EX-10.3 VICIS CAPITAL PURCHASE AGREEMENT



 






EXHIBIT 10.3



SECURITIES PURCHASE AGREEMENT




     This SECURITIES PURCHASE AGREEMENT dated as of September 14, 2007 (this “Agreement”) by and
among Brookside Technology Holdings Corp., a Florida corporation (the “Company”), and Vicis Capital
Master Fund (“Purchaser”).



     In consideration of the foregoing recitals and for good and other valuable consideration
hereinafter set forth, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:



ARTICLE I


PURCHASE AND SALE OF SECURITIES




     1. Purchase and Sale of Series B Convertible Preferred Stock and Series A and B
Warrants.



          a. Subject to the terms and conditions hereof, the Company hereby agrees to issue and sell to
the Purchaser and, in consideration of and in express reliance upon the representations,
warranties, covenants, and terms of this Agreement, Purchaser agrees to purchase from the Company
(i) $3,000,000 shares of Series B Convertible Preferred Stock, par value $.001 per share (the
“Series B Preferred Stock”), having an aggregate stated value of Three Million Dollars ($3,000,000)
and the rights set forth in the Certificate of Designations, Limitations and Preferences attached
hereto as Exhibit A, and (ii) a warrant to purchase 24,000,000 shares of common stock of
the Company in the form and with the terms and provisions attached hereto as Exhibit B (the
“Warrants”), for an aggregate purchase price of Three Million Dollars ($3,000,000) (the “Purchase
Price”).




          b. The closing (the “Closing”) of the transactions contemplated by subsection (a) above shall
take place immediately upon the closing of the Company’s acquisition of US Voice and Data, LLC, an
Indiana limited liability company (the “Acquisition”), such date being referred to herein as the
“Closing Date”.




          c. Subject to the terms and conditions of this Agreement, at the Closing, the Company shall
deliver or cause to be delivered to Purchaser a certificate evidencing its Series B Preferred Stock
and the Warrants. At the Closing, Purchaser shall deliver the Purchase Price by wire transfer of
immediately available funds directly to the Company to an account designated by the Company. The
number of shares of Common Stock issuable to Purchaser upon exercise of the Warrants are referred
to herein collectively as the “Warrant Shares.” Any shares of Common Stock issuable upon conversion
of the Series B Preferred Stock are herein referred to as the “Conversion Shares.” The Series B
Preferred Stock, Warrants, Warrant Shares and Conversion Shares are collectively referred to herein
as the “Securities.”




          d. If the Company shall fail to redeem, or cause a third party to purchase from Purchaser, all
of the Series B Preferred Stock within 90 days of the date hereof as contemplated by the
Certificate of Designation, Michael Dance and Michael Nole shall assign and deliver such number of
shares of common stock of the Company that they own to Purchaser




 









 







as shall be determined by multiplying 20,000,000 by the percentage of the outstanding Series B
Preferred Stock that has not been redeemed by the Company or purchased by a third party.




          e. The Company and the Purchaser are executing and delivering this Agreement in accordance
with and in reliance upon the exemption from securities registration afforded by Section 2(b)(2) of
the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder
(the “Securities Act”), including Regulation D (“Regulation D”), and/or upon such other exemption
from the registration requirements of the Securities Act as may be available with respect to any or
all of the investments to be made hereunder.




ARTICLE II




REPRESENTATIONS AND WARRANTIES




     1. Representations and Warranties of the Company. The Company hereby represents and
warrants to the Purchaser, as of the date hereof and the Closing Date (except as set forth on the
Schedule of Exceptions attached hereto with each numbered Schedule corresponding to the section
number herein), as follows:



          a. Organization, Good Standing and Power. The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Florida and has the requisite
corporate power to own, lease and operate its properties and assets and to conduct its business as
it is 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 or
property owned by it makes such qualification necessary except for any jurisdiction(s) (alone or in
the aggregate) in which the failure to be so qualified will not have a Material Adverse Effect. For
the purposes of this Agreement, “Material Adverse Effect” means any material adverse effect on the
business, operations, properties, prospects, or financial condition of the Company 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 obligations under this Agreement in any material
respect.




          b. Authorization; Enforcement. The Company has the requisite corporate power and authority to
enter into and perform this Agreement, the Warrants, and the Investor Rights Agreement dated as of
the date hereof, substantially in the form of Exhibit C attached hereto (the “Investor
Rights Agreement”) (collectively, the “Transaction Documents”) and to issue and sell the Securities
in accordance with the terms hereof. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by it of the transactions contemplated thereby have
been duly and validly authorized by all necessary corporate action, and no further consent or
authorization of the Company, its Board of Directors or stockholders is required. When executed and
delivered by the Company, each of the Transaction Documents shall constitute a valid and binding
obligation of the Company enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, reorganization, moratorium,
liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the
enforcement of, creditor’s rights and remedies or by other equitable principles of general
application.




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          c. Capitalization. The authorized capital stock and the issued and outstanding shares of
capital stock of the Company as of the Closing Date is as set forth in the Commission Documents (as
defined in Article II Section 1(e) below). All of the outstanding shares of the Common
Stock and any other outstanding security of the Company have been duly and validly authorized.
Except as set forth in this Agreement, the Commission Documents, no shares of Common Stock or any
other security of the Company are entitled to preemptive rights or registration rights and there
are no outstanding options, warrants, scrip, rights to subscribe to, call or commitments of any
character whatsoever relating to, or securities or rights convertible into, any shares of capital
stock of the Company. Furthermore, except as set forth in the Commission Documents or Schedule
1(c), there are no contracts, commitments, understandings, or arrangements by which the Company
is or may become bound to issue additional shares of the capital stock of the Company or options,
securities or rights convertible into shares of capital stock of the Company. Except for customary
transfer restrictions contained in agreements entered into by the Company in order to sell
restricted securities or as provided on Schedule 1(c) hereto, the Company is not a party to
or bound by any agreement or understanding granting registration or anti-dilution rights to any
person with respect to any of its equity or debt securities. Except as set forth on Schedule
1(c), the Company is not a party to, and it has no knowledge of, any agreement or understanding
restricting the voting or transfer of any shares of the capital stock of the Company.




          d. Subsidiaries. Brookside Technology, Inc. currently is the only Subsidiary of the Company.
The Company owns 100% of such Subsidiary. For the purposes of this Agreement, “Subsidiary” shall
mean any corporation or other entity of which at least a majority of the securities or other
ownership interest having ordinary voting power (absolutely or contingently) for the election of
directors or other persons performing similar functions are at the time owned directly or
indirectly by the Company and/or any of its other Subsidiaries.




          e. Securities Filings. The Common Stock of the Company is currently reported on the OTC
Bulletin Board and is registered pursuant to the Securities Exchange Act of 1933, as amended (the
“Exchange Act”), and the Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the Commission pursuant to the reporting requirements of
the Exchange Act (all of the foregoing, including filings incorporated by reference therein, being
referred to herein as the “Commission Documents”). Any Form 10-QSB and Form 10-KSB filings made by
the Company do not contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.




          f. Actions Pending. There is no action, suit, claim, investigation, arbitration, alternate
dispute resolution proceeding or other proceeding pending or, to the knowledge of the Company,
threatened against or involving the Company or any of its respective properties or assets. There
are no outstanding orders, judgments, injunctions, awards or decrees of any court, arbitrator or
governmental or regulatory body against the Company or any officers or directors of the Company in
their capacities as such.




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          g. Compliance with Law. The business of the Company has been and is presently being conducted
in accordance with all applicable federal, state and local governmental laws, rules, regulations
and ordinances.




          h. Taxes. The Company has accurately prepared and filed all federal, state and other tax
returns required by law to be filed by it, has paid or made provisions for the payment of all taxes
shown to be due and all additional assessments, and adequate provisions have been and are reflected
in the financial statements of the Company for all current taxes and other charges to which the
Company is subject and which are not currently due and payable. None of the federal income tax
returns of the Company or any Subsidiary have been audited by the Internal Revenue Service. The
Company has no knowledge of any additional assessments, adjustments or contingent tax liability
(whether federal or state) of any nature whatsoever, whether pending or threatened against the
Company for any period, nor of any basis for any such assessment, adjustment or contingency.




          i. Disclosure. Neither this Agreement or the Schedules hereto nor any other documents,
certificates or instruments furnished by or on behalf of the Company in connection with the
transactions contemplated by this Agreement contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements made herein or therein, in light
of the circumstances under which they were made herein or therein, not misleading.




          j. Employees. Neither the Company nor any Subsidiary has any collective bargaining
arrangements or agreements covering any of its employees. The Company has no employment contract,
agreement regarding proprietary information, non-competition agreement, non-solicitation agreement,
confidentiality agreement, or any other similar contract or restrictive covenant, relating to the
right of any officer, employee or consultant to be employed or engaged by the Company.




          k. Public Utility Holding Company Act and Investment Company Act Status. The Company is not a
“holding company” or a “public utility company” as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended. The Company is not, and as a result of and immediately
upon the Closing will not be, an “investment company” or a company “controlled” by an “investment
company,” within the meaning of the Investment Company Act of 1940, as amended.




          l. ERISA. No liability to the Pension Benefit Guaranty Corporation has been incurred with
respect to any Plan by the Company which has not been satisfied by the Company. As used in this
section, the term “Plan” shall mean an “employee pension benefit plan” (as defined in Section 3 of
ERISA) which is or has been established or maintained, or to which contributions are or have been
made, by the Company or any Subsidiary or by any trade or business, whether or not incorporated,
which, together with the Company or any Subsidiary, is under common control, as described in
Section 2(b)14(b) or (c) of the Code.




          m. Securities Act of 1933. Based in material part upon the representations herein of the
Purchaser, the Company has complied and will comply with all applicable federal and state
securities laws in connection with the offer, issuance and sale of the




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Securities hereunder. Neither the Company nor anyone acting on its behalf, directly or
indirectly, has or will sell, offer to sell or solicit offers to buy any of the Securities or
similar securities to, or solicit offers with respect thereto from, or enter into any negotiations
relating thereto with, any person, or has taken or will take any action so as to bring the issuance
and sale of any of the Securities under the registration provisions of the Securities Act and
applicable state securities laws, and neither the Company nor any of its affiliates, nor any person
acting on its or their behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D under the Securities Act) in connection with the
offer or sale of any of the Securities.




          n. No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf, has directly or indirectly made any offers or sales of any security
or solicited any offers to buy any security under circumstances that would cause the offering of
the Securities pursuant to this Agreement to be integrated with prior offerings by the Company for
purposes of the Securities Act, which would prevent the Company from selling the Securities
pursuant to Regulation D and Rule 506 thereof under the Securities Act, or any applicable
exchange-related stockholder approval provisions, nor will the Company or any of its affiliates or
subsidiaries take any action or steps that would cause the offering of the Securities to be
integrated with other offerings.




          o. Issuance of Securities. The Securities to be issued at the Closing have been duly
authorized by all necessary corporate action and, when paid for or issued in accordance with the
terms hereof, the Securities shall be validly issued and outstanding, free and clear of all liens,
encumbrances and rights of refusal of any kind. When the Conversion Shares and Warrant Shares are
issued and paid for in accordance with the terms of this Agreement and as set forth in the
Warrants, such shares will be duly authorized by all necessary corporate action and validly issued
and outstanding, fully paid and nonassessable, free and clear of all liens, encumbrances and rights
of refusal of any kind and the holders shall be entitled to all rights accorded to a holder of
Common Stock.




          p. No Conflicts. The execution, delivery and performance of the Transaction Documents by the
Company, and the consummation by the Company of the transactions contemplated hereby and thereby,
and the issuance of the Securities as contemplated hereby, do not and will not (i) violate or
conflict with any provision of the Company’s Articles of Incorporation (the “Articles”) or Bylaws
(the “Bylaws”), each as amended to date, or any Subsidiary’s comparable charter documents; (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, mortgage, deed of trust, indenture, note, bond, license, lease
agreement, instrument or obligation to which the Company or any of its Subsidiaries is a party or
by which the Company or any of its Subsidiaries’ respective properties or assets are bound; or
(iii) result in a violation of any federal, state, local or foreign statute, rule, regulation,
order, judgment or decree (including federal and state securities laws and regulations) applicable
to the Company or any of its Subsidiaries or by which any property or asset of the Company or any
of its Subsidiaries are bound or affected, except, in all cases, for such conflicts, defaults,
terminations, amendments, acceleration, cancellations and violations as would not, individually or
in the aggregate, have a Material Adverse Effect (other than violations pursuant to clauses (i) or
(iii) (with respect to federal and




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state securities laws)). Neither the Company nor any of its Subsidiaries is required under
federal, state, foreign or local law, rule or regulation 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 its obligations under the Transaction Documents or issue and
sell the Securities in accordance with the terms hereof (other than any filings, consents and
approvals which may be required to be made by the Company under applicable state and federal
securities laws, rules or regulations or any registration provisions provided in the Investor
Rights Agreement).




     2. Representations and Warranties of the Purchaser. Purchaser hereby represents and
warrants to the Company as follows as of the date hereof and as of the Closing Date:



          a. Organization and Standing of the Purchaser. If the Purchaser is an entity, such Purchaser
is a corporation, limited liability company or partnership duly incorporated or organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or
organization.




          b. Authorization and Power. Purchaser has the requisite power and authority to enter into and
perform the Transaction Documents and to purchase or otherwise acquire the Securities being issued
to it hereunder. The execution, delivery and performance of the Transaction Documents by Purchaser
and the consummation by it of the transactions contemplated hereby have been duly authorized by all
necessary corporate or partnership action, and no further consent or authorization of such
Purchaser, as applicable, or its Board of Directors, stockholders, or partners, as the case may be,
is required. When executed and delivered by the Purchaser, the Transaction Documents shall
constitute valid and binding obligations of Purchaser enforceable against such Purchaser 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, creditor’s rights and remedies or by other
equitable principles of general application.




          c. No Conflict. The execution, delivery and performance of the Transaction Documents by the
Purchaser and the consummation by the Purchaser of the transactions contemplated thereby and hereby
do not and will not (i) violate any provision of the Purchaser’s charter or organizational
documents; (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, mortgage, deed of trust, indenture, note, bond,
license, lease agreement, instrument or obligation to which the Purchaser is a party or by which
the Purchaser’s respective properties or assets are bound; or (iii) result in a violation of any
federal, state, local or foreign statute, rule, regulation, order, judgment or decree (including
federal and state securities laws and regulations) applicable to the Purchaser by which any
property or asset of the Purchaser is bound or affected, except, in all cases, other than
violations pursuant to clauses (i) or (iii) (with respect to federal and state securities laws)
above, for such conflicts, defaults, terminations, amendments, acceleration, cancellations and
violations as would not, individually or in the aggregate, materially and adversely affect the
Purchaser’s ability to perform its obligations under the Transaction Documents.




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          d. Acquisition for Investment. Purchaser is acquiring the Securities solely for its own
account and not with a view to or for sale in connection with distribution. Purchaser does not have
a present intention to sell any of the Securities, or a present arrangement (whether or not legally
binding) or intention to effect any distribution of any of the Securities to or through any person
or entity; provided, however, that by making the representations herein, Purchaser does not agree
to hold the Securities for any minimum or other specific term and reserves the right to dispose of
the Securities at any time in accordance with federal and state securities laws applicable to such
disposition. Purchaser acknowledges that it (i) has such knowledge and experience in financial and
business matters such that Purchaser is capable of evaluating the merits and risks of Purchaser’s
investment in the Company; (ii) is able to bear the financial risks associated with an investment
in the Securities; and (iii) 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.




          e. Rule 144. The Purchaser acknowledges that the shares of the Common Stock subscribed for
hereby have not been registered under the Securities Act of 1933, as amended (the “Act”), or any
applicable state securities laws in reliance upon exemption provisions of the Act and such other
laws; and accordingly, no Federal or state agency has made any recommendation or endorsement as to,
or otherwise passed on the merits of, purchasing the shares. The Purchaser further acknowledges
that there will be no public market for the shares and that it will not be possible to readily
liquidate his or her investment. Because the Common Stock has not been registered under the Act or
state law, the Purchaser must bear the economic risks of investment for an indefinite period of
time and Purchaser understands that the Securities must be held indefinitely unless such Securities
are registered under the Securities Act or an exemption from registration is available. Purchaser
acknowledges that such person is familiar with Rule 144 of the rules and regulations of the
Commission, as amended, promulgated pursuant to the Securities Act (“Rule 144”), and that such
Purchaser has been advised that Rule 144 permits resales only under certain circumstances.
Purchaser understands that, to the extent that Rule 144 is not available, such Purchaser will be
unable to sell any Securities without either registration under the Securities Act or the existence
of another exemption from such registration requirement.




          f. Independent Inquiry. The Purchaser has been given (i) access to all books and records,
legal documents and other material information of the Company; (ii) access to all material
contracts and documents of the Company relating to the sale of the shares and the Company’s
business; and (iii) an opportunity to ask questions of and receive answers from the executive
officers of the Company, regarding the information in (i) and (ii) above. The Purchaser has made
such investigation and examination of the affairs of the Company and has obtained such information
relating thereto as he or she deems necessary to verify the accuracy of the information furnished
to him or her. The Purchaser has received no representation or warranty from any person regarding
the Company or its business or prospects, or the shares or the underlying securities; and the
Purchaser acknowledges that the ability of the Company to achieve its business objective is
uncertain. The Purchaser understands that an investment in the Company is extremely risky and
acknowledges reviewing all of the Risk Factors contained in the Commission Documents. Purchaser
further acknowledge the risk and facts set forth in Schedule 1(c).




          g. General. Purchaser understands that the Securities are being offered and sold in reliance
on a transactional exemption from the registration requirements of federal and




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state securities laws and the Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and understandings of such Purchaser set
forth herein in order to determine the applicability of such exemptions and the suitability of such
Purchaser to acquire the Securities. The information provided to the Company by the Purchaser is
true and accurate and contains no material misstatements. Purchaser understands that no United
States federal or state agency or any government or governmental agency has passed upon or made any
recommendation or endorsement of the Securities. Commencing on the date that the Purchaser were
initially contacted regarding an investment in the Securities, none of the Purchaser has engaged in
any short sale of the Common Stock and will not engage in any short sale of the Common Stock prior
to the consummation of the transactions contemplated by this Agreement.




          h. No General Solicitation. Purchaser acknowledges that the Securities were not offered to
such Purchaser, as applicable, by means of any form of general or public solicitation or general
advertising, or publicly disseminated advertisements or sales literature, including (i) any
advertisement, article, notice or other communication published in any newspaper, magazine, or
similar media, or broadcast over television or radio; or (ii) any seminar or meeting to which such
Purchaser, as applicable, was invited by any of the foregoing means of communications. Purchaser in
making the decision to purchase the Securities, has relied upon independent investigation made by
it and has not relied on any information or representations made by third parties.




          i. Accredited Investor. Purchaser is an “accredited investor” (as defined in Rule 501 of
Regulation D), and such Purchaser has such experience in business and financial matters that it is
capable of evaluating the merits and risks of an investment in the Securities. Such Purchaser is
not required to be registered as a broker-dealer under Section 15 of the Exchange Act and such
Purchaser is not a broker-dealer. Purchaser acknowledges that an investment in the Securities is
speculative and involves a high degree of risk.




          j. Sophistication. The Purchaser has sufficient knowledge and experience in business and
financial matters to evaluate the merits and risks of an investment in the Company and is able to
bear the economic risks inherent in this investment and has the ability, at the present time, to
afford a complete loss of the undersigned’s entire investment in the Company. The Purchaser’s
overall commitment to investments which are not readily marketable is not disproportionate to his
or her net worth in light of his or her business or investments, and the Purchaser’s investment in
the Company will not cause such overall commitment to be disproportionate. The Purchaser has
adequate means of providing for his or her current financial needs and possible personal
contingencies and has no need for liquidity in this investment.




          k. Certain Fees. Purchaser acknowledges that Midtown Partners & Co., LLC will receive certain
placement agent fees in connection with Purchaser’s investment. Purchaser has not employed any
broker or finder or incurred any liability for any brokerage or investment banking fees,
commissions, finders’ structuring fees, financial advisory fees or other similar fees in connection
with the Transaction Documents.




          l. Independent Investment. No Purchaser, as applicable, has agreed to act with any other
Purchaser or third parties for the purpose of acquiring, holding, voting or




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disposing of the Securities purchased hereunder for purposes of Section 13(d) under the
Exchange Act, and Purchaser is acting independently with respect to its investment in the
Securities.




          m.  Regulation M. Purchaser has complied and will comply with Regulation M promulgated under
the Exchange Act with respect to the transactions contemplated by this Agreement.




ARTICLE III




COVENANTS




     The Company covenants with Purchaser as to each provision in this Article III as
follows, which covenants are for the benefit of Purchaser and its permitted assignees.



     1. Securities Compliance. The Company shall notify the Commission in accordance with
its rules and regulations of the transactions contemplated by any of the Transaction Documents and
shall take all other necessary action and proceedings as may be required and permitted by
applicable law, rule and regulation, for the legal and valid issuance of the Securities to the
Purchaser or their respective subsequent holders.



     2. Listing; Filings. The Company will take all action necessary to continue the
listing or trading of its Common Stock on the OTC Bulletin Board or other exchange or market on
which the Common Stock is trading. If required, the Company will promptly file the “Listing
Application” for, or in connection with, the issuance and delivery of the Conversion Shares and the
Warrant Shares. Subject to the terms of the Transaction Documents, the Company further covenants
that it will take such further action as the Purchaser may reasonably request, all to the extent
required from time to time to enable the Purchaser to sell the Securities or shares of Common Stock
without registration under the Securities Act within and subject to the limitations provided by
Rule 144 promulgated under the Securities Act.



     3. Inspection Rights. Provided same would not be in violation of Regulation FD, the
Company shall permit, during normal business hours and upon reasonable request and reasonable
notice, Purchaser, or any employees, agents or representatives thereof, for purposes reasonably
related to such Purchaser’s interests as a stockholder, to examine the publicly available,
non-confidential records and books of account of, and visit and inspect the properties, assets,
operations and business of the Company and any Subsidiary, and to discuss the publicly available,
non-confidential affairs, finances and accounts of the Company and any Subsidiary with any of its
officers, consultants, directors, and key employees.



     4. Compliance with Laws. The Company shall comply, and cause each Subsidiary to
comply, with all applicable laws, rules, regulations and orders, noncompliance with which would be
reasonably likely to have a Material Adverse Effect.



     5. Keeping of Records and Books of Account. The Company shall keep and cause each
Subsidiary to keep adequate records and books of account, in which complete entries will be made in
accordance with GAAP consistently applied, reflecting all financial transactions of the Company and
its Subsidiaries, and in which, for each fiscal year, all proper reserves for



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depreciation, depletion, obsolescence, amortization, taxes, bad debts and other purposes in
connection with its business shall be made.



     6. Other Agreements. The Company shall not enter into any agreement which, by its
terms, would restrict or impair the Company’s or any Subsidiary’s right or ability to perform under
this Article III.



     7. Use of Proceeds. The net proceeds from the sale of the Securities hereunder shall
be used by the Company in its sole discretion, including for the Acquisition and for working
capital and general corporate purposes, including, but not limited to, growth and capital
initiatives, investor and public relations, consulting fees, transaction related fees and payment
of fees due Midtown Partners & Co., LLC.



     8. Reporting Status. For a period of not less than two (2) years after the Closing,
(a) the Company shall timely file all reports required to be filed with the Commission pursuant to
the Exchange Act, and the Company shall not terminate its status as an issuer required to file
reports under the Exchange Act even if the Exchange Act or the rules and regulations thereunder
would permit such termination, and (b) the Company shall retain an investor relations firm,
selected by the Company, which systematically prepares and distributes information to potential
investors about developments in the Company’s business as part of an active investor relations
program.



     9. Transfer Taxes. All applicable sales taxes, documentary transfer taxes, recording
and filing fees, and other costs (but not including, without limitation, any attorney’s fees
incurred by the Company or income, capital gains, intangible or similar taxes) that may be due or
payable as a result of the conveyance or deliver of the Securities to be conveyed and transferred
or other transactions contemplated hereby, whether levied on the Company or the Purchaser shall be
paid by the Company.



     10. Reimbursement of Expenses. At the Closing, the Company shall pay to Purchaser a
non-accountable fee in the amount of $125,000 to reimburse the Purchase for legal and due diligence
expenses.



ARTICLE IV




CLOSING CONDITIONS




     1. Conditions Precedent to the Obligation of the Company to Close and to Sell the
Securities. The obligation hereunder of the Company to close and issue the Securities to the
Purchaser at the Closing is subject to the satisfaction or waiver, at or before the Closing of the
conditions set forth below. These conditions are for the Company’s sole benefit and may be waived
by the Company at any time in its sole discretion.




	 	a.	 	Acquisition. The Acquisition and Financing (as defined in Schedule 1(c) hereto) shall
have been consummated.
	 
	 	b.	 	Accuracy of the Representations and Warranties. The representations and warranties of
Purchaser shall be true and correct in all material respects as of the date when made




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	 	 	 	and as of the Closing Date as though made at that time, except for representations and
warranties that are expressly made as of a particular date, which shall be true and correct
in all material respects as of such date.






	 	c.	 	Performance by the Purchaser. Purchaser shall have performed, satisfied and complied in
all material respects with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Purchaser at or prior to the
Closing Date.
	 
	 	d.	 	No Injunction. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any court or
governmental authority of competent jurisdiction which prohibits the consummation of any of
the transactions contemplated by this Agreement.
	 
	 	e.	 	Delivery of Purchase Price. The Purchase Price for the Securities shall have been
delivered to the Company on the Closing Date.
	 
	 	f.	 	Delivery of Transaction Documents. The Transaction Documents shall have been duly
executed and delivered to the Company by the Purchasers.





     2. Conditions Precedent to the Obligation of the Purchaser to Close and to Acquire the
Securities. The obligation hereunder of the Purchaser to purchase or acquire the Securities and
consummate the transactions contemplated by this Agreement is subject to the satisfaction or
waiver, at or before the Closing, of each of the conditions set forth below. These conditions are
for the Purchaser’s sole benefit and may be waived by the Purchaser at any time, in its sole
discretion.



          a. 
Acquisition. The Acquisition and Financing (as defined in Schedule 1(c) hereto) shall have
been consummated.




          b. Accuracy of the Company’s Representations and Warranties. Each of the representations and
warranties of the Company in this Agreement and the other Transaction Documents shall be true and
correct in all material respects as of the Closing Date, except for representations and warranties
that speak as of a particular date, which shall be true and correct in all material respects as of
such date.




          c. Performance by the Company. The Company shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Company at or prior to the Closing Date.




          d. No Suspension, Etc. Trading in the Common Stock shall not have been suspended by the
Commission or the OTC Bulletin Board.




          e. No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of
competent jurisdiction which prohibits the consummation of any of the transactions contemplated by
this Agreement.




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          f.  Investor Rights Agreement. As of the Closing Date, the Company shall have executed and
delivered the Investor Rights Agreement to each Purchaser.




ARTICLE V




CERTIFICATE LEGEND




     1. Legend. Each certificate representing the Securities shall be stamped or otherwise
imprinted with a legend substantially in the following form (in addition to any legend required by
applicable state securities or “blue sky” laws):



THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR
ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES
LAWS OR THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT REGISTRATION OF
SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE
STATE SECURITIES LAWS IS NOT REQUIRED.



The Company agrees to issue or reissue certificates representing any of the Conversion Shares and
the Warrant Shares, without the legend set forth above if, at such time, prior to making any
transfer of any such Conversion Shares or Warrant Shares, such holder thereof shall give written
notice to the Company describing the manner and terms of such transfer and removal as the Company
may reasonably request. Such proposed transfer and removal will not be effected until: (a) either
(i) the Company has received an opinion of counsel reasonably satisfactory to the Company, to the
effect that the registration of the Conversion Shares or Warrant Shares under the Securities Act is
not required in connection with such proposed transfer, or (ii) the Company has received other
evidence reasonably satisfactory to the Company that such registration and qualification under the
Securities Act and state securities laws are not required; and (b) either (i) the Company has
received an opinion of counsel reasonably satisfactory to the Company, to the effect that
registration or qualification under the securities or “blue sky” laws of any state is not required
in connection with such proposed disposition or (ii) compliance with applicable state securities or
“blue sky” laws has been effected. In the case of any proposed transfer under this section, the
Company will use reasonable efforts to comply with any such applicable state securities or “blue
sky” laws, but shall in no event be required, (x) to qualify to do business in any state where it
is not then qualified, (y) to take any action that would subject it to tax or to the general
service of process in any state where it is not then subject, or (z) to comply with state
securities or “blue sky” laws of any state for which registration by coordination is unavailable to
the Company. The restrictions on transfer contained in this section shall be in addition to, and
not by way of limitation of, any other restrictions on transfer contained in any other section of
this Agreement.



ARTICLE VI




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INDEMNIFICATION




     1. General Indemnity. The Company agrees to indemnify, defend and hold harmless the
Purchaser (and their respective directors, officers, affiliates, agents, successors and assigns)
from and against any and all losses, liabilities, deficiencies, costs, damages and expenses
(including, without limitation, reasonable attorneys’ fees, charges and disbursements) incurred by
the Purchaser as a result of any inaccuracy in or breach of the representations, warranties or
covenants made by the Company herein. Purchaser agrees to indemnify and hold harmless the Company
and its directors, officers, affiliates, agents, successors and assigns from and against any and
all losses, liabilities, deficiencies, costs, damages and expenses (including, without limitation,
reasonable attorneys’ fees, charges and disbursements) incurred by the Company as result of any
inaccuracy in or breach of the representations, warranties or covenants made by such Purchaser
herein.



     2. Indemnification Procedure. Any party entitled to indemnification under this
Article VI (an “indemnified party”) will give written notice to the indemnifying party of
any matter giving rise to a claim for indemnification; provided, that the failure of any party
entitled to indemnification hereunder to give notice as provided herein shall not relieve the
indemnifying party of its obligations under this Article VI except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In case any such action,
proceeding or claim is brought against an indemnified party in respect of which indemnification is
sought hereunder, the indemnifying party shall be entitled to participate in and, unless in the
reasonable judgment of the indemnifying party a conflict of interest between it and the indemnified
party exists with respect to such action, proceeding or claim (in which case the indemnifying party
shall be responsible for the reasonable fees and expenses of one separate counsel for the
indemnified parties), to assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. In the event that the indemnifying party advises an indemnified party that it
will contest such a claim for indemnification hereunder, or fails, within thirty (30) days of
receipt of any indemnification notice to notify, in writing, such person of its election to defend,
settle or compromise, at its sole cost and expense, any action, proceeding or claim (or
discontinues its defense at any time after it commences such defense), then the indemnified party
may, at its option, defend, settle or otherwise compromise or pay such action or claim. In any
event, unless and until the indemnifying party elects in writing to assume and does so assume the
defense of any such claim, proceeding or action, the indemnified party’s costs and expenses arising
out of the defense, settlement or compromise of any such action, claim or proceeding shall be
losses subject to indemnification hereunder. The indemnified party shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any such action or claim by the
indemnifying party and shall furnish to the indemnifying party all information reasonably available
to the indemnified party which relates to such action or claim. The indemnifying party shall keep
the indemnified party fully apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. If the indemnifying party elects to defend any such action or
claim, then the indemnified party shall be entitled to participate in such defense with counsel of
its choice at its sole cost and expense. The indemnifying party shall not be liable for any
settlement of any action, claim or proceeding effected without its prior written consent.
Notwithstanding anything in this Article VI to the contrary, the indemnifying party shall
not, without the indemnified party’s prior written consent, settle or compromise any claim or
consent to entry of any judgment in respect thereof which imposes any future obligation on the



13









 







indemnified party or which does not include, as an unconditional term thereof, the giving by
the claimant or the plaintiff to the indemnified party of a release from all liability in respect
of such claim. The indemnification obligations to defend the indemnified party required by this
Article VI shall be made by periodic payments of the amount thereof during the course of
investigation or defense, as and when bills are received or expense, loss, damage or liability is
incurred, so long as the indemnified party shall refund such moneys if it is ultimately determined
by a court of competent jurisdiction that such party was not entitled to indemnification. The
indemnity agreements contained herein shall be in addition to (a) any cause of action or similar
rights of the indemnified party against the indemnifying party or others, and (b) any liabilities
the indemnifying party may be subject to pursuant to the law. No indemnifying party will be liable
to the indemnified party under this Agreement to the extent, but only to the extent that a loss,
claim, damage or liability is attributable to the indemnified party’s breach of any of the
representations, warranties or covenants made by such party in this Agreement or in the other
Transaction Documents.



ARTICLE VII




MISCELLANEOUS




     1. TO RESIDENTS OF FLORIDA: THE INTEREST OFFERED HEREIN HAVE NOT BEEN REGISTERED WITH
THE FLORIDA DIVISION OF SECURITIES. PURSUANT TO FLORIDA STATUTES, SECTION 517.061(11) (A) (5),
INVESTORS MAY ELECT, WITHIN THREE (3) BUSINESS DAYS AFTER DELIVERY OF THEIR SUBSCRIPTION AGREEMENT
AND THE PURCHASE PRICE FOR THE INTEREST, TO WITHDRAW THEIR SUBSCRIPTION AND RECEIVE A FULL REFUND
(WITHOUT INTEREST) OF SUCH PURCHASE PRICE. THIS WITHDRAWAL WILL BE WITHOUT ANY FURTHER LIABILITY TO
ANY PERSON. TO ACCOMPLISH SUCH WITHDRAWAL, AN INVESTOR SHOULD SEND A LETTER INDICATING THE
INTENTION TO WITHDRAW, POSTMARKED PRIOR TO THE END OF THE THIRD BUSINESS DAY AFTER DELIVERY OF
FUNDS TO THE PARTNERSHIP, RETURN RECEIPT REQUESTED, TO THE COMPANY AT THE ADDRESS SET FORTH HEREIN.
ANY ORAL REQUESTS FOR RESCISSION SHOULD BE ACCOMPANIED BY A REQUEST FOR WRITTEN CONFIRMATION THAT
THE ORAL REQUEST WAS RECEIVED ON A TIMELY BASIS.



     2. Fees and Expenses. Each party shall pay the fees and expenses of its advisors,
counsel, accountants and other experts, if any, and all other expenses, incurred by such party
incident to the negotiation, preparation, execution, delivery and performance of this Agreement.



     3. Governing Law; Consent to Jurisdiction; Venue. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of Florida, without giving effect
to any of the conflicts of law principles which would result in the application of the substantive
law of another jurisdiction. This Agreement shall not be interpreted or construed with any
presumption against the party causing this Agreement to be drafted. The parties agree that venue
for any dispute arising under this Agreement will lie exclusively in the state or federal courts
located in Hillsborough County, Florida, and the parties irrevocably waive any right to raise forum
non conveniens or any other argument that Florida is not the proper venue. The



14









 







parties irrevocably consent to personal jurisdiction in the state and federal courts of the
state of Florida. Each party hereto consent to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address in effect for notices to it under
this Agreement and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing in this section shall affect or limit any right to serve process in any
other manner permitted by law. The parties hereto hereby agree that the prevailing party in any
suit, action or proceeding arising out of or relating to the Securities, this Agreement or the
other Transaction Documents, shall be entitled to reimbursement for reasonable legal fees from the
non-prevailing party. The parties hereby waive all rights to a trial by jury.



     4. Entire Agreement; Amendment. This Agreement and the Transaction Documents contain
the entire understanding and agreement of the parties with respect to the matters covered hereby
and they supersede all prior understandings and agreements with respect to said subject matter, all
of which are merged herein. No provision of this Agreement may be waived or amended other than by a
written instrument signed by the Company and the Purchaser.



     5. Notices. All notices and other communications given or made pursuant to this
Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to
the party to be notified; (b) when sent by confirmed electronic mail or facsimile if sent during
normal business hours of the recipient, and if not so confirmed, then on the next business day; (c)
five (5) days after having been sent by registered or certified mail, return receipt requested,
postage prepaid; or (d) one (1) business day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt. All communications
shall be sent to the respective parties at their address as set forth on the signature page or
Exhibit A hereto, or to such address or facsimile number as subsequently modified by
written notice given in accordance with this section.


All notices to the Company shall be sent to:



Brookside Technology Holdings Corp.

7703 N. Lamar Boulevard

Suite 500

Austin, Texas 78752

Attn: Michael Nole, Chief Executive Officer

Facsimile: (813) 854-1045



If to Purchaser:



126 East 56th Street

Tower 56, Suite 700

New York, NY 10022



Any party hereto may from time to time change its address for notices by giving written notice of
such changed address to the other parties hereto.




     6. Waivers. No waiver by any party of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing waiver in the



15









 







future or a waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.



     7. Headings. The article, section and subsection headings in this Agreement are for
convenience only and shall not constitute a part of this Agreement for any other purpose and shall
not be deemed to limit or affect any of the provisions hereof.



     8. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and assigns. After the Closing, the assignment by a
party to this Agreement of any rights hereunder shall not affect the obligations of such party
under this Agreement.



     9. No Third Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective permitted successors and assigns and is not for the benefit of,
nor may any provision hereof be enforced by, any other person.



     10. Survival. The representations and warranties shall survive the execution and
delivery hereof and the Closing.



     11. Counterparts. This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument and shall become effective when
counterparts have been signed by each party and delivered to the other parties hereto, it being
understood that all parties need not sign the same counterpart.



     12. Severability. The provisions of this Agreement are severable and, in the event
that any court of competent jurisdiction shall determine that any one or more of the provisions or
part of the provisions contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not
affect any other provision or part of a provision of this Agreement and this Agreement shall be
reformed and construed as if such invalid or illegal or unenforceable provision, or part of such
provision, had never been contained herein, so that such provisions would be valid, legal and
enforceable to the maximum extent possible.



[Remainder of this page intentionally left blank; Signature page follows]




16









 








[Signature page to Securities Purchase Agreement]




     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
stated.



	 	 	 	 	 
	Brookside Technology Holdings Corp.

 	 
	By:  	 	 
	 	Michael Nole, Chief Executive Officer 	 
	 	 	 	 
	 



	 	 	 	 	 
	PURCHASER OF SERIES B PREFERRED STOCK




Vicis Capital Master Fund

 	 
	By:  	 	 
	 	Keith Hughes, authorized representative of Vicis Capital LLC and Vicis Capital Master Fund 
	 	 	 	 



17









 






	 	 	 	 	 



Exhibit A




Certificate of Designations, Limitations and Preferences




18









 





Exhibit B




Form of Series D Warrant




19









 





Exhibit C




Form of Investors Rights Agreement




20









 





Schedule 1(c)





     The Company is currently negotiating to acquire US Voice and Data, LLC, an Indiana limited
liability company and it is anticipated that a portion of the purchase price will consist of shares
of common stock of the Company and that the Company will be required to register the resale thereof
(the “Acquisition”). Further, the Company currently is negotiating financing, including senior debt
from Hilco Financial, LLC, and it is anticipated that the Company will issue securities, including
warrants to purchase common stock, to such investors/lenders, who may also require registration
rights to consummate such financings (the “Financing”). It is anticipate the Acquisition and
Financing shall close on September 14, 2007, but there can be no assurances in this regard.




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