FIRST AMENDMENT TO PURCHASE AGREEMENT
Exhibit 4.10
FIRST
AMENDMENT
This
FIRST AMENDMENT, dated as of July 15, 2005 (the “Amendment”),
is
made and entered into with respect to the Purchase Agreement among PCA
International, Inc. (predecessor to Portrait Corporation of America, Inc.)
(the
“Company”),
GS
Mezzanine Partners II, L.P. (“GS
Mezzanine”)
and GS
Mezzanine Partners II Offshore, L.P. (“GS
Offshore”
and,
together with GS Mezzanine, the “Purchasers”),
dated
as of June 27, 2002 (as amended through the date hereof, the “Purchase
Agreement”).
Capitalized terms used herein without definition are so used as defined in
the
Purchase Agreement.
RECITALS
WHEREAS,
the Company and the Purchasers have agreed to enter into a waiver (“Waiver”)
of
certain provisions of Section 6.1(a) of the Purchase Agreement concurrently
with
this Amendment,
WHEREAS,
the parties hereto desire to amend the Purchase Agreement as set forth
herein,
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein, the parties hereto hereby agree as
follows:
Section
1.1 Amendments
to Section 1.
Section
1 of the Purchase Agreement is hereby amended by
inserting the following definition in its proper alphabetical
location:
“2005
Refinancing”
means
the Refinancing of the Credit Agreement by Opco with (i) one or more debt
facilities with banks or other institutional lenders providing for revolving
loans, term loans, senior secured notes or other extensions of credit in the
original aggregate principal amount of up to $60 million and (ii) a letters
of
credit facility with banks or other institutional lenders providing for the
issuance of letters of credit in the original aggregate principal amount of
up
to $20 million.
Section
1.2 Amendments
to Section 6.
Section
6 of the Purchase Agreement is hereby amended by adding a new section 6.1(f)
as
follows:
“The
Company shall deliver to each Purchaser and each Holder that is an Institutional
Investor so long as such Purchaser or such Holder holds any Note or Warrant
as
soon as available, but
in
any event by the earlier to occur of (x) 10 Business Days following the date
of
consummation of the 2005 Refinancing and (y) August 1, 2005 (or if the 2005
Refinancing is consummated after July 18, 2005 but prior to August 1, 2005,
then
within 10 Business Days following the date of consummation of the 2005
Refinancing), an
audited consolidated and consolidating balance sheet of the Company and its
Subsidiaries as of the end of the 2004 Fiscal Year and the related consolidated
and consolidating statements of income, retained earnings, stockholders’ equity
and cash flows for the year, audited by Deloitte & Touche or other firm of
independent certified public accountants of nationally recognized standing
reasonably acceptable to the Purchasers, setting forth in each case in
comparative form the figures for the previous year, reported without a “going
concern” or like qualification or exception, or qualification indicating that
the scope of the audit was inadequate to permit such independent certified
public accountants to certify such financial statements without such
qualification or any other material qualification or exception.”
Section
1.3 Amendments
to Section 8.
(a) Section
8
of the Purchase Agreement is hereby amended by adding a new Section 8.1(e)
to
the Purchase Agreement as follows:
“(e) The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, incur, create, issue, assume, guarantee, permit to
exist
or otherwise become liable for any Senior Indebtedness other
than Senior Indebtedness referenced in clause (i) or (ii) of the definition
thereof
up to
(x) a total of $60 million in respect of Company Guarantees of the Credit
Agreement and the other Credit Documents (plus all Obligations (other than
for
principal) of the Company and its Restricted Subsidiaries in respect of such
Senior Indebtedness), (y) a total of $165 million in respect of (1) the Senior
Notes (or notes issued in exchange therefore prior to the date hereof) and
(2)
any Refinancing Indebtedness Refinancing the Senior Notes (or notes issued
in
exchange therefore prior to the date hereof) and (z) a total of $10 million
in
respect of (1) the Opco Notes
and (2)
any Refinancing Indebtedness Refinancing the Opco Notes.”
(b) Section
8
of the Purchase Agreement is hereby amended by adding a new Section 8.1(f)
to
the Purchase Agreement as follows:
“(f) The
Company will not, directly or indirectly, in any event incur, create, issue,
assume, guarantee, permit to exist or otherwise become liable for any
Indebtedness that (1) is Indebtedness that is not subordinated in right of
payment to the Notes, other than Senior Indebtedness permitted by Section 8.1(e)
of this Purchase Agreement or (2) ranks pari
passu
with the
Notes (other than up to $20 million of Indebtedness incurred in accordance
with
clause (10) of the definition of “Permitted Indebtedness” in connection with the
2005 Refinancing or, without duplication, any Refinancing thereof)
.”
Section
1.4 Amendments
to Section 12.
Section
12 of the Purchase Agreement is hereby amended by replacing Section 12.1(c)
in
its entirety with the following:
“(c) there
shall be a default in the performance or breach of the provisions of Section
6.1(f), Section 7.8, Section 8.2(a), Section 8.6 or Section 9;”
Section
2. Expenses.
The
Company acknowledges that Section 15.1 of the Purchase Agreement applies to
the
Waiver, this Amendment and all matters related to or arising out of discussions
between the Company and the Purchasers in respect of the 2005 Refinancing,
and
any previously proposed refinancing or waiver; provided,
that
the Company will not be required to pay any costs, fees or expenses of any
legal
counsel of the Purchasers pursuant to this Section 2 in excess of $50,000 in
the
aggregate for work completed through the date of this Amendment (the
“Legal
Counsel Fees”).
Section
3. Reference
to and Effect on the Financing Documents.
On and
after the Amendment Effective Date, each reference in the Purchase Agreement
to
“this Agreement”, “hereunder”, “hereof” or words of like import referring to the
Purchase Agreement, and each reference in the Financing Documents to “the
Purchase Agreement”, “thereunder”, “thereof” or words of like import referring
to the Purchase Agreement, shall mean and be a reference to the Purchase
Agreement as amended by this Amendment. The execution, delivery and
effectiveness of this Amendment and the amendment of the Purchase Agreement
as
provided herein shall not, except as expressly provided herein, operate as
a
waiver, termination, rescission, repudiation, relinquishment, amendment,
modification or supplement of any right, power, privilege, remedy or obligation
of any party arising, created or existing under or by virtue of the Purchase
Agreement or of any provision of the Purchase Agreement. The parties hereto
agree that except as expressly amended herein, all of the provisions of the
Purchase Agreement and the other Financing Documents are and shall remain in
full force and effect in accordance with the terms thereof and are hereby in
all
respects ratified and confirmed.
Section
4. Counterparts.
This
Amendment may be executed by one or more of the parties to this Amendment on
any
number of separate counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument. Delivery of an
executed signature page of this Amendment by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.
Section
5. Effective
Date.
This
Amendment shall become effective as of the date (the “Amendment
Effective Date”)
on
which (x)(1) this Amendment and (2) the Waiver shall have been executed and
delivered by each of the Company and each of the Holders of Notes and (y) the
Legal Counsel Fees have been paid in full.
The
parties hereto agree that the Waiver shall not become effective until the
Amendment Effective Date.
Section
6. Governing
Law.
This
Amendment shall be construed and enforced in accordance with, and the rights
of
the parties shall be governed by, the law of the state of New York, excluding
choice-of-law principles of the law of such state that would require the
application of the laws of a jurisdiction other than such state.
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by
their respective officers thereunto duly authorized, as of the date first above
written.
PORTRAIT
CORPORATION OF AMERICA, INC.
|
By:
|
/s/
Xxxxxx Norsworthy___
|
Name:
Xxxxxx Xxxxxxxxxx
Title:
Executive Vice President and Chief Financial Officer
GS
MEZZANINE PARTNERS II, L.P.
By:
GS
Mezzanine Advisors II, L.L.C.,
|
its
general partner
|
By:
/s/
Xxxx X. Bowman____________
Name:
Xxxx X. Xxxxxx
Title:
Vice President
GS
MEZZANINE PARTNERS II OFFSHORE, L.P.
By:
GS
Mezzanine Advisors II, L.L.C.,
|
its
general partner
|
By:
/s/
Xxxx X. Bowman____________
Name:
Xxxx X. Xxxxxx
Title:
Vice President
