Exhibit 4.2

 





 


 


 


THE SECURITIES REPRESENTED BY THIS CERTIFICATE
AND THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE INTO HAVENOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
“ACT”) AND ARE “RESTRICTED SECURITIES” AS THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT. THE SECURITIES
MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE REASONABLE SATISFACTION
OF THE ISSUER.


 


12% CONVERTIBLE BOND


 


Staffing 360 Solutions, Inc.


 


 


	Original Issue Date: __________	Principal Amount: $______


 


 


FOR VALUE RECEIVED, Staffing 360 Solutions,
Inc., a publicly held Nevada company (OTCBB: STAF) (“STAF” or the “Company”) hereby promises
to pay to _____________ or its registered assigns (“Buyer” or “Holder”), the principal sum
of ________________ Dollars ($_________), together with a coupon of 12% per annum, on the terms set forth below. This Bond (this
“Bond”) was issued pursuant to that certain Bond Purchase Agreement dated the Original Issue Date set forth
above by and between the Company and the Buyer (the “Bond Purchase Agreement”). This Bond is one of a series
of bonds (the “Bonds”) of like tenor in the aggregate principal amount of up to $4,000,000, with the understanding
that the principal amount may be increased up to $6,000,000 at the Company’s sole discretion. Unless otherwise defined herein,
capitalized terms used in this Bond shall have the meanings ascribed to them in the Bond Purchase Agreement.


 


		1.	Payments



 


1.1         
Coupon. 12% per annum, payable quarterly in arrears in the form of cash or PIK (in comparably valued common stock, par value
$.00001 per share (the “Common Stock”) of the Company) at the Holder’s election.


 


1.2         
Principal. The Principal Amount and all accrued but unpaid coupon payments, shall be due and payable on October 15, 2014
(the “Maturity Date”), unless earlier converted. Each Holder must notify the Company by October 15, 2014 whether payment
will be made in the form of cash or as PIK (in comparably valued Common Stock of the Company). If the Holder chooses to be paid
in cash, the Company will have 30 days from the Maturity Date to make the payment. If no election is made by the Holder, payment
will be made in Common Stock.


 






    	 



    	 



    

 


1.3         
Conversion of Bond. This Bond is subject to a voluntary conversion at the election of the Holder. At any time prior to the
Maturity Date, the investors in this Offering may elect to convert the Bond, including all accrued but unpaid coupon payments,
into shares of Common Stock (the “Conversion Shares”) at the price of $1.50 per share, unless an event of default occurs
prior to such conversions. The Conversion Shares shall be restricted pursuant to Rule 144 under the Securities Act.


 


		2.	Definitions



 


For purposes of this
Bond, the following capitalized terms shall have the meanings set forth below:


 


“Event of
Default” shall have the meaning specified in Section 3.


 


“Holders”
shall mean the Holder and all other holders of the Bonds.


 


“Majority
Holders” at any date shall mean the Holders of more than 50% of the principal amount of the Bonds outstanding at such
date.


 


“Person”
shall mean individual, partnership, corporation, trust, association or other entity.


 


“Mezzanine
Financing” shall mean the issuance and sale by the Company of senior subordinated promissory notes of the Company.


 


		3.	Events of Default and Remedies



 


3.1Events of
Default. Each of the following shall constitute an “Event of Default”:


 


3.1.1The failure
of the Company to pay the Principal Amount, including all accrued but unpaid coupon payments by the Maturity Date, unless otherwise
the Bond is voluntarily converted prior to the Maturity Date;


 


3.1.2The failure
of the Company to convert the Principal Amount, and all accrued but unpaid coupon payments, and issue the respective Conversion
Shares within 10 days of the Holder requesting such conversion.


 


3.1.3The material
default by the Company under any of its material covenants or representations under the Bond Purchase Agreement, which default
is not cured within 30 days after receipt of written notice of such default delivered to the Company by the Majority Holders;


 


3.1.4A decree, judgment,
or order by a court of competent jurisdiction shall have been entered adjudging the Company as bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization of the Company under any bankruptcy or similar law, and such decree of order
shall have continued undischarged and unstayed for a period of 90 days; or a decree or order of a court of competent jurisdiction
ordering the appointment of a receiver, liquidator, trustee, or assignee in bankruptcy or insolvency of the Company, or for the
winding up or liquidation of the affairs of the Company, shall have been entered, and such decree, judgment, or order shall have
remained in force undischarged and unstayed for a period of 60 days;


 






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3.1.5The Company
shall institute proceedings to be adjudicated a voluntary bankrupt, or shall consent to the filing of a bankruptcy proceeding against
it, or shall file a petition or answer or consent seeking reorganization under any bankruptcy or similar law or similar statute,
or shall consent to the filing of any such petition, or shall consent to the appointment of a custodian, receiver, liquidator,
trustee, or assignee in bankruptcy or insolvency of it or any of its assets or property, or shall make a general assignment for
the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due.


 


3.2Acceleration
of Maturity Date. If an Event of Default as specified in Section 3.1.1, Section 3.1.2 or Section 3.1.3
occurs and is continuing, then, and in every such case, unless the principal of this Bond shall have already become due and payable,
the Majority Holders by written notice to the Company (an “Acceleration Notice”), may declare all of the principal
of the Bond, together with the accrued coupon payments thereon, to be due and immediately payable or convertible at the Holder’s
request. If an Event of Default specified in Section 3.1.4 or Section 3.1.5 occurs, all principal of and
accrued coupon payments on this Bond ipso facto shall become and be immediately due and payable without any declaration or other
act on the part of the Holder.


 


3.3Waiver.
No delay or omission by the Holder to exercise any right or remedy arising upon any Event of Default shall impair the exercise
of any such right or remedy or constitute a waiver of any such Event of Default. Every right and remedy given by this Section 
or by law to the Holder may be exercised from time to time, and as often as may be deemed expedient, by the Holder. No provision
of this Bond may be waived unless in writing signed by Holder, and waiver of any one provision of this Agreement shall not be deemed
to be a waiver of any other provision.


 


		4.	Replacement Bond. 



 


If a mutilated Bond
is surrendered to the Company or if the Holder claims and submits an affidavit or other evidence, satisfactory to the Company,
to the Company to the effect that this Bond has been lost, destroyed or wrongfully taken, the Company shall issue a replacement
Bond if the Company’s reasonable requirements are met, including, if required by the Company, provision by the Holder of
an indemnity bond or other indemnity, sufficient in the judgment of the Company, to protect the Company from any loss which any
of them may suffer if the Bond is replaced.


 


		5.	Miscellaneous



 


5.1Successors.
The terms and conditions of this Bond shall be binding upon and inure to the benefit of the parties to this Bond and their respective
successors, heirs and personal representatives.


 


5.2Governing
Law. This Bond shall be construed in accordance with the laws of the State of New York without giving effect to the principles
of conflicts of law thereof.


 


5.3Captions.
The various captions of this Bond are for reference only and shall not be considered or referred to in resolving questions of interpretation
of this Bond.


 






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5.4Notices.
All notices, requests, demands and other communications (collectively, “Notices”) given pursuant to this Agreement
shall be in writing, and shall be delivered by personal service, courier, facsimile transmission, email transmission of a pdf format
data file or by United States first class, registered or certified mail, postage prepaid, addressed to the Company at its principal
executive offices or the Holder at its address as set forth on the books and records of the Company. Any Notice, other than a Notice
sent by registered or certified mail, shall be effective when received; a Notice sent by registered or certified mail, postage
prepaid return receipt requested, shall be effective on the earlier of when received or the third day following deposit in the
United States mails. Any party may from time to time change its address for further Notices hereunder by giving notice to the other
party in the manner prescribed in this Section.


 


5.5Amendment.
The Bonds may be amended with the consent of the Company and the consent or approval of the Holders, provided that no such amendment
shall reduce the coupon payment rate or extend the Maturity Date without the consent or approval of the Holder. In the event of
such an amendment, at the request of the Company, the Holder shall tender back to the Company its Bond and the Company shall substitute
a replacement Bond reflecting such amendment(s).


 


5.6Severability.
Whenever possible each provision of this Bond shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Bond shall be or become prohibited or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions
of this Bond.


 


5.7Attorneys’
Fees. If any action or proceeding is brought to enforce or interpret any provision of this Agreement, the prevailing party
shall be entitled to recover reasonable attorneys’ fees to be fixed by the court.


 


5.8Solely Obligations
of Company. The Holder acknowledges and agrees that the obligations of the Company under this Bond are obligations solely of
the Company, and are not obligations of any member, manager or officer of the Company.


 






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IN WITNESS WHEREOF,
the Company has caused this Bond to be dated, executed and issued on its behalf by its officers thereto duly authorized.


 


 


	 	Staffing 360 Solutions, Inc.
	 	 	 
	 	By:	 
	 	Alfonso J. Cervantes, President


 






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