FUSION TELECOMMUNICATIONS INTERNATIONAL INC (Form: 8-K/A, Received: 01/07/2014 11:58:08)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K/A1

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) January 6, 2014 (December 27, 2013)

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-32421	58-2342021
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

420 Lexington Avenue, Suite 1718 New York, NY	10170
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code:

(212) 201-2400

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

EXPLANATORY NOTE: On January 6, 2013, the registrant filed a Current Report on Form 8-K under Items 2.01, 2.03, 1.01, 3.02 and 5.03. This Amendment No. 1 to such Current Report, which is set forth in its entirety, is filed to include the exhibits referenced under Item 9.01, below, and to make reference to such exhibits within the body of this Amendment to Current Report.

Item 2.01

Completion of Acquisition or Disposition of Assets.

Acquisition of Assets

On December 31, 2013, Fusion Telecommunications International, Inc. (“ Fusion ”) and its indirect wholly owned subsidiary, Fusion BVX LLC (“ FBVX ”, and collectively with FBVX and Fusion’s other subsidiaries, the " Company "), completed the acquisition of substantially all of the cloud services assets (the “ Acquired Assets ”) used by BroadvoxGO!, LLC and its affiliate Cypress Communications, LLC (collectively, “ Sellers ”) in the operation of their cloud services division (the “ Acquired Business ”). A definitive agreement to purchase the Acquired Assets and assume substantially all of the on-going liabilities of the Acquired Business incurred in the ordinary course of business was entered into on August 30, 2013, and amended on November 15, 2013 and December 16, 2013 (the “ BVX Purchase Agreement ”), and execution of the Purchase Agreement was initially reported by Fusion in a Current Report on Form 8-K filed on September 4, 2013.

For the nine months ended September 30, 2013, the Sellers’ cloud services division, which provides cloud-based voice, unified communications and cloud connectivity services, generated $24.5 million in revenue (unaudited), over 90% of which is monthly recurring, and approximately $3.1 million in adjusted EBITDA. It is anticipated that the Sellers’ cloud services assets will be integrated into Fusion’s NBS Business Services division. For the year ended December 31, 2012, the Acquired Business generated revenues of $30.3 million and had a net loss of $7.9 million.

In accordance with the terms of the BVX Purchase Agreement, the Company purchased the Acquired Assets, and assumed substantially all of the on-going liabilities of the on-going operation of the Acquired Business for an aggregate purchase price of $32.1 million (the “ Purchase Price ”). The Purchase Price was paid in cash at the closing (less the $1 million deposit previously delivered to the Sellers). In accordance with the terms of the BVX Purchase Agreement, the Purchase Price is expected to be adjusted on or before February 14, 2014, based on certain working capital measurements described in the BVX Purchase Agreement, and $3.21 million of the Purchase Price is being held in escrow for a period of up to one year as collateral to secure the accuracy of the sellers’ representations, warranties and covenants contained in the BVX Purchase Agreement.

The BVX Purchase Agreement contemplates that for a transition period following completion of the acquisition of the Acquired Assets, cooperation and interaction between the Company and Sellers will be necessary in order to provide for a smooth assimilation of the Acquired Assets into the Company’s operations. In order to facilitate that assimilation and transition Fusion, FBVX and Sellers entered into a Transitional Services Agreement, governing the provision and receipt of certain services between the Company and Sellers, and covering a range of topics including the Company’s use of financial and administrative systems owned by the Sellers; the marketing of services offered by the Company by sales representatives of Sellers; and the Company’s use of certain of Sellers’ office facilities and employees. In addition, at closing (a) Network Billing Systems, LLC, a subsidiary of Fusion (“ NBS ”), and Sellers entered into a Master Wholesale Service Agreement governing Sellers providing the Company with wholesale SIP-based domestic VOIP termination services and (b) FBVX and Sellers entered into a Trademark License Agreement to allow the Company to use the “Broadvox” name during a limited period in order to facilitate transition of the Acquired Assets to the Company’s operations.

The Purchase Price was largely financed through the issuance by (a) Fusion NBS Acquisition Corp. (“ FNAC ”), a wholly-owned subsidiary of Fusion, of $25 million of senior notes (see Item 2.03 – “Sale of Senior Notes and Related Transactions” below) and (b) Fusion of investment units consisting of Series B-2 Preferred Stock and warrants for gross proceeds of $16.4 million (see Item 3.02 – “Sale of Series B-2 Preferred Stock and Warrants” below).

The foregoing summary of the terms and conditions the of the BVX Purchase Agreement, the Transition Service Agreement and the Trademark License Agreement are qualified in their entirety by reference to the full text of such documents, which are filed as Exhibits 10.77, 10.79 and 10.80 on the Company’s Current Reports on Form 8-K filed on September 4, 2013, Form 8-K/A filed on November 21, 2013 and Form 8-K/A filed on December 19, 2013, respectively, and Exhibits 10.93, 10.94, 10.95 and 10.96 filed herein.

Item 2.03

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

Sale of Senior Notes and Related Transactions

Contemporaneously with the completion of the acquisition of the Acquired Assets on December 31, 2013, Fusion, FNAC, FBVX and NBS entered into, and consummated the transactions contemplated by, an Amended and Restated Securities Purchase Agreement and Security Agreement (the Restated Purchase Agreement ”) with Praesidian Capital Opportunity Fund III, LP, Praesidian Capital Opportunity Fund III-A, LP, Plexus Fund II, L.P. (collectively, the “ Original Lenders ”), Plexus Fund III, L.P., Plexus Fund QP III, L.P. and United Insurance Company of America (collectively, the “ New Lenders ” and together with the Original Lenders, the “ Lenders ”). Fusion, FNAC, NBS and the Original Lenders are parties to the Securities Purchase Agreement and Security Agreement dated October 29, 2012, as amended (the “ Original Purchase Agreement ”), pursuant to which the Company sold the Original Lenders the Company’s Series A, Series B and Series C senior notes in the aggregate principal amount of $17.0 million (the “ Original Notes ”).

Under the Restated Purchase Agreement, (a) FNAC sold the Lenders its five-year Series D senior notes (the “ Series D Notes ” and together with the “ Original Notes ”, the “ Notes ”) in the aggregate principal amount of $25 million, bearing interest at the rate of 11.15% annually, (b) changed the interest rate on the Original Notes to a rate of 11.15% per annum and (c) extended the maturity date of the Original Notes to December 31, 2018.

Each of the Series D Notes provides for the payment of interest on a monthly basis commencing January 31, 2014. Principal on the Series D Notes is due and payable in monthly installments of $31,157 beginning on the January 31, 2014 and continuing through December 31, 2014, and $61,067 beginning January 31, 2015, with the remaining principal due and payable December 31, 2018. As amended (a) the Series A Notes provide for monthly principal payments in the amount of $52,083 beginning September 30, 2013 and through December 31, 2013, $29,027 beginning January 31, 2014 through December 31, 2014 and $41,017 beginning January 31, 2015, with the outstanding principal balance being due at maturity and (b) the outstanding principal balance of the Series B Notes and Series C Notes is due and payable at maturity.

The obligations to the Lenders are secured by first priority security interests on all of the assets of FNAC, FBVX and NBS, as well as the capital stock of each of Fusion’s subsidiaries, and by second priority security interests in Fusion’s accounts receivable and other assets. In addition, subject to limited exceptions, Fusion, FBVX and NBS (and hereafter created subsidiaries of each) have guaranteed FNAC’s obligations under the Restated Purchase Agreement, including FNAC’s obligation to repay the Notes.

The Restated Purchase Agreement contains a number of affirmative and negative covenants, including but not limited to, restrictions on paying indebtedness subordinate to the Notes, incurring additional indebtedness, making capital expenditures, dividend payments and cash distributions by subsidiaries. In addition (a) Fusion was required to place $3 million into an escrow account controlled by the Lenders until such time as certain state regulatory approvals are obtained and (b) Fusion is required to maintain a minimum unencumbered cash bank balance of no less than $1 million (which is included in the $3 million described in the preceding clause during the time such amount is being held in escrow) at all times while the Notes are outstanding. The Restated Purchase Agreement also requires on-going compliance with various financial covenants, including leverage ratio, fixed charge coverage ratio and minimum levels of earnings before interest, taxes, depreciation and amortization. Failure to comply with any of the restrictive or financial covenants could result in an event of default and accelerated demand for repayment of the Notes.

In connection with the sale of the Series D Notes to the Lenders, Fusion issued a nominal warrant to the Lenders to purchase 23,091,500 shares of Fusion Common Stock (the “ Lenders’ Warrants ”). The Lenders’ Warrants are exercisable from the date of issuance until December 31, 2023, at an exercise price of $.01 per share. Fusion has agreed to pay the exercise price of the Lenders’ Warrant on behalf of the Lenders at the time of exercise. Under certain circumstances and commencing upon the date the Series D Notes are repaid, Fusion may be required to repurchase the Lenders’ Warrants or the shares issued upon exercise of the Lenders’ Warrants at a repurchase price based upon the formulas set forth therein. The Company also paid the Lenders a transaction fee of $500,000 in connection with the Restated Purchase Agreement. The Company previously issued the Original Lenders similar warrants to purchase an aggregate of 13,325,000 shares of Fusion’s commons stock in connection with the Original Purchase Agreement.

In conjunction with the execution of the Original Purchase Agreement, the Company and the Original Lenders also entered into a series of ancillary agreements relating to, among other things, securing the Original Lenders’ right to repayment of the Original Notes, the Original Lenders’ right to receive certain financial information about the Company and access to the Company’s facilities and management, and establishing priority as to payments and to security among the Original Lenders and other creditors of the Company (the “ Original Ancillary Agreements ”). At the time of Closing of the transactions contemplated by the Restated Purchase Agreement, the Company and the New Lenders entered into a series of agreement amending or supplementing the Original Ancillary Agreements so as to provide the New Lenders with the same basic rights and protections afforded to the Original Lenders under the Original Ancillary Agreements (the “ New Ancillary Agreements ”).

The foregoing summaries of the terms of the Original Purchase Agreement, the Original Notes and and the Original Ancillary Agreements are qualified in their entirety by the full text of each of such documents, which are filed as Exhibits to Fusion’s Current Report on Form 8-K filed on November 2, 2012.

The foregoing summaries of the terms of the Restated Purchase Agreement, the Series C Notes, the Series D Notes and the Lenders’ Warrants are qualified in their entirety by the full text of each of such documents, which are filed as Exhibits 10.86, 10.85, 10.88 and 10.91, respectively, to this Report.

Item 1.01

Entry into a Material Definitive Agreement.

See discussions under Items 2.01, 2.03 and 3.02 for information concerning material agreements entered into in connection with Fusion’s (a) acquisition of the Acquired Assets, (b) sale of Series D senior notes and related transactions and (b) sale of Series B-2 Preferred Stock and Warrants.

Item 3.02

Sales of Unregistered Securities.

Sale of Series B-2 Preferred Stock and Warrants

On December 31, 2013, the Company issued to a total of 82 accredited investors (the “ Investors ”), an aggregate of 18,480 shares of its newly designated Series B-2 Cumulative Convertible Preferred Stock, par value $0.01 per share (the “ Series B-2 Preferred Stock ”) and (b) Warrants (the “ Investor Warrants ”) to purchase 59,136,000 shares of the Company’s Common Stock (the “ Warrant Shares ” and together with the Series B-2 Preferred Stock, the “ Offering ”). The Offering included the issuance of 2,052 shares of Series B-2 Preferred Stock and Investor Warrants to purchase 6,566,400 Warrant Shares, upon the conversion of $2,052,000 in indebtedness of the Company, including the conversion of $2,000,000 of indebtedness by Marvin Rosen, Fusion’s Chairman of the Board. Gross cash proceeds of the Offering were $16,428,000.

Each share of Series B-2 Preferred Stock has a Stated Value of $1,000, and is convertible into shares of the Company’s Common Stock at a conversion price of $0.10 per share (the “ Preferred Conversion Price ”), subject to adjustment. Subject to the other terms of the Series B-2 Preferred Stock, the Series B-2 Preferred Stock sold to the Investors is convertible into an aggregate of 184,800,000 shares of the Company’s Common Stock (the “ Conversion Shares ”).

The Investor Warrants may be exercised at any time following the Share Authorization Date (as defined below), for a number of Warrant Shares that is equal to 40% of the Stated Value divided by one hundred and twenty 125% of the Preferred Conversion Price, as adjusted for stock splits, combinations and reclassifications (the “ Initial Warrant Exercise Price ”). Each Investor Warrant will be exercisable at the Investor Warrant Exercise Price for a five-year term commencing on the date of issuance.

The Series B-2 Preferred Stock may not be converted, and the Investor Warrants may not be exercised, until the effective date of an amendment to the Company’s Certificate of Incorporation increasing the number of authorized shares of the Company’s Common Stock sufficient to permit all of the outstanding Series B-2 Preferred Stock and Investor Warrants to be converted or exercised, as the case may be, into the Company’s Common Stock (the “ Share Authorization Date ”). The Company has agreed that, on or prior to January 31, 2014, it will file a proxy statement with the Securities and Exchange Commission (“ SEC ”) seeking stockholder authorization to increase the number of authorized shares of Common Stock.

Subject to certain exceptions, the Company has also agreed that, within 45 days following the Share Authorization Date, it will file a registration statement with the SEC registering the resale of the Conversion Shares and the Investor Warrant Shares, and to use its reasonable commercial efforts to cause the registration statement to become effective not more than 150 days thereafter. The registration rights agreement with the Investors provides that in the event the Company fails to timely file the registration statement, fails to cause the registration statement to become effective within the time provided, or fails to provide Investors with an effective registration statement permitting re-sales by the Investors, then as liquidated damages and not as a penalty, the Company is required to pay each Investor an amount equal to one percent (1%) of the aggregate amount invested by such Investor for each 30-day period or pro rata portion thereof following the date by which such registration statement should have been filed or become effective; provided, that the maximum payment to each Investor shall not exceed six percent (6%) of the aggregate amount invested by such Investor.

Commencing January 1, 2016, the Company has the right to force the conversion of the Series B-2 Preferred Stock into Common Stock at the Preferred Conversion Price; provided that the volume weighted average price for Fusion’s Common stock is at least $2.50 for ten (10) consecutive trading days. In addition, shares of Series B-2 Preferred Stock bear a cumulative six percent (6%) annual dividend payable quarterly in arrears, in cash or shares of Common Stock, at the option of the Company .

Holders of Series B-2 Preferred Stock have liquidation rights that are senior to that of holders of the Company’s outstanding Series A-1, A-2 and A-4 Preferred Stock, and holders of Series B-2 Preferred Stock are entitled to vote as one group with holders of Common Stock on all matters brought to a vote of holders of Common Stock (with each share of Series B-2 Preferred Stock being entitled to that number of votes into which the registered holder could have converted the Series B-2 Preferred Stock on the record date for the meeting at which the vote will be cast). However, holders of Common Stock will be entitled to vote as a class on all matters adversely affecting such class.

Each of the Investors represented that it was an “accredited investor” and was acquiring the securities for its own account, for investment purposes only and acknowledged that the securities were not registered under Federal or State securities laws and that the securities could not be transferred or disposed of absent such registration or the availability of an applicable exemption from registration. In addition, each certificate evidencing the securities bears or will bear a legend describing the restrictions on transferability under applicable law. No general solicitation or advertising was used in connection with the Offering. The securities were issued in reliance on the exemption from registration contained in Section 4(2) of the Securities Act of 1933, as amended, and the rules and regulations there under including Rule 506(b) of Regulation D.

The Company sold the Series B-2 Preferred Stock and Investor Warrants through its officers and directors, in conjunction with the assistance of certain select broker-dealers, each of which is registered as such with the Financial Industry Regulatory Association. The Company paid aggregate cash compensation to the broker-dealers of $0.7 million, and issued or is obligated to issue warrants to the broker-dealers or their respective designees to purchase 4,386,500 shares of the Company’s Common Stock.

The material terms of the Series B-2 Preferred Stock are summarized above in this Item 3.02. Such summary is qualified in its entirety by reference to the Certificate of Designations for the Series B-2 Preferred Stock in the form filed as Exhibit 3.1(g) to this Report.

Item 5.03

Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

On December 27, 2013, the Company filed a Certificate of Designations with the Secretary of State of Delaware, amending its Articles of Incorporation by creating, and designating 24,000 shares of previously undesignated preferred stock as, Series B-2 Cumulative Convertible Preferred Stock. The material terms of the Series B-2 Preferred Stock are summarized above under Item 3.02. Such summary is qualified in its entirety by reference to the Certificate of Designations for the Series B-2 Preferred Stock in the form filed as Exhibit 3.1 (g) to this Report .

Item 9.01

Financial Statements and Exhibits

(a)	Financial Statements of Business Acquired

The Company intends to amend this Current Report on 8-K to file the required financial statements within the time prescribed by this item.

(b) Pro Forma Financial Information

The Company intends to amend this Current Report on 8-K to file the required financial statements and pro forma financial information within the time prescribed by this item.

Not Applicable.

(d) Exhibits

The following Exhibits are furnished with this Report (the press releases furnished herewith as Exhibits 99.1 and 99.2 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, and are not incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing):

Exhibit No.		Description
3.1(g)		Certificate of Designations of Preferences, Rights and Limitations of Series B-2 Senior Convertible Preferred Stock
10.82		Form of Subscription Agreement
10.83		Form of Common Stock Purchase Warrant
10.84		Form of Registration Rights Agreement
10.85		Form of Series C Note
10.86		Amended and Restated Securities Purchase Agreement and Security Agreement dated December 31, 2013 by and among Fusion NBS Acquisition Corp., Fusion Telecommunications International, Inc., Network Billing Systems, LLC, Fusion BVX LLC, Praesidian Capital Opportunity Fund III, LP, Praesidian Capital Opportunity Fund III-A, LP, Plexus Fund II, L.P., Plexus Fund III, L.P., Plexus Fund QP III, L.P. and United Insurance Company Of America
10.87		First Amendment To Intercreditor Agreement dated as of December 31, 2013 by and among Prestige Capital Corporation, Praesidian Capital Opportunity Fund III, LP, Praesidian Capital Opportunity Fund III-A, LP, Plexus Fund II, L.P., Plexus Fund III QP, L.P., United Insurance Company of America, Fusion NBS Acquisition Corp., Fusion Telecommunications International, Inc., Network Billing Systems, LLC and Fusion BVX LLC
10.88		Form of Series D Note dated December 31, 2013
10.89		Form of Management Rights Letter dated December 31, 2013
10.90		Form of SBA Side Letter dated December 31, 2013
10.91		Form of Lenders’ Warrant dated December 31, 2013
10.92		Joinder Agreement dated as of December 31, 2013 by and among Fusion Telecommunications International, Inc., Fusion NBS Acquisition Corp., Fusion BVX LLC in favor of Praesidian Capital Opportunity Fund III, LP, Praesidian Capital Opportunity Fund III-A, LP, Plexus Fund II, L.P., Plexus Fund III, L.P., Plexus Fund QP III, L.P., and United Insurance Company Of America
10.93		Assignment and Assumption Agreement dated as of December 31, 2013 by and among BroadvoxGo!, LLC, Cypress Communications, LLC, Fusion Telecommunications International, Inc., and Fusion BVX, LLC
10.94		Bill of Sale dated as of December 31, 2013 delivered by BroadvoxGo!, LLC and Cypress Communications, LLC
10.95		Limited Trademark License Agreement dated as of December 31, 2013 by and among Broadvox, LLC; Fusion Telecommunications International, Inc. and Fusion BVX LLC
10.96		Transition Services Agreement by and among BroadvoxGO!, LLC, Cypress Communications, LLC, Fusion BVX LLC and Fusion Telecommunications International, Inc.
99.1		Press Release dated January 6, 2014 entitled “Fusion Acquires Broadvox’s Cloud Services Business”, filed as an Exhibit to the Company’s Current Report on Form 8-K filed on January 6, 2014 and incorporated herein by reference
99.2		Press Release dated January 6, 2014 entitled “Fusion Closes on Approximately $44.0 Million of Financing” filed as an Exhibit to the Company’s Current Report on Form 8-K filed on January 6, 2014 and incorporated herein by reference

Reconciliation to US GAAP

This Report includes certain non-GAAP financial measures. A "non-GAAP financial measure" is defined as a numerical measure of a company's financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets or statements of cash flow of the Company. Pursuant to the requirements of Regulation G, the Company has provided a reconciliation of non-GAAP financial measures to the most directly comparable financial measure in the accompanying tables.

The Company believes that EBITDA (earnings from continuing operations before interest, taxes, depreciation and amortization) is useful to investors because it is commonly used in the communications industry to evaluate companies on the basis of operating performance and leverage. The Company also believes that EBITDA provides investors with a measure of the Company's operational and financial progress that corresponds with the measurements used by management as a basis for allocating resources and making other operating decisions. Adjusted EBITDA provides an adjusted view of EBITDA that takes into account certain significant non-recurring transactions, if any, such as impairment losses and professional fees associated with pending acquisitions, which vary significantly between periods and are not recurring in nature, as well as certain recurring non-cash charges such as stock-based compensation. Although the Company uses adjusted EBITDA as one of several financial measures to assess its operating performance, its use is limited as it excludes certain significant operating expenses. EBITDA and adjusted EBITDA are not intended to represent cash flows for the period presented, nor have they been presented as an alternative to operating income or as an indicator of operating performance and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with Generally Accepted Accounting Principles (“GAAP”).

Broadvox Enterprise Services

Statement of Operations

For the Nine Months Ended September 30, 2013

(unaudited)

(in thousands)	2013
Revenues	$	24,503
Cost of revenues, exclusive of depreciation and
amortization, shown separately below		8,277
Gross profit		16,226
Depreciation and amortization		3,103


Selling general and administrative expenses		13,216
Total operating expenses		16,319
Operating loss		(93	)
Interest expense, net		(93	)
Net loss		(186	)

Broadvox Enterprise Services

Reconciliation of Net Loss to EBITDA and Adjusted EBITDA

For the Nine Months Ended September 30, 2013

(Unaudited)

(in thousands)	2013
Net loss	$	(186	)
Income from discontinued operations
Interest expense		93
Depreciation and amortization		3,103
EBITDA		3,010
Stock-based compensation expense		79
Adjusted EBITDA	$	3,089

Forward–Looking Statements

This report regarding the Company’s business and operations includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1996. Such statements consist of any statement other than a recitation of historical fact and can be identified by the use of forward-looking terminology such as “may,” “expect,” “anticipate,” “intend” or “estimate” or the negative thereof or other variations thereof or comparable terminology. The reader is cautioned that all forward-looking statements are speculative, and there are certain risks and uncertainties that could cause actual events or results to differ from those referred to in such forward-looking statements. This disclosure highlights some of the important risks regarding the Company’s business. The primary risk attributable to the Company is its ability to attract fresh and continued capital to execute its comprehensive business strategy. There may be additional risks associated with the integration of businesses following an acquisition, concentration of revenue from one source, competitors with broader product lines and greater resources, emergence into new markets, the termination of any of the Company’s significant contracts or partnerships, the Company’s ability to comply with its senior debt agreements, the Company’s inability to maintain working capital requirements to fund future operations, or the Company’s ability to attract and retain highly qualified management, technical and sales personnel, and the other factors identified by us from time to time in the Company’s filings with the SEC. However, the risks included should not be assumed to be the only things that could affect future performance. We may also be subject to disruptions, delays in collections, or facilities closures caused by potential or actual acts of terrorism or government security concerns.

All forward-looking statements included in this document are made as of the date hereof, based on information available to us as of the date thereof, and we assume no obligation to update any forward-looking statements.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report on Form 8-K to be signed on its behalf by the undersigned thereunto duly authorized.

	Fusion Telecommunications International, Inc.

January 7, 2014	By:	/s/ Gordon Hutchins, Jr.
		Gordon Hutchins, Jr.
		as President, Chief Operating Officer and Acting Chief Financial Officer

Exhibit 3.1(g)

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

FORM OF CERTIFICATE OF DESIGNATIONS OF PREFERENCES,

RIGHTS AND LIMITATIONS

SERIES B-2 SENIOR CUMULATIVE CONVERTIBLE PREFERRED STOCK

Pursuant to Section 151 of the Delaware General Corporation Law and Article Fourth Section 2 of the Certificate of Incorporation (as amended, the “ Certificate of Incorporation ” of Fusion Telecommunications International, Inc. (the “ Corporation ”), a corporation organized and existing under the laws of the State of Delaware, hereby certifies that the following resolution was duly adopted by the board of directors of the Corporation (the “ Board ”) effective as of December 26, 2013, pursuant to authority conferred upon the Board by the Certificate of Incorporation, which authorizes the issuance of up to ten million (10,000,000) shares of preferred stock, par value $.01 per share.

RESOLVED, that pursuant to authority expressly granted to and vested in the Board and pursuant to the provisions of the Certificate of Incorporation, the Board hereby creates a series of preferred stock, herein designated and authorized as the Series B-2 Senior Cumulative Convertible Preferred Stock, par value $0.01 per share, which shall consist of Twenty Four Thousand (24,000) of the ten million (10,000,000) shares of preferred stock (the Series B-2 Preferred Stock”) which the Corporation now has authority to issue, and the Board hereby fixes the powers, designations and preferences and the relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations and restrictions thereof as follows:

Section 1 . Definitions . For the purposes hereof, the following terms shall have the following meanings:

“ Acquiring Person ” has the meaning set forth in Section 7(c) hereof.

“ Board ” has the meaning set forth in the preamble hereof.

“ Business Day ” means any day on which the Common Stock may trade on a Trading Market, or, if not admitted for trading, any day other than a Saturday, Sunday or holiday on which banks in New York City are required or permitted to be closed.

“ Capital Stock“ means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however designated) of capital or capital stock of such Person and (ii) with respect to any Person that is not a corporation, any and all partnership, limited partnership, limited liability company or other equity interests of such Person.

“ Certificate of Incorporation ” has the meaning set forth in the Preamble hereof.

“ Change In Control ” has the meaning set forth in Section 7(c) hereof.

“ Closing Date ” means any day on which a closing of the Offering is conducted as and the proceeds from such closing are disbursed.

“ Commission ” means the Securities and Exchange Commission.

“ Common Stock " means the Corporation's common stock, par value $0.01 per share, and any Capital Stock for or into which such Common Stock hereafter is exchanged, converted, reclassified or recapitalized by the Corporation or pursuant to a Change of Control to which the Corporation is a party (or, at the election of the Acquiring Person, the Capital Stock of any Acquiring Person from and after the consummation of a Change of Control).

" Corporation " means Fusion Telecommunications International, Inc., a Delaware corporation (or, if, as, and when applicable, any Acquiring Person from and after the consummation of a Change of Control).

“ Company Conversion Notice ” has the meaning set forth in Section 6(d).

“ Company Conversion Right ” has the meaning set forth in Section 6(d).

“ Conversion Date ” has the meaning set forth in Section 6(a).

“ Conversion Shares ” means, collectively, the shares of Common Stock into which the shares of Series B-2 Preferred Stock are convertible in accordance with the terms hereof.

“ Conversion Shares Registration Statement ” means a registration statement that meets the requirements of the Registration Rights Agreement and registers the resale of all Conversion Shares by the Holder, who shall be named as a “selling stockholder” thereunder, all as provided in the Registration Rights Agreement.

“ Effective Date ” means the date that the Conversion Shares Registration Statement, if any, is declared effective by the Commission.

“ Escrow Agent ” means Bank of New York or any successor escrow agent for the Offering.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Final Closing ” means the Closing Date after which the Corporation ceases to offer for sale the Series B-2 Preferred Stock.

“ Holder ” has the meaning set forth in Section 2 hereof.

“ Junior Securities ” means Capital Stock that, with respect to dividends and distributions upon Liquidation, ranks junior to the Series B-2 Preferred Stock, including but not limited to Common Stock and any other class or series of Capital Stock issued by the Corporation or any Subsidiary of the Corporation on or after the Original Issue Date, but excluding any Parity Securities and Senior Securities issued (i) to Holders of the Series B-2 Preferred Stock, (ii) with the approval of the Holders of a Majority of the Series B-2 Preferred Stock or (iii) upon the conversion, redemption or exercise of securities described in clause (i) or (ii) in accordance with the terms thereof.

“ Liquidation ” means the voluntary or involuntary liquidation, dissolution or winding up of the Corporation; provided , however , that a consolidation, merger or share exchange shall not be deemed a Liquidation, nor shall a sale, assignment, conveyance, transfer, lease or other disposition by the Corporation of all or substantially all of its assets, which does not involve a substantial distribution by the Corporation of cash or other property to the holders of Common Stock, be deemed to be a Liquidation.

" Majority of the Series B-2 Preferred Stock " means more than fifty (50%) percent of the then outstanding shares of the Series B-2 Preferred Stock.

“ Memorandum ” means the Corporation’s Private Placement Memorandum dated December 11, 2013

“ Offering ” means the Corporation’s private offering of up to $20,000,000 in units of the Corporation consisting of Series B-2 Preferred Stock and Warrants, pursuant to the Memorandum, with an over-allotment option of up to $4,000,000.

“ Original Issue Date ” shall mean the date of the first issuance of any shares of the Series B-2 Preferred Stock regardless of the number of transfers of any particular shares of Series B-2 Preferred Stock and regardless of the number of certificates which may be issued to evidence such Series B-2 Preferred Stock.

" Parity Securities " means any class or series of Capital Stock that, with respect to dividends or distributions upon Liquidation, is pari passu with all Series B-2 Preferred Stock. For the avoidance of doubt, each series of Series B-2 Preferred Shares is a Parity Security with respect to each other series of Series B-2 Preferred Shares.

“ Person ” means a corporation, an association, a partnership, a limited liability company, a business association, an individual, a government or political subdivision thereof or a governmental agency.

" Parent " shall mean any corporation (other than the Acquiring Person) in an unbroken chain of corporations ending with the Acquiring Person, provided each corporation in the unbroken chain (other than the Acquiring Person) owns, at the time of the determination, stock possessing fifty (50%) percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

“ Preferred Conversion Rate ” has the meaning set forth in Section 6(a).

“ Registration Rights Agreement ” means the Registration Rights Agreement, dated as of the Closing Date, to which the Corporation and the original Holders are parties, as amended, modified or supplemented from time to time in accordance with its terms.

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

“Senior Securities " means any class or series of Capital Stock that, with respect to dividends or distributions upon Liquidation, ranks senior to the Series B-2 Preferred Stock.

“ Series B-2 Preferred Stock ” shall have the meaning set forth in Section 2.

“ Share Authorization Date ” shall mean the effective date of the amendment to the Corporation’s Certificate of Incorporation filed with Secretary of State of the State of Delaware increasing the number of authorized shares of the Corporation’s Common Stock to such amount as shall permit all of the outstanding shares of Series B-2 Preferred Stock to be converted and all outstanding Warrants to be exercised into the Corporation’s Common Stock.

“ Stated Value ” is an amount equal to one thousand dollars ($1,000) per share of the Series B-2 Preferred Stock plus any accrued and unpaid dividends, whether or not declared and whether or not earnings are available in respect of such dividends. In the event the Corporation shall declare a distribution on the Common Stock payable in securities or property other than cash, the value of such securities or property will be the fair market value. Any securities shall be valued as follows: (i) if traded on a Trading Market, the value shall be deemed to be the VWAP over the ten (10) Trading Days immediately prior to the period ending three (3) calendar days prior to such declaration; or (ii) if the Common Stock is not then listed or quoted on a Trading Market and if prices for the Common Stock are then reported in the "OTC Markets Pink Sheets" published by OTC Markets (or a similar organization or agency succeeding to its functions of reporting prices), the VWAP of the five most recent bid prices per share of the Common Stock so reported; or (ii) in all other cases, the fair market value of a share of Common Stock as determined in good faith by the Corporation’s Board.

“ Subsidiary " shall mean any corporation at least fifty (50%) percent of whose outstanding voting stock shall at the time be owned directly or indirectly by the Acquiring Person or by one or more Subsidiaries.

“ Subscription Agreement ” shall mean the subscription agreement by which the initial Holders agreed to purchase the Units from the Company and the Company agreed to sell the Units to the Holders pursuant to the Offering.

“ Trading Day ” means a day on which the Common Stock is traded on a Trading Market.

“ Trading Market ” means the principal U.S. national securities exchange (as defined in the Exchange Act) on which the Common Stock is then listed or quoted for trading on the date in question, including, without limitation, the NASDAQ/OMX, NYSE/Euronext, BATS, or if such Common stock is not listed or quoted on any of the foregoing, then the OTCBB, OTCQB or such other over the counter market in which such Common Stock is principally traded.

“ Transaction Documents ” shall have the meaning set forth in the Subscription Agreement.

“ Unit ” means the unit consisting of one share of Series B-2 Preferred Stock and one Warrant.

“ VWAP ” means, means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. New York City time to 4:00 p.m. New York City time); (b) if the Common Stock is not then listed or quoted on a Trading Market and if prices for the Common Stock are then reported in the "OTC Markets Pink Sheets" published by OTC Markets (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (c) in all other cases, the fair market value of a share of Common Stock as determined in good faith by the Corporation’s Board.

“ Warrant(s) ” means the warrants included in the Units being sold in the Offering.

“ Warrant Shares ” means the shares of Common Stock issuable upon exercise of the Warrants.

Section 2 . Designation, Amount and Par Value . The series of preferred stock created hereby shall be designated as the Corporation’s Series B-2 Senior Cumulative Convertible Preferred Stock (the “ Series B-2 Preferred Stock ”) and the number of shares so designated shall be Twenty Four Thousand (24,000) shares (which shall not be subject to increase without the consent of the registered holders of a Majority of the Series B-2 Preferred Stock (each a “ Holder ” and collectively, the “ Holders ”)). Each share of Series B-2 Preferred Stock shall have a par value of $.01 per share and a Stated Value of $1,000 per share.

Section 3 . Dividends . The Holders shall be entitled to receive and the Corporation shall pay, cumulative dividends at the rate per share (as a percentage of the Stated Value per share) of 6% per annum, payable quarterly on March 30, June 30, September 30 and December 31, beginning with March 31, 2014 and on any Conversion Date or redemption date pursuant to the terms hereunder (except that, if such date is not a Trading Day, the payment date shall be the next succeeding Trading Day) (“Dividend Payment Date”). The form of dividend payments to each Holder shall be made at the option of the Corporation in cash or shares of Common Stock which shall be valued solely for such purpose at the average of the VWAP for the ten Trading Days immediately prior to the Dividend Payment Date.

Section 4 . Voting Rights . The Holders shall have the following voting rights with respect to the Series B-2 Preferred Stock as set forth in this Section 4 and no other voting rights except as required by law:

(A) The Holders shall be entitled to vote along with holders of Common Stock on each matter submitted to a vote of stockholders (at a meeting of stockholders or by written consent in lieu of meeting). The number of votes that each Holder of shares of Series B-2 Preferred Stock shall be entitled to cast as a result of such Holder’s ownership of Series B-2 Preferred Stock shall be equal to the number of shares of Common Stock into which the outstanding shares of Series B-2 Preferred Stock may be converted by the Holder in accordance with the provision of Section 6(a) hereof on the record date for determining those security holders of the Corporation entitled to notice of and to vote on the matter submitted to stockholders.

(B) The consent of the Holders of at least a Majority of the Series B-2 Preferred Stock, voting separately as a single class with one vote per share, in person or by proxy, either in writing without a meeting or at an annual or a special meeting of such Holders called for the purpose, shall be necessary to:

(i) amend, alter or repeal, by way of merger or otherwise, any of the provisions of the Certificate of Incorporation, including this Certificate, or Bylaws of the Corporation so as to:

A. Change any of the rights, preferences or privileges of Holders. Without limiting the generality of the preceding sentence, such change includes any action that would:

1. Reduce the Dividend Rate on the Series B-2 Preferred Stock, or make such dividends non-cumulative, or defer the date from which dividends will accrue, or cancel accrued and unpaid dividends, or change the relative seniority rights of the Holders of Series B-2 Preferred Stock as to the payment of dividends in relation to the holders of any other Capital Stock of the Corporation;

2. Reduce the amount payable to the Holders of the Series B-2 Preferred Stock upon the voluntary or involuntary liquidation, dissolution, or winding up of the Corporation, or change the relative seniority of the liquidation preferences of the Holders of the Series B-2 Preferred Stock to the rights upon Liquidation of the holders of any other Capital Stock of the Corporation;

3. Make the Series B-2 Preferred Stock redeemable at the option of the Corporation other than in accordance with the terms of this Certificate.

B. Authorize, create or issue any shares of Parity Securities or Senior Securities (or amend the provisions of any existing class of Capital Stock to make such class of Capital Stock a class of Parity Securities or Senior Securities).

(ii) increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series B-2 Preferred Stock or amend any provisions of any Capital Stock so as to make such Capital Stock redeemable by the Corporation except as provided on the date hereof.

Section 5 . Liquidation . In the event of any Liquidation, after payment or provision for payment by the Corporation of the debts and other liabilities of the Corporation and the liquidation preference for any Senior Securities that rank senior to the Series B-2 Preferred Stock with respect to distributions upon Liquidation, each Holder shall be entitled to receive an amount in cash for each share of the then outstanding Series B-2 Preferred Stock held by such Holder equal to the greater of (a) the Stated Value per share plus accrued and unpaid dividends to and including the date full payment is tendered to the Holders with respect to such Liquidation, and (b) the amount the Holders would have received if the Holders had converted all outstanding shares of the Series B-2 Preferred Stock into Common Stock plus accrued and unpaid dividends in accordance with the provisions of Section 6(a) hereof, in each case as of the Business Day immediately preceding the date of such Liquidation (the “ Liquidation Preference ”) before any distribution shall be made to the holders of any Junior Securities (and any Senior Securities or Parity Securities that, with respect to distributions upon Liquidation, rank junior to the Series B-2 Preferred Stock) upon the Liquidation of the Corporation. In case the assets of the Corporation available for payment to the Holders are insufficient to pay the full outstanding shares of Parity Securities and Senior Securities that, with respect to distribution upon Liquidation, are pari passu with the Series B-2 Preferred Stock in the amounts to which the holders of such shares are entitled, then the entire assets of the Company available for payment to the Holders and to the holders of such Parity Securities and Senior Securities shall be distributed ratably among the Holders of the Series B-2 Preferred Stock and the holders of such Parity Securities and Senior Securities, based upon the aggregate amount due on such shares upon Liquidation. Written notice of any Liquidation of the Corporation, stating a payment date and the place where the distributable amounts shall be payable, shall be given by facsimile and overnight delivery not less than ten (10) calendar days prior to the payment date stated therein, to the Holders of record of the Series B-2 Preferred Stock, if any, at their respective addresses as the same shall appear on the books of the Corporation. Upon any Liquidation the Holders of the Series B-2 Preferred Stock shall have liquidation rights senior to the holders of the Corporation’s Series A-1 Preferred Stock, Series A-2 Preferred Stock and Series A-4 Preferred Stock.

Section 6 . Conversion .

a) Conversions at Option of Holder . On or after the Share Authorization Date, each share of Series B-2 Preferred Stock shall be, convertible by the Holder thereof into a number of Conversion Shares of the Corporation equal to the Stated Value of the Series B-2 Preferred Stock to be converted divided by $0.10, as adjusted for stock splits, combinations, and reclassifications (“ Preferred Conversion Price ”). Holders shall effect conversions by providing the Corporation at its principal office conversion notice in the form attached hereto as Annex A (a “ Notice of Conversion ”) as fully and originally executed by the Holder, together with the delivery by the Holder to the Corporation of the stock certificate(s) representing the number of shares of Series B-2 Preferred Stock so converted, with such stock certificates being duly endorsed in full for transfer to the Corporation or with an applicable stock power duly executed by the Holder in the manner and form as deemed reasonable by the transfer agent of the Common Stock. Each Notice of Conversion shall specify the number of shares of Series B-2 Preferred Stock to be converted, the number of shares of Series B-2 Preferred Stock owned prior to the conversion at issue, the number of shares of Series B-2 Preferred Stock owned subsequent to the conversion at issue, the stock certificate number and the shares of Series B-2 Preferred Stock represented thereby which are accompanying the Notice of Conversion, and the date on which such conversion is to be effected, which date may not be prior to three (3) Trading Days after the date the Holder delivers such Notice of Conversion and the applicable stock certificates to the Corporation (the “ Conversion Date ”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be three (3) Trading Days immediately following the date that such Notice of Conversion and applicable stock certificates are delivered to the Corporation.

b) Beneficial Ownership Limitation . The Corporation shall not effect any conversion of the Series B-2 Preferred Stock, and the Holder shall not have the right to convert any portion of the Series B-2 Preferred Stock to the extent that after giving effect to such conversion, the Holder (together with the Holder’s affiliates), as set forth on the applicable Notice of Conversion, would beneficially own in excess of 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to such conversion. For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its affiliates shall include the number of shares of Common Stock issuable upon conversion of the Series B-2 Preferred Stock with respect to which the determination of such sentence is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (A) conversion of the remaining, non-converted shares of Series B-2 Preferred Stock beneficially owned by the Holder or any of its affiliates, so long as such shares of Series B-2 Preferred Stock are not convertible within sixty (60) days from the date of such determination, and (B) exercise or conversion of the unexercised or non-converted portion of any other securities of the Corporation (including the Warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its affiliates, so long as such other securities of the Corporation are not exercisable nor convertible within sixty (60) days from the date of such determination. For purposes of this Section 6(b), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. For purposes of this Section 6(b), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in the most recent of the following: (A) the Corporation’s most recent annual or quarterly periodic report filed with the Commission under the Exchange Act; (B) a more recent public announcement by the Corporation; or (C) any other written notice by the Corporation or the Corporation’s transfer agent setting forth the number of shares of Common Stock outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Corporation, including the Series B-2 Preferred Stock, by the Holder or its affiliates since the date as of which such number of outstanding shares of Common Stock was publicly reported by the Corporation. The provisions of this Section 6(b) may be waived by the Holder upon, at the election of the Holder, not less than sixty one (61) days’ prior notice to the Corporation, and the provisions of this Section 6(b) shall continue to apply until such 61 st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver).

c) Mechanics of Conversion

(A) Delivery of Certificate Upon Conversion . At all times after the Share Authorization Date, the Corporation shall deliver to the Holder, not later than three (3) Trading Days after each Conversion Date (the “ Share Delivery Date ”): (1) a certificate or certificates representing the number of Conversion Shares being acquired upon the conversion of shares of Series B-2 Preferred Stock, and (2) either (1) a bank check in the amount of accrued and unpaid dividends (if the Corporation has elected or is required to pay accrued dividends in cash) or (2) such number of additional shares of Common Stock equal to (W) the amount of accrued and unpaid dividends divided by (X) the Preferred Conversion Price. At the option of the Holder, with such Holder's express written consent, the Company shall deliver unregistered Common Stock after the Share Authorization Date but prior to the Effective Date of the Registration Statement. At any time after the Effective Date of the Registration Statement, the Company shall deliver the Conversion Shares to Holder electronically to Holder’s applicable account at the Depository Trust Company.

(B)	Reservation of Shares Issuable Upon Conversion .

(1) At all times after the Share Authorization Date, the Corporation covenants that it will reserve and keep available out of its authorized and unissued shares of Common Stock solely for the purpose of issuance upon conversion of the Series B-2 Preferred Stock, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of persons other than the Holders, not less than such number of shares of the Common Stock as shall (subject to any additional requirements of the Corporation as to reservation of such shares set forth in the Subscription Agreement) be issuable (taking into account the adjustments and restrictions of Section 7) upon the conversion of all outstanding shares of Series B-2 Preferred Stock. The Corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly and validly authorized, issued and fully paid, and nonassessable.

(2) The Series B-2 Preferred Stock shall not be converted at any time prior to the Share Authorization Date.

(C) Fractional Shares . Upon a conversion hereunder, the Corporation shall not be required to issue stock certificates representing fractions of shares of the Common Stock. The number of Conversion Shares to be issued upon conversion of the Series B-2 Preferred Stock shall be rounded up or down to the nearest whole Conversion Share.

(D) Transfer Taxes . The issuance of certificates for shares of the Common Stock on conversion of the Series B-2 Preferred Stock shall be made without charge to the Holders thereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificate, provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of such shares of Series B-2 Preferred Stock so converted and the Corporation shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid.

(E) Holder of Record . Each conversion of Series B-2 Preferred Stock shall be deemed to have been effected immediately before the close of business on the Business Day on which the Conversion Notice is delivered, and at such time the Person or Persons in whose name or names any certificate or certificates for shares of Common Stock shall be issuable upon such conversion as provided herein shall be deemed to have become the holder or holders of record thereof.

(F) Partial Conversion . If any conversion is for only part of the shares represented by the certificate surrendered, the Corporation shall send a new Series B-2 Preferred Stock certificate of like tenor via certified or registered mail or reputable overnight courier to such address specified by the Holder, calling in the aggregate on the face or faces thereof for the number of shares of Series B-2 Preferred Stock which have not been converted.

d) Conversion by the Corporation . At any time on or after (i) the Share Authorization Date and (ii) the shares of Common Stock have traded at an average VWAP for ten (10) Trading Days at a level at least equal to 250% of the Preferred Conversion Price, the Corporation shall have the right, without the consent of or any action by or on behalf of the Holder, to cause all but not a portion of the then outstanding Series B-2 Preferred Stock, to be converted into Common Stock at the applicable Preferred Conversion Price (the “ Company Conversion Right ”). In the event the Corporation elects to exercise the Company Conversion Right, the Corporation shall provide each Holder of the then outstanding Series B-2 Preferred Stock with written notice of its intention to cause the conversion of the Series B-2 Preferred Stock into Common Stock, along with (i) the effective date of the Company Conversion Right, (ii) the applicable Preferred Conversion Price and (iii) the number of Conversion Shares into which the Holder’s Series B-2 Preferred Stock is to be converted (the “ Company Conversion Notice ”). Upon delivery to the Holder of a certificate evidencing the number of Conversion Shares set forth in the Company Conversion Notice, the Holder’s Series B-2 Preferred Stock shall be automatically cancelled and shall thereafter cease to represent any entitlement or equity interest in the Corporation. The certificates evidencing the Series B-2 Preferred Stock shall contain a legend referencing the Company Conversion Right described in this Section.

Section 7 . Certain Adjustments .

a) Stock Dividends and Stock Splits . If the Corporation, at any time while the Series B-2 Preferred Stock is outstanding: (A) shall pay a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation pursuant to this Series B-2 Preferred Stock), (B) subdivide outstanding shares of Common Stock into a larger number of shares, (C) combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D) issue by reclassification of shares of the Common Stock any shares of Capital Stock of the Corporation, then the Preferred Conversion Price shall be adjusted by multiplying the then Preferred Conversion Price by a fraction the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to the event and the denominator of which shall be the number of shares of Common Stock outstanding immediately following the event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification.

b) Calculations . All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Corporation, and the description of any such shares of Common Stock shall be considered on issue or sale of Common Stock. For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) actually issued and outstanding.

c) Change of Control . In case the Corporation on or after the Original Issue Date is party to any (a) acquisition of the Corporation by means of merger or other form of corporate reorganization in which outstanding shares of the Corporation are exchanged for securities or other consideration issued, or caused to be issued, by the Acquiring Person, or its Parent, Subsidiary, herein defined, or affiliate, (b) a sale of all or substantially all of the assets of the Corporation (on a consolidated basis) in a single transaction or series of related transactions, (c) any other transaction or series of related transactions by the Corporation or relating to the Common Stock (including, without limitation, any stock purchase or tender or exchange offer) in which the power to cast the majority of the eligible votes at a meeting of the Corporation's stockholders at which directors are elected is transferred to a single entity or group acting in concert, or (d) a capital reorganization or reclassification of the Common Stock or other securities (other than a reorganization or reclassification in which the Common Stock or other securities are not converted into or exchanged for cash or other property, and, immediately after consummation of such transaction, the stockholders of the Corporation immediately prior to such transaction own the Common Stock, other securities or other voting stock of the Corporation in substantially the same proportions relative to each other as such stockholders owned immediately prior to such transaction), then, and in the case of each such transaction (each of which is referred to herein as " Change in Control "), proper provision shall be made so that, at the option of the Acquiring Person and upon fifteen (15) days’ notice to the Corporation and the Holder prior to the consummation of the Change of Control, either (i) the Acquiring Person expressly agrees to assume all of the Corporation’s obligations under the Series B-2 Preferred Stock or (ii) the Holder has fifteen (15) days in which to exercise its conversion rights under the Series B-2 Preferred Stock. If Holder does not exercise its rights during such fifteen (15) day period, all rights under the Series B-2 Preferred Stock shall terminate and the Series B-2 Preferred Stock shall be deemed cancelled. The Corporation, to the extent feasible, shall provide the Holder with thirty (30) days’ notice of the consummation of any Change of Control. Subject to the foregoing, on or before the closing date under the agreement entered into with an Acquiring Person resulting in a Change in Control, the Corporation, if applicable, shall deliver to the Holder written notice that the Acquiring Person has assumed such obligations. " Acquiring Person " means, in connection with any Change in Control, (i) the continuing or surviving corporation of a consolidation or merger with the Corporation (if other than the Corporation), (ii) the transferee of all or substantially all of the properties or assets of the Corporation, (iii) the corporation consolidating with or merging into the Corporation in a consolidation or merger in connection with which the Common Stock is changed into or exchanged for stock or other securities of any other Person or cash or any other property, (iv) the entity or group (other than Holder or any of its affiliates) acting in concert acquiring or possessing the power to cast the majority of the eligible votes at a meeting of the Corporation 's stockholders at which directors are elected, or, (v) in the case of a capital reorganization or reclassification, the Corporation, or (vi) at the Holder's election, any Person that (A) controls the Acquiring Person directly or indirectly through one or more intermediaries, (B) is required to include the Acquiring Person in the consolidated financial statements contained in such Parent's Annual Report on Form 10-K (if such Person is required to file such a report) or would be required to so include the Acquiring Person in such Person's consolidated financial statements if they were prepared in accordance with U.S. GAAP and (C) is not itself included in the consolidated financial statements of any other Person (other than its consolidated subsidiaries).

Section 8 . Redemption .

(a) Automatic Redemption . In addition to all other rights of the Holders, in the event the Corporation, directly or through any subsidiary, does not complete the acquisition of assets from BroadvoxGo! LLC and Cypress Communications, LLC within 10 days after the Final Closing of the Offering (“ Acquisition Failure ”), the Corporation shall automatically redeem all but not a portion of the Holder's shares of Series B-2 Preferred Stock at a price per share equal to the Stated Value (the “ Redemption Price ”), unless the Holder, at such Holder's option, notifies the Corporation within 30 days after the Acquisition Failure that the Holder elects to receive the Units rather than the Redemption Price.

(b) Mechanics of Refusal of Redemption at Option of Holder . Upon an Acquisition Failure and for a period 30 days thereafter, the Holder may require the Corporation to issue to the Holder all of the Holder's Series B-2 Preferred Stock subscribed for by such Holder by delivering written notice thereof by-hand, via facsimile or overnight courier (" Notice of Refusal of Redemption ") to the Company. The Company shall then be obligated to issue the Series B-2 Preferred Shares to the Holder within 10 business days from the date of delivery of the Notice of Refusal of Redemption.

Section 9 . Miscellaneous .

a) Notices . Any and all notices or other communications or deliveries to be provided by the Holders hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, sent by a nationally recognized overnight courier service, addressed to the Corporation, at 420 Lexington Avenue, Suite 1718, New York, NY 101070, Attn: President or such other address or facsimile number as the Corporation may specify for such purposes by notice to the Holders delivered in accordance with this Section. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, sent by a nationally recognized overnight courier service addressed to each Holder at the address of such Holder appearing on the books of the Corporation, or if no such address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earlier of (i) the second Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (ii) upon actual receipt by the party to whom such notice is required to be given.

b) Lost or Mutilated Preferred Stock Certificate . If a Holder’s Series B-2 Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Series B-2 Preferred Stock so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership thereof, and indemnity, if requested, all reasonably satisfactory to the Corporation.

c) Next Business Day . Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

d) Headings . The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designations and shall not be deemed to limit or affect any of the provisions hereof.

RESOLVED, FURTHER , that the Chief Executive Officer, President, any Vice-President, and the Secretary of the Corporation be and they hereby are authorized and directed to prepare and file a Certificate of Designation of Preferences, Rights and Limitations in accordance with the foregoing resolution and the provisions of Delaware law.

IN WITNESS WHEREOF, the undersigned have executed this Certificate this 27 th day of December, 2013.

	FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

	By:
		Gordon Hutchins Jr., President


	By:
		Philip Turits, Secretary

ANNEX A

NOTICE OF CONVERSION

(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF SERIES A SENIOR CUMULATIVE CONVERTIBLE PREFERRED STOCK)

The undersigned hereby elects to convert the number of shares of Series B-2 Senior Cumulative Convertible Preferred Stock (“ Series B-2 Preferred Stock ”) indicated below, into shares of common stock, par value $0.01 per share (the " Common Stock "), of Fusion Telecommunications International, Inc., a Delaware corporation (the " Corporation "), according to the conditions hereof, as of the date written below. If shares are to be issued in the name of a person other than undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Corporation in accordance therewith. No fee will be charged to the Holder for any conversion, except for such transfer taxes, if any.

Conversion calculations:

Date to Effect Conversion: _________________________________________________________
Number of shares of Common Stock owned prior to Conversion: ___________________________
Number of shares of Series B-2 Preferred Stock to be Converted: __________________________
Value of shares of Series B-2 Preferred Stock to be Converted: ____________________________
Number of shares of Common Stock to be Issued: _______________________________________
Certificate Number of Series B-2 Preferred Stock attached hereto: __________________________
Number of Shares of Series B-2 Preferred Stock represented by attached certificate: __________________ Number of shares of Series B-2 Preferred Stock subsequent to Conversion: ___________________



	[HOLDER] By:__________________________________ Name: Title:

Exhibit 10.82

Subscriber: _____________________________________________

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

SUBSCRIPTION AGREEMENT

This Subscription Agreement (the “ Subscription Agreement ”) is entered into by and between Fusion Telecommunications International, Inc., a Delaware corporation (the “ Company ” and/or “ Fusion ”), and the Subscriber(s) whose name appears on the signature page to this Subscription Agreement (the “ Subscriber ” and, together with other subscribers to the Offering (as hereinafter defined), “ Investors ”).

This Subscription Agreement is executed and delivered in connection with the offering of 20,000 units (the “ Offering ” and the “ Units ,” respectively) at $1,000 per Unit for gross Offering proceeds of $20,000,000, each Unit consisting of (i) one share of Series B-2 Senior Cumulative Convertible Preferred Stock of the Company with a stated value of $1,000 per share (“ Preferred Shares ”); and (ii) one warrant to purchase shares of common stock, par value $0.01 per share (the “ Common Stock ”) of the Company (the “ Warrant ” ) . There is no minimum offering to be sold. The Preferred Shares, the shares of Common Stock into which the Preferred Shares may be converted (“ Conversion Shares ”), the Warrants and the shares of Common Stock for which the Warrants are exercisable (the “ Warrant Shares ”) are collectively referred to herein as the “ Securities .” The Company reserves the right to increase the Offering by up to an additional 4,000 Units at its sole discretion, without notice to Investors or Subscribers. The Units shall be offered in minimum lots of $100,000, which may be reduced at the sole discretion of the Company without notice to Subscribers.

Each Preferred Share may be converted by the registered holder thereof at any time following the date that there are sufficient authorized but unissued shares of Common Stock available to permit (a) all of the then outstanding Preferred Shares to be converted into Conversion Shares and (b) all of the then outstanding Warrants to be exercised for Warrant Shares. The conversion price of the Preferred Shares shall be equal to the stated value of the Preferred Shares divided by $.10 (the “ Preferred Conversion Price ”).

The Company shall have the right without the consent of or action by the registered holders of the Preferred Shares, commencing on the second anniversary of the initial Closing date of this Offering and after the Share Authorization Date (as hereinafter defined), to cause the conversion of the Preferred Shares into Common Stock, at the Preferred Conversion Price, assuming the volume weighted average price of the Common Stock for a period of ten consecutive trading days has traded at a level of at least 250% of the Preferred Conversion Price.

Each Warrant will be exercisable at any time following the Share Authorization Date for a number of Warrant Shares that is equal to forty (40%) percent of the Stated Value divided by 125% of the Preferred Conversion Price, as adjusted for stock splits, combinations, reclassifications and the issuance of equity securities at a price less than the Warrant Exercise Price. Each Warrant will be exercisable at a price of 125% of the Preferred Conversion Price (the “ Warrant Exercise Price ”), for a five-year term commencing on the date of issuance; provided , however , that the Warrants may not be exercised prior to the Share Authorization Date.

The Preferred Shares may not be converted, and the Warrants may not be exercised, until the effective date of the amendment to the Company’s Certificate of Incorporation filed with Secretary of State of the State of Delaware increasing the number of authorized shares of the Company’s Common Stock to such amount as shall permit all of the outstanding shares of Series B-2 Preferred Stock and Warrants to be converted or exercised into the Company’s Common Stock (the “ Share Authorization Date ”). The Company shall promptly notify holders of the Preferred Shares and Warrants of the Share Authorization Date and shall file a Form 8-K with the SEC within two (2) business days following the Share Authorization Date. The Company shall file with the Securities and Exchange Commission (“ SEC ”), within thirty (30) days following the initial Closing of this Offering, a proxy statement with the SEC seeking stockholder authorization to increase the number of authorized shares of Common Stock to permit (a) all of the Preferred Shares to be converted and (b) all of the Warrants to be exercised (the “ Stockholder Approval ”); provided , however , that Fusion may defer the filing of the proxy or information statement for up to thirty (30) days if Fusion in good faith expects to complete its acquisition of assets from Broadvox/Cypress during such thirty (30) day period. While the Company believes it will obtain the requisite number of votes to approve Stockholder Approval for the increase in authorized shares, it has not obtained proxies from stockholders assuring approval at this time.

The Units are being offered to Investors by the Company and may be offered through selected selling agents as may be engaged by the Company (“ Selling Agents ”). The terms of the Offering and the Securities are more fully described in the Confidential Private Placement Memorandum dated December 11, 2013 (the “ Memorandum ”). The Company is offering the Units for sale on those terms on a “reasonable efforts” basis until all of the Units are sold or the Offering is withdrawn or terminated, whichever occurs first.

The Offering will commence on the date of the Memorandum and will continue for a period of 60 days or the earlier sale of all of the Units or the Company’s termination or withdrawal of the Offering (the “ Offering Period ”). Fusion may extend the Offering Period in its sole discretion, without notice to or consent of Investors, for two additional periods of 30 days each.

The Company may hold one or more closings at any time (each a “ Closing ”) in its sole discretion, but no earlier than two business days prior to the anticipated closing date of the Broadvox/Cypress asset acquisition . Following each Closing, the Company will file such disclosure of sales of Units as may be required under rules and regulations of the SEC.

The Company and one of the Selling Agents will appoint an escrow agent to hold all subscription funds in a non-interest bearing escrow account. In the event a prospective Investor’s subscription is not accepted for any reason, in the sole discretion of the Company, the escrow agent will return the purchase price to the prospective Investor without interest or deduction. The Company, a Selling Agent and the escrow agent will enter into an escrow agreement (the “ Escrow Agreement ”). The escrow agent shall not release the subscription funds to the Company more than two business days prior to the anticipated Broadvox/Cypress asset acquisition .

This Subscription Agreement, the Form of Purchaser Questionnaire, the Form of Warrant, the Form of Certificate of Designation for the Preferred Shares, and the Form of Registration Rights Agreement are attached to the Memorandum as Exhibits and are collectively referred to as the “ Transaction Documents ”).

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

A. General.

1.	Subscriber hereby subscribes for and agrees to purchase from the Company, and the Company agrees to sell to Subscriber, the dollar amount of Units set forth on the signature page hereof.

Subscriber herewith tenders to the Company the entire amount of the purchase price by check made payable to the order of “BNY Mellon, Escrow Agent for Fusion Telecommunications International, Inc.,” or Subscriber has paid the entire amount of the purchase price by wire transfer of immediately available funds to:

Bank Name : BNY Mellon, National Association

ABA Number: 043000261

Account Number: 0001108013

Account Name: Fusion Telecommunications Intl Inc., BNY Mellon, NA Escrow Agent

Re: Private Placement - (Subscriber’s Name)

3.	Subscriber herewith delivers to the Company a completed and signed Subscription Agreement and completed and signed Qualified Purchaser Questionnaire (“ Qualified Purchaser Questionnaire ”) for the purchase of the Units.

Such funds will be held for the Subscriber’s benefit. Subscriber will not be a stockholder until such time as Subscriber’s subscription is accepted by the Company and a Closing of the purchase and sale of the Units being subscribed for by Subscriber takes place. Until such time as Subscribers subscription is accepted or rejected, as the case may be, this subscription shall be irrevocable and Subscriber will not have access to its subscription funds.

In the event the Company in its sole discretion determines to offer Units with improved terms or conditions to any investor during the term of the Offering, each investor shall have the option but not the obligation to receive Units with such improved terms or conditions. The Company shall provide written notice to the investor setting forth the terms of the alternate securities, together with a form of election (the “ Election Form ”). Subscriber shall have a period of ten (10) business days to return the Election Form to the Company in order to choose the alternative securities. In the event the Subscriber does not return the Election Form to the Company within such ten (10) day period, the Subscriber shall be deemed to have confirmed the subscription to the original Offering.

A.1. Closing Conditions.

1.	The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

a.	this Subscription Agreement, the Qualified Purchaser Questionnaire and the Registration Rights Agreement shall have been duly executed and delivered to the Company;

b.	the accuracy in all material respects on the Closing of the representations and warranties of the Subscriber contained herein (unless as of a specific date therein);

c.	all obligations, covenants and agreements of each Subscriber required to be performed at or prior to the Closing shall have been performed;

no statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or Governmental Authority (as hereinafter defined) of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Subscription Agreement; and

no action, suit or proceeding before any arbitrator or any Governmental Authority shall have been commenced, and no investigation by any Governmental Authority shall have been threatened, against the Company or any Subscriber, or any of the officers, directors or affiliates of the Company or any Subscriber seeking to restrain, prevent or change the transactions contemplated by this Subscription Agreement, or seeking damages in connection with such transactions.

2.	The obligations of the Subscriber hereunder in connection with the Closing are subject to the following conditions being met:

a.	the stock certificates representing the Preferred Shares, the Warrants, the Registration Rights Agreement and the Escrow Agreement shall have been duly executed by the Company and delivered to the Subscriber;

b.	the closing conditions of the Broadvox/Cypress asset acquisition have been met by the Company and the sellers of the Broadvox/Cypress assets and the closing of such asset acquisition shall occur simultaneously with, or within two business days of, the Closing;

c.	the closing conditions of the debt financing for the Broadvox/Cypress asset acquisition have been met by the Company and the lenders to the financing and the closing of such financing shall occur simultaneously with, or within two business days of, the Closing;

d.	no defaults exist under the Company’s $16.5 million senior note facility;

e.	the accuracy in all material respects when made and on the Closing of the representations and warranties of the Company contained herein (unless as of a specific date therein);

f.	all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

as of the Closing date, trading in the Company’s Common Stock shall not have been suspended by the SEC or the OTCQB Marketplace, and, at any time prior to the date of the Closing, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any trading market or national stock exchange, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of each Subscriber, makes it impracticable or inadvisable to purchase the Securities at the Closing;

h.	a legal opinion of the Company’s counsel, dated as of the Closing Date, executed by such counsel and addressed to the subscribers and the selling agents;

i.	consent of the holders of Series A-1, A-2 and A-4 Preferred Stock to the issuance of the Series B-2 Preferred Stock;

no statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or Governmental Authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Subscription Agreement; and

B. Securities offered have not been registered under the Securities Act of 1933, as amended

Subscriber acknowledges that (i) the Securities have not been registered under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “ Securities Act ”), or the securities laws of any state; (ii) absent registration, any resale or other transfer of the Securities must be made in compliance with the Securities Act; (iii) the Securities are being offered for sale in reliance upon exemptions from registration contained in the Securities Act and applicable state securities laws; and (iv) the Company's reliance upon such exemption is based in part upon Subscriber's representations, warranties and agreements contained in this Subscription Agreement and in the Qualified Purchaser Questionnaire that Subscriber is also delivering to the Company.

C. Representations, Warranties, Acknowledgements and Agreements

1.	In order to induce the Company to accept this Subscription Agreement, Subscriber represents and warrants to, and acknowledges and covenants with, the Company as follows:

Subscriber understands that (i) this Subscription Agreement may be accepted or rejected in whole or in part by the Company in its sole and absolute discretion, and (ii) this Subscription Agreement shall survive Subscriber's death, disability or insolvency, except that Subscriber shall have no obligation in the event that this Subscription Agreement is rejected by the Company. In the event that the Company does not accept Subscriber's subscription, or if the Offering is terminated for any reason, Subscriber's subscription payment (or portion thereof, as the case may be) will be returned to Subscriber without interest or deduction.

Subscriber has carefully read this Subscription Agreement, the Qualified Purchaser Questionnaire, and the Memorandum, the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 (including, without limitation, the risks set forth under the heading “Risk Factors”) and the Company’s Reports on Form 8-K which are attached as exhibits to the Memorandum. In making the decision to invest in the Units, Subscriber has relied upon the information provided by the Company in the Memorandum (including the Exhibits thereto), as well as the SEC Documents (as hereinafter defined) and this Subscription Agreement (together with the Memorandum and the SEC Documents, the “ Offering Materials ”). Subscriber has been advised to discuss with his, her, or its counsel the representations, warranties and agreements which Subscriber is making by signing this Subscription Agreement, the applicable limitations upon Subscriber's resale of the Securities, and the investment, tax and legal consequences of this Subscription Agreement. No oral or written representations have been made and no oral or written information has been furnished to the Subscriber or his advisor(s) in connection herewith that were in any way inconsistent with the information set forth in the Offering Materials and Subscriber disclaims reliance on any statements made or information provided by the Company, the Selling Agent(s) or any of their respective employees, counsel or agents or any other person or entity in the course of Subscriber’s consideration of an investment in the Units other than those set forth in the Offering Materials.

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

c.	Subscriber understands that no federal or state agency has made any finding or determination regarding the fairness of the Offering, or any recommendation or endorsement of the Securities.

Subscriber is purchasing the Units for Subscriber's own account, with the intention of holding the Units for investment purposes, with no present intention of dividing or allowing others to participate in this investment or of reselling or otherwise participating, directly or indirectly, in a distribution of the Securities; and Subscriber agrees not to make any sale, transfer or other disposition of the Securities without registration under the Securities Act and applicable state securities laws unless counsel acceptable to the Company is of the opinion that such registration is not required. Subscriber is not acquiring the Securities, or any interest therein, on behalf of another person and Subscriber, if an entity, was not formed for the purpose of purchasing the Units.

e.	Subscriber's overall commitment to investments which are not readily marketable is not disproportionate to Subscriber's net worth, and Subscriber's investment in the Units will not cause such overall commitment to become excessive.

f.	Subscriber, if an individual, has adequate means of providing for his or her current needs and personal and family contingencies and has no need for liquidity in his or her investment in the Units.

Subscriber is an “Accredited Investor” as that term is defined in Rule 501(a) under Regulation D promulgated by the SEC under the Securities Act. Subscriber is financially able to bear the economic risk of this investment, including the ability to afford holding the Securities for an indefinite period or to afford a complete loss of this investment.

h.	The address shown on the signature page to this Subscription Agreement is Subscriber's principal residence if he or she is an individual, or its principal business address if a corporation or other entity.

Subscriber, together with any offeree representatives of Subscriber (as identified in the Qualified Purchaser Questionnaire) has such knowledge and experience in financial business matters as to be capable of evaluating the merits and risks of an investment in the Securities. Subscriber acknowledges that the Offering Materials may not contain all information that is necessary to make an investment decision with respect to the Company and the Units and that Subscriber must rely on his, her or its own examination of the Company and the terms and conditions of the Offering prior to making any investment decision with respect to the Units.

Subscriber has been given the opportunity to ask questions of and receive answers from the Company and its executive officers concerning the business and operations of the Company and the terms, provisions, and conditions of the Offering and to obtain any such additional information that Subscriber deems necessary or advisable to verify the accuracy of the information contained in the Offering Materials, or such other information as Subscriber desired in order to evaluate an investment in the Company; and Subscriber availed himself, herself or itself of such opportunity to the extent considered appropriate in order to evaluate the merits and risks of the proposed investment. To the extent that any such information has not been publicly disclosed, Subscriber agrees to keep all such information confidential unless required to be disclosed by a court or administrative body of competent jurisdiction or until such information is publicly disclosed by the Company.

k.	Subscriber has made an independent evaluation of the merits of the investment and acknowledges the highly speculative nature of an investment in the Units including, without limitation, the information under “Risk Factors” in the Memorandum.

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

l.	The information provided by Subscriber in the Qualified Purchaser Questionnaire is true, complete and accurate and Subscriber has duly executed and delivered such Qualified Purchaser Questionnaire and any applicable exhibits thereto.

Subscriber has taken no action that would give rise to any claim by any person for brokerage commissions, finders' fees or the like relating to this Subscription Agreement or the transactions contemplated hereby (other than commissions to be paid by the Company to the Selling Agent(s) or as otherwise described in the Offering Materials and, in turn, to be paid to its selected dealers).

Subscriber, the Investors other than Subscriber and the Company have entered into a Registration Rights Agreement, of even date hereof (the “ Registration Rights Agreement ”) which is the exclusive agreement between the Subscriber and the Company with respect to the Company’s obligation to register the Securities for resale; and, accordingly, Subscriber may have to hold the Securities indefinitely and it may not be possible for Subscriber to liquidate his, her or its investment in the Company at the time Subscriber desires to do so. Subscriber has been advised to refrain from purchasing the Securities unless he, she or it can afford a complete loss of his, her or its investment and bear the burden of such loss for an indefinite period of time.

o.	Subscriber, if an individual, is at least 21 years of age.

If at any time prior to issuance of the Securities to Subscriber, any representation or warranty of Subscriber shall no longer be true, Subscriber promptly shall give written notice thereof to the Company specifying which representations and warranties are not true and the reason therefor, whereupon Subscriber's subscription may be rejected by the Company in whole or in part.

The Subscriber represents that the amounts invested by it in the Company in the Offering were not and are not directly or indirectly derived from activities that contravene federal, state or international laws and regulations, including anti-money laundering laws and regulations. Federal regulations and Executive Orders administered by OFAC (as hereinafter defined) prohibit, among other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals. The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website at <http://www.treas.gov/ofac>. In addition, the programs administered by OFAC prohibit dealing with individuals or entities in certain countries regardless of whether such individuals or entities appear on the OFAC lists.

Notwithstanding the place where this Subscription Agreement may be executed by any of the parties hereto, all of the terms, provisions, and conditions hereof shall be construed in accordance with and governed by the laws of the State of New York, without giving effect to its conflict of laws principles. Any dispute arising out of or in connection with this Subscription Agreement or the Offering Materials shall be exclusively adjudicated before a court located in the City and County of New York and the parties hereto exclusively submit to the exclusive jurisdiction and venue of the state and local courts of the State of New York located in the City and County of New York and the U.S. District Court for the Southern District of New York with respect to any action or legal proceeding commenced by any party, and irrevocably waive any objection they now or hereafter may have respecting the venue of any action or proceeding brought in such a court or respecting the fact that such court is an inconvenient forum and Subscriber consents to the service of process in any such action or legal proceeding by means of registered or certified mail, return receipt requested, in care of the address set forth below or such other address as Subscriber shall furnish in writing to the Company.

Subscriber acknowledges that he, she or it understands the meaning and legal consequences of the representations, warranties and acknowledgments contained in this Subscription Agreement and in the Qualified Purchaser Questionnaire, and hereby agrees to indemnify and hold harmless the Company, and each of its stockholders, officers, directors, affiliates, controlling persons, agents and representatives, from and against any and all loss, damage, expense, claim, action, suit or proceeding (including the reasonable fees and expenses of legal counsel) as incurred arising out of or in any manner whatsoever connected with (i) a breach of any representation or warranty of Subscriber contained in this Subscription Agreement or in the Qualified Purchaser Questionnaire, (ii) any sale or distribution by Subscriber in violation of the Securities Act or any applicable state securities laws or (iii) any untrue statement of a material fact made by Subscriber and contained herein or in the Qualified Purchaser Questionnaire, or omission to state herein or in the Qualified Purchaser Questionnaire, a material fact necessary in order to make the statements contained herein or in the Qualified Purchaser Questionnaire, in light of the circumstances under which they were made, not misleading. Subscriber acknowledges that such damage could be substantial since (a) the Securities are being offered without registration under the Securities Act in reliance upon the exemption pursuant to Section 4(a)(2) and/or Regulation D of the Securities Act for transactions by an issuer not involving a public offering and, in various states, pursuant to exemptions from registration, (b) the availability of such exemptions is, in part, dependent upon the truthfulness and accuracy of the representations made by Subscriber herein and in its Qualified Purchaser Questionnaire, and (c) the Company will rely on such representations in accepting Subscriber's Subscription Agreement.

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

Subscriber is not subscribing for the Units as a result of or subsequent to any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, any seminar or meeting, or any solicitation of a subscription by a person not previously known to Subscriber in connection with investments in securities generally.

Unless otherwise indicated on a separate sheet of paper that details any such affiliation submitted by Subscriber to the Company along with this completed Subscription Agreement, Subscriber is not affiliated directly or indirectly with a member broker-dealer firm of the Financial Industry Regulatory Authority (“ FINRA”) as an employee, officer, director, partner or shareholder or as a relative or member of the same household of an employee, director, partner or shareholder of a FINRA member broker-dealer firm.

Subscriber represents that he, she or it has full power and authority (corporate, statutory or otherwise) to execute and deliver this Subscription Agreement and to purchase the Units. The execution, delivery and performance of this Subscription Agreement and the Qualified Purchaser Questionnaire will not: (i) violate, conflict with or result in a default under any provision of the Certificate or By-Laws (or analogous organizational documents), if any, of Subscriber; or (ii) violate or result in a violation of, or constitute a default (whether after the giving of notice, lapse of time or both) under, any provision of any law, regulation or rule, or any order of, or any restriction imposed by any court or other governmental agency applicable to Subscriber. This Subscription Agreement constitutes the legal, valid and binding obligation of Subscriber, enforceable against Subscriber in accordance with its terms except to the extent that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and subject to general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or at equity). This Subscription Agreement supersedes all prior arrangements or understandings with respect thereto, whether oral or written. The terms and conditions of this Subscription Agreement shall inure to the benefit of and be binding upon the parties and their respective successors, heirs and assigns.

w.	Subscriber understands that the Company intends to use the net proceeds from the Offering as set forth in the Memorandum to purchase the assets of BroadvoxGo! and Cypress Communications, LLC and for general working capital purposes.

x.	Subscriber understands and agrees that the Preferred Shares may not be converted, and the Warrants may not be exercised, until the Share Authorization Date.

2.	In order to induce Subscriber to execute and deliver this Subscription Agreement, the Company represents and warrants to, and covenants with, Subscriber as follows:

The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company is duly qualified to conduct business and is in good standing in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, and has all power and authority necessary to own or hold its properties, except where the failure to be so qualified or in good standing or have such power and authority, as the case may be, would not result in a material adverse effect on the Company or its operations.

The Company has full power and authority (corporate, statutory or otherwise) to execute and deliver this Subscription Agreement and to sell and deliver the certificates representing the Preferred Shares and Warrants and, after the Share Authorization Date, the Conversion Shares and Warrant Shares. The execution, delivery and performance of this Subscription Agreement and the issuance of the certificates representing the Preferred Shares and Warrants and, after the Share Authorization Date, the Conversion Shares and Warrant Shares will not: (i) violate, conflict with or result in a default under any provision of the Certificate or By-Laws of the Company; or (ii) violate or result in a violation of, or constitute a default (whether after the giving of notice, lapse of time or both) under any provision of any law, regulation or rule, or any order of, or any restriction imposed by any court or other governmental agency applicable to the Company. This Subscription Agreement constitutes the legal, valid and binding obligation of Subscriber, enforceable against the Company in accordance with its terms.

Neither the execution and delivery of, nor performance by the Company under, any of the Transaction Documents or the consummation of the transactions herein or therein contemplated conflicts with or violates, or will result in the creation or imposition of any lien, charge or other encumbrance upon any of the assets of the Company under, any agreement or other instrument to which the Company is a party or by which the Company or its assets may be bound, any term of the certificate of incorporation or by-laws of the Company, or any license, permit, judgment, decree, order, statute, rule or regulation applicable to the Company or any of its assets.

The execution, delivery and performance by the Company of this Subscription Agreement and the Offering and sale of the Units to accredited investors contemplated hereby shall, assuming the representations and warranties of Subscriber are true and correct, be in compliance with the exemptions from registration set forth in Regulation D and/or Section 4(a)(2) of the Securities Act and applicable state securities “blue sky” laws.

Except for the Stockholder Approval to amend the Company’s Certificate of Incorporation increasing the number of authorized shares, no additional permit, license, exemption, consent, authorization or approval of, or the giving of any notice by the Company to, any governmental or regulatory body, agency or authority is required in order for the Company to execute, deliver and perform its obligations hereunder, which has not been made, or will not when required be made, by the Company. No notice by the Company to any third party, and no consent or approval of any third party, of the Company’s execution, delivery and performance of this Subscription Agreement is required which has not been given or obtained.

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), including pursuant to Section 13(a) or 15(d) thereof, since January 1, 2011 (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “ SEC Documents ”). As of their respective dates of filing the most recent versions thereof with the SEC, the SEC Documents, together with any amendments thereto, complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable. None of the SEC Documents, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Documents, together with the related notes thereto, are true and complete and present fairly, in all material respects, the financial position of the Company as of the date specified and the results of its operations and changes in financial position for the period covered thereby; such financial statements have been prepared in conformity with U.S. generally accepted accounting principles, as applied by the Company (“GAAP”), applied on a consistent basis throughout the periods covered thereby, and the other financial information included or incorporated by reference in the SEC Documents has been derived from the accounting records of the Company and its subsidiaries and presents fairly the information shown thereby. Such financial statements and related notes were prepared in accordance with U.S. generally accepted accounting principles throughout the period indicated except as may be disclosed in the notes thereto, and except that the unaudited financial statements omit full notes, and except for normal year-end adjustments. Except as set forth in such financial statements, the Company has no material liabilities of any kind, whether accrued, absolute, contingent or otherwise or entered into any material transactions or commitments.

Except as disclosed in the Offering Materials no default by the Company or, to the best knowledge of the Company, any other party exists in the due performance under any material agreement to which the Company is a party or to which any of its assets is subject (collectively, the “ Company Agreements ”) which could reasonably be foreseen to have a material adverse effect on the Company. The Company Agreements are in full force and effect in accordance with their respective terms.

The Company has the requisite power and authority to execute and deliver this Subscription Agreement, and upon receipt of Stockholder Approval and the filing of an amendment to the Company’s Certificate of Incorporation increasing the number of authorized shares, perform its obligations herein, and consummate the transactions contemplated hereby. Upon the acceptance of Subscriber’s subscription by the Company and the execution of this Subscription Agreement by the Company, this Subscription Agreement will be a valid, legal and binding obligation of the Company enforceable against the Company in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and subject to general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or at equity).

The Company shall file with the SEC, within thirty (30) days following the initial Closing of the Offering, a proxy statement seeking Stockholder Approval to increase Fusion’s authorized shares; provided, however, that Fusion may defer the filing of the proxy or information statement for up to thirty (30) days if Fusion in good faith expects to complete its acquisition of assets from Broadvox/Cypress during such thirty (30) day period. Subscriber acknowledges that the Company can give no assurance that Stockholder Approval will be obtained to increase the number of authorized shares.

Assuming the accuracy of the Subscriber’s representations and warranties set forth in Section C.1 hereof and the accuracy of the information disclosed in the Accredited Purchaser Questionnaires provided by the Subscribers, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Subscribers under the Transaction Documents. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the OTCQB Marketplace.

No Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company other than those securities which are currently registered on an effective registration statement on file with the SEC, and holders of warrants to purchase approximately 25.7 million shares of Common Stock.

The Company confirms that it has not provided, and to the Company’s knowledge, none of its officers or directors nor any other Person acting on its or their behalf has provided, and it has not authorized the Selling Agents to provide, any Subscriber or its respective agents or counsel with any information that constitutes material, non-public information regarding the Company or its Subsidiaries except (i) insofar as the existence, provisions and terms of the Transaction Documents and the proposed transactions hereunder may constitute such information, all of which will be disclosed by the Company in the Press Release as contemplated by Section D.5 hereof, or (ii) to such Subscriber, prior to such disclosure, that has agreed to maintain the confidentiality and appropriately restrict its use of such information. The Company understands and confirms that the Subscriber will rely on the foregoing representations in effecting transactions in securities of the Company.

Assuming the accuracy of the Subscriber’s representations and warranties set forth in Section C.1 hereof, none of the Company, its Subsidiaries nor any of its affiliates or any Person acting on its behalf has, directly or indirectly, at any time, made any offers or sales of any Company security or solicited any offers to buy any security under circumstances that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Securities as contemplated hereby or (ii) cause the offering of the Securities pursuant to the Transaction Documents to be (x) integrated with prior offerings by the Company for purposes of any applicable law or regulation or (y) aggregated with prior offerings by the Company in a manner that would require the prior approval of the stockholders of the Company prior to the consummation of the transactions contemplated hereby under the rules and regulations of the OTCQB Marketplace on which any of the securities of the Company are listed or designated.

n.	The Company has not offered or sold any of the Securities by any form of general solicitation or general advertising.

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

The Company acknowledges and agrees that each of the Subscribers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby. The Company further acknowledges that no Subscriber is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Subscriber or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Subscriber’s purchase of the Securities.

No consent, approval, authorization, order, registration or qualification of or with any court or arbitrator or governmental or regulatory authority is required for the execution, delivery and performance by the Company of the Transaction Documents, the issuance by the Company of any of the Securities or the consummation of any of the transactions contemplated by the Transaction Documents, except for (i) the filing with the SEC of one or more Registration Statements in accordance with the requirements of the Registration Rights Agreement, (ii) filings required by applicable state securities laws, (iii) the filing of a Notice of Sale of Securities on Form D with the SEC under Regulation D of the Securities Act, (iv) the filing of any requisite notices and/or application(s) to the OTCQB Marketplace for the issuance and sale of the Securities and the listing of the Conversion Shares and Warrant Shares for trading or quotation, as the case may be, thereon in the time and manner required thereby, (v) the filings required in accordance with Section D.5 hereof and (vi) those that have been made or obtained prior to the date of this Subscription Agreement (collectively, the “ Required Approvals ”).

Subject to the filing of the Certificate of Designation with the Secretary of State of the State of Delaware, the Preferred Shares have been duly authorized and, when issued and paid for in accordance with the terms of the Transaction Documents, will be duly and validly issued, fully paid and nonassessable and free and clear of all Liens imposed by action or inaction of the Company, other than restrictions on transfer provided for in the Transaction Documents or imposed by applicable securities laws, and shall not be subject to preemptive or similar rights. The Warrants have been duly authorized and, when issued and paid for in accordance with the terms of the Transaction Documents, will be duly and validly issued, free and clear of all Liens, other than restrictions on transfer provided for in the Transaction Documents or imposed by applicable securities laws, and shall not be subject to preemptive or similar rights of stockholders. On the Share Authorization Date, the Conversion Shares issuable upon conversion of the Preferred Shares and the Warrant Shares issuable upon exercise of the Warrants shall have been duly authorized and, when issued and paid for in accordance with the terms of the Transaction Documents and the Conversion Shares and the Warrant Shares will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens, other than restrictions on transfer provided for in the Transaction Documents or imposed by applicable securities laws, and shall not be subject to preemptive or similar rights of stockholders. Assuming the accuracy of the representations and warranties of the Subscriber in this Subscription Agreement and the representations and warranties of the Selling Agents made to the Company in each of the Selling Agents’ engagement letter, the Securities will be issued in compliance with all applicable federal and state securities laws. As of the date of the Closing and on the Share Authorization Date, the Company shall have reserved from its duly authorized capital stock the number of shares of Common Stock issuable upon conversion of the Preferred Shares and exercise of the Warrants (without taking into account any limitations on the exercise the Warrants set forth in the Warrants). The Company shall, so long as any of the Preferred Shares and the Warrants are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued capital stock, solely for the purpose of effecting the conversion of the outstanding Preferred Shares and exercise of such outstanding Warrants, the number of shares of Common Stock issuable upon exercise of such outstanding Warrants (without taking into account any limitations on the exercise of the Warrants set forth in the Warrants).

The authorized capital stock of the Company consists of 550,000,000 shares of its Common Stock, par value $0.01 per share, and 10,000,000 shares of its “blank check” Preferred Stock. As of November 30, 2013, there are 303,833,242 shares of Common Stock and 5,045 shares of Series A-1, A-2 and A-4 Preferred Stock issued and outstanding, each having a stated value of $1,000 per share. In addition, there are 141,985,999 shares of Common Stock reserved for issuance in the event of the exercise of outstanding options and warrants, the conversion of outstanding preferred stock, and issuance as dividends on the preferred stock (exclusive of shares of Common Stock issuable as Conversion Shares or Warrant Shares). All of the outstanding shares of Common Stock have been duly authorized and validly issued, and are fully paid and nonassessable. Except as set forth in the SEC Documents and the Transaction Documents, there are no agreements or arrangements under which the Company is obligated to register the sale of any securities under the Securities Act. Except as set forth in the SEC Documents, no shares of Common Stock are entitled to preemptive rights and there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, any shares of capital stock of the Company, other than as may have been issued or became issuable subsequent to the last filed SEC Document pursuant to the terms of an equity incentive and/or compensatory plan or arrangement maintained by the Company. Except as set forth in the SEC Documents, there are no outstanding debt securities and no contracts, commitments, understandings, or arrangements by which the Company is or may become bound to issue additional shares of the capital stock of the Company or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, any shares of capital stock of the Company other than those issued or granted in the ordinary course of business pursuant to the Company’s equity incentive and/or compensatory plans or arrangements. Except for customary transfer restrictions contained in agreements entered into by the Company to sell restricted securities or as set forth in the SEC Documents, the Company is not a party to any agreement restricting the voting or transfer of any shares of the capital stock of the Company and, to the Company’s knowledge, no such agreements exist. Except as set forth in the SEC Documents, the offer and sale of all capital stock, convertible or exchangeable securities, rights, warrants or options of the Company issued prior to the date of Closing complied with all applicable federal and state securities laws, and no stockholder has any right of rescission or damages or any “put” or similar right with respect thereto. Except as set forth in the SEC Documents, there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by this Subscription Agreement or any of the other Transaction Documents or the consummation of the transactions described herein or therein.

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

Since December 31, 2012, except as specifically disclosed in a subsequent SEC Document filed prior to the date hereof, (i) there have been no events, occurrences or developments that have had or would reasonably be expected to have, either individually or in the aggregate, a material adverse effect on the results of operations, assets, business or financial condition of the Company (“ Material Adverse Effect ”), (ii) the Company has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the SEC, (iii) the Company has not altered materially its method of accounting or the manner in which it keeps its accounting books and records, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock (other than in connection with repurchases of unvested stock issued to employees of the Company), and (v) the Company has not issued any equity securities to any officer, director or affiliate, except Common Stock issued pursuant to existing Company stock option or upon the exercise of warrants or stock purchase plans or executive and director compensation arrangements disclosed in the SEC Documents. Except for the issuance of the Securities contemplated by the Transaction Documents, no event, liability or development has occurred or exists with respect to the Company or its Subsidiaries or their respective business, properties, operations or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made that has not been publicly disclosed at least one (1) trading day prior to the date that this representation is made.

Except as described in the SEC Documents, there are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which the Company or any of its Subsidiaries is or may be a party or to which any property of the Company or any of its Subsidiaries is or may be the subject that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or materially and adversely affect the ability of the Company to perform its obligations under the Transaction Documents; no such investigations, actions, suits or proceedings are, to the Company’s knowledge, threatened or contemplated by any governmental or regulatory authority or threatened by others.

No labor disturbance by or dispute with employees of the Company or any of its Subsidiaries exists or, to the Company’s knowledge, is contemplated or threatened. Neither the Company nor any Subsidiary of the Company has any collective bargaining arrangements or agreements covering any of its employees, except as set forth in the SEC Documents. Except as disclosed in the SEC Documents, no officer, consultant or key employee of the Company or any Subsidiary whose termination, either individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect, has terminated or, to the Company’s knowledge, has any present intention of terminating his or her employment or engagement with the Company or any Subsidiary.

Neither the Company nor any of its Subsidiaries is (i) in violation of its charter or by-laws or similar organizational documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any of the property or assets of the Company or any of its Subsidiaries is subject; or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of clauses (ii) and (iii) above, for any such default or violation that would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect.

The Company and each of its Subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, “ Governmental Licenses ”) issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business of the Company as described in the SEC Documents, except where the failure so to possess would not, singly or in the aggregate, result in a Material Adverse Effect; the Company and each of its Subsidiaries are in compliance with the requirements of all such Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, result in a Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not, singly or in the aggregate, result in a Material Adverse Effect; and neither the Company nor any of its Subsidiaries have received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect. The Company has no reason to believe that any party granting any such Governmental Licenses is considering limiting, suspending or revoking the same in any material respect.

The Company and its Subsidiaries have good and valid title in fee simple to, or has valid rights to lease or otherwise use, all items of real and personal property reflected in the financial statements included or incorporated by reference in the SEC Documents that are material to the businesses of the Company and its Subsidiaries taken as a whole, in each case free and clear of all liens, encumbrances, claims and defects and imperfections of title except those that (i) do not materially interfere with the use made and proposed to be made of such property by the Company and its Subsidiaries or (ii) could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

Except as described in the SEC Documents, (i) the Company owns, possesses or has adequate rights to use the Company Intellectual Property Rights (as defined below), (ii) the Company has not received any written notice of any infringement of, or conflict with, any Intellectual Property Rights of any third party, (iii) the Company is not aware of any third party Intellectual Property Rights that would have a Material Adverse Effect on the ability of the Company to make, use or sell its products, (iv) no third party, including any academic or governmental organization, possesses or could obtain rights to the Company Intellectual Property Rights which, if exercised, could enable such party to develop products competitive with those of the Company, and (v) neither the Company nor any of its Subsidiaries is obligated to pay a material royalty, grant a material license, or provide other material consideration to any third party in connection with the Company Intellectual Property Rights. Except as described in the SEC Documents or as would not have a Material Adverse Effect, (x) the Company is not aware of any facts or circumstances that constitute an infringement by the Company of any valid claim of a third-party patent, (y) the Company is not aware of any facts or circumstances that constitute an infringement by the Company of, or conflict with, any non-patented Intellectual Property Rights of any third party, and (z) the Company is not aware of any facts or circumstances that would render any Company Intellectual Property Rights invalid or unenforceable. For purposes of this Subscription Agreement, “Intellectual Property Rights” means patents, patent rights, patent applications, licenses, inventions, copyrights, know how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks and trade names.

The Company and its Subsidiaries have insurance covering their respective properties, operations, personnel and businesses, including business interruption insurance, which insurance is in amounts and insures against such losses and risks as are reasonable and prudent to protect the Company and its Subsidiaries and their respective businesses; and neither the Company nor any of its Subsidiaries has (i) received notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance or (ii) any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from similar insurers as may be necessary to continue its business.

aa.

Except as set forth in the SEC Documents, there are no loans, leases, agreements, contracts, royalty agreements, management contracts, service arrangements or other continuing transactions exceeding $120,000 between (a) the Company or any Subsidiary, on the one hand, and (b) any person or entity who would be covered by Item 404(a) of Regulation S-K promulgated under the Securities Act, on the other hand. Except as disclosed in the SEC Documents, there are no outstanding amounts payable to or receivable from, or advances by the Company or any of its Subsidiaries to, and neither the Company nor any of its Subsidiaries is otherwise a creditor of or debtor to, any beneficial owner of more than 5% of the outstanding shares of Common Stock, or any director, employee or affiliate of the Company or any of its Subsidiaries, other than (i) reimbursement for reasonable expenses incurred on behalf of the Company or any of its Subsidiaries or (ii) as part of the normal and customary terms of such persons’ employment or service as a director with the Company or any of its Subsidiaries.

bb.

Except as disclosed in its SEC Documents, the Company maintains systems of “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of the Company’s principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as disclosed in the SEC Documents, there are no material weaknesses in the Company’s internal control over financial reporting.

cc.

There is and has been no failure on the part of the Company or any of the Company’s directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith, including Section 402 related to loans and Sections 302 and 906 related to certifications to the extent that the Company is or has been required to comply with the Sarbanes-Oxley Act and such rules. Except as disclosed in the SEC Documents, the Company maintains “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that are reasonably designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Exchange Act, and that such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure. The Company has carried out evaluations of the effectiveness of its disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.

dd.

Neither the Company nor any of its Subsidiaries is a party to any contract, agreement or understanding with any person (other than the Transaction Documents and the engagement letter(s) between the Selling Agents and the Company) that would give rise to a valid claim against the Company or any of its Subsidiaries or the Selling Agents for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Securities.

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

ee.	The Company is not and, after giving effect to the offering and sale of the Securities, will not be required to register as an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the SEC thereunder.

ff.

Except as disclosed in the SEC Documents, the Company has not, in the 12 months preceding the Closing Date, received notice from the OTCQB marketplace on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such trading market. As of the Closing Date, the Company is in compliance with all such listing and maintenance requirements.

gg.

Except as would not have a Material Adverse Effect, the Company and its Subsidiaries have paid all federal, state, local and foreign taxes and filed all tax returns required to be paid or filed through the date hereof to the extent that such taxes have become due and are not being contested in good faith; and except as otherwise disclosed in the SEC Documents, there is no tax deficiency that has been, or could reasonably be expected to be, asserted against the Company or any of its Subsidiaries or any of their respective properties or assets except as would not have a Material Adverse Effect.

hh.

(i) The Company and its Subsidiaries (x) are in compliance with any and all applicable federal, state, local and foreign laws, rules, regulations, requirements, decisions and orders relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (collectively, “ Environmental Laws ”); (y) have received and are in compliance with all permits, licenses, certificates or other authorizations or approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (z) have not received written notice of any actual or potential liability for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, and (ii) there are no costs or liabilities associated with Environmental Laws of or relating to the Company or its Subsidiaries, except in the case of each of clauses (hh)(i)(x), (hh)(i)(y) and (hh)(ii)(z) above, for any such failure to comply, or failure to receive required permits, licenses or approvals, or cost or liability, as would not, individually or in the aggregate, have a Material Adverse Effect.

ii.

Neither the Company, nor to the Company’s knowledge, any agent or other person acting on behalf of the Company, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

jj.

There is no transaction, arrangement, or other relationship between the Company (or any Subsidiary) and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in SEC Documents and is not so disclosed and would have or reasonably be expected to result in a Material Adverse Effect.

kk.	The Company has not taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities.

ll.

Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent, employee or affiliate, is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“ OFAC ”); and the Company will not directly or indirectly use the proceeds of the sale of the Securities, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person or entity, towards any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC or for the purpose of financing the activities of any Person currently subject to any U.S. sanctions administered by OFAC.

mm.	The Company does not have any agreement or understanding with any Subscriber with respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction Documents or any written agreement regarding the confidentiality and use of confidential information.

nn.

With respect to Securities to be offered and sold hereunder in reliance on Rule 506 under the Securities Act (" Regulation D Securities "), none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering, any beneficial owner of 20% or more of the Company's outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an " Issuer Covered Person " and, together, " Issuer Covered Persons ") is subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a " Disqualification Event "), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Selling Agents and the Subscribers a copy of any disclosures provided thereunder.

oo.	The Company is not aware of any person (other than any Issuer Covered Person or Dealer Covered Person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Securities.

pp.	The Company will notify the Selling Agents in writing, prior to the Closing Date of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Issuer Covered Person.

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

D. Other Agreements

The certificate(s) representing the Securities will bear a legend substantially similar to the legend set forth immediately below until (i) such Securities shall have been registered under the Securities Act and effectively disposed of in accordance with a registration statement, or (ii) in the opinion of counsel reasonably satisfactory to the Company such securities may be sold without registration under the Securities Act:

“These securities have not been registered under the Securities Act of 1933, as amended (the " Securities Act "), or the "blue sky" or securities laws of any state and may not be offered, sold, assigned or transferred except (i) pursuant to a registration statement under the Securities Act which has become effective and is current with respect to these securities, or (ii) pursuant to a specific exemption from registration under the Securities Act but only upon a holder thereof first having obtained the written opinion of counsel reasonably satisfactory to the Company, that the proposed disposition is consistent with all applicable provisions of the Securities Act as well as any applicable "blue sky" or similar securities laws. Notwithstanding the foregoing, these securities may be pledged in connection with a bona fide margin account or other loan or financing arrangement secured by the securities; provided that in connection with any foreclosure or transfer of the securities, the transferor shall comply with the provisions [herein], in the Subscription Agreement and the Registration Rights Agreement, and upon foreclosure or transfer of the securities, such foreclosing person or transferee shall comply with all provisions contained [herein], in the Subscription Agreement and the Registration Rights Agreement. "

The Company acknowledges and agrees that a Subscriber may from time to time pledge, and/or grant a security interest in, some or all of the legended Securities in connection with applicable securities laws, pursuant to a bona fide margin agreement in compliance with a bona fide margin loan. Such a pledge would not be subject to approval or consent of the Company and no legal opinion of legal counsel to the pledgee, secured party or pledgor shall be required in connection with the pledge, but such legal opinion shall be required in connection with a subsequent transfer or foreclosure following default by the Subscriber transferee of the pledge. No notice shall be required of such pledge, but Subscriber shall promptly notify the Company of any such subsequent transfer or foreclosure. Each Subscriber acknowledges that the Company shall not be responsible for any pledges relating to, or the grant of any security interest in, any of the Securities or for any agreement, understanding or arrangement between any Subscriber and its pledgee or secured party. At the appropriate Subscriber’s expense, the Company will execute and deliver such reasonable documentation as such Subscriber may reasonably request in connection with a pledge or transfer of the Securities, including the preparation and filing of any required prospectus supplement under Rule 424(b)(3) of the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of selling stockholders thereunder. Each Subscriber acknowledges and agrees that, except as otherwise provided in Section D.2, any Securities subject to a pledge or security interest as contemplated by this Section D.1 shall continue to bear the legend set forth in this Section D.1.

The legend set forth in Section D.1 hereof shall be removed and the Company shall issue a certificate without such legend or any other legend to the holder of the applicable Securities upon which it is stamped or issue to such holder by electronic delivery at the applicable balance account at the Depository Trust Company (“ DTC ”), if (i) such Securities are registered for resale under the Securities Act, or (ii) such Securities are sold or transferred or are eligible for sale and the holder has a present intent to sell pursuant to Rule 144 (if the transferor is not an affiliate of the Company). Following the earlier of (i) the Effectiveness Date (as defined in the Registration Rights Agreement) and (ii) Rule 144 becoming available for the resale of Securities, without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Securities and without volume or manner-of-sale restrictions, the Company shall issue to the Transfer Agent the Irrevocable Transfer Agent Instructions and obtain, if possible, any legal opinion necessary for the Transfer Agent to comply with such instructions. Any fees (with respect to the Transfer Agent, Company counsel or otherwise) associated with the issuance of such opinion or the removal of such legend shall be borne by the Company. Following the Effectiveness Date, or at such earlier time as a legend is no longer required for certain Securities, the Company will promptly, following the delivery by a Subscriber to the Company (with written notice to the Company) of (i) a legended certificate representing Conversion Shares or Warrant Shares (endorsed or with stock powers attached, signatures guaranteed, and otherwise in the form necessary to effect the reissuance and/or transfer) and an opinion of counsel to the extent required by applicable law or (ii) a Notice of Conversion (as defined in the Certificate of Designation) or an Exercise Notice (as defined in the Warrants) in the manner stated to effect the conversion of the Preferred Shares and exercise of such Warrant in accordance with its terms, deliver or cause to be delivered to such Subscriber a certificate representing such Securities that is free from all restrictive legends. The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section D.2 Certificates for Conversion Shares or Warrant Shares subject to legend removal hereunder may be transmitted by the Transfer Agent to the Subscribers by crediting the account of the Subscriber’s prime broker with DTC as directed by such Subscriber.

The Company shall issue irrevocable instructions to its transfer agent, and any subsequent transfer agent, substantially in the form of Exhibit A attached hereto (the “ Irrevocable Transfer Agent Instructions ”) in accordance with Section D.2. The Company represents and warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section D.3 (or instructions that are consistent therewith) will be given by the Company to the Transfer Agent in connection with this Subscription Agreement, and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Subscription Agreement and the other Transaction Documents and applicable law. The Company acknowledges that a breach by it of its obligations under this Section D.3 will cause irreparable harm to a Subscriber. Accordingly, the Company acknowledges that a remedy at law for a breach of its obligations under this Section D.3 will be inadequate and agrees, in the event of a breach by the Company of the provisions of this Section D.3, that a Subscriber shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required.

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

If by the third (3rd) trading day after receipt of all documents necessary for the removal of the legends set forth in Section D.1 (pursuant to Section D.2) (or the fourth (4th) trading day if any part of the necessary documentation is delivered after 5:00 p.m. New York City time) (such date, the “ Deadline Date ”), the Company has failed to issue to a Subscriber an unlegended certificate, then, in addition to all other remedies available to such Subscriber, if on or after the trading day immediately following the Deadline Date, such Subscriber purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the holder of shares of Common Stock that such Subscriber anticipated receiving from the Company without any restrictive legend (a “ Buy-In ”), then the Company shall, within three (3) Trading days after the Company receives such Subscriber’s written request and in such Subscriber’s sole discretion, either (i) pay cash to the Subscriber in an amount equal to such Subscriber’s total purchase price (including brokerage commissions, if any, that are reasonably documented in Subscriber’s written request) for the shares of Common Stock so purchased (the “ Buy-In Price ”), at which point the Company’s obligation to deliver such certificate (and to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to such Subscriber a certificate representing such shares of Common Stock and pay cash to the Subscriber in an amount equal to the excess (if any) of the Buy-In Price over the product of (a) such number of shares of Common Stock purchased in the Buy-In, times (b) the Closing Bid Price of a share of Common Stock on the Deadline Date.

On or after 4:00 PM, New York City time, on the third (3rd) trading day immediately following the date this Agreement is accepted by the Company, the Company shall issue a press release (the “ Press Release ”) reasonably acceptable to the Selling Agents disclosing all material terms of the transactions contemplated hereby and will file a Current Report on Form 8-K with the SEC describing the terms of the Transaction Documents (and including as exhibits to such Current Report on Form 8-K the material Transaction Documents (including, without limitation, this Subscription Agreement, the form of Warrant and the Registration Rights Agreement)) and any other material non-public information delivered to the Subscribers (the “ Form 8-K Filing ”). Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Subscriber or an affiliate of any Subscriber, or include the name of any Subscriber or an affiliate of any Subscriber in any press release or filing with the SEC (other than the Registration Statement) or any regulatory agency or trading market, without the prior written consent of such Subscriber, except (i) as required by federal securities law in connection with (A) any registration statement contemplated by the Registration Rights Agreement and (B) the filing of final Transaction Documents (including signature pages thereto) with the SEC and (ii) to the extent such disclosure is required by law, request of the Staff of the SEC or Trading Market regulations, in which case the Company shall provide the Subscribers with prior notice of such disclosure permitted under this subclause (ii). From and after the Form 8-K Filing, no Subscriber shall be in possession of any material, non-public information regarding the Company or its Subsidiaries received from the Company, any Subsidiary or any of their respective officers, directors, employees or agents, that is not disclosed in the Press Release and/or the Form 8-K Filing unless a Subscriber shall have executed a written agreement regarding the confidentiality and use of such information. Each Subscriber, severally and not jointly with the other Investors, covenants and agrees that until such time as the Form 8-K Filing has been completed as described in this Section D.5, such Subscriber will maintain the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). The Subscribers understand that the Company may rely on this agreement of confidentiality to comply with the exemptive provisions of Regulation FD under the Securities Act as set forth in Rule 100(b)(2)(ii) of Regulation FD.

The Company covenants and agrees that, after the Form 8-K Filing, neither it, nor any other Person acting on its behalf, will provide any Subscriber or its agents or counsel with any information regarding the Company or its Subsidiaries that constitutes material, non-public information regarding the Company or its Subsidiaries without the express written consent of such Subscriber, unless prior thereto such Subscriber shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands and confirms that each Subscriber shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company delivers any material, non-public information to a Subscriber without such Subscriber’s consent, the Company hereby covenants and agrees that such Subscriber shall not have any duty of confidentiality with respect to such material, non-public information.

The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D. The Company, on or before the date of the Closing, shall take such reasonable action as the Company shall determine is necessary in order to obtain an exemption for or to qualify the Securities for sale to the Subscribers under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification).

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

D. 1. Registration Rights

The Company and the Subscriber shall enter into the Registration Rights Agreement concurrently with the execution of this Subscription Agreement which shall set forth the rights the Subscriber and duties of the Company to register the Conversion Shares and Warrant Shares for resale.

E. Notice Provisions

Any and all notices, demands or requests required or permitted to be given under this Subscription Agreement shall be given in writing and sent, by registered or certified U.S. mail, return receipt requested, by facsimile transmission with proof of electronic transmission, by hand, or by overnight courier, addressed to the parties hereto at their addresses set forth above or such other addresses as they may from time-to-time designate by written notice, given in accordance with the terms of this Section E, together with copies thereof as follows:

In the case of the Company to:

Fusion Telecommunications International, Inc.

420 Lexington Avenue, Suite 1718

New York, NY 10170

Attn: President

With a copy to:

Fusion Telecommunications International, Inc.

1475 West Cypress Creek Road, Suite 204

Ft. Lauderdale, FL 33309

Attn: Controller

In the case of Subscriber, to the address of Subscriber on the signature page to this Subscription Agreement.

Notice given as provided in this Section shall be deemed effective: (i) on the business day hand delivered (or, if it is not a business day, then the next succeeding business day thereafter), (ii) on the first business day following the sending thereof by overnight courier, and (iii) on the seventh calendar day (or, if it is not a business day, then the next succeeding business day thereafter) after the depositing thereof into the exclusive custody of the U.S. Postal Service. As used herein, the term business day (other than Saturday or Sunday) shall mean any day when commercial banks are open in the State of New York.

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

F. Miscellaneous.

1.	This Subscription Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns.

The Offering Documents, together with the Transaction Documents, constitute the entire agreement between the Subscriber and the Company with respect to the subject matter hereof and supersede all prior oral or written agreements and understandings, if any, relating to the subject matter hereof. The terms and provisions of this Subscription Agreement may be waived, or consent for the departure therefrom granted, only by a written document executed by the party to be bound thereby.

No term or provision contained herein may be modified, amended or waived except by written agreement or consent signed by the party or parties to be bound thereby. A waiver by either party of a breach of any provision of this Subscription Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party.

Subscriber acknowledges that the subscription made hereby is not binding upon the Company until the Company accepts it. The Company has the right to accept or reject this subscription in whole or in part in its sole and absolute discretion. If this subscription is rejected in whole, the Company shall return the purchase price to Subscriber, without interest or deduction, and the Company and Subscriber shall have no further obligation to each other by reason of this Subscription Agreement or the subscription made hereby.

5.	The representations and warranties of the Company and the Subscriber made in this Subscription Agreement shall survive the Closing and the execution and delivery hereof and delivery of the Securities.

Each of the parties hereto shall pay its own fees and expenses (including the fees of any attorneys, accountants, appraisers or others engaged by such party) in connection with this Subscription Agreement and the transactions contemplated hereby whether or not the transactions contemplated hereby are consummated.

7.	The Preferred Shares, Warrants, Conversion Shares and Warrant Shares will be restricted securities and shall not be eligible for resale unless registered or an exemption from registration is provided for in the Securities Act in accordance with Rule 144.

Fusion does not currently have a sufficient number of authorized but unissued and unreserved shares of Common Stock to permit all of the Preferred Shares to be converted and all of the Warrants to be exercised. Accordingly, the Preferred Shares may not be converted, and the Warrants may not be exercised, until the Share Authorization Date.

Subscriber and the Company hereby irrevocably waive trial by jury in any action or proceeding involving, directly or indirectly, any matter (whether sounding in tort, contract, fraud or otherwise) in any way arising out of or in connection with this Subscription Agreement or Subscriber's purchase of the Units.

10.

Except as expressly provided herein, this Subscription Agreement, the Registration Rights Agreement, the Certificate of Designation, the Warrants and the Escrow Agreement contains the entire agreement between the parties with respect to the transactions contemplated hereunder and may be amended only by a writing executed by all of the parties hereto.

[Offering Information, Legends, and Notices Follow]

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

OFFERING INFORMATION, LEGENDS, AND NOTICES

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE “ SEC ”), OR ANY STATE REGULATORY AUTHORITY. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

IT IS INTENDED THAT THE SECURITIES OFFERED HEREBY WILL BE OFFERED TO ACCREDITED INVESTORS, AS DEFINED IN RULE 501 OF REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”).

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT AND ARE BEING OFFERED PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS FOR NONPUBLIC OFFERINGS. SUCH EXEMPTIONS LIMIT THE NUMBER AND TYPES OF INVESTORS TO WHICH THE OFFERING WILL BE MADE AND RESTRICT SUBSEQUENT TRANSFERS OF THE SECURITIES SUCH SECURITIES MAY ONLY BE RESOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF IF, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

THE SECURITIES OFFERED HEREBY SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN AFFORD TO SUSTAIN A LOSS OF THEIR ENTIRE INVESTMENT. INVESTORS WILL BE REQUIRED TO REPRESENT THAT THEY ARE FAMILIAR WITH AND UNDERSTAND THE TERMS OF THIS OFFERING.

THE OFFEREE, BY ACCEPTING DELIVERY OF THE OFFERING MATERIALS, AGREES TO RETURN THE OFFERING MATERIALS AND ALL ACCOMPANYING OR RELATED DOCUMENTS TO THE COMPANY UPON REQUEST IF THE OFFEREE DOES NOT AGREE TO PURCHASE ANY OF THE SECURITIES OFFERED HEREBY.

ANY OFFERING MATERIALS SUBMITTED IN CONNECTION WITH THE PRIVATE PLACEMENT OF THE SECURITIES DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT AUTHORIZED. ANY REPRODUCTION OR DISTRIBUTION OF ANY OFFERING MATERIALS IN WHOLE OR IN PART, OR THE DIVULGENCE OF ANY OF THEIR CONTENTS, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY, IS PROHIBITED. ANY PERSON ACTING CONTRARY TO THE FOREGOING RESTRICTIONS MAY PLACE HIM/HERSELF AND THE COMPANY IN VIOLATION OF FEDERAL OR STATE SECURITIES LAWS.

NASAA UNIFORM LEGEND

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

FOR RESIDENTS OF FLORIDA

EACH FLORIDA RESIDENT WHO SUBSCRIBES FOR THE PURCHASE OF SECURITIES HEREIN MAY HAVE THE RIGHT, TO THE EXTENT PROVIDED IN SECTION 517.061(11)(A)(5) OF THE FLORIDA SECURITIES ACT, TO WITHDRAW HIS SUBSCRIPTION FOR THE PURCHASE AND RECEIVE A FULL REFUND OF ALL MONIES PAID. SUCH RIGHT OF WITHDRAWAL MAY BE EXERCISED PRIOR TO THE EXPIRATION OF THREE (3) BUSINESS DAYS AFTER THE LATER TO OCCUR OF (A) PAYMENT OF THE PURCHASE HAS BEEN MADE TO THE COMPANY, ITS AGENT, OR AN ESCROW AGENT OR (B) COMMUNICATION OF THE RIGHT OF WITHDRAWAL TO THE FLORIDA RESIDENT. WITHDRAWAL WILL BE WITHOUT ANY FURTHER LIABILITY TO ANY PERSON. TO ACCOMPLISH THIS WITHDRAWAL, A SUBSCRIBER NEED ONLY SEND A LETTER OR TELEGRAM TO THE COMPANY AT THE ADDRESS OF THE COMPANY SET FORTH HEREIN INDICATING HIS INTENTION TO WITHDRAW.

SUCH LETTER OR TELEGRAM SHOULD BE SET AND POSTMARKED PRIOR TO THE END OF THE AFOREMENTIONED THIRD BUSINESS DAY. IT IS ADVISABLE TO SEND SUCH LETTER BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ENSURE THAT IT IS RECEIVED AND ALSO TO EVIDENCE THE TIME IT WAS MAILED. IF THE REQUEST IS MADE ORALLY, IN PERSON OR BY TELEPHONE TO AN OFFICER OF THE COMPANY, A WRITTEN CONFIRMATION THAT THE REQUEST HAS BEEN RECEIVED SHOULD BE REQUESTED.

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

SIGNATURE PAGE FOR:

INDIVIDUAL INVESTOR

IN WITNESS WHEREOF , this Subscription Agreement has been executed by Subscriber and by the Company on the respective dates set forth below.

Signature		Signature (If Purchased Jointly)
__________________________________________________________		__________________________________________________________

Print Name __________________________________________________		Print Name __________________________________________________

Date: ______________________________________________________		Date: ______________________________________________________

Social Security # _____________________________________________		Social Security # _____________________________________________

Residential Address __________________________________________		Residential Address __________________________________________

_________________________________________________________		_________________________________________________________


Telephone # _______________________________________________		Telephone # _______________________________________________

Fax # ____________________________________________________		Fax # ____________________________________________________

Email: ____________________________________________________		Email: ____________________________________________________

EXACT Name in which Securities are to be issued: ____________________________________________________________________________________________

_______________________________________________________________________________________________________________________________________________

Purchase Price: $___________________________________________

Form of Joint Ownership ( if applicable ):

Tenants-in-Common

Joint Tenants with Right of Survivorship

Other:

______________________________________________________________________________________________________________________________________________

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

SIGNATURE PAGE FOR:

PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY OR TRUST

IN WITNESS WHEREOF , the undersigned has executed this Subscription Agreement on the date set forth below:

By: ___________________________________________________	Federal Tax ID Number ________________________________________

Name: _________________________________________________	State of Organization _________________________________________

Title: __________________________________________________

Date: __________________________________________________

Principal Business Address:

____________________________________________________________________________________________________________________

Attn: ___________________________________________________

Telephone: _______________________________________________

Fax: ____________________________________________________

Email: ____________________________________________________

EXACT Name in which Securities are to be issued: ____________________________________________________________________________________________

_______________________________________________________________________________________________________________________________________________

Purchase Price: $___________________________________________

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

SIGNATURE PAGE FOR:

SUBSCRIPTION AGREEMENT ACCEPTANCE

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC., a Delaware corporation

By:	_______________________________________________

Printed Name:	_______________________________________________

Title:	_______________________________________________

Dated:	_______________________________________________


Subscription Agreement No:	_______________________________________________

Subscriber:	_______________________________________________

Amount of Purchase Price:	$ ______________________________________________

Exhibit 10.83

Form of Warrant

THE OFFER AND SALE OF THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN EACH CASE IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES; PROVIDED THAT IN CONNECTION WITH ANY FORECLOSURE OR TRANSFER OF THE SECURITIES, THE TRANSFEROR SHALL COMPLY WITH THE PROVISIONS HEREIN, IN THE SECURITIES PURCHASE AGREEMENT AND THE REGISTRATION RIGHTS AGREEMENT, AND UPON FORECLOSURE OR TRANSFER OF THE SECURITIES, SUCH FORECLOSING PERSON OR TRANSFEREE SHALL COMPLY WITH ALL PROVISIONS CONTAINED HEREIN, IN THE SECURITIES PURCHASE AGREEMENT AND THE REGISTRATION RIGHTS AGREEMENT.

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

WARRANT TO PURCHASE COMMON STOCK

Warrant No. 2013-B2-088 Original Issue Date: December 31, 2013

Fusion Telecommunications International, Inc., a Delaware corporation (the “Company”), hereby certifies that, for value received, Marvin S. Rosen or its permitted registered assigns (the “Holder”), is entitled to purchase from the Company up to a total of 6,400,000.000 shares of common stock, $.01 par value per share (the “Common Stock”), of the Company (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”) at an exercise price per share equal to $0.125 per share (as adjusted from time to time as provided in Section 9 herein, the “Exercise Price”), at any time and from time to time on or after the date hereof (the “Original Issue Date”) and through and including 5:30 P.M., New York City time, on the five (5) year anniversary of the earlier of (a) the Effective Date whereby all Registrable Securities (as defined in the Registration Rights Agreement dated December 31, 2013 among the Company and the Purchasers identified therein (the “Registration Rights Agreement”)) may be freely resold pursuant to a resale registration statement, and (b) the date when all Registrable Securities (as defined in the Registration Rights Agreement) can be sold under Rule 144 without any restriction or limitation and without the requirement to be in compliance with Rule 144(c)(1) (the “Expiration Date”), and subject to the following terms and conditions:

This Warrant is granted in connection with that certain Subscription Agreement, dated December 31, 2013 by and among the Company and the Purchasers identified therein (the “Subscription Agreement”). The Warrant Shares issuable pursuant to this Warrant shall be deemed Registrable Securities for purposes of the Registration Rights Agreement.

1. Definitions . In addition to the terms defined elsewhere in this Warrant, capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Subscription Agreement.

2. Registration of Warrants . The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder (which shall include the initial Holder or, as the case may be, any registered assignee to which this Warrant is permissibly assigned hereunder) from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

3. Registration of Transfers . Subject to the restrictions on transfer set forth in Section 4.1 of the Subscription Agreement (which restrictions shall in no event prevent Holder from transferring this Warrant to Holder’s employees and affiliates) and compliance with all applicable securities laws, the Company shall register the transfer of all or any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached as Schedule 2 hereto duly completed and signed, to the Company at its address specified in the Subscription Agreement and (x) delivery, at the request of the Company, of an opinion of counsel reasonably satisfactory to the Company to the effect that the transfer of such portion of this Warrant may be made pursuant to an available exemption from the registration requirements of the Securities Act and all applicable state securities or blue sky laws and (y) delivery by the transferee of a written statement to the Company certifying that the transferee is an “accredited investor” as defined in Rule 501(a) under the Securities Act and making the representations and certifications set forth in Section C.1 of the Subscription Agreement, to the Company at its address specified in the Subscription Agreement. Upon any such registration or transfer, a new Warrant to purchase Common Stock in substantially the form of this Warrant (any such new Warrant, a “New Warrant”) evidencing the portion of this Warrant so transferred shall be issued to the transferee, and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations in respect of the New Warrant that the Holder has in respect of this Warrant. The Company shall prepare, issue and deliver at its own expense any New Warrant under this Section 3.

4. Exercise and Duration of Warrant .

(a) All or any part of this Warrant shall be exercisable by the registered Holder in any manner permitted by Section 10 of this Warrant at any time and from time to time on or after the Original Issue Date and through and including 5:30 P.M., New York City time, on the Expiration Date, subject to the conditions and restrictions contained in this Warrant. At 5:30 P.M., New York City time, on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value and this Warrant shall be terminated and no longer outstanding.

(b) The Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in the form attached as Schedule 1 hereto (the “Exercise Notice”), completed and duly signed, and (ii) payment of the Exercise Price for the number of Warrant Shares as to which this Warrant is being exercised (which may take the form of a “cashless exercise” if so indicated in the Exercise Notice and if a “cashless exercise” may occur at such time pursuant to Section 10 below). The date on which the Exercise Notice is delivered to the Company (as determined in accordance with the notice provisions hereof) is an “Exercise Date.” Within two (2) days following the delivery of the Exercise Notice (the “Payment Deadline”), the Holder shall make payment with respect to the Exercise Price for the number of Warrant Shares as to which this Warrant is being exercised; provided that the Company’s obligations to deliver such Warrant Shares shall be delayed on a day-for-day basis each day after the Payment Deadline such payment of the Exercise Price is not paid. The Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date the final Exercise Notice is delivered to the Company. Execution and delivery of the Exercise Notice shall have the same effect as cancellation of the original Warrant and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant Shares, if any.

5. Delivery of Warrant Shares .

(a) Subject to Section 4(b), upon exercise of this Warrant, the Company shall promptly (but in no event later than 5:30 P.M., New York City time, on the third (3rd) Trading Day after the Exercise Date (or the fourth (4th) Trading Day if the last of the Exercise Notice, the Exercise Price (if applicable) and opinion of counsel referred to below in this Section 5(a) (if applicable) is delivered after 5:00 P.M., New York City time, on the Exercise Date) (such time, the “Delivery Deadline”) issue or cause to be issued and cause to be delivered to or upon the written order of the Holder and in such name or names as the Holder may designate (provided that, if the Registration Statement is not effective and the Holder directs the Company to deliver a certificate for the Warrant Shares in a name other than that of the Holder or an Affiliate of the Holder, it shall deliver to the Company on the Exercise Date an opinion of counsel reasonably satisfactory to the Company to the effect that the issuance of such Warrant Shares in such other name may be made pursuant to an available exemption from the registration requirements of the Securities Act and all applicable state securities or blue sky laws), (i) a certificate for the Warrant Shares issuable upon such exercise, free of restrictive legends, or (ii) an electronic delivery of the Warrant Shares to the Holder’s account at the Depository Trust Company (“DTC”) or a similar organization, unless in the case of clause (i) and (ii) a registration statement covering the resale of the Warrant Shares and naming the Holder as a selling stockholder thereunder is not then effective or the Warrant Shares are not freely transferable without volume and manner of sale restrictions pursuant to Rule 144 under the Securities Act, in which case such Holder shall receive a certificate for the Warrant Shares issuable upon such exercise with appropriate restrictive legends. The Holder, or any Person permissibly so designated by the Holder to receive Warrant Shares, shall be deemed to have become the holder of record of such Warrant Shares as of the Exercise Date with respect thereto. If the Warrant Shares can be issued without restrictive legends, the Company shall, upon the written request of the Holder, use its commercially reasonable efforts to deliver, or cause to be delivered, Warrant Shares hereunder electronically through DTC or another established clearing corporation performing similar functions, if available. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed.

(b) If by the Delivery Deadline, the Company has failed to comply with Section 5(a), and if after such Delivery Deadline and prior to the receipt of such Warrant Shares, the Holder purchases (in an open market transaction) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall, within three (3) Trading Days after the Company receives the Holder’s written request and in the Holder’s sole discretion, either (1) pay in cash to the Holder an amount equal to the Holder’s total purchase price (including brokerage commissions, if any, that are reasonably documented in Holder’s written request) for the shares of Common Stock so purchased, at which point the Company’s obligation to deliver and issue such Warrant Shares shall terminate or (2) promptly honor its obligation to deliver to the Holder such Warrant Shares and pay cash to the Holder in an amount equal to the excess (if any) of Holder’s total purchase price (including brokerage commissions, if any, that are reasonably documented in Holder’s written request) for the shares of Common Stock so purchased in the Buy-In over the product of (A) the number of shares of Common Stock purchased in the Buy-In, times (B) the Closing Bid Price of a share of Common Stock on the Exercise Date.

(c) To the extent permitted by law, the Company’s obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same. Nothing herein shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver the Warrant Shares upon exercise of the Warrant as required pursuant to the terms hereof.

6. Charges, Taxes and Expenses . Issuance and delivery of the Warrant Shares upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, transfer agent fee or other incidental tax or expense in respect of the issuance of the Warrant Shares, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the registration of Warrant Shares or the Warrants in a name other than that of the Holder or an Affiliate thereof. The Holder shall be responsible for all other tax liabilities that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

7. Replacement of Warrant . If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction (in such case) and, in each case, a customary and reasonable indemnity and surety bond, if requested by the Company. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the New Warrant.

8. Reservation of Warrant Shares . The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares that are initially issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of persons other than the Holder (taking into account the adjustments and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price (or upon a “cashless exercise” pursuant to Section 10) in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. The Company will take all commercially reasonable actions as may be necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any securities exchange or automated quotation system upon which the Common Stock may be listed.

9. Certain Adjustments . The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 9.

(a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides its outstanding shares of Common Stock into a larger number of shares, or (iii) combines its outstanding shares of Common Stock into a smaller number of shares, then in each such case, the Exercise Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately before such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustments made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination.

(b) Pro Rata Distributions. If the Company, at any time while this Warrant is outstanding, distributes to all holders of Common Stock for no consideration (i) evidences of its indebtedness, (ii) any security (other than a distribution of Common Stock covered by the preceding paragraph) or (iii) rights or Warrants to subscribe for or purchase any security, or (iv) any other asset, including cash dividends (in each case, “Distributed Property”), then, upon any exercise of this Warrant that occurs after the record date fixed for determination of stockholders entitled to receive such distribution, the Holder shall be entitled to receive, in addition to the Warrant Shares otherwise issuable upon such exercise (if applicable), the Distributed Property that such Holder would have been entitled to receive in respect of such number of Warrant Shares had the Holder been the record holder of such Warrant Shares immediately prior to such record date without regard to any limitation on exercise contained therein. Notwithstanding anything herein to the contrary, the foregoing provisions in this Section 9(b) shall not apply to, or be triggered by, any rights issued by the Company (either separately or that attach to any securities of the Company) in connection with any stockholders rights agreement, poison pill or other similar anti-takeover provision under the Company’s certificate of incorporation, bylaws or other documents.

(c) Sales of Common Stock at less than the Exercise Price. From the date hereof until the end of the term of this Warrant, if the Company sells or issues shares of Common Stock at a price, or warrants, options, convertible debt or equity securities with an exercise price per share or a conversion price which is less than the Exercise Price then in effect, the Exercise Price shall be adjusted immediately thereafter so that the Exercise Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately before such sale or issuance and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such sale or issuance. Such adjustment shall be made successively whenever such an issuance is made. An adjustment pursuant to this Section 9(c) shall not result in any change in the number of Common Stock issuable upon exercise of this Warrant.

(d) Fundamental Transactions.

(i) Upon the closing of any Fundamental Transaction, the Successor Entity (or the Successor Entity’s Parent Entity) shall, as condition to such Fundamental Transaction purchase this Warrant from the Holder by paying to the Holder on the effective date of the Fundamental Transaction, cash in an amount equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of such Fundamental Transaction.

(ii) For purposes of this Section 9(c), the following definitions shall apply:

“Black Scholes Value” means the value of this Warrant based on the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day prior to the announcement of the applicable Fundamental Transaction for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of such date of request, (ii) an expected volatility equal to the greater of (A) 100% and (B) the 100 day volatility obtained from the HVT function on Bloomberg as of the day immediately following the public announcement of the applicable Fundamental Transaction, and (iii) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in the Fundamental Transaction.

“Fundamental Transaction” means that (A) the Company shall, directly or indirectly, in one or more related transactions, (i) consolidate or merge with or into (when the Company is not the surviving corporation) another Person, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person.

“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common shares or common stock or equivalent equity security is quoted or listed on a Trading Market (as defined in the Subscription Agreement), or, if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.

“Successor Entity” means, if applicable, the Person formed by, resulting from or surviving any Fundamental Transaction or, for the purposes of Section 9(c)(ii), the Person with which such Fundamental Transaction shall have been entered into.

(e) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to paragraph (a) of this Section 9, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the increased or decreased number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.

(f) Calculations. All calculations under this Section 9 shall be rounded down to the nearest whole cent or the nearest whole share, as applicable.

(g) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 9, the Company at its expense will, at the written request of the Holder, promptly compute such adjustment, in good faith, in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Company’s transfer agent.

(h) Notice of Corporate Events. If, while this Warrant is outstanding, the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including, without limitation, any granting of rights or Warrants to subscribe for or purchase any capital stock of the Company, (ii) enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then, except if such notice and the contents thereof shall be deemed to constitute material non-public information, the Company shall deliver to the Holder a notice of such transaction at least five (5) Trading Days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of its subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.

10. Payment of Exercise Price . The Holder may pay the Exercise Price in immediately available funds by wire transfer to an account designated by the Company or, alternatively, in its sole discretion, assuming there is not an effective Registration Statement covering the resale of the Warrant Shares, satisfy its obligation to pay the Exercise Price through a “cashless exercise”, in which event the Company shall issue to the Holder the number of Warrant Shares determined as follows:

X = Y [(A-B)/A]

where:

“X” equals the number of Warrant Shares to be issued to the Holder;

“Y” equals the total number of Warrant Shares with respect to which this Warrant is being exercised;

“A” equals the arithmetic average of the Closing Sale Prices of the shares of Common Stock (as reported by Bloomberg Financial Markets) for the five (5) consecutive Trading Days ending on the date immediately preceding the Exercise Date (the “Fair Market Value”); and

“B” equals the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

For purposes of this Warrant, “Closing Sale Price” means, for any security as of any date, the last trade price for such security on the Principal Trading Market for such security, as reported by Bloomberg Financial Markets, or, if such Principal Trading Market begins to operate on an extended hours basis and does not designate the last trade price, then the last trade price of such security prior to 4:00 P.M., New York City time, as reported by Bloomberg Financial Markets, or if the foregoing do not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg Financial Markets, or, if no last trade price is reported for such security by Bloomberg Financial Markets, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the “pink sheets” by Pink Sheets LLC. If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as determined in good faith by the Board of Directors of the Company. The Board of Directors’ determination shall be binding upon all parties absent demonstrable error. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.

11. [Intentionally Omitted]

12. Rule 144 . For purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in a “cashless exercise” transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued pursuant to the Subscription Agreement (provided that the Commission continues to take the position that such treatment is proper at the time of such exercise).

13. Limitations on Exercise . Notwithstanding anything to the contrary contained herein, the number of Warrant Shares that may be acquired by the Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to ensure that, following such exercise (or other issuance), the total number of shares of Common Stock then beneficially owned by the Holder and its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not exceed 4.99% (the “Maximum Percentage”) of the total number of then issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise). For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and its affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (i) exercise of the remaining, unexercised portion of this Warrant beneficially owned by such Person and its affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by the Holder and its affiliates (including, without limitation, any convertible notes or convertible preferred stock or Warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein; provided that in no event shall the aggregate number of shares beneficially owned by the Holder and its affiliates, calculated in accordance with Section 13(d) of the Exchange Act, exceed 9.99%). Except as set forth in the preceding sentence (other than the proviso thereto), for purposes of this paragraph (including the proviso in the immediately preceding sentence), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act; it being acknowledged by the Holder that the Company is not representing to such Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and such Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 13 applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by such Holder) and of which a portion of this Warrant is exercisable shall be in the sole discretion of a Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by such Holder) and of which portion of this Warrant is exercisable, in each case subject to such aggregate percentage limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 13, in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y) a more recent public announcement by the Company or (z) any other notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written request of the Holder, the Company shall within one (1) Trading Day confirm in writing to such Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including the Warrants, by the Holder and its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. By written notice to the Company, the Holder may from time to time increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% specified in such notice; provided that (i) any such increase will not be effective until the sixty-first (61st) day after such notice is delivered to the Company, and (ii) any such increase or decrease will apply only to the Holder and not to any other holder of Warrants. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 13 to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.

14. No Fractional Shares . No fractional Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of any fractional shares that would otherwise be issuable, the number of Warrant Shares to be issued shall be rounded down to the next whole number and the Company shall pay the Holder in cash the fair market value (based on the Closing Sale Price) for any such fractional shares.

15. Notices . Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in the Subscription Agreement prior to 5:30 P.M., New York City time, on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in the Subscription Agreement on a day that is not a Trading Day or later than 5:30 P.M., New York City time, on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service specifying next business day delivery, and (iv) upon actual receipt by the Person to whom such notice is required to be given, if by hand delivery. The address and facsimile number of a Person for such notices or communications shall be as set forth in the Subscription Agreement unless changed by such Person by three (3) Trading Days’ prior written notice to the other Persons in accordance with this Section 15.

16. Warrant Agent . The Company shall serve as Warrant agent under this Warrant. Upon fifteen (15) days’ notice to the Holder, the Company may appoint a new Warrant agent. Any corporation into which the Company or any new Warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new Warrant agent shall be a party or any corporation to which the Company or any new Warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor Warrant agent under this Warrant without any further act. Any such successor Warrant agent shall promptly cause notice of its succession as Warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.

17. Miscellaneous .

(a) No Rights as a Stockholder. The Holder, solely in such Person’s capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, amalgamation, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (except upon exercise of this Warrant) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.

(b) Authorized Shares. (i) The Company covenants that during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all commercially reasonable actions as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

(ii) Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate or articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (b) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant.

(c) Successors and Assigns. Subject to the restrictions on transfer set forth in this Warrant and in Section D.1 of the Subscription Agreement, and compliance with applicable securities laws, this Warrant may be assigned by the Holder. This Warrant may not be assigned by the Company without the written consent of the Holder except to a Successor Entity in the event of a Fundamental Transaction. This Warrant shall be binding on and inure to the benefit of the Company and the Holder and their respective successors and permitted assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant.

(d) Amendment and Waiver. Except as otherwise provided herein, the provisions of the Warrants may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder of this Warrant.

(e) Acceptance. Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein.

(f) Governing Law; Jurisdiction. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH OF THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT. EACH OF THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PERSON AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THE PURCHASE AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. EACH OF THE COMPANY AND THE HOLDER HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.

(g) Headings. The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.

(h) Severability. In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby, and the Company and the Holder will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.

	FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

	By:
		Name: Philip Turits
		Title: Treasurer

SCHEDULE 1

FORM OF EXERCISE NOTICE

[To be executed by the Holder to purchase shares of Common Stock under the Warrant]

Ladies and Gentlemen:

(1) The undersigned is the Holder of Warrant No. __________ (the “ Warrant”) issued by Fusion Telecommunications International, Inc., a Delaware corporation (the “Company”). Capitalized terms used herein and not otherwise defined herein have the respective meanings set forth in the Warrant.

(2) The undersigned hereby exercises its right to purchase __________ Warrant Shares pursuant to the Warrant.

(3) The Holder intends that payment of the Exercise Price shall be made as (check one):

o Cash Exercise

o “Cashless Exercise” under Section 10 of the Warrant, if permitted

(4) If the Holder has elected a Cash Exercise, the Holder shall pay the sum of $___________ in immediately available funds to the Company in accordance with the terms of the Warrant.

(5) Pursuant to this Exercise Notice, the Company shall deliver to the Holder Warrant Shares determined in accordance with the terms of the Warrant.

(6) By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company that in giving effect to the exercise evidenced hereby the Holder will not beneficially own in excess of the number of shares of Common Stock (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934) permitted to be owned under Section 13 of the Warrant to which this notice relates.

Dated:_______________________________

Name of Holder: ______________________

By:__________________________________

Name: _______________________________

Title: _______________________________

(Signature must conform in all respects to name of Holder as specified on the face of the Warrant)

SCHEDULE 2

FORM OF ASSIGNMENT

[To be completed and executed by the Holder only upon transfer of the Warrant]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _____________ (the “Transferee”) the right represented by the within Warrant to purchase _________ shares of Common Stock of Fusion Telecommunications International, Inc., a Delaware corporation (the “Company”) to which the within Warrant relates and appoints __________ attorney to transfer said right on the books of the Company with full power of substitution in the premises. In connection therewith, the undersigned represents, warrants, covenants and agrees to and with the Company that:

(a)

the offer and sale of the Warrant contemplated hereby is being made in compliance with Section 4(a)(1) of the United States Securities Act of 1933, as amended (the “Securities Act”) or another valid exemption from the registration requirements of Section 5 of the Securities Act and in compliance with all applicable securities laws of the states of the United States;

(b)

the undersigned has not offered to sell the Warrant by any form of general solicitation or general advertising, including, but not limited to, any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, and any seminar or meeting whose attendees have been invited by any general solicitation or general advertising;

(c)	the undersigned has read the Transferee’s investment letter included herewith, and to its actual knowledge, the statements made therein are true and correct; and

(d)

the undersigned understands that the Company may condition the transfer of the Warrant contemplated hereby upon the delivery to the Company by the undersigned or the Transferee, as the case may be, of a written opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that such transfer may be made without registration under the Securities Act and under applicable securities laws of the states of the United States.

Dated:

(Signature must conform in all respects to name of

holder as specified on the face of the Warrant)

Address of Transferee

In the presence of:

Exhibit 10.84

FUSION TELECOMMUNICATIONS INTERNATIONAL , INC.

FORM OF REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (the “ Agreement ”), dated as of , 2013, is made by and between Fusion Telecommunications, Inc., a Delaware corporation (the “ Company ”), and the undersigned investor (the “ Investor ”).

WHEREAS, in connection with that certain Subscription Agreement by and among the Company and the Investor (the “ Subscription Agreement ”), the Investor purchased from the Company units (the “ Units ”) at $1,000 per Unit, with each Unit consisting of (a) one share of Fusion’s Series B-2 Senior Cumulative Convertible Preferred Stock, par value $0.01 per share, with a stated value of $1,000 per share (the “ B-2 Preferred Stock ” or “ Preferred Shares ”), and (b) one warrant (the “ Warrant ”) to purchase shares of the Company’s common stock, par value $.01 per share (the “ Common Stock ”);

WHEREAS, each Preferred Share shall be convertible into a number of shares of Common Stock (the “ Conversion Shares ”) equal to the stated value of the Preferred Share divided by $.10 (the “ Preferred Conversion Price ”);

WHEREAS, each Warrant may be exercised into such number of shares of Common Stock (the “ Warrant Shares ”) equal to 40% of the stated value of number of Preferred Shares purchased by the Investor divided by 125% of the Preferred Conversion Price; and

WHEREAS, to induce the Investor to purchase the Units, the Company has agreed to register the Conversion Shares and the Warrant Shares pursuant to the terms of this Agreement.

NOW, THEREFORE, the Company and the Investor hereby covenant and agree as follows:

1. Certain Definitions . As used in this Agreement, the following terms shall have the following respective meanings:

“ Agreement ” shall have the meaning set forth in the Preamble hereof.

“ Closing ” shall mean the closing of the sale of the Units in which the Investor Purchased the Units.

“ Closing Date ” means the date on which the Closing occurred.

“ Commission ” shall mean the Securities and Exchange Commission, or any other federal agency at the time administering the Securities Act.

“ Company ” shall have the meaning set forth in the Preamble hereof.

“ Conversion Shares ” shall have the meaning set forth in the Preamble hereof.

“ Effectiveness Date ” shall mean that date which is one hundred twenty (120) days following the Filing Date (or, in the event the Commission reviews and has written comments to the Registration Statement, the one hundred fiftieth (150th) calendar day following the Closing Date); provided, however, that if the Company is notified by the Commission that the Registration Statement will not be reviewed or is no longer subject to further review and comments, the Effectiveness Date as to such Registration Statement shall be the fifth (5th) Trading Day following the date on which the Company is so notified if such date precedes the dates otherwise required above; provided, further, that if the Effectiveness Date falls on a Saturday, Sunday or other day that the Commission is closed for business, the Effectiveness Date shall be extended to the next Business Day on which the Commission is open for business..

“ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended.

“ Filing Date ” shall mean that date which is forty-five (45) days following the Final Closing Date; provided, however, that if the Filing Date falls on a Saturday, Sunday or other day that the Commission is closed for business, the Filing Date shall be extended to the next business day on which the Commission is open for business..

“ Final Closing Date ” means the Closing Date after which the Company ceases to offer for sale the Series B-2 Preferred Stock.

“ Offering ” shall refer to the Company’s offering of up to 20,000 Units, with an over-allotment option of up to 4,000 Units, at $1,000 per Unit consisting of one share of Series B-2 Preferred Stock and one Warrant.

“ Preferred Shares” shall have the meaning set forth in the Preamble hereof.

“ Preferred Conversion Price ” shall have the meaning set forth in the Preamble hereof.

“ Register ,” “ registered ” and “ registration ” each shall refer to a registration of the Registrable Securities effected by preparing and filing a registration statement or statements or similar documents in compliance with the Securities Act and the declaration or ordering of effectiveness of such registration statement or document by the Commission.

“ Registrable Securities ” shall mean the Conversion Shares and Warrant Shares issuable upon the conversion of the Preferred Shares and the exercise of the Warrant delivered to Investor in connection with the Offering; provided , however , that Warrant Shares that are Registrable Securities shall cease to be Registrable Securities (i) upon any sale pursuant to a Registration Statement or Rule 144 under the Securities Act or (ii) at such time as they become eligible for sale pursuant to Rule 144 under the Securities Act or another similar exemption under the Securities Act without the requirement for the Company to be in compliance with the current public information required thereunder and without volume or manner-of-sale restrictions; provided, further, that the maximum amount of Registrable Securities at any one time shall be limited by Rule 415.

“ Securities Act ” shall mean the Securities Act of 1933, as amended.

“ Share Authorization Date ” shall mean the effective date of the amendment to the Corporation’s Certificate of Incorporation filed with Secretary of State of the State of Delaware increasing the number of authorized shares of the Corporation’s Common Stock to such amount as shall permit all of the outstanding shares of Series B-2 Preferred Stock and Warrants to be converted or exercised into Common Stock.

“ Subscription Agreement ” shall mean the subscription agreement by which the Investor has agreed to purchase the Units from the Company and the Company agreed to sell the Units to the Investor pursuant to the Offering.

“ Warrant ” shall have the meaning set forth in the Preamble hereof.

“ Warrant Shares ” shall have the meaning set forth in the Preamble hereof.

Capitalized terms used but not defined herein shall have the meanings set forth in the Subscription Agreement.

2. Automatic Registration.

(a) On or prior to the Filing Date, the Company shall prepare and file with the Commission a registration statement (the “ Registration Statement ”) covering the resale of all of the Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415. The Registration Statement required hereunder shall be on Form S-1 or Form S-3, as applicable. Subject to the terms of this Agreement, the Company shall use its commercially reasonable efforts to cause the Registration Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event not later than the Effectiveness Date, and shall use its commercially reasonable efforts to keep the Registration Statement continuously effective under the Securities Act until the date when all Registrable Securities covered by the Registration Statement have been sold or may be sold pursuant to Rule 144 under the Securities Act as determined by counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s transfer agent and the Investor (the “ Effectiveness Period ”). The maximum amount of Registrable Securities that may be included in a Registration Statement at any one time shall be limited by Rule 415 as required by the Commission. In the event that there is a limitation by the Commission on the number of Registrable Securities that may be included for registration at one time, the Company shall promptly so advise the Investor and use its reasonable best efforts to file an additional Registration Statement covering such ineligible Registrable Securities, on a pro-rata basis, within 30 days of the date such securities become eligible and cause such Registration Statement to be declared effective by the Commission as soon as reasonably practicable.

(b) At any time after a Registration Statement has become effective, the Company may, upon giving prompt written notice of such action to the Investor, suspend the use of any such Registration Statement if, in the good faith judgment of the Company, the use of a Registration Statement covering the Registrable Securities would be detrimental to the Company or its stockholders at such time and the Company concludes, as a result, that it is in the best interests of the Company or its stockholders to suspend the use of such Registration Statement at such time. The Company shall have the right to suspend such Registration Statement for a period of not more than thirty (30) consecutive days from the date the Company notifies the Investor of such suspension, with such suspension not exceed an aggregate of sixty (60) days (whether or not consecutive) during any 12-month period. In the case of the suspension of any effective Registration Statement, the Investor, immediately upon receipt of notice thereof from the Company, will discontinue any sales of Registrable Securities pursuant to such Registration Statement until advised in writing by the Company that the use of such Registration Statement may be resumed.

(c) Company shall use its best efforts to have the Registration Statement declared effective as soon as reasonably practicable. The Company shall notify the Purchasers by facsimile or e-mail as promptly as practicable, and in any event, within twenty-four (24) hours, after any Registration Statement is declared effective and shall simultaneously provide the Investors with copies of any related Prospectus to be used in connection with the sale or other disposition of the securities covered thereby, unless a final prospectus is filed with SEC pursuant to Rule 424(b) under the Securities Act within twenty-four (24) hours, after any Registration Statement is declared effective. If (A) a Registration Statement covering the Registrable Securities is not filed by the Filing Date, (B) a Registration Statement covering the Registrable Securities is not declared effective by the Commission prior to the earlier of (i) five (5) Business Days after the Commission shall have informed the Company that no review of the Registration Statement will be made or that the Commission has no further comments on the Registration Statement or (ii) the Effectiveness Date or (C) after a Registration Statement has been declared effective by the Commission, sales cannot be made pursuant to such Registration Statement for any reason (including, without limitation, by reason of a stop order, or the Company’s failure to update the Registration Statement) or the inability of any Investor to sell the Registrable Securities covered thereby due to market conditions, then the Company will make pro rata payments to each Investor, as liquidated damages and not as a penalty, in an amount equal to 1.0% of the aggregate amount invested by such Investor for each 30-day period or pro rata for any portion thereof following the date by which such Registration Statement should have been filed or effective; provided, that the maximum payments to the Investors pursuant to this Section 2(c) shall not exceed 6% of the aggregate amount invested by such Investor. Such payments shall constitute the Investors’ exclusive monetary remedy for such events, but shall not affect the right of the Investors to seek injunctive relief.

3. Piggyback Registrations .

(a) Whenever the Company proposes to register (including, for this purpose, a registration effected by the Company for other stockholders) any of its securities under the Securities Act (other than pursuant to (i) a Registration Statement (as hereinafter defined) pursuant to Section 2 hereof or (ii) registration pursuant to a registration statement on Form S-4 or S-8 or any successor forms thereto), and the registration form to be used may be used for the registration of Registrable Securities (a “ Piggyback Registration ”), the Company will give written notice to the Investor of its intention to effect such a registration and will, subject to the provisions of subsection 3(b) hereof, include in such registration all Registrable Securities with respect to which the Company has received a written request for inclusion therein within fifteen (15) days after the receipt of the Company’s notice.

(b) If a Piggyback Registration is an underwritten secondary registration on behalf of holders of the Company’s securities, and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold in such offering without adversely affecting the marketability of the offering, the Company will include in such registration (i) first, the securities requested to be included in such registration by the holders requesting such registration, (ii) second, the Registrable Securities requested to be included in such registration (but not more than as determined by the managing underwriters), and (iii) third, other securities requested to be included in such registration.

(c) Notwithstanding the foregoing, if, at any time after giving a notice of Piggyback Registration and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such securities, the Company may, at its election, give written notice of such determination to each record holder of Registrable Securities and, following such notice, (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration, and (ii) in the case of determination to delay registering, shall be permitted to delay registering any Registrable Securities for the same period as the delay in registering such other securities.

4. Registration Procedures . If and whenever the Company is required by the provisions of Sections 2 and 3 hereof to use its commercially reasonable efforts to affect the registration of any Registrable Securities under the Securities Act, the Company will, as expeditiously as possible:

(a) prepare and file with the Commission the Registration Statement with respect to such securities and use its reasonable efforts to cause such Registration Statement to become effective in an expeditious manner;

(b) prepare and file with the Commission such amendments and supplements to such Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement continuously effective during the Effectiveness Period and comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such Registration Statement in accordance with the intended method of disposition set forth in such Registration Statement for such period;

(c) furnish to each seller of Registrable Securities and to each underwriter such number of copies of the Registration Statement and the prospectus included therein (including each preliminary prospectus) as such persons reasonably may request in order to facilitate the intended disposition of the Registrable Securities covered by such Registration Statement;

(d) use its commercially reasonable efforts (i) to register or qualify the Registrable Securities covered by such Registration Statement under the state securities or “blue sky” laws of such jurisdictions as the sellers of Registrable Securities or, in the case of an underwritten public offering, the managing underwriter, reasonably shall request, (ii) to prepare and file in those jurisdictions such amendments (including post-effective amendments) and supplements, and take such other actions, as may be necessary to maintain such registration and qualification in effect at all times for the period of distribution contemplated thereby and (iii) to take such further action as may be necessary or advisable to enable the disposition of the Registrable Securities in such jurisdictions, provided, that the Company shall not for any such purpose be required to qualify generally to transact business as a foreign corporation in any jurisdiction where it is not so qualified or to consent to general service of process in any such jurisdiction;

(e) use its commercially reasonable efforts to list the Registrable Securities covered by such Registration Statement with any securities exchange on which the Common Stock of the Company is then listed;

(f) immediately notify each seller of Registrable Securities and each underwriter under such Registration Statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event of which the Company has knowledge as a result of which the prospectus contained in such Registration Statement, as then in effect, includes any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing and promptly amend or supplement such Registration Statement to correct any such untrue statement or omission;

(g) promptly notify each seller of Registrable Securities of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose and make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible time;

(h) if the offering is an underwritten offering, enter into a written agreement with the managing underwriter selected in the manner herein provided in such form and containing such provisions as are usual and customary in the securities business for such an arrangement between such underwriter and companies of the Company’s size and investment stature, including, without limitation, customary indemnification and contribution provisions;

(i) if the offering is an underwritten offering, at the request of any seller of Registrable Securities, use its commercially reasonable efforts to furnish to such seller on the date that Registrable Securities are delivered to the underwriters for sale pursuant to such registration: (i) a copy of an opinion, dated such date, of counsel representing the Company for the purposes of such registration, addressed to the underwriters, stating that such Registration Statement has become effective under the Securities Act and that (A) to the knowledge of such counsel, no stop order suspending the effectiveness thereof has been issued and no proceedings for that purpose have been instituted or are pending or contemplated under the Securities Act, (B) the Registration Statement, the related prospectus and each amendment or supplement thereof comply as to form in all material respects with the requirements of the Securities Act (except that such counsel need not express any opinion as to financial statements or other financial or statistical information contained therein) and (C) to such other effects as reasonably may be requested by counsel for the underwriters; and (ii) a copy of a letter dated such date from the independent public accountants retained by the Company, addressed to the underwriters, stating that they are independent registered public accountants within the meaning of the Securities Act and that, in the opinion of such accountants, the financial statements of the Company included in the Registration Statement or the prospectus, or any amendment or supplement thereof, comply as to form in all material respects with the applicable accounting requirements of the Securities Act, and such letter shall additionally cover such other financial matters (including information as to the period ending no more than five business days prior to the date of such letter) with respect to such registration as such underwriters reasonably may request;

(j) take all actions reasonably necessary to facilitate the timely preparation and delivery of certificates (not bearing any legend restricting the sale or transfer of such securities) representing the Registrable Securities to be sold pursuant to the Registration Statement and to enable such certificates to be in such denominations and registered in such names as the Investor or any underwriters may reasonably request; and

(k) take all other reasonable actions necessary to expedite and facilitate the registration of the Registrable Securities pursuant to the Registration Statement.

5. Obligations of Investor . The Investor shall furnish to the Company such information regarding such Investor, the number of Registrable Securities owned and proposed to be sold by it, the intended method of disposition of such securities and any other information as shall be required to effect the registration of the Registrable Securities, and cooperate with the Company in preparing the Registration Statement and in complying with the requirements of the Securities Act.

6. Expenses .

(a) All expenses incurred by the Company in complying with Sections 2 and 3 including, without limitation, all registration and filing fees (including the fees of the Commission and any other regulatory body with which the Company is required to file), printing expenses, fees and disbursements of counsel and independent public accountants for the Company, fees and expenses (including Investor counsel fees up to $7,500 for review of the Registration Statement) incurred in connection with complying with state securities or “blue sky” laws, and fees of transfer agents and registrars are called “Registration Expenses.” All underwriting discounts and selling commissions applicable to the sale of Registrable Securities are called “Selling Expenses.”

(b) The Company will pay all Registration Expenses in connection with any Registration Statement filed hereunder, and the Selling Expenses in connection with each such Registration Statement shall be borne by the participating sellers in proportion to the number of Registrable Securities sold by each or as they may otherwise agree.

7. Indemnification and Contribution .

(a) In the event of a registration of any of the Registrable Securities under the Securities Act pursuant to the terms of this Agreement, the Company will indemnify and hold harmless and pay and reimburse, each seller of such Registrable Securities thereunder, each underwriter of such Registrable Securities thereunder and each other person, if any, who controls such seller or underwriter within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which such seller, underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement under which such Registrable Securities were registered under the Securities Act pursuant hereto or any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation or alleged violation of the Securities Act or any state securities or “blue sky” laws and will reimburse each such seller, each such underwriter and each such controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, that the Company will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon the Company’s reliance on an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by any such seller, any such underwriter or any such controlling person in writing specifically for use in such Registration Statement or prospectus.

(b) In the event of a registration of any of the Registrable Securities under the Securities Act pursuant hereto, each seller of such Registrable Securities thereunder, severally and not jointly, will indemnify and hold harmless the Company, each person, if any, who controls the Company within the meaning of the Securities Act, each officer of the Company who signs the Registration Statement, each director of the Company, each underwriter and each person who controls any underwriter within the meaning of the Securities Act, against all losses, claims, damages or liabilities, joint or several, to which the Company or such officer, director, underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon reliance on any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement under which such Registrable Securities were registered under the Securities Act pursuant hereto or any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and each such officer, director, underwriter and controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided that such seller will be liable hereunder in any such case if and only to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with information pertaining to such seller, as such, furnished in writing to the Company by such seller specifically for use in such Registration Statement or prospectus; and provided, further, that the liability of each seller hereunder shall be limited to the net proceeds received by such seller from the sale of Registrable Securities covered by such Registration Statement. Notwithstanding the foregoing, the indemnity provided in this Section 7(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or expense if such settlement is effected without the consent of such indemnified party and provided further, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability (or action in respect thereof) arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission in such Registration Statement, which untrue statement or alleged untrue statement or omission or alleged omission is completely corrected in an amendment or supplement to the Registration Statement and the undersigned indemnitees thereafter fail to deliver or cause to be delivered such Registration Statement as so amended or supplemented prior to or concurrently with the sale of the Registrable Securities to the person asserting such loss, claim, damage or liability (or actions in respect thereof) or expense after the Company has furnished the undersigned with the same.

(c) Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to such indemnified party other than under this Section 7 and shall only relieve it from any liability which it may have to such indemnified party under this Section 7 if and to the extent the indemnifying party is materially prejudiced by such omission. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 6 for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected; provided that if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded based upon written advice of its counsel that there may be reasonable defenses available to it that are different from or additional to those available to the indemnifying party or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, the indemnified party shall have the right to select a separate counsel and to assume such legal defenses and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred.

(d) In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any holder of Registrable Securities exercising rights under this Agreement, or any controlling person of any such holder, makes a claim for indemnification pursuant to this Section 7 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 7 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any such selling holder or any such controlling person in circumstances for which indemnification is provided under this Section 7; then, and in each such case, the Company and such holder will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion so that such holder is responsible for the portion represented by the percentage that the public offering price of its Registrable Securities offered by the Registration Statement bears to the public offering price of all securities offered by such Registration Statement, and the Company is responsible for the remaining portion; provided, that, in any such case, (A) no such holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered by it pursuant to such Registration Statement and (B) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 12(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation.

8. Changes in Capital Stock . If, and as often as, there is any change in the capital stock of the Company by way of a stock split, stock dividend, combination or reclassification, or through a merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions hereof so that the rights and privileges granted hereby shall continue as so changed.

9. Representations and Warranties of the Company . The Company represents and warrants to the Investor as follows:

(a) The execution, delivery and performance of this Agreement by the Company have been duly authorized by all requisite corporate action and will not violate any provision of law, any order of any court or other agency of government, the Articles of Incorporation or Bylaws of the Company or any provision of any indenture, agreement or other instrument to which it or any or its properties or assets is bound, conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the Company or its subsidiaries.

(b) This Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable in accordance with its terms, subject to any applicable bankruptcy, insolvency or other laws affecting the rights of creditors generally and to general equitable principles and the availability of specific performance.

10. Rule 144 Requirements . The Company agrees to:

(a) make and keep current public information about the Company available, as those terms are understood and defined in Rule 144 under the Securities Act;

(b) use its commercially reasonable efforts to file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements); and

(c) furnish to any holder of Registrable Securities upon request (i) a written statement by the Company as to its compliance with the reporting requirements of Rule 144 and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), (ii) a copy of the most recent annual or quarterly report of the Company, and (iii) such other reports and documents of the Company as such holder may reasonably request to avail itself of any similar rule or regulation of the Commission allowing it to sell any such securities without registration.

11. Termination . All of the Company’s obligations to register Registrable Shares under Sections 2, 3 and 4 hereto shall terminate upon the date on which the Investor holds no Registrable Securities or all of the Registrable Securities are eligible for resale in reliance on Rule 144 under the Securities Act without the requirement for the Company to be in compliance with the current public information required thereunder and without volume or manner-of-sale restrictions.

12. Miscellaneous .

(a) All covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto (including without limitation transferees of any Registrable Securities), whether so expressed or not.

(b) All notices, requests, consents and other communications hereunder shall be in writing and shall be delivered in person, mailed by certified or registered mail, return receipt requested postage prepaid, addressed or sent by a nationally recognized overnight courier service: (i) if to the Company, at 420 Lexington Avenue, Suite 1718, New York, NY 101070, Attn:, President; and (ii) if to any holder of Registrable Securities, to such holder at such address as may have been furnished to the Company or its counsel in writing by such holder; or, in any case, at such other address or addresses as shall have been furnished, in writing to the Company or its counsel (in the case of a holder of Registrable Securities) or to the holders of Registrable Securities (in the case of the Company) in accordance with the provisions of this paragraph. Any notice or other communication or deliveries hereunder shall be deemed given and effective upon actual receipt by the party to whom such notice is required to be given.

(c) This Agreement shall be governed by and construed under the laws of the State of New York, without giving effect to principles of conflicts of laws. The Company and Investor (i) agree that any legal suit, action or proceeding arising out of or relating to this Agreement shall be instituted exclusively in any state court located in New York, New York or in the United States District Court for the Southern District of New York, (ii) waive any objection which the Company or Investor may have now or hereafter to the venue of any such suit, action or proceeding, and (iii) irrevocably consent to the jurisdiction of any state court located in New York, New York, and the United States District Court for the Southern District of New York in any such suit, action or proceeding. The Company and Investor further agree to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in any state court located in New York, New York, or in the United States District Court for the Southern District of New York and agree that service of process upon the Company or Investor mailed by certified mail, return receipt requested, postage prepaid, to, in the case of the Company, the Company’s address, and in the case of the Investor, to the Investor’s address as set forth on the Company’s books and records, shall be deemed in every respect effective service of process upon the Company, in any such suit, action or proceeding. THE PARTIES HERETO AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY.

(d) In the event of a breach by the Company or by the Investor, of any of their obligations under this Agreement, the Investor or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and the Investor agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.

(e) This Agreement may not be amended or modified without the written consent of the Company and the Investor.

(f) Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof. No waiver shall be effective unless and until it is in writing and signed by the party granting the waiver.

(g) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

(h) If any provision of this Agreement shall be held to be illegal, invalid or unenforceable, such illegality, invalidity or unenforceability shall attach only to such provision and shall not in any manner affect or render illegal, invalid or unenforceable any other provision of this Agreement, and this Agreement shall be carried out as if any such illegal, invalid or unenforceable provision were not contained herein.

(i) This Agreement constitutes the entire contract among the Company and the Investor relative to the subject matter hereof and supersedes in its entirety any and all prior agreements, understandings and discussions with respect thereto.

(j) The headings of the sections of this Agreement are for convenience and shall not by themselves determine the interpretation of this Agreement.

[Signature Page Follows]

Signature Page to the Registration Rights Agreement

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

	COMPANY

	FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.


	By:
		Name:
		Title :

	INVESTOR

	COMPANY, PARTNERSHIP, OR TRUST


	By:
		Name:
		Title :

	INDIVIDUAL(S)


		Name:



		Name:

Exhibit 10.85

THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“ OID ”). A HOLDER MAY, UPON REQUEST, OBTAIN FROM BORROWER THIS NOTE’S ISSUE PRICE, ISSUE DATE, AMOUNT OF OID AND YIELD TO MATURITY BY CONTACTING BORROWER AT 420 LEXINGTON AVENUE, SUITE 1718, NEW YORK, NEW YORK 10170, ATTN: PRESIDENT.

Series C Note

$[500,000] December 16, 2013

FOR VALUE RECEIVED, Fusion NBS Acquisition Corp., a Delaware corporation (“ Borrower ”), hereby promises to pay to ____________ (the “ Lender ”), or its registered assigns, the principal sum of [FIVE HUNDRED THOUSAND DOLLARS ($500,000 ). The Principal Amount under this Note shall be payable in the amounts, at the times and in the manner set forth in the Purchase Agreement (as defined below). Interest on the Principal Amount under this Note shall be calculated at the rate or rates and in accordance with the Purchase Agreement (including any default interest, if applicable) and interest shall be payable in the amounts, at the times and in the manner set forth in the Purchase Agreement. The highest rate of interest provided for in this Note shall continue to apply to the debt evidenced by this Note until repaid notwithstanding the entry of judgment on this Note.

This Note is executed and delivered pursuant to that certain Securities Purchase Agreement and Security Agreement dated as of the date hereof among Borrower, Fusion Telecommunications International, Inc., a Delaware corporation (“ Parent ”), Network Billing Systems, LLC, a New Jersey limited liability company, each other direct and indirect subsidiary of Parent from time to time party thereto , the Lender, Praesidian Capital Opportunity Fund III, LP, a Delaware limited partnership, in its capacity as a lender and agent thereunder, and the other lenders party thereto (such agreement, as amended, supplemented, restated or otherwise modified from time to time, the “ Purchase Agreement ”). To the extent of any inconsistency with the Purchase Agreement, the Purchase Agreement shall supersede this Note.

Payments of principal, interest and other sums to be made pursuant to this Note shall be made without set-off or counterclaim in lawful money of the United States of America in same day or immediately available funds to the account designated by the Lender pursuant to the Purchase Agreement, and may be made by automatic charge on the day when due to any account of Borrower maintained by Lender or as otherwise provided in the Purchase Agreement.

This Note is one of several “Notes” referred to in, and is entitled to the benefits of, the Purchase Agreement, to which reference is made for a description of the security for this Note. Unless otherwise defined in this Note, terms used herein are used with the same meaning as provided in the Purchase Agreement.

The occurrence or existence of an Event of Default under the Purchase Agreement shall constitute an Event of Default under this Note. Should an Event of Default occur, then, subject to Lender’s right to waive acceleration, the entire unpaid Principal Amount of this Note, together with all accrued interest and all other sums due by Borrower hereunder or under any other Transaction Document shall, without notice to Borrower, become due and payable immediately, and payment of the same may be enforced and recovered in whole or in part at any time by one or more of the remedies provided to Lender in this Note or in any other Transaction Document, and in such case Lender may also recover all costs of suit and other expenses in connection therewith, together with reasonable attorneys’ fees for collection.

Borrower hereby waives to the fullest extent provided by law presentment for payment, demand, notice of nonpayment, notice of dishonor and protest of this Note. This Note shall be governed by, construed and enforced in accordance with, the internal laws of the state of New York. Reference is made to the Purchase Agreement for provisions regarding jurisdiction and venue.

The remainder of this page is intentionally left blank. Signatures follow.

IN WITNESS WHEREOF, Borrower, intending to be legally bound, has duly executed this Note the day and year first above written.

	FUSION NBS ACQUISITION CORP.

	By:
		Name:
		Title:

[Signature Page to __________ Series C Note]

Exhibit 10.86

Execution Version

AMENDED AND RESTATED

SECURITIES PURCHASE AGREEMENT AND SECURITY AGREEMENT

by and among

FUSION NBS ACQUISITION CORP.

as Borrower

and

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

and

NETWORK BILLING SYSTEMS, LLC

FUSION BVX LLC

AND EACH OTHER SUBSIDIARY

FROM TIME TO TIME PARTY HERETO

as Guarantors

and

PRAESIDIAN CAPITAL OPPORTUNITY FUND III, LP,

PRAESIDIAN CAPITAL OPPORTUNITY FUND III-A, LP,

PLEXUS FUND II, L.P.,

PLEXUS FUND III, L.P.

PLEXUS FUND QP III, L.P.

and

UNITED INSURANCE COMPANY OF AMERICA,

as Lenders

and

PRAESIDIAN CAPITAL OPPORTUNITY FUND III, LP,

as Agent

Dated as of December 31, 2013

(amending and restating the Securities Purchase Agreement and Security Agreement dated as of October 29, 2012, as amended)

TABLE OF CONTENTS

ARTICLE 1 DEFINITIONS

1.01 Definitions

1.02 Accounting Terms; Financial Statements

1.03 Knowledge of the Credit Parties

1.04 UCC Terms

1.05 Certain Matters of Construction

1.06 Effect of this Agreement; Modification of Transaction Documents.

ARTICLE 2 PURCHASE AND SALE OF THE SECURITIES

2.01 Purchase and Sale of the Series D Notes

2.02 Purchase and Sale of the New Warrants

2.03 Fees at Closing; Expenses

2.04 Closing

2.05 Financial Accounting Positions; Tax Reporting

2.06 Interest

ARTICLE 3 CONDITIONS TO THE OBLIGATIONS OF THE LENDERS TO PURCHASE THE SECURITIES

3.01 Representations and Warranties

3.02 Compliance with this Agreement

3.03 Secretary’s Certificates

3.04 Transaction Documents

3.05 Purchase of Securities Permitted by Applicable Laws

3.06 Opinion of Counsel

3.07 Approval of Counsel to the Lenders

3.08 Consents and Approvals

3.09 Lien Searches; Payment of Outstanding Indebtedness

3.10 No Material Judgment or Order

3.11 Pro Forma Balance Sheet, Leverage Ratio; Fixed Charge Coverage Ratio and EBITDA.

3.12 Good Standing Certificates

3.13 No Litigation

3.14 Interim Financial Statements; Projections

3.15 Consummation of the Transactions

3.16 Flow of Funds

3.17 Adverse Change

3.18 Insurance Certificates

3.19 Fees and Expenses

3.20 Conduct of Business

3.21 Transfer Taxes

3.22 SBA

3.23 Separateness Requirements

3.24 ACH

ARTICLE 4 Collateral; General Terms

4.01 Security Interest in the Collateral

4.02 Perfection of Security Interest

4.03 Safeguarding Collateral

4.04 Ownership of Collateral

4.05 Defense of Agent’s Interest

4.06 Financial Disclosure

4.07 Accounts

4.08 Exculpation of Liability

4.09 Financing Statements

4.10 Effectiveness of Security Interest in Certain Collateral of NBS.

4.11 Control Account – NBS Consents/Approvals.

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES

5.01 Existence and Power

5.02 Authorization; No Contravention

5.03 Governmental Authorization; Third Party Consents

5.04 Binding Effect

5.05 Litigation

5.06 Compliance with Laws

5.07 No Default or Breach

5.08 Title to Properties.

5.09 Use of Real Property

5.10 Taxes.

5.11 Financial Statements and Projections.

5.12 Operating Company

5.13 Disclosure.

5.14 Absence of Certain Changes or Events

5.15 O.S.H.A. and Environmental Compliance.

5.16 Investment Company/Government Regulations

5.17 Subsidiaries.

5.18 Capitalization

5.19 Private Offering

5.20 Broker’s, Finder’s or Similar Fees

5.21 Labor Relations

5.22 Employee Benefit Plans

5.23 Patents, Trademarks, Etc.

5.24 Potential Conflicts of Interest

5.25 Trade Relations

5.26 Indebtedness

5.27 Material Contracts

5.28 Insurance

5.29 [Intentionally Omitted].

5.30 Products Liability

5.31 Solvency

5.32 Questionnaire

5.33 Location of Assets

5.34 Certain Payments

5.35 Margin Requirements

5.36 Anti-Terrorism Laws.

5.37 Trading with the Enemy

5.38 Acquisition Documents

5.39 Equity Raise Documents

5.40 Interest Rate Hedges and Other Hedging Agreements

ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF THE LENDERS

6.01 Authorization; No Contravention

6.02 Binding Effect

6.03 Purchase for Own Account

6.04 Broker’s, Finder’s or Similar Fees

6.05 Governmental Authorization; Third Party Consent

ARTICLE 7 INDEMNIFICATION

7.01 Indemnification

7.02 Procedure; Notification

7.03 Survival

ARTICLE 8 AFFIRMATIVE COVENANTS

8.01 Financial Statements and Other Information

8.02 Preservation of Existence

8.03 Payment of Obligations

8.04 Compliance with Laws

8.05 Violations

8.06 Board Observer

8.07 Inspection

8.08 Maintenance of Properties

8.09 Insurance

8.10 Books and Records

8.11 Use of Proceeds.

8.12 Standards of Financial Statements

8.13 Reservation of Common Stock

8.14 New Real Property

8.15 Control Agreements; Cash Management Systems.

8.16 Collateral Access Agreements

8.17 Key-Man Life Insurance

8.18 NBS Consents and Notices.

8.19 Post-Closing Covenants.

ARTICLE 9 NEGATIVE COVENANTS

9.01 Fundamental Changes; Consolidations, Mergers and Acquisitions; Asset Sales

9.02 Creation of Liens

9.03 Guarantees

9.04 Investments

9.05 Loans

9.06 Restricted Payments

9.07 Indebtedness

9.08 Nature of Business

9.09 Transactions with Affiliates

9.10 Leases

9.11 Subsidiaries; Partnerships; Joint Ventures

9.12 Fiscal Year and Accounting Changes

9.13 Amendment of Organizational Documents

9.14 Limitation on Modifications of Indebtedness; Modifications of Certain Other Agreements; Etc.

9.15 Financial Covenants.

9.16 Compliance with ERISA

9.17 Prepayment of Indebtedness

9.18 Anti-Terrorism Laws

9.19 Trading with the Enemy Act

9.20 Additional Negative Pledges

ARTICLE 10 PRINCIPAL PAYMENTS

10.01 Optional Prepayment

10.02 Mandatory Prepayments.

10.03 Scheduled Payments

10.04 Application of Payments.

ARTICLE 11 EVENTS OF DEFAULT; REMEDIES

11.01 Events of Default

11.02 Acceleration and Remedies

11.03 Application of Proceeds

ARTICLE 12 MISCELLANEOUS

12.01 Survival of Representations and Warranties

12.02 Notices

12.03 Successors and Assigns.

12.04 Amendment and Waiv

12.05 Signatures; Counterparts

12.06 Headings

12.07 GOVERNING LAW

12.08 JURISDICTION; JURY TRIAL WAIVER.

12.09 Severability

12.10 Rules of Construction

12.11 Entire Agreement

12.12 Certain Expenses

12.13 Publicity

12.14 Further Assurances

12.15 Obligations of the Lenders

12.16 No Strict Construction

12.17 Transfer of the Notes.

ARTICLE 13 GUARANTEE

13.01 The Guarantee

13.02 Obligations Unconditional

13.03 Reinstatement

13.04 Subrogation

13.05 Remedies

13.06 Continuing Guarantee

13.07 General Limitation on Guarantors’ Obligations

13.08 Effectiveness of Guarantee by NBS.

ARTICLE 14 REGARDING AGENT

14.01 Appointment

14.02 Nature of Duties

14.03 Lack of Reliance on Agent and Resignation.

14.04 Certain Rights of Agent

14.05 Reliance

14.06 Notice of Default

14.07 Indemnification

14.08 Agent in its Individual Capacity

14.09 Delivery of Documents or Other Information

14.10 Credit Parties’ Undertaking to Agent

14.11 No Reliance on Agent’s Customer Identification Program

14.12 Other Agreements

ARTICLE 15 TAXES, YIELD PROTECTION AND ILLEGALITY

15.01 Taxes.

15.02 Certificates of Lenders

ARTICLE 16 SEPARATENESS COVENANTS

16.01 Separate Legal Entity

16.02 Capital

16.03 Dissolution

16.04 Commingled Funds

16.05 Segregated Assets

16.06 Bank Accounts

16.07 Employees

16.08 Agents

16.09 Independent Director

16.10 Organization Documents

16.11 Ministerial or Administrative Actions

LIST OF EXHIBITS AND SCHEDULES

Exhibits

Exhibit A Form of Series D Notes

Exhibit B Form of New Warrants

Exhibit C Compliance Certificate

Exhibit D Form of Joinder to Pledge Agreement

Exhibit F-1 Form of Plexus III Management Rights Agreement

Exhibit F-2 Form of Plexus QP III Management Rights Agreement

Exhibit J Projections

Exhibit L-3A Form of Plexus III SBA Side Letter

Exhibit L-3B Form of Plexus QP III SBA Side Letter

Exhibit M Form of Collateral Access Agreement

Exhibit N Form of First Amendment to Working Capital Intercreditor Agreement

Schedules

Schedule 2.01 – Lender Schedule – Series D Notes

Schedule 2.02 – Lender Schedule – New Warrants

Schedule 3.09 – Discharged Indebtedness

Schedule 4.04 – Collateral Exceptions

Schedule 4.09 – Other Financing Statements

Schedule 5.01 – Jurisdiction of Organization and Qualifications

Schedule 5.05 – Litigation

Schedule 5.06 – Compliance with Laws

Schedule 5.08(a) – Owned Real Property

Schedule 5.08(b) – Leased Real Property

Schedule 5.09 – Use of Real Property

Schedule 5.10 – Taxes

Schedule 5.14 – Absence of Changes

Schedule 5.17 – Subsidiaries

Schedule 5.18 – Capitalization

Schedule 5.20 – Brokers’ or Finders’ Fees

Schedule 5.21 – Labor Relations

Schedule 5.22 – Employee Benefit Plans

Schedule 5.24 – Conflicts of Interest

Schedule 5.25 – Trade Relations

Schedule 5.26 – Indebtedness

Schedule 5.27 – Material Contracts

Schedule 5.28 – Insurance

Schedule 5.30 – Products Liability

Schedule 5.33 – Location of Assets

Schedule 5.34 – Change of Control Payments

Schedule 9.02 – Permitted Liens

Schedule 9.04 – Investments

Schedule 9.07 – Indebtedness

AMENDED AND RESTATED

SECURITIES PURCHASE AGREEMENT AND SECURITY AGREEMENT

AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT AND SECURITY AGREEMENT, dated as of December 31, 2013, by and among FUSION NBS ACQUISITION CORP. a Delaware corporation (“ Borrower ”), FUSION TELECOMMUNICATIONS INTERNATIONAL, INC., a Delaware corporation (“ Parent ”), NETWORK BILLING SYSTEMS, LLC, a New Jersey limited liability company ( “NBS” ), FUSION BVX LLC, a Delaware limited liability company (“ BVX ”), and each other direct and indirect subsidiary of Parent from time to time party hereto (each such subsidiary together with Parent, the “ Guarantors ”, and together with the Borrower, the “ Credit Parties ”), PRAESIDIAN CAPITAL OPPORTUNITY FUND III, LP, a Delaware limited partnership (“ Fund III ”), PRAESIDIAN CAPITAL OPPORTUNITY FUND III-A, LP, a Delaware limited partnership (“ Fund III-A ”), PLEXUS FUND II, L.P., a Delaware limited partnership (“ Plexus ” and together with Fund III and Fund III-A and each of their respective successors and assigns, each an “Original Lender” and collectively, the “Original Lenders” ), PLEXUS FUND III, L.P., a Delaware limited partnership (“ Plexus III ”), PLEXUS FUND QP III, L.P., a Delaware limited partnership ( “Plexus QP III” ), UNITED INSURANCE COMPANY OF AMERICA, an Illinois corporation ( “United” and together with Fund III, Fund III-A Plexus, Plexus III and Plexus QP III and each of their respective successors and assigns, each a “ Lender ”, and collectively, the “ Lenders ”), and Fund III as agent for the Lenders (in such capacity, the “ Agent ”).

W I T N E S S E T H:

WHEREAS, the Credit Parties, the Original Lenders and the Agent entered into a Securities Purchase Agreement and Security Agreement, dated as of October 29, 2012 (as heretofore amended or otherwise modified, the “ Original Securities Purchase Agreement ”) pursuant to which (i)(A) the Borrower issued to the Original Lenders Senior Notes in the initial aggregate principal amount of $6,500,000 bearing interest at 10% per annum (“ Series A Notes ”) and Senior Notes in the initial aggregate principal amount of $10,000,000 bearing interest at 11.5% per annum (“ Series B Notes ”) and (B) in connection with the Series A Notes, Parent issued to the Original Lenders Warrants (the “ Original Warrants ”) to purchase 5.0% of the equity interests of Parent, calculated on a fully-diluted basis, as of the Initial Closing Date (as hereinafter defined), and (ii) the Borrower issued to the Original Lenders Senior Notes in the initial aggregate principal amount of $500,000 bearing interest at 11.15% per annum (the “Series C Notes” );

WHEREAS , the Borrower wishes to sell to the Lenders (other than Plexus II), and such Lenders wish to purchase from the Borrower, Senior Notes in the initial aggregate principal amount of $25,000,000 bearing interest at 11.15% per annum (“ Series D Notes ”);

WHEREAS , in connection with the purchase of the Series D Notes, Parent wishes to sell to the Lenders purchasing the Series D Notes, and such Lenders wish to purchase from Parent, Warrants (the “New Warrants” ) to purchase 4.25% of the equity interests of Parent, calculated on a fully-diluted basis; and

WHEREAS, the parties hereto have agreed to amend and restate the Original Securities Purchase Agreement in order to, among other things (i) provide for the issuance and sale of the Series D Notes and the New Warrants, (ii) add BVX as a Guarantor and Credit Party hereunder, (iii) modify the interest rate on the Series A Notes and the Series B Notes, and (iv) extend the maturity date of the Series A Notes, the Series B Notes and the Series C Notes.

NOW, THEREFORE , in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree to amend and restate the Original Securities Purchase Agreement and the Original Securities Purchase Agreement is hereby amended and restated in its entirety as follows:

ARTICLE 1

DEFINITIONS

1.01 Definitions

. As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated:

“ Accountants ” shall have the meaning assigned to that term in Section 8.01(a).

“ Affiliate ” shall mean, with respect to any Person, any other Person (a) directly or indirectly controlling, controlled by, or under common control with, such Person, (b) directly or indirectly owning or holding five percent (5%) or more of any Equity Interests in such Person, or (c) five percent (5%) or more of whose voting stock or other Equity Interests is directly or indirectly owned or held by such Person. For purposes of this definition, “control” (including with correlative meanings, the terms “controlling”, “controlled by” and under “common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“ Agent ” shall have the meaning set forth in the first paragraph of this Agreement, and shall include its successors and assigns.

“ Agreement ” shall mean this Amended and Restated Securities Purchase Agreement and Security Agreement, including the exhibits and schedules attached hereto, as the same may be amended, restated, supplemented or otherwise modified in accordance with the terms hereof.

“ Anti-Terrorism Laws ” shall mean any Applicable Laws relating to terrorism or money laundering, including Executive Order No. 13224, the USA Patriot Act, the Applicable Laws comprising or implementing the Bank Secrecy Act, and the Applicable Laws administered by the United States Treasury Department’s Office of Foreign Asset Control (as any of the foregoing Applicable Laws may from time to time be amended, renewed, extended, or replaced).

“ Applicable Law ” shall mean all international, foreign, federal, provincial, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

“ Authorized Officer ” shall mean any of the President, Chief Executive Officer, Chief Operating Officer, Chief Financial Officer or Controller of a Credit Party (or any other officer authorized by a Credit Party to perform all or any portion of the same or similar functions of any of such enumerated officers, as applicable).

“ Bank Secrecy Act ” shall mean 31 U.S.C. Sections 5311-5330, as the same has been, or shall hereafter be, extended, amended or replaced.

“ Board of Directors ” shall mean the board of directors of any corporation, board of managers of any limited liability company or similar governing body of any other Person.

“ Blocked Person ” shall mean (i) a Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (ii) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (iii) a Person with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law, (iv) a Person that commits, threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224, (v) a Person that is named as a “specially designated national” on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control at its official website or any replacement website or other replacement official publication of such list, or (vi) a Person who is affiliated or associated with a person or entity listed above.

“ Borrower ” shall have the meaning set forth in the first paragraph of this Agreement, and shall include each Person which becomes a successor or permitted assign of Borrower.

“ BVX ” shall have the meaning set forth in the first paragraph of this Agreement, and shall include each Person which becomes a successor or permitted assign of BVX.

“ BVX Acquisition Agreement ” shall mean the Asset Purchase and Sale Agreement, dated as of August 30, 2013, by and among Parent, BVX (as the successor in interest to Fusion Broadvox Acquisition Corp.), BroadvoxGo!, LLC, a Delaware limited liability company and Cypress Communications, LLC, a Delaware limited liability company, as amended by the First Amendment thereto dated as of November 15, 2013 and the Second Amendment thereto dated as of December 16, 2013.

“ BVX Acquisition Documents ” shall mean the BVX Acquisition Agreement and all other agreements, documents and instruments delivered in connection therewith to which a Credit Party is a party thereunder, including all exhibits and schedules thereto.

“ Business ” shall mean the business of providing Internet Protocol voice, data and cloud services.

“ Business Day ” shall mean any day other than a Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required by law or executive order to close.

“ Capital Expenditures ” shall mean expenditures made or liabilities incurred for the acquisition of any fixed assets or improvements, replacements, substitutions or additions thereto which have a useful life of more than one year, including the total principal portion of Capital Lease Obligations, which, in accordance with GAAP, would be classified as capital expenditures and all other expenditures made or liabilities incurred for intangible assets, which are capitalized.

“Capital Lease” shall mean, with respect to any Person, any lease of any property (whether real, personal or mixed) by such Person as lessee which would, in accordance with GAAP, be required to be accounted for as a capital lease on the balance sheet of such Person.

“ Capital Lease Obligations ” shall mean any Indebtedness of the Credit Parties represented by obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

“ Cash Equivalents ” shall mean: (i) marketable direct obligations issued or unconditionally guaranteed by the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one (1) year from the date of acquisition thereof; (ii) commercial paper maturing no more than one (1) year from the date issued and, at the time of acquisition, having a rating of at least A-1 from Standard & Poor’s Ratings Group, a division of McGraw-Hill, Inc., or a least P-1 from Moody’s Investors Service, Inc.; (iii) certificates of deposit or bankers’ acceptances maturing within one (1) year from the date of issuance thereof issued by, or overnight reverse repurchase agreements from, any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia having combined capital and surplus of not less than $500,000,000; (iv) time deposits maturing no more than thirty (30) days from the date of creation thereof with commercial banks having membership in the Federal Deposit Insurance Corporation in amounts not exceeding the lesser of $100,000 or the maximum amount of insurance applicable to the aggregate amount of the Credit Parties’ and their respective Subsidiaries’ deposits at such institution; and (v) deposits or investments in mutual or similar funds offered or sponsored by brokerage or other companies having membership in the Securities Investor Protection Corporation in amounts not exceeding the lesser of $100,000 or the maximum amount of insurance applicable to the aggregate amount of the Credit Parties’ and their respective Subsidiaries’ deposits at such institution. Notwithstanding the foregoing, unless otherwise consented to in writing by Agent, Cash Equivalents will not include and each Credit Party will be prohibited from purchasing, purchasing participations in, entering into any type of swap or other equivalent derivative transaction, or otherwise holding or engaging in any ownership interest in any type of debt instrument, including any corporate or municipal bond with a long-term nominal maturity for which the interest rate is reset through a dutch auction and more commonly referred to as an auction rate security.

“ CERCLA ” shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §§9601 et seq.

“ Change in Law ” shall mean the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority.

“ Change of Control ” shall mean (a) Parent ceasing to (i) own, directly or indirectly, one hundred percent (100%) of the issued and outstanding Equity Interests of Borrower, or (ii) control, by contract, ownership or otherwise, that percentage of the outstanding voting Equity Interests of Borrower necessary at all times to elect a majority of the Board of Directors of Borrower and to direct the management policies and decisions of Borrower, (b) any merger, consolidation or sale of all or substantially all of the property or assets of Borrower or Parent or of one or more of Parent’s or Borrower’s Subsidiaries that, individually or in the aggregate, constitute a material part of the business, operations or assets of the Credit Parties taken as a whole, (c) the occurrence of any “Change of Control” (or similar term) under (and as defined in) any documents evidencing Indebtedness senior to the Indebtedness existing pursuant to the Notes and this Agreement. For purposes of this definition “control” means the power to direct or cause the direction of management and policies of a Person, whether by contract or otherwise, (d) both (x) Matthew Rosen ceasing to be the Chief Executive Officer of Parent for any reason unless a successor, reasonably acceptable to Agent, is appointed within 4 months thereof, and (y) Marvin Rosen ceasing to be the Chairman of the Board of Directors of Parent for any reason unless a successor, reasonably acceptable to Agent, is appointed within four (4) months thereof, or (e) Jonathan Kaufman ceasing to be an executive officer of NBS for any reason unless a successor, reasonably acceptable to Agent, is appointed within four (4) months thereof.

“ CIP Regulations ” shall have the meaning assigned to that term in Section 14.11.

“ Closing ” shall have the meaning assigned to that term in Section 2.04.

“ Closing Date ” shall have the meaning assigned to that term in Section 2.04.

“ Code ” shall mean the Internal Revenue Code of 1986, as the same now exists or may from time to time hereafter be amended, modified, recodified or supplemented, together with all rules, regulations and interpretations thereunder or related thereto.

“ Collateral ” shall mean and include all personal property and fixtures, whether now owned or hereafter created or acquired, and wherever located, and consisting of (capitalized terms used in this definition shall have the meaning set forth in the UCC):

(a) all Accounts;

(b) all Equipment (other than motor vehicles);

(d) all Inventory;

(e) all Investment Property;

(f) all Deposit Accounts;

(g) all Instruments;

(h) all Chattel Paper and Electronic Chattel Paper;

(i) all Letter of Credit Rights;

(j) all Documents;

(k) all Commercial Tort Claims;

(l) all Goods;

(m) all Software; and

(n) all right, title and interest in and to, whether now owned or hereafter acquired and wherever located, (i) its respective goods and other property including all merchandise returned or rejected by Customers, relating to or securing any of the Accounts; (ii) all rights as a consignor, a consignee, an unpaid vendor, mechanic, artisan, or other lienor, including stoppage in transit, setoff, detinue, replevin, reclamation and repurchase; (iii) all other rights and interests, including warranty claims, relating to any goods; (iv) if and when obtained, all guarantees from and all real and personal property of third parties in which such Person has been granted a lien or security interest as security for the payment or enforcement of Accounts; and (v) all documents, instruments, and agreements supporting the foregoing or delivered in connection therewith;

(o) all ledger sheets, ledger cards, files, correspondence, records, books of account, business papers, computers, computer software (owned or in which it has an interest), computer programs, tapes, disks and documents relating to any other property constituting part of the Collateral; and

(p) all proceeds and products of the foregoing in whatever form, including: cash, deposit accounts (whether or not comprised solely of proceeds), certificates of deposit, insurance proceeds (including hazard, flood and credit insurance), negotiable instruments and other instruments for the payment of money, chattel paper, security agreements, documents, eminent domain proceeds, condemnation proceeds and tort claim proceeds.

Notwithstanding the foregoing, none of the following items will be included within the Collateral: (a) assets if the granting of a security interest in such asset would: (I) be prohibited by Applicable Laws (other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the UCC notwithstanding such prohibition), or (II) be prohibited by contract (except to the extent such prohibition is overridden by UCC Section 9-408) so long as such negative pledge is otherwise permitted under clause (c) hereof, (b) any property and assets, the pledge of which would require a Consent from a Governmental Authority, unless and until such Consent shall have been obtained or waived, and (c) assets in circumstances where the Lenders and the Borrower agree in writing that the cost, burden or consequence (including adverse tax consequences) of obtaining or perfecting a security interest in such assets is excessive in relation to the practical benefit afforded thereby, it being understood that neither the Borrower nor any Subsidiary thereof shall be required to provide any guarantee, pledge or asset support arrangement that, in the reasonable judgment of the Borrower, would subject the Borrower to any adverse tax consequence due to the application of Section 956 of the Code.

“ Commission ” shall mean the Securities and Exchange Commission or any similar agency then having jurisdiction to enforce the Securities Act.

“Common Stock” shall mean shares of common stock of Parent, $0.01 par value per share.

“ Compliance Certificate ” shall have the meaning assigned to that term in Section 8.01(d).

“ Consents ” shall mean all filings with and all Licenses, consents, approvals, authorizations, qualifications and orders of Governmental Authorities and other third parties, domestic or foreign, necessary to carry on each Credit Party’s business or necessary (including to avoid a conflict or breach under any agreement, instrument, other document, license, permit or other authorization) for the execution, delivery or performance of this Agreement or any of the Transaction Documents, including any Consents required under all applicable federal, state or other Applicable Law.

“ Consolidated Basis ” shall mean, with respect to the financial statements or other financial information of a Person, the accounts and other items of such Person and its Subsidiaries on a consolidated basis in accordance with GAAP applied on a basis consistent with prior practices.

“ Consolidating Basis ” shall mean, with respect to the financial statements or other financial information of a Person, the accounts and other items of such Person and its Subsidiaries on a consolidating basis in accordance with GAAP applied on a basis consistent with prior practices.

“ Contingent Obligation ” shall mean, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto.

“ Contractual Obligations ” shall mean as to any Person, any provision of any security issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument or arrangement (whether in writing or otherwise) to which such Person is a party or by which it or any of such Person’s property is bound.

“ Control Agreement ” shall mean a tri-party deposit account, securities account or commodities account control agreement by and among the applicable Credit Party, Agent and the depository, securities intermediary or commodities intermediary, each in form and substance reasonably satisfactory in all respects to Agent and in any event providing to Agent “control” of such deposit account, securities or commodities account within the meaning of Articles 8 and 9 of the UCC, as applicable, on a “springing” dominion basis upon the occurrence and during the continuance of an Event of Default.

“ Controlled Group ” shall mean all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which are, together with any Credit Party, treated as a single employer under Section 414 of the Code.

“Corporate Allocation Payments” shall mean intercompany payments made to Parent for allocation of expenses related to management support, professional services incurred, rent or utilities as set forth in the projections provided to Lenders in accordance with Section 8.01(g).

“Cost of Money” shall have the meaning defined in and be calculated as provided in the SBA Regulations.

“ Credit Parties ” shall have the meaning set forth in the first paragraph of this Agreement, and shall include their respective successors and assigns.

“ Customer ” shall mean and include the account debtor with respect to any Account and/or the prospective purchaser of goods, services or both with respect to any contract or contract right, and/or any party who enters into or proposes to enter into any contract or other arrangement with a Person, pursuant to which such Person is to deliver any personal property or perform any services.

“ Default ” shall mean a condition, act or event that, after notice or lapse of time or both, would constitute an Event of Default if that condition, act or event were not cured or removed within any applicable grace or cure period.

“ Earnings Before Interest and Taxes ” shall mean for any period the sum of (i) net income (or loss) of the Borrower on a Consolidated Basis for such period (excluding extraordinary gains and extraordinary losses, so long as any such exclusion from the calculation of Earnings Before Interest and Taxes is made in accordance with GAAP), plus (ii) to the extent deducted in the determination of net income (or loss) for such period, (A) all interest expense of the Borrower on a Consolidated Basis for such period, including interest expense resulting from original issue discount and other amortization of debt discount as determined in accordance with GAAP, plus (B) all charges against income of the Borrower on a Consolidated Basis for such period for federal, state and local income taxes, plus (C) any non-cash expense of the Borrower on a Consolidated Basis associated with ASC Topic 350, ASC Topic 360, ASC Topic 480 or ASC Topic 815, plus (D) any non-cash expenses of the Borrower on a Consolidated Basis associated with stock options, warrants or stock grants of Borrower and its Subsidiaries, plus (E) any non-cash expenses incurred in connection with the early extinguishment of Indebtedness of the Borrower or its Subsidiaries, plus (F) any other unusual or one-time items which are mutually agreed upon by the Lenders and the Credit Parties. In addition, the calculation of Earnings Before Interest and Taxes for any period shall be adjusted to exclude (w) any aggregate net gain or loss arising from any permitted sale, conversion, exchange or other disposition of capital assets made during such period, including (1) all non-current assets, and (2) without duplication, the following assets, whether or not current: fixed assets, whether tangible or intangible, inventory sold in connection with the disposition of fixed assets and all Equity Interests and other securities, (x) any net gain from the collection during such period of any proceeds of life insurance policies, (y) any gain or loss (or other impact to the financial statements) arising from the repurchase during such period of Equity Interests and (z) any non-cash income or expense realized during such period relating to an Interest Rate Hedge or any Other Hedging Agreement.

“ EBITDA ” shall mean for any period, the sum of (i) Earnings Before Interest and Taxes of the Borrower on a Consolidated Basis for such period, plus to the extent deducted in the determination of net income (or loss) for such period (ii) depreciation expenses of the Borrower on a Consolidated Basis for such period plus (iii) amortization expenses of the Borrower on a Consolidated Basis for such period.

“ Environmental Laws ” shall mean all present and future Applicable Laws, Requirements of Law, or Consents, relating to the protection of human health and safety or the environment, including (a) all Applicable Laws, Requirements of Law, or Consents, pertaining to reporting, licensing, permitting, investigation, and remediation of emissions, discharges, releases, or threatened releases of hazardous materials, chemical substances, pollutants, contaminants, or hazardous or toxic substances, materials or wastes whether solid, liquid, or gaseous in nature, into the air, surface water, groundwater, or land, or relating to the presence, generation, discharge, release, removal, manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of chemical substances, pollutants, emissions, contaminants, or hazardous, radioactive or toxic substances, materials, or wastes, whether solid, liquid, or gaseous in nature; and (b) all Applicable Laws, Requirements of Law or Consents, pertaining to the protection of the health and safety of employees or the public.

“ Equity Documents ” shall mean the Warrants and all documents, instruments and agreements executed or delivered in connection therewith, as each may be amended, restated, supplemented or otherwise modified from time to time.

“ Equity Interests ” of any Person shall mean any and all shares, rights to purchase, options, warrants, general, limited or limited liability partnership interests, member interests, participation or other equivalents of or interest in (regardless of how designated) equity of such Person, whether voting or nonvoting, including common stock, preferred stock, convertible securities or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the Commission under the Exchange Act).

“Equity Raise” shall mean the sale by Parent of units consisting of warrants for Common Stock and convertible preferred stock of Parent for not less than $10,000,000, pursuant to the Equity Raise Documents.

“Equity Raise Documents” shall mean Parent’s Private Placement Memorandum dated December 11, 2013, and all documents, instruments and agreements executed or delivered in connection therewith, as each may be amended, modified, supplemented or restated from time to time.

“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended and in effect from time to time and the rules and regulations promulgated thereunder.

“ ERISA Affiliate ” shall mean any trade or business (whether or not incorporated) under common control with any Credit Party within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

“ Escrowed Funds ” shall have the meaning assigned to that term in Section 4.11.

“ Event of Default ” shall have the meaning assigned to such term in Section 11.01.

“ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder.

“ Excluded Taxes ” shall mean, with respect to any Lender or any other recipient of any payment to be made by or on account of any obligation of any Borrower hereunder, (i) Taxes imposed on net income imposed by the jurisdiction in which the Lender is organized or doing business by virtue of such Lender being organized or doing business in such jurisdiction or in which its principal executive office or applicable lending office is located, (ii) taxes imposed under FATCA, and (iii) U.S. withholding taxes (other than FATCA) unless such U.S. withholding taxes are imposed as a result of a Change in Law (including a change in interpretation of existing law by a court or administrative agency) after the date of this Agreement.

“ Executive Order No. 13224 ” shall mean the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has been, or shall hereafter be renewed, extended, amended or replaced.

“ FATCA ” shall mean Sections 1471 through 1474 of the Code (as of the date hereof) and any regulations or official interpretations thereof (including any Revenue Ruling, Revenue Procedure, Notice or similar guidance issued by the Internal Revenue Service thereunder as a precondition to relief or exemption from Taxes under such provisions); provided , however , FATCA shall also include any amendments to Section 1471 through 1474 of the Code if, as amended, FATCA provides a commercially reasonable mechanism to avoid the tax imposed thereunder by satisfying the information reporting and other requirements of FATCA.

“ Fixed Charge Coverage Ratio ” shall mean, with respect to any fiscal period of the Borrower, the ratio of (a) EBITDA for such period, less Capital Expenditures of the Borrower on a Consolidated Basis during such period which are not funded by borrowed money (but excluding from “borrowed money” proceeds of revolving advances under the Working Capital Agreement) less all taxes (whether federal, local, state, income or otherwise) actually paid by the Borrower on a Consolidated Basis during such period to (b) Senior Debt Payments and all payments made pursuant to, or in respect of, the Seller Note, in each case made or scheduled to be made by the Borrower on a Consolidated Basis during such period, plus payments made by the Borrower on a Consolidated Basis during such fiscal period on account of Capital Lease Obligations.

“ Foreign Lender ” shall mean any Lender that is not a United States Person as defined in Section 7701(a)(30) of the Code.

“ Fund III ” shall have the meaning provided in the preamble hereto.

“ Fund III-A ” shall have the meaning provided in the preamble hereto.

“ Funded Debt ” shall mean, with respect to the Borrower and its Subsidiaries, all Indebtedness for borrowed money for which the Borrower or such Subsidiary is obligated including all Indebtedness under all Capital Lease Obligations, it being understood that Funded Debt shall not include Indebtedness evidenced by the Seller Note.

“ GAAP ” shall mean generally accepted accounting principles in effect within the United States, consistently applied.

“ Governmental Authority ” shall mean the government of any nation, state, city, locality or other political subdivision of any thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, regulation or compliance, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

“ Guarantor ” shall have the meaning set forth in the first paragraph of this Agreement and any other Person who may hereafter guarantee payment or performance of the whole or any part of the obligations of the Borrower under the Notes and this Agreement and “ Guarantors ” shall mean collectively all such Persons.

“Guarantors’ Obligations” shall have the meaning assigned to that term in Section 13.01.

“ Guaranty ” shall mean any guaranty of the obligations of the Borrower executed by a Guarantor in favor of Agent or Lenders.

“ Hazardous Materials ” shall mean any chemical, pollutant, contaminant, pesticide, petroleum or petroleum product or byproduct, radioactive substance, solid waste (hazardous or extremely hazardous), special, dangerous or toxic waste, hazardous or toxic substance, chemical or material regulated, listed, referred to, limited or prohibited under any Environmental Law, including: (i) friable or damaged asbestos, asbestos containing material, polychlorinated biphenyls (PCBs), solvents and waste oil; (ii) any “hazardous substance” as defined under CERCLA or any Environmental Law; (iii) any hazardous waste defined under RCRA or any Environmental Law; and (iv) even if not prohibited, listed, limited or regulated by an Environmental Law, all pollutants, contaminants, hazardous, dangerous or toxic chemical, materials, wastes or any other substances, including any industrial process or pollution control waste (whether or not hazardous within the meaning of RCRA) which could pose a hazard to the environment, or the health or safety of any person or impair the use or value of any portion of the Real Property of the Credit Parties or their respective Subsidiaries.

“ Hazardous Substance ” shall mean any flammable explosives, radon, radioactive materials, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous materials, Hazardous Wastes, hazardous or Toxic Substances or related materials as defined in CERCLA, the Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections 1801, et seq.), RCRA or any other applicable Environmental Law and in the regulations adopted pursuant thereto.

“ Hazardous Wastes ” shall mean all waste materials subject to regulation under CERCLA, RCRA or applicable state law, and any other applicable Federal and state laws now in force or hereafter enacted relating to hazardous waste disposal.

“ Indebtedness ” shall mean, as to any Person, without duplication, (i) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services, (ii) the maximum amount available to be drawn or paid under all letters of credit, bankers’ acceptances, bank guaranties, surety and appeal bonds and similar obligations issued for the account of such Person and all unpaid drawings and unreimbursed payments in respect of such letters of credit, bankers’ acceptances, bank guaranties, surety and appeal bonds and similar obligations, (iii) all indebtedness of the types described in clause (i), (ii), (iv), (v), (vi) or (vii) of this definition secured by any Lien on any property owned by such Person, whether or not such indebtedness has been assumed by such Person (provided that, if the Person has not assumed or otherwise become liable in respect of such indebtedness, such indebtedness shall be deemed to be in an amount equal to the fair market value of the property to which such Lien relates as determined in good faith by such Person), (iv) the aggregate amount of all Capital Lease Obligations of such Person, (v) all obligations of such Person to pay a specified purchase price for goods or services, whether or not delivered or accepted, i.e. , take-or-pay and similar obligations, (vi) all Contingent Obligations of such Person, (vii) all obligations under any Interest Rate Hedges, Other Hedging Agreements or under any similar type of agreement. Notwithstanding the foregoing, Indebtedness shall not include trade payables, accrued expenses and deferred Tax and other credits incurred by any Person in the Ordinary Course of Business.

“ Indemnified Party ” shall have the meaning assigned to that term in Section 7.01.

“ Indemnified Taxes ” shall mean Taxes other than Excluded Taxes or Other Taxes.

“ Independent Director ” shall mean a natural Person who is designated by the Required Lenders.

“ Initial Closing Date ” shall mean October 29, 2012.

“ Intellectual Property Security Agreement ” shall mean the Intellectual Property Security Agreement, dated as of the Initial Closing Date, by and among the Borrower, each Subsidiary of Parent from time to time party thereto, and the Agent, substantially in the form of Exhibit E to the Original Securities Purchase Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Interest ” shall have the meaning assigned to that term in Section 2.06.

“ Interest Payment Date ” shall have the meaning assigned to that term in Section 2.06(a).

“ Interest Rate ” shall have the meaning assigned to that term in Section 2.06.

“ Interest Rate Hedge ” shall mean an interest rate exchange, collar, cap, swap, adjustable strike cap or similar agreements entered into by any Credit Party solely to provide protection to, or minimize the impact upon, the Credit Parties of increasing floating rates of interest applicable to Indebtedness.

“ Investment ” shall mean, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of the Equity Interests of another Person, (b) a loan, advance or capital contribution to, guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

“ ISG ” shall mean Interconnect Services Group II, LLC, a/k/a/ Interconnect Systems Group II, LLC, a New Jersey limited liability company.

“ Lender ” and “ Lenders ” shall have the meanings set forth in the first paragraph of this Agreement, and shall include each Person which becomes a transferee, successor or assign of any Lender.

“ Lending Office ” shall mean, with respect to any Lender, the office or offices of such Lender specified in Section hereto, or such other office or offices of such Lender as it may notify the Borrower pursuant to Section 12.02 from time to time.

“ Leverage Ratio ” shall mean, with respect to each measuring period, the ratio of (a) the aggregate principal balance of all Funded Debt outstanding on the last day of such measuring period to (b) EBITDA for such measuring period, where “measuring period” shall mean each period of four consecutive fiscal quarters of the Borrower on a Consolidated Basis; provided , however , that when calculating the Leverage Ratio for any period ending prior to December 31, 2014, EBITDA shall be determined on an annualized basis.

“ Liabilities ” shall have the meaning assigned to that term in Section 7.01.

“ License ” or “ Licenses ” shall mean any license, permit, directive, authorization, approval or stipulation required to operate the Business at any location.

“ Lien ” shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, security interest, lien (whether statutory or otherwise), charge, claim or encumbrance, or preference, priority or other security agreement or preferential arrangement held or asserted in respect of any asset of any kind or nature whatsoever, including any conditional sale or other title retention agreement, any lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement under the UCC or comparable law of any jurisdiction.

“ Lien Waiver Agreement ” shall mean an agreement in the form of Exhibit M attached hereto, or otherwise reasonably satisfactory to Agent, which is executed in favor of Lenders by a Person who owns or occupies premises at which any Collateral may be located from time to time and by which such Person shall waive any Lien that such Person may ever have with respect to any of the Collateral and shall authorize Lenders from time to time to enter upon the premises to inspect or remove the Collateral from such premises or to use such premises to store or dispose of such Collateral.

“ Liquidity Event ” shall have the meaning assigned to that term in Section 10.02

“ Litigation ” shall mean any action, proceeding, litigation, investigation, arbitration, mediation or claim.

“ Loan Year ” shall mean each period of twelve consecutive months beginning on the Closing Date and each anniversary thereof.

“Material Contracts” shall mean the contracts, agreements, commitments and other Contractual Obligations of the Credit Parties and their Subsidiaries required to be set forth on Schedule 5.27.

“Management Rights Agreements” shall mean those certain Management Rights Agreements, dated as of the Initial Closing Date, by and among the Borrower and each Original Lender in the form of Exhibit F to the Original Securities Purchase Agreement, that certain Management Rights Agreement, dated as of the Closing Date, by and among Borrower and Plexus III in the form of Exhibit F-1 hereto, that certain Management Rights Agreement, dated as of the Closing Date, by and among Borrower and Plexus QP III in the form of Exhibit F-2 hereto, each as may be amended, restated, supplemented or otherwise modified.

“ Mandatory Redemption Prices ” shall have the meaning assigned to that term in Section 10.02 hereof.

“ Margin Stock ” shall have the meaning assigned to that term in Regulation U of the Federal Reserve Board.

“ Material Adverse Effect ” shall mean (a) a material adverse change in, or a material adverse effect upon, the assets, properties, operations, business, condition (financial or otherwise), or prospects of the Business, any Credit Party or any of its Subsidiaries, or, (b) a material impairment of the ability of any Credit Party or any Affiliate of any Credit Party to perform under any Transaction Document to which it is a party, or (c) a material adverse effect upon the legality, validity, binding effect, or enforceability against each Credit Party of any Transaction Document to which it is a party.

“ Maturity Date ” shall mean December 31, 2018.

“ Modification ” shall mean, with respect to any agreement, instrument or other document, any amendment, supplement or modification of or to any provision of such document, any waiver of any provision of such document, and any consent to any departure by any party from the terms of any provision of such document.

“ Multiemployer Plan ” shall mean a multiemployer plan within the meaning of Section 3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code.

“NBS” shall have the meaning set forth in the first paragraph of this Agreement, and shall include each Person which becomes a successor or permitted assign of NBS.

“ New Warrants ” shall have the meaning assigned to that term in the recitals hereof, which warrants are substantially in the form of Exhibit B hereto.

“ Note Register ” shall have the meaning assigned to that term in Section 12.18(b).

“ Notes ” shall mean the Original Notes and the Series D Notes.

“ Obligations ” shall mean and include any and all loans (including the loans evidenced by the Notes), advances, debts, liabilities, obligations, covenants and duties owing by Borrower to Lenders, or to any other direct or indirect subsidiary or affiliate of Lenders of any kind or nature, present or future (including any interest accruing thereon after maturity, or after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding relating to Borrower whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) arising under this Agreement and the other Transaction Documents, absolute or contingent, joint or several, due or to become due, contractual or tortious, liquidated or unliquidated, now existing or hereafter arising, including under any amendments, extensions, renewals or increases and all costs and expenses of Lenders incurred in the documentation, negotiation, modification, enforcement, collection or otherwise in connection with any of the foregoing, including attorneys’ fees and expenses owing under this Agreement and the other Transaction Documents, and all obligations of Borrower to Lenders to perform acts or refrain from taking any action.

“ Optional Redemption Prices ” shall have the meaning assigned to that term in Section 10.01 hereof.

“ Ordinary Course of Business ” shall mean the ordinary course of the Credit Parties’ business as conducted on the Closing Date.

“ Organization Documents ” shall mean, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

“ Original Acquisition Agreements ” shall mean (i) Original Membership Interest Purchase Agreement, and (ii) the Asset Purchase and Sale Agreement dated as of January 30, 2012 by and among ISG, Sellers, the JK Trust, Borrower and Parent, as amended, including amendments dated June 6, 2012, August 20, 2012, and September 21, 2012 and all exhibits and schedules thereto.

“ Original Acquisition Documents ” shall mean the Original Acquisition Agreements and all other agreements, documents and instruments delivered in connection therewith to which a Credit Party is a party thereunder, including all exhibits and schedules thereto.

“Original Equity Raise” shall mean the sale by Parent of units consisting of warrants for Common Stock and convertible preferred stock of Parent for not less than $5,500,000, pursuant to the Equity Raise Documents.

“Original Equity Raise Documents” shall mean Parent’s Private Placement Memorandum dated May 15, 2012, as supplemented on August 6, 2012 and all documents, instruments and agreements executed or delivered in connection therewith, as each may be amended, modified, supplemented or restated from time to time.

“ Original Membership Interest Purchase Agreement ” shall mean the Membership Interest Purchase and Sale Agreement, dated as of January 30, 2012, by and among Sellers, NBS, Borrower and Parent, as amended, including amendments dated June 6, 2012, August 20, 2012, September 21, 2012 and October 24, 2012 and all exhibits and schedules thereto.

“ Original Loan Documents ” shall have the meaning assigned to that term in Section 1.06.

“ Original Notes ” shall mean the Series A Notes, the Series B Notes and the Series C Notes.

“ Original Obligations ” shall have the meaning assigned to that term in Section 1.06.

“Original Securities Purchase Agreement” shall have the meaning assigned to that term in the recitals hereof.

“Original Warrants” shall mean the warrants referred to in the recitals hereof.

“ Other Hedging Agreements ” shall mean any foreign exchange contracts, currency swap agreements, commodity agreements or other similar agreements or arrangements designed to protect against fluctuations in currency or commodity values.

“ Other Taxes ” shall mean all present or future stamp or documentary Taxes or any other excise or property Taxes, charges or similar levies arising from any payment made hereunder or under any other Transaction Document or from the execution or delivery of this Agreement or any other Transaction Document.

“ Parent ” shall have the meaning set forth in the first paragraph of this Agreement, and shall include each Person which becomes a successor or permitted assign of Parent.

“ Parent Earnings Before Interest and Taxes ” shall mean for any period the sum of (i) net income (or loss) of Parent on a Consolidated Basis for such period (excluding extraordinary gains and extraordinary losses, so long as any such exclusion from the calculation of Parent Earnings Before Interest and Taxes is made in accordance with GAAP), plus (ii) to the extent deducted in the determination of net income (or loss) for such period, (A) all interest expense of Parent on a Consolidated Basis for such period, including interest expense resulting from original issue discount and other amortization of debt discount as determined in accordance with GAAP, plus (B) all charges against income of Parent on a Consolidated Basis for such period for federal, state and local income taxes, plus (C) any non-cash expense of Parent on a Consolidated Basis associated with ASC Topic 350, ASC Topic 360, ASC Topic 480 or ASC Topic 815, plus (D) any non-cash expenses of Parent on a Consolidated Basis associated with stock options, warrants or stock grants of Parent, plus (iii) any non-cash expenses incurred in connection with the early extinguishment of Indebtedness of Parent. In addition, the calculation of Parent Earnings Before Interest and Taxes for any period shall be adjusted to exclude (w) any aggregate net gain or loss arising from any permitted sale, conversion, exchange or other disposition of capital assets made during such period, including (1) all non-current assets, and (2) without duplication, the following assets, whether or not current: fixed assets, whether tangible or intangible, inventory sold in connection with the disposition of fixed assets and all Equity Interests and other securities, (x) any net gain from the collection during such period of any proceeds of life insurance policies, (y) any gain or loss (or other impact to the financial statements) arising from the repurchase during such period of Equity Interests and (z) any non-cash income or expense realized during such period relating to an Interest Rate Hedge or any Other Hedging Agreement.

“ Parent EBITDA ” shall mean for any period, the sum of (i) Parent Earnings Before Interest and Taxes for such period, plus to the extent deducted in the determination of net income (or loss) for such period (ii) depreciation expenses of Parent on a Consolidated Basis for such period plus (iii) amortization expenses of Parent on a Consolidated Basis for such period.

“ PBGC ” shall mean the Pension Benefit Guaranty Corporation established pursuant to Title IV of ERISA, or any successor agency or other Governmental Authority succeeding to the functions thereof.

“ Pension Plan ” shall mean any “ employee pension benefit plan ” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by any Credit Party or any ERISA Affiliate or to which any Credit Party or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.

“ Permitted Liens ” shall mean (a) Liens in favor of Agent, for its benefit and the ratable benefit of the Lenders, (b) Working Capital Liens granted to the Working Capital Lender by Credit Parties other than Borrower; (c) Liens for Taxes, assessments or other governmental charges not delinquent or being Properly Contested; (d) deposits or pledges to secure obligations under worker’s compensation, social security or similar laws, or under unemployment insurance; (e) deposits or pledges to secure bids, tenders, contracts (other than contracts for the payment of money), leases, statutory obligations, surety and appeal bonds and other obligations of like nature arising in the Ordinary Course of Business; (f) Liens arising by virtue of the rendition, entry or issuance against any Credit Party or any of its Subsidiaries, or any property of any such Person, of any judgment, writ, order or decree, provided that such Liens are in existence for less than twenty (20) consecutive days after they first arises or is being Properly Contested; (g) mechanics’, workers’, materialmen’s or other like Liens arising in the Ordinary Course of Business with respect to obligations which are not due or which are being Properly Contested; (h) Liens placed upon equipment or Real Property hereafter acquired or leased to secure a portion of the purchase price or lease thereof, provided that (A) any such lien shall not encumber any other property of the Credit Parties and (B) the aggregate amount of Indebtedness incurred as a result of such purchases, during any fiscal year, shall not exceed the amount provided for in Section 9.15(c); (i) Liens disclosed on Schedule 9.02 ; and (j) non-exclusive licenses of Intellectual Property, and leases or subleases of equipment or Real Property, in each case granted to third Persons in the Ordinary Course of Business and which do not interfere in any material respect with the operations of the business of the Credit Parties.

“ Person ” shall mean any individual, firm, corporation, limited liability company, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, Governmental Authority or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity.

“ Plan ” shall mean any employee benefit plan within the meaning of Section 3(3) of ERISA, other than a Multiemployer Plan, maintained for employees of the Credit Parties prior to the Closing Date, or any member of the Controlled Group or any such Plan to which any Credit Party or any member of the Controlled Group is required to contribute on behalf of any of its employees.

“ Pledge Agreement ” shall mean the Pledge Agreement, dated as of the Initial Closing Date, by and among Parent, each Subsidiary of Parent from time to time party thereto, and the Agent, substantially in the form of Exhibit D to the Original Securities Purchase Agreement, as the same may be amended, restated, supplemented or otherwise modified.

“ Principal Amount ” shall mean, with respect to the Series A Notes, the aggregate principal amount thereof outstanding, with respect to the Series B Notes, the aggregate principal amount thereof outstanding, with respect to the Series C Notes, the aggregate principal amount thereof outstanding, and with respect to the Series D Notes, the aggregate principal amount thereof outstanding.

“ Pro Forma Balance Sheet ” shall have the meaning assigned to that term in Section 5.11(a).

“ Pro Forma Financial Statements ” shall have the meaning assigned to that term in Section 5.11(b).

“ Projections ” shall have the meaning assigned to that term in Section 5.11(b).

“Properly Contested” shall mean contested in good faith by appropriate proceedings diligently conducted which stay the enforcement of any Lien and for which adequate reserves in accordance with GAAP are being maintained by the Credit Parties and their Subsidiaries; provided , that no such Lien shall have any effect on the priority of the Liens in favor of Agent for its benefit and for the ratable benefit of Lenders or the value of the assets on which Agent has such a Lien and a stay of enforcement of any such Lien shall be in effect.

“ Purchase Money Indebtedness ” shall mean and include (i) Indebtedness (other than the Indebtedness under the Notes) of any Credit Party for the payment of all or any part of the purchase price of any equipment, (ii) any Indebtedness (other than the Indebtedness under the Notes) of any Credit Party incurred at the time of or within thirty (30) days prior to or one hundred twenty (120) days after the acquisition of any equipment for the purpose of financing all or any part of the purchase price thereof (whether by means of a loan agreement, Capital Lease or otherwise), and (iii) any renewals, extensions or refinancings (but not any increases in the principal amounts) thereof outstanding at the time.

“ Questionnaire ” shall mean the Perfection Questionnaire and the responses thereto provided by the Credit Parties and delivered to Agent.

“ RCRA ” shall mean the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., as same may be amended from time to time.

“ Real Property ” shall mean, with respect to each Credit Party, all of such Credit Party’s right, title and interest in and to (x) the owned and leased premises identified on Schedules 5.08(a) and 5.08(b) hereto, and (y) any owned or leased premises acquired by such Credit Party after the Closing Date.

“ Releases ” shall have the meaning assigned to that term in Section 5.15(c) hereof.

“ Reportable Event ” shall mean a reportable event described in Section 4043(b) of ERISA or the regulations promulgated thereunder.

“ Required Equity Holders ” shall mean the holder or holders of more than fifty percent (50%) of the aggregate number of Equity Interests of Parent held by Lenders then outstanding (calculated assuming the exercise in full of any outstanding Warrants).

“Required Lenders” shall mean Lenders holding greater than sixty percent (60%) of the outstanding principal amount of the Notes.

“ Requirement of Law ” or “ Requirements of Law ” shall mean any requirement, direction, policy or procedure of any Applicable Law or License, Judgment, or Consent.

“ Restricted Payment ” shall mean: (a) any dividend or other distribution, direct or indirect (whether in cash or property), on account of any Equity Interests of any Credit Party or any of its Subsidiaries, now or hereafter outstanding, except a dividend payable solely in shares of that class of Equity Interest to the holders of that class; (b) any payment or prepayment of principal of, premium, if any, or interest on, or any redemption, conversion, exchange, retirement, defeasance, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any Equity Interests of any Credit Party or any of its Subsidiaries now or hereafter outstanding, or the issuance of a notice of an intention to do any of the foregoing (or setting aside any funds for any of the foregoing purposes); (c) any payment or prepayment of interest on, principal of, premium, if any, redemption, conversion, exchange, purchase, retirement, defeasance, sinking fund or similar payment with respect to, any Indebtedness subordinated to the Indebtedness existing pursuant to the Notes and this Agreement, other than, as expressly permitted under the terms of the applicable subordination agreement to which Agent and/or Lenders are a party; (d) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any Equity Interests of any Credit Party or any of its Subsidiaries now or hereafter outstanding; (e) any director fee paid to any member of the Board of Directors of any Credit Party who is also an employee of any Credit Party; (f) any payment by any Credit Party to any Seller, whether under the Seller Note or otherwise, except to the extent permitted by the Seller Subordination Agreement and provided that after giving effect to such payment the Credit Parties are in compliance on a pro forma basis with the covenants set forth in Section 9.15, recomputed for the most recent quarter for which financial statements have been delivered, and except for salary payments to Jonathan Kaufman at a rate not greater than $250,000 per year without the prior written consent of Agent; (g) any payment by any Credit Party to Marvin Rosen except to the extent permitted by the Rosen Subordination Agreement and provided that after giving effect to such payment the Credit Parties are in compliance on a pro forma basis with the covenants set forth in Section 9.15, recomputed for the most recent quarter for which financial statements have been delivered, or (h) any payments to Parent; provided , however , that the term “Restricted Payments” shall not include (i) intercompany payments made in the Ordinary Course of Business for funding of such Credit Party’s payroll and terminating NBS traffic on the Parent’s network, provided that any payments by Borrower to Parent shall be at direct cost plus a mark-up not in excess of the average mark-up provided to third party customers for similar services, (ii) any Corporate Allocation Payment, provided that (A) no Default or Event of Default shall have occurred and be continuing or would result from the making of such payment, (B) any proposed Corporate Allocation Payment, together with all other Corporate Allocation Payments made during the period of twelve (12) consecutive fiscal months ending on the last day of the month in which such proposed Corporate Allocation Payment is to be made, shall not in the aggregate exceed the sum of $1,000,000 plus an amount equal to 0.30 multiplied by the amount, if any, by which EBITDA for such period exceeds $12,000,000, and, (C) Corporate Allocation Payments made in any fiscal year shall not exceed $3,500,000 in the aggregate, or (iii) payments under the Original Acquisition Agreements, other than under the Seller Note.

“ Rosen Notes ” shall mean the letter agreement between Marvin Rosen and Parent, dated October 25, 2012, providing for, among other things, payment of $484,058.03 and the promissory note made by Parent, payable to Marvin Rosen, in the principal amount of $3,027,364.37.

“ Right of First Refusal Agreement ” shall mean the Right of First Refusal Agreement dated as of the Initial Closing Date among Parent and the Lenders substantially in the form of Exhibit G to the Original Securities Purchase Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Rosen Subordination Agreement ” shall mean the Subordination Agreement dated as of the Initial Closing Date by and among Marvin Rosen, the Original Lenders, the Agent and Parent, substantially in the form of Exhibit I to the Original Securities Purchase Agreement, as the same may be amended, restated, supplemented or otherwise modified.

“ SBA ” shall mean the United States Small Business Administration or any successor thereto.

“ SBA Regulations ” shall mean the Small Business Investment Act of 1958, as amended, and the Regulations of SBA thereunder.

“ SBA Side Letters ” shall mean (i) that certain Small Business Side Letter, dated as of the Initial Closing Date, by and between the Borrower and Fund III in the form of Exhibit L-1 to the Original Securities Purchase Agreement, (ii) that certain Small Business Side Letter, dated as of the Initial Closing Date, by and between the Borrower and Plexus in the form of and Exhibit L-2 to the Original Securities Purchase Agreement, (iii) that certain Small Business Side Letter, dated as of the Closing Date, by and between the Borrower and Plexus III in the form of Exhibit L-3A hereto, and (iv) that certain Small Business Side Letter, dated as of the Closing Date, by and between the Borrower and Plexus QP III in the form of Exhibit L-3B hereto, as each may be amended, restated, supplemented or otherwise modified.

“SBIC” shall mean a small business investment company that is licensed by the SBA.

“ Securities ” shall mean the Notes and the Warrants.

“ Securities Act ” shall mean the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations thereunder as the same shall be in effect at the time.

“Seller Note” shall mean the promissory note dated the Initial Closing Date issued by Borrower to Sellers pursuant to the Original Membership Interest Purchase Agreement, in the maximum principal amount of $600,000.

“Seller Subordination Agreement” shall mean the Subordination Agreement dated as of the Initial Closing Date by and among the Sellers, the Original Lenders, the Agent and Parent, substantially in the form of Exhibit H to the Original Securities Purchase Agreement, as the same may be amended, restated, supplemented or otherwise modified.

“ Sellers ” shall mean Jonathan Kaufman, a resident of the State of New Jersey and Christiana Trust, a division of WSFS Bank, as trustee of the LK Trust, a Delaware Trust.

“ Senior Debt Payments ” shall mean and include for any period, (a) the aggregate of regularly scheduled principal payments of all Senior Indebtedness made or to be made by the Borrower and its Subsidiaries during such period, plus (b) all interest expense actually paid on the Senior Indebtedness during such period, plus (c) all fees, commissions and charges (other than the Transaction Fee) with respect to the Senior Indebtedness paid during such period.

“Senior Indebtedness” shall mean the Indebtedness evidenced by the Notes.

“ Separateness Requirements ” shall mean the requirements set forth in Article 16 hereof.

“ Series A Notes ,” “ Series B Notes ,” “ Series C Notes ” and “ Series D Notes ” shall have the respective meaning assigned to those terms in the recitals to this Agreement; the Series D Notes shall be substantially in the form of Exhibit A hereto..

“ Solvent ” shall mean, with respect to the Borrower and its Subsidiaries considered as a whole, based on the Pro Forma Balance Sheet, that (i) the assets and the property of the Borrower and its Subsidiaries, considered as a whole, exceed the aggregate liabilities (including contingent and unliquidated liabilities) of the Borrower and its Subsidiaries, considered as a whole, (ii) after giving effect to the transactions contemplated by this Agreement and the other Transaction Documents, the Borrower and its Subsidiaries, considered as a whole, will not be left with unreasonably small capital, and (iii) after giving effect to the transactions contemplated by this Agreement, the Borrower and its Subsidiaries, considered as a whole, are able to both service and pay their liabilities as they mature. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities will be computed as the amount that, in light of all the facts and circumstances existing at such time, represents the amount that is likely to become an actual or matured liability.

“ Subordinated Debt Payments ” shall mean and include all cash actually expended by the Borrower and its Subsidiaries to make payments of (x) principal and interest on any Subordinated Debt (y) all fees, commissions and charges with respect to the Subordinated Debt.

“ Subordinated Debt ” shall mean all Indebtedness of Borrower and its Subsidiaries which is subordinated to the Senior Indebtedness on terms satisfactory to Lenders.

“ Subsidiary ” of a Person (the “ parent ”), shall mean a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, by such parent; excluding however any such entity for so long as it conducts no business and has assets of less than $10,000.00. For purposes of this definition, “controlled by” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. Unless otherwise specified, all references herein to a “ Subsidiary ” or to “ Subsidiaries ” shall refer to a Subsidiary or Subsidiaries of a Credit Party.

“ Tax ” shall mean any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.

“ Tax Return ” shall mean any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“ Termination Event ” shall mean (i) a Reportable Event with respect to any Plan or Multiemployer Plan; (ii) the withdrawal of any Credit Party or any member of the Controlled Group from a Plan or Multiemployer Plan during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA; (iii) the providing of notice of intent to terminate a Plan in a distress termination described in Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to terminate a Plan or Multiemployer Plan; (v) any event or condition (a) which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan or Multiemployer Plan, or (b) that may result in termination of a Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi) the partial or complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of any Credit Party or any member of the Controlled Group from a Multiemployer Plan.

“ Trading with the Enemy Act ” shall mean the foreign assets control regulations of the United States Treasury Department (31CFR, Subtitle B, Chapter V, as amended) and any enabling legislation, regulations or executive order relating thereto.

“ Transaction Documents ” shall mean collectively, this Agreement, the Notes, any Guaranty, the Warrants, the Pledge Agreement, the SBA Side Letters, the Right of First Refusal Agreement, the Seller Subordination Agreement, the Rosen Subordination Agreement, the Working Capital Intercreditor Agreement, the Intellectual Property Security Agreement and the Management Rights Agreements, any Collateral Access Agreement and any Control Agreement, as each may be amended, modified, supplemented or restated from time to time in accordance with the terms thereof.

“Transaction Fee” shall mean $500,000.

“ Transactions ” shall have the meaning assigned to that term in Section 5.11(a) hereof.

“ UCC ” shall have assigned to that term in Section 1.04 hereof.

“ USA Patriot Act ” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

“ Warrants ” shall mean the Original Warrants and the New Warrants.

“Working Capital Agreement” shall have the meaning assigned to that term in Section 9.07(g) hereof.

“ Working Capital Debt ” shall have the meaning assigned to that term in Section 9.07(g) hereof.

“ Working Capital Lender ” shall have the meaning assigned to that term in Section 9.07(g) hereof.

“Working Capital Liens” shall mean have the meaning assigned to that term in Section 9.07(g) hereof.

“Working Capital Intercreditor Agreement” shall mean the Intercreditor Agreement, dated as of the Initial Closing Date, by and among the Working Capital Lender, the Lenders, the Agent, Borrower, Parent, NBS, BVX and each other Subsidiary from time to time party thereto, as amended by the First Amendment thereto dated as of the Closing Date and as may be further amended, amended and restated, extended, supplemented, refinanced or otherwise modified from time to time.

1.02 Accounting Terms; Financial Statements

. All accounting terms used herein and not expressly defined in this Agreement shall have the respective meanings given to them in conformance with GAAP, as consistently applied to the applicable Person. Financial statements and other information furnished after the date hereof pursuant to the Agreement or the other Transaction Documents shall be prepared in accordance with GAAP as in effect at the time of such preparation, provided , however , that if at any time any change in GAAP would affect the computation of any financial ratio or financial requirement set forth in any Transaction Document, and any of the Borrower or the Agent shall so request, the Agent, the Lenders and the Credit Parties shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP; provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Credit Parties shall provide to the Lenders financial statements and other documents required under this Agreement which include a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

1.03 Knowledge of the Credit Parties

. All references to the knowledge of any Credit Party or to facts known by any Credit Party shall mean actual knowledge or notice of a senior officer of such Credit Party or of any of such Credit Party’s Subsidiaries or any division of such Credit Party, as the case may be, or knowledge which such Person could reasonably have acquired through the exercise of due inquiry.

1.04 UCC Terms

. All terms used herein and defined in the Uniform Commercial Code as adopted in the State of New York from time to time (the “ UCC ”) shall have the meaning given therein unless otherwise defined herein. Without limiting the foregoing, the terms “accounts”, “chattel paper”, “instruments”, “general intangibles”, “payment intangibles”, “supporting obligations”, “securities”, “investment property”, “documents”, “deposit accounts”, “software”, “letter of credit rights”, “inventory”, “equipment” and “fixtures”, as and when used shall have the meanings given to such terms in Articles 8 or 9 of the UCC. To the extent the definition of any category or type of Collateral is expanded by any amendment, modification or revision to the UCC, such expanded definition will apply automatically as of the date of such amendment, modification or revision.

1.05 Certain Matters of Construction

. The terms “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision. All references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement. Any pronoun used shall be deemed to cover all genders. Wherever appropriate in the context, terms used herein in the singular also include the plural and vice versa. All references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations. Unless otherwise provided, all references to any instruments or agreements to which Agent is a party, including references to any of the Transaction Documents, shall include any and all modifications or amendments thereto and any and all extensions or renewals thereof. All references herein to the time of day shall mean the time in New York, New York. Whenever the words “including” or “include” shall be used, such words shall be understood to mean “including, without limitation” or “include, without limitation”. A Default or Event of Default shall be deemed to exist at all times during the period commencing on the date that such Default or Event of Default occurs to the date on which such Default or Event of Default is waived in writing pursuant to this Agreement or, in the case of a Default, is cured within any period of cure expressly provided for in this Agreement; and an Event of Default shall “continue” or be “continuing” until such Event of Default has been waived in writing by the Required Lenders. Any Lien referred to in this Agreement or any of the other Transaction Documents as having been created in favor of Agent, any agreement entered into by Agent pursuant to this Agreement or any of the Transaction Documents, any payment made by or to or funds received by Agent pursuant to or as contemplated by this Agreement or any of the Transaction Documents, or any act taken or omitted to be taken by Agent, shall, unless otherwise expressly provided, be created, entered into, made or received, or taken or omitted, for the benefit or account of Agent and Lenders. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or otherwise within the limitations of, another covenant shall not avoid the occurrence of a default if such action is taken or condition exists. In addition, all representations and warranties hereunder shall be given independent effect so that if a particular representation or warranty proves to be incorrect or is breached, the fact that another representation or warranty concerning the same or similar subject matter is correct or is not breached will not affect the incorrectness of a breach of a representation or warranty hereunder.

1.06 Effect of this Agreement; Modification of Transaction Documents.

Upon the execution and delivery of this Agreement, the obligations and other liabilities (including interest and fees accrued to the date hereof) governed by the Original Securities Purchase Agreement (collectively, the “ Original Obligations ”) shall continue to be in full force and effect to the extent remaining unpaid, but shall be governed by the terms and conditions set forth in this Agreement. Each Credit Party hereby reaffirms its obligations under each Transaction Document (as defined in the Original Securities Purchase Agreement, collectively, the “ Original Loan Documents ”) to which it is party, as amended, supplemented or otherwise modified by this Agreement and by the other Transaction Documents delivered at the Closing. Each Credit Party further agrees that each such Original Loan Document shall remain in full force and effect as amended as of the date hereof following the execution and delivery of this Agreement and that all references to the “Agreement” in such Original Loan Documents shall be deemed to refer to this Agreement. The execution and delivery of this Agreement shall constitute an amendment, replacement and restatement, but not a novation or repayment, of the Original Obligations. The Parties hereto agree that (i) each of the Transaction Documents which have been executed by Plexus are hereby amended as necessary to reflect that the General Partner of Plexus is Plexus Fund II GP, LLC and (ii) the Original Warrants are hereby modified to give effect to the following corrections: (A) the reference to “Subsection 3(e)” in the definition of “Current Market Price” contained in each Original Warrant is hereby replaced with a reference to “Subsection 3(c)”, (B) the parenthetical “(excluding subscription rights options or warrants referred to in Subsection 3(b))” contained in Section 3(b) of each Original Warrant is hereby deleted, (C) the references to “Section 3(f)” contained in Section 3(d) of each Original Warrant are hereby replaced with references to “Section 3(d)”, and (D) the reference to “Section 3(h)” in Section 5 of each Original Warrant is hereby replaced with a reference to “Section 3.”

ARTICLE 2

PURCHASE AND SALE OF THE SECURITIES

2.01 Purchase and Sale of the Series D Notes

. Subject to the terms and conditions herein set forth, Borrower agrees that it will issue and sell to each Lender set forth on Schedule 2.01 , and each such Lender agrees that it will acquire from the Borrower on the Closing Date the Series D Notes, substantially in the form thereof attached hereto, appropriately completed in conformity herewith, in the principal amounts set forth opposite such Lender’s name on Schedule 2.01 hereto, at the purchase prices with respect to such Series D Notes set forth opposite such Lender’s name on Schedule 2.01 hereto.

2.02 Purchase and Sale of the New Warrants

. Subject to the terms and conditions herein set forth, Parent agrees that in connection with the sale of the Series D Notes, it will issue and sell to each Lender set forth on Schedule 2.02 , and each such Lender agrees that it will acquire from Parent on the Closing Date the New Warrants, substantially in the form attached hereto, appropriately completed in conformity herewith for such class and number of Equity Interests set forth opposite such Lender’s name on Schedule 2.02 hereto at the purchase prices with respect to such New Warrants set forth opposite such Lender’s name on Schedule 2.02 hereto. The parties to the Original Securities Purchase Agreement agree to report, and be bound by, the allocation of the purchase price between the Original Notes and the Original Warrants consistent with, and as set forth in, Section 2.05 , Schedule 2.01 and Schedule 2.02 of the Original Securities Purchase Agreement solely for purposes of determining the issue price of and the original issue discount on the Original Notes and such of the Lenders’ tax basis in the Original Warrants. The parties hereto agree to report, and be bound by, the allocation of the purchase price between the Series D Notes and the New Warrants consistent with, and as set forth in, Schedule 2.01 and Schedule 2.02 hereto solely for purposes of determining the issue price of and the original issue discount on the Series D Notes and the Lenders’ tax basis in the New Warrants.

2.03 Fees at Closing; Expenses

. Concurrently with the execution hereof, the Borrower shall (a) pay to, or as directed by, the Lenders the Transaction Fee and (b) reimburse all of the Lenders’ reasonable out-of-pocket expenses (including fees, charges and disbursements of counsel and consultants after crediting amounts previously paid to Lenders by Borrower or Parent) incurred in connection with (i) the negotiation and execution and delivery of this Agreement and the other Transaction Documents and the Lenders’ due diligence investigation and (ii) the transactions contemplated by this Agreement and the other Transaction Documents, which payments shall be made by wire transfer of immediately available funds or Automated Clearing House (ACH) payment to an account or accounts designated by the Lenders.

2.04 Closing

. The purchase and issuance of the Series D Notes and New Warrants shall take place at the closing (the “ Closing ”) to be held at the offices of Morrison Cohen LLP, 909 Third Avenue, New York, NY 10022 at 10:00 a.m., New York time, on December 31, 2013 (the “ Closing Date ”). At the Closing, the Borrower shall deliver the Series D Notes and Parent shall deliver the New Warrants to the Lenders against delivery by the Lenders to the Borrower of the respective purchase prices therefor. In each case, payment of such purchase price shall be by wire transfer of immediately available funds.

2.05 Financial Accounting Positions; Tax Reporting

. Each of the parties hereto agrees to take reporting and other positions with respect to the Securities which are consistent with the purchase price of the Securities set forth in the Original Securities Purchase Agreement and herein for all financial accounting purposes, unless otherwise required by applicable GAAP or Commission rules. If any position inconsistent with the purchase price of the Securities set forth herein is taken, the covenants shall be adjusted to the extent necessary to eliminate any impact caused by such inconsistent position. Each of the parties to this Agreement agrees to take reporting and other positions with respect to the Securities which are consistent with the purchase price of the Securities set forth in the Original Securities Purchase Agreement and herein for all other purposes, including for all federal, state and local tax purposes, except as otherwise required by Applicable Law.

2.06 Interest

. The Borrower shall pay interest (“ Interest ”) (i) on the Principal Amount of the Notes at the rate of eleven and fifteenth hundredths percent (11.15%) per annum (the “Interest Rate” ), as set forth in clause (a) below. Interest on the Notes shall accrue from and including the date of issuance through and until repayment of the Principal Amount of the Notes and payment of all Interest in full, and shall be computed on the basis of a 360-day year of twelve 30-day months. Interest shall be paid as follows and all Interest accrued and unpaid through the Maturity Date shall be paid in full on the Maturity Date:

(a) Cash Interest . Interest shall be paid monthly in arrears on the last day of each calendar month of each year or, if any such date shall not be a Business Day, on the immediately preceding Business Day to occur prior to such date (each date upon which Interest shall be so payable, an “ Interest Payment Date ”), beginning on October 31, 2012 with respect to the Original Notes and January 31, 2014 with respect to the Series C Notes and the Series D Notes, by wire transfer of immediately available funds or by Automated Clearing House (ACH) payment, in either case to an account at a bank designated in writing by each Lender. In the absence of any such written designation, any such Interest payment shall be deemed made on the date a check in the applicable amount payable to the order of each Lender is delivered to such Lender at its last address as reflected in the Note Register of the Borrower; if no such address appears, then to such Lender in care of the last address in such Note Register of any predecessor holder of the Notes (or its predecessor).

(b) [Intentionally Omitted].

(c) Default Interest . Notwithstanding the foregoing provisions of this Section 2.06, but subject to Applicable Law, any overdue principal of and overdue Interest on the Notes shall bear interest, payable on demand in immediately available funds, for each day from the date payment thereof was due to the date of actual payment, at a rate equal to the sum of (i) the Interest Rate and (ii) an additional two percent (2%) per annum, and, upon and during the occurrence of an Event of Default, the Notes shall bear interest, from the date of the occurrence of such Event of Default until such Event of Default is cured or waived, payable on demand in immediately available funds, at a rate equal to the sum of (i) the Interest Rate, and (ii) an additional two percent (2%) per annum. Subject to Applicable Law, any interest that shall accrue on overdue interest on the Notes as provided in the preceding sentence and shall not have been paid in full on or before the next Interest Payment Date to occur after the date on which the overdue interest became due and payable shall itself be deemed to be overdue interest to which the preceding sentence shall apply.

(d) No Usurious Interest . In the event that any interest rate(s) or premiums provided for in this Section 2.06 or otherwise in this Agreement, shall be determined to be unlawful, such interest rate(s) shall be computed at the highest rate permitted by Applicable Law. Any payment by the Credit Parties of any interest amount in excess of that permitted by Applicable Law shall be considered a mistake, with the excess being applied to the Principal Amount of the Notes without prepayment premium or penalty; if no such principal amount is outstanding, such excess shall be returned to the Credit Parties.

(e) AHYDO . Notwithstanding anything to the contrary contained in Section 2, if (1) the loans evidenced by the Notes remain outstanding after the fifth anniversary of the initial issuance thereof and (2) the aggregate amount of the accrued but unpaid interest on such loans (including any amounts treated as interest for federal income tax purposes, such as “original issue discount”) as of any Testing Date occurring after such fifth anniversary exceeds an amount equal to the Maximum Accrual, then all such accrued but unpaid interest on such loans (including any amounts treated as interest for federal income tax purposes, such as “original issue discount”) as of such time in excess of an amount equal to the Maximum Accrual shall be paid in cash by the Borrower to the holders thereof on such Testing Date, it being the intent of the parties hereto that the deductibility of interest under such loans shall not be limited or deferred by reason of Section 163(i) of the Code. For these purposes, the “Maximum Accrual” is an amount equal to the product of the issue price of such loans (as defined in Code Sections 1273(b) and 1274(a)) and their yield to maturity, and a “ Testing Date ” is any Interest Payment Date and the date on which any “accrual period” (within the meaning of Section 1272(a)(5) of the Code) closes. Any accrued interest which for any reason has not theretofore been paid shall be paid in full on the date on which the final principal payment on such loans is made.

(f) SBA Cost of Money Limitation . The sum of (i) the Interest Rate paid by the Credit Parties to the Lenders and (ii) all other consideration paid by the Credit Parties to the Lenders pursuant to the Notes and any other provision of this Agreement that constitutes Cost of Money, shall not exceed, with respect to any Lender that is an SBIC, the ceiling for the Cost of Money that is applicable to the Notes pursuant to SBA Regulations. Any payment to a Lender that is an SBIC of default interest pursuant to Section 2.06(c), Mandatory Redemption Price or other consideration pursuant to this Agreement that results in the Cost of Money for the Notes being in excess of the applicable ceiling for the Cost of Money for the Notes shall be considered an error and shall be returned to the Credit Parties.

ARTICLE 3

CONDITIONS TO THE OBLIGATIONS OF THE

LENDERS TO PURCHASE THE SECURITIES

The obligation of the Lenders to purchase the Series D Notes and the New Warrants and to pay the purchase price therefor at the Closing and to perform any obligations hereunder shall be subject to the satisfaction as determined by, or waiver by, the Lenders of the following conditions on or before the Closing Date; provided , however , that any waiver of a condition shall not be deemed a waiver of any breach of any representation, warranty, agreement, term or covenant or of any misrepresentation by the Credit Parties.

3.01 Representations and Warranties

. The representations and warranties of the Credit Parties contained in Article 5 hereof shall be true and correct at and as of the date hereof and the Closing Date as if made at and as of such date, and the Agent shall have received at the Closing a certificate to the foregoing effect, dated the Closing Date, and executed by an Authorized Officer of each Credit Party.

3.02 Compliance with this Agreement

. The Credit Parties shall have performed and complied with all of their agreements and conditions set forth or contemplated herein that are required to be performed or complied with by the Credit Parties on or before the Closing Date, and the Agent shall have received at the Closing certificates to the foregoing effect, dated the Closing Date, and executed by an Authorized Officer of each Credit Party.

3.03 Secretary’s Certificates

. The Agent shall have received a certificate from each Credit Party, dated the Closing Date and signed by the Secretary or an Assistant Secretary of such Credit Party, certifying (a) that the attached copies of the Organization Documents of such Credit Party, as the case may be, (or other applicable organizational or constituent documents), and resolutions of the Board of Directors (or other applicable authority) of such Credit Party approving the Transaction Documents to which it is a party and the transactions contemplated hereby and thereby are all true, complete and correct and remain unamended and in full force and effect, and (b) the incumbency and specimen signature of each officer of such Credit Party executing any Transaction Document to which it is a party or any other document delivered in connection herewith and therewith on behalf of such Credit Party.

3.04 Transaction Documents

. BVX shall have executed and delivered a Joinder to the Pledge Agreement in the form of Exhibit D, and Agent shall have received revised schedules to the Pledge Agreement which reflect the ownership of BVX by Borrower, together with a membership interest certificate and membership interest power with respect to BVX, as required thereby. All parties to the Working Capital Intercreditor Agreement shall have delivered the First Amendment thereto, in the form of Exhibit N . The Agent shall have received all other Transaction Documents duly executed by the parties thereto and true, complete and correct copies of such other agreements, schedules, exhibits, certificates, documents, financial information and filings as it may request in connection with or relating to the transactions contemplated hereby, all in form and substance satisfactory to the Agent.

3.05 Purchase of Securities Permitted by Applicable Laws

. The acquisition of and payment for the Series D Notes and the New Warrants to be acquired by the Lenders hereunder and the consummation of the transactions contemplated hereby and by the Transaction Documents (a) shall not be prohibited by any Requirement of Law, (b) shall not subject the Agent or any Lender to any penalty or other onerous condition under or pursuant to any Requirement of Law, and (c) shall be permitted by all Requirements of Law to which the Agent or any Lender or the transactions contemplated by or referred to herein or in the Transaction Documents are subject; and the Agent and each Lender shall have received such certificates or other evidence as the Agent or such Lender may reasonably request to establish compliance with this condition.

3.06 Opinion of Counsel

. The Agent shall have received an opinion of outside counsel to the Credit Parties, relating to the transactions contemplated by or referred to herein, dated as of the Closing Date and in form and substance acceptable to the Agent.

3.07 Approval of Counsel to the Lenders

. All actions and proceedings hereunder and all agreements, schedules, exhibits, certificates, financial information, filings and other documents required to be delivered by the Credit Parties and each of their respective Subsidiaries hereunder or in connection with the consummation of the transactions contemplated hereby, and all other related matters, shall have been in form and substance acceptable to Morrison Cohen LLP, counsel to the Agent and the Lenders, in its reasonable judgment (including the opinions of counsel referred to in Section 3.06 hereof).

3.08 Consents and Approvals

. All Consents, exemptions, authorizations, or other actions by, or notices to, or filings with, Governmental Authorities and other Persons in respect of all Requirements of Law and with respect to those Contractual Obligations of each Credit Party and each of its Subsidiaries necessary, desirable, or required in connection with the execution, delivery or performance (including the payment of interest on the Notes and the issuance of Equity Interests upon the exercise of the Warrants) by such Credit Party, or enforcement against such Credit Party of the Transaction Documents to which it is a party, shall have been obtained and be in full force and effect, and the Agent shall have been furnished with appropriate evidence thereof, and all waiting periods shall have lapsed without extension or the imposition of any conditions or restrictions.

3.09 Lien Searches; Payment of Outstanding Indebtedness

. The Agent shall have received copies of all UCC financing statements and federal and state tax lien searches as Agent shall have reasonably requested of the Credit Parties and such other Persons as Agent may request, and such termination statements, releases or other documents as may be reasonably necessary to confirm that the Collateral is subject to no other Liens in favor of any Persons (other than Permitted Liens, and Liens to be terminated on the Closing Date). Without limiting the foregoing, all Indebtedness identified in Schedule 3.09 , together with all interest, all payment premiums and all other amounts due and payable with respect thereto, shall have been paid in full from the proceeds of the issuance of the Series D Notes and the New Warrants and all commitments in respect of such Indebtedness shall have been permanently terminated, and all Liens securing payment of any such Indebtedness shall have been released, and the Lenders shall have received all payoff and release letters, UCC Form UCC-3 termination statements or other instruments or agreements as may be suitable or appropriate in connection with the release of any such Liens.

3.10 No Material Judgment or Order

. There shall not be on the Closing Date any judgment or order of a court of competent jurisdiction or any ruling of any Governmental Authority or any condition imposed under any Requirement of Law which, in the judgment of the Lenders, would prohibit the purchase of the Series D Notes and the New Warrants hereunder or subject any Lender to any penalty or other onerous condition under or pursuant to any Requirement of Law if the Series D Notes and the New Warrants were to be purchased hereunder.

3.11 Pro Forma Balance Sheet, Leverage Ratio; Fixed Charge Coverage Ratio and EBITDA.

The Credit Parties shall have delivered to the Agent as of the Closing Date (i) the Pro Forma Financial Statements, certified by the chief financial officer of each Credit Party that they fairly present the pro forma adjustments reflecting the consummation of the transactions contemplated by the Transaction Documents, including all fees and expenses in connection therewith and (ii) evidence demonstrating to the satisfaction of the Agent that as of the Closing Date, (A) the Borrower shall have cash on hand of at least $2,000,000, (B) the ratio of (x) the pro forma principal balance of all Funded Debt outstanding on November 30, 2013 to (y) the product of pro forma EBITDA for the six-month period ended November 30, 2013 multiplied by two is not more than 4.0:1.00, (C) the pro forma Fixed Charge Coverage Ratio, using an annualized EBITDA as aforesaid for the six-month period ended November 30, 2013 is not less than 1.40:1.00, (D) trailing 6 month pro forma EBITDA multiplied by two is not less than $11,400,000, and (E) the Credit Parties have sufficient cash on hand.

3.12 Good Standing Certificates

. Each Credit Party shall have its delivered to the Agent as of the Closing Date, good standing certificates for itself and each of its Subsidiaries for each of their respective jurisdictions of incorporation and all other jurisdictions in which the failure to be qualified to do business could reasonably be expected to have a Material Adverse Effect.

3.13 No Litigation

. No Litigation shall have been commenced or threatened, and no investigation by any Governmental Authority shall have been commenced or threatened: (i) seeking to restrain, prevent or change the transactions contemplated hereby or questioning the validity or legality of any of such transactions, or (ii) which, if resolved adversely to any such Person, could reasonably be expected to have a Material Adverse Effect.

3.14 Interim Financial Statements; Projections

. The Agent shall have received and reviewed to its reasonable satisfaction copies of the Credit Parties’ financial statements for the eleven (11) month period ended on November 30, 2013. In addition, Agent shall have received and reviewed to its reasonable satisfaction a set of financial projections, prepared on a month-by-month basis, for the Credit Parties’ next fiscal year (such projections to be prepared by or under the direction of an Authorized Officer of the Credit Parties).

3.15 Consummation of the Transactions

(a) The Lenders shall have received and reviewed to their reasonable satisfaction copies of the Equity Raise Documents together with documentation confirming that (i) Parent has received not less than $10,000,000 in gross proceeds from the Equity Raise, and (ii) not less than $1,500,000 of which shall be reflected on the consolidated balance sheet of Borrower.

(b) Agent shall have received final executed copies of the BVX Acquisition Documents and all related agreements, documents and instruments as in effect on the Closing Date all of which shall be satisfactory in form and substance to Agent and the transactions contemplated by such documentation shall be consummated prior to or simultaneously with the making of the sale of the Series D Notes and the New Warrants.

3.16 Flow of Funds

. The Agent shall have received a certificate executed by an Authorized Officer of the Borrower setting forth a flow of funds evidencing the accounts to which the investment evidenced by the Series D Notes and New Warrants being made on the Closing Date are to be funded and the amounts being funded into each account.

3.17 Adverse Change

. Nothing shall have occurred since December 31, 2012, or with respect to BVX, June 30, 2013, which the Lenders shall determine has had, or could reasonably be expected to have, a Material Adverse Effect or otherwise impact the markets in which any Credit Party or any of its Subsidiaries conducts its business.

3.18 Insurance Certificates

. On the Closing Date, the Lenders shall have received evidence of insurance complying with the requirements of Section 8.09 for the business and properties of the Credit Parties and their respective Subsidiaries.

3.19 Fees and Expenses

. On the Closing Date, Agent and the Lenders shall have received all costs, fees and expenses contemplated by Section 2.03.

3.20 Conduct of Business

. Since December 31, 2012, or with respect to BVX, June 30, 2013, the Credit Parties shall have conducted their business in the Ordinary Course of Business, and the holders of the Equity Interests of the Credit Parties shall have taken no actions to impair the value of the business of the Credit Parties.

3.21 Transfer Taxes

. The Credit Parties shall pay all sales, use, transfer, real property transfer and other similar Taxes, if any, arising out of or in connection with the transactions effected pursuant to this Agreement.

3.22 SBA

. The Lenders shall have received all closing certificates, corporate documents, evidence of authorization, forms and information required by the SBA, including SBA Forms 480, 1031 and 652, and other agreements, instruments and documents in respect of any aspect or consequence of the Transactions as the Lenders may reasonably request, all of which shall be in form and substance reasonably satisfactory to the Lenders.

3.23 Separateness Requirements

. The Agent shall have received evidence satisfactory to it that Borrower is in compliance with the Separateness Requirements on the Closing Date.

3.24 ACH

. Each Lender which elects to receive payments under this Agreement via ACH shall have received from the Credit Parties all ACH debit forms and any other documents required therefor.

ARTICLE 4

Collateral; General Terms

4.01 Security Interest in the Collateral

. To secure the prompt payment and performance of the Obligations, Borrower hereby grants to Agent for its benefit and the benefit of each Lender a continuing security interest in and to and Lien on all of its Collateral, whether now owned or existing or hereafter acquired or arising and wheresoever located. To secure the prompt payment and performance of the Guarantors’ Obligations, each Guarantor hereby grants to Agent for its benefit and the benefit of each Lender a continuing security interest in and to and Lien on all of its Collateral, whether now owned or existing or hereafter acquired or arising and wheresoever located. Each Credit Party shall provide Agent with written notice of all commercial tort claims promptly following its determination that it has any such claim, such notice to contain the case title (if any proceeding has been commenced thereon) together with the applicable court and a brief description of the claim(s). Upon delivery of each such notice, each Credit Party shall be deemed to hereby grant to Agent for its benefit and the benefit of each Lender a security interest and Lien in and to such commercial tort claim(s) and all proceeds thereof and execute and deliver to Agent any further agreement or document requested by Agent to further evidence the grant of a security interest in such claim.

4.02 Perfection of Security Interest

. Each Credit Party shall take all action that may be reasonably necessary or desirable, or that Agent may reasonably request, in order to maintain at all times the validity, perfection, enforceability and priority of Agent’s security interest in and Lien on the Collateral or to enable Agent and Lenders to protect, exercise or enforce their rights hereunder and in the Collateral, including (i) immediately discharging all Liens other than Permitted Liens, (ii) obtaining Collateral Access Agreements in accordance with Section 8.16, (iii) delivering to Agent, endorsed or accompanied by such instruments of assignment as Agent may specify, and stamping or marking, in such manner as Agent may specify, any and all chattel paper, instruments, letters of credit and advices thereof and documents evidencing or forming a part of the Collateral, and (iv) executing and/or delivering financing statements, control agreements, instruments of pledge, mortgages, notices, assignments and other documents, in each case in form and substance reasonably satisfactory to Agent, relating to the creation, validity, perfection, maintenance or continuation of Agent’s security interest and Lien under the Uniform Commercial Code or other Applicable Law. Each Credit Party hereby authorizes the filing of any financing statements or continuation statements, and amendments to financing statements or any similar document in any applicable jurisdictions and with any filing offices as Agent may determine are necessary or advisable to perfect the security interest granted to Agent for its benefit and the benefit of each Lender herein. Such financing statements may describe the Collateral in the same manner as described herein or may contain an indication or a description of collateral that describes such property in any other manner as Agent may determine is necessary, advisable or prudent to ensure the perfection of the security interest in the Collateral granted to Agent for its benefit and the benefit of each Lender herein, including describing such property as “all assets” or “all personal property, whether now owned or hereafter acquired.” All actual, out-of-pocket charges, expenses and fees Agent may incur in doing any of the foregoing, and any local taxes relating thereto, shall be added to the Obligations, or, at Agent’s option, shall be paid by each Credit Party to Agent immediately upon demand.

4.03 Safeguarding Collateral

. Each Credit Party will take commercially reasonable efforts at all times to safeguard, protect and preserve all Collateral other than dispositions expressly permitted hereunder.

4.04 Ownership of Collateral

. With respect to the Collateral, at the time the Collateral becomes subject to Agent’s security interest: (i) except as set forth on Schedule 4.04 , each Credit Party shall be the sole owner of and fully authorized and able to sell, transfer, assign each Credit Party’s rights to, pledge and/or grant a security interest and Lien in each and every item of Collateral to Agent for its benefit and the benefit of each Lender and, except for Permitted Liens, the Collateral shall be free and clear of all Liens or encumbrances whatsoever; (ii) the Lien on the Collateral granted by each Credit Party other than Parent shall be a first priority security interest and the Lien on the Collateral granted by Parent shall be a security interest subject only to the Working Capital Liens; (iii) each document and agreement executed by each Credit Party or delivered to Agent and Lenders in connection with this Agreement shall be true and correct in all material respects; and (iv) all signatures and endorsements of each Credit Party that appear on such documents and agreements shall be genuine and each Credit Party shall have full capacity to execute same.

4.05 Defense of Agent’s Interest

. Until (a) full and indefeasible payment and performance of all of the Obligations and (b) termination of this Agreement, Agent’s interest in the Collateral shall continue in full force and effect. Each Credit Party shall use commercially reasonable efforts to defend Agent’s interest in the Collateral against any and all Persons whatsoever.

4.06 Financial Disclosure

. Each Credit Party hereby irrevocably authorizes and directs all accountants and auditors employed by each Credit Party at any time to exhibit and deliver to Agent copies of any of each Credit Party’s financial statements, trial balances or other accounting records of any sort in the accountant’s or auditor’s possession (other than work papers and other proprietary information of such accountants and auditors), and to disclose to Agent any information such accountants may have concerning each Credit Party’s financial status and business operations. Each Credit Party hereby authorizes all Governmental Authorities to furnish to Agent copies of material reports or examinations relating to each Credit Party; however, Agent will attempt to obtain such information or materials directly from each Credit Party prior to obtaining such information or materials from such accountants or Governmental Bodies.

4.07 Accounts

(a) Nature of Accounts . Each of the Accounts of the Credit Parties is and shall be a bona fide and valid account representing a bona fide indebtedness incurred by the Customer therein named, for a fixed sum as set forth in the invoice relating thereto (provided immaterial or unintentional invoice errors shall not be deemed to be a breach hereof) with respect to an absolute sale or lease and delivery of goods upon stated terms of each Credit Party, or work, labor or services theretofore rendered by each Credit Party, as applicable, as of the date each Account is created. The Customer’s obligation with respect thereto shall be due and owing in accordance with each Credit Party’s standard terms of sale without dispute, setoff or counterclaim except as may be stated on the accounts receivable schedules delivered by each Credit Party to Agent.

(b) Solvency of Customers . Each Customer, to each Credit Party’s knowledge, as of the date each Account is created, is and will be solvent and able to pay all Accounts on which the Customer is obligated in full when due or with respect to such Customers of each Credit Party who are not solvent, each Credit Party has set up on its books and in its financial records bad debt reserves adequate to cover such Accounts.

(c) Chief Executive Offices . Unless at least ten (10) Business Days prior written notice is given to Agent by each Credit Party of any other office at which each Credit Party keeps its records pertaining to Accounts, all such records shall be kept at such chief executive office shown in Schedule 5.33.

(d) Collection of Accounts . Upon request of Agent at any time after the occurrence and during the continuance of an Event of Default, each Credit Party will, at each Credit Party’s sole cost and expense but on Agent’s behalf and for Agent’s account, collect all amounts owing on its Accounts, shall not commingle any collections with each Credit Party’s funds or use the same except to pay Obligations, and shall deposit or cause to be deposited into a blocked account designated by the Working Capital Lender, or if not so designated by the Working Capital Lender, Agent, all such collections; and upon request Agent, shall deliver to the Working Capital Lender (as bailee for Lenders, subject to the terms of the Working Capital Intercreditor Agreement) or upon payment in full of the Working Capital Debt, to Agent, in original form and on the date of receipt thereof all checks, drafts, notes, money orders, acceptances, cash and other evidences of Indebtedness.

(e) Verification and Notification of Assignment of Accounts . Agent shall have the right, at any time upon the occurrence and during the continuance of an Event of Default, to confirm and verify any and all Accounts by any manner and through any medium it considers advisable. Upon the occurrence and during the continuance of an Event of Default, Agent shall have the right to send notice of the assignment of, and Agent’s security interest in and Lien on, the Accounts to any and all Customers or any third party holding or otherwise concerned with any of the Collateral. At all times during such period, the Working Capital Lender and (subject to the Working Capital Intercreditor Agreement) Agent for its benefit and the benefit of each Lender shall have the sole right to collect and commence legal proceedings to collect the Accounts, take possession of the Collateral, or both. Agent’s actual, out-of-pocket collection expenses, including stationery and postage, telephone, secretarial and clerical expenses and the salaries of any collection personnel used for collection, may be added to the Obligations.

(f) Power of Agent to Act on Each Credit Party’s Behalf . Each Credit Party hereby constitutes Agent or Agent’s designee as each Credit Party’s attorney and agent with power to take each of the following actions (if an Event of Default shall have occurred and be continuing, except those described in the following clause (iii) and (iv) which actions may be taken at any time and from time to time): (i) to endorse each Credit Party’s name upon any notes, acceptances, checks, drafts, money orders or other evidences of payment or Collateral; (ii) to sign each Credit Party’s name on any invoice or bill of lading relating to any of the Accounts, drafts against Customers, assignments and verifications of Accounts; (iii) to send verifications of Accounts to any Customer, (iv) to sign each Credit Party’s name on all financing statements or any other documents or instruments deemed necessary or appropriate by Agent to preserve, protect, or perfect Agent’s interest in the Collateral and to file same; (v) to demand payment of the Accounts; (vi) to enforce payment of the Accounts by legal proceedings or otherwise; (vii) to exercise all of each Credit Party’s rights and remedies with respect to the collection of the Accounts and any other Collateral; (viii) to settle, adjust, compromise, extend or renew the Accounts; (ix) to settle, adjust or compromise any legal proceedings brought to collect Accounts; (x) to prepare, file and sign each Credit Party’s name on a proof of claim in bankruptcy or similar document against any Customer; (xi) to prepare, file and sign each Credit Party’s name on any notice of Lien, assignment or satisfaction of Lien or similar document in connection with the Accounts; (xii) to change the address for delivery of mail addressed to each Credit Party to such address as Agent may designate and to receive, open and dispose of all mail addressed to either of them and (xiii) to do all other acts and things necessary to carry out this Agreement. All acts of said attorney and agent or designee are hereby ratified and approved, and said attorney and agent or designee shall not be liable for any acts of omission or commission nor for any error of judgment or mistake of fact or of law, unless done maliciously or with gross (not mere) negligence; this power being coupled with an interest is irrevocable while any of the Obligations remain unpaid.

(g) No Liability . Agent shall not, under any circumstances or in any event whatsoever, have any liability for any error or omission or delay of any kind occurring in the settlement, collection or payment of any of the Accounts or any instrument received in payment thereof, or for any damage resulting therefrom except as a result of the gross negligence or willful misconduct of such Person. If an Event of Default shall have occurred and be continuing, Agent may, without notice or consent from each Credit Party, sue upon or otherwise collect, extend the time of payment of, compromise or settle for cash, credit or upon any terms any of the Accounts or any other securities, instruments or insurance applicable thereto and/or release any Credit Party thereof. If an Event of Default shall have occurred and be continuing, Agent is authorized and empowered to accept the return of the goods represented by any of the Accounts, without notice to or consent by each Credit Party, all without discharging or in any way affecting each Credit Party’s liability hereunder.

(h) Adjustments . Each Credit Party will not, without Agent’s consent, compromise or adjust any Accounts (or extend the time for payment thereof) or accept any returns of merchandise or grant any additional discounts, allowances or credits thereon except for those compromises, adjustments, returns, discounts, credits and allowances as have been heretofore customary in the ordinary course of business of each Credit Party.

4.08 Exculpation of Liability

. Nothing herein contained shall be construed to constitute Agent as agent of any Credit Party for any purpose whatsoever, nor shall Agent be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same may be located and regardless of the cause thereof. Agent, whether by anything herein or in any assignment or otherwise, does not assume any of any Credit Party’s obligations under any contract or agreement assigned to Agent, and Agent shall not be responsible in any way for the performance by any Credit Party of any of the terms and conditions thereof.

4.09 Financing Statements

. Except with respect to (a) the financing statements filed by the Working Capital Lender, (b) the financing statements described on Schedule 4.09 , and (c) any financing statement with respect to a Permitted Lien, no financing statement covering any of the Collateral or any proceeds thereof is on file in any public office.

4.10 Effectiveness of Security Interest in Certain Collateral of NBS.

Notwithstanding any provision in this Agreement or any other Transaction Document to the contrary, no security interest granted by NBS to the Agent and the Lenders herein or therein with respect to its Collateral shall be effective to secure the Series C or Series D Notes with respect to such portion of its Collateral as is (i) located in the state of Georgia to the extent that the Consent of the Georgia Public Service Commission is required with respect to the grant of a security interest in or pledge of assets to secure such Indebtedness, (it being understood that the foregoing exclusion shall not apply to any Collateral for which such Consent is not so required), until such Consent is obtained, (ii) located in the state of New Jersey to the extent that the Consent of New Jersey Public Service Commission is required with respect to the grant of a security interest in or pledge of assets to secure such Indebtedness, (it being understood that the foregoing exclusion shall not apply to any Collateral for which such Consent is not so required), until such Consent is obtained, and (iii) located in the state of West Virginia to the extent that the Consent of the West Virginia Public Service Commission is required with respect to the grant of a security interest in or pledge of assets to secure such Indebtedness, (it being understood that the foregoing exclusion shall not apply to any Collateral for which such Consent is not so required), until such consent is obtained.

4.11 Control Account – NBS Consents/Approvals.

On the Closing Date, Parent shall deposit $3,000,000 (the “ Escrowed Funds ”) in a non-interest bearing account in the name of, and controlled exclusively by, Agent. The Escrowed Funds shall be held in escrow by Agent, on behalf of Agent and Lenders, and disbursed at the sole direction of Agent as provided below. After the occurrence and during the continuance of an Event of Default, Agent shall, at its discretion, or shall, at the direction of the Required Lenders, disburse all Escrowed Funds then held in such account, to be applied in accordance with Section 11.03 or in such other manner as the Required Lenders shall determine. If, on or before the date that is 120 days following the Closing Date, the Borrower provides evidence to Agent, satisfactory to Agent in its reasonable discretion, that the Consents and notices described in Sections 4.10 and 13.08 have been obtained or given, as applicable, and the security interest in such portion of the Collateral described in Section 4.10 has become effective in accordance with Section 4.10 and the Guarantee provided by NBS pursuant to Article XIII has become effective in accordance with Section 13.08 , then Agent shall cause the Escrowed Funds then held in such account to be disbursed to Parent. Agent shall not, under any circumstances or in any event whatsoever, have any liability for any error or omission or delay of any kind in connection with the foregoing account and Escrowed Funds, or for any damage resulting therefrom except as a result of the gross negligence or willful misconduct of the Agent.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES

The Credit Parties, jointly and severally, represent and warrant to each Lender that the following are, and after giving effect to the transactions contemplated by the Transaction Documents, the Original Acquisition Documents and the BVX Acquisition Documents will be, true, correct and complete:

5.01 Existence and Power

. Each Credit Party and each of its Subsidiaries: (a) is a corporation, limited liability company or limited partnership, as applicable, duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization; (b) has all requisite power and authority to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently, or is currently proposed to be, engaged; (c) is duly qualified as a foreign entity, licensed and in good standing under the laws of its state of organization and of each other jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, except to the extent that the failure to so qualify would not have a Material Adverse Effect; and (d) has the power and authority to execute, deliver and perform its obligations under each Transaction Document to which it is or will be a party and to borrow hereunder. Schedule 5.01 contains a true, complete and correct list of each Credit Party’s and each of its Subsidiaries’ jurisdiction of organization and each jurisdiction where it is qualified to do business as a foreign entity.

5.02 Authorization; No Contravention

. The execution, delivery and performance by each Credit Party of this Agreement and each other Transaction Document to which it is or will be a party and the consummation of the transactions contemplated hereby and thereby, including the issuance of, or performance of the terms of, the Securities: (a) has been duly authorized by all necessary action (including, obtaining approval of its stockholders, partners, general partners, members or other applicable equity owners, if necessary); (b) do not and will not contravene the terms of the Organization Documents of such Credit Party or any of its Subsidiaries (or any other applicable organizational or constituent documents), or any amendment thereof or any Requirement of Law applicable to such Person or such Person’s assets, business or properties; (c) do not and will not (i) conflict with, contravene, result in any violation or breach of or default under (with or without the giving of notice or the lapse of time or both), (ii) create in any other Person a right or claim of termination or amendment of, or (iii) require modification, acceleration or cancellation of, any Contractual Obligation of any Credit Party or any of its Subsidiaries; and (d) do not and will not result in the creation of any Lien (or obligation to create a Lien) against any property, asset or business of any Credit Party or any of its Subsidiaries (other than Permitted Liens).

5.03 Governmental Authorization; Third Party Consents

. Except for the requirements of applicable “blue sky” laws, no approval, consent, compliance, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person in respect of any Requirement of Law or Contractual Obligation, and no lapse of a waiting period under a Requirement of Law or Contractual Obligation, is necessary or required in connection with the execution, delivery or performance by (including the payment of interest on the Notes), or enforcement against (except for any Consents that may be required from a Governmental Authority before Agent may exercise certain rights in connection with an Event of Default), any Credit Party of the Transaction Documents to which it is a party or the consummation of the transactions contemplated hereby or thereby.

5.04 Binding Effect

. This Agreement has been, and each of the Transaction Documents to which any Credit Party will be a party will be, duly executed and delivered by such Credit Party and this Agreement constitutes, and such Transaction Documents will constitute, the legal, valid and binding obligation of such Credit Party enforceable against such Credit Party in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity relating to enforceability.

5.05 Litigation

. Except as set forth on Schedule 5.05 , there are no legal actions, suits, proceedings, claims or disputes pending or, to the knowledge of any Credit Party, threatened, at law, in equity, in arbitration or before any Governmental Authority against or affecting such Credit Party or any of its Subsidiaries that (a) purport to affect or pertain to this Agreement, any other Transaction Document, any Original Acquisition Document or any BVX Acquisition Document, or any of the transactions contemplated hereby or thereby, or (b) could reasonably be expected to result in equitable relief or in monetary judgments, individually or in the aggregate, in excess of $250,000. No injunction, writ, temporary restraining order, decree or any order of any nature has been issued by any court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of the Transaction Documents.

5.06 Compliance with Laws

. Except as set forth on Schedule 5.06 , each Credit Party and each of its Subsidiaries is in compliance with all Requirements of Law.

5.07 No Default or Breach

. No event has occurred and is continuing or would result from the incurring of obligations by the Credit Parties under the Transaction Documents which constitutes or, with the giving of notice or lapse of time or both, would constitute an Event of Default. Neither any Credit Party nor any of its Subsidiaries is in default under or with respect to any Contractual Obligation in any material respect. Immediately prior to the execution and delivery of this Agreement no default or event of default existed under the Original Securities Purchase Agreement.

5.08 Title to Properties.

(a) Schedule 5.08(a) contains a true, complete and correct list of all owned real property reflected on the Pro Forma Balance Sheet or used in connection with the respective businesses of the Credit Parties and each of their respective Subsidiaries. Each Credit Party and/or each of its Subsidiaries has good indefeasible and marketable title in and to all real property and good title to all other properties reflected on the Pro Forma Balance Sheet or used in connection with their respective businesses, in each case, free and clear of all Liens, liabilities and rights except for Permitted Liens and as provided on Schedule 5.08(a) .

(b) Schedule 5.08(b) contains a list of all real property leases reflected on the Pro Forma Balance Sheet or used in connection with the respective businesses of the Credit Parties and each of their respective Subsidiaries. Each Credit Party and/or each of its Subsidiaries holds all of the right, title and interest of the tenant under the leases reflected on the Pro Forma Balance Sheet or used in connection with their respective businesses free and clear of all Liens, liabilities and rights except as provided on Schedule 5.08(b) .

5.09 Use of Real Property

. Except as set forth on Schedule 5.09 , (x) the owned and leased real properties reflected on the Pro Forma Balance Sheet or used in connection with the respective businesses of the Credit Parties and their respective Subsidiaries are used and operated in compliance and conformity with all Contractual Obligations and Requirements of Law, except to the extent that the failure so to comply would not have a Material Adverse Effect, and (y) neither any Credit Party nor any of its Subsidiaries has received notice of violation of any applicable zoning or building regulation, ordinance or other law, order, regulation or other Requirements of Law relating to the operations of any Credit Party or any of its Subsidiaries and there is no such violation. Except as set forth on Schedule 5.09 , all structures, improvements and other buildings that are owned or covered by leases reflected on the Pro Forma Balance Sheet or used in connection with the business of the Credit Parties and their respective Subsidiaries comply with all applicable ordinances, codes, regulations and other Requirements of Law, have a valid and subsisting certificate of occupancy for their present use, and neither any Credit Party nor any of its Subsidiaries has received any written notice from any Governmental Authority which is still outstanding of any failure to obtain any certificate, permit, license, authorization or approval with respect to the real property, or any intended revocation, modification or cancellation of same, and no Requirement of Law presently in effect or condition precludes or materially restricts continuation of the present use of such properties. Each lease relating to leased real property reflected on the Pro Forma Balance Sheet or used in connection with the business of the Credit Parties or any of their respective Subsidiaries, is in full force and effect, and the applicable Credit Party and/or Subsidiary enjoys peaceful and undisturbed possession thereunder. There is no default on the part of any Credit Party or any of its Subsidiaries or event or condition which (with notice or lapse of time, or both) would constitute a default on the part of any Credit Party or any of its Subsidiaries, under any such lease. There are no service contracts, maintenance contracts, union contracts, concession agreements, licenses, agency agreements or any other Contractual Obligations affecting the real property or the leased property reflected on the Pro Forma Balance Sheet or used in connection with the business of the Credit Parties and their respective Subsidiaries or the operation thereof, other than those listed on Schedule 5.09 , except for Contractual Obligations which are cancelable on no more than thirty (30) days’ notice. There are no pending or, to the knowledge of any Credit Party, threatened condemnation or eminent domain proceedings that would affect any part of the leased property reflected on the Pro Forma Balance Sheet or used in connection with the business of the Credit Parties and their respective Subsidiaries. There is no Litigation pending or, to the knowledge of any Credit Party, threatened against the real property or the leased property on the Pro Forma Balance Sheet or used in connection with the business of the Credit Parties and their respective Subsidiaries which would in any way affect title to such real property or leased property.

5.10 Taxes.

(a) Each Credit Party and each of its Subsidiaries has filed all Tax Returns that it was required to file. All such Tax Returns were true, correct and complete in all material respects. All Taxes, other than de minimus amounts, owed by any Credit Party or any of its Subsidiaries (whether or not shown on any Tax Return) have been paid. Except as set forth on Schedule 5.10, neither any Credit Party nor any of its Subsidiaries currently is the beneficiary of any extension of time within which to file any Tax Return. There are no Liens on any of the assets of any Credit Party or any of their respective Subsidiaries that arose in connection with any failure (or alleged failure) to pay any Tax, other than Permitted Liens as provided on Schedule 5.10. Each of NBS and ISG has, since its inception, been treated as a partnership for federal, state and local income Tax purposes. Each of NBS and ISG has never made an election to classify as a corporation for federal, state or local income Tax purposes.

(b) Each Credit Party and each of its Subsidiaries has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party.

(c) There is no dispute or claim concerning any Tax liability of any Credit Party or any of its Subsidiaries either (i) claimed or raised by any Governmental Authority in writing or (ii) as to which any Credit Party has knowledge based upon personal contact with any agent of such authority.

(d) Neither any Credit Party nor any of its Subsidiaries has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency.

(e) Neither any Credit Party nor any of its Subsidiaries has any liability for the Taxes of any Person other than such Credit Party and its Subsidiaries (i) as a transferee or successor, (ii) by contract, or (iii) otherwise.

(f) Any reference in this Section 5.10 to any Credit Party shall be deemed to include each predecessor of such Credit Party, each subsidiary of such Credit Party, and each entity with respect to which such Credit Party has successor or transferee liability.

5.11 Financial Statements and Projections.

(a) The pro-forma balance sheet of each of the Credit Parties dated as of November 30, 2013 (collectively, the “ Pro Forma Balance Sheet ”) furnished to the Agent on the Closing Date reflects the consummation of the transactions contemplated under this Agreement, the BVX Acquisition Documents, the Equity Raise Documents and the other Transaction Documents (all such transactions, collectively, the “ Transactions ”) and is accurate, complete and correct and fairly reflects the financial condition of the Credit Parties as of the Closing Date after giving effect to the Transactions. The Pro Forma Balance Sheet has been certified as accurate, complete and correct in all material respects by an Authorized Officer of each Credit Party.

(b) The twelve-month cash flow projections of each of the Credit Parties and their projected balance sheet as of the Closing Date, copies of which are annexed hereto as Exhibit J (collectively, the “ Projections ”) were prepared by an Authorized Officer of the Credit Parties in good faith, are based on underlying assumptions which provide a reasonable basis for the projections contained therein and reflect the Credit Parties’ judgment based on present circumstances of the most likely set of conditions and course of action for the projected period. The Projections, together with the Pro Forma Balance Sheet, are referred to as the “ Pro Forma Financial Statements ”.

(c) The (i) audited balance sheet of each of the Credit Parties as of December 31, 2012, the related statements of income, cash flows and changes in stockholder’s deficit for the fiscal year ended on such date, and (ii) the unaudited interim financial statements of each of the Credit Parties for the eleven (11) month period ended November 30, 2013, including a balance sheet as of such date and related statements of income, changes in stockholder’s equity and changes in cash flow for such period, copies of which have been delivered to Agent have been prepared in accordance with GAAP, consistently applied (except for changes in application in which the Credit Parties’ independent certified public accountants concur, and except for normal year-end adjustments and footnote presentations) and present fairly the financial position of the Credit Parties at such date and the results of their operations for such periods (the “ Unaudited Financial Statements ”). To the best of each Credit Party’s knowledge, since the last day of such Credit Party’s most recently ended fiscal year, there has been no material changes in the condition, financial or otherwise, of the Credit Parties and their respective Subsidiaries, on a Consolidated Basis, shown on the consolidated balance sheet as of such date and no change in the aggregate value of machinery, equipment and Real Property owned by the Credit Parties, except changes in the Ordinary Course of Business, none of which individually or in the aggregate has been materially adverse.

(d) Prior to the Closing Date, BVX has not engaged in any business activities other than (i) activities incidental to maintenance of its company existence and (ii) performance of its obligations under the BVX Acquisition Documents to which it is a party.

5.12 Operating Company

. Each Credit Party is “an entity that is primarily engaged, directly or through a majority owned subsidiary or subsidiaries, in the production or sale of a product or service other than the investment of capital” within the meaning of the U.S. Department of Labor plan asset regulations, 29 C.F. R. §2510.3 101. None of the Credit Parties is a “passive business” as defined in the SBA Regulations.

5.13 Disclosure.

(a) Agreement and Other Documents . This Agreement and the other Transaction Documents, together with all exhibits and schedules hereto and thereto, and the agreements, certificates and other documents furnished to the Agent or any Lender by or on behalf of the Credit Parties and their respective Subsidiaries at the Closing, do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained herein or therein, in the light of the circumstances under which they were made, not misleading.

(b) Material Adverse Effects . There is no fact known to any Credit Party which such Credit Party has not disclosed to the Lenders in writing which could reasonably be expected to have a Material Adverse Effect.

5.14 Absence of Certain Changes or Events

. Since December 31, 2012, or with respect to BVX, June 30, 2013, except as set forth on Schedule 5.14 , neither any Credit Party nor any of its Subsidiaries has (i) issued any stock, bonds or other corporate securities, (ii) borrowed any amount or incurred any liabilities (absolute or contingent), other than in the Ordinary Course of Business, in excess of $100,000, (iii) discharged or satisfied any Lien or incurred or paid any obligation or liability (absolute or contingent), other than in the Ordinary Course of Business, in excess of $100,000, (iv) declared or made any payment or distribution to the holders of its Equity Interests or purchased or redeemed any shares of its Equity Interests, (v) mortgaged, pledged or subjected to Lien any of its assets, tangible or intangible, (vi) sold, assigned or transferred any of its tangible assets, or canceled any debts or claims, (vii) sold, assigned or transferred any patents, trademarks, trade names, copyrights, trade secrets or other intangible assets, (viii) suffered any losses of property, or waived any rights of substantial value, (ix) suffered any Material Adverse Effect, (x) expended any material amount, granted any bonuses or extraordinary salary increases, (xi) entered into any transaction involving consideration in excess of $100,000 except as otherwise contemplated hereby or (xii) entered into any agreement or transaction, or amended or terminated any agreement, with an Affiliate.

5.15 O.S.H.A. and Environmental Compliance.

(a) Each Credit Party and each of its Subsidiaries has duly complied in all material respects with, and its facilities, business, assets, property, leaseholds, Real Property and equipment are in compliance in all material respects with and (the provisions of the Federal Occupational Safety and Health Act, the Environmental Protection Act, RCRA and all other Environmental Laws; there are no outstanding citations, notices or orders of non-compliance issued to any Credit Party or any of its Subsidiaries as of the Closing Date or relating to their business, assets, property, leaseholds, Real Property or equipment under any such laws, rules or regulations;

(b) Each Credit Party and each of its Subsidiaries has all federal, state and local licenses, certificates or permits relating to all applicable Environmental Laws necessary to operate the business of the Credit Parties and their Subsidiaries; and

(c) (i) There are no signs of releases, spills, discharges, leaks or disposal (collectively referred to as “ Releases ”), of Hazardous Substances at, upon, under or within any Real Property owned or leased by any Credit Party or any of its Subsidiaries, (ii) there are no underground storage tanks or to the best of any Credit Party’s knowledge polychlorinated biphenyls on any Real Property owned or leased by any Credit Party or any of its Subsidiaries, (iii) no Real Property owned or leased by any Credit Party or any of its Subsidiaries has ever been used as a treatment, storage or disposal facility of Hazardous Waste; (iv) no Hazardous Substances or substances governed by an Environmental Law are present on any Real Property owned or leased by any Credit Party or any of its Subsidiaries excepting such quantities as are handled in compliance with all applicable manufacturer’s instructions and Environmental Laws and in proper storage containers and as are necessary for the operation of the commercial business of the Credit Parties, their respective Subsidiaries or of their respective tenants; and (v) all underground storage tanks on the Real Property are in good condition and are being maintained in compliance with all applicable federal, state and local laws and regulations, including all Environmental Laws.

5.16 Investment Company/Government Regulations

. No Credit Party is an “investment company” within the meaning of the Investment Company Act of 1940, as amended. Neither any Credit Party nor any of its Subsidiaries is subject to regulation under the Federal Power Act, the Interstate Commerce Act, or any federal or state statute or regulation limiting its ability to incur Indebtedness.

5.17 Subsidiaries.

(a) Schedule 5.17 sets forth a complete and accurate list of all of the Subsidiaries of each Credit Party as of the Closing Date together with their respective jurisdictions of incorporation or organization. All of the outstanding Equity Interests in, the Subsidiaries are validly issued, fully paid and non-assessable. Except as set forth on Schedule 5.17, as of the Closing Date, all of the outstanding Equity Interests in each of the Subsidiaries are owned by a Credit Party or by a Wholly-Owned Subsidiary free and clear of any Liens. No Subsidiary has outstanding options, warrants, subscriptions, calls, rights, convertible securities or other agreements or commitments obligating the Subsidiary to issue, transfer or sell any securities of the Subsidiary.

(b) Except for the Subsidiaries of the Credit Parties, no Credit Party owns of record or beneficially, directly or indirectly, (i) any Equity Interests convertible into Equity Interests any other Person, and (ii) any Equity Interest in any limited liability company, partnership, joint venture or other non-corporate business enterprises.

5.18 Capitalization

. Schedule 5.18 sets forth, as the Closing Date (after giving effect to the transactions contemplated hereby), a true and complete listing of each class of authorized Equity Interests of each Credit Party and its Subsidiaries, the number of Equity Interests which are issued and outstanding, as well as a list of all warrants, options, rights and securities convertible into Equity Interests, together with the number of Equity Interests to be issued upon the exercise or conversion of such warrants, options, rights and convertible securities, all of which have been reserved for insurance. No Credit Party has any Equity Interests held in treasury. Schedule 5.18 sets forth, (A) as of the Initial Closing Date, after giving effect to the transactions contemplated by the Original Securities Purchase Agreement and the other Transaction Documents, (i) the number of shares of Common Stock of Parent which were issued and outstanding, and (ii) the number of shares of Common Stock of Parent which were reserved for issuance (x) pursuant to the exercise of stock options which are “in the money” as of the Initial Closing Date, (y) upon conversion of outstanding shares of preferred stock of Parent, and (z) the number of shares of Common Stock issuable upon exercise of the Original Warrants (the sum of the foregoing being the “fully diluted” number of shares of Common Stock as of the Initial Closing Date), and the number of shares of Common Stock issuable upon exercise of the Original Warrants was equal to 5.00% of the sum of the foregoing, and (B) as of the Closing Date, after giving effect to the transactions contemplated hereby and the other Transaction Documents, (i) the number of shares of Common Stock of Parent which are issued and outstanding, and (ii) the number of shares of Common Stock of Parent which are reserved for issuance (x) pursuant to the exercise of stock options which are “in the money” as of the Closing Date, (y) upon conversion of outstanding shares of preferred stock of Parent, and (z) the number of shares of Common Stock issuable upon exercise of the Warrants (the sum of the foregoing being the “fully diluted” number of shares of Common Stock), and the number of shares of Common Stock issuable upon exercise of the New Warrants is equal to 4.25% of the sum of the foregoing. The Warrants and all outstanding Equity Interests have been duly authorized by all necessary action. Upon exercise of the Warrants the shares of Common Stock issuable upon exercise thereof will be, validly issued, fully paid and non-assessable and shall be free and clear of all Liens and the issuance of the foregoing will not be subject to preemptive rights in favor of any Person and will not result in the issuance of any additional Equity Interests of Parent or the triggering of any anti-dilution or similar rights contained in any options, warrants, debentures or other securities or agreements of Parent. Each warrant, option, convertible security and other right to acquire Equity Interests of Parent includes provisions that are substantially similar to the provisions set forth in Section 3(a) of the Warrants.

5.19 Private Offering

. No form of general solicitation or general advertising was used by any Credit Party or any of its Subsidiaries, or their respective representatives in connection with the offer or sale of the Securities. No registration of the Securities pursuant to the provisions of the Securities Act or the state securities or “blue sky” laws will be required for the offer, sale or issuance of the Securities pursuant to this Agreement. Each Credit Party agrees that neither it, nor anyone acting on its behalf, will offer or sell the Securities or any other security so as to require the registration of the Securities pursuant to the provisions of the Securities Act or any state securities or “blue sky” laws, unless such Securities are so registered.

5.20 Broker’s, Finder’s or Similar Fees

. Except as set forth on Schedule 5.20 , there are no brokerage commissions, finder’s fees or similar fees or commissions payable in connection with the transactions contemplated hereby based on any agreement, arrangement or understanding with any Credit Party or any of its Subsidiaries, or any action taken by any such Person.

5.21 Labor Relations

. Neither any Credit Party nor any of its Subsidiaries has committed or is engaged in any unfair labor practice. Except as set forth in Schedule 5.21 , there is (a) no unfair labor practice complaint pending or threatened against any Credit Party or any of its Subsidiaries before the National Labor Relations Board or any other Governmental Authority and no grievance or arbitration proceeding arising out of or under collective bargaining agreements is so pending or threatened, (b) no strike, labor dispute, slowdown or stoppage pending or threatened against any Credit Party or any of its Subsidiaries, (c) no union representation question existing with respect to the employees of any Credit Party or any of its Subsidiaries and no union organizing activities are taking place, and (d) no employment contract with any employee or independent contractor of any Credit Party or any of its Subsidiaries. Each Credit Party and each of its Subsidiaries is in compliance in all material respects with all Applicable Laws respecting employment and employment practices, terms and conditions of employment and wages and hours. Neither any Credit Party nor any of its Subsidiaries is a party to any collective bargaining agreement.

5.22 Employee Benefit Plans

. Neither any Credit Party nor any member of the Controlled Group maintains or contributes to any Plan other than those listed on Schedule 5.22 hereto. Except as set forth in Schedule 5.22 , (i) no Plan has incurred any “accumulated funding deficiency,” as defined in Section 302(a)(2) of ERISA and Section 412(a) of the Code, whether or not waived, and each Credit Party and each member of the Controlled Group has met all applicable minimum funding requirements under Section 302 of ERISA in respect of each Plan, (ii) each Plan which is intended to be a qualified plan under Section 401(a) of the Code as currently in effect has been determined by the Internal Revenue Service to be qualified under Section 401(a) of the Code and the trust related thereto is exempt from federal income Tax under Section 501(a) of the Code, (iii) neither any Credit Party nor any member of the Controlled Group has incurred any liability to the PBGC other than for the payment of premiums, and there are no premium payments which have become due which are unpaid, (iv) no Plan has been terminated by the plan administrator thereof nor by the PBGC, and there is no occurrence which would cause the PBGC to institute proceedings under Title IV of ERISA to terminate any Plan, (v) at this time, the current value of the assets of each Plan exceeds the present value of the accrued benefits and other liabilities of such Plan and neither any Credit Party nor any member of the Controlled Group knows of any facts or circumstances which would materially change the value of such assets and accrued benefits and other liabilities, (vi) neither any Credit Party nor any member of the Controlled Group has materially breached any of the responsibilities, obligations or duties imposed on it by ERISA with respect to any Plan, (vii) neither any Credit Party nor any member of a Controlled Group has incurred any material liability for any excise Tax arising under Section 4972 or 4980B of the Code, and, to the best of each Credit Party’s knowledge, no fact exists which could give rise to any such liability, (viii) neither any Credit Party nor any member of the Controlled Group nor any fiduciary of, nor any trustee to, any Plan, has engaged in a material non-exempt “prohibited transaction” described in Section 406 of the ERISA or Section 4975 of the Code, nor taken any action which would constitute or result in a Termination Event with respect to any such Plan which is subject to ERISA, (ix) each Credit Party and each member of the Controlled Group has made all contributions due and payable with respect to each Plan, (x) there exists no event described in Section 4043(b) of ERISA, for which the thirty (30) day notice period contained in 29 CFR §2615.3 has not been waived, (xi) neither any Credit Party nor any member of the Controlled Group has any fiduciary responsibility for investments with respect to any Plan existing for the benefit of persons other than employees or former employees of the Credit Parties or any member of the Controlled Group, (xii) neither any Credit Party nor any member of the Controlled Group has withdrawn, completely or partially, from any Multiemployer Plan so as to incur liability under the Multiemployer Pension Plan Amendments Act of 1980; and (xiii) no Credit Party is, and no Credit Party shall become, a member of a Multiemployer Plan.

5.23 Patents, Trademarks, Etc.

Each Credit Party and each of its Subsidiaries owns all patents, trademarks, permits, service marks, trade names, copyrights, licenses, franchises and formulas, or rights with respect to the foregoing, and has obtained assignments of all leases and other rights of whatever nature, necessary for the present conduct of its business, without any known conflict with the rights of others which, or the failure to own or obtain which, as the case may be, would be reasonably likely to result in a Material Adverse Effect.

5.24 Potential Conflicts of Interest

. Except as set forth on Schedule 5.24 , no officer, director, stockholder or other security holder of any Credit Party or any of its Subsidiaries: (a) owns, directly or indirectly, any interest in (excepting less than 5% holdings for investment purposes in Equity Interests of publicly held and traded companies), or is an officer, director, employee or consultant of, any Person that is, or is engaged in business as, a competitor, lessor, lessee, supplier, distributor, sales agent or customer of, or lender to or from, such Credit Party or any of such Credit Party’s Subsidiaries; (b) owns, directly or indirectly, in whole or in part, any tangible or intangible property that any Credit Party or any of its Subsidiaries uses in the conduct of business; or (c) has any cause of action or other claim whatsoever against, or owes or has advanced any amount to, any Credit Party or any of its Subsidiaries, except for claims in the Ordinary Course of Business such as for accrued vacation pay, accrued benefits under employee benefit plans, and similar matters and agreements existing on the date hereof.

5.25 Trade Relations

. Set forth on Schedule 5.25 is a true and correct list of the ten largest customers of each Credit Party in terms of sales during the twelve month period ended December 31, 2012, or with respect to BVX, June 30, 2013, and any other customers who accounted for more than 5% of such sales, and a list of the five largest suppliers to each Credit Party in terms of purchases during the twelve month period ended December 31, 2012, or with respect to BVX, June 30, 2013, as well as any sole source suppliers of goods or services for which there is no ready alternative to such Credit Party and its Subsidiaries on comparable terms. There exists no actual or, to the knowledge of any Credit Party, threatened termination, cancellation or limitation of, or any adverse modification or change in, the business relationship of such Credit Party or its business with any customer or any group of customers whose purchases are individually or in the aggregate material to the business of such Credit Party, or with any material supplier, and there exists no present condition or state of facts or circumstances that could reasonably be expected to have a Material Adverse Effect or prevent such Credit Party or its Subsidiaries from conducting their business after the consummation of the transactions contemplated by this Agreement, in substantially the same manner in which such business has heretofore been conducted.

5.26 Indebtedness

. Schedule 5.26 lists (i) the amount of all outstanding Indebtedness of the Credit Parties and their respective Subsidiaries (other than Indebtedness under this Agreement) as of the Closing Date, (ii) the Liens that relate to such Indebtedness and that encumber the assets of the Credit Parties and their respective Subsidiaries, (iii) the name of each lender thereof, and (iv) the amount of any unfunded commitments available to the Credit Parties or any of their respective Subsidiaries in connection with any such Indebtedness. The subordination provisions contained in the Seller Subordination Agreement and the Rosen Subordination Agreement are enforceable against the holders of the Seller Notes and the Rosen Notes, respectively, by the Agent on behalf of the Lenders. The Obligations (including post petition interest, whether or not allowed as a claim under bankruptcy or similar laws) constitutes “Senior Debt” or similar term relating to such obligations and all such obligations are entitled to the benefits of the subordination provisions contained in the Rosen Subordination Agreement. Each Credit Party acknowledges that the Agent and each Lender is entering into this Agreement and is purchasing the Notes in reliance upon the subordination provisions contained in the Seller Subordination Agreement and the Rosen Subordination Agreement.

5.27 Material Contracts

. Neither any Credit Party nor any of its Subsidiaries is or will be a party to any Contractual Obligation, or is subject to any charge, corporate restriction, judgment, injunction, decree, or Requirement of Law, that could reasonably be expected to have a Material Adverse Effect. Schedule 5.27 lists all contracts, agreements, commitments and other Contractual Obligations of the Credit Parties and their Subsidiaries, whether written or oral, other than (a) the Transaction Documents, (b) purchase orders in the Ordinary Course of Business, and (c) any other contracts, agreements, commitments and other Contractual Obligations of the Credit Parties or any of their Subsidiaries that do not extend beyond one year and involve the receipt or payment of not more than $500,000. Each of the Material Contracts are in full force and effect. Each Credit Party and each of its Subsidiaries has satisfied in full or provided for all of its liabilities and obligations under each Material Contract requiring performance prior to the date hereof in all material respects, and are not in default under any of them, nor, to the knowledge of any Credit Party, does any condition exist that with notice or lapse of time or both would constitute such a default. To the knowledge of any Credit Party, no other party to any such Material Contract is in default thereunder, nor does any condition exist that with notice or lapse of time or both would constitute such a default. Except as set forth on Schedule 5.27 , no approval or consent of any Person is needed for all of the Material Contracts to continue to be in full force and effect.

5.28 Insurance

. Schedule 5.28 accurately summarizes all of the insurance policies or programs of the Credit Parties and their Subsidiaries in effect as of the date hereof, and indicates the insurer’s name, policy number, expiration date, amount of coverage, type of coverage, annual premiums, exclusions and deductibles, and also indicates any self insurance program that is in effect. All such policies are in full force and effect, are underwritten by financially sound and reputable insurers, are sufficient for all applicable Requirements of Law and otherwise are in compliance with the criteria set forth in Section 8.09 hereof. All such policies will remain in full force and effect and will not in any way be affected by, or terminate or lapse by reason of any of the transactions contemplated hereby.

5.29 [Intentionally Omitted].

5.30 Products Liability

. Except as set forth on Schedule 5.30 , there is no action, suit, proceeding, inquiry or investigation pending, or, to the knowledge of any Credit Party, threatened, by or before any Governmental Authority against any Credit Party or any of its Subsidiaries relating to any product alleged to have been sold by any Credit Party or any of its Subsidiaries and alleged to have been defective, or improperly designed or manufactured, nor to the knowledge of any Credit Party is there any valid basis for any such action, proceeding or investigation.

5.31 Solvency

. The Borrower and its Subsidiaries, taken as a whole, are Solvent.

5.32 Questionnaire

. All statements made by the Credit Parties in the Questionnaire are true and correct and do not, as of the date of this Agreement, contain any untrue statement of material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading in any material respect.

5.33 Location of Assets

. The chief executive offices of each Credit Party and each of its Subsidiaries and the books and records of each Credit Party and each of its Subsidiaries concerning their respective accounts are located only at the address set forth on Schedule 5.33 identified as such, and the only other places of business and locations of assets of each Credit Party and each of its Subsidiaries, if any, are the addresses set forth on Schedule 5.33 .

5.34 Certain Payments

. Except as set forth on Schedule 5.34 , neither the execution, delivery and performance by any Credit Party of this Agreement, nor the execution, delivery and performance by any Credit Party or any of its Subsidiaries of any of the other Transaction Documents, the Original Acquisition Documents or the BVX Acquisition Documents, nor the consummation of the transactions contemplated hereby or thereby shall require any payment by any Credit Party or any of its Subsidiaries, in cash or kind, under any other agreement, plan, policy, commitment or other arrangement. There are no agreements, plans, policies, commitments or other arrangements with respect to any compensation, benefits or consideration which will be materially increased, or the vesting of benefits of which will be materially accelerated, as a result of this Agreement, the other Transaction Documents, the Original Acquisition Documents or the BVX Acquisition Documents or the occurrence of any of the transactions contemplated hereby or thereby. There are no payments or other benefits payable by any Credit Party or any of its Subsidiaries, the value of which will be calculated on the basis of any of the transactions contemplated by this Agreement or the other Transaction Documents or the Original Acquisition Documents or the BVX Acquisition Documents.

5.35 Margin Requirements

. No part of the proceeds from the sale of the Securities hereunder will be used to purchase or carry any Margin Stock or to extend credit for the purpose of purchasing or carrying any Margin Stock. Neither the sale of the Securities nor the use of the proceeds thereof will violate or be inconsistent with the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System.

5.36 Anti-Terrorism Laws.

(a) General . Neither any Credit Party nor any Subsidiary or Affiliate of any Credit Party is in violation of any Anti-Terrorism Law or engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.

(b) Executive Order No. 13224 . Neither any Credit Party nor any Subsidiary or Affiliate of any Credit Party or their respective agents acting or benefiting in any capacity in connection with the Notes or other transactions hereunder is a Blocked Person.

(c) Blocked Person or Transactions . Neither any Credit Party nor to any Credit Party’s knowledge any of its Subsidiaries, Affiliates or agents acting in any capacity in connection with the Notes or other transactions hereunder (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to Executive Order No. 13224.

5.37 Trading with the Enemy

. Neither any Credit Party nor any of its Subsidiaries has engaged, nor does any Credit Party or any of its Subsidiaries intend to engage, in any business or activity prohibited by the Trading with the Enemy Act.

5.38 Acquisition Documents

. The Lenders have received true and complete copies of (including all schedules and exhibits delivered in connection therewith), each Original Acquisition Document and BVX Acquisition Document and all amendments to any such documents and other side letters or agreements affecting the terms thereof. None of the Original Acquisition Documents or the BVX Acquisition Documents has been amended or supplemented, nor have any of the material provisions thereof been waived, except pursuant to a written agreement or instrument which has heretofore been delivered to the Lenders. All of the transactions contemplated to occur under the Original Acquisition Documents and the BVX Acquisition Documents on or before the Closing Date (the “ Acquisition Closing Transactions ”) have been consummated pursuant to the terms thereof, no party to any of the Original Acquisition Documents or the BVX Acquisition Documents has waived the fulfillment of any material condition precedent set forth therein, without Agent’s written consent, and no party has failed to perform any of its material obligations thereunder. At the time of consummation thereof, the Acquisition Closing Transaction shall have been consummated in all material respects in accordance with all applicable laws. At the time of consummation of the Acquisition Closing Transaction, all necessary material consents and approvals of, and filings and registrations with, and all other actions in respect of, all Governmental Authorities required in order to make or consummate the Acquisition Closing Transaction will have been obtained, given, filed or taken and are or will be in full force and effect (or effective judicial relief with respect thereto has been obtained). All applicable waiting periods with respect thereto have or, prior to the time when required, will have, expired without, in all such cases, any action being taken by any competent authority which restrains, prevents, or imposes material adverse conditions upon the Transaction. Additionally, there does not exist any judgment, order or injunction prohibiting or imposing material adverse conditions upon the Transaction. All actions taken by the Credit Parties pursuant to or in furtherance of the Acquisition Closing Transaction have been taken in all material respects in compliance with all applicable laws. As of the Closing Date, to the knowledge of any Credit Party, each of the representations and warranties contained in the Original Acquisition Documents and the BVX Acquisition Documents made by Persons other than any Credit Party is true and correct.

5.39 Equity Raise Documents

. The Lenders have received true and complete copies of (including all schedules and exhibits delivered in connection therewith), each Original Equity Raise Document and Equity Raise Document and all amendments to any of the such documents and other side letters or agreements affecting the terms thereof. None of the Original Equity Raise Documents or the Equity Raise Documents has been amended or supplemented, nor have any of the material provisions thereof been waived, except pursuant to a written agreement or instrument which has heretofore been delivered to the Lenders. All of the transactions contemplated to occur under the Original Equity Raise Documents and Equity Raise Documents on or before the Closing Date (the “ Equity Raise Closing Transactions ”) have been consummated pursuant to the terms thereof, no party to any of the Original Equity Raise Documents or Equity Raise Documents has waived the fulfillment of any material condition precedent set forth therein, without Agent’s written consent, and no party has failed to perform any of its material obligations thereunder. At the time of consummation thereof, the Equity Raise Closing Transaction shall have been consummated in all material respects in accordance with all applicable laws. At the time of consummation of the Equity Raise Closing Transaction, all necessary material consents and approvals of, and filings and registrations with, and all other actions in respect of, all Governmental Authorities required in order to make or consummate the Equity Raise Closing Transaction will have been obtained, given, filed or taken and are or will be in full force and effect (or effective judicial relief with respect thereto has been obtained). All applicable waiting periods with respect thereto have or, prior to the time when required, will have, expired without, in all such cases, any action being taken by any competent authority which restrains, prevents, or imposes material adverse conditions upon the Transaction. Additionally, there does not exist any judgment, order or injunction prohibiting or imposing material adverse conditions upon the Transaction. All actions taken by the Credit Parties pursuant to or in furtherance of the Equity Raise Closing Transaction have been taken in all material respects in compliance with all applicable laws. As of the Closing Date, to the knowledge of any Credit Party, each of the representations and warranties contained in the Original Equity Raise Documents and the Equity Raise Documents made by Persons other than any Credit Party is true and correct.

5.40 Interest Rate Hedges and Other Hedging Agreements

. As of the Closing Date, neither any Credit Party nor any of their Subsidiaries are a party to any Interest Rate Hedges or any Other Hedging Agreements.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF THE LENDERS

Each Lender hereby, severally, but not jointly, represents and warrants as to itself as follows:

6.01 Authorization; No Contravention

. The execution, delivery and performance by it of this Agreement: (a) is within its power and authority and has been duly authorized by all necessary action; (b) does not contravene the terms of its organizational documents or any amendment thereof; and (c) will not violate, conflict with or result in any breach or contravention of any of its Contractual Obligations, or any order or decree directly relating to it.

6.02 Binding Effect

. This Agreement has been duly executed and delivered by it and this Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.

6.03 Purchase for Own Account

. The Securities to be acquired by it pursuant to this Agreement are being or will be acquired for its own account and with no intention of distributing or reselling such securities or any part thereof in any transaction that would be in violation of the securities laws of the United States of America, or any state, without prejudice, however, to each Lender’s right at all times to sell or otherwise dispose of all or any part of the Securities, in the case of a Lender under an effective registration statement under the Securities Act, or under an exemption from such registration available under the Securities Act, and subject, nevertheless, to the disposition of its property being at all times within its control. If any Lender should in the future decide to dispose of any of the Securities, such Lender understands and agrees that it may do so only in compliance with the Securities Act and applicable state securities laws, as then in effect. Each Lender agrees to the imprinting of a legend on certificates representing all of the Securities to the following effect: “THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.”

6.04 Broker’s, Finder’s or Similar Fees

. Except as set forth in Section 2.03 and Schedule 5.20 hereof, there are no brokerage commissions, finder’s fees or similar fees or commissions payable in connection with the transactions contemplated hereby based on any agreement, arrangement or understanding with it or any action taken by it.

6.05 Governmental Authorization; Third Party Consent

. No approval, consent, compliance, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person in respect of any Requirement of Law, and no lapse of a waiting period under a Requirement of Law, is necessary or required in connection with the execution, delivery or performance by it or enforcement against it of this Agreement or the transactions contemplated hereby.

ARTICLE 7

INDEMNIFICATION

7.01 Indemnification

. In addition to all other sums due hereunder or provided for in this Agreement, each Credit Party, jointly and severally, agrees to indemnify and hold harmless Agent, each Lender and their respective Affiliates and each of their respective officers, directors, agents, employees, Subsidiaries, partners, members, attorneys, accountants and controlling persons (each, an “ Indemnified Party ”) to the fullest extent permitted by law from and against any and all losses, claims, damages, expenses (including reasonable fees, disbursements and other charges of counsel and costs of investigation incurred by an Indemnified Party in any action or proceeding between any Credit Party or any of its Subsidiaries and such Indemnified Party (or Indemnified Parties) or between an Indemnified Party (or Indemnified Parties) and any third party or otherwise) or other liabilities, losses, or diminution in value (collectively, “ Liabilities ”) resulting from or arising out of any breach of any representation or warranty, covenant or agreement of any Credit Party in this Agreement, the Notes, the Warrants, or any of the other Transaction Documents, including the failure to make payment when due of amounts owing pursuant to this Agreement, the Notes, or any of the other Transaction Documents, on the due date thereof (whether at the scheduled maturity, by acceleration or otherwise) or any legal, administrative or other actions (including actions brought by the Agent, any Lender, any Credit Party, any of its Subsidiaries or any holders of equity or indebtedness of any Credit Party or any of its Subsidiaries or derivative actions brought by any Person claiming through or in the name of any Credit Party or any of its Subsidiaries, proceedings or investigations (whether formal or informal), or written threats thereof, based upon, relating to or arising out of any of the Transaction Documents, the transactions contemplated thereby, or any Indemnified Party’s role therein or in the transactions contemplated thereby; provided , however , that neither any Credit Party nor any of its Subsidiaries shall be liable under this Section 7.01 to an Indemnified Party: (a) for any amount paid by the Indemnified Party in settlement of claims by the Indemnified Party without such Credit Party’s consent (which consent shall not be unreasonably withheld or delayed), (b) to the extent that it is judicially determined in a final non-appealable judgment that such Liabilities resulted primarily from the willful misconduct or gross negligence of such Indemnified Party or (c) to the extent that it is judicially determined in a final non-appealable judgment that such Liabilities resulted primarily from the breach by such Indemnified Party of any representation, warranty, covenant or other agreement of such Indemnified Party contained in this Agreement; provided , further , that if and to the extent that such indemnification is unenforceable for any reason, the Credit Parties shall make the maximum contribution to the payment and satisfaction of such Liabilities which shall be permissible under Applicable Laws. In connection with the obligation of the Credit Parties to indemnify for expenses as set forth above, each Credit Party further agrees, upon presentation of appropriate invoices containing reasonable detail, to reimburse each Indemnified Party for all such expenses (including fees, disbursements and other charges of counsel and costs of investigation incurred by an Indemnified Party in any action or proceeding between any Credit Party (or any of its Subsidiaries) and such Indemnified Party (or Indemnified Parties) or between an Indemnified Party (or Indemnified Parties) and any third party or otherwise) as they are incurred by such Indemnified Party; provided , however , that if an Indemnified Party is reimbursed hereunder for any expenses, such reimbursement of expenses shall be refunded to the extent it is finally judicially determined that the Liabilities in question resulted primarily from (i) the willful misconduct or gross negligence of such Indemnified Party or (ii) the breach by such Indemnified Party of any representation, warranty, covenant or other agreement of such Indemnified Party contained in this Agreement or any other Transaction Document.

7.02 Procedure; Notification

. Each Indemnified Party under this Article 7 will, promptly after the receipt of notice of the commencement of any action, investigation, claim or other proceeding against such Indemnified Party in respect of which indemnity may be sought from the Credit Parties under this Article 7, notify the Credit Parties in writing of the commencement thereof. The omission of any Indemnified Party so to notify the Credit Parties of any such action shall not relieve the Credit Parties from any liability which they may have to such Indemnified Party unless, and only to the extent that, such omission results in the forfeiture of substantive rights or defenses of the Credit Parties. In case any such action, claim or other proceeding shall be brought against any Indemnified Party and it shall notify the Credit Parties of the commencement thereof, the Credit Parties shall be entitled to assume the defense thereof at their own expense, with counsel satisfactory to such Indemnified Party in its reasonable judgment; provided , however , that, if the Credit Parties have assumed the defense of any such action, claim or other proceeding, any Indemnified Party may, at its own expense, retain separate counsel to participate in such defense. Notwithstanding the foregoing, in any action, claim or proceeding in which the Credit Parties, on the one hand, and an Indemnified Party, on the other hand, is, or is reasonably likely to become, a party, such Indemnified Party shall have the right to employ separate counsel at the expense of the Credit Parties and to control its own defense of such action, claim or proceeding if, in the reasonable opinion of counsel to such Indemnified Party, a conflict or potential conflict exists between the Credit Parties, on the one hand, and such Indemnified Party, on the other hand, that would make such separate representation advisable; provided , however , that in no event shall the Credit Parties be required to pay fees and expenses under this Article 7 for more than one firm of attorneys in any jurisdiction in any one legal action or group of related legal actions. Each Credit Party agrees that it will not, without the prior written consent of the Lenders, settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated hereby (if any Indemnified Party is a party thereto or has been actually threatened to be made a party thereto) unless such settlement, compromise or consent includes an unconditional release of the Lenders and each other Indemnified Party from all liability arising or that may arise out of such claim, action or proceeding. Neither any Credit Party nor any of its Subsidiaries shall be liable for any settlement of any claim, action or proceeding effected against an Indemnified Party without their written consent, which consent shall not be unreasonably withheld. The rights accorded to Indemnified Parties hereunder shall be in addition to any rights that any Indemnified Party may have at common law, by separate agreement or otherwise.

7.03 Survival

. The obligations of the Credit Parties under this Article 7 shall survive termination of this Agreement and the Transaction Documents and payment in full of the Notes.

ARTICLE 8

AFFIRMATIVE COVENANTS

Until the payment in full of all principal of and interest on the Notes and all other amounts due to the Agent and Lenders under this Agreement and the other Transaction Documents, including all fees, expenses and amounts due in respect of indemnity obligations under Article 7, each Credit Party hereby covenants and agrees with the Agent and Lenders as set forth in this Article 8, provided , however , that following payment in full of all such amounts, for so long as any of the Warrants or shares of Common Stock issued upon exercise thereof are outstanding and owned by any Lender, each Credit Party hereby covenants and agrees with the Agent and Lenders only as set forth in (i) Sections 8.01(a) and (b) if Parent does not timely file periodic reports with the SEC which provide the information described in Sections 8.01(a) and (b), and (ii) Sections 8.13 and 8.17:

8.01 Financial Statements and Other Information

. Each Credit Party shall maintain, and cause each of its Subsidiaries to maintain, a system of accounting established and administered in accordance with sound business practices to permit preparation of financial statements in conformity with GAAP (it being understood that monthly financial statements are not required to have footnote disclosures). The Credit Parties shall deliver to the Agent each of the financial statements and other reports described below:

(a) Annual Financial Statements . Furnish Agent within one hundred twenty (120) days after the end of each fiscal year of the Credit Parties, audited financial statements of Parent and of Borrower, including statements of income and stockholders’ equity and cash flow from the beginning of the current fiscal year to the end of such fiscal year and the balance sheet as at the end of such fiscal year, all prepared on, with respect to each of Parent and Borrower, a Consolidated Basis and Consolidating Basis, in reasonable detail and complete and correct in all material respects and reported upon without qualification by Rothstein Kass or another independent certified public accounting firm selected by the Credit Parties and reasonably satisfactory to Agent (collectively, the “ Accountants ”).

(b) Quarterly Financial Statements . Furnish Agent within forty five (45) days after the end of each fiscal quarter, an unaudited balance sheet of Parent and of Borrower and unaudited statements of income and stockholders’ equity and cash flow of Parent and of Borrower reflecting results of operations from the beginning of the fiscal year (or the Initial Closing Date, in the case of the first such financial statement delivered after the Initial Closing Date) to the end of such quarter and for such quarter, all prepared on, with respect to each of Parent and Borrower, a Consolidated Basis and Consolidating Basis, in reasonable detail and complete and correct in all material respects, subject to normal and recurring year-end adjustments that individually and in the aggregate are not material to the business of Parent and Borrower respectively

(c) Monthly Financial Statements . Furnish Agent within forty five (45) days after the end of each of the month of January 2014 and the month of February 2014, and within thirty (30) days after the end of each month thereafter, an unaudited balance sheet of Parent and of Borrower and unaudited statements of income and stockholders’ equity and cash flow of the Credit Parties reflecting results of operations from the beginning of the fiscal year (or the Initial Closing Date, in the case of the first such financial statement delivered after the Initial Closing Date) to the end of such month and for such month, all prepared on, with respect to each of Parent and of Borrower, a Consolidated Basis and Consolidating Basis, in reasonable detail and complete and correct in all material respects, subject to normal and recurring year-end adjustments that individually and in the aggregate are not material to the Credit Parties’ business.

(d) Compliance Certificate . Together with each delivery of financial statements pursuant to Sections 8.01(a), 8.01(b) and 8.01(c) above, the Credit Parties shall deliver or cause to be delivered a fully and properly completed compliance certificate (in substantially the form attached hereto as Exhibit C (or in such other form or substance as shall be satisfactory to Agent) and referred to as a “ Compliance Certificate ”) signed by the chief executive officer or principal accounting officer of each Credit Party.

(e) Accountants’ Reports . Promptly upon receipt thereof, each Credit Party shall deliver copies of all significant reports submitted by the Accountant in connection with each annual, interim or special audit or review of any type of the financial statements or related internal control systems of the Credit Parties and their Subsidiaries made by the Accountant, including any comment letter submitted by the Accountant to management in connection with its services.

(f) Management Reports . Together with each delivery of financial statements of Parent and of Borrower, and their respective Subsidiaries pursuant to Sections 8.01(a), 8.01(b) and 8.01(c), the Credit Parties will deliver a management report, which can be in the form of an e-mail (i) summarizing the results of operations and financial condition of Parent and of the Borrower and their respective Subsidiaries for the month then ended and the portion of the current fiscal year then elapsed (or for the fiscal year then ended in the case of year end financials) and (ii) setting forth in comparative form the corresponding figures for the corresponding periods of the previous fiscal year and the corresponding figures from the most recent projections for the current fiscal year delivered pursuant to subsection 8.01(g) including explanations for any significant variations. The information above shall be presented in reasonable detail and shall be certified by the chief financial officer of each Credit Party to the effect that such information fairly presents the results of operations and financial condition of each of Parent and of Borrower on a Consolidated Basis and Consolidating Basis as at the dates and for the periods indicated.

(g) Projections . No earlier than sixty (60) days prior nor later than the last day of each fiscal year beginning with the current fiscal year, the Credit Parties shall prepare and deliver to Agent projections of the Credit Parties and their Subsidiaries for the next succeeding fiscal year, on a month to month basis, including a balance sheet and cash flow statement as at the end of each quarterly period and income statements and statements of cash flows for each relevant period and for the period commencing at the beginning of the fiscal year and ending on the last day of such relevant period. Such projections shall be prepared in good faith on the basis of sound financial planning practice consistent with past budgets and financial statements and that such Authorized Officer has no reason to question the reasonableness of any material assumptions on which such projections were prepared.

(h) SEC Filings/Press Releases . Promptly after the same are (i) filed, copies of all financial statements and regular, periodic or special reports which any Credit Party or Subsidiary may make to, or file with, the Securities and Exchange Commission or any successor or similar Governmental Authority, (ii) sent, copies of all financial statements, management reports and reports related thereto which any Credit Party or Subsidiary sends generally to its shareholders or other equity holders, and (iii) made available, all press releases to the public concerning material developments in the business of any of the Credit Parties or any of their respective Subsidiaries.

(i) Material Occurrences . Promptly notify Agent in writing upon the occurrence of (a) any Event of Default or Default; (b) any event, development or circumstance due to which any financial statements or other reports furnished to Agent or the Lenders fail in any material respect to present fairly, in accordance with GAAP consistently applied, the financial condition or operating results of the Parent or Borrower as of the date of such statements; (c) any accumulated retirement plan funding deficiency which, if such deficiency continued for two plan years and was not corrected as provided in Section 4971 of the Code, could subject any Credit Party or Subsidiary to a Tax imposed by Section 4971 of the Code; (d) each and every default by any Credit Party or Subsidiary which permits the holders of any Indebtedness of any Credit Party or Subsidiary, the outstanding principal amount of which exceeds $250,000, to accelerate the maturity of such Indebtedness, including the names and addresses of the holders of such Indebtedness and the amount of such Indebtedness; and (e) any other development in the business or affairs of any Credit Party or Subsidiary which could reasonably be expected to have a Material Adverse Effect; in each case describing the nature thereof and the action the Credit Party or such Subsidiary proposes to take with respect thereto. In addition, the Credit Parties shall notify Agent in writing promptly of any change in senior management (which, for purposes hereof, shall include any officer holding the title of vice president, or the functional equivalent thereof, and any executive officer holding a more senior title than vice president, or the functional equivalent thereof), and, in any event (i) if such change arises from a voluntary termination of employment, or as the result of death or disability of such officer, such notice shall be given no later than three (3) Business Days after any Credit Party shall have obtained knowledge (excluding the knowledge of such officer) of such event and (ii) if such change arises from an involuntary termination of employment, such notice shall be given no later than the date that is five (5) Business Days prior to the occurrence of such event, unless the Credit Parties determine, in the good faith exercise of their commercially reasonable judgment, that the delay in effectuating such termination due to the aforedescribed notice obligation would be reasonably likely to have a Material Adverse Effect, in which case the Credit Parties shall notify Agent in writing within one (1) Business Day after the occurrence of such involuntary termination.

(j) Litigation . Promptly upon any officer of any Credit Party obtaining knowledge of (i) the institution of any action, suit, proceeding, governmental investigation or arbitration against or affecting any Credit Party or any Subsidiary or any property of any Credit Party or Subsidiary not previously disclosed by the Credit Parties to the Agent or (ii) any material development in any action, suit, proceeding, governmental investigation or arbitration at any time pending against or affecting any Credit Party or Subsidiary or any property or former property of any Credit Party or Subsidiary which, in each case, could reasonably be expected to have a Material Adverse Effect, the Credit Parties will promptly give notice thereof to the Agent and provide such other information as may be reasonably available to it to enable the Agent, Lenders and their counsel to evaluate such matter.

(k) Subsidiaries . Not less than fifteen (15) days prior to creating a Subsidiary or acquiring the Equity Interests in a Person, such that such Person will become a Subsidiary, the applicable Credit Party shall notify the Agent of such Credit Party’s or of such Credit Party’s Subsidiary’s intention to create such Subsidiary or acquire such Equity Interests, and following such notice such Subsidiary will not be created or acquired until such Credit Party has caused each Subsidiary to execute a joinder to this Agreement, and the other Transaction Documents and/or a Guaranty in form and substance satisfactory to the Agent and Lenders.

(l) Notice of Corporate Changes . The Credit Parties shall provide prompt written notice to the Agent of any material change after the Initial Closing Date in the authorized and issued Equity Interests of any Credit Party or any Subsidiary or any other material amendment to their applicable charter, by laws or other organizational documents, such notice, in each case, to identify the applicable jurisdictions, capital structures or amendments, as applicable.

(m) Notice of Adverse Events . Furnish Agent with prompt written notice of (i) any lapse or other termination of any Consent issued to any Credit Party or any Subsidiary by any Governmental Authority or any other Person that is material to the operation of any Credit Party’s or Subsidiary’s business, (ii) any refusal by any Governmental Authority or any other Person to renew or extend any such Consent, (iii) copies of any periodic or special reports filed by any Credit Party or Subsidiary with any Governmental Authority or Person, if such reports indicate any material change, (iv) copies of any material notices and other communications from any Governmental Authority or Person which specifically relate to any Credit Party or Subsidiary or the industry in which they operate, and (v) the occurrence of any development or event which is reasonably likely to cause any Credit Party or Subsidiary not to be in compliance in all material respects with all federal, state and local laws relating to environmental protection and control and occupational safety and health.

(n) ERISA Notices and Requests . Furnish Agent with immediate written notice in the event that (i) any Credit Party or any member of the Controlled Group knows or has reason to know that a Termination Event has occurred, together with a written statement describing such Termination Event and the action, if any, which such Credit Party or member of the Controlled Group has taken, is taking, or proposes to take with respect thereto and, when known, any action taken or threatened by the Internal Revenue Service, Department of Labor or PBGC with respect thereto, (ii) any Credit Party or any member of the Controlled Group knows or has reason to know that a material non-exempt prohibited transaction (as defined in Sections 406 of ERISA and 4975 of the Code) has occurred together with a written statement describing such transaction and the action which such Credit Party or member of the Controlled Group has taken, is taking or proposes to take with respect thereto, (iii) a funding waiver request has been filed with respect to any Plan together with all communications received by any Credit Party or any member of the Controlled Group with respect to such request, (iv) any increase in the benefits of any existing Plan or the establishment of any new Plan or the commencement of contributions to any Plan to which any Credit Party or any member of the Controlled Group was not previously contributing shall occur, (v) any Credit Party or any member of the Controlled Group shall receive from the PBGC a notice of intention to terminate a Plan or to have a trustee appointed to administer a Plan, together with copies of each such notice, (vi) any Credit Party or any member of the Controlled Group shall receive an unfavorable determination letter from the Internal Revenue Service regarding the qualification of a Plan under Section 401(a) of the Code, together with copies of each such letter; (vii) any Credit Party or any member of the Controlled Group shall receive a notice regarding the imposition of withdrawal liability, together with copies of each such notice; (viii) any Credit Party or any member of the Controlled Group shall fail to make a required installment or any other required payment under Section 412 of the Code on or before the due date for such installment or payment; (ix) any Credit Party or any member of the Controlled Group knows that (a) a Multiemployer Plan has been terminated, (b) the administrator or plan sponsor of a Multiemployer Plan intends to terminate a Multiemployer Plan, or (c) the PBGC has instituted or will institute proceedings under Section 4042 of ERISA to terminate a Multiemployer Plan. Without limiting any of the foregoing, each Credit Party shall provide the Agent with copies of all of the final documentation related to any transactions whereby any Plan that is a deferred benefit plan is converted into a Plan that is a defined contribution plan at least ten (10) days prior to the effectiveness of such documents and/or the consummation of such transactions.

(o) Environmental Reports . Furnish Agent, concurrently with the delivery of the financial statements referred to in Sections 8.01(a), 8.01(b) and 8.01(c) with a certificate signed by an Authorized Officer of each Credit Party stating that, to the best of such Authorized Officer’s knowledge, each Credit Party and Subsidiary is in compliance in all material respects with all Environmental Laws. To the extent any Credit Party or Subsidiary is not in compliance with the foregoing laws, the certificate shall set forth with reasonable specificity all areas of non-compliance and the proposed action such Credit Party or Subsidiary will implement in order to achieve full compliance.

(p) Other Information . With reasonable promptness, each Credit Party shall deliver such other information and data with respect to such Credit Party or any of its Subsidiaries as from time to time may be reasonably required by the Agent or any Lender, including evidence that Borrower is in compliance with the Separateness Requirements and, without the necessity of any request by the Agent or any Lender, (a) copies of all environmental audits and reviews, (b) at least thirty (30) days prior thereto, notice of any Credit Party’s or such Subsidiary’s opening of any new office or place of business or any Credit Party’s or such Subsidiary’s closing of any existing office or place of business, and (c) promptly upon any Credit Party’s learning thereof, notice of any labor dispute to which any Credit Party or such Subsidiary may become a party, any strikes or walkouts relating to any of its plants or other facilities, and the expiration of any labor contract to which any Credit Party or such Subsidiary is a party or by which any Credit Party or such Subsidiary is bound. Promptly upon request therefor by the Agent or any Lender, the Credit Parties shall deliver such other business or financial data, reports, appraisals and projections as the Agent or such Lender may reasonably request.

(q) Additional Documents . Execute and deliver to Agent, upon request, such documents and agreements as Agent may, from time to time, reasonably request to carry out the purposes, terms or conditions of this Agreement or any other Transaction Document.

8.02 Preservation of Existence

. Each Credit Party shall, and shall cause each of its Subsidiaries to:

(a) conduct continuously and operate actively its business according to good business practices and maintain all of its properties useful or necessary in its business in good working order and condition (reasonable wear and tear excepted and except as may be disposed of in each case in accordance with the terms of this Agreement), including all licenses, patents, copyrights, design rights, tradenames, trade secrets and trademarks, in each case that are material to its business, and take all actions necessary to enforce and protect the validity of any intellectual property right;

(b) keep in full force and effect its existence and comply in all material respects with Applicable Laws governing the conduct of its business where the failure to do so could reasonably be expected to have a Material Adverse Effect; and

(c) except as otherwise permitted herein, make all such reports and pay all such franchise and other taxes and license fees and do all such other acts and things as may be lawfully required to maintain its rights, licenses, leases, powers and franchises under the laws of the United States or any political subdivision thereof.

8.03 Payment of Obligations

. Each Credit Party shall, and shall cause each of its Subsidiaries to, pay and discharge as the same shall become due and payable, all their respective obligations and liabilities, including:

(a) all Tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless same are being Properly Contested;

(b) all lawful claims which any Credit Party or any of its Subsidiaries is obligated to pay, which are due and which, if unpaid, might by law become a Lien upon its property, unless the same are being contested in good faith by appropriate proceedings diligently conducted which stay the enforcement of any Lien and for which adequate reserves in accordance with GAAP are being maintained by the Credit Parties and their Subsidiaries; and

(c) pay, discharge or otherwise satisfy at or before maturity (subject, where applicable, to specified grace periods and, in the case of the trade payables, to normal payment practices) all its obligations and liabilities of whatever nature, except when the failure to do so could not reasonably be expected to have a Material Adverse Effect or when the amount or validity thereof is currently being Properly Contested, or if a Credit Party, in its reasonable commercial judgment, determines to delay payments to certain vendors while it is having bona fide negotiations with such vendors.

8.04 Compliance with Laws

. Each Credit Party shall comply, and shall cause each of its Subsidiaries to comply, in all material respects with all Requirements of Law and with the directions of each Governmental Authority having jurisdiction over them or their respective business or property (including all applicable Environmental Laws), including any requirements to clean up, remove, or remediate Hazardous Materials at any location where necessary to protect human health or the environment.

8.05 Violations

. Each Credit Party shall promptly notify Agent in writing of any material violation of Applicable Law of any Governmental Authority, applicable to such Credit Party or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect.

8.06 Board Observer

. Each Credit Party shall give Lenders notice of (in the same manner as notice is given to directors), and permit three persons designated by Agent to attend as an observer, all meetings of its Board of Directors and all executive and other committee meetings of its Board of Directors and shall provide to Lenders the same information concerning the Credit Parties and their Subsidiaries, and access thereto, provided to members of the Credit Parties’ respective Board of Directors and such committees, as applicable. The reasonable travel expenses incurred by any such designees of Lenders in attending any board or committee meetings shall be reimbursed by the Credit Parties; provided , that the Credit Parties will not be required to permit a person designated by Lenders to attend, as an observer, any committee meeting of its Board of Directors or provide information to Lenders as provided to such committees, unless the Lender has executed a confidentiality agreement satisfactory to Lender in its reasonable determination, or in the event the Board of Directors of the Credit Parties reasonably determines that a conflict of interest may exist between Agent and the Credit Parties.

8.07 Inspection

. Each Credit Party will permit, and will cause each of its Subsidiaries to permit, representatives of the Agent to visit and inspect any of their respective properties, to examine their respective corporate, financial and operating records and make copies thereof or abstracts therefrom, and to discuss their respective affairs, finances and accounts with their respective directors, officers and independent public accountants, all at such reasonable times during normal business hours and as often as may be reasonably requested, upon reasonable advance notice; provided , however , that no such inspection, examination or inquiry, the failure to conduct same, nor any knowledge of the Agent, including any knowledge obtained by the Agent in connection with any such inspection, investigation or inquiry, shall constitute a waiver of any rights the Agent and Lenders may have under any representation, warranty, covenant, term or agreement under any of the Transaction Documents.

8.08 Maintenance of Properties

. Each Credit Party shall maintain or cause to be maintained, and shall cause its Subsidiaries to maintain or cause to be maintained, in good repair, working order and condition all material properties used in their respective businesses and will make or cause to be made, and shall cause its Subsidiaries to make or cause to be made, all appropriate repairs, renewals and replacements thereof.

8.09 Insurance

. Each Credit Party and its Subsidiaries will maintain or cause to be maintained with financially sound and reputable insurers that have a rating of “A” or better as established by Best’s Rating Guide (or an equivalent rating with such other publication of a similar nature as shall be in current use), the life insurance policies required by Section 8.17 and public liability and property damage insurance with respect to their respective businesses and properties against loss or damage of the kinds customarily carried or maintained by a company of established reputation engaged in similar businesses and in amounts acceptable to Agent and will deliver evidence thereof to Agent. Without limiting the foregoing, each Credit Party and its Subsidiaries will have established on the Initial Closing Date and maintain at all times thereafter (a) business interruption insurance in an amount satisfactory to the Agent and (b) products liability insurance coverage for the Credit Parties in amounts satisfactory to the Agent. All such insurance policies shall provide that Agent shall be named as an additional insured or loss payee, as applicable and that such insurance policies may not be canceled unless the insurance carrier gives at least 30 days prior written notice of such cancellation to Agent. If any Credit Party fails to obtain insurance as hereinabove provided, or to keep the same in force, Agent, if Agent so elects, upon notice to such Credit Party, may obtain such insurance and pay the premium therefor on behalf of such Credit Party, and such expenses so paid shall be part of the Obligations.

8.10 Books and Records

. Each Credit Party shall keep, and shall cause each of its Subsidiaries to keep, proper books of record and account, in which full and correct entries shall be made of all financial transactions and the assets and business of such Credit Party and each of its Subsidiaries in accordance with GAAP consistently applied to the Credit Parties and their Subsidiaries taken as a whole.

8.11 Use of Proceeds.

(a) The Credit Parties shall use the proceeds of the sale of the Original Notes and the Original Warrants hereunder only as follows: (i) the partial payment of the purchase price under the Original Acquisition Agreements, (ii) for the payment of fees and expenses in connection with the transactions contemplated hereunder and in the other Transaction Documents, and (iii) for general corporate purposes.

(b) The Credit Parties shall use the proceeds of the sale of the Series D Notes and the New Warrants hereunder only as follows: (i) the partial payment of the purchase price under the BVX Acquisition Agreement, (ii) for the payment of fees and expenses in connection with the transactions contemplated hereunder and in the other Transaction Documents, and (iii) for general corporate purposes.

(c) No proceeds of the Notes will be used to purchase or carry any Margin Stock or to extend credit for the purpose of purchasing or carrying any Margin Stock. Neither the sale of any Securities nor the use of the proceeds thereof will violate or be inconsistent with the provisions of Regulation T, U, or X of the Board of Governors of the Federal Reserve System.

8.12 Standards of Financial Statements

. The Credit Parties shall cause all financial statements referred to in Sections 8.01(a), (b), (c) and (h), as to which GAAP is applicable to be complete and correct in all material respects (subject, in the case of interim financial statements, to normal year-end audit adjustments and the absence of footnotes) and to be prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein (except as concurred in by such reporting accountants or officer, as the case may be, and disclosed therein).

8.13 Reservation of Common Stock

. Parent shall at all times reserve and keep available out of its authorized Equity Interests, solely for the purpose of issuance and delivery upon exercise of the Warrants, the number of shares of Common Stock issuable in accordance with the terms of the Warrants and such shares of Common Stock, when issued or delivered in accordance with the Warrants, shall be duly and validly issued and fully paid and non-assessable. Parent shall issue such shares of Common Stock in accordance with the provisions of the Warrants, and shall otherwise comply, in each case, with the terms thereof.

8.14 New Real Property

. If any Credit Party acquires at any time or times hereafter any fee simple interest in real property, then within ninety (90) days of the acquisition thereof such Credit Party shall execute and deliver to Agent, as additional security and Collateral for the obligations, deeds of trust, security deeds, mortgages or other collateral assignments reasonably satisfactory in form and substance to Agent and its counsel (herein collectively referred to as “ New Mortgages ”) covering such real property. The New Mortgages shall be duly recorded (at the Credit Parties’ expense) in each office where such recording is required to constitute a valid lien on the real property covered thereby. In respect of any New Mortgage, Credit Parties shall deliver to Agent, at Credit Parties’ expense, mortgagee title insurance policies issued by a title insurance company reasonably satisfactory to Agent, which policies shall be in form and substance reasonably satisfactory to Agent and shall insure a valid lien in favor of Agent on the property covered thereby, subject only to Permitted Liens and those other exceptions reasonably acceptable to Agent and its counsel. Credit Parties shall also deliver to Agent such other usual and customary documents, including ALTA surveys of the real property described in the New Mortgages, as Agent and its counsel may reasonably request relating to the real property subject to the New Mortgages.

8.15 Control Agreements; Cash Management Systems.

(a) Each Credit Party other than BVX shall, within 30 days following the Initial Closing Date, and BVX shall, within 30 days following the Closing Date, (in each case, with respect to its and its Subsidiaries’ existing accounts), enter into, or concurrently with the opening of any new account after the Closing Date, as applicable, enter into, and cause each depository, securities intermediary or commodities intermediary to enter into, Control Agreements with respect to each deposit, securities, commodity or similar account maintained by such Person as of or after the Closing Date; provided , however that the foregoing shall not apply to (i) any payroll account so long as such payroll account is a zero balance account, or (ii) withholding Tax, employee benefits and similar fiduciary accounts. After the occurrence and during the continuation of an Event of Default, the Agent shall be entitled to deliver a notice to any financial institution that is party to a Control Agreement of its exercise of control over any deposit, securities, commodity or other account subject to such Control Agreement.

(b) Each Credit Party shall provide the Lenders with electronic access at all times to each of its and its Subsidiaries’ depositary, securities intermediary or commodities intermediary accounts so that the Lenders may monitor the activity in such accounts.

8.16 Collateral Access Agreements

. The Credit Parties have obtained Collateral Access Agreements from the lessors of the leased premises at 155 Willowbrook Boulevard, Wayne, New Jersey 07470 and 3565 Piedmont Road, Suite 600, Fulton County, Georgia. Within 30 days following the Closing Date, the Credit Parties shall obtain Collateral Access Agreements from the lessors of the leased premises at 1475 W. Cypress Creek Road, Fort Lauderdale, Florida 33309. Each Credit Party shall, with respect to each lease entered into following the Closing Date for leased property where Collateral is stored or located, obtain a Collateral Access Agreement from the lessor of such leased property in connection with entering into such lease.

8.17 Key-Man Life Insurance

. The Credit Parties shall maintain a $5,000,000 key-man life insurance policy with respect to the life of Jonathan Kaufman and a $3,000,000 key-man life insurance policy with respect to the life of Matthew Rosen.

8.18 NBS Consents and Notices.

The Credit Parties shall use their best efforts to obtain the Consents and provide the notices described in Sections 4.10 and 13.08 as soon as possible, and in any event within 150 days following the Closing Date. The Credit Parties acknowledge and agree that the breach of their covenants set forth in this Section 8.18 may cause substantial injury to the Agent and Lenders. In the event of a breach or a threatened breach by any Credit Party of the provisions of this Section 8.18 , Agent and Lenders may, but shall not be obligated to, seek such Consents and provide such notices, in the name of Credit Parties or otherwise, at the cost and expense of the Credit Parties, and the Credit Parties will cooperate with Agent and Lenders in all actions taken by them to obtain such Consents and to provide such notices, and will execute all documents required by Agent or Lenders in furtherance thereof.

8.19 Post-Closing Covenants.

Borrower shall, within 14 days following the Closing Date, provide Agent with certificates of insurance, with respect to the property insurance policies listed on Schedule 5.28, naming Agent as a loss payee and providing that such insurance policies may not be canceled unless the insurance carrier gives at least 30 days prior written notice of such cancellation to Agent.

ARTICLE 9

NEGATIVE COVENANTS

9.01 Fundamental Changes; Consolidations, Mergers and Acquisitions; Asset Sales

. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly: (a) enter into any merger, consolidation or other reorganization with or into any other Person or acquire all or a substantial portion of the assets or Equity Interests of any Person or permit any other Person to consolidate with or merge with it, or (b) sell, lease, transfer or otherwise dispose of any of its properties or assets, except dispositions of inventory in the Ordinary Course of Business.

9.02 Creation of Liens

. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, create or suffer to exist any Lien or transfer upon or against any of its property or assets now owned or hereafter acquired, except Permitted Liens, including Liens disclosed on Schedule 9.02 .

9.03 Guarantees

. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly become liable upon the obligations or liabilities of any Person by assumption, endorsement or guaranty thereof or otherwise (other than to Lenders) except (a) guarantees made in the Ordinary Course of Business up to an aggregate amount of $300,000, and (b) the endorsement of checks in the Ordinary Course of Business.

9.04 Investments

. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly make any Investments, except:

(a) investments in Cash and Cash Equivalents;

(b) investments existing on the Closing Date as set forth on Schedule 9.04 hereto;

(c) investments in wholly-owned Subsidiaries of such Credit Party created or acquired after the Closing Date, to the extent permitted hereunder;

(d) loans permitted by Section 9.05;

(e) investments by the Credit Parties and their respective Subsidiaries in Capital Expenditures permitted to be made pursuant to Section 9.15(c).

9.05 Loans

. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly make or have outstanding advances, loans or extensions of credit to any Person, including any Subsidiary or Affiliate, except for (a) the extension of commercial trade credit in connection with the sale of inventory in the Ordinary Course of Business and (b) loans to employees of the Credit Parties in the Ordinary Course of Business not to exceed, in the aggregate, $25,000 at any time outstanding.

9.06 Restricted Payments

. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly declare, pay or make any Restricted Payments.

9.07 Indebtedness

. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly create, incur, assume or suffer to exist any Indebtedness except:

(a) trade debt incurred in the Ordinary Course of Business;

(b) the Indebtedness created under this Agreement;

(c) Indebtedness for Capital Expenditures permitted under Section 9.15(c), including Purchase Money Indebtedness and indebtedness incurred under Capital Lease Obligations, in each case incurred in connection with such Capital Expenditures, in an aggregate amount not to exceed $500,000 per year for all Credit Parties and their respective Subsidiaries;

(d) Indebtedness disclosed on Schedule 9.07 and any extension, renewal or refinancing thereof; provided that in connection with any such extension, renewal or refinancing: (i) the aggregate principal amount of such Indebtedness is not increased, (ii) the scheduled maturity date of such Indebtedness is not shortened, (iii) the covenants or defaults are not materially more restrictive or more onerous than analogous provisions in the documentation of such Indebtedness as in effect on the Closing Date;

(e) Indebtedness under any Interest Rate Hedge or any Other Hedging Agreement reasonably acceptable to Agent;

(f) guaranty obligations permitted pursuant to Section 9.03 hereof; and

(g) Indebtedness owing or that may become owing to Prestige Capital Corporation or a replacement institutional lender (the “ Working Capital Lender ”), with respect to a working capital revolving line of credit provided to Parent (the “Working Capital Agreement” ) not to exceed $3,000,000 at any one time outstanding (the “ Working Capital Debt ”) and secured by Liens (“ Working Capital Liens ”) granted by Parent in favor of the Working Capital Lender which are first priority security interests on accounts receivable and other assets of Parent (excluding in any event, any Lien on any Equity Interests of Borrower owned by Parent or of NBS owned by Borrower).

9.08 Nature of Business

. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, substantially change the nature of the business in which it is presently engaged, or except as specifically permitted hereby purchase or invest, directly or indirectly, in any assets or property other than in the Ordinary Course of Business and where such assets or property are useful in, necessary for and are to be used in its business as presently conducted.

9.09 Transactions with Affiliates

. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, purchase, acquire or lease any property from, or sell, transfer or lease any property to, or otherwise enter into any transaction or deal with, any Affiliate, except for (i) transactions in the Ordinary Course of Business, entered into on an arm’s-length basis on fair and reasonable terms no less favorable than terms which would have been obtainable from a Person other than an Affiliate; (ii) the payment of customary and reasonable directors’ fees to directors who are not employees of the Credit Parties or any Affiliate of the Credit Parties as well as the payment of their reasonable out-of-pocket expenses incurred in performing their directorial duties and the payment of indemnities owing to them as directors; or (iii) certain loans by Affiliates to Parent as indicated in Schedule 9.07 .

9.10 Leases

. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly enter as lessee into any lease arrangement for real or personal property (unless capitalized and permitted under Section 9.15(c) hereof) if after giving effect thereto, aggregate annual rental payments for all leased property, whether real or personal, would exceed $250,000 in any one fiscal year in the aggregate for all Credit Parties and their respective Subsidiaries, other than renewals of existing leases and replacement leases on terms consistent with the lease it is replacing.

9.11 Subsidiaries; Partnerships; Joint Ventures

. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, form any Subsidiary (other than a Subsidiary, the formation of which shall have been consented to in advance in writing by the Required Lenders), or enter into any partnership, joint venture or similar arrangement unless consented to by Required Lenders.

9.12 Fiscal Year and Accounting Changes

. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly maintain a fiscal year other than a year ending on December 31, or make any change (i) in accounting treatment and reporting practices except as required by GAAP or (ii) in Tax reporting treatment except as required by Applicable Law.

9.13 Amendment of Organizational Documents

. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, amend, modify or waive any material term or material provision of its Organizational Documents unless required by Applicable Law.

9.14 Limitation on Modifications of Indebtedness; Modifications of Certain Other Agreements; Etc.

No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, (i) amend or modify, or permit the amendment or modification of, any provision of the Indebtedness described in Section 9.07 hereto or of any agreement (including any purchase agreement, indenture, loan agreement or security agreement) relating thereto other than any amendments or modifications to such Indebtedness which do not in any way adversely affect the interests of the Lenders and are otherwise permitted under Section 9.07, (ii) make (or give any notice in respect thereof) any voluntary or optional payment or prepayment on or redemption or acquisition for value of, or any prepayment or redemption as a result of any asset sale, change of control or similar event of, any Indebtedness which is contractually subordinated to the Notes, (iii) amend or modify, or permit the amendment or modification of, any provision of (A) the Working Capital Agreement except as permitted by the Working Capital Intercreditor Agreement, (B) Seller Notes, except as permitted by the Seller Subordination Agreement, or (C) the Rosen Notes, except as permitted by the Rosen Subordination Agreement, respectively, or (iv) amend or modify, or permit the amendment or modification of any Equity Document, except for amendments or modifications which are not in any way adverse in any material respect to the interests of the Lenders.

9.15 Financial Covenants.

(a) Borrower Leverage Ratio . The Borrower shall maintain, and shall cause its Subsidiaries to maintain, a Leverage Ratio, as of and for each period of four consecutive fiscal quarters set forth below, of not greater than the ratio for such period set forth below:

Four Quarters Ending	Leverage Ratio
March 31, 2014 through September 30, 2014 December 31, 2014 March 31, 2015 through December 31, 2015 March 31, 2016 through December 31, 2016 March 31, 2017 through December 31, 2017 March 31, 2018 and thereafter	4.15 to 1.00 4.00 to 1.00 3.75 to 1.00 3.50 to 1.00 3.25 to 1.00 3.00 to 1.00

(b) Borrower Fixed Charge Coverage . The Borrower shall maintain, and shall cause each of its Subsidiaries to maintain, a Fixed Charge Coverage Ratio, as of and for each period of four consecutive fiscal quarters set forth below, of not less than the ratio for the period set forth below:

Four Quarters Ending	Fixed Charge Coverage Ratio
March 31, 2014 through December 31, 2014 March 31, 2015 and thereafter	1.40 to 1.00 1.50 to 1.00

(c) Borrower Capital Expenditures . The Borrower shall not, and shall cause its Subsidiaries not to, contract for, purchase or make any expenditure or commitments for Capital Expenditures in (i) any fiscal year ending on or prior to December 31, 2015 in an aggregate amount in excess of $3,250,000 or in any fiscal year ending after December 31, 2015 in an aggregate amount in excess of $2,500,000.

(d) Borrower Minimum EBITDA . The Borrower shall not permit its EBITDA, measured as of the last day of (i) the three (3)-month period ending on March 31, 2014, to be less than $2,500,000, (ii) the six (6)-month period ending on June 30, 2014, to be less than $5,000,000, (iii) the nine (9)-month period ending on September 30, 2014, to be less than $7,500,000 or (iv) each period of four consecutive fiscal quarters set forth below, to be less than the amount for such period set forth below:

Four Quarters Ending		Minimum EBITDA
December 31, 2014 March 31, 2015 June 30, 2015 September 30, 2015 December 31, 2015 March 31, 2016 June 30, 2016 and thereafter		$	10,500,000 $10,750,000 $11,000,000 $11,250,000 $11,500,000 $11,750,000 $12,000,000

(e) Minimum Parent EBITDA . The Parent shall not permit Parent EBITDA, measured as of the last day of each period of four consecutive fiscal quarters beginning with the four consecutive fiscal quarters ending March 31, 2015, to be less than the amount of EBITDA for such period.

(f) Minimum Cash . The Parent, on a non-Consolidated Basis, shall at all times have at least $1,000,000 of Cash Equivalents in excess of the amount of Working Capital Loans then outstanding, which minimum cash shall be determined by including the Escrowed Funds to the extent held by Agent pursuant to Section 4.11.

(g) Compliance with the covenants in this Section 9.15 (other than Section 9.15(f)) shall be determined on a Consolidated Basis in accordance with GAAP consistently applied, unless explicitly stated otherwise.

9.16 Compliance with ERISA

. No Credit Party shall, nor shall any Credit Party permit any of its Subsidiaries, to (x) maintain, or permit any member of the Controlled Group to maintain, or (y) become obligated to contribute, or permit any member of the Controlled Group to become obligated to contribute, to any Plan, other than those Plans disclosed on Schedule 5.22 , (ii) engage, or permit any member of the Controlled Group to engage, in any non-exempt “prohibited transaction”, as that term is defined in section 406 of ERISA and Section 4975 of the Code; (iii) incur, or permit any member of the Controlled Group to incur, any “accumulated funding deficiency”, as that term is defined in Section 302 of ERISA or Section 412 of the Code, (iv) terminate, or permit any member of the Controlled Group to terminate, any Plan where such event could result in any liability of any Credit Party or any member of the Controlled Group or the imposition of a lien on the property of any Credit Party or any member of the Controlled Group pursuant to Section 4068 of ERISA, (v) assume, or permit any member of the Controlled Group to assume, any obligation to contribute to any Multiemployer Plan not disclosed on Schedule 5.22 , (vi) incur, or permit any member of the Controlled Group to incur, any withdrawal liability to any Multiemployer Plan; (vii) fail promptly to notify Lenders of the occurrence of any Termination Event, (viii) fail to comply, or permit a member of the Controlled Group to fail to comply, with the requirements of ERISA or the Code or other Applicable Laws in respect of any Plan , (ix) fail to meet, or permit any member of the Controlled Group to fail to meet, all minimum funding requirements under ERISA or the Code or postpone or delay or allow any member of the Controlled Group to postpone or delay any funding requirement with respect of any Plan.

9.17 Prepayment of Indebtedness

. No Credit Party shall, nor shall any Credit Party permit any of its Subsidiaries to, at any time, directly or indirectly, prepay any Indebtedness (other than to Lenders), or repurchase, redeem, retire or otherwise acquire any Indebtedness (other than to Lenders).

9.18 Anti-Terrorism Laws

. No Credit Party shall, nor shall any Credit Party permit any Affiliate or agent to: (a) conduct any business or engage in any transaction or dealing with any Blocked Person, including the making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, (b) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order No. 13224 and (c) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in the Executive Order No. 13224, the USA Patriot Act or any other Anti-Terrorism Law. Each Credit Party shall deliver to Agent any certification or other evidence reasonably requested from time to time by Agent, in its sole discretion, confirming such Credit Party’s compliance with this Section.

9.19 Trading with the Enemy Act

. No Credit Party shall nor shall any Credit Party permit any of its Subsidiaries to engage in any business or activity in violation of the Trading with the Enemy Act.

9.20 Additional Negative Pledges

. No Credit Party shall, nor shall any Credit Party permit any of its Subsidiaries, to create or otherwise cause or suffer to exist or become effective, directly or indirectly, (i) any prohibition or restriction (including any agreement to provide equal and ratable security to any other Person) on the creation or existence of any Lien upon the assets of any Credit Party or any of its Subsidiaries, other than Permitted Liens or (ii) any contractual obligation which may restrict or inhibit Agent’s rights or ability to sell or otherwise dispose of the Collateral or any part thereof after the occurrence of an Event of Default.

ARTICLE 10

PRINCIPAL PAYMENTS

10.01 Optional Prepayment

. The Borrower may prepay the outstanding Principal Amount (together with accrued Interest) on the Notes as follows:

(a) The Borrower may, at their option, at any time upon notice given to Agent as provided in Section 10.01(b), unless otherwise agreed to by the Required Lenders, prepay all or any portion of the Principal Amount of any of the Notes, by payment to the Lenders, of an amount equal to the redemption prices (the “ Optional Redemption Prices ”) set forth below (expressed as a percentage of the outstanding Principal Amount being prepaid, from time to time) together with Interest accrued and unpaid on the Principal Amount of the Notes so prepaid through the date fixed for such prepayment, and reasonable out-of-pocket costs and expenses (including reasonable fees, charges and disbursements of counsel), if any, associated with such prepayment; provided, however, that each payment of less than the full outstanding balance of the Principal Amount of the Notes shall be in an aggregate amount of not less than $250,000 or integral multiples of $100,000 in excess thereof. If such prepayment is to be made by the Credit Parties to the Lenders during any Loan Year set forth below, the Optional Redemption Price shall be determined based upon the percentage indicated below for such Loan Year multiplied by the Principal Amount which is being prepaid:

Loan Year		Optional Redemption Price
	1	102.85	%
	2	102	%
Thereafter		100	%

(b) The Borrower shall give written notice of prepayment of the Notes pursuant to this Section 10.01 not less than 10 nor more than 60 days prior to the date fixed for such prepayment. Such notice of prepayment pursuant to this Section 10.01 shall be given in the manner specified in Section 12.02 of this Agreement. Upon notice of prepayment pursuant to this Section 10.01 being given by the Borrower, the Borrower covenant and agree that they will prepay, on the date therein fixed for prepayment, the Notes or the portion thereof so called for prepayment, at the applicable Optional Redemption Price set forth above with respect to the Principal Amount or the portion thereof so called for prepayment, together with Interest accrued and unpaid thereon to the date fixed for such prepayment, and the costs and expenses referred to in Section 10.01(a).

(c) Any optional prepayment under this Section 10.01 shall include payment of accrued Interest on the Principal Amount of the Notes so prepaid and shall be applied first to all costs, expenses and indemnities payable under this Agreement, then to payment of default interest, if any, then to accrued but unpaid Interest, if any, and thereafter to the Principal Amount.

10.02 Mandatory Prepayments.

(a) Liquidity Event . Upon the occurrence of a Liquidity Event (as hereinafter defined), the Borrower shall, prepay the outstanding Principal Amount of all Notes in accordance with the redemption prices (the “ Mandatory Redemption Prices ”) set forth below (expressed as a percentage of the outstanding Principal Amount being prepaid), together with Interest accrued and unpaid on the outstanding Principal Amount of the Notes so prepaid through the date of such prepayment and reasonable out-of-pocket costs and expenses (including reasonable fees, charges and disbursements of counsel), if any, associated with such prepayment. If a Liquidity Event shall occur during any Loan Year set forth below, the Mandatory Redemption Price shall be determined based upon the percentage indicated below for such Loan Year multiplied by the Principal Amount which is being prepaid. For the purposes hereof, “ Liquidity Event ” means (i) the occurrence of a Change of Control, or (ii) the liquidation, dissolution or winding up of Parent or Borrower or of one or more of Parent’s Subsidiaries that, individually or in the aggregate, constitute a material part of the business, operations or assets of the Credit Parties and all of their respective Subsidiaries, taken as a whole.

Loan Year		Mandatory Redemption Price
	1		102.85	%
	2		102	%
Thereafter			100	%

(b) Notice . The Borrower shall give written notice to the Agent of any mandatory prepayment pursuant to Section 10.02(a) at least five (5) Business Days prior to the date of such prepayment. Such notice shall be given in the manner specified in Section 12.02 of this Agreement.

10.03 Scheduled Payments

. The Principal Amount of the Series A Notes shall be paid in installments of (i) $52,083.33 each, together with accrued and unpaid Interest, on each Interest Payment Date beginning on the September 30, 2013 Interest Payment Date through and including the December 31, 2013 Interest Payment Date, (ii) $20,926.80 each, together with accrued and unpaid Interest, on each Interest Payment Date beginning on the January 31, 2014 Interest Payment Date through and including the December 31, 2014 Interest Payment Date, and (iii) $41,016.53 each, together with accrued and unpaid Interest, on each Interest Payment Date following the December 31, 2014 Interest Payment Date. The remaining balance of the Principal Amount of the Series A Notes shall be paid in full, together with accrued and unpaid Interest, on the Maturity Date. The Principal Amount of the Series B Notes and the Principal Amount of the Series C Notes shall be paid in full, together with accrued and unpaid Interest, on the Maturity Date. The Principal Amount of the Series D Notes shall be paid in installments of (i) $31,156.53 each, together with accrued and unpaid Interest, on each Interest Payment Date beginning on the January 31, 2014 Interest Payment Date through and including the December 31, 2014 Interest Payment Date, and (ii) $61,066.80 each, together with accrued and unpaid Interest, on each Interest Payment Date following the December 31, 2014 Interest Payment Date. The remaining balance of the Principal Amount of the Series D Notes shall be paid in full, together with accrued and unpaid Interest, on the Maturity Date.

10.04 Application of Payments.

(a) Upon any payment or prepayment of Series A Notes pursuant to any provision of this Agreement, the Principal Amount so paid or prepaid shall be allocated to all Series A Notes at the time outstanding pro rata (based upon the proportion of the respective outstanding Principal Amount of the Series A Notes) until such Series A Notes have been paid in full.

(b) Upon any payment or prepayment of Series B Notes pursuant to any provision of this Agreement, the Principal Amount so paid or prepaid shall be allocated to all Series B Notes at the time outstanding pro rata (based upon the proportion of the respective outstanding Principal Amount of the Series B Notes) until such Series B Notes have been paid in full.

(c) Upon any payment or prepayment of Series C Notes pursuant to any provision of this Agreement, the Principal Amount so paid or prepaid shall be allocated to all Series C Notes at the time outstanding pro rata (based upon the proportion of the respective outstanding Principal Amount of the Series C Notes) until such Series C Notes have been paid in full.

(d) Upon any payment or prepayment of Series D Notes pursuant to any provision of this Agreement, the Principal Amount so paid or prepaid shall be allocated to all Series D Notes at the time outstanding pro rata (based upon the proportion of the respective outstanding Principal Amount of the Series D Notes) until such Series D Notes have been paid in full.

(e) Payments of the Principal Amount of each Note to each Lender shall be made to the same account and in the same manner as provided in Section 2.06(a).

ARTICLE 11

EVENTS OF DEFAULT; REMEDIES

11.01 Events of Default

. An “ Event of Default ” shall occur if:

(a) any Credit Party shall default in the payment of the Principal Amount of the Notes, when and as the same shall become due and payable, whether at maturity or at a date fixed for payment or prepayment or by acceleration or otherwise; or

(b) any Credit Party shall default in the payment of any installment of Interest or any other amount due under this Agreement or the Notes (other than as set forth in clause (a) of this Section 11.01) according to its terms, when and as the same shall become due and payable and such default shall continue for a period of three days after the due date for the payment thereof; or

(c) any Credit Party or any of its Subsidiaries shall default in the due observance or performance of any covenant to be observed or performed pursuant to Sections 8.01, 8.02, 8.03, 8.08, 8.15, 8.16, 8.17, 8.18 or Articles 9 or 16 of this Agreement; or

(d) any Credit Party or any of its Subsidiaries shall default in the due observance or performance of any other covenant, condition or agreement on the part of such Credit Party or such Subsidiary to be observed or performed pursuant to the terms hereof or any of the Transaction Documents (other than those referred to in clauses (a), (b) or (c) of this Section 11.01), and such default shall continue for fifteen (15) days after the earliest of (A) if any Credit Party has knowledge of such default, the date such Credit Party is required pursuant to the Transaction Documents or otherwise to give notice thereof to the Agent or Lenders (whether or not such notice is actually given) or (B) the date of written notice thereof, specifying such default, shall have been given to the Credit Parties by Agent or any Lender; or

(e) any representation, warranty or certification made by or on behalf of any Credit Party or any of its Subsidiaries in this Agreement, the Notes, the Transaction Documents or in any certificate or other document delivered pursuant hereto or thereto shall have been incorrect in any material respect (without duplication of any materiality qualification therein) when made; or

(f) any event or condition shall occur that results in the acceleration of the maturity of any Indebtedness of any Credit Party or any of its Subsidiaries in an amount in excess of $150,000 for any Credit Party or its Subsidiaries or $250,000 for all Credit Parties and their respective Subsidiaries, or any default shall occur by any Credit Party under the Working Capital Agreement which the Credit Parties fail to cure within any applicable cure period; or

(g) any uninsured damage to or loss, theft or destruction of any assets of any Credit Party or any of its Subsidiaries shall occur that is in excess of $250,000 in the aggregate for all Credit Parties and Subsidiaries; or

(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (A) relief in respect of any Credit Party or any of its Subsidiaries, or of a substantial part of any of their respective property or assets, under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal or state bankruptcy, insolvency, receivership or similar law, (B) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Credit Party or any of its Subsidiaries, or for a substantial part of any of their respective property or assets, or (C) the winding up or liquidation of any Credit Party or any of its Subsidiaries; and such proceeding or petition shall continue undismissed for sixty (60) days, or an order or decree approving or ordering any of the foregoing shall be entered; or

(i) any Credit Party or any of its Subsidiaries shall (A) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal or state bankruptcy, insolvency, receivership or similar Applicable Law, (B) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or the filing of any petition described in paragraph (h) of this Section 11.01, (C) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official, for a substantial part of its property or assets, (D) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (E) make a general assignment for the benefit of creditors, (F) become unable, admit in writing its inability or fail generally to pay its debts as they become due, or (G) take any action for the purpose of effecting any of the foregoing; or

(j) one or more judgments for the payment of money in an aggregate amount in excess of $150,000 shall be rendered against any Credit Party or any of its Subsidiaries or in excess of $250,000 for all Credit Parties and their respective Subsidiaries (in either case, except to the extent covered by insurance as to which the insurance company has acknowledged coverage) and the same shall remain undischarged for a period of thirty (30) days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to levy upon assets or properties of any Credit Party or any of its Subsidiaries to enforce any such judgment; or

(k) any Credit Party or any of its Subsidiaries shall commence legal action challenging the validity and binding effect of any provision of any of the Transaction Documents or any of the Transaction Documents shall for any reason (except to the extent permitted by its express terms) cease to be effective or, if in the case of the Transaction Documents intended to provide a Lien in favor of the Agent or any Lender, fail to create a valid and perfected first priority Lien (except for Permitted Liens that by operation of law would take priority) on, or security interest in, any of the Collateral purported to be covered; or

(l) unless otherwise waived or consented to by the Required Lenders in writing, the subordination provisions relating to any Indebtedness subordinated to the Indebtedness pursuant to the Notes and the Agreement (collectively, the “ Subordination Provisions ”) shall fail to be enforceable by the Agent and the Lenders in accordance with the terms thereof, or the monetary obligations pursuant to the Notes and this Agreement shall fail to constitute “Senior Debt” (or similar term) referring to such obligations; or any Credit Party shall, directly or indirectly, disavow or contest in any manner (i) the effectiveness, validity or enforceability of any of the Subordination Provisions, (ii) that the Subordination Provisions exist for the benefit of the Agent and the Lenders or (iii) that all payments of principal of or premium and interest on the such subordinated Indebtedness, or realized from the liquidation of any property of any Credit Party or Subsidiary, shall be subject to any of such Subordination Provisions; or

(m) the failure of the security interest in any of the Collateral described in Section 4.10 to become effective in accordance with Section 4.10 or the failure of the Guarantee provided by NBS pursuant to Article XIII to become effective in accordance with Section 13.08 , in each case within 150 days following the Closing Date; or

(n) the occurrence of any event or condition that could reasonably be expected to have a Material Adverse Effect.

11.02 Acceleration and Remedies

. If an Event of Default occurs under Section 11.01(h) or (i), then the outstanding Principal Amount of and all accrued Interest on the Notes shall automatically become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived. If any other Event of Default occurs and is continuing, Agent may, and at the request of the Required Lenders shall, by written notice to the Credit Parties, declare the Principal Amount of and accrued Interest on the Notes to be immediately due and payable. Upon any such declaration, such Principal Amount and Interest shall become immediately due and payable. The Required Lenders may rescind an acceleration and its consequences if all existing Events of Default have been cured or waived, except nonpayment of principal or Interest that has become due solely because of the acceleration, and if the rescission would not conflict with any judgment or decree. Any notice or rescission shall be given in the manner specified in Section 12.02 hereof. Upon the occurrence of an Event of Default, Agent shall have the right to exercise any and all rights and remedies provided for herein, under any of the other Transaction Documents, under the UCC and at law or equity generally, including the right to foreclose the security interests granted and to realize upon any Collateral by any available judicial procedure and/or to take possession of and sell any or all of the Collateral with or without judicial process.

11.03 Application of Proceeds

. Notwithstanding any other provisions of this Agreement to the contrary, after the occurrence and during the continuance of an Event of Default, all amounts collected or received by the Agent on account of the Notes or any other amounts outstanding under any of the Transaction Documents or in respect of the Collateral may, at Agent’s discretion, or shall, at the direction of the Required Lenders, be paid over or delivered as follows:

(a) FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) of the Agent in connection with enforcing its rights and the rights of the Lenders under this Agreement and the other Transaction Documents;

(b) SECOND, to the payment of any fees owed to the Agent;

(c) THIRD, to the payment of all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) of each of the Lenders to the extent owing to such Lender pursuant to the terms of this Agreement or the other Transaction Documents;

(d) FOURTH, to the payment of all accrued fees and Interest which has not been included in the Principal Amount, in respect of the Notes, this Agreement or the other Transaction Documents;

(e) FIFTH, to the payment of the Principal Amount of the Notes, pro rata, until paid in full;

(f) SIXTH, to all other obligations which shall have become due and payable under the Transaction Documents or otherwise and not repaid pursuant to clauses “FIRST” through “FIFTH” above; and

(g) SEVENTH, the balance, if any, to whoever may be lawfully entitled to receive such surplus.

In carrying out the foregoing, (i) amounts received shall be applied in the numerical order provided until exhausted prior to application to the next succeeding category; and (ii) each of the Lenders shall receive an amount equal to its pro rata share (based on the proportion of the Principal Amount of the Notes held by such Lender bears to the aggregate then outstanding Principal Amount of the Notes) of amounts available to be applied pursuant to clauses “FOURTH”, “FIFTH” and “SIXTH” above.

ARTICLE 12

MISCELLANEOUS

12.01 Survival of Representations and Warranties

. All of the representations and warranties made herein shall survive the execution and delivery of this Agreement, any investigation by or on behalf of the Agent or any Lender, acceptance of the Securities and payment therefor, or termination of this Agreement.

12.02 Notices

. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first class mail, return receipt requested, facsimile (with receipt confirmed), electronic transmission ( i.e. , e-mail), courier service or personal delivery:

if to Agent or Fund III or Fund III-A:

c/o Praesidian Capital Opportunity Fund III, LP

419 Park Avenue South

New York, NY 10016

Facsimile: 212-520-2601

Attention: Jason D. Drattell

Email: jdrattell@praesidian.com

with a copy to:

Morrison Cohen LLP

909 Third Avenue

New York, NY 10022

Facsimile: (917) 522-3168

Attention: Stephen I. Budow, Esq.

Email: sbudow@morrisoncohen.com

If to Plexus, Plexus III or Plexus QP III:

4601 Six Forks Road

Suite 528

Raleigh, NC 27609

Facsimile: (919) 256-6350

Attention: Michael S. Becker

Email: mbecker@plexuscap.com

with a copy to:

Smith, Anderson, Blount, Dorsett,

Mitchell & Jernigan, LLP

Wells Fargo Capital Center

150 Fayetteville Street, Suite 2300

Raleigh, NC 27601

Facsimile: (919) 821-6800

Attention: Curtis S. Brewer, Esq.

Email: cbrewer@smithlaw.com

If to United:

United Insurance Company of America

c/o Kemper Corporation

1 E. Wacker Dr.

Chicago, IL 60601

Facsimile: (312) 467-6210

Attention: Nathan Harnetiaux

Email: nharnetiaux@kemper.com

if to any Credit Party:

(Name of Credit Party)

c/o Fusion Telecommunications International, Inc.

420 Lexington Avenue, Suite 1718

New York, NY 10170

Facsimile: (212) 972-7884

Attention: Gordon Hutchins, Jr., President

Email: dhutchins@fusiontel.com

with a copy to:

Steven I. Weinberger, Esq.

1200 N. Federal Highway, Suite 200

Boca Raton, FL 33432

Facsimile: (888) 825-6417

Email: steve@southfloridacorporatelaw.com

All such notices and communications shall be deemed to be effective: (i) in the case of hand-delivery, when delivered; (ii) in the case of a facsimile transmission, when sent to the applicable party’s facsimile machine’s telephone number, if the party sending such notice or communication receives confirmation of the delivery thereof from its own facsimile machine; (iii) in the case of electronic transmission, when actually received; (iv) in the case of mail, five (5) Business Days after being deposited in the mail, postage prepaid; or (v) if given by any other means (including by overnight courier), when actually received.

12.03 Successors and Assigns.

(a) This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties hereto. Subject to applicable securities laws and, subject to the prior written consent of the Borrower (such consent of the Borrower not to be unreasonably withheld or delayed, and shall be deemed provided unless expressly withheld by the Borrower within three (3) Business Days of written request therefor), Agent and each Lender may assign any of its rights under any of the Transaction Documents (other than the Equity Documents) to any Person, and any holder of the Notes may assign, in whole or in part, the Notes to any Person; provided , however , that no such consent of the Borrower will be required (i) with respect to any assignment to another Lender or any Affiliate of any Lender, or (ii) during the continuation of any Event of Default. Subject to applicable securities laws and the terms of the Equity Documents, each Lender may assign any of its rights under any of the Equity Documents to any Person. No Credit Party may assign any of their respective rights, or delegate any of its obligations, under this Agreement or any of the other Transaction Documents without the prior written consent of the Lenders, and any such purported assignment by any Credit Party without the written consent of the Lenders shall be void and of no effect. Except as provided in Article 7, no Person other than the parties hereto and to the other Transaction Documents and their successors and permitted assigns is intended to be a beneficiary of any of such Transaction Documents.

(b) Notwithstanding any other provision of this Agreement or any Transaction Document to the contrary, Agent and any Lender may at any time create a security interest in all or any portion of its rights under this Agreement, the Notes or any other Transaction Document, and the Collateral.

(c) Notwithstanding anything in this Agreement or any Transaction Document to the contrary, there shall be no limitation or restriction on (A) the ability of any Lender or Agent to assign or otherwise transfer this Agreement, any Note, or any of the other Transaction Documents, or any rights thereunder, to any of its Affiliates or (B) (x) the ability of any Lender or Agent to pledge, or otherwise grant a security interest in, this Agreement, any Note, or any of the other Transaction Documents, or any of its rights thereunder, to any lender or other funding or financing source of such Lender or Agent or (y) the assignment or other transfer in connection with the realization of any such pledge or other security interest; provided, however, such Lender shall continue to be liable as a “Lender” under this Agreement and the other Transaction Documents unless any such Affiliate, lender or funding or financing source agrees to be bound by this Agreement and the other Transaction Documents.

12.04 Amendment and Waiver.

(a) No failure or delay on the part of any of the parties hereto in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for in this Agreement are cumulative and are not exclusive of any remedies that may be available to the parties hereto at law, in equity or otherwise.

(b) Any Modification of this Agreement, the Notes or any other Transaction Document other than the Warrants, shall be effective as to the Lenders (i) only if it is made or given in writing and signed by each Credit Party and the Required Lenders, except that, without the written consent of the holder or holders of all Notes at the time outstanding, no amendment to this Agreement or any other Transaction Document shall change the maturity of any Note, or change the principal of, or the rate, method of computation or time of payment of interest on or any fee payable with respect to, any Note, or affect the time, amount or allocation of any prepayments, or change the proportion of the principal amount of the Notes required with respect to any amendment, supplement or modification, and (ii) only in the specific instance and for the specific purpose for which made or given. No amendment, supplement or modification of or to any provision of this Agreement or any of the other Transaction Documents, or any waiver of any such provision or consent to any departure by any party from the terms of any such provision may be made orally. Except where notice is specifically required by this Agreement, no notice to or demand on any Credit Party in any case shall entitle such Credit Party to any other or further notice or demand in similar or other circumstances.

(c) Any Modification of the Warrants shall be effective as to all holders of Warrants (i) only if it is made or given in writing and signed by the Borrower which issued such Warrants and the Required Equity Holders, and (ii) only in the specific instance and for the specific purpose for which made or given; provided, however, that (i) no Modification may, without the written consent of the holder of each Warrant at the time outstanding affected thereby eliminate or diminish any material right or remedy of any holder of any Warrant or affect any holder of any Warrant, in each case, in a manner that differs materially and adversely from the effect on any other holder of any Warrant.

12.05 Signatures; Counterparts

. Facsimile or electronic transmissions of any executed original document and/or retransmission of any executed facsimile or electronic transmission shall be deemed to be the same as the delivery of an executed original. At the request of any party hereto, the other parties hereto shall confirm facsimile or electronic transmissions by executing duplicate original documents and delivering the same to the requesting party or parties. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

12.06 Headings

. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

12.07 GOVERNING LAW

. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED IN ACCORDANCE WITH, AND ENFORCED UNDER, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS OR INSTRUMENTS ENTERED INTO AND PERFORMED ENTIRELY WITHIN SUCH STATE.

12.08 JURISDICTION; JURY TRIAL WAIVER.

(a) EACH CREDIT PARTY HEREBY IRREVOCABLY AGREES THAT ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE SECURITIES OR ANY AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH CREDIT PARTY HEREBY EXPRESSLY SUBMITS TO THE PERSONAL JURISDICTION AND VENUE OF SUCH COURTS FOR THE PURPOSES THEREOF AND EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE AND ANY CLAIM THAT SUCH COURTS ARE AN INCONVENIENT FORUM. EACH CREDIT PARTY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN SECTION 12.02, SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF AGENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER JURISDICTION.

(b) EACH CREDIT PARTY AND EACH OF ITS SUBSIDIARIES HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE SECURITIES OR ANY OF THE OTHER TRANSACTION DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EACH CREDIT PARTY AND EACH OF ITS SUBSIDIARIES (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (II) ACKNOWLEDGES THAT EACH LENDER HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, AND THE OTHER TRANSACTION DOCUMENTS TO WHICH IT IS PARTY BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.

12.09 Severability

. If any one or more of the provisions contained in this Agreement, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions of this Agreement. The parties hereto further agree to replace such invalid, illegal or unenforceable provisions of this Agreement with valid, legal and enforceable provisions that will achieve, to the extent possible, the economic, business and other purposes of such invalid, illegal or unenforceable provisions.

12.10 Rules of Construction

. Unless the context otherwise requires, “or” is not exclusive.

12.11 Entire Agreement

. This Agreement and the other Transaction Documents, together with the exhibits and schedules hereto and thereto, is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or therein. This Agreement and the other Transaction Documents, together with the exhibits and schedules hereto and thereto, supersede all prior agreements and understandings between the parties with respect to such subject matter.

12.12 Certain Expenses

. The Credit Parties will pay all expenses of the Agent and Lenders (including reasonable fees, charges and disbursements of counsel) in connection with (i) any amendment, supplement, modification or waiver of or to any provision of this Agreement or any of the other Transaction Documents or any documents relating thereto (including a response to a request by any Credit Party for the Lenders’ consent to any action otherwise prohibited hereunder or thereunder), or consent to any departure from, the terms of any provision of this Agreement or such other documents, (ii) all efforts made to enforce payment of the Notes, (iii) instituting, maintaining, preserving, enforcing and foreclosing on Agent’s security interest in or Lien on any of the Collateral, or maintaining, preserving or enforcing any of Agent’s or any Lender’s rights hereunder, under the Working Capital Intercreditor Agreement, the Seller Subordination Agreement or the Rosen Subordination Agreement and under all related agreements, documents and instruments, whether through judicial proceedings or otherwise, or (iv) defending or prosecuting any actions or proceedings arising out of or relating to Agent’s or any Lender’s transactions with any Credit Party or any Senior Lender or (v) any advice given to any Agent or any Lender with respect to its rights and obligations under this Agreement, the Working Capital Intercreditor Agreement, the Seller Subordination Agreement or the Rosen Subordination Agreement and all related agreements, documents and instruments.

12.13 Publicity

. Except as may be required by Applicable Law, none of the parties hereto shall issue a publicity release or announcement or otherwise make any public disclosure concerning this Agreement or the transactions contemplated hereby, without prior approval by the other parties hereto. If any announcement is required by law to be made by any party hereto, prior to making such announcement such party will deliver a draft of such announcement to the other parties and shall give the other parties an opportunity to comment thereon. Notwithstanding the foregoing, any Lender or any Affiliate of any Lender may (i) disclose a general description of transactions arising under the Transaction Documents, the Original Acquisition Documents and the BVX Acquisition Documents for advertising, marketing or other similar purposes, and (ii) use any Credit Party’s name, logo or other indicia germane to such party in connection with such advertising, marketing or other similar purposes, and, in each case, may post such information on its website.

12.14 Further Assurances

. Each of the parties shall execute such documents and perform such further acts (including obtaining any consents, exemptions, authorizations, or other actions by, or giving any notices to, or making any filings with, any Governmental Authority or any other Person) as may be reasonably required or desirable to carry out or to perform the provisions of this Agreement, including any post-closing assignment(s) by any Lender of a portion of the Securities to a Person not currently a party hereto.

12.15 Obligations of the Lenders

. The obligations of each Lender shall be several and not joint and no Lender shall be liable or responsible for the acts or omissions of any other Lender.

12.16 No Strict Construction

. The parties hereto have participated jointly in the negotiation and drafting of this Agreement and the other Transaction Documents. In the event an ambiguity or question of intent or interpretation arises under any provision of this Agreement or any Transaction Document, this Agreement or such other Transaction Document shall be construed as if drafted jointly by the parties thereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement or any other Transaction Document. No knowledge of, or investigation, including due diligence investigation, conducted by, or on behalf of, any Lender shall limit, modify or affect the representations set forth in Article 5 of this Agreement or the right of any Lender to rely thereon.

12.17 Transfer of the Notes.

(a) The term “ Lender ” as used herein shall include any transferee of any Note whose name has been recorded by the Borrower in the Note Register. Each transferee of any Note acknowledges that the Notes have not been registered under the Securities Act, and may be transferred only pursuant to an effective registration under the Securities Act or pursuant to an applicable exemption from the registration requirements of the Securities Act.

(b) The Borrower shall maintain a register (the “ Note Register ”) in its principal offices for the purpose of registering the Notes and any transfer or partial transfer thereof, which register shall reflect and identify, at all times, the ownership of record of any interest in the Notes or any interest therein. Upon the issuance of the Notes, the Borrower shall record the name and address of the initial Lender of each Note in the Note Register as the first Lender. Upon surrender for registration of transfer or exchange of any Note at the principal offices of the Borrower, the Borrower shall, at its expense, execute and deliver one or more Notes of like tenor and of denominations of at least $500,000 (except as may be necessary to reflect any principal amount not evenly divisible by $500,000) of a like aggregate principal amount, registered in the name of the Lender or a transferee or transferees. Every Note surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by written instrument of transfer duly executed by the Lender of such Note or such Lender’s attorney duly authorized in writing.

(c) On receipt by the Borrower of an affidavit of an authorized representative of any Lender stating the circumstances of the loss, theft, destruction or mutilation of any Note (and in the case of any such mutilation, on surrender and cancellation of such Note), the Borrower, at its expense, will promptly execute and deliver, in lieu thereof, a new Note of like tenor. If required by the Borrower, such Lender must provide indemnity sufficient in the reasonable judgment of the Borrower to protect the Borrower from any loss which they may suffer if a lost, stolen or destroyed Note is replaced.

ARTICLE 13

GUARANTEE

13.01 The Guarantee

. The Guarantors hereby jointly and severally guarantee, as a primary obligor and not as a surety to each Lender and Agent and their respective successors and assigns, the prompt payment in full when due (whether at stated maturity, by required prepayment, declaration, demand, by acceleration or otherwise) of the Principal Amount of and Interest (including any interest, fees, costs or charges that would accrue but for the provisions of Title 11 of the United States Code after any bankruptcy or insolvency petition under Title 11 of the United States Code) on the Notes and all other obligations from time to time owing to such Lender and Agent by the Borrower under any Transaction Document, in each case strictly in accordance with the terms thereof (such obligations being herein collectively called the “Guarantors’ Obligations”). The Guarantors hereby jointly and severally agree that if the Borrower shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Guarantors’ Obligations, the Guarantors will promptly pay the same in cash, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guarantors’ Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise and after giving effect to any applicable notice or cure period) in accordance with the terms of such extension or renewal.

13.02 Obligations Unconditional

. The obligations of the Guarantors under Section 13.01 shall constitute a guaranty of payment and not of collection and, to the fullest extent permitted by Applicable Law, are absolute, irrevocable and unconditional, joint and several, irrespective of the value, genuineness, validity, regularity or enforceability of the Guarantors’ Obligations of the Borrower under this Agreement, the Notes, or any other agreement or instrument referred to herein or therein, or any substitution, release or exchange of any other guarantee of or security for any of the Guarantors’ Obligations and, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or Guarantor (except for payment in full). Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of the Guarantors hereunder, which shall remain absolute, irrevocable and unconditional under any and all circumstances as described above:

(i) at any time or from time to time, without notice to the Guarantors, the time for any performance of or compliance with any of the Guarantors’ Obligations shall be extended, or such performance or compliance shall be waived;

(ii) any of the acts mentioned in any of the provisions of this Agreement or the Notes or any other agreement or instrument referred to herein or therein shall be done or omitted;

(iii) the maturity of any of the Guarantors’ Obligations shall be accelerated, or any of the Guarantors’ Obligations shall be amended in any respect, or any right under the Transaction Documents or any other agreement or instrument referred to herein or therein shall be amended or waived in any respect or any other guarantee of any of the Guarantors’ Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with;

(iv) any Lien granted to, or in favor of, Agent, on behalf of the Lenders, as security for any of the Guarantors’ Obligations shall fail to be perfected.

The Guarantors hereby expressly waive diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that Agent or any Lender exhaust any right, power or remedy or proceed against the Borrower under this Agreement or the Notes, or any other agreement or instrument referred to herein or therein, or against any other person under any other guarantee of, or security for, any of the Guarantors’ Obligations. The Guarantors waive any and all notice of the creation, renewal, extension, waiver, termination or accrual of any of the Guarantors’ Obligations and notice of or proof of reliance by upon the guarantee provided under this Article XIII (the “ Guarantee ”) or acceptance of this Guarantee, and the Guarantors’ Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Guarantee, and all dealings between any Credit Party and any Lender or Agent shall likewise be conclusively presumed to have been had or consummated in reliance upon this Guarantee. This Guarantee shall be construed as a continuing, absolute, irrevocable and unconditional guarantee of payment without regard to any right of offset with respect to the Guarantors’ Obligations at any time or from time to time held by any Lender or Agent, and the obligations and liabilities of the Guarantors hereunder shall not be conditioned or contingent upon the pursuit by such Lender or any other person at any time of any right or remedy against any Credit Party or against any other person which may be or become liable in respect of all or any part of the Guarantors’ Obligations or against any collateral security or guarantee therefore or right of offset with respect thereto. This Guarantee shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the Guarantors and the successors and assigns thereof, and shall inure to the benefit of each Lender, Agent and their respective successors and assigns, notwithstanding that from time to time during the term of this Agreement there may be no Guarantors’ Obligations outstanding.

13.03 Reinstatement

. The obligations of the Guarantors under this Article 13 shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Credit Party in respect of the Guarantors’ Obligations is rescinded or must be otherwise restored by any holder of any of the Guarantors’ Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise.

13.04 Subrogation

. Each Guarantor hereby agrees that until the indefeasible payment and satisfaction in full in cash of all Guarantors’ Obligations under this Agreement it shall waive any claim and shall not exercise any right or remedy, direct or indirect, arising by reason of any performance by it of its guarantee in Section 13.01, whether by subrogation or otherwise, against any Credit Party or any security for any of the Guarantors’ Obligations.

13.05 Remedies

. The Guarantors jointly and severally agree that if the obligations of any Borrower under this Agreement and the Notes are declared to be forthwith due and payable as provided in the Notes (or shall be deemed to have become automatically due and payable in the circumstances provided in the Notes) for purposes of Section 13.01, notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against the Borrower such obligations (whether or not due and payable by any Borrower) shall forthwith become due and payable by the Guarantors for purposes of Section 13.01.

13.06 Continuing Guarantee

. The guarantee in this Article 13 is a continuing guarantee of payment, and shall apply to all Guarantors’ Obligations whenever arising.

13.07 General Limitation on Guarantors’ Obligations

. In any action or proceeding involving any state corporate, limited partnership or limited liability company law, or any applicable state, federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Guarantor under Section 13.01 would otherwise be held or determined to be void, voidable, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under Section 13.01, then, notwithstanding any other provision to the contrary, the amount of such liability shall, without any further action by such Guarantor, or any other Person, be automatically limited and reduced to the highest amount that is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding.

13.08 Effectiveness of Guarantee by NBS.

Notwithstanding any provision in this Article XIII to the contrary, the Guarantee provided by NBS herein shall not be effective with respect to the Indebtedness evidenced by the Series C Notes and the Series D Notes until (i) the Consent to such Guarantee of such Indebtedness of the Delaware Public Service Commission, the Georgia Public Service Commission, the Maryland Public Service Commission, the New Jersey Board of Public Utilities, the New York Public Service Commission, the Pennsylvania Public Utility Commission and the West Virginia Public Service Commission shall have been obtained and (ii) notice of such Guarantee of such Indebtedness shall have been given to each of the Connecticut Public Utilities Regulatory Authority, the Massachusetts Department of Telecommunications and Cable and the Rhode Island Public Utilities Commission in accordance with the requirements of such Governmental Authority.

ARTICLE 14

REGARDING AGENT

14.01 Appointment

. Each Lender hereby designates Fund III to act as Agent for such Lender under this Agreement and the Transaction Documents. Each Lender hereby irrevocably authorizes Agent to take such action on its behalf under the provisions of this Agreement and the Transaction Documents and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto and Agent shall hold all Collateral, payments of principal and interest, fees, charges and collections received pursuant to this Agreement, for itself and for the ratable benefit of the Lenders. Agent may perform any of its duties hereunder by or through its agents or employees. As to any matters not expressly provided for by this Agreement (including collection of the Notes) Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders (or, if applicable pursuant to Section 12.04, the holders of 100% of the Notes), and such instructions shall be binding; provided, however, that Agent shall not be required to take any action which exposes Agent to liability or which is contrary to this Agreement or the Transaction Documents or any Requirement of Law unless Agent is furnished with an indemnification reasonably satisfactory to Agent with respect thereto.

14.02 Nature of Duties

. Agent shall have no duties or responsibilities except those expressly set forth in this Agreement and the Transaction Documents. Neither Agent nor any of its officers, directors, employees or agents shall be (i) liable for any action taken or omitted by them as such hereunder or in connection herewith, unless caused by their gross (not mere) negligence or willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment), or (ii) responsible in any manner for any recitals, statements, representations or warranties made by any Credit Party or any of its Subsidiaries or any officer of any of any Credit Party or any of its Subsidiaries contained in this Agreement, or in any of the Transaction Documents or in any certificate, report, statement or other document referred to or provided for in, or received by Agent under or in connection with, this Agreement or any of the Transaction Documents or for the value, validity, effectiveness, genuineness, due execution, enforceability or sufficiency of this Agreement, or any of the Transaction Documents or for any failure of any Credit Party or any of its Subsidiaries to perform its obligations hereunder. Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any of the Transaction Documents, or to inspect the properties, books or records of any Credit Party or any of its Subsidiaries. The duties of Agent as respects payments or collections shall be mechanical and administrative in nature; Agent shall not have by reason of this Agreement a fiduciary relationship in respect of any Lender; and nothing in this Agreement, expressed or implied, is intended to or shall be so construed as to impose upon Agent any obligations in respect of this Agreement except as expressly set forth herein.

14.03 Lack of Reliance on Agent and Resignation.

(a) Independently and without reliance upon Agent or any other Lender, each Lender has made and shall continue to make (i) its own independent investigation of the financial condition and affairs of the Credit Parties and their Subsidiaries in connection with the purchase of any Securities hereunder and the taking or not taking of any action in connection herewith, and (ii) its own appraisal of the creditworthiness of the Credit Parties. Agent shall have no duty or responsibility, either initially or on a continuing basis, to provide any Lender with any credit or other information with respect thereto, whether coming into its possession before the purchase of any Securities or at any time or times thereafter except as shall be provided by the Credit Parties pursuant to the terms hereof. Agent shall not be responsible to any Lender for any recitals, statements, information, representations or warranties herein or in any agreement, document, certificate or a statement delivered in connection with or for the execution, effectiveness, genuineness, validity, enforceability, collectability or sufficiency of this Agreement or any Transaction Document, or of the financial condition of the Credit Parties and their Subsidiaries, or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement, the Notes, the Transaction Documents or the financial condition of the Credit Parties and their Subsidiaries, or the existence of any Event of Default or any Default.

(b) Agent may resign on thirty (30) days’ written notice to each Lender and upon such resignation, the Required Lenders will promptly designate a successor Agent reasonably satisfactory to the Credit Parties (provided that the consent of the Credit Parties shall not be required after the occurrence and during the continuance of an Event of Default).

(c) Any such successor Agent shall succeed to the rights, powers and duties of Agent, and the term “Agent” shall mean such successor agent effective upon its appointment, and the former Agent’s rights, powers and duties as Agent shall be terminated, without any other or further act or deed on the part of such former Agent. After any Agent’s resignation as Agent, the provisions of this Article 14 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.

14.04 Certain Rights of Agent

. If Agent shall request instructions from the Lenders with respect to any act or action (including failure to act) in connection with this Agreement or any Transaction Document, Agent shall be entitled to refrain from such act or taking such action unless and until Agent shall have received instructions from the Lenders; and Agent shall not incur liability to any Person by reason of so refraining. Without limiting the foregoing, no Lender shall have any right of action whatsoever against Agent as a result of its acting or refraining from acting hereunder in accordance with the instructions of the Required Lenders.

14.05 Reliance

. Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, telex, teletype or telecopier message, cablegram, order or Transaction Document or telephone message believed by it to be genuine and correct and to have been signed, sent or made by the proper person or entity, and, with respect to all legal matters pertaining to this Agreement and the Transaction Documents and its duties hereunder, upon advice of counsel selected by it. Agent may employ agents and attorneys-in-fact and shall not be liable for the default or misconduct of any such agents or attorneys-in-fact selected by Agent with reasonable care.

14.06 Notice of Default

. Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder or under the Transaction Documents, unless Agent has received notice from a Lender or a Credit Party referring to this Agreement or the Transaction Documents, describing such Default or Event of Default and stating that such notice is a “notice of default”. In the event that Agent receives such a notice, Agent shall give notice thereof to each Lender. Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by Required Lenders; provided , that, unless and until Agent shall have received such directions, Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders.

14.07 Indemnification

. To the extent Agent is not reimbursed and indemnified by the Credit Parties and their Subsidiaries, each Lender will reimburse and indemnify Agent in proportion to its respective portion of the Notes, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against Agent in performing its duties hereunder, or in any way relating to or arising out of this Agreement or any Transaction Document; provided that, no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from Agent’s gross (not mere) negligence or willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment). The obligations of the Lenders under this Section 14.07 shall survive termination of this Agreement and the Transaction Documents and payment in full of the Notes.

14.08 Agent in its Individual Capacity

. With respect to the obligation of Agent to purchase Securities under this Agreement, the Securities purchased by it shall have the same rights and powers hereunder as any other Lender and as if it were not performing the duties as Agent specified herein; and the term “Lender” or any similar term shall, unless the context clearly otherwise indicates, include Agent in its individual capacity as a Lender. Agent may engage in business with any Credit Party as if it were not performing the duties specified herein.

14.09 Delivery of Documents or Other Information

. To the extent Agent receives financial statements or other information required under this Agreement from the Credit Parties pursuant to the terms of this Agreement which the Credit Parties are not obligated to deliver to the Lenders, Agent will promptly furnish such documents and information to the Lenders.

14.10 Credit Parties’ Undertaking to Agent

. Without prejudice to its respective obligations to each Lender under the other provisions of this Agreement, each Credit Party undertakes with Agent to pay to Agent from time to time on demand all amounts from time to time due and payable by it for the account of Agent or Lenders or any of them pursuant to this Agreement to the extent not already paid. Any payment made pursuant to any such demand shall pro tanto satisfy such Credit Party’s obligations to make payments for the account of Lenders or the relevant one or more of them pursuant to this Agreement.

14.11 No Reliance on Agent’s Customer Identification Program

. Each Lender acknowledges and agrees that neither such Lender, nor any of its Affiliates, participants or assignees, may rely on the Agent to carry out such Lender’s, Affiliate’s, participant’s or assignee’s customer identification program, or other obligations required or imposed under or pursuant to the USA PATRIOT Act or the regulations thereunder, including the regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “ CIP Regulations ”), or any other Anti-Terrorism Law, including any programs involving any of the following items relating to or in connection with any Credit Party, its Affiliates or its agents, this Agreement, the Transaction Documents or the transactions hereunder or contemplated hereby: (1) any identity verification procedures, (2) any record-keeping, (3) comparisons with government lists, (4) customer notices or (5) other procedures required under the CIP Regulations or such other laws.

14.12 Other Agreements

. Each Lender hereby specifically authorizes and directs Agent to enter into each of the Transaction Documents on behalf of such Lender. Each Lender agrees that it shall not, without the express consent of Agent, and that it shall, to the extent it is lawfully entitled to do so, upon the request of Agent, set off against the obligations of the Credit Parties and their Subsidiaries to Agent and Lenders under the Agreement and Transaction Documents, any amounts owing by such Lender to the Credit Parties or any of their Subsidiaries. Anything in this Agreement to the contrary notwithstanding, each Lender further agrees that it shall not take any action to protect or enforce its rights arising out of this Agreement or the Transaction Documents, it being the intent of each Lender that any such action to protect or enforce rights under this Agreement and the Transaction Documents shall be taken by Agent at the direction of Required Lenders.

ARTICLE 15

TAXES, YIELD PROTECTION AND ILLEGALITY

15.01 Taxes.

(a) Any and all payments by or on account of any obligation of each Credit Party hereunder or under any other Transaction Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if any Credit Party shall be required by Applicable Law to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions for Indemnified Taxes or Other Taxes (including deductions applicable to additional sums payable under this Section) Lenders and Agent receive an amount equal to the sum they would have received had no such deductions for Indemnified Taxes or Other Taxes been made, (ii) such Credit Party shall make such deductions and (iii) such Credit Party shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with Applicable Law.

(b) Without limiting the provisions of paragraph (a) above, each Credit Party shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with Applicable Law.

(c) Each Credit Party shall jointly and severally indemnify each Lender and Agent, within thirty (30) days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by such Lender or Agent and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to such Credit Party by a Lender or Agent shall be conclusive absent manifest error.

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by a Credit Party to a Governmental Authority, such Credit Party shall deliver to Lenders and Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Agent.

(e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding Tax under the law of the United States, or any treaty to which such jurisdiction is a party, with respect to payments by a Credit Party under this Agreement or under any other Transaction Document shall deliver to such Credit Party, at the time or times prescribed by Applicable Law or reasonably requested by two original Internal Revenue Service Form W-8 (e.g., W-8 BEN, W-8 ECI), as appropriate, or any successor or other form prescribed by the Internal Revenue Service, and related documentation certifying that such Foreign Lender is exempt from or entitled to a reduced rate of United States federal withholding tax on payments pursuant to this Agreement or any other Transaction Document. In addition, any Lender, if requested by Borrower or the Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by Borrower or the Agent as will enable Borrower to determine whether or not such Lender is subject to backup withholding or information reporting requirements; provided, that the Borrower or Agent, as applicable, agrees to maintain the confidentiality of any non-public information provided by such Lender in accordance with its customary procedures for handling confidential information and to not disclose such information except as required by Applicable Law, and provided, further, that should any Lender become subject to Indemnified Taxes because of its failure to deliver a form required hereunder, the Credit Parties shall take such steps as such Lender shall reasonably request to reasonably assist (consistent with its preexisting internal policies applied on a nondiscriminatory basis and legal and regulatory restrictions) such Lender to recover such Indemnified Taxes.

(f) The agreements in this Section shall survive the termination of this Agreement and payment of the Notes and all other amounts payable hereunder, under the Notes or under any other Transaction Document.

(g) No Lender shall be obligated to contest a Tax indemnified by a Credit Party under the Transaction Documents that is asserted in the name of such Lender nor will the Credit Parties be permitted to contest such a Tax, unless in the judgment of such Lender, there is a reasonable basis for such contest and the contest and its resolution does not materially disadvantage such Lender.

(h) In the event that a Lender is entitled, on the effective date of any assignment and acceptance under this Agreement, to the benefits of a payment pursuant to subsection (a), (b) or (c) of this Section 15.01, the assignee of such Lender shall be entitled, without duplication, to the benefits of such payments (in addition to any future benefits of payment that may arise with respect to such assignee) that would have been available to such Lender had such Lender not entered into such assignment and acceptance with such assignee.

(i) In the event any Credit Party incorrectly withholds Indemnified Taxes under this Section 15.01 from amounts payable to any Lender or Agent, the Credit Parties shall pay such party interest at 10% per annum compounded semi-annually on the amount incorrectly withheld from the date withheld to the date of payment.

15.02 Certificates of Lenders

. Any Lender claiming reimbursement or compensation pursuant to this Article 15 shall deliver to Borrower a certificate setting forth in reasonable detail the amount payable to such Lender hereunder and such certificate shall be conclusive and binding on the Credit Parties in the absence of manifest error.

ARTICLE 16

SEPARATENESS COVENANTS

The Credit Parties, jointly and severally, (i) represent and warrant to each Lender that the following representations are, and after giving effect to the transactions contemplated by the Transaction Documents, the Original Acquisition Documents and the BVX Acquisition Documents will be, true, correct and complete and (ii) covenant and agree, until the payment in full of all principal of and interest on the Notes and all other amounts due to the Agent and Lenders under this Agreement and the other Transaction Documents, including all fees, expenses and amounts due in respect of indemnity obligations under Article 7, with the Agent and Lenders as set forth in this Article 16:

16.01 Separate Legal Entity

. Neither any Credit Party nor any of its Subsidiaries shall take any action, or conduct its affairs in a manner, which is likely to result in the corporate existence of such Credit Party or any of its Subsidiaries being ignored, or in the property and liabilities of such Credit Party or any of its Subsidiaries being substantively consolidated with those of any other such Person in a bankruptcy, reorganization or other insolvency proceeding.

16.02 Capital

. Borrower on the one hand, and Parent on the other, will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations.

16.03 Dissolution

. None of Borrower, Parent, or any Subsidiary will seek or effect the liquidation, dissolution, winding up, liquidation, consolidation or merger, in whole or in part, of Borrower.

16.04 Commingled Funds

. Borrower will not commingle the funds and other assets of Borrower with those of any Affiliate or any other Person, and will hold all of its assets in its own name. Parent will not commingle the funds and other assets of Parent with those of any Affiliate or any other Person, and will hold all of its assets in its own name.

16.05 Segregated Assets

. Borrower has and will maintain its assets in such manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or any other Person. Parent shall not cause any business opportunities of Borrower to be directed to Parent or to any Credit Party other than Borrower, or take any other action which advantages Parent or any other Credit Party, to the disadvantage of Borrower.

16.06 Bank Accounts

. Borrower will not permit any Affiliate independent access to its bank accounts. Parent will not permit any Affiliate independent access to its bank accounts.

16.07 Employees

. Each of Borrower and Parent will pay the salaries of its own employees (if any) from its own funds and maintain a sufficient number of employees (if any) in light of its contemplated business operations.

16.08 Agents

. Each of Borrower and Parent will compensate each of its consultants and agents from its funds for services provided to it and pay from its own assets all obligations of any kind incurred.

16.09 Independent Director

. At all times (except during such periods when the position temporarily is vacant) the Required Lenders shall have the right to designate at least one (1) duly appointed Independent Director of Borrower and of NBS. The Organization Documents of Borrower and of NBS shall provide the prior written consent of the Independent Director shall be required (and Borrower and NBS, respectively, shall not take any such consent or authorize the taking of any of the actions set forth in this paragraph below unless there is at least one Independent Manager then serving in such capacity) for Borrower and NBS, or any other Person on behalf of Borrower or NBS, to:

(i) file or consent to the filing by or against Borrower or NBS, as applicable, as debtor, of any bankruptcy, insolvency or reorganization case or proceeding; institute any proceedings by Borrower or NBS, as applicable, as debtor, under any applicable insolvency law; or otherwise seek relief for Borrower or NBS, as applicable, as debtor, under any laws relating to the relief from debts or the protection of debtors generally;

(ii) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for Borrower or NBS, as applicable, as debtor, or a substantial portion of Borrower’s or NBS’s property, as applicable;

(iii) make any assignment for the benefit of the creditors of Borrower or NBS, as applicable; or

(iv) modify or amend any of the foregoing.

16.10 Organization Documents

. The Organization Documents of Borrower and of NBS shall set forth the foregoing requirements and such other customary requirements relating to the separate nature, existence and operation of Borrower and of NBS as the Agent may request from time to time.

16.11 Ministerial or Administrative Actions

. The foregoing provisions are not intended to restrict Credit Parties from having a consolidated payroll function or a combined accounting and finance department or from using one another’s employees provided in any event that each of the Credit Parties shall maintain separate books and records with appropriate entries to account for such transactions, including an appropriate allocation of the direct cost of any employee used by more than one Credit Party.

IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be executed and delivered by their respective officers hereunto duly authorized as of the date first above written.

Borrower: FUSION NBS ACQUISITION CORP.

By: /s/ Gordon Hutchins, Jr.

Name: Gordon Hutchins, Jr.

Title: President

Guarantors:

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

By: /s/ Gordon Hutchins, Jr.

Name: Gordon Hutchins, Jr.

Title: President

NETWORK BILLING SYSTEMS, LLC

By: /s/ Gordon Hutchins, Jr.

Name: Gordon Hutchins, Jr.

Title: Executive Vice President

FUSION BVX LLC

By: /s/ Gordon Hutchins, Jr.

Name: Gordon Hutchins, Jr.

Title: President

Lenders:

PRAESIDIAN CAPITAL OPPORTUNITY FUND III, LP By: Praesidian Capital Opportunity GP III, LLC, its General Partner By: /s/ Jason D. Dattrell Name: Jason D. Drattell Title: Manager
PRAESIDIAN CAPITAL OPPORTUNITY FUND III-A, LP By: Praesidian Capital Opportunity GP III-A, LLC, its General Partner By: /s/ Jason D. Dattrell N ame: Jason D. Drattell Title: Manager
	PLEXUS FUND II, L.P. By: Plexus Fund II GP, LLC its General Partner By: /s/ Michael Becker Name: Michael Becker Title: Manager

PLEXUS FUND III, L.P.

By: Plexus Fund III GP, LLC

its General Partner

By: /s/ Michael Becker

Name: Michael Becker

Title: Manager

PLEXUS FUND QP III, L.P.

By: Plexus Fund III GP, LLC

its General Partner

By: /s/ Michael Becker

Name: Michael Becker

Title: Manager

UNITED INSURANCE COMPANY

OF AMERICA

By: /s/John Boschelli

Name: John Boschelli

Title: Assistant Treasurer

Agent:

PRAESIDIAN CAPITAL OPPORTUNITY

FUND III, LP

By: Praesidian Capital Opportunity GP III, LLC,

its General Partner

By:

Name: Jason D. Drattell

Title: Manager

Schedule 2.01

Lender Schedule – Series D Notes

Name of Lender	Principal Amount		Purchase Price
Praesidian Capital Opportunity Fund III, LP	$	7,206,573.23	$	6,537,667.93
Praesidian Capital Opportunity Fund III-A, LP	$	2,793,426.77	$	2,534,144.32
Plexus Fund III, L.P.	$	5,000,000	$	4,535,906.13
Plexus Fund QP III, L.P.	$	5,000,000	$	4,535,906.13
United Insurance Company of America	$	5,000,000	$	4,547,225.49

Schedule 2.02

Lender Schedule - Purchased New Warrants

Name of Lender	Number and Class of Equity Interests for which New Warrants are Exercisable	Purchase Price
Praesidian Capital Opportunity Fund III, LP	6,689,053 Shares of Common Stock, par value $0.01 per share, of Fusion Telecommunications, Inc.	$	668,905.30
Praesidian Capital Opportunity Fund III-A, LP	2,592,824 Shares of Common Stock, par value $0.01 per share, of Fusion Telecommunications, Inc.	$	259,282.45
Plexus Fund III, LP	4,640,939 Shares of Common Stock, par value $0.01 per share, of Fusion Telecommunications, Inc.	$	464,093.87
Plexus Fund QP III, LP	4,640,939 Shares of Common Stock, par value $0.01 per share, of Fusion Telecommunications, Inc.	$	464,093.87
United Insurance Company of America	4,527,745 Shares of Common Stock, par value $0.01 per share, of Fusion Telecommunications, Inc.	$	452,774.51

EXHIBIT C

COMPLIANCE CERTIFICATE

___________________

Date: _________, 20__

This certificate is given by [___________], a [_________ ____________] and [ insert name of other Credit Parties if any ] (the “ Credit Parties ”), pursuant to Section 8.01(d) of that certain Amended and Restated Securities Purchase Agreement and Security Agreement dated as of December 31, 2013 by and among the Credit Parties, Praesidian Capital Opportunity Fund III, LP, Praesidian Capital Opportunity Fund III-A, LP, Plexus Fund II, L.P., Plexus Fund III, L.P., Plexus Fund QP III, L.P. and United Insurance Company of America as such agreement may have been amended, restated, supplemented or otherwise modified from time to time (the “ Agreement ”). Capitalized terms used herein without definition shall have the meanings set forth in the Agreement.

The undersigned is executing this certificate is the Chief Financial Officer of each Credit Party and as such is duly authorized to execute and deliver this certificate on behalf of such Credit Party. By executing this certificate the undersigned hereby certifies that:

(a) the financial statements delivered with this certificate in accordance with Section 8.01[a][b][c] of the Agreement fairly present in all material respects the results of operations and financial condition of the Credit Parties on a Consolidated Basis as of the dates of such financial statements;

(b) he has reviewed the terms of the Agreement and the Notes and has made, or caused to be made under his supervision, a review in reasonable detail of the transactions and conditions of the Credit Parties and their respective Subsidiaries during the accounting period covered by such financial statements;

(c) such review has not disclosed the existence during or at the end of such accounting period, and he has no knowledge of the existence as of the date hereof, of any condition or event that constitutes an Event of Default, except as set forth in Exhibit A hereto which includes a description of the nature and period of existence of such Event of Default and what action the Credit Parties have taken, are undertaking and propose to take with respect thereto;

(d) the Credit Parties and their Subsidiaries are in compliance with the covenants contained in Articles 8 and 9 of the Agreement, as demonstrated on the attached worksheets, except as set forth or described in Exhibit A ; and

(e) (i) Leverage Ratio is _____:1.00.

(ii) Fixed Charge Coverage is _____:1.00.

(iii) Capital Expenditures are $__________.

(iv) Minimum EBITDA is $__________.

(v) Minimum Parent EBITDA is $__________.

(vi) Cash of Parent in excess of Working Capital Loan is $_________.

IN WITNESS WHEREOF , each Credit Party has caused this Certificate to be executed by its Principal Accounting Officer this [__] day of [___________], 20[___].

[__________________________________]

By:_________________________________

Principal Accounting Officer

[__________________________________]

By:_________________________________

Principal Accounting Officer

Exhibit 10.87

FIRST AMENDMENT TO INTERCREDITOR AGREEMENT

THIS FIRST AMENDMENT TO INTERCREDITOR AGREEMENT (this “Amendment”) is entered into as of this December 31, 2013 by and among Prestige Capital Corporation, (and together with its successors and assigns, "Prestige"), Praesidian Capital Opportunity Fund III, LP, (“Fund III”), Praesidian Capital Opportunity Fund III-A, LP, (“Fund III-A”), Plexus Fund II, LP, (“Plexus”), Plexus Fund III QP, LP, a Delaware limited partnership (“Plexus QP”), United Insurance Company of America, an Illinois corporation (“United” and together with Fund III, Fund III-A, Plexus, Plexus QP and each of their successors and assigns, each a “New Lender”, and collectively, the “New Lenders” and together with Prestige, each a “Lender and collectively, the “Lenders”), Fund III, as agent for the New Lenders (in such capacity, the “Agent”), Fusion NBS Acquisition Corp., a Delaware corporation (“Borrower”), Fusion Telecommunications International, Inc., a Delaware corporation (“Parent”), Network Billing Systems, LLC, a New Jersey limited liability company (“NBS”), Fusion BVX LLC, a Delaware limited liability company (“BVX”) and each other direct or indirect subsidiary of Parent from time to time party hereto (Borrower, Parent, NBS, BVX and each such other subsidiary, the “Credit Parties”).

R E C I T A L S

A. The parties hereto, other than Plexus QP, United and BVX are all of the parties to an Intercreditor Agreement dated as of October 29, 2012 (the “Intercreditor Agreement”);

B. In connection with the acquisition by Borrower of BVX and the increase in the amount of the New Lender Debt (as defined in the Intercreditor Agreement) the parties hereto wish to add Plexus QP and United to the Intercreditor Agreement as New Lenders and wish to add BVX to the Intercreditor Agreement as a “Credit Party”.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto hereby agree as follows:

1. Amendments of Intercreditor Agreement. Each of Plexus QP and United hereby join the Intercreditor Agreement as one of the New Lenders and all references in the Intercreditor Agreement to the New Lenders shall include Plexus QP and United. BVX hereby joins the Intercreditor Agreement as one of the Credit Parties and all references in the Intercreditor Agreement to the Credit Parties shall include BVX. The term “New Lender Credit Agreement” shall mean the Amended and Restated Securities Purchase Agreement and Security Agreement dated as of the date hereof, among the New Lenders, the Agent and the Credit Parties, as the same may be amended, supplemented, replaced or otherwise modified from time to time. Each of the parties to the Intercreditor Agreement hereby consents to the foregoing amendments.

2. Reference To and Effect On The Intercreditor Agreement . On or after the date hereof, each reference in or to the Intercreditor Agreement shall mean and be a reference to the Intercreditor Agreement, as amended by this Amendment, and each reference in any other document in which the Intercreditor Agreement is referenced shall also mean and be a reference to the Intercreditor Agreement, as amended by this Amendment.

3. Continuing Effect of Intercreditor Agreement. Except as expressly amended hereby, the provisions of the Intercreditor Agreement shall remain in full force and effect. Each party hereto hereby reaffirms its obligations under the Intercreditor Agreement, as amended hereby.

4. Governing Law . This Agreement shall be interpreted in accordance with and governed by the laws of the State of New York without regard to choice of law principles.

[Signature Page Follows]

IN WITNESS WHEREOF , the parties hereto have caused this Amendment to be executed as of the date first above written.

	LENDERS:

	PRESTIGE CAPITAL CORPORATION

	By:	/s/ Harvey L. Kaminski
		Name: Harvey L. Kaminski
		Title: President/CEO

	PRAESIDIAN CAPITAL OPPORTUNITY FUND III, L.P., individually and as Agent

	By:	Praesidian Capital Opportunity GP III, LLC, its General Partner

	By:	Jason D. Dattrell
		Name: Jason D. Dattrell
		Title: Manager

	PRAESIDIAN CAPITAL OPPORTUNITY FUND III-A, L.P.

	By:	Praesidian Capital Opportunity GP III-A, LLC, its General Partner

	By:	Jason D. Dattrell
		Name: Jason D. Dattrell
		Title: Manager

	PLEXUS FUND II, LP

	By:	Plexus Fund II GP, its General Partner

	By:	Michael Becker
		Name: Michael Becker
		Title: Manager

	PLEXUS FUND III QP, LP

	By:	Plexus Fund II GP, its General Partner

	By:	Michael Becker
		Name: Michael Becker
		Title: Manager

[Signature Page to First Amendment to Intercreditor Agreement]

	UNITED INSURANCE COMPANY OF AMERICA

	By:	/s/ John Boschelli
		Name: John Boschelli
		Title: Assistant Treasurer

	CREDIT PARTIES:

	FUSION NBS ACQUISITION CORP.

	By:	/s/ Gordon Hutchins, Jr.
		Name: Gordon Hutchins, Jr.
		Title: President

	FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

	By:	/s/ Gordon Hutchins, Jr.
		Name: Gordon Hutchins, Jr.
		Title: President

	NETWORK BILLING SYSTEMS, LLC

	By:	/s/ Gordon Hutchins, Jr.
		Name: Gordon Hutchins, Jr.
		Title: Executive Vice President

	FUSION BVX LLC

	By:	/s/ Gordon Hutchins, Jr.
		Name: Gordon Hutchins, Jr.
		Title: President

[Signature Page to First Amendment to Intercreditor Agreement]

Exhibit 10.88

Series D Note

$[______________] December [__], 2013

FOR VALUE RECEIVED, Fusion NBS Acquisition Corp., a Delaware corporation (“ Borrower ”), hereby promises to pay to [__________], a ]_________] (the “ Lender ”), or its registered assigns, the principal sum of [_________________________] DOLLARS ($[____________]). The Principal Amount under this Note shall be payable in the amounts, at the times and in the manner set forth in the Purchase Agreement (as defined below). Interest on the Principal Amount under this Note shall be calculated at the rate or rates and in accordance with the Purchase Agreement (including any default interest, if applicable) and interest shall be payable in the amounts, at the times and in the manner set forth in the Purchase Agreement. The highest rate of interest provided for in this Note shall continue to apply to the debt evidenced by this Note until repaid notwithstanding the entry of judgment on this Note.

This Note is executed and delivered pursuant to that certain Amended and Restated Securities Purchase Agreement and Security Agreement dated as of the date hereof among Borrower, Fusion Telecommunications International, Inc., a Delaware corporation (“ Parent ”), Network Billing Systems, LLC, a New Jersey limited liability company, Fusion BVX LLC, a Delaware limited liability company, each other direct and indirect subsidiary of Parent from time to time party thereto , [the Lender/the Lender, Praesidian Capital Opportunity Fund III, LP, a Delaware limited partnership], in its capacity as a lender and agent thereunder, and the other lenders party thereto (such agreement, as amended, supplemented, restated or otherwise modified from time to time, the “ Purchase Agreement ”). To the extent of any inconsistency with the Purchase Agreement, the Purchase Agreement shall supersede this Note.

The remainder of this page is intentionally left blank. Signatures follow.

IN WITNESS WHEREOF, Borrower, intending to be legally bound, has duly executed this Note the day and year first above written.

	FUSION NBS ACQUISITION CORP.

	By:
		Name:
		Title:

[Signature Page to Series D Note - [FUND III]/[FUND II-A][PLEXUS]/[PLEXUS QP]/[UNITED]]

Exhibit 10.89

Fusion Telecommunications International, Inc.

Fusion NBS Acquisition Corp.

420 Lexington Avenue Suite 1718

New York, New York 10170

December 31, 2013

________________

Re: Management Rights

Ladies and Gentlemen:

You have requested that each of Fusion NBS Acquisition Corp., a Delaware corporation (“ Borrower ”), and Fusion Telecommunications International, Inc., a Delaware corporation (“ Parent ”), (together with Borrower, the “ Credit Parties ”), grant certain management rights to ______________ (the “ Investor ”) so that the purchase by the Investor of (i) certain promissory notes of Borrower (the “ Notes ”) and (ii) certain warrants from Parent to purchase capital stock of Parent (collectively, the “ Warrants ”), each pursuant to the Amended and Restated Securities Purchase Agreement and Security Agreement, dated as of the date hereof, among the Credit Parties, the Investor and the other persons, from time to time, parties thereto, as such agreement may be amended, supplemented or otherwise modified from time to time (the “ Purchase Agreement ”), each may qualify as a “venture capital investment” as described in clause (d)(3)(i) of the U.S. Department of Labor Regulations § 2510.3-101 (the “ DOL Regulation ”). This letter will confirm our agreement that the Investor will be entitled to the contractual management, information and other rights enumerated below:

(1) Each of the Credit Parties and their subsidiaries shall provide to the Investor true and correct copies of all documents, reports, financial data and other information as the Investor may reasonably request. Additionally, each of the Credit Parties shall permit any authorized representatives designated by the Investor to visit and inspect any of the properties of the Credit Parties and their subsidiaries, including its and their books of account, and to discuss its and their affairs, finances and accounts with its and their officers, all upon reasonable notice to Parent’s Chief Executive Officer, at such times during normal business hours as the Investor may reasonably request. Discussions by Investors with officers of the Credit Parties pursuant to this paragraph shall be initiated by a request made to Parent’s Chief Executive Officer who shall be responsible for coordinating compliance with this provision.

(2) With respect to each Credit Party, at any time during which the Investor does not have the direct contractual right to designate a representative to serve on the Board of Directors of such Credit Party (in each case, a “ Credit Party Board ”), the Investor shall have the right to designate one (1) person to attend as observers, all meetings of such Credit Party Board and all executive and other committee meetings thereof and shall provide to the Investor the same information concerning such Credit Party and its Subsidiaries (as defined in the Purchase Agreement), and access thereto, provided to members of the Credit Party Board and such committees, as applicable. The reasonable travel expenses incurred by any such designee of the Investor in attending any board or committee meetings shall be reimbursed by such Credit Party, to the extent consistent with such Credit Party’s then existing policy of reimbursing directors generally for such expenses; provided, that no Credit Party will be required to permit a person designated by the Investor to attend, as an observer, any committee meeting of such Credit Party Board or provide information to the Investor as provided to such committees, unless the Investor has executed a confidentiality agreement satisfactory to the Credit Party in its reasonable determination, or in the event such Credit Party Board reasonably determines that a conflict of interest may exist between the Investor and such Credit Party Board. Notwithstanding any provision herein to the contrary, including, without limitation, the last paragraph hereof, only one observer may be designated collectively by Investor and any persons to whom Investor may have transferred any of its Notes.

(3) The Investor (or any authorized representative designated by the Investor) shall have the right to consult with and advise the management of each of the Credit Parties and their subsidiaries, upon reasonable notice at reasonable times from time to time, on all matters relating to the operation of the Credit Parties and their subsidiaries. The Investor shall contact Parent’s Chief Executive Officer with any Investor request pursuant to this paragraph who shall be responsible for coordinating compliance with this provision.

(4) The Credit Parties shall provide the Investor with all financial information and inspection rights provided to “Lenders” (as defined in the Purchase Agreement) under the Purchase Agreement. The rights of Investor set forth in this letter are in addition to, and not in limitation, of the rights of the Investor under the Purchase Agreement.

This letter may not be amended except by a written instrument signed by the Investor and each of the Credit Parties.

Each of the Credit Parties hereby further agrees that if legal counsel for the Investor reasonably concludes that the rights granted hereby should be altered to preserve the qualification of the Investor as a “venture capital operating company” or the Investor’s investment in the Credit Parties as a “venture capital investment”, in each case, as defined in the DOL Regulation or otherwise to ensure that the assets of the Investor are not considered “plan assets” for purposes of the Employee Retirement Income Security Act of 1974, as amended, each of the Credit Parties will agree to amendments to this letter to effect such alterations; provided that no such alteration would result in a material adverse effect on the operation or business of the Credit Parties.

The rights of Investor described herein with respect to any Credit Party shall terminate and be of no further force or effect upon, subject to the other terms hereof, the Investor no longer holding any Notes of such Credit Party.

If any Credit Party engages in a restructuring or similar transaction, any resulting entity or entities shall be subject to this Agreement in the same manner as the Credit Parties, as applicable.

The Credit Parties hereby further agrees that they will provide to any person or entity to which the Investor transfers at least 50% of the principal amount of Notes then held by the Investor with the same rights granted to the Investor hereunder.

[ Signature Pages to Follow ]

Very truly yours,

FUSION NBS ACQUISITION CORP.

By:_______________________________

Name:

Title:

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

By:_______________________________

Name:

Title:

[Signature Page to ____________ Management Rights Agreement]

ACKNOWLEDGED AND ACCEPTED :

___________________

By: __________________________

By: __________________________________

Name:

Title:

[Signature Page to ____________ Management Rights Agreement]

Exhibit 10.90

Small Business Side Letter

December 31, 2013

Reference is made to that certain Securities Purchase Agreement and Security Agreement (the “ Purchase Agreement ”), dated as of the date hereof, and as may be amended and in effect from time to time, by and between, among others, FUSION NBS ACQUISITION CORP., a Delaware corporation (“ Borrower ”), with its principal place of business at 155 Willowbrook Boulevard, Wayne, New Jersey 07470, FUSION TELECOMMUNICATIONS INTERNATIONAL, INC., a Delaware corporation with its principal place of business at 420 Lexington Avenue, Suite 1718, New York, New York 10170, (“ Parent ” ) each subsidiary from time to time party thereto, PRAESIDIAN CAPITAL OPPORTUNITY FUND III-A, LP, a Delaware limited partnership with its principal place of business at 419 Park Avenue South, New York, New York, PRAESIDIAN CAPITAL OPPORTUNITY FUND III, LP, a Delaware limited partnership with its principal place of business at 419 Park Avenue South, New York, New York, as a lender and as agent thereunder, PLEXUS FUND II, L.P., a Delaware limited partnership with its principal place of business at 4601 Six Forks Road, Suite 528, Raleigh, North Carolina, PLEXUS FUND III, L.P., a Delaware limited partnership with its principal place of business at 4601 Six Forks Road, Suite 528, Raleigh, North Carolina, PLEXUS FUND QP III, L.P., a Delaware limited partnership with its principal place of business at 4601 Six Forks Road, Suite 528, Raleigh, North Carolina (“ ______________ ”), and UNITED INSURANCE COMPANY OF AMERICA, an Illinois corporation with its principal place of business at 1 East Wacker Drive, Chicago, Illinois 6060, pursuant to which, among other things, ______________ has agreed (i) to provide necessary financing to Borrower by making a term loan to Borrower on the terms set forth in the Purchase Agreement and (ii) to purchase from Parent warrants to purchase capital stock of Parent (the “ Warrants ”), on the terms and conditions set forth in the Purchase Agreement.

__________ is a Small Business Investment Company (“ SBIC ”) licensed by the United States Small Business Administration (“ SBA ”). In order for ______________ to lend to Borrower and purchase the Warrants, it must obtain from Borrower certain representations and rights as set forth below. As a material inducement to ______________ to enter into the Purchase Agreement, Borrower hereby makes the following representations and warranties and agrees to comply with the following covenants:

1. Small Business Matters.

(a) Borrower, together with Borrower’s Affiliates, is a “ small business concern ” within the meaning of the Small Business Investment Act of 1958, as amended (“ SBIA ”), and the regulations thereunder, including Title 13, Code of Federal Regulations. § 121.30l(c) because, as of the date hereof, it either:

Check One

(i)

including its affiliates, has a tangible net worth not in excess of $18 million and average net income after Federal income taxes (excluding any carry-over losses) for the preceding two completed fiscal years not in excess of $6 million; or

(ii)

does not exceed the size standard in number of employees or millions of dollars in revenue under the SIC (Standard Industrial Classification) System for the industry in which it, combined with its affiliate, is primarily engaged; and in which it alone is primarily engaged.

(b) The information set forth in the Small Business Administration Forms 480, 652 and Parts A and B of Form 1031 regarding Borrower and its Affiliates, when delivered to ______________, will be accurate and complete and will be in form and substance acceptable to ______________. Copies of Forms 480 and 652 shall be completed and executed by Borrower and delivered to ______________ at the Purchase Agreement closing (the “ Closing ”), and Parts A and B of Form 1031 shall be completed and executed by Borrower and delivered to ______________ within 15 days of the Closing.

(c) The proceeds will be used by Borrower (1) for the purposes described in the Purchase Agreement, and (2) to pay expenses related to the transactions contemplated by the Purchase Agreement. No portion of such proceeds will be used to provide capital to business ineligible for financing as described in 13 C.F.R. § 107.720.

(d) At Closing or within one year thereafter, no more than 49 percent of the employees or tangible assets of Borrower and its Subsidiaries will be located outside the United States (unless Borrower can show, to SBA’s satisfaction, that the proceeds will be used for a specific domestic purpose). This subsection (e) does not prohibit such proceeds from being used to acquire foreign materials and equipment or foreign property rights for use or sale in the United States.

(e) Neither Borrower, nor any officer, director, employee or equity owner of the business was or is an Associate (as such term is defined in 13 C.F.R. § 107.50) of ______________.

2. Regulatory Compliance.

(a) Information Rights and Related Covenants.

(i) Borrower shall provide to ______________ or any of its Affiliates and the SBA at such times as ______________ or the SBA may request access to its books and records for the purpose of confirming the use of the proceeds of such financing and for all other purposes required by the SBA.

(ii) Borrower shall provide to ______________ or any of its Affiliates such financial and other information as ______________ or any of its Affiliates may from time to time reasonably request to enable it to comply with the provisions of 13 C.F.R. Section 107.620(b)(1), and such information shall be certified by such Borrower’s President, Chief Executive Officer, Treasurer or Chief Financial Officer as required by 13 C.F.R. Section 107.620(b)(2).

(iii) Prior to the Closing, Borrower shall provide to ______________ or any of its Affiliates and the SBA a certificate of its Chief Financial Officer (1) certifying the use of such proceeds and (2) certifying compliance by such Borrower with the provisions of this letter (provided that such certificate may be truthfully given).

(iv) Within 45 days after the end of each fiscal year of Borrower, Borrower shall provide to ______________ or any of its Affiliates a written assessment, in form and substance reasonably satisfactory to ______________, of the economic impact of ______________'s financing hereunder, specifying the full-time equivalent jobs created or retained, the impact of the financing on the consolidated revenues and profits of the Business and on taxes paid by the Business and its employees (See 13 CFR § 107.630(e)).

(v) Upon the request of ______________ or any of its Affiliates, Borrower will (A) provide to such Person such financial statements and other information as such Person may from time to time reasonably request for the purpose of assessing such Borrower's financial condition and (B) furnish to such Person all information reasonably requested by it in order for it to prepare and file SBA Form 468 and any other information reasonably requested or required by any governmental agency asserting jurisdiction over such Person.

(vi) For a period of one year following the date hereof, neither Borrower nor any of its Subsidiaries will change its business activity if such change would render Borrower ineligible to receive financial assistance from an SBIC under the SBIA and the regulations thereunder (within the meanings of 13 CFR §§ 107.720 and 107.760(b)).

(vii) Borrower shall at all times comply with the non-discrimination requirements of 13 CFR Parts 112, 113 and 117.

3. Definitions.

(a) “ Affiliate ” shall have the meaning set forth in Title 13, Code of Federal Regulations. § 121.103.

(b) “ Control ” means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

(c) “ Person ” shall be construed broadly and shall include an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity (or any department, agency or political subdivision thereof).

(d) “ Subsidiary ” means, with respect to any Person, any other Person of which the securities having a majority of the ordinary voting power in electing the board of directors (or other governing body), at the time as of which any determination is being made, are owned by such first Person either directly or through one or more of its Subsidiaries.

4. Miscellaneous.

(a) This letter may be executed in counterparts, each of which shall be an original and both of which taken together shall constitute one and the same instrument.

(b) This letter shall be governed by the laws of the State of New York (without giving effect to the conflicts of laws principles thereof).

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the parties have caused this letter to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

FUSION NBS ACQUISITION CORP.

By:_______________________________

Name:

Title:

[Signature Page to ______________ SBA Letter]

__________________

By: _____________________

By: __________________________________

Name:

Title:

[Signature Page to ______________ SBA Letter]

Exhibit 10.91

NOMINAL WARRANT

December 31, 2013

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

Warrant to Purchase [_____] Shares (subject

to adjustment) of Common Stock

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

COMMON STOCK PURCHASE WARRANT

Void after December 31, 2023

Fusion Telecommunications International, Inc., a Delaware corporation (the “ Company ”), hereby certifies that for value received, [_________], or its successors or assigns (the “ Holder ”), is entitled to purchase, subject to the terms and conditions hereinafter set forth, an aggregate of [_____] fully paid and nonassessable shares of Common Stock (as hereinafter defined) of the Company, at an Payment Obligation of $.01 per share, subject to adjustment as provided herein (the “ Purchase Price ”), at any time or from time to time prior to the Expiration Date (as hereinafter defined).

This Warrant is issued pursuant to the Amended and Restated Securities Purchase Agreement and Security Agreement (the “ Purchase Agreement ”), dated as of the date hereof, among Fusion NBS Acquisition Corp., a Delaware corporation, as borrower (the “ Borrower ”), the Company and each other direct or indirect subsidiary of Company from time to time party thereto, Praesidian Capital Opportunity Fund III, LP, a Delaware limited partnership (“ Fund III ”), Praesidian Capital Opportunity Fund III-A, LP, a Delaware limited partnership, Plexus Fund II, L.P., a Delaware limited partnership, Plexus Fund III, L.P., a Delaware limited partnership, Plexus Fund QP III, L.P., a Delaware limited partnership and United Insurance Company of America, an Illinois corporation and Fund III, as Agent, and is subject to the terms thereof. Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to such terms in the Purchase Agreement. The Holder is entitled to the rights and subject to the obligations contained in the Purchase Agreement and the Right of First Refusal Agreement relating to this Warrant and the shares of Common Stock issuable upon exercise of this Warrant.

1. Definitions . For the purposes of this Warrant, the following terms shall have the meanings indicated:

“ Business Day ” shall mean any day other than a Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required by law or executive order to close.

“ Certificate of Incorporation ” shall mean the Certificate of Incorporation of the Company as may be amended or amended and restated from time to time.

“ Closing Price ” shall mean, with respect to each share of Common Stock for any day, (a) the last reported sale price regular way or, in case no such sale takes place on such day, the average of the closing bid and asked prices regular way, in either case as reported on the principal national securities exchange on which the Common Stock is listed or admitted for trading or (b) if the Common Stock is not listed or admitted for trading on any national securities exchange, the last reported sale price or, in case no such sale takes place on such day, the average of the highest reported bid and the lowest reported asked quotation for the Common Stock, in either case as reported on the OTC Markets or a similar service if OTC Markets is no longer reporting such information.

“ Common Stock ” means the common stock, par value $.01 per share, of the Company, and any class of stock resulting from successive changes or reclassification of such Common Stock.

“ Company ” has the meaning ascribed to such term in the first paragraph of this Warrant.

“ Current Market Price ” shall be determined in accordance with Subsection 3(c).

“ EBITDA Per Share ” in respect of any date (the “ Determination Date ”) shall mean an amount equal to:

(6.0 x EBITDA) – (I) + CE

where:

EBITDA

equals EBITDA as calculated in the Purchase Agreement for the twelve consecutive months ending on the last day of the month ending prior to the Determination Date (the “ Measurement Date ”)

equals all Indebtedness of the Company and its Subsidiaries of the types described in clauses (i) and (iv) of the definition of “Indebtedness” contained in the Purchase Agreement, determined on a Consolidated Basis as at the Measurement Date

equals cash and cash equivalents of the Company and its Subsidiaries, determined on a Consolidated Basis as at Measurement Date

equals the number of shares of Common Stock issued and outstanding on the Determination Date (assuming for this purpose that this Warrant and the Other Warrants are exercised in full)

“ Exercise Date ” has the meaning ascribed to such term in Subsection 2(e).

“ Expiration Date ” shall mean 5:00 P.M., New York City time, on December 31, 2023.

“ Holder ” has the meaning ascribed to such term in the first paragraph and Section 9 of this Warrant.

“ Issuable Warrant Shares ” shall mean the shares of Common Stock issuable at any time upon exercise of the Warrant.

“ Issued Warrant Shares ” shall mean any shares of Common Stock issued upon exercise of the Warrant.

“Minimum Liquidity Requirement” means as of the date the Warrant Put Notice or the Share Put Notice, as applicable, is delivered either (x) the average trading volume of the Common Stock on the Principal Trading Market has been equal to or greater than 150,000 shares (as appropriately adjusted for the types of events contemplated by Section 3(a)) during the thirty (30) Trading Days preceding such date, or (y) the aggregate Current Market Price on such date of the then outstanding shares of Common Stock equals or exceeds $75,000,000.

“ Other Warrants ” shall mean all warrants issued pursuant to the Purchase Agreement, other than this Warrant, to purchase capital stock of the Company and any subsequent warrants issued pursuant to the terms of such warrants.

“ Person ” shall mean any individual, firm, corporation, limited liability company, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity.

“ Principal Trading Market ” means the Trading Market on which the Common Stock is primarily listed on and quoted for trading.

“ Purchase Agreement ” has the meaning ascribed to such term in the second paragraph of this Warrant.

“ Purchase Price ” has the meaning ascribed to such term in the first paragraph of this Warrant.

“ Put Period ” shall mean the period (x) commencing on the earliest of (i) the fifth anniversary of the Initial Closing Date, (ii) the occurrence of a Liquidity Event, and (iii) the repayment in full of the Notes and (y) terminating on the Expiration Date.

“ Repurchase Price ” in respect of a given date shall be equal to the Current Market Price as at such date unless on such date the shares of Common Stock are not listed or admitted for trading on a national securities exchange or quoted on the OTC Bulletin Board or similar service, in which case the Repurchase Price shall be the greater of (i) the Current Market Price as at such date or (ii) EBITDA Per Share.

“ Trading Day ” means (i) a day on which the Common Stock is listed or quoted and traded on its Principal Trading Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is traded in the over the counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over the counter market as reported in the “pink sheets” by Pink Sheets LLC (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.

“ Trading Market ” means whichever of the New York Stock Exchange, the NYSE Amex (formerly the American Stock Exchange), the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market, OTC Markets or the OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.

“ Warrant ” shall mean this Warrant and any subsequent Warrant issued pursuant to the terms of this Warrant.

“ Warrant Register ” has the meaning ascribed to such term in Subsection 9(b).

2. Exercise of Warrant.

(a) Exercise . This Warrant may be exercised, in whole or in part, at any time or from time to time during the period beginning on the date hereof and ending on the Expiration Date, by surrendering to the Company at its principal office this Warrant, with the form of Election to Purchase Shares (the “ Election to Purchase Shares ”) attached hereto as Exhibit A duly executed by the Holder and accompanied by payment of the Purchase Price for the number of shares of Common Stock specified in such form. Upon any exercise of this Warrant, other than to the extent payment of the Purchase Price is to be made pursuant to Section 2(c) (the portion of the aggregate Purchase Price payable by Holder, the “Payment Obligation” ), the Company shall pay to Holder an amount (the “Cash Amount” ) equal to the Payment Obligation. The Holder may offset against the Payment Obligation the right to receive the Cash Amount.

(b) Delivery of Shares; Payment of Purchase Price . Upon exercise of this Warrant, the Company shall promptly (but in no event later than five Trading Days after the Exercise Date) issue or cause to be issued and cause to be delivered to or upon the written order of the Holder and in such name or names as may be designated by the Holder (along with a check for the amount of cash to be paid in lieu of issuance of fractional shares, if any), (i) a certificate for the Issued Warrant Shares issuable upon such exercise, free of restrictive legends, or (ii) an electronic delivery of the Issued Warrant Shares to the Holder’s account at the Depository Trust Company (“ DTC ”) or a similar organization, unless in the case of clause (i) and (ii) a registration statement covering the resale of the Issued Warrant Shares and naming the Holder as a selling stockholder thereunder is not then effective or the Issued Warrant Shares are not freely transferable without restriction under Rule 144 by Holders who are not affiliates of the Company, in which case such Holder shall receive a certificate for the Issued Warrant Shares issuable upon such exercise with appropriate restrictive legends. The Holder, or any Person permissibly so designated by the Holder to receive Issued Warrant Shares, shall be deemed to have become the holder of record of such Issued Warrant Shares as of the Exercise Date. If the Issued Warrant Shares are to be issued free of all restrictive legends, the Company shall, upon the written request of the Holder, use its reasonable best efforts to deliver, or cause to be delivered, Issued Warrant Shares hereunder electronically through DTC or another established clearing corporation performing similar functions, if available; provided , that , the Company may, but will not be required to, change its transfer agent if its current transfer agent cannot deliver Issued Warrant Shares electronically through such a clearing corporation. Payment of the Purchase Price may be made as follows (or by any combination of the following): (i) in United States currency by cash or delivery of a certified check, bank draft or postal or express money order payable to the order of the Company, (ii) by assigning to the Company all or any part of the unpaid principal amount of the Notes held by the Holder in a principal amount equal to the Purchase Price, or (iii) by surrender of a number of shares of Common Stock held by the Holder equal to the quotient obtained by dividing (A) the aggregate Purchase Price payable with respect to the portion of this Warrant then being exercised by (B) the Current Market Price per share of Common Stock on the Exercise Date.

(c) Alternative Cashless Exercise . Notwithstanding any provision herein to the contrary, in lieu of exercising this Warrant as set forth above, the Holder may exercise this Warrant, in whole or in part, by electing to receive that number of shares of Common Stock as determined below by surrendering to the Company at its principal office this Warrant, with the applicable Election to Purchase Shares duly executed by the Holder, in which event the Company shall issue to the Holder the number of shares of Common Stock computed using the following formula:

CS = WCS x (MP-PP)

where:

equals the number of shares of Common Stock to be issued to the Holder

WCS

equals the Issuable Warrant Shares with respect to which this Warrant is then being exercised

equals the Common Stock Current Market Price per share (at the date of such calculation)

equals the Purchase Price

Following the surrender of this Warrant pursuant to this Section 2(c), the Company shall promptly issue and deliver to the Holder a certificate or certificates for that number of shares of Common Stock, as calculated above in such name or names as may be designated by the Holder.

(d) Partial Exercise . If, pursuant to any provision hereof, this Warrant is exercised for less than all of Issuable Warrant Shares, the Company shall cancel this Warrant upon surrender hereof and shall execute and deliver to the Holder a new Warrant of like tenor for the balance of the Issuable Warrant Shares.

(e) When Exercise Effective . The exercise of this Warrant shall be deemed to have been effective immediately prior to the close of business on the Business Day on which this Warrant is surrendered to and the Purchase Price is received by the Company as provided in this Section 2 (the “ Exercise Date ”) and the Person in whose name any certificate for shares of Common Stock shall be issuable upon such exercise, as provided in Subsection 2(b), shall be deemed to be the record holder of such shares of Common Stock for all purposes on the Exercise Date.

(f) Issued Warrant Shares Fully Paid, Nonassessable . The Company shall take all actions necessary to ensure that following exercise of this Warrant in accordance with the provisions of this Section 2, the Issued Warrant Shares issued hereunder shall, without further action by the Holder, be fully paid and nonassessable.

(g) Continued Validity . A holder of shares of Common Stock issued upon the exercise of this Warrant, in whole or in part, shall continue to be entitled to all of the rights and subject to all of the obligations set forth in Section 9.

3. Adjustment of Purchase Price and Number of Shares . The Purchase Price and the number of shares of Common Stock issuable upon exercise of this Warrant shall be adjusted from time to time upon the occurrence of the following events:

(a) Dividend, Subdivision, Combination or Reclassification of Common Stock . If the Company shall, at any time or from time to time, (i) declare a dividend on the Common Stock payable in shares of its capital stock (including Common Stock), (ii) subdivide the outstanding Common Stock into a larger number of shares of Common Stock, (iii) combine the outstanding Common Stock into a smaller number of shares of its Common Stock, or (iv) issue any shares of its capital stock in a reclassification of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing corporation), then in each such case, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date shall be proportionately adjusted so that the Holder of any Warrant exercised after such date shall be entitled to receive, upon payment of the same aggregate amount as would have been payable before such date, the aggregate number and kind of shares of capital stock which, if such Warrant had been exercised immediately prior to such date, such Holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. Any such adjustment shall become effective immediately after the record date of such dividend or the effective date of such subdivision, combination or reclassification. Such adjustment shall be made successively whenever any event listed above shall occur. If a dividend is declared and such dividend is not paid, the Purchase Price shall again be adjusted to be the Purchase Price in effect immediately prior to such record date (giving effect to all adjustments that otherwise would be required to be made pursuant to this Section 3 from and after such record date).

(b) Certain Distributions . If the Company shall, at any time or from time to time, fix a record date for any dividend or other distribution to all holders of Common Stock (including any such dividend or other distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of subscription rights, options, warrants, evidences of indebtedness or other assets or other property (other than dividends payable in capital stock for which adjustment is made under Subsection 3(a)), then the Company shall, contemporaneously with such distribution, distribute to the Holder such portion of such distribution as the Holder would have received if the Holder had exercised the Warrant immediately prior thereto.

(c) Determination of Current Market Price . For purposes of this Warrant, the Current Market Price per share of Common Stock on any date shall be deemed to be the average of the daily Closing Prices per share of Common Stock for the 10 consecutive trading days commencing 15 trading days before such date. If on any such date the shares of Common Stock are not listed or admitted for trading on any national securities exchange or quoted on the OTC Markets or a similar service, then the Board of Directors of the Company, acting in good faith shall promptly determine the Current Market Price per share of Common Stock, which shall be equal to the fair market value per share of Common Stock as of such date, and shall provide prompt written notice of such determination, in reasonable detail, to Holder, provided however, that if the Holder reasonably disagrees with the Current Market Price so determined, then same shall be disregarded, and in such case the Company, on the one hand, and the Holder, on the other hand, shall each promptly appoint as an appraiser an individual who shall be a member of a nationally recognized investment banking firm. Each appraiser shall be instructed to, within 30 days of appointment, determine the Current Market Price per share of Common Stock, which shall be deemed to be equal to the fair market value per share of Common Stock as of such date. If the two appraisers are unable to agree on the Current Market Price per share of Common Stock within such 30 day period, then the two appraisers, within 10 days after the end of such 30 day period shall jointly select a third appraiser. The third appraiser shall, within 30 days of its appointment, determine, in good faith, the Current Market Price per share of Common Stock and such determination shall be controlling. If any party fails to appoint an appraiser or if one of the two initial appraisers fails after appointment to submit its appraisal within the required period, the appraisal submitted by the remaining appraiser shall be controlling. For purposes of Sections 14 and 15 hereof, Current Market Price per share of Common Stock, whether determined by the Board of Directors of the Company, or by the appraisers, shall be determined without regard to any minority discount or illiquidity discount accorded to the shares of Common Stock. The cost of the foregoing appraisals shall be shared one-half by the Company and one-half by the Holder, provided, however, in the event a third appraiser is utilized and one of the two initial appraisals (but not the other initial appraisal) is greater than or less than the appraisal by such third appraiser by 10% or more, then the cost of all of the foregoing appraisals shall be borne by the party who appointed the appraiser who made such initial appraisal.

(d) De Minimis Adjustments . No adjustment in the Purchase Price shall be made under this Section 3 if the amount of such adjustment would result in a change in the Purchase Price per share of less than one percent (1%), but in such case any adjustment that would otherwise be required to be made shall be carried forward and shall be made at the time of and together with the next subsequent adjustment, which together with any adjustment so carried forward, would result in a change in the Purchase Price of one percent (1%) or more. Notwithstanding the provisions of the first sentence of this Subsection 3(d), any adjustment postponed pursuant to this Subsection 3(d) shall be made no later than the earlier of (i) three years from the date of the transaction that would, but for the provisions of the first sentence of this Section 3(d), have required such adjustment, (ii) an Exercise Date or (iii) the Expiration Date.

(e) Adjustments to Other Shares . In the event that at any time, as a result of an adjustment made pursuant to Subsection 3(a), the Holder shall become entitled to receive, upon exercise of this Warrant, any shares of capital stock of the Company other than shares of Common Stock, the number of such other shares so receivable upon exercise of this Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares of Common Stock contained in Section 3 and all other provisions of this Warrant with respect to the shares of Common Stock shall apply on like terms to any such other shares.

(f) Adjustment of Number of Shares Issuable Upon Exercise . Upon each adjustment of the Purchase Price as a result of the calculations made in Subsections 3(a) or (c), this Warrant shall thereafter evidence the right to receive, at the adjusted Purchase Price, that number of shares of Common Stock (calculated to the nearest one hundredth) obtained by dividing (x) the product of the aggregate number of shares of Common Stock covered by this Warrant immediately prior to such adjustment and the Purchase Price in effect immediately prior to such adjustment of the Purchase Price by (y) the Purchase Price in effect immediately after such adjustment of the Purchase Price.

(g) Reorganization, Reclassification, Merger and Sale of Assets . If there occurs any capital reorganization or any reclassification of the Common Stock of the Company, the consolidation or merger of the Company with or into another Person (other than a merger or consolidation of the Company in which the Company is the continuing corporation and which does not result in any reclassification or change of outstanding shares of its Common Stock) or the sale or conveyance of all or substantially all of the assets of the Company to another Person, then the Holder will thereafter be entitled to receive, upon the exercise of this Warrant in accordance with the terms hereof, the same kind and amounts of securities (including shares of stock) or other assets, or both, which were issuable or distributable to the holders of outstanding Common Stock of the Company upon such reorganization, reclassification, consolidation, merger, sale or conveyance, in respect of that number of shares of Common Stock then deliverable upon the exercise of this Warrant if this Warrant had been exercised immediately prior to such reorganization, reclassification, consolidation, merger, sale or conveyance; and, in any such case, appropriate adjustments (as determined in good faith by the Board of Directors of the Company) shall be made to assure that the provisions hereof (including provisions with respect to changes in, and other adjustments of, the Purchase Price) shall thereafter be applicable, as nearly as reasonably may be practicable, in relation to any securities or other assets thereafter deliverable upon exercise of this Warrant.

4. Certificate as to Adjustments . Whenever the Purchase Price or the number of shares of Common Stock issuable, or the securities or other property deliverable, upon the exercise of this Warrant shall be adjusted pursuant to the provisions hereof, the Company shall promptly give written notice thereof to the Holder, in accordance with Section 12, in the form of a certificate signed by the Chairman of the Board, President or one of the Vice Presidents of the Company, and by the Chief Financial Officer, Treasurer or one of the Assistant Treasurers of the Company, stating the adjusted Purchase Price, the number of shares of Common Stock issuable, or the securities or other property deliverable, upon exercise of the Warrant and setting forth in reasonable detail the method of calculation and the facts requiring such adjustment and upon which such calculation is based. Each adjustment shall remain in effect until a subsequent adjustment is required.

5. Fractional Shares . Notwithstanding an adjustment pursuant to Section 3 in the number of Issuable Warrant Shares or any other provision of this Warrant, the Company shall not be required to issue fractions of shares upon exercise of this Warrant or to distribute certificates which evidence fractional shares. In lieu of fractional shares, the Company may make payment to the Holder, at the time of exercise of this Warrant as herein provided, of an amount in cash equal to such fraction multiplied by the Current Market Price of a share of Common Stock on the Exercise Date.

6. Notice of Proposed Actions . In case the Company shall propose at any time or from time to time (a) to declare or pay any dividend payable in stock of any class to the holders of Common Stock or to make any other distribution to the holders of Common Stock, (b) to effect any reclassification of its Common Stock, (c) to effect any consolidation, merger or sale, transfer or other disposition of all or substantially all of the property, assets or business of the Company which would, if consummated, adjust the Purchase Price or the securities issuable upon exercise of the Warrant, or (d) to effect the liquidation, dissolution or winding up of the Company, or (e) to take any other action that would require a vote of the Company’s stockholders, then, in each case, the Company shall give to the Holder, in accordance with Section 12, a written notice of such proposed action, which shall specify (i) the record date for the purposes of such dividend, distribution of rights or warrants or vote of the stockholders of the Company, or if a record is not to be taken, the date as of which the holders of shares of Common Stock of record to be entitled to such dividend, distribution of rights or warrants, or vote is to be determined, or (ii) the date on which such reclassification, consolidation, merger, sale, transfer, disposition, liquidation, dissolution or winding up is expected to become effective, and such notice shall be so given as promptly as possible but in any event at least ten (10) Business Days prior to the applicable record, determination or effective date specified in such notice.

7. No Dilution or Impairment . The Company will not, by amendment of its Certificate of Incorporation or By-laws or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder of this Warrant against dilution or other impairment. Without limiting the generality of the foregoing, the Company (a) will not increase the par value of any shares of stock receivable on the exercise of this Warrant above the amount payable therefor on such exercise, (b) will at all times reserve and keep available the maximum number of its authorized shares of Common Stock, free from all preemptive rights therein, which will be sufficient to permit the full exercise of this Warrant, and (c) will take all such action as may be necessary or appropriate in order that all shares of Common Stock as may be issued pursuant to the exercise of this Warrant will, upon issuance, be duly and validly issued, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issue thereof.

8. Replacement of Warrant . On receipt by the Company of an affidavit of an authorized representative of the Holder stating the circumstances of the loss, theft, destruction or mutilation of this Warrant (and in the case of any such mutilation, on surrender and cancellation of such Warrant), the Company at its expense will promptly execute and deliver, in lieu thereof, a new Warrant of like tenor which shall be exercisable for a like number of shares of Common Stock. If required by the Company, such Holder must provide an indemnity bond or other indemnity sufficient in the judgment of the Company to protect the Company from any loss which it may suffer if a lost, stolen or destroyed Warrant is replaced.

9. Restrictions on Transfer .

(a) Subject to the provisions of this Section 9 and the Right of First Refusal Agreement, this Warrant may be transferred or assigned, in whole or in part, by the Holder at any time, and from time to time, to any Person. The term “Holder” as used herein shall also include any transferee of this Warrant whose name has been recorded by the Company in the Warrant Register (as hereinafter defined). Each transferee of the Warrant or the Common Stock issuable upon the exercise of the Warrant acknowledges that the Warrant or the Common Stock issuable upon the exercise of the Warrant has not been registered under the Securities Act and may be transferred only pursuant to an effective registration under the Securities Act or pursuant to an applicable exemption from the registration requirements of the Securities Act.

(b) With respect to a transfer that should occur prior to the time that the Warrant or the Common Stock issuable upon the exercise thereof is registered under the Securities Act, such Holder shall request an opinion of counsel (which shall be rendered by counsel reasonably acceptable to the Company in form and substance reasonably acceptable to the Company) that the proposed transfer may be effected without registration or qualification under any Federal or state securities or blue sky law. Counsel shall, as promptly as practicable, notify the Company and the Holder of such opinion and of the terms and conditions, if any, to be observed in such transfer, whereupon the Holder shall be entitled to transfer this Warrant or such shares of Common Stock (or portion thereof), subject to any other provisions and limitations of this Warrant. In the event this Warrant shall be exercised as an incident to such transfer, such exercise shall relate back and for all purposes of this Warrant be deemed to have occurred as of the date of such notice regardless of delays incurred by reason of the provisions of this Section 9 which may result in the actual exercise on any later date.

(c) The Company shall maintain a register (the “ Warrant Register ”) in its principal office for the purpose of registering the Warrant and any transfer thereof, which register shall reflect and identify, at all times, the ownership of any interest in the Warrant. Upon the issuance of this Warrant, the Company shall record the name of the initial purchaser of this Warrant in the Warrant Register as the first Holder. Upon surrender for registration of transfer or exchange of this Warrant together with a properly executed Form of Assignment attached hereto as Exhibit B at the principal office of the Company, the Company shall, at its expense, execute and deliver one or more new Warrants of like tenor which shall be exercisable for a like aggregate number of shares of Common Stock, registered in the name of the Holder or a transferee or transferees.

(d) Issuance of certificates for shares of Common Stock upon the exercise of this Warrant shall be made without charge to the Holder hereof for any issue or transfer tax, or other incidental expense, in respect of the issuance or delivery of such certificates or the securities represented thereby, all of which taxes and expenses shall be paid by the Company.

10. No Rights or Liability as a Stockholder . This Warrant does not entitle the Holder hereof to any voting rights or other rights as a stockholder of the Company. No provisions hereof, in the absence of affirmative action by the Holder hereof to purchase Common Stock, and no enumeration herein of the rights or privileges of the Holder shall give rise to any liability of such Holder as a stockholder of the Company.

11. Amendment or Waiver . Subject to the terms of the Purchase Agreement, this Warrant and any term hereof may be amended, waived, discharged or terminated only by and with the written consent of the Company and the Holder.

12. Notices . Any notice or other communication (or delivery) required or permitted hereunder shall be made in writing and shall be by registered mail, return receipt requested, telecopier, courier service or personal delivery to the Company at its principal office as specified in Section 12.02 of the Purchase Agreement and to the Holder at its address as it appears in the Warrant Register. All such notices and communications (and deliveries) shall be deemed to have been duly given: when delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial overnight courier service; five Business Days after being deposited in the mail, postage prepaid, if mailed; and when receipt is acknowledged, if telecopied.

13. Company’s Obligation to Repurchase the Warrant . In the event that (a) the Holder notifies the Company in writing (the “Warrant Put Notice” ) at any time during the Put Period that the Holder wishes to sell the Issuable Warrant Shares or the then outstanding Issued Warrant Shares and the Minimum Liquidity Requirement is not satisfied, or (b) the Minimum Liquidity Requirement is satisfied but (x) there is no effective registration statement covering the resale of all Issuable Warrant Shares and then outstanding Issued Warrant Shares, and (y) the Holder is not eligible to sell all Issuable Warrant Shares and then outstanding Issued Warrant Shares pursuant to Rule 144 without regard to manner of sale requirements or volume limits, so as to enable the Holder to freely sell such shares, then, the Holder shall have the right exercisable at any time, and from time to time, during the Put Period, to cause the Company, subject to the terms and conditions hereof, to purchase from the Holder all, or any portion, of this Warrant for the purchase price determined below. The Warrant Put Notice shall specify the date on which such repurchase shall occur, which date shall not be less than thirty (30) days nor more than sixty (60) days after the date of the Warrant Put Notice (the “ Warrant Put Closing Date ”). The purchase price under this Section 13 shall be determined by multiplying (x) the Repurchase Price as of the date of such Warrant Put Notice less the Purchase Price in effect on the date of such Warrant Put Notice, by (y) the number of Issuable Warrant Shares specified in such Warrant Put Notice. On the Warrant Put Closing Date, the Holder shall surrender this Warrant to the Company against (i) payment therefor by (at the option of the Holder) wire transfer to an account in a bank located in the United States designated by the Holder for such purposes, and, (ii) if the Holder has elected to have only a portion of the Warrant repurchased, delivery of a new warrant duly executed by the Company, on the same terms and conditions as this Warrant, except that such warrant shall be exercisable for the remaining number of Issuable Warrant Shares.

14. Company’s Obligation to Repurchase the Issued Warrant Shares . In the event that (a) the Holder notifies the Company in writing (the “ Share Put Notice ”) at any time during the Put Period that the Holder wishes to sell the Issuable Warrant Shares or the then outstanding Issued Warrant Shares and the Minimum Liquidity Requirement is not satisfied, or (b) the Minimum Liquidity Requirement is satisfied but (x) there is no effective registration statement covering the resale of all Issuable Warrant Shares and then outstanding Issued Warrant Shares, and (y) the Holder is not eligible to sell all Issuable Warrant Shares and then outstanding Issued Warrant Shares pursuant to Rule 144 without regard to manner of sale requirements or volume limits, so as to enable the Holder to freely sell such shares, then, the Holder shall have the right exercisable at any time, and from time to time, during the Put Period, to cause the Company, subject to the terms and conditions hereof, to purchase from the Holder all, or any portion, of the Issued Warrant Shares at the purchase price determined below. The Share Put Notice shall specify the date on which such repurchase shall occur, which date shall not be less than thirty (30) days nor more than sixty (60) days after the date of the Share Put Notice (the “ Share Put Closing Date ”). The purchase price under this Section 14 shall be determined by multiplying (x) the Repurchase Price as of the date of such Share Put Notice by (y) the number of Issued Warrant Shares specified in such Share Put Notice. On the Share Put Closing Date, the Holder of such Issued Warrant Shares shall deliver to the Company one or more certificates representing the shares being repurchased duly endorsed for transfer to the Company against payment therefor by (at the option of the Holder) wire transfer to an account in a bank located in the United States designated by the Holder for such purposes.

15. Additional Provisions Relating to Company’s Repurchase of the Warrant . If the Company, for any reason, fails to pay the purchase price set forth under Section 13 on the Warrant Put Closing Date or under Section 14 on the Share Put Closing Date in connection with the exercise of the rights granted thereunder to the Holder, then, in addition to and not in limitation of any other rights or remedies that may be available to the Holder, such unpaid purchase price shall bear interest, payable on demand in immediately available funds, for each day from the date such purchase price was due to the date of actual payment, at a rate equal to 14% per annum, and in the absence of good faith agreement between the Company and the Holder on a mutually acceptable payment schedule, the Holder shall be entitled to exercise all rights and remedies that may be available to the Holder.

16. Certain Remedies . The Holder shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Warrant and to enforce specifically the terms and provisions of this Warrant in any court of the United States or any state thereof having jurisdiction, this being in addition to any other remedy to which such Holder may be entitled at law or in equity. The Company acknowledges that its obligations under this Warrant are secured as provided in the Purchase Agreement.

17. Governing Law . THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED IN ACCORDANCE WITH, AND ENFORCED UNDER, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS OR INSTRUMENTS ENTERED INTO AND PERFORMED ENTIRELY WITHIN SUCH STATE.

18. Headings . The headings in this Warrant are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

[Remainder of Page Intentionally Left Blank]

19. Survival . The provisions of Section 9 and Sections 12 through and including 18 hereof shall survive the complete exercise or repurchase of this Warrant and the issuance of all Issued Warrant Shares.

	FUSION TELECOMMUNICATIONS I NTERNATIONAL, INC.

	By:
		Name:
		Title:

[SIGNATURE PAGE TO COMMON STOCK WARRANT - [FUND III]/[FUND III-A]/[PLEXUS II]/[PLEXUS III]/[PLEXUS QP III]/[UNITED]]

Exhibit A to Common Stock

Purchase Warrant

ELECTION TO PURCHASE SHARES

The undersigned hereby irrevocably elects to exercise the Warrant to purchase _____ shares of Common Stock, of Fusion Telecommunications International, Inc. (the “Company”) and hereby [makes payment of $_______ therefor] [or] [makes payment therefor by assignment to the Company pursuant to Section 2(b)(ii) of the Warrant of $_____________ aggregate principal amount of the Notes (as defined in the Warrant)] [or] [makes payment therefor by surrendering pursuant to Section 2(b)(iii) _____ shares of Common Stock of the Company] [or] [makes payment therefor by surrender pursuant to Section 2(c) of a portion of the Warrant with respect to _________ shares of Common Stock]. The undersigned hereby requests that certificates for such shares of Common Stock be issued and delivered as follows:

ISSUE TO:	___________________________________________________________________________________________________________________________________
	(NAME)

	___________________________________________________________________________________________________________________________________
	(ADDRESS, INCLUDING ZIP CODE)

	___________________________________________________________________________________________________________________________________
	(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)


DELIVER TO:	___________________________________________________________________________________________________________________________________

	(NAME)

	___________________________________________________________________________________________________________________________________
	(ADDRESS, INCLUDING ZIP CODE)

If the number of shares of Common Stock purchased hereby is less than the number of shares of Common Stock covered by the Warrant, the undersigned requests that a new Warrant representing the number of shares of Common Stock not purchased be issued and delivered as follows:

ISSUE TO:	___________________________________________________________________________________________________________________________________
	(NAME)


	___________________________________________________________________________________________________________________________________
	(ADDRESS, INCLUDING ZIP CODE)

	___________________________________________________________________________________________________________________________________
	(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)


DELIVER TO:	___________________________________________________________________________________________________________________________________
	(NAME)

	___________________________________________________________________________________________________________________________________
	(ADDRESS, INCLUDING ZIP CODE)

Dated: ________________________________ [NAME OF HOLDER]

By:________________________________

Name:

Title:

________________________________

1 Name of Holder must conform in all respects to name of Holder as specified on the face of the Warrant.

Exhibit B to Common Stock

Purchase Warrant

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto the Assignee named below all of the rights of the undersigned to purchase shares of Common Stock, of Fusion Telecommunications International, Inc. represented by the Warrant, with respect to the number of shares of Common Stock set forth below:

Name of Assignee Address No. of Shares of Common Stock

and does hereby irrevocably constitute and appoint ____________________________ Attorney to make such transfer on the books of Fusion Telecommunications International, Inc. maintained for that purpose, with full power of substitution in the premises.

Dated: _________________________________ [NAME OF HOLDER]

By:________________________________

Name:

Title:

________________________________

1 Name of Holder must conform in all respects to name of Holder as specified on the face of the Warrant.

Exhibit 10.92

JOINDER AGREEMENT

This JOINDER AGREEMENT is entered into as of December 31, 2013, by and among FUSION TELECOMMUNICATIONS INTERNATIONAL, INC., a Delaware corporation (“Parent”), FUSION NBS ACQUISITION CORP., a Delaware corporation (“Borrower”), each other direct and indirect subsidiary of Parent from time to time party to the Purchase Agreement referenced below (together with the Parent, the “Guarantors), FUSION BVX LLC, a Delaware limited liability company (the “New Guarantor” and together with the Borrower and the Guarantors, the “Credit Parties”) in favor of PRAESIDIAN CAPITAL OPPORTUNITY FUND III, LP, a Delaware limited partnership (“Fund III”), PRAESIDIAN CAPITAL OPPORTUNITY FUND III-A, LP, a Delaware limited partnership (“Fund III-A”), PLEXUS FUND II, L.P., a Delaware limited partnership (“Plexus II”), PLEXUS FUND III, L.P., a Delaware limited partnership (“Plexus III”), PLEXUS FUND QP III, L.P., a Delaware limited partnership (“Plexus QP III”), UNITED INSURANCE COMPANY OF AMERICA, an Illinois corporation (“United” and together with Fund III, Fund III-A, Plexus II, Plexus III and Plexus QP III and each of their successors and assigns, each a “Lender”, and collectively, the “Lenders”), and Fund III as agent for the Lenders (in such capacity, the “Agent”).

WHEREAS , Credit Parties, Lenders and Agent are entering into that certain Amended and Restated Securities Purchase Agreement and Security Agreement, dated as of December 31, 2013 (as amended from time to time, the “Purchase Agreement”), and are parties to various of the Transaction Documents described therein. Any capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Purchase Agreement.

WHEREAS , in connection with the transactions contemplated by the BVX Acquisition Agreement, Borrower is creating, and acquiring all of the Equity Interests in, the New Guarantor.

WHEREAS, as an inducement to the Lenders and the Agent to enter into the Purchase Agreement, New Guarantor has agreed to become a party to the Pledge Agreement as provided herein.

NOW THEREFORE , the parties hereto agree as follows:

1. The New Guarantor hereby agrees (A) to become, and does hereby become, a “Pledgor” under the Pledge Agreement and (B) to be bound by the Pledge Agreement as if originally a party thereto as a “Pledgor,” and each of the Credit Parties consents to the pledge of the Equity Interests and the grant of the security interests under the Pledge Agreement and ratifies and confirm in all respects the Pledge Agreement.

2. Each of the Credit Parties hereby jointly and severally represent and warrant that the schedule attached hereto as Attachment 1 is true and correct in all respects and such schedule sets forth all information required to be scheduled under Section 3.01 of the Pledge Agreement with respect to the Pledged Equity Interests, including without limitation, as such term applies to the New Guarantor. The Pledge Agreement is hereby amended to replace Schedule 3.01 with the schedule attached hereto as Attachment 1 . The Credit Parties hereby jointly and severally represent and warrant that all of the representations and warranties contained in the Pledge Agreement as hereby amended are true and correct in all respects as of the date hereof and that after giving effect to this Joinder Agreement and the transactions contemplated hereby, no Default or Event of Default has occurred and is continuing.

3. From and after the date hereof, (A) the Pledge Agreement, the other Transaction Documents and all agreements, instruments and documents executed and delivered in connection with any of the foregoing shall each be deemed amended hereby to the extent necessary, if any, to give effect to the provisions of this Joinder Agreement and (B) all references in any Transaction Document to “this Agreement”, “hereto”, “hereof”, “hereunder” or words of like import referring to such Transaction Document, shall mean such Transaction Document, as amended hereby.

4. The Transaction Documents shall continue in full force and effect, as amended hereby.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have executed this Joinder Agreement as of December 31, 2013.

	FUSION NBS ACQUISITION CORP.

Borrower:	By:
		Name:
		Title:

Guarantors:	FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

	By:
		Name:
		Title:

	NETWORK BILLING SYSTEMS, LLC

	By:
		Name:
		Title:

New Guarantor:	FUSION BVX LLC

	By:	/s/
		Name:
		Title:

[SIGNATURE PAGE TO JOINDER AGREEMENT]

Attachment 1

Schedule 3.01 to Pledge Agreement

(See Attached)

SCHEDULE 3.01

PLEDGED EQUITY INTERESTS

COMPANY	OWNER OF EQUITY INTEREST	CERTIFICATE NO.	NO. OR % OF SHARES/UNITS	% OWNERSHIP
Fusion NBS Acquisition Corp.	Fusion Telecommunications International, Inc.	1	100 shares	100
Network Billing Systems, LLC	Fusion NBS Acquisition Corp.	1	100%	100
Fusion BVX LLC	Fusion NBS Acquisition Corp.	1	100%	100%

The Pledgors own no Uncertifcated Membership Interests.

Exhibit 10.93

ASSIGNMENT AND ASSUMPTION AGREEMENT

This Assignment and Assumption Agreement (the “ Assignment and Assumption Agreement ”) is made and entered into as of December 31, 2013 by and among BROADVOXGO!, LLC , a Delaware limited liability company (“ Broadvox ”) and CYPRESS COMMUNICATIONS, LLC , a Delaware limited liability company (“ Cypress ” and together with Broadvox, “ Assignors ”), pursuant to that certain Asset Purchase and Sale Agreement dated as of August 30, 2013 (the “ Purchase Agreement ”) by and among Assignors, FUSION TELECOMMUNICATIONS INTERNATIONAL, INC., a Delaware corporation (“ Fusion ”) and FUSION BVX, LLC fka FUSION BROADVOX ACQUISITION CORP. , a Delaware limited liability company (“ FBVX ” and together with Fusion, “ Assignees ”).

WHEREAS, Assignors and Assignees are Parties to the Purchase Agreement, pursuant to which Assignors have agreed to sell and Assignees have agreed to purchase the Acquired Assets, and as partial consideration therefore, to assume the Assumed Liabilities to the extent provided in the Purchase Agreement; and

WHEREAS, pursuant to the Purchase Agreement, Assignors have agreed to assign certain rights and agreements to Assignees, and Assignees have agreed to assume certain obligations of Assignors, as set forth therein.

NOW THEREFORE , for and in consideration of the premises and the mutual covenants contained herein and in the Purchase Agreement, and for other good and valuable consideration, the receipt, adequacy and legal sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

1. Capitalized Terms . Capitalized terms used but not defined herein shall have the meanings for such terms that are set forth in the Purchase Agreement.

2. Assignment and Assumption . Assignors hereby assign, sell, transfer and set over (collectively, the “ Assignment ”) to Assignees all of the Acquired Assets, including but not limited to the Assumed Contracts and the Assumed Liabilities. Assignees hereby accept the Assignment and assume the Acquired Assets, including but not limited to the Assumed Contracts and the Assumed Liabilities, and agree to observe and perform all of the duties, obligations, terms, provisions and covenants of, and to pay and discharge, all of the Assumed Liabilities to the extent provided in the Purchase Agreement. Assignees assume no Excluded Liabilities, and the parties hereto agree that all such Excluded Liabilities shall remain the sole responsibility of Assignors.

3. Purchase Agreement Conflicts . In the event of any conflict or inconsistency between the terms of the Purchase Agreement and the terms hereof, the terms of the Purchase Agreement shall govern.

4. Further Actions . To the extent provided in the Purchase Agreement, Assignors covenant and agree to execute and deliver, at the request of Assignees, such further instruments of transfer and assignment and to take such other action as Assignees may reasonably request to more effectively consummate the assignments and assumptions contemplated by this Assignment and Assumption Agreement.

5. Consent to Assignment . This Assignment and Assumption Agreement shall not constitute an assignment of any claim, contract, permit, franchise, or license if the attempted assignment thereof, without the consent of the other party thereto, would constitute a breach of such claim, contract, permit, franchise, or license or in any way adversely affect the rights of Assignors thereunder. If such consent is not obtained, or if any attempted assignment thereof would be ineffective or would adversely affect the rights of Assignors thereunder so that Assignees would not in fact receive all such rights, then the provisions of Section 6.15 of the Purchase Agreement shall apply.

6. No Additional Remedies . Nothing in this instrument, express or implied, is intended or shall be construed to confer upon, or give to, any person, firm or corporation other than Assignees and their successors and assigns, any remedy or claim under or by reason of this instrument or any terms, covenants or conditions hereof, and all the terms, covenants and conditions, promises and agreements contained in this instrument shall be for the sole and exclusive benefit of Assignees and their successors and assigns.

7. Incorporation by Reference of Certain Provisions of the Purchase Agreement . The provisions of Sections 10.1 (Expenses), 10.2 (Notices), 10.6 (Headings), 10.7 (Counterparts; Facsimile/Email Signatures), 10.8 (Governing Law, Mediation; Venue), and 10.12 (Delays and Omissions; Waiver) of the Purchase Agreement shall apply to this Assignment and Assumption Agreement are and hereby incorporated by reference.

8. Successors and Assigns . This Assignment and Assumption Agreement and the covenants and agreements contained herein shall survive the Closing and shall inure to the benefit of and be binding on Assignees and Assignors and their respective successors and assigns.

9. Entire Agreement; Amendment. This Assignment and Assumption Agreement, the Purchase Agreement and the documents contemplated thereby constitute the entire understanding of Assignors and Assignees with respect to the subject matter hereof. This Assignment and Assumption Agreement may not be amended except in a writing signed by Assignors and Assignees.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF , Assignors and Assignees have caused this Assignment and Assumption Agreement to be executed as of the 31st day of December 2013.

BROADVOXGO!, LLC (“BROADVOX”)		CYPRESS COMMUNICATIONS, LLC (“CYPRESS”)
By: /s/Andre Temnorod		By: Eugene Blumin

Title: Chief Executive Officer		Title: President

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC. (“FUSION”)		FUSION BVX, LLC (“FBVX”)

By: Gordon Hutchins, Jr.		By: Gordon Hutchins, Jr.

Title: President		Title: President

Exhibit 10.9 4

BILL OF SALE

BILL OF SALE (" Bill of Sale ") dated as of December 31, 2013, is delivered by BROADVOXGO!, LLC , a Delaware limited liability company (“ Broadvox ”) and CYPRESS COMMUNICATIONS, LLC , a Delaware limited liability company (“ Cypress ” and together with Broadvox, “ Sellers ”), pursuant to that certain Asset Purchase and Sale Agreement dated as of August 30, 2013 (the “ Purchase Agreement ”), by and among Sellers, FUSION TELECOMMUNICATIONS INTERNATIONAL, INC., a Delaware corporation (“ Fusion ”) and FUSION BROADVOX ACQUISITION CORP ., nka FUSION BVX, LLC, a Delaware limited liability company (“ FBVX ” and together with Fusion, “ Buyers ”). Capitalized terms not otherwise defined herein shall have the means accorded to them in the Purchase Agreement.

WHEREAS , pursuant to the terms and provisions of the Purchase Agreement, Sellers have agreed to sell certain of their assets to Buyers (the “ Acquired Assets ”) and Buyers have agreed to purchase the Acquired Assets on the terms and conditions set forth in the Agreement;

WHEREAS , the execution and delivery by the parties hereto of this Bill of Sale is a condition to each Party's obligations to consummate the transactions contemplated by the Purchase Agreement; and

WHEREAS , pursuant to that certain letter from Buyers to Sellers dated December 29, 2013, Buyers expressly directed Sellers to execute this Bill of Sale in favor of FBVX only.

NOW THEREFORE , in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and pursuant to the terms of the Agreement, the parties hereby agree as follows:

1. Sale of Assets . Sellers do hereby unconditionally and irrevocably sell, assign, transfer and convey to FBVX, in accordance with the Purchase Agreement, all of Sellers’ right, title and interest in, to and under the Acquired Assets, free and clear of all Liens other than Permitted Liens, to have and to hold the Acquired Assets from and after the date hereof.

2. Further Assurances . To the extent provided in the Purchase Agreement, Sellers shall at any time and from time to time following the Closing, execute and deliver to FBVX all such further instruments and take all such further action as may be reasonably necessary or appropriate in order to more effectively sell, assign, transfer and convey the Acquired Assets to FBVX.

3. Purchase Agreement Conflicts . In the event of any conflict between the terms of this Bill of Sale and the Purchase Agreement, the terms of the Purchase Agreement shall govern and control.

4. Successors and Assigns . This Bill of Sale and the covenants and agreements contained herein shall survive the Closing and shall inure to the benefit of and be binding on FBVX and Sellers and their respective successors and assigns.

5. Incorporation by Reference of Certain Provisions of the Purchase Agreement . The provisions of Sections 10.1 (Expenses), 10.2 (Notices), 10.6 (Headings), 10.7 (Counterparts; Facsimile/Email Signatures), 10.8 (Governing Law, Mediation; Venue), and 10.12 (Delays and Omissions; Waiver) of the Purchase Agreement shall apply to this Bill of Sale are and hereby incorporated by reference.

6. Entire Agreement; Amendment. This Bill of Sale, the Purchase Agreement and the documents contemplated thereby constitute the entire understanding of FBVX and Sellers with respect to the subject matter hereof. This Bill of Sale may not be amended except in a writing signed by FBVX and Sellers.

[Signature Page Follows]

IN WITNESS WHEREOF , Sellers have caused this Bill of Sale to be executed as of the 31st day of December 2013.

BROADVOXGO!, LLC (“BROADVOX”)		CYPRESS COMMUNICATIONS, LLC (“CYPRESS”)
By: Andre Temnorod		By: Eugene Blumin

Title: CEO		Title: President

Exhibit 10.95

LIMITED TRADEMARK LICENSE AGREEMENT

This LIMITED TRADEMARK LICENSE AGREEMENT (the “ Agreement ”) is entered into on this 31 st day of December, 2013 (the “ Effective Date ”) by and among Broadvox, LLC (“ Broadvox ” or “ Licensor ”), a Delaware limited liability company with its principal office located at 75 Erieview Plaza, Suite 400, Cleveland, OH 44114; Fusion Telecommunications International, Inc. (“ Fusion ”), a Delaware corporation with its principal office located at 420 Lexington Avenue, Suite 1718, New York, NY 10170; and Fusion BVX, LLC, F/K/A Fusion Broadvox Acquisition Corp. (“ FBVX ”, and together with Fusion, “ Licensees ”), a Delaware limited liability company with its principal office located at 420 Lexington Avenue, Suite 1718, New York, NY 10170. The aforementioned entities may be referred to individually as a “ Party ” or collectively as the “ Parties .” Any capitalized terms used herein but not specifically defined in this Agreement shall have the meaning ascribed to them in the APA (defined below).

RECITALS

WHEREAS, Licensees and certain of Broadvox’s affiliate companies, BroadvoxGo! LLC and Cypress Communications, LLC, (collectively, the “ Sellers ”) entered into an Asset Purchase and Sale Agreement, dated as of August 30, 2013, as amended (the " APA "), pursuant to which Licensees agreed to purchase from Sellers substantially all Acquired Assets, and the Assumed Liabilities, of the Business;

WHEREAS, Broadvox is the owner of trade names and/or marks containing or the name Broadvox” and derivatives thereof;

WHEREAS, in order to facilitate the transition of the Business to Licensees, Broadvox desires to grant to Licensees a limited license to use the name “Broadvox” and derivatives thereof, for a reasonable transitional period.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and representations contained herein, the Parties agree as follows:

1.	Sellers’ Marks; Reservation of Rights .

Licensees acknowledge that (i) as between Licensor and Licensees, Licensor exclusively owns all trademarks, service marks, trade dress, trade names, domain names and other identifiers of source or origin (collectively, " Trademarks ") containing or incorporating the name “Broadvox” and all variations, derivatives, or acronyms of the foregoing, including all registrations and applications for registration thereof and any Trademark confusingly similar thereto or dilutive thereof (collectively, the " Marks "), and (ii) Licensees have no rights, and are not acquiring any rights, to use the Marks after the Closing Date, except as stated in Article 2 hereof. Licensor expressly reserves all rights not expressly granted to Licensees under this Agreement. If Licensees acquire any rights in any or all of the Marks, by operation of law or otherwise, such rights shall be deemed and are hereby irrevocably assigned to Licensor without further action by any of the Parties.

2.	Grant of Limited License .

(a) Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensees and their subsidiaries a limited, non-exclusive, non-transferable, non-sublicenseable license to use the Marks in connection with the promotion, advertising, distribution and sale of the Acquired Assets in the territory of North America (the “ Territory ”) for the Term (as defined below).

(b) The “ Term ” of the license granted herein shall commence on the Closing Date and continue in accordance with the use terms specified in Exhibit 1, “License Use Terms ” attached hereto and incorporated herein, and each of the use terms therein shall establish the applicable duration of the license Term for the corresponding Trademark use.

(c) Subject to the conditions hereof, Licensees may use and distribute Licensor’s advertising, sales, marketing and promotional materials, and other documents and materials containing or bearing any Marks in connection with the continued operation of the Business during the transition period solely in a manner consistent with Licensor’s operation of the business immediately prior to the Closing Date.

(d) Apart from the Marks, no other trademark or logo may be affixed to, or used in connection with, the Acquired Assets, except that Licensees may affix their trade name(s) on packaging, advertising and promotional materials for the same.

(e) On and after the Closing Date, Licensees shall not represent that they are, or otherwise hold themselves out as being, affiliated with Licensor. In the context of entering into or conducting any contractual relationships with third parties, Licensees shall make clear to any and all such parties that Licensees, rather than Licensor, are entering into or conducting any such contractual relationships.

(f) Trademark Protection; Quality Control .

i. Licensees shall not grant any third parties the right to use any of the Marks, or any other mark confusingly similar to the Marks, and shall not sublicense the right to use any of the Marks without the prior written consent of Licensor. Licensees shall not grant or attempt to grant a security interest in, or otherwise encumber, the Marks or record any such security interest or encumbrance against any application or registration of the Marks in the U.S. Patent and Trademark Office or elsewhere.

ii. Licensees acknowledge that they are familiar with the high standards, quality, style and image of Licensor, and Licensees shall, at all times, use the Marks in a manner consistent with these standards, quality, style and image. Licensees shall ensure that they: (1) use the Marks only in the form and manner consistent with which, and in connection with goods and services of a level of quality equal to or greater than the quality of goods and services in connection with which, Licensor used the Marks immediately prior to the Closing Date, and (2) comply with all applicable laws and industry practice in connection with its use and distribution of materials containing or bearing the Marks.

iii. Licensees may not nor attempt to, nor permit, enable or request any other person or entity to: (1) use any Mark in any manner, or engage in any other act or omission, that tarnishes, degrades, disparages or reflects adversely on a Mark or Licensor’s business or reputation, or that might dilute or otherwise harm the value, reputation or distinctiveness of or Licensor’s goodwill in any Mark; (2) register or file applications to register in any jurisdiction any Trademark that consists of, incorporates, is confusingly similar to, or is a variation, derivation, modification or acronym of, any Marks; or (3) contest the ownership or validity of any of the Marks including in any litigation or administrative proceeding.

(g) If Licensees fail to comply with any of the terms and conditions in this Article 2 or otherwise fail to comply with Licensor’s reasonable directions in relation to the use of the Marks, Licensor may immediately terminate the license granted herein.

3.	Disclaimer and Indemnification .

(a) Licensor hereby disclaims all express and implied representations and warranties concerning the Marks and all responsibility or liability under this Section 3 for claims by third parties after the Closing Date arising out of or relating to the use of any Marks by Licensees or their Affiliates, except Licensor represents and warrants that it has the legal right to license Licensee’s use of the Marks in accordance with this Agreement. In addition to any other available remedies, Licensees shall indemnify and hold harmless Licensor and its Affiliates, officers, directors, employees, agents, successors and assigns, including Sellers (the “ Indemnified Parties ”) from and against all third party suits, claims, losses, damages, and expenses, including court costs and reasonable attorney’s fees (the “ Claims ”) after the Closing Date arising out of or relating to (i) Licensees’ use of any Marks, (ii) Claims arising out of Licensees’ or their Affiliates' use of any Marks in violation of Article 2, or (iii) Licensor’s grant of the license under this Agreement; provided that no indemnification hereunder shall be available to the extent that Licensor did not own or have the legal right to license Licensee’s use of the Marks in accordance with this Agreement.

(b) Indemnification Procedure . Licensees (the “ Indemnifying Parties ”) agree to (a) defend, or at its option settle, any Claims against the Indemnified Parties as agreed to herein; and (b) pay any final judgment entered against the Indemnified Parties on such issue or any settlement thereof. The Indemnifying Parties shall not take any action, which unreasonably exposes the Indemnified Parties to a risk of damages, which would not be covered by such indemnity, and may not settle any matter without the prior written consent of Licensor.

4.	Equitable Relief.

Licensees acknowledge that (i) the Marks are valuable to Licensor, (ii) any breach of Article 2 by Licensees or their Affiliates will cause Licensor irreparable injury, and (iii) the remedies at law for such breach are inadequate and the resulting damages cannot readily be measured in monetary terms. Without limiting any of Licensor’s other rights and remedies, and notwithstanding anything in this Agreement to the contrary, in the event of any breach or threatened breach of Article 2 by Licensees or their Affiliates, Licensor may obtain and will be entitled to any temporary or permanent injunctive or other equitable relief that a court of competent jurisdiction deems proper (including an order restraining any threatened or future breach), on use of affidavit evidence or otherwise, and without furnishing proof of actual damages or posting a bond or other surety.

5.	Limitation of Liability.

To the fullest extent permitted by law, Licensor shall not be liable to Licensees for any consequential, incidental, indirect, exemplary, special or punitive damages whether arising out of breach of contract, tort (including negligence) or otherwise, regardless of whether such damage was foreseeable and whether or not Licensor has been advised of the possibility of such damages. In no event shall Licensor’s aggregate liability arising out of or related to this Agreement, whether arising out of or related to breach of contract, tort (including negligence) or otherwise, exceed $15,000, unless such liability is predicated on Licensor not owning or having the legal right to license Licensee’s use of the Marks in accordance with this Agreement.

6.	Protection of the Licensor Mark.

(a) Notification . Licensees shall immediately notify Licensor in writing giving reasonable detail of any actual, suspected or threatened: (1) infringement of the Marks; (2) opposition to the Marks; (3) claim that use of the Marks infringe the rights of any third party; or (4) other claim to which the Marks may be subject.

(b) Actions . With respect to any of the matters listed in Section 6(a) above: (1) Licensor shall decide, in its sole and absolute discretion, what action, if any, to take; (2) Licensor shall have exclusive control over all claims and proceedings; (3) Licensees shall provide Licensor with all assistance that Licensor may require in the conduct of any claims or proceedings; and (4) Licensor shall bear the cost of any proceedings and shall be entitled to retain all sums recovered in any action for its own account.

7.	Assignment.

Licensees shall not assign or otherwise transfer any of its rights, or delegate any of its obligations or performance, under this Agreement, in each case whether voluntarily, involuntarily, by operation of law or otherwise, without Licensor's prior written consent. No delegation or other transfer will relieve Licensees of any of its obligations or performance under this Agreement. Any purported assignment, delegation or transfer in violation of this Section 7 is void. Licensor may freely assign or otherwise transfer all or any of its rights, or delegate or otherwise transfer all or any of its obligations or performance, under this Agreement without Licensees’ consent. This Agreement is binding upon and inures to the benefit of the Parties and their respective successors and permitted assigns.

8.	Miscellaneous.

(a) Notices . All notices required to be furnished hereunder shall be given in the same manner and delivered at the same Party addresses as set forth in the APA.

(b) Survival . Any rights or obligations of the Parties, which, by their nature, should survive termination or expiration hereof will survive any such termination or expiration.

(c) Further Assurances . Each Party shall, upon the reasonable request, and at the sole cost and expense, of the other Party, promptly execute such documents and perform such acts as may be necessary to give full effect to the terms of this Agreement.

(d) Entire Agreement . This Agreement, together with any Exhibits and any other documents incorporated herein by reference, constitutes the sole and entire agreement of the Parties hereto with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter.

(e) Amendments; No Waiver . This Agreement may only be amended, modified or supplemented by a writing signed by each Party. No waiver by any Party of any provision hereof shall be effective unless explicitly set forth in writing and signed by the Party so waiving.

(f) Severability . If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

(g) Governing Law; Jurisdiction . This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without giving effect to any of its conflict of law provisions. Any legal proceeding arising out of or related to this Agreement shall be instituted exclusively in the United States District Court for the District of Delaware and/or the court in Wilmington, New Castle County, Delaware, and each Party irrevocably submits to the exclusive jurisdiction of such courts in any such proceeding.

(h) Counterparts . This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date written above.

	BROADVOX, LLC
	By_____________________ Name: Title: Company:

	FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.
	By_____________________ Name: Title: Company: FUSION BVX, LLC By_____________________ Name: Title: Company:

Exhibit 10.96

TRANSITION SERVICES AGREEMENT

by and among

BROADVOXGO!, LLC & CYPRESS COMMUNICATIONS, LLC

(“SELLERS”)

and

FUSION BVX LLC, F/K/A FUSION BROADVOX ACQUISTION CORP. AND FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

(“BUYERS”)

dated as of

December 31, 2013

A.TABLE OF CONTENTS

ARTICLE I SERVICES

Section 1.01 Provision of Services.

Section 1.02 Standard of Service.

Section 1.03 Third-Party Service Providers.

Section 1.04 Access to Premises.

ARTICLE II COMPENSATION

Section 2.01 Responsibility for Wages and Fees.

Section 2.02 Terms of Payment and Related Matters.

Section 2.03 Extension of Services.

Section 2.04 Terminated Services.

Section 2.05 Invoice Disputes.

Section 2.06 No Right of Setoff.

Section 2.07 Taxes.

ARTICLE III TERMINATION

Section 3.01 Termination of Agreement.

Section 3.02 Breach. 6

Section 3.03 Insolvency.

Section 3.04 Effect of Termination.

Section 3.05 Force Majeure.

ARTICLE IV CONFIDENTIALITY

Section 4.01 Confidentiality.

ARTICLE V LIMITATION OF LIABILITY

Section 5.01 Limitation on Liability.

ARTICLE VI MISCELLANEOUS

Section 6.01 Notices.

Section 6.02 Headings.

Section 6.03 Severability.

Section 6.04 Entire Agreement.

Section 6.05 Successors and Assigns.

Section 6.06 No Third-Party Beneficiaries.

Section 6.07 Amendment and Modification; Waiver.

Section 6.08 Governing Law; Submission to Jurisdiction.

Section 6.09 Waiver of Jury Trial.

Section 6.10 Counterparts.

TRANSITION SERVICES AGREEMENT

This Transition Services Agreement, dated as of December 31, 2013 (this "Agreement"), is entered into by and among BroadvoxGo!, LLC, a Delaware limited liability company (“ Broadvox ”) and Cypress Communications, LLC, a Delaware limited liability company, ("Cypress" and collectively with Broadvox, “ Sellers ”), and Fusion Telecommunications International, Inc., a Delaware corporation (“ Fusion ”) and Fusion BVX LLC, f/k/a Fusion Broadvox Acquisition Corp., a Delaware limited liability company ("FBVX" and collectively with Fusion, “ Buyers ”).

RECITALS

WHEREAS, Buyers and Sellers have entered into that certain Asset Purchase and Sale Agreement, dated as of August 30, 2013 (the "Purchase Agreement"), pursuant to which Sellers have agreed to sell to Buyers, and Buyers have agreed to purchase from Sellers, substantially all the assets, and certain specified liabilities, of the Business (as such term is defined in the Purchase Agreement), all as more fully described therein;

WHEREAS, in order to, among other things, ensure an orderly transition of the Business to Buyers and as a condition to consummating the transactions contemplated by the Purchase Agreement, Buyers and Sellers have agreed to enter into this Agreement, pursuant to which, among other things, Sellers will provide, or cause its Affiliates to provide, Buyers with certain services, in each case on a transitional basis and subject to the terms and conditions set forth herein; and

WHEREAS, capitalized terms used herein and not otherwise defined shall have the meaning ascribed to such terms in the Purchase Agreement.

NOW, THEREFORE, in consideration of the mutual agreements and covenants hereinafter set forth, Buyers and Sellers hereby agree as follows:

ARTICLE I.

SERVICES

Section 1.01 Provision of Services.

(a) The party providing any services (the “Providing Party”) agrees to use commercially reasonable efforts to provide, or to cause its Affiliates to provide, the services (the "Services") set forth on the exhibits attached hereto (as such exhibits may be amended or supplemented pursuant to the terms of this Agreement, collectively, the "Service Exhibits") to the party receiving the Services (the “Receiving Party”) for the respective periods and on the other terms and conditions set forth in this Agreement and in the respective Service Exhibits. As used throughout this Agreement and the Service Exhibits when describing the rights and obligations of the Providing Parties, the “Providing Parties” shall include the Providing Parties and their Affiliates.

(b) Notwithstanding the contents of the Service Exhibits, the Providing Parties agree to respond in good faith to any reasonable request by the Receiving Parties for access to any additional services that are necessary for the operation of the Business and which are not currently contemplated in the Service Exhibits, at a price to be agreed upon after good faith negotiations between the parties. Unless otherwise agreed to by the Receiving Parties and the Providing Parties, any such additional services so provided by the Providing Parties shall constitute Services under this Agreement and be subject in all respect to the provisions of this Agreement as if fully set forth on a Service Exhibit as of the date hereof.

(c) The parties hereto acknowledge the transitional nature of the Services. Accordingly, as promptly as practicable following the execution of this Agreement, the Receiving Parties agree to use best reasonable efforts to make a transition of each Service to its own internal organization or to obtain alternate third-party sources to provide the Services so that the Services are transitioned no later than the respective expiration dates in the Service Exhibits.

(d) In the event and to the extent that there is an inconsistency between the terms of the Agreement and the Service Exhibits, the Service Exhibits shall govern. In the event and to the extent that there is a conflict between the provisions of this Agreement and the provisions of the Purchase Agreement as it relates to the Services hereunder, the provisions of this Agreement shall control.

(e) The Receiving Parties agree that its use of the Providing Parties’ network and/or assets shall be governed by the Broadvox Acceptable Use Policy, a copy of which is located at www.broadvox.com/terms and incorporated herein by reference.

Section 1.02 Disclaimer of Warranties. Except as expressly set forth in any contract entered into hereunder, including in any Service Exhibit or attachment thereto, each party provides the Services on an as-is and where-is basis, using commercially reasonable efforts, and makes no representations and warranties of any kind, implied or expressed, with respect to the Services, including, without limitation, no warranties of merchantability or fitness for a particular purpose, which are specifically disclaimed. The Receiving Parties acknowledge and agree that this Agreement does not create a fiduciary relationship, partnership, joint venture or relationships of trust or agency between the parties and that all Services are provided by the Providing Parties as independent contractors. To further clarify the foregoing, wherever this Agreement or any exhibit states that the Providing Parties shall provide a particular service or function, or perform or fulfill a particular obligation, or make something available, the Providing Parties shall do so using commercially reasonable efforts, and shall neither guarantee nor insure any particular result.

Section 1.03 Third-Party Service Providers. It is understood and agreed that the Providing Parties have been retaining, and will continue to retain, third-party service providers to provide some of the Services to the Receiving Parties. In addition, the Providing Parties shall have the right to hire other third-party subcontractors to provide all or part of any Service hereunder. The Providing Parties shall in all cases retain responsibility for the provision to the Receiving Parties of Services to be performed by any third-party service provider or subcontractor or by the Receiving Party’s Affiliates. Notwithstanding the foregoing, (a) in all cases where a party changes its then-current practice from either (i) providing a service itself to providing it by a third party, or (ii) providing it by one third party to another third party, it shall promptly notify the other party of such change, and (b) the Providing Parties will disallow the new or continued Services of any of the Providing Parties of its third-party subcontractors upon a showing of reasonable cause and no undue hardship to the Providing Parties.

Section 1.04 Access to Premises. In order to enable the provision of the Services by the Providing Parties, the Receiving Parties agree that they shall provide to the Providing Parties and each of their Affiliates' employees and any third-party service providers or subcontractors who provide Services, at no cost to the Providing Parties, access to the facilities, assets and books and records of the Business, in all cases only to the extent necessary for the Providing Parties to fulfill each of its obligations under this Agreement. All third-party subcontractors shall at all times be under the direct supervision of a supervisory-level employee of the Providing Parties. The Providing Parties’ access to facilities of the Business shall at all times be subject to the approval and direction of the senior executive officer of the Receiving Parties then present at the facilities.

Section 1.05 Buyer End of Term Options . Notwithstanding anything contained herein to the contrary, in the event a Service Exhibit is silent as to the Term and/or Fees applicable to a specific Service, the Term shall be three (3) months after which, assuming the Providing Parties are no longer using the Service for their own purposes, the Receiving Parties shall elect to either (a) completely assume responsibility for providing the Service, including any and all costs associated therewith; or (b) completely transition off of the Service.

ARTICLE II.

COMPENSATION

Section 2.01 Responsibility for Wages and Fees. For such time as any employees of the Providing Parties or any of each of their Affiliates are providing the Services to the Receiving Parties under this Agreement, (a) such employees will remain employees of the Providing Parties or such Affiliates, as applicable, and shall not be deemed to be employees of the Receiving Parties for any purpose, (b) the Providing Parties or such Affiliates, as applicable, shall be solely responsible for the payment and provision of all wages, bonuses and commissions, employee benefits, including severance and worker's compensation, and the withholding and payment of applicable Taxes relating to such employment, and (c) the Providing Parties shall retain the sole and exclusive right to manage said employees, including but not limited to the ability and right to hire, terminate, promote, demote and/or discipline said employees.

Section 2.02 Terms of Payment and Related Matters.

(a) As consideration for provision of the Services, the Receiving Parties shall pay the Providing Parties the amount specified for each Service on such Service's respective Service Exhibit. For any costs incurred for services that are not already set forth in any Service Exhibit (e.g., remote hands for services provisioned for Fusion at a colocation facility), in the event that the Providing Parties or any of their Affiliates incur pre-approved (where possible) reasonable and documented expenses in the provision of any Service, including, without limitation payments to third-party service providers or subcontractors (such included expenses, collectively, "Additional Costs"), the Receiving Parties then shall reimburse the Providing Parties for all such Additional Costs in accordance with the invoicing procedures set forth in Section 2.02(b) .

(b) As more fully provided in the Service Exhibits and subject to the terms and conditions therein:

(i) the Providing Parties shall provide the Receiving Parties, in accordance with Section 6.01 of this Agreement, with monthly invoices on the first of each month ("Invoices"), which shall set forth in reasonable detail, for each service covered by a Service Exhibit, with such supporting documentation as the Receiving Parties may reasonably request with respect to Out-of-Pocket Costs, amounts payable under this Agreement; and

(ii) payments pursuant to this Agreement shall be made within fifteen (15) business days after the date of receipt of an Invoice by the Receiving Parties from the Providing Parties.

(c) The Providing Parties reserve the right to charge interest on any amount not paid by the Receiving Parties by the due dates set forth herein that is not being contested by the Receiving Parties in good faith at a rate of one and one-half percent per month, or the maximum amount allowed by law, whichever is greater. Such interest shall accrue from the original Invoice due date through the date payment is made.

Section 2.03 Extension of Services. The parties agree that the Providing Parties shall not be obligated to perform any Service after the applicable End Date; provided , however , that if the Receiving Parties desire and the Providing Parties agree to continue to perform any of the Services after the applicable End Date, the parties shall negotiate in good faith to determine an amount that compensates the Providing Parties for all of its costs for such performance, including the time of its employees and its Additional Costs. The Services so performed by the Providing Parties after the applicable End Date shall continue to constitute Services under this Agreement and be subject in all respects to the provisions of this Agreement for the duration of the agreed-upon extension period.

Section 2.04 Terminated Services. Upon termination or expiration of any or all Services pursuant to this Agreement, or upon the termination of this Agreement in its entirety, the Providing Parties shall have no further obligation to provide the applicable terminated Services and the Receiving Parties will have no obligation to pay any future compensation or out-of-pocket costs relating to such Services (other than for or in respect of Services already provided in accordance with the terms of this Agreement and received by Buyer prior to such termination), or Services provided by the Providing Parties at the Receiving Parties’ request after such termination.

Section 2.05 Invoice Disputes. In the event of an invoice dispute, the Receiving Parties shall deliver a written statement to the Providing Parties no later than sixty (60) days of the Receiving Parties’ receipt of a complete Invoice listing all disputed items and providing a reasonably detailed description of each disputed item. Amounts not so disputed shall be deemed accepted and shall be paid, notwithstanding disputes on other items, within the period set forth in Section 2.02(b) . The parties shall seek to resolve all such disputes expeditiously and in good faith and agree to do so in accordance with Section 10.8 of the Purchase Agreement. All undisputed portions of invoices shall be paid notwithstanding any dispute.

Section 2.06 No Right of Setoff. Each of the parties hereby acknowledges that it shall have no right under this Agreement to offset any amounts owed (or to become due and owing) to the other party, whether under this Agreement, the Purchase Agreement or otherwise, against any other amount owed (or to become due and owing) to it by the other party.

Section 2.07 Taxes. The Receiving Parties shall be responsible for all sales or use Taxes imposed or assessed as a result of the provision of Services by the Providing Parties.

ARTICLE III. TERMINATION

Section 3.01 Termination of Agreement. Subject to Section 3.04 , this Agreement shall terminate in its entirety (i) on the date upon which the Providing Parties shall have no continuing obligation to perform any Services as a result of each of their expiration or termination in accordance with Section 3.02 or (ii) in accordance with Section 3.03 .

Section 3.02 Breach. Except as otherwise set forth in a Service Exhibit, any party (the "Non-Breaching Party") may terminate this Agreement with respect to any Service, in whole but not in part, at any time upon prior written notice to the other party (the "Breaching Party") if the Breaching Party has failed (other than pursuant to Section 3.05 ) to perform any of its material obligations under this Agreement relating to such Service, and such failure shall have continued without cure for a period of thirty (30) days (ten (10) days for non-payment by the Receiving Parties, provided that the Receiving Parties shall not be entitled to cure a non-payment breach more than twice in any six month period) after receipt by the Breaching Party of a written notice of such failure from the Non-Breaching Party seeking to terminate such service. For the avoidance of doubt, non-payment by the Receiving Parties for a Service provided by the Providing Parties in accordance with this Agreement and not the subject of a good-faith dispute shall be deemed a breach for purposes of this Section 3.02 .

Section 3.03 Insolvency. In the event that either party hereto shall (i) file a petition in bankruptcy, (ii) become or be declared insolvent, or become the subject of any proceedings (not dismissed within sixty (60) days) related to its liquidation, insolvency or the appointment of a receiver, (iii) make an assignment on behalf of all or substantially all of its creditors, or (iv) take any corporate action for its winding up or dissolution, then the other party shall have the right to terminate this Agreement by providing written notice in accordance with Section 6.01 .

Section 3.04 Effect of Termination. Upon termination of this Agreement in its entirety pursuant to Section 3.01 , all obligations of the parties hereto shall terminate, except for the provisions of Section 2.04 , Section 2.06 , Section 2.07 , Article IV , Article V and Article VI , which shall survive any termination or expiration of this Agreement.

Section 3.05 Force Majeure. The obligations of the Providing Parties under this Agreement with respect to any Service shall be suspended during the period and to the extent that the Providing Parties are prevented or hindered from providing such Service, or the Receiving Parties are prevented or hindered from receiving such Service, due to any of the following causes beyond such party's reasonable control (such causes, "Force Majeure Events"): (i) acts of God, (ii) flood, fire or explosion, (iii) war, invasion, riot or other civil unrest, (iv) Governmental Order or Law, (v) actions, embargoes or blockades in effect on or after the date of this Agreement, (vi) action by any Governmental Entity, (vii) national or regional emergency, (viii) strikes, labor stoppages or slowdowns or other industrial disturbances, (ix) shortage of adequate power or transportation facilities, or (x) any other similar event which is beyond the reasonable control of such party. The party suffering a Force Majeure Event shall give notice of suspension as soon as reasonably practicable to the other party stating the date and extent of such suspension and the cause thereof, and the Providing Parties shall resume the performance of each of its obligations as soon as reasonably practicable after the removal of the cause. Neither the Receiving Parties nor the Providing Parties shall be liable for the nonperformance or delay in performance of its respective obligations under this Agreement when such failure is due to a Force Majeure Event. The applicable End Date for any Service so suspended shall be automatically extended for a period of time equal to the time lost by reason of the suspension.

ARTICLE IV.

CONFIDENTIALITY

Section 4.01 Confidentiality.

(a) During the term of this Agreement and thereafter, the parties hereto shall, and shall instruct, and take reasonable precautions to ensure that, they and their respective officers, directors, managers, members, shareholders, employees, agents, third-party contractors and other representatives (collectively, “Representatives”) to, maintain in confidence and not disclose the other party's financial, technical, sales, marketing, development, personnel, and other information, records, or data, including, without limitation, customer lists, supplier lists, trade secrets, designs, product formulations, product specifications or any other proprietary or confidential information, however recorded or preserved, whether written or oral (any such information, "Confidential Information"). This Agreement and all exhibits and annexes attached hereto, and the parties’ non-public performance thereof, shall be deemed Confidential Information. Each party hereto shall use the same degree of care, but no less than reasonable care, to protect the other party's Confidential Information as it uses to protect its own Confidential Information of like nature. Unless otherwise authorized in any other agreement between the parties, any party receiving any Confidential Information of the other party (the "Receiving Party") may use Confidential Information only for the purposes of fulfilling its obligations under this Agreement (the "Permitted Purpose"). Any Receiving Party may disclose such Confidential Information only to its Representatives who have a need to know such information for the Permitted Purpose and who have been advised of the terms of this Section 4.01 and the Receiving Party shall be liable for any breach of these confidentiality provisions by such Persons; provided , however , that any Receiving Party may disclose such Confidential Information to the extent such Confidential Information is required to be disclosed by an order issued by, or a rule or regulation of, a Governmental Entity (“ Governmental Order ”), and, in the case of an order issued by a Governmental Entity, the Receiving Party shall promptly notify, to the extent possible, the disclosing party (the "Disclosing Party"), and take reasonable steps to assist in contesting such Governmental Order or in protecting the Disclosing Party's rights prior to disclosure, and in which case the Receiving Party shall only disclose such Confidential Information that it is advised by its counsel in writing that it is legally bound to disclose under such Governmental Order.

(b) Notwithstanding the foregoing, "Confidential Information" shall not include any information that the Receiving Party can demonstrate: (i) was publicly known at the time of disclosure to it, or has become publicly known through no act of the Receiving Party or its Representatives in breach of this Section 4.01 ; (ii) was rightfully received from a third party without a duty of confidentiality; or (iii) was developed by it independently without any reliance on the Confidential Information.

(c) Within five (5) days written demand by the Disclosing Party at any time, or upon expiration or termination of this Agreement with respect to any Service, the Receiving Party agrees promptly to return or destroy, at the Disclosing Party's option, all Confidential Information. If such Confidential Information is destroyed, an authorized officer of the Receiving Party shall certify to such destruction in writing.

ARTICLE V.

LIMITATION OF LIABILITY; INDEMNIFICATION

Section 5.01 Limitation on Liability. In no event shall the Providing Parties have any liability under any provision of this Agreement for any punitive, incidental, consequential, special or indirect damages, including loss of future revenue or income, loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement, or diminution of value or any damages based on any type of multiple, whether based on statute, contract, tort or otherwise, and whether or not arising from the other party's sole, joint, or concurrent negligence, strict liability, criminal liability or other fault; except insofar as liability is predicated on the Providing Parties’ gross negligence or willful misconduct. The Receiving Parties acknowledge that the Services to be provided to it hereunder are subject to, and that its remedies under this Agreement are limited by, the applicable provisions of Section 1.02 , including the limitations on representations and warranties with respect to the Services. In no event shall the Providing Parties’ aggregate liability for direct damages to the Receiving Party that arise out of or are related to this Agreement, whether arising out of or related to breach of contract, tort (including negligence) or otherwise, exceed $25,000; except insofar as liability is predicated on the Providing Parties’ gross negligence or willful misconduct.

ARTICLE VI.

MISCELLANEOUS

Section 6.01 Notices. All Invoices, notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third (3 rd ) day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 6.02 ):

(a)	if to Broadvox:

BroadvoxGo!, LLC

75 Erieview Plaza, Suite 400

Cleveland, OH 44114

Facsimile: (216) 373-4812

E-mail: atemnorod@broadvox.com

Attention: Andre Temnorod, CEO

with a copy to:

Alex Gertsburg, Esq.

36 South Franklin St.

Chagrin Falls, OH 44022

Facsimile: (216) 373-4812

E-mail: ag@gertsburglaw.com

Attention: Alex Gertsburg, Esq.

(b)	if to Cypress:

Cypress Communications, LLC

75 Erieview Plaza, Suite 400

Cleveland, OH 44114

Facsimile: (216) 373-4652

E-mail: eblumin@broadvox.com

Attention: Eugene Blumin, COO

with a copy to:

Alex Gertsburg, Esq.

36 South Franklin St.

Chagrin Falls, OH 44022

Facsimile: (216) 373-4812

E-mail: ag@gertsburg.com

Attention: Alex Gertsburg, Esq.

(c)	if to Fusion

Fusion Telecommunications International, Inc.

420 Lexington Avenue, Suite 1718

New York, NY 10170

Facsimile: (212) 972-7884

E-mail: dhutchins@fusiontel.com

Attention: Don Hutchins, President

with a copy to:

Steven I. Weinberger, P.A.

1200 N. Federal Highway, Suite 200

Boca Raton, FL 33432

Facsimile: (888) 825-6417

E-mail: steve@southfloridacorporatelaw.com

Attention: Steven Weinberger, Esq.

(d)	if to FBVX:

Fusion BVX, LLC

420 Lexington Avenue, Suite 1718

New York, NY 10170

Facsimile: (212) 972-7884

E-mail: dhutchins@fusiontel.com

Attention: Don Hutchins, President

with a copy to:

Steven I. Weinberger, P.A.

1200 N. Federal Highway, Suite 200

Boca Raton, FL 33432

Facsimile: (888) 825-6417

E-mail: steve@southfloridacorporatelaw.com

Attention: Steven Weinberger, Esq.

Section 6.02 Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

Section 6.03 Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto 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 greatest extent possible.

Section 6.04 Entire Agreement. This Agreement, including all Service Exhibits, constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter.

Section 6.05 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Subject to the following sentence, neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing sentence, either party may, without the prior written consent of the other party, assign all or any portion of its rights or obligations hereunder to any of its Affiliates that participate in the operation of the Business or the provision of services thereto, as the case may be; provided , that in the case of the Receiving Parties’ Affiliates, such Affiliate shall receive such Services from the Providing Parties in the same place and manner as described in the respective Service Exhibit as the Receiving Parties would have received such Service. Other than where consent is granted or deemed granted under this Section 6.05, no assignment shall relieve the assigning party of any of its obligations hereunder.

Section 6.06 No Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Agreement.

Section 6.07 Amendment and Modification; Waiver. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

Section 6.08 Dispute Resolution; Governing Law; Submission to Jurisdiction.

(a) On or before the Closing Date, the Providing Parties will provide to the Receiving Parties a written escalation contact list and associated escalation procedures (together, the “ Escalation Procedures ”). The Escalation Procedures will be designed to allow the rapid escalation and resolution of any “Service Affecting Issue” (as hereinafter defined) experienced by the Receiving Parties in their use (or their customers’ use) of the network and services provided hereunder, and the Providing Parties will utilize reasonable commercial efforts to assure the resolution of any Service Affecting Issue within a period of twelve (12) hours (the “Escalation Period”) or less from the time such Service Affecting Issue is reported by the Receiving Parties to the Providing Parties. In the event that any Service Affecting Issue is not resolved to the reasonable satisfaction of the Providing Parties within the Escalation Period, then the Receiving Parties may immediately resort to any equitable remedies to which they are entitled under Delaware law as described in Section 6.08(c), without regard to the provisions of Section 6.08(b). For the purposes of this Section 6.08, a Service Affecting Issue will be defined as a degradation of the service(s) provided by the Providing Parties to the Receiving Parties that results in (i) a network outage affecting at one time five percent (5%) or more of the Providing Parties’ network facilities used by the Receiving Parties, (ii) multiple customer outages affecting at one time five percent (5%) or more of the Receiving Parties’ customers, or (iii) any other outage condition or significant degradation of service affecting at one time five percent (5%) or more of the Receiving Parties’ customers and rendering the service delivered to those customers commercially unusable.

(b) Dispute Resolution . If at any time there is a dispute between the parties regarding this Agreement and performance hereunder, and such dispute cannot be resolved pursuant to Subsection (a) above, the parties agree that they will within ten (10) days following receipt of written notice of a dispute, engage in face-to-face negotiations in an attempt to resolve the dispute and shall, upon failing to negotiate a resolution, choose a mutually agreeable third party neutral, who shall mediate the dispute between the parties. Mediation shall be non-binding and shall be confidential. The parties shall refrain from court and arbitration proceedings during the mediation process insofar as they can do so without prejudicing their legal rights. The parties shall participate in good faith in accordance with the recommendations of the mediator and shall follow the procedures for mediation as suggested by the mediator. All expenses of mediation except expenses of the individual parties, shall be shared equally by the parties. Each party shall be represented in the mediation by a person with authority to settle the dispute. If the parties are unable to resolve the dispute in good faith within six (6) months of the date of the initial demand by either party for such fact finding shall be finally determined in accordance with the procedures set forth in Section 6.09(c) below.

(c) Governing Law; Jurisdiction . This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of Laws of any jurisdiction other than those of the State of Delaware. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in the federal courts of the United States of America or the courts of the State of Delaware in each case located in the city of Wilmington and county of New Castle and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Service of process, summons, notice or other document by mail to such party's address set forth herein shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Notwithstanding the foregoing, either party may seek equitable relief in any appropriate court of competent jurisdiction to enjoin violations or threatened violations, or compel specific performance of breaches or threatened breaches, of this Agreement for which there is no adequate remedy at law.

Section 6.09 Waiver of Jury Trial. Each party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this agreement or the transactions contemplated hereby. Each party to this agreement certifies and acknowledges that (a) no representative of any other party has represented, expressly or otherwise, that such other party would not seek to enforce the foregoing waiver in the event of a legal action, (b) such party has considered the implications of this waiver, (c) such party makes this waiver voluntarily, and (d) such party has been induced to enter into this agreement by, among other things, the mutual waivers and certifications in this Section 6.09 .

Section 6.10 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

[SIGNATURE PAGE FOLLOWS]

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

	BUYERS: Fusion Telecommunications International, Inc.
	By /s/ Gordon Hutchins, Jr. Name: Gordon Hutchins, Jr. Title: President Fusion BVX LLC By /s/ Gordon Hutchins, Jr. Name: Gordon Hutchins, Jr. Title: President

	SELLERS BroadvoxGo!, LLC
	By /s/ Andre Temnorod Name: Andre Temnorod Title: CEO Cypress Communications, LLC By /s/ Eugene Blumin Name: Eugene Blumin Title: President

TRANSITION SERVICES AGREEMENT

INDEX TO EXHIBITS

Exhibit A – Referral Agent Services

Schedule 1 to Exhibit A

Referral Independent Contract Agreement

Referral Agreement Commissions for Non-Usage

Referral agreement Commissions for Usage

Exhibit B – Residual Commissioned Agent Service

Schedule 1 to Exhibit B

Sales Independent Contractor Agreement

Sales Agreement Exhibit B Attachment

Exhibit C – Master Service Agreement for Ongoing VoIP / Wholesale Services

Exhibit D – Field Installment Technician’s Services

Exhibit E – IT Consulting Services – Overseas Consultants

Exhibit F – Network Services / Agreements

Exhibit G – Finance and Accounting Systems

Schedule 1 to Exhibit G – Billing Services (IBS)

Schedule 2 to Exhibit G – Business Records / Shared Documents Services & Drives / Finance Working Files Services

Schedule 3 to Exhibit G – Cash and Collections Processing Services (MBoss)

Schedule 4 to Exhibit G – Customer Portal Services (COSMOS)

Schedule 5 to Exhibit G – Workflow / Customer Portal Services (Connexion, RT & Sugar)

Schedule 6 to Exhibit G – Razorsight, SAGE and FAS

Schedule 7 to Exhibit G – CDRs

Schedule 8 to Exhibit G – Payroll Processing for Transferred Employees

Exhibit H – Real Property / Office Facility Services

Exhibit I – Use of “Broadvox” Name

Exhibit J – Web Hosting Services

Exhibit K – E-Mail Services

Exhibit L – Network Monitoring (Monolith)

Exhibit M – IP Addresses

Exhibit N – License Agreements (Microsoft Licenses)

Exhibit O – Telephone Numbers

Exhibit P – DNS Names (broadvox.net subdomains)

Exhibit Q – Microsoft Active Directory (User Account Authentication)

Exhibit R – Fusion Broadsoft Services to Broadvox

Exhibit S – Provisioning of E911 Services

Exhibit T - Provision of Regulated Telecommunications Services and Agreement to Act as Billing Agent