STOCK PURCHASE AGREEMENT BETWEEN WindsorTech, Inc., a Delaware Corporation AND CERTAIN INVESTORS (AS LISTED ON SCHEDULE A) DATED May 18, 2004
Exhibit
4.2
BETWEEN
WindsorTech,
Inc., a Delaware Corporation
AND
CERTAIN
INVESTORS
(AS
LISTED ON SCHEDULE A)
DATED
May
18, 2004
This
STOCK PURCHASE AGREEMENT (the "Agreement")
is
made and entered into as of the 18th
day of
May, 2004 by and among
WindsorTech, Inc., a
corporation organized and existing under the laws of the State of Delaware
(“WindsorTech ” or the “Company”),
and
certain investors, (hereinafter referred to collectively as “Investor”
or
“Investors”)
as
listed on Schedule
A
herein
(each agreement with an Investor being deemed a separate and independent
agreement between the Company and such Investor).
PRELIMINARY
STATEMENT:
WHEREAS,
the
Investors wish to purchase, upon the terms and subject to the conditions of
this
Agreement of Three Million, Six Hundred Thousand Dollars ($3,600,000.00) of
the
Common Stock of the Company with the right, upon the purchase of each share
of
Common Stock, to receive one (1) common stock purchase warrant in accordance
with the terms hereof (each share of Common Stock and corresponding stock
purchase warrant are referred to herein as a “Unit”);
and
WHEREAS,
the
parties intend to memorialize the purchase and sale of such Units;
NOW,
THEREFORE,
in
consideration of the mutual covenants and premises contained herein, and for
other good and valuable consideration, the receipt and adequacy of which are
hereby conclusively acknowledged, the parties hereto, intending to be legally
bound, agree as follows
ARTICLE
I
INCORPORATION
BY REFERENCE, SUPERSEDER AND DEFINITIONS
1.1 Incorporation
by Reference.
The
foregoing recitals, Schedule
A
and the
Exhibits attached hereto and referred to herein, are hereby acknowledged to
be
true and accurate, and are incorporated herein by this reference.
1.2 Superseder.
This
Agreement, to the extent that it is inconsistent with any other instrument
or
understanding among the parties, shall supersede such instrument or
understanding to the fullest extent permitted by law. A copy of this Agreement
shall be filed at the Company’s principal office.
1.3 Certain
Definitions.
For
purposes of this Agreement, the following capitalized terms shall have the
following meanings (all capitalized terms used in this Agreement that are not
defined in this Article 1 shall have the meanings set forth elsewhere in this
Agreement):
1.3.1 “1933
Act”
means
the Securities Act of 1933, as amended.
1.3.2 “1934
Act”
means
the Securities Exchange Act of 1934, as amended.
1.3.3
“Affiliate”
means
that definition as disclosed in the 1933 Act and/or 1934 Act and shall also
mean
a Person or Persons directly or indirectly, through one or more intermediaries,
controlling, controlled by or under common control with the Person(s) in
question. The term “control,” as used in the immediately preceding sentence,
means, with respect to a Person that is a corporation, the right to the
exercise, directly or indirectly, of more than 50 percent of the voting rights
attributable to the shares of such controlled corporation and, with respect
to a
Person that is not a corporation, the possession, directly or indirectly, of
the
power to direct or cause the direction of the management or policies of such
controlled Person.
1.3.4
“Articles”.
The
Articles of Organization of the Company, as the same may be amended from time
to
time.
1.3.5
“Closing
Date”
means
the earlier of May
18, 2004
or upon
all of the conditions of Article VIII and Article IX herein are satisfied,
unless extended by mutual consent by the Company and the Investors on or before
May 28, 2004.
1.3.6
“Common
Stock”
means
the shares of common stock of WindsorTech, Inc., a Delaware Corporation , par
value $0.001 per share.
1.3.7
"Effective
Date"
shall
mean the date the Registration Statement of the Company covering the Shares
being subscribed for hereby is declared effective.
1.3.8
"Material
Adverse Effect"
shall
mean any adverse effect on the business, operations, properties or financial
condition of the Company that is material and adverse to the Company and its
subsidiaries and affiliates, taken as a whole and/or any condition,
circumstance, or situation that would prohibit or otherwise materially interfere
with the ability of the Company to perform any of its material obligations
under
this Agreement or the Registration Rights Agreement or to perform its
obligations under any other material agreement.
1.3.10“Person”
means an
individual, partnership, firm, limited liability company, trust, joint venture,
association, corporation, or any other legal entity.
| 1.3.11 |
“Purchase
Price”
means the purchase price for the
Units.
|
1.3.12 Registration
Rights Agreement"
shall
mean the registration rights agreement between the Investors and the Company
attached hereto as Exhibit
B.
1.3.13 "Registration
Statement"
shall
mean the registration statement under the 1933 Act to be filed with the
Securities and Exchange Commission for the registration of the Shares pursuant
to the Registration Rights Agreement attached hereto as Exhibit
B.
1.3.14 “SEC”
means
the Securities and Exchange Commission.
1.3.15 "SEC
Documents"
shall
mean the Company's latest Form 10-K or 10-KSB as of the time in question, all
Forms 10-Q or 10-QSB and 8-K filed thereafter, and the Proxy Statement for
its
latest fiscal year as of the time in question until such time as the Company
no
longer has an obligation to maintain the effectiveness of a Registration
Statement as set forth in the Registration Rights Agreement.
1.3.16 "Shares"
shall
mean, collectively, the shares of Common Stock of the Company being subscribed
for hereunder and those shares of Common Stock issuable to the Investor upon
exercise of the Warrants.
1.3.17 “Units”
shall
mean the Common Stock and the Warrants collectively.
1.3.18 “Warrants”
shall
mean the Common Stock purchase warrants in the form attached hereto Exhibit
A.
ARTICLE
II
SALE
AND PURCHASE OF WINDSORTECH’S UNITS
AND
PURCHASE PRICE
2.1 Sale
of WindsorTech Units Upon
the
terms and subject to the conditions set forth herein, and in accordance with
applicable law, the Company agrees to sell, and the Investors, severally
and not
jointly, agree to purchase the following Units with an aggregate principal
amount of a minimum of Three Million, Six Hundred Thousand Dollars
($3,600,000.00) in accordance with the commitments set forth on Schedule
A
attached
hereto, at the Purchase Price on the Closing Date, each Unit consisting
of:
2.1.1 Common
Stock
Upon
execution and delivery of this Agreement and the Company’s receipt of the
Purchase Price (as described herein), each Investor shall receive shares
of
Common Stock of the Company at a value of sixty cents ($.60) per share. The
Company shall register those shares of Common Stock pursuant to the terms
and
conditions of a Registration Rights Agreement attached hereto as Exhibit
B.
The
Registration Rights Agreement shall include, but not be limited to, such
terms
and conditions as the immediate registration of the shares of Common Stock
sold
hereunder, one demand right if all the shares of Common Stock sold hereunder
are
not registered or the Registration Statement is subsequently not effective,
unlimited “piggy back” registration rights, and liquidated damages to the
Investor of thirty percent (30%)of the Purchase Price per annum payable on
a
monthly basis if the shares of Common Stock are not registered pursuant to
an
effective Registration Statement within five months of the Closing Date or
if
the shares of Common Stock are registered pursuant to an effective Registration
Statement and such Registration Statement or other Registration Statement
including the shares of Common Stock is not effective in the period from
five
months following the Closing Date through two years following the Closing
Date,
except that the obligation of the Company terminates when the Investor no
longer
holds more than twenty percent (20%) of their shares of Common Stock as acquired
herein.
2.1.2 Warrants
Upon
execution and delivery of this Agreement and the Company’s receipt of the
Purchase Price (as described herein), each Investor shall receive one Warrant
for each share of Common Stock purchased. The Warrants, the form of which are
attached hereto as Composite Exhibit
A
shall
include, but not be limited to, such terms and conditions as a exercise price
of
$1.50 per share for up to 3,000,000 shares of Common Stock, and $3.60 for up
to
3,000,000 shares of Common Stock per share, all share as more particularly
set
forth in the Warrants with an expiration date of five (5) years from the date
of
issuance
2.2 Purchase
Price.
The
purchase price to be paid by each Investor on the Closing Date shall be as
defined section 1.3.5 ($.60) sixty cents per share, as the case may be, in
accordance with on Schedule
A
attached
hereto, and shall be payable in United States Dollars. Payment to the Company
of
the Purchase Price shall be made at the Closing Date by wire transfer of funds
to the account specified by the Company and provided to the Investor.
2.3 Escrow.
The
funds received by Gibraltar Bank (the “Escrow Agent”) in accordance with Section
2.2 of this Agreement shall be held in escrow pursuant to the terms and
conditions of this Section 2.3 of the Agreement. The funds shall be held in
a
non-interest bearing account. The Escrow Agent shall disburse the funds to
the
Company, or as the Company shall in writing direct, upon receipt of written
confirmation to Escrow Agent from WindsorTech and ▇▇▇▇▇▇ Partners, LP pursuant
to the Escrow Agreement of even date herewith, that all closing contingencies
have been met. If the closing of such transaction has not taken place by the
closing date as defined in this Agreement, or the closing date as extended
as
defined in this Agreement, the Escrow Agent shall return such funds to the
Investors immediately and shall return all executed documents to the Company.
The Investors and the Company, jointly and severally, agree to indemnify Escrow
Agent for, and to hold it harmless against, any loss, liability, damage or
expense incurred by Escrow Agent arising out of, or in connection with, this
Agreement, any litigation arising in connection with this Agreement or any
transaction related in any way hereto, including but not limited to attorneys'
fees incurred by Escrow Agent in the event of any question as to the provisions
hereof or its duties hereunder, and other costs and expenses incurred by Escrow
Agent in fulfilling its duties and responsibilities hereunder, or incurred
by
Escrow Agent defending itself against any claim of liability (other than, in
all
such cases, for Escrow Agent’s willful misconduct or gross negligence). Escrow
Agent shall have no duties arising from this Agreement except those expressly
set forth in this Section 2.3 and it shall not be bound by any notice of claim
or demand, or any waiver, modification or amendment unless it shall have given
its prior written consent thereto.
ARTICLE
II
CLOSING
DATE AND DELIVERIES AT CLOSING
3.1
Closing
Date The
closing of the transactions contemplated by this Agreement (the “Closing”),
unless expressly determined herein, shall be held at the offices of the Company,
at at 10:00 a.m.. local time, on the Closing Date or on such other date and
at
such other place as may be mutually agreed by the parties, including closing
by
facsimile with originals to follow.
3.2 Deliveries
by the Company.
In
addition to and without limiting any other provision of this Agreement, the
Company agrees to deliver, or cause to be delivered, to the Investors, the
following:
| (a) |
Within
seven (7) business days of the closing, Certificates representing
WindsorTech Shares, which certificates shall be duly endorsed to
the
Investor(s);
|
| (b) |
At
or prior to Closing, an executed
Agreement;
|
| (c) |
At
or prior to Closing, executed Warrants in the name of the Investor(s)
in
the form attached hereto as Exhibit
A;
|
| (d) |
At
or prior to Closing, an executed Registration Rights Agreement between
the
Investor(s) and the Company in the form attached hereto as Exhibit
B;
|
| (e) |
At
or prior to Closing, confirmation that the provisions of Paragraph
6.6
herein have been satisfied or commenced, as appropriate;
and
|
| (f) |
Such
other documents or certificates as shall be reasonably requested
by the
each Investor or its counsel.
|
| (g) |
Completion
of the acquisition by WindsorTech, Inc. of QualTech International,
Inc.
and QualTech Services Group, Inc., which closing shall occur concurrently
with this closing; it being understood that the proceeds of this
closing
will be used, in part, to fund the QualTech closings.
|
3.3 Deliveries
by Investor.
In
addition to and without limiting any other provision of this Agreement, each
Investor agrees to deliver, or cause to be delivered, to the Company, as
appropriate, the following:
| (a) |
At
or prior to Closing, the Purchase
Price;
|
| (b) |
At
or prior to Closing, an executed
Agreement;
|
| (c) |
At
or prior to Closing, an executed Registration Rights Agreement between
each Investor and the Company in the form attached hereto as Exhibit
B;
and
|
| (d) |
Such
other documents or certificates as shall be reasonably requested
by the
Company or his counsel.
|
In
the
event any document provided to the other party in Paragraphs 3.2 and 3.3 herein
are provided by facsimile, the party shall forward an original document to
the
other party within seven (7) business days. . The Investors by majority of
dollar amount invested may waive any of the Company’s conditions of
closing.
3.4 Further
Assurances.
The
Company and each Investor shall, upon request, on or after the Closing Date,
cooperate with each other (specifically, the Company shall cooperate with each
Investor, and each Investor shall cooperate with the Company, and no Investor
is
required to cooperate with any other Investor) by furnishing any additional
information, executing and delivering any additional documents and/or other
instruments and doing any and all such things as may be reasonably required
by
the parties or their counsel to consummate or otherwise implement the
transactions contemplated by this Agreement
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF WINDSORTECH
WindsorTech
represents and warrants to the Investor(s) (which warranties and representations
shall survive the Closing regardless of what examinations, inspections, audits
and other investigations the Purchaser has heretofore made or may hereinafter
make with respect to such warranties and representations) as follows:
4.1 Organization
and Qualification.
WindsorTech is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware , and has the requisite
corporate power and authority to own, lease and operate its properties and
to
carry on its business as it is now being conducted and is duly qualified to
do
business in any other jurisdiction by virtue of the nature of the businesses
conducted by it or the ownership or leasing of its properties, except where
the
failure to be so qualified will not, when taken together with all other such
failures, have a Material Adverse Effect on the business, operations,
properties, assets, financial condition or results of operation of WindsorTech
and its subsidiaries taken as a whole.
| 4.2 |
Articles
of Incorporation and By-Laws.
The complete and correct copies of WindsorTech’s Articles of Incorporation
and By-Laws, as amended or restated to date which have been filed
with the
Securities and Exchange Commission as of the Closing Date. The Company
will be, prior to closing clarifying its By-laws to eliminate the
possibility of claims that it has or which may relate to staggered
terms
or its board of directors and to eliminate language relating to staggering
terms for its directors. Except for these issues, said Articles of
Incorporation and By-laws are complete and
correct.
|
| 4.3 |
Capitalization.
|
4.3.1
The
authorized and outstanding capital stock of WindsorTech is set forth in
WindsorTech’s Annual Report on Form 10-KSB, filed on March 29, 2004 with the
Securities and Exchange Commission and updated on all subsequent SEC Documents.
All shares of capital stock have been duly authorized and are validly issued,
and are fully paid and no assessable, and free of preemptive
rights.
4.3.2
Except pursuant to this Agreement, and as set forth in WidsorTech ’s Annual
Report on Form 10-KSB, filed on March 29, 2004 with the SEC, as of the date
hereof and as of the Closing Date, there are not now outstanding options,
warrants, rights to subscribe for, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into or exchangeable
for, shares of any class of capital stock of WindsorTech , or agreements,
understandings or arrangements to which WindsorTech is a party, or by which
WindsorTech is or may be bound, to issue additional shares of its capital stock
or options, warrants, scrip or rights to subscribe for, calls or commitment
of
any character whatsoever relating to, or securities or rights convertible into
or exchangeable for, any shares of any class of its capital stock. The Company
agrees to inform the Investors in writing of any additional warrants granted
prior to the Closing Date.
4.3.3
The
Company on the Closing Date (i) will have full right, power, and authority
to
sell, assign, transfer, and deliver, by reason of record and beneficial
ownership, to each Investor, WindsorTech Shares hereunder, free and clear of
all
liens, charges, claims, options, pledges, restrictions, and encumbrances
whatsoever; and (ii) upon delivery of and payment by each Investor of the
Purchase Price to the Company, such Investor will acquire good and marketable
title to such Company Stock, free and clear of all liens, charges, claims,
options, pledges, restrictions, and encumbrances whatsoever.
4.4 Authority.
WindsortTech has all requisite corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions
contemplated
hereby. The execution and delivery of this Agreement by WindsorTech and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action and no other corporate proceedings on the
part
of WindsorTech is necessary to authorize this Agreement or to consummate the
transactions contemplated hereby except as disclosed in this Agreement. This
Agreement has been duly executed and delivered by WindsorTech and constitutes
the legal, valid and binding obligation of WindsorTech , enforceable against
WindsorTech in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium, or other similar laws
affecting the enforcement of creditors' rights generally and general principles
of equity.
4.5 No
Conflict; Required Filings and Consents. The
execution and delivery of this Agreement by WindsorTech does not, and the
performance by WindsorTech of their respective obligations hereunder will not:
(i) conflict with or violate the Articles or By-Laws of WindsorTech ; (ii)
conflict with, breach or violate any federal, state, foreign or local law,
statute, ordinance, rule, regulation, order, judgment or decree (collectively,
"Laws")
in
effect as of the date of this Agreement and applicable to WindsorTech ; or
(iii)
result in any breach of, constitute a default (or an event that with notice
or
lapse of time or both would become a default) under, give to any other entity
any right of termination, amendment, acceleration or cancellation of, require
payment under, or result in the creation of a lien or encumbrance on any of
the
properties or assets of WindsorTech pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which WindsorTech is a party or by WindsorTech
or
any of its properties or assets is bound. Excluding from the foregoing are
such
violations, conflicts, breaches, defaults, terminations, accelerations,
creations of liens, or incumbency that would not, in the aggregate, have a
Material Adverse Effect.
4.6 Report
and Financial Statements.
WindsorTech ’s Annual Report on Form 10-KSB, filed on March 29, 2004 with the
Securities and Exchange Commission contains the audited financial statements
of
WindsorTech as of December 31, 2003 (the “Financial
Statements”).
Each
of the balance sheets contained in or incorporated by reference into any such
Financial Statements (including the related notes and schedules thereto) fairly
presented the financial position of WindsorTech as of its date, and each of
the
statements of income and changes in stockholders’ equity and cash flows or
equivalent statements in such Financial Statements (including any related notes
and schedules thereto) fairly presents and will fairly present the results
of
operations, changes in stockholders’ equity and changes in cash flows, as the
case may be, of WindsorTech for the periods to which they relate, in each case
in accordance with United States generally accepted accounting principles
(“U.S.
GAAP”)
consistently applied during the periods involved, except in each case as may
be
noted therein, subject to normal year-end audit adjustments in the case of
unaudited statements. The books and records of WindsorTech have been, and are
being, maintained in all material respects in accordance with U.S. GAAP and
any
other applicable legal and accounting requirements and reflect only actual
transaction.
STOCK
PURCHASE AGREEMENT BETWEEN
WindsorTech,
Inc. . AND CERTAIN INVESTORS
Page 8 of 264.7 Compliance
with Applicable Laws.
WindsorTech is not in violation of, or, to the knowledge of WindsorTech is
under
investigation with respect to or has been given notice or has been charged
with
the violation of any Law of a governmental agency, except for violations which
individually or in the aggregate do not have a Material Adverse Effect.
4.8 Brokers.
Except
for S Partners, LLC, no broker, finder or investment banker is entitled to
any
brokerage, finder's or other fee or Commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by
or
on behalf of WindsorTech
4.9 SEC
Documents.
WindsorTech acknowledges that WindsorTech is a publicly held company and has
made available to the Investors true and complete copies of any requested SEC
Documents. The Company has registered its Common Stock pursuant to Section
12 of
the 1934 Act, and the Common Stock is listed and traded on the OTC Bulletin
Board Market of the National Association of Securities Dealers, Inc. The Company
has received no notice, either oral or written, with respect to the continued
eligibility of the Common Stock for such listing, and the Company has maintained
all requirements for the continuation of such listing. The Company has not
provided to the Investors any information that, according to applicable law,
rule or regulation, should have been disclosed publicly prior to the date hereof
by the Company, but which has not been so disclosed. As of their respective
dates, the SEC Documents complied in all material respects with the requirements
of the 1934 Act, and rules and regulations of the SEC promulgated thereunder
and
the SEC Documents did 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 light of the circumstances under which
they were made, not misleading that the Investor has received from the Company
reports with the Securities and Exchange Commission and with the NASD.
4.10 Litigation.
To the
knowledge of WindsorTech no litigation, claim, or other proceeding before any
court or governmental agency is pending or threatened against WindsorTech
except: On April 20, 2004, ▇▇▇▇▇ ▇▇▇▇▇▇▇, a former employee and Director of
the
Company initiated suit against the Company seeking a determination as to his
status as a Director and seeking to review certain Company records. The Company
believes it acted properly in Mr. Loppert’s removal. A vast majority of the
Documents sought by Mr. Loppert were in his exclusive possession until
early2004. Further, the Company has on multiple occasions advised Mr. Loppert
that when a proper request (i.e. in the form as required by Delaware statutes)
was received, the Company would make documents available to Mr. Loppert. Despite
repeated correspondence to this effect, Mr. Loppert failed or refused to do
so.
The Company does not know why Mr. Loppert is seeking review of the
documents. The
Company will vigorously defend the claims of Mr. Loppert and does not believe
the suit will have a material adverse impact on the Company.
4.11 Exemption
from Registration.
Subject
to the accuracy of the Investors' representations in Article V, except as
required pursuant to the Registration Rights Agreement, the sale of the Units
will not require registration under the 1933 Act and/or any applicable state
securities law. When validly converted in accordance with the terms of the
Warrants, the Shares underlying the Warrants will be duly and validly issued,
fully paid, and non-assessable. The Company is issuing the Units in accordance
with and in reliance upon the exemption from securities registration afforded,
inter alia, by Rule 506 under Regulation D as promulgated by the SEC under
the
1933, and/or Section 4(2) of the 1933 Act.
STOCK
PURCHASE AGREEMENT BETWEEN
WindsorTech,
Inc. . AND CERTAIN INVESTORS
Page 9 of 264.12 No
General Solicitation or Advertising in Regard to this
Transaction.
Neither
the Company nor any of its Affiliates nor, to the knowledge of the Company,
any
Person acting on its or their behalf (i) has conducted or will conduct any
general solicitation (as that term is used in Rule 502(c) of Regulation
D as
promulgated by the SEC under the ▇▇▇▇ ▇▇▇) or general advertising with respect
to the sale of the Units, or (ii) made any offers or sales of any security
or
solicited any offers to buy any security under any circumstances that would
require registration of the Units, under the 1933 Act, except as required
herein.
4.13 No
Material Adverse Change.
Since
December 31, 2003 , no Material Adverse Effect has occurred or exists with
respect to the Company that has not been disclosed in the SEC Documents. No
material supplier has given notice, oral or written, that it intends to cease
or
reduce the volume of its business with the Company from historical levels.
Since
December 31, 2003 , no event or circumstance has occurred or exists with respect
to the Company or its businesses, properties, prospects, operations or financial
condition, that, under any applicable law, rule or regulation, requires public
disclosure or announcement prior to the date hereof by the Company but which
has
not been so publicly announced or disclosed in writing to the
Investors.
4.14 Material
Non-Public Information.
The
Company has not disclosed to the Investors any material non-public information
that (i) if disclosed, would reasonably be expected to have a material effect
on
the price of the Common Stock or (ii) according to applicable law, rule or
regulation, should have been disclosed publicly by the Company prior to the
date
hereof but which has not been so disclosed.
4.15
Internal
Controls And Procedures.
The
Company maintains books and records and internal accounting controls which
provide reasonable assurance that (i) all transactions to which the Company
or
any subsidiary is a party or by which its properties are bound are executed
with
management's authorization; (ii) the recorded accounting of the Company's
consolidated assets is compared with existing assets at regular intervals;
(iii)
access to the Company's consolidated assets is permitted only in accordance
with
management's authorization; and (iv) all transactions to which the Company
or
any subsidiary is a party or by which its properties are bound are recorded
as
necessary to permit preparation of the financial statements of the Company
in
accordance with U.S. generally accepted accounting principles.
4.16 Full
Disclosure.
No
representation or warranty made by WindsorTech in this Agreement and no
certificate or document furnished or to be furnished to the Purchaser pursuant
to this Agreement contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact necessary to make the
statements contained herein or therein not misleading.
STOCK
PURCHASE AGREEMENT BETWEEN
WindsorTech,
Inc. . AND CERTAIN INVESTORS
Page 10 of 26ARTICLE
V
REPRESENTATIONS
AND WARRANTIES OF THE INVESTORS
Each
Investor, severally and not jointly, as to himself or itself and not as to
any
other Investor, represents and warrants to the Company with the Company
that:
5.1 Organization
and Standing of the Investor.
Where
the Investor is a corporation, such Investor is duly incorporated, validly
existing and in good standing under the laws of the state in which it was
formed. The state in which any offer to purchase shares hereunder was made
or
accepted by such Investor is the state shown as such Investor’s address. If an
entity, the Investor was not formed for the purpose of investing solely in
the
Units the subject of this Agreement.
5.2 Authorization
and Power.
The
Investor has the requisite power and authority to enter into and perform this
Agreement and to purchase the Units being sold to it hereunder. The execution,
delivery and performance of this Agreement by the Investor and the consummation
by the Investor of the transactions contemplated hereby have been duly
authorized by all necessary corporate action where appropriate. This Agreement
and the Registration Rights Agreement have been duly executed and delivered
by
the Investor and at the Closing shall constitute valid and binding obligations
of the Investor enforceable against the Investor in accordance with their terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting generally the enforcement
of, creditors' rights and remedies or by other equitable principles of general
application.
5.3
No
Conflicts.
The
execution, delivery and performance of this Agreement and the consummation
by
the Investor of the transactions contemplated hereby or relating hereto do
not
and will not (i) result in a violation of such Investor's charter documents
or
bylaws where appropriate or (ii) conflict with, or constitute a default (or
an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of any agreement, indenture or instrument to which the Investor
is
a party, or result in a violation of any law, rule, or regulation, or any order,
judgment or decree of any court or governmental agency applicable to the
Investor or its properties (except for such conflicts, defaults and violations
as would not, individually or in the aggregate, have a Material Adverse Effect
on such Investor). The Investor is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court
or
governmental agency in order for it to execute, deliver or perform any of such
Investor’s obligations under this Agreement or to purchase the Units in
accordance with the terms hereof, provided that for purposes of the
representation made in this sentence, the Investor is assuming and relying
upon
the accuracy of the relevant representations and agreements of the Company
herein.
STOCK
PURCHASE AGREEMENT BETWEEN
WindsorTech,
Inc. . AND CERTAIN INVESTORS
Page 11 of 265.4 Financial
Risks.
The
Investor acknowledges that such Investor is able to bear the financial risks
associated with an investment in the Units and that it has been given full
access to such records of the Company and the subsidiaries and to the officers
of the Company and the subsidiaries as it has deemed necessary or appropriate
to
conduct its due diligence investigation. The Investor is capable of evaluating
the risks and merits of an investment in the Units by virtue of its experience
as an investor and its knowledge, experience, and sophistication in financial
and business matters and the Investor is capable of bearing the entire loss
of
its investment in the Units.
5.5 Accredited
Investor.
The
Investor is (i) an “accredited investor” as that term is defined in Rule 501 of
Regulation D promulgated under the 1933 Act by reason of Rule 501(a)(3) and
(6),
(ii) experienced in making investments of the kind described in this Agreement
and the related documents, (iii) able, by reason of the business and financial
experience of its officers (if an entity) and professional advisors (who are
not
affiliated with or compensated in any way by the Company or any of its
affiliates or selling agents), to protect its own interests in connection with
the transactions described in this Agreement, and the related documents, and
(iv) able to afford the entire loss of its investment in the Units.
5.6
Brokers.
Except
for S Partners, LLC, who shall be paid by the Company, no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
Commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Investors.
5.7 Knowledge
of Company.
Each
Investor and such Investor’s advisors, if any, have been, upon request,
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Units. Each
Investor and such Investor’s advisors, if any, have been afforded the
opportunity to ask questions of the Company and have received complete and
satisfactory answers to any such inquiries.
5.8 Risk
Factors
Each
Investor understands that such Investor’s investment in the Units involves a
high degree of risk. Each Investor understands that no United States federal
or
state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Units. Each Investors warrants
that such Investor is able to bear the complete loss of such Buyer’s investment
in the Units.
STOCK
PURCHASE AGREEMENT BETWEEN
WindsorTech,
Inc. . AND CERTAIN INVESTORS
Page 12 of 265.9 Full
Disclosure.
No
representation or warranty made by the Investor in this Agreement and no
certificate or document furnished or to be furnished to WindsorTech pursuant
to
this Agreement contains or will contain any untrue statement of a material
fact,
or omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading. Except as set forth or referred
to
in this Agreement, Investor does not have any
agreement
or understanding with any person relating to acquiring, holding,
voting
or
disposing of any equity securities of the Company.
5.10 Reimbursement
of Due Diligence Expenses.
Upon
closing, the Company shall reimburse Investors for expenses incurred in
conducting due diligence up to an aggregate maximum of $10,000. Such
reimbursement shall be allocated to Investors that provide proof of payment
of
such expenses in a proportional manner. If the transaction is not closed there
shall be no reimbursement of any due diligence expenses.
ARTICLE
VI
COVENANTS
OF THE COMPANY
6.1.
Registration
Rights.
The
Company shall cause the Registration Rights Agreement to remain in full force
and effect and the Company shall comply in all material respects with the terms
thereof.
6.2.
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, shares
of
Common Stock for the purpose of enabling the Company to issue the shares of
Common Stock underlying the Warrants.
6.3.
Listing
Of Common Stock.
The
Company hereby agrees to maintain the listing of the Common Stock on a publicly
trading market. The Company will take all action to continue the listing and
trading of its Common Stock on a publicly traded market and will comply in
all
respects with the Company's reporting, filing and other obligations under the
bylaws or rules of the a publicly traded market.
6.4.
Exchange
Act Registration.
The
Company will cause its Common Stock to continue to be registered under Section
12(b) or (g) of the 1934 Act, will use its best efforts to comply in all
respects with its reporting and filing obligations under the 1934 Act, and
will
not take any action or file any document (whether or not permitted by the 1934
Act or the rules thereunder) to terminate or suspend such registration or to
terminate or suspend its reporting and filing obligations under the 1934 until
the Investors have disposed of all of their Shares or the shares of Common
Stock
underlying the Warrants.
6.5.
Corporate
Existence; Conflicting Agreements.
The
Company will take all steps necessary to preserve and continue the corporate
existence of the Company. The Company shall not enter into any agreement, the
terms of which agreement would restrict or impair the right or ability of the
Company to perform any of its obligations under this Agreement or any of the
other agreements attached as exhibits hereto.
STOCK
PURCHASE AGREEMENT BETWEEN
WindsorTech,
Inc. . AND CERTAIN INVESTORS
Page 13 of 26| 6.6 |
Preferred
Stock. On
or prior to the Closing Date, the Company will cause to be cancelled
all
authorized shares of Preferred Stock of the Company. For a period
of one
year from the closing the Company will not issue any preferred
stock.
|
| 6.7 |
Independent
Directors.
The Company will cause the appointment of at least one independent
director within ninety (90) days. If no such Director is appointed,
the
Company shall pay to the Investors, pro rata, as liquidated damages
and
not as a penalty, an amount equal to ten (10%) of the Purchase Price
per
annum, payable monthly. The parties agree that the only damages payable
for a violation of the terms of this Agreement with respect to which
liquidated damages are expressly provided shall be such liquidated
damages. Nothing shall preclude the Investor from pursuing or obtaining
specific performance or other equitable relief with respect to this
Agreement. The parties hereto agree that the liquidated damages provided
for in this Section 6.6 constitute a reasonable estimate of the damages
that may be incurred by the Investor by reason of the failure of
the
Company to appoint at least two independent directors in accordance
with
the provision hereof.
|
| 6.8 |
Use
of Proceeds.
The Company will use the proceeds from the sale of the Units (excluding
amounts paid by the Company for legal and administrative fees in
connection with the sale of the Units) for acquisitions and/or working
capital.
|
| 6.9 |
Right
of First Refusal.
Each Investor shall have the right to participate in any financing
by the
company on a pro rata basis at eighty percent (80%) of the offering
price.
|
| 6.10 |
Price
Adjustment.
If,
within the 24 months following the Closing Date, the Company closes
on the
sale of a note or notes, shares of Common Stock, or shares of a new
class
of Preferred Stock at a price per share of Common Stock, or with
a
conversion right to acquire Common Stock at a price per share of
Common
Stock, that is less than the Purchase Price (as adjusted to the
capitalization per share as of the Closing Date, following any stock
splits, stock dividends, or the like) (collectively, the “Subsequent
Purchase Price”), the Company shall make a post-Closing adjustment in the
Purchase Price so that the effective price per share paid by the
Investors
at Closing is reduced to the Subsequent Purchase Price as applied
to the
Investors’ then current holdings. Within five business days following the
closing of the subsequent sale, the Company shall pay to the Investors
the
product of the number of Shares owned by Investors on the date of
the
subsequent sale times the difference between the Purchase Price and
the
Subsequent Purchase Price. Payment shall be made in cash or issuance
of
the notes, Preferred Stock, Common Stock, unit offering or whichever
financing is causing the triggering of this provision, at the option
of
each individual Investor.
|
STOCK
PURCHASE AGREEMENT BETWEEN
WindsorTech,
Inc. . AND CERTAIN INVESTORS
Page 14 of 26| 6.11 |
Insider
Selling.
The earliest any “insiders” can start selling their shares shall be one
year from closing. Except that any “insider” may dispose of shares
provided the stock price at the time of dispositions at least: $3.40
per
share for disposition of up to 100,000 shares per “insider” and thereafter
said stock price is at least at $4.80 per share for disposition of
up to
100,000 shares per “insider”. There shall be no further “lock-up” on any
insider dispositions if the stock price shall at any time reach $6.00
per
share
|
ARTICLE
VII
COVENANTS
OF THE INVESTORS
7.1
Compliance
with Law.
The
Investor's trading activities with respect to shares of the Company's Common
Stock will be in compliance with all applicable state and federal securities
laws, rules and regulations and rules and regulations of any public market
on
which the Company's Common Stock is listed.
7.2
Transfer
Restrictions.
The
Investor’s acknowledge that (1) the Shares, Warrants and shares underlying the
Warrants have not been registered under the provisions of the 1933 Act, and
may
not be transferred unless (A) subsequently registered thereunder or (B) the
Investor’s shall have delivered to the Company an opinion of counsel, reasonably
satisfactory in form, scope and substance to the Company, to the effect that
the
Shares, Warrants and shares underlying the Warrants to be sold or transferred
may be sold or transferred pursuant to an exemption from such registration;
and
(2) any sale of the Shares, Warrants and shares underlying the Warrants made
in
reliance on Rule 144 promulgated under the 1933 Act may be made only in
accordance with the terms of said Rule and further, if said Rule is not
applicable, any resale of such Securities under circumstances in which the
seller, or the person through whom the sale is made, may be deemed to be an
underwriter, as that term is used in the 1933 Act, may require compliance with
some other exemption under the 1933 Act or the rules and regulations of the
SEC
thereunder.
7.3
Restrictive
Legend.
The
Investor’s acknowledge and agree that the Shares, and, until such time as the
Shares have been registered under the 1933 Act and sold in accordance with
an
effective Registration Statement, certificates and other instruments
representing any of the Shares shall bear a restrictive legend in substantially
the following form (and a stop-transfer order may be placed against transfer
of
any such Securities):
"THE
SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS AND NEITHER SUCH SHARES NOR ANY INTEREST THEREIN MAY
BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A
REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S, OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT."
STOCK
PURCHASE AGREEMENT BETWEEN
WindsorTech,
Inc. . AND CERTAIN INVESTORS
Page 15 of 267.4
Patriot
Act.
WindsorTech
and Investor certify that they have not been designated, and are owned or
controlled, by a Asuspected
terrorist@
as
defined in Executive Order 13224. The parties seek to comply with all applicable
laws concerning money laundering and related activities. In furtherance of
those
efforts, the parties hereby represent, warrant and agree that: (i) none of
the
cash or property that WindsorTech will use to purchase the Shares or has
been or
shall be derived from, or related to, any activity that is deemed criminal
under
United States law; (ii) no disbursement by WindsorTech to the Investor, to
the
extent within WindsorTech=s
control, shall cause any party to be in violation of the United States Bank
Secrecy Act, the United States International Money Laundering Control Act
of
1986 or the United States International Money Laundering Abatement and
Anti-Terrorist Financing Act of 2001; (iii) Investor has complied with the
United States Bank Secrecy Act, the United States International Money Laundering
Control Act of 1986 and/or the United States International Money Laundering
Abatement and Anti-Terrorist Financing Act of 2001 and Seller=s
business is not derived from, or related to, any activity that is deemed
criminal under United States law. WindsorTech shall promptly notify the Company
if any of these representations ceases to be true and accurate regarding
WindsorTech. WindsorTech agrees to provide the Company any additional
information regarding WindsorTech that the Company deems necessary or convenient
to ensure compliance with all applicable laws concerning money laundering
and
similar activities. The parties understand and agree that if at any time
it is
discovered that any of the foregoing representations are incorrect, or if
otherwise required by applicable law or regulation related to money laundering
similar activities, the parties may undertake appropriate actions to ensure
compliance with applicable law or regulation. The Parties understand that
either
may release information about the other and, if applicable, any underlying
beneficial owners, to proper authorities, in their its
sole
discretion, they determine that it is in the best interests in light of relevant
rules and regulations under the laws set forth in this
section.
STOCK
PURCHASE AGREEMENT BETWEEN
WindsorTech,
Inc. . AND CERTAIN INVESTORS
Page 16 of 26ARTICLE
VIII
CONDITIONS
PRECEDENT TO THE COMPANY’S OBLIGATIONS
The
obligation of the Company to consummate the transactions contemplated hereby
shall be subject to the fulfillment, on or prior to Closing Date, of the
following conditions:
8.1 No
Termination.
This
Agreement shall not have been terminated pursuant to Article X
hereof.
8.2 Representations
True and Correct.
The
representations and warranties of the Investors contained in this Agreement
shall be true and correct in all material respects on and as of the Closing
Date
with the same force and effect as if made on as of the Closing
Date.
8.3 Compliance
with Covenants.
The
Investors shall have performed and complied in all material respects with all
covenants, agreements, and conditions required by this Agreement to be performed
or complied by it prior to or at the Closing Date.
8.4 No
Adverse Proceedings. On
the
Closing Date, no action or proceeding shall be pending by any public authority
or individual or entity before any court or administrative body to restrain,
enjoin, or otherwise prevent the consummation of this Agreement or the
transactions contemplated hereby or to recover any damages or obtain other
relief as a result of the transactions proposed hereby.
ARTICLE
IX
CONDITIONS
PRECEDENT TO INVESTOR’S OBLIGATIONS
The
obligation of the Investors to consummate the transactions contemplated hereby
shall be subject to the fulfillment, on or prior to Closing Date unless
specified otherwise, of the following conditions:
9.1 No
Termination.
This
Agreement shall not have been terminated pursuant to Article X
hereof.
STOCK
PURCHASE AGREEMENT BETWEEN
WindsorTech,
Inc. . AND CERTAIN INVESTORS
Page 17 of 269.2 Representations
True and Correct.
To the
best of WindsorTech’s knowledge, the representations and warranties of
WindsorTech contained in this Agreement shall be true and correct in all
material respects on and as of the Closing Date with the same force and effect
as if made on as of the Closing Date.
9.1 Compliance
with Covenants .
WindsorTech shall have performed and complied in all material respects with
all
covenants, agreements, and conditions required by this Agreement to be performed
or complied by it prior to or at the Closing Date.
9.4 No
Adverse Proceedings. On
the
Closing Date, no action or proceeding shall be pending by any public authority
or individual or entity before any court or administrative body to restrain,
enjoin, or otherwise prevent the consummation of this Agreement or the
transactions contemplated hereby or to recover any damages or obtain other
relief as a result of the transactions proposed hereby.
ARTICLE
X
TERMINATION,
AMENDMENT AND WAIVER
10.1 Termination.
This
Agreement may be terminated at any time prior to the Effective
Time:
10.1.1 by
mutual
written consent of the Investors and the Company;
10.1.2 by
the
Company upon a material breach of any representation, warranty, covenant or
agreement on the part of the Investor set forth in this Agreement, or the
Investor upon a material breach of any representation, warranty, covenant or
agreement on the part of WindsorTech set forth in this Agreement, or if any
representation or warranty of WindsorTech or the Investor, respectively, shall
have become untrue, in either case such that any of the conditions set forth
in
Article VIII or Article IX hereof would not be satisfied (a "Terminating
Breach"),
and
such breach shall, if capable of cure, not have been cured within five (5)
days
after receipt by the party in breach of a notice from the non-breaching party
setting forth in detail the nature of such breach;
10.1.3
by
either party prior to closing, if the Closing Date is after May 28, 2004.
10.2 Effect
of Termination.
In the
event of the termination of this Agreement pursuant to Paragraph 10.1 hereof,
there shall be no liability on the party of WindsorTech or the Investors or
any
of their respective officers, directors, agents or other representatives and
all
rights and obligations of any party hereto shall cease,.
STOCK
PURCHASE AGREEMENT BETWEEN
WindsorTech,
Inc. . AND CERTAIN INVESTORS
Page 18 of 2610.3
Amendment.
This
Agreement may be amended by the parties hereto any time prior to the Closing
Date by an instrument in writing signed by the parties hereto.
10.3 Intentionally
Omitted
ARTICLE
XI
GENERAL
PROVISIONS
11.1 Transaction
Costs.
Except
as otherwise provided herein, each of the parties shall pay all of his or its
costs and expenses (including attorney fees and other legal costs and expenses
and accountants’ fees and other accounting costs and expenses) incurred by that
party in connection with this Agreement.
11.2 Indemnification.
Each
Investor, severally and not jointly agrees to defend and hold the Company
(following the Closing Date) and its officers and directors harmless against
and
in respect of any and all claims, demands, losses, costs, expenses, obligations,
liabilities or damages, including interest, penalties and reasonable attorney’s
fees, that it shall incur or suffer, which arise out of, result from or relate
to any breach of this Agreement by such Investor or failure by such Investors
to
perform with respect to any of its representations, warranties or covenants
contained in this Agreement or in any exhibit or other instrument furnished
or
to be furnished under this Agreement. The Company agrees to defend and hold
the
Investor harmless against and in respect of any and all claims, demands, losses,
costs, expenses, obligations, liabilities or damages, including interest,
penalties and reasonable attorney’s fees, that it shall incur or suffer, which
arise out of, result from or relate to any breach of this Agreement or failure
by the Company to perform with respect to any of its representations, warranties
or covenants contained in this Agreement or in any exhibit or other instrument
furnished or to be furnished under this Agreement.
11.3 Headings.
The
table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of
this Agreement.
11.4 Entire
Agreement.
This
Agreement (together with the Schedule, Exhibits, Warrants and documents referred
to herein) constitute the entire agreement of the parties and supersede all
prior agreements and undertakings, both written and oral, between the parties,
or any of them, with respect to the subject matter hereof.
11.5 Notices.
All
notices and other communications hereunder shall be in writing and shall be
deemed to have been given (i) on the date they are delivered if delivered in
person; (ii) on the date initially received if delivered by facsimile
transmission followed by registered or certified mail confirmation or overnight
courier service; (iii) on the date delivered by an overnight courier service;
or
(iv) on the third business day after it is mailed by registered or certified
mail, return receipt requested with postage and other fees prepaid as
follows:
STOCK
PURCHASE AGREEMENT BETWEEN
WindsorTech,
Inc. . AND CERTAIN INVESTORS
Page 19 of 26|
If
to WindsorTech, Inc. :
|
WindsorTech,
Inc.
|
|
▇▇
▇▇▇▇ ▇▇▇▇▇
|
|
|
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
|
With
a copy to:
|
|
|
|
Burger,
Trailor & ▇▇▇▇▇▇, P.A.
|
|
|
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
|
|
|
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
|
|
|
Telephone
Number: (▇▇▇) ▇▇▇-▇▇▇▇
|
|
|
Facsimile
Number: (▇▇▇) ▇▇▇-▇▇▇▇
|
| If to the Investors: | _____________________________ |
| _____________________________ |
To
the
address listed on Schedule
A
herein
or to the address provided to the Company by an Investor.
11.6 Severability.
If any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon
such
determination that any such term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the extent possible.
STOCK
PURCHASE AGREEMENT BETWEEN
WindsorTech,
Inc. . AND CERTAIN INVESTORS
Page 20 of 2611.7 Binding
Effect.
All the
terms and provisions of this Agreement whether so expressed or not, shall be
binding upon, inure to the benefit of, and be enforceable by the parties and
their respective administrators, executors, legal representatives, heirs,
successors and assignees.
11.8 Preparation
of Agreement.
This
Agreement shall not be construed more strongly against any party regardless
of
who is responsible for its preparation. The parties acknowledge each contributed
and is equally responsible for its preparation.
11.9 Governing
Law.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of Florida , without giving effect to applicable principles of
conflicts of law.
11.10 Jurisdiction.
This
Agreement shall be exclusively governed by and construed in accordance with
the
laws of the State of Florida . If any action is brought among the parties with
respect to this Agreement or otherwise, by way of a claim or counterclaim,
the
parties agree that in any such action, and on all issues, the parties
irrevocably waive their right to a trial by jury. Exclusive jurisdiction and
venue for any such action shall be the State Courts of Florida . In the event
suit or action is brought by any party under this Agreement to enforce any
of
its terms, or in any appeal therefrom, it is agreed that the prevailing party
shall be entitled to reasonable attorneys fees to be fixed by the arbitrator,
trial court, and/or appellate court.
11.11
Preparation
and Filing of Securities and Exchange Commission filings.
Each
Investor shall reasonably assist and cooperate with the Company in the
preparation of all filings with the SEC after the Closing Date due after the
Closing Date.
11.12 Further
Assurances, Cooperation.
Each
party shall, upon reasonable request by the other party, execute and deliver
any
additional documents necessary or desirable to complete the transactions herein
pursuant to and in the manner contemplated by this Agreement. The parties hereto
agree to cooperate and use their respective best efforts to consummate the
transactions contemplated by this Agreement.
11.13 Survival
The
representations, warranties, covenants and agreements made herein shall survive
the Closing of the transaction contemplated hereby.
11.14 Third
Parties
Except
as disclosed in this Agreement, nothing in this Agreement, whether express
or
implied, is intended to confer any rights or remedies under or by reason of
this
Agreement on any persons other than the parties hereto and their respective
administrators, executors, legal representatives, heirs, successors and
assignees. Nothing in this Agreement is intended to relieve or discharge the
obligation or liability of any third persons to any party to this Agreement,
nor
shall any provision give any third persons any right of subrogation or action
over or against any party to this Agreement.
STOCK
PURCHASE AGREEMENT BETWEEN
WindsorTech,
Inc. . AND CERTAIN INVESTORS
Page 21 of 2611.15 Failure
or Indulgence Not Waiver; Remedies Cumulative.
No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty, covenant or
agreement herein, nor shall nay single or partial exercise of any such right
preclude other or further exercise thereof or of any other right. All rights
and
remedies existing under this Agreement are cumulative to, and not exclusive
of,
any rights or remedies otherwise available.
11.16 Counterparts.
This
Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall
be
deemed to be an original, but all of which taken together shall constitute
one
and the same agreement. A facsimile transmission of this signed Agreement shall
be legal and binding on all parties hereto.
STOCK
PURCHASE AGREEMENT BETWEEN
WindsorTech,
Inc. . AND CERTAIN INVESTORS
Page 22 of 26IN
WITNESS WHEREOF,
the
Investors and the Company have as of the date first written above executed
this
Agreement.
WindsorTech,
Inc.
______________________
By:
___________________
Title:__________________
|
_____________________________
|
_______________________________
|
|
Print
Name:
|
Print
Name:
|
|
Entity
(if appropriate):
____________
|
Entity
(if
appropriate):__________________
|
|
______________________________
|
______________________________
|
|
Title:
(if appropriate):____________
|
Title:
(if
appropriate):__________________
|
|
_____________________________
|
_______________________________
|
|
Print
Name:
|
Print
Name:
|
|
Entity
(if appropriate):____________
|
Entity
(if
appropriate):____________
|
|
______________________________
|
______________________________
|
|
Title:
(if appropriate):____________
|
Title:
(if
appropriate):____________
|
STOCK
PURCHASE AGREEMENT BETWEEN
WindsorTech,
Inc. . AND CERTAIN INVESTORS
Page 23 of 26Schedule
A
|
NAME
AND ADDRESS
|
AMOUNT
OF INVESTMENT
|
NUMBER
OF SHARES OF COMMON STOCK
|
NUMBER
OF WARRANTS
|
STOCK
PURCHASE AGREEMENT BETWEEN
WindsorTech,
Inc. . AND CERTAIN INVESTORS
Page 24 of 26Exhibit
A
Form
of Warrant
STOCK
PURCHASE AGREEMENT BETWEEN
WindsorTech,
Inc. . AND CERTAIN INVESTORS
Page 25 of 26Exhibit
B
Registration
Rights Agreement
STOCK
PURCHASE AGREEMENT BETWEEN
WindsorTech,
Inc. . AND CERTAIN INVESTORS
Page 26 of
26ADDENDUM
TO STOCK PURCHASE AGREEMENT
This
ADDENDUM TO STOCK PURCHASE AGREEMENT (the "Agreement")
is
made and entered into as of the
day of
June, 2004 by and among
WindsorTech, Inc., a
corporation organized and existing under the laws of the State of Delaware
(“WindsorTech ” or the “Company”),
and
certain investors, (hereinafter referred to collectively as “Investor”
or
“Investors”)
as
listed on Schedule
A
herein
(each agreement with an Investor being deemed a separate and independent
agreement between the Company and such Investor).
WHEREAS,
the
parties desire to modify certain of the provisions of the Stock Purchase
Agreement made between them as of May 18, 2004;
NOW
THEREFORE,
in
consideration of the mutual covenants and premises contained herein and for
other good and valuable consideration, the receipt and adequacy of which is
hereby conclusively acknowledged, the parties hereto, intending to be legally
bound agree as follows:
1.
Paragraph 6.11 of the STOCK PURCHASE AGREEMENT dated as of May 18, 2004 shall
be
amended to read as follows:
Insider
Selling: The earliest any “insiders” can start selling their shares shall be
one
year
from
closing. Except that any “insider” may dispose of shares provided the stock
price at the time of disposition is at least: $3.40 per share for disposition
of
up to 100,000 shares per “insider” and thereafter said stock price is at least
at $4.80 per share for disposition of up to 100,000 shares per “insider”. There
shall be no further “lock-up” on any insider disposition if the stock price
shall at any time reach $6.00 per share. The Company and investor acknowledge
and agree that the Investor is not an “insider” as such term is used
herein.
2.
Paragraph 7.4 of the Stock Purchase Agreement dated as of May 18, 2004 shall
be
amended to read as follows:
Patriot
Act: WindsorTech
and Investor certify that they have not been designated, and are
not
owned or controlled, by a “suspected terrorist” as defined in Executive Order
13224. The parties seek to comply with all applicable laws concerning money
laundering and related activities. In furtherance of those efforts, Investor
hereby represents, warrants and agrees that: (i) none of the cash or property
that Investor will use to purchase the Shares has been or shall be derived
from,
or related to, any activity that is deemed criminal under United States law;
(ii) no disbursement by Investor to WindsorTech, to the extent within Investor’s
control, shall cause any party to be in violation of the United States Bank
Secrecy Act, the United States International Money Laundering Control Act of
1986 or the United States International Money Laundering Abatement and
Anti-Terrorist Financing Act of 2001; (iii) Investor has complied with the
United States Bank Secrecy Act, the United States International Money Laundering
Control Act of 1986 and/or the United States International Money Laundering
Abatement and Anti-Terrorist Financing Act of 2001 and Investor’s Seller’s
business is not derived from, or related to, any activity that is deemed
criminal under United States law. Investor shall promptly notify WindsorTech
if
any of these representations ceases to be true and accurate regarding Investor.
WindsorTech agrees to provide the Investor any additional information regarding
WindsorTech that the Investor deems necessary or convenient to ensure compliance
with all applicable laws concerning money laundering and similar activities.
The
parties understand and agree that if at any time it is discovered that any
of
the foregoing representations are incorrect, or if otherwise required by
applicable law or regulation related to money laundering similar activities,
the
parties may undertake appropriate actions to ensure compliance with applicable
law or regulation. The Parties understand that either may release information
about the other and, if applicable, any underlying beneficial owners, to proper
authorities, if, in their sole discretion, they determine that it is in the
best
interests in light of relevant rules and regulations under the laws set forth
in
this section.
STOCK
PURCHASE AGREEMENT BETWEEN
WindsorTech,
Inc. . AND CERTAIN INVESTORS
PAGE
1OF
2
3.
This
Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall
be
deemed to be an original, but all of which taken together shall constitute
one
and the same agreement. A facsimile transmission of this signed Agreement shall
be legal and binding on all parties hereto and shall serve as an original.
4. Unless
otherwise modified by the terms and conditions of this Addendum to Stock
Purchase Agreement, the Stock Purchase Agreement shall remain in full force
and
effect.
IN
WITNESS WHEREOF,
the
Investors and the Company have as of the date first written above executed
this
Agreement.
WindsorTech,
Inc.
______________________
By:
___________________
Title:__________________
Investor
________________________________
STOCK
PURCHASE AGREEMENT BETWEEN
WindsorTech,
Inc. . AND CERTAIN INVESTORS
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