EXHIBIT 6
HPA ASSOCIATES, LLC
c/o Asset Management Associates of New York, Inc.
X.X. Xxx 0000
Xxxxxxxxxxx, XX 00000
June 18, 1997
EMPIRE OF CAROLINA, INC.
0000 Xxxxxx Xxxx
Xxxxxx Xxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx,
General Counsel and Secretary
COMMONWEALTH ASSOCIATES, INC.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Securities Purchase Agreement, dated as of May 5, 1997, as amended
by and among
Empire of Carolina, Inc., HPA Associates, LLC and EMP Associates LLC
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Gentlemen:
We refer to the above-captioned agreement (the "Securities Purchase
Agreement"); terms that are defined in the Securities Purchase Agreement are
used with the same meaning in this letter. In the Additional Financing pursuant
to the Securities Purchase Agreement, the Company has previously agreed to issue
500,000 shares of the Company's Series A Preferred Stock to the Additional
Preferred Stock Purchasers for a total consideration, before the deduction of
commissions and other expenses, of $5 million in a private placement with
respect to which Commonwealth Associates, Inc. ("Commonwealth") is serving as
placement agent. In connection with the closing of the Permanent Financing under
the Securities Purchase Agreement, HPA has agreed to convert its Note, in the
amount of $2,500,000, into 250,000 shares of Series A Preferred Stock and will
receive certain allocations of Warrants in that connection and otherwise.
In consideration of the Company's and Commonwealth's agreement to
allocate an additional $200,000 of Series A Preferred Stock (or 20,000 shares of
Series A Preferred Stock), plus 20,000 Warrants, to Sintra Fund Ltd., an
additional $80,000 of Series A Preferred Stock (or 8,000 shares of Series A
Preferred Stock), plus 8,000 Warrants, to Mr. Xxxx Xxxx and $100,000 of Series A
Preferred Stock (or 10,000 shares of Series A Preferred Stock), plus 10,000
Warrants, to Worldwide Fabrics L.P. in the Additional Financing, HPA agrees that
at the final closing of the Additional Financing, HPA shall, at Commonwealth's
request, transfer up to 38,000 shares of Series A Preferred Stock, and up to
38,000 Warrants (at a ratio of 1 Warrant for each share of Series A Preferred
Stock), to the Company for reissuance to such persons as the Company and
Commonwealth designate as purchasers thereof
2
pursuant to the Company's Placement Agency Agreement with Commonwealth, in
consideration of the receipt of $10 for each such share and Warrant transferred,
payable either by the Company or Commonwealth as they may determine.
If you are in agreement with the foregoing, please countersign this
letter below.
Very truly yours,
HPA ASSOCIATES, LLC
By: /s/ Xxxxxxx X. Xxxxxx
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Name:
Title:Managing Director
AGREED TO AND ACCEPTED:
EMPIRE OF CAROLINA, INC.
By: /s/ Xxxxxxxx Xxxxxx
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Xxxxxxxx Xxxxxx
Secretary and General Counsel
COMMONWEALTH ASSOCIATES, INC.
By: /s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxx
Title: Managing Director
