SYSX Sysorex Inc (CE)

On March 31, 2021, the Company and the Lender entered into a Commercial Loan Agreement (“Loan Agreement”) and Promissory Note (“Note”) (collectively, the “Loan Documents”). Under the terms of the Note, the Company must repay the Principal Amount plus any accrued and unpaid interest as a balloon payment no later than June 30, 2021. Interest under the Note will accrue monthly at a rate of one percent (1%) per month (“Interest”) on the outstanding Principal Amount payable Interest only on the 28^th day of each month.

On March 19, 2021, pursuant to the Letter Agreement, and as a condition of the Advance, Systat assigned to Lender that certain Secured Promissory Note of the Company in the principal amount of $3,000,000 with an issuance date of June 30, 2020 (the “Indebtedness”). Pursuant to the Loan Agreement, the Company and Lender have agreed that the Indebtedness shall be cancelled in exchange for the issuance of 5,272,408 shares (“Pledged Shares”) of the Company’s Common Stock, which Pledged Shares shall be held in escrow by the Company’s transfer agent as collateral to secure the repayment obligations owed under the Loan Documents. In connection therewith, and prior to issuance of the Pledged Shares, the Company and the Lender entered into a Stock Pledge Agreement dated as of March 31, 2021 (the “Pledge Agreement”) providing for the pledge of the Pledged Shares to secure full and punctual payment and discharge of the Note, and all accrued or unpaid Interest and fees under the Loan Documents. The Company and the Lender are continuing to negotiate the terms of a Securities Settlement Agreement (“SSA”), which will set forth the terms and conditions regarding when the Pledged Shares shall be issued or become issuable.

Pursuant to the Loan Documents, upon the full and timely repayment of the Principal Amount and all accrued or unpaid Interest and fees, the Lender has agreed that the Pledged Shares shall be deemed returned to the Company and cancelled in full. If the Note is not timely repaid and there is a continuing Event of Default, which cannot be cured, the Pledged Shares shall be timely released to the Lender. Should the Lender achieve repayment from sale of the Pledged Shares including all accrued or unpaid Interest and fees under the Loan Documents, the Note shall be discharged. Until the Note has been discharged, the Lender shall have all other rights available to it as a debtholder in accordance with the Loan Documents, at law and in accordance with principles of equity.

The above summaries of the Loan Agreement, Note, and Pledge Agreement are not intended to be complete, and are qualified in their entirety by reference to the full text of the Loan Agreement and Note, and Pledge Agreement, copies of which are filed herewith as Exhibits 10.1 and 10.2, respectively, and which are incorporated herein by reference.