EXHIBIT 10.30
 
INTERCREDITOR AND SUBORDINATION AGREEMENT
 
INTERCREDITOR AND SUBORDINATION AGREEMENT dated as of August 28, 2015, by and
among MARVIN ROSEN, an individual (“Subordinated Lender”), FUSION
TELECOMMUNICATIONS INTERNATIONAL, INC., a Delaware corporation (“Issuer”), each
other Credit Party party hereto and OPUS BANK, a California commercial bank, as
Administrative Agent (in its capacity as Administrative Agent under the Credit
Agreement defined below, the “Agent”).
 
WHEREAS, Fusion NBS Acquisition Corp., a Delaware corporation (“Borrower”),
Agent and the Lenders party thereto (together with the lenders from time to time
party thereto, the “Lenders”) have entered into the Credit Agreement (as
hereinafter defined) pursuant to which, among other things, Lenders have agreed,
subject to the terms and conditions set forth in the Credit Agreement, to extend
credit to the Borrower;
 
WHEREAS, in accordance with the terms of the Credit Agreement and the other
Senior Loan Documents (as hereinafter defined), Issuer has granted Lenders and
Agent a first priority lien on, security interest in and right of set-off
against any and all right, title and interest of Issuer in and to certain
Collateral; and
 
WHEREAS, as an inducement to and as one of the conditions precedent to the
agreement of Lenders and Agent to consummate the transactions contemplated by
the Credit Agreement and the other Senior Loan Documents, Lenders and Agent
require the execution and delivery of this Agreement by Subordinated Lender and
Credit Parties.
 
For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
 
1. Definitions.
 
(a) Capitalized terms used but not defined herein (including, without
limitation, in the preamble and recitals above) shall have the meanings given
such terms in the Credit Agreement.
 
(b) The following terms shall have the following meanings:
 
“Agent” has the meaning specified in the recitals of this Agreement.
 
“Agreement” means this Intercreditor and Subordination Agreement, as the same
may be amended, restated, supplemented or otherwise modified from time to time
in accordance with the terms hereof.
 
“Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as codified under
Title 11 of the United States Code, or any successor statutes, and the
bankruptcy rules promulgated thereunder, as the same may be in effect from time
to time.
 
 
 

--------------------------------------------------------------------------------

 
 
“Collateral” means the collective reference to the “Collateral” (as defined in
the Credit Agreement) and any and all other property from time to time subject
to Liens or security interests to secure payment or performance of the Senior
Obligations.
 
“Credit Agreement” means the Credit Agreement, dated as of August 28, 2015, by
and among Borrower, Agent, Lenders and the other parties from time to time party
thereto, as such Credit Agreement may be amended, restated, modified or
supplemented from time to time, including, without limitation, amendments,
modifications, supplements and restatements thereof giving effect to increases,
renewals, extensions, refundings, deferrals, restructurings, replacements or
refinancings of, or additions to, the arrangements provided in such Credit
Agreement (whether provided by one or more of the original Lenders under the
Agreement or one or more successor Lenders).
 
“Credit Parties” means Issuer, Borrower, NBS, each other Subsidiary of Issuer
and any other Person that at any time is or becomes directly or indirectly
liable on or in respect of, or that provides security for, any Senior
Obligations, and their successors and permitted assigns.
 
“Enforcement Action” means, with respect to the Subordinated Obligations, any
action to collect all or any portion of the Subordinated Obligations, to
accelerate or demand payment of all or any portion of the Subordinated
Obligations or to enforce any of the rights and remedies of any holder of any of
the Subordinated Obligations, either pursuant to the Subordinated Loan
Documents, at law, or in equity, including, but not limited to: (i) commencing
or pursuing legal proceedings to collect any amounts owed with respect to the
Subordinated Obligations; (ii) execution upon, or otherwise enforcing any
judgment obtained with respect to, amounts owed on the Subordinated Obligations;
or (iii) commencing or pursuing any judicial or non-judicial proceedings with
respect to the Subordinated Obligations to foreclose upon, or to acquire title
in lieu of foreclosure as to, all or any portion of the assets of Issuer or any
other Credit Party.
 
“Insolvency Event” means (i) Issuer or any of its Subsidiaries commencing any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, conservatorship or relief of debtors, seeking to have an order
for relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or Issuer or any of its Subsidiaries making a general assignment for the
benefit of its creditors; (ii) there being commenced against Issuer or any of
its Subsidiaries any case, proceeding or other action of a nature referred to in
clause (i) above; (iii) there being commenced against Issuer or any of its
Subsidiaries any case, proceeding or other action seeking issuance of a warrant
of attachment, execution, distraint or similar process against all or any
substantial part of its assets; (iv) Issuer or any of its Subsidiaries taking
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii) or (iii) above;
or (v) Issuer or any of its Subsidiaries generally not paying, or being unable
to pay, or admitting in writing its inability to pay, its debts as they become
due.
 
 
2

--------------------------------------------------------------------------------

 
 
“Insolvency Proceeding” means the occurrence or commencement of any proceeding
specified in clause (i) or clause (ii) of the definition of “Insolvency Event”
in this Agreement.
 
“Issuer” has the meaning specified in the recitals of this Agreement.
 
“Lenders” has the meaning specified in the recitals of this Agreement.
 
“Permitted Subordinated Debt Payments” means regularly scheduled cash payments
of interest, at the non-default rate of interest not to exceed a rate of 7% per
annum, pursuant to and in accordance with the Subordinated Notes.
 
“Person” shall mean any individual, firm, corporation, limited liability
company, partnership, trust, incorporated or unincorporated association, joint
venture, joint stock company, governmental authority or other entity of any
kind, and shall include any successor (by merger or otherwise) of such entity.
 
 “Senior Default” means any “Default” or “Event of Default” under the Credit
Agreement or any other Senior Loan Document.
 
“Senior Lenders” means Lenders, Agent and each other holder of a Senior
Obligation and each of their respective successors and assigns.
 
“Senior Loan Documents” means the collective reference to the Credit Agreement,
the other “Loan Documents” (as defined in the Credit Agreement) and all other
documents, instruments and agreements that from time to time evidence the Senior
Obligations or secure or support payment or performance thereof, as the same may
be amended, restated, modified or supplemented from time to time, including,
without limitation, amendments, modifications, supplements and restatements
thereof giving effect to increases, renewals, extensions, refundings, deferrals,
restructurings, replacements or refinancings of, or additions to, the
arrangements provided therein (whether provided by one or more Lenders under the
Credit Agreement or one or more successor Purchasers).
 
“Senior Obligations” means the “Obligations”, as such term is defined in the
Credit Agreement and the “Obligations”, as such term is defined in any Guaranty
(as defined in the Credit Agreement), including, without limitation, all
principal, interest, fees, expenses, indemnities and reimbursement obligations
at any time owed by the Credit Parties to Senior Lender pursuant to the terms of
the Senior Loan Documents, in each instance, whether before or after the
commencement of an Insolvency Proceeding and without regard to whether or not an
allowed claim, and all obligations and liabilities incurred with respect to any
refinancing of such obligations, together with any amendments, restatements,
modifications, renewals or extensions thereof.
 
“Subordinated Event of Default” means any default or event of default under the
Subordinated Notes or other Subordinated Loan Documents.
 
“Subordinated Lender” has the meaning specified in the recitals of this
Agreement.
 
 
3

--------------------------------------------------------------------------------

 
 
“Subordinated Loan Documents” means the collective reference to the Subordinated
Notes and any other documents, agreements or instruments that from time to time
evidence or otherwise relate to the Subordinated Obligations.
 
“Subordinated Notes” means the letter agreement between Subordinated Lender and
Issuer, dated August 28, 2015, providing for, among other things, payment of the
promissory note in the original principal amount of $3,922,364.37 issued by
Issuer to Subordinated Lender, copies of which are attached as Exhibit A hereto,
as in effect as of the date hereof and as amended, supplemented, restated or
otherwise modified from time to time as permitted by this Agreement and the
Senior Loan Documents, including, without limitation, any notes issued in
exchange or substitution therefor.
 
“Subordinated Obligations” means the collective reference to the unpaid
principal of and interest on the Subordinated Notes and all other Indebtedness
of Issuer or any other Credit Party owing to the Subordinated Lender (including,
without limitation, interest accruing at the then applicable rate provided
therein after the maturity of the Subordinated Notes and interest accruing at
the then applicable rate provided in the Subordinated Notes after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to Issuer or any other Credit Party,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding), whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, the Subordinated Notes, this Agreement, or any other
Subordinated Loan Document, in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel
to the Subordinated Lender that are required to be paid by Issuer or any other
Credit Party pursuant to the terms of any other Subordinated Loan Document);
provided, however, that Subordinated Obligations shall not include obligations
for compensation, employee benefits and reimbursement of related costs incurred
in the Ordinary Course of Business, to the extent any of the foregoing
constitutes Indebtedness, and to the extent such Indebtedness is permitted by
the Credit Agreement.
 
(c) The words “hereof,” “herein” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and section and paragraph references
are to this Agreement unless otherwise specified.
 
(d) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.
 
(e) No inference in favor of, or against, any party to this Agreement shall be
drawn from the fact that such party has drafted any portion of this Agreement.
 
2. Subordination; Enforcement Action.  Each Credit Party and Subordinated Lender
each hereby agrees, for itself and each future holder of the Subordinated
Obligations, that:
 
(a) No part of the Subordinated Obligations shall have any claim to any assets
of any Credit Party on a parity with or prior to the claim of any of the Senior
Obligations.
 
 
4

--------------------------------------------------------------------------------

 
 
(b) Unless and until the Senior Obligations have been paid in full, without the
express prior written consent of Agent, (1) Subordinated Lender shall not,
directly or indirectly, take, demand, accept or receive from any Credit Party or
any other Person, in cash or other property or by setoff or in any other manner,
payment of all or any of the Subordinated Obligations, and (2) no Credit Party
shall make, give or permit, directly or indirectly, by setoff, redemption,
purchase or in any other manner, any payment of or with respect to, or any
collateral or other security for, the whole or any part of the Subordinated
Obligations, including, without limitation, any guarantee, letter of credit or
similar credit support to support payment of any of the Subordinated
Obligations; provided, however, that, subject in all respects to the other terms
and provisions hereof, (x) Subordinated Lender may accept and retain, and Issuer
may make, Permitted Subordinated Debt Payments so long as no Blockage Period is
then in effect, provided that, after giving effect to such payment, the Credit
Parties are in compliance on a pro forma basis with the covenants set forth in
Section 7.11 of the Credit Agreement, recomputed for the most recent fiscal
quarter for which financial statements have been delivered; and (y) Issuer may
resume making any Permitted Subordinated Debt Payments, and may make any
Permitted Subordinated Debt Payment missed during any Blockage Period, upon the
cessation of a Blockage Period.  A “Blockage Period” shall exist from and after
the date that any Senior Default shall have occurred, until the earlier to occur
of (a) the cure or waiver of such Senior Default, as determined by Agent in its
sole discretion and (b) the payment in full of the Senior Obligations.
 
(c) Unless and until the Senior Obligations have been paid in full, without the
express written consent of Agent, Subordinated Lender shall not commence any
Enforcement Action.
 
(d) The expressions “prior payment in full,” “payment in full,” “paid in full”
and any other similar terms or phrases when used herein with respect to the
Senior Obligations shall mean (i) the indefeasible payment in full, in
immediately available funds, of all of the Senior Obligations and the
performance in full of all of the Senior Obligations, (ii) the termination or
expiration of all Senior Loan Documents, and (iii) termination of any and all
commitments to lend under the Senior Loan Documents.  Senior Obligations shall
be considered to be outstanding whenever any loan commitment under any Senior
Loan Document is outstanding.
 
(e) Each holder of Senior Obligations, whether now outstanding or hereafter
created, incurred, assumed or guaranteed, shall be deemed to have acquired
Senior Obligations in reliance upon the provisions contained in this Agreement.
 
3. Additional Provisions Concerning Subordination.  Without limiting any other
term or provision in this Agreement:
 
(a) The Subordinated Lender and each Credit Party hereby agree that upon the
occurrence of any Insolvency Event:
 
(i) all Senior Obligations shall be paid in full before any payment or
distribution is made with respect to any of the Subordinated Obligations; and
 
(ii) any payment or distribution of assets of any Credit Party of any kind or
character, whether in cash, property or securities, to which Subordinated Lender
would be entitled except for the provisions hereof, shall be paid or delivered
by such Credit Party, or any receiver, trustee in bankruptcy, liquidating
trustee, disbursing agent or other Person making such payment or distribution,
directly to Agent for application against the Senior Obligations (in accordance
with the terms of the applicable Senior Loan Documents), to the extent necessary
to pay in full all Senior Obligations, before any payment or distribution shall
be made to Subordinated Lender, and (x) Subordinated Lender hereby
unconditionally authorizes, empowers and directs all trustees, receivers,
custodians, conservators, or any other Persons having authority over the
property of any Credit Party to effect delivery of all such payments and
distributions to Agent and (y) Subordinated Lender agrees to execute and deliver
to Agent such further instruments as may be requested by Agent to confirm the
authorization referred to in the foregoing clause (x).
 
 
5

--------------------------------------------------------------------------------

 
 
(b) Upon the occurrence of any Insolvency Proceeding commenced by or against any
Credit Party, Subordinated Lender irrevocably authorizes and empowers Agent to
demand, sue for, collect and receive every payment or distribution on account of
any of the Subordinated Obligations payable or deliverable in connection with
such event or proceeding, until the Senior Obligations are paid in full, and
give acquittance therefor;
 
(c) Subordinated Lender irrevocably authorizes and empowers Agent to file claims
and proofs of claim in any such Insolvency Proceeding and take such other
actions, in its own name, or in the name of the Subordinated Lender or
otherwise, as Agent may deem necessary or advisable for the enforcement of the
provisions of this Agreement; and, in furtherance thereof, Subordinated Lender
shall execute and deliver such powers of attorney, assignments or proofs of
claim or other instruments as Agent may request; provided, however, that the
foregoing authorization and empowerment imposes no obligation on Agent or any
other Senior Lender to take any such action.
 
(d) Except as otherwise expressly permitted by the terms hereof, if any payment
or distribution, whether consisting of money, property or securities, shall be
collected or received by or come into the custody, control or possession of
Subordinated Lender in respect of the Subordinated Obligations, Subordinated
Lender shall forthwith deliver the same to Agent for application against the
Senior Obligations, in the exact form received, duly endorsed to Agent, if
required, in each case to be applied to the payment or prepayment of the
applicable Senior Obligations in accordance with the terms of the applicable
Senior Loan Documents until such Senior Obligations are paid in full.  Until so
delivered, such payment or distribution shall be held in trust by Subordinated
Lender as the property of the Senior Lenders, segregated from other funds and
property held by Subordinated Lender.
 
4. Subrogation.  Until the Senior Obligations are paid in full, the Subordinated
Lender shall not make or assert any claim of subrogation under applicable law or
otherwise with respect to the Senior Lenders or the Senior Obligations.  Upon
the payment in full of the Senior Obligations, the Subordinated Lender shall be
subrogated to the rights of the Senior Lenders to receive payments or
distributions of assets of Issuer and each other Credit Party in respect of the
Senior Obligations until the Senior Obligations shall be paid in full.  For the
purposes of such subrogation, payments or distributions to any Senior Lender of
any money, property or securities to which Subordinated Lender would be entitled
except for the provisions of this Agreement shall be deemed, as between Issuer
and its creditors (other than the Senior Lenders and Subordinated Lender), to be
a payment by Issuer to or on account of Subordinated Obligations (it being
understood that the provisions of this Agreement are, and are intended solely,
for the purpose of defining the relative rights of the Subordinated Lender, on
the one hand, and Senior Lenders, on the other hand).
 
 
6

--------------------------------------------------------------------------------

 
 
5. Consents, Waivers and Covenants of Subordinated Lender.
 
(a) Subordinated Lender consents and agrees that, without the necessity of any
reservation of rights against Subordinated Lender, and without notice to or
further assent by Subordinated Lender:
 
(i) any demand for payment of any Senior Obligations made by any Senior Lender
may be rescinded in whole or in part by such Senior Lender, and any Senior
Obligation may be continued, and the Senior Obligations, or the liability of any
Credit Party or any guarantor or any other party upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, or any obligation or liability of any Credit Party or any other party
under any Senior Loan Document, or any other agreement, may, from time to time,
in whole or in part, be amended, restated, renewed, extended, increased,
modified, accelerated, compromised, restructured, waived, surrendered, or
released by Agent or the other Senior Lenders;
 
(ii) the Credit Agreement, the other Senior Loan Documents and the Senior
Obligations may be amended, restated, modified, extended, increased, renewed,
restructured, supplemented or terminated, in whole or in part, as Agent or the
other Senior Lenders may deem advisable from time to time, and any collateral
security at any time held by any Senior Lender for the payment of any of the
Senior Obligations may be sold, exchanged, restructured, waived, surrendered or
released, in each case all without notice to or further assent by Subordinated
Lender, which will remain bound under this Agreement, and Agent and the other
Senior Lenders shall have the right to grant waivers or consents to any Credit
Party with respect to any of the Senior Obligations or any Senior Loan Document
in any manner whatsoever, all without impairing, abridging, releasing or
affecting the subordination provided for herein; and
 
(iii) any refinancing of the Obligations may be consummated by any Credit Party.
 
(b) Subordinated Lender waives any and all notice of the creation, renewal,
extension, increase, or accrual of any of the Senior Obligations and notice of
or proof of reliance by any Senior Lender upon this Agreement.  The Senior
Obligations shall be deemed conclusively to have been created, contracted or
incurred in reliance upon this Agreement, and all dealings between the Credit
Parties and Senior Lenders shall be deemed to have been consummated in reliance
upon this Agreement.  Subordinated Lender acknowledges and agrees that each
Senior Lender has relied upon the subordination provided for herein in entering
into the Senior Loan Documents and in making funds available to Issuer
thereunder.  Subordinated Lender waives notice of or proof of reliance on this
Agreement and protest, demand for payment and notice of default.
 
 
7

--------------------------------------------------------------------------------

 
 
(c) The Subordinated Lender hereby consents to the Liens on the Collateral
created in favor of Senior Lenders under the Senior Loan Documents, and agrees
that the grant, perfection, priority and existence of such Liens does not and
shall not constitute a Subordinated Event of Default or any other default under
any Subordinated Loan Document.
 
(d) Concurrently with the issuance thereof, the Subordinated Lender shall
provide Senior Lenders with a copy of any written notice of any Subordinated
Event of Default or similar communication given by Subordinated Lender to Issuer
pursuant to or in connection with any of the Subordinated Loan Documents.  Upon
demand by Agent, the Subordinated Lender will furnish to Senior Lenders a
statement of the indebtedness owing from Issuer to the Subordinated
Lender.  Agent may rely without further investigations upon such statements.
 
(e)           Notwithstanding anything in the Subordinated Notes or any other
agreement or instrument to the contrary, the Subordinated Lender and Issuer
hereby acknowledge and agree that the maturity date of each of the Subordinated
Notes shall be no earlier than the date upon which the Senior Obligations are
paid in full.
 
6. Negative Covenants of the Subordinated Lender.  Until the payment in full of
the Senior Obligations, Subordinated Lender shall not, without the prior written
consent of Agent:
 
(a) sell, assign, or otherwise transfer, in whole or in part, the Subordinated
Obligations or any interest therein to any other Person (a “Transferee”) or
create, incur or suffer to exist any security interest, Lien, charge or other
encumbrance whatsoever upon any of the Subordinated Obligations or under any
Subordinated Loan Document in favor of any Transferee unless:
 
(i) such action is made expressly subject to this Agreement; and
 
(ii) the Transferee expressly acknowledges to Senior Lenders, by a written
agreement in form and substance satisfactory to Agent or by delivery of an
executed counterpart of this Agreement or an intercreditor and subordination
agreement substantially identical to this Agreement, the subordination provided
for herein and agrees to be bound by all of the terms and provisions hereof;
 
(b) permit any of the Subordinated Loan Documents or the Subordinated
Obligations to be amended, restated, renewed, restructured, increased, extended,
supplemented or otherwise modified in any respect, except Changes that do not
adversely affect Senior Lenders’ rights under this Agreement or the Senior Loan
Documents or Senior Lenders’ right to payment of the Senior Obligations; and
nothing herein shall prohibit the Subordinated Lender from converting into
equity of Parent, or prohibit the Company from permitting conversion into equity
of Parent, of any Subordinated Obligations;
 
(c) permit or require any Credit Party (other than Issuer) to guarantee, or
otherwise become liable in respect of, any of the Subordinated Obligations;
 
(d) permit or require any Credit Party to create any Lien on any of its assets
or properties to secure the payment or performance of any of the Subordinated
Obligations;
 
 
8

--------------------------------------------------------------------------------

 
 
(e) commence, or join with any creditors (other than Senior Lenders) in
commencing, or otherwise cause, any Insolvency Proceeding;
 
(f) challenge the validity, enforceability, priority of, or any other term or
provision of, any Senior Loan Document;
 
(g) challenge the extent, validity, creation, perfection or priority of, any
Lien created or purported to be created pursuant to any Senior Loan Document or
seek to avoid or subordinate any such Lien; or
 
(h) interfere in any respect with the exercise by any Senior Lender of any right
or remedy under any Senior Loan Document or applicable law;
 
provided, however, that a transfer by operation of law to the estate of a
deceased Subordinated Lender shall not be a default hereunder; provided,
further, that it is the express intent of all parties hereto that such transfer
shall be expressly subject to this Agreement, and that the Transferee of the
estate expressly acknowledges to Senior Lenders, by a written agreement in form
and substance satisfactory to Agent or by delivery of an executed counterpart of
this Agreement or an intercreditor and subordination agreement substantially
identical to this Agreement, the subordination provided for herein and agrees to
be bound by all of the terms and provisions hereof.
 
7. Senior Obligations Unconditional.  All obligations and agreements of the
Subordinated Lender hereunder shall be irrevocable, unconditional, continuing
and absolute.  All rights and interests of Senior Lenders hereunder, and all
agreements and obligations of the Subordinated Lender and any Credit Party,
shall remain in full force and effect irrespective of:
 
(a) any lack of validity or enforceability of any Senior Loan Document or if all
or any portion of the Senior Obligations and/or the Liens securing same are
subordinated, set aside, avoided or disallowed, in each case pursuant to an
Insolvency Proceeding or otherwise (as a result of the fraudulent transfer
provisions under the Bankruptcy Code, under any State fraudulent conveyance or
fraudulent transfer statute, or otherwise);
 
(b) any change in the time, manner or place of payment of, or in any other term
of, all or any of the Senior Obligations, or any amendment or waiver or other
modification, whether by course of conduct or otherwise, of the terms of any
Senior Loan Document, including, without limitation, any increase in any of the
Senior Obligations resulting from the extension of additional credit to any
Credit Party or otherwise;
 
(c) any exchange, release or nonperfection of any Lien upon any Collateral, or
any release, amendment, waiver or other modification, whether in writing or by
course of conduct or otherwise, of all or any of the Senior Obligations or any
guarantee thereof;
 
(d) the existence of any claim, set-off, defense, counterclaim or other right
that Subordinated Lender, any Credit Party or any other Person may have against
any Person, including, without limitation, any Senior Lender;
 
 
9

--------------------------------------------------------------------------------

 
 
(e) any manner of application of Collateral or any other collateral, or proceeds
thereof, to all or any of the Senior Obligations, or any manner of sale or other
disposition of any Collateral or any other collateral for all or any of the
Senior Obligations or any obligations of the Credit Parties under the Senior
Loan Documents or any other assets of the Credit Parties;
 
(f) any change, restructuring or termination of the corporate or other
organizational structure or existence of any Credit Party;
 
(g) any failure of any Senior Lender to disclose to Subordinated Lender any
information relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of Issuer or any of its
Affiliates now or hereafter known to any Senior Lender (Subordinated Lender
hereby waiving any duty on the part of Senior Lenders to disclose such
information); or
 
(h) any other event or circumstance which otherwise might constitute a defense
or counterclaim available to, or a discharge of, any Credit Party in respect of
any of the Senior Obligations, or of Subordinated Lender or any Credit Party in
respect of this Agreement.
 
8. Representations and Warranties.  Subordinated Lender represents and warrants
to each Senior Lender that:
 
(a) the Subordinated Notes: (i) have been issued to it for good and valuable
consideration; (ii) are owned by Subordinated Lender free and clear of any
security interests, Liens, charges or encumbrances whatsoever, other than the
interest of Senior Lenders under this Agreement; (iii) are payable solely and
exclusively to Subordinated Lender and to no other Person and is payable without
deduction for any defense, recoupment, offset or counterclaim, and (iv)
constitute the only evidence of the obligations evidenced thereby;
 
(b) Subordinated Lender has the power and authority and the legal right to
execute and deliver and to perform its obligations under this Agreement and has
taken all necessary action to authorize its execution, delivery and performance
of this Agreement;
 
(c) this Agreement has been duly executed and delivered by Subordinated Lender
and constitutes a legal, valid and binding obligation of Subordinated Lender,
enforceable against Subordinated Lender in accordance with its terms;
 
(d) the execution, delivery and performance of this Agreement will not violate
any provision of any requirement of law applicable to Subordinated Lender or
contractual obligation of Subordinated Lender and will not result in the
creation or imposition of any Lien on any of the properties or revenues of
Subordinated Lender pursuant to any requirement of law affecting, or any
contractual obligation of, Subordinated Lender, except the interest of Senior
Lenders under this Agreement;
 
(e) no consent or authorization of, filing with, or other act by or in respect
of, any arbitrator or governmental authority or any other Person (including,
without limitation, any creditor of Subordinated Lender), is required in
connection with the execution, delivery, performance, validity or enforceability
of this Agreement; and
 
 
10

--------------------------------------------------------------------------------

 
 
(f) no pending or, to the best of its knowledge, threatened litigation,
arbitration or other proceedings if adversely determined would in any way
prevent the performance of the terms of this Agreement; and
 
(g) as of the date hereof, Issuer is indebted to the Subordinated Lender under
the Subordinated Loan Documents in the aggregate amount of $1,478,081.
 
9. No Representation by Senior Lenders.  No Senior Lender has made, and no
Senior Lender does hereby nor otherwise make to the Subordinated Lender, any
representations or warranties, express, or implied, nor does any Senior Lender
assume any liability or obligation to or of Subordinated Lender with respect to:
 
(a) the financial or other condition of any Credit Party or any other obligors
under any instruments of guarantee with respect to the Senior Obligations;
 
(b) the enforceability, validity, value or collectibility of any of the Senior
Obligations or the Subordinated Obligations, any collateral therefor, or any
guarantee or security which may have been granted in connection with any of the
Senior Obligations or the Subordinated Obligations; or
 
(c) the title or right of any Credit Party or any other Person to transfer any
collateral or security.
 
10. Waiver of Claims.  To the maximum extent permitted by law, Subordinated
Lender waives any claim it might have against any Senior Lender with respect to,
or arising out of, any action or failure to act or any error of judgment,
negligence, or mistake or oversight whatsoever on the part of any Senior Lender
or its affiliates, directors, officers, employees, advisors, attorneys or agents
with respect to any exercise of any rights or remedies under any of the Senior
Loan Documents or any transaction relating to any of the Collateral or any
guarantee.  No Senior Lender or any of its affiliates, directors, officers,
employees, advisors, attorneys or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or any guarantee or for any delay
in doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral or realize upon any guarantee upon the request of any Credit Party or
Subordinated Lender or any other Person or to take any other action whatsoever
with regard to the Collateral or any part thereof or any guarantee.
 
11. Additional Provisions Applicable After Insolvency Event or
Proceeding.  Without limiting any other term or provision in this Agreement or
any Senior Loan Document:
 
(a) The provisions of this Agreement shall continue in full force and effect
notwithstanding the occurrence of any Insolvency Event or Insolvency Proceeding.
 
(b) Subordinated Lender agrees that it will not, directly or indirectly
(including, without limitation, as a member of any unsecured creditors’
committee), take any action in or relating to any proceeding arising from, as a
result of, in connection with or relating to any Insolvency Proceeding to
challenge, contest or object in any manner to (i) the extent, validity,
creation, enforceability, perfection or priority of any of the Senior
Obligations or any Senior Loan Document or any Liens or security interests
created under any Senior Loan Document, or any term or provision of this
Agreement or Subordinated Lender's obligations, undertakings, acknowledgments
and agreements set forth in this Agreement; (ii) any pleading, motion, notice,
objection or argument of or made by or on behalf of any holder of any of the
Senior Obligations based on, under or in respect of Section 361, 362, 363 or 364
of the Bankruptcy Code, including, without limitation, in respect of permitting
the use of any cash or other collateral by, or providing any financing to, any
Credit Party under either Section 363 or 364 of the Bankruptcy Code (including,
without limitation, any request for adequate protection, or in respect of the
sale or other disposition of any property by any Credit Party under Section 363
of the Bankruptcy Code or pursuant to a plan of reorganization or any other
arrangement (and Subordinated Lender shall be deemed to have consented to any
such sale or disposition and all of the terms applicable thereto); or (iii) the
payment of interest, fees, expenses or other amounts to Senior Lenders under
Sections 506(b) or 506(c) of the Bankruptcy Code or otherwise.  Subordinated
Lender agrees that it will not seek relief from the automatic stay or from any
other stay in any Insolvency Proceeding or take any action in derogation
thereof, without the prior written consent of Agent.  Subordinated Lender shall
not support or vote in favor of any plan of reorganization (and they shall be
deemed to have voted to reject any plan of reorganization) unless such plan (i)
pays off, in cash in full, all Senior Obligations or (ii) is accepted by the
Senior Lenders.  This Agreement, which the parties hereto expressly acknowledge
is a “subordination agreement” under Section 510(a) of the Bankruptcy Code,
shall be effective, during and after the commencement of an Insolvency
Proceeding.
 
 
11

--------------------------------------------------------------------------------

 
 
12. Further Assurances.  The Subordinated Lender and each Credit Party, at their
own sole cost and expense and at any time from time to time, upon the written
request of Agent will promptly and duly execute and deliver such further
instruments and documents and take such further actions as Agent reasonably may
request for the purposes of obtaining or preserving the full benefits of this
Agreement and of the rights and powers herein granted.  Without limiting the
generality of the foregoing, in the event of an assignment pursuant to any
Senior Loan Document or in the event of a refinancing of the Senior Obligations,
the Subordinated Lender and each Credit Party shall, upon the request of Agent,
execute a new intercreditor and subordination agreement upon the same terms as
this Agreement to further evidence and confirm that the Subordinated Obligations
are and shall remain junior and subordinate in right of payment to the Senior
Obligations.
 
13. Reinstatement.  The terms and provisions of this Agreement shall continue to
be effective or be reinstated, and the Senior Obligations shall not be deemed to
be paid in full, as the case may be, if at any time any payment of any of the
Senior Obligations is rescinded or avoided, or must otherwise be returned by any
Senior Lender pursuant to any Insolvency Proceeding or otherwise, all as though
such payment had not been made.
 
14. Expenses.  Subordinated Lender shall pay or reimburse Senior Lenders, upon
demand, for all of its reasonable and documented costs and expenses incurred in
connection with the enforcement of any rights and remedies with respect to the
Subordinated Lender under this Agreement, including, without limitation,
reasonable fees and disbursements of counsel to Senior Lenders.
 
15. Provisions Define Relative Rights.  This Agreement is intended solely for
the purpose of defining the relative rights of Senior Lenders, on the one hand,
and the Subordinated Lender, on the other, and the obligations of Credit Parties
in connection with the foregoing and no other Person shall have any right,
benefit or other interest under this Agreement.  Each Credit Party hereby agrees
that it will not make any payment on or in respect of any of the Subordinated
Obligations, or take any other actions, in contravention of the provisions of
this Agreement.
 
 
12

--------------------------------------------------------------------------------

 
 
16. Legend.  Subordinated Lender will cause each Subordinated Note (and each
other Subordinated Loan Document as Agent shall request) to bear upon its face
the following legend:
 
“ALL INDEBTEDNESS EVIDENCED BY THIS NOTE IS SUBORDINATED TO OTHER INDEBTEDNESS
PURSUANT TO, AND TO THE EXTENT PROVIDED IN, AND IS OTHERWISE SUBJECT TO THE
TERMS OF, THE INTERCREDITOR AND SUBORDINATION AGREEMENT, DATED AS OF AUGUST 28,
2015 (THE “SUBORDINATION AGREEMENT”), AS THE SAME MAY BE AMENDED, RESTATED,
SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, BY AND AMONG FUSION
TELECOMMUNICATIONS INTERNATIONAL, INC., A DELAWARE CORPORATION AND ITS
SUBSIDIARIES, OPUS BANK, AS ADMINISTRATIVE AGENT, AND THE HOLDERS FROM TIME TO
TIME OF THE OBLIGATIONS ARISING UNDER THE SUBORDINATED LOAN DOCUMENTS REFERRED
TO IN THE SUBORDINATION AGREEMENT, INCLUDING, WITHOUT LIMITATION, THIS NOTE, AND
EACH HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, ACKNOWLEDGES AND AGREES TO BE
BOUND BY THE PROVISIONS OF THE SUBORDINATION AGREEMENT.”
 
17. Powers Coupled With An Interest.  All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until the Senior Obligations are paid in full.
 
18. Authority of Senior Lenders.  Each Credit Party and Subordinated Lender
acknowledge and agree that the rights and responsibilities of each Senior Lender
under this Agreement with respect to any action taken by any Senior Lender or
the exercise or non-exercise by any Senior Lender of any option, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall be governed by the Senior Loan Documents and by such
other agreements with respect thereto as may exist from time to time among, but,
as between Senior Lenders, on the one hand, and the Credit Parties and the
Subordinated Lender, on the other hand, each Senior Lender shall be conclusively
presumed to be acting with full and valid authority so to act or refrain from
acting, and neither any Credit Party nor Subordinated Lender shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.
 
 
13

--------------------------------------------------------------------------------

 
 
19. Notices.
 
(a) All notices, requests and demands to or upon any Senior Lender, any Credit
Party or Subordinated Lender under this Agreement to be effective shall be in
writing (or by fax or similar electronic transfer confirmed in writing) and
shall be deemed to have been duly given or made (i) when delivered by hand or
(ii) if given by mail, when deposited in the mails by certified mail, return
receipt requested, or (iii) if by fax or similar electronic transfer, when sent
and receipt has been confirmed, addressed as follows:
 
If to Agent:                                                           Opus Bank
19900 MacArthur Blvd., 12th Floor
Irvine, CA 92612
Attn: Kevin McBride, Senior Managing Director
Telephone:  949.251.8182
E-mail:  kmcbride@opusBank.com

with a copy to :

                                Schiff Hardin LLP
                                233 South Wacker Drive, Suite 6600
                                Chicago, Illinois 60606
Attention: Sean T. Maloney
Telecopy: (312) 258-5600
Email: smaloney@schiffhardin.com

If to any Credit Party:                                          Fusion
Telecommunications International, Inc.
420 Lexington Avenue, Suite 1718
New York, New York 10170
Facsimile: (212) 972-7884
Attention: Gordon Hutchins, Jr., President

with a copy to:                                                      Kelley Drye
& Warren LLP
101 Park Avenue
New York, New York 10178
Attention: Jack Miles and Merrill Stone
Facsimile: (212) 808-7897
Email: mstone@kelleydrye.com

(b) If to Subordinated Lender, at its address or transmission number for notices
set forth under its signature below.
 
(c) Any Senior Lender, Credit Party or Subordinated Lender may change its
addresses and transmission numbers for notices by notice in the manner provided
in this Section 19.
 
20. Counterparts.  This Agreement may be executed by one or more of the parties
on any number of separate counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.  Delivery of
an executed counterpart of a signature page of this Agreement by facsimile or
other electronic means shall be effective as delivery of an original executed
counterpart of this Agreement.
 
21. Severability.  Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
 
 
14

--------------------------------------------------------------------------------

 
 
22. Integration.  THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT OF SENIOR
LENDERS, CREDIT PARTIES AND THE SUBORDINATED LENDER WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND THERE ARE NO PROMISES OR REPRESENTATIONS BY ANY SENIOR LENDER,
CREDIT PARTIES OR SUBORDINATED LENDER RELATIVE TO THE SUBJECT MATTER HEREOF NOT
REFLECTED HEREIN.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
 
23. Amendments in Writing; No Waiver; Cumulative Remedies.
 
(a) Any modification or waiver of any provision of this Agreement, or any
consent to any departure by any party from the terms hereof, shall not be
effective in any event unless the same is in writing and signed by Agent and the
Subordinated Lender, and then such modification, waiver or consent shall be
effective only in the specific instance and for the specific purpose given;
provided that any such modification or waiver that directly and adversely
affects the obligations of the Credit Parties hereunder and is sought to be
enforced against the Credit Parties shall require the consent of the Credit
Parties.
 
(b) No failure to exercise, nor any delay in exercising, on the part of any
Senior Lender, any right, remedy power or privilege hereunder shall operate as a
waiver thereof.  No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
 
(c) The rights and remedies herein provided are cumulative, may be exercised
singly or concurrently and are not exclusive of any other rights or remedies
provided by law.
 
(d) If Subordinated Lender or any Credit Party violates any of the terms or
provisions of this Agreement, in addition to any remedies in law, at equity or
otherwise, any Senior Lender may restrain or enjoin such violation in any court
of competent jurisdiction and may interpose this Agreement as a defense or
counterclaim in any action or proceeding by Subordinated Lender or any Credit
Party.
 
24. Section Headings.  The section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
 
25. Successors and Assigns.  This Agreement shall be binding upon the successors
and assigns of each Credit Party and Subordinated Lender and shall inure to the
benefit of Senior Lenders and their respective successors and assigns.
 
26. Governing Law; etc.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT
TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF NEW
YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAW OF
ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
 
27. Waiver of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
 
[the remainder of this page intentionally left blank]
 
 
15

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
 
  AGENT:

OPUS BANK, as Administrative Agent
 
 
By:      /s/ Kevin McBride                                  
Name: Kevin McBride
Title:    Senior Managing Director
 

 
 
16

--------------------------------------------------------------------------------

 
 
CREDIT PARTIES:
 

 
FUSION NBS ACQUISITION CORP.
 
 
By:  /s/ Gordon Hutchins, Jr.
       Name: Gordon Hutchins, Jr.
       Its:  President and COO
 
FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.
 
 
By:  /s/ Gordon Hutchins, Jr.
       Name: Gordon Hutchins, Jr.
       Its:  President and COO
 
 
 
NETWORK BILLING SYSTEMS, L.L.C.
 
 
By:  /s/ Gordon Hutchins, Jr.
       Name: Gordon Hutchins, Jr.
       Its:  Executive Vice President
 
 
PINGTONE COMMUNICATIONS, INC.
 
 
By:  /s/ Gordon Hutchins, Jr.
       Name: Gordon Hutchins, Jr.
       Its:  President and COO
 
 
FUSION BVX LLC
 
 
By:  /s/ Gordon Hutchins, Jr.
       Name: Gordon Hutchins, Jr.
       Its:  President and COO
 
 
 

 
 
17

--------------------------------------------------------------------------------

 
 
SUBORDINATED LENDER:
 

   
/s/ Marvin Rosen
 
Marvin Rosen

 
 
 
18

--------------------------------------------------------------------------------

 

Exhibit A

Subordinated Note

See Attached
 
 
 
19

--------------------------------------------------------------------------------

 
 
UNSECURED PROMISSORY NOTE
 

 $3,922,364.37  October 25, 2012

 

For value received, the undersigned maker (“Maker”), whose address is 420
Lexington Avenue, Suite 1718, New York, NY 10170, promises to pay to the order
of MARVIN S. ROSEN (“Lender”), whose address is 912 Fifth Avenue, #5A, New York,
NY 10035, the principal sum of $3,922,364.37 together with all accrued and
unpaid interest from the date of execution of the Note at the rate of 7.0% per
annum, compounding annually, upon the unpaid principal balance until the
principal balance is paid in full, payable in U.S. Dollars at the Lender’s
address set forth above, or at such other address as Lender may designate. The
unpaid principal balance of this Note and all accrued but unpaid interest will
be due and payable in full on the date that is 60 days following termination of
that certain Intercreditor and Subordination Agreement dated October 25, 2012 by
and between Fusion Telecommunications International, Inc., Praesidian Capital
Opportunity Fund III, LP, Praesidian Capital Opportunity Fund III-A, LP, and
Plexus Fund II, LP, and Praesidian Capital Opportunity Fund III, LP, as agent.
If the Maker defaults in its obligations hereunder, neither the failure of the
Lender to promptly exercise its right to declare the outstanding principal and
accrued but unpaid interest hereunder to be immediately due and payable, nor the
failure to exercise any other right or remedy the Lender may have for default,
nor the acceptance by the Lender of late or partial payments shall constitute a
waiver of such rights in connections with any future default on the part of the
undersigned or any other person who may be liable hereunder.
The Maker agrees to pay all of the Lender’s expenses of collecting and enforcing
this Note, including, without limitation, expenses and reasonable fees of legal
counsel, court costs and the cost of appellate proceedings.
This Note is to be construed and enforced according to the laws of the state of
New York without regard to the conflicts of laws or provisions thereof.
Maker waives any right of exemption and waives presentment, protest and demand,
notice of protest, demand, and/or dishonor and nonpayment of this Note.

Maker:
Fusion Telecommunications International, Inc., a Delaware corporation

By:                                                                           
Printed Name: Gordon Hutchins, Jr., as President
Date: October 25, 2012

41907-0025
CH2\17101039.4