Unassociated Document


    Exhibit
10.1

     

    SECURITIES
PURCHASE AGREEMENT

     

    This
SECURITIES PURCHASE AGREEMENT
(this “Agreement”) is dated
as of November 5, 2009, between SMSA El Paso II Acquisition Corp., a Nevada
corporation (“SMSA”), and Michael
Campbell, an individual residing in Tustin, California (the “Purchaser”).

     

    WHEREAS, subject to the terms,
conditions and limitations set forth in this Agreement, SMSA wishes to sell, and
Purchaser wishes to purchase, an aggregate of 20 million shares (the “Shares”)
of the common stock of SMSA par value $0.001 per share (the “Common Stock”);
and

     

    WHEREAS, the consideration for
the Shares shall be $0.001 per share of Common Stock for a total of $20,000 (the
“Common Stock Purchase
Price” or the “Purchase
Price”).

     

    NOW, THEREFORE, in
consideration of the mutual covenants contained in this Agreement, and for other
good and valuable consideration the receipt and adequacy of which are hereby
acknowledged, SMSA and the Purchaser agree as follows:

    


    ARTICLE
I.

    


    DEFINITIONS

    


    1.1           Definitions.  In
addition to the terms defined elsewhere in this Agreement, the following terms
have the meanings set forth in this Section 1.1:

     

     “Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person, as such terms are
used in and construed under Rule 405 under the Securities Act.

     

    “Board of Directors”
means a board of directors of SMSA.

     

    “Business Day” means
any day except any Saturday, any Sunday, any day which is a federal legal
holiday in the United States or any day on which banking institutions in the
State of New York are authorized or required by law or other governmental action
to close.

     

     “Closing” means the
closing of the purchase and sale of the Shares pursuant to Section
2.1.

     

    “Closing Date” means
the Trading Day on which all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all conditions precedent to (i)
the Purchaser’s obligations to pay the Purchase Price and (ii) SMSA’s
obligations to deliver the Shares, in each case, have been satisfied or
waived.

     

    “Commission” means the
United States Securities and Exchange Commission.

     

    “Common Stock” means
the common stock of SMSA, par value $0.001 per share, and any other class of
securities into which such securities may hereafter be reclassified or
changed.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Common Stock
Equivalents” means any securities of SMSA which would entitle the holder
thereof to acquire at any time Common Stock, including, without limitation, any
debt, preferred stock, rights, options, warrants or other instrument that is at
any time convertible into or exercisable or exchangeable for, or otherwise
entitles the holder thereof to receive, Common Stock.

     

    “Contribution
Agreement” means that certain Contribution Agreement between SMSA, Gerard
Pascale and the Purchaser pursuant to which Mr. Pascale will agree to the return
and cancellation of 3 million shares of Common Stock, in consideration for the
retention of 1.5 million shares of Common Stock (the “Cancellation
Fee”).

     

    “Escrow Agreement”
means that certain Escrow Agreement to be entered into by and among HFG, as
hereinafter defined, SMSA, the Purchaser and Securities Transfer Corporation, as
escrow agent, providing for the retention of the Shares in escrow until such
time HFG is paid the Consulting Fee, as hereinafter defined, or the Shares shall
be delivered to HFG under the terms of the escrow.

     

     “Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

    


    “Exempt Issuance”
means the issuance of Common Stock issuable upon a stock split, stock dividend
or any subdivision of shares of Common Stock.

    


    “Halter Advisory
Agreement” means that certain Advisory Agreement by and between SMSA and
Halter Financial Group, L.P. (“HFG”) pursuant to which HFG will receive a fee of
$250,000 (the “Consulting Fee”).

    


    “Liens” means a lien,
charge, security interest, encumbrance, right of first refusal, preemptive right
or other restriction.

    


    “Person” means an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.

    


    “Preferred Stock”
shall mean the Preferred Stock of SMSA, par value $.001 per share.

    


    “Proceeding” means an
action, claim, suit, investigation or proceeding (including, without limitation,
an informal investigation or partial proceeding, such as a deposition), whether
commenced or threatened.

    


     “Rule 144” means Rule
144 promulgated by the Commission pursuant to the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.

    


    “Rule 424” means Rule
424 promulgated by the Commission pursuant to the Securities Act, as such Rule
may be amended or interpreted from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.

    


    “Shares” has the
meaning set forth in the Preamble.

    


    “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

    


     “Short Sales” means
all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange
Act (but shall not be deemed to include the location and/or reservation of
borrowable shares of Common Stock).

    


    “Trading Day” means a
day on which the principal Trading Market is open for trading.

     

    
      
        
        

      

      
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    “Trading Market” means
any of the following markets or exchanges on which the Common Stock is listed or
quoted for trading on the date in question: the NYSE Amex, the Nasdaq Capital
Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York
Stock Exchange or the OTC Bulletin Board (or any successors to any of the
foregoing).

    


    “Transaction
Documents” means this Agreement, the Contribution Agreement, the Halter
Advisory Agreement, the Escrow Agreement and all exhibits and schedules thereto
and hereto and any other documents or agreements executed in connection with the
transactions contemplated hereunder.

    


    “Transfer Agent” means
Securities Transfer Corporation, the current transfer agent of SMSA, and any
successor transfer agent of SMSA.

     

    
      ARTICLE
II.

      


      PURCHASE
AND SALE

      


      2.1           Closing.  On
the Closing Date, upon the terms and subject to the conditions set forth herein,
SMSA agrees to sell, and the Purchaser agrees to purchase, an aggregate of 20
million shares of Common Stock.  Purchaser shall deliver to SMSA a
personal check equal to the Purchase Price and SMSA shall deliver to Purchaser a
certificate representing the Shares.  SMSA and Purchaser shall each
deliver to the other items set forth in Section 2.2 deliverable at the
Closing.  Upon waiver or satisfaction of the covenants and conditions
set forth in Sections 2.2 and 2.3, the Closing shall occur at such location as
the parties shall mutually agree.

       

      2.2           Deliveries.

       

      (a)           On
or prior to the Closing Date, SMSA shall deliver or cause to be delivered to the
Purchaser the following:

       

      
        	
                 
      

              	
                (i)

              	
                the
      Transaction Documents signed by
SMSA;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                a
      certificate evidencing 20 million shares of Common
  Stock;

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                resignation
      letters of such officers and directors of SMSA as the Purchaser may
      specify in its sole discretion in writing prior to the Closing, and
      resolutions of the SMSA’s board appointing Michael Campbell as the sole
      officer of SMSA and as a director of SMSA, to serve in such capacity until
      the next annual meeting of SMSA’s stockholders or his sooner replacement,
      as applicable;

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                a
      certificate of the secretary of each  SMSA (a) certifying that
      all conditions to Closing have been met, as well as the incumbency of the
      and SMSA’s officers executing the Agreement; (b) attaching copies of
      resolutions of the Board of Directors SMSA (x) approving the transactions
      contemplated by this Agreement, and (y) in the case of SMSA, the
      appointment of such directors and officers as may be designated by
      Purchaser to the Board of Directors of SMSA, which resolutions shall in
      each case be in full force and effect; (c) attaching copies certified by
      the Secretary of State of the State of Nevada of SMSA’s Articles of
      Incorporation, as amended, and (d) attaching a true and complete copy of
      SMSA’s bylaws, as amended, which shall be in full force and effect;
      and

              


      

       

      
        
          
          

        

        
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                  (v)

                	
                  a copy of the Certificate of
      Compliance as filed with the USBankruptcy court necessary to
      satisfy SMSA’s obligations underits confirmed plan of
      bankruptcy.

                


        

      

      


      (b)           On
or prior to the Closing Date, Purchaser shall deliver or cause to be delivered
to SMSA the following:

       

      
        	
                 
      

              	
                (i)

              	
                this
      Agreement duly executed by Purchaser;
and

              


      

       

      
        	
              	
                (ii) 

              	
                all
      other Transaction Documents, duly executed by
  Purchaser.

              


      

      


      
        	
                 
      

              	
                2.3

              	
                Closing
      Conditions.

              


      

       

      (a)           The
obligations of SMSA hereunder in connection with the Closing are subject to the
following conditions being met:

       

      (i)           the
accuracy in all material respects on the Closing Date of the representations and
warranties of the Purchaser contained herein (unless as of a specific date
therein);

       

      (ii)           all
obligations, covenants and agreements of Purchaser required to be performed at
or prior to the Closing Date shall have been performed; and

       

      (iii)           the
delivery by Purchaser of the items set forth in Section 2.2(b) of this
Agreement.

       

      (b)           The
obligations of the Purchaser hereunder in connection with the Closing are
subject to the following conditions being met:

       

      (i)           the
accuracy in all material respects when made and on the Closing Date of the
representations and warranties of SMSA contained herein (unless as of a specific
date therein);

       

      (ii)           all
obligations, covenants and agreements of SMSA required to be performed at or
prior to the Closing Date shall have been performed;

       

      (iii)           the
delivery by SMSA of the items set forth in Section 2.2(a) of this
Agreement;

       

      (iv)           there
shall have been no Material Adverse Effect with respect to the SMSA since the
date hereof; and

       

      (vii)           from
the date hereof to the Closing Date, no banking moratorium shall have been
declared either by the United States or New York State authorities nor shall
there have occurred any material outbreak or escalation of hostilities or other
national or international calamity of such magnitude in its effect on, or any
material adverse change in, any financial market which, in each case, in the
reasonable judgment of Purchaser, makes it impracticable or inadvisable to
purchase the Shares at the Closing.

       

      
        
          
          

        

        
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      ARTICLE
III.

      


      REPRESENTATIONS
AND WARRANTIES

      


      3.1           Representations and
Warranties of SMSA.  Except as set forth in the SEC Reports,
which SEC Reports shall be deemed a part hereof and shall qualify any
representation or otherwise made herein to the extent of the disclosure
contained in the applicable SEC Report, SMSA hereby makes the following
representations and warranties to Purchaser as of the Closing Date:

       

      (a)           Subsidiaries. SMSA
has no subsidiaries. SMSA’s former wholly-owned subsidiary, Trans Global
Operations, Inc., has been dissolved and at the time of its dissolution had no
assets or liabilities.

       

      (b)           Organization and
Qualification.  SMSA is an entity duly incorporated or
otherwise organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted.  SMSA is not in violation or default of any of
the provisions of its certificate or articles of incorporation, bylaws or other
organizational or charter documents.  SMSA is duly qualified to
conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not
have or reasonably be expected to result in: (i) a material adverse effect on
the legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of SMSA, taken as a whole, or
(iii) a material adverse effect on SMSA’s ability to perform in any material
respect on a timely basis its obligations under any Transaction Document (any of
(i), (ii) or (iii), a “Material Adverse
Effect”) and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such
power and authority or qualification.  Notwithstanding the foregoing,
the following events, changes, conditions or
effects shall not be deemed to have a “Material Adverse Effect:”
(A) any action or omission of SMSA taken with the prior written
consent of the Purchaser; or (B) any violations or other matters that occur as a
result of the taking of any action expressly required by this Agreement or the
failure to take any action prohibited from being taken by this
Agreement.

       

      (c)           Authorization;
Enforcement.  SMSA has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder.  The execution and delivery of each of the
Transaction Documents by SMSA and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
action on the part of SMSA and no further action is required by SMSA, the Board
of Directors or SMSA’s stockholders in connection therewith.  Each
Transaction Document to which it is a party has been (or upon delivery will have
been) duly executed by SMSA and, when delivered in accordance with the terms
hereof and thereof, will constitute the valid and binding obligation of SMSA
enforceable against SMSA in accordance with its terms, except: (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

       

      
        
          
          

        

        
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      (d)           No
Conflicts.  The execution, delivery and performance by SMSA of
the Transaction Documents, the sale of the Shares and the consummation by it of
the transactions contemplated hereby and thereby to which it is a party do not
and will not: (i) conflict with or violate any provision of SMSA’s articles of
incorporation, bylaws or other organizational or charter documents, (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of SMSA, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a SMSA debt or otherwise) or other understanding to which
SMSA is a party or by which any property or asset of SMSA is bound or affected,
or (iii) conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which SMSA is subject (including federal and state
securities laws and regulations), or by which any property or asset of SMSA is
bound or affected; except in the case of each of clauses (ii) and (iii), such as
could not have or reasonably be expected to result in a Material Adverse
Effect.

       

      (ii)           There
are no contracts, agreements or understandings, oral or written, to which SMSA
is party which in any way prohibit or restrict, either currently, with the
passage of time or the giving of notice, SMSA from engaging in any lawful
business in any location anywhere in the world whatsoever.

       

      (e)           Filings, Consents and
Approvals.  SMSA is not required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by SMSA of the Transaction Documents, other than such
filings as are required to be made under applicable state securities
laws.

       

      (f)           Issuance of the
Shares. The Shares when issued shall be duly authorized, duly and
validly issued, fully paid and nonassessable, free and clear of all Liens
imposed by SMSA other than restrictions on transfer provided for in the
Transaction Documents.

       

      (g)           Capitalization.  The
capitalization of SMSA is as follows: 100 million shares of Common stock being
duly authorized of which 5,000,004 shares of Common Stock are issued and
outstanding and 10 million shares of Preferred Stock being authorized, none of
which are issued and outstanding. No Person has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in
the transactions contemplated by the Transaction Documents.  There are
no outstanding options, warrants, scrip rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire any shares of Common Stock or
Preferred Stock, or contracts, commitments, understandings or arrangements by
which SMSA is or may become bound to issue additional shares of Common Stock or
Common Stock Equivalents.  The sale of the Shares by SMSA will not
obligate SMSA to issue shares of Common Stock or other securities to any Person
(other than the Purchaser) and will not result in a right of any holder of
SMSA’s securities to adjust the exercise, conversion, exchange or reset price
under any of such securities. All of the outstanding shares of capital stock of
SMSA are validly issued, fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, and none of such
outstanding shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities.  No further approval
or authorization of any stockholder, the Board of Directors or others is
required for the consummation of the transactions contemplated by the
Transaction Documents.  There are no stockholders agreements, voting
agreements or other similar agreements with respect to SMSA’s capital stock to
which SMSA is a party or, to the knowledge of SMSA, between or among any of
SMSA’s stockholders.

       

      
        
          
          

        

        
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      (h)           SEC Reports; Financial
Statements.  SMSA has filed all reports, schedules, forms,
statements and other documents required to be filed by SMSA under the Securities
Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as SMSA was
required by law or regulation to file such material) (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports”) on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such
extension.  As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act and the
Exchange Act, as applicable, and none of the SEC Reports, when filed, 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 the light of the circumstances under which they were made, not
misleading.  SMSA has never been an issuer subject to Rule 144(i)
under the Securities Act. The financial statements of SMSA included in the SEC
Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in
effect at the time of filing.  Such financial statements have been
prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”), except as may
be otherwise specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial
position of SMSA as of and for the dates thereof and the results of operations
and cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments.

       

      (i)           Material Changes;
Undisclosed Events, Liabilities or Developments. Since the date of the
latest audited financial statements included within the SEC Reports or except as
specifically disclosed in a subsequent SEC Report filed prior to the date
hereof: (i) there has been no event, occurrence or development that has had or
that could reasonably be expected to result in a Material Adverse Effect, (ii)
SMSA has not incurred any liabilities (contingent or otherwise) other than (A)
trade payables and accrued expenses incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required to be reflected
in SMSA’s financial statements pursuant to GAAP or disclosed in filings made
with the Commission, (iii) SMSA has not altered its method of accounting, (iv)
SMSA has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock and (v) SMSA has not issued
any equity securities to any officer, director or Affiliate.  SMSA
does not have pending before the Commission any request for confidential
treatment of information.  Except for the transactions contemplated by
this Agreement, no event, liability, fact, circumstance, occurrence or
development has occurred or exists or is reasonably expected to occur or exist
with respect to SMSA or its business, properties, operations, assets or
financial condition, that would be required to be disclosed by SMSA under
applicable securities laws at the time this representation is made or deemed
made that has not been publicly disclosed at least 1 Trading Day prior to the
date that this representation is made.

       

      
        
          
          

        

        
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      (j)           Litigation.  There
is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of SMSA, threatened against or affecting SMSA, or
any of its respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state,
county, local or foreign).

       

      (k)           Labor
Relations.  SMSA does not currently have and has never had any
employees.

       

      (l)           Compliance. SMSA is
not: (i) in default under or in violation of (and no event has occurred that has
not been waived that, with notice or lapse of time or both, would result in a
default by SMSA under), nor has SMSA received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) in violation of any judgment, decree or order
of any court, arbitrator or governmental body or (iii) in or has been in
violation of any statute, rule, ordinance or regulation of any governmental
authority, including without limitation all foreign, federal, state and local
laws applicable to its business and all such laws that affect the environment,
except in each case as could not have or reasonably be expected to result in a
Material Adverse Effect.

       

      (m)           Regulatory
Permits.  SMSA possesses all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct business as described in the SEC Reports,
except where the failure to possess such permits could not reasonably be
expected to result in a Material Adverse Effect (“Material Permits”),
and SMSA has not received any notice of proceedings relating to the revocation
or modification of any Material Permit.

       

      (n)           Title to Assets. SMSA
has no material assets.

       

      (o)           Patents and
Trademarks. SMSA has no patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets, inventions,
copyrights, licenses or other intellectual property rights or any similar
rights.

       

      (p)           Insurance.  SMSA
has no policy of insurance.

       

      (q)           Transactions With Affiliates
and Employees.  Except as set forth in the SEC Reports, none of
the officers or directors of SMSA is presently a party to any transaction with
SMSA (other than for services as officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any officer or director, any entity
in which any officer or director has a substantial interest or is an officer or
director, trustee or partner, in each case in excess of $120,000.

       

      (r)           Investment Company.
SMSA is not, and is not an Affiliate of, and following the consummation of the
transactions contemplated by the Transaction Documents will not be or be an
Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.  SMSA shall conduct its business in a
manner so that it will not become an “investment company” subject to
registration under the Investment Company Act of 1940, as amended.

       

      
        
          
          

        

        
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      (s)           Registration
Rights.  No Person has any right to cause SMSA to effect the
registration under the Securities Act or Exchange Act of any securities of
SMSA.

       

      (t)           Registration of
Securities.  The Common Stock is registered pursuant to Section
12(b) or 12(g) of the Exchange Act, and SMSA has taken no action designed to, or
which to its knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act nor has SMSA received
any notification that the Commission is contemplating terminating such
registration.

       

      (u)           Application of Takeover
Protections.  SMSA and the Board of Directors have taken all
necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under SMSA’s
articles of incorporation (or similar charter documents) or the laws of its
state of incorporation that is or could become applicable to the Purchaser as a
result of the Purchaser and SMSA fulfilling their respective obligations or
exercising their respective rights under the Transaction Documents, including
without limitation as a result of SMSA’s issuance of the Shares and the
Purchaser’s ownership of the Shares.

       

      (v)           Disclosure.  Except
with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, SMSA confirms that neither it nor any
other Person acting on its behalf has provided the Purchaser or its
representatives, agents or counsel with any information that it believes
constitutes or might constitute material, non-public
information.  SMSA understands and confirms that the Purchaser will
rely on the foregoing representation in effecting transactions in securities of
SMSA.  All of the disclosure furnished by or on behalf of SMSA to the
Purchaser regarding SMSA, its business and the transactions contemplated hereby
is true and correct in all material respects and does not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. SMSA acknowledges and agrees that the
Purchaser makes, has not made, nor will make any representations or warranties
with respect to the transactions contemplated hereby other than those
specifically set forth in Section 3.2 hereof and in the other Transaction
Documents to which the Purchaser is a party.

       

      (w)           Tax Status. SMSA has
filed all necessary federal, state and foreign income and franchise tax returns
and has paid or accrued all taxes shown as due thereon, and SMSA has no
knowledge of a tax deficiency which has been asserted or threatened against
SMSA.

       

      (x)           Accountants.  SMSA’s
accounting firm is a registered public accounting firm as required by the
Exchange Act.

       

      (y)           No Disagreements with
Accountants and Lawyers.  There are no disagreements of any
kind presently existing, or reasonably anticipated by SMSA to arise, between
SMSA and the accountants and lawyers formerly or presently employed by SMSA and
SMSA is current with respect to any fees owed to its accountants and lawyers
which could affect SMSA’s ability to perform any of its obligations under any of
the Transaction Documents.

       

      (z)           Regulation M
Compliance.  SMSA has not, and to its knowledge no one acting on its
behalf has, (i) taken, directly or indirectly, any action designed to cause or
to result in the stabilization or manipulation of the price of any security of
SMSA to facilitate the sale or resale of any of the Shares, (ii) sold, bid for,
purchased, or paid any compensation for soliciting purchases of, any of the
Shares, or (iii) paid or agreed to pay to any Person any compensation for
soliciting another to purchase any other securities of SMSA.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      (aa)           Stock Option Plans.
SMSA has no stock option or restricted security plans, agreements or
arrangements.  SMSA has not knowingly granted, and there is no and has
been no policy or practice to knowingly grant, stock options or restricted
securities prior to, or otherwise knowingly coordinate the grant of stock
options with, the release or other public announcement of material information
regarding SMSA or its financial results or prospects.

       

      3.2           Representations and
Warranties of the Purchaser.  Purchaser hereby represents and
warrants as of the date hereof and as of the Closing Date to SMSA as follows
(unless as of a specific date therein)

       

      (a)           Due
Execution.  Each Transaction Document to which Purchaser is a
party has been duly executed by Purchaser, and when delivered by Purchaser in
accordance with the terms hereof, will constitute the valid and legally binding
obligation of Purchaser, enforceable against it in accordance with its terms,
except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.

       

      (b)           Government Consent
etc.  No consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of the
Purchaser is required in connection with the valid execution and delivery of
this Agreement or the Transaction Documents, or the offer and sale of the
Shares, or the consummation of any other transaction contemplated hereby other
than those filings required under the Exchange Act.

       

      (c)           Disclosure of
Information.  The Purchaser represents that it has had an
opportunity to ask questions and receive answers from SMSA regarding the terms
and conditions of the offering of the Shares and the business, properties,
prospects and financial condition of SMSA.

       

      (d)           Restricted
Securities.  The Purchaser understands that the Shares will be
characterized as “restricted securities” under the federal securities laws,
inasmuch as they are being acquired from SMSA in a transaction not involving a
public offering, and that under such laws and applicable regulations such Shares
may not be resold without registration under the Securities Act, except in
certain limited circumstances.  In this connection, the Purchaser
represents that it is familiar with Rule 144 promulgated under the Securities
Act, as presently in effect, and understands the resale limitations imposed
thereby and by the Securities Act.  The Purchaser further acknowledges
that if an exemption from registration or qualification is available, it may be
conditioned on various requirements including, but not limited to, the time and
manner of sale, the holding period for the Shares and on requirements relating
to SMSA that are outside the Purchaser’s control, and that SMSA is under no
obligation and may not be able to satisfy.

       

      (e)           Accredited
Investor.  The Purchaser is an accredited investor as defined
in Rule 501(a) of Regulation D promulgated under the Securities
Act.

       

      
        
          
          

        

        
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      ARTICLE
IV.

      


      OTHER
AGREEMENTS OF THE PARTIES

       

      4.1           Transfer
Restrictions.

       

      (a)           The
Shares may only be disposed of in compliance with state and federal securities
laws.  In connection with any transfer of Shares other than pursuant
to an effective registration statement or Rule 144, to SMSA or to an Affiliate
of Purchaser or in connection with a pledge as contemplated in Section 4.1(b),
SMSA may require the transferor thereof to provide to SMSA an opinion of counsel
selected by the transferor and reasonably acceptable to SMSA, the form and
substance of which opinion shall be reasonably satisfactory to SMSA, to the
effect that such transfer does not require registration of such transferred
Shares under the Securities Act.

       

      (b)           The
Purchaser agrees to the imprinting, so long as is required by this Section 4.1,
of a legend on any of the Shares in the following form:

       

      “THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND, IF
APPLICABLE, THE SECURITIES LAWS OF ANY APPLICABLE STATE OR OTHER JURISDICTION OR
IN THE ABSENCE OF SUCH REGISTRATION UPON DELIVERY TO THE COMPANY OF AN OPINION
OF COUNSEL SATSIFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.”

      


      SMSA
acknowledges and agrees that Purchaser may from time to time pledge pursuant to
a bona fide margin agreement with a registered broker-dealer or grant a security
interest in some or all of the Shares to a financial institution that is an
“accredited investor” as defined in Rule 501(a) under the Securities Act and who
agrees to be bound by the provisions of this Agreement  and, if
required under the terms of such arrangement, Purchaser may transfer pledged or
secured Shares to the pledgees or secured parties.  Such a pledge or
transfer would not be subject to approval of SMSA and no legal opinion of legal
counsel of the pledgee, secured party or pledgor shall be required in connection
therewith.  Further, no notice shall be required of such
pledge.  At Purchaser’s expense, SMSA will execute and deliver such
reasonable documentation as a pledgee or secured party of Shares may reasonably
request in connection with a pledge or transfer of the Shares.

       

      (c)           Purchaser
agrees with SMSA that Purchaser will sell any Shares pursuant to either the
registration requirements of the Securities Act, including any applicable
prospectus delivery requirements, or an exemption therefrom, and that if Shares
are sold pursuant to a registration statement, they will be sold in compliance
with the plan of distribution set forth therein, and acknowledges that the
removal of the restrictive legend from certificates representing Shares as set
forth in this Section 4.1 is predicated upon SMSA’s reliance upon this
understanding.

       

      
        
          
          

        

        
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      4.2           Furnishing of Information;
Public Information. As long as Purchaser owns Shares, SMSA covenants
to maintain the registration of the Common Stock under Section 12(b) or 12(g) of
the Exchange Act and to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by
SMSA after the date hereof pursuant to the Exchange Act even if SMSA is not then
subject to the reporting requirements of the Exchange Act.  SMSA
further covenants that it will take such further action as any holder of Shares
may reasonably request, to the extent required from time to time to enable such
Person to sell such Shares without registration under the Securities Act,
including without limitation, within the requirements of the exemption provided
by Rule 144.

       

      4.3           Securities Laws Disclosure;
Publicity.  SMSA shall, by 8:30 a.m. (New York City time) on
the 4th
Business Day immediately following the date hereof, issue a Current Report on
Form 8-K disclosing the material terms of the transactions contemplated hereby,
and including the Transaction Documents as exhibits thereto.  SMSA and
the Purchaser shall consult with each other in issuing any press releases with
respect to the transactions contemplated hereby, and neither SMSA nor the
Purchaser shall issue any such press release nor otherwise make any such public
statement without the prior consent of SMSA, with respect to any press release
of Purchaser, or without the prior consent of the Purchaser, with respect to any
press release of SMSA, which consent shall not unreasonably be withheld or
delayed, except if such disclosure is required by law, in which case the
disclosing party shall promptly provide the other party with prior notice of
such public statement or communication.

       

      4.4           Shareholder Rights
Plan.  No claim will be made or enforced by SMSA, with the
consent of SMSA, or any other Person, that Purchaser is an “Acquiring Person”
under any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or similar anti-takeover
plan or arrangement in effect or hereafter adopted by SMSA, or that Purchaser
could be deemed to trigger the provisions of any such plan or arrangement, by
virtue of receiving Shares under the Transaction Documents or under any other
agreement between SMSA and the Purchaser.

       

      4.5           Non-Public
Information.  Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, SMSA
covenants and agrees that neither it, nor any other Person acting on its behalf,
will provide Purchaser or its agents or counsel with any information that SMSA
believes constitutes material non-public information, unless prior thereto
Purchaser shall have executed a written agreement with SMSA regarding the
confidentiality and use of such information. SMSA understands and confirms that
Purchaser may rely on the foregoing covenant in effecting transactions in
securities of SMSA.

       

      4.6           Indemnification of the
Purchaser.  Subject to the provisions of this Section 4.6, SMSA
will indemnify and hold the Purchaser and his representatives and
agents  (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation that any such Purchaser Party may suffer or incur as a result of
or relating to (a) any breach of any of the representations, warranties,
covenants or agreements made by SMSA in this Agreement or in the other
Transaction Documents or (b) any action instituted against Purchaser in any
capacity, or any of them or their respective Affiliates, by any stockholder of
SMSA who is not an Affiliate of Purchaser, with respect to any of the
transactions contemplated by the Transaction Documents (unless such action is
pleaded with particularity as follows and based upon a breach of Purchaser’s
representations, warranties or covenants under the Transaction Documents or any
agreements or understandings Purchaser may have with any such stockholder or any
violations by Purchaser of state or federal securities laws or any conduct by
Purchaser which constitutes fraud, gross negligence, willful misconduct or
malfeasance).  If any action shall be brought against any Purchaser
Party in respect of which indemnity may be sought pursuant to this Agreement,
Purchaser Party shall promptly notify SMSA in writing, and SMSA shall have the
right to assume the defense thereof with counsel of its own choosing reasonably
acceptable to the Purchaser Party.  Any Purchaser Party shall have the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by SMSA in writing, (ii) SMSA has
failed after a reasonable period of time to assume such defense and to employ
counsel or (iii) in such action there is, in the reasonable opinion of counsel,
a material conflict on any material issue between the position of SMSA and the
position of such Purchaser Party, in which case SMSA shall be responsible for
the reasonable fees and expenses of no more than one such separate counsel. SMSA
will not be liable to any Purchaser Party under this Agreement (y) for any
settlement by a Purchaser Party effected without SMSA’s prior written consent,
which shall not be unreasonably withheld or delayed; or (z) to the extent, but
only to the extent that a loss, claim, damage or liability is attributable to
any Purchaser Party’s breach of any of the representations, warranties,
covenants or agreements made by such Purchaser Party in this Agreement or in the
other Transaction Documents.

       

      
        
          
          

        

        
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      4.7           Certain Transactions and
Confidentiality. Purchaser covenants that neither he, nor any Affiliate
acting on his behalf or pursuant to any understanding with it will execute any
purchases or sales, including Short Sales, of any of SMSA’s securities during
the period commencing with the execution of this Agreement and ending at such
time that the transactions contemplated by this Agreement are first publicly
announced pursuant to the Current Report on Form 8-K.  Purchaser covenants
that until such time as the transactions contemplated by this Agreement are
publicly disclosed by SMSA pursuant to the Current Report on Form 8-K, Purchaser
will maintain the confidentiality of the existence and terms of this transaction
and the information included in the Transaction
Documents.  Notwithstanding the foregoing, and notwithstanding
anything contained in this Agreement to the contrary, SMSA expressly
acknowledges and agrees that (i) Purchaser does not make any representation,
warranty or covenant hereby that it will not engage in effecting transactions in
any securities of SMSA after the time that the transactions contemplated by this
Agreement are first publicly announced pursuant to the Current Report on Form
8-K, (ii) Purchaser shall not be restricted or prohibited from effecting any
transactions in any securities of SMSA in accordance with applicable securities
laws from and after the time that the transactions contemplated by this
Agreement are first publicly announced pursuant to the Current Report on Form
8-K and (iii) Purchaser shall have no duty of confidentiality to SMSA after the
issuance of the Current Report on Form 8-K regarding this
Agreement.

       

      ARTICLE
V.

      


      MISCELLANEOUS

      


      5.1           Termination;
Cooperation. 

       

      (a)           This
Agreement may be terminated by the Purchaser if the Closing has not been
consummated on or before November 10, 2009.

       

      (b)           From
the date hereof until the Closing Date, SMSA will cooperate, and will cause its
officers, directors, agents and advisers to cooperate, with the Purchaser on any
due diligence investigation of SMSA, its business, officers and directors, and
SMSA will promptly notify (or cause to be notified) the Purchaser of any
material event or events of any nature whatsoever regarding SMSA or the subject
matter of the Purchaser’s due diligence investigation.

       

      5.2           Fees and
Expenses.  The Purchaser and SMSA shall pay the fees and
expenses of their respective advisers, counsel, accountants and other experts,
if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement
and the other Transaction Documents.    SMSA shall pay all
Transfer Agent fees, stamp taxes and other taxes and duties levied in connection
with the delivery of any Shares to the Purchaser other than taxes based upon
income.

       

      
        
          
          

        

        
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      5.3           Entire Agreement; Further
Assurances.  The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.  The parties hereto agree to execute such further
instruments and to take such further action as may reasonably be necessary to
carry out the intent of this Agreement and the Transaction
Documents.

      


       

      5.4           Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of: (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto on a day that is not a Trading Day
or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second
(2nd)
Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service or (d) upon actual receipt by the party to whom such
notice is required to be given.  The address for such notices and
communications shall be as set forth on the signature pages attached
hereto.

       

      5.5           Amendments;
Waivers.  No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by SMSA and the Purchaser or, in the case of a waiver, by
the party against whom enforcement of any such waived provision is
sought.  No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner impair the
exercise of any such right.

       

      5.6           Headings.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.

       

      5.7           Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns. SMSA may not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of Purchaser.  Purchaser may assign any or all of its
rights under this Agreement to any Person to whom Purchaser assigns or transfers
any Shares, provided that such transferee agrees in writing to be bound, with
respect to the transferred Shares, by the provisions of the Transaction
Documents that apply to Purchaser.

       

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

       

      5.9           Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York applicable to contracts and agreements made and to be performed solely
within the State of New York.  Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents
(whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in the City of New York.  Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or is an  inconvenient
venue for such proceeding.  Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way
any right to serve process in any other manner permitted by law.

       

      
        
          
          

        

        
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      5.10           Survival.  The
representations and warranties contained herein shall survive the Closing and
the delivery of the Shares.

       

      5.11           Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.

       

      5.12           Severability.  If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

       

      5.13           Replacement of
Shares.  If any certificate or instrument evidencing any Shares
is mutilated, lost, stolen or destroyed, SMSA shall issue or cause to be issued
in exchange and substitution for and upon cancellation thereof (in the case of
mutilation), or in lieu of and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to SMSA of
such loss, theft or destruction.  The applicant for a new certificate
or instrument under such circumstances shall also pay any reasonable third-party
costs (including customary indemnity) associated with the issuance of such
replacement Shares.

       

      5.14           Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, Purchaser and SMSA will be entitled to
specific performance under the Transaction Documents.  The parties
agree that monetary damages may not be adequate compensation for any loss
incurred by reason of any breach of obligations contained in the Transaction
Documents and hereby agree to waive and not to assert in any action for specific
performance of any such obligation the defense that a remedy at law would be
adequate.

       

      5.15           Saturdays, Sundays,
Holidays, etc. If the last or appointed day for the taking of any
action or the expiration of any right required or granted herein shall not be a
Business Day, then such action may be taken or such right may be exercised on
the next succeeding Business Day.

       

      5.16           Construction. The
parties agree that each of them and/or their respective counsel has reviewed and
had an opportunity to revise the Transaction Documents and, therefore, the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments hereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction
Document shall be subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common
Stock that occur after the date of this Agreement.

       

      
        
          
          

        

        
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      5.17           WAIVER OF
JURY TRIAL.  IN ANY ACTION, SUIT, OR
PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY
APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY
WAIVES FOREVER TRIAL BY JURY.

       

      [Signature
Page Follows]

       

      
        
          
          

        

        
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      IN WITNESS WHEREOF, the
parties hereto have caused this Securities Purchase Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.

       

       

      
        
          	SMSA EL PASO II ACQUISITION
      CORP.	 	 	
                  Address for
    Notice:

                
	 	 	 	 	 
	
                  By:   

                	/s/
      Gerard Pascale	
                   

                	 	
                  28
      Cottonwood Lane,

                
	
                  Name:  

                	Gerard
      Pascale	 	 	

                  Hilton
      Head, SC  29926

                
	Title:	President
      and Chief Executive Officer	 	 	 
	 	 	
                   

                	 	
                   

                
	
                   

                	 	 	 	 
	PURCHASER	 	 	Address for Notice:
	 	 	 	 
	 	 	 	11753
      Willard Avenue,
	By:   	/s/
      Michael Campbell	
                   

                	 	
                  Tustin,
      California  92782

                
	Name:  	Michael
      Campbell	 	 	 


        

      

       

      
        
          
          

        

        
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