Document:

Unassociated Document

    WAIVER
      AND AMENDMENT NO. 2

    TO

    CREDIT
      AND SECURITY AGREEMENT

     

    THIS
      WAIVER AND AMENDMENT NO. 2 (this “Amendment”) is entered into as of March 8,
      2006, by
      and
      among OBLIO TELECOM, INC., a Delaware corporation (“Oblio”), each of its direct
      and indirect subsidiaries signatory hereto (Oblio and each such subsidiary
      are
      referred to, individually and collectively, jointly and severally as the
“Borrower”), the other Credit Parties signatory hereto and CAPITALSOURCE FINANCE
      LLC, a Delaware limited liability company (the “Lender”).

     

    BACKGROUND

     

    Borrower
      and Lender entered into a Credit and Security Agreement dated as of August
      12,
      2005 (as amended, restated, supplemented or otherwise modified from time to
      time, the “Loan Agreement”) pursuant to which Lender provided Borrower with
      certain financial accommodations.

     

    The
      Borrower has requested that Lender (i) waive certain Defaults or Events of
      Default that have occurred under the Loan Agreement (including Amendment No.1
      thereto) and (ii) make
      certain amendments to the Loan Agreement, and Lender is willing to do so on
      the
      terms and conditions hereafter set forth.

     

    NOW,
      THEREFORE, in consideration of any loan or advance or grant of credit heretofore
      or hereafter made to or for the account of Borrower by Lender, and for other
      good and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the parties hereto hereby agree as follows:

     

    1.  
Definitions.
      All
      capitalized terms not otherwise defined herein shall have the meanings given
      to
      them in the Loan Agreement.

     

    2.  
Acknowledgement. 
      Borrower hereby affirms and acknowledges that (a) as of February 28 2006, there
      is presently due and owing to Lender the principal amounts of
      $3,197,982.86 with
      respect to the Revolving Facility, $3,958,333.35
      with
      respect to Term Loan A and $5,066,666.65
      with
      respect to Term Loan B, in each case together with interest, costs, fees
      (including without limitation, the accrued Non-Compliance Fee) and expenses
      (collectively, the “Amount”), (b) the Amount is due and owing without
      defense, offset or counterclaim of any kind or nature whatsoever, and
      (c) the Loan Documents are and shall continue to be legal, valid and
      binding obligations and agreements of Borrower enforceable in accordance with
      their respective terms.

     

    3.  
Waiver. 
      Certain Events of Default (the “Designated Events of Default”) have occurred
      under the Loan Agreement as a result of Credit
      Parties’ non-compliance
      with Section
      7
      of Amendment No. 1
      due to
Credit
      Parties’
      failure
      to satisfy
      the requirements set forth in Sections 7(a) and 7(b) of Amendment No.
      1.
      Subject
      to the provisions set forth in this Amendment, Lender hereby waives the
      Designated Events of Default and, from and after the Amendment No. 2 Effective
      Date, hereby agrees that Paragraph 7 of Amendment No. 1 shall be of no further
      force and effect and Lender shall no longer charge the amounts set forth in
      Section 7(c) of Amendment No.1. Except for the foregoing waiver, the Loan
      Agreement (including Amendment No.1) shall remain in full force and effect
      and
      is hereby ratified and confirmed.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.  
Amendment
      to Loan Agreement.  Subject to the satisfaction of the conditions
      precedent set forth in Section 5 below, the Loan Agreement is hereby amended
      as
      follows:

     

    
      	
            	(a)	The
              fifth sentence of Section 2.1(a) of the Loan Agreement is hereby amended
              in its entirety to provide as
              follows:

    

        

    
      	
               

            	
              “Subject
                to the provisions of this Agreement, Borrower may request Advances
                under
                the Revolving Facility up to and including the value, in U.S. Dollars,
                of
                the sum of (i) the Receivables Percentage of the Borrowing Base for
                Eligible Receivables, and (ii) the Inventory Percentage of the Borrowing
                Base for Eligible Inventory, minus,
                if applicable, amounts adjusted or reserved pursuant to this Agreement
                (such calculated amount being referred to herein as the “Availability”).
                

            

    

     

    
      	
            	(b)	Section
              2.3 of the Loan Agreement is hereby amended in its entirety to provide
              as
              follows: 

    

        

    
      	 	
              “Interest
                on outstanding Advances under the Facility shall be payable monthly
                in
                arrears on the first day of each calendar month at an annual rate
                of the
                Prime Rate plus one percent (1%), provided,
                however,
                that, notwithstanding any provision of any Loan Document, for the
                purpose
                of calculating interest hereunder, the Prime Rate shall be not less
                than
                six and one half percent (6.50%), in each case calculated on the
                basis of
                a 360-day year and for the actual number of calendar days elapsed
                in each
                interest calculation period. Interest accrued on each Advance under
                the
                Facility shall be due and payable on the first day of each calendar
                month,
                in accordance with the procedures provided for in Section 2.5 and
                Section 2.12, commencing March 1, 2006, and continuing until the
                later of the expiration of the Term and the full performance and
                irrevocable payment in full in cash of the Obligations and termination
                of
                this Agreement.”

            

    

    

      
        	
              	(c)	Section
                2.7 of the Loan Agreement is hereby amended by amending the first
                sentence
                thereof in its entirety to 

      

    

    
      
        	provide as
                follows:

      

    

     

    
      	 	
              “Interest
                on the outstanding balance of Term Loan A shall be payable monthly
                in
                arrears on the first day of each calendar month at an annual rate
                of (i)
                the Prime Rate plus eight percent (8%) during the period commencing
                on the
                Amendment No. 1 Effective Date and continuing through the earlier
                of (x)
                June 30, 2007 or (y) the repayment in full in cash of Term Loan B
                and (ii)
                the Prime Rate plus four percent (4%) at all other times, provided,
                however,
                that, notwithstanding any provision of any Loan Document, for the
                purpose
                of calculating interest hereunder, the Prime Rate shall be not less
                than
                six and one half percent (6.50%), in each case calculated on the
                basis of
                a 360-day year and for the actual number of calendar days elapsed
                in each
                interest calculation period.”

            

    

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
            	(d)	Section
              2.8 of the Loan Agreement is hereby amended in its entirety to provide
              as
              follows:

    

        

    
      	 	
              “(a) Payment
                of principal (in
                addition to the interest payments in Section 2.7) and all other amounts
                outstanding under Term Loan A shall be payable as follows: (i) commencing
                October 1, 2005, equal monthly installments of $208,333.33 and continuing
                on the first day of each month thereafter until February 1, 2006,
                (ii)
                commencing March 1, 2006, equal monthly installments of $75,000 and
                continuing on the first day of each month thereafter until the earlier
                of
                (x) June 30, 2007 and (y) the repayment in full in cash of Term Loan
                B and
                (iii) commencing on the first Business Day of the immediately succeeding
                month following the repayment in full of Term Loan B, equal monthly
                installments of $300,000 and continuing on the first day of each
                month
                thereafter.

            
	 	 
	 	
              (b) The
                unpaid principal
                amount of Term Loan A and all other Obligations under Term Loan A
                shall be
                due and payable in full, if not earlier in accordance with this Agreement,
                on the earlier of (i) the occurrence of an Event of Default if required
                pursuant hereto or Lender’s demand upon an Event of Default, and (ii) June
                30, 2007 (such earlier date being the “Term
                Loan A Maturity Date”).”

            

    

    

     

      
        	
              	(e)	Section
                2.10 of the Loan Agreement is hereby amended by amending the first
                sentence thereof in its entirety to read

      

      
        
          	as
                  follows:

        

      

    

     

    
      	 	
              “Interest
                on the outstanding balance of Term Loan B shall be payable monthly
                in
                arrears on the first day of each calendar month at an annual rate
                of the
                Prime Rate plus four percent (4%), provided,
                however,
                that, notwithstanding any provision of any Loan Document, for the
                purpose
                of calculating interest hereunder, the Prime Rate shall be not less
                than
                six and one half percent (6.50%), in each case calculated on the
                basis of
                a 360-day year and for the actual number of calendar days elapsed
                in each
                interest calculation period.”

            

    

    

    
      	
            	(f)	Section
              2.11(b) of the Loan Agreement is hereby amended by deleting the reference
              to “February 28, 2006” and 

    

    
      
        	replacing the same with “June 30,
                2007”.

      

    

     

    
      	 	(g)	Section
              2.15(c) of the Loan Agreement is hereby amended in its entirety to
              provide
              as follows:

    

     

    
      	 	
              “(c)
                until such time as the Obligations relating to the Term Loan Facilities
                are indefeasibly paid in full in cash and fully performed, on or
                before
                the day of delivery to Lender of Borrower’s monthly financial statements
                in accordance with the terms of this Agreement, but in any event
                not later
                than the 30th day after the end of each month (commencing with the
                calendar month ending September 30, 2005), Borrower shall furnish
                Lender
                with a written calculation of Excess Cash Flow for such month and
                deliver
                to Lender an amount equal to the sum of (i) fifty percent (50%) of
                Borrower’s Excess Cash Flow for such month (the “Initial Excess Cash Flow
                Amount”), to be applied by Lender to reduce the Obligations as follows:
                first, to all then unpaid fees and expenses; second, to all accrued
                and
                unpaid interest on the Term Loan Facilities; third, fifty percent
                (50%) of
                such Initial Excess Cash Flow Amount shall be applied to the principal
                payment outstanding under Term Loan A in the inverse order of maturities
                and fifty percent (50%) of such Initial Excess Cash Flow Amount shall
                be
                applied to the principal payment outstanding under Term Loan B in
                the
                inverse order of maturities; provided,
                further,
                one hundred percent (100%) of the Initial Excess Cash Flow Amount
                shall be
                applied to either Term Loan A or Term Loan B, as the case may be,
                if the
                balance of either Term Loan equals zero, plus (ii) an amount equal
                to the
                excess, if any, of fifty percent (50%) of Borrower’s Excess Cash Flow for
                such month (the “Additional Excess Cash Flow Amount”) over any reduction
                in the balance of Borrower’s accounts payable during such month, such
                Additional Excess Cash Flow Amount to be applied by Lender to reduce
                the
                Obligations as follows: first, to all then unpaid fees and expenses;
                second, to all accrued and unpaid interest on the Term Loan Facilities;
                third, fifty percent (50%) of such Additional Excess Cash Flow Amount
                shall be applied to the principal payment outstanding under Term
                Loan A in
                the inverse order of maturities and fifty percent (50%) of such Additional
                Excess Cash Flow Amount shall be applied to the principal payment
                outstanding under Term Loan B in the inverse order of maturities;
                provided,
                further,
                one hundred percent (100%) of the Additional Excess Cash Flow Amount
                shall
                be applied to either Term Loan A or Term Loan B, as the case may
                be, if
                the balance of either Term Loan equals zero, provided,
                further,
                that the reduction of the principal balance of the Term Loan Facilities
                described in clauses (i) and (ii) above shall not affect the amount
                or
                timing of principal payments (other than the extent to which reductions
                have been made with respect to such principal payments as allocated
                pursuant to this paragraph) required under this Agreement until the
                balance of such Term Loan Facilities is reduced to zero. Notwithstanding
                the foregoing, the sum of the Initial Excess Cash Flow Amount plus
                the
                Additional Excess Cash Flow Amount for the period commencing March
                1, 2006
                and ending June 30, 2006 shall not exceed an amount equal to fifty
                percent
                (50%) of the Borrower’s EBITDA for such
                period.”

            

    

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
      	
            	(h)	A
              new Section 2.15(e) is hereby added to the Loan Agreement in its
              appropriate sectional order to provide as
              follows:

    

    
       

    

    
      	 	
              “(e)
                If any Credit Party shall receives a refund of excise tax payments
                (the
                “Excise Tax Refund”) from the Internal Revenue Service or any other
                governmental authority, whether such Excise Tax Refund is collected
                by
                such Credit Party directly from the Internal Revenue Service or indirectly
                from Seller, Sammy Jibrin or Radu Archiriloaie or any other applicant,
                then such Credit Party shall promptly remit to Lender an amount equal
                to
                one hundred percent (100%) of the Excise Tax Refund for application
                to the
                Obligations as follows: first, to all then unpaid fees and expenses;
                second, to all accrued and unpaid interest on Term Loan B; third,
                to all
                accrued and unpaid interest on Term Loan A; fourth, to the principal
                payments outstanding under Term Loan B in the inverse order of maturities;
                fifth, to the principal payments outstanding under Term Loan A in
                the
                inverse order of maturities; and sixth, to the remaining Obligations
                in
                such order as Lender shall determine in its sole discretion; provided,
                however,
                that the reduction of the principal balance of the Term Loan Facilities
                shall not affect the amount or timing of principal payments (other
                than
                the extent to which reductions have been made with respect to such
                principal payments as allocated pursuant to this paragraph) required
                under
                this Agreement until the balance of such Term Loan Facilities is
                reduced
                to zero. Borrower agrees to execute such further documents, agreements,
                assignments or powers of attorney with respect to the Excise Tax
                Refund as
                Lender may deem appropriate in its sole
                discretion.”

            

    

    

    
      	
            	(i)	Section
              5.20(b) of the Loan Agreement is hereby amended by inserting the following
              sentence at the beginning of 

    

    
      	such
              Section 5.20(b) to provide as follows:

    

     

    
      	
            	(j)	“In
              determining which Inventory is Eligible Inventory, Lender may rely
              on all
              statements and representations
              made

    

    
      
        	by
                Borrower with respect to any
                Inventory.”

      

    

    
    

     

    
      	
            	(k)	Section
              7.6 is here by amended and restated in its entirety to read as
              follows:

    

      

    
      	 	
              “7.6
                Transactions with Affiliates

            
	 	 
	 	
              Borrower
                shall not enter into or consummate any transaction of any kind with
                any of
                its Affiliates or any Guarantor or any of their respective Affiliates
                other than the following payments, provided that no such payment
                shall be
                permitted if a Default or Event of Default has occurred and remains
                in
                effect or would be caused by or result from such payment: (i) salary,
                bonus, employee stock option and other compensation and employment
                arrangements with directors or officers in the ordinary course of
                business, (ii) Distributions and dividends permitted pursuant to
                Section
                7.5, (iii) transactions with Lender or any Affiliate of Lender, (iv)
                payments permitted under and pursuant to written agreements entered
                into
                by and between Borrower and one or more of its Affiliates that both
                (A) reflect and constitute transactions on overall terms at least as
                favorable to Borrower as would be the case in an arm’s-length transaction
                between unrelated parties of equal bargaining power, and (B) are
                subject
                to such terms and conditions as determined by Lender in its sole
                discretion; provided, that notwithstanding the foregoing Borrower
                shall
                not (Y) enter into or consummate any transaction or agreement pursuant
                to
                which it becomes a party to any mortgage, note, indenture or guarantee
                evidencing any Indebtedness of any of its Affiliates or otherwise
                to
                become responsible or liable, as a guarantor, surety or otherwise,
                pursuant to agreement for any Indebtedness of any such Affiliate,
                or (Z)
                make any payment to any of its Affiliates in excess of $10,000 without
                the
                prior written consent of Lender; and (v) Permitted Acquisition Payments
                and other payments contemplated under Schedule
                7.6.”

            

    

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	(l)	Section
                7.11 of the Loan Agreement is hereby amended in its entirety to read
                as
                follows:

      

      
         

      

    

    
      	 	
              “7.11.
                Payment
                on Permitted Subordinated Debt

            
	 	 
	 	
              Borrower
                shall not (i) make any prepayment of any part or all of any Permitted
                Subordinated Debt; provided,
                however,
                (A)
                Borrower shall be permitted to make regularly scheduled payments
                of
                interest on the Seller Note on a quarterly basis and at an annual
                interest
                rate of not greater than one percent (1%) subject to the terms and
                conditions of the Seller Subordination Agreement,
                (B) Borrower shall be permitted to make regularly scheduled payments
                of
                interest on the Additional Seller Note on a quarterly basis and at
                an
                annual interest rate of not greater than four percent (4%) subject
                to the
                terms and conditions of the Seller Subordination Agreement, (C) Borrower
                shall be permitted to make Permitted Principal Payments (as such
                term is
                defined in the Seller Subordination Agreement) on the Additional
                Seller
                Note on the terms and conditions set forth in the Seller Subordination
                Agreement and (D) upon the payment in full in cash of the Obligations
                relating to the Term Loan Facilities, Borrower may prepay, in whole
                or in
                part, the Seller Note and the Additional Seller Note; provided, further
                that in no event may Borrower make any payment or distribution on
                the
                Seller Note or the Additional Seller Note if before and after giving
                effect to such payment there exists an Event of Default, (ii) repurchase,
                redeem or retire any instrument evidencing any such Permitted Subordinated
                Debt prior to maturity, or (iii) enter into any agreement (oral or
                written) which could in any way be construed to amend, modify, alter
                or
                terminate any one or more instruments or agreements evidencing or
                relating
                to any Permitted Subordinated Debt in a manner adverse to Lender,
                as
                determined by Lender in its sole
                discretion.”

            

    

     

    
      
        	
              	(m)	Paragraphs
                1, 2, 3 and 4 of Annex 1 to the Loan Agreement are hereby amended
                in their
                entirety to read as follows:

      

        

    

    
      	 	
              “1)
                

            	
              Minimum
                EBITDA

            

    

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    Until
      the
      repayment in full in cash of the Term Loan Facilities, Borrower shall maintain
      for each Test Period set forth below EBITDA of not less than the amount set
      forth below opposite such period:

     

    

      
        	
                Period:

              	
                Minimum
                  EBITDA:

              
	
                For
                  the three (3) month period ending November 30, 2005

              	
                $1,150,000

              
	
                For
                  the four (4) month period ending December 31, 2005

              	
                $1,490,000

              
	
                For
                  the five (5) month period ending January 31, 2006

              	
                $1,830,000

              
	
                For
                  the six (6) month period ending February 28, 2006

              	
                $2,170,000

              
	
                For
                  the one (1) month period ending March 31, 2006

              	
                $500,000

              
	
                For
                  the two (2) month period ending April 30, 2006

              	
                $1,000,000

              
	
                For
                  the three (3) month period ending May 31, 2006

              	
                $1,500,000

              
	
                For
                  the four (4) month period ending June 30, 2006

              	
                $2,250,000

              
	
                For
                  the five (5) month period ending July 31, 2006

              	
                $3,000,000

              
	
                For
                  the six (6) month period ending August 31, 2006

              	
                $3,750,000

              
	
                For
                  the seven (7) month period ending September 30, 2006

              	
                $4,500,000

              
	
                For
                  the eight (8) month period ending October 31, 2006

              	
                $5,250,000

              
	
                For
                  the nine (9) month period ending November 30, 2006

              	
                $6,000,000

              
	
                For
                  the ten (10) month period ending December 31, 2006

              	
                $6,750,000

              
	
                For
                  the eleven (11) month period ending January 31, 2007 

              	
                $7,500,000

              
	
                For
                  the twelve (12) month period ending February 28, 2007 

              	
                $8,250,000

              
	
                For
                  the twelve (12) month period ending March 31, 2007 and for the
                  Test
                  Periods ending on each subsequent month thereafter

              	
                $9,000,000

              

      

    

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
    

    
      	 	
              2)

            	
              Fixed
                Charge Coverage Ratio (EBITDA/Fixed
                Charges)

            

    

    

    Borrower
      shall maintain (x) prior to the repayment in full in cash of the Term Loan
      Facilities for each Test Period set forth below a Fixed Charge Coverage Ratio
      of
      not less than the ratio set forth below opposite such period and (y) upon the
      repayment in full of the Term Loan Facilities and for the Test Periods ending
      on
      each subsequent month thereafter, a Fixed Charge Coverage Ratio of not less
      than
      1.2 to 1.0:

     

      

      
        
          	
                  Period:

                	
                  Fixed
                    Charge Coverage Ratio:

                
	
                  For
                    the three (3) month period ending November 30, 2005

                	
                  0.65
                    to 1.0

                
	
                  For
                    the four (4) month period ending December 31, 2005

                	
                  0.65
                    to 1.0

                
	
                  For
                    the five (5) month period ending January 31, 2006

                	
                  0.65
                    to 1.0

                
	
                  For
                    the six (6) month period ending February 28, 2006

                	
                  0.65
                    to 1.0

                
	
                  For
                    the one (1) month period ending March 31, 2006

                	
                  1.2
                    to 1.0

                
	
                  For
                    the two (2) month period ending April 30, 2006

                	
                  1.2
                    to 1.0

                
	
                  For
                    the three (3) month period ending May 31, 2006

                	
                  1.2
                    to 1.0

                
	
                  For
                    the four (4) month period ending June 30, 2006

                	
                  1.5
                    to 1.0

                
	
                  For
                    the five (5) month period ending July 31, 2006

                	
                  1.5
                    to 1.0

                
	
                  For
                    the six (6) month period ending August 31, 2006

                	
                  1.5
                    to 1.0

                
	
                  For
                    the seven (7) month period ending September 30, 2006

                	
                  1.5
                    to 1.0

                
	
                  For
                    the eight (8) month period ending October 31, 2006

                	
                  1.5
                    to 1.0

                
	
                  For
                    the nine (9) month period ending November 30, 2006

                	
                  1.5
                    to 1.0

                
	
                  For
                    the ten (10) month period ending December 31, 2006

                	
                  1.5
                    to 1.0

                
	
                  For
                    the eleven (11) month period ending January 31, 2007 

                	
                  1.5
                    to 1.0

                
	
                  For
                    the twelve (12) month period ending February 28, 2007 and for
                    the Test
                    Periods ending on each subsequent month thereafter until the
                    repayment in
                    full of the Term Loan Facilities

                	
                  1.5
                    to 1.0

                

        

      

    

    

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
    

    
      	 	
              3)

            	
              Minimum
                Liquidity and Working Capital

            

    

    

    Borrower
      shall at all times have Available Cash on hand of not less than $500,000 at
      all
      other times (the “Required Liquidity Amount”); provided,
      however,
      that
      payments made by or on behalf of Borrower prior to Closing, including without
      limitation, commitment fees paid to Lender and all out of pocket expenses in
      connection with this transaction (for the avoidance of doubt, such amounts
      shall
      include $150,000 paid by Farwell with respect to the Commitment Fee and $100,000
      paid by Farwell for expenses incurred in connection with the Closing) will
      reduce such Available Cash requirement on a dollar for dollar basis;
provided, further,
      that if
      Available Cash on hand is less than the Required Liquidity Amount at any time,
      Borrower shall be required to raise additional equity in an amount sufficient
      to
      restore Available Cash in the amount of the Required Liquidity Amount by not
      later than ten (10) calendar days after the occurrence of such breach and
      otherwise pursuant to documentation and terms satisfactory to
      Lender.

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
    

    
    

     

    
      	 	
              4)

            	
              Capital
                Expenditures and Operating Leases

            

    

    

    Borrower
      shall not permit its Capital Expenditures and amounts owed under operating
      leases, individually and collectively on a consolidated and consolidating basis,
      in the aggregate to exceed (i) $250,000 for the fiscal year ending August 31,
      2005, (ii) $400,000 for the fiscal year ending August 31, 2006 and (iii)
      $250,000 in any fiscal year thereafter.”

     

    
      
        	
              	(n)	Annex
                1 of the Loan Agreement is hereby further amended by amending the
                following defined terms in their entirety

      

      
        
          	to
                  read as follows:

        

      

    

     

    
      	 	
              “EBITDA”
                shall mean, for any Test Period, the sum, without duplication, of
                the
                following for Borrower, on a consolidated basis: Net Income determined
                in
                accordance with GAAP, plus, (a) Interest Expense, (b) taxes on
                income, whether paid, payable or accrued, (c) depreciation expense,
                (d) amortization expense, (e) all other non-cash, non-recurring charges
                and expenses, excluding accruals for cash expenses made in the ordinary
                course of business, and (f) loss from any sale of assets, other than
                sales
                in the ordinary course of business, all of the foregoing determined
                in
                accordance with GAAP, minus (a) gains from any sale of assets, other
                than
                sales in the ordinary course of business and (b) other extraordinary
                or
                non-recurring gains. For avoidance of doubt, any income recognized
                by
                Borrower in a given Test Period which represents the recovery or
                reversal
                of federal excise taxes paid in prior periods, shall be excluded
                from
                EBITDA for such Test Period. 

            
	 	 
	 	
              “Test
                Period”
                shall mean the twelve most recent calendar months then ended (taken
                as one
                accounting period), or such other period as specified in the Agreement
                or
                any Annex thereto; provided that for (i) the Test Period ended November
                30, 2005 shall mean the three month period then ended, (ii) the Test
                Period ended December 31, 2005 shall mean the four month period then
                ended, (iii) the Test Period ended January 31, 2006 shall mean the
                five
                month period then ended, (iv) the
                Test Period ended February 28, 2006 shall mean the six month period
                then
                ended, (v)
                the Test Period ended March 31, 2006 shall mean the one month period
                then
                ended, (vi) the Test Period ended April 30, 2006 shall mean the two
                month
                period then ended, (vii) the Test Period ended May 31, 2006 shall
                mean the
                three month period then ended, (viii) the Test Period ended June
                30, 2006
                shall mean the four month period then ended, (ix) the Test Period
                ended
                July 31, 2006 shall mean the five month period then ended, (x) the
                Test
                Period ended August 31, 2006 shall mean the six month period then
                ended,
                (xi) the Test Period ended September 30, 2006 shall mean the seven
                month
                period then ended, (xii) the Test Period ended October 31, 2006 shall
                mean
                the eight month period then ended, (xiii) the Test Period ended November
                30, 2006 shall mean the nine month period then ended, (xiv) the Test
                Period ended December 31, 2006 shall mean the ten month period then
                ended,
                (xv) the Test Period ended January 31, 2007 shall mean the eleven
                month
                period then ended and (xvi) the Test Period ended February 28, 2007
                shall
                mean the twelve month period then
                ended.

            

    

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    
    

    
      	 	
              “Total
                Debt Service”
                shall mean the sum of (i) all payments of principql on Indebtedness
                (including, without limitation, Permitted Principal Payments (as
                such term
                is defined in the Seller Subordination Agreement) with respect to
                the
                Additional Seller Note) and (ii) Interest Expense, in each case for
                such
                period.

            

    

     

    
      
        	
              	(o)	Appendix
                A to the Loan Agreement is hereby amended by amending the following
                defined terms to provided as

      

      
        
          	follows:

        

      

    

     

    
      	 	
              “Permitted
                Subordinated Debt”
                shall mean indebtedness with respect to the (i) Seller Note in the
                original aggregate principal amount of $2,500,000 and (ii) the Additional
                Seller Note in the original aggregate principal amount of
                $2,322,850.

            
	 	 
	 	
              “Term”
                shall mean the period commencing on the date set forth on the first
                page
                hereof and ending March 8, 2009.

            
	 	 
	 	
              “Minimum
                Termination Fee”
                shall mean (for the time period indicated) the amount equal to (i)
                $792,000 if the date of notice of such termination by Borrower is
                after
                the Closing Date but before March 8, 2007; (ii) $528,000 if the date
                of
                notice of such termination by Borrower is on or after March 8, 2007
                but
                before March 8, 2008 and (iii) $264,000 if the date of notice of
                such
                termination by Borrower is on or after March 8, 2008 but before March
                8,
                2009.

            

    

     

    
      
        	
              	(p)	Appendix
                A to the Loan Agreement is hereby amended by inserting the following
                defined terms in their appropriate

      

      
        
          	alphabetical
                  order to provide as follows:

        

      

    

      

    
      	 	
              “Additional
                Seller Note”
                shall mean that certain promissory note dated December 14, 2005 in
                the
                original principal amount of $2,322,850 executed by Borrower in favor
                of
                Seller, which Additional Seller Note shall provide for interest quarterly
                at four percent (4%) and shall otherwise be in form and substance
                satisfactory to Lender.

            
	 	 
	 	
              “Amendment
                No. 2”
                shall mean Waiver and Amendment No. 2 to Credit and Security Agreement
                dated as of March 8, 2006.

            
	 	 
	 	
              “Amendment
                No. 2 Effective Date”
                shall mean, February 28, 2006.

            
	 	 
	 	
              “Borrowing
                Base for Eligible Inventory”
                shall mean, as of any date of determination, the lesser
                of the cost (computed on a first in, first out basis in accordance
                with
                GAAP) or market value in U.S. Dollars of
                Eligible Inventory, as determined with reference to the most recent
                Borrowing Certificate and otherwise in accordance with this Agreement,
                but
                in no event in excess of eighty-five percent (85%) of the appraised
                net
                orderly liquidation value thereof, as determined by the most recent
                appraisal accepted by Lender; provided,
                however,
                that if as of such date the most recent Borrowing Certificate is
                of a date
                more than four Business Days before or after such date, the Borrowing
                Base
                shall be determined by Lender in its sole
                discretion.

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    
    

    
      	 	
              “Credit
                Parties”
                shall mean, collectively, Parent, Farwell, Borrower and any Guarantor,
                each individually a “Credit Party” and collectively the “Credit
                Parties”.

            
	 	 
	 	
              “Eligible
                Inventory”
                shall mean Borrower’s saleable finished goods Inventory consisting of
                BRAVO branded handsets and assembly units and is currently in existence
                at
                Borrower’s places of business for which Lender has received a Landlord
                Waiver and Consent and/or Mortgagee Waiver and Consent in form
                satisfactory to it and is saleable in the ordinary course of Borrower’s
                business and which Lender, in its sole discretion, deems Eligible
                Inventory unless one or more of the following applies which would
                eliminate such items or items of Inventory consisting of finished
                goods
                from being considered as Eligible Inventory:

            
	 	 
	 	
              (a)    such
                Inventory is not subject to a valid perfected first priority security
                interest in favor of the Lender; 

            
	 	 
	 	
              (b)   any
                consent, license, approval or authorization required to be obtained
                by
                Borrower in connection with the granting of a security interest under
                the
                Security Documents or in connection with the manufacture or sale
                of such
                Inventory has not been or was not duly obtained and is not in full
                force
                and effect;

            
	 	 
	 	
              (c)   any
                covenant, representation or warranty contained in this Agreement
                or in any
                other Loan Document with respect to such Inventory has been breached
                and
                remains uncured;

            
	 	 
	 	
              (d)    such
                Inventory is not owned by Borrower;

            
	 	 
	 	
              (e)    such
                Inventory does not comply, or was not manufactured in compliance,
                in all
                material respects, with all applicable requirements of all statutes,
                laws,
                rules, regulations, ordinances, codes, policies, rules of common
                law, and
                the like, now or hereafter in effect, of any Governmental Authority,
                including any judicial or administrative interpretations thereof,
                and any
                judicial or administrative orders, consents, decrees or judgments;
                

            

    

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
    

    
      	 	
              (f)    such
                Inventory does not, or at the time of its purchase from the vendor
                did
                not, constitute “inventory” under Article 9 of the UCC as then in effect
                in the jurisdiction whose law governs perfection of the security
                interest;

            
	 	 
	 	
              (g)    the
                Person for whose account such Inventory is being or was produced
                has
                commenced a voluntary case under any federal bankruptcy or state
                or
                federal insolvency laws or has made an assignment for the benefit
                of
                creditors, or if a decree or order for relief has been entered by
                a court
                having jurisdiction in respect of such Person in an involuntary case
                under
                any federal bankruptcy or state or federal insolvency laws, or if
                any
                other petition or application for relief under any federal bankruptcy
                or
                state or federal insolvency laws has been filed against such Person,
                or if
                such Person has failed, suspended business, ceased to be solvent,
                called a
                meeting of its creditors, or has consented to or suffered a receiver,
                trustee, liquidator or custodian to be appointed for it or for all
                or a
                significant portion of its assets or affairs; 

            
	 	 
	 	
              (h)    the
                transfer of Inventory to Borrower by vendor, supplier or other Person
                did
                not constitute a valid sale and transfer to Borrower of all right,
                title
                and interest of such Person in the inventory enforceable against
                all
                creditors of and purchasers from such person;

            
	 	 
	 	
              (i)    (A)
                Borrower is not the sole owner of all right, title and interest in
                and to
                such Inventory, (B) Borrower does not have a valid ownership interest
                therein free and clear of all Liens other than Liens granted under
                the
                Loan Documents, or (C) any offsets, defenses or counterclaims have
                been asserted or threatened in writing against such
                Inventory;

            
	 	 
	 	
              (j)    such
                Inventory is not in good working order or is damaged;

            
	 	 
	 	
              (k)    such
                Inventory is not located at a location which is owned by Borrower
                or
                subject to a Landlord Waiver and Consent;

            
	 	 
	 	
              (l)    such
                Inventory consists only of packing materials, displays, supplies,
                parts or
                other components or is returned, rejected, repossessed or discontinued
                product or Inventory;

            
	 	 
	 	
              (m)    such
                Inventory is subject to a bona fide dispute or is or has been classified
                as counterfeit or fraudulent; 

            
	 	 
	 	
              (n)    such
                Inventory has been sold, assigned, or otherwise encumbered by Borrower
                except pursuant to the Loan Documents;

            

    

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    
    

    
      	 	
              (o)    such
                Inventory is not associated with a documented purchase
                order;

            
	 	 
	 	
              (p)    such
                Inventory consists of equipment that Borrower offers for rental or
                that is
                being rented from the Borrower or equipment borrowed by Borrower
                or given
                to Borrower to serve as demonstration equipment;

            
	 	 
	 	
              (q)    such
                Inventory constitutes custom Inventory, private-label Inventory,
                raw
                materials in process, work-in-process, obsolete or unmerchantable
                Inventory, slow-moving, unsaleable, shop-worn, damaged or defective
                Inventory, Inventory allocated to current warranty assignments, Inventory
                that consists of spare parts or Inventory subject to a quality assurance
                hold; 

            
	 	 
	 	
              (r)    such
                Inventory is in transit;

            
	 	 
	 	
              (s)    such
                Inventory is (i) not in Borrower’s possession and control or (ii) outside
                the continental United States;

            
	 	 
	 	
              (t)    such
                Inventory otherwise is not satisfactory to the Lender, as determined
                in
                the sole discretion of the Lender; or

            
	 	 
	 	
              (u)    such
                Inventory is or has been utilized as demonstration
                models.

            
	 	 
	 	
              “Excise
                Tax Refund”
                shall have the meaning set forth in Section 2.15(e)
                hereof.

            
	 	 
	 	
              “Inventory
                Percentage”
                shall mean, from time to time, the lesser of (i) 50% of cost or (ii)
                85%
                of the appraised net orderly liquidation value.

            
	 	 
	 	
              “Laurus
                Loan”
                shall mean all indebtedness owed by Parent to Laurus.

            
	 	 
	 	
              “Permitted
                Acquisition Payments”
                shall have the meaning set forth in Section
                7.2.

            

    

     

    
      
        	
              	(q)	Schedule
                7.6
                to
                the Loan Agreement is hereby amended in its entirety to read as set
                forth
                on Schedule
                7.6

      

      
        
          	to
                  this Amendment.

        

      

    

     

    5.    Conditions
      of
      Effectiveness.

    This
      Amendment shall become effective upon Lender’s receipt of the following items in
      form and substance satisfactory to Lender and its counsel:

     

    
      
        	
              	(a)	four
                (4) copies of this Amendment duly executed by the
                Borrower;

      

      
         

      

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	(b)	an
                amendment fee equal to $25,000 which fee shall be non-refundable
                and fully
                earned on the Amendment No. 2 

      

      
        
          	Effective
                  Date and which amount shall be paid by Lender by charging Borrower’s
                  account with an Advance for such
                  amount;

        

      

    

     

    
      
        	
              	(c)	all
                fees, interest and expenses payable under Amendment No.1 and Amendment
                No.
                2;

      

       

    

    
      
        	
              	(d)	the
                Additional Seller Note, Amendment No. 1 to Seller Note Subordination
                and
                Intercreditor Agreement and copies

      

      
        
          	of
                  all documents, agreements and other instruments entered into or
                  otherwise
                  related to each transaction described above, each in form and substance
                  satisfactory to Lender

        

      

    

     

    
      
        	
              	(e)	Borrower
                shall pay all costs, fees and expenses of Lender (including the reasonable
                costs, fees and expenses of 

      

      
        
          	Lender’s
                  in-house and outside counsel, consultants and appraisers) incurred
                  by
                  Lender in connection with the negotiation, preparation and closing
                  of this
                  Amendment No. 2; and

        

      

    

     

    
      
        	
              	(f)	Such
                other certificates, instruments, documents and agreements as may
                be
                required by Lender or its counsel.

      

        

    

    6.    Additional
      Covenants.
      Borrower covenants and agrees as follows:

     

    
      
        	
              	(a)	By
                not later than March 15, 2006, Lender shall have received, all in
                form and
                substance satisfactory to Lender 

      

      
        
          	(i)
                  an amendment to the Seller Subordination Agreement executed by
                  F&L
                  L.L.P. with respect to additional subordinated debt in the sum
                  of
                  $2,322,850 (the “Additional Subordinated Note”) and other matters set
                  forth therein and (ii) copies of all documentation relating to
                  the
                  Additional Subordinated Note, including and amendment to the Additional
                  Subordinated Note to extend the maturity thereof to a date which
                  is
                  satisfactory to Lender. 

        

      

    

       

    
      
        	
              	(b)	Upon
                the repayment in full of the Laurus Loan, Parent shall promptly (but
                in no
                event later than two (2) Business 

      

      
        
          	Days
                  after the repayment of the Laurus Loan) execute and deliver to
                  Lender a
                  full recourse guaranty of the Obligations substantially as set
                  forth in
                  the amendment to the Parent Stock Pledge Agreement attached to
                  this
                  Amendment as Exhibit
                  6(b).

        

      

    

     

    7.    Representations
      and Warranties. 

     

    
      
        	
              	(a)	This
                Amendment and the Loan Agreement, as amended hereby, constitute legal,
                valid and binding obligations 

      

      
        
          	of
                  the Borrower and are enforceable against Borrower in accordance
                  with their
                  respective terms.

        

      

    

      

    
      
        	
              	(b)	Upon
                the effectiveness of this Amendment, Borrower hereby reaffirms all
                covenants, representations and 

      

      
        
          	warranties
                  made in the Loan Agreement and the other Loan Documents to which
                  it is a
                  party to the extent the same are not amended hereby and agree that
                  all
                  such covenants, representations and warranties shall be deemed
                  to have
                  been remade as of the effective date of this
                  Amendment.

        

      

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

      
        	
              	(c)	Except
                as otherwise provided herein, no Event of Default or Default has
                occurred
                and is continuing or would exist 

      

      
        	after giving effect to this
                Amendment.

      

    

     

    
      
        	
              	(d)	Borrower
                has no defense, counterclaim or offset with respect to the Loan Agreement
                or any other Loan Document 

      

      
        	to which it is a
                party.

      

    

     

    8.    Effect
      on the Loan
      Agreement.

     
      
      
        	
              	(a)	Upon
                the effectiveness of Sections
                4
                hereof, each reference in the Loan Agreement or any other Loan
                Document

      

    

    
      
        	to “this Agreement,” “hereunder,” “hereof,”
                “herein” or words of like import shall mean and be a reference to the Loan
                Agreement or the applicable Loan Documents as amended
                hereby.

      

    

      

    
      
        	
              	(b)	Except
                as specifically amended herein, the Loan Documents, shall remain
                in full
                force and effect, and are hereby 

      

      
        	ratified and
                confirmed.

      

    

     

    
      
        	
              	(c)	The
                execution, delivery and effectiveness of this Amendment shall not
                operate
                as a waiver of any right, power or

      

      
        	remedy of Lender, nor constitute
                a waiver of
                any provision of the Loan Agreement, or any other Loan
                Documents.

      

    

     

    9.    
Release. 
      Each Credit Party, both individually and on behalf of its Affiliates, hereby
      releases, remises, acquits and forever discharges Lender and its employees,
      agents, representatives, consultants, attorneys, fiduciaries, servants,
      officers, directors, partners, predecessors, successors and assigns, subsidiary
      corporations, parent corporations, and related corporate divisions (all of
      the
      foregoing hereinafter called the “Released Parties”), from any and all actions
      and causes of action, judgments, executions, suits, debts, claims, demands,
      obligations, damages and expenses of any and every character, known or unknown,
      direct and/or indirect, at law or in equity, of whatsoever kind or nature,
      for
      or because of any matter or things done, omitted or suffered to be done by
      any
      of the Released Parties prior to and including the date of execution hereof,
      and
      in any way directly or indirectly arising out of or in any way connected to
      the
      Loan Agreement, this Amendment and the other Loan Documents (all of the
      foregoing hereinafter called the “Released Matters”). Each Credit Party, both
      individually and on behalf of its Affiliates, acknowledges that the agreements
      in this Section are intended to be in full satisfaction of all or any alleged
      injuries or damages arising in connection with the Released Matters. Each Credit
      Party agrees to indemnify and hold harmless the Released Parties with respect
      to
      any action brought on behalf of any of its Affiliates with respect to any of
      the
      Released Matters.

     

    10.      Governing
      Law.  This Amendment shall be governed by and construed in accordance
      with the internal laws
      of
      the State of Maryland without giving effect to its choice of law provisions.
      Any
      judicial proceeding against Borrower with respect to the Obligations, any Loan
      Document (including this Amendment) or any related agreement may be brought
      in
      any federal or state court of competent jurisdiction located in the State of
      Maryland. Any judicial proceedings against Lender involving, directly or
      indirectly, the Obligations, any Loan Document or any related agreement shall
      be
      brought only in a federal or state court located in the State of Maryland.
      All
      parties acknowledge that they participated in the negotiation and drafting
      of
      this Agreement with the assistance of counsel and that, accordingly, no party
      shall move or petition a court construing this Agreement to construe it more
      stringently against one party than against any other.

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    11.     Headings. 
      Section headings in this Amendment are included herein for convenience of
      reference only and shall not constitute a part of this Amendment for any other
      purpose.

     

    12.     Counterparts;
      Facsimile. This Amendment may be executed by the parties hereto in one or
      more counterparts, each of which shall be deemed an original and all of which
      when taken together shall constitute one and the same agreement. Any signature
      delivered by a party by facsimile transmission shall be deemed to be an original
      signature hereto.

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, each of the parties has duly executed this Amendment No. 2
      as
      of the date first written above.

     

    
      	 	 	 
	 	CAPITALSOURCE
              FINANCE LLC
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
              

            
	 	Name: 
	 	Its:

    

     

    

    
      	 	 	 
	 	OBLIO
              TELECOM, INC.
	 
 	 
 	 
 
	 	By:  	/s/ David
              M. Marks
	 	
              

            
	 	Name: 
David
              M. Marks
	 	Its:  Chairman

    

     

    

    
      	 	 	 
	 	PINLESS,
              INC.
	 
 	 
 	 
 
	 	By:  	/s/ David
              M. Marks
	 	
              

            
	 	Name: 
David
              M. Marks
	 	Its:  Chairman

    

     

     

    ACKNOWLEDGE
      AND  AGREED:

    
      	  
	 TITAN
              GLOBAL HOLDINGS, INC.
	  
 
	By:  	/s/ David
              M. Marks
	 	
              

            
	 	Name: 
David
              M. Marks
	 	Title:  Chairman

    

     

     
      
      
        	  
	 FARWELL
                EQUITY PARTNERS, LLC
	  
 
	By:  	/s/ David
                M. Marks
	 	
                
 
	 	Name: 
David
                M. Marks
	 	Its:  Managing
                Member

      

    

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    Schedule
      7.6

    Transactions
      with Affiliates

     

    
      
        	 	
                1.

              	
                Up
                  to $27,500 per moh payable to Parent for overhead
                  allocation.

              
	 	
                2.

              	
                Up
                  to $25,000 per month to Parent in payment of a service fee (the
“Parent
                  Fee”), provided that no such payment of the Parent Fee shall be made
                  until
                  the payment in full of the Laurus Loan and the receipt by Lender
                  of a
                  written acknowledgement from Laurus that the Laurus Loan has been
                  paid in
                  full.

              
	 	
                3.

              	
                $10,000
                  per month payable to Kurt Jensen in connection with a month to
                  month
                  consulting agreement.

              
	 	
                4.

              	
                Salaries
                  and bonuses payable under employment agreements with Sammy Jibrin
                  and Radu
                  Archiriloaie as permitted under Section 7.6(i).

              
	 	
                5.

              	
                Dividend
                  and redemption payments on and any stock issues upon conversion
                  of, the
                  Series A Preferred Stock as permitted under Section
                  7.5.

              
	 	
                6.

              	
                Payments
                  under the Seller Note and the Additional Seller Note as permitted
                  by
                  Section 7.11 and the Seller Subordination
                  Agreement

              

      

    

    

       

      
        
          
          

        

        
          18AMENDMENT
        NO. 1

      TO

       

      SELLER
        NOTE SUBORDINATION AND

      INTERCREDITOR
        AGREEMENT

      

      This
        AMENDMENT NO. 1 (this “Amendment”) is entered into as of this 8th
        day of
        March, 2006 among CapitalSource Finance LLC (“Senior Lender”), F&L
        L.L.P. (f/k/a Oblio Telecom L.L.P.)
        (“Subordinated Lender” or “Holder of Subordinated Indebtedness”) and Oblio
        Telecom, Inc. (“Company”).

      

      WHEREAS,
        as an inducement for Senior Lender to provide or continue to provide a secured
        credit facility in favor of Company and its subsidiaries (“Borrower”),
        Subordinated Lender entered into the Seller Note Subordination and Intercreditor
        Agreement (as
        amended, restated, supplemented or otherwise modified from time to time,
        the
“Agreement”)
        dated as of August 12, 2005 to provide for the subordination of (i) Subordinated
        Lender’s right to receive payments on the Subordinated Indebtedness and (ii) the
        “Liens” in all assets of Company granted to Subordinated Lender to the “Liens”
in such assets of Company granted to Senior Lender;

       

      WHEREAS,
        Company incurred additional Subordinated Indebtedness payable to Subordinated
        Lender pursuant to the Additional Subordinated Note (as such term is defined
        in
        the Agreement); 

       

      WHEREAS,
        Senior Lender has agreed to waive certain events of default that have occurred
        under the Loan Agreement and to make certain amendments to the Loan Agreement
        pursuant to Waiver and Amendment No. 2 to Credit and Security Agreement dated
        as
        of March 8, 2006 (“Amendment No. 2”); 

       

      WHEREAS,
        to induce Senior Lender to enter into Amendment No. 2 and to provide or continue
        to provide the financial accommodations provided therein, Subordinated Lender
        has agreed to subordinate its right to payment under the Additional Subordinated
        Note and Senior Lender is willing to modify the Agreement to reflect the
        change
        in amount of Subordinated Indebtedness on the terms and conditions hereafter
        set
        forth.

       

      NOW,
        THEREFORE, for good and valuable consideration, the receipt and sufficiency
        of
        which are hereby acknowledged, the parties hereto agree as follows:

       

      1.         
        Definitions.
        All
        capitalized terms not otherwise defined herein shall have the meanings given
        to
        them in the Agreement.

       

      2.         
        Amendments
        to Agreement.
        The
        Agreement is hereby amended in its entirety to provide as follows:

       

           
        (a)             
Section
        1.1 of the Agreement is amended by amending the following defined terms to
        provide as follows:

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      “Subordinated
        Indebtedness”
shall
        mean all principal, interest and other amounts payable or chargeable in
        connection with the Subordinated Note and all other obligations of any kind
        owed
        by Borrower to Subordinated Lender.

      

      “Subordinated
        Note”
shall
        mean collectively, (i) the Initial Subordinated Note and (ii) the Additional
        Subordinated Note.

      

      (b)  
Section
        1.1 of the Agreement is amended by inserting the following defined terms
        in
        their appropriate alphabetical order:

       

      “Additional
        Subordinated Note”
shall
        mean, that certain promissory note in the original principal amount of
$2,322,850
        dated as
        of December 14, 2005 between Company and Subordinated Lender.

      

      “Permitted
        Principal Payment”
shall
        have the meaning set forth in Section 2.1(iii) of this Agreement.

       

      “Permitted
        Principal Payment Amount”
shall
        mean,
        for
        any Test Period, commencing with the Test Period ending June 30, 2006 and
        for
        each Test Period thereafter, the lesser of: (x) the amount by which the
        Company’s EBITDA for the Test Period divided by 1.5, exceeds the Company’s Fixed
        Charges for such Test Period, or (y) the amount by which the Company’s EBITDA
        for the Test Period exceeds the minimum EBITDA amount required in paragraph
        1 of
        Annex I of the Loan Agreement for such Test Period. The amount of any principal
        payments previously made to Subordinated Lender under Section 2.1(iii) of
        this
        Agreement shall be considered a Fixed Charge for purposes of computing the
        Permitted Principal Payment Amount for each subsequent Test Period.

      

      “Permitted
        Principal Payment Certificate”
shall
        mean a certificate of the Company’s chief financial officer in form and
        substance satisfactory
        to Senior Lender in its sole discretion (A) stating that such person has
        reviewed the relevant terms of the Loan Documents and the condition of the
        Company, (B) stating that no Default or Event of Default has occurred or
        is
        continuing, and (C) setting forth the Permitted Principal Payment Amount,
        accompanied by detailed calculations thereof, in a form satisfactory to
        Lender.

      

      “Initial
        Subordinated Note”
shall
        mean, the Note and Security Agreement in the original principal amount of
        $2,500,000 dated as of August 12, 2005 between Company and Subordinated
        Lender.

      

      (c)  
Section
        2.1 of the Agreement is amended in its entirety to provide as
        follows:

       

      “Section
        2.1. Payments.
        Company
        shall make no Distribution on the Subordinated Indebtedness until such time
        as
        the Senior Indebtedness shall have been paid in full in cash and the Loan
        Agreement shall have been irrevocably terminated; provided,
        however,
        so long
        as no Default or Event of Default shall have occurred under the Senior Lending
        Agreements or would occur after giving effect to such payment: 

      

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      	(i)  	
              Company
                may pay, and the Subordinated Lender may receive and retain, regularly
                scheduled quarterly payments of interest on the Initial Subordinated
                Note
                at a rate not to exceed one percent (1%) per annum;

            

      

      	(ii)  	
              Company
                may pay, and the Subordinated Lender may receive and retain, regularly
                scheduled quarterly payments of interest on the Additional Subordinated
                Note at a rate not to exceed four percent (4%) per
                annum;

            

      

      	(iii)  	
              Company
                may pay, and the Subordinated Lender may receive and retain, payments
                of
                principal on the Additional Subordinated Note (a “Permitted Principal
                Payment”) in an amount not to exceed the
                Permitted Principal Payment Amount for the Test Period ended immediately
                prior to the date of such proposed principal payment. No
                Permitted Principal Payment shall be made earlier than the receipt
                by
                Senior Lender of the Company’s monthly financial statements required under
                and prepared in accordance with Section 6.1(a) of the Loan Agreement
                for
                the Test Period ending immediately prior to such proposed Permitted
                Principal Payment, accompanied by a Permitted Principal Payment
                Certificate;
                and

            

      

      	(iv)  	
              Company
                may prepay the principal on the Initial Subordinated Note and the
                Additional Subordinated Note (in whole or in part) after the payment
                in
                full in cash of all Senior Indebtedness with respect to the Term
                Loan
                Facilities.”

            

      

      3.            
        Representations
        and Warranties.
        Company
        and Subordinated Lender hereby represents and warrants as follows:

       

      (a)  This
        Amendment and the Agreement, as amended hereby, constitute legal, valid and
        binding obligations of Company and Subordinated Lender and are enforceable
        against Company and Subordinated Lender in accordance with their respective
        terms.

       

      (b)  Upon
        the
        effectiveness of this Amendment, Company and Subordinated Lender hereby
        reaffirms all covenants, representations and warranties made in the Agreement
        as
        amended hereby and agrees that all such covenants, representations and
        warranties shall be deemed to have been remade as of the effective date of
        this
        Amendment.

       

      (c)  No
        Event
        of Default or Default has occurred and is continuing or would exist after
        giving
        effect to this Amendment.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      (d)  Company
        and Subordinated Lender have no defense, counterclaim or offset with respect
        to
        the Agreement.

       

      4.  
Effect
        on the Agreement.

       

      (a) Upon
        the
        effectiveness of Section 2 hereof, each reference in the Agreement to “this
        Agreement,” “hereunder,” “hereof,” “herein” or words of like import shall mean
        and be a reference to the Agreement as amended hereby.

      

      (b) Except
        as
        specifically amended herein, the Agreement, and all other documents, instruments
        and agreements executed and/or delivered in connection therewith, shall remain
        in full force and effect, and are hereby ratified and confirmed.

      

      (c) The
        execution, delivery and effectiveness of this Amendment shall not operate
        as a
        waiver of any right, power or remedy of Senior Lender, nor constitute a waiver
        of any provision of the Agreement, or any other documents, instruments or
        agreements executed and/or delivered under or in connection
        therewith.

      

      5.  
Governing
        Law.
        This
        Amendment shall be binding upon and inure to the benefit of the parties hereto
        and their respective successors and assigns and shall be governed by and
        construed in accordance with the laws of the State of Maryland, without regard
        to any conflicts of laws principles thereto that would call for the application
        of the laws of any other jurisdiction.

       

      6.  
Headings.
        Section
        headings in this Amendment are included herein for convenience of reference
        only
        and shall not constitute a part of this Amendment for any other
        purpose.

       

      7.  
Counterparts;
        Facsimile.
        This
        Amendment may be executed by the parties hereto in one or more counterparts,
        each of which shall be deemed an original and all of which when taken together
        shall constitute one and the same agreement. Any signature delivered by a
        party
        by facsimile transmission shall be deemed to be an original signature
        hereto.

      

      [remainder
        of page intentionally left blank]

    

    
 

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be
      executed and delivered by its duly authorized officer as of the date first
      set
      forth above.

     

    
      
        	 	 	 
	 	
                CAPITALSOURCE
                  FINANCE LLC, as
                  Senior Lender

              
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
                

              
	 	Name
	 	Title 

      

    
      	 	 	 
	 	F&L
              L.L.P. (f/k/a Oblio Telecom L.L.P.),
              as Subordinated Lender
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
              

            
	 	Name
	 	Title

    

     

    
      
        	 	 	 
	 	
                OBLIO
                  TELECOM INC., as
                  Company

              
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
                

              
	 	Name
	 	Title

      

    

     

     

    
      	   
	 ACKNOWLEDGED
              AND
              AGREED:
	 
  
  
 
	
              By:  

            	/s/ Sammy
              Jibrin
	 	
              

            
	 	Sammy
              Jibrin 

    

     

    
      
        	   
	
                By:  

              	/s/ Radu
                Archiriloaie
	 	
                

              
	 	Radu
                Archiriloaie

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