to Landlord within fifteen (15) days after the same is due and payable, such unpaid amount shall bear interest from the due date thereof to the date of payment at the rate of the lower of (a) fifteen percent (15%) per annum, or (b) the highest rate permitted under law.

The provisions of this Article 3 shall survive the expiration or earlier termination of this Lease.

Article 4Security Deposit

Tenant, upon execution of this Lease, shall deposit with Landlord the Security Deposit as specified in the Basic Lease Provisions as security for the full and faithful performance by Tenant of all of the terms, conditions and covenants contained in this Lease on the part of Tenant to be performed, including, but not limited to, the payment of the Minimum Annual Rent and Additional Rent. In the event of a default by Tenant of any term, condition or covenant herein contained, Landlord may after providing Tenant with three (3) days advance written notice apply all or any part of such security deposit to curing all or any part of such default; and Tenant agrees to promptly, upon demand, deposit such additional sum with Landlord as may be required to maintain the full amount of the security deposit. All sums held by Landlord pursuant to this section shall be without interest and may be commingled in a general fund. At the end of the Lease Term, provided that there is then no uncured default, Landlord shall return to Tenant the balance thus remaining of the security deposit within thirty (30) days.

Article 5Use

Section 5.1Use of Leased Premises.

The Leased Premises are to be used by Tenant solely as provided in the Basic Lease Provisions, and for no other purposes without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. Subject to reasonable security measures in place at the Building and/or the Park from time to time, Tenant shall be granted access to the Leased Premises, the Building Premises (including the roof and other portions of the Building Premises which Tenant is entitled to use pursuant to Section 1.2), and the Storage Space 24 hours per day, seven days per week.

Section 5.2Covenants of Tenant Regarding Use.

In connection with its use of the Leased Premises, Tenant agrees to do the following:

(a) Tenant shall (i) use and maintain the Leased Premises and conduct its business thereon in a safe and lawful manner, (ii) comply with all laws, rules, regulations, orders, ordinances, directions and requirements of any governmental authority or agency, now in force or which may hereafter be in force, applicable to Tenant's use of the Leased Premises, including, without limitation, those which shall impose upon Landlord or Tenant any duty with respect to or triggered by a change in the use or occupation of, or any improvement or alteration to, the Leased Premises, and (iii) comply with and obey all reasonable directions of Landlord, including the Rules and Regulations attached hereto as Exhibit C and incorporated herein by reference as may be reasonably amended by Landlord from time to time; provided, however, that in the event of a conflict or inconsistency between this Lease and the Rules and Regulations, the terms of this Lease shall control. Notwithstanding anything in this Lease to the contrary, Landlord shall be responsible for all costs necessary to cause the Building, Building Premises, Leased Premises, and Common Areas to be in compliance with current and future laws, codes, regulations, including those related to handicap and the Americans with Disabilities Act requirements, and permit requirements, but not to the extent such changes are required as a result of (i) Tenant’s modification to the Leased Premises, (ii) Tenant’s installation or operation of specialized telecommunications equipment in the Leased Premises, or (iii) Tenant’s use of the Leased Premises for any use other than office or general warehouse usewhere such compliance would not be required if the Leased Premises were used for office or general warehouse purposes.

(b) Tenant shall not (i) use the Leased Premises for any unlawful purpose or act, (ii) commit or permit any waste or material damage to the Leased Premises, (iii) store any inventory, equipment or any other materials outside the Leased Premises except as otherwise contemplated by Section 7.3 or Article 19 (including but not limited to storage in the Storage Area), or (iv) do or permit anything to be done in or about the Building Premises or Common Areas which constitutes a nuisance or which will in any way obstruct or interfere with the rights of other tenants or occupants of the buildings within the Park or injure or annoy them. Landlord shall not be responsible to Tenant for the nonperformance by any other tenant or occupant of the Park of its lease obligations, including, but not limited to, the Rules and Regulations.

(c) Tenant shall not overload the floors of the Leased Premises as to cause damage to the floor. Landlord acknowledges that Tenant intends to reinforce a portion of the floor of the Leased Premises as set forth in Section 7.3. All damage to the floor structure or foundation of the Building due to improper positioning or storage of items or materials shall be repaired by Landlord at the sole expense of Tenant, who shall reimburse Landlord immediately therefore upon demand as Additional Rent.

(d) Tenant shall not change its use of the Leased Premises, or allow the Leased Premises to be used in any manner other than as set forth in Section 1.1.I. of the Basic Lease Provisions, if such change would, in Landlord's reasonable opinion, invalidate any policy of insurance now or hereafter carried on the Building Premises or increase the rate of premiums payable on any such insurance policy. Should Tenant fail to comply with this covenant, Landlord may, at its option, require Tenant to stop engaging in such activity or to reimburse Landlord as Additional Rent for any increase in premiums charged during the Lease Term on the insurance carried by Landlord on the Building Premises and attributable to the use being made of the Leased Premises by Tenant.

(e) Tenant may, at its own expense, erect a sign concerning its business which shall be in keeping with the decor and other signs on the Building, provided that such sign is first approved by Landlord in writing and complies with all laws, ordinances, statutes, regulations, rules and orders (collectively "Laws") of any governmental authority. Landlord's approval, if given, may be conditioned upon such criteria as Landlord deems appropriate to maintain the area in a neat and attractive manner. Tenant agrees to maintain any sign in good state of repair, and upon expiration or earlier termination of the Lease Term, Tenant shall promptly remove the sign and repair any resulting damage to the Building.

Tenant’s obligations set forth in this Section 5.2 shall survive the expiration or earlier termination of this Lease.

Section 5.3Landlord's Rights Regarding Use.

In addition to the rights specified elsewhere in this Lease, Landlord shall have the following rights regarding the use of the Leased Premises, Building Premises or the Common Areas by Tenant, its employees, agents, customers and invitees, each of which may be exercised without notice or liability to Tenant:

(a) Landlord may install in areas other than the Leased Premises such signs, advertisements, notices or tenant identification information as it shall deem necessary or proper.

(b) Landlord shall have the right at any time to change or otherwise alter the Building Premises and/or Common Areas; provided that any such changes shall not materially impact Tenant’s rights to use the Leased Premises and other areas of the Park as provided in Section 2.1. Subject to Section 5.1, Landlord may control the Building Premises and the Common Areas in such manner as it deems necessary or proper.

(c) Landlord or Landlord's agent shall be permitted to inspect or examine the Leased Premises at any reasonable time with at least 24 hours advance notice to Tenant (except in the event of threat of immediate injury or damage to persons or property, in which case no such notice shall be required), and Landlord shall have the right to make any repairs to the Leased Premises which are necessary for its preservation; provided, however, that any repairs made by Landlord that are Tenant’s obligation pursuant to Section 7.1 that have not been made by Tenant after notice and opportunity to cure shall be at Tenant's expense. Subject to Section 7.3(b) and the first sentence of this Section 5.3(c), if Tenant is not present to open and permit such entry into the Leased Premises at any time when such entry is necessary or permitted hereunder, Landlord and its employees and agents may enter the Leased Premises by means of a master or pass key or otherwise. Landlord shall incur no liability to Tenant for such entry except in cases of the gross negligence or willful misconduct of Landlord, nor shall such entry constitute an eviction of Tenant or a termination of this Lease, or entitle Tenant to any abatement of rent therefore.

Article 6Utilities and Services

Section 6.1Services to be Provided.

Landlord shall furnish to Tenant such electrical, water, and sewer service as in its judgment is reasonably necessary for the comfortable use and occupancy of the Leased Premises for normal office use during normal business hours on all generally recognized business days. The cost of furnishing such services may be included in Operating Expenses or separately metered and billed directly to Tenant. Landlord shall also cooperate, at Tenant’s sole cost and expense, in allowing the services contemplated by Section 1.2, including but not limited such electrical service as may be required for the Telecommunications Equipment, supplemental air conditioning system(s), back-up power supply and related equipment, as set forth in Section 7.3 and Article 19.

Section 6.2Additional Services.

If Tenant requests any other utilities or building services in frequency, scope, quality or quantity substantially greater than those which are currently provided to other tenants in the Building, then Landlord shall use reasonable efforts to attempt to furnish Tenant with such additional utilities or building services. In the event Landlord is able to and does furnish such additional utilities or building services, the costs thereof shall be borne by Tenant and Tenant shall reimburse Landlord for any additional costs of operation and maintenance occasioned thereby monthly as additional rent at the same time Monthly Rental Installments and other Additional Rent are due, unless such expenses are separately metered and billed directly to Tenant. Notwithstanding the foregoing, Tenant shall have the right, at its sole cost and expense, to increase its electrical capacity to as much as 4,000 amps at 480 volts over a three (3) to five (5) year period. Landlord agrees to cooperate and/or assist Tenant, at Tenant’s sole cost and expense, in securing the electrical capacity from the local utility provider if necessary.

If any lights, machines or equipment (including but not limited to computers) used by Tenant in the Leased Premises materially affect the temperature otherwise maintained by the Building's air-conditioning system or generate substantially more heat in the Leased Premises than that which would normally be generated by the lights and business machines typically used by other tenants in the Building or by tenants in comparable buildings and Tenant has not installed supplemental air conditioning to correct such problem, then Landlord shall have the right to install any machinery or equipment which Landlord considers reasonably necessary in order to restore the temperature balance between the Leased Premises and the rest of the Building, including equipment which modifies the Building's air-conditioning system. All costs expended by Landlord to install any such machinery and equipment and any additional costs of operation and maintenance occasioned thereby shall be borne by Tenant, who shall reimburse Landlord for the same as additional rent and as provided in this Section 6.2.

Tenant shall not install or connect any electrical equipment other thanthe business machines and equipment typically used for general office purposes by tenants in office buildings comparable to the Building (a desk top computer being an example of such a typical business machine) and other than as set forth in this Lease (including but not limited to Section 7.3 and Article 19) without Landlord's prior written consent. If Landlord determines that the electricity used by the equipment to be so installed or connected exceeds the designed load capacity of the Building's electrical system or is in any way incompatible therewith, then Landlord shall have the right, as a condition to granting its consent, require Tenant to make such modifications to the utility supply or the equipment to be installed or connected, as Landlord considers to be reasonably necessary before such equipment may be so installed or connected. The cost of any such modifications shall be borne by Tenant, who shall reimburse Landlord for the same as additional rent (or any portion thereof paid by Landlord) as provided in this Section 6.2. Landlord acknowledges that Tenant will be using the Leased Premises for telecommunications equipment and switching/transmission facilities and Landlord’s consent shall not be unreasonably withheld or delayed with respect to the installation of such equipment or utility upgrades needed for such use.

Section 6.3Interruption of Services.

Tenant understands, acknowledges and agrees thatany one or more of the utilities or other Building services may be interrupted by accident, emergencyor other causes beyond Landlord's control; that Landlord does not represent or warrant the uninterrupted availability of such utilities or building services; that any such interruption shall not be deemed an eviction or disturbance of Tenant's right to possession, occupancy and use of the Leased Premises or any part thereof, or render Landlord liable to Tenant for damages by abatement of rent or otherwise, or relieve Tenant from the obligation to perform its covenants under this Lease; and that Landlord shall not be liable to Tenant for any injury, loss or damage occasioned by the bursting, stoppage or leaking of water, gas, sewer or other pipes, except in cases of the gross negligence or willful misconduct of Landlord or its agents. Landlord shall have no liability to Tenant (including without limitation liability for consequential damages or loss of business income or opportunity) arising out of, resulting from, or related to any such interruption of services provided herein, except in cases of the gross negligence or willful misconduct of Landlord or its agents. No such failure or interruption shall entitle Tenant to terminate this Lease, unless Tenant cannot operate its business for more than ten (10) consecutive days, in which case Tenant, at its sole option, may terminate this Lease by providing written notice to Landlord prior to the date such failure or interruption ceases.

Article 7Maintenance and Repairs

Section 7.1Tenant's Responsibility.

During the term of this Lease, Tenant shall, at its own cost and expense, maintain in good condition, repair and replace, if necessary, the interior of the Leased Premises, including but not limited to the electrical systems, heating and air conditioning systems, plate glass, floors, windows and doors, sprinkler and plumbing systems servicing the Leased Premises. Tenant, at its expense, shall obtain a preventive maintenance contract on the heating, ventilating and air conditioning systems that shall be subject to Landlord's reasonable approval. Tenant shall provide Landlord with a copy of the preventative maintenance contract no later than ninety (90) days after the Commencement Date. The preventative maintenance contract shall provide for the inspection and maintenance of the heating, ventilating and air conditioning system on not less than a semi-annual basis.

Section 7.2Landlord's Responsibility.

During the term of this Lease, Landlord shall maintain in good condition and repair and replace, if necessary, the roof, exterior walls, foundation and structural frame of the Building, the Building Premises and the Common Areas, and the portions of the plumbing system that are located outside of the Leased Premises, the costs of which shall be included in Operating Expenses (except to the extent that such costs are excluded pursuant to Section 3.2); provided, however, that to the extent any of the foregoing items require repair because of the negligence, misuse, or default of Tenant, its employees, agents, customers or invitees, Landlord shall make such repairs at Tenant's expense. Landlord shall have no liability to Tenant (including without limitation liability for consequential damages or loss of business income or opportunity) arising out of, resulting from, or related to any injury, damage or interference during any such repair or replacement, except in cases of the gross negligence or willful misconduct of Landlord or its agents.

Section 7.3Alterations.

Tenant shall not permit alterations or additions in or to the Leased Premises unless and until the plans have been approved by Landlord in writing, such approval not to be unreasonably conditioned, delayed or withheld. Tenant agrees to pay Landlord's reasonable charges for review of any proposed alterations or additions and supervision of any such alterations and additions. As a condition of such approval, Landlord may require Tenant to remove the alterations and restore the Leased Premises upon termination of this Lease; otherwise, all such alterations or improvements, except movable office furniture and equipment and trade fixtures, shall at Landlord’s option become a part of the realty and the property of Landlord, and shall not be removed by Tenant. Notwithstanding anything to the contrary, Tenant shall not be required to remove the alterations described in Exhibit “D” (the “Approved Alterations”).

In addition to and subject to the provisions of the preceding paragraph, including, but not limited to, Landlord’s consent to any alterations or additions that shall not be unreasonably withheld or delayed, Landlord and Tenant agree as follows:

(a)Tenant shall have the right to install HVAC dry coolers and other HVAC support equipment on the grounds behind the Leased Premises at a location mutually agreed to by Landlord and Tenant. There shall be no charge by Landlord to Tenant associated with the rooftop fixtures and the HVAC dry coolers and other HVAC support equipment located on the grounds behind the Leased Premises. All rooftop installations shall be consistent with governmental codes and shall be installed in a manner so as not to impact any warranties in effect on the roof membrane. Tenant shall have the right to perform an infrared and structural inspection of the roof to insure its integrity. This equipment (1) shall be considered a trade fixture, (2) shall not become a part of the realty and property of Landlord, and (3) shall be removed by Tenant upon the expiration of this Lease.

(b)Tenant shall have the right to install security systems to protect its technical areas. Except in the event of imminent danger to property or health, under no circumstance will Landlord or any of its representatives be granted permission to enter any technical areas without being accompanied by an authorized Tenant representative. This equipment (1) shall be considered a trade fixture, (2) shall not become a part of the realty and property of Landlord, and (3) shall be removed by Tenant upon the expiration of this Lease.

(c)Tenant shall have the right, at Tenant’s sole cost and expense, to install, operate, maintain, repair and replace for the Lease Term, a maximum 750 kW generator with a 500 to 1,100 gallon fossil fuel above-ground storage tank behind the Leased Premises in the parking lot, as mutually agreed upon by Landlord and Tenant, and in accordance with all local, state and federal laws. The location of the generator will require physical access between the generator location and the computer room/UPS location within the Leased Premises. Tenant shall have the right to test the generators between the hours of 8:00 PM on Friday and 7:00 AM on Monday and during all other times approved by Landlord, such approval not to be unreasonably withheld or delayed, and approved by the City of Southfield if necessary. This equipment (1) shall be considered a trade fixture, (2) shall not become a part of the realty and property of Landlord, and (3) shall be removed by Tenant upon the expiration of this Lease.

(d)Tenant shall have the right to install a redundant and dedicated Liebert system or equivalent HVAC system in a tonnage sufficient to cool its equipment that will run constantly (24 hours/day and 7 days/week). Tenant shall pay all costs and expenses for said installation and use. Landlord and Tenant shall mutually agree upon the area in which such HVAC system is installed. This equipment (1) shall be considered a trade fixture, (2) shall not become a part of the realty and property of Landlord, and (3) shall be removed by Tenant upon the expiration of this Lease.

(e)Tenant shall have the right to demise the technical area with fire-rated walls at Tenant’s sole cost and expense. Tenant shall also be entitled to modify the existing fire suppression system in the Leased Premises independent of any Building fire suppression system and install a “dry” system. Tenant will connect all alarm points to the existing fire protection system for reporting purposes. Tenant shall have the right to relocate any existing wet pipes serving other areas of the Building to non-critical areas (outside of the technical area). Tenant shall have the right to install a waterproof bladder on the floor of the Leased Premises.

(f)If windows are present in the technical area, Tenant shall have the right to “block” the window space in the Leased Premises from the inside. Tenant will work with Landlord for approval of the plans and insure that the outside building appearance will not materially change.

(g)Tenant shall have the right to reinforce an approximately 1,000 sq. ft. section of the Leased Premises to a 300 lbs/ft live load for battery placement.

If Landlord consents to Tenant's performance of alterations or additions to the Leased Premises, Tenant shall ensure that all alterations and improvements which are made or necessitated thereby shall be made in accordance with all applicable laws, regulations and building codes, in a good and workmanlike manner and in quality equal to or better than the original construction of the Leased Premises. Landlord's approval of the plans, specifications and working drawings for Tenant's alterations shall create no responsibility or liability on the part of Landlord for their completeness, design sufficiency, or compliance with all laws, rules and regulations of governmental agencies or authorities. Tenant shall indemnify, defend, and hold harmless Landlord and its officers, directors, members, managers, employees, contractors and representatives from all costs, loss or expense directly or indirectly for or on account of any liens asserted in connection with any labor or material furnished in connection with such alterations; and nothing in this Lease contained shall be construed to constitute a consent by Landlord to the creation of any lien. If any lien is filed against the Park for work claimed to have been done for, or material claimed to have been furnished to, Tenant, Tenant shall cause such lien to be discharged of record within thirty (30) days after filing by bonding or in any other lawful manner. Tenant shall indemnify, defend, and hold harmless Landlord and its officers, directors, members, managers, employees, contractors and representatives from all costs, losses, expenses, and attorneys' fees in connection with any such lien.

Tenant’s obligations set forth in this Article 7 shall survive the expiration or earlier termination of this Lease.

Article 8Casualty

Section 8.1Casualty.

In the event of total or partial destruction of the Building or the Leased Premises or other portions of the Park used by Tenant as set forth in Section 1.2 by fire or other casualty, unless this Lease is terminated as provided below, Landlord agrees to promptly restore and repair the Leased Premises, the Building and such other portions of the Park at Landlord's expense; provided, however, that Landlord's obligation hereunder shall be limited to the reconstruction of such of the tenant finish improvements as were originally required to be made by Landlord, if any. Any insurance proceeds not used by Landlord in restoring or repairing the Leased Premises and/or Building shall be the sole property of Landlord. Rent shall proportionately abate during the time that the Leased Premises or part thereof are unusable because of any such damage thereto. Notwithstanding the foregoing, if the Leased Premises are so destroyed that they cannot be repaired or rebuilt within one hundred eighty (180) days from the date on which the damage occurs, either Tenant or Landlord may, upon thirty (30) days written notice to the other party delivered prior to the date that the restoration required pursuant to this Section 8.1 is completed, terminate and cancel this Lease, whereupon all further obligations hereunder shall thereupon cease and terminate as of the date set forth in the notice, except as expressly set forth herein (including but not limited to the requirement that there be a reconciliation of the Additional Rent paid by Tenant for the final partial year) and all rent shall abate as of the date of the casualty.

Section 8.2Fire and Extended Coverage Insurance.

During the term of this Lease, Landlord shall maintain fire and extended coverage insurance on the Building, but shall not protect Tenant's property within the Leased Premises; and, notwithstanding the provisions of Section 8.1, Landlord shall not be liable for any damage to Tenant's property within the Park, except to the extent caused by the gross negligence or willful misconduct of Landlord and its employees, agents, and invitees. Without limiting the generality of the foregoing, Landlord shall not be liable for any damage to Tenant's property resulting from fire, explosion, falling plaster, steam, gas, electricity, sprinkler system leakage, or water or rain which may leak fromany part of the Building or from pipes, appliances or plumbing works therein or from the roof.

Section 8.3Waiver of Subrogation.

Landlord and Tenant hereby release each other and their respective agents and employees from any and all liability to each other or anyone claiming through or under them by way of subrogation or otherwise for any loss or damage to property caused by or resulting from risks insured against under the property insurance for loss, damage or destruction by fire or other casualty carried by the parties hereto and which was in force at the time of any such loss or damage or which would have been so covered had the insurance required hereunder been maintained; provided, however, that this release shall be applicable only with respect to loss or damage occurring during such time as the releaser’s policies of insurance contain a clause or endorsement to the effect that any such release shall not adversely affect or impair such policies or prejudice the right of the releaser to recover thereunder. Landlord and Tenant each agree that it will require its property insurance carriers to include in its policy such a clause or endorsement. However, if such endorsement cannot be obtained, or shall be obtainable only by the payment of an additional premium charge above that which is charged by companies carrying such insurance without such waiver of subrogation, then the party undertaking to obtain such waiver shall notify the other party of such fact and such other party shall have a period of ten (10) days after the giving of such notice to agree in writing to pay such additional premium if such policy is obtainable at additional cost (in the case of Tenant, pro rata in proportion of Tenant's rentable area to the total rentable area covered by such insurance); and if such other party does not so agree or the waiver shall not be obtainable, then the provisions of this Section 8.3 shall be null and void as to the risks covered by such policy for so long as either such waiver cannot be obtained or the party in whose favor a waiver of subrogation is desired shall refuse to pay the additional premium. If the release of either Landlord or Tenant, as set forth in the first sentence of this Section 8.3, shall contravene any law with respect to exculpatory agreements, the liability of the party in question shall be deemed not released, but no action or rights shall be sought or enforced against such party unless and until all rights and remedies against the other's insurer are exhausted and the other party shall be unable to collect such insurance proceeds. The waiver of subrogation referred to above shall extend to the agents and employees of each party, but only if and to the extent that such waiver can be obtained without additional charge (unless such party shall pay such charge). Nothing contained in this Section 8.3 shall be deemed to relieve either party from any duty imposed elsewhere in this Lease to repair, restore and rebuild.

Article 9Liability Insurance

Section 9.1Tenant's Responsibility.

Landlord shall not be liable to Tenant or to any other person for (i) damage to property or injury or death to persons due to the condition of the Leased Premises, the Building Premises, or the Common Areas, or (ii) the occurrence of any accident in or about the Leased Premises, Building Premises, or the Common Areas, (iii) any act or neglect of Tenant or any other tenant or occupant of the Park or of any other person; or (iv) any consequential, indirect, incidental or special damages regardless of causation, except in each case to the extent such damage, injury or death is the result of Landlord's gross negligence or willful misconduct; and Tenant hereby releases Landlord from any and all liability for the same. Tenant shall be liable for, and shall indemnify, defend and hold harmless Landlord and its officers, directors, members, managers, employees, contractors and representatives from, any and all liability for (i) any act or neglect of Tenant and any person coming on the Leased Premises, Building Premises or Common Areas by the license of Tenant, express or implied, or (ii) any damage to the Leased Premises, and (iii) any injury to persons, including death, or damage to property occurring in, on or about the Leased Premises, except to the extent that, in each case, such damage, injury or death is the result of Landlord's gross negligence or willful misconduct, and except for any loss or damage from fire or casualty insured as provided in 8.2. Notwithstanding the foregoing, Tenant shall bear the risk of any loss or damage to its property as provided in 8.2. Tenant’s obligations set forth in this Section 9.1 shall survive the expiration or earlier termination of this Lease.

Section 9.2Tenant's Insurance.

Tenant, in order to insure against the liabilities specified in this Lease, shall at all times during the term of this Lease carry, at its own expense, one or more policies of general public liability and property damage insurance, issued by one or more insurance companies acceptable to Landlord, with the following minimum coverages:

(a)Worker's Compensation: minimum statutory amount.

(b)Commercial General Liability Insurance, including blanket, contractualliability, broadform property damage, personal injury, completed operations, products liability, and fire damage: Not less than $2,000,000 Combined Single Limit for both bodily injury and property damage.

(c)Fire and Extended Coverage, Vandalism and Malicious Mischief, and Sprinkler Leakage insurance, if applicable, for the full cost of replacement of Tenant's property.

(d)Business interruption insurance.

The insurance policy or policies shall protect Tenant and Landlord as their interests may appear, naming Landlord and Landlord's managing agent and mortgagee as additional insureds, and shall provide that they may not be canceled on less than thirty (30) days prior written notice to Landlord. Tenant shall furnish Landlord with Certificates of Insurance evidencing all required coverage. Should Tenant fail to carry such insurance and furnish Landlord with such Certificates of Insurance after a request to do so, Landlord shall have the right to obtain such insurance and collect the cost thereof from Tenant as additional rent.

Article 10Eminent Domain

If all or any substantial part of the Building Premises or Common Areas, shall be acquired by the exercise of eminent domain, Landlord may terminate this Lease by giving written notice to Tenant no later than fifteen (15) days after possession thereof is so taken. If all or any part of the Leased Premises shall be acquired by the exercise of eminent domain in such a manner that the Leased Premises shall become unusable by Tenant for the purpose for which it is then being used, as permitted hereunder Tenant may terminate this Lease by giving written notice to Landlord no later than fifteen (15) days after possession of the Leased Premises or part thereof is so taken. Tenant shall have no claim against Landlord on account of any such acquisition for the value of any unexpired portion of the Lease Term remaining after possession of the Leased Premises is taken. All damages awarded shall belong to and be the sole property of Landlord; provided, however, that Tenant shall be entitled to any award expressly made to Tenant by any governmental authority for the cost of or the removal or damages to Tenant's stock, equipment, fixtures and leasehold improvements made at Tenant's expense, together with other moving expenses or business dislocation damages.

Article 11Assignment and Sublease

Except as set forth below, Tenant shall not voluntarily or by operation of law assign, transfer, mortgage, sublet or otherwise transfer or encumber all or any part of Tenant's interest in this Lease or in the Leased Premises without Landlord’s prior express written consent, which shall not be unreasonably withheld, conditioned or delayed. Except for Providing Parties using the Leased Premises in accordance with Section 19.3, Tenant shall not permit the Leased Premises or any part thereof to be used or occupied by others without Landlord's prior express written consent, which shall not be unreasonably withheld, conditioned or delayed. If Landlord consents to any such assignment or subletting, Tenant shall pay to Landlord, as Additional Rent, fifty percent (50%) of all moneys or other consideration received by Tenant from Tenant's transferee in connection therewith (including, without limitation, rent received in connection with any such sublease, but excluding any amounts received in consideration for services provided by Tenant or other than as compensation for occupancy of the Leased Premises) in excess of the amounts owed by Tenant to Landlord under this Lease, which Additional Rent shall be paid to Landlord as and when received by Tenant. Any attempted assignment, transfer, mortgage, encumbrance or subletting without such consent shall be void and shall constitute a breach of this Lease. If Landlord consents to such assignment or subletting, Tenant shall remain primarily liable to perform all of the covenants and conditions contained in this Lease, including but not limited to payment of Minimum Annual Rent and Additional Rent as provided herein (except to the extent that Landlord expressly releases Tenant in connection with any such consent). The acceptance of rent from any other person shall not be deemed to be a waiver of any of the provisions of this Lease or to be a consent to the assignment of this Lease or the subletting of the Leased Premises.

Without in any way limiting Landlord's right to refuse to consent to any assignment or subletting of this Lease, Landlord reserves the right to refuse to give such consent if in Landlord's discretion and opinion (i) the value or use of the Leased Premises is or may be in any way adversely affected; (ii) the business reputation of the proposed assignee or subtenant is deemed unacceptable; (iii) to the extent that Tenant is being released from liability pursuant to this Lease, the financial worth of the proposed assignee or subtenant is insufficient to meet the obligations hereunder or is less than that of Tenant; or (iv) the proposed subtenant or assignee is a then existing tenant or occupant of the Building or a person or entity with whom Landlord is then dealing with respect to leasing space in the Building, or with whom Landlord has had any dealings within the past six (6) months with respect to leasing space in the Building. Tenant agrees to reimburse Landlord for reasonable accounting and attorneys' fees incurred in conjunction with the processing and documentation of any such requested transfer, assignment, subletting or any other hypothecation of this Lease or Tenant's interest in and to the Leased Premises.

Notwithstanding anything to the contrary in this Lease, including but not limited to the provisions set forth above, any assignment of this Lease or sublease of the Leased Premises to an “Affiliate” of Tenant shall not require Landlord’s consent, Tenant’s only obligation being to deliver to Landlord not less than fifteen (15) days prior notice of such assignment or sublease. For purposes of this Lease, the term "Affiliate" shall mean and refer to any person or entity controlling, controlled by or under common control with another person or entity. "Control", as used herein, shall mean the ownership, directly or indirectly, of at least fifty-one percent (51%) of the voting securities of, or possession of the right to vote in the ordinary direction of its affairs at least fifty-one percent (51%) of the voting interest in, any person or entity.

Co-location pursuant to Section 19.3 shall not be subject to the terms and conditions set forth in this Article 11.

Article 12Transfers by Landlord

Section 12.1Sale and Conveyance of the Building.

Landlord shall have the right to sell and convey the Building at any time during the term of this Lease, subject only to the rights of Tenant hereunder; and such sale and conveyance shall operate to release Landlord from liability hereunder arising after the date of such conveyance, provided that the purchaser of the Building assumes Landlord's obligations and liabilities hereunder as of the date of conveyance.

Section 12.2Subordination and Estoppel Certificate.

Subject to subsection (c) and the provisions of Section 12.4 below, Landlord shall have the right to subordinate this Lease to any mortgage presently existing or hereafter placed upon the Building by so declaring in such mortgage; and the recording of any such mortgage shall make it prior and superior to this Lease regardless of the date of execution or recording of either document. Within ten (10) business days following receipt of a written request from Landlord, Tenant shall execute and deliver to Landlord, without cost:

(a) any reasonable instrument which Landlord may deem necessary or desirable to confirm the subordination of this Lease pursuant to the terms set forth herein. If Tenant fails or refuses to do so, Landlord may execute such instrument in the name and as the act of Tenant.

(b) an estoppel certificate in such form as Landlord may reasonably request certifying (i) that this Lease is in full force and effect and unmodified (or, if modified, stating the nature of such modification), (ii) the date to which rent has been paid, (iii) that there are not, to Tenant's knowledge, any uncured defaults (or specifying such defaults if any are claimed), and (iv) any other matters or state of facts reasonably required respecting the Lease or Tenant's occupancy of the Leased Premises. Such estoppel may be relied upon by Landlord and by any purchaser or mortgagee of all or any part of the Building.

(c) Notwithstanding the foregoing, if the mortgagee shall take title to the Leased Premises through foreclosure or deed in lieu of foreclosure, Tenant shall be allowed to continue in possession of the Leased Premises as provided for in this Lease so long as Tenant shall not be in default. Tenant shall, in the event any proceedings are brought to foreclose any such mortgage, attorn to the purchaser upon any such foreclosure and recognize such purchaser as the landlord under this Lease.

Section 12.3Lender's Right.

Landlord shall have the right, at any time and from time to time, to notify Tenant in writing that Landlord has placed a mortgage on the Building, specifying the identity of the lender ("Lender"). Following receipt of such notice, Tenant agrees to give such Lender a copy of any notice of default served by Tenant on Landlord. Tenant further agrees that if Landlord fails to cure any default as provided in Section 13.3 herein, Lender shall have an additional thirty (30) days within which to cure such default; provided, however, that if the term, condition, covenant or obligation to be performed by Landlord is of such nature that the same cannot reasonably be performed within such thirty-day period, such default shall be deemed to have been cured if Lender commences such performance within said thirty-day period and thereafter diligently completes the same.

Section 12.4Non-Disturbance Agreement.

Landlord represents and warrants to Tenant that, as of the execution of this Lease, the only mortgage and/or ground lease to which Landlord’s interest in the Building is subject (the “Existing Superior Interest”) is a mortgage granted to First Union National Bank. Upon execution of this Lease, Landlord shall use reasonable efforts to obtain from First Union National Bank and deliver to Tenant a written agreement (a “Non-Disturbance Agreement”) between Tenant and First Union National Bank providing that (i) Tenant’s lease of the Leased Premises under this Agreement shall not be disturbed by any exercise of rights under or in connection with the ground lease or security instrument held by such party; and (ii) this Lease shall not be terminated except in accordance with its terms.In order to effectuate any subordination of this Lease to any future lenders or ground lessors, Landlord shall obtain and deliver to Tenant a Non-Disturbance Agreement contemporaneously with such subordination, in form mutually acceptable to the parties.

Article 13Default and Remedy

Section 13.1Default.

The occurrence of any of the following shall be deemed an "Event of Default":

(a) Tenant shall fail to pay any Monthly Rental Installment or Additional Rent within five (5) business days after the same shall be due and payable, or Tenant shall fail to pay any other amounts due Landlord from Tenant within ten (10) business days after the same shall be due and payable, provided, however, that any such failure to make a payment when due shall not be an Event of Default if Landlord receives such payment within three (3) days after Tenant received written notice of such failure from Landlord.

(b) Tenant shall fail to perform or observe any term, condition, covenant or obligation as required under this Lease for a period of ten (10) business days after written notice thereof from Landlord; provided, however, that if the nature of Tenant's default is such that more than ten days are reasonably required to cure, then such default shall be deemed to have been cured if Tenant commences such performance within said ten-day period and thereafter diligently completes the required action within a reasonable time.

(c) All or substantially all of Tenant's assets in the Leased Premises or Tenant's interest in this Lease are attached or levied under execution (and Tenant does not discharge the same within sixty (60) days thereafter); a petition in bankruptcy, insolvency, or for reorganization or arrangement is filed by or against Tenant (and Tenant fails to secure a stay or discharge thereof within sixty (60) days thereafter); Tenant shall be insolvent and unable to pay its debts as they become due; Tenant makes a general assignment for the benefit of creditors; Tenant takes the benefit of any insolvency action or law; the appointment of a receiver or trustee in bankruptcy for Tenant or its assets if such receivership has not been vacated or set aside within thirty (30) days thereafter; dissolution or other termination of Tenant's corporate charter if Tenant is a corporation.

Section 13.2Remedies.

Upon the occurrence of any Event of Default, Landlord shall have the following rights and remedies, in addition to those allowed by law, any one or more of which may be exercised without further notice to or demand upon Tenant, except as set forth below:

(a) Landlord may apply the security deposit or reenter the Leased Premises and cure any default of Tenant, and Tenant shall reimburse Landlord as additional rent for any costs and expenses which Landlord thereby incurs; and Landlord shall not be liable to Tenant for any loss or damage which Tenant may sustain by reason of Landlord's action, unless caused by Landlord's gross negligence or willful misconduct.

(b) Landlord may terminate this Lease or, without terminating this Lease, terminate Tenant's right to possession of the Leased Premises upon providing Tenant written notice of such termination and thereafter (i) neither Tenant nor any person claiming under or through Tenant shall be entitled to possession of the Leased Premises, and Tenant shall immediately surrender the Leased Premises to Landlord; and (ii) Landlord may reenter the Leased Premises and dispossess Tenant and any other occupants of the Leased Premises by any lawful means and may remove their effects, without prejudice to any other remedy which Landlord may have. Upon the termination of this Lease, Landlord may declare the present value (as determined by Landlord) of all rent which would have been due under this Lease for the balance of the Lease Term to be immediately due and payable, whereupon Tenant shall be obligated to pay the same to Landlord, together with all loss or damage which Landlord may sustain by reason of Tenant's default ("Default Damages"), which shall include without limitation expenses of preparing the Leased Premises for re-letting, demolition, repairs, tenant finish improvements, and brokers' and attorneys' fees, it being expressly understood and agreed that the liabilities and remedies specified in this subsection (b) shall survive the termination of this Lease.

(c) Landlord may, without terminating this Lease, re-enter the Leased Premises and re-let all or any part thereof for a term different from that which would otherwise have constituted the balance of the Lease Term and for rent and on terms and conditions different from those contained herein, whereupon Tenant shall be immediately obligated to pay to Landlord as liquidated damages the difference between the present value (using a discount rate equal to the “prime rate” as reported in the "Wall Street Journal" or other comparable prime rate index selected by Landlord if the "Wall Street Journal" discontinues publishing such data) of the rent provided for herein and that provided for in any lease covering a subsequent re-letting of the Leased Premises for the period which would otherwise have constituted the balance of the Lease Term, together with all of Landlord’s Default Damages.

(d) Landlord may sue for injunctive relief or to recover damages for any loss resulting from the breach.

(e) In addition to the defaults and remedies described above, the parties hereto agree that if Tenant defaults in the performance of any (but not necessarily the same) term or condition of this Lease three (3) or more times during any calendar year, regardless of whether such defaults are ultimately cured, then Tenant agrees to pay to Landlord upon the third and each subsequent default during such calendar year under this habitual default provision, the amount of One Thousand Dollars ($1,000.00) as liquidated damages to cure such default, payable within ten (10) days after written demand therefore to Tenant by Landlord. Tenant acknowledges in the event of such repetitive defaults that (i) Landlord will incur additional unanticipated costs as a result of such repetitive defaults, including but not limited to administrative costs and legal fees, and (ii) the purpose of this provision is to adequately compensate Landlord for those costs, which would be difficult to determine with certainty.

Section 13.3Landlord's Default and Tenant's Remedies.

Landlord shall be in default if it shall fail to perform or observe any term, condition, covenant or obligation as required under this Lease for a period of fifteen (15) days after written notice thereof from Tenant to Landlord and to Lender, if any; provided, however, that if the term, condition, covenant or obligation to be performed by Landlord is of such nature that the same cannot reasonably be performed within such 15-day period, such default shall be deemed to have been cured if Landlord commences such performance within said 15-day period and thereafter diligently undertakes to complete the same. If Landlord fails to cure such default within the required time period, Tenant may, at its option, (a) if the default relates to a condition that is for the exclusive benefit of the Leased Premises, perform such obligation or make such repair or replacement, and Landlord shall reimburse Tenant for the reasonable cost thereof within thirty (30) days of receiving receipts and evidence of payment for the cost of curing such default, or (b) sue for injunctive relief or to recover damages for any loss resulting from the breach, but Tenant shall not be entitled to terminate this Lease or withhold, offset or abate any rent due hereunder, except as otherwise expressly set forth herein.

Section 13.4Limitation of Landlord's Liability.

If Landlord shall fail to perform or observe any term, condition, covenant or obligation required to be performed or observed by it under this Lease and if Tenant shall, as a consequence thereof, recover a money judgment against Landlord (whether compensatory or punitive in nature), Tenant agrees that it shall look solely to Landlord's right, title and interest in and to the Building Premises, together with any proceeds thereof (including but not limited to insurance proceeds, condemnation proceeds, sale proceeds and rents) for the collection of such judgment; and Tenant further agrees that no other assets of Landlord shall be subject to levy, execution or other process for the satisfaction of Tenant's judgment and that Landlord shall not be personally liable for any deficiency.

The references to "Landlord" in this Lease shall be limited to and mean and include only the owner or owners, at the time, of the fee simple interest in the Building. In the event of a sale or transfer of such interest (except a mortgage or other transfer as security for a debt), the "Landlord" named herein, or, in the case of a subsequent transfer, the transferor, shall, after the date of such transfer, be automatically released from all liability for the performance or observance of any term, condition, covenant or obligation required to be performed or observed by Landlord hereunder arising thereafter; and the transferee shall be deemed to have assumed all of such terms, conditions, covenants and obligations arising thereafter.

Section 13.5Nonwaiver of Defaults.

Neither party's failure or delay in exercising any of its rights or remedies or other provisions of this Lease shall be construed to be a waiver thereof or affect its right thereafter to exercise or enforce each and every such right or remedy or other provision. No waiver of any default shall be deemed to be a waiver of any other default. Landlord's receipt of less than the full rent due shall not be construed to be other than a payment on account of rent then due, nor shall any statement on Tenant's check or any letter accompanying Tenant's check be deemed an accord and satisfaction, and Landlord may accept such payment without prejudice to Landlord's right to recover the balance of the rent due or to pursue any other remedies provided in this Lease. No act or omission by Landlord or its employees or agents during the term of this Lease shall be deemed an acceptance of a surrender of the Leased Premises, and no agreement to accept such a surrender shall be valid unless in writing and signed by Landlord. Notwithstanding the foregoing, Tenant's failure to timely exercise any options hereunder shall be deemed to waive such options.

Section 13.6Attorneys' Fees.

If either party defaults in the performance or observance of any of the terms, conditions, covenants or obligations contained in this Lease and the non-defaulting party obtains a judgment against the defaulting party, then the defaulting party agrees to reimburse the non-defaulting party for the reasonable attorneys' fees incurred thereby.

Article 14Right of First Offer

Section 14.1Exercise of Expansion Right.

Provided that Tenant is not in default of any of the terms and conditions of this Lease beyond any applicable cure period and at least three (3) years are remaining in the Lease Term (including any Options exercised by Tenant prior to or concurrent with the exercise of its rights set forth in this Section 14.1), Tenant shall have a one-time first opportunity to lease additional space in the Building (the “Expansion Right”), provided that such space is available and vacant and subject to Landlord’s right to extend any existing tenant’s lease term for such space (the "Expansion Area”). Landlord shall notify Tenant when any portion of the Expansion Area is available for lease, and Tenant shall have ten (10) business days after receipt of Landlord’s notice to either accept or refuse that portion of the Expansion Area. If accepted, Tenant shall execute a lease amendment for the Expansion Area under the terms and conditions set forth in this Section 14. If Tenant refuses that portion of the Expansion Area, or if Tenant fails to notify Landlord in writing that it will exercise the Expansion Right within the time limit specified, Tenant shall be conclusively presumed to have relinquished this option with respect to that portion of the Expansion Area, and Landlord shall thereafter be free to lease that portion of the Expansion Area (or any portion thereof) to any other party without further restrictions.

Section 14.2Terms for Expansion Area.

If Tenant elects to lease the Expansion Area pursuant to this Section 14, Tenant shall do so on the same terms and conditions of this Lease in effect on the date that Tenant takes possession of the Expansion Area, including, but not limited to the following:

(i)the Minimum Annual Rent shall be the amount of rent per square foot (with step escalations) set forth in this Lease;

(ii)Tenant's proportionate share of Real Estate Taxes and Operating Expenses shall be increased to reflect the increased area of the Leased Premises;

(iii)The commencement date of the term for the Expansion Area shall be the later of (1) thirty (30) days after Tenant notifies Landlord that it has accepted said Expansion Area and (2) the date Landlord delivers possession of the Expansion Area to Tenant;

(iv)Tenant shall take the Expansion Area in its then 100% “as-is” condition;

(v)Tenant shall execute a lease amendment which sets forth that the term of the Lease for the Expansion Area shall be for a period equal to the remaining term of the Lease Term; and

(vi)This option is personal to Tenant, and shall not be assigned or transferred to any other party whatsoever.

Article 15Right of First Refusal

Provided that Tenant is not then in default of any of the terms and conditions of this Lease, and further provided that Tenant has a minimum of three (3) years remaining under the Lease Term (including any renewal options that have been exercised prior to or concurrent with the exercise of its rights set forth in this Article 15), Tenant shall have a one time right of first refusal (the “Right of First Refusal”) to lease that suite in the Building consisting of 5,181 sq. ft. commonly known as 21310 Melrose Avenue shown on Exhibit “A” (the “Right of First Refusal Area”). When Landlord first receives or delivers a letter of intent or similar document for a prospective tenant to lease the Right of First Refusal Area that is acceptable to Landlord, Landlord shall send a copy of such document to Tenant (the “Proposal”). Upon receiving a Proposal, Tenant shall have five (5) business days from the date that Tenant receives a Proposal to exercise this option to lease the entire Right of First Refusal Area from Landlord on the terms and conditions set forth in Section 14.2. Tenant's election must be made by delivery of written notice to Landlord within five (5) business days after receipt of the Proposal from Landlord, and upon such exercise, Landlord and Tenant shall have an additional fifteen (15) days in which to enter into a binding lease amendment upon the terms set forth in Section 14.2. In the event Tenant rejects the Proposal, fails to accept the Proposal within the five (5) business day period, or the lease amendment is not entered into between Landlord and Tenant within the said fifteen (15) day period, and provided that Landlord enters into a lease with a tenant with respect to such Right of First Refusal Area within six (6) months after providing a copy of the proposal to Tenant, Tenant shall be conclusively presumed to have relinquished the Right of First Refusal, and Landlord shall thereafter be free to lease the Right of First Refusal Area (or any portion thereof) to any other party without further restrictions.

Article 16Notice and Place of Payment

Section 16.1Notices.

Any notice required or permitted to be given under this Lease or by law must be in writing and must be given only by one of the following methods:

·   delivery in person,

·   via facsimile,

·   by overnight courier, or

·   mailed by certified mail, postage prepaid

to (a) the party who is to receive such notice at the address specified in the Basic Lease Provisions and (b) in the case of a default notice from Tenant to Landlord, any Lender designated by Landlord. All notices, demands and requests shall be deemed given (i) when personally delivered or sent by facsimile transmission to the party to be given the notice or other communication, (ii) on the business day following the day such notice or other communication is sent by overnight courier, or (iii) the third business day following the day such notice or other communication is sent by certified mail. Either party may change its address by giving written notice thereof to the other party in the manner provided in this Section 16.1.

Section 16.2Place of Payment.

All payments required to be made by Tenant to Landlord shall be delivered or mailed to Landlord's management agent at the address specified in the Basic Lease Provisions or any other address Landlord may specify from time to time by written notice to Tenant.

Article 17Hazardous Materials

Tenant shall not in any manner use, maintain or allow the use or maintenance of the Leased Premises in violation of any law, ordinance, statute, regulation, rule or order (collectively "Laws") of any governmental authority, including but not limited to Laws governing zoning, health, safety (including fire safety), occupational hazards, and pollution and environmental control. Tenant shall not use, maintain or allow the use or maintenance of the Leased Premises or any part thereof to treat, store, dispose of, transfer, release, convey or recover Hazardous Materials (as hereinafter defined) nor shall Tenant otherwise, in any manner, possess or allow the possession of any Hazardous Materials on or about the Leased Premises; provided, however, any Hazardous Material lawfully permitted and generally recognized as necessary and appropriate for general office use or otherwise in de minimus quantities may be stored and used on the Leased Premises so long as (i) such storage and use is in the ordinary course of Tenant's business permitted under this Lease; (ii) such storage and use is performed in compliance with all applicable Laws; and (iii) Tenant delivers prior written notice to Landlord of the identity of and information regarding such materials as Landlord may require. "Hazardous Materials" shall mean any solid, liquid or gaseous waste, substance or emission or any combination thereof which may (i) cause or significantly contribute to an increase in mortality or in serious illness, or (ii) pose the risk of a substantial present or potential hazard to human health, to the environment or otherwise to animal or plant life, and shall include without limitation hazardous substances and materials described in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended; the Resource Conservation and Recovery Act, as amended; and any other applicable federal, state or local Laws. Tenant shall immediately notify Landlord of the presence or suspected presence of any Hazardous Materials on or about the Leased Premises if Tenant has not already done so pursuant to the second sentence of this paragraph and shall deliver to Landlord any notice received by Tenant relating thereto. Tenant shall promptly notify Landlord of, and shall promptly provide Landlord with true, correct, complete and legible copies of, all of the following environmental items relating to the Leased Premises which may be filed or prepared by or on behalf of, or delivered to or served upon Tenant: all orders, reports, notices, listings and correspondence (even those which may be considered confidential) of or concerning the release, investigation of, compliance, clean up, remedial and corrective actions, and abatement of Hazardous Materials, whether or not required by any applicable laws, including, but not limited to, reports and notices required by or given pursuant to any Tenant's use, handling storage or disposal of Hazardous Materials. In the event of a release of any Hazardous Materials in, on or about the Leased Premises, Tenant shall promptly provide Landlord with copies of all reports and correspondence with or from all governmental agencies or any other persons relating to such release.

Landlord and its agents shall have the right, but not the duty, to inspect theLeased Premises and conduct tests thereon at any time to determine whether or the extent to which there are Hazardous Materials on the Leased Premises. Landlord shall have the right to immediately enter upon the Leased Premises to remedy any condition that is not in compliance with applicable laws or is otherwise not in compliance with the requirements set forth above. In exercising its rights herein, Landlord shall use reasonable efforts to minimize interference with Tenant's business but such entry shall not constitute an eviction of Tenant, in whole or in part, and Landlord shall not be liable for any interference, loss, or damage to Tenant's property or business caused thereby, except to the extent caused by Landlord's gross negligence or willful misconduct. If Landlord or any lender or governmental agency shall ever require testing to ascertain whether there has been a release of Hazardous Materials, then the reasonable costs thereof shall be reimbursed by Tenant to Landlord upon demand as Additional Rent to the extent that such requirement arose in whole or in part because of Tenant. Tenant shall execute affidavits, representations and the like from time to time, at Landlord's request, concerning Tenant's best knowledge and belief regarding the presence of any Hazardous Materials on the Leased Premises or Tenant's intent to store or use Hazardous Materials on the Leased Premises. Tenant shall indemnify, defend and hold harmless Landlord and its officers, directors, members, managers, employees, contractors and representatives from any and all claims, loss, liability, costs, expenses or damage, including attorneys' fees and costs of remediation, incurred by Landlord in connection with any breach by Tenant of its obligations under this section. The covenants and obligations of Tenant hereunder shall survive the expiration or earlier termination of this Lease.

An environmental audit may be conducted at Landlord’s option in connection with Tenant's surrender of the Leased Premises at the expiration, or earlier termination, of the Lease. Tenant shall promptly comply with all requirements of such audit and cure all matters raised therein at Tenant's sole cost. If such audit indicates Tenant has not complied with the provisions of this Article 17, Tenant shall promptly reimburse Landlord for the cost of such environmental audit.

Landlord represents and warrants to Tenant that except as disclosed in the Phase I Environmental Site Assessment Report, dated April 26, 2001, prepared by IVI Environmental, Inc. (a copy of which has been provided to Tenant), no Hazardous Material has been used, generated, manufactured, produced, stored, released, discharged or disposed of on, under or about the Leased Premises, Building Premises, Building or Park or transported to or from the Park by any entity, firm or person, or from any source or cause whatsoever. Landlord shall indemnify, defend and hold harmless Tenant and its officers, directors, members, managers, employees, contractors and representatives from any and all claims, loss, liability, costs, expenses or damage, including attorneys' fees and costs of remediation, incurred by Tenant in connection with any breach of the representation and warranty set forth in the preceding sentence. The obligations of Landlord set forth in this paragraph shall survive the expiration or earlier termination of this Lease.

Article 18Mold Monitoring, Inspecting, and Remediation

Section 18.1Monitoring of Leased Premises.

Landlord warrants and represents that as of the date of this Agreement, (i) there are no Mold Conditions (as defined below) in the Leased Premises, and (ii) to Landlord’s knowledge, there have been no Mold Conditions in the Leased Premises.

Tenant, at its sole cost and expense, shall:

(a)Regularly monitor the Leased Premises for the presence of mold or for any conditions that reasonably can be expected to give rise to mold (the “Mold Conditions”), including, but not limited to, observed or suspected instances of water damage, mold growth, repeated complaints of respiratory ailment or eye irritation by Tenant’s employees or any other occupants in the Leased Premises, or any notice from a governmental agency of complaints regarding the indoor air quality at the Leased Premises; and

(b)Promptly notify Landlord in writing if it suspects mold or Mold Conditions at the Leased Premises.

Section 18.2Inspection of Leased Premises.

In the event of suspected mold or Mold Conditions at the Leased Premises, Tenant, at its sole cost and expense, shall promptly cause an inspection of the Leased Premises to be conducted, during such time as Landlord may designate, to determine if mold or Mold Conditions are present at the Leased Premises, and shall:

(a)Notify Landlord, in writing, at least three days prior to the inspection, of the date on which the inspection shall occur, and which portion of the Leased Premises shall be subject to the inspection;

(b)Retain an industrial hygienist certified by the American Board of Industrial Hygienists (“CIH”) or an otherwise qualified mold consultant (generally, “Mold Inspector”) to conduct the inspection; and

(c)Cause such Mold Inspector to:

(i)Obtain or maintain errors and omissions insurance coverage with terms and limits customarily maintained by Mold Inspectors, adding Landlord as an additional insured with respect to Landlord’s vicarious liability, and provide to Landlord evidence of such coverage and a copy of the endorsement granting Landlord additional insured status;

(ii)Perform the inspection in a manner that is strictly confidential and consistent with the duty of care exercised by a Mold Inspector; and

(iii)Prepare an inspection report, keep the results of the inspection report confidential, and promptly provide a copy to Landlord.

Section 18.3Remediation of Mold.

In the event the inspection required by Section 18.2 determines that mold or Mold Conditions are present at the Leased Premises, and (A) the source of the Mold Conditions (i.e. the source of the moisture causing the Mold Conditions) is not from the exterior of the Leased Premises or (B) the Mold Conditions have increased or come into existence due to Tenant’s failure to properly monitor the Leased Premises in accordance with Section 18.1, then

(a)Tenant, at its sole cost and expense, shall promptly;

(i)Hire trained and experienced mold remediation contractors to prepare a remediation plan and to remediate the mold or Mold Conditions at the Leased Premises;

(ii)Send Landlord notice, in writing, with a copy of the remediation plan, at least five days prior to the mold remediation, stating:

(A)   The date on which the mold remediation shall start;

(B)   Which portion of the Leased Premises shall be subject to the remediation;

(C)   The name, address, and telephone number of the certified mold remediation contractors performing the remediation;

(D)   The remediation procedures and standards to be used at the Leased Premises;

(E)   The clearance criteria to be employed at the conclusion of the remediation; and

(F)   The date the remediation will conclude;

(iii)Notify, in accordance with any applicable state or local health or safety requirements, its employees as well as occupants and visitors of the Leased Premises of the nature, location, and schedule for the planned mold remediation;

(iv)Ensure that the mold remediation is conducted in accordance with the relevant provisions of the document Mold Remediation in Schools and Commercial Buildings (EPA 402-K-01-001, March 2001) (“EPA Guidelines”), published by the U.S. Environmental Protection Agency, as may be amended or revised from time to time, or any other applicable, legally binding federal, state, or local laws, regulatory standards or guidelines; and

(v)Provide Landlord with a draft of the mold remediation report and give Landlord a reasonable opportunity to review and comment thereon, and when such report is finalized, promptly provide Landlord with a copy of the final remediation report.

In the event (A) the inspection required by Section 18.2 determines that mold or Mold Conditions are present at the Leased Premises, (B) the source of the Mold Conditions (i.e. the source of the moisture causing the Mold Conditions) is from the exterior of the Leased Premises, and (C) the Mold Conditions have not increased nor come into existence due to Tenant’s failure to properly monitor the Leased Premises in accordance with Section 18.1, then Landlord shall perform the obligations of Tenant set forth in subsection (a) above, at Landlord's sole cost and expense.

Article 19Telecommunications Use

Section 19.1Telecommunications Equipment and Systems.

(a)Installation of Telecommunications Equipment. During the Lease Term, Tenant shall have the right, subject to the requirements of this Article 19 and other provisions of this Lease, to install telecommunications equipment and systems on up to two hundred (200) noncontiguous square feet of the roof of the Building (which areas Tenant may cage or otherwise secure)without charge for the purposes of serving customers, interfacing with satellite services and for placement of other transmission and reception facilities. In addition, Tenant shall have the right to install Local Multipoint Distribution (LMDS) transmission equipment that will consist of: (i) hub site antenna(s); (ii) GPS dish(es); and/or (iii) customer premise equipment (CPE) dish(es). This equipment and any other telecommunications equipment installed by Tenant is hereinafter collectively referred to as the "Telecommunications Equipment". Tenant shall submit for Landlord's review and approval, which shall not be unreasonably withheld, conditioned or delayed, detailed plans and specifications relative to the installation of the Telecommunications Equipment and the location of any such additional Telecommunications Equipment if located outside of the Leased Premises, specifying the size, number, amount and design of each item of Telecommunications Equipment.

(b)Maintenance of Telecommunications Equipment. Tenant shall at all times maintain the Telecommunications Equipment, including all cabling and wiring, in good condition and repair, and in strict compliance with all applicable law. Tenant represents and warrants that throughout the Lease Term, Tenant shall procure, obtain and maintain, at Tenant's sole cost and expense, all material licenses, permits and approvals required under applicable law for the exercise of Tenant’s rights under this Article 19.

(c)Tenant shall not exercise its rights under this Article 19 in any way that interferes with the use of the Building or Park by Landlord and tenants or licensees of Landlord leasing or licensing space in the Park. The operation of the Telecommunications Equipment shall not interfere with the maintenance or operation of the Building or the Park, including but not limited to, the other permitted rooftop equipment, or any other system or equipment serving the Building or Park and/or its occupants. Tenant shall indemnify, defend, and hold harmless Landlord and its officers, directors, members, managers, employees, contractors and representatives from all injuries, costs, expenses, liabilities, losses, damages, injunctions, suits, actions, fines, penalties, and demands of any kind or nature (including reasonable attorneys' fees) arising from any such interference. Tenant shall be responsible for all costs associated with any reasonable tests necessary to resolve any and all interference caused by Tenant as set forth in this Agreement. All operations by Tenant shall be lawful and in compliance with all FCC rules and regulations and applicable law. Landlord reserves the right to lease and/or license other portions of the Park to other parties for telecommunications transmitting or receiving sites during the term of this Lease, provided, however, that Landlord shall require any such future lessee or licensee of telecommunications transmitting or receiving sites to not interfere with the use or operation of any of Tenant's then existing Telecommunications Equipment.

(d)Conditions of Installation. Tenant shall comply with applicable laws relating to the installation, operation, maintenance, modification, replacement and removal of the Telecommunications Equipment and will pay all costs and expenses relating to the same, including the cost of obtaining and maintaining any necessary permits or approvals for the same in compliance with applicable laws. The installation, operation and maintenance of the Telecommunications Equipment at the Building shall not materially adversely affect the structure or operating systems of the Building.

(e)Indemnification. Tenant agrees to indemnify, defend, and hold harmless Landlord, its officers, directors, members, managers, employees, contractors and representatives from and against any and all injuries, costs, expenses, liabilities, losses, damages, injunctions, suits, actions, fines, penalties, and demands of any kind or nature (including reasonable attorneys' fees) arising out of Tenant's installation, operation, maintenance, modification, repair, or removal of the Telecommunications Equipment, except to the extent any such liability, expense, loss or damage results from the gross negligence or willful misconduct of Landlord or its officers, directors, members, managers, employees, contractors or representatives. Tenant’s obligations set forth in this Section 19.1(e) shall survive the expiration or earlier termination of this Lease.

(f)Supplemental HVAC. Tenant shall have the right to install independent supplemental air conditioning system(s) within the Leased Premises, which may require the installation of equipment (dry coolers, chillers, etc.) on the roof or otherwise upon the Building Premises and the connection of such equipment to the Leased Premises with appropriate conduits, pipes, wiring and cabling, subject to applicable law and Landlord's prior review and approval of detailed plans and specifications therefore. Landlord’s approval shall not be unreasonably withheld or delayed. Upon the expiration or earlier termination of this Lease, Tenant shall remove the independent supplemental air conditioning system and all equipment and appurtenances thereof if so directed by Landlord.

(g)Rooftop Installation. All rooftop installations shall be consistent with governmental codes and shall be installed in a manner so as not to impact any warranties in effect on the roof membrane. Tenant shall have the right to perform an infrared and structural inspection of the roof to insure its integrity.

Section 19.2Fiber Access.

Tenant shall have the right to bring fiber optic cable at the street level into the Building from three (3) separate and diverse points. Landlord will cooperate with Tenant, at Tenant’s sole cost and expense, to permit Tenant to expand fiber capacity as needed for its business during the Lease Term. Tenant will not incur any additional fees from the Landlord for fiber access. The fiber optic cable and other equipment installed pursuant to this Section 19.2 shall be characterized as “Telecommunications Equipment” and shall be subject to the requirements set forth in Section 19.1.

Section 19.3Co-Location.

Tenant shall have the right to allow customers ("Providing Parties") to install equipment ("Providing Parties' Equipment") which is related to Tenant's equipment in a secure area and/or on a rack within up to forty percent (40%) of the Leased Premises consistent with the permitted use by Tenant of the Leased Premises. Such co-location shall not be considered an assignment or sublease by Tenant, shall not grant any such Providing Parties any possessory interest in the Leased Premises, and, as between Landlord and Tenant, any right, and liabilities with respect to the Providing Parties or Providing Parties' Equipment shall be the sole responsibility of Tenant, including, without limitation, the movement thereof in and out of the Leased Premises and the insurance and security therefore, in the same manner and to the same extent as if the Providing Parties were Tenant and Providing Parties' Equipment belonged to Tenant. Tenant shall retain all profits that arise out of co-location within the Leased Premises. With respect to any Providing Parties or Providing Parties' Equipment, the following shall apply:

(a) Landlord's liabilities and obligations with respect to the Providing Parties and Providing Parties' Equipment shall only be those of Landlord to Tenant pursuant to and accordance with this Lease, and Landlord shall not have any liability or obligation, nor shall the Providing Parties have any rights or claims against Landlord, with respect to the locating, presence or removal of the Providing Parties or Providing Parties' Equipment in or with respect to the Leased Premises. Tenant shall indemnify, defend and hold harmless Landlord and its officers, directors, members, managers, and employees (the "Indemnified Party") from and against any and all injuries, costs, expenses, liabilities, losses, damages, injunctions, suits, actions, fines, penalties, and demands of any kind or nature (including reasonable attorneys' fees), including without limitation, claims of Providing Parties or other third parties relative to the co-location of Tenant's customers, except to the extent same is caused by the negligence or misconduct of the Indemnified Party.

(b)This section shall not create any additional rights of Tenant or Providing Parties, or liabilities of Landlord not expressly provided for in this Lease, under or with respect to Providing Parties or Providing Parties' Equipment.

(c)Any use of the Leased Premises or roof by the Providing Parties, or location of any Providing Parties’ equipment on the Leased Premises or roof, shall be subject to the same provisions, as to termination of possession, removal of property or otherwise, as apply to Tenant under and in accordance with the provisions of the Lease. All equipment placed upon the Leased Premises or roof by a third party customer shall remain the personal property of the third party customer, and Landlord shall have no liability to third party customers for, and Tenant shall indemnify, defend, and hold harmless Landlord and its officers, directors, members, managers, employees, contractors and representatives against, any and all injuries, costs, expenses, liabilities, losses, damages, injunctions, suits, actions, fines, penalties, and demands of any kind or nature (including reasonable attorneys' fees) arising from the presence of the Providing Parties’ Equipment in, on or about the Leased Premises or roof (except to the extent same is caused by the negligence or misconduct of the Indemnified Party), and if the Tenant's rights to possession have been terminated, Tenant shall cause the third party customer to remove the equipment within fifteen (15) business days of receipt of notice from Landlord, and repair any damage caused by said removal. Tenant shall in all events be responsible for the cost of such removal and any injury or damage to the Leased Premises sustained by reason thereof.

(d)Subject to the right of Tenant and the Providing Parties to have access to the Park 24 hours per day, seven days per week, the access rights of the Providing Parties shall be subject to reasonable security measures in place at the Building and/or the Park from time to time and all Providing Parties shall comply with the reasonable rules and regulations promulgated by Landlord, including, without limitation, any construction rules for the Building or the Park.

(e)All costs and expenses incurred in connection with the installation, maintenance and operation of Providing Parties' Equipment at the Leased Premises shall be borne by Tenant at no expense to Landlord.

The provisions of this Article 19 shall survive the expiration or earlier termination of this Lease.

Article 20Storage Space

During the 6-month period beginning on the Commencement Date (the “Storage Space Term”), Tenant shall have the right to use the space shown on Exhibit “A” (the “Storage Space”), which shall consist of at least 5,000 contiguous square feet, for the storage and staging of equipment at no cost to Tenant other than the payment of the utilities for such space. During the time the Storage Space is being used by Tenant, the Storage Space shall be considered part of the “Leased Premises”, and all provisions of this Lease (including, but not limited to, the insurance and indemnification provisions) shall apply to the Storage Space. Notwithstanding the previous sentence, the area of the Storage Space shall not be considered a part of the Leased Premises during the Storage Space Term for purposes of determining Tenant’s Share of Building Premises Expenses and Park Expenses. If Tenant desires to use the Storage Space for more than the Storage Space Term, Tenant shall have the right to use the Storage Space for up to an additional six (6) months (the “Extended Storage Space Term”). However, upon commencement of the Extended Storage Space Term,

(a)   Landlord shall have an ongoing right to relocate the Storage Space to other space in the Park upon thirty (30) days notice to Tenant;

(b)   Tenant shall pay Landlord Minimum Annual Rent on the Storage Space in an amount equal to Eight and 00/100 Dollars ($8.00) per square foot; and

(c)   the area of the Storage Space shall be considered a part of the Leased Premises for purposes of determining Tenant’s Share of Building Premises Expenses and Park Expenses.

Article 21[Reserved]

Article 22Miscellaneous

Section 22.1Benefit of Landlord and Tenant.

This Lease and all of the terms and provisions hereof shall inure to the benefit of and be binding upon Landlord and Tenant and their respective successors and assigns.

Section 22.2Governing Law.

This Lease shall be governed in accordance with the laws of the State of Michigan.

Section 22.3Force Majeure.

Landlord and Tenant shall be excused for the period of any delay in the performance of any obligation hereunder, excluding payments due Landlord from Tenant, when such delay is occasioned by causes beyond its control, including, but not limited to, war, invasion or hostility; work stoppages, boycotts, slowdowns or strikes; shortages of materials, equipment, labor or energy; man-made or natural casualties; unusual weather conditions; acts or omissions of governmental or political bodies; or civil disturbances or riots.

Section 22.4Condition of Premises.

Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty with respect to the Leased Premises, the Building Premises or the Common Areas or with respect to the suitability or condition of any part thereof for the conduct of Tenant's business except as provided in this Lease.

Section 22.5Examination of Lease.

Submission of this instrument for examination or signature to Tenant does not constitute a reservation of or option for Lease, and it is not effective as a Lease or otherwise until execution by and delivery to both Landlord and Tenant.

Section 22.6Indemnification for Leasing Commissions.

The parties hereby represent and warrant that the only real estate brokers involved in the negotiation and execution of this Lease are those named in the Basic Lease Provisions and that no other broker or person is entitled to any leasing commission or compensation as a result of the negotiation or execution of this Lease. Each party shall indemnify, defend, and hold harmless the other from any and all liability for the breach of this representation and warranty on its part and shall pay any compensation to any other broker or person who may be deemed or held to be entitled thereto. Landlord will not pay a broker commission to any broker representing Tenant for any extension of the Lease Term and/or expansion of the Leased Premises.

Section 22.7Quiet Enjoyment.

If Tenant shall perform all of the covenants and agreements herein provided to be performed by Tenant, Tenant shall, at all times during the Lease Term, have the quiet enjoyment and peaceful possession of the Leased Premises without hindrance from Landlord or any persons lawfully claiming under Landlord.

Section 22.8Severability of Invalid Provisions.

If any provision of this Lease shall be held to be invalid, void or unenforceable, the remaining provisions hereof shall not be affected or impaired, and such remaining provisions shall remain in full force and effect.

Section 22.9Representations and Warranties.

Tenant represents and warrants to Landlord that (i) Tenant is duly organized, validly existing and in good standing in accordance with the laws of the state under which it was organized; (ii) all action necessary to authorize the execution of this Lease has been taken by Tenant; and (iii) the individual executing and delivering this Lease on behalf of Tenant has been authorized to do so, and such execution and delivery shall bind Tenant. Tenant, at Landlord's request, shall provide Landlord with evidence of such authority.

Section 22.10Survival.

Unless otherwise stated, all obligations of Landlord and Tenant intended to survive the expiration or earlier termination of this Lease shall survive.

Section 22.11Financial Statements.

During the Lease Term and any extensions thereof, Tenant shall provide to Landlord on an annual basis, within ninety (90) days following the end of Tenant's fiscal year, a copy of Tenant's most recent financial statements prepared as of the end of Tenant's fiscal year. Such financial statements shall be signed by Tenant or any authorized officer or representative of Tenant who shall attest to the truth and accuracy of the information set forth in such statements. All financial statements provided by Tenant to Landlord hereunder shall be prepared in conformity with generally accepted accounting principles.

However, notwithstanding the foregoing, so long as Tenant is subject to the reporting requirements of the Securities Exchange Act of 1934 and has filed its reports required thereunder, Tenant shall be deemed to be in compliance with this Section 22.11, and shall not be required to deliver any financial statements to Landlord.

Section 22.12Preparation of Lease.

This Lease shall not be construed more strictly against one party than against the other, merely by virtue of the fact that it may have been prepared by counsel for one of the parties, it being recognized that both Landlord and Tenant have contributed substantially and materially to the preparation of this Lease.

Section 22.13Abandonment.

Tenant’s abandonment or vacation of the Leased Premises shall not be construed as a Default so long as Tenant continues to pay rent.

Section 22.14Security Systems.

Tenant shall have the right to install security systems to protect its technical areas. Except in the event of imminent danger to property or health, under no circumstance will Landlord or any of its representatives be granted permission to enter any technical areas without being accompanied by an authorized Tenant representative.

Section 22.15Construction Allowance.

Landlord shall pay Tenant Five Thousand and 00/100 Dollars ($5,000.00) as a construction allowance (the "Construction Allowance") on the date thirty (30) days after the later of (i) the date upon which Tenant completes the demolition of the interior partitioning in the Leased Premises or (ii) the date Tenant delivers to Landlord final mechanic's and materialmen's lien waivers for such demolition work and receipts evidencing that an amount equal to or greater than the amount of the Construction Allowance has been spent by Tenant for such demolition.

IN WITNESS WHEREOF, the parties hereto have executed this Lease the day and year first above written.

LANDLORD:TENANT   Southfield TechneCenter RE 1 LLC, a Michigan limited liability company   By:Southfield TechneCenter Manager Corporation, its Manager By:    /s/ Jeffrey L. Forman           Jeffrey L. Forman Its: Director of Asset Management Date:   2/24/03 TENANT   Talk America Inc., a Pennsylvania corporation     By: /s/Aloysius T. Lawn IV Printed: Aloysius T. Lawn IV Title: EVP - General Counsel Date: 2/19/03

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Exhibit “A”

Plan of Leased Premises

Exhibit “B”

Building and Park

Exhibit “C”

Rules and Regulations

1.The sidewalks, entrances, passages, vestibules, corridors or halls shall not be obstructed or used for any purpose other than ingress and egress.

2.No awnings or other projections shall be attached to the outside walls of the Building. All electric ceiling fixtures hung in offices or spaces along the perimeter of the Building must be fluorescent, of a quality, type, design and bulb color approved by Landlord. Neither the interior nor the exterior of any windows shall be coated or otherwise sun screened without the written consent of Landlord.

3.No sign, advertisement, notice or handbill shall be exhibited, distributed, painted or affixed by any tenant or any person acting with a tenant’s consent on, about or from any part of the Leased Premises or the Building without the prior written consent of Landlord. In the event of the violation of the foregoing by any tenant, Landlord may remove or stop same without any liability, and may charge the expense incurred in such removal or stopping to the tenant in addition to any remedies available under the Lease. Standard signs on doors and directory sign shall be inscribed, painted or affixed for each tenant by Landlord, and shall be of a size, color and style acceptable to Landlord.

4.The sashes, sash doors, windows, and doors that reflect or admit light and air into halls and passageways in the Building shall not be covered or obstructed by any tenant.

5.The water and wash closets and other plumbing fixtures shall not be used for any purpose other than those for which they were constructed, and no sweeping, rubbish, rags, or other substances shall be thrown therein. All damages resulting from any misuse of the fixtures shall be borne by the tenant who, or whose subtenants, assignees or any of their servants, employees, agents, visitors or licensees shall have caused the same.

6.No tenant shall mark, paint, drill into, or in any way deface any part of the Building. No boring, cutting or stringing of wires or laying of any type of floor covering or wall covering shall be permitted without first obtaining Landlord’s written permission. Such approval shall not be unreasonably withheld.

7.No birds or animals of any kind shall be brought into or kept in or about the Leased Premises, and no cooking shall be done or permitted by any tenant on the Leased Premises, except that the preparation of coffee, tea, hot chocolate and similar items for tenants and their employees shall be permitted provided power shall not exceed that amount which can be provided by a 20 amp circuit. No tenant shall cause or permit any objectionable odors to be produced in or permeate from the Leased Premises.

8.The Leased Premises shall not be used for manufacturing or for the storage of merchandise except as such storage and/or manufacturing may be incidental to the permitted use of the Leased Premises. No tenant shall occupy or permit any portion of the Leased Premises to be occupied as an office for the manufacture or sale of liquor, narcotics, or tobacco in any form, or as a medical office, or as a barber, or as an employment bureau, without the express written consent of Landlord. The Leased Premises shall not be used for lodging or sleeping or for any immoral, illegal or unsafe purpose.

9.No tenant shall make, or permit to be made any unseemly or disturbing noises or disturb or interfere with occupants of this or neighboring buildings or premises or those having business with them, whether by the use of any musical instrument, radio, phonograph, unusual noise, or in any other way.

10.No tenant, subtenant or assignee nor any of its servants, employees, agents, visitors or licensees, shall at any time bring or keep upon the Leased Premises any flammable, combustible or explosive fluid, chemical or substance.

11.No additional locks or bolts of any kind shall be placed upon any of the doors or windows by any tenant, nor shall any changes be made in existing locks or mechanism thereof. Each tenant must, upon the termination of his tenancy, restore to Landlord all keys of stores, offices, and toilet rooms, either furnished to, or otherwise procured by, such tenant and in the event of the loss of keys so furnished, such tenant shall pay to Landlord the cost of replacing the same or of changing the lock or locks opened by such lost key if Landlord shall deem it necessary to make such changes. Landlord shall reserve the right to make all keys for the Leased Premises at a cost of $5 per key, and Tenant shall not allow any other keys to the Leased Premises to be made by any other person.

12.Landlord reserves the right to exclude from the Building all safes, freight or other bulky articles which violate any of these Rules and Regulations or the lease of which these Rules are a part.

13.Landlord shall have the right to prohibit any advertising by any tenant which, in Landlord’s opinion tends to impair the reputation of the Building or its desirability as an office location, and upon written notice from Landlord any tenant shall refrain from or discontinue such advertising.

14.Each tenant shall be responsible for all persons entering the Leased Premises or the associated common areas at the tenant’s invitation, express or implied. Landlord shall in no case be liable for damages for any error with regard to the admission to or exclusion from Southfield TechneCenter of any person. In case of an invasion, mob riot, public excitement or other circumstances rendering such action advisable in Landlord’s opinion, Landlord reserves the right without any abatement of rent to require all persons to vacate the Leased Premises and associated common areas and to prevent access to the Park during the continuance of the same for the safety of the tenants and the protection of the Leased Premises, the building or associated common areas.

15.Any persons employed by any tenant to do janitorial work shall, while in and outside of the Leased Premises, be subject to and under the control of direction of Landlord (but not if an agent or servant of said superintendent or of Landlord), and tenant shall be responsible for all acts of such persons.

16.Canvassing, soliciting and peddling in Southfield TechneCenter are prohibited, and each tenant shall report and otherwise cooperate to prevent the same.

17.All office equipment of any electrical or mechanical nature shall be placed by a tenant in the Leased Premises in settings which will, to the maximum extent possible, absorb or prevent any vibration, noise and annoyance.

18.No air conditioning unit or similar apparatus shall be installed or used by any tenant without the written consent of Landlord.

19.The scheduling of tenant move-ins and move-outs shall be subject to the reasonable discretion of Landlord.

20.Landlord and its agents may retain a passkey to the Leased Premises and shall have the right to enter the Leased Premises at any and all times for the purpose of servicing, repairing and examining the same and for all other purposes provided in the Lease.

21.Landlord reserves the right to make such other and further Rules and Regulations as in its judgment may from time to time be needful and proper; and upon delivery of the same to a tenant, such rules shall become binding upon the parties hereto.

22.The Building is a non-smoking facility. Neither Tenant nor Tenant's employees, invitees, guests, agents, sublessees, or assigns may smoke within the Premises or the Building.

Exhibit “D”

Approved Alterations

None.

EX-21.1

           Exhibit 21.1

TALK AMERICA HOLDINGS, INC. SUBSIDIARIES

TALK AMERICA INC.

COMPCO, INC.

TALK AMERICA OF VIRGINIA, INC.

TSFL HOLDING CORPORATION

TC SERVICES HOLDING CO., INC.

ACCESS ONE COMMUNICATIONS CORP.

OMNICALL INC.

THE OTHER PHONE COMPANY

TALK AMERICA DHC, INC.

LDMI TELECOMMUNICATIONS, INC.

NETWORK TELEPHONE CORPORATION

NT CORPORATION