WAIVER AND AMENDMENT NO. 5 TO NOTE, dated as of January 25, 2010 (this “Amendment”)
Exhibit
10.1
WAIVER AND AMENDMENT NO. 5 TO
NOTE, dated as of January 25, 2010 (this “Amendment”)
BY
AND AMONG
|
(1)
|
BRANDPARTNERS GROUP,
INC., a Delaware corporation (“BPG”);
|
|
(2)
|
BRANDPARTNERS RETAIL,
INC., a New Hampshire
corporation (formerly known as ▇▇▇▇▇▇ Brothers, Inc.) (“BPR”);
|
|
(3)
|
GRAFICO INCORPORATED, a
Delaware corporation and wholly-owned subsidiary of BPG (“Grafico”, and together
with BPG and BPR, collectively, the “Companies”);
and
|
|
(4)
|
CORPORATE MEZZANINE II,
L.P., a British Virgin Islands limited partnership (“CMII”).
|
WHEREAS, BPG, BPR, and CMII
are parties to a certain Subordinated Note and Warrant Purchase Agreement of
October 22, 2001, as amended by Amendment No. 1 and Waiver dated as of
May 14, 2002, Amendment No. 2 and Waiver dated as of August 9,
2002, Amendment No. 3 and Waiver dated as of January 7, 2004, Amendment No. 4,
dated as of May 5, 2005, Amendment No. 5 and Waiver, dated as of March 28, 2007
and Amendment No. 6, dated as of March 27, 2008 (the “Purchase Agreement”), pursuant
to which BPR has issued and sold to CMII a subordinated promissory note in the
original principal amount of $5,000,000 with a final maturity of October 29,
2010 (as amended by Amendment No. 1, dated as of January 7, 2004, Amendment No.
2, dated as of March 27, 2008, Amendment No. 3, dated as of March 31, 2009 and
Waiver and Amendment No. 4, dated as of November 17, 2009, the “Original Note” and as amended
hereby, the “Note”) and
BPG has issued and sold to CMII certain warrants for the purchase of an
aggregate of 665,000 shares of common stock of BPG;
WHEREAS, the Companies have
notified CMII that an Event of Default has occurred and continues to exist under
the Purchase Agreement as a result of the failure by BPR to make the December
31, 2009 interest payment on the Original Note (the “Subject Event of
Default”);
WHEREAS, the Companies have
asked CMII to waive the Subject Event of Default and to defer payment of the
December 31, 2009 and January 15, 2010 interest payments on the Original Note to
March 15, 2010; and
WHEREAS, subject to the
satisfaction of the conditions set forth in Section 5, CMII is
willing to waive the Subject Event of Default and to defer payment of the
December 31, 2009 and January 15, 2010 interest payments on the Original Note to
March 15, 2010.
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
(1) Definitions. Capitalized
terms used in this Amendment shall have the meanings given them in the Purchase
Agreement unless otherwise defined herein.
(2) Affirmation of Transaction
Documents. Each Company acknowledges that each of the Purchase
Agreement, the Original Note and each Warrant is a valid and binding obligation
of the Companies, in the case of the Purchase Agreement, of BPG, in the case of
the Warrant, and of BPR, in the case of the Original Note, enforceable against
the Companies, BPG or BPR, as the case may be, in accordance with their
respective terms.
(3) Waiver. Effective
as of the Effective Date (as hereinafter defined) and subject to the conditions
to effectiveness set forth in Section 5 hereof,
CMII hereby waives the Subject Event of Default. Anything herein to
the contrary notwithstanding, (i) CMII's waiver only applies to the specific
provisions noted above and (ii) BPR is required to comply with Section 2 of the
Original Note, other than as waived by this Amendment, at all times in the
future.
1
(4) Amendment to Original
Note. Effective as of the Effective Date (as hereinafter
defined) and subject to the conditions to effectiveness set forth in Section 5 hereof, the
Original Note is hereby amended as follows:
|
|
(a)
|
Section 2(a) of
the Original Note is amended by amending and restating the last sentence
thereof in its entirety as follows: “Notwithstanding anything contained in
the foregoing portions of this Section 2(a),
effective as of September 30, 2009, interest that shall have accrued on
the Accreted Principal Amount of this Note shall be payable at the rate of
18% per annum, of which 12% per annum shall be paid in cash on each
Interest Payment Date and of which 6% per annum shall be paid on each
Interest Payment Date by addition of such accrued and unpaid interest to
the principal outstanding under this Note and shall constitute a ‘PIK
Amount’ and shall be included in determining the Accreted Principal Amount
of this Note for all purposes; provided, that
the interest payable on the December 31, 2009 Interest Payment Date and
the interest payable on January 15, 2010 shall be paid in the manner
provided in this sentence on March 15, 2010 (together with
interest on the 12% cash pay portion thereof at the rate of eighteen
(18.0%) per annum)”.
|
|
(b)
|
BPR
hereby authorizes CMII to attach this Amendment as an allonge to the
Original Note, and this Amendment shall be attached as Exhibit 5 to
the Original Note.
|
|
(5)
|
Conditions. The
waiver contained in Section 3
hereof and the amendment contained in Section 4
hereof shall become effective upon the satisfaction in full of the
following conditions on the date (the “Effective Date”), on or
prior to January 25, 2010, on
which:
|
|
|
(a)
|
CMII
shall have executed and delivered a counterpart of this Amendment and CMII
shall have received a counterpart of this Amendment executed and delivered
by each Company;
|
|
|
(b)
|
TD
Bank, N.A. shall have consented in writing to the amendment contained in
Section 4
hereof and CMII shall have received a counterpart of such consent
substantially in the form of Exhibit
1.
|
(6) Reimbursement of
Expenses. BPR will pay all out-of-pocket expenses, costs and
charges incurred by CMII (including reasonable fees and disbursements of
counsel) in connection with the preparation and implementation of this
Amendment, and all documents executed in connection herewith.
(7) Purchase Agreement and
Original Note to Remain in Force. Except as specifically
provided herein, the Purchase Agreement, the Original Note and the other
Transaction Documents shall remain in full force and effect and are in all
respects hereby ratified and affirmed. From and after the Effective
Date, all references in the Note to “this Note”, “hereof” or “herein” or the
like, and all references in the other Transaction Documents to the Note, shall
mean and refer to the Original Note as amended hereby.
(8) Successors and
Assigns. The Agreement shall inure to the benefit of and be
binding upon the parties hereto and their successors and assigns.
(9) Counterparts. This
Amendment may be executed in counterparts, each of which shall constitute an
original and all of which, taken together, shall constitute one and the same
agreement.
(10) Headings. The
headings in this Amendment are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.
(11) No Implied
Waivers. No failure or delay on the part of CMII in exercising
any power or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power preclude any other or
further exercise thereof or the exercise of any other right or power hereunder
or under the Purchase Agreement or the Note. No modification or
waiver of any provisions of this Amendment shall in any event be effective
unless the same shall be in writing and signed by CMII, and then such
modification, waiver or consent shall be effective only in the specific instance
and for the purpose for which given.
2
(12) Governing
Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York, without regard to
principles of conflicts of law other than Section 5-1401 of the General
Obligations Law of the State of New York.
(13) Jurisdiction; WAIVER OF RIGHT TO JURY
TRIAL. Each party to this Amendment hereby irrevocably agrees
that any legal action or proceeding arising out of or relating to this Amendment
or any agreements or transactions contemplated hereby may be brought in the
courts of the State of New York located in New York City or of the United
States of America for the Southern District of New York and hereby
expressly submits to the personal jurisdiction and venue of such courts for the
purposes thereof and expressly waives any claim of improper venue and any claim
that such courts are an inconvenient forum. TO THE EXTENT NOT PROHIBITED BY
APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH PARTY HEREBY WAIVES, AND COVENANTS
THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY
RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND,
ACTION, OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS WAVER OR THE
SUBJECT MATTER HEREOF. EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT
THIS AMENDMENT IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP,
THAT EACH HAS ALREADY RELIED ON THIS AMENDMENT IN ENTERING INTO THIS
TRANSACTION, AND THAT EACH WILL CONTINUE TO RELY ON THIS AMENDMENT IN ITS
RELATED FUTURE DEALINGS.
(14) Severability. In
the event that any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
(15) Limited
Waiver. The waiver of the Subject Event of Default is subject
to the satisfaction of the conditions set forth in Section 5, is
applicable only to the specific violation described as the “Subject Event of
Default” and to no other Events of Default, known or unknown, nor to any other
failure of any Company to comply with any term or provisions of any Transaction
Document, and the granting by CMII of the waiver of the Subject Events of
Default does not imply any agreement to provide any subsequent waiver of any
Default or Event of Default
(16) Reaffirmation of Subsidiary
Guarantee. Grafico reaffirms its obligations to CMII
pursuant to the terms of the Subsidiary Guarantee, dated as of May 5, 2005,
and acknowledges that CMII may amend, restate, extend, renew or otherwise
modify the Purchase Agreement, the Note or the Warrants and any indebtedness or
agreement of BPR, or enter into any agreement or extend additional or other
credit accommodations to BPR, without notifying or obtaining the consent of
Grafico and without impairing the liability of Grafico under the Subsidiary
Guarantee for all of BPR's present and future indebtedness to CMII.
[signature
page follows]
3
IN
WITNESS WHEREOF, the parties have caused this Amendment to be duly executed all
as of the day and year first above written.
|
BRANDPARTNERS
GROUP, INC.
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
BRANDPARTNERS
RETAIL, INC.
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
GRAFICO
INCORPORATED
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
CORPORATE
MEZZANINE II, L.P.
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
4
EXHIBIT
1
ACKNOWLEDGMENT
AND AGREEMENT OF SENIOR LENDER
Reference
is made to (i) the foregoing Amendment No. 5 to Note, dated as of January__,
2010, among BrandPartners Group, Inc., a Delaware corporation (“BPG”), BrandPartners Retail,
Inc., a New Hampshire corporation (“BPR”), Grafico Incorporated, a
Delaware corporation (“Grafico”) and Corporate
Mezzanine II, L.P., a British Virgin Islands limited partnership (“CMII”) (the “Amendment”) and (ii) the
Subordination Agreement, dated as of May 5, 2005, among the undersigned, CMII,
BPR and Grafico (as heretofore amended, the “Subordination
Agreement”).
The
undersigned hereby (i) acknowledges receipt of the foregoing Amendment;
(ii) consents to the terms and execution thereof and to the amendment set
forth in Section
4 thereof; and (iii) reaffirms its obligations to CMII under the
Subordination Agreement.
|
TD
BANK, N.A.
|
|
By:
|
|
Name:
|
|
Its:
|
5