Form 8-K
8-K — DSS, INC.
Accession: 0001493152-26-014289
Filed: 2026-03-31
Period: 2026-03-26
CIK: 0000771999
SIC: 2650 (PAPERBOARD CONTAINERS & BOXES)
Item: Entry into a Material Definitive Agreement
Item: Financial Statements and Exhibits
Documents
8-K — form8-k.htm (Primary)
EX-10.1 (ex10-1.htm)
EX-10.2 (ex10-2.htm)
EX-10.3 (ex10-3.htm)
XML — IDEA: XBRL DOCUMENT (R1.htm)
8-K
8-K (Primary)
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0000771999
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2026-03-26
2026-03-26
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): March 26, 2026
DSS,
INC.
(Exact
name of registrant as specified in its charter)
New
York
001-32146
16-1229730
(State
or other jurisdiction
of
incorporation)
(Commission
File
Number)
(IRS
Employer
Identification
No.)
275
Wiregrass Pkwy,
West
Henrietta, NY
14586
(Address
of principal executive offices)
(Zip
Code)
Registrant’s
telephone number, including area code: (585) 325-3610
N/A
(Former
name or former address, if changed since last report.)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
Ticker
symbol(s)
Name
of each exchange on which registered
Common
Stock, $0.02 par value per share
DSS
The
NYSE American LLC
Indicate
by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933
or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01 Entry into a Material Definitive Agreement.
Securities
Purchase Agreement with Alset International Limited
On
March 26, 2026, DSS, Inc. (the “Company”) entered into a securities purchase agreement (the “SPA”) with Alset
International Limited (“Alset International Limited”), a majority-owned subsidiary of Alset Inc., pursuant to which Alset
International Limited will loan the Company $2,450,000, in exchange for a convertible promissory note (the “Note”) and warrant
to purchase 16,554,055 shares of the Company’s common stock (the “Warrants”).
The
Note, SPA and Warrants are collectively referred to herein as the “Transaction Documents”.
The
closing of the transactions contemplated by the Transaction Documents is subject to certain closing conditions, including approval of
the Company’s stockholders.
The
Note will bear a simple interest at a rate of 3% per annum. Pursuant to the terms of the Note, Alset International Limited may convert
any outstanding principal and accrued interest into shares of the Company’s common stock at a conversion price of $0.74 per share
at any time prior to the maturity date, which is five (5) years from the date of issuance.
The
Warrants entitle Alset International Limited to purchase up to 16,554,055 shares of the Company’s common stock at an exercise price
of $0.93. The Warrants expire on their fifth anniversary.
Related
Party Transaction
The
Company and Alset Inc. are related parties under common control of Chan Heng Fai, who serves as Chairman of the Company and is also Chairman
and Chief Executive Officer of Alset Inc. Chan Tung Moe, a director and Co-Chief Executive Officer of Alset Inc., is also a director
of the Company. Lim Sheng Hon Danny, a director and officer of Alset Inc., is also a director of the Company. Certain independent directors
of Alset Inc. also serve as directors of the Company.
The
Transaction Documents were approved by the Company’s Board of Directors and, where applicable, its Audit Committee. Any interested
directors recused themselves from deliberations and voting regarding the Transaction Documents.
The
foregoing summary does not purport to be complete and is qualified in its entirety by reference to the Transaction Documents, copies
of which are filed as Exhibits 10.1, 10.2 and 10.3 hereto and incorporated herein by reference.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits:
Number
Description
10.1
Form of Common Stock Purchase Warrant issued to Alset International Limited, dated as of March 26, 2026
10.2
Securities Purchase Agreement, between DSS, Inc. and Alset International Limited, dated as of March 26, 2026
10.3
Convertible Promissory Note issued by DSS, Inc., dated as of March 26, 2026
104
Cover
page Interactive Data File (embedded within the Inline XBRL document).
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Current Report on Form 8-K
to be signed on its behalf by the undersigned hereunto duly authorized.
DSS,
INC.
Date:
March 31, 2026
By:
/s/
Jason Grady
Name:
Jason
Grady
Title:
Interim
Chief Executive Officer
EX-10.1
EX-10.1
Filename: ex10-1.htm · Sequence: 2
Exhibit
10.1
COMMON
STOCK PURCHASE WARRANT DSS, INC.
Warrant
Shares: 16,554,055
Issue
Date: [_____________]
THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, Alset International Limited or their
assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter
set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on or prior to 5:00PM (New York
City time) on the fifth anniversary of the Issue Date (the “Termination Date”) (or if any portion of this Warrant
is redeemed, on the Redemption Date (as defined below) for such portion) but not thereafter, to subscribe for and purchase from DSS,
Inc., a New York corporation (the “Company”), up to 16,554,055 shares (as subject to adjustment hereunder, the “Warrant
Shares”) of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise
Price, as defined in Section 2(b). This Warrant shall initially be issued and maintained in the form of a security held in book-entry
form.
Section
1. Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated
in this Section 1:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally
are open for use by customers on such day.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.02 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date hereof.
“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
“Warrants”
means this Warrant and other Common Stock purchase warrants issued by the Company pursuant to the Registration Statement.
Section
2. Exercise.
a) Exercise
of Warrant. Subject to the provisions of Section 2(e) herein, exercise of the purchase
rights represented by this Warrant may be made, in whole or in part, at any time or times
on or after the Initial Exercise Date and on or before the Termination Date, or prior to
the date fixed specified in the appropriate Redemption Notice for redemption of this Warrant,
by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail
(or e- mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice
of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number
of Trading Days comprising the standard settlement period following the date of exercise
as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified
in the applicable Notice of Exercise by wire transfer of immediately available funds or cashier’s
check drawn on a United States bank unless a cashless exercise is specified in the applicable
Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion
guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required.
Notwithstanding anything herein to the contrary, the Holder shall not be required to physically
surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares
available hereunder and the Warrant has been exercised in full, in which case, the Holder
shall surrender this Warrant to the Company for cancellation within three (3) Trading Days
of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises
of this Warrant resulting in purchases of a portion of the total number of Warrant Shares
available hereunder shall have the effect of lowering the outstanding number of Warrant Shares
purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.
The Holder and the Company shall maintain records showing the number of Warrant Shares purchased
and the date of such purchases. The Company shall deliver any objection to any Notice of
Exercise within one (1) Trading Day of receipt of such notice. Notwithstanding the foregoing,
with respect to any Notice(s) of Exercise delivered on or prior to 4:00 p.m. (New York City
time) on the Trading Date prior to the Initial Exercise Date, which may be delivered at any
time after the time of execution of the Purchase Agreement, the Company agrees to deliver
the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial
Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for
purposes hereunder, provided that payment of the aggregate Exercise Price (other than in
the case of a cashless exercise) is received by such Warrant Share Delivery Date. The Holder
and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of
the provisions of this paragraph, following the purchase of a portion of the Warrant Shares
hereunder, the number of Warrant Shares available for purchase hereunder at any given time
may be less than the amount stated on the face hereof.
b) Exercise
Price. The exercise price per share of Common Stock under this Warrant shall be $0.93,
subject to adjustment hereunder (the “Exercise Price”).
c) Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part,
the Company shall, at the request of a Holder and upon surrender of this Warrant certificate,
at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant,
which new Warrant shall in all other respects be identical with this Warrant.
d) Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder
the Warrant Shares by the Warrant Share Delivery Date, then the Holder will have the right
to rescind such exercise.
e) No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares
shall be issued upon the exercise of this Warrant. As to any fraction of a share which the
Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at
its election, either pay a cash adjustment in respect of such final fraction in an amount
equal to such fraction multiplied by the Exercise Price or round up to the next whole share.
f) Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder
for any issue or transfer tax or other incidental expense in respect of the issuance of such
Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant
Shares shall be issued in the name of the Holder or in such name or names as may be directed
by the Holder; provided, however, that, in the event that Warrant Shares are
to be issued in a name other than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached hereto duly executed by the
Holder and the Company may require, as a condition thereto, the payment of a sum sufficient
to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer
Agent fees required for same-day processing of any Notice of Exercise.
g) Closing
of Books. The Company will not close its stockholder books or records in any manner
which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
Section
3. Certain Adjustments.
a) Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding:
(i) pays a stock dividend or otherwise makes a distribution or distributions on shares of
its Common Stock or any other equity or equity equivalent securities payable in shares of
Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock
issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares
of Common Stock into a larger number of shares, (iii) combines (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv)
issues by reclassification of shares of the Common Stock any shares of capital stock of the
Company, then in each case each of the Exercise Price and the Redemption Price (as defined
below) shall be multiplied by a fraction of which the numerator shall be the number of shares
of Common Stock (excluding treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock outstanding immediately
after such event, and the number of shares issuable upon exercise of this Warrant shall be
proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain
unchanged. Any adjustment made pursuant to this Section 3 shall become effective immediately
after the record date for the determination of stockholders entitled to receive such dividend
or distribution and shall become effective immediately after the effective date in the case
of a subdivision, combination or re-classification.
b) Pro
Rata Distributions. During such time as this Warrant is outstanding, if the Company shall
declare or make any dividend or other distribution of its assets (or rights to acquire its
assets) to all (or substantially all) of holders of shares of Common Stock, by way of return
of capital or otherwise (including, without limitation, any distribution of cash, stock or
other securities, property or options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall
be entitled to participate in such Distribution to the same extent that the Holder would
have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof,
including without limitation, the Beneficial Ownership Limitation) immediately before the
date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the
participation in such Distribution.
c) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly
or indirectly, in one or more related transactions effects any merger or consolidation of
the Company with or into another Person, (ii) the Company or any Subsidiary, directly or
indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition
of all or substantially all of its assets in one or a series of related transactions, (iii)
any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company
or another Person) is completed pursuant to which holders of Common Stock are permitted to
sell, tender or exchange their shares for other securities, cash or property and has been
accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company,
directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other securities,
cash or property, or (v) the Company, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination (including,
without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement)
with another Person or group of Persons whereby such other Person or group acquires more
than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or associated or affiliated
with the other Persons making or party to, such stock or share purchase agreement or other
business combination) (each a “Fundamental Transaction”), then, upon any
subsequent exercise of this Warrant, the Holder shall have the right to receive, for each
Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence
of such Fundamental Transaction, at the option of the Holder, the number of shares of Common
Stock of the successor or acquiring corporation or of the Company, if it is the surviving
corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares
of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental
Transaction (without regard to any limitation set forth herein on the exercise of this Warrant).
For purposes of any such exercise, the determination of the Exercise Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Transaction, and the
Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable
manner reflecting the relative value of any different components of the Alternate Consideration.
Upon the consummation of any Fundamental Transaction, the Redemption Price shall likewise
be appropriately adjusted as the Board of the Directors of the Company may reasonably determine.
If holders of Common Stock are given any choice as to the securities, cash or property to
be received in a Fundamental Transaction, then the Holder shall be given the same choice
as to the Alternate Consideration it receives upon any exercise of this Warrant following
such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the “Successor Entity”)
to assume in writing all of the obligations of the Company under this Warrant in accordance
with the provisions of this Section 3 pursuant to written agreements in form and substance
reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay)
prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to
the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a
written instrument substantially similar in form and substance to this Warrant which is exercisable
for a corresponding number of shares of capital stock of such Successor Entity (or its parent
entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise
of this Warrant (without regard to any limitations on the exercise of this Warrant) prior
to such Fundamental Transaction, and with an exercise price which applies the exercise price
hereunder to such shares of capital stock (but taking into account the relative value of
the shares of Common Stock pursuant to such Fundamental Transaction and the value of such
shares of capital stock, such number of shares of capital stock and such exercise price being
for the purpose of protecting the economic value of this Warrant immediately prior to the
consummation of such Fundamental Transaction), and which is reasonably satisfactory in form
and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the
Successor Entity shall succeed to, and be substituted for (so that from and after the date
of such Fundamental Transaction, the provisions of this Warrant referring to the “Company”
shall refer instead to the Successor Entity), and may exercise every right and power of the
Company and shall assume all of the obligations of the Company under this Warrant with the
same effect as if such Successor Entity had been named as the Company herein.
d) Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th
of a share, as the case may be. For purposes of this Section 3, the number of shares of Common
Stock deemed to be issued and outstanding as of a given date shall be the sum of the number
of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
i.
Adjustment to Exercise Price or Redemption Price. Whenever the Exercise Price or the Redemption Price is adjusted pursuant
to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the
Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement
of the facts requiring such adjustment.
ii.
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any
sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into
other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding
up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at
its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior
to the applicable record or effective date hereinafter specified, a notice (unless such information is filed with the Commission, in
which case a notice shall not be required) stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to
be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to
deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to
be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information
regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a
Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such
notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
e) Voluntary
Adjustment By Company. Subject to the rules and regulations of the Trading Market, the
Company may at any time during the term of this Warrant, subject to the prior written consent
of the Holder, reduce the then current Exercise Price to any amount and for any period of
time deemed appropriate by the board of directors of the Company.
Section
4. Transfer of Warrant.
a)
Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable,
in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient
to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not
so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required
to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the
Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for
the purchase of Warrant Shares without having a new Warrant issued.
b)
New Warrants. If this Warrant is not held in global form through DTC (or any successor depositary), this Warrant may be divided
or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying
the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance
with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a
new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants
issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except
as to the number of Warrant Shares issuable pursuant thereto.
c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose
(the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and
treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to
the Holder, and for all other purposes, absent actual notice to the contrary.
Section
5. Miscellaneous.
a)
No Rights as Stockholder until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting
rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof, except as expressly set forth in Section
3. Including if the Company is for any reason unable to issue and deliver Warrant Shares upon exercise of this Warrant as required pursuant
to the terms hereof, in no event shall the Company be required to net cash settle an exercise of this Warrant or cash settle in any other
form.
b)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant,
shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the
Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant
or stock certificate.
c)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding
Business Day.
d)
Authorized Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized
and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase
rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers
who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The
Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be
listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith,
be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in
respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary
or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the
foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof,
as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction thereof.
e)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles
of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of
the transactions contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers,
shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the State
of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the State
of New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner
permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing
party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. Notwithstanding the foregoing,
nothing in this paragraph shall limit or restrict the federal district court in which a Holder may bring a claim under the federal securities
laws.
f)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and
the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. No provision of this Warrant
shall be construed as a waiver by the Holder of any rights which the Holder may have under the federal securities laws and the rules
and regulations of the Commission thereunder. Without limiting any other provision of this Warrant, if the Company willfully and knowingly
fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the
Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’
fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies hereunder.
h) Notices.
Any and all notices or other communications or deliveries to be provided by the Holders hereunder
including, without limitation, any Notice of Exercise, shall be in writing and delivered
personally, by facsimile or e-mail, or sent by a nationally recognized overnight courier
service, addressed to the Company, at 275 Wiregrass Pkwy, Henrietta, New York 14586 Attention:
Chief Financial Officer, email address: todd.macko@dssworld.com, or such other facsimile
number, email address or address as the Company may specify for such purposes by notice to
the Holders. Any and all notices or other communications or deliveries to be provided by
the Company hereunder shall be in writing and delivered personally, by facsimile or e-mail,
or sent by a nationally recognized overnight courier service addressed to each Holder at
the facsimile number, e-mail address or address of such Holder appearing on the books of
the Company. Any notice or other communication or deliveries hereunder shall be deemed given
and effective on the earliest of (i) the time of transmission, if such notice or communication
is delivered via facsimile at the facsimile number or via e-mail at the e-mail address set
forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next
Trading Day after the time of transmission, if such notice or communication is delivered
via facsimile at the facsimile number or via e-mail at the e-mail address set forth in this
Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on
any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (iv) upon actual receipt by the party
to whom such notice is required to be given. To the extent that any notice provided hereunder
constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries,
the Company shall simultaneously file such notice with the Commission pursuant to a Current
Report on Form 8-K.
i)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of
the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.
j)
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law would be adequate.
k)
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted
assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant
and shall be enforceable by the Holder or holder of Warrant Shares.
l)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on
the one hand, and the Holder, on the other hand.
m)
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
n)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed
a part of this Warrant.
[signature
page follows]
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first
above indicated.
DSS, INC.
By:
/s/ Jason Grady
Name:
Jason Grady
Title:
Interim Chief Executive Officer
NOTICE
OF EXERCISE
To:
DSS, Inc.
(1)
The undersigned hereby elects to purchase ______________ Warrant Shares of the Company pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes,
if any.
Payment
shall take the form of in lawful money of the United States.
Please
issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
Name
of Investing Entity or Person: ___________________
Signature
of Authorized Signatory: ___________________
Name
of Authorized Signatory: ___________________
Title
of Authorized Signatory: ___________________
Date:
___________________
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to:
Name:
_______________________________________
(Please
Print)
Address:
_____________________________________
(Please
Print)
Phone
Number: ________________________________
Address: ________________________________
Dated:
_______________________________________
Holder’s
Signature: _____________________________
Holder’s
Address: ______________________________
(Please
Print)
(Signature Guaranteed): Date:
___________________
Signature
to be guaranteed by an authorized officer of a chartered bank, trust company or medallion guaranteed by an investment dealer who is a
member of a recognized stock exchange.
REDEMPTION
NOTICE
To:
Name:
Address:
DSS,
Inc., a New York corporation (the “Company”) hereby irrevocably elects to exercise its redemption right under the Common
Stock Purchase Warrant dated as of [______________], issued by the Company, and hereby redeems, for $[ ] per Warrant
Share (the “Redemption Price”), at 5:00 p.m. (New York City time) on ,
20 (the “Redemption Date”), [the portion of such Warrant that is exercisable for
Warrant Shares][such Warrant in full]. Please be aware that exercise of the Holder’s
right to purchase Common Stock with respect to the portion of such Warrant so redeemed will only be accepted, in accordance with the
terms of Section 2 of the Warrant, until 5:00 p.m. New York City time on the Redemption Date. Thereafter, the holder of the Warrant will
only be entitled to receive the Redemption Price with respect to the portion of the Warrant so redeemed.
Dated:
,
DSS, INC.
By:
Name:
Title:
EX-10.2
EX-10.2
Filename: ex10-2.htm · Sequence: 3
Exhibit
10.2
SECURITIES
PURCHASE AGREEMENT
This
Securities Purchase Agreement (this “Agreement”) is dated as of March 26, 2026, between DSS, Inc. a New York corporation
(the “Company”), and Alset International Limited (including its successors and assigns, the “Purchaser”).
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act (as defined below),
and Rule 506 promulgated thereunder, the Company desires to issue and sell to the Purchaser, and the Purchaser desires to purchase from
the Company, securities of the Company, consisting of a convertible promissory note in the amount of $2,450,000 that shall be convertible
into shares of the Common Stock of the Company at a conversion price set at $0.74 per share, subject to the terms and conditions set
forth therein (the “Note”) and warrants to purchase 16,554,055 shares of the Common Stock of the Company (which the
parties hereto acknowledge is equal to five times the shares initially issuable upon conversion of the Note, prior to any interest accrued
or adjustment) at an exercise price set at $0.93 per share (the “Warrants”) (representing a 25% premium to the conversion
price), subject to the terms and conditions set forth in the Warrant Agreement (the “Warrant Agreement”), in each
case as more fully described in this Agreement, for a total subscription price of $2,450,000 U.S. Dollars.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Company and the Purchaser agrees as follows:
ARTICLE
I.
DEFINITIONS
1.1
Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms
have the meanings set forth in this Section 1.1:
“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.4.
“Action”
shall have the meaning ascribed to such term in Section 3.1(j).
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial
banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the
direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York generally are open for use by customers on such day.
1
“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties
thereto, and all conditions precedent to (i) the Purchaser’s obligations to pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Securities, in each case, have been satisfied or waived.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.02 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Disclosure
Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time) and
before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the
date hereof, and (ii) if this Agreement is signed between midnight (New York City time) and 9:00 a.m. (New York City time) on any Trading
Day, no later than 9:01 a.m. (New York City time) on the date hereof.
“Effective
Date” means the earliest of the date that (a) all of the Shares have been sold pursuant to Rule 144 or may be sold pursuant
to Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 and
without volume or manner-of-sale restrictions, (b) following the one year anniversary of the Closing Date provided that a holder of Shares
is not an Affiliate of the Company, or (c) all of the Shares may be sold pursuant to an exemption from registration under Section 4(a)(1)
of the Securities Act without volume or manner-of-sale restrictions and the Company’s counsel has delivered to such holders a standing
written unqualified opinion that resales may then be made by such holders of the Shares pursuant to such exemption which opinion shall
be in form and substance reasonably acceptable to such holders.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).
“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(bb).
2
“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).
“Legend
Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).
“Liens”
means a lien, charge pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(n).
“Note”
has the meaning provided in the recitals hereof.
“Per
Share Purchase Price” equals the Conversion Rate as defined in the Note, subject to adjustment for reverse and forward stock
splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.6.
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).
“Securities”
means the Note, the Warrants and the Shares underlying the Note and Warrants.
3
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shares”
means the shares of Common Stock issued or issuable to the Purchaser pursuant to this Agreement upon the exercise of the Warrant or conversion
of the Note.
“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be
deemed to include locating and/or borrowing shares of Common Stock).
“Subscription
Amount” means $2,450,000 in United States dollars and in immediately available funds.
“Subsidiary”
means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date hereof.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York
Stock Exchange (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Note, the Warrant Agreement and all exhibits and schedules thereto and hereto and any
other documents or agreements executed in connection with the transactions contemplated hereunder.
“Transfer
Agent” means Equiniti Trust Company, LLC the current transfer agent of the Company with a phone number of 1-800-937-5449 and
any successor transfer agent of the Company.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:00 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or
a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common
Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Purchaser, the fees and expenses of which shall be paid by the Company.
“Warrant”
has the meaning provided in the recitals hereof.
“Warrant
Agreement” has the meaning provided in the recitals hereof.
4
ARTICLE
II.
PURCHASE
AND SALE
●
Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the
execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchaser agrees to purchase (i)
the Note; and (ii) warrants to purchase 16,554,055 shares of the Common Stock of the Company exercisable immediately at an exercise price
set at $0.93 per share and expiring on the fifth anniversary of the Issue Date as described in the Warrant Agreement. The Purchaser’s
Subscription Amount shall be paid via wire transfer or a certified check of immediately available funds to the Company. The Company shall
deliver to the Purchaser the Note and Warrants pursuant to the Warrant Agreement, as determined pursuant to Section 2.1(a) and the Company
and the Purchaser shall deliver the other items set forth in Section 2.1 deliverable at the Closing. Upon satisfaction or waiver of the
covenants and conditions set forth in Section 2.2, the Closing shall occur at such location as the parties shall mutually agree.
2.1
Deliveries.
(a)
On or prior to the Closing Date, the Company shall deliver or cause to be delivered to the Purchaser the following:
(i)
this Agreement duly executed by the Company;
(ii)
a Note, the form of which is attached hereto as Exhibit A, registered in the name of such Investor (or its designee), with
a principal amount equal to such Investor’s original principal amount, duly executed by an authorized officer on behalf of the
Company;
(iii)
a Warrant Agreement in the name of such Investor (or its designee), the form of which is attached hereto as Exhibit B,
duly executed by an authorized officer on behalf of the Company; and
(iv)
the Company shall have provided the Purchaser with the Company’s wire instructions, on Company letterhead and executed by the Chief
Executive Officer or Chief Financial Officer.
(b)
On or prior to the Closing Date, the Purchaser shall deliver or cause to be delivered to the Company, the following:
(i)
this Agreement duly executed by the Purchaser; and
(ii)
the Purchaser’s Subscription Amount by wire transfer to the account specified in the Escrow Agreement.
5
2.2
Closing Conditions.
(a)
The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i)
The Company shall have received such stockholder approval as shall be required by applicable law, and the requirements of any stock exchange
on which the Company’s stock shall be listed;
(ii)
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) on the Closing Date of the representations and warranties of the Purchaser contained herein (unless as of a
specific date therein in which case they shall be accurate as of such date);
(iii)
all obligations, covenants and agreements of the Purchaser required to be performed at or prior to the Closing Date shall have been performed;
and
(iv)
the delivery by the Purchaser of the items set forth in Section 2.1(b) of this Agreement.
(b)
The obligations of the Purchaser hereunder in connection with the Closing are subject to the following conditions being met:
(i)
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless
as of a specific date therein in which case they shall be accurate as of such date);
(ii)
all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;
(iii)
the delivery by the Company of the items set forth in Section 2.1(a) of this Agreement;
(iv)
there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and
(v)
from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall
not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities
nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of
the Purchaser, makes it impracticable or inadvisable to purchase the Securities at the Closing.
6
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES
3.1
Representations and Warranties of the Company. The Company hereby makes the following representations and warranties to the Purchaser:
(a)
Subsidiaries. The Company owns, directly or indirectly, all of the capital stock or other equity interests of each of its Subsidiaries
free and clear of any Liens (except as disclosed in the SEC Reports), and all of the issued and outstanding shares of capital stock of
each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase
securities. If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents
shall be disregarded.
(b)
Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any
Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned
by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could
not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction
Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise)
of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in
any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material
Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or qualification.
(c)
Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of
the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no
further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith
other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been
(or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will
constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as
limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable
law.
7
(d)
No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby
do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles
of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or
assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments,
acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by
which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict
with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations),
or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and
(iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.
(e)
Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the notice
and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities and the listing of the Shares for
trading thereon in the time and manner required thereby, and (ii) the filing of Form D with the Commission and such filings as are required
to be made under applicable state securities laws (collectively, the “Required Approvals”).
(f)
Issuance of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company
other than restrictions on transfer provided for in the Transaction Documents. The Company has reserved from its duly authorized capital
stock the maximum number of shares of Common Stock issuable pursuant to this Agreement.
8
(g)
Capitalization. The Company has not issued any capital stock since its most recently filed periodic report under the Exchange
Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares
of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise
of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has
any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated
by the Transaction Documents. Except as a result of the purchase and sale of the Securities, there are no outstanding options, warrants,
scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible
into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock or the
capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is
or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. The issuance
and sale of the Securities will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any
Person (other than the Purchaser). There are no outstanding securities or instruments of the Company or any Subsidiary that contain any
redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation
rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital
stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal
and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to
subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors or others is required
for the issuance and sale of the Securities. There are no stockholders agreements, voting agreements or other similar agreements with
respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any
of the Company’s stockholders.
(h)
SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the
two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the
foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein
as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any
such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not misleading. The Company has never been an issuer
subject to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at
the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles
applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial
statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.
9
(i)
Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as set forth in the SEC Reports, (i) there has been no event, occurrence or development that has had or
that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent
or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice
and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings
made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend
or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any
shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant
to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment
of information. Except for the issuance of the Securities contemplated by this Agreement, no event, liability, fact, circumstance, occurrence
or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or
their respective businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed
by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed
at least 1 Trading Day prior to the date that this representation is made.
(j)
Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of
the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an
“Action”). Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject
of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary
duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission
involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other
order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the
Securities Act.
10
(k)
Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary
is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary
information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third
party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local
and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours,
except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(l)
Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that
has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor
has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound
(whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree, or order of any court, arbitrator
or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental
authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational
health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be
expected to result in a Material Adverse Effect.
(m)
Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating
to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface
strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or
toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well
as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders,
permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have
received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses;
and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and
(iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
11
(n)
Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports,
except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or
modification of any Material Permit.
(o)
Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them
and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries,
in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment
of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and the payment of which
is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries
are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.
(p)
Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights
and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which
the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None
of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights
has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date
of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included
within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe
upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. To the knowledge
of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any
of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(q)
Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount. Neither the Company
nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase
in cost.
12
(r)
Transactions with Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company
or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to
any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to
or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director
or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment
of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other
employee benefits, including stock option agreements under any stock option plan of the Company.
(s)
Certain Fees. No other brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary
to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction Documents. The Purchaser shall have no obligation with respect to any fees or with respect
to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with
the transactions contemplated by the Transaction Documents.
(t)
Private Placement. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 3.2, no
registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchaser as contemplated
hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.
(u)
Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities,
will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.
(v)
Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and
the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration
of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating
such registration. The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which
the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue
to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer
through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to
the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.
13
(w)
Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order
to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the
laws of its state of incorporation that is or could become applicable to the Purchaser as a result of the Purchaser and the Company fulfilling
their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s
issuance of the Securities and the Purchaser’s ownership of the Securities.
(x)
Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
the Company confirms that neither it nor any other Person acting on its behalf has provided the Purchaser or their agents or counsel
with any information that it believes constitutes or might constitute material, non-public information. The Company understands and confirms
that the Purchaser will rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure
furnished by or on behalf of the Company to the Purchaser regarding the Company and its Subsidiaries, their respective businesses and
the transactions contemplated hereby, is true and correct and does not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made,
not misleading. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as
a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under which they were made and when made, not misleading.
The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3.2 hereof.
(y)
No Integrated Offering. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 3.2,
neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers
or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities
to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any
such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of
the securities of the Company are listed or designated.
14
(z)
Solvency. The Company does not intend to incur additional debts beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances
which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one year from the Closing Date. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities
for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business),
(y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or
should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease
payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary
is in default with respect to any Indebtedness.
(aa)
Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income
and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii)
has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such
returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material
taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no
basis for any such claim.
(bb)
No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Securities
by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchaser and
certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.
(cc)
Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any
agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful
payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate
funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf
of which the Company is aware) which is in violation of law or (iv) violated in any material respect any provision of FCPA.
15
(dd)
Accountants. To the knowledge and belief of the Company, the Company’s accounting firm (i) is a registered public accounting
firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the
Company’s Annual Report for the fiscal year ending December 31, 2025.
(ee)
No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company
is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any
of its obligations under any of the Transaction Documents.
(ff)
Acknowledgment Regarding Purchaser’s Purchase of Securities. The Company acknowledges and agrees that the Purchaser is acting
solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated
thereby. The Company further acknowledges that the Purchaser is not acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by the
Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated
thereby is merely incidental to the Purchaser’s purchase of the Securities. The Company further represents to the Purchaser that
the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent
evaluation of the transactions contemplated hereby by the Company and its representatives.
(gg)
Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding,
it is understood and acknowledged by the Company that: (i) the Purchaser has not been asked by the Company to agree, nor has the Purchaser
agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based
on securities issued by the Company or to hold the Securities for any specified term, (ii) past or future open market or other transactions
by the Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or after the
closing of this or future private placement transactions, may negatively impact the market price of the Company’s publicly-traded
securities, (iii) the Purchaser, and counter-parties in “derivative” transactions to which the Purchaser is a party, directly
or indirectly, presently may have a “short” position in the Common Stock and (iv) the Purchaser shall not be deemed to have
any affiliation with or control over any arm’s length counter-party in any “derivative” transaction. The Company further
understands and acknowledges that (y) the Purchaser may engage in hedging activities at various times during the period that the Securities
are outstanding, and (z) such hedging activities (if any) could reduce the value of the existing stockholders’ equity interests
in the Company at and after the time that the hedging activities are being conducted. The Company acknowledges that such aforementioned
hedging activities do not constitute a breach of any of the Transaction Documents.
16
(hh)
Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any
of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities
of the Company.
(ii)
Form S-3 Eligibility. As of the date of this Agreement, the Company is eligible to register the resale of the Securities for resale
by the Purchaser on Form S-3 promulgated under the Securities Act.
(jj)
Stock Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance
with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the
Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the
Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company
policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the
release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or
prospects.
(kk)
Cybersecurity. (i)(x) There has been no security breach or other compromise of or relating to any of the Company’s or any
Subsidiary’s information technology and computer systems, networks, hardware, software, data (including the data of its respective
customers, employees, suppliers, vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively,
“IT Systems and Data”) and (y) the Company and the Subsidiaries have not been notified of, and has no knowledge of
any event or condition that would reasonably be expected to result in, any security breach or other compromise to its IT Systems and
Data; (ii) the Company and the Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders,
rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations
relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use,
access, misappropriation or modification, except as would not, individually or in the aggregate, have a Material Adverse Effect; (iii)
the Company and the Subsidiaries have implemented and maintained commercially reasonable safeguards to maintain and protect its material
confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and Data; and (iv) the Company
and the Subsidiaries have implemented backup and disaster recovery technology consistent with industry standards and practices.
(ll)
Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director,
officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).
17
(mm)
U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within
the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s
request.
(nn)
Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company
Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the
“Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly,
five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity
of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries
or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and
to regulation by the Federal Reserve.
(oo)
Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended,
applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”),
and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company
or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
(pp)
No Disqualification Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 under the
Securities Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of
the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity
securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act)
connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer
Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii)
under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2)
or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification
Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the
Purchaser a copy of any disclosures provided thereunder.
(qq)
Other Covered Persons. The Company is not aware of any person (other than any Issuer Covered Person) that has been or will be
paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Securities.
(rr)
Notice of Disqualification Events. The Company will notify the Purchaser in writing, prior to the Closing Date of (i) any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event
relating to any Issuer Covered Person.
18
3.2
Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants as of the date hereof and as of
the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such date):
(a)
Organization; Authority. The Purchaser is either an individual or an entity duly incorporated or formed, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited
liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents
and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance
by the Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate,
partnership, limited liability company or similar action, as applicable, on the part of the Purchaser. Each Transaction Document to which
it is a party has been duly executed by the Purchaser, and when delivered by the Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation of the Purchaser, enforceable against it in accordance with its terms, except (i)
as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited
by applicable law.
(b)
Own Account. The Purchaser understands that the Securities are “restricted securities” and have not been registered
under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and
not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable
state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable
state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the
distribution of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty
not limiting the Purchaser’s right to sell the Securities pursuant to a registration statement or otherwise in compliance with
applicable federal and state securities laws). The Purchaser is acquiring the Securities hereunder in the ordinary course of its business.
(c)
Purchaser Status. At the time the Purchaser was offered the Securities, it was, and as of the date hereof it is, or it will be
either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), (a)(8), (a)(9), (a)(12), or (a)(13)
under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.
(d)
Experience of The Purchaser. The Purchaser, either alone or together with its representatives, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment. The Purchaser is able to bear the economic risk of an
investment in the Securities and, at the present time, is able to afford a complete loss of such investment.
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(e)
General Solicitation. The Purchaser is not, to the Purchaser’s knowledge, purchasing the Securities as a result of any advertisement,
article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or, to the knowledge of the Purchaser, any other general solicitation or general advertisement.
(f)
Access to Information. The Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including
all exhibits and schedules thereto) and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it has deemed
necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the
Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition,
results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that
is necessary to make an informed investment decision with respect to the investment.
(g)
Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, the Purchaser has not,
nor has any Person acting on behalf of or pursuant to any understanding with the Purchaser, directly or indirectly executed any purchases
or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that the Purchaser first
received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms
of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the
case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of the Purchaser’s
assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other
portions of the Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed
by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other than to other
Persons party to this Agreement or to the Purchaser’s representatives, including, without limitation, its officers, directors,
partners, legal and other advisors, employees, agents and Affiliates, the Purchaser has maintained the confidentiality of all disclosures
made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing,
for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect
to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.
The
Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect the Purchaser’s
right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties
contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement
or the consummation of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained
herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order
to effect Short Sales or similar transactions in the future.
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ARTICLE
IV.
OTHER
AGREEMENTS OF THE PARTIES
4.1
Transfer Restrictions.
(a)
The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection
with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the
Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and
shall have the rights and obligations of a Purchaser under this Agreement.
(b)
The Purchaser agrees to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in the following
form:
THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER
LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR
OTHER LOAN SECURED BY SUCH SECURITIES.
The
Company acknowledges and agrees that the Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered
broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor”
as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, the Purchaser may transfer pledged
or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and
no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice
shall be required of such pledge.
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(c)
Certificates evidencing the Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof), (i) while
a registration statement covering the resale of such security is effective under the Securities Act, (ii) following any sale of such
Shares pursuant to Rule 144 (iii) if such Shares or are eligible for sale under Rule 144, without the requirement for the Company to
be in compliance with the current public information required under Rule 144 as to such Shares and without volume or manner-of-sale restrictions],
or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements
issued by the staff of the Commission). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent or the Purchaser
promptly after the Effective Date if required by the Transfer Agent to effect the removal of the legend hereunder, or if requested by
a Purchaser, respectively. If such Shares or may be sold under Rule 144 and the Company is then in compliance with the current public
information required under Rule 144 or if the Shares or may be sold under Rule 144 without the requirement for the Company to be in compliance
with the current public information required under Rule 144 as to such Shares or if such legend is not otherwise required under applicable
requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) then
such shall be issued free of all legends. The Company agrees that following the Effective Date or at such time as such legend is no longer
required under this Section, it will, no later than the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising
the Standard Settlement Period (as defined below) following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate
representing Shares as the case may be, issued with a restrictive legend (such date, the “Legend Removal Date”), deliver
or cause to be delivered to the Purchaser a certificate representing such shares that is free from all restrictive and other legends.
The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer
set forth in this Section. Certificates for Securities subject to legend removal hereunder shall be transmitted by the Transfer Agent
to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System as directed
by the Purchaser. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in
a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of
delivery of a certificate representing Shares, issued with a restrictive legend.
(d)
In addition to the Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, (i) as partial liquidated
damages and not as a penalty, for each $1,000 of Shares (based on the VWAP of the Common Stock on the date such Securities are submitted
to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $10 per Trading Day (increasing
to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after the Legend Removal Date
until such certificate is delivered without a legend and (ii) if the Company fails to (a) issue and deliver (or cause to be delivered)
to a Purchaser by the Legend Removal Date a certificate representing the Securities so delivered to the Company by the Purchaser that
is free from all restrictive and other legends and (b) if after the Legend Removal Date the Purchaser purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Purchaser of all or any portion of the number of shares
of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares of Common Stock
that the Purchaser anticipated receiving from the Company without any restrictive legend, then, an amount equal to the excess of the
Purchaser’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common
Stock so purchased (including brokerage commissions and other out-of-pocket expenses, if any) (the “Buy-In Price”)
over the product of (A) such number of Shares that the Company was required to deliver to the Purchaser by the Legend Removal Date multiplied
by (B) the lowest closing sale price of the Common Stock on any Trading Day during the period commencing on the date of the delivery
by the Purchaser to the Company of the applicable Shares (as the case may be) and ending on the date of such delivery and payment under
this clause (ii).
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(e)
The Purchaser agrees with the Company that the Purchaser will only sell any of the Securities pursuant to either the registration requirements
of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities are
sold pursuant to a registration statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges
that the removal of the restrictive legend from certificates representing Securities as set forth in this Section is predicated upon
the Company’s reliance upon this understanding.
4.2
Furnishing of Information; Public Information.
(a)
If the Common Stock is not registered under Section 12(b) or 12(g) of the Exchange Act on the date hereof, the Company agrees to cause
the Common Stock to be registered under Section 12(g) of the Exchange Act on or before the 60th calendar day following the
date hereof. Until the earliest of the time that no Purchaser owns Securities the Company covenants to maintain the registration of the
Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within
the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even
if the Company is not then subject to the reporting requirements of the Exchange Act.
4.3
Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would
require the registration under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of
the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior
to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.
4.4
Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person,
that the Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by
the Company, or that the Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving
Securities under the Transaction Documents or under any other agreement between the Company and the Purchaser.
4.5
Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, which shall be disclosed pursuant to applicable law, the Company covenants and agrees that neither it, nor any other Person
acting on its behalf will provide the Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably
believes constitutes, material non-public information, unless prior thereto the Purchaser shall have consented to the receipt of such
information and agreed with the Company to keep such information confidential. The Company understands and confirms that the Purchaser
shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company, any
of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates delivers any material, non-public
information to a Purchaser without the Purchaser’s consent, the Company hereby covenants and agrees that the Purchaser shall not
have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees
or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or
Affiliates not to trade on the basis of, such material, non-public information, provided that the Purchaser shall remain subject to applicable
law. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information
regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current
Report on Form 8-K. The Company understands and confirms that the Purchaser shall be relying on the foregoing covenant in effecting transactions
in securities of the Company.
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4.6
Indemnification of Purchaser. Subject to the provisions of this Section, the Company will indemnify and hold the Purchaser and
its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls the Purchaser
(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding
a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any
and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in
settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or
incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company
in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or
any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect
to any of the transactions contemplated by the Transaction Documents (unless such action is solely based upon a material breach of such
Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings
such Purchaser Party may have with any such stockholder or any violations by such Purchaser Party of state or federal securities laws
or any conduct by such Purchaser Party which is finally judicially determined to constitute fraud, gross negligence or willful misconduct).
If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such
Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with
counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense
of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing,
(ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there
is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position
of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such
separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party
effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent,
but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations,
warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification
required by this Section shall be made by periodic payments of the amount thereof during the course of the investigation or defense,
as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action
or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.
4.7
Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep
available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company
to issue Shares pursuant to this Agreement.
24
4.8
Listing of Common Stock. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Common Stock
on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all
of the Shares on such Trading Market and promptly secure the listing of all of the Shares on such Trading Market. The Company further
agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will then include in such application
all of the Shares, and will take such other action as is necessary to cause all of the Shares to be listed or quoted on such other Trading
Market as promptly as possible. The Company will then take all action reasonably necessary to continue the listing and trading of its
Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under
the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of the Common Stock for electronic transfer
through the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment of
fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer.
4.9
Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation
D and to provide a copy thereof, promptly upon request of the Purchaser. The Company shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchaser at the Closing under
applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly
upon request of the Purchaser.
4.10
Acknowledgment of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding
shares of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its
obligations under the Transaction Documents, including, without limitation, its obligation to issue the Shares and Warrants pursuant
to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction,
regardless of the effect of any such dilution or any claim the Company may have against the Purchaser and regardless of the dilutive
effect that such issuance may have on the ownership of the other stockholders of the Company.
4.11
Senior, Secured Debt. The Company shall not incur any secured indebtedness or indebtedness senior in right of payment to the Securities
without prior written consent of the Purchaser.
ARTICLE
V.
MISCELLANEOUS
5.1
Termination. This Agreement may be terminated by the Purchaser by written notice to the Company if the Closing has not been consummated
on or before the 30th Trading Day following the date hereof; provided, however, that no such termination will
affect the right of any party to sue for any breach by any other party (or parties).
5.2
Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including,
without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice
delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchaser.
5.3
Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding
of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written,
with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
25
5.4
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is
delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached
hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such
notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the
signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c)
the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service
or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications
shall be as set forth on the signature pages attached hereto.
5.5
Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by the Company and Purchaser. No waiver of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver
of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder
in any manner impair the exercise of any such right. Any amendment effected in accordance with this Section shall be binding upon the
Purchaser and holder of Securities and the Company.
5.6
Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
5.7
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and
permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent
of the Purchaser (other than by merger). The Purchaser may assign any or all of its rights under this Agreement to any Person to whom
the Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions of the Transaction Documents that apply to the Purchaser.
5.8
No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
5.9
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto
or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively
in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of
any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper or is an inconvenient
venue for such Proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law. If any party shall commence an Action or Proceeding to enforce any provisions of the Transaction
Documents, then, in addition to the obligations of the Company under Section 4.6, the prevailing party in such Action or Proceeding shall
be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such Action or Proceeding.
26
5.10
Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.
5.11
Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one
and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party,
it being understood that the parties need not sign the same counterpart.+ In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature
page were an original thereof.
5.12
Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
5.13
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions
of) any of the other Transaction Documents, whenever the Purchaser exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within the periods therein provided, then the Purchaser may
rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election
in whole or in part without prejudice to its future actions and rights.
5.14
Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation),
or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to
the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also
pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
27
5.15
Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages,
each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that
monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction
Documents and hereby agree to waive and not to assert in any Action for specific performance of any such obligation the defense that
a remedy at law would be adequate.
5.16
Payment Set Aside. To the extent that the Company makes a payment or payments to the Purchaser pursuant to any Transaction Document
or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise
or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by
or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including,
without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such
restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not occurred.
5.17
Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction
Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts
have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts
are due and payable shall have been canceled.
5.18
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business
Day.
5.19
Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise
the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each
and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the
date of this Agreement.
5.20
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY,
THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature
Pages Follow)
28
IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
DSS,
INC.
Address
for Notice:
By:
/s/ Jason Grady
Email:
Name:
Jason Grady
Fax:
Title:
Interim Chief Executive Officer
With
a copy to (which shall not constitute notice):
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOR PURCHASER FOLLOWS]
29
[PURCHASER
SIGNATURE PAGES TO DSS, INC. SECURITIES PURCHASE AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories
as of the date first indicated above.
Name
of Purchaser: Alset International Limited
Signature
of Authorized Signatory of Purchaser: __________________________________
Name
of Authorized Signatory: ____________________________________________________
Title
of Authorized Signatory: _____________________________________________________
Address of Authorized Signatory: ______________________________________________
Address
for Notice to Purchaser:
Address
for Delivery of Securities to Purchaser (if not same as address for notice):
Subscription
Amount: $2,450,000
EIN
Number: _______________________
[SIGNATURE
PAGES CONTINUE]
30
EXHIBIT
A
FORM
OF NOTE
31
EXHIBIT
B
FORM
OF WARRANT AGREEMENT
32
EX-10.3
EX-10.3
Filename: ex10-3.htm · Sequence: 4
Exhibit
10.3
THIS
CONVERTIBLE PROMISSORY NOTE (“NOTE”) AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), APPLICABLE STATE LAW, OR APPLICABLE LAWS OF ANY
FOREIGN JURISDICTION, AND MAY NOT BE SOLD, OFFERED FOR SALE, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS
(A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE OR FOREIGN SECURITIES LAWS COVERING ANY
SUCH TRANSACTION OR (B) SUCH TRANSACTION IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE OR FOREIGN SECURITIES
LAWS COVERING SUCH TRANSACTION.
CONVERTIBLE
PROMISSORY NOTE
Principal
Amount: $2,450,000.00
____________,
2026
FOR
VALUE RECEIVED, DSS, Inc., a New York corporation (“DSS” or the “Borrower”) promises to pay to
Alset International Limited, a Singapore corporation (together with its permitted successors and assigns, the “Holder”),
or to its order, the principal sum of two million four hundred fifty thousand ($2,450,000.00) (the “Principal Amount”),
all of which, together with any and all accrued interest can be paid by the “Optional Conversion” (as hereinafter
defined) of such amount into shares of DSS’ $0.02 par value Common Stock (“Common Stock”) at the Conversion
Rate, provided all of the conditions precedent contained in Section 3 of this Note have been satisfied, together with interest in arrears,
if any, on the unpaid principal balance from time to time outstanding from the date hereof until the entire Principal Amount due hereunder
is paid in full at the rate(s) provided below. This Note is issued in connection with a Securities Purchase Agreement relating to the
Note (the “Purchase Agreement”) executed on even date herewith between the Borrower and Holder. Capitalized terms
not otherwise defined herein shall have the meanings ascribed to them in the Purchase Agreement. “Dollar” and “$”
mean the lawful currency of the United States of America.
1.
Maturity.
1.1
Maturity Date. The aggregate outstanding Principal Amount, together with all accrued interest, if any, thereon, reduced by unamortized
prepaid interest, if any, (cumulatively, the “Outstanding Amount”), shall be due and payable in full ON DEMAND by
the Holder, or if the demand is not sooner made, on the earliest to occur of (the earliest of such events being the “Maturity
Date”): (i) the date falling on the fifth anniversary of the Issue Date (the “Scheduled Maturity Date”);
(ii) the acceleration of this Note upon the occurrence of an Event of Default; (iii) upon full conversion of this Note as provided herein;
or (iv) upon full repurchase of this Note by Borrower as provided herein.
1.2
Redemption. The Borrower at its option shall have the right to redeem a portion or all amounts of outstanding Principal Amount
on or after the first anniversary of this Note without incurring penalties, additional interest, or other fees or charges; provided that
Borrower shall send Holder written notice (“Redemption Notice”) of such redemption stating the amount of the Principal
Amount being redeemed (“Redemption Amount”) and, if such redemption of the Note is in full, the place or places whether
the Note is to be surrendered for payment. After a Redemption Notice is given, the Borrower shall deliver to the Holder the Redemption
Amount within three (3) business days of such Redemption Notice, during which period of time the Holder shall not have the right to convert
any portion of this Note. If the Borrower fails to deliver the Redemption Amount to Holder within three (3) business days, then (i) all
rights and remedies of the Holder under this Note, including conversion rights in accordance with Section 3 of this Note, shall continue
as though no such Redemption Notice had been given, and (ii) the Borrower shall not have the right to redeem any portion of the Principal
Amount for a period of thirty (30) calendar days following such failure to deliver the Redemption Amount.
2.
Interest.
2.1
Interest Rate. This Note shall bear interest at a simple interest rate of 3% (three percent) per annum. Interest shall be paid
in arrears on the Maturity Date, in cash or in Common Stock, at the Holder’s election, subject to Sections 3 of this Note. Interest
shall be computed on the basis of a 360-day year and the actual number of days elapsed.
1
2.2
Interest After Default. At Holder’s option, and to the extent permitted by applicable law, the unpaid principal balance
shall bear interest after an Event of Default and after Maturity (whether by acceleration or otherwise) at the Default Interest Rate.
The “Default Interest Rate” shall be, at Holder’s option, a) eighteen percent (18%) per annum, or b) such lesser
rate of interest as Holder in its sole discretion may choose to charge; but never more than the Maximum Lawful Rate or at a rate that
would cause the total interest contracted for, charged or received by Holder to exceed the Maximum Lawful Amount. The term “Maximum
Lawful Rate” means the maximum rate of interest and the term “Maximum Lawful Amount” means the maximum amount
of interest that is permissible under applicable state or federal law for the type of loan evidenced by this Note. If applicable state
or federal law allows a higher interest rate or federal law preempts the state law limiting the rate of interest, then the foregoing
interest rate ceiling shall not be applicable to this Note. If the interest rate ceiling is increased by statute or other governmental
action subsequent to the date of this Note, then the new interest rate ceiling shall be applicable to this Note from the effective date
thereof, unless otherwise prohibited by applicable law.
3.
Conversion.
3.1.
Optional Conversion. At any time during the term of this Note, except as otherwise provided herein, the Principal Amount less
any unamortized prepaid interest, if any, and all accrued interest, if any, thereon (the “Maximum Conversion Amount”)
may, at the sole option of the Holder, be converted, in whole or in part, into fully paid and non-assessable whole shares of Common Stock
(“Optional Conversion”) in accordance with Section 3.4 below.
3.2.
Mechanics of Conversion. The Holder shall notify the Borrower in writing of its election to convert all or part of the Maximum
Conversion Amount (“Conversion Amount”) in accordance with Section 3.1 (“Conversion Notice”). Such
conversion shall only become effective after all of the following conditions have been satisfied:
a.
Borrower receives the Conversion Notice;
b.
Holder executes any and all documents required in connection with becoming a holder of Common Stock;
c.
Borrower issues and delivers to Holder a certificate or certificates for the number of shares of Common Stock, if any, to which Holder
shall be entitled as provided herein, within seven (7) calendar days of receipt of the Conversion Notice (“Certificates”);
and
d.
Holder provides Borrower with written confirmation that the outstanding balance of the Principal Amount and accrued interest, if any,
has been reduced by the Conversion Amount (“Reduction Certificate”). Upon the occurrence of the events set forth in
Sections 3.2 (a), (b) and (c) above, and this Section 3.2(d), Borrower shall deliver to the Holder a Restated Note (“Restated
Note”) evidencing the remaining outstanding balance of the Principal Amount, if any, which Restated Note shall in all other
respects be identical with this Note, except that the Maximum Conversion Amount shall be reduced by the Conversion Amount.
3.3
Conversion Rate. The number of whole shares of Common Stock into which this Note may be converted (the “Conversion Shares”)
shall be determined by dividing the Conversion Amount by $0.74 (the “Conversion Rate”).
3.4
Adjustment of Note Conversion Rate. In the event the Borrower shall in any manner, subsequent to the issuance of this Note, approve
a reclassification involving a reverse stock split and subdivision of the Borrower’s issued and outstanding Common Stock, the Conversion
Rate shall forthwith be adjusted by proportionally increasing the Note Conversion Price on the date such subdivision shall become effective.
In the event the Borrower shall in any manner, subsequent to the issuance of this Note, approve a reclassification involving a forward
stock split and subdivision of the Borrower’s issued and outstanding Common Stock, the Conversion Rate shall forthwith be adjusted
by proportionally decreasing the Note Conversion Price on the date such subdivision shall become effective.
2
4.
Reservation of Authorized Shares.
4.1
Reservation. Except as may be provided for in or in accordance with the Purchase Agreement, at the Closing (as defined in the
Purchase Agreement), the Borrower shall have reserved all of its authorized unissued shares of Common Stock, including treasury shares
of Common Stock (“Initial Reserve Amount”), solely for the purpose of effecting the conversion of this Note or other
convertible securities issued to the Holder pursuant to the Purchase Agreement. After the increase in Borrower’s authorized but
unissued shares of Common Stock pursuant to and in accordance with the Purchase Agreement (“Authorized Share Increase”),
Borrower shall at all times thereafter reserve out of its authorized but unissued shares of Common Stock, a number of shares of Common
Stock equal to the Conversion Rate with respect to Maximum Conversion Amount of this Note, solely for the purpose of effecting the conversion
of this Note (the “Subsequent Reserve Amount”).
4.2
Insufficient Authorized Shares. Except as provided for in the Purchase Agreement, if at any time after the Authorized Share Increase
and while this Note remains outstanding the Borrower does not have a sufficient number of authorized and unreserved shares of Common
Stock to satisfy its obligation to reserve the Subsequent Reserve Amount (an “Authorized Share Failure”), then the
Borrower shall take all action necessary to effect an Authorized Share Increase pursuant to and in accordance with the Purchase Agreement.
5.
Usury. All agreements between the Borrower and the Holder are hereby expressly limited so that in no contingency or event whatsoever,
whether by reason of acceleration of maturity of the indebtedness evidenced hereby or otherwise, shall the amount paid or agreed to be
paid to the Holder for the use, forbearance, or detention of the indebtedness evidenced hereby exceed the maximum permissible amount
under applicable law. If, from any circumstance whatsoever, fulfillment of any provision hereof at the time performance of such provision
shall be due shall involve transcending the limit of validity prescribed by law, the obligation to be fulfilled shall automatically be
reduced to the limit of such validity, and if from any circumstances the Holder should ever receive as interest an amount which would
exceed the highest lawful rate, such amount which would be excessive interest shall be applied to the reduction of the principal balance
evidenced hereby and not to the payment of interest, and, if the Principal Amount of this Note has been paid in full, shall be refunded
to the Borrower.
6.
Negative Covenants. So long as this Note shall remain in effect and until any Outstanding Amount (and liquidated damages, if any)
and all fees and all other expenses or amounts payable under this Note and the Purchase Agreement have been paid in full, unless the
Holders shall otherwise consent in writing, which consent shall not be unreasonably withheld or delayed, the Borrower shall not:
a.
Liens. Create, incur, assume or permit to exist any lien on any property or assets, other than (i) financing of personal property
used in the business, and (ii) financing of inventory, (including stock or other securities of the Borrower) now owned or hereafter acquired
by the Borrower or on any income or revenues or rights in respect of any thereof, except Permitted Liens;
b.
Dividends and Distributions. Declare or pay, directly or indirectly, any dividend or make any other distribution (by reduction
of capital or otherwise), whether in cash, property, securities (other than shares of Common Stock of the Borrower in connection with
a stock dividend, stock split or other recapitalization) or a combination thereof (other than a reverse stock split of the Common Stock
of the Borrower), with respect to any shares of its capital stock or directly or indirectly redeem, purchase, retire or otherwise acquire
for value any shares of any class of its capital stock or set aside any amount for any such purpose except as permitted under subsection
(d) below;
c.
Stock Repurchases. Repay, repurchase, redeem or offer to repay, repurchase, redeem or otherwise acquire more than a de minimis
number of shares of its Common Stock (or Common Stock equivalents) other than as to (i) the Conversion Shares as permitted or required
under this Note or Purchase Agreement and (ii) repurchases of Common Stock of departing officers and directors of the Borrower. Holder
specifically agrees the redemption or conversion into Common Stock of Preferred Stock existing on the date hereof does not require Holder
approval.
d.
Certain Payments and Prepayments. Optionally prepay, repurchase or redeem or segregate funds with respect to any indebtedness
with a remaining term of greater than twelve months of the Borrower at the time of the optional payment, other than for (A) indebtedness
existing on the date hereof, and (B) indebtedness under this Note or the Purchase Agreement;
3
e.
Amendments to Constitutive Documents. Amend its charter documents, including, without limitation, its certificate of incorporation
and bylaws, in any manner that materially and adversely affects any rights of the Holder; or
f.
Other. Enter into any agreement with respect to any of the foregoing.
7.
Most Favored Nation. While the Note is outstanding, if the Borrower sells or issues any convertible notes or subsequent convertible
instruments (“Subsequent Convertible Instruments”) on terms that differ from the Note, the Borrower will provide the
Holder with written notice of such sale or issuance, including the terms of the Subsequent Convertible Instruments, no later than five
(5) days after the closing date thereof. In the event the Holder determines, in its sole discretion, that any Subsequent Convertible
Instrument contains terms more favorable to the holder(s) thereof than the terms set forth in the Note, the Holder may elect to exchange
the Note for such Subsequent Convertible Instrument based on the Note’s principal balance plus any accrued but unpaid interest,
if any, thereunder. If the Holder elects to exchange the Note for a Subsequent Convertible Instrument, the Borrower agrees to enter into
a side letter with the Holder relating to such Subsequent Convertible Instrument, which side letter will have substantially the same
terms as those set forth in this Agreement.
8.
Replacement of Note. If this Note is mutilated, lost, stolen or destroyed, the Borrower shall issue or cause to be issued in exchange
and substitution for and upon cancellation hereof, or in lieu of and substitution for this Note, a new Note, but only upon receipt of
evidence reasonably satisfactory to the Borrower of such loss, theft or destruction and customary and reasonable bond or indemnity, if
requested.
9.
Events of Default. The following constitute an event of default (“Event of Default”):
a.
Borrower fails to pay any amount of principal or interest under this Note when due;
b.
Borrower fails or neglects to perform, keep or observe any of the covenants, conditions or agreements contained in this Note and such
failure or neglect continues after Holder provided Borrower with fourteen (14) days written notice thereof;
c.
Any warranty or representation now or hereafter made by the Borrower in connection with this Note is untrue or incorrect in any material
respect, or any schedule, certificate, statement, report, financial data, notice, or writing furnished at any time pursuant to this Note
by the Borrower to the Holder is untrue or incorrect in any material respect, on the date as of which the facts set forth therein are
stated or certified and such failure or neglect continues after Holder provided Borrower with fourteen (14) days written notice thereof;
d.
A proceeding under any bankruptcy, reorganization, arrangement of debt, insolvency, readjustment of debt or receivership law or statute
is filed against Borrower which is not dismissed within sixty (60) days of its filing, or a proceeding under any bankruptcy, reorganization,
arrangement of debt, insolvency, readjustment of debt or receivership law or statute is filed by Borrower or the Borrower makes an assignment
for the benefit of creditors or Borrower takes any corporate action to authorize any of the foregoing;
e.
Borrower voluntarily or involuntarily dissolves or is dissolved, terminates or is terminated;
f.
Borrower becomes insolvent or fails generally to pay its debts as they become due, and said failure continues for a period of fourteen
(14) days after written notice of same from the Holder to the Borrower; or
g.
Borrower breaches any agreements or covenants, as modified or amended, set forth in the Purchase Agreement or any representation or warranty
set forth in the Purchase Agreement shall be determined to be false at the time given;
4
10.
Remedies. Upon the occurrence of an Event of Default, or Change of Control, at the option and upon the written declaration of
the Holder (or automatically without such declaration if an Event of Default set forth in Sections 9(a), (d) and (g) occurs), the entire
Outstanding Amount shall, without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived, be forthwith
due and payable, and Holder may, immediately and without expiration of any period of grace, enforce payment of all amounts due and owing
under this Note and exercise any and all other remedies granted to it at law, in equity or otherwise, including the demand for immediate
transfer to the Holder of any ownership interests in the Borrower held by the Borrower. For purposes of this Note, the term “Change
of Control” shall mean the consummation of any bona fide third party tender offer, merger, amalgamation, consolidation or other
similar transaction the result of which is that any “person” (as defined in Section 13(d)(3) of the Exchange Act), or group
of persons, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) of a majority of total voting power
of the voting stock of the Borrower. Change of Control specifically excludes any transactions involving Holder and/or any entity or person
affiliated with Holder including Alset Inc. and the Alset Inc. Board of Directors, and its major shareholders.
11.
Miscellaneous.
a.
Notices. All notices to any party required or permitted hereunder shall be in writing and shall be sent to the physical address
or email address set forth for such party as follows:
i.
If
to the Holder:
Alset
International Limited
9
Temasek Boulevard #16-04, Suntec Tower Two,
Singapore
038989
ii.
If
to Borrower:
DSS,
Inc.
275
Wiregrass Pkwy
Henrietta,
New York 14586
Any
such notice shall be deemed effectively given (i) upon personal delivery to the party to be notified; (ii) when sent by confirmed electronic
transmission or facsimile if sent during normal business hours of the recipient, if not, then on the next business day; (iii) three business
days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one day after deposit
with a recognized national overnight courier, specifying next day delivery, or two days after deposit with a recognized international
overnight courier, specifying two day delivery, in each case with written verification of receipt.
b.
Waiver. No failure to exercise, and no delay in exercising, on the part of the Holder, any right, power, or privilege hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power, or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies provided by law.
c.
Amendments. Any term, covenant, or condition of this Note may be amended or waived only by written consent of the Borrower and
the Holder.
d.
Expenses. Any reasonable expense incurred by the Holder (including, without limitation, reasonable attorneys’ fees and disbursements)
in connection with the exercise of any right or remedy upon the occurrence of an Event of Default, including, without limitation, the
costs of collection and reasonable attorneys’ fees and expenses, shall be paid by the Borrower within fourteen (14) days of receiving
written notice thereof from the Holder. Any such expense incurred by the Holder and not timely paid by the Borrower shall be added to
the other obligations hereunder and shall earn interest at the same rate per annum as the principal hereunder.
e.
Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York without giving
effect to any conflict or choice of laws principles. Any litigation involving this Note shall be brought in the city of New York, NY.
5
f.
Transfer; Successors and Assigns. The terms and conditions of this Note shall inure to the benefit of and be binding upon the
respective permitted successors and assigns of the parties. This Note and the rights, privileges and obligations of Holder hereunder,
shall not be assigned, sold or transferred by Holder, in part or in full without the prior written consent of the Borrower, provided
that the Holder may assign or transfer any of its rights, privileges, or obligations set forth in, arising under, or created by this
Agreement to any entity controlled by, controlling or under common control with the Holder. The Borrower may not assign this Note without
prior written consent of the Holder, provided that the Borrower may assign this Note to any successor of all or substantially all of
its assets or business, or any entity surviving the merger, combination or consolidation with the Borrower.
g.
Entire Agreement. This Note constitutes the full and entire agreement of the Borrower and the Holder with respect to the subject
matter hereof.
h.
Confidentiality. In addition to separate confidentiality agreement, if any, each party will at all times keep confidential and
not divulge, use or make accessible to anyone the terms and conditions of this Note and the transactions described herein, and any non-public
material information concerning or relating to the business or financial affairs of the other party to which such party has been or will
become privy relating to this Note, except to its employees and advisors in such capacity, as required to perform its obligations hereunder,
if required by law or rules of a stock exchange on which its or its parent’s securities are listed, or with the prior written consent
of the other party.
i.
Waiver of Jury Trial.
BORROWER
AND HOLDER EACH HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY WITH REGARDS TO ANY “DISPUTE” AND ANY ACTION
ON SUCH “DISPUTE”. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY BORROWER AND HOLDER, AND BORROWER AND HOLDER
HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY PERSON OR ENTITY TO INDUCE THIS WAIVER OF TRIAL BY
JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT.
BORROWER AND HOLDER ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION HEREOF IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS
WAIVER OF JURY TRIAL. BORROWER FURTHER REPRESENTS AND WARRANTS THAT (1) IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND
IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR (2) HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL
SELECTED OF ITS OWN FREE WILL, AND (3) EACH HAVE HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
6
IN
WITNESS WHEREOF, the Borrower has caused this Note to be executed by its duly authorized representatives as of the day and year first
above written.
DSS,
INC.
By:
/s/
Jason Grady
Name:
Jason
Grady
Title:
Chief
Executive Officer
[Signature
Page to Convertible Promissory Note]
7
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Mar. 26, 2026
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Name of the state or province.
+ References
No definition available.
+ Details
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dei_EntityAddressStateOrProvince
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X
- Definition
A unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
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Balance Type:
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X
- Definition
Indicate if registrant meets the emerging growth company criteria.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
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Name:
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X
- Definition
Commission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
+ References
No definition available.
+ Details
Name:
dei_EntityFileNumber
Namespace Prefix:
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Data Type:
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Balance Type:
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Period Type:
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X
- Definition
Two-character EDGAR code representing the state or country of incorporation.
+ References
No definition available.
+ Details
Name:
dei_EntityIncorporationStateCountryCode
Namespace Prefix:
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Data Type:
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Balance Type:
na
Period Type:
duration
X
- Definition
The exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
+ Details
Name:
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X
- Definition
The Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
+ Details
Name:
dei_EntityTaxIdentificationNumber
Namespace Prefix:
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Data Type:
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Balance Type:
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Period Type:
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X
- Definition
Local phone number for entity.
+ References
No definition available.
+ Details
Name:
dei_LocalPhoneNumber
Namespace Prefix:
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Data Type:
xbrli:normalizedStringItemType
Balance Type:
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Period Type:
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X
- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 13e
-Subsection 4c
+ Details
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Namespace Prefix:
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Data Type:
xbrli:booleanItemType
Balance Type:
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Period Type:
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X
- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14d
-Subsection 2b
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Data Type:
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Balance Type:
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Period Type:
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X
- Definition
Title of a 12(b) registered security.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b
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Namespace Prefix:
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Balance Type:
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Period Type:
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X
- Definition
Name of the Exchange on which a security is registered.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection d1-1
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Namespace Prefix:
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Data Type:
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Balance Type:
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Period Type:
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X
- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14a
-Subsection 12
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dei_SolicitingMaterial
Namespace Prefix:
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Data Type:
xbrli:booleanItemType
Balance Type:
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Period Type:
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X
- Definition
Trading symbol of an instrument as listed on an exchange.
+ References
No definition available.
+ Details
Name:
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Namespace Prefix:
dei_
Data Type:
dei:tradingSymbolItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
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