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PARTIES
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1) Document Security
Systems, Inc., a New York corporation, having its office at 200
Canal View Blvd, Suite 300, Rochester, NY 14623.
(hereinafter
referred to as “DSS”)
2) DSS BioHealth
Security Inc., a Delaware corporation, having its office at 200
Canal View Blvd, Suite 300, Rochester, NY 14623.
(hereinafter
referred to as “DBHS”)
3) Global BioMedical
Pte Ltd, a Singapore corporation, company no. 201707501G having its
office at 7 Temasek Boulevard #29-01B, Suntec Tower One, Singapore
038987.
(hereinafter
referred to as “GBM”)
4) Impact BioMedical
Inc., a Nevada corporation, having its office at 4800 Montgomery
Lane Suite 210 Bethesda, MD 20814.
(hereinafter
referred to as “IMPACT”)
(DSS,
DBHS and GBM, and IMPACT shall each be known as a
“Party”, and collectively the
“Parties”.)
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TRANSACTION
OVERVIEW
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GBM
Owns
100% of Impact Biomedical Inc. (“IMPACT”)
Purchase
Price: USD
50,000,000
Proposed
Share Exchange Transaction (“Share Exchange”) Between DSS and
IMPACT
In
consideration of 100% of Impact, i.e. USD 50,000,000 (the
“Consideration”,
DSS will issue a combination of shares and perpetual convertible
bond (PCB) as
follows:
–
USD
3,132,000
By way
of issuing 14,500,000 shares at a price of USD 0.216 per share to GBM
–
Balance of USD
46,868,000
By way
of PCB at 0% coupon rate per annum.
Perpetual
Convertible Bond
–
0 % Coupon
Rate
–
Conversion rate is
at USD 0.216 per
share
–
GBM has right to
convert the balance amount in PCB into DSS shares in full or
partially, by giving 3 days written notice (at conversion rate of
USD 0.216 in PCB to 1 DSS
share)
–
DSS has right to
require GBM to convert the balance amount in PCB into DSS Shares in
full or partially with 3 days written notice (at conversion rate of
USD 0.216 in PCB to 1 DSS
Share)
The
100% of IMPACT will be held under DBHS after the Share
Exchange.
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BLOCKER
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It is
agreed by Parties that GBM will not convert the PCB into DSS Shares
to the extent where at any one point in time, GBM owns more than
19.9% of DSS.
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VALUATION
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DSS
will appoint Destum Partners (an independent third-party
professional valuation firm) to conduct an updated valuation report
for IMPACT.
The
Parties agree that should the updated valuation report of IMPACT be
higher than the agreed transaction value, GBM agrees to not
increase the Consideration amount for IMPACT in the Share
Exchange.
The
Parties further agree that should the updated valuation report of
IMPACT be lower than the agreed transaction value, GBM agrees to
lower the Consideration amount for IMPACT accordingly and offer the
same 87.16% discount given to DSS for the Share
Exchange.
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INITIAL
PUBLIC OFFERING
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It is
the intention of IMPACT to pursue a public offering either on the
New York Stock Exchange (NYSE) or Nasdaq, after the Share Exchange
transaction.
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DIVIDEND
OF IMPACT SHARES
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Upon
the completion of the transaction, DBHS, which is a 100% owned
subsidiary of DSS, will own 100% of IMPACT.
It is
the intention of DBHS, upon the completion of the Share Exchange,
to offer bonus of IMPACT shares to the shareholders of DSS
(excluding the controlling shareholders of DSS and the
chairman’s group of companies). The proposed bonus being, for
every one (1) DSS share held, the shareholder will be entitled to a
bonus of two (2) shares of IMPACT as determined at the record date
of the filing. (“Bonus Shares”). (“Bonus
Shares”)
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RIGHT
TO APPOINT THE BOARD OF DIRECTORS OF IMPACT
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DSS
shall have the right to appoint the board of IMPACT.
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REPRESENTATION
AND WARRANTIES
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The
Parties hereby represent and warrant that they have on behalf of
their respective companies, the full legal rights and capacities to
enter into this Term Sheet and to perform their respective
obligations and that they are not in violation of any laws or any
courts.
The
Parties acknowledge that there may be fluctuations in the Share
Price of DSS prior to the signing of this Term Sheet.
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COUNTERPARTS
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This
Term Sheet and any amendments, if any, may be executed in
counterparts (including by facsimile), each of which shall be an
original with the same effect as if the signatures thereto and
hereto were part of the same instrument and shall become effective
when one or more counterparts have been signed by each of the
Parties and delivered (by telecopy or otherwise) to the other
Parties.
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CONFIDENTIALITY
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Save
for any disclosure, filing or report made to any government agency,
regulatory body or exchange (including but not limited to the NYSE
and SGX-ST), or disclosures made to accountants, advisors, legal
counsel or consultants, each Party shall keep strictly confidential
the negotiations relating to this transaction, the existence of
this transaction and the contents of this Term Sheet and shall not
disclose the name to any other person with the prior written
consent of the other Parties.
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BINDING
EFFECT
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This
Term Sheet shall be legally binding and shall also be legally
enforceable in accordance with its terms in any court of competent
jurisdiction.
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DEFINITIVE
AGREEMENT
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The
Parties, if mutually agreeable and as soon as practicable and in
any event, no later than three (3) months from date of signing of
this Term Sheet, strive to obtain their respective directors and
shareholders’ approvals; and relevant stock exchanges in
which they are listed with, if required.
The
Parties may elect not to enter into a Definitive Agreement, in
which event, the terms and conditions in this Term Sheet shall
prevail and have full effects as if a definitive agreement has been
entered into.
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COMPLETION
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Completion
shall take place within three (3) months from the date of signing
of this Term Sheet and subject to both DSS and GBM having obtained
approvals from their respective shareholders and relevant stock
exchanges in which they are listed with, if required for the
transactions contemplated herein.
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COSTS
AND EXPENSES
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Each
Party shall be responsible for its respective costs and expenses in
relation to the preparation of this Term Sheet and Definitive
Agreement, if any.
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GOVERNING
LAW AND DISPUTE RESOLUTION
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This
Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, without regard to such state's
choice of law provisions which would require the application of the
law of any other jurisdiction.
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SIGNED
BY:
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SIGNED
BY:
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/s/ Frank
Heuszel
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/s/
Chan
Heng Fai Ambrose
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Name: Frank
Heuszel
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Name: Chan Heng Fai
Ambrose
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Title: Chief Executive
Officer For and on behalf
of DSS Securities
Inc.
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Title: Chief Executive
Officer For and on behalf
of Global BioMedical
Pte Ltd
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SIGNED
BY:
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SIGNED
BY:
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/s/ Frank
Heuszel
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/s/
Chan
Heng Fai Ambrose
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Name: Frank
Heuszel
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Name: Chan Heng Fai
Ambrose
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Title: Chief Executive
Officer For and on behalf
of DSS BioHealth Security
Inc.
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Title: Chief Executive
Officer For and on behalf
of Impact Biomedical
Inc.
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