THE SECURITIES EVIDENCED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND HAVE BEEN TAKEN FOR
INVESTMENT PURPOSES ONLY, AND NOT WITH A VIEW TO THE DISTRIBUTION THEREOF,
AND, EXCEPT AS STATED IN THE SECURITIES PURCHASE AGREEMENT DATED APRIL 9,
1998, PURSUANT TO WHICH SUCH SECURITIES WERE ISSUED, SUCH SECURITIES MAY NOT
BE SOLD, PLEDGED OR TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT OR REGULATION A NOTIFICATION UNDER THE ACT COVERING SUCH
SECURITIES OR THE COMPANY RECEIVES AN OPINION OF COUNSEL (WHICH MAY BE
COUNSEL FOR THE COMPANY), REASONABLY SATISFACTORY IN FORM AND CONTENT TO THE
COMPANY, STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION
AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT.
JD AMERICAN WORKWEAR, INC.
No. ____
WARRANT TO PURCHASE
799,000 SHARES (SUBJECT TO ADJUSTMENT) OF
COMMON STOCK
void after April 1, 2008
This certifies that for value received THE UNION LABOR LIFE INSURANCE
COMPANY, or registered assigns ("Holder"), is entitled, subject to the terms
set forth below, at any time from and after April 9, 1998 (the "Issue Date")
and before 5:00 P.M., Eastern Time, on April 1, 2008, to purchase from JD
AMERICAN WORKWEAR, INC., a Delaware corporation (the "Company"), 799,000
shares (subject to adjustment as described herein), of the Common Stock, par
value $.002 per share (which authorized class of shares is herein called the
"Common Stock") of the Company, as constituted on the Issue Date, upon
surrender hereof, at the principal office of the Company referred to below,
with a duly executed subscription form in the form attached hereto as
Exhibit A and simultaneous payment therefor in lawful money of the United
States or otherwise as hereinafter provided, at the price of one cent ($.01)
per share (the "Purchase Price"). The number and character of such shares
of Common Stock are subject to further adjustment as provided below, and the
term "Common Stock" shall include, unless the context otherwise requires,
the stock and other securities and property at the time receivable upon the
exercise of this Warrant. The term "Warrants" as used herein shall include
this Warrant and any warrants delivered in substitution or exchange therefor
as provided herein.
1. Exercise. This Warrant may be exercised at any time or from time
to time from and after the Issue Date and before 5:00 P.M., Eastern Time, on
April 1, 2008, on any business day, for the full number of shares of Common
Stock called for hereby, by surrendering it at the principal office of the
Company, at 00 Xxx Xxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxx Xxxxxx 00000, with the
subscription form duly executed, together with payment in an amount equal to
(a) the number of shares of Common Stock called for on the face of this
Warrant, as adjusted in accordance with the preceding paragraph of this
Warrant (without giving effect to any further adjustment herein) multiplied
(b) by the Purchase Price. Payment of this amount may be made (1) by
payment in cash or by corporate check, payable to the order of the Company,
or (2) by the Company not issuing that number of shares of Common Stock
subject to this Warrant having a Fair Market Value (as defined below) on the
date of exercise equal to such sum, as Holder may determine. This Warrant
may be exercised for less than the full number of shares of Common Stock at
the time called for hereby, except that the number of shares receivable upon
the exercise of this Warrant as a whole, and the sum payable upon the
exercise of this Warrant as a whole, shall be proportionately reduced. Upon
a partial exercise of this Warrant in accordance with the terms hereof, this
Warrant shall be surrendered, and a new Warrant of the same tenor and for
the purchase of the number of such shares not purchased upon such exercise
shall be issued by the Company to Holder without any charge therefor. A
Warrant shall be deemed to have been exercised immediately prior to the
close of business on the date of its surrender for exercise as provided
above, and the person entitled to receive the shares of Common Stock
issuable upon such exercise shall be treated for all purposes as the holder
of such shares of record as of the close of business on such date. As soon
as practicable on or after such date, the Company shall issue and deliver to
the person or persons entitled to receive the same a certificate or
certificates for the number of full shares of Common Stock issuable upon
such exercise, together with cash, in lieu of any fraction of a share, equal
to such fraction of the then Fair Market Value on the date of exercise of
one full share of Common Stock.
"Fair Market Value" shall mean, as of any date, (i) if shares of the
Common Stock are listed on a national securities exchange, the average of
the closing prices as reported for composite transactions during the 20
consecutive trading days preceding the trading day immediately prior to such
date or, if no sale occurred on a trading day, then the mean between the
closing bid and asked prices on such exchange on such trading day; (ii) if
shares of the Common Stock are not so listed but are traded on the Nasdaq
National Market ("NMM"), the average of the closing prices as reported on
the NMM during the 20 consecutive trading days preceding the trading day
immediately prior to such date or, if no sale occurred on a trading day,
then the mean between the highest bid and lowest asked prices as of the
close of business on such trading day, as reported on the NMM; or (iii) if
the shares of the Common Stock are not traded on a national securities
exchange or the NMM but are otherwise traded over-the-counter, the
arithmetic average (for consecutive trading days) of the mean between the
highest bid and lowest asked prices as of the close of business during the
20 consecutive trading days preceding the trading day immediately prior to
such date as quoted on the National Association of Securities Dealers
Automated Quotation system or an equivalent generally accepted reporting
service.
2. Payment of Taxes. All shares of Common Stock issued upon the
exercise of a Warrant shall be validly issued, fully paid and
non-assessable, and the Company shall pay all taxes and other governmental
charges that may be imposed in respect of the issue or delivery thereof.
3. Transfer and Exchange. This Warrant and all rights hereunder are
transferable, in whole or in part, on the books of the Company maintained
for such purpose at its principal office referred to above by Holder in
person or by duly authorized attorney, upon surrender of this Warrant
together with a completed and executed assignment form in the form attached
as Exhibit B and upon payment of any necessary transfer tax or other
governmental charge imposed upon such transfer. Upon any partial transfer,
the Company will issue and deliver to Holder a new Warrant or Warrants with
respect to the shares of Common Stock not so transferred. Each taker and
holder of this Warrant, by taking or holding the same, consents and agrees
that this Warrant when endorsed in blank shall be deemed negotiable and that
when this Warrant shall have been so endorsed, the holder hereof may be
treated by the Company and all other persons dealing with this Warrant as
the absolute owner hereof for any purpose and as the person entitled to
exercise the rights represented hereby, or to the transfer hereof on the
books of the Company, any notice to the contrary notwithstanding; but until
such transfer on such books, the Company may treat the registered Holder
hereof as the owner for all purposes.
This Warrant is exchangeable at such office for Warrants for the same
aggregate number of shares of Common Stock, each new Warrant to represent
the right to purchase such number of shares as the Holder shall designate at
the time of such exchange.
4. A. Adjustment for Dividends in Other Stock and Property;
Reclassifications. In case at any time or from time to time the holders of
the Common Stock (or any shares of stock or other securities at the time
receivable upon the exercise of this Warrant) shall have received, or, on or
after the record date fixed for the determination of eligible shareholders,
shall have become entitled to receive, without payment therefor,
(1) other or additional stock or other securities or property
(other than cash) by way of dividend,
(2) any cash or other property paid or payable out of any
source other than retained earnings (determined in accordance with
generally accepted accounting principles), or
(3) other or additional stock or other securities or property
(including cash) by way of stock-split, spin-off, reclassification,
combination of shares or similar corporate rearrangement,
(other than (x) additional shares of Common Stock or any other stock or
securities into which such Common Stock shall have been changed, (y) any
other stock or securities convertible into or exchangeable for such Common
Stock or such other stock or securities or (z) any Stock Purchase Rights,
issued as a stock dividend or stock-split, adjustments in respect of which
shall be covered by the terms of Section 4.C, 4.D, 4.E or 4.I), then and in
each such case Holder, upon the exercise hereof as provided in Section 1,
shall be entitled to receive the amount of stock and other securities and
property (including cash in the cases referred to in clauses (2) and (3)
above) which such Holder would hold on the date of such exercise if on the
Issue Date Holder had been the holder of record of the number of shares of
Common Stock called for on the face of this Warrant, as adjusted in
accordance with the first paragraph of this Warrant, and had thereafter,
during the period from the Issue Date to and including the date of such
exercise, retained such shares and/or all other or additional stock and
other securities and property (including cash in the cases referred to in
clause (2) and (3) above) receivable by it as aforesaid during such period,
giving effect to all adjustments called for during such period by Sections
4.A and 4.B.
B. Adjustment for Reorganization, Consolidation and Merger. In case
of any reorganization of the Company (or any other corporation the stock or
other securities of which are at the time receivable on the exercise of this
Warrant) after the Issue Date, or in case, after such date, the Company (or
any such other corporation) shall consolidate with or merge into another
corporation or entity or convey all or substantially all its assets to
another corporation or entity, then and in each such case Holder, upon the
exercise hereof as provided in Section 1 at any time after the consummation
of such reorganization, consolidation, merger or conveyance, shall be
entitled to receive, in lieu of the stock or other securities and property
receivable upon the exercise of this Warrant prior to such consummation, the
stock or other securities or property to which such Holder would have been
entitled upon such consummation if Holder had exercised this Warrant
immediately prior thereto, all subject to further adjustment as provided in
Sections 4.A, 4.B, 4.C, 4.D and 4.E; in each such case, the terms of this
Warrant shall be applicable to the shares of stock or other securities or
property receivable upon the exercise of this Warrant after such
consummation.
C. Sale of Shares Below Subscription Price.
(1) If at any time or from time to time the Company issues or
sells, or is deemed by the express provisions of this Section 4.C to
have issued or sold, Additional Shares of Common Stock (as hereinafter
defined), other than as a dividend or other distribution on any class
of stock as provided in Section 4.D and other than upon a subdivision
or combination of shares of Common Stock as provided in Section 4.E,
for an Effective Price (as hereinafter defined) less than $5.00 (the
"Subscription Price") or, if an adjustment in the Subscription Price
has theretofore been made, then less than the existing Subscription
Price, then and in each such case
(A) the Holder of this Warrant shall be entitled to
receive, in lieu of the number of shares theretofore receivable
upon the exercise of this Warrant, a number of shares of Common
Stock determined by (i) dividing $5.00 (which amount shall not
be subject to adjustment) by the Subscription Price as adjusted
as a result of such issue or sale (as provided below), and (ii)
multiplying the resulting quotient by the number of shares of
Common Stock called for on the face of this Warrant, as adjusted
in accordance with the first paragraph of this Warrant; and
(B) the then existing Subscription Price shall be
reduced, as of the opening of business on the date of such issue
or sale, as follows:
(I) if such issuance or deemed issuance occurs
during the twelve-month period immediately following the
Issue Date and constitutes a Financing Transaction (as
hereinafter defined), the Subscription Price shall be
reduced to the Effective Price at which the Additional
Shares of Common Stock were issued or deemed to have been
issued; and
(II) if such issuance or deemed issuance occurs
during the twelve-month period immediately following the
Issue Date and does not constitute a Financing Transaction
or occurs after the twelve-month period immediately
following the Issue Date, the Subscription Price shall be
reduced to a price determined by multiplying that
Subscription Price by a fraction (i) the numerator of
which shall be (a) the number of shares of Common Stock
outstanding at the close of business on the day next
preceding the date of such issue or sale, plus (b) the
number of shares of Common Stock which the aggregate
consideration received (or by the express provisions
hereof deemed to have been received) by the Company for
the total number of Additional Shares of Common Stock so
issued would purchase at such Subscription Price, plus (c)
the number of shares of Common Stock into which all
outstanding shares of Series B Preferred Stock of the
Company are convertible at the close of business on the
date next preceding the date of such issue or sale, plus
(d) the number of shares of Common Stock into which all
outstanding shares of Series A Preferred Stock of the
Company are convertible at the close of business on the
date next preceding the date of such issue or sale, plus
(e) the number of shares of Common Stock into which all
outstanding shares of Series A Preferred Stock of the
Company are convertible at the close of business on the
date next preceding the date of such issue or sale, plus
(f) the number of shares of Common Stock underlying all
Other Securities (as hereinafter defined) at the close of
business on the date next preceding the date of such issue
or sale, and (ii) the denominator of which shall be (a)
the number of shares of Common Stock outstanding at the
close of business on the date of such issue or sale after
giving effect to such issue of Additional Shares of Common
Stock, plus (b) the number of shares of Common Stock into
which all outstanding shares of Series B Preferred Stock
of the Company are convertible at the close of business on
the date next preceding the date of such issue or sale,
plus (c) the number of shares of Common Stock into which
all outstanding shares of all Series A Preferred Stock of
the Company are convertible at the close of business on
the date next preceding the date of such issue or sale,
plus (d) the number of shares of Common Stock underlying
the Other Securities at the close of business on the date
next preceding the date of such issue or sale.
"Financing Transaction" means any transaction or series of
related transactions in which Additional Shares of Common
Stock are issued or sold, or are deemed to have been
issued or sold, for at least $250,000 in the aggregate.
(2) For the purpose of making any adjustment required under
this Section 4.C, the consideration received by the Company for any
issue or sale of securities shall (i) to the extent it consists of
cash be computed at the amount of cash received by the Company,
(ii) to the extent it consists of property other than cash, be
computed at the fair value of that property as determined in good
faith by the Board of Directors of the Company (the "Board"), (iii) if
Additional Shares of Common Stock, Convertible Securities (as
hereinafter defined) or rights or options to purchase either
Additional Shares of Common Stock or Convertible Securities are issued
or sold together with other stock or securities or other assets of the
Company for a consideration which covers both, be computed as the
portion of the consideration so received that may be reasonably
determined in good faith by the Board to be allocable to such
Additional Shares of Common Stock, Convertible Securities or rights or
options, and (iv) be computed after reduction for all expenses payable
by the Company in connection with such issue or sale.
(3) For the purpose of the adjustment required under this
Section 4.C, if the Company issues or sells any rights or options for
the purchase of, or stock or other securities convertible into or
exchangeable for, Additional Shares of Common Stock (such convertible
or exchangeable stock or securities being hereinafter referred to as
"Convertible Securities") and if the Effective Price of such
Additional Shares of Common Stock is less than the Subscription Price
then in effect, then in each case the Company shall be deemed to have
issued at the time of the issuance of such rights or options or
Convertible Securities the maximum number of Additional Shares of
Common Stock issuable upon exercise, conversion or exchange thereof
and to have received as consideration for the issuance of such shares
an amount equal to the total amount of the consideration, if any,
received by the Company for the issuance of such rights or options or
Convertible Securities, plus, in the case of such rights or options,
the minimum amounts of consideration, if any, payable to the Company
upon the exercise of such rights or options, plus, in the case of
Convertible Securities, the minimum amounts of consideration, if any,
payable to the Company (other than by cancellation of liabilities or
obligations evidenced by such Convertible Securities) upon the
conversion or exchange thereof. No further adjustment of the
Subscription Price, adjusted upon the issuance of such rights, options
or Convertible Securities, shall be made as a result of the actual
issuance of Additional Shares of Common Stock on the exercise of any
such rights or options or the conversion or exchange of any such
Convertible Securities. If any such rights or options or the
conversion or exchange privilege represented by any such Convertible
Securities shall expire without having been exercised, the
Subscription Price adjusted upon the issuance of such rights, options
or Convertible Securities shall be readjusted to the Subscription
Price which would have been in effect had an adjustment been made on
the basis that the only Additional Shares of Common Stock so issued
were the Additional Shares of Common Stock, if any, actually issued or
sold on the exercise of such rights or options or rights of conversion
or exchange of such Convertible Securities, and such Additional Shares
of Common Stock, if any, were issued or sold for the consideration
actually received by the Company upon such exercise, plus the
consideration, if any, actually received by the Company for the
granting of all such rights or options, whether or not exercised, plus
the consideration received for issuing or selling the Convertible
Securities actually converted or exchanged, plus the consideration, if
any, actually received by the Company (other than by cancellation of
liabilities or obligations evidenced by such Convertible Securities)
on the conversion or exchange of such Convertible Securities.
(4) For the purpose of the adjustment required under this
Section 4.C, if the Company issues or sells, or is deemed by the
express provisions of this subsection to have issued or sold, any
rights or options for the purchase of Convertible Securities and if
the Effective Price of the Additional Shares of Common Stock
underlying such Convertible Securities is less than the Subscription
Price then in effect, then in each such case the Company shall be
deemed to have issued at the time of the issuance of such rights or
options the maximum number of Additional Shares of Common Stock
issuable upon conversion or exchange of the total amount of
Convertible Securities covered by such rights or options and to have
received as consideration for the issuance of such Additional Shares
of Common Stock an amount equal to the amount of consideration, if
any, received by the Company for the issuance of such rights or
options, plus the minimum amounts of consideration, if any, payable to
the Company upon the exercise of such rights or options and plus the
minimum amount of consideration, if any, payable to the Company
other than by cancellation of liabilities or obligations evidenced by
such Convertible Securities) upon the conversion or exchange of such
Convertible Securities. No further adjustment of the Subscription
Price, adjusted upon the issuance of such rights or options, shall be
made as a result of the actual issuance of the Convertible Securities
upon the exercise of such rights or options or upon the actual
issuance of Additional Shares of Common Stock upon the conversion or
exchange of such Convertible Securities. The provisions of paragraph
(3) above for the readjustment of the Subscription Price upon the
expiration of rights or options or the rights of conversion or
exchange of Convertible Securities shall apply mutatis mutandis to the
rights, options and Convertible Securities referred to in this
paragraph (4).
(5) "Additional Shares of Common Stock" shall mean all shares
of Common Stock issued by the Company on or after the Original Issue
Date, whether or not subsequently reacquired or retired by the
Company, other than (i) shares of Common Stock issued upon conversion
of the Series B Preferred Stock of the Company in accordance with the
applicable certificate of designation, (ii) shares of Common Stock
issued upon conversion of the Series A Preferred Stock of the Company
in accordance with the applicable certificate of designation, (iii)
shares of Common Stock issued upon the exercise of this Warrant, and
(iv) shares of Common Stock issued upon the exercise of Dividend
Warrants issued pursuant to Section 7.19 of the Purchase Agreement.
The "Effective Price" of Additional Shares of Common Stock shall mean
the quotient determined by dividing the total number of Additional
Shares of Common Stock issued or sold, or deemed to have been issued
or sold by the Company under this Section 4.C, into the aggregate
consideration received, or deemed to have been received, by the
Company for such issue under this Section 4.C, for such Additional
Shares of Common Stock. "Other Securities" with respect to an issue
or sale of Additional Shares of Common Stock shall mean (1)
Convertible Securities (other than the Series B Preferred Stock of the
Company and the Series A Preferred Stock of the Company), and (2)
this Warrant; "the number of shares of Common Stock underlying Other
Securities" on a particular date shall mean the number of shares of
Common Stock issuable upon the exercise, conversion or exchange, as
the case may be, of such Other Securities at the close of business on
such date.
(6) Any reduction in the conversion price of any Convertible
Security, whether outstanding on the Issue Date or thereafter, or the
subscription price of any option, warrant or right to purchase Common
Stock or any Convertible Security (whether such option, warrant or
right is outstanding on the Issue Date or thereafter), to an Effective
Price less than the then Subscription Price shall be deemed to be an
issuance of such Convertible Security and the issuance of all such
options, warrants or subscription rights, and the provisions of
Section 4.C(3) and (4) shall apply thereto mutatis mutandis.
(7) Dilution in Case of Other Stock or Securities. In case any
shares of stock or other securities, other than Common Stock of the
Company, shall at the time be receivable upon the exercise of this
Warrant, and in case any additional shares of such stock or any
additional such securities (or any stock or other securities
convertible into or exchangeable for any such stock or securities)
shall be issued or sold for a consideration per share such as to
dilute the purchase rights evidenced by this Warrant, then and in each
such case the Subscription Price shall forthwith be adjusted,
substantially in the manner provided for above in this Section 4.C, so
as to protect the holder of this Warrant against the effect of such
dilution.
(8) Record Date Deemed Date of Issuance. In case the Company
shall take a record of the holders of shares of its stock of any class
for the purpose of entitling them (a) to receive a dividend or a
distribution payable in Common Stock or in Convertible Securities, or
(b) to subscribe for, purchase or otherwise acquire Common Stock or
Convertible Securities, then such record date shall be deemed to be
the date of the issue or sale of the Additional Shares of Common Stock
issued or sold or deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution,
or the date of the granting of such rights of subscription, purchase
or other acquisition, as the case may be.
D. Adjustment for Certain Dividends and Distributions. If the
Company at any time or from time to time makes, or fixes a record date for
the determination of holders of Common Stock entitled to receive, a dividend
or other distribution payable in additional shares of Common Stock, then and
in each such event
(1) the Subscription Price then in effect shall be decreased as
of the time of such issuance or, in the event such record date is
fixed, as of the close of business on such record date, by multiplying
the Subscription Price then in effect by a fraction (A) the numerator
of which is the total number of shares of Common Stock issued and
outstanding immediately prior to the time of such issuance or the
close of business on such record date, and (B) the denominator of
which shall be the total number of shares of Common Stock issued and
outstanding immediately prior to the time of such issuance or the
close of business on such record date as the case may be, plus the
number of shares of Common Stock issuable in payment of such dividend
or distribution; provided, however, that if such record date is fixed
and such dividend is not fully paid or if such distribution is not
fully made on the date fixed therefor, the Subscription Price shall be
recomputed accordingly as of the close of business on such record
date, and thereafter the Subscription Price shall be adjusted pursuant
to this Section 4.D as of the time of actual payment of such dividends
or distributions; and
(2) the number of shares of Common Stock theretofore receivable
upon the exercise of this Warrant shall be increased, as of the time
of such issuance or, in the event such record date is fixed, as of the
close of business on such record date, in inverse proportion to the
decrease in the Subscription Price.
E. Stock Split and Reverse Stock Split. If the Company at any time
or from time to time effects a reverse stock split or subdivision of the
outstanding Common Stock, the Subscription Price then in effect immediately
before that stock split or subdivision shall be proportionately decreased
and the number of shares of Common Stock theretofore receivable upon the
exercise of this Warrant shall be proportionately increased. If the Company
at any time or from time to time effects a reverse stock split or combines
the outstanding shares of Common Stock into a smaller number of shares, the
Subscription Price then in effect immediately before that reverse stock
split or combination shall be proportionately increased and the number of
shares of Common Stock theretofore receivable upon the exercise of this
Warrant shall be proportionately decreased. Each adjustment under this
Section 4.E shall become effective at the close of business on the date the
stock split, subdivision, reverse stock split or combination becomes
effective.
F. No Dilution or Impairment. The Company will not, by amendment of
its certificate of incorporation or through reorganization, consolidation,
merger, dissolution, issue or sale of securities, sale of assets or any
other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of the Warrants, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of
the holders of the Warrants against dilution or other impairment. Without
limiting the generality of the foregoing, the Company (a) will not increase
the par value of any share of stock receivable upon the exercise of the
Warrants above the amount payable therefor upon such exercise, and (b) will
take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and non-assessable shares
upon the exercise of all Warrants at the time outstanding.
G. Accountants' Certificate as to Adjustment. In each case of an
adjustment in the number of shares of Common Stock or the number or type of
other stock, securities or property receivable on the exercise of the
Warrants, the Company at its expense shall cause independent public
accountants of recognized standing selected by the Company (who may be the
independent public accountants then auditing the books of the Company) to
compute such adjustment in accordance with the terms of the Warrants and
prepare a certificate setting forth such adjustment and showing in detail
the facts upon which such adjustment is based, including a statement of (a)
the consideration received or to be received by the Company for any
Additional Shares of Common Stock issued or sold or deemed to have been
issued or sold, (b) the number of shares of Common Stock outstanding or
deemed to be outstanding, and (c) the Subscription Price. The Company will
forthwith mail a copy of each such certificate to each holder of a Warrant
at the time outstanding.
H. Notices of Record Date. In case
(1) the Company shall take a record of the holders of its
Common Stock (or other stock or securities at the time receivable upon
the exercise of the Warrants) for the purpose of entitling them to
receive any dividend or other distribution, or any right to subscribe
for or purchase any shares of stock of any class or any other
securities, or to receive any other right, or
(2) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any
consolidation or merger of the Company with or into another
corporation, or any conveyance of all or substantially all of the
assets of the Company to another corporation, or
(3) of any voluntary dissolution, liquidation or winding-up of
the Company,
then, and in each such case, the Company will mail or cause to be mailed to
each holder of a Warrant at the time outstanding a notice specifying, as the
case may be, (a) the date on which a record is to be taken for the purpose
of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, or (b) the date on which
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up is expected to take place, and the
time, if any is to be fixed, as of which the holders of record of Common
Stock (or such stock or securities at the time receivable upon the exercise
of the Warrants) shall be entitled to exchange their shares of Common Stock
(or such other stock or securities) for securities or other property
deliverable upon such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding-up, such notice
shall be mailed at least 30 days prior to the date therein specified.
I. Stock Purchase Rights. If at any time or from time to time, the
Company grants or issues to the record holders of the Common Stock any
options, warrants or subscription rights (collectively, the "Stock Purchase
Rights") entitling a holder to purchase Common Stock or any security
convertible into or exchangeable for Common Stock or to purchase any other
stock or securities of the Company, the Holder shall be entitled to acquire,
upon the terms applicable to such Stock Purchase Rights, the aggregate Stock
Purchase Rights which Holder could have acquired if Holder had been the
record holder of the maximum number of shares of Common Stock issuable upon
exercise of this Warrant on both (x) the record date for such grant or
issuance of such Subscription Rights, and (y) the date of the grant or
issuance of such Stock Purchase Rights.
J. No Payment of Subscription Price. The Holder shall not be
obligated to pay all or any portion of the Subscription Price because the
Subscription Price is only used herein for the purpose of determining the
number of shares of Common Stock that are issuable upon exercise of this
Warrant upon the occurrence of one or more events that the Company has
agreed should result in an adjustment in the number of such shares.
5. Loss or Mutilation. Upon receipt by the Company of evidence
satisfactory to it (in the exercise of reasonable discretion) of the
ownership of and the loss, theft, destruction or mutilation of any Warrant
and (in the case of loss, theft or destruction) of indemnity satisfactory to
it (in the exercise of reasonable discretion), and (in the case of
mutilation) upon surrender and cancellation thereof, the Company will
execute and deliver in lieu thereof a new Warrant of like tenor.
6. Reservation of Common Stock. The Company shall at all times
reserve and keep available for issue upon the exercise of Warrants such
number of its authorized but unissued shares of Common Stock as will be
sufficient to permit the exercise in full of all outstanding Warrants.
7. Securities Purchase Agreement and Registration Rights Agreement.
This Warrant has been issued pursuant to the Securities Purchase Agreement
dated as of April 9, 1998 between the Company and The Union Labor Life
Insurance Company (the "Purchase Agreement"), and the transferability of
this Warrant and the Common Stock issuable upon the exercise hereof are
subject to the Purchase Agreement. In addition, the Holder of this Warrant
and the Common Stock issuable upon the exercise hereof are entitled to have
such Common Stock registered under the Securities Act of 1933 in accordance
with the Registration Rights Agreement referred to in the Purchase
Agreement.
8. Notices. All notices and other communications from the Company to
the holder of this Warrant shall be mailed by first-class registered or
certified mail, postage prepaid, to the address furnished to the Company in
writing by the last holder of this Warrant who shall have furnished an
address to the Company in writing.
9. Change; Waiver. Neither this Warrant nor any term hereof may be
changed, waived, discharged or terminated orally but only by an instrument
in writing signed by the party against which enforcement of the change,
waiver, discharge or termination is sought.
10. Headings. The headings in this Warrant are for purposes of
convenience in reference only, and shall not be deemed to constitute a part
hereof.
11. Law Governing. This Warrant shall be construed and enforced in
accordance with and governed by the internal laws, and not the law of
conflicts of laws, of the State of New York.
DATED: April 7, 1998
JD AMERICAN WORKWEAR, INC.
By: /s/ XXXXX XXXXXXX
Xxxxx XxXxxxx, President
EXHIBIT A
SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant)
The undersigned registered owner of this Warrant irrevocably exercises
this Warrant and purchases _______ of the number of shares of Common Stock
of JD American Workwear, Inc., purchasable with this Warrant, and herewith
makes payment therefor, all at the price and on the terms and conditions
specified in this Warrant.
DATED:__________________
_______________________________
(Signature of Registered Owner)
_______________________________
(Street Address)
_______________________________
(City) (State) (Zip)
EXHIBIT B
FORM OF ASSIGNMENT
FOR VALUE RECEIVED the undersigned registered owner of this Warrant
hereby sells, assigns and transfers unto the Assignee named below all of the
rights of the undersigned under the within Warrant, with respect to the
number of shares of Common Stock set forth below:
Name of Assignee Address No. of Shares
---------------- ------- -------------
and does hereby irrevocably constitute and appoint ______________________
Attorney to make such transfer on the books of JD American Workwear, Inc.,
maintained for the purpose, with full power of substitution in the premises.
DATED:__________________
_______________________________
(Signature)
_______________________________
(Witness)
