UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549

FORM 10-K

|X|  ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL
YEAR ENDED DECEMBER 31, 2007.

|_| TRANSITION
  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
  For the transition period from ____________________ to ____________________

Commission file
number: 0-27778

PREMIERE GLOBAL
SERVICES, INC. (Exact name of registrant as
specified in its charter)

|Georgia                                                        | 59-3074176                          
|-------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)

3280 Peachtree Road,
N.W., The Terminus Building, Suite 1000, Atlanta, Georgia 30305 (address of principal executive office) (Registrants telephone number, including area code):
(404) 262-8400

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

|Common Stock, Par Value $0.01 Per Share | New York Stock Exchange                    
|--------------------------------------- | -------------------------------------------
|(Title of each class)                   | (Name of each exchange on which registered)

Securities
registered pursuant to Section 12(g) of the Act: None (Title of class)

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405
of the Securities Act. |_| Yes   |X| No

Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or
Section 15(d) of the Act. |_| Yes   |X| No

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

Indicate
by check mark if disclosure of delinquent  filers  pursuant to Item 405 of Regulation S-K
(§229.405 of this chapter) is not  contained  herein,  and  will not be  contained,  to
the best of  registrants  knowledge,  in  definitive  proxy or  information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form
10-K.   |_|

Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated  filer,
a non-accelerated  filer or a smaller reporting company.  See the definitions of large
accelerated  filer,  accelerated filer and smaller reporting company in Rule 12b-2
of the Exchange Act (Check one):

Large accelerated filer |X|      Accelerated filer |_|      Non-accelerated filer |_|      Smaller
reporting company |_|

(Do not check if a
smaller reporting company)

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act). Yes |_|  No |X|

The
aggregate market value of voting and non-voting common equity held by  non-affiliates
 computed by reference to the price at which the common  equity was last sold,  or the
average bid and ask price of such common  equity,  on June 30, 2007 as reported by the
New York Stock Exchange was  approximately  $742,993,344.  As of February 22, 2008,
 there were 61,782,588  shares of the registrants common stock outstanding.

List
hereunder the following  documents if incorporated by reference and the Part of the Form
10-K (e.g., Part I, Part II, etc.) into which the document is  incorporated.  Portions of
the  registrants  proxy  statement for its 2007 annual meeting of shareholders are
incorporated by reference in Part III of this Form 10-K.

| |  | 
| |  | 

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INDEX

|           |                                                                                                                          | Page
|---------- | ------------------------------------------------------------------------------------------------------------------------ | ----
|Part I     |                                                                                                                          |     
|Item 1.    | Business                                                                                                                 | 1   
|Item 1A.   | Risk Factors                                                                                                             | 10  
|Item 1B    | Unresolved Staff Comments                                                                                                | 21  
|Item 2.    | Properties                                                                                                               | 21  
|Item 3.    | Legal Proceedings                                                                                                        | 21  
|Item 4.    | Submission of Matters to
      a Vote of Security Holders                                                                | 22  
|          
|Part II   
|Item 5.    | Market for Registrants
      Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
      Securities | 23  
|Item 6.    | Selected Financial Data                                                                                                  | 25  
|Item 7.    | Managements Discussion
      and Analysis of Financial Condition and Results of Operations                              | 26  
|Item 7A.   | Quantitative and Qualitative
      Disclosures About Market Risk                                                         | 45  
|Item 8.    | Financial Statements and
      Supplementary Data                                                                        | 46  
|Item 9.    | Changes in and Disagreements
      with Accountants on Accounting and Financial Disclosure                               | 74  
|Item 9A.   | Controls and Procedures                                                                                                  | 74  
|Item 9B.   | Other Information                                                                                                        | 77  
|          
|Part III  
|Item 10.   | Directors, Executive Officers
      and Corporate Governance                                                             | 78  
|Item 11.   | Executive Compensation                                                                                                   | 78  
|Item 12.   | Security Ownership of Certain
      Beneficial Owners and Management and Related Stockholder Matters                     | 78  
|Item 13.   | Certain Relationships and
      Related Transactions and Director Independence                                           | 78  
|Item 14.   | Principal Accountant Fees
      and Services                                                                             | 78  
|          
|Part IV   
|Item 15.   | Exhibits and Financial
      Statement Schedules                                                                         | 79  
|          
|Signatures |                                                                                                                          | 86  

| |  | 
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FORWARD-LOOKING
STATEMENTS

When
used in this annual report on Form 10-K and elsewhere by us or by management from time to
time, the words  believes,           anticipates,  expects, will, may, should, intends, plans, estimates,  predicts,  potential,  continue           and
 similar  expressions  are  intended  to  identify  forward-looking  statements
 concerning  our  operations,  economic            performance and financial condition.
 For those statements,  we claim the protection of the safe harbor for forward-looking
           statements  contained in the Private  Securities  Litigation  Reform Act of
1995. These statements are based on a number of            assumptions and estimates that
are inherently subject to significant risks and uncertainties,  many of which are beyond
our            control,  and reflect  future  business  decisions  which are subject to
change.  A variety of factors  could cause  actual            results to differ
materially from those anticipated in our forward-looking statements, including the
following factors:

| |  |  | Our
ability to compete based on price and against our existing and future competitors;
| | - |  | --------------------------------------------------------------------------------------

| |  |  | Our
ability to respond to rapid technological change and the development of alternatives to
our services;
| | - |  | ---------------------------------------------------------------------------------------------------------

| |  |  | Market
acceptance of new services and enhancements to existing services;
| | - |  | ------------------------------------------------------------------------

| |  |  | Costs
or difficulties related to the integration of any new or acquired businesses and
technologies;
| | - |  | ----------------------------------------------------------------------------------------------------

| |  |  | Concerns
 regarding the security of transactions  and  transmitting  confidential  information
over the Internet and public            networks;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Our
ability to upgrade our equipment or increase our network capacity to meet customer
demands;
| | - |  | -----------------------------------------------------------------------------------------------

| |  |  | Our
services may be  interrupted  due to failure of the  platforms  and network
 infrastructure  utilized in providing  our            services;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Continued
weakness in our legacy broadcast fax services;
| | - |  | --------------------------------------------------------

| |  |  | Our
ability to efficiently utilize or re-negotiate our telecommunications supply agreements;
| | - |  | --------------------------------------------------------------------------------------------

| |  |  | Increased
leverage may harm our financial condition and results of operations;
| | - |  | ------------------------------------------------------------------------------

| |  |  | Our
 dependence on our  subsidiaries  for cash flow may  negatively  affect our business and
our ability to pay amounts due            under our indebtedness;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Our
financial performance could cause future write-downs of goodwill or other intangible
assets in future periods;
| | - |  | ------------------------------------------------------------------------------------------------------------------

| |  |  | Assessment
of income, state sales and other taxes for which we have not accrued;
| | - |  | --------------------------------------------------------------------------------

| |  |  | Our
ability to attract and retain qualified key personnel;
| | - |  | ----------------------------------------------------------

| |  |  | Our
ability to successfully identify suitable acquisition candidates, complete acquisitions,
 integrate acquired operations            into our existing operations or expand into new
markets;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Our
ability to protect our proprietary technology and intellectual property rights;
| | - |  | -----------------------------------------------------------------------------------

| |  |  | Possible
adverse results of pending or future litigation or adverse results of current or future
infringement claims;
| | - |  | ---------------------------------------------------------------------------------------------------------------------

| |  |  | Regulatory
or legislative changes may adversely affect our business;
| | - |  | --------------------------------------------------------------------

| |  | 
| |  | 

---

| |  |  | Possible
  adverse  results  if  our  services  become  subject  to  government   regulations
  applicable  to  traditional            telecommunications service providers;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Risks
associated with expansion of our international operations and fluctuations in currency
exchange rates;
| | - |  | ------------------------------------------------------------------------------------------------------------

| |  |  | Domestic
and international  terrorist  activity,  war and political  instability may adversely
affect the level of services            utilized by our customers and the ability of
those customers to pay for services utilized;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | General
economic or business  conditions,  internationally,  nationally or in the local
 jurisdiction in which we are doing            business, may be less favorable than
expected;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Factors
described under the caption Item 1A. Risk Factors in this annual report on Form 10-K;
and
| | - |  | ---------------------------------------------------------------------------------------------------

| |  |  | Factors
described from time to time in our press releases,  reports and other filings made with
the Securities and Exchange            Commission.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------

We caution that these factors are
not exclusive.  Consequently,  all of the  forward-looking  statements made in this
annual report on Form 10-K and in other  documents  filed with the SEC are  qualified by
these  cautionary  statements.  Readers are  cautioned  not to place  undue  reliance  on
these  forward-looking  statements,  which  speak  only as of the  date of this  Form
 10-K.  We take on no obligation to publicly  release the results of any revisions to
these  forward-looking  statements  that may be made to reflect events or circumstances
after the date of this Form 10-K, or the date of the statement, if a different date.

| |  | 
| |  | 

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Item 1.    Business

Overview

Premiere
Global Services,  Inc. is a global provider of applied communication  technologies that
help businesses automate and improve their business processes.

Our
Premiere Global Communications Operating System (PGiCOS) delivers multiple
industry- and function-specific business applications. We offer these applications
in an on-demand model, meaning our customers are not burdened with the up-front expense
associated with purchasing or installing hardware and software. We host our applications
on our enterprise-class platforms, which are comprised of server and network operations
centers located worldwide. These platforms contain proprietary software and a
variety of leading communication technologies, including Web and audio conferencing,
e-mail, short message services (SMS), IP fax, automated speech, mobile and other
technologies.

We
offer easy access to PGiCOS through our Web portal, PGiConnect.com, which enables our
customers to use our applications directly from their desktop or mobile device. We also
offer open standards access to these applications via our application programming
interface (API) suite, enabling our customers and technology partners to integrate
PGiCOS capabilities directly into their enterprise systems and existing business
processes.

For
sales and marketing  purposes,  our applied  communication  technologies  are grouped
into five  solution  sets:  Conferencing  &Collaboration,  Desktop  Document
 Solutions,  Enterprise  Document  Solutions,  Notifications  & Reminders and
 eMarketing.  Our strategy is to continue to develop innovative new vertical and
horizontal business  applications to better address the needs of our enterprise customers
and to increase the scope and size of the markets we address.

In
2007, our base of greater than 50,000 enterprise customers, including
approximately 95% of the Fortune500, used PGiCOS applications to improve or
automate their existing business processes, or to create new and better ways of doing
business.

We
have a multi-channel sales approach with dedicated sales and marketing professionals
within each of our five solution sets. We sell directly to customers through these sales
and marketing professionals and indirectly through agents, wholesalers and strategic
partners. Additionally, PGiConnect.comenables customers to acquire and utilize our
PGiCOS applications online, as well as manage and administer their accounts with us.

In
addition  to growing  our  business  organically,  we have  utilized  our  operating
 cash flow and bank line of credit to acquire complementary companies and technologies
that we believe increase our market share and bring to us additional customers,
 applications and sales personnel.  By applying our scale and purchasing  power to these
acquired  companies,  we believe we can often reduce their  operating costs and generate
additional earnings.

In
2007, we completed a self-tender  offer  pursuant to which we  repurchased  and retired
 approximately  9.7 million  shares of our common stock for an  aggregate  purchase
 price of  approximately  $122.5  million.  Combined  with shares we bought under our
open market share repurchase program, we repurchased approximately 15% of our shares
outstanding during 2007.

North
 America net revenue was $356.7  million in 2007,  $319.3  million in 2006 and $321.4
 million in 2005.  Europe net revenue was $103.3 million in 2007,  $93.0 million in 2006
and $99.1 million in 2005.  Asia Pacific net revenue was $99.7 million in 2007,  $84.2
million in 2006 and $77.0  million  in 2005.  In 2007,  sales in North  America,  Europe
 and Asia  Pacific  accounted  for  63.7%,  18.5% and 17.8% of our consolidated  net
 revenues,  respectively.  Financial  information  about  our  geographic  areas  can be
found in Note 17 to our  consolidated financial statements for the year ended December
31, 2007 included in this annual report.

We
were incorporated in Florida in 1991 and reincorporated in Georgia in 1995. As of
December 31, 2007, we have  approximately  2,430 employees  conducting  business in 23
countries in North  America,  Europe and Asia  Pacific.  Our  corporate  headquarters
 are located at 3280 Peachtree Road, NW, The Terminus Building, Suite 1000, Atlanta, GA
30305, and our telephone number is (404) 262-8400.

| | 1 | 
| | - | 

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Industry Background

From
 innovation and  development,  to the  acquisition,  up-sale and ongoing care of
customers,  to billing and  collections,  every company around the world conducts a vast
number of business  processes every day. Our goal is to provide a broad suite of applied
 communication technologies to address all of these daily business processes from a
single on-demand platform.

By
using our PGi  Communications  Operating  System  applications,  we believe our
 enterprise  customers can improve less  efficient business  processes,  automate manual
or paper-based  business  processes,  or create new and better ways of doing  business.
 By automating and improving a wide array of critical,  daily business  processes,  we
believe our PGiCOS solutions and applications  offer high customer value and deliver
meaningful returns on investment to our enterprise customers.

Because
the magnitude of business  processes that can be improved through the application of
 communication  technologies is immense, we believe that we have significant future
growth  opportunities.  In fact, we engaged The JAAG Group, an advisory and consulting
services firm, to conduct a survey to assess the current  market  opportunity  for our
solutions in January 2008.  This market survey  estimates our solutionsmarket
 opportunity to be nearly $10 billion in 2008,  growing to nearly $17 billion in 2012,
 representing a projected  compound  annual growth rate in excess of 14%.

Solution Sets and
Business Applications

We
go to market  with a full suite of  business  applications  that we believe  provides us
a  competitive  advantage  when            compared to single product  vendors,  which
comprise the majority of our competitive set today. Our strategy is to continue
           to develop new communication  technologies-based  business  applications  that
meet the specific  requirements of customers            within targeted industries.

Our
PGiCOS applications are grouped into the five solution sets listed below:

Conferencing & Collaboration
Solutions

Our
 Conferencing  &  Collaboration  Solutions  include a  full-suite  of  traditional
 and voice  over  Internet  protocol            (VoIP)-based audio conferencing and web
collaboration services for all forms of group meetings,  from large events, such as
           investor  relations  calls and  training  sessions,  to smaller  meetings,
 such as sales  planning  calls and project team            meetings.  Conferencing & Collaboration
 services include automated  reservationless  conferencing,  global reservationless
           conferencing with approximately 75 local access points,  operator-assisted
 event  conferencing and web  collaboration.  In            addition,  our mobile
 application,  ConferenceAnywhere,  enables users to easily access conference calls from
their mobile            devices without having to remember lengthy dial-in numbers or
passcodes.

A
few examples of our many Conferencing & Collaboration applications include:

| |  |  | Sales
meetings
| | - |  | --------------

| |  |  | Self-paced
learning
| | - |  | -------------------

| |  |  | Continuing
education
| | - |  | --------------------

| |  |  | Human
resources training
| | - |  | ------------------------

| |  |  | Investor
relations
| | - |  | ------------------

| |  |  | Town
hall meetings
| | - |  | ------------------

| |  |  | Business
continuity
| | - |  | -------------------

| | 2 | 
| | - | 

---

Desktop Document
Solutions

Our
 Desktop  Document  Solutions  include  an  easy-to-use,  automated  IP fax  application
 called  Fax2Mail.  With  this            application,  subscribers  can send and receive
faxes using their  computer and existing  e-mail account with no additional
           hardware or software required.  In addition,  our  PremiereAnywhere
 application enables mobile users to send documents and            e-mail attachments
directly from their mobile device to any fax machine in the world to be printed.

A
few examples of our many Desktop Document Solutions applications include:

| |  |  | Mortgage
application processing
| | - |  | -------------------------------

| |  |  | Pricing
updates
| | - |  | ---------------

| |  |  | Enterprise
e-mail integration
| | - |  | -----------------------------

| |  |  | Contract
automation
| | - |  | -------------------

| |  |  | Insurance
claims processing
| | - |  | ---------------------------

| |  |  | Accident
reports receipt and delivery
| | - |  | -------------------------------------

Enterprise Document
Solutions

Our
Enterprise  Document  Solutions  automate manual and  paper-based  business  processes
 through the conversion of paper            documents  into  electronic  files,  which
can be forwarded,  accessed and archived  remotely  through any existing  e-mail
           account or a web interface.  Documents can be sent as an encrypted  e-mail, an
electronic fax or made available on a secure            web interface for online
presentment.

A
few examples of our many Enterprise Document Solutions applications include:

| |  |  | Research
report distribution
| | - |  | ----------------------------

| |  |  | Stock
trade confirmations
| | - |  | -------------------------

| |  |  | Cash
management settlements
| | - |  | ---------------------------

| |  |  | Bills
of lading
| | - |  | ---------------

| |  |  | Mortgage
processing
| | - |  | -------------------

| |  |  | Electronic
invoices
| | - |  | -------------------

Notifications & Reminders
Solutions

Our
 Notifications  &  Reminders  Solutions  enable  clear  and  compelling
 communications  between  businesses  and their            constituents  via automated
 speech,  e-mail,  fax and SMS. Our  enterprise  customers can select the best delivery
 method            based on message content,  urgency,  required recipient action and
recipient preferences.  Our suite of hosted applications            provides customizable
 features,  including recipient  authentication,  personalized messages with
text-to-speech,  hot key            transfer for interactive messaging, data collection
and real-time, online summary reports.

A
few examples of our many Notifications & Reminders applications include:

| |  |  | Flight
delay notifications
| | - |  | --------------------------

| | 3 | 
| | - | 

---

| |  |  | Travel
alerts
| | - |  | -------------

| |  |  | Delivery
reminders
| | - |  | ------------------

| |  |  | Fraud
alerts
| | - |  | ------------

| |  |  | Prescription
reminders
| | - |  | ----------------------

| |  |  | Accounts
receivable management
| | - |  | ------------------------------

eMarketing Solutions

Our
eMarketing Solutions employ real-time event and customer data to create highly-relevant,
 personalized e-mail marketing            campaigns that we believe result in increased
 response rates,  improved  customer  relationships  and higher sales for our
           enterprise  customers.  Our full suite of e-mail  campaign  management  tools
and  intuitive  user  interface  empower  our            enterprise  customers  to unlock
the value of their  customer  data by  translating  it into  actionable  e-mail
 marketing            campaigns.  We led e-mail marketing vendors in our category for
market suitability in a 2006 JupiterResearch report.

A
few examples of our many eMarketing applications include:

| |  |  | Newsletters
| | - |  | -----------

| |  |  | Customer
loyalty programs
| | - |  | -------------------------

| |  |  | Customer
re-activation
| | - |  | ----------------------

| |  |  | Promotional
offers
| | - |  | ------------------

| |  |  | Electronic
coupons
| | - |  | ------------------

| |  |  | Lead
generation
| | - |  | ---------------

| |  |  | Lifecycle
relationship programs
| | - |  | -------------------------------

Customers

Today,
approximately 95% of the Fortune500, including leading commercial and investment
banks, retailers, travel and hospitality firms, health care and
technology companies, utilize our PGiCOS applications to automate and improve their
communication-centric business processes. Additionally, thousands of
smaller customers, ranging from regional law firms, to retail pharmacy chains,
to local school districts and PTAs use our solutions daily.

Our
customers apply our PGiCOS solutions to improve or automate their existing
 communication-centric business processes or            to gain a  competitive  advantage
by creating new and better ways of doing  business.  We are focused on providing  greater
           customer  value by  innovating  new  business  applications  backboned by our
existing  PGiCOS  solutions  that address the            individual needs and
requirements of targeted customer segments.

In
2008, we plan to promote new pricing models for our solutions that we believe are more
 consistent  with other on-demand            providers,  including  subscription-based
 and licensing  models.  Our sales  commission  plans are focused on  encouraging
           customer  adoption of additional  PGiCOS solutions and applications as well as
annual or multi-year  contracts with minimum            commitments.  Most of our
customer  agreements  have  initial  terms of one to three  years,  subject to automatic
 renewal            unless a customer  sends a notice of  non-renewal  prior to the end
of an initial or renewal term.  Customers may generally            terminate without
penalty,  unless their agreement  contains a

| | 4 | 
| | - | 

---

minimum revenue commitment that
would require payment by the            customer of any unused  shortfall  amount upon
 termination.  We are continuing our efforts to seek to enter into annual or
           multi-year contracts with minimum commitments.

While
our business is generally not seasonal,  we typically  experience lower levels of sales
and usage during periods that            have reduced numbers of working days. For
example,  our operating  results have  historically  decreased  during the summer
           months (particularly in our European  operations),  as well as during the
Thanksgiving,  December and New Year holidays. We            expect our  revenues  during
 these  periods  will not grow at the same rates as  compared  with other  periods of the
year            because of decreased use of our services by our enterprise customers.

Sales and Marketing

To
promote domain  expertise and a greater  understanding of our enterprise  customers  needs,
we have segmented our sales            professionals  according to our five solutions
sets.  Additionally,  we have implemented a multi-channel  sales approach to
           promote the transfer  and adoption of best  practices.  Our current  channels
of  distribution  include  global,  corporate            accounts, small and medium
businesses, indirect partners and web sales:

| |  |  | We
sell directly to customers through our approximately 820 sales, support and marketing
professionals worldwide;
| | - |  | -----------------------------------------------------------------------------------------------------------------

| |  |  | We
sell indirectly through distribution partners, including agents and resellers;
| | - |  | ---------------------------------------------------------------------------------

| |  |  | We
actively pursue strategic partners to integrate and resell our services with their own;
and
| | - |  | ----------------------------------------------------------------------------------------------

| |  |  | We
employ web-based marketing and direct telesales to generate increased activity for our
sales channels.
| | - |  | ---------------------------------------------------------------------------------------------------------

As
a service  organization,  our customer  service teams play a major role in managing
 customer  relationships  as well as            selling  additional  value-added
 services to existing  accounts.  We currently employ  approximately  850 customer
service            professionals deployed in local markets around the world.

Research and
Development

We
believe that our ability to design,  develop,  test and support  innovative  technology
 for service  enhancements  in a            timely  manner is an important  contributor
 to our  continued  success.  By innovating  new services and  enhancements  to
           existing services, we can better meet our enterprise customers needs and
position ourselves in larger market segments.

In
April 2007, we launched our web portal, PGiConnect.com, to provide on-demand access to
our services over the web. Our session initiation protocol (SIP)-based
conferencing service released in 2005 now supports greater than 100 million
minutes a month. In 2007, we also upgraded our Netspoke web conferencing
services and our text-to-speech technology in our Notifications & Reminders
Solutions.

We
devote  significant  resources to the innovation and development of new services,
 enhancements to existing services and            to our portal,  employing
 approximately  100 research and  development  professionals.  In 2005,  we opened a
 development            center in India to  continue  to develop  and  enhance
 communications  technologies-based  solutions  in a more timely and
           cost-effective  manner.  Our research and development  costs for 2007, 2006
and 2005 were $14.1 million,  $12.1 million and            $10.8 million, respectively.

Competition

We
believe the combination of communication  technologies-based solutions within the PGi
Communications Operating System is            unique to the  industry.  Our strategy is
to gain a  competitive  advantage in winning and keeping  customers by innovating
           new  technology-driven  solutions  within  the  PGiCOS.  We believe  our broad
 range of  business  process  solutions  and            applications  provide us with an
advantage  over many of our  competitors  that have more  limited  service  offerings.
 In            addition,  our global  reach  allows us to pursue  contract

| | 5 | 
| | - | 

---

opportunities  with  multinational
 enterprises  providing  an            advantage over competitors that only focus on
limited geographies.

While
we are unaware of any single  competitor  that  provides all of the  services we deliver,
 we compete with a range of            companies in each of our five solution  sets, as
well as with  internally  developed  solutions for companies who choose to
           insource these needs.  The markets for each of our solutions sets are highly
 competitive,  rapidly evolving and subject to            changing technology, shifting
customer needs and introductions of new products and services.

For
Conferencing & Collaboration  Solutions,  we compete with major  telecommunications
 service providers around the world            such as AT&T Inc.,  Verizon
 Communications,  Inc., Global Crossing Limited and international  public telephone
 companies,            such as BT Group plc. Additionally,  we compete with independent
conferencing service providers like West Corporation,  ACT            Teleconferencing,
 Inc., Westell Technologies,  Inc., Arkadin, Inc. and Genesys S.A. (which West recently
announced it will            seek to  acquire).  We also  compete with  traditional  and
 IP-based  equipment  manufacturers,  business  suite  software            providers and
application service providers,  such as Cisco Systems, Inc., Microsoft Corp., IBM
Corporation,  Adobe Systems            Incorporated,  Oracle Corporation,  Saba Software,
 Inc. and Citrix Systems,  Inc., that offer applications that enable web
           collaboration.  These  providers may attempt to leverage their  dominant
 market  positions  through  additional  technical            integration and bundled
 offerings to further expand their  presences in the  conferencing  and  collaboration
 market.  In            addition,  we have entered into  distribution  and reseller
 arrangements  with companies,  including some of the companies            listed above,
that offer competitive  conferencing and collaboration  services that could choose to
increase their emphasis            on offerings competitive to us, cease to offer some or
all of their services or our services,  or both. For example,  Cisco            Systems
 recently  acquired  WebEx  Communications,  Inc.,  and  Microsoft  offers  Microsoft®  Office
Live Meeting and web            collaboration functionality in its Microsoft Office
Communicator 2007 version.

In
Desktop Document  Solutions and Enterprise  Document  Solutions,  we compete with
companies such as Protus IP Solutions,            EasyLink Services  International
 Corporation and J2 Global Communications,  Inc. Additionally,  we compete with a range
of            equipment and software  providers that enable  enterprises to address these
 requirements  internally.  In  Notifications &           Reminders,  our competition
 includes West (which recently acquired Televox Software,  Inc. and CenterPost
 Communications,            Inc.),  as well as Varolii  Corporation  (formerly PAR3
 Communications,  Inc.)  SoundBite  Communications,  Inc. and Adeptra            Limited.
In eMarketing  Solutions,  we compete with Alliance Data Systems Corporation and Acxiom
Corporation,  as well as a            number of smaller companies,  including Responsys,
 Inc., Silverpop Systems Inc.,  ExactTarget,  Inc. and Constant Contact,            Inc.

Suppliers

We
purchase  telecommunications  services pursuant to supply agreements with
telecommunications  service providers. Some of            our agreements with
 telecommunications  service providers contain commitments that require us to purchase a
minimum amount            of services through 2009.  These costs are expected to be approximately $7.6
million in 2008 and $0.8 million in 2009.

Government Regulation

Federal,
 state,  local and  international  laws  regulating the provision of traditional
 telecommunications  services may            adversely  impact  our  business.  We
 believe  that  we  operate  as  a  provider  of  unregulated  information  services.
           Consequently,  we do not believe that we are subject to Federal
 Communications  Commission  (FCC) or state public  utility            commission
 regulations  applicable to providers of traditional  telecommunications  services in the
U.S.  However,  we are            subject to certain regulations imposed by international
 telecommunications  regulatory  authorities and we may be affected            by
 regulatory  decisions,   trends  or  policies  issued  or  implemented  by  federal,
  state,  local  or  international            telecommunications  regulatory authorities.
 In addition, federal, state, local or additional international authorities may
           seek to regulate  or impose  requirements  with  respect to the  services
 provided  by us. We have  received,  and certain            companies that we acquired
had received,  letters from the  Investigations  and Hearing  Division of the FCCs
 Enforcement            Bureau regarding registration,  filing and regulatory surcharge
remittance requirements applicable to traditional telephone            companies.  In
each case, we have responded to the FCCs inquiries.  In addition,  certain of our
competitors have received            such letters and/or are involved in investigations
 before the FCC or the Universal Service  Administrative  Company (USAC)
           regarding registration,  filing and surcharge

| | 6 | 
| | - | 

---

remittance requirements, and we
could be adversely affected by the outcome of            such  investigations.  In the
course of one such  investigation,  on January 15, 2008, USAC issued a decision  finding
that            the audio bridging services of InterCall, Inc. are toll teleconferencing
 services,  requiring InterCall to comply with the            FCCs registration,  filing
and regulatory surcharge remittance  requirements applicable to traditional telephone
companies            on a prospective  and retroactive  basis.  InterCall has appealed
the USAC decision to the FCC and has sought a stay of the            USAC decision.  The
FCC, in turn, has issued a public notice seeking comments regarding InterCalls
 submissions.  Although            we believe that we exercise reasonable efforts to
monitor  telecommunications  laws, regulations,  decisions and trends and            to
comply with any applicable legal requirements,  if we fail to comply with any applicable
government regulations or if we            are required to submit to the jurisdiction of
such government  authorities as a provider of traditional  telecommunications
           services in the same manner as described in USACs decision regarding
 InterCall,  we could be temporarily  prohibited from            providing  portions of
our  services,  be required to  restructure  portions of our services or be subject to
reporting and            compliance  obligations  on both a  prospective  and
 retroactive  basis,  including  being subject to  litigation,  fines,
           forfeitures,  regulatory  surcharge  remittance  requirements  (on both a
prospective and  retroactive  basis) and/or other            penalties arising from for
any non-compliance.

There
is regulatory  uncertainty as to the imposition of certain  traditional common carrier
regulations on VoIP telephony,            which we use in the delivery of certain of our
 services.  The  regulatory  status of VoIP is still under review by federal
           authorities and the courts. The FCC has stated that VoIP is an interstate
service subject to certain  regulations,  but the            FCCs  regulation  of VoIP
may be  curtailed  or  expanded  by the FCC or the  courts.  The FCC and  state  public
 utility            commissions are conducting  regulatory  proceedings that could affect
the regulation of VoIP services.  The adoption of, or            changes in, such
 telecommunications  laws and regulations could increase the costs of communicating over
IP-based networks            and may affect the available  delivery  methods for and
costs  associated with our services,  as well as the growth of VoIP            networks.
 Regulatory  authorities  may seek to regulate  aspects of our services under new VoIP
 regulations,  which would            require us to comply with laws and  regulations
 that  currently are not applicable to us, and could  adversely  affect our
           business.

International,
 federal and state laws  regulate  telemarketing  practices  and may  adversely  impact
our business and the            businesses of our customers and potential  customers.
 The FCC promulgated rules in 1992 to implement the federal Telephone            Consumer
 Protection  Act of 1991  (TCPA).  These rules,  among  others,  regulate  telemarketing
 methods and  activities,            including  the use of  pre-recorded  messages,  the
time of day  when  telemarketing  calls  may be  made,  maintenance  of
           company-specific do not call databases and restrictions on unsolicited fax
advertising.

In
2003, the FCC amended its rules under the TCPA.  The FCC retained an exemption  from
 liability for sending  unsolicited            commercial fax  advertisements for fax
broadcast  providers which solely transmit such  advertisements on behalf of others.
           However,  the FCC ordered that a sender may fax unsolicited  commercial
 advertisements  only to those from whom the sender            has received prior express
consent in writing.  The 2003 rule amendments  modified the FCCs prior policy,  which
permitted            such faxes when an established  business  relationship  (EBR)
existed  between the sender of a commercial  unsolicited  fax            advertisement
 and the recipient.  Several  parties  challenged  the new rules and the FCC delayed the
 requirement to have            prior written consent and the deletion of the EBR
exemption.  In July 2005,  Congress passed the Junk Fax Prevention Act of            2005
(JFPA),  amending the TCPA to expressly allow fax  advertisements to be sent to persons
or entities with whom a sender            has an  EBR,  with  certain  exceptions.  This
 amendment  essentially  nullified  the  FCCs  2003  revocation  of the EBR
           exemption.  The JFPA also imposed new notice language for fax  advertisements
 and mandated an opt-out  mechanism.  The FCC            issued rules  implementing
 these  amendments in April 2006, which became  effective in August 2006.  However,  the
FCC may            revise its rules and may impose a time  limitation on the EBR
 exception.  Despite the passage of the JFPA,  the new notice            requirements and
potential time limits on the EBR exemption,  combined with the regulatory  uncertainty
 resulting from the            2003 FCC rulings and  associated  litigation  may have
 discouraged,  and may  continue to  discourage,  use by some of our            customers
of our broadcast fax services.

Fax
broadcast  providers,  such as us, generally are not liable for their customers  violations
of the TCPA,  although fax            broadcast  providers that have a high degree of
involvement in their customers fax  advertisements or actual knowledge           of a
customers  violation of the TCPA may be held liable under the TCPA.  Although we have
 conducted  our  operations  to            meet the fax broadcaster provider exemption,
third parties may seek to challenge this exemption.

| | 7 | 
| | - | 

---

In
 addition,  we may be subject to state laws and  regulations  regulating  the
 unsolicited  transmission  of faxes.  For            example,  in October 2005,  the
state of California  passed a law  purporting to regulate  intrastate  and  interstate
 fax            advertisements  which did not contain an EBR exemption.  This law was
challenged by the U.S.  Chamber of Commerce and us in            federal district court
in California,  with the court ruling that  Californias  regulation of interstate fax
transmissions            was impermissible.

The
FCC,  along with the Federal  Trade  Commission  (FTC),  has also  instituted  a national
 do not call  registry  for            residential  and  wireless  telephone  numbers.
 Telemarketers  making  telephonic  solicitations  are barred from  calling
           consumers  who register  their  telephone  numbers in the national  database.
 New  legislation  was recently  enacted that            deletes the requirement that
consumers  re-register  every five years.  Numbers will remain on the list unless the
consumer            affirmatively  removes a number or the number is deleted from the
database in monthly  administrative  updates,  such as in            the case of an
 abandoned  number.  In summary,  with  certain  exceptions,  telemarketers  are required
to access the list            before  engaging  in  telemarketing  in any  particular
 area code.  As a service  provider  to  companies  that  engage in
           telemarketing,  we subscribe to the federal do not call registry.  Although we
believe we have taken the necessary steps to            ensure  compliance  with the do
not call  registry and other rule  amendments,  regulators  or third  parties could seek
to            challenge our compliance with the federal do not call registry, federal
telemarketing laws, and FCC and FTC rules.

In
October 2006, the FTC proposed to bar  pre-recorded  telemarketing  calls except in
instances of prior express  consent.            The FCC generally permits  pre-recorded
 telemarketing calls where there is either an EBR or prior express consent. The FTC
           initiated a rulemaking  proceeding and took public  comments on its proposed
 restrictions  on  pre-recorded  telemarketing            calls.  In December  2006,  the
FCC issued a notice stating that it would not enforce the proposed ban until the
completion            of the rulemaking proceeding provided pre-recorded  telemarketing
calls comply with certain safe harbor requirements.  If            ultimately  adopted,
 the FTCs proposed  restriction on pre-recorded  telemarketing calls could impact
customer use of our            broadcast  voice  services  to the extent a customer
 sought to use this  service for  marketing  messages,  distinct  from
           informational or transactional messages.

In
 addition  to the  federal  legislation  and  regulations,  there are  numerous  state
 laws and  regulations  governing            telemarketing  activities,  including state
do not call list requirements and state registration and bonding  requirements.
           For instance,  certain states regulate or restrict  pre-recorded
 telemarketing and other messages,  and certain states may            restrict or make
 political  calls  subject to do not call and other  requirements  although such calls
are exempt from the            federal do not call requirements.

Federal
 legislation  known  as the Can  Spam law  regulates  unsolicited  commercial  e-mails,
 or spam.  The Can Spam law            requires  unsolicited  e-mail  marketing  messages
to have a valid postal  address.  E-mail  marketers may not use false or
           misleading  headers or deceptive subject lines,  must identify  commercial
e-mail and are also required to remove customers            from their  mailing  lists if
 requested.  The Can Spam law allows  the FTC to impose  fines and gives  states the
power to            bring  lawsuits.  Internet  service  providers  may also bring suit
under the Can Spam law. The Can Spam law also  preempts            state laws in many
respects,  although it allows states to continue to regulate  deceptive e-mails. A number
of states have            adopted laws  restricting  and/or  governing the  distribution
 of unsolicited  e-mails.  Several states have adopted child            protection
registry laws that generally prohibit certain  communications,  such as e-mails, phone,
fax or instant messages,            to registered  contact points  accessible by children
as submitted by parents and guardians when the content of the message            includes
an  advertisement  for or a link to content,  products or services that are restricted to
minors due to their age.            Schools  and other  child-focused  organizations  may
also  submit  domain  names.  Other  states are  considering  similar
           legislation.  These laws are subject to some  opposition by certain  industry
 groups and companies,  and the FTC has noted            certain  concerns  about
security and privacy risks inherent in such do not e-mail  registries.  We provide
 services for            our customers to distribute  e-mails,  including e-mails that
may be subject to these laws. The Can Spam requirements apply            to senders of
e-mail messages, but do not apply to entities who engage in routine conveyance of
e-mail messages,  such as            the  transmission,  routing or relaying,  through an
automatic  technical  process,  e-mails for which  another  person has
           identified the recipients or provided the recipient  addresses.  We believe
that our eMarketing  services,  where customers            use our automated  service to
send e-mails to recipient  addresses  designated by these  customers,  fall within Can
Spams            routine  conveyance  exemption.  We have implemented  procedures that
we believe comply with our obligations under the law.            We have a policy that
 prohibits the use of our services to send spam and require our customers to comply with
all laws and            regulations  pertaining to spam,  but there can be no assurance
 that we would not be subject to litigation or  enforcement            actions alleging a
violation of applicable federal and state laws.

| | 8 | 
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---

We
monitor  applicable  federal and state laws and regulations,  have compliance  policies
in place regarding such laws and            regulations,  and our service  agreements
 with  customers  generally  state that our customers are  responsible  for their
           compliance with all applicable laws and regulations.  We could,  nevertheless,
 be subject to litigation by private parties            and governmental bodies,
including governmental enforcement actions, alleging a violation of such laws or
regulations,  and            could result in damages,  regulatory  fines,  penalties and
possible other relief under such laws and  regulations  and the            accompanying
costs and uncertainties of such litigation and enforcement actions.

A
number of legislative  and regulatory  proposals are under  consideration  by federal and
state  lawmakers and regulatory            bodies and may be adopted  with  respect  to
the  Internet.  Some of the  issues  that such laws or  regulations  may cover
           include user privacy,  obscenity,  fraud, pricing and characteristics and
quality of products and services. The adoption of            any such laws or regulations
may decrease the growth of e-commerce,  which could in turn decrease the projected
 demand for            our web-based  services or increase our costs of doing business.
 Moreover,  the  applicability to the Internet of existing            U.S. and
international  laws governing issues such as property  ownership,  copyright,  trade
secret,  libel,  taxation and            personal  privacy is uncertain and  developing.
 Any new  legislation or regulation,  or application or  interpretation  of
           existing laws, could have a material adverse effect on our business, financial
condition and results of operations.

It
is possible that Congress, the states or various government agencies could impose new or
additional  requirements on the            electronic  commerce market or entities
 operating therein.  If enacted,  such laws, rules and regulations could be imposed
           on our business and industry and could have a material  adverse effect on our
business,  financial  condition or results of            operations.

In
addition,  our  international  activities  also are subject to regulation by various
 international  authorities and the            inherent risk of unexpected changes in
such regulation.  For example,  individual  countries within the European Union have
           specific  regulations related to sending personal  information from one
country to another.  The EU member states adopted a            safe harbor  arrangement
 that provides that U.S.  organizations  can adopt  procedures  that comply with European
 privacy            regulations and can certify their compliance through notice to the
U.S.  Department of Commerce.  Participation in the safe            harbor is voluntary
and indicates that the organization  provides an adequate level of privacy protection and
qualifies the            company to receive data from EU member states.  U.S.  companies
that avail  themselves of the safe harbor  arrangement  are            subject to
 oversight  and  possible  enforcement  actions by the FTC if they do not comply  with
the  provisions  of their            certification.  Our  subsidiary,  Xpedite  Systems,
 LLC,  has  certified  compliance  with the EU Safe Harbor  through the
           Department of Commerce.  In addition,  the European Privacy and
 Communications  Directive imposes  restrictions on sending            unsolicited
 communications  to  individuals  via automatic  calling  machines,  fax,  e-mail and SMS
messages.  Generally,            companies  are  required to obtain  prior  explicit,  or
opt-in,  consent  before  they can contact  users via this type of            marketing.

Other
non-EU foreign legislation could also have an impact on our services.  Because our
services are accessible  worldwide            over the web, foreign  jurisdictions may
claim that we are required to comply with their laws. For example,  in Canada, the
           Personal  Information and Electronic  Documents Act (PIEDA) similarly
regulates the collection and use of personal data and            applies broadly to U.S.
companies that conduct  commercial  activities in Canada. As we continue to expand and
localize our            international activities,  we may become obligated to comply with
the laws of additional  jurisdictions,  which may be more            stringent or impose
more significant burdens on businesses than those in the U.S.  Compliance in foreign
 jurisdictions may            be more costly or may require us to change or restrict our
business  practices  or service  offerings  relative to those in            the U.S.

Proprietary Rights and
Technology

Our
ability to compete is dependent in part upon our proprietary  rights and technology.  We
currently have six issued U.S.            patents  and  eleven  pending  U.S.  patent
 applications,  as well as two issued  international  patents  and six  pending
           international  patent  applications.  Our  patents  and  patent  applications
 relate  to our  fax  distribution,  document            generation and delivery,  audio
and web conferencing and mobile solutions.  We own and use a number of federally
registered            trademarks  and pending  applications  for  trademarks,  including
 Premiere  Global  Services & DesignSM,  PGI & DesignSM,            PGiConnectSM,
 Powered by  Premiere &  DesignSM,  Auditorium®,  Fax2Mail  (Stylized)®,  faxREACH®,
 GlobalMeet®,  IrgentSM,            messageREACH®,  Netspoke  (stylized)®,
  ReadyConference®,

| | 9 | 
| | - | 

---

ReadyConference®  Plus,  smsREACH®  and
 voiceREACH®.  We  own            applications  and  registrations  for many of  these
 and  other  trademarks  and  service  marks in the U.S.  and in other
           countries.  We rely  primarily on a combination of  intellectual  property
laws and  contractual  provisions to protect our            proprietary  rights  and
 technology.  These  laws and  contractual  provisions  provide  only  limited
 protection  of our            proprietary  rights and  technology,  which include
 confidential  information and trade secrets that we attempt to protect
           through  confidentiality and nondisclosure  provisions in our agreements.  We
typically attempt to protect our confidential            information and trade secrets
through these  contractual  provisions for the terms of the applicable  agreement and, to
the            extent  permitted by applicable law, for some  negotiated  period of time
following  termination of the agreement.  Despite            our efforts to protect our
 proprietary  rights and  technology,  there can be no  assurance  that third  parties
 will not            misappropriate our proprietary rights or technology or independently
 develop  technologies that are similar or superior to            our technology.

Available Information

Our
corporate web site is PGiConnect.com. We make available free of charge through our
web site (follow the Investor Relations tab to SEC Filings) our annual
report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form
8-K and amendments to those reports filed or furnished pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon
as practicable after such material is electronically filed with, or furnished to, the SEC.

Employees

As
of December 31, 2007, we employed  approximately  2,430 people  worldwide.  Our employees
are not represented by a labor            union or covered by any collective bargaining
agreements.  We consider our employee relations to be good.

Amendment of Our Bylaws

On
June 27,  2007,  our board of  directors  recommended,  and our  shareholders  approved,
 an  amendment to our bylaws to            declassify our board and provide for the
annual  election of all of our directors  beginning  with our annual  shareholders
           meeting in 2008. In addition,  our board approved an amendment to our bylaws
to add a provision permitting  shareholders to            appoint proxies by electronic
transmission for voting at any meeting of our shareholders.

Item 1A.     Risk
Factors

Risks Relating to
Our Industry

The markets for our
services are intensely  competitive,  and we may not be able to compete  successfully
 against existing and future competitors that may make it difficult to maintain or
increase our market share and revenues.

The
 markets for our  services  are  intensely  competitive,  and we expect  competition  to
 increase  in the future.  For            information  regarding the markets in which we
compete,  see  Business   Competition.  Many of our current and potential
           competitors,  such as major  telecommunications,  equipment,  software  and
 application  service  providers,  have  longer            operating histories,  greater
name recognition,  more robust service offerings,  more comprehensive support
 organizations,            larger  customer  bases and  substantially  greater
 financial,  personnel,  marketing,  engineering,  technical  and other
           resources  than we do. As a result,  our  competitors  may be able to respond
 more  quickly than we can to new or emerging            technologies  and  changes  in
 customer  demands.  They may also be able to devote  greater  resources  than we can to
the            development,  promotion and sale of their  products and  services.  We
believe that our current  competitors  are likely to            expand their service
 offerings  and new  competitors  are likely to enter our markets.  Some of our existing
and potential            competitors  may enter into or expand their positions in the
markets in which we compete  through  acquisitions,  strategic            alliances  and
the  development  of integrated  service  offerings.  For example,  West has acquired
 Televox  Software and            CenterPost  Communications  in the automated
 notifications  space,  as well as several  conferencing  services  providers,
           including Raindance  Communications,  Inc.,  InterCall,  ConferenceCall.com,
 ECI Conference Call Services,  LLC and Sprint            Nextel  Corporations
 conferencing  division and recently  announced that it will seek to acquire  Genesys.
 Cisco Systems

| | 10 | 
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---

acquired WebEx Communications to
augment its premises-based  conferencing offerings, and Microsoft acquired PlaceWare,
Inc.            and integrated  PlaceWares services into its suite of Office series of
applications.  Also, we compete with companies with            whom we have  distribution
 relationships  or with whom we resell certain of their services.  Increased  competition
 could            result in price  pressure on our products  and services and a decrease
in our market share in the various  markets in which            we compete, either of
which could hinder our ability to grow our revenues.

Technological
 changes and the  development  of  alternatives  to our services may cause us to lose
customers and market share and may hinder our ability to maintain or grow our revenues.

The
market for our  services is  characterized  by rapid  technological  change,  frequent
 new service  introductions  and            evolving  industry  standards.  We expect new
services and enhancements to existing services to be developed and introduced
           that will compete with our services.  Technological  advances may result in
the development and commercial  availability of            alternatives  to or new
methods of  delivering  our  services  and pricing  options  that could be more
 attractive  to our            customers.  These  developments  could  cause our
 existing  services to become  obsolete,  result in  significant  pricing
           pressure on our services or allow our  existing and  potential  customers to
meet their own business  communications  needs            without using our services.
 For example,  if customers more rapidly adopt IP-based  conferencing  services or
IP-based PBX            systems,  our results of operations  could be adversely
 affected.  Because we do not typically have long-term or exclusive
           contractual  agreements  with our  customers,  and many of our larger
 enterprise  customers  allocate their business among            several providers, any
of these developments could result in significant customer loss.

We
must  continually  introduce new services and enhancements to existing  services in
response to  technological  changes,            evolving industry  standards and customer
demands.  However,  our new services and enhancements may not be as successful as
           our  competitors  solutions.  We will not be able to gain  market  share and
 increase  our  revenues  if we are unable to            develop new services,  or if we
experience delays in the introduction of new services.  Our ability to successfully
develop            and market new services and enhancements that respond to technological
 changes,  evolving  industry  standards or customer            demands, is dependent on
our ability to:

| |  |  | foresee
changes in industry standards;
| | - |  | --------------------------------------

| |  |  | anticipate
and apply advances in technologies;
| | - |  | ----------------------------------------------

| |  |  | enhance
our software, applications, equipment, systems and networks; and
| | - |  | ------------------------------------------------------------------------

| |  |  | attract
and retain qualified and creative technical personnel.
| | - |  | --------------------------------------------------------------

We are  subject  to
 pricing  pressures  for our  services  which  could  cause us to lose  market  share and
 decrease  revenues  and profitability.

We
compete for customers  based on several  factors,  including  price. A decrease in the
rates charged for services by our            competitors  could cause us to reduce the
rates we charge for our services.  If we cannot  compete  based on price,  we may
           lose  market  share.  If we reduce our rates  without  increasing  our  volume
or our  market  share,  our  revenues  could            decrease.  For example,  in the
past three years,  increased  competition and decreased demand for our legacy broadcast
fax            services  resulted in a decrease in revenue from these services.  We
expect revenue from broadcast fax services to continue            to decline in the
future.  We have also  experienced  declines in the average  selling price per minute of
services  across            our solution sets,  including within our Conferencing & Collaboration
 Solutions.  In some cases, our competitors may offer            their  services  at
reduced  rates or free on a trial  basis in order to win  customers.  In  addition,
 telecommunications            service  providers  may have lower  telephony  costs as a
result of their  ownership of the  underlying  telecommunications            network and
can offer services  similar to ours at reduced rates as a result.  Due to  competitive
 factors and the rapidly            changing marketplace for our services,  we have
reduced our pricing in certain  circumstances and expect we may be required            to
further  reduce our pricing in the future.  Further,  if we reduce our rates and our
costs of providing  our services do            not decrease proportionately, or if they
increase, this could have a material adverse effect on our results of operations.

| | 11 | 
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---

Risks Relating to
Our Business

Our future success
depends on market acceptance of our new services.

Market
acceptance of our new services often requires that individuals and enterprises accept
new ways of communicating and exchanging information. Our growth depends
on the successful development and introduction of new services and
enhancements to our existing services. For example, in April 2007, we
launched our portal, PGiConnect.com, which we believe will open a new sales
channel for us by bringing all of our solutions online and will assist in our
objective to improve our revenue growth. A failure to achieve broad
market acceptance of or a decline in the demand for our new services or
portal could hinder our ability to maintain and increase our revenues. We
believe that broad market acceptance of our new services and portal will
depend on several factors, including:

| |  |  | ease
of use;
| | - |  | ------------

| |  |  | price;
| | - |  | ------

| |  |  | reliability;
| | - |  | ------------

| |  |  | accessibility
to our services;
| | - |  | ------------------------------

| |  |  | quality
of service;
| | - |  | -------------------

| |  |  | system
security;
| | - |  | ----------------

| |  |  | product
functionality; and
| | - |  | --------------------------

| |  |  | the
effectiveness of our strategic marketing and sales efforts and distribution relationships.
| | - |  | ----------------------------------------------------------------------------------------------

If we do not meet these  challenges,
 our new services may not achieve  broad market  acceptance  or market  acceptance  may
not occur quickly enough to justify our investment in these services.

If we cannot
 successfully  integrate new technologies,  services and systems, we may not generate
sufficient revenues and operational synergies may not develop.

We
 continuously  integrate new  technologies,  service  offerings  and systems.  We have
 experienced  and may continue to            experience  difficulty  integrating new
technologies into our networks.  For example,  we experienced delays in our testing
           of our  SIP-based  voice/fax  boards that we intended  to launch in the first
 quarter of 2006 which was delayed  until the            second quarter.  These delays
resulted from the board manufacturers  inability to support this service in the time
periods            we initially anticipated.  If we cannot successfully integrate new
technologies,  services and systems, we may not generate            sufficient revenues
and operational synergies may not develop.

Concerns regarding
security of transactions and transmitting  confidential  information over the Internet
and public networks may have an adverse impact on the use of our web-enabled services.

We
must securely  receive and transmit  confidential  information for our customers over the
Internet and public  networks.            Concerns regarding the security of confidential
 information  transmitted over the Internet and public networks may prevent
           customers  from using our  web-based  services.  Despite the  measures we have
taken,  our  infrastructure  is  potentially            vulnerable  to  physical or
 electronic  break-ins,  viruses or similar  problems.  If a person  circumvents  our
 security            measures,  he or she could  misappropriate  proprietary  information
 or cause  interruption  in our  operations.  Security            breaches that result in
access to confidential  information  could damage our reputation and expose us to a risk
of loss or            liability.  We may be required to make  significant  investments
 in efforts to protect  against and remedy  these types of            security  breaches.
 As electronic  commerce  becomes more  widespread,  our  customers  will become more
 concerned  about            security. In addition,  some of our customers are subject to
varying degrees of government regulation,  particularly in the            insurance and
financial  services  industries.  Increased  interest in data privacy  protections and
 information  security            obligations could impose additional  regulatory
pressures

| | 12 | 
| | -- | 

---

on our customers  businesses and
indirectly,  on our operations.            If we are unable to adequately address these
concerns, our business and results of operations could suffer.

Technological
obsolescence of our equipment could result in substantial capital expenditures.

Technological
 advances may result in the development of new equipment and changing industry
 standards,  which could cause            our equipment to become  obsolete.  These
events could require us to invest  significant  capital in upgrading or replacing
           our equipment.  For example,  we are continuing our efforts to introduce
 IP-based equipment into our services and may need            to increase our number of
IP-based ports and discontinue use of some of our traditional  telecommunications-based
 ports if            adoption of VoIP is more rapid than expected.

If we fail to
increase our network capacity to meet customer demands, the quality of our service
offerings may suffer.

As
network  usage grows,  we will need to add capacity to our hardware,  software and
 facilities  with  telecommunications            equipment that routes  telephone  calls.
 We  continuously  attempt to predict growth in our network usage and add capacity
           accordingly.  If we do not  accurately  predict and  efficiently  manage
 growth in our network  usage,  the quality of our            service offerings may
suffer and we may lose customers.  For example,  during 2007, we experienced challenges
in keeping up            with capacity demands relating to our GlobalMeet® service,
 particularly given a longer lead time in procuring numbers from            international
 carriers.  In  addition,  we are  continuing  to upgrade our network  infrastructure  to
handle the new data            volumes associated with this VoIP-based traffic.

Downtime in our
network infrastructure could result in the loss of significant customers and revenues.

We
currently  maintain  facilities with  telecommunications  equipment that routes
 telephone calls and computer  telephony            equipment in locations  throughout
 the world.  The delivery of our  services is  dependent,  in part,  upon our ability to
           protect  the  equipment  and data at our  facilities  against  damage  that
may be caused by fire,  power  loss,  technical            failures,  unauthorized
 intrusion,  natural  disasters,  sabotage and other similar  events.  Despite  taking a
variety of            precautions,  we have experienced downtime in our networks from
time to time due to service or network outages and periodic            system upgrades,
 and we may experience  downtime in the future.  For example,  in April 2007, our
conferencing  operations            centers  were  infected  with a zero day virus that
 attacked  our  platforms  impacting  some of our  operator-assisted,
           automatic and ancillary  conferencing  services. In addition, in October 2007,
some of our fax and voice services customers            may have experienced job
processing delays due to unforeseen  issues with a planned platform  upgrade.  We have
implemented            changes to prevent this in the future,  and we take  substantial
 precautions  to protect  ourselves and our customers from            events  that  could
 interrupt   delivery  of  our  services.   These   precautions   include  physical
 security  systems,            uninterruptible  power supplies,  on-site power
generators,  upgraded back-up hardware,  fire protection  systems and other
           contingency  plans.  In addition,  some of our networks are designed so that
the data on each network  server is duplicated            on a separate  network  server.
 However,  despite these  precautions,  service  interruptions  could result in the loss
of            significant  customers,  which could cause us to lose revenues. We also
maintain business interruption  insurance providing            for aggregate coverage of
approximately  $84.2 million per policy year.  However,  we may not be able to maintain
insurance            for this risk in the future,  or it may not continue to be available
at reasonable  prices.  Even if we maintain  insurance            for this risk, it may
not be  sufficient  to  compensate  us for losses that we experience  due to our
inability to provide            services to our customers.

Interruption in
third party services that we use could result in service delays and  disruptions  and a
loss of significant  customers and revenues.

Our
ability to maintain and expand our business depends, in part, on our ability to continue
to obtain  telecommunications,            financial  systems hosting  services and
web-based  services on favorable terms from traditional and IP-based long distance
           telecommunications  service providers,  local exchange  carriers,  financial
systems hosting providers and Internet service            providers.  We do not own a
 telecommunications  or  IP-based  network  and host a  significant  portion  of our
 financial            systems.  As a result,  we depend on a variety of third party
 providers for  traditional  and IP-based  telecommunications            services,  web
conferencing  services,  call origination and termination local transmission,  Internet
access and financial            systems.  We have  experienced  delays  and  disruptions
 in our  services  in the past due to service  interruptions  from
           telecommunications  service  providers.  For  example,  we have

| | 13 | 
| | -- | 

---

experienced  interruptions  in
 service as a result of our            underlying  carriers  network outages and as a
result of increased  traffic  volumes.  If these service  providers were to
           become insolvent, it could temporarily interrupt our ability to bill our
customers,  make payments to our vendors and delay            our ability to report our
financial  results.  Any  interruptions in the delivery of our services could result in a
loss of            significant customers and revenues.

Continued weakness
in our legacy broadcast fax services may negatively impact our financial performance.

We
have  experienced  declines in revenue  from our legacy  broadcast  fax services  and
expect  continued  declines in the            future.  Our future  success is dependent
in part upon our ability to  transition  our broadcast fax customers to our newer
           technologies,  such as e-mail and voice delivery  services.  For example,  in
order to generate more predictable  broadcast            fax revenue,  we are continuing
our efforts to transition  these customers into minimum  commitment  contracts or
flat-rate            service plans. In addition,  we are also continuing to migrate these
customers to our newer  technologies,  such as e-mail.            While the rate of
decline in revenue from these  services has slowed in recent  quarters,  we continue to
expect  continued            legacy broadcast fax services revenue declines in the future.

Our inability to
efficiently utilize or re-negotiate minimum purchase requirements in our
 telecommunications  supply agreements or to avoid or recover telecommunications cost
increases could decrease our profitability.

Our
ability to maintain and expand our business  depends,  in part,  on our ability to
continue to obtain  and/or  purchase            telecommunications  services on favorable
 terms from  telecommunications  service  providers.  Agreements with some of our
           telecommunications  service  providers  contain  minimum  purchase
 requirements  through  2009.  These  commitments  total            approximately  $8.4
 million,  with  annual  costs of  approximately  $7.6  million  and  $0.8  million  in
2008 and  2009,            respectively.  In addition,  certain circuits that we purchase
are subject to term  requirements,  including  penalties for            early termination
of such circuits.  The total amount of the minimum purchase  requirements in 2007 was
approximately $16.8            million,   and  we  incurred   telecommunications   costs
 in  excess  of  these  minimums.   It  is  possible  that  other
           telecommunications  suppliers may provide  similar  services at lower prices,
 and we may not be able to  re-negotiate  our            current supply agreements to
achieve comparable lower rates. In addition, our  telecommunications  service providers
may be            subject to federal,  state,  local and international  laws regulating
the provision of their  telecommunications  services.            Such  telecommunications
 laws and regulations  could change in a manner  requiring our providers to incur
additional costs            that may be passed  on to us as their  customer  and  thereby
 increase  our costs in  purchasing  such  telecommunications            services.  Such
 additional  costs may require us to increase the prices for our services to our
customers.  We can give no            assurance  that we will be able to utilize  the
 minimum  amount of services  that we are  required  to purchase  under our
           telecommunications supply agreements.  Moreover, if we are unable to obtain
and/or purchase  telecommunications services on            favorable  terms,  if we are
 required  to  purchase  more  services  than we are able to utilize in the  operation
 of our            business,  or if we are not able to recover all or part of any
increased costs resulting from such regulatory changes,  the            costs of
providing our services would likely increase,  which could decrease our  profitability
and have a material adverse            effect on our business, financial condition and
results of operations.

Our level of
indebtedness may harm our financial condition and results of operations.

We
have  incurred a  substantial  amount of  indebtedness  under our credit  facility.  As
of  December  31,  2007,  we had            approximately  $266.7  million  of
 outstanding  debt under our  credit  facility,  with  approximately  $264.9  million in
           borrowings and $1.8 million in letters of credit  outstanding.  In December
2007, we increased our line of credit to $325.0 million, and,  in   January 2008, we further increased our line of            credit  to
$375.0  million, all  under an accordion  feature.  From time to time, we enter into interest
rate            swaps exclusive of our applicable margin as stated in our credit facility. As of December 31, 2007, we have two $100.0 million interest rate swaps, one of which is two years  at a fixed rate of approximately 4.99% plus  applicable spread, and one of which is three years with a fixed rate of approximately 4.745%.

Our
level of indebtedness will have several important effects on our future operations,
including, without limitation:

| |  |  | a
portion of our cash flows from operations will be dedicated to the payment of any
interest or amortization  required with            respect to outstanding indebtedness;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | increases
in our  outstanding  indebtedness  and leverage will  increase our  vulnerability  to
adverse  changes in general            economic and industry conditions, as well as to
competitive pressure; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 14 | 
| | -- | 

---

| |  |  | depending
 on the levels of our  outstanding  debt,  our  ability  to obtain  additional  financing
 for  working  capital,            acquisitions, capital expenditures, general corporate
and other purposes may be limited.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | recent
credit market events and the subsequent  tightening of the availability of capital both
from financial  institutions            and the debt markets may have an adverse affect
on our ability to access additional capital.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

At
the maturity of our credit  facility or in the event of an acceleration  of the
 indebtedness  under the credit facility            following an event of default,  the
entire outstanding  principal amount of the indebtedness  under the facility,  together
           with all other amounts payable  thereunder  from time to time, will become due
and payable.  It is possible that we may not            have  sufficient  funds to pay
such  obligations in full at maturity or upon such  acceleration.  If we default and are
not            able to pay any such obligations due, our lenders have liens on
substantially  all of our assets and could foreclose on our            assets in order to
satisfy our obligations.

Our  dependence  on
our  subsidiaries  for cash flow may  negatively  affect our  business  and our  ability
to meet our debt  service obligations.

We
 conduct  substantially  all of our  business  through  our  subsidiaries.  Our  ability
 to pay  amounts  due under our            indebtedness in the future will be dependent
upon the ability of our  subsidiaries to make cash  distributions of earnings,
           loans or other payments to us based on their earnings and cash flows.  Our
 subsidiaries  may not have sufficient  funds or            may not be able to distribute
sufficient funds to us to enable us to service or repay such indebtedness.

Our financial
performance could cause future write-downs of goodwill or other intangible assets in
future periods.

We
adopted  Statement of Financial  Accounting  Standards  (SFAS) No. 142,  Accounting  for
Goodwill and Other  Intangible            Assets (SFAS No. 142) effective  January 1,
2002.  With the adoption of SFAS No. 142, we ceased  amortizing  approximately
           $123.1 million of goodwill.  In lieu of amortization,  we are required to
perform an annual  impairment  review which could            result in  impairment
 write-downs  to goodwill  and/or other  intangible  assets.  As of December 31, 2007,
 we had $337.2            million of  goodwill  and $43.1  million  of other  intangible
 assets  reflected  on our  financial  statements  for which            amortization will
continue.

We may be subject
to assessment of income, state sales and other taxes for which we have not accrued.

We
have reserves for certain state sales tax  contingencies  based on the likelihood of
obligation in accordance  with SFAS            No. 5, Accounting for Contingencies (SFAS
No. 5).  Historically,  we have not collected and remitted state sales tax from
           Conferencing &  Collaboration  Solutions  customers.  We were audited by
the  Commonwealth of  Massachusetts  Department of            Revenue claiming that our
audio  conferencing  services are subject to sales tax in Massachusetts.  In March 2006,
we began            assessing sales tax to our customers in  Massachusetts  as a result
of this audit. In July 2006, we paid an initial payment            of approximately  $1.2
million to the Commonwealth of Massachusetts  Department of Revenue for taxable years
prior to 2005.            Amounts  associated  with 2005 and early 2006 are still  under
 review and have yet to be settled.  In March 2007,  we were            approached by the
State of Illinois  regarding the taxability of our conferencing  services in the state.
In April 2007, we            began assessing sales tax to our customers in Illinois.
 Returns were filed and approximately  $0.6 million was paid to the            Illinois
 Department  of Revenue for taxable  periods prior to March 2007.  Additional  amounts
may be due as these returns            are  audited.  More states may claim that we are
 subject to an  assessment  of sales  taxes.  As of December  31, 2007 and
           December 31, 2006, we had reserved approximately $5.2 million and $4.3
million,  respectively,  for certain state sales tax            contingencies.  This
amount is included in Accrued taxes on the face of the  consolidated  balance sheets.
 We believe we            are  appropriately  accrued for these  contingencies. In January 2008, an outstanding audit with the State of New York was agreed to and payment in the amount of $1.5 million was made for outstanding telecommunications excise taxes.   In the
event that actual results differ from these reserves,  we may            need to make
adjustments  which could materially  impact our financial  condition and results of
operations.  Historically,            we have  collected and remitted  sales tax from our
 non-Conferencing  &  Collaboration  Solutions  customers in applicable
           states.  However, it is possible states may disagree with our method of
assessing and remitting these state sales taxes.

| | 15 | 
| | -- | 

---

If our quarterly
results do not meet the expectations of public market analysts and investors, our stock
price may decrease.

Our
quarterly  revenues are difficult to forecast  because the market for our services is
rapidly evolving and our services            are primarily  usage-based and event-driven
 historically  without  subscription fees or minimum  commitments.  Our expense
           levels are based, in part, on our  expectations as to future  revenues.  If
our revenue levels are below  expectations,  we            may be unable or  unwilling
 to reduce  expenses  proportionately,  and our  operating  results  would  likely be
adversely            affected.  As a result,  we believe that  period-to-period
 comparisons  of our results of operations  are not  necessarily            meaningful
 and should not be relied upon as indications  of future  performance.  It is likely that
in some future quarter            our operating results may fail to meet the expectations
of public market analysts and investors.  In this event, the market            price of
our common stock will likely decline.

Our
operating  results have varied  significantly in the past and may vary  significantly  in
the future.  Specific factors            that may cause our future operating results to
vary include:

| |  |  | fluctuations
in operating expenses;
| | - |  | -----------------------------------

| |  |  | increased
competition and pricing pressure;
| | - |  | -------------------------------------------

| |  |  | the
reliability and performance of our services;
| | - |  | ------------------------------------------------

| |  |  | the
timing of new service announcements;
| | - |  | ----------------------------------------

| |  |  | market
acceptance of new and enhanced versions of our services;
| | - |  | ---------------------------------------------------------------

| |  |  | changes
in regulations and legislation that may affect the competitive environment for our
services; and
| | - |  | --------------------------------------------------------------------------------------------------------

| |  |  | general
economic and seasonal factors.
| | - |  | --------------------------------------

Our stock has been
volatile and we expect that it will continue to be volatile.

Our
stock price has been  volatile,  and we expect it will  continue to be  volatile.  For
 example,  during the year ended            December 31, 2007,  the closing  price of our
common stock ranged from a high of $16.69 to a low of $8.50.  The  volatility
           of our stock price can be due to factors such as:

| |  |  | fluctuating
operating results;
| | - |  | ------------------------------

| |  |  | announcements
 by us or our  competitors of  significant  technological  innovations,  contracts,
 acquisitions,  strategic            partnerships, joint ventures or capital commitments;
and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | changes
in security analysts estimates of our performance or our failure to meet analysts expectations.
| | - |  | ---------------------------------------------------------------------------------------------------------

Many of these factors are beyond our
control.  In addition,  broad market and industry factors may negatively  impact our
stock price, regardless of our operating performance.

The performance of
our business depends on attracting and retaining qualified key personnel.

Our
performance depends on attracting and retaining key personnel,  including executive,
 sales and marketing personnel and            customer support, product development and
other technical personnel.  Failure to do so could have a material adverse effect
           on the performance of our business and the results of our operations.

| | 16 | 
| | -- | 

---

Our articles and
bylaws and Georgia corporate law may inhibit a takeover which may not be in the best
interests of our shareholders.

There
are several  provisions in our articles and bylaws and under Georgia corporate law that
may inhibit a takeover,  even            when a takeover may be in the  interests  of our
 shareholders.  For example,  our board of directors is empowered to issue
           preferred  stock  without  shareholder  action.  The  existence  of this  blank-check  preferred
 stock could render more            difficult  or  discourage  an  attempt  to obtain
 control  of us by means of a tender  offer,  merger,  proxy  contest  or
           otherwise.  We are also  subject to  provisions  of the Georgia  corporate
 law that relate to business  combinations  with            interested  shareholders,
 which can serve to inhibit a takeover.  In addition to considering  the effects of any
action on            us and our  shareholders,  our articles  permit our board to
consider the  interests of various  constituencies,  including            employees,
customers, suppliers, creditors,  communities in which we maintain offices or operations
and other factors which            they deem pertinent,  in carrying out and discharging
their duties and responsibilities and in determining what is believed            to be in
our best interests.

Risks Related to
Acquisitions

We face risks in
connection with completed or potential acquisitions.

Our
growth has been enhanced through acquisitions of businesses,  products and technologies
that we believe will complement            our business. We regularly evaluate
acquisition  opportunities,  frequently engage in acquisition discussions,  conduct due
           diligence  activities  in  connection  with  possible   acquisitions,   and,
 where  appropriate,   engage  in  acquisition            negotiations.  We may not be
 able  to  successfully  identify  suitable  acquisition  candidates,  complete
 acquisitions,            integrate  acquired  operations  into our  existing  operations
 or expand into new markets.  In  addition,  we compete for            acquisitions and
expansion  opportunities  with companies that have substantially  greater resources,  and
competition with            these companies for acquisition  targets could result in
increased prices for possible  targets.  Acquisitions also involve            numerous
additional risks to us and our investors, including:

| |  |  | risk
in retaining acquired management and employees;
| | - |  | ----------------------------------------------------

| |  |  | difficulties
in the assimilation of the operations, services and personnel of the acquired company;
| | - |  | ---------------------------------------------------------------------------------------------------

| |  |  | diversion
of our managements attention from other business concerns;
| | - |  | ---------------------------------------------------------------------

| |  |  | assumption
of known and unknown or contingent liabilities;
| | - |  | ----------------------------------------------------------

| |  |  | adverse
financial impact from the amortization of expenses related to intangible assets;
| | - |  | ----------------------------------------------------------------------------------------

| |  |  | incurrence
of indebtedness;
| | - |  | ---------------------------

| |  |  | potential
adverse financial impact from failure of acquisitions to meet internal revenue and
earnings expectations;
| | - |  | -------------------------------------------------------------------------------------------------------------------

| |  |  | entry
into markets in which we have little or no direct prior experience; and
| | - |  | -----------------------------------------------------------------------------

| |  |  | potentially
dilutive issuances of equity securities.
| | - |  | ----------------------------------------------------

If
we fail to adequately  manage these  acquisition  risks, the acquisitions may not result
in revenue growth,  operational            synergies or service or technology
 enhancements,  which could adversely affect our financial results. For example, we have
           completed the integrations of 10 acquired companies since January 1, 2005 and,
in certain instances,  we experienced delays            in obtaining cost savings and
increases in past due receivables due to delays in integrations  and technology
 enhancements            required  of our  infrastructure.  Acquisitions  yet to be fully
 integrated  in  accordance  with our plans are  eNunciate            Corporation,
 Budget  Conferencing  and Meet24 due to the  complexities  related to technology
 integration  and the recent            nature of such acquisitions.

| | 17 | 
| | -- | 

---

Risks Related to
Intellectual Property

We may not be able
to protect our  proprietary  technology and  intellectual  property  rights,  which could
result in the loss of our rights or increased costs.

We
rely primarily on a combination of  intellectual  property laws and  contractual
 provisions to protect our  proprietary            rights and technology,  brands and
marks.  These laws and  contractual  provisions  provide only limited  protection of our
           proprietary rights and technology.  If we are not able to protect our
intellectual  property and our proprietary rights and            technology,  we could
lose those rights and incur  substantial  costs  policing and defending  those  rights.
 Our means of            protecting our  intellectual  property,  proprietary  rights and
technology may not be adequate,  and our  competitors  may            independently
develop similar or competitive  technologies.  In addition, the laws of some foreign
countries do not protect            our proprietary rights to as great an extent as the
laws of the U.S.

If claims alleging
patent,  copyright or trademark  infringement are brought against us and successfully
 prosecuted  against us, they could result in substantial costs.

Many
patents, copyrights and trademarks have been issued in the general areas of information
services,  telecommunications,            computer  telephony and the  Internet.  From
time to time,  in the ordinary  course of our  business,  we have received and
           expect to continue to receive  notices,  or be subject to third party claims
or  proceedings,  alleging that our current or            future products or services
 infringe the patent,  copyright or trademark rights or other  intellectual  property
rights of            third  parties.  For example,  in August 2006, a lawsuit was filed
by Ronald A. Katz  Technology  Licensing,  L.P.  against            three conferencing
 service providers,  including us, alleging patent infringement  relating to our
automated  conferencing            services. The complaint seeks unspecified monetary
damages,  together with pre- and post-judgment interest,  treble damages            for
what is alleged to be willful  infringement,  attorneys fees and costs and injunctive
relief. In addition,  certain of            our former  Voicecom  business  segment
 customers  have alleged that we are  obligated  to indemnify  them against  patent
           infringement  claims made by Katz against such  customers.  We do not believe
that we have an obligation to indemnify  such            customers.  However, due to the
inherent  uncertainties of litigation,  we are unable to predict the outcome of this
matter            or other  infringement  proceedings  or claims,  and an adverse
 outcome  could  have a  material  effect on our  business,            financial
condition and results of operation.

We
ultimately may not prevail on any such claims and any claiming parties may have
significantly  greater resources than we            have to pursue litigation of these
types of claims.  Any infringement claim, whether with or without merit, could:

| |  | be
time consuming and a diversion to management;
| | - | ------------------------------------------------

| |  | result
in costly litigation;
| | - | ----------------------------

| |  | cause
delays in introducing new services or enhancements; and
| | - | -------------------------------------------------------------

| |  | result
in costly royalty or licensing agreements.
| | - | -------------------------------------------------

If a successful  claim is made
against us and we fail to develop  non-infringing  technology,  our business,  financial
 condition and results of operation could be materially adversely affected.

Risks Related to
Government Regulation

Regulatory and
legislative  changes may discourage  certain  customers from using some of our services
and could adversely  impact our results of operations.

Regulatory
and legislative changes have imposed additional  restrictions that may impact our
business. Such changes include            the passage of federal  legislation and rules
and regulations  relating to unsolicited fax advertising,  telemarketing  and
           unsolicited  commercial  e-mail.  The TCPA and associated rules  promulgated
by the FCC prohibit the sending of unsolicited            fax  advertisements  and
 proscribe  certain  telemarketing  practices.  Other  federal  laws  implemented  by the
FTC also            substantially  regulate  telemarketing,  including the establishment
of a nationwide do

| | 18 | 
| | -- | 

---

not call registry for residential
           and wireless telephone  numbers.  The Can Spam law places certain
 requirements on senders of commercial e-mail,  including            requiring  senders
to honor  opt-out  requests and banning false and deceptive  headers and subject  lines.
 In addition to            federal laws and  regulations,  there are numerous  state laws
and  regulations  governing such  activities.  For instance,            certain states
regulate or restrict pre-recorded  telemarketing and other messages, and certain states
may restrict or make            political calls subject to do not call and other
requirements,  although such calls are exempt from the federal do not call
           requirements.  Compliance with  applicable  laws and  regulations  could have
an adverse impact on the volume of fax, voice            and e-mail messages sent
utilizing our platforms.  For example,  although  Congress amended the TCPA by passing
the JFPA to            expressly  permit the faxing of  advertisements  to entities  and
persons that have an EBR with a sender  provided  certain            conditions are met,
 Congress also imposed new notice language for fax  advertisements  and mandated an
opt-out  mechanism.            Despite the passage of the JFPA,  new notice  requirements
 and any future time limits on the EBR exemption may  discourage            use by some
of our broadcast fax customers and could adversely  impact our revenues.  In addition,
 if ultimately  adopted,            the FTCs proposed  restriction on pre-recorded
 telemarketing  calls, except in instances of prior express consent,  could
           also impact  customer  use of our  broadcast  voice  services  to the extent a
customer  sought to use these  services  for            marketing  messages,  distinct
 from  informational  or  transactional  messages.  We could,  nevertheless,  be  subject
to            litigation, fines, losses or other penalties under such laws and
regulations.

Government
 regulations  in the  U.S.  and  internationally  and the  legal  uncertainties  related
 to the  Internet  and  electronic communications may adversely affect the demand for our
services and place financial burdens on our business related to compliance.

Our
operations are, and may be, subject to laws and regulations in the U.S. and
internationally  regulating the unsolicited            transmission of fax
 communications,  telemarketing and e-mail laws and regulations.  We monitor such laws
and regulations,            have compliance  policies in place and our service agreements
with customers state that customers are responsible for their            compliance  with
all applicable  laws and  regulations.  We could,  nevertheless,  be subject to
litigation  concerning our            compliance and our customers  compliance with
these laws and  regulations,  as well as governmental  enforcement  actions,
           regulatory  fines and  penalties.  For  example,  in 2007,  we were named as a
 co-defendant  in a purported  class  action            alleging that our customer, Quiznos,
sent unsolicited fax advertisements in violation of the TCPA.

New
 laws  and  regulations  directed  specifically  at  electronic  commerce  and  the
 Internet  may  be  adopted  at the            international,  federal and state levels.
 These laws and  regulations  may cover issues such as collection and use of data
           from web sites, privacy,  e-mail,  network and information  security,  spamming, pricing,
 content,  copyrights and other            intellectual  property,  VoIP, changes in
telecommunications  regulations,  online gambling and distribution and quality of
           goods and services.  The enactment of any additional laws or regulations may
impede the growth of our web-enabled  products            and services and place
additional financial burdens on our business in order to comply with new laws and
regulations.

We may become
subject to various government regulations applicable to traditional  telecommunications
 service providers,  which could impair our ability to deliver our services and adversely
impact our results of operations.

Our
 business  is  affected  by  regulatory  decisions,  trends  and  policies  made by
 international,  federal  and state            telecommunications  regulatory  agencies,
 including the FCC and state public service  commissions.  We do not believe that
           our  enhanced   information   services  are  subject  to  the  same
  regulations   as  those   applicable  to  traditional            telecommunications
 service providers in the U.S. However, it is possible that regulatory  authorities may
take a different            position  and  may  seek  to  require  us  to  submit  to
 traditional  telecommunications  carrier  regulation  under  the
           Communications  Act of 1934,  as amended,  and various  state laws as a
provider of  telecommunications  services.  We have            received, and certain
companies that we acquired had received,  letters from the Investigations and Hearing
Division of the            FCCs Enforcement Bureau regarding  registration,  filing and
regulatory  surcharge remittance  requirements  applicable to            traditional
 telephone  companies.  In each case, we have  responded to the FCCs  inquiries.  In
addition,  certain of our            competitors  have  received  such  letters  and/or
 are  involved  in  investigations  before  the  FCC or  USAC  regarding
           registration,  filing and  surcharge  remittance  requirements,  and we could
be adversely  affected by the outcome of such            investigations.  In the course
of one such  investigation  on January 15,  2008,  USAC issued a decision  finding  that
the            audio  bridging  services of InterCall are toll  teleconferencing
 services,  requiring  InterCall to comply with the FCCs            registration,
 filing and regulatory surcharge remittance  requirements  applicable to traditional
telephone companies on a            prospective  and retroactive  basis.  InterCall has
appealed the USAC

| | 19 | 
| | -- | 

---

decision to the FCC and has sought a
stay of the USAC            decision.  The FCC, in turn, has issued a public notice
seeking comments  regarding  InterCalls  submissions.  Although we            use
reasonable efforts to monitor applicable regulatory  requirements,  if we fail to comply
with any applicable government            regulations  or if we were  required  to
 submit  to the  jurisdiction  of such  government  authorities  as  providers  of
           traditional  telecommunications  services in the same manner as described in
USACs decision regarding InterCall,  we could            be temporarily  prohibited
 from providing  portions of our services,  could have to restructure  portions of our
services,            could become subject to reporting and compliance  obligations on
both a prospective and  retroactive  basis and/or could be            subject to
 litigation,  fines,  forfeitures,  regulatory  surcharge  remittance  requirements  (on
both a prospective  and            retroactive  basis) or other penalties arising from
any  noncompliance.  Subjecting our services to these regulations would
           increase our operating costs and could have a material adverse affect on our
business,  financial  condition and results of            operations.

Risks Related to
International Operations and Expansion

There are risks
inherent in international operations that could hinder our international growth strategy.

Our
ability to achieve future success will depend in part on the expansion of our
 international  operations.  For example,            we  recently  opened a branch
 office  in  India.  There  are  difficulties  and risks  inherent  in doing  business
 on an            international  level that could  prevent us from selling our services
in other  countries or hinder our  expansion  once we            have established
international operations, including, among other things, the following:

| |  |  | burdensome
regulatory requirements and unexpected changes in these requirements;
| | - |  | --------------------------------------------------------------------------------

| |  |  | export
restrictions and controls relating to technology;
| | - |  | --------------------------------------------------------

| |  |  | data
privacy laws that may apply to the transmission of our customers data to the U.S.;
| | - |  | ----------------------------------------------------------------------------------------

| |  |  | tariffs
and other trade barriers;
| | - |  | ---------------------------------

| |  |  | difficulties
in staffing and managing international operations;
| | - |  | ---------------------------------------------------------------

| |  |  | localization
of our services, including translation into foreign languages and associated expenses;
| | - |  | ---------------------------------------------------------------------------------------------------

| |  |  | accounting
 (including  managing  internal control over financial  reporting in our non-U.S.
 subsidiaries),  tax and legal            complexities arising from international
operations;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | longer
accounts receivable payment cycles and collection difficulties;
| | - |  | ----------------------------------------------------------------------

| |  |  | political
and economic instability;
| | - |  | -----------------------------------

| |  |  | fluctuations
in currency exchange rates;
| | - |  | ----------------------------------------

| |  |  | potential
difficulties in transferring funds generated overseas to the U.S. in a tax efficient
manner;
| | - |  | ------------------------------------------------------------------------------------------------------

| |  |  | seasonal
reductions in business activity during the summer months in Europe and other parts of the
world; and
| | - |  | -------------------------------------------------------------------------------------------------------------

| |  |  | potentially
adverse tax consequences.
| | - |  | -------------------------------------

We could experience
losses from fluctuations in currency exchange rates.

We
conduct  business in 23 countries with  approximately  36.6% of our operating  expenses
and  approximately  40.0% of our            consolidated net revenues derived in foreign
currencies.  Accordingly,  we could experience material losses in revenues and
           earnings  due to  fluctuations  in foreign  currencies.  We have not

| | 20 | 
| | -- | 

---

experienced  any  material  losses
in  earnings  from            fluctuations in currency  exchange  rates,  but we could in
the future.  We typically  denominate  foreign  transactions in            foreign
currency and have not regularly  engaged in hedging  transactions,  although we may
engage in hedging  transactions            from time to time in the future.

Item 1B.
    Unresolved Staff Comments

None.

Item 2.    Properties

Our
current  corporate  headquarters  occupy an aggregate of  approximately  47,000 square
feet of office space in Atlanta,            Georgia under leases  through two of our
 subsidiaries  which are guaranteed by us and which will expire in August 2014. We
           occupy  additional  space of  approximately  45,000 square feet in Tinton
Falls,  New Jersey under a lease  expiring in May            2016,  approximately 94,000
square feet in Colorado Springs,  Colorado under a lease expiring August 2010 and
approximately            46,000 square feet of office space in Lenexa, Kansas under a
lease expiring in August 2009.

We
also lease  various  server  equipment  and sales  offices  within and  outside  the U.S.
 We believe  that our  current            facilities  and office  space are  sufficient
 to meet our present  needs and do not  anticipate  any  difficulty  securing
           additional space, as needed, on terms acceptable to us.

Item 3.    Legal
Proceedings

We
have several litigation matters pending,  including matters described below, which we are
defending  vigorously.  Due to            the inherent  uncertainties of the litigation
process and the judicial system, we are unable to predict the outcome of such
           litigation  matters.  If the  outcome of one or more of such  matters  is
 adverse to us, it could have a material  adverse            effect on our business,
financial condition and results of operations.

On
August 21,  2006,  a lawsuit was filed in the U.S.  District  Court for the Eastern
 District of Texas by Ronald A. Katz            Technology  Licensing,  L.P.  against
three  conferencing  service  providers,  including us, alleging that the defendants           automated
 telephone  conferencing  systems that enable [their] customers to perform
 multiple-party  meetings and various            other  functions  over the  telephone  infringe
six of  plaintiffs  patents.  The complaint  seeks  undisclosed  monetary
           damages,  together with pre- and  post-judgment  interest,  treble damages for
what is alleged to be willful  infringement,            attorneys  fees and costs and
 injunctive  relief.  On October 16,  2006,  we filed our answer,  affirmative  defenses
and            counterclaim to the complaint,  including seeking declaratory judgment of
noninfringement,  invalidity and unenforceability            and attorneys fees and
costs. On January 25, 2007,  plaintiff  amended its complaint to also add our subsidiary,
 American            Teleconferencing  Services,  Ltd.,  as a party.  On March 20, 2007,
a  multidistrict  litigation  panel granted a motion to            consolidate 25 pending
 infringement suits,  including our suit, brought by Katz against various defendants to
the District            Court in California.  Discovery is on-going.

On
May 18, 2007, Gibson & Co. Ins. Brokers, Inc. served an amended complaint upon us
and our subsidiary, Xpedite, in a purported class action entitled, Gibson
& Co. Ins. Brokers, Inc., et al. v. The Quiznos Corporation, et al., pending in
U.S. District Court for the Central District of California. The
underlying complaint alleges that Quiznos sent unsolicited fax
advertisements on or about November 1, 2005 in violation of the federal Telephone
Consumer Protection Act of 1991, as amended, and seeks damages of $1,500
per fax for alleged willful conduct in sending of the faxes. On June 26,
2007, we answered the plaintiffs amended complaint, including asserting
cross-claims against the Quiznos defendants. On June 29, 2007, the Quiznos
defendants filed their answer and asserted cross-claims against us. On July 31, 2007,
the court entered an order in which it granted certain Quiznos defendants motion
to dismiss and denied the motion with respect to other Quiznos entities.
On September 7, 2007, plaintiff proceeded to file another amended complaint against
the Quiznos defendants, Growth Partners (Quiznos consultant), and us.
On September 21, 2007, we filed our answer and affirmative defenses. Certain
Quiznos defendants filed a Motion to Dismiss, which was denied by the Court on December
7, 2007. Subsequently, we filed cross-claims against the other defendants
and the Quiznos defendants filed cross-claims

| | 21 | 
| | -- | 

---

against us. The case is currently in
discovery,  and no class has yet been  certified.  We have asserted  indemnity  rights
           against our customer  Quiznos,  a defendant in this case,  and  insurance
 coverage  against our insurer.  Our insurer has            agreed to participate in our
defense in connection with the plaintiffs claims against us, subject to certain
 reservations            of rights and the terms of the policy,  including  policy limits
and  deductibles.  On February 12 - 13, 2008,  the parties            engaged in
 mediation.  The parties  have  reached a global  settlement  in  principle  that should
 resolve all claims and            cross-claims  and have filed a stipulation  with the
court  informing the court and  extending the various  deadlines.  The
           settlement is subject to final  documentation by the parties and approval by
the court.  Our financial  contribution to the            settlement will be well below
the limits of our insurance policy.

We
are also involved in various other legal  proceedings  which we do not believe will have
a material  adverse effect upon            our business,  financial condition or results
of operations,  although no assurance can be given as to the ultimate outcome
           of any such proceedings.

Item 4.
     Submission of Matters to a Vote of Security Holders

No
matter was  submitted to a vote of our  security  holders  during the fourth  quarter of
the fiscal year covered by this            report.

| | 22 | 
| | -- | 

---

Part II

Item 5.    Market for
Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities

Our
 common  stock,  $.01 par value per  share,  is listed on the New York  Stock  Exchange
 under the  symbol  PGI.  The            following  table sets forth the high and low
 closing  sales  prices of our common  stock as  reported  on the NYSE for the
           periods indicated.

|2007           | High | Low   
|-------------- | ---- | ------
|Fourth Quarter |      | $16.69
|Third Quarter  |      | 13.50 
|Second Quarter |      | 13.40 
|First Quarter  |      | $11.25

|2006           | High | Low  
|-------------- | ---- | -----
|Fourth Quarter |      | $9.44
|Third Quarter  |      | 8.86 
|Second Quarter |      | 8.09 
|First Quarter  |      | $9.22

The
closing  price of our common  stock as reported on the NYSE on February  22, 2008 was
$12.97.  As of February  22, 2008            there were 483 record holders of our common
stock.

We
have never paid cash  dividends on our common stock,  and the current  policy of our
board of directors is to retain any            available  earnings for use in the
operation and  expansion of our  business.  The payment of cash  dividends on our common
           stock is unlikely in the foreseeable  future.  Any future  determination to
pay cash dividends will be at the discretion of            our board and will depend upon
our  earnings,  capital  requirements,  financial  condition  and any other  factors
 deemed            relevant by our board.

Our
credit  agreement  contains  customary  prohibitions  on our ability to declare any cash
 dividends on our common stock            until all obligations  under the line of credit
are paid in full and all letters of credit have been  terminated.  See Item            7.
Managements Discussion and Analysis of Financial Condition and Results of Operations in
this annual report.

Issuer Purchases of
Equity Securities

|Period                   | Total Number 
      of Shares 
      Purchased | Average 
      Price Paid 
      Per Share | Total Number of Shares 
      Purchased as Part of 
      Publicly Announced 
      Plans or Programs | Maximum Number of 
      Shares that May Yet Be 
      Purchased Under the 
      Plans or Programs
|------------------------ | ---------------------------------------------- | ------------------------------------------ | ----------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------
|October 1-31,
      2007 |                                                |                                           |                                                                                                       |                                                                                                   
|November 1-30, 2007      |                                                | 111,700                                    |                                                                                                       | $13.67                                                                                             
|December 1-31, 2007      |                                                | 478,300                                    |                                                                                                       | $13.57                                                                                             
|                         |                                                |                                            |                                                                                                       |                                                                                                    
|Total                    |                                                | 590,000                                    |                                                                                                       | $13.59                                                                                             

In
2007, we completed a self-tender offer pursuant to which we repurchased and retired
 approximately 9.7 million shares of            our common stock. In June 2006, our board
of directors authorized,  and we announced,  a new stock repurchase program under
           which  we  could  purchase  up to 7.0  million  shares  of our  common  stock.
 In that  same  month,  we had  reached  our            Board-authorized  limit of 5.4
million shares from our prior stock repurchase program, which had been approved by our
board            in May 2000, as amended and increased in January 2003.  See Note 2 to
our consolidated financial statements.

| | 23 | 
| | -- | 

---

Stock Performance Graph

We
 previously  used a peer group which had been selected in good faith by us and included
the  following  publicly  traded            companies: ACT Teleconferencing,  Critical
Path, Inc., Docucorp International, Inc., EasyLink Services Corporation, Genesys
           SA, J2 Global Communications, Inc. and WebEx Communications, Inc.

All
but one of our 2007 peer group  companies  ceased to be a public  company last year
because  they were  acquired,  went            private or were  delisted from the
national  exchange  that they had been trading on.  Because we are unaware of any single
           competitor  that  provides  all of the  services  that we deliver,  we believe
 that using a published  industry  index for            comparing  shareholder  return,
 such as the S&P 500  Software & Services  Index,  provides  a better  reference
 point for            investors when evaluating our stock performance.

The
following graph shows the cumulative total shareholder  return on our common stock, the
Standard & Poors 500 Composite            Stock Price Index,  the S&P 500
 Software & Services  Index and our 2007 peer group for the period  beginning
 December 31,            2002 and ending December 31, 2007 or until our 2007 peer group
companys  common stock was no longer publicly  traded.  The            graph  assumes an
 investment  in our common  stock,  the S&P 500, the S&P 500 Software & Services
 Index and our 2007 peer            group of $100 on December 31, 2002,  and that all
dividends were  reinvested.  Total return  calculations  were prepared by            the
Research  Data Group,  Inc.  The stock price  performance  in this graph is not
 necessarily  indicative  of the future            performance of our common stock.



|                                        | 12/31/02 | 12/31/03 | 12/31/04 | 12/31/05 | 12/31/06 | 12/31/07
|--------------------------------------- | -------- | -------- | -------- | -------- | -------- | --------
|Premiere Global Services,
      Inc.    | 100.00   | 200.23   | 243.41   | 184.77   | 214.55   | 337.50  
|S&P 500                                 | 100.00   | 128.68   | 142.69   | 149.70   | 173.34   | 182.87  
|S&P 500 Software &
      Services Index | 100.00   | 122.90   | 136.38   | 134.53   | 145.87   | 172.38  
|Peer Group                              | 100.00   | 161.77   | 192.72   | 197.41   | 280.49   | 260.43  

This  performance  graph shall not
be deemed  filed for purposes of Section 18 of the  Securities  Exchange Act of 1934,
 as amended (Exchange  Act), or  incorporated  by reference into any of our filings under
the Securities Act of 1933, as amended,  or the Exchange Act, except as shall be
expressly set forth by specific reference in such filing.

| | 24 | 
| | -- | 

---

Item 6.    Selected
Financial Data

The
following selected consolidated  statement of operations data, balance sheets data and
cash flow data as of and for the            years ended  December 31,  2007,  2006,
 2005,  2004 and 2003 have been  derived  from our audited  consolidated  financial
           statements.  The selected consolidated  financial data should be read in
conjunction with Item 7. Managements  Discussion            and Analysis of Financial
 Condition and Results of Operations  and our  consolidated  financial  statements and
the notes            hereto in Item 8. Financial Statements and Supplementary Data included
in this annual report.

|                                                          |  |             
|--------------------------------------------------------- |  | ------------
|
|                                                          |  |             
|Statement of Operations
      Data:                       |  |             
|Net
      revenues                                        |  | $ 559,706   
|Operating
      income                                    |  | 61,546      
|Income
      from continuing operations attributable to   | 
|common
      and common equivalent shares for:            | 
|basic
      income per share                             |  | 33,355      
|diluted
      income per share                           |  | 33,355      
|Income
      from continuing operations per common        | 
|and
      common equivalent shares for:                   | 
|basic
      (1)                                          |  | $       0.53
|diluted
      (1)                                        |  | $       0.52
|                                                          | 
|(Loss)
      gain from discontinued operations            |  |            
|Net
      income attributable to common and common        | 
|equivalent
      shares for:                              | 
|basic
      net income per share                         |  | 33,355      
|diluted
      net income per share                       |  | 33,355      
|Net
      income per common and common                    | 
|equivalent
      shares for:                              | 
|basic
      (1)                                          |  | $       0.53
|diluted
      (1)                                        |  | $       0.52
|Shares
      used in computing income from continuing     | 
|operations
      and net income per common and            | 
|common
      equivalent shares for:                       | 
|basic                                                    |  | 62,654      
|diluted                                                  |  | 63,940      
|                                                          | 
|Balance Sheets Data
      (at period end):                | 
|Cash,
      equivalents and marketable securities         |  | $   18,259  
|Working
      capital                                     |  | 21,669      
|Total
      assets                                        |  | 624,087     
|Total
      debt                                          |  | 269,481     
|Total
      shareholders equity                          |  | 242,207     
|Statement of Cash
      Flows Data:                       | 
|Cash
      provided by (used in) operating activities     | 
|from:                                                     | 
|Continuing
      operations                               |  | 91,587      
|Discontinued
      operations-Voicecom                    |  | (650        
|                                                          |  |             
|Total                                                     |  | $   90,937  
|Cash
      (used in) investing activities                 |  | $  (94,090  
|Cash
        provided by  (used in)  financing activities |  | $     1,901 

---

|(1) |  | Basic net income per share
      is computed using the weighted average number of shares of common stock
      outstanding during the period. Diluted net income per share is computed
      using the weighted average number of shares of common stock and dilutive
      common stock equivalents outstanding during the period from convertible
      subordinated notes (using the if-converted method), warrants, unvested restricted
      stock and from stock options (using the treasury stock method). Net income
      available to common shareholders was adjusted for the interest expense related
      to our convertible notes prior to conversion.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 25 | 
| | -- | 

---

Our
 results of  operations  include net  revenues  and  associated  costs for all
 acquisitions  as  discussed  in Item 7.            Managements  Discussion and
Analysis of Financial  Condition and Results of  Operations  from the effective date of
each            acquisition.

Item 7.    Managements
Discussion and Analysis of Financial Condition and Results of Operations

Overview

We
are a global provider of applied  communication  technologies  that help businesses
 automate and improve their business            processes.  Our   PGiCOS   delivers  multiple  industry-  and  function-specific
           business  applications.  We go to market on a global  basis in three  segments
in North  America,  Europe and Asia with the            following five solution sets:
 Conferencing & Collaboration,  Desktop Document  Solutions,  Enterprise  Document
Solutions,            Notifications & Reminders and eMarketing.

Key
highlights of our financial and strategic accomplishments for 2007 include:

| |  |  | Grew
consolidated net revenues by nearly 13% in 2007 compared to 2006;
| | - |  | ----------------------------------------------------------------------

| |  |  | Grew
cash flows provided by operating activities by greater than 24% compared to 2006;
| | - |  | --------------------------------------------------------------------------------------

| |  |  | Expanded
our credit facility to $325.0 million to augment our access to capital (which was further
expanded to $375.0            million in January 2008);
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Repurchased
more than 10 million shares of our common stock, or approximately 15% of our total shares
outstanding; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------

| |  |  | Launched
our web portal, PGiConnect.com, to bring all of our capabilities online.
| | - |  | ---------------------------------------------------------------------------------

Our
primary corporate  objectives in 2008 are focused on continuing to enhance our customer
and shareholder value, which we            believe will enhance the positive momentum we
have generated in our business.

Specifically,
in the year ahead our plan is to:

| |  |  | Focus
our sales efforts on selling additional PGiCOS solutions and applications into our
existing base of customers;
| | - |  | --------------------------------------------------------------------------------------------------------------------

| |  |  | Introduce
 new PGiCOS  business  applications  that meet the  specific  needs of targeted
 industries  and  horizontal  job            functions;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Introduce
 new pricing  options,  including  subscription  and  license  pricing  options,  that
are more common with other            on-demand service providers; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Continue
to enhance our web presence, including adding greater functionality to our web portal at
PGiConnect.com.
| | - |  | -----------------------------------------------------------------------------------------------------------------

We
also plan to improve our profitability by continuing to automate our internal  processes
and by focusing our development            efforts on continuing to enhance open access
to our platform and solutions and on more highly automated  applications  that
           have shorter sales cycles and implementation times.

We
believe our success  against  these  objectives  will enable us to continue to increase
 our market share and to improve            shareholder value throughout the remainder of
2008.

The
preparation of financial  statements in conformity with generally accepted accounting principles in the U.S. (GAAP)  requires us to make
estimates and assumptions  that affect            the reported  amounts of assets and
 liabilities  and  disclosure of contingent  assets and

| | 26 | 
| | -- | 

---

liabilities at the date of the
           financial  statements and reported amounts of net revenues and expenses during
the reporting  period.  Actual results could            differ from the estimates.  See
the section in this annual report entitled Critical  Accounting  Policies. The
following            discussion  and analysis  provides  information  which we believe is
relevant to an  assessment  and  understanding  of our            consolidated  results
of  operations  and financial  condition.  This  discussion  should be read in
 conjunction  with our            consolidated financial statements contained herein and
notes thereto.

Results of Operations

The
following  table  presents the  percentage  relationship  of certain  statements of
operations  line items to total net            revenues for our consolidated operating
results for the periods indicated:

|                                                                                                                  | Year Ended December 31,
|----------------------------------------------------------------------------------------------------------------- | -----------------------
|
|Net revenues                                                                                                      |                        
|                                                                                                                  |                        
|Operating expenses                                                                                                |                        
|Cost
      of revenues (exclusive of depreciation and amortization                                                |                        
|shown
      separately below)                                                                                     |                        
|Selling
      and marketing                                                                                       |                        
|General
      and administrative (exclusive of net legal settlements shown
               separately
      below) |                        
|Research
      and development                                                                                    |                        
|Depreciation                                                                                                      |                        
|Amortization                                                                                                      |                        
|Restructuring
      costs                                                                                         |                        
|Asset
      impairments                                                                                           |                        
|Net
      legal settlements and related expenses                                                                  |                        
|                                                                                                                  |                        
|Total
      operating expenses                                                                                    |                        
|                                                                                                                  |                        
|Operating income                                                                                                  |                        
|                                                                                                                  |                        
|                                                                                                                  |                        
|Other (expense) income                                                                                            |                        
|Interest
      expense                                                                                            |                        
|Interest
      income                                                                                             |                        
|Other,
      net                                                                                                  |                        
|                                                                                                                  |                        
|Total
      other (expense) income                                                                                |                        
|                                                                                                                  |                        
|Income from continuing
      operations                                                                           |                        
|before
      income taxes                                                                                         |                        
|Income tax expense                                                                                                |                        
|                                                                                                                  |                        
|Income from continuing
      operations                                                                           |                        
|                                                                                                                  |                        
|                                                                                                                  |                        
|Discontinued operations:                                                                                          |                        
|Loss
      from operations of Voicecom                                                                            |                        
|Income
      tax benefit                                                                                          |                        
|                                                                                                                  |                        
|Loss
      on discontinued operations                                                                             |                        
|                                                                                                                  |                        
|                                                                                                                  |                        
|Net income                                                                                                        |                        
|                                                                                                                  |                        

| | 27 | 
| | -- | 

---

The
following table presents  certain  financial  information  about our segments for the
periods  presented (in millions),            with amortization expense and asset
impairments allocated to the appropriate geographic segment:

|                                                | Year Ended December 31,
|----------------------------------------------- | -----------------------
|
|NET REVENUES:                                   |                        
|Net revenues from continuing
      operations:  |                        
|North
      America                             |                        
|Europe                                          |                        
|Asia
      Pacific                              |                        
|                                                |                        
|                                                |                        
|                                                |                        
|INCOME (LOSS):                                  |                        
|Income (loss) from continuing
      operations: |                        
|North
      America                             |                        
|Europe                                          |                        
|Asia
      Pacific                              |                        
|                                                |                        
|                                                |                        
|                                                |                        
|Loss from discontinued
      operations:        |                        
|North
      America  Voicecom                  |                        
|                                                |                        
|                                                |                        
|Net
      income:                               |                        
|                                                |                        

Net revenues

Consolidated
 net revenues  from  continuing  operations  were $559.7  million in 2007,  $496.5
 million in 2006 and $497.5            million in 2005.  Consolidated  net revenues in
2007  increased  from the previous year by 12.7% and in 2006 decreased from
           the previous year by 0.2%.  Net revenues  increased in 2007 from the previous
year  primarily as a result of organic growth            in our  Conferencing  &  Collaboration
 Solutions,  the  strengthening  of  various  currencies  to the  U.S.  dollar,  our
           acquisitions of the following  Conferencing & Collaboration  Solutions
providers:  eNunciate,  EC Teleconferencing Pty Ltd.            (ECT), Budget
 Conferencing Inc. and Meet24, the conferencing and web collaboration  division of
NetConnect Systems AS, our            acquisition of an E-Marketing  Solutions  provider,
 Accucast,  Inc., offset in part by declines in broadcast fax revenues.
           Strengthening  of various  currencies  to the U.S.  dollar  resulted  in
 increased  revenues  in 2007  compared to 2006 of            approximately  $10.6
million.  Consolidated net revenues  decreased in 2006 from the previous year primarily
as a result of            declines in broadcast fax revenue and declines in  Conferencing
& Collaboration  Solutions  revenue from  historically  our            largest
 customer,  offset in part by organic  growth in our  Conferencing  &  Collaboration
 Solutions  excluding this one            customer,  our acquisitions of the following
 Conferencing & Collaboration  Solutions  providers:  Citizens  Communications
           Companys  conferencing services business,  Intelligent Meetings Corporation,
 Netspoke,  Inc., eNunciate and ECT, and our            acquisition of Accucast.

North
America net revenue was 63.7%,  64.3%, and 64.6% of consolidated net revenues for 2007,
2006 and 2005,  respectively.            North America net revenue was $356.7  million in
2007,  $319.3  million in 2006 and $321.4  million in 2005.  North America            net
revenue in 2007  increased  from the previous  year by 11.7% and, in 2006,  decreased
 from the previous  year by 0.7%.            North  America  net  revenue  increased  in
2007 from the  previous  year  primarily  as a result of organic  growth in our
           Conferencing & Collaboration Solutions, our acquisitions of eNunciate,
 Budget Conferencing and Accucast,  Desktop Document            Solutions and
 strengthening  of the Canadian  Dollar to the U.S.  dollar by  approximately  $0.4
million.  This growth was            offset  primarily by declines in our broadcast fax
revenue.  North America net revenue  decreased in 2006 from the previous            year
primarily as a result of declines in our broadcast fax revenue and  Conferencing  &  Collaboration
 Solutions  revenue            from  historically  our  largest  customer,  offset in
part by our  acquisitions  of Citizens  Communications  conferencing            services
 business,  Intelligent  Meetings,  Netspoke,  eNunciate,  and Accucast and organic
 growth in our  Conferencing &           Collaboration  Solutions  excluding this one
customer,  and Desktop  Document  Solutions.  Our Conferencing & Collaboration
           Solutions  revenue  in North  America  was $269.6  million,  $219.5  million
 and  $203.3  million in 2007,  2006 and 2005,            respectively.  Our broadcast
fax revenue in North America was $20.3 million,  $28.3 million and $44.8 million in 2007,
2006            and 2005, respectively.

| | 28 | 
| | -- | 

---

Europe
net revenue was 18.5%, 18.7%, and 19.9% of consolidated net revenues for 2007, 2006 and
2005,  respectively.  Europe            net  revenue  was $103.3  million in 2007,  $93.0
 million in 2006 and $99.1  million in 2005.  Europe net  revenue in 2007
           increased  from the  previous  year by 11.0% and, in 2006,  decreased  from
the previous  year by 6.2%.  Europe net revenue            increased  from the previous
year primarily as a result of organic growth in our  Conferencing &  Collaboration
 Solutions,            our acquisition of Meet24 and the  strengthening of the Euro and
British Pound to the U.S.  dollar.  This growth was offset            in part by declines
in our broadcast fax revenue.  Europe net revenue declined in 2006 primarily as a result
of declines in            broadcast fax revenue,  offset in part by organic growth in our
 Conferencing & Collaboration  Solutions.  Strengthening of            the Euro and
the British Pound to the U.S. dollar resulted in increased  revenues in 2007 compared to
2006 of approximately            $7.6  million.  Our  Conferencing & Collaboration
 Solutions  revenue in Europe was a $46.6 million,  $31.0 million and $25.5
           million in 2007,  2006 and 2005,  respectively.  Our broadcast fax revenue in
Europe was $23.6  million,  $29.0 million and            $35.6 million in 2007, 2006 and
2005, respectively.

Asia
Pacific net revenue was 17.8%,  17.0%, and 15.5% of consolidated  net revenues for 2007,
2006 and 2005,  respectively.            Asia  Pacific net revenue was $99.7  million in
2007,  $84.2  million in 2006 and $77.0  million in 2005.  Asia Pacific net
           revenue in 2007 and 2006  increased  from each of the  previous  years by
18.4% and 9.4%,  respectively.  Asia  Pacific net            revenue  increased in 2007
 primarily as a result of organic  growth in our  Conferencing &  Collaboration
 Solutions,  our            acquisition of ECT, the strengthening of various  currencies
to the U.S. dollar,  growth in our Maritime  Notifications and            Reminders
 Solutions (which we resale from a third party to shipping companies in this region),
 offset in part by declines            in our broadcast fax revenue.  Asia Pacific net
revenue  increased in 2006  primarily as a result of organic  growth of our
           solution  sets and our  acquisition  of ECT,  offset in part by a weakening
 of the Yen to the U.S.  dollar and declines in            broadcast fax revenue.
 Strengthening  of the various  currencies in Asia Pacific to the U.S.  dollar resulted
in increased            revenue in 2007 compared to 2006 of  approximately  $2.6 million.
 Our  Conferencing & Collaboration  Solutions  revenue in            Asia Pacific was
$42.5 million,  $29.5 million and $23.1 million in 2007,  2006 and 2005,  respectively.
 Our broadcast fax            revenue in Asia Pacific was $32.4 million, $34.3 million
and $36.4 million in 2007, 2006 and 2005, respectively.

Cost of revenues

Consolidated
cost of revenues were 40.6%, 40.5%, and 36.3% of consolidated  revenues in 2007, 2006 and
2005,  respectively.            Consolidated cost of revenues from continuing  operations
 increased 13.4% to $227.3 million in 2007 from $200.5 million in            2006  and
 increased  10.8% in 2006  from  $181.0  million  in 2005.  Consolidated  cost of
 revenues  as a  percentage  of            consolidated  net  revenues   remained  flat
 in  2007  compared  to  2006  as  a  as  a  result  of  re-negotiated   lower
           telecommunications  costs, our continued  migration to VoIP and the initial
 benefits of our service delivery  organization            re-engineering  efforts.
 These cost reductions,  however were offset by declines in high margin broadcast fax
services and            price  compression  in our  Conferencing  &  Collaboration
 Solutions.  Consolidated  cost of revenues as a  percentage  of            consolidated
 net  revenues  increased  in 2006  compared to 2005 as a result of  decreased  revenues
 due to declines in a            significant higher margin Conferencing & Collaboration
 Solutions revenue from historically our largest customer and higher            margin
broadcast fax services.

North
America cost of revenue totaled $142.0 million in 2007,  $124.4 million in 2006 and
$108.7 million in 2005, or 39.8%,            39.0% and 33.8% of segment net revenue,  in
2007,  2006 and 2005,  respectively.  North  America  cost of revenue  includes
           approximately  $0.3  million,  $0.7  million  and $0.2  million  for 2007,
 2006 and 2005,  respectively,  of  equity-based            compensation  costs which
 increased in 2006 as a result of our adoption of SFAS No.  123(R),  Share Based  Payment (SFAS
           123(R)).  In 2007,  North America cost of revenue  increased as a percentage
of segment net revenue  primarily due to lower            average  selling prices per
minute in our  Conferencing & Collaboration  Solutions,  declines in broadcast fax
services and            growth in our web  conferencing  services  that  carry a higher
 percentage  cost of  revenue,  offset by lower  negotiated            telecommunications
  costs  per  minute  and  reduced  customer  service  costs  associated  with  our
 non-Conferencing  &           Collaboration  Solutions revenue.  These reduced
 non-Conferencing  & Collaboration  Solutions customer service costs are a
           result of  re-engineering  efforts  in the first half of 2007.  In 2006,
 North  America  cost of  revenue  increased  as a            percentage of segment net
revenue primarily due to regulatory  telecommunications  costs, our acquisition of
Accucast (with            our eMarketing  Solutions  carrying a higher  percentage  cost
of revenue),  lower average selling prices per minute in our            organic
 Conferencing  &  Collaboration  Solutions,  the decline of revenue from
 historically  our largest  Conferencing &           Collaboration  Solutions
 customer  with higher  margins,  declines in lower cost of revenue for broadcast fax
services and            growth in our web conferencing services that carry a higher
percentage cost of revenue.

| | 29 | 
| | -- | 

---

Europe
cost of revenue totaled $37.0 million in 2007, $35.4 million in 2006 and $38.9 million in
2005, or 35.9%,  38.1% and            39.3% of segment  net  revenue,  in 2007,  2006 and
2005,  respectively.  In 2007,  Europe  cost of revenue  declined  as a
           percentage  of segment net  revenue  primarily  as a result of an  increase
 in revenue  mix towards  lower cost of revenue            Conferencing &  Collaboration
 Solutions from higher cost of revenue  broadcast fax services and reduced  customer
 service            costs  associated  with  our  non-Conferencing  &  Collaboration
 Solutions  revenue.  These  reduced   non-Conferencing  &           Collaboration
 Solutions  customer service costs are a result of our  re-engineering  efforts in the
first half of 2007. In            2006,  Europe cost of revenue  declined as a percentage
 of segment net revenue  primarily as a result of lower  negotiated
           telecommunications  costs per  minute and an  increase  in  revenue  mix
 towards  lower  cost of  revenue  Conferencing  &           Collaboration Solutions
from higher cost of revenue broadcast fax services.

Asia
Pacific cost of revenue  totaled  $48.3  million in 2007,  $40.7  million in 2006 and
$33.3 million in 2005, or 48.4%,            48.3% and 43.3% of segment net  revenue,  in
2007,  2006 and 2005,  respectively.  In 2007,  Asia  Pacific  cost of revenue
           increased as a percentage  of segment net revenue  primarily as a result of
lower  average  selling price per minute in our            Conferencing & Collaboration
 Solutions,  offset in part by reductions in telecommunication  costs from network
performance            improvements.  In 2006,  Asia Pacific  cost of revenue  increased
 as a  percentage  of segment net revenue  primarily as a            result of lower
average selling price per minute in  Conferencing & Collaboration  Solutions and
broadcast fax services and            telecommunications  cost  increases  in  certain
 countries  where  telecommunications   remain  highly  regulated  by  the
           government.  Increases  in costs  related to certain of our reseller
 arrangements  that carry higher costs of revenue also            contributed to this
increase.

Selling and
marketing

Consolidated
 selling and marketing  expenses from  continuing  operations as a percent of
 consolidated  net revenues were            25.2%, 26.7% and 25.8% in 2007, 2006 and
2005,  respectively.  Consolidated  selling and marketing expenses from continuing
           operations  increased  6.8% to $141.3  million in 2007 from $132.3  million in
2006, and increased 2.9% in 2006 from $128.6            million in 2005.  Consolidated
 selling and marketing  expense as a percentage of net revenue  declined in 2007 as
compared            with 2006 and  increased in 2006 as compared with 2005.  The increase
in  consolidated  selling and  marketing  expenses in            2007  compared to 2006
are  associated  with $4.3  million  from our  acquisitions  of  Accucast,  eNunciate,
 ECT,  Budget            Conferencing  and Meet24,  $2.7 million from the  strengthening
 of various  currencies to the U.S. dollar and $2.0 million            from  increased
 investments  in our sales and marketing  efforts  throughout  2007.  The increase in
selling and marketing            expenses in 2006 compared to 2005 were associated
 primarily with our increased  investment in sales and marketing  efforts
           throughout 2006.

North
America  selling and  marketing  expenses as a percent of segment net revenue were 24.7%,
 27.6% and 26.3%,  in 2007,            2006 and 2005,  respectively.  North America
 selling and marketing  expense  increased  0.1% to $88.1 million in 2007 from
           $88.0 million in 2006, and increased 4.0% in 2006 from $84.6 million in 2005.
 North America selling and marketing  expense            includes $1.8 million, $1.8
million and $1.0 million for 2007, 2006 and 2005,  respectively,  of equity-based
 compensation            expense  which  increased  in 2006 as a result of our adoption
of SFAS 123(R).  The increase in North  America  selling and            marketing
 expense in 2007 compared to 2006 is associated  with increased  costs of $2.9 million
from our  acquisitions  of            Accucast,  eNunciate and Budget Conferencing,
 additional  investment sales personnel of $1.2 million,  offset in part by a
           reduction  of $4.0  million in  marketing  support  costs  associated  with
our 2006  corporate  branding  initiatives  and            non-Conferencing  & Collaboration
 Solutions  promotions.  The increase in North America  selling and marketing  expense in
           2006 compared to 2005 is primarily  associated with our  acquisitions  of
Accucast and eNunciate and costs  associated with            corporate branding
initiatives related to corporate organizational changes.

Europe
selling and marketing  expenses as a percent of segment net revenue were 30.8%,  27.5%
and 26.0%,  in 2007, 2006 and            2005,  respectively.  Europe selling and
marketing  expense  increased 24.3% to $31.8 million in 2007 from $25.6 million in
           2006, and decreased 0.8% in 2006 from $25.8 million in 2005.  Europe selling
and marketing  expense  includes $0.3 million,            $0.2 million and $0.0 million
for 2007, 2006 and 2005, respectively,  of equity-based  compensation expense which
increased            in 2006 as a result of our adoption of SFAS 123(R).  The increase in
Europe  selling and  marketing  costs in 2007 compared            to 2006 is  associated
 with $2.1  million  related to the Euro and British Pound  strengthening  to the U.S.
 dollar,  $1.0            million from our  acquisition of Meet24 and $3.1 million from
our  investments  in sales  personnel to support our solution            sets.  The
 increase in Europe  selling and

| | 30 | 
| | -- | 

---

marketing  costs in 2006  compared
to 2005 is  associated  with  increases  in            Conferencing & Collaboration
 Solutions sales personnel offset in part by reductions in sales personnel associated
with our            broadcast fax services.

Asia
selling and  marketing  expenses as a percent of segment net revenue were 21.4%,  22.2%
and 23.7%,  in 2007,  2006 and            2005,  respectively.  Asia  Pacific  selling
and  marketing  expense  increased  14.4% to $21.4  million in 2007 from $18.7
           million in 2006,  and  increased  2.7% in 2006 from $18.2  million in 2005.
 Asia  Pacific  selling and  marketing  expense            includes $0.1 million, $0.1
million and $0.0 million for 2007, 2006 and 2005,  respectively,  of equity-based
 compensation            expense  which  increased in 2006 as a result of our adoption of
SFAS  123(R).  The increase in Asia selling and  marketing            costs in 2007
compared to 2006 is associated  with $0.6  million from various  currencies  strengthening
 to the U.S. dollar            and $1.6   million of  investments  in sales  personnel  to
support our  solution  sets.  The  increase in Asia  selling and            marketing
costs in 2006 compared to 2005 is primarily  associated with increases in Conferencing
& Collaboration  Solutions            sales personnel offset in part by reductions in
sales personnel associated with our broadcast fax services.

Research and
development

Consolidated
 research and  development  expenses from continuing  operations as a percentage of
consolidated  net revenues            were 2.5%,  2.4% and 2.2% in 2007,  2006 and 2005,
 respectively.  Consolidated  research  and  development  expenses  from
           continuing  operations increased 16.5% to $14.1 million in 2007 from $12.1
million in 2006 and increased 11.3% in 2006 from            $10.8 million in 2005.
 Consolidated  research and development  expense included  approximately $0.8 million,
 $0.8 million            and $0.1 million for 2007, 2006 and 2005, respectively,  of
equity-based  compensation expense which increased in 2006 as a            result of our
adoption of SFAS 123(R).  Research and  development  costs  increased  as a percentage
 of  consolidated  net            revenues in 2007 and 2006 as a result of a greater
amount of internal costs incurred for  maintenance of our platforms.  We
           capitalized  $9.8    million,  $8.0  million and $9.1  million in 2007,  2006
and 2005,  respectively,  of internal  software            development  costs. The
increase in internal costs  capitalized is primarily the result of increased  product
offerings and            product enhancements within our solution sets.  Research and
development expenses are primarily incurred in the U.S.

General and
administrative

Consolidated
 general and  administrative  expenses from continuing  operations as a percentage of
consolidated net revenue            were   11.8% in 2007,  2006 and  2005,  respectively.
 Consolidated  general  and  administrative  expenses  from  continuing
           operations  increased  12.6% to $66.0  million in 2007 from $58.6 million in
2006,  and  increased  0.2% in 2006 from $58.5            million in 2005.  Consolidated
 general and administrative  expenses from continuing  operations increased in 2007
compared            to 2006 as a result of $2.9  million  in  increased  proxy-related
 costs,  $1.9  million  related to our  acquisitions  of            Accucast,  eNunciate,
ECT, Budget Conferencing and Meet24, $1.0 million associated with various currencies
strengthening to            the U.S.  dollar    with the remaining increases associated with duplicative  rent from
our corporate  headquarters  relocation and with legal expenses            associated
with various matters in our commitments and contingencies footnote to our consolidated
financial statements.

North
America  general and  administrative  expenses as a percentage of segment net revenue
were 12.6%,  12.9% and 12.5% in            2007, 2006 and 2005,  respectively.  North
America general and  administrative  expense  increased 9.5% to $45.1 million in
           2007 from  $41.2  million in 2006 and  increased  4.8% in 2006,  from $40.0
 million in 2005.  North  America  general  and            administrative  expenses
include $6.6 million, $6.2 million and $5.7 million,  respectively,  of equity-based
 compensation            expense  which  increased  in 2006 as a result of our adoption
of SFAS 123(R).  The increase in North  America  general and            administrative
 expenses  is  associated  with $1.5   million  from our  acquisitions  of  Accucast,
 eNunciate  and  Budget            Conferencing,  approximately $2.9 million in
proxy-related costs, $1.7 million of duplicative rent costs from our corporate
           headquarters  relocation and with legal expenses  associated  with various
 matters in our  commitments  and  contingencies            footnote to our consolidated
 financial  statements.  These increases in costs are offset by reductions in bad debt
expense            of  approximately  $2.5 million as a result of improved  collections
 activity  during 2007.  The increase in North America            general and
 administrative  expenses in 2006 is  primarily  the result of  increased  bad debt
 expenses  associated  with            specific collections challenges incurred during
2006 from previous years acquisitions.

Europe
 general and  administrative  expenses as a percentage  of segment net revenue were
12.2%,  11.1% and 11.6% in 2007,            2006 and 2005,  respectively.  Europe general
and  administrative  expense  increased  21.1% to

| | 31 | 
| | -- | 

---

$12.6 million in 2007, from
           $10.3 million in 2006 and decreased  11.2% in 2006 from $11.5 million in 2005.
 Europe general and  administrative  expense            includes $0.3 million, $0.2
million and $0.2 million for 2007, 2006 and 2005,  respectively,  of equity-based
 compensation            expense  which  increased  in 2006 as a result  of our  adoption
 of SFAS  123(R).  The  increase  in  Europe  general  and            administrative
 expenses in 2007 is associated  with $0.8 million from  strengthening  of the Euro and
British pound to the            U.S.  dollar,  $0.3  million  from our  acquisition  of
Meet 24, with the remaining   related to  increased  bonus  compensation            associated
 with  achievement  of plan  objectives  in 2007 as  compared  to 2006.  The  decrease
 in  Europe  general  and            administrative  expenses in 2006 compared to 2005 is
primarily the result of decreased  bonus  compensation  as a result of            the
failure to achieve plan objectives in 2006.

Asia
general and administrative  expenses as a percentage of segment net revenue were 8.4%,
8.4% and 9.1% in 2007, 2006 and            2005,  respectively.  Asia general and
administrative  expense increased 18.2% to $8.4 million in 2007 from $7.1 million in
           2006 and increased 1.4% in 2006 from $7.0 million in 2005. Asia Pacific
general and  administrative  expense  includes $0.3            million, $0.3 million and
$0.2 million for 2007, 2006 and 2005,  respectively,  of equity-based  compensation
expense which            increased  in 2006 as a result of our adoption of SFAS 123(R).
 The  increase in Asia general and  administrative  costs in            2007 compared to
2006 is associated with $0.2 million related to various currencies  strengthening to the
U.S. dollar, $0.1            million  associated with our acquisition of ECT, with the remaining difference in  duplicative  rent and relocation costs associated with our            office
 relocation in Tokyo and    increased  finance and
 executive  support costs related to            revenue  growth  within the region.  The
 increase in Asia  general and  administrative  costs in 2006  compared to 2005 is
           associated primarily with our acquisition of ECT.

Depreciation

Consolidated
 depreciation expenses from continuing operations as a percentage of consolidated net
revenues were 5.4%, 4.9%            and 5.0% in 2007, 2006 and 2005,  respectively.
 Consolidated  depreciation  expenses from continuing  operations increased
           22.1% to $30.0  million in 2007 from $24.6  million in 2006 and  decreased
 0.8% from $24.8  million in 2005.  Depreciation            expense  has  increased  as a
 percentage  of  consolidated  net  revenues as we  continue  to invest in our  services
 and            infrastructure to support our solutions revenue.

North
America  depreciation  expense  totaled  $23.9  million in 2007,  $18.2 million in 2006
and $17.9 million in 2005, or            6.7%,  5.7% and 5.6% of segment net revenue,  in
2007, 2006 and 2005,  respectively.  Europe  depreciation  expense totaled
           $3.4  million in 2007,  $3.8 million in 2006 and $3.9 million in 2005,  or
3.3%,  4.1% and 4.0% of segment net revenue,  in            2007, 2006 and 2005,
 respectively.  Asia Pacific  depreciation  expense totaled $2.8 million in 2007, $2.6
million in 2006            and $2.9 million in 2005, or 2.8%, 3.1% and 3.8% of segment
net revenue, in 2007, 2006 and 2005, respectively.

Amortization

Consolidated
 amortization from continuing  operations as a percentage of consolidated net revenues
was 2.8%, 2.6% and 2.7%            in 2007,  2006 and 2005,  respectively.  Consolidated
 amortization  from  continuing  operations was $15.7 million,  $13.0            million
and $13.2 million in 2007,  2006 and 2005,  respectively.  Amortization  expense has
increased in absolute  dollars            primarily as a result of our acquisitions made
in 2006 and 2007.

North
America  amortization  expense  totaled  $13.5  million in 2007,  $11.2 million in 2006
and $10.5 million in 2005, or            3.8%,  3.5% and 3.3% of segment net revenue,  in
2007, 2006 and 2005,  respectively.  Europe  amortization  expense totaled
           $1.7  million in 2007,  $1.6 million in 2006 and $2.7 million in 2005,  or
1.7%,  1.7% and 2.7% of segment net revenue,  in            2007, 2006 and 2005,
 respectively.  Asia Pacific  amortization  expense totaled $0.4 million in 2007, $0.2
million in 2006            and $0.0 million in 2005, or 0.4%, 0.3% and 0.0% of segment
net revenue, in 2007, 2006 and 2005, respectively.

Restructuring costs

Consolidated
 restructuring costs from continuing  operations as a percentage of consolidated
 revenues were 0.6%, 1.7% and            0.7% in 2007, 2006 and 2005, respectively.
 Consolidated  restructuring costs from continuing operations were $3.4 million,
           $8.4 million and $3.3 million in 2007, 2006 and 2005, respectively.

| | 32 | 
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Realignment of
Workforce  2007

In
2007, we executed a restructuring plan to consolidate our  non-Conferencing  & Collaboration
 Solutions service delivery            organizations.  As part of this  consolidation,
 we  eliminated  84 positions.  We incurred  approximately  $4.1 million in
           severance  costs  associated  with the  elimination  of these  positions.
 Additionally,  we incurred $0.1 million of lease            termination  costs
 associated  with our Paris,  France office.  On a segment basis,  these  restructuring
 costs were $1.1            million in North  America,  $2.7 million in Europe and $0.4
million in Asia  Pacific.   Estimated annual savings from this  consolidation is approximately $6.0 million. During 2007,  we paid  approximately            $3.1 million
related to these severance and exit costs, and  approximately  $0.1 million related to
these lease termination            costs.  During the twelve  months ended  December 31,
2007, we adjusted our  restructuring  reserve by  approximately  $0.2            million
 as a result of actual  severance  payments  to  certain  individuals  being  less than
 originally  estimated.  We            anticipate the remaining  restructuring cost to be
paid during 2008. Our reserve for these  restructuring costs at December            31,
2007 was approximately $0.8 million.

Realignment of
Workforce  2006

In
2006, we executed a restructuring plan to streamline the management of our business on a
geographic  regional basis from            our former  Conferencing & Collaboration
 and Data  Communications  business  segments.  As part of this  streamlining,  we
           eliminated 100 positions within customer  service,  finance,  operations and
sales and marketing.  In the fourth quarter of            2006, we entered into a
separation  agreement in connection  with the resignation of our former chief  investment
 officer.            We incurred  approximately $8.0 million in severance costs
associated with these positions,  which included the issuance of            restricted
stock having a fair market value of $0.6 million.  Additionally,  we incurred $0.6
million of lease  termination            costs  associated  with five  locations  within
North  America.  On a segment basis,  these  restructuring  costs were $4.6
           million in North  America,  $3.3 million in Europe and $0.7 million in Asia
Pacific.  In the twelve  months ended  December            31, 2007, we paid
 approximately  $3.4 million  related to these  severance and exit costs.  During the
twelve months ended            December 31, 2007, we adjusted our  restructuring  reserve
by  approximately  $0.5 million as a result of actual  severance            payments to
certain individuals being less than originally  estimated.  We anticipate the remaining
costs to be paid during            2008.  Our reserve for these restructuring costs at
December 31, 2007 was approximately $0.1 million.

Realignment of
Workforce  2005

In
2005,  we  incurred  $3.3  million of  restructuring  costs.  These costs were
 associated  with the  elimination  of 90            employees  in selling and
 marketing,  operations  and  finance  functions,  primarily  in North  America  and
Europe.  The            reductions in non-financial  functions are the result of the
significant declines in our North America and Europe broadcast            fax services
revenue.  The reductions in financial functions are the result of duplicative  business
processes within North            America  and  Europe  finance  departments.  As of
 December  31,  2007,  we have  completed  this  restructuring  plan and
           accordingly, no reserves remain.

Our
reserve for restructuring costs incurred in years prior to 2005 was $2.4 million at
December 31, 2007.

Asset impairment

Asset
 impairments were $0.1 million in 2006 relating to the  discontinuation  of technology
 acquired in 2003 in our North            America operating segment.

Net legal
settlements and related expenses

Net
legal  settlements  and related  expenses  were $0.3  million,  $0.6 million and $2.0
 million in 2007,  2006 and 2005,            respectively.  In 2007, we incurred
 settlement costs associated with  acquisitions made in previous years for matters that
           arose  subsequent to such  acquisitions.  In 2006, we resolved a dispute with
one of our  telecommunications  providers for            approximately  $0.6  million.
 In  February  2006,  we settled  contract  litigation  with  Captaris  relating to a
license            agreement and a reseller  agreement  entered into in connection  with
our  acquisition of MedaLinq  assets from Captaris in            September  2003.  As
this lawsuit  arose prior to December 31, 2005, we were required to adjust the 2005
results to reflect            this settlement and related legal fees of $2.4 million, net
of accruals of $0.4 million previously recorded.

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Interest expense

Interest
 expense from  continuing  operations  was $13.6  million,  $9.1 million and $5.6 million
in 2007,  2006 and 2005,            respectively.  Interest  expense  increased in 2007
and 2006 primarily as a result of increased  average  borrowings on our            credit
facility resulting from acquisitions and increases in LIBOR.  Average outstanding
 borrowings on our credit facility            during 2007 and 2006 were $204.1  million,
 $119.6  million and $99.8 million,  respectively.  The increase in borrowing on
           our credit facility in 2007 compared to 2006 is primarily the result of
borrowings  associated  with our self-tender  offer            in which we acquired
 approximately  $122.5 million of our common shares  outstanding  during May 2007, as
well as with our            Budget and Meet24 acquisitions.

In
August 2007, we entered into two $100.0  million  two-year  interest rate swaps at a
fixed rate of  approximately  4.99%            plus  applicable  spread.  In  December
 2007,  we amended the life of one of the $100.0  million  swaps to three years and
           reduced  the fixed rate to  approximately  4.745%.  These swaps are  exclusive
 of our  applicable  margin as stated in our            credit  facility.  We did not
designate  these  interest rate swaps as hedges and account for them in accordance  with
SFAS            No. 133,  Accounting for Derivative  Instruments and Hedging Activities (SFAS
No. 133). Changes in fair value, which were            approximately $0.2 million of
income for the twelve months ended December 31, 2007, are recognized in earnings.

In
February 2006, we entered into a three-year  $50.0 million  interest rate swap at a fixed
rate of 4.99% plus  applicable            spread,  and in August 2006,  we entered into
two  separate  three-year  $12.5  million  interest  rate swaps at 5.135% and
           5.159%,  respectively.  These swaps were exclusive of our applicable  margin
as stated in our credit  facility.  We did not            designate  these  interest rate
swaps as hedges and accounted for them in accordance  with SFAS No. 133.  During the
second            quarter of 2007, we terminated  these  interest rate swaps and recorded
a gain of  approximately  $0.4 million in Interest            expense in the
 accompanying  consolidated  statements of  operations.  Changes in fair value prior to
the  termination of            these swaps were  approximately $0.1 million of benefit
for the twelve months ended December 31, 2007 and are recognized in            earnings.

Interest income

Interest
 income was $0.8 million,  $0.5 million and $0.6 million in 2007,  2006 and 2005,
 respectively.  Interest  income            remained relatively flat in all three periods
as we maintained a stable cash and cash equivalent  outstanding  balance. The
           average cash and cash equivalents were $18.6 million in 2007, $19.7 million in
2006, and $23.2 million in 2005.

Loss on sale of
marketable securities

Loss
on marketable  securities was $(0.1) in 2005.  During 2005, we sold the remaining
 securities of various  companies in            the same industry as us.  As of December
31, 2007, we do not hold any marketable securities.

Other, net

Other,
 net was $1.4  million,  $1.4 million and $0.1 million in 2007,  2006 and 2005,
 respectively.  In 2007 and 2006, we            incurred foreign exchange gains of
approximately $1.4 million related to cash settlements of intercompany  transactions and
           the Canadian dollar component of our existing line of credit.

Income taxes

In
2007,  2006  and  2005,  our  effective  income  tax rate  varied  from the  statutory
 rate  primarily  as a result  of            non-deductible  compensation costs and
changes in valuation  allowances.  Changes in valuation allowances are required when
           facts and circumstances surrounding these estimates have changed.

The
provision for income taxes and  corresponding  balance sheet accounts are  determined in
accordance  with SFAS No. 109,            Accounting  for Income Taxes (SFAS No. 109).
 Under SFAS No. 109, the deferred tax  liabilities and assets are determined
           based on temporary  differences  between the basis of certain assets and
liabilities for income tax and financial reporting            purposes,  in  addition  to
net  operating  loss  carryforwards  which are  reasonably  assured  of being  utilized.
 These            differences  are primarily  attributable to the recognition of
 depreciation  and

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amortization of property,  equipment
and            intangible  assets,  allowances  for  doubtful  accounts and certain
 employee  benefit  accruals.  Deferred tax assets and            liabilities  are
measured by applying  enacted  statutory  tax rates  applicable  to future years in which
the deferred tax            assets or  liabilities  are expected to be settled or
realized.  Valuation  allowances  are  established  when necessary to            reduce
 deferred tax assets to the amount  expected to be realized.  During the year ended
December 31, 2007, our valuation            allowance  increased by  approximately
 $0.5 million,  primarily a result of a $1.8 million increase in the valuation
           reserves placed on certain current-year state and foreign operating losses
that, in managements  opinion, will more likely            than not remain  unutilized
 and a $1.3  million  decrease  due to the  transfer  to the opening  balance of our  FIN 48
reserve.            During  2007 and 2006,  we  provided  additional  deferred  net
 deferred  tax  assets of $0.4  million  and $0.5  million,            respectively,
 associated with identified subsidiaries that could provide dividends on unremitted
earnings in excess of our            initial investment.

On
July 13,  2006,  the  Financial  Accounting  Standards  Board  (FASB)  issued
 Interpretation  No. 48,  Accounting  for            Uncertainty  in Income  Taxes An
 Interpretation  of FASB  Statement  No.  109 (FIN No.  48).  FIN No. 48  clarifies  the
           accounting  for  uncertainty  in income taxes  recognized  in an entitys
 financial  statements  in  accordance  with FASB            Statement No. 109,  Accounting
 for Income Taxes and prescribes a recognition  threshold and  measurement  attributes
for            financial statement  disclosures of tax positions taken or expected to be
taken on an income tax return.  Under FIN No. 48,            the impact of an uncertain
 income tax position on the income tax return must be recognized  at the largest  amount
that is            more-than-likely-than-not  to be sustained upon audit by the relevant
taxing  authority.  An uncertain  income tax position            will not be  recognized
 if it has less  than a 50%  likelihood  of being  sustained.  Additionally,  FIN No.  48
 provides            guidance on derecognition,  classification,  interest,  penalties
and disclosures. FIN No. 48 is effective for fiscal years            beginning after
December 15, 2006.

We
adopted the provisions of FIN No. 48 on January 1, 2007. We recorded  provisions for
certain international and            state income tax uncertain tax positions
based on the  recognition and measurement  standards of FIN No. 48. As a result of
           our adoption of FIN No. 48,  approximately  $1.3 million was recorded as a
reduction to retained earnings as an increase to            reserves for  uncertain  tax
 positions.  At the adoption  date of January 1, 2007,  we had  approximately  $6.3
million of            unrecognized tax benefits.  Included in the balance  at January 1, 2007 is approximately  $5.6            million of unrecognized
 tax benefits,   all of which
would affect our  effective  tax rate if  recognized.  This amount is  classified  as Income
 taxes            payable in the  accompanying  consolidated  balance  sheet.  We file
federal  income tax returns and income tax returns in            various states and
international  jurisdictions.  In major tax jurisdictions,  tax years from 1997 - 2006
remain subject to            income tax examinations by tax authorities.

As
of December 31, 2007, we have $4.6 million of  unrecognized  tax benefits,   including
 $1.4 million of  unrecognized  tax            benefits  that if recognized  would reduce
our annual  effective  tax rate.  In January 2008, an  outstanding  audit with the
           State  of New York was agreed to and  payment in the  amount of $0.2  million  including
 interest  was made.  With the  exception  of this            payment, we do not expect
our unrecognized tax benefit to change significantly over the next twelve  months.

As
permitted  with the  adoption of FIN No. 48, we have changed our  classification  of
interest and  penalties  related to            uncertain tax positions and recognize
 these costs in interest and penalties  expense.  As of December 31, 2007 and January
           1, 2007, we had accrued interest and penalties of  approximately  $1.3 million
and $0.9 million,  respectively,  related to            uncertain tax positions.

In
the normal course of business,  we are subject to inquiries from U.S. and non-U.S. tax
authorities  regarding the amount            of taxes due.  These  inquiries may result
in  adjustments  of the timing or amount of taxable  income or deductions or the
           allocation of income among tax  jurisdictions.  Further,  during the ordinary
course of business,  other changing facts and            circumstances  may impact our
ability to utilize  income tax benefits as well as the  estimated  taxes to be paid in
future            periods.  We believe we are  appropriately  accrued for income taxes.
 In the event that actual  results  differ from these            estimates,  we may need
to adjust Income taxes payable which could materially impact our financial  condition
and results            of operations.

Discontinued
operations

During
2005, we settled  litigation with JOBA, Inc., a franchisee of our former Voicecom
business  segment.  The parties to            the consolidated action and certain other
individuals and entities entered into a settlement agreement,  which provided for
           payment in the  aggregate of  approximately  $1.1 million to JOBA by our
 subsidiary,  Voice-Tel

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Enterprises,  LLC, and by
           Voicecom  Telecommunications,  LLC, an  unrelated  party which  purchased
 substantially  all of the assets of our Voicecom            business segment in March
2002.  Approximately  $0.9 million of this aggregate  settlement  payment was funded by
Voice-Tel            and  approximately  $0.2  million  was funded by Voicecom  in
 consideration,  for among  other  things,  dismissal  of the            litigation  with
prejudice,  mutual  releases and covenants not to sue and  termination of the JOBA
franchise.  Voice-Tels            portion of the  settlement  amount and  approximately
 $0.4 million in legal fees and expenses  were accrued as of June 30,            2005 and
included in the  Discontinued  operations line item in the consolidated  statements of
operations.  During 2005,            we also changed the estimated  liability for certain
lease obligations  associated with the discontinued  operations of our            former
Voicecom  reportable  segment.  The change is associated  with the failure to sublease
 certain floor space that was            assumed in the original  estimate.  As of
December 31, 2007,  there is no longer a lease  obligation  related to our former
           Voicecom reportable segment.

Acquisitions

We
seek to acquire  complementary  companies  that  increase  our market  share and provide
us with  additional  customers,            technologies,  applications and sales
personnel.  All revenues and related costs from these transactions have been included
           in our consolidated financial statements as of the effective date of each
acquisition.

North America

In
July  2007,  we  acquired  assets  and the stock of Budget  Conferencing,  a
 Canadian-based  provider  of audio and web            conferencing  services.  We paid
$19.8 million in cash at closing and $0.6 million in  transaction  fees and closing
costs.            We funded the purchase through our line of credit. We followed SFAS No.
141,  Business  Combinations  (SFAS No. 141), and            approximately  $0.2
 million has been  allocated  to acquired  fixed  assets,  $0.1  million  has been
 allocated  to other            acquisition  liabilities,  $6.6 million has been
allocated to identifiable  customer lists, $1.3 million has been allocated            to
trademarks  and $1.4 million has been  allocated to a  non-compete  agreement,  with the
 identifiable  customer  lists,            trademarks and non-compete  agreements
amortized over five-year useful lives. In addition,  $2.6 million has been allocated
           to  long-term  deferred tax  liabilities  to record the step-up in basis for
the customer  lists and  developed  technology            purchased.  Because we have not
finalized the working capital  component of the purchase price,  the residual $13.6
million            of the aggregate  purchase price has been allocated to goodwill,
 which is subject to a periodic  impairment  assessment in            accordance with
SFAS No. 142, Goodwill and Other Intangible Assets (SFAS No. 142).

In
September 2006, we acquired assets and the stock of eNunciate,  a Canadian-based
 provider of audio and web conferencing            services.  We paid CA$29.0  million in
cash at closing and CA$0.7 million in transaction  fees and closing costs. We funded
           the purchase  through  Canadian  dollar  borrowings on our line of credit and
Canadian dollar cash balances  available.  We            followed SFAS No. 141 and
 approximately  CA$0.3 million has been  allocated to acquired  fixed assets,  CA$0.3
million has            been allocated to acquired  working  capital,  CA$6.8 million has
been allocated to identifiable  customer lists and CA$0.2            million has been
allocated to a non-compete  agreement,  with the  identifiable  customer lists and
 non-compete  agreement            amortized over five-year useful lives.  The residual
CA$22.1 million of the aggregate  purchase price has been allocated to
           goodwill, which is subject to a periodic impairment assessment in accordance
with SFAS No. 142.

In
January  2006,  we acquired all of the  outstanding  stock of Accucast,  a U.S.-based
 provider of e-mail  communication            services.  We paid $12.3  million in cash
at closing and $0.5  million in  transaction  and closing  costs.  Subsequent  to
           closing,  we paid an additional  $3.0 million cash purchase  price upon the
 achievement  of certain  milestone  targets as            specified  in the purchase
 agreement.  We funded the purchase  through our line of credit.  We followed  SFAS No.
141, and            approximately  $0.2  million has been  allocated  to acquired  fixed
 assets,  $0.1  million  has been  allocated  to other            acquisition
 liabilities,  $2.0 million has been  allocated to developed  technology and $1.0 million
has been allocated to            identifiable  customer lists, with the identifiable
customer lists and developed technology amortized over five-year useful            lives.
 In addition,  $1.2 million has been allocated to long-term  deferred tax liabilities to
record the step-up in basis            for the customer lists and developed technology
 purchased.  The residual $13.9 million of the aggregate purchase price has
           been allocated to goodwill, which is subject to a periodic impairment
assessment in accordance with SFAS No. 142.

In
August 2005, we acquired all of the outstanding stock of Netspoke,  a U.S.-based
 provider of audio and web conferencing            services.  We paid $23.4 million in
cash at closing and $0.5 million in transaction  fees and closing

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costs.  We funded the
           purchase through our line of credit.  We followed SFAS No. 141, and
 approximately  $1.1 million of the aggregate  purchase            price has been
 allocated to acquired  working  capital,  $0.7 million has been  allocated to acquired
 fixed assets,  $1.6            million has been  allocated to severance  and certain
other  acquisition  liabilities,  $2.9 million has been  allocated to
           identifiable  customer lists,  $1.0 million has been allocated to developed
 technology and $0.6 million has been allocated            to a non-compete agreement,
 with the identifiable customer lists, developed technology and non-compete agreement
amortized            over five-year useful lives. In addition,  $1.8 million has been
allocated to long-term  deferred tax liabilities to record            the step-up in
basis for the customer  intangible  assets purchased.  The residual $21.0 million of the
aggregate  purchase            price has been allocated to goodwill, which is subject to
a periodic impairment assessment in accordance with SFAS No. 142.

In
June 2005, we acquired  substantially  all of the assets and assumed  certain
 liabilities  of Intelligent  Meetings,  a            U.S.-based  provider of audio and
web  conferencing  services.  We paid $6.2 million in cash at closing and $0.1 million in
           transaction  fees and closing  costs.  We funded the  purchase  through our
line of credit.  We followed  SFAS No. 141, and            approximately  $0.4 million of
the aggregate  purchase price has been allocated to acquired working  capital,  $0.1
million            has been  allocated to acquired fixed assets,  $0.1 million has been
 allocated to severance and certain other  acquisition            liabilities,  $2.0
 million has been  allocated to  identifiable  customer  lists and $0.1 million has been
 allocated to a            non-compete  agreement,  with the  identifiable  customer
lists and non-compete  agreement  amortized over five-year useful            lives.  The
residual $3.8 million of the aggregate  purchase  price has been  allocated to goodwill,
 which is subject to a            periodic impairment assessment in accordance with SFAS
No. 142.

In
March 2005, we acquired  substantially  all of the assets and assumed certain
 liabilities of the conferencing  services            business of Citizens
 Communications,  primarily  servicing  customers in the U.S. We paid $43.2 million in
cash at closing            and $0.2 million in transaction  fees and closing  costs.  We
funded the purchase  through our line of credit.  We followed            SFAS No. 141,
and  approximately  $2.1  million of the  aggregate  purchase  price has been  allocated
to acquired  working            capital,  $0.9 million has been  allocated to acquired
 fixed  assets,  $2.5  million has been  allocated to severance  and            certain
other  acquisition  liabilities and $6.0 million has been allocated to identifiable
 customer lists which are being            amortized over a five-year  useful life.  The
residual $36.9 million of the aggregate  purchase price has been allocated to
           goodwill, which is subject to a periodic impairment assessment in accordance
with SFAS No. 142.

Europe

In
 November  2007,  we  acquired  the stock of Meet24,  a  Nordic-based  provider of
 conferencing  and web  collaboration            services.  We paid $26.3 million in cash
at closing and $0.2 million in transaction  fees and closing costs.  We funded the
           purchase  through our line of credit and cash and cash  equivalents  on hand.
We followed SFAS No. 141, and  approximately,            $0.2 million has been allocated
to acquired  fixed assets,  $1.4 million has been  allocated to acquired  working
 capital,            $0.9 million has been  allocated  to acquired  deferred tax assets,
 $3.8 million has been  allocated to other  acquisition            liabilities,  $8.8
 million has been  allocated to  identifiable  customer  lists and $0.7 million has been
 allocated to a            non-compete  agreement,  with the identifiable  customer lists
and non-compete  agreements  amortized over five-year useful            lives.  In
addition,  $2.7 million has been  allocated to long-term  deferred tax  liabilities.  We
have not  finalized the            working  capital  component of the purchase  price.
 The residual  $21.0 million of the aggregate  purchase  price has been
           allocated to goodwill, which is subject to a periodic impairment assessment in
accordance with SFAS No. 142.

Asia Pacific

In
November 2006, we acquired certain assets and assumed certain liabilities of ECT, an
Australian-based  provider of audio            and web  conferencing  services.  We paid
AU$5.7  million in cash at closing  and AU$0.4  million in  transaction  fees and
           closing  costs.  We funded  the  purchase  through a  Yen-denominated  line of
credit  with  Sumitomo  Mitsui  Banking  and            Australian  dollar cash on hand.
 We followed SFAS No. 141, and  approximately  AU$0.1  million of the  aggregate
 purchase            price has been allocated to acquired fixed assets,  AU$0.5 million
has been allocated to acquired working  capital,  AU$1.4            million  has been
 allocated  to  identifiable  customer  lists and AU$0.1  million  has been  allocated
 to a  non-compete            agreement,  with the  identifiable  customer lists and
non-compete  agreement  amortized over five-year  useful lives.  The            residual
 AU$4.0 million of the aggregate  purchase  price has been  allocated to goodwill,  which
is subject to a periodic            impairment assessment in accordance with SFAS No. 142.

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Liquidity and capital
resources

As
of December 31, 2007,  we had $18.3  million in cash and cash  equivalents  compared to
$19.0 million as of December 31,            2006. Cash balances  residing  outside of the
U.S. as of December 31, 2007 were $19.4 million  compared to $18.4 million as
           of December  31,  2006.  We  repatriate  cash for  repayment  of royalties
 and  management  fees charged to  international            locations  from the U.S. and
dividends  from Japan.  Therefore,  foreign  exchange  gains and losses  resulting  from
these            transactions are recorded in Other,  net on the face of the
 consolidated  statements of operations.  Intercompany  loans            with foreign
 subsidiaries  generally are  considered to be permanently  invested for the  foreseeable
 future.  Therefore,            foreign exchange gains and losses resulting from these
transactions are recorded in the cumulative  translation  adjustment            account
on face of the consolidated  balance sheets.  Based on our potential cash position and
potential  conditions in the            capital  markets,  we could  require  repayment
of these loans  despite the  long-term  intention to hold them as permanent
           investments.  During  December  2007, we increased  the  availability  of our
line of credit from $300.0  million to $325.0            million.  At December 31, 2007,
we had approximately  $58.3 million of availability  under our existing $325.0 million
line            of credit.  For a discussion of our line of credit, see   Capital resources.

Cash provided by
operating activities

Consolidated
 operating cash flows from continuing operations were $91.6 million,  $74.1 million and
$92.6 million in 2007,            2006 and 2005,  respectively.  Consolidated operating
cash flows from continuing operations increased $17.4  million in 2007            from
2006 and  decreased  $18.5  million in 2006 from 2005.  In 2007,  operating  cash flows
 before  changes in assets and            liabilities  were $86.3  million.  In 2007,
 changes to assets and liabilities  were $5.3 million.  The change in assets and
           liabilities  was due primarily to increases in income taxes payable related to
reduced income taxes paid in 2007 associated            with bonus  depreciation  elected
from prior years. In 2006,  operating cash flows before changes in assets and liabilities
           were $76.9 million.  In 2005, changes to assets and liabilities were $(2.8)
million.  In 2005,  operating cash flows before            changes in assets and
liabilities  were $105.5 million.  In 2005,  changes to assets and liabilities  were
$(12.9) million.            The change in assets and  liabilities  was primarily
 attributable  to growth in our  receivables due to the integration of            various
 acquisitions  and growth in revenues which have longer payment terms,  the payment of
federal income taxes accrued            in 2004 at a greater amount than in 2005 and the
favorable result of accrued vendor disputes resolved in 2005.

Cash used in
investing activities

Consolidated
 investing activities used cash of approximately $94.1 million, $81.0 million and $107.6
million in 2007, 2006            and 2005,  respectively.  Cash used in 2007 was
 primarily  related  to $47.8  million to fund our  acquisitions  and $46.3
           million of capital  expenditures.  Cash used in 2006 was primarily  related to
$49.0 million used to fund our  acquisitions            and  $31.9  million  of  capital
 expenditures.  Cash  used in 2005 was  primarily  related  to $79.9  million  to fund
our            acquisitions and $28.2 million of capital expenditures.

Cash provided by
financing activities

Consolidated
 financing activities provided cash of approximately $1.9  million,  $5.7 million, and
$15.4 million in 2007,            2006 and 2005,  respectively.  Cash provided  by financing
 activities  in 2007 was the result of net  borrowings  on our credit            facility
of $125.7  million  primarily  associated  with our  self-tender  offer,  $8.6 million
 received from stock option            exercises,  $3.3   million  from excess tax
 benefits  from  share-based  payment  arrangements  and $0.4  million from loan
           repayments  from our chief  executive  officer  offset by treasury  stock
 purchases of $136.0  million.  Cash  provided by            financing  activities in
2006 was the result of net borrowings on our credit  facility of $34.7 million,  used
primarily to            fund our  acquisitions,  $2.5 million  received from stock option
 exercises and $0.2 million from excess tax benefits from            share-based  payment
 arrangements  offset by treasury  stock  purchases  of $31.7  million.  Cash  provided
 by  financing            activities  in 2005 was primarily  the result of net
 borrowings  on our credit  facility of $29.4 million used to fund our
           acquisitions,  cash receipts from repayments of employee loans of $4.0 million
and $8.5 million  received from stock option            exercises offset by treasury
stock purchases of $26.5 million.

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Off-balance sheet
arrangements

As
of December  31, 2007,  we did not have any  off-balance-sheet  arrangements,  as defined
in Item  303(a)(4)(ii)  of SEC            Regulation S-K.

Commitments and
contingencies

At
December 31, 2007, we had the following contractual  obligations.  We are primarily
obligated under operating leases for            network  facilities and office space,
 outstanding  balances,  LIBOR interest and commitment fees under our line of credit,
           interest  rate swaps,  remaining  cash  payments  on current and prior year
 acquisitions  and  telecommunications  service            contractual minimum purchase
agreements.

The
following table displays contractual obligations as of December 31, 2007 (in thousands):

Contractual
  obligation
      AmountsCommitted
      2008
      2009
      2010
      2011
      2012
      There-AfterOperating leases
      46,055
      10,931
      8,278
      5,904
      4,242
      3,613
      13,087Current borrowings on line
  of  credit
      264,935
      
      
      
      264,935
      
      Credit facility commitment
  fees andinterest
      37,944
      13,250
      11,657
      10,116
      2,921
      
      Restructuring
  costs
      3,292
      1,717
      384
      384
      384
      384
      39Telecommunications serviceagreements
      8,367
      7,557
      810
      
      
      
      Acquisitions
      4,383
      3,297
      585
      248
      169
      84
      Capital leases
      4,546
      1,703
      1,533
      539
      424
      347
      Fin 48
      1,459
      1,459
      
      
      
      
      Asset retirement obligation
      438
      386
      52
      
      
      
      $371,418
      $40,300
      $23,299
      $17,191
      $273,076
      $4,429
      $13,124


The
contractual  obligations  table above contains only the portion of the liability  accrued
in accordance with FIN No. 48            that is expected to be settled  during 2008.
 The remaining  amount that has been accrued in accordance  with FIN 48 is not
           included in the  contractual  obligations  table because we are unable to
determine  when, or if,  payment of these amounts            will be made.

State sales taxes

We
have reserves for certain state sales tax  contingencies  based on the likelihood of
obligation in accordance  with SFAS            No. 5.  Historically,  we have not
collected  and remitted  state sales tax from  Conferencing  &  Collaboration
 Solutions            customers.  We  were  audited  by the  Commonwealth  of
 Massachusetts  Department  of  Revenue  claiming  that  our  audio
           conferencing  services  are subject to sales tax in  Massachusetts.  In March
 2006,  we began  assessing  sales tax to our            customers in  Massachusetts  as
a result of this audit.  In July 2006,  we paid an initial  payment of  approximately
 $1.2            million to the  Commonwealth of  Massachusetts  Department of Revenue
for taxable years prior to 2005.  Amounts  associated            with 2005 and early 2006
are still  under  review and have yet to be  settled.  After   we were
 approached  by the            State of Illinois in March 2007    regarding the taxability of our
 conferencing  services in the state,    we began assessing            sales
tax to our  customers  in  Illinois in April 2007.  Returns  were filed and  approximately  $0.6
 million was paid to the  Illinois            Department  of Revenue  for  taxable
 periods  prior to March  2007.  Additional  amounts  may be due as these  returns are
           audited.  More states may claim that we are subject to an assessment  of sales
taxes.  As of December 31, 2007 and December            31,  2006,  we had  reserved
 approximately  $5.2  million and $4.3  million,  respectively,  for  certain  state
sales tax            contingencies.  This amount is included in Accrued taxes in our   consolidated  balance sheets.  We believe we            are  appropriately
 accrued for these  contingencies.    In January 2008, an outstanding audit with the State of New York was agreed to and payment in the amount of $1.5 million was made for outstanding telecommunications excise taxes. In the event that actual results differ from these
reserves,  we may            need to make adjustments  which

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could materially  impact our
financial  condition and results of operations.  Historically,            we have
 collected and remitted  sales tax from our  non-Conferencing  &  Collaboration
 Solutions  customers in applicable            states.  However, it is possible states
may disagree with our method of assessing and remitting these state sales taxes.

Capital resources

In
December  2007,  we expanded the  committed  amounts of our credit  facility by $25.0
 million from $300.0 million to $325.0             million, which was further expanded to $375.0 million in January 2008.   We paid less than $0.1 million of
financing costs for each  expansion of our line of credit. Our credit facility also provides for an uncommitted accordian feature allowing for an additional increase up to $400.0 million of the revolving credit line, subject to its terms and conditions. Our credit
 facility is subject to customary  covenants for secured credit  facilities of this
nature.  Certain            of our material  domestic  subsidiaries  have guaranteed our
 obligations  under the credit  facility,  which is secured by            substantially
 all of our assets and the assets of our material  domestic  subsidiaries.  In  addition,
 we have pledged as            collateral all of the issued and outstanding stock of our
material domestic  subsidiaries and 65.0% of our material foreign            subsidiaries.

In
April 2007, we entered into an amendment to our credit  facility which inserted into the
applicable  margin pricing grid            a new tier  based on a total  leverage  ratio
of 2.5  times or  greater,  increased  the  permitted  covenant  level of the
           consolidated  total  leverage  ratio and amended  certain  other  provisions
 to allow us to purchase,  redeem or otherwise            acquire up to an additional
$150.0 million of our common stock during 2007, of which approximately  $122.5 million
has been            used to fund our self-tender offer in the second quarter of 2007.

We
believe that as of December 31, 2007, we were in compliance in all material  respects
with all covenants  under our line            of credit and have obtained any required
waivers or consents from lenders,  as applicable.  Proceeds drawn under our credit
           agreement may be used for refinancing of existing debt,  working  capital,
 capital  expenditures,  acquisitions  and other            general corporate  purposes.
 The annual interest rate applicable to borrowings under the line of credit, at our
option, is            the base rate (the greater of the federal funds rate plus 0.5% or
the Bank of America  prime rate) or LIBOR,  plus, in each            case, an applicable
 margin which will vary based upon our leverage  ratio at the end of each fiscal
 quarter.  At December            31, 2007, the applicable  margin with respect to base
rate loans was 0.0%, and the applicable  margin with respect to LIBOR            loans
was 1.50%.  At December 31,  2007,  our interest  rate on 30-day LIBOR loans was 6.10%.
 As of December 31, 2007,  we            had approximately $264.9 million of borrowings
 outstanding and approximately $1.8 million in letters of credit outstanding
           under our line of credit. As of December 31, 2006, we had approximately $134.5 million of borrowings
outstanding and approximately $1.4 million in letters of credit outstanding
under our line of credit.

In
February 2006, we entered into a three-year  $50.0 million  interest rate swap at a fixed
rate of 4.99% plus  applicable            spread, and in August 2006, we entered into two
separate  three-year $12.5 million interest rate swaps at 5.135% and 5.159%
           respectively.  These swaps were exclusive of our applicable  margin as stated
in our credit facility.  We did not designate            these  interest rate swaps as
hedges and accounted for them in accordance  with SFAS No.133.  During the second
 quarter of            2007, we terminated  these interest swaps and recorded a gain of
 approximately  $0.4 million in Interest  expense in the            accompanying
 consolidated  statement of  operations.  Changes in fair value prior to the  termination
 of these swaps were            approximately $0.1 million for the six months ended June
30, 2007, and are recognized in earnings.

In
August 2007, we entered into two $100.0  million  two-year  interest rate swaps at a
fixed rate of  approximately  4.99%            plus  applicable  spread.  In  December
 2007,  we amended the life of one of the $100.0  million  swaps to three years and
           reduced  the fixed rate to  approximately  4.745%.  These swaps are  exclusive
 of our  applicable  margin as stated in our            credit  facility.  We did not
designate  these  interest rate swaps as hedges and account for them in accordance  with
SFAS            No. 133. Changes in fair value,  which were  approximately  $0.2 million
of income for the twelve months ended December 31,            2007, are recognized in
earnings.

In
March and September  2006, we entered into our  Yen-denominated  line of credit for ¥200.0
 million and ¥300.0  million,            respectively,  with Sumitomo  Mitsui  Banking
which have interest  rates of 1.875% and 1.61%,

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---

respectively,  through March
           2008. In May 2007, the ¥200.0  million line of credit was amended to ¥300.0
 million.  As of December 31, 2007,  there were            no outstanding borrowings
under these facilities.

We
have entered into various  capital  leases for the purchase of operating  equipment.
 These capital leases have interest            rates  ranging from 3.1% to 10.3% and a
terms ranging from 36 months to 60 months.  The  principal  balance of these leases
           at December 31, 2007 was $4.5 million.

Liquidity

As
of December 31, 2007, we had $18.3 million of cash and cash  equivalents.  We generated
 positive  operating  cash flows            from each of our geographic  business
 segments for the twelve months ended  December 31, 2007.  Each  geographic  business
           segment had  sufficient  cash flows from  operations to service  existing
 debt  obligations,  to fund capital  expenditure            requirements,  which  have
 historically  been 4% to 8% of annual  consolidated  net  revenues,  and to fund
 research  and            development costs for new services and enhancements to existing
services,  which have historically been approximately 2% to            3% of annual
 consolidated  net  revenues.  Assuming no material  change to these  costs,  which we do
not  anticipate,  we            believe that we will generate  adequate  operating cash
flows for capital  expenditures and contractual  commitments and to            satisfy
our indebtedness  and fund our liquidity needs for at least the next 12 months.  We have
 historically  borrowed on            our line of credit in order to fund  acquisitions.
 At December 31, 2007, we had $58.3  million of available  credit on our
           existing $325.0 million line of credit.

We
regularly  review our capital  structure  and evaluate  potential  alternatives  in light
of current  conditions  in the            capital markets.  Depending upon conditions in
these markets,  cash flows from our operating segments and other factors, we
           may  engage in other  capital  transactions.  These  capital  transactions
 include  but are not  limited to debt or equity            issuances or credit
facilities with banking institutions.

Critical Accounting
Policies

Managements
 Discussion and Analysis of Financial  Condition and Results of  Operations  is based
upon our  consolidated            financial  statements and the notes thereto,  which
have been prepared in accordance  with  generally  accepted  accounting
           principles in the U.S. The preparation of these financial  statements
 requires  management to make estimates and judgments            that affect the reported
 amounts of assets and liabilities and the disclosure of contingent  assets and
liabilities at the            date of the financial  statements and the reported amounts
of net revenues and expenses during the reported periods.  On an            ongoing
basis, management evaluates its estimates and judgments, including those related to
revenue recognition,  allowance            for  uncollectible  accounts,   goodwill  and
 other  intangible  assets,  income  taxes,  restructuring  costs  and  legal
           contingencies.

Management
bases its estimates and judgments on historical  experience and on various other factors
that are believed to be            reasonable under the  circumstances,  the results of
which form the basis for making judgments about the carrying values of            assets
and  liabilities  that are not readily  apparent from other  sources.  There can be no
assurance that actual results            will not differ from those estimates.

We
have  identified  the policies  below as critical to our business  operations  and the
 understanding  of our results of            operations.  For a  detailed  discussion  on
the  application  of these and other  accounting  policies,  see Note 2 to our
           consolidated financial statements.

Revenue recognition

We
recognize  revenues when persuasive  evidence of an arrangement  exists,  services have
been rendered,  the price to the            buyer is fixed or  determinable  and
 collectibility  is  reasonably  assured.  Revenues  consist  primarily  of usage fees
           generally based on per minute,  per fax page or per transaction  methods.  To
a lesser extent, we charge  subscription fees            and have fixed-period minimum
revenue  commitments.  Unbilled revenue consists of earned but unbilled revenue which
results            from non-calendar  month billing cycles and the one-month lag time in
billing related to certain of our services.  Deferred            revenue  consists of
payments  made by customers  in advance of the time  services are  rendered.  Our revenue
 recognition            policies are consistent with the guidance in Staff  Accounting
 Bulletin (SAB) No. 101,  Revenue  Recognition in Financial            Statements, as
amended by SAB 101A, 101B and SAB 104.

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Should
changes in conditions  cause  management to determine  these  criteria are not met for
certain future  transactions,            revenue recognized for any reporting period
could be adversely affected.

Allowance for
uncollectible accounts receivable

Prior
to the recognition of revenue, we make a decision that collectibility is reasonably
 assured.  Over time,  management            analyzes accounts receivable balances,
 historical bad debts, customer concentrations,  customer creditworthiness,  current
           economic  trends,  changes in our customer  payment  terms and trends when
 evaluating  the adequacy of the  allowance  for            uncollectible  accounts
receivable.  Significant management judgment and estimates must be made and used in
connection with            establishing  the  allowance for  uncollectible  accounts
 receivable in any  accounting  period.  The accounts  receivable            balance was
$89.7 million and $82.9 million,  net of allowance for  uncollectible  accounts
 receivable of $4.5 million and            $7.6 million, as of December 31, 2007 and
2006, respectively.

If
the  financial  condition of our  customers  were to  deteriorate,  resulting in an
 impairment to their ability to make            payments, additional allowances may be
required.

Goodwill and other
intangible assets

We
evaluate  intangible  assets and long-lived  assets for potential  impairment  indicators
 whenever events or changes in            circumstances  indicate that the carrying value
may not be recoverable.  Factors that management  considers important which
           could trigger an impairment review include the following:

| |  |  | significant
decrease in the market value of an asset;
| | - |  | -----------------------------------------------------

| |  |  | significant
adverse change in physical condition or manner of use of an asset;
| | - |  | ------------------------------------------------------------------------------

| |  |  | significant
adverse change in legal factors or negative industry or economic trends;
| | - |  | ------------------------------------------------------------------------------------

| |  |  | a
current  period  operating or cash flow loss  combined with a history of operating or
cash flow losses or a projection or            forecast that demonstrates continuing
losses associated with the use of a long-lived asset;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | significant
decline in our stock price for a sustained period; and
| | - |  | ------------------------------------------------------------------

| |  |  | an
expectation that, more likely than not, an asset will be sold or otherwise  disposed of
before the end of its previously            estimated useful life.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

In
2002, SFAS No. 142 became  effective and as a result,  we ceased to amortize
 approximately  $123.1 million of goodwill.            In lieu of  amortization,  we were
required to perform an initial  impairment  review of our goodwill in 2002 and an annual
           impairment  review  thereafter.  We completed  reviews as of January 1, 2008,
 2007 and 2006 and  immediately  prior to the            change in our segment  reporting
in the fourth  quarter of 2006 with no impairments  identified.  Other  intangible
 assets            with finite lives that do not meet the criteria of SFAS No. 142
continue to be amortized.  We recognize an impairment  loss            when the fair
 value is less  than  the  carrying  value of such  assets  and the  carrying  value of
these  assets  is not            recoverable.  The impairment loss, if applicable,  is
calculated based on the discounted  estimated future cash flows using            our
weighted  average cost of capital  compared to the carrying  value of the  long-lived
 asset.  Net  intangible  assets,            long-lived  assets  and  goodwill  amounted
 to $380.4  million  and  $333.5  million  as of  December  31,  2007 and 2006,
           respectively.

Future
 events  could  cause us to conclude  that the  current  estimates  used  should be
changed  and that  goodwill  and            intangible assets  associated with acquired
 businesses are impaired.  Any resulting  impairment loss could have a material
           adverse impact on our financial condition and results of operations.

Income taxes

As
part of the process of preparing our consolidated  financial statements we are required
to estimate our taxes in each of            the  jurisdictions  in which we operate.
 This  process  involves  management  estimating  the actual

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---

current tax exposure
           together  with  assessing  temporary  differences  resulting  from  differing
 treatment  of items  for tax and  accounting            purposes.  These  differences
 result in deferred tax assets and  liabilities,  which are included within our
 consolidated            balance  sheets.  We must then assess the  likelihood  that the
deferred tax assets will be recovered  from future  taxable            income and, to the
extent we believe that recovery is not likely,  we must establish a valuation  allowance.
 To the extent            we establish a valuation  allowance or increase this allowance
in a period, an expense is recorded within the tax provision            in our
consolidated statements of operations.

Significant
 management  judgment is  required  in  determining  our income  taxes  payable,  our
 deferred  tax assets and            liabilities  and any valuation  allowance  recorded
 against our net deferred tax assets.  Our net deferred tax asset as of
           December  31, 2007 and 2006 was $6.5 million and $11.3  million,  net of a
valuation  allowance  of $10.0  million and $9.5            million,  respectively.  We
have recorded this valuation  allowance due to uncertainties  related to our ability to
utilize            some of our deferred tax assets,  primarily  consisting  of certain
net operating  losses  carried  forward.  The valuation            allowance is based on
our  estimates of taxable  income by  jurisdiction  in which we operate and the period
over which the            deferred tax assets will be recoverable.

In
the event that actual results differ from these estimates or we adjust these  estimates
in future  periods,  we may need            to establish an  additional  valuation
 allowance  which could  materially  impact our  financial  condition and results of
           operations.

We
also have reserves for certain asserted  international,  federal and state tax
contingencies  based on the likelihood of            obligation.  In the normal  course
of  business,  we are  subject to  inquiries  from U.S.  and  non-U.S.  tax  authorities
           regarding the amount of income taxes due.  These  challenges  may result in
 adjustments of the timing or amount of taxable            income or  deductions  or the
 allocation  of income  among tax  jurisdictions.  Further,  during  the  ordinary
 course of            business,  other facts and  circumstances  may impact our ability
to utilize tax benefits as well as the  estimated  income            taxes to be paid in
future  periods.  We believe we have  appropriately  accrued for tax  exposures.  If we
are required to            pay an amount less than or exceeding our  provisions for
uncertain tax matters,  the financial  impact will be reflected in            the period
in which the matter is resolved.  In the event that actual results differ from these
 estimates,  we may need to            adjust tax accounts which could materially impact
our financial condition and results of operations.

On
July 13, 2006, FASB issued FIN No. 48 which  clarifies the accounting for  uncertainty in
income taxes  recognized in an            entitys  financial  statements in accordance
 with FASB Statement No. 109,  Accounting for Income Taxes and prescribes a
           recognition threshold and measurement  attributes for financial statement
disclosures of tax positions taken or expected to            be taken on an income  tax
 return.  Under FIN No. 48, the impact of an  uncertain  income tax  position  on the
income tax            return  must be  recognized  at the largest  amount that is
 more-than-likely-than-not  to be  sustained  upon audit by the            relevant
 taxing  authority.  An uncertain  income tax position will not be recognized if it has
less than a 50% likelihood            of being sustained.  Additionally, FIN No. 48
provides guidance on derecognition,  classification,  interest, penalties and
           disclosures.  FIN No. 48 is effective for fiscal years beginning after
December 15, 2006.

We
adopted the provisions of FIN No. 48 on January 1, 2007. We recorded  provisions for
certain   international and            state income tax uncertain tax positions
based on the  recognition and measurement  standards of FIN No. 48. As a result of
           our adoption of FIN No. 48,  approximately  $1.3 million was recorded as a
reduction to retained earnings as an increase to            reserves for  uncertain  tax
 positions.  At the adoption  date of January 1, 2007,  we had  approximately  $6.3
million of            unrecognized tax benefits.  Included in the balance of unrecognized
 tax benefits at January 1, 2007 is approximately  $5.6            million,  all of which
would affect our  effective  tax rate if  recognized.  This amount is  classified  as Income
 taxes            payable in the  accompanying  consolidated  balance  sheet.  We file
federal  income tax returns and income tax returns in            various states and
international  jurisdictions.  In major tax jurisdictions,  tax years from 1997 - 2006
remain subject to            income tax examinations by tax authorities.

As
of December 31, 2007, we have $4.6 million of  unrecognized  tax benefits,   including
 $5.6 million of  unrecognized  tax            benefits that if recognized  would reduce
our annual  effective  tax rate.  In January 2008, an  outstanding  audit with the
           State of New York  was agreed to and  payment in the  amount of $0.2  million  including
 interest  was made.  With the  exception  of this            payment, we do not expect
our unrecognized tax benefit to change significantly over the next twelve  months.

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As
permitted  with the  adoption of FIN No. 48, we have changed our  classification  of
interest and  penalties  related to            uncertain tax positions and recognize
 these costs in interest and penalties  expense.  As of December 31, 2007 and January
           1, 2007,  we had accrued  interest and penalties of  approximately  $1.3
million and $0.9 million,   respectively,   related to            uncertain tax positions.

Restructuring costs

Restructuring
 reserves are based on certain  estimates  and  judgments  related to severance  and exit
costs,  contractual            obligations  and  related  costs.  Our  estimated
 severance  costs  could be  impacted  if actual  severance  payments  to
           individuals  outside of the U.S.  are less than  initial  estimates.
 Contractual  lease  obligations  could be  materially            affected  by factors
 such as our ability to secure  sublessees,  the  creditworthiness  of  sublessees  and
the success at            negotiating early termination agreements with lessors.

In
the event that actual results differ from these estimates,  we may need to establish
additional  restructuring  accruals            or reverse accrual amounts accordingly.

Legal contingencies

We
are currently  involved in certain legal  proceedings as disclosed in Item 3. Legal
 Proceedings of this annual report            on Form 10-K.  In  accordance  with FAS
No. 5, we accrue an  estimate of the  probable  costs for the  resolution  of legal
           claims.  These  estimates are  developed in  consultation  with outside
 counsel  handling  these matters and based upon an            analysis of potential
results, assuming a combination of litigation and settlement strategies.

In
many cases,  the accounting  treatment of a particular  transaction is  specifically
 dictated by GAAP, with no need for            managements  judgment  in their
 application.  There  are also  areas in which  managements  judgment  in  selecting
 any            available  alternative would not produce a materially  different result.
Our estimates are subject to change, and we adjust            the financial  impact in
the period in which they are  resolved.  See our audited  consolidated  financial
 statements  and            notes thereto which contain accounting policies and other
disclosures required by GAAP.

New Accounting
Pronouncements

We
will be required to adopt SFAS No. 157 Fair Value  Measurements  (SFAS No. 157) for the
fiscal year beginning  January            1, 2008.  SFAS No. 157 provides a single
 definition of fair value and a  hierarchical  framework for measuring it, as well
           as establishing  additional disclosure  requirements about the use of fair
value to measure assets and liabilities.  We are            in the process of evaluating
the impact of SFAS No. 157 on our results of operations and financial position.

In
December 2007, the FASB issued Statement No. 141(R), Business Combinations,  (FAS No.
141(R)) which replaces Statement            No. 141,  Business  Combination.  FAS No.
 141(R)  retains  the  underlying  concepts  of FAS No. 141 in that all  business
           combinations are still required to be accounted for at fair value under the
acquisition  method of accounting,  but FAS No.            141(R)  changed the method of
 applying  the  acquisition  method in a number of  significant  aspects.  FAS No.
 141(R) is            effective on a prospective basis for all business  combinations for
which the acquisition date is on or after the beginning            of the first annual
period  subsequent to December 15, 2008, with the exception of the accounting for
valuation  allowances            on  deferred  taxes and  acquired  tax  contingencies
 under SFAS No.  109.  FAS No.  141(R)  amends SFAS No. 109 such that
           adjustments  made to valuation  allowances on deferred taxes and acquired tax
 contingencies  associated with  acquisitions            that closed  prior to the
 effective  date of FAS No.  141(R)  would also apply the  provisions  of FAS No.
 141(R).  Early            adoption is not allowed.  We are in the process of evaluating
the impact of FAS No. 141(R),  if elected,  on our results of            operations and
financial position.

In
February 2007, FASB issued SFAS No. 159, The Fair Value Option for Financial  Assets and
 Liabilities  (SFAS No. 159).            SFAS No. 159 provides the option to report
 certain  financial  assets and  liabilities  at fair value,  with the intent to
           mitigate  volatility in financial  reporting that can occur when related
assets and  liabilities  are recorded on different            bases and is effective for
fiscal years  beginning  after November 15, 2007. We are in the process of evaluating the
impact            of SFAS No. 159, if elected, on our results of operations and financial
position.

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Subsequent Events

In
January 2008, we expanded the committed  amounts under the accordion feature of our line
of credit by $50.0 million from            $325.0  million to $375.0  million.  We paid
less than $0.1  million of financing  costs for this  expansion of our line of
           credit.

Item 7A.  Quantitative
and Qualitative Disclosures About Market Risk

We
are exposed to market risk from changes in interest rates and foreign  currency  exchange
 rates. We manage our exposure            to these market risks  through our regular
 operating  and  financing  activities  and the timing of  intercompany  payable
           settlements.  In addition,  in August 2007, we entered into two $100.0 million
two-year interest rate swaps at a fixed rate            of  approximately  4.99%.  On
December 17, 2007,  we amended one of the $100.0  million swaps to reduce the rate to a
fixed            rate of 4.745% and extend the maturity to August 16, 2010.  All of these
swaps are  exclusive of our  applicable  margin as            stated in our credit
facility.  These interest rate swaps  effectively  convert the interest  payments of
$200.0 million of            our LIBOR-based  borrowings to a fixed rate.  Changes in
fair value,  which were  approximately  $0.2 million of income for            the twelve
months ended  December 31, 2007,  are recognized in earnings as these interest rate swaps
were not designated as            hedges, in accordance with FAS No. 133.

At
December 31, 2007,  we had  borrowings of  approximately  $64.9  million  outstanding
 under our line of credit that are            subject to interest rate risk.  Each 100
basis point increase in interest rates relative to these  borrowings  would impact
           annual pre-tax earnings and cash flows by approximately $0.6 million based on
our December 31, 2007 debt level.

Approximately
 40.0% and 37.8% of our  consolidated  net  revenues  and 36.6%  and  34.6% of our
 operating  expenses  were            transacted in foreign currencies in 2007 and 2006,
 respectively.  Additionally,  we have foreign currency denominated debt            as
part of our line of credit.  At December 31, 2007 we had debt  outstanding of 8.8 million
euro and 13.9 million Canadian            dollars.  As a result,  fluctuations in
exchange rates impact the amount of our reported sales,  operating income and debt.
           A hypothetical  positive or negative change of 10% in foreign currency
exchange rates would positively or negatively change            revenues  for 2007 by
 approximately  $22.4  million,  operating  expenses  for 2007 by  approximately  $18.2
 million  and            outstanding  debt by $2.7 million.  Our principal  exposure has
been related to local currency sales and operating costs in            the Euro Zone,
 Norway,  Canada,  the United Kingdom,  Australia and Japan. We have not used
 derivatives to manage foreign            currency exchange risk, and no foreign currency
exchange derivatives were outstanding at December 31, 2007.

| | 45 | 
| | -- | 

---

Item 8.    Financial
Statements and Supplementary Data

Premiere Global
Services, Inc. and Subsidiaries Index to Consolidated Financial Statements

|                                                                                                    | Page
|--------------------------------------------------------------------------------------------------- | ----
|Report of Independent Registered
      Public Accounting Firm                                       | 47  
|Consolidated Balance Sheets,
      December 31, 2007 and 2006                                       | 48  
|Consolidated Statements
      of Operations, Years Ended December 31, 2007, 2006 and 2005           | 49  
|Consolidated Statements
      of Shareholders Equity, Years Ended December 31, 2007, 2006 and 2005 | 50  
|Consolidated Statements
      of Cash Flows, Years Ended December 31, 2007, 2006 and 2005           | 51  
|Notes to Consolidated Financial
      Statements                                                    | 52  

| | 46 | 
| | -- | 

---



REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Shareholders of 
  Premiere Global Services, Inc.
   Atlanta, GA

We have audited the accompanying
consolidated balance sheets of Premiere Global Services, Inc. and subsidiaries (the Company)
as of December 31, 2007 and 2006, and the related consolidated statements of income,
stockholders equity, and cash flows for each of the three years in the period ended
December 31, 2007. These financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these financial statements
based on our audits.

We conducted our audits in
accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.

In our opinion, such consolidated
financial statements present fairly, in all material respects, the financial position of
the Company as of December 31, 2007 and 2006, and the results of their operations and
their cash flows for each of the three years in the period ended December 31, 2007, in
conformity with accounting principles generally accepted in the United States of America.

As described in Note 8 to the
consolidated financial statements, the Company changed its method of accounting for
share-based payments effective January 1, 2006, in accordance with the adoption of
Financial Accounting Standards No. 123R, Share-Based Payment. Also, as described in Note
15 to the consolidated financial statements, the Company changed the manner in which it
accounts for uncertain tax positions effective January 1, 2007, in accordance with the
adoption of Statement of Financial Accounting Standards Interpretation No. 48, Accounting
for Uncertainty in Income Taxes an interpretation of FASB Statement No. 109.

We have also audited, in accordance
with the standards of the Public Company Accounting Oversight Board (United States), the
Companys internal control over financial reporting as of December 31, 2007, based on the
criteria established in Internal ControlIntegrated Framework, issued by the Committee of
Sponsoring Organizations of the Treadway Commission, and our report dated February 29,
2008 expressed an unqualified opinion on the Companys internal control over financial
reporting.

/s/ DELIOTTE & TOUCHE LLP 
  Atlanta,
GA 
  February 29, 2008

| | 47 | 
| | -- | 

---

PREMIERE GLOBAL
SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2007 and 2006 (in thousands, except share data)

|ASSETS                                                                            | 2007 | 2006      
|--------------------------------------------------------------------------------- | ---- | ----------
|CURRENT ASSETS                                                                    |      |           
|Cash
      and equivalents                                                        |      | $   18,259
|Accounts
      receivable (less allowances of $4,526 and $7,551, respectively)    |      | 89,683    
|Prepaid
      expenses and other current assets                                   |      | 13,066    
|Deferred
      income taxes, net                                                  |      | 5,522     
|                                                                                  |      |           
|Total
      current assets                                                        |      | 126,530   
|                                                                                  |     
|PROPERTY AND EQUIPMENT,
      NET                                                 |      | 110,767   
|                                                                                  |     
|OTHER ASSETS                                                                      |     
|Goodwill                                                                          |      | 337,246   
|Intangibles,
      net of amortization                                            |      | 43,115    
|Deferred
      income taxes, net                                                  |      | 1,018     
|Other
      assets                                                                |      | 5,411     
|                                                                                  |      |           
|                                                                                  |      | $ 624,087 
|                                                                                  |      |           
|                                                                                  |     
|LIABILITIES AND
      SHAREHOLDERS EQUITY                                        |     
|                                                                                  |     
|CURRENT LIABILITIES                                                               |     
|Accounts
      payable                                                            |      | $   51,631
|Income
      taxes payable                                                        |      | 4,497     
|Accrued
      taxes                                                               |      | 8,076     
|Accrued
      expenses                                                            |      | 37,276    
|Current
      maturities of long-term debt and capital lease obligations          |      | 1,664     
|Accrued
      restructuring costs                                                 |      | 1,717     
|                                                                                  |      |           
|Total
      current liabilities                                                   |      | 104,861   
|                                                                                  |      |           
|                                                                                  |     
|LONG-TERM LIABILITIES                                                             |     
|Long-term
      debt and capital lease obligations                                |      | 267,817   
|Accrued
      restructuring costs                                                 |      | 1,575     
|Accrued
      expenses                                                            |      | 7,627     
|Deferred
      income taxes, net                                                  |      |          
|                                                                                  |      |           
|Total
      long-term liabilities                                                 |      | 277,019   
|                                                                                  |      |           
|                                                                                  |     
|COMMITMENTS AND CONTINGENCIES
      (Notes 10 and 14)                             |     
|                                                                                  |     
|SHAREHOLDERS
      EQUITY                                                        |     
|Common
      stock, $.01 par value; 150,000,000 shares authorized, 61,755,728 and |     
|70,151,998
      shares issued and outstanding in 2007 and 2006, respectively     |      | 618       
|Additional
      paid-in capital                                                  |      | 548,418   
|Notes
      receivable, shareholder                                               |      | (1,702    
|Cumulative
      translation adjustment                                           |      | 10,523    
|Accumulated
      deficit                                                         |      | (315,650  
|                                                                                  |      |           
|Total
      shareholders equity                                                  |      | 242,207   
|                                                                                  |      |           
|                                                                                  |      | $ 624,087 
|                                                                                  |      |           

Accompanying notes are
integral to these consolidated financial statements.

| | 48 | 
| | -- | 

---

PREMIERE GLOBAL
SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Years Ended December 31, 2007, 2006 and 2005 (in thousands, except share and per share data)

|                                                                           | 2007 | 2006         | 2005
|-------------------------------------------------------------------------- | ---- | ------------ | ----
|Net revenues                                                               |      | $ 559,706    |     
|                                                                           |     
|Operating expenses                                                         |     
|Cost
      of revenues (exclusive of depreciation and amortization shown   |      | 227,259      |     
|separately
      below)                                                    |     
|Selling
      and marketing                                                |      | 141,322      |     
|General
      and administrative (exclusive of net legal settlements shown |      | 66,007       |     
|separately
      below)                                                    |     
|Research
      and development                                             |      | 14,109       |     
|Depreciation                                                               |      | 30,008       |     
|Amortization                                                               |      | 15,659       |     
|Restructuring
      costs                                                  |      | 3,447        |     
|Asset
      impairments                                                    |      |             |     
|Net
      legal settlements and related expenses                           |      | 349          |     
|                                                                           |      |              |     
|Total
      operating expenses                                             |      | 498,160      |     
|                                                                           |      |              |     
|                                                                           |     
|Operating income                                                           |      | 61,546       |     
|                                                                           |     
|Other (expense) income                                                     |     
|Interest
      expense                                                     |      | (13,598      | )   
|Interest
      income                                                      |      | 780          |     
|Loss
      on sale of marketable securities                                |      |             |     
|Other,
      net                                                           |      | 1,418        |     
|                                                                           |      |              |     
|Total
      other (expense) income                                         |      | (11,400      | )   
|                                                                           |      |              |     
|                                                                           |     
|Income from continuing
      operations before income taxes                |      | 50,146       |     
|Income tax expense                                                         |      | 16,791       |     
|                                                                           |      |              |     
|Income from continuing
      operations                                    |      | $   33,355   |     
|                                                                           |      |              |     
|                                                                           |     
|Discontinued operations                                                    |     
|Loss
      from operations of Voicecom                                     |      |             |     
|Income
      tax benefit                                                   |      |             |     
|                                                                           |      |              |     
|Loss
      on discontinued operations                                      |      |             |     
|                                                                           |      |              |     
|                                                                           |     
|Net income                                                                 |      | $   33,355   |     
|                                                                           |      |              |     
|                                                                           |     
|BASIC EARNINGS                                                             |     
|Income
      from continuing operations                                    |      | $   33,355   |     
|                                                                           |      |              |     
|Net
      income                                                           |      | $   33,355   |     
|                                                                           |      |              |     
|                                                                           |     
|BASIC WEIGHTED AVERAGE
      SHARES OUTSTANDING                            |      | 62,654       |     
|                                                                           |      |              |     
|                                                                           |     
|Basic earnings (loss) per
      share                                      |     
|Continuing
      operations                                                |      | $       0.53 |     
|Discontinued
      operations                                              |      |             |     
|                                                                           |      |              |     
|Net
      income                                                           |      | $       0.53 |     
|                                                                           |      |              |     
|                                                                           |     
|DILUTED EARNINGS                                                           |     
|Income
      from continuing operations                                    |      | $   33,355   |     
|                                                                           |      |              |     
|Net
      income                                                           |      | $   33,355   |     
|                                                                           |      |              |     
|                                                                           |     
|DILUTED WEIGHTED AVERAGE
      SHARES OUTSTANDING                          |      | 63,940       |     
|                                                                           |      |              |     
|Diluted earnings (loss)
      per share:                                   |     
|Continuing
      operations                                                |      | $       0.52 |     
|Discontinued
      operations                                              |      |             |     
|                                                                           |      |              |     
|Net
      income                                                           |      | $       0.52 |     
|                                                                           |      |              |     

Accompanying notes are
integral to these consolidated financial statements.

| | 49 | 
| | -- | 

---

PREMIERE GLOBAL
SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF SHAREHOLDERS EQUITY Years
Ended December 31, 2007, 2006 and 2005 (in thousands)

|                                                                                               | Common 
      Stock 
      Issued | Additional 
      Paid-In 
      Capital | Notes 
      Receivable, 
      Shareholder | Accumulated 
      Deficit | Unrealized 
      Gain (Loss) 
      on 
      Marketable 
      Securities | Cumulative 
      Translation 
      Adjustment | Total 
      Shareholders 
      Equity
|---------------------------------------------------------------------------------------------- | --------------------------------- | ---------------------------------------- | ------------------------------------------- | -------------------------- | --------------------------------------------------------------------------- | ----------------------------------------------- | ----------------------------------------
|BALANCE, December
      31, 2004                                                               | $713                              |                                          | $ 690,097                                   |                            | $(5,662                                                                     | )                                               | $(420,653                               
|                                                                                               |                                   |                                          |                                             |                            |                                                                             |                                                 |                                         
|                                                                                              
|Other comprehensive
      income:                                                             
|Net income                                                                                     |                                  |                                          |                                            |                            |                                                                            |                                                 | 47,417                                  
|Translation adjustments                                                                        |                                  |                                          |                                            |                            |                                                                            |                                                 |                                        
|Change in unrealized net                                                                      
|gain (loss)
      on marketable                                                               
|securities,
      net of tax                                                                   |                                  |                                          |                                            |                            |                                                                            |                                                 |                                        
|                                                                                               |                                   |                                          |                                             |                            |                                                                             |                                                 |                                         
|Other comprehensive income                                                                     |                                   |                                          |                                             |                            |                                                                             |                                                 |                                         
|                                                                                               |                                   |                                          |                                             |                            |                                                                             |                                                 |                                         
|                                                                                              
|Issuance of common
      stock:                                                               
|Exercise of stock options                                                                      | 15                                |                                          | 8,508                                       |                            |                                                                            |                                                 |                                        
|Stock compensation expense                                                                    
| restricted
      shares                                                                      |                                  |                                          | 4,295                                       |                            |                                                                            |                                                 |                                        
|Treasury stock purchase                                                                       
|and retirement                                                                                 | (21                               | )                                        | (21,300                                     | )                          |                                                                            |                                                 |                                        
|Stock compensation expense                                                                    
| variable
      accounting                                                                    |                                  |                                          | (336                                        | )                          |                                                                            |                                                 |                                        
|Stock compensation in                                                                         
|exchange for
      services                                                                    |                                  |                                          | 712                                         |                            |                                                                            |                                                 |                                        
|Issuance of restricted
        shares and
      related stock- 
        based compensation     | 10                                |                                          | (2,975                                      | )                          |                                                                            |                                                 |                                        
|Income tax benefit from                                                                       
|exercise of
      stock options                                                                |                                  |                                          | 2,718                                       |                            |                                                                            |                                                 |                                        
|Payments and interest                                                                         
|related to
      shareholder                                                                  
|notes
      receivable                                                                         |                                  |                                          |                                            |                            | 3,766                                                                       |                                                 |                                        
|                                                                                               |                                   |                                          |                                             |                            |                                                                             |                                                 |                                         
|                                                                                              
|BALANCE, December 31, 2005                                                                     | $717                              |                                          | $ 681,719                                   |                            | $(1,896                                                                     | )                                               | $(373,236                               
|                                                                                               |                                   |                                          |                                             |                            |                                                                             |                                                 |                                         
|                                                                                              
|Other comprehensive
      income:                                                             
|Net income                                                                                     |                                  |                                          |                                            |                            |                                                                            |                                                 | 25,509                                  
|Translation adjustments                                                                        |                                  |                                          |                                            |                            |                                                                            |                                                 |                                        
|Other comprehensive income                                                                     |                                   |                                          |                                             |                            |                                                                             |                                                 |                                         
|                                                                                               |                                   |                                          |                                             |                            |                                                                             |                                                 |                                         
|                                                                                              
|Issuance of common
      stock:                                                               
|Exercise of stock options                                                                      | 6                                 |                                          | 2,509                                       |                            |                                                                            |                                                 |                                        
|Stock compensation expense                                                                    
| restricted
      shares                                                                      |                                  |                                          | 5,810                                       |                            |                                                                            |                                                 |                                        
|Treasury stock purchase                                                                       
|and retirement                                                                                 | (38                               | )                                        | (29,543                                     | )                          |                                                                            |                                                 |                                        
|Stock compensation expense                                                                    
| variable
      accounting                                                                    |                                  |                                          | 83                                          |                            |                                                                            |                                                 |                                        
|FAS 123(R) expense                                                                             |                                  |                                          | 2,586                                       |                            |                                                                            |                                                 |                                        
|Stock compensation in                                                                         
|exchange for
      services                                                                    |                                  |                                          | 481                                         |                            |                                                                            |                                                 |                                        
|Issuance of restricted                                                                        
|shares and
      related                                                                      
|stock-based                                                                                   
|compensation                                                                                   | 17                                |                                          | (204                                        | )                          |                                                                            |                                                 |                                        
|Income tax expense from                                                                       
|exercise of
      stock options                                                                |                                  |                                          | (209                                        | )                          |                                                                            |                                                 |                                        
|Payments and interest                                                                         
|related to
      shareholder                                                                  
|notes receivable                                                                               |                                  |                                          |                                            |                            | (108                                                                        | )                                               |                                        
|                                                                                               |                                   |                                          |                                             |                            |                                                                             |                                                 |                                         
|                                                                                              
|BALANCE, December 31, 2006                                                                     | $702                              |                                          | $ 663,232                                   |                            | $(2,004                                                                     | )                                               | $(347,727                               
|                                                                                               |                                   |                                          |                                             |                            |                                                                             |                                                 |                                         
|                                                                                              
|Other comprehensive
      income:                                                             
|Net income                                                                                     |                                   |                                          |                                             |                            |                                                                             |                                                 | 33,355                                  
|Translation adjustments                                                                        |                                   |                                          |                                             |                            |                                                                             |                                                 |                                         
|Adoption of FIN 48                                                                             |                                   |                                          |                                             |                            |                                                                             |                                                 | (1,278                                  
|Other comprehensive income                                                                     |                                   |                                          |                                             |                            |                                                                             |                                                 |                                         
|                                                                                               |                                   |                                          |                                             |                            |                                                                             |                                                 |                                         
|                                                                                              
|Issuance of common
      stock:                                                               
|Exercise of stock options                                                                      | 13                                |                                          | 8,540                                       |                            |                                                                             |                                                 |                                         
|Stock compensation expense                                                                    
| restricted
      shares                                                                      |                                   |                                          | 7,598                                       |                            |                                                                             |                                                 |                                         
|Treasury stock purchase                                                                       
|and retirement                                                                                 | (104                              | )                                        | (132,882                                    | )                          |                                                                             |                                                 |                                         
|Stock compensation expense                                                                    
| variable
      accounting                                                                   
|FAS 123(R) expense                                                                             |                                   |                                          | 812                                         |                            |                                                                             |                                                 |                                         
|Stock compensation in
        exchange for
      services                                      |                                   |                                          | 504                                         |                            |                                                                             |                                                 |                                         
|Issuance of restricted
        shares and
      related
        stock-based
      compensation | 7                                 |                                          | (2,710                                      | )                          |                                                                             |                                                 |                                         
|Income tax expense from
        exercise of
      stock options                                |                                   |                                          | 3,324                                       |                            |                                                                             |                                                 |                                         
|Payments and interest related
        to shareholder
         notes
      receivable           |                                   |                                          |                                             |                            | 302                                                                         |                                                 |                                         
|                                                                                               |                                   |                                          |                                             |                            |                                                                             |                                                 |                                         
|BALANCE, December 31, 2007                                                                     | $618                              |                                          | $ 548,418                                   |                            | ($ 1,702                                                                    | )                                               | $(315,650                               
|                                                                                               |                                   |                                          |                                             |                            |                                                                             |                                                 |                                         

Accompanying notes are
integral to these consolidated financial statements.

| | 50 | 
| | -- | 

---

PREMIERE GLOBAL
SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, 2007, 2006 and 2005 (in thousands)

|                                                                           | 2007 | 2006       | 2005
|-------------------------------------------------------------------------- | ---- | ---------- | ----
|CASH FLOWS
      FROM OPERATING ACTIVITIES                                 |      |            |     
|Net
      income                                                           |      | $   33,355 |     
|Adjustments
      to reconcile net income to net cash provided             |     
|by
      operating activities:                                             |     
|Loss
       on discontinued operation                                      |      |           |     
|Depreciation                                                               |      | 30,008     |     
|Amortization                                                               |      | 15,659     |     
|Amortization
      of deferred financing costs                             |      | 513        |     
|Loss
      on sale of marketable securities, available for sale            |      |           |     
|Net
      legal settlements and related expenses                           |      | 349        |     
|Deferred
      income taxes, net of effect of acquisitions                 |      | 2,488      |     
|Restructuring
      costs                                                  |      | 3,447      |     
|Payments
      for restructuring costs                                     |      | (7,109     | )   
|Equity-based
      compensation                                            |      | 10,590     |     
|Excess
      tax benefits from share-based payment arrangements            |      | (3,323     | )   
|Asset
      impairment                                                     |      |           |     
|Loss
      (gain) on disposal of assets                                    |      | 287        |     
|Changes
      in assets and liabilities, net of effect of acquisitions:    |     
|Accounts
      receivable, net                                             |      | (737       | )   
|Prepaid
      expenses and other current assets                            |      | (893       | )   
|Accounts
      payable and accrued expenses                                |      | 6,953      |     
|                                                                           |      |            |     
|Total
      adjustments                                                    |      | 58,232     |     
|                                                                           |      |            |     
|Net
      cash provided by operating activities from continuing operations |      | 91,587     |     
|                                                                           |      |            |     
|Net
      cash used in operating activities from discontinued operations   |      | (650       | )   
|                                                                           |      |            |     
|Net
      cash provided by operating activities                            |      | 90,937     |     
|                                                                           |     
|CASH FLOWS FROM INVESTING
      ACTIVITIES                                 |     
|Capital
      expenditures                                                 |      | (46,341    | )   
|Sale
      of marketable securities                                        |      |           |     
|Purchase
      of marketable securities                                    |      |           |     
|Business
      acquisitions, net of cash acquired                          |      | (47,749    | )   
|                                                                           |      |            |     
|Net
      cash used in investing activities                                |      | (94,090    | )   
|                                                                           |      |            |     
|                                                                           |     
|CASH FLOWS FROM FINANCING
      ACTIVITIES                                 |     
|Principal
      payments under borrowing arrangements                      |      | (344,388   | )   
|Proceeds
      from long-term borrowing arrangements                       |      | 470,099    |     
|Payments
      of debt issuance costs                                      |      | (50        | )   
|Repayment
      of shareholder notes                                       |      | 413        |     
|Excess
      tax benefits from share-based payment arrangements            |      | 3,323      |     
|Purchase
      of treasury stock, at cost                                  |      | (136,049   | )   
|Exercise
      of stock options                                            |      | 8,553      |     
|                                                                           |      |            |     
|Net
      cash provided by financing activities                            |      | 1,901      |     
|                                                                           |      |            |     
|Effect of exchange rate
      changes on cash and equivalents              |      | 534        |     
|                                                                           |      |            |     
|NET DECREASE IN CASH
      AND EQUIVALENTS                                 |      | (718       | )   
|                                                                           |      |            |     
|CASH AND EQUIVALENTS,
      beginning of period                            |      | 18,977     |     
|                                                                           |      |            |     
|CASH AND EQUIVALENTS,
      end of period                                  |      | $   18,259 |     
|                                                                           |      |            |     

Accompanying notes are
integral to these consolidated financial statements.

| | 51 | 
| | -- | 

---

PREMIERE GLOBAL
SERVICES, INC. AND SUBSIDIARIES NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

|1. |  | THE
COMPANY AND ITS BUSINESS
|-- |  | ----------------------------

We
are a global provider of applied  communication  technologies  that help businesses
 automate and improve their business            processes.  Our   PGiCOS   delivers  multiple  industry-  and  function-specific
           business  applications.  We go to market on a global  basis in three  segments
in North  America,  Europe and Asia with the            following five solution sets:
 Conferencing & Collaboration,  Desktop Document  Solutions,  Enterprise  Document
Solutions,            Notifications & Reminders and eMarketing.

|2. |  | SIGNIFICANT
ACCOUNTING POLICIES
|-- |  | -------------------------------

Accounting Estimates

Preparation
of financial  statements in conformity  with  accounting  principles  generally  accepted
in the U.S.  requires            management to make estimates and assumptions  that
affect the reported amounts of assets and liabilities and disclosures of
           contingent  assets and  liabilities  at the date of the  financial  statements
 and  reported  amounts of net  revenues and            expenses  during the  reporting
 period.  Financial  statement  line items that include  significant  estimates  consist
of            goodwill,  net  intangibles,  net  restructuring  costs,  tax accounts,
 certain accrued  liabilities and the allowance for            uncollectible  accounts
 receivable.  Changes in the facts or  circumstances  underlying  these  estimates  could
result in            material  changes and actual  results could differ from those
 estimates.  These changes in estimates are recognized in the            period they are
realized.

Principles of
Consolidation

The
 financial  statements  include  our  accounts  consolidated  with  our  wholly-owned
 subsidiaries.   All  significant            intercompany accounts and transactions have
been eliminated in consolidation.

Cash and Equivalents

Cash
and  equivalents  include  cash on hand and highly  liquid  investments  with a maturity
 at date of purchase of three            months or less.

Accounts Receivable

Included
in  accounts  receivable  at December  31, 2007 and 2006 was earned but  unbilled
 revenue of  approximately  $5.3            million and $4.7 million,  respectively,
 which  results from  non-calendar  month billing  cycles and the one-month lag in
           billing  of  certain  of our  services.  Earned  but  unbilled  revenue  is
billed  within 30 days.  Bad debt  expense  was            approximately $(0.8) million,
 $2.4 million and $4.3 million in 2007, 2006 and 2005,  respectively.  Bad debt expense
was a            benefit in 2007 as a result of previously written-off  receivables that
were subsequently recovered from our new use of our            accounts  receivable
 management  application.  Write-offs  against the allowance for doubtful accounts were
 approximately            $2.3 million, $5.0 million and $2.4 million in 2007, 2006 and
2005, respectively.

Property and Equipment

Property
and equipment are recorded at cost.  Depreciation  is provided under the  straight-line
 method over the estimated            useful  lives of the assets,  commencing  when the
assets are placed in service.  The  estimated  useful  lives are five to            seven
years for  furniture  and  fixtures,  two to five years for  software  and three to ten
years for  computer  servers,            Internet and telecommunications  equipment. The
cost of installed equipment includes expenditures for installation.  Assets
           recorded  under capital leases and leasehold  improvements  are  depreciated
 over the shorter of their useful lives or the            term of the related lease.

Research and
Development

Research
and  development  costs  primarily  related to developing  new  services,  features and
 enhancements  to existing            services are expensed as incurred.

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CONSOLIDATED FINANCIAL STATEMENTS

Software Development
Costs

Pursuant
to the American  Institute of Certified Public Accountants  Statement of Position (SOP)
98-1,  Accounting for the            Costs of Software Developed or Obtained for
Internal Use, costs incurred to develop  significant  enhancements to software
           features to be sold as part of our  service  offerings  and costs  incurred
 to  implement  a new billing  system are being            capitalized.  For the years
ended  December 31, 2007,  2006 and 2005, we have  capitalized  in North America
 approximately            $9.8  million, $13.3 million and $6.7 million,  respectively,
 related to these projects. These capitalized costs are being            amortized  on a
 straight-line  basis  over  the  estimated  life of the  related  software,  not to
 exceed  three  years.            Depreciation  expense recorded for phases completed for
the years ended December 31, 2007, 2006 and 2005 was  approximately            $3.4
million, $6.2 million and $2.1 million, respectively.

Goodwill

Goodwill
is subject to a periodic  impairment  assessment by applying a fair value-based test
based upon a two-step method.            The first step is to identify potential goodwill
 impairment by comparing the estimated fair value of the business segments            to
their carrying  amounts.  The second step measures the amount of the impairment based
upon a comparison of implied fair            value of goodwill with its carrying
 amount.  We have adopted  January 1st of a given  calendar year as our valuation date
           and have evaluated goodwill as of January 1, 2006, 2007 and 2008, with no
impairment identified.

Valuation of
Long-Lived Assets

We
evaluate the carrying  values of  long-lived  assets when  significant  adverse  changes
in the economic  value of these            assets require an analysis,  including
property and equipment and other intangible assets.  A            long-lived  asset is considered
 impaired  when its fair value is less than its carrying  value.  In that event,  a loss
is            calculated  based on the amount the carrying  value exceeds the future cash
flows,  as calculated  under the  best-estimate            approach,  of such  asset.  We
 believe  that  long-lived  assets  in our  accompanying  consolidated  balance  sheets
 are            appropriately valued.

Revenue Recognition

We
recognize  revenues when persuasive  evidence of an arrangement  exists,  services have
been rendered,  the price to the            buyer is fixed or  determinable  and
 collectibility  is  reasonably  assured.  Revenues  consist  primarily  of usage fees
           generally based on per minute,  per fax page or per transaction  methods.  To
a lesser extent, we charge  subscription fees            and fixed-period minimum revenue
 commitments.  Unbilled revenue consists of earned but unbilled revenue which results
from            non-calendar  month  billing  cycles and the one-month  lag time in
billing  related to certain of our  services.  Deferred            revenue  consists of
payments  made by customers  in advance of the time  services are  rendered.  Our revenue
 recognition            policies are consistent with the guidance in Staff  Accounting
 Bulletin (SAB) No. 101,  Revenue  Recognition in Financial            Statements, as
amended by SAB 101A, 101B and SAB 104.

Foreign Currency
Translation

The
assets and liabilities of subsidiaries  domiciled  outside the U.S. are translated at
rates of exchange existing at the            balance  sheets date.  Revenues and expenses
are  translated at average rates of exchange  prevailing  during the year. The
           resulting  translation  adjustments  are recorded in the Cumulative
 translation  adjustment  component of  shareholders            equity. In addition,
 intercompany loans with foreign subsidiaries  generally are considered to be permanently
invested for            the  foreseeable  future.  Therefore,  all foreign  exchange
gains and losses related to these balances are recorded in the            cumulative
translation account on the consolidated balance sheets.

Treasury Stock

All
treasury  stock  transactions  are recorded at cost.  As part of our April 2007
 settlement  agreement  with  Crescendo            Partners II, L.P., Series E and
related parties, among other things,  Crescendo Partners withdrew its proxy contest
related            to our 2007  annual  meeting  of  shareholders,  and we  commenced  a
$150.0  million  self-tender  offer to  acquire up to            11,857,707  shares of
our  common  stock at a fixed  price of $12.65  per  share.  In 2007 as a result of this

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PREMIERE GLOBAL
SERVICES, INC. AND SUBSIDIARIES NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

self-tender            offer,  we
 repurchased  9,687,847  shares of our common  stock in the open market  pursuant to our
 self-tender  offer for            approximately  $122.5  million and  incurred  costs
 associated  with the tender offer of  approximately  $0.9 million that
           included legal,  printing and  dealer-manager  fees that were included in Additional
 paid-in  capital. In 2007 and 2006,            respectively,  we  repurchased
 approximately  0.7 million  shares and 3.9 million  shares of our common  stock in the
open            market for approximately  $9.6 million and $29.6 million,  pursuant to
our  Board-approved  stock repurchase  programs.  In            addition,  in 2007 and
2006,  respectively,  we withheld  approximately  299,000 and 300,000  shares of our
common stock to            satisfy  certain of our  employees tax  withholdings  due
upon the vesting of their  restricted  stock grants and remitted            approximately
$3.1 million and $2.5 million to the Internal Revenue Service on our employees behalf.

Other Comprehensive
Income (Loss)

Other
comprehensive income (loss) represents the change in equity of a business during a
period,  except for investments by            owners and distributions to owners.
 Cumulative translation  adjustments represent components of other comprehensive income
           (loss) at December  31, 2007 and 2006.  For the years ended  December 31,
2007,  2006 and 2005,  total other  comprehensive            income was approximately
 $40.5 million,  $31.2 million and $41.4 million,  respectively.  Accumulated other
 comprehensive            loss was $233.5  and $274.0 million at December 31, 2007 and
2006, respectively.

2007
      
      2006
      
      2005Balance
  at beginning of year
      (274,028
      )
      
      (305,173
      )
      
      (346,601
      )Net
  income
      33,355
      
      
      25,509
      
      
      47,417Net
  foreign currency translation adjustment
      8,436
      
      
      5,636
      
      
      (5,983
      )Adoption
  of FIN 48
      (1,278
      )
      
      
      
      
      Net
  change in unrealized gain on marketable securities
      
      
      
      
      
      
      (6
      )(233,515
      )
      
      (274,028
      )
      
      (305,173
      )


Income Taxes

Income
tax expense,  income taxes payable and deferred tax assets and  liabilities  are
determined in accordance  with SFAS            No. 109. Under SFAS 109, the deferred tax
 liabilities  and assets are determined  based on temporary  differences  between
           the basis of certain assets and  liabilities for income tax and financial
 reporting  purposes in addition to net operating            loss  carryforwards  which
 will more  likely  than not be  utilized.  These  differences  are  primarily
 attributable  to            differences in the recognition of depreciation and
amortization of property,  equipment and intangible  assets,  allowances            for
doubtful accounts and certain employee benefit  accruals.  Deferred tax assets and
liabilities are measured by applying            enacted  statutory tax rates  applicable
to future years in which the deferred tax assets or liabilities are expected to be
           settled or realized.  Valuation  allowances  are  established  when  necessary
to reduce  deferred tax assets to the amount            expected to be realized.
 Permanent  differences are primarily  attributable  to  non-deductible  employee
 compensation as            outlined in Section 162(m) of the Internal Revenue Code of
1986, as amended.

New Accounting
Pronouncements

We
are  required  to adopt SFAS No. 157 for the  fiscal  year  beginning  January 1, 2008.
 SFAS No. 157  provides a single            definition of fair value and a  hierarchical
 framework for measuring  it, as well as  establishing  additional  disclosure
           requirements  about the use of fair value to measure  assets  and
 liabilities.  We are in the  process of  evaluating  the            impact of SFAS No.
157 on our results of operations and financial position.

In
December  2007,  the FASB issued  Statement No.  141(R) which  replaces  Statement  No.
141. FAS No. 141(R)  retains the            underlying  concepts of FAS No. 141 in that
all business  combinations are still required to be accounted for at fair value
           under the acquisition  method of accounting,  but FAS No. 141(R) changed the
method of applying the acquisition method in a            number of significant aspects.
 FAS No. 141(R) is effective on a prospective basis for all business  combinations for
which            the  acquisition  date is on or after the  beginning of the first annual
period  subsequent to December 15, 2008,  with the            exception of the accounting
for valuation  allowances on deferred taxes and acquired tax contingencies  under SFAS
No. 109.            FAS No. 141(R) amends SFAS No. 109 such that  adjustments  made to
valuation  allowances on deferred taxes and acquired tax            contingencies
 associated with  acquisitions that closed prior to the effective date of FAS No. 141(R)
would also apply the            provisions  of FAS No.  141(R).  Early  adoption is not
allowed.  We are in the process of evaluating the impact of FAS No. 141(R), if elected, on our results of operations and financial position.

In
February 2007, FASB issued SFAS No. 159 which provides the option to report certain
 financial assets and liabilities at            fair  value,  with the  intent to
 mitigate  volatility  in  financial  reporting  that can occur when  related  assets and
           liabilities  are recorded on different  bases and is effective for fiscal
years  beginning  after November 15,

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PREMIERE GLOBAL
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CONSOLIDATED FINANCIAL STATEMENTS

2007. We are            in the
process of evaluating the impact of SFAS No. 159, if elected, on our results of
operations and financial position.

|3. |  | RESTRUCTURING
COSTS
|-- |  | -------------------

Consolidated
restructuring costs for the years ended December 31, 2007, 2006 and 2005 are as follows
(in thousands):

|Consolidated                       | Accrued 
      Costs at 
      December 31,
      2004 | 2005
      Charge To 
      Continuing 
      Operations | Cost
      Incurred | Accrued 
      Costs at 
      December 
      31, 2005 | 2006 
      Charge To 
      Continuing 
      Operations | Cost 
      Incurred
|---------------------------------- | ------------------------------------------------------ | -------------------------------------------------------- | ------------------- | ------------------------------------------------------- | --------------------------------------------------------- | --------------------
|Accrued restructuring
      costs: |                                                        |                                                          |                     |                                                         |                                                           |                     
|Severance
      and exit costs     |                                                        | $   114                                                  |                     | $3,273                                                  |                                                           | $(2,478             
|Contractual
      obligations      |                                                        | 4,676                                                    |                     | (17                                                     | )                                                         | (736                
|                                   |                                                        |                                                          |                     |                                                         |                                                           |                     
|Total restructuring costs          |                                                        | $4,790                                                   |                     | $3,256                                                  |                                                           | $(3,214             
|                                   |                                                        |                                                          |                     |                                                         |                                                           |                     

|Consolidated                       | Accrued 
      Costs at 
      December 31, 
      2006 | 2007 
      Charge To 
      Continuing 
      Operations | Cost 
      Incurred | Accrued 
      Costs at 
      December 31, 
      2007
|---------------------------------- | ------------------------------------------------------- | --------------------------------------------------------- | -------------------- | -------------------------------------------------------
|Accrued restructuring
      costs: |                                                         |                                                           |                      |                                                        
|Severance
      and exit costs     |                                                         | $4,027                                                    |                      | $3,347                                                 
|Contractual
      obligations      |                                                         | 3,112                                                     |                      | 100                                                    
|                                   |                                                         |                                                           |                      |                                                        
|Total restructuring costs          |                                                         | $7,139                                                    |                      | $3,447                                                 
|                                   |                                                         |                                                           |                      |                                                        

The prior year cost incurred amount related to the contractual obligations of $1.4 million was mistakenly included as $1.8 million in the prior year completed financial statements. The amount above has been corrected for the prior year typographical error.

Realignment of
Workforce  2007

In
2007, we executed a restructuring plan to consolidate our  non-Conferencing  & Collaboration
 Solutions service delivery            organizations.  As part of this  consolidation,
 we  eliminated  84 positions.  We incurred  approximately  $4.1 million in
           severance  costs  associated  with the  elimination  of these  positions.
 Additionally,  we incurred $0.1 million of lease            termination  costs
 associated  with our Paris,  France office.  On a segment basis,  these  restructuring
 costs were $1.1            million in North  America,  $2.7 million in Europe and $0.4
million in Asia  Pacific.    During 2007, we paid  approximately  $3.1 million
related to these severance            and exit costs and  approximately  $0.1 million
related to these lease  termination  costs.  During the twelve months ended
           December 31, 2007, we adjusted our  restructuring  reserve by  approximately
 $0.2 million as a result of actual  severance            payments to certain individuals
being less than originally  estimated.  We anticipate the remaining costs to be paid
during            2008.  Our reserve for these restructuring costs at December 31, 2007
was approximately $0.8 million.

Realignment of
Workforce  2006

In
2006, we executed a restructuring  plan to streamline the management of our business on a
geographic  regional basis. As            part of this  streamlining,  we  eliminated
 100 positions  within  customer  service,  finance,  operations  and sales and
           marketing.  In the fourth  quarter of 2006, we entered into a separation
 agreement in connection  with the  resignation of            our former chief
 investment  officer.  We incurred  approximately  $8.0 million in severance  costs
 associated with these            positions,  which included the issuance of restricted
 stock having a fair market value of $0.6 million.  Additionally,  we            incurred
$0.6 million of lease termination  costs associated with five locations within North
America.  On a segment basis,            these restructuring  costs were $4.6 million in
North America,  $3.3 million in Europe and $0.7 million in Asia Pacific. In
           the twelve months ended December 31, 2007, we paid  approximately  $3.4
million  related to these severance and exit costs.            During the twelve months
ended December 31, 2007, we adjusted our restructuring  reserve by approximately $0.5
million as a            result of actual  severance  payments to certain  individuals
 being less than  originally  estimated.  We  anticipate  the            remaining costs
to be paid during 2008. Our reserve for these  restructuring  costs at December 31, 2007
was  approximately            $0.1 million.

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CONSOLIDATED FINANCIAL STATEMENTS

Realignment of
Workforce - 2005

In
2005,  we  incurred  $3.3  million of  restructuring  costs.  These costs were
 associated  with the  elimination  of 90            employees  in selling and
 marketing,  operations  and  finance  functions,  primarily  in North  America  and
Europe.  The            reductions in non-financial  functions are the result of the
significant declines in our North America and Europe broadcast            fax services
revenue.  The reductions in financial functions are the result of duplicative  business
processes within North            America  and  Europe  finance  departments.  As of
 December  31,  2007,  we have  completed  this  restructuring  plan and
           accordingly,  no reserves remain.

Our reserve for restructuring  costs
incurred in years prior to 2005 was $2.4 million at            December 31, 2007.

|4. |  | ACQUISITIONS
AND DISPOSITIONS
|-- |  | -----------------------------

We
seek to acquire  complementary  companies  that  increase  our market  share and provide
us with  additional  customers,            technologies,  applications and sales
personnel.  All revenues and related costs from these transactions have been included
           in our consolidated financial statements as of the effective date of each
acquisition.

North America

In
July 2007, we acquired  assets and the stock of Budget  Conferencing.  We paid $19.8
million in cash at closing and $0.6            million in transaction  fees and closing
 costs.  We funded the purchase  through our line of credit.  We followed SFAS No.
           141 and approximately,  $0.2 million has been allocated to acquired fixed
assets,  $0.1 million has been allocated to other            acquisition  liabilities,
 $6.6 million has been allocated to identifiable  customer lists, $1.3 million has been
allocated            to trademarks  and $1.4 million has been  allocated to a
 non-compete  agreement,  with the  identifiable  customer  lists,            trademarks
and non-compete  agreements amortized over five-year useful lives. In addition,  $2.6
million has been allocated            to  long-term  deferred tax  liabilities  to record
the step-up in basis for the customer  lists and  developed  technology
           purchased.  Because we have not finalized the working capital  component of
the purchase price,  the residual $13.6 million            of the aggregate  purchase
price has been allocated to goodwill,  which is subject to a periodic  impairment
 assessment in            accordance with SFAS No. 142.

In
September  2006, we acquired  assets and the stock of eNunciate.  We paid CA$29.0
 million in cash at closing and CA$0.7            million in transaction  fees and
closing costs. We funded the purchase  through  Canadian dollar  borrowings on our line
of            credit and Canadian  dollar cash balances  available.  We followed SFAS No.
141 and  approximately  CA$0.3 million has been            allocated to acquired fixed
assets, CA$0.3 million has been allocated to acquired working capital,  CA$6.8 million
has been            allocated to  identifiable  customer  lists and CA$0.2  million has
been  allocated to a  non-compete  agreement,  with the            identifiable  customer
lists and non-compete  agreement amortized over five-year useful lives. The residual
CA$22.1 million            of the aggregate  purchase price has been allocated to
goodwill,  which is subject to a periodic  impairment  assessment in
           accordance with SFAS No. 142.

In
January 2006, we acquired all of the  outstanding  stock of Accucast.  We paid $12.3
million in cash at closing and $0.5            million in transaction  and closing costs.
 Subsequent to closing,  we paid an additional  $3.0 million cash purchase price
           upon the achievement of certain  milestone targets as specified in the
purchase  agreement.  We funded the purchase through            our line of credit. We
followed SFAS No. 141, and  approximately  $0.2 million has been allocated to acquired
fixed assets,            $0.1 million has been allocated to other acquisition
 liabilities,  $2.0 million has been allocated to developed technology            and
$1.0 million has been allocated to identifiable  customer  lists,  with the  identifiable
 customer lists and developed            technology  amortized over five-year useful
lives. In addition,  $1.2 million has been allocated to long-term  deferred tax
           liabilities to record the step-up in basis for the customer lists and
developed  technology  purchased.  The residual $13.9            million of the
 aggregate  purchase  price has been  allocated  to  goodwill,  which is  subject  to a
periodic  impairment            assessment in accordance with SFAS No. 142.

In
August 2005,  we acquired all of the  outstanding  stock of Netspoke.  We paid $23.4
million in cash at closing and $0.5            million in transaction  fees and closing
 costs.  We funded the purchase  through our line of credit.  We followed SFAS No.
           141, and approximately  $1.1 million of the aggregate  purchase price has been
allocated to acquired working capital,  $0.7            million has been  allocated to
acquired  fixed  assets,  $1.6 million has been  allocated  to severance  and certain
 other            acquisition  liabilities,  $2.9 million has been allocated to
identifiable  customer lists, $1.0 million has been allocated            to developed
 technology and $0.6 million has been allocated to a non-compete

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CONSOLIDATED FINANCIAL STATEMENTS

agreement,  with the  identifiable
 customer            lists,  developed  technology and non-compete  agreement  amortized
over five-year useful lives. In addition,  $1.8 million            has been allocated to
long-term deferred tax liabilities to record the step-up in basis for the customer
 intangible assets            purchased.  The residual $21.0 million of the aggregate
purchase price has been allocated to goodwill,  which is subject to            a periodic
impairment assessment in accordance with SFAS No. 142.

In
June 2005, we acquired  substantially  all of the assets and assumed  certain
 liabilities of Intelligent  Meetings.  We            paid $6.2  million in cash at
closing and $0.1  million in  transaction  fees and  closing  costs.  We funded the
 purchase            through our line of credit.  We followed SFAS No. 141, and
approximately  $0.4 million of the aggregate  purchase price has            been
allocated to acquired  working  capital,  $0.1 million has been  allocated to acquired
fixed assets,  $0.1 million has            been allocated to severance and certain other
 acquisition  liabilities,  $2.0 million has been  allocated to  identifiable
           customer lists and $0.1 million has been allocated to a non-compete
 agreement,  with the  identifiable  customer lists and            non-compete  agreement
 amortized over five-year  useful lives.  The residual $3.8 million of the aggregate
 purchase price            has been allocated to goodwill, which is subject to a periodic
impairment assessment in accordance with SFAS No. 142.

In
March 2005, we acquired  substantially  all of the assets and assumed certain
 liabilities of the conferencing  services            business of Citizens
 Communications.  We paid $43.2  million in cash at closing and $0.2 million in
 transaction  fees and            closing  costs.  We funded the  purchase  through our
line of credit.  We followed  SFAS No. 141,  and  approximately  $2.1            million
of the aggregate purchase price has been allocated to acquired working capital,  $0.9
million has been allocated to            acquired fixed assets,  $2.5 million has been
 allocated to severance and certain other  acquisition  liabilities  and $6.0
           million has been  allocated to  identifiable  customer lists which are being
 amortized  over a five-year  useful life. The            residual  $36.9  million of the
aggregate  purchase  price has been  allocated to goodwill,  which is subject to a
periodic            impairment assessment in accordance with SFAS No. 142.

Europe

In
 November  2007,  we  acquired  the stock of Meet24.  We paid  $26.3  million  in cash at
 closing  and $0.2  million in            transaction  fees and closing  costs.  We
funded the purchase  through our line of credit and cash and cash  equivalents on
           hand. We followed SFAS No. 141, and approximately,  $0.2 million has been
allocated to acquired fixed assets,  $1.4 million            has been  allocated to
acquired  working  capital,  $0.9 million has been allocated to acquired  deferred tax
assets,  $3.8            million has been  allocated to other  acquisition  liabilities,
 $8.8 million has been allocated to  identifiable  customer            lists and $0.7
million has been allocated to a non-compete agreement,  with the identifiable customer
lists and non-compete            agreements  amortized over five-year useful lives. In
addition,  $2.7 million has been allocated to long-term  deferred tax
           liabilities.  We have not finalized the working  capital  component of the
purchase  price.  The residual  $21.0 million of            the  aggregate  purchase
 price has been  allocated to goodwill,  which is subject to a periodic  impairment
 assessment in            accordance with SFAS No. 142.

Asia Pacific

In
November  2006, we acquired  certain  assets and assumed  certain  liabilities of ECT. We
paid AU$5.7 million in cash at            closing and AU$0.4 million in transaction  fees
and closing costs. We funded the purchase  through a  Yen-denominated  line            of
credit with Sumitomo  Mitsui  Banking and  Australian  dollar cash on hand. We followed
SFAS No. 141, and  approximately            AU$0.1  million of the  aggregate  purchase
 price has been  allocated to acquired  fixed assets,  AU$0.5  million has been
           allocated to acquired working capital,  AU$1.4 million has been allocated to
identifiable customer lists and AU$0.1 million            has been allocated to a
non-compete  agreement,  with the identifiable  customer lists and non-compete  agreement
amortized            over five-year  useful lives.  The residual AU$4.0 million of the
aggregate  purchase price has been allocated to goodwill,            which is subject to
a periodic impairment assessment in accordance with SFAS No. 142.

Discontinued Operations

During
2005, we settled  litigation with JOBA, Inc., a franchisee of our former Voicecom
business  segment.  The parties to            the consolidated action and certain other
individuals and entities entered into a settlement agreement,  which provided for
           payment in the  aggregate of  approximately  $1.1 million to JOBA by our
 subsidiary,  Voice-Tel

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PREMIERE GLOBAL
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CONSOLIDATED FINANCIAL STATEMENTS

Enterprises,  LLC, and by
           Voicecom  Telecommunications,  LLC, an  unrelated  party which  purchased
 substantially  all of the assets of our Voicecom            business segment in March
2002.  Approximately  $0.9 million of this aggregate  settlement  payment was funded by
Voice-Tel            and  approximately  $0.2  million  was funded by Voicecom  in
 consideration,  for among  other  things,  dismissal  of the            litigation  with
prejudice,  mutual  releases and covenants not to sue, and termination of the JOBA
franchise.  Voice-Tels            portion of the  settlement  amount and  approximately
 $0.4 million in legal fees and expenses  were accrued as of June 30,            2005 and
included in the  Discontinued  operations line item in our  2005 consolidated  statements of
operations.  During 2005,            we also changed the estimated  liability for certain
lease obligations  associated with the discontinued  operations of our            former
Voicecom  reportable  segment.  The change is associated  with the failure to sublease
 certain floor space that was            assumed in the original estimate.

|5. |  | PROPERTY
AND EQUIPMENT
|-- |  | ----------------------

Property
and equipment at December 31, 2007 and 2006 is as follows (in thousands):

|                                  | 2007 | 2006    
|--------------------------------- | ---- | --------
|Operations equipment              |      | $119,632
|Furniture and fixtures            |      | 9,474   
|Office equipment                  |      | 10,235  
|Leasehold improvements            |      | 19,438  
|Capitalized software              |      | 55,412  
|Construction in progress          |      | 22,931  
|Building                          |      | 1,964   
|                                  |      |         
|                                  |      | 239,086 
|Less accumulated depreciation     |      | (128,319
|Property and equipment,
      net |      | $110,767
|                                  |      |         

During
 2007,  we  performed  a physical  inventory  of our  property  and  equipment.  As a
result of this  inventory,  we determined that  approximately  $82.8 million of fully
depreciated fixed assets were no longer in service.  As a result,  these assets and the
related equal amounts of accumulated depreciation are reflected as retirements in our 2007
consolidated financial statements.

Assets
under capital leases included in property and equipment at December 31, 2007 and 2006 are
as follows (in thousands):

|                                  | 2007 | 2006   
|--------------------------------- | ---- | -------
|Operations equipment              |      | $ 9,066
|Less accumulated depreciation     |      | (4,185 
|                                  |      |        
|Property and equipment,
      net |      | $ 4,881
|                                  |      |        

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|6. |  | GOODWILL
AND INTANGIBLE ASSETS
|-- |  | ------------------------------

Goodwill
and intangible assets consist of the following amounts for December 31, 2007 and 2006 (in
thousands):

|                              | 2007 | 2006     
|----------------------------- | ---- | ---------
|Goodwill                      |      | $337,246 
|                              |      |          
|Customer lists                |      | $129,204 
|Non-compete agreements        |      | 5,570    
|Developed technology          |      | 41,626   
|Trademarks                    |      | 1,300    
|Other                         |      | 505      
|                              |      |          
|                              |      | $178,205 
|                              |     
|Less accumulated amortization |      | (135,090 
|                              |      |          
|                              |      | $  43,115
|                              |      |          

Goodwill
  and intangible assets by reportable business segment at December 31, 2007 and
  2006 (in thousands):

|                                                      | North 
      America | Europe     | Asia
      Pacific | Total   
|----------------------------------------------------- | -------------------- | ---------- | ------------------ | --------
|Goodwill carrying
      value at December 31, 2005    |                      | $ 235,453  |                    | $ 21,186
|Additions and adjustments                             |                      | 33,005     |                    | 1,370   
|                                                      |                      |            |                    |         
|Goodwill carrying value
      at December 31, 2006    |                      | 268,458    |                    | 22,556  
|                                                      |                      |            |                    |         
|Additions and adjustments                             |                      | 17,689     |                    | 23,973  
|                                                      |                      |            |                    |         
|Goodwill carrying value
      at December 31, 2007    |                      | $ 286,147  |                    | $ 46,529
|                                                      |                      |            |                    |         
|                                                      |                     
|Intangibles carrying value
      at December 31, 2005 |                      | 34,753     |                    | 4,459   
|Additions and adjustments                             |                      | 10,089     |                    | 413     
|Amortization                                          |                      | (11,515    | )                  | (1,290  
|                                                      |                      |            |                    |         
|Intangibles carrying value
      at December 31, 2006 |                      | 33,327     |                    | 3,582   
|                                                      |                      |            |                    |         
|Additions and adjustments                             |                      | 10,529     |                    | 9,756   
|Amortization                                          |                      | (13,484    | )                  | (1,739  
|                                                      |                      |            |                    |         
|Intangibles carrying value
      at December 31, 2007 |                      | $   30,372 |                    | $ 11,599
|                                                      |                      |            |                    |         

Intangible
 assets are amortized  over an estimated  useful life between one and five years.
 Amortization  expense for the            intangible  assets above is expected to be
$15.5 million in 2008, $11.7 million in 2009, $7.2 million in 2010, $5.2 million
           in 2011, $2.4 million in 2012 and $1.2 million thereafter.

|7. |  | INDEBTEDNESS
|-- |  | ------------

Long-term
debt and capital lease obligations at December 31, 2007 and 2006 are as follows (in
thousands):

|                                   | 2007 | 2006    
|---------------------------------- | ---- | --------
|Borrowings on
      line of credit |      | $264,935
|Capital lease obligations          |      | 4,546   
|                                   |      |         
|Subtotal                           |      | $269,481
|Less current portion               |      | (1,664  
|                                   |      |         
|                                   |      | $267,817
|                                   |      |         

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PREMIERE GLOBAL
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CONSOLIDATED FINANCIAL STATEMENTS

In
December 2007, we expanded the committed  amounts of our credit  facility by $25.0
million from $300.0 million to $325.0            million, which was further expanded to $375.0 million in January 2008.  We paid less than $0.1 million
of financing costs for each  expansion of our line of credit. Our credit facility also provides for an uncommitted accordian feature allowing for an additional increase up  to $400.0 million of the revolving credit line, subject to its terms and conditions. Our  credit
 facility is subject to customary  covenants for secured credit  facilities of this
nature.  Certain            of our material  domestic  subsidiaries  have guaranteed our
 obligations  under the credit  facility,  which is secured by            substantially
 all of our assets and the assets of our material  domestic  subsidiaries.  In  addition,
 we have pledged as            collateral all of the issued and outstanding stock of our
material domestic  subsidiaries and 65.0% of our material foreign            subsidiaries.

In
April 2007, we entered into an amendment to our credit  facility which inserted into the
applicable  margin pricing grid            a new tier  based on a total  leverage  ratio
of 2.5  times or  greater,  increased  the  permitted  covenant  level of the
           consolidated  total  leverage  ratio and amended  certain  other  provisions
 to allow us to purchase,  redeem or otherwise            acquire up to an additional
$150.0 million of our common stock during 2007, of which approximately  $122.5 million
has been            used to fund our self-tender offer in the second quarter of 2007.

We
believe that as of December 31, 2007, we were in compliance in all material  respects
with all covenants  under our line            of credit and have obtained any required
waivers or consents from lenders,  as applicable.  Proceeds drawn under our credit
           agreement may be used for refinancing of existing debt,  working  capital,
 capital  expenditures,  acquisitions  and other            general corporate  purposes.
 The annual interest rate applicable to borrowings under the line of credit, at our
option, is            the base rate (the greater of the federal funds rate plus 0.5% or
the Bank of America  prime rate) or LIBOR,  plus, in each            case, an applicable
 margin which will vary based upon our leverage  ratio at the end of each fiscal
 quarter.  At December            31, 2007, the applicable  margin with respect to base
rate loans was 0.0%, and the applicable  margin with respect to LIBOR            loans
was 1.50%.  At December 31,  2007,  our interest  rate on 30-day LIBOR loans was 6.10%.
 As of December 31, 2007,  we            had approximately $264.9 million of borrowings
 outstanding and approximately $1.8 million in letters of credit outstanding
           under our line of credit. As of December 31, 2006, we had approximately $134.5 million of borrowings
outstanding and approximately $1.4 million in letters of credit outstanding
under our line of credit. As of December 31, 2006, we had approximately $134.5 million of borrowings outstanding and approximately $1.4 million in letters of credit outstanding under our line of credit.

In
February 2006, we entered into a three-year  $50.0 million  interest rate swap at a fixed
rate of 4.99% plus  applicable            spread, and in August 2006, we entered into two
separate  three-year $12.5 million interest rate swaps at 5.135% and 5.159%
           respectively.  These swaps were exclusive of our applicable  margin as stated
in our credit facility.  We did not designate            these  interest rate swaps as
hedges and accounted for them in accordance  with SFAS No.133.  During the second
 quarter of            2007, we terminated  these interest swaps and recorded a gain of
 approximately  $0.4 million in Interest  expense in the            accompanying
 consolidated  statement of  operations.  Changes in fair value prior to the  termination
 of these swaps were            approximately $0.1 million for the six months ended June
30, 2007, and are recognized in earnings.

In
August 2007, we entered into two $100.0  million  two-year  interest rate swaps at a
fixed rate of  approximately  4.99%            plus  applicable  spread.  In  December
 2007,  we amended the life of one of the $100.0  million  swaps to three years and
           reduced  the fixed rate to  approximately  4.745%.  These swaps are  exclusive
 of our  applicable  margin as stated in our            credit  facility.  We did not
designate  these  interest rate swaps as hedges and account for them in accordance  with
SFAS            No. 133. Changes in fair value,  which were  approximately  $0.2 million
of income for the twelve months ended December 31,            2007, are recognized in
earnings.

In
March and September  2006, we entered into our  Yen-denominated  line of credit for ¥200.0
 million and ¥300.0  million,            respectively,  with Sumitomo  Mitsui  Banking
which have interest  rates of 1.875% and 1.61%,  respectively,  through March
           2008. In May 2007, the ¥200.0  million line of credit was amended to ¥300.0
 million.  As of December 31, 2007,  there were            no outstanding borrowings
under these facilities.

We
have entered into various  capital  leases for the purchase of operating  equipment.
 These capital leases have interest            rates  ranging from 3.1% to 10.3% and
terms ranging from 36 months to 60 months.  The principal  balance of these leases at
           December 31, 2007 was $4.5 million.

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|8. |  | EQUITY-BASED
COMPENSATION
|-- |  | -------------------------

On
January 1, 2006, we adopted, using the modified prospective  application,  SFAS No.
123(R) which requires all share-based            payments to employees,  including grants
of employee stock options,  to be recognized in the financial  statements based on
           their fair values and did not change the accounting guidance for share-based
 payment  transactions with parties other than            employees  provided in SFAS No.
123,  Accounting for Stock Based  Compensation  (SFAS No. 123), as originally  issued
and            Emerging  Issues Task Force (EITF) 96-18,  Accounting for Equity
 Instruments  That Are Issued to Other Than Employees for            Acquiring, or in
Conjunction with Selling, Goods or Services.

Upon
our adoption of SFAS No. 123(R),  we began recording  compensation  cost related to the
continued vesting of all stock            options that remained  unvested as of January
1, 2006, as well as for all new stock option grants after our adoption  date.
           The  compensation  cost recorded is based on the fair value at the grant date.
The adoption of SFAS No. 123(R) did not have            an effect on our recognition of
compensation  expense relating to the vesting of restricted  stock grants.  SFAS No.
123(R)            required the elimination of the unearned  compensation  related to
earlier awards against the appropriate  equity accounts.            As of December 31,
2007,  approximately  $22.5 million of unvested  restricted share  compensation has been
reclassified to            Additional paid in capital on the face of the consolidated
balance sheet.

Prior
to the adoption of SFAS No. 123(R),  cash flows resulting from the tax benefit  related
to equity-based  compensation            was presented in our operating  cash flows,
 along with other tax cash flows,  in  accordance  with the  provisions of EITF
           00-15,  Classification  in the Statement of Cash Flows of the Income Tax
Benefit  Received by a Company upon Exercise of a            Nonqualified  Employee Stock
Option, (EITF 00-15). SFAS No. 123(R) superseded EITF 00-15,  amended SFAS No. 95, Statement
           of Cash Flows, and requires tax benefits  relating to excess  equity-based
 compensation  deductions  to be  prospectively            presented in our statement of
cash flows as financing cash inflows.

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CONSOLIDATED FINANCIAL STATEMENTS



| | 62 | 
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PREMIERE GLOBAL
SERVICES, INC. AND SUBSIDIARIES NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

We
may issue  restricted  stock  awards,  stock  options,  stock  appreciation  rights,
 restricted  stock  units and other            stock-based  awards to  employees,
 directors,  non-employee  consultants  and advisors  under the  following  equity-based
           compensation  plans:  our 1995 Stock Plan,  2000 Directors  Stock Plan and
2004 Long-Term  Incentive  Plan.  Options issued            under these plans,  other
than the directors plan, may be either incentive stock options,  which permit income tax
deferral            upon exercise of options,  or  non-qualified  options not entitled to
such deferral.  These stock plans are administered by            the compensation
committee of our board of directors.

A
total of 9.65 million  shares of our common stock have been reserved in connection  with
awards under our 1995 plan.  The            maximum  number of awards and the maximum
fair market  value of such awards that may be granted  under our 1995 plan during
           any one calendar year to any one grantee are 1.0 million shares and $4.0
million, respectively.

Only
 non-employee  directors can  participate  in our  directors  plan.  Under our directors
 plan, a total of 2.0 million            shares of our common stock have been reserved in
connection  with awards.  No more than 10% of awards may be granted in the
           form of restricted  stock,  subject to antidilution  adjustments,  and only
 nonqualified  options may be granted under our            directors plan.

Under
our 2004 plan, a total of 4.0 million  shares of our common stock have been reserved in
connection  with awards.  The            maximum  number of awards and the maximum fair
market  value of such awards that may be granted  under our 2004 plan during
           any one  calendar  year to any one grantee  are 1.0  million  shares and $8.0
 million,  respectively.  No more than 50% of            awards may be granted in the
form of full value awards,  such as restricted stock,  subject to anti-dilution
 adjustments            under our 2004 plan.

As
of January 1, 2006, we had issued two types of equity-based payment arrangements:
non-qualified stock options and            restricted stock awards. The expenses associated with these arrangements are recorded in cost of revenues, selling and marketing, research and development and general and administrative expense.

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PREMIERE GLOBAL
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CONSOLIDATED FINANCIAL STATEMENTS

Stock Options

The
following table summarizes the activity of stock options under our stock plans from
December 31, 2004 to December 31,            2007:

|                                               | Options | Weighted 
      Average 
      Exercise 
      Price | Aggregate 
      Intrinsic 
      Value
|---------------------------------------------- | ------- | ---------------------------------------------------- | ---------------------------------------
|Options outstanding
      at December 31, 2004 |         | 4,891,961                                            |                                        
|Granted                                        |         | 669,500                                              |                                        
|Exercised                                      |         | (1,507,860                                           | )                                      
|Expired                                        |         | (260,209                                             | )                                      
|                                               |        
|Options outstanding at
      December 31, 2005 |         | 3,793,392                                            |                                        
|Granted                                        |         |                                                     |                                        
|Exercised                                      |         | (601,312                                             | )                                      
|Expired                                        |         | (540,607                                             | )                                      
|                                               |        
|Options outstanding at
      December 31, 2006 |         | 2,651,473                                            |                                        
|Granted                                        |         |                                                     |                                        
|Exercised                                      |         | (1,332,056                                           | )                                      
|Expired                                        |         | (216,728                                             | )                                      
|                                               |        
|Options outstanding at
      December 31, 2007 |         | 1,102,689                                            |                                        
|                                               |        
|Options exercisable at
      December 31, 2007 |         | 1,011,674                                            |                                        

The
  following table summarizes information about stock options outstanding at December
  31, 2007:

|Range of 
      Exercise Prices | Options 
      Outstanding | Weighted 
      Average Exercise 
      Remaining Life | Weighted Average 
      Exercise Price of 
      Options 
      Outstanding | Options 
      Exercisable | Weighted Average 
      Exercise Price 
      of Options 
      Exercisable
|------------------------------- | -------------------------- | ------------------------------------------------------ | --------------------------------------------------------------------------- | -------------------------- | ---------------------------------------------------------------------------
|$       0
      - $  3.00       |                            | 255,750                                                |                                                                             | 1.44                       |                                                                            
|$  3.84 - $ 
      8.18         |                            | 205,102                                                |                                                                             | 3.74                       |                                                                            
|$  8.53 - $  8.81               |                            | 229,168                                                |                                                                             | 4.16                       |                                                                            
|$  8.92 - $11.32                |                            | 230,169                                                |                                                                             | 5.23                       |                                                                            
|$11.34 - $11.34                 |                            | 42,000                                                 |                                                                             | 5.38                       |                                                                            
|$11.53 - $11.53                 |                            | 140,500                                                |                                                                             | 4.48                       |                                                                            
|                                |                            |                                                        |                                                                             |                            |                                                                            
|                                |                            | 1,102,689                                              |                                                                             | 3.76                       |                                                                            

During
  2007 and 2006, no stock options were granted. During 2005, there were no stock
  options granted whose exercise price was less than the market price of the stock
  on the date of the grant. Options exercisable at December 31, 2007, 2006 and
  2005 were 1,011,674, 2,182,939 and 2,212,556, respectively.

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PREMIERE GLOBAL
SERVICES, INC. AND SUBSIDIARIES 
  NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

For
the years ended December 31, 2007 and 2006, we recognized  equity-based  compensation
 expense of $0.8 million and $2.6            million,  respectively,  related to the
vesting of stock options.  As of December 31, 2007, we had $0.3 million of unvested
           stock options,  which we will record in our statement of operations over a
weighted average recognition period of less than            four years.

Restricted Stock

The
following  table  summarizes  the activity of  restricted  stock awards under our stock
plans from December 31, 2004 to            December 31, 2007:

|                                       | Shares | Weighted 
      Average 
      Price | Aggregate 
      Intrinsic 
      Value
|-------------------------------------- | ------ | ------------------------------------ | ---------------------------------------
|Outstanding at
      December 31, 2004 |        | 1,328,000                            |                                        
|Granted                                |        | 1,513,293                            |                                        
|Vested/released                        |        | (1,432,631                           | )                                      
|Forfeited                              |        | (18,832                              | )                                      
|                                       |       
|Outstanding at December
      31, 2005 |        | 1,389,830                            |                                        
|Granted                                |        | 2,100,579                            |                                        
|Vested/released                        |        | (901,908                             | )                                      
|Forfeited                              |        | (90,333                              | )                                      
|                                       |       
|Outstanding at December
      31, 2006 |        | 2,498,168                            |                                        
|Granted                                |        | 1,003,606                            |                                        
|Vested/released                        |        | (930,978                             | )                                      
|Forfeited                              |        | (118,665                             | )                                      
|                                       |       
|Outstanding at December
      31, 2007 |        | 2,452,131                            |                                        

For
the years ended December 31, 2007 and 2006, we recognized  equity-based  compensation
 expense of $9.8 million and $7.2            million,  respectively,  related to the
vesting of  restricted  stock.  As of December  31, 2007,  we had $22.5  million of
           unvested  restricted stock, which we will record in our statement of
operations over a weighted average  recognition period            of less than five years.

We
are required to estimate the expected forfeiture rate, as well as the probability that
performance conditions that affect the vesting of certain awards will be achieved, and
only recognize expense for those shares expected to vest. We estimate the forfeiture rate
based on historical experience of our stock-based awards that are granted, exercised, and
voluntarily cancelled. If our actual forfeiture rate is materially different from our
estimate, the stock-based compensation expense could be significantly different from what
we have recorded in the current period. In prior periods, we assumed a forfeiture rate of
0% for restricted stock awards. During the year ended December 31, 2007 we elected to
adjust our forfeiture rate to 1.5%. The financial impact of this adjustment was $0.3
million and was recognized as a reduction of equity-based compensation in the quarter
ended December 31, 2007, pursuant to SFAS No. 123(R).

In
the year ended December 31, 2005, we recognized  approximately $7.5 million in non-cash
stock  compensation  expense for            restricted  shares and options issued for
services.  Of this expense,  $4.9 million related to restricted  stock grants and
           stock bonuses  associated with amended and restated  employment  agreements
and restricted stock agreements entered into in            April 2005,  effective as of
January 1, 2005, with two named executive  officers,  $2.4 million related to restricted
stock            grants to other  employees and board  members,  $0.2 million  related to
payroll  taxes  withheld and remitted on behalf of            employees on the vesting of
restricted stock grants,  $(0.3) million related to stock options  accounted for under
variable            accounting  because the market value of our common  stock was greater
than the exercise  price of a portion of the options,            and $0.3 million was as
a result of the  modification  of a director stock option grant.

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|9. |  | EARNINGS
PER SHARE
|-- |  | ------------------

Basic and Diluted Net
Income Per Share

Basic
 earnings  per share is computed by dividing  net income  available to common
 shareholders  by the  weighted-average            number of common shares outstanding
during the period.  The  weighted-average  number of common shares outstanding does not
           include any potentially  dilutive  securities or any unvested  restricted
shares of common stock. These unvested restricted            shares,  although
 classified  as issued and  outstanding  at  December  31,  2007, 2006 and 2005   are
 considered  contingently            returnable until the restrictions  lapse and will
not be included in the basic net income per share  calculation  until the
           shares are vested.

Diluted
net income per share gives effect to all potentially dilutive securities.  Our
outstanding stock options,  warrants            and unvested  restricted shares are
potentially  dilutive securities during the years ended December 31, 2007, 2006 and 2005. The
           difference  between  basic and diluted  weighted-average  shares  outstanding
 was the  dilutive  effect of stock  options,            warrants and the unvested
restricted shares computed as follows:

|                               | Year Ended
      December 31, 2007 | Year Ended
      December 31, 2006 | Year Ended
      December 31, 2005
|------------------------------ | ---------------------------------- | ---------------------------------- | ----------------------------------
|
|Basic EPS                      |                                    | $33,355                            |                                   
|Effect of dilutive securities: |                                   
|Stock
      options            |                                    |                                   |                                   
|Warrants                       |                                    |                                   |                                   
|Unvested
      restricted      |                                   
|shares                         |                                    |                                   |                                   
|                               |                                    |                                    |                                   
|Diluted EPS                    |                                    | $33,355                            |                                   

The
  weighted average diluted common shares outstanding for the year ended December
  31, 2007 excludes the effect of 6,000 of out-of-the-money options and restricted
  shares because their effect would be anti-dilutive. The weighted average diluted
  common shares outstanding for the years  ended December 31, 2006  and 2005 excludes the
  effect of $2.3 million  and $1.7 million, respectively, of out-of-the-money options, warrants and restricted shares
  because their effect would be anti-dilutive.

|10. |  | ACCRUED
      EXPENSES
|--- |  | ----------------------

Accrued
  expenses at December 31, 2007 and 2006 are as follows (in thousands):

|                                                                 | 2007 | 2006   
|---------------------------------------------------------------- | ---- | -------
|
|Accrued wages
      and wage related taxes                       |      | $13,434
|Accrued sales commissions                                        |      | 3,357  
|Office expenses (deferred
      rent, utilities, supplies, etc.) |      | 1,758  
|Acquisition liabilities                                          |      | 3,297  
|Employee benefits                                                |      | 3,769  
|Accrued professional fees                                        |      | 5,411  
|Discontinued operations
      lease liability                    |      |       
|Travel and meeting expenses                                      |      | 115    
|Interest payable                                                 |      | 1,041  
|Asset retirement obligation                                      |      | 386    
|Other                                                            |      | 4,708  
|                                                                 |      |        
|                                                                 |      | $37,276
|                                                                 |      |        

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CONSOLIDATED FINANCIAL STATEMENTS

State sales taxes

We
  have reserves for certain state sales tax contingencies based on the likelihood
  of obligation in accordance with SFAS No. 5. Historically, we have not collected
  and remitted state sales tax from Conferencing & Collaboration Solutions
  customers. We were audited by the Commonwealth of Massachusetts Department of
  Revenue claiming that our audio conferencing services are subject to sales tax
  in Massachusetts. In March 2006, we began assessing sales tax to our customers
  in Massachusetts as a result of this audit. In July 2006, we paid an initial
  payment of approximately $1.2 million to the Commonwealth of Massachusetts Department
  of Revenue for taxable years prior to 2005. Amounts associated with 2005 and
  early 2006 are still under review and have yet to be settled. After
  we were approached by the State of Illinois  in March 2007 regarding the taxability of our
  conferencing services in the state,  we began assessing sales
  tax to our customers in Illinois in April 2007.  Returns were filed and approximately $0.6
  million was paid to the Illinois Department of Revenue for taxable periods prior
  to March 2007. Additional amounts may be due as these returns are audited. More
  states may claim that we are subject to an assessment of sales taxes. As of
  December 31, 2007 and December 31, 2006, we had reserved approximately $5.2
  million and $4.3 million, respectively, for certain state sales tax contingencies.
  This amount is included in Accrued taxes in our  consolidated
  balance sheets. We believe we are appropriately accrued for these contingencies.In January 2008, an outstanding audit with the State of New York was agreed to and payment in the amount of $1.5 million was made for outstanding telecommunications excise taxes.  In the event that actual results differ from these reserves, we may need to
  make adjustments which could materially impact our financial condition and results
  of operations. Historically, we have collected and remitted sales tax from our
  non-Conferencing & Collaboration Solutions customers in applicable states.
  However, it is possible states may disagree with our method of assessing and
  remitting these state sales taxes.

|11. |  | FAIR VALUE OF FINANCIAL
INSTRUMENTS
|--- |  | -----------------------------------

The
carrying amount of cash and cash equivalents,  accounts  receivable and payable and
accrued expenses  approximates fair            value due to their short  maturities.  The
carrying value of our lines of credit and capital lease  obligations do not vary
           materially from fair value at December 31, 2007 and 2006.

|12. |  | EMPLOYEE
BENEFIT PLANS
|--- |  | ----------------------

We
 sponsor a  defined  contribution  plan  covering  substantially  all of our U.S.
 employees.  We also  sponsor  similar            voluntary  contribution  arrangements
 for certain of our  employees  outside  the U.S.  that meet  applicable  eligibility
           requirements.  We may make  contributions  for the benefit of employees  under
these plans. In 2007, 2006 and 2005, we paid            cash of  approximately  $1.9
 million,  $2.1 million and $1.9 million,  respectively,  to fund our  discretionary
 employee            contributions under our defined contribution plans.

|13. |  | RELATED-PARTY
TRANSACTIONS
|--- |  | --------------------------

Notes receivable,
shareholder

We
have made loans in prior years to our chief executive  officer and to a limited
 partnership in which he has an indirect            interest,  pursuant to extensions  of
credit agreed to by us prior to July 30, 2002.  These loans were made pursuant to his
           then current  employment  agreement for the exercise price of certain stock
options and the taxes related thereto.  Each of            these loans is evidenced by a
recourse  promissory note bearing interest at the applicable  federal rate and secured by
the            common stock purchased.  These loans mature between 2009 and 2010. These
loans,  including accrued  interest,  are recorded            in the equity section of
the  consolidated  balance sheets under the caption Notes  receivable,  shareholder.  During
the            twelve months ended December 31, 2007, our chief  executive  officer
repaid  approximately  $0.4 million of his outstanding            loans to us. The
principal  amount  outstanding  under all  remaining  loans owed to us by our chief
 executive  officer is            approximately $1.7 million as of December 31, 2007.

| | 67 | 
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|14. |  | COMMITMENTS
AND CONTINGENCIES
|--- |  | -----------------------------

Operating Lease
Commitments

We
lease computer  equipment,  automobiles,  office space and other equipment under
 noncancelable  lease  agreements.  The            leases generally  provide that we pay
the taxes,  insurance and maintenance  expenses related to the leased assets.  Future
           minimum lease payments for noncancelable operating leases as of December 31,
2007 are as follows (in thousands):

|2008                       | $10,931
|-------------------------- | -------
|2009                       | 8,278  
|2010                       | 5,904  
|2011                       | 4,242  
|2012                       | 3,613  
|Thereafter                 | 13,087 
|                           |        
|Net minimum lease payments | $46,055
|                           |        

Rent
expense under  operating  leases was $9.3  million,  $11.4 million and $12.9 million for
the years ended December 31,            2007,  2006 and 2005,  respectively.  Facilities
 rent is reduced by sublease income of  approximately  $0.1 million,  $0.5
           million and $0.6 million for the years ended  December  31,  2007,  2006 and
2005,  respectively.  In 2007,  2006 and 2005,            facilities rent was reduced by
approximately  $0.8 million,  $0.6 million and $0.7 million,  respectively,  associated
with            contractual obligations provided for in the restructuring charge.

Supply Agreements

We
purchase  telecommunications  services pursuant to supply agreements with
telecommunications  service providers. Some of            our agreements with
 telecommunications  service providers contain commitments that require us to purchase a
minimum amount            of services  through 2009.  These costs are $7.6 million in
2008 and $0.8 million in 2009.  The total amount of the minimum            purchase
requirements in 2007 was $16.8 million, of which we incurred costs in excess of these
minimums.



Government Regulation

We
have received, and certain companies that we acquired had received, letters from the
Investigations and Hearing Division of the FCCs Enforcement Bureau regarding
registration, filing and regulatory surcharge remittance requirements applicable to
traditional telephone companies. In each case, we have responded to the FCCs inquiries.
In addition, certain of our competitors have received such letters and/or are involved in
investigations before the FCC or the Universal Service Administrative Company (USAC)
regarding registration, filing and surcharge remittance requirements, and we could be
adversely affected by the outcome of such investigations. In the course of one such
investigation, on January 15, 2008, USAC issued a decision finding that the audio
bridging services of InterCall, Inc. are toll teleconferencing services, requiring
InterCall to comply with the FCCs registration, filing and regulatory surcharge
remittance requirements applicable to traditional telephone companies on a prospective
and retroactive basis. InterCall has appealed the USAC decision to the FCC and has sought
a stay of the USAC decision. The FCC, in turn, has issued a public notice seeking
comments regarding InterCalls submissions. We believe that we operate as a provider of
unregulated information services. Consequently, we do not believe that we are subject to
the FCC regulations applicable to providers of traditional telecommunications services in
the U.S. We believe that we exercise reasonable efforts to monitor telecommunications
laws, regulations, decisions and trends and to comply with any applicable legal
requirements, if we fail to comply with any applicable government regulations or if we
are required to submit to the jurisdiction of such government authorities as a provider
of traditional telecommunications services in the same manner as described in USACs
decision regarding InterCall, we could be temporarily prohibited from providing portions
of our services, be required to restructure portions of our services or be subject to
reporting and compliance obligations on both a prospective and retroactive basis,
including being subject to litigation, fines, forfeitures, regulatory surcharge
remittance requirements (on both a prospective and retroactive basis) and/or other
penalties arising from for any non-compliance. Subjecting our services to these
regulations, particularly if on a retroactive basis, could have a material adverse affect
on our financial condition and results of operations.

Litigation and Claims

We
have several litigation matters pending,  including matters described below, which we are
defending  vigorously.  Due to            the inherent  uncertainties of the litigation
process and the judicial system, we are unable to predict the outcome of such
           litigation  matters.  If the  outcome of one or more of such  matters  is
 adverse to us, it could have a material  adverse            effect on our business,
financial condition and results of operations.

On
August 21,  2006,  a lawsuit was filed in the U.S.  District  Court for the Eastern
 District of Texas by Ronald A. Katz            Technology  Licensing,  L.P.  against
three  conferencing  service  providers,  including us, alleging that the defendants           automated
 telephone  conferencing  systems that enable [their] customers to perform
 multiple-party  meetings and various            other  functions  over the  telephone  infringe
six of  plaintiffs  patents.  The complaint  seeks  undisclosed  monetary
           damages,  together with pre- and  post-judgment  interest,  treble damages for
what is alleged to be willful  infringement,            attorneys  fees and costs and
 injunctive  relief.  On October 16,  2006,  we filed our answer,  affirmative  defenses
and            counterclaim to the complaint,  including seeking declaratory judgment of
noninfringement,  invalidity and unenforceability            and attorneys fees and
costs. On January 25, 2007,  plaintiff amended its complaint to also add our subsidiary,
 ATS, as a            party. On March 20, 2007, a multidistrict  litigation panel granted
a motion to consolidate 25 pending  infringement suits,            including our suit,
brought by Katz against various defendants to the District Court in California.
 Discovery is on-going.

On
May 18, 2007, Gibson & Co. Ins. Brokers, Inc. served an amended complaint upon us
and our subsidiary, Xpedite, in a purported class action entitled, Gibson
& Co. Ins. Brokers, Inc., et al. v. The Quiznos Corporation, et al., pending in
U.S. District Court for the Central District of California. The
underlying complaint alleges that Quiznos sent unsolicited fax
advertisements on or about November 1, 2005 in violation of the federal Telephone
Consumer Protection Act of 1991, as amended, and seeks damages of $1,500
per fax for alleged willful conduct in sending of the faxes. On June 26,
2007, we answered the plaintiffs amended complaint, including asserting
cross-claims against the Quiznos defendants. On June 29, 2007, the Quiznos
defendants filed their

| | 68 | 
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CONSOLIDATED FINANCIAL STATEMENTS

answer and asserted  cross-claims
 against us. On July 31, 2007,  the            court  entered an order in which it
granted  certain  Quiznos  defendants  motion to dismiss  and denied the motion  with
           respect to other Quiznos  entities.  On September 7, 2007,  plaintiff
 proceeded to file another amended complaint against            the  Quiznos
 defendants,  Growth  Partners  (Quiznos  consultant),  us. On September  21, 2007,  we
filed our answer and            affirmative defenses.  Certain Quiznos defendants filed
a Motion to Dismiss,  which was denied by the Court on December 7,            2007.
 Subsequently,  we filed  cross-claims  against the other defendants and the Quiznos
 defendants filed  cross-claims            against us. The case is currently in
discovery,  and no class has yet been  certified.  We have asserted  indemnity  rights
           against our customer  Quiznos,  a defendant in this case,  and  insurance
 coverage  against our insurer.  Our insurer has            agreed to participate in our
defense in connection with the plaintiffs claims against us, subject to certain
 reservations            of rights and the terms of the policy,  including  policy limits
and  deductibles.  On February 12 - 13, 2008,  the parties            engaged in
 mediation.  The parties  have  reached a global  settlement  in  principle  that should
 resolve all claims and            cross-claims  and have filed a stipulation  with the
court  informing the court and  extending the various  deadlines.  The
           settlement is subject to final  documentation by the parties and approval by
the court.  Our financial  contribution to the            settlement will be well below
the limits of our insurance policy.

We
are also involved in various other legal  proceedings  which we do not believe will have
a material  adverse effect upon            our business,  financial condition or results
of operations,  although no assurance can be given as to the ultimate outcome
           of any such proceedings.

|15. |  | INCOME
TAXES
|--- |  | ------------

Income
tax expense (benefit) from continuing operations for 2007, 2006 and 2005 is as follows
(in thousands):

|              | 2007 | 2006     | 2005
|------------- | ---- | -------- | ----
|**Current:**  |      |          |     
|Federal       |      | $  6,685 |     
|State         |      | 1,536    |     
|International |      | 6,860    |     
|              |      |          |     
|              |      | $15,081  |     
|              |      |          |     
|**Deferred:** |     
|Federal       |      | $  1,284 |     
|State         |      | 932      |     
|International |      | (506     | )   
|              |      |          |     
|              |      | 1,710    |     
|              |      |          |     
|              |      | $16,791  |     
|              |      |          |     

The
  difference between the statutory federal income tax rate and our effective income
  tax rate applied to income before income taxes from continuing operations for
  2007, 2006 and 2005 is as follows (in thousands):

|                                             | 2007 | 2006     | 2005
|-------------------------------------------- | ---- | -------- | ----
|Income taxes
      at federal statutory rate |      | $ 17,551 |     
|State taxes, net of federal
      benefit    |      | (434     | )   
|Foreign taxes                                |      | (1,651   | )   
|APB 23 difference                            |      | (449     | )   
|Change in valuation allowance                |      | 2,303    |     
|Change in previous estimates                 |      | 140      |     
|Foreign tax credits, net                     |      | (468     | )   
|Research and development
      credits       |      | (341     | )   
|Non-deductible employee
      compensation   |      | 989      |     
|Other permanent differences                  |      | 214      |     
|Derecognition of uncertain tax matters       |      | (1,063   | )   
|                                             |      |          |     
|Income taxes at our effective
      rate     |      | $ 16,791 |     
|                                             |      |          |     

| | 69 | 
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Income
tax expense,  income taxes payable and deferred tax assets and  liabilities  are
determined in accordance  with SFAS            No. 109.  Under SFAS No. 109,  the
deferred  tax  liabilities  and assets are  determined  based on  temporary  differences
           between the basis of certain assets and liabilities  for income tax and
financial  reporting  purposes,  in addition to net            operating loss
carryforwards which will more likely than not be utilized.  These differences are
primarily  attributable to            differences in the recognition of depreciation and
amortization of property,  equipment and intangible  assets,  allowances            for
doubtful accounts and certain employee benefit  accruals.  Deferred tax assets and
liabilities are measured by applying            enacted  statutory tax rates  applicable
to future years in which the deferred tax assets or liabilities are expected to be
           settled or realized.  Valuation  allowances  are  established  when  necessary
to reduce  deferred tax assets to the amount            expected to be realized.
 Permanent  differences are primarily  attributable  to  non-deductible  employee
 compensation as            outlined in Section 162(m) of the tax code.

On
July 13, 2006, the FASB issued FIN No. 48 which clarifies the accounting for  uncertainty
in income taxes  recognized in            an entitys  financial  statements in
accordance  with FASB No. 109 and prescribes a recognition  threshold and measurement
           attributes  for financial  statement  disclosures  of tax positions  taken or
expected to be taken on an income tax return.            Under FIN No.  48, the impact of
an  uncertain  income tax  position  on the income tax return  must be  recognized  at
the            largest  amount  that is  more-than-likely-than-not  to be  sustained
 upon  audit by the  relevant  taxing  authority.  An            uncertain  income  tax
 position  will  not be  recognized  if it  has  less  than a 50%  likelihood  of  being
 sustained.            Additionally, FIN No. 48 provides guidance on derecognition,
 classification,  interest, penalties and disclosures. FIN No.            48 is effective
for fiscal years beginning after December 15, 2006.

We
adopted the  provisions of FIN No. 48 on January 1, 2007. We recorded  liabilities  for
certain    international            and state income tax  uncertain  tax
 positions  based on the  recognition  and  measurement  standards of FIN No. 48. As a
           result of our adoption of FIN No. 48,  approximately  $1.3  million was
recorded as a reduction to retained  earnings as an            increase to reserves for
 uncertain tax  positions.  At the adoption  date of January 1, 2007,  we had
 approximately  $6.3            million of  unrecognized  tax  liabilities.  Included in
the  balance of  unrecognized  tax  benefits at January 1, 2007 is
           approximately  $5.6 million,  all of which would affect our effective tax rate
if recognized.  This amount is classified as            Income taxes payable in the
accompanying  consolidated  balance sheets. We file federal income tax returns and income
tax            returns in various states and  international  jurisdictions.  In major tax
 jurisdictions,  tax years from 1997-2006 remain            subject to income tax
examinations by tax authorities.  A reconciliation  of unrecognized tax benefits at the
beginning and            end of year is as follows (in thousands):

|                                                                          | 
|------------------------------------------------------------------------- | 
|Balance at January 1, 2007                                                | 
|Increase related to current
      year                                    | 
|Expiration of the statute
      of limitation for the assessment of taxes | 
|Re-measurement of prior
      liability                                   | 
|Decrease due to assessed
      liability                                  | 
|Other                                                                     | 
|                                                                          | 
|Balance at December 31,
      2007                                        | 

Included
in the  unrecognized  tax benefits of $4.6 million at December 31, 2007 was $1.4 million
of tax benefits  that, if            recognized,  would  reduce our annual  effective
 tax rate.  We also  accrued  potential  interest of $0.2 million and $0.1
           million,  respectively,  related to these  unrecognized tax benefits during
2007. In total as of December 31, 2007, we have            recorded a liability  for
 potential  penalties  and interest of $1.3  million and $0.1  million,  respectively. In January 2008, an outstanding audit with the State of New York was agreed to and payment in the amount of $0.2 million including interest was made. With the exception of this payment, we do not            expect our unrecognized tax benefits to change significantly over
the next 12 months.

As
permitted  with the  adoption of FIN No. 48, we have changed our  classification  of
interest and  penalties  related to            uncertain  tax  positions  and  recognize
 these costs in interest and  penalties  expense.  As of December 31, 2007 and January 1, 2007,  we had
           accrued interest and penalties of approximately $1.3 million and  $0.9 million, respectively,  related to
uncertain tax positions.

In
the normal course of business,  we are subject to inquiries from U.S. and non-U.S. tax
authorities  regarding the amount            of taxes due.  These  inquiries may result
in  adjustments  of the timing or amount of taxable  income or deductions or the
           allocation of income among tax  jurisdictions.  Further,  during the ordinary
course of business,  other changing facts and            circumstances  may impact our
ability to utilize  income tax benefits as well as the  estimated  taxes to be paid in
future            periods.  We believe we are  appropriately  accrued for income taxes.
 In the event that actual  results  differ from these            estimates,  we may need
to adjust Income taxes payable which could materially impact our financial  condition
and results            of operations.

| | 70 | 
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CONSOLIDATED FINANCIAL STATEMENTS

Differences
 between the financial  accounting and tax basis of assets and  liabilities  giving rise
to deferred tax assets            and liabilities are as follows at December 31 (in
thousands):

|                                       | 2007   | 2006    
|-------------------------------------- | ------ | --------
|**Deferred
      tax assets:**         |        |         
|Net
      operating loss carryforwards |        | $13,416 
|Intangible
      assets                |        | 7,071   
|Restructuring
      costs              |        | 1,242   
|Accrued
      expenses                 |        | 1,225   
|Other
      tax credits                |        | 1,053   
|                                       |        |         
|Gross deferred tax assets              |        | $24,007 
|Valuation
      allowance              |        | (9,988  
|                                       |        |         
|Total deferred tax assets              | 14,019 |         
|                                       |        |         
|**Deferred
      tax liabilities:**    |        |         
|Property
      and equipment           |        | $   (312
|Intangible
      assets                |        | (7,041  
|Other
      liabilities                |        | (126    
|                                       |        |         
|Total deferred tax liabilities         |        | (7,479  
|                                       |        |         
|Deferred
      income taxes, net       |        | $ 6,540 
|                                       |        |         

We
are  required  to  estimate  our taxes in each  jurisdiction  in which we  operate.  This
 process  involves  management            estimating its tax exposure together with
assessing temporary  differences  resulting from differing treatment of items for
           tax and accounting purposes.  The ultimate recognition of uncertain tax
matters is realized in the period of resolution.

At
December 31, 2007, we had federal income tax net operating loss  carryforwards of
 approximately  $5.9 million expiring in          2008 through  2018.  The  utilization
 of some of our net  operating  losses is subject to Section 382  limitations  due to a
         prior change in control related to one of our previous  acquisitions.  Tax
  benefits  (expense) of approximately $3.3 million,          $(0.2)  million,  and $2.7
million in 2007,  2006 and 2005,  respectively,  are associated  with  non-qualified
 stock option          exercises, the impact of which was  (credited)    debited  directly to
additional paid-in capital.

We
intend to reinvest the unremitted earnings of our non-U.S. subsidiaries,  with the
exception of Japan, Australia and New            Zealand,  and postpone their remittance
 indefinitely.  In 2007 and 2006, we recorded  approximately  $0.4 million and $0.5
           million,  respectively,  in future foreign tax credits  associated  with
dividends  expected to be received from our Japan,            Australia and New Zealand
subsidiaries.  No other foreign tax credits for U.S. income taxes for non-U.S.
 subsidiaries were            recorded in the accompanying consolidated statements of
earnings.

During
the year ended December 31, 2007, our valuation allowance  increased by approximately
 $0.5 million,  primarily a          result of a $1.8 million  increase in the
 valuation  reserves  placed on certain  current-year  state and foreign  operating
         losses  that,  in  managements  opinion,  will more likely than not remain
 unutilized  and a $1.3  million  decrease due to          the transfer to the opening
balance of our  FIN No.  48 reserve.

|16. |  | STATEMENT
OF CASH FLOW INFORMATION
|--- |  | ----------------------------------

Supplemental
disclosure of cash flow information (in thousands):

|                                                          | 2007 | 2006     | 2005
|--------------------------------------------------------- | ---- | -------- | ----
|Cash paid
      during the year for:                      |      |          |     
|Interest                                                  |      | $13,687  |     
|Income
      taxes                                        |      | $  7,617 |     
|                                                          |     
|Net cash paid for
      acquisitions, including costs and |     
|liabilities
      assumed                                 |      | $47,749  |     

| | 71 | 
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CONSOLIDATED FINANCIAL STATEMENTS

Non-cash investing and
financing activities

During
2007,  2006 and 2005, we paid  approximately  $47.7  million,  $49.0 million and $79.9
 million,  respectively,  for            acquisitions  accounted for as purchases.  On an
aggregate basis, these costs were allocated as follows and, as applicable,            at
the exchange rate on the date of the transaction (in thousands):

|                                        | 2007 | 2006      | 2005
|--------------------------------------- | ---- | --------- | ----
|Accounts receivable                     |      | $   2,593 |     
|Prepaids and other current
      assets |      | 2,723     |     
|Property and equipment                  |      | 354       |     
|Deferred tax assets - current           |      | 1,043     |     
|Goodwill                                |      | 19,224    |     
|Intangible assets                       |      | 9,765     |     
|Long-term assets                        |      | 25,731    |     
|                                        |      |           |     
|Total
      assets acquired             |      | 61,433    |     
|                                        |      |           |     
|Current liabilities                     |      | (5,537    | )   
|Long-term liabilities                   |      | (8,147    | )   
|                                        |      |           |     
|Total
      liabilities assumed         |      | (13,684   | )   
|                                        |      |           |     
|Impact
      of foreign exchange        |      |          |     
|                                        |      |           |     
|Net
      assets acquired               |      | $ 47,749  |     
|                                        |      |           |     

As
  a result of fixed asset valuations from certain of our 2004 acquisitions not
  being finalized until 2005, a non-cash adjustment of approximately $3.1 million
  to the property and equipment line is reflected in the above table.

|17. |  | SEGMENT
      REPORTING
|--- |  | -----------------------

Beginning in the fourth quarter of 2006, we realigned our reporting segments to be consistent with the way we now manage our operations on a geographic regional basis, with reportable segments in North America, Europe and Asia Pacific and no longer report results under our former Conferencing & Collaboration and Data Communications segments.

Information
  concerning our operations in our  reportable segments is as follows (in millions):

|                                                | Year Ended December 31,
|----------------------------------------------- | -----------------------
|
|NET REVENUES:                                   |                        
|Net revenues from continuing
      operations:  |                        
|North
      America                             |                        
|Europe                                          |                        
|Asia
      Pacific                              |                        
|                                                |                        
|                                                |                        
|                                                |                        
|INCOME (LOSS):                                  |                        
|Income (loss) from continuing
      operations: |                        
|North
      America                             |                        
|Europe                                          |                        
|Asia
      Pacific                              |                        
|                                                |                        
|                                                |                        
|                                                |                        
|(Loss) from discontinued
      operations:      |                        
|North
      America  Voicecom                  |                        
|                                                |                        
|Net
      income:                               |                        
|                                                |                        

| | 72 | 
| | -- | 

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CONSOLIDATED FINANCIAL STATEMENTS

|                          | Year Ended December 31,
|------------------------- | -----------------------
|
|IDENTIFIABLE
      ASSETS |                        
|North
      America       |                        
|Europe                    |                        
|Asia
      Pacific        |                        
|                          |                        
|                          |                        
|                          |                        

Information
  concerning depreciation expense for each reportable segment is as follows (in
  millions):

|                                                             | 2007 | 2006  | 2005
|------------------------------------------------------------ | ---- | ----- | ----
|North America                                                |      | $23.9 |     
|Europe                                                       |      | 3.3   |     
|Asia Pacific                                                 |      | 2.8   |     
|                                                             |      |       |     
|Total
      depreciation expense from continuing operations. |      | $30.0 |     
|                                                             |      |       |     

Information
  concerning accrued capital expenditures for each reportable segment is as follows
  (in millions):

|                                                            | 2007 | 2006  | 2005
|----------------------------------------------------------- | ---- | ----- | ----
|North America                                               |      | $45.0 |     
|Europe                                                      |      | 4.1   |     
|Asia Pacific                                                |      | 3.9   |     
|                                                            |      |       |     
|Total
      capital expenditures from continuing operations |      | $53.0 |     
|                                                            |      |       |     

|18. |  | SUBSEQUENT
EVENTS
|--- |  | -----------------

In
January 2008, we expanded the committed  amounts under the accordion feature of our line
of credit by $50.0 million from            $325.0  million to $375.0  million.  We paid
less than $0.1  million of financing  costs for this  expansion of our line of
           credit.

| | 73 | 
| | -- | 

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SELECTED QUARTERLY
FINANCIAL DATA (Unaudited)

The
following table presents certain unaudited  quarterly  consolidated  statement of
operations data for each of the eight            quarters in the periods ended December
31, 2007 and 2006.  Certain prior quarter results have been  reclassified to conform
           with current period  presentation.  The information has been derived from our
unaudited  financial  statements,  which have            been prepared on substantially
the same basis as the audited  consolidated  financial  statements  contained in this
annual            report.  We have  presented  quarterly  earnings per share numbers as
reported in our earnings  releases.  The sum of these            quarterly  earnings per
share  numbers may differ from annual  earnings per share numbers due to rounding and the
impact of            the difference in the weighted shares  outstanding for the
stand-alone  periods.  The results of operations for any quarter            are not
necessarily indicative of the results to be expected for any future period.

|                                     | First
      Quarter | Second
      Quarter | Third
      Quarter | Fourth
      Quarter | Total
|------------------------------------ | ------------------- | -------------------- | ------------------- | -------------------- | -----
|Year Ended
      December 31, 2007   |                     |                      |                     |                      |      
|Net revenues                         |                     | $135,626             |                     | $138,019             |      
|Operating
      income               |                     | 14,747               |                     | 11,219               |      
|Net income                           |                     | 8,947                |                     | 5,833                |      
|Net income
      per share - basic   |                     | $      0.13          |                     | $      0.09          |      
|                                     |                    
|Net income
      per share - diluted |                     | $      0.13          |                     | $      0.09          |      
|                                     |                    
|Year Ended December
      31, 2006   |                    
|Net revenues                         |                     | $121,726             |                     | $125,566             |      
|Operating
      income               |                     | 13,979               |                     | 13,822               |      
|Net income                           |                     | 7,659                |                     | 6,006                |      
|Net income
      per share - basic   |                     | $      0.11          |                     | $      0.09          |      
|                                     |                    
|Net income
      per share - diluted |                     | $      0.11          |                     | $      0.09          |      

The
 results  of  operations  in all the  quarters  in 2007 and 2006  include  charges
 associated  with some or all of the            following:  equity-based  compensation,
 restructuring  costs,  asset  impairments  and net legal  settlements  and related
           expenses.

During
the 2007 year-end close process,  we discovered an error in our reported second and third
quarter 2007 condensed  consolidated statements  of cash flows due to an  inadvertent
 transposition  of  amounts.  The amount of  Excess  tax  benefits  from  share-based
 payment arrangements was erroneously  shown as an increase rather than a reduction in
cash flows from operating  activities and a reduction rather than an increase in cash
flows from financing  activities.  While these periods are not presented in this annual
report on Form 10-K, the table below illustrates  the effects of the  correction  of the
error on the six months  ended June 30, 2007 and the nine months ended  September  30,
2007. Further, when we file our June 30, 2008 and September 30, 2008 quarterly reports on
Form 10-Q, we will correct the prior years amounts.

Six Months Ended
  June 30, 2007
      
      Nine Months Ended September 30, 2007As 
          Reported
      
      As  
          Adjusted
      
      As  
          Reported
      
      As  
          Adjusted(in thousands)Excess tax benefits from
  share-based payment arrangements
      $2,297
      
      
      ($2,297
      )
      
      $2,510
      
      
      ($2,510
      )Net cash provided by
  operating activities
      $41,559
      
      
      $36,965
      
      
      $65,749
      
      
      $60,729Excess tax benefits from
  share-based payment arrangements
      ($2,297
      )
      
      $2,297
      
      
      ($2,510
      )
      
      $2,510Net cash provided by
  financing activities
      ($12,707
      )
      
      ($8,113
      )
      
      ($5,903
      )
      
      ($883
      )


Item 9.  Changes in
and Disagreements with Accountants on Accounting and Financial Disclosure

Not
applicable.

Item 9A.  Controls and
Procedures

Disclosure Controls
and Procedures

Our
management has evaluated,  under the supervision and with the  participation  of our
chief executive  officer and chief            financial  officer,  the  effectiveness  of
our disclosure  controls and procedures as of December 31, 2007.  Based on that
           evaluation,  our chief  executive  officer and chief  financial  officer have
concluded  that, as of December 31, 2007, our            disclosure  controls and
procedures (as defined in Rules  13a-15(e) and 15d-15(e)  under the Exchange Act),  were
effective            and  designed to ensure that (a)  information  required to be
 disclosed  in our reports  filed under the  Exchange  Act is            recorded,
 processed,  summarized and reported within the time periods specified in the SECs rules
and  instructions,  and            (b)  information is  accumulated  and  communicated
 to our  management,  including our chief  executive  officer and chief
           financial officer, as appropriate to allow timely decisions regarding required
disclosures.

| | 74 | 
| | -- | 

---

Managements Report on
Internal Control Over Financial Reporting

Our
management is responsible for establishing and maintaining adequate internal control over
financial reporting, as such term is defined in Exchange Act Rules
13a-15(f)/15d-15(f). Under the supervision and with the participation of our
management, including our principal executive officer and principal
financial officer, we conducted an evaluation of the effectiveness of our
internal control over financial reporting based on the framework in Internal Control  Integrated
Frameworkissued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on our evaluation under the framework in
Internal Control  Integrated Framework, our management concluded that our
internal control over financial reporting was effective as of December 31,
2005.

Deloitte
& Touche LLP, an independent  registered public accounting firm, has audited our
consolidated financial statements            included  in this annual  report on Form
10-K as of the three years ended  December  31,  2007.  The Report of  Independent
           Registered  Public  Accounting  Firm on their audit of  managements
 assessment  of our internal  control  over  financial            reporting and their
audit of the  effectiveness of our internal  control over financial  reporting  follows.
 The Report of            Independent  Registered Public Accounting Firm on their audit
of our consolidated  financial statements is included at page            47 of this
annual report.

Changes in Internal
Control Over Financial Reporting

There
were no changes in our internal  control over  financial  reporting  during the quarter
ended  December 31, 2007 that            have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.

| | 75 | 
| | -- | 

---

REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Shareholders of  Premiere Global Services, Inc.  Atlanta, Georgia

We have audited the internal control
over financial reporting of Premiere Global Services, Inc. and subsidiaries (the Company)
as of December 31, 2007, based on criteria established in Internal Control  Integrated
Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission.
The Companys management is responsible for maintaining effective internal control
over financial reporting and for its assessment of the effectiveness of internal control
over financial reporting. Our responsibility is to express an opinion on the Companys
internal control over financial reporting based on our audit.

We conducted our audit in accordance
with the standards of the Public Company Accounting Oversight Board (United States).
 Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether effective internal control over financial reporting was
maintained in all material respects.  Our audit included obtaining an understanding of
internal control over financial reporting, assessing the risk that a material weakness
exists, testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk, and performing such other procedures as we considered
necessary in the circumstances.  We believe that our audit provides a reasonable basis
for our opinion.

A companys internal control
over financial reporting is a process designed by, or under the supervision of, the
companys principal executive and principal financial officers, or persons
performing similar functions, and effected by the companys board of directors,
management, and other personnel to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles.  A companys internal
control over financial reporting includes those policies and procedures that (1) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts
and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the
companys assets that could have a material effect on the financial statements.

Because of the inherent limitations
of internal control over financial reporting, including the possibility of collusion or
improper management override of controls, material misstatements due to error or fraud
may not be prevented or detected on a timely basis. Also, projections of any evaluation
of the effectiveness of the internal control over financial reporting to future periods
are subject to the risk that the controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

In our opinion, the Company
maintained, in all material respects, effective internal control over financial reporting
as of December 31, 2007, based on the criteria established in Internal Control  Integrated
Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance
with the standards of the Public Company Accounting Oversight Board (United States), the
consolidated financial statements as of and for the year ended December 31, 2007 of the
Company and our report dated February 29, 2008 expressed an unqualified opinion on those
financial statements and included an  explanatory paragraph regarding the Companys
adoption on January 1, 2006 of Statement of Financial Accounting Standards No. 123R Share
Based Payment and the Companys adoption on January 1, 2007 of Financial
Accounting Standards Interpretation No. 48, Accounting for Uncertainty in Income
Taxes an interpretation of FASB Statement No. 109.

/s/ DELOITTE & TOUCHE LLP

Atlanta, Georgia  February 29, 2008

| | 76 | 
| | -- | 

---

Item 9.B.  Other
Information

None.

| | 77 | 
| | -- | 

---

PART III

Certain
 information  required by Part III is omitted from this report and is  incorporated by
reference to our definitive             proxy statement pursuant to Regulation 14A for
our 2008 annual meeting of shareholders,  which we will file not later than
            120 days after the end of the fiscal year covered by this annual report.

|Item 10.Directors, Executive Officers and Corporate Governance
|--------------------------------------------------------------

The
 information  required by this item is  incorporated  herein by  reference  to our proxy
 statement  under the headings            Proposal 1: Election of Directors   Information
 Regarding  Nominees and  Continuing  Directors and Executive  Officers,           Corporate
Governance Matters  Audit Committee and Section 16(a) Beneficial Ownership Reporting
Compliance.

Our
board of directors adopted our Code of Conduct and Ethics that applies to all
employees, directors and officers, including our principal executive
officer and our principal financial officer and principal accounting officer. This code
is posted on our web site at PGiConnect.com(follow the Investor Relations tab
to Corporate Governance). We will satisfy any disclosure requirements
under Item 5.05 of Form 8-K regarding an amendment to, or a waiver from, any provision
of this code with respect to our principal executive officer and our principal
financial officer and principal accounting officer or persons performing
similar functions by disclosing the nature of such amendment or waiver on our web site.

|Item 11. Executive Compensation
|-------------------------------

| | The
 information  required by this item is  incorporated  herein by  reference  to our proxy
 statement  under the headings            Corporate Governance Matters  Compensation
 Committee,  Compensation  Committee Interlocks and Insider Participation,           Compensation
Committee Report, Compensation Discussion and Analysis and Director and Executive
Compensation.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
|-------------------------------------------------------------------------------------------------------

The
 information  required by this item is  incorporated  herein by  reference  to our proxy
 statement  under the headings            Security Ownership of Certain Beneficial
Owners and Management and Equity Compensation Plan Information.

|Item 13.Certain Relationships and Related Transactions and Director Independence
|--------------------------------------------------------------------------------

The
 information  required by this item is  incorporated  herein by  reference  to our proxy
 statement  under the headings            Corporate Governance Matters  Independent
 Directors, Audit Committee,  Compensation  Committee,  Nominating and
           Governance Committee and Certain Transactions.

|Item 14.Principal Accountant Fees and Services
|----------------------------------------------

The
information  required by this item is incorporated  herein by reference to our proxy
statement under the heading Audit            Matters.

Certain
 information  required by Part III is omitted from this report and is  incorporated by
reference to our definitive             proxy statement pursuant to Regulation 14A for
our 2008 annual meeting of shareholders,  which we will file not later than
            120 days after the end of the fiscal year covered by this annual report.

| | 78 | 
| | -- | 

---

PART IV

|Item 15.Exhibits
      and Financial Statement Schedules
|--------------------------------------------------------

|(a) | 1. | Financial
      Statements
|--- | -- | --------------------------

The
  financial statements listed in the index set forth in Item 8 of this report
  are filed as part of this annual report.

| | 2. | Financial
      Statement Schedules
| | -- | -----------------------------------

There
  are no financial statement schedules included in this report.

| | 3. | Exhibits
| | -- | --------

EXHIBIT INDEX

|ExhibitNumber |  | Description
|------------- |  | -----------

|2.1 |  | Agreement
 and Plan of Merger,  together  with  exhibits,  dated  November 13, 1997,  by and among
the  Registrant,  Nets                  Acquisition  Corp. and Xpedite  Systems,  Inc.
 (incorporated  by reference to Exhibit 99.2 to the  Registrants  Current
                 Report on Form 8-K dated  November  13, 1997 and filed  December 5,
1997,  as amended by Form 8-K/A and filed on December                  23, 1997).
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2.2 |  | Agreement
and Plan of Merger,  dated April 22, 1998, by and among the  Registrant,  American
 Teleconferencing  Services,                  Ltd. (ATS),  PTEK Missouri  Acquisition
Corp. and the shareholders of ATS (incorporated by reference to Exhibit 99.1 of
                 the Companys Current Report on Form 8-K dated April 23, 1998 and filed
on April 28, 1998).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2.3 |  | Asset
Purchase  Agreement,  dated September 15, 2003, by and among Captaris,  Inc., MediaTel
 Corporation  (Delaware) and                  Xpedite  Systems,  Inc.  (incorporated  by
reference to Exhibit 2.1 of the Current  Report on Form 8-K of Captaris,  Inc.
                 filed on September 17, 2003).
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2.4 |  | Asset
 Purchase  Agreement,   dated  February  16,  2005,  by  and  among  Clarinet,   Inc.,
 the  Registrant,   American                  Teleconferencing  Services,  Ltd.,
 Conference-Call  USA,  Inc.  and Citizens  Communications  Company  (incorporated  by
                 reference to Exhibit 2.7 to the  Registrants  Annual Report on Form
10-K for the fiscal year ended December 31, 2004 and                  filed on March 15,
2005).
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1 |  | Amended
and Restated  Articles of  Incorporation  of the Registrant  dated March 15, 2006
 (incorporated  by reference to                  Exhibit 3.1 to the  Registrants  Annual
Report on Form 10-K for the year ended  December 31, 2005 and filed on March 16,
                 2006).
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.2 |  | Second
 Amended and Restated  Bylaws of the  Registrant  (incorporated  by  reference to Exhibit
3.2 to the  Registrants                  Annual Report on Form 10-K for the year ended
December 31, 2005 and filed on March 16, 2006).
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.3 |  | Amendment
No. 1 to Second Amended and Restated Bylaws of the Registrant  (incorporated by reference
to Exhibit 3.1 to the                  Registrants Current Report on Form 8-K dated
April 18, 2007 and filed on April 19, 2007).
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.4 |  | Amendment
No. 2 to Second Amended and Restated Bylaws of the Registrant  (incorporated by reference
to Exhibit 3.2 to the                  Registrants Current Report on Form 8-K dated and
filed on June 27, 2007).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.1 |  | See
Exhibits  3.1-4.  for provisions of the Articles of  Incorporation  and Bylaws  defining
the rights of the holders of                  common stock of the Registrant.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 79 | 
| | -- | 

---

|ExhibitNumber |  | Description
|------------- |  | -----------

|4.2 |  | Specimen
Stock Certificate  (incorporated by reference to Exhibit 4.2 to the Registrants  Annual
Report on Form 10-K for                  the year ended December 31, 2005 and filed on
March 16, 2006).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.1 |  | Amended
and Restated 1998 Stock Plan of the  Registrant  (incorporated  by reference to Exhibit
10.1 to the  Registrants                  Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999 and filed on August 16, 1999). +
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.2 |  | Amendment
 No. 1 to the Amended and  Restated  1998 Stock Plan of the  Registrant  (incorporated
 by reference to Exhibit                  10.45 to the Registrants Annual Report on Form
10-K for the year ended December 31, 1999 and filed on March 30, 2000). +
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.3 |  | Intellivoice
 Communications,  Inc. 1995 Incentive Stock Plan (assumed by the Registrant)
 (incorporated  by reference to                  Exhibit 10.52 to the Registrants
 Annual Report on Form 10-K for the year ended December 31, 1999 and filed on March 30,
                 2000).
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.4 |  | 2000
Directors Stock Plan, as amended,  of the Registrant  (incorporated  by reference to
Appendix D to the  Registrants                  Definitive Proxy Statement  distributed
in connection with the Registrants  June 5, 2002 Annual Meeting of Shareholders,
                 filed on April 30, 2002). +
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.5 |  | 1995
 Stock Plan of the  Registrant  (incorporated  by  reference  to  Appendix C to the
 Registrants  Definitive  Proxy                  Statement  distributed in connection
with the Registrants  June 5, 2002 Annual Meeting of  Shareholders,  filed on April
                 30, 2002). +
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.6 |  | Standard
Office Lease, dated May 23, 1996, by and between 2221 Bijou, LLC and American
 Teleconferencing  Services, Ltd.,                  as amended by First  Amendment  to
Standard  Office Lease dated May 4, 1999,  as amended by Second  Amendment to Standard
                 Office Lease dated May 1998, as amended by Third Amendment to Standard
 Office Lease dated  September 1999  (incorporated                  by reference to
Exhibit 10.53 to the  Registrants  Annual  Report on Form 10-K for the year ended
 December 31, 2002 and                  filed on March 31, 2003).
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.7 |  | Lease
 Agreement from Townsend XPD, LLC to Xpedite  Systems,  Inc.,  dated June 15, 2000,
 (incorporated  by reference to                  Exhibit 10.68 to the Registrants
 Annual Report on Form 10-K for the year ended December 31, 2002 and filed on March 31,
                 2003).
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.8 |  | Pine
Ridge Business Park Standard Office Lease,  dated January 29, 1999, by and between Perg
Buildings,  LLC and American                  Teleconferencing  Services,  Ltd., as
amended by First Amendment to Lease dated May 4, 1999 (incorporated by reference to
                 Exhibit 10.69 to the Registrants  Annual Report on Form 10-K for the
year ended December 31, 2002 and filed on March 31,                  2003).
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.9 |  | Stock
Pledge  Agreement,  dated  December 15, 1999, by and between Boland T. Jones and the
 Registrant  (incorporated  by                  reference  to Exhibit  10.73 to
 Amendment  No. 1 to the  Registrants  Annual  Report on Form  10-K/A for the year ended
                 December 31, 2002 and filed on December 23, 2003). +
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.10 |  | Agreement
for Assignment of Stock Options,  dated February 5, 1999, by and among Boland T. Jones,
Seven Gables Management                  Company, LLC, Seven Gables Partnership,  L.P.
and the Registrant (incorporated by reference to Exhibit 10.74 to Amendment
                 No. 1 to the  Registrants  Annual  Report on Form 10-K/A for the year
ended  December 31, 2002 and filed on December 23,                  2003). +
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.11 |  | Promissory
 Note,  dated October 31, 2000,  payable to the  Registrant by Boland T. Jones
 (incorporated  by reference to                  Exhibit 10.75 to Amendment No. 1 to the
 Registrants  Annual Report on Form 10-K/A for the year ended  December 31, 2002
                 and filed on December 23, 2003). +
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 80 | 
| | -- | 

---

|ExhibitNumber |  | Description
|------------- |  | -----------

|10.12 |  | Stock
 Pledge  Agreement,  dated  October 31, 2000,  by and between  Seven Gables  Partnership,
 L.P. and the  Registrant                  (incorporated by reference to Exhibit 10.76 to
Amendment No. 1 to the  Registrants  Annual Report on Form 10-K/A for the
                 year ended December 31, 2002 and filed on December 23, 2003). +
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.13 |  | Stock
Pledge  Agreement,  dated  October 31, 2000, by and between  Boland T. Jones and the
 Registrant  (incorporated  by                  reference  to Exhibit  10.78 to
 Amendment  No. 1 to the  Registrants  Annual  Report on Form  10-K/A for the year ended
                 December 31, 2002 and filed on December 23, 2003). +
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.14 |  | Promissory
 Note,  dated April 17,  2001,  payable to the  Registrant  by Boland T. Jones
 (incorporated  by reference to                  Exhibit 10.80 to Amendment No. 1 to the
 Registrants  Annual Report on Form 10-K/A for the year ended  December 31, 2002
                 and filed on December 23, 2003). +
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.15 |  | Promissory
 Note,  dated April 17,  2001,  payable to the  Registrant  by Boland T. Jones
 (incorporated  by reference to                  Exhibit 10.81 to Amendment No. 1 to the
 Registrants  Annual Report on Form 10-K/A for the year ended  December 31, 2002
                 and filed on December 23, 2003). +
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.16 |  | Promissory
 Note,  dated April 17,  2001,  payable to the  Registrant  by Boland T. Jones
 (incorporated  by reference to                  Exhibit 10.82 to Amendment No. 1 to the
 Registrants  Annual Report on Form 10-K/A for the year ended  December 31, 2002
                 and filed on December 23, 2003). +
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.17 |  | Form
of Director  Indemnification  Agreement between the Registrant and Non-employee Directors
(incorporated by reference                  to Exhibit 10.67 to the  Registrants  Annual
Report of Form 10-K for the year ended December 31, 2003 and filed on March
                 14, 2004). +
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.18 |  | Form
of Officer  Indemnification  Agreement  between the Registrant and each of the executive
 officers  (incorporated by                  reference to Exhibit 10.68 to the Registrants
 Annual Report of Form 10-K for the year ended December 31, 2003 and filed
                 on March 14, 2004). +
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.19 |  | Credit
 Agreement,  dated June 30, 2004, among the Registrant,  as Borrower,  Certain
 Subsidiaries and Affiliates of the                  Borrower, as Guarantors,  the
Lenders Party thereto, Bank of America, N.A., as Administrative Agent and Collateral
Agent,                  and LaSalle Bank National  Association,  as Syndication Agent and
Co-Lead Arranger  (incorporated by reference to Exhibit                  10.1 to the
Registrants Quarterly Report on Form 10-Q for the quarter ended June 30, 2004 and filed
on August 9, 2004).
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.20 |  | Security
 Agreement,  dated June 30, 2004,  among the Registrant,  American  Teleconferencing
 Services,  Ltd.,  Premiere                  Conferencing Network Services,  Inc., PTEK
Services, Inc., Xpedite Network Services, Inc., Xpedite Systems, Inc., Xpedite
                 Systems Worldwide,  Inc. and Bank of America, N.A., as Collateral Agent
(incorporated by reference to Exhibit 10.2 to the                  Registrants Quarterly
Report on Form 10-Q for the quarter ended June 30, 2004 and filed on August 9, 2004).
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.21 |  | Pledge
 Agreement,  dated June 30,  2004,  among the  Registrant,  American  Teleconferencing
 Services,  Ltd.,  Premiere                  Conferencing Networks,  Inc., PTEK Services,
Inc., Xpedite Network Services, Inc., Xpedite Systems, Inc., Xpedite Systems
                 Worldwide,  Inc.  and Bank of America,  N.A.,  as  Collateral  Agent
 (incorporated  by  reference to Exhibit 10.3 to the                  Registrants
Quarterly Report on Form 10-Q for the quarter ended June 30, 2004 and filed on August 9,
2004).
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.22 |  | Amendment
No. 1 to Credit Agreement,  dated February 2, 2005, by and among the Registrant,  as
Borrower, Bank of America,                  N.A., as  Administrative  Agent,  and the
Guarantors and the Lenders that are parties thereto  (incorporated by reference
                 Exhibit 10.1 to the Registrants Current Report on Form 8-K dated
February 5, 2004 and filed on February 3, 2004).
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 81 | 
| | -- | 

---

|ExhibitNumber |  | Description
|------------- |  | -----------

|10.23 |  | 2004
 Long-Term  Incentive  Plan,  as  amended,  of the  Registrant  (incorporated  by
 reference  to  Appendix  B to the                  Registrants  Definitive Proxy
Statement  distributed in connection with the Registrants  June 3, 2004 Annual Meeting
of                  Shareholders, filed on April 28, 2004). +
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.24 |  | Fourth
 Amendment  to Standard  Office  Lease,  effective  March 1, 2005,  by and between  2221
Bijou,  LLC and  American                  Teleconferencing  Services,  Ltd. to the
Standard Office Lease dated May 23, 1996, as amended  (incorporated by reference
                 to Exhibit 10.57 of the  Registrants  Annual Report on Form 10-K for
the year ended December 31, 2004 and filed on March                  15, 2005).
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.25 |  | Fourth
Amended and Restated Executive Employment Agreement between Boland T. Jones and the
Registrant,  effective January                  1, 2005  (incorporated  by reference to
Exhibit 10.1 to the  Registrants  Current  Report on Form 8-K dated and filed on
                 April 20, 2005). +
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.26 |  | Form
of  Restricted  Stock  Agreement  to be issued to Boland T. Jones as Stock  Bonuses
 pursuant  to the terms of their                  Fourth Amended and Restated  Executive
 Employment  Agreements with the Registrant  (incorporated by reference to Exhibit
                 10.3 to the Registrants Current Report on Form 8-K dated and filed on
April 20, 2005). +
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.27 |  | Restricted
Stock Agreement  between Boland T. Jones and the Registrant,  effective April 18, 2005,
under the Registrants                  2004 Long-Term  Incentive Plan (incorporated by
reference to Exhibit 10.4 to the Registrants  Current Report on Form 8-K
                 dated and filed on April 20, 2005). +
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.28 |  | Restricted
Stock Agreement  between Boland T. Jones and the Registrant,  effective April 18, 2005,
under the Registrants                  1995 Stock Plan  (incorporated  by  reference to
Exhibit 10.5 to the  Registrants  Current  Report on Form 8-K dated and
                 filed on April 20, 2005). +
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.29 |  | Form
of NonStatutory  Stock Option  Agreement  under the  Registrants  2004 Long-Term
 Incentive Plan  (incorporated  by                  reference to Exhibit 10.4 to the
Registrants  Quarterly Report on Form 10-Q for the quarter end March 31, 2005 and filed
                 on May 6, 2005).
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.30 |  | Form
of Restricted Stock Agreement under the  Registrants  2004 Long-Term  Incentive Plan
 (incorporated by reference to                  Exhibit 10.5 to the  Registrants
 Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 and filed on May 6,
                 2005).
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.31 |  | Form
of NonStatutory  Stock Option Agreement under the Registrants 1995 Stock Plan
(incorporated by reference to Exhibit                  10.6 to the Registrants Quarterly
Report on Form 10-Q for the quarter ended March 31, 2005 and filed on May 6, 2005).
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.32 |  | Form
of Restricted  Stock Award Agreement under the  Registrants  1995 Stock Plan
 (incorporated by reference to Exhibit                  10.7 to the Registrants
Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 and filed on May 6,
2005).
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.33 |  | Summary
of the  Registrants  Non-Employee  Director  Compensation  (incorporated  by  reference
 to Exhibit  10.1 to the                  Registrants Current Report on Form 8-K dated
and filed on December 22, 2005).
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.34 |  | Lease
 Agreement,  dated  October 28, 2005,  between  Xpedite  Systems,  LLC and 3280
 Peachtree I LLC  (incorporated  by                  reference to Exhibit 10.1 to the
Registrants Current Report on Form 8-K dated and filed on February 1, 2006).
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.35 |  | Guaranty
to the Lease  Agreement  between Xpedite  Systems,  LLC and 3280 Peachtree I LLC, dated
October 28, 2005, by the                  Registrant  (incorporated by reference to
Exhibit 10.2 to the Registrants  Current Report on Form 8-K dated and filed on
                 February 1, 2006).
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 82 | 
| | -- | 

---

|ExhibitNumber |  | Description
|------------- |  | -----------

|10.36 |  | Lease
 Agreement,  dated October 28, 2005,  between  American  Teleconferencing  Services,
 Ltd. and 3280 Peachtree I LLC                  (incorporated by reference to Exhibit
10.3 to the Registrants  Current Report on Form 8-K dated and filed on February 1,
                 2006).
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.37 |  | Guaranty
to the Lease  Agreement  between  American  Teleconferencing  Services,  Ltd.  and 3280
 Peachtree I LLC, by the                  Registrant  (incorporated by reference to
Exhibit 10.4 to the Registrants  Current Report on Form 8-K dated and filed on
                 February 1, 2006).
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.38 |  | Fifth
 Amendment  to Standard  Office  Lease,  dated  February  9, 2006,  by and between  2221
 Bijou,  LLC and  American                  Teleconferencing  Services, Ltd., to the
Standard Office Lease, dated May 23, 1996, as amended (incorporated by reference
                 to Exhibit 10.62 to the  Registrants  Annual Report on Form 10-K for
the year ended December 31, 2005 and filed on March                  16, 2006).
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.39 |  | Amendment
No. 2 and Waiver to Credit Agreement,  dated August 3, 2005, by and among the Registrant,
 as Borrower, Bank of                  America,  N.A., as  Administrative  Agent,  and
the Guarantors and the Lenders that are parties thereto  (incorporated by
                 reference to Exhibit 10.65 of the Registrants  Annual Report on Form
10-K for the year ended December 31, 2005 and filed                  on March 16, 2006).
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.40 |  | Amendment
 No. 3 to Credit  Agreement,  dated April 24, 2006, by and among the  Registrant as
Borrower,  Bank of America,                  N.A. as Administrative  Agent, and the
Guarantors and the Lenders that are parties thereto  (incorporated by reference to
                 Exhibit 10.1 to the Registrants Current Report on Form 8-K dated and
filed April 25, 2006).
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.41 |  | Amendment
to Fifth  Amendment to Standard  Office Lease,  effective  March 13, 2006,  by and
between 2221 Bijou,  LLC and                  American  Teleconferencing  Services,  Ltd.
to the Standard Office Lease, dated May 23, 1996, as amended (incorporated by
                 reference  to Exhibit 10.1 to the  Registrants  Quarterly  Report on
Form 10-Q for the quarter  ended March 31, 2006 and                  filed on May 9,
2006).
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.42 |  | Restricted
 Stock  Agreement  by and between  Theodore  P.  Schrafft  and the  Registrant,  dated
May 5, 2006,  under the                  Registrants  1995 Stock Plan  (incorporated by
reference to Exhibit 10.2 to the Registrants  Current Report on Form 8-K
                 dated May 10, 2006 and filed on May 11, 2006). +
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.43 |  | Restricted
 Stock Agreement by and between T. Lee Provow and the Registrant,  dated May 5, 2006,
 under the  Registrants                  1995 Stock Plan  (incorporated by reference to
Exhibit 10.3 to the Registrants  Current Report on Form 8-K dated May 10,
                 2006 and filed on May 11, 2006). +
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.44 |  | Form
of Restriction  Agreement for non-employee  directors under the 2000 Directors Stock Plan
(incorporated by reference                  to Exhibit 10.2 to the  Registrants
 Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 and filed on May
                 9, 2006).
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.45 |  | Revised
 Summary  of  the  Equity  Compensation   Component  to  the  Registrants   Non-Employee
 Director  Compensation                  (incorporated  by reference to Exhibit 10.1 to
the  Registrants  Current  Report on Form 8-K dated and filed on July 26,
                 2006).
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.46 |  | Amended
and Restated  Employment  Agreement  between  Theodore P. Schrafft and the  Registrant,
 dated September 15, 2006                  (incorporated by reference to Exhibit 10.1 to
the  Registrants  Current Report on From 8-K dated and filed September 19,
                 2006). +
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.47 |  | Amended
 and  Restated  Employment  Agreement  between  T. Lee  Provow  and the  Registrant,
 dated  September  15,  2006                  (incorporated by reference to Exhibit 10.2
to the  Registrants  Current Report on From 8-K dated and filed September 19,
                 2006). +
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 83 | 
| | -- | 

---

|ExhibitNumber |  | Description
|------------- |  | -----------

|10.48 |  | First
 Amendment  to Fourth  Amended  and  Restated  Executive  Employment  Agreement  between
 Boland  T.  Jones and the                  Registrant,  dated September 15, 2006
 (incorporated by reference to Exhibit 10.3 to the  Registrants  Current Report on
                 Form 8-K dated and filed on September 19, 2006). +
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.49 |  | Second
 Amendment to Fifth Amendment to the Standard  Office Lease,  dated September 11, 2006,
by and between 2221 Bijou,                  LLC and  American  Teleconferencing
 Services,  Ltd.,  to the  Standard  Office  Lease,  dated May 23,  1996,  as amended
                 (incorporated  by reference  to Exhibit  10.9 of the  Registrants
 Quarterly  Report on Form 10-Q for the quarter  ended                  September 30,
2006 and filed on November 9, 2006).
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.50 |  | Amendment
to the  Registrants  2004 Long-Term  Incentive Plan,  dated September 29, 2006
 (incorporated  by reference to                  Exhibit 10.7 to the Registrants
Quarterly Report on Form 10-Q dated November 9, 2006 and filed on November 11, 2006). +
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.51 |  | Amendment
No. 4 and Waiver to Credit Agreement,  dated October 3, 2006, by and among the Registrant
as Borrower,  Bank of                  America,  N.A. as  Administrative  Agent,  and the
Guarantors and the Lenders that are parties thereto  (incorporated  by
                 reference to Exhibit 10.8 to the  Registrants  Quarterly  Report on
Form 10-Q for quarter  ended  September 30, 2006 and                  filed on November
9, 2006).
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.52 |  | Amendment
 and  Restatement  of the  Registrants  401(k) Plan,  dated  December 20, 2006 and
 effective  January 1, 2006                  (incorporated  by reference to Exhibit 10.65
to the  Registrants  Annual Report on Form 10-K for the year ended December
                 31, 2006 and filed on March 15, 2007). +
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.53 |  | Separation
Agreement between Jeffrey A. Allred and the Registrant,  dated December 20, 2006 and
effective January 1, 2007                  (incorporated  by reference to Exhibit 10.66
to the  Registrants  Annual Report on Form 10-K for the year ended December
                 31, 2006 and filed on March 15, 2007).
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.54 |  | Restricted
 Stock  Agreement  between  Jeffrey A. Allred and the  Registrant,  effective  December
 30,  2006,  under the                  Registrants 1995 Stock Plan  (incorporated by
reference to Exhibit 10.67 to the Registrants  Annual Report on Form 10-K
                 for the year ended December 31, 2006 and filed on March 15, 2007).
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.55 |  | First
Amendment to Amended and Restated Employment Agreement between T. Lee Provow and the
Registrant,  dated January 23,                  2007  (incorporated by reference to
Exhibit 10.68 to the Registrants  Annual Report on Form 10-K for year ended December
                 31, 2006 and filed on March 15, 2007).  +
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.56 |  | Restricted
Stock Agreement between T. Lee Provow and the Registrant,  dated January 22, 2007, under
the Registrants 1995                  Stock Plan (incorporated by reference to Exhibit
10.69 to the Registrants  Annual Report on Form 10-K for the year ended
                 December 31, 2006 and filed on March 15, 2007). +
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.57 |  | Settlement
Agreement, dated April 19, 2007, by and among the Registrant,  Crescendo Partners II,
L.P. Series E, Crescendo                  Investments  II, LLC,  Crescendo  Advisors II,
LLC, Eric S.  Rosenfeld,  Delacourt  Holdings,  Ltd.,  Colin D. Watson and
                 Premiere Full Value Committee  (incorporated by reference to Exhibit
10.1 to the Registrants  Current Report on Form 8-K                  dated April 18,
2007 and filed on April 19, 2007).
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.58 |  | Amendment
No. 5 and Waiver,  dated April 19, 2007, to the Credit Agreement by and among the
Registrant as Borrower,  Bank                  of America,  N.A., as Administrative
 Agent, and the Guarantors and the Lenders that are parties thereto (incorporated by
                 reference  to Exhibit  10.2 to the  Registrants  Current  Report on
Form 8-K dated April 18, 2007 and filed on April 19,                  2007).
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.59 |  | Amendment
to the Premiere Global Services,  Inc, 401(k) Plan, dated August 28, 2007 (incorporated
by reference to Exhibit                  10.1 to the Registrants  Quarterly Report on
Form 10-Q for the quarter ended September 30, 2007 and filed on November 8,
                 2007). +
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 84 | 
| | -- | 

---

|ExhibitNumber |  | Description
|------------- |  | -----------

|10.60 |  | Second
 Amendment  to Fourth  Amended  and  Restated  Executive  Employment  Agreement  between
 Boland T.  Jones and the                  Registrant dated December 21, 2007
(incorporated by reference to Exhibit 10.1 to the Registrants  Current Report on Form
                 8-K dated December 20, 2007 and filed on December 21, 2007). +
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.61 |  | First
 Amendment to Amended and Restated  Employment  Agreement  between  Theodore P. Schrafft
and the  Registrant  dated                  December  21, 2007  (incorporated  by
 reference to Exhibit  10.2 to the  Registrants  Current  Report on Form 8-K dated
                 December 20, 2007 and filed on December 21, 2007). +
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.62 |  | Second
 Amendment to Amended and Restated  Employment  Agreement  between T. Lee Provow and the
Registrant dated December                  21, 2008  (incorporated  by reference to
Exhibit 10.3 to the  Registrants  Current Report on Form 8-K dated December 20,
                 2007 and filed on December 21, 2007). +
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.63 |  | Amended
 and  Restated  Employment  Letter  between  Michael E.  Havener  and the  Registrant
 dated  December  21,  2007                  (incorporated  by reference to Exhibit 10.4
to the  Registrants  Current  Report on Form 8-K dated December 20, 2007 and
                 filed on December 21, 2007). +
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.64 |  | Second
 Amendment to Amended and Restated  Employment  Agreement  between  Theodore P. Schrafft
and the Registrant  dated                  January 23, 2008 (incorporated by reference to
Exhibit 10.1 to the Registrants  Current Report on Form 8-K dated January
                 22, 2007 and filed on January 25, 2008). +
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.65 |  | Restricted
 Stock  Agreement  between  Theodore  P.  Schrafft  and the  Registrant  dated  September
 30,  2007 under the                  Registrants 1995 Stock Plan. +
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.66 |  | Restricted
 Stock Agreement  between Michael E. Havener and the Registrant dated December 31, 2007
under the Registrants                  1995 Stock Plan. +
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|21.1 |  | Subsidiaries
of the Registrant.
|---- |  | -------------------------------

|23.1 |  | Consent
of Deloitte & Touche LLP.
|---- |  | ---------------------------------

|31.1 |  | Certification
of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities
Exchange Act of 1934.
|---- |  | ---------------------------------------------------------------------------------------------------------------------

|31.2 |  | Certification
of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities
Exchange Act of 1934.
|---- |  | ---------------------------------------------------------------------------------------------------------------------

|32.1 |  | Certification
of Chief Executive Officer pursuant to Rule  13a-14(b)/15d-14(b) of the Securities
Exchange Act of 1934 and                  18 U.S.C. Section 1350.
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|32.2 |  | Certification
of Chief Financial Officer pursuant to Rule  13a-14(b)/15d-14(b) of the Securities
Exchange Act of 1934 and                  18 U.S.C. Section 1350.
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

+ Management  contract or
compensatory  plan or arrangement  required to be filed as an exhibit to this form
pursuant to Item 15(b) of this report.

| | 85 | 
| | -- | 

---

SIGNATURES

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

| | **Premiere
      Global Services, Inc.**
| | ----------------------------------------
| |                                         
| | By:                                     

POWER OF ATTORNEY

KNOW
BY ALL PERSONS BY THESE PRESENTS,  that each person whose signature appears below
constitutes and appoints jointly and            severally,  Boland T. Jones and Scott
Askins  Leonard,  and each one of them, his or her  attorneys-in-fact,  each with the
           power of  substitution,  for him or her in any and all capacities,  to sign
any and all amendments to this Annual Report on            Form 10-K and to file the
same, with exhibits thereto and other documents in connection therewith,  with the
Securities and            Exchange  Commission,  hereby  ratifying  and  confirming  all
that  each  said  attorneys-in-fact,  or his  substitute  or            substitutes, may
do or cause to be done by virtue hereof.

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the registrant in
the capacities and on the dates indicated.

|Signature                                               |  | Title                                                                                                                  | Date             
|------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------- | -----------------
|/s/ Boland T. Jones
      Boland T. Jones               |  | Chairman of the Board and
      Chief 
         Executive Officer (principal 
         executive officer) and Director | February 29, 2008
|                                                       
|/s/ Michael E. Havener Michael E. Havener               |  | Chief Financial Officer
      
         (principal financial and 
         accounting officer)                         | February 29, 2008
|                                                       
|/s/ Jeffrey T. Arnold Jeffrey T. Arnold                 |  | Director                                                                                                               | February 29, 2008
|                                                       
|/s/ Wilkie S. Colyer Wilkie S. Colyer                   |  | Director                                                                                                               | February 29, 2008
|                                                       
|/s/ John R. Harris
      John R. Harris                 |  | Director                                                                                                               | February 28, 2008
|                                                       
|/s/ W. Steven Jones
      W. Steven Jones               |  | Director                                                                                                               | February 26, 2008
|                                                       
|/s/ Raymond H. Pirtle,
      Jr. Raymond H. Pirtle, Jr. |  | Director                                                                                                               | February 29, 2008
|                                                       
|/s/ J. Walker Smith,
      Jr. J. Walker Smith, Jr.     |  | Director                                                                                                               | February 25, 2008

| | 86 | 
| | -- | 

---

EXHIBIT INDEX

|ExhibitNumber |  | Description
|------------- |  | -----------

|2.1 |  | Agreement
 and Plan of Merger,  together  with  exhibits,  dated  November 13, 1997,  by and among
the  Registrant,  Nets                  Acquisition  Corp. and Xpedite  Systems,  Inc.
 (incorporated  by reference to Exhibit 99.2 to the  Registrants  Current
                 Report on Form 8-K dated  November  13, 1997 and filed  December 5,
1997,  as amended by Form 8-K/A and filed on December                  23, 1997).
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2.2 |  | Agreement
and Plan of Merger,  dated April 22, 1998, by and among the  Registrant,  American
 Teleconferencing  Services,                  Ltd. (ATS),  PTEK Missouri  Acquisition
Corp. and the shareholders of ATS (incorporated by reference to Exhibit 99.1 of
                 the Companys Current Report on Form 8-K dated April 23, 1998 and filed
on April 28, 1998).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2.3 |  | Asset
Purchase  Agreement,  dated September 15, 2003, by and among Captaris,  Inc., MediaTel
 Corporation  (Delaware) and                  Xpedite  Systems,  Inc.  (incorporated  by
reference to Exhibit 2.1 of the Current  Report on Form 8-K of Captaris,  Inc.
                 filed on September 17, 2003).
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2.4 |  | Asset
 Purchase  Agreement,   dated  February  16,  2005,  by  and  among  Clarinet,   Inc.,
 the  Registrant,   American                  Teleconferencing  Services,  Ltd.,
 Conference-Call  USA,  Inc.  and Citizens  Communications  Company  (incorporated  by
                 reference to Exhibit 2.7 to the  Registrants  Annual Report on Form
10-K for the fiscal year ended December 31, 2004 and                  filed on March 15,
2005).
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1 |  | Amended
and Restated  Articles of  Incorporation  of the Registrant  dated March 15, 2006
 (incorporated  by reference to                  Exhibit 3.1 to the  Registrants  Annual
Report on Form 10-K for the year ended  December 31, 2005 and filed on March 16,
                 2006).
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.2 |  | Second
 Amended and Restated  Bylaws of the  Registrant  (incorporated  by  reference to Exhibit
3.2 to the  Registrants                  Annual Report on Form 10-K for the year ended
December 31, 2005 and filed on March 16, 2006).
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.3 |  | Amendment
No. 1 to Second Amended and Restated Bylaws of the Registrant  (incorporated by reference
to Exhibit 3.1 to the                  Registrants Current Report on Form 8-K dated
April 18, 2007 and filed on April 19, 2007).
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.4 |  | Amendment
No. 2 to Second Amended and Restated Bylaws of the Registrant  (incorporated by reference
to Exhibit 3.2 to the                  Registrants Current Report on Form 8-K dated and
filed on June 27, 2007).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.1 |  | See
Exhibits  3.1-4.  for provisions of the Articles of  Incorporation  and Bylaws  defining
the rights of the holders of                  common stock of the Registrant.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.2 |  | Specimen Stock Certificate  (incorporated by reference to Exhibit 4.2 to the
Registrants  Annual Report on Form 10-K for                  the year ended December 31,
2005 and filed on March 16, 2006).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.1 |  | Amended
and Restated 1998 Stock Plan of the  Registrant  (incorporated  by reference to Exhibit
10.1 to the  Registrants                  Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999 and filed on August 16, 1999). +
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.2 |  | Amendment
 No. 1 to the Amended and  Restated  1998 Stock Plan of the  Registrant  (incorporated
 by reference to Exhibit                  10.45 to the Registrants Annual Report on Form
10-K for the year ended December 31, 1999 and filed on March 30, 2000). +
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 
| |  | 

---

|ExhibitNumber |  | Description
|------------- |  | -----------

|10.3 |  | Intellivoice
 Communications,  Inc. 1995 Incentive Stock Plan (assumed by the Registrant)
 (incorporated  by reference to                  Exhibit 10.52 to the Registrants
 Annual Report on Form 10-K for the year ended December 31, 1999 and filed on March 30,
                 2000).
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.4 |  | 2000
Directors Stock Plan, as amended,  of the Registrant  (incorporated  by reference to
Appendix D to the  Registrants                  Definitive Proxy Statement  distributed
in connection with the Registrants  June 5, 2002 Annual Meeting of Shareholders,
                 filed on April 30, 2002). +
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.5 |  | 1995
 Stock Plan of the  Registrant  (incorporated  by  reference  to  Appendix C to the
 Registrants  Definitive  Proxy                  Statement  distributed in connection
with the Registrants  June 5, 2002 Annual Meeting of  Shareholders,  filed on April
                 30, 2002). +
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.6 |  | Standard
Office Lease, dated May 23, 1996, by and between 2221 Bijou, LLC and American
 Teleconferencing  Services, Ltd.,                  as amended by First  Amendment  to
Standard  Office Lease dated May 4, 1999,  as amended by Second  Amendment to Standard
                 Office Lease dated May 1998, as amended by Third Amendment to Standard
 Office Lease dated  September 1999  (incorporated                  by reference to
Exhibit 10.53 to the  Registrants  Annual  Report on Form 10-K for the year ended
 December 31, 2002 and                  filed on March 31, 2003).
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.7 |  | Lease
 Agreement from Townsend XPD, LLC to Xpedite  Systems,  Inc.,  dated June 15, 2000,
 (incorporated  by reference to                  Exhibit 10.68 to the Registrants
 Annual Report on Form 10-K for the year ended December 31, 2002 and filed on March 31,
                 2003).
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.8 |  | Pine
Ridge Business Park Standard Office Lease,  dated January 29, 1999, by and between Perg
Buildings,  LLC and American                  Teleconferencing  Services,  Ltd., as
amended by First Amendment to Lease dated May 4, 1999 (incorporated by reference to
                 Exhibit 10.69 to the Registrants  Annual Report on Form 10-K for the
year ended December 31, 2002 and filed on March 31,                  2003).
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.9 |  | Stock
Pledge  Agreement,  dated  December 15, 1999, by and between Boland T. Jones and the
 Registrant  (incorporated  by                  reference  to Exhibit  10.73 to
 Amendment  No. 1 to the  Registrants  Annual  Report on Form  10-K/A for the year ended
                 December 31, 2002 and filed on December 23, 2003). +
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.10 |  | Agreement
for Assignment of Stock Options,  dated February 5, 1999, by and among Boland T. Jones,
Seven Gables Management                  Company, LLC, Seven Gables Partnership,  L.P.
and the Registrant (incorporated by reference to Exhibit 10.74 to Amendment
                 No. 1 to the  Registrants  Annual  Report on Form 10-K/A for the year
ended  December 31, 2002 and filed on December 23,                  2003). +
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.11 |  | Promissory
 Note,  dated October 31, 2000,  payable to the  Registrant by Boland T. Jones
 (incorporated  by reference to                  Exhibit 10.75 to Amendment No. 1 to the
 Registrants  Annual Report on Form 10-K/A for the year ended  December 31, 2002
                 and filed on December 23, 2003). + 10.12            Stock  Pledge
 Agreement,  dated  October 31, 2000,  by and between  Seven Gables  Partnership,  L.P.
and the  Registrant                  (incorporated by reference to Exhibit 10.76 to
Amendment No. 1 to the  Registrants  Annual Report on Form 10-K/A for the
                 year ended December 31, 2002 and filed on December 23, 2003). +
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.13 |  | Stock
Pledge  Agreement,  dated  October 31, 2000, by and between  Boland T. Jones and the
 Registrant  (incorporated  by                  reference  to Exhibit  10.78 to
 Amendment  No. 1 to the  Registrants  Annual  Report on Form  10-K/A for the year ended
                 December 31, 2002 and filed on December 23, 2003). +
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.14 |  | Promissory
 Note,  dated April 17,  2001,  payable to the  Registrant  by Boland T. Jones
 (incorporated  by reference to                  Exhibit 10.80 to Amendment No. 1 to the
 Registrants  Annual Report on Form 10-K/A for the year ended  December 31, 2002
                 and filed on December 23, 2003). +
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 
| |  | 

---

|ExhibitNumber |  | Description
|------------- |  | -----------

|10.15 |  | Promissory
 Note,  dated April 17,  2001,  payable to the  Registrant  by Boland T. Jones
 (incorporated  by reference to                  Exhibit 10.81 to Amendment No. 1 to the
 Registrants  Annual Report on Form 10-K/A for the year ended  December 31, 2002
                 and filed on December 23, 2003). +
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.16 |  | Promissory
 Note,  dated April 17,  2001,  payable to the  Registrant  by Boland T. Jones
 (incorporated  by reference to                  Exhibit 10.82 to Amendment No. 1 to the
 Registrants  Annual Report on Form 10-K/A for the year ended  December 31, 2002
                 and filed on December 23, 2003). +
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.17 |  | Form
of Director  Indemnification  Agreement between the Registrant and Non-employee Directors
(incorporated by reference                  to Exhibit 10.67 to the  Registrants  Annual
Report of Form 10-K for the year ended December 31, 2003 and filed on March
                 14, 2004). +
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.18 |  | Form
of Officer  Indemnification  Agreement  between the Registrant and each of the executive
 officers  (incorporated by                  reference to Exhibit 10.68 to the Registrants
 Annual Report of Form 10-K for the year ended December 31, 2003 and filed
                 on March 14, 2004). +
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.19 |  | Credit
 Agreement,  dated June 30, 2004, among the Registrant,  as Borrower,  Certain
 Subsidiaries and Affiliates of the                  Borrower, as Guarantors,  the
Lenders Party thereto, Bank of America, N.A., as Administrative Agent and Collateral
Agent,                  and LaSalle Bank National  Association,  as Syndication Agent and
Co-Lead Arranger  (incorporated by reference to Exhibit                  10.1 to the
Registrants Quarterly Report on Form 10-Q for the quarter ended June 30, 2004 and filed
on August 9, 2004).
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.20 |  | Security
 Agreement,  dated June 30, 2004,  among the Registrant,  American  Teleconferencing
 Services,  Ltd.,  Premiere                  Conferencing Network Services,  Inc., PTEK
Services, Inc., Xpedite Network Services, Inc., Xpedite Systems, Inc., Xpedite
                 Systems Worldwide,  Inc. and Bank of America, N.A., as Collateral Agent
(incorporated by reference to Exhibit 10.2 to the                  Registrants Quarterly
Report on Form 10-Q for the quarter ended June 30, 2004 and filed on August 9, 2004).
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.21 |  | Pledge
 Agreement,  dated June 30,  2004,  among the  Registrant,  American  Teleconferencing
 Services,  Ltd.,  Premiere                  Conferencing Networks,  Inc., PTEK Services,
Inc., Xpedite Network Services, Inc., Xpedite Systems, Inc., Xpedite Systems
                 Worldwide,  Inc.  and Bank of America,  N.A.,  as  Collateral  Agent
 (incorporated  by  reference to Exhibit 10.3 to the                  Registrants
Quarterly Report on Form 10-Q for the quarter ended June 30, 2004 and filed on August 9,
2004).
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.22 |  | Amendment
No. 1 to Credit Agreement,  dated February 2, 2005, by and among the Registrant,  as
Borrower, Bank of America,                  N.A., as  Administrative  Agent,  and the
Guarantors and the Lenders that are parties thereto  (incorporated by reference
                 Exhibit 10.1 to the Registrants Current Report on Form 8-K dated
February 5, 2004 and filed on February 3, 2004).
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.23 |  | 2004
 Long-Term  Incentive  Plan,  as  amended,  of the  Registrant  (incorporated  by
 reference  to  Appendix  B to the                  Registrants  Definitive Proxy
Statement  distributed in connection with the Registrants  June 3, 2004 Annual Meeting
of                  Shareholders, filed on April 28, 2004). +
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.24 |  | Fourth
 Amendment  to Standard  Office  Lease,  effective  March 1, 2005,  by and between  2221
Bijou,  LLC and  American                  Teleconferencing  Services,  Ltd. to the
Standard Office Lease dated May 23, 1996, as amended  (incorporated by reference
                 to Exhibit 10.57 of the  Registrants  Annual Report on Form 10-K for
the year ended December 31, 2004 and filed on March                  15, 2005).
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.25 |  | Fourth
Amended and Restated Executive Employment Agreement between Boland T. Jones and the
Registrant,  effective January                  1, 2005  (incorporated  by reference to
Exhibit 10.1 to the  Registrants  Current  Report on Form 8-K dated and filed on
                 April 20, 2005). +
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 
| |  | 

---

|ExhibitNumber |  | Description
|------------- |  | -----------

|10.26 |  | Form
of  Restricted  Stock  Agreement  to be issued to Boland T. Jones as Stock  Bonuses
 pursuant  to the terms of their                  Fourth Amended and Restated  Executive
 Employment  Agreements with the Registrant  (incorporated by reference to Exhibit
                 10.3 to the Registrants Current Report on Form 8-K dated and filed on
April 20, 2005). +
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.27 |  | Restricted
Stock Agreement  between Boland T. Jones and the Registrant,  effective April 18, 2005,
under the Registrants                  2004 Long-Term  Incentive Plan (incorporated by
reference to Exhibit 10.4 to the Registrants  Current Report on Form 8-K
                 dated and filed on April 20, 2005). +
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.28 |  | Restricted
Stock Agreement  between Boland T. Jones and the Registrant,  effective April 18, 2005,
under the Registrants                  1995 Stock Plan  (incorporated  by  reference to
Exhibit 10.5 to the  Registrants  Current  Report on Form 8-K dated and
                 filed on April 20, 2005). +
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.29 |  | Form
of NonStatutory  Stock Option  Agreement  under the  Registrants  2004 Long-Term
 Incentive Plan  (incorporated  by                  reference to Exhibit 10.4 to the
Registrants  Quarterly Report on Form 10-Q for the quarter end March 31, 2005 and filed
                 on May 6, 2005).
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.30 |  | Form
of Restricted Stock Agreement under the  Registrants  2004 Long-Term  Incentive Plan
 (incorporated by reference to                  Exhibit 10.5 to the  Registrants
 Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 and filed on May 6,
                 2005).
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.31 |  | Form
of NonStatutory  Stock Option Agreement under the Registrants 1995 Stock Plan
(incorporated by reference to Exhibit                  10.6 to the Registrants Quarterly
Report on Form 10-Q for the quarter ended March 31, 2005 and filed on May 6, 2005).
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.32 |  | Form
of Restricted  Stock Award Agreement under the  Registrants  1995 Stock Plan
 (incorporated by reference to Exhibit                  10.7 to the Registrants
Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 and filed on May 6,
2005).
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.33 |  | Summary
of the  Registrants  Non-Employee  Director  Compensation  (incorporated  by  reference
 to Exhibit  10.1 to the                  Registrants Current Report on Form 8-K dated
and filed on December 22, 2005).
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.34 |  | Lease
 Agreement,  dated  October 28, 2005,  between  Xpedite  Systems,  LLC and 3280
 Peachtree I LLC  (incorporated  by                  reference to Exhibit 10.1 to the
Registrants Current Report on Form 8-K dated and filed on February 1, 2006).
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.35 |  | Guaranty
to the Lease  Agreement  between Xpedite  Systems,  LLC and 3280 Peachtree I LLC, dated
October 28, 2005, by the                  Registrant  (incorporated by reference to
Exhibit 10.2 to the Registrants  Current Report on Form 8-K dated and filed on
                 February 1, 2006).
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.36 |  | Lease
 Agreement,  dated October 28, 2005,  between  American  Teleconferencing  Services,
 Ltd. and 3280 Peachtree I LLC                  (incorporated by reference to Exhibit
10.3 to the Registrants  Current Report on Form 8-K dated and filed on February 1,
                 2006).
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.37 |  | Guaranty
to the Lease  Agreement  between  American  Teleconferencing  Services,  Ltd.  and 3280
 Peachtree I LLC, by the                  Registrant  (incorporated by reference to
Exhibit 10.4 to the Registrants  Current Report on Form 8-K dated and filed on
                 February 1, 2006).
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.38 |  | Fifth
 Amendment  to Standard  Office  Lease,  dated  February  9, 2006,  by and between  2221
 Bijou,  LLC and  American                  Teleconferencing  Services, Ltd., to the
Standard Office Lease, dated May 23, 1996, as amended (incorporated by reference
                 to Exhibit 10.62 to the  Registrants  Annual Report on Form 10-K for
the year ended December 31, 2005 and filed on March                  16, 2006).
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 
| |  | 

---

|ExhibitNumber |  | Description
|------------- |  | -----------

|10.39 |  | Amendment
No. 2 and Waiver to Credit Agreement,  dated August 3, 2005, by and among the Registrant,
 as Borrower, Bank of                  America,  N.A., as  Administrative  Agent,  and
the Guarantors and the Lenders that are parties thereto  (incorporated by
                 reference to Exhibit 10.65 of the Registrants  Annual Report on Form
10-K for the year ended December 31, 2005 and filed                  on March 16, 2006).
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.40 |  | Amendment
 No. 3 to Credit  Agreement,  dated April 24, 2006, by and among the  Registrant as
Borrower,  Bank of America,                  N.A. as Administrative  Agent, and the
Guarantors and the Lenders that are parties thereto  (incorporated by reference to
                 Exhibit 10.1 to the Registrants Current Report on Form 8-K dated and
filed April 25, 2006).
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.41 |  | Amendment
to Fifth  Amendment to Standard  Office Lease,  effective  March 13, 2006,  by and
between 2221 Bijou,  LLC and                  American  Teleconferencing  Services,  Ltd.
to the Standard Office Lease, dated May 23, 1996, as amended (incorporated by
                 reference  to Exhibit 10.1 to the  Registrants  Quarterly  Report on
Form 10-Q for the quarter  ended March 31, 2006 and                  filed on May 9,
2006).
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.42 |  | Restricted
 Stock  Agreement  by and between  Theodore  P.  Schrafft  and the  Registrant,  dated
May 5, 2006,  under the                  Registrants  1995 Stock Plan  (incorporated by
reference to Exhibit 10.2 to the Registrants  Current Report on Form 8-K
                 dated May 10, 2006 and filed on May 11, 2006). +
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.43 |  | Restricted
 Stock Agreement by and between T. Lee Provow and the Registrant,  dated May 5, 2006,
 under the  Registrants                  1995 Stock Plan  (incorporated by reference to
Exhibit 10.3 to the Registrants  Current Report on Form 8-K dated May 10,
                 2006 and filed on May 11, 2006). +
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.44 |  | Form
of Restriction  Agreement for non-employee  directors under the 2000 Directors Stock Plan
(incorporated by reference                  to Exhibit 10.2 to the  Registrants
 Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 and filed on May
                 9, 2006).
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.45 |  | Revised
 Summary  of  the  Equity  Compensation   Component  to  the  Registrants   Non-Employee
 Director  Compensation                  (incorporated  by reference to Exhibit 10.1 to
the  Registrants  Current  Report on Form 8-K dated and filed on July 26,
                 2006).
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.46 |  | Amended
and Restated  Employment  Agreement  between  Theodore P. Schrafft and the  Registrant,
 dated September 15, 2006                  (incorporated by reference to Exhibit 10.1 to
the  Registrants  Current Report on From 8-K dated and filed September 19,
                 2006). +
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.47 |  | Amended
 and  Restated  Employment  Agreement  between  T. Lee  Provow  and the  Registrant,
 dated  September  15,  2006                  (incorporated by reference to Exhibit 10.2
to the  Registrants  Current Report on From 8-K dated and filed September 19,
                 2006). +
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.48 |  | First
 Amendment  to Fourth  Amended  and  Restated  Executive  Employment  Agreement  between
 Boland  T.  Jones and the                  Registrant,  dated September 15, 2006
 (incorporated by reference to Exhibit 10.3 to the  Registrants  Current Report on
                 Form 8-K dated and filed on September 19, 2006). +
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.49 |  | Second
 Amendment to Fifth Amendment to the Standard  Office Lease,  dated September 11, 2006,
by and between 2221 Bijou,                  LLC and  American  Teleconferencing
 Services,  Ltd.,  to the  Standard  Office  Lease,  dated May 23,  1996,  as amended
                 (incorporated  by reference  to Exhibit  10.9 of the  Registrants
 Quarterly  Report on Form 10-Q for the quarter  ended                  September 30,
2006 and filed on November 9, 2006).
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.50 |  | Amendment
to the  Registrants  2004 Long-Term  Incentive Plan,  dated September 29, 2006
 (incorporated  by reference to                  Exhibit 10.7 to the Registrants
Quarterly Report on Form 10-Q dated November 9, 2006 and filed on November 11, 2006). +
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 
| |  | 

---

|ExhibitNumber |  | Description
|------------- |  | -----------

|10.51 |  | Amendment
No. 4 and Waiver to Credit Agreement,  dated October 3, 2006, by and among the Registrant
as Borrower,  Bank of                  America,  N.A. as  Administrative  Agent,  and the
Guarantors and the Lenders that are parties thereto  (incorporated  by
                 reference to Exhibit 10.8 to the  Registrants  Quarterly  Report on
Form 10-Q for quarter  ended  September 30, 2006 and                  filed on November
9, 2006).
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.52 |  | Amendment
 and  Restatement  of the  Registrants  401(k) Plan,  dated  December 20, 2006 and
 effective  January 1, 2006                  (incorporated  by reference to Exhibit 10.65
to the  Registrants  Annual Report on Form 10-K for the year ended December
                 31, 2006 and filed on March 15, 2007). +
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.53 |  | Separation
Agreement between Jeffrey A. Allred and the Registrant,  dated December 20, 2006 and
effective January 1, 2007                  (incorporated  by reference to Exhibit 10.66
to the  Registrants  Annual Report on Form 10-K for the year ended December
                 31, 2006 and filed on March 15, 2007).
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.54 |  | Restricted
 Stock  Agreement  between  Jeffrey A. Allred and the  Registrant,  effective  December
 30,  2006,  under the                  Registrants 1995 Stock Plan  (incorporated by
reference to Exhibit 10.67 to the Registrants  Annual Report on Form 10-K
                 for the year ended December 31, 2006 and filed on March 15, 2007).
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.55 |  | First
Amendment to Amended and Restated Employment Agreement between T. Lee Provow and the
Registrant,  dated January 23,                  2007  (incorporated by reference to
Exhibit 10.68 to the Registrants  Annual Report on Form 10-K for year ended December
                 31, 2006 and filed on March 15, 2007).  +
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.56 |  | Restricted
Stock Agreement between T. Lee Provow and the Registrant,  dated January 22, 2007, under
the Registrants 1995                  Stock Plan (incorporated by reference to Exhibit
10.69 to the Registrants  Annual Report on Form 10-K for the year ended
                 December 31, 2006 and filed on March 15, 2007). +
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.57 |  | Settlement
Agreement, dated April 19, 2007, by and among the Registrant,  Crescendo Partners II,
L.P. Series E, Crescendo                  Investments  II, LLC,  Crescendo  Advisors II,
LLC, Eric S.  Rosenfeld,  Delacourt  Holdings,  Ltd.,  Colin D. Watson and
                 Premiere Full Value Committee  (incorporated by reference to Exhibit
10.1 to the Registrants  Current Report on Form 8-K                  dated April 18,
2007 and filed on April 19, 2007).
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.58 |  | Amendment
No. 5 and Waiver,  dated April 19, 2007, to the Credit Agreement by and among the
Registrant as Borrower,  Bank                  of America,  N.A., as Administrative
 Agent, and the Guarantors and the Lenders that are parties thereto (incorporated by
                 reference  to Exhibit  10.2 to the  Registrants  Current  Report on
Form 8-K dated April 18, 2007 and filed on April 19,                  2007).
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.59 |  | Amendment
to the Premiere Global Services,  Inc, 401(k) Plan, dated August 28, 2007 (incorporated
by reference to Exhibit                  10.1 to the Registrants  Quarterly Report on
Form 10-Q for the quarter ended September 30, 2007 and filed on November 8,
                 2007). +
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.60 |  | Second
 Amendment  to Fourth  Amended  and  Restated  Executive  Employment  Agreement  between
 Boland T.  Jones and the                  Registrant dated December 21, 2007
(incorporated by reference to Exhibit 10.1 to the Registrants  Current Report on Form
                 8-K dated December 20, 2007 and filed on December 21, 2007). +
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.61 |  | First
 Amendment to Amended and Restated  Employment  Agreement  between  Theodore P. Schrafft
and the  Registrant  dated                  December  21, 2007  (incorporated  by
 reference to Exhibit  10.2 to the  Registrants  Current  Report on Form 8-K dated
                 December 20, 2007 and filed on December 21, 2007). +
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.62 |  | Second
 Amendment to Amended and Restated  Employment  Agreement  between T. Lee Provow and the
Registrant dated December                  21, 2008  (incorporated  by reference to
Exhibit 10.3 to the  Registrants  Current Report on Form 8-K dated December 20,
                 2007 and filed on December 21, 2007). +
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 
| |  | 

---

|10.63 |  | Amended
 and  Restated  Employment  Letter  between  Michael E.  Havener  and the  Registrant
 dated  December  21,  2007                  (incorporated  by reference to Exhibit 10.4
to the  Registrants  Current  Report on Form 8-K dated December 20, 2007 and
                 filed on December 21, 2007). +
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.64 |  | Second
 Amendment to Amended and Restated  Employment  Agreement  between  Theodore P. Schrafft
and the Registrant  dated                  January 23, 2008 (incorporated by reference to
Exhibit 10.1 to the Registrants  Current Report on Form 8-K dated January
                 22, 2007 and filed on January 25, 2008). +
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.65 |  | Restricted
 Stock  Agreement  between  Theodore  P.  Schrafft  and the  Registrant  dated  September
 30,  2007 under the                  Registrants 1995 Stock Plan. +
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.66 |  | Restricted
 Stock Agreement  between Michael E. Havener and the Registrant dated December 31, 2007
under the Registrants                  1995 Stock Plan. +
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|21.1 |  | Subsidiaries
of the Registrant.
|---- |  | -------------------------------

|23.1 |  | Consent
of Deloitte & Touche LLP.
|---- |  | ---------------------------------

|31.1 |  | Certification
of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities
Exchange Act of 1934.
|---- |  | ---------------------------------------------------------------------------------------------------------------------

|31.2 |  | Certification
of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities
Exchange Act of 1934.
|---- |  | ---------------------------------------------------------------------------------------------------------------------

|32.1 |  | Certification
of Chief Executive Officer pursuant to Rule  13a-14(b)/15d-14(b) of the Securities
Exchange Act of 1934 and                  18 U.S.C. Section 1350.
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|32.2 |  | Certification
of Chief Financial Officer pursuant to Rule  13a-14(b)/15d-14(b) of the Securities
Exchange Act of 1934 and                  18 U.S.C. Section 1350.
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

+ Management  contract or
compensatory  plan or arrangement  required to be filed as an exhibit to this form
pursuant to Item 15(b) of this report.

| |  | 
| |  | 

---