AMENDMENT AND WAIVER AGREEMENT
This
AMENDMENT AND WAIVER AGREEMENT (this “Agreement”)
is
made and entered into as of this 27th day of September, 2007 among Berliner
Communications, Inc., a Delaware corporation (the “Company”),
and
each of the undersigned holders (each, a “Noteholder,”
and
collectively, the “Noteholders”)
of the
Company’s 7% Senior Subordinated Secured Convertible Notes Due 2008 (each, a
“Note”
and
collectively, the “Notes”).
WHEREAS,
the
Company and Sigma Opportunity Fund, LLC (“Sigma”)
are
parties to that certain Note Purchase Agreement, dated as of December 29, 2006
(the “Note
Purchase Agreement”)
pursuant to which the Company sold and Sigma purchased a Note in the original
principal amount of $3.0 million (the “Sigma
Note”)
and
issued to Sigma a warrant to purchase up to 1.5 million shares of the Company’s
common stock (the “Sigma
Warrant”);
WHEREAS,
the
Company entered into a Joinder Agreement with Pacific Asset Partners
(“Pacific”)
and
Operis Partners I LLC (“Operis”),
dated
as of February 2, 2007, pursuant to which (i) the Company sold and Pacific
purchased a Note in the original principal amount of $1.0 million (the
“Pacific
Note”),
(ii)
the Company issued to Pacific a warrant to purchase up to 500,000 shares of
our
common stock (the “Pacific
Warrant”),
(iii)
the Company sold and Operis purchased a Note in the original principal amount
of
$500,000 (the “Operis
Note”),
and
(iv) the Company issued to Operis a warrant to purchase up to 250,000 shares
of
our common stock (the “Operis
Warrant”);
WHEREAS,
the
Company entered into a Joinder Agreement with Sigma Berliner, LLC (“SBLLC”),
dated
as of February 15, 2007, pursuant to which the Company sold and SBLLC purchased
a Note in the original principal amount of $1.5 million (the “SBLLC
Note”,
and
together with the Sigma Note, the Pacific Note and the Operis Note, the
“Notes”)
and a
warrant to purchase up to 750,000 shares of the Company’s common stock (the
“SBLLC
Warrant,”
and
together with the Sigma Warrant, Pacific Warrant and Operis Warrant, the
“Warrants”);
WHEREAS,
pursuant
to the Note Purchase Agreement, to which each Noteholder is deemed to be a
party, the Company agreed to register the shares of common stock into which
the
Notes are convertible and the shares of common stock into which the Warrants
are
exercisable (collectively, the “Registrable
Shares”)
on a
registration statement (the “Registration Statement”) filed with the Securities
and Exchange Commission (the “SEC”);
WHEREAS,
pursuant
to Section 8(a)(3) of the Note Purchase Agreement, the Company has become liable
to pay liquidated damages to each Noteholder (the “Liquidated
Damages”)
because the Registration Statement was not declared effective by the Securities
and Exchange Commission prior to the Required Effective Date (as such term
is
defined in the Note Purchase Agreement);
WHEREAS,
the
Noteholders have agreed to make certain amendments and waivers as consideration
for a reduction in the Conversion Price (as such term is defined in each of
the
Notes) of the Notes.
NOW,
THEREFORE,
the
parties hereto consent and agree as follows:
1. Amendment
of Notes.
In
Section 6.1 of each of the Sigma Note, Pacific Note, Operis Note and SBLLC
Note,
the defined term “Conversion Price” is hereby amended to read in its entirety as
follows: “Conversion Price” means $1.00, subject to adjustment as provided in
Section 5.3.
2. Amendment
of Note Purchase Agreement.
(a) In
Section 1(c) of the Note Purchase Agreement, the defined term “Registration
Event” is hereby deleted in its entirety and shall no longer have any force
and/or effect, including, any references to this term throughout the Note
Purchase Agreement, wherever it may appear.
(b) Section
8(a), subsection (1) of the Note Purchase Agreement is hereby amended and
restated in its entirety to read as follows: (a) Obligation to Register Shares.
“The Company shall use its best efforts to prepare and, as expeditiously as
possible, file with the SEC a Registration Statement which covers the resale
by
the Buyers of (A) a number of shares of Common Stock equal to the maximum number
of Conversion Shares issuable upon conversion of the Notes, and (B) a number
of
shares of Common Stock equal to the number of Warrant Shares issuable upon
exercise of the Warrants and the Additional Warrants, in each such case as
Registrable Securities, and which Registration Statement shall state that,
in
accordance with Rule 416 under the 1933 Act, the Registration Statement also
covers such indeterminate number of additional shares of Common Stock as may
become issuable upon conversion of the Notes or exercise of the Warrants and
the
Additional Warrants to prevent dilution resulting from stock splits, stock
dividends or similar transactions.”;
(c) Section
8(a), subsection (2) of the Note Purchase Agreement is hereby amended and
restated in its entirety to read as follows: Prior to the effectiveness of
a
Registration Statement, and during any time subsequent to the effectiveness
of
any Registration Statement filed in connection with Section 8(a) hereof when
such Registration Statement for any reason is not available for use by any
Investor for the resale of any Registrable Securities, the Company shall not
file any other registration statement or any amendment thereto with the SEC
under the 1933 Act or request the acceleration of the effectiveness of any
other
registration statement (except for Registration Statements filed in connection
with Section 8(a) hereof) previously filed with the SEC other than (A) any
registration statement on Form S-8 and (B) any registration statement or
amendment which the Company is required to file, or as to which the Company
is
required to request acceleration, pursuant to any obligation in effect on the
date of execution and delivery of this Agreement.
(d) Section
8(a), subsection (3) of the Note Purchase Agreement is hereby deleted in its
entirety and shall have no further force and/or effect.
(e) In
Section 8(e) of the Note Purchase Agreement:
(i) The
first
sentence shall be amended to include at the beginning of the sentence: “Except
for registrations of securities under Section 8(a) hereof,”;
(ii) A
new
last sentence shall be added to read: “The Investors acknowledge that their
piggyback registration rights under this Section 8(e) may be limited by the
amount of Registrable Shares previously registered under Section 8(a), and
this
limitation shall not constitute a breach of this Agreement.”
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3. Agreement
Regarding Best Efforts.
The
parties hereby agree and acknowledge that “best efforts” as such term is used in
Section 8 the Note Purchase Agreement with respect to registration of the
Registrable Shares shall mean the Company shall register in one or more
Registration Statements as soon as practicable (which, with respect to the
initial Registration Statement, shall mean promptly after the Company’s filing
of a Definitive Proxy Statement on Schedule 14A with the SEC for the Company’s
2007 Annual Meeting to be filed on or about October 29, 2007 substantially
the
maximum number of shares that may at any time be registered (which, for the
purposes of the initial Registration Statement shall be approximately 1,222,632
shares) on the form of Registration Statement (a) available to the Company
at
the time such Registration Statement is filed, (b) under which an “at the
market” offering may be made on a delayed or continuous basis under Rule 415 of
the Securities Act of 1933, as amended, and (c) shall not be considered or
deemed to be a primary offering of securities by the Securities and Exchange
Commission. This shall be a continuing obligation on the part of the Company
for
so long as the Company has registration rights obligations pursuant to the
Note
Purchase Agreement. The Company shall file such amendments to the Registration
Statement(s) as are necessary or desirable to comply with this Section 3 and
Section 8 of the Note Purchase Agreement, as amended.
4. Waiver.
In
consideration for the amendment provided for in Section 1 above, the undersigned
Noteholders hereby permanently, irrevocably and unconditionally waive in full,
now and forever, the application of Section 8(a) of the Note Purchase Agreement,
and hereby permanently, irrevocably and unconditionally waive in full, now
and
forever, any right of such Noteholder to the payment of the Liquidated Damages,
whether accrued or accruing, under Section 8(a) of the Note Purchase Agreement
and release the Company from Section 8(a) prior to the date hereof.
5. Affect
of Amendment.
To the
extent any provision of the Note Purchase Agreement, the Notes and the Warrants
require further amendment or interpretation in order to effect and implement
the
intentions of this Agreement, the parties hereto agree that such amendments
shall be deemed to have been made upon execution hereof.
6. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument. This Agreement may be executed via facsimile, which shall be deemed
an original.
7. Severability.
If any
provision of this Agreement shall be declared void or unenforceable by any
judicial or administrative authority, the validity or enforceability of any
other provision and of the entire Agreement shall not be affected.
8. Enforceability.
Upon
execution of this Agreement by the undersigned Noteholders, the validity of
any
waiver, consent or amendment made hereunder shall be unaffected by the failure
of any one or more Noteholders of the Company to execute this
Agreement.
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9. Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of Delaware.
10. Further
Assurances.
Following the date hereof, each party shall execute, deliver, acknowledge and
file, or shall cause to be executed, acknowledged, delivered and filed, all
such
further instruments, certificates and other documents and shall take, or cause
to be taken, such other actions as may reasonably be requested by any other
party in order to carry out the provisions of this Agreement.
11. Confidentiality.
Each
undersigned Noteholder hereby agrees, except as required by law, to hold in
confidence this Agreement, all of the terms thereof and all of the transactions
contemplated thereby and hereby until such time as the material terms thereof
and hereof are publicly disclosed by the Company (which the Company agrees
to do
in compliance with applicable law).
[Signature
page follows]
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IN
WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the date first above
written.
COMPANY: | ||
BERLINER
COMMUNICATIONS, INC.,
a
Delaware corporation
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By: | /s/ Xxxx Xxxxxxxx | |
Name: Xxxx Xxxxxxxx |
||
Title: Chief Executive Officer |
Signature
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NOTEHOLDERS: | ||
SIGMA
OPPORTUNITY FUND, LLC
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By: | SIGMA CAPITAL ADVISORS, LLC | |
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By: | /s/ Xxxx Xxxx | |
Name: Xxxx Xxxx |
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Title: Manager |
PACIFIC
ASSET PARTNERS,
a
California limited partnership
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By: | /s/ Xxxxxx X. Xxxxxxxx | |
Name: Xxxxxx X. Xxxxxxxx |
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Title: General Partner |
OPERIS
PARTNERS I LLC,
a
Delaware limited liability
company
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By: | /s/ Xxxx Xxxxxx | |
Name: Liore Avneri |
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Title: __________ |
SIGMA
BERLINER, LLC,
a
Delaware limited liability
company
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By: | /s/ Xxxx Xxxx | |
Name: Xxxx Xxxx |
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Title: Manager |
Signature
Page to Waiver Agreement