In light of recent court decisions concerning the rights of corporate directors and officers (including directors designated by sponsor shareholder investors) to advancement of expenses and indemnification, HM Capital Partners LLC (“HM Capital”) and...
January
27, 2010
Berliner
Communications, Inc.
00-00
Xxxxxxx Xxxxx
Fair
Lawn, New Jersey 07410
Re: Advancement and
Indemnification Rights
In light
of recent court decisions concerning the rights of corporate directors and
officers (including directors designated by sponsor shareholder investors) to
advancement of expenses and indemnification, HM Capital Partners LLC (“HM Capital”) and
Berliner Communications, Inc. (the “Company”) have agreed
to enter into this Letter Agreement (this “Agreement”) to
clarify their understandings with respect to certain
matters. Capitalized terms not defined elsewhere in this Agreement
are used herein as defined in Section
3.
This
Agreement clarifies certain rights of (i) HM Capital; (ii) any HM Capital
Affiliate or other persons or entities providing management, advisory,
consulting or other services at the direction or request of HM Capital or any HM
Capital Affiliate to or for the benefit of the Company or any successors or
direct or indirect parents or subsidiaries of the Company (individually,
including the Company, a “Berliner Company,”
and collectively, including the Company, the “Berliner Companies”);
(iii) any Fund; (iv) any persons designated by HM Capital, any HM Capital
Affiliate or any Fund to serve as a director, officer, board observer, partner,
trustee, fiduciary, manager, employee, agent, consultant or advisor, or
functional or foreign equivalent of the foregoing, of or to any of the Berliner
Companies or of or to any partnership or joint venture of which any Berliner
Company is a partner or member (collectively, the “HM Capital
Designees”); and (v) any direct or indirect partners (including general
partners), shareholders, members (including managing members), affiliates,
controlling persons, subsidiaries, directors, officers, fiduciaries, managers,
employees and agents of each of the foregoing (those persons and entities
identified in (i), (ii), (iii), (iv) and (v) are herein referred to collectively
as the “Indemnitees,” and
individually as an “Indemnitee”), whether
such right exists pursuant to any Organizational Document, Management Agreement
or any other agreement or document.
The
parties intend that (i) the Berliner Companies are and shall at all times be the
indemnitors of first resort with respect to any and all matters for which
advancement of expenses and indemnification are provided by the Berliner
Companies to or on behalf of any Indemnitee, without regard to the time of any
related claims and liabilities or of any act, statement or omission relating
thereto, (ii) the Berliner Companies shall advance expenses and/or indemnify
each Indemnitee on a primary basis, and (iii) any Indemnitee may be required to
seek advancement of expenses and/or indemnification from any other potential
source of such advancement or indemnification (including from any other
Indemnitee) only if, and to the extent, that the Berliner Companies are legally
and/or financially unable to advance expenses and/or indemnify, as the case may
be, to or on behalf of such Indemnitee.
In
consideration of the mutual agreements herein contained, and other good and
valuable consideration - including HM Capital’s agreement (or the agreement of
any HM Capital Affiliate) to provide management, advisory or other services to
the Berliner Companies and the agreement of the HM Capital Designees to serve
one or more Berliner Companies - the receipt and sufficiency of which is hereby
acknowledged, all parties intending to be legally bound hereby agree as
follows:
1. Company is Primary
Indemnitor.
Each of
the undersigned Berliner Companies hereby acknowledges and agrees that
(a) each of the undersigned Berliner Companies is an indemnitor of first
resort; (b) the obligations of the Berliner Companies to each Indemnitee are
primary, and any obligations of HM Capital, any HM Capital Affiliate or any Fund
or other Indemnitee to provide advancement of expenses or indemnification for
any Losses incurred by Indemnitee and for which any Berliner Company has agreed
(or is otherwise obligated) to indemnify Indemnitee (whether under any
Organizational Document, Management Agreement or any other agreement or
document) are secondary; and (c) if HM Capital, or any HM Capital Affiliate,
Fund or other Indemnitee, is obligated to pay, or pays, or causes to be paid for
any reason, any expense or Loss which any Berliner Company is otherwise
obligated (whether under any Organizational Document, Management Agreement or
other document or agreement) to pay to or on behalf of Indemnitee, then (x) HM
Capital, such HM Capital Affiliate, Fund or other Indemnitee, as the case may
be, shall be fully subrogated to and otherwise succeed to all rights of
Indemnitee with respect to such payment, including with respect to rights to
claim such amounts from any of the Berliner Companies; and (y) each of the
undersigned Berliner Companies shall jointly and severally reimburse, indemnify
and hold harmless (or cause one or more other Berliner Companies to reimburse,
indemnify and hold harmless) HM Capital, such HM Capital Affiliate, Fund or
other Indemnitee, as the case may be, for all such payments actually made by
such entity or person on behalf of or for the benefit of
Indemnitee.
2. Specific Waiver of
Subrogation, Contribution. etc.
Each
undersigned Berliner Company hereby unconditionally and irrevocably waives,
relinquishes and releases (and covenants and agrees not to exercise, and to
cause each affiliate of any Berliner Company not to exercise), any claims or
rights that any Berliner Company may now have or hereafter acquire against any
Indemnitee (in any capacity) that arise from or relate to the existence,
payment, performance or enforcement of one of the Berliner Companies’
obligations under this Agreement or under any indemnification obligation
(whether pursuant to any other contract, any Organizational Document, any
Management Agreement or otherwise), including any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of any Indemnitee against any other
Indemnitee, whether such claim, remedy or right arises in equity or under
contract, statute, common law or otherwise, including any right to claim, take
or receive from any Indemnitee, directly or indirectly, in cash or other
property or by set-off or in any other manner, any payment or security or other
credit support on account of such claim, remedy or right.
2
3. Definitions. As
used in this Agreement, the phrase “including” shall not be deemed to be a term
of limitation but rather shall be construed to mean “including, without
limitation” and the following terms are used with the meaning set forth
herein:
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(a)
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“HM Capital
Affiliate” means any entity that, directly or indirectly,
(i) is controlled by, (ii) controls or (iii) is under common control
with, HM Capital; provided, that, under no circumstances shall any
portfolio company of HM Capital (including any Berliner Company) be deemed
an HM Capital Affiliate hereunder.
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(b)
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“Fund” means any
investment fund formed or managed by HM Capital or any HM Capital
Affiliate or for which any HM Capital Affiliate serves as an investment
adviser, including Sector Performance Fund, LP and its parallel funds and
alternative vehicles, and any other partnership, limited liability company
or other legal entity that is an HM Capital Affiliate which, directly or
indirectly, owns equity securities of the Company or any other Berliner
Company.
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(c)
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“Losses” means
any and all damages, judgments, liabilities, assessments, fines,
penalties, amounts paid in settlement, fees and costs (including attorneys
fees and costs) or other losses.
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(d)
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“Management
Agreement” means any advisory, management, monitoring or other
similar or equivalent agreement, including the Financial Advisory
Agreement, dated as of September 27, 2007, by and among HM Capital
Partners I LP and the parties listed thereto, and the Monitoring and
Oversight Agreement, dated as of September 27, 2007, by and among HM
Capital Partners I LP and the parties listed thereto, in each case as
amended.
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(e)
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“Organizational
Document” means an entity’s certificate of incorporation, bylaws,
partnership agreement, limited liability company agreement, operating
agreement, indemnification agreement, or other similar or equivalent
agreement or document.
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4. Miscellaneous.
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(a)
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This
Agreement may be amended, modified, extended or terminated as to any
Berliner Company (and the provisions hereof may be waived) only by a
written agreement specifically identified as such and signed by HM Capital
and the relevant Berliner Company. No oral amendment,
modification or waiver of this Agreement shall be
effective.
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3
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(b)
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An
Indemnitee’s rights under this Agreement and any Organizational Document,
Management Agreement or other agreement or document that gives rise to
indemnification and/or advancement rights are present contractual rights
that shall fully vest upon any Indemnitee’s first service as a director,
officer, board observer, fiduciary, partner, trustee, manager, employee,
agent or functional or foreign equivalent of any of the foregoing of any
of the Berliner Companies. No amendment, alteration or repeal
of this Agreement or any other such agreement or document or of any
provision hereof or thereof validly effected shall limit or restrict any
right of Indemnitee under this Agreement or such agreement or document in
respect of any act, omission or statement of such Indemnitee occurring
prior to such amendment, alteration or
repeal.
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(c)
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Nothing
in this Agreement shall be construed to require: (i) HM Capital, any HM
Capital Affiliate or any other person or entity to continue to provide
management, advisory, consulting or other services, or (ii) any HM Capital
Designee to continue to serve as a director, officer or agent of any
Berliner Company (or in any other capacity). No Indemnitee’s
rights hereunder shall be limited or impaired in any way if such
Indemnitee ceases, for any reason, to serve or provide services to any
Berliner Company.
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(d)
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To
the extent permitted by applicable choice-of-law principles, this
Agreement and all claims arising out of or based upon this Agreement or
relating to the subject matter hereof shall be governed by and construed
in accordance with the domestic substantive laws of the State of Delaware
without giving effect to any choice- or conflict-of-law principles or
rules that would result in the application of the domestic substantive law
of any other jurisdiction.
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(e)
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Except
as, and to the extent, expressly provided herein, (i) no right or remedy
herein conferred is intended to be exclusive of any other right or remedy,
and every other right and remedy shall be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing
at law or in equity or otherwise, so long as such right or remedy does not
conflict with any right or remedy provided hereunder, (ii) any and
all rights to advancement of expenses and/or indemnification to which each
Indemnitee has ever been, is or may in the future be entitled from the
Berliner Companies shall remain unchanged by this Agreement, and (iii) the
assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
right or remedy. To the extent that any term or condition of
this Agreement conflicts with any term or condition under any other
agreement or document to which any Berliner Company or Indemnitee is a
party or by which any of them are otherwise bound (whether pursuant to an
Organizational Document, Management Agreement or any other agreement or
document) with respect to the subject matter of this Agreement, the terms
and conditions of this Agreement shall control. Each Berliner
Company hereby waives the right to enforce any rights under such other
agreement to the extent that such rights or remedies conflict with any
rights, remedies or other provisions
hereunder.
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4
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(f)
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Each
Indemnitee that is not a direct party hereunder is and shall be considered
an express third-party beneficiary hereunder and shall be entitled to
enforce this Agreement to the same extent as a party
hereunder.
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(g)
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If
any provision or provisions of this Agreement shall be held to be invalid,
illegal or unenforceable for any reason whatsoever: (i) the validity,
legality and enforceability of the remaining provisions of this Agreement
(including each portion of any section or subsection of this Agreement
containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby; (ii) such provision or
provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties
expressed herein; and (iii) to the fullest extent possible, the provisions
of this Agreement (including each portion of any section or subsection of
this Agreement containing any such provision held to be invalid, illegal
or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested
thereby.
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(h)
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This
Agreement may be executed in any number of counterparts and by each of the
parties in separate counterparts, each of which when so executed will be
deemed to be an original and all of which together will constitute one and
the same instrument.
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[The
Remainder of This Page Is Intentionally Left Blank.]
5
Very
truly yours,
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HM
CAPITAL PARTNERS LLC
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By:
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/s/
Xxxxx X. Xxxxxxx
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Name: Xxxxx
X. Xxxxxxx
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Title: Vice
President, Chief Financial Officer and
Secretary
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ACKNOWLEDGED
AND AGREED
TO as of
the date of this letter.
BERLINER
COMPANIES
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Berliner
Communications, Inc.
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By:
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/s/ Xxxx Xxxxxxxx |
Name: Xxxx
Xxxxxxxx
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Title: President
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BCI
Communications, Inc.
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By:
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/s/ Xxxx Xxxxxxxx |
Name: Xxxx
Xxxxxxxx
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Title: President
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Unitek
Holdings, Inc.
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By:
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/s/ Xxxxx X. Xxxxxxx |
Name: Xxxxx
X. Xxxxxxx
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Title: Vice
President and Secretary
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Unitek
Midco, Inc.
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By:
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/s/ Xxxxx X. Xxxxxxx |
Name: Xxxxx
X. Xxxxxxx
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Title: Vice
President and Secretary
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Unitek
Acquisition, Inc.
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By:
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/s/ Xxxxx X. Xxxxxxx |
Name: Xxxxx
X. Xxxxxxx
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Title: Vice
President and Secretary
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Unitek
USA, LLC
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By:
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/s/ X. Xxxxx Xxxxx |
Name: X.
Xxxxx Xxxxx
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Title: Chief
Executive
Officer
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Signature
Page to Indemnity Priority Agreement