Exhibit 10.6

 

Board Observer Agreement

 

This Board Observer Agreement (this “Agreement”) is made effective as of
November 17, 2020, by and between Digerati Technologies, Inc., a Nevada
corporation (the “Company”), and Post Road Special Opportunity Fund II LP, a
Delaware limited partnership (the “Investor”).

 

WHEREAS, pursuant to and subject to the terms and conditions of that certain
Warrant to Purchase Common Stock of the Company issued by the Company to the
Investor dated as of the date hereof (as amended, modified, or supplemented, the
“Warrant”), the Investor is entitled to purchase shares of common stock of the
Company (the “Common Stock”); and

 

WHEREAS, in conjunction with the Warrant, the Company desires to provide the
Investor with certain observation rights regarding the Company’s and each of its
Subsidiaries’ (as such term is defined in the Warrant) boards of directors,
boards of governors or managers, or other similar governing bodies
(collectively, the “Boards”) and committees thereof (collectively, the
“Committees”), as further described, and subject to the terms and conditions set
forth, herein.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:

 

1. Observer Rights.

 

1.1 The Company grants, and shall cause each of its Subsidiaries to grant, to
the Investor the option and right to appoint a representative (the “Observer”)
to attend all meetings (including telephonic or videoconference meetings and
meetings held in executive session) of all Board and Committees in a non-voting,
observer capacity. The Observer may participate fully in discussions of all
matters brought to any Board or Committee, as the case may be, for consideration
(without any authority of a member thereof), but in no event shall the Observer
(i) be deemed to be a member of any Board or Committee; (ii) except for (and
without limitation of) the obligations expressly set forth in this Agreement,
have or be deemed to have, or otherwise be subject to, any duties (fiduciary or
otherwise) to the Company, the Subsidiaries or their stockholders or other
equity holders or owners; or (iii) have the right to propose or offer any
motions or resolutions to any Board or Committee. The Company shall allow, and
shall cause its Subsidiaries to allow, the Observer to attend any Board or
Committee meetings in-person or by telephone or electronic communication at the
election of the Observer, at his or her sole option. The presence of the
Observer shall not be taken into account or required for purposes of
establishing a quorum.

 

1.2 The Company shall provide, and shall cause its Subsidiaries to provide, to
the Observer copies of all notices, minutes, consents, and other materials that
it provides to members of any Board (collectively, “Board Materials”), including
any draft versions, proposed written consents, and exhibits and annexes to any
such materials, at the same time and in the same manner as such information is
delivered to such Board members; provided, however, in connection with the
foregoing, the Company shall, and shall cause its Subsidiaries to, provide the
Observer with any and all Board Materials at least 48 hours in advance of any
meeting or action by written consent.

 

 

 

 

1.3 Notwithstanding anything herein to the contrary, the Company and its
Subsidiaries may exclude the Observer from access to any Board Materials,
meeting, or portion thereof if the applicable Board concludes, acting in good
faith (and, in the case of clause (i), upon the written advice of the Company’s
or its Subsidiary’s outside counsel, as applicable), that (i) such exclusion is
reasonably necessary to preserve the attorney-client or work product privilege
between the Company or such Subsidiary and its counsel (provided, however, that
any such exclusion shall only apply to such portion of such material or meeting
which would be required to preserve such privilege); or (ii) such exclusion is
necessary to avoid a conflict of interest or disclosure of a trade secret
(provided, however, that any such exclusion shall only apply to such portion of
such material or meeting which would be required to avoid such conflict of
interest or disclosure of such trade secret).

 

1.4 The parties agree that neither the Company nor its Subsidiaries nor any
member of any Board or Committee shall be entitled to rely on any statements or
views expressed by the Observer in any Board or Committee meeting.

 

1.5 The Company will, and will cause its Subsidiaries to, cause each Board to
meet telephonically or in-person not less often than once per fiscal quarter and
in-person not less often than once per fiscal year.

 

1.6 Any other provision of this Agreement notwithstanding, the Observer shall
have no duties, except as expressly provided herein; shall not be considered a
member of any Board or Committee – de facto or otherwise; and shall have no
authority with respect to any process of any Board or Committee.

 

2. Confidential Information.

 

2.1 To the extent that any information obtained by the Observer from the Company
or its Subsidiaries (or any director, governor, manager, officer, employee, or
agent thereof) is Confidential Information (as defined below), the Investor
shall, and shall cause the Observer to, treat any such Confidential Information
as confidential in accordance with the terms and conditions set out in this
Section 2.

 

2.2 As used in this Agreement, “Confidential Information” means any and all
information or data concerning the Company or its Subsidiaries, whether in
verbal, visual, written, electronic, or other form, which is disclosed to the
Observer in his role as Observer by the Company or its Subsidiaries or any
director, governor, manager, officer, employee, or agent of the Company or its
Subsidiaries (including all Board Material that is non-public information),
together with all information discerned from, based on, or relating to any of
the foregoing which may be prepared or created by the Observer, the Investor, or
any of its affiliates, or any of their respective directors, officers,
employees, agents, or advisors (each, a “Representative”); provided, however,
that “Confidential Information” shall not include information that:

 

(a) is or becomes generally available to the public other than as a result of
disclosure of such information by the Investor, any of its affiliates, any of
their Representatives, or the Observer;

 

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(b) is independently developed by the Investor, any of its affiliates, any of
their Representatives, or the Observer without use of Confidential Information
provided by the Company or by any director, governor, manager, officer,
employee, or agent thereof;

 

(c) becomes available to the recipient of such information at any time on a
non-confidential basis from a third party that is not, to the recipient's
knowledge, prohibited from disclosing such information to the Investor or any of
its affiliates, any of their respective Representatives, or the Observer by any
contractual, legal, or fiduciary obligation to the Company; or

 

(d) was known by the Investor, any of its affiliates, or the Observer prior to
receipt from the Company or from any director, officer, employee, or agent
thereof.

 

2.3 The Investor shall, and shall cause the Observer to (a) retain all
Confidential Information in strict confidence; (b) not release or disclose
Confidential Information in any manner to any other person (other than
disclosures to the Investor, its affiliates, or to any of its or their
Representatives who (i) have a need to know such information; and (ii) are
informed of its confidential nature); and (c) use the Confidential Information
solely in connection with (i) the Investor’s and Observer’s rights hereunder; or
(ii) monitoring, reviewing, and analyzing the Investor's or its affiliates’
investment in or loan to the Company or its Subsidiaries and not for any other
purpose; provided, however, that the foregoing shall not apply to the extent the
Investor, its affiliates, any of its or their Representatives, or the Observer
is compelled to disclose Confidential Information by judicial or administrative
process, pursuant to the advice of its outside counsel, or by requirements of
law; provided, further, however, that, if legally permissible, the disclosing
party shall use commercially reasonable efforts to notify the Company so that
the Company or its Subsidiaries may take action, at its expense, to prevent such
disclosure and any such disclosure is limited only to that portion of the
Confidential Information which such person is compelled to disclose.

 

2.4 The Investor, on behalf of itself and the Observer, acknowledges that the
Confidential Information is proprietary to the Company and/or its Subsidiaries
and may include trade secrets or other business information the disclosure of
which could harm the Company. None of the Investor, any of its affiliates, their
Representatives, or the Observer shall, by virtue of the Company’s or its
Subsidiaries’ disclosure of, or such person’s use of any Confidential
Information, acquire any rights with respect thereto, all of which rights
(including intellectual property rights) shall remain exclusively with the
Company and/or its Subsidiaries. The Investor shall be responsible for any
breach of this Section 2 by the Observer, any of its affiliates, or its or their
Representatives.

 

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2.5 The Investor agrees that, upon the request of the Company following a
Termination (as defined below), it will (and will cause the Observer, its
affiliates, and its and their Representatives to) promptly (a) destroy all
physical materials containing or consisting of Confidential Information and all
hard copies thereof in their possession or control; and (b) destroy all
electronically stored Confidential Information in their possession or control;
provided, however, that each of the Investor, its affiliates, and its and their
Representatives may retain any electronic or written copies of Confidential
Information as may be (i) stored on its electronic records or storage system
resulting from automated back-up systems; (ii) required by law, other regulatory
requirements, or internal document retention policies; or (iii) contained in
board presentations or minutes of board meetings of the Investor or its
affiliates; provided, further, however, that any such retained Confidential
Information shall remain subject to this Section 2.

 

3. Expenses. The Company agrees to reimburse the Investor promptly for
reasonable out-of-pocket expenses, including, but not limited to, travel
expenses, incurred in connection with the Observer’s attendance at any Board or
Committee meeting.

 

4. Indemnification; Advancement of Expenses. The Observer shall be entitled to
advancement of expenses and rights to indemnification from the Company and its
Subsidiaries to the same extent provided by the Company and/or its Subsidiaries
to their governors, directors or managers under the Articles of Incorporation,
Bylaws or other charter or governing documents of the Company and/or its
Subsidiaries as in effect on the date hereof or, if more favorable, any
indemnification agreement with any of the Company’s or its Subsidiaries’
governors, directors or managers. The Company acknowledges and agrees, and shall
cause its Subsidiaries to acknowledge and agree, that the foregoing rights to
indemnification and advancement of expenses constitute third-party rights
extended to the Observer by the Company and its Subsidiaries and do not
constitute rights to indemnification or advancement of expenses as a result of
the Observer serving as a director, officer, employee, or agent of the Company
or its Subsidiaries. During the period of an Observer’s appointment hereunder,
and thereafter for the duration of the applicable statute of limitations, in the
event that the Company and/or its Subsidiaries maintain in effect a policy of
liability insurance coverage for members of any Board, the Company shall cause
to be maintained in effect a policy of liability insurance coverage for such
Observer against liability that may be asserted against or incurred by him or
her in his or her capacity as an Observer which is equivalent in scope and
amount to that provided to the members of the Boards.

 

5. Notices. Notices are to be delivered in writing, in the case of the Company,
to 825 W. Bitters, Suite 104, San Antonio, Texas, Attn: 78216, Attn: Antonio
Estrada with a copy to (which shall not constitute notice) Lucosky Brookman LLP,
101 Wood Avenue South, Woodbridge, NJ 08830, Attention: Seth Brookman, Email:
SBrookman@lucbro.com, and in the case of the Investor, to Post Road
Administrative LLC, 2 Landmark Square, Suite 207, Stamford, Connecticut 06901,
with a copy to (which shall not constitute notice) Duane Morris LLP, 100
International Drive, Suite 700, Baltimore, Maryland 21202-5184, Attention:
Michael C. Hardy, Email: MCHardy@duanemorris.com, or to such other address as
may be given by each party from time to time under this Section. Notices shall
be deemed properly given upon personal delivery, the day following deposit by
overnight carrier, or three (3) days after deposit in the U.S. mail.

 

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6. Miscellaneous Provisions. This Agreement constitutes the entire agreement and
understanding of the parties, and supersedes any and all previous agreements and
understandings, whether oral or written, between the parties regarding the
matters set out in this Agreement. No provision of this Agreement may be
amended, modified, or waived, except in a writing signed by the parties hereto.
The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision, and if any
restriction in this Agreement is found by a court to be unreasonable or
unenforceable, then such court may amend or modify the restriction so it can be
enforced to the fullest extent permitted by law. The section headings in this
Agreement have been inserted as a matter of convenience of reference and are not
a part of this Agreement. This Agreement may be executed by electronic signature
in any number of counterparts, each of which together shall constitute one and
the same instrument. Any waiver by any party hereto of a breach of any provision
of this Agreement shall not operate or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist on strict adherence to any term of
this Agreement on one or more occasions shall not be construed as a waiver or
deprive such party of the right to thereafter insist on strict adherence to that
term or any other term of this Agreement. The Company shall cause any future
Subsidiary to execute and deliver a joinder agreeing to be bound by all the
provisions hereof as a Subsidiary hereunder, in form and substance satisfactory
to the Investor.

 

7. Remedies. The Company (on behalf of itself and its Subsidiaries), on the one
hand, and the Investor, on the other hand, each acknowledge and agree that
monetary damages would not be a sufficient remedy for any breach (or threatened
breach) of this Agreement by it and that, in the event of any breach or
threatened breach hereof, (a) the non-breaching party shall have the right to
immediate injunctive and other equitable relief, without proof of actual
damages; (b) the breaching party will not plead in defense thereto that there
would be an adequate remedy at law; and (c) the breaching party agrees to waive
any applicable right or requirement that a bond be posted by the non-breaching
party. Such remedies will not be the exclusive remedies for a breach of this
Agreement, but will be in addition to all other remedies that may be available
to the non-breaching party at law or in equity.

 

8. Applicable Law. This Agreement, and any and all claims, controversies, and
causes of action arising out of or relating to this Agreement, whether sounding
in contract, tort, or statute, shall be governed by the laws of Nevada,
including its statutes of limitations, without giving effect to any
conflict-of-laws rule that would result in the application of the laws of a
different jurisdiction. Each party irrevocably waives the right to trial by
jury.

 

9. Termination. This Agreement shall terminate and be of no further force and
effect (a “Termination”) upon the later of: (a) any failure of the Investor and
its affiliates/permitted transferees to hold any Common Stock of the Company or
other securities of the Company or its Subsidiaries; and (b) any failure of the
Investor and its affiliates/permitted transferees to hold the Warrant; provided,
that Section 2, Section 4, Section 6, Section 7, and Section 8 shall survive any
such termination or expiration.

 

[signature page follows]

 

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

 

DIGERATI TECHNOLOGIES, INC.,

a Nevada corporation

  POST ROAD SPECIAL OPPORTUNITY FUND II LP,
a Delaware limited partnership       By:     By: Name: Arthur L. Smith   Name:
Title: Chief Executive Officer   Title: Authorized Signatory

 

ACKNOWLEDGED AND ACCEPTED as of the date first written above:

 

T3 COMMUNICATIONS, INC.,
a Nevada corporation   T3 COMMUNICATIONS, INC.,
a Florida corporation       By:     By: Name: Arthur L. Smith   Name: Arthur L.
Smith Title: Chief Executive Officer   Title: Chief Executive Officer      
SHIFT8 NETWORKS, INC.,
a Texas corporation   NEXOGY ACQUISITION, INC.,
a Florida corporation       By:     By:   Name: Arthur L. Smith   Name: Arthur
L. Smith Title: Chief Executive Officer   Title: Chief Executive Officer

 

[Signature Page to Board Observer Agreement]