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Amendment No. 3 To Loan And Security Agreement

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Sectors: Telecommunications
Governing Law: Pennsylvania, View Pennsylvania State Laws
Effective Date: July 18, 2003
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AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT
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This AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT (this "Amendment") is made as of this 18th day of July, 2003, by and among LASALLE BUSINESS CREDIT, LLC, a Delaware limited liability company (successor-by-merger to LaSalle Business Credit, Inc.), as agent for Standard Federal Bank National Association (the "Lender"), AM COMMUNICATIONS, INC., a Delaware corporation ("AM Communications"), AM BROADBAND SERVICES, INC., a Delaware corporation ("AM Broadband"), SRS COMMUNICATIONS CORPORATION, a Connecticut corporation ("SRS Communications"), AMC SERVICES, INC., a Delaware corporation ("AMC Services"), AM NEX-LINK COMMUNICATIONS, INC., a Delaware corporation ("AM Nex-Link"), and AM TRAINING SERVICES, INC., a Delaware corporation ("AM Training"). AM Communications, AM Broadbank, SRS Communications, AMC Services, AM Nex-Link and AM Training are referred to herein individually each as a "Borrower" and collectively as the "Borrowers."


RECITALS


WHEREAS, the Borrowers and the Lender are parties to a certain Loan and Security Agreement, dated as of August 14, 2002 (as amended, modified or supplemented from time to time, the "Loan Agreement") pursuant to which the Lender established certain credit facilities on behalf of the Borrowers subject to the terms and conditions contained therein;


WHEREAS, the Borrowers have requested that the Lender amend certain terms and provisions of the Loan Agreement; and


WHEREAS, the Lender is willing to amend certain terms and provisions of the Loan Agreement on the terms and expressly subject to the conditions set forth herein.


NOW, THEREFORE, based on these premises (which are incorporated hereinafter by this reference), and in consideration of the mutual promises, representations and warranties, covenants and conditions contained herein and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto hereby agree as follows:


1. Definitions. Capitalized terms used herein, and not otherwise defined herein, shall have the meanings assigned to them in the Loan Agreement.


2. Acknowledgement of Obligations.


(a) Each Borrower acknowledges and agrees that: (i) as of the Third Amendment Effective Date, the Borrowers are unconditionally liable to the Lender on a joint and several basis under the Loan Agreement, the Notes and each of the Other Agreements, for the payment of the principal amount of the Loans (as described in clause (ii) hereof), plus all accrued and unpaid interest through the Third Amendment Effective Date, plus all expenses incurred by the Lender through the Third Amendment Effective Date, including, without limitation reasonable attorney's fees and expenses, and that, as of the Third Amendment Effective Date, the Borrowers have no defenses, counterclaims, deductions, credits, claims or rights of setoff or recoupment with respect to such obligations, and (ii) as of July 17, 2003, the aggregate outstanding principal balance of (A) the Revolving Credit Loan is $6,096,664.05, (B) the Special Advance is $1,250,000, (C) the Consolidated Term Loan is $2,379,722.24 and (D) Term Loan C is $2,374,999.99.


(b) Each Borrower hereby ratifies and confirms its obligations under the Loan Agreement, the Notes and each of the Other Agreements and hereby acknowledges and agrees that, except as expressly set forth herein, the Loan Agreement, the Notes and each of the Other Agreements remain in full force and effect.


3. Amendments and Modifications. All of the following amendments to the Loan Agreement are effective as of and after the Third Amendment Effective Date;


(a) Section 1 of the Loan Agreement is amended to add the following new definition (in alphabetical order):


"'Pledged Cash Collateral' shall mean, collectively, the cash pledged
to Lender to secure the Liabilities by one or both of Jay Hassan and
Alvin Hoffman pursuant to one or more pledge agreements executed and
delivered by such pledgor(s) to Lender.'"


(b) Section 1 of the Loan Agreement is further amended to delete the definition of Borrowing Base therein and replace it with the following:


"'Borrowing Base' shall mean (i) the lesser of (x) the Maximum
Revolving Loan Limit and (y) the sum of (1) the Revolving Loan Limit
and (2) so long as the pledge thereof has not been terminated and its
continued existence or enforceability has not been denied or disputed,
the Pledged Cash Collateral, minus in each case (ii) the reserves, if
any, established by Lender as set forth in Subsection 2(a) below.'"


(c) Borrowers acknowledge that if the Pledged Cash Collateral is returned (for any reason whatsoever) to the pledgors thereof or liquidated following an acceleration of the Liabilities, the pledges pertaining thereto have been terminated (pursuant to the terms of the applicable pledge agreements or otherwise), or the existence or enforceability thereof is denied or disputed, clause (i)(y)(2) in the definition of Borrowing Base shall be deemed removed and no longer applicable (to the extent of such return, termination, denial or dispute).


4. Effectiveness; Conditions Precedent.


(a) The effectiveness of the amendments and other provisions hereof are expressly subject to the following conditions precedent (all such documents and other items must be in form and substance satisfactory to the Lender):


(i) This Amendment duly executed by the Borrowers and the Lender and delivered to each other; and


2


(ii) Pledge Agreements duly executed by the pledgers identified in paragraph 3(a) above and delivered to Lender, accompanied by receipt by Lender of the Pledged Cash Collateral.


(b) The date on which all of the conditions precedent set forth in Section 4(a) hereof shall have been satisfied or waived is referred to herein as the "Third Amendment Effective Date."


5. Representations and Warranties; Additional Covenants.


(a) In order to induce the Lender to enter into this Amendment, each Borrower represents and warrants to the Lender that: (i) the execution, delivery and performance by the Borrower of this Amendment and the transactions contemplated hereby (A) are and will be within the corporate powers of the Borrowers, (B) have been authorized by all necessary corporate action on behalf of the Borrowers, (C) are not in contravention of any order or decree of any court or governmental unit, or of any law, rule or regulation to which any Borrower or any of its property is bound, (D) are not and will not be in conflict with, or result in a breach of or constitute (with due notice and/or lapse of time) a default under (x) any Borrower's articles of incorporation or bylaws or (y) any indenture, agreement, contract or undertaking to which any Borrower is a party or by which any Borrower or
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