Document:

Exhibit 10.7

 

Securities Purchase Agreement

 

This
Securities Purchase Agreement, dated as of February 21, 2014 (this “Agreement”), is entered into by and
between Brazil Minerals, Inc., a Nevada corporation (the “Company”),
and St George Investments LLC, an Illinois limited liability company, its successors
and/or assigns (“Buyer”).

 

RECITALS:

 

A.           The
Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration for
offers and sales to accredited investors afforded, inter alia, under Regulation D (“Regulation D”) as promulgated
by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended
(the “1933 Act”), and/or Section 4(2) of the 1933 Act.

 

B.           The
Buyer wishes to acquire from the Company, and the Company desires to issue and sell to the Buyer, the Note (as defined below),
which Note will be convertible into shares of common stock of the Company, par value $0.001 per share (the “Common Stock”),
upon the terms and subject to the conditions of the Note, this Agreement and the other Transaction Documents (as defined below).

 

AGREEMENT:

 

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

 

1.          CERTAIN
DEFINITIONS. As used herein, each of the following terms has the meaning set forth below, unless the context otherwise requires:

 

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

 

“Buyer’s
Counsel” means Hansen Black Anderson Ashcraft PLLC.

 

“Buyer Control
Person” means each manager, executive officer, promoter, and such other Persons as may be deemed in control of the Buyer
pursuant to Rule 405 under the 1933 Act or Section 20 of the 1934 Act (as defined below).

 

“Certificate
of Incorporation” means the certificate of incorporation, articles of incorporation or other charter document (howsoever
denominated) of the Company, as amended to date.

 

“Closing Date”
means the date of the closing of the purchase and sale of the Securities.

 

“Company Control
Person” means each director, executive officer, promoter, and such other Persons as may be deemed in control of the Company
pursuant to Rule 405 under the 1933 Act or Section 20 of the 1934 Act.

 

“Company Counsel”
means the Company’s securities or corporate counsel from time to time.

 

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“Company’s
SEC Documents” means the Company’s filings on the SEC’s EDGAR system.

 

“Conversion
Date” means the date a Holder submits a Conversion Notice, as provided in the Note.

 

“Conversion
Notice” has the meaning ascribed to it in the Note.

 

“Conversion
Price” has the meaning ascribed to it in the Note.

 

“Conversion
Shares” has the meaning ascribed to it in the Note.

 

“Delivery
Date” means the date that Conversion Shares are required to be delivered to Holder under Section 3 or Section 8 of the
Note, as applicable.

 

“DTC”
means the Depository Trust Company.

 

“DTC/FAST
Program” means DTC’s Fast Automated Securities Transfer Program.

 

“DWAC”
means Deposit Withdrawal at Custodian as defined by DTC.

 

“DWAC Eligible
Conditions” means that (i) the Common Stock is eligible at DTC for full services pursuant to DTC’s Operational
Arrangements, including, without limitation, transfer through DTC’s DWAC system, (ii) the Company has been approved (without
revocation) by the DTC’s underwriting department, and (iii) the Transfer Agent is approved as an agent in the DTC/FAST Program,
(iv) after the date which is six months after the date of the Note, the Conversion Shares are otherwise eligible for delivery via
DWAC; and (v) the Transfer Agent does not have a policy prohibiting or limiting delivery of the Conversion Shares via DWAC.

 

“Holder”
means the Person holding the relevant Securities at the relevant time.

 

“Last Audited
Date” means December 31, 2012.

 

“Market Price”
has the meaning ascribed to it in the Note.

 

“Material
Adverse Effect” means an event or combination of events, which individually or in the aggregate, would reasonably be
expected to (a) adversely affect the legality, validity or enforceability of the Note or any of the other Transaction Documents,
(b) have or result in a material adverse effect on the results of operations, assets, or financial condition of the Company and
its Subsidiaries, taken as a whole, or (c) adversely impair the Company’s ability to perform fully on a timely basis its
material obligations under any of the Transaction Documents or the transactions contemplated thereby.

 

“Maturity
Date” has the meaning ascribed to it in the Note.

 

“Outstanding
Balance” has the meaning ascribed to it in the Note.

 

“Permitted
Liens” means (a) any Lien (as defined herein) for taxes not yet due or delinquent or being contested in good faith by
appropriate proceedings for which adequate reserves have been established in accordance with GAAP, (b) any statutory Lien arising
in the ordinary course of business by operation of law with respect to a liability that is not yet due or delinquent, and (c) any
Lien created by operation of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in
the ordinary course of business with respect to a liability that is not yet due or delinquent or that are being contested in good
faith by appropriate proceedings.

 

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

 

“Principal
Trading Market” means (a) the NYSE Amex, (b) the New York Stock Exchange, (c) the Nasdaq Global Market, (d) the Nasdaq
Capital Market, (e) the OTC Bulletin Board, (f) the OTCQX or OTCQB, or (g) such other market on which the Common Stock is principally
traded at the relevant time, but shall not include OTC Pink (a.k.a., “pink sheets”).

 

“Purchase
Price” is defined in Section 2.1(a) hereof.

 

“Registration
Statement” means a registration statement of the Company under the 1933 Act covering securities of the Company (including
Common Stock) on Form S-3, if the Company is then eligible to file using such form, and if not eligible, on Form S-1 or other appropriate
form.

 

“Rule 144”
means (a) Rule 144 promulgated under the 1933 Act or (b) any other similar rule or regulation of the SEC that may at any time permit
a Holder to sell securities of the Company to the public without registration under the 1933 Act.

 

“Securities”
means the Note and the Shares.         

 

“Shares”
means the shares of Common Stock representing any or all of the Conversion Shares.

 

“State of
Incorporation” means Nevada.

 

“Subsidiary”
or “Subsidiaries” means, as of the relevant date, any entity or entities of which 50% or more of the voting
securities are owned by the Company or any Subsidiary of the Company (whether or not included in the Company’s SEC Documents)
whether now existing or hereafter acquired or created.

 

“Trading Day”
means any day during which the Principal Trading Market shall be open for business.

 

“Transaction
Documents” means this Agreement, the Note, the Transfer Agent Letter (defined below), and all other certificates (including,
without limitation, the Secretary’s Certificate (defined below), documents, agreements, resolutions and instruments delivered
to any party under or in connection with this Agreement, as the same may be amended from time to time.

 

“Transfer
Agent” means, at any time, the transfer agent for the Common Stock.

 

“Wire Instructions”
means the wire instructions for the Purchase Price, as provided by the Company, set forth on ANNEX I.

 

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2.          AGREEMENT
TO PURCHASE; PURCHASE PRICE.

 

2.1.          Purchase.

 

(a)          Subject
to the terms and conditions of this Agreement and the other Transaction Documents, the undersigned Buyer hereby agrees to purchase
from the Company a Convertible Promissory Note in the principal amount of $222,500.00 substantially in the form attached hereto
as ANNEX II (the “Note”). In consideration thereof, the Buyer shall pay $200,000.00 (the “Purchase
Price”) to the Company. The Purchase Price shall be paid to the Company at Closing (defined below) in accordance with
the Wire Instructions.  

 

(b)          In
consideration for the Purchase Price, the Company shall, at the Closing (defined below):

 

(i)          execute
and deliver to the Transfer Agent, and the Transfer Agent shall execute to indicate its acceptance thereof, the irrevocable letter
of instructions to transfer agent substantially in the form attached hereto as ANNEX III (the “Transfer Agent Letter”);

 

(ii)         cause
to be executed and delivered to the Buyer a fully executed secretary’s certificate and written consent of directors evidencing
the Company’s approval of the Transaction Documents substantially in the forms attached hereto as ANNEX IV (together,
the “Secretary’s Certificate”); and

 

(iii)        cause
to be executed and delivered to the Buyer a fully executed share issuance resolution to be delivered to the Transfer Agent substantially
in the form attached hereto as ANNEX V (the “Share Issuance Resolution”).

 

(c)          At
the Closing, the Buyer shall deliver to the Company the Purchase Price.

 

2.2.          Form
of Payment; Delivery of Securities. The purchase and sale of the Securities shall take place at a closing (the “Closing”)
to be held at the offices of the Buyer, or such other place as agreed to by the parties on the Closing Date. At the Closing, the
Company will deliver the Transaction Documents to the Buyer against delivery by the Buyer to the Company of the Purchase Price.

 

2.3.          Purchase
Price. The Note carries an original issue discount of $20,000.00 (the “OID”). In addition, the Company agrees
to pay $5,000.00 to the Buyer to cover the Buyer’s legal fees, accounting costs, due diligence, monitoring and other transaction
costs incurred in connection with the purchase and sale of the Securities (the “Transaction Expense Amount”),
$2,500.00 of which has been previously paid to the Buyer and the remaining $2,500.00 of which is included in the initial principal
balance of the Note (the “Carried Transaction Expense Amount”). The Purchase Price, therefore, shall be $200,000.00,
computed as follows: $222,500.00 original principal balance, less the OID, less the Carried Transaction Expense Amount.

 

3.          BUYER
REPRESENTATIONS AND WARRANTIES. The Buyer represents and warrants to, and covenants and agrees with, the Company, as of the
date hereof and as of the Closing Date, as follows:

 

3.1.          Binding
Obligation. The Transaction Documents to which the Buyer is a party, and the transactions contemplated hereby and thereby,
have been duly and validly authorized by the Buyer. This Agreement has been executed and delivered by the Buyer, and this Agreement
is, and each of the other Transaction Documents to which the Buyer is a party, when executed and delivered by the Buyer (if necessary),
will be valid and binding obligations of the Buyer enforceable in accordance with their respective terms, subject as to enforceability
only 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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3.2.          Accredited
Investor Status. The Buyer is an “accredited investor” as that term is defined in Regulation D.

 

4.          COMPANY
REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to the Buyer as of the date hereof and as of the Closing
Date that:

 

4.1.          Rights
of Others Affecting the Transactions. There are no preemptive rights of any stockholder of the Company, as such, to acquire
the Securities. No other party has a currently exercisable right of first refusal which would be applicable to any or all of the
transactions contemplated by the Transaction Documents.

 

4.2.          Status.
The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Incorporation
and has the requisite corporate power to own its properties and to carry on its business as now being conducted. The Company is
duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the nature of the business
conducted or property owned by it makes such qualification necessary, other than those jurisdictions in which the failure to so
qualify would not have or result in a Material Adverse Effect. The Company is obligated to file reports pursuant to Section 15(d)
of the Securities Exchange Act of 1934, as amended (the “1934 Act”). The Company has not taken and will not
take any action designed to terminate or suspend its obligations to file periodic reports under the 1934 Act, nor has the Company
received any notification that the SEC is contemplating terminating or suspending such obligation. The Common Stock is quoted on
the Principal Trading Market. The Company has received no notice, either oral or written, with respect to the continued eligibility
of the Common Stock for quotation on the Principal Trading Market, and the Company has maintained all requirements on its part
for the continuation of such quotation. The Company has not, in the twelve (12) months preceding the date hereof, received notice
from the Principal Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not
in compliance with the listing or maintenance requirements of such Principal Trading Market. The Company is, and has no reason
to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.

 

4.3.          Authorized
Shares.

 

(a)          The
authorized capital stock of the Company consists of 10,000,000 shares of preferred stock, $0.001 par value per share, of which
approximately 1 share is outstanding, and 150,000,000 shares of Common Stock, $0.001 par value per share, of which approximately
70,963,434 are outstanding. Of the outstanding shares of Common Stock, approximately 37,922,115 shares are beneficially owned by
Affiliates of the Company. Of the authorized shares of Common Stock that are not currently outstanding, approximately 2,800,000
of such shares are reserved.

 

(b)          Other
than as set forth in the Company’s SEC Documents, there are no outstanding securities which are convertible into or exchangeable
for shares of Common Stock, whether such conversion is currently exercisable or exercisable only upon some future date or the occurrence
of some event in the future.

 

(c)          All
issued and outstanding shares of Common Stock have been duly authorized and validly issued and are fully paid and non-assessable.
After considering all other commitments that may require the issuance of Common Stock, the Company has sufficient authorized and
unissued shares of Common Stock as may be necessary to effect the issuance of the Shares on the Closing Date, were the Note issued
and fully converted on that date.

 

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(d)          The
Shares have been duly authorized by all necessary corporate action on the part of the Company as of or prior to the Closing in
accordance with the terms of this Agreement, and, when issued on conversion of, or in payment of interest on the Note in accordance
with the terms thereof, will have been duly and validly issued, fully paid and non-assessable, free from all taxes, liens, claims,
pledges, mortgages, restrictions, obligations, security interests and encumbrances of any kind, nature and description, and will
not subject the Holder thereof to personal liability by reason of being a Holder.

 

(e)          The
Conversion Shares, will upon issuance be validly issued, fully paid and non-assessable and the Company presently has no claims
or defenses of any nature whatsoever with respect to the Conversion Shares.

 

4.4.          Transaction
Documents and Stock. This Agreement and each of the other Transaction Documents, and the transactions contemplated hereby and
thereby, have been duly and validly authorized by the Company. This Agreement has been duly executed and delivered by the Company
and this Agreement is, and the Note, and each of the other Transaction Documents, when executed and delivered by the Company, will
be, valid and binding obligations of the Company enforceable in accordance with their respective terms, subject as to enforceability
only to general principles of equity and to bankruptcy, insolvency, moratorium, and other similar laws affecting the enforcement
of creditors’ rights generally.

 

4.5.          Non-contravention.
The execution and delivery of this Agreement and each of the other Transaction Documents by the Company, the issuance of the Securities
in accordance with the terms hereof and thereof, and the consummation by the Company of the other transactions contemplated by
this Agreement, the Note, and the other Transaction Documents do not and will not conflict with or result in a breach by the Company
of any of the terms or provisions of, or constitute a default under (a) the Certificate of Incorporation or bylaws of the Company,
each as currently in effect, (b) any indenture, mortgage, deed of trust, or other material agreement or instrument to which the
Company is a party or by which it or any of its properties or assets are bound, including any listing agreement for the Common
Stock except as herein set forth, or (c) to the Company’s 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 the Company or any of the Company’s properties or assets, except such
conflict, breach or default which would not have or result in a Material Adverse Effect.

 

4.6.          Approvals.
No authorization, approval or consent of any court, governmental body, regulatory agency, self-regulatory organization, or stock
exchange or market or the stockholders or any lender of the Company is required to be obtained by the Company for the issuance
and sale of the Securities to the Buyer as contemplated by this Agreement, except such authorizations, approvals and consents that
have been obtained.

 

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4.7.          Filings;
Financial Statements. None of the Company’s SEC Documents contained, at the time they were filed, any untrue statement
of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not misleading. The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by the Company with the SEC under the 1934 Act on a timely basis or
has received a valid extension of such time of filing and has filed any such report, schedule, form, statement or other document
prior to the expiration of any such extension. As of their respective dates, the financial statements of the Company included in
the Company’s SEC Documents complied as to form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with
generally accepted accounting principles, consistently applied, during the periods involved (except (a) as may be otherwise indicated
in such financial statements or the notes thereto, or (b) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the
Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end audit adjustments). No other information provided by or on behalf of the Company to
the Buyer which is not included in the Company’s SEC Documents, including, without limitation, information referred to in
this Agreement, contains any untrue statement of a material fact or omits to state any material fact necessary in order to make
the statements therein, in the light of the circumstance under which they are or were made, not misleading.

 

4.8.          Absence
of Certain Changes. Since the Last Audited Date, there has been no Material Adverse Effect. Since the Last Audited Date, the
Company has not (a) incurred or become subject to any material liabilities (absolute or contingent), except liabilities incurred
in the ordinary course of business consistent with past practices; (b) discharged or satisfied any material lien or encumbrance
or paid any material obligation or liability (absolute or contingent), other than current liabilities paid in the ordinary course
of business consistent with past practices; (c) declared or made any payment or distribution of cash or other property to stockholders
with respect to its capital stock, or purchased or redeemed, or made any agreements to purchase or redeem, any shares of its capital
stock; (d) sold, assigned or transferred any other material tangible assets, or canceled any material debts owed to the Company
by any third party or material claims of the Company against any third party, except in the ordinary course of business consistent
with past practices; (e) waived any rights of material value, whether or not in the ordinary course of business, or suffered the
loss of any material amount of existing business; (f) made any increases in employee compensation, except in the ordinary course
of business consistent with past practices; or (g) experienced any material problems with labor or management in connection with
the terms and conditions of their employment.

 

4.9.          Full
Disclosure. There is no fact known to the Company or that the Company should know after having made all reasonable inquiries
(other than conditions known to the public generally or as disclosed in the Company’s SEC Documents since the Last Audited
Date) that has not been disclosed in writing to the Buyer that would reasonably be expected to have or result in a Material Adverse
Effect.

 

4.10.         Absence
of Litigation. 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 before or by any governmental authority
or non-governmental department, commission, board, bureau, agency or instrumentality or any other person, wherein an unfavorable
decision, ruling or finding would have a Material Adverse Effect or which would adversely affect the validity or enforceability
of, or the authority or ability of the Company to perform its obligations under, any of the Transaction Documents. The Company
is not aware of any valid basis for any such claim that (either individually or in the aggregate with all other such events and
circumstances) could reasonably be expected to have a Material Adverse Effect. There are no outstanding or unsatisfied judgments,
orders, decrees, writs, injunctions or stipulations to which the Company is a party or by which the Company or any of its properties
is bound, that involve the transactions contemplated herein or that, alone or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.

 

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4.11.         Absence
of Events of Default. Neither the Company nor any of its Subsidiaries is in violation of or in default with respect to (a)
its Certificate of Incorporation or bylaws or other organizational documents, each as currently in effect, or any material judgment,
order, writ, decree, statute, rule or regulation applicable to such entity; or (b) any material mortgage, indenture, agreement,
instrument or contract to which such entity is a party or by which it or any of its properties or assets are bound (nor is there
any waiver in effect which, if not in effect, would result in such a violation or default), except such breach or default which
would not have or result in a Material Adverse Effect.

 

4.12.         Absence
of Certain Company Control Person Actions or Events. None of the following has occurred during the past five (5) years with
respect to a Company Control Person:

 

(a)          A
petition under the federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or
similar officer was appointed by a court for the business or property of such Company Control Person, or any partnership in which
he or she was a general partner at or within two (2) years before the time of such filing, or any corporation or business association
of which he or she was an executive officer at or within two (2) years before the time of such filing;

 

(b)          Such
Company Control Person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding
traffic violations and other minor offenses);

 

(c)          Such
Company Control Person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any
court of competent jurisdiction, permanently or temporarily enjoining him or her from, or otherwise limiting, the following activities:

 

(i)          acting,
as an investment advisor, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any
investment company, bank, savings and loan association or insurance company, as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker, any other Person regulated by the Commodity Futures Trading Commission
(“CFTC”) or engaging in or continuing any conduct or practice in connection with such activity;

 

(ii)         engaging
in any type of business practice; or

 

(iii)        engaging
in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal
or state securities laws or federal commodities laws;

 

(d)          Such
Company Control Person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any
federal or state authority barring, suspending or otherwise limiting for more than sixty (60) calendar days the right of such Company
Control Person to engage in any activity described in Section 4.12(c) above, or to be associated with Persons engaged in any
such activity; or

 

(e)          Such
Company Control Person was found by a court of competent jurisdiction in a civil action or by the CFTC or SEC to have violated
any federal or state securities law, and the judgment in such civil action or finding by the CFTC or SEC has not been subsequently
reversed, suspended, or vacated.

 

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4.13.         No
Undisclosed Liabilities or Events. The Company has no liabilities or obligations other than those disclosed in the Transaction
Documents or the Company’s most recently filed SEC Documents (Form 10-K or 10-Q) or those incurred in the ordinary course
of the Company’s business since the Last Audited Date, or which individually or in the aggregate, do not or would not have
a Material Adverse Effect. No event or circumstance has occurred or exists with respect to the Company or its properties, business,
operations, condition (financial or otherwise), or results of operations, which, under applicable laws, rules or regulations, requires
public disclosure or announcement prior to the date hereof by the Company, but which has not been so publicly announced or disclosed.
There are no proposals currently under consideration or currently anticipated to be under consideration by the Board of Directors
or the executive officers of the Company which proposal would (a) change the Certificate of Incorporation or bylaws of the Company,
each as currently in effect, with or without stockholder approval, which change would reduce or otherwise adversely affect the
rights and powers of the stockholders of the Common Stock, or (b) materially or substantially change the business, assets or capital
of the Company, including its interests in Subsidiaries.

 

4.14.         No
Integrated Offering. Neither the Company nor any of its Affiliates nor any Person acting on its or their behalf has, directly
or indirectly, made any offer or sale of any security of the Company or solicited any offer to buy any such security under circumstances
that would eliminate the availability of the exemption from registration under Regulation D in connection with the offer and sale
of the Securities as contemplated hereby.

 

4.15.         Dilution.
Each of the Company and its executive officers and directors is aware that the number of shares of Common Stock issuable upon the
execution of this Agreement, the conversion of the Note, or pursuant to the other terms of the Transaction Documents may have a
dilutive effect on the ownership interests of the other stockholders (and Persons having the right to become stockholders) of the
Company. The Company specifically acknowledges that its obligation to issue the Conversion Shares upon a conversion of the Note
is binding upon the Company and enforceable regardless of the dilution such issuance may have on the ownership interests of other
stockholders of the Company, and the Company will honor such obligation, including honoring every Conversion Notice, unless the
Company is subject to an injunction (which injunction was not sought by the Company or any of its directors or executive officers)
prohibiting the Company from doing so.

 

4.16.         Fees
to Brokers, Placement Agents and Others. With respect to any brokerage commissions, placement agent or finder’s fees
or similar payments that will or would become due and owing by the Company to any Person as a result of this Agreement or the transactions
contemplated hereby (“Broker Fees”), any such Broker Fees will be made in full compliance with all applicable
laws and regulations and only to a Person that is a registered investment adviser or registered broker-dealer. The Buyer shall
have no obligation with respect to any such Broker Fees or with respect to any claims made by or on behalf of other Persons for
fees of a type contemplated in this subsection that may be due in connection with the transactions contemplated hereby. The Company
shall indemnify and hold harmless each of the Buyer, the Buyer’s employees, officers, directors, stockholders, managers,
agents, and partners, and their respective Affiliates, from and against all claims, losses, damages, costs (including the costs
of preparation and attorneys’ fees) and expenses suffered in respect of any such claimed or existing fees.

 

4.17.         Disclosure.
All information relating to or concerning the Company or its Subsidiaries set forth in the Transaction Documents or in the Company’s
SEC Documents or other public filings provided by or on behalf of the Company to the Buyer is true and correct in all material
respects and the Company has not omitted to state any material fact necessary in order to make the statements made, in light of
the circumstances under which they were made, not misleading. No event or circumstance has occurred or exists with respect to the
Company or its Subsidiaries or any of their business, properties, prospects, operations or financial conditions, which under applicable
laws, rules or regulations, requires public disclosure or announcement by the Company or any such Subsidiary.

 

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4.18.         Confirmation.
The Company agrees that, if, to the knowledge of the Company, any events occur or circumstances exist prior to the payment of the
Purchase Price by the Buyer to the Company which would make any of the Company’s representations or warranties set forth
herein materially untrue or materially inaccurate as of such date, the Company shall immediately notify the Buyer in writing prior
to such date of such events or circumstances, specifying which representations or warranties are affected and the reasons therefor.

 

4.19.         Title.
The Company and the Subsidiaries, if applicable, own and have good and marketable title in fee simple absolute to, or a valid leasehold
interest in, all their respective real properties and good title to their other respective assets and properties, subject to no
liens, claims or encumbrances, except as have been disclosed to the Buyer.

 

4.20.         Intellectual
Property.

 

(a)          Ownership.
The Company owns or possesses or can obtain on commercially reasonable terms sufficient legal rights to all patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses (software or otherwise), information, know-how, inventions, discoveries,
published and unpublished works of authorship, processes and any and all other proprietary rights (“Intellectual Property”)
necessary to the business of the Company as presently conducted, the lack of which could reasonably be expected to have a Material
Adverse Effect. Except for agreements with its own employees or consultants, standard end-user license agreements, support/maintenance
agreements and agreements entered in the ordinary course of the Company’s business, all of which have been made available
for review by the Buyer, there are no outstanding options, licenses or agreements relating to the Intellectual Property of the
Company, and the Company is not bound by or a party to any options, licenses or agreements with respect to the Intellectual Property
of any other person or entity. The Company has not received any written communication alleging that the Company has violated or,
by conducting its business as currently conducted, would violate any of the Intellectual Property of any other person or entity,
nor is the Company aware of any basis therefor. The Company is not obligated to make any payments by way of royalties, fees or
otherwise to any owner or licensor of or claimant to any Intellectual Property with respect to the use thereof in connection with
the present conduct of its business other than in the ordinary course of its business. There are no agreements, understandings,
instruments, contracts, judgments, orders or decrees to which the Company is a party or by which it is bound which involve indemnification
by the Company with respect to infringements of Intellectual Property, other than in the ordinary course of its business.

 

(b)          No
Breach by Employees. The Company is not aware that any of its employees is obligated under any contract or other agreement,
or subject to any judgment, decree or order of any court or administrative agency, that would materially interfere with the use
of his or her efforts to promote the interests of the Company or that would conflict with the Company’s business as presently
conducted. Neither the execution nor delivery of this Agreement, nor the carrying on of the Company’s business by the employees
of the Company, nor the conduct of the Company’s business as presently conducted, will, to the Company’s knowledge,
conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant
or instrument under which any such employee is now obligated. The Company does not believe it is or will be necessary to use any
inventions of any of its employees made prior to their employment by the Company of which it is aware.

 

    	10

    	 

    

 

4.21.         Environmental
Matters.

 

(a)          No
Violation. There are, to the Company’s knowledge, with respect to the Company or any of its Subsidiaries or any predecessor
of the Company, no past or present violations of Environmental Laws (as defined below), releases of any material into the environment,
actions, activities, circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common
law environmental liability or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of
1980 or similar federal, state, local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice
with respect to any of the foregoing, nor is any action pending or, to the Company’s knowledge, threatened in connection
with any of the foregoing. The term “Environmental Laws” means all federal, state, local or foreign laws relating
to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”)
into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

 

(b)          No
Hazardous Materials. Other than those that are or were stored, used or disposed of in compliance with applicable law, no Hazardous
Materials are contained on or about any real property currently owned, leased or used by the Company or any of its Subsidiaries,
and no Hazardous Materials were released on or about any real property previously owned, leased or used by the Company or any of
its Subsidiaries during the period the property was owned, leased or used by the Company or any of its Subsidiaries, except in
the normal course of the Company’s or any of its Subsidiaries’ business.

 

(c)          No
Storage Tanks. There are no underground storage tanks on or under any real property owned, leased or used by the Company or
any of its Subsidiaries that are not in compliance with applicable law.

 

5.          CERTAIN
COVENANTS AND ACKNOWLEDGMENTS.

 

5.1.          Covenants
and Acknowledgements of the Buyer.

 

(a)          Transfer
Restrictions. The Buyer acknowledges that (i) the Securities have not been and are not being registered under the provisions
of the 1933 Act and may not be transferred unless (A) subsequently registered thereunder, or (B) the Buyer shall have delivered
to the Company an opinion of counsel, reasonably satisfactory in form, scope and substance to the Company, to the effect that the
Securities to be sold or transferred may be sold or transferred pursuant to an exemption from registration under the 1933 Act;
(ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of such Rule and further,
if such Rule is not applicable, any resale of such Securities under circumstances in which the seller, or the Person through whom
the sale is made, may be deemed to be an underwriter, as that term is used in the 1933 Act, may require compliance with some other
exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) except as otherwise provided herein,
neither the Company nor any other Person is under any obligation to register the Securities under the 1933 Act or to comply with
the terms and conditions of any exemption thereunder.

 

(b)          Restrictive
Legend. The Buyer acknowledges and agrees that, until such time as the relevant Securities have been registered under the 1933
Act, and may be sold in accordance with an effective Registration Statement, or until such Securities can otherwise be sold without
restriction, whichever is earlier, the certificates and other instruments representing any of the Securities shall bear a restrictive
legend in substantially the following form (and a stop-transfer order may be placed against transfer of any such Securities):

 

    	11

    	 

    

 

THESE SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE
CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED, OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

 

5.2.          Covenants,
Acknowledgements and Agreements of the Company. As a condition to the Buyer’s obligation to purchase the Securities contemplated
by this Agreement, and as a material inducement for the Buyer to enter into this Agreement and the other Transaction Documents,
until all of the Company’s obligations hereunder and the Note are paid and performed in full, or within the timeframes otherwise
specifically set forth below, the Company shall comply with the following covenants:

 

(a)          Filings.
From the date hereof until the date that is six (6) months after all the Conversion Shares either have been sold by the Buyer,
or may permanently be sold by the Buyer without any restrictions pursuant to Rule 144 (the “Registration Period”),
the Company shall timely make all filings required to be made by it under the 1933 Act, the 1934 Act, Rule 144 or any United States
state securities laws and regulations thereof applicable to the Company or by the rules and regulations of the Principal Trading
Market, and such filings shall conform to the requirements of applicable laws, regulations and government agencies, and, unless
such filings are publicly available on the SEC’s EDGAR system (via the SEC’s web site at no additional charge), the
Company shall provide a copy thereof to the Buyer promptly after such filings. Without limiting the foregoing, the Company agrees
to file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof to the Buyer promptly
after such filing. Additionally, within four (4) Trading Days following the date of this Agreement, the Company shall file a Current
Report on Form 8-K describing the terms of the transactions contemplated by the Transaction Documents in the form required by the
1934 Act and approved by the Buyer and attaching the material Transaction Documents as exhibits to such filing. Additionally, the
Company shall furnish to the Buyer, so long as the Buyer owns any Securities, promptly upon request, but no more than four times
per year, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, the 1933 Act
and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the Company, unless such filings are publicly available
on the SEC’s EDGAR system (via the SEC’s web site at no additional charge, and (iii) such other information as may
be reasonably requested to permit the Buyer to sell such Securities pursuant to Rule 144 without registration.

 

(b)          Reporting
Status. So long as the Buyer beneficially owns Securities and for at least twenty (20) Trading Days thereafter, the Company
shall file all reports required to be filed with the SEC pursuant to Sections 13 or 15(d) of the 1934 Act, and shall take
all reasonable action under its control to ensure that adequate current public information with respect to the Company, as required
in accordance with Rule 144, is publicly available, and shall not terminate its status as an issuer required to file reports under
the 1934 Act even if the 1934 Act or the rules and regulations thereunder would permit such termination.

 

    	12

    	 

    

 

(c)          Listing.
The Common Stock shall be listed or quoted for trading on any of (i) the NYSE Amex, (ii) the New York Stock Exchange, (iii) the
Nasdaq Global Market, (iv) the Nasdaq Capital Market, (v) the OTC Bulletin Board, (vi) the OTCQX or (vii) the OTCQB. The Company
shall promptly secure the listing or eligibility for quotation of all of the Conversion Shares upon each national securities exchange
and automated quotation system, if any, upon which the Common Stock is then listed (subject to official notice of issuance) and
shall maintain such listing of all securities from time to time issuable under the terms of the Transaction Documents. The Company
shall comply in all material respects with the Company’s reporting, filing and other obligations under the bylaws or rules
of the Principal Trading Market and/or the Financial Industry Regulatory Authority, Inc. (“FINRA”) or any successor
thereto, as the case may be, applicable to it at least through the date which is sixty (60) calendar days after the date on which
the Note has been converted or paid in full.

 

(d)          Anti-Dilution
Certification. For so long as any portion of the Note remains outstanding, the Company shall deliver to the Buyer, within two
(2) Trading Days of a written request by the Buyer, a certificate in the form attached hereto as ANNEX VI (“Anti-Dilution
Certificate”) whereby the Company shall notify the Buyer of a Dilutive Issuance (as defined in the Note) or any other
event(s) that occurred since the later of the Closing Date or the delivery of the most recent Anti-Dilution Certificate that triggers
anti-dilution protection or other adjustments to the applicable Conversion Price (each an “Anti-Dilution Event”),
or, if no Anti-Dilution Event occurred, certifying to the Buyer that no Anti-Dilution Event occurred since the Closing Date that
has not been disclosed on a previous Anti-Dilution Certificate.

 

(e)          Use
of Proceeds. The Company shall use the net proceeds received hereunder for working capital and general corporate purposes only.
The Company shall not use such proceeds to pay (i) any Broker Fees that are not in compliance with Section 4.16, or (ii) any fees
to any other party relating to any financing transaction effected prior to the Closing Date.

 

(f)          FINRA
Rule 5110. In the event that the Corporate Financing Rule 5110 of FINRA is or becomes applicable to the transactions contemplated
by the Transaction Documents or to the sale by a Holder of any of the Securities, then the Company shall, to the extent required
by such rule, timely make any filings and cooperate with any broker or selling stockholder in respect of any consents, authorizations
or approvals that may be necessary for FINRA to timely and expeditiously permit the Holder to sell the Securities.

 

(g)          Keeping
of Records and Books of Account. The Company shall keep and cause each Subsidiary to keep adequate records and books of account,
in which complete entries shall be made in accordance with GAAP consistently applied, reflecting all financial transactions of
the Company and such Subsidiaries, and in which, for each fiscal year, all proper reserves for depreciation, depletion, obsolescence,
amortization, taxes, bad debts and other purposes in connection with its business shall be made.

 

(h)          Corporate
Existence. The Company shall (i) do all things necessary to remain duly qualified and in good standing in each jurisdiction
in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification
necessary; (ii) preserve and keep in full force and effect all licenses or similar qualifications required by it to engage in its
business in all jurisdictions in which it is at the time so engaged; (iii) continue to engage in business of the same general type
as conducted as of the date hereof; and (iv) continue to conduct its business substantially as now conducted or as otherwise permitted
hereunder.

 

(i)          Taxes.
The Company shall pay and discharge promptly when due all taxes, assessments and governmental charges or levies imposed upon it
or upon its income or profits or in respect of its property before the same shall become delinquent or in default, which, if unpaid,
might reasonably be expected to give rise to liens or charges upon such properties or any part thereof, unless, in each case, the
validity or amount thereof is being contested in good faith by appropriate proceedings and the Company has maintained adequate
reserves with respect thereto in accordance with GAAP.

 

    	13

    	 

    

 

(j)          Compliance.
The Company shall comply in all material respects with all federal, state and local laws and regulations, orders, judgments, decrees,
injunctions, rules, regulations, permits, licenses, authorizations and requirements (collectively, “Requirements”)
of all governmental bodies, insurers, departments, commissions, boards, courts, authorities, officials or officers which are applicable
to the Company, its business, operations, or any of its properties, except where the failure to so comply would not have a Material
Adverse Effect; provided, however, that nothing provided herein shall prevent the Company from contesting in good faith
the validity or the application of any Requirements.

 

(k)          Litigation.
From and after the date hereof and until all of the Company’s obligations hereunder and the Note are paid and performed in
full, the Company shall notify the Buyer in writing, promptly upon learning thereof, of any litigation or administrative proceeding
commenced or threatened against the Company involving a claim in excess of $100,000.00.

 

(l)          Performance
of Obligations. The Company shall promptly and in a timely fashion perform and honor all demands, notices, requests and obligations
that exist or may arise under the Transaction Documents.

 

(m)          Timely
Filings. The Company shall timely file on the SEC’s EDGAR system any information required to be filed by it, whether
on a Form 10-K, Form 10-Q, Form 8-K, Proxy Statement or otherwise so as to be deemed a “reporting issuer” with
current public information under the 1934 Act.

 

(n)          Share
Reserve. In order to allow for, as of the relevant date of determination, the conversion of the entire Outstanding Balance
into Common Stock, the Company shall take all action necessary from time to time to reserve for the benefit of the Holder the number
of authorized, but unissued shares of Common Stock equal to the amount calculated as follows (such calculated amount is referred
to as the “Share Reserve”): 250% of the higher of (A) the Outstanding Balance divided by the Conversion Price,
and (B) the Outstanding Balance divided by the Market Price. If at any time the Share Reserve is less than required herein, the
Company shall immediately increase the Share Reserve in an amount equal to no less than the deficiency. If the Company does not
have sufficient authorized and unissued shares of Common Stock available to increase the Share Reserve, the Company shall either
cause stockholders holding a sufficient number of shares of common stock to effectuate such action by signing a majority written
consent of stockholders or call a special meeting of the stockholders as soon as practicable after such occurrence, but in no event
later than thirty (30) calendar days after such occurrence, and hold such meeting as soon as practicable thereafter, but in no
event later than sixty (60) calendar days after such occurrence, for the sole purpose of increasing the number of authorized shares
of Common Stock. In the case of a meeting of stockholders, the Company’s management shall recommend to the Company’s
stockholders to vote in favor of increasing the number of authorized shares of Common Stock and management shall also vote all
of its shares in favor of increasing the number of authorized shares of Common Stock. The Company shall use its best efforts to
cause such additional shares of Common Stock to be authorized so as to comply with the requirements of this subsection. All calculations
with respect to determining the Share Reserve shall be made without regard to any limitations on conversion of the Note.

 

(o)          DWAC
Eligibility. At all times during which any portion of the Note remains outstanding, the Company shall cause all DWAC Eligible
Conditions to be satisfied.

 

    	14

    	 

    

 

(p)          Change
in Nature of Business. The Company shall not directly or indirectly engage in any material line of business substantially different
from those lines of business conducted by or publicly contemplated to be conducted by the Company on the date of this Agreement
or any business substantially related or incidental thereto. The Company shall not, and the Company shall cause each of its Subsidiaries
to not, directly or indirectly, modify its or their corporate structure or purpose if such modification may have a material adverse
effect on any rights of, or benefits to, the Holder under any of the Transaction Documents.

 

(q)          Maintenance
of Properties, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all
of its properties which are necessary or useful in the proper conduct of its business, in good working order and condition, ordinary
wear and tear excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions of all leases
to which it is a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder.

 

(r)          Maintenance
of Insurance. The Company shall maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations (including, without limitation, comprehensive general liability, hazard, rent and business
interruption insurance) with respect to its properties (including all real properties leased or owned by it) and business, in such
amounts and covering such risks as is required by any governmental authority having jurisdiction with respect thereto or as is
carried generally in accordance with sound business practice by companies in similar businesses similarly situated.

 

(s)          Restriction
on Redemption. The Company shall not, directly or indirectly, redeem or repurchase its capital stock without the prior express
written consent of the Holder.

 

(t)          Restriction
on Transfer of Assets. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
sell, lease, license, assign, transfer, convey or otherwise dispose of any assets or rights of the Company or any Subsidiary owned
or hereafter acquired, whether in a single transaction or a series of related transactions, other than (i) sales, leases, licenses,
assignments, transfers, conveyances and other dispositions of such assets or rights supported by fair market value consideration
as determined in the reasonable discretion of the board of directors or the Chief Executive Officer of the Company or its Subsidiary,
as the case may be, or (ii) sales of inventory in the ordinary course of business.

 

(u)          Intellectual
Property. The Company shall not, and the Company shall not permit any of its Subsidiaries, directly or indirectly, to encumber
or allow any Liens on, any of its copyright rights, copyright applications, copyright registrations and like protections in each
work of authorship and derivative work, whether published or unpublished, any patents, patent applications and like protections,
including improvements, divisions, continuations, renewals, reissues, extensions, and continuations-in-part of the same, trademarks,
service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, and the
goodwill of the business of the Company and its Subsidiaries connected with and symbolized thereby, know-how, operating manuals,
trade secret rights, rights to unpatented inventions, and any claims for damage by way of any past, present, or future infringement
of any of the foregoing, other than Permitted Liens.

 

(v)         Certain
Negative Covenants of the Company. From and after the date hereof and until all of the Company’s obligations hereunder
and the Note are paid and performed in full, the Company shall not enter into any transaction, including, without limitation, any
purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate of the Company, or amend or modify
any agreement related to any of the foregoing, except on terms that are no less favorable, in any material respect, than those
obtainable from any person or entity who is not an Affiliate of the Company.

 

    	15

    	 

    

 

(w)          Rule
144 Opinion. Either counsel to the Company has delivered to the Buyer an opinion letter, or the Company shall accept, in its
reasonable discretion, an opinion letter prepared by legal counsel of Buyer’s choosing (in either case, the “Opinion
Letter”), stating that (i) the Company is not then a shell company or the type of “issuer” defined in Rule
144(i)(1) under the 1933 Act (a “Shell Company”). The Company shall give instructions to its Transfer Agent
to issue shares of Common Stock upon conversion of the Note based upon or otherwise consistent with such Opinion Letter.

 

(x)          Transfer
Agent Reserve. From and after the date hereof and until all of the Company’s obligations hereunder and the Note are paid
and performed in full:

 

(i)          the
Company shall at all times require its Transfer Agent to establish a reserve of shares of authorized, but unissued Common Stock
in an amount not less than the Share Reserve or such other amount as the Holder may authorize from time to time in writing (the
“Transfer Agent Reserve”);

 

(ii)         the
Company shall require its Transfer Agent to hold the Transfer Agent Reserve for the exclusive benefit of the Holder and shall authorize
the Transfer Agent to issue the shares of Common Stock held in the Transfer Agent Reserve to the Holder only (subject to subsection
(iii) immediately below);

 

(iii)        the
Company shall cause the Transfer Agent to agree that when the Transfer Agent issues shares of Common Stock to the Holder pursuant
to the Transaction Documents, the Transfer Agent will not issue such shares from the Transfer Agent Reserve, unless such issuance
is pre-approved in writing by the Holder;

 

(iv)        the
Company shall cause the Transfer Agent to agree that it will not reduce the Transfer Agent Reserve under any circumstances, unless
such reduction is pre-approved in writing by the Holder;

 

(v)         upon
Holder’s written request, but no less frequently than at the end of each calendar quarter, the Company shall increase (or
decrease if authorized by Holder in writing) the Transfer Agent Reserve as of such time to equal the Share Reserve (each a “Transfer
Agent Reserve Calculation”), and if additional shares of Common Stock are required to be added to the Transfer Agent
Reserve pursuant to subsection (i) above, the Company shall immediately give written instructions to the Transfer Agent to cause
the Transfer Agent to set aside and increase the Transfer Agent Reserve by the necessary number of shares in increments of 100,000
shares of Common Stock; and

 

(vi)        within
three (3) Trading Days of a written request from the Buyer, the Company shall certify in writing to the Holder (A) the correctness
of the Company’s Transfer Agent Reserve Calculation and (B) that either (1) the Company has instructed the Transfer Agent
to increase the Transfer Agent Reserve in accordance with the terms hereof, or (2) there was no need to increase the Transfer Agent
Reserve, in either case consistent with the Transfer Agent Reserve Calculation. If the Company has not instructed the Transfer
Agent to so increase the Transfer Agent Reserve, then Holder is hereby authorized to send such written request to the Transfer
Agent.

 

    	16

    	 

    

 

For the avoidance of
any doubt, the requirements of this Section 5.2 are material to this Agreement and any violation or breach thereof by the Company
shall constitute a default under this Agreement.

 

6.          TRANSFER
AGENT.

 

6.1.          Instructions.
The Company covenants that, with respect to the Securities, other than the stop transfer instructions to give effect to Section 5.1(a)
hereof, the Company will give the Transfer Agent no instructions inconsistent with the Transfer Agent Letter. Except as required
by Sections 5.1(a) and 5.1(b) of this Agreement and the Transfer Agent Letter, the Shares shall otherwise be freely transferable
on the books and records of the Company as and to the extent provided in this Agreement and the other Transaction Documents. Nothing
in this subsection shall affect in any way the Buyer’s obligations and agreement to comply with all applicable securities
laws upon resale of the Securities. If the Buyer provides the Company with an opinion of counsel reasonably satisfactory to the
Company that registration of a resale by the Buyer of any of the Securities in accordance with clause (i)(B) of Section 5.1(a)
of this Agreement is not required under the 1933 Act or upon request from a Holder while an applicable Registration Statement is
effective, the Company shall (except as provided in clause (ii) of Section 5.1(a) of this Agreement) permit the transfer of the
Securities and, in the case of the Conversion Shares, use its best efforts to cause the Transfer Agent to promptly deliver to the
Holder or the Holder’s broker, as applicable, such Conversion Shares by way of the DWAC system.

 

6.2.          DWAC
Eligible. The Company specifically covenants that, as of April 28, 2014 and at all times thereafter until the Note is repaid
in full, all DWAC Eligible Conditions will be satisfied. The Company shall notify the Buyer in writing if the Company at any time
while the Holder holds Securities becomes aware of any plans of the Transfer Agent to voluntarily or involuntarily terminate its
participation in the DTC/FAST Program. While Holder holds Securities, the Company shall at all times after the Closing Date maintain
a transfer agent which participates in the DTC/FAST Program, and the Company shall not appoint any transfer agent which does not
participate in the DTC/FAST Program. Nevertheless, if at any time the Company receives a Conversion Notice and all DWAC Eligible
Conditions are not then satisfied (including without limitation because the Transfer Agent is not then participating in the DTC/FAST
Program or the Conversion Shares are not otherwise transferable via the DWAC system), then the Company shall instruct the Transfer
Agent to immediately issue one or more certificates for Common Stock without legend in such name and in such denominations as specified
by the Holder and consistent with the terms and conditions of the Transaction Documents.

 

6.3.          Transfer
Fees. The Company shall assume any fees or charges of the Transfer Agent or Company Counsel regarding (a) the removal of a
legend or stop transfer instructions with respect to the Securities, and (b) the issuance of certificates or DWAC registration
to or in the name of the Holder or the Holder’s designee or to a transferee as contemplated by an effective Registration
Statement.

 

7.          DELIVERY
OF SHARES.

 

7.1.          [RESERVED].

 

7.2.          Bankruptcy.
The Holder of the Note shall be entitled to exercise the Holder’s conversion privilege with respect to such Note, notwithstanding
the commencement of any case under 11 U.S.C. §101 et seq. (the “Bankruptcy Code”). In the event the Company
is a debtor under the Bankruptcy Code, 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 such Holder’s exercise privileges. 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 Note. The Company
agrees, without cost or expense to such Holder, to take or to consent to any and all action necessary to effectuate relief under
11 U.S.C. §362.

 

    	17

    	 

    

 

8.          CLOSING
DATE.

 

8.1.          The
Closing Date shall occur on the date which is the first Trading Day after each of the conditions contemplated by Sections 9
and 10 hereof shall have either been satisfied or been waived by the party in whose favor such conditions run.

 

8.2.          Closing
of the purchase and sale of the Securities, which the parties anticipate shall occur concurrently with the execution of this Agreement,
shall occur at the offices of the Buyer and shall take place no later than 3:00 P.M., Eastern Time, or on such day or such other
time as is mutually agreed upon by the Company and the Buyer.

 

9.          CONDITIONS
TO THE COMPANY’S OBLIGATION TO SELL. The Company’s obligation to sell the Securities to the Buyer pursuant to this
Agreement on the Closing Date is conditioned upon and subject to the fulfillment, on or prior to the Closing Date, of all of the
following conditions, any of which may be waived in whole or in part by the Company:

 

9.1.          The
execution and delivery of this Agreement and, as applicable, the other Transaction Documents by the Buyer.

 

9.2.          Delivery
by the Buyer of good funds as payment in full of an amount equal to the Purchase Price in accordance with this Agreement.

 

9.3.          The
accuracy on the Closing Date of the representations and warranties of the Buyer contained in this Agreement, each as if made on
such date, and the performance by the Buyer on or before such date of all covenants and agreements of the Buyer required to be
performed on or before such date.

 

9.4.          There
shall not be in effect any law, rule or regulation prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained.

 

10.         CONDITIONS
TO THE BUYER’S OBLIGATION TO PURCHASE. The Buyer’s obligation to purchase the Securities from the Company pursuant
to this Agreement on the Closing Date is conditioned upon and subject to the fulfillment, on or prior to the Closing Date, of all
of the following conditions, any of which may be waived in whole or in part by the Buyer:

 

10.1.          The
execution and delivery of this Agreement, the Transfer Agent Letter, the Secretary’s Certificate, the Share Issuance Resolution,
and, as applicable, the other Transaction Documents by the Company.

 

10.2.          The
delivery by the Company to the Buyer of the Note in original form, duly executed by the Company, in accordance with this Agreement.

 

10.3.          On
the Closing Date, each of the Transaction Documents executed by the Company on or before such date shall be in full force and effect
and the Company shall not be in default thereunder.

 

10.4.          The
Company shall have authorized and reserved for the purpose of issuance under the Transaction Documents shares of Common Stock in
an amount no less than the Share Reserve as of the Closing Date.

 

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10.5.          The
accuracy in all material respects on the Closing Date of the representations and warranties of the Company contained in this Agreement
and the other Transaction Documents, each as if made on such date, and the performance by the Company on or before such date of
all covenants and agreements of the Company required to be performed on or before such date.

 

10.6.          There
shall not be in effect any law, rule or regulation prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained.

 

10.7.          From
and after the date hereof up to and including the Closing Date, each of the following conditions will remain in effect: (a) the
trading of the Common Stock shall not have been suspended by the SEC or on the Principal Trading Market; (b) trading in securities
generally on the Principal Trading Market shall not have been suspended or limited; (c) no minimum prices shall have been established
for securities traded on the Principal Trading Market; (d) there shall not have been any material adverse change in any financial
market; and (e) there shall not have occurred any Material Adverse Effect.

 

10.8.          Except
for any notices required or permitted to be filed after the Closing Date with certain federal and state securities commissions,
the Company shall have obtained (a) all governmental approvals required in connection with the lawful sale and issuance of the
Securities, and (b) all third party approvals required to be obtained by the Company in connection with the execution and delivery
of the Transaction Documents by the Company or the performance of the Company’s obligations thereunder.

 

10.9.          All
corporate and other proceedings in connection with the transactions contemplated at the Closing and all documents and instruments
incident to such transactions shall be reasonably satisfactory in substance and form to the Buyer.

 

11.         INDEMNIFICATION.

 

11.1.          The
Company agrees to defend, indemnify and forever hold harmless the Buyer and the Buyer’s stockholders, directors, officers,
managers, members, partners, Affiliates, employees, attorneys, and agents, and each Buyer Control Person (collectively, the “Buyer
Parties”) from and against any losses, claims, damages, liabilities or expenses incurred (collectively, “Damages”),
joint or several, and any action in respect thereof to which the Buyer or any of the other Buyer Parties becomes subject, resulting
from, arising out of or relating to any misrepresentation, breach of warranty or nonfulfillment of or failure to perform any covenant
or agreement on the part of the Company contained in this Agreement or any of the other Transaction Documents, as such Damages
are incurred. The Buyer Parties with the right to be indemnified under this subsection (the “Indemnified Parties”)
shall have the right to defend any such action or proceeding with attorneys of their own selection, subject to approval thereof
by the Company, such approval not to be unreasonably withheld, and the Company shall be solely responsible for all reasonable costs
and expenses related thereto. If the Indemnified Parties opt not to retain their own counsel, the Company shall defend any such
action or proceeding with attorneys of its choosing at its sole cost and expense, provided that such attorneys have been pre-approved
by the Indemnified Parties, which approval shall not be unreasonably withheld, and provided further that the Company may not settle
any such action or proceeding without first obtaining the written consent of the Indemnified Parties.

 

11.2.          The
indemnity contained in this Agreement shall be in addition to (a) any cause of action or similar rights of the Buyer Parties against
the Company or others, and (b) any other liabilities the Company may be subject to.

 

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12.         OWNERSHIP
LIMITATION. Notwithstanding anything to the contrary contained in this Agreement or the other Transaction Documents, if at
any time the Holder shall or would be issued shares of Common Stock under any of the Transaction Documents, but such issuance would
cause the Holder (together with its Affiliates) to beneficially own a number of shares exceeding the Maximum Percentage (as defined
in the Note), then the Company must not issue to the Holder the excess Ownership Limitation Shares (as defined in the Note). For
purposes of this Section, beneficial ownership of Common Stock will be determined under the 1934 Act. The Company will reserve
the Ownership Limitation Shares for the exclusive benefit of the Holder. From time to time, the Holder may notify the Company in
writing of the number of Ownership Limitation Shares that may be issued to the Holder without causing the Holder to exceed the
Maximum Percentage. Upon receipt of such notice, the Company shall be unconditionally obligated to immediately issue such designated
shares to the Holder, with a corresponding reduction in the number of the Ownership Limitation Shares. By written notice to the
Company, the Holder may increase, decrease or waive the Maximum Percentage as to itself but any such waiver will not be effective
until the 61st day after delivery thereof. The foregoing 61-day notice requirement is enforceable, unconditional and non-waivable
and shall apply to all Affiliates and assigns of the Holder. Additionally, if at any time after the Closing the Market Capitalization
of the Common Stock (as defined in the Note) falls below $5,000,000, then from that point on, for so long as the Holder or the
Holder’s Affiliate owns Common Stock or rights to acquire Common Stock, the Company shall post (or cause to be posted), no
less frequently than every thirty (30) calendar days, the then-current number of issued and outstanding shares of its capital stock
to the Company’s web page located at OTCmarkets.com (or such other web page approved by the Holder). Additionally, within
three (3) Trading Days of a written request from Buyer, the Company (or the Company’s Transfer Agent) will provide the Buyer
the then-current number of authorized, but unissued and unreserved shares of its capital stock. The Company understands that its
failure to so post its shares outstanding or to provide the number of unissued and unreserved shares could result in economic loss
to the Holder.

 

13.         [RESERVED].

 

14.         BUYER’S
RIGHT OF FIRST REFUSAL TO NEW ISSUANCES. From and after the date hereof and until all of the Company’s obligations hereunder
and the Note are paid and performed in full(or unless all of the Company’s obligations hereunder and the Note are paid and
performed in full simultaneously therewith with the proceeds of a Variable Security Issuance), the Company shall not enter into
any Variable Security Issuance, without first offering the Buyer a right of first refusal with respect to the same pursuant to
this Section 14. For purposes of this Agreement, the term “Variable Security Issuance” means any transaction
that involves issuing Company securities (including, without limitation, debt, warrants, or convertible preferred stock) that are
convertible by the holder into, or exercisable by the holder for, Common Stock at a conversion or exercise price that varies with
the market price of the Common Stock, unless there is a floor on such conversion or exercise price, in which case such transaction
shall not be deemed to be a Variable Security Issuance.

 

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14.1.          Notice
of Proposed Issuance. Prior to the Company undertaking or effectuating any Variable Security Issuance, the Company shall deliver
to the Buyer a written notice (the “ROFR Issuance Notice”) stating: (a) the Company’s bona fide
desire to undertake or effectuate the Variable Security Issuance; (b) the name, address and phone number of each proposed creditor,
recipient, purchaser or other transferee (“Proposed Transferee”); (c) details regarding the Company securities
to be issued, sold or otherwise transferred (including the aggregate number of shares of Common Stock proposed to be issued to
each Proposed Transferee, as applicable) (the “Offered Securities”); (d) the bona fide cash price or, in reasonable
detail, other consideration for which the Company proposes to issue, sell or otherwise transfer the Offered Securities (the “Offered
Price”); and (e) notice of the Buyer’s right to exercise its Right of First Refusal (defined below) with respect
to the Offered Securities. The Buyer shall have a period of fifteen (15) Trading Days (the “Response Period”)
after the date on which the ROFR Issuance Notice is, pursuant to this subsection, deemed to have been delivered to the Buyer, to
notify the Company whether the Buyer elects to exercise its Right of First Refusal with respect to the applicable Offered Securities.
If the Buyer fails to notify the Company of its desire to exercise its Right of First Refusal with respect to the applicable Offered
Securities prior to the conclusion of the Response Period, the Buyer shall be deemed not to have exercised its Right of First Refusal
in such specific circumstance. If the Buyer elects not to exercise its Right of First Refusal or is deemed to have elected to not
exercise its Right of First Refusal, the Company and the proposed parties shall have a period of sixty (60) calendar days to consummate
the proposed Variable Security Issuance on the terms set forth in the ROFR Issuance Notice. In such case, if the Right of Frist
Refusal Issuance is not consummated within such period or if the terms of the applicable Variable Security Issuance are changed
prior to the consummation of the Variable Security Issuance, the Company shall again submit the Variable Security Issuance to the
Buyer so that Buyer may once again exercise its Right of First Refusal in accordance with the terms of this Section 14 prior to
effectuating such Variable Security Issuance. Nothing in this or any other section of this Agreement shall modify or limit Buyer’s
consent right set forth in Section 12 above.

 

14.2.          Exercising
the Right of First Refusal. The Buyer shall have the right to purchase all or any part of the Offered Securities on the terms
and conditions set forth in this Section 14 (the “Right of First Refusal”). In order to exercise its Rights
of First Refusal hereunder, the Buyer must deliver written notice to Company within the Response Period stating the Buyer’s
intent to exercise its right hereunder and the Offered Securities it desires to purchase pursuant to such right (“Election
to Purchase”).

 

14.3.          Purchase
Price. The purchase price for the Offered Securities to be purchased by the Buyer under its Right of First Refusal (the “Right
of First Refusal Purchase Price”) will be the Offered Price, and will be payable as set forth in Section 14 below. If
the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration will be determined
by the Buyer in its sole discretion, which determination will be binding upon the Company, absent fraud or error.

 

14.4.          Closing;
Payment. Subject to compliance with applicable state and federal securities laws, the Buyer and the Company shall effect the
purchase of all or any portion of the Offered Securities, including the payment of the Right of First Refusal Purchase Price therefor,
within ten (10) Trading Days after the delivery of the Election to Purchase (the “Right of First Refusal Closing”).
Payment of the Right of First Refusal Purchase Price will be made, at the option of the Buyer in writing, (a) in cash (by cashiers
or bank certified check), (b) by wire transfer, (c) by offset of all or a portion of any outstanding indebtedness owed by the Company
to the Buyer, or (d) by any combination of the foregoing. The Buyer may elect to transfer the Right of First Refusal Purchase Price
into an escrow account pending issuance of such purchased securities. The date that the Right of First Refusal Purchase Price is
delivered to the Company, or the escrow agent, as applicable, or the date that the Buyer elects to offset the Right of First Refusal
Purchase Price by outstanding indebtedness, shall be considered the date of the Right of First Refusal Closing. To the extent the
Offered Securities purchased by the Buyer hereunder constitute shares of Common Stock, the Company shall deliver to the Buyer such
purchased Common Stock in accordance with Section 7 regarding Conversion Shares, and should the Company fail to so deliver such
shares of Common Stock at or before the Right of First Refusal Closing as required hereunder, the Company shall be subject to the
penalties for non-delivery of Common Stock set forth in Section 3.3(b) of the Note.

 

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15.         MISCELLANEOUS.

 

15.1.          Governing
Law; Venue. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Illinois for contracts
to be wholly performed in such state and without giving effect to the principles thereof regarding the conflict of laws. Each party
hereto hereby (a) consents to and expressly submits to the exclusive personal jurisdiction of any state or federal court sitting
in Cook County, Illinois in connection with any dispute or proceeding arising out of or relating to this Agreement, (b) agrees
that all claims in respect of any such dispute or proceeding may only be heard and determined in any such court, (c) expressly
submits to the venue of any such court for the purposes hereof, and (d) waives any claim of improper venue and any claim or objection
that such courts are an inconvenient forum or any other claim or objection to the bringing of any such proceeding in such jurisdictions
or to any claim that such venue of the suit, action or proceeding is improper. Each party hereto hereby irrevocably consents to
the service of process of any of the aforementioned courts in any such proceeding by the mailing of copies thereof by reputable
overnight courier (e.g., FedEx) or certified mail, postage prepaid, to such party’s address as set forth herein, such service
to become effective ten (10) calendar days after such mailing.

 

15.2.          Successors
and Assigns; Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the parties hereto. Except as otherwise expressly provided herein, no Person other than the parties hereto
and their successors and permitted assigns is intended to be a beneficiary of this Agreement.

 

15.3.          Pronouns.
All pronouns and any variations thereof in this Agreement refer to the masculine, feminine or neuter, singular or plural, as the
context may permit or require.

 

15.4.          Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together
shall constitute one instrument. The parties hereto confirm that any electronic copy of another party’s executed counterpart
of this Agreement (or such party’s signature page thereof) will be deemed to be an executed original thereof.

 

15.5.          Headings.
The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this
Agreement.

 

15.6.          Severability.
Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable
law, but if any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such provision shall be modified
to achieve the objective of the parties to the fullest extent permitted and such invalidity or unenforceability shall not affect
the validity or enforceability of the remainder of this Agreement or the validity or enforceability of this Agreement in any other
jurisdiction.

 

15.7.          Entire
Agreement. This Agreement, together with the other Transaction Documents, constitutes and contains the entire agreement and
understanding between the parties hereto, and supersedes all prior oral or written agreements and understandings between Buyer,
Company, their Affiliates and Persons acting on their behalf with respect to the matters discussed herein and therein, and, except
as specifically set forth herein or therein, neither Company nor Buyer makes any representation, warranty, covenant or undertaking
with respect to such matters.

 

15.8.          Amendment.
Any amendment, supplement or modification of or to any provision of this Agreement, shall be effective only if it is made or given
by an instrument in writing (excluding any email message) and signed by Company and Buyer.

 

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15.9.          No
Waiver. No forbearance, failure or delay on the part of a party hereto in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy. Any waiver of any provision of this Agreement shall
be effective (a) only if it is made or given in writing (including an email message) and (b) only in the specific instance and
for the specific purpose for which made or given.

 

15.10.         Currency.
All dollar amounts referred to or contemplated by this Agreement or any other Transaction Documents shall be deemed to refer to
U.S. Dollars, unless otherwise explicitly stated to the contrary.

 

15.11.         Assignment.
Notwithstanding anything to the contrary herein, the rights, interests or obligations of the Company hereunder may not be assigned,
by operation of law or otherwise, in whole or in part, by the Company without the prior written consent of the Buyer, which consent
may be withheld at the sole discretion of the Buyer. This Agreement or any of the severable rights and obligations inuring to the
benefit of or to be performed by Buyer hereunder may be assigned by Buyer to a third party, including the Buyer’s financing
sources, in whole or in part, without the need to obtain the Company’s consent thereto.

 

15.12.         Advice
of Counsel. In connection with the preparation of this Agreement and all other Transaction Documents, the Company, for itself
and on behalf of its stockholders, officers, agents, and representatives acknowledges and agrees that Buyer’s Counsel prepared
initial drafts of this Agreement and all of the other Transaction Documents and acted as legal counsel to the Buyer only. The Company,
for itself and on behalf of its stockholders, officers, agents, and representatives, (a) hereby acknowledges that he/she/it has
been, and hereby is, advised to seek legal counsel and to review this Agreement and all of the other Transaction Documents with
legal counsel of his/her/its choice, and (b) either has sought such legal counsel or hereby waives the right to do so.

 

15.13.         No
Strict Construction. The language used in this Agreement is the language chosen mutually by the parties hereto and no doctrine
of construction shall be applied for or against any party.

 

15.14.         Attorney’s
Fees. In the event of any action at law or in equity to enforce or interpret the terms of this Agreement or any of the other
Transaction Documents, the prevailing party shall be entitled to reimbursement of the full amount of the attorneys’ fees
and expenses paid by such prevailing party in connection with the litigation and/or dispute without reduction or apportionment
based upon the individual claims or defenses giving rise to the fees and expenses. Nothing herein shall restrict or impair a court’s
power to award fees and expenses for frivolous or bad faith pleading.

 

15.15.         Waiver
of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE RELATIONSHIPS OF THE PARTIES HERETO BE
TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE,
LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY’S
RIGHT TO DEMAND TRIAL BY JURY.

 

15.16.         Rights
and Remedies Cumulative. All rights, remedies, and powers conferred in this Agreement and the Transaction Documents are cumulative
and not exclusive of any other rights or remedies granted in this Agreement or any other Transaction Document, and any and all
such rights and remedies may be exercised from time to time and as often and in such order as the Buyer may deem expedient.

 

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

 

15.18.         Notices.
Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively
given on the earliest of:

 

(a)          the
date delivered, if delivered by personal delivery as against written receipt therefor or by email to an executive officer, or by
facsimile (with successful transmission confirmation),

 

(b)          the
fifth Trading Day after deposit, postage prepaid, in the United States Postal Service (with USPS tracking or by certified mail),
or

 

(c)          the
second Trading Day after mailing by domestic or international express courier (e.g., FedEx), with delivery costs and fees prepaid,

 

in each case, addressed to each of the
other parties thereunto entitled at the following addresses (or at such other addresses as such party may designate by five (5)
Trading Days’ advance written notice similarly given to each of the other parties hereto):

 

If to the Company:

 

Brazil Minerals, Inc.

Attn: Marc Fogassa

324 South Beverly Drive,
Suite 118

Beverly Hills, CA 90212

 

with a copy to (which shall not constitute
notice):

 

Jay Weil, Esq.

27 Viewpoint Road

Wayne, New Jersey 07470

 

If to the Buyer:

 

St George Investments
LLC

Attn: John M. Fife

303 East Wacker Drive,
Suite 1200

Chicago, Illinois 60601

 

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with a copy to (which
shall not constitute notice):

 

Hansen Black Anderson
Ashcraft PLLC

Attn: Jonathan K. Hansen

2940 West Maple Loop
Drive, Suite 103

Lehi, Utah 84043

Telephone: 801.922.5000

Email: jhansen@hbaalaw.com

 

15.19.         Cross
Default. Any Event of Default (as defined in the Note) shall be deemed a default under this Agreement. Upon such a default
of this Agreement by the Company, the Buyer shall have all those rights and remedies available in the Transaction Documents.

 

15.20.         Expenses.
Except as provided in Section 15.14, and except for the Transaction Expense Amount required to be paid by the Company to the Buyer
pursuant to Section 2.3, the Company and the Buyer shall be responsible for paying such party’s own fees and expenses (including
legal expenses) incurred in connection with the preparation and negotiation of this Agreement and the other Transaction Documents
and the closing of the transactions contemplated hereby and thereby.

 

15.21.         Replacement
of the Note. Subject to any restrictions on or conditions to transfer set forth in the Note, the Holder of the Note, at such
Holder’s option, may in person or by duly authorized attorney surrender the same for exchange at the Company’s principal
corporate office, and promptly thereafter and at the Company’s expense, except as provided below, receive in exchange therefor
one or more new convertible promissory note(s), each in the principal amount requested by such Holder, dated the date to which
interest shall have been paid on the Note so surrendered or, if no interest shall have yet been so paid, dated the date of the
Note so surrendered and registered in the name of such person or persons as shall have been designated in writing by such Holder
or such Holder’s attorney for the same principal amount as the then unpaid principal amount of the Note so surrendered. As
applicable, upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction
or mutilation of the Note and (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it; or (b)
in the case of mutilation, upon surrender thereof, the Company, at its expense, will execute and deliver in lieu thereof a new
convertible promissory note executed in the same manner as the Note being replaced, in the same principal amount as the unpaid
principal amount of such Note and dated the date to which interest shall have been paid on the Note or, if no interest shall have
yet been so paid, dated the date of the Note.

 

15.22.         Time
of the Essence. Time is expressly made of the essence of each and every provision of this Agreement and the other Transaction
Documents.

 

16.         SURVIVAL
OF COVENANTS, REPRESENTATIONS AND WARRANTIES. The Company’s and the Buyer’s covenants, agreements, representations
and warranties contained herein shall survive the execution and delivery of this Agreement and the other Transaction Documents
and the Closing hereunder for the maximum time allowed by applicable law, and shall inure to the benefit of the Buyer and the Company
and their respective successors and permitted assigns.

 

[Remainder of the page intentionally
left blank; signature page to follow]

 

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IN WITNESS WHEREOF,
each of the undersigned parties represents that the foregoing statements made by such party above are true and correct and that
such party has caused this Agreement to be duly executed (if an entity, on such party’s behalf by one of its officers thereunto
duly authorized) as of the date first above written.

 

	PURCHASE PRICE:	$200,000.00
	 	 
	 	BUYER:
	 	 
	 	St George Investments LLC
	 	 
	 	By: Fife Trading, Inc., its Manager
	 	 
	 	 	By:	/s/ John M. Fife
	 	 	 	John M. Fife, President

 

	 	COMPANY:
	 	 
	 	Brazil Minerals, Inc.
	 	 
	 	By:	/s/ Marc Fogassa
	 	Printed Name:	 Marc Fogassa
	 	Title:	 Chairman & CEOEXHIBIT 10.18

 

RACKWISE, INC.

 

2013 EQUITY INCENTIVE PLAN

 

1.                 
PURPOSE. The Rackwise, Inc. 2013 Equity Incentive Plan has two complementary purposes: (a) to attract and retain
outstanding individuals to serve as officers, employees, directors, consultants and advisors to the Company and its Affiliates,
and (b) to increase stockholder value. The Plan will provide participants incentives to increase stockholder value by offering
the opportunity to acquire shares of the Company’s Common Stock or receive monetary payments based on the value of such Common
Stock, on the potentially favorable terms that this Plan provides.

 

2.                 
EFFECTIVE DATE. The Plan shall become effective and Awards may be granted on and after December 18, 2013 (the
“Effective Date”), subject to approval of the Plan by the stockholders of the Company within twelve (12) months after
the Effective Date. Any Awards granted under the Plan prior to such stockholder approval shall be conditioned on such approval.

 

3.                 
DEFINITIONS. Capitalized terms used in this Plan have the following meanings:

 

(a)“Affiliate”
means any entity that, directly or through one or more intermediaries, is controlled by, controls, or is under common control with,
the Company within the meaning of Code Sections 414(b) or (c), provided that, in applying such provisions, the phrase “at
least fifty percent (50%)” shall be used in place of “at least eighty percent (80%)” each place it appears therein.

 

(b)“Award”
means a grant of Options (as defined below), Stock Appreciation Rights (as defined in Section 3(w) hereof), Performance Shares
(as defined in Section 3(p) hereof), Restricted Stock (as defined in Section 3(s) hereof), or Restricted Stock Units (as defined
in Section 3(t) hereof).

 

(c)“Bankruptcy”
shall mean (i) the filing of a voluntary petition under any bankruptcy or insolvency law, or a petition for the appointment of
a receiver or the making of an assignment for the benefit of creditors, with respect to the Participant, or (ii) the Participant
being subjected involuntarily to such a petition or assignment or to an attachment or other legal or equitable interest with respect
to the Participant’s assets, which involuntary petition or assignment or attachment is not discharged within 60 days after
its date, and (iii) the Participant being subject to a transfer of its Issued Shares by operation of law (including by divorce,
even if not insolvent), except by reason of death.

 

(d)“Board”
means the Board of Directors of the Company.

 

(e)“Change
of Control” shall be deemed to have occurred as of the first day that any one or more of the following conditions is satisfied,
including, but not limited to, the signing of documents by all parties and approval by all regulatory agencies, if required:

 

(i)The
stockholders approve a plan of complete liquidation or dissolution of the Company; or

 

(ii)The
consummation of (A) an agreement for the sale or disposition of all or substantially all of the Company’s assets (other than
to an Excluded Person (as defined below)), or (B) a merger, consolidation or reorganization of the Company with or involving any
other corporation or other legal entity, other than a merger, consolidation or reorganization that would result in the holders
of voting securities of the Company outstanding immediately prior thereto continuing to hold (either by remaining outstanding or
by being converted into voting securities of the surviving entity), at least fifty percent (50%) of the combined voting power of
the voting securities of the Company (or such other surviving entity) outstanding immediately after such merger, consolidation
or reorganization.

 

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An Excluded Person means: (i) the Company
or any of its Affiliates, (ii) a trustee or other fiduciary holding securities under any employee benefit plan of the Company or
any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities or (iv) a
corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership
of stock in the Company.

 

Notwithstanding the foregoing, with respect
to an Award that is considered deferred compensation subject to Code Section 409A, if the definition of “Change of Control”
results in the payment of such Award, then such definition shall be amended to the minimum extent necessary, if at all, so that
the definition satisfies the requirements of a change of control under Code Section 409A.

 

(f)“Code”
means the Internal Revenue Code of 1986, as amended. Any reference to a specific provision of the Code includes any successor provision
and the regulations promulgated under such provision.

 

(g)“Committee”
means the Compensation Committee of the Board (or a successor committee with similar authority) or if no such committee is named
by the Board, then it shall mean the Board.

 

(h)“Common
Stock” means the Common Stock of the Company, par value $0.0001 per share.

 

(i)“Company”
means Rackwise, Inc., a Nevada corporation, or any successor thereto.

 

(j)“Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to time. Any reference to a specific provision of the
Exchange Act shall be deemed to include any successor provision thereto.

 

(k)“Fair Market
Value” means, per Share on a particular date, the value as determined by the Committee using a reasonable valuation method
within the meaning of Code Section 409A, based on all information in the Company’s possession at such time, or if applicable,
the value as determined by an independent appraiser selected by the Board or Committee.

 

(l)“Issued
Shares” means, collectively, all outstanding Shares issued pursuant to an Award and all Option Shares.

 

(m)“Option”
means the right to purchase Shares at a stated price upon and during a specified time. “Options” may either be “incentive
stock options” which meet the requirements of Code Section 422, or “nonqualified stock options” which do not
meet the requirements of Code Section 422.

 

(n)“Option
Shares” means outstanding Shares that were issued to a Participant upon the exercise of an Option.

 

(o)“Participant”
means an officer or other employee of the Company or its Affiliates, or an individual that the Company or an Affiliate has engaged
to become an officer or employee, or a consultant or advisor who provides services to the Company or its Affiliates, including
a non-employee director of the Board, whom the Committee designates to receive an Award.

 

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(p)“Performance
Shares” means the right to receive Shares to the extent the Company, Subsidiary, Affiliate or other business unit and/or
Participant achieves certain goals that the Committee establishes over a period of time the Committee designates.

 

(q)“Permitted
Transferee” means, in connection with a transfer made for bona fide estate planning purposes, either during a Participant’s
lifetime or on death by will or intestacy, to his or her spouse, child (natural or adopted), or any other direct lineal descendant
of such Participant (or his or her spouse) (all of the foregoing collectively referred to as “family members”), or
any other relative approved unanimously by the Board of Directors of the Company, or any custodian or trustee of any trust, partnership
or limited liability company for the benefit of, or the ownership interests of which are owned wholly by, such Participant or any
such family members.

 

(r)“Plan”
means this Rackwise, Inc. 2013 Equity Incentive Plan, as amended from time to time.

 

(s)“Restricted
Stock” means Shares that are subject to a risk of forfeiture and/or restrictions on transfer (including but not limited to
stock grants with the recipient having the right to make an election under Section 83(b) of the Code), which may lapse upon the
achievement or partial achievement of performance goals during a specified period and/or upon the completion of a period of service
or upon the occurrence of other events, as determined by the Committee.

 

(t)“Restricted
Stock Unit” means the right to receive a Share, or a cash payment, the amount of which is equal to the Fair Market Value
of a Share, which is subject to a risk of forfeiture which may lapse upon the achievement or partial achievement of performance
goals during a specified period and/or upon the completion of a period of service or upon the occurrence of other events, as determined
by the Committee.

 

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

 

(v)“Share”
means a share of Common Stock.

 

(w)“Stock Appreciation
Right” or “SAR” means the right of a Participant to receive cash, and/or Shares with a Fair Market Value, equal
to the excess of the Fair Market Value of a Share over the grant price.

 

(x)“Subsidiary”
means any corporation in an unbroken chain of corporations beginning with the Company if each of the corporations (other than the
last corporation in the chain) owns stock possessing more than fifty percent (50%) of the total combined voting power of all classes
of stock in one of the other corporations in the chain.

 

(y)“10% Owner-Employee”
means an employee who, at the time an incentive stock option is granted, owns (directly or indirectly, within the meaning of Code
Section 424(d)) more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any
Subsidiary.

 

4.ADMINISTRATION.

 

(a)Committee Administration.
The Committee has full authority to administer this Plan, including the authority to (i) interpret the provisions of this Plan,
(ii) prescribe, amend and rescind rules and regulations relating to this Plan, (iii) correct any defect, supply any omission, or
reconcile any inconsistency in any Award or agreement covering an Award in the manner and to the extent it deems desirable to carry
this Plan into effect, and (iv) make all other determinations necessary or advisable for the administration of this Plan. All actions
or determinations of the Committee are made in its sole discretion and will be final and binding on any person with an interest
therein. If at any time the Committee is not in existence, the Board shall administer the Plan and references to the Committee
in the Plan shall mean the Board.

 

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(b)Delegation
to Committees or Officers. To the extent applicable law permits, the Board may delegate to another committee of the Board or
to one or more officers of the Company, or the Committee may delegate to a sub-committee, any or all of the authority and responsibility
of the Committee. If the Board or Committee has made such a delegation, then all references to the Committee in this Plan include
such committee, sub-committee or one or more officers to the extent of such delegation.

 

(c)No Liability.
No member of the Committee or the Board, and no individual or officer to whom a delegation under subsection (b) has been made,
will be liable for any act done, or determination made, by the individual in good faith with respect to the Plan or any Award.
The Company will indemnify and hold harmless such individual to the maximum extent that the law and the Company’s bylaws
permit.

 

5.DISCRETIONARY
GRANTS OF AWARDS. Subject to the terms of this Plan, the Committee has full power and authority to: (a) designate from
time to time the Participants to receive Awards under this Plan; (b) determine the type or types of Awards to be granted to each
Participant; (c) determine the number of Shares with respect to which an Award relates; and (d) determine any terms and conditions
of any Award including but not limited to permitting the delivery to the Company of Shares or the relinquishment of an appropriate
number of vested Shares under an exercisable Option in satisfaction of part of all of the exercise price of, or withholding taxes
with respect to, an Award. Awards may be granted either alone or in addition to, in tandem with, or in substitution for any other
Award (or any other award granted under another plan of the Company or any Affiliate). The Committee’s designation of a Participant
in any year will not require the Committee to designate such person to receive an Award in any other year.

 

6.SHARES
RESERVED UNDER THIS PLAN.

 

(a)Plan Reserve.
An aggregate of One Million Two Hundred Thousand (1,200,000) Shares are reserved for issuance under this Plan, all of which may
be issued as any form of Award.

 

(b)Replenishment
of Shares Under this Plan. If an Award lapses, expires, terminates or is cancelled without the issuance of Shares or payment
of cash under the Award, then the Shares subject to or reserved for in respect of such Award, or the Shares to which such Award
relates, may again be used for new Awards as determined under subsection (a), including issuance pursuant to incentive stock options.
If Shares are delivered to (or withheld by) the Company in payment of the exercise price or withholding taxes of an Award, then
such Shares may be used for new Awards under this Plan as determined under subsection (a), including issuance pursuant to incentive
stock options. If Shares are issued under any Award and the Company subsequently reacquires them pursuant to rights reserved upon
the issuance of the Shares, then such Shares may be used for new Awards under this Plan as determined under subsection (a), but
excluding issuance pursuant to incentive stock options.

 

(c)Evergreen Replenishment
of Shares. In addition, the number of Shares available for issuance under this Plan shall automatically increase on January
1st of each year for a period of nine (9) years commencing on January 1, 2014 and ending on (and including) January
1, 2023, in an amount equal to the lesser of (i) 20 percent (20%) of the total number of shares of Common Stock issued and outstanding
on the last day of the immediately preceding fiscal year, or (ii) such number of shares of Common Stock as may be established by
the Board.

 

7.OPTIONS.
Subject to the terms of this Plan, the Committee will determine all terms and conditions of each Option, including but not limited
to:

 

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(a)Whether the Option
is an incentive stock option or a nonqualified stock option; provided that in the case of an incentive stock option, if the aggregate
Fair Market Value (determined at the time of grant) of the Shares with respect to which such option and all other incentive stock
options issued under this Plan (and under all other incentive stock option plans of the Company or any Affiliate that is required
to be included under Code Section 422) are first exercisable by the Participant during any calendar year exceeds $100,000, such
Option automatically shall be treated as a nonqualified stock option to the extent this limit is exceeded. Only employees of the
Company or a Subsidiary are eligible to be granted incentive stock options;

 

(b)The number of
Shares subject to the Option;

 

(c)The exercise price
per Share, which may not be less than the Fair Market Value of a Share as determined on the date of grant; provided that an incentive
stock option granted to a 10% Owner-Employee must have an exercise price that is at least one hundred ten percent (110%) of the
Fair Market Value of a Share on the date of grant;

 

(d)The terms and
conditions of exercise, including “cashless exercise”; and

 

(e)The termination
date, except that each Option must terminate no later than the tenth (10th) anniversary of the date of grant and each incentive
stock option granted to any 10% Owner-Employee must terminate no later than the fifth (5th) anniversary of the date of grant.

 

In all other respects,
the terms of any incentive stock option should comply with the provisions of Code Section 422 except to the extent the Committee
determines otherwise.

 

8.STOCK APPRECIATION
RIGHTS. Subject to the terms of this Plan, the Committee will determine all terms and conditions of each SAR, including
but not limited to:

 

(a)The number of
Shares to which the SAR relates;

 

(b)The grant price,
provided that the grant price shall not be less than the Fair Market Value of the Shares subject to the SAR as determined on the
date of grant;

 

(c)The terms and
conditions of exercise or maturity;

 

(d)The term, provided
that a SAR must terminate no later than the tenth (10th) anniversary of the date of grant; and

 

(e)Whether the SAR
will be settled in cash, Shares or a combination thereof.

 

9.PERFORMANCE
SHARE AWARDS. Subject to the terms of this Plan, the Committee will determine all terms and conditions of each Performance
Share Award, including but not limited to:

 

(a)The number of
Shares to which the Performance Share Award relates;

 

(b)The terms and
conditions of each Award, including, without limitation, the selection of the performance goals that must be achieved for the Participant
to realize all or a portion of the benefit provided under the Award; and

 

(c)Whether all or
a portion of the Shares subject to the Award will be issued to the Participant, without regard to whether the performance goals
have been attained, in the event of the Participant’s death, disability, retirement or other circumstance.

 

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10.RESTRICTED
STOCK AND RESTRICTED STOCK UNIT AWARDS. Subject to the terms of this Plan, the Committee will determine all terms and conditions
of each award of Restricted Stock or Restricted Stock Units, including but not limited to:

 

(a)The number of
Shares or Restricted Stock Units to which such Award relates;

 

(b)The period of
time over which, and/or the criteria or conditions that must be satisfied so that, the risk of forfeiture and/or restrictions on
transfer imposed on the Restricted Stock or Restricted Stock Units will lapse;

 

(c)Whether all or
a portion of the Restricted Shares or Restricted Stock Units will be released from a right of repurchase and/or be paid to the
Participant in the event of the Participant’s death, disability, retirement or other circumstance;

 

(d)With respect to
awards of Restricted Stock, the manner of registration of certificates for such Shares, and whether to hold such Shares in escrow
pending lapse of the risk of forfeiture, right of repurchase and/or restrictions on transfer or to issue such Shares with an appropriate
legend referring to such restrictions;

 

(e)With respect to
awards of Restricted Stock, whether dividends paid with respect to such Shares will be immediately paid or held in escrow or otherwise
deferred and whether such dividends shall be subject to the same terms and conditions as the Award to which they relate; and

 

(f)With respect to
awards of Restricted Stock Units, whether to credit dividend equivalent units equal to the amount of dividends paid on a Share
and whether such dividend equivalent units shall be subject to the same terms and conditions as the Award to which they relate.

 

11.TRANSFERABILITY.
Except as set forth in Section 15 hereof, each award granted under this plan is not transferable other than by will or the laws
of descent and distribution, or to a revocable trust, or as permitted by Rule 701 of the Securities Act.

 

12.TERMINATION
AND AMENDMENT.

 

(a)Term. Subject
to the right of the Board or Committee to terminate the Plan earlier pursuant to Section 12(b), the Plan shall terminate on, and
no Awards may be granted after the tenth (10th) anniversary of the Plan’s Effective Date.

 

(b)Termination
and Amendment. The Board or Committee may amend, alter, suspend, discontinue or terminate this Plan at any time, provided that:

 

(i)the
Board must approve any amendment of this Plan to the extent the Company determines such approval is required by: (a) action of
the Board, (b) applicable corporate law, or (c) any other applicable law or rule of a self-regulatory organization;

 

(ii)stockholders
must approve any of the following Plan amendments: (a) an amendment to materially increase any number of Shares specified in Section
6(a) (except as permitted by Section 14(a)) or expand the class of individuals eligible to receive an Award to the extent required
by the Code, the Company’s bylaws or any other applicable law, (b) any other amendment if required by applicable law or the
rules of any self-regulatory organization, or (c) an amendment that would diminish the protections afforded by Section 12(e); provided,
that such stockholder approval may be obtained within 12 months of the approval of such amendment by the Board or Committee.

 

    	6

    	 

    

 

(c)Amendment,
Modification or Cancellation of Awards. Except as provided in subsection (e) and subject to the restrictions of this Plan,
the Committee may modify or amend an Award or waive any restrictions or conditions applicable to an Award (including relating to
the exercise, vesting or payment thereof), and the Committee may modify the terms and conditions applicable to any Award (including
the terms of the Plan), and the Committee may cancel any Award, provided that the Participant (or any other person as may then
have an interest in such Award as a result of the Participant’s death or the transfer of an Award) must consent in writing
if any such action would adversely affect the rights of the Participant (or other interested party) under such Award. Notwithstanding
the foregoing, the Committee need not obtain Participant (or other interested party) consent for the amendment, modification or
cancellation of an Award pursuant to the provisions of Section 14(a), or the amendment or modification of an Award to the extent
deemed necessary to comply with any applicable law, the listing requirements of any principal securities exchange or market on
which the Shares are then traded, or to preserve favorable accounting treatment of any Award for the Company.

 

(d)Survival of
Committee Authority and Awards. Notwithstanding the foregoing, the authority of the Committee to administer this Plan and modify
or amend an Award, and the authority of the Board or Committee to amend this Plan, shall extend beyond the date of this Plan’s
termination. In addition, termination of this Plan will not affect the rights of Participants with respect to Awards previously
granted to them, and all unexpired Awards will continue in full force and effect after termination of this Plan except as they
may lapse or be terminated by their own terms and conditions.

 

(e)Repricing Prohibited.
Notwithstanding anything in this Plan to the contrary, neither the Committee nor any other person may decrease the exercise price
of any Option or the grant price of any SAR nor take any action that would result in a deemed decrease of the exercise price or
grant price of an Option or SAR under Code Section 409A, after the date of grant, except in accordance with Section 1.409A-1(b)(5)(v)(D)
of the Treasury Regulations (26 C.F.R.), or in connection with a transaction which is considered the grant of a new Option or SAR
for purposes of Section 409A of the Code, provided that the new exercise price or grant price is not less than the Fair Market
Value of a Share on the new grant date.

 

(f)Foreign Participation.
To assure the viability of Awards granted to Participants employed or residing in foreign countries, the Committee may provide
for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy or custom.
Moreover, the Committee may approve such supplements to, or amendments, restatements or alternative versions of this Plan as it
determines is necessary or appropriate for such purposes. Any such amendment, restatement or alternative versions that the Committee
approves for purposes of using this Plan in a foreign country will not affect the terms of this Plan for any other country.

 

13.TAXES.

 

(a)Withholding.
In the event the Company or any Affiliate is required to withhold any foreign, federal, state or local taxes or other amounts in
respect of any income recognized by a Participant as a result of the grant, vesting, payment or settlement of an Award or disposition
of any Shares acquired under an Award, the Company may deduct (or require an Affiliate to deduct) from any payments of any kind
otherwise due the Participant cash, or with the consent of the Committee, Shares otherwise deliverable or vesting under an Award,
to satisfy such tax obligations. Alternatively, the Company may require such Participant to pay to the Company, in cash, promptly
on demand, or make other arrangements satisfactory to the Company regarding the payment to the Company of the aggregate amount
of any such taxes and other amounts required to be withheld. If Shares are deliverable upon exercise or payment of an Award, the
Committee may permit a Participant to satisfy all or a portion of the foreign, federal, state and local withholding tax obligations
arising in connection with such Award by electing to (a) have the Company withhold Shares otherwise issuable under the Award, (b)
tender back Shares received in connection with such Award, or (c) deliver other previously owned Shares; provided that the amount
to be withheld may not exceed the total minimum foreign, federal, state and local tax withholding obligations associated with the
transaction to the extent needed for the Company to avoid an accounting charge. If an election is provided, the election must be
made on or before the date as of which the amount of tax to be withheld is determined and otherwise as the Company requires. In
any case, the Company may defer making payment or delivery under any Award if any such tax may be pending unless and until indemnified
to its satisfaction.

 

    	7

    	 

    

 

(b)No Guarantee
of Tax Treatment. Notwithstanding any provisions of the Plan, the Company does not guarantee to any Participant or any other
person with an interest in an Award that any Award intended to be exempt from Code Section 409A shall be so exempt, nor that any
Award intended to comply with Code Section 409A shall so comply, nor that any Award designated as an incentive stock option within
the meaning of Code Section 422 qualifies as such, and neither the Company nor any Affiliate shall indemnify, defend or hold harmless
any individual with respect to the tax consequences of any such failure.

 

14.ADJUSTMENT
PROVISIONS; CHANGE OF CONTROL.

 

(a)Adjustment
of Shares. If (i) the Company shall at any time be involved in a merger or other transaction in which the Shares are changed
or exchanged; (ii) the Company shall subdivide or combine the Shares or the Company shall declare a dividend payable in Shares,
other securities or other property; (iii) the Company shall effect a cash dividend the amount of which, on a per Share basis, exceeds
ten percent (10%) of the Fair Market Value of a Share at the time the dividend is declared, or the Company shall effect any other
dividend or other distribution on the Shares in the form of cash, or a repurchase of Shares, that the Committee determines by resolution
is special or extraordinary in nature or that is in connection with a transaction that is a recapitalization or reorganization
involving the Shares; or (iv) any other event shall occur, which, in the case of this subsection (iv), in the judgment of the Committee
necessitates an adjustment to prevent dilution or enlargement of the benefits or potential benefits intended to be made available
under this Plan, then, in each case, the Committee shall, in such manner as it may deem equitable, adjust any or all of: (w) the
number and type of Shares subject to this Plan (including the number and type of Shares that may be issued pursuant to incentive
stock options), (x) the number and type of Shares subject to outstanding Awards, (y) the grant, purchase, or exercise price with
respect to any Award, and (z) the performance goals established under any Award.

 

(i)In any
such case, the Committee may also make provision for a cash payment, in an amount determined by the Committee, to the holder of
an outstanding Award in exchange for the cancellation of all or a portion of the Award (without the consent of the holder of an
Award), effective at such time as the Committee specifies (which may be the time such transaction or event is effective); provided
that any such adjustment to an Award that is exempt from Code Section 409A shall be made in a manner that permits the Award to
continue to be so exempt, and any adjustment to an Award that is subject to Code Section 409A shall be made in a manner that complies
with the provisions thereof. However, with respect to Awards of incentive stock options, no such adjustment may be authorized to
the extent that such authority would cause this Plan to violate Code Section 422(b). Further, the number of Shares subject to any
Award payable or denominated in Shares must always be a whole number.

 

(ii)Without
limitation, in the event of any reorganization, merger, consolidation, combination or other similar corporate transaction or event,
whether or not constituting a Change of Control, other than any such transaction in which the Company is the continuing corporation
and in which the outstanding Common Stock is not being converted into or exchanged for different securities, cash or other property,
or any combination thereof, the Committee may provide that awards, without limitation, will be assumed by the surviving corporation
or its parent, will have the vesting accelerated or will be cancelled with or without consideration, in all cases without the consent
of the Participant.

 

    	8

    	 

    

 

(iii)Notwithstanding
the foregoing, in the case of a stock dividend (other than a stock dividend declared in lieu of an ordinary cash dividend) or subdivision
or combination of the Shares (including a reverse stock split), adjustments contemplated by this subsection that are proportionate
shall nevertheless automatically be made as of the date of such stock dividend or subdivision or combination of the Shares.

 

(b)Issuance or
Assumption. Notwithstanding any other provision of this Plan, and without affecting the number of Shares otherwise reserved
or available under this Plan, in connection with any merger, consolidation, acquisition of property or stock, or reorganization,
the Committee may authorize the cancellation, with or without consideration, issuance, assumption or acceleration of vesting of
awards upon such terms and conditions as it may deem appropriate, in all cases without the consent of the Participant.

 

(c)Change of Control.
Upon a Change of Control, the Committee may, in its discretion, determine that any or all outstanding Awards held by Participants
who are then in the employ or service of the Company or any Affiliate shall vest or be deemed to have been earned in full, and:

 

(i)If the
successor or surviving corporation (or parent thereof) so agrees, all outstanding Awards shall be assumed, or replaced with the
same type of award with similar terms and conditions, by the successor or surviving corporation (or parent thereof) in the Change
of Control. If applicable, each Award which is assumed by the successor or surviving corporation (or parent thereof) shall be appropriately
adjusted, immediately after such Change of Control, to apply to the number and class of securities which would have been issuable
to the Participant upon the consummation of such Change of Control had the Award been exercised or vested immediately prior to
such Change of Control, and such other appropriate adjustments in the terms and conditions of the Award shall be made.

 

(ii)If
the provisions of paragraph (i) do not apply, then all outstanding Awards shall be cancelled as of the date of the Change of Control
and, at the option of the Committee, may be exchanged for a payment in cash and/or Shares (which may include shares or other securities
of any surviving or successor entity or the purchasing entity or any parent thereof) equal to:

 

(1)In
the case of an Option or SAR, the excess of the Fair Market Value of the Shares on the date of the Change of Control covered by
the vested portion of the Option or SAR that has not been exercised over the exercise or grant price of such Shares under the Award;

 

(2)In
the case of Restricted Stock Units, the Fair Market Value of a Share on the date of the Change of Control multiplied by the number
of vested units, unless otherwise provided in the Award agreement and subject to the repurchase right set forth in Section 15 hereof;
and

 

(3)In
the case of a Performance Share Award, the Fair Market Value of a Share on the date of the Change of Control multiplied by the
number of earned Shares.

 

(d)Parachute Payment
Limitation.

 

(i)Except
as may be set forth in a written agreement by and between the Company and the holder of an Award, in the event that the Company’s
auditors determine that any payment or transfer by the Company under the Plan to or for the benefit of a Participant (a “Payment”)
would be nondeductible by the Company for federal income tax purposes because of the provisions concerning “excess parachute
payments” in Code Section 280G, then the aggregate present value of all Payments shall be reduced (but not below zero) to
the Reduced Amount (defined herein). For purposes of this Section 14(d), the “Reduced Amount” shall be the amount,
expressed as a present value, which maximizes the aggregate present value of the Payments without causing any Payment to be nondeductible
by the Company because of Code Section 280G.

 

    	9

    	 

    

 

(ii)If
the Company’s auditors determine that any Payment would be nondeductible by the Company because of Code Section 280G, then
the Company shall promptly give the Participant notice to that effect and a copy of the detailed calculation thereof and of the
Reduced Amount, and the Participant may then elect, in his or her sole discretion, which and how much of the Payments shall be
eliminated or reduced (as long as after such election the aggregate present value of the Payments equals the Reduced Amount) and
shall advise the Company in writing of his or her election within ten (10) days of receipt of notice. If no such election is made
by the Participant within such ten (10) day period, then the Company may elect which and how much of the Payments shall be eliminated
or reduced (as long as after such election the aggregate present value of the Payments equals the Reduced Amount) and shall notify
the Participant promptly of such election. For purposes of this Section 14(d), present value shall be determined in accordance
with Code Section 280G(d)(4). All determinations made by the Company’s auditors under this Section 14(d) shall be binding
upon the Company and the Participant and shall be made within sixty (60) days of the date when a Payment becomes payable or transferable.
As promptly as practicable following such determination and the elections hereunder, the Company shall pay or transfer to or for
the benefit of the Participant such amounts as are then due to him or her under the Plan and shall promptly pay or transfer to
or for the benefit of the Participant in the future such amounts as become due to him or her under the Plan.

 

(iii)Except
to the extent such payment was made in connection with a Change of Control, as a result of uncertainty in the application of Code
Section 280G at the time of an initial determination by the Company’s auditors hereunder, it is possible that Payments will
have been made by the Company that should not have been made (an “Overpayment”) or that additional Payments that will
not have been made by the Company could have been made (an “Underpayment”), consistent in each case with the calculation
of the Reduced Amount hereunder. In the event that the Company’s auditors, based upon the assertion of a deficiency by the
Internal Revenue Service against the Company or the Participant that the auditors believe has a high probability of success, determine
that an Overpayment has been made, such Overpayment shall be treated for all purposes as a loan to the Participant which he or
she shall repay to the Company, together with interest at the applicable federal rate provided in Code Section 7872(f)(2); provided,
however, that no amount shall be payable by the Participant to the Company if and to the extent that such payment would not reduce
the amount subject to taxation under Code Section 4999. In the event that the auditors determine that an Underpayment has occurred,
such Underpayment shall promptly be paid or transferred by the Company to or for the benefit of the Participant, together with
interest at the applicable federal rate provided in Code Section 7872(f)(2).

 

(iv)For
purposes of this Section 14(d), the term “Company” shall include affiliated corporations to the extent determined by
the auditors in accordance with Code Section 280G(d)(5).

 

15.STOCK
TRANSFER RESTRICTIONS.

 

(a)Restriction
on Transfer of Options. No Option shall be transferable by the Participant otherwise than by will or by the laws of descent
and distribution and all Options shall be exercisable, during the Participant’s lifetime, only by the Participant, or by
the Participant’s legal representative or guardian in the event of the Participant’s incapacity. The Participant may
elect to designate a beneficiary by providing written notice of the name of such beneficiary to the Company, and may revoke or
change such designation at any time by filing written notice of revocation or change with the Company, and any such beneficiary
may exercise the Participant’s Option in the event of the Participant’s death to the extent provided herein. If the
Participant does not designate a beneficiary, or if the designated beneficiary predeceases the Participant, the legal representative
of the Participant may exercise the Option in the event of the Participant’s death to the extent provided herein. Notwithstanding
the foregoing, the Committee, in its sole discretion, may provide in the Award agreement regarding a given Option that the Participant
may transfer, without consideration for the transfer, his or her Options to members of his or her immediate family, to trusts for
the benefit of such family members, or to partnerships in which such family members are the only partners, provided that the transferee
agrees in writing with the Company to be bound by all of the terms and conditions of this Plan and the applicable Option.

 

    	10

    	 

    

 

(b)Issued Shares.
No Issued Shares shall be sold, assigned, transferred, pledged, hypothecated, given away or in any other manner disposed of or
encumbered, whether voluntarily or by operation of law, unless such transfer is in compliance with the terms of the applicable
Award, all applicable securities laws (including, without limitation, the Securities Act and the Exchange Act), and with the terms
and conditions of this Section 15. In connection with any proposed transfer, the Committee may require the transferor to provide
at the transferor’s own expense an opinion of counsel to the transferor and the Company, satisfactory to the Committee, that
such transfer is in compliance with all foreign, federal and state securities laws (including, without limitation, the Securities
Act). Any attempted disposition of Issued Shares not in accordance with the terms and conditions of this Section 15 shall be null
and void, and the Company shall not reflect on its records any change in record ownership of any Issued Shares as a result of any
such disposition, shall otherwise refuse to recognize any such disposition and shall not in any way give effect to any such disposition
of Issued Shares.

 

(c)Legends.
The Company may cause a legend or legends to be put on any certificates for shares to make appropriate references to any applicable
legal restrictions on transfer.

 

(d)Adjustments
for Changes in Capital Structure. If, as a result of any reorganization, recapitalization, reclassification, stock dividend,
stock split, reverse stock split or other similar change in the outstanding Shares of the Company, the outstanding Shares are increased
or decreased or are exchanged for a different number or kind of shares of the Company’s stock, the restrictions contained
in this Section 15 shall apply with equal force to additional and/or substitute securities, if any, received by Participant in
exchange for, or by virtue of his or her ownership of, Issued Shares.

 

16.MISCELLANEOUS.

 

(a)Other Terms
and Conditions. The grant of any Award under this Plan may also be subject to other provisions (whether or not applicable to
the Award awarded to any other Participant) as the Committee determines appropriate, subject to any limitations imposed in the
Plan.

 

(b)Code Section
409A. The provisions of Code Section 409A are incorporated herein by reference to the extent necessary for any Award that is
subject to Code Section 409A to comply therewith.

 

(c)Employment
or Service. The issuance of an Award shall not confer upon a Participant any right with respect to continued employment or
service with the Company or any Affiliate, or the right to continue as a consultant or director. Unless determined otherwise by
the Committee, for purposes of the Plan and all Awards, the following rules shall apply:

 

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(i)a Participant
who transfers employment between the Company and any Affiliate, or between Affiliates, will not be considered to have terminated
employment;

 

(ii)a Participant
who ceases to be a consultant, advisor or non-employee director because he or she becomes an employee of the Company or an Affiliate
shall not be considered to have ceased service with respect to any Award until such Participant’s termination of employment
with the Company and its Affiliates;

 

(iii)a
Participant who ceases to be employed by the Company or an Affiliate of the Company and immediately thereafter becomes a non-employee
director of the Company or any Affiliate, or a consultant to the Company or any Affiliate, shall not be considered to have terminated
employment until such Participant’s service as a director of, or consultant to, the Company and its Affiliates has ceased;
and

 

(iv)a Participant
employed by an Affiliate will be considered to have terminated employment when such entity ceases to be an Affiliate of the Company.

 

Notwithstanding the foregoing, with respect
to an Award subject to Code Section 409A, a Participant shall be considered to have terminated employment (where termination of
employment triggers payment of the Award) upon the date of his separation from service within the meaning of Code Section 409A.

 

(d)No Fractional
Shares. No fractional Shares or other securities may be issued or delivered pursuant to this Plan, and the Committee may determine
whether cash, other securities or other property will be paid or transferred in lieu of any fractional Shares or other securities,
or whether such fractional Shares or other securities or any rights to fractional Shares or other securities will be canceled,
terminated or otherwise eliminated.

 

(e)Unfunded Plan.
This Plan is unfunded and does not create, and should not be construed to create, a trust or separate fund with respect to this
Plan’s benefits. This Plan does not establish any fiduciary relationship between the Company and any Participant. To the
extent any person holds any rights by virtue of an Award granted under this Plan, such rights are no greater than the rights of
the Company’s general unsecured creditors.

 

(f)Requirements
of Law. The granting of Awards under this Plan and the issuance of Shares in connection with an Award are subject to all applicable
laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.
Notwithstanding any other provision of this Plan or any award agreement, the Company has no liability to deliver any Shares under
this Plan or make any payment unless such delivery or payment would comply with all applicable laws and the applicable requirements
of any securities exchange or similar entity. In such event, the Company may substitute cash for any Share(s) otherwise deliverable
hereunder without the consent of the Participant or any other person.

 

(g)Governing Law.
This Plan, and all agreements under this Plan, shall be construed in accordance with and governed by the laws of the State of California,
without reference to any conflict of law principles. Any legal action or proceeding with respect to this Plan, any Award or any
award agreement, or for recognition and enforcement of any judgment in respect of this Plan, any Award or any award agreement,
may only be brought and determined in a court sitting in the State of California.

 

(h)Limitations
on Actions. Any legal action or proceeding with respect to this Plan, any Award or any Award agreement, must be brought within
one year (365 days) after the day the complaining party first knew or should have known of the events giving rise to the complaint.

 

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(i)Construction.
Whenever any words are used herein in the masculine, they shall be construed as though they were used in the feminine in all cases
where they would so apply; and wherever any words are used in the singular or plural, they shall be construed as though they were
used in the plural or singular, as the case may be, in all cases where they would so apply. Titles of sections are for general
information only, and the Plan is not to be construed with reference to such titles.

 

(j)Severability.
If any provision of this Plan or any award agreement or any Award (i) is or becomes or is deemed to be invalid, illegal or unenforceable
in any jurisdiction, or as to any person or Award, or (ii) would disqualify this Plan, any award agreement or any Award, then such
provision should be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Committee, materially altering the intent of this Plan, award agreement or Award, then such
provision should be stricken as to such jurisdiction, person or Award, and the remainder of this Plan, such award agreement and
such Award will remain in full force and effect.

 

* * * * *

 

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C E R T I F I C A T I O N

 

On behalf of the Company, the undersigned
hereby certifies that this Rackwise, Inc. 2013 Equity Incentive Plan has been approved by the Board of Directors of the Company
as of December 18, 2013.

 

	 	RACKWISE, INC. 
	 	 	 
	 	 	 
	 	By:  	/s/ Guy A. Archbold
	 	Name:  	Guy A. Archbold
	 	Title:   	President and Chief Executive Officer

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