Exhibit
10.86


SIXTH
FORBEARANCE AGREEMENT


          This
Sixth Forbearance Agreement (as amended, restated, supplemented or otherwise
modified from time to time, this “Agreement”) is made and entered into as of
September 21, 2010 by and among Wave2Wave Communications, Inc., a Delaware
corporation (“Borrower”), RNK,
Inc., a Massachusetts corporation (“RNK”), Wave2Wave VOIP Communications, LLC,
a Delaware limited liability company (“VOIP”), Wave2Wave Data Communications, LLC,
a Delaware limited liability company (“Wave Data”), Wave2Wave Communications
Mid-West Region, LLC, a Delaware limited liability company (“Wave
Communications”), RNK VA, LLC, a Virginia limited liability company
(“RNK VA”;
RNK VA, together with Borrower, RNK, VOIP, Wave Data and Wave Communications
are sometimes hereinafter referred to individually as a “Company” and collectively as the “Companies”), the financial institutions
party hereto as “Lenders” (collectively, the “Lenders”) and
Victory Park Management, LLC, as administrative agent and collateral agent
for the Lenders (in such capacity, the “Agent”).


WHEREAS:


          A.
The Companies, the Lenders and the Agent are parties to that Financing
Agreement dated as of September 8, 2009 (as amended, restated, supplemented or
otherwise modified from time to time, the “Financing Agreement”), pursuant to which
the Lenders agreed to purchase up to $9,300,000 of senior secured notes of the
Companies on the terms and subject to the conditions set forth in the Financing
Agreement. 


          B.
The transactions contemplated by the Financing Agreement are evidenced,
governed and secured by, among other things: (i) the Financing Agreement; (ii)
the Senior Secured Term Note dated September 8, 2009 in the stated principal
amount of $7,548,000 issued by Borrower to Victory Park Credit Opportunities,
L.P. and the Senior Secured Term Note dated September 8, 2009 in the stated
principal amount of $1,752,000 issued by Borrower to Victory Park Special
Situations, L.P., which notes (together with all of the rights, title and
interest thereunder) have been assigned to Victory Park Credit Opportunities
Master Fund, Ltd. (together, the “Term Note”); (iii) the Security Agreement
(as defined in the Financing Agreement); (iv) the Pledge Agreement (as defined
in the Financing Agreement); (v) the Affiliate Subordination Agreements (as
defined in the Financing Agreement) and (vi) certain UCC financing statements.


          C.
On March 22, 2010, the Companies, Agent and Lenders entered into that certain
Forbearance Agreement (the “First Forbearance Agreement”) pursuant to
which, among other things, the Agent and Lenders agreed to forbear from
exercising rights and remedies available to them as a result of the “Existing
Events of Default” (as defined therein). On April 16, 2010, the Companies,
Agent and Lenders entered into that certain Second Forbearance Agreement and
Amendment to Financing Agreement (the “Second Forbearance Agreement”) pursuant to
which, among other things, the Agent and Lenders agreed to forbear from exercising
rights and remedies available to them as a result of the “Existing Events of
Default” (as defined therein). On May 11, 2010, the Companies, Agent and
Lenders entered into that certain Third Forbearance Agreement (the “Third
Forbearance Agreement”) pursuant to which, among other things, the
Agent and Lenders agreed to forbear from exercising rights and remedies





available to them as a
result of the “Existing Events of Default” (as defined therein). On May 21,
2010, the Companies, Agent and Lenders entered into that certain Fourth
Forbearance Agreement (the “Fourth Forbearance Agreement”) pursuant to
which, among other things, the Agent and Lenders agreed to forbear from
exercising rights and remedies available to them as a result of the “Existing
Events of Default” (as defined therein). On July 1, 2010, the Companies, Agent
and Lenders entered into that certain Fifth Forbearance Agreement (the “Fifth
Forbearance Agreement”; the Fifth Forbearance Agreement, together
with the First Forbearance Agreement, the Second Forbearance Agreement, the
Third Forbearance Agreement and the Fourth Forbearance Agreement are sometimes
hereinafter referred to collectively as the “Prior Forbearance Agreements”)
pursuant to which, among other things, the Agent and Lenders agreed to forbear
from exercising rights and remedies available to them as a result of the “Existing
Events of Default” (as defined in the Third Forbearance Agreement),
including, without limitation, the Payment Maturity Default (as defined in the
Third Forbearance Agreement). As partial consideration for Agent and the
Lenders agreeing to so forbear during the applicable Forbearance Period (as
defined in each Prior Forbearance Agreement), the Companies agreed to pay to
the Agent, for the benefit of the Lenders, certain forbearance fees as more
particularly described in the Prior Forbearance Agreements. As one of the
purposes of Agent’s and Lenders’ agreements to forbear as set forth in the
Prior Forbearance Agreements was to permit the Companies to continue to use the
proceeds of the Term Note during the course of the applicable Forbearance
Period (as defined in each Prior Forbearance Agreement), for purposes of
clarification, the forbearance fees payable as partial consideration therefor
shall be deemed to be additional interest payable during such Forbearance
Period (as defined in each Prior Forbearance Agreement).


          D.
As of 5:00 pm (Chicago time) on August 16, 2010, (i) the Forbearance Period
under and as defined in the Fifth Forbearance Agreement terminated and (ii) the
Lenders and the Agent were permitted to exercise any and all of their
respective rights and remedies under the Transaction Documents and applicable
law.


          E.
The Companies have requested that the Lenders and the Agent agree to continue
to forbear from exercising certain of their rights and remedies against the
Companies with respect to the Existing Events of Default (as hereinafter
defined) during the Forbearance Period (as hereinafter defined).


          F.
Subject to the terms and conditions set forth herein, the Lenders and the Agent
have agreed to accommodate such request.


          G.
This Agreement constitutes one of the Transaction Documents (as defined in the
Financing Agreement).


          H.
The obligations owed by the Companies to the Lenders and the Agent under this
Agreement (as well as the other Transaction Documents) are secured pursuant to
the Security Agreement and the other Security Documents, and by the
collateral and security interests described therein, and reference is made
thereto for a statement of terms and provisions of such collateral security, a
description of Collateral and the rights of the Agent and the Lenders in
respect thereof. The Lenders and the Agent each constitute one of the “Secured
Parties” under the Security Agreement.


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          NOW,
THEREFORE, in consideration of the agreements herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:


          1.
Recitals. The recitals set forth above constitute an integral part of
this Agreement, evidencing the intent of the parties in executing this
Agreement, and describing the circumstances surrounding this execution.
Accordingly, such recitals are, by express reference, hereby acknowledged and
agreed among the parties and made a part of this Agreement, and this Agreement
shall be construed in the light thereof. 


          2.
Definitions. Unless otherwise defined below or elsewhere in this Agreement,
capitalized terms used herein shall have the meanings ascribed to them in the
Financing Agreement. As used herein, the following terms shall have the
respective meanings set forth below:


                    (a)
“Claims”
means claims, actions, causes of action, suits, debts, accounts, interests,
liens, promises, warranties, damages and consequential damages, demands,
agreements, bonds, bills, specialties, covenants, controversies, variances,
trespasses, judgments, executions, costs, expenses or any other claims
whatsoever (including, without limitation, cross-claims, counterclaims, rights
of set-off and recoupment). 


                    (b)
“Existing
Events of Default” means, collectively, (i) the Third Forbearance
Events of Default under and as defined in the Third Forbearance Agreement, (ii)
the Event of Default that has occurred under Section 10.1(n) of the Financing
Agreement due to the failure of CNH Partners, Inc. (“CNH”) to consummate the
potential refinancing of the Obligations and (iii) each Event of Default that
has occurred or will occur as a result of the failure of the Companies to be in
compliance with the financial covenants set forth in Sections 8.1(b), 8.1(c)
and 8.1(e) (in each case, prior to giving effect to this Agreement) for the
months ending July 31, 2010 and August 31, 2010. 


                    (c)
“Forbearance
Default” means (i) the occurrence of any Event of Default other than
the Existing Events of Defaults; (ii) the failure of any Company to timely
comply with any term, condition or covenant set forth in this Agreement
(including, without limitation, the failure of the Companies to make any
payment required to be made pursuant to Section 4 or Section 6(f) hereof on or
prior to the dates specified in such Section); (iii) the failure of any
representation or warranty made by any Company under or in connection with this
Agreement to be true and complete as of the date when made, or any other breach
of any such representation or warranty; (iv) the occurrence of any of the
following: (x) any Company repudiates or asserts a defense against all or any
portion of the Obligations or (y) any Company makes or pursues a claim against
Agent, any Lender or any Releasee; (v) any occurrence, event or change in facts
or circumstances occurring on or after the Forbearance Effective Date that
would reasonably be likely to have a Material Adverse Effect; (vi) the breach
by any holder of the RNK Notes of the RNK Agreement (as hereinafter defined) or
(vii) the occurrence of any Subordinated Creditor Action (as defined in Section
19 hereof). The parties hereby agree that, notwithstanding any provision in the
Transaction Documents, there shall be no cure period for any Forbearance
Default.


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                    (d)
“Forbearance
Effective Date” means, subject to payment of all amounts set forth
in Sections 4(a) and 4(b) hereof, the date hereof. 


                    (e)
“Forbearance
Period” means the period beginning on the Forbearance Effective Date
and ending on the earlier to occur of (i) the termination of the Forbearance
Period as a result of any Forbearance Default or (iii) 5:00 p.m. (Chicago time)
on January 4, 2011. 


                    (f)
“Releasees”
means the Lenders, the Agent and their respective affiliates, affiliated and/or
managed funds, subsidiaries, shareholders and “controlling persons” (within the
meaning of the federal securities laws), and their respective successors and
assigns and each and all of the officers, directors, employees, principals,
managers, investment managers, members, partners, agents, attorneys and other
representatives of each of the foregoing in their capacities as such. 


                    (g)
“Releasors”
means each Company and its respective agents, representatives, officers,
directors, advisors, employees, subsidiaries, affiliates, successors and
assigns.


          3.
Confirmation of Obligations and Acknowledged Events of Default. 


                    (a)
Each Company acknowledges and agrees that, as of September 20, 2010 (prior to
giving effect to any payment required to be made on the date hereof pursuant to
Section 4 hereof), the aggregate principal balance of the outstanding
obligations under the Term Note, together with all accrued and unpaid interest
is no less than $9,300,054. The foregoing amounts do not include any fees
(including, without limitation, legal fees), expenses or other amounts that are
chargeable or otherwise reimbursable under the Transaction Documents. All of
the obligations, including those set forth above, are valid and outstanding,
and the Companies have no rights of offset, defenses, claims or counterclaims
with respect to any of the obligations under the Transaction Documents. 


                    (b)
Each Company acknowledges and agrees that, except for the Existing Events of
Default, no other Events of Default have occurred or are continuing to occur as
of the date of this Agreement, or are expected to occur during the Forbearance
Period. 


          4.
Payments. 


                    (a)
On the date hereof, Companies consent and agree to pay to Agent in cash, a
payment in the amount of $273,531, which amount shall be applied to pay
interest at the Current Interest Rate from September 1, 2010 through and
including September 30, 2010, which interest shall be deemed fully-earned and
non-refundable as of the date hereof.


                    (b)
On the date hereof, Companies further consent and agree to pay to Agent in
cash, a payment in the amount of $350,000 (the “Principal Payment”), which
amount shall be applied to reduce the principal balance of the Term Note.


          5.
Forbearance; Forbearance Default Rights and Remedies. 


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                    (a)
Effective on the Forbearance Effective Date, each of the Lenders and the Agent
agrees that until the expiration or termination of the Forbearance Period, it
will forbear from exercising its default-related rights and remedies against
any Company or the Collateral solely with respect to the Existing Events of
Defaults, including acceleration and foreclosure; provided that (i) neither
any Lender nor the Agent shall have any obligation to make any further loans or
other extensions of credit to any Company; (ii) each Company shall comply with
all limitations, restrictions or prohibitions that would otherwise be effective
or applicable under the Transaction Documents during the continuance of any
Event of Default; (iii) nothing herein shall restrict, impair or otherwise
affect the Lenders’ or the Agent’s rights and remedies under any agreements
containing subordination provisions (including, without limitation, the
Affiliate Subordination Agreements) in favor of the Lenders or the Agent
(including, without limitation, any rights or remedies available to the Lenders
or the Agent as a result of the occurrence or continuation of any Existing
Event of Default) or amend or modify any provision thereof; and (iv) nothing
herein shall restrict, impair or otherwise affect the Agent’s right to file,
record, publish or deliver a notice of default or document of similar effect
under any state foreclosure law upon the expiration or termination of the
Forbearance Period. Any Forbearance Default shall constitute an immediate Event
of Default under this Agreement and the Transaction Documents without the
requirement of any demand, presentment, protest or notice of any kind to any
Company (all of which each Company waives).


                    (b)
Upon the occurrence of a Forbearance Default or the expiration of the
Forbearance Period, the agreement of the Lenders and the Agent hereunder to
forbear from exercising their respective default-related rights and remedies
shall immediately terminate without the requirement of any demand, presentment,
protest or notice of any kind to any Company (all of which each Company
waives). Each Company agrees that the Lenders and the Agent may at any time
thereafter proceed to exercise any and all of their respective rights and
remedies under the Transaction Documents or applicable law, including, without
limitation, their respective rights and remedies with respect to the Existing
Events of Default. Without limiting the generality of the foregoing, upon the
occurrence of a Forbearance Default or the expiration of the Forbearance
Period, each Lender and the Agent may, in their sole discretion and without the
requirement of any demand, presentment, protest or notice of any kind to any
Company (all of which each Company waives): (i) suspend or terminate any
commitment to provide loans or other extensions of credit under any Transaction
Document; (ii) commence any legal or other action to collect any or all of the
obligations under the Transaction Documents from any Company; (iii) foreclose
or otherwise realize on any or all of the Collateral; (iv) set off or apply to
the payment of any or all of the obligations under the Transaction Documents any
property belonging to any Company that is held by a Lender or the Agent; and
(v) take any other enforcement action or otherwise exercise any or all rights
and remedies provided for by any Transaction Document or applicable law, all of
which rights and remedies are fully reserved by the Lenders and the Agent.


                    (c)
Any agreement by the Lenders and the Agent to extend the Forbearance Period or
to waive a Forbearance Default must be set forth in writing and signed by a
duly authorized signatory of each Lender and the Agent. The Lenders and the
Agent are not obligated to extend the Forbearance Period or waive a Forbearance
Default, and may decide to do so (or not do so) in their sole discretion. Each
Company acknowledges that the Lenders and the Agent


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have not made any
assurances concerning any extension of the Forbearance Period or waiver of any
Forbearance Default.


                    (d)
The parties hereto agree that the running of all statutes of limitation or
doctrine of laches applicable to all claims or causes of action that any Lender
or the Agent may be entitled to take or bring in order to enforce its rights
and remedies against any Company is, to the fullest extent permitted by law,
tolled and suspended during the Forbearance Period.


                    (e)
Each Company acknowledges and agrees that any loan or other financial
accommodation which any Lender or the Agent makes on or after the Forbearance
Effective Date has been made by such party in reliance upon, and is
consideration for, among other things, the general releases and indemnities
contained in Section 8 hereof and the other covenants, agreements,
representations and warranties of the Companies hereunder.


          6.
Supplemental Terms, Conditions and Covenants. The parties hereto agree
to comply with the following terms, conditions and covenants, in each case
notwithstanding any provision to the contrary set forth in any Transaction
Document:


                    (a)
Conversion of Mennen Notes and RNK Notes. On or prior to September 24,
2010, the Companies shall deliver to Agent evidence that (i) at least fifty
percent (50%) of the outstanding principal balance and fifty percent (50%) of
accrued interest of the Mennen Notes as of the date hereof and (ii) at least
fifty percent (50%) of the outstanding principal balance and fifty percent
(50%) of accrued interest of the RNK Notes as of the date hereof have been
converted into Equity Interests of Borrower on terms satisfactory to Agent, in
each case, pursuant to documentation in form and substance satisfactory to
Agent.


                    (b)
Amendment to RNK Notes. On or prior to September 24, 2010, the Companies
shall deliver to Agent evidence that the RNK Notes have been amended to extend
the maturity date thereof until after February 28, 2011, which amendment
documents shall otherwise be in form and substance satisfactory to Agent.


                    (c)
Acknowledgment from RNK Noteholders. On or prior to September 24, 2010,
the Companies shall deliver to Agent a written acknowledgment from the holders
of the RNK Notes in favor of Agent and the Lenders, which acknowledgment (the “RNK
Agreement”) shall be in form and substance satisfactory to Agent and
shall, in any event, (i) provide for the continued subordination of the RNK
Notes to the Obligations pursuant to the Affiliate Subordination Agreement and
(ii) contain an agreement from each such holder not to interfere with, or
otherwise compromise, the efforts of any Company to consummate a refinancing of
the Obligations or the IPO and an acknowledgement from each such holder that
any such interference will cause irreparable harm to Agent and the Lenders and
entitle Agent and Lenders to seek injunctive relief in addition to any other
remedies at law or equity to which Agent and Lenders may be entitled.


                    (d)
Management of the
Companies. On or prior to
the date hereof, the Companies shall have removed Richard Koch as Chief
Strategic Officer of the Companies and shall have appointed Sandy McMurty as
Chief Operating Officer of RNK and Aaron Dobrinsky as Chief Executive Officer
of Wave, each of whom shall report directly to Jeff Hyland, the


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Strategic
Advisor of the Companies. As the Strategic Advisor of the Companies, Jeff
Hyland shall have full authority to direct, manage, perform, control,
implement and make all decisions with respect to the Companies’ financial,
operational and managerial affairs, cost restructurings, personnel management,
asset management and disposition, accounting function, bank and commercial
relationship management, and all other aspects of the business, in each case,
in such manner as the Strategic Advisor deems necessary or appropriate;
provided that, the Strategic Advisor shall not have the authority to dismiss
Eric Mann or Andrew Bressman.


                    (e)
Financial Covenants. Section 8.1 of the Financing Agreement is hereby
amended by deleting such Section in its entirety and replacing it with the
following:


	
  

 	
  

 
	
  

 	
 8.1 Financial
 Covenants. The Credit Parties shall, and shall cause their Subsidiaries to,
 comply with the following financial covenants:

 






	
  

 	
  

 
	
  

 	
 (a) Cash
 Balance. The Credit Parties shall at all times maintain cash in
 their Blocked Accounts (exclusive of the Collateral Account) in an aggregate
 amount not less than $2,000,000. 

 
	
  

 	
  

 
	
  

 	
 (b) Reserved.
 

 
	
  

 	
  

 
	
  

 	
 (c) Reserved.
 

 
	
  

 	
  

 
	
  

 	
 (d) Net
 Collections. The Credit Parties shall not allow aggregate net cash
 collections of the Credit Parties in any calendar month to be less than forty
 five percent (45%) of the daily average aggregate outstanding balance of the
 Notes during such calendar month. 

 
	
  

 	
  

 
	
  

 	
 (e) EBITDA. The
 Credit Parties shall not permit EBITDA (i) for the month ending September 30,
 2010 to be less than $150,000, (ii) for the month ending October 31, 2010 to
 be less than $150,000, (iii) for the month ending November 30, 2010 to be
 less than $175,000 and (iv) for the month ending December 31, 2010 to be less
 than $225,000. In calculating EBITDA, restructuring fees and expenses paid by
 the Borrower shall be added back to Net Income in such amounts as are
 consented to in writing by Agent.

 
	
  

 	
  

 
	
  

 	
 (f) Operating
 Leases. The Credit Parties shall not enter into any operating
 lease except operating leases for equipment having an equipment cost at
 inception of the lease of not more than $10,000 in the aggregate for all
 operating leases entered into on or after the Closing Date.

 
	
  

 	
  

 
	
  

 	
 (g) Capital
 Expenditures. The Credit Parties shall not make any Capital
 Expenditures in excess of $25,000 during any calendar month. 

 


                    (f)
Repayment. On October 1, 2010 and on the first day of each month
thereafter, the Companies shall pay to Agent in cash in immediately available
funds an amount equal to $350,000, which amount shall be applied to reduce the
principal balance of the Term Note. Furthermore, on October 1, 2010 and on the
first day of each month thereafter, the


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Companies shall pay to
Agent an amount equal to the interest on the Term Note that will accrue at the
Current Interest Rate from the first day of such month through and including
the last day of such month, which interest shall be deemed fully-earned and
non-refundable as of the date of payment thereof. 


                    (g)
Litigation. Within two (2) days of receipt by any Company of any
monetary judgment or settlement awarded to such Company in connection with any
action, suit, proceeding, claim or dispute involving such Company (including,
without limitation the pending action involving Verizon New England, Inc.),
such Company shall distribute one hundred percent (100%) of the gross proceeds
thereof to Agent, which amount shall be applied by Agent to fees, expenses and
principal owing under the Transaction Documents (pro rata among the Lenders). 


                    (h)
Accounts Receivable. Within three (3) days of receipt by any Company of
any payment (the “AR Payments”)from any customer who has
any account receivable that is sixty days or more past its invoice date, the
Companies shall distribute one hundred percent (100%) of such payment to Agent,
which amount shall be applied by Agent to fees, expenses and principal owing
under the Transaction Documents (pro rata among the Lenders). 


                    (i)
Monthly Reporting. Notwithstanding the provisions set forth in Section
8.2(a) of the Financing Agreement to the contrary, the Companies agree that all
financial deliveries described in such Section shall be delivered within ten
(10) days following the end of each month.


                    (j)
Cash Flow Forecasts. On the first (1st) Business Day of each
successive week thereafter, the Companies shall prepare and deliver to the
Agent a 13-week cash flow forecast in form and detail reasonably satisfactory
to the Agent in its sole discretion, which shall reflect the Companies’ good
faith projection of all cash receipts and disbursements in connection with the
operation of their businesses during the 13-week period beginning on the date
of delivery of such cash flow forecast (the “Cash Flow Forecasts”). 


                    (k)
Cash Disbursements. Except for trade payables incurred in the ordinary
course of business as set forth in the Cash Flow Forecasts, no Company shall
voluntarily pay, prepay, redeem, repurchase or make any other cash
disbursements with respect to any principal of, or interest, dividends or other
amounts owing with respect to, any junior indebtedness (including, without
limitation, with respect to the RNK Notes and the Mennen Notes) or equity
(including preferred equity), unless and until all Obligations under the
Transaction Documents are paid in full in cash to the Lenders and the Agent, as
applicable. Without limiting the generality of the foregoing, without the prior
written consent of Agent, no Company shall pay any out-of-pocket fees costs or
expenses incurred in connection with (or otherwise related to) the IPO other
than filing fees in an aggregate amount not to exceed $25,000 required to be
paid to any Governmental Authority in accordance with applicable federal and
state securities laws and regulations.


                    (l)
Reserved.


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                    (m)
Investment Banker. On or prior to September 30, 2010, the Companies
shall engage the services of an investment banker satisfactory to the Agent
(the “Investment
Banker”) for the purpose of exploring strategic alternatives in
order to cause the payment in full, in cash of all Obligations, whether by
means of a sale of all or substantially all of the stock or assets of the
Companies or otherwise. In connection with such engagement, on or prior to
November 16, 2010, Investment Banker shall deliver a report to Agent setting
forth the valuation of the Companies and a list of all potential strategic and
financial buyers of the Companies, which report shall otherwise be in form and
substance satisfactory to Agent.


                    (n)
Chief Strategic Officer Recommendations. The Companies shall implement
all recommendations set forth in the report of the Chief Strategic Officer
delivered to Agent on or around July 16, 2010, with such modifications as shall
be acceptable to the Strategic Advisor and Agent, for monetizing the value of
the Companies and their assets and for implementing cost cutting strategies and
head count reductions including, without limitation, those certain strategies
and reductions previously identified to Agent.


                    (o)
Additional Financial Information. From time to time, the Companies shall
deliver to the Agent such additional documents, financial information, reports,
cash flows and/or budgets (each with a level of completeness, clarity and
detail that is reasonably satisfactory to the Agent in its sole discretion) as
the Agent shall reasonably request.


                    (p)
Security Agreement. The Security Agreement is hereby amended by deleting
Schedule C attached thereto in its entirety and substituting Schedule C
attached hereto as Annex A therefore.


                    (q)
Compliance with Transaction Documents. Each Company shall comply with
all terms and conditions of this Agreement and the other Transaction Documents,
except as such Transaction Documents may be modified by this Agreement.


          7.
Cooperation and Access. Each Company shall at reasonable times and with
prior reasonable notice during normal business hours permit Agent to
visit and inspect any of the properties of the Companies, to examine the data,
books, files and records of the Companies (including personnel files) and to
make copies thereof and extracts therefrom, to discuss the affairs, finances
and accounts of the Companies, to be advised as to the same by their respective
officers and advisors and to conduct examinations and verifications. In
furtherance of the foregoing, each Company
authorizes its officers, directors, management team and advisors to discuss
with, and otherwise provide documents and information to, the Agent, Lenders
and their respective advisors from time to time as reasonably requested by
Agent regarding the Collateral, the sale processes described herein and/or the
Companies’ financial affairs, finances, financial condition, business and
operations. Each Company hereby waives and releases any such officer, director,
employee and advisor from the operation and provisions of any confidentiality
agreement with such Company such that such person or entity is not prohibited
from providing any of the foregoing information to Agent or Lenders in
accordance with this subsection. From and after the date hereof, each Company
irrevocably authorize, and shall cause their investment bankers, their
financial advisors, consultants, accountants and other advisors (collectively,
the “Advisors”)
to, upon reasonable prior notice from Agent, consult with, and respond to the
inquiries of, the Agent, Lenders and their respective representatives
concerning any and all


9





matters
relating to the affairs, finances and businesses of the Companies, the assets
and capital stock of the Companies, any aspect of the marketing and sale of the
Business and/or assets and the Advisors’ activities related thereto (including,
without limitation, communications outside the presence of any representatives
of any Company). Notwithstanding the foregoing, no Person shall be obligated by
this subsection to disclose information protected by the attorney-client,
attorney work product or other privileges unless required under applicable law
and all information disclosed under this subsection shall be subject to the
confidentiality provisions set forth in the Financing Agreement.


          8.
General Release; Indemnity. 


                    (a)
IN CONSIDERATION OF, AMONG OTHER THINGS, THE LENDERS’ AND THE AGENT’S EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH OF THE RELEASORS HEREBY FOREVER AGREES AND
COVENANTS NOT TO SUE OR PROSECUTE AGAINST ANY RELEASEE AND HEREBY FOREVER
WAIVES, RELEASES AND DISCHARGES, TO THE FULLEST EXTENT PERMITTED BY LAW, EACH
RELEASEE FROM ANY AND ALL CLAIMS THAT SUCH RELEASOR NOW HAS OR HEREAFTER MAY
HAVE, OF WHATSOEVER NATURE AND KIND, WHETHER KNOWN OR UNKNOWN, WHETHER NOW
EXISTING OR HEREAFTER ARISING, WHETHER ARISING AT LAW OR IN EQUITY, AGAINST THE
RELEASEES, BASED IN WHOLE OR IN PART ON FACTS, WHETHER OR NOT NOW KNOWN,
EXISTING ON OR BEFORE THE FORBEARANCE EFFECTIVE DATE, THAT RELATE TO, ARISE OUT
OF OR OTHERWISE ARE IN CONNECTION WITH: (I) ANY OR ALL OF THE TRANSACTION
DOCUMENTS OR TRANSACTIONS CONTEMPLATED THEREBY OR ANY ACTIONS OR OMISSIONS IN
CONNECTION THEREWITH; OR (II) ANY ASPECT OF THE DEALINGS OR RELATIONSHIPS
BETWEEN OR AMONG THE COMPANIES, ON THE ONE HAND, AND THE LENDERS AND/OR THE
AGENT, ON THE OTHER HAND, RELATING TO ANY OR ALL OF THE DOCUMENTS,
TRANSACTIONS, ACTIONS OR OMISSIONS REFERENCED IN CLAUSE (I) HEREOF. THE
EXECUTION OF THIS AGREEMENT BY EACH COMPANY SHALL CONSTITUTE A RATIFICATION,
ADOPTION, AND CONFIRMATION BY SUCH PARTY OF THE FOREGOING GENERAL RELEASE OF
ALL CLAIMS AGAINST THE RELEASEES WHICH ARE BASED IN WHOLE OR IN PART ON FACTS,
WHETHER OR NOT NOW KNOWN OR UNKNOWN, EXISTING ON OR PRIOR TO THE EXECUTION OF
THIS AGREEMENT. IN ENTERING INTO THIS AGREEMENT, EACH COMPANY CONSULTED WITH,
AND HAS BEEN REPRESENTED BY, LEGAL COUNSEL AND EXPRESSLY DISCLAIMS ANY RELIANCE
ON ANY REPRESENTATIONS, ACTS OR OMISSIONS BY ANY OF THE RELEASEES AND HEREBY
AGREES AND ACKNOWLEDGES THAT THE VALIDITY AND EFFECTIVENESS OF THE RELEASES SET
FORTH ABOVE DO NOT DEPEND IN ANY WAY ON ANY SUCH REPRESENTATIONS, ACTS OR
OMISSIONS OR THE ACCURACY, COMPLETENESS OR VALIDITY HEREOF. THE PROVISIONS OF
THIS SECTION SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT, ANY TRANSACTION
DOCUMENT, AND PAYMENT IN FULL OF THE OBLIGATIONS UNDER THE TRANSACTION
DOCUMENTS.


                    (b)
EACH COMPANY HEREBY AGREES THAT IT SHALL BE JOINTLY AND SEVERALLY OBLIGATED TO
INDEMNIFY AND HOLD THE RELEASEES


10





HARMLESS WITH RESPECT TO
ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER
INCURRED BY THE RELEASEES, OR ANY OF THEM, WHETHER DIRECT, INDIRECT OR
CONSEQUENTIAL, AS A RESULT OF OR ARISING FROM OR RELATING TO ANY PROCEEDING BY,
OR ON BEHALF OF ANY PERSON, INCLUDING, WITHOUT LIMITATION, THE RESPECTIVE OFFICERS,
DIRECTORS, AGENTS, TRUSTEES, CREDITORS, PARTNERS OR SHAREHOLDERS OF ANY
COMPANY, OR ANY OF THEIR RESPECTIVE SUBSIDIARIES, WHETHER THREATENED OR
INITIATED, IN RESPECT OF ANY CLAIM FOR LEGAL OR EQUITABLE REMEDY UNDER ANY
STATUTE, REGULATION OR COMMON LAW PRINCIPLE ARISING FROM OR IN CONNECTION WITH
THE NEGOTIATION, PREPARATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION
AND ENFORCEMENT OF THE TRANSACTION DOCUMENTS, THIS AGREEMENT OR ANY OTHER
DOCUMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH; PROVIDED, THAT NO
COMPANY SHALL HAVE ANY OBLIGATION TO INDEMNIFY OR HOLD HARMLESS ANY RELEASEE
HEREUNDER WITH RESPECT TO LIABILITIES TO THE EXTENT THEY RESULT FROM THE
WILLFUL MISCONDUCT OF THAT RELEASEE AS FINALLY DETERMINED BY A COURT OF
COMPETENT JURISDICTION. IF AND TO THE EXTENT THAT THE FOREGOING UNDERTAKING MAY
BE UNENFORCEABLE FOR ANY REASON, EACH COMPANY AGREES TO MAKE THE MAXIMUM
CONTRIBUTION TO THE PAYMENT AND SATISFACTION THEREOF WHICH IS PERMISSIBLE UNDER
APPLICABLE LAW. THE FOREGOING INDEMNITY SHALL SURVIVE THE TERMINATION OF THIS
AGREEMENT, ANY TRANSACTION DOCUMENT, AND THE PAYMENT IN FULL OF THE OBLIGATIONS
UNDER THE TRANSACTION DOCUMENTS.


                    (c)
EACH COMPANY, ON BEHALF OF ITSELF AND ITS SUCCESSORS, ASSIGNS, AND OTHER LEGAL
REPRESENTATIVES, HEREBY ABSOLUTELY, UNCONDITIONALLY AND IRREVOCABLY, COVENANTS
AND AGREES WITH AND IN FAVOR OF EACH RELEASEE THAT IT WILL NOT SUE (AT LAW, IN
EQUITY, IN ANY REGULATORY PROCEEDING OR OTHERWISE) ANY RELEASEE ON THE BASIS OF
ANY CLAIM RELEASED, REMISED AND DISCHARGED BY ANY COMPANY PURSUANT TO SECTION
HEREOF. IF ANY COMPANY OR ANY OF ITS SUCCESSORS, ASSIGNS OR OTHER LEGAL
REPRESENTATIVES VIOLATES THE FOREGOING COVENANT, EACH COMPANY, FOR ITSELF AND
ITS SUCCESSORS, ASSIGNS AND LEGAL REPRESENTATIVES, AGREES TO PAY, IN ADDITION
TO SUCH OTHER DAMAGES AS ANY RELEASEE MAY SUSTAIN AS A RESULT OF SUCH
VIOLATION, ALL ATTORNEYS’ FEES AND COSTS INCURRED BY ANY RELEASEE AS A RESULT
OF SUCH VIOLATION.


          9.
Representations and Warranties of the Companies. To induce each Lender
and the Agent to execute and deliver this Agreement, each Company represents,
warrants and covenants that:


                    (a)
The execution, delivery and performance by each Company of this Agreement and
all documents and instruments delivered in connection herewith have been duly
authorized by all necessary corporate action required on its part, and this
Agreement and all


11





documents and instruments
delivered in connection herewith are legal, valid and binding obligations of
such Company enforceable against such Company in accordance with its terms
except as the enforcement thereof may be subject to (i) the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally and (ii) general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law). 


                    (b)
Except with respect to the Existing Events of Default, each of the
representations and warranties set forth in the Transaction Documents is true
and correct in all material respects (without duplication of any materiality
qualifier contained therein) on and as of the date hereof as if made on the
date hereof, except to the extent such representations and warranties expressly
relate to an earlier date, in which case such representations and warranties
shall be true and correct in all material respects (without duplication of any
materiality qualifier contained therein) as of such earlier date, and each of the
agreements and covenants in the Transaction Documents is hereby reaffirmed with
the same force and effect as if each were separately stated herein and made as
of the date hereof.


                    (c)
Neither the execution, delivery and performance of this Agreement and all
documents and instruments delivered in connection herewith nor the consummation
of the transactions contemplated hereby or thereby does or shall contravene,
result in a breach of, or violate (i) any provision of any Company’s corporate
charter, bylaws, operating agreement or other governing documents, (ii) any law
or regulation, or any order or decree of any court or government
instrumentality or (iii) any mortgage, deed of trust, lease, agreement or other
instrument to which any Company is a party, or by which any Company or its
property is bound.


                    (d)
As of the date of this Agreement, except for the Existing Events of Default, no
Event of Default has occurred or is continuing under this Agreement or any
other Transaction Document.


                    (e)
The Agent’s and the Lender’s security interests in the Collateral continue to
be valid, binding and enforceable first-priority security interests which
secure the obligations under the Transaction Documents and no tax or judgment
liens are currently on record against any Company.


                    (f)
Except with respect to the Existing Events of Default, any misrepresentation of
a Company, or any failure of a Company to comply with the covenants, conditions
and agreements contained in any agreement, document or instrument executed or
delivered by any Company with, to or in favor of any Company shall constitute a
Forbearance Default hereunder and an immediate Event of Default under the
Financing Agreement.


                    (g)
The recitals in this Agreement are true and correct.


          10.
Ratification of Liability. Each Company, as debtor, grantor, pledgor,
guarantor, assignor, or in other similar capacity in which such party grants
liens or security interests in its properties or otherwise acts as an
accommodation party or guarantor, as the case may be, under the Transaction
Documents, hereby ratifies and reaffirms all of its payment and performance
obligations and obligations to indemnify, contingent or otherwise, under each
Transaction


12





Document to which such
party is a party, and each such party hereby ratifies and reaffirms its grant
of liens on or security interests in its properties pursuant to such
Transaction Documents to which it is a party as security for the obligations
under or with respect to the Financing Agreement, the Term Note and the other
Transaction Documents, and confirms and agrees that such liens and security
interests hereafter secure all of the obligations under the Transaction Documents,
including, without limitation, all additional obligations hereafter arising or
incurred pursuant to or in connection with this Agreement or any Transaction
Document. Each Company further agrees and reaffirms that the Transaction
Documents to which it is a party now apply to all obligations as modified
hereby (including, without limitation, all additional obligations hereafter
arising or incurred pursuant to or in connection with this Agreement or any
Transaction Document). Each such party (a) further acknowledges receipt of a
copy of this Agreement and all other agreements, documents, and instruments
executed or delivered in connection herewith, (b) consents to the terms
and conditions of same, and (c) agrees and acknowledges that each of the Transaction
Documents, as modified hereby, remains in full force and effect and is hereby
ratified and confirmed. Except as expressly provided herein, the execution of
this Agreement shall not operate as a waiver of any right, power or remedy of
any Lender or the Agent, nor constitute a waiver of any provision of any of the
Transaction Documents nor constitute a novation of any of the obligations under
the Transaction Documents. 


          11.
Reference to and Effect Upon the Transaction Documents.


                    (a)
Except as specifically amended hereby, all terms, conditions, covenants,
representations and warranties contained in the Transaction Documents, and all
rights of the Lenders and the Agent and all of the obligations under the
Transaction Documents, shall remain in full force and effect. Each Company
hereby confirms that the Transaction Documents are in full force and effect,
and that no Company has any right of setoff, recoupment or other offset or any
defense, claim or counterclaim with respect to any Transaction Document or the
Companies’ obligations thereunder.


                    (b)
Except as expressly set forth herein, the execution, delivery and effectiveness
of this Agreement and any consents or waivers set forth herein shall not
directly or indirectly: (i) create any obligation to make any further loans or
to continue to defer any enforcement action after the occurrence of any Event
of Default (including, without limitation, any Forbearance Default); (ii)
constitute a consent or waiver of any past, present or future violations of any
provisions of this Agreement and the Transaction Documents; (iii) amend, modify
or operate as a waiver of any provision of any Transaction Document or any
right, power or remedy of any Lender or the Agent; (iv) constitute a consent to
any merger or other transaction or to any sale, restructuring or refinancing
transaction; or (v) constitute a course of dealing or other basis for altering
any obligations under the Transaction Documents or any other contract or instrument.
Except as expressly set forth herein, each Lender and the Agent reserve all of
their rights, powers, and remedies under the Transaction Documents and
applicable law. All of the provisions of the Transaction Documents, including,
without limitation, the time of the essence provisions, are hereby reiterated,
and if ever waived previously, are hereby reinstated.


                    (c)
From and after the Forbearance Effective Date, (i) the term “Agreement” in the
Financing Agreement, and all references to the Financing Agreement in any
Transaction Document shall mean the Financing Agreement, as amended by this
Agreement, and (ii) the term


13





“Transaction Documents”
defined in the Financing Agreement shall include, without limitation, this
Agreement and any agreements, instruments and other documents executed or
delivered in connection herewith.


                    (d)
Neither any Lender nor the Agent has waived, is by this Agreement waiving, or
has any intention of waiving (regardless of any delay in exercising such rights
and remedies), any Event of Default or Forbearance Default which may be
continuing on the date hereof or any Event of Default (including, without
limitation, any Third Forbearance Event of Default) or Forbearance Default
which may occur after the date hereof (whether the same or similar to the
Existing Events of Defaults or otherwise). Neither any Lender nor the Agent has
agreed to forbear with respect to any of its rights or remedies concerning any
Event of Default or Forbearance Default (other than, during the Forbearance
Period, the Existing Events of Default solely to the extent expressly set forth
herein), which may have occurred or are continuing as of the date hereof, or
which may occur after the date hereof.


                    (e)
Each Company agrees and acknowledges that the Lenders’ and the Agent’s
agreement to forbear from exercising certain of their default-related rights
and remedies with respect to the Existing Events of Default during the
Forbearance Period does not in any manner whatsoever limit the Lenders’ or the
Agent’s right to insist upon strict compliance by the Companies with this
Agreement or any Transaction Document during the Forbearance Period, except as
expressly set forth herein.


                    (f)
This Agreement shall not be deemed or construed to be a satisfaction,
reinstatement, novation or release of the Transaction Documents.


          12.
Costs and Expenses. In addition to, and not in lieu of, the terms of the
Transaction Documents relating to the reimbursement of the Lenders’ and the
Agent’s fees and expenses, the Companies shall reimburse (without duplication
of any fees and expenses paid with the proceeds of the Forbearance Fee) each
Lender and the Agent, as the case may be, promptly on demand for all fees,
costs, charges and expenses, including the fees, costs and expenses of counsel
and other expenses incurred in connection with this Agreement and any other
agreements and documents executed or delivered in connection with this
Agreement.


          13.
Governing Law; Jurisdiction. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
the internal laws of the State of Illinois, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of Illinois
or any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of Illinois. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting
in Chicago, Illinois, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding
is improper. Each party hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process


14





and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law.


          14.
No Strict Construction.
The language used in this Agreement will be deemed to be the language chosen by
the parties to express their mutual intent, and no rules of strict construction
will be applied against any party.


          15.
Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Signatures of the
parties hereto transmitted by facsimile or by electronic media or similar means
shall be deemed to be their original signature for all purposes.


          16.
Agent and Lenders are Creditors Only. Neither for purposes of this
Agreement nor otherwise has either any Lender or the Agent agreed or consented
to be an agent, principal, participant, joint venturer, partner,
instrumentality or alter ego of any of the Companies. Neither any Lender nor
the Agent is, or shall be deemed to be, in control of any of the Companies, its
respective operations or properties, nor is any Lender or the Agent acting as a
“responsible person” with respect to the operation and management of any of the
Companies or its respective properties.


          17.
Severability. The invalidity, illegality, or unenforceability of any
provision in or obligation under this Agreement in any jurisdiction shall not
affect or impair the validity, legality, or enforceability of the remaining
provisions or obligations under this Agreement or of such provision or
obligation in any other jurisdiction. If feasible, any such offending provision
shall be deemed modified to be within the limits of enforceability or validity;
provided
that if the offending provision cannot be so modified, it shall be stricken and
all other provisions of this Agreement in all other respects shall remain valid
and enforceable.


          18.
Time of Essence. Time is of the essence in the performance of each of
the obligations of the Companies hereunder and with respect to all conditions
to be satisfied by such parties.


          19.
No Other Creditor Action. The Lenders’ and the Agent’s agreement to
forbear hereunder are expressly conditioned upon (i) the holders of the
Affiliate Notes refraining from taking any Enforcement Action (as defined in
each of the Affiliate Subordination Agreements) and (ii) all other creditors of
the Companies (including, without limitation, trade creditors and subordinated
secured and unsecured creditors) having a valid claim in excess of $100,000
refraining from accelerating such claim or otherwise taking any action against
any Company or the Collateral to collect the full amount of its claim
(including, without limitation, acceleration of indebtedness) during the
Forbearance Period to collect its claim. In the event that any such creditor
takes any such action (any such action, a “Subordinated Creditor Action”), the
Forbearance Period shall immediately terminate, without notice or demand.
Subject to the limitations set forth in Section 6(b) hereof, the Companies may
continue to make payments to such creditors in the ordinary course of business
during the Forbearance Period.


          20.
Further Assurances. The parties hereto shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other


15





agreements,
certificates, instruments and documents, as any other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby.


          21.
Headings. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.


          22.
Notices. All notices, requests, and demands to or upon the respective
parties hereto shall be given in accordance with the Financing Agreement.


          23.
Reserved. 


          24.
Waivers by the Companies. EACH COMPANY HEREBY WAIVES (A) IF THIS
AGREEMENT IS FOUND NOT TO BE SUBJECT TO ARBITRATION, THE RIGHT TO TRIAL BY JURY
IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR
RELATED TO THIS AGREEMENT, ANY TRANSACTION DOCUMENTS, THE OBLIGATIONS UNDER THE
TRANSACTION DOCUMENTS OR THE COLLATERAL; (B) PRESENTMENT, DEMAND AND PROTEST,
AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NONPAYMENT, MATURITY, RELEASE WITH
RESPECT TO ALL OR ANY PART OF THE OBLIGATIONS UNDER THE TRANSACTION DOCUMENTS
OR ANY COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS,
CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY THE LENDER OR THE AGENT ON
WHICH ANY COMPANY MAY IN ANY WAY BE LIABLE AND HEREBY RATIFIES AND CONFIRMS
WHATEVER THE LENDER OR THE AGENT MAY DO IN THIS REGARD; (C) NOTICE (INCLUDING
ALL NOTICES REQUIRED UNDER THE UCC) PRIOR TO TAKING POSSESSION OR CONTROL OF
THE COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT
PRIOR TO ALLOWING THE LENDER OR THE AGENT TO EXERCISE ANY OF THEIR RESPECTIVE
RIGHTS AND REMEDIES; (D) THE RIGHT TO NOTIFICATION OF DISPOSITION OF COLLATERAL
UNDER SECTION 9-611 OF THE UCC (AND EACH COMPANY AGREES THAT IT HAS AUTHORIZED SUCH
WAIVER IN ACCORDANCE WITH SECTION 9-624 OF THE UCC); (E) ALL RIGHTS TO REDEEM
COLLATERAL UNDER SECTION 9-623 OF THE UCC (AND EACH COMPANY AGREES THAT IT HAS
THE AUTHORIZED SUCH WAIVER IN ACCORDANCE WITH SECTION 9-624 OF THE UCC), (F)
THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS AND ALL RIGHTS
WAIVABLE UNDER ARTICLE 9 OF THE UNIFORM COMMERCIAL CODE; (G) ANY RIGHT ANY
COMPANY MAY HAVE UPON PAYMENT IN FULL OF THE OBLIGATIONS UNDER THE TRANSACTION
DOCUMENTS TO REQUIRE THE LENDER OR THE AGENT TO TERMINATE ITS SECURITY INTEREST
IN THE COLLATERAL OR IN ANY OTHER PROPERTY OF ANY COMPANY UNTIL TERMINATION OF
THE FINANCING AGREEMENT IN ACCORDANCE WITH ITS TERMS AND THE EXECUTION BY THE
COMPANIES, AND BY ANY PERSON WHO PROVIDES FUNDS TO THE COMPANIES WHICH ARE USED
IN WHOLE OR IN PART TO SATISFY THE OBLIGATIONS UNDER THE TRANSACTION DOCUMENTS,
OF AN AGREEMENT INDEMNIFYING THE LENDERS AND THE AGENT FROM ANY LOSS OR DAMAGE
ANY SUCH PARTY MAY INCUR AS THE RESULT OF DISHONORED CHECKS OR


16





 OTHER ITEMS OF PAYMENT RECEIVED BY SUCH PARTY
FROM THE COMPANIES, OR ANY ACCOUNT DEBTOR AND APPLIED TO THE OBLIGATIONS AND
RELEASING AND INDEMNIFYING, IN THE SAME MANNER AS DESCRIBED IN SECTION 7 OF
THIS AGREEMENT, THE RELEASEES FROM ALL CLAIMS ARISING ON OR BEFORE THE DATE OF
SUCH TERMINATION STATEMENT; AND (H) NOTICE OF ACCEPTANCE HEREOF, AND THE
COMPANIES EACH ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL
INDUCEMENT TO THE AGENT’S AND LENDERS’ ENTERING INTO THIS AGREEMENT AND THAT
SUCH PARTIES ARE RELYING UPON THE FOREGOING WAIVERS IN THEIR FUTURE DEALINGS
WITH THE COMPANIES. EACH OF THE COMPANIES WARRANTS AND REPRESENTS THAT IT HAS
REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND
VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.


          25.
Assignments; No Third Party Beneficiaries. This Agreement shall be
binding upon and inure to the benefit of each of the Companies, the Lenders,
the Agent and their respective successors and assigns; provided that no Company
shall be entitled to delegate any of its duties hereunder and shall not assign
any of its rights or remedies set forth in this Agreement without the prior
written consent of the Agent in its sole discretion. No Person other than the
parties hereto (and in the case of Section 7 hereof, the Releasees) shall have
any rights hereunder or be entitled to rely on this Agreement and all third-party
beneficiary rights (other than the rights of the Releasees under Section 7
hereof) are hereby expressly disclaimed.


          26.
Final Agreement. This Agreement sets forth in full the terms of
agreement between the parties hereto with respect to the forbearance, and is
intended to be the full, complete, and exclusive contract governing those
matters, superseding all other discussions, promises, representations,
warranties, agreements, and understandings between the parties with respect
thereto. No term of this Agreement may be modified or amended, nor may any
rights thereunder be waived, except in a writing signed by the party against
whom enforcement of the modification, amendment, or waiver is sought. Any
waiver of any condition in, or breach of, any of the foregoing in a particular
instance shall not operate as a waiver of other or subsequent conditions or
breaches of the same or a different kind. The Lenders or the Agent’s exercise
or failure to exercise any rights or remedies under any of the foregoing in a
particular instance shall not operate as a waiver of its right to exercise the
same or different rights and remedies in any other instances. There are no oral
agreements among the parties hereto that are inconsistent with the terms of
this Agreement.


          27.
Savings Clause. In no contingency or event shall the interest rate or
fees charged pursuant to the terms of this Agreement or any other Transaction
Document exceed the highest rate permissible under any law which a court of
competent jurisdiction shall, in a final determination, deem applicable hereto.
In the event that such a court determines that the Holders have received
interest and/or fees hereunder or any other Transaction Document in excess of
the highest applicable rate, the amount of such excess interest or fees shall
be applied against the principal amount then outstanding under the Notes to the
extent permitted by applicable law, and


17





any excess interest or
fees remaining after such application shall be refunded promptly to the
Borrower.


 [Remainder
of Page Intentionally Left Blank; Signature Page Follows]


18






          IN
WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the day and year first above written.


	
  

 	
  

 
	
  

 	
 COMPANIES:

 
	
  

 	
  

 
	
  

 	
 WAVE2WAVE COMMUNICATIONS, INC., a Delaware corporation

 
	
  

 	
  

 
	
  

 	
 By:/s/ Eric Mann

 
	
  

 	
 Name: Eric Mann

 
	
  

 	
 Title: Chief Financial
 Officer 

 
	
  

 	
  

 
	
  

 	
 RNK, INC., a Massachusetts corporation

 
	
  

 	
  

 
	
  

 	
 By:/s/ Eric Mann

 
	
  

 	
 Name: Eric Mann

 
	
  

 	
 Title: Treasurer

 
	
  

 	
  

 
	
  

 	
 WAVE2WAVE VOIP COMMUNICATIONS, LLC, a Delaware limited liability company

 
	
  

 	
  

 
	
  

 	
 By:/s/ Eric Mann

 
	
  

 	
 Name: Eric Mann

 
	
  

 	
 Title: Chief Financial
 Officer 

 
	
  

 	
  

 
	
  

 	
 WAVE2WAVE DATA COMMUNICATIONS, LLC, a Delaware limited liability company

 
	
  

 	
  

 
	
  

 	
 By:/s/ Eric Mann

 
	
  

 	
 Name: Eric Mann

 
	
  

 	
 Title: Chief Financial
 Officer 

 
	
  

 	
  

 
	
  

 	
 WAVE2WAVE COMMUNICATIONS MID-WEST REGION, LLC, a Delaware limited liability company

 
	
  

 	
  

 
	
  

 	
 By:/s/ Eric Mann

 
	
  

 	
 Name: Eric Mann

 
	
  

 	
 Title: Chief Financial
 Officer 

 













	
  

 	
  

 
	
  

 	
 RNK VA, LLC, a Virginia limited liability company

 
	
  

 	
  

 
	
  

 	
 By: /s/ Eric Mann

 
	
  

 	
 Name: Eric Mann

 
	
  

 	
 Title: Treasurer

 
	
  

 	
  

 
	
  

 	
 AGENT:

 
	
  

 	
  

 
	
  

 	
 VICTORY
 PARK MANAGEMENT, LLC

 
	
  

 	
 By: /s/ Matthew Ray

 
	
  

 	
 Name: Matthew Ray

 
	
  

 	
 Title: Manager

 
	
  

 	
  

 
	
  

 	
 LENDERS:

 
	
  

 	
  

 
	
  

 	
 VICTORY
 PARK CREDIT OPPORTUNITIES MASTER FUND, LTD.

 
	
  

 	
  

 
	
  

 	
 By: Victory Park Capital Advisors, LLC

 
	
  

 	
 Its: Investment Manager

 
	
  

 	
  

 
	
  

 	
 By: /s/ Scott R. Zemnick

 
	
  

 	
 Name: Scott R. Zemnick

 
	
  

 	
 Title: General Counsel

 









Annex A:


Schedule C to Security Agreement


All commercial tort
claims in favor of any Credit Party arising out of the ongoing disputes with
Verizon New England, Inc.