Document:

Exhibit
10.11

 

STOCK
PURCHASE AGREEMENT

 

BY
AND AMONG

 

SURGE
HOLDINGS, INC., 

 

ELECTRONIC
CHECK SERVICES, INC.,

 

CENTRAL
STATES LEGAL SERVICES, INC. 

 

DENNIS
R. WINFREY,

 

AND

 

PEGGYS.WINFREY

 

Dated
as of January [  ], 2020

 

THIS
STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of January [ ], 2020 and effective
as of October 1, 2019, by and among Surge Holdings, Inc., a Nevada corporation (the “Purchaser”), Electronic
Check Services, Inc., a Missouri corporation (“Electronic Check”), Central States Legal Services, Inc., a Missouri
corporation ( “Central States” and, together with Electronic Check, the “Companies”), Dennis
R. Winfrey, an individual, and Peggy S. Winfrey, an individual (together, the “Stockholders” and, together
with the Companies, the “Seller Parties”).

 

RECITALS

 

A.
The Stockholders are the sole legal and beneficial owners of all of the Electronic Check Stock as of the date of this Agreement.

 

B.
Peggy S. Winfrey is the sole legal and beneficial owner of all of the Central States Stock as of the date of this Agreement.

 

C.
Subject to the terms and conditions set forth in this Agreement, the Purchaser desires to purchase from the Stockholders, and
the Stockholders desire to sell to the Purchaser, all of the Electronic Check Stock and all of the Central States Stock owned
by the Stockholders free from any and all Liens.

 

NOW,
THEREFORE, in consideration of the mutual agreements, covenants and other premises set forth herein, the mutual benefits to be
gained by the performance thereof, and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and accepted, the parties hereby agree as follows:

 

ARTICLE
I

 

DEFINITIONS

 

For
all purposes of this Agreement, the following terms shall have the following respective meanings:

 

“Affiliate”
means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control
with such Person. For purposes of this Agreement, “control,” when used with respect to any specified Person, means
the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through
ownership of voting securities or by Contract or otherwise, and the terms “controlling” and “controlled by”
have correlative meanings to the foregoing.

 

    	1

    	 

    

 

“Business
Day(s)” means each day that is not a Saturday, Sunday or other day on which the Purchaser is closed for business or
banking institutions located in Memphis, Tennessee are authorized or obligated by Law or executive order to close.

 

“Central
States Stock” means the shares of common stock of Central States, $1.00 par value per share.

 

“Closing
Purchaser Stock Consideration” means fifty five thousand (50,000) shares of Purchaser Common Stock to be issued to the
Suray Holdings LLC (an entity jointly controlled by Dennis R. Winfrey, Peggy S. Winfrey, and Derron Winfrey) at the Closing.

 

“Companies
Representatives” means any of the officers, directors, managers, partners, independent contractors, consultants, advisors,
employees, stockholders, agents, representatives or Affiliates of the Companies.

 

“Contract”
means any mortgage, indenture, lease, contract, license, covenant, plan, insurance policy, purchase order (including any related
terms and conditions), work order or other agreement, instrument, arrangement, obligation, understanding or commitment, permit,
concession or franchise, whether oral or written and including any amendment, waiver or modification made thereto.

 

“Dollars”
or “$” means United States Dollars.

 

“Electronic
Check Stock” means the shares of common stock of Electronic Check, $1.00 par value per share.

 

“GAAP”
means United States generally accepted accounting principles consistently applied.

 

“Governmental
Entity” means any federal, national, foreign, supranational, state, provincial, local or other government, governmental,
regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body of competent
jurisdiction.

 

“Indebtedness”
of any Person means, as of any specified date, the amount equal to the sum (without any double-counting) of the following obligations
(whether or not then due and payable), to the extent they are either obligations of such Person or its Subsidiary or guaranteed
by such Person or its Subsidiary, including through the grant of a security interest upon any assets of such Person or its Subsidiary:
(a) all outstanding indebtedness for borrowed money owed to third parties or Affiliates; (b) all obligations for the deferred
purchase price of property or services (including any potential future earn-out, purchase price adjustment, releases of “holdbacks”
or similar payments) (“Deferred Purchase Price”); (c) all obligations evidenced by notes, bonds, debentures
or other similar instruments (whether or not convertible) or arising under indentures; (d) all obligations arising out of any
financial hedging, swap or similar arrangements; (e) all obligations of such Person as a lessee that would be required to be capitalized
in accordance with GAAP; (f) all obligations in connection with any letter of credit, banker’s acceptance, guarantee, surety,
performance or appeal bond, or similar credit transaction; (g) any deferred revenues or prepayments ; (h) any unpaid Taxes of
the Companies; (i) any payables or other amounts owed to any Affiliate of the Companies; (j) any mortgage or other obligation
secured by a Lien; (k) all Liabilities for refunds to customers for payments received in error; and (l) the aggregate amount of
all accrued interest payable on such items under clauses (a) through (k) and prepayment premiums, penalties, breakage costs, “make
whole amounts,” costs, expenses and other payment obligations of such Person that would arise (whether or not then due and
payable) if all such items under clauses (a) through (k) were prepaid, extinguished, unwound and settled in full as of such specified
date. For purposes of determining the Deferred Purchase Price obligations as of a specified date, such obligations shall be deemed
to be the maximum amount of Deferred Purchase Price owing as of such specified date (whether or not then due and payable) or potentially
owing at a future date.

 

“IRS”
means the United States Internal Revenue Service.

 

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“Knowledge”
or “Known” means, whether or not capitalized, with respect to the Companies, the knowledge of Dennis R. Winfrey,
or Peggy S. Winfrey after a reasonable investigation and inquiry.

 

“Laws”
means all constitutions, laws (including common law), statutes, regulations, ordinances, codes, orders, decrees, judgments, writs,
injunctions, decisions, rules, standards, and rulings or any other pronouncements having the effect of law of the United States,
any foreign country or any domestic or foreign state, county, city or other political subdivision of any Governmental Entity.

 

“Liability”
or “Liabilities” means debts, liabilities, commitments, losses, deficiencies, duties, charges, claims, damages,
demands, costs, fees, Taxes, expenses and obligations (including guarantees, endorsements and other forms of credit support),
whether accrued or fixed, absolute or contingent, matured or unmatured, known or unknown, on- or off-balance sheet, including
those arising under any Contract, Law, statute, ordinance, regulation, rule, code, common law or other requirement or rule enacted
or promulgated by any Governmental Entity or any litigation, court action or proceeding, lawsuit, originating application to an
employment tribunal, or binding arbitration.

 

“Lien”
means any lien, pledge, charge, claim, mortgage, security interest, defect in title, preemptive right, vesting limitation, community
or marital property interest, right of first offer, notice, negotiation or refusal, transfer restriction of any kind or other
encumbrance of any sort.

 

“Loss”
means any claim, action, proceeding, loss, Liability, damage (excluding punitive damages except in the case of a third- party
claim), cost, interest, award, judgment, penalty, Tax, and expense, including reasonable attorneys’ and consultants’
fees and expenses and including any such reasonable out-of-pocket expenses incurred in connection with investigating, defending
against or settling any of the foregoing, in each case, whether arising from a third-party or a direct claim.

 

“Material
Adverse Effect” means any state of facts, condition, change, development, event or effect that, either alone or in combination
with any other state of facts, condition, change, development, event or effect, is, or would be reasonably likely to be, materially
adverse to the business, assets (whether tangible or intangible), Liabilities, condition (financial or otherwise), operations
or capitalization of the Companies, when viewed on a short, medium or long term horizon, but in each case shall not include the
effect of facts, conditions, changes, developments, events or effects to the extent resulting from (a) conditions affecting the
industry in which the Companies operate generally, (b) war, terrorism or hostilities, (c) any changes in general economic or business
conditions or the financial or securities markets generally, (d) any change in GAAP or applicable Laws (or interpretation thereof),
(e) any acts of God, or natural disasters or any worsening thereof or actions taken in response thereto, or national or international
political or social conditions, (f) any failure in and of itself (as distinguished from any fact, condition, change, development,
event or effect (other than as described in clauses (a) – (e) of this definition) giving rise to or contributing to such
failure) by the Companies to meet any projections or forecasts for any period, and (g) taking or not taking any actions at the
prior written direction of the Purchaser; provided, that in the case of clauses (a), (b), (c), (d) and (e), such
fact, condition, change, development, event or effect does not have any disproportionate or unique material adverse effect on
the Companies.

 

“Ongoing
Purchaser Stock Consideration” means two thousand five hundred (2,500) shares of Purchaser Common Stock to be issued
to the Dennis R. Winfrey Revocable Trust on the 15th day of each month until such time as the funds currently held
by Company in the bank accounts (as referenced in paragraph 2.1 (d)) are returned to Seller Parties, not to exceed 12 months without
written agreement among the necessary parties.

 

“Permit”
means all consents, licenses, permits, grants, agreements and authorizations required by any Governmental Entity to lawfully operate
the business of the Companies (including any pending applications for such all consents, licenses, permits, grants, agreements
and authorizations).

 

“Permitted
Liens” means (a) Liens for Taxes (i) not yet due and payable or (ii) that are being contested in good faith by appropriate
procedures, (b) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen, and repairmen incurred
in the ordinary course of business consistent with past practice and not yet delinquent, and/or (c) zoning, building, or other
restrictions, variances, covenants, rights of way, encumbrances, and easements.

 

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“Person”
means an individual or entity, including a partnership, a limited liability company, a corporation, an association, a joint stock
company, a trust, a cooperative, a foundation, a joint venture, an unincorporated organization, or a Governmental Entity (or any
department, agency, or political subdivision thereof).

 

“Purchaser
Common Stock” means Common Stock, par value $0.001 per share, of the Purchaser.

 

“Purchaser
Indemnified Parties” means the Purchaser, its Affiliates and its and their respective officers, directors, employees,
agents and representatives.

 

“Restricted
Shares” means all shares of Purchaser Common Stock issuable hereunder other than shares of Purchaser Common Stock (a)
the offer and sale of which have been registered under a registration statement pursuant to the Securities Act and sold thereunder,
(b) with respect to which a sale or other disposition may be made in reliance on and in accordance with Rule 144 (or any successor
provision) under the Securities Act, or (c) with respect to which the holder thereof shall have delivered to the Purchaser either
(i) an opinion of counsel in form and substance reasonably satisfactory to Purchaser, delivered by counsel reasonably satisfactory
to the Purchaser, or (ii) a “no action” letter from the SEC, in either case to the effect that subsequent transfers
of such shares of Purchaser Common Stock may be effected without registration under the Securities Act.

 

“SEC”
means the Securities and Exchange Commission.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, as the same
may be amended from time to time.

 

“Subsidiary”
of any Person means any corporation, partnership, limited liability company, cooperative, association or other organization (including
any branch), whether incorporated or unincorporated, which is directly or indirectly controlled by such Person, whether through
ownership of securities or otherwise.

 

“Tax”
or “Taxes” means any and all U.S. federal, state, local and non-U.S. taxes, assessments and other governmental
charges, duties (including stamp duty), fees, impositions of any kind whatsoever including taxes based upon or measured by gross
receipts, income, profits, gains, sales, use and occupation, and value added, ad valorem, transfer, franchise, withholding, payroll,
recapture, environmental, employment, unclaimed property, escheat, excise and property taxes as well as public imposts, and social
security charges (including health, unemployment, workers’ compensation and pension insurance), together with all interest,
penalties, and additions imposed with respect to such amounts.

 

“Tax
Returns” means any return, declaration, report, statement, information statement or other document filed or required
to be filed with respect to Taxes, including any claims for refunds of Taxes, any information returns and any amendments, schedules
or supplements of any of the foregoing.

 

“Transaction
Expenses” means any Liabilities incurred by or on behalf of the Stockholders or the Companies (or any Affiliate thereof,
if required to be paid by the Companies) in connection with the negotiation and execution of this Agreement (including all fees,
costs and expenses of any brokers, accountants, financial advisors, attorneys, consultants, auditors and other experts), the performance
of such Person’s and its Affiliates’ obligations hereunder and thereunder and the consummation of the Transactions
(including any fees and expenses associated with obtaining any terminations or amendments contemplated hereby, or any waivers,
consents or approvals of any Person), any Liabilities that may become due and payable by the Companies or the Stockholders as
a result of the Transactions (including all brokers’, finders’ or similar fees owed by any such Person in connection
with the Transactions) and any change of control payments, bonuses, severance, termination or retention obligations or similar
amounts payable by or due from the Companies that are triggered by the Transactions, the employer portions of any payroll or employment
Taxes with respect to any such change of control payments, bonuses, severance, termination or retention obligations or similar
compensatory payments made by the Companies to service providers in connection with the Transactions, any payments owed to the
Stockholders.

 

“Transactions”
means the Electronic Check Share Purchase and the Central States Share Purchase and the other transactions contemplated hereby.

 

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“Willful
Breach” means (a) a breach of a representation or warranty contained in Article III, Article IV,
or Article V of this Agreement that the breaching party knows is a misrepresentation of such representation or warranty
or (b) a breach of a covenant contained in this Agreement that the breaching party knows is a breach of such covenant.

Each
of the following terms is defined in the Section set forth opposite such term:

 

	Term	 	Section
	9.9%
    Threshold	 	2.1(d)
	Agreement	 	Preamble
	Central
    States	 	Preamble
	Central
    States Share Purchase	 	2.1(b)
	Charter
    Documents	 	3.1(a)
	Claims	 	6.4
	Closing	 	2.2
	Closing
    Date	 	2.2(b)
	Companies	 	Preamble
	Continuing
    Employees	 	6.2f
	Disclosure
    Schedule	 	Article
    III
	Electronic
    Check	 	Preamble
	Electronic
    Check Share Purchase	 	2.1(a)
	Excluded
    Claims	 	6.4(b)
	Interested
    Party	 	3.12(iii)
	Issued
    Shares	 	2.1(f)
	Material
    Contracts	 	3.11(b)
	Offered
    Employees	 	6.2
	Purchaser	 	Preamble
	Purchaser
    Closing Deliveries	 	2.3(a)
	Releasor	 	6.4
	Seller
    Parties	 	Preamble
	Seller
    Party Closing Deliveries	 	2.3(b)
	Springfield
    Property	 	3.10(b)
	Stockholders	 	Preamble

 

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ARTICLE
II

 

THE
STOCK PURCHASE

 

2.1
Purchase and Sale.

 

(a)
Purchase and Sale of Electronic Check Stock. Upon the terms and subject to the conditions of this Agreement, at the Closing,
the Stockholders shall sell, assign, transfer, convey and deliver to the Purchaser, and the Purchaser will purchase and acquire
from the Stockholders, all of the Stockholders’ right, title and interest in and to all of the outstanding Electronic Check
Stock, free and clear of any and all Liens (the “Electronic Check Share Purchase”), in exchange for the consideration
specified herein.

 

(b)
Purchase and Sale of Central States Stock. Upon the terms and subject to the conditions of this Agreement, at the Closing,
Peggy S. Winfrey shall sell, assign, transfer, convey and deliver to the Purchaser, and the Purchaser will purchase and acquire
from Peggy S. Winfrey, all of Peggy S. Winfrey’s right, title and interest in and to all of the outstanding Central States
Stock, free and clear of any and all Liens (the “Central States Share Purchase”), in exchange for the consideration
specified herein.

 

(c)
Payments at the Closing on Electronic Check Stock and Central States Stock. In full consideration for the transfer of the
Electronic Check Stock as set forth in Section 2.1(a) and in full consideration for the transfer of the Central States
Stock as set forth in Section 2.1(b) simultaneously with the Closing, the Purchaser shall issue to Suray Holdings LLC the
Closing Purchaser Stock Consideration.

 

(d)
Ongoing Payments. Starting on January 15, 2020, the Purchaser shall issue to the Dennis R. Winfrey Revocable Trust the
Ongoing Purchaser Stock Consideration. The Ongoing Purchaser Stock Consideration shall be paid as a Collateral Fee for the funds
currently held by the Company bank account(s).

 

(e)
Legend on Stock Certificates. The certificates representing the shares of Purchaser Common Stock issuable pursuant to Section
2.1(c), shall include an endorsement typed or otherwise denoted conspicuously thereon of the following legend (along with
any other legends that may be required under applicable Laws):

 

“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO TRANSFER MAY BE EFFECTED WITHOUT
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.”

 

In
the event that any shares of Purchaser Common Stock issuable hereunder shall cease to be Restricted Shares, the Purchaser shall,
upon the written request of the shareholder in question, issue to such shareholder a new certificate representing such shares
of Purchaser Common Stock without the legend required by this Section 2.1(e).

 

(f)
Purchase Stock Consideration. In no event shall the aggregate number of shares of Purchaser Common Stock issued hereunder
(the “Issued Shares”) exceed a number of shares equal to 9.9% of the number of shares of Purchaser Common Stock
outstanding immediately prior to the Closing (the “9.9% Threshold”). In the event that the number of shares
of Purchaser Common Stock otherwise comprising the Issued Shares would exceed the 9.9% Threshold, the number of shares of Purchaser
Common Stock issued will be cut back to the 9.9% Threshold until such time as the Stockholders holder less than the 9.9% Threshold.
Seller Parties will not, for the eighteen (18) calendar months following the date hereof, for the purpose of open market trades,
offer, pledge, sell, contract to sell, grant, lend, or otherwise transfer or dispose of shares of Purchaser Common Stock, directly
or indirectly, in an amount greater than five percent (5.0%) of the trading volume of the Common Stock during the previous month
on the OTCQX, OTCQB, or the OTC Pink marketplaces, Nasdaq, NYSE, or other trading market on which the Purchaser Common Stock is
then trading. Other than via open market trades, Seller Parties may not offer, pledge, sell, contract to sell, grant, lend, or
otherwise transfer or dispose of the Purchaser Common Stock without the prior written consent of the Purchaser. Purchaser’s
consent to a transfer or disposal of the Purchaser Common Stock by Seller Parties shall be specifically conditioned on the transferee
of the Purchaser Common Stock signing a Leak-Out Agreement with the Purchaser with substantially the same terms as this Section
2.1(f).

 

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2.2
Closing. The closing of the Electronic Check Share Purchase and the Central States Share Purchase (the “Closing”)
shall take place at such time and date as the parties hereto may agree in writing. The Closing shall take place remotely via the
exchange of documents and signature pages or at such location as the parties hereto agree. The date on which the Closing occurs
is herein referred to as the “Closing Date”.

 

2.3
Closing Deliveries.

 

(a)
Closing Deliveries of the Purchaser. In addition to the payments provided for in Section 2.1(c), at the Closing,
the Purchaser shall have delivered or caused to be delivered to the Stockholders (collectively, the “Purchaser Closing
Deliveries”):

 

(i)
a certificate, dated as of the Closing Date and executed on behalf of the Purchaser by an officer of the Purchaser, certifying
the resolutions of the Board of Directors of the Purchaser approving, in accordance with the provisions of the Purchaser’s
certificate of incorporation, bylaws and applicable Law, this Agreement and the Transactions.

 

(b)
Closing Deliveries of the Seller Parties. At the Closing, the Seller Parties shall have delivered or caused to be delivered
to the Purchaser (collectively, the “Seller Party Closing Deliveries”):

 

(i)
a certificate or certificates representing the Electronic Check Stock and the Central States Stock accompanied by duly executed
share transfer deeds for the transfer to the Purchaser of the Electronic Check and the Central States Stock, in form and substance
reasonably satisfactory to the Purchaser; provided, that in the event the certificate or certificates representing the
Electronic Check Stock and the Central States Stock have been lost, stolen or destroyed, the Seller Parties shall deliver in lieu
thereof an affidavit of loss with respect to such certificate(s), together with a customary indemnification in form reasonably
satisfactory to the Purchaser;

 

(ii)
an executed Director and Officer Resignation Letter in substantially the form attached hereto as Exhibit B, effective as
of the Closing, for each officer and director of the Companies (unless otherwise instructed in writing by the Purchaser prior
to the Closing);

 

(iii)
a certificate, dated as of the Closing Date and executed on behalf of the Companies by their Chief Executive Officer, certifying:
(A) a true and complete copy of the Companies’ certificate of incorporation, including all amendments thereto; (B) a true
and complete copy of the Companies’ bylaws, including all amendments thereto; and (C) resolutions of the Boards of Directors
of the Companies’ and the Stockholders approving, in accordance with the provisions of such certificate of incorporation,
such bylaws and applicable Law, this Agreement and the Transactions; and

 

(iv)
certificates of good standing for the Companies issued not earlier than three (3) Business Days prior to the Closing Date by the
Secretary of State of the State of Missouri.

 

ARTICLE
III

 

REPRESENTATIONS
AND WARRANTIES OF THE SELLER PARTIES

 

Each
Seller Party hereby jointly and severally represents and warrants to the Purchaser as of the date hereof and as of the Closing,
subject to such exceptions as are specifically disclosed in the disclosure schedule (referencing the appropriate section and subsection
numbers or disclosed in any other section or subsection of the disclosure schedule, subject to Section 10.13) supplied
by the Seller Parties to the Purchaser (the “Disclosure Schedule”) concurrently with the execution of this
Agreement:

 

3.1
Organization; Authority and Enforceability.

 

(a)
The Companies are corporations duly organized, validly existing and in good standing under the laws of the State of Missouri and
have the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business
as currently conducted. The Companies are duly qualified or licensed as a foreign corporation to do business, and is in good standing,
in each jurisdiction where the character or location of its assets or properties (whether owned, leased or licensed) or the nature
of its activities make such qualification or licensing necessary to the business of the Companies as currently conducted except
where the failure to be so qualified or licensed, individually or in the aggregate, both (i) has not had and would not reasonably
be expected to have a Material Adverse Effect and (ii) has not had and would not be reasonably expected to have a material adverse
effect on the ability of the Companies to perform its obligations under this Agreement or to consummate the Transactions and would
not materially impede or delay or be reasonably expected to materially impede or delay the consummation of the Transactions. The
Companies have made available to the Purchaser a true and correct copy of its certificates of incorporation, as amended to date,
and its bylaws, as amended to date, each of which is in full force and effect on the date hereof (collectively, the “Charter
Documents”). The Board of Directors of each of Electronic Check and Central States has not approved or proposed any
other amendments to the Charter Documents. Section 3.1(a)(i) of the Disclosure Schedule lists the respective directors,
managers, partners and officers of the Companies. Section 3.1(a)(ii) of the Disclosure Schedule lists, by legal entity,
every state or foreign jurisdiction in which the Companies have employees or facilities or otherwise is required to register to
conduct business since January 1, 2015. Section 3.1(a)(iii) of the Disclosure Schedule lists each predecessor entity of
the Companies and any other name under which the Companies have previously operated.

 

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(b)
The Companies have all requisite corporate power and authority to enter into this Agreement and to consummate the Transactions.
The execution, delivery and performance by the Companies of this Agreement, and the consummation of the Transactions, have been
duly and validly authorized by all necessary corporate action on the part of the Companies. This Agreement has been duly and validly
authorized, executed and delivered by the Companies and the obligations of the Companies hereunder are or will be, upon such execution
and delivery (and assuming due authorization, execution and delivery by the other parties hereto), valid, legally binding and
enforceable against the Companies in accordance with its terms.

 

3.2
Capital Structure of Each of Electronic Check and Central States.

 

(a)
The authorized capital stock of Electronic Check consists of 30,000 shares of Electronic Check Stock. (i) 30,000 shares of Electronic
Check Stock are issued and outstanding, and (ii) there is no other issued and outstanding capital stock or other securities of
Electronic Check and no commitments or agreements to issue any Electronic Check Stock or other securities of Electronic Check.
All outstanding shares of Electronic Check Stock have been issued in compliance with all applicable federal, state, local or foreign
statutes, Laws, including federal securities Laws and any applicable state securities or “blue sky” Laws.

 

(b)
The authorized capital stock of Central States consists of 30,000 shares of Central States Stock. (i) 30,000 shares of Central
States Stock are issued and outstanding, and (ii) there is no other issued and outstanding capital stock or other securities of
Central States and no commitments or agreements to issue any Central States Stock or other securities of Central States. All outstanding
shares of Central States Stock have been issued in compliance with all applicable federal, state, local or foreign statutes, Laws,
including federal securities Laws and any applicable state securities or “blue sky” Laws.

 

(c)
There are no shares held in the treasury of the Companies. All of the issued and outstanding shares of Electronic Check Stock
and Central States Stock are duly authorized, validly issued, fully paid and non-assessable and are free and clear of any Liens,
preemptive rights, rights of first refusal or “put” or “call” rights created by statute, the Charter Documents,
or any agreement to which the Companies are a party or by which they are bound. The Stockholders are the sole legal and beneficial
owner of, and has good and marketable title, free and clear of all Liens, to, all of the outstanding Electronic Check Stock and
such interest constitutes the entire interest of the Stockholders in the issued and outstanding share capital or voting securities
of Electronic Check and no other Person has any right, title or interest in or to the Electronic Check Stock. Peggy S. Winfrey
is the sole legal and beneficial owner of, and has good and marketable title, free and clear of all Liens, to, all of the outstanding
Central States Stock and such interest constitutes the entire interest of Peggy S. Winfrey in the issued and outstanding share
capital or voting securities of Central States and no other Person has any right, title or interest in or to the Central States
Stock. There are no warrants, calls, rights, convertible securities, commitments or agreements of any character, written or oral,
to which the Companies are a party or by which the Companies are bound obligating the Companies to reduce its capital or issue,
deliver, sell, repurchase, cancel or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of Electronic
Check Stock or Central States Stock (as the case may be) or obligating the Companies to grant or otherwise amend or enter into
any such warrant, call, right, commitment or agreement. The Companies have no outstanding options, restricted stock units, restricted
shares, stock appreciation right, profit participation, “phantom equity” or any other type of equity instrument or
any plan or similar arrangement pursuant to which it has reserved Electronic Check Stock or Central States Stock (as the case
may be) for issuance; the Companies have never promised (in writing or otherwise) any such equity instrument to any Person. The
Companies has never adopted, sponsored or maintained any stock option plan or any other plan or agreement providing for equity
or equity related compensation to any Person. There have been no (interim) dividends or other distributions with respect to any
shares of Electronic Check Stock or Central States Stock (as the case may be), and there are no declared or accrued but unpaid
(interim) dividends or other distributions with respect to any shares of Electronic Check Stock or Central States Stock (as the
case may be). There are no outstanding bonds, debentures, notes or other obligations, granting its holder the right to vote on
any matters on which stockholders of the Companies may vote (or which are convertible into or exercisable for securities having
the right to vote).

 

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(c)
As a result of the Electronic Check Share Purchase, as of the Closing, the Purchaser will be the sole record and beneficial holder
of all issued and outstanding Electronic Check Stock and all rights to acquire or receive any shares of Electronic Check Stock,
whether or not such shares of Electronic Check Stock are outstanding.

 

(d)
As a result of the Central States Share Purchase, as of the Closing, the Purchaser will be the sole record and beneficial holder
of all issued and outstanding Central States Stock and all rights to acquire or receive any shares of Central States Stock, whether
or not such shares of Central States Stock are outstanding.

 

(e)
Except as contemplated hereby, there are no (i) voting trusts, proxies, or other agreements or understandings with respect to
the voting stock of the Companies, or (ii) agreements to which the Companies are parties relating to the registration, sale or
transfer (including agreements relating to rights of first refusal, co sale rights or “drag along” rights) of any
Electronic Check Stock or Central States Stock.

 

(f)
Section 3.2(f) of the Disclosure Schedule lists all of the former owners of any Electronic Check Stock and Central States
Stock or other equity of the Companies, and the approximate date on which such Electronic Check Stock and Central States Stock
or other equity was sold or otherwise disposed of by such owners.

 

3.3
Subsidiaries. The Companies do not have, and have never had, any Subsidiary. Except as set forth on Section 3.3
of the Disclosure Schedules, the Companies do not control, directly or indirectly, or have (or has ever had) any direct or indirect
equity participation or similar interest in, or any obligations to acquire any equity securities of or make any contribution to
or debt or equity investment in, any Person.

 

3.4
No Conflict. The execution and delivery by the Companies of this Agreement, and the consummation of the Electronic Check
Share Purchase and Central States Share Purchase or any other Transactions, will not conflict with or result in any violation
of or default under (with or without notice or lapse of time, or both), or give rise to a right of notice or termination, cancellation,
modification or acceleration of any right or obligation or loss of any benefit under, or require any consent, approval or waiver
from any Person pursuant to, or result in the creation of any Lien upon the Electronic Check Stock or Central States Stock pursuant
to, (a) any provision of the Charter Documents, (b) any Contract to which the Companies are a party or by which any of the Companies’
properties or assets may be bound, or (c) any Laws applicable to the Companies or any of its properties or assets (whether tangible
or intangible). Section 3.4of the Disclosure Schedule sets forth all necessary consents, waivers and approvals of parties
to any Contracts to which the Companies are parties or by which the Companies’ properties or assets may be bound as are
required thereunder in connection with the Transactions, or for any such Contract to remain in full force and effect without limitation,
modification or alteration after the Closing so as to preserve all rights of, and benefits to, the Companies under such Contracts
from and after the Closing. Following the Closing, the Companies will continue to be permitted to exercise all of its rights under
the Contracts without the payment of any additional amounts or consideration other than ongoing fees, royalties or payments which
the Companies would otherwise be required to pay pursuant to the terms of such Contracts had the Transactions not occurred.

 

3.5
Governmental Consents and Approvals. No consent, notice, waiver, approval, order or authorization of, or registration,
declaration or filing with any Governmental Entity is required by, or with respect to, the Companies in connection with the execution
and delivery of this Agreement or the consummation of the Electronic Check Share Purchase and Central States Share Purchase and
the other Transactions, except for such consents, notices, waivers, approvals, orders, authorizations, registrations, declarations
and filings as may be required under applicable securities Laws.

 

    	9

    	 

    

 

3.6
No Undisclosed Liabilities, No Material Adverse Effect; Ordinary Course.

 

(a)
The Companies have no Liabilities of any type, whether or not accrued, absolute, contingent, matured, unmatured, known or unknown,
on- or off-balance sheet.

 

(b)
Since September 30, 2019, there has not occurred any Material Adverse Effect.

 

3.7
Accounts Receivable; Accounts Payable.

 

(a)
All of the accounts receivable, whether billed or unbilled, of the Companies arose in the ordinary course of business, are carried
at values determined in accordance with GAAP consistently applied, are not subject to any valid set-off or counterclaim, do not
represent obligations for goods sold on consignment, on approval or on a sale-or-return basis or subject to any other repurchase
or return arrangement and, to the Knowledge of the Companies, are collectible (which receivables are recorded in accordance with
GAAP consistently applied). No Person has any Lien other than a Permitted Lien on any accounts receivable of the Companies and
no agreement for deduction or discount has been made with respect to any accounts receivable of the Companies other than in the
ordinary course of business.

 

(b)
All accounts payable and notes payable of the Companies arose in bona fide arm’s length transactions in the ordinary course
of business and no such account payable or note payable is delinquent by more than thirty (30) days in its payment. Since September
30, 2019, the Companies have paid its accounts payable in the ordinary course of business and in a manner consistent with its
past practices, and the Companies have not materially delayed any such payments.

 

3.8
Tax Matters.

 

(a)
The Companies have (i) prepared and timely filed all Tax Returns required to be filed by the Companies and all such Tax Returns
are true and correct in all material respects and have been completed in accordance with applicable Law, and (ii) timely paid
all Taxes that were due and payable (whether or not shown on a Tax Return).

 

(b)
The Companies have paid or withheld with respect to its employees, stockholders and other third parties, all U.S. federal, state
and non-U.S. income Taxes and social security charges and similar fees, Federal Insurance Contribution Act taxes, Federal Unemployment
Tax Act taxes and other Taxes required to be paid or withheld, and has timely paid over any such Taxes to the appropriate authorities.

 

(c)
There is no Tax deficiency outstanding, assessed or proposed in writing against the Companies, nor have the Companies executed
any waiver of any statute of limitations on or extending the period for the assessment or collection of any Tax, which waiver
or extension is still in effect.

 

(d)
No audit or other examination of any Tax Return of the Companies is presently in progress, nor have the Companies been notified
in writing of any request for such an audit or other examination, and to the Knowledge of the Companies, no such action or proceeding
is being contemplated. No adjustment relating to any Tax Return filed by the Companies has been proposed in writing by any Tax
authority, which adjustment has not been resolved. There are no matters relating to Taxes under discussion between any Tax authority
and the Companies

 

(e)
The Companies have delivered to the Purchaser or made available to the Purchaser, copies of all income and other material Tax
Returns for the Companies filed for all periods since and including the taxable period ended December 31, 2016.

 

(f)
No claim has ever been made by a Tax authority in a jurisdiction where the Companies do not file Tax Returns that it is or may
be subject to taxation by that jurisdiction.

 

(g)
There are no Liens on the assets of the Companies relating or attributable to Taxes other than clause (a) of the definition of
Permitted Liens.

 

    	10

    	 

    

 

(h)
The Companies will not be required to include any item of income in, or exclude any item of deduction from, taxable income for
any taxable period (or portion thereof) ending after the Closing Date as a result of (i) any installment sale or open transaction
disposition made prior to the Closing Date, (ii) any prepaid amount or deferred revenue received or accrued prior to the Closing
Date, or (iii) the use of an improper method of accounting for a taxable period ending on or prior to the Closing Date.

 

(i)
The Companies are not subject to any private letter ruling or closing agreement of the IRS or comparable rulings of any other
Governmental Entity. There is no power of attorney given by or binding upon the Companies with respect to Taxes for any period
for which the statute of limitations (including any waivers or extensions) has not yet expired that is currently in effect.

 

(j)
The Companies have not been and are not subject to Tax in a country other than its country of organization by virtue of having
a place of business, a permanent establishment or branch in any country outside the country of its organization.

 

(k)
The Companies (and any predecessors of the Companies or any entity merged or liquidated into the Companies) has been a validly
electing S corporation at all times since its inception and the corresponding provisions of the income tax Laws of the states
and local jurisdictions in which the Companies have and are required to file Tax Returns, and the Companies has filed all forms
and taken all actions necessary to maintain such status and will be an S corporation as of the Closing. Such S corporation election
has not been terminated or revoked, whether intentionally or otherwise, including by operation of law, at any time, other than
with respect to the transactions pursuant to this Agreement. The Companies have, and at all times has had, only one class of equity
securities (other than with respect to any differences in voting rights) and does not have any outstanding options, contracts
or other arrangements that would constitute a second class of equity securities.

 

(l)
Other than the Purchaser Stock Consideration issued in connection with this Agreement and the Purchaser Common Stock issued in
connection with that certain Membership Interest Purchase Agreement, of even date with this Agreement, by and among the Purchaser,
ECS Prepaid, LLC, a Missouri limited liability company, and the Stockholders, no Seller Party directly or indirectly owns any
shares of capital stock of the Purchaser.

 

3.9
Restrictions on Business Activities. Except as set forth on Section 3.9 of the Disclosure Schedule, there is no
Contract (non- competition or otherwise), commitment, judgment, injunction, order or decree to which the Companies are parties
or otherwise binding upon the Companies which has or may reasonably be expected to have the effect of prohibiting or impairing
any business practice of the Companies, any acquisition of property and assets (including tangible and intangible property and
assets) by the Companies, the conduct of business by the Companies, or otherwise limiting the freedom of the Companies to engage
in any line of business or to compete with any Person.

 

3.10
Title to Real and Personal Properties; Absence of Liens.

 

(a)
The Companies do not own any real property, nor have the Companies ever owned any real property.

 

(b)
The Companies are parties to a lease with Peggy Winfrey for the Companies’ use of the premises at 1615 S Ingram Mill Rd,
Ste. B, Springfield MO 65804 (the “Springfield Property”). Other than the Springfield Property, the Companies
have not entered into, nor are bound by, any lease, lease guaranty, sublease, agreement for the leasing, tenancy, license, other
use or occupancy of, or otherwise granting a right in or relating to any real property nor is any Person in the course of acquiring
any such rights or interests.

 

(c)
The Companies have good and valid title to, ownership of, or, in the case of leased properties and assets, valid leasehold interests
in, all of its tangible properties and assets, real, personal and mixed, used or held for use in or necessary for the conduct
of the business of the Companies as currently conducted, free and clear of any Liens, except for Permitted Liens.

 

(d)
The lease to the Springfield Property is valid and in full force and effect, and the Companies have neither received nor provided
any written or oral notice of any default or event that with notice of lapse of time, or both, would constitute a default by the
Companies or any other party thereto under any of the real property leases identified in the Disclosure Schedule. The Companies
have timely and fully performed all covenants and obligations under the property leases identified in the Disclosure Schedule.
The Companies have no existing offsets, defenses, counterclaims, or credits against rentals under any provision of the real property
leases identified in the Disclosure Schedule, other than any security deposit.

 

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(e)
Except as set forth in Section 3.10(f) of the Disclosure Schedule, the Companies have not previously assigned, transferred,
or conveyed all or any part of its right, title, or interest under any of the real property leases identified in the Disclosure
Schedule to any other Person.

 

(f)
The property and assets of the Companies constitute all of the properties and assets (whether real, personal or mixed and whether
tangible or intangible) necessary and sufficient to permit to conduct the business of the Companies immediately after the Closing
in the ordinary course of business consistent with past practice.

 

(g)
To the Knowledge of Companies, there is no action or proceeding pending or threatened relating to the real property identified
in the Disclosure Schedule.

 

3.11
Material Contracts.

 

(a)
Except as set forth in Section 3.11 of the Disclosure Schedule (specifying the appropriate paragraph), the Companies are
not parties to, and has no obligations, rights or benefits under:

 

(i)
any Contract that restricts or purports to restrict the ability of the Companies or any of their Affiliates (including, after
the Closing Date, the Purchaser or any of their Affiliates) to (A) conduct or compete with any line of business or operations
or in any geographic area or during any period of time, (B) solicit or engage any customer, vendor or service provider, or (C)
beneficially own any assets, properties or rights, anywhere at any time;

 

(ii)
(A) any employment, independent contractor or consulting Contract with any officer of the Companies or any other employee, independent
contractor or consultant that provides for annual, aggregate compensation in excess of $150,000 per year, and (B) any employment,
independent contractor or consulting Contract with any employee consultant or independent contractor that provides for any severance
or termination pay (in cash or otherwise) or retention or change in control compensation or benefits to any employee, consultant
or contractor;

 

(iii)
any Contract for employment, consulting or independent contractor services that is not cancelable by the Companies without penalty
with not less than thirty (30) days’ notice;

 

(iv)
any Contract with any professional employer organization or similar entity or Person pursuant to which such entity or Person performs
or provides the Companies with employment, employer and/or human resources-related services (or similar administrative services)
in regard to employees working for the Companies;

 

(v)
any Contract for Indebtedness and any Contract pursuant to which any assets or property are subject to a Lien, other than Permitted
Liens;

 

(vi)
any lease of personal property or other Contract affecting the ownership of, leasing of, or other interest in, any personal property;

 

(vii)
any surety or guarantee agreement or other similar undertaking with respect to contractual performance;

 

(viii)
any Contract relating to capital expenditures and involving payments by the Companies other than in the ordinary course of business
in excess of $50,000 individually or $100,000 in the aggregate per vendor;

 

(ix)
any Contract relating to the disposition or acquisition of material assets or any interest in any business enterprise outside
the ordinary course of business;

 

(x)
any dealer, distribution, joint marketing, joint venture, partnership, strategic alliance, Affiliate or development agreement
or outsourcing arrangement;

 

(xi)
any Contract that contains a right of first refusal, first offer, first negotiation, take or pay, exclusivity, minimum purchase
commitments, or “most favored nation” provision in favor of any Person;

 

(xii)
any Contract providing for the settlement of any suit, claim, action, litigation, administrative charge, arbitration, proceeding
(including any civil, criminal, administrative, investigative or appellate proceeding), hearing, audit, examination or investigation
commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Entity, governmental authority or
arbitrator;

 

    	12

    	 

    

 

(xiii)
any nondisclosure or confidentiality Contract (except such Contracts with substantially similar terms to those in the Companies’
standard form of non-disclosure agreement provided to the Purchaser prior to the date hereof);

 

(xiv)
all Contracts with any Governmental Entity;

 

(xv)
all Contracts under which the Companies has advanced or loaned any amount to any of its directors, officers, or employees; or

 

(xx)
any other Contract that requires payments by the Companies in excess of $50,000 which is not cancelable by the Companies without
penalty within thirty (30) days.

 

(b)
True and complete copies of each Contract disclosed in the Disclosure Schedule or required to be disclosed pursuant to this Section
3.11 (each, a “Material Contract” and collectively, the “Material Contracts”) have been
made available to the Purchaser.

 

(c)
Each Material Contract to which the Companies are a party or any of its properties or assets (whether tangible or intangible)
is subject is a valid and binding agreement enforceable against the Companies in accordance with its terms, and is in full force
and effect with respect to the Companies and, to the Knowledge of the Companies, any other party thereto subject to (i) laws of
general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies. The Companies are in material compliance with and has not materially breached,
violated or defaulted under, or received notice that it has materially breached, violated or defaulted under, any of the terms
or conditions of any Material Contract, nor to the Knowledge of the Companies is any party obligated to the Companies pursuant
to any Material Contract subject to any material breach, violation or default thereunder, nor do the Companies have Knowledge
of any presently existing facts or circumstances that, with the lapse of time, giving of notice, or both would constitute such
a material breach, violation or default by the Companies or any such other party, except as set forth on Section 3.11(c)
of the Disclosure Schedule.

 

(d)
The Companies have performed all material obligations required to have been performed by the Companies pursuant to each Material
Contract.

 

3.12
Interested Party Transactions.

 

(a)
Except as set forth on Section 3.12(a) of the Disclosure Schedule, no (i) equityholder, officer, manager, partner or director
of the Companies, (ii) Affiliate or immediate family member of any such Person listed in (i), or (iii) Person that any Person
listed in (i) or (ii) has or has had an equity or other ownership or financial interest (each, an “Interested Party”),
has or has had in the prior three (3) years, directly or indirectly, (A) any interest in property (including real and personal
property) or assets (including tangible and intangible assets) used or held for use in the business of the Companies, (B) any
Person that furnished or sold, or furnishes or sells, services, products, or technology that the Companies furnishes or sells,
or proposes to furnish or sell, (C) any interest in any Person that purchases from or sells or furnishes to the Companies any
services, products or technology, or (D) any interest in, or is a party to, any Contract or has any right or claim against the
Companies or any of its assets.

 

(b)
All transactions pursuant to which any Interested Party has purchased any material services, products, or technology from, or
sold or furnished any services, products or technology to, the Companies that were entered into have been on an arms’ length
basis on terms no less favorable to the Companies than would be available from an unaffiliated party.

 

3.13
Permits. The Companies possesses and has possessed all Permits required for the operation of its business, and is, and
in the last three (3) years has been, in compliance in all material respects with the terms and conditions of all such Permits.
All such Permits are listed on Section 3.13 of the Disclosure Schedule. All such Permits are valid and full force and effect
and such Permits constitute all Permits required to permit the Companies to operate or conduct its business or hold any interest
in its properties, rights or assets. The consummation of the Electronic Check Share Purchase and the Central States Share Purchase
shall not cause the revocation, modification or cancellation of any such Permit, and no additional Permit is required in connection
therewith or for the ability of the Companies to maintain its business and operations immediately following such consummation.

 

    	13

    	 

    

 

3.14
Brokers’ and Finders’ Fees. None of the Seller Parties has incurred, nor will incur, directly or indirectly,
any Liability for brokerage or finders’ fees or agents’ commissions, fees related to investment banking or similar
advisory services or any similar charges in connection with this Agreement or the Transaction, nor will the Purchaser, nor any
of the Seller Parties incur, directly or indirectly, any such Liability based on arrangements made by or on behalf of the Companies
or the Stockholders.

 

3.15
Employment.

 

(a)
None of the employment policies or practices of the Companies is currently being, or at any time during the past three (3) years
has been, audited or, to the Knowledge of the Companies, investigated, by any Governmental Entity, and to the Knowledge of the
Companies, none of the employment policies or practices of the Companies are currently subject to imminent audit or investigation
by any Governmental Entity. The Companies and the officers of the Companies are not currently, and within the last three (3) years
have not been, subject to any order, decree, injunction, fine, penalty or judgment by any Governmental Entity or private settlement
contract in respect of any labor or employment matters.

 

(b)
The Companies are not currently, and during the past three (3) years has not been, a party to any collective bargaining agreements;
and there are no labor unions or other organizations representing, or, to the Knowledge of the Companies, purporting or attempting
to represent, any employee of the Companies, and the Companies have no duty to bargain with any such union or organization with
respect to wages, hours or other terms and conditions of employment of any of their employees.

 

(c)
Section 3.15(c) of the Disclosure Schedule contains a complete and accurate list of the current employees of the Companies
and shows with respect to each such employee as of the date hereof (unless otherwise specified) (i) the employee’s position
held, and principal place of employment, (ii) base salary or hourly wage rate, as applicable, (iii) annual commission opportunity,
(iv) bonus eligibility for the current year (and bonus paid for the prior year), (v) each employee’s designation as either
exempt or non-exempt for wage and hour purposes, (vi) all other remuneration payable (including applicable rates) and other benefits
provided or which the Companies is bound to provide (whether at present or in the future) to each such employee, or any Person
connected with any such employee, and includes, if any, particulars of all profit sharing, incentive and bonus arrangements to
which the Companies are a party, (vii) the date of hire, (viii) vacation and other paid time off eligibility for the current calendar
year (including current balance of accrued unused vacation or other paid time off, and current accrual rate as of October 31,
2019), and (ix) leave status (including type of leave, and expected return date, if known).

 

(d)
There is no officer, Key Employee, employee that is material to the business, or group of employees of the Companies who have
indicated an intention to terminate his, her, or their employment or engagement with the Companies as of the date hereof, and
in the past three (3) months from the date hereof, the employment of no officer or employee that is material to the business of
the Companies has been terminated for any reason.

 

3.16
Compliance with Laws. The Companies are conducting, and have conducted in the last three (3) years, its business in compliance
in all material respects with all Laws, other legal restraints (whether temporary, preliminary or permanent) applicable to the
Companies. Since its inception, the Companies have not (a) been in violation of any Laws or other legal restraints (whether temporary,
preliminary or permanent) applicable to the Companies in any material respect or (b) received written notice of violation of any
such foreign, federal, state or local laws, statutes, rules, regulations, executive orders, decrees, injunctions, orders or other
legal restraints (whether temporary, preliminary or permanent) applicable to the Companies that remains uncured.

 

3.17
Bank Accounts. Section 3.18 of the Disclosure Schedule lists the names, account numbers, authorized signatories
and locations of all banks and other financial institutions at which the Companies have an account or safe deposit box and the
name of each Person authorized to draft on or have access to any such account or safe deposit box. The bank accounts shall be
immediately be amended to include additional signatories as appointed by Purchaser (“Purchaser Signatories”). Further,
at no time shall any outgoing transactions in an amount more than $5,000.00 or outside of the ordinary course business be initiated
without the additional signature of one of the Purchaser Signatories.

 

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3.19
No Other Representation and Warranties. Except for the representations and warranties contained in this Article III
and/or Article IV, none of the Companies, the Stockholders, nor any representative thereof has made or makes any other
express or implied representation or warranty, either written or oral, on behalf of the Companies, or any representation or warranty
arising from statute or otherwise at law with respect to the Companies. The Seller Parties acknowledge that except for the representations
and warranties contained in Article V, neither the Purchaser nor any representative thereof has made or makes any other
express or implied representation or warranty, either written or oral, on behalf of the Purchaser, or any representation or warranty
arising from statute or otherwise at law with respect to the Purchaser.

 

ARTICLE
IV

 

REPRESENTATIONS
AND WARRANTIES OF THE STOCKHOLDERS

 

The
Stockholders, on behalf of themselves, hereby represent and warrant to the Purchaser as of the date hereof and as of the Closing,
subject to such exceptions as are specifically disclosed in the Disclosure Schedule:

 

4.1
Power and Capacity; Enforceability. The Stockholders possesses all requisite capacity necessary to enter into this Agreement
and to consummate the Transactions. This Agreement to which the Stockholders are parties have been duly executed and delivered
by the Stockholders and the obligations of the Stockholders hereunder are or will be, upon such execution and delivery (and assuming
the due authorization, execution and delivery by the other parties hereto), valid, legally binding and enforceable against the
Stockholders in accordance with their respective terms.

 

4.2
No Conflict.

 

(a)
The execution, delivery and performance by the Stockholders of this Agreement, and the consummation of the Electronic Check Share
Purchase and the Central States Share Purchase or any other Transactions will not conflict with or result in any violation of
or default under (with or without notice or lapse of time, or both), or give rise to a right of notice or termination, cancellation,
modification or acceleration of any right or obligation or loss of any benefit under, or require any consent, approval or waiver
from any Person pursuant to, or result in the creation of any Lien upon the Electronic Check Stock or the Central States Stock
pursuant to (i) any Contract or order to which the Stockholders are subject or (ii) any Laws applicable to the Stockholders or
the Stockholders’ assets (whether tangible or intangible).

 

(b)
No consent, notice, waiver, approval, order or authorization of, or registration, declaration or filing with, any Governmental
Entity is required by, or with respect to, the Stockholders in connection with the execution and delivery of this Agreement to
which the Stockholders are a party, or the consummation of the Electronic Check Share Purchase and the Central States Share Purchase
and the other Transactions except for such consents, notices, waivers, approvals, orders, authorizations, registrations, declarations
and filings as may be required under applicable securities Laws.

 

4.3
Title to Shares. The Stockholders own of record and beneficially all of the outstanding Electronic Check Stock, and has
good and valid title to such Electronic Check Stock, free and clear of all Liens and, at Closing, shall deliver to the Purchaser
good and valid title to such Electronic Check Stock, free and clear of all Liens. The Stockholders do not own, and do not have
the right to acquire, directly or indirectly, any other Electronic Check Stock. The Stockholders are not parties to any option,
warrant, purchase right, or other Contract or commitment that could require the Stockholders to sell, transfer, or otherwise dispose
of any Electronic Check Stock (other than this Agreement). Peggy S. Winfrey owns of record and beneficially all of the outstanding
Central States Stock, and has good and valid title to such Central States Stock, free and clear of all Liens and, at Closing,
shall deliver to the Purchaser good and valid title to such Central States Stock, free and clear of all Liens. Peggy S. Winfrey
does not own, and does not have the right to acquire, directly or indirectly, any other Central States Stock. Peggy S. Winfrey
is not a party to any option, warrant, purchase right, or other Contract or commitment that could require the Peggy S. Winfrey
to sell, transfer, or otherwise dispose of any Central States Stock (other than this Agreement). The Stockholders are not a party
to any voting trust, proxy, or other agreement or understanding with respect to the voting of any share capital of the Companies.

 

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4.4
Litigation. There is no action, suit, claim, litigation, investigation, arbitration, or proceeding of any nature pending,
or, to the knowledge of the Stockholders, threatened, against the Stockholders that seeks to restrain or enjoin the consummation
of the Transactions, nor, to the knowledge of the Stockholders, are there any presently existing facts or circumstances that would
constitute a reasonable basis therefor. There are no outstanding governmental orders and no unsatisfied judgments, penalties or
awards against or affecting the Stockholders, the Electronic Check Stock, or the Central States Stock.

 

4.5
Investment Purpose. The Stockholders are acquiring the shares of Purchaser Common Stock issued hereunder solely for their
own accounts for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof.
The Stockholders understand and acknowledge that the Purchaser Common Stock is not being registered with the SEC under the Securities
Act but instead is being transferred under an exemption or exemptions from the registration and qualification requirements of
the Securities Act and other applicable securities laws which impose certain restrictions on the Stockholders’ ability to
transfer the Purchaser Common Stock. The Stockholders are able to bear the economic risk of holding the Purchaser Common Stock
for an indefinite period (including total loss of its investment), and has sufficient knowledge and experience in financial and
business matters so as to be capable of evaluating the merits and risk of its investment.

 

4.6
No Solicitation. At no time were the Stockholders presented with or solicited by any publicly issued or circulated newspaper,
mail, radio, television or other form of general advertising or solicitation in connection with the offer, sale and purchase of
the Purchaser Common Stock by the Purchaser or its agents.

 

4.7
Accredited Investor. The Stockholders are accredited investors as defined in Rule 501(a) of Regulation D promulgated under
the Securities Act.

 

4.8
Disclosure of Information. The Stockholders have received or has had full access to all the information the Stockholders
consider necessary or appropriate to make an informed investment decision with respect to the Purchaser Stock Consideration. The
Stockholders further has had an opportunity to ask questions and receive answers from the Purchaser regarding the terms and conditions
of the offering of the Purchaser Stock Consideration and to obtain additional information (to the extent the Purchaser possessed
such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to
the Stockholders or to which the Stockholders had access.

 

4.9
Understanding of Risks. The Stockholders are fully aware of: (a) the highly speculative nature of the Purchaser Common
Stock, (b) the financial hazards involved, (c) the liquidity of the Purchaser Common Stock, (d) the qualifications and backgrounds
of the management of the Purchaser and (e) the tax consequences of acquiring the Purchaser Common Stock.

 

4.10
Qualifications. The Stockholders have such knowledge and experience in financial and business matters that the Stockholders
are capable of evaluating the merits and risks of this prospective investment, have the capacity to protect the Stockholders’
own interests in connection with this transaction, and is financially capable of bearing a total loss of the Purchaser
Stock Consideration.

 

4.11
Rule 144. The Stockholders acknowledge that, because the Purchaser Stock Consideration has not been registered under the
Securities Act, the Purchaser Stock Consideration must be held indefinitely unless subsequently registered under the Securities
Act or unless an exemption from such registration is available. The Stockholders are aware of the provisions of Rule 144 promulgated
under the Securities Act.

 

4.12
No Other Representation and Warranties. Except for the representations and warranties contained in Article III and
this Article IV, neither the Stockholders nor any representative thereof has made or makes any other express or implied
representation or warranty, either written or oral, on behalf of the Stockholders, or any representation or warranty arising from
statute or otherwise at law with respect to the Stockholders. The Stockholders acknowledge that except for the representations
and warranties contained in Article V, neither the Purchaser nor any representative thereof has made or makes any other
express or implied representation or warranty, either written or oral, on behalf of the Purchaser, or any representation or warranty
arising from statute or otherwise at law with respect to the Purchaser.

 

    	16

    	 

    

 

ARTICLE
V

 

REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER

 

The
Purchaser hereby represents and warrants to the Seller Parties as of the date hereof and as of the Closing:

 

5.1
Organization; Authority and Enforceability.

 

(a)
The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and
has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business
as it is now being conducted.

 

(b)
The Purchaser has all requisite corporate power and authority to enter into this Agreement and to consummate the Transactions.
The execution and delivery by the Purchaser of this Agreement and the consummation of the Transactions have been duly and validly
authorized by all necessary corporate action on the part of the Purchaser. This Agreement has been duly and validly authorized,
executed and delivered by the Purchaser and the obligations of the Purchaser hereunder are or will be, upon such execution and
delivery (and assuming due authorization, execution and delivery by the other parties hereto), valid, legally binding and enforceable
against the Purchaser in accordance with their respective terms.

 

5.2
No Conflict. The execution and delivery by the Purchaser of this Agreement to which the Purchaser is a party, and the consummation
of the Electronic Check Share Purchase and the Central States Share Purchase or any other Transactions, will not conflict with
or result in any violation or default under (with or without notice or lapse of time, or both), or give rise to a right of notice
or termination, cancellation, modification or acceleration of any right or obligation or loss of any benefit under (a) any provision
of any organizational documents of the Purchaser, (b) any Contract to which the Purchaser is a party or by which any of the Purchaser’s
properties or assets may be bound, or (c) Laws applicable to the Purchaser or any of its properties or assets (whether tangible
or intangible).

 

5.3
Consents. No consent, notice, waiver, approval, order or authorization of, or registration, declaration or filing with,
any Governmental Entity is required by, or with respect to, the Purchaser in connection with the execution and delivery of this
Agreement to which the Purchaser is a party or the consummation of the Electronic Check Share Purchase and the Central States
Share Purchase and the other Transactions, except for such consents, notices, waivers, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable securities Laws.

 

5.4
Valid Issuance of Purchaser Common Stock. The shares of Purchaser Common Stock to be issued pursuant to this Agreement
will, when issued, be duly authorized, validly issued, fully paid and non-assessable and issued in compliance with federal and
state securities Laws.

 

5.5
Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission
in connection with the Transactions based upon arrangements made by or on behalf of the Purchaser.

 

5.6
No Other Representation and Warranties. Except for the representations and warranties contained in this Article V,
neither the Purchaser nor any representative thereof has made or makes any other express or implied representation or warranty,
either written or oral, on behalf of the Purchaser, or any representation or warranty arising from statute or otherwise at law
with respect to the Purchaser. The Purchaser acknowledges that except for the representations and warranties contained in Article
III and Article IV, none of the Companies, the Stockholders, nor representative thereof has made or makes any other
express or implied representation or warranty, either written or oral, on behalf of the Companies or the Stockholders, or any
representation or warranty arising from statute or otherwise at law with respect to the Companies or the Stockholders.

 

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ARTICLE
VI

 

COVENANTS

 

6.1
Public Disclosure. Except as expressly provided for herein, the Seller Parties shall not (and shall not authorize any Companies
Representative to), directly or indirectly, issue or make any statement or communication to any third party (other than their
respective legal, accounting and financial advisors that are bound by confidentiality restrictions) regarding the existence or
subject matter of this Agreement or the Transactions (including any claim or dispute arising out of or related to this Agreement,
or the interpretation, making, performance, breach or termination hereof and the reasons therefor) without the consent of the
Purchaser or as expressly provided for herein.

 

6.2
Continuing Employees. All employees and independent contractors of the Companies (collectively, the “Offered Employees”),
will be offered continued employment on an at-will basis by or with the Purchaser or one of its Subsidiaries (including the Companies).
The Offered Employees who accept employment with the with the Purchaser or one of its Subsidiaries (including the Companies) shall
be referred to herein as “Continuing Employees.” Continuing Employees shall be eligible to participate in the
health, welfare and other benefit programs of the Company. Notwithstanding the foregoing, nothing contained in this Section
6.2 shall (i) be treated as an amendment of any particular employee benefit plan, program, policy, agreement or arrangement,
(ii) give any third party, including any Offered Employee, any Continuing Employee, any former employee of the Company or any
beneficiary representative thereof, any right to enforce the provisions of this Section 6.2 or (iii) operate to duplicate
any benefit provided to any Continuing Employee or the funding of any such benefit. Nothing contained in this Agreement (x) confers
(or is intended to confer) upon any Offered Employee, any Continuing Employee or any other Person any right to continued employment
after the Closing or (y) prevents (or is intended to prevent) the Purchaser or any of its Affiliates from amending, modifying
or terminating any employee benefit plan, program, policy, agreement or arrangement at any time.

 

6.3
Release. Effective for all purposes as of the Closing, the Stockholders acknowledge and agree, on behalf of themselves
and each of their Affiliates, heirs, successors, assigns and agents (each, a “Releasor”), that the Stockholders,
on behalf of themselves and the other Releasors, hereby irrevocably and unconditionally releases the Purchaser and its Affiliates
(including the Companies), and their respective Affiliates, successors and assigns, present or former directors, officers, employees,
and agents, from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages
or causes of action, suits, rights, demands, costs, losses, debts and expenses (including attorneys’ fees and costs incurred)
of any nature whatsoever, known or unknown, suspected or unsuspected, existing or prospective, relating to the Stockholders’
investment in, ownership of any securities in, any rights to proceeds upon the sale of, any rights or assets of, or employment
by, the Companies (collectively, “Claims”); provided, however, that the foregoing release shall
not cover Claims (a) arising from rights of the Stockholders under this Agreement or (b) for accrued wages payable in the ordinary
course of business in the current payroll cycle (collectively, “Excluded Claims”). Such released Claims include
(except as otherwise excluded as an Excluded Claim), to the maximum extent permitted by applicable Laws, any and all Claims: (i)
relating to or arising out of such employment, the end of such employment and/or the terms and conditions of such employment;
(ii) of or for employment discrimination, harassment or retaliation under any local, state or federal law or ordinance, including
without limitation Title VII or the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, as amended the Equal Pay
Act of 1963, as amended, or the Americans with Disabilities Act of 1990, as amended; (iii) under the Family and Medical Leave
Act of 1993, as amended, or under similar state or local law; (iv) under the federal Worker Adjustment Retraining and Notification
Act or any similar state or local law; (v) under the Employee Retirement Income Security Act of 1974, as amended (excluding claims
for accrued, vested benefits under any pension or welfare benefit plan, subject to the terms of the applicable plan and applicable
Law); (vi) under any other federal, state or local statute, law, rule or regulation of the applicable jurisdiction; (vii) for
wages (excluding accrued wages payable in the ordinary course of business in the current payroll cycle), bonuses, incentive compensation,
stock, options or other equity- based incentives, severance, vacation pay or any other compensation or benefits; (viii) under
or for violation of any public policy or Contract (express or implied); (ix) for any tort, or otherwise arising under common law;
(x) arising under any policies, practices or procedures of the Companies; (xi) any and all Claims for wrongful or constructive
discharge, breach of Contract (express or implied), infliction of emotional distress, defamation; and (xii) any and all Claims
for costs, fees, or other expenses, including attorneys’ fees incurred in these matters. The Stockholders represents and
acknowledges that they have read this release and understands its terms and has been given an opportunity to ask questions of
the Companies’ representatives, and to consult with independent legal counsel of their own choosing. The Stockholders further
represents that in signing this release they are not relying, and have not relied, on any representation or statement not set
forth in this release made by any representative of the Purchaser or anyone else with regard to the subject matter, basis or effect
of this release or otherwise. The Stockholders hereby acknowledge and agree that neither the release provided hereunder nor the
furnishing of the consideration for the release given hereunder will be deemed or construed at any time to be an admission by
any released party or Releasor of any improper or unlawful conduct. The Stockholders hereby irrevocably covenants to refrain from,
directly or indirectly, asserting any claim, or commencing, instituting or causing to be commenced, any action, proceeding, charge,
complaint, or investigation of any kind against any of the released parties, in any forum whatsoever (including any administrative
agency), that is based upon any claim purported to be released hereunder. Notwithstanding the foregoing or anything to the contrary
in this release, it is understood and agreed that the release given herein does not prohibit any Releasor from filing an administrative
charge with the Equal Employment Opportunity Commission or similar equal employment opportunity/anti-discrimination administrative
agency (federal, state or local). The Stockholders, however, waive any right to monetary or other recovery in connection with
any such charge and/or in the event any such federal, state or local administrative agency pursues any claims on the Stockholders’
behalf or otherwise in connection with any such charge or relating to the Stockholders’ employment with the Companies or
any successor or assign. This release may be pleaded by any released party as a full and complete defense regarding any matter
purported to be released hereby and may be used as the basis for an injunction against any action at law or equity instituted
or maintained against them regarding such matter in violation of this Agreement. In the event any claim is brought or maintained
by a Releasor against any released party in violation of this Agreement, the Stockholders shall be responsible for all costs and
expenses, including reasonable attorneys’ fees, incurred by the released parties in defending same. The Stockholders expressly
acknowledge that the release contained herein applies to all Claims, regardless of whether such Claims are known or unknown, suspected
or unsuspected, existing or prospective, and include Claims which, if known by the releasing party, might materially affect its
decision to enter into this Section 6.3 (other than the Excluded Claims). The Stockholders have considered and taken into
account the possible existence of such Claims in determining to execute and deliver this Agreement.

 

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6.4
Non-Competition/Non-Solicitation.

 

(a)
The Stockholders, is their individual capacity or through any of their Affiliates shall not, directly or indirectly, for a period
of four (4) years after the Closing Date, engage (whether as owner, employee, operator, manager, consultant or otherwise) anywhere
in the world in any business that competes with the business of the Companies, the Purchaser or any of their respective Affiliates.
Notwithstanding the foregoing, the Stockholders and their Affiliates shall not be prohibited by this Section 6.5(a) from
acquiring or owning less than one percent (1%) of the outstanding voting power of any publicly traded company on a passive basis.

 

(b)
The Stockholders and their Affiliates shall not, nor shall they permit any of their Affiliates to, directly or indirectly, for
a period of four (4) years after the Closing Date, (i) other than for the benefit of the Companies or the Purchaser, solicit,
call upon, divert, take away, attempt to induce, or accept or conduct any business from or with, any customer, supplier, agent
or distributor of the Companies, the Purchaser or any of their respective Affiliates, or cause any such customer, supplier, agent
or distributor to terminate or adversely affect or materially reduce their business relationship with the Companies, the Purchaser
or any of their respective Affiliates, or (ii) contact, solicit or approach for the purpose of offering employment to, or hire
(whether as an employee, consultant, agent, independent contractor or otherwise), any employee employed or full-time consultant
engaged by the Purchaser or any of its Affiliates (including the Companies) during the one (1) year period preceding such contact,
solicitation or approach (provided, that the foregoing clause shall not prohibit the Stockholders or their Affiliates from
making a general solicitation not targeting any such employee or consultant).

 

(c)
The Stockholders, for themselves and on behalf of their Affiliates, agree that the scope of the restrictive provisions set forth
in this Section 6.4 are reasonable with respect to subject matter, time and scope and that the provisions contained in
this Section 6.4 are a material inducement to the Purchaser’s entering into this Agreement and but for the provisions
contained in this Section 6.4, the Purchaser would not have entered into this Agreement. In the event that any court determines
that the subject matter, duration or geographic scope, or all of the foregoing, is unreasonable and that such provision is to
that extent unenforceable, the Purchaser and the Stockholders, for itself or themselves and on behalf of each of their or its
Affiliates, agree that the provision shall remain in full force and effect for the greatest time period and for the broadest subject
matter and in the greatest area, as the case may be, that would not render it unenforceable. It is specifically understood and
agreed that any breach of the provisions of this Section 6.4 by the Stockholders or any of their Affiliates will result
in irreparable injury to the Purchaser, that the remedy at law alone will be an inadequate remedy for such breach and that, in
addition to any other remedy it may have, the Purchaser shall be entitled to enforce the specific performance of this Section
6.4 by the Stockholders and their Affiliates through both temporary and permanent injunctive relief without the necessity
of proving actual damages and without posting a bond, but without limitation of the Purchaser’s right to damages and any
and all other remedies available to the Purchaser, it being understood that injunctive relief is in addition to, and not in lieu
of, such other remedies. Should the Stockholders breach Section 6.4(a) or 6.4(b) above, the term of the restrictions
set forth in Section 6.4(a) or 6.4(b), as applicable, shall be tolled by the duration of such breach. For the avoidance
of doubt, the parties hereto acknowledge and agree that the restrictions set forth in this Section 6.4 are independent
of and in addition to any restrictions set forth in any Contract between the Purchaser or any of its Affiliates (including the
Companies), on the one hand, and the Stockholders, on the other hand (including the remainder of this Agreement). The Stockholders
acknowledge and agree that they have received, or are receiving, substantial consideration in connection with the Transactions.
No breach by Purchaser or any of its Affiliates of any contractual or other obligations it or they have to the Stockholders shall
constitute a defense, or a limitation of, the enforcement of this Section 6.4 against the Stockholders. If the Stockholders
violate this Section 6.4, in addition to all other remedies available to the Purchaser at law, in equity, and under contract,
the Stockholders agree that the Stockholders shall pay the Purchaser’s costs of enforcement of this Section 6.4,
including reasonable attorneys’ fees and expenses.

 

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ARTICLE
VII

 

TAX
MATTERS

 

7.1
Tax Returns.

 

(a)
Except as provided in Section 7.1(b), the Purchaser shall prepare and timely file, or shall cause to be prepared and timely
filed, all Tax Returns of the Companies required to be filed after the Closing Date for taxable periods ending on or before the
Closing Date; provided, that with respect to any Tax Return for a taxable period ending on or prior to the Closing Date,
(i) such Tax Return shall be prepared in a manner consistent with past practice of the Companies unless otherwise required by
applicable Law and (ii) if such Tax Return reflects a material amount of Tax for which the Seller Parties must indemnify the Purchaser,
the Purchaser shall provide such Tax Return to the Stockholders for their review and comment at least thirty (30) days prior to
the date on which such Tax Return is to be filed (or as soon as is reasonably practicable) and Purchaser shall consider in good
faith the reasonable comments of the Stockholders with respect to such Tax Return.

 

(b)
The Stockholders shall prepare and timely file, or shall cause to be prepared and timely filed, all Tax Returns of the Companies
required to be filed after the Closing Date for taxable periods ending on or before the Closing Date and that are income Tax Returns
and reflect items of income, loss, deduction or credit which the Stockholders is required to report on their income Tax Returns;
provided, that with respect to any Tax Return for a taxable period ending on or prior to the Closing Date,

 

(a)
such Tax Return shall be prepared in a manner consistent with the past practice of the Companies unless otherwise required by
applicable Law and (b) the Stockholders shall provide such Tax Return to the Purchaser for its review and comment at least thirty
(30) days prior to the date on which such Tax Return is to be filed (or as soon as is reasonably practicable) and Stockholders
shall consider in good faith the reasonable comments of the Purchaser with respect to such Tax Return.

 

7.2
Tax Cooperation. The Purchaser, the Companies and the Stockholders shall cooperate fully, as and to the extent reasonably
requested by the other parties hereto, in connection with the filing, preparation and review of Tax Returns, and any Tax audits,
Tax proceedings or other Tax-related claims (including claims under this Agreement). Such cooperation shall include providing
records and information that are reasonably relevant to any such matters and in their possession (or if not in their possession,
if reasonably able to obtain), making employees available on a mutually convenient basis to provide additional information, and
explaining any materials provided pursuant to this Section 7.2. The Purchaser, the Companies and the Stockholders shall
not destroy or dispose of any Tax workpapers, schedules or other materials and documents in their possession or under their control
supporting Tax Returns of the Company until the seventh (7th) anniversary of the Closing Date.

 

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7.3
Transfer Taxes. All sales, use, transfer, value added, goods and services, gross receipts, excise, conveyance and documentary,
stamp, recording, registration, conveyance and similar Taxes incurred in connection with the Transactions pursuant to this Agreement,
including penalties and interest (“Transfer Taxes”) shall be borne fifty percent (50%) by the Purchaser and
fifty percent (50%) by the Stockholders. The Purchaser shall timely file all necessary Tax Returns and other documentation with
respect to all such Transfer Taxes and the Stockholders shall join in the execution of any such Tax Returns to the extent required
by applicable Law.

 

ARTICLE
VIII

 

SURVIVAL
OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

 

8.1 Survival
of Representations and Warranties. The representations and warranties of the Company and/or the Stockholders contained in Article
III and Article IV of this Agreement or the Certificates shall survive until the fifteen (15) month anniversary of
the Closing Date (the “Survival Date”); provided, that in the event of any fraud or Willful Breach
by a Seller Party with respect to the representations and warranties set forth in Article III, and the Stockholders
with respect to the representations and warranties set forth in Article IV, such claim shall survive without
limitation. The representations and warranties of the Purchaser contained in Article V of this Agreement or in any
certificate delivered pursuant to this Agreement shall survive until the Survival Date; provided, that in the event of
any fraud or Willful Breach by Purchaser with respect to the representations and warranties set forth in Article V,
such claim shall survive without limitation. The covenants and indemnities (other than for breach of representation and
warranties as provided for earlier in this Section 8.1) of a party hereunder shall survive until thirty (30) days
following the expiration of the statute of limitations applicable to the subject matter thereof (or such longer period as
specified in the applicable covenant). If an Officer’s Certificate asserting a claim for indemnification hereunder, (x)
in the case of representations and warranties that survive until the Survival Date, on or before the Survival Date, or (y)in
the case of the covenants and indemnities (other than for breach of representation and warranties as provided for in clause
(x)), before the date on which such covenant or indemnity ceases to survive, then the claims arising in connection with such
Officer’s Certificate shall survive for the benefit of all Indemnified Parties beyond the expiration of the applicable
survival period for such representation, warranty, covenant or indemnity until such claims are fully and finally resolved.
The parties further acknowledge that the time periods set forth in this Section 8.1 for the assertion of claims under
this Agreement are the result of arms’ length negotiation among the parties and that they intend for the time periods
to be enforced as agreed by the parties.

 

8.2
Indemnification.

 

(a)
Subject to the provisions of this Article VIII, from and after the Closing, the Stockholders agree to indemnify and hold
harmless the Purchaser Indemnified Parties, from and against, and shall compensate and reimburse the Purchaser Indemnified Parties
for, all Losses incurred or sustained by the Purchaser Indemnified Parties, or any of them, directly or indirectly, arising under,
in connection with or as a result of any of the following (the “Indemnifiable Matters”):

 

(i)
any breach (or an allegation that would amount to a breach in the case of a third party claim) of a representation or warranty
made by the Companies and/or the Stockholders in this Agreement or any Certificate;

 

(ii)
any failure (or an allegation that would amount to a failure in the case of a third party claim) by (A) the Companies to perform
or comply with any covenant or agreement applicable to the Companies contained in this Agreement and required to be performed
or complied with as of or prior to the Closing or (B) the Stockholders to perform or comply with any covenant or agreement applicable
to the Stockholders contained in this Agreement;

 

(iii)
any fraud, or any Willful Breach of any provision of this Agreement or any Certificate, to the extent committed as of or prior
to the Closing, by a Seller Party or any authorized representative thereof;

 

(iv)
any claims or threatened claims by or purportedly on behalf of any holder or former holder of any shares of the Electronic Check
Stock or Central States Stock, or in respect of any rights to acquire the Electronic Check Stock and the Central States Stock,
any claims or threatened claims alleging violations of fiduciary duty, or any claims or threatened claims by any Person claiming
to have rights to any portion of the consideration payable hereunder;

 

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(v)
any claims or threatened claims by or purportedly on behalf of any Person with respect to any transaction or agreement between
the Company and any Interested Party initiated or consummated as of or prior to the Closing (each, a “Related Party Transaction”),
including claims or threatened claims alleging violations of fiduciary duty;

 

(vi)
any Transaction Expenses or unpaid Indebtedness of the Company as of immediately prior to the Closing; and/or

 

(vii)
any Taxes owed for periods prior to the Closing.

 

(b)
Subject to the provisions of this Article VIII, from and after the Closing, the Purchaser agrees to indemnify and hold
harmless the Stockholders, from and against, and shall compensate and reimburse the Stockholders for, all Losses incurred or sustained
by the Stockholders, directly or indirectly, arising under, in connection with or as a result of:

 

(i)
any breach (or an allegation that would amount to a breach in the case of a third party claim) of a representation or warranty
made by the Purchaser in Article V of this Agreement or any certificate delivered by the Purchaser to the Seller Parties
in connection with the Closing;

 

(ii)
any failure (or an allegation that would amount to a failure in the case of a third party claim) by the Purchaser to perform or
comply with any covenant or agreement applicable to the Purchaser contained in this Agreement; or

 

(iii)
any fraud, or any Willful Breach of any provision of this Agreement or any such certificate, to the extent committed as of or
prior to the Closing, by the Purchaser or any authorized representative thereof.

 

(c)
For the purpose of this Article VIII only, when determining any inaccuracy or breach of, and the amount of Losses suffered
by an Indemnified Party as a result of, any breach or inaccuracy of any representation or warranty set forth in this Agreement
that is qualified or limited in scope as to material, material adverse effect, Material Adverse Effect, or any other materiality
qualifications or limitations shall be deemed to be made or given without such qualification or limitation.

 

(d)
The Stockholders shall not have any right of contribution, indemnification or right of advancement from the Purchaser or any of
its Affiliates with respect to any Loss claimed by a Purchaser Indemnified Party.

 

(e)
The Company and the Stockholders have agreed that the Purchaser Indemnified Parties’ rights to indemnification, compensation
and reimbursement contained in this Article VIII relating to the representations, warranties, covenants, indemnities and
obligations of the Companies and/or the Stockholders are part of the basis of the bargain contemplated by this Agreement; and
such representations, warranties, covenants, indemnities and obligations, and the rights and remedies that may be exercised by
the Purchaser Indemnified Parties with respect thereto, shall not be waived, limited or otherwise affected by or as a result of
(and the Purchaser Indemnified Parties shall be deemed to have relied upon such representations, warranties, covenants or obligations
notwithstanding) any knowledge on the part of any of the Purchaser Indemnified Parties or any of their representatives (regardless
of whether obtained through any investigation by any Purchaser Indemnified Parties or any representative of any Purchaser Indemnified
Parties or through disclosure by the Companies or any other Person, and regardless of whether such knowledge was obtained before
or after the execution and delivery of this Agreement) or by reason of the fact that a Purchaser Indemnified Party or any of its
representatives knew or should have known that any representation or warranty is or might be inaccurate or untrue. The Purchaser
has agreed that the Stockholders’ right to indemnification, compensation and reimbursement contained in this Article
VIII relating to the representations, warranties, covenants, indemnities and obligations of the Purchaser are part of the
basis of the bargain contemplated by this Agreement.

 

(f)
This Article VIII shall constitute the exclusive remedy after the Closing for recovery of Losses by the Indemnified Parties
(x) as a result of breaches of the matters specified in Section 8.2(a), provided, that notwithstanding anything
herein to the contrary, nothing in this Agreement shall limit the rights or remedies of the Purchaser or any other Purchaser Indemnified
Party (i) in the case of fraud or Willful Breach (including pursuant to Section 8.2(a)(iii) or Section 8.2(b)(iii)),
(ii) Transaction Expenses or Indebtedness as described in Section 8.2(a)(vi), (iii) with respect to specific performance,
injunctive and other equitable relief, (iv) claims relating to Related Party Transactions, or (v) for breaches of any covenant
to be performed following the Closing, or (y) as a result of breaches of the matters specified in Section 8.2(b), provided,
that notwithstanding anything herein to the contrary, nothing in this Agreement shall limit the rights or remedies of the Stockholders
(i) in the case of fraud or Willful Breach (including pursuant to Section 8.2(a)(iii) or Section 8.2(b)(iii)), (ii)
with respect to specific performance, injunctive and other equitable relief, or (iii) for breaches of any covenant to be performed
following the Closing. Without limiting the foregoing, the provisions of this Article VIII will not prevent or limit a
cause of action under Section 6.6 to obtain an injunction or injunctions to prevent breaches of covenants contained in
this Agreement.

 

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8.3
Maximum Payments; Remedy.

 

(a)
The Purchaser Indemnified Parties, on the one hand, or the Stockholders, on the other hand (each, an “Indemnified Party”),
shall not be entitled to any recovery resulting from Section 8.2(a)(i) or Section 8.2(b)(i), respectively, until
such time (if at all) as the total amount of all Losses that have been suffered or incurred by any one or more of such Indemnified
Parties with respect to such matters exceeds $50,000 in the aggregate; and in such event, the Purchaser Indemnified Parties or
the Stockholders, as the case may be, shall, subject to the limitations set forth in the remaining subsections of this Section
8.3, be entitled to be indemnified against and compensated and reimbursed to the extent all Losses from the first Dollar thereof;
provided, that the limitations set forth in this Section 8.3(a) shall not apply to any indemnification claims relating
to any breach (or an allegation that would amount to a breach in the case of a third party claim) of any representation or warranty
that involves fraud or Willful Breach (including pursuant to Section 8.2(a)(iii) or Section 8.2(b)(iii)).

 

(b)
The Purchaser Indemnified Parties’ right to indemnification pursuant to this Article VIII on account of any Losses
will be reduced by all insurance of the Company or other third party indemnification or contribution proceeds actually received
by the Company in respect of those Losses, net of applicable costs and expenses involved in seeking such recovery (including increases
in premiums relating thereto). The applicable Purchaser Indemnified Parties shall remit to the Stockholders, for the benefit of
the Stockholders, any such insurance or other third party proceeds that are paid to such Purchaser Indemnified Parties with respect
to such Losses for which such Purchaser Indemnified Parties have been previously indemnified pursuant to this Article VIII.

 

8.4
Claims for Indemnification; Resolution of Conflicts.

 

(a)
Making a Claim for Indemnification; Officer’s Certificate. The Stockholders or a Purchaser Indemnified Party may
seek recovery of Losses pursuant to this Article VIII by delivering to the Purchaser or the Stockholders, as applicable,
an Officer’s Certificate in respect of such claim. The date of such delivery of an Officer’s Certificate is referred
to herein as the “Claim Date” of such Officer’s Certificate (and the claims for indemnification contained
therein). For purposes hereof, “Officer’s Certificate” means a certificate signed by any authorized representative
of an Indemnified Party (or, in the case of an Indemnified Party who is an individual, signed by such individual) stating that
an Indemnified Party has paid, sustained, incurred, or accrued, or reasonably anticipates that it will have to pay, sustain, incur
or accrue Losses and including, to the extent reasonably practicable, a non-binding, preliminary estimate of the amounts of such
Losses; provided, that the Officer’s Certificate need only specify such information to the knowledge of such officer
or such Indemnified Party as of the Claim Date, shall not limit any of the rights or remedies of any Indemnified Party, and may
be updated and amended from time to time by the Indemnified Party by delivering an updated or amended Officer’s Certificate
to the Stockholders or the Purchaser, as applicable.

 

(b)
Objecting to a Claim for Indemnification.

 

(i)
The Stockholders or the Purchaser, as applicable, may object, in whole or in part, to a claim for indemnification set forth in
an Officer’s Certificate by delivering to the Indemnified Party seeking indemnification a written statement of objection
to the claim made in the Officer’s Certificate (an “Objection Notice”); provided, that, to be
effective, such Objection Notice must (A) be delivered to the Indemnified Party pursuant to Section 10.1 prior to 5:00
p.m. Memphis, Tennessee time on the thirtieth (30th) day following the Claim Date of the Officer’s Certificate (such deadline,
the “Objection Deadline” for such Officer’s Certificate and the claims for indemnification contained
therein) and (B) set forth in reasonable detail the nature of the objections to the claim in respect of which the objection is
made.

 

(ii)
To the extent the Stockholders or Purchaser, as applicable, does not object in writing (as provided in Section 8.4(b)(i))
to the claims contained in an Officer’s Certificate prior to the Objection Deadline for such Officer’s Certificate,
such failure to so object shall be an irrevocable acknowledgment by the Stockholders or the Purchaser, as applicable, that the
Indemnified Party is entitled to the full amount of the claims for Losses set forth in such Officer’s Certificate (and such
entitlement shall be conclusively and irrefutably established) with respect to the applicable Indemnifying Parties (any such claim,
an “Unobjected Claim”). Within thirty (30) days of a claim becoming an Unobjected Claim, the Indemnifying Parties
shall make the applicable payment to such Indemnified Party, subject to Sections 8.4(f) and 8.5.

 

    	23

    	 

    

 

(c)
Resolution of Conflicts. In case the Stockholder or the Purchaser, as applicable, timely delivers an Objection Notice in
accordance with Section 8.4(c) hereof, the Stockholder or the Purchaser, as applicable, and the applicable Indemnified
Parties shall attempt in good faith to agree upon the rights of the respective parties with respect to each of such claims. If
the Stockholder or the Purchaser, as applicable, and the Indemnified Parties reach an agreement, a memorandum setting forth such
agreement shall be prepared and signed by all applicable parties (any claims covered by such an agreement, “Settled Claims”).
Any amounts required to be paid as a result of a Settled Claim shall be paid by the Indemnifying Party to the Indemnified Parties
pursuant to the Settled Claim within thirty (30) days of the applicable claim becoming a Settled Claim, subject to Sections
8.4(f) and 8.5. If the Stockholder or the Purchaser, as applicable, and the Indemnified Parties are unable to reach
an agreement, the matter specified in the Objection Notice shall be resolved pursuant to Section 10.8 (any claims resolved
pursuant thereto, “Resolved Claims”).

 

(d)
Payable and Unresolved Claims. A “Payable Claim” means a claim for indemnification of Losses under this
Article VIII, to the extent that such claim has not yet been satisfied, that is (i) a Resolved Claim, (ii) a Settled Claim,
or (iii) an Unobjected Claim. An “Unresolved Claim” means any claim for indemnification of Losses under this
Article VIII specified in any Officer’s Certificate delivered pursuant to Section 8.4(b), to the extent that
such claim is not a Payable Claim and has not been satisfied.

 

8.5
Third Party Claims. If the Purchaser becomes aware of a third party claim (a “Third Party Claim”) which
the Purchaser reasonably believes may result in a claim for indemnification by a Purchaser Indemnified Party pursuant to this
Article VIII, the Purchaser shall notify the Stockholders promptly of such claim, and the Stockholders shall be entitled,
at their expense, to participate in, but not to determine or conduct, the defense of such Third Party Claim. If there is a Third
Party Claim that, if adversely determined, would give rise to a right of recovery for Losses under the Agreement, then any amounts
incurred by the Purchaser Indemnified Parties in defense or settlement of such Third Party Claim, regardless of the outcome of
such claim, shall be deemed Losses under the Agreement. The Purchaser shall have the right in its sole discretion to conduct the
defense of, and to settle, any such claim and the Stockholders shall not have a right of approval or consent with respect to any
such Third Party Claim; provided, that except with the consent of the Stockholders (such consent not to be unreasonably
withheld, conditioned or delayed), no settlement of any such Third Party Claim with third party claimants shall be determinative
of the amount of Losses relating to such matter or otherwise admissible in any proceeding or used in any way to resolve any dispute
with respect to the amount of Losses.

 

If
the Stockholders becomes aware of a third party claim (a “Company Third Party Claim”) which they reasonably
believe may result in a claim for indemnification by the Stockholders pursuant to this Article VIII, the Stockholders shall
notify the Purchaser promptly of such claim, and the Stockholders shall be entitled, at his expense, to participate in, but not
to determine or conduct, the defense of such Company Third Party Claim. The Purchasers shall have the right in its sole discretion
to conduct the defense of, and to settle, any such claim and the Stockholders shall not have a right of approval or consent with
respect to any such Company Third Party Claim; provided, that except with the consent of the Stockholders (such consent
not to be unreasonably withheld, conditioned or delayed), no settlement of any such Company Third Party Claim with third party
claimants shall be determinative of the amount of Losses relating to such matter or otherwise admissible in any proceeding or
used in any way to resolve any dispute with respect to the amount of Losses.

 

8.6
Limitation on Indemnities. The indemnities in this Article VIII shall be in full force and effect for a period of 7 years
from the date hereof for Indemnifiable Matters involving tax liabilities as a result of federal, state and local taxes, for a
period of 10 years from the date of execution of any written contracts entered into by the Company and for 15 months from the
date hereof on all other Indemnifiable Matters.

 

    	24

    	 

    

 

ARTICLE
IX

 

AMENDMENT
AND WAIVER

 

9.1
Amendment. This Agreement may not be amended, except by an instrument in writing signed by the parties hereto.

 

9.2
Extension; Waiver. Any party hereto may, to the extent legally allowed, (a) extend the time for the performance of any
of the obligations of any other party hereto, (b) waive any inaccuracies in the representations and warranties made to such party
contained herein or in any document delivered pursuant hereto, and (c) waive compliance with any of the covenants, agreements
or conditions for the benefit of such party contained herein. Any agreement on the part of a party hereto to any such extension
or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. Any waiver of any term
or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition,
or a waiver of any other term or condition of this Agreement. No delay or failure by any party to assert any of its rights or
remedies shall constitute a waiver of such rights or remedies.

 

ARTICLE
XI

 

GENERAL
PROVISIONS

 

10.1
Notices. All notices and other communications hereunder shall be in writing and shall be deemed delivered, given and received
(a) when delivered in person, (b) when transmitted by email or facsimile (with written confirmation of completed transmission),
(c) on the third (3rd) Business Day following the mailing thereof by certified or registered mail (return receipt requested) or
(d) when delivered by an express courier (with written confirmation of delivery) to the parties hereto at the following addresses
(or to such other address or facsimile number as such party may have specified in a written notice given to the other parties):

 

(a)
if to the Purchaser or, following the Closing, the Company, to:

 

Surge
Holdings, Inc.

3124
Brother Blvd, Suite 104

Bartlett,
TN 38133

Attention:
Kevin Brian Cox

 

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

 

Lucosky
Brookman LLP

101
Wood Avenue South, 5th Floor

Woodbridge,
NJ 08830

Attention:
Joseph M. Lucosky, Esq.

 

(b)
if to the Stockholders, to:

 

Mr.
Dennis R. Winfrey and Ms. Peggy S. Winfrey

1943
East Nottingham

Springfield,
MO 65804

 

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

 

10.2
Expenses. Except as otherwise specified in this Agreement, all costs and expenses, including fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this Agreement and the Transactions shall be borne by
the party incurring such costs and expenses.

 

    	25

    	 

    

 

10.3 Interpretation.
Unless a clear contrary intention appears: (a) the singular number shall include the plural, and 0ice versa; (b) reference to
any gender includes each other gender; (c) reference to any agreement, document or instrument means such agreement, document
or instrument as amended or modified and in effect from time to time in accordance with the terms thereof; (d)
“include” and “including,” and variations thereof, shall not be deemed to be terms of limitation, but
rather shall be deemed to be followed by the words “without limitation”; (e) all references in this Agreement to
“Schedules,” “Sections,” “Annexes” and “Exhibits” are intended to refer to
Schedules, Sections, Annexes and Exhibits to this Agreement, except as otherwise indicated; (f) the table of contents and
headings in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement, and
shall not be referred to in connection with the construction or interpretation of this Agreement; (g) “or” is
used in the inclusive sense of “and/or”; (h) with respect to the determination of any period of time,
“from” means “from and including” and “to” means “to but excluding”; (i)
“hereunder,” “hereof,” “hereto,” and words of similar import shall be deemed references
to this Agreement as a whole and not to any particular Article, Section or other provision hereof; and (j)
“shall” and “will” shall have the same meaning hereunder.

 

10.4
Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the
same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered
to the other party, it being understood that all parties need not sign the same counterpart. Until and unless each party has received
a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or
obligation hereunder (whether by virtue of any other oral or written agreement or other communication). Any signature page delivered
electronically or by facsimile (including transmission by Portable Document Format or other fixed image form) shall be binding
to the same extent as an original signature page.

 

10.5
Entire Agreement; Assignment. This Agreement, the exhibits and annexes hereto, the Disclosure Schedule, the other schedules
: (a) constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements
and understandings both written and oral (including any letter of intent, term sheet or related discussions), among the parties
with respect to the subject matter hereof, and (b) shall not be assigned by operation of law or otherwise, except that the Purchaser
may assign its rights and delegate its obligations hereunder (i) after the Closing, in connection with a sale of the Purchaser
or a sale of all or substantially all of its assets, (ii) to one or more of its Affiliates as long as the Purchaser remains ultimately
liable for all of the Purchaser’s obligations hereunder and (iii) to any lender of the Purchaser or its Affiliates as collateral
security.

 

10.6
Severability. If any provision of this Agreement or the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and
the application of such provision to other Persons or circumstances will be interpreted so as reasonably to effect the intent
of the parties hereto. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid
and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or
unenforceable provision.

 

10.7
Other Remedies. Except as otherwise set forth herein, any and all remedies herein expressly conferred upon a party will
be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the
exercise by a party of any one remedy will not preclude the exercise of any other remedy. Without prejudice to remedies at law,
the parties shall be entitled to specific performance or other equitable relief, including injunctive relief, in the event of
a breach or threatened breach of this Agreement.

 

10.8
Arbitration; Submission to Jurisdiction; Consent to Service of Process.

 

(a)
all disputes, claims, or controversies arising out of or relating to the Agreement, the Ancillary Agreements (other than as expressly
set forth therein) or any other agreement or document executed and delivered pursuant to the Agreement (other than as expressly
set forth therein) or the negotiation, breach, validity or performance hereof and thereof or the Transactions, including claims
of fraud and including as well the determination of the scope or applicability of this agreement to arbitrate, shall be resolved
solely and exclusively by binding arbitration administered by JAMS in Missouri, before a single arbitrator (the “Arbitrator”).
Except as modified in this Section, the arbitration shall be administered pursuant to JAMS’s Comprehensive Rules and Procedures.
The parties further agree that this arbitration shall apply equally to requests for temporary, preliminary or permanent injunctive
relief, except that in the case of temporary or preliminary injunctive relief any party may proceed in court without prior arbitration
for the purpose of avoiding immediate and irreparable harm or to enforce its rights under Section 6.3 or Section 6.4.

 

    	26

    	 

    

 

(b)
The parties covenant and agree that the arbitration hearing shall commence within sixty (60) days of the date on which a written
demand for arbitration is filed by any party hereto (the “Filing Date”). The hearing shall be no more than
five (5) Business Days. In connection with the arbitration, the Arbitrator shall have the power to order the production of documents
by each party and any third-party witnesses. In addition, each party may take up to three (3) depositions as of right, with each
deposition limited to eight (8) hours, excluding breaks, and the Arbitrator may grant additional depositions upon good cause shown.
For purposes of determining the number of depositions as of right, multiple petitioners or multiple respondents shall each respectively
be deemed one party. The Arbitrator shall not have the power to order the answering of interrogatories or the response to requests
for admission. The Arbitrator’s award shall be made and delivered within sixty (60) days of the closing of the evidentiary
hearing on the merits (the “Hearing”) or within sixty (60) days of service of post-Hearing briefs, if the arbitrator
directs service of such briefs, shall be binding and final as between the parties, and a judgment may be entered upon the award
in any court having jurisdiction thereof. The Arbitrator’s decision shall set forth a reasoned basis for any award of damages
or finding of liability. The parties covenant and agree that the arbitration shall conclude within six (6) months of the Filing
Date, and the Arbitrator shall be provided notice of such six-month limit (and agreed to abide by it) prior to his or her appointment
as Arbitrator.

 

(c)
The parties shall maintain the confidential nature of the arbitration proceeding and any award thereunder, including the Hearing,
except as may be necessary to prepare for or conduct the arbitration hearing on the merits, or except as may be necessary in connection
with a court application for a preliminary remedy, a judicial challenge to an award or its enforcement, or unless otherwise required
by Law, judicial decision or applicable securities laws or under applicable stock exchange rules.

 

(d)
The parties will (i) bear their own attorneys’ fees, costs and expenses in connection with the arbitration, and (ii) share
equally in the fees and expenses charged by the Arbitrator; provided, that the prevailing party shall be awarded its share
of the Arbitrator’s fees and expenses and all other costs and expenses, including attorneys’, consultants’ and
experts’ fees; provided, further, that any party unsuccessfully refusing to comply with the award or an order
of the Arbitrator shall be liable for costs and expenses, including attorneys’, consultants’ and experts’ fees,
incurred by the other party in enforcing the award or order. If the Arbitrator determines a party to be the prevailing party under
circumstances where the prevailing party obtained relief on some but not all of the claims and counterclaims, the Arbitrator may
award the prevailing party an appropriate percentage of the costs and expenses incurred by the prevailing party.

 

(e)
Subject in all cases to the foregoing, each of the parties hereto irrevocably consents to the exclusive jurisdiction and venue
of the state or federal courts located within Missouri in connection with any matter based upon, arising out of or relating to
this Agreement or the matters contemplated herein, agrees that process may be served upon them in any manner authorized by the
laws of the State of Missouri for such Persons and waives and covenants not to assert or plead any objection which they might
otherwise have to such jurisdiction, venue and such process. Each party agrees not to commence any legal proceedings related hereto
except in such courts.

 

10.9
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Missouri,
regardless of the Laws that might otherwise govern under applicable principles of conflicts of laws thereof.

 

10.10
WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AND ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF
ANY PARTY HERETO IN NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

 

10.11
Rules of Construction. The parties hereto agree that they have been represented by counsel during the negotiation and execution
of this Agreement and, therefore, waive the application of any Law, regulation, holding or rule of construction providing that
ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

 

    	27

    	 

    

 

10.12
No Third Party Beneficiary. Notwithstanding anything contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any Person other than the parties hereto or their respective successors and assigns
any rights, remedies, or Liabilities under or by reason of this Agreement except that (i) Article VIII shall also be for
the benefit of the Indemnified Parties and (ii) Section 6.3 shall also be for the benefit of the Affiliates of the Purchaser
(which shall include, from and after the Closing, the Company).

 

10.13
Tax Advice. Other than as expressly set forth in this Agreement, no party to this Agreement makes any representations or
warranties to any other party regarding the Tax treatment of the Transactions pursuant to this Agreement or any of the Tax consequences
to any other party of this Agreement or the Transactions. Each party to this Agreement acknowledges that it is relying solely
on its own Tax advisors in connection with this Agreement and the Transactions.

 

10.14
Disclosure Schedule. The Disclosure Schedule shall be arranged in separate parts corresponding to the numbered and lettered
sections and subsections contained in this Agreement, and the information disclosed in any numbered or lettered part shall be
deemed to relate to and to qualify only the particular representation or warranty of any Seller Party set forth in the corresponding
numbered or lettered section or subsection of this Agreement, except to the extent that (a) such information is explicitly cross-referenced
in another part of the Disclosure Schedule, or (b) it is readily apparent on the face of the disclosure (without reference to
any document referred to therein) that such information qualifies another representation and warranty of any Seller Party in this
Agreement. Nothing in the Disclosure Schedule shall be deemed adequate to disclose an exception to a representation or warranty
of any Seller Party made in this Agreement, unless the applicable part of the Disclosure Schedule identifies the exception with
reasonable particularity and describes the relevant facts in reasonable detail. The mere listing of a document or other item in,
or attachment of a copy thereof to, the Disclosure Schedule will not be deemed adequate to disclose an exception to a representation
or warranty made in this Agreement (unless the representation or warranty pertains directly to the existence of the document or
other item itself).

 

[Remainder
of page intentionally left blank]

 

    	28

    	 

    

 

IN
WITNESS WHEREOF, the Purchaser, the Companies and the Stockholders have caused this Agreement to be signed, all as of the date
first written above.

 

	 	SURGE
    HOLDINGS, INC.
	 	 	 
	 	By:	 
	 	Name:	Kevin
    Brian Cox
	 	Title:	Chief
    Executive Officer

 

	 	ELECTRONIC
    CHECK SERVICES, INC.
	 	 	 
	 	By:	 
	 	Name:	Dennis
    R. Winfrey 
	 	Title:	Chairman

 

	 	CENTRAL
    STATES LEGAL SERVICES, INC.
	 	 	 
	 	By:	 
	 	Name:	Dennis
    R. Winfrey 
	 	Title:	Chairman

 

	 	 
	 	DENNIS
    R. WINFREY, individually

 

[Signature
Page – Stock Purchase Agreement]

 

    	29

    	 

    

 

	 	 
	 	PEGGY
    S. WINFREY, individually
	 	 
	 	 
	 	DERRON WINFREY, in his capacity as a control person of

Suray Holdings LLC solely with regard to Sections 2.1(c) and 2.1(e)

 

[Signature
Page – Stock Purchase Agreement]

 

    	30Exhibit 10.12

 

SECURITIES
PURCHASE AGREEMENT

 

This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of January 29, 2020, by and between SURGE HOLDINGS,
INC., a Nevada corporation, with headquarters located at 3124 Brother Blvd, Suite 104, Bartlett, TN 38133 (the “Company”),
and______________________________________________ , with its address at____________, (the “Buyer”).

 

WHEREAS:

 

A.
The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “1933 Act”);

 

B.
WHEREAS, subject to the terms and provisions hereinafter set forth and upon the terms and subject to the limitations and conditions
set forth in the Notes (as defined below), (i) the Buyer desires to purchase, the Company desires to sell and issue to the Buyer,
a promissory note in the form attached hereto as Exhibit A (the “First Note”) convertible into shares of common
stock, $0.001 par value per share, of the Company (the “Common Stock”)(the “First Closing”),
and (ii) the Buyer desires to purchase and the Company desires to sell and issue to the Buyer, one or more additional promissory
notes convertible into shares of Common Stock, each in the form attached hereto as Exhibit A (the “Additional Notes”
and together with the First Note, the “Notes”) as may mutually be agreed in additional closings as set forth
in Section 1(d) below (the “Additional Closings”) (each of the First Closing and the Additional Closings are sometimes
hereinafter individually referred to as a “Closing” and collectively as the “Closings” and
this Agreement any and all documents or instruments executed or to be executed by in connection with this Agreement, including
the Notes and the Irrevocable Transfer Agent Instructions, together with all modifications, amendments, extensions, future advances,
renewals, and substitutions thereof are sometimes hereinafter individually referred to as a “Transaction Document”
and collectively as the “Transaction Documents”); and

 

C.
WHEREAS, the aggregate principal amount of Notes sold pursuant to this Agreement shall not exceed an amount to be determined by
the Buyer.

 

NOW
THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:

 

1.
PURCHASE AND SALE OF NOTE.

 

a.
Purchase of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees
to purchase, at each Closing, and the Company agrees to sell and issue to the Buyer, at each Closing, a Note in the amount of
the purchase price applicable to each Closing as more specifically set forth below.

 

    	 

     

    

 

b.
First Closing. The First Closing of the purchase and sale of the First Note in a principal amount of United States Dollars
(US$ ) for a purchase price of United States Dollars (US$ ), shall take place on the Effective Date, subject to satisfaction of
the conditions to the First Closing set forth in this Agreement (the “First Closing Date”). Additional Closings
of the purchase and sale of the Notes shall be at such times and for such amounts as determined in accordance with Section 1(d)
below, subject to satisfaction of the conditions to the Additional Closings set forth in this Agreement (the “Additional
Closing Dates”, collectively, with the First Closing Date, referred to as the “Closing Dates”). The
Closings shall occur on the respective Closing Dates through the use of overnight mails and subject to customary escrow instructions
from the Buyer and its counsel, or in such other manner as is mutually agreed to by the Company and the Buyer.

 

c.
Form of Payment. On each Closing Date, (i) the Buyer shall pay the purchase price set forth on the face thereof for the
Note to be issued and sold to it at such Closing (the “Purchase Price”) by wire transfer of immediately available
funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of such Note in the
principal amount set forth on the face thereof, and (ii) the Company shall deliver such duly executed Note on behalf of the Company,
to the Buyer, against delivery of such Purchase Price.

 

d.
Additional Closings. At any time after the First Closing but prior to the maturity date of the Note issued in the First
Closing, the Buyer may demand that the Company issue an additional Note hereunder in an additional Closing under the same terms
and conditions as the First Note by delivering written notice to the Company and the Company shall issue such additional Notes
to the Buyer.

 

2.
REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents and warrants to the Company that:

 

a.
Investment Purpose. As of the date hereof, the Buyer is purchasing the Notes and the shares of Common Stock issuable upon
conversion of or otherwise pursuant to the Notes (including, without limitation, such additional shares of Common Stock, if any,
as are issuable (i) on account of interest on the Notes (ii) as a result of the events described in Sections 1.3 and 1.4(g) of
each Note or (iii) in payment of the Standard Liquidated Damages Amount (as defined in Section 2(f) below) pursuant to this Agreement,
such shares of Common Stock being collectively referred to herein as the “Conversion Shares” and, collectively with
the Notes and the Inducement Shares, the “Securities”) for its own account and not with a present view towards the
public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided,
however, that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum
or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration
statement or an exemption under the 1933 Act.

 

    	2

     

    

 

b.
Accredited Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of
Regulation D (an “Accredited Investor”).

 

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

 

d.
Information. The Buyer and its advisors, if any, have been, and for so long as any Note remains outstanding will continue
to be, furnished with all materials relating to the business, finances and operations of the Company and materials relating to
the offer and sale of the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any,
have been, and for so long as any Note remains outstanding will continue to be, afforded the opportunity to ask questions of the
Company. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will
not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure
to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives
shall modify, amend or affect Buyer’s right to rely on the Company’s representations and warranties contained in Section
3 below. The Buyer understands that its investment in the Securities involves a significant degree of risk. The Buyer is not aware
of any facts that may constitute a breach of any of the Company’s representations and warranties made herein.

 

e.
Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental
agency has passed upon or made any recommendation or endorsement of the Securities.

 

f.
Transfer or Re-sale. The Buyer understands that (i) the sale or re-sale of the Securities has not been and is not being
registered under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the
Securities are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to
the Company, at the cost of the Company, an opinion of counsel that shall be in form, substance and scope customary for opinions
of counsel in comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant
to an exemption from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred
to an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”))
of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited
Investor, (d) the Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the
1933 Act (or a successor rule) (“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of
the Company, not to exceed $500 per opinion, an opinion of counsel that shall be in form, substance and scope customary for opinions
of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such Securities made in
reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any
re-sale 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 defined 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) neither the Company nor any other person is under any obligation
to register such Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any
exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities
may be pledged as collateral in connection with a bona fide margin account or other lending arrangement. In the event that
the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to
an exemption from registration, such as Rule 144 or Regulation S, within three (3) business days of delivery of the opinion to
the Company, the Company shall pay to the Buyer liquidated damages of three and one half percent (3.5%) of the outstanding amount
of applicable Note per day plus accrued and unpaid interest on such Note, prorated for partial months, in cash or shares at the
option of the Buyer (“Standard Liquidated Damages Amount”). If the Buyer elects to be pay the Standard Liquidated
Damages Amount in shares of Common Stock, such shares shall be issued at the Conversion Price (as defined in the Note) at the
time of payment.

 

    	3

     

    

 

g.
Legends. The Buyer understands that each Note and, until such time as the Conversion Shares have been registered under
the 1933 Act may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular
date that can then be immediately sold, the Conversion Shares may bear a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of the shares of Common Stock for such Securities):

 

“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

 

The
legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any
Security upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is
registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to
Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be
immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary
for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Security may be made
without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is
effected. The Buyer agrees to sell all Securities, including those represented by a certificate(s) from which the legend has
been removed, in compliance with applicable prospectus delivery requirements, if any. In the event that the Company does not
accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from
registration, such as Rule 144 or Regulation S, at the Deadline (as such term is defined in Section 1.4(d) of the Note), it
will be considered an Event of Default pursuant to Section 3.2 of the Note. The shares of Common Stock issued hereunder shall
be issued in book entry and transferred electronically via DTC DWAC and shall only be issued in certificate form at the
discretion of the Buyer.

 

h.
Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed
and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in
accordance with its terms.

 

i.
Residency. The Buyer is organized in the jurisdiction set forth in the Preamble of this Agreement.

 

    	4

     

    

 

3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants to the Buyer, as of the date of the
execution and delivery of this Agreement and as of the date of each Closing hereunder, and which shall survive the execution and
delivery of this Agreement:

 

a.
Organization and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly
organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power
and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now
owned, leased, used, operated and conducted. The Company and each of its Subsidiaries is duly qualified as a foreign corporation
to do business and is in good standing in every jurisdiction in which its ownership or use of property or the nature of the business
conducted by it makes such qualification necessary except where the failure to be so qualified or in good standing would not have
a Material Adverse Effect. “Material Adverse Effect” means any material adverse effect on the business, operations,
assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions
contemplated hereby or by the agreements or instruments to be entered into in connection herewith. “Subsidiaries”
means any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly,
any equity or other ownership interest.

 

b.
Authorization; Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this
Agreement, the Notes and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance
with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Notes by the Company and the consummation
by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance
and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized
by the Company’s Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its
shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company by its authorized representative,
and such authorized representative is the true and official representative with authority to sign this Agreement and the other
documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution
and delivery by the Company of each Note, each of such instruments will constitute, a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.

 

c.
Capitalization. As of January 2, 2020, as disclosed in the SEC Documents, the authorized capital stock of the Company consists
of 500,000,000 shares of Common Stock, of which 101,158,316 shares are issued and outstanding, 100,000,000 shares of Series A
preferred stock, of which 13,000,000 shares are issued and outstanding, and 1,000,000 shares of Series C convertible preferred
stock of which, 721,598 are issued and outstanding. Except as disclosed in the SEC Documents, no shares are reserved for issuance
pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (other than the
Notes) exercisable for, or convertible into or exchangeable for shares of Common Stock and immediately upon the Company increasing
its authorized shares of Common Stock the Company shall reserve 4,050,000 shares for issuance upon conversion of the Notes. All
of such outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable.
No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of
the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. Except as disclosed in
the SEC Documents, as of the effective date of this Agreement, (i) there are no outstanding options, warrants, scrip, rights to
subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any
character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of
the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound
to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or arrangements
under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the
1933 Act and (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or
in any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares.
The Company has filed in its SEC Documents true and correct copies of the Company’s Certificate of Incorporation as in effect
on the date hereof (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof
(the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company and
the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this
representation signed by the Company’s Chief Executive on behalf of the Company as of each Closing Date.

 

    	5

     

    

 

d.
Issuance of Shares. The issuance of each Note is duly authorized and, upon issuance in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, taxes, liens,
charges and other encumbrances with respect to the issue thereof. The Conversion Shares are duly authorized and reserved for issuance
and, upon conversion of each Note in accordance with its respective terms, will be validly issued, fully paid and non-assessable,
and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive
rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.

 

e.
Acknowledgment of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock
upon the issuance of the Conversion Shares upon conversion of each Note. The Company further acknowledges that its obligation
to issue Conversion Shares upon conversion of each Note in accordance with this Agreement, the Note is absolute and unconditional
regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

 

f.
No Conflicts. The execution, delivery and performance of this Agreement and the Notes by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation
for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate
of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default
(or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company
or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the
Company or its securities are subject) applicable to the Company or any of its Subsidiaries or by which any property or asset
of the Company or any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). Neither
the Company nor any of its Subsidiaries is in violation of its Certificate of Incorporation, By- laws or other organizational
documents and neither the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse
of time or both could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries
has taken any action or failed to take any action that would give to others any rights of termination, amendment, acceleration
or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or by which
any property or assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not,
individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any,
are not being conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law,
ordinance or regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required under
the 1933 Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order
of, or make any filing or registration with, any court, governmental agency, regulatory agency, self-regulatory organization or
stock market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement, the
Note in accordance with the terms hereof or thereof or to issue and sell the Note in accordance with the terms hereof and to issue
the Conversion Shares upon conversion of the Note. All consents, authorizations, orders, filings and registrations which the Company
is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. The Company
is not in violation of the listing requirements of the Over- the-Counter Bulletin Board (the “OTCBB”), the OTCQB or
any similar quotation system, and does not reasonably anticipate that the Common Stock will be delisted by the OTCBB, the OTCQB
or any similar quotation system, in the foreseeable future nor are the Company’s securities “chilled” by DTC.
The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

 

    	6

     

    

 

g.
SEC Documents; Financial Statements. The Company has timely filed all quarterly and annual reports required to be filed
by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934
Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and
schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter referred
to herein as the “SEC Documents”). The Company has delivered to the Buyer true and complete copies of the SEC Documents,
except for such exhibits and incorporated documents, and except as such Documents are available EDGAR filings on the SEC’s
sec.gov website. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the
1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which
they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to be amended
or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior the date
hereof). As of their respective dates, the financial statements of the Company included in the 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 United States generally accepted accounting principles,
consistently applied, during the periods involved and fairly present in all material respects the consolidated financial position
of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and
cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Except
as set forth in the financial statements of the Company included in the SEC Documents, the Company has no liabilities, contingent
or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to December 31, 2019, and (ii)
obligations under contracts and commitments incurred in the ordinary course of business and not required under generally accepted
accounting principles to be reflected in such financial statements, which, individually or in the aggregate, are not material
to the financial condition or operating results of the Company. The Company is subject to the reporting requirements of the 1934
Act. For the avoidance of doubt, filing of the documents required in this Section 3(g) via the SEC’s Electronic Data Gathering,
Analysis, and Retrieval system (“EDGAR”) shall satisfy all delivery requirements of this Section 3(g).

 

h.
Absence of Certain Changes. Since December 31, 2019, there has been no material adverse change and no material adverse
development in the assets, liabilities, business, properties, operations, financial condition, results of operations, prospects
or 1934 Act reporting status of the Company or any of its Subsidiaries.

 

i.
Absence of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public
board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries,
threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such,
that could have a Material Adverse Effect. Schedule 3(i) contains a complete list and summary description of any pending or, to
the knowledge of the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without regard
to whether it would have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing.

 

    	7

     

    

 

j.
Patents, Copyrights, etc. The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to
use all patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications,
service marks, service names, trade names and copyrights (“Intellectual Property”) necessary to enable it to conduct
its business as now operated (and, as presently contemplated to be operated in the future). Except as disclosed in the SEC Documents,
there is no claim or action by any person pertaining to, or proceeding pending, or to the Company’s knowledge threatened,
which challenges the right of the Company or of a Subsidiary with respect to any Intellectual Property necessary to enable it
to conduct its business as now operated (and, as presently contemplated to be operated in the future); to the best of the Company’s
knowledge, the Company’s or its Subsidiaries’ current and intended products, services and processes do not infringe
on any Intellectual Property or other rights held by any person; and the Company is unaware of any facts or circumstances which
might give rise to any of the foregoing. The Company and each of its Subsidiaries have taken reasonable security measures to protect
the secrecy, confidentiality and value of their Intellectual Property.

 

k.
No Materially Adverse Contracts, Etc. Neither the Company nor any of its Subsidiaries is subject to any charter, corporate
or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers
has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party
to any contract or agreement which in the judgment of the Company’s officers has or is expected to have a Material Adverse
Effect.

 

l.
Tax Status. The Company and each of its Subsidiaries has made or filed all federal, state and foreign income and all other
tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that
the Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid
and unreported taxes) and has paid all taxes and other governmental assessments and charges that are material in amount, shown
or determined to be due on such returns, reports and declarations, except those being contested in good faith and has set aside
on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns,
reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company know of no basis for any such claim. The Company has not executed a waiver with
respect to the statute of limitations relating to the assessment or collection of any foreign, federal, state or local tax. None
of the Company’s tax returns is presently being audited by any taxing authority.

 

m.
Certain Transactions. Except for arm’s length transactions pursuant to which the Company or any of its Subsidiaries
makes payments in the ordinary course of business upon terms no less favorable than the Company or any of its Subsidiaries could
obtain from third parties and other than the grant of stock options disclosed on Schedule 3(c), none of the officers, directors,
or employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (other than for
services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing
of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from
any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity
in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

 

    	8

     

    

 

n.
Disclosure. All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement
and provided to the Buyer pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby
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 herein or therein, 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 any of its Subsidiaries or its or their business, properties,
prospects, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s
reports filed under the 1934 Act are being incorporated into an effective registration statement filed by the Company under the
1933 Act).

 

o.
Acknowledgment Regarding Buyer’ Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting
solely in the capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby.
The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of
its respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice
or a recommendation and is merely incidental to the Buyer’ purchase of the Securities. The Company further represents to
the Buyer that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of
the Company and its representatives.

 

p.
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 offers or sales in any security or solicited any offers to buy any security under circumstances
that would require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities
to the Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes
of any shareholder approval provisions applicable to the Company or its securities.

 

q.
No Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions,
transaction fees or similar payments relating to this Agreement or the transactions contemplated hereby.

 

    	9

     

    

 

r.
Permits; Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and
operate its properties and to carry on its business as it is now being conducted (collectively, the “Company Permits”),
and there is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of
the Company Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of
the Company Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. Since December 31, 2019, neither the Company nor any of its Subsidiaries
has received any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices
relating to possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse
Effect.

 

s.
Environmental Matters.

 

(i)
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.

 

(ii)
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.

 

    	10

     

    

 

(iii)
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.

 

t.
Title to Property. Except as disclosed in the SEC Documents the Company and its Subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all personal property owned by them which is material to the
business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects or such as would
not have a Material Adverse Effect. Any real property and facilities held under lease by the Company and its Subsidiaries are
held by them under valid, subsisting and enforceable leases with such exceptions as would not have a Material Adverse Effect.

 

u.
Internal Accounting Controls. Except as disclosed in the SEC Documents the Company and each of its Subsidiaries maintain
a system of internal accounting controls sufficient, in the judgment of the Company’s board of directors, to provide reasonable
assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles
and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.

 

v.
Foreign Corrupt Practices. Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee
or other person acting on behalf of the Company or any Subsidiary has, in the course of his actions for, or on behalf of, the
Company, used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political
activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate
funds; violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or
employee.

 

w.
Solvency. The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e.,
its assets have a fair market value in excess of the amount required to pay its probable liabilities on its existing debts as
they become absolute and matured) and currently the Company has no information that would lead it to reasonably conclude that
the Company would not, after giving effect to the transaction contemplated by this Agreement, have the ability to, nor does it
intend to take any action that would impair its ability to, pay its debts from time to time incurred in connection therewith as
such debts mature. The Company did not receive a qualified opinion from its auditors with respect to its most recent fiscal year
end and, after giving effect to the transactions contemplated by this Agreement, does not anticipate or know of any basis upon
which its auditors might issue a qualified opinion in respect of its current fiscal year. For the avoidance of doubt any disclosure
of the Company’s ability to continue as a “going concern” shall not, by itself, be a violation of this Section
3(w).

 

    	11

     

    

 

x.
No Investment Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement
will not be an “investment company” required to be registered under the Investment Company Act of 1940 (an “Investment
Company”). The Company is not controlled by an Investment Company.

 

y.
Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses
in which the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has any reason to believe that
it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect. Upon written
request the Company will provide to the Buyer true and correct copies of all policies relating to directors’ and officers’
liability coverage, errors and omissions coverage, and commercial general liability coverage.

 

z.
Bad Actor. No officer or director of the Company would be disqualified under Rule 506(d) of the Securities Act as amended
on the basis of being a “bad actor” as that term is established in the September 19, 2013 Small Entity Compliance
Guide published by the SEC.

 

aa.
Shell Status. The Company represents that it is not a “shell” issuer and has never been a “shell”
issuer, or that if it previously has been a “shell” issuer, that at least twelve (12) months have passed since the
Company has reported Form 10 type information indicating that it is no longer a “shell” issuer. Further, the Company
will instruct its counsel to either (i) write a 144- 3(a)(9) opinion to allow for salability of the Conversion Shares or (ii)
accept such opinion from the Buyer’s counsel.

 

bb.
No-Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any
of its Subsidiaries and an unconsolidated or other off-balance sheet entity that is required to be disclosed by the Company in
its 1934 Act filings and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.

 

cc.
Manipulation of Price. The Company has not, and to its knowledge no one acting on its behalf has: (i) taken, directly or
indirectly, any action designed to cause or to result, or that could reasonably be expected to cause or result, in the stabilization
or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold,
bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay
to any person any compensation for soliciting another to purchase any other securities of the Company.

 

    	12

     

    

 

dd.
Sarbanes-Oxley Act. The Company and each Subsidiary is in material compliance with all applicable requirements of the Sarbanes-Oxley
Act of 2002 that are effective as of the date hereof, and all applicable rules and regulations promulgated by the SEC thereunder
that are effective as of the date hereof.

 

ee.
Employee Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or
employs any member of a union. The Company believes that its and its Subsidiaries’ relations with their respective employees
are good. No executive officer (as defined in Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company
or any of its Subsidiaries has notified the Company or any such Subsidiary that such officer intends to leave the Company or any
such Subsidiary or otherwise terminate such officer’s employment with the Company or any such Subsidiary. To the knowledge
of the Company, no executive officer or other key employee of the Company or any of its Subsidiaries is, or is now expected to
be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other contract or agreement or any restrictive covenant, and the continued employment of each
such executive officer or other key employee (as the case may be) does not subject the Company or any of its Subsidiaries to any
liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all federal, state,
local and foreign laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions
of employment and wages and hours, except where failure to be in compliance would not, either individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.

 

ff.
Breach of Representations and Warranties by the Company. The Company agrees that if the Company breaches any of the representations
or warranties set forth in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement
and it being considered an Event of Default under Section 3.5 of the Note, the Company shall pay to the Buyer the Standard Liquidated
Damages Amount in cash or in shares of Common Stock at the option of the Company, until such breach is cured. If the Company elects
to pay the Standard Liquidated Damages Amounts in shares of Common Stock, such shares shall be issued at the Conversion Price
at the time of payment.

 

4.
COVENANTS.

 

a.
Best Efforts. The parties shall use their commercially reasonable best efforts to satisfy timely each of the conditions
described in Section 5 and 6 of this Agreement.

 

b.
Form D; Blue Sky Laws. 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. The Company shall, on or before each Closing Date, take
such action as the Company shall reasonably determine is necessary to qualify the Securities for sale to the Buyer at the applicable
closing pursuant to this Agreement under applicable securities or “blue sky” laws of the states of the United States
(or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyer on or
prior to such Closing Date.

 

    	13

     

    

 

c.
Use of Proceeds. The Company shall use the proceeds from the sale of the Notes for working capital and other general corporate
purposes and shall not, directly or indirectly, use such proceeds for any loan to or investment in any other corporation, partnership,
enterprise or other person (except in connection with its currently existing direct or indirect Subsidiaries) or to repay any
indebtedness owing under any securities of the Company issued after October 7, 2019.

 

d.
Financial Information. The Company agrees to send or make available the following reports to the Buyer until the Buyer
transfers, assigns, or sells all of the Securities: (i) within ten (10) days after the filing with the SEC, a copy of its Annual
Report on Form 10-K its Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K; (ii) within one (1) day after release,
copies of all press releases issued by the Company or any of its Subsidiaries; and (iii) contemporaneously with the making available
or giving to the shareholders of the Company, copies of any notices or other information the Company makes available or gives
to such shareholders. For the avoidance of doubt, filing the documents required in (i) above via EDGAR or releasing any documents
set forth in (ii) above via a recognized wire service shall satisfy the delivery requirements of this Section 4(e).

 

e.
Listing; Uplisting. The Company shall promptly secure the listing of the Conversion Shares upon each national securities
exchange or automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice
of issuance) and, so long as the Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock
shall be so listed, such listing of all Conversion Shares from time to time issuable upon conversion of the Note. The Company
will obtain and, so long as the Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on the
OTCBB, OTCQB, OTC Pink or any equivalent replacement exchange, the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap
Market (“Nasdaq SmallCap”), the New York Stock Exchange (“NYSE”), or the NYSE MKT and will comply in all
respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Financial Industry
Regulatory Authority (“FINRA”) and such exchanges, as applicable. The Company shall promptly provide to the Buyer
copies of any material notices it receives from the OTCBB, OTCQB and any other exchanges or quotation systems on which the Common
Stock is then listed regarding the continued eligibility of the Common Stock for listing on such exchanges and quotation systems.
Within six months of the Effective Date, the Company shall will obtain the listing and trading of its Common Stock on an exchange
senior to the exchange on which the Common Stock is listed and traded as of the Effective Date. The Company shall pay any and
all fees and expenses in connection with satisfying its obligation under this Section 4(f).

 

    	14

     

    

 

f.
Corporate Existence. So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence
and shall not sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation or
sale of all or substantially all of the Company’s assets, where the surviving or successor entity in such transaction (i)
assumes the Company’s obligations hereunder and under the agreements and instruments entered into in connection herewith
and (ii) is a publicly traded corporation whose Common Stock is listed for trading on the OTCBB, OTCQB, OTC Pink, Nasdaq, NasdaqSmallCap,
NYSE or AMEX.

 

g.
No Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances
that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of
the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval
provision applicable to the Company or its securities.

 

h.
Failure to Comply with the 1934 Act. So long as the Buyer beneficially owns any Note, the Company shall comply with the
quarterly and annual reporting requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements
of the 1934 Act.

 

i.
Trading Activities. Neither the Buyer nor its affiliates has an open short position (or other hedging or similar transactions)
in the Common Stock of the Company and the Buyer agree that it shall not, and that it will cause its affiliates not to, engage
in any short sales of or hedging transactions with respect to the Common Stock of the Company.

 

j.
Restriction on Activities. Commencing as of the date first above written, and until the sooner of the six month anniversary
of the date first written above or payment of the Note in full, or full conversion of the Note, the Company shall not, directly
or indirectly, without the Buyer’s prior written consent, which consent shall not be unreasonably withheld: (a) change the
nature of its business; or (b) sell, divest, acquire, change the structure of any material assets other than in the ordinary course
of business.

 

k.
Par Value. If the closing bid price at any time a Note is outstanding falls below $0.001 for five (5) consecutive days, the Company
shall cause the par value of its Common Stock to be reduced to $0.0001 or less.

 

l.
Breach of Covenants. The Company agrees that if the Company breaches any of the covenants set forth in this Section 4,
and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of Default
under Section 3.4 of the Notes, the Company shall pay to the Buyer the Standard Liquidated Damages Amount in cash or in shares
of Common Stock at the option of the Buyer, until such breach is cured, or with respect to Section 4(d) above, the Company shall
pay to the Buyer the Standard Liquidated Damages Amount in cash or shares of Common Stock, at the option of the Buyer, upon each
violation of such provision. If the Company elects to pay the Standard Liquidated Damages Amounts in shares of Common Stock, such
shares shall be issued at the Conversion Price at the time of payment.

 

    	15

     

    

 

m.
Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent to issue certificates,
registered in the name of the Buyer or its nominee, for the Conversion Shares in such amounts as specified from time to time by
the Buyer to the Company upon conversion of the Notes in accordance with the terms thereof (the “Irrevocable Transfer Agent
Instructions”). In the event that the Company proposes to replace its transfer agent, the Company shall provide, prior to
the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered
pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in
the Reserved Amount) signed by the successor transfer agent to Company and the Company. Prior to registration of the Conversion
Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction
as to the number of Securities as of a particular date that can then be immediately sold, all such certificates shall bear the
restrictive legend specified in Section 2(g) of this Agreement. The Company warrants that: (i) no instruction other than the Irrevocable
Transfer Agent Instructions referred to in this Section, and stop transfer instructions to give effect to Section 2(f) hereof
(in the case of the Conversion Shares, prior to registration of the Conversion Shares under the 1933 Act or the date on which
the Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular
date that can then be immediately sold), will be given by the Company to its transfer agent and that the Securities shall otherwise
be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the Note; (ii)
it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing)
(electronically or in certificated form) any certificate for Conversion Shares to be issued to the Buyer upon conversion of or
otherwise pursuant to the Notes as and when required by the Notes and this Agreement; and (iii) it will not fail to remove (or
directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive
legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares issued
to the Buyer upon conversion of or otherwise pursuant to the Notes as and when required by the Note and this Agreement. Nothing
in this Section shall affect in any way the Buyer’s obligations and agreement set forth in Section 2 (g) hereof to comply
with all applicable prospectus delivery requirements, if any, upon re-sale of the Securities. If the Buyer provides the Company,
at the cost of the Company not to exceed $500, with (i) an opinion of counsel in form, substance and scope customary for opinions
in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without registration under
the 1933 Act and such sale or transfer is effected or (ii) the Buyer provides reasonable assurances that the Securities can be
sold pursuant to Rule 144, the Company shall permit the transfer, and, in the case of the Conversion Shares, promptly instruct
its transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as
specified by the Buyer. Additionally, upon request by the Buyer to the Transfer Agent with notice to the Company, the Transfer
Agent shall deliver to the Buyer reports reflecting issued and outstanding shares of the Company, and the lowest cost basis for
share issuances of the Company. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges
that the remedy at law for a breach of its obligations under this Section may be inadequate and agrees, in the event of a breach
or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach and requiring immediate transfer, without the necessity of showing
economic loss and without any bond or other security being required. Upon

 

    	16

     

    

 

n.
Transaction Expense Amount and Original Issue Discount. Upon the First Closing, the Company shall pay US$2,500.00 to the
Buyer’s legal counsel for preparation of the Transaction Documents (the “Transaction Expense Amount”). The Transaction
Expense Amount shall be offset against the proceeds of the First Note and shall be paid to the Buyer’s legal counsel upon
the execution hereof. Additionally, the Company shall pay US$13,333.34 to the Buyer as an original issue discount (the “OID”).”)
in respect of the First Note. The OID shall be added to the Principal Amount of the Note and accordingly the Principal Amount
of the First Note is US$180,000.00.

 

o.
Issuance of Shares of Common Stock; True-Up Shares.

 

(i)
As additional consideration for the Buyer loaning the Purchase Price to the Company, the Company shall issue to the Buyer, or
designees of the Buyer, 250,000 shares of Common Stock of the Company (the “Initial Share Issuance”). The Initial
Share Issuance shall be issued and delivered to the Buyer on the Closing Date.

 

(ii)
Commencing on the date that is six (6) months plus one (1) day from the Issue Date (the “True-Up Exercise Date”),
in the event the Common Stock was on the preceding ten (10) Trading Day period less than $0.35 per share, Buyer shall have the
right to deliver a notice to the Company in the form of Exhibit B hereto (the “True-Up Notice”), notifying the Company
of its obligation to deliver the True-Up Amount (as defined below) to the Buyer. On the True-Up Exercise Date the Buyer shall
deliver the True-Up Notice to the Company and the Company shall within two (2) business days of the Buyer’s delivery of
the True Up Notice, issue to the Buyer additional shares of Common Stock equal to the True-Up Amount (as defined below). The “True-Up
Amount” shall mean an amount equal to (a) $0.35 minus (b) the lowest one day VWAP for the Common Stock during the ten (10)
Trading Day period ending on the latest complete Trading Day prior to the True-Up Exercise Date (the “True-Up Exercise Price”)
multiplied by (c) 250,000 divided by (d) the True-Up Exercise Price. The shares of Common Stock comprising the True-Up Amount
shall be referred to herein as the “True-Up Shares”. The Initial Share Issuance and the True-Up Shares shall collectively,
in the aggregate, be referred to herein as the “Inducement Shares”. Accordingly, the True-Up Shares, if required to
be issued pursuant to this Agreement, shall be issued in accordance with such beneficial ownership limitations, and in successive
tranches if required to comply with such beneficial ownership limitations (each an “Additional Tranche”). The Company
shall issue each Additional Tranche within two (2) business days of the request by Buyer. Additionally, in the event of a reverse
stock split by the Company any fractional shares held by the Buyer shall be rounded up to the nearest whole share.

 

    	17

     

    

 

5.
CONDITIONS PRECEDENT TO THE COMPANY’S OBLIGATIONS TO SELL. The obligation of the Company hereunder to issue and sell
a Note to the Buyer at a Closing is subject to the satisfaction, at or before each Closing Date of each of the following conditions
thereto, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time
in its sole discretion:

 

a.
The Buyer shall have executed this Agreement and delivered the same to the Company.

 

b.
The Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.

 

c.
The representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and
as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date),
and the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.

 

d.
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self- regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this
Agreement.

 

6.
CONDITIONS PRECEDENT TO THE BUYER’S OBLIGATION TO PURCHASE.

 

a.
The obligation of the Buyer hereunder to purchase the First Note at the First Closing is subject to the satisfaction, at or before
the First Closing Date of each of the following conditions, provided that these conditions are for the Buyer’s sole benefit
and may be waived by the Buyer at any time in its sole discretion:

 

(i)
The Company shall have executed this Agreement, effectuated the Issuance, and delivered the Agreement and Issuance to the Buyer.

 

(ii)
The Board of Directors of the Company shall have approved by Unanimous Written Consent (the “Consent”) the Issuance
and transactions contemplated by this Agreement and the First Note and the Company shall have delivered a copy of such fully executed
Consent to the Buyer.

 

    	18

     

    

 

(iii)
The Company shall have delivered to the Buyer the duly executed First Note (in such denominations as the Buyer shall request)
and in accordance with Section 1(b) above.

 

(iv)
The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to the Buyer, shall have been delivered to and
acknowledged in writing by the Company’s Transfer Agent and such fully executed Irrevocable Transfer Agent Instructions
shall have been delivered to the Buyer.

 

(v)
The representations and warranties of the Company shall be true and correct in all material respects as of the date when made
and as of the First Closing Date as though made at such time (except for representations and warranties that speak as of a specific
date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the First Closing
Date. The Buyer shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated
as of the First Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyer
including, but not limited to certificates with respect to the Company’s Certificate of Incorporation, By-laws and Board
of Directors’ resolutions relating to the transactions contemplated hereby.

 

(vi)
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this
Agreement.

 

(vii)
No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but
not limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934
Act reporting obligations.

 

(viii)
The Conversion Shares shall have been authorized for quotation on the OTCBB, OTCQB, OTC Pink or any similar quotation system and
trading in the Common Stock on the OTCBB, OTCQB or any similar quotation system shall not have been suspended by the SEC or the
OTCBB, OTCQB, OTC Pink or any similar quotation system.

 

    	19

     

    

 

(ix)
The Buyer shall have received the Initial Inducement Shares and an officer’s certificate described in Section 3(c) above,
dated as of the First Closing Date.

 

b.
The obligation of the Buyer hereunder to purchase Additional Notes at any Additional Closing is subject to the satisfaction, at
or before applicable Additional Closing Date of each of the following conditions, provided that these conditions are for the Buyer’s
sole benefit and may be waived by the Buyer at any time in its sole discretion:

 

(i)
The Company shall have executed the Transaction Documents applicable to the Additional Closing and delivered copies of the same
to the Buyer.

 

(ii)
The representations and warranties of the Company shall be true and correct in all material respects (except to the extent that
any of such representations and warranties are already qualified as to materiality in Section 2 above, in which case, such representations
and warranties shall be true and correct in all respects without further qualification) as of the date when made and as of the
Additional Closing Date as though made at that time (except for representations and warranties that speak as of a specific date)
and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Additional Closing Date.

 

(iii)
No event shall have occurred which could reasonably be expected to have a Material Adverse Effect.

 

(iv)
No default or Event of Default shall have occurred and be continuing under this Agreement or any other Transaction Documents,
and no event shall have occurred that, with the passage of time, the giving of notice, or both, would constitute a default or
an Event of Default under this Agreement or any other Transaction Documents.

 

(v)
The Company shall have executed such other agreements, certificates, confirmations or resolutions as the Buyer may require to
consummate the transactions contemplated by this Agreement and the Transaction Documents.

 

    	20

     

    

 

7.
GOVERNING LAW; MISCELLANEOUS.

 

a.
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without
regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Agreement, the Notes or any other agreement, certificate, instrument or document contemplated hereby shall be brought
only in the state courts of New York or in the federal courts in the State of New York. The parties to this Agreement hereby irrevocably
waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack
of jurisdiction or venue or based upon forum non conveniens. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE
TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT
OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY
OR THEREBY. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and
costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or
unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may
prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.
Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding
in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

b.
Counterparts; Signatures by Facsimile. This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts
have been signed by each party and delivered to the other party. This Agreement, once executed by a party, may be delivered to
the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering
this Agreement.

 

c.
Construction; Headings. This Agreement shall be deemed to be jointly drafted by the Company and the Buyer and shall not
be construed against any person as the drafter hereof. The headings of this Agreement are for convenience of reference only and
shall not form part of, or affect the interpretation of, this Agreement.

 

d.
Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute
or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any
law shall not affect the validity or enforceability of any other provision hereof.

 

e.
Entire Agreement; Amendments. This Agreement, the Notes and the instruments referenced herein contain the entire understanding
of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein,
neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No
provision of this Agreement may be waived or amended other than by an instrument in writing signed by the Buyer.

 

    	21

     

    

 

f.
Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder
shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered
or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid,
or (iv) transmitted by hand delivery, telegram, email, or facsimile, addressed as set forth below or to such other address as
such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be
given hereunder shall be deemed effective (a) upon hand delivery or delivery by email or facsimile, with accurate confirmation
generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during
normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other
than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following
the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications shall be:

 

If
to the Company, to:

 

Surge
Holdings, Inc.

3124
Brother Blvd

Suite
104

Bartlett,
Tennessee 38133

 

If
to the Buyer, to:

 

Each
party shall provide notice to the other party of any change in address.

 

g.
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the
prior written consent of the other. Notwithstanding the foregoing, subject to Section 2(f), the Buyer may assign its rights hereunder
to any person that purchases Securities in a private transaction from the Buyer or to any of its “affiliates,” as
that term is defined under the 1934 Act, without the consent of the Company.

 

h.
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

    	22

     

    

 

i.
Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement
shall survive the closing hereunder not withstanding any due diligence investigation conducted by or on behalf of the Buyer. The
Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage
arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and
covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses
as they are incurred.

 

j.
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.

 

k.
No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction will be applied against any party.

 

l.
Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the
Buyer by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other
available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining,
preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity
of showing economic loss and without any bond or other security being required.

 

m.
Indemnification. In consideration of the Buyer’s execution and delivery of this Agreement and acquiring the Securities
hereunder, and in addition to all of the Company’s other obligations under this Agreement or the Notes, the Company shall
defend, protect, indemnify and hold harmless the Buyer and its stockholders, partners, members, officers, directors, employees
and direct or indirect investors and any of the foregoing persons’ agents or other representatives (including, without limitation,
those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages,
and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation
or warranty made by the Company in this Agreement or the Notes or any other agreement, certificate, instrument or document contemplated
hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in this Agreement or the Notes
or any other agreement, certificate, instrument or document contemplated hereby or thereby or (c) any cause of action, suit or
claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf
of the Company) and arising out of or resulting from (i) the execution, delivery, performance or enforcement of this Agreement
or the Notes or any other agreement, certificate, instrument or document contemplated hereby or thereby, (ii) any transaction
financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, or
(iii) the status of the Buyer or holder of the Securities as an investor in the Company pursuant to the transactions contemplated
by this Agreement. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company
shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible
under applicable law.

 

n.
Leak-Out. So long as no Event of Default has occurred, the Buyer agrees that the aggregate number of shares of Conversion
Share and/or Inducement Shares that may be sold or otherwise transferred by the Buyer (taking into account sales and other transfers:
(a) directly from the Buyer, (b) the Buyer’s affiliates, and (c) any holder of such shares previously sold or otherwise
transferred to such holder by the Buyer after the Closing Date) shall not exceed the greater of (i) five percent (5%) of the average
daily trading volume for the previous thirty (30) Trading Days of the Common Stock as reported by the OTC Markets Group if the
Common Stock is quoted over-the-counter, or by Bloomberg L.P. if the Common Stock is traded on an exchange, and (ii) in any calendar
month, an amount equal to $50,000.00 of share sales at a per share price equal to the closing price of the Common Stock on the
date hereof.

 

[signature
page follows]

 

    	23

     

    

 

IN
WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above
written.

 

	SURGE
    HOLDINGS, INC.
	 	 	 
	By:
     	 	 
	Name:	Kevin
    Brian Cox	 
	Title:	Chief
    Executive Officer	 
	 	 	 
	By:
     	 	 
	Name:	 	 
	Title:	 	 

 

AGGREGATE
SUBSCRIPTION AMOUNT:

 

Principal
Amount of the First Note: US$_________

 

Purchase
Price of the First Note: US$________

 

    	24

     

    

 

Exhibit
A

 

Note

 

See
attached

 

    	25

     

    

 

Exhibit
B

 

Form
of True-Up Notice

 

TRUE-UP
NOTICE

 

Reference
is made to that certain Securities Purchase Agreement (the “Purchase Agreement”), dated as of January 29, 2020 by
and between Surge Holdings, Inc., a Nevada corporation (the “Borrower”) and___________________________ (the “Buyer”). Pursuant to
Section 4(o)(ii) of the Purchase Agreement, the undersigned hereby directs you to issue that number of shares of Common Stock
constituting the “True-Up Amount” as set forth below, of the Borrower, within two (2) days of the date hereof or the
next succeeding business day. No fee will be charged to the Buyer for any such issuance, except for transfer taxes, if any.

 

Box
Checked as to applicable instructions:

 

[  ]
The Borrower shall electronically transmit the Common Stock issuable pursuant to this True Notice to the account of the undersigned
or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).

 

Name
of DTC Prime Broker:

Account
Number:

 

[  ]
The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock
set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately
below or, if additional space is necessary, on an attachment hereto:

 

True-Up
Amount (number of shares of common stock to be issued)_______________________

 

	By:	 	 
	Name:	 	 
	Title:	 	 
	Date:

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