Document:

Exhibit
10.86

SIXTH
FORBEARANCE AGREEMENT

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

WHEREAS:

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

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

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

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

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

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

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

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

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

2

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

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

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

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

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

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

3

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

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

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

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

          3.
Confirmation of Obligations and Acknowledged Events of Default. 

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

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

          4.
Payments. 

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

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

          5.
Forbearance; Forbearance Default Rights and Remedies. 

4

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

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

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

5

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

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

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

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

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

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

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

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

6

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

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

	
  

 	
  

 
	
  

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

 

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
 (b) Reserved.
 

 
	
  

 	
  

 
	
  

 	
 (c) Reserved.
 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

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

7

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

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

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

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

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

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

                    (l)
Reserved.

8

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

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

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

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

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

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

9

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

          8.
General Release; Indemnity. 

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

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

10

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

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

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

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

11

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

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

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

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

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

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

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

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

12

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

          11.
Reference to and Effect Upon the Transaction Documents.

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

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

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

13

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

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

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

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

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

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

14

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

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

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

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

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

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

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

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

15

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

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

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

          23.
Reserved. 

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

16

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

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

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

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

17

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

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

18

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

	
  

 	
  

 
	
  

 	
 COMPANIES:

 
	
  

 	
  

 
	
  

 	
 WAVE2WAVE COMMUNICATIONS, INC., a Delaware corporation

 
	
  

 	
  

 
	
  

 	
 By:/s/ Eric Mann

 
	
  

 	
 Name: Eric Mann

 
	
  

 	
 Title: Chief Financial
 Officer 

 
	
  

 	
  

 
	
  

 	
 RNK, INC., a Massachusetts corporation

 
	
  

 	
  

 
	
  

 	
 By:/s/ Eric Mann

 
	
  

 	
 Name: Eric Mann

 
	
  

 	
 Title: Treasurer

 
	
  

 	
  

 
	
  

 	
 WAVE2WAVE VOIP COMMUNICATIONS, LLC, a Delaware limited liability company

 
	
  

 	
  

 
	
  

 	
 By:/s/ Eric Mann

 
	
  

 	
 Name: Eric Mann

 
	
  

 	
 Title: Chief Financial
 Officer 

 
	
  

 	
  

 
	
  

 	
 WAVE2WAVE DATA COMMUNICATIONS, LLC, a Delaware limited liability company

 
	
  

 	
  

 
	
  

 	
 By:/s/ Eric Mann

 
	
  

 	
 Name: Eric Mann

 
	
  

 	
 Title: Chief Financial
 Officer 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
 By:/s/ Eric Mann

 
	
  

 	
 Name: Eric Mann

 
	
  

 	
 Title: Chief Financial
 Officer 

 

	
  

 	
  

 
	
  

 	
 RNK VA, LLC, a Virginia limited liability company

 
	
  

 	
  

 
	
  

 	
 By: /s/ Eric Mann

 
	
  

 	
 Name: Eric Mann

 
	
  

 	
 Title: Treasurer

 
	
  

 	
  

 
	
  

 	
 AGENT:

 
	
  

 	
  

 
	
  

 	
 VICTORY
 PARK MANAGEMENT, LLC

 
	
  

 	
 By: /s/ Matthew Ray

 
	
  

 	
 Name: Matthew Ray

 
	
  

 	
 Title: Manager

 
	
  

 	
  

 
	
  

 	
 LENDERS:

 
	
  

 	
  

 
	
  

 	
 VICTORY
 PARK CREDIT OPPORTUNITIES MASTER FUND, LTD.

 
	
  

 	
  

 
	
  

 	
 By: Victory Park Capital Advisors, LLC

 
	
  

 	
 Its: Investment Manager

 
	
  

 	
  

 
	
  

 	
 By: /s/ Scott R. Zemnick

 
	
  

 	
 Name: Scott R. Zemnick

 
	
  

 	
 Title: General Counsel

 

Annex A:

Schedule C to Security Agreement

All commercial tort
claims in favor of any Credit Party arising out of the ongoing disputes with
Verizon New England, Inc.Exhibit 10.87

EXECUTIVE EMPLOYMENT AGREEMENT

          This Executive Employment Agreement (the “Agreement”) is made as of September 21, 2010 by and between
Wave2Wave Communications, Inc., a Delaware corporation (the “Company”) and Aaron Dobrinsky (“Executive”). 

          1.
Duties and Scope of Employment.

                    (a)
Positions; Duties. During the
Employment Term (as defined in Section 2), the Company shall employ Executive
as the Chief Executive Officer of the Company and a member of the Board of
Directors (the “Board”). Executive shall report solely and directly to the
Board. 

                    (b)
Obligations. During the Employment
Term, Executive shall devote substantially all of his business efforts and time
to the Company. Executive agrees, during the Employment Term, not to actively
engage in any other employment, occupation or consulting activity for any
direct or indirect remuneration without the prior approval of the Board;
provided, however, that Executive may (i) serve in any capacity with any
professional, community, industry, civic, educational or charitable
organization, (ii) serve as a member of corporate boards of directors or as an
advisor to companies that Executive currently serves that do not compete with
the business of the Company and with the consent of the Board (which consent
shall not be unreasonably withheld or delayed), other corporate boards of
directors with the consent of the Board (which consent shall not be
unreasonably withheld or delayed), and (iii) manage his and his family’s
personal investments and legal affairs; provided,  however, that in each
instance, such activities do not materially interfere with the discharge of
Executive’s duties.  

          2. Employment Term. The Company hereby
agrees to employ Executive and Executive hereby accepts such employment ( the “Employment Term”), in accordance with the
terms and conditions set forth herein, commencing on the date hereof (the “Employment Commencement Date”) and will
continue until the second anniversary thereof (the “Initial Term”), provided
that on the second and subsequent anniversary of the Commencement Date, the
term of Executive’s employment hereunder will be automatically extended for an
additional period of one year (each a “Subsequent Term”) unless either Executive
or Company has given written notice to the other that such automatic extension
will not occur (a “Non-Renewal Notice”), which notice is given not less than
six months prior to the relevant anniversary of the Commencement Date. The
Initial Term and any Subsequent Term are referred to herein collectively as the
“Term.” 

          3. Compensation/Benefits. During the
Employment Term, the Company shall pay and provide to Executive the following: 

                    (a)
Cash Compensation. As compensation
for his services to the Company, Executive shall receive a base salary and
shall be eligible to receive additional variable compensation. During the
Employment Term, the Board or its Compensation Committee (the “Compensation Committee”) shall review Executive’s
Base Salary (as defined below) and Bonus (as defined below) then in effect at
least annually and may increase (but not decrease) such Base Salary and/or
Bonus as the Compensation Committee may approve. The Base Salary

shall be payable in accordance with the Company’s normal payroll
practices in effect from time to time, but in no event less frequently than
monthly and, in the case of Bonus, as soon as practical during the year
following the year with respect to which such Bonus is payable, but in no event
later than March 15 of such following year. No increase in Base Salary shall be
used to offset or otherwise reduce any obligations of the Company to Executive
hereunder or otherwise. 

	
  

 	
  

 
	
  

 	
                               (i)
 Annual Base Salary. As of the
 Employment Commencement Date, Executive’s annual Base Salary shall be five
 hundred twenty five thousand dollars ($525,000) (“Base Salary”); provided, however, that this
 amount shall be applied retroactively to Employment Commencement Date and in
 order to make Executive whole for any difference in salary paid to him
 between the Employment Commencement Date and the Closing Date (such period,
 the “Retroactivity Period”),
 Executive shall, on the Closing Date, receive a lump-sum payment in an amount
 equal to the difference between the amount he was actually paid during the
 Retroactivity Period and the amount he would have been paid during such
 period if he had been paid at the rate set forth in this Section 3(a).
 “Closing Date” shall be defined
 as the earlier of (a) an IPO of the Company’s Shares or (b) an infusion of
 equity or debt into the Company of a minimum of $20,000,000 or (c) March 31,
 2011. During the Retroactivity Period, Executive shall be paid a minimum
 annual base salary of three hundred and twenty five thousand dollars
 ($325,000). 

 
	
  

 	
  

 
	
  

 	
                               (ii)
 Discretionary Bonus. Executive
 shall also be eligible to earn annual variable compensation, the amount of
 which shall range from zero percent (0%) to one hundred percent (100%) of the
 Base Salary. The Bonus for any calendar year shall be awarded at the sole
 discretion of the Compensation Committee (or the Board in the absence of such
 committee) based upon the Company’s achievement of stated financial and
 strategic goals, as established by the Compensation Committee (or the Board
 in the absence of such committee). 

 
	
  

 	
  

 
	
  

 	
           (b) Equity Compensation. 

 
	
  

 	
  

 
	
  

 	
                               (i)
 Stock Ownership. The Company
 shall grant Executive five hundred thousand (500,000) shares of restricted
 common stock of Company (the “Restricted Shares”) under the Company’s 2009
 Employee and Director Equity Incentive Plan, as amended and in effect on the
 date of such grant (the “Stock Plan”),
 as will be more fully set forth in a restricted stock agreement subject to
 the Plan, twenty-five percent (25%) of such shares shall vest on the
 six-month anniversary of the Commencement Date, twenty-five percent (25%) of
 such shares shall vest on the twelve-month anniversary of the Commencement
 Date, twenty-five percent (25%) of such shares shall vest on the
 eighteen-month anniversary of the Commencement Date, and the remaining
 twenty-five percent (25%) of such shares shall vest on the twenty-four month
 anniversary of the Commencement Date. If Executive’s employment hereunder is
 terminated by Company without Cause, by Executive for Good Reason, or as a
 result of Executive’s Disability or death, then in addition to any other
 benefits to which Executive is entitled pursuant to this Agreement, the
 Restricted Shares shall fully vest and be immediately accelerated and the
 restrictions on the Restricted Shares shall lapse.

 

2

	
  

 	
  

 
	
  

 	
                               (ii)
 Ongoing Awards. Executive shall be eligible to participate fully in annual
 stock option grants and any other long-term equity incentive program at
 levels commensurate with his position as per the Employee Stock Option Plan
 to be in place by the Company.

 

                    (c)
Employee Benefits. Executive
shall, to the extent eligible, be entitled to participate at a level
commensurate with his position in all employee benefit, welfare and retirement
plans and programs, as well as equity plans, provided by the Company to its
senior executives in accordance with the terms thereof as in effect from time
to time. Notwithstanding the foregoing, at all times, the Company reserves the
right to amend, modify, or terminate any such plan or program. 

                    (d)
Expense Allowance. Subject to and
in accordance with the Company’s policies and procedures and in accordance with
the Company’s payroll practices but no less frequently than monthly, the
Company shall provide to Executive a non-accountable, discretionary expense
allowance of one thousand dollars ($1,000) per month to be used by Executive
for all of his own automobile expenses (including, without limitation, his
automobile lease or similar finance payments, insurance, and all gas mileage),
club and organization dues or memberships, travel upgrades, technology devices,
and similar executive perquisites and related taxes. 

                    (e)
Business and Entertainment Expenses.
Upon submission of appropriate documentation by Executive in accordance with
the Company’s policies in effect from time to time, the Company shall pay or
reimburse Executive for all business expenses that Executive incurs in
performing his duties under this Agreement, including, but not limited to,
travel (excluding gas mileage), entertainment, and professional dues and
subscriptions, in accordance with the Company’s policies in effect from time to
time. The Company shall not be obligated to reimburse Executive for personal
legal fees or taxes incurred for any reason. 

                    (f)
Vacation, Holidays and Sick Leave.
Executive shall be entitled to vacation of five (5) weeks per calendar year; provided,
however, that Executive shall be limited to future accruals of no more
than six (6) weeks of paid vacation. Executive shall also be entitled to
absences because of illness or other incapacity, and such other absences, whether
for holiday, personal time, or for any other purpose, as set forth in the
Company’s employment manual or current procedures and policies, as the case may
be, as the same may be amended from time to time. 

          4.
Termination of Employment.

                    (a)
Death or Disability. The Company
may terminate Executive’s employment for disability in the event Executive has
been unable to perform his material duties hereunder for three (3) consecutive
months or for more than one hundred eighty (180) days in any three hundred
sixty (360) day period because of physical or mental incapacity by giving
Executive notice of such termination while such continuing incapacity continues
(a “Disability Termination”). Executive’s employment shall automatically
terminate on Executive’s death. In the event Executive’s employment with the
Company terminates during the Employment Term 

3

by reason of Executive’s death or a Disability Termination, then upon
the date of such termination: 

	
  

 	
  

 
	
  

 	
                               (i)
 any Options or Shares that would have vested solely due to the passage of
 time during the twelve (12) month period beginning on the date of Executive’s
 death or Disability Termination shall immediately vest; 

 
	
  

 	
  

 
	
  

 	
                               (ii)
 the Company shall, within thirty (30) days of the date Executive’s employment
 is terminated, pay and provide Executive (or in the event of Executive’s
 death, Executive’s estate) (A) any unpaid Base Salary through the date of
 termination and any accrued vacation, (B) reimbursement for any unreimbursed
 expenses incurred through the date of termination, and (C) all other
 payments, benefits or fringe benefits to which Executive may be entitled
 subject to and in accordance with, the terms of any applicable compensation
 arrangement or benefit, equity or fringe benefit plan or program or grant and
 amounts that may become due under Section 5 hereof (collectively,
 items under this clause (i) are referred to as “Accrued Benefits”); and 

 
	
  

 	
  

 
	
  

 	
                               (iii)
 the Company shall pay to Executive at the time other senior executives are
 paid under any cash bonus or long-term incentive plan, but in no event later
 than March 15 of the year following the year in which Executive’s employment
 is terminated, a pro-rata bonus equal to the amount Executive would have
 received if Executive’s employment had continued (without any discretionary
 cutback) multiplied by a fraction where the numerator is the number of days
 in each respective bonus period prior to Executive’s termination and the
 denominator is the number of days in the bonus period (the “Prorated Bonus”); provided, however,
 that at the time of death or Disability Termination, Executive is on pace to
 achieve the performance milestones necessary to be eligible for such bonus. 

 

                    (b)
Termination for Cause. The Company
may terminate Executive’s employment for Cause (as defined below). In the event
that Executive’s employment with the Company is terminated during the
Employment Term by the Company for Cause, Executive shall not be entitled to
any additional payments or benefits hereunder, other than Accrued Benefits
(including, but not limited to, any then vested Option Shares and other equity
awards), to be paid or provided within thirty (30) days of the date Executive’s
employment is terminated. 

                                        (i)
For the purposes of this Agreement, “Cause” shall mean: 

                                        (A)
material breach of any provision of this Agreement by Executive; 

                                        (B)
the willful failure by Executive to perform his duties with the Company (other
than any such willful failure resulting from his incapacity due to physical or
mental impairment), unless any such willful failure is corrected within thirty
(30) days following written notice by the Board that specifically identifies
the manner in which the Board believes Executive has not materially performed
his duties; 

                                        (C)
an act of gross misconduct or gross negligence by Executive with regard to the
Company that is materially injurious to the Company; or 

4

                                        (D)
Conviction of the Executive at any felony. 

                    (c)
Termination by the Company Other Than for
Cause; Termination by Executive With Good Reason. Any payments to be
made or benefits to be provided under this Section 4(c) are conditioned on (x)
Executive’s execution of a general release and/or termination agreement
satisfactory to the Company, and (y) such general release and/or termination
agreement becoming effective. 

	
  

 	
  

 
	
  

 	
                               (i)
 If Executive’s employment with the Company is involuntarily terminated by the
 Company other than for Cause or if Executive voluntarily terminates his
 employment with the Company for Good Reason (as defined below), then the
 Company shall pay or provide Executive with the following as of the date of
 termination: 

 

                                        (A)
any Accrued Benefits, to be paid or provided within thirty (30) days of the
date Executive’s employment is terminated; 

                                        (B)
the Prorated Bonus; provided, however, that at the time of the termination of
Executive’s employment, Executive is on pace to achieve the performance
milestones necessary to be eligible for such bonus, and provided further that
such Prorated Bonus is paid no later than March 15 of the year following the
year in which Executive’s employment is terminated;  

                                        (C)
a severance amount equal to the Executive’s then-current annual Base Salary,
payable through the end of the Term, payable in a lump sum within thirty (30)
days of the date Executive’s employment is terminated. If the termination is
due to the Company not completing an IPO by March 31, 2011 or an infusion of
equity or debt into the Company of a minimum of $20,000,000 by March 31, 2011,
the Company will only be obligated to pay Executive an amount equal to Executive’s
monthly Base Salary for twelve (12) months, payable in a lump sum within thirty
(30) days of the date Executive’s employment is terminated (which termination
date for this purpose only, shall in no event be prior to March 31, 2011). 

                                        (D)
the right to continue his participation in the Company’s health benefit plans
to the extent that he is then a participant therein, at no additional cost to
Executive other than he would have incurred as an employee, for a period of
twelve (12) months starting with the first calendar month after such date of
termination; provided, however, that Company shall pay the full premium for
COBRA continuation coverage under its health plans for Executive (and, if
applicable, his dependents enrolled as participants in such health plans as of
the date of termination) for such twelve-month period. In the event Executive
obtains other employment during the twelve-month period in this clause (D),
pursuant to which he becomes covered for substantially similar or improved
benefits, the right to continue to participate in any health benefit plan, at
the Company’s expense, offered or provided by the Company shall immediately
cease.  

	
  

 	
  

 
	
  

 	
                               (ii)
 For purposes of this Agreement, “Good Reason” for termination by Executive
 shall arise from the following conduct of the Company or events without
 Executive’s consent (other than in connection with or subsequent to the 

 

5

	
  

 	
  

 
	
  

 	
 termination or suspension of Executive’s employment or duties for
Cause or in connection with Executive’s death or disability, and excluding
any isolated action not taken in bad faith and which is promptly remedied by
the Company after receipt of notice thereof from Executive); provided,
however, that in each instance, Executive shall provide reasonably detailed
written notice of any action or event that would constitute Good Reason under
this Section 4(c)(ii) to the Company within ninety (90) days of such action
or event, and the Company shall have thirty (30) days to cure such action or
event, and provided further that if such action or event is not cured by the
Company within such thirty (30) day period, Executive’s employment will then
be deemed to be terminated with Good Reason:  

 

                                        (A)
Material breach of any provision of this Agreement by the Company; or 

                                        (B)
After a Change of Control (as defined below), in the event that (i) Executive’s
aggregate compensation is substantially diminished (regardless of Executive’s
title, duties, or responsibilities) or (ii) Executive is required to relocate
more than one hundred (100) miles from his then-current residence in order to
continue to perform his duties under this Agreement. 

                    (d)
Termination by Executive Without Good Reason.
Executive may terminate his employment at any time without Good Reason by
written notice to the Company. In the event that Executive terminates his
employment with the Company during the Employment Term without Good Reason,
Executive shall not be entitled to any additional payments or benefits
hereunder, other than Accrued Benefits (including, but not limited to, any
then-vested Option Shares and other equity awards), to be paid or provided
within thirty (30) days of the date Executive’s employment is terminated. 

                    (e)
Termination as a result of non-renewal.
If the Executive’s employment hereunder is terminated as a result of the
expiration of the Term and on account of the Company providing Executive with a
Non-Renewal Notice in accordance with Section 2 hereof, then in addition to any
other benefits to which Executive is entitled pursuant to this Agreement,
Company will: 

	
  

 	
  

 
	
  

 	
                               (i)
 pay the Accrued Obligations to Executive promptly following the effective
 date of such termination; 

 
	
  

 	
  

 
	
  

 	
                               (ii)
 pay Executive an amount equal to Executive’s monthly Base Salary for six (6)
 months, such payments to be made in accordance with Company’s normal payroll
 practices, less all customary and required taxes and employment-related
 deductions; and 

 
	
  

 	
  

 
	
  

 	
                               (iii)
 upon completion of the appropriate COBRA forms, and subject to all the
 requirements of COBRA, continue Executive’s participation in Company’s health
 insurance plan through twelve (12) months following the effective date of
 such termination, at Company’s cost (except for Executive’s co-pay, if any,
 which shall be deducted from the payments described in subsection (ii)), to
 the same extent that 

 

6

	
  

 	
  

 
	
  

 	
 such insurance is provided to persons currently employed by Company. (subsections (ii) and (iii) herein
 jointly referred to as “Term Expiration Severance”). Payment of the Term
 Expiration Severance is expressly conditioned on the Executive executing a
 timely separation agreement in a form that is acceptable to Company, which
 will include, at a minimum, a complete general release of claims against
 Company and its affiliated entities and each of their officers, directors,
 employees and others associated with Company and its affiliated entities.

 

                    (f)
No Mitigation/No Offset. Executive
shall not be required to seek other employment or otherwise mitigate the value
of any severance benefits contemplated by this Agreement, nor shall any such
benefits be reduced by any earnings or benefits that Executive may receive from
any other source, except as provided in Section 4(c)(i)(D). The amounts
payable hereunder shall not be subject to setoff, counterclaim, recoupment,
defense or other right that the Company may have against Executive or others. 

          5.
Change of Control Vesting Acceleration.

                    (a)
In the event of a Change of Control (as defined below), twenty-five percent
(25%) of Executive’s then-unvested Option Shares shall immediately vest. 

                    (b)
After a Change of Control (as defined below), in the event that (i) Executive’s
aggregate compensation is substantially diminished (regardless of Executive’s
title, duties, or responsibilities) or (ii) Executive is required to relocate
more than one hundred (100) miles from his then-current residence in order to
continue to perform his duties under this Agreement, all of Executive’s
then-unvested Options or Shares and other equity awards shall immediately vest
in full, and if, after a Change of Control, Executive terminates his employment
with the Company for Good Reason, he shall be entitled to receive all severance
benefits set forth in Section 4(c)(i). 

                    (c)
For the purposes of this Agreement, “Change
of Control” is defined as the occurrence of any of the following
after the Employment Commencement Date: 

	
  

 	
  

 
	
  

 	
                               (i)
 any “person” (as defined in Section 13(d) and 14(d) of the Securities
 Exchange Act of 1934, as amended (the “Exchange
 Act”)) excluding for this purpose, (i) the Company or any
 subsidiary of the Company, or (ii) any employee benefit plan of the Company
 or any subsidiary of the Company, or any person or entity organized,
 appointed or established by the Company for or pursuant to the terms of any
 plan which acquires beneficial ownership of voting securities of the Company,
 is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the
 Exchange Act), directly or indirectly of securities of the Company
 representing more than fifty percent (50%) of the combined voting power of
 the Company’s then outstanding securities; provided, however, that no Change of Control will be
 deemed to have occurred as a result of a change in ownership percentage
 resulting solely from an acquisition of securities by the Company, the grant
 or exercise of any stock option, stock award, stock purchase right or similar
 equity incentive, or the continued beneficial ownership by any party of voting
 securities of the Company which such party beneficially owned as of the
 Employment Commencement Date; or 

 

7

	
  

 	
  

 
	
  

 	
                               (ii)
 persons, who, as of the Closing Date constitute the Board (the “Incumbent Directors”) cease for any reason,
 including without limitation, as a result of a tender offer, proxy contest,
 merger or similar transaction, to constitute at least a majority thereof, provided,
 however, that any person becoming a director of the Company subsequent
 to the Closing Date shall be considered an Incumbent Director if such
 person’s election or nomination for election was approved by a vote of at
 least fifty percent (50%) of the Incumbent Directors; and provided further,
 that any such person whose initial assumption of office is in connection with
 an actual or threatened election contest relating to the members of the Board
 or other actual or threatened solicitation of proxies or consents by or on
 behalf of a “person” (as defined in Section 13(d) and 14(d) of the Exchange Act)
 other than the Board, including by reason of agreement intended to avoid or
 settle any such actual or threatened contest or solicitation, shall not be
 considered an Incumbent Director; or 

 
	
  

 	
  

 
	
  

 	
                               (iii)
 consummation of a reorganization, merger or consolidation or sale or other
 disposition of at least 80% of the assets (other than cash and cash
 equivalents) of the Company (a “Business
 Combination”), in each case, unless, following such Business
 Combination, all or substantially all of the individuals and entities who
 were the beneficial owners of outstanding voting securities of the Company
 immediately prior to such Business Combination beneficially own, directly or
 indirectly, more than fifty percent (50%) of the combined voting power of the
 then outstanding voting securities entitled to vote generally in the election
 of directors, as the case may be, of the company resulting from such Business
 Combination (including, without limitation, a company which, as a result of
 such transaction, owns the Company or all or substantially all of the
 Company’s assets either directly or through one or more subsidiaries) in
 substantially the same proportions as their ownership, immediately prior to
 such Business Combination, of the outstanding voting securities of the
 Company; or 

 
	
  

 	
  

 
	
  

 	
                               (iv)
 approval by the stockholders of the Company of a complete liquidation or
 dissolution of the Company. 

 

          Notwithstanding
anything to the contrary at forth herein, the completion of the Company’s
currently contemplated IPO shall not be deemed a Change of Control for purposes
of this Agreement. 

          6.
Golden Parachute Payments.

                    (a)
Executive shall bear all expense of, and be solely responsible for, all
federal, state, local or foreign taxes due with respect to any benefit received
pursuant to this Agreement, including, without limitation, any excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
“Code”); provided, however, that any benefit received or to be received by
Executive in connection with a Change of Control (“Contract Benefits”) or any
other plan, arrangement or agreement with the Company or an affiliate
(collectively with the Contract Benefits, the “Total Benefits”) that would
constitute a “parachute payment” within the meaning of Section 280G of the
Code, shall be reduced to the extent necessary so that no portion thereof shall
be subject to the excise tax imposed by Section 4999 of the Code, but only if,
by reason of such reduction, the net after-tax benefit received by Executive as
a result of such  

8

reduction shall exceed the net after-tax benefit received by Executive
if no such reduction was made. For purposes of this Section 6, “net after-tax
benefit” shall mean the Total Benefits that Executive receives or is then
entitled to receive from the Company that would constitute a “parachute
payment” within the meaning of Section 280G of the Code, less (i) the amount of
all federal, state and local income and employment taxes payable by Executive
with respect to such “parachute payment,” calculated at the highest marginal
income tax rate for each year in which the foregoing shall be paid to Executive
(based on the rates set forth in the Code as in effect at the time of the first
receipt of the foregoing benefits), and (ii) the amount of excise taxes imposed
with respect to such “parachute payment” by Section 4999 of the Code.  

                    (b)
The accounting firm engaged by the Company (or its successor) for general tax
purposes shall perform any adjustment pursuant to subsection (a) of this
Section 6. The Company shall bear all expenses with respect to the
determinations by such accounting firm required to be made hereunder. The
accounting firm engaged to make the determinations hereunder shall provide its
calculations, together with detailed supporting documentation, to Executive and
to the Company within fifteen (15) calendar days of being engaged to perform
such determination and adjustment, or at such other time as requested by the
Company. Any good faith determinations of the accounting firm made hereunder
shall be final, binding and conclusive upon you and the Company.  

          7.
Section 409A Compliance.

                    (a)
To the extent that any amount payable under this Agreement constitutes an
amount payable under a “nonqualified deferred compensation plan” (as defined in
Section 409A of the Code (“Section 409A”)) following a “separation from
service” (as defined in Section 409A),
including any amount payable under Section 4, then, notwithstanding any
other provision in this Agreement to the contrary, such payment will not be
made to Executive earlier than the day after the date that is six (6) months
following Executive’s “separation from service.” This Section 7(a) will
not be applicable after Executive’s death.  

                    (b)
Executive and the Company acknowledge that the requirements of Section 409A are
still being developed and interpreted by government agencies, that certain
issues under Section 409A remain unclear at this time, and that the parties
hereto have made a good faith effort to comply with current guidance under
Section 409A. Notwithstanding anything in this Agreement to the contrary, in
the event that amendments to this Agreement are necessary in order to comply
with future guidance or interpretations under Section 409A, including
amendments necessary to ensure that compensation will not be subject to Section
409A, Executive agrees that the Company shall be permitted to make such
amendments, on a prospective and/or retroactive basis, in its sole discretion. 

          8. Restrictive Covenants. Executive
acknowledges that the Company’s ability to keep its Confidential Information
(as defined in Section 9(b)) secret and away from its competitors is
important to the Company’s and its affiliates’ viability and business.
Executive further acknowledges that over the course of his employment with the
Company he has and will (i) develop special and substantial relationships with
the Company’s and its affiliates’ customers and suppliers, and/or (ii) be privy
to Confidential Information. Further, Executive has and will help develop the
goodwill of the Company and its affiliates during the course of his employment.

9

Finally, pursuant to Section 3(b), Executive will have a
substantial ownership interest in the Company. As such, Executive agrees to
abide by the following covenants in order to allow the Company to protect those
interests: 

                    (a)
Non-Competition. During the
“Restricted Period” (as defined below), Executive will not, either directly or
indirectly, for himself or any other person or entity, anywhere within the
United States, carry on, own, be engaged in, assist, be employed by, consult
for, serve as a director for, or have any financial interest in any business or
enterprise that provides any of the services provided by the Company or any
subsidiary or affiliate of the Company or manufactures or sells any of the
products provided or offered by the Company or any subsidiary or affiliate of
the Company, or if it performs any other services and/or engages in the
production, manufacture, distribution or sale of any product similar to
services or products, which services or products were performed, produced,
manufactured, distributed, sold, under development or planned by the Company or
any subsidiary or affiliate of the Company during the period while Executive
performs services for the Company, provided that an equity investment of not
more than two percent (2%) in any company that is publicly traded and whose
shares are listed on a national stock exchange will be permitted. 

                    For
purposes of this Section 8, “Restricted
Period” means the period beginning on the Employment Commencement
Date and continuing until the later of the first (1st) anniversary of
Executive’s employment termination date or the first (1st)
anniversary after the Company has ceased making payments to Executive under
Sections 4(c) or 4(e) hereof, irrespective of the reason that Executive’s
employment is terminated with the Company. 

                    (b)
Non-Solicitation. During the
Restricted Period, Executive will not either directly or indirectly, for
himself or any other person or entity, (i) hire, solicit for services,
encourage the resignation of, or in any other manner seek to engage or employ,
any person who is an employee of the Company, or a consultant of the Company
devoting more than seventy percent (70%) of his or her time to the business of
the Company or any of its subsidiaries or affiliates, on Executive’s employment
termination date or during the six (6) month period preceding such termination
date, or (ii) solicit, provide services to, or otherwise interfere with the
Company’s business relationship with, any customer of the Company or any
customer of any subsidiary or affiliate of the Company in connection with
services and/or products that compete with the Company’s (or any subsidiary’s
or affiliate’s) services or products, provided that such customer is a customer
of the Company or any subsidiary or affiliate of the Company on the employment
termination date or during the one (1) year period preceding such termination
date. 

                    (c)
Equitable Relief. Executive
acknowledges that the remedy at law for his breach of Section 8, 9(a)
and/or 10 will be inadequate, and that the damages flowing from such breach
will not be readily susceptible to being measured in monetary terms.
Accordingly, upon a violation of any part of such Sections, the Company will be
entitled to immediate injunctive relief (or other equitable relief) and may
obtain a temporary order restraining any further violation. No bond or other
security will be required in obtaining such equitable relief, and Executive
hereby consents to the issuance of such equitable relief. Such equitable relief
may be obtained from any court having appropriate jurisdiction over the matter.
Nothing in this Section 8(c) shall be deemed to limit the Company’s
remedies at law or in equity that may be pursued or 

10

availed of by the Company for any breach by Executive of any of the
parts of Sections 8, 9(a) and/or 10. 

                    (d)
Judicial Modification. Executive
acknowledges that it is the intent of the parties hereto that the restrictions
contained or referenced in Sections 8, 9 and 10 be
enforced to the fullest extent permissible under the laws of each jurisdiction
in which enforcement is sought. If any of the restrictions contained or
referenced in such Sections is for any reason held by a court or arbitrator to
be excessively broad as to duration, activity, geographical scope, or subject,
then, for purposes of that jurisdiction, such restriction shall be construed,
judicially modified, or “blue penciled” so as to thereafter be limited or
reduced to the extent required to be enforceable in accordance with applicable
law. Executive acknowledges and understands that, due to the nature and scope
of the Company’s existing and proposed business plans and projects, and the
technological advancements in electronic communications, any narrower
geographic restriction of his obligations under Sections 8(a) and 8(b)
would be inappropriate and counter to the protections sought by the Company
thereunder. 

          9.
Confidential Information.

                    (a)
Non-Use and Non-Disclosure of Confidential
Information. Executive acknowledges that, during the course of his
employment with the Company, he has had and will have access to information
about the Company and its affiliates, and their customers and suppliers, that
is confidential and/or proprietary in nature, and that belongs to the Company
and/or its affiliates. As such, at all times, both during his employment and
thereafter, Executive will hold in the strictest confidence, and not use or
attempt to use except for the benefit of the Company and its affiliates, and
not disclose to any other person or entity (without the prior written
authorization of the Board) any “Confidential Information” (as defined in Section
9(b)). Notwithstanding anything contained in this Section 9,
Executive will be permitted to disclose any Confidential Information to the
extent required by validly-issued legal process or court order, provided that
Executive notifies the Board immediately of any such legal process or court
order in an effort to allow the Company to challenge such legal process or
court order, if the Company so elects, prior to Executive’s disclosure of any
Confidential Information. 

                    (b)
Definition of Confidential Information.
For purposes of this Agreement, “Confidential
Information” means any confidential or proprietary information that
belongs to the Company or its affiliates, or any of their customers or
suppliers, including, without limitation, technical data, market data, trade
secrets, trademarks, service marks, copyrights, other intellectual property,
know-how, research, business plans, product and service information, projects,
services, customer lists and information, customer preferences, customer
transactions, supplier lists and information, supplier rates, software,
hardware, technology, inventions, developments, processes, formulas, designs,
drawings, marketing methods and strategies, pricing strategies, sales methods,
financial information, project information, revenue figures, account
information, credit information, financing arrangements, and other information
disclosed to Executive by the Company or its affiliates in confidence, directly
or indirectly, and whether in writing, orally, or by electronic records, drawings,
pictures, or inspection of tangible property. 

11

          10. Return of Company Property. Upon
the termination of Executive’s employment with the Company, or at any time
during such employment upon request by the Company, Executive will promptly deliver
to the Company and not keep in his possession, recreate, or deliver to any
other person or entity, any and all property that belongs to the Company or any
of its affiliates, or that belongs to any other third party and is in
Executive’s possession as a result of his employment with the Company,
including, without limitation, computer hardware and software, Blackberries or
other personal data assistants or similar devices, pagers, mobile or cellular
phones, other electronic equipment, records, data, customer lists and
information, supplier lists and information, notes, reports, correspondence,
financial information, account information, product and service information,
project information, files, and other documents and information, including any
and all copies of the foregoing. 

          11. Assignment.

                    (a)
This Agreement shall be binding upon and inure to the benefit of (i) the heirs,
beneficiaries, executors and legal representatives of Executive upon
Executive’s death and (ii) any successor of the Company. Any such successor of
the Company shall be deemed substituted for the Company under the terms of this
Agreement for all purposes. As used herein, “successor” shall mean any person,
firm, corporation or other business entity that at any time, whether by
purchase, merger or otherwise, directly or indirectly acquires all or
substantially all of the assets or business of the Company. Notwithstanding
such assignment, the Company shall remain, with such successor, jointly and
severally liable for all of its obligations hereunder. This Agreement may not
otherwise be assigned by the Company. 

                    (b)
None of the rights of Executive to receive any form of compensation payable
pursuant to this Agreement shall be assignable or transferable except through a
testamentary disposition or by the laws of descent and distribution upon the
death of Executive or as provided in Section 19 hereof. Any attempted
assignment, transfer, conveyance or other disposition (other than as provided
in this Section 11) of any interest in the rights of Executive to
receive any form of compensation hereunder shall be null and void; provided,
however, that notwithstanding the foregoing, Executive shall be allowed
to transfer vested Option Shares or other stock options or equity awards
consistent with the rules for transfers to “family members” as defined in U.S.
Securities and Exchange Commission Form S-8. 

          12.
Liability Insurance.

                    (a)
The Company shall cover Executive under directors’ and officers’ liability
insurance both during and, while potential liability exists, after the
Employment Term in the same amount and to the same extent, if any, as the
Company covers its other officers and directors. 

                    (b)
The Company shall, both during and after the Employment Term, indemnify and
hold harmless Executive to the fullest extent permitted by applicable law with
regard to actions or inactions taken by Executive in the performance of his
duties as an officer, director and employee of the Company and its affiliates
or as a fiduciary of any benefit plan of the Company and its affiliates. 

12

          13.
Notices. All notices, requests, demands and other
communications called for hereunder shall be in writing and shall be deemed
given if (a) delivered personally or by facsimile, (b) one (1) day after being
sent by Federal Express or a similar commercial overnight service, or (c) three
(3) days after being mailed by registered or certified mail, return receipt
requested, prepaid and addressed to the parties or their successors in interest
at the following addresses, or at such other addresses as the parties may
designate by written notice in the manner set forth in this Section 14:

	
  

 	
  

 	
  

 
	
  

 	
 If to the Company:

 
	
  

 	
  

 
	
  

 	
  

 	
 Wave2Wave Communications, Inc.

 
	
  

 	
  

 	
 433 Hackensack Ave., 6th Floor

 
	
  

 	
  

 	
 Hackensack, NJ 07601

 
	
  

 	
  

 	
  

 
	
  

 	
 If to Executive:

 
	
  

 	
  

 
	
  

 	
  

 	
 Aaron Dobrinsky

 
	
  

 	
  

 	
 419 Ogden Avenue

 
	
  

 	
  

 	
 Teaneck, NJ 07666

 

          14.
Severability. In the event that any provision hereof becomes
or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision.

          15.
Entire Agreement. This Agreement represents the entire
agreement and understanding between the Company and Executive concerning
Executive’s employment relationship with the Company, and supersedes and
replaces any and all prior agreements and understandings concerning Executive’s
employment relationship with the Company entered into prior to the date hereof,
but it does not supersede or replace any written agreements entered into
simultaneous with this Agreement or thereafter.

          16.
Arbitration.

                    (a)
Agreement. The Company and Executive
agree that, except as otherwise provided in Section 8(c), any dispute or
controversy arising out of, relating to, or in connection with the employment
relationship between them, the inception of that relationship, the termination
of that relationship, this Agreement, or the interpretation, validity,
construction, performance, breach, or termination thereof, including, without
limitation, claims of discrimination, harassment, and/or retaliation, and any
violation of whistleblower laws, shall be settled by final and binding
arbitration to be held in New York, New York or such other location agreed by
the parties hereto, under the auspices of and in accordance with the National
Rules for the Resolution of Employment Disputes then in effect of the American
Arbitration Association (“AAA”). The
arbitrator may grant injunctions or other relief in such dispute or
controversy. The decision of the arbitrator shall be final, conclusive and
binding on the parties to the arbitration. Judgment may be entered on the
arbitrator’s decision in any court having jurisdiction. The selection of the
arbitrator will be conducted in accordance with the AAA’s practices and
procedures for disputes of the nature here contemplated. The arbitrator will
have

13

authority and
discretion to determine the arbitrability of any particular claim, should any
disputes arise with respect to such issue.

                    (b)
Costs and Fees of Arbitration. The
moving party shall pay the costs of the initial arbitration filing (not to
exceed two hundred fifty dollars ($250)), and the parties shall share the
remaining costs and expenses of such arbitration. Unless otherwise required by
law or pursuant to an award by the arbitrator, the Company and Executive shall
each pay separately its or his counsel fees and expenses. Notwithstanding the
foregoing, the arbitrator may, but need not, award the prevailing party in any
dispute its or his legal fees and expenses.

          17.
No Oral Modification, Cancellation or Discharge. This
Agreement may only be amended, canceled or discharged in writing signed by
Executive and an appropriate officer or director of the Company.

          18.
Survivorship. The respective rights and obligations of
Company and Executive hereunder shall survive any termination of Executive’s
employment by the Company to the extent necessary to preserve such rights and
obligations.

          19.
Beneficiaries. Executive shall be entitled, to the extent
permitted under any applicable law, to select and change the beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder upon his
death by giving the Company written notice thereof. If Executive dies,
severance then due or other amounts due hereunder shall be paid to his
designated beneficiary or beneficiaries or, if none are designated or none
survive Executive, his estate.

          20.
Withholding. The Company shall be entitled to withhold, or
cause to be withheld, any amount of federal, state, city or other withholding
taxes required by law with respect to payments made to Executive in connection
with his employment hereunder.

          21.
Governing Law. This Agreement shall be governed by Delaware
law (without reference to rules of conflicts of law), which shall be applied to
the merits of any dispute or claim submitted to arbitration pursuant to Section
16 of this Agreement. Executive and the Company hereby expressly consent to
the personal jurisdiction of the state and federal courts located in New York,
New York for any action or proceeding relating to any arbitration pursuant to Section
16 of this Agreement in which the parties are participants, or any claim to
which Section 8(c) applies.

[Remainder of page intentionally left blank – signatures on the following page]

14

          IN
WITNESS WHEREOF, the undersigned have executed this Agreement:

	
  

 	
  

 	
  

 
	
  

 	
 Wave2Wave Communications, Inc.

 
	
  

 	
  

 	
  

 
	
  

 	
 By: /s/ 

 	
 Steven Asman 

 
	
  

 	
  

 	
 Name: Steven Asman

 
	
  

 	
  

 	
 Title: President

 
	
  

 	
  

 	
  

 
	
  

 	
 Aaron Dobrinsky

 
	
  

 	
  

 	
  

 
	
  

 	
 /s/ Aaron Dobrinsky

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