Item 1.01 Entry into a Material Definitive Agreement.
As
previously disclosed, in November 2020, Digerati Technologies, Inc. (the “Company”), T3 Communications, Inc., a Nevada entity
that is a controlled subsidiary of the Company (“T3 Nevada”), and its subsidiaries (collectively, “the T3 Nevada Parties”)
entered into a credit agreement (the “Credit Agreement”) with Post Road Administrative LLC and its affiliate Post Road Special
Opportunity Fund II LLP (collectively, “Post Road”). The Company is a party to certain sections of the Credit Agreement. Next
Level Internet, Inc. became a T3 Nevada Party in February 2022.
As
previously disclosed, through June 13, 2022, the Credit Agreement had been amended three times. Pursuant to the Credit Agreement, as amended,
Post Road and its affiliates have lent a total of approximately $32,168,515 to T3 Nevada. The loan amounts are evidenced by two term loan
notes referred to as the “Amended and Restated Term Loan A Note” and the “Term Loan C Note” (collectively, the
“Notes”).
As previously disclosed, in
June 2022, as part of the third amendment to the Credit Agreement, Post Road agreed to forbear from (i) exercising its rights and remedies
with regard to certain existing events of default and (ii) requiring compliance with the financial covenants set forth in Section 11.12
of the Credit Agreement (related to leverage, EBITDA, liquidity, capital expenditures, fixed charge coverage ratio, and churn), pursuant
to a Forbearance Agreement and Third Amendment to Credit Agreement by and among the T3 Nevada Parties and Post Road (the “Forbearance
Agreement”). As previously disclosed, the Forbearance Agreement was amended twice (once in each of October and December 2022) to
extend the forbearance period.
On February 3, 2023, the Company,
the T3 Nevada Parties, and Post Road entered into a Consent, Limited Waiver and Fourth Amendment to Credit Agreement and Amendment to
Notes (the “Fourth Amendment”). Pursuant to the Fourth Amendment, Post Road, contingent on the Bridge Loan Repayment (as defined
in this paragraph), gave its consent to (a) the Company’s execution, delivery and performance of the Merger (as defined in this
paragraph) transaction documents and (b) the Company completing the contemplated merger (the “Merger”) of MEOA Merger Sub,
Inc., a wholly owned subsidiary of Minority Equality Opportunities Acquisition Inc. (“MEOA”), with and into the Company, with
the Company as the surviving company in the merger and, after giving effect to such merger, the Company being a wholly-owned subsidiary
of MEOA. Pursuant to the Fourth Amendment, Post Road gave its consent to the transactions previously disclosed in November 2022, December
2022 and February 2023 whereby the Company obtained convertible loans in the aggregate Net Unpaid Principal Amount (as defined in this
paragraph) of approximately $2,848,525, and gave its consent to the Company obtaining additional convertible financing in a Net Unpaid
Principal Amount of up to approximately $151,475 pursuant to similar transaction documents, and for a total Net Unpaid Principal Amount
in convertible loans of up to $3,000,000 (such bridge loans are hereinafter referred to individually as a “Bridge Loan” and
collectively as the “Bridge Loans”). Post Road’s consents to the Bridge Loans in a Net Unpaid Principal Amount of up
to $3,000,000 are contingent on (a) the closing of the Merger and (b) the repayment in full of all obligations under the Bridge Loans
from (i) conversion into shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) immediately
after the closing of the Merger via cash, or (ii) with Post Road’s prior written approval, either (A) proceeds of an additional
equity offering or financing transaction, or (B) via amortization payments (collectively, the “Bridge Loan Repayment”). As
used herein, the term “Net Unpaid Principal Amount” means the principal dollar amount of a Bridge Loan, less the original
issue discount (if any) and less the transaction costs paid in cash by the Company upon the closing thereof.
The Fourth Amendment amends the Credit Agreement
to add defined terms related to the Merger and the Bridge Loans. The Fourth Amendment also adds a default under the Bridge Loans transaction
documents as an event of default pursuant to the Credit Agreement. The Fourth Amendments amends the mandatory prepayment provision to
require that, concurrently with each payment made on the Bridge Loans, an amount equal to 50% of the total dollar amount of such Bridge
Loan payment must be made to partially repay the Notes.
The Fourth Amendment requires T3 Nevada to notify
Post Road promptly of any contemplated financings or other offers to lend money that are issued to the Company. The Fourth Amendment also
requires T3 Nevada to deliver to Post Road: (a) the full details of any proposed amendment, modification, supplement or waiver to the
Bridge Loan transaction documents before any such document is executed; and (b) notice of the conversion of Bridge Loans into shares of
Common Stock or other capital stock of the Company.
The Fourth Amendment revises
each of the six financial covenants set forth in Section 11.12 of the Credit Agreement (related to maximum leverage, minimum liquidity,
minimum EBITDA, maximum capital expenditures, minimum interest coverage (a provision that replaces the minimum fixed charge coverage ratio
provision), and maximum churn). In addition, pursuant to the Fourth Amendment, none of the financial covenants contained in Section 11.12
of the Credit Agreement, as amended by the Fourth Amendment, other than minimum liquidity will be tested with respect to the fiscal quarter
that ended on January 31, 2023. The Fourth Amendment provides that these revised financial covenants will be null and void if the Merger
does not close by February 28, 2023 (the “Merger Outside Closing Date”), in which case the financial covenants in effect under
Section 11.12 of the Credit Agreement immediately prior to the Fourth Amendment shall apply and be deemed effective.
Pursuant to the Fourth Amendment,
Post Road agreed to waive each and all of the Specified Defaults (as defined in the Fourth Amendment). Post Road’s waiver of the
Specified Defaults are contingent on the Merger closing on or before the Merger Outside Closing Date and no events of default (other than
the Specified Defaults) or any condition or event that, with the giving of notice or the lapse of time or both, would constitute an event
of default, existing under the Credit Agreement on the Merger closing date.
In addition, the Credit Agreement
permits T3 Nevada to defer until the respective maturity dates of the Notes the payment of accrued and unpaid interest otherwise due and
payable. The Fourth Amendment amends the Credit Agreement and the Notes to revise the interest rate payable by T3 Nevada including pursuant
to the deferral of the interest payments.
The
foregoing summary of the Fourth Amendment contains only a brief description of the material terms of the Fourth Amendment and such description
is qualified in its entirety by reference to the full text of the Fourth Amendment, filed herewith as Exhibit 10.1, and
incorporated by reference herein.