Sample Business Contracts


Employment Agreement - Fusion Telecommunications International Inc. and Matthew Rosen

Employment Forms

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  • Companies may offer their business executives a contract that is different from the one provided to their regular employees. Executive employment agreements may be more complex because the compensation structure may include a combination of salary and commissions, provide for bonuses based on sales, stock or other financial targets, and include non-compete, confidentiality and severance provisions.
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                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT  ("Agreement") is made and entered into as of
the  11th  day of  November,  2004  by  and  between  Fusion  Telecommunications
International,  Inc., a Delaware corporation (hereinafter called the "Company"),
and Matthew Rosen (hereinafter called the "Executive").

                                    RECITALS

         A.       The Board of Directors of the Company (the "Board") desires to
assure the Company of the  Executive's  continued  employment  as President  and
Chief Operating Officer and to compensate him therefor.

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

         C.       The Executive is willing to make his services available to the
Company on the terms and conditions hereinafter set forth.

                                    AGREEMENT

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

         1.       EMPLOYMENT.

                  1.1      EMPLOYMENT  AND TERM.  The Company  hereby  agrees to
employ the Executive and the  Executive  hereby agrees to serve the Company,  on
the terms and conditions set forth herein, for the period commencing on the date
hereof and  expiring on January  31, 2007 (the  "Initial  Term")  unless  sooner
terminated as  hereinafter  set forth;  provided,  however,  that  commencing on
January  1, 2007 the  Initial  Term of this  Agreement  shall  automatically  be
extended for one additional  year unless at least ninety (90) days prior to such
date, the Company shall have  delivered to the Executive or the Executive  shall
have delivered to the Company  written  notice that the term of the  Executive's
employment hereunder will not be extended.

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

<PAGE>

                  1.3      PLACE  OF   PERFORMANCE.   In  connection   with  his
employment  by the  Company,  the  Executive  shall be  based  at the  Company's
principal executive offices except for travel reasonably necessary in connection
with the Company's business.

         2.       COMPENSATION.

                  2.1      BASE SALARY. Commencing on the effective date of this
Agreement,  the Executive  shall receive a base salary at the annual rate of not
less than $250,000 (the "Base Salary") during the term of this  Agreement,  with
such Base Salary payable in installments  consistent  with the Company's  normal
payroll  schedule,  subject to applicable  withholding and other taxes. The Base
Salary shall also be reviewed, every six months, for merit increases and may, by
action  and in the  discretion  of the  Compensation  and  Nominating  Committee
established  by the Board,  be increased  at any time or from time to time.  The
Base Salary  shall also be  increased at any time and from time to time as shall
be  substantially  consistent  with  increases  in base  salary  awarded  in the
ordinary  course of  business  to other key  executives  of the  Company and its
subsidiaries.  The Base Salary, if increased,  shall not thereafter be decreased
for any reason.

                  2.2      INCENTIVE   COMPENSATION.   The  Executive  shall  be
entitled to receive  such bonus  payments or  incentive  compensation  as may be
determined  at any time or from  time to time by the  Board  (or any  authorized
committee  thereof) in its  discretion.  Such potential  bonus  payments  and/or
incentive  compensation  shall be considered  at least  annually by the Board or
committee.  In no event  shall  Executive's  annual  bonus  be less  than 25% of
Executive's annual salary then in effect. In the event that the Company achieves
positive  Earnings Before Income Tax,  Depreciation and Amortization  ("EBITDA")
for two successive  fiscal  quarters,  Executive will be immediately  paid a one
time bonus  equal to 50% of his annual  salary then in effect.  Thereafter,  the
Compensation  Committee  shall  review  Executive's  bonus  at  least  annually;
provided  ,  however  that for each  successive  fiscal  year  that the  Company
achieves positive EBITDA, the Executive's  minimum annual bonus will not be less
than 50% of his annual salary then in effect. In addition to the bonus discussed
immediately  above,  the  Executive  shall be  entitled  to a one-time  bonus of
$25,000 in the event that the Company  consummates an initial public offering of
its securities,  which $25,000 payment shall be in addition to the minimum bonus
otherwise discussed immediately above.

                  2.3      STOCK OPTION.

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

                                    (b)      The Company  hereby agrees that all
existing  stock options held by the Executive are hereby amended to provided for
a three year vesting schedule,  as opposed to the four year vesting schedule now
in effect.

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

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

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

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<PAGE>

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

         3.       EXPENSE REIMBURSEMENT AND OTHER BENEFITS.

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

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

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

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

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

         4.       TERMINATION.

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

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<PAGE>

such  termination.  Upon any  termination  pursuant  to this  Section  4.1,  the
Executive  shall  be  entitled  to be  paid  his  Base  Salary  to the  date  of
termination  and the Company shall have no further  liability  hereunder  (other
than for  reimbursement  for reasonable  business expenses incurred prior to the
date of termination).

                  4.2      DISABILITY.  Notwithstanding  anything  contained  in
this Agreement to the contrary, the Company, by written notice to the Executive,
shall  at all  times  have  the  right  to  terminate  this  Agreement,  and the
Executive's  employment  hereunder,  if the  Executive  shall,  as the result of
mental or physical incapacity, illness or disability, fail to perform his duties
and  responsibilities  provided for herein for a period of more than one hundred
twenty (120)  consecutive  days in any  12-month  period.  Upon any  termination
pursuant to this  Section 4.2,  the  Executive  shall be entitled to be paid his
Base  Salary  for the  remaining  term of the  Agreement.  In the event that the
Agreement has less than six months  remaining at such time,  Executive  shall be
entitled  to a payment  equal to six  months of his Base  Salary.  In  addition,
Executive shall be entitled to reimbursement  for all business expenses incurred
prior to his disability.

                  4.3      DEATH.  In the  event of the  death of the  Executive
during the term of his employment hereunder, the Company shall pay to the estate
of the deceased  Executive an amount equal to the Base Salary for the  remaining
term of this Agreement. In the event that the Agreement has less than six months
remaining at such time,  Executive  shall be entitled to a payment  equal to six
months  of his  Base  Salary.  In  addition,  Executive  shall  be  entitled  to
reimbursement for all business expenses incurred prior to his death.

                  4.4      OPTIONAL   TERMINATION    Notwithstanding    anything
contained in this  Agreement to the contrary,  the  Executive,  by giving thirty
days  notice to the  Company,  shall one year after the date of this  Agreement,
have the right to  terminate  this  Agreement at his sole  discretion.  Upon any
termination  pursuant to this Section 4.4, the Execution shall be entitled to be
paid his Base Salary to the date of  termination  and the Company  shall have no
further  liability  hereunder  (other  than  for  reimbursement  for  reasonable
business  expenses  incurred  prior  to the  date of  termination),  unless  the
Executive and the Company agree to a different arrangement.

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

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

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

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<PAGE>

                           (c)      the Company's  requiring the Executive to be
based at any office or location more than 25 miles from Grand Central Station in
New York, New York, except for travel reasonably  required in the performance of
the Executive's responsibilities;

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

                           (e)      in the event of any  change  in the  current
CEO where the  Executive is not first  offered the position as CEO on terms that
are at least as  favorable  as those in place (at such  time) for  Executive  as
President and Chief Operating Officer;

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

                           (g)      any  failure by the  Company to comply  with
and satisfy Section 10(c) of this Agreement; or

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

         For purposes of this Section 4.5, any good faith determination of "Good
Reason" made by the Executive shall be conclusive.

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

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

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

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

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

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         6.       RESTRICTIVE COVENANTS.

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

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

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

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

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

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

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<PAGE>

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

         If to the Executive:   Matthew Rosen
                                420 Lexington Avenue, Suite 518
                                New York, New York 10170

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

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

         9.       SUCCESSORS.

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

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

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

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

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

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

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<PAGE>

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

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

         15.      CERTAIN REDUCTION OF PAYMENTS BY THE COMPANY.

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

                           (e)      All determinations required to be made under
this  Section 15 shall be made by  Rothstein,  Kass & Company,  P.C.  or, at the
Executive's  option,  any other  nationally  or  regionally  recognized  firm of
independent  public  accountants  selected by the  Executive and approved by the
Company,  which  approval  shall not be  unreasonably  withheld or delayed  (the
"Accounting  Firm"),  which shall provide (i) detailed  supporting  calculations
both to the Company and the  Executive  within  twenty (20) business days of the
termination  of  Executive's  employment or such earlier time as is requested by
the

                                       8
<PAGE>

Company, and (ii) an opinion to the Executive that he has substantial  authority
not to report any excise tax on his Federal  income tax return  with  respect to
any Payments.  Any such  determination  by the Accounting  Firm shall be binding
upon the Company and the Executive.  The Executive shall determine which and how
much of the  Payments  shall  be  eliminated  or  reduced  consistent  with  the
requirements  of this Section 15,  provided that, if the Executive does not make
such  determination  within ten business days of the receipt of the calculations
made by the  Accounting  Firm, the Company shall elect which and how much of the
Payments shall be eliminated or reduced consistent with the requirements of this
Section 15 and shall notify the Executive promptly of such election. Within five
business days  thereafter,  the Company shall pay to or distribute to or for the
benefit of the  Executive  such amounts as are then due to the  Executive  under
this  Agreement.  All fees and  expenses  of the  Accounting  Firm  incurred  in
connection  with the  determinations  contemplated  by this  Section 15 shall be
borne by the Company.

                           (f)      As  a  result  of  the  uncertainty  in  the
application of Section 280G of the Code at the time of the initial determination
by the Accounting  Firm  hereunder,  it is possible that Payments will have been
made by the  Company  which  should not have been made  ("Overpayment")  or that
additional Payments which will not have been made by the Company could have been
made  ("Underpayment"),  in each case, consistent with the calculations required
to be made  hereunder.  In the event that the  Accounting  Firm,  based upon the
assertion of a deficiency by the Internal  Revenue Service against the Executive
which the Accounting Firm believes has a high probability of success, determines
that an Overpayment has been made, any such  Overpayment  paid or distributed by
the  Company to or for the  benefit of the  Executive  shall be treated  for all
purposes as a loan ab initio to the Executive which the Executive shall repay to
the Company  together with interest at the applicable  federal rate provided for
in Section 7872(f)(2) of the Code; provided, however, that no such loan shall be
deemed to have been made and no amount  shall be payable by the  Employee to the
Company if and to the  extent  such  deemed  loan and  payment  would not either
reduce the amount on which the  Executive is subject to tax under  Section 1 and
Section  4999 of the Code or generate a refund of such taxes.  In the event that
the  Accounting  Firm,  based upon  controlling  precedent or other  substantial
authority,  determines that an Underpayment has occurred,  any such Underpayment
shall be promptly  paid by the  Company to or for the  benefit of the  Executive
together  with interest at the  applicable  federal rate provided for in Section
7872(f)(2) of the Code.

         16.      REIMBURSEMENT  OF LEGAL  EXPENSES.  The Company shall promptly
reimburse  Executive  for all  reasonable  legal fees  incurred by  Executive in
connection with the preparation, negotiation and execution of this Agreement and
ancillary documents.

         17.      INDEMNIFICATION.  The Company  agrees to promptly  execute and
deliver to Executive an Indemnification Agreement in substantially the same form
as set forth on EXHIBIT A.

                                       9
<PAGE>

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


                                   FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.


                                   By:
                                       -------------------------------------
                                       Philip Turits
                                       Treasurer


                                   EXECUTIVE:



                                       -------------------------------------
                                       Matthew Rosen

                                       10


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