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This AMENDMENT No. 8 and WAIVER (this “Amendment and Waiver”), dated as
of August 22, 2019, is entered into by and among Fusion Connect,
Inc., a Delaware corporation and a debtor and debtor-in-possession
under Chapter 11 of the Bankruptcy Code (the “Borrower”), certain subsidiaries
of the Borrower party hereto, each a debtor and
debtor-in-possession under Chapter 11 of the Bankruptcy Code, as
Guarantor Subsidiaries and the Lenders party hereto, which
collectively constitute the Requisite Lenders, and acknowledged by
the Administrative Agent (each, a “Party” and collectively, the
“Parties”).
RECITALS
WHEREAS, reference is made to that
certain Superpriority Secured Debtor-in-Possession Credit and
Guaranty Agreement, dated as of June 7, 2019, among the Borrower,
the Guarantor Subsidiaries, the lenders from time to time party
thereto (the “Lenders”) and Wilmington Trust,
National Association, as Administrative Agent and Collateral Agent
(as amended, restated, supplemented or otherwise modified prior to
the date hereof, the “Credit
Agreement” and, as amended by this Amendment and
Waiver, the “Amended Credit
Agreement”);
WHEREAS, pursuant to Section 5.1(e) of
the Credit Agreement, by letter dated as of August 20, 2019, the
Borrower delivered to the Administrative Agent for distribution to
the Lenders notice of the following Defaults: (i) failure to
deliver quarterly financial statements for the Fiscal Quarters
ended March 31, 2019 and June 30, 2019, in each case, together with
a Financial Officer Certification and an auditors review letter, by
August 15, 2019, as required by Section 5.01(b) of the Credit
Agreement, (ii) failure to deliver Compliance Certificates within
eleven Business Days after the end of each fiscal month for the
fiscal months ended May 31, 2019, June 30, 2019 and July 31, 2019,
as required by Section 5.1(g) of the Credit Agreement and (iii)
failure to deliver a due diligence quality of earnings report by
August 16, 2019, as required by Section 5.1(r) of the Credit
Agreement (each a “Specified
Default” and collectively, the “Specified Defaults”);
WHEREAS, the Borrower has requested that
the Requisite Lenders waive, with retroactive effect as of the date
on which each Specified Default occurred, each Specified Default
and any interest rate increase resulting from such Specified
Default pursuant to Section 2.9 of the Credit Agreement;
and
WHEREAS, the Parties wish to amend the
Credit Agreement and the Lenders party hereto agree to provide the
waiver set forth below, in each case, on the terms set forth
herein.
NOW, THEREFORE, in consideration of the
premises contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties, intending to be legally bound hereby,
agree as follows:
Section
1. Definitions.
Each capitalized term used and not otherwise defined in this
Amendment and Waiver shall have the meaning assigned to such term
in the Amended Credit Agreement.
Section
2. Amendments to
Credit Agreement. With effect as of the Amendment Effective
Date, the Credit Agreement is hereby amended:
(a) By replacing the
words “August 15, 2019” in clause (b) of Section
5.1 thereof with “no later than November 12, 2019”;
and
(b) By replacing the
words “No later than August 16, 2019” in clause (r) of
Section 5.1 thereof with “No later than August 23,
2019”.
Section
3. Waiver.
Subject to the terms and conditions set forth in this Amendment and
Waiver, the Lenders party hereto, which constitute the Requisite
Lenders, hereby waive, with retroactive effect as of the date on
which each of the Specified Defaults occurred, each Specified
Default and any interest rate increase resulting from such
Specified Default pursuant to Section 2.9 of the Credit
Agreement.
Section
4. Representations and
Warranties.
(a) Each of the Credit
Parties, subject to the entry of the Orders and the terms thereof,
has all requisite power and authority to execute and deliver this
Amendment and Waiver and to perform the transactions contemplated
hereby.
(b) Subject to the
entry of the Orders and the terms thereof, this Amendment and
Waiver and the transactions contemplated hereby have been duly
authorized by all necessary corporate or other organizational
action and, if required, stockholder, shareholder or other
equityholder action on the part of each Credit Party.
(c) This Amendment and
Waiver and the transactions contemplated hereby do not and will not
(i) other than violations arising as a result of the commencement
of the Cases, subject to the entry of the Orders and the terms
thereof and except as otherwise excused by the Bankruptcy Code,
violate any applicable law, including any order of any Governmental
Authority, except to the extent any such violation, individually or
in the aggregate, would not reasonably be expected to have a
Material Adverse Effect, (ii) violate the Organizational
Documents of the Borrower or any Restricted Subsidiary, (iii) other
than violations arising as a result of the commencement of the
Cases and except as otherwise excused by the Bankruptcy Code,
violate or result (alone or with notice or lapse of time, or both)
in a default under any other Contractual Obligation of the Borrower
or any Restricted Subsidiary, or give rise to a right thereunder to
require any payment, repurchase or redemption to be made by the
Borrower or any Restricted Subsidiary, or give rise to a right of,
or result in, any termination, cancelation or acceleration or right
of renegotiation of any obligation thereunder, except to the extent
any such violation, default, right or result, individually or in
the aggregate, would not reasonably be expected to have a Material
Adverse Effect, or (iv) except for Liens created under the
Credit Documents, result in or require the creation or imposition
of any Lien on any asset of the Borrower or any Restricted
Subsidiary.
(d) Subject to the
Orders and the terms thereof, this Amendment and Waiver and the
transactions contemplated hereby do not and will not require any
registration with, consent or approval of, notice to, or other
action by any Governmental Authority (other than the entry of the
Orders), except (i) such as have been obtained or made and are in
full force and effect, (ii) filings and recordings with respect to
the Collateral necessary to perfect Liens created under the Credit
Documents, (iii) filings and registrations under applicable
securities laws relating to the Disposition by the Collateral Agent
pursuant to the Pledge and Security Agreement of Collateral that
constitute Securities and (iv) Post-Petition filings with the SEC
and applicable State PUCs relating to the Credit Parties’
status as debtors and debtors-in-possession under Chapter 11 of the
Bankruptcy Code.
(e) Subject to the
Orders and the terms thereof, this Amendment and Waiver has been
duly executed and delivered by each Credit Party that is a Party
and is, subject to the Orders and the terms thereof, the legally
valid and binding obligation of such Credit Party, enforceable
against such Credit Party in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting
creditors’ rights generally or by equitable principles
relating to enforceability (other than with respect to the
Debtors).
(f) The representations
and warranties of each Credit Party set forth in the Credit
Documents are true and correct (i) in the case of the
representations and warranties qualified or modified as to
materiality in the text thereof, in all respects and (ii)
otherwise, in all material respects, in each case on and as of the
Amendment Effective Date, except in the case of any such
representation and warranty that expressly relates to an earlier
date, in which case such representation and warranty shall be so
true and correct on and as of such earlier date.
(g) No Default or Event
of Default has occurred and is continuing or would result from this
Amendment and Waiver, other than Defaults and Events of Default
that have been disclosed to the Administrative Agent on or prior to
the date hereof.
Section
5. Effectiveness.
This Amendment and Waiver shall become effective on the date (such
date, the “Amendment
Effective Date”) that the Administrative Agent shall
have received fully executed counterparts of this Amendment and
Waiver from the Borrower and each other Credit Party, Lenders
constituting the Requisite Lenders and the Administrative
Agent.
Section
6. Entire
Agreement. THIS AMENDMENT
AND WAIVER CONSTITUTES THE ENTIRE AGREEMENT AMONG THE PARTIES
RELATING TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ANY AND ALL
PREVIOUS AGREEMENTS AND UNDERSTANDINGS, ORAL OR WRITTEN, RELATING
TO THE SUBJECT MATTER HEREOF (BUT DOES NOT SUPERSEDE ANY PROVISIONS
OF ANY SEPARATE CONFIDENTIALITY AGREEMENT OR SIMILAR AGREEMENT OR
FEE LETTER BETWEEN OR AMONG ANY CREDIT PARTIES AND ANY AGENT OR
LENDER OR ANY AFFILIATE OF ANY OF THE FOREGOING, ALL OF WHICH
PROVISIONS SHALL REMAIN IN FULL FORCE AND
EFFECT).
Section
7. Credit
Document. Each Party acknowledges and agrees that this
Amendment and Waiver constitutes a “Credit Document”
for all purposes of the Amended Credit Agreement and the other
Credit Documents.
Section
8. Governing Law;
Jurisdiction; Consent to Service of Process.
(a) THIS AMENDMENT AND WAIVER AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER (INCLUDING ANY CLAIMS SOUNDING
IN CONTRACT LAW OR TORT LAW ARISING OUT OF THE SUBJECT MATTER
HEREOF AND ANY DETERMINATIONS WITH RESPECT TO POST-JUDGMENT
INTEREST) SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD RESULT IN
THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW
YORK AND TO THE EXTENT APPLICABLE, THE BANKRUPTCY
CODE.
(b) SUBJECT TO CLAUSE (V) BELOW, ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING
HERETO OR ANY OTHER CREDIT DOCUMENT, OR ANY OF THE OBLIGATIONS,
SHALL BE BROUGHT EXCLUSIVELY IN THE BANKRUPTCY COURT AND, IF THE
BANKRUPTCY COURT DOES NOT HAVE, OR ABSTAINS FROM JURISDICTION, IN
ANY FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN THE
BOROUGH OF MANHATTAN OR, IF THAT COURT DOES NOT HAVE SUBJECT MATTER
JURISDICTION, IN ANY STATE COURT LOCATED IN THE CITY AND COUNTY OF
NEW YORK. BY EXECUTING AND DELIVERING THIS AMENDMENT AND WAIVER,
EACH PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
IRREVOCABLY (I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE EXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS (SUBJECT TO CLAUSE (V)
BELOW); (II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III)
AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY
SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO THE APPLICABLE PARTY AT ITS ADDRESS PROVIDED
IN ACCORDANCE WITH SECTION 10.1 OF THE AMENDED CREDIT AGREEMENT;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE
CREDIT PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND
OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT; AND (V) AGREES THAT THE AGENTS AND THE LENDERS RETAIN THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY
OTHER JURISDICTION IN CONNECTION WITH THE EXERCISE OF ANY RIGHTS
UNDER ANY CREDIT DOCUMENT OR ANY EXERCISE OF REMEDIES IN RESPECT OF
COLLATERAL OR THE ENFORCEMENT OF ANY JUDGMENT, AND HEREBY SUBMITS
TO THE JURISDICTION OF, AND CONSENTS TO VENUE IN, ANY SUCH
COURT.
Section
9. WAIVER OF JURY
TRIAL. EACH OF THE PARTIES
HEREBY AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE
OTHER CREDIT DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER
RELATIONSHIP ESTABLISHED UNDER THE AMENDED CREDIT AGREEMENT. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND
ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. EACH PARTY ACKNOWLEDGES THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO ENTER INTO THIS AMENDMENT AND WAIVER, THAT
EACH PARTY HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS
AMENDMENT AND WAIVER, AND THAT EACH WILL CONTINUE TO RELY ON THIS
WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS
AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR
IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 8 AND EXECUTED BY EACH OF THE PARTIES),
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER CREDIT
DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE
LOANS MADE UNDER THE AMENDED CREDIT AGREEMENT. IN THE EVENT OF
LITIGATION, THIS AMENDMENT AND WAIVER MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
Section
10. Severability.
In case any provision in or obligation hereunder shall be invalid,
illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired
thereby.
Section
11. Counterparts.
This Amendment and Waiver may be executed in counterparts, each of
which when so executed and delivered shall be deemed an original,
but all such counterparts together shall constitute but one and the
same instrument. Delivery of an executed counterpart of a signature
page of this Amendment and Waiver by facsimile or in electronic
format (i.e., “pdf” or “tif”) shall be
effective as delivery of a manually executed counterpart of this
Amendment and Waiver.
Section
12. Headings.
Section headings are included herein for convenience of reference
only and shall not constitute a part hereof for any other purpose
or be given any substantive effect.
Section
13. Effect of
Amendment. Except as expressly set forth herein, (i) this
Amendment and Waiver shall not by implication or otherwise limit,
impair, constitute a waiver of or otherwise affect the rights and
remedies of the Lenders, the Collateral Agent or the Administrative
Agent, in each case under the Credit Agreement or any other Credit
Document, and (ii) shall not alter, modify, amend or in any way
affect any of the terms, conditions, obligations, covenants or
agreements contained in the Credit Agreement or any other Credit
Document. Each and every term, condition, obligation, covenant and
agreement contained in the Credit Agreement or any other Credit
Document is hereby ratified and re-affirmed in all respects and
shall continue in full force and effect as expressly amended
hereby. The execution, delivery and effectiveness of this Amendment
and Waiver shall not, except as expressly provided herein or as
provided in the exhibits hereto, operate as a waiver of any right,
power or remedy of any Lender, the Collateral Agent or the
Administrative Agent under any of the Credit Documents, or
constitute a waiver of any provision of any of the Credit
Documents. This Amendment and Waiver shall not extinguish the
obligations for the payment of money outstanding under the Credit
Agreement. Nothing herein contained shall be construed as a
substitution or novation of the obligations outstanding under the
Credit Agreement, which shall remain in full force and effect as
expressly modified hereby or as provided in the exhibits hereto.
Nothing implied in this Amendment and Waiver or in any other
document contemplated hereby shall be construed as a release or
other discharge of any of the Credit Parties from the Credit
Documents. From and after the Amendment Effective Date, all
references to the Credit Agreement in any Credit Document and all
references in the Credit Agreement to “this Agreement,”
“hereunder,” “hereof” or words of like
import referring to the Credit Agreement shall, unless expressly
provided otherwise, be deemed to refer to the Amended Credit
Agreement. Each of the Credit Parties hereby consents to this
Amendment and Waiver and confirms that all obligations of such
Credit Party under the Credit Documents to which such Credit Party
is a party shall continue to apply to the Amended Credit Agreement.
Each Credit Party hereby ratifies and reaffirms (a) that each of
the Credit Documents to which it is a party has been duly executed
and delivered by such Credit Party to the Administrative Agent and
to the Lenders and is in full force and effect as of the date
hereof, (b) its grant of liens on or security interests in its
properties pursuant to the Credit Documents as security for the
Obligations under or with respect to the Amended Credit Agreement
and confirms and agrees that such liens and security interests
secure all of the Obligations; and (c) the Administrative Agent,
the Collateral Agent and the Lenders are and shall be entitled to
all of the rights, remedies and benefits provided for in the Credit
Documents.
Section
14. Direction to
Administrative Agent.
The Lenders party hereto, constituting the Requisite Lenders,
hereby (a) authorize and direct the Administrative Agent to
acknowledge this Amendment and Waiver, and (b) acknowledge and
agree that (i) the direction in this Section 13 constitutes a
direction from the Lenders under the provisions of Section 9 of the
Credit Agreement and (ii) Sections 9.3 and 9.6 of the Credit
Agreement (including as amended hereby) shall apply to any and all
actions taken by the Administrative Agent and the Collateral Agent
in accordance with such directions.
[Remainder of page left intentionally blank]
IN
WITNESS WHEREOF, the Parties have caused this Amendment and Waiver
to be duly executed by their respective authorized officers as of
the day and year first above written.
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FUSION CONNECT, INC., as Borrower
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By:
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/s/
James P. Prenetta, Jr.
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Name: James
P. Prenetta, Jr.
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Title: EVP and
General Counsel
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FUSION NBS ACQUISITION CORP.
FUSION LLC
FUSION BCHI ACQUISITION LLC
FUSION CLOUD SERVICES, LLC
FUSION CB HOLDINGS, INC.
FUSION COMMUNICATIONS, LLC
FUSION MANAGEMENT SERVICES LLC
FUSION TELECOM LLC
FUSION TEXAS HOLDINGS, INC.
FUSION TELECOM OF KANSAS, LLC
FUSION TELECOM OF OKLAHOMA, LLC
FUSION TELECOM OF MISSOURI, LLC
BIRCAN HOLDINGS, LLC
FUSION PM HOLDINGS, INC.
FUSION CLOUD COMPANY LLC
FUSION MPHC GROUP, INC.
FUSION MPHC HOLDING CORPORATIONas Guarantors
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By:
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/s/
James P. Prenetta, Jr.
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Name: James
P. Prenetta, Jr.
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Title: EVP and
General Counsel
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FUSION TELECOM OF TEXAS LTD., L.L.P.,
as
Guarantor
By:
Fusion Texas Holdings, Inc., its general partner
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By:
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/s/
James P. Prenetta, Jr.
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Name: James
P. Prenetta, Jr.
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[Fusion
- Signature Page to Amendment No. 8]
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[ ], as
a Lender
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By:
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/s/
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Authorized
Signatory
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[Fusion
- Signature Page to Amendment No. 8]
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Acknowledged
by:
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WILMINGTON TRUST,
NATIONAL ASSOCIATION,
as
Administrative Agent
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By:
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/s/
Jeffery Rose
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Name:
Jeffery Rose
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Title: Vice
President
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[Fusion
- Signature Page to Amendment No. 8]
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