AMENDMENT AND WAIVER NO. 5
, dated as of
March , 2007 (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 Willey Brothers, Inc.) ("
BPR ", and together with BPG, each individually a
" Company " and collectively, the "
Companies "); and
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(3)
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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 and Amendment No. 4, dated as of May 5, 2005
(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, 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 Incorporated, a Delaware
corporation and wholly owned subsidiary of BPG ("
Grafico "), and Banknorth, N.A., a national
banking association (the " 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, Grafico, CMII and Banknorth are
parties to a Subordination and Intercreditor Agreement, dated as of
May 5, 2005 (as the same may be amended, restated, supplemented or
otherwise modified from time to time as permitted thereunder, the "
Subordination Agreement "); and
WHEREAS , (i) Section 8.3(b) of the Original Purchase
Agreement requires that BPR shall maintain for each period of
twelve trailing months ending on the last day of each fiscal
quarter, minimum EBITDA of at least $900,000 (the “
Original Minimum EBITDA Covenant ”), (ii)
Section 8.3(c) of the Original Purchase requires that BPR shall not
permit Interest Coverage Ratio for any period of four consecutive
fiscal quarters ending on the last day of any fiscal quarter to be
less than 2.1:1 (the “ Original Interest Coverage
Covenant ”) and (iii) Section 8.3(d) of the Original
Purchase Agreement requires that on the last day of each fiscal
quarter, BPR shall not permit Fully Loaded Fixed Charge Coverage
Ratio for any such fiscal quarter to be less than 1.15:1 (the
“ Original Fixed Charge
Coverage Covenant ”); and
WHEREAS , BPR has not complied with (i) the Original
Minimum EBITDA Covenant for the periods of twelve trailing months
ended on March 31, 2006 and December 31, 2006, respectively, (ii)
the Original Fixed Charge Coverage Covenant for the periods of four
consecutive fiscal quarters ended on March 31, 2006 and December
31, 2006, respectively or (iii) the Original Interest Coverage
Covenant for the period of four consecutive fiscal quarters ended
on December 31, 2006 (the “ Subject Events of
Default ”); and
WHEREAS , the Companies have requested that CMII amend
certain provisions of the Original Purchase Agreement;
WHEREAS , the Companies have asked CMII to waive the
Subject Events of Default, but only for the specific covenants and
time period set forth above; and
WHEREAS , subject to the satisfaction of the conditions
set forth in Section 4, CMII is willing to waive the Subject Events
of Default, but only for the specific covenants and time periods
set forth above and is willing to 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:
(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 . Each Company
acknowledges that each of the Original Purchase Agreement, the 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 Warrant, and of BPR, in the case of the Note,
enforceable against the Companies, BPG or BPR, as the case may be,
in accordance with their respective terms.
(3)
Amendment . Effective as of the Effective Date (as
hereinafter defined) and subject to the conditions to effectiveness
set forth in Section 4 hereof, the Original Purchase
Agreement is hereby amended as follows:
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(a)
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Section 8.3 of
the Original Purchase Agreement is amended and restated in its
entirety as follows:
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