Document:

ex10-1.htm

Exhibit 10.1

 

	
 

 

May 2, 2016

 

VIA ELECTRONIC MAIL

AND FACSIMILE

 

Hampshire Group, Limited

114 West 41st Street

New York, NY 10036

 

Re:     Further Temporary Extension of Forbearance Termination Date

 

Ladies and Gentlemen:

 

Reference is made to (i) that certain Credit Agreement, dated as of September 26, 2013 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Hampshire Group, Limited, a Delaware corporation, Hampshire Brands, Inc., a Delaware corporation, Hampshire International, LLC, a Delaware limited liability company and Scott James, LLC, a Delaware limited liability company (collectively, the “Borrowers”), Salus CLO 2012-1, LTD. (“Salus CLO”) and Salus Capital Partners, LLC (collectively, the “Lenders”) and Salus Capital Partners, LLC, as Administrative Agent and Collateral Agent for the Lenders (in such capacity, the “Agent”), (ii) that certain Forbearance Agreement and Fifth Amendment to Credit Agreement, dated as of November 20, 2015 (the “Forbearance Agreement”), by and among the Borrowers, Lenders and Agent, (iii) that certain letter agreement, dated as of March 7, 2016 (the “March 7 Letter Agreement”), by and among the Borrowers, Lender and Agent, (iv) that certain letter agreement, dated as of April 4, 2016 (the “April 4 Letter Agreement”) by and among the Borrowers, Lender and Agent, and (iv) that certain letter agreement, dated as of April 18, 2016 (the “April 18 Letter Agreement”, together with the March 7 Letter Agreement and the April 4 Letter Agreement, collectively, the “Letter Agreements”), by and among the Borrowers, Lenders and Agent. Capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Credit Agreement, the Forbearance Agreement or the Letter Agreements, as applicable.

 

As detailed in the Letter Agreements, (i) the Borrowers are attempting to close the New Credit Facilities, and upon such closing the proceeds and fundings thereunder will be used to pay off in full the Obligations under the Credit Agreement, and (ii) in order to afford time to finalize the definitive loan documentation under the New Credit Facilities, the Agent and Lenders have agreed pursuant to the Letter Agreements to extend the Forbearance Termination Date under the Forbearance Agreement and the Maturity Date under the Credit Agreement from February 29, 2016 until May 2, 2016.

 

 

 

 

 

As of the date hereof, the Borrowers have been unable to close the New Credit Facilities and are requesting a further temporary extension of the Forbearance Termination Date under the Forbearance Agreement and the Maturity Date under the Credit Agreement.

 

The Agent and Lenders hereby agree to extend each of the Forbearance Termination Date under the Forbearance Agreement and the Maturity Date under the Credit Agreement from May 2, 2016 until June 3, 2016; provided, however, if the Agent and Lenders are notified by any of the Borrowers, Accord Capital or any other prospective lender for the Senior Credit Facility or the providers of junior capital under the Subordinated Credit Facility that the Senior Credit Facility and/or Subordinated Credit Facility will not be completed by such lenders as currently contemplated then, in Agent’s sole discretion, the Forbearance Termination Date and Maturity Date shall automatically occur as of the date of such notification. The Borrowers hereby agree to notify Agent immediately (i) if any of the prospective lenders under the Senior Credit Facility or Subordinated Credit Facility notify the Borrowers that they do not intend to consummate the financings under the Senior Credit Facility or Subordinated Credit Facility, or require any closing conditions not customary for transactions of this type, or (ii) if the management of the Borrowers determine that it is unlikely that the Senior Credit Facility or Subordinated Credit Facility will close and fund by June 3, 2016.

 

Borrowers hereby acknowledge, confirm and agree that (a) the aggregate outstanding principal amount of the Obligations as of May 2, 2016 is $12,848,226.88, (b) such amounts, together with all interest accrued and accruing thereon, and all fees, costs, expenses and other charges now or hereafter payable by Borrowers to Agent and Lenders under the Loan Documents, are unconditionally owing by the Borrowers to Agent and Lenders without offset, defense or counterclaim of any kind, nature or description whatsoever, (c) their obligation and liability for the payment and performance of the Obligations pursuant to the Loan Documents is unconditionally owing to Agent and Lenders without offset, defense or counterclaim of any kind, nature or description whatsoever, and (d) the amount set forth in the preceding clause (a) includes the accommodation fees paid in connection with the Letter Agreements, which fees have been fully earned pursuant to the terms of the Letter Agreements, and are not subject to refund or reduction in whole or in part.

 

In consideration of the agreement of the Agent and Lenders to further extend the Maturity Date and Forbearance Termination Date hereunder and in recognition that the New Credit Facilities may not close by June 3, 2016, or may not close at all, the Borrowers hereby agree to the following additional terms and conditions:

 

(i)     The Borrowers acknowledge that the Agent has or will engage 360 Merchant Solutions, LLC (the “Consultant”) to analyze and provide a valuation of the Borrowers’ various assets. The Borrowers shall, and shall cause their management and other personnel to cooperate with the Consultant and afford the Consultant access to all relevant financial and other information relative to the Borrower’s assets and businesses. All fees and expenses of the Consultant incurred by the Agent shall constitute Credit Party Expenses under the Credit Agreement and shall be paid or reimbursed to Agent by Borrowers pursuant to the terms of the Credit Agreement.

 

 

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(ii)     On the earlier of (a) May 30, 2016 or (b) the date that any prospective lender for the Senior Credit Facility informs the Borrowers that such lender does not intend to consummate the financings under the Senior Credit Facility, the Borrowers hereby agree, at the Agent’s request, to engage a chief restructuring officer (a “CRO”). The Agent shall recommend three candidates to be the CRO (with one of which being GRL Capital Advisors) and Borrowers shall choose one of such candidates. The terms, conditions and scope of the CRO’s engagement shall be satisfactory to the Agent in all respects.

 

(iii)     The Borrowers shall deliver to Agent certified copies of resolutions of the boards of directors or managers of each of the Borrowers or unanimous written consent of the directors or managers of each of the Borrowers evidencing the approval of the foregoing.

 

Except as expressly amended hereby, all terms and conditions of the Letter Agreements, the Forbearance Agreement and Credit Agreement, and any and all exhibits annexed thereto and all other writings submitted by the Borrowers to the Agent and Lenders pursuant thereto, shall remain unchanged and in full force and effect. This letter agreement (and each of the other Letter Agreements) shall be deemed to be a Loan Document under and as defined in the Credit Agreement. The failure of the Borrowers to comply with any of the provisions of this agreement shall be deemed an immediate Event of Default under the Loan Agreement without the requirement of written notice by the Agent or further notice or cure period.

 

The Borrowers hereby acknowledge and reaffirm their obligations under the Loan Documents, in each case as amended, restated, supplemented or otherwise modified prior to or as of the date hereof. The Borrowers hereby confirm the security interests and liens granted by the Borrowers to the Agent, in and to the Collateral in accordance with the Credit Agreement and other Loan Documents as security for the Obligations.

 

EACH BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE, COUNTERCLAIM, OFFSET, CROSS COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS LIABILITY TO REPAY THE OBLIGATIONS OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM THE AGENT OR LENDERS. EACH BORROWER HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES AGENT, EACH LENDER, THEIR AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, ASSERTED OR UNASSERTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS LETTER AGREEMENT IS EXECUTED, WHICH SUCH BORROWER MAY NOW OR HEREAFTER (WHETHER OR NOT PRESENTLY SUSPECTED, CONTEMPLATED OR ANTICIPATED) HAS AGAINST AGENT, ANY LENDER, AND THEIR AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM THE CREDIT AGREEMENT AND OTHER LOAN DOCUMENTS, INCLUDING, WITHOUT LIMITATION, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE CREDIT AGREEMENT OR OTHER LOAN DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS LETTER AGREEMENT.

 

 

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Kindly acknowledge your acknowledgment and agreement to the foregoing by signing and returning a copy of this Letter Agreement to the attention of the undersigned. Thank you.

 

[Signature Page Follows]

 

 

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Very truly yours,

	
 
	
 

	
 
	
SALUS CLO 2012-1, LTD.

as a Lender

	 	 
	 	
By:  Salus Capital Partners II, LLC,

Its:  Collateral Manager

	 	 
	 	 
	 	By:  /s/ Kyle Shonak               
	 	
        Name: Kyle Shonak

        Title: President

	 	 
	 	 
	 	
SALUS CAPITAL PARTNERS, LLC

as a Lender, Administrative Agent

and Collateral Agent

	 	 
	 	 
	 	
By:  /s/ Kyle Shonak               

        Name: Kyle Shonak

        Title: President

 

 

Letter Agreement Re: Further Temporary Extension of Forbearance Termination Date

 

 

 

 

Acknowledged and Agreed:

 

HAMPSHIRE GROUP, LIMITED

as Lead Borrower

 

 

By: /s/ William Drozdowski                      

Name: William Drozdowski                       

Title:     Interim CFO                                   

 

HAMPSHIRE BRANDS, INC.

as a Borrower

 

 

By: /s/ William Drozdowski                       

Name: William Drozdowski                       

Title:     Interim CFO                                   

 

HAMPSHIRE INTERNATIONAL, LLC

as a Borrower

 

 

By: /s/ William Drozdowski                       

Name: William Drozdowski                       

Title:     Interim CFO                                   

 

SCOTT JAMES, LLC

as a Borrower

 

 

By: /s/ William Drozdowski                       

Name: William Drozdowski                       

Title:     Interim CFO                                   

 

 

Letter Agreement Re: Further Temporary Extension of Forbearance Termination Dateex10-1.htm

Exhibit 10.1

 

 

Michael Taglich

 

BRIDGELINE DIGITAL, INC.

 

AMENDMENT #2 TO PROMISSORY NOTES 

 

THIS AMENDMENT #2 TO PROMISSORY NOTES (this “Amendment”) is made as of May 17, 2016, by and among Bridgeline Digital, Inc., a Delaware Corporation (the “Company”) and Michael Taglich (“Taglich”). 

 

WHEREAS, on December 23, 2015 the Company amended the following promissory notes previously issued to Taglich to extend the Maturity Date to March 1, 2017 and to increase the interest rate and prepayment penalty set forth in such notes (the “Amended Notes”):

 

	 	
●
	
$500,000 Term Note issued on January 7, 2015;

	 	
●
	
$500,000 Term Note issued on February 12, 2015;

	 	
●
	
$500,000 Term Note issued on May 12, 2015;

	 	
●
	
$500,000 Term Note issued on July 21, 2015; and

	 	
●
	
$250,000 Term Note issued on December 3, 2015;

 

WHEREAS, on February 10, 2016, the Company issued an additional note to Taglich in the principal amount of $200,000 (together with the “Amended Notes,” the “Notes”); and

 

WHEREAS, the Company and Taglich desire to amend the Notes to provide that the Notes are convertible at the election of the Company into shares of Common Stock of the Company.

 

NOW, THEREFORE, in consideration of the promises and the mutual covenants and obligations contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Taglich hereby agree as follows:

 

1.     Amendments. Each of the Notes is hereby amended to add the following language immediately after Section 3:

 

“Section 3A. Conversion. 

 

a)     Conversion by Company. If after the date hereof, the Company shall receive the approval of the Company’s stockholders to issue shares of Common Stock upon conversion of this Note, then the Company may, at any time prior to the Maturity Date, deliver a written notice to the Holder (a “Conversion Notice” and the date such notice is delivered to the Holder, the “Conversion Notice Date”) to cause the Holder to convert all or part of the then outstanding principal amount of this Note plus, if so specified in the Conversion Notice, accrued but unpaid interest, and other amounts owing to the Holder under this Note (“Conversion”), it being agreed that the “Conversion Date” for purposes of this Section 3A shall be deemed to occur on the second Trading Day following the Conversion Notice Date (such second Trading Day, the “Conversion Date”). 

 

b)     Conversion Price. The conversion price in effect on any Conversion Date shall be equal to $0.75, subject to adjustment herein (the “Conversion Price”).

 

	 	
c)
	
Mechanics of Conversion.

 

 

1

 

 

Michael Taglich

 

 

i.     Conversion Shares Issuable Upon Conversion. The number of Conversion Shares issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted plus, if so specified in the Conversion Notice, accrued but unpaid interest, and other amounts owing to the Holder under this Note, by (y) the Conversion Price. “Conversion Shares” shall mean, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the terms hereof.

 

ii.     Delivery of Certificate Upon Conversion. Not later than three (3) Trading Days after each Conversion Date (the “Share Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) a certificate or certificates representing the Conversion Shares and (B) a check in the amount of accrued and unpaid interest, if not specified to be converted in the Conversion Notice. 

 

iii.     Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Note, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Notes), not less than such aggregate number of shares of the Common Stock as shall be issuable (taking into account the adjustments and restrictions of Section 3B) upon the conversion of the then outstanding principal amount of this Note. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.

 

iv.     Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note. As to any fraction of a share to which the Holder would otherwise be entitled upon such conversion, the Company shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price or round up to the next whole share.

 

v.     Transfer Taxes. The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided that, the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Note so converted and the Company shall not be required to issue or deliver such certificates unless or until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.

 

Section 3B.     Certain Adjustments.

 

a)     Stock Dividends and Stock Splits. If the Company, at any time after April 29, 2016, while this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of, or payment of interest on, the Notes), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

 

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Michael Taglich

 

 

b)     Calculations. All calculations under this Section 3B shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3B, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.

 

c)     Notice to the Holder of Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 3B, the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.”

 

2.     No Other Amendments. Except as expressly set forth herein, each of the Notes shall remain in full force and effect in accordance with its terms.

 

3.      Counterparts. This Amendment may be executed by the parties hereto in separate counterparts, each of which once so executed and delivered (including by facsimile and other means of electronic transmission) shall be considered an original, but all such counterparts shall together constitute the same instrument.

 

4.      Governing Law. This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York except as to its conflicts of laws principles.

 

 

[Remainder of Page Intentionally Left Blank]

 

 

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Michael Taglich

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment #2 to Promissory Notes as of the day and year first above written.

 

 

	
 

 
	
BRIDGELINE DIGITAL, INC.

 

 

By: ______________________________

Name: Michael Prinn

Title: Chief Financial Officer

	  	  
	  	 
	 	 
	 	                                                                                                
	 	Michael Taglich

 

 

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