eng_ex101





  Exhibit 10.1








SECURITIES PURCHASE
AGREEMENT


 


This
Securities Purchase Agreement (this “Agreement”) is dated as
of June 1, 2021 and is between ENGlobal Corporation, a corporation
incorporated under the laws of the state of Nevada (the
“Company”), and each
purchaser identified on the signature pages hereto (each, including
its successors and assigns, a “Purchaser” and
collectively the “Purchasers”).


 


WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant
to an effective registration statement under the Securities Act (as
defined below) as to the Shares, the Company desires to issue and
sell to each Purchaser, and each Purchaser, severally and not
jointly, desires to purchase from the Company, securities of the
Company as more fully described in this Agreement.


 


NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the Company
and each Purchaser agree as follows:


 



ARTICLE I.



DEFINITIONS


 


1.1     
Definitions. In
addition to the terms defined elsewhere in this Agreement, for all
purposes of this Agreement, the following terms have the meanings
set forth in this Section 1.1:


 


“A.G.P.” means
A.G.P./Alliance Global Partners, sole placement agent.


 


“Acquiring Person” shall
have the meaning ascribed to such term in Section 4.5.


 


“Action” shall have the
meaning ascribed to such term in Section 3.1(m).


 


“Affiliate” means any
Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under
Rule 405 under the Securities Act.


 


“Authorization” shall have
the meaning ascribed to such term in Section 3.1(ss).


 


“BHCA” shall have the
meaning ascribed to such term in Section 3.1(oo).


 


“Board of Directors” means
the board of directors of the Company.


 


“Business Day” means any day except
any Saturday, any Sunday, any day which is a federal legal holiday
in the United States or any day on which banking institutions in
the State of New York are authorized or required by law or other
governmental action to close.


 


“Closing” means the
closing of the purchase and sale of the Shares pursuant to Section
2.1.


 


“Closing Date” means the Trading
Day on which all of the Transaction Documents have been executed
and delivered by the applicable parties thereto, and all conditions
precedent to (i) the Purchasers’ obligations to pay the
Subscription Amount and (ii) the Company’s obligations to
deliver the Shares, in each case, have been satisfied or waived,
but in no event later than the second (2nd) Trading Day following
the date hereof.


 



 







 






 


“Code” means the United
States Internal Revenue Code of 1986, as amended.


 


“Commission” means the
United States Securities and Exchange Commission.


 


“Common Stock Equivalents” means any
securities of the Company or the Subsidiaries which would entitle
the holder thereof to acquire at any time Common Stock, including,
without limitation, any debt, preferred stock, right, option,
warrant or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder
thereof to receive, Common Stock.


 


“Common Stock” means the common
stock of the Company, par value $0.001 per share, and any other
class of securities into which such securities may hereafter be
reclassified or changed.


 


“Company Counsel” means, Porter
Hedges LLP, 1000 Main St., 36th Floor, Houston,
Texas 77002 and Holland & Hart LLP, 5441 Kietzke Lane, Second
Floor, Reno, Nevada 89511.


 


“Disclosure Schedules ” means the
Disclosure Schedules of the Company delivered concurrently
herewith.


 


“Disclosure Time” means,
(i) if this Agreement is signed on a day that is not a Trading Day
or after 9:00 a.m. (New York City time) and before midnight (New
York City time) on any Trading Day, 9:01 a.m. (New York City time)
on the Trading Day immediately following the date hereof, unless
otherwise instructed as to an earlier time by A.G.P., and (ii) if
this Agreement is signed between midnight (New York City time) and
9:00 a.m. (New York City time) on any Trading Day, no later than
9:01 a.m. (New York City time) on the date hereof, unless otherwise
instructed as to an earlier time by A.G.P.


 


“DWAC” shall have the
meaning ascribed to such term in Section 2.2(a)(iv).


 


“EDGAR” means the
Commission’s Electronic Data Gathering, Analysis and
Retrieval System.


 


“Environmental Law” shall have the
meaning ascribed to such term in Section 3.1(p).


 


“Evaluation Date” shall have the
meaning ascribed to such term in Section 3.1(v).


 


“Exchange Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.


 


“Exempt Issuance” means the
issuance of (a) shares of Common Stock or options to employees,
officers, directors, consultants or advisors of the Company
pursuant to any stock or option plan duly adopted for such purpose,
by a majority of the non-employee members of the Board of Directors
or a majority of the members of a committee of non-employee
directors established for such purpose, provided that any
securities issued to consultants or advisors pursuant to this
clause (a) are issued as “restricted securities” (as
defined in Rule 144) and carry no registration rights that require
or permit the filing of any registration statement in connection
therewith during the prohibition period in Section 4.12(a) herein,
(b) securities upon the exercise or exchange of or conversion of
any Securities issued hereunder and/or other securities exercisable
or exchangeable for or convertible into shares of Common Stock
issued and outstanding on the date of this Agreement, provided that
such securities have not been amended since the date of this
Agreement to increase the number of such securities or to decrease
the exercise price, exchange price or conversion price of such
securities (other than in connection with stock splits or
combinations, or as otherwise required by the existing terms of
such securities) or to extend the term of such securities, and (c)
securities issued pursuant to acquisitions or strategic
transactions approved by a majority of the disinterested directors
of the Company, provided that any such issuance shall only be to a
Person (or to the equityholders of a Person) which is, itself or
through its subsidiaries, an operating company or an owner of an
asset in a business synergistic with the business of the Company
and shall provide to the Company additional benefits in addition to
the investment of funds, but shall not include a transaction in
which the Company is issuing securities primarily for the purpose
of raising capital or to an entity whose primary business is
investing in securities and provided that any securities issued in
connection with strategic transactions pursuant to this clause (c)
are issued as “restricted securities” (as defined in
Rule 144) and carry no registration rights that require or permit
the filing of any registration statement in connection therewith
during the prohibition period in Section 4.11(a)
herein.


 



 







 






 


“FCPA” means the Foreign
Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder.


 


“Federal Reserve” shall
have the meaning ascribed to such term in Section
3.1(oo).


  


“Hazardous Substances”
shall have the meaning ascribed to such term in Section
3.1(p).


 


“Intellectual Property
Rights” shall
have the meaning ascribed to such term in Section
3.1(s).


 


“Issuer Free Writing Prospectus” shall have
the meaning ascribed to such term in Section
3.1(f)(ii).


 


“IT Systems” shall have the
meaning ascribed to such term in Section 3.1(qq).


 


“Lien” means a lien,
charge, mortgage, pledge, security interest, claim, right of first
refusal, pre-emptive right, or other encumbrance of any kind
whatsoever.


 


“Lock-Up Agreement” means the
Lock-Up Agreements, each dated as of the date hereof, by and
between the Company and the directors and executive officers and
ten percent (10%) or greater stockholders of the Company, in the
form of Exhibit A attached hereto.


 


“Material Adverse Effect”
shall have the meaning assigned to such term in Section
3.1(b).


 


“Material Permits” shall
have the meaning assigned to such term in Section
3.1(r).


  


“Money Laundering Laws” shall have the
meaning assigned to such term in Section 3.1(pp).


 


“Person” means an
individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.


 


“Per Share Purchase Price”
equals $2.80 per share.


 


“Personal Data” shall have the
meaning ascribed to such term in Section 3.1(qq).


 


“Proceeding” means an
action, claim, suit, investigation or proceeding (including,
without limitation, an informal investigation or partial
proceeding, such as a deposition) pending or, to the
Company’s knowledge, threatened in writing against or
affecting the Company, any Subsidiary or any of their respective
properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state,
county, local or foreign).


 


“Prospectus” means the
final base prospectus filed for the Registration
Statement.


 


“Prospectus Supplement” means the
supplement to the Prospectus complying with Rule 424(b) of the
Securities Act that is filed with the Commission and delivered by
the Company to each Purchaser at the Closing.


 



 







 






 


“Purchaser Party” shall have the
meaning ascribed to such term in Section 4.8.


  


“Registration Statement” shall have the
meaning ascribed to such term in Section 3.1(f)(ii).


 


“Related Entity” shall
mean with respect to a Person, any parent, subsidiary and any
business, corporation, partnership, limited liability company or
other entity in which such Person holds a substantial ownership
interest, directly or indirectly.


 


“Related Party” shall mean
with respect to a Person, any or its affiliates, or any of its or
its affiliate’s shareholders, directors, officers, employees,
managers, members, partners, representatives or
trustees.


 


“Required Approvals” shall
have the meaning ascribed to such term in Section
3.1(e).


 


“SEC Reports” shall have
the meaning ascribed to such term in Section 3.1(j).


 


“Securities Act” means the Securities
Act of 1933, as amended, and the rules and regulations promulgated
thereunder.


 


“Shares” means the Common
Stock issued or issuable to each Purchaser pursuant to this
Agreement.


 


“Short Sales” means all
“short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include locating
and/or borrowing Common Stock).


 


 “Subscription
Amount”
means, as to each Purchaser, the aggregate amount to be paid for
Shares purchased hereunder as specified below such
Purchaser’s name on the signature page of this Agreement and
next to the heading “Subscription Amount,” in United
States dollars and in immediately available funds.


 


“Subsidiary” and
“Subsidiaries” shall have
the meanings ascribed to such terms in Section 3.1(a).


 


“Trading Day” means a day on which
the New York Stock Exchange is open for trading.


 


“Trading Market” means any of the
following markets or exchanges on which the Common Stock are listed
or quoted for trading on the date in question: the NYSE American,
the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, the New York Stock Exchange (or any
successors to any of the foregoing).


 


“Transaction Documents” means this
Agreement, the Lock-Up Agreements and the Placement Agency
Agreement, all exhibits and schedules thereto and hereto and any
other documents or agreements executed in connection with the
transactions contemplated hereunder.


 


“Transfer Agent” means
 Computershare Investor Services, LLC, the current transfer
agent of the Company, at its office P.O. Box 30170, College
Station, Texas 77842-3170, and any successor transfer agent of the
Company.


 



 







 






 



ARTICLE II.



PURCHASE AND
SALE


 


 


2.1   
  Closing. On
the Closing Date, upon the terms and subject to the conditions set
forth herein, the Company agrees to sell, and the Purchasers,
severally and not jointly, agree to purchase, up to an aggregate of
approximately $20 million of Shares. The Company shall deliver to
each Purchaser its respective Shares, and the Company and each
Purchaser shall deliver the other items set forth in Section 2.2
deliverable at the Closing. Upon satisfaction of the covenants and
conditions set forth in Sections 2.2 and 2.3, the Closing shall
occur at the offices of Sichenzia Ross Ference LLP or such other
location as the parties shall mutually agree. Unless otherwise
directed by A.G.P., settlement of the Shares shall occur via
“Delivery Versus Payment” (“DVP”) (i.e., on the Closing Date, the
Company shall issue the Shares registered in the Purchasers’
names and addresses and released by the Transfer Agent directly to
the account(s) at A.G.P. identified by each Purchaser; upon receipt
of such Shares, A.G.P. shall promptly electronically deliver such
Shares to the applicable Purchaser, and payment therefor shall be
made by the Placement Agent (or its clearing firm) by wire transfer
to the Company).


 


2.2   
  Deliveries.


 


(a)
         On or prior to the Closing Date,
the Company shall deliver or cause to be delivered to each
Purchaser the following:


 


(i)     this
Agreement duly executed by the Company;


 


(ii)     a
legal opinion of Company Counsel, in a form reasonably acceptable
to A.G.P. and the Purchasers;


 


(iii)     the
Company shall have provided each Purchaser with the Company’s
wire instructions, on Company letterhead and executed by the Chief
Executive Officer or Chief Financial Officer;


 


(iv)     a
copy of the irrevocable instructions to the Transfer Agent
instructing the Transfer Agent to deliver on an expedited basis via
The Depository Trust Company Deposit or Withdrawal at Custodian
system (“DWAC”) Shares equal to
such Purchaser’s Subscription Amount divided by the Per Share
Purchase Price, registered in the name of such
Purchaser;


 


(v)
     Officer’s Certificate, in form
and substance satisfactory to the Purchasers;


 


(vi)
    Secretary’s Certificate, in form and
substance satisfactory to the Purchasers;


 


(vii)     the
Lock-Up Agreements; and


 


(viii)
     the Prospectus and Prospectus
Supplement (which may be delivered in accordance with Rule 172
under the Securities Act).


 


(b)
         On or prior to the Closing Date,
each Purchaser shall deliver or cause to be delivered to the
Company the following:


 


(i)     this
Agreement duly executed by such Purchaser; and


 


(ii)     such
Purchaser’s Subscription Amount, which shall be made
available for “Delivery Versus Payment” settlement with
the Company or its designees.


 



 







 






 


2.3     Closing
Conditions.


 


(a)  
       The obligations of the Company hereunder
in connection with the Closing are subject to the following
conditions being met:


 


(i)     the
accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or
Material Adverse Effect, in all respects) when made and on the
Closing Date of the representations and warranties of the
Purchasers contained herein (unless as of a specific date therein
in which case they shall be accurate as of such date);


 


(ii)     all
obligations, covenants and agreements of each Purchaser required to
be performed at or prior to the Closing Date shall have been
performed; and


 


(iii)     the
delivery by each Purchaser of the items set forth in Section 2.2(b)
of this Agreement.


 


 


(b)
         The respective obligations
of the Purchasers hereunder in connection with the Closing are
subject to the following conditions being met:


 


(i)     the
accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or
Material Adverse Effect, in all respects) when made and on the
Closing Date of the representations and warranties of the Company
contained herein (unless as of a specific date therein in which
case they shall be accurate as of such date);


 


(ii)     all
obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been
performed;


 


(iii)     the
delivery by the Company of the items set forth in Section 2.2(a) of
this Agreement;


 


(iv)     there
shall have been no Material Adverse Effect with respect to the
Company since the date hereof; and


 


(v)     from
the date hereof to the Closing Date, trading in the Common Stock
shall not have been suspended by the Commission or the Nasdaq
Capital Market, and, at any time prior to the Closing Date, trading
in securities generally as reported by Bloomberg L.P. shall not
have been suspended or limited, or minimum prices shall not have
been established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium
have been declared either by the United States or New York State
authorities nor shall there have occurred any material outbreak or
escalation of hostilities or other national or international
calamity of such magnitude in its effect on, or any material
adverse change in, any financial market which, in each case, in the
reasonable judgment of such Purchaser, makes it impracticable or
inadvisable to purchase the Shares at the Closing.






 



 







 






 



ARTICLE III.



REPRESENTATIONS AND
WARRANTIES


 


 


3.1     Representations
and Warranties of the Company. The Company hereby makes the
following representations and warranties to each
Purchaser:


 


(a)     Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set
forth on Schedule 3.1(a) (each, a “Subsidiary”, and
collectively, the “Subsidiaries”). Except as
set forth on Schedule 3.1(a), the Company owns, directly or
indirectly, all of the capital stock or other equity interests of
each Subsidiary free and clear of any Liens, and all of the issued
and outstanding shares of capital stock of each Subsidiary are
validly issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase
securities. There are no outstanding options, warrants, scrip
rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire, any capital stock of
any Subsidiary, or contracts, commitments, understandings or
arrangements by which any Subsidiary is or may become bound to
issue capital stock.


 


(b)     Organization
and Qualification. The Company and each of the Subsidiaries
has been duly organized and validly exists as a corporation,
limited partnership or company in good standing (or the foreign
equivalent thereof, if any) under the laws of its jurisdiction of
organization. The Company and each of the Subsidiaries is duly
qualified to do business and is in good standing as a foreign or
extra-provincial corporation, partnership, company or limited
liability company in each jurisdiction in which the character or
location of its properties (owned, leased or licensed) or the
nature or conduct of its business makes such qualification
necessary, except for those failures to be so qualified or in good
standing which (individually and in the aggregate) would not have a
Material Adverse Effect. No Proceeding has been instituted in any
such jurisdiction revoking, limiting or curtailing or seeking to
revoke, limit or curtail such power and authority or qualification.
Neither the Company nor any Subsidiary is in violation nor default
of any of the provisions of its respective certificate or articles
of incorporation, bylaws or other organizational or charter
documents. The term “Material Adverse Effect”
means an effect, change, event or occurrence that, alone or in
conjunction with any other or others: (i) has or would reasonably
be expected to have a material adverse effect on: (A) the business,
general affairs, management, condition (financial or otherwise),
results of operations, shareholders’ equity, properties or
prospects of the Company and the Subsidiaries, taken as a whole, or
(B) the legality, validity or enforceability of any Transaction
Document, (ii) the Company’s ability to perform in any
material respect on a timely basis its obligations under any
Transaction Document or (iii) would result in the Prospectus or any
amendment thereto containing a misrepresentation within the meaning
of applicable securities laws; provided that a change in the market
price or trading volume of the Common Stock alone shall not be
deemed, in and of itself, to constitute a Material Adverse
Effect.


 


(c)     Authorization;
Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction
Documents and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and each
of the other Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the
Company, the Board of Directors or the Company’s shareholders
in connection herewith or therewith other than in connection with
the Required Approvals. This Agreement and each other Transaction
Document to which the Company is a party has been (or upon delivery
will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be
limited by applicable law.


 



 







 






 


(d)     No
Conflicts. The execution, delivery and performance by the
Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Shares and the
consummation by it of the transactions contemplated hereby and
thereby do not and will not (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time
or both would become a default) under, result in the creation of
any Lien upon any of the properties or assets of the Company or any
Subsidiary, or give to others any rights of termination, amendment,
anti-dilution or similar adjustments, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company or
Subsidiary debt or otherwise) or other understanding to which the
Company or any Subsidiary is a party or by which any property or
asset of the Company or any Subsidiary is bound or affected, or
(iii) subject to the Required Approvals, conflict with or result in
a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or
governmental authority, to which the Company or a Subsidiary is
subject (including federal and state securities laws and
regulations),or by which any property or asset of the Company or a
Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not have or reasonably be
expected to result in a Material Adverse Effect.


 


(e)     Filings,
Consents and Approvals. The Company is not required to
obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority or
other Person in connection with the execution, delivery and
performance by the Company of this Agreement, other than: (i) the
filings required pursuant to Section 4.4 of this Agreement, (ii)
the filing with the Commission of the Prospectus Supplement, (iii)
filings with FINRA, and (iv) application to the Nasdaq Capital
Market for the listing of the Shares for trading thereon in the
time and manner required thereby (collectively, the
“Required
Approvals”).


 


(f)   
  Issuance of the
Shares; Qualification; Registration.


 


(i)     The
Shares are duly authorized and, when issued and paid for in
accordance with the applicable Transaction Documents, will be duly
and validly issued, fully paid and non-assessable, free and clear
of all Liens imposed by the Company. The Company has reserved from
its duly authorized capital stock the maximum number of shares of
Common Stock issuable pursuant to this Agreement.


 


(ii)      The
Company was at the time of the filing of the Registration Statement
eligible to use Form S-3. The Company is eligible to use Form
S-3 under the Securities Act and it meets the transaction
requirements with respect to the aggregate market value of
securities being sold pursuant to this offering and during the
twelve (12) calendar months prior to this offering, as set forth in
General Instruction I.B.6 of Form S-3. The Company has prepared and
filed with the Commission a registration statement under the
Securities Act on Form S-3 (File No. 333-252572) on January 29,
2021, providing for the offer and sale, from time to time, of up to
$100,000,000 of the Company’s securities (the
“Registration
Statement”). The Registration Statement became
effective pursuant to Rule 467(a) under the Securities Act on March
19, 2021. The prospectus included in the Registration Statement at
the time it became effective, including documents incorporated
therein by reference, is referred to herein as the “Base
Prospectus”. No stop order suspending the effectiveness of
the Registration Statement has been issued under the Securities Act
and no proceedings for that purpose have been instituted or are
pending or, to the knowledge of the Company, are contemplated by
the Commission and any request on the part of the Commission for
additional information has been complied with.


 


Any
“issuer free writing prospectus” (as defined in Rule
433 under the Securities Act) relating to the Shares is hereafter
referred to as an “Issuer Free Writing Prospectus”. Any
reference herein to the Base Prospectus and the Prospectus shall be
deemed to refer to and include the documents incorporated by
reference therein as of the date of filing thereof; and any
reference herein to any “amendment” or
“supplement” with respect to any of the Base Prospectus
and the Prospectus shall be deemed to refer to and include (i) the
filing of any document with the Commission incorporated or deemed
to be incorporated therein by reference after the date of filing of
such Base Prospectus or Prospectus and (ii) any such document so
filed.


 


All
references in this Agreement to the Registration Statement, the
Base Prospectus, or the Prospectus, or any Issuer Free Writing
Prospectus, or any amendments or supplements to any of the
foregoing, shall be deemed to include any copy thereof filed with
the Commission on EDGAR.


 


The
Company has filed the registration statement with FINRA or meets
the definition of an Eligible Issuer.


 



 







 






 


(g)     Securities
Act Compliance. The Registration Statement complies, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will comply, with the
applicable provisions of the Securities Act. Each part of the
Registration Statement, when such part became effective, did not
and will not contain 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 The Prospectus, as of
its filing date, and any amendment thereof or supplement thereto,
did not and will not contain an untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.


 


(h)     No
Stop Orders. No order preventing or suspending the use of
the Base Prospectus or any Issuer Free Writing Prospectus has been
issued by the Commission.


 


(i)   
  Capitalization. The
capitalization of the Company is as set forth on Schedule 3.1(i). All of the
issued and outstanding shares of Common Stock are duly authorized,
validly issued, fully paid and non-assessable and have been duly
and validly authorized and issued, in compliance with all federal
and state securities laws and not in violation of or subject to any
preemptive or similar right that entitles any person to acquire
from the Company any Common Stock or other security of the Company
or any security convertible into, or exercisable or exchangeable
for, Common Stock or any other such security, except for such
rights as may have been fully satisfied or waived prior to the date
hereof. Except as set forth on Schedule 3.1(i), the Company
has no outstanding options, warrants, scrip rights to subscribe to,
calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exercisable
or exchangeable for, or giving any Person any right to subscribe
for or acquire, any Common Stock, or contracts, commitments,
understandings or arrangements by which the Company is or may
become bound to issue additional Common Stock or Common Stock
Equivalents. No Person has any right of first refusal, pre-emptive
right, right of participation, or any similar right to participate
in the transactions contemplated by the Transaction Documents. The
issuance and sale of the Shares will not obligate the Company to
issue Common Stock or other securities to any Person (other than
the Purchasers) and will not result in a right of any holder of
Company securities to adjust the exercise, conversion, exchange or
reset price under any of such securities. There are no outstanding
securities or instruments of the Company with any provision that
adjusts the exercise, conversion, exchange or reset price of such
security or instrument upon an issuance of securities by the
Company. There are no outstanding securities or instruments of the
Company that contain any redemption or similar provisions, and
there are no contracts, commitments, understandings or arrangements
by which the Company is or may become bound to redeem a security of
the Company. Except for the Required Approvals, no further approval
or authorization of any shareholder of the Company, the Board of
Directors or others is required for the issuance and sale of the
Shares. There are no shareholders agreements, voting agreements or
other similar agreements with respect to the Company’s
capital stock to which the Company is a party or, to the knowledge
of the Company, between or among any of the Company’s
shareholders.


 


(j)  
   Reports. The Company has filed
all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof
(the foregoing materials, including the exhibits thereto and
documents incorporated by reference therein, together with the
Prospectus and the Prospectus Supplements, being collectively
referred to herein as the “SEC Reports”) on a timely
basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC Reports complied
in all material respects with the requirements of the Securities
Act and the Exchange Act, as applicable, and none of the SEC
Reports, when filed, 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
the light of the circumstances under which they were made, not
misleading.


 


(k)     Financial
Statements. The consolidated financial statements, including
the notes thereto, included or incorporated by reference in the
Registration Statement and the Prospectus comply in all material
respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at
the time of filing. Such financial statements have been prepared in
accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved, except as may be
otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not
contain all footnotes required by generally accepted accounting
principles, and fairly present in all material respects the
financial position of the Company and its consolidated Subsidiaries
as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit
adjustments.


 


(l)  
   Material
Changes; Undisclosed Events, Liabilities or Developments.
Since the date of the latest consolidated financial statements
included in or incorporated by reference into the Registration
Statement and the Prospectus, except as set forth on Schedule
3.1(l), (i) there has been no event, occurrence or development that
has had or that could reasonably be expected to result in a
Material Adverse Effect, (ii) neither the Company nor any
Subsidiary has incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B)
liabilities not required to be reflected in the Company’s
financial statements pursuant to generally accepted accounting
principles or disclosed in filings made with the Commission, (iii)
the Company has not altered its method of accounting, (iv) the
Company has not declared or made any dividend or distribution of
cash or other property to its stockholders or purchased, redeemed
or made any agreements to purchase or redeem any shares of its
capital stock and (v) the Company has not issued any equity
securities to any officer, director or Affiliate, except pursuant
to existing Company stock option plans. The Company does not have
pending before the Commission any request for confidential
treatment of information. Except for the issuance of the Shares
contemplated by this Agreement and the related transactions
contemplated hereby or as set forth on Schedule 3.1(l), no event,
liability, fact, circumstance, occurrence or development has
occurred or exists or is reasonably expected to occur or exist with
respect to the Company or its Subsidiaries or their respective
businesses, prospects, properties, operations, assets or financial
condition that would be required to be disclosed by the Company
under applicable securities laws at the time this representation is
made or deemed made that has not been publicly disclosed at least 1
Trading Day prior to the date that this representation is
made.


 



 







 






 


(m)     Litigation.
Except as set forth on Schedule 3.1(m), there is no
material action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any
of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an
“Action”). None of the
Actions set forth on Schedule 3.1(m), if any, (i)
adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Shares,
or (ii) is expected to result in a Material Adverse Effect. The
Company has disclosed, in the documents filed by the Company
pursuant to Sections 12, 13, 14 or 15 of the Exchange Act and
incorporated or deemed to be incorporated by reference into the
Prospectus, all such information that it is required to disclose in
respect of any Action pursuant to the requirements of the
Securities Act and the Exchange Act, as applicable. Neither the
Company nor any Subsidiary, nor any director or officer thereof, is
or has been the subject of any Action involving a claim of
violation of or liability under federal or state securities laws or
a claim of breach of fiduciary duty. There has not been, and to the
knowledge of the Company, there is not pending or contemplated, any
material investigation by the Commission involving the Company or
any current or former director or officer of the Company which is
required to be disclosed in the SEC Reports. The Commission has not
issued any stop order or other order suspending the effectiveness
of any registration statement filed by the Company or any
Subsidiary under the Exchange Act or the Securities
Act.


  


(n)     Labor
Relations. No labor dispute exists or, to the knowledge of
the Company, is imminent with respect to any of the employees of
the Company, which could reasonably be expected to result in a
Material Adverse Effect. None of the Company’s or its
Subsidiaries’ employees is a member of a union that relates
to such employee’s relationship with the Company or such
Subsidiary, and neither the Company nor any of its Subsidiaries is
a party to a collective bargaining agreement, and the Company and
its Subsidiaries believe that their relationships with their
employees are good. To the knowledge of the Company, no executive
officer of the Company or any Subsidiary, is, or is now expected to
be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or
non-competition agreement, or any other contract or agreement or
any restrictive covenant in favor of any third party, and the
continued employment of each such executive officer does not
subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters. The Company and its
Subsidiaries are in compliance with all U.S. federal, state, local
and foreign laws and regulations relating to employment and
employment practices, terms and conditions of employment and wages
and hours, except where the failure to be in compliance could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect


 


(o)     Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or
in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a
default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or
credit agreement or any other agreement or instrument to which it
is a party or by which it or any of its properties is bound
(whether or not such default or violation has been waived), (ii) is
in violation of any judgment, decree or order of any court,
arbitrator or other governmental authority or (iii) is or has been
in violation of any statute, rule, ordinance or regulation of any
governmental authority, including without limitation all foreign,
federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and
safety and employment and labor matters, except in each case of
(i), (ii) and (iii) as could not have or reasonably be expected to
result in a Material Adverse Effect.


 


(p)     Environmental
Law. There has been no storage, generation, transportation,
handling, use, treatment, disposal, discharge, emission,
contamination, release or other activity involving any kind of
hazardous, toxic or other wastes, pollutants, contaminants,
petroleum products or other hazardous or toxic substances,
chemicals or materials (“Hazardous Substances”)
by, due to, on behalf of, or caused by the Company or any
Subsidiary (or, to the Company’s knowledge, any other entity
for whose acts or omissions the Company is or may be liable) upon
any property now or previously owned, operated, used or leased by
the Company or any Subsidiary, or upon any other property, which
would be a violation of or give rise to any liability under any
applicable law, rule, regulation, order, judgment, decree or
permit, common law provision or other legally binding standard
relating to pollution or protection of human health and the
environment (“Environmental Law”),
except for violations and liabilities which, individually or in the
aggregate, would not have a Material Adverse Effect. There has been
no disposal, discharge, emission contamination or other release of
any kind at, onto or from any such property or into the environment
surrounding any such property of any Hazardous Substances with
respect to which the Company or any Subsidiary has knowledge,
except as would not, individually or in the aggregate, have a
Material Adverse Effect. There is no pending or, to the best of the
Company’s knowledge, threatened administrative, regulatory or
judicial action, claim or notice of noncompliance or violation,
investigation or proceedings relating to any Environmental Law
against the Company or any Subsidiary, except as would not,
individually or in the aggregate, have a Material Adverse Effect.
No property of the Company or any Subsidiary is subject to any Lien
under any Environmental Law. Except as disclosed in the Prospectus,
neither the Company nor any Subsidiary is subject to any order,
decree, agreement or other individualized legal requirement related
to any Environmental Law, which, in any case (individually or in
the aggregate), would have a Material Adverse Effect. The Company
and each Subsidiary are in compliance in all material respects with
all applicable federal, state, local and Environmental Laws and has
all permits, authorizations and approvals required under any
applicable Environmental Laws and are each in compliance with their
requirements. In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the
business, operations and properties of the Company and the
Subsidiaries, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation,
any capital or operating expenditures required for clean-up,
closure or remediation of properties or compliance with
Environmental Laws, or any permit, license or approval, any related
constraints on operating activities and any potential liabilities
to third parties). On the basis of such review, the Company has
reasonably concluded that such associated costs and liabilities
would not, individually or in the aggregate, have a Material
Adverse Effect.


 



 







 






 


(q)     Title
to Assets. The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them
and good and marketable title in all personal property owned by
them that is material to the business of the Company and the
Subsidiaries, in each case free and clear of all Liens, except for
(i) Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to
be made of such property by the Company and the Subsidiaries, (ii)
Liens for the payment of federal, state or other taxes, for which
appropriate reserves have been made therefor in accordance with
generally accepted accounting principles and, the payment of which
is neither delinquent nor subject to penalties, and (iii) Liens
under the Revolving Credit Facility with Pacific Western Bank dba
Pacific Western Business Finance and under capital lease
financings. Any real property and facilities held under lease by
the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with which the Company and the
Subsidiaries are in compliance in all material
respects.


 


(r)
     Regulatory Permits. The Company
and the Subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign
regulatory authorities necessary to conduct their respective
businesses as described in the SEC Reports, except where the
failure to possess such permits could not reasonably be expected to
result in a Material Adverse Effect (“Material Permits”), and
neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any
Material Permit.


 


(s)
     Intellectual Property. The
Company and the Subsidiaries have, or have rights to use, all
patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights
necessary or required for use in connection with their respective
businesses as described in the SEC Reports and which the failure to
so have could have a Material Adverse Effect (collectively, the
“Intellectual
Property Rights”). None of, and neither the Company
nor any Subsidiary has received a written notice that any of, the
Intellectual Property Rights has expired, terminated or been
abandoned, or is expected to expire or terminate or be abandoned,
within two (2) years from the date of this Agreement except as
would not reasonably be expected to have a Material Adverse Effect.
Neither the Company nor any Subsidiary has received, since the date
of the latest audited financial statements included within the SEC
Reports, a written notice of a claim or otherwise has any knowledge
that the Intellectual Property Rights violate or infringe upon the
rights of any Person and neither is aware of any facts which would
form a reasonable basis for any such claim, except as could not
have or reasonably be expected to not have a Material Adverse
Effect. To the knowledge of the Company, all such Intellectual
Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property
Rights. The Company and its Subsidiaries have taken reasonable
security measures to protect the secrecy, confidentiality and value
of all of their intellectual properties, except where failure to do
so could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. None of the
Intellectual Property Rights used by the Company or any of its
Subsidiaries in their respective businesses has been obtained or is
being used by the Company or such Subsidiary in violation of any
contractual obligation binding on the Company or any of its
subsidiaries in violation of the rights of any person. The Company
and its subsidiaries have taken all reasonable steps in accordance
with normal industry practice to protect and maintain the
Intellectual Property Rights including, without limitation, the
execution of appropriate nondisclosure and invention assignment
agreements. The consummation of the transactions contemplated by
this Agreement will not result in the loss or impairment of, or
payment of, and additional material amounts with respect to, nor
require the consent of, any other person regarding the
Company’s or any of its subsidiaries’ right to own or
use any of the Intellectual Property Rights as owned or used in the
conduct of such party’s business as currently conducted. To
the knowledge of the Company and its Subsidiaries, no employee of
any of the Company or its subsidiaries is the subject of any
pending claim or proceeding involving a violation of any term of
any employment contract, invention disclosure agreement, patent
disclosure agreement, noncompetition agreement, non-solicitation
agreement, nondisclosure agreement or restrictive covenant to or
with a former employer, where the basis of such violation relates
to such employee’s employment with the Company or its
subsidiaries or actions undertaken by the employee while employed
with the Company or its Subsidiaries.


 


(t)   
  Insurance.
The Company and the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses
in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage.
Neither the Company nor any Subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business
without a significant increase in cost.


 


(u)     Transactions
With Affiliates and Employees. Except as set forth on
Schedule 3.1(u),
none of the officers or directors of the Company or any Subsidiary
and, to the knowledge of the Company, none of the employees of the
Company or any Subsidiary is presently a party to any transaction
with the Company or any Subsidiary (other than for services as
employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal
property to or from, providing for the borrowing of money from or
lending of money to or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the
Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director,
trustee, stockholder, member or partner, in each case in excess of
$120,000 other than for (i) payment of salary or consulting fees
for services rendered, (ii) reimbursement for expenses incurred on
behalf of the Company and (iii) other employee benefits, including
stock option agreements under any stock option plan of the
Company.


 



 







 






 


(v)     Sarbanes-Oxley;
Internal Accounting Controls. The Company and the
Subsidiaries and their respective officers and directors are in
compliance with the applicable provisions of the Sarbanes-Oxley Act
of 2002, as amended. The Company and the Subsidiaries maintain a
system of internal accounting controls sufficient to provide
reasonable assurance that: (i) transactions are executed in
accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP
and to maintain asset accountability, (iii) access to assets is
permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
The Company and the Subsidiaries have established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for the Company and the Subsidiaries and designed
such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or
submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the
Commission’s rules and forms. The Company’s certifying
officers have evaluated the effectiveness of the disclosure
controls and procedures of the Company and the Subsidiaries as of
applicable dates specified under the Exchange Act (such date, the
“Evaluation
Date”). The Company presented in its most recently
filed annual report on Form 10-K the conclusions of the certifying
officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date.
Except as set forth in the Prospectus, since the Evaluation Date,
there have been no changes in the internal control over financial
reporting (as such term is defined in the Exchange Act) of the
Company and the Subsidiaries that have materially affected, or is
reasonably likely to materially affect, the internal control over
financial reporting of the Company and the
Subsidiaries.


 


(w)   
Certain Fees.
Except for fees payable to A.G.P as will be as set forth in the
Prospectus, no brokerage or finder’s fees or commissions are
or will be payable by the Company, any Subsidiary or any Related
Entity to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with
respect to the transactions contemplated by the Transaction
Documents. The Purchasers shall have no obligation with respect to
any fees or with respect to any claims made by or on behalf of
other Persons for fees of a type contemplated in this Section that
may be due in connection with the transactions contemplated by the
Transaction Documents.


 


(x)     Investment
Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Shares, will not be or
be an Affiliate of, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended. The
Company shall conduct its business in a manner so that it will not
become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.


 


(y)    
Registration
Rights. No Person has any right to cause the Company or any
Subsidiary to effect the registration under the Securities Act of
any securities of the Company or any Subsidiary.


 


(z)     Listing
and Maintenance Requirements. The Company is subject to the
reporting requirements of Section 13 of the Exchange Act and files
periodic reports with the SEC; the Shares are registered with the
SEC under Section 12(b) of the Exchange Act and the Company is not
in breach of any filing or other requirements under the Exchange
Act. The Company taken no action designed to or which is likely to
have the effect of terminating the registration of its Common Stock
under the Exchange Act nor has not received any notice from that
the Commission is contemplating terminating such registration.
Except as disclosed in the SEC Reports, the Company has not, in the
12 months preceding the date hereof, received notice from any
Trading Market on which the Common Stock are or have been listed or
quoted to the effect that the Company is not in compliance with the
listing or maintenance requirements of such Trading Market. The
Company is, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with all such
listing and maintenance requirements. The Common Stock is currently
eligible for electronic transfer through the Depository Trust
Company or another established clearing corporation and the Company
is current in payment of the fees to the Depository Trust Company
(or such other established clearing corporation) in connection with
such electronic transfer.


 


(aa)   
Application of Takeover
Protections. The Company and the Board of Directors have
taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other
similar anti-takeover provision under the Company’s articles
of incorporation (or similar charter documents) or the laws of its
jurisdiction of incorporation that is or could become applicable to
the Purchasers as a result of the Purchasers and the Company
fulfilling their obligations or exercising their rights under the
Transaction Documents, including without limitation as a result of
the Company’s issuance of the Shares and the
Purchasers’ ownership of the Shares.


 



 







 






 


(bb)  
Disclosure. Except
with respect to the material terms and conditions of the
transactions contemplated by the Transaction Documents, the Company
confirms that neither it nor any other Person acting on its behalf
has provided any of the Purchasers or their agents or counsel with
any information that it believes constitutes or might constitute
material, non-public information which is not otherwise disclosed
in the Prospectus Supplement. The Company understands and confirms
that the Purchasers will rely on the foregoing representation in
effecting transactions in securities of the Company. All of the
disclosure furnished by or on behalf of the Company to the
Purchasers regarding the Company and its Subsidiaries, their
respective businesses and the transactions contemplated hereby,
including the Disclosure Schedules to this Agreement, 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. The press releases disseminated by the Company during
the twelve months preceding the date of this Agreement taken as a
whole do not 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 statements therein, in the light of
the circumstances under which they were made and when made, not
misleading. The Company acknowledges and agrees that no Purchaser
makes or has made any representations or warranties with respect to
the transactions contemplated hereby other than those specifically
set forth in Section 3.2 hereof.


 


(cc)   
No Integrated
Offering. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, neither
the Company, nor any of its Affiliates, nor any Person acting on
its or their behalf has, directly or indirectly, made any sales of
any security or solicited any offers to buy any security, under
circumstances that would cause this offering of the Securities to
be integrated with prior offerings by the Company for purposes of
(i) the Securities Act, or (ii) any applicable shareholder approval
provisions of any Trading Market on which any of the securities of
the Company are listed or designated.


 


(dd)   
Insolvency. Based
on the consolidated financial condition of the Company as of the
Closing Date, after giving effect to the receipt by the Company of
the proceeds from the sale of the Shares hereunder, (i) the fair
saleable value of the Company’s assets exceeds the amount
that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the
Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be
conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the
Company, consolidated and projected capital requirements and
capital availability thereof, and (iii) the current cash flow of
the Company, together with the proceeds the Company would receive,
were it to liquidate all of its assets, after taking into account
all anticipated uses of the cash, would be sufficient to pay all
amounts on or in respect of its liabilities when such amounts are
required to be paid. The Company does not intend to incur debts
beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be payable on or in
respect of its debt). The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for
reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the
Closing Date. Schedule
3.1(dd) sets forth as of the date hereof all outstanding
secured and unsecured Indebtedness of the Company or any
Subsidiary, or for which the Company or any Subsidiary has
commitments. For the purposes of this Agreement,
“Indebtedness” means (x) any liabilities for borrowed
money or amounts owed by the Company in excess of $50,000 (other
than trade accounts payable incurred in the ordinary course of
business), (y) all guaranties, endorsements and other contingent
obligations in respect of indebtedness of others to third parties,
whether or not the same are or should be reflected in the
Company’s consolidated balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary
course of business; and (z) the present value of any lease payments
in excess of $50,000 due under leases required to be capitalized in
accordance with GAAP. Neither the Company nor any Subsidiary is in
default with respect to any Indebtedness.


 


(ee)   
Tax Status. Except
for matters that would not, individually or in the aggregate, have
or reasonably be expected to result in a Material Adverse Effect,
the Company and its Subsidiaries each (i) has made or filed all
United States federal, state and local income and all foreign tax
returns, reports and declarations required by any jurisdiction to
which it is subject, (ii) has 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 and
(iii) has set aside on its books provision reasonably adequate for
the payment of all material 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 due by the
taxing authority of any jurisdiction, and the officers of the
Company or of any Subsidiary know of no basis for any such
claim.


 


(ff)   
Foreign Corrupt Practices;
Criminal Acts. Neither the Company nor any Subsidiary, nor
to the knowledge of the Company or any Subsidiary, any agent or
other person acting on behalf of the Company or any Subsidiary, has
(i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses
related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or
campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company or any Subsidiary (or made by any
person acting on its behalf of which the Company is aware) which is
in violation of law, or (iv) violated in any material respect any
provision of FCPA.


 


(gg)   
Accountants. The
Company’s independent registered public accounting firm is as
set forth in the Prospectus. To the knowledge and belief of the
Company, such accounting firm (i) is a registered public accounting
firm as required by the Exchange Act and (ii) shall express its
opinion with respect to the financial statements to be included in
the Company’s Annual Report on Form 10-K for the 2021 fiscal
year.


 



 







 






 


(hh)  
Acknowledgment Regarding
Purchasers’ Purchase of Shares. The Company
acknowledges and agrees that each of the Purchasers is acting
solely in the capacity of an arm’s length purchaser with
respect to the Transaction Documents and the transactions
contemplated thereby. The Company further acknowledges that no
Purchaser is acting as a financial advisor or fiduciary of the
Company (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated thereby and
any advice given by any Purchaser or any of their respective
representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely
incidental to the Purchasers’ purchase of the Shares. The
Company further represents to each Purchaser that the
Company’s decision to enter into this Agreement and the other
Transaction Documents has been based solely on the independent
evaluation of the transactions contemplated hereby by the Company
and its representatives.


 


(ii)     Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in
this Agreement or elsewhere herein to the contrary notwithstanding
(except for Sections 3.2(e) and 4.14 hereof), it is understood and
acknowledged by the Company that: (i) none of the Purchasers has
been asked by the Company to agree, nor has any Purchaser agreed,
to desist from purchasing or selling, long and/or short, securities
of the Company, or “derivative” securities based on
securities issued by the Company or to hold the Shares for any
specified term; (ii) past or future open market or other
transactions by any Purchaser, specifically including, without
limitation, Short Sales or “derivative” transactions,
before or after the closing of this or future private placement
transactions, may negatively impact the market price of the
Company’s publicly-traded securities; (iii) any Purchaser,
and counter-parties in “derivative” transactions to
which any such Purchaser is a party, directly or indirectly,
presently may have a “short” position in the Common
Stock, and (iv) each Purchaser shall not be deemed to have any
affiliation with or control over any arm’s length
counter-party in any “derivative” transaction. The
Company further understands and acknowledges that (y) one or more
Purchasers may engage in hedging activities (in material compliance
with applicable laws) at various times during the period that the
Shares are outstanding, and (z) such hedging activities (if any)
could reduce the value of the existing shareholders’ equity
interests in the Company at and after the time that the hedging
activities are being conducted. The Company acknowledges that such
aforementioned hedging activities do not constitute a breach of any
of the Transaction Documents.


 


(jj)     Regulation
M Compliance. The Company has not, and to its knowledge no
one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or
manipulation of the price of any security of the Company 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, or (iii) paid or agreed to pay to any Person
any compensation for soliciting another to purchase any other
securities of the Company, other than, in the case of clauses (ii)
and (iii), compensation paid to A.G.P.


 


(kk)   
Office of Foreign Assets
Control. Neither the Company nor any Subsidiary nor, to the
Company's knowledge, any director, officer, agent, employee or
affiliate of the Company or any Subsidiary is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”) and
the Company will not, directly or indirectly, use the proceeds of
the Offering hereunder, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or
other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered
by OFAC.


 


(ll)   
  Stock Option
Plans. Each stock option granted by the Company under the
Company’s stock option plan or omnibus long-term incentive
plan was granted (i) in accordance with the terms of such plan and
(ii) with an exercise price at least equal to the fair market value
of the Common Stock on the date such stock option would be
considered granted under GAAP and applicable law. No stock option
granted under the Company’s stock option plan or omnibus
long-term incentive plan has been backdated. The Company has not
knowingly granted, and there is no and has been no Company policy
or practice to knowingly grant, stock options prior to, or
otherwise knowingly coordinate the grant of stock options with, the
release or other public announcement of material information
regarding the Company or the Subsidiaries or their financial
results or prospects.


 


(mm)  
Intentionally
Omitted.


 


(nn)    
U.S. Real Property Holding
Corporation. The Company is not and has never been a United
States real property holding corporation within the meaning of
Section 897 of the Internal Revenue Code of 1986, as amended, and
the Company shall so certify upon Purchaser’s
request.


 


(oo)   
Bank Holding Company
Act. Neither the Company nor any of its Subsidiaries or
Affiliates is subject to the Bank Holding Company Act of 1956, as
amended (the “BHCA”) and to regulation
by the Board of Governors of the Federal Reserve System (the
“Federal
Reserve”). Neither the Company nor any of its
Subsidiaries or Affiliates owns or controls, directly or
indirectly, five percent (5%) or more of the outstanding shares of
any class of voting securities or twenty-five percent or more of
the total equity of a bank or any entity that is subject to the
BHCA and to regulation by the Federal Reserve. Neither the Company
nor any of its Subsidiaries or Affiliates exercises a controlling
influence over the management or policies of a bank or any entity
that is subject to the BHCA and to regulation by the Federal
Reserve.


 



 







 






 


(pp)   
Money Laundering.
The operations of the Company and its Subsidiaries are and have
been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations
thereunder (collectively, the “Money Laundering Laws”),
and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving
the Company or any Subsidiary with respect to the Money Laundering
Laws is pending or, to the knowledge of the Company or any
Subsidiary, threatened.


 


(qq)   
Information
Technology. The Company’s, the Subsidiaries’
and, to the knowledge of the Company, the Related Parties’
information technology assets and equipment, computers, systems,
networks, hardware, software, websites, applications, and databases
(collectively, “IT
Systems”) operate and perform in all material respects
as required in connection with the operation of the business of the
Company, the Subsidiaries and the Related Entities as currently
conducted. The Company, the Subsidiaries and, to the knowledge of
the Company, the Related Parties maintain commercially reasonable
controls, policies, procedures, and safeguards to maintain and
protect their material confidential information and the integrity,
continuous operation, redundancy and security of all IT Systems and
all personal, personally identifiable, sensitive, confidential or
regulated data (“Personal Data”) processed
and stored thereon, and to the knowledge of the Company, there have
been no breaches, incidents, violations, outages, compromises or
unauthorized uses of or accesses to same, except for those that
have been remedied without material cost or liability or the duty
to notify any other person, nor any incidents under internal review
or investigations relating to the same. The Company, the
Subsidiaries and, to the knowledge of the Company, the Related
Parties are presently in compliance in all material respects with
all applicable laws or statutes and all applicable judgments,
orders, rules and regulations of any court or arbitrator or
governmental or regulatory authority, internal policies and
contractual obligations relating to the privacy and security of IT
Systems and Personal Data and to the protection of such IT Systems
and Personal Data from unauthorized use, access, misappropriation
or modification, except for any such noncompliance that would not
have a Material Adverse Effect.


 


(rr)     Other
Covered Persons. Other than A.G.P., the Company is not aware
of any person that has been or will be paid (directly or
indirectly) remuneration for solicitation of purchasers in
connection with the sale of any Shares.


 


(ss)     Regulatory.
Except as set forth on Schedule 3.1(ss), as
applicable, the Company and its Subsidiaries (i) have not received
any notice from any court or arbitrator or governmental or
regulatory authority or third party alleging or asserting
noncompliance with any laws or any licenses, exemptions,
certificates, approvals, clearances, authorizations, permits,
registrations and supplements or amendments thereto required to
conduct the Company’s business as presently conducted
(“Authorizations”); (ii) possess all material
Authorizations and such Authorizations are valid and in full force
and effect and are not in violation of any term of any such
Authorizations; (iii) have not received any written notice that any
court or arbitrator or governmental or regulatory authority has
taken, is taking or intends to take, action to limit, suspend,
materially modify or revoke any Authorizations nor is any such
limitation, suspension, modification or revocation threatened; (iv)
have filed, obtained, maintained or submitted all material reports,
documents, forms, notices, applications, records, claims,
submissions and supplements or amendments as required by any
Authorizations and that all such reports, documents, forms,
notices, applications, records, claims, submissions and supplements
or amendments were complete and accurate on the date filed (or were
corrected or supplemented by a subsequent submission); and (v) are
not a party to any corporate integrity agreements, monitoring
agreements, consent decrees, settlement orders, or similar
agreements with or imposed by any governmental or regulatory
authority.


 


(tt)     Material
Agreements. The agreements and documents described in the
Registration Statement or Prospectus conform in all material
respects to the descriptions thereof contained or incorporated by
reference therein conformed in all material respects to the
requirements of the Securities Act or the Exchange Act, as
applicable at the time filed, and were filed on a timely basis with
the Commission and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; any
further documents so filed and there are no agreements or other
documents required by the Securities Act and the rules and
regulations thereunder to be described in the Prospectus or to be
filed with the Commission as exhibits to the Registration Statement
or to be incorporated by reference in the Registration Statement or
Prospectus, that have not been so described or filed or
incorporated by reference.


 


(uu)   
[Reserved].


  


3.2     Representations
and Warranties of the Purchasers. Each Purchaser, for itself
and for no other Purchaser, hereby represents and warrants as of
the date hereof and as of the Closing Date to the Company as
follows (unless as of a specific date therein, in which case they
shall be accurate as of such date):


 



 







 






 


(a)     Organization;
Authority. Such Purchaser is either an individual or an
entity duly incorporated or formed, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
formation with full right, corporate, partnership, limited
liability company or similar power and authority to enter into and
to consummate the transactions contemplated by the Transaction
Documents and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of the Transaction Documents
and performance by such Purchaser of the transactions contemplated
by the Transaction Documents have been duly authorized by all
necessary corporate, partnership, limited liability company or
similar action, as applicable, on the part of such Purchaser. Each
Transaction Document to which it is a party has been duly executed
by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof or thereof, will constitute the
valid and legally binding obligation of such Purchaser, enforceable
against it in accordance with its terms, except: (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally; (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies; and
(iii) insofar as indemnification and contribution provisions may be
limited by applicable law.


 


(b)     Understandings
or Arrangements. Such Purchaser is acquiring the Shares as
principal for its own account and has no direct or indirect
arrangement or understandings with any other persons to distribute
or regarding the distribution of such Shares (this representation
and warranty not limiting such Purchaser’s right to sell the
Shares pursuant to the Registration Statement or otherwise in
compliance with applicable federal and state securities laws). Such
Purchaser is acquiring the Shares hereunder in the ordinary course
of its business. Such Purchaser is acquiring such Shares as
principal for his, her or its own account and not with a view to or
for distributing or reselling such Shares or any part thereof in
violation of the Securities Act or any applicable state securities
law, has no present intention of distributing any of such Shares in
violation of the Securities Act or any applicable state securities
law and has no direct or indirect arrangement or understandings
with any other persons to distribute or regarding the distribution
of such Shares in violation of the Securities Act or any applicable
state securities law (this representation and warranty not limiting
such Purchaser’s right to sell such Shares pursuant to a
registration statement or otherwise in compliance with applicable
federal and state securities laws).


 


(c)     Purchaser
Status. At the time such Purchaser was offered the Shares,
it was, and as of the date hereof it is, either: (i) an
“accredited investor” as defined in Rule 501(a)(1),
(a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a
“qualified institutional buyer” as defined in Rule
144A(a) under the Securities Act.


 


(d)     Experience
of Such Purchaser. Such Purchaser, either alone or together
with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of
evaluating the merits and risks of the prospective investment in
the Shares, and has so evaluated the merits and risks of such
investment. Such Purchaser is able to bear the economic risk of an
investment in the Shares and, at the present time, is able to
afford a complete loss of such investment.


 


(e)     Access
to Information. Such Purchaser acknowledges that it has had
the opportunity to review the Transaction Documents (including all
exhibits and schedules thereto) and the reports filed with the
Commission and has been afforded: (i) the opportunity to ask such
questions as it has deemed necessary of, and to receive answers
from, representatives of the Company concerning the terms and
conditions of the offering of the Shares and the merits and risks
of investing in the Shares; (ii) access to information about the
Company and its financial condition, results of operations,
business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain
such additional information that the Company possesses or can
acquire without unreasonable effort or expense that is necessary to
make an informed investment decision with respect to the
investment. Such Purchaser acknowledges and agrees that neither
A.G.P. nor any Affiliate of A.G.P. has provided such Purchaser with
any information or advice with respect to the Shares nor is such
information or advice necessary or desired. Neither A.G.P. nor any
Affiliate has made or makes any representation as to the Company or
the quality of the Shares and A.G.P. and any Affiliate may have
acquired non-public information with respect to the Company which
such Purchaser agrees need not be provided to it. In connection
with the issuance of the Shares to such Purchaser, neither A.G.P.
nor any of their Affiliates has acted as a financial advisor or
fiduciary to such Purchaser.


 



 







 






 


(f)  
   Certain
Transactions and Confidentiality. Other than consummating
the transactions contemplated hereunder, such Purchaser has not,
nor has any Person acting on behalf of or pursuant to any
understanding with such Purchaser, directly or indirectly executed
any purchases or sales, including Short Sales, of the securities of
the Company during the period commencing as of the time that such
Purchaser first received a term sheet (written or oral) from the
Company or any other Person representing the Company setting forth
the material terms of the transactions contemplated hereunder and
ending immediately prior to the execution hereof. Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed
investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the
portfolio managers have no direct knowledge of the investment
decisions made by the portfolio managers managing other portions of
such Purchaser’s assets, the representation set forth above
shall only apply with respect to the portion of assets managed by
the portfolio manager that made the investment decision to purchase
the Shares covered by this Agreement. Other than to other Persons
party to this Agreement or to such Purchaser’s
representatives, including, without limitation, its officers,
directors, partners, legal and other advisors, employees, agents
and Affiliates, such Purchaser has maintained the confidentiality
of all disclosures made to it in connection with this transaction
(including the existence and terms of this transaction).
Notwithstanding the foregoing, for the avoidance of doubt, nothing
contained herein shall constitute a representation or warranty
against, or a prohibition of, any actions with respect to the
borrowing of, arrangement to borrow, identification of the
availability of, and/or securing of, securities of the Company in
order for such Purchaser (or its broker or other financial
representative) to effect Short Sales or similar transactions in
the future.


 


(g)
     General Solicitation. Such
Purchaser is not purchasing the Shares as a result of any
advertisement, article, notice or other communication regarding the
Shares published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or,
to the knowledge of such Purchaser, any other general solicitation
or general advertisement.


 


The
Company acknowledges and agrees that the representations contained
in this Section 3.2 shall not modify, amend or affect such
Purchaser’s right to rely on the Company’s
representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction
Document or any other document or instrument executed and/or
delivered in connection with this Agreement or the consummation of
the transactions contemplated hereby. Notwithstanding the
foregoing, for the avoidance of doubt, nothing contained herein
shall constitute a representation or warranty, or preclude any
actions, with respect to locating or borrowing shares in order to
effect Short Sales or similar transactions in the
future.


 



ARTICLE IV.



OTHER AGREEMENTS
OF THE PARTIES


 


4.1     Legends.
The Shares shall be issued free of legends.


 


4.2    Lock-Up.
 The Company shall not amend, modify, waive or terminate any
provision of any of the Lock-Up Agreements except to extend the
term of the lock-up period and shall enforce the provisions of each
Lock-Up Agreement in accordance with its terms. If any party to a
Lock-Up Agreement breaches any provision of a Lock-Up Agreement,
the Company shall promptly use its commercially reasonable efforts
to seek specific performance of the terms of such Lock-Up
Agreement.


 


4.3     Integration.
The Company shall not sell, offer for sale or solicit offers to buy
or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Shares for purposes of the rules and
regulations of any Trading Market such that it would require
shareholder approval prior to the closing of such other transaction
unless shareholder approval is obtained before the closing of such
subsequent transaction.


 


4.4     Securities
Laws Disclosure; Publicity. The Company shall (a) by the
Disclosure Time issue a press release disclosing the material terms
of the transactions contemplated hereby, and (b) file a Current
Report on Form 8-K, including the Transaction Documents as exhibits
thereto, with the Commission within the time required by the
Exchange Act. From and after the issuance of such press release,
the Company represents to the Purchasers that it shall have
publicly disclosed all material, non-public information delivered
to any of the Purchasers by the Company or any of the Subsidiaries,
or any of their respective officers, directors, employees or agents
in connection with the transactions contemplated by the Transaction
Documents. In addition, effective upon the issuance of such press
release, the Company acknowledges and agrees that any and all
confidentiality or similar obligations under any agreement, whether
written or oral, between the Company, any of the Subsidiaries or
any of their respective officers, directors, agents, employees or
Affiliates on the one hand, and any of the Purchasers or any of
their Affiliates on the other hand, shall terminate. The Company
and each Purchaser shall consult with each other in issuing any
other press releases with respect to the transactions contemplated
hereby, and neither the Company nor any Purchaser shall issue any
such press release nor otherwise make any such public statement
without the prior consent of the Company, with respect to any press
release of any Purchaser, or without the prior consent of each
Purchaser, with respect to any press release of the Company, which
consent shall not unreasonably be withheld or delayed, except if
such disclosure is required by law, in which case the disclosing
party shall promptly provide the other party with prior notice of
such public statement or communication. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any
Purchaser, or include the name of any Purchaser in any filing with
the Commission or any regulatory agency or Trading Market, without
the prior written consent of such Purchaser, except (a) as required
by federal securities law in connection with the filing of final
Transaction Documents with the Commission and (b) to the extent
such disclosure is required by law or Trading Market regulations,
in which case the Company shall provide the Purchasers with prior
notice of such disclosure permitted under this clause
(b).


 



 







 






 


4.5     Shareholder
Rights Plan. No claim will be made or enforced by the
Company or, with the consent of the Company, any other Person, that
any Purchaser is an “Acquiring Person” under
any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or similar
anti-takeover plan or arrangement in effect or hereafter adopted by
the Company, or that any Purchaser could be deemed to trigger the
provisions of any such plan or arrangement, by virtue of receiving
Shares under the Transaction Documents or under any other agreement
between the Company and the Purchasers.


 


 4.6     Non-Public
Information. Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction
Documents, which shall be disclosed pursuant to Section 4.4, the
Company covenants and agrees that neither it, nor any other Person
acting on its behalf will provide any Purchaser or any
Purchaser’s agents or counsel with any information that
constitutes, or the Company reasonably believes constitutes,
material non-public information, unless prior thereto such
Purchaser shall have consented to the receipt of such information
and agreed with the Company to keep such information confidential.
The Company understands and confirms that each Purchaser shall be
relying on the foregoing covenant in effecting transactions in
securities of the Company. To the extent that the Company delivers
any material, non-public information to a Purchaser without such
Purchaser’s consent, the Company hereby covenants and agrees
that such Purchaser shall not have any duty of confidentiality to
the Company, any of the Subsidiaries, or any of their respective
officers, directors, agents, employees or Affiliates, or a duty to
the Company, any of the Subsidiaries or any of their respective
officers, directors, agents, employees or Affiliates not to trade
on the basis of, such material, non-public information, provided
that the Purchaser shall remain subject to applicable law. To the
extent that any notice provided pursuant to any Transaction
Document constitutes, or contains, material, non-public information
regarding the Company or any Subsidiaries, the Company shall
simultaneously file such material non-public information on with
the Commission pursuant to a Current Report on Form 8-K. The
Company understands and confirms that each Purchaser shall be
relying on the foregoing covenant in effecting transactions in
securities of the Company.


 


4.7     Use
of Proceeds. The Company shall use the net proceeds from the
sale of the Shares hereunder for working capital and general
corporate purposes and shall not use such proceeds: (a) for the
satisfaction of any portion of the Company’s debt (other than
payment of trade payables in the ordinary course of the
Company’s business and prior practices), (b) for the
redemption of any Common Stock or Common Stock Equivalents, (c) for
the settlement of any outstanding litigation, or (d) in violation
of FCPA or OFAC regulations.


 


4.8     Indemnification
of Purchasers. Subject to the provisions of this Section
4.8, the Company will indemnify and hold each Purchaser and its
directors, officers, shareholders, members, partners, employees and
agents (and any other Persons with a functionally equivalent role
of a Person holding such titles notwithstanding a lack of such
title or any other title), each Person who controls such Purchaser
(within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with
a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such
controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable
attorneys’ fees and costs of investigation that any such
Purchaser Party may suffer or incur caused by or based upon (a) any
breach of any of the representations or warranties made by the
Company in this Agreement or in the other Transaction Documents or
(b) any action instituted against the Purchaser Parties in any
capacity, or any of them or their respective Affiliates, by any
shareholder of the Company who is not an Affiliate of such
Purchaser Party, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is
solely based upon a material breach of such Purchaser Party’s
representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party
may have with any such shareholder or any violations by such
Purchaser Party of state or federal securities laws or any conduct
by such Purchaser Party which is finally judicially determined to
constitute fraud, gross negligence or willful misconduct). The
Company will indemnify each Purchaser Party, to the fullest extent
permitted by applicable law, from and against any and all losses,
claims, damages, liabilities, reasonable and documented out of
pocket costs (including, without limitation, reasonable
attorneys’ fees) and expenses, as incurred, caused by or
based upon (i) any untrue or alleged untrue statement of a material
fact contained in the Registration Statement or any amendment
thereto, any Issuer Free Writing Prospectus, the Prospectus or any
amendment or supplement thereto, or caused by or based upon any
omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the
case of any prospectus or supplement thereto, in the light of the
circumstances under which they were made) not misleading, except to
the extent, but only to the extent, that such untrue statements or
omissions are based solely upon information regarding such
Purchaser Party furnished in writing to the Company by such
Purchaser Party expressly for use therein, or (ii) any violation or
alleged violation by the Company of the Securities Act, the
Exchange Act or any state securities law, or any rule or regulation
thereunder in connection therewith. If any action shall be brought
against any Purchaser Party in respect of which indemnity may be
sought pursuant to this Agreement, such Purchaser Party shall
promptly notify the Company in writing, and the Company shall have
the right to assume the defense thereof with counsel of its own
choosing reasonably acceptable to the Purchaser Party. Any
Purchaser Party shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such
Purchaser Party except to the extent that (x) the employment
thereof has been specifically authorized by the Company in writing,
(y) the Company has failed after a reasonable period of time to
assume such defense and to employ counsel or (z) in such action
there is, in the reasonable opinion of counsel, a material conflict
on any material issue between the position of the Company and the
position of such Purchaser Party, in which case the Company shall
be responsible for the reasonable fees and expenses of no more than
one such separate counsel. The Company will not be liable to any
Purchaser Party under this Agreement (1) for any settlement by a
Purchaser Party effected without the Company’s prior written
consent, which shall not be unreasonably withheld or delayed; or
(2) to the extent, but only to the extent that a loss, claim,
damage or liability is attributable to any Purchaser Party’s
breach of any of the representations, warranties, covenants or
agreements made by such Purchaser Party in this Agreement or in the
other Transaction Documents. The indemnification required by this
Section 4.8 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and
when bills are received or are incurred. The indemnity agreements
contained herein shall be in addition to any cause of action or
similar right of any Purchaser Party against the Company or others
and any liabilities the Company may be subject to pursuant to
law.


 



 







 






 


4.9     Reservation
of Common Stock. As of the date hereof, the Company has
reserved and the Company shall continue to reserve and keep
available at all times, free of preemptive rights, a sufficient
number of shares of Common Stock for the purpose of enabling the
Company to issue the Shares pursuant to this
Agreement.


 


4.10   
Listing of Common
Stock. The Company hereby agrees to use best efforts to
maintain the listing or quotation of the Common Stock on the
Nasdaq, and concurrently with the Closing, the Company shall apply
to list or quote all of the Shares on the Nasdaq and promptly
secure the listing of all of the Shares on the Nasdaq. The Company
further agrees, if the Company applies to have the Common Stock
traded on any other Trading Market, it will then include in such
application all of the Shares, and will take such other action as
is necessary to cause all of the Shares to be listed or quoted on
such other Trading Market as promptly as possible. The Company will
then take all action reasonably necessary to continue the listing
and trading of its Common Stock on a Trading Market and will comply
in all respects with the Company’s reporting, filing and
other obligations under the bylaws or rules of the Trading Market.
For so long as the Company maintains a listing or quotation of the
Common Stock on a Trading Market, the Company agrees to maintain
the eligibility of the Common Stock for electronic transfer through
the Depository Trust Company or another established clearing
corporation, including, without limitation, by timely payment of
fees to the Depository Trust Company or such other established
clearing corporation in connection with such electronic
transfer.


 


4.11   
[Reserved].


 


4.12   
Subsequent Equity
Sales.


 


(a)     From
the date hereof until 60 days after the Closing Date, neither the
Company nor any Subsidiary shall (i) issue, enter into any
agreement to issue or announce the issuance or proposed issuance of
any Common Stock or Common Stock Equivalents or (ii) file any
registration statement or any amendment or supplement thereto,
other than the Prospectus Supplement or a registration statement on
Form S-8 with respect to a shareholder approved equity incentive
plan, so long as such registration statement on Form S-8 is not
filed prior to June 14 2021.


 


(b)     Notwithstanding
the foregoing, this Section 4.12 shall not apply in respect of an
Exempt Issuance; provided, however that such securities are issued
as “restricted securities” (as defined in Rule 144 of
the Securities Act) and carry no registration rights that require
or permit the filing of any registration statement in connection
therewith during the prohibition period in Section 4.12(a)
herein.


  


4.13  
Equal Treatment of
Purchasers. No consideration (including any modification of
any Transaction Document) shall be offered or paid to any Person to
amend or consent to a waiver or modification of any provision of
the Transaction Documents unless the same consideration is also
offered to all of the parties to such Transaction Documents. For
clarification purposes, this provision constitutes a separate right
granted to each Purchaser by the Company and negotiated separately
by each Purchaser, and is intended for the Company to treat the
Purchasers as a class and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the
purchase, disposition or voting of Shares or
otherwise.


 


4.14  
Certain Transactions and
Confidentiality. Each Purchaser, severally and not jointly
with the other Purchasers, covenants that neither it nor any
Affiliate acting on its behalf or pursuant to any understanding
with it will execute any purchases or sales, including Short Sales
of any of the Company’s securities during the period
commencing with the execution of this Agreement and ending at such
time that the transactions contemplated by this Agreement are first
publicly announced pursuant to the initial press release as
described in Section 4.4. Each Purchaser, severally and not jointly
with the other Purchasers, covenants that until such time as the
transactions contemplated by this Agreement are publicly disclosed
by the Company pursuant to the initial press release as described
in Section 4.4, such Purchaser will maintain the confidentiality of
the existence and terms of this transaction and the information
included in this Agreement, including the schedules hereto.
Notwithstanding the foregoing, and notwithstanding anything
contained in this Agreement to the contrary, the Company expressly
acknowledges and agrees that (i) no Purchaser makes any
representation, warranty or covenant hereby that it will not engage
in effecting transactions in any securities of the Company after
the time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the initial press release as
described in Section 4.4, (ii) no Purchaser shall be restricted or
prohibited from effecting any transactions in any securities of the
Company in accordance with applicable securities laws from and
after the time that the transactions contemplated by this Agreement
are first publicly announced pursuant to the initial press release
as described in Section 4.4 and (iii) no Purchaser shall have any
duty of confidentiality or duty not to trade in the securities of
the Company to the Company or the Subsidiaries after the issuance
of the initial press release as described in Section 4.4.
Notwithstanding the foregoing, in the case of a Purchaser that is a
multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets
and the portfolio managers have no direct knowledge of the
investment decisions made by the portfolio managers managing other
portions of such Purchaser’s assets, the covenant set forth
above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision
to purchase the Shares covered by this Agreement.


 



 







 






 



ARTICLE V.



MISCELLANEOUS


 


 


5.1     Termination.
This Agreement may be terminated by any Purchaser, as to such
Purchaser’s obligations hereunder only and without any effect
whatsoever on the obligations between the Company and the other
Purchasers, by written notice to the other parties, if the Closing
has not been consummated on or before June 8, 2021; provided,
however,
that no such termination will affect the right of any party to sue
for any breach by any other party (or parties).


 


5.2     Fees
and Expenses. Except as expressly set forth in the
Transaction Documents to the contrary, each party shall pay the
fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party
incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all Transfer
Agent fees (including, without limitation, any fees required for
same-day processing of any instruction letter delivered by the
Company and any exercise notice delivered by a Purchaser), stamp
taxes and other taxes and duties levied in connection with the
delivery of any Shares to the Purchasers.


 


5.3     Entire
Agreement. The Transaction Documents, together with the
exhibits and schedules thereto, and the Prospectus contain the
entire understanding of the parties with respect to the subject
matter hereof and thereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents,
exhibits and schedules.


 


5.4     Notices.
Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the time of
transmission, if such notice or communication is delivered via
facsimile at the facsimile number or email attachment at the email
address as set forth on the signature pages attached hereto at or
prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the
next Trading Day after the time of transmission, if such notice or
communication is delivered via facsimile at the facsimile number or
email attachment at the email address as set forth on the signature
pages attached hereto on a day that is not a Trading Day or later
than 5:30 p.m. (New York City time) on any Trading Day, (c) the
second (2nd)Trading Day following the date of mailing, if sent by
U.S. nationally recognized overnight courier service or (d) upon
actual receipt by the party to whom such notice is required to be
given. The address for such notices and communications shall be as
set forth on the signature pages attached hereto. To the extent
that any notice provided pursuant to any Transaction Document
constitutes, or contains, material, non-public information
regarding the Company or any Subsidiaries, the Company shall
simultaneously disclose such information in accordance with
applicable law and file such notice with the Commission pursuant to
a Current Report on Form 8-K.


 


5.5     Amendments;
Waivers. No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by the Company and Purchasers
which purchased a majority in interest of the Shares based on the
initial Subscription Amounts hereunder (or, prior to the Closing,
the Company and each of the Purchasers) or, in the case of a
waiver, by the party (or with respect to the Purchasers, a majority
thereof) against whom enforcement of any such waived provision is
sought, provided that if any amendment, modification or waiver
disproportionately and adversely impacts a Purchaser (or group of
Purchasers), the consent of such disproportionately impacted
Purchaser (or group of Purchasers) shall also be required. No
waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of any party to exercise any right
hereunder in any manner impair the exercise of any such
right.


 


5.6     Headings.
The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.


  


5.7     Successors
and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of each
Purchaser (other than by merger). Any Purchaser may assign any or
all of its rights under this Agreement to any Person to whom such
Purchaser assigns or transfers any Shares, provided that such
transferee agrees in writing to be bound, with respect to the
transferred Shares, by the provisions of the Transaction Documents
that apply to the “Purchasers.”


 


5.8     No
Third-Party Beneficiaries. A.G.P. shall be the third party
beneficiaries of the representations and warranties of the Company
in Section 3.1 and the representations and warranties of the
Purchasers in Section 3.2. This Agreement is intended for the
benefit of the parties hereto and their respective successors and
permitted assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person, except as
otherwise set forth in Section 4.8 and this Section
5.8.


 



 







 






 


5.9     Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall
be governed by and construed and enforced in accordance with the
internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all
legal proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any
other Transaction Documents (whether brought against a party hereto
or its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of
New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of
New York, Borough of Manhattan for the adjudication of any dispute
hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any action or
proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such action or proceeding is
improper or is an inconvenient venue for such Proceeding. Each
party hereby irrevocably waives personal service of process and
consents to process being served in any such action or proceeding
by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any other
manner permitted by law. If any party shall commence an action or
proceeding to enforce any provisions of the Transaction Documents,
then, in addition to the obligations of the Company under Section
4.8, the prevailing party in such action or proceeding shall be
reimbursed by the non-prevailing party for its reasonable
attorneys’ fees and other costs and expenses incurred with
the investigation, preparation and prosecution of such action or
proceeding.


 


5.10  
Survival. The
representations and warranties contained herein shall survive the
Closing and the delivery of the Shares for a period of not longer
than two (2) years from the Closing.


 


5.11  
Execution. This
Agreement may be executed in two or more counterparts, all of which
when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by
each party and delivered to each other party, it being understood
that the parties need not sign the same counterpart. In the event
that any signature is delivered by facsimile transmission or by
e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the
same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.


 


5.12  
Severability. If
any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It
is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or
unenforceable.


 


5.13  
Rescission and Withdrawal
Right. Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) any of the other
Transaction Documents, whenever any Purchaser exercises a right,
election, demand or option under a Transaction Document and the
Company does not timely perform its related obligations within the
periods therein provided, then such Purchaser may rescind or
withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in
whole or in part without prejudice to its future actions and
rights.


 


5.14  
Replacement of
Shares. If any certificate or instrument evidencing any
Shares is mutilated, lost, stolen or destroyed, the Company shall
issue or cause to be issued in exchange and substitution for and
upon cancellation thereof (in the case of mutilation), or in lieu
of and substitution therefor, a new certificate or instrument, but
only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction. The applicant for a new
certificate or instrument under such circumstances shall also pay
any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement
Shares.


 


5.15  
Remedies. In
addition to being entitled to exercise all rights provided herein
or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance
under the Transaction Documents. The parties agree that monetary
damages may not be adequate compensation for any loss incurred by
reason of any breach of obligations contained in the Transaction
Documents and hereby agree to waive and not to assert in any action
for specific performance of any such obligation the defense that a
remedy at law would be adequate.


 


5.16  
Payment Set Aside.
To the extent that the Company makes a payment or payments to any
Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or
payments or the proceeds of such enforcement or exercise or any
part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by
or are required to be refunded, repaid or otherwise restored to the
Company, a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, state or
federal law, common law or equitable cause of action), then to the
extent of any such restoration the obligation or part thereof
originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred.


 



 







 






 


5.17  
Independent Nature of
Purchasers’ Obligations and Rights. The obligations of
each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser
shall be responsible in any way for the performance or
non-performance of the obligations of any other Purchaser under any
Transaction Document. Nothing contained herein or in any other
Transaction Document, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as
a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Purchasers are in any way
acting in concert or as a group with respect to such obligations or
the transactions contemplated by the Transaction Documents. Each
Purchaser shall be entitled to independently protect and enforce
its rights including, without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it
shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose. Each Purchaser
has been represented by its own separate legal counsel in its
review and negotiation of the Transaction Documents. For reasons of
administrative convenience only, each Purchaser and its respective
counsel have chosen to communicate with the Company through the
legal counsel of A.G.P. The legal counsel of A.G.P. does not
represent any of the Purchasers and only represents A.G.P. The
Company has elected to provide all Purchasers with the same terms
and Transaction Documents for the convenience of the Company and
not because it was required or requested to do so by any of the
Purchasers. It is expressly understood and agreed that each
provision contained in this Agreement and in each other Transaction
Document is between the Company and a Purchaser, solely, and not
between the Company and the Purchasers collectively and not between
and among the Purchasers.


 


5.18  
Sales During
Pre-Settlement Period. Notwithstanding anything herein to
the contrary, if at any time on or after the time of execution of
this Agreement by the Company and an applicable Purchaser, through,
and including the time immediately prior to the Closing (the
“Pre-Settlement Period”), such Purchaser sells to any
Person all, or any portion, of any Common Stock to be issued
hereunder to such Purchaser at the Closing (collectively, the
“Pre-Settlement Shares”), such Purchaser shall,
automatically hereunder (without any additional required actions by
such Purchaser or the Company), be deemed to be unconditionally
bound to purchase, and the Company shall be deemed unconditionally
bound to sell, such Pre-Settlement Shares to such Purchaser at the
Closing; provided, that the Company shall not be required to
deliver any Pre-Settlement Shares to such Purchaser prior to the
Company’s receipt of the purchase price of such
Pre-Settlement Shares hereunder; and provided further that the
Company hereby acknowledges and agrees that the forgoing shall not
constitute a representation or covenant by such Purchaser as to
whether or not during the Pre-Settlement Period such Purchaser
shall sell any shares of Common Stock to any Person and that any
such decision to sell any shares of Common Stock by such Purchaser
shall solely be made at the time such Purchaser elects to effect
any such sale, if any.


 


5.19   
Saturdays, Sundays,
Holidays, etc.     If the last or
appointed day for the taking of any action or the expiration of any
right required or granted herein shall not be a Business Day, then
such action may be taken or such right may be exercised on the next
succeeding Business Day.


 


5.20  
Currency. Unless
otherwise stated, all dollar amounts and references to
“$” in this Agreement refer to the lawful currency of
the United States.


 


5.21  
Construction. The
parties agree that each of them and/or their respective counsel
have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the
Transaction Documents or any amendments thereto. In addition, each
and every reference to share prices and Common Stock in any
Transaction Document shall be subject to adjustment for reverse and
forward stock splits, stock dividends, stock combinations and other
similar transactions of the Common Stock that occur after the date
of this Agreement.


 


5.22   WAIVER OF JURY
TRIAL. IN
ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.


 


 



(Signature Pages
Follow)


 


 


 


 


 










 






 


IN
WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.


 


 


 


	


ENGLOBAL CORPORATION

	

Address for Notice:


	
 

	
 


	
 

	
 


	

By: /s/
Mark A. Hess              
             
 


     
Name: Mark A. Hess


     
Title: Chief Executive Officer


 

	

ENGlobal
Corporation


654 N.
Sam Houston Parkway E.,


Suite
400


Houston,
Texas 77060-5914


Attention:
Mark A. Hess


E-mail:
mark.hess@englobal.com







 


 


 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE
PAGE FOR PURCHASER FOLLOWS]


 


 


 










 






 


 


[PURCHASER
SIGNATURE PAGES TO ENGLOBAL CORPORATION


 SECURITIES
PURCHASE AGREEMENT]


 


 


IN
WITNESS WHEREOF, the undersigned have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.


 


 


 


	

Name of
Purchaser:

	

 Sabby
Volatility Warrant Master Fund, Ltd.







 


	


Signature of Authorized Signatory of Purchaser:

	

 /s/
Robert Grundstein







 


	

Name of
Authorized Signatory:

	

 Robert
Grundstein







 


	

Title
of Authorized Signatory:

	

 COO
of Purchaser’s Investment Manager







 


	

Email
Address of Authorized Signatory:

	

 rgrundstein@sabbymanagement.com







 


	

Facsimile
Number of Authorized Signatory:

	
 


	
 


	

Address
for Notice to Purchaser: c/o Sabby Management, LLC, 10 Mountainview
Road, Suite 205,


Upper
Saddle River, NJ 07458







 


 


 


Address
for Delivery of Securities to Purchaser (if not same as address for
notice):


Attn:
Client Settlement, Wedbush Securities, 1000 Blvd Ste
850


Los
Angeles, CA 90017. Please include account name and number for
deposit, Sabby Volatility Warrant Master Fund LTD
71793754


 


 


	

Subscription
Amount: $6,666,668.40







 


	

Shares:

	

2,380,953
@ $2.80

	
 







 


	

EIN
Number:

	
 




	
 







 


 










 






[PURCHASER
SIGNATURE PAGES TO ENGLOBAL CORPORATION


 SECURITIES
PURCHASE AGREEMENT]


 


 


IN
WITNESS WHEREOF, the undersigned have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.


 


 


 


	

Name of
Purchaser:

	

 CVI
Investments, Inc., By: Heights Capital Management, Inc., its
authorized agent







 


	


Signature of Authorized Signatory of Purchaser:

	

 /s/
Martin Kobinger







 


	

Name of
Authorized Signatory:

	

Martin
Kobinger







 


	

Title
of Authorized Signatory:

	

Investment
Manager







 


	

Email
Address of Authorized Signatory:

	


kobinger@sig.com and winer@sig.com







 


	

Facsimile
Number of Authorized Signatory:

	
 


	
 


	

Address
for Notice to Purchaser:







c/o
Heights Capital Management, Inc.


101
California Street, Suite 3250 


 


DWAC
for Shares:


 


	
Name of DTC
Participant


	
Merrill Lynch
Professional Clearing Corp


	
DTC Participant
Number


	
5198


	
Account
Name

	
CVI Investments,
Inc.


	
Account
Number

	
11401315D0







 


	

Subscription
Amount: $

	

6,666,668.40

	
 







 


	

Shares:

	

 2,380,953

	
 







 


	

EIN
Number:

	




	
 







 


 


 










 






[PURCHASER
SIGNATURE PAGES TO ENGLOBAL CORPORATION


 SECURITIES
PURCHASE AGREEMENT]


 


 


IN
WITNESS WHEREOF, the undersigned have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.


 


 


 


	

Name of
Purchaser:

	

 Empery
Asset Master, LTD


	
 

	
 







 


 


By:
Empery Asset Management, LP, its authorized agent


 


	


Signature of Authorized Signatory of Purchaser:

	

 /s/
Brett Director







 


	

Name of
Authorized Signatory:

	

 Brett
Director







 


	

Title
of Authorized Signatory:

	

 General
Counsel of Empery Asset Management, LP







 


	

Email
Address of Authorized Signatory:

	

 notices@emperyam.com







 


	

Address
for Notice to Purchaser: c/o Empery Asset Management,
LP


                                                     1
Rockefeller Plaza, Suite 1205


                                                     New
York, NY 10020


 







 


	

Subscription
Amount: $3,455,020.80

	
 

	
 







 


	

Shares:

	

1,233,936 

	
 







 


	

EIN
Number:

	




	
 







 


 










 






[PURCHASER
SIGNATURE PAGES TO ENGLOBAL CORPORATION


 SECURITIES
PURCHASE AGREEMENT]


 


 


IN
WITNESS WHEREOF, the undersigned have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.


 


 


 


	

Name of
Purchaser:

	

 Empery
Tax Efficient, LP


	
 

	
 







 


 


By:
Empery Asset Management, LP, its authorized agent


 


	


Signature of Authorized Signatory of Purchaser:

	

 /s/
Brett Director







 


	

Name of
Authorized Signatory:

	

 Brett
Director







 


	

Title
of Authorized Signatory:

	

 General
Counsel of Empery Asset Management, LP







 


	

Email
Address of Authorized Signatory:

	

 notices@emperyam.com







 


	

Address
for Notice to Purchaser: c/o Empery Asset Management,
LP


                                                     1
Rockefeller Plaza, Suite 1205


                                                     New
York, NY 10020


 







 


	

Subscription
Amount: $

	

1,009,044.40 

	
 







 


	

Shares:

	

 360,373

	
 







 


	

EIN
Number:

	




	
 







 


 










 






[PURCHASER
SIGNATURE PAGES TO ENGLOBAL CORPORATION


 SECURITIES
PURCHASE AGREEMENT]


 


 


IN
WITNESS WHEREOF, the undersigned have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.


 


 


 


	

Name of
Purchaser:

	

 Empery
Tax Efficient III, LP


	
 

	
 







 


 


By:
Empery Asset Management, LP, its authorized agent


 


	


Signature of Authorized Signatory of Purchaser:

	

 /s/
Brett Director







 


	

Name of
Authorized Signatory:

	

 Brett
Director







 


	

Title
of Authorized Signatory:

	

 General
Counsel of Empery Asset Management, LP







 


	

Email
Address of Authorized Signatory:

	

 notices@emperyam.com







 


	

Address
for Notice to Purchaser: c/o Empery Asset Management,
LP


                                                     1
Rockefeller Plaza, Suite 1205


                                                     New
York, NY 10020


 







 


 


	

Subscription
Amount: $

	

2,202,603.20 

	
 







 


	

Shares:

	

 786,644

	
 







 


	

EIN
Number:

	




	
 







 


 


 


 


 










 






 



Exhibit A


 



FORM LOCK-UP AGREEMENT


 


June ,
2021


 


A.G.P./Alliance
Global Partners


590
Madison Avenue, 28th Floor


New
York, New York 10022


 



Re: 

Securities Purchase
Agreement, dated as of June 1, 2021 (the “Purchase
Agreement”), between ENGlobal Corporation (the
“Company”) and the purchasers signatory thereto (each,
a “Purchaser” and, collectively, the
“Purchasers”)





 


Ladies
and Gentlemen:

 


Defined
terms not otherwise defined in this letter agreement (the
“Letter
Agreement”) shall have the meanings set forth in the
Purchase Agreement. Pursuant to Section 2.2(a) of the Purchase
Agreement and in satisfaction of a condition of the Company’s
obligations under the Purchase Agreement, the undersigned
irrevocably agrees with the Company that, from the date hereof
until 60 days following the Closing Date (such period, the
“Restriction
Period”), the undersigned will not offer, sell,
contract to sell, hypothecate, pledge or otherwise dispose of (or
enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash
settlement or otherwise) by the undersigned or any Affiliate of the
undersigned or any person in privity with the undersigned or any
Affiliate of the undersigned), directly or indirectly, or establish
or increase a put equivalent position or liquidate or decrease a
call equivalent position within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended (the
“Exchange
Act”), with respect to, any Common Stock of the
Company or securities convertible, exchangeable or exercisable
into, Common Stock of the Company beneficially owned, held or
hereafter acquired by the undersigned (the “Securities”). Beneficial
ownership shall be calculated in accordance with Section 13(d) of
the Exchange Act. In order to enforce this covenant, the Company
shall impose irrevocable stop-transfer instructions preventing the
transfer agent of the Company from effecting any actions in
violation of this Letter Agreement.


 


Notwithstanding the
foregoing, and subject to the conditions below, the undersigned may
transfer the Securities provided that (1) the Company receives
a signed lock-up letter agreement (in the form of this Letter
Agreement) for the balance of the Restriction Period from each
donee, trustee, distributee, or transferee, as the case may be,
prior to such transfer (2) any such transfer shall not involve
a disposition for value, (3) such transfer is not required to
be reported with the Securities and Exchange Commission in
accordance with the Exchange Act and no report of such transfer
shall be made voluntarily, and (4) neither the undersigned nor
any donee, trustee, distributee or transferee, as the case may be,
otherwise voluntarily effects any public filing or report regarding
such transfers, with respect to transfer:


 



i)


as a
bona fide gift or
gifts;






 



ii)


to any
immediate family member or to any trust for the direct or indirect
benefit of the undersigned or the immediate family of the
undersigned (for purposes of this Letter Agreement,
“immediate family” shall mean any relationship by
blood, marriage or adoption, not more remote than first
cousin);






 



iii)


to any
corporation, partnership, limited liability company, or other
business entity all of the equity holders of which consist of the
undersigned and/or the immediate family of the
undersigned;






 



iv)


if the
undersigned is a corporation, partnership, limited liability
company, trust or other business entity (a) to another corporation,
partnership, limited liability company, trust or other business
entity that is an Affiliate of the undersigned or (b) in the form
of a distribution to limited partners, limited liability company
members or stockholders of the undersigned;






 



v)


if the
undersigned is a trust, to the beneficiary of such trust;
or






 



vi)


by
will, other testamentary document or intestate succession to the
legal representative, heir, beneficiary or a member of the
immediate family of the undersigned.






   



 







 






 


In
addition, notwithstanding the foregoing, this Letter Agreement
shall not restrict the delivery of Common Stock to the undersigned
upon exercise any options granted under any employee benefit plan
of the Company; provided that any Common Stock or other securities
acquired in connection with any such exercise will be subject to
the restrictions set forth in this Letter Agreement.


 


Furthermore, the
undersigned may enter into any new plan established in compliance
with Rule 10b5-1 of the Exchange Act; provided that (i) such plan
may only be established if no public announcement or filing with
the Securities and Exchange Commission, or other applicable
regulatory authority, is made in connection with the establishment
of such plan during the Restriction Period and (ii) no sale of
Common Stock is made pursuant to such plan during the Restriction
Period. For the avoidance of doubt, the undersigned’s plan
established in compliance with Rule 10b5-1 of the Exchange Act
shall be excluded from the restrictions set forth in this Letter
Agreement in all respects.


 


Notwithstanding the
foregoing, the undersigned may transfer the Securities (i) by will
or intestacy, (ii) by operation of law, such as pursuant to a
qualified domestic order, divorce settlement, divorce decree or
separation agreement, (iii) to the Company in connection with the
vesting, settlement, or exercise of restricted stock units,
options, warrants or other rights to purchase shares of Common
Stock (including, in each case, by way of “net” or
“cashless” exercise), including for the payment of
exercise price and tax and remittance payments due as a result of
the vesting, settlement, or exercise of such restricted stock
units, options, warrants or rights or (iv) pursuant to a bona fide
third-party tender offer, merger, consolidation or other similar
transaction that is approved by the Board of Directors of the
Company and made to all holders of the Company’s capital
stock involving a Change of Control (as defined below) of the
Company (for purposes hereof, “Change of Control” shall
mean the transfer (whether by tender offer, merger, consolidation
or other similar transaction), in one transaction or a series of
related transactions, to a person or group of affiliated persons,
of shares of capital stock if, after such transfer, such person or
group of affiliated persons would hold at least a majority of the
outstanding voting securities of the Company (or the surviving
entity)).

 


 


The
undersigned acknowledges that the execution, delivery and
performance of this Letter Agreement is a material inducement to
each Purchaser to complete the transactions contemplated by the
Purchase Agreement and the Company shall be entitled to specific
performance of the undersigned’s obligations hereunder. The
undersigned hereby represents that the undersigned has the power
and authority to execute, deliver and perform this Letter
Agreement, that the undersigned has received adequate consideration
therefor and that the undersigned will indirectly benefit from the
closing of the transactions contemplated by the Purchase
Agreement.


 


This
Letter Agreement may not be amended or otherwise modified in any
respect without the written consent of each of the Company and the
undersigned. This Letter Agreement shall be construed and enforced
in accordance with the laws of the State of New York without regard
to the principles of conflict of laws. The undersigned hereby irrevocably submits to the exclusive
jurisdiction of the United States District Court sitting in the
Southern District of New York and the courts of the State of New
York located in Manhattan, for the purposes of any suit, action or
proceeding arising out of or relating to this Letter Agreement, and
hereby waives, and agrees not to assert in any such suit, action or
proceeding, any claim that (i) it is not personally subject to the
jurisdiction of such court, (ii) the suit, action or proceeding is
brought in an inconvenient forum, or (iii) the venue of the suit,
action or proceeding is improper. The undersigned hereby
irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by
receiving a copy thereof sent to the Company at the address in
effect for notices to it under the Purchase Agreement and agrees
that such service shall constitute good and sufficient service of
process and notice thereof. The undersigned hereby waives any right
to a trial by jury. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted
by law. The undersigned agrees and understands that this Letter
Agreement does not intend to create any relationship between the
undersigned and any Purchaser and that no Purchaser is entitled to
cast any votes on the matters herein contemplated and that no
issuance or sale of the Securities is created or intended by virtue
of this Letter Agreement.

 


This
Letter Agreement shall be binding on successors and assigns of the
undersigned with respect to the Securities and any such successor
or assign shall enter into a similar agreement for the benefit of
the Purchasers.

 


 


 


***
SIGNATURE PAGE FOLLOWS***


 


 










 






 


This
Letter Agreement may be executed in two or more counterparts, all
of which when taken together may be considered one and the same
agreement.


 


 


_________________________


Signature

 


__________________________


Print
Name

 


__________________________


Position
in Company, if any


 


Address
for Notice:


 


 


 


 


 


 


Number
of Common Shares


 


_____________________________________________________________________________


Number
of Common Shares underlying subject to warrants, options,
debentures or other convertible securities

 


 


 


By
signing below, the Company agrees to enforce the restrictions on
transfer set forth in this Letter Agreement.


 



ENGLOBAL CORPORATION


 


 


By:
_________________________________


Name:


Title: