Document:

Exhibit 4.15

 

RIGHT OF FIRST OFFER AGREEMENT

 

This RIGHT OF FIRST OFFER AGREEMENT (this “Agreement”) is made and entered into as of 5 March 2018, by and between ATLANTICA YIELD PLC (“AY”), a public limited company incorporated and registered in England and Wales, and ALGONQUIN POWER & UTILITIES CORP. (“AQN”), a corporation organized under the federal laws of Canada.  Each of AY and AQN are referred to herein as a “Party,” and together as the “Parties.”

 

RECITALS

 

	A.	
AQN is a North American based utility infrastructure company that acquires, develops and constructs contracted clean energy and other infrastructure projects with stable, long-term cash flows; and

 

	B.	
With respect to certain of such assets as AQN or its Subsidiaries elect to construct or cause to be constructed, AQN desires to grant to AY an exclusive right of first offer to acquire its ownership and similar interests in such assets, on the terms and conditions set forth in this Agreement.

 

NOW THEREFORE in consideration of the premises and the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Parties, the Parties agree as follows:

 

ARTICLE 1

INTERPRETATION

 

1.1          Definitions. For purposes of this Agreement, the following terms used herein will have the following meaning when used with initial capitalization, whether singular or plural:

 

“AAGES” means Abengoa-Algonquin Global Energy Solutions B.V., a private company with limited liability incorporated under the laws of the Netherlands, or any permitted successor and assign thereof under the AAGES ROFO Agreement.

 

“AAGES Company” means AAGES and each of its Subsidiaries (which, for the avoidance of doubt, do not include any AY Company), other than a Subsidiary that is a publicly traded company.

 

“AAGES ROFO Agreement” means that certain Right of First Offer Agreement between AY and AAGES, dated as of the date hereof and effective as of the Effective Date, as such agreement may be amended, supplemented, amended and restated, or replaced from time to time

 

“ABG” means Abengoa, S.A.

 

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls or is controlled by such Person, or is under common control of a third Person; provided, however, that notwithstanding the foregoing, (a) no AY Company shall be deemed to be an Affiliate of any AAGES Company or of any AQN Company, (b) no AAGES Company shall be deemed to be an Affiliate of any AY Company or of any AQN Company, and (c) no AQN Company shall be deemed to be an Affiliate of any AY Company or of any AAGES Company.

 

“Agreement” has the meaning set forth in the preamble.

 

“Applicable Law” means all statutes, laws, common law, rules, regulations, ordinances, codes or other legal requirements of any Governmental Authority and quasi-governmental agencies or entities, and any judgment, injunction, order, directive, decree or other judicial or regulatory requirement of any court or Governmental Authority affecting or relating to the Person or property in question.

 

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“AQN” has the meaning set forth in the preamble.

 

“AQN Company” means AQN and each of its Subsidiaries (which, for the avoidance of doubt, do not include any AY Company or AAGES Company), other than a Subsidiary that is a publicly traded company.

 

“AY” has the meaning set forth in the preamble.

 

“AY Company” means AY and each of its Subsidiaries.

 

“AY Shareholders Agreement” means the Shareholders Agreement between AY, AQN, and AAGES, dated as of the date hereof and effective as of the Effective Date, as such agreement may be amended, supplemented, amended and restated, or replaced from time to time.

“Binding Offer” has the meaning set forth in Clause 2.6(c).

 

“Business Day” means any day other than any Saturday, any Sunday or any legal holiday during which banks in Toronto, Canada or London, United Kingdom are obligated or permitted to close for business.

 

“Commercial Operation Date” means, with respect to any Facility, the date on which such Facility (i) has achieved provisional completion (or words to similar effect) under its EPC Contract, (ii) has commenced regular operation of its principal intended function on a commercial, revenue-generating basis and (iii) has received its first commercial revenue (and to “test revenue”) payment from its off-taker or other primary contracted customer.

 

“Confidential Information” means information relating to a Party or any Affiliate thereof of a confidential, competitively sensitive, or proprietary nature that is obtained in connection with this Agreement or any transaction contemplated hereby, or that is otherwise expressly designated in writing by such party as confidential; provided, however, that Confidential Information shall not include: (a) any information that is contained in public records, public filings or is otherwise publicly disclosed or available other than as the result of a breach of this Agreement; or (b) any information disclosed to the applicable Party on a non-confidential basis from a source independent of the other Party, its Affiliates, and their respective representatives, who such Party reasonably believes obtained and disclosed such information without breach of any obligation of confidentiality.

 

“Construction Asset” means any Facility in which any AQN Company holds a direct or indirect Financial Interest, that at such time has not become an Operating Facility, and for which either (a) funds have become available for the construction of such Facility under a construction financing agreement with a Financing Party, or (b) a full notice to proceed has been issued under the construction contract that provides for the construction and commissioning of such Facility, which notice unconditionally authorizes the counterparty to such construction contract to immediately commence construction of such Facility.

 

“Control” or “control” (including the phrases “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Definitive Agreement” has the meaning set forth in Clause 2.7(a).

 

“Effective Date” means the “Effective Date” under the AY Shareholders Agreement.

 

“EPC Contract” means an engineering, procurement and construction contract, or other principal construction contract the scope of which includes the commissioning of the applicable Facility.

 

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“Equity Interests” means, with respect to any Person, the equity or other ownership interests therein, however designated, including financial rights and any rights, if any, to participate in the management of such Person.

 

“Equity Purchase Price” for any ROFO Interest means the cash purchase price paid in respect of all Financial Interests comprising such ROFO Interest, calculated as the total cash purchase price for such ROFO Interest, less the amount of such purchase price (if any) that is required to be used by the seller or any of its Affiliates upon such sale to repay project debt associated with such ROFO Interest.

 

“Exempt Transfer” has the meaning set forth in Clause 3.2(b).

 

“Existing Right” has the meaning set forth in Clause 4.3.

 

“Facility” means any infrastructure facility or proposed infrastructure facility (including without limitation those the principal purpose of which is the generation, processing, transportation, or transmission of electric energy, natural gas, water, or wastewater), located or to be located in any part of the world other than (unless otherwise specifically agreed by AQN and AY) Canada or the United States (including territories thereof), which was developed under an expected long-term revenue agreement or concession agreement pursuant to which the developer is responsible for, at its own risk and during a limited period of time, the engineering, procurement and construction works as well as for the operation and maintenance works, obtaining in exchange a tariff or any other type of remuneration from the client.

 

“Fee” means the amount equivalent to one half of one percent (0.5%) of the Equity Purchase Price paid for the applicable ROFO Interest.

 

“Financial Interests” means (a) with respect to any entity, (i) any Equity Interests in such entity, (ii) any right of subscription for or conversion into any Equity Interests of such entity, including under or pursuant to any loan or any other instrument evidencing indebtedness issued by such entity, and (iii) relevant rights and obligations under or pursuant to any other loan or instrument evidencing indebtedness issued by such entity, and (b) with respect to any other assets, means fee title, capital leasehold, or other comparable ownership interests in such asset.

 

“Financing Party” means any Third Party (and any agent or trustee thereof) providing senior or subordinated debt financing or refinancing or equity financing with respect to any Facility, ROFO Asset, ROFO Entity or AQN Company, other than with the primary intent to acquire an Equity Interest therein through foreclosure or other exercise of remedies in contravention of the rights of AY hereunder.

 

“Governmental Approval” means any authorization, consent, approval, license, permit, franchise, tariff, certificate of authority, registration, rate, certification, agreement, directive, waiver, exemption, variance, other similar action of or by any Governmental Authority.

 

“Governmental Authority” means any national, regional, or local government or political subdivision thereof, including, without limitation, any agency or entity exercising executive, legislative, judicial, regulatory or administrative governmental powers or functions, in each case to the extent the same has jurisdiction over the Person or property in question.

 

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

 

“Negotiation Period” has the meaning set forth in Clause 2.4(a).

 

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“Operating Asset” means any Construction Asset that has achieved its Commercial Operation Date.

 

“Party” or “Parties” has the meaning set forth in the preamble.

 

“Permitted Transfer” has the meaning set forth in Clause 3.2(a).

 

“Person” means any natural person, firm, trust, partnership, limited partnership, company or corporation (with or without share capital), joint venture, sole proprietorship, governmental authority or other legal entity of any kind.

 

“Proposed Definitive Agreement” has the meaning set forth in Clause 2.5(p).

 

“Restricted Transfer Period” has the meaning set forth in Clause 3.1(b).

 

“ROFO Asset” means, subject to Clause 3.3 and Clause 4.2(c) hereof, any Construction Asset or Operating Asset in which any AQN Company directly or indirectly holds a Financial Interest (other than through Financial Interests in any AAGES Company or in any publicly traded entity) that (a) was developed or sponsored prior to commercial operation by an AQN Company, or (b) in which an AQN Company has invested by any instrument prior to the Commercial Operation Date thereof, or (c) that AQN otherwise expressly agrees in writing will constitute a ROFO Asset hereunder.

 

“ROFO Entity” means any entity, in which any AQN Company directly or indirectly holds a Financial Interest, that directly or indirectly holds any Financial Interests in any ROFO Asset or in any other ROFO Entity, subject to Clause 3.3 hereof.

 

“ROFO Interest” means any Financial Interest held by AQN or any direct or indirect wholly owned Subsidiary of AQN in any ROFO Asset or in any ROFO Entity, subject to Clause 3.3 and Clause 4.2(c) hereof.

 

“Subsidiary” means, with respect to any Person, an Affiliate thereof that is controlled by such Person.

 

“Target Asset”, “Target Entity”, and “Target Interest” have the respective meanings set forth in Clause 2.2(a).

 

“Third Party” means any Person other than an AY Company, an AAGES Company, an AQN Company, or a publicly traded entity in which any AAGES Company or an AQN Company directly or indirectly holds an interest.

 

“Transaction Notice” has the meaning set forth in Clause 2.2(a).

 

“Transaction Notice Request” has the meaning set forth in Clause 2.2(b).

 

“Transfer” means any issuance, sale, assignment, or transfer by an AQN Company of any ROFO Interest.

 

“Transfer Information” has the meaning set forth in Clause 2.5.

 

1.2          Headings and Table of Contents.  The inclusion of headings and a table of contents in this Agreement are for convenience of reference only and will not affect the construction or interpretation hereof.

 

1.3          Interpretation.  In this Agreement, unless the context otherwise requires:

 

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(a)           words importing the singular shall include the plural and vice versa, words importing gender shall include all genders or the neuter, and words importing the neuter shall include all genders;

 

(b)           the words “include”, “includes”, “including”, or any variations thereof, when following any general term or statement, are not to be construed as limiting the general term or statement to the specific items or matters set forth or to similar items or matters, but rather as referring to all other items or matters that could reasonably fall within the broadest possible scope of the general term or statement;

 

(c)           references to any Person include such Person’s successors and permitted assigns;

 

(d)           any reference to a statute, regulation, policy, rule or instrument shall include, and shall be deemed to be a reference also to, all amendments made to such statute, regulation, policy, rule or instrument and to any statute, regulation, policy, rule or instrument that may be passed which has the effect of supplementing or superseding the statute, regulation, policy, rule or instrument so referred to;

 

(e)           any reference to this Agreement or any other agreement, document or instrument shall be construed as a reference to this Agreement or, as the case may be, such other agreement, document or instrument as the same may have been, or may from time to time be, amended, varied, replaced, amended and restated, supplemented or otherwise modified;

 

(f)            in the event that any day on which any amount is to be determined or any action is required to be taken hereunder is not a Business Day, then such amount shall be determined or such action shall be required to be taken at or before the requisite time on the next succeeding day that is a Business Day;

 

(g)           the words “herein”, “hereof”, “hereby”, and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety, not to any particular article or section hereof and not to any particular provision hereof, except where the context otherwise requires; and

 

(h)           all references herein to Articles, Clauses, Exhibits and Schedules shall be construed to refer to Articles and Clauses of, and Exhibits and Schedules to, this Agreement, unless otherwise indicated.

 

1.4          Effectiveness of Agreement.  This Agreement shall be valid and binding on the Parties upon execution and delivery of this Agreement by each Party; provided, however, that the provisions of this Agreement shall be effective only upon the Effective Date.  In the event that the Effective Date has not occurred on or prior to 16 March 2018 (or such later date as may be agreed in writing by the Parties), this Agreement shall be terminated automatically without action by any Party and shall be void and of no effect, without liability to any Party.

 

ARTICLE 2

RIGHT OF FIRST OFFER

 

2.1          Exclusive Right of First Offer.

 

(a)           Pursuant to this Agreement, AQN grants to AY an exclusive right of first offer for any ROFO Interest in accordance with the terms and conditions set forth in this Agreement, subject only to Existing Rights.  Other than Existing Rights, AQN represents and warrants that it has not and will not grant to any other Person any other right of first offer, right of first refusal or other similar agreements in relation to any ROFO Interests, unless (a) such rights will not be exercisable with respect to any Transfer (or proposed Transfer) of such ROFO Interests to AY pursuant to this Agreement, or (b) AY has consented thereto in writing.

 

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(b)           AQN hereby confirms that AQN is supportive of AY in its growth aspirations in Canada and the United States and that it intends to periodically discuss with AY the possibility of offering, for sale to AY, interests in certain assets owned by AQN Companies in Canada or the United States; provided that, for the avoidance of doubt, (i) such assets do not constitute ROFO Assets except to such extent as may be specifically agreed by AQN and AY in writing, and (ii) the decision as to whether or not to proceed with any such transaction shall be in the sole discretion of AQN.

 

2.2          Consideration. The rights granted to AY in this Agreement are granted in exchange for a Fee paid by any AY Company in exchange for any ROFO Interest, which shall be paid by or on behalf of such AY Company, simultaneously with the closing of the Transfer of such ROFO Interest to an AY Company, to a bank account designated by the AQN Company that is the seller of such ROFO Interest.

 

2.3          Restrictions on Negotiations; Status Meetings.

 

(a)           AQN shall procure that no AQN Company nor any representative or agent thereof (including any AAGES Company) shall solicit offers from, or negotiate or enter into any agreement with, any Person for the Transfer of a ROFO Asset, ROFO Entity or ROFO Interest (other than a Permitted Transfer or Exempt Transfer) unless AQN first delivers a Transaction Notice to AY and complies with the terms and provisions of this Article 2 with respect to such ROFO Interest.

 

(b)           At the reasonable request of any Party, representatives of the Parties shall meet, in person or by telephone or video conference (in the discretion of each participant), to discuss material developments related to the construction or operating status of the then-existing ROFO Assets, including completion of construction financing, commencement of construction, then-existing target Commercial Operation Dates, and any Commercial Operation Dates that have been achieved.  Meetings pursuant to this Clause 2.3(b) will be held at a time and in such a manner as is mutually convenient for all participants, within a reasonable time following request for such a meeting provided that, absent special circumstances, it is the expectation that such meetings will not be held more frequently than quarterly.  Any request for such a meeting may be made informally.  All discussions among and information exchanged by the Parties during any such meeting shall be subject to the provisions of Article 6 hereof.

 

2.4          Transaction Notice.

 

(a)           Prior to any AQN Company soliciting offers from, or negotiating or entering into any agreement with, any Person for the Transfer of any ROFO Interest or related ROFO Asset or ROFO Entity (other than a Permitted Transfer or Exempt Transfer), AQN shall deliver to AY written notice of its intent to commence the Negotiation Period with respect to such ROFO Interest, together with copies of (or details for AY to obtain immediate electronic access to) the Transfer Information (as defined herein) related to such ROFO Interest and the related ROFO Asset and ROFO Entities (collectively, a “Transaction Notice”).

 

(b)           From the delivery of any Transaction Notice with respect to a ROFO Interest and continuing throughout the pendency of the Negotiation Period and the Restricted Transfer Period with respect to such ROFO Interest, such ROFO Interest shall be deemed a “Target Interest,” each applicable ROFO Entity shall be deemed a “Target Entity,” the applicable ROFO Asset shall be deemed a “Target Asset,” and all of the foregoing shall collectively be deemed the “Target.”

 

(c)           For the avoidance of doubt, a Target Interest shall include all direct and indirect Financial Interests of AQN in the applicable Target Asset, but the Target Entities shall include only those entities related to the Target Asset (including any financing thereof), such that upon a Transfer of such Target Interest to an AY Company, such AY Company shall not thereby directly or indirectly acquire any assets or companies, or directly or indirectly acquire or assume any liabilities, that are unrelated to such Target Asset.

 

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(d)           In the event that AQN has not previously delivered to AY a Transaction Notice with respect to its direct or indirect interest in a particular ROFO Asset, AY may deliver written notice to AQN (a “Transaction Notice Request”) at any time within twelve (12) months following the date on which such ROFO Asset becomes an Operating Asset, requesting that AQN commence good faith negotiations with respect to a Transfer of such ROFO Interest to AY.  Within sixty (60) days following delivery of a Transaction Notice Request, AQN shall deliver to AY either:

 

(i)            written notice confirming that AQN has no present intention to Transfer such ROFO Interest (other than pursuant to a Permitted Transfer or Exempt Transfer), in which case AQN shall not be obligated to deliver a Transaction Notice to AY except as provided in Clause 2.4(a) and, until such time as such a Transaction Notice is delivered pursuant to in Clause 2.4(a), the provisions of Clauses 2.5, 2.6 and 2.7 shall not apply; or

 

(ii)           a Transaction Notice pursuant to Clause 2.4(a) with respect to such ROFO Interest and, thereupon, the remaining provisions of this Article 2 shall apply thereto; provided, however, that the foregoing shall not obligate AQN to sell or otherwise dispose of all or any portion of the applicable ROFO Interest to any AY Company or any other Person.

 

2.5          Transfer Information. As part of any Transaction Notice, AQN shall make available to AY, electronically or in hard copy, the following information that is then in the possession of or reasonably available to AQN relating to the applicable Target, all as determined in good faith by AQN (“Transfer Information”), without limiting AY’s right under Clause 2.6(b) to such additional information as may be reasonably requested by AY during the Negotiation Period:

 

(a)           a reasonably detailed description of the Target Interest, the Target Entities, and the Target Asset;

 

(b)           a non-binding indicative target price for the sale of the Target Interest;

 

(c)           all ownership and material corporate information of the Target Interest and the Target Entities;

 

(d)           all material tax information relating to the Target Interest, the Target Entities and the Target Asset including, but not limited to, all tax returns, tax inspections and tax claims;

 

(e)           financial statements for the Target, which shall be audited to the extent available;

 

(f)            a current financial model covering the reasonably expected useful life of the Target Asset, including annual yield calculation, equity internal rate of return, project internal rate of return, and valuation and debt models, which financial model (i) if applicable, shall be the financial model used in conjunction with funding of such Target Asset by any Financing Party, updated to reflect any material changes in assumptions, and (ii) shall have been prepared in good faith and in accordance with the reasonable, customary standards employed by AQN or the Person preparing the financial model on behalf of AQN in the course of modeling the financial performance of similar assets;

 

(g)           the most recent version of (and any updates to) the reports and studies, if any, prepared by (i) an independent engineer, including (to the extent then reasonably capable of determination) assessment of the extent to which the Target Asset has been built in accordance with applicable specifications and industry standards, and the extent to which the Target Asset can be expected to deliver the expected performance, and (ii) any geotechnical engineer, environmental consultant, or other consultant with respect to the Target Asset, in the case of each of the foregoing prepared on behalf of or for any AQN Company or, to the extent available to AQN, on behalf of or for any Financing Party;

 

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(h)           the most recent legal reports or legal opinions, if any, prepared for any AQN Company relating to the Target;

 

(i)            a list and copies of all of the following, to which any Target Entity is a party or which is otherwise binding on the Target (“Material Contracts”): (i) any off-take or concession agreement, (ii) any agreement for any physical or financial hedge, swap or similar derivative transaction, (iii) any EPC Contract or other material construction contract, (iv) any major equipment purchase or warranty agreement, (v) any operating and maintenance agreement or asset management agreement, (vi) any financing agreement, and (vii) any other agreement reasonably expected to require payments to or by any Target Entity of more US$250,000 following the Transfer;

 

(j)            copies of regular, periodic construction and operating reports delivered pursuant to the requirements of any EPC Contract or operating and maintenance agreement;

 

(k)           all notices of any outstanding default, violation or claim (including warranty claims), and any outstanding waivers, from or to counterparties under any Material Contracts;

 

(l)            a list and copies of all material licenses, permits, authorizations and other governmental approvals held by any Target Entity or otherwise related to the Project, and a list of any material licenses, permits, authorizations and other governmental approvals required but not yet obtained;

 

(m)          a reasonably detailed description of any claim in excess of US$100,000 of or against any Target Entity that is then outstanding;

 

(n)           a detailed description of any rights regulating divestitures of the Target, if any, that may be triggered as a result of a Transfer of the Target Interest to AY, such as drag-along and tag-along clauses, preemptive purchase rights, and similar provisions;

 

(o)           any other documentation and information as may be reasonably requested by AY that has been agreed to by the Parties in writing in advance of the delivery of the applicable Transaction Notice; and

 

(p)           a draft agreement setting forth proposed terms and conditions for the sale and purchase of the Target Interest (a “Proposed Definitive Agreement”).

 

2.6          Negotiation Period.

 

(a)           For a period of sixty (60) days following delivery of any Transaction Notice (including the related Transfer Information) (a “Negotiation Period”), the Parties shall discuss and negotiate in good faith, on an exclusive but non-binding basis, to attempt to agree on definitive terms, acceptable to both Parties, upon which the applicable AQN Companies would transfer the Target Interest to an AY Company.

 

(b)           During the Negotiation Period, AQN shall, and shall cause any applicable AQN Company to:

 

(i)            respond reasonably promptly, and in any event prior to the expiration of the Negotiation Period, to any inquiries or requests for additional information from AY;

 

(ii)           make available to AY appropriate personnel of any AQN Company for purposes thereof;

 

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(iii)          use commercially reasonable efforts to supplement the financial model provided pursuant to Clause 2.5(f) with such additional data and calculations as may be reasonably requested by AY; and

 

(iv)          otherwise cooperate with AY to facilitate AY’s due diligence assessment of the Target Interest, Target Entities, and Target Asset.

 

(c)           If the Negotiation Period commenced prior to COD but ends after COD (or the parties have entered into a Definitive Agreement with respect to a Transfer but such Transfer has not occurred prior to COD), then with respect to any report delivered pursuant to Clause 2.5(g) that is customarily updated for financing parties at COD (including the independent engineer’s report), AQN shall cause to be delivered to AY an update to such report reflecting the conditions at COD, once achieved.

 

(d)           At any time during the Negotiation Period, AY shall have the right (but shall not be obligated) to deliver to AQN on behalf of the applicable AQN Company a binding written offer for the purchase of the applicable Target Interest by an AY Company in the form of a revised Proposed Definitive Agreement which shall set forth the purchase price and all other material terms and conditions of such proposed Transfer (a “Binding Offer”).  Any such Binding Offer shall remain open for acceptance by AQN on behalf of the applicable AQN Company for a period of ten (10) Business Days or such longer period as may be stated in such Binding Offer.

 

2.7          Consummation of Sale to AY

 

(a)           Each purchase of a Target Interest by AY shall be completed pursuant to a written purchase and sale agreement negotiated, agreed upon and executed by the Parties during the Negotiation Period (a “Definitive Agreement”).

 

(b)           Notwithstanding any other provision of this Agreement, the consummation of any Transfer to any AY Company pursuant to the terms of this Agreement shall be subject to obtaining all Governmental Approvals and material Third Party consents or approvals reasonably required in connection therewith.  Following execution of a Definitive Agreement, each Party shall use its commercially reasonable efforts to obtain all such approvals and consents required to be obtained by such Party or its Affiliates and shall reasonably cooperate with all such efforts by any other Party or any Affiliate thereof.

 

(c)           Unless otherwise agreed by the Parties, any Transfer of a Target Interest to any AY Company pursuant to the terms of this Agreement shall be consummated on or prior to the later of (i) ninety (90) days following the execution of the Definitive Agreement for such Transfer; and (ii) ten (10) Business Days following the satisfaction of all conditions thereto, including the receipt of all Governmental Approvals, consents and approvals reasonably required by either Party in connection with such Transfer.

 

ARTICLE 3

OTHER TRANSFERS

 

3.1          Transfers Other than to AY.

 

(a)           Provided that no Definitive Agreement has been entered into during the Negotiation Period for the Transfer of the applicable Target Interest to an AY Company, upon and following the expiration (or earlier termination by AY) of such Negotiation Period, the AQN Companies shall have the right at any time to negotiate and consummate a Transfer of such Target to any Person, subject to Clause 3.1(b).

 

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(b)           Notwithstanding Clause 3.1(a), in the event that, during the Negotiation Period for a Target, AY delivered a Binding Offer for such Target Interest to AQN then, for a period of thirty (30) months following the expiration (or earlier termination by AY) of such Negotiation Period (a “Restricted Transfer Period”) no AQN Company shall Transfer such Target Interest to any Person for an aggregate Equity Purchase Price that is less than 105% of the last Equity Purchase Price offered by AY during the Negotiation Period pursuant to a Binding Offer and otherwise upon terms and conditions that, when taken together, are not materially less favorable to the AQN Company than those that were last proposed by AY in a Binding Offer.

 

3.2          Permitted and Exempt Transfers.

 

(a)          The provisions of Article 2 and Clause 3.1 shall not apply to any of the following Transfers (each, a “Permitted Transfer”), provided that, in each such case, the applicable ROFO Interest, and any interest in any ROFO Entity and ROFO Asset held through such ROFO Interest, will remain subject to and bound by the terms of this Agreement:

 

(i)            any grant to a Financing Party of a Lien in or on any ROFO Interest;

 

(ii)           any Transfer of a ROFO Interest by any AQN Company to another AQN Company; or

 

(iii)          without limiting Clause 3.2(b), any Transfer of any ROFO Interest by any AQN Company to any AAGES Company in connection with which such AAGES Company agrees in writing for the benefit of AY that such AAGES Company and its Affiliates will thereupon be subject to and bound by the terms of this Agreement with respect to such ROFO Interest as if such AAGES Company were an AQN Company (and, in such case, pursuant to Clause 4.2(a) hereof the AAGES ROFO Agreement shall not apply to such ROFO Interest).

 

(b)          The provisions of Article 2 and Clause 3.1 shall not apply to any of the following Transfers (each, an “Exempt Transfer”):

 

(i)            a foreclosure upon any Lien by any Financing Party, or any Transfer in lieu of any such foreclosure or similar exercise of remedies by such Financing Party;

 

(ii)           any Transfer to any Third Party of any portion, direct or indirect, of a ROFO Interest prior to the Commercial Operation Date of the related ROFO Asset:

 

(A)          to satisfy any requirement (including under applicable law, the applicable off-take or concession agreement, or any request for proposals therefor) as to the ownership of the applicable Facility or entities owning such Facility, including (1) qualified operator ownership requirements, (2) any requirement to have multiple unrelated owners, or (3) requirements that certain interests in an Asset be owned by specified demographic constituencies, in any case that AQN determines in good faith can more efficiently or effectively be satisfied by such transferee;

 

(B)          if in the good faith judgment of AQN such Third Party possesses and can provide relationships with Persons (including the off-take counterparty or governmental authorities), or knowledge or expertise on matters, that in the good faith judgment of AQN (1) are local in nature or otherwise of unique significance to such ROFO Asset, and (2) materially enhance the likelihood of success or financial prospects of such ROFO Asset; or

 

(C)          as reasonably required to give effect to a tax equity or other specialized financing transaction with an experienced provider of such specialized financing;

 

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(iii)          any Transfer of any ROFO Interest by any AQN Company to any AAGES Company if such AAGES Company is then a party to (or is an Affiliate of a party to) the AAGES ROFO Agreement and agrees in writing for the benefit of AY that such ROFO Interest (together with any ROFO Interest previously Transferred to any AAGES Company pursuant to Clause 3.2(a)(iii)) will immediately upon such Transfer be subject to and bound by the terms of such AAGES ROFO Agreement.

 

3.3          Expiration of ROFO Rights.

 

(a)           All rights of AY or any other AY Company hereunder, and all obligations of AQN and any other AQN Company hereunder (and of any other Person who has assumed or agreed to be bound thereby), shall expire with respect to a ROFO Interest (and with respect to any interest in any ROFO Entity and ROFO Asset held through such ROFO Interest) upon the earliest of:

 

(i)            a Transfer of such ROFO Interest in accordance with Clause 3.1 (including to an AAGES Company);

 

(ii)           the expiration or termination of the Negotiation Period with respect to such ROFO Interest, if AY does not deliver to AQN a Binding Offer with respect to such ROFO Interest prior to such time;

 

(iii)          the expiration of the Restricted Transfer Period with respect to such ROFO Interest, if AY does deliver to AQN a Binding Offer with respect to such ROFO Interest, but the parties do not enter into a Definitive Agreement prior to the expiration or termination of the Negotiation Period;

 

(iv)          if the parties have entered into a Definitive Agreement with respect to such ROFO Interest, the date on which such Definitive Agreement is terminated by the applicable AQN Company as a result of any failure of the applicable AY Company to perform thereunder; and

 

(v)           an Exempt Transfer of such ROFO Interest.

 

(b)           Upon the expiration of the rights and obligations hereunder with respect to a ROFO Interest as provided in Clause 3.3(a):

 

(i)            such ROFO Interest, and any interest in any ROFO Entity and ROFO Asset held through such ROFO Interest, shall cease to constitute a ROFO Interest and Target Interest, ROFO Entity and Target Entity, and ROFO Assets and Target Asset, respectively;

 

(ii)           the AY Companies shall have no further right or interest of any nature whatsoever in or other rights with respect to such ROFO Interest, or in or with respect to any interest in any ROFO Entity or ROFO Asset held through such ROFO Interest (other than, in the case of a Transfer pursuant to Clause 3.2(b)(iii), under the AAGES ROFO Agreement); and

 

(iii)          the AQN Companies, any transferee or assignee thereof with respect to such ROFO Interest, and any successive owner thereof shall be free to Transfer such ROFO Interest, and/or any interest in any ROFO Entity and ROFO Asset held through such ROFO Interest, without any restrictions arising hereunder or (except for a Transfer pursuant to Clause 3.2(b)(iii)) under the AAGES ROFO Agreement.

 

ARTICLE 4

RELATIONSHIP WITH OTHER AGREEMENTS

 

4.1          General.  The Parties hereby acknowledge and agree that neither the direct or indirect interest of any AQN Company in any Facility, nor the direct or indirect Transfer thereof by any AQN Company, shall be subject to any rights or restrictions in favor of any AY Company other than (i) pursuant to this Agreement or, with respect to any such interest held by an AAGES Company, pursuant to the AAGES ROFO Agreement (except as provided in Clause 3.2(a)(iii)), or (ii) as may expressly be agreed in writing by AQN or the applicable AQN Company.

 

11

4.2          Other ROFO Agreements.

 

(a)           Without limiting Clause 4.1, neither the direct or indirect interest of any AQN Company in any Facility, nor any direct or indirect Transfer thereof by any AQN Company, shall be subject to any agreement between any AY Company, on the one hand, and any AAGES Company, on the other hand, including the AAGES ROFO Agreement, other than (i) any such interest held by an AAGES Company (except as provided in Clause 3.2(a)(iii)), (ii) following a Transfer of a ROFO Interest to such AAGES Company pursuant to Clause 3.2(b)(iii), or (iii) as may expressly be agreed in writing by AQN or the applicable AQN Company.  To the extent any provision of any other such agreement is inconsistent with the foregoing, such provisions are hereby waived and superseded by this Agreement.  AY agrees to execute such documents and take such other action as may be reasonably requested by AQN to confirm and give full effect to the foregoing.

 

(b)           AY hereby agrees that any AAGES Company may at any time Transfer any Facility or interest therein to any AQN Company, and that any rights or restrictions otherwise arising in connection with such Transfer under the AAGES ROFO Agreement are hereby waived; provided, that, subject to Clause 4.2(c), or unless such Facility is located in the United States or Canada (or any territory of either), upon and following such Transfer such Facility or interest therein shall be subject to the applicable rights and restrictions set forth in this Agreement until such rights and restrictions expire or terminate in accordance with the terms of this Agreement.  AY agrees to execute such documents and take such other action as may be reasonably requested by AQN to confirm and give full effect to the foregoing.

 

(c)           This Agreement shall not apply to any direct or indirect interest of any AQN Company in any Facility, nor to any direct or indirect Transfer thereof by any AQN Company:

 

(i)            if such interest is held through one or more AAGES Companies (except as provided in Clause 3.2(a)(iii));

 

(ii)           if such interest is Transferred by any AAGES Company to any AQN Company (A) in accordance with Clause 3.1 of the AAGES ROFO Agreement, or (B) upon or following the expiration of the rights of AY under the AAGES ROFO Agreement with respect to such interest, unless otherwise expressly agreed in writing by AQN for the benefit of AY; or

 

(iii)          if such interest is Transferred by any AAGES Company to any AQN Company and AQN has expressly agreed in writing for the benefit of AY that such interest will be subject to the AAGES ROFO Agreement.

 

4.3          Existing Third Party Rights.

 

(a)           AY’s rights under this Agreement with respect to any ROFO Interest, ROFO Entity or ROFO Asset shall not limit, hinder or delay, and shall be subject to, any of the following purchase rights or options of any Third Party with respect to such ROFO Interest, ROFO Entity or ROFO Asset (any such right, an “Existing Right”):

 

(i)            any such rights granted prior to the acquisition by any AQN Company of such ROFO Interest that are not granted to such Third Party in contemplation of such acquisition by an AQN Company, except as provided in Clause 4.3(a)(iii);

 

12

(ii)           any such rights granted in connection with the entry into or grant of a concession or long-term revenue contract for such Facility with or by such Third Party or an Affiliate thereof; and

 

(iii)          any such rights of Third Party co-owners (A) granted in connection with any direct or indirect investment by such Third Party in such ROFO Asset prior to such time that such Facility becomes a Construction Asset, or (B) imposed by any then-existing direct or indirect owner of such ROFO Asset as a condition to the acquisition by an AQN Company of a direct or indirect interest in such ROFO Asset.

 

(b)          To the extent that there is any conflict between the terms of an Existing Right and the terms of this Agreement, the terms of such Existing Right shall prevail.  Notwithstanding the foregoing, AQN shall, and shall cause each AQN Company to, use commercially reasonable efforts (without the incurrence of financial burden) to exempt from any Existing Right any Transfer of a ROFO Interest to any AY Company pursuant to this Agreement.

 

ARTICLE 5

TERM AND TERMINATION

 

5.1          Term. Unless earlier terminated in accordance with this Article 5, the term of this Agreement shall commence upon the Effective Date and shall continue in full force and effect for a period of ten (10) years following the Effective Date.

 

5.2          Termination.  This Agreement may be terminated upon written notice by:

 

(a)           either Party, upon or at any time following the expiration or termination of the AY Shareholders Agreement in its entirety or with respect to AQN;

 

(b)           AQN to AY, with such termination to be effective on the date that is 180 days following AY’s receipt of such notice or such later date as specified in such notice by AQN;

 

(c)           a Party that is not then in material breach of any provisions of this Agreement, if there has been a material breach of this Agreement by the other Party and such breach has not been cured by such other Party within forty (40) Business Days after delivery of written notice of such breach by the terminating Party to such other Party.

 

5.3          Effect of Termination.  Upon the expiration or any termination of this Agreement, the Parties shall have no further rights or obligations under this Agreement, except that (a) Article 6 shall survive any such expiration or termination; and (b) termination of this Agreement shall not relieve any Party from liability for any breach of this Agreement by such Party prior to such expiration or termination.

 

ARTICLE 6

CONFIDENTIALITY

 

6.1          Restrictions.  The Parties acknowledge that, from time to time, they may receive Confidential Information from or regarding the other Party or its Affiliates in connection with this Agreement or any of the transactions contemplated hereby.  Each Party shall hold such Confidential Information in trust and confidence and shall not disclose any such Confidential Information to any Person except as may be authorized by written consent of such other Party.  Notwithstanding the preceding to the contrary, each Party shall be authorized to disclose such Confidential Information on a need to know basis, to (a) its Affiliates and to its and their respective advisors, accountants, attorneys, officers, directors, employees, and agents who are under an obligation not to disclose such information; and (b) any Persons providing financing to such Party with respect to any Facility or transaction contemplated hereby, provided that such Person has agreed in writing to maintain the confidentiality thereof materially in accordance with the terms of this Agreement; provided, that in the case of each of the foregoing, the Party disclosing such Confidential Information shall be responsible and liable hereunder for any breach of the confidentiality terms of this Agreement by any Person to which such Confidential Information is disclosed.

 

13

6.2          Permitted Disclosures.  Notwithstanding the provisions of Clause 6.1, a Party and its Affiliates may disclose Confidential Information of the other Party to the extent required by Applicable Law, regulation, legal process, or stock exchange rules; provided that such Party shall use commercially reasonable efforts to notify the other Party of such requirement, if permitted by Applicable Law or Governmental Authority, prior to disclosure so that such other Party may seek an appropriate protective order or other remedy.

 

6.3          Enforcement.  The Parties acknowledge that breach of the provisions of this Article 6 may cause irreparable injury to the other Party for which monetary damages are inadequate, difficult to compute, or both.  Accordingly, the Parties agree that the provisions of this Article 6 may be enforced by specific performance.

 

ARTICLE 7

MISCELLANEOUS

 

7.1          Entire Agreement.  Each of the Parties to this Agreement confirms on behalf of itself and its Affiliates that this Agreement, together with the AY Shareholders Agreement, represents the entire understanding, and constitutes the whole agreement between the Parties, in relation to its subject matter and supersedes any previous agreement between the Parties with respect thereto and, without prejudice to the generality of the foregoing, excludes any warranty, condition or other undertaking implied at law or by custom, usage or course of dealing.

 

7.2          Waiver.  The rights and remedies of the Parties shall not be affected by any failure to exercise or delay in exercising any right or remedy or by the giving of any indulgence by any other Party or by anything whatsoever except a specific waiver or release in writing and any such waiver or release shall not prejudice or affect any other rights or remedies of the Parties.  No single or partial exercise of any right or remedy shall prevent any further or other exercise thereof or the exercise of any other right or remedy.

 

7.3          Variation.  No variation of this Agreement (or any of the documents referred to in it) shall be valid unless it is in writing (which, for this purpose, does not include email) and signed by or on behalf of each of the Parties.  The expression "variation" includes any variation, supplement, deletion or replacement however effected.

 

7.4          Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. No Party shall assign this Agreement or any interest therein to any Person without the prior written consent of the other Party (which consent may be withheld in such Party’s sole discretion).

 

7.5          Third Party Beneficiaries. This Agreement shall not confer any rights or remedies on any Person other than the Parties and their respective successors and permitted assigns.

 

7.6          Relationship. This Agreement shall not be deemed to create a partnership, joint venture, association or any other similar relationship between the Parties.

 

7.7          Severability. If any term or provision of this Agreement is held to be or rendered invalid or unenforceable at any time in any jurisdiction, such term or provision shall not affect the validity or enforceability of any other terms or provisions of this Agreement, or the validity or enforceability of such affected terms or provisions at any other time or in any other jurisdiction.

 

14

7.8          Counterparts.  This Agreement may be executed in any number of counterparts and by the Parties to it on separate counterparts, each of which when executed and delivered shall be an original but all the counterparts together constitute one instrument.  Any Party may deliver executed signature pages to this Agreement by e-mail to the other Party, which e-mail copy shall be deemed to be an original executed signature page.

 

7.9          Costs.  Each Party shall pay its own costs and expenses in connection with the preparation and negotiation of this Agreement and any matter contemplated by it.

 

7.10        Language.  This Agreement was negotiated in English and, to be valid, all certificates, notices, communications and other documents made in connection with it shall be in English.  If all or any part of this Agreement or any such certificate, notice, communication or other document is for any reason translated into any language other than English the English text shall prevail.  Each of the Parties understands English and is content for all communications relating to this Agreement to be served on it in English.

 

7.11        Notices.

 

(a)           A notice (including any approval, consent or other communication) in connection with this Agreement and the documents referred to in it:

 

(i)            must be in writing; and

 

(ii)           must be left at or delivered by courier to the address of the addressee or sent by pre-paid recorded delivery (airmail if posted to or from a place outside the country of delivery) to the address of the addressee or sent by e-mail to the e-mail address  of the addressee in each case which is specified in this clause in relation to the Party to whom the notice is addressed, and marked for the attention of the person so specified, or to such other address or marked for the attention of such other person, as the relevant Party may from time to time specify by notice given in accordance with this clause.

 

The relevant details of each Party at the date of this Agreement are:

AY:

 

	
Address:

	
Great West House, 17th Floor, GW1 Great West Road

Brentford, TW8 9DF

United Kingdom

	 	 
	
E-mail address:

	
irene.hernandez@atlanticayield.com

	 	 
	
Attention:

	
General Counsel and Company Secretary

With a copy (which shall not constitute notice) to:

 

	
Address:

	
Linklaters LLP

One Silk Street

London EC2Y 8HQ

	 	 
	
E-mail address:

	
simon.branigan@linklaters.com

	 	 
	
Attention:

	
Simon Branigan

 

15

AQN:

 

	
Address:

	
Algonquin Power & Utilities Corp.

354 Davis Road, Suite 100

Oakville, Ontario, Canada L6J 2X1

	 	 
	
E-mail address:

	
Ian.Robertson@APUCorp.com

	 	 
	
Attention:

	
Chief Executive Officer

With a copy (which shall not constitute notice) to:

 

	
Address:

	
Algonquin Power & Utilities Corp.

354 Davis Road, Suite 100

Oakville, Ontario, Canada L6J 2X1

	 	 
	
E-mail address:

	
Jennifer.Tindale@APUCorp.com

	 	 
	
Attention:

	
Chief Legal Officer

And to:

 

	
Address:

	
Husch Blackwell LLP

4801 Main Street, Suite 1000

Kansas City, Missouri, USA 64112

	 	 
	
E-mail address:

	
Jim.Goettsch@huschblackwell.com

	 	 
	
Attention:

	
James G. Goettsch

(b)           In the absence of evidence of earlier receipt, any notice shall take effect from the time that it is deemed to be received in accordance with the following, subject to Clause 7.11c):

 

(i)            in the case of a notice left at the address of the addressee, upon delivery at that address;

 

(ii)           in the case of a posted letter, on the seventh day after posting to the address of the addressee; and

 

(iii)          in the case of email, upon delivery to the email address of the addressee.

 

(c)           A notice received or deemed to be received in accordance with Clause 7.11(b) above on a day which is not a Business Day, or after 5:00 pm on any Business Day, shall be deemed to be received on the next following Business Day.

 

7.12        Governing Law.  This Agreement and any dispute or claim arising out of or in connection with it or its subject matter, existence, negotiation, validity, termination or enforceability (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of the State of New York, without giving effect to any principles regarding conflict of laws.

 

16

7.13        Jurisdiction.

 

(a)           Each Party irrevocably agrees that the state courts of New York or federal courts in the Borough of Manhattan for the southern district of New York shall have exclusive jurisdiction in relation to any dispute or claim arising out of or in connection with this Agreement or its subject matter, existence, negotiation, validity, termination or enforceability (including non-contractual disputes or claims).

 

(b)           Each Party irrevocably waives any right that it may have to object to an action being brought in those courts, to claim that the action has been brought in an inconvenient forum, or to claim that those courts do not have jurisdiction.

 

(c)           Regardless of whether any other courts have jurisdiction to consider a dispute falling within Clause 7.13(a) each Party irrevocably undertakes that it will neither issue nor cause to be issued originating or other process in respect to such a dispute in any jurisdiction other than the courts specified in Clause 7.13(a).

 

(d)           In the event that any Party commences an action in any court other than the courts specified in Clause 7.13(a) (a "foreign action"), the Party which commenced the foreign action shall indemnify each other Party in respect of any and all costs and liabilities which it has incurred in connection with the foreign action, whether or not those costs and liabilities would be recoverable apart from the provisions of this Clause.

 

(e)           Each Party agrees that without preventing any other mode of service, any document in an action may be served on any Party by being delivered to or left for that Party at its address for service of notices under Clause 7.11.

 

[Signature page follows.]

 

17

IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first written above.

	
SIGNED BY

	
Santiago Seage y Daniel Villalba

	 	 
	
for and on behalf of

	 	
/s/ Daniel Villalba

	
ATLANTICA YIELD PLC

	 	
(Signature of authorised person)

	 	 	 
	 	 	
/s/ Santiago Seage

	 	 	
(Signature of authorised person)

	
SIGNED BY Ian Robertson and Chris Jarratt

	 	 
	
for and on behalf of

	 	
/s/ Ian Robertson

	
ALGONQUIN POWER & UTILITIES CORP.

	 	
(Signature of authorised person)

	 	 	 
	 	 	
/s/ Chris Jarratt

	 	 	
(Signature of authorised person)

 

 

[Signature page to AQN ROFO Agreement]Blueprint

  Exhibit 10.1

 

SIXTH
AMENDMENT

TO

AGREEMENT
AND PLAN OF MERGER

 

This
SIXTH AMENDMENT TO AGREEMENT AND
PLAN OF MERGER, dated as of March 12, 2018 (this
“Amendment”), is entered
into by and among Fusion Telecommunications International, Inc., a
Delaware corporation (the “Company”), Fusion BCHI
Acquisition LLC, a Delaware limited liability company
(“Merger
Sub”), and Birch Communications Holdings, Inc., a
Georgia corporation (“BCHI”). Capitalized terms
used but not otherwise defined herein shall have the meanings given
to them in the Merger Agreement.

 

RECITALS

 

A.           
The Parties previously entered into that certain Agreement and Plan
of Merger, dated as of August 26, 2017, as amended by the First
Amendment to Agreement and Plan of Merger, dated as of September
15, 2017, the Second Amendment to Agreement and Plan of Merger,
dated as of September 29, 2017, the Third Amendment to Agreement of
Plan of Merger, executed on October 24, 2017, the Amended and
Restated Third Amendment to Agreement and Plan of Merger, dated as
of October 27, 2017, the Fourth Amendment to Agreement and Plan of
Merger, dated January 24, 2018, and the Fifth Amendment to
Agreement and Plan of Merger, dated as of January 25, 2018
(collectively, the “Merger
Agreement”).

 

B.           
The Parties desire to further amend the Merger Agreement as set
forth herein.

 

The
Parties hereby agree as follows:

 

1. Section 1.2(b) of
the Merger Agreement is hereby amended and restated to read as
follows:

 

“(b)             Board
of Directors. The size of the Company Board will initially
be fixed at seven (7) members. The initial members of the Company
Board as of the Effective Time will be determined prior to the
Closing in accordance with the provisions of the
Stockholders’ Agreement; provided that such initial members
to be designated by the Company shall be determined by the
Company’s Compensation and Nominating Committee subject to
Company Board approval.”

 

2. Section 7.1(k) of
the Merger Agreement is hereby amended and restated to read as
follows:

 

“(k)             Selection
of Directors. All seven of the initial members of the
Company Board shall have been determined in accordance with the
provisions of the Stockholders’
Agreement.”

 

3. Exhibit B to the Merger
Agreement is hereby deleted and replaced with the Exhibit B attached
hereto.

 

 

 

 

4. Effect of Amendment. This
Amendment shall not constitute a waiver, amendment or modification
of any other provision of the Merger Agreement not expressly
contemplated hereby. Except as specifically modified and amended
hereby, the Merger Agreement shall remain unchanged and in full
force and effect. From and after the date hereof, each reference in
the Merger Agreement to “this Agreement”,
“hereunder”, “hereof”, “herein”
or words of similar meaning shall mean and be a reference to the
Merger Agreement as amended by this Amendment. Notwithstanding the
foregoing, references to the date of the Merger Agreement, and
references to the “date hereof”, “the date of
this Agreement” or words of similar meaning in the Merger
Agreement shall continue to refer to August 26, 2017.

 

5. Governing Law. This Amendment
will be governed by, and construed and enforced in accordance with,
the internal Laws of the State of Delaware, without regard to any
applicable conflict of laws principles (whether of the State of
Delaware or any other jurisdiction).

 

6. Jurisdiction. Section 9.8 (Jurisdiction) of
the Merger Agreement is incorporated herein by reference and made a
part hereof as if fully set forth herein.

 

7. Counterparts. This Amendment
may be executed in two or more counterparts, all of which will be
considered one and the same agreement and will become effective
when counterparts have been signed by each of the Parties and
delivered to the other Parties, it being understood that each Party
need not sign the same counterpart. PDF transmissions of this
Amendment shall be deemed to be the same as the delivery of an
executed original.

 

[Signatures
appear on following page.]

 

 

 

 

IN WITNESS WHEREOF, the Parties have
caused this Amendment to be executed by their respective officers
thereunto duly authorized as of the date first above
written.

 

	
 

	

FUSION
TELECOMMUNICATIONS INTERNATIONAL, INC.

 

 

By:
_/s/ James P. Prenetta,
Jr,

      Name:
James P. Prenetta, Jr.

      Title:
Executive Vice President and

     
General Counsel

 

 

FUSION
BCHI ACQUISITION LLC

 

 

By:
/s/ Gordon Hutchins,
Jr.

      Name:
Gordon Hutchins, Jr.

      Title:
Manager

 

 

BIRCH
COMMUNICATIONS HOLDINGS, INC.

 

 

By:
/s/ Gordon P. Williams,
Jr.

      Name:
Gordon P. Williams, Jr.

     
Title: Senior Vice President and General Counsel

 

 

 

 

Exhibit B

 

Attached
hereto.

 

 

 

 

 

STOCKHOLDERS’ AGREEMENT

 

This
STOCKHOLDERS’ AGREEMENT (this “Agreement”) is entered
into as of [●], 2018 among Fusion Connect, Inc. , a
Delaware corporation (the “Company”), BCHI Holdings,
LLC, a Georgia limited liability company (“Holding LLC”), the other
Persons set forth on Schedule I hereto (the
“Initial FTI
Stockholders”) and each Person that becomes a party to
this Agreement by delivering to the Company and Holding LLC a duly
executed joinder to this Agreement in the form attached hereto as
Exhibit A hereto or
such other form approved by Holding LLC and the Company (together,
with the Initial FTI Stockholders, the “FTI Stockholders” and
each an “FTI
Stockholder).

 

RECITALS

 

A.           This
Agreement is being entered into in connection with the consummation
of the transactions contemplated by the Merger Agreement, dated as
of August 26, 2017 (as amended or modified from time to time, the
“Merger
Agreement”), by and among the Company, Birch
Communications Holdings, Inc., a Georgia corporation,
and Fusion BCHI
Acquisition LLC, a Delaware limited liability company.

 

B.           After
giving effect to the transactions contemplated by the Merger
Agreement, Holding LLC and the Initial FTI Stockholders own the
equity securities of the Company in the respective amounts
indicated on Schedule
I hereto.

 

C.           Holding
LLC, the FTI Stockholders and the Company wish to set forth certain
agreements regarding the relationships among them and the
governance of the Company.

 

In
consideration of the premises, and of the representations,
warranties, covenants and agreements set forth herein, the Company
and each Stockholder agree as follows:

 

 ARTICLE
I.

 

DEFINITIONS

 

Section 1.1. Certain Defined Terms. As used
herein, the following terms shall have the following
meanings:

 

“Affiliate” means (i) with
respect to any Person, any other Person directly or indirectly
controlling, controlled by or under common control with, such
Person, (ii) with respect to Holding LLC, any member of Holding LLC
or any trust therefor, and (iii) with respect to any natural
person, any spouse or lineal descendant of such person, and in each
case, any trust therefor.

 

“Agreement” has the
meaning set forth in the preamble.

 

“beneficial owner” or
“beneficially
own” has the meaning given such term in Rule 13d-3
under the Exchange Act, and a Person’s beneficial ownership
of Common Stock or other Equity Securities of the Company shall be
calculated in accordance with the provisions of such rule. For the
avoidance of doubt, no Person shall be deemed to beneficially own
any security solely as a result of such Person’s execution of
this Agreement.

 

 

 

 

“Board” means the Board of
Directors of the Company.

 

“Business Day” means any
day that is not a Saturday, Sunday or other day on which banks are
required or authorized by law to be closed in New York
City.

 

“Bylaws” means the Bylaws
of the Company, as in effect on the date hereof and as the same may
be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.

 

“Cause” shall mean the
occurrence of any of the following:

 

(A) any action or
omission by the applicable Director that constitutes (1) a criminal
act committed in connection with or related to the activities of
the Company or (2) fraud, willful misconduct or gross negligence in
the performance of such Director’s duties as a director of
the Company or otherwise relating to the activities of the
Company;

 

(B) the conviction of
the applicable Director of any criminal offense unrelated to the
activities of the Company that constitutes a felony or for which a
term of imprisonment of any duration is imposed (other than an
offense under any road traffic legislation, not accompanied by any
other criminal offense that constitutes a felony);

 

(C) a breach by the
applicable Director of a material securities law or regulation or a
material rule of any securities exchange of the Securities and
Exchange Commission; or

 

(D) if such Director
also is a party to a consulting, services, severance or employment
agreement with the Company and such term is defined therein, the
meaning as set forth in such agreement.

 

“Charter” means the
Certificate of Incorporation of the Company, as in effect on the
date hereof and as the same may be amended, supplemented or
otherwise modified from time to time.

 

“Closing” means the
closing of the Transaction as defined in and as contemplated by the
Merger Agreement.

 

“Common Stock” means the
common stock, par value $.01 per share, of the Company, and any
securities issued in respect thereof, or in substitution therefor,
in connection with any stock split, dividend or combination, or any
reclassification, recapitalization, merger, consolidation, exchange
or other similar reorganization.

 

“Communications Act” means
the Communications Act of 1934.

 

“Company” has the meaning
set forth in the preamble.

 

 

 

 

“Control” (including the
terms “controlling”,
“controlled
by” and “under common control
with”), with respect to the relationship between or
among two or more Persons, means the possession, directly or
indirectly, of the power to direct or cause the direction of the
affairs or management of a Person, whether through the ownership of
voting securities, as trustee or executor, by contract or
otherwise.

 

“Covered Claims” has the
meaning set forth in Section 4.16(a).

 

“Director” means any
member of the Board.

 

“Equity Securities” means
any and all shares of Common Stock or other equity securities of
the Company, securities of the Company convertible into, or
exchangeable or exercisable for (whether presently convertible,
exchangeable or exercisable or not), such shares, and options,
warrants or other rights (whether presently convertible,
exchangeable or exercisable or not) to acquire such shares of
Common Stock or other equity securities of the
Company.

 

“Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.

 

“FCC Regulations” means
the rules, regulations, published decisions, published orders and
policies promulgated by the Federal Communications Commission and
in effect from time to time.

 

“FTI Director” means, as
of any date, each Person who is a director of the Company on such
date and who was designated as a director nominee in accordance
with the provisions of Section 2.1(b)(ii) and elected
to the Board at an annual or special meeting of the stockholders of
the Company.

 

“FTI Stockholders” has the
meaning set forth in the preamble.

 

“FTI Nominating Committee”
means, as of any date on which an action or decision of the FTI
Nominating Committee is required or permitted to be taken pursuant
to this Agreement, the FTI Directors serving on the Board on such
date.

 

“Group” has the meaning
set forth in Section 13(d)(3) of the Exchange Act.

 

“Holding LLC” has the
meaning set forth in the preamble.

 

“Information” means all
confidential information about the Company or any of its
Subsidiaries that is or has been furnished to any Stockholder or
any of its Representatives by or on behalf of the Company or any of
its Subsidiaries, or any of their respective Representatives
(whether written or oral or in electronic or other form and whether
prepared by the Company or any of its Subsidiaries or their
respective Representatives), together with that portion of all
written or electronically stored documentation prepared by such
Stockholder or its Representatives based on or reflecting, in whole
or in part, such information;provided, however, that the term
“Information” shall not
include any information that (i) is or becomes generally available
to the public through no action or omission by such Stockholder or
its Representatives in violation of this Agreement, (ii) is or
becomes available to such Stockholder on a non-confidential basis
from a source, other than the Company or any of its Subsidiaries,
or any of their respective Representatives, that, to such
Stockholder’s knowledge, after reasonable inquiry, is not
prohibited from disclosing to such Stockholder by a contractual,
legal or fiduciary obligation or (iii) is independently developed
by a Stockholder or its Representatives or Affiliates without use
of any Information.

 

 

 

 

“Initial FTI Stockholders”
has the meaning set forth in the preamble.

 

“Law” means the law of any
jurisdiction, whether international, multilateral, multinational,
national, federal, state, provincial, local or common law, or an
order, act, statute, ordinance, regulation, rule, extension order
or code promulgated by a governmental authority (including any
department, court, agency or official, or non-governmental
self-regulatory organization, agency or authority and any political
subdivision or instrumentality thereof).

 

“Merger Agreement” has the
meaning provided in the first recital.

 

“Person” means any
individual, corporation, limited liability company, limited or
general partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any
agency or political subdivisions thereof or any Group comprised of
two or more of the foregoing.

 

“Representatives” means
with respect to any Person, any of such Person’s, or its
Affiliates’, directors, officers, employees, general
partners, Affiliates, direct or indirect shareholders, members or
limited partners, attorneys, accountants, financial and other
advisers, and other agents and representatives, including, in the
case of any Stockholder, any designee nominated for election to the
Board or a committee thereof by such Stockholder.

 

“Sale of the Company”
means, in any one or more related transactions, a merger (other
than a merger solely for the purpose of forming a holding company
with no change in indirect ownership or to effect a change in the
Company’s state of incorporation), business combination or
sale of all or substantially all of the Company’s assets, in
each case, as a result of which the Directors immediately prior to
such transaction do not represent a majority of the Board
immediately following the consummation of such transaction (or
series of transactions), or the stockholders of the Company
immediately prior to such transaction do not, immediately following
the consummation of such transaction (or series of transactions),
continue to own equity securities representing more than 50% of the
vote and of the equity of the Company, of the ultimate controlling
Person (in the case of a merger or business combination) or Person
succeeding to ownership of all or substantially all of the
Company’s assets (in the case of a sale of
assets).

 

“Secondary Indemnitors”
has the meaning assigned to such term in Section 4.16.

 

“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

 

“Specified Indemnitee” has
the meaning set forth in Section 4.16.

 

“Stockholder” means each
of Holding LLC and the FTI Stockholders.

 

“Subsidiary” means, with
respect to any Person, (i) any corporation of which a majority of
the securities entitled to vote generally in the election of
directors thereof, at the time as of which any determination is
being made, or a majority of the economic interests in such
Person’s equity, are owned by such Person, either directly or
indirectly, and (ii) any joint venture, general or limited
partnership, limited liability company or other legal entity in
which such Person is the record or beneficial owner, directly or
indirectly, of a majority of the voting or equity interests or of
which such Person is the general partner or managing
member.

 

 

 

 

“Transfer” means, directly
or indirectly, to sell, transfer, assign, hypothecate or similarly
dispose of (by merger, operation of law or otherwise), either
voluntarily or involuntarily, or to enter into any contract, option
or other arrangement or understanding with respect to, the sale,
transfer, assignment, hypothecation or similar disposition of (by
merger, operation of law or otherwise), any shares of Equity
Securities beneficially owned by a Person.

 

“Transferee” means any
Person to whom any Stockholder or any transferee thereof Transfers
Equity Securities in accordance with the terms hereof.

 

“Voting Securities” means
at any time the then-issued and outstanding Common Stock and any
other securities of the Company of any kind or class having power
generally to vote for the election of Directors.

 

Section
1.2. Other Definitional
Provisions. Unless otherwise expressly provided, for the
purposes of this Agreement, the following rules of interpretation
shall apply:

 

(a) When a reference is
made in this Agreement to an article or a section, paragraph,
exhibit or schedule, such reference will be to an article or a
section, paragraph, exhibit or schedule hereof unless otherwise
clearly indicated to the contrary.

 

(b) Whenever the words
“include,” “includes” or
“including” are used in this Agreement, they will be
deemed to be followed by the words “without
limitation.”

 

(c) The words
“hereof,” “herein” and
“herewith” and words of similar import will, unless
otherwise stated, be construed to refer to this Agreement as a
whole and not to any particular provision of this
Agreement.

 

(d) The meaning
assigned to each term defined herein will be equally applicable to
both the singular and the plural forms of such term, and words
denoting any gender will include all genders. Where a word or
phrase is defined herein, each of its other grammatical forms will
have a corresponding meaning.

 

(e) A reference to any
period of days will be deemed to be to the relevant number of
calendar days, unless otherwise specified.

 

(f) The word
“dollars” and symbol “$” mean U.S.
dollars.

 

(g) References herein
to any Person shall include such Person’s heirs, executors,
personal representatives, administrators, successors and
assigns.

 

(h) The word
“or” shall be disjunctive but not
exclusive.

 

(i) The parties hereto
have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement will be construed as if
drafted jointly by the parties, and no presumption or burden of
proof will arise favoring or disfavoring any party by virtue of the
authorship of any provisions hereof.

 

 

 

 

(j) Any statute or rule
defined or referred to herein or in any agreement or instrument
that is referred to herein means such statute or rule as from time
to time amended, modified or supplemented, including by succession
of comparable successor statutes or rules and references to all
attachments thereto and instruments incorporated
therein.

 

 ARTICLE
II.

 

CORPORATE GOVERNANCE

 

Section
2.1. Board of Directors
Matters.

 

(a) Board Size and Composition.
Effective as of the Closing, in accordance with Section
[●] of the
Bylaws, the size of the Board has initially been fixed at seven
Directors.

 

(b) Nomination of Directors.
Subject to Section
2.1(e), each Stockholder agrees with the Company that it
shall: (i) appear in person or by proxy at each annual meeting or
special meeting of the stockholders of the Company at which
Directors are to be elected for the purposes of obtaining a quorum;
(ii) at each such stockholders’ meeting, vote, in person or
by proxy, all of the Voting Securities owned by it on the date of
such meeting in favor of election of the following designees
nominated for election to the Board pursuant to this Section 2.1(b) and in
accordance with the Bylaws and the nomination procedures of the
Company; and (iii) in any action by written consent of the holders
of Voting Securities for the purpose of electing Directors, consent
to election of the following designees nominated for election to
the Board pursuant to this Section 2.1(b) and in
accordance with the Bylaws and the nomination procedures of the
Company:

 

(i) three (3) Persons
(at least one (1) of whom shall be an independent director within
the meaning of the NASDAQ listing standards) designated as nominees
for election to the Board by Holding LLC;

 

(ii) three
(3) Persons (at least one (1) of whom shall be an independent
director within the meaning of the NASDAQ listing standards)
designated as nominees for election to the Board by the FTI
Nominating Committee; and

 

(iii) one
(1) Person designated as a nominee for election to the Board (who
shall be an independent director within the meaning of the NASDAQ
listing standards) by Holding LLC with the prior written approval
(not to be unreasonably withheld, conditioned or delayed) of the
FTI Nominating Committee.

 

In the
event that either Holding LLC or the FTI Nominating Committee fails
to designate any nominee that it is entitled to designate pursuant
to this Section
2.1(b), then the Company will provide written notice of such
failure to Holding LLC or the FTI Nominating Committee, as
applicable. If such failure is not cured within ten (10) Business
Days following the transmission of such notice by the Company, then
the Board will be entitled to designate a nominee for such
position. The rights of each of Holdings LLC and the FTI Nominating
Committee to designate nominees for election to the Board as set
forth in this Section
2.1(b) are personal to each of Holdings LLC and the FTI
Nominating Committee and may not be exercised by any Transferee,
except that in the event Holding LLC no longer holds any Common
Stock but its Affiliates continue to hold Common Stock Transferred
by Holding LLC to such Affiliates (whether directly or by Transfers
through other Affiliates of Holding LLC), and such rights have not
been terminated pursuant to Section 2.1(e), the rights of
Holdings LLC to designate nominees pursuant to this Section 2.1(b) may be exercised
by the Affiliates of Holding LLC to which such Common Stock was
Transferred.

 

 

 

 

(c) Chairman and Vice Chairman of the
Board. Matthew D. Rosen will be the initial Chairman of the
Board and Holcombe T. Green, Jr. will be the initial Vice Chairman
of the Board.

 

(d) Removal and Replacement;
Vacancies.

 

(i) In the event that a
vacancy is created at any time by (i) the death, disability,
retirement, resignation or removal of any Director nominated for
election to the Board pursuant to Section 2.1(b), or (ii) there
is an increase in the size of the Board, which increase must be in
increments of two (2) Directors, the Company, by action of the
remaining Directors, shall, and the Stockholders agree with the
Company to use their reasonable best efforts to cause the remaining
Directors to, in the case of clause (i), fill the vacancy created
thereby with a replacement nominee designated by the entity (i.e.,
either Holding LLC or the FTI Nominating Committee, as the case may
be) that had designated such Director for nomination pursuant to
Section 2.1(b) as
promptly as practicable or, in the case of clause (ii), fill the
vacancies created thereby as required to maintain the proportionate
allocation of Directors contemplated by Section 2.1(b) above. In
addition, if such vacant position had been held by a Person
nominated under Section
2.1(b)(iii), then the nomination of the replacement nominee
shall be subject to the prior written approval of the FTI
Nominating Committee, in accordance with Section
2.1(b)(iii).

 

(ii) In
the event that a vacancy is created at any time by the death,
disability, retirement, resignation or removal of any Director
nominated for election to the Board pursuant to Section 2.1(b) and the
remaining Directors have not caused the vacancy created thereby to
be filled pursuant to Section 2.1(d)(i) by a new
designee of the appropriate Person promptly after both Holding LLC
and the FTI Nominating Committee have been notified of such
vacancy, then in such case the Company shall take all such actions
as and when requested by whichever of Holding LLC or the FTI
Nominating Committee is entitled, pursuant to Section 2.1(b) to designate a
Person to fill such vacancy (the “Designating
Stockholder”), and each other Stockholder hereby
agrees with the Company to vote, or act by written consent with
respect to, all Voting Securities beneficially owned by it on the
date of the relevant vote or action to act to fill the vacancy with
a Person designated as a replacement by the Designating Stockholder
in accordance with Section
2.1(b). Upon the written request of any Person having rights
under Section
2.1(b), each other Stockholder agrees with the Company to
vote, or act by written consent with respect to, all Voting
Securities beneficially owned by it on the date of the relevant
action to, remove any Director nominated by such Person for
election to the Board pursuant to Section 2.1(b) and to elect any
replacement Director designated for nomination by such Person
pursuant to this Section
2.1(d).

 

(iii) Subject
to Section 2.1(e),
unless otherwise requested in writing by the Person entitled to
nominate such Person for election to the Board under Section 2.1(b), no other
Stockholder shall take any action to cause the removal of any
Directors nominated by such Person for election to the Board
pursuant to Section
2.1(b); provided, that any Director may be removed by the
Board for Cause and, in such case, the resulting vacancy will be
filled with a Person designated as a replacement by the Designating
Stockholder in accordance with Section 2.1(b).

 

(iv) Any
vacancy on the Board that results from the termination of rights of
nomination pursuant to Section 2.1(e) may be filled by
action of a majority of the Board, in accordance with the Bylaws
and applicable nomination procedures of the Company.

 

 

 

 

(e) Termination of Rights of
Nomination.

 

(i) Upon such time as
Holding LLC and its Affiliates cease to beneficially own,
collectively, at least 20% of the number of shares of Common Stock
they collectively beneficially own immediately following the
Closing, Holding LLC
shall cease to have the right to designate any nominee for election
to the Board pursuant to Section 2.1(b).

 

(ii) Unless
otherwise mutually agreed by Holding LLC and the FTI Nominating
Committee, upon such time as the aggregate number of issued and
outstanding shares of Common Stock beneficially owned by Marvin
Rosen and Matt Rosen is less than that number of shares of Common
Stock equal to 1.5% of the then issued and outstanding shares of
Common Stock, the FTI Nominating Committee shall cease to have the
right to designate any nominee for election to the Board pursuant
to Section
2.1(b).

 

Section
2.2. Company
Cooperation. The Company shall take such action as may be
required under applicable Law, the Charter and the Bylaws (subject
to such vote of the Board as may be required) (a) to cause the
Board to consist of the number of Directors specified in
Section 2.1(a) and
(b) to cause one of the Directors to be appointed and serve as the
Chairman of the Board and another of the Directors to be appointed
and serve as the Vice Chairman of the Board in accordance with
Section 2.1(c). The
Company agrees to include in the slate of nominees to be voted upon
by stockholders of the Company the Persons designated for
nomination to the Board in accordance with Section 2.1(b). The Company
agrees that no modification or amendment of the Charter or the
Bylaws that is inconsistent with the provisions of this Agreement
shall be effective without the approval of Holding LLC and the FTI
Nominating Committee.

 

Section
2.3. FTI Nominating
Committee. The FTI Nominating Committee will only take such
actions under this Agreement as authorized in writing (email being
sufficient), including the nomination of individuals for election
to the Board by the FTI Nominating Committee pursuant to
Section 2.1(b)(ii),
by a majority of the FTI Nominating Committee.

 

Section
2.4. FTI
Stockholders. Notwithstanding anything to the contrary
herein, at such time as any Person shall cease to serve as an FTI
Director for any reason, such Person shall no longer be an FTI
Stockholder within the meaning of this Agreement and the rights and
obligations of such Person under this Agreement shall terminate at
such time. At such time as any Person shall be elected as an FTI
Director such Person shall become an FTI Stockholder within the
meaning of this Agreement but only upon execution and delivery, to
the Company and Holding LLC, of a duly executed joinder to this
Agreement in the form attached hereto as Exhibit A hereto or such other
form approved by Holding LLC and the Company.

 

Section
2.5. Affiliate
Transactions. Except for such transactions as are
contemplated by agreements to which the Company is a party on the
date hereof or to be entered into on the date hereof, any
transaction between the Company or any Subsidiary of the Company,
on the one hand, and a Stockholder or any Affiliate of such
Stockholder, on the other, shall require the approval of a majority
of the disinterested members of the Board.

 

 

 

ARTICLE III.

 

REPRESENTATIONS AND WARRANTIES

 

Section
3.1. Representations and
Warranties of the Company. The Company represents and
warrants to each Stockholder as follows:

 

(a) the Company has all
requisite corporate power and authority to enter into this
Agreement and to perform its obligations hereunder, and to
consummate the transactions contemplated hereby. This Agreement has
been duly authorized, executed and delivered by the Company and
constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms,
except to the extent that the enforcement hereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar Laws affecting the enforcement of creditors’ rights
generally and general equitable principles, regardless of whether
such enforceability is considered in a proceeding at law or in
equity; and

 

(b) the execution and
delivery of this Agreement by the Company, the performance of its
obligations hereunder, and the consummation of the transactions
contemplated hereby will not violate, conflict with or result in a
breach, or constitute a default (with or without notice or lapse of
time or both) under any provision of the Charter or
Bylaws.

 

Section
3.2. Representations and
Warranties of the Stockholders. Each Stockholder, severally
and not jointly, represents and warrants, solely with respect to
itself, to each other Stockholder and to the Company as
follows:

 

(c) such Stockholder
has all requisite power and authority to enter into this Agreement
and to perform its obligations hereunder, and to consummate the
transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by such Stockholder and
constitutes a valid and binding obligation of such Stockholder
enforceable against such Stockholder in accordance with its terms,
except to the extent that the enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar Laws affecting the enforcement of creditors’ rights
generally and general equitable principles, regardless of whether
such enforceability is considered in a proceeding at law or in
equity; and

 

(d) the execution and
delivery of this Agreement by such Stockholder, the performance of
its obligations hereunder, and the consummation of the transactions
contemplated hereby will not violate, conflict with or result in a
breach, or constitute a default (with or without notice or lapse of
time or both) under any provision of its charter, bylaws or other
similar organizational documents.

 

ARTICLE IV.

 

MISCELLANEOUS

 

Section
4.1. Not A
“Group”. The Stockholders and the Company
acknowledge that the arrangements contemplated by this Agreement
are not intended to constitute the formation of a Group. Each
Stockholder agrees that, for purposes of determining beneficial
ownership of such Stockholder, it shall disclaim any beneficial
ownership by virtue of this Agreement of the Company’s
securities owned by the other Stockholders, and the Company agrees
to recognize such disclaimer in its Exchange Act and Securities Act
reports.

 

 

 

 

Section
4.2. Termination.
This Agreement shall terminate upon the earliest of (a) a Sale of
the Company or (b) the date on which the rights of Holding LLC or
the FTI Nominating Committee pursuant to Section 2.1(b) to nominate
individuals for election to the Board have terminated in accordance
with the terms of Section
2.1(e);provided, however, that, notwithstanding
anything in this Section
4.2 to the contrary, the rights and obligations of any
particular Stockholder (other than an FTI Stockholder) under this
Agreement shall terminate on the date on which such Stockholder no
longer beneficially owns any Equity Securities;provided, further, that, notwithstanding
anything in this Section
4.2 to the contrary, the termination of the rights and
obligations of any Person who ceases to serve as an FTI Director
for any reason shall be governed by Section 2.4.

 

Section
4.3. Confidentiality. Each
Stockholder agrees with the Company to, and agrees with the Company
to use commercially reasonable efforts to cause its Representatives
to, keep confidential and not divulge any Information;provided, however, that nothing herein
shall prevent any Stockholder from disclosing such Information (a)
upon the order of any court or administrative agency, (b) upon the
request or demand of any regulatory agency or authority having
jurisdiction over such Stockholder or Representative, (c) to the
extent required by Law or legal process or required or requested
pursuant to subpoena, interrogatories or other discovery requests,
(d) to the extent necessary in connection with the exercise of any
remedy hereunder, (e) to other Stockholders, or (f) to such
Stockholder’s Representatives that in the reasonable judgment
of such Stockholder need to know such Information;provided, further, that, in the case of
clause (a), (b) or (c), such Stockholder shall notify the Company
of the proposed disclosure as far in advance of such disclosure as
reasonably practicable and, if requested by the Company, use
commercially reasonable efforts (but at the sole expense of the
Company) to ensure that any Information so disclosed is accorded
confidential treatment, when and to the extent
available.

 

Section
4.4. Amendments and
Waivers. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this
Agreement shall be effective without the approval of the Company,
Holding LLC and the FTI Nominating Committee;provided, however, that (a) this
Agreement may not be amended, modified or waived in any manner
adversely affecting the rights or obligations of any Stockholder
without the prior written consent of such Stockholder, (b) no
amendment, modification or waiver to Section 2.1 (directly or by
amendment of the definitions used therein) shall adversely affect
the rights of Holding LLC or the FTI Nominating Committee to
designate nominee(s) for election to the Board in accordance with
this Agreement without the consent of Holding LLC or the FTI
Nominating Committee, as the case may be, (c) amendment,
modification or waiver of this Section 4.4 shall require the
prior written consent of each Stockholder, and (d) any Stockholder
may terminate or waive (in writing) the benefit of any provision of
this Agreement with respect to itself for any purpose.

 

Section
4.5. Successors, Assigns
and Transferees. Except as expressly set forth herein, this
Agreement shall bind and inure to the benefit of, and be
enforceable by, the parties hereto and their respective successors
and permitted assigns.

 

 

 

 

Section
4.6. Notices. All
notices and other communications to be given to any party hereunder
shall be sufficiently given for all purposes hereunder if in
writing and delivered by hand, courier or overnight delivery
service, or when received in the form of an email or other
electronic transmission (receipt confirmation requested), and shall
be directed to the address set forth below (or at such other
address or email address as such party shall designate by like
notice):

 

if to
the Company, to:

 

Fusion
Connect, Inc.

420
Lexington Avenue, Suite 1718

New
York, New York 10170

Attention: James P.
Prenetta, Jr. Executive Vice President and General
Counsel

Email:
jprenetta@fusionconnect.com

 

if to
any Stockholder, to the address of such Stockholder as shown in
Schedule I
hereto.

 

Section
4.7. Further
Assurances. At any time or from time to time after the date
hereof, the parties agree to cooperate with each other, and at the
request of any other party, to execute and deliver any further
instruments or documents and to take all such further action as the
other party may reasonably request in order to evidence or
effectuate the consummation of the transactions contemplated hereby
and to otherwise carry out the intent of the parties
hereunder.

 

Section
4.8. Entire Agreement;
Third Party Beneficiaries. Except as otherwise expressly set
forth herein, this Agreement embodies the complete agreement and
understanding among the parties hereto with respect to the subject
matter hereof and supersedes and preempts any prior understandings,
agreements or representations by or among the parties, written or
oral, that they may have related to the subject matter hereof in
any way. This Agreement is not intended to confer in or on behalf
of any Person not a party to this Agreement any rights, benefits,
causes of action or remedies with respect to the subject matter or
any provision thereof.

 

Section
4.9. Delays or
Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any
breach, default or noncompliance by another party under this
Agreement, shall impair any such right, power or remedy, nor shall
it be construed to be a waiver of any such breach, default or
noncompliance, or any acquiescence therein, or of or in any similar
breach, default or noncompliance thereafter occurring. It is
further agreed that any waiver, permit, consent or approval of any
kind or character on the part of any party hereto of any breach,
default or noncompliance under this Agreement or any waiver on such
party’s part of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the
extent specifically set forth in such writing. All remedies, either
under this Agreement, by Law, or otherwise afforded to any party,
shall be cumulative and not alternative.

 

Section
4.10. Governing
Law. This Agreement will be governed by and construed in
accordance with the Laws of the State of Delaware applicable to
contracts made and to be performed within the State of Delaware,
without giving effect to conflicts of law rules that would require
or permit the application of the Laws of another
jurisdiction.

 

 

 

 

Section
4.11. Specific
Performance; Jurisdiction.

 

(a) The parties agree
that irreparable damage would occur for which money damages would
not suffice in the event that any of the provisions of this
Agreement were not performed in accordance with their specific
terms or were otherwise breached and that the parties would not
have any adequate remedy at law. It is accordingly agreed that any
non-breaching party shall be entitled to seek an injunction,
temporary restraining order or other equitable relief exclusively
in the Delaware Court of Chancery enjoining any such breach and
enforcing specifically the terms and provisions hereof, or in the
event (but only in the event) that such court does not have subject
matter jurisdiction over such action or proceeding, in the United
States District Court for the District of Delaware or another court
sitting in the state of Delaware. Each party agrees not to raise
any objections to the availability of the equitable remedy of
specific performance to prevent or restrain breaches or threatened
breaches of, or to enforce compliance with, the covenants and
obligations of such party under this Agreement. The provisions of
this Section
4.11(a) are in addition to any other remedy to which any
party is entitled at law, in equity or otherwise.

 

(b) Each of the parties
hereto irrevocably agrees that any legal action or proceeding in
connection with or with respect to this Agreement and the rights
and obligations arising hereunder, or for recognition and
enforcement of any judgment in respect of this Agreement and the
rights and obligations arising hereunder brought by the other party
hereto or its successors or assigns shall be brought and determined
exclusively in the Delaware Court of Chancery, or in the event (but
only in the event) that such court does not have subject matter
jurisdiction over such action or proceeding, in the United States
District Court for the District of Delaware or another court
sitting in the state of Delaware. The parties hereto further agree
that any dispute between the parties regarding the approval by the
FTI Nominating Committee of any Person designated by Holding LLC
pursuant to Section
2.1(b)(iii) will be submitted to the Delaware Court of
Chancery with a request to rule on an expedited basis. Each of the
parties hereto hereby irrevocably submits with regard to any such
action or proceeding for itself and in respect of its property,
generally and unconditionally, to the personal jurisdiction of the
aforesaid courts and agrees that it will not bring any action in
connection with or relating to this Agreement or any of the
transactions contemplated by this Agreement in any court other than
the aforesaid courts. Each of the parties hereto hereby irrevocably
waives, and agrees not to assert, by way of motion, as a defense,
counterclaim or otherwise, in any action or proceeding in
connection with or with respect to this Agreement, (i) any claim
that it is not personally subject to the jurisdiction of the
above-named courts for any reason other than the failure to serve
in accordance with this Section 4.11, (ii) any claim
that it or its property is exempt or immune from jurisdiction of
any such court or from any legal process commenced in such courts
(whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment
or otherwise) and (iii) to the fullest extent permitted by the
applicable Law, any claim that (A) the suit, action or proceeding
in such court is brought in an inconvenient forum, (B) the venue of
such suit, action or proceeding is improper or (C) this Agreement,
or the subject matter hereof, may not be enforced in or by such
courts.

 

 

 

 

(c) Each of the parties
hereto irrevocably consents to the service of any summons and
complaint and any other process in any other action in connection
with or relating to this Agreement, on behalf of itself or its
property, by the personal delivery of copies of such process to
such party or by sending or delivering a copy of the process to the
party to be served at the address and in the manner provided for
the giving of notices in Section 4.6. Nothing in this
Section 4.11 shall
affect the right of any party hereto to serve legal process in any
other manner permitted by Law.

 

Section
4.12. Waiver of Jury
Trial. Each party hereby waives, to the fullest extent
permitted by applicable Law, any right it may have to a trial by
jury in respect of any suit, action or other proceeding arising out
of this Agreement or any transaction contemplated hereby. Each
party (i) certifies and acknowledges that no representative, agent
or attorney of any other party has represented, expressly or
otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver, and (ii)
acknowledges that it understands and has considered the
implications of this waiver and makes this waiver voluntarily, and
that it and the other parties have been induced to enter into the
Agreement by, among other things, the mutual waivers and
certifications in this Section 4.12.

 

Section
4.13. Severability.
If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction or other authority to
be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected,
impaired or invalidated so long as the economic or legal substance
of the transactions contemplated hereby is not affected in any
manner materially adverse to any party hereto. Upon such a
determination, the parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties
as closely as possible in a mutually acceptable manner in order
that the transactions contemplated hereby be consummated as
originally contemplated to the fullest extent
possible.

 

Section
4.14. Titles and
Subtitles. The titles of the sections and subsections of
this Agreement are for convenience of reference only and will not
affect the meaning or interpretation of this
Agreement.

 

Section
4.15. Counterparts;
Electronic Signatures. This Agreement may be executed in
counterparts, each of which shall constitute one and the same
instrument. Signatures provided by electronic transmission in
“pdf” or equivalent format will be deemed to be
original signatures.

 

Section
4.16. Certain
Indemnification Matters. The Company hereby acknowledges
that an Indemnitee (as defined in the Charter) who is an officer,
director, partner, member, manager, employee, managing director or
Affiliate of, or a Director nominee pursuant to Section 2.1 of, a Stockholder
(each such Indemnitee, a “Specified Indemnitee”)
may have certain rights to indemnification, advancement of expenses
and/or insurance pursuant to charter documents, constitutive
agreements or other agreements with such Stockholder or Affiliates
of such Stockholder or other Person (other than the Company and its
Affiliates) of which such Specified Indemnitee is an officer,
director, partner, member, manager, employee, managing director or
Affiliate (collectively, the “Secondary Indemnitors”).
In furtherance of the foregoing, the Company hereby covenants and
agrees as follows:

 

 

 

 

(d) The Company shall
be the indemnitor of first resort for any claims or proceedings
(collectively, “Covered Claims”) for
which any Specified Indemnitee is entitled, under the Charter or
otherwise, to indemnification by the Company (i.e., the Company’s obligations
to each such Specified Indemnitee with respect to any Covered Claim
are primary and any obligations of any Secondary Indemnitor to
advance expenses or to provide indemnification for the same
expenses or liabilities incurred by any such Specified Indemnitee
with respect Covered Claims are secondary).

 

(e) Subject to Sections
1 and 2 of Article
IX of the Charter, the
Company shall pay the expenses (including attorneys’ fees and
expenses) incurred by any Specified Indemnitee in defending any
Covered Claim in advance of such Covered Claim’s final
disposition, without regard to any rights any such Specified
Indemnitee may have against any Secondary Indemnitor.

 

(f) The Company hereby
irrevocably waives, relinquishes and releases each Secondary
Indemnitor from any and all claims against such Secondary
Indemnitor for contribution, subrogation or any other recovery of
any kind in respect of any Covered Claim.

 

The
Company further agrees that no advancement or payment by any
Secondary Indemnitor on behalf of any such Specified Indemnitee
with respect to any Covered Claim for which any such Specified
Indemnitee has sought indemnification from the Company shall affect
the foregoing and any such Secondary Indemnitor shall have a right
of contribution and/or subrogation to the extent of such
advancement or payment to all of the rights of recovery of such
Specified Indemnitee against the Company. Any amendment, repeal or
modification of this Section 4.16 shall not
adversely affect any right or protection of a Specified Indemnitee
or Secondary Indemnitor existing prior to such repeal or
modification.

 

Section
4.17. Rights and
Obligations of Transferees. No Stockholder shall Transfer
any Equity Securities except in compliance with the Securities Act,
the Charter (as defined in the Merger Agreement), any applicable
state or foreign securities Laws and this Agreement, or if such
Transfer would violate the Communications Act or FCC Regulations
and such Stockholder has been so advised by the Company. Without
limiting the generality of the foregoing, no such Transfer shall be
made or recognized in the books and records of the Company if such
Transfer would result in a violation of the Communications Act or
FCC Regulations. Any Transfers in violation of this Agreement shall
be null and void.

 

[Remainder
of page intentionally left blank]

 

 

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this
Stockholders’ Agreement to be executed effective as of the
date set forth in the first paragraph hereof.

 

	

 

	
FUSION CONNECT,
INC.

	

 

	

 

	

 

	

 

	

 

	
 

	
By:  

	
/

	

 

	

 

	

 

	
Name 

	

 

	

 

	

 

	

Title 

	

 

 

 

 

 

 

 

 

 

 

 

 

	

 

	
BCHI HOLDINGS,
LLC

	

 

	

 

	

 

	

 

	

 

	
 

	
By:  

	
 

	

 

	

 

	

 

	
Name 

	

 

	

 

	

 

	

Title 

	

 

 

 

 

 

 

 

 

 

 

	

 

	

FTI STOCKHOLDERS:

	

 

	

 

	

 

	

 

	

 

	
 

	
By:  

	
 

	

 

	
 

	
 

	
 

	

 

	
 

	

By:

	
 

	

 

	
 

	
 

	
 

	

 

	
 

	
By:	
 

	

 

	
 

	
 

	
 

	

 

	
 

	
By:	
 

	

 

	
 

	
 

	
 

	

 

	
 

	
By:	
 

	

 

	
 

	
 

	
 

	

 

	
 

	
By:	
 

	

 

	
 

	
 

	
 

	

 

	
 

	
By:	
 

	

 

	
 

	
 

	
 

	

 

	
 

	
By:	
 

	

 

 

 

 

 

 

Schedule I--Stockholder Information

 

	

Stockholder

	

Equity Securities

	

Notice Information

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

 

 

 

 

 

 

 

 

EXHIBIT A

 

FORM
OF JOINDER TO

 

STOCKHOLDERS’ AGREEMENT

 

This
JOINDER to the Stockholders’ Agreement, dated as of
__________, 2018 (the “Stockholders’
Agreement”), of Fusion Connect, Inc., a Delaware
corporation (the “Company”), BCHI Holdings,
LLC, a Georgia limited liability company (“Holding LLC”) and the
other Persons set forth on Schedule I of the
Stockholders’ Agreement (the “Initial FTI
Stockholders”) is executed on behalf of the
undersigned (“FTI
Stockholder”), effective as of the date set forth on
the signature page below, with reference to the following
facts:

 

A.           Capitalized
terms used herein but not otherwise defined shall have the meanings
set forth in the Stockholders’ Agreement.

 

B.           FTI
Stockholder is, as of the date set forth below, an FTI
Director.

 

NOW,
THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned
hereby agrees as follows:

 

1.           Agreement
to be Bound. FTI Stockholder hereby agrees that upon
execution of this Joinder, FTI Stockholder shall become a party to
the Stockholders’ Agreement as an “FTI
Stockholder” and shall be fully bound by, and subject to, all
of the covenants, terms and conditions of the Stockholders’
Agreement applicable to FTI Stockholder.

 

2.           Equity
Securities. As of the date of this Agreement, the FTI
Stockholder owns [INSERT AMOUNT AND TYPE OF COMPANY EQUITY
SECURITIES OWNED BY STOCKHOLDER.]

 

3.           Counterparts.
This Joinder may be executed in separate counterparts each of which
shall be an original and all of which taken together shall
constitute one and the same agreement.

 

4.           Notices.
For purposes of Section
4.6 of the Stockholders’ Agreement, all notices,
demands or other communications to FTI Stockholder shall be
directed to FTI Stockholder’s address set forth below FTI
Stockholder’s signature below.

 

 

 

[Signature Page Follows]

 

 

 

 

IN WITNESS WHEREOF, Stockholder has
executed this Joinder effective as of the date set forth
below.

 

	

 

	
FTI
STOCKHOLDER:

	

 

	

 

	

 

	

 

	

 

	
 

	
By:  

	
 

	

 

	

 

	

Name:  

	
 

	

 

	

 

	

Title:  

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

ADDRESS:

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

 

	

Date:

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