EXHIBIT 10.55
 
EMPLOYMENT AND RESTRICTIVE COVENANT AGREEMENT

This Employment and Non-Competition Agreement ("Agreement") is entered into
effective as of October __, 2012, by and between Fusion Telecommunications
International, Inc. (“Fusion”), a Delaware corporation with its principal office
at 420 Lexington Avenue, Suite 1718, New York, NY 10170, and Jonathan Kaufman,
an individual resident of the State of New Jersey residing at 23 Brush Hill
Road, Kinnelon, NJ 07405 ("Kaufman"). Fusion and Kaufman may be referred to
herein as a “Party,” or collectively as the “Parties.”

WHEREAS, the Parties are among the parties to (a) that certain Membership
Interest Purchase and Sale Agreement, dated as of January 30, 2012, pursuant to
which Fusion proposes to indirectly acquire all of the membership interests of
Network Billing Systems, LLC (”NBS”), a New Jersey limited liability company and
(b) that certain Asset Purchase and Sale Agreement, dated as of January 30,
2012, pursuant to which Fusion proposes to indirectly acquire certain assets of
Interconnect Services Group II (“ISG”), a New Jersey limited liability company
(collectively, the “Acquisition Agreements”); and

WHEREAS, this is the "Employment Agreement” referred to in Article 6.5 of each
of the Acquisition Agreements and the “Restrictive Covenant Agreement” referred
to in Article 6.14(b) of each of the Acquisition Agreements; and

WHEREAS, subject to and commencing upon consummation of the transactions
contemplated by the Acquisition Agreements, Fusion desires to employ Kaufman and
Kaufman desires to be employed by Fusion, for the term of this Agreement and
upon the terms and conditions hereinafter described.

NOW, THEREFORE, the Parties hereto agree as follows:

1.  
EMPLOYMENT, DUTIES, AND TERM

1.1           Employment. Fusion hereby agrees to employ Kaufman to serve as
President of the Corporate Services Division of Fusion, and Kaufman hereby
accepts such employment, subject to the terms and conditions of this Agreement.

1.2           Duties. Kaufman shall be responsible for the overall day-to-day
management of the Corporate Services Division of Fusion, and shall diligently
perform the duties appropriate to that position, together with such other duties
as may be reasonably assigned from time to time during the Employment Period (as
hereinafter defined) by Fusion’s President and Chief Operating Officer
(“President”), Chief Executive Officer (“CEO”), or Board of Directors. Kaufman
shall report to the President, and shall follow the day-to-day instructions and
directions of the President. Kaufman shall devote substantially all of his
working time and attention to the business and affairs of Fusion (excluding any
vacation, holiday, or sick leave to which he is entitled), and shall use his
reasonable best efforts to diligently and faithfully promote the best interests
of Fusion.
 
 
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1.3 Term. Kaufman's employment by Fusion shall commence on the date of this
Agreement, and continue for a period of two (2) years thereafter, unless
extended or earlier terminated pursuant to the provisions of this Agreement (the
“Employment Period”). The Employment Period may be extended upon the mutual
written agreement of Kaufman and Fusion; provided, however, that if the
Employment Period is extended, the provisions of Section 6 of this Agreement
shall also be extended, such that those provisions in all cases extend for one
year beyond the end of any extended Employment Period hereunder.

2.  
COMPENSATION AND BENEFITS

2.1           Base Salary. Fusion agrees to initially pay Kaufman an aggregate
annual base salary ("Base Salary") of Two Hundred Thousand Dollars ($200,000.00)
per year, payable in regular, semi-monthly installments according to Fusion’s
normal payroll schedule and practices. Fusion may withhold from all amounts
payable to Kaufman hereunder, such withholding and other taxes as may be
required by applicable laws, rules and regulations. Kaufman’s Base Salary shall
be subject to review by Fusion’s Board of Directors and/or Compensation
Committee at such time as the base salaries of other Fusion executives, as a
group, are reviewed, and Kaufman’s Base Salary may be increased based upon
performance or other criteria established by the Board of Directors and/or
Compensation Committee, as the case may be.

2.2           Incentive Compensation. Kaufman shall be eligible for such
incentive compensation payments, if any, as may be awarded by the Compensation
Committee and/or the Board of Directors, based upon the achievement of Fusion’s
performance objectives.

2.3           Employee Stock Options. Kaufman shall be eligible for such stock
option awards, if any, as may be made from time to time by the Compensation
Committee and/or the Board of Directors, based on performance.

2.4           Employee Benefits. Kaufman shall be eligible for the basic
employee benefits provided to all Fusion employees, including, but not limited
to, medical coverage, dental coverage, disability insurance, life insurance,
401(k) plan, and sick pay benefits, provided that in the event Fusion makes
additional or other benefits available to its executive management, as a group,
Kaufman shall be entitled to participate in those additional or other benefits.

2.5           Vacation, Holidays, and Personal Days. Kaufman shall be eligible
for vacation, based upon Fusion’s regular employee policies and procedures.
Kaufman shall also be eligible each year for scheduled holidays, floating
holidays, and personal days, based upon Fusion’s regular employee policies and
procedures.
 
 
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2.6           Expense Reimbursement. Kaufman shall be reimbursed for all
reasonable and approved business related expenses, including, but not limited
to, expenses for required business travel, entertainment, vehicle mileage, and
cell phone use. Such reimbursement shall be subject to the submission of
reasonable documentation and receipts.

3.  
TERMINATION

3.1           Termination by Mutual Agreement. The Employment Period may
terminate at any time, upon the mutual written agreement of Fusion and Kaufman.

3.2           Termination on Death. The Employment Period shall terminate
immediately on the death of the Kaufman.

3.3           Termination by Fusion. Fusion may terminate this Agreement and the
employment of Kaufman as follows:

3.3.1           Termination for Disability. Fusion may terminate this Agreement
and the employment of Kaufman, if Kaufman shall become mentally or physically
ill, disabled or otherwise unable to substantially perform his duties under this
Agreement for a continuous period of more than ninety (90) days.

3.3.2           Termination by Fusion for Cause. Fusion may terminate this
Agreement and the employment of Kaufman for “Fusion Cause” at any time upon ten
(10) days prior written notice to Kaufman stating the facts constituting such
Fusion Cause as defined in paragraph 3.3.3 below.

3.3.3           Definition of Fusion Cause. For the purposes of this Agreement,
Fusion Cause shall mean (a) the conviction of, or plea of guilty to, any crime
which could impair Fusion or its reputation or good will or the value of its
shares; (b) the commission of any act of fraud, misappropriation, or
embezzlement against Fusion or any of its affiliates; (c) the willful failure of
Kaufman to comply with lawful directives of Fusion’s Board of Directors that
could reasonably be considered material by a similarly situated employee; (d)
the breach by Kaufman of any material term or condition of this Agreement and,
if such breach is curable, the failure of Kaufman to cure such breach within
twenty (20) days following his receipt of written notice thereof or (e)
Kaufman’s failure to comply with any material policy of Fusion.

3.4           Termination by Kaufman. Kaufman may terminate this Agreement and
his employment hereunder as follows:

3.4.1           Termination by Kaufman Without Good Reason.  This Agreement may
be voluntarily terminated by Kaufman at his discretion, without Good Reason (as
defined in Section 3.4.2) by providing Fusion with written notice of such
termination (the “Kaufman Termination Notice”), specifying a date, which shall
be at least one hundred twenty (120) days thereafter, on which Kaufman’s
termination shall become effective (the “Kaufman Termination Effective Date”).
In the event of termination by Kaufman pursuant to this subsection, Fusion may,
if it so choses, immediately relieve Kaufman of all duties and immediately
terminate this Agreement.
 
 
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3.4.2           Termination by Kaufman for Good Reason. This Agreement may be
voluntarily terminated by Kaufman, on thirty (30) days prior written notice to
Fusion, for “Good Reason” which shall be defined as (a) Fusion requiring that
Kaufman relocate from his current location in Kinnelon, New Jersey, to perform
his duties under this Agreement; (b) Fusion requiring Kaufman to engage in
excessive business-related travel, as reasonably determined by Kaufman, it being
understood by Kaufman that his duties under this Agreement may require him to
engage in reasonable business-related travel; (c) a “change in control” of
Fusion, which shall be defined as any outside entity not currently affiliated
with Fusion acquiring more at least 50.1% of the voting shares of Fusion; or (d)
Fusion voluntarily commencing any proceeding, or filing any petition, seeking
relief under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other Federal or state bankruptcy, insolvency, receivership, or
similar applicable law.

4.  
PAYMENT UPON TERMINATION

4.1           In the event of a Termination on Death, or Termination by Fusion
for either Disability or Fusion Cause, Fusion shall pay to Kaufman (or to his
estate) an aggregate amount equal to the sum of (a) all amounts due to and
earned by Kaufman under Section 2 hereof through the effective date of
termination, and (b) all other benefits provided under the terms of applicable
employee plans to similarly terminated employees.

4.2           In the event of a Termination by Kaufman Without Good Reason, and
provided that Kaufman provides Fusion with a timely Kaufman Termination Notice,
Fusion shall pay to Kaufman an aggregate amount equal to the sum of (a) all
amounts due to and earned by Kaufman under Section 2 hereof, including for the
period from the date of the Kaufman Termination Notice through the Kaufman
Termination Effective Date (or for the period from the date of the Kaufman
Termination Notice through the date that is one hundred twenty (120) days
thereafter in the event Fusion elects to immediately terminate this Agreement
pursuant to the last sentence of Section 3.4.1, above), and (b) all other
benefits provided under the terms of applicable employee plans to similarly
terminated employees.

4.3           In the event of a Termination by Kaufman for Good Reason, or a
Termination by Fusion other than under Sections 3.1, 3.2, or 3.3, Fusion shall
pay to Kaufman an aggregate amount equal to the sum of (a) all amounts due to
and earned by Kaufman under Section 2 hereof through the effective date of
termination, (b) all other benefits provided under the terms of applicable
employee plans to similarly terminated employees, and (c) an amount equal to
Kaufman’s then current Base Salary pro-rated for a period of (90) days from the
effective date of termination.
 
 
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5.  
CONFIDENTIALITY

5.1           Kaufman recognizes that the services to be performed by Kaufman
hereunder are special, unique, and extraordinary and that, by reason of his
employment with Fusion, he may acquire confidential information and trade
secrets concerning the operation of Fusion and its subsidiaries and other
affiliates (collectively, the “Protected Parties”) which are not readily
available from sources outside of the Protected Parties and/or the use or
disclosure of which would cause Fusion substantial loss and damages which could
not be readily calculated and for which no remedy at law would be
adequate.  Accordingly, Kaufman agrees and promises that Kaufman will not, for
any reason or at any time, whether during or after his employment with Fusion,
use, for himself or for the benefit of any other person, firm, corporation, or
entity, or disclose to any person any Confidential Information (as defined
below) obtained by him in the course of his employment with
Fusion.  “Confidential Information” shall include any information about the
Protected Parties not generally available to the public and shall include, but
not be limited to, their customer lists, supplier lists, vendor lists, employee
lists, their marketing data or plans, business plans, competitive strategies,
product development, specifications, schematics, methods, and processes, their
confidential notes, trade secrets, procedures, and research data, their computer
codes and passwords, programs, frameworks, or models, their sales, financial,
marketing, training and technical information, and any other information,
whether communicated orally, electronically, in writing or in other tangible
forms concerning how the Protected Parties create, develop, acquire or maintain
their products and marketing plans, target their potential customers and operate
their retail and other businesses, plus, to the extent made available to the
Protected Parties on a confidential basis, similar information regarding the
businesses of the customers and suppliers of the Protected Parties.  Kaufman
further agrees to maintain the privacy, security and confidentiality of all
Confidential Information in accordance with (a) all applicable statutes and
regulations, and (b) the protocols, rules, policies, and other requirements of
accrediting agencies, licensors and authorities that are applicable to the
operation of Fusion’s business.
 
5.2           Kaufman shall not disclose any Confidential Information, directly
or indirectly, to any person or entity for any reason or purpose whatsoever, nor
shall Kaufman use it in any way, except (a) in the course of Kaufman’s
employment with, and for the benefit of, the Protected Parties (b) to enforce
any rights or defend any claims hereunder or under any other agreement to which
Kaufman is a party, provided that such disclosure is relevant to the enforcement
of such rights or defense of such claims and is only disclosed to the extent
necessary in the formal proceedings related thereto, or (c) when required to do
so by a court of law, by any governmental agency having supervisory authority
over the business of Fusion or by any administrative or legislative body
(including a committee thereof) with jurisdiction to order him to divulge,
disclose or make accessible such information, provided that Kaufman shall give
prompt written notice to Fusion of such requirement, disclose no more
information than is so required, and cooperate with any attempt by Fusion to
obtain a protective order or similar treatment.
 
 
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5.3           Kaufman confirms that all of the Confidential Information is the
exclusive property of Fusion. All business records, papers and documents kept or
made by Kaufman while employed by Fusion relating to the business of Fusion
shall be and remain the property of Fusion at all times. Upon the request of
Fusion at any time, Kaufman shall promptly deliver to Fusion, and shall retain
no copies of, any written materials, records and documents made by Kaufman or
coming into his possession while employed by Fusion concerning the business or
affairs of Fusion other than personal materials, records and documents
(including notes and correspondence) of Kaufman not containing proprietary
information relating to such business or affairs.
 
5.4           The provisions of Section 5.2 shall not apply to Confidential
Information that: (a) was in Kaufman’s lawful possession without restriction on
use or disclosure prior to receipt thereof from Fusion; or (b) was received by
Kaufman in good faith from a third party not subject to a confidential
obligation to Fusion and without breach of this Agreement; or (c) now is or
later becomes part of the public domain through no breach of a confidential
obligation by Kaufman; or (d) was developed by Kaufman independently from and
without Kaufman having access to any of the Confidential Information received
from Fusion; or (e) is authorized in writing by Fusion to be released or is
designated in writing by Fusion as no longer being confidential or proprietary.

5.5           It is understood that while employed by Fusion or any of its
subsidiaries or other affiliates, Kaufman will promptly disclose to Fusion and
to no one else, any idea, invention, technique, modification, process, or
improvement (whether patentable or not), any industrial design (whether
registrable or not), any mask work, however fixed or encoded, that is suitable
to be fixed, embedded or programmed in a product (whether recordable or not) and
any work of authorship (whether or not copyright protection may be obtained for
it) created, conceived, or developed by Kaufman (“Inventions”), either solely or
in conjunction with others, during Kaufman’s employment with Fusion or any of
its subsidiaries or other affiliates, that relates in any way to, or is useful
in any manner to, the business then being conducted or proposed to be conducted
by Fusion, any of its subsidiaries or other affiliates, or any of their
respective affiliates and any such item created by Kaufman, either solely or in
conjunction with others, that is based upon or uses Confidential
Information.  Kaufman agrees that (a) each Invention belongs, or shall belong,
exclusively to Fusion from conception, (b) all of Kaufman’s writings, works of
authorship, specially commissioned works, and other Inventions are works made
for hire and are the exclusive property of Fusion, including any copyrights,
patents, or other intellectual property rights pertaining thereto, and (c) if it
is determined that any such Inventions are not works made for hire, Kaufman
hereby irrevocably assigns to Fusion all of Kaufman’s right, title and interest,
including rights of copyright, patent, and other intellectual property rights,
to or in such Inventions.  Kaufman covenants that Kaufman shall promptly (w)
provide a separate written irrevocable assignment to Fusion, or to an individual
or entity designated by Fusion, at Fusion’s request and without additional
compensation, all of Kaufman’s right to any Inventions in the United States and
all foreign jurisdictions, (x) at Fusion’s expense, execute and deliver to
Fusion such applications, assignments, and other documents as Fusion may request
in order to apply for and obtain patents or other registrations with respect to
any Invention in the United States and any foreign jurisdictions, (y) at
Fusion’s expense, execute and deliver all other papers deemed necessary by
Fusion to carry out the above obligations, and (z) give testimony and render any
other assistance in support of Fusion’s rights to any Invention (with Fusion
paying Kaufman a reasonable fee for Kaufman’s time if Kaufman’s employment with
Fusion or any of its subsidiaries or other affiliates has ended at the time of
such testimony or assistance).  In the event that Fusion is unable to secure
Kaufman’s signature after reasonable effort in connection with any patent,
trademark, copyright or other similar protection relation to an Invention,
Kaufman irrevocably designates and appoints Fusion and its respective officers
and agents as Kaufman’s agent and attorney-in-fact, to act for and on Kaufman’s
behalf and stead to execute and file any such application and to do all other
lawfully permitted acts to further the prosecution and issuance of patents,
trademarks, copyrights or similar protection thereon with the same legal force
and effect as if executed by Kaufman.  At all times during and after Kaufman’s
employment by Fusion, Kaufman shall assist Fusion in obtaining, maintaining, and
renewing patent, copyright, trademark and other appropriate protection for any
Invention, in the United States and in any foreign jurisdictions, at Fusion’s
expense.
 
 
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5.6           The provisons of this Section 5 shall continue during the term of
this Agreement and survive any termination of this Agreement for a period of
three (3) years.

6.  
RESTRICTIVE COVENANTS

6.1           Kaufman, by entering into this Agreement, acknowledges receipt of
good and adequate consideration to support the covenants provided in this
Section 6, these covenants being a fundamental part of Fusion’s willingness and
inducement to consummate the transactions contemplated by the Acquisition
Agreements and to employ Kaufman hereunder. Subject to Section 1.3, the
restrictive covenants of this Section 6 shall be in full force and effect for
the greater of thirty-six (36) months from the date of this Agreement or twelve
months following the termination of the Employment Period.  Kaufman covenants
and agrees that, so long as the restrictive covenants of this Section 6 shall be
in full force and effect, Kaufman will not, directly or indirectly:
 
6.1.1           Own any interest in (other than by ownership of less than five
percent (5%) of any class of stock of a publicly held corporation), manage,
operate, control, loan money to, be employed or engaged by, render consulting or
advisory services to, serve as a director of, represent, or participate in or be
connected with the management, operation or control of, any business that
competes with the business of Fusion or its affiliates, including NBS (the
“Business”), in any jurisdiction in which the Business is or proposes to be
conducted or in which Fusion or its affiliates including NBS have customers; and
will not, directly or indirectly, deliver such services into any such
jurisdiction.
 
6.1.2           Solicit any client or customer of Fusion or any of its
affiliates to discontinue its use of Fusion’s or its affiliate’s services or to
divert such business to any individual, partnership, firm, corporation or other
entity then in competition with Fusion or any of its affiliates.
 
6.1.3           Solicit any of the employees, sales representatives or
independent sales agents of Fusion or any of its affiliates to work for any
business, individual, partnership, firm, corporation or other entity then other
than Fusion or its affiliates.
 
6.2           The restrictive covenants contained in this Section 6 are in
addition to, and not in limitation of, the rights and protections to which
Fusion is otherwise entitled by law. It is the desire and intent of the parties
that the provisions of this Section 6 shall be enforced to the fullest extent
permitted under the laws and public policies of each jurisdiction in which
enforcement is sought. If any court of competent jurisdiction determines that
any provision of this Section 6 is unenforceable because of the duration or
geographic scope of such provision, such court shall have the power to reduce
the duration or scope of such provision, as the case may be, and, in its reduced
form, such provision shall then be enforceable.
 
 
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6.3           The restrictive covenants contained in this Section 6 shall cease
to apply in the event of a payment default by Fusion or its affiliates under the
Acquisition Agreements (subject to any applicable grace period and the
provisions of any applicable Subordination Agreement).
 
7.  
GENERAL PROVISIONS

7.1           No Assignment.  Neither this Agreement nor any obligation, right
or interest hereunder shall be assignable by Kaufman without the prior written
consent of the Fusion; provided, however, that nothing herein shall preclude the
Kaufman from designating in writing a beneficiary or beneficiaries to receive
any compensation payable to him or any benefit receivable by him under this
Agreement upon his death or incapacity, nor shall it preclude the executors,
administrators, or any other legal representatives of Kaufman or his estate from
assigning any rights hereunder to the person or persons entitled thereto.

7.2           Severability. If any provision of this Agreement is held by a
court of competent jurisdiction to be invalid or unenforceable, then this
Agreement including all of its remaining terms, shall remain in full force and
effect as if such invalid or unenforceable terms had never been included.

7.3           Waiver. No waiver by a party to this Agreement of any condition,
term or provision of this Agreement shall be deemed to be a waiver of any
preceding or subsequent breach of the same or any other condition, term or
provision hereof.
 
7.4           Notices. Any notice required by this Agreement or given in
connection with it shall be provided in writing, and shall be given to the
appropriate Party by personal delivery, certified mail, or recognized overnight
delivery service. Notice shall be deemed to have been duly made if so delivered
to the appropriate Party at the respective address as it first appears above.
Any Party hereto may change its respective addresses upon written notice to the
other Party, given in the manner provided in this paragraph.

7.5           Headings. The headings in this Agreement are inserted for
convenience only and shall not be used to define, limit, or describe the scope
of this Agreement or any of its obligations.

7.6           Amendment. None of the terms and conditions of this Agreement
shall be amended or modified, unless expressly consented to in writing and duly
executed by both Parties.

7.7           Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without regard to
conflicts of law principles, rules, statutes, or precedents.
 
 
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7.8           Entire Agreement. This Agreement contains the entire agreement of
the Parties with respect to the subject matter hereof and supersedes any and all
prior written or oral agreements between the Parties concerning the employment
of Kaufman.

7.9           Binding Agreement. This Agreement shall be binding upon and inure
to the benefit of the Parties hereto, and their respective heirs, successors,
legal representatives, and assigns, as the case may be.

7.10           Arbitration; Injunctive Relief. Any differences, claims, or
matters in dispute between Kaufman and Fusion, arising out of this Agreement or
connected herewith, shall be submitted by them to arbitration before the
American Arbitration Association or its successor (“AAA”), in accordance with
the AAA Rules for Commercial Arbitration then in effect. The arbitration shall
be heard in New York City, New York, and the determination of the arbitrator
shall be final, absolute and binding on the Parties. Notwithstanding the
foregoing, Kaufman, by entering into this Agreement, expressly agrees that
Fusion will or would suffer irreparable injury if the Employee were to violate
any or all of the provisions of Section 5 or Section 6 and that, accordingly, in
the event of a breach (or threatened breach) by Kaufman of any of the provisions
of Section 5 or Section 6, Fusion shall (in addition to all other rights and
remedies available to it) be entitled to an injunction restraining any such
breach or threatened breach thereof.  Nothing herein shall be construed,
however, as prohibiting Fusion from pursuing any other remedies at law or in
equity that it may have for any such breach or threatened breach of any
provision of Section 5 or Section 6, including the recovery of damages.

7.11           Counterparts; Facsimile.  This Agreement may be executed in two
or more counterparts, each of which shall be an original and all of which shall
be deemed to constitute one and the same instrument. This Agreement may be
executed and delivered by facsimile signature.

7.12           Compliance with Code Section 409A. This Agreement is intended not
to result in the imposition of any interest or additional tax under Section 409A
of the Internal Revenue Code of 1986, as amended, and shall be administered,
interpreted and construed in a manner consistent with such intent.

7.13           Non-Disparagement. During the term of this Agreement and
thereafter (a) Kaufman shall not, directly or indirectly, disparage Fusion or
any of its products or services or wrongfully interfere with or disrupt the
relationship, contractual or otherwise, between Fusion (and/or its affiliates)
and any other party, including without limitation any supplier, distributor,
agent, lessor, lessee, licensor, or licensee, and (b) Fusion shall not, directly
or indirectly, disparage Kaufman or wrongfully interfere with or disrupt the
relationship, contractual or otherwise, between Kaufman (and/or his affiliates)
and any other party.
 
 
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IN WITNESS WHEREOF, Fusion and Kaufman have duly executed this Agreement as of
the date and year first written above.

Fusion Telecommunications         International, Inc. (“Fusion”)            
Jonathan Kaufman (“Kaufman”)                      

 
 
 
 
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