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UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): September
27, 2023
Staffing
360 Solutions, Inc.
(Exact
name of registrant as specified in its charter)
Delaware |
|
001-37575 |
|
68-0680859 |
(State
or other jurisdiction
of
Incorporation) |
|
(Commission
File
Number) |
|
(IRS
Employer
Identification
No.) |
757
3rd Avenue
27th
Floor
New
York, NY
10017
(Address
of Principal Executive Offices and Zip Code)
Registrant’s
telephone number, including area code: (646)
507-5710
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
|
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
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|
|
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
|
|
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
|
|
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Common
Stock, par value $0.00001 |
|
STAF |
|
The
Nasdaq Stock Market LLC |
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
Indicate
by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01 |
Entry
into a Material Definitive Agreement. |
On
September 27, 2023 the Board of Directors (the “Board”) of Staffing 360 Solutions, Inc. (the “Company”) declared
a dividend of one preferred share purchase right (a “Right”) for each outstanding share of common stock, par value $0.00001
per share, of the Company (the “Common Stock”) and .3889 Rights for each outstanding share of Series H Convertible Preferred
Stock, par value $0.00001 per share, of the Company (the “Series H Preferred Stock” and together with the Common Stock, the
“Voting Stock”). The dividend is payable on October 21, 2023 to the stockholders of record at the close of business on October
21, 2023 (the “Record Date”). Each Right initially entitles the registered holder to purchase from the Company one one-thousandth
of a share of Series A Junior Participating Preferred Stock, par value $0.00001 per share, of the Company (the “Preferred Stock”)
at a price of $2.75 per one one-thousandth of a share of Preferred Stock (the “Purchase Price”), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement, dated as of October 1, 2023, as the same may be amended from
time to time (the “Rights Agreement”), between the Company and Securities Transfer Corporation, as Rights Agent.
Until
the close of business on the earlier of (i) 10 business days following the first date of public announcement (which, for purposes of
this definition, shall include, without limitation, a report filed pursuant to Section 13(d) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) by the Company or an Acquiring Person (as defined below) that an Acquiring Person has become
such, or such other date, as determined by the Board, on which a Person has become an Acquiring Person, or (ii) 10 business days (or
such later date as may be determined by action of the Board prior to such time as any person or group of affiliated or associated persons
becomes an Acquiring Person) after the date of the commencement of, or the first public announcement of an intention to commence, a tender
or exchange offer the consummation of which would result in any person or group of affiliated or associated persons becoming an Acquiring
Person (the earlier of such dates being called the “Distribution Date”), (x) the Rights will be evidenced by the certificates
representing the Voting Stock registered in the names of the holders thereof (or by book entry shares in respect of such Voting Stock)
and not by separate Right Certificates (as defined below), and (y) the Rights will be transferable only in connection with the transfer
of Voting Stock.
Until
the Distribution Date (or earlier expiration of the Rights), (i) new Voting Stock certificates issued after the Record Date upon transfer
or new issuances of Voting Stock will contain a legend incorporating the terms of the Rights Agreement by reference, and (ii) the surrender
for transfer of any certificates representing Voting Stock (or book entry shares of Voting Stock) outstanding as of the Record Date will
also constitute the transfer of the Rights associated with the shares of Voting Stock represented thereby. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights (“Right Certificates”) will be mailed to holders of record
of the Voting Stock as of the close of business on the Distribution Date and such separate Right Certificates alone will evidence the
Rights.
Except
as otherwise provided in the Rights Agreement, the Rights are not exercisable until the Distribution Date. The Rights will expire on
the earliest of (i) October 2, 2026 or such later date as may be established by the Board prior to the expiration of the Rights, (ii)
the time at which the Rights are redeemed pursuant to the terms of the Rights Agreement, (iii) the closing of any merger or other acquisition
transaction involving the Company pursuant to an agreement of the type described in the Rights Agreement at which time the Rights are
terminated, or (iv) the time at which such Rights are exchanged pursuant to the terms of the Rights Agreement.
The
Purchase Price payable, and the number of shares of Preferred Stock or other securities or property issuable, upon exercise of the Rights
is subject to adjustment from time to time, among others, (i) in the event of a stock dividend on, or a subdivision, combination or reclassification
of, the Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights or warrants to subscribe for or purchase
Preferred Stock at a price, or securities convertible into Preferred Stock with a conversion price, less than the then-current market
price of the Preferred Stock, or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular periodic cash dividends or dividends payable in Preferred Stock) or of subscription rights or warrants (other than
those referred to above).
The
number of outstanding Rights is subject to adjustment in the event of a stock dividend on any class or series of Voting Stock payable
in shares of a class or series of Voting Stock or subdivisions, consolidations or combinations of any class or series of Voting Stock
occurring, in any such case, prior to the Distribution Date.
Shares
of Preferred Stock purchasable upon exercise of the Rights will not be redeemable. Each share of Preferred Stock will be entitled, when,
as and if declared, to a minimum preferential quarterly dividend payment of the greater of (a) $10.00 and (b) the sum of (1) 1,000 (subject
to adjustments for stock dividends, stock splits, or stock combinations) times the aggregate per share amount of all cash dividends,
plus (2) 1,000 (subject to adjustments for stock dividends, stock splits, or stock combinations) times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock, or a subdivision
of the outstanding shares of Common Stock (by reclassification or otherwise), in each case declared on the Common Stock. In the event
of liquidation, dissolution or winding up of the Company, the holders of the Preferred Stock will be entitled to a minimum preferential
payment of the greater of (a) $10.00 per share (plus any accrued but unpaid dividends and distributions), and (b) an amount equal to
1,000 times (subject to adjustments for stock dividends, stock splits, or stock combinations) made per share amount of all cash and other
property to be distributed in respect of Common Stock. Each share of Preferred Stock will be initially entitled to 1,000 votes (subject
to adjustment for stock dividends, stock splits, or stock combinations). In addition to voting together with the holders of Common Stock
for the election of other directors of the Company, the holders of Preferred Stock, voting separately as a class to the exclusion of
the holders of Common Stock, shall be entitled at the meeting of stockholders (and at each subsequent annual meeting of stockholders),
unless all dividends in arrears on the Preferred Stock have been paid or declared and set apart for payment prior thereto, to vote for
the election of two directors of the Company. Holders of Preferred Stock shall otherwise have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any
corporate action, other than as required by law.
In
the event of any merger, consolidation, combination or other transaction in which outstanding shares of Common Stock are converted or
exchanged, each share of Preferred Stock will be entitled to receive 1,000 times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged.
In
the event that any person or group of affiliated or associated persons becomes an Acquiring Person (the first occurrence of such event,
a “Flip-In Event”), each holder of a Right, other than Rights beneficially owned by the Acquiring Person (which will thereupon
become void), will thereafter have the right to receive upon exercise of a Right that number of shares of Common Stock equal to the number
of shares of Common Stock obtained by dividing the Purchase Price (subject to adjustments) by 50% of the current per share market price
of the Common Stock on the date of the Flip-In Event. Except in certain situations, a person or group of affiliated or associated persons
becomes an “Acquiring Person” upon acquiring beneficial ownership of 10% (20% in the case of a Passive Investor (as defined
in the Rights Agreement)) or more in voting power of the shares of Voting Stock then outstanding, subject to certain exclusions. Under
the Rights Agreement, a “Passive Investor” is generally a person who or which has reported or is required to report beneficial
ownership of shares of Voting Stock on Schedule 13G under the Exchange Act. Certain synthetic interests in securities created by derivative
positions are treated under the Rights Agreement as beneficial ownership of the number of shares of Voting Stock equivalent to the economic
exposure created by the derivative security, to the extent actual shares of Voting Stock are directly or indirectly beneficially owned
by a counterparty to such derivative security.
In
the event that, after a Flip-In Event, the Company is acquired in a merger or other business combination transaction or 50% or more of
its consolidated assets or earning power are sold, proper provisions will be made so that each holder of a Right (other than Rights beneficially
owned by an Acquiring Person which will have become void) will thereafter have the right to receive upon the exercise of a Right that
number of shares of Common Stock equal to the result obtained by dividing the Purchase Price (subject to adjustments) by 50% of the current
per share market price of the common stock of such person(s) (or its parent) with whom the Company has engaged in the foregoing transaction.
At
any time after a Flip-In Event and prior to the acquisition by an Acquiring Person of 50% or more in voting power of the shares of Voting
Stock then outstanding, the Board may, at its option, exchange the Rights (other than Rights owned by such Acquiring Person which will
have become void), in whole or in part, for shares of Common Stock, at an exchange ratio of one share of Common Stock per Right.
With
certain exceptions, no adjustment in the Purchase Price will be required unless such adjustment would require an increase or decrease
of at least 1% in such Purchase Price. No fractional shares of Preferred Stock or Common Stock will be issued (other than fractions of
Preferred Stock which are integral multiples of one one-thousandth of a share of Preferred Stock, which may, at the election of the Company,
be evidenced by depositary receipts), and in lieu thereof an adjustment in cash will be made based on the current market price of the
Preferred Stock or the Common Stock.
At
any time prior to a Flip-In Event, the Board may redeem all but not less than the then outstanding Rights at a price of $0.01 per Right,
subject to adjustment (the “Redemption Price”) payable, at the option of the Company, in cash, shares of Common Stock or
such other form of consideration as the Board shall determine. The redemption of the Rights may be made effective at such time, on such
basis and with such conditions as the Board in its sole discretion may establish. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.
For
so long as the Rights are then redeemable, the Company may, in its sole discretion, except with respect to the Redemption Price, supplement
or amend any provision in the Rights Agreement without the approval of any holders of the Rights. After the Rights are no longer redeemable,
the Company may, except with respect to the Redemption Price, supplement or amend the Rights Agreement without the approval of any holders
of Rights, provided that no such supplement or amendment may adversely affect the interests of holders of the Rights, cause the Rights
Agreement to become amendable contrary to the provisions of the Rights Agreement, or cause the Rights to again to become redeemable.
Until
a Right is exercised or exchanged, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
As
of October 1, 2023, there were 5,601,020 shares of Common Stock issued and outstanding, and an additional 195,000 shares of Common Stock
reserved for issuance under the Company’s existing benefit plans. As of October 1, 2023, there were 9,000,000 shares of Series
H Preferred Stock issued and outstanding, which shares were convertible into a total of approximately 350,004 shares of Common Stock.
The Common Stock and Series H Preferred Stock vote on all matters submitted to stockholders generally, as a single class, on an as-converted
to Common Stock basis. One hundred thousand shares of Preferred Stock have been reserved for issuance upon the exercise of the Rights.
The
Rights Agreement is attached hereto as Exhibit 4.1 and is incorporated herein by reference. The description of the Rights Agreement herein
does not purport to be complete and is qualified in its entirety by reference to Exhibit 4.1.
Item
3.03 |
Material
Modification to Rights of Security Holders. |
The
information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated into this Item 3.03 by reference.
Item
5.03 |
Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
In
connection with the adoption of the Rights Agreement, the Company has adopted a Certificate of Designation of Series A Junior Participating
Preferred Stock (the “Certificate of Designation”). The Certificate of Designation was filed with the Secretary of State
of the State of Delaware on September 30, 2023. See the description of the Rights Agreement in Item 1.01 of this Current Report on Form
8-K for a more complete description of the rights and preferences of the Preferred Stock.
The
Certificate of Designation is attached hereto as Exhibit 3.1 and is incorporated herein by reference. The description of the Certificate
of Designation herein does not purport to be complete and is qualified in its entirety by reference to Exhibit 3.1.
Item
7.01 |
Regulation
FD Disclosure. |
On
October 2, 2023, the Company issued a press release announcing the adoption of the Rights Agreement and the declaration of the dividend
of the Rights. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
In
accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, that
is furnished pursuant to this Item 7.01 shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange
Act, or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement
or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by
specific reference in such filing.
Item
9.01 |
Financial
Statements and Exhibits. |
(d)
Exhibits
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
|
Staffing
360 Solutions, Inc. |
|
|
|
|
By: |
/s/
Brendan Flood |
|
Name: |
Brendan
Flood |
Date:
October 2, 2023 |
Title: |
Chairman
and Chief Executive Officer |
Exhibit
3.1
CERTIFICATE
OF DESIGNATION
of
SERIES
A JUNIOR PARTICIPATING PREFERRED STOCK
of
Staffing
360 Solutions, Inc.
Pursuant
to Section 151 of the General Corporation
Law
of the State of Delaware
Staffing
360 Solutions, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), in
accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:
That
pursuant to the authority vested in the Board of Directors of the Corporation (the “Board of Directors”) in accordance with
the provisions of the Amended and Restated Certificate of Incorporation of the said Corporation (the “Certificate of Incorporation”),
the said Board of Directors on September 27, 2023, adopted the following resolution creating a series of 100,000
shares of Preferred Stock designated as “Series A Junior Participating Preferred Stock”:
RESOLVED,
that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of the Certificate
of Incorporation, a series of Preferred Stock, par value $0.00001 per share, of the Corporation be and hereby is created, and that the
designation and number of shares thereof and the voting and other powers, preferences and relative, participating, optional or other
rights of the shares of such series and the qualifications, limitations and restrictions thereof are as follows:
Series
A Junior Participating Preferred Stock
1. Designation
and Amount. There shall be a series of Preferred Stock that shall be designated as “Series A Junior Participating Preferred
Stock,” and the number of shares constituting such series shall be 100,000. Such
number of shares may be increased or decreased by resolution of the Board of Directors; provided, however, that no decrease shall reduce
the number of shares of Series A Junior Participating Preferred Stock to less than the number of shares then issued and outstanding plus
the number of shares issuable upon exercise of outstanding rights, options or warrants or upon conversion of outstanding securities issued
by the Corporation.
2. Dividends
and Distributions.
(A) Subject
to the prior and superior rights of the holders of any shares of any class or series of stock of the Corporation ranking prior and superior
to the shares of Series A Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior Participating
Preferred Stock, in preference to the holders of shares of any class or series of stock of the Corporation ranking junior to the Series
A Junior Participating Preferred Stock in respect thereof, shall be entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly dividends payable in cash on the 30th day of March, June, September
and December, in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Junior Participating
Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $10.00 and (b) the sum of (1) the Adjustment
Number (as defined below) times the aggregate per share amount of all cash dividends, plus (2) the Adjustment Number times the aggregate
per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common
Stock, par value $0.00001 per share, of the Corporation (the “Common Stock”), or a subdivision of the outstanding shares
of Common Stock (by reclassification or otherwise), in each case declared on the Common Stock since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction
of a share of Series A Junior Participating Preferred Stock. The “Adjustment Number” shall initially be 1,000. In the event
the Corporation shall at any time after October 2, 2023 (i) declare and pay any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then
in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number
by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(B) The
Corporation shall declare a dividend or distribution on the Series A Junior Participating Preferred Stock as provided in paragraph (A)
above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common
Stock).
(C) Dividends
shall begin to accrue and be cumulative on outstanding shares of Series A Junior Participating Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A Junior Participating Preferred Stock, unless the date of issue
of such shares is prior to the record date for the first Quarterly Dividend Payment Date; in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive
a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue
and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on
the shares of Series A Junior Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled
to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 60 days prior to the date
fixed for the payment thereof.
3. Voting
Rights. The holders of shares of Series A Junior Participating Preferred Stock shall have the following voting rights:
(A) Each
share of Series A Junior Participating Preferred Stock shall entitle the holder thereof to a number of votes equal to the Adjustment
Number on all matters submitted to a vote of the stockholders of the Corporation.
(B) Except
as required by law, by Section 3(C) and by Section 10 hereof, holders of Series A Junior Participating Preferred Stock shall have no
special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.
(C) If,
at the time of any annual meeting of stockholders for the election of directors, the equivalent of six quarterly dividends (whether or
not consecutive) payable on any share or shares of Series A Junior Participating Preferred Stock are in default, the number of directors
constituting the Board of Directors shall be increased by two. In addition to voting together with the holders of Common Stock for the
election of other directors of the Corporation, the holders of record of the Series A Junior Participating Preferred Stock, voting separately
as a class to the exclusion of the holders of Common Stock, shall be entitled at said meeting of stockholders (and at each subsequent
annual meeting of stockholders), unless all dividends in arrears on the Series A Junior Participating Preferred Stock have been paid
or declared and set apart for payment prior thereto, to vote for the election of two directors of the Corporation, the holders of any
Series A Junior Participating Preferred Stock being entitled to cast a number of votes per share of Series A Junior Participating Preferred
Stock as is specified in paragraph (A) of this Section 3. Each such additional director shall serve until the next annual meeting of
stockholders for the election of directors, or until his successor shall be elected and shall qualify, or until his right to hold such
office terminates pursuant to the provisions of this Section 3(C). Until the default in payments of all dividends which permitted the
election of said directors shall cease to exist, any director who shall have been so elected pursuant to the provisions of this Section
3(C) may be removed at any time, without cause, only by the affirmative vote of the holders of the shares of Series A Junior Participating
Preferred Stock at the time entitled to cast a majority of the votes entitled to be cast for the election of any such director at a special
meeting of such holders called for that purpose, and any vacancy thereby created may be filled by the vote of such holders. If and when
such default shall cease to exist, the holders of the Series A Junior Participating Preferred Stock shall be divested of the foregoing
special voting rights, subject to revesting in the event of each and every subsequent like default in payments of dividends. Upon the
termination of the foregoing special voting rights, the terms of office of all persons who may have been elected directors pursuant to
said special voting rights shall forthwith terminate, and the number of directors constituting the Board of Directors shall be reduced
by two. The voting rights granted by this Section 3(C) shall be in addition to any other voting rights granted to the holders of the
Series A Junior Participating Preferred Stock in this Section 3.
4. Certain
Restrictions.
(A) Whenever
quarterly dividends or other dividends or distributions payable on the Series A Junior Participating Preferred Stock as provided in Section
2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series
A Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare
or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred
Stock other than (A) such redemptions or purchases that may be deemed to occur upon the exercise of stock options, warrants or similar
rights or grant, vesting or lapse of restrictions on the grant of any other performance shares, restricted stock, restricted stock units
or other equity awards to the extent that such shares represent all or a portion of (x) the exercise or purchase price of such options,
warrants or similar rights or other equity awards and (y) the amount of withholding taxes owed by the recipient of such award in respect
of such grant, exercise, vesting or lapse of restrictions; (B) the repurchase, redemption, or other acquisition or retirement for value
of any such shares from employees, former employees, directors, former directors, consultants or former consultants of the Corporation
or their respective estate, spouse, former spouse or family member, pursuant to the terms of the agreements pursuant to which such shares
were acquired;
(ii) declare
or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Junior Participating Preferred Stock, except dividends paid ratably on the Series A Junior
Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled; or
(iii) purchase
or otherwise acquire for consideration any shares of Series A Junior Participating Preferred Stock, or any shares of stock ranking on
a parity with the Series A Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication
(as determined by the Board of Directors) to all holders of Series A Junior Participating Preferred Stock, or to such holders and holders
of any such shares ranking on a parity therewith, upon such terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective series and classes, shall determine will result in fair and
equitable treatment among the respective series or classes.
(B) The
Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock
of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at
such time and in such manner.
5. Reacquired
Shares. Any shares of Series A Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired promptly after the acquisition thereof. All such shares shall upon their retirement become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions
of the Board of Directors, subject to any conditions and restrictions on issuance set forth herein.
6. Liquidation,
Dissolution or Winding Up. (A) Upon any liquidation, dissolution or winding up of the Corporation, voluntary or otherwise, no distribution
shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior Participating Preferred
Stock shall have received an amount per share (the “Series A Liquidation Preference”) equal to the greater of (i) $10.00
plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment,
and (ii) the Adjustment Number times the per share amount of all cash and other property to be distributed in respect of the Common Stock
upon such liquidation, dissolution or winding up of the Corporation.
(B) In
the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other classes and series of stock of the Corporation, if any, that rank on a parity with the Series
A Junior Participating Preferred Stock in respect thereof, then the assets available for such distribution shall be distributed ratably
to the holders of the Series A Junior Participating Preferred Stock and the holders of such parity shares in proportion to their respective
liquidation preferences.
(C) Neither
the merger or consolidation of the Corporation into or with another entity nor the merger or consolidation of any other entity into or
with the Corporation shall be deemed to be a liquidation, dissolution or winding up of the Corporation within the meaning of this Section
6.
7. Consolidation,
Merger, Etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the outstanding
shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such
case each share of Series A Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount
per share equal to the Adjustment Number times the aggregate amount of stock, securities, cash and/or any other property (payable in
kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged.
8. No
Redemption. Shares of Series A Junior Participating Preferred Stock shall not be subject to redemption by the Corporation.
9. Ranking.
The Series A Junior Participating Preferred Stock shall rank junior to all other series of Preferred Stock as to the payment of dividends
and as to the distribution of assets upon liquidation, dissolution or winding up, unless the terms of any such series shall provide otherwise,
and shall rank senior to the Common Stock as to such matters.
10. Amendment.
At any time that any shares of Series A Junior Participating Preferred Stock are outstanding, the Certificate of Incorporation of
the Corporation shall not be amended, by merger, consolidation or otherwise, which would materially alter or change the powers, preferences
or special rights of the Series A Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of two-thirds of the outstanding shares of Series A Junior Participating Preferred Stock, voting separately as a class.
11. Fractional
Shares. Series A Junior Participating Preferred Stock may be issued in fractions of a share that shall entitle the holder, in proportion
to such holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the
benefit of all other rights of holders of Series A Junior Participating Preferred Stock.
IN
WITNESS WHEREOF, the undersigned has executed this Certificate this 29th day of September, 2023.
|
Staffing
360 Solutions, Inc. |
|
|
|
By: |
/s/
Brendan Flood |
|
Name: |
Brendan
Flood |
|
Title: |
Chief
Executive Officer |
Exhibit
4.1
Staffing
360 Solutions, Inc.
and
Securities
Transfer Corporation, as Rights Agent
RIGHTS
AGREEMENT
Dated
as of October 1, 2023
TABLE
OF CONTENTS
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Page |
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Section
1. |
Certain
Definitions |
1 |
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|
Section
2. |
Appointment
of Rights Agent |
10 |
|
|
|
Section
3. |
Issue
of Right Certificates. |
10 |
|
|
|
Section
4. |
Form
of Right Certificates |
12 |
|
|
|
Section
5. |
Countersignature
and Registration. |
12 |
|
|
|
Section
6. |
Transfer,
Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates; Uncertificated
Rights. |
13 |
|
|
|
Section
7. |
Exercise
of Rights, Purchase Price; Expiration Date of Rights. |
14 |
|
|
|
Section
8. |
Cancellation
and Destruction of Right Certificates |
16 |
|
|
|
Section
9. |
Availability
of Shares of Preferred Stock. |
16 |
|
|
|
Section
10. |
Preferred
Stock Record Date |
17 |
|
|
|
Section
11. |
Adjustment
of Purchase Price, Number and Kind of Shares and Number of Rights. |
18 |
|
|
|
Section
12. |
Certificate
of Adjusted Purchase Price or Number of Shares |
24 |
|
|
|
Section
13. |
Consolidation,
Merger or Sale or Transfer of Assets or Earning Power. |
25 |
|
|
|
Section
14. |
Fractional
Rights and Fractional Shares. |
28 |
|
|
|
Section
15. |
Rights
of Action |
29 |
|
|
|
Section
16. |
Agreement
of Right Holders |
30 |
|
|
|
Section
17. |
Right
Certificate Holder Not Deemed a Stockholder |
31 |
|
|
|
Section
18. |
Concerning
the Rights Agent. |
31 |
|
|
|
Section
19. |
Merger
or Consolidation or Change of Name of Rights Agent. |
32 |
|
|
|
Section
20. |
Duties
of Rights Agent |
32 |
|
|
|
Section
21. |
Change
of Rights Agent |
36 |
|
|
|
Section
22. |
Issuance
of New Right Certificates. |
37 |
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|
|
Section
23. |
Redemption. |
37 |
|
|
|
Section
24. |
Exchange. |
38 |
|
|
|
Section
25. |
Notice
of Certain Events. |
39 |
|
|
|
Section
26. |
Notices |
40 |
|
|
|
Section
27. |
Supplements
and Amendments. |
40 |
|
|
|
Section
28. |
Successors |
41 |
|
|
|
Section
29. |
Benefits
of this Agreement |
41 |
|
|
|
Section
30. |
Determinations
and Actions by the Board of Directors |
41 |
|
|
|
Section
31. |
Severability |
41 |
|
|
|
Section
32. |
Governing
Law |
42 |
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|
|
Section
33. |
Counterparts |
42 |
|
|
|
Section
34. |
Descriptive
Headings |
42 |
RIGHTS
AGREEMENT
Rights
Agreement, dated as of October 1, 2023 (“Agreement”), between Staffing 360
Solutions, Inc., a Delaware corporation (the “Company”), and Securities Transfer Corporation, a federally chartered trust
company, as Rights Agent (the “Rights Agent”).
The
Board of Directors of the Company has adopted resolutions creating a series of preferred stock designated as “Series A Junior Participating
Preferred Stock” and authorized and declared a dividend of one preferred share purchase right (a “Right”) for each
share of Common Stock (as hereinafter defined) and 0.3889 Rights for each share of Series H Convertible Preferred Stock (as defined below)
outstanding as of the Close of Business (as defined below) on October 21, 2023 (the “Record Date”), each Right initially
representing the right to purchase one one-thousandth (subject to adjustment) of a share of Preferred Stock (as hereinafter defined),
upon the terms and subject to the conditions herein set forth, and has further authorized and directed the issuance of one Right (subject
to adjustment as provided herein) with respect to each share of Common Stock and 0.3889 Rights for each share of Series H Convertible
Preferred Stock that shall become outstanding between the Record Date and the earlier of the Distribution Date and the Expiration Date
(as such terms are hereinafter defined); provided, however, that Rights may be issued with respect to shares of Common
Stock and Series H Convertible Preferred Stock that shall become outstanding after the Distribution Date and prior to the Expiration
Date in accordance with Section 22.
Accordingly,
in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:
Section
1. Certain Definitions. For purposes of this Agreement, the following terms have the meaning indicated:
(a) “Acquiring
Person” shall mean any Person (as such term is hereinafter defined) who or which, together with all of its Affiliates and Associates
(as each such term is hereinafter defined), shall be the Beneficial Owner (as such term is hereinafter defined) of 10% or more of the
shares of Voting Stock (as defined below) then outstanding, but shall not include (x) an Exempt Person (as such term is hereinafter defined)
or (y) a Passive Investor (as such term is hereinafter defined), so long as, in the case of this clause (y), such Person is not the Beneficial
Owner of 20% or more of the shares of Voting Stock then outstanding, but subject to the provisions in the definition of “Passive
Investor”; provided, however, that
(i) if
the Board of Directors of the Company determines that a Person who would otherwise be an “Acquiring Person” became the Beneficial
Owner of a number of shares of Voting Stock such that the Person would otherwise qualify as an “Acquiring Person” inadvertently
(including, without limitation, because (A) such Person was unaware that it beneficially owned that number of shares of Voting Stock
that would otherwise cause such Person to be an “Acquiring Person” or (B) such Person was aware of the extent of its Beneficial
Ownership of Voting Stock but had no actual knowledge of the consequences of such Beneficial Ownership under this Agreement) and without
any intention of obtaining, changing or influencing control of the Company, then such Person shall not be deemed to be or to have become
an “Acquiring Person” for any purposes of this Agreement unless and until such Person shall have failed to divest itself,
as soon as practicable (as determined by the Board of Directors of the Company), of Beneficial Ownership of a sufficient number of shares
of Voting Stock so that such Person would no longer otherwise qualify as an “Acquiring Person”;
(ii) if,
as of the date hereof or prior to the first public announcement of the adoption of this Agreement, any Person is or becomes the Beneficial
Owner of 10% (20% in the case of a Passive Investor) or more of the shares of Voting Stock outstanding, such Person shall not be deemed
to be or to become an “Acquiring Person” unless and until such time as such Person shall, after the first public announcement
of the adoption of this Agreement, become the Beneficial Owner of additional shares of Voting Stock representing 0.5 % or more of the
shares of Voting Stock then outstanding (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding
Voting Stock or pursuant to a split or subdivision of the outstanding Voting Stock), unless, upon becoming the Beneficial Owner of such
additional shares of Voting Stock, such Person is not then the Beneficial Owner of 10% (20% in the case of a Passive Investor) or more
of the shares of Voting Stock then outstanding;
(iii) no
Person shall become an “Acquiring Person” solely as a result of any unilateral grant of any security by the Company or through
the exercise of any options, warrants, rights or similar interests (including restricted stock) granted by the Company to its directors,
officers and employees; provided, however, that if a Person, together with its Affiliates and Associates, becomes the Beneficial
Owner of 10% (20% in the case of a Passive Investor) or more of the shares of Voting Stock of the Company then outstanding by reason
of a unilateral grant of a security by the Company, or through the exercise of any options, warrants, rights or similar interests (including
restricted stock) granted by the Company to its directors, officers and employees, then such Person shall nevertheless be deemed to be
an “Acquiring Person” if, subject to Section 1(a)(i), such Person, together with its Affiliates and Associates, thereafter
becomes the Beneficial Owner of one or more additional shares of Voting Stock (other than pursuant to a dividend or distribution paid
or made by the Company on the outstanding Voting Stock or pursuant to a split or subdivision of the outstanding Voting Stock or pursuant
to a grant or exercise described in this Section 1(a)(iii)), unless, upon becoming the Beneficial Owner of such additional Voting Stock,
such Person, together with its Affiliates and Associates, is not then the Beneficial Owner of 10% (20% in the case of a Passive Investor)
or more of the shares of Voting Stock then outstanding;
(iv) no
Person shall become an “Acquiring Person” solely as the result of an acquisition or cancellation of shares of Voting Stock
by the Company which, by reducing the number of shares of Voting Stock outstanding, increases the proportion of the shares of Voting
Stock beneficially owned by such Person, together with its Affiliates and Associates, to 10% (20% in the case of a Passive Investor)
or more of the Voting Stock then outstanding; provided, however, that if a Person, together with its Affiliates and Associates,
shall become the Beneficial Owner of 10% (20% in the case of a Passive Investor) or more of the shares of Voting Stock then outstanding
by reason of such share acquisitions by the Company and shall thereafter become the Beneficial Owner of one or more additional shares
of Voting Stock (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding Voting Stock or pursuant
to a split or subdivision of the outstanding Voting Stock or pursuant to a grant or exercise described in Section 1(a)(iii) above), then
such Person shall be deemed to be an “Acquiring Person” unless, upon becoming the Beneficial Owner of additional Voting Stock,
such Person, together with its Affiliates and Associates, does not beneficially own 10% (20% in the case of a Passive Investor) or more
of the Voting Stock then outstanding;
(v) by
means of share purchases directly from or issuances (including debt for equity exchanges) directly by the Company or indirectly through
an underwritten offering by the Company, in a transaction approved by the Board of Directors of the Company; provided, however,
that a Person shall be deemed to be an “Acquiring Person” if such Person (A) is or becomes the Beneficial Owner of 10% (20%
in the case of a Passive Investor) or more of the shares of Voting Stock then outstanding following such transaction and (B) subsequently
becomes the Beneficial Owner of one or more additional shares of Voting Stock (other than pursuant to a dividend or distribution paid
or made by the Company on the outstanding Voting Stock or pursuant to a split or subdivision of the outstanding Voting Stock or pursuant
to a grant or exercise described in Section 1(a)(iii) above) without the prior written consent of the Company and then beneficially owns
10% (20% in the case of a Passive Investor) or more of the shares of Voting Stock then outstanding;
(vi) if
such Person is a bona fide swaps dealer who has become an “Acquiring Person” as a result of its actions in the ordinary
course of its business that the Board of Directors of the Company determines, in its sole discretion, were taken without the intent or
effect of evading or assisting any other Person to evade the purposes and intent of this Agreement, or otherwise seeking to control or
influence the management or policies of the Company; and
(vii) no
Person shall become an “Acquiring Person” solely as the result of the acquisition by such Person of Beneficial Ownership
of shares of Voting Stock from an individual who, on the later of the date hereof and the first public announcement of this Agreement,
is the Beneficial Owner of 10% (20% in the case of a Passive Investor) or more of the Voting Stock then outstanding if such shares of
Voting Stock are received by such Person upon such individual’s death pursuant to such individual’s will or pursuant to a
charitable trust created by such individual for estate planning purposes.
Notwithstanding
anything to the contrary herein, with respect to any Person, for all purposes of this Agreement, any calculation of the number of shares
of Voting Stock outstanding at any particular time, including for purposes of determining the particular percentage of the outstanding
shares of Voting Stock of which any such Person is the Beneficial Owner, shall include the number of shares of Voting Stock not outstanding
at the time of such calculation that such Person is otherwise deemed to beneficially own for purposes of this Agreement, but the number
of shares of Voting Stock not outstanding that such Person is otherwise deemed to beneficially own for purposes of this Agreement shall
not be included for the purpose of computing the percentage of the outstanding shares of Voting Stock beneficially owned by any other
Person (unless such other Person is also deemed to beneficially own for purposes of this Agreement such shares of Voting Stock not outstanding).
(b) “Affiliate”
and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act (as such term is hereinafter defined).
(c) A
Person shall be deemed the “Beneficial Owner” of, shall be deemed to have “Beneficial Ownership” of and shall
be deemed to “beneficially own” any securities:
(i) which
such Person or any of such Person’s Affiliates and Associates is deemed to beneficially own, directly or indirectly, within the
meaning of Rule 13d-3 of the General Rules and Regulations under the Exchange Act;
(ii) which
such Person or any of such Person’s Affiliates and Associates has: (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time or upon the satisfaction of one or more conditions) pursuant to any agreement, arrangement
or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide
public offering of securities), or upon the exercise of conversion rights (other than any shares of Voting Stock issuable upon conversion
of another class or series of outstanding Voting Stock), exchange rights, rights (other than the Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, (w) securities tendered
pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates and Associates until
such tendered securities are accepted for purchase, (x) securities which such Person has a right to acquire upon the exercise of Rights
at any time prior to the time that any Person becomes an Acquiring Person, (y) securities issuable upon the exercise of Rights from and
after the time that any Person becomes an Acquiring Person if such Rights were acquired by such first Person or any of such first Person’s
Affiliates and Associates prior to the Distribution Date or pursuant to Section 3(a) or Section 22 hereof (“Original Rights”)
or pursuant to Section 11(i) or Section 11(n) with respect to an adjustment to Original Rights, or (z) securities which such Person or
any of such Person’s Affiliates and Associates may acquire, does or do acquire or may be deemed to have the right to acquire, pursuant
to any merger or other acquisition agreement between the Company and such Person (or one or more of such Person’s Affiliates and
Associates) if such agreement has been approved by the Board of Directors of the Company prior to such Person’s becoming an Acquiring
Person; or (B) the right to vote pursuant to any agreement, arrangement or understanding (whether or not in writing); provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, any security by reason of such agreement,
arrangement or understanding if the agreement, arrangement or understanding to vote such security (1) arises solely from a revocable
proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations promulgated under the Exchange Act and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report);
(iii) which
are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate of such other Person) and with respect
to which such first Person or any of such first Person’s Affiliates or Associates has any agreement, arrangement or understanding
(whether or not in writing) (other than customary agreements with and between underwriters and selling group members with respect to
a bona fide public offering of securities) for the purpose of acquiring, holding, voting (except to the extent contemplated by the proviso
to Section 1(c)(ii)(B)) or disposing of such securities; or
(iv) which
are beneficially owned, directly or indirectly, by a Counterparty (or any of such Counterparty’s Affiliates or Associates) under
any Derivatives Contract (without regard to any short or similar position under the same or any other Derivatives Contract) to which
such Person or any of such Person’s Affiliates or Associates is a Receiving Party (as such terms are hereinafter defined); provided,
however, that the number of shares of Voting Stock that a Person is deemed to beneficially own pursuant to this clause (iv) in
connection with a particular Derivatives Contract shall not exceed the number of Notional Voting Shares (as such term is hereinafter
defined) with respect to such Derivatives Contract; provided, further, that the number of securities beneficially owned
by each Counterparty (including its Affiliates and Associates) under a Derivatives Contract shall for purposes of this clause (iv) be
deemed to include all securities that are beneficially owned, directly or indirectly, by any other Counterparty (or any of such other
Counterparty’s Affiliates or Associates) under any Derivatives Contract to which such first Counterparty (or any of such first
Counterparty’s Affiliates or Associates) is a Receiving Party, with this proviso being applied to successive Counterparties as
appropriate
provided,
however, that no Person who is an officer, director or employee of an Exempt Person shall be deemed, solely by reason of such
Person’s status or authority as such, to be the “Beneficial Owner” of, to have “Beneficial Ownership” of
or to “beneficially own” any securities that are “beneficially owned” (as defined in this Section l(d)), including,
without limitation, in a fiduciary capacity, by an Exempt Person or by any other such officer, director or employee of an Exempt Person.
Notwithstanding
anything in this definition of “Beneficial Owner” to the contrary, (x) no Person engaged in business as an underwriter of
securities shall be the “Beneficial Owner” of any securities acquired through such Person’s participation in good faith
in a firm commitment underwriting until the expiration of forty (40) calendar days after the date of such acquisition; (y) no Person
shall be deemed the “Beneficial Owner” of any security as a result of an agreement, arrangement or understanding to vote
such security that would otherwise render such Person the Beneficial Owner of such security if such agreement, arrangement or understanding
is not also then reportable on Schedule 13D and arises solely from a revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in accordance with, the applicable provisions of the General Rules and Regulations
under the Exchange Act; and (z) no Person shall be deemed the “Beneficial Owner” of any security if such Person is a “clearing
agency” (as defined in Section 3(a)(23) of the Exchange Act) and has acquired such security solely as a result of such status.
(d) “Book
Entry” shall mean an uncertificated book entry for the Voting Stock.
(e) “Business
Day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the State of New York or the
city in which the principal office of the Rights Agent is located are authorized or obligated by law or executive order to close; provided,
that banks shall not be deemed to be authorized or obligated to be closed due to a “shelter in place,” “non-essential
employee” or similar closure of physical branch locations at the direction of any governmental authority if such banks’ electronic
funds transfer systems (including for wire transfers) are open for use by customers on such day.
(f) “Certificate
of Designation” shall have the meaning set forth in Section 1(h) hereof.
(g) “Certificate
of Incorporation” shall mean the Amended and Restated Certificate of Incorporation of the Company, as filed with the Secretary
of State of the State of Delaware on June 15, 2017, as further amended by the Certificate of Amendment to the Amended and Restated Certificate
of Incorporation of the Company, as filed with the Secretary of State of the State of Delaware on January 3, 2018, as further amended
by the Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company, as filed with the Secretary
of State of the State of Delaware on June 30, 2021, as further amended by the Certificate of Amendment to the Amended and Restated Certificate
of Incorporation of the Company, as filed with the Secretary of State of the State of Delaware on December 27, 2021, as further amended
by the Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series H Convertible Preferred Stock
of the Company, as filed with the Secretary of State of the State of Delaware on May 23, 2022, and together with the Certificate of Designation
of the Series A Junior Participating Preferred Stock of the Company adopted contemporaneously with the approval of this Agreement and
substantially in the form attached hereto as Exhibit A (the “Certificate of Designation”), as the same may hereafter be amended
and/or restated.
(h) “Close
of Business” on any given date shall mean 5:00 P.M., New York City time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business Day.
(i) “Common
Stock” when used with reference to the Company or without reference shall mean the Common Stock, presently par value $0.00001 per
share of the Company. “Common Stock” when used with reference to any Person other than the Company shall mean the common
stock (or, in the case of any entity other than a corporation, the equivalent equity interest) with the greatest voting power of such
other Person or, if such other Person is a Subsidiary (as such term is hereinafter defined) of another Person, the Person or Persons
which ultimately control such first-mentioned Person.
(j) “Common
Stock Equivalents” shall have the meaning set forth in Section 11(a)(iii) hereof.
(k) “Current
Value” shall have the meaning set forth in Section 11(a)(iii) hereof.
(l) “Derivatives
Contract” shall mean a contract between two parties (the “Receiving Party” and the “Counterparty”) that
is designed to produce economic benefits and risks to the Receiving Party that correspond substantially to the ownership by the Receiving
Party of a number of shares of Voting Stock specified or referenced in such contract (the number of shares corresponding to such economic
benefits and risks, the “Notional Voting Shares”), regardless of whether (i) obligations under such contract are required
or permitted to be settled through the delivery of cash, shares of Voting Stock or other property or (ii) such contract conveys any voting
rights in shares of Voting Stock, without regard to any short or similar position under the same or any other Derivative Contract. For
the avoidance of doubt, interests in broad-based index options, broad-based index futures and broad-based publicly traded market baskets
of stocks approved for trading by the appropriate federal governmental authority shall not be deemed to be Derivatives Contracts.
(m) “Distribution
Date” shall have the meaning set forth in Section 3 hereof.
(n) “Equivalent
Preferred Shares” shall have the meaning set forth in Section 11(b) hereof.
(o) “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.
(p) “Exempt
Person” shall mean the Company or any Subsidiary of the Company, in each case including, without limitation, in its fiduciary capacity,
or any employee benefit plan of the Company or of any Subsidiary of the Company, or any entity or trustee holding (or acting in a fiduciary
capacity in respect of) Voting Stock for or pursuant to the terms of any such plan or for the purpose of funding any such plan or funding
other employee benefits for employees of the Company or of any Subsidiary of the Company.
(q) “Exchange
Ratio” shall have the meaning set forth in Section 24 hereof.
(r) “Expiration
Date” shall have the meaning set forth in Section 7 hereof.
(s) “Final
Expiration Date” shall have the meaning set forth in Section 7 hereof.
(t) “Flip-In
Event” shall have the meaning set forth in Section 11(a)(ii) hereof.
(u) “Minimum
Tender Condition” shall have the meaning set forth in Section 1(hh) hereof.
(v) “NASDAQ”
shall mean The NASDAQ Stock Market LLC.
(w) “New
York Stock Exchange” shall mean the New York Stock Exchange, Inc.
(x) “Passive
Investor” shall mean any Person who or which has reported or is required to report Beneficial Ownership of shares of Voting Stock
of the Company on Schedule 13G under the Exchange Act (or any comparable or successor report), but only so long as (i) such Person is
eligible to report such ownership on Schedule 13G under the Exchange Act (or any comparable or successor report), and (ii) such Person
has not reported and is not required to report such ownership on Schedule 13D under the Exchange Act (or any comparable or successor
report) and such Person does not hold shares of Voting Stock of the Company on behalf of any other Person who is required to report Beneficial
Ownership of shares of Voting Stock of the Company on such Schedule 13D; provided that if a formerly Passive Investor should report or
become required to report Beneficial Ownership of shares of Voting Stock of the Company on Schedule 13D, that formerly Passive Investor
will not be deemed to be or to have become an Acquiring Person if (A) at the time it reports or becomes required to report Beneficial
Ownership of shares of Voting Stock of the Company on Schedule 13D, that formerly Passive Investor has Beneficial Ownership of less than
10% of the Voting Stock then outstanding; or (B) (1) it divests as promptly as practicable (but in any event not later than ten calendar
days after becoming required to report on Schedule 13D) Beneficial Ownership of a sufficient number of shares of Voting Stock of the
Company so that it would no longer be an “Acquiring Person,” as defined herein, and (2) prior to reducing its Beneficial
Ownership of shares of Voting Stock of the Company then outstanding to below 10%, it does not increase its Beneficial Ownership of the
Voting Stock then outstanding (other than by reason of share purchases by the Company) above such Person’s lowest Beneficial Ownership
of the Voting Stock then outstanding at any time during such ten calendar day period.
(y) “Person”
shall mean any individual, firm, corporation, partnership, limited liability company, trust or other entity, and shall include any successor
(by merger or otherwise) to such entity.
(z) “Preferred
Stock” shall mean the Series A Junior Participating Preferred Stock, par value $0.00001 per share, of the Company having the rights
and preferences set forth in the Certificate of Designation.
(aa) “Principal
Party” shall have the meaning set forth in Section 13(b) hereof.
(bb) “Purchase
Price” shall have the meaning set forth in Section 7(b) hereof.
(cc) “Record
Date” shall have the meaning set forth in the recitals hereto.
(dd) “Redemption
Date” shall have the meaning set forth in Section 7 hereof.
(ee) “Redemption
Price” shall have the meaning set forth in Section 23 hereof.
(ff) “Right”
shall have the meaning set forth in the recitals hereto.
(gg) “Right
Certificate” shall have the meaning set forth in Section 3 hereof.
(hh) “Securities
Act” shall mean the Securities Act of 1933, as amended.
(ii) “Section
11(a)(ii) Trigger Date” shall have the meaning set forth in Section 11(a)(iii) hereof.
(jj) “Series
H Convertible Preferred Stock” shall mean the Series H Convertible Preferred Stock, par value $0.00001 per share, of the Company
having the rights and preferences set forth in the Amended and Restated Certificate of Designation of Preferences, Rights and Limitations
of Series H Convertible Preferred Stock of the Company, as the same may be amended and/or restated from time to time.
(kk) “Signature
Guarantee” shall have the meaning set forth in Section 6(a) hereof.
(ll) “Spread”
shall have the meaning set forth in Section 11(a)(iii) hereof.
(mm) “Stock
Acquisition Date” shall mean the first date of public announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person
has become such, or such other date, as determined by the Board of Directors of the Company, on which a Person has become an Acquiring
Person.
(nn) “Subsidiary”
of any Person shall mean any corporation or other entity of which securities or other ownership interests having ordinary voting power
sufficient to elect a majority of the board of directors or other persons performing similar functions are beneficially owned, directly
or indirectly, by such Person, and any corporation or other entity that is otherwise controlled by such Person.
(oo) “Substitution
Period” shall have the meaning set forth in Section 11(a)(iii) hereof.
(pp) “Trading
Day” shall have the meaning set forth in Section 11(d)(i) hereof.
(qq) “Trust”
shall have the meaning set forth in Section 24(a) hereof.
(rr) “Trust
Agreement” shall have the meaning set forth in Section 24(a) hereof.
(ss) “Voting
Stock” shall mean (i) the outstanding Common Stock, (ii) the outstanding Series H Convertible Preferred Stock, and (iii) any other
shares of capital stock of the Company outstanding from time to time and entitled to vote generally in the election of directors or entitled
generally to vote together with the Common Stock in respect of a merger, consolidation, sale of all or substantially all of the Company’s
assets, liquidation, dissolution or winding up. For purposes of this Agreement, a stated percentage of the Voting Stock shall mean a
number of shares of Voting Stock as shall equal in voting power to that stated percentage of the total voting power of the then outstanding
Voting Stock in the election of directors generally. Any determination required to be made by the Board of Directors for purposes of
applying the definitions contained in this Section 1 shall be made by a majority of the Board of Directors, which determination shall
be binding on the Rights Agent and the holders of the Rights.
Section
2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company in accordance with
the express terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint
such co-Rights Agents as it may deem necessary or desirable (the term “Rights Agent” being used herein to refer, collectively,
to the Rights Agent together with any such co-Rights Agents), upon ten (10) days’ prior written notice to the Rights Agent. In
the event the Company appoints one or more co-Rights Agents, the respective duties of the Rights Agent and any co-Rights Agents shall
be as the Company shall reasonably determine, provided that such duties are consistent with the terms and conditions of this Agreement
and that contemporaneously with such appointment the Company shall notify, in writing, the Rights Agent and any co-Rights Agents of any
such duties. The Rights Agent shall have no duty to supervise, and shall in no event be liable for, the acts or omissions of any such
co-Rights Agents.
Section
3. Issue of Right Certificates.
(a) Until
the Close of Business on the earlier of (i) the tenth Business Day after the Stock Acquisition Date or (ii) the tenth Business Day (or
such later date as may be determined by action of the Board of Directors of the Company prior to such time as any Person becomes an Acquiring
Person) after the date of the commencement by any Person (other than an Exempt Person) of, or of the first public announcement of the
intention of any Person (other than an Exempt Person) to commence, a tender or exchange offer the consummation of which would result
in any Person (other than an Exempt Person) becoming an Acquiring Person (the earlier of such dates being herein referred to as the “Distribution
Date”, provided, however, that the Distribution Date shall in no event be prior to the Record Date), (x) the Rights
will be evidenced (subject to the provisions of Sections 3(b) and 3(c) hereof) by the certificates representing the Voting Stock registered
in the names of the holders thereof (or by Book Entry shares in respect of such Voting Stock) and not by separate Right Certificates,
and (y) the Rights will be transferable only in connection with the transfer of Voting Stock. As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will countersign and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, insured, postage-prepaid mail, to each record holder of Voting Stock as of the
Close of Business on the Distribution Date (other than any Acquiring Person or any Associate or Affiliate of an Acquiring Person), at
the address of such holder shown on the records of the Company, a Right Certificate, in substantially the form of Exhibit B hereto (a
“Right Certificate”), evidencing one Right (subject to adjustment as provided herein) for each share of Common Stock so held
and 0.3889 Rights (subject to adjustment as provided herein) for each share of Series H Convertible Preferred Stock so held. As of the
Distribution Date, the Rights will be evidenced solely by such Right Certificates.
(b) With
respect to certificates representing Voting Stock (or Book Entry shares of Voting Stock) outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates registered in the names of the holders thereof (or such Book Entry
shares). Until the Distribution Date (or, if earlier, the Expiration Date), the surrender for transfer of any certificate representing
Voting Stock (or any Book Entry shares of Voting Stock) outstanding on the Record Date shall also constitute the transfer of the Rights
associated with the Voting Stock represented thereby.
(c) Rights
shall, without any further action, be issued in respect of all shares of Voting Stock issued or disposed of by the Company after the
Record Date but prior to the earlier of the Distribution Date and the Expiration Date, or in certain circumstances provided in Section
22 hereof, after the Distribution Date. Certificates issued for Voting Stock after the Record Date but prior to the earlier of the Distribution
Date and the Expiration Date, or in certain circumstances provided in Section 22 hereof, after the Distribution Date shall have impressed
on, printed on, written on or otherwise affixed to them the following legend:
This
certificate also evidences and entitles the holder hereof to certain Rights as set forth in a Rights Agreement between Staffing 360 Solutions,
Inc. (the “Company”) and Securities Transfer Corporation or any successor Rights Agent (the “Rights Agent”) dated
as of October 1, 2023 and as amended from time to time (the “Rights Agreement”), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal executive offices of the Company. Under certain circumstances, as
set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate.
The Company will mail to the holder of this certificate a copy of the Rights Agreement without charge after receipt of a written request
therefor. Under certain circumstances, as set forth in the Rights Agreement, Rights owned by or transferred to any Person who is or
becomes an Acquiring Person (as defined in the Rights Agreement) and certain transferees thereof will become null and void and will no
longer be transferable.
With
respect to any Book Entry shares of Voting Stock, such legend shall be included in a notice to the record holder of such shares in accordance
with applicable law. With respect to such certificates containing the foregoing legend, or any notice of the foregoing legend delivered
to holders of Book Entry shares, until the Distribution Date, the Rights associated with the Voting Stock represented by such certificates
or Book Entry shares shall be evidenced by such certificates or Book Entry shares alone, and the surrender for transfer of any such certificate
or Book Entry share, except as otherwise provided herein, shall also constitute the transfer of the Rights associated with the Voting
Stock represented thereby. In the event that the Company purchases or otherwise acquires (including pursuant to a conversion of outstanding
shares of any class or series of Voting Stock into another class or series of Voting Stock) any Voting Stock after the Record Date but
prior to the Distribution Date, any Rights associated with such Voting Stock shall be deemed canceled and retired so that the Company
shall not be entitled to exercise any Rights associated with the Voting Stock which are no longer outstanding.
Notwithstanding
this paragraph (c), neither the omission of a legend nor the failure to deliver the notice of such legend required hereby shall affect
the enforceability of any part of this Agreement or the rights of any holder of the Rights.
Section
4. Form of Right Certificates. The Right Certificates (and the forms of election to purchase shares and of assignment to be printed
on the reverse thereof) shall be substantially in the form set forth in Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate (but which do not affect
the rights, duties, liabilities or responsibilities of the Rights Agent) and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange or interdealer quotation system on which the Rights may from time to time be listed or quoted, or to conform to
usage. Subject to the provisions of this Agreement, each Right Certificate shall entitle the holder thereof to purchase such number of
one one-thousandths of a share of Preferred Stock as shall be set forth therein at the Purchase Price, but the number of such one one-thousandths
of a share of Preferred Stock and the Purchase Price shall be subject to adjustment as provided herein.
Section
5. Countersignature and Registration.
(a) The
Right Certificates shall be executed on behalf of the Company by the President, the Vice President, the Chief Financial Officer, the
Treasurer, the Secretary or any other duly authorized officer of the Company, either manually or by facsimile signature, shall have affixed
thereto the Company’s seal or a facsimile thereof and shall be attested by the Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be countersigned manually or by facsimile or other electronic signature by the Rights
Agent and shall not be valid for any purpose unless countersigned. In case any officer of the Company who shall have signed any of the
Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery
by the Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the Person who signed such Right Certificates had not ceased to be such officer of the Company;
and any Right Certificate may be signed on behalf of the Company by any Person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution of this Agreement
any such Person was not such an officer.
(b) Following
the Distribution Date, the Rights Agent will keep or cause to be kept, at an office or agency designated for such purpose, books for
registration and transfer of the Right Certificates issued hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates and the date of each
of the Right Certificates.
Section
6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates; Uncertificated
Rights.
(a) Subject
to the provisions of this Agreement, at any time after the Distribution Date and prior to the Expiration Date, any Right Certificate
or Right Certificates (other than Right Certificates representing Rights that have become void pursuant to Section 11(a)(ii) hereof,
that have been redeemed pursuant to Section 23 hereof or that have been exchanged pursuant to Section 24 hereof) may be transferred,
split up, combined or exchanged for another Right Certificate or Right Certificates, entitling the registered holder to purchase a like
number of one one-thousandths of a share of Preferred Stock as the Right Certificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Right Certificate or Right Certificates
shall make such request in writing delivered to the Rights Agent, and shall surrender the Right Certificate or Right Certificates to
be transferred, split up, combined or exchanged, with the form of assignment and certificate contained therein properly completed and
duly executed and with all signatures guaranteed from an eligible guarantor institution participating in a signature guarantee program
approved by the Securities Transfer Association (a “Signature Guarantee”), at the office or agency of the Rights Agent designated
for such purpose. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer,
split up, combination or exchange of any such surrendered Rights Certificate until the registered holder has properly completed and duly
executed the certificate contained in the form of assignment on the reverse side of such Rights Certificate accompanied by a Signature
Guarantee and such other documentation as the Rights Agent reasonably requests. Thereupon the Rights Agent shall, subject to Section
7(e), Section 14 and Section 24, countersign and deliver to the Person entitled thereto a Rights Certificate or Rights Certificates,
as the case may be, as so requested. The Company may require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or exchange of Rights Certificates. If and to the extent the Company
does require payment of any such taxes or charges, the Company shall give the Rights Agent prompt written notice thereof and the Rights
Agent shall not be obligated to deliver any Rights Certificate unless and until it is satisfied that all such payments have been made,
and the Rights Agent shall forward any such sum collected by it to the Company or to such Persons as the Company specifies by written
notice. The Rights Agent shall have no duty or obligation to take any action with respect to a Rights holder under this Agreement that
requires the payment by such Rights holder of applicable taxes and/or charges unless and until the Rights Agent is satisfied that all
such taxes and/or charges have been paid.
(b) Subject
to the provisions of this Agreement, at any time after the Distribution Date and prior to the Expiration Date, upon receipt by the Company
and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate,
and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will make and deliver a new Right Certificate of like tenor to the Rights Agent for delivery to
the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
(c) Notwithstanding
any other provision hereof, the Company and the Rights Agent may amend this Agreement to provide for uncertificated Rights in addition
to or in place of Rights evidenced by Right Certificates, to the extent permitted by applicable law.
Section
7. Exercise of Rights, Purchase Price; Expiration Date of Rights.
(a) Except
as otherwise provided herein, the Rights shall become exercisable on the Distribution Date, and thereafter the registered holder of any
Right Certificate (other than Right Certificates representing Rights that have become void pursuant to Section 11(a)(ii) hereof, that
have been redeemed pursuant to Section 23 hereof or that have been exchanged pursuant to Section 24 hereof) may, subject to Section 11(a)(ii)
hereof and except as otherwise provided herein, exercise the Rights evidenced thereby in whole or in part upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof duly executed, to the Rights Agent at the office or agency
of the Rights Agent designated for such purpose, accompanied by a Signature Guarantee and such other documentation as the Rights Agent
may reasonably request together with payment of the aggregate Purchase Price with respect to the total number of one one-thousandths
of a share of Preferred Stock (or other securities, cash or other assets, as the case may be) as to which the Rights are exercised, at
any time which is both after the Distribution Date and prior to the time (the “Expiration Date”) that is the earliest of
(i) the Close of Business on October 2, 2026 (the “Final Expiration Date”) or such later date as may be established by the
Board of Directors of the Company prior to the expiration of the Rights, (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof (the “Redemption Date”), (iii) the closing of any merger or other acquisition transaction involving the
Company pursuant to an agreement of the type described in Sections 1(c)(ii)(A)(z) and 13(f) at which time the Rights are terminated,
or (iv) the time at which such Rights are exchanged as provided in Section 24 hereof.
(b) The
Purchase Price shall be initially $2.75 for each one one-thousandth of a share of Preferred Stock purchasable upon the exercise of a
Right. The Purchase Price and the number of one one-thousandths of a share of Preferred Stock or other securities or property to be acquired
upon exercise of a Right shall be subject to adjustment from time to time as provided in Sections 11 and 13 hereof and shall be payable
in lawful money of the United States of America in accordance with paragraph (c) of this Section 7.
(c) Except
as otherwise provided herein, upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase
duly executed, accompanied by payment of the aggregate Purchase Price for the shares of Preferred Stock (or other securities, cash or
other assets, as the case may be) to be purchased and an amount equal to any applicable transfer tax required to be paid by the holder
of such Right Certificate in accordance with Section 9 hereof, in cash or by certified check, cashier’s check or money order payable
to the order of the Company, the Rights Agent shall thereupon promptly (i) (A) requisition from any transfer agent of the Preferred Stock,
or make available if the Rights Agent is the transfer agent for the Preferred Stock, certificates for the number of shares of Preferred
Stock to be purchased, and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B) requisition
from a depositary agent appointed by the Company depositary receipts representing interests in such number of one one-thousandths of
a share of Preferred Stock as are to be purchased (in which case certificates for the Preferred Stock represented by such receipts shall
be deposited by the transfer agent with the depositary agent), and the Company hereby directs any such depositary agent to comply with
such request, (ii) when appropriate, requisition from the Company the amount of cash to be paid in lieu of issuance of fractional shares
in accordance with Section 14 hereof, (iii) promptly after receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may be designated
by such holder and (iv) when appropriate, after receipt, promptly deliver such cash to or upon the order of the registered holder of
such Right Certificate.
(d) Except
as otherwise provided herein, in case the registered holder of any Right Certificate shall exercise less than all of the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to the exercisable Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certificate or to his duly authorized assigns, subject to the provisions of Section
14 hereof.
(e) Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder of Rights upon the occurrence of any purported transfer or exercise of Rights pursuant to Section 6 hereof
or this Section 7 unless such registered holder shall have (i) completed and signed the certificate contained in the form of assignment
or form of election to purchase set forth on the reverse side of the Right Certificate surrendered for such transfer or exercise and
(ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) thereof as the Company shall
reasonably request.
Section
8. Cancellation and Destruction of Right Certificates. All Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights Agent, shall be canceled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired
by the Company otherwise than upon the exercise thereof. At the expense of the Company, the Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the Company, destroy such canceled Right Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section
9. Availability of Shares of Preferred Stock.
(a) The
Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued shares of Preferred
Stock or any shares of Preferred Stock held in its treasury, the number of shares of Preferred Stock that will be sufficient to permit
the exercise in full of all outstanding Rights.
(b) So
long as the shares of Preferred Stock issuable upon the exercise of Rights may be listed or admitted to trading on any national securities
exchange, the Company shall use its best efforts to cause, from and after such time as the Rights become exercisable, all shares reserved
for such issuance to be listed or admitted to trading on such exchange upon official notice of issuance upon such exercise.
(c) From
and after such time as the Rights become exercisable, the Company shall use its best efforts, if then necessary to permit the issuance
of shares of Preferred Stock upon the exercise of Rights, to register and qualify such shares of Preferred Stock under the Securities
Act and any applicable state securities or “Blue Sky” laws (to the extent exemptions therefrom are not available), cause
such registration statement and qualifications to become effective as soon as possible after such filing and keep such registration and
qualifications effective (with a prospectus at all times meeting the requirements of the Securities Act) until the earlier of the date
as of which the Rights are no longer exercisable for such securities and the Expiration Date. The Company may temporarily suspend (with
prompt written notice to the Rights Agent), for a period of time not to exceed 120 days, the exercisability of the Rights in order to
prepare and file a registration statement under the Securities Act and permit it to become effective. Upon any such suspension, the Company
shall issue a public announcement (with prompt written notice to the Rights Agent) stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement (with prompt written notice to the Rights Agent) at such time as the suspension
is no longer in effect. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction
unless the requisite qualification in such jurisdiction shall have been obtained and until a registration statement under the Securities
Act shall have been declared effective, unless an exemption therefrom is available.
(d) The
Company covenants and agrees that it will take all such action as may be necessary to ensure that all shares of Preferred Stock (or other
securities of the Company) delivered upon exercise of Rights shall, at the time of delivery of the certificates therefor (subject to
payment of the Purchase Price), be duly and validly authorized and issued and fully paid and nonassessable shares.
(e) The
Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Right Certificates or of any shares of Preferred Stock (or other securities
of the Company) upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax which may be payable
in respect of any transfer or delivery of Right Certificates to a Person other than, or the issuance or delivery of certificates or depositary
receipts for the Preferred Stock (or other securities of the Company) in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or deliver any certificates or depositary receipts for Preferred Stock
(or other securities of the Company) upon the exercise of any Rights until any such tax shall have been paid (any such tax being payable
by that holder of such Right Certificate at the time of surrender) or until it has been established to the Company’s reasonable
satisfaction that no such tax is due.
Section
10. Preferred Stock Record Date. Each Person in whose name any certificate for Preferred Stock is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record of the shares of Preferred Stock (or other securities of
the Company) represented thereby on, and such certificate shall be dated, the date upon which the Right Certificate evidencing such Rights
was duly surrendered and payment of the Purchase Price (and any applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the Preferred Stock transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding Business
Day on which the Preferred Stock transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder
of a Right Certificate shall not be entitled to any rights of a holder of Preferred Stock for which the Rights shall be exercisable,
including, without limitation, the right to vote or to receive dividends or other distributions, and shall not be entitled to receive
any notice of any proceedings of the Company, except as provided herein.
Section
11. Adjustment of Purchase Price, Number and Kind of Shares and Number of Rights. The Purchase Price, the number of shares of
Preferred Stock or other securities or property purchasable upon exercise of each Right and the number of Rights outstanding are subject
to adjustment from time to time as provided in this Section 11.
(a) (i)
In the event the Company shall at any time after the date of this Agreement (A) declare and pay a dividend on the Preferred Stock payable
in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller
number of shares of Preferred Stock or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including
any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the number and kind of shares of capital stock issuable upon exercise of a Right
as of the record date for such dividend or the effective date of such subdivision, combination or reclassification shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares
of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer
books of the Company were open, the holder would have owned upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification.
(ii) Subject
to Section 24 of this Agreement, in the event any Person becomes an Acquiring Person (the first occurrence of such event being referred
to hereinafter as the “Flip-In Event”), then (A) the Purchase Price shall be adjusted to be the Purchase Price in effect
immediately prior to the Flip-In Event multiplied by the number of one one-thousandths of a share of Preferred Stock for which a Right
was exercisable immediately prior to such Flip-In Event, whether or not such Right was then exercisable, and (B) each holder of a Right,
except as otherwise provided in this Section 11(a)(ii) and Section 11(a)(iii) hereof, shall thereafter have the right to receive, upon
exercise thereof at a price equal to the Purchase Price (as so adjusted), in accordance with the terms of this Agreement and in lieu
of shares of Preferred Stock, such number of shares of Common Stock as shall equal the result obtained by dividing the Purchase Price
(as so adjusted) by 50% of the current per share market price of the Common Stock (determined pursuant to Section 11(d) hereof) on the
date of such Flip-In Event; provided, however, that the Purchase Price (as so adjusted) and the number of shares of Common
Stock so receivable upon exercise of a Right shall, following the Flip-In Event, be subject to further adjustment as appropriate in accordance
with Section 11(f) hereof. Notwithstanding anything in this Agreement to the contrary, however, from and after the Flip-In Event, any
Rights that are beneficially owned by (x) any Acquiring Person (or any Affiliate or Associate of any Acquiring Person), (y) a transferee
of any Acquiring Person (or of any such Affiliate or Associate) who becomes a transferee after the Flip-In Event or (z) a transferee
of any Acquiring Person (or of any such Affiliate or Associate) who became a transferee prior to or concurrently with the Flip-In Event
pursuant to either (I) a transfer (whether or not for consideration) from the Acquiring Person to holders of its equity securities or
to any Person with whom it has any continuing agreement, arrangement or understanding (whether or not in writing) regarding the transferred
Rights or (II) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding
which has the purpose or effect of avoiding the provisions of this paragraph, and subsequent transferees, either direct transferees or
transferees through one or more intermediate transferees, of such Persons, shall be void without any further action and any holder of
such Rights shall thereafter have no rights whatsoever with respect to such Rights under any provision of this Agreement. The Company
shall use all reasonable efforts to ensure that the provisions of this Section 11(a)(ii) are complied with, but shall have no liability
to any holder of Right Certificates or other Person as a result of its failure to make any determinations with respect to an Acquiring
Person, its Affiliates and Associates or its or their transferees hereunder. From and after the Flip-In Event, no Right Certificate shall
be issued pursuant to Section 3 or Section 6 hereof that represents Rights that are or have become void pursuant to the provisions of
this paragraph, and any Right Certificate delivered to the Rights Agent that represents Rights that are or have become void pursuant
to the provisions of this paragraph shall be canceled. From and after the occurrence of an event specified in Section 13(a) hereof, any
Rights that theretofore have not been exercised pursuant to this Section 11(a)(ii) shall thereafter be exercisable only in accordance
with Section 13 and not pursuant to this Section 11(a)(ii).
(iii) The
Company may at its option substitute for a share of Common Stock issuable upon the exercise of Rights in accordance with the foregoing
subparagraph (ii) a number of shares of Preferred Stock or fraction thereof such that the current per share market price of one share
of Preferred Stock multiplied by such number or fraction is equal to the current per share market price of one share of Common Stock.
In the event that there shall not be sufficient shares of Common Stock issued but not outstanding or authorized but unissued to permit
the exercise in full of the Rights in accordance with the foregoing subparagraph (ii), the Board of Directors of the Company shall, with
respect to such deficiency, to the extent permitted by applicable law and any material agreements then in effect to which the Company
is a party, (A) determine the excess (such excess, the “Spread”) of (1) the value of the shares of Common Stock issuable
upon the exercise of a Right in accordance with the foregoing subparagraph (ii) (the “Current Value”) over (2) the Purchase
Price (as adjusted in accordance with the foregoing subparagraph (ii)), and (B) with respect to each Right (other than Rights which have
become void pursuant to the foregoing subparagraph (ii)), make adequate provision to substitute for the shares of Common Stock issuable
in accordance with the foregoing subparagraph (ii) upon exercise of the Right and payment of the Purchase Price (as adjusted in accordance
therewith), (1) cash, (2) a reduction in such Purchase Price, (3) shares of Preferred Stock or other equity securities of the Company
(including, without limitation, shares or fractions of shares of preferred stock which, by virtue of having dividend, voting and liquidation
rights substantially comparable to those of the shares of Common Stock are determined by the Board of Directors of the Company to have
substantially the same value as the shares of Common Stock (such shares of Preferred Stock and shares or fractions of shares of preferred
stock are hereinafter referred to as “Common Stock Equivalents”)), (4) debt securities of the Company, (5) other assets,
or (6) any combination of the foregoing, having a value which, when added to the value of the shares of Common Stock issued upon exercise
of such Right, shall have an aggregate value equal to the Current Value (less the amount of any reduction in such Purchase Price), where
such aggregate value has been determined by the Board of Directors of the Company; provided, however, that if the Company
shall not make adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the Flip-In Event (the
date of the Flip-In Event being the “Section 11(a)(ii) Trigger Date”), then the Company shall be obligated to deliver, to
the extent permitted by applicable law and any material agreements then in effect to which the Company is a party, upon the surrender
for exercise of a Right and without requiring payment of such Purchase Price, shares of Common Stock (to the extent available), and then,
if necessary, such number or fractions of shares of Preferred Stock (to the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. If, upon the occurrence of the Flip-In Event, the Board of Directors of the
Company shall determine that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise
in full of the Rights, then, if the Board of Directors of the Company so elects, the thirty (30) day period set forth above may be extended
to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek
stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called
the “Substitution Period”). To the extent that the Company determines that some action need be taken pursuant to the second
and/or third sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 11(a)(ii) hereof and the last sentence
of this Section 11(a)(iii) hereof, that such action shall apply uniformly to all outstanding Rights and (y) may suspend (with prompt
written notice thereof to the Rights Agent) the exercisability of the Rights until the expiration of the Substitution Period in order
to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such second
sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement (with
prompt written notice thereof to the Rights Agent) stating that the exercisability of the Rights has been temporarily suspended, as well
as a public announcement (with prompt written notice thereof to the Rights Agent) at such time as the suspension is no longer in effect.
For purposes of this Section 11(a)(iii), the per share value of the shares of Common Stock shall be the current per share market price
(as determined pursuant to Section 11(d)(i)) on the Section 11(a)(ii) Trigger Date and the per share or fractional value of any Common
Stock Equivalent shall be deemed to equal the current per share market price of the Common Stock. The Board of Directors of the Company
may, but shall not be required to, establish procedures to allocate the right to receive shares of Common Stock upon the exercise of
the Rights among the holders of Rights pursuant to this Section 11(a)(iii).
(b) In
case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling
them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Preferred Stock (or shares having
the same rights, privileges and preferences as the Preferred Stock (“Equivalent Preferred Shares”)) or securities convertible
into Preferred Stock or Equivalent Preferred Shares at a price per share of Preferred Stock or Equivalent Preferred Shares (or having
a conversion price per share, if a security convertible into shares of Preferred Stock or Equivalent Preferred Shares) less than the
then current per share market price of the Preferred Stock (determined pursuant to Section 11(d) hereof) on such record date, the Purchase
Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of shares of Preferred Stock and Equivalent Preferred Shares outstanding
on such record date plus the number of shares of Preferred Stock and Equivalent Preferred Shares which the aggregate offering price of
the total number of shares of Preferred Stock and/or Equivalent Preferred Shares so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at such current market price, and the denominator of which shall
be the number of shares of Preferred Stock and Equivalent Preferred Shares outstanding on such record date plus the number of additional
shares of Preferred Stock and/or Equivalent Preferred Shares to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. In case such subscription price may be paid in consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined by the Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent. Shares of Preferred Stock and Equivalent Preferred Shares owned by or held for the account
of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever
such a record date is fixed; and in the event that such rights, options or warrants are not so issued, the Purchase Price shall be adjusted
to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In
case the Company shall fix a record date for the making of a distribution to all holders of the Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the
then current per share market price of the Preferred Stock (determined pursuant to Section 11(d) hereof) on such record date, less the
fair market value (as determined by the Board of Directors of the Company whose determination shall be described in a statement filed
with the Rights Agent) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights
or warrants applicable to one share of Preferred Stock, and the denominator of which shall be such current per share market price (determined
pursuant to Section 11(d) hereof) of the Preferred Stock; provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company to be issued
upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d) (i) Except
as otherwise provided herein, for the purpose of any computation hereunder, the “current per share market price” of any security
(a “Security” for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing
prices per share of such Security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such
date; provided, however, that in the event that the current per share market price of the Security is determined during
a period following the announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in shares
of such Security or securities convertible into such shares, or (B) any subdivision, combination or reclassification of such Security,
and prior to the expiration of 30 Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such case, the current per share market price shall be appropriately
adjusted to reflect the current market price per share equivalent of such Security. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported by the principal consolidated transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or NASDAQ or, if the Security is not listed or admitted to trading on the New York Stock Exchange
or NASDAQ, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Security is listed or admitted to trading or, if the Security is not listed on a national securities
exchange, the last quoted price or, if not so quoted, the average of the high and low asked prices in the over-the-counter market as
reported by any system then in use, or, if not so quoted, the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Security selected by the Board of Directors of the Company. The term “Trading Day” shall
mean a day on which the principal national securities exchange on which the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted to trading on any national securities exchange, a Business Day.
(ii) For
the purpose of any computation hereunder, if the Preferred Stock is publicly traded, the “current per share market price”
of the Preferred Stock shall be determined in accordance with the method set forth in Section 11(d)(i). If the Preferred Stock is not
publicly traded but the Common Stock is publicly traded, the “current per share market price” of the Preferred Stock shall
be conclusively deemed to be the current per share market price of the Common Stock as determined pursuant to Section 11(d)(i) multiplied
by the then applicable Adjustment Number (as defined in and determined in accordance with the Certificate of Designation for the Preferred
Stock). If neither the Common Stock nor the Preferred Stock is publicly traded, “current per share market price” shall mean
the fair value per share as determined by the Board of Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent.
(e) No
adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one hundred-thousandth of a share of Preferred Stock or one-hundredth of a share of Common Stock or
other share or security as the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three years from the date of the transaction which requires such adjustment
and (ii) the Expiration Date.
(f) If
as a result of an adjustment made pursuant to Section 11(a) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than the Preferred Stock, thereafter the Purchase Price and the number of
such other shares so receivable upon exercise of a Right shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Preferred Stock contained in Sections 11(a), 11(b), 11(c), 11(e),
11(h), 11(i) and 11(m) hereof, as applicable, and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred
Stock shall apply on like terms to any such other shares.
(g) All
Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a share of Preferred Stock purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.
(h) Unless
the Company shall have exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and 11(c), each Right outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of one one-thousandths of a share of Preferred Stock (calculated
to the nearest one hundred-thousandth of a share of Preferred Stock) obtained by (i) multiplying (x) the number of one one-thousandths
of a share purchasable upon the exercise of a Right immediately prior to such adjustment by (y) the Purchase Price in effect immediately
prior to such adjustment and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment.
(i) The
Company may elect on or after the date of any adjustment of the Purchase Price pursuant to Sections 11(b) or 11(c) hereof to adjust the
number of Rights, in substitution for any adjustment in the number of one one-thousandths of a share of Preferred Stock purchasable upon
the exercise of a Right. Each of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number
of one one-thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one-hundredth)
obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a public announcement (with prompt written notice thereof
to the Rights Agent) of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at
the time, the amount of the adjustment to be made. Such record date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, shall be at least 10 days later than the date of the public announcement.
If Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company may,
as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Right Certificates to be so distributed
shall be issued, executed and countersigned in the manner provided for herein and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public announcement.
(j) Irrespective
of any adjustment or change in the Purchase Price or the number of one one-thousandths of a share of Preferred Stock issuable upon the
exercise of a Right, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number
of one one-thousandths of a share of Preferred Stock which were expressed in the initial Right Certificates issued hereunder.
(k) Before
taking any action that would cause an adjustment reducing the Purchase Price below the then par value, if any, of the fraction of Preferred
Stock or other shares of capital stock issuable upon exercise of a Right, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable shares of Preferred
Stock or other such shares at such adjusted Purchase Price.
(l) In
any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer (with prompt written notice thereof to the Rights Agent) until the occurrence of such
event issuing to the holder of any Right exercised after such record date the Preferred Stock and other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the Preferred Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided, however,
that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive
such additional shares upon the occurrence of the event requiring such adjustment.
(m) Anything
in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such adjustments in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to the extent that it in its sole discretion shall determine
to be advisable in order that any consolidation or subdivision of the Preferred Stock, issuance wholly for cash of any shares of Preferred
Stock at less than the current market price, issuance wholly for cash of Preferred Stock or securities which by their terms are convertible
into or exchangeable for Preferred Stock, dividends on Preferred Stock payable in shares of Preferred Stock or issuance of rights, options
or warrants referred to hereinabove in Section 11(b), hereafter made by the Company to holders of its Preferred Stock shall not be taxable
to such stockholders.
(n) Anything
in this Agreement to the contrary notwithstanding, in the event that at any time after the date of this Agreement and prior to the Distribution
Date, the Company shall (i) declare and pay any dividend on any class or series of Voting Stock payable in shares of a class or series
of Voting Stock, or (ii) effect a subdivision, combination or consolidation of any class or series of Voting Stock (by reclassification
or otherwise than by payment of a dividend payable in Voting Stock) into a greater or lesser number of shares of such class or series
of Voting Stock, then, in each such case, the number of Rights associated with each share of Voting Stock then outstanding, or issued
or delivered thereafter, shall be proportionately adjusted (x) so that the number of Rights thereafter associated with each share of
such class or series of Voting Stock following any such event shall equal the result obtained by multiplying the number of Rights associated
with each share of such class or series of Voting Stock immediately prior to such event by a fraction the numerator of which shall be
the total number of shares of such class or series of Voting Stock outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of such class or series of Voting Stock outstanding immediately following the
occurrence of such event and (y), in the case of any event occurring pursuant to clauses (i) or (ii) of this Section 11(n) with respect
to a single class or series of Voting Stock that does not occur with respect to another class or series of Voting Stock but gives rise
to an adjustment in the number of shares of the former class or series of Voting stock into which the latter class or series of Voting
Stock may be converted, to provide for the issuance of additional Rights to the latter class or series of Voting Stock consistent with
such adjustment of conversion rights.
(o) The
Company agrees that, after the earlier of the Distribution Date or the Stock Acquisition Date, it will not, except as permitted by Sections
23, 24 or 27 hereof, take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable
that such action will diminish substantially or eliminate the benefits intended to be afforded by the Rights.
Section
12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment is made as provided in Section 11 or 13
hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment, and a brief statement of the facts accounting
for such adjustment, (b) file with the Rights Agent and with each transfer agent for the Voting Stock and the Preferred Stock a copy
of such certificate and (c) mail a brief summary thereof to each holder of a Right Certificate in accordance with Section 25 hereof (if
so required under Section 25 hereof). Notwithstanding the foregoing sentence, the failure of the Company to make such certification or
give such notice shall not affect the validity of such adjustment or the force or effect of the requirement for such adjustment. The
Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained and shall have no duty
or liability with respect to, and shall not be deemed to have knowledge of any such adjustment unless and until it shall have received
such certificate.
Section
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.
(a) In
the event, directly or indirectly, at any time after the Flip-In Event (i) the Company shall consolidate with or shall merge into any
other Person, (ii) any Person shall merge with and into the Company and the Company shall be the continuing or surviving corporation
of such merger and, in connection with such merger, all or part of the Voting Stock shall be changed into or exchanged for stock or other
securities of any other Person (or of the Company) or cash or any other property, or (iii) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or earning power aggregating
50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person (other than the
Company or one or more wholly-owned Subsidiaries of the Company), then upon the first occurrence of such event, proper provision shall
be made so that: (A) each holder of a Right (other than Rights which have become void pursuant to Section 11(a)(ii) hereof) shall thereafter
have the right to receive, upon the exercise thereof at the Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii)
hereof), in accordance with the terms of this Agreement and in lieu of shares of Preferred Stock or Common Stock of the Company, such
number of validly authorized and issued, fully paid, non-assessable and freely tradeable shares of Common Stock of the Principal Party
(as such term is hereinafter defined), not subject to any liens, encumbrances, rights of first refusal or other adverse claims, as shall
equal the result obtained by dividing the Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii) hereof) by 50%
of the current per share market price of the Common Stock of such Principal Party (determined pursuant to Section 11(d) hereof) on the
date of consummation of such consolidation, merger, sale or transfer; provided, however, that the Purchase Price (as theretofore
adjusted in accordance with Section 11(a)(ii) hereof) and the number of shares of Common Stock of such Principal Party so receivable
upon exercise of a Right shall be subject to further adjustment as appropriate in accordance with Section 11(f) hereof to reflect any
events occurring in respect of the Common Stock of such Principal Party after the occurrence of such consolidation, merger, sale or transfer;
(B) such Principal Party shall thereafter be liable for, and shall assume, by virtue of such consolidation, merger, sale or transfer,
all the obligations and duties of the Company pursuant to this Agreement; (C) the term “Company” shall thereafter be deemed
to refer to such Principal Party; and (D) such Principal Party shall take such steps (including, but not limited to, the reservation
of a sufficient number of its shares of Common Stock in accordance with Section 9 hereof) in connection with such consummation of any
such transaction as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the shares of its Common Stock thereafter deliverable upon the exercise of the Rights; provided that, upon the subsequent
occurrence of any consolidation, merger, sale or transfer of assets or other extraordinary transaction in respect of such Principal Party,
each holder of a Right shall thereupon be entitled to receive, upon exercise of a Right and payment of the Purchase Price as provided
in this Section 13(a), such cash, shares, rights, warrants and other property which such holder would have been entitled to receive had
such holder, at the time of such transaction, owned the Common Stock of the Principal Party receivable upon the exercise of a Right pursuant
to this Section 13(a), and such Principal Party shall take such steps (including, but not limited to, reservation of shares of stock)
as may be necessary to permit the subsequent exercise of the Rights in accordance with the terms hereof for such cash, shares, rights,
warrants and other property.
(b) “Principal
Party” shall mean:
(i) in
the case of any transaction described in (i) or (ii) of the first sentence of Section 13(a) hereof: (A) the Person that is the issuer
of the securities into which the shares of Voting Stock are converted in such merger or consolidation, or, if there is more than one
such issuer, the issuer of the shares of Common Stock of which have the greatest aggregate market value of shares outstanding, or (B)
if no securities are so issued, (x) the Person that is the other party to the merger, if such Person survives said merger, or, if there
is more than one such Person, the Person the shares of Common Stock of which have the greatest aggregate market value of shares outstanding
or (y) if the Person that is the other party to the merger does not survive the merger, the Person that does survive the merger (including
the Company if it survives) or (z) the Person resulting from the consolidation; and
(ii) in
the case of any transaction described in (iii) of the first sentence of Section 13(a) hereof, the Person that is the party receiving
the greatest portion of the assets or earning power transferred pursuant to such transaction or transactions, or, if each Person that
is a party to such transaction or transactions receives the same portion of the assets or earning power so transferred or if the Person
receiving the greatest portion of the assets or earning power cannot be determined, whichever of such Persons is the issuer of Common
Stock having the greatest aggregate market value of shares outstanding;
provided,
however, that in any such case described in the foregoing clause (b)(i) or (b)(ii), if the Common Stock of such Person is not
at such time or has not been continuously over the preceding 12-month period registered under Section 12 of the Exchange Act, then (1)
if such Person is a direct or indirect Subsidiary of another Person the Common Stock of which is and has been so registered, the term
“Principal Party” shall refer to such other Person, or (2) if such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common Stock of all of which is and has been so registered, the term “Principal Party” shall refer to
whichever of such Persons is the issuer of Common Stock having the greatest aggregate market value of shares outstanding, or (3) if such
Person is owned, directly or indirectly, by a joint venture formed by two or more Persons that are not owned, directly or indirectly,
by the same Person, the rules set forth in clauses (1) and (2) above shall apply to each of the owners having an interest in the venture
as if the Person owned by the joint venture was a Subsidiary of both or all of such joint venturers, and the Principal Party in each
such case shall bear the obligations set forth in this Section 13 in the same ratio as its interest in such Person bears to the total
of such interests.
(c) The
Company shall not consummate any consolidation, merger, sale or transfer referred to in Section 13(a) hereof unless prior thereto the
Company and the Principal Party involved therein shall have executed and delivered to the Rights Agent an agreement confirming that the
requirements of Sections 13(a) and (b) hereof shall promptly be performed in accordance with their terms and that such consolidation,
merger, sale or transfer of assets shall not result in a default by the Principal Party under this Agreement as the same shall have been
assumed by the Principal Party pursuant to Sections 13(a) and (b) hereof and providing that, as soon as practicable after executing such
agreement pursuant to this Section 13, the Principal Party will:
(i) prepare
and file a registration statement under the Securities Act, if necessary, with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, use its best efforts to cause such registration statement to become effective as soon
as practicable after such filing and use its best efforts to cause such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Securities Act) until the Expiration Date and similarly comply with applicable state securities
laws;
(ii) use
its best efforts, if the Common Stock of the Principal Party shall be listed or admitted to trading on the New York Stock Exchange, NASDAQ
or on another national securities exchange, to list or admit to trading (or continue the listing of) the Rights and the securities purchasable
upon exercise of the Rights on the New York Stock Exchange or such securities exchange, or, if the Common Stock of the Principal Party
shall not be listed or admitted to trading on the New York Stock Exchange, NASDAQ or a national securities exchange, to cause the Rights
and the securities receivable upon exercise of the Rights to be authorized for quotation on any other system then in use;
(iii) deliver
to holders of the Rights historical financial statements for the Principal Party which comply in all respects with the requirements for
registration on Form 10 (or any successor form) under the Exchange Act; and
(iv) obtain
waivers of any rights of first refusal or preemptive rights in respect of the Common Stock of the Principal Party subject to purchase
upon exercise of outstanding Rights.
(d) In
case the Principal Party has a provision in any of its authorized securities or in its certificate of incorporation or by-laws or other
instrument governing its affairs, which provision would have the effect of (i) causing such Principal Party to issue (other than to holders
of Rights pursuant to this Section 13), in connection with, or as a consequence of, the consummation of a transaction referred to in
this Section 13, shares of Common Stock or Common Stock Equivalents of such Principal Party at less than the then current market price
per share thereof (determined pursuant to Section 11(d) hereof) or securities exercisable for, or convertible into, Common Stock or Common
Stock Equivalents of such Principal Party at less than such then current market price, or (ii) providing for any special payment, tax
or similar provision in connection with the issuance of the Common Stock of such Principal Party pursuant to the provisions of Section
13, then, in such event, the Company hereby agrees with each holder of Rights that it shall not consummate any such transaction unless
prior thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement providing
that the provision in question of such Principal Party shall have been canceled, waived or amended, or that the authorized securities
shall be redeemed, so that the applicable provision will have no effect in connection with, or as a consequence of, the consummation
of the proposed transaction.
(e) The
Company covenants and agrees that it shall not, at any time after the Flip-In Event, enter into any transaction of the type described
in clauses (i) through (iii) of Section 13(a) hereof if (i) at the time of or immediately after such consolidation, merger, sale, transfer
or other transaction there are any rights, warrants or other instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights, (ii) prior to, simultaneously with
or immediately after such consolidation, merger, sale, transfer or other transaction, the stockholders of the Person who constitutes,
or would constitute, the Principal Party for purposes of Section 13(b) hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates or Associates or (iii) the form or nature of organization of the Principal Party would
preclude or limit the exercisability of the Rights.
(f) Notwithstanding
anything contained herein to the contrary, in the event of any merger or other acquisition transaction involving the Company pursuant
to a merger or other acquisition agreement between the Company and any Person (or one or more of such Person’s Affiliates or Associates)
which agreement has been approved by the Board of Directors prior to any Person becoming an Acquiring Person, this Agreement and the
rights of holders of Rights hereunder shall be terminated in accordance with Section 7(a).
Section
14. Fractional Rights and Fractional Shares.
(a) The
Company shall not be required to issue fractions of Rights (except prior to the Distribution Date in accordance with Section 11(n) hereof)
or to distribute Right Certificates which evidence fractional Rights. If the Company determines not to issue fractional Rights, then
in lieu of such fractional Rights, there shall be paid to the registered holders of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right.
For the purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have been otherwise issuable. The closing price for any day shall
be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or NASDAQ or, if the Rights are not listed or admitted to trading on the New York
Stock Exchange or NASDAQ, as reported in the principal consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by any system then in use or, if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors of the Company. If on any such date no such market maker is making a market in the Rights,
the fair value of the Rights on such date as determined by the Board of Directors of the Company shall be used.
(b) The
Company shall not be required to issue fractions of shares of Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) or to distribute certificates which evidence fractional shares of Preferred Stock (other
than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock) upon the exercise or exchange of Rights.
Interests in fractions of shares of Preferred Stock in integral multiples of one one-thousandth of a share of Preferred Stock may, at
the election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary
selected by it; provided that such agreement shall provide that the holders of such depositary receipts shall have all the rights, privileges
and preferences to which they are entitled as beneficial owners of the Preferred Stock represented by such depositary receipts. In lieu
of fractional shares of Preferred Stock that are not integral multiples of one one-thousandth of a share of Preferred Stock, the Company
shall pay to the registered holders of Right Certificates at the time such Rights are exercised or exchanged as herein provided an amount
in cash equal to the same fraction of the current market value of a whole share of Preferred Stock (as determined in accordance with
Section 14(a) hereof) for the Trading Day immediately prior to the date of such exercise or exchange.
(c) The
Company shall not be required to issue fractions of shares of Common Stock or to distribute certificates which evidence fractional shares
of Common Stock upon the exercise or exchange of Rights. In lieu of such fractional shares of Common Stock, the Company shall pay to
the registered holders of the Right Certificates with regard to which such fractional shares of Common Stock would otherwise be issuable
an amount in cash equal to the same fraction of the current market value of a whole share of Common Stock. For purposes of this Section
14(c), the current market value of one share of Common Stock for which a Right is exercisable shall be deemed to be the closing price
of one share of Common Stock (as determined in accordance with Section 11(d)(i) hereof), for the Trading Day immediately prior to the
date of such exercise.
(d) The
holder of a Right by the acceptance of the Right expressly waives his right to receive any fractional Rights or any fractional shares
upon exercise or exchange of a Right (except as provided above).
(e) Whenever
a payment for fractional Rights or fractional shares is to be made by the Rights Agent under Section 18 hereof, the Company shall (i)
promptly prepare and deliver to the Rights Agent a certificate setting forth in reasonable detail the facts related to such payment and
the prices or formulas utilized in calculating such payments and (ii) provide sufficient monies to the Rights Agent in the form of fully
collected funds to make such payments. The Rights Agent may rely upon such a certificate and has no duty with respect to, and will not
be deemed to have knowledge of, any payment for fractional Rights or fractional shares under any Section of this Agreement relating to
the payment of fractional Rights or fractional shares unless and until the Rights Agent has received such a certificate and sufficient
monies.
Section
15. Rights of Action. All rights of action in respect of this Agreement, excepting the rights of action given to the Rights Agent
pursuant to the terms of this Agreement, are vested in the respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Voting Stock); and any registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Voting Stock), without the consent of the Rights Agent or of the holder of any other Right Certificate (or,
prior to the Distribution Date, of the Voting Stock), on his own behalf and for his own benefit, may enforce, and may institute and maintain
any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, his right to exercise the Rights evidenced
by such Right Certificate (or, prior to the Distribution Date, such Voting Stock) in the manner provided therein and in this Agreement.
Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this Agreement by the Company and will be entitled to specific performance
of the obligations under, and injunctive relief against actual or threatened violations of, the obligations of the Company under this
Agreement.
Section
16. Agreement of Right Holders. Every holder of a Right, by accepting the same, consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior
to the Distribution Date, the Rights will be transferable only in connection with the transfer of the Voting Stock;
(b) after
the Distribution Date, the Right Certificates are transferable only on the registry books of the Rights Agent if surrendered at the office
or agency of the Rights Agent designated for such purpose, duly endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates properly completed and duly executed, accompanied by a Signature Guarantee and such other documentation
as the Rights Agent may reasonably request; and
(c) the
Company and the Rights Agent may deem and treat the Person in whose name the Right Certificate (or, prior to the Distribution Date, the
Voting Stock certificate (or Book Entry shares in respect of Voting Stock)) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificates or the Voting Stock certificate (or
notices provided to holders of Book Entry shares of Voting Stock) made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent, subject to Section 7(e) hereof, shall be affected by any notice to
the contrary.
(d) notwithstanding
anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right
or other Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree, judgment or ruling (whether interlocutory or final) issued by a court of competent jurisdiction or
by a governmental, regulatory, self-regulatory or administrative agency or commission, or any statute, rule, regulation or executive
order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation; provided,
however, the Company shall use commercially reasonable efforts to have any such injunction, order, decree, judgment or ruling lifted
or otherwise overturned as promptly as practicable.
Section
17. Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the Preferred Stock or any other securities of the Company which may at
any time be issuable on the exercise or exchange of the Rights represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided
in this Agreement), or to receive dividends or subscription rights, or otherwise, until the Rights evidenced by such Right Certificate
shall have been exercised or exchanged in accordance with the provisions hereof.
Section
18. Concerning the Rights Agent.
(a) The
Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder in accordance with a fee
schedule to be mutually agreed upon and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the preparation, negotiation, execution, administration, delivery and amendment of this Agreement and
the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or expense (including the reasonable fees
and expenses of legal counsel) that may be paid, incurred or suffered by it, or to which it may become subject, without gross negligence,
bad faith or willful misconduct on the part of the Rights Agent (which gross negligence, bad faith, or willful misconduct must be determined
by a final, non-appealable judgment of a court of competent jurisdiction) for any action taken, suffered or omitted by the Rights Agent
in connection with the execution, acceptance, administration, exercise and performance of its duties under this Agreement, including
the reasonable costs and expenses of defending against any claim of liability arising therefrom, directly or indirectly, or of enforcing
its rights under this Agreement.
(b) The
Rights Agent shall be authorized and protected and shall incur no liability for, or in respect of any action taken, suffered or omitted
by it in connection with, its acceptance and administration of this Agreement and the exercise and performance of its duties hereunder
in reliance upon any Right Certificate or certificate representing the Preferred Stock, the Voting Stock or any other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged,
by the proper Person or Persons, or otherwise upon the advice of counsel as set forth in Section 20 hereof. The Rights Agent shall not
be deemed to have knowledge of any event of which it was supposed to receive notice thereof hereunder, and the Rights Agent shall be
fully protected and shall incur no liability for failing to take action in connection therewith unless and until it has received such
notice in writing.
(c) Section
18 and Section 20 shall survive the termination of this Agreement, the resignation, replacement or removal of the Rights Agent and the
exercise, termination and expiration of the Rights. Notwithstanding anything in this Agreement to the contrary, in no event shall the
Rights Agent be liable for special, punitive, incidental, indirect or consequential loss or damage of any kind whatsoever, even if the
Rights Agent has been advised of the likelihood of such loss or damage and regardless of the form of the action. Notwithstanding anything
to the contrary herein, any liability of the Rights Agent under this Agreement shall be limited to the amount of fees (but not including
any reimbursed costs) paid by the Company to the Rights Agent during the twelve (12) months immediately preceding the event for which
recovery from the Rights Agent is being sought.
Section
19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any
Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any Person resulting
from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to
the stock transfer or corporate trust powers of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto;
provided that such Person would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In
case at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Right Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent
and deliver such Right Certificates so countersigned; and in case at that time any of the Right Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In
case at any time the name of the Rights Agent shall be changed and at such time any of the Right Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section
20. Duties of Rights Agent. The Rights Agent undertakes the duties and obligations expressly set forth in this Agreement and no
implied duties or obligations shall be read into this Agreement against the Rights Agent. The Rights Agent shall perform those duties
and obligations upon the following terms and conditions, by all of which the Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
(a) The
Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the advice or opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent, and the Rights Agent shall have no liability for or in respect
of, any action taken or omitted by it in the absence of bad faith and in accordance with such advice or opinion.
(b) Whenever
in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter be
proved (including the identity of any Acquiring Person and the determination of the current market price) or established by the Company
prior to taking, suffering or omitting to take any action hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by the President, the
Vice President, the Chief Financial Officer, the Treasurer, the Secretary or any other duly authorized officer of the Company and delivered
to the Rights Agent; and such certificate shall be full and complete authorization and protection to the Rights Agent, and the Rights
Agent shall incur no liability for or in respect of any action taken, suffered or omitted to be taken by it under the provisions of this
Agreement in reliance upon such certificate. The Rights Agent shall have no duty to act without such certificate as set forth in this
Section 20(b).
(c) The
Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are
and shall be deemed to have been made by the Company only.
(d) The
Rights Agent shall not have any liability or be under any responsibility in respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the legality or validity or execution of any
Right Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it be responsible for any change in the exercisability of
the Rights (including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights provided
for in Sections 3, 11, 13, 23 and 24, or responsible for the manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment or calculation (except with respect to the exercise of Rights evidenced by
Right Certificates after receipt of a certificate furnished pursuant to Section 12, describing such change or adjustment); nor shall
it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Preferred
Stock or other securities to be issued pursuant to this Agreement or any Right Certificate or as to whether any shares of Preferred Stock
or other securities will, when issued, be validly authorized and issued, fully paid and nonassessable.
(e) The
Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(f) The
Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any
person reasonably believed by the Rights Agent to be one of the President, the Vice President, the Chief Financial Officer, the Treasurer,
the Secretary or any other duly authorized officer of the Company, and to apply to such officers for advice or instructions in connection
with its duties under this Agreement, and such instructions shall provide full authorization and protection to the Rights Agent and the
Rights Agent shall not be liable for and it shall incur no liability for or in respect of any action taken, suffered or omitted by it
in the absence of bad faith in accordance with instructions of any such officer. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in writing any action proposed to be taken, suffered or omitted by
the Rights Agent under this Agreement and the date on and/or after which such action shall be taken or such omission shall be effective.
The Rights Agent shall be fully authorized and protected in relying upon the most recent instructions received from any such officer,
and shall not be liable for any action taken, suffered or omitted to be taken by the Rights Agent in accordance with a proposal included
in any such application on or after the date specified in such application (which date shall not be less than five Business Days after
the date any officer of the Company actually receives such application unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective date in the case of an omission), the Rights Agent shall have
received written instructions in response to such application specifying the action to be taken or omitted.
(g) The
Rights Agent and any stockholder, director, Affiliate, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract
with or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this Agreement. Nothing
herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other Person.
(h) The
Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, omission, default, neglect
or misconduct of any such attorneys or agents or for any loss to the Company or any other Person resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection and continued employment thereof.
(i) If,
with respect to any Right Certificate surrendered to the Rights Agent for exercise or transfer, the certificate contained in the form
of assignment or the form of election to purchase set forth on the reverse thereof, as the case may be, has not been completed to certify
the holder is not an Acquiring Person (or an Affiliate or Associate thereof) or a transferee thereof, the Rights Agent shall not take
any further action with respect to such requested exercise or transfer without first consulting with the Company; provided, however that
Rights Agent shall not be liable for any delays arising from the duties under this Section 20(i).
(j) The
Rights Agent shall not be liable or responsible for any failure of the Company to comply with any of its obligations relating to any
registration statement filed with the Securities and Exchange Commission or this Agreement, including obligations under applicable regulation
or law.
(k) The
Rights Agent shall not have any duty or responsibility in the case of the receipt of any written demand from any holder of Rights with
respect to any action or default by the Company, including, without limiting the generality of the foregoing, any duty or responsibility
to initiate or attempt to initiate any proceedings at law or otherwise or to make any demand upon the Company.
(l) No
provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its rights or powers if the Rights Agent has reasonable grounds
for believing that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it.
(m) The
Rights Agent shall have no responsibility to the Company, any holders of Rights or any other Person for interest or earnings on any moneys
held by the Rights Agent pursuant to this Agreement.
(n) The
Rights Agent shall not be required to take notice or be deemed to have notice of any event or condition hereunder, including any event
or condition that may require action by the Rights Agent, unless the Rights Agent shall be specifically notified in writing of such event
or condition by the Company, and all notices or other instruments required by this Agreement to be delivered to the Rights Agent must,
in order to be effective, be received by the Rights Agent as specified in Section 26 hereof, and in the absence of such notice so delivered,
the Rights Agent may conclusively assume no such event or condition exists.
(o) The
Rights Agent may rely on and be fully authorized and protected in acting or failing to act upon (a) any guaranty of signature by an “eligible
guarantor institution” that is a member or participant in the Securities Transfer Agents Medallion Program or other comparable
“signature guarantee program” or insurance program in addition to, or in substitution for, the foregoing; or (b) any law,
act, regulation or any interpretation of the same.
(p) In
the event the Rights Agent believes any ambiguity or uncertainty exists hereunder or in any notice, instruction, direction, request or
other communication, paper or document received by the Rights Agent hereunder, the Rights Agent, may (upon notice to the Company of such
ambiguity or uncertainty), in its sole discretion, refrain from taking any action, and shall be fully protected and shall not be liable
in any way to Company, the holder of any Rights Certificate or any other Person for refraining from taking such action, unless the Rights
Agent receives written instructions signed by the Company which eliminates such ambiguity or uncertainty to the satisfaction of Rights
Agent.
Section
21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days’ notice in writing mailed to the Company and to each transfer agent of the Voting Stock or Preferred
Stock by registered or certified mail, and, following the Distribution Date, to the holders of the Right Certificates by first-class
mail. In the event any transfer agency relationship in effect between the Company and the Rights Agent terminates, the Rights Agent will
be deemed to have resigned automatically and be discharged from its duties under this Agreement as of the effective date of such termination,
and the Company shall be responsible for sending any required notice. The Company may remove the Rights Agent or any successor Rights
Agent upon 30 days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Voting Stock or Preferred Stock by registered or certified mail, and, following the Distribution Date, to the holders of
the Right Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of
a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be (a) a Person organized
and doing business under the laws of the United States or the laws of any state of the United States or the District of Columbia, in
good standing, which is authorized under such laws to exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus
of at least $50 million or (b) an Affiliate of such Person. After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and
deliver any further reasonable assurance, conveyance, act or deed necessary for the purpose, but such predecessor Rights Agent shall
not be required to make any additional expenditure or assume any additional liability in connection with the foregoing. Not later than
the effective date of any such appointment the Company shall file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Voting Stock or Preferred Stock, and, following the Distribution Date, mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights
Agent, as the case may be.
Section
22. Issuance of New Right Certificates. Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary,
the Company may, at its option, issue new Right Certificates evidencing Rights in such forms as may be approved by its Board of Directors
to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable
under the Right Certificates made in accordance with the provisions of this Agreement. In addition, in connection with the issuance or
sale of Voting Stock following the Distribution Date and prior to the Expiration Date, the Company may with respect to shares of Voting
Stock so issued or sold (i) pursuant to the exercise of stock options, (ii) under any employee plan or arrangement, (iii) upon the exercise,
conversion or exchange of securities, notes or debentures issued by the Company or (iv) pursuant to a contractual obligation of the Company,
in each case existing prior to the Distribution Date, issue Right Certificates representing the appropriate number of Rights in connection
with such issuance or sale.
Section
23. Redemption.
(a) The
Board of Directors of the Company may, at any time prior to the Flip-In Event, redeem all but not less than all the then outstanding
Rights at a redemption price of $0.01 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction
occurring in respect of the Voting Stock after the date hereof (the redemption price being hereinafter referred to as the “Redemption
Price”). The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board of
Directors of the Company in its sole discretion may establish. The Redemption Price shall be payable, at the option of the Company, in
cash, shares of Common Stock or such other form of consideration as the Board of Directors of the Company shall determine.
(b) Immediately
upon the action of the Board of Directors of the Company ordering the redemption of the Rights pursuant to paragraph (a) of this Section
23 (or at such later time as the Board of Directors of the Company may establish for the effectiveness of such redemption), and without
any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price. The Company shall promptly give public notice (with prompt written notice thereof
to the Rights Agent) of any such redemption; provided, however, that the failure to give, or any defect in, any such notice
shall not affect the validity of such redemption. Within 10 days after such action of the Board of Directors of the Company ordering
the redemption of the Rights (or such later time as the Board of Directors of the Company may establish for the effectiveness of such
redemption), the Company shall mail a notice of redemption to all the holders of the then outstanding Rights at their last addresses
as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer
agent for the Voting Stock. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption shall state the method by which the payment of the Redemption Price will be made.
Section
24. Exchange.
(a) The
Board of Directors of the Company may, at its option, at any time after the Flip-In Event, exchange all or part of the then outstanding
Rights (which shall not include Rights that have become void pursuant to the provisions of Section 11(a)(ii) hereof) for shares of Common
Stock at an exchange ratio of one share of Common Stock per Right, appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring in respect of any class or series of Voting Stock, after the date hereof (such amount per Right being
hereinafter referred to as the “Exchange Ratio”). Notwithstanding the foregoing, the Board of Directors of the Company shall
not be empowered to effect such exchange at any time after an Acquiring Person shall have become the Beneficial Owner of 50% or more
of the shares of the Voting Stock then outstanding. From and after the occurrence of an event specified in Section 13(a) hereof, any
Rights that theretofore have not been exchanged pursuant to this Section 24(a) shall thereafter be exercisable only in accordance with
Section 13 and may not be exchanged pursuant to this Section 24(a). The exchange of the Rights by the Board of Directors of the Company
may be made effective at such time, on such basis and with such conditions as the Board of Directors of the Company in its sole discretion
may establish. Prior to effecting an exchange pursuant to this Section 24, the Board of Directors of the Company may direct the Company
to enter into a Trust Agreement in such form and with such terms as the Board of Directors of the Company shall then approve (the “Trust
Agreement”). If the Board of Directors of the Company so directs, the Company shall enter into the Trust Agreement and shall issue
to the trust created by such agreement (the “Trust”) all of the shares of Common Stock issuable pursuant to the exchange,
and all Persons entitled to receive shares pursuant to the exchange shall be entitled to receive such shares (and any dividends or distributions
made thereon after the date on which such shares are deposited in the Trust) only from the Trust and solely upon compliance with the
relevant terms and provisions of the Trust Agreement.
(b) Immediately
upon the effectiveness of the action of the Board of Directors of the Company ordering the exchange of any Rights pursuant to paragraph
(a) of this Section 24 and without any further action and without any notice, the right to exercise such Rights shall terminate and the
only right thereafter of a holder of such Rights shall be to receive that number of shares of Common Stock equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice (with prompt written notice
thereof to the Rights Agent) of any such exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company shall promptly mail a notice of any such exchange to all of the holders
of the Rights so exchanged at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the shares of Common Stock for Rights will be effected and, in the event of any partial exchange,
the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder of Rights.
(c) The
Company may at its option substitute, and, in the event that there shall not be sufficient shares of Common Stock issued but not outstanding
or authorized but unissued to permit an exchange of Rights for Common Stock as contemplated in accordance with this Section 24, the Company
shall substitute to the extent of such insufficiency, for each share of Common Stock that would otherwise be issuable upon exchange of
a Right, a number of shares of Preferred Stock or fraction thereof (or Equivalent Preferred Shares, as such term is defined in Section
11(b)) such that the current per share market price (determined pursuant to Section 11(d) hereof) of one share of Preferred Stock (or
Equivalent Preferred Share) multiplied by such number or fraction is equal to the current per share market price of one share of Common
Stock (determined pursuant to Section 11(d) hereof) as of the date of such exchange.
Section
25. Notice of Certain Events.
(a) In
case the Company shall at any time after the earlier of the Distribution Date or the Stock Acquisition Date propose (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Stock or to make any other distribution to the holders of its Preferred
Stock (other than a regular quarterly cash dividend), (ii) to offer to the holders of its Preferred Stock rights or warrants to subscribe
for or to purchase any additional shares of Preferred Stock or shares of stock of any class or any other securities, rights or options,
(iii) to effect any reclassification of its Preferred Stock (other than a reclassification involving only the subdivision or combination
of outstanding Preferred Stock), (iv) to effect the liquidation, dissolution or winding up of the Company, or (v) to pay any dividend
on the Voting Stock payable in Common Stock or to effect a subdivision, combination or consolidation of the Voting Stock (by reclassification
or otherwise than by payment of dividends in Common Stock), then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record date for the purposes
of such dividend or distribution or offering of rights or warrants, or the date on which such liquidation, dissolution, winding up, reclassification,
subdivision, combination or consolidation is to take place and the date of participation therein by the holders of the Voting Stock and/or
Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or
(ii) above at least 10 days prior to the record date for determining holders of the Preferred Stock for purposes of such action, and
in the case of any such other action, at least 10 days prior to the date of the taking of such proposed action or the date of participation
therein by the holders of the Voting Stock and/or Preferred Stock, whichever shall be the earlier. The failure to give notice required
by this Section 25 or any defect therein shall not affect the legality or validity of the action taken by the Company or the vote upon
any such action.
(b) In
case any event described in Section 11(a)(ii) or Section 13 shall occur then the Company shall as soon as practicable thereafter give
to each holder of a Right Certificate (or if occurring prior to the Distribution Date, the holders of the Voting Stock) in accordance
with Section 26 hereof, a notice of the occurrence of such event, which notice shall describe such event and the consequences of such
event to holders of Rights under Section 11(a)(ii) and Section 13 hereof, and all references in the preceding paragraph to Preferred
Stock shall be deemed thereafter to refer to Voting Stock and/or, if appropriate, other securities.
Section
26. Notices. Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, Federal Express or United Parcel Service
or any other nationally recognized courier service, postage prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
Staffing
360 Solutions, Inc.
757
3rd Avenue
27th
Floor
New
York, NY 10017
Attention:
Corporate Secretary
Subject
to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, Federal Express
or United Parcel Service or any other nationally recognized courier service, postage prepaid, addressed (until another address is filed
in writing with the Company) as follows:
Securities
Transfer Corporation
2901
N Dallas Parkway
Suite
380
Plano,
Texas 75093
|
Attention: |
Janet Stackhouse |
|
|
Suzanne Evans |
Notices
or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate
shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder
as shown on the registry books of the Company.
Section
27. Supplements and Amendments. Except as provided in the penultimate sentence of this Section 27, for so long as the Rights are
then redeemable, the Company may in its sole and absolute discretion, and the Rights Agent shall if the Company so directs, supplement
or amend any provision of this Agreement in any respect without the approval of any holders of the Rights. At any time when the Rights
are no longer redeemable, except as provided in the penultimate sentence of this Section 27, the Company may, and the Rights Agent shall,
if the Company so directs, supplement or amend this Agreement without the approval of any holders of Rights, provided that no
such supplement or amendment may (a) adversely affect the interests of the holders of Rights as such (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person), (b) cause this Agreement again to become amendable other than in accordance with
this sentence or (c) cause the Rights again to become redeemable. Notwithstanding anything contained in this Agreement to the contrary,
no supplement or amendment shall be made which changes the Redemption Price. No supplement or amendment to this Agreement shall be effective
unless duly executed by the Rights Agent and the Company. Upon the delivery of a certificate from an appropriate officer of the Company
which states that the supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such
supplement or amendment. Notwithstanding anything in this Agreement to the contrary, the Rights Agent may, but shall not be obligated
to, enter into any supplement or amendment that adversely affects the Rights Agent’s own rights, duties, immunities or obligations
under this Agreement.
Section
28. Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns hereunder.
Section
29. Benefits of this Agreement. Nothing in this Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Voting Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company,
the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Voting Stock).
Section
30. Determinations and Actions by the Board of Directors. The Board of Directors of the Company shall have the exclusive power
and authority to administer this Agreement and to exercise the rights and powers specifically granted to the Board of Directors of the
Company or to the Company, or as may be necessary or advisable in the administration of this Agreement, including, without limitation,
the right and power to (i) interpret the provisions of this Agreement and (ii) make all determinations deemed necessary or advisable
for the administration of this Agreement (including, without limitation, a determination to redeem or not redeem the Rights, to exchange
or not exchange the rights, or to amend or not amend this Agreement). Without limiting any of the rights and immunities of the Rights
Agent, all such actions, calculations, interpretations and determinations that are done or made by the Board of Directors of the Company
in good faith shall be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights, as such, and all other
parties.
Section
31. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired or invalidated; provided, however, that if such excluded
provision shall materially and adversely affect the rights, immunities, liabilities, duties or obligations of the Rights Agent, the Rights
Agent shall be entitled to resign immediately upon written notice to the Company.
Section
32. Governing Law. This Agreement and each Right Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable
to contracts to be made and performed entirely within such State. The Company and each holder of Rights hereby irrevocably submits to
the exclusive jurisdiction of the Court of Chancery of the State of Delaware, or, if such court lacks subject matter jurisdiction, the
United States District Court for the District of Delaware, over any suit, action or proceeding arising out of or relating to this Agreement.
The Company and each holder of Rights acknowledge that the forum designated by this Section 32 has a reasonable relation to this Agreement
and to such Persons’ relationship with one another. The Company and each holder of Rights hereby waive, to the fullest extent permitted
by applicable law, any objection which they now or hereafter have to personal jurisdiction or to the laying of venue of any such suit,
action or proceeding brought in any court referred to in this Section 32. The Company and each holder of Rights undertake not to commence
any action subject to this Agreement in any forum other than the forum described in this Section 32. The Company and each holder of Rights
agree that, to the fullest extent permitted by applicable law, a final and non-appealable judgment in any such suit, action or proceeding
brought in any such court shall be conclusive and binding upon such Persons.
Section
33. Counterparts. This Agreement may be executed in any number of 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. Delivery of an executed
signature page of this Agreement by facsimile or other customary means of electronic transmission (e.g., “pdf”) shall be
effective as delivery of a manually executed counterpart hereof.
Section
34. Descriptive Headings. Descriptive headings of the several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions hereof.
Section
35. Force Majeure. Notwithstanding anything to the contrary contained herein, the Rights Agent will not have any liability for
not performing, or a delay in the performance of, any act, duty, obligation or responsibility by reason of any occurrence beyond the
reasonable control of the Rights Agent (including any act or provision or any present or future law or regulation or governmental authority,
any act of God, epidemics, pandemics, war, civil or military disobedience or disorder, riot, rebellion, terrorism, insurrection, fire,
earthquake, storm, flood, strike, work stoppage, interruptions or malfunctions of computer facilities, loss of data due to power failures
or mechanical difficulties, labor dispute, accident or failure or malfunction of any utilities communication or computer services or
similar occurrence).
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, all as of the day and year first above written.
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Staffing
360 Solutions, Inc. |
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By: |
/s/ Brendan
Flood |
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Name:
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Brendan
Flood |
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Title:
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Chief
Executive Officer |
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Securities
Transfer Corporation, as Rights Agent |
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By: |
/s/ Matthew
Smith |
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Name: |
Matthew
Smith |
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Title:
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Chief
Operating Officer |
Exhibit
A
FORM
OF
CERTIFICATE
OF DESIGNATION
of
SERIES
A JUNIOR PARTICIPATING PREFERRED STOCK
of
Staffing
360 Solutions, Inc.
Pursuant
to Section 151 of the General Corporation
Law
of the State of Delaware
Staffing
360 Solutions, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), in
accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:
That
pursuant to the authority vested in the Board of Directors of the Corporation (the “Board of Directors”) in accordance with
the provisions of the Amended and Restated Certificate of Incorporation of the said Corporation (the “Certificate of Incorporation”),
the said Board of Directors on September 27, 2023 adopted the following resolution creating a series of 100,000
shares of Preferred Stock designated as “Series A Junior Participating Preferred Stock”:
RESOLVED,
that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of the Certificate
of Incorporation, a series of Preferred Stock, par value $0.00001 per share, of the Corporation be and hereby is created, and that the
designation and number of shares thereof and the voting and other powers, preferences and relative, participating, optional or other
rights of the shares of such series and the qualifications, limitations and restrictions thereof are as follows:
Series
A Junior Participating Preferred Stock
1. Designation
and Amount. There shall be a series of Preferred Stock that shall be designated as “Series A Junior Participating Preferred
Stock,” and the number of shares constituting such series shall be 100,000. Such
number of shares may be increased or decreased by resolution of the Board of Directors; provided, however, that no decrease shall reduce
the number of shares of Series A Junior Participating Preferred Stock to less than the number of shares then issued and outstanding plus
the number of shares issuable upon exercise of outstanding rights, options or warrants or upon conversion of outstanding securities issued
by the Corporation.
2. Dividends
and Distributions.
(A) Subject
to the prior and superior rights of the holders of any shares of any class or series of stock of the Corporation ranking prior and superior
to the shares of Series A Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior Participating
Preferred Stock, in preference to the holders of shares of any class or series of stock of the Corporation ranking junior to the Series
A Junior Participating Preferred Stock in respect thereof, shall be entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly dividends payable in cash on the 30th day of March, June, September
and December, in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Junior Participating
Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $10.00 and (b) the sum of (1) the Adjustment
Number (as defined below) times the aggregate per share amount of all cash dividends, plus (2) the Adjustment Number times the aggregate
per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common
Stock, par value $0.00001 per share, of the Corporation (the “Common Stock”), or a subdivision of the outstanding shares
of Common Stock (by reclassification or otherwise), in each case declared on the Common Stock since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction
of a share of Series A Junior Participating Preferred Stock. The “Adjustment Number” shall initially be 1,000. In the event
the Corporation shall at any time after October 2, 2023 (i) declare and pay any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then
in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number
by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(B) The
Corporation shall declare a dividend or distribution on the Series A Junior Participating Preferred Stock as provided in paragraph (A)
above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common
Stock).
(C) Dividends
shall begin to accrue and be cumulative on outstanding shares of Series A Junior Participating Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A Junior Participating Preferred Stock, unless the date of issue
of such shares is prior to the record date for the first Quarterly Dividend Payment Date; in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive
a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue
and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on
the shares of Series A Junior Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled
to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 60 days prior to the date
fixed for the payment thereof.
3. Voting
Rights. The holders of shares of Series A Junior Participating Preferred Stock shall have the following voting rights:
(A) Each
share of Series A Junior Participating Preferred Stock shall entitle the holder thereof to a number of votes equal to the Adjustment
Number on all matters submitted to a vote of the stockholders of the Corporation.
(B) Except
as required by law, by Section 3(C) and by Section 10 hereof, holders of Series A Junior Participating Preferred Stock shall have no
special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.
(C) If,
at the time of any annual meeting of stockholders for the election of directors, the equivalent of six quarterly dividends (whether or
not consecutive) payable on any share or shares of Series A Junior Participating Preferred Stock are in default, the number of directors
constituting the Board of Directors shall be increased by two. In addition to voting together with the holders of Common Stock for the
election of other directors of the Corporation, the holders of record of the Series A Junior Participating Preferred Stock, voting separately
as a class to the exclusion of the holders of Common Stock, shall be entitled at said meeting of stockholders (and at each subsequent
annual meeting of stockholders), unless all dividends in arrears on the Series A Junior Participating Preferred Stock have been paid
or declared and set apart for payment prior thereto, to vote for the election of two directors of the Corporation, the holders of any
Series A Junior Participating Preferred Stock being entitled to cast a number of votes per share of Series A Junior Participating Preferred
Stock as is specified in paragraph (A) of this Section 3. Each such additional director shall serve until the next annual meeting of
stockholders for the election of directors, or until his successor shall be elected and shall qualify, or until his right to hold such
office terminates pursuant to the provisions of this Section 3(C). Until the default in payments of all dividends which permitted the
election of said directors shall cease to exist, any director who shall have been so elected pursuant to the provisions of this Section
3(C) may be removed at any time, without cause, only by the affirmative vote of the holders of the shares of Series A Junior Participating
Preferred Stock at the time entitled to cast a majority of the votes entitled to be cast for the election of any such director at a special
meeting of such holders called for that purpose, and any vacancy thereby created may be filled by the vote of such holders. If and when
such default shall cease to exist, the holders of the Series A Junior Participating Preferred Stock shall be divested of the foregoing
special voting rights, subject to revesting in the event of each and every subsequent like default in payments of dividends. Upon the
termination of the foregoing special voting rights, the terms of office of all persons who may have been elected directors pursuant to
said special voting rights shall forthwith terminate, and the number of directors constituting the Board of Directors shall be reduced
by two. The voting rights granted by this Section 3(C) shall be in addition to any other voting rights granted to the holders of the
Series A Junior Participating Preferred Stock in this Section 3.
4. Certain
Restrictions.
(A) Whenever
quarterly dividends or other dividends or distributions payable on the Series A Junior Participating Preferred Stock as provided in Section
2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series
A Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare
or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred
Stock other than (A) such redemptions or purchases that may be deemed to occur upon the exercise of stock options, warrants or similar
rights or grant, vesting or lapse of restrictions on the grant of any other performance shares, restricted stock, restricted stock units
or other equity awards to the extent that such shares represent all or a portion of (x) the exercise or purchase price of such options,
warrants or similar rights or other equity awards and (y) the amount of withholding taxes owed by the recipient of such award in respect
of such grant, exercise, vesting or lapse of restrictions; (B) the repurchase, redemption, or other acquisition or retirement for value
of any such shares from employees, former employees, directors, former directors, consultants or former consultants of the Corporation
or their respective estate, spouse, former spouse or family member, pursuant to the terms of the agreements pursuant to which such shares
were acquired;
(ii) declare
or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Junior Participating Preferred Stock, except dividends paid ratably on the Series A Junior
Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled; or
(iii) purchase
or otherwise acquire for consideration any shares of Series A Junior Participating Preferred Stock, or any shares of stock ranking on
a parity with the Series A Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication
(as determined by the Board of Directors) to all holders of Series A Junior Participating Preferred Stock, or to such holders and holders
of any such shares ranking on a parity therewith, upon such terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective series and classes, shall determine will result in fair and
equitable treatment among the respective series or classes.
(B) The
Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock
of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at
such time and in such manner.
5. Reacquired
Shares. Any shares of Series A Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired promptly after the acquisition thereof. All such shares shall upon their retirement become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions
of the Board of Directors, subject to any conditions and restrictions on issuance set forth herein.
6. Liquidation,
Dissolution or Winding Up. (A) Upon any liquidation, dissolution or winding up of the Corporation, voluntary or otherwise, no distribution
shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior Participating Preferred
Stock shall have received an amount per share (the “Series A Liquidation Preference”) equal to the greater of (i) $10.00
plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment,
and (ii) the Adjustment Number times the per share amount of all cash and other property to be distributed in respect of the Common Stock
upon such liquidation, dissolution or winding up of the Corporation.
(B) In
the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other classes and series of stock of the Corporation, if any, that rank on a parity with the Series
A Junior Participating Preferred Stock in respect thereof, then the assets available for such distribution shall be distributed ratably
to the holders of the Series A Junior Participating Preferred Stock and the holders of such parity shares in proportion to their respective
liquidation preferences.
(C) Neither
the merger or consolidation of the Corporation into or with another entity nor the merger or consolidation of any other entity into or
with the Corporation shall be deemed to be a liquidation, dissolution or winding up of the Corporation within the meaning of this Section
6.
7. Consolidation,
Merger, Etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the outstanding
shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such
case each share of Series A Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount
per share equal to the Adjustment Number times the aggregate amount of stock, securities, cash and/or any other property (payable in
kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged.
8. No
Redemption. Shares of Series A Junior Participating Preferred Stock shall not be subject to redemption by the Corporation.
9. Ranking.
The Series A Junior Participating Preferred Stock shall rank junior to all other series of Preferred Stock as to the payment of dividends
and as to the distribution of assets upon liquidation, dissolution or winding up, unless the terms of any such series shall provide otherwise,
and shall rank senior to the Common Stock as to such matters.
10. Amendment.
At any time that any shares of Series A Junior Participating Preferred Stock are outstanding, the Certificate of Incorporation of
the Corporation shall not be amended, by merger, consolidation or otherwise, which would materially alter or change the powers, preferences
or special rights of the Series A Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of two-thirds of the outstanding shares of Series A Junior Participating Preferred Stock, voting separately as a class.
11.
Fractional Shares. Series A Junior Participating Preferred Stock may be issued in fractions of a share that shall entitle the
holder, in proportion to such holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions
and to have the benefit of all other rights of holders of Series A Junior Participating Preferred Stock.
IN
WITNESS WHEREOF, the undersigned has executed this Certificate this 29th day of September, 2023.
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Staffing
360 Solutions, Inc. |
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By:
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Name:
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Title: |
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Exhibit
B
Form
of Right Certificate
Certificate
No. R-______
NOT
EXERCISABLE AFTER OCTOBER 2, 2026 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.01 PER RIGHT
AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES
THEREOF WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
RIGHT
CERTIFICATE
Staffing
360 Solutions, Inc.
This
certifies that ____________________________ or registered assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement, dated as of October 1,
2023, as the same may be amended from time to time (the “Rights Agreement”), between Staffing 360 Solutions, Inc.,
a Delaware corporation (the “Company”), and Securities Transfer Corporation, as Rights Agent (the “Rights Agent”),
to purchase from the Company at any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00
P.M., New York City time, on October 2, 2026 at the office or agency of the Rights Agent designated for such purpose, or of its successor
as Rights Agent, one one-thousandth of a fully paid non-assessable share of Series A Junior Participating Preferred Stock, par value
$0.00001 per share (the “Preferred Stock”), of the Company at a purchase price of $2.75 per one one-thousandth of a share
of Preferred Stock (the “Purchase Price”), upon presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Right Certificate (and the number of one one-thousandths of a share
of Preferred Stock which may be purchased upon exercise hereof) set forth above, and the Purchase Price set forth above, are the number
and Purchase Price as of October 1, 2023, based on the Preferred Stock as constituted at such date. As provided in the Rights Agreement,
the Purchase Price, the number of one one-thousandths of a share of Preferred Stock (or other securities or property) which may be purchased
upon the exercise of the Rights and the number of Rights evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events.
This
Right Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the
holders of the Right Certificates. Copies of the Rights Agreement are on file at the principal executive offices of the Company and the
above-mentioned office or agency of the Rights Agent. The Company will mail to the holder of this Right Certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor.
This
Right Certificate, with or without other Right Certificates, upon surrender at the office or agency of the Rights Agent designated for
such purpose, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling
the holder to purchase a like aggregate number of shares of Preferred Stock as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not
exercised.
Subject
to the provisions of the Rights Agreement, the Rights evidenced by this Certificate (i) may be redeemed by the Company at a redemption
price of $0.01 per Right or (ii) may be exchanged in whole or in part for shares of the Company’s Common Stock, par value $0.00001
per share, or shares of Preferred Stock or Equivalent Preferred Stock (as defined in the Rights Agreement).
No
fractional shares of Preferred Stock or Common Stock will be issued upon the exercise or exchange of any Right or Rights evidenced hereby
(other than fractions of Preferred Stock which are integral multiples of one one-thousandth of a share of Preferred Stock, which may,
at the election of the Company, be evidenced by depository receipts), but in lieu thereof a cash payment will be made, as provided in
the Rights Agreement.
No
holder of this Right Certificate, as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder of
the Preferred Stock or of any other securities of the Company which may at any time be issuable on the exercise or exchange hereof, nor
shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement) or to receive dividends or subscription rights, or otherwise, until the Right
or Rights evidenced by this Right Certificate shall have been exercised or exchanged as provided in the Rights Agreement.
This
Right Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent.
WITNESS
the facsimile signature of the proper officers of the Company and its corporate seal. Dated as of _________ __, 20__.
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Staffing
360 Solutions, Inc. |
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By: |
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[Name] |
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[Title] |
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ATTEST:
Countersigned:
Securities
Transfer Corporation, as Rights Agent
Form
of Reverse Side of Right Certificate
FORM
OF ASSIGNMENT
(To
be executed by the registered holder if such
holder
desires to transfer the Right Certificate)
FOR
VALUE RECEIVED __________________________ hereby sells, assigns and transfers unto ________________________________________________________
(Please
print name and address of transferee)
_______
Rights represented by this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute
and appoint ______________________________ Attorney, to transfer said Rights on the books of the within-named Company, with full power
of substitution.
Signature
Guaranteed:
Signatures
must be guaranteed by a bank, trust company, broker, dealer or other eligible institution participating in a recognized signature guarantee
medallion program.
The
undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by, were not acquired by
the undersigned from, and are not being assigned to an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement).
Form
of Reverse Side of Right Certificate - continued
FORM
OF ELECTION TO PURCHASE
(To
be executed if holder desires to exercise
Rights
represented by the Rights Certificate)
To
Staffing 360 Solutions, Inc.:
The
undersigned hereby irrevocably elects to exercise ________ Rights represented by this Right Certificate to purchase the shares of Preferred
Stock (or other securities or property) issuable upon the exercise of such Rights and requests that certificates for such shares of Preferred
Stock (or such other securities) be issued in the name of:
(Please
print name and address)
If
such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining
of such Rights shall be registered in the name of and delivered to:
Please
insert social security
or
other identifying number
(Please
print name and address)
(Signature
must conform to holder specified on Right Certificate)
Signature
Guaranteed:
Signature
must be guaranteed by a bank, trust company, broker, dealer or other eligible institution participating in a recognized signature guarantee
medallion program.
Form
of Reverse Side of Right Certificate - continued
(To
be completed)
The
undersigned certifies that the Rights evidenced by this Right Certificate are not beneficially owned by, and were not acquired by the
undersigned from, an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement).
NOTICE
The
signature in the Form of Assignment or Form of Election to Purchase, as the case may be, must conform to the name as written upon the
face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever.
In
the event the certification set forth above in the Form of Assignment or the Form of Election to Purchase, as the case may be, is not
completed, such Assignment or Election to Purchase will not be honored.
Exhibit
99.1
Staffing
360 Solutions, Inc. Adopts
Limited
Duration Stockholder Rights Plan
NEW
YORK, NY, October 2, 2023, — Staffing 360 Solutions, Inc. (Nasdaq: STAF) (“Staffing 360 Solutions” or the
“Company”), a company executing an international buy-integrate-build strategy through the acquisition of staffing organizations
in the United States and the United Kingdom, today announced that its Board of Directors (the “Board”) has adopted a limited
duration stockholder rights plan (the “Rights Plan”).
The
adoption of the Rights Plan is intended to protect the long-term interests of the Company and all of the Company’s stockholders
and enable them to realize the full potential value of their investment in the Company. The Rights Plan is designed to reduce the likelihood
that any entity, person or group would gain control of, or significant influence over, the Company through the open-market accumulation
of the Company’s shares without appropriately compensating all of the Company’s stockholders for control.
The
Rights Plan is not intended to prevent or interfere with any action with respect to the Company that the Board determines to be in the
best interests of the Company and its stockholders. Instead, it will position the Board to fulfill its fiduciary duties on behalf of
all stockholders by ensuring that the Board has sufficient time to make informed judgments about any attempts to control or significantly
influence the Company. The Rights Plan will encourage anyone seeking to gain a significant interest in the Company to negotiate directly
with the Board prior to attempting to control or significantly influence the Company.
Further,
the terms of the Rights Plan provide many recognized stockholder protections, including the following:
|
● |
The rights
will be exercisable only if any entity, person or group acquires 10% (or 20% in the case of certain passive investors) or more of
the Company’s outstanding Voting Stock (as defined below) in a transaction not approved by the Board; |
|
● |
The Rights Plan does not
contain any dead-hand, slow-hand, no-hand or similar features that would limit the ability of a future board of directors to redeem
the rights; and |
|
● |
The Rights Plan does not
preclude the Board from considering an offer that recognizes the full value of the Company. |
Pursuant
to the Rights Plan, the Company will issue one right for each share of common stock and 0.3889 rights for each share of Series H Convertible
Preferred Stock (together with the common stock, the “Voting Stock”) outstanding as of the close of business on October 21,
2023. While the Rights Plan is effective immediately, the rights generally would become exercisable only if an entity, person or group
acquires beneficial ownership of 10% (or 20% in the case of certain passive investors) or more in voting power of the Company’s
outstanding Voting Stock in a transaction not approved by the Board.
In
that situation, each holder of a right (other than the acquiring entity, person or group) will have the right to purchase from the Company
for $2.75, subject to certain potential adjustments, shares of the Company’s common stock having a market value of twice that amount.
In addition, at any time after an entity, person or group acquires 10% (or 20% in the case of certain passive investors) or more in voting
power of the Company’s outstanding Voting Stock, but less than 50% in voting power of the Company’s outstanding Voting Stock,
the Board may exchange one share of the Company’s common stock for each outstanding right (other than rights owned by such entity,
person or group, which would have become void).
Further
details about the Rights Plan will be contained in a Current Report on Form 8-K and in a Registration Statement on Form 8-A that the
Company will file with the U.S. Securities and Exchange Commission (“SEC”).
About
Staffing 360 Solutions
Staffing
360 Solutions is engaged in the execution of an international buy-integrate-build strategy through the acquisition of domestic and international
staffing organizations in the United States and United Kingdom. The Company believes that the staffing industry offers opportunities
for accretive acquisitions and as part of its targeted consolidation model, is pursuing acquisition targets in the finance and accounting,
administrative, engineering, IT, and light industrial staffing space. For more information, visit http://www.staffing360solutions.com.
Follow Staffing 360 Solutions on Facebook, LinkedIn and Twitter.
Cautionary
Note Regarding Forward Looking Statements
This
press release contains forward-looking statements, which may be identified by words such as “expect,” “look forward
to,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,”
“will,” “project” or words of similar meaning. Forward-looking statements are not guarantees of future performance,
are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s
control, and cannot be predicted or quantified; consequently, actual results may differ materially from those expressed or implied by
such forward-looking statements. Such risks and uncertainties include, without limitation, our ability to retain our listing on the Nasdaq
Capital Market; market and other conditions; the geographic, social and economic impact of COVID-19 on the Company’s ability to
conduct its business and raise capital in the future when needed; weakness in general economic conditions and levels of capital spending
by customers in the industries the Company serves; weakness or volatility in the financial and capital markets, which may result in the
postponement or cancellation of customer capital projects or the inability of the Company’s customers to pay the Company’s
fees; the termination of a major customer contract or project; delays or reductions in U.S. government spending; credit risks associated
with the Company’s customers; competitive market pressures; the availability and cost of qualified labor; the Company’s level
of success in attracting, training and retaining qualified management personnel and other staff employees; changes in tax laws and other
government regulations, including the impact of health care reform laws and regulations; the possibility of incurring liability for the
Company’s business activities, including, but not limited to, the activities of the Company’s temporary employees; the Company’s
performance on customer contracts; negative outcome of pending and future claims and litigation; government policies, legislation or
judicial decisions adverse to the Company’s businesses; the Company’s ability to access the capital markets by pursuing additional
debt and equity financing to fund its business plan and expenses on terms acceptable to the Company or at all; and the Company’s
ability to comply with its contractual covenants, including in respect of its debt agreements, as well as various additional risks, many
of which are now unknown and generally out of the Company’s control, and which are detailed from time to time in reports filed
by the Company with the SEC, including quarterly reports on Form 10-Q, current reports on Form 8-K and annual reports on Form 10-K. Staffing
360 Solutions does not undertake any duty to update any statements contained herein (including any forward-looking statements), except
as required by law.
Investor
Relations Contact:
Joe
Yelenic
Senior
Vice President - Corporate Finance
Email: Jyelenic@staffing360solutions.com
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