-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NOjz3BIR52znFU1Nx+rCBOEZ4FnTlGgcZia6QcU09ONOE64jtXEVq4hcM2PXXNWY Y+KMU9usaV0aVqhua3bcdA== 0000910680-95-000155.txt : 19951121 0000910680-95-000155.hdr.sgml : 19951121 ACCESSION NUMBER: 0000910680-95-000155 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 DATE AS OF CHANGE: 19951117 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MICROFRAME INC CENTRAL INDEX KEY: 0000754813 STANDARD INDUSTRIAL CLASSIFICATION: 3577 IRS NUMBER: 222413505 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-13117 FILM NUMBER: 95593560 BUSINESS ADDRESS: STREET 1: 21 MERIDIAN RD CITY: EDISON STATE: NJ ZIP: 08820 BUSINESS PHONE: 2014944440 MAIL ADDRESS: STREET 1: 21 MERIDIAN RD CITY: EDISON STATE: NJ ZIP: 08820 10QSB 1 U.S. Securities and Exchange Commission Washington, D.C. 20549 FORM 10-QSB ____ / X / Quarterly report under Section 13 or 15(d) of the Securities - - ---- Exchange Act of 1934 For the quarterly period ended September 30, 1995 or ___ /___/ Transition report under Section 13 or 15(d) of the Exchange Act For the transition period from __________ to __________ Commission file number 0-13117 MICROFRAME, INC. (Exact Name of Small Business Issuer as Specified in Its Charter) New Jersey 22-2413505 (State or Other Jurisdiction of (IRS Employer Identification No.) Incorporation or Organization) 21 Meridian Road, Edison, New Jersey 08820 (Address of Principal Executive Offices) (908) 494-4440 (Issuer's Telephone Number, Including Area Code) Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 ----- ----- There were 3,714,175 shares of Common Stock outstanding at November 14, 1995. Transitional Small Business Disclosure Format: Yes No X ----- ----- MICROFRAME, INC. FORM 10-QSB FOR THE QUARTER ENDED SEPTEMBER 30, 1995 PART I. FINANCIAL INFORMATION Page ITEM 1. Condensed Financial Information 2 Condensed Balance Sheets as of September 30, 1995 and March 31, 1995 (Unaudited) 3 Condensed Statements of Income for the three months ended September 30, 1995 and September 30, 1994; six months ended September 30, 1995 and September 30, 1994 (Unaudited) 4 Condensed Statements of Cash Flows for the six months ended September 30, 1995 and September 30, 1994 (Unaudited) 5 Notes to Condensed Financial Statements 7-8 ITEM 2. Management's Discussion and Analysis or Plan of Operation 9-10 PART II. OTHER INFORMATION ITEM 4. Submission of Matters to a Vote of Security-Holders ITEM 5. Other Information 11 ITEM 6. Exhibits and reports on Form 8-K 12 SIGNATURES 13 PART 1. Financial Information Item 1. Condensed Financial Information The condensed financial statements included herein have been prepared by the registrant without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Although the registrant believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the registrant's latest Annual Report on Form 10-KSB. -2- MicroFrame, Inc. Condensed Balance Sheets (unaudited)
September 30, March 31, 1995 1995 Assets ---- ---- Current Assets Cash and Cash equivalents $19,225 $490,261 Accounts receivable, less allowance for doubtful accounts of $75,091 and $75,000 respectively 1,300,834 1,912,304 Inventory 1,281,731 775,540 Deferred tax asset -- 400,000 Prepaid expenses and other current assets 106,337 24,325 --------- --------- Total current assets 2,708,127 3,602,430 Property and equipment at cost, net 473,830 317,585 Capitalized software, less accumulated amortization of $460,016 and $370,879 272,283 211,602 Security deposits 38,583 31,412 Excess of cost over fair value of net assets acquired less accumulated amortization of $380 and $0, respectively 90,760 0 Deferred tax asset 574,900 174,900 --------- -------- Total assets $ 4,158,483 $ 4,337,929 Liabilities and Stockholders' Equity Current liabilities Short-term borrowings $ 400,000 $ 0 Accounts payable 449,746 354,427 Accrued payroll and related liabilities 128,473 240,900 Deferred income 214,934 202,478 Other current liabilities 163,396 62,730 --------- --------- Total current liabilities 1,356,549 860,535 Stockholders' equity Common stock - par value $.001 per share authorized 50,000,000 shares, issued 3,714,575 shares and outstanding 3,714,175 shares at September 30, 1995; issued 3,687,198 shares and outstanding 3,686,798 shares at March 31, 1995 3,714 3,687 Preferred stock - par value $10 per share; authorized 200,000 shares, none issued -- -- Additional paid-in capital 4,851,672 4,769,406 Accumulated deficit (2,049,452) (1,291,699) --------- --------- 2,805,934 3,481,394 Less - Treasury stock, 400 shares, at cost (4,000) (4,000) --------- --------- Total stockholders' equity 2,801,934 3,477,394 Commitments and contingencies -- -- --------- --------- Total liabilities and stockholder' equity $ 4,158,483 $ 4,337,929 ========= =========
The accompanying notes are an integral part of these condensed financial statements -3- MicroFrame, Inc. Condensed Statements of Income (unaudited)
Six Months Ended Three Months Ended September 30, September 30, 1995 1994 1995 1994 Net Sales $2,606,940 $3,080,643 $ 742,598 $1,579,921 ---------- ---------- --------- ---------- Costs and Expenses Costs of Sales 1,165,874 1,320,793 425,027 709,692 Research and 294,050 201,202 165,385 107,990 development expenses Selling, general and 1,905,757 1,248,653 947,244 650,010 administrative expenses Amortization of excess of cost over fair value of net assets acquired 380 0 380 0 --------- --------- --------- --------- Total costs and 3,366,061 2,770,648 1,538,036 1,467,692 expenses Interest Income 3,062 3,676 244 1,825 Interest Expense (1,694) (1,694) -------- --------- --------- --------- Income (loss) before tax provision (757,753) 313,671 (796,888) 114,054 Income tax provision 0 125,500 (14,700) 45,500 --------- --------- --------- --------- Net Income (loss) $ (757,753) $ 188,171 $(782,188) $ 68,554 ========= ========= ========== ========= Per share Primary Net Income (loss) per share (0.21) 0.05 (0.21) $ 0.02 --------- --------- --------- --------- Shares used in computation 3,689,773 3,641,798 3,692,321 3,641,798 Full diluted Net Income (loss) per share (0.21) 0.05 (0.21) 0.02 -------- --------- -------- --------- Shares used in computation 3,689,773 3,964,998 3,692,321 3,964,998 --------- --------- --------- ---------
The accompanying notes are an integral part of these condensed financial statements -4- MicroFrame, Inc. Condensed Statements of Cash Flows (unaudited)
Six months ended September 30, 1995 1994 ---- ---- Cash flows from operating activities Net Income $ (757,753) $ 188,171 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 150,006 99,508 Deferred tax provision -- 125,500 (Increase) decrease in Accounts receivable, net 618,373 (208,573) Inventory (504,731) 244,217 Prepaid expenses and other current assets (35,017) 935 Security deposits (5,521) -- Increase (decrease) in Accounts payable 65,014 (286,512) Accrued payroll and related liabilities (116,867) (3,523) Deferred income 12,456 42,254 Other current liabilities 75,628 (39,422) --------- --------- Net cash provided by operating activities (498,412) 162,555 --------- --------- Cash flows from investing activities Capital expenditures (337,056) (12,949) Acquisition of European Business Associates (39,736) -- --------- --------- Net cash used in investing activities (376,792) (127,949) --------- --------- Cash flows from financing activities Short-term borrowings 400,000 -- Issuance of common stock 4,168 -- --------- --------- Net cash (used) provided by financing activities 404,168 0 --------- --------- Net (decrease) increase in cash and cash equivalents (471,036) 34,606 Cash and cash equivalents-beginning of period 490,261 505,317 --------- --------- Cash and cash equivalents-end of period $ 19,225 $ 539,923 ========== ==========
The accompanying notes are an integral part of these condensed financial statements -5- MICROFRAME, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS SEPTEMBER 30, 1995 (Unaudited) Note 1 - Condensed Financial Statements: The condensed balance sheets as of September 30, 1995 and March 31, 1995, the condensed statements of operations for the six month periods ended September 30, 1995 and 1994 and the condensed statements of cash flows for the six month periods then ended have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at September 30, 1995 and 1994 have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto as of March 31, 1995 and for the year then ended. Note 2 - Inventory: Inventory consists of the following:
September 30, 1995 March 31, 1995 Raw materials $ 560,884 $ 347,962 Work in process 479,696 286,667 Finished goods 241,151 140,911 ---------- ----------- Total $1,281,731 $ 775,540
-6- MICROFRAME, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS SEPTEMBER 30, 1995 (Unaudited) Note 3 - Stockholders Equity: During the six months ended September 30, 1995, stockholders equity changed for the following items: Net income/(loss) of $(757,753) Issuance of common stock of $82,293 Note 4 - Net Income Per Share: The computation of earnings per common and common equivalent share is based upon the weighted average number of common shares outstanding during the period plus (in periods in which they have a dilutive effect) the effect of common stock equivalents, comprised solely of stock options. Fully diluted earnings per share also reflect additional dilution related to stock options due to the use of the market price at the end of the period, when higher than the average price for the period. Note 5 - Acquisition of European Business Associates: On September 15, 1995, MicroFrame Europe N.V., a newly formed wholly-owned subsidiary, acquired all of the issued and outstanding shares of capital stock of European Business Associates BVBA of Brussels, Belgium, a marketing organization which specializes in creating and managing distribution networks and OEM relations for suppliers to the telecommunications industry. MicroFrame Europe N.V. will serve as the Company's European sales and distribution coordinator as well as provide technical support services for the Company's authorized European distributors. The acquisition was accounted for under the purchase method of accounting. The results of the operations of MicroFrame Europe N.V. are included with the Company's results of operations with effect from the date of acquisition. The Company issued cash and common stock valued at $128,125, assumed liabilities of -7- MICROFRAME, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS SEPTEMBER 30, 1995 (Unaudited) $59,783, and incurred $24,605 in additional costs related to the acquisition. Total consideration as allocated to the assets acquired was as follows: Current assets $ 90,226 Property and equipment 29,497 Other assets 1,650 Goodwill 91,140 -------- $212,153 ========
The portion of the purchase price allocated to goodwill will be amortized over a 10-year period beginning September 15, 1995. The following unaudited pro forma condensed statement of operations information has been prepared to give effect to the acquisition as if such transaction had occurred at the beginning of the periods presented. The information presented is not necessarily indicative of the results of future operations of the total Company.
6 Months Ended Sept 30, 1995 Sept 30, 1994 Net revenues $ 2,654,000 $ 3,160,000 Net income (loss) $ (787,000) $ 188,000 Pro forma earnings per share $ (.21) $ .05
-8- Item 2. Management's Discussion and Analysis or Plan of Operation Results of Operations Revenues for the quarter ended September 30, 1995 were $742,598 as compared with revenues of $1,579,921 for the same quarter of the previous fiscal year, or a decrease of approximately 53.0%. Approximately 90.0% of the revenue decrease was attributable to the following three factors. First, the Company's largest customer, MCI, decreased its sales of the Company's products from approximately $410,000 in the same quarter of the previous year to approximately $145,000 in the current quarter. This was a result of MCI's "capital spending freeze" instituted in June 1995, which took place in advance of a significant downsizing which was effected in August 1995. While this "freeze" was removed in September 1995, anticipated orders did not resume until mid-October 1995. Second, the Company's next largest customer, AT&T, found itself in an "overstocked" position regarding the Company's products, due to a temporary change in sales strategy. As a result, AT&T effected purchase orders for approximately $180,000, which was less than one-third of its normal volume, of approximately $600,000 for the same quarter in the previous year. Lastly, the Company's international sales decreased from approximately $125,000 to approximately $75,000 as a result of a slower rate of development of key international accounts than the Company had anticipated. The Company's cost of goods decreased from $709,692 during the same quarter of the previous fiscal year to $425,027 for the current fiscal quarter as a result of decreased shipment levels. Cost of goods as a percentage of sales increased from 44.9% for the same quarter of the previous fiscal year to 57.2% for this fiscal quarter, reflecting the overall decrease in shipments of product. Research and development costs increased from $107,990 in the quarter ended September 30, 1994 to $165,385 in the current fiscal quarter, reflecting increased development of a next generation set of products to be introduced in the fourth fiscal quarter. Selling, general and administrative expenses increased significantly from $650,010 for the same quarter of the previous fiscal year as compared with $947,244 for the current fiscal quarter, reflecting the Company's expansion of its sales and marketing function and upgrading its administrative support in anticipation of a sales growth which did not materialize. -9- The Company's operating profit before taxes dropped from $114,054 during the same quarter of the previous fiscal year to an operating loss of $796,888 for the current fiscal quarter, as a result of the factors described above. First Six Months of Fiscal 1996 Versus First Six Months of Fiscal 1995 Revenues for the six-month period ended September 30, 1995 were $2,606,940, as compared with revenues of $3,080,643 for the comparable period ended September 30, 1994, a decrease of 15.4%. The major factor attributable to this decrease was the significant drop off of products shipped to the Company's two largest customers as compared to the prior comparable fiscal period. The Company's cost of goods decreased from $1,320,793 for the period ended September 30, 1994 to $1,165,874 for the period ended September 30, 1995. Cost of goods as a percentage of sales increased from 42.9% for the 1994 period to 44.7% for the comparable 1995 fiscal period as a result of a lower volume of product shipments. Selling, general and administrative expenses increased from $1,248,653 for the 1994 period to $1,905,757 for the comparable 1995 fiscal period, reflecting a significant expansion of the sales, marketing and administrative function, in anticipation of continued rapid growth which was far slower than expected. Research and development costs increased from $201,202 for the period ended September 30, 1994 to $294,050 for the period ended September 30, 1995, an increase of 46.1%, reflecting a substantial emphasis on new product development for a next generation set of products to be initially delivered during the fourth fiscal quarter of this year. The Company's pretax operating profit dropped from $313,671 for the period ended September 30, 1994 to an operating loss of $757,753 for the period ended September 30, 1995. This decrease was due to the Company's slow sales growth and higher operating costs in anticipation of greater sales growth. Financial Condition and Capital Resources During the second quarter of fiscal year 1996, the Company's financial condition was negatively impacted. The Company's working capital position was reduced from $2,341,895 at March 31, 1995 to $1,351,578 at September 30, 1995. -11- The primary contributor to this reduction in the Company's working capital position was the Company's net loss of $782,188. The Company has signed a credit agreement with CoreStates Bank, NA ("CoresStates") which increases its credit line from $600,000 to $1,000,000 to finance future working capital requirements, secured by accounts receivable. In addition, the Company also has a $200,000 credit facility from CoreStates to finance purchases of machinery and equipment, convertible into a three-year secured term loan when utilized. The Company has $400,000 outstanding on its credit line and there have been no borrowings against the capital equipment credit facility. The Company has taken steps to significantly decrease expenditures through salary reductions, temporary furloughs and a reduction in discretionary expenses. As such, the Company believes that it will have sufficient capital to meet its financial requirements for the remainder of the fiscal year, as a result of these expense reductions and the availability of its credit facilities. -11- PART II. Other Information Item 4. Submission of Matters to a Vote of Security-Holders The Annual Meeting of Shareholders of the Company was held on September 18, 1995. At such meeting, the shareholders approved the following matters: Proposal 1. Election of the following individuals as directors of the Company for a term of one year, which constitutes the entire Board of Directors of the Company: Stephen M. Deixler, Lonnie L. Sciambi, David I. Gould, Michael Radomsky, William H. Whitney, Michehl R. Gent, Stephen P. Roma; Proposal 2. An amendment to the Company's 1994 Stock Option Plan which (i) provides for the annual award under the plan to non-employee directors of the Company of options to purchase up to 10,000 shares of Common Stock, and (ii) increases by 500,000, from 250,000 to 750,000, the number of shares of Common Stock for which options may be granted under the plan; and Proposal 3. Ratification of the Board of Directors' selection of Price Waterhouse LLP as the Company's independent accountants for the fiscal year ending March 31, 1996: Set forth below are the votes for, against and abstaining from each of the proposals listed above:
Abstentions Votes Votes and Broker Proposal For Withheld Against Non-Votes 1. Stephen M. Deixler 2,595,597 1,200 0 0 Lonnie L. Sciambi 2,595,597 1,200 0 0 David I. Gould 2,593,597 3,200 0 0 Michael Radomsky 2,595,597 3,200 0 0 William H. Whitney 2,593,597 1,200 0 0 Michehl R. Gent 2,595,597 1,200 0 0 Stephen P. Roma 2,594,197 2,600 0 0 2. Amendment to 1994 2,253,632 0 36,825 2,820 Stock Option Plan -12- 3. Price Waterhouse LLP 2,590,637 0 5,500 660 Item 5. Other Information On September 18, 1995, at the Board of Directors' meeting following the Annual Meeting of Shareholders, the Company's current officers were re-elected for a one year term commencing as of such date. On September 15, 1995, MicroFrame Europe N.V., a Belgium corporation and a newly-formed, wholly-owned subsidiary of the Company, purchased all of the issued and outstanding shares of capital stock of European Business Associates BVBA, ("EBA"), a Belgium corporation from Marc Kegelaers, its sole shareholder. EBA is a marketing organization engaged in the business of creating and managing distribution networks and original equipment manufacturer relations for suppliers to the telecommunications industry. MicroFrame Europe N.V. will serve as the Company's European sales and distribution coordinator and will provide technical support services for the Company's authorized European distributors. As payment in full for the stock so purchased, MicroFrame Europe N.V. paid at the closing $50,000 (US) and an aggregate of 25,000 shares of Common Stock of the Company to Marc Kegelaers. In addition, Mr. Kegelaers may earn additional sums of cash as well as stock of the Company based on the generation of certain revenues of MicroFrame Europe N.V. In connection with the stock purchase, MicroFrame Europe N.V. entered into a consulting agreement with Mr. Kegelaers, the former President of EBA, pursuant to which Mr. Kegelaers will render consulting services to MicroFrame Europe N.V. for a period of five years, for an annual consulting fee of $75,000 (US), to be increased on each anniversary date of the date of such agreement by five percent over the annual fee in effect for the immediately preceding year. The foregoing description is subject to the actual provisions of the Share Purchase Agreement by and between MicroFrame Europe N.V. and Marc Kegelaers and the Consulting Agreement by and between MicroFrame Europe N.V. and Marc Kegelaers, which are filed as Exhibits 10.30 and 10.31, respectively, and are incorporated herein by reference. -13- Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 10.27 Employment Agreement dated as of July 1, 1995 between the Company and Mark A. Simmons. 10.28 Lease Agreement dated as of July 20, 1995 between 46.25 Associates, L.P. and the Company for premises at the Middlesex (New Jersey) Business Center. 10.29 1994 Stock Option Plan (as amended on July 17, 1995). 10.30 Share Purchase Agreement (EBA) dated September 15, 1995 between Marc Kegelaers and MicroFrame Europe N.V. 10.31 Consulting Agreement dated as of September 15, 1995 between Marc Kegelaers and MicroFrame Europe N.V. 10.32 Termination Letter dated September 15, 1995 from European Business Associates BVBA to the Company. (b) Reports on Form 8-K During the quarter ended September 30, 1995, the Company did not file any reports on Form 8-K. -14- SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: November 14, 1995 MICROFRAME, INC. /s/Lonnie L. Sciambi Lonnie L. Sciambi, President and Chief Executive Officer /s/ Mark A. Simmons Mark A. Simmons, Chief Financial Officer (Principal Financial Officer) -15-
EX-10 2 EXHIBIT 10.27 EMPLOYMENT AGREEMENT AGREEMENT effective as of this 1st day of July 1995, by and between MICROFRAME, INC., a New Jersey corporation, having its principal office at 21 Meridian Road, Edison, New Jersey 08820 (the "Company"), and MARK A. SIMMONS, residing at 1027 Valley Forge Road #490, Devon, Pennsylvania 19333 ("Executive"). W I T N E S S E T H : WHEREAS, the Executive has been employed by the Company as its Vice President - Operations/Chief Financial Officer since January 23, 1995; and WHEREAS, the experience, ability and knowledge of the Executive have been and are valuable to the Company and as a result, the Company desires to continue to employ the Executive on a full-time basis as its Vice President - Operations/Chief Financial Officer pursuant to a formal agreement of employment; and WHEREAS, the Executive desires to be so employed by the Company in such capacity and further desires to enter into an agreement with the Company, the terms of which would govern his employment with the Company. NOW, THEREFORE, in consideration of such employment and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: 1. Employment: The Company hereby agrees to employ Executive and Executive hereby accepts employment with the Company upon the terms and conditions set forth below, subject to earlier termination as provided herein. Executive's employment under this Agreement shall be for an initial period of one (1) year, commencing on the date of this Agreement and it shall automatically be renewed for a two (2) year period thereafter, unless at least thirty (30) days prior to the termination of the initial one year term either party gives written notice to the other of its or his desire to terminate the Executive's employment as of the end of the one year term (the "Employment Period"). During the Employment Period, Executive will hold the position of Vice President - Operations/Chief Financial Officer of the Company and shall perform such functions as are normally carried out by the Vice President - Operations/Chief Financial Officer of a business of the type in which the Company is engaged, including but not limited to, responsibilities for finance, administration, purchasing and manufacturing, as well as such other functions, as the Board of Directors of the Company (the "Board") shall from time to time reasonably determine. Executive will devote his full-time, energies and abilities exclusively to the business of the Company to accomplish the duties assigned by the Board, will perform those duties to the best of Executive's ability and will devote Executive's best efforts to advance the interests of the Company. 2. Compensation and Benefits: As compensation for all services performed by Executive for the Company during the Employment Period, the Company agrees to pay Executive: (a) (i) An annual salary at the rate of eighty-five thousand ($85,000) dollars per annum ("Initial Salary") from the date of this Agreement through March 31, 1996, to be paid in equal installments, in accordance with the Company's customary payroll practice for its executives. (ii) Commencing April 1, 1996 and at the beginning of each subsequent fiscal year in which Executive is employed by the Company, Executive's Initial Salary, with respect to the 1997 fiscal year and thereafter, Executive's current salary in each subsequent fiscal year during the Employment Period, shall increase or decrease as set forth in paragraph 2(a)(v) based upon the Company's performance in the prior fiscal year measured against the Company's achievement of performance goals which had been set by the Board, in its sole discretion, for that year with respect to certain weighted performance criteria. (iii) The performance goals, performance cri- teria and the percentages used to weigh such criteria shall be determined by the Board no later than May 31st of the fiscal year in which performance is measured. The performance goals, and weighted performance criteria for the 1996 fiscal year are set forth on Schedule A attached hereto and made a part hereof, which shall be amended and updated each fiscal year in accordance with this subparagraph. (iv) The performance criteria to be consid- ered by the Board shall include, but are not limited to revenue, operating income, earnings per share and share price of the stock of the Company. (v) As set forth in paragraph 2(a)(ii), Executive's salary shall increase or decrease as follows: (A) Where performance of the Company shall fall below ninety (90%) percent of such year's performance goals, salary will decrease two and one-half (2.5%) percent for each one (1%) percent increment of performance below the ninety (90%) percent threshold, up to a maximum twenty-five (25%) percent reduction. (B) Where performance of the Company is greater than one hundred and ten (110%) percent of such year's performance goals, salary will increase two and one-half (2.5%) percent for each one (1%) -2- percent increment of performance above the one hundred and ten (110%) percent threshold, up to a maximum twenty-five (25%) percent increase. (b) (i) Concurrently herewith, pursuant to a stock option contract between the Company and the Executive, Executive is being granted a five (5) year incentive stock option, under and subject to the terms of the Company's 1994 Stock Option Plan, to purchase five thousand (5,000) shares of common stock, par value $.001 per share of the Company ("Common Stock"), at an exercise price equal to the fair market value of the Common Stock as of the date hereof, exercisable on and after January 23, 1997 (the "Option"). (ii) The shares of the Company's Common Stock which may be purchased by Executive pursuant to the Option granted under paragraph 2(b)(i) (the "Shares"), are to be held by Executive for his own account, for investment purposes only and not with a view to the resale or distribution thereof, and no sale, offer to sell or transfer of the Shares, or of any shares or other securities issued in exchange for or in respect of the Shares shall be made unless a registration statement under the Securities Act of 1933, as amended, (the "Act") with respect to the Shares is in effect, or an exemption from the registration requirements of the Act is then in fact applicable to the Shares. (c) Commencing with the date of this Agreement and during the Employment Period, Executive shall receive an automobile allowance of five hundred ($500) dollars per month. (d) Executive shall be entitled to fifteen (15) days of vacation each year during the Employment Period (prorated for any partial calendar year), to be taken at such time as is consistent with the needs of the Company. Any unused vacation time shall be treated in accordance with Company policy. (e) During the Employment Period, Executive shall be entitled, to the extent he qualifies, to participate in any retirement, incentive bonus, profit-sharing, medical, disability, health or life insurance and other similar benefit arrangements which may be or become available to executive officers of the Company, provided Executive shall be required to comply with and be entitled to benefits only in accordance with the terms and conditions of such plans. (f) The Company shall furnish the Executive with the office space, stenographic assistance and such other facilities and services as shall be suitable to the Executive's position adequate for the performance of his duties hereunder. -3- (g) The Company shall reimburse Executive for all reasonable expenses incurred by Executive in connection with the performance of his duties hereunder, provided that such expenses are incurred and accounted for in accordance with the reasonable policies and procedures established by the Company. 3. Death and Disability: (a) The Employment Period shall terminate on the date of Executive's death, in which event Executive's salary, if any, payable through the last day of the month in which his death occurs, shall be paid to Executive's estate. (b) If, during the Employment Period, Executive due to physical or mental illness or incapacity, shall be unable to substantially perform his duties and services under this Agreement for a period of six (6) consecutive months or nine (9) months in the aggregate during any twelve (12) month period ("Disability Period"), the Company may, at any time after the expiration of such Disability Period, by written notice to Executive, terminate Executive's employment as well as all benefits which he may be entitled to hereunder as of the date set forth in the notice. Executive shall be entitled to receive the salary he is receiving at that time, provided by paragraph 2(a) up to the end of the Disability Period (less payments from any disability insurance proceeds received by Executive with respect to the Disability Period). Disability under this paragraph shall be determined by a physician who shall be selected by the Company. 4. Discharge for Cause: The Company may terminate the Executive's employment hereunder for "Cause". For purposes of the Agreement, the Company shall have "Cause" to terminate the Executive employment hereunder upon (a) the willful and continued failure by the Executive to substantially perform his duties hereunder which amounts to a material neglect of his duties to the Company, (b) the willful engaging by the Executive in misconduct which is materially injurious to the Company, (c) the conviction of the Executive of a felony, (d) the failure of the Executive to comply with any material provision of this Agreement which has not been cured within thirty (30) days after written notice of such noncompliance has been given by the Company to the Executive, or (e) the failure to comply with material policies, procedures or directions of the Company established by its Board of Directors and consistent with the terms of this Agreement, which failure has not been cured within thirty (30) days after notice of such noncompliance has been given by the Company to the Executive. If, during the Employment Period, Executive is discharged for Cause, this Agreement shall terminate and the Company, without any limitation on any remedies it may have at law or equity, is without -4- liability for salary or any other liability to Executive after the date of such discharge and the Option granted to Executive under this Agreement shall cease and terminate immediately. 5. Nondisclosure; Noncompetition: (a) The Executive agrees not to use or disclose, either while in the Company's employ or at any time thereafter, except with the prior written consent of the Company, any trade secrets, proprietary information, or other information that the Company considers confidential relating to formulas, designs, processes, suppliers, machines, compositions, improvements, inventions, operations, manufacturing, processing, marketing, distributing, selling, cost and pricing data, master files or consumer lists utilized by the Company, or any confidential information (including but not limited to salary information) on the employees, and all other similar confidential information material to the conduct of the business, which is not presently generally known to the public and which is or was obtained or acquired by the Executive while in the employ of the Company; provided, however, that this provision shall not preclude the Executive from (i) the use of or disclosure of such information which presently is known generally to the public or which subsequently comes into the public domain, other than by way of disclosure on violation of this Agreement or in any other unauthorized fashion, or (ii) disclosure of such information required by law or court order, in which case the Executive will give the Company three (3) business days written notice (or, if disclosure is required to be made in less than three (3) business days, then such notice shall be given as promptly as practicable after determination that disclosure may be required) of the nature of the law or order requiring disclosure and the disclosure to be made in accordance therewith. (b) During the Employment Period of this Agreement and for a period of two (2) years thereafter, the Executive shall not, within the United States or Canada without the prior written consent of the Company directly or indirectly: (i) own, manage, operate, join, control, participate in, invest in, or otherwise be connected with, in any manner, whether as an officer, director, employee, partner, investor, consultant, lender or otherwise, any business entity which is engaged in, or is in any way related to, the business, or (ii) on the Executive's behalf or on behalf of anyone else engaged in such line of business (A) persuade or attempt to persuade any employee of the Company to leave the employ of the Company or to become employed by any person other than the Company, (B) persuade or attempt to persuade any current client or former client of the Company to cease doing business with, or to reduce the amount of business it does or intends or -5- anticipates doing with, the Company, or (C) solicit the business of any such clients or former clients with respect to the business of data securities. (c) Nothing herein contained shall be deemed to prohibit the Executive from investing in securities of a business entity if the securities of such entity are listed for trading on a national securities exchange or traded in the over-the-counter market and the Executive's holdings therein represent less than five (5%) percent of the total number of shares or principal amount of other securities of such entity outstanding. 6. Ownership of Inventions, Discoveries and Improve- ments: Executive shall promptly disclose in writing to the Board of Directors of the Company all inventions, discoveries, designs, developments, processes, software programs, works of authorship, formulas, data, techniques and any other improvements conceived, devised, created, or developed by Executive (either alone or with others) while in the employ of the Company (collectively, "Invention"), and Executive shall transfer and assign to the Company all right, title and interest in and to such Invention, including any and all domestic and foreign patent rights, domestic and foreign copyright rights therein, and any renewal thereof. Such disclosure is to be made promptly after the conception of each Invention, and each Invention is to become and remain the property of the Company, whether or not patent or copyright applications are filed thereon by the Company. On request of the Company, Executive shall execute from time to time, during or after the termination of employment, such further instruments including, without limitation, applications for patents and copyrights and assignments thereof as may be deemed necessary or desirable by the Company to effectuate the provisions of this paragraph 6. 7. Construction: If the provisions of paragraph 5 should be deemed unenforceable, invalid, or overbroad in whole or in part for any reason, then any court of competent jurisdiction or any Arbitrator appointed in accordance with paragraph 8 is hereby authorized, requested, and instructed to reform such paragraph to provide for the maximum competitive restraints upon Executive's activities (in time, product, geographic area, and customer solicitation as may then be legal and valid). 8. Remedies, Damages: (a) Executive agrees that violation of paragraphs 5 and 6 would cause irreparable injury to the Company for which the remedy at law would be inadequate, and that the Company shall be entitled in any court of law or equity or in any arbitration proceeding in accordance with this paragraph 8, whichever forum is designated by the Company, to preliminary, permanent or other injunctive relief against any breach of the provisions contained in paragraphs 5 and 6, and such punitive and compensatory damages as -6- shall be awarded. Further, in the event of a violation of the provisions of paragraph 5, the period of noncompetition referred to therein shall be extended, but not decreased for a period of time equal to the period that the violation occurred. (b) Except as otherwise provided in paragraphs 7 and 8(a) relating to the reformation of the restrictive covenants and obtaining equitable relief, any controversy or claim arising out of, or relating to this Agreement, or the breach thereof, shall be settled by arbitration by one arbitrator in New Jersey, in accordance with the rules of the American Arbi- tration Association, and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. 9. Severability: If any of the provisions of this Agreement are held to be invalid, illegal, or unenforceable, that determination will not affect the enforceability of any other provisions of this Agreement, and the remaining provisions of this Agreement will be valid and enforceable according to their terms. 10. Amendment; Applicable Law; Binding Effect; Suc- cessors and Assigns: This Agreement may be modified only in a writing signed by both parties, is governed by and construed in accordance with the laws of the State of New Jersey, without regard to the conflicts of law rules thereof, and will be binding upon and inure to the benefit of Executive and Executive's personal representatives and to the Company and the Company's successors and assigns. This Agreement is in the nature of a personal services contract, is not assignable by Executive and the duties imposed hereby are non-delegable. 11. Waiver: No waiver by either party hereto at any time of any breach by the other party hereto of, or in 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. No agreements or representations, oral or otherwise, expressed or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement. 12. 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. 13. Entire Agreement: This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements, promises, covenants, arrangements, communication, representations or warranties, whether oral or written, by any officer, employee or representative of any part hereto and any -7- prior agreement of the parties hereto in respect of the subject matter contained herein is hereby terminated and cancelled. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. MICROFRAME, INC. By: /s/ Lonnie L. Sciambi LONNIE L. SCIAMBI, President /s/ Mark A. Simmons MARK A. SIMMONS -8- SCHEDULE A 1996 Fiscal Year Performance Criteria Performance Goal Weight -------------------- ---------------- ------ Revenue $11,000,000.00 40% Operating Income $ 1,248,000.00 50% Price of Common Stock $ 3.75 10% Per Share ----- TOTAL 100% EX-10 3 EXHIBIT 10.28 THIS LEASE, made as of the 20th day of July, 1995, by and between 46.25 ASSOCIATES, L.P., a Delaware limited partnership having an office and P.0. Address at c/o National Realty & Development Corp., 3 Manhattanville Road, Purchase, New York 10577 (hereinafter referred to as "Landlord") and MICROFRAME, INC., a New Jersey corporation, having its principal office at 21 Meridian Road, Edison, New Jersey 08820 (hereinafter referred to as "Tenant"). W I T N E S S E T H: WHEREAS, the Landlord has constructed a multi-use building (hereinafter referred to as "Building") for the purposes of office use and processing operations for distribution in conjunction with the business being conducted in the office portions of the Building, commonly known as Building No. 300 located within the area designated as Lot No. 46.25 (hereinafter referred to as "Lot No. 46.25") on the attached plot plan (hereinafter referred to as "Plot Plan") which is annexed hereto as Exhibit "A" and made a part hereof; and WHEREAS, Landlord has constructed or may construct additional buildings on Lot Nos. 46.24 and 46.25; and WHEREAS, Tenant is desirous of leasing from Landlord and Landlord is desirous of leasing to Tenant certain premises in the MIDDLESEX BUSINESS CENTER (hereafter referred to as "Center") hereinafter described, upon and subject to the provisions, agreements, covenants and conditions set forth herein; NOW, THEREFORE, it is mutually agreed as follows: ARTICLE 1. DEMISED PREMISES AND TERM Section 1.01.(a) In consideration of the rents and additional rents hereinafter reserved and all of the provisions, agreements, covenants and conditions hereinafter contained, Landlord hereby leases and demises to Tenant, and Tenant hereby hires, leases and takes from Landlord approximately 5,112 square feet of floor space ("Floor Space") in the Building and the loading dock facilities appurtenant thereto ("Loading Dock"), more particularly indicated and described by cross-hatching on the Plot Plan (the Floor Space and Loading Dock being hereinafter collectively referred to as the "Demised Premises") located on Lot No. 46.25 in the Center located in the BOROUGH of SOUTH PLAINFIELD, COUNTY OF MIDDLESEX and STATE OF NEW JERSEY, together with all improvements to be constructed thereon by the Landlord for the use of the Tenant, and all easements, tenements and appurtenances thereto. Section 1.01.(b) The parties acknowledge that the Landlord intends to erect or has erected other buildings on Lot Nos. 46.24 and 46.25 (which may be different in design and construction from the Building) which buildings may be constructed at the sole option of Landlord. Landlord shall have sole control and discretion in connection with the scope, design and aesthetics of any such additional construction. Landlord shall perform any such additional construction in a manner so as to minimize interference with Tenant's use of the Demised Premises for the purposes set forth in Section 2.01 hereof, provided that in no event shall Landlord be required to use overtime or premium pay labor. If any such additional construction prevents Tenant from using the Demised Premises for the purposes set forth in Section 2.01 hereof for three (3) consecutive days, then all annual minimum rent and all additional rent payable pursuant to Section 7.03, Article 12 and Article 14 shall abate from 1 the day such additional construction prevented Tenant from using the Demised Premises for the purposes set forth in Section 2.01 hereof to the day on which such additional construction no longer prevents Tenant from using the Demised Premises for the purposes set forth in Section 2.01 hereof. Section 1.01.(c) The Demised Premises are demised and let subject to (i) the existing state of the title thereof; (ii) any state of facts which an accurate survey or physical inspection thereof might disclose; (iii) all zoning regulations, restrictions, rules and ordinances now in effect or hereafter adopted by any governmental authority having jurisdiction; and (iv) any utility, sewer or drainage easements or agreements and the installations made pursuant thereto now existing or hereafter granted or installed; all without representation or warranty by Landlord, except as expressly set forth herein. Landlord represents that to its knowledge, as of the date hereof, none of the foregoing will prohibit the use of the Demised Premises for the purposes set forth in Section 2.01 hereof. Section 1.02. As long as Tenant occupies the Demised Premises, Tenant, together with its employees, customers, invitees and business guests, shall have the right to use, in common with Landlord, its successors, assigns, tenants, subtenants, designees, concessionaires, licensees and any of their customers, invitees, and business guests, all of the Common Areas (as such term is defined in Section 12.01 hereof) at any time and from time to time existing within Lot Nos. 46.24 and 46.25, except for areas reserved for the exclusive use of other tenants, occupants, or designees and except for periods of time during which the Common Areas are being repaired, altered or reconstructed. Neither Landlord nor Tenant nor anyone holding under or through either of them shall make any charge for the use of the Common Areas to the other or to the customers, invitees or business guests of Landlord or Tenant or of anyone else hereinbefore granted the right to use the Common Areas, except as provided in Article 12 of this Lease. Section 1.03. The term ("Term") of this Lease shall be FOUR (4) years from and after the commencement date ("Commencement Date"), which date shall be: (a) the date upon which the Demised Premises are first occupied by Tenant and Tenant is actually conducting business in the Demised Premises, or (b) thirty (30) days following the date upon which Landlord's Work (as hereinafter defined) shall be duly certified by Landlord or Landlord's agent as being substantially complete, except for those items, the completion of which will not unreasonably or materially interfere with Tenant's use and occupancy of the Demised Premises as provided herein, whichever date shall first occur, and shall expire on the date which is the FOUR (4) year anniversary of the last day of the calendar month in which said Commencement Date shall occur ("Expiration Date"). Section 1.04. The parties shall, within ten (10) days following request of the other, execute a written document, in recordable form, expressing the Commencement Date and Expiration Date of the Term hereof, as such have been determined in accordance with the provisions of this Lease. Section 1.05. The term "Lease Year" is defined to mean twelve (12) consecutive calendar months; the first Lease Year to commence on the first day of the immediately succeeding calendar month following the Commencement Date and each succeeding Lease Year to commence on the anniversary date of the commencement of the first Lease Year. The portion of the Term prior to the first Lease Year shall be deemed a "Partial Lease Year" and any obligations of Tenant for such Partial Lease Year shall be prorated on a per diem basis. 2 ARTICLE 2. USE AND OPERATION Section 2.01. Subject to the other provisions of this Lease, Tenant shall occupy and use the Demised Premises solely for office purposes and purposes incidential thereto and processing operations for products for distribution in conjunction with the business being conducted in the office portion of the Demised Premises, and for no other use. Tenant hereby covenants and agrees that it, its successors and assigns, or anyone holding by, through or under them, shall not use, nor permit the use of the Demised Premises for any other use or purpose. Immediately following certification under Section 1.03 above, Tenant shall fixture, furnish and equip the Demised Premises for Tenant's intended business purpose and upon the Commencement Date, Tenant shall occupy and open for business in the Demised Premises. ARTICLE 3. RENT Section 3.01. The annual minimum rental during the Term shall be the sum of FORTY THOUSAND EIGHT HUNDRED NINETY SIX and 00/100 ($40,896.00) DOLLARS, which Tenant agrees to pay to Landlord in lawful money of the United States in equal monthly installments of THREE THOUSAND FOUR HUNDRED EIGHT and 00/100 ($3,408.00) DOLLARS each, in advance, on the first day of each calendar month during the Term hereof at the office of Landlord or such other place or to such other person or party as Landlord may designate, without prior demand therefor and without any setoff or deduction whatsoever, except as herein provided. Annual minimum rent and additional rent shall be prorated for a fraction of a month, if any, based on the number of days within such fractional month. Section 3.02. All taxes, charges, costs and expenses which Tenant assumes or agrees to pay under any provision of this Lease, together with any and all other sums which may become due, by reason of any default of Tenant or failure on Tenant's part to comply with the provisions, covenants and conditions of this Lease on Tenant's part to be performed, and each or any of them, shall be collectible and recoverable as additional rent, and, in the event of nonpayment thereof, Landlord shall have all the rights and remedies herein provided as in the case of nonpayment of annual minimum rent. ARTICLE 4. SUBORDINATION Section 4.01. This Lease and all rights of Tenant hereunder are, and shall be, subject and subordinate to any mortgages, deeds of trust (including blanket mortgages or deeds of trust covering the Demised Premises and/or the Center and/or other properties) or any other security interest which has been or which hereinafter may affect the Demised Premises, and to any ground or underlying leases of all or part of the Center, and to any renewals, modifications, consolidations, replacements and extensions thereof (hereinafter collectively referred to as "Landlord's Financing"). Upon request of Tenant, Landlord shall request a non-disturbance agreement in favor of Tenant from any of the foregoing parties; provided, Tenant understands that such granting of a non-disturbance agreement is in the sole discretion of any of such parties and Landlord shall not be deemed to be in default under this Lease in the event any such party shall refuse to grant a non-disturbance agreement to Tenant. Tenant acknowledges that the interest of Landlord under this Lease may be assigned by Landlord as collateral security to any of the foregoing parties holding interests to which this Lease is subject and subordinate. In the event of foreclosure of any such interest, or termination of any such ground or underlying lease, or in the event of an exercise of the power of sale under any mortgage or other security interest made by Landlord covering the premises of which the Demised Premises forms a part, Tenant shall recognize the rights of 3 any such party under and pursuant to the provisions of such collateral assignment and Tenant shall be deemed to have automatically attorned to and acknowledged the purchaser or purchasers upon any foreclosure or sale and recognized such purchaser or purchasers as the Landlord under this Lease. Section 4.02. The provisions of Section 4.01 shall be self-operative, but Tenant covenants and agrees that it shall, within fifteen (15) days following request, at any time or times, execute, acknowledge and deliver to Landlord any instruments in order to subordinate this Lease and Tenant's rights hereunder, as aforesaid, said instruments to be in the form reasonably required by any mortgagee, ground lessor or other secured party. Section 4.03. There is no Section 4.03 to this Lease. Section 4.04. Landlord and Tenant shall, at any time and from time to time, upon not less than fifteen (15) days prior notice from the other party hereto, execute, acknowledge and deliver to such other party a statement in writing certifying that this Lease is unmodified and in full force and effect (or, if there have been modifications, that the same is in full force and effect, as modified, and stating the modifications) and the dates to which the rent and other charges have been paid in advance, if any, and stating whether or not Landlord is in default in the performance of any provision, covenant or condition contained in this Lease, and if so, specifying each such default, and containing any other statements or certifications reasonably required by a mortgagee, and/or ground lessor and/or other secured party, it being intended that any statement or certification delivered pursuant to this Section may be relied upon by any party to whom it may be delivered by Landlord or Tenant, as the case may be. ARTICLE 5. AS IS Section 5.01. Tenant has examined the Demised Premises and has made a complete inspection of same and is familiar with the physical condition thereof. Landlord has not made and does not make any representation as to the physical condition or any other matter affecting or relating to the Demised Premises, except as is in this Lease specifically set forth, and Tenant specifically acknowledges that no such representation has been made. Tenant further acknowledges that Landlord has afforded Tenant the opportunity for a full and complete investigation, examination, and inspection of the Demised Premises and Tenant agrees to accept the Demised Premises "as is". Notwithstanding the foregoing, Landlord shall, at Landlord's cost and expense, perform the work set forth on Exhibit B annexed hereto and made a part hereof (such work is herein referred to as "Landlord's Work"). Section 5.02. Landlord or Landlord's contractor may give Tenant notice that Landlord's Work is substantially complete and that it is practicable for Tenant to enter the Demised Premises for the performance of work by Tenant necessary to occupy the Demised Premises and open for business, and if such notice shall be given, Tenant shall promptly thereafter commence all work that is necessary to open the Demised Premises for business. Subject to the foregoing provisions of this Section, Tenant shall have the right to install its fixtures and equipment during the period in which Landlord is performing Landlord's Work, provided Tenant does not interfere with the progress of Landlord's Work, and all work is performed by local union labor, and, further, provided, that insurance meeting the requirements of Section 7.02 is furnished, or caused by Tenant to be furnished, to Landlord prior to any such entry. Such entry into the Demised Premises by Tenant prior to the Commencement Date is and shall be at the Tenant's sole cost and risk, except for the negligence or willful misconduct of Landlord or its employees, agents or contractors, and the provisions of Section 7.01 and Section 7.02 shall be applicable during any such 4 period prior to the Commencement Date. All fixturing and/or other work to be performed by or on behalf of Tenant (other than Landlord's Work hereunder) shall be done in accordance with plans and specifications therefor submitted to and approved by Landlord prior to the commencement of such fixturing and/or other work, which approval shall not be unreasonably withheld or delayed, and in accordance with and subject to the provisions of Article 19 hereof. No changes (other than immaterial changes necessitated by field conditions) shall be made in said plans and specifications nor shall there be any deviation in the prosecution of the work in accordance with said plans and specifications without Landlord's prior written approval, which approval shall not be unreasonably withheld or delayed. Notwithstanding the prohibition against non- union labor set forth above, Tenant may use or employ non-union labor to perform the work to be performed by Tenant under this Lease; provided, however, if Tenant's use of non-union labor causes or results in a labor dispute delaying or interfering with the progress of any other construction within the Center or with the operation of the Center, Tenant shall within twenty-four (24) hours following notice from Landlord (which may be oral or written) cause each conflicting labor to leave the Demised Premises, and thereafter Tenant shall prosecute its work only with local union labor. Section 5.03. If Tenant claims that some or all of Landlord's Work has not been performed by Landlord upon delivery of notice of substantial completion of Landlord's Work, as provided herein, Tenant shall, within fifteen (15) days of said date (or fifteen (15) days following the date Tenant opens for the transaction of business, whichever date is sooner), submit to Landlord a written list of the work Tenant claims remains to be performed by Landlord, and Landlord shall have thirty (30) days thereafter to complete such work. If Landlord fails to complete such work within such thirty (30) day period, the sole remedy of Tenant shall be to complete such work and Tenant shall have the right to set off the cost thereof from the rent due Landlord in order to reimburse Tenant for the cost and expense of completion of the work. Upon written request of Landlord, Tenant will, within five (5) days following request (but not sooner than the expiration of the applicable fifteen (15) day period set forth in the first sentence of this Section), furnish to Landlord a written statement that Tenant is in occupancy of the Demised Premises, that Landlord's Work has been completed in accordance with Landlord's obligations or in lieu thereof, a list of the work Tenant claims to be incomplete. Section 5.04. Notwithstanding anything contained in this Lease to the contrary, Landlord will guaranty completion of Landlord's Work to provide for beneficial occupancy by the Tenant no later than August 15, 1995 provided that the Tenant has approved final floor plans and has furnished to Landlord carpet and paint selections and all other necessary information needed for Landlord to apply for a building permit (which permit shall be applied for no later than July 15, 1995). If possession of the Demised Premises (with Landlord's Work substantially completed) shall not be delivered to Tenant on or prior to such date, Tenant shall have the right to cancel this Lease upon ten (10) days notice to Landlord, unless possession of the Demised Premises (with Landlord's Work substantially completed) shall be delivered to Tenant prior to the expiration of such ten (10) day period. If Tenant shall not exercise such right of cancellation and Landlord's Work shall not be substantially completed (or deemed substantially completed) on or before August 15, 1995, then Tenant shall receive a credit against the payment of two (2) days of annual minimum rent accruing hereunder for each day following August 15, 1995 on which Landlord's Work shall not be substantially complete (or deemed substantially complete). Tenant's right to cancel this Lease and the credit against the payment of annual minimum rent accruing under this Lease, each as provided in this paragraph, shall be Tenant's sole remedies in the event Landlord's Work shall not be substantially complete (or deemed substantially complete) or prior to 5 the dates required in this Section 5.04. If the substantial completion of Landlord's Work is delayed by reason of: (i) any act or omission of Tenant or any of its employees, agents or contractors; or (ii) any failure (not due to any act or omission of Landlord or any of its employees, agents or contractors) to plan or execute Tenant's work necessary for Tenant's occupancy of the Demised Premises with reasonable speed and diligence, or (iii) any changes by Tenant in Landlord's Work or any changes or substitutions requested by Tenant; or (iv) Tenant's failure to furnish plans and specifications required to be furnished by Tenant, or subsequent changes thereto; or (v) Tenant's request for materials, finishes or installations other than Landlord's typical building standard; or (vi) the performance or incompletion of work by a party employed or retained by Tenant; then Landlord's Work shall be deemed substantially completed on the date when the same would have been substantially completed but for such delay and, in addition, Tenant shall pay to Landlord all reasonable costs and damages which Landlord may sustain by reason of such delay. Section 5.05. If there shall be a delay in the construction, repair or restoration of the Demised Premises or Center or any portion thereof caused by strikes, riots, acts of God, shortages of labor or materials, national emergency, governmental restrictions, laws or regulations, the act or failure to act of Tenant, including without limitation, delays in delivering construction criteria and plan approval, or for any other cause or causes beyond Landlord's control, at Landlord's option such delay shall not be a violation of this Lease, and the time periods set forth in this Lease for any such work shall, at Landlord's option, be extended for a period of time equal to the period of delay. Section 5.06. The Plot Plan shows the approximate location of existing buildings, buildings under construction, proposed buildings and certain areas reserved for related site improvements and future construction at the option of Landlord. Landlord shall have the right to develop the Center in the manner it sees fit and in the sole and absolute discretion of Landlord: to construct or not construct any buildings other than the Building, to change the nature or identity of the occupants of any such buildings, and to vary the floor areas, stories and heights, sizes, shapes and design of any such buildings and the divisions or portions thereof. Landlord shall exercise its rights under this Section 5.06 in a manner so as to minimize interference with Tenant's use of the Demised Premises for the purposes set forth in Section 2.01 hereof, provided that in no event shall Landlord be required to use overtime or premium pay labor. If Landlord's exercise of its rights under this Section 5.06 prevents Tenant from using the Demised Premises for the purposes set forth in Section 2.01 hereof or from having access to the Demised Premises, in either case, for three (3) consecutive days, then all annual minimum rent and all additional rent payable pursuant to Section 7.03, Article 12 and Article 14 shall abate from the day Landlord's exercise of such rights prevented Tenant from using the Demised Premises for the purposes set forth in Section 2.01 hereof or having access to the Demised Premises, as the case may be, to the day on which such exercise no longer prevents Tenant from using the Demised Premises for the purposes set forth in Section 2.01 hereof or having access to the Demised Premises, as the case may be. ARTICLE 6. ALTERATIONS AND REPAIRS Section 6.01. No structural (or electrical, plumbing or other building system) alterations or additions shall at any time be made by or at the instance of Tenant without Landlord's prior written consent, which consent shall not be unreasonably withheld or delayed. Tenant may make any non- structural non-electrical non-plumbing non-building system alteration upon 6 prior notice thereof to Tenant accompanied by plans or drawings showing the proposed work. All work, repairs, and/or alterations made by or at the instance of Tenant shall be done in a good and workmanlike manner, with first class new materials, in compliance with any applicable governmental rules and regulations, and subject to Article 19 hereof, and the cost thereof shall be paid by Tenant so that the Demised Premises shall at all times be free of liens for labor or materials supplied or claimed to have been supplied to the Demised Premises. Any alterations, installations, repairs, additions or improvements (inclusive of paneling and other wall coverings), except Tenant's trade fixtures, shall, at the option of Landlord, become the property of Landlord and shall remain upon and be surrendered with the Demised Premises, as part thereof, at the expiration or sooner termination of the term of this Lease. If Tenant is in default hereunder or is dispossessed, or vacates the premises, voluntarily or otherwise, and fails to remove any property, equipment and fixtures within ten (10) days following notice by Landlord, then and in that event, the said property, equipment and fixtures shall be deemed to be abandoned and Landlord may remove and dispose of such property and charge the cost and expense of removal and disposal to Tenant. Trade fixtures shall be defined as fixtures and equipment used by Tenant in the operation of its business, but not including any fixtures and equipment which are part of the operation of the Demised Premises or the Building. Section 6.02. Anything to the contrary contained herein notwithstanding, it is expressly understood and agreed that Tenant may install, connect and operate such machinery, fixtures and equipment as may be deemed necessary or desirable by the Tenant for its business, subject to compliance with applicable rules and regulations of governmental bodies and bureaus having jurisdiction thereover. Subject to the terms and conditions of this Lease, the machinery, fixtures and equipment belonging to Tenant shall, at all times, be considered and intended to be personal property of Tenant, and not part of the realty, and subject to removal by Tenant, provided, at the time of such removal, that Tenant is not in default pursuant to any of the terms, covenants, provisions or conditions of this Lease beyond any applicable notice and cure periods. Tenant, at its own cost and expense, shall pay for any damage to the Demised Premises or Building caused by the installation thereof or such removal, and this obligation shall survive the expiration or sooner termination of the term of this Lease. Section 6.03. Landlord shall, following reasonable notice from Tenant, promptly make all necessary repairs and replacements to (i) the exterior and structural portions of the Demised Premises, including the foundations thereof, and (ii) all utility and plumbing systems and other building wide systems serving the Demised Premises to the extent such serve premises other than the Demised Premises and are not maintained by any utility company or municipality, provided, however, in no event shall Landlord be required to make any repairs or replacements caused by any act, omission, or negligence of Tenant, any sub- tenant, or concessionaire, or their respective employees, agents, invitees, licensees or contractors. Tenant shall make all other repairs and replacements to the Demised Premises. Tenant shall maintain throughout the term of this Lease, including any extension term hereof, a protective service maintenance contract with a contractor approved by Landlord, which approval shall not be unreasonably withheld or delayed, providing for periodic maintenance of the H.V.A.C. system serving the Demised Premises, including without limitation periodic changing of any and all filters, changing of belts, lubricating of equipment and maintenance of operating levels of freon in accordance with manufacturers specifications. Said contract shall provide for maintenance inspection and service not less than three (3) times per year. A copy of any such maintenance contract shall be delivered to Landlord on a yearly basis. Tenant shall keep all glass clean and in good condition, and Tenant shall replace any glass which may be damaged or broken with glass of the same quality. Tenant shall keep the sidewalk, if any, adjacent to the Demised 7 Premises free and clear of trash, litter and rubbish. Section 6.04. Nothing contained in this Lease shall authorize Tenant to do any act which may create or be the foundation for any lien, mortgage or other encumbrance upon the reversion or other estate of Landlord, or of any interest of Landlord in the Demised Premises, or upon or in the Building or Center of which the same form a part; it being agreed that should Tenant cause any alterations, changes, additions, installations, improvements or repairs to be made to the Demised Premises, or cause materials to be furnished or labor to be performed therein or thereon, neither Landlord nor the Demised Premises shall, under any circumstances, be liable for the payment of any expense incurred or for the value of any work done or materials furnished to the Demised Premises or any part thereof. All such alterations, changes, additions, improvements, repairs, materials and labor shall be at Tenant's sole expense and T enant shall be solely and wholly responsible to contractors, subcontractors, laborers and materialmen furnishing labor and material to the Demised Premises or any part thereof. If, because of any act or omission of Tenant, any mechanic's or other lien or order for the payment of money shall be filed against the Demised Premises or the Building or improvements thereon or therein, or upon the Center, or against Landlord (whether or not such lien or order is valid or enforceable as such), Tenant shall, at Tenant's own cost and expense, within ten (10) days after notice of the filing thereof, cause the same to be canceled and discharged of record, or furnish Landlord with a surety bond issued by a surety company reasonably satisfactory to Landlord, protecting Landlord from any loss because of nonpayment of such lien or claim, and Tenant hereby indemnifies and saves harmless Landlord from and against any and all costs, expenses, claims, losses or damages, including reasonable counsel fees, resulting therefrom or by reason thereof. Section 6.05. Except for the repair obligations of Landlord under Section 6.03 above and the restoration obligations of Landlord under and as set forth in Articles 8 and 10 hereof and except as otherwise specifically provided in this Lease, the Tenant shall take good care of the Demised Premises and, at its cost and expense, keep and maintain in good repair the interior of the Demised Premises, including, but not limited to the air conditioning and heating plant, the plumbing pipes and fixtures belonging thereto; and shall repair or replace all mechanical and working parts used in connection with the air conditioning, electrical, heating and plumbing plants, fixtures and systems; and shall keep the water and sewer pipes and connections free from other obstructions; and shall generally maintain and repair the interior of the Demised Premises and shall, at the end or the expiration of the Term (or Extension Term, whichever is applicable), deliver up the Demised Premises in good order and condition, damages by the elements, ordinary wear and tear excepted. Tenant covenants and agrees that it shall not cause or permit any waste (other than reasonable wear and tear), damage or disfigurement to the Demised Premises, or any overloading of the floors of the Building. Section 6.06. At no time prior to or during the lease term shall Tenant cause any penetrations through the roof of the Demised Premises. Any proposed penetrations through the roof shall be made by Landlord's roofer or by a roofer qualified to Landlord. ARTICLE 7. INDEMNITY AND INSURANCE Section 7.01. Tenant hereby indemnifies and saves harmless Landlord from and against any claims and all loss, cost, liability, damage and/or expense, including, but not limited to reasonable counsel fees, penalties and fines, incurred in connection with or arising from (i) any default by Tenant in the observance or performance of any of the provisions, covenants or conditions of this Lease on Tenant's part to be observed or performed, (ii) the use or 8 occupancy or manner of use or occupancy of the Demised Premises by Tenant or any person claiming through or under Tenant, or (iii) any acts, omissions, or negligence of Tenant or any such person, or any contractor, agent, servant, employee, visitor or licensee of Tenant, or any such person, in or about the Demised Premises. If any action or proceeding shall be brought against Landlord based upon any such claim, Tenant, upon notice from Landlord, shall cause such action or proceeding to be defended, at Tenant's expense, by counsel acting for Tenant's insurance carriers in connection with such defense or by other counsel reasonably satisfactory to Landlord. The express indemnification obligation of Tenant pursuant to this Section 7.01 shall not apply to damage or injury which occurs as a result of a structural fault in the Demised Premises, or the failure of Landlord to perform its obligations with respect to the Common Areas, provided same are not the result of any act, omission or negligence or Tenant, or any contractor, agent, servant, employee, visitor or licensee of Tenant, provided, however, nothing contained in this sentence shall be deemed to relieve Tenant from its obligations under this Lease or for any joint responsibility or joint contribution obligations permitted at law or in equity. Section 7.02. Tenant shall, during the Term (including any extension term) and during any period prior to the commencement of the Term during which Tenant or anyone acting by or on behalf of Tenant enters the Demised Premises, at Tenant's own cost and expense, maintain and provide, or cause to be maintained and provided: (a) comprehensive general liability insurance for the benefit and protection of Landlord and Tenant (said policy to name Landlord, ground lessor, if any, and any other parties designated by Landlord, as additional insureds) in an amount not less than $1,000,000 for injuries or death to any one person, and not less than $2,000,000 for injuries or death to more than one person in any one accident or occurrence and for damage to property in an amount not less than $500,000 arising out of any one accident or occurrence; (b) worker's compensation insurance covering all persons employed in connection with Tenant's use and occupancy of the Demised Premises or any construction or alteration work therein; (c) insurance against loss or damage to Tenant's contents, including without limitation, trade fixtures and equipment, by fire, lightning, and other risks from time to time included under standard "extended coverage" policies, and vandalism and malicious mischief, in amounts sufficient to prevent Landlord and Tenant from becoming co-insurers of any loss under such policy, but in any event, not less than 100 percent of the full insurable value of such property; (d) boiler and pressure vessel insurance on all of Tenant's equipment, parts thereof and appurtenances attached or connected to the Demised Premises which by reason of their use or existence are capable of bursting, erupting, collapsing or exploding, in the minimum amount of Five Hundred Thousand ($500,000.00) Dollars for damage to property resulting from such perils; and (e) insurance covering such other risks as may be requested by Landlord occasioned by or attributable to the use or occupancy or manner of use or occupancy of the Demised Premises by Tenant, provided, any insurance required of Tenant pursuant to this clause (e) is also then being required by other landlords of space in the state of New Jersey similar to the Demised Premises (in terms of size and use). Said policies shall be issued by companies having a Best's Insurance Guide rating of "A" or better (and if such ratings shall no longer be available, then by companies reasonably satisfactory to Landlord), licensed to do business in the state in which the Demised Premises is located. Said policies or certificates thereof shall be delivered to Landlord at the commencement of the Term (or prior thereto in the event of earlier entry by Tenant upon the Demised Premises), together with proof of payment of premium therefor, and renewal policies or certificates therefor shall be delivered to Landlord not less than ten (10) days prior to the expiration dates thereof. Said policies and/or certificates shall contain an undertaking by the insurer to give Landlord not less than ten (10) days written notice of any cancellation or change in scope or amount of coverage of said policies. 9 Section 7.03. (a) Landlord shall, during the Term, maintain and provide general hazard insurance against loss or damage to the Building by fire, lightning, including "builder's risk endorsements" during the course of construction, other risks from time to time included under standard "Extended Coverage" policies, vandalism and malicious mischief, in amounts not less than 100 percent of the full replacement value of the Building and any other Building or portion thereof covered by such insurance and rent loss insurance covering all minimum and additional rental payable hereunder. Tenant shall pay its proportionate share of the cost of maintaining and providing such insurance, based upon the method of calculation set forth in Article 31 hereof. Section 7.03. (b) Such payment shall be made to Landlord in monthly installments on or before the first day of each calendar month, in advance, in an amount reasonably estimated by Landlord. Periodically, Landlord shall furnish Tenant with a written statement of the actual amount of Tenant's proportionate share of said insurance costs. If the total amount paid by Tenant under this section for any period during the Lease Term shall be less than the actual amount due from Tenant for such period, as shown on such statement, Tenant shall pay to Landlord the difference between the amount paid by Tenant and the actual amount due, such deficiency to be paid within thirty (30) days after demand therefor by Landlord; and if the total amount paid by Tenant hereunder for any such period shall exceed the actual amount due from Tenant for such period, the excess shall promptly be applied by Landlord to the next accruing monthly installments thereof or, at Landlord's option, to any other charges payable by Tenant. For the calendar years in which this Lease commences and terminates, the provisions of this section shall apply and Tenant's liability for its proportionate share thereof for such years shall be subject to a pro rata adjustment based on the number of days of said calendar years during the Lease Term. Prior to or at the commencement of the Lease Term and from time to time thereafter throughout the Lease Term, Landlord will notify Tenant in writing of Landlord's estimate of Tenant's monthly installments due hereunder. Tenant's obligations under this section shall survive the expiration of the Lease Term. Landlord shall provide Tenant copies of the bills evidencing the insurance costs paid by Tenant pursuant to this Section 7.03 upon Tenant's request therefor. ARTICLE 8. FIRE DAMAGE Section 8.01. If the Demised Premises shall be partially damaged by fire or other insured casualty, the damages shall be repaired by and at the expense of Landlord and the annual minimum rental and additional rent due under Section 7.03, Article 12 and Article 14 of this Lease until such repairs shall be made shall abate equitably according to the part of the Demised Premises which is unusable by Tenant or, if by reason thereof, the Demised Premises are rendered untenantable, said rental and additional rent due under Section 7.03, Article 12 and Article 14 of this Lease shall totally abate until such repairs shall be made. Notwithstanding the foregoing, if the Demised Premises or the Building shall be damaged to such extent that Landlord shall decide to demolish same, or not to rebuild same, then, and in such event, Landlord may terminate this Lease upon notice to Tenant given within ninety (90) days following such event, and upon the date specified in such notice, which date shall not be less than thirty (30) days nor more than sixty (60) days following the giving of said notice, this Lease shall terminate and Tenant shall vacate and surrender the Demised Premises to Landlord. Any annual minimum rental prepaid by Tenant beyond said date (after accounting for any abatement of rent to which Tenant is entitled pursuant to this Section 8.01) shall be promptly refunded to Tenant. Notwithstanding any of the foregoing provisions of this Article, if Landlord or the holder of any superior mortgage shall be unable to collect all of the insurance proceeds (including rent insurance proceeds) applicable to damage or destruction of the Demised Premises 10 or the Building by fire or other cause, by reason of some action or inaction on the part of the Tenant or any of its employees, agents or contractors, then, without prejudice to any other remedies which may be available against Tenant, the abatement of Tenant's rents provided for in this Article shall not be effective to the extent of the uncollected insurance proceeds. Section 8.02. If this Lease shall not be terminated as provided above in this Article, Landlord shall, at its expense, proceed with the restoration of the Demised Premises, provided, Landlord's obligations hereunder shall not exceed the scope of the initial building standard construction of the Demised Premises and further provided, that Landlord's restoration obligations shall be subject to building and zoning laws then in effect. In the event Landlord shall not substantially complete the restoration of the Demised Premises within nine (9) months following the date of destruction, Tenant shall have the right to terminate this Lease by notice received by Landlord prior to the date upon which Landlord shall substantially complete the restoration of the Demised Premises. No penalty shall accrue for reasonable delay which may arise by reason of adjustment of insurance on the part of Landlord. If Landlord shall so restore the Demised Premises, Tenant shall repair, restore and redecorate the Demised Premises and reoccupy and reopen the Demised Premises, within forty-five (45) days following notice of restoration, in a manner and to substantially the condition existing prior to the event of damage, except to the extent that Landlord is obligated above, and Tenant shall hold in trust the proceeds of all insurance carried by Tenant on its property for the purpose of such repair and restoration. Section 8.03. Nothing hereinabove contained with respect to the Tenant's right to abate the rent under proper conditions shall be construed to limit or effect the Landlord's right to payment under the rental loss coverage to be provided pursuant to Section 7.03 hereof. ARTICLE 9. WAIVER OF SUBROGATION Section 9.01. Landlord, its officers, agents, employees, subsidiaries and affiliated entities and corporations shall not be liable for any damage to or destruction of any of Tenant's goods, merchandise, fixtures, furniture or property of whatsoever nature, caused by fire or any other cause whatsoever, except the negligence of any such parties, and Tenant hereby releases and waives any right of recovery against Landlord, its officers, agents, employees, subsidiaries and affiliated entities and corporations for any such loss. Tenant shall procure a waiver of subrogation on the part of the insurer against such parties by an endorsement to all insurance policies whereby the insurer recognizes the provisions of this Section 9.01; provided that if such waiver of subrogation requires the payment of additional premiums, such waiver does not have to be procured unless the party requiring the waiver is willing to pay for such additional premiums. Section 9.02. Tenant, its officers, agents, employees, subsidiaries and affiliated entities and corporations shall not be liable for any damage to or destruction of any of Landlord's goods, merchandise, fixtures, furniture or property of whatsoever nature, caused by fire or any other cause whatsoever, except the negligence of any such parties, and Landlord hereby releases and waives any right of recovery against Tenant, its officers, agents, employees, subsidiaries and affiliated entities and corporations for any such loss. Landlord shall procure a waiver of subrogation on the part of the insurer against such parties by an endorsement to all insurance policies whereby the insurer recognizes the provisions of this Section 9.02; provided that if such waiver of subrogation requires the payment of additional premiums, such waiver does not have to be procured unless the party requiring the waiver is willing to pay for such additional premiums. 11 ARTICLE 10. CONDEMNATION Section 10.01. If the whole of the Demised Premises shall be taken by any governmental authority under the power of condemnation, eminent domain, or expropriation, or in the event of a conveyance in lieu thereof, the Term of this Lease shall cease as of the day possession shall be taken by such governmental authority. If more than 25 percent of the Demised Premises shall be so taken or conveyed, either Landlord or Tenant shall have the right to terminate this Lease upon notice to the other party, effective as of the day possession shall be taken by such governmental authority. If this Lease is so terminated, annual minimum rental shall be prorated as of the date that possession must be surrendered to the condemning authority. Section 10.02. If this Lease continues after a partial taking, the annual minimum rental shall abate equitably as to the part of the Demised Premises which is taken. If this Lease continues after any such taking or conveyance, Landlord shall make all necessary repairs and restorations so as to restore the remainder of the Demised Premises to a complete architectural unit. Landlord's reconstruction obligations shall not exceed the amount of the award or compensation for the taking, shall not exceed the scope of the initial building standard construction of the Demised Premises, and shall be subject to building and zoning laws then in effect. Section 10.03. If so much of the Center, Common Areas or Building shall be so taken or conveyed so that in the reasonable exercise of Landlord's judgment, the continued operation of the Building for use by its tenants is unfeasible, then, in such event, and provided that all other leases for space in the Building are terminated to the extent Landlord may terminate the same pursuant to the terms of such other leases, Landlord may, by notice to Tenant, delivered not later than thirty (30) days following the date that possession of the premises taken or conveyed is delivered to the governmental authority, terminate this Lease, and rent shall be pro rated as of the date that possession must be surrendered to the condemning authority. Section 10.04. Tenant and not Landlord shall be entitled to any portion of the award made to Tenant for the value of Tenant's removable trade fixtures and equipment other than equipment necessary for the operation of the Building. All compensation awarded for the taking of the Building, the fee and the leasehold shall belong to and be the property of Landlord, and Tenant shall not be entitled to and hereby waives any damages for the unexpired portion of the Term of this Lease, or injury to its leasehold interest. ARTICLE 11. ASSIGNMENT AND SUBLETTING Section 11.01. Tenant, for itself, its heirs, distributees, executors, administrators, legal representatives, successors and assigns, as the case may be, expressly covenants that it shall not assign, mortgage or encumber this agreement, nor sublet or underlet nor suffer or permit the Demised Premises or any part thereof to be used by others without the prior written consent of Landlord in each instance. If, with consent of Landlord, this Lease may be assigned, or the Demised Premises or any part thereof be underlet or occupied by anybody other than Tenant, Landlord may collect rent from the assignee, undertenant or occupant and apply the amount collected to the rent herein reserved, but no such assignment, underletting, occupancy or collecting shall be deemed to relieve Tenant or any guarantor of this Lease or guarantor of the obligations of Tenant hereunder of any of its or their obligations hereunder nor be deemed a waiver of this covenant, or the acceptance of the assignee, undertenant or occupant as tenant, or a release of Tenant or any guarantor of this Lease or any guarantor of the obligations of Tenant hereunder from its or 12 their obligations under the covenants, provisions and conditions hereof; it being understood and agreed that Tenant and any guarantor of this Lease or any guarantor of the obligations of Tenant hereunder shall remain obligated as primary obligors under this Lease. The consent by Landlord to an assignment or underletting shall not in any wise be construed to relieve Tenant or any other Tenant, assignee, undertenant, or occupant of the Demised Premises from obtaining the express consent in writing of Landlord to any further assignment or underletting, and no such assignment or subletting shall be made to anyone who shall occupy the Demised Premises for any use other than as permitted by Section 2.01 or which would in any way violate the applicable ordinances, rules and regulations of applicable governmental boards or bureaus having or claiming jurisdiction thereof, or of the carrier of the fire insurance to be provided under this Lease. Notwithstanding anything to the contrary in this Lease, Landlord's consent shall not be required for any of the following permitted transfers (each a "Permitted Transfer"): (a) the assignment of this Lease or the subletting of the Demised Premises to any parent corporation wholly-owning Tenant or any wholly-owned subsidiary of Tenant or Tenant's parent corporation; (b) the assignment of this Lease or the subletting of the Demised Premises to (i) any entity fifty (50%) percent or more of which is owned by Tenant, (ii) any entity which owns fifty (50%) percent or more of Tenant, or (iii) any entity fifty (50%) percent or more of which is under common ownership with Tenant; (c) the assignment of this Lease to a corporation or other entity acquiring all or substantially all of the Tenant's assets; or (d) the transfer of this Lease to any successor of Tenant by consolidation, merger or other corporate action. Section 11.02. Supplementing the provisions of Section 11.01 of this Lease, provided Tenant is not in default under any of the terms, covenants, conditions and provisions of this Lease, Landlord shall not unreasonably withhold or delay its consent to any proposed assignment of this Lease or subletting of the entire Demised Premises. Any assignment or transfer of this Lease and any subletting of all or a portion of the Demised Premises shall (i) except as to a Permitted Transfer, be subject to Landlord's prior written consent and (ii) be made only if, and shall not be effective until, the assignee or subtenant shall execute, acknowledge and deliver to Landlord a recordable agreement, in form and substance reasonably satisfactory to Landlord and counsel for Landlord, whereby the assignee or subtenant shall assume for the benefit of Landlord the obligations and performance of this Lease and agree to be personally bound by and upon all of the covenants, agreements, terms, provisions and conditions hereof on the part of Tenant to be performed or observed, and whereby Tenant (and any guarantor of this Lease or of the Tenant's obligations hereunder) covenants and agrees to remain liable as a primary obligor for the due performance of all of the covenants, agreements, terms, provisions and conditions of this Lease on the part of Tenant to be performed or observed. In the event of any assignment of this Lease or any subletting of all or any portion of the Demised Premises, the obligations of Tenant and any guarantor of this Lease or any guarantor of the obligations of Tenant under this Lease as a primary obligor shall be unaffected and shall remain in full force and effect. Section 11.03. Notwithstanding anything heretofore contained, in the event that Tenant desires to assign this Lease or sublet all or a portion of the Demised Premises, Tenant shall first notify Landlord in writing of its intention, and such notice shall state the name of the proposed assignee or subtenant, together with its full address and a description of its proposed use (but nothing contained herein shall permit, nor obligate Landlord to permit, a use other than the use permitted by Section 2.01 of this Lease, it being understood that any change in use shall be subject to Landlord's consent, which Tenant agrees may, notwithstanding anything contained herein to the contrary, be unreasonably withheld). Tenant shall include therewith such financial information as may be available concerning the proposed assignee or subtenant, 13 including without limitation current updated financial statements (which financial information Tenant, and/or the proposed assignee or subtenant shall supplement on demand if reasonably required by Landlord). In addition, Tenant shall simultaneously tender a duplicate original of the instrument of assignment or sublease reasonably satisfactory to counsel for Landlord. Section 11.04. Except in the case of a Permitted Transfer, Tenant hereby covenants and agrees to tender to Landlord upon receipt fifty (50%) percent of any annual minimum rent or additional rent or lump sum or installment payment or sum which Tenant shall receive from or on behalf of any assignee(s) or subtenant(s) or any occupant by, through or under Tenant, which is in excess of the annual minimum rent or additional rent payable by Tenant in accordance with the provisions of this Lease (or in the event of a subletting of less than the whole of the Demised Premises, the annual minimum rent or additional rent allocable to that portion of the Demised Premises affected by such sublease). At the time of submission of the proposed assignment or sublease to Landlord, Tenant shall certify to Landlord in writing whether or not the assignee or subtenant has agreed to pay any such monies to Tenant or any designee of Tenant other than as specified and set forth in such instruments, and if so Tenant shall certify the amounts and time of payment thereof in reasonable detail. ARTICLE 12. COMMON AREA MAINTENANCE Section 12.01. As used in this lease, the term "Common Area Operating Costs" shall include the total cost and expense incurred by Landlord in operating, lighting, striping, maintaining, cleaning, landscaping, repairing (including replacement and resurfacing) managing, signing, equipping and insuring the Common Areas within Lot Nos. 46.24 and 46.25 plus ten (10%) percent of the foregoing costs to cover Landlord's administrative and overhead costs. Such costs and expenses shall include, without limitation: cleaning; fire and police protection and general security (Landlord not incurring or assuming any obligation to provide such protection or security or any liability for the failure of the same); repairing and replacing paving; keeping the Common Areas supervised, drained, reasonably free of snow, ice, rubbish and other obstructions, and in a neat, clean, orderly and sanitary condition; the charges for rubbish containers and removal (except that at Landlord's option, Tenant shall be directly responsible for contracting for and for providing (subject to Landlord's approval of the provisions and conditions of the agreement therefor, such approval not to be unreasonably withheld or delayed) rubbish containers and removal); the maintenance of any and all fire protection systems servicing Lot Nos. 46.24 and 46.25; the cost of public liability insurance; keeping the Common Areas suitably lighted; maintaining signs (other than Tenant's signs), markers, painted lines delineating parking spaces, and o t her means and methods of pedestrian and vehicular traffic control; constructing, maintaining and repairing of onsite and offsite traffic controls; maintaining adequate roadways, entrances and exits; maintaining any plantings and landscaped areas; Lot Nos. 46.24 and 46.25 management fees incurred by Landlord, including management fees payable to parties or entities owned or controlled by Landlord or any of them; maintenance and repair of all utilities, utility conduits and storm drainage systems situated within or servicing Lot Nos. 46.24 and 46.25; fees for required licenses and permits; and depreciation of machinery and equipment used in the operation and maintenance of the Common Areas (to the extent the cost thereof is amortized with respect to the year in question) and personal property taxes and other charges incurred in connection with such equipment. Notwithstanding anything to the contrary contained in this Lease, Common Area Operating Costs shall expressly exclude: (a) the cost of any repairs made by Landlord because of the occurrence of any casualty for which Landlord is actually reimbursed by insurance or otherwise compensated, including direct reimbursement by any tenant or occupant of the 14 Center; (b) costs associated with any expansion of the buildings or other permanent improvements comprising the Center provided the same are deemed to be capital costs by generally accepted accounting principles; (c) the cost of providing or performing renovations, improvements, maintenance or repairs to or within any premises leased to any other tenant or occupant of the Center (excluding any pipes, conduits, etc., located in any such premises which serve premises in addition to such premises); (d) leasing commissions, advertising expenses, architectural and engineering fees and other costs incurred in connection with the leasing premises within the Center including costs incurred in relocating or moving tenants; (e) legal fees and costs incurred in enforcing leases of other tenants in the Center; (f) costs, fines or penalties incurred due to willful violations by Landlord (and not caused or otherwise reimbursable by Tenant) of any governmental rules or authority; (g) principal and interest payable with respect to any financing for the Center other than financing in connection with the purchase of equipment used in the operations, repair and maintenance of the Common Areas; (h) costs and fines assessed against Landlord for its violation of any leases with other tenants in the Center; (i) rental attributed to any ground or underlying lease of the Center; and (j) costs incurred for the removal or remediation of hazardous materials and the costs incurred for compliance with all applicable laws relating to hazardous materials. The term "Common Areas" shall be defined as all paved areas, driveways, truckways, walkways, and landscaped and planted areas within Lot Nos. 46.24 and 46.25. Landlord shall maintain, light, clean and repair (including snow removal) the Common Areas so that such Common Areas may be used for their intended purposes, and in order to enable Landlord to perform its obligations as aforesaid, Landlord may incur such Common Area Operating Costs as Landlord, in its sole discretion, may determine. Landlord shall not include in one item of Common Area Operating Costs costs included as another item of Common Area Operating Costs. Section 12.02. During the initial term of this Lease and during any extension term hereof, Tenant shall pay Landlord Tenant's proportionate share of Common Area Operating Costs incurred or expended by Landlord as aforesaid. Such payment shall be made to Landlord in monthly installments on or before the first day of each calendar month, in advance, in an amount estimated by Landlord. Following the expiration of each calendar year during the Lease Term hereof, Landlord shall furnish Tenant with a written statement of the actual amount of Tenant's proportionate share of the Common Area Operating Costs for such year. If the total amount paid by Tenant under this section for any calendar year during the Lease term shall be less than the actual amount due from Tenant for such year, as shown on such statement, Tenant shall pay to Landlord the difference between the amount paid by Tenant and the actual amount due, such deficiency to be paid within thirty (30) days after demand therefor by Landlord; and if the total amount paid by Tenant hereunder for any such calendar year shall exceed such actual amount due from Tenant for such calendar year, such excess shall promptly be applied by Landlord to the next accruing monthly installments of Tenant's proportionate share of Common Area Operating Costs or, at Landlord's option, to any other charges payable by Tenant. For the calendar years in which this Lease commences and terminates, the provisions of this section shall apply, and Tenant's liability for its proportionate share of any Common Area Operating Costs for such years shall be subject to a pro rata adjustment based on the number of days of said calendar years during the Lease term. Prior to or at the commencement of the Lease term and from time to time thereafter throughout the Lease term, Landlord will notify Tenant in writing of Landlord's reasonable estimate of Tenant's monthly installments due hereunder. Tenant's obligations under this section shall survive the expiration of the Lease term. Tenant's proportionate share of Common Area Operating Costs shall be a fraction, having as its numerator, the number of square feet of floor area within the Demised Premises and as its denominator, the total number of square feet of floor area of all buildings within Lot Nos. 46.24 and 46.25 or, at Landlord's option, provided there shall 15 be a reasonable basis therefor, the portion thereof affected by such cost, including the Demised Premises. Notwithstanding the foregoing provisions of this Article, in the event the obligations of Tenant under this Article 12 are specifically identifiable separate charges relating to Tenant and/or the Demised Premises, then, and in such event, the obligations of Tenant under this Article 12 may, at Landlord's option, be measured and payable in accordance with such separate and specifically identifiable charge and not by the provisions of the preceding sentence. Tenant shall have the right, upon ten (10) days advance, written notice by Tenant to Landlord, during regular business hours at Landlord's office to audit, inspect and copy the books and records of Landlord for the calendar year in which such audit, inspection or copying is made and/or the calendar year immediately prior thereto with respect to any costs or item which is passed through to Tenant as Common Area Operating Costs. Tenant shall keep any information discovered in the course of any such audit, inspection and copying confidential except as may be necessary in order for Tenant to enforce its rights under this Lease or as may be required by law. Section 12.03. Tenant, its concessionaires, officers, employees, and agents may use the Common Areas, subject to such reasonable, non-discriminatory rules and regulations as Landlord may from time to time impose, including the designation of specific areas in which vehicles owned or operated by Tenant, its concessionaires, officers, employees and agents must be parked. Tenant shall abide by such rules and regulations and cause its concessionaires, officers, employees, agents, customers and invitees to conform thereto. Landlord may, at any time, close temporarily any Common Areas to make repairs or changes therein or to effect construction repairs or changes within Lot Nos. 46.24 and 46.25, and Landlord may do such other acts in and to the Common Areas as in its reasonable judgment may be desirable to improve the convenience thereof. Landlord shall perform such other acts in a manner so as to minimize interference with Tenant's use of the Demised Premises for the purposes set forth in Section 2.01 hereof, provided that in no event shall Landlord be required to use overtime or premium pay labor. If any such other acts are performed in a manner which prevents Tenant from using the Demised Premises for the purposes set forth in Section 2.01 hereof or from having access to the Demised Premises, in either case, for three (3) consecutive days, then all annual minimum rent and all additional rent payable pursuant to Section 7.03, Article 12 and Article 14 shall abate from the day such other acts prevented Tenant from using the Demised Premises for the purposes set forth in Section 2.01 hereof or having access to the Demised Premises, as the case may be, to the day on which such other acts no longer prevent Tenant from using the Demised Premises for the purposes set forth in Section 2.01 hereof or having access to the Demised Premises, as the case may be. Section 12.04. Notwithstanding anything to the contrary herein contained, Landlord hereby reserves the right (and Tenant hereby consents thereto) to construct or permit the construction, use and maintenance within the Common Areas of Lot Nos. 46.24 and 46.25 including without limitation, the parking areas, of various commercial type buildings, structures, and appurtenances, and equipment incidental thereto. Landlord shall exercise its rights under this Section 12.04 in a manner so as to minimize interference with Tenant's use of the Demised Premises for the purposes set forth in Section 2.01 hereof, provided that in no event shall Landlord be required to use overtime or premium pay labor. If Landlord's exercise of its rights under this Section 12.04 prevents Tenant from using the Demised Premises for the purposes set forth in Section 2.01 hereof or from having access to the Demised Premises, in either case, for three (3) consecutive days, then all annual minimum rent and all additional rent payable pursuant to Section 7.03, Article 12 and Article 14 shall abate from the day Landlord's exercise of such rights prevented Tenant from using the Demised Premises for the purposes set forth in Section 2.01 16 hereof or having access to the Demised Premises, as the case may be, to the day on which such exercise no longer prevents Tenant from using the Demised Premises for the purposes set forth in Section 2.01 hereof or having access to the Demised Premises, as the case may be. ARTICLE 13. UTILITIES Section 13.01. Tenant shall pay, as and when they shall be due and payable, all water charges, taxes, water rates and/or meter charges, sprinkler charges (standby or otherwise), sewer taxes, sewer charges, sewer fees, and sewer rental taxes and charges for utilities, including, without limitation, the charges for gas, electricity, and other utilities furnished to Tenant and consumed in the Demised Premises. Tenant shall heat the Demised Premises whenever the weather shall require. If Landlord, or any property of Landlord, shall be held responsible for any expense covered by this Article, Tenant shall pay Landlord the amount thereof within thirty (30) days following written request. Landlord shall not be responsible to Tenant for any failure or interruption of any such services, irrespective of the cause thereof. ARTICLE 14. TAXES Section 14.01. (a) Subject to the reimbursement obligations of Tenant hereinafter set forth, Landlord shall pay during the Term of this Lease, all real estate taxes assessed or imposed upon or respecting the land and improvements within and upon Lot No. 46.25. The term "real estate taxes" for purposes of this Lease shall exclude income, franchise, estate or inheritance taxes levied against Landlord or taxes based upon rental receipts, but shall include any taxes levied in lieu of or as a substitute for real estate taxes. Tenant shall pay to Landlord, as additional rent, at the time and in the manner set forth in Section 14.01 (b), Tenant's proportionate share of such taxes, which proportionate share shall be based upon the method of calculation set forth in Article 31 hereof. Notwithstanding the foregoing, if the improvements within the Demised Premises and/or the balance of the improvements or any part thereof upon Lot No. 46.25 shall receive a separate assessment based upon the certification of the Tax Assessor, then the taxes payable by Tenant for such improvements may, at Landlord's option, be based thereon. Section 14.01. (b) All amounts payable by Tenant pursuant to this Article shall be paid to Landlord in monthly installments on or before the first day of each calendar month, in advance, in an amount reasonably estimated by Landlord; provided, that in the event Landlord is required under any mortgage encumbering Lot No. 46.25 to escrow real estate taxes, Landlord may, but shall not be obligated to, use the amount required to be so escrowed as a basis for its estimate of the monthly installments due from Tenant hereunder. As soon as shall be reasonably practicable following the expiration of each calendar year during the Lease Term, Landlord shall furnish Tenant with a written statement of the actual amount of Tenant's share of the taxes for such year. If the total amount paid by Tenant under this section for any calendar year during the Lease Term shall be less than the actual amount due from Tenant for such year, as shown on such statement, Tenant shall pay to Landlord the difference between the amount paid by Tenant and the actual amount due, such deficiency to be paid within thirty (30) days after demand therefor by Landlord; and if the total amount paid by Tenant hereunder for any such calendar year shall exceed such actual amount due from Tenant for such calendar year, such excess shall be applied by Landlord to the next accruing monthly installments of taxes due from Tenant or, at Landlord's option, to any other charges payable by Tenant. For the calendar years in which this Lease commences and terminates the provisions of this Section shall apply, and Tenant's liability for its share of taxes for such years shall be subject to a pro rata 17 adjustment based on the number of days of said calendar years during the Lease Term. Prior to or at the commencement of the Lease Term and from time to time thereafter throughout the Lease Term, Landlord may notify Tenant in writing of Landlord's reasonable estimate of Tenant's monthly installments due hereunder. Tenant's obligations under this Section shall survive the expiration of the Lease Term. Landlord shall provide Tenant with a copy of the most recent tax bill for Lot No. 46.25 upon request therefor. Section 14.02. Tenant shall be liable for all taxes on or against property and trade fixtures and equipment placed by Tenant in or about the Demised Premises, or taxes on Tenant's right to occupy the Demised Premises. If any such taxes are levied against Landlord or Landlord's property, and if Landlord pays same, or if the assessed valuation of Landlord's property is increased by the inclusion therein of a value placed upon such property, and if the Landlord pays the taxes based on such increased assessment, Tenant, upon demand, shall repay to Landlord the taxes so paid by Landlord or the portion of such taxes resulting from such increase in assessment. ARTICLE 15. REMEDIES OF LANDLORD Section 15.01. (a) If Tenant shall default in the payment of the annual minimum rental reserved herein, or in the payment of any item of additional rent or other monies due hereunder, or any part of same, and any such default shall continue for more than five (5) days after written notice of such default; or Section 15.01. (b) If Tenant shall default in the observance of any of the provisions, covenants and conditions of this Lease (other than a default covered by subsection (a) above and other than Sections which provide a specific period or date for performance), and such default shall continue for more than thirty (30) days after written notice of such default, or for such other period provided in the relevant Section hereof; or Section 15.01. (c) If Tenant shall fail to occupy the Demised Premises and open for business at the commencement of the Term of this Lease, as above provided, or if the Demised Premises shall be abandoned, deserted or vacated, or if Tenant shall sublet the Demised Premises or assign this Lease, except as herein provided; or Section 15.01. (d) If Tenant or any guarantor of Tenant's obligations hereunder shall make an assignment for the benefit of creditors, or if any such party shall file or have filed against it a petition in bankruptcy, or be adjudicated a bankrupt by any court and such adjudication shall not be vacated within sixty (60) days, or if Tenant or any guarantor of Tenant's obligations hereunder takes the benefit of any insolvency act, or if Tenant or any guarantor of Tenant's obligations hereunder be dissolved voluntarily or involuntarily or have a receiver of its property appointed in any proceedings other than bankruptcy proceedings and such appointment shall not be vacated within sixty (60) days after it has been made, or if any levy, sale or execution of any kind is made upon or of any property of Tenant in the Demised Premises; then, upon the happening of any one or more of the defaults or events specified above, at the option of Landlord: (1) upon ten (10) days notice to Tenant, this Lease and the Term hereof shall wholly cease and terminate on the date specified within the notice, with the same force and effect as though such termination was the date of the expiration of the Term of this Lease, and thereupon, or at any time thereafter, Landlord may re-enter said premises either by force, or otherwise, and have possession of the same and/or may recover possession thereof by summary proceeding, or otherwise (but Tenant 18 shall remain liable to Landlord as hereinafter provided); or (2) Landlord may, without further notice, exercise any remedy available at law or in equity. Section 15.02. In case of any default, event, re-entry, expiration, termination and/or dispossession by summary proceedings, or otherwise, Tenant shall, nevertheless, remain and continue liable to Landlord in a sum equal to all annual minimum rental and additional rent herein reserved for the balance of the Term herein demised as the same may become due and payable pursuant to the provisions of this Lease. Landlord may repair or alter the Demised Premises in such manner as Landlord may deem reasonably necessary or advisable, and/or let or relet the Demised Premises and any and all parts thereof for the whole or any part of the remainder of the original Term hereof or for a longer period, in Landlord's name, or as the agent of Tenant, and, out of any rent so collected or received, Landlord shall, first, pay to itself, the expense and cost of retaking, repossessing, repairing and/or altering the Demised Premises, and the expense of removing all persons and property therefrom, second, pay to itself, any cost or expense sustained in securing any new tenant or tenants, and third, pay to itself, any balance remaining on account of the liability of Tenant to Landlord for the sum equal to the annual minimum rental and additional rent reserved herein and unpaid by Tenant for the remainder of the Term herein demised. Any entry or re-entry by Landlord, whether had or taken under summary proceedings or otherwise, shall not absolve or discharge Tenant from liability hereunder. Nothing in this Section 15.02 is intended to constitute a waiver by Tenant of the duty of Landlord to mitigate damages in the event of Tenant's default to the extent such duty exists pursuant to New Jersey law, provided, however, Tenant agrees that Landlord shall not be required to retain the services of an outside third party broker and Landlord shall not be deemed to have failed to use reasonable efforts to mitigate damages if Landlord shall not retain the services of an outside third party broker. Section 15.03. Should any rent so collected by Landlord after the payment aforesaid be insufficient fully to pay to Landlord a sum equal to all annual minimum rental and additional rent herein reserved, the balance or deficiency shall be paid by Tenant on the rent days herein specified; that is, upon each of such rent days Tenant shall pay to Landlord the amount of the deficiency then existing and Tenant shall be and remain liable for any such deficiency, and the right of Landlord to recover from Tenant the amount thereof, or a sum equal to the amount of all annual minimum rental and additional rent herein reserved if there shall be no reletting, shall survive the issuance of any dispossessory warrant or other termination hereof. Section 15.04. Suit or suits for the recovery of such deficiency or damage, or for a sum equal to any installment or installments of annual minimum rental or additional rent hereunder, may be brought by Landlord from time to time at Landlord's election, and nothing herein contained shall be deemed to require Landlord to await the date on which this Lease or the Term hereof would have expired by limitation had there been no such default by Tenant or no such termination or cancellation. Section 15.05. Tenant hereby expressly waives service of any notice of intention to re-enter subsequent to the giving of the aforesaid notices under Section 15.01 above. Tenant hereby expressly waives any and all right to recover or regain possession of the Demised Premises or to reinstate or to redeem this tenancy or this Lease as is permitted or provided by or under any statute, law, or decision now or hereafter in force and effect. Section 15.06. Tenant shall reimburse Landlord, within thirty (30) days following written demand, for any reasonable counsel fees or collection charges incurred or expended by Landlord by reason of Tenant's default in the performance of any provision, covenant, or condition of this Lease and any 19 such amounts, at the option of Landlord, may be recovered in the same action or proceeding forming the basis of the default or in another action or proceeding. Section 15.07. Notwithstanding any other remedy provided for hereunder and without the requirement of notice, except as provided in this Section, if Tenant shall not comply with any of its obligations hereunder, Landlord shall have the right, at Landlord's sole option, at anytime in the event of an emergency or otherwise after ten (10) days notice to Tenant, to cure such breach at Tenant's expense. Tenant shall reimburse Landlord, within thirty (30) days following demand, as additional rent, for all costs and expenses incurred by Landlord in curing such breach, together with interest computed thereon at the rate of fifteen (15%) percent per annum or the maximum rate permitted by law, whichever shall be the lesser. Section 15.08. Notwithstanding anything to the contrary contained in this Lease, if Tenant fails to pay any rent, additional rent or any other money item due hereunder within thirty (30) days after same are due and payable, Landlord shall have the right (in addition to any other rights or remedies of Landlord and without the requirement of any notice) to commence immediate legal proceedings or action for dispossession and damages or Landlord may avail itself of any other remedies at law or in equity and include in such action or proceeding any amounts then due and payable as of the date of the commencement of such action or proceeding. Notwithstanding anything contained in this Lease, if Tenant fails to pay any monetary items due hereunder on or prior to the date which is ten (10) days following the date on which the same are due and payable, a late charge of four ($.04) cents for each ONE ($1.00) DOLLAR so overdue shall become immediately due and payable to the Landlord as damages for failure to make prompt payment and the same shall be considered as additional rent hereunder payable together with the next installment of monthly rent. In addition, all such unpaid monetary items shall bear interest at the rate of fifteen (15%) percent per annum or the maximum rate permitted by law, whichever shall be the lesser, from the date such monies were due until the date on which Landlord shall receive payment. Section 15.09. The rights and remedies whether herein or elsewhere provided in this Lease shall be cumulative and the exercise of any one right or remedy shall not preclude the exercise of or act as a waiver of any other right or remedy of Landlord hereunder, or which may be existing at law, or in equity, by statute or otherwise. Section 15.10. Tenant covenants and agrees to give any mortgagee and/or ground lessor of the Center or any portion thereof of whom Tenant has notice, notice of any default by Landlord under this Lease and such mortgagee and/or ground lessor shall be afforded the right (but shall not have the obligation) to cure any default by Landlord within such reasonable period of time as may be required by such mortgagee and/or ground lessor. ARTICLE 16. WAIVER OF TRIAL BY JURY Section 16.01. It is mutually agreed by and between Landlord, Tenant and any guarantor of the obligations of Tenant hereunder, that the respective parties hereto shall and they hereby do waive trial by jury in any action, proceeding, or counterclaim brought by the parties hereto on any matters whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, Tenant's use or occupancy of the Demised Premises, and/or any claim of injury or damage, and any emergency, summary or statutory remedy. If Landlord commences any summary proceeding, or any other action for collection of rent or additional rent hereunder, Tenant shall not interpose any counterclaim (other than compulsory counterclaims) or cross claim 20 of any nature in any such proceeding or action, nor shall Tenant move to consolidate any such claim with any claim being maintained by Landlord. ARTICLE 17. ACCESS TO PREMISES Section 17.01. Landlord and its designees shall have the right to enter upon the Demised Premises at all times in the case of an emergency and otherwise upon at least twenty-four (24) hours notice to inspect and examine same, to make repairs, additions, alterations, or improvements to the Demised Premises, the Building within which the Demised Premises are located or any property owned or controlled by Landlord within such Building. Landlord's rights of entry as aforesaid, and the taking of all property into and upon the Demised Premises that may be required in connection therewith, shall not be considered an eviction of Tenant, in whole or in part, constructive or otherwise, and Landlord shall not be liable to Tenant for any expense, damage, or loss or interruption of the business of Tenant by reason thereof, and the rent reserved hereunder shall continue without abatement during the period of any such entry and while such repairs, alterations, improvements or additions are being made. Landlord or Landlord's designees shall have the right, upon at least twenty-four (24) hours notice, to enter the Demised Premises at all reasonable times to show the Demised Premises to prospective purchasers, mortgagees or lessees of the Demised Premises or building of which the Demised Premises form a part. During the six month period prior to the expiration of the Term hereof, Landlord may exhibit the Demised Premises to prospective tenants and Landlord may place upon the Demised Premises notices reading, "To Let" or "For Rent", which notices Tenant shall allow to be posted conspicuously without molestation. If Landlord, in the exercise of its rights under this Article 17, shall unreasonably interfere with Tenant's occupancy of the Demised Premises and such interference results in Tenant being unable to use the Demised Premises for the purposes set forth in Section 2.01 hereof for three (3) consecutive days, then all annual minimum rent and all additional rent payable pursuant to Section 7.03, Article 12 and Article 14 shall abate from the date on which such interference resulted in Tenant being unable to use the Demised Premises for the purposes set forth in Section 2.01 hereof until the earlier of the date on which Tenant resumes, or is again able to resume, use of the Demised Premises for the purposes set forth in Section 2.01 hereof. ARTICLE 18. NO WAIVER Section 18.01. No delay or omission of the exercise of any right by either party hereto shall impair any such right or shall be construed as a waiver of any default or as acquiescence therein. One or more waivers of any provision, covenant, or condition of this Lease by either party shall not be construed by the other party as a waiver of a subsequent breach of any other or the same provisions, covenant, or condition. No requirements whatsoever of this Lease shall be deemed waived or varied because of either party's failure or delay in taking advantage of any default, and Landlord's acceptance of any payment from Tenant with actual or constructive knowledge of any default shall not constitute a waiver of Landlord's rights in respect to such default, nor of any subsequent or continued breach of any such default or any other requirement of this Lease. Section 18.02. No payment by Tenant or receipt by Landlord of a lesser amount than the rent or other sum stipulated to be paid or reserved shall be deemed to be other than on account of the earliest stipulated or reserved sum payable, nor shall any such payment and acceptance by Landlord be deemed an accord and satisfaction or a modification or waiver of any rights or obligations or liabilities hereunder notwithstanding any statement, written or oral, accompanying such payment, or by way of endorsement or otherwise; and 21 Landlord may accept any such payment whether by check, draft or other means whatsoever without prejudice to Landlord's right to recover the balance owing, or to pursue any other remedy in this Lease or at law or in equity provided. Landlord may, at Landlord's option, accept payment of rent or any other charge hereunder from any person or entity other than the Tenant named herein and the same shall not constitute a recognition by Landlord of, or vest in said person or entity, any rights hereunder. ARTICLE 19. REQUIREMENTS OF LAW; INSURANCE REQUIREMENTS Section 19.01. In Tenant's performance of its rights and obligations under this Lease, including without limitation, any preterm right, obligation or entry into the Demised Premises, Tenant covenants and agrees to comply with all laws, orders, and regulations of federal, state, city, county, governmental and municipal authorities, fire insurance rating organizations and fire insurance underwriters, and insurance companies issuing coverage respecting the Demised Premises and Tenant shall make all alterations or installations necessary to comply therewith. Notwithstanding anything in this Lease to the contrary, Tenant shall not be obligated to make any alterations or installations necessary to comply with law to those portions of the Demised Premises which Landlord is obligated to repair throughout the term of this Lease pursuant to Section 6.03 hereof unless such alteration or installation is required by law on account of Tenant's particular use or occupancy or manner of use or occupancy of the Demised Premises. Tenant shall secure all permits or approvals necessary to operate its business within the Demised Premises and shall only operate its business within the Demised Premises in compliance with all laws, orders and regulations of federal, state, city and county, governmental and municipal authorities, fire insurance rating organizations and fire insurance underwriters, and insurance companies issuing coverage respecting the Demised Premises. Section 19.02. Tenant shall not use or occupy the Demised Premises or do or permit anything to be done therein in any manner which shall make it impossible for Landlord and/or Tenant to obtain at standard rates any insurance required or desired, or which will invalidate or increase the cost to Landlord of any insurance. Section 19.03. If, by reason of Tenant's failure to comply with the provisions of Section 19.01 above, or if, by reason of any act or failure to act of Tenant, its agents, servants, contractors, employees or licensees, or if, by reason of the use of the Demised Premises, the fire insurance rates applicable to the Demised Premises, or of the Building or any other premises in said Building, shall be increased above the rate applicable to the occupancy permitted hereunder, Tenant shall pay to Landlord, within thirty (30) days following demand, the amount of additional premium for fire insurance payable by reason thereof. Section 19.04. No abatement, diminution, or reduction in annual minimum rental or any sums constituting additional rent shall be claimed by or allowed to Tenant for any inconvenience or interruption, cessation or loss of business caused directly or indirectly, by any present or future laws, ordinances, rules or regulations, requirements or orders of federal, state, county, township or municipal governments or any other lawful authority whatsoever, or by priorities, rationing, or curtailment of labor or materials, or by war, civil commotion, strikes or riots, or any manner or thing resulting therefrom, or by any other cause or causes beyond the control of Landlord, nor shall this Lease be affected by any such causes. 22 ARTICLE 20. SIGNS Section 20.01. Tenant shall not place, install or maintain any sign upon or outside the Demised Premises or in the Center until approved by Landlord, which approval shall not be unreasonably withheld or delayed; nor shall Tenant place, install or maintain any awning, canopy, aerial, antenna or the like in or upon the Demised Premises, the Building or the Center. Any sign must conform to all applicable rules, regulations, codes and directives of governmental agencies having jurisdiction, and Tenant shall, at its expense, apply for and obtain all permits necessary in connection therewith. If Landlord shall submit to Tenant a general sign criteria or specification, Tenant shall comply therewith. Tenant shall be solely responsible for all maintenance and repairs respecting its signs. ARTICLE 21. TENANT'S ADDITIONAL COVENANTS Section 21.01. Tenant covenants and agrees for itself, its officers, employees, contractors, agents, servants, licensees, invitees, subtenants, concessionaires, and all others doing business with Tenant (hereinafter for the purposes of this Article, collectively referred to as "Tenant") that: (a) There is no clause (a) to this Section 21.01; (b) Tenant shall not encumber or obstruct the Center or sidewalks in and about the Demised Premises; (c) Tenant shall not display, advertise or sell its products or goods in the Common Areas of the Center or sidewalk in and about the Demised Premises; (d) Tenant shall not permit any deliveries to be made through the front entrance of the Demised Premises unless there is no access thereto otherwise; (e) Tenant shall not cause or permit trash, refuse, dirt or other rubbish to accumulate on the Demised Premises or in the Center and shall cause same to be promptly removed; (f) Tenant shall not injure, overload, deface, commit waste or otherwise harm the Demised Premises or any part thereof; (g) Tenant shall not commit any nuisance; (h) Tenant shall not permit the emission from the Demised Premises of any objectionable noise or odor; (i) Tenant shall not burn any trash, rubbish, dirt or refuse within the Center; (j) Tenant shall use the Demised Premises only for business and commercial purposes (subject to the provisions of Article 2 hereof) and Tenant shall not use, allow or permit any industrial, manufacturing or processing activities within the Demised Premises, except as may be expressly permitted by Section 2.01 of this Lease; (k) Tenant shall conform and comply with all nondiscriminatory and uniformly applicable rules and regulations which Landlord may reasonably promulgate for the management and use of the Center; (l) Tenant shall not use any advertising medium that may constitute a nuisance, such as loudspeakers, sound amplifiers or phonographs, in a manner to be heard outside the Demised Premises; 23 (m) Tenant shall cooperate with Landlord in promoting the use of the name of the Center; (n) Tenant shall not place a load on any floor of the Demised Premises exceeding the floor load per square foot which such floor was designed to carry; (o) Tenant shall not install, operate or maintain in the Demised Premises any electrical equipment which will overload the electrical system therein or any part thereof beyond the capacity for proper and safe operation, as determined by Landlord, in relation to the overall system and requirements for electricity in the Building; (p) Tenant shall not install, operate, or maintain any electrical equipment in the Demised Premises which does not comply with applicable codes; and (q) No portion of the Demised Premises shall be used or occupied for the sale, dispensing, storage or display of food, foodstuffs, or food products for consumption on or off the Demised Premises, provided that the foregoing shall not prohibit the use and occupancy of the Demised Premises as permitted by Section 2.01 hereof nor the installation and use of vending machines serving solely Tenant's employees. ARTICLE 22. EASEMENTS FOR UTILITIES Section 22.01. Landlord or its designee shall have the right and Tenant shall permit Landlord or its designee to erect, use, maintain and repair pipes, cables, conduits, plumbing, vents and wires in, to and through the Demised Premises as and to the extent that Landlord may now or hereafter deem necessary or appropriate for the use or proper operation and maintenance of the Demised Premises, or the Building or any other portion of the Center. Landlord's rights under this Article shall be exercised, as far as practicable, in such manner as to avoid unreasonable interference with Tenant's occupancy of the Demised Premises. If Landlord, in the exercise of its rights under this Section 22.01, shall unreasonably interfere with Tenant's occupancy of the Demised Premises and such interference results in Tenant being unable to use the Demised Premises for the purposes set forth in Section 2.01 hereof for three (3) consecutive days, then all annual minimum rental and all additional rent payable pursuant to Section 7.03, Article 12 and Article 14 shall abate with respect to the Demised Premises from the date on which such interference resulted in Tenant being unable to use the Demised Premises for the purposes set forth in Section 2.01 hereof until the earlier of the date on which Tenant resumes, or is again able to resume, use of the Demised Premises for the purposes set forth in Section 2.01 hereof. ARTICLE 23. CONSENTS AND APPROVALS Section 23.01. With respect to any provision of this Lease providing that Landlord shall not unreasonably withhold or unreasonably delay any consent or any approval, Tenant, in no event, shall be entitled to make, nor shall Tenant make, any claim for, and Tenant hereby waives any claim for money damages; nor shall Tenant claim any money damages by way of setoff, counterclaim or defense, based upon any claim or assertion by Tenant that Landlord has unreasonably withheld or unreasonably delayed any consent or approval; but Tenant's sole remedy shall be an action or proceeding to enforce any such provision, or for specific performance, injunction or declaratory judgment. 24 THERE IS NO ARTICLE 24 TO THIS LEASE ARTICLE 25. END OF TERM HOLDOVER Section 25.01. If the last day of the Term of this Lease falls on a Sunday, or legal holiday, this Lease shall expire on the business day immediately following. Upon the expiration or other termination of the Term of this Lease, Tenant shall quit and surrender to Landlord the Demised Premises, together with all buildings and improvements thereon, "broom-clean" and in good order and condition, ordinary wear and tear and damage by the elements excepted, and Tenant shall thereupon remove all property of Tenant and, failing to do so, Landlord may cause all of the said property to be removed, stored and/or disposed of at the expense of Tenant. Tenant shall pay all costs and expenses thereby incurred. Any property not so removed shall be deemed to have been abandoned by Tenant and may be retained or disposed of by Landlord as Landlord, in its sole discretion, shall determine and Tenant hereby releases Landlord from all claims for loss or damage to such property arising out of such retention or disposition thereof. Tenant's obligations under this Article shall survive the expiration or other termination of the Term of this Lease. Section 25.02. If Tenant remains in possession of the Demised Premises at the expiration of the Term hereof, Tenant, at Landlord's option, shall be deemed to be occupying the Demised Premises as a tenant from month to month, at a monthly rental equal to one hundred and fifty (150%) percent of the sum of the monthly installment of annual minimum rent payable during the last month of the Term hereof plus all additional rent coming due hereunder. In the event of such holdover, Tenant's occupancy of the Demised Premises, except as aforesaid, shall be subject to all other conditions, provisions and obligations of this Lease, but only insofar as the same are applicable to a month to month tenancy. Such month to month tenancy shall be terminable by Landlord upon one (1) month's notice to Tenant, and if Landlord shall give such notice, Tenant shall quit and surrender the Demised Premises to Landlord as above provided. Section 25.03. Notwithstanding anything to the contrary contained in this Lease, if Landlord shall be unable to provide possession of the Demised Premises because of the holding-over or retention of possession of any prior tenant, undertenant or occupants, or for any other reason whatsoever, Landlord shall not be subject to any liability for the failure to give possession on the date herein provided, if any, and the validity of this Lease shall not be impaired under such circumstances, but the term of the Lease shall be extended proportionately until after Landlord shall have given Tenant written notice that the Demised Premises are ready for Tenant's occupancy. If permission is given to Tenant to enter into possession of the Demised Premises or to occupy premises other than the Demised Premises prior to the date specified as the commencement of the term of this Lease, Tenant covenants and agrees that such occupancy shall be deemed to be under all of the terms, covenants, conditions and provisions of this Lease. Nothing in this Section 25.03 shall impair Tenant's right to terminate this Lease pursuant to Section 5.04 hereof. ARTICLE 26. AUTHORITY TO EXECUTE Section 26.01. Landlord and Tenant do hereby respectively represent to the other that it has the capacity to enter into this Agreement. ARTICLE 27. NOTICES Section 27.01. All notices, demands, certifications, designations, 25 statements and other communications to be given pursuant to this Lease shall be in writing and sent by prepaid certified or registered U.S. mail, return receipt requested, or by a recognized overnight courier service which requires acknowledgment of receipt of delivery from addressee, to the address of the parties below specified or at such other address as may be given by written notice in the manner prescribed in this paragraph. Landlord's address for notice shall be c/o National Realty & Development Corp., 3 Manhattanville Road, Purchase, New York 10577. Tenant's address for notices shall be the address first set forth above for Tenant. Notice shall be deemed to be given upon receipt or refusal of receipt by addressee. Addresses for notice may be changed by giving notice pursuant to this Section. ARTICLE 28. BROKER Section 28.01. Tenant covenants, warrants and represents that it has dealt with no broker except Prodevco Management Group, 2025 Lincoln Highway, Edison, New Jersey 08817 ("PRODEVCO") respecting this Lease and that no conversations, correspondence or negotiations were had by it with any broker except with said PRODEVCO concerning the renting or leasing of the Demised Premises. Tenant shall hold Landlord and National Realty & Development Corp. harmless and defend (by counsel satisfactory to Landlord) said parties against any claims for a brokerage commission arising out of any conversations, correspondence or negotiations had by it with any broker except said PRODEVCO. Section 28.02. Landlord covenants, warrants and represents that it has dealt with no broker except Prodevco Management Group, 2025 Lincoln Highway, Edison, New Jersey 08817 ("PRODEVCO") respecting this Lease and that no conversations, correspondence or negotiations were had by it with any broker except with said PRODEVCO concerning the renting or leasing of the Demised Premises. Landlord shall hold Tenant harmless and defend (by counsel satisfactory to Tenant) said parties against any claims for a brokerage commission arising out of any conversations, correspondence or negotiations had by it with any broker except said PRODEVCO. Landlord shall pay any commissions owing to said PRODEVCO in accordance with separate agreement. ARTICLE 29. MEMORANDUM OF LEASE Section 29.01. Tenant agrees not to record this Lease. The parties agree, upon request of either, to execute, in recordable form, a short form lease entitled "Memorandum of Lease", it being the intention of the parties that this Lease will not be recorded, but only a memorandum thereof. Such short form lease shall contain those provisions of this Lease as shall be desired in the reasonable discretion of counsel for the parties hereto, provided that in no event shall such short form lease contain any provisions relevant to the annual minimum rent and/or additional rent payable under this Lease. ARTICLE 30. AIR AND WATER POLLUTION Section 30.01. Tenant hereby indemnifies and saves Landlord harmless against any claim, damage, liability, costs, penalties or fines which the Landlord may suffer as a result of air, land or water pollution caused by Tenant in its use or occupancy or manner of use or occupancy of the Demised Premises or in its storage, handling, possession, transportation and/or disposal of any Hazardous Waste or Hazardous Substance (as such terms are hereafter defined) within or about the Demised Premises. Tenant covenants and 26 agrees to notify Landlord immediately of any claim or notice served upon it with respect to any such claim that Tenant is causing air, land or water pollution; and Tenant, in any event, will take immediate steps to halt, remedy and cure any pollution of air, land or water caused by Tenant by its use of the Demised Premises, at its sole cost and expense. Section 30.02. (a) Tenant shall comply with all state and federal environmental laws, including the Spill Compensation and Control Act ("SCCA") (N.J.S.A. 58:10-23.11 et seq.) and the Industrial Site Recovery Act ("ISRA") (N.J.S.A. 13:1K-6 et seq.) as the same may have been or may hereafter be amended (collectively, the "Environmental Statutes") as the same may relate to Tenant's use and occupancy or manner of use and occupancy of the Demised Premises or any act or failure to act of Tenant. Tenant shall supply Landlord on demand with any information Landlord may require in order to enable Landlord to comply with the Environmental Statutes, including, without limitation, ISRA, whether upon the transfer of title or closing of operations at the Demised Premises, or for any reason whatsoever. Section 30.02. (b) Tenant shall not use the Demised Premises for the purpose of refining, producing, storing, handling, transferring, processing or transporting said "Hazardous Substances", except in de minimis amounts, as such term is defined in N.J.S.A. 5B:10-23.llb(k) of the New Jersey Spill Compensation and Control Act (N.J.S.A. 58:10-23.11 et seq.). Section 30.02. (c) Tenant shall not use the Demised Premises to generate, manufacture, refine, transport, treat, store or handle, except in de minimis amounts, or dispose of "Hazardous Substances", or "Hazardous Wastes", as such terms are defined in N.J.A.C. 7:1-3.3. Section 30.02. (d) Tenant shall not cause or permit to exist, as a result of an intentional or unintentional action or omission on its part, a releasing, spilling, leaking, pumping, emitting, pouring, emptying or dumping of a "Hazardous Substance", except in de minimis amounts, as such term is defined in N.J.S.A. 58:10-23.llb(k) into waters of the State of New Jersey or onto the lands from which it might flow or drain into said waters, or into waters outside the jurisdiction of the State of New Jersey where damage may result to the lands, waters, fish, shellfish, wildlife, biota, air and other resources owned, managed, held in trust or otherwise controlled by the State of New Jersey. Section 30.02. (e) Tenant shall not use the Demised Premises as a "Major Facility", as such term is defined in N.J.S.A. 58:10-23.lb(1). Section 30.02. (f) Tenant shall not install nor permit to be installed in the Demised Premises friable asbestos or any substance containing asbestos and deemed hazardous by federal or state regulations respecting such material. Section 30.03. Tenant represents that Tenant has not received a summons, citation, directive, letter or other communication, written or oral, from the New Jersey Department of Environmental Protection concerning any intentional or unintentional action or omission on Tenant's part resulting in the releasing, spilling, leaking, pumping, pouring, emitting, emptying or dumping of "Hazardous Substances", as such term is defined in N.J.S.A. 58:10-23.llb(k), into the waters or onto the lands of the State of New Jersey, or into the waters outside the jurisdiction of the State of New Jersey resulting in damage to the lands, waters, fish, shellfish, wildlife, biota, air and other resources owned, managed, held in trust or otherwise controlled by the State of New Jersey. Section 30.04. (a) In the event that Tenant does not expeditiously proceed with any compliance with respect to the Demised Premises, the Building 27 or the Center required of it by any State or Federal authority under the Environmental Statutes, Landlord may after two (2) days notice to Tenant, elect to undertake such compliance in order to protect its interest in the Demised Premises. Any monies expended by Landlord in efforts to comply with any environmental statute (including but not limited to: the costs of hiring consultants, undertaking sampling and testing, performing any cleanup necessary or useful in the compliance process and reasonable attorney's fees), together with interest at fifteen (15%) percent per annum or the maximum rate permitted by law, whichever shall be the lesser, will be added to and payable with the next payment of annual minimum rental due from Tenant, or will be payable on demand of Landlord. Section 30.04. (b) Upon demand by Landlord, Tenant will provide Landlord with all information as to the use or manner of use of the Demised Premises by Tenant, and an environmental audit of the Demised Premises which is designed to describe any materials on the Demised Premises which would require a filing and/or any disclosure under the Environmental Statutes in the event of any transfer or closure, or which would require remedial action under any other Environmental Statutes. Section 30.04. (c) In the event that Tenant receives notice from the Department of Environmental Protection or any other governmental authority or bureau having or asserting jurisdiction thereover under SCCA of a discharge on or about the Demised Premises, or any other notice of violation of the Environmental Statutes or any alleged or claimed violation thereof, Tenant will immediately send a copy of such notice to Landlord and Tenant will promptly proceed to remedy the condition described in the notice. Tenant shall take all action necessary to ensure that the SCCA administrator does not spend Spill Fund monies to clean up the site. In the event that the SCCA administrator should spend money cleaning up property owned by Landlord due to Tenant's use or occupancy or manner of use or occupancy of the Demised Premises or the act or failure to act of Tenant, and/or a lien is imposed on the Demised Premises or any portion of the parcel of which it forms a part or any property of Landlord, Landlord may take such actions as it deems necessary to remove such lien, including satisfaction thereof, or may require it to be bonded by Tenant, and Tenant agrees to defend, indemnify and hold Landlord free and harmless from and against all loss, costs, damage and expense (including reasonable attorney's fees and costs) Landlord may sustain by reason of the assertion against Landlord by any party of any claim in connection therewith. ARTICLE 31. METHOD OF CALCULATION Section 31.01. (a) The parties hereto acknowledge that the proportionate share payable by Tenant pursuant to Section 7.03 and Section 14.01 shall be determined by the type of use to which the Demised Premises is to be put - i.e., processing or non-office space or office space, thereby creating a weighted fraction representing Tenant's proportionate share. The numerator of such fraction shall be the sum of (a) the gross leasable area of processing or non-office space within the Demised Premises; plus, (b) two (2) times the gross leasable area of office space within the Demised Premises. The denominator of such fraction shall be the sum of all the numerators, including the numerator of Tenant, as calculated in the foregoing manner for each and every space or division thereof (whether or not such space is leased or occupied) within the Building or buildings upon Lot No. 46.25. Notwithstanding the foregoing provisions of this Article, in the event the obligations of Tenant under either Section 7.03 and/or Article 14 of this Lease are specifically identifiable separate charges relating to Tenant, the Building and/or the Demised Premises, then, and in such event the obligations of Tenant (including Tenant's proportionate share thereof) under this Lease may, at Landlord's option, be measured and payable in accordance with such separate and 28 specifically identifiable charge. For purposes of this Lease, as of the date hereof 3,696 square feet is deemed to be leased as office space and 1,416 square feet is deemed to be leased as non-office or processing space. In the event Tenant shall hereafter make any alterations to the Demised Premises which result in an increase in the amount of office space, Tenant hereby covenants and agrees to execute upon demand a modification of lease agreement modifying this Article 31 to evidence the resulting increase in office space. The foregoing is not to be construed in any manner so as to relieve Tenant of its obligations pursuant to Section 6.01 hereof. Section 31.01. (b) Landlord shall have the right at any time during the Term or any extension term hereof, and Tenant hereby consents thereto, to subdivide Lot Nos. 46.24 and/or 46.25 into such additional lot or lots as Landlord may in its sole discretion elect and to expand Lot Nos. 46.24 and/or 46.25 as Landlord may in its sole discretion elect, provided that the whole of the Building shall remain entirely within one such subdivision. Notwithstanding anything contained in this Lease to the contrary, in the event of any such subdivision or expansion of Lot Nos. 46.24 and/or 46.25 by Landlord then, at Landlord's option, (i) references in this Lease to Lot No. 46.24 and/or 46.25, as the case may be, may be deemed to be to the original (pre-subdivision or pre-expansion) Lot No. 46.24 or 46.25, as the case may be, or any portion(s) thereof of which the Demised Premises (or Common Areas) forms a part, and (ii) in calculating Tenant's proportionate share(s), Landlord may use as the denominator of the fraction(s) representing Tenant's proportionate share(s) the building(s) or portions thereof within said original Lot Nos. 46.24 and 46.25 or any portion(s) thereof of which the Demised Premises (or Common Areas) forms a part. In the event of such subdivision or expansion, Tenant agrees to execute an agreement in recordable form setting forth the description of Lot No. 46.24 and/or 46.25, as the case may be, as so subdivided or expanded and as renamed and/or renumbered. ARTICLE 32. SHIFT PREMISES Section 32.01. Landlord hereby reserves the right (and Tenant hereby acknowledges and consents thereto), after at least thirty (30) days written notice to Tenant, to shift the location of the Demised Premises to an alternate location of substantially equivalent size and condition within the Center, provided Landlord shall reimburse Tenant for all reasonable actual out-of- pocket expenses incurred by Tenant in connection with such shift upon demand therefor accompanied by paid invoices evidencing such expenses. THERE IS NO ARTICLE 33 TO THIS LEASE ARTICLE 34. RELATIONSHIP OF PARTIES Section 34.01. Nothing herein contained shall be deemed or construed by the parties hereto, nor by any third party, as constituting the Landlord a partner of Tenant in the conduct of Tenant's business, or as creating the relationship of principal and agent or joint venturers between the parties hereto, it being the intention of the parties hereto that the relationship between them is and shall at all times be and remain that of Landlord and Tenant only. Tenant agrees upon the demand of Landlord to deliver to Landlord and any mortgagee of Landlord the most recently available financial statements of Tenant and any guarantor of this Lease, certified to by an officer thereof, and updated to the extent reasonably requested by Landlord or any such mortgagee. 29 ARTICLE 35. CAPTIONS Section 35.01. The Article captions contained herein are for convenience only and do not define, limit, or construe the contents of such Articles and are in no way to be construed as a part of this Lease. ARTICLE 36. DEFINITIONS Section 36.01. Words of any gender used in this Lease shall be held to include any other gender, and words in the singular number shall be held to include the plural, when the sense requires. Section 36.02. If any provision of this Lease or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each provision of this Lease shall be valid and be enforced to the fullest extent permitted by law. ARTICLE 37. ENTIRE AGREEMENT Section 37.01. This instrument of Lease contains the entire and only agreement between the parties concerning the Demised Premises. No prior oral or written statements or representation, if any, of any party hereto or any representative of a party hereto, not contained in this instrument, shall have any force or effect. This Lease shall not be modified in any way, except by a writing executed by Landlord and Tenant. No oral agreement or representations shall be deemed to constitute a lease other than this agreement. This agreement shall not be binding until it shall have been executed and delivered by Landlord and Tenant. The submission of this Lease to Tenant prior to its execution by Landlord shall not be an offer to lease. ARTICLE 38. SUCCESSORS IN INTEREST Section 38.01. All provisions herein contained shall bind and inure to the benefit of the respective parties hereto, their heirs, personal representatives, successors and assigns, as the case may be. In the event Landlord or any successor-lessor (owner) of the Demised Premises shall convey or otherwise dispose of the Demised Premises and/or the Center and/or the Tax Lot of which the Demised Premises forms a part, all liabilities and obligations of Landlord or such successor-lessor (owner), as Landlord under this Lease shall terminate upon such conveyance or disposal. Section 38.02. If Landlord, or any successor in interest to Landlord, shall be an individual, joint venturer, executor, estate, personal representative, conservator, tenancy-in-common, trustee, trust, partnership, general or limited, limited liability partnership, limited liability company, firm or corporation, there shall be no personal liability on the part of such individual or on the part of any members of such joint venture, tenancy-in-common, trustee, trust, partnership, company, firm or corporation, its officers, managers, directors, members or stockholders, or on the part of such joint venture, estate, tenancy-in-common, trustee, trust, partnership, company, firm or corporation as to any of the provisions, covenants or conditions of this Lease. Tenant hereby acknowledges that it shall look solely to the real property interest of Landlord in Lot No. 46.25 (or, in the event of a subdivision of said Lot, such subdivided portion thereof which includes the Demised Premises) for the satisfaction or assertion of any claims, 30 rights and remedies of Tenant against Landlord, in the event of breach by Landlord of any of the terms, provisions, covenants or conditions of this Lease. ARTICLE 39. SECURITY Section 39.01. Tenant has deposited with Landlord the sum of SIX THOUSAND EIGHT HUNDRED SIXTEEN and 00/100 ($6,816.00) DOLLARS as security for the faithful performance and observance by Tenant of the terms, provisions, covenants and conditions of this Lease. In the event Tenant defaults in respect of any of the provisions, covenants and conditions of this Lease, including, but not limited to, the payment of annual minimum rental and additional rent, Landlord may, from time to time, use, apply, or retain the whole or any part of the security so deposited to the extent required for the payment of any annual minimum rental and additional rent or any other sum as to which Tenant is in default or for any sum which Landlord may expend or may be required to expend by reason of Tenant's default in respect of any of the provisions, covenants and conditions of this Lease, including, but not limited to, reasonable counsel fees and other collection charges, or of any damages or deficiency in the reletting, repairing or altering of the Demised Premises, whether such damages or deficiency accrued before or after summary proceedings or other re-entry by Landlord. In the event that Tenant shall fully and faithfully comply with all the provisions, covenants and conditions of this Lease, the security shall be returned to Tenant, without interest, after the expiration of the Lease, and after delivery of entire possession of the Demised Premises to Landlord. If, due to Tenant's default hereunder, Landlord shall be entitled to apply or retain any portion of said security, Tenant shall within thirty (30) days following demand, deposit with Landlord such amount as may be necessary to restore the amount of security to the amount set forth in the first sentence of this Article. Tenant shall not assign or encumber the security deposited hereunder and neither Landlord or its successors or assigns shall be bound by any such assignment or encumbrance. In the absence of evidence satisfactory to Landlord of any assignment of the right to receive the security, or the remaining portion thereof, Landlord may return the security to the original tenant regardless of any number of assignments of the Lease itself. In the event of a sale of the Demised Premises or larger premises of which the Demised Premises form a part, Landlord shall transfer the security to the purchaser for the benefit of Tenant and Landlord, after giving notice to Tenant, shall be deemed released by Tenant from all liability for the return of such security and Tenant shall look solely to the new owner for the return thereof. No holder of any mortgage upon the Demised Premises or the larger property of which the Demised Premises forms a part shall be responsible in connection with the security deposited hereunder unless such mortgagee shall have in fact received such security and acknowledged such receipt in writing to Tenant. IN WITNESS WHEREOF, the parties have hereunto set their hands and seals the day and year first above written. ATTEST: 46.25 ASSOCIATES L.P., a Delaware limited partnership By: Middlesex Business Development Corp. By: /s/ Robert C. Baker Robert C. Baker President 31 MICROFRAME, INC., a New Jersey corporation By: /s/ Lonnie L. Sciambi Lonnie L. Sciambi President and Chief Executive Officer 32 STATE OF NEW YORK ) SS.: COUNTY OF WESTCHESTER ) BE IT REMEMBERED, that on the 20th day of July, 1995, before me, the subscriber, a notary public of the State of New York, , personally appeared Robert C. Baker, President of Middlesex Business Development Corp., as general partner of 46.25 ASSOCIATES L.P., who, I am satisfied, is the person who signed the within instrument; and I having first made known to him the contents thereof, he thereupon acknowledged that he signed, sealed with the corporate seal, and delivered the said instrument as such officer aforesaid, and that the within instrument is the voluntary act and deed of said corporation as such general partner, made by virtue of the authority of its board of directors. /s/ Patricia Ormerod NOTARY PUBLIC PATRICIA ORMEROD Notary Public, State of New York No. 4893560 Qualified in Westchester County Commission Expires June 1, 1997 STATE OF NEW JERSEY ) SS.: COUNTY OF MIDDLESEX ) BE IT REMEMBERED, that on the 13th day of July, 1995, before me, the subscriber, a notary public of the State of New Jersey, personally appeared Lonnie L. Sciambi, President and Chief Executive Officer of MICROFRAME, INC., who, I am satisfied, is the person who signed the within instrument; and I having first made known to him the contents thereof, he thereupon acknowledged that he signed, sealed with the corporate seal, and delivered the said instrument as such officer aforesaid, and that the within instrument is the voluntary act and deed of said corporation, made by virtue of the authority of its board of directors. /s/ Pauline Siecinski NOTARY PUBLIC PAULINE SIECINSKI NOTARY PUBLIC OF NEW JERSEY My Commission Expires Nov. 6, 1999 33 EX-10 4 EXHIBIT 10.29 1994 STOCK OPTION PLAN of MICROFRAME, INC. (as amended on July 17, 1995) 1. PURPOSES OF THE PLAN. This stock option plan (the "Plan") is designed to provide an incentive to key employees (including directors and officers who are key employees) and to consultants and directors who are not employees of MicroFrame, Inc., a New Jersey corporation (the "Company"), and its present and future subsidiary corporations, as defined in Paragraph 19 ("Subsidiaries"), and to offer an additional inducement in obtaining the services of such individuals. The Plan provides for the grant of "incentive stock options" ("ISOs") within the meaning of Section 422 of the Internal Reve- nue Code of 1986, as amended (the "Code"), and nonqualified stock options ("NQSOs"), but the Company makes no warranty as to the qualification of any option as an "incentive stock option" under the Code. 2. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Paragraph 12, the aggregate number of shares of Common Stock, $.001 par value per share, of the Company ("Common Stock") for which options may be granted under the Plan shall not exceed 750,000. Such shares of Common Stock may, in the discretion of the Board of Directors of the Company (the "Board of Directors"), consist either in whole or in part of authorized but unissued shares of Common Stock or shares of Common Stock held in the treasury of the Company. The Company shall at all times during the term of the Plan reserve and keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of the Plan. Subject to the provisions of Paragraph 13, any shares of Common Stock subject to an option which for any reason expires, is cancelled or is terminated unexercised or which ceases for any reason to be exercisable shall again become available for the granting of options under the Plan. 3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by a committee of the Board of Directors (the "Committee") consisting of not less than two directors, each of whom shall be a "disinterested person" within the meaning of Rule 16b-3 (or any successor rule or regulation) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). A majority of the members of the Committee shall constitute a quorum, and the acts of a majority of the members present at any meeting at which a quorum is present, and any acts approved in writing by all members without a meeting, shall be the acts of the Committee. Subject to the express provisions of the Plan, the Committee shall have the authority, in its sole discretion, with respect to Employee Options and Consultant Options (each as defined in Paragraph 19): to determine the key employees who shall receive Employee Options and the consultants who shall receive Consultant Options; the times when they shall receive options; whether an Employee Option shall be an ISO or a NQSO; the number of shares of Common Stock to be subject to each option; the term of each option; the date each option shall become exercisable; whether an option shall be exercisable in whole, in part or in installments, and, if in installments, the number of shares of Common Stock to be subject to each installment; whether the installments shall be cumulative; the date each installment shall become exercisable and the term of each installment; whether to accelerate the date of exercise of any installment; whether shares of Common Stock may be issued upon the exercise of an option as partly paid, and, if so, the dates when future installments of the exercise price shall become due and the amounts of such installments; the exercise price of each option; the form of payment of the exercise price; whether to restrict the sale or other disposition of the shares of Common Stock acquired upon the exercise of an option and to waive any such restriction; whether to subject the exercise of all or any portion of an option to the fulfillment of contingencies as specified in the contract referred to in Paragraph 11 (the "Contract"), including without limitation, contingencies relating to entering into a covenant not to compete with the Company and its Parent (as defined in Paragraph 19) and Subsidiaries, to financial objectives for the Company, a Subsidiary, a division, a product line or other category, and/or the period of continued relationship of the optionee with the Company or its Subsidiaries, and to determine whether such contingencies have been met; and with respect to Employee Options, Consultant Options and Non-Employee Director Options (as defined in Paragraph 19): to determine the amount, if any, necessary to satisfy the Company's obligation to withhold taxes or other amounts; the fair market value of a share of Common Stock; to construe the respective Contracts and the Plan; with the consent of the optionee, to cancel or modify an option, provided such option as modified would be permitted to be granted on such date under the terms of the Plan; to prescribe, amend and rescind rules and regulations relating to the Plan; and to make all other determinations necessary or advisable for administering the Plan. The determinations of the Committee on the matters referred to in this Paragraph 3 shall be conclusive. No member or former member of the Committee shall be liable for any action, failure to act or determination made in good faith with respect to the Plan or any option hereunder. In addition, the Company shall indemnify and hold each member and former member of the Committee harmless from and against any liability, claim for damages and expenses in connection therewith by reason of any action, failure to act or determination made in good faith under or in connection with the Plan or any option hereunder to the fullest extent permitted with respect to directors under the Company's certificate of incorporation, by-laws or applicable law. 4. ELIGIBILITY; GRANTS. The Committee may from time to time, consistent with the purposes of the Plan, grant Employee Options to key employees (including officers and directors who are key employees), and Consultant Options to consultants, of the Company or any of its Subsidiaries. Such options granted shall cover such number of shares of Common Stock as the Committee may determine; provided, however, that the maximum number of shares subject to Employee Options that may be granted to any individual during any calendar year under the Plan (the "162(m) Maximum") shall be 75,000 shares; and further provided that the aggregate market value (determined at the time the option is granted) of the shares of Common Stock for which any eligible employee may be granted ISOs under the Plan or any other plan of the Company, or of a Parent or a Subsidiary of the Company, which are exercisable for the first time by such optionee during any calendar year shall not exceed $100,000. The $100,000 ISO limitation shall be applied by taking ISOs into account in the order in which they were granted. Any option (or the portion thereof) granted in excess of such amount shall be treated as a NQSO. Immediately following each annual meeting of shareholders of the Company at which directors are elected (an "Annual Meeting") during the term of the Plan, every person who is a Non-Employee Director (as defined in Paragraph 19) at such time, whether or not elected at such meeting, shall be granted a Non-Employee Director Option to purchase 10,000 shares of Common Stock. In addition, on the day an individual first becomes a Non-Employee Director if other than at an Annual Meeting, such Non-Employee Director shall be granted an -2- option to purchase a number of shares of Common Stock equal to 2,500 multiplied by the number of full three-month periods remaining until the first anniversary of the immediately preceding Annual Meeting. Each Non-Employee Director Option shall become exercisable as to 2,500 shares of Common Stock upon each three- month anniversary of the date of grant, provided that the holder continues to serve as a Non-Employee Director on such date; and further provided, that if the next Annual Meeting is held on or before the first anniversary of the immediately preceding Annual Meeting, the last 2,500 shares of Common Stock under such Non-Employee Director Option shall become exercisable on the day preceding the next Annual Meeting (if he continues to be a Non-Employee Director on such date). In the event the remaining shares available for grant under the Plan are not sufficient to grant the Non-Employee Director Options to each such Non-Employee Director on any date, the number of shares subject to the Non-Employee Director Options to be granted on such date shall be reduced proportionately. The Committee shall not have any discretion with respect to the selection of directors to receive Non-Employee Director Options or the amount, the price or the timing with respect thereto. A Non-Employee Director shall not be entitled to receive any options under the Plan other than Non- Employee Director Options. 5. EXERCISE PRICE. The exercise price of the shares of Common Stock under each Employee Option and Consultant Option shall be determined by the Committee; provided, however, that the exercise price of an ISO shall not be less than the fair market value of the Common Stock subject to such option on the date of grant; and further provided, that if, at the time an ISO is granted, the optionee owns (or is deemed to own under Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company, of any of its Subsidiaries or of a Parent, the exercise price of such ISO shall not be less than 110% of the fair market value of the Common Stock subject to such ISO on the date of grant. The exercise price of the shares of Common Stock under each Non-Employee Director Option shall be equal to the fair market value of the Common Stock subject to such option on the date of grant. The fair market value of a share of Common Stock on any day shall be (a) if the principal market for the Common Stock is a national securities exchange, the average of the highest and lowest sales prices per share of Common Stock on such day as reported by such exchange or on a composite tape reflecting transactions on such exchange, (b) if the principal market for the Common Stock is not a national securities exchange and the Common Stock is quoted on the National Association of Securities Dealers Automated Quotations System ("NASDAQ"), and (i) if actual sales price information is available with respect to the Common Stock, the average of the highest and lowest sales prices per share of Common Stock on such day on NASDAQ, or (ii) if such information is not available, the average of the highest bid and lowest asked prices per share of Common Stock on such day on NASDAQ, or (c) if the principal market for the Common Stock is not a national securities exchange and the Common Stock is not quoted on NASDAQ, the average of the highest bid and lowest asked prices per share of Common Stock on such day as reported on the NASDAQ OTC Bulletin Board Service or by National Quotation Bureau, Incorporated or a comparable service; provided, however, that if clauses (a), (b) and (c) of this Paragraph are all inapplicable, or if no trades have been made or no quotes are available for such day, the fair market value of the Common Stock shall be determined by the Board by any method consistent with applicable regulations adopted by the Treasury Department relating to stock options. 6. TERM. The term of each Employee Option and Consultant Option granted pursuant to the Plan shall be such term as is established by the -3- Committee, in its sole discretion, at or before the time such option is granted; provided, however, that the term of each ISO granted pursuant to the Plan shall be for a period not exceeding 10 years from the date of grant thereof; and further, provided, that if, at the time an ISO is granted, the optionee owns (or is deemed to own under Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company, of any of its Subsidiaries or of a Parent, the term of the ISO shall be for a period not exceeding five years from the date of grant. Employee Options and Consultant Options shall be subject to earlier termination as hereinafter provided. Subject to earlier termination as hereinafter provided, each Non-Employee Director Option shall have a term of five years commencing on the date of grant. 7. EXERCISE. An option (or any part or installment thereof), to the extent then exercisable, shall be exercised by giving written notice to the Company at its principal office stating which option is being exercised, specifying the number of shares of Common Stock as to which such option is being exercised and accompanied by payment in full of the aggregate exercise price therefor (or the amount due on exercise if the Contract with respect to an Employee Option permits installment payments) (a) in cash or by certified check or (b) in the case of an Employee Option or a Consultant Option, if the applicable Contract permits, with previously acquired shares of Common Stock having an aggregate fair market value, on the date of exercise, equal to the aggregate exercise price of all options being exercised, or with any combination of cash, certified check or shares of Common Stock. In such case, the fair market value of the Common Stock shall be determined in accordance with Paragraph 5. The Committee may, in its discretion, permit payment of the exercise price of an option by delivery by the optionee of a properly executed notice, together with a copy of his irrevocable instructions to a broker acceptable to the Committee to deliver promptly to the Company the amount of sale or loan proceeds sufficient to pay such exercise price. In connection therewith, the Company may enter into agreements for coordinated procedures with one or more brokerage firms. A person entitled to receive Common Stock upon the exercise of an option shall not have the rights of a shareholder with respect to such shares of Common Stock until the date of issuance of a stock certificate to him for such shares; provided, however, that until such stock certificate is issued, any option holder using previously acquired shares of Common Stock in payment of an option exercise price shall continue to have the rights of a shareholder with respect to such previously acquired shares. In no case may a fraction of a share of Common Stock be purchased or issued under the Plan. 8. TERMINATION OF RELATIONSHIP. Except as may otherwise be expressly provided in the applicable Contract, any holder of an Employee Option whose employment with the Company (and its Parent and Subsidiaries) has terminated for any reason other than his death or Disability (as defined in Paragraph 19) may exercise such option, to the extent exercisable on the date of such termination, at any time within three months after the date of termination, but not thereafter and in no event after the date the option would otherwise have expired; provided, however, that if his employment is terminated either (a) for cause, or (b) without the consent of the Company, such option shall terminate immediately. Except as may otherwise be expressly provided in the applicable Contract, Employee Options granted under the Plan shall not be -4- affected by any change in the status of the holder so long as he continues to be an employee or a consultant of the Company, its Parent or any of the Subsidiaries (regardless of having been transferred from one corporation to another). For the purposes of the Plan, an employment relationship shall be deemed to exist between an individual and a corporation if, at the time of the determination, the individual was an employee of such corporation for purposes of Section 422(a) of the Code. As a result, an individual on military, sick leave or other bona fide leave of absence shall continue to be considered an employee for purposes of the Plan during such leave if the period of the leave does not exceed 90 days, or, if longer, so long as the individual's right to reemployment with the Company (or a related corporation) is guaranteed either by statute or by contract. If the period of leave exceeds 90 days and the individual's right to reemployment is not guaranteed by statute or by contract, the employment relationship shall be deemed to have terminated on the 91st day of such leave. Except as may otherwise be expressly provided in the applicable Contract, the holder of a Consultant Option whose consulting relationship with the Company (and its Parent and Subsidiaries) has terminated for any reason may exercise such option, to the extent exercisable on the date of such termination, at any time within three months after the date of termination, but not thereafter and in no event after the date the option would otherwise have expired; provided, however, that if such relationship was terminated either (a) for cause or (b) without the consent of the Company (other than as a result of the death or Disability of the holder or a key employee of the holder), the option shall terminate immediately. Except as may otherwise be expressly provided in the applicable Contract, Consultant Options granted under the Plan shall not be affected by a change in the relationship, so long as the holder of the option continues to be a consultant of the Company, its Parent or any of its Subsidiaries (regardless of having ceased to be a consultant for any of such corporations). The holder of an Non-Employee Director Option who ceases to be a Non-Employee Director of the Company (and its Parent and Subsidiaries) for any reason may exercise such option, to the extent exercisable on the date of such termination, at any time during its term; provided, however, that if the Non- Employee Director is removed as a director of the Company for cause, the option shall terminate immediately. Nothing in the Plan or in any option granted under the Plan shall confer on any individual any right to continue in the employ or as a consultant of the Company, its Parent or any of its Subsidiaries, or as a director of the Company, or interfere in any way with any right of the Company, its Parent or any of its Subsidiaries to terminate the holder's relationship at any time for any reason whatsoever without liability to the Company, its Parent or any of its Subsidiaries. 9. DEATH OR DISABILITY OF AN OPTIONEE. If an optionee dies (a) while he is employed by the Company, its Parent or any of its Subsidiaries, (b) within three months after the termination of his employment (unless such termination was for cause or without the consent of the Company) or (c) within one year following the termination of his employment by reason of Disability, his Employee Option may be exercised, to the extent exercisable on the date of his death, by his executor, administrator or other person at the time entitled by law to his rights under such option, at any time within one year after -5- death, but not thereafter and in no event after the date the option would otherwise have expired. Any optionee whose employment has terminated by reason of Disability may exercise his Employee Option, to the extent exercisable upon the effective date of such termination, at any time within one year after such date, but not thereafter and in no event after the date the option would otherwise have expired. The term of a Non-Employee Director Option shall not be affected by the death or Disability of the holder. The termination of a Consultant Option as a result of the death or Disability of the holder of the option (or a key employee thereof) shall be governed by Paragraph 8. If the holder of a Non- Employee Director Option or Consultant Option dies during the term of such option, the option may be exercised, to the extent exercisable on the date of his death, at any time during its term by his executor, administrator or other person at the time entitled by law to his rights under such option. 10. COMPLIANCE WITH SECURITIES LAWS. The Committee may require, in its discretion, as a condition to the exercise of any option that either (a) a Registration Statement under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the shares of Common Stock to be issued upon such exercise shall be effective and current at the time of exercise, or (b) there is an exemption from registration under the Securities Act for the issuance of shares of Common Stock upon such exercise. Nothing herein shall be construed as requiring the Company to register under the Securities Act the shares subject to any option. The Committee may require the optionee to execute and deliver to the Company his representations and warranties, in form and substance satisfactory to the Committee, that (a) the shares of Common Stock to be issued upon the exercise of the option are being acquired by the optionee for his own account, for investment only and not with a view to the resale or distribution thereof, and (b) any subsequent resale or distribution of shares of Common Stock by such optionee will be made only pursuant to (i) a Registration Statement under the Securities Act which is effective and current with respect to the shares of Common Stock being sold, or (ii) a specific exemption from the registration requirements of the Securities Act, but in claiming such exemption, the optionee shall, prior to any offer of sale or sale of such shares of Common Stock, provide the Company with a favorable written opinion of counsel, in form and substance satisfactory to the Company, as to the applicability of such exemption to the proposed sale or distribution. In addition, if at any time the Committee shall determine in its discretion that the listing or qualification of the shares of Common Stock subject to such option on any securities exchange or under any applicable law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition to, or in connection with, the granting of an option or the issue of shares of Common Stock thereunder, such option may not be exercised in whole or in part unless such listing, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee. 11. STOCK OPTION CONTRACTS. Each option shall be evidenced by an appropriate Contract which shall be duly executed by the Company and the optionee, and shall contain such terms and conditions not inconsistent herewith as may be determined by the Committee. -6- 12. ADJUSTMENTS UPON CHANGES IN COMMON STOCK. Notwithstanding any other provision of the Plan, in the event of any change in the outstanding Common Stock by reason of a stock dividend, recapitalization, merger in which the Company is the surviving corporation, split-up, combination or exchange of shares or the like, the aggregate number and kind of shares subject to the Plan, the aggregate number and kind of shares subject to each outstanding option and the exercise price thereof, and the number and kind of shares subject to future Non-Employee Director Options and the 162(m) Maximum shall be appropriately adjusted by the Board of Directors, whose determination shall be conclusive. In the event of (a) the liquidation or dissolution of the Company, or (b) a merger in which the Company is not the surviving corporation or a consolidation involving the Company, any outstanding options shall terminate, unless other provision is made therefor in the transaction. 13. AMENDMENTS AND TERMINATION OF THE PLAN. The Plan was adopted by the Board of Directors on August 10, 1994 and was amended by the Board of Directors on July 17, 1995. No option may be granted under the Plan after August 9, 2004. The Board of Directors, without further approval of the Company's shareholders, may at any time suspend or terminate the Plan, in whole or in part, or amend it from time to time in such respects as it may deem advisable, including, without limitation, in order that ISOs granted hereunder meet the requirements for "incentive stock options" under the Code, to comply with the provisions of Rule 16b-3 promulgated under the Exchange Act or Section 162(m) of the Code, and to conform to any change in applicable law or to regulations or rulings of administrative agencies; provided, however, that no amendment shall be effective without the requisite prior or subsequent shareholder approval which would (a) except as contemplated in Paragraph 12, increase the maximum number of shares of Common Stock for which options may be granted under the Plan or change the 162(m) Maximum, (b) materially increase the benefits to participants under the Plan or (c) change the eligibility requirements to receive options hereunder. Notwithstanding the foregoing, the provisions regarding the selection of directors for participation in, and the amount, the price or the timing of, Non-Employee Director Options shall not be amended more than once every six months, other than to comport with changes in the Code, the Employee Retirement Income Security Act or the rules thereunder. No termination, suspension or amendment of the Plan shall, without the consent of the holder of an existing option affected thereby, adversely affect his rights under such option. The power of the Committee to construe and administer any options granted under the Plan prior to the termination or sus- pension of the Plan nevertheless shall continue after such termination or during such suspension. 14. NON-TRANSFERABILITY OF OPTIONS. No option granted under the Plan shall be transferable otherwise than by will or the laws of descent and distribution, and options may be exercised, during the lifetime of the holder thereof, only by him or his legal representatives. Except to the extent provided above, options may not be assigned, transferred, pledged, hypothecated or disposed of in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. 15. WITHHOLDING TAXES. The Company may withhold cash and/or shares of Common Stock to be issued with respect thereto having an aggregate fair market value equal to the amount which it determines is necessary to satisfy its obligation to withhold Federal, state and local income taxes or other amounts incurred by reason of the grant or exercise of an option, its disposition, or the disposition of the underlying shares of Common Stock. -7- Alternatively, the Company may require the holder to pay to the Company such amount, in cash, promptly upon demand. The Company shall not be required to issue any shares of Common Stock pursuant to any such option until all required payments have been made. Fair market value of the shares of Common Stock shall be determined in accordance with Paragraph 5. Notwithstanding anything in the Plan or in any Contract to the contrary, the Company may not withhold shares of Common Stock to satisfy the tax withholding consequences of the exercise of an option by a holder who is subject to the reporting requirements of Section 16(a) of the Exchange Act (as it constitutes a deemed exercise of a stock appreciation right ("SAR") under Rule 16b-3 under the Exchange Act), unless (a) the Company has filed all periodic reports and statements required to be filed by it pursuant to Section 13(a) of the Exchange Act for at least one year prior to the date of such exercise, (b) the Company on a regular basis releases for publication quarterly and annual summary statements of sales and earnings in the manner contemplated in the rules promulgated under Section 16 of the Exchange Act, (c) except when the date of exercise of such SAR is automatic or fixed in advance under the Plan and is outside the control of the holder, the election by such holder to receive cash in full or partial settlement of the SAR, as well as the exercise of the SAR for cash, is made during the period beginning on the third business day following the date of release of the summary statements referred to in clause (b) and ending on the 12th business day following such date, and (d) the option has been held for at least six months from the date of grant to the date of cash settlement. Any holder subject to the reporting requirements of Section 16(a) of the Exchange Act may request the Committee to withhold shares only if the option is exercised within the applicable period prescribed above. 16. LEGENDS; PAYMENT OF EXPENSES. The Company may endorse such legend or legends upon the certificates for shares of Common Stock issued upon exercise of an option under the Plan and may issue such "stop transfer" instructions to its transfer agent in respect of such shares as it determines, in its discretion, to be necessary or appropriate to (a) prevent a violation of, or to perfect an exemption from, the registration requirements of the Securities Act, (b) implement the provisions of the Plan or any agreement between the Company and the optionee with respect to such shares of Common Stock, or (c) permit the Company to determine the occurrence of a "disqualifying disposition," as described in Section 421(b) of the Code, of the shares of Common Stock transferred upon the exercise of an ISO granted under the Plan. The Company shall pay all issuance taxes with respect to the issuance of shares of Common Stock upon the exercise of an option granted under the Plan, as well as all fees and expenses incurred by the Company in connection with such issuance. 17. USE OF PROCEEDS. The cash proceeds from the sale of shares of Common Stock pursuant to the exercise of options under the Plan shall be added to the general funds of the Company and used for corporate purposes as the Board of Directors may determine. 18. SUBSTITUTIONS AND ASSUMPTIONS OF OPTIONS OF CERTAIN CONSTITUENT CORPORATIONS. Anything in this Plan to the contrary notwithstanding, the Board of Directors may, without further approval by the shareholders, substitute new options for prior options of a Constituent Corporation (as defined in Paragraph 19) or assume the prior options of such Constituent Corporation. -8- 19. DEFINITIONS. (a) Subsidiary. The term "Subsidiary" shall have the same definition as "subsidiary corporation" in Section 424(f) of the Code. (b) Parent. The term "Parent" shall have the same definition as "parent corporation" in Section 424(e) of the Code. (c) Constituent Corporation. The term "Constituent Corporation" shall mean any corporation which engages with the Company, its Parent or any Subsidiary in a transaction to which Section 424(a) of the Code applies (or would apply if the option assumed or substituted were an ISO), or any Parent or any Subsidiary of such corporation. (d) Disability. The term "Disability" shall mean a permanent and total disability within the meaning of Section 22(e)(3) of the Code. (e) Employee Option. The term "Employee Option" shall mean an option granted pursuant to the Plan to an individual who, at the time of grant, is a key employee of the Company or a Subsidiary of the Company. (f) Consultant Option. The term "Consultant Option" shall mean a NQSO granted pursuant to the Plan to a person who, at the time of grant, is a consultant to Company or a Subsidiary of the Company, and at such time is nei- ther a common law employee of the Company or any of its Subsidiaries nor a director of the Company. (g) Non-Employee Director Option. The term "Non-Employee Director Option" shall mean a NQSO granted pursuant to the Plan to a person who, at the time of the grant, is a Non-Employee Director. (h) Non-Employee Director. The term "Non-Employee Director" shall mean an individual who is a director of the Company, but is not a common law employee of the Company or of any of its Subsidiaries. 20. GOVERNING LAW. The Plan, such options as may be granted hereunder and all related matters shall be governed by, and construed in accordance with, the laws of the State of New Jersey, without regard to conflict of law provisions. 21. PARTIAL INVALIDITY. The invalidity or illegality of any provision herein shall not affect the validity of any other provision. 22. SHAREHOLDER APPROVAL. The amendment to the Plan shall be subject to approval by the affirmative vote, in person or by proxy, of a majority of all outstanding shares of the Company at the next duly held meeting of the Company's shareholders at which a quorum is present. No options granted pursuant to the amendment may be exercised prior to such approval, provided that the date of grant of any options granted thereunder shall be determined as if the amendment to the Plan had not been subject to such approval. Notwithstanding the foregoing, if the amendment to the Plan is not approved by a vote of the shareholders of the Company on or before July 16, 1996, the amendment and any options granted thereunder shall terminate, but the Plan as in effect prior to the amendment and all options granted thereunder shall remain in full force and effect. -9- EX-10 5 EXHIBIT 10.30 SHARE PURCHASE AGREEMENT (EBA) ------------------------------ MARC KEGELAERS AND MICROFRAME EUROPE N.V. September 15, 1995 SHARE PURCHASE AGREEMENT THIS SHARE PURCHASE AGREEMENT made the 15th day of September, 1995 between Marc Kegelaers, an individual residing at Tuyaertsstraat 32, B-2850 B00M, Belgium ("Kegelaers" or the "Seller"), and MicroFrame Europe N.V., a corporation existing under the laws of Belgium (the "Purchaser"), with its registered office at Tuyaertsstraat 32, B-2850 B00M and registered with the Commercial Register of Antwerpen duly represented by Lonnie L. Sciambi, Chairman of the Board. W I T N E S S E T H WHEREAS, the Corporation (as hereinafter defined) is a marketing organization engaged in the business of creating and managing distribution networks and original equipment manufacturer relations for suppliers to the telecommunications industry; and WHEREAS, all of the issued and outstanding shares of capital stock of the Corporation are directly owned by the Seller; and WHEREAS, the Seller has agreed to sell to the Purchaser and the Purchaser, in reliance upon the representations and warranties of the Seller contained herein, has agreed to purchase from the Seller all of the issued and outstanding shares of capital stock of the Corporation, in accordance with the terms and conditions of this Agreement; NOW THEREFORE, in consideration of the premises and the mutual covenants contained in this Agreement and other valuable consideration (the receipt and adequacy of which is hereby acknowledged by each of the Parties, as hereinafter defined), the Parties agree as follows: ARTICLE 1 INTERPRETATION 1.01 Defined Terms. As used in this Agreement, the following terms have the following meanings: " A c counts Receivable" means all accounts receivable, notes receivable and other debts due or accruing to the Corporation in connection with the Business as more particularly set out in Schedule 1.01(a); "Agreement" means this share purchase agreement and all schedules and instruments in amendment or confirmation of it; "hereof", "hereto" and "hereunder" and similar expressions mean and refer to this Agreement and not to any particular Article, Section, Subsection, Schedule or other subdivision; "Article", "Section", "Subsection", "Schedule" or other subdivision of this Agreement followed by a number means and refers to the specified Article, Section, Subsection, Schedule or other subdivision of this Agreement; "Assets" means all property and assets of the Corporation of every kind and wherever situated as set forth on the Financial Statements or acquired in the ordinary course of business since the date of such Financial Statements through the date hereof; -1- " Authorization" means, with respect to any Person, any authorization, order, permit, approval, grant, license, consent, right, franchise, privilege, certificate, judgment, writ, injunction, award, decree, or by-law, rule or regulation of any Governmental Entity, whether or not having the force of law, having jurisdiction over such Person; "Benefit Plans" means all employee benefit plans relating to the employees of the Corporation, including profit sharing, deferred compensation, phantom stock option, stock option, employee stock purchase, bonus, retirement, health or insurance plans which are disclosed as benefit plans on Schedule 3.01(ff)(v); "Billing Period" means each of the five "rolling" twelve (12) month periods commencing on the first anniversary of the Closing Date and on each of the four (4) anniversary dates thereafter, each of such periods to include an additional period of ninety (90) days following its scheduled expiration to collect the Europe Revenues generated during such period, which if not collected during said 90-day period shall be deemed relinquished by Seller, and shall not carryforward to the next billing period. "Books and Records" means, if applicable, all technical, business and financial records, financial books and records of account, books, data, reports, files, lists, drawings, plans, logs, briefs, customer and supplier lists, deeds, certificates, contracts, surveys, title opinions or any other documentation including the Corporate Records and information in any form whatsoever (including written, printed, electronic or computer printout form) relating to the Business; "Business" means the business presently carried on by the Corporation consisting of the creating and managing of distribution networks and original equipment manufacturer relations for suppliers to the telecommunications industry; "Business Day" means any day of the year, other than a Saturday, Sunday or any day which is declared a public holiday in Belgium; "Cash Earn Out" means the portion of the Purchase Price referred to in Section 2.02(iii) hereof and paid in accordance with Section 2.03 hereof; "Claim" means any claim of any nature whatsoever, including any demand, liability, obligation, debt, cause of action, suit, proceeding, judgment, award, assessment, and reassessment; "Closing" means the completion of the transaction of purchase and sale contemplated in this Agreement; "Closing Date" means the date upon which the Closing has occurred; "Consents" means the consents of contracting parties to any Contracts which are required thereunder with respect to the transactions contemplated in this Agreement, and "Consent" means any one of such Consents; "Consulting Agreement" shall mean the consulting agreement of even date herewith between Kegelaers and MicroFrame Europe N.V.; "Contracts" means all contracts through the date hereof to which the Corporation is a party including all contracts, leases, licenses, undertakings, engagements or commitments of any nature, written or oral, which the Corporation has entered into in connection with the Business; -2- "Corporate Records" means the corporate records of the Corporation, including (i) the certificate of incorporation, if any, by-laws, any unanimous shareholders agreement and any amendments thereto; (ii) all minutes of meetings and resolutions of shareholders, directors and any committee thereof; (iii) the share certificate books, register of shareholders and register of transfers; and (iv) all accounting records, including without limitation all records relating to the Financial Statements; " Corporation" means European Business Associates BVBA, a corporation existing under the laws of Belgium with its registered office at Tuyaertsstraat 32, 2850 B00M, registered with the Commercial Register of Antwerpen under the number 276751; "Effective Time" means 3:00 p.m. on the Closing Date; "Encumbrances" means liens, charges, mortgages, pledges, security interests, claims, defects of title, restrictions and any other rights of third parties relating to any property, including rights of set-off and voting trusts, and other encumbrances of any kind; "European Revenues"means the cash revenues of the Purchaser and the Parent Corporation generated and collected as a result of any sales from the European Countries set out on Schedule 1.01(b) hereof; "Financial Statements" means the nonaudited balance sheet of the Corporation for the fiscal year ended December 31, 1994 and the six month period ended June 30, 1995 and the accompanying statements of income and retained earnings and changes in financial position for the period then ended and all notes thereto; "GAAP" means at any time, generally accepted accounting principles in Belgium and the European Union; " Governmental Entity" means (i) any multinational, federal, provincial, state, municipal, local or other governmental or public department, court, commission, board, bureau, agency or instrumentality, domestic or foreign; (ii) any subdivision, agent, commission, board, or authority of any of the foregoing; or (iii) any quasigovernmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing; "Intellectual Properties" means any and all right, title, interest and benefit of the Corporation in and to any registered or unregistered world marks, trade or brand names, service marks, copyrights, copyright applications, designs, inventions, patents, patent applications, patent rights (including any patents issuing on such applications or rights), licenses, sub-licenses, franchises, technology, computer rights and other intellectual or industrial property other than know how; "Laws" means all statutes, codes, ordinances, decrees, rules, regulations, municipal by-laws, judicial or arbitral or administrative or ministerial or departmental or regulatory judgments, orders, decisions, rulings or awards, policies, guidelines or any provisions of the foregoing, including general principles of common and equity, binding on or affecting the Person referred to in the context in which such word is used; and "Law" means any one of them; "Leased Properties" means the real properties forming the subject matter of the Property Lease at the municipal address listed in Schedule 3.01(v); -3- "Letter Agreement" means the letter of agreement entered into on May 31, 1995 among the Purchaser, the Corporation and Kegelaers; "Lien" means, through the date hereof, any bailment, assignment, levy, execution, seizure, attachment, garnishment, security interest, ownership interest or with respect to ownership interest created by permitted encumbrances, mortgage, charge, pledge, lien, or other encumbrance whatsoever, whether fixed or floating and howsoever created or arising; "Loss" means any loss whatsoever, including expenses, costs, damages, penalties, fines, charges, claims, demands, liabilities, interest and any and all reasonable legal fees and disbursements; " Parent Corporation" means MicroFrame, Inc., a corporation organized under the laws of the State of New Jersey, which corporation owns 124 shares of capital stock of the Purchaser; "Parties" means the Seller and the Purchaser; and "Party" means any one of them; "Person" means an individual, partnership, corporation, trust, unincorporated association, joint venture or other entity or Governmental Entity, and pronouns have a similarly extended meaning; "Property Lease" means the lease of real property to which the Corporation is a party, as listed and described in Schedule 3.01(v); "Purchase Price" has the meaning ascribed thereto in Section 2.02; "Purchased Shares" means 100 shares of capital stock, no par value of the Corporation, being all of the issued and outstanding shares of the Corporation; "Purchaser" means MicroFrame Europe N.V., a corporation existing under the laws of Belgium; "Purchaser Stock" means "restricted" shares (as such term is defined in Rule 144 of the Securities Act of 1933) of the Common Stock, $.001 par value, of the Parent Corporation; "Seller" shall have the same meaning set forth in the preamble to this Agreement; "Share Earn Out" means the portion of the Purchase Price referred to in Section 2.02(iv) hereof and paid in accordance with Section 2.04 hereof; Definitions set forth in any Schedule are incorporated herein by reference. 1.02 Gender and Number. Any reference in this Agreement to gender shall include all genders, and words importing the singular number only shall include the plural and vice versa. 1.03 Headings, Etc. The division of this Agreement into Articles, Sections, Subsections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in the construction or interpretation of this Agreement. -4- 1.04 Currency. All references in this Agreement to dollars are expressed in U.S. currency. 1.05 Severability. Any Article, Section, Subsection or other subdivision of this Agreement or any other provision of this Agreement which is, or becomes, illegal, invalid or unenforceable shall be severed from this Agreement and be ineffective to the extent of such illegality, invalidity or unenforceability and shall not affect or impair the remaining provisions hereof. 1.06 Entire Agreement. This Agreement together with the Consulting Agreement constitutes the entire agreement between the Parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties including, without limitation, the Letter Agreement dated May 31, 1995 among the Purchaser, Kegelaers and the Corporation. There are no representations, warranties, conditions or other agreements, express or implied, statutory or otherwise, between the Parties in connection with the subject matter of this Agreement, except as specifically set forth herein. 1.07 Amendments. This Agreement may only be amended, modified or supplemented by a written agreement signed by all of the Parties. 1.08 Waiver. No waiver of any of the provisions of this Agreement shall be deemed to constitute a waiver of any other provision (whether or not similar), nor shall such waiver constitute a waiver or continuing waiver unless otherwise expressly provided in writing duly executed by the Party to be bound thereby. 1.09 Governing Law; Consent to Jurisdiction; Venue. This Agreement shall be governed by and construed and enforced in accordance with the laws of Belgium. Each party hereby waives personal service of any summons, complaint or other process, which may be delivered by any of the means permitted for notices under Section 9.02 hereof. In addition, without limiting the foregoing, the Seller hereby appoints Jan Bergmans, Esq., Eikenstraat 80, B2840 Rumst, Belgium, counsel to the Seller, to receive, for him and on his behalf, service of process with respect to any dispute between the Seller and the Purchaser arising under or related to this Agreement or the Consulting Agreement. In addition, the Purchaser hereby appoints David Gillet, Esq., Loeff Claeys Verbeke, Avenue de Tervueren 268A, 1150 Brussels, Belgium, counsel to the Purchaser, to receive, for it and on its behalf, service of process with respect to any dispute between the Seller and the Purchaser arising under or related to this Agreement. Service of process upon such authorized agents shall be deemed, in every respect, effective service of process upon the Seller or the Purchaser, as the case may be. 1.10 Inclusion. Where the word "including" or "includes" is used in this Agreement it means "including (or includes) without limitation". 1.11 Accounting Terms. All accounting terms not specifically defined in this Agreement shall be construed in accordance with GAAP. 1.12 Incorporation of Schedules. The following are the schedules attached to and incorporated in this Agreement: Schedule 1.01(a) - Accounts Receivable (including Overdue Accounts Receivable) Schedule 1.01(b) - European Countries -5- Schedule 2.04 - Share Earn Out Schedule 3.01(p) - Authorizations Schedule 3.01(v) - Leased Properties Schedule 3.01(y) - Indebtedness Schedule 3.01(w) - Material Contracts Schedule 3.01 (aa) - Personal Property Schedule 3.01(ee) - Financial Commitments to Seller Schedule 3.01(ff) - Employees and Compensation Schedule 3.01(ff)(v) - Benefit Plans Schedule 3.01(hh) - Insurance Policies Schedule 3.01(kk) - Bank Accounts and Powers of Attorney ARTICLE 2 PURCHASED ASSETS AND PURCHASE PRICE 2.01 Purchase and Sale. Subject to the terms and conditions hereof, the Seller agrees to sell, assign and transfer to the Purchaser and the Purchaser agrees to purchase from the Seller on the Closing Date, the Purchased Shares. 2.02 Purchase Price. The aggregate purchase price (the "Purchase Price") payable by the Purchaser to the Seller for the Purchased Shares shall be (i) an aggregate amount of U.S.$50,000; (ii) an aggregate amount of 25,000 shares of Purchaser Stock; (iii) the Cash Earn Out amount calculated in accordance with Section 2.03; and (iv) the Share Earn Out amount calculated in accordance with Section 2.04. 2.03 Payment of the Cash Earn Out. Subject to compliance by Seller with the terms and conditions contained herein and compliance by Kegelaers with the terms and conditions of the Consulting Agreement, for each of the five (5) Billing Periods, the Purchaser shall pay to the Seller an aggregate amount of .5% (one-half of one percent) of European Revenues generated and collected during the applicable Billing Period, to be paid no later than thirty (30) days following each of the Billing Periods. 2.04 Payment of the Share Earn Out. Subject to compliance by Seller with the terms and conditions contained herein and compliance by Kegelaers with the terms and conditions of the Consulting Agreement, for each of the five (5) Billing Periods, the Purchaser shall cause the Parent Corporation, to pay to the Seller an aggregate amount of one (1) share of Purchaser Stock for the amount of European Revenues set forth in column B of Schedule 2.04 hereto for each of the respective Billing Periods set forth in column A of Schedule 2.04 hereto, provided that no payment of Purchaser Stock will be made for any particular Billing Period pursuant to this paragraph 2.04 unless the European Revenues during such period exceed the minimum thresholds listed in column C to Schedule 2.04 hereto with respect to such period. Payments shall be made no later than thirty (30) days following each of the Billing Periods. -6- 2.05 Death of the Seller. In the event of the death of the Seller and provided that the Seller is not in default hereunder or under the Consulting Agreement, the estate of the Seller shall be entitled to receive, and the Company will pay to such estate, all amounts the Seller would have been entitled to receive under this Agreement. ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE SELLER 3.01 Representations and Warranties of the Seller. The Seller represents as follows to the Purchaser and acknowledges and confirms that the Purchaser is relying upon such representations and warranties in connection with the purchase by the Purchaser of the Purchased Shares. Corporate Matters Relating to the Seller and the Corporation (a) Due Incorporation and Existence of the Corporation. The Corporation is a corporation duly incorporated and validly existing and in good standing under the laws of Belgium. (b) Corporate Power. The Corporation has the corporate power and authority to own its property and to carry on the Business as now being conducted by it. (c) Qualification. The Corporation is duly qualified, licensed or registered to carry on business as a corporation in Belgium and in all jurisdictions in which the nature of the Assets or the Business makes such qualification necessary and where failure to so qualify would have a material adverse effect on the affairs, assets, liabilities, business or prospects, operations or conditions of the Corporation or the Business, financial or otherwise. (d) Authorized Capital. The authorized capital of the Corporation consists of 100 shares of capital stock, no par value, of which at the date hereof, 100 shares (and no more) have been duly issued and are outstanding as fully paid and non-assessable. Immediately prior to Closing, the Seller will be the registered and beneficial owner of an aggregate of 100 outstanding shares of capital stock, no par value, of the Corporation which will be all of the issued and outstanding shares of the Corporation. (e) Options, etc. Except for the Purchaser's rights hereunder, no Person has any option, warrant, right, call, commitment, conversion right, right of exchange or other agreement or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an option, warrant, right, call, commitment, conversion right, right of exchange or other agreement (i) for the purchase from the Seller of any of the Purchased Shares applicable to such Seller; or (ii) for the purchase, subscription, allotment or issuance of any of the unissued shares in the capital of the Corporation or of any securities of the Corporation. (f) Title to Purchased Shares. The Seller is the registered and beneficial owner of the Purchased Shares with good title thereto, free and clear of all Encumbrances. The Seller has the right, power and authority to enter into this Agreement and to sell the Purchased Shares as contemplated herein. The delivery to the Purchaser by the Seller of the Purchased Shares pursuant to the provisions hereof will transfer to the Purchaser valid title thereto, free and clear of all Encumbrances, with all -7- taxes attributable to the transfer of the Purchased Shares, excluding income taxes, paid or provided for. (g) Dividends, Distributions and Remuneration. Since December 31, 1994, the Corporation has not, directly or indirectly, declared or paid any dividends or declared or made any other distribution on any of its shares of any class and has not, directly or indirectly, redeemed, purchased or otherwise acquired any of its shares of any class or agreed to do so and has not paid bonuses or salary in excess of those amounts set forth in Schedule 3.01(ff) (h) Corporate Records. The Corporate Records of the Corporation are complete and accurate in all material respects and all corporate proceedings and actions of the Business reflected therein have been conducted or taken in compliance with all applicable Laws and with the Certificate of Incorporation and by-laws of the Corporation, and without limiting the generality of the foregoing, to knowledge of the Seller, (i) the minute books contain complete and accurate in all material respects minutes of all meetings of the shareholders of the Corporation held since the incorporation of the Corporation, and all such meetings were duly called and held; (ii) the minute books contain all written resolutions passed or ratified by the shareholders of the Corporation and all such resolutions were duly passed or ratified; (iii) the register of shareholders is complete and accurate in all material respects, and all such transfers have been duly completed and approved and any exigible tax payable in connection with the transfer of any securities of the Corporation has been duly paid; and (iv) all former and present directors and officers of the Corporation were duly elected or appointed as the case may be. (i) Validity of Agreement. The execution, delivery and performance by the Seller of this Agreement and the consummation of the transactions contemplated hereby do not (or would not with the giving of notice, the lapse of time or the happening of any other event or condition) result in a violation or a breach of, or a default under or give rise to a right of termination, amendment or cancellation or the acceleration of any obligation under (A) any charter or by-law instruments of the Corporation; (B) any contracts or instruments to which either the Seller or the Corporation is a party or by which either the Seller or the Corporation is bound; or (C) of any Laws applicable to either the Seller or the Corporation. This Agreement constitutes a legal, valid and binding obligation of the Seller enforceable against him in accordance with its terms. (j) Restrictive Documents. Neither the Corporation nor the Seller is subject to, or a party to, any charter or by-law restriction, any Law, any Claim, any contract or instrument, any Encumbrance or any other restriction of any kind or character which would prevent the consummation of the transactions contemplated by this Agreement or compliance with the terms, conditions and provisions hereof or the continued operation of the Business by the Corporation after the Closing Date on substantially the same basis as heretofore operated, or which would restrict the ability of the Purchaser to acquire any of the Purchased Shares or to cause the Corporation to conduct the Business in any area in each case except for the necessity of obtaining the Consents. (k) Acquisition of Purchaser Stock for Investment. The Seller is acquiring the Purchaser Stock pursuant to Sections 2.02 and 2.04 hereof for investment and not with a view toward, or for the resale in connection with, any distribution thereof, nor with any present intention of distributing or selling such Purchaser Stock. The Seller understands that the Purchaser Stock has not been registered under the Securities Act of 1933, as -8- amended ("Securities Act"). The Seller agrees that such Purchaser Stock may not be sold publicly, transferred, offered for sale, pledged, hypothecated or otherwise disposed of within or outside the United States and must be held unless it is subsequently registered under the Securities Act or unless an exemption from registration is available under the Securities Act. General Matters Relating to the Business (l) Conduct of Business in Ordinary Course. Since June 30, 1995, the Business has been carried on in the ordinary course and the Corporation has not: (i) incurred any liability or obligation of any nature (whether accrued, absolute, contingent or o t h e rwise), which individually or in the aggregate exceeded US $5,000; (ii) sold, transferred or otherwise disposed of any of the Assets; (iii) made any material capital expenditure or commitment therefor which individually or in the aggregate exceeds US $5,000; (iv) made any bonus or profit sharing payment or distribution of profits by way of dividend or otherwise; (v) increased its indebtedness for borrowed money, or made any loan to any Person; (vi) wrote off as uncollectible any notes or Accounts Receivable, except write-offs in the ordinary course of the business charged to applicable reserves, none of which individually or in the aggregate is material to the Corporation; (vii) permitted any of the Assets to be subject to any Encumbrances; (viii) canceled or waived any material claims or material rights; (ix) granted any general increase in the rate of wages, salaries, bonuses, or other remuneration of any executive or other employee; (x) made any change in any method of accounting or auditing practice; (xi) entered into any non-arms-length transaction; (xii) amended the articles or by-laws of the Corporation; or (xiii) agreed, whether or not in writing, to do any of the foregoing. (m) No Material Adverse Change. Since June 30, 1995, there has been no change in the affairs, assets, liabilities, business, prospects, -9- operations or conditions of the Corporation or the Business, financial or otherwise, whether arising as a result of any legislative or regulatory change, revocation of any license or right to do business, fire, explosion, accident, casualty, labor trouble, flood, drought, riot, storm, condemnation, act of God, public force or otherwise, which has materially adversely affected or which may materially adversely affect the Corporation or the Business, except for general economic conditions affecting Europe or the industry in which the Corporation or the Business operates. (n) Compliance with Laws. The Corporation is conducting the Business in compliance with all applicable laws of each jurisdiction in which the Business is carried on. (o) Environmental Compliance. The Corporation has, since its incorporation through the date hereof, never at any time received, handled, generated, used, stored, deposited, labeled, handled, treated, documented, transported or disposed of any hazardous substances except in accordance with applicable law. Neither the Seller nor the Corporation has received notice that any of the Leased Properties are subject to any material environmental contamination including any patent or latent environmental contamination of the atmosphere, air, soil, subsoil, ground water or surface waters within or adjacent to the Leased Properties, or that any of the Leased Properties contain any asbestos, urea formaldehyde foam insulation or polychlorinated byphenyls (PCBs). (p) Authorizations. The Corporation owns, holds, possesses or lawfully uses in the operation of the Business all Authorizations which are in any manner reasonably necessary for it to conduct the Business as presently conducted or for the ownership and use of the Assets as used by the Corporation, free and clear of all Encumbrances and in compliance with all laws applicable thereto. All such Authorizations which are material to the conduct of the Business or the ownership or use by the Corporation of the Assets are listed and described in Schedule 3.01(p) and the Corporation is not in default, nor has it received any notice of any Claim in default, with respect to any such Authorizations. None of such Authorizations will be adversely affected by the consummation of the transactions contemplated hereby. None of the Seller owns or has any proprietary, financial or other interests (direct or indirect) in any Authorization which the Corporation owns, possesses or uses in the operation of the Business as now or previously conducted. Matters Relating to the Assets (q) Title to the Assets. The Corporation has good title to all of the Assets. The Corporation has legal and beneficial ownership of the Assets free and clear of all Encumbrances. (r) No Options, Etc. No Person has any written or oral agreement, option, understanding or commitment, or any right or privilege capable of becoming such for the purchase from the Corporation of any of the Assets, other than pursuant to purchase orders or other similar documents accepted by the Corporation in the ordinary course of the Business. (s) Collectibility. Accounts Receivable and amounts owing to the Corporation by third parties are bona fide and collectible in full without any offset or any other Claims. (t) Liabilities. Except for those liabilities set forth on the Financial Statements and for those liabilities incurred in the ordinary course of business since the date of such Financial Statements or which are otherwise disclosed herein, the Corporation is not subject to any liabilities, -10- absolute or contingent, and whether or not required in accordance with the applicable accounting Laws of Belgium to be disclosed on a balance sheet. (u) Real Property. The Corporation is not the owner of, or under any agreement or option to own, any real property or any interest therein. (v) Validity of Property Lease. The Corporation is not a party to, or under any agreement or option to become a party to, any lease with respect to real property or furnishings used or to be used in its Business, other than the Property Lease. With respect to the Property Lease, (i) all rents and additional rents due to the date hereof have been paid, (ii) neither the lessor nor the lessee is in default thereunder, (iii) no waiver, indulgence or postponement of the lessee's obligations thereunder has been granted by the lessor, (iv) there exists no event of default or event, occurrence, condition or act (including the purchase of the Purchased Shares hereunder) which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default under such Property Lease, (v) the Corporation has not violated any of the terms or conditions under the Property Lease in any material respect, and (vi) all of the covenants, if any, to be performed by any other party under any such Property Lease have been fully performed. Schedule 3.01(v) contains a true, correct and complete copy of the terms of the Property Lease. (w) Material Contracts. All of the material Contracts of the Corporation are listed on Schedule 3.01(w) hereof and except for such Contracts and the Contracts listed in Schedules 3.01(ff) and 3.01(y) together with the Property Lease, and the insurance policies set forth in Schedule 3.01(hh) , which constitute all the material Contracts of the Corporation, the Corporation is not a party to or bound by any other: (i) employment agreement, bonus, deferred compensation, pension, profit sharing, stock option, phantom stock plan, employee stock purchase, health, insurance, retirement or other employee benefit plan, any collective agreements or any agreement (oral or written) providing for compensation to be paid to any employee upon the sale of any substantial portion of outstanding shares in the capital of the Corporation; (ii) agreement or commitment relating to the borrowing of money; (iii) agreement or commitment relating to capital expenditures; (iv) loan or advance to, or investment in, any other Person or any agreement or commitment relating to the making of any such loan, advance or investment; (v) bonds, debentures, mortgages, notes or other similar indebtedness or liabilities whatsoever or any agreement to create or issue any bonds, debentures, mortgages, notes or other similar indebtedness; -11- (vi) guarantee or other contingent liability in respect of any indebtedness or obligation of any other Person; (vii) management, consulting or any other similar agreement or commitment; (viii) agreement or commitment limiting the freedom of the Corporation or the owner of the Assets or the Business to engage in any line of business or to compete with any other Person; (ix) licensing or other agreement or commitment relating to intellectual property used by the Corporation in the conduct of the Business; (x) agreement or commitment on a non-arm's length basis; (xi) agreement or commitment not entered into in the ordinary course of the Business; and (xii) agreement, arrangement, commitment or understanding with any Person, whether written or oral, implied or otherwise, that is not recorded in the Books and Records of the Corporation; There are no Consents required in connection with the transactions contemplated hereunder except as described in Schedule 3.01(p) and 3.01(w). (x) No Breach of Contracts. Each of the Contracts is in full force and effect and there exists no default or event of default or event, occurrence, condition or act (including the purchase of the Purchased Shares hereunder) which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default or event of default thereunder. The Corporation has not violated or breached, in any respect, any of the terms or conditions of any Contract and all the covenants to be performed by any other party thereto have been fully performed. True, correct and complete copies of all Contracts in writing have been delivered or made available to the Purchaser. (y) Indebtedness. Schedule 3.01(y) contains a complete and accurate list of all third party funders to whom the Corporation is indebted. The contracts and other instruments reflecting such indebtedness are all of the contracts and such instruments to which the Corporation is a party pertaining to the borrowing of money by the Corporation. All such contracts and instruments are in full force and effect, no default exists thereunder and all contracts and instruments pertaining thereto are reflected in the Books and Records of the Corporation. (z) Intellectual Property Rights. The Corporation does not use, license or own any material Intellectual Properties in whole or in part and no Intellectual Properties are required for the carrying on of the Business in the manner heretofore carried on. The conduct of the Business does not infringe upon the Intellectual Properties of any Person. (aa) Condition of Equipment and Vehicles. All tangible personal property forming part of the Assets, including furniture, machinery and equipment and motor vehicles, whether owned or leased, are set forth in -12- Schedule 3.01 (aa), are in good operating condition and are in a state of good repair and maintenance. (bb) Subsidiaries. The Corporation has no subsidiaries or agreements of any nature to acquire any subsidiary or to acquire any other business. Financial Matters (cc) Books and Records. All Books and Records of the Corporation have been fully, properly and accurately kept and completed in all material respects. The Corporation's records, systems, controls, data or information are under the exclusive ownership and direct control of the Corporation. (dd) Financial Statements. The Financial Statements have been prepared in accordance with the applicable accounting principles of Belgium, are consistent with those of previous fiscal years, are true and correct in all respects and present fairly the financial position of the Corporation as at December 31, 1994. (ee) Commitments to Seller. The amounts and details of all financial commitments owed by the Corporation to the Seller are set out in Schedule 3.01(ee) hereof which represents any outstanding obligation of the Corporation payable by the Corporation to the Seller as of the date hereof. Particular Matters Relating to the Business (ff) Employees. (i) The Corporation is in compliance with all Laws respecting employment and employment practices, terms and conditions of employment and has not and is not engaged in any unfair labor practice. (ii) No unfair labor practice, complaint or grievance against the Corporation is pending or is threatened before any labor relations board or similar Governmental Entity with respect to the Business. (iii) There is no labor strike, dispute, slowdown or stoppage actually pending or threatened against the Corporation with respect to the Business. (iv) No union representation question exists respecting the employees of the Corporation in connection with the Business. (v) The Corporation has never maintained or contributed to any employee benefit plans other than the Benefit Plans as set out in Schedule 3.01(ff)(v); (vi) No grievance which might have an adverse effect upon the Corporation or the conduct of the Business exists, no arbitration proceeding arising out of or under any collective agreement is pending, and no claim therefor has been asserted. -13- (vii) No collective bargaining agreement or similar agreement is currently being negotiated by the Corporation with respect to any employees of the Corporation and no collective agreements are currently in force with respect to its employees. (viii) Schedule 3.01(ff) contains a complete list of all permanent and full time employees of the Corporation, their salaries and wage rates, bonus arrangements, benefits, positions and length of service. (ix) No employee of the Corporation has any agreement as to length of notice required to terminate his or her employment, other than such as results by law from the employment of an employee without agreement as to such notice or as to length of employment. (x) All vacation pay (including all accrued vacation pay), bonuses and commissions are set out in Schedule 3.01(ff) and other employee benefit payments are set out in Schedule 3.01(ff)(v). (gg) None of the Benefit Plans, nor any trust created thereunder, nor any trustee or administrator thereof, has engaged in any prohibited transactions under the applicable Laws of Belgium. No matter relating to any of the Benefit Plans is pending before any court or government agency. (hh) Insurance. Schedule 3.01(hh) sets forth a list of all insurance policies which are maintained by or on behalf of the Corporation with respect to the Corporation, the Business, its Assets, employees, and otherwise and any pending Claims thereunder. The Corporation (or the Seller as the case may be) is not in default with respect to the payment of any premiums under any such insurance policy and has not failed to give any notice or to present any Claim under any such insurance policy in a due and timely fashion. There is no circumstance in respect of which any Person may make a Claim against the Corporation, whether covered by insurance or not. Such policies are in full force and effect free from any right of termination on the part of the insurers, except upon notice as stipulated in such policies. There has not been any material adverse change in the relationship of the Corporation with its insurers, the availability of coverage, or in the premiums payable pursuant to such policies. (ii) Litigation. Except as set forth on Schedule 3.01(ii), there is no action, suit or proceeding, at law or in equity, by any Person, nor any arbitration, administrative or other proceeding by or before (or any investigation by) any Governmental Entity pending or threatened against or affecting the Corporation or any of its properties or rights or any of the Assets, and the Seller does not know of any valid basis for any such action, suit, proceeding, arbitration or investigation. The Corporation is not subject to any judgment, order or decree entered in any lawsuit or proceeding. (jj) Taxes. The Corporation has filed or caused to be filed, within the times and within the manner prescribed by Law, all tax returns and tax reports which are required to be filed by or with respect to the Corporation or the Business in each jurisdiction in which the Corporation is authorized to do business. The information contained in such returns and -14- reports is correct and complete in all material respects. All taxes and assessments, of any kind (including interest and penalties), that are or may become payable by or due from the Corporation, with respect to any time prior to the date hereof, have been fully paid or disclosed or provided for in the Books and Records and the Financial Statements. No examination of any tax return of the Corporation is currently in progress, there are no outstanding agreements or waivers extending the statutory period providing for an extension of time with respect to the assessment or re-assessment of tax or the filing of any tax return by, or any payment of any tax by the Corporation, and there are no Claims (other than for tax liabilities accrued and not yet due which have been fully provided for as aforesaid) pending against the Corporation in respect of taxes or, to the best of the Corporation's or the Seller's knowledge, threatened. The Corporation has withheld from each payment made by it the amount of all taxes and other deductions required to be withheld therefrom and has paid the same to the proper taxing or other authority within the time prescribed under any applicable law. (kk) Bank Accounts and Powers of Attorney. Schedule 3.01(kk) is a correct and complete list showing (i) the name of each bank in which the Corporation has an account or safe deposit box and the names of all persons authorized to draw thereon or to have access thereto; and (ii) the names of any persons holding powers of attorney from the Corporation and a summary statement of the terms thereof. (ll) Full Disclosure. Neither this Agreement nor any certificate or statement in writing which has been supplied by or on behalf of the Corporation or the Seller in connection with the transactions contemplated hereby contains any untrue statement of a material fact, or omits any statement of a material fact necessary in order to make the statements contained herein or therein not materially misleading. ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER 4.01 Representations and Warranties of the Purchaser. The Purchaser represents and warrants as follows to the Seller and acknowledges and confirms that the Seller is relying on such representations and warranties in connection with the sale by the Seller of the Purchased Shares: (a) Due Incorporation and Existence. The Purchaser is a corporation duly incorporated and validly existing and in good standing under the laws of Belgium. (b) Validity of Agreement. The Purchaser has all necessary corporate power to enter into and to perform its obligations under this Agreement. The execution, delivery and performance by the Purchaser of this Agreement and the consummation of the transactions contemplated hereby: (i) have been duly authorized by all necessary corporate action on the part of the Purchaser; and (ii) do not (or would not with the giving of notice, the lapse of time or the happening of any other event or condition) result in a violation or a breach of, or a default under or give rise to a right of termination, amendment or cancellation -15- or the acceleration of any obligation under (A) any charter or by-law instruments of the Purchaser; (B) any contracts or instruments to which the Purchaser is a party or by which the Purchaser is bound; or (C) of any Laws applicable to the Purchaser. This Agreement constitutes a legal, valid and binding obligation of the Purchaser enforceable against it in accordance with its terms subject to bankruptcy, insolvency, reorganization, winding-up, moratorium and other laws affecting the rights of creditors generally and by general principles of equity. ARTICLE 5 NON - COMPETITION 5.01 Non-Competition. (a) The Seller hereby covenants that he will not, directly or indirectly, at any time prior to the eighth anniversary of the Closing Date, engage in the business of, own or control any interest in, act as a director, officer or consultant to or be connected in any manner with, as an employee or otherwise, any person, firm, corporation, association or other entity other than the Purchaser, the Parent Corporation or any of their subsidiaries or affiliated entities which is directly or indirectly engaged in any business in which the Purchaser, the Parent Corporation or any of their subsidiaries or affiliated entities is then engaged; (b) from and after the Closing Date, directly or indirectly, solicit (i) any of the customers of the Corporation existing as of the Closing Date or which existed within eighteen (18) months prior to the Closing Date and which are transferred to the Purchaser, or (ii) any of the Purchaser's or the Parent Corporation's or their subsidiaries' or affiliated entities' customers; or (c) induce or persuade any employee or consultant of the Purchaser or any of its subsidiaries or affiliated entities to join him in any activity prohibited by this Section 5.01. ARTICLE 6 DELIVERIES AT CLOSING 6.01 Deliveries of the Seller. The Seller shall have delivered or caused to be delivered to the Purchaser the following in form and substance reasonably satisfactory to the Purchaser: (a) all Consents required for the completion of the transaction contemplated herein, including the Consent of each financial institution or other lender to which the Corporation is currently indebted as set forth in Schedule 3.01(y) herein; (b) a shareholders' register representing the Purchased Shares duly endorsed in blank for transfer to the Purchaser; (c) a duly executed resignation effective as at the Closing Date of each director and -16- officer of the Corporation as the Purchaser may specify; (d) a release in favor of the Corporation of such officers and directors of the Corporation as the Purchaser may specify in the form reasonable satisfactory to the Purchaser; (e) the Consulting Agreement duly executed by Kegelaers and MicroFrame Europe N.V. 6.02 Deliveries of the Purchaser. The Purchaser shall have delivered or caused to be delivered to the Seller the following in form and substance satisfactory to the Seller: (a) payment of the Purchase Price in accordance with Article 2; (b) the Consulting Agreement duly executed by Kegelaers and MicroFrame Europe N.V. ARTICLE 7 CLOSING 7.01 D a te, Time and Place of Closing. The completion of the transactions contemplated by this Agreement shall take place at the offices of Loeff, Claeys, Verbeke, on the Closing Date at the hour of 3:00 p.m. 7.02 Closing Procedures. Subject to satisfaction or waiver by the relevant Party of the Deliveries at Closing set forth herein on the Closing Date, the Seller shall deliver to the Purchaser actual possession of the Purchased Shares and the instruments of conveyance described in Subsection 6.01 and upon such delivery, the Purchaser shall deliver to the Seller the instruments of conveyance described in Section 6.02 and shall pay the Purchase Price in accordance with Section 2.02. The transfer of possession of the Purchased Shares shall be deemed to take effect as at the Effective Time on the Closing Date. ARTICLE 8 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNITIES 8.01 Survival of Representations and Warranties. (a) The representations and warranties of the Seller contained in this Agreement shall survive the Closing and, notwithstanding such or any investigation made by or on behalf of the Purchaser, shall continue in full force and effect for the benefit of the Purchaser, without limitation hereunder. (b) The representations and warranties of the Purchaser contained in this Agreement shall survive the Closing and, notwithstanding such Closing or any investigation made by or on behalf of the Seller, shall continue in full force and effect for the benefit of the Seller, without limitation hereunder. 8.02 Indemnification in Favor of the Purchaser. The Seller shall indemnify and save the Purchaser and the Parent Corporation and their -17- respective shareholders, directors, officers, employees, agents and representatives harmless (net of any income tax benefit resulting therefrom the underlying Claims) of and from any Claim or Loss suffered by, imposed upon or asserted against the Purchaser and the Parent Corporation as a result of, in respect of, connected with or arising out of, under or pursuant to: (a) any failure of the Seller to perform or fulfil any covenant or undertaking of any of them under this Agreement; and (b) any breach or inaccuracy of any representation or warranty given by the Seller contained in this Agreement. 8.03 Indemnification in Favor of the Seller. The Purchaser shall indemnify and save the Seller harmless of and from any Claim or Loss suffered by, imposed upon or asserted against the Seller as a result of, in respect of, connected with or arising out of, under or pursuant to: (a) any failure by the Purchaser to perform and fulfil any covenant of the Purchaser under this Agreement; and (b) subject to the limitation period set forth in Section 8.01 hereof, any breach or inaccuracy of any representation or warranty given by the Purchaser contained in this Agreement. 8.04 Indemnification Proceedings. (a) Any party seeking indemnification under this Article (the "indemnified party") shall forthwith notify the party against whom a claim for indemnification is sought hereunder (the "indemnifying party") in writing, which notice shall specify, in reasonable detail, the nature and estimated amount of the claim. If a claim by a third party is made against an indemnified party, and if the indemnified party intends to seek indemnity with respect thereto under this Article, the indemnified party shall promptly (and in any case within 30 days of such claim being made) notify the indemnifying party of such with reasonable particulars. The indemnifying party shall have 30 days after receipt of such notice to undertake to conduct and control, through counsel of its own choosing and at its expense, the settlement or defense thereof, and the indemnified party shall cooperate with it in connection therewith; except that with respect to settlements entered into by the indemnifying party (i) the consent of the indemnified party shall be required if the settlement provides for equitable relief against the indemnified party, which consent shall not be unreasonably withheld or delayed; and (ii) the indemnifying party shall obtain the release of the indemnified party. If the indemnifying party undertakes to conduct and control the settlement or defense of such claim (A) the indemnifying party shall permit the indemnified party to participate in such settlement or defense through counsel chosen by the indemnified party, provided that the fees and expenses of such counsel shall be borne by the indemnified party; and (B) the indemnifying party shall promptly reimburse the indemnified party for the full amount of any loss resulting from any claim and all related expenses (other than the fees and expenses of counsel as aforesaid) incurred by the indemnified party. The indemnified party shall not pay or settle any claim so long as the indemnifying party is reasonably contesting any such claim in good faith on a timely basis. Notwithstanding the two immediately preceding sentences, the indemnified party shall have the right to pay or settle any such claim, provided that in such event, and unless it has done so due to default by the indemnifying party in the performance of its obligations under this Article 8 it shall waive any right to indemnity therefor by the indemnifying party. -18- (b) With respect to third party claims, if the indemnifying party does not notify the indemnified party within 30 days after the receipt of the indemnified party's notice of a claim of indemnity hereunder that it elects to undertake the defense thereof, the indemnified party shall have the right, but not the obligation, to contest, settle or compromise the claim in the exercise of its reasonable judgment at the expense of the indemnifying party. (c) Failure by an indemnified party to provide notice on a timely basis of a third party claim shall not relieve the indemnifying party of its obligations hereunder, except that the foregoing shall not constitute a waiver by the indemnifying party of any claim for direct damages caused by such delay. (d) In the event of any claim by a third party against an indemnified party, the defense of which is being undertaken and controlled by the indemnifying party, the indemnified party will use all reasonable efforts to make available to the indemnifying party those employees whose assistance, testimony or presence is necessary to assist the indemnifying party in evaluating and in defending any such claims; provided that the indemnifying party shall be responsible for the expense associated with any employees made available by the indemnified party to the indemnifying party hereunder, which expense shall be equal to an amount to be mutually agreed upon per person per hour or per day for each day or portion thereof that such employees are assisting the indemnifying party and which expenses shall not exceed the actual cost to the indemnified party associated with such employees. (e) With respect to third party claims, the indemnified party shall make available to the indemnifying party or its representatives on a timely basis all documents, records and other materials in the possession of the indemnified party, at the expense of the indemnifying party, reasonably required by the indemnifying party for its use in defending any claim and shall otherwise cooperate on a timely basis with the indemnifying party in the defense of such claim. ARTICLE 9 MISCELLANEOUS 9.01 Further Assurances. From time to time subsequent to the Closing Date, each Party shall at the request of any other Party execute and deliver such additional conveyances, transfers and other assurances as may be reasonably required to effectively carry out the intent of this Agreement and to transfer the Purchased Shares to the Purchaser. 9.02 Notices. Any notice, direction or other instrument required or permitted to be given hereunder shall be in writing and given by delivering or sending it by telecopy or other similar form of communication addressed: (a) to the Purchaser at: MicroFrame Europe N.V. c/o MicroFrame, Inc. 21 Meridian Road Edison, New Jersey 08820 Attention: Mr. Lonnie L. Sciambi President -19- with copies to: Parker Chapin Flattau & Klimpl, LLP 1211 Avenue of the Americas New York, New York 10036 Attention: James Alterbaum, Esq. and Loeff Claeys Verbeke Avenue de Tervueren 268A 1150 Brussels, Belgium Attention: Daniel Gillet, Esq. (b) to the Seller at: Mr. Marc Kegelaers Tuyaertsstraat 32 B-2850 Boom, Belgium with a copy to: Jan Bergmans, Esq. Eikenstraat 80 B2840 Rumst, Belgium Any such notice, direction or other instrument given as aforesaid shall be deemed to have been effectively given, if sent by telecopier or other similar form of telecommunications on the next Business Day following such transmission or, if delivered, to have been received on the date of such delivery. Any Party may change its address for service from time to time by notice given in accordance with the foregoing and any subsequent notice shall be sent to the party at its changed address. 9.03 Publicity. Save as required by Law or in order to obtain Consents, the Seller shall not issue any press release or make any other public statement or announcement relating to or connected with or arising out of this Agreement or the matters contained herein, without obtaining the prior written approval of the Purchaser to the contents and the manner of presentation and publication thereof. If disclosure is required by Law, the Seller shall consult in advance with the Purchaser and attempt in good faith to reflect the Purchaser's concerns in the required disclosure. 9.04 Brokers. It is understood and agreed that no broker, agent or other intermediary acted for the Seller in connection with the sale of the Purchased Shares and the Seller shall indemnify and save harmless the Purchaser from and against any Claims whatsoever for any commission or other remuneration payable or alleged to be payable to any broker, agent or other intermediary who purports to act or have acted for the Seller. 9.05 Third Party Beneficiaries. Each Party hereto intends that this Agreement shall not benefit or create any right or cause of action in or on behalf of any Person, other than the Parties hereto, and no Person, other than the Parties hereto, shall be entitled to rely on the provisions hereof in any action, suit, proceeding, hearing or other forum. 9.06 Expenses. Except as otherwise expressly provided herein, all costs and expenses (including the fees and disbursements of legal counsel, investment advisers and auditors) incurred in connection with this Agreement and the -20- transactions contemplated hereby shall be paid by the Party incurring such expenses. The Seller represents and warrants that the Corporation has incurred no costs or expenses. 9.07 Assignment. This Agreement, and each right, interest and obligation hereunder, may not be assigned by either party hereto without the prior written consent of the other party hereto, and any purported assignment without such consent shall be void and without effect; provided, however, that the purchaser may, at its option, assign all of its interest and rights pursuant to this agreement to any wholly-owned subsidiary of the Purchaser. 9.08 Enurement. This Agreement shall enure to the benefit of and be binding upon the Parties and their successors and shall enure to the benefit of any permitted assigns. 9.09 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. 9.10 Non-Merger. Except as otherwise expressly provided in this Agreement, the covenants, representations and warranties of the Parties contained in this Agreement shall not merge on and shall survive the Closing and, notwithstanding such Closing, or any investigation made by or on behalf of any Party, shall continue in full force and effect. Except as otherwise expressly provided in this Agreement, closing shall not prejudice any right of one Party against any other Party in respect of anything done or omitted hereunder or in respect of any right to damages or other remedies. 9.11 Schedules. It is expressly acknowledged and agreed that any matter disclosed by the Seller on any of the Schedules to this Agreement shall be deemed to be disclosed by the Seller on each of the Schedules hereto. In addition, the information set forth on each of the Schedules is stated as of the date of this Agreement unless another date is indicated on such Schedule. 9.12 Transferability of Stock of the Corporation. Provided that the Seller is not in breach of any term or condition with respect to this Agreement and Kegelaers is not in breach of any term or condition with respect to the Consulting Agreement, the Purchaser shall not transfer the Purchased Shares to any non-Belgium corporation for a period of one (1) year from the Closing Date. IN WITNESS WHEREOF this Agreement has been executed by the Parties as of the date first above written. /s/ Marc Kegelaers MARC KEGELAERS MICROFRAME EUROPE N.V. /s/ Lonnie L. Sciambi LONNIE L. SCIAMBI Prisident and Chief Executive Officer -21- SCHEDULE 1.01 (a) Accounts Receivable Outstanding Invoices: Invoice Nr.: Date Customer Amount 95/021 31 August 1995 NeMO GmbH 7630 DEM -22- SCHEDULE 1.01 (b)European Countries Iceland, Ireland, Scotland, England, Spain, Portugal, France, Andorra, Norway, Sweden, Finland, Denmark, Holland, Belgium, Luxemburg, Germany, Switzerland, Italy, Monaco, Liechtenstein, Estland, Letiand, Litauwen, Poland, Tsechia, Austria, Slowenia, Slovakia, Hungary, Kroatia, Bosnia-Herzegovina, Yugoslavia, Macedonia, Albania, Greece, Cyprus, Bulgaria, Turkey, Kreta, Rumenia, Moldavia, Ukraine, Russia, White Russia, Israel, Libanon, Syria, Kuweit, Saudi Arabia, Oman, Abu Dhabi, Bahrein, United Arab Emirates, Yemen, Egypt. -23- SCHEDULE 2.04 Share Earn Out Billing Period One Share for each US$____ Minimum Threshold of European of European Revenue 1 $ 120 $ 1,200,000 2 $ 165 $ 1,600,000 3 $ 215 $ 2,100,000 4 $ 280 $ 2,750,000 5 $ 350 $ 3,000,000 -24- SCHEDULE 3.01 (p)Authorizations No authorizations have been granted. The only person authorized to sign on behalf of the Company is Marc Kegelaers. -25- SCHEDULE 3.01 (v) Leased Properties The Company rents its office at the Eikenstraat 80 in 2840 Rumst, Belgium from Fiduciare Bergmans N.V. Document Title: "Terbeschikkingsstelling van Kantoorruimte." There are no other leases. -26- SCHEDULE 3.01 (y) Indebtedness Other than the loans as described in schedule 3.01 (ee), there is no indebtedness. -27- SCHEDULE 3.01(w) Material Contract Cristie, UK: European Representative Agreement P3K, Spain: European Representative Agreement Exxon, Netherlands: Maintenance Contract for DL4000 Polaroid, Netherlands: Maintenance Contract for DL4000 Nationale Bank, Belgium: Maintenance Contract for DL4000 -28- SCHEDULE 3.01 (aa) Personal Property Following is a list of material assets, including furniture, machinery and equipment that is Owned by E.B.A. and which is in good working condition. Furniture: 6 off office desks 3 off general purpose tables 3 off office chairs 4 off high filing cabinets 1 off low filing cabinet 2 off "Kitchen"-chairs Company cars: 1 off Mercedes 190D 1 off Peugeot 405 1 off Opel Corsa Equipment: 1 off desktop PC, Type Compaq Prolinea 2 off laptop PCs, Type IBM Thinkpad 340 1 off fax / answering machine; type Amstrad 1 off fax machine, type Olivetti 1 off fotocopier, type Olivetti Copia 8006 1 off CD ROM drive, type D2 1 off Tape Backup Unit, type Colorado Trakker 250 1 off PBX, type TOPCOM 1 off Printer, type HP Laserjet IIP 1 off printer, type HP Deskjet 510 2 off breakout boxes type Datacom Technologies 2 off maintenance toolboxes 1 off Cordless Phone, Type Samsung 1 off percolator 1 off water boiler -29- SCHEDULE 3.01 (ee) Financial Commitment to Sellers Seller has issued two loans to the Company to finance the purchase of the company cars. Loan 1: Lender: Marc Kegelaers Value: 500,000 Bef Start date: April 1994 Nr. of monthly payments: 36 Interest rate : 12% Balance on August 3 1: 299,686 Bef Loan 2: Lender: Marc Kegelaers Value: 250,000 Bef Start date: April 1995 Nr. of monthly payments: 24 Interset rate : 12% Balance on August 3 1: 212,367 Bef -30- SCHEDULE 3.01 (ff) Employees Employee nr. 1: Mieke Morreel - - - Sexe :female - - - Date of birth :January 11, 1966 - - - Date of employment :March 4, 1994 - - - Function :product engineer - - - Base salary :66,300 Bef / month - - - Bonuses :1 month of extra salary - - - Holiday pay :1.85 month of extra salary - - - Benefits :use of company car + 5000 bef month for non- proven expenses - - - Commission :nihil Employee nr. 2: Hans Schrauwen - - - Sexe :male - - - Date of birth :January 20, 1970 - - - Date of Employment :July 1, 1995 - - - Function :product engineer - - - Base salary :6 1,000 Bef / month - - - Bonuses :1 month of extra salary - - - Holiday pay :1.85 month of extra salary - - - Benefits :use of company car - - - Commission :nihil Bonus and holiday pay are valid for a full year of employment. For less than a year employment, the amounts mentioned are accrued pro-rata the number of months of employment. The bonus is paid at the end of the year, on the condition that the employee is still employed. The holiday payment is paid in June of the year after the year during which the holiday pay was accrued or when the employee leaves the company. In addition to the amounts mentioned, the employer is required to pay an "employer's contribution" for the social security system at a rate of +/- 37.5 % of the base amount. This is applicable to the base salary, the bonus and the holiday payment. This contribution covers health insurance; insurance against unemployment and pension. For Mieke, following grant have been obtained from the government: - waiver of "employer's contribution" according to the following schedule: - first year of employment: 100% waived - second year: 75% waived - third year: 50 % waived - additional subsidy of 10,000 bef/ month for a period of 24 months. For Hans, no subsidies have been obtained as yet. -31- SCHEDULE 3.01 (ffv) Benefit Plans There are none. -32- SCHEDULE 3.01 (hh) Insurance Policies 1) Car Insurance Policy nr: 5.895.226 + 5.895.225 Car: Mercedes 190D Policy nr.: 5.894.093 Car: Peugeot 405D Policy nr.: 5.909.673/4627 Car: Opel Corsa 2) Civil Liabilities: Policy nr.: 7.010.819 (Inshures damages to third parties ad a result of non- nal operations and legal fees) 3) Employee Accidents: Policy nr.: 9.943.606/1484 4) Guaranteed Income: Policy nr.: 1.402.835 (Covers long-term and permanent disability of Marc Kegelaers) 5) Fire and theft for the office at Eikenstraat : covered by the rental agreement. -33- SCHEDULE 3.01 (ii) Potential and actual Litigation "Rijkswacht Project" Main Contractor: Datelnet Service N.V. Subcontractor for CCL development, installation and project management: E.B.A. Contract value to E.B.A.: 1,935,920 Bef Invoiced before project finalization: 500,000 Bef in march 1994 360,000 Bef in march 1995. This second payment was under the condition that Datelnet had the right to reclaim the amount if customer did not accept delivery of the software in June 1995. The customer has not accpeted the solution. Datelnet is now in a position to reclaim its payment but has not done so. -34- SCHEDULE 3.01 (kk) Bank Accounts and Powr of Attorney Bank Accounts: Banque Brussel Lambert, account nr. 320-0662756-25 Persons authorized to draw money and access to the account: - Marc Kegelaers - Lutgart Van Dyck (spouse of Marc Kegelaers) Powers of attorney: Have been granted to Fiduciare Bermans N.V. to represent EBA in it's dealings with the tax authorities. -35- EX-10 6 EXHIBIT 10.31 CONSULTING AGREEMENT CONSULTING AGREEMENT dated as of September 15, 1995 between MICROFRAME EUROPE N.V., a Belgium corporation having its place of business at Tuyaartstraat 32, 2850 Boom, Belgium (the "Company") and MARC KEGELAERS, residing at Tuyaartstraat 32, 2850 Boom, Belgium (the "Consultant"). W I T N E S S E T H: WHEREAS, the Company desires to retain the services of Consultant upon the terms and conditions stated herein; and WHEREAS, Consultant desires to render such services to the Company upon the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto hereby agree as follows: 1. Consulting Term. The Company hereby agrees to retain Consultant, and Consultant hereby agrees to serve in such capacity, as a general manager of the Company, upon the terms and conditions set forth below for a five-year term commencing on the date hereof (the "Term"). 2. Duties. (a) Consultant shall, according to the general instructions of the Company, perform such duties and exercise such supervision and powers over and with regard to the business of the Company and its respective present and future subsidiaries and affiliated entities, consistent with Consultant's position with the Company as may be established from time to time by the Board of Directors or the President of the Company, -1- including, without limitation, responsibility with respect to the operations of the Company, including the Company's distribution of MicroFrame, Inc. products in Europe. Consultant shall be free to determine his working hours as well as his vacation periods. He will make himself available to the Company on a daily basis and during any 49 of the 52 weeks in each year during the Term as shall be mutually convenient for Consultant, on the one hand, and the Company on the other. In general, Mr. Kegelaers shall be present on the premises of the Company inasmuch as his presence is necessary for the proper performance of his contract. Consultant shall report only to the Board of Directors and to the President of the Company during the Term. Consultant covenants and agrees that during the Term he will devote his full time and efforts to the proper performance of his duties hereunder and to the furtherance of the interests of the business of the Company and its respective present and future subsidiaries and affiliated entities. (b) It is expressly understood that nothing herein shall be deemed to create an employer-employee relationship between the parties hereto and that Consultant is acting hereunder solely as an independent contractor and no partnership, agency, joint venture or other association between the parties hereto shall be created or construed herefrom. (c) The Consultant shall be alone responsible for effecting his own tax payments and social security contributions. -2- 3. Consulting Compensation. Subject to compliance with the terms and conditions contained in the Share Purchase Agreement of even date herewith ("Share Purchase Agreement"), of which the Consultant is a party, by the Seller (as defined in the Share Purchase Agreement), in consideration of the services to be rendered by Consultant under this Agreement, the Company shall pay the Consultant, as a consulting fee, the sum of US$ 75,000 per annum for the first year of the Term, payable against the submission by Consultant of invoices but at most each month. This annual fee shall be increased by five percent (5%) over the annual fee in effect for the immediately preceding year on each of the first, second, third and fourth anniversaries of the date hereof. 4. Expenses. In addition to the consulting fee provided for above, the Company shall reimburse Consultant for all reasonable expenses incurred by him (a) which are necessary for Consultant to perform his duties under this Agreement, and (b) for which Consultant has submitted appropriate vouchers and/or receipts. 5. Termination upon Death or Disability. (a) In the event of the death of Consultant during the Term, this Agreement shall terminate and come to an end on the date of such death; provided, however, that the estate of Consultant shall be entitled to receive, and the Company will pay to such estate, all amounts Consultant would have been entitled to receive hereunder prior to his death. -3- (b) In the event that Consultant shall be prevented from rendering substantially all of his services or performing substantially all of his duties under the Agreement by reason of illness, injury or incapacity for a period of at least three (3) consecutive months, or six (6) months during any twelve (12) month period ("disability"), the Company shall have the right to terminate this Agreement upon two (2) weeks prior written notice. Until so terminated, Consultant shall be entitled to receive his consulting fee pursuant hereto even though he shall be unable to perform services hereunder by reason of the illness, injury or incapacity. Upon termination due to illness, injury or incapacity as hereinabove provided, Consultant shall not be entitled to receive any additional consulting fees from the month in which such termination occurred or for any year thereafter. 6. Confidential Information. Consultant recognizes and acknowledges that information relating to the financial, business and other affairs of the Company or MicroFrame, Inc. and their respective subsidiaries and affiliated entities, including customers lists and other trade secrets, are valuable, special and unique assets of the Company and MicroFrame, Inc. and are considered confidential. Accordingly, Consultant will not, during or after the Term, disclose or cause to be disclosed any of such confidential information to any person, firm, corporation, association or other entity for any reason or purpose whatsoever, except as required in furtherance of the business of the Company or their respective subsidiaries or affiliated entities. The -4- provisions of this paragraph shall not apply to information generally known to the public or the trade. The provisions of this paragraph 6 shall survive the expiration or termination of this Agreement. In the event of a breach or threatened breach by Consultant of any provision of this paragraph 6, Consultant hereby consents to the granting of a temporary or permanent injunction against him by any court or competent jurisdiction prohibiting him from violating any such provision of this Agreement. In any proceeding for an injunction and upon any motion for a temporary or permanent injunction, Consultant agrees that his ability to answer in damages shall not be a bar or interposed as a defense to the granting of such temporary or permanent injunction against Consultant. Consultant further agrees that the Company and MicroFrame, Inc. will not have an adequate remedy at law in the event of any such breach by Consultant hereunder and that the Company and MicroFrame, Inc. will suffer irreparable damage and injury if Consultant breaches any of the provisions of this paragraph 6. Nothing contained herein shall be construed as prohibiting the Company or MicroFrame, Inc. from pursuing any other remedy or remedies available to them including, without limitation, the recovery of damages from Consultant. 7. Non-Competition and Solicitation. (a) Consultant covenants and agrees that, during the Term and for a period of three years thereafter, he will not, directly or indirectly, engage in the business of, own or control any interest in, act as -5- director, officer or consultant to or be connected in any manner with, as an employee or otherwise, any person, firm, corporation, association or other entity other than the Company or MicroFrame, Inc. or any of their respective subsidiaries or affiliated entities which is engaged in any business in which the Company or MicroFrame, Inc. or any of their subsidiaries or affiliated entities is then engaged; and (b) covenants and agrees that from and after the date hereof he will not, directly or indirectly, solicit for the benefit of any entity other than the Company or MicroFrame, Inc. or their respective subsidiaries or affiliated entities any of the customers of the Company or MicroFrame or their respective subsidiaries or affiliated entities; and (c) induce or persuade any employee or consultant of the Company or MicroFrame, Inc. or their respective subsidiaries or affiliated entities to join him in any activity prohibited by this paragraph 7. 8. Assignability. This Agreement may not be assigned by Consultant and all of its terms and conditions shall be binding upon and inure to the benefit of the Company, Consultant and their respective heirs, legal representatives, successors and assigns. 9. Entire Agreement; Modification. This Agreement constitutes the entire agreement between the parties hereto and may not be modified or amended except by a writing signed by all the parties hereto. -6- 10. No Waiver. The failure of any of the parties hereto to enforce any provision hereof on any occasion shall not be deemed to be a waiver of any preceding or succeeding breach of such provision or of any other provision. 11. Notices. Any notice under the provisions of this Agreement shall be given by registered or certified mail, return receipt requested, directed to the addresses set forth above, unless notice of a new address has been sent pursuant to the terms of this paragraph. 12. Unenforceability; Severability. If any provision of this Agreement is found to be void or unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall, nevertheless, be binding upon the parties hereto with the same force and effect as if the unenforceable part has been severed and deleted. 13. Governing Law and Jurisdiction. This agreement shall be construed and governed by Belgian Law. Any dispute between the Parties shall be of the exclusive competence of the Courts of Antwerp. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written. /s/ Marc Kegelaers Marc Kegelaers Agreed to and accepted with respect to all applicable provisions: The Company By: /s/ Lonnie L. Sciambi Lonnie L. Sciambi -7- EX-10 7 EXHIBIT 10.32 EUROPEAN BUSINESS ASSOCIATES BVBA TUYAERTSSTRAAT 32 B-2850 BOOM, BELGIUM September 15, 1995 MicroFrame, Inc. 21 Meridian Road Edison, New Jersey 08820 Attn: Mr. Lonnie L. Sciambi, President Dear Mr. Sciambi: We hereby notify MicroFrame, Inc. (the "Company") that the Exclusive Sales Representative Agreement (the "Agreement") between the Company and European Business Associates dated November 16, 1993 is hereby terminated, effective as of the day hereof. Notwithstanding such termination, all of the terms and conditions of paragraph 14 of the Agreement shall remain in full force and effect. We further waive all of our rights under the Agreement, including, but not limited to, the 180 day notice provision which further provides that the effective date of termination shall be the ninetieth day after receipt of notice, as well as any and all commissions we may be entitled to after the date hereof. Very truly yours, EUROPEAN BUSINESS ASSOCIATES BVBA By:/s/ Marc Kegelaers Marc Kegelaers, President ACCEPTED AND AGREED TO: MICROFRAME, INC. By: /s/ Lonnie L. Sciambi Lonnie L. Sciambi, President EX-27 8 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 0000754813 MICROFRAME, INC. 6-MOS MAR-31-96 SEP-30-95 19,225 0 1,375,925 (75,091) 1,281,731 2,708,127 904,348 (430,518) 4,158,483 1,356,549 0 3,714 0 0 2,798,220 4,158,483 2,606,940 2,606,940 1,165,874 3,366,061 0 0 1,694 (757,753) 0 (757,753) 0 0 0 (757,753) (0.21) (0.21)
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