Document:

exv10w1

 

Exhibit 10.1

ADVISORY SERVICES AGREEMENT

     THIS ADVISORY SERVICES AGREEMENT (this “AGREEMENT”) is made as of December 29, 2006, by and
between Sigma Capital Advisors, LLC, a Delaware limited liability company (the “SERVICE PROVIDER”),
and Berliner Communications, Inc., a Delaware corporation (“BERLINER”).

WITNESSETH:

     WHEREAS, on December 29, 2006, Berliner entered into a Note Purchase Agreement (the “Note
Purchase Agreement”) with those investors set forth on Schedule A thereto (the “Buyers”);

     WHEREAS, Service Provider, by and through its officers, employees, agents, representatives and
affiliates, has expertise in the areas of corporate management, finance, product strategy,
investment, acquisitions, governance and other matters relating to the business of Berliner;

     WHEREAS, Berliner desires to avail itself of the expertise of Service Provider in the
aforesaid areas.

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

     1. DEFINITIONS. Capitalized terms used but not defined herein shall have the respective
meanings assigned to such terms in the Note Purchase Agreement.

     2. APPOINTMENT. Berliner hereby engages the Service Provider, and the Service Provider hereby
agrees under the terms and conditions set forth herein, to provide certain services to Berliner and
its subsidiaries as described in Section 4 hereof.

     3. TERM. The term of the Agreement (the “TERM”) shall commence on the date hereof and shall
continue until such time as the Buyers or any of their affiliates no longer hold any securities of
Berliner or its affiliates or any successor thereto. The provisions of Section 8 and 10 shall
survive termination of this Agreement.

     4. DUTIES OF THE SERVICE PROVIDER. The Service Provider shall provide Berliner and its
subsidiaries with business, finance and organizational strategy, advisory, consulting and other
services (collectively, the “SERVICES”) related to the business of Berliner and its subsidiaries.
The Services will be provided at such times and places as may reasonably be determined by the
Service Provider.

 

 

     5. POWER OF THE SERVICE PROVIDER. So that they may properly perform their duties hereunder,
the Service Provider shall, subject to Section 9 hereof, have the authority and power to do all
things necessary and proper to carry out the duties set forth in Section 4 hereof.

     6. COMPENSATION; EXPENSES. In consideration of the performance of the Services, Berliner
shall pay to Service Provider an amount equal to $100,000 and shall deliver to Service Provider the
executed Additional Warrant. In addition, Berliner shall pay directly, or reimburse Service
Provider for, its out-of-pocket expenses incurred in connection with the performance of the
Services.

     7. [Reserved]

     8. INDEMNIFICATION. In the event that Service Provider or any of its affiliates, principals,
partners, directors, stockholders, employees, agents and representatives (collectively, the
“INDEMNIFIED PARTIES”) becomes involved in any capacity in any action, proceeding or investigation
in connection with any matter referred to in or contemplated by this Agreement, or in connection
with the Services, Berliner will indemnify and hold harmless the Indemnified Parties from and
against any actual or threatened claims, lawsuits, actions or liabilities (including out-of-pocket
expenses and the fees and expenses of counsel and other litigation costs and the cost of any
preparation or investigation) of any kind or nature, arising as a result of or in connection with
this Agreement or the Services, activities and decisions hereunder, and will periodically reimburse
Service Provider for its expenses as described above, except that Berliner will not be obligated to
so indemnify any Indemnified Party if, and to the extent that, such claims, lawsuits, actions or
liabilities against such Indemnified Party directly result from the gross negligence or willful
misconduct of such Indemnified Party as admitted in any settlement by such Indemnified Party or
held in any final, non-appealable judicial or administrative decision. In connection with such
indemnification, Berliner will promptly remit or pay to Service Provider any amounts which Service
Provider certifies to Berliner in writing are payable to Service Provider or other Indemnified
Parties hereunder. The reimbursement and indemnity obligations of Berliner under this Section 8
shall be in addition to any liability which Berliner may otherwise have, shall extend upon the same
terms and conditions to any Indemnified Party, as the case may be, of Service Provider and any such
affiliate and shall be binding upon and inure to the benefit of any successors, assigns, heirs and
personal representatives of Berliner, Service Provider, and any such Indemnified Party.

     9. INDEPENDENT CONTRACTOR. Nothing herein shall be construed to create a joint venture or
partnership between the parties hereto or an employee/employer relationship. Service Provider shall
be an independent contractor pursuant to this Agreement. No party hereto shall have any express or
implied right or authority to assume or create any obligations on behalf of or in the name of any
other party hereto or to bind any other party hereto to any contract, agreement or undertaking with
any third party.

     10. LIABILITY. The Service Provider is not and never shall be liable to any creditor of
Berliner or its subsidiaries or affiliates with respect to the subject matter of this Agreement,
and Berliner agrees to indemnify and hold each Indemnified Party harmless from and against any and

 

 

all such claims of alleged creditors of Berliner and its subsidiaries or affiliates and against all
costs, charges and expenses (including attorneys fees and expenses) incurred or sustained by any
Indemnified Party in connection with any action, suit or proceeding to which it may be made a party
by any alleged creditor of Berliner. Notwithstanding anything contained in this Agreement to the
contrary, Berliner agrees and acknowledges that Service Provider and its partners, principals,
shareholders, directors, officers, employees and affiliates intend to engage and participate in
acquisitions and business transactions outside of the scope of the relationship created by this
Agreement and they shall not be under any obligation whatsoever to make such acquisitions, business
transactions or other opportunities through Berliner or any of its subsidiaries or offer such
acquisitions, business transactions or other opportunities to Berliner or any of its subsidiaries
and shall be free to perform services similar to the Services for the account of others, including
companies that may be in competition with the business conducted by Berliner and its subsidiaries.

     11. ASSIGNMENT. No party hereto may assign any of its rights or obligations hereunder
without the prior written consent of the other parties hereto; PROVIDED, HOWEVER, that,
notwithstanding the foregoing, Service Provider may assign its rights and obligations under this
Agreement to any of its affiliates without the consent of Berliner.

     12. SUCCESSORS. This Agreement and all the obligations and benefits hereunder shall inure to
the successors and permitted assigns of the parties hereto.

     13. COUNTERPARTS. This Agreement may be executed and delivered by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be deemed an original and
both of which taken together shall constitute but one and the same agreement.

     14. ENTIRE AGREEMENT; MODIFICATION; GOVERNING LAW. The terms and conditions hereof
constitute the entire agreement between the parties hereto with respect to the subject matter of
this Agreement and supersede all previous communications, either oral or written, representations
or warranties of any kind whatsoever, except as expressly set forth herein. No modifications of
this Agreement nor waiver of the terms or conditions hereof shall be binding upon any party hereto
unless approved in writing by an authorized representative of such party. All issues concerning
this Agreement shall be governed by and construed in accordance with the laws of the State of New
York, without giving effect to any choice of law or conflict of law provision or rule (whether of
the State of New York or any other jurisdiction) that would cause the application of the law of any
jurisdiction other than the State of New York.

     15. NO THIRD PARTY BENEFICIARIES. Except as provided in Section 8 and Section 10 hereof,
this Agreement is for the sole benefit of the parties hereto and their permitted assigns and
nothing herein expressed or implied shall give or be construed to give to any person, other than
the parties hereto and such assigns, any legal or equitable rights hereunder.

 

 

     IN WITNESS WHEREOF, the parties hereto have signed this Advisory Services Agreement as of the
day and year first above written.

	 	 	 	 	 
	 	SIGMA CAPITAL ADVISORS, LLC

 	 
	 	By:  	/s/ Thom Waye
 	 
	 	 	Name:  	Thom Waye 	 
	 	 	Title:  	Manager 	 
	 

	 	 	 	 	 
	 	BERLINER COMMUNICATIONS, INC.

 	 
	 	By:  	/s/ Richard B. Berliner
 	 
	 	 	Name:  	Richard B. Berliner 	 
	 	 	Title:  	Chief Executive Officerexv10w2

 

Exhibit 10.2

BERLINER COMMUNICATIONS, INC.

BCI COMMUNICATIONS, INC.

20 Bushes Lane

Elmwood Park, New Jersey 07407

December 29, 2006               

Sigma Opportunity Fund, LLC

c/o Sigma Capital Advisors, LLC

800 Third Avenue

Suite 1701

New York, NY 10022

Re: Security Agreement (“Agreement”)

Gentlemen:

     To secure the payment of our obligations to you pursuant to the Transaction Documents,
including the payment of principal and interest under the senior subordinated secured convertible
promissory note in the principal amount of $3,000,000, dated December 29, 2006, payable to you or
order (the “Note”), and to secure the performance of all obligations in your favor under any of the
Transaction Documents, including any other agreement securing, guaranteeing or otherwise pertaining
to the Note, we hereby grant you a continuing lien and security interest in all our accounts,
inventory, furniture, fixtures, equipment, general intangibles, patents, licenses, investment
property, promissory notes, instruments, documents and tangible and electronic chattel paper, and
all goods represented thereby and all goods that may be reclaimed or repossessed from or returned
by account debtors and all proceeds, products, rents and profits thereof (all as such terms are
defined in the New York State Uniform Commercial Code, as in effect from time to time) and in all
other assets of the undersigned, whether now existing or hereafter acquired (the “Collateral”). All
obligations secured hereby are collectively referred to herein as the “Obligations.” The lien and
security interest granted hereby is junior and subordinate to the lien and security interest
previously and separately granted by us to Presidential Financial Corporation of Delaware Valley
and to a working capital facility proposed to be entered into by us with a working capital lender
approved by you (as applicable, the “Senior Lender”) in a principal amount of up to $10 million
which is secured by all our assets and the proceeds thereof and senior to all of our other
indebtedness.

     We hereby authorize you, at our expense, to file one or more financing or continuation
statements, and amendments thereto, relative to all or any part of the Collateral without our
signature. A carbon, photographic or other reproduction of this Agreement or any financing
statements covering the Collateral or any part thereof shall be sufficient as a financing statement
where permitted by applicable law.

 

 

     Upon payment or performance in full of all of the Obligations, you will, at our request and
expense, release the security interest granted herein and deliver such termination statements as
may be necessary therefor.

     We hereby warrant to you that (i) we own the Collateral free and clear of all liens,
restrictions and limitations except for Permitted Liens, (ii) this Agreement has been duly
authorized and constitutes our legal, valid and binding obligation enforceable against us in
accordance with its terms; (iii) no authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required either for the grant of a
security interest by us in the Collateral pursuant to this Agreement or for our execution, delivery
or performance of this Agreement or for your exercise of the rights provided for in this Agreement
or the remedies in respect of the Collateral pursuant to this Agreement or the Note; (iv) the grant
of a security interest in the Collateral to you pursuant to this Agreement creates a valid and,
upon filing of the financing statements in the form attached hereto and delivery of the stock
certificate of BCI Communications, Inc. to you evidencing our ownership of BCI, perfected security
interest in your favor in the Collateral (in which a security interest can be perfected by the
filing of a financing statement) securing the payment of the Note and the Obligations junior only
to the Senior Lender; and (v) there are no options, warrants, privileges or other rights
outstanding pursuant to which any of the Collateral may be acquired.

     We also agree that we will not transfer, assign or further encumber any of our rights in any
of the Collateral except pursuant to this Agreement or the Transaction Documents, in favor of the
Senior Lender as set forth above or as you may consent in writing.

     We will take such action and execute such additional documents as you may request in
connection with this Agreement or to enforce your rights hereunder, including, without limitation,
notification of account debtors if an Event of Default occurs. If we fail to take any such action
or execute any such document, we hereby authorize you to do so in our name and on our behalf.

     We hereby represent and warrant to you that there is no action, legal, administrative or other
proceeding pending or threatened against our title to the Collateral or against our grant of a
security interest therein hereunder, nor do we know of any basis for the assertion of any such
claim.

     We covenant with you that so long as any Obligation remains outstanding:

	 	1.	 	Protection of Security and Legal Proceedings. We will, at our own expense, take
any and all actions necessary to preserve, protect and defend your security interest
in the Collateral and the perfection and priority thereof against all adverse
claims, including appearing in and defending any and all actions and proceedings
which purport to affect any of the
foregoing. We will promptly reimburse you for all sums, including costs,
expenses and actual attorneys’ fees, which you may pay or incur in

 

 

	 	 	 	defending,
protecting or enforcing your security interest in the Collateral or perfection or
the priority thereof, or in discharging any prior or subsequent lien or adverse
claim against the Collateral or any part thereof, or by reason of becoming or being
made a party to or intervening in any action or proceeding affecting the Collateral
or your rights therein, all of which actions we hereby agree that you will have the
right to take in your sole and absolute discretion;
	 
	 	2.	 	Payment of Taxes. Except as permitted under the Transaction Documents, we shall pay or
cause to be paid all taxes and other levies with respect to the Collateral when the same become due
and payable;
	 
	 	3.	 	Use and Maintenance of Collateral. We shall: (A) comply with all laws, statutes and
regulations pertaining to our use and ownership of the Collateral and the conduct of our business;
(B) properly care for and maintain all of the Collateral in good condition, free of misuse, abuse,
waste and deterioration, reasonable wear and tear excepted; and (C) keep accurate and complete
books and records pertaining to the Collateral in accordance with generally accepted accounting
principles;
	 
	 	4.	 	Inspection. We shall give you such information as may be requested concerning the
Collateral and shall at all reasonable times and upon reasonable notice permit you and your agents
and representatives to enter upon any premises upon which the Collateral is located for the purpose
of inspecting the Collateral. Furthermore, you shall at all reasonable times on reasonable notice
have full access to and the right to audit any and all of our books and records pertaining to the
Collateral; provided, however, that any such action which involves communicating with our customers
shall be carried out by you through our independent auditors unless an Event of Default (as such
term is defined in the Note) occurs and is continuing, in which case you shall then have the right
directly to notify such obligors; and
	 
	 	5.	 	Sale or Hypothecation of Collateral. We shall not directly or indirectly, whether
voluntarily, involuntarily, by operation of law or otherwise sell, assign, transfer, exchange,
lease, lend, or grant any option with respect to or dispose of any of the Collateral, or any of our
rights therein, nor create or permit to exist any lien on or with respect to any of the Collateral,
except for the lien in favor of you and Permitted Liens or as otherwise permitted under the
Transaction Documents.

     You and your successors and assigns will have all of the rights, powers and privileges of a
secured party under the New York Uniform Commercial Code in force and effect from time to
time with respect to the security interest granted by this Agreement. Upon the occurrence and
during the continuation of any Event of Default under the Note, you may take any action which you
may deem necessary for the maintenance, preservation and protection of any of the

 

 

Collateral or
your security interest therein, and you will retain all of your rights under the New York Uniform
Commercial Code, including, without limitation, the right to transfer any of the Collateral into
your name or the name of your nominee and to sell any of the Collateral at a public or private sale
on such terms as you deem appropriate and the right to foreclose upon the Collateral. To the
extent permitted by applicable law, at any such sale you may be the purchaser.

     You will not be required to resort to or pursue any of your rights or remedies under or with
respect to any other security for or guaranty of payment of any of the obligations secured by this
Agreement before pursuing any of your rights or remedies under this Agreement.

     This Agreement and your rights and obligations hereunder will be governed by and construed in
accordance with the laws of the State of New York. We agree that any legal action or proceeding
with respect to this Agreement may be brought in the courts of the State of New York and of the
United States having jurisdiction in the Borough of Manhattan, City and State of New York and for
the purpose of any such legal action or proceeding, we hereby waive any claim or defense that such
forum is not convenient or proper. We agree that any such court shall have in personam
jurisdiction over us and that service of process may be effected in any manner authorized by New
York law.

     This Agreement will be binding upon our administrators, successors and assigns.

     WE HEREBY WAIVE, AND COVENANT THAT WE WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE SUBJECT MATTER HEREOF, ANY
DOCUMENT RELATING HERETO OR ANY OBLIGATION, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING
OR WHETHER IN CONTRACT OR IN TORT OR OTHERWISE.

     Capitalized terms used herein and not otherwise defined shall have the meaning provided in the
Note Purchase Agreement, dated December 29, 2006, between Berliner Communications, Inc. and Sigma
Opportunity Fund, LLC.

 

 

If the foregoing is acceptable to you, please sign the enclosed copy of this letter in the space
provided below, whereupon this letter will become an agreement between us as of the date first
above written.

	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	BERLINER COMMUNICATIONS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Richard B. Berliner
 

	 	 
	 	 	Name: Richard B. Berliner
	 	 
	 	 	Title: Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	BCI COMMUNICATIONS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Richard B. Berliner
 

	 	 
	 	 	Name: Richard B. Berliner
	 	 
	 	 	Title: Chief Executive Officer	 	 

AGREED AND ACCEPTED:

SIGMA OPPORTUNITY FUND, LLC

By: SIGMA CAPITAL ADVISORS, LLC

	 	 	 	 	 
	By:

	 	/s/ Thom Waye
 

Name: Thom Waye
	 	 
	 

	 	Title: Managing Partner

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