Document:

Ex 10.8

	

Exhibit 10.8 

SCIENTIFIC LEARNING
CORPORATION 
1999 EMPLOYEE STOCK PURCHASE
PLAN  

Adopted April 22, 1999 
Approved By Stockholders May 28, 1999 
Amended by
the Board of Directors March 7, 2002
 Amendment Approved by
the Stockholders May 21, 2002 

No Termination Date 

1. PURPOSE. 

        (a) The
purpose of the 1999 Employee Stock Purchase Plan (the “Plan”) is to provide a
means by which employees of Scientific Learning Corporation, a Delaware corporation (the
“Company”), and its Affiliates, as defined in subparagraph 1(b), which are
designated as provided in subparagraph 2(b), may be given an opportunity to purchase
common stock of the Company.  

              (b)
        The word “Affiliate” as used in the Plan means any parent corporation
        or subsidiary corporation of the Company, as those terms are defined in
        Sections 424(e) and (f), respectively, of the Internal Revenue Code of
        1986, as amended (the “Code”). 

        (c) The
Company, by means of the Plan, seeks to retain the services of its employees, to secure
and retain the services of new employees, and to provide incentives for such persons to
exert maximum efforts for the success of the Company.  

              (d)
        The Company intends that the rights to purchase stock of the Company granted
        under the Plan be considered options issued under an “employee stock
        purchase plan” as that term is defined in Section 423(b) of the Code.
        

2. ADMINISTRATION. 

        (a) The
Plan shall be administered by the Board of Directors (the “Board”) of the
Company unless and until the Board delegates administration to a Committee, as provided
in subparagraph 2(c). Whether or not the Board has delegated administration, the Board
shall have the final power to determine all questions of policy and expediency that may
arise in the administration of the Plan.  

        (b)
 The Board shall have the power, subject to, and within the limitations of, the express
provisions of the Plan:  

	 	        (i)
      To determine when and how rights to purchase stock of the Company shall
      be granted and the provisions of each offering of such rights (which need
      not be identical).  

	

1. 

	

	 	        (ii)
      To designate from time to time which Affiliates of the Company shall be
      eligible to participate in the Plan.  

	 	        (iii)
      To construe and interpret the Plan and rights granted under it, and to establish,
      amend and revoke rules and regulations for its administration. The Board,
      in the exercise of this power, may correct any defect, omission or inconsistency
      in the Plan, in a manner and to the extent it shall deem necessary or expedient
      to make the Plan fully effective.  

	 	        (iv)
To amend the Plan as provided in paragraph 13. 

	 	        (v)
      Generally, to exercise such powers and to perform such acts as the Board
      deems necessary or expedient to promote the best interests of the Company
      and its Affiliates and to carry out the intent that the Plan be treated
      as an “employee stock purchase plan” within the meaning of Section
      423 of the Code.  

	
      
             (c)
        The Board may delegate administration of the Plan to a Committee composed
        of not fewer than two (2) members of the Board (the “Committee”)
        constituted in accordance with the requirements of Rule 16b-3 (“Rule
        16b-3”) under the Securities Exchange Act of 1934, as amended (the
        “Exchange Act”). If administration is delegated to a Committee,
        the Committee shall have, in connection with the administration of the
        Plan, the powers theretofore possessed by the Board, subject, however,
        to such resolutions, not inconsistent with the provisions of the Plan,
        as may be adopted from time to time by the Board. The Board may abolish
        the Committee at any time and revest in the Board the administration of
        the Plan. 

3. SHARES SUBJECT TO THE
PLAN. 

        (a) Subject
to the provisions of paragraph 12 relating to adjustments upon changes in stock, the
stock that may be sold pursuant to rights granted under the Plan shall not exceed in the
aggregate Seven Hundred (700,000) shares of the Company’s common stock (the “Common
Stock”). If any right granted under the Plan shall for any reason terminate without
having been exercised, the Common Stock not purchased under such right shall again become
available for the Plan.  

        (b)
The stock subject to the Plan may be unissued shares or reacquired shares, bought on the
market or otherwise.  

4. GRANT OF RIGHTS;
OFFERING. 

        (a) The
Board or the Committee may from time to time grant or provide for the grant of rights to
purchase Common Stock of the Company under the Plan to eligible employees (an “Offering”)
on a date or dates (the “Offering Date(s)”) selected by the Board or the
Committee. Each Offering shall be in such form and shall contain such terms and
conditions as the Board or the Committee shall deem appropriate, which shall comply with
the requirements of Section 423(b)(5) of the Code that all employees granted rights to
purchase stock under the Plan shall have the same rights and privileges. The terms and
conditions of an Offering shall be incorporated by reference into the Plan and treated as
part of the Plan. The provisions of separate Offerings need not be identical, but each
Offering shall include (through incorporation of the provisions of this Plan by reference
in the document comprising the Offering or otherwise) the period during which the
Offering shall be effective, which period shall not exceed twenty-seven (27) months
beginning with the Offering Date, and the substance of the provisions contained in
paragraphs 5 through 8, inclusive.  

2. 

	

      
             (b)
        If an employee has more than one right outstanding under the Plan, unless
        he or she otherwise indicates in agreements or notices delivered hereunder:
        (1) each agreement or notice delivered by that employee will be deemed
        to apply to all of his or her rights under the Plan, and (2) a right
        with a lower exercise price (or an earlier-granted right, if two rights
        have identical exercise prices), will be exercised to the fullest possible
        extent before a right with a higher exercise price (or a later-granted
        right, if two rights have identical exercise prices) will be exercised.
        

5. ELIGIBILITY. 

        (a) Rights
may be granted only to employees of the Company or, as the Board or the Committee may
designate as provided in subparagraph 2(b), to employees of any Affiliate of the Company.
Except as provided in subparagraph 5(b), an employee of the Company or any Affiliate
shall not be eligible to be granted rights under the Plan, unless, on the Offering Date,
such employee has been in the employ of the Company or any Affiliate for such continuous
period preceding such grant as the Board or the Committee may require, but in no event
shall the required period of continuous employment be equal to or greater than two (2)
years. In addition, unless otherwise determined by the Board or the Committee and set
forth in the terms of the applicable Offering, no employee of the Company or any
Affiliate shall be eligible to be granted rights under the Plan, unless, on the Offering
Date, such employee’s customary employment with the Company or such Affiliate is for
at least twenty (20) hours per week and at least five (5) months per calendar year.  

        (b) The
Board or the Committee may provide that, each person who, during the course of an
Offering, first becomes an eligible employee of the Company or designated Affiliate will,
on a date or dates specified in the Offering which coincides with the day on which such
person becomes an eligible employee or occurs thereafter, receive a right under that
Offering, which right shall thereafter be deemed to be a part of that Offering. Such
right shall have the same characteristics as any rights originally granted under that
Offering, as described herein, except that:  

	 	        (i)
      the date on which such right is granted shall be the “Offering Date”
      of such right for all purposes, including determination of the exercise
      price of such right;  

	 	        (ii)
      the period of the Offering with respect to such right shall begin on its
      Offering Date and end coincident with the end of such Offering; and 
    

	

3. 

	

	 	        (iii) the
Board or the Committee may provide that if such person first becomes an eligible employee
within a specified period of time before the end of the Offering, he or she will not
receive any right under that Offering.  

	

        (c) No
employee shall be eligible for the grant of any rights under the Plan if, immediately
after any such rights are granted, such employee owns stock possessing five percent (5%)
or more of the total combined voting power or value of all classes of stock of the
Company or of any Affiliate. For purposes of this subparagraph 5(c), the rules of Section
424(d) of the Code shall apply in determining the stock ownership of any employee, and
stock which such employee may purchase under all outstanding rights and options shall be
treated as stock owned by such employee.  

              (d)
        An eligible employee may be granted rights under the Plan only if such
        rights, together with any other rights granted under “employee stock
        purchase plans” of the Company and any Affiliates, as specified by
        Section 423(b)(8) of the Code, do not permit such employee’s rights
        to purchase stock of the Company or any Affiliate to accrue at a rate
        which exceeds twenty five thousand dollars ($25,000) of fair market value
        of such stock (determined at the time such rights are granted) for each
        calendar year in which such rights are outstanding at any time. 

        (e) Officers
of the Company and any designated Affiliate shall be eligible to participate in Offerings
under the Plan, provided, however, that the Board may provide in an Offering that certain
employees who are highly compensated employees within the meaning of Section 423(b)(4)(D)
of the Code shall not be eligible to participate.  

6. RIGHTS; PURCHASE
PRICE. 

        (a) On
each Offering Date, each eligible employee, pursuant to an Offering made under the Plan,
shall be granted the right to purchase up to the number of shares of Common Stock of the
Company purchasable with a percentage designated by the Board or the Committee not
exceeding fifteen percent (15%) of such employee’s Earnings (as defined by the Board
or the Committee in each Offering) during the period which begins on the Offering Date
(or such later date as the Board or the Committee determines for a particular Offering)
and ends on the date stated in the Offering, which date shall be no later than the end of
the Offering. The Board or the Committee shall establish one or more dates during an
Offering (the “Purchase Date(s)”) on which rights granted under the Plan shall
be exercised and purchases of Common Stock carried out in accordance with such Offering.  

        (b) In
connection with each Offering made under the Plan, the Board or the Committee may specify
a maximum number of shares that may be purchased by any employee as well as a maximum
aggregate number of shares that may be purchased by all eligible employees pursuant to
such Offering. In addition, in connection with each Offering that contains more than one
Purchase Date, the Board or the Committee may specify a maximum aggregate number of
shares which may be purchased by all eligible employees on any given Purchase Date under
the Offering. If the aggregate purchase of shares upon exercise of rights granted under
the Offering would exceed any such maximum aggregate number, the Board or the Committee
shall make a pro rata allocation of the shares available in as nearly a uniform manner as
shall be practicable and as it shall deem to be equitable.  

4. 

	

        (c) The
purchase price of stock acquired pursuant to rights granted under the Plan shall be not
less than the lesser of:  

	 	        (i)
an amount equal to eighty-five percent (85%) of the fair market value of the stock on the
Offering Date; or 

	 	        (ii)
an amount equal to eighty-five percent (85%) of the fair market value of the stock on the
Purchase Date. 

	

7. PARTICIPATION;
WITHDRAWAL; TERMINATION. 

        (a) An
eligible employee may become a participant in the Plan pursuant to an Offering by
delivering a participation agreement to the Company within the time specified in the
Offering, in such form as the Company provides. Each such agreement shall authorize
payroll deductions of up to the maximum percentage specified by the Board or the
Committee of such employee’s Earnings during the Offering (as defined by the Board
or Committee in each Offering). The payroll deductions made for each participant shall be
credited to an account for such participant under the Plan and shall be deposited with
the general funds of the Company. A participant may reduce (including to zero) or
increase such payroll deductions, and an eligible employee may begin such payroll
deductions, after the beginning of any Offering only as provided for in the Offering. A
participant may make additional payments into his or her account only if specifically
provided for in the Offering and only if the participant has not had the maximum amount
withheld during the Offering.  

        (b) At
any time during an Offering, a participant may terminate his or her payroll deductions
under the Plan and withdraw from the Offering by delivering to the Company a notice of
withdrawal in such form as the Company provides. Such withdrawal may be elected at any
time prior to the end of the Offering except as provided by the Board or the Committee in
the Offering. Upon such withdrawal from the Offering by a participant, the Company shall
distribute to such participant all of his or her accumulated payroll deductions (reduced
to the extent, if any, such deductions have been used to acquire stock for the
participant) under the Offering, without interest, and such participant’s interest
in that Offering shall be automatically terminated. A participant’s withdrawal from
an Offering will have no effect upon such participant’s eligibility to participate
in any other Offerings under the Plan but such participant will be required to deliver a
new participation agreement in order to participate in subsequent Offerings under the
Plan.  

        (c) Rights
granted pursuant to any Offering under the Plan shall terminate immediately upon
cessation of any participating employee’s employment with the Company and any
designated Affiliate, for any reason, and the Company shall distribute to such terminated
employee all of his or her accumulated payroll deductions (reduced to the extent, if any,
such deductions have been used to acquire stock for the terminated employee) under the
Offering, without interest.  

5. 

	

        (d) Rights
granted under the Plan shall not be transferable by a participant otherwise than by will
or the laws of descent and distribution, or by a beneficiary designation as provided in
paragraph 14 and, otherwise during his or her lifetime, shall be exercisable only by the
person to whom such rights are granted.  

8. EXERCISE. 

        (a) On
each Purchase Date specified therefor in the relevant Offering, each participant’s
accumulated payroll deductions and other additional payments specifically provided for in
the Offering (without any increase for interest) will be applied to the purchase of whole
shares of stock of the Company, up to the maximum number of shares permitted pursuant to
the terms of the Plan and the applicable Offering, at the purchase price specified in the
Offering. No fractional shares shall be issued upon the exercise of rights granted under
the Plan. The amount, if any, of accumulated payroll deductions remaining in each
participant’s account after the purchase of shares which is less than the amount
required to purchase one share of stock on the final Purchase Date of an Offering shall
be held in each such participant’s account for the purchase of shares under the next
Offering under the Plan, unless such participant withdraws from such next Offering, as
provided in subparagraph 7(b), or is no longer eligible to be granted rights under the
Plan, as provided in paragraph 5, in which case such amount shall be distributed to
the participant after such final Purchase Date, without interest. The amount, if any, of
accumulated payroll deductions remaining in any participant’s account after the
purchase of shares which is equal to the amount required to purchase whole shares of
stock on the final Purchase Date of an Offering shall be distributed in full to the
participant after such Purchase Date, without interest.  

        (b) No
rights granted under the Plan may be exercised to any extent unless the shares to be
issued upon such exercise under the Plan (including rights granted thereunder) are
covered by an effective registration statement pursuant to the Securities Act of 1933, as
amended (the “Securities Act”) and the Plan is in material compliance with all
applicable state, foreign and other securities and other laws applicable to the Plan. If
on a Purchase Date in any Offering hereunder the Plan is not so registered or in such
compliance, no rights granted under the Plan or any Offering shall be exercised on such
Purchase Date, and the Purchase Date shall be delayed until the Plan is subject to such
an effective registration statement and such compliance, except that the Purchase Date
shall not be delayed more than twelve (12) months and the Purchase Date shall in no event
be more than twenty-seven (27) months from the Offering Date. If on the Purchase Date of
any Offering hereunder, as delayed to the maximum extent permissible, the Plan is not
registered and in such compliance, no rights granted under the Plan or any Offering shall
be exercised and all payroll deductions accumulated during the Offering (reduced to the
extent, if any, such deductions have been used to acquire stock) shall be distributed to
the participants, without interest.  

6. 

	

9. COVENANTS OF THE
COMPANY. 

        (a) During
the terms of the rights granted under the Plan, the Company shall keep available at all
times the number of shares of stock required to satisfy such rights.  

        (b) The
Company shall seek to obtain from each federal, state, foreign or other regulatory
commission or agency having jurisdiction over the Plan such authority as may be required
to issue and sell shares of stock upon exercise of the rights granted under the Plan. If,
after reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority which counsel for the Company deems necessary for the
lawful issuance and sale of stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell stock upon exercise of such rights unless and
until such authority is obtained.  

10. USE OF PROCEEDS FROM
STOCK. 

        Proceeds
from the sale of stock pursuant to rights granted under the Plan shall constitute general
funds of the Company. 

11. RIGHTS AS A
STOCKHOLDER. 

        A
participant shall not be deemed to be the holder of, or to have any of the rights of a
holder with respect to, any shares subject to rights granted under the Plan unless and
until the participant’s shareholdings acquired upon exercise of rights under the Plan
are recorded in the books of the Company. 

12. ADJUSTMENTS UPON
CHANGES IN STOCK. 

        (a) If
any change is made in the stock subject to the Plan, or subject to any rights granted
under the Plan (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock split,
liquidating dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company), the Plan and outstanding rights will be appropriately adjusted in the class(es)
and maximum number of shares subject to the Plan and the class(es) and number of shares
and price per share of stock subject to outstanding rights. Such adjustments shall be
made by the Board or the Committee, the determination of which shall be final, binding
and conclusive. (The conversion of any convertible securities of the Company shall not be
treated as a “transaction not involving the receipt of consideration by the Company.”)  

        (b) In
the event of: (1) a dissolution or liquidation of the Company; (2) a merger or
consolidation in which the Company is not the surviving corporation; (3) a reverse
merger in which the Company is the surviving corporation but the shares of the Company’s
Common Stock outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or otherwise; or (4) the
acquisition by any person, entity or group within the meaning of Section 13(d) or 14(d)
of the Exchange Act or any comparable successor provisions (excluding any employee
benefit plan, or related trust, sponsored or maintained by the Company or any Affiliate
of the Company) of the beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act, or comparable successor rule) of securities of the Company
representing at least fifty percent (50%) of the combined voting power entitled to vote
in the election of directors, then, as determined by the Board in its sole discretion (i) any
surviving or acquiring corporation may assume outstanding rights or substitute similar
rights for those under the Plan, (ii) such rights may continue in full force and
effect, or (iii) participants’accumulated payroll deductions may be used to
purchase Common Stock immediately prior to the transaction described above and the
participants’rights under the ongoing Offering terminated.  

7. 

	

13. AMENDMENT OF THE
PLAN. 

        (a) The
Board at any time, and from time to time, may amend the Plan. However, except as provided
in paragraph 12 relating to adjustments upon changes in stock, no amendment shall be
effective unless approved by the stockholders of the Company to the extent stockholder
approval is necessary for the Plan to satisfy the requirements of Section 423 of the
Code, Rule 16b-3 or any Nasdaq or securities exchange listing requirements.  

              (b)
        The Board may in its sole discretion submit any other amendment to the
        Plan for stockholder approval, including. 

        (c) It
is expressly contemplated that the Board may amend the Plan in any respect the Board
deems necessary or advisable to provide employees with the maximum benefits provided or
to be provided under the provisions of the Code and the regulations promulgated
thereunder relating to employee stock purchase plans and/or to bring the Plan and/or
rights granted under it into compliance therewith.  

        (d) Rights
and obligations under any rights granted before amendment of the Plan shall not be
impaired by any amendment of the Plan, except with the consent of the person to whom such
rights were granted, or except as necessary to comply with any laws or governmental
regulations, or except as necessary to ensure that the Plan and/or rights granted under
the Plan comply with the requirements of Section 423 of the Code.  

14. DESIGNATION OF
BENEFICIARY. 

        (a) A
participant may file a written designation of a beneficiary who is to receive any shares
and cash, if any, from the participant’s account under the Plan in the event of such
participant’s death subsequent to the end of an Offering but prior to delivery to
the participant of such shares and cash. In addition, a participant may file a written
designation of a beneficiary who is to receive any cash from the participant’s
account under the Plan in the event of such participant’s death during an Offering.  

        (b) The
participant may change such designation of beneficiary at any time by written notice. In
the event of the death of a participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such participant’s death, the
Company shall deliver such shares and/or cash to the executor or administrator of the
estate of the participant, or if no such executor or administrator has been appointed (to
the knowledge of the Company), the Company, in its sole discretion, may deliver such
shares and/or cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the Company, then to such
other person as the Company may designate.  

8. 

	

15. TERMINATION OR
SUSPENSION OF THE PLAN. 

        (a) The
Board in its discretion may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate at the time that all of the shares subject to the
Plan’s share reserve, as increased and/or adjusted from time to time, have been
issued under the terms of the Plan. No rights may be granted under the Plan while the
Plan is suspended or after it is terminated.  

        (b) Rights
and obligations under any rights granted while the Plan is in effect shall not be
impaired by suspension or termination of the Plan, except as expressly provided in the
Plan or with the consent of the person to whom such rights were granted, or except as
necessary to comply with any laws or governmental regulation, or except as necessary to
ensure that the Plan and/or rights granted under the Plan comply with the requirements of
Section 423 of the Code.  

16. EFFECTIVE DATE OF
PLAN. 

        The
Plan shall become effective on the same day that the Company’s initial public
offering of shares of common stock becomes effective (the “Effective Date”), but
no rights granted under the Plan shall be exercised unless and until the Plan has been
approved by the stockholders of the Company within twelve (12) months before or after the
date the Plan is adopted by the Board or the Committee, which date may be prior to the
Effective Date. 

9.Exhibit 10.1

                            AMENDMENT AGREEMENT NO. 1

      AMENDMENT AGREEMENT NO. 1 (this "Agreement") dated as of July 30, 2002 to
the CREDIT AGREEMENT, dated as of May 31, 2002, (as the same may be amended,
restated, modified or supplemented from time to time, the "Credit Agreement"),
among WIRE ONE TECHNOLOGIES, INC. (the "Borrower"), the lenders named therein
(the "Lenders") and JPMORGAN CHASE BANK, as administrative agent for the Lenders
(the "Administrative Agent"). All capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms in the Credit
Agreement.

      WHEREAS, the Borrower has requested that the Required Lenders agree to
amend certain provisions of the Credit Agreement.

      NOW, THEREFORE, the parties agree as follows:

SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT

SECTION 1.1 The definition of "Availability Block" in Section 1.01 of the Credit
Agreement is hereby amended in its entirety to read as follows:

                  "Availability Block" means (i) $4,000,000, or (ii) if at any
time (A) the Leverage Ratio is less than or equal to 4.00:1.00 for two
consecutive fiscal quarters (and based on projections satisfactory to the
Lenders, the Leverage Ratio will be less than or equal to 4.00:1.00 for the
subsequent consecutive four fiscal quarters) and (B) the Fixed Charge Coverage
Ratio is equal to or greater than 1.25:1.00 for two consecutive fiscal quarters
(and based on projections satisfactory to the Lenders, the Fixed Charge Coverage
Ratio will be equal to or greater than 1.25:1.00 for the subsequent consecutive
four fiscal quarters), $2,500,000.

SECTION 1.2 Section 5.04 of the Credit Agreement is hereby amended by deleting,
in its entirety, clause (y) thereof, and substituting, in lieu thereof, the
following:

            "(y) shall have the right to retain an inventory appraiser to
      appraise the inventory Collateral at any time and from time to time upon
      notice to the Borrower."

SECTION 1.3 Section 6.09 of the Credit Agreement is hereby amended by deleting,
in its entirety, the chart appearing in such section and substituting, in lieu
thereof, the following:

<PAGE>

         Period                                                 Amount
         ------                                                 ------

         For the fiscal year ending
         December 31, 2002                                    $4,500,000

         For the fiscal year ending
         December 31, 2003 and in each
         fiscal year thereafter                               $3,000,000

SECTION 1.4 Section 6.10 of the Credit Agreement is hereby deleted in its
entirety.

SECTION 1.5 Section 6.11 of the Credit Agreement is hereby deleted in its
entirety.

SECTION 1.6 Section 6.12 of the Credit Agreement is hereby amended by deleting,
in its entirety, the chart appearing in such section and substituting, in lieu
thereof, the following:

         Period                                            Amount
         ------                                            ------

Three fiscal quarters ending                           ($4,250,000)
September 30, 2002
Four fiscal quarters ending                            ($4,250,000)
December 31, 2002
Four fiscal quarters ending                            ($3,750,000)
March 31, 2003
Four fiscal quarters ending                            ($2,000,000)
June 30, 2003
Four fiscal quarters ending                            ($  750,000)
September 30, 2003
Four fiscal quarters ending                            $   400,000
December 31, 2003
Four fiscal quarters ending                            $ 1,000,000
March 31, 2004
Four fiscal quarters ending                            $ 2,250,000
June 30, 2004

<PAGE>

         Period                                            Amount
         ------                                            ------

Four fiscal quarters ending                            $ 3,500,000
September 30, 2004

Four fiscal quarters ending                             $5,000,000
December 31, 2004 and each
four fiscal quarters thereafter

SECTION 2. CONFIRMATION OF FINANCING DOCUMENTS

SECTION 2.1 The Borrower, by its execution and delivery of this Agreement,
irrevocably and unconditionally ratifies and confirms in favor of the
Administrative Agent that the Financing Documents shall continue in full force
and effect in accordance with their terms.

SECTION 3. COVENANTS

SECTION 3.1 The Borrower will furnish to the Administrative Agent within 20 days
after the end of each fiscal month, an unaudited consolidated balance sheet of
the Borrower and its Subsidiaries as of the end of such fiscal month, together
with the related consolidated statement of income for such fiscal month and the
related consolidated statement of cash flows at the end of such fiscal month, in
each case certified by a Financial Officer of the Borrower as presenting fairly
in all material respects the financial position and results of operations and
cash flow of the Borrower and its Subsidiaries in accordance with GAAP. In the
event that the Borrower does not complete the preparation of the financial
statements for any such fiscal month pursuant to this Section 3.1, the Borrower
will furnish to the Administrative Agent within 20 days after the end of such
fiscal month, flash reports satisfactory to the Administrative Agent. Failure to
comply with this reporting requirement shall constitute an Event of Default.

SECTION 4. CONDITIONS PRECEDENT

      This Agreement shall become effective upon the execution and delivery of
counterparts hereof by the Borrower, the Administrative Agent and the Lenders
and the fulfillment of the following conditions:

SECTION 4.1 All legal matters in connection with this Agreement shall be
satisfactory to the Administrative Agent, the Lenders and their respective
counsel in their sole discretion.

SECTION 4.2 Kaye Scholer LLP, counsel to the Administrative Agent, shall have
received payment in full for all legal fees charged, and all costs and expenses
incurred, by such

<PAGE>

counsel through the date hereof and all legal fees charged, and all costs and
expenses incurred, by such counsel in connection with the transactions
contemplated under this Agreement and the other Loan Documents and instruments
in connection herewith and therewith.

SECTION 4.3 The Administrative Agent shall have received an amendment fee (the
"Amendment Fee") in the amount of $62,500, provided, however, that in the event
that within seven Business Days of the date of this Agreement, the Borrower and
the Administrative Agent enter into an agreement satisfactory to the
Administrative Agent and the Borrower for the purchase of 50,000 options of the
Borrower, then the Administrative Agent shall refund to the Borrower an amount
equal to $25,000 of the Amendment Fee.

SECTION 4.4 The Administrative Agent shall have received such other approvals,
opinions or documents as the Administrative Agent may reasonably request.

SECTION 5. MISCELLANEOUS

SECTION 5.1 The Borrower reaffirms and restates the representations and
warranties set forth in Article III of the Credit Agreement (except as set forth
in the revised financial model for the Borrower delivered to the Administrative
Agent on July 18, 2002), after giving effect to the transactions contemplated
herein, and all such representations and warranties shall be true and correct on
the date hereof with the same force and effect as if made on such date (unless
expressly related to an earlier date). The Borrower represents and warrants
(which representations and warranties shall survive the execution and delivery
hereof) to the Administrative Agent that:

            (a) It has the corporate power and authority to execute, deliver and
      carry out the terms and provisions of this Agreement and the transactions
      contemplated hereby and has taken or caused to be taken all necessary
      corporate action to authorize the execution, delivery and performance of
      this Agreement and the transactions contemplated hereby;

            (b) No consent of any other person (including, without limitation,
      shareholders or creditors of the Borrower), and no action of, or filing
      with any governmental or public body or authority is required to
      authorize, or is otherwise required in connection with the execution,
      delivery and performance of this Agreement;

            (c) This Agreement has been duly executed and delivered on behalf of
      the Borrower by a duly authorized officer, and constitutes a legal, valid
      and binding obligation of the Borrower, enforceable in accordance with its
      terms, subject to bankruptcy, reorganization, insolvency, moratorium and
      other similar laws affecting the enforcement of creditors' rights
      generally and the exercise of judicial discretion in accordance with
      general principles of equity; and

<PAGE>

            (d) The execution, delivery and performance of this Agreement will
      not violate any law, statute or regulation, or any order or decree of any
      court or governmental instrumentality, or conflict with, or result in the
      breach of, or constitute a default under any contractual obligation of the
      Borrower.

SECTION 5.2 Except as herein expressly amended, the Credit Agreement is ratified
and confirmed in all respects and shall remain in full force and effect in
accordance with its terms.

SECTION 5.3 All references to the Credit Agreement in the Credit Agreement and
the other Financing Documents and the other documents and instruments delivered
pursuant to or in connection therewith shall mean the Credit Agreement as
amended hereby and as may in the future be amended, restated, supplemented or
modified from time to time.

SECTION 5.4 This Agreement may be executed by the parties hereto individually or
in combination, in one or more counterparts, each of which shall be an original
and all of which shall constitute one and the same agreement.

SECTION 5.5 Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.

SECTION 5.6 THIS AGREEMENT, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL
OBLIGATION LAW OF THE STATE OF NEW YORK, SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY
CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE
LAWS OF ANY OTHER JURISDICTION.

SECTION 5.7 The parties hereto shall, at any time and from time to time
following the execution of this Agreement, execute and deliver all such further
instruments and take all such further actions as may be reasonably necessary or
appropriate in order to carry out the provisions of this Agreement.

                      [Remainder Intentionally Left Blank]

<PAGE>

      IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

                                        WIRE ONE TECHNOLOGIES, INC., as Borrower

                                        By:_____________________________
                                           Name:
                                           Title:

                                        JPMORGAN CHASE BANK, as Administrative
                                        Agent and Lender

                                        By:_____________________________
                                        Name:
                                        Title:

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