**Exhibit 10.1**

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**SECURITIES PURCHASE AGREEMENT**

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**THIS SECURITIESPURCHASE AGREEMENT**(the “Agreement”), dated as of January 12, 2018, is entered into by and between DIGERATI TECHNOLOGIES,INC., a Nevada corporation, (the “Company”) and PEAK ONE OPPORTUNITY FUND, L.P., a Delaware limited partnership (the“Buyer”).

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**WITNESSETH:**

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**WHEREAS**, theCompany and the Buyer are executing and delivering this Agreement in accordance with and in reliance upon the exemption from securitiesregistration afforded, *inter alia*, by Rule 506 under Regulation D (“Regulation D”) as promulgated by the UnitedStates Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933Act”), and/or Section 4(2) of the 1933 Act; and

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**WHEREAS**, theBuyer wishes to purchase from the Company, and the Company wishes to sell the Buyer, upon the terms and subject to the conditionsof this Agreement, securities consisting of the Company’s Convertible Debentures due three years from the respective datesof issuance (the “Debentures”), each of which are in the form of Exhibit A hereto, which will be convertibleinto shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), in the aggregateprincipal amount of up to Six Hundred Thousand and 00/100 Dollars ($600,000.00), for an aggregate Purchase Price of up to FiveHundred Forty Thousand and 00/100 Dollars ($540,000.00), all upon the terms and subject to the conditions of this Agreement, theDebentures, and other related documents;

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**NOW THEREFORE**,in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receiptand sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1. **DEFINITIONS; AGREEMENT TO PURCHASE.**

 

a. **Certain Definitions.**As used herein, each of the following terms has the meaning set forth below, unless the context otherwise requires:

 

(i) “Affiliate”means, with respect to a specific Person referred to in the relevant provision, another Person who or which controls or is controlledby or is under common control with such specified Person.

 

(ii) “Certificates”means certificates representing the Conversion Shares issuable hereunder, each duly executed on behalf of the Company and issuedhereunder.

 

(iii) “ClosingDate” means the date on which one of the three (3) Closings are held, which are the Signing Closing Date, the Second ClosingDate and the Third Closing Date.

 

(iv) [Reserved]

 

 

 

(v)“Commitment Fee” shall have the meaning ascribed to such term in Section 12(a).

 

(vi) “Common Stock”shall have the meaning ascribed to such term in the Recitals.

 

(vii) “ConversionAmount” shall mean the Conversion Amount as defined in the Debentures, *provided, however*that for purposes of theforegoing calculation, the full indebtedness under the Debentures shall be deemed immediately convertible, notwithstanding the4.99% limitation on ownership set forth in the Debentures.

 

(viii) “ConversionPrice” means the Conversion Price as defined in the Debentures.

 

(ix) “ConversionShares” means the shares of Common Stock issuable upon conversion of the Debentures.

 

(x) “DWAC Operational”means that the Common Stock is eligible for clearing through the Depository Trust Company (“DTC”) via the DTC’sDeposit Withdrawal Agent Commission or “DWAC” system and active and in good standing for DWAC issuance by the TransferAgent (as defined herein).

 

(xi) “Dollars”or “$” means United States Dollars.

 

(xii) “ExchangeAct” means the Securities Exchange Act of 1934, as amended.

 

(xiii) “Investments”means Peak One Investments, LLC, the general partner of the Buyer.

 

(xiv) “IrrevocableResolutions” has the meaning set forth in Section 8(i).

 

(xv) “Market Priceof the Common Stock” means (x) the closing bid price of the Common Stock for the period indicated in the relevant provisionhereof (unless a different relevant period is specified in the relevant provision), as reported by Bloomberg, LP or, if not soreported, as reported on the OTCQB, OTCQX or OTC Pink or (y) if the Common Stock is listed on a stock exchange, the closing priceon such exchange, as reported by Bloomberg LP.

 

 

(xvi)“Material Adverse Effect” means a material adverse effect on the business, operations or condition (financial or otherwise)or results of operation of the Company and its Subsidiaries taken as a whole, in the reasonable commercial discretion of the Buyer,irrespective of any finding of fault, magnitude of liability (or lack of financial liability). Without limiting the generalityof the foregoing, the occurrence of any of the following, in the reasonable commercial discretion of the Buyer, shall be considereda Material Adverse Effect: (i) any final money, judgment, writ or warrant of attachment, or similar process (including an arbitraldetermination) in excess of One Hundred Fifty Thousand Dollars ($150,000) shall be entered or filed against the Company or anyof its Subsidiaries (including, in any event, products liability claims against the Company or its Subsidiaries), (ii) the suspensionor withdrawal of any governmental authority or permit pertaining to a material amount of the Company’s or any Subsidiary’sproducts or services, (iii) the loss of any material insurance coverage (including, in any case, comprehensive general liabilitycoverage, products liability coverage or directors and officers coverage, in each case in effect at the time of execution anddelivery of this Agreement), (iv) an action by a regulatory agency or governmental body affecting the Common Stock (including,without limitation, (1) the commencement of any regulatory investigation of which the Company is aware, the suspension of tradingof the Common Stock by the Financial Industry Regulation Authority (“FINRA”), the SEC, the OTC Bulletin Board (“OTCBB”)or the OTC Markets Group, Inc., the failure of the Common Stock to be DTC eligible or the placing of the Common Stock on the DTC“chill list” or (2) the engaging in any market manipulation or other unlawful or improper trading or other activityby any Affiliate), (v) the Company’s independent registered accountants shall resign under circumstances where a disagreementexists between the Company and its independent registered accountants (unless a new independent registered accountant is immediatelyappointed and all previously filed financial statements are still able to be relied upon), (vi) the Company shall fail to timelyfile any disclosure document as required by applicable federal or state securities laws and regulations or by the rules and regulationsof any exchange, trading market or quotation system to which the Company or the Common Stock is subject, or (vii) the Chief ExecutiveOfficer of the Company or any other key full-time officer or director of the Company, shall, for any reason (including, withoutlimitation, termination, resignation, retirement, death or disability) cease to act on behalf of the Company in the same roleand to the same extent as his or her involvement as of the date of execution and delivery of this Agreement.

 

(xvii) “Person”means any living person or any entity, such as, but not necessarily limited to, a corporation, partnership or trust.

 

(xviii) “PurchasePrice” means the price that the Buyer pays for the Debentures at each respective Closing, which are the Signing PurchasePrice, the Second Purchase Price and the Third Closing Price, as the case may be.

 

(xix) “RegistrableSecurities” shall mean the Conversion Shares, and, to the extent applicable, and any other shares of capital stock or othersecurities of the Company or any successor to the Company that are issued upon exchange of Conversion Shares and/or such RestrictedStock.

 

(xx) “Registration Statement”shall mean a registration statement on Form S-1 (or any successor thereto) filed or contemplated to be filed by the Company withthe SEC under the Securities Act.

 

(xxi) “RestrictedStock” shall mean shares of Common Stock which are not freely trading shares when issued.

 

(xxii) “Securities”means the Debentures and the Shares.

 

(xxiii) “Shares”means the Conversion Shares.

 

 

(xxiv)“Second Closing Date” shall have the meaning ascribed to such term in Section 6(b).

 

(xxv) “Second Debenture”means the second of the three (3) Debentures, in the principal amount of Two Hundred Thousand and 00/100 Dollars ($200,000.00),which is issued by the Company to the Buyer on the Second Closing Date.

 

(xxvi) “SecondPurchase Price” shall be One Hundred Eighty Thousand and 00/100 Dollars ($180,000.00)

 

(xxvii) “SigningClosing Date” shall have the meaning ascribed to such term in Section 6(a).

 

(xxviii) “SigningDebenture” means the first of the three (3) Debentures, in the principal amount of Two Hundred Thousand and 00/100 Dollars($200,000.00), to be issued by the Company to the Buyer on the Signing Closing Date.

 

(xxix) “SigningPurchase Price” shall be One Hundred Eighty Thousand and 00/100 Dollars ($180,000.00).

 

(xxx) “Subsidiary”shall have the meaning ascribed to such term in Section 3(b).

 

(xxxi) “Third ClosingDate” shall have the meaning ascribed to such term in Section 6(c).

 

(xxxii) “ThirdDebenture” means the third of the three (3) Debentures, in the principal amount of Two Hundred Thousand and 00/100 Dollars($200,000.00), which is issued by the Company to the Buyer on the Third Closing Date.

 

(xxxiii) “ThirdPurchase Price” shall be One Hundred Eighty Thousand and 00/100 Dollars ($180,000.00).

 

(xxxiv) “TransactionDocuments” means, collectively, this Agreement, the Debentures, the Transfer Agent Instruction Letter, the Irrevocable Resolutionsand the other agreements, documents and instruments contemplated hereby or thereby.

 

(xxxv) “TransferAgent” shall have the meaning ascribed to such term in Section 4(a).

 

(xxxvi) “TransferAgent Instruction Letter” shall have the meaning ascribed to such term in Section 5(a).

 

b. **Purchase and Saleof Debentures**.

 

(i) The Buyer agreesto purchase from the Company, and the Company agrees to sell to the Buyer, the Debentures on the terms and conditions set forthbelow in this Agreement and the other Transaction Documents.

 

 

(ii)Subject to the terms and conditions of this Agreement and the other Transaction Documents, the Buyer will purchase the Debenturesat certain closings (each, a “Closing”) to be held on certain respective Closing Dates.

 

c. **[Reserved]**

 

(i) [Reserved]

 

(ii) [Reserved]

 

2. **BUYER’S REPRESENTATIONS, WARRANTIES, ETC.**

 

The Buyer representsand warrants to, and covenants and agrees with, the Company as follows:

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a. **Investment Purpose.**Without limiting the Buyer’s right to sell the Shares pursuant to a Registration Statement, Buyer is purchasing theDebentures, and will be acquiring the Conversion Shares, for its own account for investment only and not with a view towards thepublic sale or distribution thereof and not with a view to or for sale in connection with any distribution thereof.

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b. **Accredited InvestorStatus.**Buyer is (i) an “accredited investor” as that term is defined in Rule 501 of the General Rules and Regulationsunder the 1933 Act by reason of Rule 501(a)(3), (ii) experienced in making investments of the kind described in this Agreementand the related documents, (iii) able, by reason of the business and financial experience of its officers (if an entity) and professionaladvisors (who are not affiliated with or compensated in any way by the Company or any of its affiliates or selling agents), toprotect its own interests in connection with the transactions described in this Agreement, and the related documents, and (iv)able to afford the entire loss of its investment in the Securities.

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c. **Subsequent Offersand Sales.**All subsequent offers and sales of the Securities by the Buyer shall be made pursuant to registration of the Sharesunder the 1933 Act or pursuant to an exemption from registration and compliance with applicable states’ securities laws.

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d. **Reliance on Exemptions.**Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions from the registrationrequirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of,and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of theBuyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire theSecurities.

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e.**Information.**Buyer and its advisors have been furnished with all materials relating to the business, finances and operationsof the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer. Buyer andits advisors have been afforded the opportunity to ask questions of the Company and have received complete and satisfactory answersto any such inquiries. Without limiting the generality of the foregoing, Buyer has also had the opportunity to obtain and to reviewthe Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2017, and Quarterly Report on Form 10-Q forthe fiscal quarter ended October 31, 2017 (collectively, the “SEC Documents”).

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f. **Investment Risk.**Buyer understands that its investment in the securities constitutes high risk investment, its investment in the Securitiesinvolves a high degree of risk, including the risk of loss of the Buyer’s entire investment.

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g. **Governmental Review.**Buyer understands that no United States federal or state agency or any other government or governmental agency has passedon or made any recommendation or endorsement of the Securities.

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h. **Organization; Authorization.**Buyer is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. ThisAgreement and the other Transaction Documents have been duly and validly authorized, executed and delivered on behalf of the Buyerand create a valid and binding agreement of the Buyer enforceable in accordance with its terms, subject as to enforceability togeneral principles of equity and to bankruptcy, insolvency, moratorium and other similar laws affecting the enforcement of creditors’rights generally.

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i. **Residency.**Thestate in which any offer to sell Securities hereunder was made to or accepted by the Buyer is the state shown as the Buyer’saddress contained herein, and Buyer is a resident of such state only.

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3. **COMPANY REPRESENTATIONS AND WARRANTIES, ETC.**

 

The Company represents and warrants to the Buyer that:

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a. **Concerning theDebentures and the Shares.**There are no preemptive rights of any stockholder of the Company to acquire the Debentures or theShares pursuant to the Nevada Revised Statutes.

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b. **Organization;Subsidiaries; Reporting Company Status.**Attached hereto as Schedule 3(b) is an organizational chart describingall of the Company’s wholly-owned and majority-owned subsidiaries (the “Subsidiaries”) and otherAffiliates, including the relationships among the Company and such Subsidiaries, including as to each Subsidiary itsjurisdiction of organization and the percentage of ownership held by the Company, and the parent company of the Subsidiary,including the percentage of ownership of the Company held by it. The Company and each Subsidiary is a corporation or otherform of businesses entity duly organized, validly existing and in good standing under the laws its respective jurisdiction oforganization, and each of them has the requisite corporate or other power to own its properties and to carry on its businessas now being conducted. The Company and each Subsidiary is duly qualified as a foreign corporation or other entity to dobusiness and is in good standing in each jurisdiction where the nature of the business conducted or property owned by itmakes such qualification necessary, other than those jurisdictions in which the failure to so qualify would not have aMaterial Adverse Effect. The Common Stock is listed and traded on the OTCM (as defined below)(trading symbol: DTGI). The Company has received no notice that it has not cured, either oral or written, from FINRA, theSEC, or any other organization, with respect to the continued eligibility of the Common Stock for listing on the OTCM, andthe Company currently maintains all requirements for the continuation of such listing. The Company is an operating company inthat, among other things (A) it primarily engages, wholly or substantially, directly or indirectly through a majority ownedSubsidiary or Subsidiaries, in the production or sale, or the research or development, of a product or service other than theinvestment of capital, (B) it is not an individual or sole proprietorship, (C) it is not an entity with no specific businessplan or purpose and its business plan is not to engage in a merger or acquisition with an unidentified company or companiesor other entity or person, and (D) it intends to use the proceeds from the sale of the Debentures solely for the operation ofthe Company’s business and uses other than personal, family, or household purposes.

 

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c. **Authorized Shares.**Schedule 3(c) sets forth all capital stock and derivative securities of the Company that are authorized for issuance andthat are issued and outstanding. All issued and outstanding shares of Common Stock have been duly authorized and validly issuedand are fully paid and nonassessable. The Company has sufficient authorized and unissued shares of Common Stock as may be necessaryto effect the issuance of the Shares, assuming the prior issuance and exercise, exchange or conversion, as the case may be, ofall derivative securities authorized, as indicated in Schedule 3(c). The Shares have been duly authorized and, when issuedupon conversion of, or as interest on, the Debentures, the Shares will be duly and validly issued, fully paid and non-assessableand will not subject the holder thereof to personal liability by reason of being such holder. At all times, the Company shall keepavailable and reserved for issuance to the holders of the Debentures shares of Common Stock duly authorized for issuance againstthe Debentures.

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d. **Authorization.**This Agreement, the issuance of the Debentures (including without limitation the incurrence of indebtedness thereunder), theissuance of the Conversion Shares under the Debentures, and the other transactions contemplated by the Transaction Documents, havebeen duly, validly and irrevocably authorized by the Company, and this Agreement has been duly executed and delivered by the Company.The Company’s board of directors, in the exercise of its fiduciary duties, has irrevocably approved the entry into and performanceof the Transaction Documents, including, without limitation the sale of the Debentures and the issuance of Conversion Shares, basedupon a reasonable inquiry concerning the Company’s financing objectives and financial situation. Each of the TransactionDocuments, when executed and delivered by the Company, are and will be, valid, legal and binding agreements of the Company, enforceablein accordance with their respective terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency,moratorium, and other similar laws affecting the enforcement of creditors’ rights generally.

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e.**Non-contravention.**The execution and delivery of the Transaction Documents, the issuance of the Securities and the consummationby the Company of the other transactions contemplated by this Agreement and the Debentures (including without limitation the incurrenceof indebtedness thereunder) do not and will not conflict with or result in a breach by the Company of any of the terms or provisionsof, or constitute a default under (i) the articles of incorporation or by-laws of the Company, each as currently in effect, (ii)any indenture, mortgage, deed of trust, or other material agreement or instrument to which the Company is a party or by whichit or any of its properties or assets are bound, including any listing agreement for the Common Stock, except as herein set forthor an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company or the triggeringof any anti-dilution rights, rights of first refusal or first offer on the part of holders of the Company’s securities,(iii) to its knowledge, any existing applicable law, rule, or regulation or any applicable decree, judgment, or order of any court,United States federal or state regulatory body, administrative agency, or other governmental body having jurisdiction over theCompany or any of its properties or assets, or (iv) the Company’s listing agreement for its Common Stock (if applicable).

 

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f. **Approvals.**Noauthorization, approval or consent of any court, governmental body, regulatory agency, self-regulatory organization, or stock exchangeor market or the stockholders of the Company is required to be obtained by the Company for the entering into and performing thisAgreement and the other Transaction Documents (including without limitation the issuance and sale of the Securities to the Buyeras contemplated by this Agreement) except such authorizations, approvals and consents that have been obtained, or such authorizations,approvals and consents, the failure of which to obtain would not have a Material Adverse Effect.

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g. **SEC Filings; Rule144 Status.**None of the SEC Documents contained, at the time they were filed, any untrue statement of a material fact or omittedto state any material fact required to be stated therein or necessary to make the statements made therein in light of the circumstancesunder which they were made, not misleading. The Company has filed all requisite forms, reports and exhibits thereto with the SECas required. The Company is not aware of any event occurring on or prior to the execution and delivery of this Agreement that wouldrequire the filing of, or with respect to which the Company intends to file, a Form 8-K after such time (except with respect tothis transaction). The Company satisfies the requirements of Rule 144(i)(2), and the Company shall continue to satisfy all applicablerequirements of Rule 144 (or any successor thereto) for so long as any Securities are outstanding and not registered pursuant toan effective registration statement filed with the SEC.

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h.**Absence of Certain Changes.**Since October 31, 2017, when viewed from the perspective of the Company and its Subsidiariestaken as a whole, there has been no material adverse change and no material adverse development in the business, properties, operations,condition (financial or otherwise), or results of operations of the Company and its Subsidiaries (including, without limitation,a change or development which constitutes, or with the passage of time is reasonably likely to become, a Material Adverse Effect),except as disclosed in the SEC Documents. Since October 31, 2017, except as provided in the SEC Documents, the Company has not(i) incurred or become subject to any material liabilities (absolute or contingent) except liabilities incurred in the ordinarycourse of business consistent with past practices; (ii) discharged or satisfied any material lien or encumbrance or paid any materialobligation or liability (absolute or contingent), other than current liabilities paid in the ordinary course of business consistentwith past practices; (iii) declared or made any payment or distribution of cash or other property to stockholders with respectto its capital stock, or purchased or redeemed, or made any agreements to purchase or redeem, any shares of its capital stock;(iv) sold, assigned or transferred any other tangible assets, or canceled any debts or claims, except in the ordinary course ofbusiness consistent with past practices; (v) suffered any substantial losses or waived any rights of material value, whether ornot in the ordinary course of business, or suffered the loss of any material amount of existing business; (vi) made any changesin employee compensation, except in the ordinary course of business consistent with past practices; or (vii) experienced any materialproblems with labor or management in connection with the terms and conditions of their employment.

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i. **Full Disclosure.**There is no fact known to the Company (other than general economic conditions known to the public generally or as disclosedin the SEC Documents) that has not been disclosed in writing to the Buyer that (i) would reasonably be expected to have a MaterialAdverse Effect, (ii) would reasonably be expected to materially and adversely affect the ability of the Company to perform itsobligations pursuant to the Transaction Documents, or (iii) would reasonably be expected to materially and adversely affect thevalue of the rights granted to the Buyer in the Transaction Documents.

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j. **Absence of Litigation.**Except as described in the SEC Documents, there is no action, suit, proceeding, inquiry or investigation before or by any court,public board or body pending or, to the knowledge of the Company, threatened against or affecting the Company, wherein an unfavorabledecision, ruling or finding would have a Material Adverse Effect or which would adversely affect the validity or enforceabilityof, or the authority or ability of the Company to perform its obligations under, any of the Transaction Documents. The Companyis not a party to or subject to the provisions of, any order, writ, injunction, judgment or decree of any court or government agencyor instrumentality which could reasonably be expected to have a Material Adverse Effect.

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k. **Absence of Liens.**The Company’s assets are not encumbered by any liens or mortgages except as described in the SEC Documents or incurredin the ordinary course of business.

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l. **Absence of Eventsof Default.**No event of default (or its equivalent term), as defined in the respective agreement, indenture, mortgage, deedof trust or other instrument, to which the Company is a party, and no event which, with the giving of notice or the passage oftime or both, would become an event of default (or its equivalent term) (as so defined in such document), has occurred and is continuing,which would have a Material Adverse Effect.

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m.**No Undisclosed Liabilities or Events.**The Company has no liabilities or obligations other than those disclosed in the SECDocuments or those incurred in the ordinary course of the Company’s business since October 31, 2017, and which individuallyor in the aggregate, do not or would not have a Material Adverse Effect. No event or circumstances has occurred or exists withrespect to the Company or its properties, business, condition (financial or otherwise), or results of operations, which, underapplicable law, rule or regulation, requires public disclosure or announcement prior to the date hereof by the Company but whichhas not been so publicly announced or disclosed. There are no proposals currently under consideration or currently anticipatedto be under consideration by the Board of Directors or the executive officers of the Company which proposal would (x) change thearticles of incorporation, by-laws or any other charter document of the Company, each as currently in effect, with or withoutshareholder approval, which change would reduce or otherwise adversely affect the rights and powers of the shareholders of theCommon Stock or (y) materially or substantially change the business, assets or capital of the Company.

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n. **No Integrated Offering.**Neither the Company nor any of its affiliates nor any Person acting on its or their behalf has, directly or indirectly, atany time during the six month period immediately prior to the date of this Agreement made any offer or sales of any security orsolicited any offers to buy any security under circumstances that would eliminate the availability of the exemption from registrationunder Rule 506 of Regulation D in connection with the offer and sale of the Securities as contemplated hereby.

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o. **Dilution.**Thenumber of Shares issuable upon conversion of the Debentures may increase substantially in certain circumstances, including, butnot necessarily limited to, the circumstance wherein the Market Price of the Common Stock declines prior to the conversion of theDebentures. The Company’s executive officers and directors have studied and fully understand the nature of the securitiesbeing sold hereby and recognize that they have a potential dilutive effect and further that the conversion of the Debentures and/orsale of the Conversion Shares may have an adverse effect on the Market Price of the Common Stock. The Board of Directors of theCompany has concluded, in its good faith business judgment that such issuance is in the best interests of the Company. The Companyspecifically acknowledges that its obligation to issue the Conversion Shares upon conversion of the Debentures is binding uponthe Company and enforceable regardless of the dilution such issuance may have on the ownership %s of other shareholders of theCompany.

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p. **Regulatory Permits.**The Company has all such permits, easements, consents, licenses, franchises and other governmental and regulatory authorizationsfrom all appropriate federal, state, local or other public authorities (“Permits”) as are necessary to own and leaseits properties and conduct its businesses in all material respects in the manner described in the SEC Documents and as currentlybeing conducted. All such Permits are in full force and effect and the Company has fulfilled and performed all of its materialobligations with respect to such Permits, and no event has occurred that allows, or after notice or lapse of time would allow,revocation or termination thereof or will result in any other material impairment of the rights of the holder of any such Permit,subject in each case to such qualification as may be disclosed in the SEC Documents. Such Permits contain no restrictions thatwould materially impair the ability of the Company to conduct businesses in the manner consistent with its past practices. TheCompany has not received notice or otherwise has knowledge of any proceeding or action relating to the revocation or modificationof any such Permit.

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q. **Reserved.**

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r. **Hazardous Materials.**The Company is in compliance with all applicable Environmental Laws in all respects except where the failure to comply doesnot have and could not reasonably be expected to have a Material Adverse Effect. For purposes of the foregoing:

 

“EnvironmentalLaws” means, collectively, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended,the Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation and Recovery Act, the Toxic Substances ControlAct, as amended, the Clean Air Act, as amended, the Clean Water Act, as amended, any other “Superfund” or “Superlien”law or any other applicable federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating,relating to, or imposing liability or standards of conduct concerning, the environment or any Hazardous Material.

 

 

“HazardousMaterial” means and includes any hazardous, toxic or dangerous waste, substance or material, the generation, handling,storage, disposal, treatment or emission of which is subject to any Environmental Law.

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s. **Independent PublicAccountants.**The Company’s auditor, LBB & Associates Ltd., LLP, is an independent registered public accounting firmwith respect to the Company, as required by the 1933 Act, the Exchange Act and the rules and regulations promulgated thereunder.

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t. **Internal AccountingControls.**The Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that (1)transactions are executed in accordance with management’s general or specific authorization; (2) transactions are recordedas necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintainaccountability for assets; (3) access to assets is permitted only in accordance with management’s general or specific authorization;and (4) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate actionis taken with respect to any differences.

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u. **Brokers.**Otherthan the Company’s arrangement with Mackey McFarlane, J. H. Darbie & Co., no Person (other than the Buyer and its principals,employees and agents) is entitled to receive any consideration from the Company or the Buyer arising from any finder’s agreement,brokerage agreement or other agreement to which the Company is a party.

 

v. **DWAC Operational.**TheCompany is currently DWAC Operational.

 

4. **CERTAIN COVENANTS AND ACKNOWLEDGMENTS.**

 

a.**Transfer Restrictions.**The parties acknowledge and agree that (1) the Debentures have not been registered under the provisionsof the 1933 Act and the Shares have not been registered under the 1933 Act, and may not be transferred unless (A) subsequentlyregistered thereunder or (B) the Securities to be sold or transferred may be sold or transferred pursuant to an exemption fromsuch registration; (2) any sale of the Securities made in reliance on Rule 144 promulgated under the 1933 Act (“Rule 144”)may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of such Securitiesunder circumstances in which the seller, or the Person through whom the sale is made, may be deemed to be an underwriter, as thatterm is used in the 1933 Act, may require compliance with some other exemption under the 1933 Act or the rules and regulationsof the SEC thereunder; (3) at the request of the Buyer, the Company shall, from time to time, within three (3) business days ofsuch request, at the sole cost and expense of the Company, either (i) deliver to its transfer agent and registrar for the CommonStock (the “Transfer Agent”) a written letter instructing and authorizing the Transfer Agent to process transfersof the Shares at such time as the Buyer has held the Securities for the minimum holding period permitted under Rule 144, subjectto the Buyer’s providing to the Company and its Transfer Agent certain customary representations contemporaneously withany requested transfer, or (ii) at the Buyer’s option or if the Transfer Agent requires further confirmation of the availabilityof an exemption from registration, furnish to the Buyer an opinion of the Company’s counsel in favor of the Buyer (and,at the request of the Buyer, any agent of the Buyer, including but not limited to the Buyer’s broker or clearing firm) andthe Transfer Agent, reasonably satisfactory in form, scope and substance to the Buyer and the Transfer Agent, to the effect thata contemporaneously requested transfer of shares does not require registration under the 1933 Act, pursuant to the 1933 Act, Rule144 or other regulations promulgated under the 1933 Act and (4) neither the Company nor any other Person is under any obligationto register the Securities under the 1933 Act or to comply with the terms and conditions of any exemption thereunder.

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b. **Restrictive Legend.**The Buyer acknowledges and agrees that the Debentures, and, until such time as the Shares have been registered under the 1933Act as contemplated hereby and sold in accordance with an effective Registration Statement, certificates and other instrumentsrepresenting any of the Securities shall bear a restrictive legend in substantially the following form (and a stop-transfer ordermay be placed against transfer of any such Securities):

 

THIS SECURITY HAS NOT BEEN REGISTEREDWITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATIONUNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPTPURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTIONNOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS ASEVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLETO THE COMPANY.

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c. **Reserved.**

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d. **Securities Filings.**If required in the opinion of Company counsel, the Company will undertake and agree to make all necessary filings in connectionwith the sale of the Securities to the Buyer required under any United States laws and regulations applicable to the Company (includingwithout limitation state “blue sky” laws), or by any domestic securities exchange or trading market, and to providea copy thereof to the Buyer promptly after such filing.

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e.**Reporting Status; Public Trading Market; DTC Eligibility.**So long as the Buyer beneficially own any Securities, (i) theCompany shall timely file, prior to or on the date when due, all reports that would be required to be filed with the SEC pursuantto Section 13 or 15(d) of the Exchange Act if the Company had securities registered under Section 12(b) or 12(g) of the ExchangeAct; (ii) the Company shall not be operated as, or report, to the SEC or any other Person, that the Company is a “shellcompany” or indicate to the contrary to the SEC or any other Person; (iii) the Company shall take all other action underits control necessary to ensure the availability of Rule 144 under the 1933 Act for the sale of Shares by the Buyer at the earliestpossible date; and (iv) the Company shall at all times while any Securities are outstanding maintain its engagement of an independentregistered public accounting firm. Except as otherwise set forth in Transaction Documents, the Company shall take all action underits control necessary to obtain and to continue the listing and trading of its Common Stock (including, without limitation, allRegistrable Securities) on the OTC Markets, Inc. (“OTCM”) on the OTC Pink (“OTCP”), OTCQB (“OTCQB”),or OTCQX (“OTCQX”), and will comply in all material respects with the Company’s reporting, filing and otherobligations under the by-laws or rules of the Financial Industry Regulatory Authority (“FINRA”). If, so long as theBuyer beneficially own any of the Securities, the Company receives any written notice from the OTCM, FINRA, or the SEC with respectto either any alleged deficiency in the Company’s compliance with applicable rules and regulations (including without limitationany comments from the SEC on any of the Company’s documents filed (or the failure to have made any such filing) under the1933 Act or the Exchange Act) (each, a “Regulatory Notice”), then the Company shall promptly, and in any event withinthree (3) business days, provide copies of the Regulatory Notice to the Buyer, and shall promptly, and in any event within five(5) business days of receipt of the Regulatory Notice (a “Regulatory Response”), respond in writing to the OTCM, FIRNAand/or SEC (as the case may be), setting forth the Company’s explanation and/or response to the issues raised in the RegulatoryNotice, with a view towards maintaining and/or regaining full compliance with the applicable rules and regulations of the OTCM,FIRNA and/or SEC and maintaining or regaining good standing of the Company with the OTCM, FINRA and/or SEC, as the case may be,the intent being to ensure that the Company maintain its reporting company status with the SEC and that its Common Stock be andremain available for trading on the OTCP, OTCQB, or OTCQX. Further, at all times while any Securities are outstanding, the CommonStock shall be DWAC Operational, and the Common Stock shall not be subject to any DTC “chill” designation or similarrestriction on the clearing of the Common Stock through DTC.

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f. **Use of Proceeds.**The Company shall use the proceeds from the sale of the Debentures for working capital purposes only.

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g.**Available Shares.**Commencing on the date of execution and delivery of this Agreement, the Company shall have and maintainauthorized and reserved for issuance, free from preemptive rights, that number of shares equal to Seven Hundred percent (700%)of the number of shares of Common Stock (1) issuable based upon the conversion of the then-outstanding Debentures (including accruedinterest thereon) as may be required to satisfy the conversion rights of the Buyer pursuant to the terms and conditions of theDebenture (for the avoidance of doubt, this shall be calculated based on the applicable conversion price that would result onor after the date that is 180 days after the issuance date of the respective Debenture(s) regardless of the date of calculation)(without giving effect to the 4.99% limitation on ownership as set forth in the Debentures), *provided, however*that forpurposes of the foregoing calculation, the full indebtedness under the Debentures shall be deemed immediately convertible and(2) issuable to the Buyer on future Closing Dates, based upon the lowest closing bid price per share of the Common Stock on thedate before the most recent Closing Date (as reported by Bloomberg LP) (collectively in the aggregate the “Required ReserveAmount”). The Company shall monitor its compliance with the foregoing requirements on an ongoing basis. If at any time theCompany does not have available an amount of authorized and non-issued Shares required to be reserved pursuant to this Section,then the Company shall, without notice or demand by the Buyer, call within thirty (30) days of such occurrence and hold withinsixty (60) days of such occurrence a special meeting of shareholders, for the sole purpose of increasing the number of sharesauthorized. Management of the Company shall recommend to shareholders to vote in favor of increasing the number of Common Stockauthorized at the meeting. Members of the Company’s management shall also vote all of their own shares in favor of increasingthe number of Common Stock authorized at the meeting. If the increase in authorized shares is approved by the stockholders atthe meeting, the Company shall implement the increase in authorized shares within three (3) business days following approval atsuch meeting (or as soon thereafter as permitted by applicable law). Alternatively, to the extent permitted by applicable law,in lieu of calling and holding a meeting as described above, the Company may, within thirty (30) days of the date when the Companydoes not have available an amount of authorized and non-issued Shares required to be reserved as described above, procure thewritten consent of stockholders to increase the number of shares authorized, and provide the stockholders with notice thereofas may be required under applicable law (including without limitation Section 14(c) of the Exchange Act and Regulation 14C thereunder).Upon obtaining stockholder approval as aforesaid, the Company shall cause the appropriate increase in its authorized shares ofCommon Stock within three (3) business days (or as soon thereafter as permitted by applicable law). Company’s failure tocomply with these provisions will be an Event of Default (as defined in the Debentures).

 

h. **Reimbursement.**If (i) Buyer and/or Investments becomes a party defendant in any capacity in any action or proceeding brought by any stockholderof the Company, in connection with or as a result of the consummation of the transactions contemplated by the Transaction Documents,or if the Buyer and/or Investments is impleaded in any such action, proceeding or investigation by any Person, or (ii) the Buyerand/or Investments, other than by reason of its own gross negligence, willful misconduct or breach of law (as adjudicated by acourt of law having proper jurisdiction and such adjudication is not subject to appeal), is impleaded in any such action, proceedingor investigation by any Person, then in any such case, the Company shall promptly reimburse the Buyer and/or Investments for itsor their reasonable legal and other expenses (including the cost of any investigation and preparation) incurred in connection therewith.The reimbursement obligations of the Company under this paragraph shall be in addition to any liability which the Company may otherwisehave, shall extend upon the same terms and conditions to any affiliates of the Buyer and/or Investments who are actually namedin such action, proceeding or investigation, and partners, directors, agents, employees and controlling Persons (if any), as thecase may be, of the Buyer, Investments and any such Affiliate, and shall be binding upon and inure to the benefit of any successors,assigns, heirs and personal representatives of the Company, the Buyer, Investments and any such Affiliate and any such Person.Except as otherwise set forth in the Transaction Documents, the Company also agrees that neither any Buyer, Investments nor anysuch Affiliate, partners, directors, agents, employees or controlling Persons shall have any liability to the Company or any Personasserting claims on behalf of or in right of the Company in connection with or as a result of the consummation of the TransactionDocuments.

 

 

i.The Company shall provide the Transfer Agent and/or the Buyer, Investments or their respective brokerage and/or clearing firmwith all relevant legal opinions and other documentation reasonably requested by the Buyer or Investments in connection with theissuance of the Conversion Shares or the Restricted Stock, or the sale thereof, to confirm the share issuance(s) such that theConversion Shares and/or Restricted Stock may be deposited with the applicable brokerage and/or clearing firm.

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j. **Reserved.**

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k. **Notice of MaterialAdverse Effect.**The Company shall notify the Buyer (and any subsequent holder of the Debentures), as soon as practicable andin no event later than three (3) business days of the Company’s knowledge of any Material Adverse Effect on the Company.For purposes of the foregoing, “knowledge” means the earlier of the Company’s actual knowledge or the Company’sconstructive knowledge upon due inquiry.

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l. **Public Disclosure.**Except to the extent required by applicable law or by the SEC, absent the Buyer’s prior written consent, the Companyshall not reference the name of the Buyer in any press release, securities disclosure, business plan, marketing or funding proposal.

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m. **Nature of Transaction;Savings Clause.**It is the parties’ express understanding and agreement that the transactions contemplated by the TransactionDocuments constitute an investment and not a loan. If nonetheless such transactions are deemed to be a loan (as adjudicated bya court of law having proper jurisdiction and such adjudication is not subject to appeal), the Company shall not be obligated orrequired to pay interest at a rate that could subject Buyer to either civil or criminal liability as a result of such rate exceedingthe maximum rate that the Buyer is permitted to charge under applicable law, and the Company’s obligations under the TransactionDocuments shall not be void or voidable on the basis of the Buyer’s lack of any license or registration as a lender withany governmental authority. It is expressly understood and agreed by the parties that neither the amounts payable pursuant to Section12, any redemption premium, remedy upon an Event of Default (as defined in the Debentures) or any Acceleration Amount (as definedin the Debentures), original issue discount nor any investment returns of the Buyer on the sale of the Debentures or the sale ofany Conversion Shares (whether unrealized or realized) shall be construed as interest. If, by the terms of the Debentures, anyother Transaction Document or any other instrument, Buyer is at any time required or obligated to pay interest at a rate exceedingsuch maximum rate, interest payable under the Debenture and/or such other Transaction Documents or other instrument shall be computed(or recomputed) at such maximum rate, and the portion of all prior interest payments (if any) exceeding such maximum shall be appliedto payment of the outstanding principal of the Debentures.

 

 

5. **TRANSFER AGENT INSTRUCTIONS.**

 

a.**Transfer Agent Instruction Letter.**On or before the Signing Closing Date, the Company shall irrevocably instruct its TransferAgent in writing using the letter substantially in the form of Exhibit B annexed hereto, with only such modifications asthe Buyer agrees to, executed by the Company, the Buyer and the Transfer Agent (the “Transfer Agent Instruction Letter”),to (i) reserve that number of shares of Common Stock as is required under Section 4(g) hereof, and (ii) issue Common Stock fromtime to time upon conversion of the Debentures in such amounts as specified from time to time by the Buyer to the Transfer Agentin a Notice of Conversion, in such denominations to be specified by the Buyer in connection with each conversion of the Debentures.The Transfer Agent shall not be restricted from issuing shares from only the allotment reserved hereunder for the Conversion Amount(as defined in the Debentures), but instead may, to the extent necessary to satisfy the amount of shares issuable upon conversion,issue shares above and beyond the amount reserved on account of the Conversion Amount, without any additional instructions orauthorization from the Company, and the Company shall not provide the Transfer Agent with any instructions or documentation contraryto the foregoing. As of the date of this Agreement, the Transfer Agent is American Stock Transfer & Trust Company. The Companyshall at all times while any Debentures are outstanding engage a Transfer Agent which is a party to the Transfer Agent InstructionLetter. If for any reason the Company’s Transfer Agent is not a signatory of the Transfer Agent Instruction Letter whileany Debentures or Restricted Stock are outstanding and held by the Buyer, then such Transfer Agent shall nonetheless be deemedbound by the Transfer Agent Instruction Letter, and the Company shall neither (i) permit the Transfer Agent to disclaim, disregardor refuse to abide by the Transfer Agent’s obligations, terms and agreements set forth in the Transfer Agent InstructionLetter, nor (ii) issue any instructions to the Transfer Agent contrary to the obligations, terms and agreements set forth in theTransfer Agent Instruction Letter . The Company shall not terminate the Transfer Agent or otherwise change Transfer Agents withoutat least fifteen (15) days prior written notice to the Buyer and with the Buyer’s prior written consent to such change,which the Buyer may grant or withhold in its sole discretion. The Company shall continuously monitor its compliance with the sharereservation requirements and, if and to the extent necessary to increase the number of reserved shares to remain and be at leastthe Required Reserve Amount to account for any decrease in the Market Price of the Common Stock, the Company shall immediately(and in any event within three (3) business days) notify the Transfer Agent in writing of the reservation of such additional shares,*provided*that in the event that the number of shares reserved for conversion of the Debentures is less than the RequiredReserve Amount, the Buyer may also directly instruct the Transfer Agent to increase the reserved shares as necessary to satisfythe minimum reserved share requirement, and the Transfer Agent shall act accordingly, *provided, further,*that the Companyshall within three (3) business days provide any written confirmation, assent or documentation thereof as the Transfer Agent mayrequest to act upon a share increase instruction delivered by the Buyer. The Company shall provide the Buyer with a copy of allwritten instructions to the Company’s Transfer Agent with respect to the reservation of shares simultaneously with the issuanceof such instructions to the Transfer Agent. The Company covenants that no instruction other than such instructions referred toin this Section 5 and stop transfer instructions to give effect to Section 4(a) hereof prior to registration and sale of the ConversionShares under the 1933 Act will be given by the Company to the Transfer Agent and that the Conversion Shares shall otherwise befreely transferable on the books and records of the Company as and to the extent provided in this Agreement and applicable law.If the Buyer provides the Company and/or the Transfer Agent with an opinion of counsel reasonably satisfactory to the Companythat registration of a resale by the Buyer of any of the Securities in accordance with clause (1)(B) of Section 4(a) of this Agreementis not required under the 1933 Act, the Company shall (except as provided in clause (2) of Section 4(a) of this Agreement) permitthe de-legending or transfer of the Securities and, in the case of the Conversion Shares, instruct the Company’s TransferAgent to issue one or more certificates for Common Stock without legend in such name and in such denominations as specified bythe Buyer.

 

 

b.**Conversion.**(i) The Company shall permit the Buyer to exercise the right to convert the Debentures by faxing, emailingor delivering overnight an executed and completed Notice of Conversion to the Company or the Transfer Agent. If so requested bythe Buyer or the Transfer Agent, the Company shall within three (3) business days respond with its endorsement so as to confirmthe outstanding principal amount of any Debenture submitted for conversion or shall reconcile any difference with the Buyer promptlyafter receiving such Notice of Conversion.

 

(ii) The term “ConversionDate” means, with respect to any conversion elected by the holder of the Debentures, the date specified in the Notice ofConversion, provided the copy of the Notice of Conversion is given either via mail or facsimile to or otherwise delivered to theTransfer Agent and/or the Company in accordance with the provisions hereof so that it is received by the Transfer Agent and/orthe Company on or before such specified date.

 

(iii) The Company shalldeliver (or will cause the Transfer Agent to deliver) the Conversion Shares issuable upon conversion as follows: (1) if the Companyis then DWAC Operational, via DWAC, (2) if the Common Stock is then eligible for the Depository Trust Company’s Direct RegistrationSystem (“DRS”), if so requested by the Buyer, or (3) if the Company is not then DWAC Operational or the Common Stockis not then eligible for DRS, in certificated form, to the Buyer at the address specified in the Notice of Conversion (which maybe the Buyer’s address for notices as contemplated by Section 10 hereof or a different address) via express courier, in eachcase within three (3) business days (the “Delivery Date”) after (A) the business day on which the Company or the TransferAgent has received the Notice of Conversion (by facsimile, email or other delivery) or (B) the date on which payment of interestand principal on the Debentures, which the Company has elected to pay by the issuance of Common Stock, as contemplated by the Debentures,was due, as the case may be.

 

c. **Failure to TimelyIssue Conversion Shares or De-Legended Shares.**The Company’s failure to issue and deliver Conversion Shares to the Buyer(either by DWAC, DRS or in certificated form, as required by Section 5(b)) on or before the Delivery Date shall be considered anEvent of Default, which shall entitle the Buyer to certain remedies set forth in the Debentures and provided by applicable law**.**Similarly, the Company’s failure to issue and deliver Common Stock in unrestricted form without a restrictive legendwhen required under the Transaction Documents shall entitle the Buyer to damages for the diminution in value (if any) of the relevantshares between the date delivery was due versus the date ultimately delivered in unrestricted form. The Company acknowledges thatits failure to timely honor a Notice of Conversion (or the occurrence of any other Event of Default) shall cause definable financialhardship on the Buyer(s) and that the remedies set forth herein and in the Debentures are reasonable and appropriate.

 

 

d.**Duties of Company; Authorization.**The Company shall inform the Transfer Agent of the reservation of shares contemplatedby Section 4(g) and this Section 5, and shall keep current in its payment obligations to the Transfer Agent such that the TransferAgent will continue to process share transfers and the initial issuance of shares of Common Stock upon the conversion of Debentures.The Company hereby authorizes and agrees to authorize the Transfer Agent to correspond and otherwise communicate with the Buyeror their representatives in connection with the foregoing and other matters related to the Common Stock. Further, the Companyhereby authorizes the Buyer or its representative to provide instructions to the Transfer Agent that are consistent with the foregoingand instructs the Transfer Agent to honor any such instructions. Should the Company fail for any reason to keep current in itspayment obligations to the Transfer Agent, the Buyer and/or Investments may pay such amounts as are necessary to compensate theTransfer Agent for performing its duties with respect to share reservation, issuance of Conversion Shares and/or de-legendingcertificates representing Restricted Stock, and all amounts so paid shall be promptly reimbursed by the Company. If not so reimbursedwithin thirty (30) days, such amounts shall, at the option of the Buyer and without prior notice to or consent of the Company,be added to the principal amount due under the Debenture(s) held by the Buyer, whereupon interest will begin to accrue on suchamounts at the rate specified in the Debentures.

 

e. **Effect of Bankruptcy.**The Buyer shall be entitled to exercise its conversion privilege with respect to the Debentures notwithstanding the commencementof any case under 11 U.S.C. §101 et seq. (the “Bankruptcy Code”). In the event the Company is a debtorunder the Bankruptcy Code, the Company hereby waives, to the fullest extent permitted, any rights to relief it may have under 11U.S.C. §362 in respect of the Buyer’s conversion privilege. The Company hereby waives, to the fullest extent permitted,any rights to relief it may have under 11 U.S.C. §362 in respect of the conversion of the Debentures. The Company agrees,without cost or expense to the Buyer, to take or to consent to any and all action necessary to effectuate relief under 11 U.S.C.§362.

 

6. **CLOSINGS.**

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a. **Signing Closing.**Promptly upon the execution and delivery of this Agreement, the Signing Debenture, and all conditions in Sections 7 and 8 hereinare met (the “Signing Closing Date”), (A) the Company shall deliver to the Buyer the following: (i) the Signing Debenture;(ii) the Transfer Agent Instruction Letter; (iii) duly executed counterparts of the Transaction Documents; and (iv) an officer’scertificate of the Company confirming the accuracy of the Company’s representations and warranties contained herein, and(B) the Buyer shall deliver to the Company the following: (i) the Signing Purchase Price and (ii) duly executed counterparts ofthe Transaction Documents (as applicable). The Company shall immediately pay the fees due under Section 12 of this Agreement uponreceipt of the Signing Purchase Price if Buyer does not withhold such amounts from the Signing Purchase Price pursuant to Section12.

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b. **Second Closing.**At any time after sixty (60) days following the Signing Closing Date, subject to the mutual agreement of the Buyer and theCompany, for the “Second Closing Date” and subject to satisfaction of the conditions set forth in Sections 7 and 8,(A) the Company shall deliver to the Buyer the following: (i) the Second Debenture; (ii) an amendment to the Transfer Agent InstructionLetter instructing the Transfer Agent to reserve that number of shares of Common Stock as is required under Section 4(g) hereof,if necessary; and (iii) an officer’s certificate of the Company confirming, as of the Second Closing Date, the accuracy ofthe Company’s representations and warranties contained herein and updating Schedules 3(b), 3(c) and 3(k) asof the Second Closing Date, and (B) the Buyer shall deliver to the Company the Second Purchase Price.

 

 

c.**Third Closing.**At any time after sixty (60) days following the Second Closing Date, subject to the mutual agreement ofthe Buyer and the Company, for the “Third Closing Date” and subject to satisfaction of the conditions set forth inSections 7 and 8, (A) the Company shall deliver to the Buyer the following: (i) the Third Debenture; (ii) an amendment to theTransfer Agent Instruction Letter instructing the Transfer Agent to reserve that number of shares of Common Stock as is requiredunder Section 4(g) hereof, if necessary; and (iii) an officer’s certificate of the Company confirming, as of the Third ClosingDate, the accuracy of the Company’s representations and warranties contained herein and updating Schedules 3(b), 3(c)and 3(k) as of the Third Closing Date, and (B) the Buyer shall deliver to the Company the Third Purchase Price.

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d. **Location and Timeof Closings.**Each Closing shall be deemed to occur on the related Closing Date at the office of the Buyer’s counsel andshall take place no later than 5:00 P.M., east coast time, on such day or such other time as is mutually agreed upon by the Companyand the Buyer.

 

7. **CONDITIONS TO THE COMPANY’S OBLIGATIONTO SELL.**

 

The Company’sobligation to sell the Debentures to the Buyer pursuant to this Agreement on each Closing Date is conditioned upon:

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a. **Purchase Price.**Delivery to the Company of good funds as payment in full of the respective Purchase Price for the Debentures at each Closingin accordance with this Agreement;

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b. **Representationsand Warranties; Covenants.**The accuracy on the Closing Date of the representations and warranties of the Buyer contained inthis Agreement, each as if made on such date, and the performance by the Buyer on or before such date of all covenants and agreementsof the Buyer required to be performed on or before such date; and

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c. **Laws and Regulations;Consents and Approvals.**There shall not be in effect any law, rule or regulation prohibiting or restricting the transactionscontemplated hereby, or requiring any consent or approval which shall not have been obtained.

 

8. **CONDITIONS TO THE BUYER’S OBLIGATIONTO PURCHASE.**

 

The Buyer’s obligation to purchase the Debenturesat each Closing is conditioned upon:

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a. **Transaction Documents.**The execution and delivery of this Agreement by the Company;

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b. **Debenture(s).**Deliveryby the Company to the Buyer of the Debentures to be purchased in accordance with this Agreement;

 

 

c.**Section 4(2) Exemption.**The Debentures and the Conversion Shares shall be exempt from registration under the SecuritiesAct of 1933 (as amended), pursuant to Section 4(2) thereof;

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d. **DWAC Status**.The Common Stock shall be DWAC Operational;

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e. **Representationsand Warranties; Covenants.**The accuracy in all material respects on the Closing Date of the representations and warrantiesof the Company contained in this Agreement, each as if made on such date, and the performance by the Company on or before suchdate of all covenants and agreements of the Company required to be performed on or before such date;

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f. **Good-faith Opinion.**It should be Buyer’s reasonable belief that (i) no Event of Default under the terms of any outstanding indebtedness ofthe Company shall have occurred or would likely occur with the passage of time and (ii) no material adverse change in the financialcondition or business operations of the Company shall have occurred;

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g. **Legal Proceedings.**There shall be no litigation, criminal or civil, regulatory impairment or other legal and/or administrative proceedings challengingor seeking to limit the Company’s ability to issue the Securities or the Common Stock;

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h. [Reserved];

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i. **Corporate Resolutions.**Delivery by the Company to the Buyer a copy of resolutions of the Company’s board of directors, approving and authorizingthe execution, delivery and performance of the Transaction Documents and the transactions contemplated thereby in the form attachedhereto as Exhibit C (the “Irrevocable Resolutions”);

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j. **Officer’sCertificate.**Delivery by the Company to the Buyer of a certificate of the Chief Executive Officer of the Company in the formattached hereto as Exhibit D;

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k. **Search Results.**Delivery by the Company to the Buyer of copies of UCC search reports, issued by the Secretary of State of the state of incorporationof the Company and each Subsidiary, dated such a date as is reasonably acceptable to Buyer, listing all effective financing statementswhich name the Company or Subsidiary (as applicable), under its present name and any previous names, as debtor, together with copiesof such financing statements;

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l. **Certificate ofGood Standing.**Delivery by the Company to the Buyer of a copy of a certificate of good standing with respect to the Company,issued by the Secretary of State of the state of incorporation of the Company, dated such a date as is reasonably acceptable toBuyer, evidencing the good standing thereof;

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m. **Laws and Regulations;Consents and Approvals.**There shall not be in effect any law, rule or regulation prohibiting or restricting the transactionscontemplated hereby, or requiring any consent or approval which shall not have been obtained; and

 

 

n.**Adverse Changes.**From and after the date hereof to and including each Closing Date, (i) the trading of the Common Stockshall not have been suspended by the SEC, FINRA, or any other governmental or self-regulatory organization, and trading in securitiesgenerally on OTCM shall not have been suspended or limited, nor shall minimum prices been established for securities traded onthe OTCM; (ii) there shall not have occurred any outbreak or escalation of hostilities involving the United States or any materialadverse change in any financial market that in either case in the reasonable judgment of the Buyer makes it impracticable or inadvisableto purchase the Debentures.

 

9. **GOVERNING LAW; MISCELLANEOUS.**

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a. **MANDATORYFORUM SELECTION.**ANY DISPUTE ARISING UNDER, RELATING TO, OR IN CONNECTION WITH THE AGREEMENT OR RELATED TO ANY MATTER WHICHIS THE SUBJECT OF OR INCIDENTAL TO THE AGREEMENT (WHETHER OR NOT SUCH CLAIM IS BASED UPON BREACH OF CONTRACT OR TORT) SHALL BESUBJECT TO THE EXCLUSIVE JURISDICTION AND VENUE OF THE STATE AND/OR FEDERAL COURTS LOCATED IN MIAMI-DADE COUNTY, FLORIDA. THISPROVISION IS INTENDED TO BE A “MANDATORY” FORUM SELECTION CLAUSE AND GOVERNED BY AND INTERPRETED CONSISTENTLY WITHNEVADA LAW.

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b. **GoverningLaw.**Except in the case of the Mandatory Forum Selection clause above, this Agreement shall be delivered and accepted in andshall be deemed to be contracts made under and governed by the internal laws of the State of Nevada, and for all purposes shallbe construed in accordance with the laws of the State of Nevada, without giving effect to the choice of law provisions. To theextent determined by the applicable court described above, the Company shall reimburse the Buyer for any reasonable legal feesand disbursements incurred by the Buyer in enforcement of or protection of any of its rights under any of the Transaction Documents.

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c. **Waivers.**Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising suchright or remedy, shall not operate as a waiver thereof.

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d. **Successorsand Assigns.**This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the partieshereto.

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e. **Construction.**All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context mayrequire.

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f. **Facsimiles;E-mails.**A facsimile or email transmission of this signed Agreement or a Notice of Conversion under the Debentures shall belegal and binding on all parties hereto. Such electronic signatures shall be the equivalent of original signatures.

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g. **Counterparts.**This Agreement may be signed in one or more counterparts, each of which shall be deemed an original.

 

 

h. **Headings.**Theheadings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, thisAgreement.

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i. **Enforceability.**If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceabilityshall not affect the validity or enforceability of the remainder of this Agreement or the validity or enforceability of this Agreementin any other jurisdiction.

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j. **Amendment.**ThisAgreement may be amended only by the written consent of a majority in interest of the holders of the Debentures and an instrumentin writing signed by the Company.

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k. **Entire Agreement.**This Agreement, together with the other Transaction Documents, supersedes all prior agreements and understandings among theparties hereto with respect to the subject matter hereof.

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l. **No Strict Construction.**This Agreement shall be construed as if both Parties had equal say in its drafting, and thus shall not be construed againstthe drafter.

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m. **Further Assurances.**Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute anddeliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in orderto carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

10. **NOTICES.**

 

Any notice requiredor permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively given on theearliest of:

 

a. the date delivered,if delivered by personal delivery as against written receipt therefor or by confirmed facsimile or email transmission,

 

b. the third (3rd)business day after deposit, postage prepaid, in the United States Postal Service by registered or certified mail, or

 

c. the first (1st)business day after deposit with a recognized courier service (e.g. FedEx, UPS, DHL, US Postal Service) for delivery by next-dayexpress courier, with delivery costs and fees prepaid,

 

in each case, addressed to each of theother parties thereunto entitled at the following addresses (or at such other addresses as such party may designate by ten (10)days’ advance written notice similarly given to each of the other parties hereto):

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1600 NE Loop 410, Suite 126

San Antonio, TX 78209

Attention: Arthur Smith, Chief Executive Officer

Email: antonio@digerati-inc.com

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**With copies to (which shall not constitute notice):**

 

Brewer & Pritchard, P.C.

800 Bering Dr., Suite 201 Houston, TX 77057

Attention: Thomas C. Pritchard

Email: Pritchard@bplaw.com

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333 South Hibiscus Drive

Miami Beach, FL 33139

Attention: Jason Goldstein

Email: jgoldstein@peakoneinvestments.com

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**With copies to (which shall not constitute notice):**

 

Legal & Compliance, LLC

330 Clematis Street, Suite 217

West Palm Beach, FL 33401

Attention: Chad Friend, Esq., LL.M.

Email: CFriend@LegalandCompliance.com

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**11. SURVIVALOF REPRESENTATIONS AND WARRANTIES.**The Company’s representations and warranties herein shall survive for so long as anyDebentures are outstanding, and shall inure to the benefit of the Buyer, its successors and assigns.

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**12. FEES;EXPENSES.**

 

a. **CommitmentFee**. The Company shall pay to Investments a non-accountable fee (the “Commitment Fee”) of (i) Three Thousand FiveHundred and 00/100 Dollars ($3,500.00) on the Signing Closing Date (with respect to the Signing Debenture), Two Thousand Five Hundredand 00/100 Dollars ($2,500.00) on the Second Closing Date (with respect to the Second Debenture), as well as Two Thousand FiveHundred and 00/100 Dollars ($2,500.00) on the Third Closing Date (with respect to the Third Debenture), for Investments’expenses and analysis performed in connection with the analysis of the Company and the propriety of the Buyer’s making thecontemplated investment. The Commitment Fee shall be paid on the respective closing dates if Buyer does not withhold such amountsfrom the respective purchase price pursuant to Section 12(c).

 

b.**Legal Fees**. The Company shall pay the legal fees of the Buyer’s counsel (the “Legal Fees”) in the amountof Two Thousand Five Hundred and 00/100 Dollars ($2,500.00) on the Signing Closing Date (with respect to the Signing Debenture),Two Thousand Five Hundred and 00/100 Dollars ($2,500.00) on the Second Closing Date (with respect to the Second Debenture), aswell as Two Thousand Five Hundred and 00/100 Dollars ($2,500.00) on the Third Closing Date (with respect to the Third Debenture).The foregoing legal fees shall be paid on the respective closing dates if Buyer does not withhold such amounts from the respectivepurchase price pursuant to Section 12(c).

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c. **Disbursements.**In furtherance of the foregoing, the Company hereby authorizes the Buyer to deduct the cash portion of the Commitment Fee andthe Legal Fees from the Signing Purchase Price and transmit same to the respective payee.

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*[Signature Page Follows]*

 

 

INWITNESS WHEREOF, this Agreement has been duly executed by the Buyer and the Company as of the date first set forth above.

 

 

*[Signature Page to Securities PurchaseAgreement]*

 

 

 

**SCHEDULE 3(b)**

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**COMPANY ORGANIZATION CHART**