September 1, 2017

 

SECURED PROMISSORY NOTE

(Principal Sum: Up to $1,500,000)

 

FOR VALUE RECEIVED, Digiliti Money, Inc., a Minnesota corporation (the “Payor”
or the “Company”), which is a wholly-owned subsidiary of Digiliti Money Group,
Inc., a Delaware corporation (the “Guarantor”), both with an address at delFive
Business Park G, 18671 Lake Drive East, Minneapolis, MN 55317, agrees to pay to
the order of UFT Equities Inc., a Delaware corporation with an address at 75
Broad Street, Suite 2410, New York, NY 10004 (the “Noteholder”; the
“Noteholder”, the “Company” and the “Guarantor”, collectively, the “Parties”, or
each individually, a “Party”), on the Maturity Date set forth in Paragraph “(A)”
of Article “8” of this Secured Promissory Note (the “Note”), unless earlier
accelerated in accordance with the terms of this Note, the Principal Sum (as
defined in Article “1” of this Note) and accrued and unpaid Interest (as defined
in Article “2” of this Note”).

 

1. Principal.

 

The Principal Sum shall be an amount of up to one million five hundred thousand
($1,500,000) dollars.

 

The Noteholder shall, subject to the terms of this Note advance to the Payor the
Principal Sum for a ninety (90) day period (the “Initial Period”) from the date
of this Note, with no less than four hundred fifty thousand ($450,000) dollars
(the “Initial Drawdown”) of the Principal Sum within three (3) calendar days
after the execution of this Note; provided, however that if any such date is not
a Business Day in the State of New York, then the Initial Drawdown shall be
advanced on the next Business Day.

 

All or any of the remaining drawdowns during the Initial Period shall be
pursuant to a drawdown in equal portions of $350,000 per request on the 30th day
of each month after the date of this Note. The proceeds shall be used in
accordance with mutually agreed expenses.

 

Upon the closing of the proposed merger, share exchange, asset acquisition or
similar transaction between the Parties (the “Proposed Merger”), the Company
may, from time to time, request additional advances of up to $6,500,000
(“Additional Advances”) prior to the Maturity Date, pursuant to a separate
secured promissory note to be entered by and among the Parties upon the similar
terms and condition as those set forth in this Note.

 

The Noteholder agrees to tender the amounts of each drawdown request to the
Payor by wire transfer pursuant to Payor’s wiring instruction.

 

If a definitive agreement with respect to the Proposed Merger is not entered
into on or prior to September 30, 2017 or such later date as agreed upon by the
parties in writing, the obligations of the Noteholder to make future advances
pursuant to this Note shall terminate with immediate effect.

 

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2. Interest.

 

The unpaid principal amount of this Note outstanding shall bear interest (the
“Interest”) from the date of this Note until paid in full, at the rate of six
(6%) percent per annum, calculated on the basis of a year of 365 days (the
“Interest Rate”) and shall be payable on the Maturity Date.

 

Upon the occurrence and during the continuance of an Event of Default (as
defined in Article “9” of this Note), the Payor shall pay to the Noteholder
accrued Interest at the rate of sixteen (16%) percent per annum, calculated on
the basis of a year of 365 days for each day that an Event of Default exists.

 

3. Interest Rate Limitation.

 

It is the intent of the Noteholder and the Payor by the execution of this Note
that the loan evidenced hereby comply with the restrictions of applicable state
usury laws. If, for any reason, it should be determined that any usury law is
applicable, the Payor and the Noteholder stipulate and agree that (A) the
interest (or any other consideration pursuant to this Note) pursuant to this
Note or in any other instrument evidencing or securing the indebtedness
evidenced here shall be limited to the maximum permitted by such law, (B) none
of the terms and provisions contained in this Note shall ever be construed to
create a contract for the use, forbearance or detention of money requiring
payment of interest at a rate in excess of the maximum interest rate permitted
to be charged by any state laws which are applicable, (C) the obligation of the
Payor shall be reduced to the maximum rate permitted to be charged by any state
laws which are applicable and (D) the Noteholder shall not collect monies which
would otherwise increase the effective interest rate on this Note to a rate in
excess of the maximum rate permitted to be charged by any such applicable state
law. Any sums collected which are in excess of such maximum rate shall be
credited to the payment of any other sums due hereunder. If no sums are due
hereunder, then such excess shall be returned to the Payor.

 

4. Security Interest.

 

As security for the prompt and complete payment and performance in full of all
of the Payor’s obligations pursuant to this Note (including, but not limited to,
the payment of all unpaid Principal and accrued Interest), and any other
obligations or liabilities of the Payor to the Noteholder, the Payor and the
Guarantor hereby grant to the Noteholder a security interest pursuant to the
terms of a separate security agreement (the “Security Agreement”) being executed
simultaneously with this Note, which shall be in a form attached to, and made
part of, this Note as Exhibit “A”.

 

5. Guarantee.

 

As a material inducement for the Noteholder to make the loan to the Payor
pursuant to this Note, the Guarantor shall execute a guarantee (the “Guarantee”)
simultaneously with this Note, which provides that the Guarantor absolutely,
unconditionally, irrevocably, and without limitation guarantees to the
Noteholder the prompt and full payment and other performance of all of the
obligations owed by the Payor to the Noteholder pursuant to this Note, which
shall be in a form attached to, and made part of, this Note as Exhibit “B”.

 

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6. Operation of the Company and the Guarantor.

 

Prior to the Maturity Date, each of the Company and the Guarantor shall continue
its business as and, without the prior written consent of the Noteholder, shall
not engage in any transactions outside of the ordinary course of business
including, but not limited to, selling, leasing, transferring, or assigning any
material assets, tangible or intangible; entering into any material agreement,
contract, lease, or license; making any material expenditures of its capital;
declaring, set aside, or paying any dividend or making any distributions, except
in the ordinary course of its business and to pay taxes.

 

7. Right to Appoint Director.

 

The Noteholder shall have the right to designate one (1) director to the Board
of Directors of the Guarantor (the “Board”) immediately upon funding of the
Initial Drawdown in the amount of $450,000 pursuant to Article “1” of this Note
for one full term. The Noteholder shall have the right to said Board designee as
long as the any or all of the unpaid Principal and accrued Interest remain
outstanding.

 

8. Maturity Date/Prepayment.

 

(A) All unpaid Principal Sum and accrued Interest pursuant to this Note shall be
due and payable on October 1, 2018 (the “Maturity Date”).

 

(B) The Payor may not, without the prior written consent of the Noteholder,
prepay all or any part of the Principal Sum of this Note.

 

9. Events of Default

 

The term “Event of Default” as used herein shall mean the occurrence of any one
or more of these following events; For the purpose of this Note, “material”
shall mean any one or more related defaults pursuant to this Note which results
in any monetary loss of the Noteholder equal to or greater than an aggregate of
ten thousand ($10,000) dollars.

 

(A) The Payor shall fail to pay the principal or its accrued and unpaid interest
due pursuant to this Note on the Maturity Date unless earlier accelerated
pursuant to the terms of this Note;

 

(B) The material breach by the Payor and/or the Guarantor of any other
provisions of this Note (other than failure to make payment as due hereunder)
and such breach is not cured within ten (10) business days after written notice
of such breach is given by the Noteholder to the Payor and/or the Guarantor
pursuant to Paragraph “(C)” of Article “24” of this Note;

 

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(C) The filing by the Payor or the Guarantor of a petition in bankruptcy;

 

(D) The making of an assignment by the Payor or the Guarantor for the benefit of
its creditors;

 

(E) Consent by the Payor and/or the Guarantor to the appointment of, or
possession by, a custodian or receiver for itself or for all or substantially
all of its property;

 

(F) The filing of a petition in bankruptcy against the Payor and/or the
Guarantor without the consent of the Noteholder, and the failure to have such
petition dismissed within thirty (30) days from the date upon which such
petition is filed;

 

(G) Notwithstanding the thirty (30) day provision in Paragraph “(F)” of this
Article “8” of this Note, on a petition in bankruptcy filed against the Payor
and/or the Guarantor, the Payor and/or the Guarantor (as the case may be) is
adjudicated bankrupt prior to the expiration of thirty (30) days;

 

(H) The entry by a court of competent jurisdiction of a final non-appealable
order, judgment or decree appointing, without the consent of the Noteholder, a
receiver, trustee or custodian for the Payor and/or the Guarantor, or for all or
substantially all of the property or assets of the Payor and/or the Guarantor;

 

(I) Any representation or warranty made by or on behalf of the Company and the
Guarantor, or in any report, certificate, financial statement or other
instrument furnished to the Noteholder in connection with this Note, the
Security Agreement and/or the Guarantee shall prove to be inaccurate, false or
misleading in any material respect as of the date with respect to which it was
made or deemed to be made, provided, however, that the foregoing provision shall
not apply to publicly filed disclosure documents, reports or financial
statements, previously made with the Securities & Exchange Commission, (the
“SEC”) and made available through EDGAR pursuant to the Company’s periodic and
current reporting requirements, or otherwise;

 

(J) The Payor or the Guarantor shall have failed to duly observe or perform any
covenant, condition or agreement on the part of the Payor or the Guarantor to be
observed or performed pursuant to the terms of this Note, the Security Agreement
and/or the Guarantee beyond any applicable cure period;

 

(K) This Note, the Security Agreement, or the Guarantee at any time for any
reason ceases to be in full force and effect or either of them or the
transactions contemplated herein or therein in whole or in part is declared by a
court or governmental agency of competent jurisdiction to be null and void;

 

(L) The Payor and/or the Guarantor materially breaches or defaults under the
terms of any agreement, instrument or document with or for the benefit of the
Noteholder other than this Note, the Security Agreement and/or the Guarantee; or

 

(M) The Guarantor materially defaults under or otherwise materially breaches any
of the terms of the Guarantee;

 

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10. Remedies Upon Default.

 

On the Maturity Date or upon the occurrence of any Event of Default as set forth
in Paragraphs “(B)” through “(M)” of Article “9” of this Note and at any time
thereafter while such Event of Default is continuing, the entire unpaid
principal balance which is due pursuant to this Note shall, at the Noteholder’s
option, be accelerated and become and be immediately due and payable through the
date of full payment without presentment, demand, protest or further notice of
any kind, all of which are expressly waived by the Payor.

 

11. Non-Exclusive Remedy.

 

Any remedy that is set forth in this Note is not exclusive of any other remedies
provided for herein or that are provided by law.

 

12. Liability Upon Default.

 

The liability of the Payor upon default shall be unconditional and shall not be
in any manner affected by any indulgence whatsoever granted or consented to by
the Noteholder including, but not limited to, any extension of time, renewal,
waiver or other modification.

 

13. Exercise of Remedy Upon Default.

 

No failure on the part of the Noteholder to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.

 

14. No Defenses or Set-Off.

 

The Payor acknowledges and agrees that there are, and shall be, no claims,
defenses, set-offs, equities, or counterclaims, whether legal or equitable,
available to it or any other person or entity affiliated with it or against the
enforcement of this Note, including, but not limited to, any such defenses,
set-offs, equities, claims, counterclaims, or other legal or equitable defenses
or claims including, but not limited to, the statute of limitations, which arise
out of this Note, the obligation of the Payor to repay this Note, as the case
may be, or in the course of dealings between the Payor and the Noteholder and
any representatives or affiliates thereof, and any such defenses, set-offs,
equities, counterclaims or other claims, legal or equitable, available to Payor,
or any entity affiliated with Payor, whether known or unknown, arising out of
this Note or the administration of this Note are hereby forever waived, released
and discharged.

 

15. Confidentiality. Each of the Parties and their respective officers,
directors, guarantors, employees and agents agree that the terms of this Note
and the transactions among the Parties are confidential pursuant to the terms
and conditions of a non-disclosure agreement entered into by and among the
Parties.

 

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16. Expenses. Subject to Article “24” of this Note, each Party to this Note
shall bear and pay its own costs and expenses incurred in connection with the
execution and delivery of this Note.

 

17. Representations and Warranties of the Company. Except as may be disclosed in
the company’s previously publicly filed periodic or current reports as filed
with the SEC or in the corresponding article or paragraph of the disclosure
schedule attached hereto (a draft of which has been provided prior to the
execution hereof, and the final of which shall be provided on or before
September 8, 2017) as Exhibit “D” (the “Disclosure Schedule”), the Company
hereby represents and warrants to the Noteholder the following (it being
understood that any information set forth in one article or paragraph of the
Disclosure Schedule shall be deemed to apply to and qualify the article or
paragraph of this Note to which it corresponds in number and such other article
or paragraph of this Note to the extent such disclosure makes it reasonably
readily apparent that such information applies to such other article or
paragraph):

 

(A) Organization, Good Standing, and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Minnesota and has all requisite power and authority to carry on its
business as now conducted and as proposed to be conducted. The Company is duly
qualified as a foreign corporation to transact business, and is in good
standing, in each jurisdiction in which the failure to so qualify would have a
material adverse effect on the business, assets (including intangible assets),
liabilities, financial condition, property, prospects or results of operations
of the Company as currently conducted or as proposed to be conducted (a
“Material Adverse Effect”).

 

(B) Power and Authority; Authorization. All corporate action on the part of the
Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Note, and the performance of all
obligations of the Company hereunder and thereunder has been taken.

 

(C) Enforceability. This Note, when executed and delivered by the Company, will
constitute valid and legally binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, subject to (i)
laws of general application relating to bankruptcy, insolvency, and the relief
of debtors, and (ii) rules of law governing specific performance, injunctive
relief, or other equitable remedies.

 

(D) No Governmental Consents. Assuming the accuracy of the representations made
by the Company in this Article “17” of this Note, no consent, approval,
qualification, order or authorization of, or filing with, any governmental
authority is required on the part of the Company as a condition to the Company’s
execution, delivery or performance of this Note.

 

(E) Valid Issuance. The Note, when issued, delivered in accordance with the
terms of the Note, will be duly and validly issued, fully paid to the extent of
the drawn down amount, and nonassessable and will be issued in compliance with
all applicable federal and state securities laws. No other corporate or other
approval or authorization is required on the part of the Company or any other
person (other than approval of the board of directors and certain lien holders
or other party whose approval is required), by law or otherwise, in order to
make this Note valid, binding and enforceable obligations of the Company
(subject to (i) laws of general application relating to bankruptcy, insolvency,
and the relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief, or other equitable remedies).

 

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(F) Capitalization. Schedule 17(F) of Exhibit “D”, which is attached, and made
part of, this Note, contains a true, correct and complete listing of all
authorized, issued and outstanding equity interests in the Company, including
all preferred, common, profit interests and any other equity interests (the
“Total Company Equity”) and the corresponding beneficial owners of such Total
Company Equity (the “Shareholders”). The Total Company Equity is lawfully owned
by each of the Shareholders as set forth on Schedule 17(F) of Exhibit “D”, which
is attached, and made part of, this Note, and all voting rights in the Company
are vested exclusively with the Shareholders. Except as set forth on Schedule
17(F) of Exhibit “D”, which is attached, and made part of, this Note on the date
hereof, there is no subscription, warrant, option, convertible security or other
right (contingent or otherwise) to purchase or acquire from the Company any
common, preferred or profit interests in the Company or any other interest,
security or right in the Company. Except as set forth on of the Schedule 17(F)
of Exhibit “D”, which is attached, and made part of, this Note, on the date
hereof, the Company does not have an obligation (contingent or otherwise) to
issue any subscription, warrant, option, convertible security or other such
right, or to issue or distribute other equity interests in the Company or any
assets of the Company. The Company does not have an obligation (contingent or
otherwise) to purchase, redeem or otherwise acquire any common, preferred or
profit interests in the Company or any other interest in the Company or to make
any distribution in respect thereof. Except for the Stockholders Agreement (as
defined below) among the existing shareholders of the Company, the Company has
no knowledge that there is any agreement, written or oral, between the Company
and any person or among any holders of its securities, relating to the sale or
transfer (including agreements relating to rights of first refusal, co sale
rights or “drag along” rights), registration under the Securities Act of 1933
(the “Act”), as amended, or voting, of the common, preferred or profit interests
in the Company or other equity interests in the Company. The Company believes in
good faith that any “nonqualified deferred compensation plan” (as such term is
defined under Section 409A(d)(1) of the Internal Revenue Code of 1986 (as
amended, the “Code”) and the guidance thereunder) under which the Company makes,
is obligated to make or promises to make, payments (each, a “409A Plan”)
complies in all material respects, in both form and operation, with the
requirements of Section 409A of the Code and the guidance thereunder. The
Company has no knowledge that any payment to be made under any 409A Plan is, or
will be, subject to the penalties of Section 409A(a)(1) of the Code.

 

(G) No Subsidiaries. The Company does not own or control, directly or
indirectly, any interest in any other corporation, partnership, trust, joint
venture, limited liability company, association, or other business entity. The
Company is not a participant in any joint venture, partnership or similar
arrangement.

 

(H) Intellectual Property.

 

(i) The Company owns or has valid legal rights to all (a) patents, patent
applications and inventions; (b) trademarks, service marks, trade names, trade
dress, logos, domain names or corporate names and registrations and applications
for registration thereof, together with all of the goodwill associated
therewith; (c) copyrights (registered or unregistered) and copyrightable works
and registrations and applications for registrations thereof; (d) computer
software, data, and databases and documentation thereof; (e) trade secrets and
other confidential information; and (f) licenses, information and proprietary
rights and processes (collectively, “Company Intellectual Property”) used or
held for use in connection with or otherwise relating to its business as now
conducted and as presently proposed to be conducted. The Company Intellectual
Property constitutes all intellectual property necessary for the operation of
the Company’s business as currently conducted or as presently proposed to be
conducted. Except for the license of “off the shelf” or other commercial
software, there are no outstanding licenses or Notes of any kind relating to the
Company Intellectual Property nor is the Company bound by or a party to any
licenses or Notes of any kind with respect to the patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses, information and
proprietary rights and processes of any other person or entity. Schedule 17(H)
of Exhibit “D”, which is attached to, and made part of, this Note, lists all
Company Intellectual Property that is registered with any governmental authority
or for which an application to a regulatory authority has been made.

 

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(ii) The use of the Company Intellectual Property and the conduct of the
business as presently conducted or currently contemplated by the Company to be
conducted does not conflict with, infringe upon, misappropriate, or otherwise
violate any copyright or trade secret of any person and the Company has no
knowledge of a patent or other proprietary right of any person. The Company has
no knowledge that any claim by any person contesting the validity or ownership
of any of the Company Intellectual Property is pending or, threatened. No claims
have been filed by the Company asserting that any person is infringing upon,
misappropriating or otherwise violating such Company Intellectual Property. The
Company has no knowledge that any action, suit, proceeding or other
investigation with respect to the Company’s use of the Company’s Intellectual
Property has ever been instituted, is pending or threatened against the Company.
The Company has no knowledge that any of the Company Intellectual Property is
being infringed by activities, products or services of, or is being
misappropriated by, any third party.

 

(iii) The Company has used commercially reasonable efforts to safeguard and
maintain the secrecy and confidentiality of the Company Intellectual Property,
and to obtain all rights in and to the Company Intellectual Property generated
by its personnel with respect to its business. All of the Company’s former and
current officers, employees and consultants who have participated in the
development of, or otherwise had access to the Company Intellectual Property or
other trade secrets or confidential information, have assigned to the Company
all intellectual property rights arising from the services performed for the
Company by such persons. None of the Company’s current or former officers,
employees or consultants currently claim or have claimed to the Company and of
the Company has no knowledge that any third party currently claims or has
claimed any ownership interest in any of its intellectual property as a result
of that person having been involved in the development of any such Company
Intellectual Property while employed by or providing consulting services to it,
or otherwise. The Company has no knowledge of any violation of any
confidentiality or assignment of intellectual property Note relating to the
Company Intellectual Property. The Company is not aware that any of its
employees is obligated under any contract (including licenses, covenants or
commitments of any nature) or other Note, or subject to any judgment, decree or
order of any court or administrative agency, that would interfere with the use
of his or her best efforts to promote the interests of the Company. The Company
does not believe it is or will be necessary to utilize any inventions of any of
its employees made prior to or outside the scope of their employment by the
Company.

 

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(iv) No private source code related to any confidential Company Intellectual
Property, nor any other of its trade secrets has been publicly published or
disclosed. Without limitation of the foregoing, no licenses or rights have been
granted to any third party to distribute or copy any of the Company’s source
code for or to use any of its source code to create Derivative Works (as defined
in 17 U.S.C. § 101), other than as in the ordinary course of business of the
Company.

 

(v) The Company has not embedded any open source, copyright or community source
code in any of its products generally available or in development, including but
not limited to any libraries or code licensed under any General Public License,
Lesser General Public License or similar license arrangement. Each current and
former employee, consultant and officer of the Company has executed an agreement
with the Company regarding confidentiality and proprietary information
substantially in the form or forms delivered to the counsel for the Noteholder
(the “Confidential Information Agreements”) except as would not constitute a
Material Adverse Effect. No current or former employee has excluded works or
inventions from his or her assignment of inventions pursuant to such employee’s
Confidential Information Agreement. Each current and former employee has
executed a non-competition and non-solicitation agreement substantially in the
form or forms delivered to counsel for the Noteholder. The Company is not aware
that any of its employees is in violation of any agreement covered by this
Subparagraph “(v)” of this Paragraph “(H)” of this Article “17” of this Note.

 

(I) Financial Statements; No Undisclosed Liabilities. The Company has delivered
to the Noteholder its audited consolidated balance sheet and statements of
income and cash flows as of and for the twelve months ended December 31, 2015
(the “Financial Statements”), a copy of which are included as Schedule 17(I) of
Exhibit “C”, which is attached to, and made part of, this Note. The Company
shall deliver to the Noteholder unaudited financial statements for the six month
period ended June 30, 2017 on or prior to September 8, 2017. The Company’s
parent has previously disclosed on its Current Report on Form 8-K dated August
14, 2017 that it has received notification from its previous auditors that
reliance should not be placed on the autitors report relating to the Guarantor’s
(and hence the Company’s) consolidated financial statements for the year ended
December 31, 2016, and that said audit has been withrdrawn by the auditors for
said year. Other than the foregoing, the Financial Statements for the twelve
months ended December 31, 2015 are true and correct in all material respects and
fairly present the financial condition and operating results of the Company as
of the date and during the period indicated. Other than in respect of the
financials to be restated, the Financial Statements have been prepared in
accordance with generally acceptable accounting principles in the United States
(“GAAP”). Except as set forth in the Financial Statements and Schedule 17(I) of
Exhibit “D”, which is attached to, and made part of, this Note, the Company has
no liabilities or obligations, absolute or contingent (individually or in the
aggregate), other than (i) liabilities incurred in the ordinary course of
business subsequent to June 30, 2017 and (ii) obligations under contracts and
commitments previously made available to the Noteholder and made in the ordinary
course of business that would not be required to be reflected in financial
statements prepared in accordance GAAP.

 

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(J) Compliance with Laws and Agreements. The Company is not in material
violation or default (i) of any provision of its Certificate of Incorporation or
any other Note governing the affairs of the Company, (ii) under any provision of
any mortgage, agreement, instrument or contract to which it is a party or by
which it is bound, (iii) of any judgment, order, writ or decree or (iv) of any
federal or state statute, rule or regulation applicable to the Company.

 

(K) No Litigation. The Company has no knowledge of any claim, action, suit,
proceeding, arbitration, complaint, charge or investigation pending or currently
threatened (i) against the Company or any officer, director or employee of the
Company or (ii) that calls into question the validity of this Note or the right
of the Company to enter into them, or to consummate the transactions
contemplated hereby and thereby. The Company has no knowledge that the Company
or any of its officers, directors or employees is a party or is named as subject
to the provisions of any order, writ, injunction, judgment or decree of any
court or government agency or instrumentality (in the case of officers,
directors or employees, such as would affect the Company). There is no action,
suit, proceeding or investigation by the Company pending or which the Company
intends to initiate. The foregoing includes, without limitation, actions, suits,
proceedings or investigations pending or threatened in writing (or any basis
therefor known to the Company) involving the prior employment of any of the
Company’s employees, their services provided in connection with the Company’s
business, or any information or techniques allegedly proprietary to any of their
former employers, or their obligations under any agreements with prior
employers.

 

(L) Certain Transactions. Other than standard employee benefits generally made
available to all employees, a copy of which in included as Schedule 17(L) of
Exhibit “D”, which is attached to, and made part of, this Note, there are no
agreements, understandings or proposed transactions between the Company and any
of its officers, directors, consultants or employees, or any affiliate thereof.
The Company is not indebted, directly or indirectly, to any of its directors,
officers or employees or to their respective spouses or children or to any
affiliate of any of the foregoing, other than in connection with expenses or
advances of expenses incurred in the ordinary course of business. None of the
Company’s directors, officers or employees, or any members of their immediate
families, or any affiliate of the foregoing are, directly or indirectly,
indebted to the Company, have any (i) material commercial, industrial, banking,
consulting, legal, accounting, charitable or familial relationship with any of
the Company’s customers, suppliers, service providers, joint venture partners,
licensees and competitors, (ii) direct or indirect ownership interest in any
firm or corporation with which the Company is affiliated or with which the
Company has a business relationship, or any firm or corporation which competes
with the Company except that directors, officers or employees or members of the
Company may own stock in (but not exceeding two percent (2%) of the outstanding
capital stock of) publicly traded companies that may compete with the Company or
(iii) financial interest in any contract with the Company.

 

(M) Property. The property and assets that the Company owns are free and clear
of all mortgages, deeds of trust, liens, loans and encumbrances, except for
statutory liens for the payment of current taxes that are not yet delinquent and
encumbrances and liens that arise in the ordinary course of business and do not
materially impair the Company’s ownership or use of such property or assets.
With respect to the property and assets it leases, the Company is in compliance
with such leases and, to its knowledge, holds a valid leasehold interest free of
any liens, claims or encumbrances other than those of the lessors of such
property or assets. The Company does not own any real property.

 

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(N) Employee Matters.

 

(i) As of the date hereof, the Company employs Forty (4) individuals in the
following categories: Finance, Sales, Project Management, HR, Client Services,
IT Development, IT Operations.

 

(ii) The Company has no knowledge that any of its employees is obligated under
any contract (including licenses, covenants or commitments of any nature) or
other agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would materially interfere with such employee’s
ability to promote the interest of the Company or that would conflict with the
Company’s business. The Company has no knowledge that any of the execution or
delivery of this Note, the carrying on of the Company’s business by the
employees of the Company or the conduct of the Company’s business as now
conducted and as presently proposed to be conducted will conflict with or result
in a breach of the terms, conditions, or provisions of, or constitute a default
under, any contract, covenant or instrument under which any such employee is now
obligated.

 

(iii) Other than as set forth on Schedule 17(N) of Exhibit “D”, the Company is
not delinquent in payments to any of its employees, consultants, or independent
contractors for any wages, salaries, commissions, bonuses, or other direct
compensation for any service performed for it to the date hereof or amounts
required to be reimbursed to such employees, consultants, or independent
contractors. The Company has complied in all material respects with all
applicable state and federal equal employment opportunity laws and with other
laws related to employment, including those related to wages, hours, worker
classification, and collective bargaining. The Company has withheld and paid to
the appropriate governmental entity or is holding for payment not yet due to
such governmental entity all amounts required to be withheld from employees of
the Company and is not liable for any arrears of wages, taxes, penalties, or
other sums for failure to comply with any of the foregoing.

 

(iv) The Company has no knowledge that any employee intends to terminate
employment with the Company or is otherwise likely to become unavailable to
continue as an employee, nor does the Company have a present intention to
terminate the employment of any of the foregoing. The employment of each
employee of the Company is terminable at the will of the Company. Except as set
forth in Schedule 17(N) of Exhibit “D”, which is attached to, and made part of,
this Note, or as required by law, upon termination of the employment of any such
employees, no severance or other payments will become due. Except as set forth
in Schedule 17(N) of Exhibit “D”, which is attached to, and made part of, this
Note, the Company has no policy, practice, plan, or program of paying severance
pay or any form of severance compensation in connection with the termination of
employment services.

 

11 

   

 

(v) The Company has not made any representations regarding equity incentives to
any officer, employee, director or consultant that are inconsistent with the
share amounts and terms set forth in the minutes of meetings of the Company’s
board of directors.

 

(vi) Each former employee whose employment was terminated by the Company has
entered into an agreement with the Company providing for the full release of any
claims against the Company or any related party arising out of such employment.

 

(O) Changes. Other than as set forth on the Schedules provided in Exhibit “D”,
or as disclosed in the Company’s public filings or provided to the Lender in
writing, (Since June 30, 2017 there has not been:

 

(i) any change in the assets, liabilities, financial condition or operating
results of the Company from that reflected in the Financial Statements, except
as set forth in Schedule 17(O) of Exhibit “D”, which is attached to, and made
part of, this Note, and changes in the ordinary course of business that have not
caused, in the aggregate, a Material Adverse Effect;

 

(ii) any damage, destruction or loss, whether or not covered by insurance, that
would have a Material Adverse Effect;

 

(iii) any waiver or compromise by the Company of a valuable right or of a
material debt owed to it;

 

(iv) any satisfaction or discharge of any lien, claim, or encumbrance or payment
of any obligation by the Company, except in the ordinary course of business and
the satisfaction or discharge of which would not have a Material Adverse Effect;

 

(v) any material change to a material contract or agreement by which the Company
or any of its assets is bound or subject;

 

(vi) any material change in any compensation arrangement or agreement with any
employee, officer, director or stockholder;

 

(vii) any resignation or termination of employment of any officer or Key
Employee of the Company; as used herein, the term “Key Employee” shall mean an
employee who is part of the Company’s operating executive team;

 

(viii) any mortgage, pledge, transfer of a security interest in, or lien,
created by the Company, with respect to any of its material properties or
assets, except liens for taxes not yet due or payable and liens that arise in
the ordinary course of business and do not materially impair the Company’s
ownership or use of such property or assets;

 

(ix) any loans or guarantees made by the Company to or for the benefit of its
employees, officers or directors, or any members of their immediate families,
other than travel advances and other advances made in the ordinary course of its
business;

 

12 

   

 

(x) any declaration, setting aside or payment or other distribution in respect
of any of the Company’s capital stock, or any direct or indirect redemption,
purchase, or other acquisition of any of such stock by the Company;

 

(xi) any sale, assignment or transfer of any Company Intellectual Property that
could reasonably be expected to result in a Material Adverse Effect;

 

(xii) receipt of notice that there has been a loss of, or material order
cancellation by, any major customer of the Company;

 

(xiii) The Company has no knowledge that any other event or condition of any
character, other than events affecting the economy or the Company’s industry
generally, that could reasonably be expected to result in a Material Adverse
Effect; or

 

(xiv) any arrangement or commitment by the Company to do any of the things
described in this Subparagraph “(xiv)” of this Paragraph “(O)” of this Article
17 of this Note.

 

(P) Tax Returns and Payments. There are no federal, state, county, local or
foreign taxes due and payable by the Company which have not been timely paid.
There are no accrued and unpaid federal, state, county, local or foreign taxes
of the Company which are due, whether or not assessed or disputed. There have
been no examinations or audits of any tax returns or reports by any applicable
federal, state, local or foreign governmental agency. The Company has duly and
timely filed all federal, state, county, local and foreign tax returns required
to have been filed by it and there are in effect no waivers of applicable
statutes of limitations with respect to taxes for any year.

 

(Q) Insurance. The Company has in full force and effect fire and casualty
insurance policies with extended coverage, sufficient in amount (subject to
reasonable deductions) to allow it to replace any of its properties that might
be damaged or destroyed.

 

(R) Employee Agreements. Each current and former employee, consultant and
officer of the Company has executed a Confidential Information Agreement. No
current or former Key Employee has excluded works or inventions from his or her
assignment of inventions pursuant to such Key Employee’s Confidential
Information Agreement. The Company is not aware that any of its Key Employees is
in violation of any agreement covered by this Paragraph “(R)” of this Article 17
of this Note.

 

(S) Permits. The Company has all franchises, permits, licenses and any similar
authority necessary for the conduct of its business, the lack of which could
reasonably be expected to have a Material Adverse Effect. The Company is not in
default in any material respect under any of such franchises, permits, licenses
or other similar authority.

 

(T) Corporate Documents. The Certificate of Incorporation and Bylaws of the
Company are in the form in the Schedule 17(T) of Exhibit “D”, which is attached
to, and made part of, this Note. The copies of the minutes of meetings of
directors and shareholders and actions by written consent without a meeting by
the directors and shareholders provided to the Noteholder accurately reflects in
all material respects all actions by the directors (and any committee of
directors) and shareholders with respect to all transactions referred to in such
minutes.

 

13 

   

 

(U) Real Property Holding Corporation. The Company is not now and has never been
a “United States real property holding corporation” as defined in the Code and
any applicable regulations promulgated thereunder. The Company has filed with
the Internal Revenue Service all statements, if any, with its United States
income tax returns which are required under such regulations.

 

(V) Environmental and Safety Laws. Except as could not reasonably be expected to
have a Material Adverse Effect (a) the Company is and has been in compliance
with all Environmental Laws; (b) the Company has no knowledge that there has
been any release or threatened release of any pollutant, contaminant or toxic or
hazardous material, substance or waste, or petroleum or any fraction thereof,
(each a “Hazardous Substance”) on, upon, into or from any site currently or
heretofore owned, leased or otherwise used by the Company; (c) there have been
no Hazardous Substances generated by the Company that have been disposed of or
come to rest at any site that has been included in any published U.S. federal,
state or local “superfund” site list or any other similar list of hazardous or
toxic waste sites published by any governmental authority in the United States;
and (d) there are no underground storage tanks located on, no polychlorinated
biphenyls (“PCBs”) or PCB-containing equipment used or stored on, and no
hazardous waste as defined by the Resource Conservation and Recovery Act, as
amended, stored on, any site owned or operated by the Company, except for the
storage of hazardous waste in compliance with Environmental Laws. The Company
has made available to the Noteholder true and complete copies of all material
environmental records, reports, notifications, certificates of need, permits,
pending permit applications, correspondence, engineering studies, and
environmental studies or assessments. For purposes of this Paragraph “(W)” of
this Article “17” of this Note, “Environmental Laws” means any law, regulation,
or other applicable requirement relating to (a) releases or threatened release
of Hazardous Substance; (b) pollution or protection of employee health or
safety, public health or the environment; or (c) the manufacture, handling,
transport, use, treatment, storage, or disposal of Hazardous Substances.

 

(W) Foreign Corrupt Practices Act. Neither the Company nor any of the Company’s
directors, officers, employees or agents have, directly or indirectly, made,
offered, promised or authorized any payment or gift of any money or anything of
value to or for the benefit of any “foreign official” (as such term is defined
in the U.S. Foreign Corrupt Practices Act (the “FCPA”)), foreign political party
or official thereof or candidate for foreign political office for the purpose of
(i) influencing any official act or decision of such official, party or
candidate, (ii) inducing such official, party or candidate to use his, her or
its influence to affect any act or decision of a foreign governmental authority
or (iii) securing any improper advantage, in the case of (i), (ii) and (iii)
above in order to assist the Company or any of its affiliates in obtaining or
retaining business for or with, or directing business to, any person. Neither
the Company nor any of its directors, officers, employees or agents have made or
authorized any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment of funds or received or retained any funds in violation of any
law, rule or regulation. The Company further represents that it has maintained,
and has caused each of its subsidiaries and affiliates to maintain, systems of
internal controls (including, but not limited to, accounting systems, purchasing
systems and billing systems) to ensure compliance with the FCPA or any other
applicable anti-bribery or anti-corruption law.

 

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(X) No “Bad Actor” Disqualification. The Company has exercised reasonable care
to determine whether any Company Covered Person (as defined below) is subject to
any of the “bad actor” disqualifications described in Rule 506(d)(1)(i) through
(viii), as modified by Rules 506(d)(2) and (d)(3), under the Act
(“Disqualification Events”). The Company has no knowledge that any Company
Covered Person is subject to a Disqualification Event. The Company has complied,
to the extent required, with any disclosure obligations under Rule 506(e) under
the Act. For purposes of this Note, “Company Covered Persons” are those persons
specified in Rule 506(d)(1) under the Act; provided, however, that Company
Covered Persons do not include (a) the Noteholder, or (b) any person or entity
that is deemed to be an affiliated issuer of the Company solely as a result of
the relationship between the Company and the Noteholder.

 

(Y) Full Disclosure. All the representations and warranties made by the Company
herein or in the Exhibits hereto, and all of the statements, documents or other
information pertaining to the transaction contemplated herein made or given by
Company, its agents or representatives, are complete and accurate, and do not
omit any information required to make the statements and information provided,
in light of the transaction contemplated herein and in light of the
circumstances under which they were made, not misleading, accurate and
meaningful.

 

(Z) Survival of Warranties. Unless otherwise set forth in this Note, the
warranties, representations and covenants of the Company contained in or made
pursuant to this Note shall survive the execution and delivery of this Note and
shall in no way be affected or limited by any investigation of the subject
matter therefor made by or on behalf of the Company.

 

(AA) No Defense. It shall not be a defense to a suit for damages for any
misrepresentation or breach of a covenant, representation or warranty that the
Noteholder knew or had reason to know that any covenant, representation or
warranty in this Note contained untrue statements.

 

18. Representations, Warranties, Covenants and Agreements of the Guarantor.
Subject to obtaining the consents of several creditors and existing lienholders
which have not yet been obtained as of the initial date of, and drawdown under
this Note (the “Creditor Consents”), the Guarantor hereby makes the following
representations and warranties to the Noteholder as of the date hereof: (the
capitalized terms used in this Article “18” of this Note are defined in the
Security Agreement which is attached to, and made part of, this Note as Exhibit
“A”.)

 

(A) The Guarantor has the requisite corporate power and authority to enter into
this Note and otherwise to carry out its obligations hereunder. The execution,
delivery and performance by the Guarantor of this Note, the Security Agreement
and the Guarantee and the filings contemplated herein have been duly authorized
by all necessary action on the part of the Guarantor and no further action is
required by the Guarantor. This Note, the Security Agreement and the Guarantee
constitute a legal, valid and binding obligation of the Guarantor enforceable in
accordance with their respective terms or similar laws affecting the enforcement
of creditor’s rights generally.

 

15 

   

 

(B) Capitalization. Exhibit “E”, which is attached, and made part of, this Note,
contains a true, correct and complete listing of all authorized, issued and
outstanding equity interests in the Guarantor, including all preferred, common,
profit interests and any other equity interests (the “Total Guarantor Equity”)
and the corresponding beneficial owners of such Total Guarantor Equity (the
“Stockholders”). The Total Guarantor Equity is lawfully owned by each of the
Stockholders as set forth on Exhibit “D”, which is attached, and made part of,
this Note, and all voting rights in the Guarantor are vested exclusively with
the Stockholders.

 

(C) The Guarantor represents and warrants that it has no place of business or
offices where its respective books of account and records are kept, stored or
located, except for the Business Premises.

 

(D) The Guarantor is the sole owner of the Guarantor’s Collateral (except for
non-exclusive licenses granted by the Guarantor in the Ordinary Course of
Business), free and clear of any and all Encumbrances. The Guarantor is fully
authorized to grant the security interests in and to pledge the Guarantor’s
Collateral to the Noteholder. There is not on file in any agency, land records
or other office of any Governmental Authority, an effective financing statement,
security agreement, license or transfer or any notice of any of the foregoing
covering or affecting any of the Guarantor’s Collateral.

 

(E) No part of the Collateral has been judged invalid or unenforceable. No
Claim, Proceeding or other notice or other similar item has been received by the
Guarantor that any Guarantor’s Collateral or the Guarantor’s use of any
Collateral violates the rights of any Person. There has been no adverse decision
or Claim to the Guarantor’s ownership rights in or exclusive rights to use the
Guarantor’s Collateral in any jurisdiction, or to the Guarantor’s right to keep
and maintain such Guarantor’s Collateral in full force and effect, and there is
no Claim or Proceeding of any nature involving said rights pending or, to the
best knowledge of the Guarantor, threatened, before any Governmental Authority
or with any other Person.

 

(F) The Guarantor shall at all times maintain its books of account and records
relating to the Guarantor’s Collateral at the Business Premises and the
Guarantor shall not relocate such books of account and records, except and
unless the Guarantor shall first notify the Noteholder in writing of the
relocation.

 

(G) Upon making the filings described in the immediately following sentence and
obtaining of all necessary Creditor Consents which are not being obtained at the
initial issuance date of this Note, this Note, the Security Agreement and the
Guarantee create, in favor of the Noteholder, a valid and perfected security
interest in the Guarantor’s Collateral. Except for the filing of financing
statements on Form-1 under the Code with the State of Delaware and the State of
Minnesota, no authorization or approval of, or filing with, or notice to any
Governmental Authority is required either: (i) for the grant by the Guarantor
of, or the effectiveness of, the security interests granted hereby or for the
execution, delivery and performance of this Note, the Security Agreement and the
Guarantee by the Guarantor or (ii) for the perfection of or exercise by the
Noteholder of its rights and remedies hereunder.

 

16 

   

 

(H) At such time as Company and Guarantor have provided a written notice to
Noteholder that all necessary creditor and lienholder consents have been
obtained, and after the execution of this Note, the Security Agreement and the
Guarantee, the Guarantor hereby authorizes the Noteholder to file one or more
UCC financing statements, and any continuations, amendments, or assignments
thereof, with respect to the security interests on the Guarantor’s Collateral
granted hereby, with the State of Delaware and the State of Minnesota and in
such other jurisdictions as may be requested or desired by the Noteholder.

 

(I) The execution, delivery and performance of this Note, the Security Agreement
and the Guarantee, and the granting of the security interests contemplated
hereby, will not: (i) constitute a violation of or conflict with the Certificate
of Incorporation, Bylaws or any other organizational or governing documents of
the Guarantor; (ii) constitute a violation of, or a default or breach under
(either immediately, upon notice, upon lapse of time, or both), or conflicts
with, or gives to any other Person any rights of termination, amendment,
acceleration or cancellation of, any provision of any Contract or agreement to
which the Guarantor is a party or by which any of the Collateral may be bound;
(iii) constitute a violation of, or a default or breach under (either
immediately, upon notice, upon lapse of time, or both), or conflicts with, any
Judgment of any Governmental Authority; (iv) constitute a violation of, or
conflict with, any Law; or (E) result in the loss or adverse modification of, or
the imposition of any fine, penalty or other Encumbrance with respect to, any
Permit granted or issued to, or otherwise held by or for the use of, the
Guarantor or any of the Guarantor’s Collateral. No Consent (including from
stockholders or creditors of the Guarantor is required for the Guarantor to
enter into and perform its obligations hereunder and thereunder. Notwithstanding
the foregoing, the Company and Guarantor have not obtained the Creditor Consents
as of the date of execution hereof and shall exercise best efforts in obtaining
all necessary Creditor Consents within 7 business days of the date of initial
execution and funding hereof.

 

(J) The Guarantor shall at all times maintain the liens and security interests
provided for hereunder as valid and perfected liens and security interests in
the Guarantor’s Collateral in favor of the Noteholder until this Note and the
Security Agreement and the security interests hereunder and thereunder shall
terminate pursuant to the Paragraph “(O)” of Article “9” of the Security
Agreement. The Guarantor shall at all times safeguard and protect all
Collateral, at its own expense, for the account of the Noteholder. At the
request of the Noteholder, the Guarantor will sign and deliver to the Noteholder
at any time, or from time to time, one or more financing statements (or
authority to file, amend, continue or assign financing statements) pursuant to
the Code (or any other applicable statute) in form reasonably satisfactory to
the Noteholder and will pay the cost of filing the same in all public offices
wherever filing is, or is deemed by the Noteholder to be, necessary or desirable
to effect the rights and obligations provided for herein. Without limiting the
generality of the foregoing, the Noteholder shall pay all fees, taxes and other
amounts necessary to maintain the Guarantor’s Collateral and the security
interests granted hereunder, and the Noteholder shall obtain and furnish to the
Noteholder from time to time, upon demand, such releases and/or subordinations
of claims and liens which may be required to maintain the priority of the
security interests hereunder and thereunder.

 

(K) The Guarantor will not transfer, pledge, hypothecate, encumber, license,
sell or otherwise dispose of any of the Guarantor’s Collateral without the prior
written consent of the Noteholder, which consent may be withheld in the
Noteholder’s sole and absolute discretion, except for transfers, sales or
licenses made in the Ordinary Course of Business.

 

17 

   

 

(L) The Guarantor shall keep, maintain and preserve all of the Guarantor’s
Collateral in good condition, repair and order and the Guarantor will use,
operate and maintain the Guarantor’s Collateral in compliance with all Laws, and
in compliance with all applicable insurance requirements and regulations.

 

(M) The Guarantor shall, within five (5) days of obtaining knowledge thereof,
advise the Noteholder promptly, in sufficient detail, of any substantial or
material change in the Collateral, and of the occurrence of any event which
would have a Material Adverse Effect, or that may otherwise be expected to
materially and adversely affect the value of the Guarantor’s Collateral, the
Noteholder’s security interest therein, or the Noteholder’s ability to enforce
its rights hereunder and realize the benefits of its security interests
hereunder.

 

(N) The Guarantor shall promptly execute and deliver to or for the benefit of
the Noteholder such further deeds, mortgages, assignments, security agreements,
financing statements or other instruments, documents, certificates and
assurances and take such further action as the Noteholder may from time to time
request and may in their sole discretion deem necessary to perfect, protect or
enforce their security interests in the Guarantor’s Collateral, including,
placing legends on the Guarantor’s Collateral or on books and records pertaining
to the Guarantor’s Collateral stating that the Noteholder have a security
interest therein.

 

(O) The Guarantor will take all steps reasonably necessary to diligently pursue
and seek to preserve, enforce and collect any rights, Claims, causes of action
and accounts receivable in respect of the Guarantor’s Collateral.

 

(P) The Guarantor shall promptly notify the Noteholder in sufficient detail upon
becoming aware of any Proceeding or any other litigation, attachment,
garnishment, execution or other legal process levied against any Guarantor’s
Collateral or of any Proceeding or any other litigation, attachment,
garnishment, execution or other legal process which the Guarantor knows or has
reason to believe is pending or threatened against it or the Guarantor’s
Collateral, and of any other information received by the Noteholder that may
materially affect the value of the Guarantor’s Collateral, the security
interests granted hereunder or the rights and remedies of the Noteholder
hereunder.

 

(Q) All information heretofore, herein or hereafter supplied to the Noteholder
by or on behalf of the Guarantor with respect to the Guarantor’s Collateral is
accurate and complete in all material respects as of the date furnished.

 

(R) The Guarantor will promptly pay when due all Taxes and all transportation,
storage, warehousing and all other charges and fees affecting or arising out of
or relating to the Guarantor’s Collateral and shall defend the Guarantor’s
Collateral, at the Guarantor’s expense, against all Claims of any Persons
claiming any interest in the Guarantor’s Collateral adverse to the Guarantor or
the Noteholder.

 

(S) At all reasonable times, the Noteholder and its respective agents and
designees may enter the Business Premises and any other premises of the
Guarantor and inspect the Guarantor’s Collateral and all books and records of
the Guarantor (in whatever form), and the Guarantor shall pay the reasonable
costs of such inspections.

 

(T) The Guarantor shall maintain comprehensive casualty insurance on the
Guarantor’s Collateral against such risks, in such amounts, with such loss
deductible amounts and with such companies as may be reasonably satisfactory to
the Noteholder, and each such policy shall contain a clause or endorsement
satisfactory to the Noteholder naming the Noteholder (or the Guarantor’s
Collateral Agent on behalf of the Noteholder) as loss payee and a clause or
endorsement satisfactory to the Noteholder that such policy may not be canceled
or altered and the Noteholder may not be removed as loss payee without at least
thirty (30) days prior written notice to the Noteholder. In all events, the
amounts of such insurance coverages shall conform to prudent business practices
and shall be in such minimum amounts that the Guarantor will not be deemed a
co-insurer under applicable insurance laws, policies or practices. The Guarantor
hereby assigns to the Noteholder and grants to the Noteholder a security
interest in any and all proceeds of such policies and authorizes and empowers
the Noteholder to adjust or compromise any loss under such policies and to
collect and receive all such proceeds. The Company hereby authorizes and directs
each insurance company to pay all such proceeds directly and solely to the
Noteholder and not to the Guarantor and the Noteholder jointly. The Guarantor
authorizes and empowers the Noteholder to execute and endorse in the Guarantor’s
name all proofs of loss, drafts, checks and any other documents or instruments
necessary to accomplish such collection, and any persons making payments to the
Noteholder under the terms of this subsection are hereby relieved absolutely
from any obligation or responsibility to see to the application of any sums so
paid. After deduction from any such proceeds of all costs and expenses
(including attorney’s fees) incurred by the Noteholder in the collection and
handling of such proceeds, the net proceeds shall be applied as follows: if no
Event of Default shall have occurred and be continuing, such net proceeds may be
applied, at the Guarantor’s option, either toward replacing or restoring the
Guarantor’s Collateral, in a manner and on terms satisfactory to the Noteholder,
or as a credit against such of the Obligations, whether matured or unmatured, as
the Noteholder shall determine in the Noteholder’s sole discretion. In the event
that the Guarantor may and does elect to replace or restore any of the
Guarantor’s Collateral as aforesaid, then such net proceeds shall be deposited
in a segregated account opened in the name and for the benefit of the
Noteholder, and such net proceeds shall be disbursed therefrom by the Noteholder
in such manner and at such times as the Noteholder deem appropriate to complete
and insure such replacement or restoration; provided, however, that if an Event
of Default shall occur at any time before or after replacement or restoration
has commenced, then thereupon the Noteholder shall have the option to apply all
remaining net proceeds either toward replacing or restoring the Collateral, in a
manner and on terms satisfactory to the Noteholder, or as a credit against such
of the Obligations, whether matured or unmatured, as the Noteholder shall
determine in the Noteholder’s sole discretion. If an Event of Default shall have
occurred prior to such deposit of the net proceeds, then the Noteholder may, in
their sole discretion, apply such net proceeds either toward replacing or
restoring the Guarantor’s Collateral, in a manner and on terms satisfactory to
the Noteholder, or as a credit against such of the Obligations, whether matured
or unmatured, as the Noteholder shall determine in The Noteholder’s sole
discretion.

 

18 

   

 

(U) Upon the occurrence of an Event of Default, the Guarantor shall cooperate
with the Noteholder to obtain and keep in effect one or more control agreements
in Deposit Accounts, Electronic Chattel Paper, Investment Property and
Letter-of-Credit Rights Collateral, or any other Collateral that may, in the
Noteholder’ sole discretion, require any such control agreements. In addition,
the Guarantor, at the Guarantor’s expense, shall promptly: (A) execute all
notices of security interest for each relevant type of Software and other
General Intangibles in forms suitable for filing with any United States or
foreign office handling the registration or filing of patents, trademarks,
copyrights and other intellectual property and any successor office or agency
thereto; and (B) take all commercially reasonable steps in any Proceeding before
any such office or any similar office or agency in any other country or any
political subdivision thereof, to diligently prosecute or maintain, as
applicable, each application and registration of any Software, General
Intangibles or any other intellectual property rights and assets that are part
of the Collateral, including filing of renewals, affidavits of use, affidavits
of incontestability and opposition, interference and cancellation proceedings.

 

(V) The Guarantor shall not file any amendments, correction statements or
termination statements concerning the Guarantor’s Collateral without the prior
written consent of the Noteholder.

 

(W) No other indebtedness or other equity or security of the Parent is senior to
the Note in right of payment, whether with respect to interest or upon
liquidation or dissolution

 

(X) SEC Documents; Financial Statements. The Guarantor’s Common Stock is
registered pursuant to Section 12 of the Exchange Act and except with respect to
the SEC filings with respect to the Form 10-Q for the year ended December 31,
2016 and for the period ended March 31, 2017, for which the accounting firm has
withdrawn its reports and has advised that the same may not be relied upon, and
consent to file,, the Guarantor has timely filed, reports, schedules, forms,
statements and other documents required to be filed by the Guarantor with the
SEC under the Exchange Act (all of the foregoing filed within the two (2) years
preceding the date hereof or amended after the date hereof and all exhibits
included therein and financial statements and schedules thereto and documents
incorporated by reference therein, being hereinafter referred to as the “SEC
Documents”). The Guarantor is current with its filing obligations under the
Exchange Act and all SEC Documents have been filed on a timely basis or the
Guarantor has received a valid extension of such time of filing and has filed
any such SEC Document prior to the expiration of any such extension. The
Guarantor represents and warrants that true and complete copies of the SEC
Documents are available on the SEC’s website (www.sec.gov) at no charge to the
Noteholder, and Buyers acknowledge that each of them may retrieve all SEC
Documents from such website and each Buyer’s access to such SEC Documents
through such website shall constitute delivery of the SEC Documents to the
Noteholder; provided, however, that if the Noteholder is unable to obtain any of
such SEC Documents from such website at no charge, as result of such website not
being available or any other reason beyond the Noteholder’s control, then upon
request from the Noteholder, the Guarantor shall deliver to the Noteholder true
and complete copies of such SEC Documents. The Guarantor shall also deliver to
the Noteholder true and complete copies of all draft filings, reports,
schedules, statements and other documents required to be filed with the SEC that
have been prepared but not filed with the SEC as of the date hereof. As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Exchange Act, and none of the SEC Documents, at the time
they were filed with the SEC, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. None of the statements made in any such
SEC Documents is, or has been, required to be amended or updated under
applicable Law (except as such statements have been amended or updated in
subsequent filings prior the date hereof, which amendments or updates are also
part of the SEC Documents). As of their respective dates, the financial
statements of the Guarantor included in the SEC Documents (“Financial
Statements”) complied in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto. All of the Financial Statements have been prepared in accordance with
GAAP, consistently applied, during the periods involved (except: (i) as may be
otherwise indicated in such Financial Statements or the notes thereto; or (ii)
in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements), and fairly present in all
material respects the consolidated financial position of the Guarantor as of the
dates thereof and the consolidated results of its operations and cash flows for
the periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). The Guarantor and its officers have no knowledge
that any other information provided by or on behalf of the Guarantor to the
Noteholder which is not included in the SEC Documents contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make the statements therein, in the light of the circumstance under
which they are or were made, not misleading.

 

19 

   

 

(Y) Full Disclosure. All the representations and warranties made by the
Guarantor herein or in the Exhibits hereto, and all of the statements, documents
or other information pertaining to the transaction contemplated herein made or
given by the Guarantor, its agents or representatives, are complete and
accurate, and do not omit any information required to make the statements and
information provided, in light of the transaction contemplated herein and in
light of the circumstances under which they were made, not misleading, accurate
and meaningful.

 

(Z) Survival of Warranties. Unless otherwise set forth in this Note, the
warranties, representations and covenants of the Guarantor contained in or made
pursuant to this Note shall survive the execution and delivery of this Note and
shall in no way be affected or limited by any investigation of the subject
matter therefor made by or on behalf the Guarantor.

 

(AA) No Defense. It shall not be a defense to a suit for damages for any
misrepresentation or breach of a covenant, representation or warranty that the
Noteholder knew or had reason to know that any covenant, representation or
warranty in this Note contained untrue statements.

 

19.  Warrants and Representations of the Noteholder. The Noteholder hereby
represents and warrants to the Company and the Guarantor as follows:

 

(A) The Noteholder has full power and authority to enter into this Note. This
Note when executed and delivered by the Noteholder, will constitute valid and
legally binding obligations of the Noteholder, enforceable in accordance with
the terms of this Note, no further authorization shall be necessary on the part
of the Noteholder for the performance and consummation by the Noteholder of its
obligations pursuant to this Note.

 

(B) The execution, delivery and performance of this Note in accordance with its
terms does not and shall not require approval, consent or authorization of any
third party, including any governmental agency or authority or any political
subdivision thereof, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors’ rights generally and (ii) as limited by laws relating
to the availability of a specific performance, injunctive relief, or other
equitable remedies.

 

(C) Full Disclosure. All the representations and warranties made by the
Noteholder herein or in the Exhibits hereto, and all of the statements,
documents or other information pertaining to the transaction contemplated herein
made or given by the Noteholder, its agents or representatives, are complete and
accurate, and do not omit any information required to make the statements and
information provided, in light of the transaction contemplated herein and in
light of the circumstances under which they were made, not misleading, accurate
and meaningful.

 

20 

   

 

(D) Survival of Warranties. Unless otherwise set forth in this Note, the
warranties, representations and covenants of the Noteholder contained in or made
pursuant to this Note shall survive the execution and delivery of this Note and
shall in no way be affected or limited by any investigation of the subject
matter therefor made by or on behalf the Noteholder.

 

(E) No Defense. It shall not be a defense to a suit for damages for any
misrepresentation or breach of a covenant, representation or warranty that the
Company and/or the Guarantor knew or had reason to know that any covenant,
representation or warranty in this Note contained untrue statement.

 

20. Negative Covenants of the Company and the Guarantor. As long as any of the
Company’s payment obligations pursuant to this Note remain outstanding, and
presuming that the full Initial Drawdown has been made or is being made as
scheduled, or are otherwise due and payable (including all unpaid Principal and
accrued Interest), each of the Company and the Guarantor hereby covenants and
agrees that it will not directly or indirectly do any of the following without
the prior written consent of the Noteholder:

 

  (A) amend, modify or waive the Certificate of Incorporation or By-Laws in a
manner adverse to the Noteholder without the prior written consent of the
Noteholder other than as necessary in order to consummate the contemplated
transaction between the Company, Guarantor and either (i) Noteholder and its
shareholders or, if said contemplated merger transaction is terminated for any
reason, than in connection with a financing or other merger transaction whereby
Noteholder will be paid as a condition of said financing ;         (B) conduct
or operate its business outside of the ordinary course of business;         (C)
incur any indebtedness for borrowed money, pledge or grant any lien or
encumbrance of any kind on any assets of the company other those liens which
already exist or are created on the date hereof and to secure indebtedness for
borrowed money or otherwise, or assume, endorse or otherwise become responsible
for the obligations of any other individual, corporation, partnership, joint
venture, limited liability company, governmental authority, unincorporated
organization, trust, association or other entity (“Person”);         (D) make
any loan, advance or capital contribution to any Person;         (E) enter into,
amend in any material respect, waive or terminate any related party agreement
other than the entry into a related party agreement that is on an arm’s length
basis and on terms no less favorable to the Company than those that could be
obtained from an unaffiliated third party;         (F) enter into or effect any
transaction or series of related transactions involving the purchase, lease,
license, exchange or other acquisition (including by merger, consolidation,
acquisition of stock or acquisition of assets) by the Company of any assets
and/or equity interests of any person other than in the ordinary course of
business,;

 

21 

   

 

  (G)  (a) merge, consolidate, reorganize or take part in any similar
transaction with any other entity that would result in a change of control or
transfer of substantially all of its assets or (b) sell, lease, transfer,
license, pledge, lien, dispose or encumber all or a significant portion of the
assets of the Company, in a single transaction or series of related
transactions;         (H) settle any lawsuit, legal action or other legal
proceeding or otherwise assume any material liability or agree to the provision
of any equitable relief by the Company;         (I) make any investments in any
other person or make any payments to any person including, without limitation,
salary, bonuses and/or consulting fees other than in the ordinary course of
business consistent with past practices;         (J) liquidate, dissolve or
wind-up the business or affairs of the Company and/or the Guarantor or consent
to any of the foregoing or initiate a bankruptcy proceeding involving the
Company and/or the Guarantor; or         (K) Without the prior written consent
of the Noteholder, the Payor and/or the Guarantor is prohibited from declaring a
dividend or any other distribution in whatever form on the Payor’s common stock
and the Guarantor’s common stock.

 

Notwithstanding the foregoing, Paragraph of “B”, “E”, “G”, “H”, “I” of this
Article “20” and of Article “6” of this Note shall be deemed null and void (but
all other provisions shall remain in full force and effect) in the event that
either (i) the Noteholder fails to make any of the drawdowns for any reason as
scheduled, or (ii) this Note or the prospective merger or business acquisition
of the parties are terminated by any Party for any reason (the “Merger
Termination”). In addition, in the event of a Merger Termination, the provisions
of Article “20” of this Note shall all be deemed waived for any action or
transaction whereby the Noteholder is an intended third party beneficiary, and
is in fact repaid simultaneously with, and as a condition of the closing of such
transaction.

 

21. Conditions to Making Advances.

 

(A) The obligation of the Noteholder to make the Initial Advance upon the
execution of this Note, is subject to the fulfillment, on or before such
execution, of each of the following conditions, unless otherwise waived:

 

(i) Representations and Warranties. The representations, warranties and
covenants of the Company and the Guarantor contained in Articles “16” and “18”
of this Note shall be true and correct in all material respects (except that any
representations and warranties which are qualified with respect to materiality
shall be true and correct in all respects) on and as of the date of this Note.

 

22 

   

 

(ii) Performance. The Company shall have performed and complied with all
covenants, agreements, obligations and conditions contained in this Note on or
before the execution of this Note.

 

(iii) Compliance Certificate. The President of the Company shall deliver to the
Noteholder upon the execution of this Note a certificate dated as of the date of
this Note certifying that the conditions specified in Paragraphs “(A)” of this
Article “21” of this Note have been fulfilled.

 

(iv) Qualifications. All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or of any state
that are required in connection with the lawful issuance and sale of the Note
pursuant to this Note shall be obtained and effective as of the date of this
Note.

 

(v) Proceedings and Documents. All corporate and other proceedings in connection
with the transactions contemplated on the date of this Note and all documents
incident thereto shall be reasonably satisfactory in form and substance to the
Noteholder, and the Noteholder (or its counsel) shall have received all such
counterpart original and certified or other copies of such documents as
reasonably requested. Such documents may include good standing certificates.

 

(vi) Consents ; Disclosure Schedules. The Company and the Guarantor shall have,
with the exception of the Creditor Consents and final Disclosure Schedules,
received all the necessary consent, if applicable, including, but not limited
to, from any existing lenders, the Board of Directors of the Company and the
Guarantor with respect to this Note, the Security Agreement and the Guarantee.
The Company and Guarantor shall exercise best efforts in obtaining all necessary
Creditor Consents, all Disclosure Schedules and any other necessary information
which is required to be provided by the Company and Guarantor pursuant to
Articles “17” and “18” of this Note on or prior to September 8, 2017.

 

(B) From and after the date of this Note, additional Advances may be made by the
Noteholder in its sole discretion as set forth in Article “(1)” of this Note. In
no event shall this Note, or any term or provision herein or therein be deemed,
construed or otherwise interpreted to be a commitment to make Advances or extend
additional credit in any respect.

 

22. Collection Costs.

 

The Payor agrees to pay all reasonable costs of collection, which may be paid or
incurred by the Noteholder in connection with the Noteholder’s exercise of its
rights or remedies pursuant to this Note.

 

23. Full Recourse.

 

Anything in this Note to the contrary notwithstanding, the Payor shall be liable
on this Note for the full amount of the principal and any accrued interest due
pursuant to this Note.

 

23 

   

 

24. Miscellaneous.

 

(A) Headings. Headings contained in this Note are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Note.

 

(B) Enforceability. If any provision which is contained in this Note should, for
any reason, be held to be invalid or unenforceable in any respect under the laws
of any jurisdiction, such invalidity or unenforceability shall not affect any
other provision of this Note and this Note shall be construed as if such invalid
or unenforceable provision had not been contained herein.

 

(C) Notices. Any notice or other communication required or permitted hereunder
shall be sufficiently given if sent by (i) mail by (a) certified mail, postage
prepaid, return receipt requested and (b) first class mail, postage prepaid (ii)
overnight delivery with confirmation of delivery or (iii) facsimile transmission
or electronic mail (“E-mail”) with an original mailed by first class mail,
postage prepaid, addressed as follows:

 

  To the Payor: Digiliti Money, Inc.     18671 Lake Drive East,     delFive
Business Park G,     Minneapolis, MN 55317     Attn: Bryan D. Meier, CEO    
Email:bmeier@digilitimoney.com

 

  With a copy to:       CKR Law, LLP     1330 Avenue of the Americas, 14th Floor
    New York, New York 10019     Attn: Ron Levy, Esq.     Email:
Rlevy@CKRLaw.com

 

  To the Guarantor: Digiliti Money Global, Inc.     18671 Lake Drive East,    
delFive Business Park G,     Minneapolis, MN 55317     Attn: Bryan D. Meier, CEO
    Email: bmeier@digilitimoney.com

 

  With a copy to: CKR Law, LLP     1330 Avenue of the Americas, 14th Floor    
New York, New York 10019     Attn: Ron Levy, Esq.     Email: Rlevy@CKRLaw.com

 

  To the Noteholder:   UFT Equities Inc.     75 Broad Street, Suite 2410     New
York, NY 10004     Attn: Richard Steggall, CEO     Facsimile No.: (212) 392-4721
    Email: richard@urbanft.com

 

24 

   

 

  With a copy to: The Mintz Fraade Law Firm, P.C.     271 Madison Avenue, 12th
Floor     New York, New York 10016     Attn: Frederick M. Mintz, Esq.    
Facsimile No.: (212) 486-0701     E-Mail: FMM@mintzfraade.com

 

or in each case to such other address, E-mail address and facsimile number as
shall have last been furnished by like notice. If all of the methods of notice
set forth in this Paragraph “(C)” of this Article “24” of this Note are
impossible for any reason, notice shall be in writing and personally delivered
to the aforesaid addresses. Each notice or communication shall be deemed to have
been given as of the following applicable dates:

 

i. If sent by mail, five (5) days after the later of sending by (a) certified
mail, postage prepaid, return receipt requested or (b) first class mail.

 

ii. If sent by overnight delivery, as of the date of delivery with confirmation
of delivery.

 

iii. If sent by E-mail or facsimile, either: (a) as of the date so sent if a
copy thereof is also mailed by first class mail on the date sent by E-mail or
facsimile or (b) if a copy thereof is not mailed by first class mail on the date
sent by E-mail or facsimile, then five (5) days after sending by first class
mail.

 

iv. If delivered by personal delivery, as of the date of delivery.

 

(D) Governing Law; Disputes. In view of the fact that: (i) the Company was
formed pursuant to the laws of the State of Minnesota; (ii) the Guarantor was
formed pursuant to the laws of the State of Delaware; (iii) the Noteholder was
formed pursuant to the laws of the State of Delaware; and (iv) the Noteholder
has offices in the State of New York, in order to avoid the question of which
state law shall be applicable, the Parties hereto agree that:

 

i. This Note shall in all respects be construed, governed, applied and enforced
in accordance with the laws of the State of New York and be deemed to be an
agreement entered into in the State of New York and made pursuant to the laws of
the State of New York, without giving effect to the principles of conflicts of
law. Moreover, the parties agree this Note shall in all respects be construed,
governed, applied and enforced in accordance with the laws of the State of New
York and be deemed to be an agreement entered into in the State of New York and
made pursuant to the laws of the State of New York without giving effect to the
principles of conflicts of law.

 

25 

   

 

ii. With respect to the entire subject matter of any and all disputes relating
to or arising pursuant to this Note, the Parties agree that all such disputes
shall be resolved in the Courts in the County of New York, State of New York,
and the Parties irrevocably waive any right to the following: (A) a trial by
jury; and (B) removal of any action from the Supreme Court of the State of New
York, County of New York, to any United States District Court, including, but
not limited to, the United States District Court for the Southern or Eastern
Districts of New York. It is further agreed that with respect to any claim by
the parties with respect to any matter the Parties hereby: (1) specifically
designate the Courts in the County of New York, State of New York as properly
having venue (2) consent to and irrevocably and exclusively submit to personal
jurisdiction over each of them by the Supreme Court of the State of New York,
County of New York, and (3) waive personal service of any and all process and
specifically consent that in any such action or proceeding, any service of
process may be effectuated upon any of them by certified mail, return receipt
requested, to the addresses set forth in Paragraph “C” of this Article “24” of
this Note, or to such other address as shall be designated by written notice to
the other Party. The Parties agree that the prevailing party in any and all
disputes relating to or arising pursuant to this Note as determined by the Court
shall be entitled to reasonable costs and attorney’s fees as determined by the
Court

 

(E) Authorization. The Company hereby represents to the Noteholder that this
Note has been duly authorized and that the individual executing this Note on
behalf of the Company is duly authorized to do so.

 

(F) Exhibits. All Exhibits annexed or attached to this Note are incorporated
into this Note by reference thereto and constitute an integral part of this
Note.

 

(G) Entire Agreement. This Note and all documents and instruments referred to
herein (i) constitute the entire agreement and supersede all prior and
contemporaneous agreements and understandings, excluding any agreements which
are referred to in this Note or any of the documents or instruments required to
be executed pursuant to this Note, both written and oral, among the parties with
respect to the subject matter hereof and thereof, and (ii) are not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder.

 

(H) No Assignment. The parties hereby agree that the Payor’s rights and
obligations under this Note shall not be transferred or assigned to any third
parties without the prior written consent of the Noteholder. The parties hereby
further agree that the Noteholder’s rights and obligations under this Note may
be transferred or assigned to any third party provided such third party is not a
direct competitor of the Payor.

 

(I) Further Assurances. The Parties agree to execute any and all such other
further instruments and documents, and to take any and all such further actions
which are reasonably required to effectuate this Note and the intents and
purposes hereof.

 

(J) Non-Waiver. Except as otherwise expressly provided herein, no waiver of any
covenant, condition, or provision of this Note shall be deemed to have been made
unless expressly in writing and signed by the party against whom such waiver is
charged; and (i) the failure of any party to insist in any one or more cases
upon the performance of any of the provisions, covenants or conditions of this
Note or to exercise any option herein contained shall not be construed as a
waiver or relinquishment for the future of any such provisions, covenants or
conditions, (ii) the acceptance of performance of anything required by this Note
to be performed with knowledge of the breach or failure of a covenant, condition
or provision hereof shall not be deemed a waiver of such breach or failure and
(iii) no waiver by any party of one breach by another party shall be construed
as a waiver of any other or subsequent breach.

 

26 

   

 

(K) Binding upon Execution and Delivery. No party to this Note shall be bound
hereby until fully executed counterparts to this Note have been executed by, and
delivered to, each party, or their respective attorneys, by all other parties or
their respective attorneys.

 

(L) Construction. Each of the parties to this Note hereby further acknowledges
and agrees that (i) each has been advised by counsel during the course of
negotiations or had the opportunity to be advised by counsel (ii) each counsel
has had significant input in the development of this Note and (iii) this Note
shall not, therefore, be construed more strictly against Urban FT, Inc., because
The Mintz Fraade Law Firm, P.C. drafted this Note, regardless of any presumption
or rule requiring construction against the party whose attorney drafted this
Note.

 

(M) Modifications. This Note may not be changed, modified, extended, terminated
or discharged orally, except by a written Note specifically referring to this
Note which is signed by the Payor and the Noteholder.

 

(N) Third Party Beneficiaries. This Note and all documents and instruments
referred to herein are not intended to confer upon any person (other than the
parties to this Note and their respective heirs, executors, administrators,
personal representatives, successors and assigns) any legal or equitable right
or remedy of any nature whatsoever pursuant to or by reason of this Note.

 

(O) Binding Agreement. This Note shall be binding upon and inure to the benefit
of the parties to this Note and their heirs, executors, administrators, personal
representatives, successors and assigns. Subject to this Paragraph “(O)” of this
Article “24” of this Note, nothing in this Note shall be construed to give to
any person or corporation other than the Payor and the Noteholder any legal or
equitable right, remedy or cause under this Note.

 

(P) Severability. The provisions of this Note shall be deemed separable.
Therefore, if any part of this Note is rendered void, invalid or unenforceable,
such rendering shall not affect the validity or enforceability of the remainder
of this Note.

 

(Q) Facsimile and E-mail Signatures. Any signature which is delivered via
facsimile or via E-mail in portable document format (“.pdf”) shall be deemed to
be an original and have the same force and effect as if such facsimile or .pdf
signature were the original thereof.

 

(R) Counterparts. This Note may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

27 

   

 

IN WITNESS WHEREOF, the Parties have executed this Note and agree to be bound by
its terms and conditions.

 

  Digiliti Money, Inc.       By: /s/ Bryan D. Meier     Bryan D. Meier, Interim
CEO         Digiliti Money Global, Inc.         By: /s/ Bryan D. Meier     Bryan
D. Meier, Interim CEO         By: /s/ James L. Davis     James L. Davis,
Chairman

 

Agreed to   UFT Equities Inc.     By: /s/ Richard Steggall     Richard Steggall,
CEO  

 

Exhibits and Schedules:   Exhibit “A” Security Agreement   Exhibit “B” Guarantee
of Digiliti Money Group, Inc.   Exhibit “C” Financial Statements   Exhibit “D”
Disclosure Schedule   Exhibit “E” Guarantor Capitalization

 

28 

   

 

Exhibit “A”

 

Security Agreement

 

29 

   

 

Exhibit “B”

 

Guarantee of Digility Money Group, Inc.

 

30 

   

 

Exhibit “C”

 

Financial Statements

 

Schedule 17(I) Audited consolidated balance sheet and statements of income and
cash flows as of and for the twelve months ended December 31, 2016 and December
31, 2015       Unaudited consolidated balance sheet and statements of income and
cash flows as of and for the six months ended June 30, 2017

 

31 

   

 

Exhibit “D”

 

Disclosure Schedule

 

Schedule 17(F) Digiliti Money Group, Inc. (the “Guarantor”) holds 100% of the
outstanding common stock in Digiliti Money, Inc. (the “Company”)     Schedule
17(H) Listing of all Company Intellectual Property that is registered with any
governmental authority or for which an application to a regulatory authority has
been made     Schedule 17(I) Financial Statements are provided in Exhibit “C”  
    Listing of obligations under contracts and commitments made in the ordinary
course of business that are not required to be reflected in financial statements
prepared in accordance with GAAP     Schedule 17(K) Listing of pending or
threatened litigation     Schedule 17(L) Listing of standard employee benefits
made available to all employees     Schedule 17(N) Listing of amounts due as of
September 1, 2017 to any employees, consultants or independent contractors for
any wages, salaries, commissions, bonuses, or other direct compensation for any
service performed       Description of the Company’s policy, practice, plan or
program of paying severance pay       Executive Employment Agreements with Bryan
Meier, Randy Hunter Wolfe. Bruce Whitmore and Christopher F. Ebbert     Schedule
17(O) Unaudited consolidated balance sheet and statements of income and cash
flows as of and for the seven months ended July 31, 2017     Schedule 17(P)
Listing of taxes due and payable by the Company which have not been timely paid
    Schedule 17(R) Associate Agreement required to be signed by all employees of
the Company     Schedule 17(T) Certificate of Incorporation       Bylaws of the
Company

 

32 

   

 

Exhibit “E”

 

Guarantor Capitalization

 

Listing of all outstanding equity interests by shareholder as of September 1,
2017

 

Listing of outstanding warrants to purchase common stock as of September 1, 2017

 

Listing of outstanding stock options as of September 1, 2017

 

33