Attached files
NOTICE
IS HEREBY GIVEN THAT THIS AGREEMENT CONTAINS INDEMNIFICATION PROVISIONS IN
SECTION 6 THAT APPLY TO CLAIMS, LIABILITIES, LOSSES, DAMAGES OR EXPENSES THAT
HAVE RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR PASSIVE OR
THE SOLE, JOINT OR CONCURRENT ORDINARY NEGLIGENCE OF HM CAPITAL PARTNERS I LP OR
ANY OTHER INDEMNIFIED PERSON IDENTIFIED THEREIN.
AMENDED
AND RESTATED
MONITORING
AND OVERSIGHT AGREEMENT
This
AMENDED AND RESTATED MONITORING AND OVERSIGHT AGREEMENT (this “Agreement”) is made
and entered into effective as of January 27, 2010 (the “Effective Date”), by
and among Berliner Communications, Inc., a Delaware corporation (together with
its successors, “Berliner”), BCI
Communications, Inc., a Delaware corporation and wholly-owned subsidiary of
Berliner (together with its successors, “BCI”), Unitek USA,
LLC, a Delaware limited liability company (together with its successors, the
“Company”),
Unitek Holdings, Inc., a Delaware corporation (together with its successors,
“Holdings”),
Unitek Midco, Inc., a Delaware corporation (together with its successors, “Midco”), and Unitek
Acquisition, Inc., a Delaware corporation (together with its successors, “Acquisition” and
together with Berliner, BCI, the Company, Holdings and Midco, the “Clients”), and HM
Capital Partners I LP, a Delaware limited partnership (together with its
successors, “HM LP”).
WHEREAS,
the Company, Holdings, Midco, Acquisition and HM LP previously entered into that
certain Monitoring and Oversight Agreement, dated as of September 27, 2007 (the
“Original
Agreement”);
WHEREAS,
Holdings has entered into an Agreement and Plan of Merger, dated as of the date
hereof (the “Merger
Agreement”), by and among Holdings, Berliner, BCI East, Inc. (“Merger Sub”) and the
other parties signatory thereto, pursuant to which Merger Sub will merge with
and into Holdings (the “Merger”);
WHEREAS,
in connection with the Merger, the parties hereto desire to amend and restate
the Original Agreement by adding each of Berliner and BCI as a party, and as
otherwise set forth herein; and
WHEREAS,
the Clients have requested that HM LP render, and HM LP has rendered and agrees
to continue to render, financial oversight and monitoring services to the
Clients as requested from time to time by the board of directors of
Berliner.
NOW,
THEREFORE, in consideration of the services rendered and to be rendered by HM LP
to the Clients, and to evidence the obligations of the Clients to HM LP and the
mutual covenants herein contained, the Clients hereby jointly and severally
agree with HM LP as follows:
1. Retention. The
Clients hereby acknowledge that they have retained HM LP to, and HM LP
acknowledges that, subject to reasonable advance notice in order to accommodate
scheduling, HM LP will, provide financial oversight and monitoring
services to the Clients as requested by the board of directors of Berliner
during the term of this Agreement.
2. Term. The
term of this Agreement (the “Term”) shall continue
until the earlier to occur of (i) September 27, 2017 or (ii) a buyout
of this Agreement pursuant to and in accordance with Section 5
below.
3. Compensation.
(a) As
compensation for HM LP’s services to the Clients under this Agreement, the
Clients hereby irrevocably agree, jointly and severally, to pay to HM LP an
annual fee of US $720,000 for calendar year 2010, US $730,000 for calendar year
2011, and US $754,000 for calendar year 2012 and for each calendar year
thereafter during the Term (in each case, the “Monitoring Fee”),
prorated on a daily basis for any partial calendar year during the
Term. The Monitoring Fee shall be payable in equal quarterly
installments on March 31, June 30, September 30 and December 31; provided, however, that each
such payment shall not be paid unless the Total Leverage Ratio (as such term is
defined in that certain First Lien Credit Agreement, dated as of
September 27, 2007 (the “Unitek Credit
Agreement”), by and among Acquisition, Midco, the guarantors listed on
the signature pages thereof, certain financial institutions and other lender
parties listed on the signature pages thereof, and Royal Bank of Canada, as
amended, refinanced or replaced from time to time) is below 3.50:1.00 at the end
of the applicable quarter, and if not so paid, each such payment shall accrue
until the Total Leverage Ratio is below 3.50:1.00 at any subsequent quarter, at
which such time all accrued and unpaid payments shall become due and payable;
provided, further, that, to the
extent any amounts payable pursuant to this Section 3(a) are
not permitted under the Unitek Credit Agreement, such amounts shall continue to
accrue until the earlier of (i) the time at which such amounts are
permitted to be paid under the Unitek Credit Agreement (ii) the termination
of the Unitek Credit Agreement in accordance with its terms, at which such time
such amounts shall become due and payable. Each payment required
herein shall be made within five business days of the day on which such payment
becomes due and payable by wire transfer of immediately available funds to the
account described on Exhibit A hereto
(or such other account as HM LP may hereafter designate in
writing).
(b) All
past due payments (excluding any payments accrued pursuant to Section 3(a) above
that are paid when due in accordance with such Section 3(a)) in
respect of the Monitoring Fee shall bear interest at the lesser of the highest
rate of interest which may be charged under applicable law or the prime
commercial lending rate per annum of JPMorgan Chase Bank or its successors
(which rate is a reference rate and is not necessarily its lowest or best rate
of interest actually charged to any customer) (the “Prime Rate”) as in
effect from time to time, plus 5.0%, from the due date of such payment to and
including the date on which payment is made to HM LP in full, including such
interest accrued thereon.
4. Reimbursement of
Expenses. In addition to the compensation to be paid pursuant
to Section 3 above,
the Clients agree, jointly and severally, to pay or reimburse HM LP for all
“Reimbursable
Expenses,” which shall consist of (i) all reasonable
disbursements and out-of-pocket expenses (including, without limitation, costs
of travel, postage, deliveries, communications, etc.) incurred by HM LP or its
affiliates for the account of any Client or in connection with the performance
by HM LP of the services contemplated by Section 1 above
and (ii) the Clients’ Pro Rata Share of Allocable Expenditures (as defined
in Exhibit B
hereto). Promptly (but not more than ten days) after request by or
notice from HM LP, the applicable Client shall pay HM LP, by wire transfer of
immediately available funds to the account described on Exhibit A hereto
(or such other account as HM LP may hereafter designate in writing), the
Reimbursable Expenses for which HM LP has provided such Client invoices or
reasonably detailed descriptions. All past due payments in respect of
the Reimbursable Expenses shall bear interest at the lesser of the highest rate
of interest which may be charged under applicable law or the Prime Rate as in
effect from time to time, plus 5.0% from the applicable due date for such
Reimbursable Expenses to and including the date on which such Reimbursable
Expenses plus accrued interest thereon are fully paid to HM LP.
- 2
-
5. Buyout
Obligation. Berliner hereby agrees to buy out this Agreement
for the Buyout Amount in cash upon the first to occur of the following
events:
(a) any
sale or distribution by Berliner or any of its subsidiaries to the public of its
capital stock and in connection therewith the capital stock of Berliner or such
subsidiary is listed on an established stock exchange or a national market
system;
(b) any
consolidation, amalgamation or merger of Berliner with or into any other entity,
or any other corporate reorganization, business combination, transaction or
transfer of securities of Berliner by any of its stockholders, or a series of
transactions (including the acquisition of capital stock of Berliner), whether
or not Berliner is a party thereto, in which (i) the stockholders of
Berliner immediately prior to such consolidation, amalgamation, merger,
reorganization, business combination, transaction or transfer of securities,
collectively have beneficial ownership (as such term is defined in Rule 13d-3 of
the Securities Exchange Act of 1934, as amended), directly or indirectly, of
capital stock representing directly, or indirectly through one or more entities,
less than 50% of the equity (measured by economic value or voting power by
contract, share ownership or otherwise) of Berliner or other surviving entity
immediately after such consolidation, amalgamation, merger, reorganization,
business combination, transaction or transfer of securities, or (ii) HM
Capital Partners LLC and any company controlled thereby (or any fund or
management company affiliated with HM Capital Partners LLC) collectively have
beneficial ownership (as such term is defined in Rule 13d-3 of the Securities
Exchange Act of 1934, as amended), directly or indirectly, of capital stock
representing directly, or indirectly through one or more entities, less than 25%
of the equity (measured by economic value or voting power by contract, share
ownership or otherwise) of Berliner or other surviving entity immediately after
such consolidation, amalgamation, merger, reorganization, business combination,
transaction or transfer of securities;
(c) any
sale, license, transfer or other disposition of all or substantially all of the
assets (tangible or intangible) of Berliner (including the assets or equity of
any subsidiaries of Berliner); or
- 3
-
(d) the
approval of a majority of the members of the Special Committee (as such term is
defined in the Merger Agreement) for Berliner to do so.
The
“Buyout Amount”
shall mean the net present value of all Monitoring Fees for periods following
the buyout contemplated by this Section 5
through September 27, 2017, discounted at 10% per annum, plus all accrued but
unpaid Monitoring Fees from periods prior to the buyout contemplated by this
Section 5. For
purposes of clarity, an example of the calculation of the Buyout Amount is set
forth on Exhibit C
hereto. The Buyout Amount shall be paid within five business days of
the occurrence of the applicable event listed above by wire transfer of
immediately available funds to the account described on Exhibit A hereto
(or such other account as HM LP may hereafter designate in writing). within five
business days of the day on which such payment becomes due and
payable
6. Indemnification. The
Clients jointly and severally shall indemnify and hold harmless each of HM LP,
its affiliates, and their respective directors, officers, controlling persons
(within the meaning of Section 15 of the Securities Act of 1933, as amended, or
Section 20(a) of the Securities Exchange Act of 1934, as amended), if any,
agents and employees (HM LP, its affiliates and such other specified persons
being collectively referred to as “Indemnified Persons”
and individually as an “Indemnified Person”)
from and against any and all claims, liabilities, losses, damages and expenses
incurred by any Indemnified Person (including, without limitation, those arising
out of an Indemnified Person’s negligence and reasonable fees and disbursements
of the respective Indemnified Person’s counsel) which (A) are related to or
arise out of (i) actions taken or omitted to be taken (including, without
limitation, any untrue statements made or any statements omitted to be made) by
any of the Clients or (ii) actions taken or omitted to be taken by an
Indemnified Person with any Client’s consent or in conformity with any Client’s
instructions or any Client’s actions or omissions or (B) are otherwise
related to or arise out of HM LP’s engagement, and will reimburse each
Indemnified Person for all costs and expenses, including, without limitation,
fees and disbursements of any Indemnified Person’s counsel, as they are
incurred, in connection with investigating, preparing for, defending or
appealing any action, formal or informal claim, investigation, inquiry or other
proceeding, whether or not in connection with pending or threatened litigation,
caused by or arising out of or in connection with HM LP’s acting pursuant to HM
LP’s engagement, whether or not any Indemnified Person is named as a party
thereto and whether or not any liability results therefrom. None of
the Clients will, however, be responsible to any Indemnified Person for any
claims, liabilities, losses, damages or expenses pursuant to clause (B) of the
preceding sentence that have resulted primarily from such Indemnified Person’s
bad faith, gross negligence or willful misconduct. The Clients also
agree that neither HM LP nor any other Indemnified Person shall have any
liability to any Client for or in connection with such engagement except for any
such liability for claims, liabilities, losses, damages or expenses incurred by
any Client that have resulted primarily from such Indemnified Person’s bad
faith, gross negligence or willful misconduct. The Clients further
agree that none of them will, without the prior written consent of HM LP, settle
or compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding in respect of which indemnification
may be sought hereunder (whether or not any Indemnified Person is an
actual or
potential party to such claim, action, suit or proceeding) unless such
settlement, compromise or consent includes an unconditional release of HM LP and
each other Indemnified Person hereunder from all liability arising out of such
claim, action, suit or proceeding. EACH CLIENT HEREBY ACKNOWLEDGES THAT
THE FOREGOING INDEMNITY SHALL BE APPLICABLE TO ALL CLAIMS, LIABILITIES, LOSSES,
DAMAGES OR EXPENSES THAT HAVE RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED FROM
THE ACTIVE OR PASSIVE OR THE SOLE, JOINT OR CONCURRENT ORDINARY NEGLIGENCE OF HM
LP OR ANY OTHER INDEMNIFIED PERSON.
- 4
-
The
foregoing right to indemnity shall be in addition to any rights that HM LP
and/or any other Indemnified Person may have at common law or otherwise and
shall remain in full force and effect following the completion or any
termination of the engagement. Each Client hereby
consents to personal jurisdiction and to service and venue in any court in which
any claim that is subject to this Agreement is brought against HM LP or any
other Indemnified Person.
It is
understood that, in connection with HM LP’s engagement, HM LP may also be
engaged to act for a Client or Clients in one or more additional capacities, and
that the terms of this engagement or any such additional engagement(s) may be
embodied in one or more separate written agreements. This
indemnification shall apply to the engagement specified in the first paragraph
hereof as well as to any such additional engagement(s) (whether written or oral)
and any modification of said engagement or such additional engagement(s) and
shall remain in full force and effect following the completion or termination of
said engagement or such additional engagement(s).
Each of
the Clients further understands and agrees that if HM LP is asked to furnish any
Client a financial opinion letter or act for any Client in any other formal
capacity, such further action shall be at the option of HM LP and may be subject
to a separate agreement containing provisions and terms to be mutually agreed
upon.
7. Confidential
Information. In connection with the performance of the
services hereunder, HM LP agrees not to divulge any confidential information,
secret processes or trade secrets disclosed by any Client or any of its
subsidiaries to it solely in its capacity as a financial advisor, unless such
Client consents to the divulging thereof or such information, secret processes
or trade secrets are publicly available or otherwise available to HM LP without
restriction or breach of any confidentiality agreement or unless required by any
governmental authority or in response to any valid legal process.
8. Governing
Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of Texas, excluding any
choice-of-law provisions thereof. Each of the parties hereby (i)
irrevocably submits to the exclusive jurisdiction of the United States Federal
District Court for the Northern District of Texas, sitting in Dallas County,
Texas, the United States of America, in the event such court has jurisdiction
or, if such court does not have jurisdiction, to any district court sitting in
Dallas County, Texas, the United States of America, for the purpose of any suit,
action, or proceeding arising out of or relating to this Agreement, including
any claims by any
Indemnified Persons for indemnity pursuant to Section 6 above, (ii)
waives, and agrees not to assert in any such suit, action or proceeding, any
claim that (x) it is not personally subject to the jurisdiction of such court or
of any other court to which proceedings in such court may be appealed, (y) such
suit, action or proceeding is brought in an inconvenient forum, or (z) the venue
of such suit, action or proceeding is improper and (iii) expressly waives any
requirement for the posting of a bond by the party bringing such suit, action or
proceeding. Each of the parties consents to process being served in
any such suit, action or proceeding by mailing, certified mail, return receipt
requested, a copy thereof to such party at the address in effect for notices
hereunder, and agrees that such services shall constitute good and sufficient
service of process and notice thereof. Nothing in this Section 8 shall
affect or limit any right to serve process in any other manner permitted by
law.
- 5
-
9. Assignment. This
Agreement and all provisions contained herein shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns; provided, however, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned (other than with respect to the rights, interests and obligations of HM
LP, which may be assigned to any one or more of its principals or affiliates) by
any of the parties without the prior written consent of the other
parties.
10. 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, and the signature of any party to any counterpart shall be deemed a
signature to, and may be appended to, any other counterpart.
11. Other
Understandings. All discussions, understandings and agreements
heretofore made between any of the parties hereto with respect to the subject
matter hereof are merged in this Agreement, which alone fully and completely
expresses the agreement of the parties hereto. All calculations of
the Monitoring Fee, Reimbursable Expenses and the Buyout Amount shall be made by
HM LP and, in the absence of mathematical error, shall be final and conclusive,
and all calculations of the Total Leverage Ratio shall be as reported by the
borrowers under and pursuant to the Unitek Credit Agreement and, in the absence
of mathematical error, shall be final and conclusive.
12. Compensation of Certain
Berliner Board Members. Berliner covenants that during the
Term, notwithstanding anything contained in its certificate of incorporation,
bylaws or other organizational documents, or otherwise, no member of Berliner’s
board of directors who is appointed by and who is an employee or partner of HM
Capital Partners LLC or any company controlled thereby (or any fund or
management company affiliated with HM Capital Partners LLC) shall be paid
compensation for serving as a director of Berliner.
[The
Remainder of This Page Is Intentionally Left Blank.]
- 6
-
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
HM
CAPITAL PARTNERS I LP
By: HMCP
GP LLC,
its
General Partner
By:
/s/ David W. Knickel
David W.
Knickel
Vice
President Chief Financial Officer and
Secretary
BERLINER
COMMUNICATIONS, INC.
By:
/s/ Rich Berliner
Name:
Rich Berliner
Title:
President
BCI
EAST, INC.
By:
/s/ Nicholas Day
Name:
Nicholas Day
Title:
Secretary
UNITEK
USA, LLC
By:
/s/ C. Scott Hisey
C. Scott
Hisey
Chief
Executive Officer
UNITEK
HOLDINGS, INC.
By:
/s/ David W. Knickel
David W.
Knickel
Vice
President and Secretary
Signature
Page to
Amended
and Restated Monitoring and Oversight Agreement
UNITEK
MIDCO, INC.
By:
/s/ David W. Knickel
David W.
Knickel
Vice
President and Secretary
UNITEK
ACQUISITION, INC.
By:
/s/ David W. Knickel
David W.
Knickel
Vice
President and Secretary
Signature
Page to
Amended
and Restated Monitoring and Oversight Agreement
EXHIBIT
B
Pro Rata Share of Allocable
Expenditures and Related Definitions
“Pro Rata Share of Allocable
Expenditures” shall equal the product obtained by multiplying
(i) the sum of all Allocable Expenditures that have not previously been
paid or reimbursed to HM LP by the Clients and other Participating Acquired
Companies, by (ii) a fraction, the numerator of which shall equal the total
amount of Invested Capital (as from time to time outstanding) that any Fund has
invested in the Clients’ respective securities or instruments and the
denominator of which shall equal the total amount of Invested Capital (as from
time to time outstanding) that any Fund has invested in the securities or
instruments of any and all Participating Acquired Companies.
The
capitalized terms used in the foregoing definition have the meanings set forth
below:
“Allocable
Expenditures” shall mean all variable, fixed, and other costs, expenses,
expenditures, charges or obligations (including, without limitation, letters of
credit, deposits, etc.) that are related to assets utilized, services provided,
or programs administered by HM LP or its affiliates in connection with the
performance by HM LP of financial oversight and monitoring services on behalf of
the Clients and other Participating Acquired Companies, including, without
limitation, corporate airplanes, charitable contributions, retainers for
lobbyists and other professionals, and premiums and finance charges for director
and officer insurance maintained for representatives of HM LP or its
affiliates.
“Fund” shall mean any
one or more of the equity funds now or hereafter sponsored by HM Capital
Partners LLC, or its successors or affiliates, formed under or with respect to
any such equity fund.
“Invested Capital”
shall mean the total amount of partner capital that a Fund from time to time
invests in the purchase of securities or instruments of a Participating Acquired
Company, less the total cash distributions that constitute a return of such
partner capital with proceeds from the disposition of all or any part of such
securities or instruments. For each period for which the Pro Rata
Share of Allocable Expenditures is being made, the applicable Invested Capital
shall equal the amount outstanding as of the end of the respective
period.
“Participating Acquired
Company” shall mean any partnership, corporation, trust, limited
liability company, or other entity that is, for the period for which the Pro
Rata Share of Allocable Expenditures is being determined, a party to a
monitoring agreement or similar contract with HM LP or its affiliates and is, as
of the end of such period, designated by HM LP to bear a portion of such
allocable expenditures. HM LP may, in its sole and absolute
discretion, determine not to designate an entity as a Participating Acquired
Company with respect to such period. HM LP may make such
determination of non-designation for no reason or for any reason, including,
without limitation, the respective entity’s bankruptcy or other temporary or
permanent inability to pay fees or expenses to HM LP or its
affiliates.
B-1
EXHIBIT
C
Example Calculation of
Buyout Amount
|
Buyout on 12/31/2011
(Amounts in Thousands)
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017 | 1 | |||||||||||||||||||||||
|
Payments
Already Earned but Not Paid
|
$ | 720 | $ | 730 | ||||||||||||||||||||||||||||
|
Future
Payments
|
$ | 754 | $ | 754 | $ | 754 | $ | 754 | $ | 754 | $ | 558 | ||||||||||||||||||||
|
Years
to Discount Back (mid-year convention)
|
0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5.2 | ||||||||||||||||||||||||||
|
PV
@ 10%
|
$ | 719 | $ | 654 | $ | 594 | $ | 540 | $ | 491 | $ | 338 | ||||||||||||||||||||
|
Buyout
Amount on 12/31/2011
|
$ | 4,786 | ||||||||||||||||||||||||||||||
1 The
amounts in this column are pro-rated through September 27, 2017.
C-1