May 4, 2018 PRIVATE & CONFIDENTIAL
May 4,
2018
PRIVATE & CONFIDENTIAL
Fusion
Connect, Inc. (f/k/a Fusion Telecommunications International,
Inc.)
000
Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxx, Xxx Xxxx 00000
Ladies
and Gentlemen:
Reference is made
to the Agreement and Plan of Merger, dated as of August 26, 2017
(as it may be amended or modified from time to time in the future,
the “Merger
Agreement”), by and among Fusion Telecommunications
International, Inc., a Delaware corporation (the
“Company”),
Birch Communications Holdings, Inc., a Georgia corporation, and
Fusion BCHI Acquisition LLC, a Delaware limited liability company.
Capitalized terms used but not defined herein have the meaning
given to them in the Merger Agreement. This letter agreement amends
and restates the indemnification letter agreement delivered by BCHI
Holdings, LLC, a Georgia limited liability company
(“Holdings”), to the
Company, dated August 26, 2017, in its entirety.
Subject
to the occurrence of the Closing, for a period of eighteen (18)
months following the Closing (the “Indemnity Period”),
Holdings agrees to indemnify and hold harmless the Company for and
against any and all losses in excess of $500,000 that are related
to, or arise from, any of the pending matters listed below that are
incurred during the Indemnity Period; provided, that in no event
will Holdings be responsible for any such losses exceeding
$25,000,000 in the aggregate (the “Cap”). Holdings shall
have the right to assume the defense of these matters and shall
have the right to settle such matters so long as such settlement
does not involve any monetary payment by the Company and/or its
Subsidiaries and does not otherwise have a material adverse effect
on the business of the Company and its Subsidiaries. Amounts owed
by Holdings under this indemnity may be paid in cash or through the
transfer to the Company of a number of shares of Company Common
Stock equal to (rounded up or down to the nearest whole share) (1)
the amount of such obligation divided by (2) the greater of (A)
$2.00, or (B) the weighted average daily closing bid price of the
Company Common Stock, as reported by NASDAQ (or any successor to
such exchange), for five (5) consecutive trading days ending
immediately prior to the third (3rd) Business Day preceding the date of
such transfer. Any cash payment and/or return of shares of Company
Common Stock shall be completed within five (5) Business Days of
the date that the Company’s (or its subsidiary’s)
liability has been determined. During the Indemnity Period,
Holdings shall, at all times, maintain in its name liquid assets
and shares of Company Common Stock with an aggregate value of no
less than the Cap; provided, that for the purposes of determining
the value of shares of Company Common Stock, such shares will not
be deemed to have a value of less than $2.00 per share, regardless
of the then-current market price for such shares.
1.
EB-IHD-17-00023706,
Federal Communications Commission Letter of Inquiry to Birch
Communications, Inc. (dated May 2, 2017).
2.
California Public
Utilities Commission Data Request No. 1 (dated October 1, 2015),
Data Request No. 2 (dated March 8, 2016), Data Request No. 3 (dated
March 7, 2017); Data Request No. 4 (dated July 27, 2017) to Birch
Telecom of the West, Inc. and Cbeyond Communications,
LLC.
3.
Wyoming Universal
Service Fund Audit Notification Letter (dated August 1,
2017).
4.
Kansas Corporation
Commission Docket No. 18-BTKT-033-KSF, Audit of Birch Telecom of Kansas, Inc. by the
Kansas Universal Service Fund (KUSF) Administrator Pursuant to
K.S.A. 2016 Supp. 66-2010(b) for KUSF Operating Year 20, Fiscal
Year March 2016-February 2017.
5.
Kansas Corporation
Commission Docket No. 18-TEMT-043-KSF, Audit of Tempo Telecom, LLC by the Kansas
Universal Service Fund (KUSF) Administrator Pursuant to K.S.A. 2016
Supp. 66-2010(b) for KUSF Operating Year 20, Fiscal Year March
2016-February 2017.
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6.
Kansas Corporation
Commission Docket No. 18-ICIT-041-KSF, Audit of Ionex Communications, Inc. by the
Kansas Universal Service Fund (KUSF) Administrator Pursuant to
K.S.A. 2016 Supp. 66-2010(b) for KUSF Operating Year 20, Fiscal
Year March 2016-February 2017.
7.
Xxxxxxx X. Xxxxxx x. Xxxxx Communications, Inc., Ionex
Communications, Inc., Birch Telecom of Missouri, Inc and certain
named individual defendants (Circuit Court of St. Louis County,
Missouri)
8.
Riepen v. Cbeyond, Inc. et al
9.
EB-TCD-15-00020193,
Federal Communications Commission Letter of Inquiry to Birch
Communications, Inc. (dated February 23, 2018).
10.
CenturyLink Communications, LLC, and Level 3
Communications, LLC, x. Xxxxx Communications, Inc., Formal
Complaint, Proceeding No. 18-73, Bureau ID No. EB-18-MD-002 (filed
with Federal Communications Commission on March 23,
2018).
11.
Attorney General of the State of Illinois, People of the State of Illinois x. Xxxxx
Telecom of the Great Lakes, Inc., Subpoena Duces Tecum (ref:
Document #2018005), served via U.S. Mail April 17,
2018.
12.
State of Oklahoma Office of Attorney General, Investigation of Birch Telecom of Oklahoma,
LLC, Investigative Demand to Produce Documentary Material or
Physical Evidence and Furnish a Report (issued April 25,
2018).
This
letter agreement will be governed by, and construed and enforced in
accordance with, the internal Laws of the State of Delaware,
without regard to any applicable conflict of laws principles
(whether of the State of Delaware or any other jurisdiction). This
letter agreement may be executed in two or more counterparts, all
of which will be considered one and the same agreement and will
become effective when counterparts have been signed by each of the
parties hereto and delivered to the other party, it being
understood that each party need not sign the same
counterpart.
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If you
agree with the foregoing, please sign and return a copy of this
letter agreement, which will constitute our agreement with respect
to the subject matter hereof.
Very
truly yours,
BCHI
HOLDINGS, LLC
By: /s/ Xxxxxxxx X. Xxxxx,
Xx.
Name:
Xxxxxxxx X. Xxxxx, Xx.
Title:
Manager
AGREED AND ACCEPTED:
(f/k/a
Fusion Telecommunications International, Inc.)
By: /s/ Xxxxx X. Xxxxxxxx,
Xx.
Name:
Xxxxx X. Xxxxxxxx, Xx.
Title:
Executive Vice President and
General
Counsel
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