UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): ~~December~~February 2219, ~~2009~~2010

Purple Communications, Inc.

(Exact name of Registrant as Specified in Its Charter)

Delaware

0-29359

22-3693371

(State or other jurisdiction

of incorporation)

(Commission File Number)

(IRS Employer

Identification No)

~~773~~595 ~~San~~Menlo ~~Marin~~ Drive, ~~Suite 2210~~Rocklin, ~~Novato,~~ CA ~~94945~~ 95765

(Address of principal executive offices)

(~~415~~888) ~~408~~600-~~2300~~4780

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 12.0103. ~~Entry~~Creation ~~into~~of a ~~Material~~Direct ~~Definitive~~Financial ~~Agreement~~Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

~~First~~Purple ~~Lien~~Communications, ~~Credit~~Inc. ~~Facilities:~~(the “Company”) has previously disclosed that it has received subpoenas, most recently in April 2009, from the Federal Communications Commission (the “FCC”) relating to a number of areas of its business practices regulated by the FCC. The April 2009 subpoena covered a broad array of topics, including matters such as marketing efforts, third party marketing programs, international calls, conference calls and surveys. The Company has also received numerous letters of inquiry from the FCC concerning similar subject matters. The Company understands that these investigations are intended to obtain information about its practices, and include, without limitation, investigation of compliance with, and possible violations of, the Communications Act of 1934 and rules promulgated by the FCC. The Company has responded to the various requests made by the FCC and has been fully cooperating with the FCC in these matters.

~~Purple~~As ~~Communications,~~a ~~Inc.,~~certified aprovider of ~~Delaware~~telecommunications ~~corporation~~relay ~~(the~~services (“~~Company~~TRS”), isthe aCompany ~~party~~is entitled to ~~that~~reimbursement ~~certain~~by ~~Credit~~Federal ~~Agreement~~Interstate ~~(as~~TRS ~~amended,~~Fund ~~restated, supplemented or otherwise modified from time to time,~~ (the “~~First Lien Credit Agreement~~Fund”), ~~dated~~for asthe provision of ~~January 10,~~TRS ~~2008, by~~which ~~and~~allow ~~among~~hearing ~~the~~and ~~Company,~~speech asimpaired ~~borrower,~~individuals the ~~lenders~~ability ~~from~~to ~~time~~engage toin telecommunications ~~time~~in ~~party~~a ~~thereto~~manner ~~(the~~that ~~“First~~is ~~Lien~~functionally ~~Lenders”),~~equivalent to the ~~letter~~ability of ~~credit~~an ~~issuers~~individual ~~from~~that ~~time~~is tonot ~~time~~hearing ~~party~~or ~~thereto,~~speech ~~Churchill~~impaired. ~~Financial~~TRS ~~LLC~~includes, asamong ~~administrative~~other ~~agent (the “First Lien Administrative Agent”)~~services, ~~and~~video ~~Ableco~~relay ~~Finance~~services ~~LLC, as collateral agent~~ (~~the~~ “~~Collateral Agent~~VRS”) and ~~together~~internet ~~with~~protocol ~~the~~relay ~~First Lien Administrative Agent, the~~ services (“~~First~~IP ~~Lien Agents~~Relay”).

On ~~December~~February 2219, ~~2009~~2010, subsequent to the ~~Company~~filing ~~and~~of ~~its~~the ~~subsidiaries~~Company’s ~~entered~~Form 10-Q ~~into~~for athe period ~~Fifth~~ended ~~Amendment~~September 30, ~~Consent~~2009, ~~and~~the ~~Waiver~~Company toreceived ~~Credit~~a ~~Agreement~~notice ~~(the “Fifth~~of ~~Amendment~~a todemand ~~First~~for ~~Lien~~payment ~~Credit~~for ~~Agreement”),~~erroneous byreceipt ~~and~~of ~~among~~funds from the ~~Company,~~National asExchange ~~borrower~~Carriers Association, ~~the~~or ~~other~~NECA, ~~loan~~which ~~parties~~administers ~~thereto,~~TRS Fund (the “First ~~Lien~~Notice”). ~~Lenders,~~Pursuant to the ~~letter~~First ofNotice, ~~credit~~the ~~issuers~~FCC ~~from~~stated ~~time~~that toit ~~time~~has ~~party~~determined ~~thereto,~~that the ~~First~~Company ~~Lien~~has ~~Administrative Agent,~~received ~~and~~one ~~the~~or ~~Collateral~~more ~~Agent.~~erroneous ~~The~~overpayments ~~Fifth~~from ~~Amendment~~NECA relating to ~~First~~international-to-international ~~Lien~~calls ~~Credit~~that ~~Agreement~~the ~~became~~FCC ~~effective~~now contends are not compensable as ofTRS ~~December 21,~~calls during the period from July 2008 to July 2009. ~~(except~~The ~~for~~stated ~~certain~~amount ~~provisions~~of ~~dealing~~such ~~with~~overpayments ~~interest~~is ~~rates~~$1,740,406.26, which ~~became~~amount ~~effective~~is due and payable to the FCC as of ~~September 30,~~the ~~2009)~~date of the First Notice.

~~Pursuant~~On toFebruary 25, 2010, the ~~Fifth~~Company ~~Amendment~~received toa ~~First~~second ~~Lien~~notice ~~Credit~~of ~~Agreement,~~a demand for payment for erroneous receipt of funds from NECA (the “Second ~~First~~Notice”). ~~Lien~~The ~~Agents~~Second ~~and~~Notice was issued concurrently with the ~~First~~Declaratory ~~Lien~~Ruling ~~Lenders~~discussed ~~agreed~~in Item 8.01 below. Pursuant to ~~waive~~ ~~certain~~the ~~existing~~Second ~~events~~Notice, ofthe ~~default~~FCC ~~under~~stated that it has determined that the ~~First~~Company ~~Lien~~has ~~Credit~~received ~~Agreement~~one or more erroneous overpayments from NECA relating to VRS and ~~consented~~IP Relay calls made by or to a ~~proposed~~Company ~~amendment~~employee, toor one of the Company’s ~~certificate~~subcontractors, ofduring ~~incorporation~~the period from January 2008 to ~~increase~~November ~~the~~2009. ~~authorized~~The ~~shares~~stated amount of ~~common~~such ~~stock~~overpayments is $16,718,658.11, which amount is due and ~~preferred~~payable ~~stock~~to the FCC as of the date of the Second Notice.

~~Pursuant~~The todemands for payment by the ~~Fifth~~FCC ~~Amendment~~in tothe First ~~Lien~~Notice ~~Credit~~and ~~Agreement,~~the Second Notice represent direct financial obligations that are material to the ~~following~~Company. ~~terms~~Because the demands for payment were due on the respective dates of the First ~~Lien~~Notice ~~Credit~~and ~~Agreement~~Second ~~have~~Notice, the payments are ~~been~~delinquent ~~amended:~~and may be subject to additional charges. Interest accrues from the date of delinquency if the payments are not made within 30 days. Additionally, a penalty of six percent is charged if any portion of the payments remains unpaid after 90 days.

~~(1)~~Both ~~Revolving~~of ~~Credit~~the ~~Commitment.~~First ~~The~~Notice ~~Revolving~~and ~~Credit~~Second ~~Commitment~~Notice ~~has~~indicate ~~been~~that ~~reduced~~the ~~from~~FCC’s ~~$13,000,000~~review ~~to $8,000,000.~~process As of ~~December 22, 2009,~~ the Company’s ~~had~~business practices ~~borrowed~~continues, ~~the~~and ~~entire~~that ~~$8,000,000~~the ~~and~~FCC nomay ~~remaining~~determine ~~credit~~that ~~was~~additional ~~available~~overpayments ~~under~~have ~~the~~been ~~First~~made ~~Lien~~to ~~Credit~~the ~~Agreement~~Company.

(2) Interest Rates. The Applicable Margin is 6% with respect to Base Rate Loans and 7% with respect to Eurodollar Rate Loans. Previously, the Applicable Margin varied between 3.25% and 4.0% with respect to Base Rate Loans and between 4.25% and 5% with respect to Eurodollar Rate Loans, depending on the level of Consolidated Senior Leverage Ratio. In addition, the definition of Base Rate has been amended such that the Base Rate is equal to the highest of the prime rate, 0.5% above the Federal Funds Rate, the one-month Eurodollar Rate plus 1%, and 4% per annum. The Eurodollar Base Rate has also been amended to provide for a 3% floor.

(3) Financial Covenants. The financial covenants have been revised. The financial covenants now include a maximum Consolidated Leverage Ratio, a limit on Capital Expenditures, a maximum Consolidated Senior Leverage Ratio, and a minimum Consolidated Fixed Charge Coverage Ratio. The minimum Revolver Availability plus cash and unrestricted Cash Equivalents covenant has been eliminated. Certain related definitions have been revised or added and the covenant levels have been adjusted.

~~(4)~~In ~~Amortization~~addition, of the ~~Term~~First ~~Loans.~~Notice ~~The~~stated ~~Term~~that ~~Loans~~the ~~amortize~~FCC asdirected ~~follows:~~NECA ~~$100,000~~to ~~per~~suspend payment for ~~fiscal~~December ~~quarter~~2009, ~~through~~which ~~June~~the Company had anticipated receiving on February 3019, 2010. ~~and~~In ~~$250~~the Second Notice,~~000~~ ~~per~~the ~~fiscal~~FCC ~~quarter~~further ~~thereafter.~~directed ~~Previously,~~NECA to suspend all further payments to the ~~Term~~Company. ~~Loans~~The ~~amortized~~Company’s atprimary ~~$100~~source of revenue,~~000~~ ~~per~~and ~~fiscal~~its ~~quarter~~ability to continue operations, is dependant upon payments from NECA for TRS minutes. ~~The~~Approximately ~~Term~~90% ~~Loans~~of ~~remain~~all ~~due~~of ~~and~~the ~~payable~~Company’s inrevenue ~~full~~is ongenerated from TRS minutes paid by the ~~Scheduled~~TRS ~~Term~~Fund ~~Loan~~administered ~~Maturity~~by ~~Date~~NECA. On March 1, 2010, the Company filed an ~~(January~~Emergency 10Stay Request and Application for Review with the FCC, ~~2014)~~seeking due process regarding the FCC’s withholding of funds owed to the Company. The outcome of the Company’s Emergency Stay Request and Application for Review is uncertain.

~~(5)~~Item ~~Mandatory Prepayment~~2.04 ~~The~~Triggering ~~Fifth~~Events ~~Amendment~~That toAccelerate ~~First~~or ~~Lien~~Increase ~~Credit~~a ~~Agreement~~Direct ~~added~~Financial ~~specified circumstances~~Obligation ~~whereby~~or ~~the~~an ~~Company~~Obligation isunder ~~required~~an toOff-Balance ~~make~~Sheet ~~a mandatory prepayment~~Arrangement.

The Company is a party to that certain Credit Agreement (6)as ~~Reporting~~amended, ~~Requirements;~~restated, ~~Event~~supplemented ~~of Default.~~or ~~The~~otherwise ~~Fifth~~modified ~~Amendment~~from time to ~~First~~time, ~~Lien~~ the “Credit Agreement”), ~~added~~dated ~~additional~~as ~~reporting~~of ~~obligations~~January 10, 2008, by and among the Company, as borrower, the lenders from time to time party thereto (the “Lenders”), the letter of credit issuers from time to time party thereto, Churchill Financial LLC, as administrative agent (the “Administrative Agent”), and anAbleco ~~additional~~Finance ~~event~~LLC, as collateral agent. The Credit Agreement provides for a term loan of ~~default~~$40 million and a revolving line of credit for $8 million, all of which is outstanding.

As a result of the delivery of the First Notice and the Second ~~Lien~~Notice by the FCC, the Administrative Agent delivered notice to the Company on February 25, 2010 stating that the Company is in default under the Credit ~~Facilities:~~Agreement. The notice further stated that the Administrative Agent and the Lenders have not waived, and are not in a position at this time to waive, the defaults resulting from delivery of the First Notice and the Second Notice and that the conditions precedent to any further extensions of credit under the Credit Agreement will not be satisfied so long as the defaults are continuing.

~~The~~Item Company is a party to that certain Second Lien Credit Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Second Lien Credit Agreement”), dated as of January 10, 2008, by and among the Company, as borrower, the lenders from time to time party thereto (the “Second Lien Lenders”), and Clearlake Capital Group, L8.~~P.,~~01 asOther ~~administrative agent (the “Second Lien Agent”)~~Events. ~~The Second Lien Credit Agreement is filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on January 16, 2008.~~

~~Concurrently~~Also ~~with~~on February 25, ~~entering~~2010, ~~into~~ the ~~Fifth~~Consumer ~~Amendment~~and toGovernmental ~~First~~Affairs ~~Lien Credit~~Bureau ~~Agreement,~~of the ~~Company~~FCC ~~and~~(the ~~its~~“CGB”) ~~subsidiaries~~issued ~~entered~~a ~~into~~Declaratory Ruling (the ~~Fifth~~“Ruling”) ~~Amendment,~~which ~~Consent~~stated ~~and~~that ~~Waiver~~VRS calls made by or to a VRS provider’s employee, or the ~~Second~~employee ~~Lien~~of ~~Credit~~a provider’s ~~Agreement~~subcontractor, (are not eligible for compensation from the ~~“Fifth~~TRS ~~Amendment~~Fund toon ~~Second~~a ~~Lien~~per-minute ~~Credit~~basis. ~~Agreement”)~~Instead, ~~dated~~the asCGB stated that TRS providers are indirectly compensated for such calls by including the costs of ~~December 22,~~such ~~2009,~~calls ~~among~~in business expenses ~~the~~reported ~~Company,~~to asthe ~~borrower~~FCC, which the ~~other~~FCC ~~loan~~then ~~parties~~uses ~~thereto,~~to calculate rates for qualified TRS minutes. The Ruling also stated that VRS calls placed for the ~~Second~~purpose ~~Lien~~of ~~Lenders~~generating compensable minutes are not, and ~~the~~never ~~Second~~have ~~Lien~~been, ~~Agent~~compensable from the TRS Fund. Finally, ~~The~~the ~~Fifth~~Ruling ~~Amendment~~stated that VRS Voice Carry Over used to ~~Second~~connect ~~Lien~~two ~~Credit~~hearing ~~Agreement~~users ~~became~~and ~~effective~~VRS calls used to connect two users who are both outside the United States do not qualify as ofTRS, ~~December 21~~and, ~~2009~~therefore, ~~(except~~are ~~for~~not acompensable ~~certain~~by ~~provision~~the ~~dealing~~TRS Fund. The ~~with~~Company ~~interest~~is ~~rates,~~currently ~~which~~in ~~became~~the ~~effective~~process asof evaluating the potential impact of ~~September 30,~~the ~~2009)~~Ruling on the Company and the TRS industry as a whole.

~~Pursuant~~The toCompany has been involved in settlement discussions with the ~~Fifth~~FCC ~~Amendment~~with respect to ~~Second~~the ~~Lien~~FCC subpoenas and letters of inquiry. The settlement discussions have focused on certain Company practices, including: internal video relay service ~~Credit~~conference ~~Agreement~~calls, ~~the~~particularly ~~Second~~multi-party ~~Lien~~internal ~~Agent~~calls that did not include a hearing participant, international calls and ~~the~~third-party ~~Second~~contractual ~~Lien~~relationships. ~~Lenders~~The ~~agreed~~Company intends to ~~waive,~~continue ~~subject~~ to ~~conditions,~~pursue ~~certain~~settlement ~~existing~~discussions ~~events~~and ofwill ~~default~~attempt ~~under~~to include resolution of the ~~Second~~matters ~~Lien~~set ~~Credit~~forth ~~Agreement~~in the First Notice and ~~consented~~the toSecond aNotice ~~proposed~~as ~~amendment~~part toof those discussions. However, the Company’s can provide no assurances that future settlement discussions will occur, or if they do occur, will result in ~~certificate~~resolution of ~~incorporation~~any toof ~~increase~~the matters previously discussed with the ~~authorized~~FCC ~~shares~~or ofthe ~~common~~matters ~~stock~~set forth in the First Notice and ~~preferred~~the ~~stock~~Second Notice.

Pursuant to the Fifth Amendment to Second Lien Credit Agreement, the following terms of the Second Lien Credit Agreement have been amended:

(1) PIK Interest Period. The PIK Interest Period is now July 1, 2009 through December 31, 2010. Previously, it was July 1, 2009 through June 30, 2010.

(2) Applicable Margin. The Applicable Margin is (a) 13.5% for the period July 1, 2009 through December 20, 2009, (b) 14.0% for the period December 21, 2009 through December 31, 2010, and (c) 11.0% otherwise. Previously, the Applicable Margin was 13.5% through June 30, 2010 and 9% otherwise.

(3) Financial Covenants. The financial covenants have been revised to correspond to the changes made to the financial covenants in the First Lien Credit Agreement, except that the Fifth Amendment to Second Lien Credit Agreement did not add a maximum Consolidated Senior Leverage Ratio covenant, and in certain circumstances they are less restrictive than those set forth in the First Lien Credit Agreement.

~~(4)~~If ~~Mandatory~~the ~~Prepayment.~~FCC ~~The~~does ~~Fifth~~not ~~Amendment~~retract its demand for payment, or enter into an agreement with the Company to resolve the matters addressed in the First Notice and Second ~~Lien~~Notice, ~~Credit~~as ~~Agreement~~well ~~added~~as any other FCC investigations, in a manner that would permit the Company to continue to collect revenue from NECA and to structure any payment obligations to ~~similar~~the ~~mandatory~~FCC ~~prepayment~~over ~~sections~~time, the demands set forth in the First Notice and Second Notice will have a material adverse effect on the Company and its financial condition, results of operations and cash flows. If the Company is unable to collect funds from NECA, as ~~contained~~indicated in the ~~Fifth~~First ~~Amendment~~Notice and Second Notice, it is expected that current cash and cash equivalents will not be sufficient to continue operation of the Company, and the Company may be required to cease operations. The Company is currently in the process of evaluating the effect, if any, of the First ~~Lien~~Notice, ~~Credit~~the ~~Agreement~~Second Notice and the Ruling on the Company’s previously reported financial statements.

(5) Reporting Requirements/Events of Default. The Fifth Amendment to Second Lien Credit Agreement added similar reporting requirements and an additional Event of Default as contained in the Fifth Amendment to First Lien Credit Agreement.

(6) Anniversary Fee. The Fifth Amendment to Second Lien Credit Agreement provides for the payment of a 0.75% Anniversary Fee due on June 30, 2011, based on the outstanding principal balance of the Loans (including accrued and unpaid PIK interest thereon, if any) on such date.

Dominic Gomez Separation Agreement:

The Company entered into a Separation Agreement and General Release, effective as of December 18, 2009, with Dominic Gomez, the former President of the Company.

Pursuant to the Separation Agreement and General Release, the Company has agreed to pay Mr. Gomez a lump sum payment in an amount equal to one (1) month of his annual salary, minus standard withholdings. In exchange, Mr. Gomez has released the Company from any and all claims, known and unknown, which he has or might otherwise have had against the Company arising anytime prior to December 11, 2009.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

See Item 1.01 above.

Item 3.02 – Unregistered Sale of Equity Securities.

On December 14, 2009, the Company entered into a Series B Preferred Stock Purchase Agreement (the “Purchase Agreement”), with CCP A, L.P., a current stockholder of the Company (“Purchaser”), pursuant to which the Company agreed to sell and issue to the Purchaser, in reliance on Section 4(2) of the Securities Act of 1933, as amended, up to an aggregate of 3,333,333 in shares of the Company’s Series B Preferred Stock, $0.01 par value (the “Preferred Shares”), in two tranches (the “Private Placement”) for aggregate consideration of up to $5.0 million. The Purchase Agreement was filed as Exhibit 10.1 to the Company’s Report on Form 8-K filed on December 17, 2009. The initial closing of the Private Placement occurred on December 14, 2009, at which time the Company issued and sold an aggregate of 1,333,333 Preferred Shares for aggregate consideration of $2.0 million. The second closing under the Purchase Agreement for an additional 2,000,000 Preferred Shares for consideration of $3.0 million occurred on December 22, 2009.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

See Item 1.01 above.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	~~PURPLE COMMUNICATIONS, INC.~~	PURPLE COMMUNICATIONS, INC.
Date: December 31, 2009	By:	/s/ MICHAEL J. PENDERGAST
Date: March 2, 2010		By:	/s/ MICHAEL J. PENDERGAST
		~~Michael J. Pendergast~~	Michael J. Pendergast
		~~General Counsel & Corporate Secretary~~	General Counsel & Corporate Secretary

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