Exhibit 10.3

 

THIS SECURED PROMISSORY NOTE (THIS “NOTE”) HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR APPLICABLE STATE
SECURITIES LAWS. THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW
TO DISTRIBUTION OR RESALE, AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

SYSOREX, INC.

 

SECURED PROMISSORY NOTE

 

$[●] Issue Date: [●]

 

Sysorex, Inc., a Nevada corporation (the “Company”), for value received, hereby
promises to pay to Systat Software, Inc., a Delaware corporation, or its
registered assigns (the “Holder”), an aggregate sum of $[●] or such other amount
as shall then equal the outstanding balance payable (the “Loan Amount”), plus
all accrued unpaid interest, as set forth below, on the earlier to occur of (i)
December 31, 2021 or (ii) when declared due and payable by the Holder upon the
occurrence of an Event of Default (as defined below) (the “Maturity Date”). This
Note is issued as of the Issue Date set forth above, pursuant to the terms of
that certain Promissory Note Assignment and Assumption Agreement, dated as of
June 30, 2020 (the “Agreement”), by and among the Company, Inpixon, a Nevada
corporation (“Inpixon”) and the Holder.

 

The following is a statement of the rights of the Holder of this Note and the
conditions to which this Note is subject, and to which the Holder hereof, by the
acceptance of this Note, agrees:

 

1. Definitions. As used in this Note, the following terms, unless the context
otherwise requires, shall have the following meanings:

 

(i) “Company” shall also include any corporation that, to the extent permitted
by this Note, succeeds to, or assumes the obligations of, the Company under this
Note.

 

(ii) “Holder”, when the context refers to a holder of this Note, shall mean any
person who shall at the time be the registered holder of this Note.

 

2. Payments. All payments for amounts due under this Note shall be made by wire
transfer of immediately available funds, in lawful tender of the United States,
to an account designated in writing by the Holder, and all payments in cash
shall be applied first to the Interest Amount (as defined below) and thereafter
to the Loan Amount, subject to any such further conditions as set forth in
Section 14 hereto.

 

3. Interest. Interest on the Loan Amount will accrue beginning as of the Issue
Date , at the rate of ten percent (10%) per annum (the “Interest Rate”). All
accrued unpaid interest (the “Interest Amount”) shall be due and payable to the
Holder on the Maturity Date. Upon the occurrence of an Event of Default (as
defined below), interest shall accrue on the outstanding Loan Amount of this
Note at the lesser of the rate of twenty-one percent (21%)  per annum or the
maximum rate permitted by applicable law. All interest calculations hereunder
shall be computed on the basis of a 360-day year comprised of twelve (12) thirty
(30) day months, shall compound daily and shall be payable in accordance with
the terms of this Note. Interest payments shall be payable in cash.

 

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4. Events of Default. If any of the events specified in this Section 4 shall
occur (herein individually referred to as an “Event of Default”), the Holder of
this Note may, provided such condition exists, declare the entire Loan Amount
and Interest Amount hereon immediately due and payable, by written notice to the
Company:

 

(i) Any failure by the Company to pay any of the Loan Amount or Interest Amount
on this Note when due hereunder, and such failure continues for ten (10) days
after written notice to the Company thereof; or

 

(ii) The institution by the Company of proceedings to adjudicate the Company as
bankrupt or insolvent, or the consent by the Company to the institution of such
proceedings; the filing by the Company of a petition, answer or consent seeking
reorganization or release under the federal Bankruptcy Act or any other
applicable federal or state law, or the consent by the Company to the filing of
any such petition; the appointment of a receiver, liquidator, assignee, trustee
or other similar official of the Company, or of any substantial part of its
property; or the making of an assignment by the Company for the benefit of
creditors, or the taking of any corporate action by the Company in furtherance
of any such action; or

 

(iii) The commencement of an action against the Company seeking any bankruptcy,
insolvency, reorganization, liquidation, dissolution or similar relief under any
present or future statute, law or regulation; unless, (a) within sixty (60) days
after such commencement, the action has been resolved in favor of the Company,
or all orders or proceedings thereunder affecting the operations or the business
of the Company have been stayed; provided, however, that the stay of any such
order or proceeding has not thereafter been set aside, or (b) within sixty (60)
days after the appointment of any trustee, receiver or liquidator of the Company
or of all or any substantial part of the properties of the Company, without the
consent or acquiescence of the Company thereto, such appointment is vacated.

 

5. Prepayment. This Note may be prepaid by the Company at any time without
penalty or premium. Immediately following the completion of any financing, or
series of related financings, in which the Company raises aggregate gross
proceeds of at least $5 million, in each case, the Company will make a cash
payment to the Holder in an amount equal to 6% of the aggregate gross proceeds
raised in any financing subject to this Section 5; provided, however, that any
payments made to the Holder in accordance with this Section 5 shall be made on a
pro rata basis against any then outstanding Partitioned Notes held in the name
of the Holder and subject to Section 2 of that certain Intercreditor Agreement,
by and between the Holder and Inpixon, dated as of June 30, 2020 (the
“Intercreditor Agreement”) to the extent that such gross proceeds shall be
deemed to be Collateral (as defined below).

 

6. Assignment. Subject to the restrictions on transfer described in Section 8
below, the rights and obligations of the Company and the Holder of this Note
shall be binding upon, and benefit the successors and assigns of, the parties
hereto.

 

7. Waiver and Amendment. Any provision of this Note may be amended, waived or
modified upon the written consent of both the Company and the Holder.

 

8. Transfer of This Note. With respect to any offer, sale or other disposition
of this Note, the Holder shall give written notice to the Company prior thereto,
describing briefly the manner thereof, together with a written opinion of such
Holder’s counsel, to the effect that such offer, sale or other disposition may
be effected without registration or qualification (under any federal or state
law then in effect). Upon receiving such written notice and opinion, if so
requested, the Company, as soon as practicable, shall notify such Holder that
such Holder may sell or otherwise dispose of this Note, all in accordance with
the terms of the notice delivered to the Company. Any Note thus transferred
shall bear a legend as to the applicable restrictions on transferability in
order to ensure compliance with the Act unless, in the opinion of counsel for
the Company, such legend is not required. The Company may issue stop-transfer
instructions to the Company’s transfer agent in connection with any such
restrictions.

 

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9. Secured Note.

 

9.1 Except with respect to the security interest granted in connection with that
certain Loan and Security Agreement, dated as of December 21, 2018, with
Payplant LLC as agent for Payplant Alternatives Fund LLC (“Payplant Liens”) and
Permitted Liens (as defined below), this Note shall constitute a security
agreement for all purposes under applicable law. The Company hereby grants to
the Holder, subject to any and all Payplant Liens and Permitted Liens and the
terms and conditions of the Intercreditor Agreement, now or hereafter existing
with respect to same, a continuing first priority security interest in all
assets of the Company whether now owned or hereafter acquired, including all
proceeds therefrom (collectively, the “Collateral”) to secure the payment of
this Note and all other loans and advances (including all renewals,
modifications and extensions thereof) and all obligations of any and every kind
and nature of the Company to the Holder, whether arising prior to, under or
after this Note, however incurred or evidenced, plus all interest, reasonable
costs, reasonable expenses and reasonable attorneys’ fees, which may be made or
incurred by the Holder in the disbursement, administration, and collection of
such amounts, and in the protection, maintenance, and liquidation of the
Collateral. Except for Payplant Liens, Permitted Liens, whether or not now or
hereafter existing, the Company shall not sell, assign, transfer, pledge or
otherwise dispose of or encumber any Collateral to any third party while this
Note is in effect without the prior written consent of the Holder in its sole
discretion.

 

9.2 The Company shall execute and deliver to the Holder, concurrently with the
Company’s execution of this Note and at any time or times hereafter at the
request of the Holder, all financing statements, assignments, affidavits,
reports, notices, schedules of accounts, letters of authority and all other
documents that the Holder may reasonably request, in form satisfactory to the
Holder, to perfect and maintain perfected the Holder’s security interests in the
Collateral. In addition, the Company irrevocably authorizes the Holder, its
agents, attorneys, and representatives, to file financing statements and
amendments thereto at the Company’s expense, necessary to establish and maintain
the Holder’s perfected security interest in the Collateral. In order to fully
consummate all of the transactions contemplated hereunder, the Company shall
make appropriate entries on its books and records disclosing the Holder’s
security interests in the Collateral. Immediately upon full satisfaction of this
Note, including payment of the outstanding Loan Amount and reasonable fees and
expenses due to the Company hereunder and pursuant to the Agreement
(collectively, the “Liabilities”), without further notice from the Company, the
Company may terminate any financing statements, assignments, affidavits,
reports, notices, schedules of accounts, letters of authority and all other
documents used to perfect and maintain perfected the Holder’s security interests
in the Collateral.

 

9.3 For purposes of this Note, “Permitted Liens” means:

 

9.3.1 purchase money security interests to secure purchase money indebtedness of
the Company, so long as such security interests arise or are created (A) in the
ordinary course of business and consistent with past practices and (B)
substantially contemporaneously with the purchase or acquisition by the Company
of the respective property or assets to which such security interests relate and
the incurrence of the respective purchase money indebtedness which such security
interests secure, secure only the respective purchase money indebtedness so
incurred by the Company to enable the Company to so purchase or acquire such
property or assets, and no other indebtedness, and encumber only the respective
property or assets so purchased or acquired, and no other property or assets of
the Company;

 

9.3.2 any liens arising in connection with capital leases or equipment financing
arrangements of the Company;

 

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9.3.3 liens acquired with liabilities assumed by the Company in connection with
acquisitions of existing businesses, business divisions, or assets, in whole or
in part after the date hereof;

 

9.3.4 carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s,
processor’s, landlord’s liens or other like liens arising in the ordinary course
of business that are not overdue for a period of more than thirty (30) days or
which are being contested in good faith by appropriate proceedings;

 

9.3.5 liens arising in connection with worker’s compensation, unemployment
insurance, old age pensions and social security benefits and similar statutory
obligations (excluding liens arising under ERISA), provided that no enforcement
proceedings in respect of such liens are pending and provisions have been made
for the payment of such liens on the books of such person as may be required by
generally accepted accounting principles; and

 

9.3.6 liens incurred in the ordinary course of business to secure the
performance of statutory obligations arising in connection with progress
payments or advance payments due under contracts with the United States
government or any agency thereof entered into in the ordinary course of business
and (ii) liens incurred or deposits made in the ordinary course of business to
secure the performance of statutory obligations, bids, leases, fee and expense
arrangements with trustees and fiscal agents, trade contracts, surety and appeal
bonds, performance bonds and other similar obligations (exclusive of obligations
incurred in connection with the borrowing of money, any lease-purchase
arrangements or the payment of the deferred purchase price of property),
provided, that in each case full provision for the payment of all such
obligations.

 

10. Notices. Any notice, request or other communication required or permitted
hereunder shall be in writing and shall conclusively be deemed to have been duly
given if personally delivered or if faxed with confirmation of receipt by
telephone or if mailed by registered or certified mail, postage prepaid, at the
respective addresses of the parties set forth below, and shall be deemed to have
been received when delivered. Any party hereto may, by notice thereof, change
its address for any such future notices as may be required or permitted
hereunder.

 

Holder: Systat Software, Inc.   2107 North First Street, Suite 360   San Jose,
CA 95131

 

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

 

Systat Software, Inc.

c/o Cranes Software International Ltd.

# 82 Presidency Building

3 & 4th Floor St. Mark’s Road

Bengaluru, India 560001

E-mail: ***************

Attn: Mueed Khader

 

Company: Sysorex, Inc.   13880 Dulles Corner Lane, Suite 175   Herndon, VA 02171
  Attn: Zaman Khan

 

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

 

Adams Corporate Law, Inc.

1851 E 1st St, Suite 900

Santa Ana, CA 92705-4066

Attn: Addison K. Adams, Esq.

 

11. No Stockholder Rights. Nothing contained in this Note shall be construed as
conferring upon the Holder or any other person the right to vote or consent or
to receive notice as a stockholder in respect of any meeting of stockholders for
the election of directors of the Company or any other matters or rights
whatsoever as a stockholder of the Company, and no dividends or interest shall
be payable or accrued in respect of this Note or the interests represented
hereby.

 

12. Usury. This Note is hereby expressly limited so that in no event whatsoever,
whether by reason of acceleration of maturity of the loan evidenced hereby or
otherwise, shall the amount paid or agreed to be paid to the Holder hereunder
for the loan, use, forbearance or detention of money exceed that which is
permissible under applicable law. If at any time the performance of any
provision of this Note or of any other agreement or instrument entered into in
connection with this Note involves a payment exceeding the limit of the interest
that may be validly charged for the loan, use, forbearance or detention of money
under applicable law, then automatically and retroactively, ipso facto, the
obligation to be performed shall be reduced to such limit, it being the specific
intent of the Company and the Holder that all payments under this Note are to be
credited first toward the payment of interest, but not in excess of the lesser
of (i) the agreed upon Interest Rate as set forth herein or (ii) that which is
permitted by law; and payments shall thereafter be credited toward the reduction
of the outstanding Loan Amount.

 

The provisions of this Section 12 shall under no circumstances be superseded or
waived and shall control every other provision of this Note and all other
agreements and instruments entered into between the Company and the Holder in
connection with this Note.

 

13. Governing Law. In all respects, including all matters of construction,
validity and performance, this Note shall be governed by, and construed and
enforced in accordance with, the laws of the State of Nevada, without regard to
principles thereof relating to conflicts or choice of law.

 

14. Heading; References. All headings used herein are used for convenience only
and shall not be used to construe or interpret this Note. Except where otherwise
indicated, all references herein to Sections refer to Sections hereof.

 

15. Waiver. The Company hereby waives default, demand for payment, notice,
presentment, protest and notice of nonpayment or dishonor and all other notices
or demands relating to this instrument.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Company has caused this Note to be issued as of the date
first written above.

 

  COMPANY:         Sysorex, Inc.,   a Nevada corporation         By:     Name:
Zaman Khan   Title: Chief Executive Officer 

 

 

HOLDER:         Systat Software, Inc.   a Delaware corporation         By:    
Name:   Tanveer Khader   Title:   Vice President         Address:  2107 North
First Street, Suite 360     San Jose, CA 95131