First Lien Forbearance Agreement, dated as of April 15, 2019, among Fusion Connect, Inc., the guarantors party thereto and the Forbearing Lenders

 

THIS FORBEARANCE AGREEMENT, dated as of April 15, 2019 (this “Agreement”), is entered into by and among Fusion Connect, Inc., a Delaware corporation (the “Borrower”), the Guarantor Subsidiaries identified on the signature pages hereto (collectively, with the Borrower, the “Credit Parties”), the Subsidiaries identified on the signature pages hereto (collectively, the “Canadian Subsidiaries”) and the Lenders appearing on the signature pages hereto (the “Forbearing Lenders”). Each of the foregoing shall be referred to herein as a “Party” and collectively as the “Parties.” Capitalized terms used in this Agreement and not defined herein shall have the meanings ascribed thereto in the Credit Agreement (as defined below).

 

WHEREAS, the Credit Parties, the Lenders, Wilmington Trust, National Association, as administrative agent and collateral agent (in such capacities, and together with its successors and permitted assigns, the “Administrative Agent”) and certain other parties are party to that certain First Lien Credit and Guaranty Agreement, dated as of May 4, 2018 (as amended, supplemented, amended and restated or otherwise modified from time to time prior to the date hereof, the “Credit Agreement”);

WHEREAS, the Borrower has informed the Administrative Agent and the Forbearing Lenders that certain Defaults or Events of Default have occurred or may occur under the Credit Agreement (together, the “First Lien Defaults”) as a result of the Borrower’s failure to:

WHEREAS, the Borrower has informed the Administrative Agent and the Forbearing Lenders that certain Defaults or Events of Default (as each are defined under the Second Lien Credit Agreement) have occurred or may occur as a result of corresponding defaults under the Second Lien Credit Agreement (together, solely with respect to any such Defaults or Events of Default (as each are defined under the Second Lien Credit Agreement, the “Second Lien Defaults”);

WHEREAS, the Borrower has also informed the Administrative Agent and the Lenders that a default or Event of Default (as defined in the New Subordinated Note) has occurred or may occur as a result of the Maker (as defined in the New Subordinated Note) failing to pay interest due and payable on the New Subordinated Note on March 31, 2019 (the “New Subordinated Note Default”), which will result in the occurrence of an Event of Default pursuant to Section 8.1(b) of the Credit Agreement;

NOW, THEREFORE, in consideration of the foregoing, the covenants and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

Each of the Credit Parties acknowledges that the recitals set forth above are true and correct in all respects and admits to the occurrence of each Collective Default.

Each of the Credit Parties acknowledges and agrees that, as of the date hereof, the aggregate principal amount of Loans outstanding under the Credit Agreement is $573,187,500, consisting of (i) with respect to the Tranche A Term Loans, in an aggregate principal amount of $43,312,500, (ii) with respect to the Tranche B Term Loans, in an aggregate principal amount of $490,875,000 and (iii) Revolving Commitments in an aggregate amount of $40,000,000 and Revolving Loans in an aggregate principal amount of $39,000,000, plus accrued and unpaid interest and fees thereon. Such Obligations, together with all other outstanding Obligations owing pursuant to the terms of the Credit Documents, including interest, fees, expenses and other charges, are validly owing and are not subject to any right of offset, deduction, claim, or counterclaim in favor of any Credit Party.

This Agreement shall become effective (the date of such effectiveness being referred to herein as the “Forbearance Effective Date”) upon the occurrence of the following conditions:

Each Credit Party shall provide notice to the Administrative Agent and to counsel to the Forbearing Lenders promptly of its obtaining knowledge of the occurrence of any Forbearance Termination Event, which notice shall state that such event occurred and set forth, in reasonable detail, the facts and circumstances that gave rise to such event. Such notice shall be delivered to:

 

 

 

 

 

 

 

 

 

 

All notices given in accordance with the provisions of this Section 6 shall be (x) deemed to have been given on the date of receipt and (y) in the case of such notices given to the Administrative Agent, promptly delivered by the Administrative Agent to the Forbearing Lenders.

To the extent that any other forbearance, standstill or other similar agreement entered into by any Credit Party (any such agreement, a “Third Party Forbearance Agreement”), or any amendment to any Third Party Forbearance Agreement, in each case, entered into or agreed on or after the date of this Agreement and during the Forbearance Period, provides any benefit or right (including, without limitation, the benefit of a forbearance period of shorter duration than the Forbearance Period) to any creditor party thereto that is more favorable than the benefits and rights provided to the Administrative Agent and the Lenders under this Agreement, taking into account the terms and conditions of the underlying debt financing documents in effect with such creditor party, this Agreement shall be deemed to be amended so as to cause any such benefit or right to be incorporated into this Agreement concurrently with making any such benefit or right available, and on comparable terms as it is made available, to any such other creditor.

Each of the Credit Parties, on behalf of itself and its successors or assigns (collectively, the “Releasing Parties”), in consideration of the Forbearing Lenders’ execution and delivery of this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, unconditionally, freely, voluntarily and, after consultation with counsel and becoming fully and adequately informed as to the relevant facts, circumstances and consequences, releases, waives and forever discharges (and further agrees not to allege, claim or pursue) any and all claims, rights, causes of action, counterclaims or defense of any kind whatsoever, in contract, in tort, in law or in equity, whether known or unknown, fixed or contingent, direct or indirect, joint and/or several, secured or unsecured, due or not due, liquidated or unliquidated, asserted or unasserted, or foreseen or unforeseen, which any of the Releasing Parties might otherwise have or may have against the Administrative Agent, the Lenders, their present or former subsidiaries and affiliates or any of the foregoing’s officers directors, employees, attorneys or other representatives or agents (collectively, the “Releasees”) in each case on account of any conduct, condition, act, omission, event, contract, liability, obligation, demand, covenant, promise, indebtedness, claim, right, cause of action, suit, damage, defense, judgment, circumstance or matter of any kind whatsoever which existed, arose or occurred at any time prior to the date of this Agreement relating to the Credit Documents, this Agreement and/or the transactions contemplated thereby or hereby (any of the foregoing, a “Claim” and collectively, the “Claims”). Each of the Releasing Parties expressly acknowledges and agrees, with respect to the Claims, that it waives, to the fullest extent permitted by applicable law, any and all provisions, rights, and benefits conferred by any applicable U.S. federal or state law, or any principle of U.S. common law, that would otherwise limit a release or discharge of any unknown Claims pursuant to this Section 9. Furthermore, each of the Releasing Parties hereby absolutely, unconditionally and irrevocably covenants and agrees with and in favor of each Releasee that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released and/or discharged by the Releasing Parties pursuant to this Section 9. The foregoing release, covenant and waivers of this Section 9 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment or prepayment of any of the Loans, or the termination of the Credit Agreement, this Agreement, any other Credit Document or any provision hereof or thereof.

This Agreement shall be binding upon and inure to the benefit of each Party hereto and their respective successors and assigns.

No Person other than the Credit Parties, the Administrative Agent, the Lenders and, in the case of Section 9 hereof, the Releasees, shall have any rights hereunder or be entitled to rely on this Agreement and all third-party beneficiary rights (other than the rights of the Releasees under Section 9 hereof) are hereby expressly disclaimed.

 

 

The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, without the express prior written consent of the Borrower, the Requisite Lenders and, to the extent that such amendment, modification, supplement, waivers or consents relate to the FCCR Defaults, the Requisite Tranche A/Revolving Lenders; provided that any date or deadline herein (including, without limitation, any extension of the Forbearance Period) may be extended by the Requisite Lenders and, to the extent the FCCR Defaults are continuing, the Requisite Tranche A/Revolving Lenders and such extension may be communicated by email to counsel to the Credit Parties.

Each of the Credit Parties hereby agrees to execute and deliver from time to time such other documents and take such other actions as may be reasonably necessary in order to effectuate the terms hereof.

This Agreement, the Credit Agreement and the other Credit Documents constitute the entire agreement of the Parties with respect to the subject matter hereof, and supersede all other prior negotiations, understandings or agreements with respect to the subject matter hereof. This Agreement shall be deemed a Credit Document.

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by electronic mail (e.g. “.pdf” or “.tif”) shall be effective as delivery of an original executed counterpart of this Agreement.

The section and subsection titles contained in this Agreement are included for convenience only, shall be without substantive meaning or content of any kind whatsoever, and are not a part of the agreement between the Credit Parties, on the one hand, and the Forbearing Lenders, on the other hand. Any reference in this Agreement to any “Section” refers, unless the context otherwise indicates, to a section of this Agreement.

The Lenders party hereto (which constitute the Requisite Lenders and the Requisite Tranche A/Revolving Lenders) hereby (i) instruct the Administrative Agent to comply with the Forbearance to the extent specified herein and to take the other actions (or refrain from acting), in each case, as expressly contemplated hereby and (ii) acknowledge and agree that (x) the direction set forth in this Section 26 constitutes a direction from the Requisite Lenders and the Requisite Tranche A/Revolving Lenders under the provisions of Section 9 of the Credit Agreement and (y) Sections 9.3 and 9.6 of the Credit Agreement shall apply to any and all actions (and inactions) taken by the Administrative Agent in accordance with such direction.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the day and year first above written.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

Oppenheimer Fundamental Alternatives Fund, as Forbearing Lender By: OppenheimerFunds, Inc., as investment adviser
By:	/s/ Luke Obermeyer
Name:	Luke Obermeyer
Title:	Research Analyst, AUP