Exhibit 10.3
AMENDMENT NO. 3 AND WAIVER, dated as of January 7, 2004 (this "Amendment")
BY AND AMONG
BRANDPARTNERS GROUP, INC., a Delaware corporation ("BPG");
XXXXXX BROTHERS INC., a New Hampshire corporation ("Xxxxxx", and together with
BPG, each individually a "Company" and collectively, the "Companies"); and
CORPORATE MEZZANINE II, L.P., a British Virgin Islands limited partnership
("CMII").
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 and Amendment No. 2 and Waiver dated
as of August 9, 2002 (the "Original Purchase Agreement" and as amended hereby,
the "Purchase Agreement") pursuant to which (i) Xxxxxx has issued and sold to
CMII a subordinated promissory note (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 415,000 shares of
common stock of BPG (the "Warrant"); and
WHEREAS, the Companies have requested that CMII amend the Original Purchase
Agreement in certain respects and waive certain provisions of the Original
Purchase Agreement as specified herein; and
WHEREAS, CMII is willing to waive and amend certain provisions of the Original
Purchase Agreement, 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:
(A) Definitions. Capitalized terms used in this Amendment shall have the
meanings given them in the Original Purchase Agreement unless otherwise defined
herein.
(B) Affirmation of Original Purchase Agreement. Each Company acknowledges
that each of the Original Purchase Agreement, the Note and the Warrant is a
valid and binding obligation of the Companies, in the case of the Original
Purchase Agreement and the Warrant and of Xxxxxx, in the case of the Note,
enforceable against the Companies or Xxxxxx, as the case may be, in accordance
with their respective terms.
(C) Waiver. Effective as of December 2, 2003 and subject to the terms of
Amendment No. 1 to Note dated as of the date hereof between Xxxxxx and CMII
("Amendment No. 1 to Note"), CMII hereby waives compliance with the requirement
set forth in that certain letter agreement dated as of September 30, 2003
between the Companies, CMII and Fleet Capital Corporation ("Fleet") that Xxxxxx
pay accrued interest on the Note on the earliest to occur of (a) December 2,
2003, (b) the date that all or any portion of Fleet's commitments under the
Senior Credit Agreement are terminated or cancelled or (c) the date that all or
any portion of Xxxxxx'x obligations under the Senior Credit Agreement becomes
immediately due and payable. Anything herein to the contrary notwithstanding,
(i) CMII's waiver contained in this Section 3 is subject to the satisfaction of
the conditions set forth in Section 5 hereof, (ii) such waiver only applies to
the specific provisions noted above and (iii) Xxxxxx is required to comply with
the provisions of the Purchase Agreement and the Note, as amended by Amendment
No. 1 to Note, at all times in the future.
(D) Amendment. Section 8.3 of the Original Purchase Agreement is amended
by adding the following text ", except for the fourth fiscal quarter of fiscal
year 2003 and each fiscal quarter of fiscal year 2004" immediately after the
text "Xxxxxx covenants and agrees that" appearing in such section.
(E) Conditions to CMII's Obligations. The amendment contained in Section 4
hereof and the waiver contained in Section 3 hereof shall become effective (the
"Effective Date") upon the satisfaction in full of the following conditions on
or prior to January 12, 2004:
(1) 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;
(2) CMII shall have executed and delivered a counterpart of the
Amendment No. 1 to Note and CMII shall have received a counterpart of the
Amendment No. 1 to Note executed and delivered by each Company;
(3) BPG shall have issued to CMII and CMII shall have received one
or more Warrants to purchase not less than an aggregate of 250,000 shares of
common stock of BPG (subject to adjustment set forth in the Warrants and at an
initial exercise price of US$0.26 and BPG shall have authorized and reserved for
issuance to CMII that number of shares of its common stock necessary for the
purpose of issuance to CMII upon conversion of the Warrant;
(4) CMII shall have received in cash the interest that shall have
accrued on the Accreted Principal Amount (as defined in the Note) and that is
due as of December 31, 2003;
(5) on or prior to January 12, 2004, BPG shall have completed an
aggregate of $2,500,000 in common equity financing, at a price per share
disclosed to CMII and having no mandatory redemption, repurchase, put or similar
arrangement; and
(6) all conditions to the effectiveness of the Ninth Amendment to
the Senior Credit Agreement shall have been satisfied and a true, correct and
complete copy of such amendment (in the form that will be in effect on Effective
Date) shall have been delivered to CMII.
(F) Reimbursement of Expenses. Xxxxxx 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.
(G) Senior Credit Agreement Amendment. Section 10.2 of the Ninth Amendment
to the Senior Credit Agreement dated as of November 28, 2003 (the "Ninth
Amendment"), provides certain restrictions on the ability of Xxxxxx to make
payments of principal of and interest on the Notes. This will confirm that CMII
does not consent to the provisions of such section 10.2 to the extent such
provisions are inconsistent with the Subordination Agreement. By signing below,
Xxxxxx confirms and agrees that it will make payments under the Notes to the
extent required by the terms of the Notes and permitted by the Subordination
Agreement.
(H) Notices. Nothwithstanding anything to the contrary contained in the
Transaction Documents (as defined in the Purchase Agreement), effective as of
December 2, 2003 all notices, demands and other communications to BPG or Xxxxxx
provided for or permitted under any Transaction Document shall be made in
writing and shall be sent by registered or certified first class mail, return
receipt requested, telecopier, courier service or personal delivery to the
following addresses:
(1) If to BPG:
BrandPartners Group, Inc.
00 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Chief Executive Officer
Facsimile No.: (000) 000-0000
With copies to:
BrandPartners Group, Inc.
c/o Willey Brothers, Inc.
00 Xxxx Xxxxxx
0
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Chief Executive Officer
Facsimile No.: (000) 000-0000
and
Xxxxxxx & Xxxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
(2) If to Xxxxxx:
Xxxxxx Brothers, Inc.
00 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Chief Executive Officer
Facsimile No.: (000) 000-0000
With copies to:
Xxxxxx Brothers, Inc.
c/o BrandPartners Group, Inc.
00 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Chief Executive Officer
Facsimile No.: (000) 000-0000
and
Xxxxxxx & Xxxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
(I) Original Purchase Agreement and Note to Remain in Force. Except as
specifically provided herein, the Original Purchase Agreement and the Note 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 Purchase
Agreement to "this Agreement", "hereof" or "herein" or the like, and all
references in the other Transaction Documents to the Purchase Agreement, shall
mean and refer to the Original Purchase Agreement as amended and waived 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.
(J) 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
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power preclude any other or further exercise thereof or the exercise of any
other right or power hereunder or under the Original 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.
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 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.
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.
[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: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Executive Officer
XXXXXX BROTHERS, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Executive Officer
CORPORATE MEZZANINE II, L.P.
By: /s/ Hamad Xxxxxxxxx Xxxxxxx
-----------------------------------
Name: Hamad Xxxxxxxxx Xxxxxxx
Title: Director
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