CERTIFICATE OF THE DESIGNATIONS, POWERS,
PREFERENCES AND RIGHTS
OF THE
SERIES A REDEEMABLE PARTICIPATING PREFERRED STOCK
($.01 par value per share)
of
EVERLAST WORLDWIDE INC.
(f/k/a Active Apparel Group, Inc.)
a Delaware Corporation
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Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
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EVERLAST WORLDWIDE INC. (f/k/a Active Apparel Group, Inc.), a
corporation organized and existing under the General Corporation Law of the
State of Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
FIRST: That, pursuant to authority conferred upon the Board of
Directors of the Corporation (the "Board") by the Certificate of Incorporation
of said Corporation, and pursuant to the provisions of Section 151 of the
Delaware General Corporation Law, there hereby is created, out of the 1,000,000
shares of Preferred Stock of the Corporation authorized in Article FOURTH of the
Certificate of Incorporation (the "Preferred Stock"), a series of the Preferred
Stock consisting of 45,000 shares, $.01 par value per share, to be designated
"Series A Preferred Stock," and to that end the Board adopted a resolution
providing for the designations, powers, preferences and rights, and the
qualifications, limitations and restrictions of, the Series A Redeemable
Participating Preferred Stock, which resolution is as follows:
RESOLVED, that the Certificate of the Designations,
Powers, Preferences and Rights of the Series A Convertible Preferred
Stock ("Certificate of Designation") be and is hereby authorized and
approved, which Certificate of Designation shall be filed with the
Delaware Secretary of State in the form as follows:
1. Dividends.
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Commencing on the date of issuance of the Series A
Preferred Stock, dividends shall accrue to the holders of the Series
A Preferred Stock as provided in this Section 1. The aggregate
dividends for any fiscal year to be divided pro rata among all
holders of
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outstanding Series A Preferred Stock as of the start of such fiscal
year (or as of the date of issuance for the fiscal year ending
December 31, 2000) (the "Dividend Period") shall be the product of
(i) two-thirds (2/3) multiplied by (ii) the Net After Tax Profits
(as defined in Section 10 hereof) multiplied by (iii) the
Outstanding Redeemable Percentage (as defined in Section 10 hereof)
(the "Preferred Dividends"). The dividends payable for a fiscal year
shall be due on March 15 of the succeeding fiscal year, or such
later date that the Corporation's audited financial statements have
been completed and the Corporation shall have received a signed
opinion from its independent auditors in respect of such financial
statements, but in no event shall the payment be made later than
March 31 of the succeeding fiscal year to the extent the Corporation
has funds legally available; provided, however, that the dividend
payments payable for the fiscal year ending December 31, 2000 shall
be due on March 15, 2002, or such later date that the Corporation's
audited financial statements for fiscal year ending December 31,
2001 have been completed and the Corporation has received a signed
opinion from its independent auditors, but in no event shall the
payment be made later than March 31, 2002 to the extent the
Corporation has funds legally available. If the Corporation fails to
pay the dividends to any holder of Series A Preferred Stock, the
Corporation shall be subject to the provisions of Section 4(b)
hereof.
Preferred Dividends on shares of Series A Preferred
Stock shall be cumulative (whether or not there shall be net profits
or net assets of the Corporation legally available for the payment
of such dividends), so that if at any time the Preferred Dividends
upon the Series A Preferred Stock to the end of the last completed
Dividend Period shall not have been paid and a sum sufficient for
the payment thereof set apart, the amount of the deficiency in such
Preferred Dividends shall be fully paid (but without interest), or
Preferred Dividends in such amounts shall have been declared on the
shares of the Series A Preferred Stock and a sum sufficient for the
payment thereof shall have been set apart for such payment, before
any dividend shall be declared or paid or any other distribution
ordered or made upon any class of stock ranking as to dividends or
upon liquidation junior to the Series A Preferred Stock (other than
a dividend payable in such junior stock) and before any sum or sums
shall be set aside for or applied to the purchase or redemption of
any shares of any class of stock ranking as to dividends or upon
liquidation junior to the Series A Preferred Stock (with respect to
rights to dividends and on liquidation, the Series A Preferred Stock
shall rank prior to the Common Stock (as hereinafter defined)), the
Preferred Dividends must be paid. All Preferred Dividends declared
upon the Series A Preferred Stock shall be declared pro rata per
share. Holders of shares of Series A Preferred Stock shall not be
entitled to any Preferred Dividends, whether payable in cash,
property or stock, in excess of the Preferred Dividends at the rate
set forth above. All payments due under this Section 1 to any holder
of shares of Series A Preferred Stock shall be made to the nearest
cent.
2. Redemptions.
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(a) Mandatory Redemption. (i) So long as any Series A
Preferred Stock remains outstanding, the Corporation shall be
required to redeem $5,000,000 aggregate Redemption
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Value of Series A Preferred Stock (5,000 shares) on December 31,
2001 and every December 31st thereafter (the "Mandatory Redemption
Date") until all shares of Series A Preferred Stock have been
redeemed. For each share of Series A Preferred Stock which is to be
redeemed hereunder, the Corporation shall be obligated on each
Mandatory Redemption Date to deliver to the holder thereof (upon
surrender by such holder at the Corporation's principal office of
the certificate representing such shares of Series A Preferred
Stock) a check for the Redemption Value.
(ii) If the funds of the Corporation legally available
for redemption of shares of Series A Preferred Stock on any
Mandatory Redemption Date are insufficient to redeem the total
number of shares of Series A Preferred Stock to be redeemed on such
date pursuant to Section 2(a)(i), the Corporation shall be subject
to the provisions of Section 4(a) hereof. The Corporation shall use
all funds that are legally available for such redemption to redeem
the greatest number of share of Series A Preferred Stock possible,
pro rata among the holders of outstanding shares of Series A
Preferred Stock. At any time thereafter when additional funds of the
Corporation are legally available for the redemption of shares of
Series A Preferred Stock, such funds shall be used to redeem the
balance of the shares of Series A Preferred Stock as aforesaid which
the Corporation had become obligated to redeem on any Mandatory
Redemption Date but which it has not redeemed.
(b) Optional Redemptions. The Corporation may, at the
end of any quarter, redeem all of the shares of Series A Preferred
Stock then outstanding. The Corporation may also redeem a portion of
the shares of Series A Preferred Stock then outstanding at the end
of each fiscal year. Upon any such optional redemption, the
Corporation shall pay a price per share equal to 105% of the
Redemption Value; provided, in the event of a partial redemption,
the Corporation shall only pay 105% of the Redemption Value of the
shares so redeemed that year once the Company has redeemed shares
having an aggregate Redemption Value of $5,000,000.
(c) Redemption Upon a Change of Control. Upon a Change
of Control within three (3) years of the date hereof (as hereinafter
defined), the Corporation shall be required to redeem all shares of
Series A Preferred Stock that are outstanding on that date of the
Change of Control. For purposes of this Section 2(c), a Change of
Control shall mean the acquisition by a person (other than Ben
Nadorf or George Horowitz) of greater than 50% of the fully diluted
shares (inclusive of options, warrants and other similar rights) of
common stock, par value $.002 per share, of the Corporation, or the
sale by the Corporation of all or substantially all of its assets.
(d) Notice of Redemption. The Corporation shall mail
written notice of any proposed optional redemption of any Series A
Preferred Stock to each record holder thereof not more than 30 nor
less than ten days prior to the date on which such redemption is
intended to be made.
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(e) Replacement Certificates for Unredeemed Shares. If
fewer than the total number of shares of Series A Preferred Stock
represented by any certificate are redeemed, a new certificate
representing the number of unredeemed shares of Series A Preferred
Stock shall be issued to the holder thereof without cost to such
holder within three business days of the applicable Mandatory
Redemption Date.
(f) Determination of the Number of Each Holder's Shares
to be Redeemed. The number of shares of Series A Preferred Stock to
be redeemed from each holder thereof in redemptions hereunder shall
be the aggregate number of the shares of Series A Preferred Stock to
be redeemed times a fraction, the numerator of which shall be the
aggregate number of such shares of Series A Preferred Stock held by
such holder and the denominator of which shall be the aggregate
number of the shares of Series A Preferred Stock outstanding as of
January 1 of the year of such redemption.
(g) Redeemed or Otherwise Acquired Shares. Any shares of
Series A Preferred Stock that are redeemed or otherwise acquired by
the Corporation shall be canceled and retired and shall not be
reissued, sold or transferred. Immediately following such redemption
or acquisition, the rights of the holders of Series A Preferred
Stock in respect of the shares redeemed provided for in this
Certificate of Designation shall cease.
3. Priority Over Dividends and Redemptions.
---------------------------------------
So long as any Series A Preferred Stock remains
outstanding, without the prior written consent of the holders of a
majority of the outstanding shares of Series A Preferred Stock, the
Corporation shall not redeem, purchase or otherwise acquire directly
or indirectly any Junior Securities, nor shall the Corporation
directly or indirectly pay or declare any dividend or make any
distribution upon any Junior Securities other than dividends payable
in shares of Common Stock issued upon the outstanding shares of
Common Stock; provided, however, that the Corporation shall be
allowed to repurchase Junior Securities held by employees (other
than executive officers) upon the employees' termination.
4. Failure to Redeem.
-----------------
If the Corporation fails to make any mandatory
redemption payment within 30 days after a Mandatory Redemption Date,
the Corporation shall deliver an assignment (the "Assignment") of
all licenses and trademarks listed on Schedule 2.10 of the Merger
Agreement (the "Everlast Licenses and Trademarks") to the former
shareholders of Everlast who were parties to the Merger Agreement as
Shareholders (as defined therein). Such Assignment shall become
effective 60 days following its delivery, and the holders of Series
A Preferred Stock shall receive voting rights as provided in Section
6(c) hereof, unless the Corporation pays such outstanding mandatory
redemption payment prior to such date (in which case, the Assignment
shall be canceled and have no legal effect). If the Assignment
becomes effective, the Corporation shall become a licensee of
Everlast subject to the same
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terms and conditions set forth in two Licensee Agreements dated July
1992 and January 1, 1999 between Everlast and the Corporation (the
"Everlast License Agreements"). The terms of the Everlast License
Agreements shall be deemed to have continuously run and been
automatically renewed from the date the Corporation acquired the
Everlast Licenses and Trademarks from Everlast through the date the
Assignment becomes effective.
The Corporation shall not be relieved of its obligation
to redeem the Series A Preferred Stock if the Assignment becomes
effective; provided, however, that the royalties earned in each
fiscal year by the former shareholders of Everlast from the Everlast
License Agreements shall reduce, on a dollar-for-dollar basis, any
mandatory redemption and dividend payments for such fiscal year. The
former shareholders of Everlast shall use their best efforts to
exploit the use and generate the most revenues from the Everlast
Licenses and Trademarks after the Assignment becomes effective. The
Corporation shall not be allowed to pay any accrued and unpaid
dividends or redeem any Junior Securities until it pays all
outstanding mandatory redemption payments.
5. Rights on Liquidation, Merger, Sale, Etc.
-----------------------------------------
In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation (each, a
"Liquidation"), the assets of the Corporation available for
distribution to its stockholders, whether from capital, surplus or
earnings, shall be distributed in the following order of priority:
(a) Each holder of Series A Preferred Stock
shall be entitled to be paid, before any
distribution or payment is made upon any
Junior Securities, an amount in cash equal
to the aggregate Redemption Value of all
shares of Series A Preferred Stock held by
such holder (plus all accrued and unpaid
dividends thereon), and the holders of
Series A Preferred Stock shall not be
entitled to any further payment. Not less
than ten (10) days prior to the payment date
stated therein, the Corporation shall mail
written notice of any such Liquidation to
each record holder of Series A Preferred
Stock, setting forth in reasonable detail
the amount of proceeds to be paid with
respect to each share of Series A Preferred
Stock in connection with such Liquidation.
Neither the consolidation or merger of the
Corporation into or with any other entity or
entities (whether or not the Corporation is
the surviving entity), nor the sale or
transfer by the Corporation of all or any
part of its assets, nor the reduction of the
capital stock of the Corporation nor any
other form of recapitalization or
reorganization affecting the Corporation
shall be deemed to be a Liquidation of the
Corporation within the meaning of this
Section 5.
(b) After distribution of the amounts set forth
in Section 5(a) hereof, the remaining assets
of the Corporation available for
distribution, if any, to the
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stockholders of the Corporation shall be
distributed to the holders of Junior
Securities.
6. Voting and Conversion Rights.
----------------------------
(a) Voting Rights. So long as any share of Series A
Preferred Stock remain outstanding, in addition to the rights
specified in Section 4(b) hereof, except as otherwise required by
law: (i) the holders of shares of Series A Preferred Stock shall be
entitled to vote on and to approve as a separate class (with no
other stockholders voting) all matters that adversely impact the
rights, value, ranking or preferences of the Series A Preferred
Stock; and (ii) the holders of Series A Preferred Stock, voting as a
separate class (with no other stockholders voting), shall be
entitled to elect two directors to the Board.
(b) Approval by Holders of Series A Preferred Stock. The
Corporation shall not, so long as any shares of Series A Preferred
Stock remain outstanding, without the prior written consent of Ben
Nadorf acting on behalf of the holders of Series A Preferred Stock
(but if Ben Nadorf is Unavailable, David Shechet, but if David
Shechet is Unavailable, holders of at least a majority of the
outstanding shares of Series A Preferred Stock):
(i) in any manner authorize, create or issue (A)
any class or series of capital stock
ranking, in any respect, including, without
limitation, as to payment of dividends,
distribution of assets or redemptions,
senior or pari passu to the Series A
Preferred Stock, or which in any manner
adversely affects the rights and preferences
of the holders of Series A Preferred Stock;
or (B) any shares of any class or series of
any bonds, debentures, notes or other
obligations convertible into or exchangeable
for, or having optional rights to purchase,
any series of capital stock ranking, either
as to payment of dividends, distribution of
assets or redemption, senior to the Series A
Preferred Stock or which adversely affects
the rights or preferences of the holders of
Series A Preferred Stock;
(ii) alter or change the designations, powers,
preferences or rights, or the
qualifications, limitations or restrictions
of the Series A Preferred Stock in a manner
adverse to the holders thereof;
(iii) reclassify the shares of Common Stock or any
other shares or any class or series of
capital stock hereafter created junior to
the Series A Preferred Stock into shares of
any class or series of capital stock (A)
ranking, either as to payment of dividends,
distribution of assets or redemptions, prior
to or on parity with the Series A Preferred
Stock, or (B) which adversely affects the
rights of the holders of Series A Preferred
Stock;
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(iv) amend any provision of the Corporation's
Certificate of Incorporation or by-laws in a
manner adverse to the holders of the Series
A Preferred Stock;
(v) issue any additional shares of Series A
Preferred Stock in addition to those shares
when the Series A Preferred Stock were
initially issued;
(vi) incur debt in excess of $100,000, other than
in the ordinary course of business;
provided, however, that the Corporation may
incur such debt in excess of $100,000 in
order to redeem outstanding shares of Series
A Preferred Stock or to pay dividends;
(vii) enter into any new transactions with
officers and directors or stockholders who
beneficially own more than five percent of
the outstanding shares of Common Stock of
the Corporation;
(viii) purchase or acquire, directly or indirectly,
in one or a series of related transactions,
other than in the ordinary course of
business, any capital asset which,
individually, requires the payment of at
least $100,000;
(ix) lease any capital asset requiring payment of
at least $100,000 per annum;
(x) hire an employee with a per annum salary of,
or grant any such employee a bonus or stock
option valued at, $100,000 or more;
(xi) hire any consultants or professionals who
were not previously employed by the
Corporation which is reasonably anticipated
to result in fees of over $100,000; and
(xii) amend the employment agreement effective as
of January 1, 2000, between the Corporation
and George Q Horowitz.
(c) Approval by Directors Nominated by Holders Series A
Preferred Stock. The Board of Directors of the Corporation shall
not, so long as any shares of Series A Preferred Stock remain
outstanding, without the consent of both the director nominees of
the holders of Series A Preferred Stock, increase the salary of
George Q Horowitz on an annual basis, greater than the either (i)
10% or (ii) twice the Cost of Living Allowance (as defined herein),
which ever is less. The Cost of Living Allowance shall be equal to
the percentage by which the Consumers Price Index for Urban Wage
Borrowers and Clerical Workers: New York, N.Y. - Northeastern New
Jersey (1982-84 equals 100), as published by the Bureau of Labor
Statistics of the United States Department of Labor, shall have
increased over the preceding
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year. If publication of the Consumer Price Index is discontinued,
the parties hereto shall accept comparable statistics on the cost of
living for the New York, N.Y. - Northeastern New Jersey area as
computed and published by an agency of the United States or by a
responsible financial periodical of recognized authority then to be
selected by the parties.
(d) Default on Redemption. In the event that the
Corporation defaults on its obligation to pay any mandatory
redemption payment, the holders of Series A Preferred Stock shall be
entitled to vote together with and in the same manner and with the
same effect as all other classes and series of stock of the
Corporation on all actions to be taken by the holders of Common
Stock of the Corporation but only through the date on which the
Corporation pays the holders of Series A Preferred Stock the
mandatory redemption payment that it failed to pay timely. Each
holder of shares of Series A Preferred Stock shall be entitled to
cast such number of votes in respect of such shares of Series A
Preferred Stock as shall equal (rounded to the nearest whole number)
the quotient of (i) the aggregate Redemption Value of the shares of
Series A Preferred Stock held by such holder divided by (ii) the
Fair Market Value of one share of Common Stock of the Corporation.
For purposes of this Section 6(d), "Fair Market Value"
of the Common Stock means (i) if shares of the Common Stock are
listed or admitted for trading on a national securities exchange,
the average of the bid and ask prices at the close of each trading
day of a share of Common Stock on the Nasdaq Small Cap Market, or
the Corporation's then principal trading market, for the 10
consecutive trading days ending on the second business day prior to
the applicable Mandatory Redemption Date or (ii) if no such
quotations are available for such 10-day period, as determined in
good faith by the Board.
(e) Conversion Rights. No holder of shares of Series A
Preferred Stock shall possess the right to convert the shares of
Series A Preferred Stock into any capital stock of the Corporation
(whether now or hereafter authorized) or securities of the
Corporation convertible into or carrying a right to subscribe to or
acquire shares of capital stock of the Corporation.
7. No Pre-emptive Rights.
---------------------
No holder of shares of the Series A Preferred Stock
shall possess any preemptive rights to subscribe for or acquire any
unissued shares of capital stock of the Corporation (whether now or
hereafter authorized) or securities of the Corporation convertible
into or carrying a right to subscribe to or acquire shares of
capital stock of the Corporation.
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8. Transferability; Registration of Transfer.
-----------------------------------------
The shares of Series A Preferred Stock shall be
transferable, subject to the prior written approval of the
Corporation (and compliance with all applicable federal and state
securities laws), which approval shall not be unreasonably withheld.
The stock certificates representing the shares of Series A Preferred
Stock shall be imprinted with legends in substantially the following
forms:
"TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE REQUIRES THE PRIOR WRITTEN CONSENT OF THE
CORPORATION."
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS, AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS, SUPPORTED BY AN
OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE
COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED. ADDITIONALLY, AS PART OF THE TERMS AND
CONDITIONS OF THE ISSUANCE OF THIS CERTIFICATE, THIS
SECURITY CANNOT BE TRANSFERRED WITHIN ONE YEAR OF THE
DATE HEREOF."
The Corporation shall keep at its principal office a
register for the registration of Series A Preferred Stock. Upon the
surrender of any certificate representing Series A Preferred Stock
at such place, the Corporation shall, at the request of the record
holder of such certificate, execute and deliver (at the
Corporation's expense) a new certificate or certificates in exchange
therefor representing in the aggregate the number of shares of
Series A Preferred Stock represented by the surrendered certificate.
Each such new certificate shall be registered in such name and shall
represent such number of shares of Series A Preferred Stock as is
requested by the holder of the surrendered certificate and shall be
substantially identical in form to the surrendered certificate, and
dividends shall accrue on the Series A Preferred Stock represented
by such new certificate from the date such certificate issued and
the surrendered certificate is canceled. All transfer taxes, if any,
payable as a result of such transfer shall be paid by the holder of
the surrendered certificate at the time of delivering the
certificate for transfer or promptly upon receipt of a written
request of the Corporation for payment. No transfer shall be
recorded in the register until all transfer taxes, if any, have been
paid.
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9. Replacement.
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Upon receipt of evidence reasonably satisfactory to the
Corporation (an affidavit of the registered holder shall be
satisfactory) of the ownership and the loss, theft, destruction or
mutilation of any certificate evidencing shares of Series A
Preferred Stock, and in the case of any such loss, theft or
destruction, upon receipt of indemnity reasonably satisfactory to
the Corporation (provided that if the holder is a financial
institution or other institutional investor or investment fund, its
own agreement shall be satisfactory) or, in the case of any such
mutilation upon surrender of such certificate, the Corporation shall
(at its expense) execute and deliver in lieu of such certificate a
new certificate of like kind representing the number of shares of
such class represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or
mutilated certificate, and dividends shall accrue on the Series A
Preferred Stock represented by such new certificate from the date
such certificate is issued and such lost, stolen, destroyed or
mutilated certificate is canceled.
10. Definitions.
-----------
"Common Stock" means the Corporation's common stock,
$.002 par value, and any other capital stock of any class of the
Corporation hereafter authorized which is not limited to a fixed sum
or percentage of par or stated value in respect to the rights of the
holders thereof to participate in dividends or in the distribution
of assets upon any liquidation, dissolution or winding up of the
Corporation.
"Disability" means that due to illness, accident or
other physical or mental incapacity, the Board of the Directors of
the Corporation has in good faith determined that an individual is
unable to render the decision required of him under this Certificate
of Designation.
"Junior Securities" means any capital stock or other
equity securities of the Corporation, except for the Series A
Preferred Stock and any shares of any other class or series of
Preferred Stock authorized pursuant to the Certificate of
Incorporation which rank senior to or on a parity with the Series A
Preferred Stock with respect to the payment of dividends,
redemptions or distributions upon liquidation or otherwise (as the
case may be).
"Mandatory Redemption Date" as to any share of Series A
Preferred Stock means the 31st of December of each year so long as
any shares of Series A Preferred Stock remain outstanding beginning
with December 31, 2001.
"Merger Agreement" refers to that certain Agreement and
Plan of Merger dated August 21, 2000 by and among Everlast World's
Boxing Headquarters Corp., Everlast Holding Co., Active Apparel
Group, Inc., Active Apparel New Corp, and the shareholders listed in
Schedule I thereof.
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"Net After Tax Profits" shall be the net income after
tax of AAGP after this Merger, computed in accordance with generally
accepted accounting principles, for any fiscal year ending December
31, but (i) adding back, in their entirety without regard to any tax
provisions, the following accounts (x) the goodwill amortization as
it relates to this Merger, and (y) the compensation related to the
granting and the exercise of stock options under AAGP's employee
option plans; and (ii) multiplying by a fraction, the numerator of
which is the number of days in the fiscal year when any share of
Series A Preferred Stock is outstanding and the denominator is the
number of days in the whole year; provided, however, that the
denominator for the fiscal year ending December 31, 2000 shall be
equal to the number of days between the date of issuance of the
shares of Series A Preferred Stock and the earlier of the date when
the shares of Series A Preferred Stock are fully redeemed or
December 31, 2000.
"Outstanding Redeemable Percentage" is the aggregate
Redemption Value of the shares of Series A Preferred Stock
outstanding as of January 1st of the fiscal year for which
redemption is being computed divided by $45,000,000.
"Person" means an individual, a partnership, a
corporation, a limited liability company, an association, a joint
stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or
political subdivision thereof.
"Redemption Value" of any share of Series A Preferred
Stock as of any particular date shall be equal to $1,000.00, subject
to adjustment for any stock splits, dividends or recapitalization.
"Unavailable" means the death or Disability of the
individual.
11. Amendment and Waiver.
--------------------
No amendment, modification or waiver shall be binding or
effective with respect to any provision of Sections 1 to 11 without
the prior written consent of the Corporation and the holders of at
least a majority of the shares of Series A Preferred Stock
outstanding at the time such action is taken.
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IN WITNESS WHEREOF, Everlast Worldwide Inc. (f/k/a Active Apparel
Group, Inc.) has caused this Certificate of Designation to be executed this 24th
day of October, 2000.
ACTIVE APPAREL GROUP, INC.
/s/ George Q Horowitz
------------------------------------------
Name: George Q Horowitz
Title: Chairman of the Board,
Chief Executive Officer
& President
Attest: /s/ Angelo Giusti
----------------------------------
Name: Angelo Giusti
Title: Secretary
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