Securities Purchase Agreement dated May 6, 2009 by and among Trey Resources, Inc., SWK Technologies, Inc. Jeffrey D. Roth and Jerome R. Mahoney

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of May 6, 2009, by and among SWK Technologies,  Inc.., a Delaware corporation with offices at 5 Regent Street, Suite 520, Livingston, NJ  07039 (the “Company”), Jeffrey D. Roth, an individual with offices at 5 Regent Street, Suite 520, Livingston, NJ  07039  (the “Buyer”), Jerome R. Mahoney, an individual with offices at 750 Route 34, Matawan, NJ  07747 (“Mahoney”),   and Trey Resources, Inc., a Delaware corporation with offices at 5 Regent Street, Suite 520, Livingston, NJ  07039 (“Trey”).

WHEREAS, the Company and the Buyer(s) are executing and delivering this Agreement in reliance upon an exemption from securities registration pursuant to Section 4(2) and/or Rule 504 of Regulation D (“Regulation D”) as promulgated by the U.S. Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”);

 

WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the Buyer, as provided herein, and the Buyer shall purchase twenty-five newly-issued shares of the Company’s Common Stock (the “Common Stock”), such shares to represent twenty percent (20%) of the outstanding shares of the Company, on a fully-diluted basis,

 

WHEREAS, the purchase price of the Common Stock will be $150,000,

 

WHEREAS, contemporaneously with the execution and delivery of this Agreement and the receipt of payment for the Common Stock, the Company will remit to Trey, the owner of 80% of the fully-diluted outstanding common stock of the Company, the sum of $150,000 as a management fee;

 

WHEREAS, upon receipt of $150,000, Trey will pay Mahoney the sum of One Hundred and Seventeen Thousand and Five Hundred Dollars ($117,500) (the “Mahoney Payment”), such sum to be in full and total satisfaction of any and all outstanding obligations that exist or may exist between Mahoney and Trey.  Such sum shall be allocated first to principal outstanding on a promissory note by and between Mahoney and Trey, second to any interest due and outstanding on such promissory note, and any balance thereafter to deferred and accrued compensation due and owing Mahoney;

 

WHEREAS, upon receipt of $150,000, Trey will pay Meritz & Muenz LLP. (the “Firm”), counsel to Trey, Thirty-two Thousand Dollars ($32,500) , as partial payment of balances due and owing the Firm;

 

NOW, THEREFORE, in consideration of the mutual covenants and other agreements contained in t1is Agreement the Company and the Buyer(s) hereby agree as follows:

 

1. PURCHASE AND SALE OF COMMON STOCK.

 

(a)           Purchase of Common Stock.  Subject to the satisfaction (or waiver) of the terms and conditions of this Agreement, Buyer agrees to purchase at the Closing and the Company agrees to sell and issue to Buyer twenty-five (25) shares of Common Stock, such shares to represent twenty percent (20%) of the outstanding shares of the Company on a fully diluted basis. .

 

(b)           Closing Date.  The Closing of the purchase and sale of the Common Stock shall take place at 10:00 a.m. Eastern Standard Time on May 6, 2009, or such earlier date as is mutually agreed to by Company and the Buyer (the “Closing Date”).  The Closing shall occur on the Closing Date at the offices of the Company at 5 Regent Street, Suite 520, Livingston, NJ 07039 (or such other place as is mutually agreed to by the Company and the Buyer).

 

(c)           Form of Payment.  Subject to the satisfaction of the terms and conditions of this Agreement, on the Closing Date, (i) the Buyer shall deliver to the Company One Hundred Fifty Thousand Dollars ($150,000) (the “Purchase Price”) via wire transfer to an account designated by the Company for the Common Stock to be issued and sold to the Buyer, and (ii) the Company shall deliver to Buyer, stock certificates for twenty-five (25) shares of the Company Common Stock which Buyer is purchasing, duly executed on behalf of the Company.

 

2. BUYER’S REPRESENTATIONS AND WARRANTIES.

 

Buyer represents and warrants that:

 

(a)Investment Purpose.  Buyer is acquiring the Common Stock for its own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act.

 

(b)           Accredited Investor Status.  Buyer is an “Accredited Investor” as that term is defined in Rule 501(a)(5) or Rule 501 (a)(6) of Regulation D.

 

(c)           Reliance on Exemptions.  Buyer understands that the Common Stock is being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of Buyer to acquire such securities.

(d)           Information Regarding Company.  Buyer and his advisors (and his counsel), if any, have been furnished with all materials relating to the business, finances and operations of the Company and information he deemed material to making an informed investment decision regarding his purchase of the Common Stock, which have been requested by Buyer.  Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the Company and its management.    Neither such inquiries nor any other due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend  nor affect such Buyer’s right to rely on the Company’s representations and warranties contained in Section 3 below.  Buyer understands that its investment in the Common Stock involves a high degree of risk.  Buyer is in a position regarding the Company, which, based upon employment with the Company, family relationship or economic bargaining power, enabled and enables Buyer to obtain information from the Company in order to evaluate the merits and risks of this investment.  Buyer has sought such accounting, legal and tax advice, as it has considered necessary to make an informed investment decision with respect to its acquisition of the Common Stock. Nothing in this Section 2(d) shall be a defense to or mitigation of any breach by Buyer of its representations and warranties contained in Section 2 of this Agreement.

 

(e)           Information Regarding Trey.  Buyer and his advisors (and his counsel), if any, have been furnished with materials relating to the business, finances and operations of Trey.  Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the Company and its management.   The Buyer acknowledges that Trey files reports with the Commission pursuant to the Securities Exchange Act of 1934, as amended and therefore its filings with the Commission are available for review at www.sec.gov.  Neither such inquiries nor any other due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend  nor affect such Buyer’s right to rely on the Company’s representations and warranties contained in Section 3 below.  Buyer understands that its investment in the Common Stock involves a high degree of risk.

 

(f)           No Governmental Review.  Buyer 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 Common Stock, or the fairness or suitability of the investment in the Common Stock, nor have such authorities passed upon or endorsed the merits of the offering of the Common Stock.

 

(g)           Transfer or Resale.  Buyer understands that the Common Stock have not been and are not being registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, or (B) Buyer shall have delivered to the Company an opinion of counsel in a form reasonably acceptable to the Company, to the effect that such securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration requirements; (ii) any sale of such securities made in reliance on Rule 144 under the Securities Act (or a successor rule thereto) (“Rule 144”) may be made only in accordance with the terms of Rule 144 and further, if Rule 144 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 defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the Commission thereunder; and (iii) neither the Company nor any other person is under any obligation to register such securities under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.  The Company reserves the right to place stop transfer instructions against the shares and certificates for the Conversion Shares.

 

(h)           Legends.  Buyer understands that the certificates or other instruments representing the Common Stock shall bear a restrictive legend in substantially the following form (and a stop ­transfer order may be placed against transfer of such stock certificates):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

(i)           Authorization, Enforcement.  This Agreement has been duly and validly authorized, executed and delivered on behalf of Buyer and is a valid and binding agreement of Buyer, enforceable in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

 

(j)           Receipt of Documents.  Buyer and his counsel have received and read in their entirety:  (i) this Agreement and each representation, warranty and covenant set forth herein, (ii) all due diligence and other information necessary to verify the accuracy and completeness of such representations, warranties and covenants; and (iii) answers to all questions Buyer submitted to the Company regarding an investment in the Company; and Buyer has relied on the information contained therein and has not been furnished any other documents, literature, memorandum or prospectus.

 

(k)           No Legal Advice From the Company.  Buyer acknowledges that it had the opportunity to review this Agreement and the transactions contemplated by this Agreement with his own legal counsel and investment and tax advisors.  Buyer is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of its representatives or agents for legal, tax or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.

 

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND TREY.

 

The Company represents and warrants to each of the Buyers that:

 

(a)           Organization and Qualification.  The Company is a corporation duly organized and validly existing in good standing under the laws of the jurisdiction in which it is incorporated, and has the requisite corporate power to own its properties and to carry on its business as now being conducted. The Company is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries taken as a whole.