Third Omnibus Agreement (See attached) THIRD OMNIBUS AMENDMENT AND REAFFIRMATION AGREEMENT
Exhibit 3
Third Omnibus Agreement
(See attached)
THIRD OMNIBUS AMENDMENT AND REAFFIRMATION AGREEMENT
THIS THIRD OMNIBUS AMENDMENT AND REAFFIRMATION AGREEMENT (this “Agreement”), dated as of September 1, 2017, is by and among Staffing 360 Solutions, Inc. (the “Company”), Faro Recruitment America, Inc. (“Faro”), Monroe Staffing Services, LLC (“Monroe”), Longbridge Recruitment 360 Limited (“Longbridge”), The JM Group (IT Recruitment) Limited (“JM”), PeopleServe, Inc. (“PSI”), PeopleServe PRS, Inc. (“PRS”), and Lighthouse Placement Services, Inc. (“Lighthouse” and together with each of the Company, Faro, Monroe, Longbridge, JM, PSI and PRS, collectively, the “Obligors”) and Xxxxxxx Investment Group, LLC (the “Purchaser”).
1. | Amendments to the Purchase Agreement. |
A. Section 1.1 if hereby amended by amending and restating the following defined terms in their entity with the applicable definitions set forth below:
“Closing” means, collectively or individually, as context may require, the Original Closing, the Second Closing, the Third Closing and the Fourth Closing.
“Closing Date” means, collectively or individually, as context may require, the Original Closing Date, the Second Closing Date, the Third Closing Date and the Fourth Closing Date.
“Maturity Date” means (i) in respect of the Original Subordinated Note, July 25, 2018, or such earlier date upon the acceleration thereof pursuant to Section 9.2 hereof, (ii) in respect of the Second Subordinated Note, June 8, 2019, or such earlier date upon the acceleration thereof pursuant to Section 9.2 hereof; provided, that in the event that the Obligors’ Debt under the MidCap Credit Agreement is at any time hereafter discharged by payment in full in cash or if otherwise consented to in writing by MidCap Senior Agent, the “Maturity Date” in respect of the Second Subordinated Note shall be July 25, 2018, or such earlier date upon the acceleration thereof pursuant to Section 9.2 hereof, (iii) in respect of the Third Subordinated Note, October 2, 2017, or such earlier date upon the acceleration thereof pursuant to Section 9.2 hereof, and (iv) in respect of the Fourth Subordinated Note, October 2, 2017, or such earlier date upon the acceleration thereof pursuant to Section 9.2 hereof.
“Obligations” shall mean all present and future debt, liabilities and obligations of the Company owing to the Purchaser, or any Person entitled to indemnification hereunder, or any of their respective successors, permitted transferees or permitted assigns, arising under or in connection with this Agreement, the Original Subordinated Note, the Second Subordinated Note, the Third Subordinated Note, the Fourth Subordinated Note or any other Note Document.
“Pay Proceeds Letter” means (i) in respect of the Original Subordinated Note, that certain Pay Proceeds Letter, dated the Original Closing Date, executed by the Company and addressed to the Purchaser, (ii) in respect of the Second Subordinated Note, that certain Second Pay Proceeds Letter, dated the Second Closing Date, executed by the Company and addressed to the Purchaser, (iii) in respect of the Third Subordinated Note, that certain Pay Proceeds Letter, dated as of the Third Closing Date, executed by the Company and addressed to the Purchaser, and (iv) in respect of the Fourth Subordinated Note, that certain Pay Proceeds Letter, dated as of the Fourth Closing Date, executed by the Company and addressed to the Purchaser.
“Subordinated Note” means, collectively or individually, as the context may require, the Original Subordinated Note, the Second Subordinated Note, the Third Subordinated Note and the Fourth Subordinated Note.
“Transaction Documents” means collectively, this Agreement, the Original Subordinated Note, the Second Subordinated Note, the Third Subordinated Note, the Fourth Subordinated Note, the Security Documents, the Warrant Documents, the Post-Closing Letter Agreement, the MidCap Intercreditor Agreement, the Acknowledgment and Reaffirmation Agreement, the Pay Proceeds Letter, together with any other guaranty now or hereafter executed by any Obligor in favor of the Purchaser, and all consents, notices, documents, certificates and instruments heretofore, now or hereafter executed by or on behalf of any Obligor, and delivered to the Purchaser in connection with this Agreement, the Security Documents, the Warrant or the transactions contemplated thereby, each as amended, restated, supplemented or otherwise modified from time to time.
B. Section 1.1 of the Purchase Agreement is hereby further amended by adding the following new definitions in appropriate alphabetical order:
“Fourth Closing” shall mean the closing of the purchase and sale of the Fourth Subordinated Note, and the payment of the Fourth Purchase Price therefor, as contemplated by this Agreement and the other Transaction Documents.
“Fourth Closing Date” shall mean the date upon which all conditions in Section 4 of the Third Omnibus Agreement have been satisfied (or waived in writing by Purchaser in its sole discretion) and the Fourth Closing has occurred.
“Fourth Subordinated Note” shall mean, collectively, the 12% Subordinated Secured Promissory Note, dated the Fourth Closing Date, in the principal amount of Five Hundred Fifteen Thousand Dollars ($515,000) issued by the Company to the Purchaser on the Fourth Closing Date pursuant to Section 2.1(c), and each other subordinated promissory note now or hereafter delivered to the Purchaser in substitution, replacement or exchange thereof, in each case as amended, restated, supplemented or modified from time to time pursuant to the provisions of this Agreement.
“Third Omnibus Agreement” means that certain Third Omnibus and Reaffirmation Agreement, dated as of September 1, 2017, by and among the Obligors and the Purchaser as may be amended, restated, supplemented or otherwise modified from time to time.
C. Section 2 of the Purchase Agreement is hereby amended by adding a new Section 2.1(d) immediately following Section 2.1(c) to read in its entirety as follows:
D. Section 2 of the Purchase Agreement is hereby further amended by deleting the first sentence of Section 2.3(b) in the entirety and replacing it with the following:
2.3(b) Notwithstanding anything to the contrary contained in Original Subordinated Note or any other Subordinated Note or Transaction Document, the Purchaser shall have the sole option (exercised in its sole discretion) to receive, in lieu of any cash interest payment otherwise due and payable under any Subordinated Note (other than the Third Subordinated Note and the Fourth Subordinated Note, which shall be cash pay interest only), up to one-half (50%) of such cash interest payment in the form of duly authorized, validly issued, fully paid and non-assessable shares of Common Stock of the Company, at the conversion rate of $1.50 per share of Common Stock and on the terms as further specified in the Original Subordinated Note and the Second Subordinated Note.
E. Amendments to Security Documents.
(i) The Security Agreement is hereby amended as follows: (i) the term “Secured Obligations” as defined in the Security Agreement shall be deemed to include, without limitation, the following additional obligations (a) all obligations, covenants, agreements and liabilities, of the Company and the other Obligors under the Transaction Documents (including, without limitation, the Fourth Subordinated Note), and (b) the obligation of the Company to pay all amounts when due under the Fourth Subordinated Note and the other Transactions Documents including, without limitation, all principal, accrued interest, fees and other amounts, (ii) all references in the Security Agreement to the “Note” shall be deemed to also refer to the Fourth Subordinated Note and (ii) all references in the Security Agreement to the “Note Documents” shall be deemed to refer to the Transaction Documents as defined in the Purchase Agreement as amended hereby.
(ii) The Pledge Agreement is hereby amended as follows: (i) the term “Secured Obligations” as defined in the Pledge Agreement shall be deemed to include, without limitation, the following additional obligations (a) all obligations, covenants, agreements and liabilities, of the Company and the other Obligors under the Transaction Documents (including, without limitation, the Fourth Subordinated Note and (b) the obligation of the Company to pay all amounts when due under the Fourth Subordinated Note and the other Transactions Documents including, without limitation, all principal, accrued interest, fees and other amounts, (ii) all references in the Pledge Agreement to the “Note” shall be deemed to also refer to the Fourth Subordinated Note and (ii) all references in the Pledge Agreement to the “Note Documents” shall be deemed to refer to the Transaction Documents as defined in the Purchase Agreement as amended hereby.
A. No Injunction, etc. No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed before any court, governmental agency or legislative body to enjoin, restrain, or prohibit, or to obtain substantial damages in respect of, or which is related to or arises out of, this Agreement or the Fourth Subordinated Note or the consummation of the transactions contemplated hereby or thereby, or which, in Purchaser’s sole discretion, would make it inadvisable to consummate the transactions contemplated by this Agreement or the Fourth Subordinated Note.
B. Documentation. The Purchaser shall have received, on or prior to the Fourth Closing Date, the following, each in form and substance satisfactory to the Purchaser and its counsel:
(i) duly executed counterparts of this Agreement;
(ii) the Fourth Subordinated Note in the principal amount of Five Hundred Fifteen Thousand Dollars ($515,000) duly executed and issued by the Company to the Purchaser;
(iii) the Pay Proceeds Letter, dated the date hereof (the “Fourth Pay Proceeds Letter”) duly executed by the Company, directing application of the proceeds of the funded Fourth Purchase Price to (A) the payment in advance of accrued interest (calculated at the non-default rate) in the amount of $5,000 on the Fourth Subordinated Note during the period from the date hereof through October 1, 2017, (B) the payment of fees and expenses of the Purchaser incurred in connection with the negotiation and closing of the Fourth Subordinated Note, and a commitment fee in respect of the advance evidenced by the Fourth Subordinated Note, in the aggregate $10,000, (C) the remaining $500,000 balance of the Fourth Advance as specified in the Fourth Pay Proceeds Letter; and
(v) delivery to Purchaser of a copy of resolutions adopted by the governing board of the Company and each Subsidiary Guarantor, authorizing the execution, delivery and performance of this Agreement, the Fourth Subordinated Note (in the case of the Company) and other related transaction documents;
X. XxxXxx Approval. Purchaser shall have received evidence satisfactory to it of the consent of MidCap Funding X Trust to the incurrence of Debt under the Fourth Subordinated Note pursuant to the terms and conditions of an amendment to the MidCap Intercreditor Agreement in a form and substance satisfactory to the Purchaser in its sole discretion.
D. No Material Adverse Effect. No Material Adverse Effect has occurred since December 31, 2016.
E. No Default, Etc. No Default or Event of Default shall exist.
6. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by telecopy or other electronic transmissions, e.g. .pdf), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.
7. This Agreement shall be deemed and shall constitute a “Note Document” and “Transaction Document” as such terms are defined in the Purchase Agreement. Except as modified and amended herein, the Purchase Agreement, the Security Agreement and Pledge Agreement remain in full force and effect.
8. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS).
[SIGNATURE PAGES TO FOLLOW]
IN WITNESS WHEREOF, each of the parties hereto has caused this Third Omnibus Amendment and Reaffirmation Agreement to be duly executed by its authorized officers, and the Purchaser, has caused the same to be accepted by its authorized officer, as of the day and year first above written.
COMPANY: | ||
STaffing 360 solutions, inc. | ||
By: | /s/ Xxxxxxx Xxxxx | |
Name: Xxxxxxx Xxxxx | ||
Title: Executive Chairman | ||
SUBSIDIARY GUARANTORS: | ||
FARO RECRUITMENT AMERICA, INC. | ||
By: | /s/ Xxxxxxx Xxxxx | |
Name: Xxxxxxx Xxxxx | ||
Title: Executive Chairman | ||
MONROE STAFFING SERVICES, LLC | ||
By: | /s/ Xxxxxxx Xxxxx | |
Name: Xxxxxxx Xxxxx | ||
Title: Executive Chairman | ||
STAFFING 360 SOLUTIONS LIMITED | ||
By: | /s/ Xxxxxxx Xxxxx | |
Name: Xxxxxxx Xxxxx | ||
Title: Executive Chairman | ||
LONGBRIDGE RECRUITMENT 360 LIMITED | ||
By: | /s/ Xxxxxxx Xxxxx | |
Name: Xxxxxxx Xxxxx | ||
Title: Executive Chairman |
THE JM GROUP (IT RECRUITMENT) LIMITED | ||
By: | /s/ Xxxxxxx Xxxxx | |
Name: Xxxxxxx Xxxxx | ||
Title: Executive Chairman | ||
PEOPLESERVE, INC. | ||
By: | /s/ Xxxxxxx Xxxxx | |
Name: Xxxxxxx Xxxxx | ||
Title: Executive Chairman | ||
PEOPLESERVE PRS, INC. | ||
By: | /s/ Xxxxxxx Xxxxx | |
Name: Xxxxxxx Xxxxx | ||
Title: Executive Chairman | ||
LIGHTHOUSE PLACEMENT SERVICES, INC. | ||
By: | /s/ Xxxxx Xxxxxx | |
Name: Xxxxx Xxxxxx | ||
Title: Secretary and Treasurer | ||
PURCHASER: | ||
XXXXXXX INVESTMENT GROUP, LLC | ||
By: | /s/ Xxxxxxx X. Xxxxxxx | |
Name: Xxxxxxx X. Xxxxxxx | ||
Title: Chief Executive Officer |