AMENDMENT NO. 3 TO NOTE, dated as of March [__], 2009 (this “Amendment”)
AMENDMENT NO. 3 TO NOTE, dated
as of March [__], 2009 (this “Amendment”)
BY
AND AMONG
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(1)
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BRANDPARTNERS GROUP,
INC., a Delaware corporation (“BPG”);
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(2)
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BRANDPARTNERS RETAIL,
INC., a New Hampshire
corporation (formerly known as Xxxxxx Brothers, Inc.) (“BPR”, and together with
BPG, each individually a “Company” and
collectively, the “Companies”);
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(3)
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GRAFICO INCORPORATED, a
Delaware corporation and wholly-owned subsidiary of BPG (“Grafico”);
and
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(4)
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CORPORATE MEZZANINE II,
L.P., a British Virgin Islands limited partnership (“CMII”).
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WHEREAS, the Companies and
CMII are parties to a certain Subordinated Note and Warrant Purchase Agreement
dated as 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 “Original Purchase Agreement”
and as amended hereby, the “Purchase Agreement”) pursuant
to which (i) BPR has issued and sold to CMII a subordinated promissory note (as
amended by Amendment No. 1, dated as of January 7, 2004, and Amendment No. 2,
dated as of March 27, 2008, the “Original Note” and as amended hereby,
the “Note”) in the
original principal amount of $5,000,000 with a final maturity of October 22,
2008, and (ii) BPG has issued and sold to CMII certain warrants for the
purchase of an aggregate of 665,000 shares of common stock of BPG (the “Warrants”); and
WHEREAS, the Companies,
Grafico, and TD Banknorth, N.A., a national banking association (“TD Banknorth”) are parties to a
Commercial Loan Agreement, dated as of May 5, 2005 (as the same has been or may
be amended, restated, supplemented or otherwise modified from time to time as
permitted under the Subordination Agreement, the “Senior Credit Agreement”);
and
WHEREAS, the Companies have
requested that CMII amend certain provisions of the Original Note;
and
WHEREAS, subject to the
satisfaction of the conditions set forth in Section 4, CMII is
willing to amend certain provisions of the Original Note, but only on the terms
and conditions set forth in this Amendment.
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 Original
Purchase Agreement unless otherwise defined herein.
(2) Affirmation of Original
Purchase Agreement and Original Note. Each Company
acknowledges that each of the Original Purchase Agreement, the Original Note and
each Warrant is a valid and binding obligation of the Companies, in the case of
the Original Purchase Agreement, of BPG, in the case of the Warrants, 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) Amendments to Original
Note.
Effective
as of the Effective Date and subject to the conditions to effectiveness set
forth in Section
4 hereof, the Original Note is hereby amended as follows:
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(a)
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the
first paragraph of the Original Note is amended by replacing the last
sentence thereof with the following text: “For purposes of this
Note, the term “Maturity
Date” shall mean October 29, 2010”;
and
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(b)
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Section 2(a) of
the Original Note is amended by amending the first sentence thereof as
follows: “Subject to Section 4(a)(iv) hereof, the Company promises to pay
interest on the Accreted Principal Amount (as hereinafter defined) of this
Note at the rate of sixteen percent (16.0%) per
annum.”
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(c)
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Section 4 of
the Original Note is amended by (i) renumbering clause (iv) thereof as
clause (v) and (ii) inserting the following new clause (iv) immediately
following clause (iii) thereof:
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“On or
prior to July 31, 2010, the Company shall make a mandatory prepayment in the
amount of $1,000,000. If the Company fails to make such prepayment on
or prior to July 31, 2010, then, notwithstanding anything to the contrary set
forth in Section 2(a) hereof, from and after August 1, 2010, the Accreted
Principal Amount of this Note shall bear interest at the rate of seventeen
percent (17.0%) per annum. Such interest on the Accreted Principal
Amount of this Note at the rate of thirteen percent (13.0%) per annum that shall
have accrued and shall remain unpaid as of any Interest Payment Date shall be
paid on such Interest Payment Date by wire transfer of immediately available
funds to an account at a bank designated by the Holder. Such interest
on the Accreted Principal Amount of this Note at the rate of four percent (4%)
per annum that shall have accrued and shall remain unpaid as of any Interest
Payment Date shall be payable on such Interest Payment Date by addition of a PIK
amount to the Accreted Principal Amount of this Note.”
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(d)
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BPR
hereby authorizes CMII to attach this Amendment as an allonge to the Note,
and this Amendment shall be attached as Exhibit 3 to
the Original Note.
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(4)
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Conditions. The
amendments contained in Section 3
hereof shall become effective upon the satisfaction in full of the
following conditions on the date (the “Effective Date”), on or
prior to March 31, 2009, on which:
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(a)
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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;
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2
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(b)
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CMII
shall have received a fully executed counterpart of an amendment to the
Senior Credit Agreement substantially in the form of Exhibit 1,
executed by TD Banknorth and the Companies;
and
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(c)
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TD
Banknorth shall have consented in writing to the amendments contained in
Section 3
hereof and CMII shall have received a counterpart of such consent
substantially in the form of Exhibit
2.
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(5) 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.
(6) Original Purchase Agreement
and Original Note to Remain in Force. Except as specifically
provided herein, 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.
(7) Successors and
Assigns. The Agreement shall inure to the benefit of and be
binding upon the parties hereto and their successors and assigns.
(8) 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.
(9) Headings. The
headings in this Amendment are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.
(10) 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.
(11) 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.
(12) 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 AMENDMENT OR THE
SUBJECT MATTER HEREOF. EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT
THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS TRANSACTION, AND
THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS.
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(13) 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.
(14) 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]
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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:
CORPORATE
MEZZANINE II, L.P.
By: ……………………………………..
Name:
Title:
Accepted
and agreed as to Section 15:
GRAFICO
INCORPORATED
By: ……………………………………..
Name:
Title:
SIGNATURE
PAGE TO AMENDMENT NO. 3 TO NOTE
EXHIBIT
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ACKNOWLEDGMENT
AND AGREEMENT OF SENIOR LENDER
Reference
is made to (i) the foregoing Amendment No. 3 to Note, dated as of March [__],
2009, 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 amendments set
forth in Section
3 thereof; and (iii) reaffirms its obligations to CMII under the
Subordination Agreement.
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TD
BANKNORTH, N.A.
By:
Name:
Its:
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