Document:

Exhibit 10.3

Convertible Promissory Note

  

	
$1,000,000

	
February __, 2018

Blackridge Technology International, Inc. (the "Obligor"), hereby promises to pay to the order of ____________, and its lawful successors and assigns (the "Holder"), the principal sum of One Million and no/100 DOLLARS ($1,000,000.00) on February 31, 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 February 31, 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 $.32 per share or 3,125,000 shares once converted, no sooner than March 31, 2018.    Additionally, as part of this transaction, the Holder is being granted one (1) warrant with a 5-year term which exercises at $.25 cent per share exercise price (cash exercise) with 100% warrant coverage or 3,125,000 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

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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:

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(a) if to the Obligor:

BlackRidge Technology

5390 Kietzke Lane Suite 104

Reno, NV 89511

(b) if to the Holder:

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.

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4svbwaiver

                      WAIVER AND FIRST AMENDMENT TO          AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT         This Waiver  and First Amendment   to Amended  and  Restated Loan and  Security  Agreement (this "Amendment")  is entered into this 141h day of May, 2018 by and among (a)  SILICON   VALLEY     BANK,   a California corporation ("Bank"), and (b) (i) CANCER  GENETICS, INC.,   a Delaware corporation ("Parent") and (ii) GENTRIS, LLC, a Delaware  limited liability company ("Delaware Subsidiary" and together with Parent, individually and  collectively, jointly and severally, the "Borrower").                                        RECITALS         A.     Bank and Borrower have entered into that certain Amended and Restated Loan and  Security Agreement dated as of March 22, 2017 (as the same may from time to time be amended,  modified, supplemented or restated, the "Loan Agreement").         B.     Bank has extended credit to Borrower for the purposes permitted in the Loan  Agreement.         C.     Borrower has requested that Bank waive the Stated Defaults (as defined herein)  under the Loan Agreement and amend the Loan Agreement to (i) reflect the modification fee and  (ii) make certain other revisions to the Loan Agreement as more fully set forth herein.         D.     Bank has agreed to waive the Stated Defaults (as defined herein) under the Loan  Agreement and to so amend certain provisions of the Loan Agreement, but only to the extent, in  accordance with the terms, subject to the conditions and in reliance upon the representations and  warranties set forth below.                                       AGREEMENT         Now, THEREFORE, in consideration of the foregoing recitals and other good and valuable  consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be  legally bound, the parties hereto agree as follows:         1.    Definitions. Capitalized terms used but not defined in this Amendment shall have  the meanings given to them in the Loan Agreement.         2.    Amendments to Loan Agreement.              2.1    Section 6.15 (Equity Events). The Loan  Agreement 1s amended  by  inserting the following new provision to appear as Section 6.15 thereof:               "6.15  Equity Events.                      (a)   On  or before May 31, 2018, provide Bank with evidence in a form              and substance acceptable to Bank in all respects that the First Equity Event has              occurred. Bank hereby acknowledges that the First Equity Event has occurred;              namely, Bank  hereby confirms that, on April 27, 2018, Borrower received  

 

            unrestricted and unencumbered net cash proceeds equal to One Million Six              Hundred Thousand Dollars ($1,600,000.00) from proceeds from the sale of CGI              India.                     (b)  On or before June 30, 2018, provide Bank with evidence in a form              and substance acceptable to Bank in all respects that the Second Equity Event has              occurred."               2.2  Section 6.16 (Modification Fee). The Loan Agreement is amended by  inserting the following new provision to appear as Section 6.16 thereof:               "6.16 Modification Fee. Pay  to Bank  a fully-earned, non-refundable        modification fee of Fifty Thousand Dollars ($50,000.00) (the "Modification Fee") earned        as of the First Amendment Date and due and payable as follows: (a) Twenty-Five Thousand        Dollars ($25,000.00) shall be paid on the First Amendment Date (the "Initial Modification        Fee"), and (b) Twenty-Five Thousand Dollars ($25,000.00) shall be paid on the earliest to        occur of (i) the Second Equity Event, (ii) the termination of this Agreement, (iii) the        Revolving Line Maturity Date, or (iv) the occurrence of an Event of Default."               2.3  Section 13 (Definitions). The following term and its definition set forth  in Section 13.1 is amended in its entirety and replaced with the following:               "    "First Equity Event" means confirmation by Bank that Borrower has              received, on or after April 27, 2018, but on or prior to May 31, 2018, unrestricted              and unencumbered net cash proceeds in an amount of at least One Million Five              Hundred Thousand Dollars ($1,500,000.00) from (a) the issuance and sale by              Borrower of its equity securities or Subordinated Debt to investors acceptable to              Bank or (b) proceeds from the sale of CGI India."               "    "Second Equity Event" means confirmation by Bank that Borrower has             received, after the occurrence of the First Equity Event, but on or prior to June 30,              2018, unrestricted and unencumbered net cash proceeds in an amount of at least             Two  Million Five Hundred Thousand Dollars ($2,500,000.00) from the issuance              and sale by Borrower of its equity securities or Subordinated Debt to investors              acceptable to Bank."               "    "Obligations" are Borrower's obligations to pay when due any debts,             principal, interest, fees, Bank Expenses, the Anniversary Fee, the Unused             Revolving Line Facility Fee, the Modification Fee, and other amounts Borrower             owes Bank now or later, whether under this Agreement, the other Loan Documents,             or otherwise, including, without limitation, any interest accruing after Insolvency             Proceedings begin and debts, liabilities, or obligations of Borrower assigned to             Bank, and to perform Borrower's duties under the Loan Documents."              2.4   Section 13 (Definitions). The Loan Agreement shall be amended by  inserting the following new definitions to appear alphabetically in Section 13.1 thereof:                                         2  

 

            "     "First Amendment Date" is May 14, 2018."                     "Initial Modification Fee" is defined in Section 6.16."               "     "Modification Fee" is defined in Section 6.16."         3.    Limitation of Amendments.               3.1   The amendments set forth in Section 2 above are effective for the purposes  set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent  to any amendment, waiver or modification of any other term or condition of any Loan Document,  or (b) otherwise prejudice any right or remedy which Bank may now have or may have in the  future under or in connection with any Loan Document.               3.2   This Amendment shall be construed in connection with and as part of the  Loan Documents and all terms, conditions, representations, warranties, covenants and agreements  set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and  shall remain in full force and effect.         4.    Waiver. Bank hereby waives (a) Borrower's existing defaults under the Loan  Agreement by virtue of Borrower's failure to comply with the Adjusted EBITDA covenant set  forth in Section 6.9(a) thereof as of the months ended December 31, 2017, January 31, 2018,  February 28, 2018, and March 31, 2018 (collectively, the "Existing Defaults") and (b) Borrower's  anticipated default under the Loan Agreement by virtue of Borrower's failure to comply with the  Adjusted EBITDA covenant set forth in Section 6.9(a) thereof as of the month ended April 30,  2018 (the "Anticipated Default"; the Anticipated Default and the Existing Defaults are  collectively, the "Stated Defaults"). Bank's waiver of Borrower's compliance of the Stated  Defaults shall apply only to the foregoing specific periods. Borrower hereby acknowledges and  agrees that except as specifically provided herein, nothing in this Section 4 or anywhere in this  Amendment shall be deemed or otherwise construed as a waiver by Bank of any of its rights and  remedies pursuant to the Loan Documents, applicable law or otherwise.         5.    Consent. Pursuant to Section 7 .1 and Section 7 .3 of the Loan Agreement, Bank  hereby consents to the sale of CGI India (the "Sale"), and pursuant to Section 6.4 of the Loan  Agreement, waives the requirement that all proceeds arising from the Sale be applied to the  Obligations. The consent and waiver provided for herein are each a one-time consent and waiver  relating only to the Sale, and shall not be deemed to constitute an agreement by the Bank to any  future consent or waiver of the terms and conditions of the Loan Agreement.         6.    Representations and Warranties. To induce Bank to enter into this Amendment,  Borrower hereby represents and warrants to Bank as follows:               6.1  Immediately after giving effect to this Amendment (a) the representations  and warranties contained in the Loan Documents are true, accurate and complete in all material  respects as of the date hereof (e xcept to the extent such representations and warranties relate to an  earlier date, in which case they are true and correct as of such date), and (b) no Event of Default  has occurred and is continuing;                                        3  

 

              6.2   Borrower  has the power  and authority to execute and deliver this   Amendment  and  to perform its obligations under the Loan Agreement, as amended by this   Amendment;                 6.3   The  organizational documents of Borrower delivered to Bank on the   Effective Date remain true, accurate and complete and have not been amended, supplemented or   restated and are and continue to be in full force and effect;                 6.4   The execution and delivery by Borrower of this Amendment  and the   performance by Borrower of its obligations under the Loan Agreement, as amended by this   Amendment, have been duly authorized;                 6.5   The execution and delivery by Borrower of this Amendment  and the   performance by Borrower of its obligations under the Loan Agreement, as amended by this   Amendment,  do not and will not contravene (a) any law or regulation binding on or affecting   Borrower, (b) any contractual restriction with a Person binding on Borrower, (c) any order,  judgment or decree of any court or other governmental or public body or authority, or subdivision   thereof, binding on Borrower, or (d) the organizational documents of Borrower;                 6.6   The execution and delivery by Borrower of this Amendment  and the   performance by Borrower of its obligations under the Loan Agreement, as amended by this   Amendment, do not require any order, consent, approval, license, authorization or validation of,   or filing, recording or registration with, or exemption by any governmental or public body or   authority, or subdivision thereof, binding on Borrower, except as already has been obtained or   made; and                 6.7   This Amendment has been duly executed and delivered by Borrower and is   the binding obligation of Borrower, enforceable against Borrower in accordance with its terms,   except as such enforceability may be limited by bankruptcy, insolvency, reorganization,   liquidation, moratorium or other similar laws of general application and equitable principles   relating to or affecting creditors' rights.          7.    No  Defenses of Borrower. In consideration of the foregoing, Borrower hereby   acknowledges and agrees that it has no offsets, defenses, causes of action, suits, damages, claims,   or counterclaims against Bank, SVB Financial Group, or any of their respective officers, directors,  employees, attorneys, representatives, predecessors, successors, and assigns (collectively, the   "Bank Released Parties") with respect to the Obligations, the Loan Documents, the Collateral,   any Bank Services Agreement, any contracts, promises, commitments, or other agreements to  provide, to arrange for, or to obtain loans or other financial accommodations to or for Borrower,   or otherwise, and that if Borrower now has, or ever did have, any offsets, defenses, causes of   action, suits, damages, claims, or counterclaims against one or more of the Bank Released Parties,   at law or in equity, whether known or unknown, from the beginning of the world through this date   and through the time of execution of this Amendment (collectively, the "Released Claims") all of  them are hereby expressly WAIVED and Borrower hereby RELEASES the Bank Released Parties  from  any liability therefor. Borrower hereby irrevocably agrees to refrain from directly or   indirectly asserting any claim or demand or commencing (or causing to be commenced) any suit,  action, arbitration or proceeding of any kind, in any court or before any tribunal or arbiter or                                             4  

 

arbitration panel, against any Bank Released Party as to any of the Released Claims.         8.    Integration. This Amendment and the Loan Documents represent the entire  agreement about this subject matter and supersede prior negotiations or agreements. All prior  agreements, understandings, representations, warranties, and negotiations between the parties  about the subject matter of this Amendment and the Loan Documents merge into this Amendment  and the Loan Documents.         9.    Counterparts. This Amendment may be executed in any number of counterparts  and all of such counterparts taken together shall be deemed to constitute one and the same  instrument.         10.   Effectiveness. This Amendment shall be deemed effective upon (a) the due  execution and delivery to Bank of this Amendment by each party hereto, and (b) Borrower's  payment to Bank of (i) the Initial Modification Fee and (ii) Bank's legal fees and expenses incurred  in connection with this Amendment.                               [Signature page follows.]                                         5  

 

       IN \VrrNESS WHEREOF,    the patties hereto have caused this Amendment to be duly  executed and delivered as of the date first written above.    BANK                                     BORROWER    SILICON  VALLEY BANK                     CANCER    GENETICS,   INC.     By:~~---                        -·       By: ·-- -- --  - --------- ------  Name: __ ;t,/4 fb._11',""- .. M CA.'-"X-------- - ­ Name:   Title: _V;u:,__.fn.,:,J ..... __ -1- - ----------- Title:                                             GENTRIS, LLC                                             By: --------·---------   - - - - -                                           Name: ---- ~-.--- - -                                           Title:  

 

      IN WITNESS   WHEREOF,   the parties hereto have caused this Amendment to be duly  executed and delivered as of the date first written above.    BANK                                    BORROWER    SILICON  VALLEY   BANK                  CANCER GENETICS,      INC.     By: -------·- ·--·-----.. ---···-----··----·------··- By : _f-_tzJ--R~A ,4/Jt) t ;!r{;t f2   Na 111 e:                               Nam~!i?i·h\J     A- /2c)f.x 'l l..,:[ s    Title:                                  Title: ___5 :!;P_ t~1__  £_\i_~)(l(.;T'~.(J''OI                                            GENTRJS,   LLC                                                    t )   d )                                           By : r\)-ru_A,/{ /Jokl ~                                           NamttJbd,J     Vt /&)  f5 [:tl t5·                                                  ·- - - - - --~·                                           Ti tle : ___¢;:fi;.0  'T ( .fli.ts<f.V:ts-e<.f'd.ti•(

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