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SIXTH
AMENDMENT
TO
AGREEMENT
AND PLAN OF MERGER
This
SIXTH AMENDMENT TO AGREEMENT AND
PLAN OF MERGER, dated as of March 12, 2018 (this
“Amendment”), is entered
into by and among Fusion Telecommunications International, Inc., a
Delaware corporation (the “Company”), Fusion BCHI
Acquisition LLC, a Delaware limited liability company
(“Merger
Sub”), and Birch Communications Holdings, Inc., a
Georgia corporation (“BCHI”). Capitalized terms
used but not otherwise defined herein shall have the meanings given
to them in the Merger Agreement.
RECITALS
A.
The Parties previously entered into that certain Agreement and Plan
of Merger, dated as of August 26, 2017, as amended by the First
Amendment to Agreement and Plan of Merger, dated as of September
15, 2017, the Second Amendment to Agreement and Plan of Merger,
dated as of September 29, 2017, the Third Amendment to Agreement of
Plan of Merger, executed on October 24, 2017, the Amended and
Restated Third Amendment to Agreement and Plan of Merger, dated as
of October 27, 2017, the Fourth Amendment to Agreement and Plan of
Merger, dated January 24, 2018, and the Fifth Amendment to
Agreement and Plan of Merger, dated as of January 25, 2018
(collectively, the “Merger
Agreement”).
B.
The Parties desire to further amend the Merger Agreement as set
forth herein.
The
Parties hereby agree as follows:
1. Section 1.2(b) of
the Merger Agreement is hereby amended and restated to read as
follows:
“(b) Board
of Directors. The size of the Company Board will initially
be fixed at seven (7) members. The initial members of the Company
Board as of the Effective Time will be determined prior to the
Closing in accordance with the provisions of the
Stockholders’ Agreement; provided that such initial members
to be designated by the Company shall be determined by the
Company’s Compensation and Nominating Committee subject to
Company Board approval.”
2. Section 7.1(k) of
the Merger Agreement is hereby amended and restated to read as
follows:
“(k) Selection
of Directors. All seven of the initial members of the
Company Board shall have been determined in accordance with the
provisions of the Stockholders’
Agreement.”
3. Exhibit B to the Merger
Agreement is hereby deleted and replaced with the Exhibit B attached
hereto.
4. Effect of Amendment. This
Amendment shall not constitute a waiver, amendment or modification
of any other provision of the Merger Agreement not expressly
contemplated hereby. Except as specifically modified and amended
hereby, the Merger Agreement shall remain unchanged and in full
force and effect. From and after the date hereof, each reference in
the Merger Agreement to “this Agreement”,
“hereunder”, “hereof”, “herein”
or words of similar meaning shall mean and be a reference to the
Merger Agreement as amended by this Amendment. Notwithstanding the
foregoing, references to the date of the Merger Agreement, and
references to the “date hereof”, “the date of
this Agreement” or words of similar meaning in the Merger
Agreement shall continue to refer to August 26, 2017.
5. Governing Law. This Amendment
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).
6. Jurisdiction. Section 9.8 (Jurisdiction) of
the Merger Agreement is incorporated herein by reference and made a
part hereof as if fully set forth herein.
7. Counterparts. This Amendment
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 and
delivered to the other Parties, it being understood that each Party
need not sign the same counterpart. PDF transmissions of this
Amendment shall be deemed to be the same as the delivery of an
executed original.
[Signatures
appear on following page.]
IN WITNESS WHEREOF, the Parties have
caused this Amendment to be executed by their respective officers
thereunto duly authorized as of the date first above
written.
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FUSION
TELECOMMUNICATIONS INTERNATIONAL, INC.
By:
_/s/ James P. Prenetta,
Jr,
Name:
James P. Prenetta, Jr.
Title:
Executive Vice President and
General Counsel
FUSION
BCHI ACQUISITION LLC
By:
/s/ Gordon Hutchins,
Jr.
Name:
Gordon Hutchins, Jr.
Title:
Manager
BIRCH
COMMUNICATIONS HOLDINGS, INC.
By:
/s/ Gordon P. Williams,
Jr.
Name:
Gordon P. Williams, Jr.
Title: Senior Vice President and General Counsel
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Exhibit B
Attached
hereto.
STOCKHOLDERS’ AGREEMENT
This
STOCKHOLDERS’ AGREEMENT (this “Agreement”) is entered
into as of [●], 2018 among Fusion Connect, Inc. , a
Delaware corporation (the “Company”), BCHI Holdings,
LLC, a Georgia limited liability company (“Holding LLC”), the other
Persons set forth on Schedule I hereto (the
“Initial FTI
Stockholders”) and each Person that becomes a party to
this Agreement by delivering to the Company and Holding LLC a duly
executed joinder to this Agreement in the form attached hereto as
Exhibit A hereto or
such other form approved by Holding LLC and the Company (together,
with the Initial FTI Stockholders, the “FTI Stockholders” and
each an “FTI
Stockholder).
RECITALS
A. This
Agreement is being entered into in connection with the consummation
of the transactions contemplated by the Merger Agreement, dated as
of August 26, 2017 (as amended or modified from time to time, the
“Merger
Agreement”), by and among the Company, Birch
Communications Holdings, Inc., a Georgia corporation,
and Fusion BCHI
Acquisition LLC, a Delaware limited liability company.
B. After
giving effect to the transactions contemplated by the Merger
Agreement, Holding LLC and the Initial FTI Stockholders own the
equity securities of the Company in the respective amounts
indicated on Schedule
I hereto.
C. Holding
LLC, the FTI Stockholders and the Company wish to set forth certain
agreements regarding the relationships among them and the
governance of the Company.
In
consideration of the premises, and of the representations,
warranties, covenants and agreements set forth herein, the Company
and each Stockholder agree as follows:
ARTICLE
I.
DEFINITIONS
Section 1.1. Certain Defined Terms. As used
herein, the following terms shall have the following
meanings:
“Affiliate” means (i) with
respect to any Person, any other Person directly or indirectly
controlling, controlled by or under common control with, such
Person, (ii) with respect to Holding LLC, any member of Holding LLC
or any trust therefor, and (iii) with respect to any natural
person, any spouse or lineal descendant of such person, and in each
case, any trust therefor.
“Agreement” has the
meaning set forth in the preamble.
“beneficial owner” or
“beneficially
own” has the meaning given such term in Rule 13d-3
under the Exchange Act, and a Person’s beneficial ownership
of Common Stock or other Equity Securities of the Company shall be
calculated in accordance with the provisions of such rule. For the
avoidance of doubt, no Person shall be deemed to beneficially own
any security solely as a result of such Person’s execution of
this Agreement.
“Board” means the Board of
Directors of the Company.
“Business Day” means any
day that is not a Saturday, Sunday or other day on which banks are
required or authorized by law to be closed in New York
City.
“Bylaws” means the Bylaws
of the Company, as in effect on the date hereof and as the same may
be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
“Cause” shall mean the
occurrence of any of the following:
(A) any action or
omission by the applicable Director that constitutes (1) a criminal
act committed in connection with or related to the activities of
the Company or (2) fraud, willful misconduct or gross negligence in
the performance of such Director’s duties as a director of
the Company or otherwise relating to the activities of the
Company;
(B) the conviction of
the applicable Director of any criminal offense unrelated to the
activities of the Company that constitutes a felony or for which a
term of imprisonment of any duration is imposed (other than an
offense under any road traffic legislation, not accompanied by any
other criminal offense that constitutes a felony);
(C) a breach by the
applicable Director of a material securities law or regulation or a
material rule of any securities exchange of the Securities and
Exchange Commission; or
(D) if such Director
also is a party to a consulting, services, severance or employment
agreement with the Company and such term is defined therein, the
meaning as set forth in such agreement.
“Charter” means the
Certificate of Incorporation of the Company, as in effect on the
date hereof and as the same may be amended, supplemented or
otherwise modified from time to time.
“Closing” means the
closing of the Transaction as defined in and as contemplated by the
Merger Agreement.
“Common Stock” means the
common stock, par value $.01 per share, of the Company, and any
securities issued in respect thereof, or in substitution therefor,
in connection with any stock split, dividend or combination, or any
reclassification, recapitalization, merger, consolidation, exchange
or other similar reorganization.
“Communications Act” means
the Communications Act of 1934.
“Company” has the meaning
set forth in the preamble.
“Control” (including the
terms “controlling”,
“controlled
by” and “under common control
with”), with respect to the relationship between or
among two or more Persons, means the possession, directly or
indirectly, of the power to direct or cause the direction of the
affairs or management of a Person, whether through the ownership of
voting securities, as trustee or executor, by contract or
otherwise.
“Covered Claims” has the
meaning set forth in Section 4.16(a).
“Director” means any
member of the Board.
“Equity Securities” means
any and all shares of Common Stock or other equity securities of
the Company, securities of the Company convertible into, or
exchangeable or exercisable for (whether presently convertible,
exchangeable or exercisable or not), such shares, and options,
warrants or other rights (whether presently convertible,
exchangeable or exercisable or not) to acquire such shares of
Common Stock or other equity securities of the
Company.
“Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“FCC Regulations” means
the rules, regulations, published decisions, published orders and
policies promulgated by the Federal Communications Commission and
in effect from time to time.
“FTI Director” means, as
of any date, each Person who is a director of the Company on such
date and who was designated as a director nominee in accordance
with the provisions of Section 2.1(b)(ii) and elected
to the Board at an annual or special meeting of the stockholders of
the Company.
“FTI Stockholders” has the
meaning set forth in the preamble.
“FTI Nominating Committee”
means, as of any date on which an action or decision of the FTI
Nominating Committee is required or permitted to be taken pursuant
to this Agreement, the FTI Directors serving on the Board on such
date.
“Group” has the meaning
set forth in Section 13(d)(3) of the Exchange Act.
“Holding LLC” has the
meaning set forth in the preamble.
“Information” means all
confidential information about the Company or any of its
Subsidiaries that is or has been furnished to any Stockholder or
any of its Representatives by or on behalf of the Company or any of
its Subsidiaries, or any of their respective Representatives
(whether written or oral or in electronic or other form and whether
prepared by the Company or any of its Subsidiaries or their
respective Representatives), together with that portion of all
written or electronically stored documentation prepared by such
Stockholder or its Representatives based on or reflecting, in whole
or in part, such information;provided, however, that the term
“Information” shall not
include any information that (i) is or becomes generally available
to the public through no action or omission by such Stockholder or
its Representatives in violation of this Agreement, (ii) is or
becomes available to such Stockholder on a non-confidential basis
from a source, other than the Company or any of its Subsidiaries,
or any of their respective Representatives, that, to such
Stockholder’s knowledge, after reasonable inquiry, is not
prohibited from disclosing to such Stockholder by a contractual,
legal or fiduciary obligation or (iii) is independently developed
by a Stockholder or its Representatives or Affiliates without use
of any Information.
“Initial FTI Stockholders”
has the meaning set forth in the preamble.
“Law” means the law of any
jurisdiction, whether international, multilateral, multinational,
national, federal, state, provincial, local or common law, or an
order, act, statute, ordinance, regulation, rule, extension order
or code promulgated by a governmental authority (including any
department, court, agency or official, or non-governmental
self-regulatory organization, agency or authority and any political
subdivision or instrumentality thereof).
“Merger Agreement” has the
meaning provided in the first recital.
“Person” means any
individual, corporation, limited liability company, limited or
general partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any
agency or political subdivisions thereof or any Group comprised of
two or more of the foregoing.
“Representatives” means
with respect to any Person, any of such Person’s, or its
Affiliates’, directors, officers, employees, general
partners, Affiliates, direct or indirect shareholders, members or
limited partners, attorneys, accountants, financial and other
advisers, and other agents and representatives, including, in the
case of any Stockholder, any designee nominated for election to the
Board or a committee thereof by such Stockholder.
“Sale of the Company”
means, in any one or more related transactions, a merger (other
than a merger solely for the purpose of forming a holding company
with no change in indirect ownership or to effect a change in the
Company’s state of incorporation), business combination or
sale of all or substantially all of the Company’s assets, in
each case, as a result of which the Directors immediately prior to
such transaction do not represent a majority of the Board
immediately following the consummation of such transaction (or
series of transactions), or the stockholders of the Company
immediately prior to such transaction do not, immediately following
the consummation of such transaction (or series of transactions),
continue to own equity securities representing more than 50% of the
vote and of the equity of the Company, of the ultimate controlling
Person (in the case of a merger or business combination) or Person
succeeding to ownership of all or substantially all of the
Company’s assets (in the case of a sale of
assets).
“Secondary Indemnitors”
has the meaning assigned to such term in Section 4.16.
“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Specified Indemnitee” has
the meaning set forth in Section 4.16.
“Stockholder” means each
of Holding LLC and the FTI Stockholders.
“Subsidiary” means, with
respect to any Person, (i) any corporation of which a majority of
the securities entitled to vote generally in the election of
directors thereof, at the time as of which any determination is
being made, or a majority of the economic interests in such
Person’s equity, are owned by such Person, either directly or
indirectly, and (ii) any joint venture, general or limited
partnership, limited liability company or other legal entity in
which such Person is the record or beneficial owner, directly or
indirectly, of a majority of the voting or equity interests or of
which such Person is the general partner or managing
member.
“Transfer” means, directly
or indirectly, to sell, transfer, assign, hypothecate or similarly
dispose of (by merger, operation of law or otherwise), either
voluntarily or involuntarily, or to enter into any contract, option
or other arrangement or understanding with respect to, the sale,
transfer, assignment, hypothecation or similar disposition of (by
merger, operation of law or otherwise), any shares of Equity
Securities beneficially owned by a Person.
“Transferee” means any
Person to whom any Stockholder or any transferee thereof Transfers
Equity Securities in accordance with the terms hereof.
“Voting Securities” means
at any time the then-issued and outstanding Common Stock and any
other securities of the Company of any kind or class having power
generally to vote for the election of Directors.
Section
1.2. Other Definitional
Provisions. Unless otherwise expressly provided, for the
purposes of this Agreement, the following rules of interpretation
shall apply:
(a) When a reference is
made in this Agreement to an article or a section, paragraph,
exhibit or schedule, such reference will be to an article or a
section, paragraph, exhibit or schedule hereof unless otherwise
clearly indicated to the contrary.
(b) Whenever the words
“include,” “includes” or
“including” are used in this Agreement, they will be
deemed to be followed by the words “without
limitation.”
(c) The words
“hereof,” “herein” and
“herewith” and words of similar import will, unless
otherwise stated, be construed to refer to this Agreement as a
whole and not to any particular provision of this
Agreement.
(d) The meaning
assigned to each term defined herein will be equally applicable to
both the singular and the plural forms of such term, and words
denoting any gender will include all genders. Where a word or
phrase is defined herein, each of its other grammatical forms will
have a corresponding meaning.
(e) A reference to any
period of days will be deemed to be to the relevant number of
calendar days, unless otherwise specified.
(f) The word
“dollars” and symbol “$” mean U.S.
dollars.
(g) References herein
to any Person shall include such Person’s heirs, executors,
personal representatives, administrators, successors and
assigns.
(h) The word
“or” shall be disjunctive but not
exclusive.
(i) The parties hereto
have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement will be construed as if
drafted jointly by the parties, and no presumption or burden of
proof will arise favoring or disfavoring any party by virtue of the
authorship of any provisions hereof.
(j) Any statute or rule
defined or referred to herein or in any agreement or instrument
that is referred to herein means such statute or rule as from time
to time amended, modified or supplemented, including by succession
of comparable successor statutes or rules and references to all
attachments thereto and instruments incorporated
therein.
ARTICLE
II.
CORPORATE GOVERNANCE
Section
2.1. Board of Directors
Matters.
(a) Board Size and Composition.
Effective as of the Closing, in accordance with Section
[●] of the
Bylaws, the size of the Board has initially been fixed at seven
Directors.
(b) Nomination of Directors.
Subject to Section
2.1(e), each Stockholder agrees with the Company that it
shall: (i) appear in person or by proxy at each annual meeting or
special meeting of the stockholders of the Company at which
Directors are to be elected for the purposes of obtaining a quorum;
(ii) at each such stockholders’ meeting, vote, in person or
by proxy, all of the Voting Securities owned by it on the date of
such meeting in favor of election of the following designees
nominated for election to the Board pursuant to this Section 2.1(b) and in
accordance with the Bylaws and the nomination procedures of the
Company; and (iii) in any action by written consent of the holders
of Voting Securities for the purpose of electing Directors, consent
to election of the following designees nominated for election to
the Board pursuant to this Section 2.1(b) and in
accordance with the Bylaws and the nomination procedures of the
Company:
(i) three (3) Persons
(at least one (1) of whom shall be an independent director within
the meaning of the NASDAQ listing standards) designated as nominees
for election to the Board by Holding LLC;
(ii) three
(3) Persons (at least one (1) of whom shall be an independent
director within the meaning of the NASDAQ listing standards)
designated as nominees for election to the Board by the FTI
Nominating Committee; and
(iii) one
(1) Person designated as a nominee for election to the Board (who
shall be an independent director within the meaning of the NASDAQ
listing standards) by Holding LLC with the prior written approval
(not to be unreasonably withheld, conditioned or delayed) of the
FTI Nominating Committee.
In the
event that either Holding LLC or the FTI Nominating Committee fails
to designate any nominee that it is entitled to designate pursuant
to this Section
2.1(b), then the Company will provide written notice of such
failure to Holding LLC or the FTI Nominating Committee, as
applicable. If such failure is not cured within ten (10) Business
Days following the transmission of such notice by the Company, then
the Board will be entitled to designate a nominee for such
position. The rights of each of Holdings LLC and the FTI Nominating
Committee to designate nominees for election to the Board as set
forth in this Section
2.1(b) are personal to each of Holdings LLC and the FTI
Nominating Committee and may not be exercised by any Transferee,
except that in the event Holding LLC no longer holds any Common
Stock but its Affiliates continue to hold Common Stock Transferred
by Holding LLC to such Affiliates (whether directly or by Transfers
through other Affiliates of Holding LLC), and such rights have not
been terminated pursuant to Section 2.1(e), the rights of
Holdings LLC to designate nominees pursuant to this Section 2.1(b) may be exercised
by the Affiliates of Holding LLC to which such Common Stock was
Transferred.
(c) Chairman and Vice Chairman of the
Board. Matthew D. Rosen will be the initial Chairman of the
Board and Holcombe T. Green, Jr. will be the initial Vice Chairman
of the Board.
(d) Removal and Replacement;
Vacancies.
(i) In the event that a
vacancy is created at any time by (i) the death, disability,
retirement, resignation or removal of any Director nominated for
election to the Board pursuant to Section 2.1(b), or (ii) there
is an increase in the size of the Board, which increase must be in
increments of two (2) Directors, the Company, by action of the
remaining Directors, shall, and the Stockholders agree with the
Company to use their reasonable best efforts to cause the remaining
Directors to, in the case of clause (i), fill the vacancy created
thereby with a replacement nominee designated by the entity (i.e.,
either Holding LLC or the FTI Nominating Committee, as the case may
be) that had designated such Director for nomination pursuant to
Section 2.1(b) as
promptly as practicable or, in the case of clause (ii), fill the
vacancies created thereby as required to maintain the proportionate
allocation of Directors contemplated by Section 2.1(b) above. In
addition, if such vacant position had been held by a Person
nominated under Section
2.1(b)(iii), then the nomination of the replacement nominee
shall be subject to the prior written approval of the FTI
Nominating Committee, in accordance with Section
2.1(b)(iii).
(ii) In
the event that a vacancy is created at any time by the death,
disability, retirement, resignation or removal of any Director
nominated for election to the Board pursuant to Section 2.1(b) and the
remaining Directors have not caused the vacancy created thereby to
be filled pursuant to Section 2.1(d)(i) by a new
designee of the appropriate Person promptly after both Holding LLC
and the FTI Nominating Committee have been notified of such
vacancy, then in such case the Company shall take all such actions
as and when requested by whichever of Holding LLC or the FTI
Nominating Committee is entitled, pursuant to Section 2.1(b) to designate a
Person to fill such vacancy (the “Designating
Stockholder”), and each other Stockholder hereby
agrees with the Company to vote, or act by written consent with
respect to, all Voting Securities beneficially owned by it on the
date of the relevant vote or action to act to fill the vacancy with
a Person designated as a replacement by the Designating Stockholder
in accordance with Section
2.1(b). Upon the written request of any Person having rights
under Section
2.1(b), each other Stockholder agrees with the Company to
vote, or act by written consent with respect to, all Voting
Securities beneficially owned by it on the date of the relevant
action to, remove any Director nominated by such Person for
election to the Board pursuant to Section 2.1(b) and to elect any
replacement Director designated for nomination by such Person
pursuant to this Section
2.1(d).
(iii) Subject
to Section 2.1(e),
unless otherwise requested in writing by the Person entitled to
nominate such Person for election to the Board under Section 2.1(b), no other
Stockholder shall take any action to cause the removal of any
Directors nominated by such Person for election to the Board
pursuant to Section
2.1(b); provided, that any Director may be removed by the
Board for Cause and, in such case, the resulting vacancy will be
filled with a Person designated as a replacement by the Designating
Stockholder in accordance with Section 2.1(b).
(iv) Any
vacancy on the Board that results from the termination of rights of
nomination pursuant to Section 2.1(e) may be filled by
action of a majority of the Board, in accordance with the Bylaws
and applicable nomination procedures of the Company.
(e) Termination of Rights of
Nomination.
(i) Upon such time as
Holding LLC and its Affiliates cease to beneficially own,
collectively, at least 20% of the number of shares of Common Stock
they collectively beneficially own immediately following the
Closing, Holding LLC
shall cease to have the right to designate any nominee for election
to the Board pursuant to Section 2.1(b).
(ii) Unless
otherwise mutually agreed by Holding LLC and the FTI Nominating
Committee, upon such time as the aggregate number of issued and
outstanding shares of Common Stock beneficially owned by Marvin
Rosen and Matt Rosen is less than that number of shares of Common
Stock equal to 1.5% of the then issued and outstanding shares of
Common Stock, the FTI Nominating Committee shall cease to have the
right to designate any nominee for election to the Board pursuant
to Section
2.1(b).
Section
2.2. Company
Cooperation. The Company shall take such action as may be
required under applicable Law, the Charter and the Bylaws (subject
to such vote of the Board as may be required) (a) to cause the
Board to consist of the number of Directors specified in
Section 2.1(a) and
(b) to cause one of the Directors to be appointed and serve as the
Chairman of the Board and another of the Directors to be appointed
and serve as the Vice Chairman of the Board in accordance with
Section 2.1(c). The
Company agrees to include in the slate of nominees to be voted upon
by stockholders of the Company the Persons designated for
nomination to the Board in accordance with Section 2.1(b). The Company
agrees that no modification or amendment of the Charter or the
Bylaws that is inconsistent with the provisions of this Agreement
shall be effective without the approval of Holding LLC and the FTI
Nominating Committee.
Section
2.3. FTI Nominating
Committee. The FTI Nominating Committee will only take such
actions under this Agreement as authorized in writing (email being
sufficient), including the nomination of individuals for election
to the Board by the FTI Nominating Committee pursuant to
Section 2.1(b)(ii),
by a majority of the FTI Nominating Committee.
Section
2.4. FTI
Stockholders. Notwithstanding anything to the contrary
herein, at such time as any Person shall cease to serve as an FTI
Director for any reason, such Person shall no longer be an FTI
Stockholder within the meaning of this Agreement and the rights and
obligations of such Person under this Agreement shall terminate at
such time. At such time as any Person shall be elected as an FTI
Director such Person shall become an FTI Stockholder within the
meaning of this Agreement but only upon execution and delivery, to
the Company and Holding LLC, of a duly executed joinder to this
Agreement in the form attached hereto as Exhibit A hereto or such other
form approved by Holding LLC and the Company.
Section
2.5. Affiliate
Transactions. Except for such transactions as are
contemplated by agreements to which the Company is a party on the
date hereof or to be entered into on the date hereof, any
transaction between the Company or any Subsidiary of the Company,
on the one hand, and a Stockholder or any Affiliate of such
Stockholder, on the other, shall require the approval of a majority
of the disinterested members of the Board.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
Section
3.1. Representations and
Warranties of the Company. The Company represents and
warrants to each Stockholder as follows:
(a) the Company has all
requisite corporate power and authority to enter into this
Agreement and to perform its obligations hereunder, and to
consummate the transactions contemplated hereby. This Agreement has
been duly authorized, executed and delivered by the Company and
constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms,
except to the extent that the enforcement hereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar Laws affecting the enforcement of creditors’ rights
generally and general equitable principles, regardless of whether
such enforceability is considered in a proceeding at law or in
equity; and
(b) the execution and
delivery of this Agreement by the Company, the performance of its
obligations hereunder, and the consummation of the transactions
contemplated hereby will not violate, conflict with or result in a
breach, or constitute a default (with or without notice or lapse of
time or both) under any provision of the Charter or
Bylaws.
Section
3.2. Representations and
Warranties of the Stockholders. Each Stockholder, severally
and not jointly, represents and warrants, solely with respect to
itself, to each other Stockholder and to the Company as
follows:
(c) such Stockholder
has all requisite power and authority to enter into this Agreement
and to perform its obligations hereunder, and to consummate the
transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by such Stockholder and
constitutes a valid and binding obligation of such Stockholder
enforceable against such Stockholder in accordance with its terms,
except to the extent that the enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar Laws affecting the enforcement of creditors’ rights
generally and general equitable principles, regardless of whether
such enforceability is considered in a proceeding at law or in
equity; and
(d) the execution and
delivery of this Agreement by such Stockholder, the performance of
its obligations hereunder, and the consummation of the transactions
contemplated hereby will not violate, conflict with or result in a
breach, or constitute a default (with or without notice or lapse of
time or both) under any provision of its charter, bylaws or other
similar organizational documents.
ARTICLE IV.
MISCELLANEOUS
Section
4.1. Not A
“Group”. The Stockholders and the Company
acknowledge that the arrangements contemplated by this Agreement
are not intended to constitute the formation of a Group. Each
Stockholder agrees that, for purposes of determining beneficial
ownership of such Stockholder, it shall disclaim any beneficial
ownership by virtue of this Agreement of the Company’s
securities owned by the other Stockholders, and the Company agrees
to recognize such disclaimer in its Exchange Act and Securities Act
reports.
Section
4.2. Termination.
This Agreement shall terminate upon the earliest of (a) a Sale of
the Company or (b) the date on which the rights of Holding LLC or
the FTI Nominating Committee pursuant to Section 2.1(b) to nominate
individuals for election to the Board have terminated in accordance
with the terms of Section
2.1(e);provided, however, that, notwithstanding
anything in this Section
4.2 to the contrary, the rights and obligations of any
particular Stockholder (other than an FTI Stockholder) under this
Agreement shall terminate on the date on which such Stockholder no
longer beneficially owns any Equity Securities;provided, further, that, notwithstanding
anything in this Section
4.2 to the contrary, the termination of the rights and
obligations of any Person who ceases to serve as an FTI Director
for any reason shall be governed by Section 2.4.
Section
4.3. Confidentiality. Each
Stockholder agrees with the Company to, and agrees with the Company
to use commercially reasonable efforts to cause its Representatives
to, keep confidential and not divulge any Information;provided, however, that nothing herein
shall prevent any Stockholder from disclosing such Information (a)
upon the order of any court or administrative agency, (b) upon the
request or demand of any regulatory agency or authority having
jurisdiction over such Stockholder or Representative, (c) to the
extent required by Law or legal process or required or requested
pursuant to subpoena, interrogatories or other discovery requests,
(d) to the extent necessary in connection with the exercise of any
remedy hereunder, (e) to other Stockholders, or (f) to such
Stockholder’s Representatives that in the reasonable judgment
of such Stockholder need to know such Information;provided, further, that, in the case of
clause (a), (b) or (c), such Stockholder shall notify the Company
of the proposed disclosure as far in advance of such disclosure as
reasonably practicable and, if requested by the Company, use
commercially reasonable efforts (but at the sole expense of the
Company) to ensure that any Information so disclosed is accorded
confidential treatment, when and to the extent
available.
Section
4.4. Amendments and
Waivers. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this
Agreement shall be effective without the approval of the Company,
Holding LLC and the FTI Nominating Committee;provided, however, that (a) this
Agreement may not be amended, modified or waived in any manner
adversely affecting the rights or obligations of any Stockholder
without the prior written consent of such Stockholder, (b) no
amendment, modification or waiver to Section 2.1 (directly or by
amendment of the definitions used therein) shall adversely affect
the rights of Holding LLC or the FTI Nominating Committee to
designate nominee(s) for election to the Board in accordance with
this Agreement without the consent of Holding LLC or the FTI
Nominating Committee, as the case may be, (c) amendment,
modification or waiver of this Section 4.4 shall require the
prior written consent of each Stockholder, and (d) any Stockholder
may terminate or waive (in writing) the benefit of any provision of
this Agreement with respect to itself for any purpose.
Section
4.5. Successors, Assigns
and Transferees. Except as expressly set forth herein, this
Agreement shall bind and inure to the benefit of, and be
enforceable by, the parties hereto and their respective successors
and permitted assigns.
Section
4.6. Notices. All
notices and other communications to be given to any party hereunder
shall be sufficiently given for all purposes hereunder if in
writing and delivered by hand, courier or overnight delivery
service, or when received in the form of an email or other
electronic transmission (receipt confirmation requested), and shall
be directed to the address set forth below (or at such other
address or email address as such party shall designate by like
notice):
if to
the Company, to:
Fusion
Connect, Inc.
420
Lexington Avenue, Suite 1718
New
York, New York 10170
Attention: James P.
Prenetta, Jr. Executive Vice President and General
Counsel
Email:
jprenetta@fusionconnect.com
if to
any Stockholder, to the address of such Stockholder as shown in
Schedule I
hereto.
Section
4.7. Further
Assurances. At any time or from time to time after the date
hereof, the parties agree to cooperate with each other, and at the
request of any other party, to execute and deliver any further
instruments or documents and to take all such further action as the
other party may reasonably request in order to evidence or
effectuate the consummation of the transactions contemplated hereby
and to otherwise carry out the intent of the parties
hereunder.
Section
4.8. Entire Agreement;
Third Party Beneficiaries. Except as otherwise expressly set
forth herein, this Agreement embodies the complete agreement and
understanding among the parties hereto with respect to the subject
matter hereof and supersedes and preempts any prior understandings,
agreements or representations by or among the parties, written or
oral, that they may have related to the subject matter hereof in
any way. This Agreement is not intended to confer in or on behalf
of any Person not a party to this Agreement any rights, benefits,
causes of action or remedies with respect to the subject matter or
any provision thereof.
Section
4.9. Delays or
Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any
breach, default or noncompliance by another party under this
Agreement, shall impair any such right, power or remedy, nor shall
it be construed to be a waiver of any such breach, default or
noncompliance, or any acquiescence therein, or of or in any similar
breach, default or noncompliance thereafter occurring. It is
further agreed that any waiver, permit, consent or approval of any
kind or character on the part of any party hereto of any breach,
default or noncompliance under this Agreement or any waiver on such
party’s part of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the
extent specifically set forth in such writing. All remedies, either
under this Agreement, by Law, or otherwise afforded to any party,
shall be cumulative and not alternative.
Section
4.10. Governing
Law. This Agreement will be governed by and construed in
accordance with the Laws of the State of Delaware applicable to
contracts made and to be performed within the State of Delaware,
without giving effect to conflicts of law rules that would require
or permit the application of the Laws of another
jurisdiction.
Section
4.11. Specific
Performance; Jurisdiction.
(a) The parties agree
that irreparable damage would occur for which money damages would
not suffice in the event that any of the provisions of this
Agreement were not performed in accordance with their specific
terms or were otherwise breached and that the parties would not
have any adequate remedy at law. It is accordingly agreed that any
non-breaching party shall be entitled to seek an injunction,
temporary restraining order or other equitable relief exclusively
in the Delaware Court of Chancery enjoining any such breach and
enforcing specifically the terms and provisions hereof, or in the
event (but only in the event) that such court does not have subject
matter jurisdiction over such action or proceeding, in the United
States District Court for the District of Delaware or another court
sitting in the state of Delaware. Each party agrees not to raise
any objections to the availability of the equitable remedy of
specific performance to prevent or restrain breaches or threatened
breaches of, or to enforce compliance with, the covenants and
obligations of such party under this Agreement. The provisions of
this Section
4.11(a) are in addition to any other remedy to which any
party is entitled at law, in equity or otherwise.
(b) Each of the parties
hereto irrevocably agrees that any legal action or proceeding in
connection with or with respect to this Agreement and the rights
and obligations arising hereunder, or for recognition and
enforcement of any judgment in respect of this Agreement and the
rights and obligations arising hereunder brought by the other party
hereto or its successors or assigns shall be brought and determined
exclusively in the Delaware Court of Chancery, or in the event (but
only in the event) that such court does not have subject matter
jurisdiction over such action or proceeding, in the United States
District Court for the District of Delaware or another court
sitting in the state of Delaware. The parties hereto further agree
that any dispute between the parties regarding the approval by the
FTI Nominating Committee of any Person designated by Holding LLC
pursuant to Section
2.1(b)(iii) will be submitted to the Delaware Court of
Chancery with a request to rule on an expedited basis. Each of the
parties hereto hereby irrevocably submits with regard to any such
action or proceeding for itself and in respect of its property,
generally and unconditionally, to the personal jurisdiction of the
aforesaid courts and agrees that it will not bring any action in
connection with or relating to this Agreement or any of the
transactions contemplated by this Agreement in any court other than
the aforesaid courts. Each of the parties hereto hereby irrevocably
waives, and agrees not to assert, by way of motion, as a defense,
counterclaim or otherwise, in any action or proceeding in
connection with or with respect to this Agreement, (i) any claim
that it is not personally subject to the jurisdiction of the
above-named courts for any reason other than the failure to serve
in accordance with this Section 4.11, (ii) any claim
that it or its property is exempt or immune from jurisdiction of
any such court or from any legal process commenced in such courts
(whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment
or otherwise) and (iii) to the fullest extent permitted by the
applicable Law, any claim that (A) the suit, action or proceeding
in such court is brought in an inconvenient forum, (B) the venue of
such suit, action or proceeding is improper or (C) this Agreement,
or the subject matter hereof, may not be enforced in or by such
courts.
(c) Each of the parties
hereto irrevocably consents to the service of any summons and
complaint and any other process in any other action in connection
with or relating to this Agreement, on behalf of itself or its
property, by the personal delivery of copies of such process to
such party or by sending or delivering a copy of the process to the
party to be served at the address and in the manner provided for
the giving of notices in Section 4.6. Nothing in this
Section 4.11 shall
affect the right of any party hereto to serve legal process in any
other manner permitted by Law.
Section
4.12. Waiver of Jury
Trial. Each party hereby waives, to the fullest extent
permitted by applicable Law, any right it may have to a trial by
jury in respect of any suit, action or other proceeding arising out
of this Agreement or any transaction contemplated hereby. Each
party (i) certifies and acknowledges that no representative, agent
or attorney of any other party has represented, expressly or
otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver, and (ii)
acknowledges that it understands and has considered the
implications of this waiver and makes this waiver voluntarily, and
that it and the other parties have been induced to enter into the
Agreement by, among other things, the mutual waivers and
certifications in this Section 4.12.
Section
4.13. Severability.
If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction or other authority to
be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected,
impaired or invalidated so long as the economic or legal substance
of the transactions contemplated hereby is not affected in any
manner materially adverse to any party hereto. Upon such a
determination, the parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties
as closely as possible in a mutually acceptable manner in order
that the transactions contemplated hereby be consummated as
originally contemplated to the fullest extent
possible.
Section
4.14. Titles and
Subtitles. The titles of the sections and subsections of
this Agreement are for convenience of reference only and will not
affect the meaning or interpretation of this
Agreement.
Section
4.15. Counterparts;
Electronic Signatures. This Agreement may be executed in
counterparts, each of which shall constitute one and the same
instrument. Signatures provided by electronic transmission in
“pdf” or equivalent format will be deemed to be
original signatures.
Section
4.16. Certain
Indemnification Matters. The Company hereby acknowledges
that an Indemnitee (as defined in the Charter) who is an officer,
director, partner, member, manager, employee, managing director or
Affiliate of, or a Director nominee pursuant to Section 2.1 of, a Stockholder
(each such Indemnitee, a “Specified Indemnitee”)
may have certain rights to indemnification, advancement of expenses
and/or insurance pursuant to charter documents, constitutive
agreements or other agreements with such Stockholder or Affiliates
of such Stockholder or other Person (other than the Company and its
Affiliates) of which such Specified Indemnitee is an officer,
director, partner, member, manager, employee, managing director or
Affiliate (collectively, the “Secondary Indemnitors”).
In furtherance of the foregoing, the Company hereby covenants and
agrees as follows:
(d) The Company shall
be the indemnitor of first resort for any claims or proceedings
(collectively, “Covered Claims”) for
which any Specified Indemnitee is entitled, under the Charter or
otherwise, to indemnification by the Company (i.e., the Company’s obligations
to each such Specified Indemnitee with respect to any Covered Claim
are primary and any obligations of any Secondary Indemnitor to
advance expenses or to provide indemnification for the same
expenses or liabilities incurred by any such Specified Indemnitee
with respect Covered Claims are secondary).
(e) Subject to Sections
1 and 2 of Article
IX of the Charter, the
Company shall pay the expenses (including attorneys’ fees and
expenses) incurred by any Specified Indemnitee in defending any
Covered Claim in advance of such Covered Claim’s final
disposition, without regard to any rights any such Specified
Indemnitee may have against any Secondary Indemnitor.
(f) The Company hereby
irrevocably waives, relinquishes and releases each Secondary
Indemnitor from any and all claims against such Secondary
Indemnitor for contribution, subrogation or any other recovery of
any kind in respect of any Covered Claim.
The
Company further agrees that no advancement or payment by any
Secondary Indemnitor on behalf of any such Specified Indemnitee
with respect to any Covered Claim for which any such Specified
Indemnitee has sought indemnification from the Company shall affect
the foregoing and any such Secondary Indemnitor shall have a right
of contribution and/or subrogation to the extent of such
advancement or payment to all of the rights of recovery of such
Specified Indemnitee against the Company. Any amendment, repeal or
modification of this Section 4.16 shall not
adversely affect any right or protection of a Specified Indemnitee
or Secondary Indemnitor existing prior to such repeal or
modification.
Section
4.17. Rights and
Obligations of Transferees. No Stockholder shall Transfer
any Equity Securities except in compliance with the Securities Act,
the Charter (as defined in the Merger Agreement), any applicable
state or foreign securities Laws and this Agreement, or if such
Transfer would violate the Communications Act or FCC Regulations
and such Stockholder has been so advised by the Company. Without
limiting the generality of the foregoing, no such Transfer shall be
made or recognized in the books and records of the Company if such
Transfer would result in a violation of the Communications Act or
FCC Regulations. Any Transfers in violation of this Agreement shall
be null and void.
[Remainder
of page intentionally left blank]
IN
WITNESS WHEREOF, the parties hereto have caused this
Stockholders’ Agreement to be executed effective as of the
date set forth in the first paragraph hereof.
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FUSION CONNECT,
INC.
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By:
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BCHI HOLDINGS,
LLC
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By:
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Name
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FTI STOCKHOLDERS:
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By:
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Schedule I--Stockholder Information
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Stockholder
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Equity Securities
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Notice Information
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EXHIBIT A
FORM
OF JOINDER TO
STOCKHOLDERS’ AGREEMENT
This
JOINDER to the Stockholders’ Agreement, dated as of
__________, 2018 (the “Stockholders’
Agreement”), of Fusion Connect, Inc., a Delaware
corporation (the “Company”), BCHI Holdings,
LLC, a Georgia limited liability company (“Holding LLC”) and the
other Persons set forth on Schedule I of the
Stockholders’ Agreement (the “Initial FTI
Stockholders”) is executed on behalf of the
undersigned (“FTI
Stockholder”), effective as of the date set forth on
the signature page below, with reference to the following
facts:
A. Capitalized
terms used herein but not otherwise defined shall have the meanings
set forth in the Stockholders’ Agreement.
B. FTI
Stockholder is, as of the date set forth below, an FTI
Director.
NOW,
THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned
hereby agrees as follows:
1. Agreement
to be Bound. FTI Stockholder hereby agrees that upon
execution of this Joinder, FTI Stockholder shall become a party to
the Stockholders’ Agreement as an “FTI
Stockholder” and shall be fully bound by, and subject to, all
of the covenants, terms and conditions of the Stockholders’
Agreement applicable to FTI Stockholder.
2. Equity
Securities. As of the date of this Agreement, the FTI
Stockholder owns [INSERT AMOUNT AND TYPE OF COMPANY EQUITY
SECURITIES OWNED BY STOCKHOLDER.]
3. Counterparts.
This Joinder may be executed in separate counterparts each of which
shall be an original and all of which taken together shall
constitute one and the same agreement.
4. Notices.
For purposes of Section
4.6 of the Stockholders’ Agreement, all notices,
demands or other communications to FTI Stockholder shall be
directed to FTI Stockholder’s address set forth below FTI
Stockholder’s signature below.
[Signature Page Follows]
IN WITNESS WHEREOF, Stockholder has
executed this Joinder effective as of the date set forth
below.
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FTI
STOCKHOLDER:
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By:
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Name:
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Title:
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ADDRESS:
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Date:
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