Exhibit 10.2

 

EXECUTION VERSION

WARRANT AGREEMENT

THIS WARRANT AGREEMENT (this “Agreement”), dated as of January 25, 2017 (the
“Effective Date”), is by and between Staffing 360 Solutions, Inc., a Nevada
corporation (the “Company”), and Jackson Investment Group, LLC, a Georgia
limited liability company (together with its successors and assigns, the
“Holder”).

WHEREAS, this Warrant Agreement (the “Warrant”) to purchase shares of the
Company’s common stock, par value $0.00001 per share (“Common Stock”), is being
issued to the Holder in connection with the Holder’s execution of a Note and
Warrant Purchase Agreement for the purchase of a $7,400,000 of 6% Subordinated
Secured Note on this date;

WHEREAS, the Company desires to provide for the form and provisions of the
Warrant, the terms upon which they shall be issued and exercised and the
respective rights, limitation of rights and immunities of the Company and the
Holder;

WHEREAS, all acts and things have been done and performed which are necessary to
make the Warrant, when issued, the valid, binding and legal obligations of the
Company, and to authorize the execution and delivery of this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the
parties hereto agree as follows:

Article I

DEFINITIONS

Section 1.1 Definition of Terms.  As used in this Agreement, the following
capitalized terms shall have the following respective meanings:

(a) “Additional Common Stock” has the meaning set forth in Section 4.1 hereof.

(b) “Adjustment Event” has the meaning set forth in Section 4.2 hereof.

(c) “Affiliate” has the meaning set forth in Rule 12b-2 of the Exchange Act.

(d) “Appropriate Officer” has the meaning set forth in Section 2.2(a) hereof.

(e) “Board of Directors” means the Board of Directors of the Company.

(f) “Business Day” means any day other than a Saturday, Sunday or any other day
on which The NASDAQ Stock Market is closed for trading.

(g) “Common Stock” has the meaning set forth in the Recitals, and shall include
any successor security as a result of any recapitalization, reorganization,
reclassification or similar transaction involving the Company.

(h) “Convertible Securities” means any securities (directly or indirectly)
convertible into or exchangeable for Common Stock, but excluding Options.

 

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(i) “Current Sale Price” of the Common Stock on any date of determination means:

(i) if the Common Stock is listed on the New York Stock Exchange or The NASDAQ
Stock Market on such date, the average closing sale price per share of the
Common Stock (or if no closing sale price is reported, the average of the
closing bid and closing ask prices or, if more than one in either case, the
average of the average closing bid and the average closing ask prices) for the
ten (10) consecutive trading days immediately prior to such date of
determination, as reported by the New York Stock Exchange or The NASDAQ Stock
Market, as applicable;

(ii) if the Common Stock is not listed on the New York Stock Exchange or The
NASDAQ Stock Market on such date, but is listed on another U.S. national or
regional securities exchange, the average closing sale price per share of the
Common Stock (or if no closing sale price is reported, the average of the high
bid and low asked prices or, if more than one in either case, the average of the
average high bid and low asked prices) for the ten (10) consecutive trading days
immediately prior to such date of determination, as reported in composite
transactions for such securities exchange (or, if more than one, the principal
securities exchange on which the Common Stock is traded);

(iii) if the Common Stock is not listed on a U.S. national or regional
securities exchange, but is traded on an over-the-counter market, the average
last quoted sale price for the Common Stock (or, if no sale price is reported,
the average of the high bid and low asked price for such date) for the ten (10)
consecutive trading days immediately prior to such date of determination, in the
over-the-counter market as reported by OTC Markets Group Inc. or other similar
organization; or

(iv) in all other cases, as determined in the reasonable judgment of the Board
of Directors based on a valuation by a financial advisor with recognized
expertise in valuations of companies comparable to the Company.

The Current Sale Price shall be determined without reference to early hours,
after hours or extended market trading.

The Current Sale Price shall be appropriately adjusted by the Board of Directors
in good faith if the “ex date” (as hereinafter defined) for any event (other
than the issuance or distribution requiring such computation) occurs during the
ten (10) consecutive trading days immediately prior to the day as of which the
Current Sale Price is being determined.

For these purposes the term “ex date”, when used:

(i) with respect to any issuance or distribution, means the first date on which
the Common Stock trades regular way on the relevant exchange or in the relevant
market from which the sale price or bid and ask prices, as applicable, were
obtained without the right to receive such issuance or distribution;

(ii) with respect to any subdivision or combination of shares of Common Stock,
means the first date on which the Common Stock trades regular way on such
exchange or in such market after the time at which such subdivision or
combination becomes effective; and

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(iii) with respect to any tender or exchange offer, means the first date on
which the Common Stock trades regular way on such exchange or in such market
after the expiration time of such offer.

The foregoing adjustments shall be made to the Current Sale Price in accordance
with the terms hereof, as may be necessary or appropriate to effectuate the
intent of this Agreement and to avoid unjust or inequitable results as
determined in good faith by the Board of Directors.

(j) “Date of Issuance” has the meaning set forth in Section 2.1(a) hereof.

(k) “Effective Date” has the meaning set forth in the preamble.

(l) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(m) “Exercise Date” means any date, on or prior to the expiration of the
Exercise Period, on which the Holder exercises the right to purchase the Warrant
Exercise Shares, in whole or in part, pursuant to and in accordance with the
terms and conditions described herein.

(n) “Exercise Form” has the meaning set forth in Section 3.3(d) hereof.

(o) “Exercise Price” has the meaning set forth in Section 3.1 hereof.

(p) “Exercise Period” has the meaning set forth in Section 3.2 hereof.

(q) “Fully Diluted” means all Common Stock outstanding as of the applicable
measurement date together with all Common Stock then issuable upon (i) the
conversion of Convertible Securities at the then applicable conversion rate, and
(ii) the exercise of any Options; provided that, for purposes of clauses (i) and
(ii), all conditions to the convertibility and/or exercisability of Convertible
Securities and Options of the Company, shall be deemed to have been satisfied.

(r) “Governmental Authority” means any (i) government, (ii) governmental or
quasi‑governmental authority of any nature (including any governmental agency,
branch, department, official or entity and any court or other tribunal) or
(iii) body exercising, or entitled to exercise, any administrative, executive,
judicial, legislative, police, regulatory or taxing authority or power of any
nature, in each case, whether federal, state, local, municipal, foreign,
supranational or of any other jurisdiction.

(s) “Holder” has the meaning set forth in the preamble hereof.

(t) “Law” means all laws, statutes, rules, regulations, codes, injunctions,
decrees, orders, ordinances, registration requirements, disclosure requirements
and other pronouncements having the effect of law of the United States, any
foreign country or any domestic or foreign state, county, city or other
political subdivision or of any Governmental Authority.

(u) “Lighthouse Notes” means that certain “Unsecured Convertible Promissory
Note, dated July 8, 2015, made by Staffing 360 Solutions, Inc. in favor of
Alison Fogel and David Fogel,” and that certain “Unsecured Convertible
Promissory Note, dated July 8, 2015, made by Staffing 360 Solutions, Inc. in
favor of Alison Fogel and David Fogel”.

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(v) “Options” means any warrants or other rights or options to subscribe for or
purchase Common Stock or Convertible Securities.

(w) “Organic Change” means any recapitalization, reorganization,
reclassification, consolidation, merger, sale of all or substantially all of the
Company’s equity securities or assets or other transaction, in each case which
is effected in such a way that the holders of Common Stock are entitled to
receive (either directly or upon subsequent liquidation) cash, stock, securities
or other assets or property with respect to or in exchange for Common Stock,
other than a transaction which triggers an adjustment pursuant to Sections 4.1,
4.2 or 4.3.

(x) “Person” means any individual, firm, corporation, partnership, limited
partnership, limited liability company, association, indenture trustee,
organization, joint stock company, joint venture, estate, trust, governmental
unit or any political subdivision thereof, or any other entity (as such term is
defined in the Bankruptcy Code).

(y) “Pro Rata Repurchase Offer” means any offer to purchase shares of Common
Stock by the Company or any Affiliate thereof pursuant to (i) any tender offer
or exchange offer subject to Section 13(e) or 14(e) of the Exchange Act or
Regulation 14E promulgated thereunder or (ii) any other offer available to
substantially all holders of Common Stock to purchase or exchange their shares
of Common Stock, in the case of both (i) or (ii), whether for cash, shares of
capital stock of the Company, other securities of the Company, evidences of
indebtedness of the Company or any other Person, or any other property
(including, without limitation, shares of capital stock, other securities or
evidences of indebtedness of a Subsidiary), or any combination thereof, effected
while the Warrant is outstanding.  The “effective date” of a Pro Rata Repurchase
Offer shall mean the date of acceptance of shares for purchase or exchange by
the Company under any tender or exchange offer which is a Pro Rata Repurchase
Offer or the date of purchase with respect to any Pro Rata Repurchase Offer that
is not a tender or exchange offer.

(z) “Registered Holder” has the meaning set forth in Section 2.3(d) hereof.

(aa) “SEC” means the Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act or the Exchange Act.

(bb) “Securities Act” means the Securities Act of 1933, as amended.

(cc) “Series D Stock Purchase Agreement” means that certain “Stock Purchase
Agreement, dated June 24, 2016, by and between Staffing 360 Solutions, Inc. and
Discover Growth Fund,” as amended on January 25, 2017.

(dd) “Subsidiary” means, with respect to any Person, any corporation,
partnership, limited liability company or other business entity of which (i) if
a corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof, or (ii) if a partnership, limited liability company or other business
entity (other than a corporation), a majority of the partnership, limited
liability company or other similar ownership interest thereof is at the time
owned or controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person or a combination thereof.  For purposes
hereof, a Person or Persons shall be deemed to have a majority ownership
interest in a partnership, limited liability company or other business entity if
such Person or Persons shall be allocated a majority of partnership, limited
liability company or other business entity gains or losses or shall be or

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control the general partner, the managing member or entity performing similar
functions of such partnership, limited liability company or other business
entity.

(ee) “Transfer” means any transfer, sale, assignment or other disposition.

(ff) “Warrant Exercise Shares” means the shares of Common Stock issued upon the
exercise of the Warrant.

(gg) “Warrant Register” has the meaning set forth in Section 2.3(c) hereof.

(hh) “Warrant” has the meaning set forth in the Recitals.

Section 1.2 Rules of Construction.

(a) The singular form of any word used herein, including the terms defined in
Section 1.1 hereof, shall include the plural, and vice versa.  The use herein of
a word of any gender shall include correlative words of all genders.

(b) Unless otherwise specified, references to Articles, Sections and other
subdivisions of this Agreement are to the designated Articles, Sections and
other subdivision of this Agreement as originally executed.  The words “hereof,”
“herein,” “hereunder” and words of similar import refer to this Agreement as a
whole.

(c) References to “$” are to dollars in lawful currency of the United States of
America.

(d) The Exhibits attached hereto are an integral part of this Agreement.

Article II

WARRANTS

Section 2.1 Issuance of Warrant.

(a) On the terms and subject to the conditions of this Agreement and in
accordance with the terms of the Note and Warrant Purchase Agreement, on the
Effective Date (such date, the “Date of Issuance”), the Company will issue the
Warrant to Holder.

(b) The maximum number of shares of Common Stock issuable pursuant to exercise
of the Warrant shall be 3,150,000 shares, as such amount may be adjusted from
time to time pursuant to this Agreement.

(c) Unless otherwise provided in this Agreement, the Warrant shall be duly
executed on behalf of the Company and issued on or as soon as reasonably
practicable after the Effective Date.

Section 2.2 Form of Warrant; Execution of Warrant Certificate.

(a) Subject to Section 5.1 of this Agreement, a Warrant shall be issued through
delivery of a Warrant certificate in substantially the form set forth in Exhibit
A attached hereto, duly executed on behalf of the Company.  The Warrant
certificates may bear such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Agreement and may have
such letters, numbers or other marks of identification or designation

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and such legends or endorsements placed thereon as are consistent with the
provisions of this Agreement, or as may be required to comply with any Law or
with any rules or regulations made pursuant thereto or with any rules of any
securities exchange or as may be determined (in a manner consistent with the
provisions of this Agreement) by the Chief Executive Officer or Chief Financial
Officer of the Company (each, an “Appropriate Officer”) executing such Warrant
certificate, as evidenced by their execution of the Warrant certificates.  Such
signatures may be manual or facsimile signatures of such authorized officers and
may be imprinted or otherwise reproduced on the Warrant certificate.

(b) In case any Appropriate Officer of the Company who shall have signed the
Warrant certificate (either manually or by facsimile signature) shall cease to
be such Appropriate Officer before such Warrant certificate so signed shall have
been delivered or disposed of by or on behalf of the Company, such Warrant
certificate nevertheless may be delivered or disposed of with the same force and
effect as though such Appropriate Officer had not ceased to be such Appropriate
Officer of the Company; and any Warrant certificate may be signed on behalf of
the Company by any person who, at the actual date of the execution of such
Warrant certificate, shall be a proper Appropriate Officer of the Company to
sign such Warrant certificate, although at the date of the execution of this
Agreement any such person was not such Appropriate Officer.

(c) The Warrant certificate shall be, and shall remain, subject to the
provisions of this Agreement until such time as all of the Warrant evidenced
thereby shall have been duly exercised or shall have expired or been cancelled
in accordance with the terms hereof.

Section 2.3 Registration and Countersignature.

(a) Upon issuance of the Warrant certificate by the Company, the Company shall
record such Warrant certificate, including the Registered Holder thereof, in the
Warrant Register.  

(b) No Warrant certificate shall be valid for any purpose, and no Warrant
evidenced thereby shall be exercisable, until such Warrant certificate has been
signed by the manual or facsimile signature of the Company.  Such signature by
the Company upon any Warrant certificate shall be conclusive evidence that such
Warrant certificate so executed has been duly issued hereunder.

(c) The Company shall keep or cause to be kept, at an office designated for such
purpose, books (the “Warrant Register”) in which, subject to such reasonable
regulations as it may prescribe, it shall register the Warrant certificates, and
exercises, exchanges, cancellations and transfers of outstanding Warrants in
accordance with the procedures set forth in Section 5.1 of this Agreement.  

(d) Prior to due presentment for registration of transfer or exchange of the
Warrant in accordance with the procedures set forth in this Agreement, the
Company may deem and treat the person in whose name such Warrant is registered
upon the Warrant Register (the “Registered Holder” of such Warrant) as the
absolute owner of such Warrant, for all purposes including, without limitation,
for the purpose of any exercise thereof (subject to Section 3.3(d)), any
distribution to the Holder thereof and for all other purposes, and the Company
shall not be affected by notice to the contrary.

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Article III

TERMS AND EXERCISE OF WARRANTS

Section 3.1 Exercise Price.  Commencing on a date that is six (6) months
following the Date of Issuance, the Warrant shall entitle the Registered Holder
thereof, subject to the provisions of this Agreement, the right to purchase from
the Company up to 3,150,000 shares of Common Stock at the price of $1.35 per
share, subject to adjustment from time to time as provided in Article IV (the
“Exercise Price”).

Section 3.2 Exercise Period.  The Warrant may be exercised by the Registered
Holder thereof, in whole or in part (but not as to a fractional share of Common
Stock), at any time and from time to time commencing six months following the
Date of Issuance and prior to 5:00 P.M., New York time on the fifth (5th)
anniversary of the Effective Date (the “Exercise Period”); provided that
Registered Holder shall be able to exercise its Warrant only if the exercise of
such Warrant is exempt from, or in compliance with, any applicable registration
requirements of the Securities Act and the applicable securities laws of the
states in which the Registered Holder of the Warrant or other persons to whom it
is proposed that the Warrant Exercise Shares be issued, on exercise of the
Warrant reside.  To the extent that the Warrant or portion thereof is not
exercised prior to the expiration of the Exercise Period, it shall be
automatically cancelled with no action by any Person, and with no further rights
thereunder, upon such expiration.

Section 3.3 Method of Exercise.

(a) In connection with the exercise of the Warrant, (i) the Registered Holder
shall surrender such Warrant (or portion thereof) to the Company for the number
of Warrant Exercise Shares being exercised, up to the aggregate number of
Warrant Exercise Shares for which the Warrant is exercisable and (ii) the
Exercise Price shall be paid, at the option of the Holder, in United States
dollars by personal, certified or official bank check payable to the Company, or
by wire transfer to an account specified in writing by the Company to such
Holder, in either case in immediately available funds in an amount equal to the
aggregate Exercise Price for such Warrant Exercise Shares as specified in the
Exercise Form.

(b) Upon exercise of the Warrant, the Company shall as promptly as practicable
calculate and transmit the number of shares of Common Stock issuable in
connection with any exercise.  

(c) Subject to the terms and conditions of this Agreement, the Holder of the
Warrant may exercise, in whole or in part, such Holder’s right to purchase the
Warrant Exercise Shares issuable upon exercise of the Warrant by properly
completing and duly executing the exercise form for the election to exercise the
Warrant (an “Exercise Form”) substantially in the form of Exhibit B.

(d) Any exercise of the Warrant pursuant to the terms of this Agreement shall be
irrevocable as of the date of delivery of the Exercise Form and shall constitute
a binding agreement between the Holder and the Company, enforceable in
accordance with the terms of this Agreement.

(e) Upon receipt of the Warrant certificate with the properly completed and duly
executed Exercise Form pursuant to Section 3.3(c), the Company shall promptly:

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(i) examine the Exercise Form and all other documents delivered to it by or on
behalf of the Holder as contemplated hereunder to ascertain whether or not, on
their face, such Exercise Form and any such other documents have been executed
and completed in accordance with their terms and the terms hereof;

(ii) if an Exercise Form or other document appears, on its face, to have been
improperly completed or executed or some other irregularity in connection with
the exercise of the Warrant exists, endeavor to inform the appropriate parties
(including the person submitting such instrument) of the need for fulfillment of
all requirements, specifying those requirements which appear to be unfulfilled;

(iii) resolve any reconciliation problems between the information provided on
any Exercise Form received and the information on the Warrant Register; and

(iv) liaise with the transfer agent for the Common Stock for the issuance and
registration of the number of shares of Common Stock issuable upon exercise of
the Warrant in accordance with the Exercise Form.

The Company reserves the right reasonably to reject any Exercise Form that it
determines is not in proper form or for which any corresponding agreement by the
Company to exchange would, in the opinion of the Company, be
unlawful.  Moreover, the Company reserves the absolute right to waive any of the
conditions to any particular exercise of the Warrant or any defects in the
Exercise Form(s) with regard to any particular exercise of the Warrant.  

Section 3.4 Issuance of Common Stock.

(a) Upon the effectiveness of any exercise of the Warrant pursuant to Section
3.3, the Company shall, subject to Section 3.6, promptly at its expense, and in
no event later than five (5) Business Days after the Exercise Date, cause to be
issued as directed by the Holder the total number of whole shares of Common
Stock for which the Warrant is being exercised (as the same may be hereafter
adjusted pursuant to Article IV) in such denominations as are requested by the
Holder as set forth below, registered as directed by the Holder in accordance
with the practices and procedures of the Company .

(b) The Warrant Exercise Shares shall be deemed to have been issued at the time
at which all of the conditions to such exercise have been fulfilled, and the
Holder, or other person to whom the Holder shall direct the issuance thereof,
shall be deemed for all purposes to have become the holder of such Warrant
Exercise Shares at such time.

Section 3.5 Reservation of Shares.

(a) The Company covenants that during the Exercise Period, the Company shall at
all times reserve and keep available out of its authorized but unissued shares
of Common Stock solely for the purpose of issuance upon the exercise of the
Warrant, a number of shares of Common Stock equal to the aggregate Warrant
Exercise Shares issuable upon the exercise of the Warrant.  The Company shall
use commercially reasonable efforts to take all such actions as may be necessary
to assure that all such shares of Common Stock may be so issued without
violating the Company’s governing documents, any agreements to which the Company
is a party on the date hereof, any requirements of any national securities
exchange upon which shares of Common Stock may be listed or any applicable
Laws.  The Company shall not take any action which would

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cause the number of authorized but unissued shares of Common Stock to be less
than the number of such shares required to be reserved hereunder for issuance
upon exercise of the Warrant.

(b) The Company covenants that it will take such actions as may be necessary or
appropriate in order that all Warrant Exercise Shares issued upon exercise of
the Warrant will, upon issuance in accordance with the terms of this Agreement,
be fully paid and non-assessable and free from any and all (i) security
interests created by or imposed upon the Company and (ii) taxes, liens and
charges with respect to the issuance thereof.  If at any time prior to the
expiration of the Exercise Period the number and kind of authorized but unissued
shares of the Company’s capital stock shall not be sufficient to permit exercise
in full of the Warrant, the Company will promptly take such corporate action as
may, in the opinion of its counsel, be reasonably necessary (including seeking
stockholder approval, if required) to increase its authorized but unissued
shares to such number of shares as shall be sufficient for such purposes.  The
Company agrees that its issuance of the Warrant shall constitute full authority
to its officers who are charged with the issuance of Warrant Exercise Shares to
issue Warrant Exercise Shares upon the exercise of the Warrant.  Without
limiting the generality of the foregoing, the Company will not increase the
stated or par value per share, if any, of the Common Stock above the Exercise
Price per share in effect immediately prior to such increase in stated or par
value.

(c) The Company represents and warrants to the Holder that the issuance of the
Warrant and the issuance of Warrant Exercise Shares upon exercise thereof in
accordance with the terms hereof will not constitute a breach of, or a default
under, any other material agreements to which the Company is a party on the date
hereof.

Section 3.6 Fractional Shares.  Notwithstanding any provision to the contrary
contained in this Agreement, the Company shall not be required to issue any
fraction of a share of its Common Stock in connection with the exercise of the
Warrant, and in any case where the Holder of the Warrant would, except for the
provisions of this Section 3.6, be entitled under the terms thereof to receive a
fraction of a share upon the exercise of the Warrant, the Company shall, upon
the exercise of such Warrant, issue or cause to be issued only the largest whole
number of Warrant Exercise Shares issuable upon such exercise (and such fraction
of a share will be disregarded, and the Holder shall not have any rights or be
entitled to any payment with respect to such fraction of a share); provided that
the number of whole Warrant Exercise Shares which shall be issuable upon the
contemporaneous exercise of multiple warrants by the Holder shall be computed on
the basis of the aggregate number of Warrant Exercise Shares issuable upon
exercise of all such warrants by such Holder.

Section 3.7 Close of Books.  The Company shall not close its books against the
transfer of the Warrant or any Warrant Exercise Shares in any manner which
interferes with the timely exercise of the Warrant.  

Section 3.8 Payment of Taxes.  In connection with the exercise of the Warrant,
the Company shall not be required to pay any tax or other charge imposed in
respect of any transfer involved in the Company’s issuance and delivery of
shares of Common Stock (including certificates therefor) (or any payment of cash
or other property in lieu of such shares) to any recipient other than the Holder
of the Warrant, and in case of any such tax or other charge, the Company shall
not be required to issue or deliver any such shares (or cash or other property
in lieu of such shares) until (x) such tax or charge has been paid or an amount
sufficient for the payment thereof has been delivered to the Company or (y) it
has been established to the Company’s satisfaction that any such tax or other
charge that is or may become due has been paid.  

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Article IV

ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF
WARRANT EXERCISE SHARES

In order to prevent dilution of the rights granted under the Warrant, the
Exercise Price shall be subject to adjustment from time to time as provided in
this Article IV, and the number of shares of Common Stock issuable upon exercise
of the Warrant shall be subject to adjustment from time to time as provided in
this Article IV; provided, however, if more than one subsection of this Article
IV is applicable to a single event, the subsection shall be applied that
produces the largest adjustment and no single event shall cause an adjustment
under more than one subsection of this Article IV so as to result in
duplication; and provided further, that in no event shall the Exercise Price be
adjusted below a price that is less than the consolidated closing bid price of
the Common Stock as reported by the NASDAQ Stock Market on the business day
immediately prior to the Date of Issuance. Notwithstanding the foregoing, in the
event that any adjustment to this Warrant is required pursuant to the provision
of this Article IV prior to six months following the Date of Issuance, then and
in such event any such adjustment shall be deferred and not be effective until
the earlier of (i) the date that all of the shares of Series D Preferred Stock
cease to be issued and outstanding or (ii) six months following the Date of
Issuance.

Section 4.1 Subdivision or Combination of Common Stock.  In the event that the
amount of outstanding Common Stock is increased or decreased by combination (by
reverse stock split or reclassification) or subdivision (by any stock split or
reclassification) of the Common Stock or any distribution by the Company with
respect to the Common Stock in the form of additional Common Stock (“Additional
Common Stock”), then, on the effective date of such combination, subdivision or
distribution, the number of Warrant Exercise Shares issuable on exercise of the
Warrant shall be increased or decreased, as applicable, in proportion to such
increase or decrease, as applicable, in the outstanding Common Stock.  Whenever
the number of Warrant Exercise Shares purchasable upon the exercise of the
Warrant is adjusted pursuant to this Section 4.1, the Exercise Price shall be
adjusted (to the nearest cent ($0.01) by multiplying such Exercise Price
immediately prior to such adjustment by a fraction (a) the numerator of which
shall be the number of Warrant Exercise Shares purchasable upon the exercise of
the Warrant immediately prior to such adjustment and (b) the denominator of
which shall be the number of Warrant Exercise Shares so purchasable immediately
thereafter.

Section 4.2 Distributions.  If the Company at any time after the issuance of the
Warrant but prior to the expiration of the Exercise Period fixes a record date
for the making of a distribution to all holders of shares of the Common Stock of
securities, evidences of indebtedness, assets, cash, rights or warrants
(excluding (i) dividends or distributions referred to in Section 4.1 and (ii)
any cash dividends made in amounts and at intervals which are within the
customary practice for companies that pay recurring cash dividends), then, in
each such case, the Exercise Price in effect prior to such record date shall be
adjusted thereafter to the price determined by the following formula:

EP1 = EP0 x (CP0 - FV)/CP0

where

EP1

=

the Exercise Price in effect immediately following the application of the
adjustments in this Section 4.2;

 

 

 

EP0

=

the Exercise Price in effect immediately prior to the application of the
adjustments in this Section 4.2;

 

 

 

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CP0

 

 

 

FV

 

=

 

 

 

=

 

the Current Sale Price of the Common Stock on the last trading day preceding the
first date on which the Common Stock trades regular way without the right to
receive such distribution; and

 

the amount of cash and/or the fair market value of the securities, evidences of
indebtedness, assets, rights or warrants to be so distributed in respect of one
share of Common Stock, as determined in the reasonable discretion of the Board
of Directors.

 

Such adjustment shall be made successively whenever such a record date is fixed
(an “Adjustment Event”).  In such Adjustment Event, the number of Warrant
Exercise Shares issuable upon the exercise of the Warrant shall be increased to
the number obtained by dividing (x) the product of (1) the number of Warrant
Exercise Shares issuable upon the exercise of the Warrant before such
adjustment, and (2) the Exercise Price in effect immediately prior to the
adjustment by (y) the new Exercise Price immediately following such adjustment.

In the event that such distribution is not so made, the Exercise Price and the
number of Warrant Exercise Shares issuable upon exercise of the Warrant then in
effect shall be readjusted, effective as of the date when the Board of Directors
determines not to distribute such securities, evidences of indebtedness, assets,
cash, rights or warrants, as the case may be, to the Exercise Price that would
then be in effect and the number of Warrant Exercise Shares that would then be
issuable upon exercise of the Warrant if such record date had not been fixed.

Section 4.3 Pro Rata Repurchase Offer of Common Stock.  If at any time after the
issuance of the Warrant but prior to the expiration of the Exercise Period the
Company consummates a Pro Rata Repurchase Offer of Common Stock, then the
Exercise Price shall be reduced to the price determined by the following
formula:

EP1 = EP0 x  (OS0 x CP0) – AP
                       (OS0 – SP) x CP0

where

EP1

=

the Exercise Price in effect immediately following the application of the
adjustments in this Section 4.3 (but in no event greater than EP0);

 

 

 

EP0

=

the Exercise Price in effect immediately prior to the application of the
adjustments in this Section 4.3;

 

 

 

OS0

=

the number of Fully Diluted shares of Common Stock outstanding immediately
before consummation of such Pro Rata Repurchase Offer;

 

 

 

CP0

=

the Current Sale Price of a share of Common Stock on the trading day immediately
preceding the first public announcement by the Company or any of its Affiliates
of the intent to effect such Pro Rata Repurchase Offer;

 

 

 

11

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AP

=

the aggregate purchase price (including the fair market value, as determined in
the reasonable discretion of the Board of Directors, of any non-cash
consideration included therein) paid for the shares of

Common Stock in the Pro Rata Repurchase Offer; and

 

 

 

SP

=

the number of shares of Common Stock so repurchased in the Pro Rata Repurchase
Offer.

 

In such event, the Warrant Exercise Shares issuable upon the exercise of the
Warrant shall be increased to the number obtained by dividing (x) the product of
(1) the Warrant Exercise Shares issuable upon the exercise of the Warrant before
such adjustment, and (2) the Exercise Price in effect immediately prior to the
adjustment by (y) the new Exercise Price immediately following such adjustment.
For the avoidance of doubt, no increase to the Exercise Price or decrease in the
Warrant Exercise Shares issuable upon exercise of the Warrant shall be made
pursuant to this Section 4.3.

 

Section 4.4 Reorganization, Reclassification, Consolidation, Merger or Sale.  In
connection with any Organic Change prior to the expiration of the Exercise
Period, the Holder’s right to receive Warrant Exercise Shares upon exercise of
the Warrant shall be converted into the right to acquire and receive, upon
exercise of the Warrant, such cash, stock, securities or other assets or
property as would have been issued or payable to holders of Common Stock in such
Organic Change (if the Holder had exercised such Warrant immediately prior to
such Organic Change) with respect to or in exchange, as applicable, for the
number of Warrant Exercise Shares that would have been issued upon exercise of
the Warrant, if the Warrant had been exercised immediately prior to the
occurrence of such Organic Change.  The Company shall not effect any Organic
Change unless, prior to the consummation thereof, the surviving Person (if other
than the Company) resulting from such Organic Change, shall assume, by written
instrument substantially similar in form and substance to this Agreement in all
material respects (including with respect to the provisions of Article IV), the
obligation to deliver to the Holder such cash, stock, securities or other assets
or property which, in accordance with the foregoing provision, the Holder shall
be entitled to receive upon exercise of the Warrant.  The provisions of this
Section 4.4 shall similarly apply to successive Organic Changes.  

Section 4.5 Certain Issuances of Common Stock.  If the Company shall, at any
time or from time to time after the Effective Date, issue any shares of Common
Stock pursuant to the conversion features in the Series D Stock Purchase
Agreement or the Lighthouse Notes, in either case for consideration per share
less than $2.50 per share, with consideration per share being equal to the
aggregate payment obligations being relieved under the Lighthouse Notes that are
being converted, or the aggregate amount of the Series D principal and dividends
being relieved under the Series D Purchase Agreement, in either case divided by
the number of shares of Common Stock being issued in such conversion, then
immediately upon such issuance, the Exercise Price in effect immediately prior
to such issuance shall be reduced (and in no event increased) to an Exercise
Price determined by the following formula:

EP1 = EP0 x  (OS0 x EP0) + AP
                       (OS0 + NS) x EP0

where

EP1

=

the Exercise Price in effect immediately following the adjustments in this
Section 4.5 (but in no event greater than EP0);

 

 

 

EP0

=

the Exercise Price in effect immediately prior to the application of the
adjustments in this Section 4.5;

 

 

 

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OS0

=

the number of Fully Diluted Shares of Common Stock outstanding immediately
before the issuance described in this Section 4.5;

 

 

 

AP

=

the aggregate payment obligations relieved under the Lighthouse Note(s) or the
principal and dividend obligations being relieved under the Series D Purchase
Agreement, as applicable, upon the conversion and issuance described in this
Section 4.5; and

 

 

 

NS

=

the aggregate number of shares of Common Stock issued by the Company in such
conversion transaction.

 

In such event, the Warrant Exercise Shares issuable upon the exercise of the
Warrant shall be increased to the number obtained by dividing (x) the product of
(1) the Warrant Exercise Shares issuable upon the exercise of the Warrant before
such adjustment, and (2) the Exercise Price in effect immediately prior to the
adjustment by (y) the new Exercise Price immediately following such adjustment.
For the avoidance of doubt, no increase to the Exercise Price or decrease in the
Warrant Exercise Shares issuable upon exercise of the Warrant shall be made
pursuant to this Section 4.5.

Section 4.6 Notice of Adjustments.  Whenever the number and/or kind of Warrant
Exercise Shares or the Exercise Price is adjusted as herein provided, the
Company shall (i) prepare or cause to be prepared a written statement setting
forth the adjusted number and/or kind of shares issuable upon the exercise of
Warrant and the Exercise Price of such shares after such adjustment, the facts
requiring such adjustment and the computation by which adjustment was made, and
(ii) provide such written statement  to each Holder in the manner provided in
Section 7.2 below, together with notice of the record date or the effective date
of the event.  Failure to give such notice, or any defect therein, shall not
affect the legality or validity of such event.  

Section 4.7 Deferral or Exclusion of Certain Adjustments; Par Value.  No
adjustment to the Exercise Price or the number of Warrant Exercise Shares shall
be required hereunder unless such adjustment together with other adjustments
carried forward as provided below, would result in an increase or decrease of at
least one percent (1%) of the applicable Exercise Price or the number of Warrant
Exercise Shares; provided that any adjustments which by reason of this Section
4.6 are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. Subject to Section 3.5(b), no adjustment need be
made for a change in the par value of the shares of Common Stock. All
calculations under this Section shall be made to the nearest one one-thousandth
(1/1,000) of one cent ($0.01) or to the nearest one one-thousandth (1/1,000) of
a share, as the case may be.  If an adjustment in Exercise Price made hereunder
would reduce the Exercise Price to an amount below par value of the Common
Stock, then such adjustment in Exercise Price made hereunder shall reduce the
Exercise Price to the par value of the Common Stock.

Section 4.8 Form of Warrant After Adjustments.  The form of Warrant certificate
need not be changed because of any adjustments in the Exercise Price or the
number and/or kind of shares issuable upon exercise of the Warrant, and the
Warrant certificate theretofore or thereafter issued may continue to express the
same price and number and kind of shares as are stated therein, as initially
issued; provided that such adjustments in the Exercise Price or the number
and/or kind of shares issuable upon exercise of the Warrant pursuant to the
terms of this Agreement shall nonetheless have effect upon exercise of the
Warrant.  The Company, however, may at any time in its sole discretion make any
change in the form of Warrant certificate that it may deem appropriate to give
effect to such adjustments and that does not affect the substance of the Warrant
certificate or this Agreement, and any Warrant certificate thereafter issued,
whether in exchange or substitution for an outstanding Warrant certificate, may
be in the form so changed.

13

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Article V

TRANSFER
OF WARRANTS

Section 5.1 Registration of Transfers.

(a) Transfer of Warrant.  When the Warrant certificate is presented to the
Company with a written request to register the Transfer of such Warrant, the
Company shall register the Transfer, and shall issue such new Warrant
certificates, as requested if its customary requirements for such transactions
are met, provided, that (A) the Company shall have received (x) a written
instruction of Transfer in form satisfactory to the Company, duly executed by
the Registered Holder thereof or by its  attorney, duly authorized in writing
along with evidence of authority that may be required by the Company, including
but not limited to, a signature guarantee from an eligible guarantor institution
participating in a signature guarantee program approved by the Securities
Transfer Association, and (y) surrender of the Warrant certificate representing
same duly endorsed for Transfer, and (B) if reasonably requested by the Company,
the Company shall have received a written opinion of counsel reasonably
acceptable to the Company that such transfer is in compliance with the
Securities Act.

(b) Restrictions on Transfer.  No Warrant or Warrant Exercise Shares shall be
sold, exchanged or otherwise Transferred in violation of the Securities Act or
state securities Laws or the Company’s articles of incorporation. If the Holder
purports to Transfer the Warrant to any Person in a transaction that would
violate the provisions of this Section 5.1(b), such Transfer shall be void ab
initio and of no effect.

Section 5.2 Obligations with Respect to Transfers of Warrant.

(a) All warrants issued upon any registration of Transfer of the Warrant shall
be the valid obligations of the Company, entitled to the same benefits under
this Agreement as the Warrant surrendered upon such registration of Transfer.

(b) Subject to Section 5.1(a), and this Section 5.2, the Company shall upon
receipt of all information required to be delivered hereunder, from time to time
register the Transfer of any outstanding Warrant in the Warrant Register, upon
delivery by the Registered Holder thereof, of the Warrant certificate
representing such Warrant, properly endorsed for transfer, by the  Registered
Holder thereof or by the duly appointed legal representative thereof or by a
duly authorized attorney; and upon any such registration of Transfer, a new
Warrant certificate shall be issued to the transferee.

Section 5.3 Fractional Warrant.  The Company shall not effect any registration
of Transfer which will result in the issuance of a fraction of a warrant.

Section 5.4 Restricted Warrant; Legends.  Notwithstanding anything contained in
this Agreement, if the Company, in its sole discretion, determines that the
Holder of the Warrant may be deemed an “underwriter” under the Securities Act,
the Company shall cause such Warrant certificate to be issued bearing a legend
in substantially the following form:  

THE WARRANT REPRESENTED BY THIS CERTIFICATE IS ISSUED IN RELIANCE UPON AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS
AMENDED (THE

14

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“SECURITIES ACT”) AND HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OR
OTHER APPLICABLE SECURITIES LAWS.  THESE WARRANTS (AND THE SHARES OF COMMON
STOCK ISSUABLE UPON EXERCISE THEREOF) MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, OR
OTHERWISE DISPOSED EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR (B) PURSUANT TO
AN EXEMPTION FROM REGISTRATION THEREUNDER.

The Warrant Exercise Shares issued upon exercise of any such Warrant shall be
issued in the form of registered stock certificates bearing a legend indicating
that transfer may be restricted under United States federal and state securities
laws or in the form of an electronic entry on the stock register maintained by
the transfer agent for the Common Stock with a notation to a similar effect.

The Holder (or its transferee, as applicable) of the Warrant or Warrant Exercise
Shares, as applicable, shall be entitled to receive from the Company, without
expense, new securities of like tenor not bearing the restrictive legend set
forth above when (a) the Warrant or Warrant Exercise Shares, as applicable,
shall have been (i) effectively registered under the Securities Act and disposed
of in accordance with a registration statement covering such securities or (ii)
disposed of pursuant to the provisions of Rule 144 or any comparable rule under
the Securities Act or (b) when, in the written reasonable opinion of independent
counsel for the Holder (which counsel shall be experienced in Securities Act
matters and which counsel and opinion shall be reasonably satisfactory to the
Company), such restrictions are no longer required in order to insure compliance
with the Securities Act (including, without limitation, when the Warrant or
Warrant Exercise Shares, as applicable, could be sold in a single transaction
pursuant to Rule 144 without restriction as to volume or manner of sale).

Article VI

OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANTS

Section 6.1 No Rights or Liability as Stockholder.  Nothing contained herein
shall be construed as conferring upon the Holder or his, her or its transferees
the right to vote or to receive dividends or to consent or to receive notice as
a stockholder in respect of any meeting of stockholders for the election of
directors of the Company or of any other matter, or any rights whatsoever as
stockholders of the Company.  The vote or consent of the Holder shall not be
required with respect to any action or proceeding of the Company and the Holder
shall not have any right not expressly conferred hereunder or under, or by
applicable Law with respect to, the Warrant held by such Holder.  The Holder, by
reason of the ownership or possession of the Warrant, shall have no right to
receive any cash dividends, stock dividends, allotments or rights or other
distributions paid, allotted or distributed or distributable to the holders of
Common Stock prior to, or for which the relevant record date preceded, the
Exercise Date of the Warrant. No provision thereof and no mere enumeration
therein of the rights or privileges of the Holder shall give rise to any
liability of such Holder for the Exercise Price hereunder or as a stockholder of
the Company, whether such liability is asserted by the Company or by creditors
of the Company.

Section 6.2 Notice to Registered Holder.  The Company shall give notice to the
Registered Holder pursuant to Section 7.2 hereof, if at any time prior to the
expiration or exercise in full of the Warrant, any of the following events shall
occur:

(a) the payment of any dividend payable in any securities upon shares of Common
Stock or the making of any distribution (other than a regular quarterly cash
dividend) to all holders of Common Stock;

15

--------------------------------------------------------------------------------

 

(b) the issuance to all holders of Common Stock of any additional shares of
Common Stock or of rights, options or warrants to subscribe for or purchase
Common Stock or of any other subscription rights, options or warrants;

(c) a Pro Rata Repurchase Offer;

(d) an Organic Change;

(e) a dissolution, liquidation or winding up of the Company; or

(f) any the occurrence of any other event that would result in an adjustment to
the Exercise Price or the number of Warrant Exercise Shares issuable upon
exercise of the Warrant under Article IV.

Such giving of notice shall be initiated at least ten (10) days prior to the
date fixed as the record date or the date of closing of the Company’s stock
transfer books for the determination of the stockholders entitled to such
dividend, distribution or subscription rights, or of the stockholders entitled
to vote on such Organic Change, dissolution, liquidation or winding up or the
proposed effective date of a Pro Rata Repurchase Offer or any other event that
would result in an adjustment to the Exercise Price or the number of Warrant
Exercise Shares issuable upon exercise of the Warrant under Article IV.  Such
notice shall specify such record date or the date of closing the stock transfer
books or proposed effective date, as the case may be.  Failure to provide such
notice shall not affect the validity of any action taken.  For the avoidance of
doubt, no such notice (or the failure to provide it to any Holder) shall
supersede or limit any adjustment called for by Article IV by reason of any
event as to which notice is required by this Section.

Section 6.3 Lost, Stolen, Mutilated or Destroyed Warrant Certificates

.  If any Warrant certificate is lost, stolen, mutilated or destroyed, the
Company may issue and deliver, in exchange and substitution for and upon
cancellation of the mutilated Warrant certificate, or in lieu of and
substitution for the Warrant certificate lost, stolen or destroyed, a new
Warrant certificate of like tenor.  The Company shall require evidence
reasonably satisfactory to it of the loss, theft or destruction of such Warrant
certificate, and an open penalty surety bond satisfactory to it and holding the
Company harmless, absent notice to the Company that such certificates have been
acquired by a bona fide purchaser.  Applicants for such substitute Warrant
certificates shall also comply with such other regulations and pay such other
charges as the Company may require.

Section 6.4 Cancellation of Warrant.  If the Company shall purchase or otherwise
acquire the Warrant, such Warrant shall be cancelled and retired by appropriate
notation on the Warrant Register.

Article VII

MISCELLANEOUS PROVISIONS

Section 7.1 Binding Effects; Benefits.  This Agreement shall inure to the
benefit of and shall be binding upon the Company and the Holder and their
respective heirs, legal representatives, successors and assigns.  Nothing in
this Agreement, expressed or implied, is intended to or shall confer on any
person other than the Company and the Holder, or their respective heirs, legal
representatives, successors or assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.

Section 7.2 Notices.  Unless otherwise provided, any notice or other
communication by the Company required or which may be given hereunder to Holder
shall be in writing and shall be sent by

16

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certified or regular mail (return receipt requested, postage prepaid), by
private national courier service, by personal delivery or by facsimile
transmission.  Such notice or communication shall be deemed given (i) if mailed,
two (2) days after the date of mailing, (ii) if sent by national courier
service, one (1) Business Day after being sent, (iii) if delivered personally,
when so delivered, or (iv) if sent by facsimile transmission, on the Business
Day after such facsimile is transmitted, in each case as follows:

if to the Company, to:

Staffing 360 Solutions, Inc.

641 Lexington Avenue

27th Floor, Suite 2701

New York, NY 10022

Email: brendan.flood@staffing360solutions.com

Telephone: (646) 507-5710

Attention: Brendan Flood

 

with a copy (which shall not constitute notice) to:

Staffing 360 Solutions, Inc.

641 Lexington Avenue

27th Floor, Suite 2701

New York, NY 10022

Email: david.faiman@staffing360solutions.com

Telephone: (646) 507-5710
  Attention: David Faiman

 

with copies (which shall not constitute notice) to:

Sheppard Mullin Richter & Hampton LLP

30 Rockefeller Plaza

New York, NY 10112-0015
Facsimile: (212) 655-1729
Attention: Richard Friedman

 

if to Registered Holder, at their addresses as they appear in the Warrant
Register and, if different, at the addresses appearing in the records of the
transfer agent or registrar for the Common Stock.

Section 7.3 Persons Having Rights under this Agreement.  Nothing in this
Agreement expressed and nothing that may be implied from any of the provisions
hereof is intended, or shall be construed, to confer upon, or give to, any
person or corporation other than the parties hereto and the Holder, any right,
remedy, or claim under or by reason of this Agreement or of any covenant,
condition, stipulation, promise, or agreement hereof.  All covenants,
conditions, stipulations, promises, and agreements contained in this Agreement
shall be for the sole and exclusive benefit of the parties hereto, their
successors and assigns and the Holder.

Section 7.4 Examination of this Agreement.  A copy of this Agreement, and of the
entries in the Warrant Register relating to the Registered Holder’s Warrant,
shall be available at all reasonable times at the offices of the Company, for
examination by the Registered Holder of the Warrant.

17

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Section 7.5 Counterparts.  This Agreement may be executed in any number of
original or facsimile or electronic PDF counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument.

Section 7.6 Effect of Headings.  The section headings herein are for convenience
only and are not part of this Agreement and shall not affect the interpretation
hereof.

Section 7.7 Supplements, Amendments and Waivers.  This agreement may not be
amended except in writing signed by the Company and the Holder.  Any supplement,
amendment or waiver effected pursuant to and in accordance with the provisions
of this Section 7.7 shall be binding upon the Holder and upon each future holder
and the Company.  In the event of any supplement, amendment or waiver, the
Company shall give prompt notice thereof to the Registered Holder.  

Section 7.8 No Inconsistent Agreements; No Impairment.  The Company shall not,
on or after the date hereof, enter into any agreement with respect to its
securities which conflicts with the rights granted to the Holder in this
Agreement.  The Company represents and warrants to the Holder that the rights
granted hereunder do not in any way conflict with the rights granted to holders
of the Company’s securities under any other agreements.  The Company shall not,
by amendment of its articles of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Company, but will at all times in good faith assist in the carrying out of all
the provisions of the Warrant and in the taking of all such action as may be
necessary in order to preserve the exercise rights of the Holder against
impairment.

Section 7.9 Integration/Entire Agreement.  This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the Company and
the Holder in respect of the subject matter contained herein.  There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein, with respect to the Warrant.  This Agreement supersedes
all prior agreements and understandings between the parties with respect to the
Warrant.

Section 7.10 Governing Law; Exclusive Jurisdiction.  This Agreement and the
Warrant issued hereunder shall be deemed to be a contract made under the Laws of
the State of New York and for all purposes shall be governed by and construed in
accordance with the Laws of such State.  Each party hereto consents and submits
to the exclusive jurisdiction of the courts of the State of New York located in
New York County and of the U.S. federal courts located in the Southern District
of New York in connection with any action or proceeding brought against it that
arises out of or in connection with, that is based upon, or that relates to this
Agreement or the transactions contemplated hereby.  In connection with any such
action or proceeding in any such court, each party hereto hereby waives personal
service of any summons, complaint or other process and hereby agrees that
service thereof may be made in accordance with the procedures for giving notice
set forth in Section 7.2 hereof.  Each party hereto hereby waives any objection
to jurisdiction or venue in any such court in any such action or proceeding and
agrees not to assert any defense based on forum non conveniens or lack of
jurisdiction or venue in any such court in any such action or proceeding.

Section 7.11 Termination.  This Agreement will terminate on the earlier of (i)
such date when the Warrant has been exercised with respect to all shares subject
thereto, or (ii) the expiration of the Exercise Period.  

Section 7.12 Waiver of Trial by Jury.  Each party hereto, including the Holder
by its receipt of the Warrant, hereby irrevocably and unconditionally waives the
right to a trial by jury in any action, suit,

18

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counterclaim or other proceeding (whether based on contract, tort or otherwise)
arising out of, connected with or relating to this Agreement and the
transactions contemplated hereby.

Section 7.13 Remedies.  The Company hereby agrees that, in the event that the
Company violates any provisions of the Warrants (including the obligation to
deliver shares of Common Stock upon the exercise thereof), the remedies at law
available to the Holder of the Warrant may be inadequate.  In such event, the
Holder shall have the right, in addition to all other rights and remedies that
such Holder may have, to specific performance and/or injunctive or other
equitable relief to enforce the provisions of this Agreement and the Warrant.

Section 7.14 Severability.  In the event that any one or more of the provisions
contained in this Agreement, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provisions in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.

Section 7.15 Confidentiality.  The Company agrees that the Warrant Register and
personal, non-public warrant holder information, which are exchanged or received
pursuant to the negotiation or carrying out of this Agreement, shall remain
confidential and shall not be voluntarily disclosed to any other person, except
as may be required by law, including, without limitation, pursuant to subpoenas
from state or federal government authorities (e.g., in divorce and criminal
actions), or pursuant to the requirements of the SEC.

Section 7.16 Warrantholder Actions.  

(a) Any notice, consent to amendment, supplement or waiver provided by this
Agreement to be given by the Holder (an “act”) may be evidenced by an instrument
signed by the Holder delivered to the Company.

(b) Any act by the Holder of the Warrant binds the Holder and every subsequent
Holder of the Warrant certificate that evidences the same Warrant of such acting
Holder, even if no notation thereof appears on the Warrant certificate.  Subject
to paragraph (c), the Holder may revoke an act as to the Warrant, but only if
the Company receives the notice of revocation before the date the amendment or
waiver or other consequence of the act becomes effective.

(c) The Company may, but is not obligated to, fix a record date for the purpose
of determining the holder entitled to act with respect to any amendment or
waiver or in any other regard.  If a record date is fixed, the Person that was
the holder at such record date and only such Person will be entitled to act, or
to revoke any previous act, whether or not such Person continue to be holder
after the record date.  

[Signature Page Follows]

 

 

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IN WITNESS WHEREOF, this Warrant Agreement has been duly executed by the
undersigned parties hereto as of the date first above written.

 

Company:

 

Staffing 360 Solutions, Inc.

 

 

By:

/s/ Brendan Flood

 

Name: Brendan Flood

 

Title:   Executive Chairman

 

Accepted and agreed:

 

Jackson Investment GROUP, LLC

 

 

By:

/s/ Douglas B. Kline  

 

Name:  Douglas B. Kline

 

Title:   Chief Financial Officer

 

 

 

20

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EXHIBIT A

THE SECURITIES REPRESENTED BY THIS WARRANT CERTIFICATE (INCLUDING THE SECURITIES
ISSUABLE UPON EXERCISE OF THE WARRANT) ARE SUBJECT TO THE WARRANT AGREEMENT
DATED AS OF JANUARY [●], 2017, BY AND BETWEEN THE COMPANY AND THE HOLDER (THE
“WARRANT AGREEMENT”).

Certificate Number  ________________

Warrant  

 

CUSIP  [●]

This certifies that

 

is the holder of

 

 

WARRANTS TO PURCHASE COMMON STOCK OF
STAFFING 360 SOLUTIONS, INC.

transferable on the books of the Company by the holder hereof in person or by
duly authorized attorney upon surrender of the certificate properly
endorsed.  The Warrant entitles the holder and its registered assigns
(collectively, the “Registered Holder”)  to purchase by exercise from Staffing
360 Solutions, Inc., a Nevada corporation (the “Company”), subject to the terms
and conditions hereof, at any time before 5:00 p.m., Eastern time, on January
[__], 2022, three million, one hundred fifty thousand (3,150,000) fully paid and
non-assessable shares of common stock, par value $0.00001 per share (“Common
Stock”) of the Company at the Exercise Price (as defined in the Warrant
Agreement).  The Exercise Price and the number and kind of shares purchasable
hereunder are subject to adjustment from time to time as provided in Article IV
of the Warrant Agreement.  The initial Exercise Price shall be $1.35 per share.

WITNESS the facsimile seal of the Company and the facsimile signatures of its
duly authorized officers.

 

 

DATED

___________________

Authorized Officer

 

 

 

Attest:

 

 

_____________________

Secretary

 

 

 

 

 

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FORM OF REVERSE OF WARRANT

[●]

The Warrant evidenced by this Warrant certificate is a duly authorized issuance
of a Warrant to purchase 3,150,000 shares of Common Stock issued pursuant to the
Warrant Agreement, as dated January [●], 2017 between Staffing 360 Solutions,
Inc. (the “Company”) and Jackson Investment Group, LLC (together with its
successors and assigns, the “Holder” and the agreement, the “Warrant
Agreement”), a copy of which may be inspected at the office of the Company.  The
Warrant Agreement is incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
Registered Holder of the Warrant.  All capitalized terms used in this Warrant
certificate but not defined that are defined in the Warrant Agreement shall have
the meanings assigned to them therein.

The Company shall not be required to issue fractions of shares of Common Stock
or any certificates that evidence fractional shares of Common Stock.  No Warrant
may be sold, exchanged or otherwise transferred in violation of the Securities
Act or state securities laws.  The Warrant represented by this Warrant
certificate does not entitle the Registered Holder to any of the rights of a
stockholder of the Company.  The Company may deem and treat the Registered
Holder hereof as the absolute owner of this Warrant certificate (notwithstanding
any notation of ownership or other writing hereon made by anyone) for the
purpose of any exercise hereof and for all other purposes, and the Company shall
not be affected by any notice to the contrary.

 

 

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EXHIBIT B

EXERCISE FORM FOR REGISTERED HOLDER HOLDING WARRANT CERTIFICATE

(To be executed upon exercise of Warrant)

The undersigned Registered Holder of this Warrant certificate, being the holder
of Warrants issued by  Staffing 360 Solutions, Inc. (the “Company”) pursuant to
that certain Warrant Agreement, as dated January [●], 2017 (the “Warrant
Agreement”), by and between the Company and Jackson Investment Group, LLC (the
“Holder”), hereby irrevocably elects to exercise the Warrant indicated below,
for the purchase of the number of shares of Common Stock, par value $0.00001 per
share (“Common Stock”) indicated below and (check one):

☐ herewith tenders payment for _______ of the Warrant Exercise Shares to the
order of the Company in the amount of $_________ in accordance with the terms of
the Warrant Agreement; or

The undersigned requests that the Warrant Exercise Shares be issued in the name
of the undersigned Holder or as otherwise indicated below:

Name

Address

 

If said number of Warrant Exercise Shares shall not be all the Warrant Exercise
Shares issuable upon exercise of the Warrant, the undersigned requests that a
new Warrant certificate representing the balance of such Warrant shall be issued
in the name of the undersigned Holder or as otherwise indicated below and be
delivered to the address indicated below:

Name

Address

 

Delivery Address (if different)

 

 

Dated: ____________, 20___ HOLDER

 

By  ____________________

Name:

Title:

 

 

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