BG STAFFING, INC.
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made and entered into
as of December 10, 2014, by and between BG Staffing, Inc., a Delaware
corporation (the “Company”), and the investors set forth on the signature pages
affixed hereto (each, an “Investor” and, collectively, the “Investors”).
WHEREAS, the Investors wish to purchase from the Company, and the Company wishes
to sell and issue to the Investors, upon the terms and conditions stated in this
Agreement, an aggregate of a minimum of 615,385 and a maximum of 1,000,000
shares (the “Shares”) of the Company’s Common Stock, par value $0.01 per share
(the “Common Stock”) at a purchase price of $9.75 per Share, upon the terms and
conditions set forth in this Agreement; and
WHEREAS, in connection with the Investors’ purchase of the Shares, the Investors
will receive certain registration rights, and will be subject to certain
restrictions on the transfer of the Shares, all as more fully set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual terms, conditions and other
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereto hereby agree as follows:
1.
Definitions.

For purposes of this Agreement, the terms set forth below shall have the
corresponding meanings provided below.
“Affiliate” shall mean, with respect to any specified Person (as defined below),
(i) if such Person is an individual, the spouse, heirs, executors, or legal
representatives of such individual, or any trusts for the benefit of such
individual or such individual’s spouse and/or lineal descendants, or (ii)
otherwise, another Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, the
Person specified. As used in this definition, “control” shall mean the
possession, directly or indirectly, of the power to cause the direction of the
management and policies of a Person, whether through position, the ownership of
voting securities or by contract or other written instrument.
“Agreement” has the meaning set forth in the Preamble.
“Blue Sky Application” has the meaning set forth in Section 5.3(a) hereof.
“Business Day” shall mean any day on which banks located in New York City are
not required or authorized by law to remain closed.
“Closing” and “Closing Date” as defined in Section 2.2(c) hereof.
“Common Stock” has the meaning set forth in the Recitals.
“Company” has the meaning set forth in the Preamble.
“Company Financial Statements” has the meaning set forth in Section 4.5(a)
hereof.

{00036325.DOC;2}    

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“Company’s Knowledge” means the actual knowledge of any executive officer (as
defined in Rule 405 under the Securities Act) or director of the Company.
“Escrow Agreement” means that certain agreement, dated November 20, 2014 by and
among the Company, the Placement Agent and Delaware Trust Company.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“First Closing” and “First Closing Date” has the meaning set forth in Section
2.2(a) hereof.
“Investor” has the meaning set forth in the Preamble.
“Liens” means any mortgage, lien, title claim, assignment, encumbrance, security
interest, adverse claim, contract of sale, restriction on use or transfer or
other defect of title of any kind, other than restrictions on transfer imposed
by federal or state securities laws or by this Agreement.
“Material Adverse Effect” means a material adverse effect on (i) the assets,
liabilities, results of operations, condition (financial or otherwise) or
business of the Company and its Subsidiaries taken as a whole, (ii) the
transactions contemplated hereby or in any of the Transaction Documents or (iii)
the ability of the Company to perform its obligations under the Transaction
Documents (as defined below).
“Person” shall mean an individual, entity, corporation, partnership,
association, limited liability company, limited liability partnership,
joint-stock company, trust or unincorporated organization.
“Piggyback Registration” has the meaning set forth in Section 5.1 hereof.
“Placement Agency Agreement” means that certain agreement, dated December 10,
2014 by and between the Placement Agent and the Company.
“Placement Agent” means Taglich Brothers, Inc.
“Private Placement Memorandum” means the Company’s Private Placement Memorandum
dated , 2014, and any amendments or supplements thereto.
“Per Share Purchase Price” shall mean $9.75.
“Registrable Securities” shall mean the Shares, any shares of Common Stock
issued as a result of a stock split, stock dividend or in connection with a
recapitalization or similar event, or securities issued in replacement of or
exchange for the foregoing; provided, that a security shall cease to be a
Registrable Security when (i) a Registration Statement covering such securities
has been declared effective by the Commission and such securities have been
disposed of pursuant to such effective Registration Statement, (ii) such
securities are sold under circumstances in which all of the applicable
conditions of Rule 144 (or any similar provisions then in force) under the
Securities Act are met, (iii) such securities are otherwise transferred and such
securities may be resold without subsequent registration under the Securities
Act, (iv) such securities shall have ceased to be outstanding, or (v) such
security becomes eligible for sale by the Investor without any restriction
pursuant to Rule 144 (including, without limitation, volume restrictions) and
without the need for current public information required by Rule 144(c)(1) (or
Rule 144(i)(2), if applicable).
“Registration Statement” shall mean any registration statement of the Company
filed under the Securities Act that covers the resale of any of the Registrable
Securities pursuant to the provisions of this

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Agreement, amendments to such Registration Statement, including post-effective
amendments, all exhibits and all material incorporated by reference in such
Registration Statement.
“Regulation D” has the meaning set forth in Section 3.7 hereof.
“Regulation S” has the meaning set forth in Section 6.1(i)(E) hereof.
“Rule 144” as defined in Section 6.1(i)(C) hereof.
“SEC” means the U.S. Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended.
“Selling Expenses” means all underwriting discounts, selling commissions and
stock transfer taxes applicable to the sale of Registrable Securities, and fees
and disbursements of counsel for any holder of Registrable Securities.
“Shares” has the meaning set forth in the Recitals.
“Subsequent Closing” and “Subsequent Closing Date” has the meaning set forth in
Section 2.2(b) hereof.
“Subsidiaries” shall mean any corporation or other entity or organization,
whether incorporated or unincorporated, in which the Company owns, directly or
indirectly, any equity or other ownership interest or otherwise controls through
contract or otherwise.
“Transaction Documents” shall mean this Agreement, the Placement Agency
Agreement and the Escrow Agreement.
“Transfer” shall mean any sale, transfer, assignment, conveyance, charge,
pledge, mortgage, encumbrance, hypothecation, security interest or other
disposition, or to make or effect any of the above.
2.
Sale and Purchase of Shares.

2.1.    Subscription for Shares by Investors. Subject to the terms and
conditions of this Agreement, on the Closing Date (as hereinafter defined) each
of the Investors shall severally, and not jointly, purchase, and the Company
shall sell and issue to each Investor, the number of Shares in the respective
amounts set forth on the signature pages attached hereto in exchange for the Per
Share Purchase Price.
2.2    Closings.
(a)    First Closing. Subject to the terms and conditions set forth in this
Agreement, the Company shall issue and sell to each Investor, and each Investor
shall, severally and not jointly, purchase from the Company on the First Closing
Date, such number of Shares set forth on the signature pages attached hereto,
which will be reflected opposite such Investor’s name on Exhibit A-1 (the “First
Closing”). The date of the First Closing is hereinafter referred to as the
“First Closing Date.”
(b)    Subsequent Closing(s). The Company agrees to issue and sell to each
Investor listed on the Subsequent Closing Schedule of Investors, and each
Investor agrees, severally and not jointly, to purchase from the Company on such
Subsequent Closing Date such number of Shares set forth

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on the signature pages attached hereto, which will be reflected opposite such
Investor’s name on Exhibit A-2 (a “Subsequent Closing”). There may be more than
one Subsequent Closing; provided, however, that the final Subsequent Closing
shall take place within the time periods set forth in the Private Placement
Memorandum. The date of any Subsequent Closing is hereinafter referred to as a
“Subsequent Closing Date.” Notwithstanding the foregoing, the minimum number of
Shares to be sold at the First Closing shall not be less than 615,385 and the
maximum number of Shares to be sold at the First Closing and all Subsequent
Closings shall not exceed 1,000,000 Shares in the aggregate.
(c)    Closing. The First Closing and any applicable Subsequent Closings are
each referred to in this Agreement as a “Closing.” The First Closing Date and
any Subsequent Closing Dates are referred to herein as a “Closing Date.” All
Closings shall occur within the time periods set forth in the Private Placement
Memorandum and be effected remotely via the exchange of documents and
signatures.
2.3.    Closing Deliveries. At each Closing, the Company shall deliver to each
Investor, against delivery by the Investor of the Purchase Price set forth in
its counterpart signature page annexed hereto, duly issued certificates
representing the Shares registered in the name of the Investors. At each
Closing, each Investor shall deliver or cause to be delivered to the Company the
the Purchase Price set forth in its counterpart signature page annexed hereto by
paying United States dollars via bank, certified or personal check which has
cleared prior to the applicable Closing Date or in immediately available funds,
by wire transfer to the escrow account established pursuant to the Escrow
Agreement.
3.
Representations, Warranties and Acknowledgments of the Investors.

Each Investor, severally and not jointly, represents and warrants to the Company
as of the date hereof and as of each Closing applicable to the Investor, that:
3.1    Authorization. The execution, delivery and performance by such Investor
of the this Agreement has been duly authorized and constitutes the valid and
legally binding obligation of such Investor, enforceable against such Investor
in accordance with its respective terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability, relating to or affecting creditors’ rights generally. The
purchase of the Shares will not contravene any law, rule or regulation binding
on the Investor or any investment guideline or restriction applicable to the
Investor.
3.2    Purchase Entirely for Own Account. The Shares to be received by such
Investor hereunder will be acquired solely for such Investor’s own beneficial
account, not as nominee or agent, for investment purposes, and not with a view
to, or for resale in connection with, any distribution of any part thereof.
Nothing contained herein shall be deemed a covenant by such Investor to hold the
Shares for any period of time. Such Investor is not a broker-dealer registered
with the SEC under the Exchange Act or an entity engaged in a business that
would require it to be so registered.
3.3.    Investment Experience. Such Investor acknowledges that the purchase of
the Shares is a highly speculative investment involving a high degree of risk
and that it can bear the economic risk and complete loss of its investment in
the Shares. Such Investor has such knowledge, skill and experience in financial,
business and investment matters such that it is capable of evaluating the merits
and risks of the investment in the Shares. With the assistance of the Investor’s
own professional advisors, to the extent that the Investor has deemed
appropriate, the Investor has made its own legal, tax, accounting and financial
evaluation of the merits and risks of an investment in the Shares and the
consequences of this Agreement.

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The Investor has considered the suitability of the Shares as an investment in
light of its own circumstances and financial condition.
3.4    Non-Reliance. Such Investor represents that it is not relying on (and
will not at any time rely on) any communication (written or oral) of the Company
as investment advice or as a recommendation to purchase the Shares, it being
understood that information and explanations related to the terms and conditions
of the Shares and the Transaction Documents shall not be considered investment
advice or a recommendation to purchase the Shares. Such Investor confirms that
the Company has not (A) given any guarantee or representation as to the
potential success, return, effect or benefit (either legal, regulatory, tax,
financial, accounting or otherwise) of an investment in the Shares, or (B) made
any representation to the Investor regarding the legality of an investment in
the Shares under applicable legal investment or similar laws or regulations. In
deciding to purchase the Shares, such Investor has made its own independent
decision that the investment in the Shares is suitable and appropriate for the
Investor. The Investor acknowledges that neither the Company nor any Person
acting on its behalf has made any representation regarding the proper
characterization of the Shares for purposes of determining the Investor’s
authority to invest in the Shares.
3.5    Disclosure of Information. Such Investor has had an opportunity to
receive all information related to the Company and the Shares requested by it
and to ask questions of and receive answers from the Company regarding the
Company, its business and the terms and conditions of the offering of the
Shares. Such Investor acknowledges that it has received and reviewed the Private
Placement Memorandum. Such Investor has not been furnished any offering
literature other than the foregoing and has relied only on the information
contained therein. Such Investor understands and accepts that the purchase of
the Shares involves various risks, including but not limited to the risks
described in the Private Placement Memorandum. Such Investor understands that no
federal or state agency has passed upon the merits or risks of an investment in
the Shares or made any finding or determination concerning the fairness or
advisability of this investment.
3.6    Restricted Securities. Such Investor understands that the Shares are
“restricted securities” under the U.S. federal securities laws since they are
being acquired from the Company in a transaction not involving a public offering
and that under such laws and applicable regulations such Shares may be resold
only pursuant to an effective registration statement under the Securities Act or
an exemption from registration under the Securities Act. Such Investor
understands that the Company has no intention to register the resale of the
Investor’s Shares and has no obligation to do so (except to the extent provided
in Section 5) and, except as set forth below, that the Company has no obligation
to take action to permit resales of the Shares pursuant to an exemption from
registration under the Securities Act (including Rule 144 thereunder). Such
Investor understands that the undersigned must bear the economic risks of the
investment in the Shares for an indefinite period of time.
3.7    Legends. It is agreed and understood that certificates evidencing the
Shares will bear the following legends (or, if the Shares are not represented by
certificates, with be subject to a similar notation of restriction):
(a)    “THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ”SECURITIES ACT”), OR THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF
OTHER

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JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND
SUCH OTHER APPLICABLE LAWS.”
(b)    Any legend required by applicable state law or the authorities of any
state.
3.8    Accredited Investor. Such Investor is an accredited investor as defined
in Rule 501(a) of Regulation D, as amended, under the Securities Act
(“Regulation D”), and the responses of the Investor set forth in the Investor’s
Confidential Investor Questionnaire delivered to the Placement Agent or the
Company prior to the date of this Agreement are true and complete. The Investor
agrees to furnish any additional information requested by the Company to assure
compliance with applicable U.S. federal and state securities laws in connection
with the sale of the Shares.
3.9    No General Solicitation. Such Investor did not learn of the investment in
the Shares as a result of any public advertising or general solicitation,
including but not limited to: (A) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or broadcast
over television or radio; or (B) any seminar or meeting whose attendees were
invited by any general solicitation or general advertising.
3.10    Brokers and Finders. No Investor will have, as a result of the
transactions contemplated by the Transaction Documents, any valid right,
interest or claim against or upon the Company, any Subsidiary or any other
Investor, for any commission, fee or other compensation pursuant to any
agreement, arrangement or understanding entered into by or on behalf of such
Investor.
4.
Representations and Warranties of the Company.

The Company represents, warrants and covenants to the Investors that:
4.1.    Organization; Execution, Delivery and Performance.
(a)    The Company and each of its Subsidiaries, if any, is a corporation or
other entity duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it is incorporated or organized, with full
power and authority (corporate and other) to own, lease, use and operate its
properties and to carry on its business as and where now owned, leased, used,
operated and conducted. The Company is duly qualified as a foreign corporation
to do business and is in good standing in every jurisdiction in which its
ownership or use of property or the nature of the business conducted by it makes
such qualification necessary, except where the failure to be so qualified or in
good standing would not have a Material Adverse Effect.
(b)    (i) The Company has all requisite corporate power and authority to enter
into and perform the Transaction Documents and to consummate the transactions
contemplated hereby and thereby and to issue the Shares, in accordance with the
terms hereof and thereof, (ii) the execution and delivery of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including without limitation, the issuance of
the Shares) have been duly authorized by the Company’s Board of Directors and no
further consent or authorization of the Company, its Board of Directors, or its
stockholders, is required, (iii) each of the Transaction Documents has been duly
executed and delivered by the Company by its authorized representative, and such
authorized representative is a true and official representative with authority
to sign each such document and the other documents or certificates executed in
connection herewith

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and bind the Company accordingly, and (iv) each of the Transaction Documents
constitutes, and upon execution and delivery thereof by the Company will
constitute, a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except to the extent limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other laws
of general application affecting enforcement of creditors’ rights and general
principles of equity that restrict the availability of equitable or legal
remedies.
4.2.    Shares Duly Authorized. The Shares to be issued to each Investor
pursuant to this Agreement, when issued and delivered in accordance with the
terms of this Agreement, will be duly and validly issued and will be fully paid
and nonassessable and free from all taxes or Liens with respect to the issue
thereof and, except for those rights set forth in that certain Amended and
Restated Securities Purchase Agreement, dated as of May 28, 2013, as amended
(the “A&R SPA”), shall not be subject to preemptive rights or other similar
rights of stockholders of the Company. Subject to the accuracy of the
representations and warranties of the Investors to this Agreement, the offer and
issuance by the Company of the Shares is exempt from registration under the
Securities Act.
4.3    No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby will not: (i) conflict with or result in a
violation of any provision of the Company’s Certificate of Incorporation or
Bylaws or (ii) violate or conflict with, or result in a breach of any provision
of, or constitute a default (or an event which with notice or lapse of time or
both could become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture, patent,
patent license or instrument to which the Company or any of its Subsidiaries is
a party, except for possible violations, conflicts or defaults as would not,
individually or in the aggregate, have a Material Adverse Effect, or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations and regulations of
any self-regulatory organizations to which the Company or its securities are
subject) applicable to the Company or any of its Subsidiaries or by which any
property or asset of the Company or any of its Subsidiaries is bound or
affected. Neither the Company nor any of its Subsidiaries is in violation of its
Certificate of Incorporation, Bylaws or other organizational documents. Neither
the Company nor any of its Subsidiaries is in default (and no event has occurred
which with notice or lapse of time or both could put the Company or any of its
Subsidiaries in default) under, and neither the Company nor any of its
Subsidiaries has taken any action or failed to take any action that would give
to others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Company or any of its
Subsidiaries is a party or by which any property or assets of the Company or any
of its Subsidiaries is bound or affected, or for possible defaults as would not,
individually or in the aggregate, have a Material Adverse Effect. The businesses
of the Company and its Subsidiaries are not being conducted in violation of any
law, rule ordinance or regulation of any governmental entity, except for
possible violations which would not, individually or in the aggregate, have a
Material Adverse Effect. Except as required under the Securities Act, the
Exchange Act, the rules and regulations of the NYSE MKT and any applicable state
securities laws, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court,
governmental agency, regulatory agency, self regulatory organization or stock
market or any third party in order for it to execute, deliver or perform any of
its obligations under this Agreement or to issue and sell the Shares in
accordance with the terms hereof.
4.4.    Capitalization. As of November 19, 2014, the authorized capital stock of
the Company consists of (i) 19,500,000 shares of Common Stock, of which
5,610,540 shares are issued and outstanding, 591,363 shares are reserved for
issuance pursuant to stock options granted under the Company’s long-term
incentive plan, 248,406 shares are reserved for issuance pursuant to warrants to
purchase Common Stock, and 308,637 shares are reserved for issuance pursuant to
the Company’s long-term incentive plan, and (ii) 500,000 shares of preferred
stock, par value $0.01 per share, of which no shares are issued and outstanding.

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Except for securities as in regards to which the Company has reserved Common
Stock as described in the preceding sentence, all of which securities have been
described in the Company’s SEC filings or in the Private Placement Memorandum,
and except as described in the A&R SPA, (i) there are no outstanding options,
warrants, scrip, rights to subscribe for or purchase, puts, calls, rights of
first refusal, agreements, understandings, claims or other commitments or rights
of any character whatsoever relating to, or securities or rights convertible
into or exchangeable for any shares of capital stock of the Company or any of
its Subsidiaries, or arrangements by which the Company or any of its
Subsidiaries is or may become bound to issue additional shares of capital stock
of the Company or any of its Subsidiaries, (ii) except for certain “piggyback”
registration rights set forth in certain warrants to purchase an aggregate of
25,000 shares of Common Stock dated as of August 1, 2014, there are no
agreements or arrangements under which the Company or any of its Subsidiaries is
obligated to register the sale of any of its securities under the Securities Act
(except for registration rights granted in connection with the transaction
contemplated hereby) and (iii) there are no anti-dilution or price adjustment
provisions contained in any security issued by the Company (or in any agreement
providing rights to security holders) that will be triggered by the issuance of
Shares. All of the outstanding shares of capital stock of the Company are duly
authorized, validly issued, fully paid and nonassessable. Except for those
rights set forth in the A&R SPA, no shares of capital stock of the Company are
subject to preemptive rights or any other similar rights of the stockholders of
the Company.
4.5.    SEC Information.
(a)    The Company has timely filed all reports, schedules, forms, statements
and other documents required to be filed by it with the SEC pursuant to the
reporting requirements of the Exchange Act (all of the foregoing and all other
documents filed with the SEC prior to the date hereof and all exhibits included
therein and financial statements and schedules thereto and documents
incorporated by reference therein, being hereinafter referred to herein as the
“SEC Documents”). The SEC Documents have been made available to the Investors
via the SEC’s EDGAR system. As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the Exchange Act or
the Securities Act, as appropriate, and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. As of their
respective dates, the financial statements of the Company included in the SEC
Documents (“Company Financial Statements”) complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. The Company Financial Statements
have been prepared in accordance with United States generally accepted
accounting principles, consistently applied, during the periods involved (except
(i) as may be otherwise indicated in such financial statements or the notes
thereto, or (ii) in the case of unaudited interim statements, to the extent they
may not include footnotes or may be condensed or summary statements) and fairly
present in all material respects the consolidated financial position of the
Company and its consolidated Subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments). Except as set forth in the Company Financial Statements, the
Company has no liabilities, contingent or otherwise, other than: (i) liabilities
incurred in the ordinary course of business subsequent to September 28, 2014
(the fiscal period end of the Company’s most recently-filed periodic report),
and (ii) obligations under contracts and commitments incurred in the ordinary
course of business and not required under generally accepted accounting
principles to be reflected in such financial statements, which, individually or
in the aggregate, are not material to the financial condition or operating
results of the Company.

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(b)    The shares of Common Stock are currently listed on the NYSE MKT. The
Company has not  received notice (written or oral) from the NYSE MKT to the
effect that the Company is not in compliance with the continued listing and
maintenance requirements of such exchange. The Company is compliance with all
such listing and maintenance requirements.
4.6    Permits; Compliance. The Company and each of its Subsidiaries is in
possession of all material franchises, grants, authorizations, licenses,
permits, easements, variances, exemptions, consents, certificates, approvals and
orders necessary to own, lease and operate its properties and to carry on its
business as it is now being conducted (collectively, the “Company Permits”), and
there is no action pending or, to the Company’s Knowledge, threatened regarding
suspension or cancellation of any of the Company Permits. Neither the Company
nor any of its Subsidiaries is in conflict with, or in default or violation of,
any of the Company Permits, except for any such conflicts, defaults or
violations which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. Since December 28, 2013, neither the
Company nor any of its Subsidiaries has received any notification with respect
to possible conflicts, defaults or violations of applicable laws, except for
notices relating to possible conflicts, defaults or violations, which conflicts,
defaults or violations would not have a Material Adverse Effect.
4.7    Litigation. Except as set forth in the Company’s SEC filings, there is no
action, suit, claim, proceeding, inquiry or investigation before or by any
court, public board, government agency, self-regulatory organization or body
pending or, to the Company’s Knowledge, threatened against or affecting the
Company or any of its Subsidiaries, or their respective businesses, properties
or assets or their officers or directors in their capacity as such, that would
have a Material Adverse Effect. To the Company’s Knowledge, there are no facts
or circumstances which are likely to give rise to any of the foregoing. There
has not been, and to the Company’s Knowledge, there is not pending or
contemplated, any investigation by the SEC involving the Company, any of its
Subsidiaries or any current or former director or executive officer of the
Company or any of its Subsidiaries.
4.8    No Material Changes.
(a)    Since December 28, 2013, except disclosed in the Company’s SEC filings,
there has not been:
(i)    Any material adverse change in the financial condition, operations or
business of the Company from that shown on the Company Financial Statements, or
any material transaction or commitment effected or entered into by the Company
outside of the ordinary course of business;
(ii)    Any effect, change or circumstance which has had, or could reasonably be
expected to have, a Material Adverse Effect; or
(iii)    Any incurrence of any material liability outside of the ordinary course
of business.
4.9    No General Solicitation. Neither the Company nor any person acting on the
Company’s behalf has conducted any “general solicitation,” as such term is
defined in Regulation D promulgated under the Securities Act, with respect to
any of the Shares being offered hereby.
4.10    No Integrated Offering. Neither the Company or its Subsidiaries nor any
of their affiliates or any person acting on their behalf, has directly or
indirectly made any offers or sales in any security or solicited any offers to
buy any security under circumstances that would require registration under the

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Securities Act of the issuance of the Shares to the Investors. The issuance of
the Shares to the Investors will not be integrated with any other issuance of
the Company’s securities (past, current or future) for purposes of any
stockholder approval provisions applicable to the Company or its securities.
4.11    No Brokers. Except as set forth in Section 9.1, the Company has taken no
action which would give rise to any claim by any person for brokerage
commissions, transaction fees or similar payments relating to this Agreement or
the transactions contemplated hereby.
4.12    Internal Controls. The Company is in material compliance with the
provisions of the Sarbanes-Oxley Act of 2002 currently applicable to the
Company. The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles. The Company has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and designed
such disclosure controls and procedures to ensure that material information
relating to the Company, including the Subsidiaries, is made known to the
certifying officers by others within those entities, particularly during the
period in which the Company’s most recently filed period report under the
Exchange Act, as the case may be, is being prepared. The Company's certifying
officers have evaluated the effectiveness of the Company’s disclosure controls
and procedures as of the end of the period covered by the most recently filed
periodic report under the Exchange Act (such date, the “Evaluation Date”). The
Company presented in its most recently filed periodic report under the Exchange
Act the conclusions of the certifying officers about the effectiveness of the
disclosure controls and procedures based on their evaluations as of the
Evaluation Date. Since the Evaluation Date, there have been no significant
changes in the Company’s internal controls (as such term is defined in Item 308
of Regulation S-K) or, to the Company’s Knowledge, in other factors that could
significantly affect the Company’s internal controls. The Company maintains and
will continue to maintain a standard system of accounting established and
administered in accordance with GAAP and the applicable requirements of the
Exchange Act.
4.13    Form D; Blue Sky Laws. The Company agrees to file a Form D with respect
to the Shares as required under Regulation D and to provide a copy thereof to
the Placement Agent promptly after such filing. The Company shall, on or before
the Closing Date, take such action as the Company shall reasonably determine is
necessary to qualify the Shares for sale to the Investors at the applicable
Closing pursuant to this Agreement under applicable securities or “blue sky”
laws of the states of the United States (or to obtain an exemption from such
qualification), and shall provide evidence of any such action so taken to the
Placement Agent on or prior to the Closing Date.
4.14    Disclosure. The Company confirms that neither it nor, to the Company’s
Knowledge, any other Person acting on its behalf has provided any of the
Investors or their agents or counsel with any information that constitutes or
could reasonably be expected to constitute material, non-public information
concerning the Company or any of its Subsidiaries, other than the existence of
the transactions contemplated by this Agreement and the other Transaction
Documents. The Company understands and confirms that each of the Investors will
rely on the foregoing representations in effecting transactions in securities of
the Company. All disclosure provided to the Investors regarding the Company and
its Subsidiaries, their businesses and the transactions contemplated hereby,
including the schedules to this Agreement, furnished by or on behalf of the
Company or any of its Subsidiaries is true and correct in all material respects
and does not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. Each
press release issued by the Company or any of its Subsidiaries during the twelve
(12) months preceding the date of this Agreement did not at the time of release
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the

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statements therein, in the light of the circumstances under which they are made,
not misleading. No event or circumstance has occurred or information exists with
respect to the Company or any of its Subsidiaries or its or their business,
properties, liabilities, results of operations or financial conditions, which,
under applicable law, rule or regulation, requires public disclosure at or
before the date hereof or announcement by the Company but which has not been so
publicly disclosed.
4.15    Intellectual Property Rights. The Company and its Subsidiaries own or
possess adequate rights or licenses to use all trademarks, trade names, service
marks, service mark registrations, service names, patents, patent rights,
copyrights, original works, inventions, licenses, approvals, governmental
authorizations, trade secrets and other intellectual property rights and all
applications and registrations therefor (“Intellectual Property Rights”)
necessary to conduct their respective businesses as now conducted and as
presently proposed to be conducted. None of the Company’s or its Subsidiaries’
Intellectual Property Rights have expired, terminated or been abandoned, or are
expected to expire, terminate or be abandoned, within two (2) years from the
date of this Agreement, except for any such expiration, termination or
abandonment that would not have a Material Adverse Effect. To the Company’s
Knowledge, no material infringement by the Company or any of its Subsidiaries of
Intellectual Property Rights of others has occurred. Except as set forth in the
Company’s SEC filings, there is no material claim, action or proceeding being
made or brought, or to the Company’s Knowledge, being threatened, against the
Company or any of its Subsidiaries regarding their Intellectual Property Rights.
To the Company’s Knowledge, there are no facts or circumstances which might give
rise to any of the foregoing material infringements or claims, actions or
proceedings. The Company and each of its Subsidiaries have taken reasonable
security measures to protect the secrecy, confidentiality and value of all of
their Intellectual Property Rights, except where failure to take such measures
would not, either individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect.
4.16    Tax Status. Except for occurrences that would not, either individually
or in the aggregate, reasonably be expected to result in a Material Adverse
Effect, the Company and each of its Subsidiaries (i) has timely made or filed
all foreign, federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject, (ii) has
timely paid all taxes and other governmental assessments and charges that are
material in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and (iii) has set aside
on its books provision reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be past due
by the taxing authority of any jurisdiction, and to the Company’s Knowledge
there is no basis for any such claim. The Company is not operated in such a
manner as to qualify as a passive foreign investment company, as defined in
Section 1297 of the U.S. Internal Revenue Code of 1986, as amended.
4.17    Acknowledgement Regarding Investors’ Trading Activity. It is understood
and acknowledged by the Company that: (i) following the public disclosure of the
transactions contemplated by the Transaction Documents in accordance with the
terms thereof, none of the Investors have been asked by the Company or any of
its Subsidiaries to agree, nor has any Investor agreed with the Company or any
of its Subsidiaries, to desist from effecting any transactions in or with
respect to (including, without limitation, purchasing or selling, long and/or
short) any securities of the Company, or “derivative” securities based on
securities issued by the Company or to hold any of the Shares for any specified
term; (ii) any Investor, and counterparties in “derivative” transactions to
which any such Investor is a party, directly or indirectly, presently may have a
“short” position in the Common Stock which was established prior to such
Investor’s knowledge of the transactions contemplated by the Transaction
Documents; and (iii) each Investor shall not be deemed to have any affiliation
with or control over any arm’s length counterparty in any “derivative”
transaction. The Company further understands and acknowledges that following the
public disclosure of the transactions contemplated by the Transaction Documents,
one or more Investors may engage in hedging

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and/or trading activities at various times during the period that the Shares are
outstanding, and such hedging and/or trading activities, if any, can reduce the
value of the existing stockholders’ equity interest in the Company both at and
after the time the hedging and/or trading activities are being conducted. The
Company acknowledges that such aforementioned hedging and/or trading activities
do not constitute a breach of this Agreement or any other Transaction Document
or any of the documents executed in connection herewith or therewith.
4.18    Manipulation of Price. Neither the Company nor any of its Subsidiaries
has, and, to the Company’s Knowledge, no Person acting on their behalf has,
directly or indirectly, (i) taken any action designed to cause or to result in
the stabilization or manipulation of the price of any security of the Company or
any of its Subsidiaries to facilitate the sale or resale of any of the Shares,
(ii) sold, bid for, purchased, or paid any compensation for soliciting purchases
of, any of the Shares (other than the Placement Agent), or (iii) paid or agreed
to pay to any Person any compensation for soliciting another to purchase any
other securities of the Company or any of its Subsidiaries (other than the
Placement Agent).
4.19    Shell Company Status. The Company is not, and has never been, an issuer
identified in, or subject to, Rule 144(i) of the Securities Act.
5.    Registration Rights.
5.1.    Mandatory. Not later than sixty (60) days after the First Closing Date
(the “Filing Deadline”), the Company shall prepare and file a registration
statement on Form S-3 (or such other suitable form as may then be prescribed by
the SEC or be available to the Company for the registration of securities if
Form S-3 is not then available to the Company) under the Securities Act, and the
rules and regulations of the SEC thereunder, to effect the registration under
the Securities Act of the Registrable Securities to permit the public
disposition of such Registrable Securities in accordance with the intended
method or methods of disposition specified in writing by the Investors and their
permitted assigns or transferees (collectively, the “Holders”) which shall, in
all events, include sales effected through the NYSE MKT; provided, however, such
intended method of disposition shall not include an underwritten offering of the
Registrable Securities (the “Registration Statement”).
 
5.2 Registration Procedures. In connection with the registration of the
Registrable Securities under the Securities Act as provided in Section 5.1, the
Company shall:
 
(a) prepare and file with the SEC by the Filing Deadline the Registration
Statement (including such audited financial statements as may be required by the
Securities Act or the rules and regulations promulgated thereunder) and
thereafter use its commercially reasonable efforts to cause such registration
statement to be declared effective by the SEC as soon as practicable;
 
(b) prepare and file with the SEC such amendments and supplements to the
Registration Statement and the prospectus used in connection therewith as may be
necessary to keep the Registration Statement effective and to comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement, until the earlier
to occur of (i) one (1) year after the date upon which the Registration
Statement was declared effective by the SEC and (ii) the date that all
Registrable Securities covered by such Registration Statement have been sold or
cease to be Registrable Securities (the “Effectiveness Period”), subject to the
right of the Company to suspend the effectiveness thereof for not more than for
a period of thirty (30) calendar days (in the aggregate) during any twelve (12)
month period because the Company is negotiating a merger, consolidation,
acquisition or sale of all or substantially all of its assets or a similar
transaction which, in the reasonable judgment of the Company’s board of
directors, requires

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the Registration Statement to be amended to include information in connection
with such pending transaction (including the parties thereto) and such
information is not yet available or capable of being publicly disclosed;
 

 
(c) use its commercially reasonable efforts to register or qualify all
Registrable Securities and other securities covered by the Registration
Statement under such other securities laws or blue sky laws as the Holders shall
reasonably request in writing, to keep such registrations or qualifications in
effect for so long as the Registration Statement remains in effect, and take any
other action which may be reasonably necessary to enable the Holders to
consummate the disposition of the Registrable Securities in such jurisdictions,
except that the Company shall not for any such purpose be required to qualify
generally to do business as a foreign corporation in any jurisdiction wherein it
would not but for the requirements of this subdivision (d) be obligated to be so
qualified, to consent to general service of process in any such jurisdiction or
register as a broker-dealer;
 
(d) use its commercially reasonable efforts to cause all Registrable Securities
covered by the Registration Statement to be registered with or approved by such
other federal or state governmental agencies or authorities as may be necessary
to enable the Holders to consummate the disposition of such Registrable
Securities;
 
(e) notify the Holders promptly and confirm such advice in writing promptly
after the Company has knowledge thereof:
 
(A) when the Registration Statement, an amendment thereto, the prospectus or any
prospectus supplement related thereto or post-effective amendment to the
Registration Statement has been filed, and, with respect to the Registration
Statement or any post-effective amendment thereto, when the same has become
effective;
  
(B) of the issuance by the SEC of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings by any Person
for that purpose; and
 
(C) of the receipt by the Company of any notification with respect to the
suspension of the qualification of any Registrable Securities for sale under the
securities or blue sky laws of any jurisdiction or the initiation or threat of
any proceeding for such purpose;
 
(f) notify the Holders, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon discovery that, or upon
the happening of any event as a result of which, the prospectus included in the
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing, and at the request of the Holders promptly prepare
and furnish to the Holders a reasonable number of copies of a supplement to or
an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing;
 

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(g) use its commercially reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of the Registration Statement at the earliest
possible moment;
 
(h) use its commercially reasonable efforts to list all Registrable Securities
covered by the Registration Statement on any national securities exchange (if
any) on which any of the Registrable Securities are then listed; and

(i)    use its reasonable best efforts to continue to cause its Common Stock to
be listed on the NYSE MKT.

 The Company may require each Holder to furnish the Company with such
information regarding the Holder and the distribution of the Registrable
Securities as the Company may from time to time reasonably request in writing.
 
Investor agrees that, upon receipt of any notice from the Company of the
occurrence of any event of the kind described in subdivision (f) of this Section
5.2, Subscriber will forthwith discontinue his disposition of Registrable
Securities pursuant to the Registration Statement until receipt of the copies of
the supplemented or amended prospectus contemplated by subdivision (f) of this
Section 5.2 and, if so directed by the Company, will deliver to the Company all
copies, other than permanent file copies, then in Subscriber’s possession of the
prospectus relating to such Registrable Securities current at the time of
receipt of such notice.
 
5.3 Participation in Registrations. Whenever the Company proposes to register
any of its securities under the Securities Act, whether for its own account or
for the account of another stockholder (except for the registration of
securities (A) to be offered pursuant to an employee benefit plan on Form S-8,
(B) pursuant to a registration made on Form S-4, or any successor forms then in
effect, or (C) pursuant to any form that does not permit the registration of the
sale of the Registrable Securities) at any time and the registration form to be
used may be used for the registration of the Registrable Securities (a
“Piggyback Registration”), it will so notify in writing all holders of
Registrable Securities no later twenty (20) days prior the filing of the
registration statement. Subject to the provisions of this Agreement, the Company
will include in the Piggyback Registration all Registrable Securities with
respect to which the Company has received written requests for inclusion no
later than two (2) days prior to the filing of the registration statement. The
Company may postpone or withdraw the filing or the effectiveness of a Piggyback
Registration at any time in its sole discretion. No notice need be given to the
Holders pursuant to this Section 5.3 if the Holder’s Registrable Securities are
included on a registration statement that has been filed with the SEC and not
withdrawn and for which effectiveness has not been postponed, and no notice need
be given pursuant to this Section 5.3 with respect to the registration statement
required to be filed pursuant to Section 5.1.
5.4.    Expenses. All fees and expenses incident to the Company’s performance of
or compliance with this Section 5 shall be borne by the Company, whether or not
any Registrable Securities are sold pursuant to the Registration Statement. The
fees and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the
trading market on which the Common Stock is then listed for trading, (B) in
compliance with applicable state securities or Blue Sky laws, and (C) on behalf
of the Placement Agent if it determined that the Placement Agent must file with
FINRA), (ii) out-of-pocket processing fees for the Placement Agent not to exceed
$20,000 without the Company’s approval, for messenger, telephone and delivery
expenses in coordinating with the Investors (provided that any such fees shall
be substantiated by appropriate documentation), (iii) fees and disbursements of
counsel and independent public accountants for the Company, and (iv) fees and
disbursements of one counsel to the Placement Agent

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and Investors not to exceed $30,000 in the aggregate; provided, however, that
the Company shall not be responsible for any Selling Expenses with respect to
the Registrable Securities.
5.5.    Indemnification.
(a)    Indemnification by the Company. The Company will indemnify and hold
harmless each Investor and its officers, directors, members, shareholders,
partners, representatives, employees and agents, successors and assigns, and
each other person, if any, who controls such Investor within the meaning of the
Securities Act, against any losses, obligations, claims, damages, liabilities,
contingencies, judgments, fines, penalties, charges, costs (including, without
limitation, court costs, reasonable attorneys’ fees and costs of defense and
investigation), amounts paid in settlement or expenses, joint or several,
(collectively, “Claims”) incurred in investigating, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or other
regulatory agency, body or the SEC, whether pending or threatened, whether or
not an indemnified party is or may be a party thereto, to which any of them may
become subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement of any material fact contained
in any Registration Statement, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof; (ii) any blue sky
application or other document executed by the Company specifically for that
purpose or based upon written information furnished by the Company filed in any
state or other jurisdiction in order to qualify any or all of the Registrable
Securities under the securities laws thereof (any such application, document or
information herein called a “Blue Sky Application”); (iii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; (iv) any violation
by the Company or its agents of any rule or regulation promulgated under the
Securities Act applicable to the Company or its agents and relating to action or
inaction required of the Company in connection with such registration; or (v)
any failure to register or qualify the Registrable Securities included in any
such Registration Statement in any state where the Company or its agents has
affirmatively undertaken or agreed in writing that the Company will undertake
such registration or qualification on an Investor’s behalf and will reimburse
such Investor, and each such officer, director or member and each such
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such Claim or action;
provided, however, that the Company will not be liable in any such case if and
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by such
Investor or any such controlling person specifically for use in such
Registration Statement or Prospectus.
(b)    Indemnification by the Investors. Each Investor agrees, severally but not
jointly, to indemnify and hold harmless, to the fullest extent permitted by law,
the Company, its directors, officers, employees, stockholders, partner,
representatives and each person who controls the Company (within the meaning of
the Securities Act) against any Claims resulting from any untrue statement of a
material fact or any omission of a material fact required to be stated in the
Registration Statement or Prospectus or preliminary prospectus or amendment or
supplement thereto or necessary to make the statements therein not misleading,
to the extent, but only to the extent that such untrue statement or omission is
contained in any information furnished by such Investor to the Company
specifically for inclusion in such Registration Statement or Prospectus or
amendment or supplement thereto. In no event shall the liability of an Investor
be greater in amount than the dollar amount of the proceeds (net of all expense
paid by such Investor in connection with any claim relating to this Section 5.3
and the amount of any damages such Investor has otherwise been required to pay
by

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reason of such untrue statement or omission) received by such Investor upon the
sale of the Registrable Securities included in the Registration Statement giving
rise to such indemnification obligation.
(c)    Conduct of Indemnification Proceedings. Any person entitled to
indemnification hereunder shall (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided that any person entitled to
indemnification hereunder shall have the right to employ separate counsel and to
participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such person unless (a) the indemnifying party
has agreed to pay such fees or expenses, or (b) the indemnifying party shall
have failed to assume the defense of such claim or employ counsel reasonably
satisfactory to such person or (c) in the reasonable judgment of any such
person, based upon written advice of its counsel, a conflict of interest exists
between such person and the indemnifying party with respect to such claims (in
which case, if the person notifies the indemnifying party in writing that such
person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such person); and provided, further, that the failure of
any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations hereunder, except to the extent that such
failure to give notice shall materially adversely affect the indemnifying party
in the defense of any such claim or litigation. It is understood that the
indemnifying party shall not, in connection with any proceeding in the same
jurisdiction, be liable for fees or expenses of more than one separate firm of
attorneys at any time for all such indemnified parties. No indemnifying party
will, except with the consent of the indemnified party, which consent shall not
be unreasonably withheld or delayed, consent to entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect of such claim or litigation.
(d)    Contribution. If for any reason the indemnification provided for in the
preceding paragraphs (a) and (b) is unavailable to an indemnified party or
insufficient to hold it harmless, other than as expressly specified therein,
then the indemnifying party shall contribute to the amount paid or payable by
the indemnified party as a result of such Claim in such proportion as is
appropriate to reflect the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable considerations. No
person guilty of fraudulent misrepresentation within the meaning of Section
11(f) of the Securities Act shall be entitled to contribution from any person
not guilty of such fraudulent misrepresentation. In no event shall the
contribution obligation of a holder of Registrable Securities be greater in
amount than the dollar amount of the proceeds (net of all expenses paid by such
holder in connection with any claim relating to this Section 5.3 and the amount
of any damages such holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission) received by
it upon the sale of the Registrable Securities giving rise to such contribution
obligation.
5.6.    Cooperation by Investor. Each Investor shall furnish to the Company such
information regarding the Investor and the distribution proposed by it as the
Company may reasonably request in connection with any registration or offering
referred to in this Section 5. Each Investor shall cooperate as reasonably
requested by the Company in connection with the preparation of the registration
statement with respect to such registration, and for so long as the Company is
obligated to file and keep effective such registration statement, shall provide
to the Company, in writing, for use in the registration statement, all such
information regarding the Investor and its plan of distribution of the Shares
included in such registration as may be reasonably necessary to enable the
Company to prepare such registration statement, to maintain the

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currency and effectiveness thereof and otherwise to comply with all applicable
requirements of law in connection therewith.
5. 7. Amendments and Waivers. This Section 5 may be amended and the Company may
take any action herein prohibited, or omit to perform any act herein required to
be performed by it, only if the Company shall have obtained the written consent
to such amendment, action or omission to act, of the holder or holders of not
less than 51% of the Registrable Securities. Each holder of any Registrable
Securities at the time or thereafter outstanding shall be bound by any consent
authorized by this Section 7.6, whether or not such Registrable Securities shall
have been marked to indicate such consent.

6.    Transfer Restrictions.
6.1.    Transfer or Resale.
(a) Rule 144. The Company shall use commercially reasonable efforts to (i)
timely file the reports required to be filed by it under the Exchange Act and
the rules and regulations adopted by the SEC thereunder and (ii) make and keep
public information available, as those terms are understood and defined in Rule
144 under the Securities Act The Company will deliver to the Holder, upon
request, a written statement as to whether it has complied with the requirements
of this Section.
(b) Transfer Agent Instructions. At such time as the sale of Shares by an
Investor is then permissible under Rule 144, within three business days of a
request therefor, the Company, at its cost, shall cause its counsel to provide
the appropriate opinion letters to be issued confirming compliance with the
provisions of Rule 144 with respect to the transfer or sale of the Shares held
by such Investor; provided, however, that the Company shall not be required to
cause an opinion to be issued at its expense regarding compliance with Rule 144
if at such time the Holder is able to sell its Shares pursuant to a registration
statement filed pursuant to Section 5 of this Agreement. The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Investors, by vitiating the intent and purpose of the
transactions contemplated hereby. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Section 6.2 may be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Section, that the Investors shall be entitled,
in addition to all other available remedies, to an injunction restraining any
breach and requiring immediate transfer, without the necessity of showing
economic loss and without any bond or other security being required.
7.    Conditions to Closing of the Investors.
The obligation of each Investor hereunder to purchase the Shares at the Closing
is subject to the satisfaction, at or before the applicable Closing Date, of
each of the following conditions, provided that these conditions are for each
Investor’s sole benefit and may be waived by such Investor at any time in its
sole discretion by providing the Company with prior written notice thereof:

7.1    Representations, Warranties and Covenants. The representations and
warranties of the Company shall be true and correct in all material respects as
of the date when made and as of the Closing Date as though originally made at
that time (except for representations and warranties that speak as of a specific
date, which shall be true and correct in all material respects as of such date)
and the Company shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required to be performed,
satisfied or complied with by the Company at or prior to the Closing Date.

7.2    Delivery by Company. The Company shall have duly executed and delivered
an instruction letter to the Company’s transfer agent regarding the issuance of
the Shares in the number as is set forth on

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the signature page hereby being purchased by such Investor at the Closing
pursuant to this Agreement and shall have delivered to each Investor duly issued
certificates representing the Shares registered in the name of the Investor.

7.3    Listing of Shares. The Company shall have obtained approval of the NYSE
MKT to list the Shares.

7.4    No Material Adverse Effect. Since the date of this Agreement, no event or
series of events shall have occurred that reasonably would have or result in a
Material Adverse Effect.

7.5    No Prohibition. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction that prohibits
the consummation of any of the transactions contemplated by the Transaction
Documents.

8.    Conditions to Closing of the Company.
The obligations of the Company to effect the transactions contemplated by this
Agreement with each Investor are subject to the fulfillment at or prior to each
Closing Date of the conditions listed below.
8.1.    Representations and Warranties. The representations and warranties made
by such Investor in Section 3 shall be true and correct in all respects at the
time of Closing as if made on and as of such date.
8.2.    Corporate Proceedings. All corporate and other proceedings required to
be undertaken by such Investor in connection with the transactions contemplated
hereby shall have occurred and all documents and instruments incident to such
proceedings shall be reasonably satisfactory in substance and form to the
Company.
8.3    Purchase Price. The Escrow Agent shall have received the Investor’s
portion of the Purchase Price.
9.    Miscellaneous.
9.1.    Compensation of Placement Agent. The Investor acknowledges that it is
aware that the Placement Agent will receive from the Company, in consideration
for its services as financial advisor and placement agent in respect of the
transactions contemplated hereby: (i) a cash fee equal to eight percent (8.0%)
of the gross proceeds through the sale of the Shares; and (ii) warrants to
purchase an amount of shares of Common Stock equal to ten percent (10%) of the
number of Shares sold in the Offering at an exercise price of $9.75 per share
with a five-year term and exercisable six months after the issuance of the
warrants; and (iii) reimbursement for all reasonable and actual out of pocket
expenses such as travel, printing and legal counsel, up to $30,000, incurred
directly in regard to the offering of the Shares.
9.2.    Notices. All notices, requests, demands and other communications
provided in connection with this Agreement shall be in writing and shall be
deemed to have been duly given at the time when hand delivered, delivered by
express courier, or sent by facsimile (with receipt confirmed by the sender’s
transmitting device) in accordance with the contact information provided below
or such other contact information as the parties may have duly provided by
notice; provided, however, that any notice or documentation required to be
delivered by Section 5 of this Agreement may be delivered to the Holders by
email to the addresses set forth on the signature pages hereto (or such other
email address as is provided by the Holders to the Company from time to time).

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The Company:
BG Staffing, Inc.
5000 Legacy Drive, Suite 350
Plano, Texas 75024
Telephone: (972) 692-2400
Facsimile:
Attention: L. Allen Baker, Jr.
President and Chief Executive Officer
With a copy to:
Fulbright & Jaworski LLP
(a member of Norton Rose Fulbright)

2200 Ross Avenue, Suite 2800
Dallas, Texas 75201
Telephone: (214) 855-3903
Facsimile: (214) 855-8200
Attention: William P. Bowers, Esq.

The Investors:
As per the contact information provided on the signature pages hereof.
Taglich Brothers, Inc.:
Taglich Brothers, Inc.
275 Madison Avenue, Suite 1618
New York, NY 10016
Telephone: (212) 661-6886
Facsimile: (212) 661-6824
Attention: Robert C. Schroeder
                    Vice President, Investment Banking
With a copy to:
Eaton & Van Winkle LLP
3 Park Avenue, 16th Floor
New York, New York 10016
Telephone: (212) 561-3604
Facsimile: (212) 779-9928
Attention: Vincent J. McGill, Esq.

9.3    Notification of Changes. The Investor hereby covenants and agrees to
notify the Company upon the occurrence of any event prior to the Closing of the
Investor’s purchase of the Shares pursuant to this Agreement which would cause
any representation, warranty, or covenant of the Investor contained in this
Agreement to be false or incorrect.    
9.4    Survival of Representations and Warranties. Each party hereto covenants
and agrees that the representations and warranties of such party contained in
this Agreement shall survive the acceptance of the subscription by the Company
and the Closing. Each Investor shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.
9.4    Indemnification.
(a)    The Company agrees to indemnify and hold harmless each Investor and its
Affiliates and their respective directors, officers, employees and agents from
and against any and all losses, claims, damages, liabilities and expenses
(including without limitation reasonable attorney fees and disbursements and
other expenses incurred in connection with investigating, preparing or defending
any action, claim or proceeding, pending or threatened and the costs of
enforcement thereof) (collectively, “Losses”) to which such Person may become
subject as a result of any breach of representation, warranty, covenant or
agreement made by or to be performed on the part of the Company under this
Agreement, and will reimburse any such Person for all such amounts as they are
incurred by such Person.
(b)    Promptly after receipt by any Investor (the “Indemnified Person”) of
notice of any demand, claim or circumstances which would or might give rise to a
claim or the commencement of any action, proceeding or investigation in respect
of which indemnity may be sought pursuant to Section 9.4, such Indemnified
Person shall promptly notify the Company in writing and the Company shall assume
the defense thereof, including the employment of counsel reasonably satisfactory
to

19

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such Indemnified Person, and shall assume the payment of all fees and expenses;
provided, however, that the failure of any Indemnified Person so to notify the
Company shall not relieve the Company of its obligations hereunder except to the
extent that the Company is materially prejudiced by such failure to notify. In
any such proceeding, any Indemnified Person shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Person unless: (i) the Company and the Indemnified Person
shall have mutually agreed to the retention of such counsel; or (ii) in the
reasonable judgment of counsel to such Indemnified Person representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. The Company shall not be liable for any
settlement of any proceeding effected without its written consent, which consent
shall not be unreasonably withheld, but if settled with such consent, or if
there be a final judgment for the plaintiff, the Company shall indemnify and
hold harmless such Indemnified Person from and against any loss or liability (to
the extent stated above) by reason of such settlement or judgment. Without the
prior written consent of the Indemnified Person, which consent shall not be
unreasonably withheld, the Company shall not effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Party, unless such settlement includes an unconditional release
of such Indemnified Person from all liability arising out of such proceeding.
9.5.    Entire Agreement. This Agreement contains the entire agreement between
the parties hereto in respect of the subject matter contained herein and
supersedes all prior and contemporaneous agreements and understandings of the
parties, oral and written, with respect to the subject matter contained herein.
9.6    Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and,
except for the Placement Agent and other registered broker-dealers, if any, who
are specifically agreed to be and acknowledged by each party as third party
beneficiaries hereof, is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
9.7.    Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and assigns. Neither the
Company nor any Investor shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other.
9.8.    Public Disclosures. Without the prior written consent of the applicable
Investor (which may be granted or withheld in such Investor’s sole discretion),
the Company shall not disclose the name of such Investor in any filing,
announcement, release or otherwise, unless such disclosure is required by
applicable law; provided, however, that the Company may disclose the name of
such Investor in any Registration Statement filed with respect to the resale of
the Investor’s Shares. Promptly after the First Closing the Company shall issue
a press release or file a Report on Form 8-Kdescribiing the material terms of
the transaction contemplated hereby and disclosing such non-public information
regarding the Company which was disclosed to the Investors but which as of such
date has not been publicly disclosed.
9.9.    Binding Effect; Benefits. This Agreement and all the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns; nothing in this Agreement,
expressed or implied, is intended to confer on any persons other than the
parties hereto or their respective successors and permitted assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.

20

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9.10.    Amendment; Waivers. All modifications, amendments or waivers to this
Agreement shall require the written consent of both the Company and a
majority-in-interest of the Investors (based on the number of Shares purchased
hereunder).
9.11.    Applicable Law; Disputes. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to the conflict of law provisions thereof, and the parties hereto
irrevocably submit to the exclusive jurisdiction of the United States District
Court for the Southern District of New York, or, if jurisdiction in such court
is lacking, the Supreme Court of the State of New York, New York County, in
respect of any dispute or matter arising out of or connected with this
Agreement. Waiver of Jury Trial. THE INVESTOR IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. Each party to this Agreement
certifies and acknowledges that: (a) no representative of any other party has
represented, expressly or otherwise, that such other party would not seek to
enforce the foregoing waiver in the event of a legal action; (b) such party has
considered the implications of this waiver; (c) such party makes this waiver
voluntarily; and (d) such party has been induced to enter into this Agreement
by, among other things, the mutual waivers and certifications in this Section
9.11.
9.12.    Further Assurances. Each party hereto shall do and perform or cause to
be done and performed all such further acts and shall execute and deliver all
such other agreements, certificates, instruments and documents as any other
party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
9.13.    Severability. If any term or provision of this Agreement is invalid,
illegal or unenforceable in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other term or provision of this Agreement
or invalidate or render unenforceable such term or provision in any other
jurisdiction provided that the enforcement of such other provisions obtains for
each party substantially all of the benefits contemplated hereby.
9.14    Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument. This Agreement may
also be executed via facsimile or by e-mail delivery of a “.pdf” format data
file, which shall be deemed an original.
9.14    Section and Other Headings. The section and other headings contained in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.
9.15    Independent Nature of Investors. The obligations of each Investor under
this Agreement or other transaction document are several and not joint with the
obligations of any other Investor, and no Investor shall be responsible in any
way for the performance of the obligations of any other Investor under this
Agreement or any other document. Each Investor shall be responsible only for its
own representations, warranties, agreements and covenants hereunder. The
decision of each Investor to purchase Shares pursuant to this Agreement has been
made by such Investor independently of any other Investor and independently of
any information, materials, statements or opinions as to the business, affairs,
operations, assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company which may have been made or
given by any other Investor or by any agent or employee of any other Investor,
and no Investor or any of its agents or employees shall have any liability to
any other Investor (or any other person) relating to or arising from any such
information, materials, statements or opinions. Nothing contained herein or in
any other transaction document, and no action taken by any Investor pursuant
hereto or thereto, shall

21

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be deemed to constitute the Investors as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Investors
are in any way acting in concert or as a group with respect to such obligations
or the transactions contemplated by this Agreement. Except as otherwise provided
in this Agreement or any other transaction document, each Investor shall be
entitled to independently protect and enforce its rights arising out of this
Agreement or out of the other transaction documents, and it shall not be
necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose. Each Investor has been represented by its own
separate legal counsel in connection with the transactions contemplated hereby
and acknowledges and understands (i) that Eaton & Van Winkle LLP has served as
counsel to the Placement Agent only, and (ii) Fulbright & Jaworski LLP (a member
of Norton Rose Fulbright) has served as counsel to the Company only.

[SIGNATURE PAGES IMMEDIATELY FOLLOW]

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IN WITNESS WHEREOF, the undersigned Investors and the Company have caused this
Securities Purchase Agreement to be duly executed as of the date first above
written.
 
 
 
 
BG STAFFING, INC.
 
By:
 
 
Name:
 
 
Title:
 
 
INVESTORS:

The Investors executing the Signature Page in the form attached hereto as Annex
A and delivering the same to the Company or its agents shall be deemed to have
executed this Agreement and agreed to the terms hereof.

{00036325.DOC;2}    

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Annex A
Securities Purchase Agreement
Investor Counterpart Signature Page

The undersigned, desiring to: (i) enter into this Securities Purchase Agreement
dated as of [●], 2014 (the “Agreement”), with the undersigned, BG Staffing,
Inc., a Delaware corporation (the “Company”), in or substantially in the form
furnished to the undersigned; and (ii) purchase the Shares as set forth below,
hereby agrees to purchase such Shares from the Company as of the Closing and
further agrees to join the Agreement as a party thereto, with all the rights and
privileges appertaining thereto, and to be bound in all respects by the terms
and conditions thereof. The undersigned specifically acknowledges having read
the Agreement in its entirely, including but not limited to the representations
in Section 3 of the Agreement (“Representations, Warranties and Acknowledgments
of the Investors”), and hereby represents that the statements contained therein
are complete and accurate with respect to the undersigned as an Investor.
Name of Investor:
If an entity:
Print Name of Entity:
        
By:         
Name:
Title:

If an individual:

Print Name:     

Signature:     
If joint individuals:

Print Name:     

Signature:     
All Investors:

Address:     
        
Telephone No.:     
Facsimile No.:     
Email Address:     
The Investor hereby elects to purchase ____________ Shares (to be completed by
Investor) at a purchase price of $9.75 per Share under the Securities Purchase
Agreement at a total Purchase Price of $__________ (to be completed by
Investor).

{00036325.DOC;2}

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Exhibit A-1

First Closing held on [●], 2014

Schedule of Investors

Investor
Shares
Purchase Price
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FIRST CLOSING TOTAL
 
 

 

{00036325.DOC;2}

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Exhibit A-2

Subsequent Closing held on [●], 2014
Schedule of Investors

Investor
Shares
Purchase Price
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SECOND CLOSING TOTAL
 
 

{00036325.DOC;2}