Document:

Exhibit 10.2

    

    

   

  

   

  

   

  

  
    ASSET PURCHASE AGREEMENT

     

    THIS ASSET PURCHASE AGREEMENT (the “Agreement”) is made and entered into as of March 31, 2017 by and among GROTE MOLEN, INC., a Nevada corporation (“Seller”), and John Hofman and Bruce Crane, individuals (collectively, “Purchaser”).

    

    

    WHEREAS, Seller is engaged in the businesses of network security technology (the “Network Security Business”)

        and the distribution of its proprietary “WonderMill” grain mills and “WonderMix” kitchen mixers (the “Home Appliance Business”); and

     

    WHEREAS, Purchaser desires to acquire substantially all the assets of Seller used in connection with the Home Appliance Business, and to assume substantially all the liabilities of Seller incurred in connection with the
        Home Appliance Business, and Seller desires to transfer and convey the same to Purchaser, all on and subject to the terms and conditions set forth in this Agreement (the “Acquisition”);

     

    NOW, THEREFORE, in consideration of the premises and mutual representations, warranties, covenants and agreements hereinafter set forth, the parties hereto agree as follows:

     

    ARTICLE I

        PURCHASE AND SALE

     

    1.1 Acquired Assets.  Subject to the terms and conditions set forth in this Agreement, Seller hereby sells, conveys, assigns, transfers and delivers to
        Purchaser and Purchaser hereby accepts, purchases, acquires and takes assignment and delivery of, all right, title and interest in, to and under the assets owned by Seller and used or held for use in the Home Appliance Business (whether real or
        personal, tangible or intangible), all of which are located in Pocatello, Idaho (collectively, the “Acquired Assets”).  The
        Acquired Assets are described in the asset summary and detailed lists attached hereto as Exhibit A and incorporated herein by reference.

     

    1.2  Assumed Liabilities.  As partial consideration for the Acquired Assets, Purchaser hereby assumes all liabilities of Seller incurred in connection with the Home Appliance Business or the operation thereof, which liabilities and obligations
        are described in the list of assumed liabilities attached hereto as Exhibit B and incorporated herein by reference (the “Assumed Liabilities”).

     

    ARTICLE II

        PURCHASE PRICE

     

    2.1 Purchase Price.  The
        consideration for the acquisition of the Acquired Assets shall consist of the Purchaser’s assumption of the Assumed Liabilities and its agreement to indemnify Seller for claims arising in connection with the Home Appliance Business as set forth in
        Section 7.2 hereof.

     

    2.2 Allocation of Purchase
            Price.  Within thirty (30) days from the Closing Date, the parties shall allocate the Purchase Price among the Acquired
        Assets and such allocation shall be attached to this Agreement as Schedule 2.2.  Such allocation is intended to comply with the requirements of
        Section 1060 of the Internal Revenue Code of 1986, as amended.  Seller and Purchaser shall file Form 8594 with their respective Tax Returns consistent with such allocation.  The parties shall treat and report the transaction contemplated by this
        Agreement in all respects consistently for purposes of any Federal, state or local tax, including the calculation of gain, loss and basis with reference to the Purchase Price allocation made pursuant to this Section 2.2.  The parties shall not take any action or position inconsistent with the obligations set forth in this Agreement.

    
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    ARTICLE III

        REPRESENTATIONS AND WARRANTIES OF SELLER

     

    Seller represents and warrants to Purchaser that the statements contained in this Article III are true and correct on the date hereof and on the Closing Date.  The Disclosure Schedules will be arranged in paragraphs corresponding
        to the numbered paragraphs contained in this Article III.

    

    

    3.1 Due Organization.  Seller is a corporation duly organized, validly existing, and in good standing under the laws of the State of Idaho and has the corporate
        power and is duly authorized under all applicable laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted.  Seller is duly authorized to do business and is in
        good standing in each other jurisdiction in which either the nature of the activities conducted by it or ownership of its assets requires it to be so qualified.

     

    3.2 Due Authorization.  Seller has full power and authority to enter into this Agreement and to carry out the transactions contemplated hereby.  The execution,
        delivery and performance of this Agreement have been duly authorized by all necessary action by the board of directors of Seller and no other proceedings or actions are required to carry out the transactions contemplated hereby.  This Agreement has
        been duly and validly executed and delivered by Seller and, assuming the due authorization, execution and delivery by Purchaser, constitutes a legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms,
        except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or other laws from time to time in effect which affect creditors’ rights generally and by general principles of
        equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

     

    3.3 Title to and “As Is”
            Condition of Assets.  Seller has good and valid title to the Acquired Assets and Seller shall convey the Acquired Assets
        to Purchaser and vest in Purchaser good and valid title to the Acquired Assets, free and clear of any lien or Encumbrance other than those existing as of the date hereof.  The Acquired Assets are being sold to Purchaser in an “as is where is”
        condition without any representation or warranty of any kind or nature.

     

    3.4 Assignment of Agreements.  Seller shall assign to Purchaser, and Purchaser shall assume, all contracts and agreements pertaining to the Home Appliance Business.

     

    3.5 Brokers.  Seller has not incurred any Liability for brokerage or finders’ fees or agents’ commission or other similar payment in connection with the
        Acquisition.

    
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    ARTICLE IV

        REPRESENTATIONS AND WARRANTIES OF PURCHASER

     

    Purchaser represents and warrants to Seller as of the date hereof and as of the Closing Date as
        follows:

     

    4.1 Due Authorization.  Each of the persons comprising Purchaser has full power and authority to enter into this Agreement and to carry out the transactions
        contemplated hereby.  This Agreement constitutes a legal, valid and binding obligation of Purchaser, enforceable against each of the persons comprising Purchaser in accordance with its terms.  This Agreement has been duly and validly executed and
        delivered by Purchaser and, assuming the due authorization, execution and delivery by Seller, constitutes a legal, valid and binding obligation of Purchaser enforceable against Purchaser in accordance with its terms, except as such enforceability
        may be limited by applicable bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or other laws from time to time in effect which affect creditors’ rights generally and by general principles of equity (regardless of whether such
        enforceability is considered in a proceeding in equity or at law).

     

    4.2 Brokers.  Purchaser has not incurred any Liability for brokerage or finders’ fees or agents’ commission or other similar payment in connection with
        the Acquisition.

     

    ARTICLE V

    COVENANTS

     

    5.1 Termination of Employees.  Seller and Purchaser agree that the employment of the persons comprising Purchaser, who constitute all employees of Seller in the Home
        Appliance Business, shall be terminated effective as of the date hereof.

     

    5.2 Further Assurances.  Each party shall, at the request of the other party from time to time and at any time, whether on or after the date hereof, and without
        further consideration, execute and deliver such deeds, assignments, transfers, assumptions, conveyances, powers of attorney, receipts, acknowledgments, acceptances and assurances as may be reasonably necessary to procure for the party so
        requesting, and its successors and assigns, or for aiding and assisting in collecting and reducing to possession, any and all of the Acquired Assets, or for the assumption of the Assumed Liabilities, or to otherwise satisfy and perform the
        obligations of the parties hereunder.

     

    ARTICLE VI

        DOCUMENTS AND INSTRUMENTS BEING DELIVERED

     

    6.1 Documents to be Delivered by Seller.  Concurrently with the execution of this Agreement, Seller shall deliver the documents and instruments and take the actions described below, unless explicitly waived
        by Purchaser in writing:

     

    (a) A Bill of Sale, in form attached hereto as Exhibit
            C, duly executed by Seller (the “Bill of Sale”), and such other instruments as may be reasonably requested by
        Purchaser to transfer full legal and beneficial ownership of the Acquired Assets to Purchaser, free and clear of debts, liens and encumbrances.

     

    (b) A counterpart of the Assignment and Assumption Agreement, in the form attached hereto as Exhibit D, duly executed by Seller, whereby Seller will assign, and Purchaser will assume, the Assumed Liabilities (the “Assignment of Assumed Liabilities”).

     

    
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    (c) If and to the extent required, an affidavit in compliance with Section 1445 of the Internal Revenue Code
        and applicable regulations (the “Code”) stating, under penalty of perjury, that Seller is not a foreign corporation, foreign partnership,
        foreign trust or foreign estate (as those terms are defined in the Code) and providing Seller's United States employer identification number, office address and place of incorporation.

     

    (d) Seller shall deliver possession of the Acquired Assets to Purchaser in Pocatello, Idaho.

     

    (e) Seller shall deliver all such other documents, instruments and certificates in connection with the transactions contemplated by this
        Agreement as Purchaser may reasonably request in form and substance reasonably satisfactory to Purchaser and its counsel.

     

    6.2 Documents to be Delivered
            by Purchaser.  Concurrently with the execution of this Agreement, Purchaser shall deliver the documents and instruments
        and take the actions described below, unless explicitly waived by Seller in writing:

     

    (a) A counterpart of the Assignment of Assumed Liabilities, duly executed by Purchaser.

     

     

    ARTICLE VII

        SURVIVAL AND INDEMNIFICATION

     

    7.1 Survival.  The warranties, representations and agreements given by Purchaser and Seller pursuant to this Agreement shall survive the Closing of this
        transaction and any investigation or inquiry made by or on behalf of any party for a period of one year.  

     

    7.2 Indemnification by
            Purchaser.  As additional consideration for the purchase of the Acquired Assets, Purchaser agrees to indemnify and defend
        Seller against, and agrees to hold it harmless from, any Losses actually incurred or suffered by Seller relating to or arising out of any of the Home Appliance Business, the Acquired Assets or the Assumed Liabilities.

     

    ARTICLE VIII

        MISCELLANEOUS

     

    8.1 No
            Representation Regarding Tax Treatment.  No representation or warranty is being made by any party to any other regarding
        the treatment of this transaction for federal or state income taxation.  Each party has relied exclusively on its own legal, accounting, and other tax adviser regarding the treatment of this transaction for federal and state income tax purposes.

    

    

    8.2 Governing

            Law.  This Agreement shall be governed by, enforced and construed under and in accordance with the laws of the State of
        Nevada.

    
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    8.3 Notices.  All notices, consents, waivers, requests, instructions, or other communications required or permitted hereunder shall be in writing, and
        shall be deemed to have been duly given if (a) delivered personally (effective upon delivery), (b) sent by a reputable, established overnight delivery service providing confirmation of delivery (effective one business day after being delivered to
        such overnight delivery service), or (c) mailed by certified mail, return receipt requested, postage prepaid (effective three business days after being deposited in the U. S. Mail), addressed as follows (or to such other address as the recipient
        may have furnished for such purpose pursuant to this Section):

    

    

    If to Seller:

    Bob Graham

    President

    Grote Molen, Inc.

    400 Panamint Road

    Reno, NV 89521

    If to Purchaser:

     

    John Hofman and Bruce Crane

    322 West Griffith Road

    Pocatello, ID 83201

    

    

    or such other addresses as shall be furnished in writing by any party in the manner for giving notices, hereunder.

    

    

    8.4 Entire
            Agreement.  This Agreement represents the entire agreement between the parties relating to the subject matter hereof.  All
        previous agreements between the parties, whether written or oral, have been merged into this Agreement.  This Agreement alone fully and completely expresses the agreement of the parties relating to the subject matter hereof.  There are no other
        courses of dealing, understandings, agreements, representations, or warranties, written or oral, except as set forth herein.

    

    

    8.5 Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which taken together shall
        be but a single instrument. Facsimile, pdf or other electronic transmissions of any signed original document, or transmission of any signed facsimile, pdf or other electronic document, shall constitute delivery of an executed original.  At the
        request of any of the parties, the parties shall confirm facsimile, pdf or other electronic transmission signatures by signing and delivering an original document.

    

    

    8.6 Amendment

            or Waiver.  This Agreement may be amended by a writing signed by all parties hereto, with respect to any of the terms
        contained herein, and any term or condition of this Agreement may be waived or the time for performance thereof may be extended by a writing signed by the party or parties for whose benefit the provision is intended.

    

    

    8.7 Public
            Statements.  Subject to their respective legal obligations (including requirements of stock exchanges and other similar
        regulatory bodies), the Parties shall consult with one another, and use reasonable best efforts to agree upon the text of any press release, before issuing any such press release or otherwise making public statements with respect to the Merger and
        in making any filings with any federal or state governmental or regulatory agency or with any securities exchange with respect thereto.

    

    

    
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    8.8 Expenses.  Except as otherwise expressly provided herein, each party hereto shall bear its own expenses with respect to this Agreement and the
        transactions contemplated hereby.

    

    

    8.9 No Third Party Beneficiaries.  This Agreement is solely for the benefit of the parties hereto and, to the extent provided herein, their respective directors, officers,
        employees, agents and representatives, and no provision of this Agreement shall be deemed to confer upon other third parties any remedy, claim, liability, reimbursement, cause of action or other right.

    

    

    8.10 Severability.  Whenever possible each provision and term of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law,
        but if any provision or term of this Agreement shall be held to be prohibited by or invalid under such applicable law, or determined to be void or unenforceable for any reason, then such provision or term shall be ineffective only to the extent of
        such prohibition, invalidity or unenforceability, without invalidating or affecting in any manner whatsoever the remainder of such provision or term or the remaining provisions or terms of this Agreement, and the prohibited, invalid or
        unenforceable provision shall be modified to the minimum extent necessary to make it permissible, valid and enforceable, unless the result of any such invalidity or unenforceability shall be to cause a material failure of consideration to the party
        seeking to sustain the validity or enforceability of the subject provision.

     

    IN WITNESS
          WHEREOF, the parties have executed and caused this Agreement to be executed and delivered on the date first above written.

    

    

    SELLER:

    Grote Molen, Inc.

    A Nevada corporation

    

    

    

    

    By:/s/ Bob Graham 

    Bob Graham

    President

    

    

    PURCHASER:

    

    

    

    

    /s/
            John Hofman_______________________

    John B. Hofman

    

    

    

    

    /s/ Bruce Crane________________________

    Bruce Crane

    
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    LIST OF EXHIBITS

    

    

    Exhibit A List of Acquired Assets

    

    

    Exhibit B List of Assumed Liabilities and Obligations

    

    

    Exhibit C Bill of Sale

    

    

    Exhibit D Assignment and Assumption of Assumed Liabilities

    

    

    Exhibit E Assignment of Membership Interests of Brownwick, LLC

    

    

    Exhibit

            A – List of Acquired Assets

    

    

     

    
      	
              1.

               

            	
              All issued and outstanding membership interests of Brownwick, LLC (“Brownwick”), an Idaho limited liability company
                  and a wholly owned subsidiary of Seller.

               

            

    

    
      	
              2.

               

            	
              The assets summarized in the table below.  The table reflects the value of the acquired assets as of March 31,
                  2017.  The table sets forth values for the assets of Seller and Brownwick on a consolidated basis.

               

            

    

    
      	
              3.

               

            	
              Detailed schedules of the assets being acquired are attached hereto as Schedule I.

               

            

    

    

    

    	
             

          	 	
            March 31

                2017

          	 
	
            ASSETS

          	 	 	 
	
            Current assets:

          	 	 	 
	
               Accounts receivable

          	 	
            $

          	
            32,201

          	 
	
               Accounts receivable – related parties

          	 	 	
            7,843

          	 
	
               Inventories

          	 	 	
            1,157,555

          	 
	
               Deposits

          	 	 	
            90,000

          	 
	
               Prepaid expenses

          	 	 	
            559

          	 
	
               Total current assets

          	 	 	
            1,288,158

          	 
	
            Property and equipment, net

          	 	 	
            117,254

          	 
	
            Intangible assets, net

          	 	 	
            62,820

          	 
	
             

          	 	 	 	 
	
               Total assets

          	 	
            $

          	
            1,468,232

          	 

    

    

    
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    Exhibit B – Schedule of
            Assumed Liabilities

    

    

     

    
      	
              1.

               

            	
              The liabilities summarized in the table below.  The table reflects the value of the assumed liabilities as of March 31, 2017.  The
                  table sets forth values for the liabilities of Seller and Brownwick, LLC on a consolidated basis. 

              

            

    

    
      	
              2.

               

            	
              Detailed schedules of the liabilities being acquired are attached hereto as Schedule I.

               

            

    

    

    

    	
             

          	 	
            March 31,

                2017

          	 
	
             

          	 	 	 
	
            LIABILITIES

          	 
	
            Current liabilities:

          	 	 	 
	
               Accounts payable and accrued expenses

          	 	
            $

          	
            625,689

          	 
	
               Accounts payable – related parties

          	 	 	
            29,200

          	 
	
               Accrued interest payable – related parties

          	 	 	
            24,400

          	 
	
               Accrued interest payable

          	 	 	
            13,111

          	 
	
               Notes payable – related parties

          	 	 	
            91,679

          	 
	
               Notes payable

          	 	 	
            64,000

          	 
	
               Total current liabilities

          	 	 	
            848,079

          	 
	
             

          	 	 	 	 
	
            Long-term debt:

          	 	 	 	 
	
               Note payable

          	 	 	
            135,227

          	 
	
               Total long-term debt

          	 	 	
            135,227

          	 
	
             

          	 	 	 	 
	
               Total liabilities

          	 	 	
            983,306

          	 

    

    

    

    

    
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    Exhibit C

    

    

    BILL OF SALE

     

    1. Sale and Transfer of
            Acquired Assets.  For good and valuable consideration, the receipt, adequacy and legal sufficiency of which are hereby
        acknowledged, and as contemplated by Section 1.1 of that certain Asset Purchase Agreement, dated as of March 31, 2017 (the “Purchase Agreement”),

        by and among Grote Molen, Inc., a Nevada corporation(“Seller”), and John B. Hofman and Bruce Crane, individuals (collectively “Purchaser”),

        Seller hereby sells, conveys, assigns, transfers and delivers to Purchaser, effective as of the Effective Date, all of Seller’s right, title and interest in, to and under all of the Acquired Assets, including but not limited to the assets described
        on Schedule I attached hereto and incorporated herein by reference.

    

    

    2. Further
            Actions.  Seller covenants and agrees to warrant and defend the sale, conveyance, assignment, transfer and delivery of the
        Acquired Assets hereby made, against all Persons whomsoever, to take all steps reasonably necessary to establish the record of Purchaser’s title to the Acquired Assets and, at the request of Purchaser, to execute and deliver further instruments of
        transfer and assignment and take such other action as Purchaser may reasonably request to more effectively transfer and assign to and vest in Purchaser each of the Acquired Assets, all at the sole cost and expense of Seller.

    

    

    3. Power
            of Attorney.  Without limiting Section 2, Seller constitutes and appoints Purchaser the true and lawful agent and attorney in fact of Seller, with full power of substitution and resubstitution, in whole or in part, in the name and stead of Seller but
        on behalf and for the benefit of Purchaser and its successors and assigns, from time to time:

    

    

    (a) to demand, receive and collect any and all of the Acquired Assets and to give receipts and releases for and with respect to the same,
        or any part thereof;

    

    

    (b) upon five (5) days’ advance written notice to Seller, to institute and prosecute, in the name of Seller or otherwise, any and all
        proceedings at law, in equity or otherwise, that Purchaser or its successors and assigns may deem proper in order to collect or reduce to possession any of the Acquired Assets and in order to collect or enforce any claim or right of any kind
        assigned or transferred, or intended so to be; and

    

    

    (c) to do all things legally permissible, required or reasonably deemed by Purchaser to be required to recover and collect the Acquired
        Assets and, upon five (5) days’ advance written notice to Seller, to use Seller’s name in such manner as Purchaser may reasonably deem necessary for the collection and recovery of same.

    

    

    Seller hereby declares that the foregoing powers are coupled with an interest and are and shall be
        irrevocable by Seller.

    

    

    

    

    
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    IN
          WITNESS WHEREOF, Seller has executed this Bill of Sale as of March 31, 2017.

    

    

    Grote Molen, Inc.

    A Nevada corporation

    

    

    

    

    By: /s/ Bob Graham

    Name:  Bob Graham

    Title:  President

    
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    Schedule I

    

    

    Attach hereto a list of the Acquired Assets.

    
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    Exhibit D

     

    ASSIGNMENT AND
            ASSUMPTION AGREEMENT

     

    THIS
          ASSIGNMENT AND ASSUMPTION AGREEMENT (the “Assignment and Assumption Agreement”) is dated as of March 31, 2017, by and between Grote
        Molen, Inc., a Nevada corporation (“Assignor”), and John Hofman and Bruce Crane, individuals (collectively, “Assignee”).

    

    

    Background

    

    

    A. Assignor and Assignee are parties to that certain Asset Purchase Agreement, dated as of March 31, 2017 (the “Purchase Agreement”), pursuant to which Assignee has purchased the Acquired Assets from Assignor.

    

    

    B. Pursuant to the Purchase Agreement, Assignor has agreed to assign to Assignee, and Assignee has agreed to assume, certain obligations of
        Assignor, including the liabilities and obligations described in Schedule I hereto (the “Assumed Liabilities”).

    

    

    Agreement

    

    

    In consideration of the covenants contained in this Assignment and Assumption Agreement and for other
        good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee, intending to be legally bound, agree as follows:

    

    

    1. Assignment and Assumption. 
        Assignor hereby assigns, transfers and conveys to Assignee, and Assignee hereby accepts and assumes, the Assumed Liabilities and agrees to make all payments and perform all obligations required to be made or performed in connection therewith.

    

    

    2. Further Actions.  Each of the parties covenants and agrees, at its own expense, to execute and deliver, at the request of the other party, such further instruments
        of transfer, assignment and release and to take such other action as such other party may reasonably request to more effectively consummate the assignments, assumptions and releases contemplated by this Assignment and Assumption Agreement.

    

    

    3. Governing Law.  This Assignment and Assumption Agreement shall be governed by and construed and enforced in accordance with the internal laws (as opposed to the
        conflicts of laws provisions) of the State of Nevada.

    

    

    4. Execution in Counterparts.  This Assignment and Assumption Agreement may be executed in any number of counterparts with the same effect as if the signatures thereto were upon
        one instrument.

    

    

    
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    IN
          WITNESS WHEREOF, the parties have executed this Assignment and Assumption Agreement as of the date first above written.

    

    

    ASSIGNOR:

    

    

    Grote Molen, Inc.

    A Nevada corporation

    

    

    

    

    By: /s/ Bob Graham

    Name:  Bob Graham

    Title:  President

    

    

    ASSIGNEE:

    

    

    

    

    /s/
            John Hofman____________________________

    John B. Hofman

    

    

    

    

    /s/ Bruce Crane_____________________________

    Bruce Crane

    

    

    

    

    
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    Schedule I

    

    

    Attach hereto a list of the Assumed Liabilities.

    

    

    

    

    
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    Exhibit E

    

    

    ASSIGNMENT OF MEMBERSHIP INTERESTS

    

    

    

    

    Know All Men By
          These Presents:

    

    

    For good and valuable consideration, the receipt and sufficiency of which is hereby
        acknowledged, the undersigned does hereby sell, assign, transfer and convey to John Hofman and Bruce Crane, all of the undersigned’s right, title and interest in and to all of its membership interests in the limited liability company known as
        Brownwick, LLC, an Idaho limited liability company (the “Company”).  The membership interests being conveyed constitute 100% of the
        membership interests of the Company and the undersigned is conveying a 50% membership interest to each of John B. Hofman and Bruce Crane.

     

      

    Effective as of the date of this Assignment, the transferees shall have the right to receive
        from the Company the assigned share of profits or other compensation to which the transferor otherwise would be entitled, the right to the return from the Company of the assigned contribution of the transferor to the capital of the Company and the
        right to exercise all rights and privileges pertaining to such membership interests.

     

      

    IN WITNESS WHEREOF, the transferor has executed this Assignment effective as of March 31, 2017.

     

      

    Grote Molen, Inc.

    

    

    By /s/ Bob Graham

    Bob Graham

    President

     

      

    

    

    

    

    15Exhibit 10.9

        

    

    

    

    Convertible Promissory Note

    

    

    

    

    

    

    	
            $

          	
            1,000,000

          	 	
             December __, 2018

          

    

    

    

    

    Blackridge Technology International, Inc. (the “Obligor”), hereby promises to pay to the order of
        __________________, and his/her lawful successors and assigns (the “Holder”), the principal sum of One Million and no/100 DOLLARS ($1,000,000.00) on December __, 2019 plus any accrued but unpaid interest.  The Obligor shall pay interest on the
        outstanding principal amount from the date hereof until the principal is paid in full at the rate of 9.0% per annum, payable annually in cash on each December ____th, until maturity, and, upon default and/or after maturity at a rate of
        15.0% per annum.  All payments will be made to the Holder, at such address as the Holder may designate, in money of the United States of America.    This Note shall automatically convert into the Obligor’s Preferred B Shares at $.25 per share or
        4,000,000 shares once converted, no sooner than December 31, 2018.    Additionally, as part of this transaction, the Holder is being granted one (1) warrant with a 7-year term which exercises at $.25 cent per share exercise price (cash exercise)
        with 100% warrant coverage or 4,000,000 warrants.  After closing, the Obligor shall deliver a form of Warrant to the Holder in form and substance consistent with other Obligor warrants.

    

    

    1. Remedies.

     

    
      	
              a.

               

            	
              Events of
                      Default.  “Event of Default,” wherever used herein, means any one of the following events:

               

            

    

    
      	
              i.

               

            	
              default in the payment of the principal of this Note at its maturity or any interest payment; or

               

            

    

    
      	
              ii.

               

            	
              the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in
                  respect of  the Obligor in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Obligor a bankrupt or insolvent, or
                  approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Obligor under any applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee,
                  trustee, sequestrator or other similar official of the Obligor or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such
                  other decree or order unstayed and in effect for a period of 60 consecutive days; or

               

            

    

    
      	
              iii.

               

            	
              the commencement by The Obligor of a voluntary case or proceeding under any applicable federal
                  or state bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of The Obligor
                  in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by
                  it of a petition or answer or consent seeking reorganization or relief under any applicable federal or state law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver,
                  liquidator, assignee, trustee, sequestrator or similar official of The Obligor or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its
                  inability to pay its debts generally as they become due, or the taking of corporate action by The Obligor in furtherance of any such action; or

               

            

    

    
      	
              iv.

               

            	
              The dissolution of The Obligor; or

               

            

    

    
      	
              v.

               

            	
              Any representation or warranty made to the Holder by The Obligor pursuant to this Note is false
                  or misleading in any material respect; or

               

            

    

    
      	
              vi.

               

            	
              The Obligor fails to observe or perform any material covenant or agreement made by the Obligor
                  to the Holder pursuant to this Note.

               

            

    

    
      	
              b.

               

            	
              Acceleration of
                      Maturity.  If any Event of Default occurs and is continuing, then and in every such case the Holder may declare the principal on this Note to be due and payable immediately, by a notice in writing to the Obligor, and upon
                  any such declaration such principal shall become immediately due and payable.

               

            

    

    
      	
              c.

               

            	
              Payment of
                      Expenses.  If any part of the Aggregate Balance is not paid when due, or if the Obligor fails to perform any obligation required hereunder, the Obligor shall pay any and all reasonable costs of collection or enforcement of
                  all outstanding obligations under this Note incurred by the Holder, including reasonable attorneys’ fees and expenses.

               

            

    

    2. Prepayment.   The Obligor may prepay this Note without penalty in full at any time.

     

    3.  Notices.  All notices and communications provided for herein or made hereunder shall be delivered, or mailed first class with postage prepaid, or faxed, addressed in each case as follows, until some other address
        shall have been designated in a written notice given in like manner, and shall be deemed to have been given or made when so delivered or mailed or faxed:

     

    (a) if to the Obligor:

    BlackRidge Technology

    5390 Kietzke Lane Suite 104

    Reno, NV 89511

    

    

    (b) if to the Holder:

    See address on record

    

    

    Or the address on Subscription Agreement

    

    

    

    

    or to such other person or address as the party entitled to notice hereunder shall designate by notice
        in accordance with this Note.

    
      
        

    

    

    

    4. Miscellaneous.

     

    
      	
              a.

               

            	
              This Note may be amended only by a writing signed by the Obligor and the Holder.  All covenants
                  and agreements in this Note by the Obligor shall bind its successors and assigns.

               

            

    

    
      	
              b.

               

            	
              In case any provision in this Note shall be invalid, illegal or unenforceable, the validity,
                  legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.  Specifically, if the interest rate on this Note is deemed to exceed some statutory maximum, the interest rate will be reduced
                  to the legal maximum.

               

            

    

    
      	
              c.

               

            	
              The Obligor shall pay any stamp, transfer or other taxes or regulatory fees that may be imposed
                  on any transaction contemplated by this Note.

               

            

    

    
      	
              d.

               

            	
              This Note shall be governed by and construed in accordance with the laws of the State of Nevada
                  without regard to the principles of conflicts of laws thereof.

               

            

    

    
      	
              e.

               

            	
              This Note constitute the full and entire understanding between the Obligor and the Holder with
                  respect to the subject matter hereof and thereof.

               

            

    

    
      	
              f.

               

            	
              This Note is binding on the Obligor, and the Obligor, and all sureties, guarantors and endorsers
                  hereby waive presentment, demand, notice and protest and any defense by reason of an extension of time for payment or other indulgences.  Failure of, or delay by, the Holder to assert any right herein shall not be deemed to be a waiver
                  thereof, nor shall any such failure or delay on any one or more occasions be deemed to prohibit or waive the same or any other right on any future occasion.

               

            

    

    

    

    
      
        

    

     

    IN WITNESS WHEREOF, the Obligor has caused this instrument to be duly executed as of the date first
        written above.

     

    BLACKRIDGE TECHNOLOGY INTERNATIONAL, INC.

     

    

    

     

    By:__________________________________

     

    John H. Bluher, CFO

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