Document:

Exhibit
      4.1

    

    THIS
      NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
      “1933 ACT”). THE ISSUANCE TO THE HOLDER OF THE SHARES OF COMMON STOCK ISSUABLE
      UPON CONVERSION OF THIS NOTE AND IN PAYMENT OF INTEREST ON THIS NOTE ARE NOT
      COVERED BY A REGISTRATION STATEMENT UNDER THE 1933 ACT. PURSUANT TO THE NOTE
      PURCHASE AGREEMENT, THIS NOTE HAS BEEN ACQUIRED, AND SUCH SHARES MUST BE
      ACQUIRED, FOR INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED
      IN
      THE ABSENCE OF REGISTRATION OF THE RESALE THEREOF UNDER THE 1933 ACT OR AN
      OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO
      THE
      COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

     

    BERLINER
      COMMUNICATIONS, INC.

    7%
      SENIOR SUBORDINATED SECURED CONVERTIBLE NOTE DUE 2008

    

      
        	
                No.
                  07-03

              	
                $1,500,000

              
	
                Elmwood
                  Park, New Jersey

              	 
	
                February
                  15, 2007

              	 

      

    

    

    FOR
      VALUE RECEIVED, BERLINER COMMUNICATIONS, INC.,
      a Delaware
      corporation (hereinafter called the “Company”), hereby promises to pay to Sigma
      Berliner, LLC, 800 Third Avenue, New York, NY 10022 or
      registered assigns (the “Holder”), or order, the sum of one million five hundred
      thousand ($1,500,000), on the Maturity Date, and to pay interest on the unpaid
      principal balance hereof at the Applicable Rate from the date hereof, until
      the
      same becomes due and payable, whether at maturity or upon acceleration or by
      repurchase in accordance with the terms hereof or otherwise. Any amount,
      including, without limitation, principal of or interest on this Note or the
      Optional Redemption Price or the Repurchase Price, that is payable under this
      Note and that is not paid when due shall bear interest at the Default Rate
      from
      the due date thereof until the same is paid (“Default Interest”). Regular
      interest shall be payable in arrears on each Interest Payment Date, commencing
      on April 1, 2007, on the principal amount outstanding on such date. Regular
      interest on this Note shall be computed on the basis of a 360-day year of twelve
      30-day months and actual days elapsed. No regular interest shall be payable
      on
      an Interest Payment Date on any portion of the principal amount of this Note
      which shall have been redeemed prior to such Interest Payment Date so long
      as
      the Company shall have complied in full with its obligations with respect to
      such redemption.

    

    All
      payments of principal of and premium, if any, interest, and other amounts on
      this Note shall be made in lawful money of the United States of America. All
      cash payments shall be made by wire transfer of immediately available funds
      to
      such account as the Holder may from time to time designate by written notice
      in
      accordance with the provisions of this Note. Whenever any amount expressed
      to be
      due by the terms of this Note is due on any day which is not a Business Day,
      the
      same shall instead be due on the next succeeding day which is a Business Day
      and, in the case of any Interest Payment Date which is not the date on which
      this Note is paid in full, the extension of the due date thereof shall not
      be
      taken into account for purposes of determining the amount of interest due on
      such date. Certain capitalized terms used in this Note are defined in Article
      VI.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    The
      obligations of the Company under this Note shall rank junior to (i) the existing
      line of credit with Presidential Financial Corporation of Delaware Valley
      (“Presidential”) and (ii) a working capital facility with a working capital
      lender(s) approved by Sigma in a principal amount not to exceed $10 million
      secured by a first priority security interest in all of the Company’s and its
      Subsidiaries’ assets and the proceeds thereof; provided that in no event shall
      the total line of credit with Presidential and the working capital facility
      exceed $10 million in the aggregate (collectively, the “Senior Debt”). The
      obligations of the Company under this Note shall rank senior to all other
      obligations of the Company for indebtedness for borrowed money or the purchase
      price of property other than the Senior Debt (except for indebtedness permitted
      under clause (9) of the definition of Permitted Indebtedness to the extent
      that
      such indebtedness is secured solely by the equipment purchased or leased).
      This
      Note is issued pursuant to the Note Purchase Agreement and the Holder of this
      Note and this Note are subject to the terms and entitled to the benefits of
      the
      Note Purchase Agreement. 

    

    The
      following terms shall apply to this Note:

    

    ARTICLE
      I

    

    OPTIONAL
      REDEMPTION

    

    1.1 Optional
      Redemption.
      (a)
      At
      any time during the Optional Redemption Period, the Company shall have the
      right
      to redeem at any one time all or from time to time any part of the outstanding
      principal amount of this Note at the Optional Redemption Price pursuant to
      this
      Section 1.1 on any Optional Redemption Date, so long as the following
      conditions are met:

    

    (1) during
      a
      period of 30 consecutive Trading Days ending not more than three Trading Days
      prior to the date the Company gives a particular Optional Redemption Notice,
      (A)
      on each such Trading Day the Market Price of the Common Stock shall be at least
      150 percent of the Conversion Price in effect on such Trading Day, and (B)
      the
      Average Daily Trading Volume Threshold is met;

    

    (2) on
      the
      date an Optional Redemption Notice is given and at all times to and including
      the applicable Optional Redemption Date, no Event of Default and no event which,
      with notice or passage of time, or both, would become an Event of Default has
      occurred and is continuing (unless the requirements of this clause (2) will
      be
      satisfied immediately after the redemption of this Note on the applicable
      Optional Redemption Date and the Company shall furnish Company Certificates
      to
      the Holder to such effect on the date the applicable Optional Redemption Notice
      is given to the Holder and on the applicable Optional Redemption Date);

     

    
      
        
        

      

      
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    (3) on
      the
      date an Optional Redemption Notice is given and at all times to and including
      the applicable Optional Redemption Date, no Repurchase Event has occurred with
      respect to which the Holder has the right to exercise repurchase rights pursuant
      to Sections 4.1 and 4.2 with respect to which the Holder has exercised such
      repurchase rights and the Repurchase Price has not been paid to the Holder
      and
      no event which, with notice or passage of time, or both, would become a
      Repurchase Event has occurred and is continuing;

    

    (4) on
      the
      date the Optional Redemption Notice is given and at all times thereafter to
      and
      including the applicable Optional Redemption Date, the Registration Statement
      shall be effective and available for use by the Holder and the holders of the
      Warrants for the resale of the shares of Common Stock issued and issuable upon
      conversion of this Note and issued or issuable upon exercise of the Warrant
      other than “Blackout Periods” permitted under the Note Purchase Agreement not to
      exceed two trading days during such period, as the case may be, and is
      reasonably expected to remain effective and available for such use for at least
      60 days after the applicable Optional Redemption Date; and 

    

    (5) on
      the
      date an Optional Redemption Notice is given, the Company has funds available
      to
      pay the Optional Redemption Price. 

    

    In
      order
      to exercise its right of redemption under this Section 1.1, the Company
      shall give an Optional Redemption Notice to the Holder not less than 30 Trading
      Days or more than 40 Trading Days prior to the Optional Redemption Date stating
      that: (1) the Company is exercising its right to redeem a specified portion
      (which may be all, if so specified by the Company) of this Note in accordance
      with this Section 1.1, (2) the principal amount of this Note to be
      redeemed, (3) the Optional Redemption Price, (4) the Optional Redemption Date
      and that all of the conditions of this Section 1.1 entitling the Company to
      call
      this Note for redemption have been met. On the applicable Optional Redemption
      Date (or such later date as the Holder surrenders this Note to the Company)
      the
      Company shall pay to or upon the order of the Holder, by wire transfer of
      immediately available funds to such account as shall be specified for such
      purpose by the Holder at least one Business Day prior to the Optional Redemption
      Date, an amount equal to the Optional Redemption Price of the portion (which
      may
      be all) of this Note to be redeemed. In each such case the aggregate principal
      amount of this Note to be so redeemed shall be at least $500,000.00 or such
      lesser aggregate principal amount of this Note as shall remain outstanding
      at
      the time an Optional Redemption Notice is given.

    

    1.2 No
      Prepayment.
      Except
      as specifically provided in Section 1.1, this Note may not be prepaid, redeemed
      or repurchased at the option of the Company prior to December 29, 2008.

     

    
      
        
        

      

      
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    ARTICLE
      II

     

    CERTAIN
      COVENANTS

    

    So
      long
      as the Company shall have any obligation under this Note for the payment of
      the
      indebtedness evidenced hereby:

    

    2.1 Limitations
      on Certain Indebtedness.
      The
      Company will not itself, and will not permit any Subsidiary to, create, assume,
      incur or in any manner become liable in respect of, including, without
      limitation, by reason of any business combination transaction (all of which
      are
      referred to herein as “incurring”), any Indebtedness other than Permitted
      Indebtedness.

    

    2.2 Payment
      of Obligations.
      The
      Company will pay and discharge, and will cause each Subsidiary to pay and
      discharge, all their respective material obligations and liabilities, including,
      without limitation, tax liabilities, except where the same may be contested
      in
      good faith by appropriate proceedings and the Company shall have established
      adequate reserves therefor on its books.

    

    2.3 Maintenance
      of Property; Insurance.
      (a) The
      Company will keep, and will cause each Subsidiary to keep, all property which,
      in the reasonable business judgment of the Company, is useful and necessary
      in
      its business in good working order and condition, ordinary wear and tear
      excepted.

    

    (b) The
      Company will maintain, and will cause each Subsidiary to maintain, with
      financially sound and responsible insurance companies, insurance, in at least
      such amounts and against such risks as is reasonably adequate for the conduct
      of
      their respective businesses and the value of their respective
      properties.

    

    2.4 Conduct
      of Business and Maintenance of Existence.
      The
      Company will continue, and will cause each Significant Subsidiary to continue,
      to engage in business of the same general type as now conducted by the Company,
      and will preserve, renew and keep in full force and effect, and will cause
      each
      Significant Subsidiary to preserve, renew and keep in full force and effect
      their respective corporate existence and their respective rights, privileges
      and
      franchises necessary or desirable in the normal conduct of business, except
      where the failure to do so would not have a material adverse effect on (i)
      the
      business, properties, operations, condition (financial or other), results of
      operation or prospects of the Company and the Subsidiaries, taken as a whole
      or
      (ii) the ability of the Company to pay and perform its obligations under the
      Transaction Documents.

    

    2.5 Compliance
      with Laws.
      The
      Company will comply, and will cause each Subsidiary to comply, in all material
      respects with all applicable laws, ordinances, rules, regulations, decisions,
      orders and requirements of governmental authorities and courts (including,
      without limitation, environmental laws) except where compliance therewith is
      contested in good faith by appropriate proceedings.

     

    
      
        
        

      

      
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    2.6 Investment
      Company Act.
      The
      Company will not be or become an open-end investment trust, unit investment
      trust or face-amount certificate company that is or is required to be registered
      under Section 8 of the Investment Company Act of 1940, as
      amended.

    

    2.7 Limitations
      on Asset Sales, Liquidations, Etc.; Certain Matters.
      The
      Company shall not

    

    (a) sell,
      convey or otherwise dispose of all or substantially all of the assets of the
      Company as an entirety or substantially as an entirety in a single transaction
      or in a series of related transactions; or

    

    (b) liquidate,
      dissolve or otherwise wind up the affairs of the Company.

    

    2.8 Limitation
      on Certain Issuances.
      The
      Company shall not (A) offer, sell or issue, or enter into any agreement,
      arrangement or understanding to offer, sell or issue, any Common Stock
      Equivalent for which the price at which the holder of such Common Stock
      Equivalent is entitled to acquire shares of Common Stock varies based on the
      market or trading price of the Common Stock.

    

    2.9 Limitations
      on Liens.  The
      Company will not itself, and will not permit any Subsidiary to, create, assume
      or suffer to exist any mortgage, lien, pledge, security interest or other charge
      or encumbrance (including, without limitation, the lien or retained security
      title of a conditional vendor), all of which are referred to below as “liens”,
      upon all or any part of its property of any character, whether owned at the
      date
      hereof or thereafter acquired, except:

    

    (a) liens
      upon any property of any Subsidiary or Subsidiaries as security for indebtedness
      owing by such Subsidiary to the Company;

    

    (b) liens
      securing this Note and the Other Notes ratably;

    

    (c) liens
      for
      taxes or assessments or governmental charges or levies on its property if such
      taxes or assessments or charges or levies shall not at the time be due and
      payable or if the amount, applicability, or validity of any such tax,
      assessment, charge or levy shall currently be contested in good faith by
      appropriate proceedings or necessary preliminary steps are being taken to
      contest, compromise or settle the amount thereof or to determine the
      applicability or validity thereof and if the Company or such Subsidiary, as
      the
      case may be, shall have set aside on its books reserves (segregated to the
      extent required by sound accounting practice) deemed by it adequate with respect
      thereto; deposits or pledges to secure payment of worker's compensation,
      unemployment insurance, old age pensions or other social security; deposits
      or
      pledges to secure performance of bids, tenders, contracts (other than contracts
      for the payment of money borrowed or credit extended), leases, public or
      statutory obligations, surety or appeal bonds, or other deposits or pledges
      for
      purposes of like general nature in the ordinary course of business; mechanics',
      carriers', workers', repairmen's or other like liens arising in the ordinary
      course of business securing obligations which are not overdue for a period
      of 60
      days, or which are in good faith being contested or litigated, or deposits
      to
      obtain the release of such liens; liens created by or resulting from any
      litigation or legal proceedings or proceedings being contested in good faith
      by
      appropriate proceedings, provided any execution levied thereon shall be stayed;
      leases made, or existing on property acquired, in the ordinary course of
      business; landlords' liens under leases to which the Company or any Subsidiary
      is a party; and zoning restrictions, easements, licenses or restrictions on
      the
      use of real property or minor irregularities in title thereto; provided that
      all
      such liens described in this subsection (d) do not, in the aggregate, materially
      impair the use of such property in the operations of the business of the Company
      or any Subsidiary or the value of such property for the purpose of such
      business;

     

    
      
        
        

      

      
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    (d) liens
      existing on the Issuance Date and listed in Schedule 4(r) to the Note Purchase
      Agreement; and

    

    (e) liens
      securing Indebtedness permitted in clauses (6) through (10) of the definition
      of
“Permitted Indebtedness.”

    

    2.10 Transactions
      with Affiliates.
      The
      Company will not pay, and will not permit any Subsidiary, directly or
      indirectly, to pay, any funds to or for the account of, make any investment
      (whether by acquisition of stock or Indebtedness, by loan, advance, transfer
      of
      property, guarantee or other agreement to pay, purchase or service, directly
      or
      indirectly, any Indebtedness, or otherwise) in, lease, sell, transfer or
      otherwise dispose of any assets, tangible or intangible, to, or participate
      in,
      or effect any transaction in connection with, any joint enterprise or other
      joint arrangement with, any Affiliate of the Company, except, on terms to the
      Company or such Subsidiary no less favorable than terms that could be obtained
      by the Company or such Subsidiary from a Person that is not an Affiliate of
      the
      Company, as determined in good faith by the Board of Directors; provided,
      however, this Section 2.10 shall not in any way restrict (x) advances and
      repayment of advances among the Company and BCI Communications, Inc. (“BCI”) or
      (y)
      regularly
      occurring transactions with Affiliates as disclosed in the Company’s filings
      with the SEC or which, on an annual basis, do not exceed the amount of $60,000
      in the aggregate.

    

    2.11 Rule
      144A Information Requirement.
      Within
      the period prior to the expiration of the holding period applicable to sales
      hereof under Rule 144(k) under the 1933 Act (or any successor provision), the
      Company shall, during any period in which it is not subject to Section 13 or
      15(d) under the 1934 Act, make available to the Holder and any prospective
      purchaser of this Note from the Holder, the information required pursuant to
      Rule 144A(d)(4) under the 1933 Act upon the request of the Holder and it will
      take such further action as the Holder may reasonably request, all to the extent
      required from time to time to enable the Holder to sell this Note without
      registration under the 1933 Act within the limitations of the exemption provided
      by Rule 144A, as Rule 144A may be amended from time to time. Upon the request
      of
      the Holder, the Company will deliver to the Holder a written statement as to
      whether it has complied with such requirements.

    

    2.12 Notice
      of Defaults.
      The
      Company shall notify the Holder promptly, but in any event not later than five
      days after the Company becomes aware of the fact, of any failure by the Company
      to comply with this Article II.

     

    
      
        
        

      

      
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    ARTICLE
      III

    

    EVENTS
      OF DEFAULT

    

    3.1 If
      any of
      the following events of default (each, an “Event of Default”) shall
      occur:

    

    (a) Failure
      to Pay Principal, Interest, Etc.
      The
      Company fails (1) to pay the principal, the Optional Redemption Price or the
      Repurchase Price hereof when due, whether at maturity, upon acceleration or
      otherwise, as applicable, or (2) to pay any installment of interest hereon
      when
      due; or

    

    (b) Conversion
      and the Shares.
      The
      Company fails to issue or cause to be issued shares of Common Stock to the
      Holder or the holder of any Other Note upon exercise of the conversion or
      purchase rights of the Holder or such holder within three Trading Days after
      the
      due date therefor in accordance with the terms of this Note, any Other Note
      or
      any Warrant or Other Warrant or fails to transfer any certificate for any such
      shares of Common Stock as and when required by this Note and the Note Purchase
      Agreement or the Other Note or any Warrant or Other Warrant, as the case may
      be;
      or

    

    (c) Breach
      of Certain Covenants.
      The
      Company fails to comply with Section 2.1, 2.7 or 2.8; or

    

    (d) Breach
      of Other Covenants.
      The
      Company fails to comply with any other provision of Article II of this Note
      (other than Section 2.1, 2.7 or 2.8) or breaches any other covenant or other
      term or condition of this Note or any of the other Transaction Documents (other
      than as specifically provided in clauses (a), (b), and (c) of this Section
      3.1)
      and such failure continues unremedied for 30 calendar days after receipt by
      the
      Company of notice thereof from the Holder; or

    

    (e) Breach
      of Representations and Warranties.
      Any
      representation or warranty of the Company made herein or in any agreement,
      statement or certificate given in writing pursuant hereto (or pursuant to any
      Transaction Documents) shall be false or misleading when made; or

    

    (f) Certain
      Voluntary Proceedings.
      The
      Company or any Subsidiary shall commence a voluntary case or other proceeding
      seeking liquidation, reorganization or other relief with respect to itself
      or
      its debts under any bankruptcy, insolvency or other similar law now or hereafter
      in effect or seeking the appointment of a trustee, receiver, liquidator,
      custodian or other similar official of it or any substantial part of its
      property, or shall consent to any such relief or to the appointment of or taking
      possession by any such official in an involuntary case or other proceeding
      commenced against it, or shall make a general assignment for the benefit of
      creditors, or shall fail generally to pay its debts as they become due or shall
      admit in writing its inability generally to pay its debts as they become due;
      or

     

    
      
        
        

      

      
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    (g) Certain
      Involuntary Proceedings.
      An
      involuntary case or other proceeding shall be commenced against the Company
      or
      any Subsidiary seeking liquidation, reorganization or other relief with respect
      to it or its debts under any bankruptcy, insolvency or other similar law now
      or
      hereafter in effect or seeking the appointment of a trustee, receiver,
      liquidator, custodian or other similar official of it or any substantial part
      of
      its property, and such involuntary case or other proceeding shall remain
      undismissed and unstayed for a period of 90 consecutive days; or

    

    (h) Judgments.
      Any
      court of competent jurisdiction shall enter one or more final judgments against
      the Company or any Subsidiary or any of their respective properties or other
      assets in an aggregate amount in excess of $250,000, which is not vacated,
      appealed, bonded, stayed, discharged, satisfied or waived for a period of 30
      consecutive days; or

    

    (i) Default
      Under Other Agreements.
      (a) The
      Company or any Subsidiary shall (i) default in any payment with respect to
      any
      Indebtedness for borrowed money (other than this Note) which Indebtedness has
      an
      outstanding principal amount in excess of $100,000 individually or $250,000
      in
      the aggregate for all such Indebtedness, beyond the period of grace, if any,
      provided in the instrument or agreement under which such Indebtedness was
      created or (ii) default in the observance or performance of any agreement,
      covenant or condition relating to any such Indebtedness or contained in any
      instrument or agreement evidencing, securing or relating thereto, or any other
      event shall occur or condition exist, the effect of which default or other
      event
      or condition is to cause, or to permit the holder or holders of such
      Indebtedness (or a trustee or agent on behalf of such holder or holders) to
      cause, any such Indebtedness to become due prior to its stated maturity and
      such
      default or event shall continue beyond the period of grace, if any, provided
      in
      the instrument or agreement under which such Indebtedness was created (after
      giving effect to any consent or waiver obtained and then in effect thereunder)
      and such default shall continue for five days (or to such earlier date as the
      holder of any other Indebtedness shall declare the same due and payable by
      reason of such default; or (b) any Indebtedness of the Company or any Subsidiary
      which has an outstanding principal amount in excess of the $100,000 individually
      or $250,000 in the aggregate for all such Indebtedness shall, in accordance
      with
      its terms, be declared to be due and payable, or required to be prepaid other
      than by a regularly scheduled or required payment prior to the stated maturity
      thereof; 

    

    then,
      

    

    (1) upon
      the
      occurrence and during the continuation of any Event of Default specified in
      clause (a), (b), (c), or (e) of this Section 3.1, at the option of the
      Holder, and upon the occurrence of any Event of Default specified in clause
      (f)
      or (g) of this Section 3.1: (X) the Company shall pay to the Holder an
      amount equal to the outstanding principal amount of this Note plus
      accrued
      and unpaid interest on such principal amount to the date of payment plus
      accrued
      and unpaid Default Interest, if any, thereon at the rate provided in this Note
      to the date of payment, (Y) all other amounts payable hereunder or under any
      of
      the other Transaction Documents shall immediately become due and payable, all
      without demand, presentment or notice, all of which hereby are expressly waived,
      together with all costs, including, without limitation, reasonable legal fees
      and expenses of collection, and (Z) the Holder shall be entitled to exercise
      all
      other rights and remedies available at law or in equity; and

     

    
      
        
        

      

      
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    (2) upon
      the
      occurrence and during the continuation of any Event of Default specified in
      clause (d), (h) or (i) of this Section 3.1: (A) if any Event of Default
      continues during the period of 30 consecutive days following the occurrence
      of
      such Event of Default, then thereafter so long as any Event of Default is
      continuing (i) at the option of the Holder the Company shall pay to the Holder
      an amount equal to the outstanding principal amount of this Note plus
      accrued
      and unpaid interest on such principal amount to the date of payment plus
      accrued
      and unpaid Default Interest, if any, thereon at the rate provided in this Note
      to the date of payment, (ii) all other amounts payable hereunder shall
      immediately become due and payable, all without demand, presentment or notice,
      all of which hereby are expressly waived, together with all costs, including,
      without limitation, reasonable legal fees and expenses, of collection, and
      (B)
      the Holder shall be entitled to exercise all rights and remedies available
      at
      law or in equity other than those set forth in the immediately preceding clause
      (A).

    

    ARTICLE
      IV

    

    REPURCHASE
      UPON A REPURCHASE EVENT 

    

    4.1 Repurchase
      Right Upon Repurchase Event.
      If a
      Repurchase Event occurs, in addition to any other right of the Holder, the
      Holder shall have the right, at the Holder’s option, to require the Company to
      repurchase all of this Note, or any portion hereof on the repurchase date that
      is five Business Days after the date of the Holder Notice delivered with respect
      to such Repurchase Event. The Holder shall have the right to require the Company
      to repurchase all or any such portion of this Note if a Repurchase Event occurs
      at any time while any portion of the principal amount of this Note is
      outstanding at a price equal to the Repurchase Price.

    

    4.2 Notices;
      Method of Exercising Repurchase Rights, Etc.
      (a) On
      or before the fifth Business Day after the occurrence of a Repurchase Event,
      the
      Company shall give to the Holder a Company Notice of the occurrence of the
      Repurchase Event and of the repurchase right set forth herein arising as a
      result thereof. Such Company Notice shall set forth:

    

    (i) the
      date
      by which the repurchase right must be exercised, and

    

    (ii) a
      description of the procedure (set forth in this Section 4.2) which the
      Holder must follow to exercise the repurchase right.

    

    No
      failure of the Company to give a Company Notice or defect therein shall limit
      the Holder’s right to exercise the repurchase right or affect the validity of
      the proceedings for the repurchase of this Note or portion hereof.

     

    
      
        
        

      

      
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    (b) To
      exercise the repurchase right, the Holder shall deliver to the Company on or
      before the 30th day after a Company Notice (or if no such Company Notice has
      been given, within 40 days after the Holder first learns of the Repurchase
      Event) (i) a Holder Notice setting forth the name of the Holder and the
      principal amount of this Note to be repurchased, and (ii) this Note, duly
      endorsed for transfer to the Company of the portion of the outstanding principal
      amount of this Note to be repurchased. A Holder Notice may be revoked by the
      Holder at any time prior to the time the Company pays the applicable Repurchase
      Price to the Holder.

    

    (c) If
      the
      Holder shall have given a Holder Notice, then on the date which is five Business
      Days after the date such Holder Notice is given (or such later date as the
      Holder surrenders this Note) the Company shall make payment in immediately
      available funds of the applicable Repurchase Price to such account as specified
      by the Holder in writing to the Company at least one Business Day prior to
      the
      applicable repurchase date.

    

    4.3 Other.
      A Holder
      Notice given by the Holder shall be deemed for all purposes to be in proper
      form
      unless the Company notifies the Holder within three Business Days after such
      Holder Notice has been given (which notice shall specify all defects in such
      Holder Notice), and any Holder Notice containing any such defect shall
      nonetheless be effective on the date given if the Holder promptly undertakes
      to
      correct all such defects. No such claim of defect shall limit or delay
      performance of the Company's obligation to repurchase any portion of this Note,
      the repurchase of which is not in dispute.

    

    ARTICLE
      V

    

    CONVERSION

    

    5.1 Right
      to Convert.
      Subject
      to and upon compliance with the provisions of this Note, the Holder shall have
      the right, at the Holder's option, at any time prior to the close of business
      on
      the Maturity Date (except that, if the Holder shall have exercised repurchase
      rights under Sections 4.1 and 4.2 or the Company shall have exercised its
      redemption rights under Section 1.1, such conversion right shall terminate
      with
      respect to the portion of this Note to be repurchased or redeemed, as the case
      may be, at the close of business on the last Trading Day prior to the later
      of
      (x) the Optional Redemption Date or the date the Company is required to make
      such repurchase, as the case may be, or (y) the date the Company pays or
      deposits in accordance with Section 7.10 the applicable Repurchase Price or
      Optional Redemption Price unless in any such case the Company shall default
      in
      payment due upon repurchase or redemption hereof) to convert the principal
      amount of this Note, or any portion of such principal amount which is at least
      $10,000 (or such lesser principal amount of this Note as shall be outstanding
      at
      such time), plus accrued and unpaid interest, into that number of fully paid
      and
      non-assessable shares of Common Stock (as such shares shall then be constituted)
      obtained by dividing (1) the sum of (x) the principal amount of this Note or
      portion thereof being converted plus
      (y)
      accrued and unpaid interest on the portion of the principal amount of this
      Note
      being converted to the applicable Conversion Date plus
      (z)
      accrued and unpaid Default Interest, if any, on the amount referred to in the
      immediately preceding clause (y) to the applicable Conversion Date by
      (2)
      the
      Conversion Price in effect on the applicable Conversion Date, by giving a
      Conversion Notice in the manner provided in Section 5.2; provided,
      however, that,
      if
      at any time this Note is converted in whole or in part pursuant to this Section
      5.1 and after the Charter Amendment is effected or required to be effected
      in
      accordance with the Company’s obligations under the Note Purchase Agreement, the
      Company does not have available for issuance upon such conversion as authorized
      and unissued shares or in its treasury at least the number of shares of Common
      Stock required to be issued pursuant hereto, then, at the election of the Holder
      made by notice from the Holder to the Company, this Note (or portion hereof
      as
      to which conversion has been requested), to the extent that sufficient shares
      of
      Common Stock are not then available for issuance upon conversion, shall be
      converted into the right to receive from the Company, in lieu of the shares
      of
      Common Stock into which this Note or such portion hereof would otherwise be
      converted and which the Company is unable to issue, payment in an amount equal
      to the product obtained by multiplying (x) the number of shares of Common Stock
      which the Company is unable to issue times
      (y)
      the
      arithmetic average of the Market Price for the Common Stock during the five
      consecutive Trading Days immediately prior to the applicable Conversion Date.
      Any such payment shall, for all purposes of this Note, be deemed to be a payment
      of principal plus a premium equal to the total amount payable less the principal
      portion of this Note converted as to which such payment is required to be made
      because shares of Common Stock are not then available for issuance upon such
      conversion. The Holder is not entitled to any rights of a holder of Common
      Stock
      until the Holder has converted this Note to Common Stock, and only to the extent
      this Note is deemed to have been converted to Common Stock under this Article
      V.
      For purposes of Sections 5.5 and 5.6, whenever a provision references the shares
      of Common Stock into which this Note (or a portion hereof) is convertible or
      the
      shares of Common Stock issuable upon conversion of this Note (or a portion
      hereof) or words of similar import, any determination required by such provision
      shall be made as if a sufficient number of shares of Common Stock were then
      available for issuance upon conversion in full of this Note.

     

    
      
        
        

      

      
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    5.2 Exercise
      of Conversion Privilege; Issuance of Common Stock on Conversion; No Adjustment
      for Interest or Dividends.
      (a) In
      order to exercise the conversion privilege with respect to this Note, the Holder
      shall give a Conversion Notice (or such other notice which is acceptable to
      the
      Company) to the Company and the Transfer Agent or to the office or agency
      designated by the Company for such purpose by notice to the Holder. A Conversion
      Notice may be given by telephone line facsimile transmission to the numbers
      set
      forth on the form of Conversion Notice.

    

    (b) As
      promptly as practicable, but in no event later than three Trading Days, after
      a
      Conversion Notice is given, the Company shall issue and shall deliver to the
      Holder or the Holder's designee the number of full shares of Common Stock
      issuable upon such conversion of this Note or portion hereof in accordance
      with
      the provisions of this Article and deliver a check or cash in respect of any
      fractional interest in respect of a share of Common Stock arising upon such
      conversion, as provided in Section 5.2(f) and, if applicable, any cash payment
      required pursuant to the proviso to the first sentence of Section 5.1 (which
      payment, if any, shall be paid no later than five Trading Days after the
      applicable Conversion Date).

    

    (c) Each
      conversion of this Note (or portion hereof) shall be deemed to have been
      effected on the applicable Conversion Date, and the person in whose name any
      certificate or certificates for shares of Common Stock shall be issuable upon
      such conversion shall be deemed to have become on such Conversion Date the
      holder of record of the shares represented thereby; provided,
      however, that
      if a
      Conversion Date is a date on which the stock transfer books of the Company
      shall
      be closed such conversion shall constitute the person in whose name the
      certificates are to be issued as the record holder thereof for all purposes
      on
      the next succeeding day on which such stock transfer books are open, but such
      conversion shall be at the Conversion Price in effect on the applicable
      Conversion Date.

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    

    (d) The
      Company shall notify the Holder of any claim by the Company of manifest error
      in
      a Conversion Notice within two Trading Days after the Holder gives such
      Conversion Notice and no such claim of error shall limit or delay performance
      of
      the Company's obligation to issue upon such conversion the number of shares
      of
      Common Stock which are not in dispute. A Conversion Notice shall be deemed
      for
      all purposes to be in proper form unless the Company notifies the Holder by
      telephone line facsimile transmission within two Trading Days after a Conversion
      Notice has been given (which notice from the Company shall specify all defects
      in the Conversion Notice) and any Conversion Notice containing any such defect
      shall nonetheless be effective on the date given if the Holder promptly
      undertakes to correct all such defects. The Company shall not be required to
      pay
      any tax which may be payable in respect of any transfer involved in the issuance
      and delivery of shares of Common Stock or other securities or property on
      conversion of this Note in a name other than that of the Holder, and the Company
      shall not be required to issue or deliver any such shares or other securities
      or
      property unless and until the person or persons requesting the issuance thereof
      shall have paid to the Company the amount of any such tax or shall have
      established to the satisfaction of the Company that such tax has been paid.
      The
      Holder shall be responsible for the amount of any withholding tax payable in
      connection with any conversion of this Note.

    

    (e) (1)
      If
      the Holder shall have given a Conversion Notice in accordance with the terms
      of
      this Note, the Company's obligation to issue and deliver the certificates for
      Common Stock shall be absolute and unconditional, irrespective of any action
      or
      inaction by the Holder to enforce the same, any waiver or consent with respect
      to any provision hereof, the recovery of any judgment against any person or
      any
      action to enforce the same, any failure or delay in the enforcement of any
      other
      obligation of the Company to the Holder, or any setoff, counterclaim,
      recoupment, limitation or termination, or any breach or alleged breach by the
      Holder or any other person of any obligation to the Company or any violation
      or
      alleged violation of law by the Holder or any other person, and irrespective
      of
      any other circumstance which might otherwise limit such obligation of the
      Company to the Holder in connection with such conversion; provided,
      however, that
      nothing herein shall limit or prejudice the right of the Company to pursue
      any
      such claim in any other manner permitted by applicable law. The occurrence
      of an
      event which requires an adjustment of the Conversion Price as contemplated
      by
      Section 5.3 shall in no way restrict or delay the right of the Holder to receive
      certificates for Common Stock upon conversion of this Note and the Company
      shall
      use its best efforts to implement such adjustment on terms reasonably acceptable
      to the Holder within two Trading Days of such occurrence.

     

    
      
        
        

      

      
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    (2) If
      in any
      case the Company shall fail to issue and deliver the shares of Common Stock
      to
      the Holder in connection with a particular conversion of this Note within three
      Trading Days after the Holder gives the Conversion Notice for such conversion,
      in addition to any other liabilities the Company may have hereunder and under
      applicable law (A) the Company shall pay or reimburse the Holder on demand
      for
      all out-of-pocket expenses, including, without limitation, reasonable fees
      and
      expenses of legal counsel, incurred by the Holder as a result of such failure,
      (B) if as a result of such failure the Holder shall suffer any direct damages
      or
      liabilities from such failure (including, without limitation, margin interest
      and the cost of purchasing securities to cover a sale (whether by the Holder
      or
      the Holder's securities broker) or borrowing of shares of Common Stock by the
      Holder for purposes of settling any trade involving a sale of shares of Common
      Stock made by the Holder during the period beginning on the Issuance Date and
      ending on the date the Company delivers or causes to be delivered to the Holder
      such shares of Common Stock), then the Company shall upon demand of the Holder
      pay to the Holder an amount equal to the actual direct, out-of-pocket damages
      and liabilities suffered by the Holder by reason thereof which the Holder
      documents to the reasonable satisfaction of the Company, and (C) the Holder
      may
      by written notice (which may be given by mail, courier, personal service or
      telephone line facsimile transmission) or oral notice (promptly confirmed in
      writing), given at any time prior to delivery to the Holder of the shares of
      Common Stock issuable in connection with such exercise of the Holder's
      conversion right, rescind such exercise and the Conversion Notice relating
      thereto, in which case the Holder shall thereafter be entitled to convert that
      portion of this Note as to which such exercise is so rescinded and to exercise
      its other rights and remedies with respect to such failure by the Company.
      Notwithstanding the foregoing the Company shall not be liable to the Holder
      under clause (B) of the immediately preceding sentence to the extent the failure
      of the Company to deliver or to cause to be delivered such shares of Common
      Stock results from fire, flood, storm, earthquake, shipwreck, strike, war,
      acts
      of terrorism, crash involving facilities of a common carrier, acts of God,
      or
      any similar event outside the control of the Company (it being understood that
      the action or failure to act of the Transfer Agent shall not be deemed an event
      outside the control of the Company except to the extent resulting from fire,
      flood, storm, earthquake, shipwreck, strike, war, acts of terrorism, crash
      involving facilities of a common carrier, acts of God, or any similar event
      outside the control of the Transfer Agent or the bankruptcy, liquidation or
      reorganization of the Transfer Agent under any bankruptcy, insolvency or other
      similar law). The Holder shall notify the Company in writing (or by telephone
      conversation, confirmed in writing) as promptly as practicable following the
      third Trading Day after the Holder gives a Conversion Notice if the Holder
      becomes aware that such shares of Common Stock so issuable have not been
      received as provided herein, but any failure so to give such notice shall not
      affect the Holder's rights under this Note or otherwise. If the Holder shall
      have exercised the conversion right in any particular instance and either (1)
      the Company shall notify the Holder on or after the date the Holder gives such
      Conversion Notice that the shares of Common Stock issuable upon such conversion
      might not be delivered within three Trading Days after the date the Holder
      gives
      such Conversion Notice or (2) the Holder learns after the date which is three
      Trading Days after the date the Holder gives such Conversion Notice that the
      Holder has not received such shares of Common Stock, then, without releasing
      the
      Company of its obligations with respect thereto, from and after the Trading
      Day
      next succeeding the earlier of the events described in the preceding clauses
      (1)
      and (2) of this sentence the Holder shall make reasonable efforts not to sell
      shares of Common Stock in anticipation of receipt of such shares of Common
      Stock
      in a manner which is likely to increase materially the liability of the Company
      under clause (2) of the second preceding sentence.

     

    
      
        
        

      

      
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    (f) No
      fractional shares of Common Stock shall be issued upon conversion of this Note
      but, in lieu of any fraction of a share of Common Stock which would otherwise
      be
      issuable in respect of such conversion, the Company may round the number of
      shares of Common Stock issued on such conversion up to the next highest whole
      share or may pay lawful money of the United States of America for such
      fractional share, based on a value of one share of Common Stock being equal
      to
      the Market Price of the Common Stock on the applicable Conversion
      Date.

    

    5.3 Adjustment
      of Conversion Price.
      The
      Conversion Price shall be adjusted from time to time by the Company as
      follows:

    

    (a) In
      case
      the Company shall on or after the Issuance Date pay a dividend or make a
      distribution to all holders of the outstanding Common Stock in shares of Common
      Stock, the Conversion Price in effect at the opening of business on the date
      following the date fixed for the determination of stockholders entitled to
      receive such dividend or other distribution shall be reduced by multiplying
      such
      Conversion Price by a fraction of which the numerator shall be the number of
      shares of Common Stock outstanding at the close of business on the Record Date
      fixed for such determination and the denominator shall be the sum of such number
      of shares and the total number of shares constituting such dividend or other
      distribution, such reduction to become effective immediately after the opening
      of business on the day following the Record Date. If any dividend or
      distribution of the type described in this Section 5.3(a) is declared but not
      so
      paid or made, the Conversion Price shall again be adjusted to the Conversion
      Price which would then be in effect if such dividend or distribution had not
      been declared.

    

    (b) In
      case
      the Company shall on or after the Issuance Date issue rights or warrants (other
      than any rights or warrants referred to in Section 5.3(d)) to all holders of
      its
      outstanding shares of Common Stock entitling them (for a period expiring within
      45 days after the date fixed for the determination of stockholders entitled
      to
      receive such rights or warrants) to subscribe for or purchase shares of Common
      Stock at a price per share less than the Current Market Price on the Record
      Date
      fixed for the determination of stockholders entitled to receive such rights
      or
      warrants, the Conversion Price shall be adjusted so that the same shall equal
      the price determined by multiplying the Conversion Price in effect at the
      opening of business on the date after such Record Date by a fraction of which
      the numerator shall be the number of shares of Common Stock outstanding at
      the
      close of business on the Record Date plus the number of shares which the
      aggregate offering price of the total number of shares so offered would purchase
      at such Current Market Price, and the denominator shall be the number of shares
      of Common Stock outstanding on the close of business on the Record Date plus
      the
      total number of additional shares of Common Stock so offered for subscription
      or
      purchase. Such adjustment shall become effective immediately after the opening
      of business on the day following the Record Date fixed for determination of
      stockholders entitled to receive such rights or warrants. To the extent that
      shares of Common Stock are not delivered pursuant to such rights or warrants,
      upon the expiration or termination of such rights or warrants, the Conversion
      Price shall be readjusted to the Conversion Price which would then be in effect
      had the adjustments made upon the issuance of such rights or warrants been
      made
      on the basis of delivery of only the number of shares of Common Stock actually
      delivered. In the event that such rights or warrants are not so issued, the
      Conversion Price shall again be adjusted to be the Conversion Price which would
      then be in effect if such date fixed for the determination of stockholders
      entitled to receive such rights or warrants had not been fixed. In determining
      whether any rights or warrants entitle the holder to subscribe for or purchase
      shares of Common Stock at less than such Current Market Price, and in
      determining the aggregate offering price of such shares of Common Stock, there
      shall be taken into account any consideration received for such rights or
      warrants, the value of such consideration, if other than cash, to be determined
      by the Board of Directors.

     

    
      
        
        

      

      
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    (c) In
      case
      the outstanding shares of Common Stock shall on or after the Issuance Date
      be
      subdivided into a greater number of shares of Common Stock, the Conversion
      Price
      in effect at the opening of business on the earlier of the day following the
      day
      upon which such subdivision becomes effective and the day on which “ex-” trading
      of the Common Stock begins with respect to such subdivision shall be
      proportionately reduced, and conversely, in case outstanding shares of Common
      Stock shall be combined into a smaller number of shares of Common Stock, the
      Conversion Price in effect at the opening of business on the earlier of the
      day
      following the day upon which such combination becomes effective and the day
      on
      which “ex-” trading of the Common Stock with respect to such combination begins
      shall be proportionately increased, such reduction or increase, as the case
      may
      be, to become effective immediately after the opening of business on the earlier
      of the day following the day upon which such subdivision or combination becomes
      effective and the day on which “ex-” trading of the Common Stock begins with
      respect to such subdivision or combination.

    

    (d) In
      case
      the Company shall on or after the Issuance Date, by dividend or otherwise,
      distribute to all holders of its Common Stock shares of any class of capital
      stock of the Company (other than any dividends or distributions to which Section
      5.3(a) applies) or evidences of its indebtedness, cash or other assets
      (including securities, but excluding any rights or warrants referred to in
      Section 5.3(b) and dividends and distributions paid exclusively in cash and
      excluding any capital stock, evidences of indebtedness, cash or assets
      distributed upon a merger or consolidation to which Section 5.4 applies) (the
      foregoing hereinafter in this Section 5.3(d) called the “Securities”)), then, in
      each such case, subject to the second paragraph of this Section 5.3(d), the
      Conversion Price shall be reduced so that the same shall be equal to the price
      determined by multiplying the Conversion Price in effect immediately prior
      to
      the close of business on the Record Date with respect to such distribution
      by a
      fraction of which the numerator shall be the Current Market Price on such date
      less the fair market value (as determined by the Board of Directors, whose
      determination shall be conclusive and described in a Board Resolution) on such
      date of the portion of the Securities so distributed applicable to one share
      of
      Common Stock and the denominator shall be such Current Market Price, such
      reduction to become effective immediately prior to the opening of business
      on
      the day following the Record Date; provided,
      however, that
      in
      the event the then fair market value (as so determined) of the portion of the
      Securities so distributed applicable to one share of Common Stock is equal
      to or
      greater than the Current Market Price on the Record Date, in lieu of the
      foregoing adjustment, adequate provision shall be made so that the Holder shall
      have the right to receive upon conversion of this Note (or any portion hereof)
      the amount of Securities such holder would have received had such holder
      converted this Note (or portion hereof) immediately prior to such Record Date.
      In the event that such dividend or distribution is not so paid or made, the
      Conversion Price shall again be adjusted to be the Conversion Price which would
      then be in effect if such dividend or distribution had not been declared. If
      the
      Board of Directors determines the fair market value of any distribution for
      purposes of this Section 5.3(d) by reference to the actual or when issued
      trading market for any Securities comprising all or part of such distribution,
      it must in doing so consider the prices in such market over the same period
      used
      in computing the Current Market Price, to the extent possible.

     

    
      
        
        

      

      
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    Rights
      or
      warrants distributed by the Company to all holders of Common Stock entitling
      the
      holders thereof to subscribe for or purchase shares of the Company's capital
      stock (either initially or under certain circumstances), which rights or
      warrants, until the occurrence of a specified event or events (a “Trigger
      Event”): (i) are deemed to be transferred with such shares of Common Stock; (ii)
      are not exercisable; and (iii) are also issued in respect of future issuances
      of
      Common Stock, shall not be deemed to have been distributed for purposes of
      this
      Section 5.3 (and no adjustment to the Conversion Price under this Section 5.3
      will be required) until the occurrence of the earliest Trigger Event. If any
      such rights or warrants, including any such existing rights or warrants
      distributed prior to the Issuance Date, are subject to Trigger Events, upon
      the
      satisfaction of each of which such rights or warrants shall become exercisable
      to purchase different securities, evidences of indebtedness or other assets,
      then the occurrence of each such Trigger Event shall be deemed to be such date
      of issuance and record date with respect to new rights or warrants (and a
      termination or expiration of the existing rights or warrants without exercise
      by
      the holder thereof) (so that, by way of illustration and not limitation, the
      dates of issuance of any such rights shall be deemed to be the dates on which
      such rights become exercisable to purchase capital stock of the Company, and
      not
      the date on which such rights may be issued, or may become evidenced by separate
      certificates, if such rights are not then so exercisable). In addition, in
      the
      event of any distribution of rights or warrants, or any Trigger Event with
      respect thereto, that was counted for purposes of calculating a distribution
      amount for which an adjustment to the Conversion Price under this Section 5.3
      was made (1) in the case of any such rights or warrants which shall all have
      been redeemed or repurchased without exercise by any holders thereof, the
      Conversion Price shall be readjusted upon such final redemption or repurchase
      to
      give effect to such distribution or Trigger Event, as the case may be, as though
      it were a cash distribution, equal to the per share redemption or repurchase
      price received by a holder or holders of Common Stock with respect to such
      rights or warrants (assuming such holder had retained such rights or warrants),
      made to all holders of Common Stock as of the date of such redemption or
      repurchase, and (2) in the case of such rights or warrants which shall have
      expired or been terminated without exercise by any holders thereof, the
      Conversion Price shall be readjusted as if such rights and warrants had not
      been
      issued.

    

    For
      purposes of this Section 5.3(d) and Sections 5.3(a) and (b), any dividend or
      distribution to which this Section 5.3(d) is applicable that also includes
      shares of Common Stock, or rights or warrants to subscribe for or purchase
      shares of Common Stock to which Section 5.3(b) applies (or both), shall be
      deemed instead to be (1) a dividend or distribution of the evidences of
      indebtedness, assets, shares of capital stock, rights or warrants other than
      such shares of Common Stock or rights or warrants to which Section 5.3(b)
      applies (and any Conversion Price reduction required by this Section 5.3(d)
      with
      respect to such dividend or distribution shall then be made) immediately
      followed by (2) a dividend or distribution of such shares of Common Stock or
      such rights or warrants (and any further Conversion Price reduction required
      by
      Sections 5.3(a) and (b) with respect to such dividend or distribution shall
      then
      be made), except (A) the Record Date of such dividend or distribution shall
      be
      substituted as “the date fixed for the determination of stockholders entitled to
      receive such dividend or other distribution”, “Record Date fixed for such
      determination” and “Record Date” within the meaning of Section 5.3(a) and as
“the date fixed for the determination of stockholders entitled to receive such
      rights or warrants”, “the Record Date fixed for the determination of the
      stockholders entitled to receive such rights or warrants” and “such Record Date”
within the meaning of Section 5.3(b) and (B) any shares of Common Stock included
      in such dividend or distribution shall not be deemed “outstanding at the close
      of business on the Record Date fixed for such determination” within the meaning
      of Section 5.3(a).

     

    
      
        
        

      

      
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    (e) In
      case
      the Company shall on or after the Issuance Date, by dividend or otherwise,
      distribute to all holders of its Common Stock cash (excluding any cash that
      is
      distributed upon a merger or consolidation to which Section 5.4 applies or
      as
      part of a distribution referred to in Section 5.3(d)) in an aggregate amount
      that, combined with (1) the aggregate amount of any other such distributions
      to
      all holders of its Common Stock made exclusively in cash within the 12 months
      preceding the date of payment of such distribution, and in respect of which
      no
      adjustment pursuant to this Section 5.3(e) has been made, and (2) the aggregate
      of any cash plus the fair market value (as determined by the Board of Directors,
      whose determination shall be conclusive and set forth in a Board Resolution)
      of
      consideration payable in respect of any Tender Offer by the Company or any
      Subsidiary for all or any portion of the Common Stock concluded within the
      12
      months preceding the date of payment of such distribution, and in respect of
      which no adjustment pursuant to Section 5.3(f) has been made, exceeds 10% of
      the
      product of (x) the Current Market Price on the Record Date with respect to
      such
      distribution times
      (y)
      the
      number of shares of Common Stock outstanding on such date, then, and in each
      such case, immediately after the close of business on such date, unless the
      Company elects to reserve such cash for distribution to the Holder upon the
      conversion of this Note (and shall have made adequate provision) so that the
      Holder will receive upon such conversion, in addition to the shares of Common
      Stock to which the Holder is entitled, the amount of cash which the Holder
      would
      have received if the Holder had, immediately prior to the Record Date for such
      distribution of cash, converted this Note into Common Stock, the Conversion
      Price shall be reduced so that the same shall equal the price determined by
      multiplying the Conversion Price in effect immediately prior to the close of
      business on such Record Date by a fraction (i) the numerator of which shall
      be
      equal to the Current Market Price on the Record Date less an amount equal to
      the
      quotient of (x) the excess of such combined amount over such 10% and (y) the
      number of shares of Common Stock outstanding on the Record Date and (ii) the
      denominator of which shall be equal to the Current Market Price on the Record
      Date; provided,
      however, that
      in
      the event the portion of the cash so distributed applicable to one share of
      Common Stock is equal to or greater than the Current Market Price of the Common
      Stock on the Record Date, in lieu of the foregoing adjustment, adequate
      provision shall be made so that the Holder shall have the right to receive
      upon
      conversion of this Note (or any portion hereof) the amount of cash the Holder
      would have received had the Holder converted this Note (or portion hereof)
      immediately prior to such Record Date. In the event that such dividend or
      distribution is not so paid or made, the Conversion Price shall again be
      adjusted to be the Conversion Price which would then be in effect if such
      dividend or distribution had not been declared.

     

    
      
        
        

      

      
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    (f) In
      case a
      Tender Offer on or after the Issuance Date made by the Company or any Subsidiary
      for all or any portion of the Common Stock shall expire and such Tender Offer
      (as amended upon the expiration thereof) shall require the payment to
      stockholders (based on the acceptance (up to any maximum specified in the terms
      of the Tender Offer) of Purchased Shares (as defined below)) of an aggregate
      consideration having a fair market value (as determined by the Board of
      Directors, whose determination shall be conclusive and described in a Board
      Resolution) that combined together with (1) the aggregate of the cash plus
      the
      fair market value (as determined by the Board of Directors, whose determination
      shall be conclusive and described in a Board Resolution), as of the expiration
      of such Tender Offer, of consideration payable in respect of any other Tender
      Offers, by the Company or any Subsidiary for all or any portion of the Common
      Stock expiring within the 12 months preceding the expiration of such Tender
      Offer and in respect of which no adjustment pursuant to this Section 5.3(f)
      has
      been made and (2) the aggregate amount of any distributions to all holders
      of
      the Company's Common Stock made exclusively in cash within 12 months preceding
      the expiration of such Tender Offer and in respect of which no adjustment
      pursuant to Section 5.3(e) has been made, exceeds 10% of the product of (i)
      the
      Current Market Price as of the last time (the “Expiration Time”) tenders could
      have been made pursuant to such Tender Offer (as it may be amended) times
      (ii) the
      number of shares of Common Stock outstanding (including any tendered shares)
      at
      the Expiration Time, then, and in each such case, immediately prior to the
      opening of business on the day after the date of the Expiration Time, the
      Conversion Price shall be adjusted so that the same shall equal the price
      determined by multiplying the Conversion Price in effect immediately prior
      to
      close of business on the date of the Expiration Time by a fraction of which
      the
      numerator shall be the number of shares of Common Stock outstanding (including
      any tendered shares) at the Expiration Time multiplied by the Current Market
      Price of the Common Stock on the Trading Day next succeeding the Expiration
      Time
      and the denominator shall be the sum of (x) the fair market value (determined
      as
      aforesaid) of the aggregate consideration payable to stockholders based on
      the
      acceptance (up to any maximum specified in the terms of the Tender Offer) of
      all
      shares validly tendered and not withdrawn as of the Expiration Time (the shares
      deemed so accepted, up to any such maximum, being referred to as the “Purchased
      Shares”) and (y) the product of the number of shares of Common Stock outstanding
      (less any Purchased Shares) at the Expiration Time and the Current Market Price
      of the Common Stock on the Trading Day next succeeding the Expiration Time,
      such
      reduction (if any) to become effective immediately prior to the opening of
      business on the day following the Expiration Time. In the event that the Company
      is obligated to purchase shares pursuant to any such Tender Offer, but the
      Company is permanently prevented by applicable law from effecting any such
      purchases or all such purchases are rescinded, the Conversion Price shall again
      be adjusted to be the Conversion Price which would then be in effect if such
      Tender Offer had not been made. If the application of this Section 5.3(f) to
      any
      Tender Offer would result in an increase in the Conversion Price, no adjustment
      shall be made for such Tender Offer under this Section 5.3(f).

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    

    (g) (1)
      In
      case at any time on or after the Issuance Date the Company shall issue shares
      of
      its Common Stock or Common Stock Equivalents (collectively, the “Newly Issued
      Shares”), other than an issuance pro rata to all holders of its outstanding
      Common Stock and other than an issuance in respect of which Section 5.3(h)
      is
      applicable, at a price below the Current Fair Market Value of the Common Stock
      at the time of such issuance, then following such issuance of Newly Issued
      Shares the Conversion Price shall be adjusted as provided in this Section
      5.3(g). The Conversion Price following any such adjustment shall be determined
      by multiplying the Conversion Price immediately prior to such adjustment by
      a
      fraction, of which the numerator shall be the sum of (a) the number of shares
      of
      Common Stock outstanding immediately prior to the issuance of the Newly Issued
      Shares (calculated on a fully-diluted basis assuming the conversion of all
      options, warrants, purchase rights or convertible securities which are
      exercisable at the time of the issuance of the Newly Issued Shares) plus
      (b)
      the
      number of shares of Common Stock which the aggregate consideration, if any,
      received by the Company for the number of Newly Issued Shares would purchase
      at
      a price equal to the Current Fair Market Value of the Common Stock at the time
      of such issuance, and the denominator shall be the sum of (X) the number of
      shares of Common Stock outstanding immediately prior to the issuance of the
      Newly Issued Shares (calculated on a fully-diluted basis assuming the exercise
      or conversion of all options, warrants, purchase rights or convertible
      securities which are exercisable or convertible at the time of the issuance
      of
      the Newly Issued Shares) plus
      (Y)
      the
      number of Newly Issued Shares. The adjustment provided for in this Section
      5.3(g) may be expressed as the following mathematical formula:

    

      
        	 	
                (
                  O +(C / FMV))

              	
                x
                  CP

              
	
                NCP =

              	
                      
                  ( O + N )

              	 

      

       

    

    where:

    

    
      	 	
              C

            	
              =

            	
              aggregate
                consideration received by the Company for the Newly Issued
                Shares

            

    

    

    
      	 	
              N

            	
              =

            	
              number
                of Newly Issued Shares

            

    

    

    
      	 	
              O

            	
              =

            	
              number
                of shares of Common Stock outstanding (on a fully diluted basis,
                as
                described above) immediately prior to the issuance of the Newly Issued
                Shares

            

    

    

    
      	 	
              FMV

            	
              =

            	
              Current
                Fair Market Value of the Common Stock at the time of issuance of
                the Newly
                Issued Shares

            

    

    

    
      	 	
              CP

            	
              =

            	
              Conversion
                Price immediately prior to the issuance of the Newly Issued
                Shares

            

    

    

    
      	 	
              NCP

            	
              =

            	
              Conversion
                Price immediately after the issuance of the Newly Issued
                Shares

            

    

    

    (2) Notwithstanding
      the foregoing, no adjustment shall be made under this Section 5.3(g) by reason
      of:

    

    (A) the
      issuance by the Company of shares of Common Stock pro rata to all holders of
      the
      Common Stock so long as (i) any adjustment to the Conversion Price that is
      required by Section 5.3(a) is made and (ii) the Company shall have given notice
      of such issuance thereof to the Holder pursuant to Section 5.6;

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    

    (B) the
      issuance by the Company of the Notes, the Other Notes, the Warrants or the
      Other
      Warrants or shares of Common Stock upon conversion of this Note, or the Other
      Notes or upon exercise of the Warrants or the Other Warrants or in accordance
      with the terms hereof and thereof; 

    

    (C) the
      issuance of Common Stock upon conversion, exercise or exchange of Common Stock
      Equivalents outstanding on the Issuance Date; or

    

    (D) the
      issuance of Common Stock and Common Stock Equivalents as consideration for
      acquisitions; provided that such shares in the aggregate amount to no more
      than
      1,853,536 shares (as may be adjusted for stock splits, combinations,
      recapitalizations and the like); and provided further that, to the extent any
      shares are issued in excess of such amount, adjustment shall be made pursuant
      to
      this provision with respect to the issuance of all such shares.

    

    (h) (1)
      In
      case at any time on or after the Issuance Date the Company issues shares of
      Common Stock or Common Stock Equivalents at a price per share at which the
      Company sells such shares of Common Stock or the price per share at which the
      holders of such Common Stock Equivalents are entitled to acquire shares of
      Common Stock upon conversion or exercise thereof which is less than the
      Conversion Price in effect at the time of such issuance, then following such
      issuance the Conversion Price shall be reduced to the price per share (or
      weighted average price per share, if such shares are issued, or such Common
      Stock Equivalents may be converted or exercised, at different prices) at which
      such shares of Common Stock are issued or at which such Common Stock Equivalents
      may be exercised, if the same is lower than the Conversion Price in effect
      immediately prior to such issuance. 

    

    (2) If
      any
      adjustment in the Conversion Price is made pursuant to this Section 5.3(h)
      in
      respect of any issuance of shares of Common Stock or Common Stock Equivalents
      such issuance pursuant to Section 5.3(g).

    

    (3) Notwithstanding
      the foregoing, no adjustment shall be made under this Section 5.3(h) by reason
      of:

    

    (A) the
      issuance by the Company of shares of Common Stock pro rata to all holders of
      the
      Common Stock so long as (i) any adjustment required by Section 5.3(a) is made
      and (ii) the Company shall have given notice thereof to the Holder pursuant
      to
      Section 5.6;

    

    (B) the
      issuance by the Company of the Notes, the Other Notes, the Warrants or the
      Other
      Warrants or the issuance by the Company of shares of Common Stock upon
      conversion of this Note or the Other Notes or upon exercise of the Warrants
      or
      the Other Warrants in accordance with the terms hereof and thereof;

    

    (C) the
      issuance of Common Stock upon conversion, exercise or exchange of Common Stock
      Equivalents outstanding on the Issuance Date;

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    

    (D) the
      issuance by the Company of option grants for Common Stock or other of the
      Company’s equity securities for employees under a stock option, equity
      compensation or similar plan duly adopted by the Board of Directors in an amount
      not to exceed 1,853,536 shares (as may be adjusted for stock splits,
      combinations, recapitalizations and the like); provided that, to the extent
      any
      shares are issued in excess of such amount, adjustment shall be made pursuant
      to
      this provision with respect to the issuance of all such shares; or

    

    (E)  the
      issuance of Common Stock and Common Stock Equivalents as consideration for
      acquisitions; provided that such shares in the aggregate amount to no more
      than
      1,853,536 shares (as may be adjusted for stock splits, combinations,
      recapitalizations and the like); and provided further that, to the extent any
      shares are issued in excess of such amount, adjustment shall be made pursuant
      to
      this provision with respect to the issuance of all such shares.

    

    (i) The
      Company may make such reductions in the Conversion Price, in addition to those
      required by Sections 5.3(a), (b), (c), (d), (e), (f), (g) and (h), as the Board
      of Directors considers to be advisable to avoid or diminish any income tax
      to
      holders of Common Stock or rights to purchase Common Stock resulting from any
      dividend or distribution of stock (or rights to acquire stock) or from any
      event
      treated as such for income tax purposes.

    

    (j) No
      adjustment in the Conversion Price shall be required unless such adjustment
      would require an increase or decrease of at least 1% in such price; provided,
      however, that
      any
      adjustments which by reason of this Section 5.3(j) are not required to be made
      shall be carried forward and taken into account in any subsequent adjustment.
      All calculations under this Article V shall be made by the Company and shall
      be
      made to the nearest cent or to the nearest one hundredth of a share, as the
      case
      may be.

    

    No
      adjustment need be made for a change in the par value of the Common Stock or
      from par value to no par value or from no par value to par value.

    

    (k) Whenever
      the Conversion Price is adjusted as herein provided, the Company shall promptly,
      but in no event later than five days thereafter, give a notice to the Holder
      setting forth the Conversion Price after such adjustment and setting forth
      a
      brief statement of the facts requiring such adjustment, but which statement
      shall not include any information which would be material non-public information
      for purposes of the 1934 Act. Failure to deliver such notice shall not affect
      the legality or validity of any such adjustment.

    

    (l) In
      any
      case in which this Section 5.3 provides that an adjustment shall become
      effective immediately after a Record Date for an event, the Company may defer
      until the occurrence of such event (i) issuing to the Holder in connection
      with
      any conversion of this Note after such Record Date and before the occurrence
      of
      such event the additional shares of Common Stock issuable upon such conversion
      by reason of the adjustment required by such event over and above the Common
      Stock issuable upon such conversion before giving effect to such adjustment
      and
      (ii) paying to such holder any amount in cash in lieu of any fraction pursuant
      to Section 5.2(f).

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    

    (m) For
      purposes of this Section 5.3, the number of shares of Common Stock at any time
      outstanding shall not include shares held in the treasury of the Company but
      shall include shares issuable in respect of scrip certificates issued in lieu
      of
      fractions of shares of Common Stock. The Company will not pay any dividend
      or
      make any distribution on shares of Common Stock held in the treasury of the
      Company other than dividends or distributions payable only in shares of Common
      Stock.

    

    5.4 Effect
      of Reclassification, Consolidation, Merger or Sale.
      (a)
      If
      any of the following events occur, namely (i) any reclassification or change
      of
      the outstanding shares of Common Stock (other than a change in par value, or
      from par value to no par value, or from no par value to par value, or as a
      result of a subdivision or combination), (ii) any consolidation, merger or
      combination of the Company with another corporation as a result of which holders
      of Common Stock shall be entitled to receive stock, securities or other property
      or assets (including cash) with respect to or in exchange for such Common Stock,
      or (iii) any sale or conveyance of the properties and assets of the Company
      as,
      or substantially as, an entirety to any other corporation as a result of which
      holders of Common Stock shall be entitled to receive stock, securities or other
      property or assets (including cash) with respect to or in exchange for such
      Common Stock, then the Company or the successor or purchasing Person, as the
      case may be, shall execute with the Holder a written agreement providing that
      (x) this Note shall be convertible into the kind and amount of shares of stock
      and other securities or property or assets (including cash) receivable upon
      such
      reclassification, change, consolidation, merger, combination, sale or conveyance
      by the holder of the number of shares of Common Stock issuable upon conversion
      of this Note in full (assuming, for such purposes, a sufficient number of
      authorized shares of Common Stock available to convert this Note) immediately
      prior to such reclassification, change, consolidation, merger, combination,
      sale
      or conveyance assuming such holder of Common Stock did not exercise such
      holder's rights of election, if any, as to the kind or amount of securities,
      cash or other property receivable upon such consolidation, merger, statutory
      exchange, sale or conveyance (provided
      that, if
      the kind or amount of securities, cash or other property receivable upon such
      consolidation, merger, statutory exchange, sale or conveyance is not the same
      for each share of Common Stock in respect of which such rights of election
      shall
      not have been exercised (“non-electing share”), then for the purposes of this
      Section 5.4 the kind and amount of securities, cash or other property receivable
      upon such consolidation, merger, statutory exchange, sale or conveyance for
      each
      non-electing share shall be deemed to be the kind and amount so receivable
      per
      share by a plurality of the non-electing shares), (y) in the case of any such
      successor or purchasing Person, upon such consolidation, merger, combination,
      sale or conveyance such successor or purchasing Person shall be jointly and
      severally liable with the Company for the performance of all of the Company's
      obligations under this Note and the Note Purchase Agreement and (z) if
      registration or qualification is required under the 1933 Act or applicable
      state
      law for the public resale by the Holder of such shares of stock and other
      securities so issuable upon conversion of this Note, such registration or
      qualification shall be completed prior to such reclassification, change,
      consolidation, merger, combination or sale. Such written agreement shall provide
      for adjustments which shall be as nearly equivalent as may be practicable to
      the
      adjustments provided for in this Article. If, in the case of any such
      reclassification, change, consolidation, merger, combination, sale or
      conveyance, the stock or other securities and assets receivable thereupon by
      a
      holder of shares of Common Stock includes shares of stock or other securities
      and assets of a corporation other than the successor or purchasing corporation,
      as the case may be, in such reclassification, change, consolidation, merger,
      combination, sale or conveyance, then such written agreement shall also be
      executed by such other corporation and shall contain such additional provisions
      to protect the interests of the Holder as the Board of Directors shall
      reasonably consider necessary by reason of the foregoing, including, to the
      extent practicable, the provisions providing for the repurchase rights set
      forth
      in Article IV herein.

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    

    (b) The
      above
      provisions of this Section shall similarly apply to successive
      reclassifications, changes, consolidations, mergers, combinations, sales and
      conveyances.

    

    (c) If
      this
      Section 5.4 applies to any event or occurrence, Section 5.3 shall not
      apply.

    

    5.5 Reservation
      of Shares; Shares to Be Fully Paid; Listing of Common
      Stock.

    

    (a) Subject
      to the provisions of Section 5(l) of the Note Purchase Agreement, the Company
      shall reserve and keep available, free from preemptive rights, out of its
      authorized but unissued shares of Common Stock or shares of Common Stock held
      in
      treasury, solely for issuance upon conversion of this Note, and in addition
      to
      the shares of Common Stock required to be reserved by the terms of the Warrants,
      sufficient shares to provide for the conversion of this Note from time to time
      as this Note is converted.

    

    (b) Before
      taking any action which would cause an adjustment reducing the Conversion Price
      below the then par value, if any, of the shares of Common Stock issuable upon
      conversion of this Note, the Company will take all corporate action which may,
      in the opinion of its counsel, be necessary in order that the Company may
      validly and legally issue shares of such Common Stock at such adjusted
      Conversion Price.

    

    (c) The
      Company covenants that all shares of Common Stock issued upon conversion of
      this
      Note will be fully paid and non-assessable by the Company and free from all
      taxes, liens and charges with respect to the issue thereof.

    

    (d) The
      Company covenants that if any shares of Common Stock to be provided for the
      purpose of conversion of this Note hereunder require registration with or
      approval of any governmental authority under any federal or state law before
      such shares may be validly issued upon conversion, the Company will in good
      faith and as expeditiously as possible endeavor to secure such registration
      or
      approval, as the case may be.

    

    (e) The
      Company covenants that its securities will remain listed or included for
      quotation on a Trading Market.

    

    5.6 Notice
      to Holder Prior to Certain Actions.
      In
      case
      on or after the Issuance Date:

    

    (a) the
      Company shall declare a dividend (or any other distribution) on its Common
      Stock
      (other than in cash out of retained earnings); or

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

    

    (b) the
      Company shall authorize the granting to the holders of its Common Stock of
      rights or warrants to subscribe for or purchase any share of any class or any
      other rights or warrants; or

    

    (c) the
      Board
      of Directors shall authorize any reclassification of the Common Stock of the
      Company (other than a subdivision or combination of its outstanding Common
      Stock, or a change in par value, or from par value to no par value, or from
      no
      par value to par value), or any consolidation or merger or other business
      combination transaction to which the Company is a party and for which approval
      of any stockholders of the Company is required, or the sale or transfer of
      all
      or substantially all of the assets of the Company; or

    

    (d) there
      shall be pending the voluntary or involuntary dissolution, liquidation or
      winding-up of the Company;

    

    the
      Company shall give the Holder, as promptly as possible but in any event at
      least
      ten Trading Days prior to the applicable date hereinafter specified, a notice
      stating (x) the date on which a record is to be taken for the purpose of such
      dividend, distribution or rights or warrants, or, if a record is not to be
      taken, the date as of which the holders of Common Stock of record to be entitled
      to such dividend, distribution or rights are to be determined, or (y) the date
      on which such reclassification, consolidation, merger, other business
      combination transaction, sale, transfer, dissolution, liquidation or winding-up
      is expected to become effective or occur, and the date as of which it is
      expected that holders of Common Stock of record who shall be entitled to
      exchange their Common Stock for securities or other property deliverable upon
      such reclassification, consolidation, merger, other business combination
      transaction, sale, transfer, dissolution, liquidation or winding-up shall be
      determined. Such notice shall not include any information which would be
      material non-public information for purposes of the 1934 Act. Failure to give
      such notice, or any defect therein, shall not affect the legality or validity
      of
      such dividend, distribution, reclassification, consolidation, merger, sale,
      transfer, dissolution, liquidation or winding-up. In the case of any such action
      of which the Company gives such notice to the Holder or is required to give
      such
      notice to the Holder, the Holder shall be entitled to give a Conversion Notice
      which is contingent on the completion of such action.

    

    ARTICLE
      VI

    

    DEFINITIONS

    

    6.1 Certain
      Defined Terms.
      (a)
      All
      the agreements or instruments herein defined shall mean such agreements or
      instruments as the same may from time to time be supplemented or amended or
      the
      terms thereof waived or modified to the extent permitted by, and in accordance
      with, the terms thereof and of this Note.

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    

    (b) The
      following terms shall have the following meanings (such meanings to be equally
      applicable to both the singular and plural forms of the terms
      defined):

     

    “Acquisition
      Note" means a promissory note issued by the Company in connection with an
      Acquisition Transaction in an original principal amount approved in writing
      by
      Sigma.

    

    “Acquisition
      Transaction” means a transaction pursuant to which the Company or a Subsidiary
      acquires the business or assets of another company, which transaction has been
      approved in writing by Sigma.

    

    “Affiliate”
      means, with respect to any Person, any other Person that directly, or indirectly
      through one or more intermediaries, controls, is controlled by or is under
      common control with the subject Person. For purposes of this definition,
“control” (including, with correlative meaning, the terms “controlled by” and
“under common control with”), as used with respect to any Person, shall mean the
      possession, directly or indirectly, of the power to direct or cause the
      direction of the management and policies of such Person, whether through the
      ownership of voting securities or by contract or otherwise.

    

    “AMEX”
      means the American Stock Exchange, Inc.

    

    “Applicable
      Rate” means 7 percent per annum or, if an Event of Default shall occur, then so
      long as any Event of Default shall continue, 10 percent per annum (or in either
      case such lesser rate as shall be the highest rate permitted by applicable
      law).

    

    “Average
      Daily Trading Volume Threshold” means, with respect to any period, that the
      average daily trading volume of the Common Stock during such period as reported
      by Bloomberg, L.P. (or if such source ceases to be available, a comparable
      source selected by the Holder and acceptable to the Company in its reasonable
      judgment) shall be at least 100,000 shares (such amount to be subject to
      equitable adjustment for stock splits, stock dividends and similar events
      relating to the Common Stock that are reflected in the trading market for the
      Common Stock on or before the last Trading Day in such period).

    

    “Board
      of
      Directors” means the Board of Directors of the Company.

    

    “Board
      Resolution” means
      a
      copy of a resolution certified by the Secretary or an Assistant Secretary of
      the
      Company to have been duly adopted by the Board of Directors, or duly authorized
      committee thereof (to the extent permitted by applicable law), and to be in
      full
      force and effect on the date of such certification, and delivered to the
      Holder.

    

    “Business
      Day” means any day other than a Saturday, Sunday or a day on which commercial
      banks in The City of New York are authorized or required by law or executive
      order to remain closed.

     

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    

    “Common
      Stock” means the Common Stock, par value $.00002 per share, or any shares of
      capital stock of the Company into which such shares shall be changed or
      reclassified after the Issuance Date.

    

    “Common
      Stock Equivalent” means any warrant, option, subscription or purchase right with
      respect to shares of Common Stock, any security convertible into, exchangeable
      for, or otherwise entitling the holder thereof to acquire, shares of Common
      Stock or any warrant, option, subscription or purchase right with respect to
      any
      such convertible, exchangeable or other security.

    

    “Company”
      shall have the meaning provided in the first paragraph of this
      Note.

    

    “Company
      Certificate” means a certificate of the Company signed by an
      Officer.

    

    “Company
      Notice” means a Company Notice in the form attached hereto as Exhibit
      B.

    

    “Conversion
      Date” means the date on which a Conversion Notice is given in accordance with
      Section 5.2(a).

    

    “Conversion
      Notice” means
      a
      duly executed Notice of Conversion of 7% Senior Subordinated Secured Convertible
      Note due 2008 substantially in the form of Exhibit
      D
      to this
      Note.

    

    “Conversion
      Price” means
      $1.10, subject to adjustment as provided in Section 5.3; provided, however,
      that
      in the event the Company does not attain the revenue or EBITDA amounts for
      the
      fiscal year ended June 30, 2007 set forth on Exhibit E hereto, as reflected
      in
      the audited financial statements of the Company filed with the Securities and
      Exchange Commission and as certified to the Buyers in a Company Certificate
      delivered to Buyers no later than the date of such filing or October 15, 2007,
      whichever date is earlier, a portion or all of this Note shall have a Conversion
      Price of $.50 (subject to adjustment as provided in Section 5.3), such amount
      to
      be calculated in accordance with Exhibit E hereof.

    

    “Current
      Fair Market Value” means when used with respect to the Common Stock as of a
      specified date with respect to each share of Common Stock, the average of the
      closing prices of the Common Stock sold on all securities exchanges on which
      the
      Common Stock may at the time be listed, or, if there have been no sales on
      any
      such exchange on such day, the average of the last sales price on all such
      exchanges at the end of the most recent day on which there was a sale on any
      such exchange, or, if on the day of determination of Current Fair Market Value
      the Common Stock is not so listed, the average of the last sales price quoted
      in
      the NASDAQ System as of 4:00 p.m., New York City time, or, if on such day the
      Common Stock is not quoted in the NASDAQ System, the average of the last sales
      price on such day in the domestic over-the-counter market as reported by the
      National Quotation Bureau, Incorporated, or any similar successor organization,
      in each such case averaged over a period of the five most recent Trading Days
      on
      which sales of the Company’s stock occurred prior to the day as of which the
      Current Fair Market Value of Common Stock is being determined (or if such day
      is
      not a Trading Day, the Trading Day next preceding such day). If on the date
      for
      which Current Fair Market Value is to be determined the Common Stock is not
      listed on any securities exchange or quoted in the NASDAQ System or the
      over-the-counter market, the Current Fair Market Value of Common Stock shall
      be
      the highest price per share which the Company could then obtain from a willing
      buyer (not an employee or director of the Company at the time of determination)
      in an arms'-length transaction for shares of Common Stock sold by the Company,
      from authorized but unissued shares, as determined in good faith by the Board
      of
      Directors.

     

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

    

    “Current
      Market Price” shall
      mean the arithmetic average of the daily Market Prices per share of Common
      Stock
      for the ten consecutive Trading Days immediately prior to the date in question;
      provided,
      however, that
      (1)
      if the “ex” date (as hereinafter defined) for any event (other than the issuance
      or distribution requiring such computation) that requires an adjustment to
      the
      Conversion Price pursuant to Section 5.3(a), (b), (c), (d), (e), (f), (g) or
      (h), occurs during such ten consecutive Trading Days, the Market Price for
      each
      Trading Day prior to the “ex” date for such other event shall be adjusted by
      multiplying such Market Price by the same fraction by which the Conversion
      Price
      is so required to be adjusted as a result of such other event, (2) if the “ex”
date for any event (other than the issuance or distribution requiring such
      computation) that requires an adjustment to the Conversion Price pursuant to
      Section 5.3(a), (b), (c), (d), (e), (f), (g) or (h), occurs on or after the
“ex”
date for the issuance or distribution requiring such computation and prior
      to
      the day in question, the Market Price for each Trading Day on and after the
“ex”
date for such other event shall be adjusted by multiplying such Market Price
      by
      the reciprocal of the fraction by which the Conversion Price is so required
      to
      be adjusted as a result of such other event, and (3) if the “ex” date for the
      issuance or distribution requiring such computation is prior to the day in
      question, after taking into account any adjustment required pursuant to clause
      (1) or (2) of this proviso, the Market Price for each Trading Day on or after
      such “ex” date shall be adjusted by adding thereto the amount of any cash and
      the fair market value (as determined by the Board of Directors in a manner
      consistent with any determination of such value for purposes of Section 5.3(d)
      or (f), whose determination shall be conclusive and described in a Board
      Resolution) of the evidences of indebtedness, shares of capital stock or assets
      being distributed applicable to one share of Common Stock as of the close of
      business on the day before such “ex” date. For purposes of any computation under
      Section 5.3(f), the Current Market Price of the Common Stock on any date shall
      be deemed to be the arithmetic average of the daily Market Prices per share
      of
      Common Stock for such day and the next two succeeding Trading Days; provided,
      however, that
      if
      the “ex” date for any event (other than the Tender Offer requiring such
      computation) that requires an adjustment to the Conversion Price pursuant to
      Section 5.3(a), (b), (c), (d), (e), (f), (g) or (h), occurs on or after the
      Expiration Time for the Tender Offer requiring such computation and prior to
      the
      day in question, the Market Price for each Trading Day on and after the “ex”
date for such other event shall be adjusted by multiplying such Market Price
      by
      the reciprocal of the fraction by which the Conversion Price is so required
      to
      be adjusted as a result of such other event. For purposes of this paragraph,
      the
      term “ex” date, (1) when used with respect to any issuance or distribution,
      means the first date on which the Common Stock trades, regular way, on the
      relevant exchange or in the relevant market from which the Market Price was
      obtained without the right to receive such issuance or distribution, (2) when
      used with respect to any subdivision or combination of shares of Common Stock,
      means the first date on which the Common Stock trades, regular way, on such
      exchange or in such market after the time at which such subdivision or
      combination becomes effective, and (3) when used with respect to any Tender
      Offer means the first date on which the Common Stock trades, regular way, on
      such exchange or in such market after the Expiration Time of such Tender Offer.
      Notwithstanding the foregoing, whenever successive adjustments to the Conversion
      Price are called for pursuant to Section 5.3, such adjustments shall be made
      to
      the Current Market Price as may be necessary or appropriate to effectuate the
      intent of Section 5.3 and to avoid unjust or inequitable results as determined
      in good faith by the Board of Directors.

     

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

    

    “Default
      Interest” shall have the meaning provided in the first paragraph of this
      Note.

    

    “Default
      Rate” means 10 percent per annum.

    

    “Eligible
      Bank” means a corporation organized or existing under the laws of the United
      States or any other state, having combined capital and surplus of at least
      $100
      million and subject to supervision by federal or state authority and which
      has a
      branch located in New York, New York.

    

    “Expiration
      Time” shall have the meaning provided in Section 5.3(f).

    

    “Event
      of
      Default” shall have the meaning provided in Section 3.1.

    

    “Fundamental
      Change” means

    

    (a) Any
      consolidation or merger of the Company or any Subsidiary with or into another
      entity (other than a merger or consolidation of a Subsidiary into the Company
      or
      a wholly-owned Subsidiary) where the stockholders of the Company immediately
      prior to such transaction do not collectively own at least 75% of the
      outstanding voting securities of the surviving corporation of such consolidation
      or merger immediately following such transaction; or the sale of all or
      substantially all of the assets of the Company and the Subsidiaries in a single
      transaction or a series of related transactions; or

    

    (b) The
      occurrence of any transaction or event in connection with which all or
      substantially all the Common Stock shall be exchanged for, converted into,
      acquired for or constitute the right to receive consideration (whether by means
      of an exchange offer, liquidation, tender offer, consolidation, merger,
      combination, reclassification, recapitalization or otherwise) which is not
      all
      or substantially all common stock which is (or will, upon consummation of or
      immediately following such transaction or event, will be) listed on a national
      securities exchange or approved for quotation on Nasdaq or any similar United
      States system of automated dissemination of transaction reporting of securities
      prices; or

    

    (c) The
      acquisition by a Person or entity or group of Persons or entities acting in
      concert as a partnership, limited partnership, syndicate or group, as a result
      of a tender or exchange offer, open market purchases, privately negotiated
      purchases or otherwise, of beneficial ownership of securities of the Company
      representing 25% or more of the combined voting power of the outstanding voting
      securities of the Company ordinarily (and apart from rights accruing in special
      circumstances) having the right to vote in the election of directors; provided,
      however, that any re-allocation of shares of the Company’s Common Stock
      currently held by Old Berliner, Inc. that may, at some future date, be
      distributed to the stockholders of Old Berliner shall not constitute a
      Fundamental Change; or

     

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

    

    (d) A
      change
      in the current Chairman of the Board, President, or Chief Executive Officer
      of
      the Company or BCI, which officer is not replaced within 90 days with a person
      reasonably acceptable to Sigma. 

    

    “Generally
      Accepted Accounting Principles” for any Person means the generally accepted
      accounting principles and practices applied by such Person from time to time
      in
      the preparation of its audited financial statements.

    

    “Holder”
      shall have the meaning provided in the first paragraph of this
      Note.

    

    “Holder
      Notice” means a Holder Notice in the form attached hereto as Exhibit
      C.

    

    “Indebtedness”
      as used in reference to any Person means all indebtedness of such Person for
      borrowed money, the deferred purchase price of property, goods and services
      and
      obligations under leases which are required to be capitalized in accordance
      with
      Generally Accepted Accounting Principles and shall include all such indebtedness
      guaranteed in any manner by such Person or in effect guaranteed by such Person
      through a contingent agreement to purchase and all indebtedness for the payment
      or purchase of which such Person has contingently agreed to advance or supply
      funds and all indebtedness secured by mortgage or other lien upon property
      owned
      by such Person, although such Person has not assumed or become liable for the
      payment of such indebtedness, and, for all purposes hereof, such indebtedness
      shall be treated as though it has been assumed by such Person.

    

    “Interest
      Payment Date” means each January 1, April 1, July 1, and October 1 and the
      Maturity Date.

    

    “Issuance
      Date” means December 29, 2006.

    

    “Market
      Price” with
      respect to any security on any day shall mean the closing bid price of such
      security on such day on the Nasdaq, the NYSE or the AMEX, as applicable, or,
      if
      such security is not listed or admitted to trading on the Nasdaq, the NYSE
      or
      the AMEX, on the principal national securities exchange or quotation system
      on
      which such security is quoted or listed or admitted to trading, in any such
      case
      as reported by Bloomberg, L.P. (or if such source ceases to be available,
      comparable source selected by the Holder and acceptable to the Company in its
      reasonable judgment) or, if not quoted or listed or admitted to trading on
      any
      national securities exchange or quotation system, the average of the closing
      bid
      and asked prices of such security on the over-the-counter market on the day
      in
      question, as reported by the National Quotation Bureau Incorporated, or a
      similar generally accepted reporting service, or if not so available, in such
      manner as furnished by any NYSE member firm selected from time to time by the
      Board of Directors for that purpose, or a price determined in good faith by
      the
      Board of Directors, whose determination shall be conclusive and described in
      a
      Board Resolution.

     

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

    

    “Maturity
      Date” means the earlier of December 29, 2008 or such date that the Note is
      redeemed.

    

    “Nasdaq”
      means the Nasdaq Global Market or Global Select Market.

    

    “Nasdaq
      Capital Market” means the Nasdaq Capital Market.

    

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

    

    “1933
      Act” means the Securities Act of 1933, as amended.

    

    “Note”
      means this instrument as originally executed, or if later amended or
      supplemented in accordance with its terms, then as so amended or supplemented.
      

    

    “Note
      Purchase Agreement” means the Note Purchase Agreement, dated as of December 29,
      2006, by and among the Company and the original Holders of this Note and the
      Other Notes.

    

    “NYSE”
      means the New York Stock Exchange, Inc. 

    

    “Officer”
      means the Chairman of the Board, the Chief Executive Officer, the President
      or
      the Chief Financial Officer of the Company.

    

    “Optional
      Redemption Date” means each Business Day on which this Note is to be redeemed in
      whole or in part pursuant to Section 1.1.

    

    “Optional
      Redemption Notice” means an Optional Redemption Notice in the form attached
      hereto as Exhibit
      A.

    

    “Optional
      Redemption Period” means the period which commences on the date that is one year
      after the Closing Date and ends on the Maturity Date.

    

    “Optional
      Redemption Price” means an amount in cash equal to the sum of (1) 100% of the
      outstanding principal amount of this Note specified in an Optional Redemption
      Notice as being redeemed by the Company plus
      (2)
      accrued and unpaid interest on such principal amount to the applicable Optional
      Redemption Date plus
      (3)
      accrued and unpaid Default Interest, if any, on the amount referred to in the
      immediately preceding clause (2) at the rate provided in this Note to the
      Optional Redemption Date.

    

    “Other
      Notes” means the 7% Senior Subordinated Secured Convertible Promissory Notes due
      2008, dated December 29, 2006, issued by the Company pursuant to the Note
      Purchase Agreement other than this Note.

     

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    

    

    "Other
      Warrants" means the Common Stock Purchase Warrants issued by the Company to
      the
      original holder of this Note in connection with the Other Notes.

    

    “Permitted
      Indebtedness” means 

    

    (1) Indebtedness
      outstanding on the Issuance Date prior to issuance of this Note and listed
      on
      Schedule 4(l) to the Note Purchase Agreement; and

    

    (2) Indebtedness
      evidenced by the Note and the Other Notes;

    

    (3) Indebtedness
      incurred after the Issuance Date which is unsecured, subordinated to this Note
      and the Other Notes as to payment on terms approved in advance of such
      incurrence by the Holder of this Note and the Other Notes as evidenced by the
      written approval of the Holders given prior to the incurrence of such
      Indebtedness, and for which no payment of principal of such Indebtedness is
      scheduled to be due prior to the date that is six months after the latest
      scheduled Maturity Date;

    

    (4) endorsements
      for collection or deposit in the ordinary course of business; and

    

    (5) Indebtedness
      owed by the Company or any Subsidiary to the Company or BCI;

    

    (6) Indebtedness
      in connection with performance and bid bonds obtained by BCI in the ordinary
      course of its business;

    

    (7) Indebtedness
      evidenced by an Acquisition Note;

    

    (8) the
      Senior Debt and all renewals, extensions, replacements (including by another
      lender) and modifications thereof; and

    

    (9)
      Indebtedness incurred to finance the purchase or lease of equipment to the
      extent that the indebtedness relating thereto does not exceed $250,000 at any
      date.

    

    so
      long
      as at the time of incurrence of such Indebtedness no Event of Default has
      occurred and is continuing or would result from such incurrence and no event
      which, with notice or passage of time, or both, would become an Event of Default
      has occurred and is continuing or would result from such incurrence and so
      long
      as in the case of such Indebtedness referred to in the preceding clauses (2)
      thru (6), inclusive, such Indebtedness shall have been approved by the Board
      of
      Directors prior to the incurrence thereof.

    

    “Person”
      means any natural person, corporation, partnership, limited liability company,
      trust, incorporated organization, unincorporated association or similar entity
      or any government, governmental agency or political subdivision.

     

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

    

    “QIB”
      means a “qualified institutional buyer” as defined in Rule 144A.

    

    “Record
      Date” shall
      mean, with respect to any dividend, distribution or other transaction or event
      in which the holders of Common Stock have the right to receive any cash,
      securities or other property or in which the Common Stock (or other applicable
      security) is exchanged for or converted into any combination of cash, securities
      or other property, the date fixed for determination of stockholders entitled
      to
      receive such cash, securities or other property (whether such date is fixed
      by
      the Board of Directors or by statute, contract or otherwise).

    

    “Registration
      Statement” means the Registration Statement required to be filed by the Company
      with the SEC pursuant to Section 8(a)(1) of the Note Purchase
      Agreement.

    

    “Repurchase
      Event” means the occurrence of any one or more of the following
      events:

    

    (a) The
      Common Stock ceases to be traded on the Over-The-Counter Bulletin Board and
      is
      not listed for trading on Nasdaq, the NYSE or the AMEX;

    

    (b) Any
      Fundamental Change; 

    

    (c) The
      adoption of any amendment to the Company's Certificate of Incorporation (other
      than any certificate designating a series of preferred stock of the Company)
      which materially and adversely affects the rights of the Holder or the taking
      of
      any other action by the Company which materially and adversely affects the
      rights of the Holder in respect of the Holder’s interest in the Common Stock in
      a different and more adverse manner than it affects the rights of holders of
      Common Stock generally;

    

    (d) The
      inability of the Holder for 20 Trading Days (whether or not consecutive) during
      any period of 365 consecutive days occurring on or after the SEC Effective
      Date
      to sell shares of Common Stock issued or issuable upon conversion of this Note
      or exercise of the Warrants pursuant to the Registration Statement (1) by reason
      of the requirements of the 1933 Act, the 1934 Act or any of the rules or
      regulations under either thereof or (2) due to the Registration Statement
      containing any untrue statement of material fact or omitting to state a material
      fact required to be stated therein or necessary to make the statements therein
      not misleading or other failure of the Registration Statement to comply with
      the
      rules and regulations of the SEC other than by reason of a review by the SEC
      staff of the Registration Statement or a post effective amendment to the
      Registration Statement; or

    

    (f) The
      occurrence of any Event of Default specified in Article III of this
      Note.

    

    “Repurchase
      Price” means with respect to any repurchase pursuant to Sections 4.1 and 4.2 an
      amount in cash equal to the sum of (1) 100% of the outstanding principal amount
      of this Note plus
      (2)
      accrued and unpaid interest on such principal amount to the date of such
      repurchase plus
      (3)
      accrued and unpaid Default Interest, if any, thereon at the rate provided in
      this Note to the date of such repurchase.

     

    
      
        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    

    

    “Rule
      144A” means Rule 144A as promulgated under the 1933 Act or any successor rule
      thereto.

    

    “SEC”
      means the Securities and Exchange Commission.

    

    “SEC
      Effective Date” means the date the Registration Statement is first declared
      effective by the SEC.

    

    “Significant
      Subsidiary” shall have the meaning provided in Regulation S-X of the SEC, except
      that a Subsidiary shall not be a Significant Subsidiary only if such Subsidiary,
      when consolidated for financial reporting purposes with all other Subsidiaries
      which are not Significant Subsidiaries, would not constitute a Significant
      Subsidiary.

    

    “Subsidiary”
      means any corporation or other entity of which a majority of the capital stock
      or other ownership interests having ordinary voting power to elect a majority
      of
      the board of directors or other Persons performing similar functions are at
      the
      time directly or indirectly owned by the Company.

    

    “Tender
      Offer” means a tender offer or exchange offer.

    

    “Trading
      Day” means at any time a day on which any of a national securities exchange,
      Nasdaq, the OTC Bulletin Board or such other securities market as at such time
      constitutes the principal securities market for the Common Stock is open for
      general trading of securities.

    

    “Trading
      Market” means the Over-The-Counter Bulletin Board, the American Stock Exchange,
      Inc., the Nasdaq, or the New York Stock Exchange, Inc.

    

    “Transaction
      Documents” has the meaning provided in the Note Purchase Agreement.

    

    “Transfer
      Agent” means American Stock Transfer & Trust Company, or its successor as
      transfer agent and registrar for the Common Stock.

    

    “Warrants”
      means Common Stock Purchase Warrants of the Company issued to the original
      Holder of this Note pursuant to the Note Purchase Agreement.

     

    
      
        
        

      

      
        -33-

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VII

    

    MISCELLANEOUS

    

    7.1 Failure
      or Indulgency Not Waiver.
      No
      failure or delay on the part of the Holder in the exercise of any power, right
      or privilege hereunder shall operate as a waiver thereof, nor shall any single
      or partial exercise of any such power, right or privilege preclude other or
      further exercise thereof or of any other right, power or privileges. All rights
      and remedies existing hereunder are cumulative to, and not exclusive of, any
      rights or remedies otherwise available.

    

    7.2 Notices.
      Except
      as otherwise specifically provided herein, any notice herein required or
      permitted to be given shall be in writing and may be personally served, sent
      by
      telephone line facsimile transmission or delivered by courier or sent by United
      States mail and shall be deemed to have been given upon receipt if personally
      served, sent by telephone line facsimile transmission or sent by courier or
      three days after being deposited in the facilities of the United States Postal
      Service, certified, with postage pre-paid and properly addressed, if sent by
      mail. For the purposes hereof, the address and facsimile line transmission
      number of the Holder shall be as furnished by the Holder for such purpose and
      shown on the records of the Company; and the address of the Company shall be
      20
      Bushes Lane, Elmwood Park, NJ 07407 Attention: Chief Executive Officer
      (telephone line facsimile transmission number (201)794-8974).
      The
      Holder or the Company may change its address for notice by service of written
      notice to the other as herein provided.

    

    7.3 Amendment,
      Waiver, Etc.
      Neither
      this Note nor any terms hereof may be changed, waived, discharged or terminated
      unless such change, waiver, discharge or termination is in writing signed by
      (x)
      the Company if the Company is to be charged with enforcement or (y) by a
      majority in interest of the Holders of this Note and the Other Notes, if the
      Holders are to be charged with enforcement, based upon the aggregate principal
      amount of the Notes and Other Notes then outstanding, and in any such case
      shall
      be effective only in the specific instance and for the purpose for which given.
      

     

    7.4 Assignability.  This
      Note
      shall be binding upon the Company and its successors, and shall inure to the
      benefit of and be binding upon the Holder and its successors and permitted
      assigns. The Company may not assign its rights or obligations under this
      Note.

    

    7.5 Certain
      Expenses.  The
      Company shall pay on demand all expenses incurred by the Holder, including
      reasonable attorneys' fees and expenses, as a consequence of, or in connection
      with (x) any amendment or waiver of this Note or any other Transaction Document,
      (y) any default or breach of any of the Company’s obligations set forth in the
      Transaction Documents and (z) the enforcement or restructuring of any right
      of,
      including the collection of any payments due, the Holder under the Transaction
      Documents, including any action or proceeding relating to such enforcement
      or
      any order, injunction or other process seeking to restrain the Company from
      paying any amount due the Holder.

     

    
      
        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    

    

    7.6 Governing
      Law.
      This
      Note shall be governed by the internal laws of the State of New York, without
      regard to the principles of conflict of laws.

    

    7.7 Transfer
      of Note and Noteholder Payment Amount.
      This
      Note has not been and is not being registered under the provisions of the 1933
      Act or any state securities laws and this Note may not be transferred unless
      the
      Holder shall have delivered to the Company an opinion of counsel, reasonably
      satisfactory in form, scope and substance to the Company, to the effect that
      this Note may be sold or transferred without registration under the 1933 Act.
      Prior to any such transfer, such transferee shall have represented in writing
      to
      the Company that such transferee has requested and received from the Company
      all
      information relating to the business, properties, operations, condition
      (financial or other), results of operations or prospects of the Company and
      the
      Subsidiaries deemed relevant by such transferee; that such transferee has been
      afforded the opportunity to ask questions of the Company concerning the
      foregoing and has had the opportunity to obtain and review the reports and
      other
      information concerning the Company which at the time of such transfer have
      been
      filed by the Company with the SEC pursuant to the 1934 Act. If such transfer
      is
      intended to assign the rights and obligations under 5(a), 5(b), 8, 9 and 10
      of
      the Note Purchase Agreement, such transfer shall otherwise be made in compliance
      with Article V of the Note Purchase Agreement.  

    

    7.8
       Enforceable
      Obligation.  The
      Company represents and warrants that at the time of the original issuance of
      this Note it received the full purchase price payable pursuant to the Note
      Purchase Agreement in an amount at least equal to the original principal amount
      of this Note, and that this Note is an enforceable obligation of the Company
      which is not subject to any offset, reduction, counterclaim or disallowance
      of
      any sort.

    

    7.9 Note
      Register; Replacement of Notes.  The
      Company shall maintain a register showing the names, addresses and telephone
      line facsimile numbers of the Holder and the registered holders of the Other
      Notes. The Company shall also maintain a facility for the registration of
      transfers of this Note and the Other Notes and at which this Note and the Other
      Notes may be surrendered for split up into instruments of smaller denominations
      or for combination into instruments of larger denominations. Upon receipt by
      the
      Company of evidence reasonably satisfactory to it of the ownership of and the
      loss, theft, destruction or mutilation of this Note and (a) in the case of
      loss,
      theft or destruction, of indemnity from the Holder reasonably satisfactory
      in
      form to the Company (and without the requirement to post any bond or other
      security) or (b) in the case of mutilation, upon surrender and cancellation
      of
      this Note, the Company will execute and deliver to the Holder a new Note of
      like
      tenor without charge to the Holder.

    

    7.10 Payment
      of Note on Redemption or Repurchase; Deposit of Redemption Price or Repurchase
      Price, Etc.
      (a)
      If
      this Note or any portion of this Note is to be redeemed as provided in
      Section 1.1 or repurchased as provided in Sections 4.1 and 4.2 and any
      notice required in connection therewith shall have been given as provided
      therein and the Company shall have otherwise complied with the requirements
      of
      this Note with respect thereto, then this Note or the portion of this Note
      to be
      so redeemed or repurchased and with respect to which any such notice has been
      given shall become due and payable on the date stated in such notice at the
      applicable Optional Redemption Price or Repurchase Price. On and after the
      Optional Redemption Date or repurchase date so stated in such notice, provided
      that the Company shall have deposited with an Eligible Bank on or prior to
      such
      Optional Redemption Date or repurchase date, an amount sufficient to pay the
      applicable Optional Redemption Price or Repurchase Price, interest on this
      Note
      or the portion of this Note to be so redeemed or repurchased shall cease to
      accrue, and this Note or such portion hereof shall be deemed not to be
      outstanding and shall not be entitled to any benefit with respect to principal
      of or interest on the portion to be so redeemed or repurchased except to receive
      payment of the applicable Optional Redemption Price or Repurchase Price. On
      presentation and surrender of this Note or such portion hereof, this Note or
      the
      specified portion hereof shall be paid and redeemed or repurchased at the
      applicable Optional Redemption Price or Repurchase Price. If a portion of this
      Note is to be redeemed or repurchased, upon surrender of this Note to the
      Company in accordance with the terms hereof, the Company shall execute and
      deliver to the Holder without service charge, a new Note or Notes, having the
      same date hereof and containing identical terms and conditions, in such
      denomination or denominations as requested by the Holder in aggregate principal
      amount equal to, and in exchange for, the unredeemed or unrepurchased portion
      of
      the principal amount of this Note so surrendered.

     

    
      
        
        

      

      
        -35-

        
          

        

      

      
        
        

      

    

    

    (b) Upon
      the
      payment in full of all amounts payable by the Company under this Note or the
      deposit thereof as provided in Section 7.10(a), thereafter the obligations
      of
      the Company under this Note shall be as set forth in this Article VII, and,
      in
      the case of such deposit, to pay the Optional Redemption Price or Repurchase
      Price, as the case may be, from the funds so deposited. Upon such payment or
      deposit, any Event of Default which occurred prior to such payment or deposit
      by
      reason of one or more provisions of this Note with which the Company thereafter
      is no longer obligated to comply, then shall no longer exist.

    

    

    [Remainder
      of Page Intentionally Left Blank]

     

    
      
        
        

      

      
        -36-

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the
      Company has caused this Note to be signed in its name by its duly authorized
      officer as of the day and in the year first above written.

     

    
      	 	 	 
	 	
              BERLINER
                COMMUNICATIONS, INC.

            
	 
 	 
 	 
 
	
            	By:  	/s/
              RICH
              BERLINER
	 	
              

              Name:
                Rich Berliner

            
	 	
              Title:
                Chief Executive Officer

            

    

     

    
      
        
        

      

      
        -37-

        
          

        

      

      
        
        

      

    

     

    ASSIGNMENT

    

    For
      value
      received _________________________ hereby sell(s), assign(s) and transfer(s)
      unto _________________________ (Please insert social security or other Taxpayer
      Identification Number of assignee: ______________________________) the within
      Note, and hereby irrevocably constitutes and appoints _________________________
      attorney to transfer the said Note on the books of Berliner Communications,
      Inc., a Delaware corporation (the “Company”), with full power of substitution in
      the premises.

    

    In
      connection with any transfer of the Note within the period prior to the
      expiration of the holding period applicable to sales thereof under Rule 144(k)
      under the 1933 Act (or any successor provision) (other than any transfer
      pursuant to a registration statement that has been declared effective under
      the
      1933 Act), the undersigned confirms that such Note is being
      transferred:

    

    
      	
            	o	
              To
                the Company or a subsidiary thereof;
                or

            

    

    

    
      	
            	o	
              To
                a QIB pursuant to and in compliance with Rule 144A;
                or

            

    

    

    
      	
            	o	
              To
                an “accredited investor” pursuant
                to and in compliance with the
                1933 Act; or

            

    

    

    
      	
            	o	
              Pursuant
                to and in compliance with Rule 144 under the 1933 Act;

            

    

    

    and
      unless the box below is checked, the undersigned confirms that, to the knowledge
      of the undersigned, such Note is not being transferred to an “affiliate” of the
      Company as defined in Rule 144 under the 1933 Act (an “Affiliate”).

    

    
      	
            	o	
              The
                transferee is an Affiliate of the
                Company.

            

    

    

    Capitalized
      terms used in this Assignment and not defined in this Assignment shall have
      the
      respective meanings provided in the Note.

    

      Dated:           NAME:________

    

    
      	 	 	 
	 	
              
 Signature(s)

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
      A

    

    BERLINER
      COMMUNICATIONS, INC.

    

    OPTIONAL
      REDEMPTION NOTICE

    (Section 1.1
      of 7% Senior Subordinated Secured

    Convertible
      Note due 2008)

    

      TO: __________________________________

    

                 
      (Name of Holder)

    

    (1) Pursuant
      to the terms of the 7% Senior Subordinated Secured Convertible Note due 2008
      (the “Note”), Berliner Communications, Inc., a Delaware corporation (the
“Company”), hereby notifies the above-named Holder that the Company is
      exercising its right to redeem the Note in accordance with Section 1.1 of
      the Note as set forth below:

    

    (i) The
      principal amount of the Note to be redeemed is $             .

    

    (ii) The
      Optional Redemption Price is $               .

    

    (iii) The
      Optional Redemption Date is               .

    

    (2) All
      of
      the conditions specified in Section 1.1 of the Note entitling the Company to
      call the Note for redemption have been satisfied.

    

    (3) Capitalized
      terms used herein and not otherwise defined herein have the respective meanings
      provided in the Note.

    

    
      	 	 	 
	
              Date
                _________________________ 

            	BERLINER
              COMMUNICATIONS, INC.
	
               

            	 
 	 
 
	
            	By:  	
            
	 	
              
Title:

    

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

    Exhibit
      B

    

    BERLINER
      COMMUNICATIONS, INC.

    

    COMPANY
      NOTICE

    (Section 4.2(a)
      of 7% Senior Subordinated Secured

    Convertible
      Note due 2008)

    

      TO: ________________________________

    

                
      (Name of Holder)

    

    (1) A
      Repurchase Event described in the 7% Senior Subordinated Secured Convertible
      Note due 2008 (the “Note”) of Berliner Communications, Inc., a Delaware
      corporation (the “Company”), occurred on                     ,
      200  .
      As a
      result of such Repurchase Event, the Holder is entitled to exercise its
      repurchase rights pursuant to Section 4.2 of the Note.

    

    (2) The
      Holder’s repurchase right must be exercised on or before               ,
      200  .

    

    (3) At
      or
      before the date set forth in the preceding paragraph (2), the Holder must
      deliver to the Company:

    

    (a) a
      Holder
      Notice, in the form attached as Exhibit
      C
      to the
      Note; and

    

    (b) the
      Note,
      duly endorsed for transfer to the Company of the portion of the principal amount
      to be repurchased.

    

    (4) Capitalized
      terms used herein and not otherwise defined herein have the respective meanings
      provided in the Note.

    

    
      	 	 	 
	
              Date
                _________________________

            	BERLINER
              COMMUNICATIONS, INC.
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              
Title:

    

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

     

    Exhibit
      C

    

    BERLINER
      COMMUNICATIONS, INC.

    

    HOLDER
      NOTICE

    (Section 4.2(b)
      of 7% Senior Subordinated Secured

    Convertible
      Note due 2008)

    

    TO: BERLINER
      COMMUNICATIONS, INC.

    

    (1) Pursuant
      to the terms of the 7% Senior Subordinated Secured Convertible Note due 2008
      (the “Note”), the undersigned Holder hereby elects to exercise its right to
      require repurchase by the Company pursuant to Sections 4.2(a) and 4.2(b) of
      $                         
      of the
      Note, equal to the sum of $                    
      principal amount of the Note, $                    
      of
      accrued and unpaid interest on such principal amount and $                    
      of
      Default Interest on such interest at the Repurchase Price provided in the
      Note.

    

    (2) Capitalized
      terms used herein and not otherwise defined herein have the respective meanings
      provided in the Note.

    

    
      	 	 	 
	
              Date:
                ____________________

            	NAME
              OF
              HOLDER:
	 
 	
              

            
	 	 	 
	
            	By:  	
            
	 	
              

              Signature
                of Registered Holder

              (Must
                be signed exactly as name

              appears
                in the Note.)

            

    

     

    
      
        
        

      

      
        C-1

        
          

        

      

      
        
        

      

    

    Exhibit
      D

    

    NOTICE
      OF CONVERSION

    OF
      7% SENIOR SUBORDINATED SECURED CONVERTIBLE

    NOTE
      DUE 2008

    OF
      BERLINER COMMUNICATIONS, INC.

     

    
      To:
        Berliner Communications, Inc. 

      [
        Address]

      

      Facsimile
        No.: (___) _________

      

      [Transfer
        Agent]

      [Address]

      

      Attention:
        

      

      Facsimile
        No.: (____) _____________

    

    

    1. Pursuant
      to the terms of the 7% Senior Subordinated Secured Convertible Note due 2008
      (the “Note”), the undersigned hereby elects to convert $_______________ of the
      Note, equal to the sum of $_______________ principal amount of the Note,
      $_______________ of accrued and unpaid interest on such principal amount and
      $_______________ of Default Interest on such interest into shares of Common
      Stock of Berliner Communications, Inc., a Delaware corporation (the “Company”),
      at a Conversion Price per share equal to $_______________. Capitalized terms
      used herein and not otherwise defined herein have the respective meanings
      provided in the Note.

    

    2. The
      number of shares of Common Stock issuable upon the conversion of the Note to
      which this Notice relates is _______________ (the “Conversion Shares”).

    

    3. Please
      issue a certificate or certificates for _______________ shares of Common Stock
      in the name(s) specified immediately below or, if additional space is necessary,
      on an attachment hereto:

     

     

    
      	
              
Name	 	 	
              
Name
	
            	 	 	
            
	
              
Address	 	 	
              

              Address
	
            	 	 	
            
	
              
SS
              or Tax ID Number	 	 	
              
SS
              or Tax ID Number

      

      Delivery
        Instructions

      for
        Common Stock: ______________________________________________________________

       

      
        
          
          

        

        
          D-1

          
            

          

        

        
          
          

        

      

    

     

    4. If
      the
      shares of Common Stock issuable upon conversion of the Note have not been
      registered for resale under the Securities Act of 1933, as amended (the “Act”),
      and the provisions of Rule 144(k) under the 1933 Act are inapplicable to the
      undersigned with respect to the Conversion Shares relating to this Notice,
      the
      undersigned represents and warrants that (i) the shares of Common Stock issuable
      upon the conversion of the Note to which this Notice relates are being acquired
      for the account of the undersigned for investment, and not with a view to,
      or
      for resale in connection with, the distribution thereof, and that the
      undersigned has no present intention of distributing or reselling such shares
      and (ii) the undersigned is an “accredited investor” as defined in Regulation D
      under the 1933 Act. If the provisions of Rule 144(k) under the 1933 Act are
      inapplicable to the undersigned with respect to the Conversion Shares relating
      to this Notice, the undersigned further agrees that (A) such shares shall not
      be
      sold or transferred unless (i) they first shall have been registered under
      the
      1933 Act and applicable state securities laws or (ii) the Company shall have
      been furnished with an opinion of legal counsel reasonably satisfactory in
      form,
      scope and substance to the Company to the effect that such sale or transfer
      is
      exempt from the registration requirements of the 1933 Act and (B) until such
      shares are registered for resale by the undersigned under the 1933 Act, the
      Company may place a legend on the certificate(s) for the shares to that effect
      and place a stop-transfer restriction in its records relating to the
      shares.

     

    
      	 	 	 	NAME:
	 	 	 	
              
                
 

            
	 	 	 	 
	
              Date:

            	 	 	
               

            
	
              
                

              

            	 	 	
              

              Signature
                of Registered Holder

              (Must
                be signed exactly as name

              appears
                in the Note.)

            
	
            	 	 	
            

    

     

    
      
        
        

      

      
        D-2Exhibit
      4.2

    

    NEITHER
      THIS WARRANT NOR ISSUANCE OF THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF
      TO
      THE HOLDER HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR QUALIFIED
      OR
      REGISTERED UNDER STATE SECURITIES OR BLUE SKY LAWS. NEITHER THIS WARRANT NOR
      SUCH SECURITIES MAY BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR
      OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE SECURITIES
      ACT OF 1933, APPLICABLE STATE SECURITIES OR BLUE SKY LAWS AND THE APPLICABLE
      RULES AND REGULATIONS THEREUNDER.

    

    THIS
      WARRANT MAY NOT BE TRANSFERRED EXCEPT AS PROVIDED IN SECTION
      24.

     

    
      	
              No.
                W-5

            	
              Right
                to Purchase 750,000 Shares of Common Stock of Berliner
                Communications, Inc.

            

    

     

    BERLINER
      COMMUNICATIONS, INC.

    

    Common
      Stock Purchase Warrant

    

    BERLINER
      COMMUNICATIONS, INC., a
      Delaware corporation, hereby certifies that, for value received, Sigma
      Berliner, LLC
      or
      registered assigns (the “Holder”), is entitled, subject to the terms set forth
      below, to purchase from the Company at any time or from time to time before
      5:00
      p.m., New York City time, on the Expiration Date (such capitalized term and
      all
      other capitalized terms used herein having the respective meanings provided
      herein), 750,000 fully paid and nonassessable shares of Common Stock at a
      purchase price per share equal to the Purchase Price. The number of such shares
      of Common Stock and the Purchase Price are subject to adjustment as provided
      in
      this Warrant.

    

    As
      used
      herein the following capitalized terms, unless the context otherwise requires,
      have the following respective meanings:

    

    “Aggregate
      Purchase Price” means at any time an amount equal to the product obtained by
      multiplying (x) the Purchase Price times
      (y) the
      number of shares of Common Stock for which this Warrant may be exercised at
      such
      time.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    “AMEX”
      means the American Stock Exchange, Inc.

    

    “Board
      of
      Directors” means the Board of Directors of the Company.

    

    “Business
      Day” means any day other than a Saturday, Sunday or other day on which
      commercial banks in The City of New York are authorized or required by law
      or
      executive order to remain closed.

    

    “Common
      Stock” includes the Company's Common Stock, par value $.00002 per share, (and
      any purchase rights issued with respect to the Common Stock in the future)
      as
      authorized on the date hereof, and any other securities into which or for which
      the Common Stock (and any such rights issued with respect to the Common Stock)
      may be converted or exchanged pursuant to a plan of recapitalization,
      reorganization, merger, sale of assets or otherwise and any stock (other than
      Common Stock) and other securities of the Company or any other Person which
      the
      Holder at any time shall be entitled to receive, or shall have received, on
      the
      exercise of this Warrant, in lieu of or in addition to Common
      Stock.

    

    “Common
      Stock Equivalents” means any warrant, option, subscription or purchase right
      with respect to shares of Common Stock, any security convertible into,
      exchangeable for, or otherwise entitling the holder thereof to acquire, shares
      of Common Stock or any warrant, option, subscription or purchase right with
      respect to any such convertible, exchangeable or other security.

    

    “Company”
      shall include Berliner Communications, Inc., a Delaware corporation, and any
      corporation that shall succeed to or assume the obligations of Berliner
      Communications, Inc. hereunder in accordance with the terms hereof.

    

    “Current
      Fair Market Value” means when used with respect to the Common Stock as of a
      specified date with respect to each share of Common Stock, the average of the
      closing prices of the Common Stock sold on all securities exchanges on which
      the
      Common Stock may at the time be listed, or, if there have been no sales on
      any
      such exchange on such day, the average of the last sales price on all such
      exchanges at the end of the most recent day on which there was a sale on any
      such exchange, or, if on the day of determination of Current Fair Market Value
      the Common Stock is not so listed, the average of the last sales price quoted
      in
      the NASDAQ System as of 4:00 p.m., New York City time, or, if on such day the
      Common Stock is not quoted in the NASDAQ System, the average of the last sales
      price on such day in the domestic over-the-counter market as reported by the
      National Quotation Bureau, Incorporated, or any similar successor organization,
      in each such case averaged over a period of the five most recent Trading Days
      on
      which sales of the Company’s stock occurred prior to the day as of which the
      Current Fair Market Value of Common Stock is being determined (or if such day
      is
      not a Trading Day, the Trading Day next preceding such day). If on the date
      for
      which Current Fair Market Value is to be determined the Common Stock is not
      listed on any securities exchange or quoted in the NASDAQ System or the
      over-the-counter market, the Current Fair Market Value of Common Stock shall
      be
      the highest price per share which the Company could then obtain from a willing
      buyer (not an employee or director of the Company at the time of determination)
      in an arms'-length transaction for shares of Common Stock sold by the Company,
      from authorized but unissued shares, as determined in good faith by the Board
      of
      Directors.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    

    “Expiration
      Date” means the earlier of December 29, 2011 or the date this Warrant has been
      fully exercised.

    

    “Issuance
      Date” means the date of original issuance of this Warrant.

    

    “Nasdaq”
      means the Nasdaq Global Market or Global Select Market.

    

    “Nasdaq
      Capital Market” means the Nasdaq Capital Market.

    

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

    

    “1933
      Act” means the Securities Act of 1933, as amended.

    

    “Note
      Purchase Agreement” means the Note Purchase Agreement, dated as of December 29,
      2006, by and between the Company and the original Holder of this
      Warrant.

    

    “Notes”
      means any of the 7% Senior Subordinated Secured Convertible Notes due 2008
      issued by the Company pursuant to the Note Purchase Agreement and the Other
      Notes, if any. 

    

    “NYSE”
      means the New York Stock Exchange, Inc.

    

    “Other
      Notes” shall have the meaning provided in the Notes.

    

    “Other
      Securities” means any stock (other than Common Stock) and other securities of
      the Company or any other Person which the Holder at any time shall be entitled
      to receive, or shall have received, on the exercise of this Warrant, in lieu
      of
      or in addition to Common Stock, or which at any time shall be issuable or shall
      have been issued in exchange for or in replacement of Common Stock or Other
      Securities pursuant to Section 4.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    

    “Other
      Warrants” means the Common Stock Purchase Warrants (other than this Warrant)
      issued or issuable by the Company pursuant to the Note Purchase Agreement and
      issued or issuable by the Company in connection with the Other
      Notes.

    

    “Person”
      means an individual, partnership, corporation, limited liability company, trust,
      unincorporated organization, business trust, association, joint stock company,
      joint venture, pool, syndicate, sole proprietorship, governmental agency or
      any
      other form of entity not specifically listed herein.

    

    “Purchase
      Price” means $.01, subject to adjustment as provided in this
      Warrant.

    

    “QIB”
      means a “qualified institutional buyer” as defined in Rule 144A.

    

    “Registration
      Period” shall have the meaning provided in the Note Purchase
      Agreement.

    

    “Registration
      Statement” shall have the meaning provided in the Note Purchase
      Agreement.

    

    “Restricted
      Securities” means securities that are not eligible for resale pursuant to Rule
      144(k) under the 1933 Act (or any successor provision).

    

    “Reorganization
      Event” means the occurrence of any one or more of the following events:

    

    (i) any
      consolidation, merger or similar transaction of the Company or any Subsidiary
      with or into another entity (other than a merger or consolidation or similar
      transaction of a Subsidiary into the Company or a wholly-owned Subsidiary);
      or
      the sale or transfer of all or substantially all of the assets of the Company
      and the Subsidiaries in a single transaction or a series of related
      transactions; or

    

    (ii) the
      occurrence of any transaction or event in connection with which all or
      substantially all the Common Stock shall be exchanged for, converted into,
      acquired for or constitute the right to receive securities of any other Person
      (whether by means of a Tender Offer, liquidation, consolidation, merger, share
      exchange, combination, reclassification, recapitalization, or otherwise);
      or

    

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

       

    

    (iii) the
      acquisition by a Person or group of Persons acting in concert as a partnership,
      limited partnership, syndicate or group, as a result of a tender or exchange
      offer, open market purchases, privately negotiated purchases or otherwise,
      of
      beneficial ownership of securities of the Company representing 50% or more
      of
      the combined voting power of the outstanding voting securities of the Company
      ordinarily (and apart from rights accruing in special circumstances) having
      the
      right to vote in the election of directors.

    

    “Rule
      144A” means Rule 144A as promulgated under the 1933 Act.

    

    “SEC”
      means the Securities and Exchange Commission.

    

    “SEC
      Effective Date” shall have the meaning provided in the Note Purchase
      Agreement.

    

    “Subsidiary”
      means any corporation or other entity of which a majority of the capital stock
      or other ownership interests having ordinary voting power to elect a majority
      of
      the board of directors or other Persons performing similar functions are at
      the
      time directly or indirectly owned by the Company.

    

    “Tender
      Offer” means a tender offer, exchange offer or other offer by the Company to
      repurchase outstanding shares of its capital stock.

    

    “Trading
      Day” means at any time a day on which any of a national securities exchange,
      Nasdaq or such other securities market as at such time constitutes the principal
      securities market for the Common Stock is open for general trading of
      securities.

    

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

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    

    1. Exercise
      of Warrant.

    

    (a) Exercise.
      This
      Warrant may be exercised by the Holder in whole at any time or in part from
      time
      to time on or before the Expiration Date in minimum amounts equal to at least
      5,000 shares (or such lesser number of shares remaining) in any given exercise
      by (x) surrendering this Warrant to the Company, (y) giving a subscription
      form
      in the form of Exhibit
      1
      to this
      Warrant (duly executed by the Holder) to the Company, and (z) making payment,
      in
      cash or by certified or official bank check payable to the order of the Company,
      or by wire transfer of funds to the account of the Company, in any such case,
      in
      the amount obtained by multiplying (a) the number of shares of Common Stock
      designated by the Holder in the subscription form by (b) the Purchase Price
      then
      in effect. On any partial exercise the Company will forthwith issue and deliver
      to or upon the order of the Holder a new Warrant or Warrants of like tenor,
      in
      the name of the Holder or as the Holder (upon payment by the Holder of any
      applicable transfer taxes) may request, providing in the aggregate on the face
      or faces thereof for the purchase of the number of shares of Common Stock for
      which such Warrant or Warrants may still be exercised. The subscription form
      may
      be surrendered by telephone line facsimile transmission to such telephone number
      for the Company as shall have been specified in writing to the Holder by the
      Company; provided,
      however,
      that if
      the subscription form is given to the Company by telephone line facsimile
      transmission the Holder shall send an original of such subscription form to
      the
      Company within ten Business Days after such subscription form is so given to
      the
      Company; provided
      further,
      however,
      that
      any failure or delay on the part of the Holder in giving such original of any
      subscription form shall not affect the validity or the date on which such
      subscription form is so given by telephone line facsimile
      transmission.

    

    (b) Net
      Exercise. The
      Holder may elect to exercise this Warrant, in whole at any time or in part
      from
      time to time, by receiving shares of Common Stock equal to the net issuance
      value (as determined below) of this Warrant, or any part hereof, upon surrender
      of the subscription form annexed hereto (duly executed by the Holder) to the
      Company (followed by surrender of this Warrant to the Company within three
      Trading Days after surrender of such subscription form), in which event the
      Company shall issue to the Holder a number of shares of Common Stock computed
      using the following formula:

    

    X
      =
Y
      x (A
      - B)

    A

    

    where,

    

    
      	 	 	
              X
                =

            	
              the
                number of shares of Common Stock to be issued to the
                Holder

            

    

    

    
      	 	 	
              Y
                =

            	
              the
                number of shares of Common Stock as to which this Warrant is to be
                exercised

            

    

    

    
      	 	 	
              A
                =

            	
              the
                Current Fair Market Value of one share of Common Stock calculated
                as of
                the last Trading Day immediately preceding the exercise of this
                Warrant

            

    

    

    
      	 	 	
              B
                =

            	
              the
                Purchase Price

            

    

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    

    2. Delivery
      of Stock Certificates, etc., on Exercise.
      As soon
      as practicable after the exercise of this Warrant and in any event within three
      Trading Days thereafter, upon the terms and subject to the conditions of this
      Warrant, the Company at its expense (including the payment by it of any
      applicable issue or stamp taxes) will cause to be issued in the name of and
      delivered to the Holder, or as the Holder (upon payment by the Holder of any
      applicable transfer taxes) may direct, a certificate or certificates for the
      number of fully paid and nonassessable shares of Common Stock (or Other
      Securities) to which the Holder shall be entitled on such exercise, in such
      denominations as may be requested by the Holder, plus, in lieu of any fractional
      share to which the Holder would otherwise be entitled, cash equal to such
      fraction multiplied by the then Current Fair Market Value of one full share,
      together with any other stock or Other Securities or any property (including
      cash, where applicable) to which the Holder is entitled upon such exercise
      pursuant to Section 1 or otherwise. The Company shall not be required, however,
      to pay any tax or other charge imposed in connection with any transfer involved
      in the issue of any certificate for shares of Common Stock (or Other Securities)
      issuable upon exercise of this Warrant or payment of cash to any Person other
      than the Holder, and in case of such transfer or payment the Company shall
      not
      be required to deliver any certificate for shares of Common Stock (or Other
      Securities) upon such exercise or pay any cash until such tax or charge has
      been
      paid or it has been established to the Company's reasonable satisfaction that
      no
      such tax or charge is due. Upon exercise of this Warrant as provided herein,
      the
      Company’s obligation to issue and deliver the certificates for Common Stock
      shall be absolute and unconditional, irrespective of the absence of any action
      by the Holder to enforce the same, any waiver or consent with respect to any
      provision hereof, the recovery of any judgment against any Person or any action
      to enforce the same, any failure or delay in the enforcement of any other
      obligation of the Company to the Holder, or any setoff, counterclaim,
      recoupment, limitation or termination, or any breach or alleged breach by the
      Holder or any other Person of any obligation to the Company or any violation
      or
      alleged violation of law by the Holder or any other Person, and irrespective
      of
      any other circumstance which might otherwise limit such obligation of the
      Company to the Holder in connection with such exercise. If the Company fails
      to
      issue and deliver the certificates for the Common Stock to the Holder pursuant
      to the first sentence of this paragraph as and when required to do so, in
      addition to any other liabilities the Company may have hereunder and under
      applicable law, the Company shall pay or reimburse the Holder on demand for
      all
      out-of-pocket expenses, including, without limitation, fees and expenses of
      legal counsel, incurred by the Holder as a result of such failure.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    

    3. Adjustment
      for Dividends in Other Stock, Property, etc.; Reclassification,
      etc.
      In case
      at any time or from time to time on or after the Issuance Date, all the holders
      of Common Stock (or Other Securities) shall have received, or (on or after
      the
      record date fixed for the determination of stockholders eligible to receive)
      shall have become entitled to receive, without payment therefor,

    

    (a) other
      or
      additional stock, rights, warrants or other securities or property (other than
      cash) by way of dividend, or

    

    (b) any
      cash
      (excluding cash dividends payable solely out of earnings or earned surplus
      of
      the Company), or

    

    (c) other
      or
      additional stock, rights, warrants or other securities or property (including
      cash) by way of spin-off, split-up, reclassification, recapitalization,
      combination of shares or similar corporate rearrangement,

    

    other
      than (i) additional shares of Common Stock (or Other Securities) issued as
      a
      stock dividend or in a stock-split (adjustments in respect of which are provided
      for in Section 5) and (ii) rights or warrants to subscribe for Common Stock
      at
      less than the Current Fair Market Value (adjustments in respect of which are
      provided in Section 6), then and in each such case the Holder, on the exercise
      hereof as provided in Section 1, shall be entitled to receive the amount of
      stock, rights, warrants and Other Securities and property (including cash in
      the
      cases referred to in subdivisions (b) and (c) of this Section 3) which the
      Holder would hold on the date of such exercise if on the date thereof the Holder
      had been the holder of record of the number of shares of Common Stock called
      for
      on the face of this Warrant and had thereafter, during the period from the
      date
      thereof to and including the date of such exercise, retained such shares and
      all
      such other or additional stock, rights, warrants and Other Securities and
      property (including cash in the case referred to in subdivisions (b) and (c)
      of
      this Section 3) receivable by the Holder as aforesaid during such period, giving
      effect to all adjustments called for during such period by Section
      4.

    

    4. Exercise
      upon a Reorganization Event.
      In case
      of any Reorganization Event the Company shall, as a condition precedent to
      the
      consummation of the transactions constituting, or announced as, such
      Reorganization Event, cause effective provisions to be made so that the Holder
      shall have the right thereafter, by exercising this Warrant (in lieu of the
      shares of Common Stock of the Company and Other Securities or property
      purchasable and receivable upon exercise of the rights represented hereby
      immediately prior to such transaction) to purchase the kind and amount of shares
      of stock and Other Securities and property (including cash) receivable upon
      such
      Reorganization Event by a holder of the number of shares of Common Stock that
      might have been received upon exercise of this Warrant immediately prior to
      such
      Reorganization Event. Any such provision shall include provisions for
      adjustments in respect of such shares of stock and Other Securities and property
      that shall be as nearly equivalent as may be practicable to the adjustments
      provided for in this Warrant. The provisions of this Section 4 shall apply
      to
      successive Reorganization Events.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    

    5. Adjustment
      for Certain Extraordinary Events.
      In the
      event that on or after the Issuance Date the Company shall (i) issue additional
      shares of the Common Stock as a dividend or other distribution on outstanding
      Common Stock, (ii) subdivide or reclassify its outstanding shares of Common
      Stock, or (iii) combine its outstanding shares of Common Stock into a smaller
      number of shares of Common Stock, then, in each such event, the Purchase Price
      shall, simultaneously with the happening of such event, be adjusted by
      multiplying the Purchase Price in effect immediately prior to such event by
      a
      fraction, the numerator of which shall be the number of shares of Common Stock
      outstanding immediately prior to such event and the denominator of which shall
      be the number of shares of Common Stock outstanding immediately after such
      event, and the product so obtained shall thereafter be the Purchase Price then
      in effect. The Purchase Price, as so adjusted, shall be readjusted in the same
      manner upon the happening of any successive event or events described herein
      in
      this Section 5. The Holder shall thereafter, on the exercise hereof as provided
      in Section 1, be entitled to receive that number of shares of Common Stock
      determined by multiplying the number of shares of Common Stock which would
      be
      issuable on such exercise immediately prior to such issuance by a fraction
      of
      which (i) the numerator is the Purchase Price in effect immediately prior to
      such issuance and (ii) the denominator is the Purchase Price in effect on the
      date of such exercise.

    

    6. Issuance
      of Rights or Warrants to Common Stockholders at less than Current Fair Market
      Value.
      In case
      the Company shall on or after the Issuance Date issue rights or warrants to
      all
      holders of its outstanding shares of Common Stock entitling them to subscribe
      for or purchase shares of Common Stock at a price per share less than the
      Current Fair Market Value on the record date fixed for the determination of
      stockholders entitled to receive such rights or warrants, then

    

    (a) the
      Purchase Price shall be adjusted so that the same shall equal the price
      determined by multiplying the Purchase Price in effect at the opening of
      business on the day after such record date by a fraction of which the numerator
      shall be the number of shares of Common Stock outstanding at the close of
      business on such record date plus the number of shares which the aggregate
      offering price of the total number of shares so offered would purchase at such
      Current Fair Market Value, and the denominator shall be the number of shares
      of
      Common Stock outstanding on the close of business on such record date plus
      the
      total number of additional shares of Common Stock so offered for subscription
      or
      purchase; and

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    

    (b) the
      number of shares of Common Stock which the Holder may thereafter purchase upon
      exercise of this Warrant at the opening of business on the day after such record
      date shall be increased to a number equal to the quotient obtained by dividing
      (x) the Aggregate Purchase Price in effect immediately prior to such adjustment
      in the Purchase Price pursuant to clause (a) of this Section 6 by
      (y) the
      Purchase Price in effect immediately after such adjustment in the Purchase
      Price
      pursuant to clause (a) of this Section 6.

    

    Such
      adjustment shall become effective immediately after the opening of business
      on
      the day following the record date fixed for determination of stockholders
      entitled to receive such rights or warrants. To the extent that shares of Common
      Stock are not delivered pursuant to such rights or warrants, upon the expiration
      or termination of such rights or warrants, the Purchase Price shall be
      readjusted to the Purchase Price which would then be in effect had the
      adjustments made upon the issuance of such rights or warrants been made on
      the
      basis of delivery of only the number of shares of Common Stock actually
      delivered and the number of shares of Common Stock for which this Warrant may
      thereafter be exercised shall be readjusted (subject to proportionate adjustment
      for any intervening exercises of this Warrant) to the number which would then
      be
      in effect had the adjustments made upon the issuance of such rights or warrants
      been made on the basis of delivery of only the number of shares of Common Stock
      actually delivered. In the event that such rights or warrants are not so issued,
      the Purchase Price shall again be adjusted to be the Purchase Price which would
      then be in effect if such record date had not been fixed and the number of
      shares of Common Stock for which this Warrant may thereafter be exercised shall
      again be adjusted (subject to proportionate adjustment for any intervening
      exercises of this Warrant) to be the number which would then be in effect if
      such record date had not been fixed. In determining whether any rights or
      warrants entitle the holder to subscribe for or purchase shares of Common Stock
      at less than such Current Fair Market Value, and in determining the aggregate
      offering price of such shares of Common Stock, there shall be taken into account
      any consideration received for such rights or warrants, the value of such
      consideration, if other than cash, to be determined by the Board of
      Directors.

    

    7. Issuance
      at Less than Current Fair Market Value.
      (a) In
      case at any time on or after the Issuance Date the Company shall issue shares
      of
      its Common Stock or Common Stock Equivalents (collectively, the “Newly Issued
      Shares”), other than an issuance pro rata to all holders of its outstanding
      Common Stock (adjustments for which are provided in Sections 5 and 6) and other
      than an issuance in respect of which Section 9 is applicable, at a price below
      the Current Fair Market Value of the Common Stock at the time of such issuance,
      then following such issuance of Newly Issued Shares the Purchase Price shall
      be
      reduced as provided in clause (b) of this Section 7 and the number of shares
      of
      Common Stock which may be issued upon exercise of this Warrant shall be
      increased as provided in clause (c) of this Section 7. 

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    

    (b) The
      reduction in the Purchase Price following any such adjustment shall be
      determined by multiplying the Purchase Price immediately prior to such
      adjustment by a fraction, of which the numerator shall be the sum of (1) the
      number of shares of Common Stock outstanding immediately prior to the issuance
      of the Newly Issued Shares (calculated on a fully-diluted basis assuming the
      exercise or conversion of all options, warrants, purchase rights or convertible
      securities which are exercisable or convertible at the time of the issuance
      of
      the Newly Issued Shares) plus
      (2)
      the
      number of shares of Common Stock which the aggregate consideration, if any,
      received by the Company for the number of Newly Issued Shares would purchase
      at
      a price equal to the Current Fair Market Value of the Common Stock at the time
      of such issuance, and the denominator shall be the sum of (X) the number of
      shares of Common Stock outstanding immediately prior to the issuance of the
      Newly Issued Shares (calculated on a fully-diluted basis assuming the exercise
      or conversion of all options, warrants, purchase rights or convertible
      securities which are exercisable or convertible at the time of the issuance
      of
      the Newly Issued Shares) plus
      (Y)
      the
      number of Newly Issued Shares. The adjustment provided for in this Section
      7(b)
      may be expressed as the following mathematical formula: 

    

      
        	
                NPP =

              	
                  (
                  O +(C / FMV))  

              	
                x
                  PP

              
	
              	
                (
                  O
                  + N )

              	 

      

    

     

    where,

    

    
      	 	
              C

            	
              =

            	
              aggregate
                consideration received by the Company for the Newly Issued
                Shares

            

    

    

    
      	 	
              N

            	
              =

            	
              number
                of Newly Issued Shares

            

    

    

    
      	 	
              O

            	
              =

            	
              number
                of shares of Common Stock outstanding (on a fully diluted basis,
                as
                described above) immediately prior to the issuance of the Newly Issued
                Shares

            

    

    

    
      	 	
              FMV

            	
              =

            	
              Current
                Fair Market Value of the Common Stock at the time of issuance of
                the Newly
                Issued Shares

            

    

    

    
      	 	
              PP

            	
              =

            	
              Purchase
                Price immediately prior to the issuance of the Newly Issued
                Shares

            

    

    

    
      	 	
              NPP

            	
              =

            	
              Purchase
                Price immediately after the issuance of the Newly Issued
                Shares

            

    

    

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

       

    

    (c) If
      the
      Purchase Price is reduced in connection with the issuance of Newly Issued Shares
      as provided in Section 7(b), then the number of shares of Common Stock for
      which
      this Warrant may thereafter be exercised shall be increased at the time of
      such
      reduction in the Purchase Price to a number equal to the quotient obtained
      by
      dividing (x) the Aggregate Purchase Price in effect immediately prior to such
      issuance of Newly Issued Shares by
      (y) the
      Purchase Price in effect immediately after such issuance of Newly Issued Shares
      after giving effect to such reduction in the Purchase Price pursuant to Section
      7(b).

    

    (d) Notwithstanding
      the foregoing, no adjustment shall be made under this Section 7 by reason
      of:

    

    (1) the
      issuance by the Company of shares of Common Stock pro rata to all holders of
      the
      Common Stock so long as (i) any adjustment required by Section 5 is made and
      (ii) the Company shall have given notice thereof to the Holder pursuant to
      Section 14;

    

    (2) the
      issuance by the Company of the Notes, the Other Notes, the Warrants or the
      Other
      Warrants or shares of Common Stock upon conversion of the Notes, or the Other
      Notes or upon exercise of this Warrant or the Other Warrants or in accordance
      with the terms hereof and thereof; 

    

    (3) the
      issuance of Common Stock upon conversion, exercise or exchange of Common Stock
      Equivalents outstanding on the Issuance Date in accordance with their terms
      on
      the Issuance Date; or

    

    4)
      the
      issuance by the Company of Common Stock and Common Stock Equivalents as
      consideration for acquisitions; provided, that such shares in the aggregate
      amount to no more than 1,853,536 shares (as may be adjusted for stock splits,
      combinations, recapitalizations and the like); and provided further that, to
      the
      extent any shares are issued in excess of such amount, adjustment shall be
      made
      pursuant to this provision with respect to the issuance of all such
      shares.

    

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

       

    

    8. Adjustment
      For Certain Issuances.
      (a) In
      case at any time on or after the Issuance Date the Company issues shares of
      Common Stock or Common Stock Equivalents at a price per share at which the
      Company sells such shares of Common Stock or the price per share at which the
      holders of such Common Stock Equivalents are entitled to acquire shares of
      Common Stock upon conversion or exercise thereof which is less than the Purchase
      Price in effect at the time of such issuance, then following such issuance
      the
      Purchase Price shall be reduced to the price per share (or weighted average
      price per share, if such shares are issued, or such Common Stock Equivalents
      may
      be converted or exercised, at different prices) at which such shares of Common
      Stock are issued or at which such Common Stock Equivalents may be exercised,
      if
      the same is lower than the Purchase Price in effect immediately prior to such
      issuance. If the Purchase Price is reduced pursuant to this Section 8, then
      the
      number of shares of Common Stock for which this Warrant may thereafter be
      exercised shall be increased at the time of such reduction of the Purchase
      Price
      to a number equal to the quotient obtained by dividing (x) the Aggregate
      Purchase Price in effect immediately prior to such issuance by
      (y) the
      Purchase Price in effect immediately after such issuance after giving effect
      to
      such reduction in the Purchase Price pursuant to this Section 8.

    

    (b) If
      any
      adjustment in the Purchase Price is made pursuant to this Section 8 in respect
      of any issuance of shares of Common Stock or Common Stock Equivalents, no
      adjustment in the Purchase Price or the number of shares of Common Stock
      issuable upon exercise of this Warrant shall be made by reason of such issuance
      pursuant to Section 8.

    

    (c) Notwithstanding
      the foregoing, no adjustment shall be made under this Section 8 by reason
      of:

    

    (1) the
      issuance by the Company of shares of Common Stock pro rata to all holders of
      the
      Common Stock so long as (i) any adjustment required by Section 5 is made and
      (ii) the Company shall have given notice thereof to the Holder pursuant to
      Section 14;

    

    (2) the
      issuance by the Company of the Notes, the Other Notes, the Warrants or the
      Other
      Warrants or shares of Common Stock upon conversion of the Notes, or the Other
      Notes or upon exercise of this Warrant or the Other Warrants or in accordance
      with the terms hereof and thereof; 

    

    (3) the
      issuance of Common Stock upon conversion, exercise or exchange of Common Stock
      Equivalents outstanding on the Issuance Date in accordance with their terms
      on
      the Issuance Date; or

    

    (4) the
      issuance by the Company of option grants for Common Stock or other of the
      Company’s equity securities for employees under a stock option, equity
      compensation or similar plan duly adopted by the Board of Directors in an amount
      not to exceed 926,768 shares (as may be adjusted for stock splits, combinations,
      recapitalizations and the like); provided that, to the extent any shares are
      issued in excess of such amount, adjustment shall be made pursuant to this
      provision with respect to the issuance of all such shares; or

    

    (5) the
      issuance by the Company of Common Stock and Common Stock Equivalents as
      consideration for acquisitions; provided that such shares in the aggregate
      amount to no more than 1,853,536 shares (as may be adjusted for stock splits,
      combinations, recapitalizations and the like); and provided further that, to
      the
      extent any shares are issued in excess of such amount, adjustment shall be
      made
      pursuant to this provision with respect to the issuance of all such
      shares.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    

    9. Effect
      of Reclassification, Consolidation, Merger or Sale. (a)
      If
      any of the following events occur, namely (i) any reclassification or change
      of
      the outstanding shares of Common Stock (other than a change in par value, or
      from par value to no par value, or from no par value to par value, or as a
      result of a subdivision or combination), (ii) any consolidation, merger or
      combination of the Company with another corporation as a result of which holders
      of Common Stock shall be entitled to receive stock, securities or other property
      or assets (including cash) with respect to or in exchange for such Common Stock,
      or (iii) any sale or conveyance of the properties and assets of the Company
      as,
      or substantially as, an entirety to any other Person as a result of which
      holders of Common Stock shall be entitled to receive stock, securities or other
      property or assets (including cash) with respect to or in exchange for such
      Common Stock, then the Company or the successor or purchasing Person, as the
      case may be, shall execute with the Holder a written agreement providing that
      (x) this Warrant shall thereafter entitle the Holder to purchase the kind and
      amount of shares of stock and Other Securities or property or assets (including
      cash) receivable upon such reclassification, change, consolidation, merger,
      combination, sale or conveyance by the holder of a number of shares of Common
      Stock issuable upon exercise of this Warrant (assuming, for such purposes,
      a
      sufficient number of authorized shares of Common Stock available to exercise
      this Warrant) immediately prior to such reclassification, change, consolidation,
      merger, combination, sale or conveyance assuming such holder of Common Stock
      did
      not exercise such holder's rights of election, if any, as to the kind or amount
      of securities, cash or other property receivable upon such consolidation,
      merger, statutory exchange, sale or conveyance (provided
      that, if
      the kind or amount of securities, cash or other property receivable upon such
      consolidation, merger, statutory exchange, sale or conveyance is not the same
      for each share of Common Stock in respect of which such rights of election
      shall
      not have been exercised (“non-electing share”), then for the purposes of this
      Section 9 the kind and amount of securities, cash or other property receivable
      upon such consolidation, merger, statutory exchange, sale or conveyance for
      each
      non-electing share shall be deemed to be the kind and amount so receivable
      per
      share by a plurality of the non-electing shares), (y) in the case of any such
      successor or purchasing Person, upon such consolidation, merger, combination,
      sale or conveyance such successor or purchasing Person shall be jointly and
      severally liable with the Company for the performance of all of the Company's
      obligations under this Warrant and the Note Purchase Agreement and (z) if
      registration or qualification is required under the 1933 Act or applicable
      state
      law for the public resale by the Holder of such shares of stock and Other
      Securities so issuable upon exercise of this Warrant, such registration or
      qualification shall be completed prior to such reclassification, change,
      consolidation, merger, combination or sale. Such written agreement shall provide
      for adjustments which shall be as nearly equivalent as may be practicable to
      the
      adjustments provided for in this Warrant. If, in the case of any such
      reclassification, change, consolidation, merger, combination, sale or
      conveyance, the stock or other securities and assets receivable thereupon by
      a
      holder of shares of Common Stock includes shares of stock or other securities
      and assets of a corporation other than the successor or purchasing corporation,
      as the case may be, in such reclassification, change, consolidation, merger,
      combination, sale or conveyance, then such written agreement shall also be
      executed by such other corporation and shall contain such additional provisions
      to protect the interests of the Holder as the Board of Directors shall
      reasonably consider necessary by reason of the foregoing.

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    

    (b) The
      above
      provisions of this Section 9 shall similarly apply to successive
      reclassifications, changes, consolidations, mergers, combinations, sales and
      conveyances.

    

    (c) If
      this
      Section 9 applies to any event or occurrence, Section 4 shall not apply to
      such
      event or occurrence.

    

    10. Tax
      Adjustments. The
      Company may make such reductions in the Purchase Price, in addition to those
      required by Sections 3, 4, 5, 6, 7 and 8, as the Board of Directors considers
      to
      be advisable to avoid or diminish any income tax to holders of Common Stock
      or
      rights to purchase Common Stock resulting from any dividend or distribution
      of
      stock (or rights to acquire stock) or from any event treated as such for income
      tax purposes.

    

    11. Minimum
      Adjustment.
      (a) No
      adjustment in the Purchase Price (and no related adjustment in the number of
      shares of Common Stock which may thereafter be purchased upon exercise of this
      Warrant) shall be required unless such adjustment would require an increase
      or
      decrease of at least 1% in the Purchase Price; provided,
      however, that
      any
      adjustments which by reason of this Section 11 are not required to be made
      shall
      be carried forward and taken into account in any subsequent adjustment. All
      such
      calculations under this Warrant shall be made by the Company and shall be made
      to the nearest cent or to the nearest one hundredth of a share, as the case
      may
      be.

    

    (b) No
      adjustment need be made for a change in the par value of the Common Stock or
      from par value to no par value or from no par value to par value.

    

    12. Notice
      of Adjustments.
      Whenever
      the Purchase Price is adjusted as herein provided, the Company shall promptly,
      but in no event later than five Trading Days thereafter, give a notice to the
      Holder setting forth the Purchase Price and number of shares of Common Stock
      which may be purchased upon exercise of this Warrant after such adjustment
      and
      setting forth a brief statement of the facts requiring such adjustment but
      which
      such statement shall not include any information which would be material
      non-public information for purposes of the 1934 Act. Failure to deliver such
      notice shall not affect the legality or validity of any such
      adjustment.

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    

    13. Further
      Assurances.
      The
      Company will take all action that may be necessary or appropriate in order
      that
      the Company may validly and legally issue fully paid and nonassessable shares
      of
      stock, free from all taxes, liens and charges with respect to the issue thereof,
      on the exercise of all or any portion of this Warrant from time to time
      outstanding.

    

    14. Notice
      to Holder Prior to Certain Actions. In
      case
      on or after the Issuance Date:

    

    (a) the
      Company shall declare a dividend (or any other distribution) on its Common
      Stock
      (other than in cash out of retained earnings); or

    

    (b) the
      Company shall authorize the granting to the holders of its Common Stock of
      rights or warrants to subscribe for or purchase any share of any class or any
      other rights or warrants; or

    

    (c) the
      Board
      of Directors shall authorize any reclassification of the Common Stock (other
      than a subdivision or combination of its outstanding Common Stock, or a change
      in par value, or from par value to no par value, or from no par value to par
      value), or any consolidation or merger or other business combination transaction
      to which the Company is a party and for which approval of any stockholders
      of
      the Company is required, or the sale or transfer of all or substantially all
      of
      the assets of the Company; or

    

    (d) there
      shall be pending the voluntary or involuntary dissolution, liquidation or
      winding-up of the Company;

    

    the
      Company shall give the Holder, as promptly as possible but in any event at
      least
      ten Trading Days prior to the applicable date hereinafter specified, a notice
      stating (x) the date on which a record is to be taken for the purpose of such
      dividend, distribution or rights or warrants, or, if a record is not to be
      taken, the date as of which the holders of Common Stock of record to be entitled
      to such dividend, distribution or rights are to be determined, or (y) the date
      on which such reclassification, consolidation, merger, other business
      combination transaction, sale, transfer, dissolution, liquidation or winding-up
      is expected to become effective or occur, and the date as of which it is
      expected that holders of Common Stock of record who shall be entitled to
      exchange their Common Stock for securities or other property deliverable upon
      such reclassification, consolidation, merger, other business combination
      transaction, sale, transfer, dissolution, liquidation or winding-up shall be
      determined. Such notice shall not include any information which would be
      material non-public information for purposes of the 1934 Act. Failure to give
      such notice, or any defect therein, shall not affect the legality or validity
      of
      such dividend, distribution, reclassification, consolidation, merger, sale,
      transfer, dissolution, liquidation or winding-up. In the case of any such action
      of which the Company gives such notice to the Holder or is required to give
      such
      notice to the Holder, the Holder shall be entitled to give a subscription form
      to exercise this Warrant in whole or in part that is contingent on the
      completion of such action.

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    

    15. Reservation
      of Stock, etc., Issuable on Exercise of Warrants.
      Subject
      to the provisions of Section 5(l) of the Note Purchase Agreement, the Company
      will at all times reserve and keep available out of its authorized but unissued
      shares of capital stock, solely for issuance and delivery on the exercise of
      this Warrant, a sufficient number of shares of Common Stock (or Other
      Securities) to effect the full exercise of this Warrant and the exercise,
      conversion or exchange of any other warrant or security of the Company
      exercisable for, convertible into, exchangeable for or otherwise entitling
      the
      holder to acquire shares of Common Stock (or Other Securities), and if at any
      time the number of authorized but unissued shares of Common Stock (or Other
      Securities) shall not be sufficient to effect such exercise, conversion or
      exchange, the Company shall take such action as may be necessary to increase
      its
      authorized but unissued shares of Common Stock (or Other Securities) to such
      number as shall be sufficient for such purposes.

    

    16. Transfer
      of Warrant.
      This
      Warrant shall inure to the benefit of the successors to and assigns of the
      Holder. This Warrant and all rights hereunder, in whole or in part, are
      registrable at the office or agency of the Company referred to below by the
      Holder in Person or by his duly authorized attorney, upon surrender of this
      Warrant properly endorsed accompanied by an assignment form in the form
      attached to
      this
      Warrant, or other customary form, duly executed by the transferring
      Holder.

    

    17. Register
      of Warrants.
      The
      Company shall maintain, at the principal office of the Company (or such other
      office as it may designate by notice to the Holder), a register in which the
      Company shall record the name and address of the Person in whose name this
      Warrant has been issued, as well as the name and address of each successor
      and
      prior owner of such Warrant. The Company shall be entitled to treat the Person
      in whose name this Warrant is so registered as the sole and absolute owner
      of
      this Warrant for all purposes.

    

    18. Exchange
      of Warrant.
      This
      Warrant is exchangeable, upon the surrender hereof by the Holder at the office
      or agency of the Company referred to in Section 16, for one or more new Warrants
      of like tenor representing in the aggregate the right to subscribe for and
      purchase the number of shares of Common Stock which may be subscribed for and
      purchased hereunder, each of such new Warrants to represent the right to
      subscribe for and purchase such number of shares as shall be designated by
      the
      Holder at the time of such surrender.

    

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

       

    

    19. Replacement
      of Warrant.
      On
      receipt by the Company of evidence reasonably satisfactory to it of the
      ownership of and the loss, theft, destruction or mutilation of this Warrant
      and
      (a) in the case of loss, theft or destruction, of indemnity from the Holder
      reasonably satisfactory in form to the Company (and without the requirement
      to
      post any bond or other security), or (b) in the case of mutilation, upon
      surrender and cancellation of this Warrant, the Company will execute and deliver
      to the Holder a new Warrant of like tenor without charge to the
      Holder.

    

    20. Warrant
      Agent.
      The
      Company may, by written notice to the Holder, appoint the transfer agent and
      registrar for the Common Stock as the Company's agent for the purpose of issuing
      Common Stock (or Other Securities) on the exercise of this Warrant pursuant
      to
      Section 1, and the Company may, by written notice to the Holder, appoint an
      agent having an office in the United States of America for the purpose of
      exchanging this Warrant pursuant to Section 18, and replacing this Warrant
      pursuant to Section 19, or any of the foregoing, and thereafter any such
      exchange or replacement, as the case may be, shall be made at such office by
      such agent.

    

    21. Remedies.
      The
      Company stipulates that the remedies at law of the Holder in the event of any
      default or threatened default by the Company in the performance of or compliance
      with any of the terms of this Warrant are not and will not be adequate, and
      that
      such terms may be specifically enforced by a decree for the specific performance
      of any agreement contained herein or by an injunction against a violation of
      any
      of the terms hereof or otherwise.

    

    22. No
      Rights or Liabilities as a Stockholder.
      This
      Warrant shall not entitle the Holder to any voting rights or other rights as
      a
      stockholder of the Company. Nothing contained in this Warrant shall be construed
      as conferring upon the Holder the right to vote or to consent or to receive
      notice as a stockholder of the Company on any matters or with respect to any
      rights whatsoever as a stockholder of the Company. No dividends or interest
      shall be payable or accrued in respect of this Warrant or the interest
      represented hereby or the Common Stock (or Other Securities) purchasable
      hereunder until, and only to the extent that, this Warrant shall have been
      exercised in accordance with its terms.

    

    23. Notices,
      etc.
      All
      notices and other communications from the Company to the Holder shall be mailed
      by first class certified mail, postage prepaid, at such address as may have
      been
      furnished to the Company in writing by the Holder or at the address shown for
      the Holder on the register of Warrants referred to in Section 16.

    

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

       

    

    24. Transfer
      Restrictions.
      This
      Warrant has not been and is not being registered under the provisions of the
      1933 Act or any state securities laws and this Warrant may not be transferred
      unless (1) the transferee is an “accredited investor” (as defined in Regulation
      D under the 1933 Act) or a QIB in a transfer that meets the requirements of
      Rule
      144A and (2) the Holder shall have delivered to the Company an opinion of
      counsel, reasonably satisfactory in form, scope and substance to the Company,
      to
      the effect that this Warrant may be sold or transferred without registration
      under the 1933 Act. Prior to any such transfer, such transferee shall have
      represented in writing to the Company that such transferee has requested and
      received from the Company all information relating to the business, properties,
      operations, condition (financial or other), results of operations or prospects
      of the Company deemed relevant by such transferee; that such transferee has
      been
      afforded the opportunity to ask questions of the Company concerning the
      foregoing and has had the opportunity to obtain and review the Registration
      Statement (as defined in the Note Purchase Agreement) and the prospectus
      included therein, each as amended or supplemented to the date of transfer to
      such transferee, and the reports and other information concerning the Company
      which at the time of such transfer have been filed by the Company with the
      SEC
      pursuant to the 1934 Act and which are incorporated by reference in such
      prospectus as of the date of such transfer. If such transfer is intended to
      assign the rights and obligations under Sections 5, 8, 9 and 10 of the Note
      Purchase Agreement, such transfer shall otherwise be made in compliance with
      Section 10(j) of the Note Purchase Agreement. 

    

    25. Rule
      144A Information Requirement. Within
      the period prior to the expiration of the holding period applicable to sales
      hereof under Rule 144(k) under the 1933 Act (or any successor provision), the
      Company covenants and agrees that it shall, during any period in which it is
      not
      subject to Section 13 or 15(d) under the 1934 Act, make available to the Holder
      and the holder of any shares of Common Stock issued upon exercise of this
      Warrant which continue to be Restricted Securities in connection with any sale
      thereof and any prospective purchaser of this Warrant from the Holder, the
      information required pursuant to Rule 144A(d)(4) under the 1933 Act upon the
      request of the Holder and it will take such further action as the Holder may
      reasonably request, all to the extent required from time to time to enable
      the
      Holder to sell this Warrant without registration under the 1933 Act within
      the
      limitation of the exemption provided by Rule 144A, as Rule 144A may be
      amended from time to time. Upon the request of the Holder, the Company will
      deliver to the Holder a written statement as to whether it has complied with
      such requirements. 

    

    26. Legend.
      Unless
      theretofore registered for resale under the 1933 Act, each certificate for
      shares issued upon exercise of this Warrant shall bear the following
      legend:

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    

    The
      securities represented by this certificate have not been registered under the
      Securities Act of 1933, as amended (the “1933 Act”). The securities have been
      acquired for investment and may not be resold, transferred or assigned in the
      absence of an effective registration statement for the securities under the
      1933
      Act, or an opinion of counsel that registration is not required under the 1933
      Act.

    

    27. Amendment;
      Waiver.
      This
      Warrant and any terms hereof may be changed, waived,
      discharged or terminated only by an instrument in writing signed by the party
      against which enforcement of such change, waiver, discharge or termination
      is
      sought. 

    

    28. Miscellaneous.
      This
      Warrant shall be construed and enforced in accordance with and governed by
      the
      internal laws of the State of New York. The headings, captions and footers
      in
      this Warrant are for purposes of reference only, and shall not limit or
      otherwise affect any of the terms hereof. The invalidity or unenforceability
      of
      any provision hereof shall in no way affect the validity or enforceability
      of
      any other provision.

    

    29. Attorneys'
      Fees.
      In any
      litigation, arbitration or court proceeding between the Company and Holder
      relating hereto, the prevailing party shall be entitled to attorneys’ fees and
      expenses and all costs of proceedings incurred in enforcing this
      Warrant.

    

    [Remainder
      of Page Intentionally Left Blank]

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      Company has caused this Warrant to be duly executed on its behalf by one of
      its
      officers thereunto duly authorized.

     

    
      	 	 	 
	 	BERLINER
              COMMUNICATIONS, INC.
	 
 	 
 	 
 
	
              Dated:
                February 15, 2007

            	By:
              	 /s/
RICH
              BERLINER
	 	
              

              Name:
                Rich Berliner

            
	 	
              Title:
                Chief Executive Officer

            

    

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

     

    ASSIGNMENT

    

    For
      value
                               
      hereby
      sell(s), assign(s) and transfer(s) unto                                
      (Please
      insert social security or other Taxpayer Identification Number of assignee:
                                     )
      the
      attached original, executed Warrant to purchase                          
      share of
      Common Stock of Berliner Communications, Inc., a Delaware corporation (the
      “Company”), and hereby irrevocably constitutes and appoints                                
      attorney
      to transfer the Warrant on the books of the Company, with full power of
      substitution in the premises.

    

    In
      connection with any transfer of the Warrant within the period prior to the
      expiration of the holding period applicable to sales thereof under Rule 144(k)
      under the 1933 Act (or any successor provision) (other than any transfer
      pursuant to a registration statement that has been declared effective under
      the
      1933 Act), the undersigned confirms that such Warrant is being
      transferred:

    

    
      	
            	o	
              To
                the Company or a subsidiary thereof;
                or

            

    

    

    
      	
            	o	
              To
                a QIB pursuant to and in compliance with Rule 144A;
                or

            

    

    
      
         

        
          	
                	o	
                   To
                    an “accredited investor” (as defined in Regulation D under the 1933 Act)
                    pursuant to and in compliance with the 1933 Act;
                    or

                

        

      

       

      
        
          	
                	o	
                  Pursuant
                    to and in compliance with Rule 144 under the 1933
                    Act;

                

        

      

    

     

    and
      unless the box below is checked, the undersigned confirms that, to the knowledge
      of the undersigned, such Warrant is not being transferred to an “affiliate” (as
      defined in Rule 144 under the 1933 Act) of the Company.

     

    
      	
            	o	
              The
                transferee is an affiliate of the
                Company.

            

    

     

    Capitalized
      terms used in this Assignment and not defined in this Assignment shall have the
      respective meanings provided in the Warrant.

    

      
        	
                Dated: __________________

              	
                NAME:
                  __________________________

              
	 	____________________________
	 	
                                            
                  Signature(s)

              

      

    

            

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    Exhibit
      1

    

    FORM
      OF SUBSCRIPTION

    

    BERLINER
      COMMUNICATIONS, INC.

    

    (To
      be
      signed only on exercise of Warrant)

    

    TO: Berliner
      Communications, Inc.

    [Address]

    

    Attention:
      Chief Executive Officer

    

    Facsimile
      No.: (___) __________

    

    1. The
      undersigned Holder of the attached original, executed Warrant hereby elects
      to
      exercise its purchase right under such Warrant with respect to                             
      shares
      (the “Exercise Shares”) of Common Stock, as defined in the Warrant, of Berliner
      Communications, Inc., a Delaware corporation (the “Company”).

    

    2. The
      undersigned Holder (check one):

     

    
      
        	
              	o	
                (a) elects
                  to pay the Aggregate Purchase Price for such shares of Common Stock
                  (i) in
                  lawful money of the United States or by the enclosed certified
                  or official
                  bank check payable in United States dollars to the order of the
                  Company in
                  the amount of $                          ,
                  or (ii) by wire transfer of United States funds to the account
                  of the
                  Company in the amount of $                            ,
                  which transfer has been made before or simultaneously with the
                  delivery of
                  this Form of Subscription pursuant to the instructions of the
                  Company;

              

      

    

    

    or

    

    
      	
            	o	
              (b) elects
                to receive shares of Common Stock having a value equal to the value
                of the
                Warrant calculated in accordance with Section 1(b) of the
                Warrant.

            

    

    

    3. Please
      issue a stock certificate or certificates representing the appropriate number
      of
      shares of Common Stock in the name of the undersigned or in such other name(s)
      as is specified below:

    

    
      
        
        

      

      
        1-1

        
          

        

      

      
        
        

      

    

     

    Name: ________________________________________ 

    

    Address:
      ______________________________________   

     

     ______________________________________

     

    Social
      Security or Tax Identification Number (if any):

     

    _____________________________

    

    
      	
              Dated:
                ______________

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

            
	 	 	 	
               

            
	 	 	 	 
	
            	 	 	
              
                

              

               

               

            
	
            	 	 	
              
                
(Address)

            
	
            	 	 	
            

    

     

    
      
        
        

      

      
        1-2

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