Unassociated Document


    Amendment
      to Stock Purchase Agreement 

     

    This
      Amendment to the Stock Purchase Agreement dated
      as
      of March 24, 2006 (this “Amendment”),
      is
      entered into by and between Karamco,
      Inc. (“Karamco”), Efonica, FZ-LLC (“Efonica or Company”) and Fusion
      Telecommunications International, Inc. (“Fusion”).


     

    RECITALS:

     

    A.  Fusion,
      Efonica and Karamco have entered into that certain Stock Purchase Agreement
      dated January 11, 2005, as amended on February 9, 2005, May 12, 2005 and
      November 2, 2005 (the “Agreement”),
      pursuant to which Fusion purchased all of Karamco’s shares of Efonica, FZ-LLC
      (the “Company”).

     

    B.  At
      the
      present time, Fusion, Efonica and Karamco
      request, and all are agreeable to amend the Agreement, subject to the terms
      and
      conditions hereinafter set forth.

     

    Now,
      Therefore,
      in
      consideration of the premises and other good and valuable consideration, the
      receipt and adequacy of which are hereby acknowledged, Fusion, Efonica and
      Karamco hereby agree as follows:


     

    AGREEMENTS:

     

    1.  RECITALS.
      The
      foregoing Recitals are hereby made a part of this Amendment.

     

    2.  DEFINITIONS.
      Capitalized words and phrases used herein without definition shall have the
      respective meanings ascribed to such words and phrases in the
      Agreement.

     

    3.  AMENDMENT
      TO AGREEMENT.
      Section
      1 of the Agreement is hereby amended in its entirety to read as
      follows: 


     

    “SECTION

    1

    


    PURCHASE
      AND SALE OF THE SHARES

    


     1.1
      Purchase and Sale. Upon the terms and subject to the conditions of this
      Agreement, at the Closing (as defined below), Karamco agrees to sell to Buyer,
      and Buyer agrees to purchase from Karamco, the number of Shares owned by
      Karamco, as set forth opposite its name on Schedule 1 hereto 249 Shares). The
      aggregate purchase price for the Shares (the "Final Purchase Price") shall
      be
      set forth and payable as expressed on Section 1.2.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.2 Purchase
      Price 

     

    Base
      Purchase Price. The base purchase price for the Shares (the "Base Purchase
      Price") shall be NINE
      MILLION SEVEN HUNDRED EIGHTY FIVE THOUSAND SEVEN HUNDRED
      ($9,785,700) DOLLARS
      subject
      to adjustment pursuant to Section 1.2(C)(vii) and Section 8 of the Agreement,
      and payable as set forth in Section 1.2(C).

    


    C. Payment
      at Closing. At Closing, Buyer shall deliver to Karamco:

    


    (i) Stock. 1,439,463
      shares of Buyer’s common stock (the aggregate number of Shares under this
      Section shall be referred to as the “Base Shares”); 



    (ii) Escrow.
      Buyer’s attorney (the “Escrow Agent”) shall hold 675,581 shares of the Base
      Shares (not to include the Registered Stock) in escrow (the “Escrowed Stock”)
      and subject to an Escrow Agreement between the parties and the Escrow Agent,
      a
      form of which is attached hereto as Exhibit “D”. The Escrowed Stock will be
      subject to adjustment pursuant to Section 1.2(C)(vi); 

    


    (iii) Cash
      Payment. Within three (3) days of the Closing, Buyer will pay Karamco an amount
      equal to FIVE HUNDRED THOUSAND ($500,000.00) DOLLARS;”

    


    (iv)
      (a)
      Registration. Buyer shall use its reasonable efforts to cause 150,000 shares
      of
      the Base Shares to be registered (the “Registered Shares”) within 60 days of the
      Buyer’s initial public offering , unless said date is extended with Karamco’s
      consent. The date the Registered Shares are effectively registered shall be
      defined as the “Registration Date.” Fusion shall use its best efforts to keep
      the registration statement covering the Registered Shares (the “Registration
      Statement”) effective for the period set forth in this section (iv) (a).
      Following registration, Karamco may sell up to an aggregate of $1 million in
      Registered Shares in transactions (including block transactions) that may take
      place in the over-the-counter market or an exchange including ordinary broker
      transactions, privately negotiated transaction or through sales to one or more
      dealers for resale as principals (1/2 of the Registered Shares on the
      Registration Date and the remaining 1/2 on May 15, 2005). In the event Buyer
      is
      unable to cause the Registered Shares to be registered as set forth above,
      Buyer
      shall purchase the Registered Shares from Karamco (in the amount Karamco would
      have been otherwise able to sell as set forth above) at the higher of the IPO
      price or the average 5 day bid price prior to the date Buyer notifies Karamco
      that it is unable to cause the registered Shares to be registered. In the event
      that Karamco’s aggregate gross proceeds of a sale of the Registered Shares as
      set forth in this Section 1.2C(iv)(a), in the aggregate, and within 635 days
      following the effective date of the Registration Statement, does not equal
      $1,000,000, the Buyer shall pay Karamco the difference between the aggregate
      gross proceeds of Karamco’s sale of the Registered Shares and $1,000,000 (the
“Difference Payment”). On April 25, 2005, Fusion made a payment of $150,000 to
      Karamco and on May 12, 2005 made a payment of $175,000 and on the date hereof,
      will make an additional payment of $105,000 which payments ($430,000 in the
      aggregate) shall be deducted from the Difference Payment owed. In the event
      that
      the Difference Payment owed, pursuant to this Section 1.2(C)(iv)(a) of the
      Agreement, is less than $430,000, Karamco shall immediately reimburse Fusion
      for
      such excess. The Company retains the right to advance additional funds in its
      sole discretion. 

     

    
      
        
        

      

      
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    (b)
      Karamco’s Obligation to reimburse Fusion for any excess shall be secured by
      50,387 shares (the “Escrowed Shares”) of Fusion’s common stock owned by Karamco.
      Upon execution of this Agreement, Karamco will deliver the Escrowed Shares
      to
      the Escrow Agent until such excess is repaid.

    


    (v) Lock-Up.
      The unregistered Base Shares issued to Karamco will be subject to a lock-up
      for
      a one year period following the effective date of the IPO (“Lock-Up Period”).
      Karamco agrees to execute an agreement to that effect in the form attached
      hereto as Exhibit “B” (the “Lock-Up Agreement”). In the event a significant
      shareholder (owner of 5% or more of the issued and outstanding common stock
      (“Significant Shareholder”)) is allowed to register all or a portion of his
      common stock prior to the expiration of the Lock-Up Period, Karamco will be
      allowed to register its shares on a pro rata basis (will be allowed to sell
      the
      same % of shares the Significant Shareholder sells). If any Significant
      Shareholder shall receive and determine to accept any bona fide offer from
      a
      third party (the "Offeror") to purchase all or substantially all of such
      Significant Shareholders' Shares “a "Tag-Along Offer") prior to expiration of
      the Lock-Up Period, Karamco shall have the right to participate in such
      transaction in the manner set forth in this Section.  The Significant
      Shareholders shall, promptly after receipt of a Tag-Along Offer, send a copy
      thereof or a summary of the terms of any offer to Karamco.  Karamco shall
      have the right to cause the Significant Shareholder(s) to condition his or
      their
      sale of Shares to an Offeror on the sale of all, or a pro-rata amount (equal
      to
      the percentage of the selling Significant Shareholder), of Shares of Karamco
      to
      Offeror (the "Tag-Along Shareholder").  The purchase price and payment
      terms for the Shares of the Tag-Along Shareholder shall be the same price per
      Share and same payment terms for the Shares as the Significant Shareholders'
      Shares and as set forth in the Tag-Along Offer.  Should Karamco choose to
      participate in a sale of Shares pursuant to this Section, it shall pay its
      proportionate share of any expenses attributable to the sale of Shares
      hereunder. In the event Karamco sells any stock prior to expiration of the
      Lock-Up Period, it shall cause the purchaser to be bound by the Lock-up
      Agreement.



    (vi) Post
      Closing Adjustments.  On
      the
      date hereof, the Escrow Agent shall release the Escrow Shares to Karamco. The
      released shares shall be subject to a lock -up until February 15, 2007, and
      Karamco agrees to execute a Lock - Up Agreement to that effect as a condition
      of
      such release. 

     

    
      
        
        

      

      
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    (vii) Limitation
      on Sale Following Lock-Up Period. The Lock-Up Agreement will further provide
      after the Lock-Up Period sales by the Stockholder shall be subject to Rule
      144.
      Both parties acknowledge that the holding period for Karamco’s unregistered
      shares commences at the time of closing.”

     

    4.  REPRESENTATIONS
      AND WARRANTIES.
      To
      induce Karamco to enter into this Amendment, Fusion hereby certifies, represents
      and warrants to Karamco that:

     

    4.1  Authorization.
      It is
      duly authorized to execute and deliver this Amendment and is and will continue
      to perform its obligations under the Agreement, as amended hereby.

     

    4.2  No
      Conflicts.
      The
      execution and delivery of this Amendment
      and the performance by Fusion of its obligations under the Agreement, as amended
      hereby, do not and will not conflict with any provision of law or of the
      articles of incorporation or bylaws/articles of organization or operating
      agreement, as applicable, of Fusion or of any agreement binding upon
      Fusion.

     

    4.3  Validity
      and Binding Effect.
      The
      Agreement, as amended hereby, is a legal, valid and binding obligation of
      Fusion, enforceable against Fusion in accordance with its terms, except as
      enforceability may be limited by bankruptcy, insolvency or other similar laws
      of
      general application affecting the enforcement of creditors’ rights or by general
      principles of equity limiting the availability of equitable
      remedies.

     

    5.  GENERAL.

     

    5.1  Governing
      Law; Severability.
      This
      Amendment shall be construed in accordance with and governed by the laws of
      the
      State of New York. Wherever possible each provision of the Agreement and this
      Amendment shall be interpreted in such manner as to be effective and valid
      under
      applicable law, but if any provision of the Agreement and this Amendment shall
      be prohibited by or invalid under such law, such provision shall be ineffective
      to the extent of such prohibition or invalidity, without invalidating the
      remainder of such provision or the remaining provisions of the Agreement and
      this Amendment.

     

    5.2  Successors
      and Assigns.
      This
      Amendment shall be binding upon Fusion, Efonica and Karamco and their respective
      successors and assigns.

     

    5.3  Continuing
      Force and Effect of the Agreement.
      Except
      as specifically modified or amended by the terms of this Amendment, all other
      terms and provisions of the Agreement are incorporated by reference herein,
      and
      in all respects, shall continue in full force and effect. Fusion, by execution
      of this Amendment, hereby reaffirms, assumes and binds itself to all of the
      obligations, duties, rights, covenants, terms and conditions that are contained
      in the Agreement 

     

    
      
        
        

      

      
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    5.4  Expenses.
      Fusion
      shall pay all costs and expenses in connection with the preparation of this
      Amendment. 

     

    4.5 Counterparts.
      This
      Amendment may be executed in any number of counterparts, all of which shall
      constitute one and the same agreement.

     

    In
      Witness Whereof,
      the
      parties hereto have executed this Amendment to the Stock Purchase Agreement
      as
      of the date first above written.

    


    
      	 	Fusion
              Telecommunications International, Inc. 
	 	By: _______________________
	 	 	Name: _______________
	 	 	Title:  
              _______________
	 	 	 
	 	Karamco,
              Inc. 
	 	By: ________________________
	 	 	Name: ________________ 
	 	 	Title:  
              ________________
	 	 	 
	 	Efonica,
              FZ-LLC
	 	By: ________________________
	 	 	Name: ________________  
	 	 	Title:  
              ________________ 


    

     

     

    
      
        
        

      

      
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