TRANSITION SERVICES AGREEMENT by and among FUSION CONNECT, INC. (f/k/a Fusion Telecommunications International, Inc. and LINGO MANAGEMENT, LLC dated as of May 4, 2018 TRANSITION SERVICES AGREEMENT
by and
among
(f/k/a Fusion Telecommunications International, Inc.
and
LINGO MANAGEMENT, LLC
dated
as of
May
4, 2018
This
Transition Services Agreement (this "Agreement"),
dated as of May 4, 2018, is entered into by and between
Fusion Connect, Inc. (f/k/a Fusion
Telecommunications International, Inc.), a Delaware
corporation with its principal place of business at 000 Xxxxxxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000 (“Fusion”) and Lingo Management, LLC, a Georgia limited
liability company with its principal place of business at 0000
Xxxxxxxxx Xxxx XX, Xxxxx 0000, Xxxxxxx, XX 00000
(“Lingo”). Each of Fusion
and Lingo may be referred to herein individually as a
“Party”
and collectively as the “Parties.”
RECITALS
WHEREAS, Fusion, Fusion BCHI
Acquisition, LLC (“Merger Sub”), and Birch
Holdings, Inc. (“Birch Holdings”) have
entered into that certain Agreement and Plan of Merger, dated
August 26, 2017, as amended (the “Merger Agreement”), under
the terms of which Merger Sub will merge with and into Birch
Holdings, with Merger Sub being the survivor of that merger (the
“Merger”);
WHEREAS, one of the conditions to
closing the Merger is the requirement that Birch Communications,
LLC (“Birch”), a wholly-owned
subsidiary of Birch Holdings, spin-off to the existing shareholders
of Birch Holdings, the Consumer/SMB Business; and
WHEREAS, in order to facilitate the
transition of the Consumer/SMB Business to Lingo as well as to
facilitate the transfer of the remaining business of Birch to
Fusion (the “Birch
Business/Cloud Business”), the Parties have agreed to
provide the other Party with certain services, including
administrative and support services, until such time as any
remaining state approvals (as defined) are obtained, network
facilities and other assets have been appropriately transferred,
and the Parties can operate their respective businesses without the
need for the services specified contemplated by this Agreement
(collectively “Services”);
and
WHEREAS, capitalized terms used herein
and not otherwise defined shall have the meaning ascribed to such
terms in the Merger Agreement.
NOW, THEREFORE, in consideration of the
mutual agreements and covenants hereinafter set forth, the Parties
hereby agree as follows:
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ARTICLE
I.
SERVICES;
SYSTEM MAINTENANCE; END USERS
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
one or more of its subsidiaries to provide, 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
Schedules") 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 Schedules. As used in this Agreement and the
Service Schedules when describing the rights and obligations of the
Providing Parties, the “Providing Parties” shall
include the Providing Parties and its subsidiaries.
(b) Notwithstanding the
contents of the Service Schedules, 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 their business and which are not currently
contemplated in the Service Schedules, at a price to be agreed upon
after good faith negotiations between the Parties. Unless otherwise
agreed to by the 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 Schedule as of the
date hereof.
(c) The Providing Party
shall ensure that all personnel who provide Services hereunder on
its behalf have appropriate professional, technical, and skills,
training, and experience to enable them to perform their duties in
an efficient manner. Each Providing Party shall make commercially
reasonable efforts to provide sufficient staffing to enable the
Services to be performed in accordance with this Agreement and
shall reasonably maintain the continuity of the personnel assigned
to perform the Services hereunder. Any replacement personnel shall
have substantially equivalent or better qualifications than the
personnel being replaced.
(d) The Parties
acknowledge the transitional nature of the Services. Accordingly,
as promptly as practicable following the execution of this
Agreement, the Receiving Parties agree to use commercially
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
Schedules.
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(e) In the event and to
the extent that there is an inconsistency between the terms of this
Agreement and the Service Schedules, the Service Schedules shall
govern.
Section 1.02 Standard of
Service. The Providing Party represents, warrants and agrees with the Receiving
Party that the Services shall be provided in a professional and
workmanlike manner with promptness and diligence in accordance with
the requirements of this Agreement and applicable law and, except
as specifically provided in the Service Schedules, in a manner
generally consistent with the historical provision of the Services
and with at least the same standard of care as historically
provided in connection with its business.
Section 1.03 Disclaimer of
Warranties. Except as expressly
contemplated by Section 1.02 or set forth in any contract entered
into hereunder, including in any Service Schedules 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, WHETHER EXPRESS, IMPLIED OR
STATUTORY, AS TO THE DESCRIPTION, QUALITY, MERCHANTABILITY,
COMPLETENESS OR FITNESS FOR ANY PURPOSE, OF ANY SERVICE PROVIDED
HEREUNDER OR DESCRIBED HEREIN, OR AS TO ANY OTHER MATTER, ALL OF
WHICH WARRANTIES BY EACH PARTY ARE HEREBY EXCLUDED AND
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
schedule 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 1.04 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 subsidiaries. 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
through 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.
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Section 1.05 Extension of Services.
The Parties agree that the Providing
Parties shall not be obligated to perform any Service after the
applicable end date (the “End
Date”) specified for that
Service in the applicable Service Schedule; 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 its on-going provision of such Services. 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 1.06 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 the
Receiving Parties prior to such termination), or Services provided
by the Providing Parties at the Receiving Parties’ request
after such termination.
Section 1.07
(a) Access to Premises and
Assets. In order to enable the
provision of the Services by the Providing Parties, the Receiving
Parties agree that for a period of six (6) months after the
execution of this Agreement, that they shall provide to the
Providing Parties and each of their subsidiaries' employees and any
third-party service providers or subcontractors who provide
Services, at no cost to the Providing Parties, access to the
facilities in all cases only upon prior written notice during
normal business hours to the extent necessary for the Providing
Parties to fulfill each of its obligations under this Agreement.
Notwithstanding the above, prior written notice shall not be
required for the Providing Party to grant access to those employees
of the Receiving Party who work on a day to day basis in the
Providing Party’s premise during normal business hours. 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
other Party 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. The Parties agree that the
Providing Parties will indemnify, defend and hold harmless, the
Receiving Parties for any third party claims resulting from bodily
injury or property damage incurred by the Receiving Parties
employees, third party service providers or subcontractors who are
granted access to the premises of the Providing
Party
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(b) Access to Books and
Records. In order to enable the
provision of the Services by the Providing Parties, the Receiving
Parties agree that for a period of thirty six (36) months after
execution of this Agreement, they shall provide to the Providing
Parties and each of their respective subsidiaries' employees and
any third-party service providers or subcontractors retained by
such Party to review billing matters on its behalf, at no cost to
the Providing Parties, access to the books and records of the other
Party relevant to the Services in question along with the
underlying details and invoices for the Services provided by the
Providing Party pursuant this Agreement.
Section 1.08 System
Maintenance. In the event that
a Providing Party determines that it is necessary to interrupt
Services or that there is a potential for Services to be
interrupted for the performance of system maintenance
(“Planned Interruption”), the Providing Party will use
good-faith efforts to notify the Receiving Party prior to the
performance of such maintenance and will schedule such maintenance
during non-peak hours (midnight to 6 a.m. local time). In no event
shall the Planned Interruption for system maintenance constitute a
failure of performance by the Providing Party.
ARTICLE II.
COMPENSATION
Section 2.01 Responsibility for Wages and
Fees. Except as otherwise
contemplated in a schedule to this Agreement, for such time as any employees of the Providing
Parties or any of its subsidiaries are providing the Services to
the Receiving Parties under this Agreement, (a) such employees will
remain employees of the Providing Parties or such subsidiaries, as
applicable, and shall not be deemed to be employees of the
Receiving Parties for any purpose, (b) the Providing Parties or
such subsidiaries, 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 Schedule. For any costs incurred for
Services that are not already set forth in any Service Schedule, in
the event that the Providing Parties or any of their subsidiaries
incur pre-approved (where possible) reasonable and documented
expenses necessary to provide any Service, including, without
limitation payments to third-party service providers or
subcontractors retained in accordance with Section 1.04 (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).
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(b) As more fully provided in the Service
Schedules and subject to the terms and conditions
therein:
(i) the Providing
Parties shall provide, no later than ten (10) days after the end of
each calendar month, the Receiving Parties, in accordance with
Section 6.01
of this Agreement, with monthly invoices dated the first of each
month ("Invoices"),
which shall set forth in reasonable detail, for each Service
covered by a Service Schedule, with such supporting documentation
as the Receiving Parties may reasonably request with respect to any
out-of-pocket costs incurred on behalf of the other Party, amounts
payable under this Agreement; and
(ii) unless
otherwise provided for in the schedules hereto, payments pursuant
to this Agreement shall be made within thirty (30) days of the date
of an Invoice.
(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 (1-1/2%) per month. Such interest
shall accrue from the thirty-first (31th) day after the
original Invoice due date through the date payment is
made.
Section 2.03 Invoice Disputes.
The Receiving Party may raise a good faith dispute
with respect to an Invoice by delivering a written statement to the
Providing Party within ninety (90) days of the Receiving
Party’s receipt of the applicable Invoice. To be valid, the
required written statement must include a reasonably detailed
description of each disputed item. Amounts not disputed within such
ninety (90) day period shall be deemed accepted. In the event that
the Receiving Party raises a good faith dispute prior to the due
date of the applicable Invoice and submits the required written
statement, the Receiving Party may withhold the disputed amount
from the applicable Invoice payment and pay solely the undisputed
balance The Parties shall seek to resolve all such disputes
expeditiously and in good faith. Parties shall seek to resolve all
such disputes expeditiously and in good faith. All undisputed
portions of invoices shall be paid notwithstanding any dispute. Any
disputed amounts resolved in favor of a disputing Party shall be
credited to that Party’s account on the next Invoice
following resolution of the dispute. Any dispute arising out of or
relating to this Agreement that has not been resolved by the
good-faith efforts of the Parties shall be settled pursuant
to Section 2.04
of this Agreement.
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Section 2.04 Mandatory Arbitration of
Disputes. ANY BILLING DISPUTE OF ANY KIND
BETWEEN THE PARTIES, WILL BE RESOLVED BY FINAL AND BINDING
ARBITRATION AS PRESCRIBED IN THIS SECTION. THE FEDERAL ARBITRATION
ACT, NOT STATE LAW, WILL GOVERN THIS PROCESS. The arbitration will be conducted by and under
the then-applicable commercial arbitration rules of the American
Arbitration Association (“AAA”) through the AAA Case Management Center
located in Washington, DC or other location as may be mutually
agreed by Parties. A single neutral arbitrator engaged in the
practice of law will conduct the arbitration. The arbitrator will
be selected according to the rules of the AAA or, alternatively,
may be selected by agreement of the Parties, who will cooperate in
good faith to select the arbitrator. All expedited procedures
prescribed by the applicable rules will apply. All required fees
and costs will be paid equally by the Parties as set forth in the
AAA commercial arbitration rules. The arbitrator’s decision
and award will be final and binding, and judgment on the award
rendered by the arbitrator may be entered in any court with
jurisdiction. No dispute may be joined with another lawsuit,
claim, dispute, or arbitration brought by any other person. The
arbitrator may not award punitive damages. If any Party files a
judicial or administrative action to resolve a billing dispute
without first complying with the provisions of this Section and
another Party successfully stays such action and/or compels
arbitration, the Party filing that judicial or administrative
action must pay the other Party’s costs and expenses incurred
in seeking such stay and/or compelling arbitration, including
attorney’s fees.
Section 2.05 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, or otherwise, against any
other amount owed (or to become due and owing) to it by the other
Party.
Section 2.06 Taxes. The Receiving Parties shall be responsible for all
fees, taxes or surcharges properly assessed by regulatory or
Governmental Entities on the Services or amounts due or payable
under this Agreement (excluding taxes on the Providing
Party’s net income), including but not limited to gross
receipts taxes, surcharges, franchise fees, business licenses,
occupational, excise, universal service fund, and other taxes (and
penalties and interest thereon), which shall be passed through to
the Receiving Party. Upon written request, the Providing Party will
furnish documentation to support the fees or charges payable by the
Receiving Party pursuant to this Section.
Section 2.07 Additional
Assurances. If at any time
during the term of this Agreement there is a material and adverse
change in a Party’s financial condition, business prospects
or payment history, the invoicing Party may demand a security
deposit or increase the amount of the Security Deposit, as the case
may be, as security for the full and faithful performance of the
terms, conditions, and covenants of this Agreement;
provided,
however, in no event shall the
amount of the security deposit exceed 45 days’ estimated or
actual usage charges, monthly recurring charges, and/or other
amounts payable by the Receiving Party to the Providing Party
hereunder.
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ARTICLE III.
LIMITATION
OF LIABILITY; INDEMNIFICATION
Section 3.01 Limitation on Liability.
NOTWITHSTANDING ANY OTHER PROVISION HEREOF, NEITHER PARTY SHALL BE
LIABLE TO THE OTHER PARTY OR ANY THIRD PARTY FOR ANY INDIRECT,
CONSEQUENTIAL, INCIDENTAL, RELIANCE, SPECIAL, EXEMPLARY OR PUNITIVE
DAMAGES (INCLUDING BUT NOT LIMITED TO DAMAGES FOR LOST PROFITS,
LOST REVENUES, LOSS OF BUSINESS REPUTATION OR OPPORTUNITY, )
ARISING OUT OF OR RELATING TO A BREACH OF THIS AGREEMENT
AND 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
.. FURTHERMORE, IN NO EVENT SHALL
EITHER PARTY BE LIABLE TO THE OTHER, EITHER IN CONTRACT OR IN TORT,
FOR PROTECTION FROM UNAUTHORIZED ACCESS TO OR ALTERATION, THEFT OR
DESTRUCTION OF CUSTOMER DATA FILES NOT CONTROLLED BY THE OTHER
PARTY. 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 $10,000.00; except
insofar as liability is predicated on the Providing Parties’
gross negligence or willful misconduct.
Section 3.02 Indemnity. Each Party hereby agrees to defend, indemnify
and hold the other Party and its Representatives, from and against
any and all losses, liabilities, claims, litigation, damages,
penalties, actions, demands and expenses incurred by such Party and
arising out of this Agreement to the extent attributable solely to:
(i) the gross negligence or wilful misconduct of such Party, (ii)
the performance or non-performance of such Party’s
obligations under this Agreement, or (iii) the negligence of such
Party in its performance or non-performance of its obligations
under this Agreement. This obligation to indemnify shall include
reasonable attorneys’ fees and investigation costs and all
other reasonable costs, expenses and liabilities incurred by a
Party or its counsel from the first notice that any claim or demand
is to be made or may be made.
Section 3.03 Indemnification
Procedures. The Party seeking
indemnification under this Section must: (a) promptly notify the
other Party in writing of any claim, and in connection with third
party claims: (a) give the indemnifying Party full and complete
authority to resolve the matter, and (b) provide information and
assistance for the claim’s defense; provided
further, in the event of third
party claims, the indemnifying Party will retain the right, at its
option, to settle or defend the claim, at its own expense and with
its own counsel and will have the right, at its option, to
participate in the settlement or defense of the claim, with its own
counsel and at its own expense, but the indemnifying Party will
retain sole control of the claim’s settlement or defense. To
be indemnified under this Section, the Party seeking
indemnification must not by any act, including any admission or
acknowledgement, materially impair or compromise a claim’s
defence.
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Section 3.04 Survival. The indemnification obligations and covenants of
this Article III
shall survive the termination of this
Agreement provided that the indemnified Person provides notice to
the indemnifying Party of any claim for indemnification under this
Agreement in writing setting forth the specific claim and the basis
therefore in reasonable detail prior to the six (6) month
anniversary of such date of termination.
Section 3.05 Special Indemnity –
Shared Agreements. Each Party
recognizes that there are instances in which both Parties and/or
their respective subsidiaries or affiliates are utilizing shared
services performed by a third party provider. The Parties
acknowledge that in these instances each Party is obligated to pay
the portion of the invoice for the services procured by such Party
from the third party provider under the respective agreement. If a
Party fails to pay its portion of the invoice (whether to the third
party provider or other Party receiving the shared service) by the
invoice due date, such Party shall be required to indemnify the
other Party for any amounts paid by the other Party on the
nonpaying Party’s behalf. The Parties agree that all
indemnity obligations shall be satisfied within five (5) days of
receipt of written demand for payment with all payments being made
via electronic transfer of available funds. Nothing in this Section
3.05 shall prevent a Party from reserving its rights to dispute any
invoice or payment.
ARTICLE
IV.
TERMINATION
Section 4.01 Termination of this
Agreement. Subject to
Section
4.04, 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
4.02, or (ii) in accordance with Section
4.02.
Section 4.02 Breach. Except as otherwise set forth in a Service
Schedule, 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
4.05) 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 once) 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 that is not the subject of a good-faith dispute shall be
deemed a breach for purposes of this Section
4.02.
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Section 4.03 Insolvency. In the event that either Party or one or more of
its subsidiaries 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 4.04 Effect of Termination.
Upon termination of this Agreement in
its entirety pursuant to Section
4.01, all obligations of the
Parties shall terminate, except for the provisions of
Article
III, Article
V and VI and Section
3.05, which shall survive any
termination or expiration of this Agreement.
Section 4.05 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.
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CONFIDENTIALITY;
DATA PROTECTION
(a) During the term of
this Agreement and thereafter, the Parties 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 schedules, exhibits
and annexes attached hereto, and the Parties’ non-public
performance thereof, shall be deemed Confidential Information. Each
Party 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 “Recipient”) may use
Confidential Information only for the purposes of fulfilling its
obligations under this Agreement (the "Permitted
Purpose"). The Recipient 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 5.01 and the
Recipient shall be liable for any breach of these confidentiality
provisions by such persons; provided, however, that any Recipient 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 Recipient shall promptly notify, to the
extent legally permitted, the disclosing Party (the "Disclosing
Party"), and take (at the expense of the Disclosing Party)
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 Recipient shall only disclose such
Confidential Information that it is advised by its counsel it is
legally bound to disclose under such Governmental
Order.
(b) Notwithstanding the
foregoing, Confidential Information shall not include any
information that the Recipient can demonstrate: (i) was publicly
known at the time of disclosure to it or its Representatives, or
has become publicly known through no act of the Recipient or its
Representatives in breach of this Section 5.01; (ii) was
rightfully received from a third party without a duty of
confidentiality; or (iii) was developed by it or its
Representatives without any reliance on the Confidential
Information.
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(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 Recipient agrees promptly to return or destroy, at its
option, all Confidential Information. If such Confidential
Information is destroyed, an authorized officer of the Receiving
Party shall certify as to such destruction.
(d) Because money
damages may be insufficient in the event of a breach or threatened
breach of this Section
5.01, the affected Party may be entitled to seek an
injunction or restraining order in addition to such other rights or
remedies as may be available under this Agreement, at law or in
equity, including but not limited to money damages.
Section 5.02 Data Ownership and
Protection. Notwithstanding
anything to the contrary, all data or information provided by,
accessed from or through a Party and all data resulting from the
other Party processing or aggregation of any such data or
performing Services for the other Party is, or will be, and will
remain, the property of such Party, and will be deemed Confidential
Information of such Party. Both Parties shall employ adequate and
commercially reasonable, industry standard physical and software
security measures to maintain the security (and prevent the
disclosure) of any Confidential Information of the other Party in
its possession and adhere to applicable policies relating to
security of and access to Confidential Information of the other
Party as may be communicated by the other Party from time to
time.
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); or (c) on the third
(3rd)
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
6.01):
(a) if to
Lingo:
Lingo
Management, LLC
0000
Xxxxxxxxx Xxxx XX, Xxxxx 0000,
Xxxxxxx, XX
00000
Attention: Xxxxxx
Xxxx
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with a
copy to:
Lingo
Management, LLC
0000
Xxxxxxxxx Xxxx XX, Xxxxx 0000,
Xxxxxxx, XX
00000
Attention: Xxxxxxxx
Xxxxxx
(b) if to
Fusion
Fusion
Connect, Inc. (f/k/a Fusion Telecommunications International,
Inc.)
000
Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxx, XX 00000
Attention: General
Counsel
with a
copy to:
Fusion
LLC
000
Xxxxx 00 Xxxx, Xxxxx 000
Xxxxxxxxx, Xxx
Xxxxxx 00000
Attention: Xxx
Xxxxxxx
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 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
Schedules, constitutes the sole and entire agreement of the Parties
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.
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Section 6.05 Successors and Assigns.
This Agreement shall be binding upon
and shall inure to the benefit of the Parties 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. 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.
The foregoing notwithstanding, in the event of a transfer, directly
or indirectly, sale of a controlling interest in, or the transfer,
directly or indirectly, sale of all or substantially all of the
assets of, Lingo and/or one or more of its subsidiaries, taken as a
whole, the third-party acquiring such controlling interest in, or
all or substantially all of such assets, must assume all
obligations and responsibilities of the Party /or its subsidiaries
under this Agreement.
Section 6.06 No Third-Party
Beneficiaries. This Agreement
is for the sole benefit of the Parties 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 and the
schedules and exhibits attached hereto may only be amended,
modified or supplemented by an agreement in writing signed by both
Parties. No waiver by a 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 Change in Law; Compliance with
Law.
(a) This
Agreement is subject to all present and future valid orders and
regulations of any governmental or regulatory body having
jurisdiction over the subject matter hereof and to the laws of the
United States of America, any of its states, or any foreign
governmental agency having jurisdiction over the Parties. In the
event this Agreement shall be found contrary to or in conflict with
any such order, rule, regulation, or law, the Parties agree to
modify and amend this Agreement to the extent necessary to comply
with any such order, rule, regulation, or law consistent with the
form, intent, and purpose hereof.
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(b) In the event the Federal Communications Commission
(“FCC”), Congress, a state legislature or
regulatory body (such as a utilities commission) or a court of
competent jurisdiction issues a rule, regulation, law or order that
has the effect of increasing the cost to provide the Services
hereunder or canceling, changing or superseding any material term
or provision of this Agreement (each a “Regulatory
Requirement”), then the
Parties shall modify this Agreement in such a way as the Parties
mutually agree is consistent with the form, intent, and purpose of
this Agreement and is necessary to comply with the Regulatory
Requirement. In the event the Parties fail to reach agreement on an
amendment to reflect the Regulatory Requirement, then any Party
may, to the extent practicable, terminate, in writing, that portion
of this Agreement impacted by the Regulatory Requirement, or the
entire Agreement.
(c) Each
Party shall comply with all applicable laws, rules and regulations
concerning the provision and use of the Services provided
hereunder. Each Party represents and warrants that it has obtained,
and will maintain at its own cost throughout the term of this
Agreement, all certifications and other authorizations necessary
for use and provision of the Services. No Party shall use the
Services in a manner inconsistent with applicable law or use the
Services, or permit the Services to be used, for any illegal
purpose or in any unlawful manner. Any transmission of material in
violation of any federal, state or local law, order or regulation
is prohibited, and shall constitute grounds for termination of this
Agreement.
Section 6.09 Escalation
Lists; Dispute Resolution; Governing Law; Submission to
Jurisdiction.
(a) Escalation Lists. Within three
(3) days of the date of this Agreement, 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 or less (the
“Escalation
Period”) 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 New York law as described
in Section 6.09(c),
without regard to the provisions of Section 6.09(a). The parties
acknowledge that any service issues caused by underlying carrier
network or circuit issues will be handled as provided for herein
but do not give rise to equitable remedies as such issues are
beyond the reasonable control of the Providing
Parties.
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(b) Dispute Resolution.
Except with respect to a billing dispute, 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 three (3) months
of the date of the initial demand by either Party then the dispute
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 New
York without giving effect to any choice or conflict of law
provision or rule (whether of the State of New York or any other
jurisdiction) that would cause the application of laws of any
jurisdiction other than those of the State of New York. 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 New York in each case located in the city of New
York 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.
-17-
Section 6.10 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 Services to be provided hereunder. Each Party
certifies and acknowledges that (a) no Representative of the 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
6.10.
Section 6.11 Interpretation.
Any reference to this “Agreement” shall include the
body of this Agreement together with all attachments hereto,
including all Service Schedules. The terms defined in this
Agreement include the plural as well as the singular. Unless
otherwise expressly stated, the words “herein,”
“hereof,” and “hereunder” and other words
of similar import refer to this Agreement as a whole and not to any
particular Section, Subsection or other subdivision. The words
“include” and “including” and the
abbreviation “e.g.” shall not be construed as terms of
limitation. The words “day,” “month,” and
“year” mean, respectively, calendar day, calendar month
and calendar year. All fees, expenses, charges and other amounts
stated in this Agreement are references to United States Dollars
unless otherwise specifically indicated.
Section 6.12 Counterparts.
This Agreement may be executed in one or more
counterparts (including by means of facsimile or other electronic
transmission), each of which shall be deemed an original but all of
which together will constitute one and the same instrument.
This Agreement, to the extent
signed and delivered by means of a facsimile machine or by other
electronic transmission of a manual signature (by portable document
format (pdf) or other method that enables the recipient to
reproduce a copy of the manual signature), shall be treated in all
manner and respects as an original agreement or instrument and shall be considered to
have the same binding legal effect as if it were the original
signed version thereof delivered in person.
[signatures appear on the next page]
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IN WITNESS
WHEREOF, the Parties have
caused this Agreement to be executed as of the date first written
above by their respective officers thereunto duly
authorized.
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(f/k/a Fusion Telecommunications International, Inc.)
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By /s/ Xxxxx X.
Xxxxxxxx, Xx.
Name:
Xxxxx X. Xxxxxxxx, Xx.
Title:
Executive Vice President and
General
Counsel
LINGO MANAGEMENT, LLC
By /s/
Xxxxxx X. Xxxxxxxx, Xx.
Name:
Xxxxxx X. Xxxxxxxx, Xx.
Title:
Manager
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