Item
1.01 Entry Into a Material Definitive Agreement.
Exchange
Agreement
On
May 6, 2021, Staffing 360 Solutions, Inc. (the “Company”), entered into an Exchange Agreement (the “Exchange Agreement”)
with Jackson Investment Group, LLC (“JIG”), pursuant to which, among other things, JIG agreed to exchange 6,172 shares of
the Company’s Series E Convertible Preferred Stock, par value $0.00001 per share, and 1,493 shares of the Company’s Series
E-1 Convertible Preferred Stock, par value $0.00001 per share (collectively, the “Series E Preferred Stock”) held by JIG,
for an equivalent number of shares of the Company’s Series G Convertible Preferred Stock, par value $0.00001 per share and Series
G-1 Convertible Preferred Stock, par value $0.00001 per share (collectively, the “Series G Preferred Stock”, and such transaction,
the “Exchange”). The Exchange was consummated on May 6, 2021.
The
foregoing description of the Exchange Agreement does not purport to be complete and is qualified in its entirety by reference to the
full text of the Exchange Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
The
Series G Preferred Stock ranks senior to each of the Company’s common stock, par value $0.00001 (“Common Stock”),
Series A Convertible Preferred Stock, Series B Convertible Preferred Stock and Series C Convertible Preferred Stock, and any other
classes and series of stock of the Company now or hereafter authorized, issued or outstanding, which by their terms expressly
provide that they are junior to the Series G Preferred Stock or which do not specify their rank (which includes the Series
F Convertible Preferred Stock). Each share of Series G Preferred Stock is initially convertible into 1,000 shares of
Common Stock at any time from and after, (i) with respect to the Series G Convertible Preferred Stock, the earlier of October
31, 2022 or the occurrence of a Preferred Default (as defined in the Certificate of Designation of Series G Preferred Stock
(the “Certificate of Designation”)) and, (ii) with respect to the Series G-l Convertible Preferred Stock, October
31, 2020. A holder of Series G Preferred Stock is not required to pay any additional consideration in exchange for conversion
of the Series G Preferred Stock into the Company’s Common Stock.
The
Series G Convertible Preferred Stock carries monthly dividend rights of (a) cash dividends accruing (i) at an annual rate per share equal
to 12% from the date of issuance (plus any accrued dividends with respect to the Series E Preferred Stock unpaid as of the date of the
Exchange) and (ii) 17% after the occurrence of a Preferred Default, and (b) a dividend payable in shares of Series G-1 Convertible Preferred
Stock. The shares of Series G-1 Convertible Preferred Stock have all the same terms, preferences and characteristics as the Series G
Convertible Preferred Stock (including, without limitation, the right to receive cash dividends), except Series G-1 Convertible Preferred
Stock are mandatorily redeemable by the Company within thirty (30) days after written demand received from any holder at any time after
the earlier of the occurrence of a Preferred Default or September 30, 2022, for a cash payment equal to the Liquidation Value (as defined
in the Certificate of Designation) plus any accrued and unpaid dividends thereon.
The
Series G Preferred Stock shall vote on an “as converted” basis on all matters submitted to the holders of Common Stock
for approval.
The
foregoing description of the Series G Preferred Stock does not purport to be complete and is qualified in its entirety by reference
to the complete text of the Certificate of Designation, which is attached hereto as Exhibit 3.1 and incorporated herein by
reference.
Side
Letter Agreement regarding Amendment to NPA
On
May 6, 2021, pursuant to a letter agreement (the “Side Letter Agreement Regarding Amendment to NPA”) between the Company,
certain of its subsidiaries (collectively with the Company, the “Company Parties”) and JIG, the Company Parties and JIG agreed
to update and conform certain terms of the Second Amended and Restated Note Purchase Agreement, dated as of October 26, 2020 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the “NPA”) in connection with the Exchange. The
foregoing description of the Side Letter Agreement Regarding Amendment to NPA does not purport to be complete and is qualified in its
entirety by reference to the full text of the Side Letter Agreement Regarding Amendment to NPA, a copy of which is attached hereto as
Exhibit 10.2 and incorporated herein by reference.
Limited
Waiver and Agreement Letter
On
May 6, 2021, pursuant to a letter agreement (the “Limited Waiver and Agreement Letter”) between the Company and JIG,
JIG agreed to extend its earlier agreement (previously disclosed in the Company’s Current Report on Form 8-K, filed on February
16, 2021) to not convert JIG’s convertible securities until June 30, 2021. The foregoing description of the Limited
Waiver and Agreement Letter does not purport to be complete and is qualified in its entirety by reference to the full text of
the Limited Waiver and Agreement Letter, a copy of which is attached hereto as Exhibit 10.3 and incorporated herein by reference.