Exhibit 10.1

FIRST AMENDMENT TO SECURITIES

PURCHASE AGREEMENTS AND 8% SENIOR SECURED CONVERTIBLE DEBENTURES

 

This FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENTS AND 8% SENIOR SECURED
CONVERTIBLE DEBENTURES (this “FIRST Amendment”) is dated as of January 3, 2017,
and effective as of January 1, 2017, among Staffing 360 Solutions, Inc., a
Nevada corporation (“Parent”), each of Parent’s subsidiaries (“Subsidiaries” and
collectively, the “Company”),  and Hillair Capital Management LLC (the “Holder”)
thereto, and amends that certain Securities Purchase Agreement, dated as of July
8, 2015 and that certain Securities Purchase Agreement, dated as of February 8,
2016 (each a “Purchase Agreement” and together the “Purchase Agreements”), by
and between the Parent the Holder and the 8% Senior Secured Convertible
Debenture Due April 1, 2017 (issued on July 8, 2015) (“2015 Debenture”) and the
8% Senior Secured Convertible Debenture Due July 1, 2017 (issued on February 8,
2016) (“2016 Debenture”) (each a “Debenture” and together the “Debentures”),
which Debentures are guaranteed, and secured by, all the assets of the Parent
and the Subsidiaries.  Capitalized terms used and not otherwise defined in this
FIRST Amendment shall have the meanings specified in the Purchase Agreements and
Debentures, as applicable.

 

WHEREAS, the Company has requested (i) the Periodic Redemption Amount due on
January 1, 2017 be paid in kind and accretion to principal amount of the
Debentures rather than cash pursuant to the terms of this FIRST Amendment, (ii)
all accrued but unpaid interest on the Debentures be accreted to the principal
amount outstanding on the Debentures and (ii) the Periodic Redemption Amount due
July 1, 2017 (also the Maturity Date) be extended to October 1, 2018.  

 

WHEREAS, the Holders are prepared to agree to the Company’s requests subject to
the terms and conditions set forth herein.

 

NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
hereby agree as follows:

 

Section 1.  Amendments to Purchase Agreements.  The Purchase Agreement shall be
amended as follows:

New Section 4.17 is added to each Purchase Agreement which shall be as follows:
“Shareholder Approval.  The Company shall hold a special vote of shareholders
(which may also be at the annual meeting of shareholders) at the earliest
practical date (and in any event, pursuant to a proxy to be filed on or before
April 1, 2017) for the purpose of obtaining Shareholder Approval (as defined
below), with the recommendation of the Company’s Board of Directors that such
proposal be approved, and the Company shall solicit proxies from its
shareholders in connection therewith in the same manner as all other management
proposals in such proxy statement and all management-appointed proxyholders
shall vote their proxies in favor of such proposal.  The Company shall use its
reasonable best efforts to obtain such Shareholder Approval. If the Company does
not

 

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obtain Shareholder Approval at the first vote, the Company shall call a vote
every four months thereafter to seek Shareholder Approval until the earlier of
the date Shareholder Approval is obtained or the Debentures are no longer
outstanding. “Shareholder Approval” means such approval as may be required by
the applicable rules and regulations of the Nasdaq Stock Market (or any
successor entity) from the shareholders of the Company with respect to the
transactions contemplated by the Transaction Documents, including the issuance
of all of the Underlying Shares in excess of 19.99% of the issued and
outstanding Common Stock on the applicable date required thereby.”

Section 2.  Amendments to Debentures.  Each Debenture shall be amended as
follows:

(a)The definition of “Maturity Date” is hereby amended to be October 1, 2018.

(b)The Definition of “Optional Redemption Amount” is hereby amended and restated
as follows: “means the sum of (a) one hundred percent (100%) of the then
outstanding principal amount of the Debenture, (b) accrued but unpaid interest
and (c) all liquidated damages and other amounts due in respect of the
Debenture.

(c)The definition of “Periodic Redemption Amount” is hereby amended to mean the
sum of (i) all then outstanding principal amount of this Debenture and (ii)
accrued but unpaid interest, liquidated damages and any other amounts then owing
to the Holder in respect of this Debenture.

(d)The definition of “Periodic Redemption Date” is hereby amended to be October
1, 2018.

(e)Interest payments under the Debentures are not payable until October 1, 2017
on which date all accrued but unpaid interest shall be payable pursuant to
Section 2 of the Debentures.  Thereafter interest payments shall be made in
accordance with the schedule of interest payments set forth in Section 2(a).

(f)Section 4(b) of each Debenture is hereby amended and restated as follows:
“Conversion Price.  The conversion price in effect on any Conversion Date shall
be equal to $3.00, subject to adjustment herein (the “Conversion Price”).”

Section 3.  Accretion of Interest; Increase in Principal of Debentures; Waiver
of Event of Default.  The Company hereby agrees to accrete all accrued but
unpaid interest on the Debentures as of the date hereof ($53,760 in the
aggregate) to the principal amount of the 2015 Debenture.  Additionally, in
consideration of the amendments under this FIRST Amendment, the Company agrees
to increase the principal on the 2015 Debenture by $1,111,846.  Accordingly, as
of the date hereof the outstanding principal amount outstanding of the 2015
Debenture is $3,125,606.  Subject to compliance with the terms of this
Agreement, the Holder hereby waives the Event of Default that otherwise would
have occurred on January 1, 2017 as part of the Periodic Redemption.

Section 4.  Exchange of 2016 Debenture for Shares of Common Stock.  Within two
Trading Days of the date hereof the Company shall deliver to the Holder, on an
expedited

 

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basis via The Depository Trust Company (“DTC”) Deposit or Withdrawal at
Custodian system (“DWAC”) 600,000 shares of Common Stock in exchange for the
surrender of all principal amount of the 2016 Debenture, which shares shall be
issued free of any legend or resale restrictions.  If such shares are not
received in the DTC account of the Holder within 5 Trading Days of the date
hereof, this FIRST Amendment shall be deemed null and void and of no further
force and effect and all amounts due and owing to the Holder shall be
immediately paid in full.  Upon issuance of such shares, the 2016 Debenture
shall be deemed paid in full and no longer outstanding.

Section 5.  Public Announcement. The Company shall (a) by 9:00 a.m. (New York
City time) on the 4th Trading Day immediately following the date hereof, issue a
press release disclosing the material terms of the transactions contemplated
hereby, and (b) file a Current Report on Form 8-K with the Commission within the
time required by the Exchange Act.  From and after the issuance of such press
release, the Company represents to the Holders that it shall have publicly
disclosed all material, non-public information delivered to any of the Holders
by the Company or any of its Subsidiaries, or any of their respective officers,
directors, employees or agents in connection with the transactions contemplated
by the Transaction Documents.  In addition, effective upon the issuance of such
press release, the Company acknowledges and agrees that any and all
confidentiality or similar obligations under any agreement, whether written or
oral, between the Company, any of its Subsidiaries or any of their respective
officers, directors, agents, employees or Affiliates on the one hand, and any of
the Holders or any of their Affiliates on the other hand, shall terminate. The
Company and each Holder shall consult with each other in issuing any other press
releases with respect to the transactions contemplated hereby, and neither the
Company nor any Holder shall issue any such press release nor otherwise make any
such public statement without the prior consent of the Company, with respect to
any press release of any Holder, or without the prior consent of each Holder,
with respect to any press release of the Company, which consent shall not
unreasonably be withheld or delayed, except if such disclosure is required by
law, in which case the disclosing party shall promptly provide the other party
with prior notice of such public statement or communication.  Notwithstanding
the foregoing, the Company shall not publicly disclose the name of any Holder,
or include the name of any Holder in any filing with the Commission or any
regulatory agency or Trading Market, without the prior written consent of such
Holder, except (a) as required by federal securities law in connection with the
filing of final Transaction Documents with the Commission and (b) to the extent
such disclosure is required by law or Trading Market regulations, in which case
the Company shall provide the Holders with prior notice of such disclosure
permitted under this clause (b).

Section 6.  Miscellaneous.  Except as specifically amended or waived above, the
Purchase Agreement and the other Transaction Documents shall remain unchanged
and in full force and effect and are hereby ratified and confirmed.  The
execution, delivery and effectiveness of this FIRST Amendment shall not operate
as a waiver of any right, power or remedy of the Holder under the Purchase
Agreement or any Transaction Document, nor constitute a waiver of any provision
of the Purchase Agreement or any Transaction Document, except as specifically
provided by this FIRST Amendment.  This FIRST Amendment is a Transaction
Document, and a part of the Purchase Agreement, for all purposes of the Purchase
Agreement. This FIRST Amendment may be executed in any number of counterparts,
and by different parties hereto on separate counterpart signature pages, and all
such counterparts taken together shall be deemed to constitute one and the

 

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same instrument.  Delivery of a counterpart signature page by facsimile
transmission or by e-mail transmission of an Adobe portable document format file
(also known as a “PDF” file) shall be effective as delivery of a manually
executed counterpart signature page.  Section headings used in this FIRST
Amendment are for reference only and shall not affect the construction of this
FIRST Amendment.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this FIRST Amendment to be
duly executed and delivered as of the day and year first above written.

 

 

 

Company:

 

STAFFING 360 SOLUTIONS, INC.

 

 

 

/s/ Brendan Flood

By:  Brendan Flood

Title:  Executive Chairman

 

 

Holder:

 

HILLAIR CAPITAL MANAGEMENT LLC

 

 

/s/ Sean M. McAvoy

By:  Sean M. McAvoy

Title: Managing Member

 

 

 

 

 

 

 

[Signature Page to FIRST Amendment]