Document:

Exhibit 10.18 

WAIVER AND AMENDMENT NO. 7 TO

LOAN AND SECURITY AGREEMENT

          This
WAIVER AND AMENDMENT NO. 7 TO LOAN AND SECURITY AGREEMENT is dated as of September 8, 2009 (this “Agreement”),
and is entered into by and between Wave2Wave Communications, Inc., a Delaware
Corporation (“Borrower Representative”), and Wilmington Trust Company and George Jeff
Mennen as co-trustees U/A/D November 25, 1970, as amended for the benefit of
John Henry Mennen (the “Mennen Trust”).

WHEREAS:

          A.
The Borrower Representative, the Mennen Trust and Greystone Funding
Corporation, a Virginia corporation and successor in interest to Greystone
Business Credit II, L.L.C. (“Greystone”), are parties to that certain
Loan and Security Agreement dated as of October 12, 2007 (as amended
heretofore, as amended by this Agreement and as further amended, restated,
supplemented or otherwise modified, renewed or replaced from time to time, the “Loan
Agreement”), pursuant to which Greystone agreed, subject to the terms and
conditions thereof, to extend credit and make certain other financial
accommodations available to the Borrower Representative and the Mennen Trust,
each in their capacity as a “Borrower” thereunder.

          B.
The Mennen Trust and Greystone are parties to that certain Assignment and
Acceptance Agreement dated as of March 18, 2009, pursuant to which (i)
Greystone irrevocably sold and assigned to the Mennen Trust, and the Mennen
Trust irrevocably purchased and assumed from Greystone, one hundred percent of
Greystone’s rights and obligations under the Loan Agreement and the other Loan
Documents, including, without limitation, one hundred percent of Greystone’s
rights in and to the Obligations, and (ii) the Mennen Trust became the “Lender”
under the Loan Agreement and the other Loan Documents as the successor in
interest to Greystone.

          C.
Various defaults and events of default currently exist under the Loan Agreement
and the other Loan Documents (including but not limited to various “Events of
Default,” as such term is defined in the Loan Agreement and used generally in
the Loan Documents; collectively, the “Existing Defaults”).

          D.
The Borrower Representative, RNK and Greystone Business Credit II, L.L.C. (the “Revolving
Lender”) are parties to that certain Loan and Security Agreement dated as
of January 25, 2008 (as amended, restated, supplemented or otherwise modified
from time to time, the “Revolving Loan Agreement”). Prior to the date
hereof, an Event of Default (as defined in the Revolving Loan Agreement) had occurred
under the Revolving Loan Agreement and, in connection with the Revolving Lender
entering into a forbearance agreement with the Borrower Representative and RNK,
on or about January 25, 2008, the Mennen Trust (in its capacity, as of the date
thereof, as a guarantor of the Borrower Representative’s and RNK’s obligations
under the Revolving Loan Agreement and the other Revolving Loan Documents) paid
the Revolving Lender $3,500,000 (the “Payment Amount”), which amount
represented, and was applied to, principal and accrued but unpaid interest and
fees under the Revolving Loan Agreement and the

1

other
Revolving Loan Documents. The Mennen Trust is subrogated to the rights of the
Revolving Lender to the extent of the Payment Amount, including the right to be
paid interest at the rates, at the time, and in accordance with the terms,
covenants and conditions set forth in the Revolving Loan Agreement.

          E.
The Borrower Representative, the subsidiaries of the Borrower Representative
from time to time party thereto as guarantors, the lenders from time to time
party thereto (the “Senior Lenders”), and Victory Park Management, LLC,
a Delaware limited liability company, as agent (the “Agent”), are party
to that certain Financing Agreement dated as of the date hereof (the “Bridge
Loan Agreement”), pursuant to which the Senior Lenders have agreed, subject
to the terms and conditions set forth therein, to provide a $9,300,000 original
principal amount secured term loan to the Borrower Representative (the “Bridge
Loan Indebtedness”). A portion of the proceeds from the Bridge Loan
Indebtedness shall be used to pay all of the outstanding obligations of the
Borrower Representative and its affiliates under the Revolving Loan Agreement
and the Revolving Loan Documents.

          F.
The Borrower Representative has requested that the Mennen Trust, in its
capacity as the Lender, waive the Existing Defaults, grant its consent to the
Borrower Representative incurring the Bridge Loan Indebtedness, and effect
certain amendments to the Loan Agreement, including, without limitation, to
provide that the Payment Amount shall be deemed an “Term Loan Advance” and a
“Term Loan” under the Loan Agreement so as to preserve and recognize, upon the
payment of all of the outstanding obligations of the Borrower Representative
and its affiliates under the Revolving Loan Agreement and the Revolving Loan
Documents, the Mennen Trust’s rights as subrogee and acknowledge that the
Borrower Representative’s and RNK’s obligations with respect to the Payment
Amount are secured by a continuing lien on and security interest in the
Collateral. The Lender is willing to grant the requested waiver and consent,
and effect the amendments to the Loan Agreement requested by Borrower
Representative, on the terms and conditions hereinafter set forth.

          NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties signatory hereto
agree as follows:

          1.
Definitions. Capitalized terms not otherwise defined herein shall have
the respective meanings given such terms in the Loan Agreement.

          2.
Waiver. Subject to the satisfaction of the conditions precedent set
forth in Section 6 hereof, the Lender hereby waives the Existing Defaults. The
Borrower Representative acknowledges and agrees that the foregoing provisions
of this Section 2 relate solely to the Existing Defaults and shall in no way be
deemed or construed as a waiver by the Lender of any Event of Default under the
Loan Agreement or any of the other Loan Documents occurring subsequent to the
date of this Agreement. The Lender expressly reserves the full extent of their
rights under the Loan Agreement, the other Loan Documents and applicable law in
respect of any subsequent Event of Default occurring after the date hereof and
not specified herein as one of the Existing Defaults.

2

          3.
Consent. Subject to the satisfaction of the conditions precedent
set forth in Section 6 hereof, and notwithstanding anything to the contrary in
the Loan Agreement and the other Loan Documents, the Lender hereby consents in
all respects to the execution, delivery and performance of the Bridge Loan
Agreement and the Bridge Loan Documents, including the incurrence of
indebtedness and liens thereunder.

          4.
Amendments to Loan Agreement.

                    (a)
Notwithstanding anything to the contrary in the Loan Agreement and the other
Loan Documents, the Borrower Representative and the Lender agree that, as of
the March 18, 2009, the Mennen Trust shall not be deemed a “Borrower” under the
Loan Agreement and the other Loan Documents and that all references in the Loan
Agreement and the other Loan Documents to “Borrower” or “Borrowers” therein
shall solely mean Wave2Wave. In accordance with the foregoing, any
representation, warranty or covenant set forth in the Loan Agreement or any
other Loan Document and applicable to the Mennen Trust solely in its capacity
as a Borrower and not as a Lender thereunder shall be of no further force and
effect solely with respect to the Mennen Trust, and the Lender hereby
acknowledges and agrees that all security interests and other liens granted to
or held by the Lender as security for the indebtedness of the Mennen Trust
under the Loan Agreement shall be released and discharged and all other
obligations of the Mennen Trust, solely in its capacity as a Borrower and not
as a Lender, under the Loan Agreement or any other Loan Document shall be
released and discharged.

                    (b)
The Loan Agreement is hereby amended by deleting the legend appearing
immediately before the title on the first page of the Loan Agreement and
inserting the following legend in lieu thereof:

	
  

 	
  

 	
  

 
	
  

 	
 “THIS
 INSTRUMENT AND THE RIGHTS, REMEDIES AND OBLIGATIONS EVIDENCED HEREBY ARE
 SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
 AFFILIATE SUBORDINATION AGREEMENT (AS AMENDED, RESTATED, SUPPLEMENTED OR
 OTHERWISE MODIFIED FROM TIME TO TIME, THE “SUBORDINATION AGREEMENT”) DATED AS
 OF SEPTEMBER 8, 2009, BY AND AMONG, INTER ALIA, THE WILMINGTON TRUST COMPANY AND GEORGE
 JEFF MENNEN AS CO-TRUSTEES U/A/D NOVEMBER 25, 1970, AS AMENDED FOR THE
 BENEFIT OF JOHN HENRY MENNEN, SUCCESSOR IN INTEREST TO GREYSTONE FUNDING
 CORPORATION, WAVE2WAVE COMMUNICATIONS, INC., A DELAWARE CORPORATION, AND
 VICTORY PARK MANAGEMENT, LLC, A DELAWARE LIMITED LIABILITY COMPANY, AS AGENT
 FOR ALL SENIOR CREDITORS (AS DEFINED IN THE SUBORDINATION AGREEMENT); AND EACH
 HOLDER OF THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF, IRREVOCABLY AGREES TO BE
 BOUND BY THE PROVISIONS OF THE SUBORDINATION AGREEMENT.”

 	
  

 

                    (c)
The Loan Agreement is hereby amended by adding a new Section 1.3 thereto as
follows:

	
  

 	
  

 
	
  

 	
           “1.3
 Subrogee Loan. The Subrogee Loan shall be deemed a
 “Term Loan Advance” and a “Term Loan” hereunder, shall be included in the
 “Obligations” and shall

 

3

	
  

 	
  

 
	
  

 	
 be secured by a continuing
 lien on and security interest in the Collateral. The Subrogee Loan will be
 evidenced by a term note in the form attached hereto as Exhibit D.

 

                    (d)
Section 3.1(a) of the
Loan Agreement is hereby amended and restated in its entirety as follows: “[Intentionally Omitted]”.

                    (e)
Section 5.20(v)(B) of the Loan Agreement is hereby amended by deleting the
reference to “the Revolving Loan Documents” and inserting in lieu thereof the
following: “the Bridge Loan Documents”.

                    (f)
Schedule A to the Loan Agreement shall be amended by deleting the reference to
“$34,000,000 on and after the date hereof until the Second Advance Date and, on
and after the Second Advance Date, $35,700,000” in Section 2(a) thereof and
replacing such reference with “$39,200,000”.

                    (g)
Schedule B to the Loan Agreement is hereby amended by amending and restating
the following definitions in their entirety as follows:

	
  

 	
  

 
	
  

 	
           “Intercreditor
 Agreement” means
 that certain Subordination and Intercreditor Agreement dated as of September
 8, 2009, by and among by and among The Wilmington Trust Company and George
 Jeff Mennen as Co-Trustees U/A/D November 25, 1970, as amended for the
 benefit of John Henry Mennen, as successor in interest to Greystone Funding
 Corporation solely in its capacity as Lender, Wave2Wave, and Victory Park
 Management, LLC, a Delaware limited liability company, as agent, as amended,
 restated, supplemented or otherwise modified from time to time.

 

                    (h)
Schedule B of the Loan Agreement is hereby amended by deleting the reference to
“the Revolving Loan Documents” appearing in clause (iv) of the definition of
“Permitted Debt” and inserting in lieu thereof the following: “the Bridge Loan
Documents”.

                    (i) Schedule B of the Loan Agreement is hereby amended by deleting the
reference to “the Revolving Loan Documents” appearing in clause (xii) of the
definition of “Permitted Liens” and inserting in lieu thereof the following:
“the Bridge Loan Documents”.

                    (j)
Schedule B to the Loan Agreement is hereby amended by adding the following new
definitions thereto in the appropriate alphabetical order:

	
  

 	
  

 
	
  

 	
           “Bridge
 Loan Agreement” means that certain Financing Agreement dated as of September 8, 2009,
 by and among Wave2Wave, the subsidiaries of Wave2Wave from time to time party
 thereto as guarantors, the lenders from time to time party thereto, and
 Victory Park Management, LLC, a Delaware limited liability company, as agent,
 as amended, restated, supplemented or otherwise modified from time to time.

 
	
  

 	
  

 
	
  

 	
           “Bridge
 Loan Documents” means the Bridge Loan Agreement and each agreement, document or
 instrument executed in connection therewith, in each case as amended,
 restated, supplemented or otherwise modified from time to time.

 

4

	
  

 	
  

 
	
  

 	
           “Revolving
 Lender” shall
 mean Greystone Business Credit II, L.L.C.

 
	
  

 	
  

 
	
  

 	
           “Subrogee
 Loan” means
 the $3,500,000 paid by the Mennen Trust (in its capacity as a guarantor of
 the Borrower Representative’s and RNK’s obligations under the Revolving Loan
 Agreement and the other Revolving Loan Documents) to the Revolving Lender on
 or about January 25, 2008, in connection with the Revolving Lender entering
 into a forbearance agreement with the Borrower Representative and RNK, which
 amount represented, and was applied to, principal and accrued but unpaid
 interest and fees under the Revolving Loan Agreement and the other Revolving
 Loan Documents, and with respect to such amount the Mennen Trust is
 subrogated to the rights of the Revolving Lender, including the right to be
 paid interest at the rates, at the time, and in accordance with the terms,
 covenants and conditions set forth in the Revolving Loan Agreement.

 

                    (k)
Exhibit A (Term Note) to the Loan Agreement is hereby amended by
deleting such Exhibit A in its entirety and inserting in lieu thereof Exhibit
A attached hereto.

                    (l)
The Loan Agreement is hereby amended by adding a new Exhibit D (Subrogee
Note) in the form of Exhibit B attached hereto.

          5.
Representations and Warranties. Borrower Representative represents and
warrants to the Lender that:

                    (a)
The representations and warranties set forth in the Loan Agreement and in each
of the other Loan Documents are true and correct on the date hereof, as if made
on and as of the date hereof and as if each reference therein to “this
Agreement” or the “Loan Agreement” or the like includes reference to this
Agreement and the Loan Agreement as amended hereby (except to the extent that
such representations and warranties expressly relate to an earlier date, in
which case they are true and correct as of such earlier date);

                    (b)
The execution, delivery, and performance of this Agreement and of the Loan
Agreement and the other Loan Documents are within such Borrower
Representative’s corporate power, have been duly authorized by all necessary
corporate action, and are not in contravention of any law, rule, or regulation,
or any order, judgment, decree, writ or injunction, or award of any arbitrator,
court, or governmental body, or of the terms of its charter, bylaws or other
operative or formative documents, or of any contract or undertaking to which it
is a party or by which any of its properties may be bound or affected;

                    (c)
This Agreement and the Loan Agreement and the other Loan Documents constitute
the Borrower Representative’s legal, valid, and binding obligation, enforceable
against the Borrower Representative in accordance with their respective terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, or similar laws relating to or limiting creditors’ rights
generally; and

                    (d)
This Agreement has been duly executed and delivered by the Borrower
Representative.

5

          6.
Conditions Precedent. The satisfaction of each of the following,
unless waived or deferred in writing by the Lender, shall constitute conditions
precedent to the effectiveness of this Agreement and each provision hereof:

                    (a)
The Lender shall have received the following, each of which shall be reasonably
satisfactory to the Agent in form and substance:

	
  

 	
  

 
	
  

 	
                     (i)
 This Agreement, duly executed by the Borrower Representative and the Lender;

 
	
  

 	
  

 
	
  

 	
                     (ii)
 the Amended and Restated Term Notes, substantially in the form attached
 hereto as Exhibit A, duly executed and delivered by Borrower;

 
	
  

 	
  

 
	
  

 	
                     (iii)
 the Subrogee Note, substantially in the form attached hereto as Exhibit B, duly executed and delivered by Borrower
 and RNK;

 
	
  

 	
  

 
	
  

 	
                     (iv)
 Evidence that the Borrower Representative shall have received cash
 consideration (after the payment of any transaction expenses payable at the
 closing of the transactions contemplated by the Bridge Loan Agreement) of at
 least $9,300,000, representing proceeds of the Bridge Loan Indebtedness, and
 executed copies of all documentation with respect thereto, including without
 limitation the Bridge Loan Agreement and all schedules and exhibits thereto,
 and evidence that the Borrower Representative has used a portion of such
 proceeds in an amount equal to $3,395,888.80 to pay all of the outstanding
 obligations of the Borrower Representative and its affiliates under the
 Revolving Loan Agreement and the Revolving Loan Documents;

 
	
  

 	
  

 
	
  

 	
                     (v)
 All fees and other amounts due and payable on or prior to the date hereof,
 including, to the extent invoiced, reimbursement or payment of all reasonable
 out-of-pocket expenses (including, without limitation, reasonable fees and
 expenses of Choate, Hall & Stewart LLP, counsel to the Lender) required
 to be reimbursed or paid by the Borrower pursuant to the terms of the Loan
 Agreement;

 
	
  

 	
  

 
	
  

 	
                     (vi)
 All necessary consents and approvals (other than the Regulatory Consent (as
 defined in the Bridge Loan Agreement)) with respect to the consummation of
 the transactions contemplated by the Bridge Loan Agreement and this
 Agreement; and

 
	
  

 	
  

 
	
  

 	
                     (vii)
 Such other documents relating to the transactions contemplated hereby as the
 Lender may reasonably request.

 

                    (b)
All orders, permissions, consents, approvals, licenses, authorizations and
validations of, and filings, recordings and registrations with, and exemptions
by, any governmental body, or any other Person required to authorize or
otherwise required in connection with the execution, delivery and performance
by the Borrower Representative of this Agreement and the transactions
contemplated, shall have been obtained and shall be in full force and effect.

6

          7.
Effect on Loan Documents. The Loan Agreement and the other Loan
Documents shall be and remain in full force and effect in accordance with their
terms and hereby are ratified and confirmed by the Borrower Representative in
all respects. Except as expressly set forth herein, the execution, delivery,
and performance of this Agreement shall not operate as a waiver of any right,
power, or remedy of the Lender under the Loan Agreement or the other Loan
Documents, as in effect prior to the date hereof. The Borrower Representative
hereby ratifies and confirms in all respects all of its obligations and any
prior grant of a security interest under the Loan Agreement and the other Loan
Documents.

          8.
Further Assurances. The Borrower Representative shall execute and
deliver all agreements, documents and instruments, each in form and substance
satisfactory to the Lender, and take all actions as the Lender may reasonably
request from time to time, to perfect and maintain the perfection and priority
of the security interest in the Collateral and to fully consummate the
transactions contemplated under this Agreement and the Loan Agreement, as
modified hereby.

          9.
No Novation; Entire Agreement. This Agreement is not a novation or
discharge of the terms and provisions of the obligations of the Borrower under
the Loan Agreement and the other Loan Documents. There are no other
understandings, express or implied, among the Borrower and the Lender regarding
the subject matter hereof or thereof

          10.
Release. In consideration of the agreements of Lender contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Borrower Representative, on behalf of itself
and its successors, assigns, and other legal representatives, hereby
absolutely, unconditionally and irrevocably releases, remises and forever
discharges Lender and its successors and assigns, and its present and former
shareholders, Affiliates, trustees, subsidiaries, divisions, predecessors,
directors, officers, attorneys, employees, agents and other representatives
(Lender and all such other Persons being hereinafter referred to collectively
as the “Releasees” and individually as a “Releasee”), of and from all demands,
actions, causes of action, suits, covenants, contracts, controversies,
agreements, promises, sums of money, accounts, bills, reckonings, damages and
any and all other claims, counterclaims, defenses, rights of set-off, demands
and liabilities whatsoever (individually, a “Claim” and collectively, “Claims”)
of every name and nature, known or unknown, suspected or unsuspected, both at
law and in equity, which the Borrower Representative or any of its successors,
assigns or other legal representatives may now or hereafter own, hold, have or
claim to have against the Releasees or any of them for, upon, or by reason of
any circumstance, action, cause or thing whatsoever which arises at any time on
or prior to the day and date of this Agreement, including, without limitation,
for or on account of, or in relation to, or in any way in connection with any
of the Loan Agreement, or any of the other Loan Documents or transactions
thereunder or related thereto. The Borrower Representative understands,
acknowledges and agrees that the release set forth above may be pleaded as a
full and complete defense and may be used as a basis for an injunction against
any action, suit or other proceeding which may be instituted, prosecuted or
attempted in breach of the provisions of such release. The Borrower
Representative agrees that no fact, event, circumstance, evidence or
transaction which could now be asserted or which may hereafter be discovered shall
affect in any manner the final, absolute and unconditional nature of the
release set forth herein.

7

          11.
Choice of Law.
The validity of this Agreement, its construction, interpretation and
enforcement, and the rights of the parties hereunder, shall be determined
under, governed by, and construed in accordance with, the laws of the State of
New York.

          12.
Counterparts; Facsimile Execution. This Agreement may be executed in any number
of counterparts and by different parties and separate counterparts, each of
which when so executed and delivered shall be deemed an original, and all of
which, when taken together, shall constitute one and the same instrument.
Delivery of an executed counterpart of a signature page to this Agreement by facsimile
shall be as effective as delivery of a manually executed counterpart of this
Agreement. Any party delivering an executed counterpart of this Agreement by
facsimile also shall deliver a manually executed counterpart of this Agreement
but the failure to deliver a manually executed counterpart shall not affect the
validity, enforceability, and binding effect of this Agreement.

          13.
Construction.
This Agreement and the Loan Agreement shall be construed collectively and in
the event that any term, provision or condition of any of such documents is
inconsistent with or contradictory to any term, provision or condition of any
other such document, the terms, provisions and conditions of this Agreement
shall supersede and control the terms, provisions and conditions of the Loan
Agreement. Upon and after the effectiveness of this, Agreement, each reference in the Loan
Agreement to “this Agreement”, “hereunder”, “herein”, “hereof’ or words of like
import referring to the Loan Agreement, and each reference in the other Loan
Documents to “the Loan Agreement”, “thereunder”, “therein”, “thereof’ or words
of like import referring to the Loan Agreement, shall mean and be a reference
to the Loan Agreement as modified hereby.

 [Remainder of page intentionally left blank;
signature pages follow.]

8

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

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 BORROWER REPRESENTATIVE:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 WAVE2WAVE
 COMMUNICATIONS, INC.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Steven
 Asman

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Name: Steven
 Asman

 
	
  

 	
  

 	
 Title:
 President

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 LENDER:

 
	
  

 	
  

 
	
  

 	
 Wilmington
 Trust Company and George Jeff

 
	
  

 	
 Mennen as
 Co-Trustees U/A/D November 25, 1970,

 
	
  

 	
 as Amended
 for the Benefit of John Henry Mennen

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ George
 Jeff Mennen

 
	
  

 	
  

 	
 George Jeff
 Mennen, Co-Trustee U/A/D

 
	
  

 	
  

 	
 November 25,
 1970, as amended for the

 
	
  

 	
  

 	
 benefit of
 John Henry Mennen

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 Wilmington
 Trust Company, Co-Trustee

 
	
  

 	
  

 	
 U/A/D
 November 25, 1970, as amended for

 
	
  

 	
  

 	
 the benefit
 of John Henry Mennen

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By:

 	
 /s/ Mark A.
 Oller

 
	
  

 	
  

 	
  

 	
 Name: Mark
 A. Oller

 
	
  

 	
  

 	
  

 	
 Title: Vice
 President

 

[Signature Page to Amendment No. 7]

          CONSENT AND REAFFIRMATION 

          Each
of the undersigned (each a “Guarantor” and collectively the “Guarantors”)
hereby (i) acknowledge
receipt of a copy of the foregoing Waiver and Amendment No. 7 to Loan and
Security Agreement (the “Amendment”) between Wave2Wave Communications, Inc., a
Delaware corporation, and Wilmington Trust Company and George Jeff Mennen as
co-trustees U/A/D November 25, 1970, as amended for the benefit of John Henry
Mennen (the “Lender”); (ii) consents to Borrower Representative’s execution and delivery of
the Amendment and (iii) reaffirms its obligations under the Corporate Guaranty
dated as of October 12, 2007 (the “Guaranty”) and the other loan documents executed in connection
therewith. Although Guarantors have been informed of the matters set forth
herein and have acknowledged and agreed to same, Guarantors understand that
Lender has no obligation to inform Guarantors of such matters in the future or
to seek Guarantors’ acknowledgement or agreement to future amendments, waivers
or consents, and nothing herein shall create such a duty. 

          Each
of the undersigned further agrees that after giving effect to the Amendment,
the Guaranty shall remain in full force and effect. 

          IN
WITNESS WHEREOF, each Guarantor has executed this Consent and Reaffirmation on
and as of the date of the Amendment. 

	
  

 	
  

 
	
  

 	
 WAVE2WAVE
 VOIP COMMUNICATIONS, LLC

 
	
  

 	
  

 
	
  

 	
 By: /s/ Eric Mann

 
	
  

 	
  

 
	
  

 	
 Name: Eric Mann

 
	
  

 	
  

 
	
  

 	
 Title: CFO

 
	
  

 	
  

 
	
  

 	
 WAVE2WAVE
 DATA COMMUNICATIONS, LLC

 
	
  

 	
  

 
	
  

 	
 By: /s/ Eric Mann

 
	
  

 	
  

 
	
  

 	
 Name: Eric Mann

 
	
  

 	
  

 
	
  

 	
 Title: CFO

 
	
  

 	
  

 
	
  

 	
 WAVE2WAVE COMMUNICATIONS MID-WEST
 REGION, LLC

 
	
  

 	
  

 
	
  

 	
 By: /s/ Eric Mann

 
	
  

 	
  

 
	
  

 	
 Name: Eric Mann

 
	
  

 	
  

 
	
  

 	
 Title: CFO

 
	
  

 	
  

 
	
  

 	
 RNK, INC.

 
	
  

 	
  

 
	
  

 	
 By: /s/ Eric Mann

 
	
  

 	
  

 
	
  

 	
 Name: Eric Mann

 
	
  

 	
  

 
	
  

 	
 Title: Secretary

 
	
  

 	
  

 
	
  

 	
 RNK VA,
 LLC

 
	
  

 	
  

 
	
  

 	
 By: /s/ Eric Mann

 
	
  

 	
  

 
	
  

 	
 Name: Eric Mann

 
	
  

 	
  

 
	
  

 	
 Title:
 SecretaryExhibit 10.21

EXECUTION VERSION 

Strategic Partnership Master
Agreement

          This
Strategic Partnership Master Agreement (this “Agreement”) is made as of August
11, 2006 (the “Effective Date”) between Wave2Wave Communications, Inc.
(“Wave2Wave”), a Delaware Corporation with its principal offices at 433
Hackensack Avenue, Hackensack, NJ 07601 and incNETWORKS, Inc., a Delaware
Corporation with its principal offices at 198 Brighton Ave., Long Branch, NJ
07740 (“INI”) (hereinafter collectively the “Parties” and each, individually, a
“Party”).

RECITALS

WHEREAS, INI is a provider of Converged Broadband Wireless and Wireline
Networks, Products and Technologies, as well as Next Generation (4G) Network
Service Concepts and Network Design & Support Services which consist of
wireless and wireline voice, data, and video services (collectively, the “4G
Services”);

WHEREAS, Wave2Wave is a provider of Enterprise Managed Networks
Services and has expertise in providing enterprise customer support service as
well as marketing and customer care services;

WHEREAS, the Parties desire to combine Wave2Wave’s Managed Network
Service and Customer Support Services expertise and INI’s wireless and wireline
networking and new service concept design expertise into an offer to provide
the 4G Services to commercial customers within multi-tenant units in the United
States, in accordance with and subject to the terms and conditions of this
Agreement;

WHEREAS, the scope of this Agreement is to establish the general
technical and business rules of the strategic relationship between the Parties
with respect to the approximately 2,400 buildings serviced by Wave2Wave as of
the Effective Date as set forth in Exhibit A which is attached hereto and forms
an integral part of this Agreement and any additional buildings that come
within the scope of this Agreement pursuant to the terms and conditions hereof
(collectively, the “Territory”);

WHEREAS, Parties intend that a multi-tenant building named the Lincoln
Building located at 60 East 42nd Street, New York, NY (the “Lincoln Building”)
will serve as a showcase pilot project of the collaboration contemplated by
this Agreement and will serve as the platform for developing the business plan
and model for continuation of expanding the collaboration into all buildings in
the Territory; and

WHEREAS, in anticipation of the foregoing, the Parties have entered
into the Mutual Non Disclosure Agreement (the “Non Disclosure Agreement”)
between the Parties dated June

* WE HAVE REQUESTED CONFIDENTIAL TREATMENT OF CERTAIN PROVISIONS CONTAINED
  IN THIS EXHIBIT. THE COPY FILED AS AN EXHIBIT OMITS THE INFORMATION SUBJECT
  TO THE CONFIDENTIALITY REQUEST.*

EXECUTION VERSION

26, 2006, attached as Exhibit B to this Agreement and incorporated
herein by this reference, which shall continue to be a binding agreement
between the Parties;

NOW, THEREFORE, in consideration of the promises and mutual covenants
set forth in this Agreement, the Parties agree to the terms and conditions set
forth herein below:

ARTICLE I.

TERM AND TERMINATION

          Section 1. Term. This Agreement shall commence on the
Effective Date and shall continue in effect for a term of five (5) years
(hereinafter the “Initial Term”). Unless either Party notifies the other Party
of its desire not to renew the term of this Agreement at least ninety (90) days
prior to the expiration of the Initial Term or any Renewal Term (as defined
below), the term shall be automatically renewed for additional five (5) year
periods (each such renewed term, a “Renewal Term” and, together with the
Initial Term, the “Term”).

          Section 2. Termination for Breach. Either Party may
terminate this Agreement upon a material or continuing breach of this Agreement
by the other Party by providing thirty (30) days prior written notice of
termination to such other Party, stating the cause therefor. If within such
thirty (30) day notice period, the cause for termination is not cured to the
reasonable satisfaction of the Party giving notice, the termination shall
become effective at the conclusion of such thirty (30) day notice period,
provided that (X) the cure period for a payment default will be ten (10)
business days after notice thereof and (Y) disruption or interruption of
network services will be no greater than the threshold set forth in the
standard Terms and Conditions that govern the 4G Service as provided to end
user customers (the “Standard Terms and Conditions”).

          Section 3. Automatic Termination. Except as provided
for in ARTICLE IV, Section 3, either Party may terminate this Agreement if any
one of the following events occur: (i) if the other Party becomes insolvent or
admits in writing its inability to pay debts as they mature, or makes an assignment
for the benefit of creditors and as a result thereof cannot perform its
material obligations hereunder; (ii) if a petition under any foreign, state or
United States bankruptcy act, receivership statute, or the like, as they now
exist, or as they may be amended, is filed by the other Party and as a result
thereof such Party cannot perform its material obligations hereunder; or (iii)
if such a petition is filed against the other Party by any third Party and such
application is not resolved favorably to such other Party within sixty (60)
days and as a result thereof such Party cannot perform its material obligations
hereunder.

          Section 4. Survival. In addition to the sections and
provision of this Agreement that by their nature survive expiration or
termination or which must survive

EXECUTION VERSION

expiration or termination in order to give effect to their meaning, the
provisions of ARTICLE V.Section 1 (subject to the final sentence of this
Section 4) and the Non-Disclosure Agreement shall survive any expiration or
termination of this Agreement in accordance with their respective terms.
Wave2Wave acknowledges that in the event of termination of this Agreement, it
remains liable for any amounts incurred under ARTICLE V.Section 1 through, but
not for any time after, the date of such termination.

          Section 5. Nonexclusive Remedy. Subject to the
provision of ARTICLE VI of this Agreement, termination of this Agreement by
either Party will be a nonexclusive remedy for breach and will be without
prejudice to any other right or remedy of such Party.

ARTICLE II.

RIGHTS AND RESPONSIBILITIES OF THE PARTIES

The Parties shall perform their respective responsibilities as follows,
and acknowledge that their respective performance of such responsibilities are
dependent upon the performance of the other Party hereunder:

          Section 1. INI Responsibilities.

                    a.
INI will have the sole responsibility for completing pre-site network design
and engineering, and installation of a converged wireless and wireline networks
within the Territory based on utilizing INI’s Converged Broadband Wireless and
Wireline Network Products and Technologies, Next Generation Network Service
Concepts (collectively, the “4G Technology”) and Network Design & Support
Services expertise.

                    b.
INI will have the sole responsibility within the Territory, on a building-by-building
basis, prior to any 4G Services installation, to perform pre-site network
design and engineering, and shall provide Wave2Wave with a Price Quotation
(“Quote”) which specifies the price to be paid by Wave2Wave to INI for the cost
of the 4G wireless network equipment (the “Equipment”), Equipment installation
and 4G Service and Equipment maintenance, the latter in accordance with
established industry standards.

                    c.
INI will have the sole responsibility for installing the aforementioned 4G
equipment and for insuring, to the Parties’ mutual and reasonable satisfaction,
that the 4G Service operates in accordance with established industry standards.
Such mutual and reasonable satisfaction shall be deemed “Acceptance”.

EXECUTION VERSION

                    d.
INI will provide Wave2Wave with access to Class 4/5 IP Network Services Node
(the “Network Service Node”) capacity within a New York or New Jersey POP
Location for use in the Territory by Wave2Wave’s customers. The purchase price
for the equipment portion of the Network Service Node is estimated, as of the
Effective Date, at [***].

                    e.
INI will have the sole responsibility for ongoing 4G network equipment and
service maintenance.

                    f.
INI has sole responsibility for ongoing maintenance and modernization of such
Network Service Node, in accordance with established industry standards.

                    g.
In connection with the Lincoln Building project, INI will finance all
equipment, installations, connectivity and services provided by the Parties.
For successive buildings in the Territory, the Parties shall determine which of
the Parties shall finance such equipment (the “Financing Party”).

                    h.
Wave2Wave shall have the right of first refusal, as described below, to deploy
or otherwise utilize the 4G Technology and the 4G Services in office buildings
(each, an “Eligible Building”) that are, at the time of such opportunity: (i)
not otherwise accessed or serviced by INI; and (ii) set forth on the
then-current version of Exhibit A which may be updated and revised by Wave2Wave
by written notice to INI during the Term. If INI shall be ready, willing, and
able to accept any offer to deploy or otherwise utilize the INI Technology in
any Eligible Building, then INI shall give Wave2Wave prompt written notice of
such offer and the proposed compensation arrangement and term of engagement.
Wave2Wave shall then have the right of first refusal to engage INI’s services
on the same compensation arrangement and terms offered by the entity proposing
such offer to INI. Wave2Wave shall exercise such right of first refusal by giving
INI written notice that it is doing so no later than thirty (30) days after
receipt by Wave2Wave of INI’s said notice.

          Section
2. Wave2Wave Responsibilities.

                    a.
In the event that Wave2Wave requirements for Network Service Node capacity
exceeds INI’s existing capacity, Wave2Wave shall, in no event, contract for the
provision of additional Network Services Node capacity from any company other
than INI without first extending to INI the right of first negotiation to
provide the additional Network Service Node capacity on fair and reasonable
terms commensurate with existing market practices.

EXECUTION VERSION

                    b.
Wave2Wave will have the sole responsibility for providing all end-user
equipment, customer service support, billing, and provisioning as well as
management services for the underlying projects selected by the Parties.

                    c.
Wave2Wave will have the sole responsibility for maintaining end-user equipment
for customers of the Parties under this Agreement;

                    d.
Wave2Wave will have the sole responsibility for procuring additional business
opportunities and selling to all potential customers. However, following the
one (1) year anniversary of the first commercial customer availability of the
4G Service pursuant to this Agreement, if the actual sales of the 4G Service
fail to reach fifty percent (50%) of the sales milestones that are developed by
the parties in the five-year business plan that the parties will establish pursuant
to Article III, Section 3 of this Agreement, INI reserves the right to market
and sell the service itself, or through a third party, subject to any
applicable restrictions imposed by any building, whether as a result of
Wave2Wave’s access agreement with such building or otherwise.

                    e.
Wave2Wave will have the sole responsibility for obtaining and securing for the
Parties the right and access, and all pertinent documentation, agreements and
any required authorizations or permits, to perform the installation of the
network equipment for the enterprise within the Territory.

                    f.
Wave2Wave will have the sole responsibility for maintaining all billing and
accounting records for the sale to the customers in the Territory, in addition
to such other buildings as the Parties may hereafter agree to add pursuant to
the terms and conditions of this Agreement or by amendment hereto.

                    g.
Wave2Wave shall have the lead role and responsibility for the marketing, and promotion
of the 4G Service in connection with the Parties, provided however that (i) Wave2Wave shall be under no
obligation to use its good faith efforts to so market and promote the 4G
Service in connection with any building until Acceptance of the installation
with respect to such building; (ii) INI will cooperate with Wave2Wave by
providing information and support for such marketing activities, as reasonably
requested by Wave2Wave at no additional cost to Wave2Wave. Examples of such
support as provided by INI may include consultation services regarding
marketing and systems support, marketing opportunity assessment, solution
design reviews and product availability and delivery assistance. In addition,
during the Term of this Agreement, INI agrees to provide appropriate
promotional support to Wave2Wave’s sales and marketing efforts in a manner and
upon terms mutually acceptable to the Parties, at no additional cost to
Wave2Wave.

EXECUTION VERSION

ARTICLE III.

PAYMENT PLAN; NETWORK EQUIPMENT AND INVESTMENT

          Section 1. Purchase Amount. The Financing Party shall
pay for the purchase price for the Equipment (for any building or group of
buildings, as agreed by the Parties, the “Purchase Amount”) as provided in this
Article III. The Purchase Amount for the Equipment required for the Lincoln
Building is estimated, as of the Effective Date at [***]. The Purchase Amount for Equipment with respect to
additional buildings within the Territory shall be as set forth in individual
purchase orders agreed in writing from time to time as the Parties agree to add
additional buildings to the scope of this Agreement. The Purchase Amount with
respect to the Equipment used for the Lincoln Building shall be paid by
Wave2Wave as follows:

                    a.
In accordance with ARTICLE V, Wave2Wave will pay the Purchase Amount through
the payment of the Revenue Share (as defined below) to INI. At such time as the
aggregate amount of the Investment (as defined below) and any Revenue Share is
equal to the Purchase Amount, the Purchase Amount shall be deemed paid in full
and title to the Equipment shall pass to Wave2Wave.

                    b.
Profit Sharing. At all times during the Term,
Wave2Wave shall pay to INI the Revenue Share in accordance with ARTICLE V of
this Agreement.

          Section 2. Delivery and Risk of Loss. INI shall
deliver the Equipment to the designated delivery site F.O.B. such delivery site
(“Delivery Site”). Risk of loss to the Equipment shall pass to Wave2Wave
immediately upon the arrival of the Equipment at the Delivery Site.
Notwithstanding the foregoing, each Party shall be solely responsible for any
damage to the Equipment caused by such Party’s (or it’s subcontractor’s or
designee’s) acts, omissions, negligence or misconduct.

          Section 3. Milestones. Using the Lincoln Building
Project as a demonstration platform, the Parties will develop plans to deploy
the 4G Services and 4G Technology throughout the Territory, based on a five (5)
year business plan which will be reviewed, updated and approved on a
bi-quarterly basis, beginning with the execution of this Agreement, subject to
approval by each Party’s respective Board of Directors. The Parties acknowledge
that this Agreement may require revision, amendment and/or expansion following
such approvals.

          Section 4. Periodic Checkpoints on Strategy and Alignment.
During the Term, appropriate representatives of INI and Wave2Wave will meet in
person or by telephone, as mutually agreed by the Parties from time to time, at
least four (4) times per year to review strategic plans, marketing programs,
partnership opportunities and other matters relevant 

EXECUTION VERSION

to the success of the
joint project initiatives described herein. The results of these periodic
checkpoints are expected to be documented plans for equipment installation and
service provisioning throughout the Territory with tasks, task owners,
milestones and deliverables which may require revision, amendment and/or
expansion of this Agreement.

ARTICLE IV.

LICENSES; OWNERSHIP; MAINTENANCE AND SUPPORT

Section 1. License Grant. In
all cases pursuant to and in consideration of Wave2Wave’s payment for
applicable fees thereunder:

	
  

 	
  

 
	
  

 	
           (a)
 INI hereby grants Wave2Wave a nonexclusive and nontransferable (except as set
 forth herein) license to use the Network Services Node, and, under its
 intellectual property rights, the 4G Technology. The duration of such license
 to the 4G Technology shall be as follows: (i) for Equipment with respect to
 which INI is the Financing Party, including the Equipment for the Lincoln
 Building, such license shall be for the Term and upon payment in full by
 Wave2Wave of the Purchase Amount, such license shall be converted to a
 perpetual license; and, (ii) for Equipment with respect to which Wave2Wave is
 the Financing Party, such license shall be a perpetual license commencing
 upon delivery of the applicable Equipment.

 
	
  

 	
  

 
	
  

 	
           (b)
 Subject to the terms of this Agreement and for Equipment with respect to
 which INI is the Financing Party, INI grants to Wave2Wave a nonexclusive,
 nontransferable, license during the Term to use the Equipment in the
 Territory until such time as title to the Equipment transfers to Wave2Wave
 pursuant to the terms and conditions of this Agreement. The scope of the
 foregoing license encompasses Wave2Wave’s internal use of Equipment in
 connection with providing 4G Services to its customers, but excludes any
 sublicensing, uploading or otherwise transferring, or providing direct access
 to, the Equipment (except as necessary to accomplish the provision of the 4G
 Services to such customers) to any third party without INI’s prior written
 consent.

 

Section 2. License fees. The Parties agree that the
consideration which would otherwise be due to INI pursuant to clauses (a) and (b) above shall be
incorporated into amounts which will otherwise be due under the Revenue Sharing
arrangement.

 Section 3. Section 365(n). Notwithstanding the
provisions of Article I, Section 3, the rights to the 4G Technology licensed
pursuant to Section 1(a) of this Article IV are, and shall otherwise be deemed
to be, for purposes of Section 365 (n) of the United States Bankruptcy Code
(the “Code”), licenses to rights to “intellectual property” as defined under
the Code. INI acknowledges that if it, as a debtor in 

EXECUTION VERSION

possession or a trustee in bankruptcy in a case under the Code, rejects
this Agreement, then Wave2Wave may elect to retain its rights under this
Agreement as provided in Section 365(n) of the Code. The Parties further agree
that, in the event of the commencement of any bankruptcy proceeding by or
against INI under the Code, Wave2Wave shall be entitled to retain all of such
rights under this Agreement in accordance with Section 365(n) of the Code. INI
agrees and acknowledges that enforcement by Wave2Wave of any rights under
Section 365(n) of the Code in connection with this Agreement shall not violate
the automatic stay of Section 362 of the Code and waives any right to object on
such basis.

Section 4. Ownership. With respect to Equipment for which
INI is the Financing Party, INI solely owns all rights, title and interest in
and to the Equipment installed, and reserves all rights thereto not expressly
granted under this Agreement. Title to such Equipment shall pass to Wave2Wave
upon payment in full to INI of the Purchase Amount in accordance with Article
V. Title to Equipment for which Wave2Wave is the Financing Party shall transfer
to Wave2Wave upon the payment by Wave2Wave of the applicable Quote.

ARTICLE V.

REVENUE SHARING

          Section 1.
The Parties shall share the revenue derived from this Agreement pursuant to the
following calculation:

          “Revenue
Share” = [***]

where, with respect to any building in the Territory “Gross Revenue”
means [***], “Baseline Revenue”
means [***], and “Expenses” means [***] A detailed description of applicable
Expenses, for purposes of this Section 1 shall be agreed between the Parties in
the five (5) year business plan agreed to by each Party’s respective Board of
Directors. With respect to buildings in which Equipment with respect to which
the Purchase Amount has not been recovered in full by the Financing Party: (i)
in the event that such Financing Party is INI, the Applicable Percentage for
purposes of calculating the Revenue Share payable by Wave2Wave to INI shall
equal [***] until such Purchase
Amount has been recovered by INI and (ii) in the event that such Financing
Party is Wave2Wave, the Applicable Percentage for purposes of calculating the
Revenue Share payable by Wave2Wave to INI shall equal [***] until such Purchase Amount has been
recovered by Wave2Wave. Following the recovery of the Purchase Amount by the
Financing Party with respect to any building, the Applicable Percentage shall
be equal to [***].

Section 2. Within thirty (30) days following the conclusion of any
calendar quarter, Wave2Wave shall remit to INI the Revenue Share, together with
an accounting, in 

EXECUTION VERSION

reasonable detail and consistent with generally accepted accounting
principles, setting forth information used to calculate the Revenue Share.

Section 3. INI shall have the right to audit Wave2Wave’s books and
records for the sole purpose of determining whether Wave2Wave has complied with
this ARTICLE V. If an audit reveals underpayment of fees due under this
Agreement, all such amounts will be promptly paid with interest at the
prevailing U.S. dollar prime rate accruing from the original due date. If any
such underpayment exceeds 5% of the revenue due to INI for the period audited,
Wave2Wave will also pay INI’s reasonable and actual costs of conducting the
audit. Any information disclosed to or developed by INI in connection with any
audit shall be the Confidential Information of Wave2Wave.

Section 4. Each Party, its Affiliates and sublicensees shall at all times
act in good faith and in a commercially reasonable manner (including, without
limitation, the use of generally accepted accounting principles, consistently
applied) and shall not intentionally or knowingly inappropriately or
inaccurately apportion amounts invoiced for the purpose or effect of
circumventing or depriving the other Party of any benefit due them under this
Agreement.

Section 5. As an additional inducement for INI to enter into this
Agreement, Wave2Wave will purchase from INI on the Effective Date, and INI
shall sell, transfer, convey, assign and deliver to Wave2Wave within one week
from the Effective Date, each subject to and pursuant to the terms and
conditions of a Subscription Agreement, substantially in the form of Exhibit C
attached hereto, [***] shares of
the common stock, par value $.01 per share (the “Common Stock”) of incNETWORKS,
Inc. at a price of [***] per
share, for a total payment of [***]
(the “Investment”).

ARTICLE VI.

REPRESENTATIONS AND WARRANTIES; INDEMNITIES

          Section 1. General Warranties. Each Party represents,
warrants and covenants to the other that:

                    a.
it is duly organized and validly existing and is in good standing under the
laws of its jurisdiction of organization and is qualified and in good standing
as a foreign corporation under the laws of any jurisdiction where the ownership
of its assets or the conduct of its business require such Party to be so
qualified;

                    b.
its execution, delivery, and performance of this Agreement has been duly
authorized by all appropriate organizational action on the part of such Party
and this Agreement constitutes the valid and binding obligation of such Party
enforceable against such Party in accordance with the terms of this Agreement;

EXECUTION VERSION

                    c.
neither the execution and delivery by such Party of this Agreement, nor the
consummation by such Party of the transactions contemplated hereby, nor
compliance by such Party with the provisions hereof, conflicts with or results
in a breach of any of the provisions of the organizational documents or by-laws
of such Party, or any amendments thereto, or any applicable law, judgment,
order, writ, injunction, decree, rule or regulation of any court,
administrative agency or other governmental authority, or of any agreement or
other instrument to which such Party is a party or by which it is bound, or
constitute a default under any provision thereof;

                    d.
no approval, authorization, consent, permission, or waiver to or from, or
notice, filing, or recording to or with, any person, entity or governmental
authority is necessary for the execution and performance of this Agreement;

                    e.
it has and shall maintain during the Term the proper licenses and rights to
perform its obligations hereunder;

                    f.
its personnel have and shall have the necessary experience, qualifications,
knowledge, competency and skill set to perform the obligations of such Party
pursuant to this Agreement;

                    g.
it is in compliance with all applicable local, city, state, federal and
international laws, rules and regulations including all environmental,
immigration, safety and health and labor and employment (including those
addressing discrimination, harassment and retaliation) laws, rules and
regulations, and shall remain in compliance during the Term of this Agreement;
and

                    h.
it shall instruct its personnel in any applicable safety standards and
protocols of which it is made aware, and shall follow all such standards and
protocols.

          Section 2. Territory Access Warranties. Wave2Wave
represents and warrants that it has secured access to the Territory and that it
will be able to meet its obligations under ARTICLE II. Section 2.e hereof as of
the Effective Date. In the event of any breach of this Warranty, Wave2Wave will
reimburse INI for any additional costs incurred by it in order to procure
access to a building in the Territory in order to perform the Joint Work under
this Agreement.

          Section 3. Equipment and Other Warranties.

                    a.
INI agrees to provide the 4G Service hereunder in accordance with established
industry standards, the service levels specified in the Standard Terms and
Conditions, and any additional requirements established jointly and in writing
by the Parties for a specific building within the Territory. The foregoing
extends to the Equipment’s performance as part of the 4G Service, and the
compatibility of the 

EXECUTION VERSION

Equipment, as part of the Service, with products, elements, or
components not supplied by INI but approved or recommended by INI for use in
connection with the 4G Service, including interfaces to equipment or systems
defined in any appendices hereto for which INI is responsible pursuant to this
Agreement.

                    b.
INI shall pass through to Wave2Wave any manufacturer warranties for Equipment
hardware or components and, to the extent necessary or to the extent that any
such manufacturer warranty prohibits such pass-through, assist Wave2Wave in the
pursuit of any claims or rights thereunder.

                    c.
In the event of any breach of the warranty set forth in this Section 3, INI
shall promptly repair or replace the defective or nonconforming Equipment or
otherwise cure any defects and deficiencies so that the Equipment, 4G Service
and Network Service Node shall perform in accordance with the requirements of
this Agreement.

                    d.
Notwithstanding the foregoing, INI shall have no liability pursuant to this
Section 3 for:

                         i.
damage caused by an event of Force Majeure other than to the extent that the
Equipment or component of the Service should have been able to withstand any
such Force Majeure event, in accordance with established industry standards; 

                         ii.
alterations by Wave2Wave and/or INI at Wave2Wave’s request against INI’s
written recommendations and inconsistent with this Agreement, excluding normal
maintenance or parameter changes; damage or deficiencies resulting from a
failure by Wave2Wave to comply with established industry standards; damage
resulting from the gross negligence or willful misconduct of Wave2Wave, or any
of its employees, agents or contractors (other than INI and its permitted
subcontractors); or performance or damages directly resulting from the failure
of equipment or software (or any related services) not provided by INI or any
of its permitted subcontractors (provided that INI has not contributed to such
failure or failed to comply with INI’s project management responsibilities
which contributed to such failure), provided that this shall not limit INI’s
obligations under the Standard Terms and Conditions.

          Section 4. Infringement Indemnity. INI will defend
and hold harmless Wave2Wave from any losses or expenses (including reasonable
legal fees) arising from any third-party action brought against Wave2Wave to
the extent based on a claim that the 4G Service or the 4G Technology infringes
any patent, copyright or other intellectual property right. Wave2Wave will
defend and hold harmless INI from any losses or expenses (including reasonable
legal fees) arising from any third-party action brought against INI to the
extent based on a claim that an add-on product, or other product 

EXECUTION VERSION

used in connection with Wave2Wave’s facilities and not provided,
recommended or approved by INI infringes any patent, copyright or other
intellectual property right. The Party entitled to indemnification hereunder
will (a) promptly notify the other Party in writing of the claim, (b) grant the
other Party sole control of the defense and settlement of the claim, and (c)
reasonably assist the other Party in defending the claim, at such other Party’s
expense.

          Section 5. Service Warranty.

                    a.
The Parties shall, subject to the terms and conditions hereof, perform their
obligations hereunder with reasonable care and in good faith, and in a manner
consistent with the procedures and practices that a prudent business person in
the industry would employ relating to services of the nature and character
provided hereunder, using a degree of skill and attention no less than that
which each Party customarily exercises with respect to customers or territory
not subject to this Agreement that they manage for others in accordance with
their existing practices and procedures.

                    b.
INI warrants that all services provided to Wave2Wave under this Agreement by
its personnel or permitted subcontractors will be provided in accordance with
standard industry practices. Wave2Wave will notify INI of any alleged breach of
this warranty within thirty (30) days of the performance of any such services.
In the event of a breach of this warranty, Wave2Wave’s sole and exclusive
remedy for such breach shall be for INI to repair or re-perform such services
without charge to Wave2Wave.

                    c.
Wave2Wave warrants that all services provided to customers using capacity on
the Network pursuant to this Agreement by its personnel or permitted
subcontractors will be performed in accordance with standard industry
practices.

          Section 6. Resources. INI represents and warrants
that it possesses sufficient monetary resources as of the Effective Date and
taking into account the Investment, to complete its obligations hereunder in
connection with the Lincoln Building project, and to operate for a reasonable
period of time thereafter.

          Section 7. Liability. Each Party shall be responsible
for, and hereby assumes, any and all risks of personal injury or property
damage attributable to the grossly negligent or willful acts or omissions,
during the Term of this Agreement, of such Party, its affiliates and their
respective directors, officers, employees and agents and for the activities
such Party is responsible for conducting under this Agreement. Each Party
agrees to indemnify and hold the other harmless with respect to such
liabilities.

EXECUTION VERSION

ARTICLE VII. GENERAL PROVISIONS

          Section 1. Applicable Law. This Agreement shall be
construed and enforced in accordance with, and governed by, the law of the
State of New Jersey. The Parties hereto exclusively submit to the exclusive
jurisdiction of the courts of the State of New Jersey to the extent required
for the litigation of any claim, dispute or difference that may arise
hereunder, and each Party hereby irrevocably consents that service of process
shall be valid if served in the manner and to the address set forth herein.

          Section 2. Expenses. Other than as set forth herein,
all expenses incurred by the Parties under this Agreement will be borne solely
and entirely by the Party which has incurred such expenses.

          Section 3. Forum for Resolving Disputes. Any claim or
controversy arising out of or related to a claimed violation or material breach
of this Agreement or any of the provisions herein shall be resolved by final
and binding arbitration administered by JAMS or another provider of arbitration
services in accordance with their current rules for resolving commercial
disputes. Notwithstanding the above, either Party shall also have the right to
seek equitable and injunctive relief in any New Jersey court of competent
jurisdiction in the event that a breach or threatened breach may give rise to

EXECUTION VERSION

irreparable injury to such Party which may not be adequately
compensated by monetary damages.

          Section 4.
OTHER THAN IN CONNECTION WITH A PARTY’S INDEMNIFICATION OBLIGATIONS OR A PARTY’S
BREACH OF ITS OBLIGATIONS PURSUANT TO THE NON DISCLOSURE AGREEMENT, NEITHER
PARTY SHALL BE LIABLE TO THE OTHER OR TO ANY THIRD PARTY FOR ANY SPECIAL,
INDIRECT, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES, INCLUDING, BUT NOT
LIMITED TO, LOST PROFITS ARISING OUT OF THIS AGREEMENT, EVEN IF THE PARTIES
HAVE KNOWLEDGE OF THE POSSIBILITY OF SUCH DAMAGES. OTHER THAN IN CONNECTION
WITH A PARTY’S INDEMNIFICATION OBLIGATIONS OR A PARTY’S BREACH OF ITS
OBLIGATIONS PURSUANT TO THE NON DISCLOSURE AGREEMENT, NOTWITHSTANDING ANYTHING
CONTAINED HEREIN TO THE CONTRARY, THE MAXIMUM EXTENT OF EACH PARTY’S LIABILITY
TO THE OTHER HEREUNDER, SHALL NOT, UNDER ANY CIRCUMSTANCES EXCEED THE AGGREGATE
FEES ACTUALLY PAID BY WAVE2WAVE TO INI IN CONNECTION WITH THE BUILDING ACTUALLY
GIVING RISE TO SUCH LIABILITY.

          Section 5. Subcontracting/Assignment. Neither Party
shall subcontract or delegate any of its responsibilities hereunder to any
other party without the prior written consent of the other Party, which consent
shall not be unreasonably withheld or delayed. Either Party may only assign
this Agreement in its entirety, upon written notice to the other Party: (i) to
an affiliated company; or (ii) to an unaffiliated company pursuant to a sale,
merger or other consolidation of the other Party or any of its applicable
operating division and covenants that this Agreement shall be assigned in the
event of any such sale, merger or other consolidation. Any assignment other
than as described above shall be null and void.

          Section 6. Attachments. All attachments to this
Agreement shall be deemed a part of this Agreement and incorporated herein by
reference.

          Section 7. Amendment. This Agreement may not be
modified or amended or any term or provision hereof waived or discharged except
in a physical writing (e.g., no e-mail) signed by the Parties.

          Section 8. Waiver. The waiver by one Party of a
breach of any provision of this Agreement by the other shall not operate or be
construed as a waiver of any subsequent breach.

          Section 9. Construction. The headings of contained in
this Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning thereof. Words importing the singular include the
plural, words importing any gender

EXECUTION VERSION

include every gender and words importing persons include entities,
corporate and otherwise; and (in each case) vice versa. Whenever the terms
“including” or “include” are used in this Agreement in connection with a single
item or a list of items within a particular classification (whether or not the
term is followed by the phrase “but not limited to” or words of similar effect)
that reference shall be interpreted to be illustrative only, and shall not be
interpreted as a limitation on, or an exclusive enumeration of the items within
such classification.

          Section 10.
Independent Parties. INI and
Wave2Wave are independent parties. Nothing in this Agreement will be construed
to make either Party an agent, employee, franchisee, joint venturer or legal
representative of the other Party. Neither Party will have, nor represent
itself to have, any authority to bind the other Party or act on its behalf.

          Section 11.
Severability. If for any reason
any provision of this Agreement becomes unenforceable, other than as a result
of a breach or default by a Party that provision of the Agreement will be
enforced to the maximum extent permissible and the other provisions of this
Agreement will remain in full force and effect.

          Section 12.
Notices. All notices required or
permitted under this Agreement will be in writing and will be deemed given when
personally delivered or three business days after being mailed by U.S.
certified mail, first class, postage prepaid (or by reputable courier service
with package tracking ability, such as Fed Ex, UPS, DHL, etc.), to such Party
at the address set forth in the first paragraph of this Agreement. Each Party
may change such address by notice to the other Party in compliance with this Section.

          Section 13.
Force Majeure. Neither Party will
be responsible for any failure or delay in its performance under this Agreement
due to causes beyond its reasonable control, including but not limited to,
labor disputes, strikes, lockouts, shortages of or inability to obtain labor,
energy, raw materials or supplies, war, riot, act of God or governmental
action.

          Section 14.
Counterparts. This Agreement may
be executed in any number of counterparts, each of which shall be deemed an original
but all of which taken together shall constitute one and the same instrument.

EXECUTION VERSION

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
day and year first above written.

	
  

 	
  

 
	
 incNETWORKS,
 Inc.

 	
 WAVE2WAVE
 COMMUNICATIONS, INC.

 
	
  

 	
  

 
	
 By: /s/ Jesse E.
 Russell

 	
 By: /s/ Steven
 Asman

 
	
 Print Name: Jesse
 E. Russell

 	
 Print Name: Steven
 Asman

 
	
 Title: CEO

 	
 Title: President

 

* We have
requested confidential treatment of certain provisions contained in this
exhibit. The copy filed as an exhibit omits the information subject to the
confidentiality request.*

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