EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT  ("Agreement") is made and entered into as of
the  __  day  of  January   2005  by  and  between   Fusion   Telecommunications
International,  Inc., a Delaware corporation (hereinafter called the "Company"),
and Roger Karam (hereinafter called the "Executive").

                                    RECITALS

         A. The Board of  Directors  of the  Company  (the  "Board")  desires to
assure the Company of the  Executive's  continued  employment  as CEO of Efonica
FZ-LLC ("Efonica"),  the Company's wholly-owned  subsidiary and President of the
Company's VoIP operations and to compensate him therefor.

         B. The Board has  determined  that this  Agreement  will  reinforce and
encourage the Executive's continued attention and dedication to the Company.

         C. The  Executive  is willing  to make his  services  available  to the
Company  on the  terms  and  conditions  hereinafter  set  forth  (the  term the
"Company" shall include Fusion Telecommunications  International,  Inc. "Fusion"
and Efonica, unless otherwise indicated).

                                    AGREEMENT

         NOW,  THEREFORE,  in consideration of the premises and mutual covenants
set forth herein, the parties agree as follows:

         1. EMPLOYMENT.

                  1.1  EMPLOYMENT  AND TERM. The Company hereby agrees to employ
the Executive and the Executive hereby agrees to serve the Company, on the terms
and  conditions set forth herein,  for the period  commencing on the date hereof
and expiring on January __, 2008 (the "Initial  Term") unless sooner  terminated
as hereinafter set forth; provided, however, that commencing on January __, 2008
and January __, 2009 the Initial Term of this Agreement shall  automatically  be
extended  for an  additional  one year unless at least ninety (90) days prior to
such dates,  the Company shall have  delivered to the Executive or the Executive
shall  have  delivered  to the  Company  written  notice  that  the  term of the
Executive's employment hereunder will not be extended.

                  1.2 DUTIES OF EXECUTIVE.  The Executive shall serve as the CEO
of  Efonica  and  President  of the  Company's  VoIP  Division.  Subject  to the
preceding  sentence,  during  the  term  of  Employment,   the  Executive  shall
diligently  perform  all  services as may be  reasonably  assigned to him by the
President of Fusion,  and shall  exercise  such power and  authority as may from
time to time be delegated to him by the President of Fusion. The Executive shall
be required to report solely to, and shall be subject solely to the  supervision
and  direction of the  President of Fusion and no other person or group shall be
given  authority  to supervise or direct  Executive  in the  performance  of his
duties.  The  Executive  shall  devote  substantially  all his working  time and
attention to the business and affairs of the Company (excluding any vacation and
sick leave to which the Executive is entitled), render such services to the best
of his ability,  and use his reasonable best efforts to promote the interests of
the Company.  It shall not be a violation of this Agreement for the Executive to
(A) serve on corporate,  civic or charitable  boards or committees,  (B) deliver
lectures, fulfill speaking engagements or teach at educational institutions, and
(C) manage personal investments, so long as such activities do not significantly
interfere  with  the  performance  of  the  Executive's  responsibilities  as an
employee of the Company in accordance with this Agreement.

<PAGE>

                  1.3 PLACE OF PERFORMANCE. In connection with his employment by
the Company,  the Executive  shall be based in the United Arab Emirates,  except
for travel reasonably necessary in connection with the Company's business.

         2. COMPENSATION.

                  2.1 BASE  SALARY.  Commencing  on the  effective  date of this
Agreement,  the Executive  shall receive a base salary at the annual rate of not
less than $225,000 (the "Base Salary") during the term of this  Agreement,  with
such Base Salary payable in installments  consistent  with the Company's  normal
payroll  schedule,  subject to applicable  withholding and other taxes. The Base
Salary  shall also be  reviewed,  every year,  for merit  increases  and may, by
action  and in the  discretion  of the  Compensation  and  Nominating  Committee
established  by the Board,  be increased  at any time or from time to time.  The
Base Salary  shall also be  increased at any time and from time to time as shall
be  substantially  consistent  with  increases  in base  salary  awarded  in the
ordinary  course of  business  to other key  executives  of the  Company and its
subsidiaries.  The Base Salary, if increased,  shall not thereafter be decreased
for any reason.

                  2.2 INCENTIVE COMPENSATION. The Executive shall be entitled to
receive such bonus  payments or incentive  compensation  as may be determined at
any time or from time to time by the Board (or any authorized committee thereof)
in its discretion.  Such potential bonus payments and/or incentive  compensation
shall be  considered at least  annually by the Board or  committee.  In no event
shall  Executive's  annual bonus be less than 25% of  Executive's  annual salary
then in effect.  The Compensation  Committee shall review  Executive's  bonus at
least  annually.  However,  In the  event  that the  Company  achieves  positive
Earnings  Before Income Tax,  Depreciation  and  Amortization  ("EBITDA")  for a
fiscal year,  Executive's minimum annual bonus shall not be less than 35% of his
annual salary then in effect. .

                  2.3 STOCK OPTION.

                            (a) The Executive  shall be entitled to  participate
in all stock  option  plans  (the  "Plans")  in effect  during  the term of this
Agreement.

                            (b) The Company hereby agrees to issue the Executive
an  additional  50,000  options  with an exercise  price equal to the price of a
share of common stock in the  Company's  IPO.  These  options will provide for a
three year vesting schedule.

                            (c)  Notwithstanding  the preceding  clause (b), the
Option shall become  immediately  exercisable as to 100% of the shares of Common
Stock not  otherwise  vested  upon any  termination  of  Executive's  employment
pursuant  to Section  4.5 hereof,  it is being  agreed  that the  Company  shall
cooperate in good faith to afford the Executive the right to exercise the Option
in full immediately  prior to any "Change in Control" (as hereinafter  defined).
In the event that  Executive is  terminated  pursuant to Section 4.5,  Executive
shall  have  the  greater  of (i)  five  years  after  termination,  or (ii) the
remaining term of the option, in order to exercise his options.

                            (d) The  Company  shall take all  action  reasonably
requested by the Executive to permit any "cashless"  exercise of the Option that
is permitted under the Plan.

                            (e) Upon proper exercise of an Option, the Executive
shall be deemed for all  purposes  the owner of the shares of Common  Stock that
are purchasable upon such exercise.

                            (f)  The   provisions  of  the  Plan  shall  not  be
adversely  modified as to the Executive  without the  Executive's  prior written
consent.


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<PAGE>

         3. EXPENSE REIMBURSEMENT AND OTHER BENEFITS.

                  3.1  EXPENSE  REIMBURSEMENT.  During  the term of  Executive's
employment hereunder,  the Company, upon the submission of reasonable supporting
documentation by the Executive, shall reimburse the Executive for all reasonable
expenses  actually  paid or  incurred  by the  Executive  in the  course  of and
pursuant  to the  business of the  Company,  including  expenses  for travel and
entertainment.

                  3.2  INCENTIVE,  SAVINGS  AND  RETIREMENT  PLANS.  During  the
Initial Term,  the Executive  shall be entitled to participate in all incentive,
savings and retirement  plans,  practices,  policies and programs  applicable to
other  key  executives  of the  Company  and  its  subsidiaries,  in  each  case
comparable to those currently in effect or as subsequently  amended. Such plans,
practices,  policies and programs, in the aggregate, shall provide the Executive
with  compensation,  benefits and reward  opportunities at least as favorable as
the most  favorable  of such  compensation,  benefits  and reward  opportunities
provided at any time hereafter with respect to other key executives.

                  3.3  WELFARE  BENEFIT  PLANS.  During the  Initial  Term,  the
Executive and/or the Executive's  family,  as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit plans,
practices,  policies and programs  provided by the Company and its  subsidiaries
(including,  without  limitation,  medical,  prescription,  dental,  disability,
salary  continuance,  employee  life,  group life,  accidental  death and travel
accident  insurance  plans  and  programs),  at least as  favorable  as the most
favorable of such plans, practices,  policies and programs in effect at any time
hereafter with respect to other key executives. Additionally, the company shall,
at all times, maintain D&O insurance.

                  3.4  WORKING  FACILITIES.   During  the  term  of  Executive's
employment hereunder,  the Company shall furnish the Executive with an office, a
secretary and such other  facilities  and services  suitable to his position and
adequate for the performance of his duties hereunder.

                  3.5 VACATION.  During the Initial Term, the Executive shall be
entitled to paid vacation in accordance with the most favorable plans, policies,
programs and practices of the Company and its  subsidiaries  as in effect at any
time  hereafter  with  respect to other key  executives  of the  Company and its
subsidiaries; PROVIDED, however, that in no event shall Executive be entitled to
fewer than five weeks paid vacation per year.

         4. TERMINATION.

                  4.1 TERMINATION FOR CAUSE.  Notwithstanding anything contained
to the contrary in this  Agreement,  this  Agreement  may be  terminated  by the
Company for Cause. As used in this Agreement, "Cause" shall only mean (i) an act
or acts of personal  dishonesty taken by the Executive and intended to result in
substantial  personal enrichment of the Executive at the expense of the Company,
(ii) subject to the following sentences,  repeated violation by the Executive of
the Executive's material obligations under this Agreement which are demonstrably
willful and deliberate on the  Executive's  part and which are not remedied in a
reasonable  period of time after receipt of written notice from the Company,  or
(iii) the  conviction  of the  Executive for any criminal act which is a felony.
Upon any  determination  by the Company's  Board of Directors  that Cause exists
under clauses (i) and (ii) of the preceding sentence,  the Company shall cause a
special meeting of the Board to be called and held at a time mutually convenient
to the Board and  Executive,  but in no event later than ten (10)  business days
after  Executive's  receipt of the notice  contemplated by clauses (i) and (ii).
Executive  shall have the right to appear  before  such  special  meeting of the
Board with legal  counsel of his choosing to refute any  determination  of Cause
specified in such notice,  and any  termination  of  Executive's  employment  by
reason of such Cause  determination  shall not be effective  until  Executive is
afforded such  opportunity  to appear.  Any  termination  for Cause  pursuant to
clause (i) or (iii) of the first  sentence of this  Section 4.1 shall be made in
writing  to  Executive,  which  notice  shall set  forth in  detail  all acts or
omissions  upon  which the  Company is relying  for such  termination.  Upon any
termination  pursuant to this Section 4.1, the Executive shall be entitled to be


                                       3
<PAGE>


paid his Base Salary to the date of  termination  and the Company  shall have no
further  liability  hereunder  (other  than  for  reimbursement  for  reasonable
business expenses incurred prior to the date of termination).

                  4.2  DISABILITY.  Notwithstanding  anything  contained in this
Agreement to the  contrary,  the Company,  by written  notice to the  Executive,
shall  at all  times  have  the  right  to  terminate  this  Agreement,  and the
Executive's  employment  hereunder,  if the  Executive  shall,  as the result of
mental or physical incapacity, illness or disability, fail to perform his duties
and  responsibilities  provided for herein for a period of more than one hundred
twenty (120)  consecutive  days in any  12-month  period.  Upon any  termination
pursuant to this  Section 4.2,  the  Executive  shall be entitled to be paid his
Base Salary for the remaining  term of the Agreement but in no event longer than
two years. In the event that the Agreement has less than six months remaining at
such time,  Executive  shall be entitled to a payment equal to six months of his
Base Salary.  In addition,  Executive shall be entitled to reimbursement for all
business expenses incurred prior to his disability.

                  4.3 DEATH.  In the event of the death of the Executive  during
the term of his employment hereunder, the Company shall pay to the estate of the
deceased  Executive an amount equal to the Base Salary for the remaining term of
this  Agreement  but in no event  longer  than two years.  In the event that the
Agreement has less than six months  remaining at such time,  Executive  shall be
entitled  to a payment  equal to six  months of his Base  Salary.  In  addition,
Executive shall be entitled to reimbursement  for all business expenses incurred
prior to his death.

 4.4 TERMINATION  WITHOUT CAUSE. At any time the Company shall have the right to
terminate  Executive's  employment  hereunder  by written  notice to  Executive;
provided,  however,  that the Company shall (i) pay to Executive any unpaid Base
Salary  accrued  through the  effective  date of  termination  specified in such
notice,  and any pro-rata bonus that would be payable had Executive  completed a
full year of employment,  and (ii) Pay to the executive in cash,  within 30 days
an amount  equals to 150% of the base salary in  addition to his highest  annual
bonus for three  years.  The  Company  shall be  deemed to have  terminated  the
Executive's  employment  pursuant  to this  Section  4.4 if such  employment  is
terminated  (i)  by  the  Company  without  Cause,  or  (ii)  by  the  Executive
voluntarily  for "Good  Reason." For purposes of this  Agreement,  "Good Reason"
means

                            (a) the  assignment  to the  Executive of any duties
inconsistent in any respect with the  Executive's  position  (including  status,
offices,   titles   and   reporting   requirements),    authority,   duties   or
responsibilities as contemplated by Section 1.2 of this Agreement,  or any other
action by the Company which results in a diminution in such position, authority,
duties  or   responsibilities,   excluding   for  this   purpose  an   isolated,
insubstantial  and  inadvertent  action  not  taken in bad  faith  and  which is
remedied by the Company  promptly  after receipt of notice  thereof given by the
Executive;

                            (b) any failure by the Company to comply with any of
the provisions of Section 2, Section 3, or Section 16 of this  Agreement,  other
than an isolated,  insubstantial  and  inadvertent  failure not occurring in bad
faith and which is  remedied  by the Company  promptly  after  receipt of notice
thereof given by the Executive;

                            (c) any change in the  designation of the particular
executive that the Executive is obligated to report to under Section 1.2 hereof;

                            (d) any purported  termination by the Company of the
Executive's employment otherwise than as expressly permitted by this Agreement;

                            (e) any  termination by the Executive for any reason
during the  three-month  period  following the effective  date of any "Change in
Control".



                                       4
<PAGE>

         For purposes of this Section 4.4, any good faith determination of "Good
Reason" made by the Executive shall be conclusive.

         5. CHANGE IN CONTROL.  For  purposes  of this  Agreement,  a "Change in
Control" shall mean:

                  (a) The  acquisition  (other than by or from the Company),  at
any time after the date  hereof,  by any person,  entity or "group",  within the
meaning of Section  13(d)(3) or 14(d)(2) of the Securities  Exchange Act of 1934
(the "Exchange Act"), of beneficial  ownership (within the meaning of Rule 13d-3
promulgated  under  the  Exchange  Act)  of 30%  or  more  of  either  the  then
outstanding shares of common stock or the combined voting power of the Company's
then outstanding voting securities entitled to vote generally in the election of
directors; or

                  (b) All or any of the fourteen (14) individuals who, as of the
date hereof,  constitute the Board (as of the date hereof the "Incumbent Board")
cease for any reason to  constitute  at least a majority of the Board,  provided
that  any  person  becoming  a  director  subsequent  to the date  hereof  whose
election, or nomination for election by the Company's shareholders, was approved
by a vote of at least a majority of the directors then  comprising the Incumbent
Board  (other than an election or  nomination  of an  individual  whose  initial
assumption  of office is in  connection  with an actual or  threatened  election
contest relating to the election of the directors of the Company,  as such terms
are used in Rule 14a-11 of Regulation  14A  promulgated  under the Exchange Act)
shall be, for purposes of this Agreement,  considered as though such person were
a member of the Incumbent Board; or

                  (c)  Approval  by the  shareholders  of the  Company  of (A) a
reorganization,  merger or consolidation  with respect to which persons who were
the shareholders of the Company immediately prior to such reorganization, merger
or  consolidation  do not,  immediately  thereafter,  own  more  than 75% of the
combined voting power entitled to vote generally in the election of directors of
the  reorganized,  merged or  consolidated  company's  then  outstanding  voting
securities,  (B) a liquidation or dissolution of the Company, or (C) the sale of
all or  substantially  all of the assets of the  Company,  unless  the  approved
reorganization,  merger,  consolidation,  liquidation,  dissolution  or  sale is
subsequently abandoned.

                  (d) The approval by the Board of the sale, distribution and/or
other  transfer or action (and/or  series of sales,  distributions  and/or other
transfers or actions  from time to time or over a period of time),  that results
in the Company's ownership of less than 50% of the Company's current assets.

         6. RESTRICTIVE COVENANTS.

                  6.1  NONDISCLOSURE.  During his employment and for twelve (12)
months  thereafter,  Executive  shall  not  divulge,  communicate,  use  to  the
detriment of the Company or for the benefit of any other  person or persons,  or
misuse  in any  way,  any  Confidential  Information  (as  hereinafter  defined)
pertaining to the business of the Company. Any Confidential  Information or data
now or hereafter  acquired by the Executive  with respect to the business of the
Company shall be deemed a valuable, special and unique asset of the Company that
is received by the  Executive in  confidence  and as a fiduciary,  and Executive
shall remain a fiduciary to the Company with respect to all of such information.
For purposes of this Agreement,  "Confidential  Information"  means all material
information about the Company's  business disclosed to the Executive or known by
the  Executive  as a  consequence  of or through his  employment  by the Company
(including  information  conceived,  originated,  discovered or developed by the
Executive) after the date hereof, and not generally known.

                  6.2  NONSOLICITATION  OF  EMPLOYEES.  While  employed  by  the
Company and for a period of twelve (12) months  thereafter,  Executive shall not
directly or indirectly,  for himself or for any other person, firm, corporation,
partnership,  association  or other entity,  attempt to employ or enter into any
contractual  arrangement  with any  employee or former  employee of the Company,
unless such employee or former employee has not been employed by the Company for
a period in excess of six months.


                                       5
<PAGE>

                  6.3 COVENANT NOT TO COMPETE.  Executive will not, at any time,
during  the  term of this  Agreement,  and for one (1) year  thereafter,  either
directly  or  indirectly,  engage in, with or for any  enterprise,  institution,
whether or not for profit,  business, or company,  competitive with the business
(as identified herein) of Employer as such business may be conducted on the date
thereof, as a creditor,  guarantor, or financial backer, stockholder,  director,
officer,  consultant,  advisor, employee, member, or otherwise of or through any
corporation,  partnership,  association,  sole  proprietorship  or other entity;
provided,  that an  investment  by  Employee,  his  spouse  or his  children  is
permitted  if such  investment  is not more than four  percent (4%) of the total
debt or equity capital of any such competitive  enterprise or business.  As used
in this  Agreement,  the  business  of  Employer  shall be deemed to include any
business  which  directly   competes  with  the  Company  in  the  provision  of
traditional voice services,  VoIP services,  private network services,  Internet
access services and Internet based video conferencing services. The covenant not
to  compete  for one year  after  termination  shall  only be  effective  if the
Executive has received all  compensation due to him pursuant to this Agreement .
The Company shall have the right in its sole discretion to waive the non-compete

                  6.4  INJUNCTION.  It is recognized and hereby  acknowledged by
the  parties  hereto  that a breach  by the  Executive  of any of the  covenants
contained in Section 6.1, 6.2 or 6.3 of this  Agreement  will cause  irreparable
harm and damage to the Company,  the  monetary  amount of which may be virtually
impossible  to  ascertain.  As a result,  the  Executive  recognizes  and hereby
acknowledges  that the Company shall be entitled to an injunction from any court
of competent  jurisdiction enjoining and restraining any violation of any or all
of the  covenants  contained  in this  Section 6 by the  Executive or any of his
affiliates,  associates,  partners or agents, either directly or indirectly, and
that such right to injunction  shall be  cumulative  and in addition to whatever
other remedies the Company may possess.

         7. GOVERNING LAW. This Agreement  shall be governed by and construed in
accordance with the laws of the State of New York.

         8.  NOTICES:  Any notice  required or  permitted to be given under this
Agreement  shall be in  writing  and shall be deemed  to have  been  given  when
delivered by hand or when  deposited in the United States mail, by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:

           If to the Company:    Fusion Telecommunications Intl, Inc.
                                 420 Lexington Avenue - Suite 518
                                 New York, New York 10170
                                 Attention:  CEO

           WITH A COPY TO:       Gersten, Savage, Kaplowitz, Wolf & Marcus, LLP
                                 600 Lexington Avenue
                                 New York, New York 10022
                                 Attention:  Jay M. Kaplowitz

           If to the Executive:  Roger Karam
                                 [                          ]



or to such other  addresses  as either  party  hereto may from time to time give
notice of to the other in the aforesaid manner.



                                       6
<PAGE>

         9. SUCCESSORS.

                  (a) This  Agreement is personal to the  Executive  and without
the  prior  written  consent  of the  Company  shall  not be  assignable  by the
Executive  otherwise than by will or the laws of descent and distribution.  This
Agreement  shall inure to the benefit of and be enforceable  by the  Executive's
legal representatives.

                  (b)  This  Agreement  shall  inure  to the  benefit  of and be
binding upon the Company and its successors and assigns.

                  (c) The Company will require any successor  (whether direct or
indirect,   by  purchase,   merger,   consolidation  or  otherwise)  to  all  or
substantially  all of the  business  and/or  assets of the Company to  expressly
assume and agree to perform  this  Agreement  in the same manner and to the same
extent  that the Company  would be required to perform it if no such  succession
had taken place. As used in this Agreement,  "Company" shall mean the Company as
hereinbefore  defined and any  successor  to its  business  and/or  assets which
assumes and agrees to perform this Agreement by operation of law or otherwise.

         10.  SEVERABILITY.  The  invalidity  of any one or  more of the  words,
phrases,  sentences,  clauses or sections  contained in this Agreement shall not
affect the  enforceability  of the remaining  portions of this  Agreement or any
part thereof,  all of which are inserted  conditionally  on their being valid in
law,  and, in the event that any one or more of the words,  phrases,  sentences,
clauses or sections contained in this Agreement shall be declared invalid,  this
Agreement  shall be  construed  as if such  invalid  word or  words,  phrase  or
phrases,  sentence or sentences,  clause or clauses,  or section or sections had
not been  inserted.  If such  invalidity  is caused by length of time or size of
area, or both, the otherwise  invalid provision will be considered to be reduced
to a period or area which would cure such invalidity.

         11. WAIVERS. The waiver by either party hereto of a breach or violation
of any term or provision of this Agreement shall not operate nor be construed as
a waiver of any subsequent breach or violation.

         12. DAMAGES. Nothing contained herein shall be construed to prevent the
Company or the  Executive  from seeking and  recovering  from the other  damages
sustained by either or both of them as a result of its or his breach of any term
or provision of this Agreement.

         13. NO THIRD PARTY  BENEFICIARY.  Nothing  expressed or implied in this
Agreement is intended, or shall be construed,  to confer upon or give any person
(other  than the  parties  hereto  and,  in the case of  Executive,  his  heirs,
personal  representative(s)  and/or legal representative) any rights or remedies
under or by reason of this Agreement.

         14. FULL  SETTLEMENT.  The  Company's  obligation  to make the payments
provided  for in  this  Agreement  and  otherwise  to  perform  its  obligations
hereunder  shall  not be  affected  by any  set-off,  counterclaim,  recoupment,
defense or other  claim,  right or action which the Company may have against the
Executive or others.  In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts  payable
to the  Executive  under any of the  provisions of this  Agreement.  The Company
agrees to pay, to the full extent  permitted by law, all legal fees and expenses
which the Executive may reasonably incur as a result of any contest  (regardless
of  the  outcome   thereof)  by  the  Company  or  others  of  the  validity  or
enforceability  of, or liability  under,  any provision of this Agreement or any
guarantee of  performance  thereof  (including as a result of any contest by the
Executive  about the  amount  of any  payment  pursuant  to  Section  15 of this
Agreement),  plus in each case interest at the applicable  Federal rate provided
for in Section 7872(f)(2) of the Code.



                                       7
<PAGE>

         15. CERTAIN REDUCTION OF PAYMENTS BY THE COMPANY.

                            (d)  Anything  in  this  Agreement  to the  contrary
notwithstanding,  in the  event it  shall be  determined  that  any  payment  or
distribution by the Company to or for the benefit of the Executive, whether paid
or  payable  or  distributed  or  distributable  pursuant  to the  terms of this
Agreement or otherwise (a "Payment"),  would be nondeductible by the Company for
Federal  income  tax  purposes  because of  Section  280G of the Code,  then the
aggregate  present  value of  amounts  payable  or  distributable  to or for the
benefit  of  the  Executive   pursuant  to  this  Agreement  (such  payments  or
distributions  pursuant  to  this  Agreement  are  hereinafter  referred  to  as
"Agreement  Payments")  shall be reduced to the  Reduced  Amount.  The  "Reduced
Amount"  shall be an amount  expressed  in present  value  which  maximizes  the
aggregate present value of Agreement  Payments without causing any Payment to be
nondeductible  by the Company  because of Section 280G of the Code.  Anything to
the contrary notwithstanding, if the Reduced Amount is zero and it is determined
further that any Payment which is not an Agreement Payment would nevertheless be
nondeductible  by the Company for Federal income tax purposes because of Section
280G of the Code,  then the aggregate  present  value of Payments  which are not
Agreement  Payments  shall  also be  reduced  (but not below  zero) to an amount
expressed  in present  value which  maximizes  the  aggregate  present  value of
Payments  without causing any Payment to be nondeductible by the Company because
of Section  280G of the Code.  For purposes of this  Section 16,  present  value
shall be  determined  in accordance  with Section  280G(d)(4)  of the Code.  Any
amount  which  is not  paid in the  taxable  year  in  which  it was  originally
scheduled to be paid as a result of the  postponement  thereof  pursuant  hereto
shall be payable in the next succeeding  taxable year in which such payment will
not result in the disallowance of a deduction  pursuant to either Section 162(m)
or 280G of the Code;  provided,  however,  that all postponed  payments shall be
placed in a trust or similar  vehicle for the benefit of the Executive in such a
way that the amounts so transferred are not taxable to such person or deductible
by the Company  until payment from such vehicle to the Executive is made. In the
event a  payment  has  been  made to the  Executive,  but then  disallowed  as a
deduction by the Internal  Revenue Service and return of the payment is required
into the trust,  said  payment to the  Executive  shall be treated as a loan and
said  payment  to the trust  shall be  treated as  repayment  of said loan.  The
Company shall not pledge,  hypothecate or otherwise encumber any amounts held in
the trust or other similar vehicle for the benefit of the Executive hereunder.

                            (e) All  determinations  required  to be made  under
this  Section 15 shall be made by  Rothstein,  Kass & Company,  P.C.  or, at the
Executive's  option,  any other  nationally  or  regionally  recognized  firm of
independent  public  accountants  selected by the  Executive and approved by the
Company,  which  approval  shall not be  unreasonably  withheld or delayed  (the
"Accounting  Firm"),  which shall provide (i) detailed  supporting  calculations
both to the Company and the  Executive  within  twenty (20) business days of the
termination  of  Executive's  employment or such earlier time as is requested by
the  Company,  and (ii) an  opinion  to the  Executive  that he has  substantial
authority  not to report any excise tax on his  Federal  income tax return  with
respect to any Payments.  Any such determination by the Accounting Firm shall be
binding upon the Company and the Executive.  The Executive shall determine which
and how much of the Payments shall be eliminated or reduced  consistent with the
requirements  of this Section 15,  provided that, if the Executive does not make
such  determination  within ten business days of the receipt of the calculations
made by the  Accounting  Firm, the Company shall elect which and how much of the
Payments shall be eliminated or reduced consistent with the requirements of this
Section 15 and shall notify the Executive promptly of such election. Within five
business days  thereafter,  the Company shall pay to or distribute to or for the
benefit of the  Executive  such amounts as are then due to the  Executive  under
this  Agreement.  All fees and  expenses  of the  Accounting  Firm  incurred  in
connection  with the  determinations  contemplated  by this  Section 15 shall be
borne by the Company.

                            (f)  As  a  result   of  the   uncertainty   in  the
application of Section 280G of the Code at the time of the initial determination
by the Accounting  Firm  hereunder,  it is possible that Payments will have been
made by the  Company  which  should not have been made  ("Overpayment")  or that
additional Payments which will not have been made by the Company could have been
made  ("Underpayment"),  in each case, consistent with the calculations required
to be made  hereunder.  In the event that


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<PAGE>

the  Accounting  Firm,  based upon the assertion of a deficiency by the Internal
Revenue  Service  against the Executive which the Accounting Firm believes has a
high  probability of success,  determines that an Overpayment has been made, any
such Overpayment paid or distributed by the Company to or for the benefit of the
Executive shall be treated for all purposes as a loan ab initio to the Executive
which the  Executive  shall repay to the Company  together  with interest at the
applicable  federal  rate  provided  for in  Section  7872(f)(2)  of  the  Code;
provided,  however,  that no such loan  shall be deemed to have been made and no
amount shall be payable by the Employee to the Company if and to the extent such
deemed  loan and  payment  would  not  either  reduce  the  amount  on which the
Executive  is subject  to tax under  Section 1 and  Section  4999 of the Code or
generate a refund of such taxes.  In the event that the Accounting  Firm,  based
upon controlling  precedent or other substantial  authority,  determines that an
Underpayment has occurred,  any such Underpayment  shall be promptly paid by the
Company to or for the benefit of the  Executive  together  with  interest at the
applicable federal rate provided for in Section 7872(f)(2) of the Code.







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<PAGE>


         IN WITNESS WHEREOF,  the undersigned have executed this Agreement as of
the date first above written.

                                   FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.



                                   By:
                                       -----------------------------------------
                                       Matthew Rosen
                                       President



                                   EXECUTIVE:



                                       -----------------------------------------
                                       Roger Karam








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