EXHIBIT 4.5
SECURITIES PURCHASE AGREEMENT
BY AND BETWEEN
TONTINE CAPITAL PARTNERS, L.P.
AND
ENGLOBAL CORPORATION
SEPTEMBER ___, 2005
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TABLE OF CONTENTS
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Page
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ARTICLE 1
Definitions.........................................................1
ARTICLE 2 Purchase and Sale of
Shares.........................................3
2.1 Purchase
of Shares...............................................3
2.2 Purchase
Price and Form of Payment; Delivery.....................3
2.3 Closing
Date.....................................................3
ARTICLE 3 Buyer's Representations and
Warranties..............................3
3.1
Organization and
Qualification...................................3
3.2
Authorization;
Enforcement.......................................3
3.3 Securities
Matters...............................................4
3.4
Information......................................................4
3.5
Restrictions on
Transfer.........................................4
ARTICLE 4 Representations and Warranties of
the Company.......................5
4.1
Organization and
Qualification...................................5
4.2
Authorization;
Enforcement.......................................5
4.3
Capitalization; Valid Issuance of
Shares.........................5
4.4 No
Conflicts.....................................................6
4.5 SEC
Documents; Financial Statements..............................7
4.6 Absence of
Certain Changes.......................................7
4.7 Absence of
Litigation............................................8
4.8 Patents,
Copyrights..............................................8
4.9 Tax
Status.......................................................8
4.10
Permits;
Compliance..............................................8
4.11
Environmental
Matters............................................9
4.12
Title to
Property...............................................10
4.13
No
Investment Company or Real Property Holding Company..........10
4.14
No
Brokers......................................................10
4.15
Registration
Rights.............................................10
4.16
Exchange Act
Registration.......................................10
4.17
Labor
Relations.................................................11
4.18
Transactions with Affiliates and
Employees......................11
4.19
Insurance.......................................................11
4.20
Application of Takeover
Protections.............................11
4.21
Disclosure......................................................11
ARTICLE 5
Covenants..........................................................12
5.1 Form D;
Blue Sky Laws...........................................12
5.2 Use of
Proceeds.................................................12
5.3
Expenses........................................................12
5.4
Listing.........................................................12
5.5 No
Integration..................................................12
5.6
Restriction on Short
Sales......................................12
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ARTICLE 6 Conditions To The Company's
Obligation.............................13
6.1 Delivery
of Transaction Documents...............................13
6.2 Payment of
Purchase Price.......................................13
6.3
Representations and
Warranties..................................13
6.4
Litigation......................................................13
ARTICLE 7 Conditions to Each Buyer's
Obligation..............................13
7.1 Delivery
of Transaction Documents; Issuance of Shares...........13
7.2
Representations and
Warranties..................................13
7.3
Consents........................................................14
7.4
Litigation......................................................14
7.5
Opinion.........................................................14
7.6 No
Material Adverse Change......................................14
7.7 Board
Approval..................................................14
ARTICLE 8
Indemnification....................................................14
8.1
Indemnification by the
Company..................................14
8.2
Notification....................................................14
ARTICLE 9 Governing Law;
Miscellaneous.......................................15
9.1 Governing
Law...................................................15
9.2
Counterparts; Electronic
Signatures.............................15
9.3
Headings........................................................15
9.4
Severability....................................................15
9.5 Entire
Agreement; Amendments....................................15
9.6
Notices.........................................................16
9.7 Successors
and Assigns..........................................17
9.8 Third
Party Beneficiaries.......................................17
9.9
Publicity.......................................................17
9.10
Further
Assurances..............................................17
9.11
No
Strict Construction..........................................17
9.12
Rights
Cumulative...............................................17
9.13
Survival........................................................17
9.14
Knowledge.......................................................17
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SECURITIES PURCHASE AGREEMENT
This SECURITIES
PURCHASE AGREEMENT, dated as of September ___, 2005, is
entered into by and among ENGLOBAL
CORPORATION, a Nevada corporation (the
"Company"), and TONTINE CAPITAL PARTNERS,
L.P., a Delaware limited partnership
(the "Buyer").
RECITALS:
A. The Company
and the Buyer are executing and delivering this Agreement in
reliance upon the exemptions from
securities registration afforded by Section
4(2) of the 1933 Act and Rule 506;
B. The Buyer
desires to purchase and the Company desires to issue and sell,
upon the terms and conditions set forth in
this Agreement, 2,000,000 shares of
common stock, par value $0.001 per share of
the Company;
C. Certain
members of the Company's management are, substantially
simultaneously with the sale of the Shares
pursuant to this Agreement, offering
up to 1,000,000 shares of Common Stock to
other individuals and entities
pursuant to separate subscription
agreements (the "Secondary Offering"); and
D.
Contemporaneous with the execution and delivery of this Agreement,
the
parties hereto and the purchasers in the
Secondary Offering are executing and
delivering a Registration Rights Agreement,
in the form attached hereto as
Exhibit A, pursuant to which the Company
has agreed under certain circumstances
to register the resale of the Shares under
the 1933 Act and the rules and
regulations promulgated thereunder, and
applicable state securities laws.
AGREEMENT
NOW THEREFORE,
the Company and the Buyer hereby agree as follows:
ARTICLE 1
DEFINITIONS
"2005 SEC
Documents" has the meaning set forth in Section 3.4.
"Action" means
any action, suit claim, inquiry, notice of violation,
proceeding (including any partial
proceeding such as a deposition) or
investigation against or affecting the
Company, any of its Subsidiaries or any
of their respective properties before or by
any court, arbitrator, governmental
or administrative agency, regulatory
authority (federal, state, county, local or
foreign), public board, stock market, stock
exchange or trading facility.
"Agreement"
means this Securities Purchase Agreement.
"Buyer" has the
meaning set forth in the preamble.
"Common Stock"
means the Company's common stock, par value $0.001 per
share.
"Company" has
the meaning set forth in the preamble.
"Closing" has
the meaning set forth in Section 2.3.
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"Closing Date"
means September [__], 2005 or such other time as may be
mutually agreed upon by the parties to this
Agreement.
"Environmental
Laws" has the meaning set forth in Section 4.11.
"Hazardous
Materials" has the meaning set forth in Section 4.11.
"Intellectual
Property" has the meaning set forth in Section 4.8.
"Investment
Company" has the meaning set forth in Section 4.13.
"Legal
Requirement" means any federal, state, local, municipal,
foreign,
international, multinational or other law,
rule, regulation, order, judgment,
decree, ordinance, policy or directive,
including those entered, issued, made,
rendered or required by any court,
administrative or other governmental body,
agency or authority, or any arbitrator.
"Material
Adverse Effect" means any material adverse effect on the
business, operations, assets, financial
condition or prospects of the Company.
"1933 Act" means
the Securities Act of 1933, as amended.
"1934 Act" means
the Securities Exchange Act of 1934, as amended.
"Permits" has
the meaning set forth in Section 4.10.
"Placement
Agents" has the meaning set forth in Section 4.14
"Purchase Price"
means a price of $7.00 per share for the Shares to be
issued and sold to the Buyer at the
Closing.
"Registration
Rights Agreement" means the Registration Rights Agreement
executed and delivered contemporaneously
with the Agreement pursuant to which
the Company has agreed under certain
circumstances to register the resale of the
Shares under the 1933 Act and the rules and
regulations promulgated thereunder,
and applicable state securities laws.
"Rule 506" means
Rule 506 of Regulation D promulgated under the 1933 Act.
"SEC" means the
United States Securities and Exchange Commission.
"SEC Documents"
has the meaning set forth in Section 4.5.
"Shares" means
the 2,000,000 shares of Common Stock being issued and sold
under the Agreement.
"Subsidiaries"
means, with respect to the Company, ENGlobal Corporate
Services, Inc., a Texas corporation,
ENGlobal Constant Power, Inc., a Texas
corporation, ENGlobal Engineering, Inc., a
Texas corporation, ENGlobal Systems,
Inc., a Texas corporation, ENGlobal
Construction Resources, Inc., a Texas
corporation, RPM Engineering, Inc., d/b/a
ENGlobal Engineering, Inc., a
Louisiana corporation, ENGlobal Automation
Group, Inc., a Texas corporation,
ENGlobal Canada ULC, a Nova Scotia
unlimited liability company, ENGlobal Design
Group, Inc., a Texas corporation,
Thermaire, Inc., a Texas corporation, PEI
Investments JV, a Texas joint venture, and
EPIC ENGlobal, LLC, a Texas limited
liability company.
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"Transaction
Documents" means this Agreement, the Registration Rights
Agreement, and any other documents
contemplated by this Agreement.
"Transfer
Instructions" has the meaning set forth in Section 2.2.
ARTICLE 2
PURCHASE AND SALE OF SHARES
2.1 Purchase of
Shares. Subject to the terms and conditions of this
Agreement, on the Closing Date, the Company
shall issue and sell the Shares and
the Buyer shall purchase the Shares from
the Company.
2.2 Purchase
Price and Form of Payment; Delivery. On the Closing Date the
Buyer shall pay $7.00 per share for the
Shares to be issued and sold to it at
the Closing. The Purchase Price shall be
paid by wire transfer of immediately
available funds in accordance with the
Company's written instructions. At the
Closing, upon payment of the Purchase Price
therefore by the Buyer, the Company
will deliver irrevocable written
instructions ("Transfer Instructions") to the
transfer agent for the Company's Common
Stock to issue certificates representing
the Shares registered in the name of the
Buyer and to deliver such certificates
to or at the direction of the Buyer. The
Company shall not have the power to
revoke or amend the Transfer Instructions
without the written consent of the
Buyer.
2.3 Closing
Date. Subject to the satisfaction (or written waiver) of the
conditions set forth in Article 6 and
Article 7 below, the closing of the
transactions contemplated by this Agreement
shall be held on September [__],
2005, or such other time as may be mutually
agreed upon by the parties to this
Agreement, at the offices of Jenkens &
Gilchrist, 1401 McKinney, Suite 2600,
Houston, Texas 77010 or at such other
location or by such other method
(including exchange of signed documents) as
may be mutually agreed upon by the
parties to this Agreement ("Closing").
ARTICLE 3
BUYER'S REPRESENTATIONS AND WARRANTIES
The Buyer
represents and warrants to the Company that:
3.1 Organization
and Qualification. The Buyer is a limited partnership duly
organized, validly existing and in good
standing under the laws of the state of
Delaware, with full power and authority to
purchase the Shares.
3.2
Authorization; Enforcement. This Agreement and each of the
other
Transaction Documents and the consummation
of the transactions contemplated
hereby and thereby have been duly and
validly authorized by, and duly executed
and delivered on behalf of, the Buyer. This
Agreement and each of the other
Transaction Documents constitutes the valid
and binding agreement of the Buyer
enforceable in accordance with its terms,
except as such enforceability may be
limited by: (i) applicable bankruptcy,
insolvency, reorganization, moratorium or
other similar laws in effect that limit
creditors' rights generally; (ii)
equitable limitations on the availability
of specific remedies; and (iii)
principles of equity.
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3.3 Securities
Matters. In connection with the Company's compliance with
applicable securities laws:
a. The Buyer understands that the Shares are being offered and sold
to
it in reliance
upon specific exemptions from the registration requirements
of United States
and state securities laws and that the Company is relying
upon the truth
and accuracy of, and the Buyer's compliance with, the
representations,
warranties, agreements, acknowledgments and understandings
of the Buyer set
forth herein in order to determine the availability of
such exemption
and the eligibility of the Buyer to acquire the Shares.
b. The Buyer is purchasing the Shares for its own account, not as
a
nominee or
agent, for investment purposes and not with a present view
towards resale,
except pursuant to sales exempted from registration under
the 1933 Act, or
registered under the 1933 Act as contemplated by the
Registration
Rights Agreement.
c. The Buyer is an "accredited investor" as that term is defined
in
Rule 501(a) of
Regulation D under the 1933 Act, and has such knowledge and
experience in
financial and business matters as to be capable of evaluating
the merits and
risks of an investment in the Shares. The Buyer understands
that its
investment in the Shares involves a significant degree of risk.
The Buyer
understands that no United States federal or state agency or
any
other government
or governmental agency has passed upon or made any
recommendation
or endorsement of the Shares.
3.4 Information.
The Buyer has conducted its own due diligence examination
of the Company's business, financial
condition, results of operations, and
prospects. In connection with such
investigation, Buyer and its representatives
(i) have reviewed the Company's most recent
annual report on Form 10-K, the
Company's quarterly reports on Form 10-Q
for the two most recently concluded
interim periods, the Company's proxy
statement on Schedule 14A filed on April
29, 2005, the Company's Registration
Statement on Form S-8 filed on August 24,
2005, and the Company's Current Reports on
Form 8-K filed on January 31, 2005,
March 31, 2005, and August 12, 2005
(collectively, the "2005 SEC Documents"),
and (ii) have been given an opportunity to
ask questions, to the extent Buyer
considered necessary, and have received
answers from, officers of the Company
concerning the business, finances and
operations of the Company and information
relating to the offer and sale of the
Shares.
3.5 Restrictions
on Transfer. The Buyer understands that except as provided
in the Registration Rights Agreement, the
issuance of the Shares has not been
and is not being registered under the 1933
Act or any applicable state
securities laws. The Buyer may be required
to hold the Shares indefinitely and
the Shares may not be transferred unless
(i) the Shares are sold pursuant to an
effective registration statement under the
1933 Act, or (ii) the Buyer shall
have delivered to the Company an opinion of
counsel to the effect that the
Shares to be sold or transferred may be
sold or transferred pursuant to an
exemption from such registration, which
opinion shall be reasonably acceptable
to the Company. The Buyer understands that
until such time as the resale of the
Shares has been registered under the 1933
Act as contemplated by the
Registration Rights Agreement or otherwise
may be sold pursuant to an exemption
from registration, certificates evidencing
the Shares may bear a restrictive
legend in substantially the following form
(and a stop-transfer order may be
placed against transfer of the certificates
evidencing such Shares):
"THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR THE
SECURITIES LAWS OF ANY STATE AND HAVE BEEN ISSUED IN RELIANCE
UPON EXEMPTIONS
AFFORDED UNDER APPLICABLE LAWS. THE SECURITIES
REPRESENTED BY
THIS CERTIFICATE MAY NOT BE OFFERED, SOLD,
HYPOTHECATED,
TRANSFERRED OR OTHERWISE ASSIGNED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE ACT AND
APPLICABLE STATE
SECURITIES LAWS, OR AN APPLICABLE EXEMPTION (AS TO
WHICH THE ISSUER
SHALL BE REASONABLY SATISFIED, INCLUDING RECEIPT OF
AN ACCEPTABLE
LEGAL OPINION) FROM THE REGISTRATION REQUIREMENTS OF
SUCH LAWS."
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set
forth in the Company's Disclosure Schedule attached hereto,
the Company represents and warrants to the
Buyer that:
4.1 Organization
and Qualification. The Company has no subsidiaries other
than the Subsidiaries. The Company and each
of its Subsidiaries is a
corporation, limited partnership, limited
liability company, unlimited liability
company or joint venture, as applicable,
duly organized, validly existing and in
good standing under the laws of the
jurisdiction in which it is incorporated or
organized, with corporate or limited
partnership power and authority to own,
lease, use and operate its properties and
to carry on its business as now
operated and conducted. The Company and
each of its Subsidiaries is duly
qualified as a foreign corporation or
limited partnership to do business and is
in good standing in each jurisdiction in
which its ownership or use of property
or the nature of the business conducted by
it makes such qualification
necessary, except where the failure to be
so qualified or in good standing would
not have a Material Adverse Effect. Neither
the Company nor any Subsidiary is in
violation of any provision of its
respective certificate or articles of
incorporation, partnership agreement,
bylaws or other organizational or charter
documents, as the same may have been
amended.
4.2
Authorization; Enforcement. The Company has all requisite
corporate
power and authority to enter into and
perform this Agreement and each of the
other Transaction Documents and to
consummate the transactions contemplated
hereby and thereby and to issue the Shares,
in accordance with the terms hereof
and thereof. 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 (including without limitation, the
issuance of the Shares) have been duly
authorized by the Company's Board of
Directors and no further consent or
authorization of the Company, its Board of
Directors, or its shareholders is required.
This Agreement and each of the other
Transaction Documents have been duly
executed and delivered by the Company. This
Agreement and each of the other Transaction
Documents will constitute upon
execution and delivery by the Company, a
legal, valid and binding obligation of
the Company enforceable against the Company
in accordance with its terms, except
as such enforceability may be limited by:
(i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar
laws in effect that limit creditors'
rights generally; (ii) equitable
limitations on the availability of specific
remedies; (iii) principles of equity
(regardless of whether such enforcement is
considered in a proceeding in law or in
equity); and (iv) to the extent rights
to indemnification and contribution may be
limited by federal securities laws or
the public policy underlying such laws.
4.3
Capitalization; Valid Issuance of Shares. As of the date hereof,
the
authorized capital stock of the Company
consists of 75,000,000 shares of Common
Stock, of which 23,966,283 shares are
issued and outstanding, and 652,377 shares
are held by the Company as treasury shares,
and 2,265,167 shares of preferred
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stock, $.001 par value, all of which are
designated as Series A redeemable
convertible preferred stock, and none of
which are outstanding. All of such
outstanding shares of Common Stock are duly
authorized, validly issued, fully
paid and nonassessable. The Shares have
been duly authorized and when issued
pursuant to the terms hereof will be
validly issued, fully paid and
nonassessable and will not be subject to
any encumbrances, preemptive rights or
any other similar contractual rights of the
shareholders of the Company or any
other person. No shares of capital stock of
the Company are subject to
preemptive rights or any other similar
rights of the shareholders of the Company
or any liens or encumbrances imposed
through the actions or failure to act of
the Company. As of the date hereof, the
Company had outstanding options to
purchase 1,399,355 shares of Common Stock,
as well as 2,086,769 shares of Common
Stock that may be issued under its Employee
Stock Purchase Plan. As of the date
of this Agreement, except to the extent
described in the preceding sentence and
Schedule 4.3 attached hereto, (i) there are
no outstanding options, warrants,
scrip, rights to subscribe for, puts,
calls, rights of first refusal,
agreements, understandings, claims or other
commitments or rights of any
character whatsoever relating to, or
securities or rights convertible into or
exchangeable for any shares of capital
stock of the Company or any of its
Subsidiaries, or arrangements by which the
Company or any of its Subsidiaries is
or may become bound to issue additional
shares of capital stock, (ii) there are
no agreements or arrangements under which
the Company or any of its Subsidiaries
is obligated to register the sale of any of
its or their securities under the
1933 Act (except the Registration Rights
Agreement) and (iii) there are no
anti-dilution or price adjustment
provisions contained in any security issued by
the Company (or in any agreement providing
rights to security holders) that will
be triggered by the issuance of the Shares.
Except as may be described in any
documents which have been publicly filed by
any of the Company's shareholders,
to the Company's knowledge, there are no
agreements between the Company's
shareholders with respect to the voting or
transfer of the Company's capital
stock or with respect to any other aspect
of the Company's affairs.
4.4 No
Conflicts. The execution, delivery and performance of this
Agreement
and each of the other Transaction Documents
by the Company and the consummation
by the Company of the transactions
contemplated hereby and thereby (including,
without limitation, the issuance of Shares)
will not (i) conflict with or result
in a violation of any provision of the
Restated Articles of Incorporation, as
amended, of the Company or the bylaws, as
amended, of the Company, (ii) violate
or conflict with, or result in a breach of
any provision of, or constitute a
default (or an event which with notice or
lapse of time or both could become a
default) under, or give to others any
rights of termination, amendment,
acceleration or cancellation of, any
material agreement, indenture, patent,
patent license or instrument to which the
Company or any of its Subsidiaries is
a party, or (iii) result in a violation of
any Legal Requirement (including
federal and state securities laws and
regulations and regulations of any
self-regulatory organizations to which the
Company or its securities are
subject) applicable to the Company or any
of its Subsidiaries or by which any
property or asset of the Company or any of
its Subsidiaries is bound or affected
(except for such conflicts, defaults,
terminations, amendments, accelerations,
cancellations and violations as would not,
individually or in the aggregate,
have a Material Adverse Effect). Neither
the Company nor any of its Subsidiaries
is in violation of its Certificate or
Articles of Incorporation, bylaws or other
organizational documents and neither the
Company nor any of its Subsidiaries is
in default (and no event has occurred which
with notice or lapse of time would
result in a default) under, and neither the
Company nor any of its Subsidiaries
has taken any action or failed to take any
action that would give to others any
rights of termination, amendment,
acceleration or cancellation of, any agreement
or instrument to which the Company or any
of its Subsidiaries is a party or by
which any property or assets of the Company
or any of its Subsidiaries is bound
or affected, except for possible defaults
as would not, individually or in the
aggregate, have a Material Adverse Effect.
Except with respect to any additional
listing applications and other filings
related to the listing of the Shares to
be filed with the American Stock Exchange
as specifically contemplated by this
Agreement and as required under the 1933
Act and any applicable state securities
laws, the Company is not required to obtain
any consent, authorization or order
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of, or make any filing or registration
with, any court, governmental agency,
regulatory agency, self regulatory
organization or stock market or any third
party in order for it to execute, deliver
or perform any of its obligations
under the Transaction Documents. All
consents, authorizations, orders, filings
and registrations that the Company is
required to effect or obtain pursuant to
the preceding sentence have been obtained
or effected on or prior to the date
hereof.
4.5 SEC
Documents; Financial Statements.
a. Since December 31, 2003, the Company has timely filed all
reports,
schedules, forms, statements and other
documents required to be filed by it with
the SEC pursuant to the reporting
requirements of the 1933 Act and the 1934 Act
(all of the foregoing filed prior to the
date hereof and all exhibits included
therein and financial statements and
schedules thereto and documents (other than
exhibits to such documents) incorporated by
reference therein, being hereinafter
referred to herein as the "SEC Documents"),
or has timely filed for a valid
extension of such time of filing and has
filed any such SEC Documents prior to
the expiration of any such extension. As of
their respective dates, the SEC
Documents complied in all material
