Exhibit 10.1

ONE STOP SYSTEMS, INC.
NOTE AND WARRANT PURCHASE AGREEMENT

THIS NOTE AND WARRANT PURCHASE AGREEMENT (this “Agreement”) is made as of
______, 2019, by and among One Stop Systems, Inc., a Delaware corporation (the
“Company”), and the investors listed on Exhibit A hereto who become signatories
to this Agreement (each an “Investor” and, collectively, the “Investors”).

THE PARTIES HEREBY AGREE AS FOLLOWS:

1.Issuance of Notes and Warrants.

1.1Issuance of Notes. Subject to the terms and conditions of this Agreement, at
each Closing (as defined below), the Company shall issue and sell to each
Investor participating in such Closing, a senior secured promissory note (each
such note, a “Note” and collectively, the “Notes”) in the principal amount set
forth opposite each such Investor’s name on Exhibit A attached hereto (the
“Principal Amount”), against payment by such Investor to the Company of the
Principal Amount. The Company may issue and sell Notes with an aggregate
Principal Amount of up to $2,000,000 under this Agreement. The Notes shall each
be in substantially the form of Exhibit B attached hereto.  The Notes shall be
secured pursuant to that certain Security Agreement substantially in the form of
Exhibit D attached hereto (the “Security Agreement”).

1.2Issuance of Warrants.  Subject to the terms and conditions of this Agreement,
at each Closing (as defined below), the Company shall issue and deliver to each
Investor participating in such Closing, a common stock purchase warrant (each
such warrant, a “Warrant” and collectively, the “Warrants”, and together with
the Notes and the shares of stock issuable upon exercise of the Warrants, the
“Securities”) providing each Investor the right to purchase that number of
shares of the Company’s common stock equal to ten percent (10%) of said
Investor’s Note as “warrant coverage.”  The Warrants shall be exercisable at a
price per share of common stock equal to the closing price of the Company’s
stock the day immediately prior to such Closing.  The Warrants shall each be in
substantially the form of Exhibit C attached hereto, except as may otherwise be
agreed upon by the Company and an Investor.

2.Closings.

2.1Initial Closing. The initial closing of the purchase and sale of the
Securities shall take place remotely via exchange of funds and documents, on
_____, 2019 or such other time as the parties mutually agree (the “Initial
Closing”).

2.2Subsequent Closings. Subsequent to the Initial Closing, until such time as
the aggregate Principal Amount evidenced by all of the Notes equals a total of
$2,000,000, the Company may sell additional Securities to such persons or
entities as determined by the Company (each such closing, a “Subsequent Closing”
and, together with the Initial Closing, each a “Closing”).  For purposes of this
Agreement, and all other agreements contemplated hereby, any additional
purchaser so acquiring the Securities shall be deemed to be an “Investor” for
purposes of this Agreement, and any Securities so acquired by such additional
purchaser shall be deemed to be “Securities” for all purposes
hereunder.  Exhibit A shall be revised by the Company, without the consent of
any other person or entity, to reflect the sale of Notes at all Subsequent
Closings.  The closing of the purchase and sale of such additional Securities
hereunder shall take place on such date as is mutually agreeable to the Company
and Investors that are identified on Exhibit A as purchasing Notes representing
a majority of the aggregate Principal Amount of all Notes to be issued at such
Subsequent Closing (or at such other time and place as is mutually agreed upon
by the Company and such parties) (which each such date and place, together with
the Initial Closing, are designated as a “Closing Date”).

DOCS 125362-000003/3732963.1

--------------------------------------------------------------------------------

 

2.3Conditions of Investors’ Obligations at Closing. The several obligations of
each Investor to purchase the Notes on the date of the Initial Closing shall be
subject to the prior or concurrent satisfaction of each of the conditions
precedent set forth in this Section 2.3, any of which may be waived in writing
by such Investor.

(a)Representations and Warranties. The representations and warranties made by
the Company in Section 4 hereof shall be true and correct in all material
respects on the Initial Closing date (except as to such representations and
warranties made as of a specific date, which shall be measured as of such date).

(b)Conditions. All agreements and conditions contained in this Agreement to be
performed by the Company on or prior to the Closing shall have been performed or
complied with in all material respects.

2.4Conditions of the Company’s Obligations at Closing. The obligations of the
Company to sell and issue Notes to each Investor at a Closing shall be subject
to the prior or concurrent satisfaction of each of the conditions precedent set
forth in this Section 2.4, any of which may be waived in writing by the Company.

(a)Representations and Warranties. The representations and warranties of such
Investors contained in Section 3 of this Agreement shall be true and correct in
all material respects on and as of each Closing, with the same effect as if made
on and as of the Closing.

(b)Conditions. All agreements and conditions contained in this Agreement to be
performed by the Investor on or prior to the Closing shall have been performed
or complied with in all material respects.

2.5Delivery. At each Closing, the Company shall deliver to each Investor (a) a
Note in the Principal Amount designated opposite such Investor’s name on Exhibit
A, (b) a Warrant exercisable by the Investor to purchase such shares of the
Company’s common stock designated opposite such Investor’s name on Exhibit A
corresponding to the Principal Amount of Notes purchased by such Investor, and
(c) a Security Agreement in the name of Investor, against delivery of (1)
payment of the purchase price therefor by a wire transfer of immediately
available funds, to a bank designated by the Company, and (2) delivery of
counterpart signature pages to this Agreement and the Security Agreement
(together with the Note and the Warrant, the “Transaction Documents”).  

3.Representations, Warranties and Covenants of Investors.  Each Investor,
severally and not jointly, hereby represents, warrants and covenants to the
Company as follows:

3.1Purchase for Own Account. Such Investor represents that it is acquiring the
Securities solely for investment for such Investor’s own account and not as a
nominee or agent, and not with a view to the resale or distribution of any part
thereof, and that such Investor has no present intention of selling, granting
any participation in, or otherwise distributing the same. The acquisition by
such Investor of any of the Securities shall constitute confirmation of the
representation by such Investor that such Investor does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Securities.

3.2Disclosure of Information. Such Investor has had an opportunity to discuss
the terms of this offering and the Company’s business, management and financial
affairs with the Company’s management, and the opportunity to inspect the
Company’s facilities and such books and records and material contracts as such
Investor deemed necessary to its determination to purchase the Securities.  

- 2 -

DOCS 125362-000003/3732963.1

--------------------------------------------------------------------------------

 

3.3Investment Experience. Either (i) such Investor or its officers, directors,
managers or controlling persons has a preexisting personal or business
relationship with the Company or its officers, directors or controlling persons,
or (ii) such Investor, by reason of its own business and financial experience,
has the capacity to protect its own interests in connection with the investment
contemplated hereby. Such Investor represents that it is an investor in
securities of companies in the development stage and acknowledges that it is
able to fend for itself, can bear the economic risk of its investment, and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Securities.

3.4Accredited Investor; Non-U.S. Persons. Such Investor either (a) is an
“accredited investor” within the meaning of Securities and Exchange Commission
(“SEC”) Rule 501 of Regulation D, as presently in effect, or (b) (i) certifies
that such Investor is not a “U.S. person” within the meaning of SEC Rule 902 of
Regulation S, as presently in effect, and that such Investor is not acquiring
the Securities for the account or benefit of any such U.S. person, (ii) agrees
to resell the Securities only in accordance with the provisions of Regulation S,
pursuant to registration under the Act, or pursuant to an available exemption
from registration and agrees not to engage in hedging transactions with regard
to such Securities unless in compliance with the Act, (iii) agrees that any
certificates for any Securities issued to such Investor shall contain a legend
to the effect that transfer is prohibited except in accordance with the
provisions of Regulation S, pursuant to registration under the Act or pursuant
to an available exemption from registration and that hedging transactions
involving such Securities may not be conducted unless in compliance with the
Act, and (iv) agrees that the Company is hereby required to refuse to register
any transfer of any Securities issued to such Investor not made in accordance
with the provisions of Regulation S, pursuant to registration under the Act, or
pursuant to an available exemption from registration.

3.5Restrictions on Transfer. Such Investor understands that the Securities are
characterized as “restricted securities” under the federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Securities Act of
1933, as amended (the “Act”), only in certain limited circumstances. In this
connection, such Investor represents that it is familiar with SEC Rule 144, as
presently in effect, and understands the resale limitations imposed thereby and
by the Act. Such Investor understands that the Securities have not been and will
not be registered under the Act and have not been and will not be registered or
qualified in any state in which they are offered, and thus the Investor will not
be able to resell or otherwise transfer his, her or its Securities unless they
are registered under the Act and registered or qualified under applicable state
securities laws, or an exemption from such registration or qualification is
available. Such Investor has no immediate need for liquidity in connection with
this investment and does not anticipate that it will need to sell his, her or
its Securities in the foreseeable future. INVESTOR UNDERSTANDS AND ACKNOWLEDGES
HEREIN THAT AN INVESTMENT IN THE COMPANY’S SECURITIES INVOLVES AN EXTREMELY HIGH
DEGREE OF RISK AND MAY RESULT IN A COMPLETE LOSS OF HIS, HER OR ITS INVESTMENT.

3.6Further Limitations on Disposition. Without in any way limiting the
representations set forth above, such Investor further agrees not to make any
disposition of all or any portion of the Securities unless and until the
transferee has agreed in writing for the benefit of the Company to be bound by
this Section 3 and any other agreement that the purchasers of such Securities
are required to execute and deliver in connection with the purchase of such
Securities, and:

(a)there is then in effect a registration statement under the Act covering such
proposed disposition and such disposition is made in accordance with such
registration statement; or

- 3 -

DOCS 125362-000003/3732963.1

--------------------------------------------------------------------------------

 

(b)(i) such Investor shall have notified the Company of the proposed disposition
and shall have furnished the Company with a detailed statement of the
circumstances surrounding the proposed disposition, and (ii) if reasonably
requested by the Company, such Investor shall have furnished the Company with an
opinion of counsel reasonably satisfactory to the Company that such disposition
will not require registration of such shares under the Act. It is agreed that
the Company will not require opinions of counsel for transactions made pursuant
to Rule 144.

Notwithstanding the provisions of subsections (a) and (b) above, no such
registration statement or opinion of counsel shall be necessary for a transfer
by an Investor that is a partnership or limited liability company to a partner
of such partnership or a member of such limited liability company or a retired
partner of such partnership who retires after the date hereof or a retired
member of such limited liability company who retires after the date hereof, or
to the estate of any Investor or the transfer by gift, will or intestate
succession by any Investor to his or her spouse or to the siblings, lineal
descendants or ancestors of such Investor or his or her spouse, if the
transferee agrees in writing to be subject to the terms hereof to the same
extent as if he or she were an original Investor hereunder.

3.7Confidentiality. Such Investor agrees that he, she or it shall keep
confidential and shall not use, disclose or divulge any information which such
Investor may obtain from the Company, pursuant to financial statements, reports
and other materials submitted by the Company as required hereunder or under any
other documents, or pursuant to information rights granted to an Investor unless
such information is known, or until such information becomes known, to the
public through no fault of such Investor or its agents, or unless the Company’s
President or Chief Executive Officer gives written consent to such Investor’s
release of such information, except that no such written consent shall be
required (and Investor shall be free to release such information) if such
information is to be provided to such Investor’s counsel or accountant, or to an
officer, director, general partner, limited partner, shareholder, investment
counselor or advisor, or employee of an Investor with a need to know such
information; provided that any such counsel, accountant, officer, director,
general partner, limited partner, shareholder, investment counselor or advisor,
or employee shall be bound by the provisions of this Section 3.7.
Notwithstanding the foregoing, this Section 3.7 shall not apply (a) to
information which an Investor learns from a third party with the right to make
such disclosure, provided Investor complies with the restrictions imposed by the
third party, (b) to information which is in such Investor’s possession prior to
the time of disclosure by the Company and not acquired by Investor under a
confidentiality obligation, (c) to the minimum extent Investor is required to
disclose such information by law or a governmental regulatory authority, (d) to
the minimum extent (after requesting and pursuing confidential treatment to the
extent reasonably possible) such Investor is required to disclose such
information by court order.  For the purposes of this Agreement: (A) a Person
shall be deemed an “Affiliate” of another Person who, directly or indirectly,
controls, is controlled by or is under common control with such Person,
including, without limitation, any general partner, managing member, officer or
director of such Person or any venture capital fund now or hereafter existing
that is controlled by one or more general partners or managing members of, or
shares the same management company with, such Person; and (B) “Person” shall
mean any individual, corporation (including any nonprofit corporation), general
partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, company (including any limited liability company or joint stock
company), firm or other enterprise, association, organization or entity,
unincorporated organization or government or political subdivision thereof, or
any other entity.

3.8Investment Entity. Such Investor, if a corporation, partnership, trust or
other entity, is authorized and otherwise duly qualified to purchase and hold
the Securities; such entity has made its investment decision to purchase the
Securities at its office address for Investor as set forth on the signature page
hereto; and such entity has not been formed for the specific purpose of
acquiring the Securities.  Such Investor, if a natural person, resides in the
state identified in the address of Investor set forth on the signature page
hereto.

- 4 -

DOCS 125362-000003/3732963.1

--------------------------------------------------------------------------------

 

3.9Validity. When executed and delivered by such Investor, and assuming
execution and delivery by the Company, this Agreement constitutes such
Investor’s valid and legally binding obligations, enforceable in accordance with
its respective terms except as may be limited by (i) applicable bankruptcy,
insolvency, reorganization or other laws of general application relating to or
affecting the enforcement of creditors’ rights generally, and (ii) the effect of
rules of law governing the availability of equitable remedies.  Investor has
full power and authority to enter into this Agreement and any and all consents
required in connection herewith and the transactions contemplated hereby have
been obtained.

3.10No Tax Advice. Such Investor understands that such Investor may suffer
adverse tax consequences as a result of such Investor’s purchase or disposition
of the Securities.  Such Investor represents that he, she or it has consulted
any tax consultants that such Investor deems advisable in connection with the
purchase or disposition of the Securities and that such Investor is not relying
on the Company or the Company’s counsel for any tax advice.

4.Representations and Warranties of the Company.  The Company hereby represents
and warrants to each Investor that, at the Initial Closing:

4.1Organization, Good Standing and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to carry
on its business as now conducted.

4.2Authorization. All action on the part of the Company necessary for the
authorization, execution and delivery of this Agreement, the performance of all
obligations of the Company hereunder, and the authorization, issuance (or
reservation for issuance), sale and delivery of the Securities, has been taken
or will be taken prior to each Closing. Each of the Transaction Documents to
which the Company is a party constitutes the valid and legally binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies.

4.3Absence of Required Consents; No Violations. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any Governmental Authority on the part of the Company is required
in connection with the consummation of the transactions contemplated by the
Transaction Documents, except for such filing(s) pursuant to applicable federal
or state securities laws as may be necessary, which filings will be timely
effected after the relevant Closing. The Company is not in violation or default
(i) of any provision of its Certificate of Incorporation or Bylaws, or (ii) in
any material respect of any instrument, judgment, order, writ, decree or
contract to which it is a party or by which it is bound, except in the case of
this clause (ii) for such violations or defaults which could not reasonably be
expected to result in a material adverse effect. The execution, delivery and
performance of the Transaction Documents and the consummation of the
transactions contemplated thereby will not result in any such violation or be in
conflict with or constitute, with or without the passage of time and giving of
notice, either a default under any such provision, instrument, judgment, order,
writ, decree or contract.

4.4Valid Issuance of Securities.

(a)The Securities, when issued, sold and delivered in accordance with the terms
of this Agreement, will be duly and validly issued, fully paid, and
nonassessable, and will be free of restrictions on transfer other than
restrictions on transfer under this Agreement, and under applicable state and
federal securities laws. The Common Stock issuable upon exercise of the Warrants
will be duly and validly reserved for issuance upon the creation of such equity
securities and, upon issuance in accordance with the terms of the Company’s
Certificate of Incorporation will be duly and validly issued, fully paid,
nonassessable, and will be free of restrictions on transfer other than
restrictions on transfer under this Agreement, and under applicable state and
federal securities laws.

- 5 -

DOCS 125362-000003/3732963.1

--------------------------------------------------------------------------------

 

(b)No “bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of
the Securities Act (a “Disqualification Event”) is applicable to the Company or,
to the Company’s knowledge, any Company Covered Person, except for a
Disqualification Event as to which Rule 506(d)(2)(ii–iv) or (d)(3), is
applicable. “Company Covered Person” means, with respect to the Company as an
“issuer” for purposes of Rule 506 promulgated under the Securities Act, any
Person listed in the first paragraph of Rule 506(d)(1).

5.Legends.

5.1Federal Legends.   The stock certificates evidencing the Securities shall
bear such restrictive legends as the Company and the Company’s counsel deem
necessary or advisable under applicable law or pursuant to this Agreement,
including, without limitation, the following:

“THE SECURITIES EVIDENCED HEREBY AND ANY SECURITIES INTO WHICH THIS SECURITY IS
CONVERTIBLE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER ANY STATE SECURITIES
LAWS. SUCH SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE
DISTRIBUTED EXCEPT (I) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER THE ACT, (II) IN COMPLIANCE WITH RULE 144, OR (III)
PURSUANT TO AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, THAT
SUCH REGISTRATION OR COMPLIANCE IS NOT REQUIRED AS TO SAID SALE, OFFER OR
DISTRIBUTION.”

5.2Other Legends.  The Warrants and stock certificates evidencing the shares
issuable upon exercise of the Warrants shall also bear any legend required by
the Company’s Bylaws, or as may be required pursuant to any state, local, or
foreign law governing such securities.

5.3Refusal to Transfer.  The Company shall not be required (i) to transfer on
its books any Securities that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement, or (ii) to treat as owner
of such Securities or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Securities shall have been so
transferred.  

6.Miscellaneous.

6.1Successors and Assigns. Except as otherwise provided therein, the terms and
conditions of this Agreement and the other Transaction Documents shall inure to
the benefit of and be binding upon the respective successors and assigns of the
parties (including transferees of any Securities); provided that the Company may
not assign or transfer its rights or obligations hereunder or under the other
Transaction Documents without the prior written consent of the holders of a
majority of the aggregate Principal Amount under all Notes. The Securities shall
be transferable upon obtaining the prior written consent of the Company and
subject to compliance with applicable securities laws and Section 3. Nothing in
this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.

6.2Governing Law. This Agreement and all acts and transactions pursuant hereto
and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.

6.3Titles and Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.

- 6 -

DOCS 125362-000003/3732963.1

--------------------------------------------------------------------------------

 

6.4Notices. Except as may be otherwise provided herein, all notices, requests,
waivers and other communications made pursuant to this Agreement shall be in
writing and shall be conclusively deemed to have been duly given (a) when hand
delivered to the other party; (b) when sent by facsimile to the number set forth
below if sent between 8:00 a.m. and 5:00 p.m. recipient’s local time on a
Business Day, or on the next Business Day if sent by facsimile to the number set
forth below if sent other than between 8:00 a.m. and 5:00 p.m. recipient’s local
time on a Business Day; (c) three Business Days after deposit in the U.S. mail
with first class or certified mail receipt requested postage prepaid and
addressed to the other party at the address set forth below; or (d) the next
Business Day after deposit with a national overnight delivery service, postage
prepaid, addressed to the parties as set forth below with next Business Day
delivery guaranteed, provided that the sending party receives a confirmation of
delivery from the delivery service provider. Each Person making a communication
hereunder by facsimile shall promptly confirm by telephone to the Person to whom
such communication was addressed each communication made by it by facsimile
pursuant hereto but the absence of such confirmation shall not affect the
validity of any such communication. A party may change or supplement the
addresses given above, or designate additional addresses, for purposes of this
Section 6.4 by giving the other party written notice of the new address in the
manner set forth above.  “Business Day” shall mean any day other than a
Saturday, Sunday, U.S. federal holiday or any other day upon which banks in New
York and San Francisco are not open for business.  Any communication to an
Investor shall be sent to such Investor at the address set forth on the
signature page hereto, and if to the Company, at the following address:  

 

One Stop Systems, Inc.

2235 Enterprise St., Suite #110

Escondido, California 92029

Email:

 

 

With a copy to (which such copy shall not constitute notice):

 

 

 

Attn:

 

Email:

 

 

6.5Amendments and Waivers. Any term of this Agreement may be amended or
modified, and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only with the written consent of, or a written instrument signed by (x) the
Company; and (y) Investors who, after the Closing, hold Notes in an aggregate
Principal Amount equal to more than fifty-percent (50%) of the aggregate
Principal Amount of all then outstanding Notes.  Any waiver or amendment
effected in accordance with this Section 6.5 shall be binding upon each holder
of any Securities acquired under this Agreement at the time outstanding
(including securities into which such Securities are convertible), each future
holder of all such Securities, and the Company, and its and their respective
successors and assigns.  Notwithstanding the foregoing, the Company may
unilaterally amend Exhibit A of this Agreement to the extent necessary to add
new Investors at Subsequent Closings, in accordance with Section 2.2 of this
Agreement.

6.6Severability. In case any one or more of the provisions contained in this
Agreement shall, for any reason, be judicially determined to be invalid, illegal
or unenforceable in any respect, (i) the remaining terms and provisions hereof
shall be unimpaired and shall remain in full force and effect, and (ii) the
invalid or unenforceable provision or term shall be replaced by a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of such invalid or unenforceable term or provision, and, if the
foregoing provision of this clause (ii) is not permitted pursuant to applicable
law, then (iii) this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.

- 7 -

DOCS 125362-000003/3732963.1

--------------------------------------------------------------------------------

 

6.7Finder’s Fee. Each party represents that it neither is nor will be obligated
for any finders’ fee or commission in connection with this transaction.

6.8Further Assurances. Each Investor and the Company shall from time to time and
at all times hereafter make, do, execute, or cause or procure to be made, done
and executed such further acts, deeds, conveyances, consents and assurances
without further consideration, which may reasonably be required to effect the
transactions contemplated by the Transaction Documents.

6.9Survival of Representations Warranties and Covenants. The representations and
warranties of the Company and the Investors contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the Closing and shall in no way be affected by any investigation or knowledge of
the subject matter thereof made by or on behalf of the Investors or the Company.

6.10Separability. The obligations of each Investor under any Transaction
Document are several and not joint with the obligations of any other Investor,
and no Investor shall be responsible in any way for the performance of the
obligations of any other Investor under any Transaction Document. Each Investor
shall be responsible only for its own representations, warranties, agreements
and covenants hereunder.  Nothing contained herein or in any other Transaction
Document, and no action taken by any Investor pursuant hereto or thereto, shall
be deemed to constitute the Investors as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Investors
are in any way acting in concert or as a group with respect to such obligations
or the transactions contemplated by the Transaction Documents. Except as
otherwise provided in any Transaction Document, each Investor shall be entitled
to independently protect and enforce its rights, including without limitation
the rights arising out of this Agreement or out of the other Transaction
Documents, and it shall not be necessary for any other Investor to be joined as
an additional party in any proceeding for such purpose.  Any invalidity,
illegality or limitation on the enforceability of the Agreement or any part
thereof, by any Investor, whether arising by reason of the law of the respective
Investor’s domicile or otherwise, shall in no way affect or impair the validity,
legality or enforceability of this Agreement with respect to other Investors.

6.11Acknowledgment. Each Investor acknowledges that: (a) he, she or it has read
the Transaction Documents; (b) it has been represented in the preparation,
negotiation and execution of the Transaction Documents by legal counsel of its
own choice or has voluntarily declined to seek such counsel; and (c) it
understands the terms and consequences of the Transaction Documents and is fully
aware of the legal and binding effect of the Transaction Documents.  

6.12Construction. The Company and Investors have participated jointly in the
negotiation and drafting of this Agreement.  If an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties hereto and no presumption or burden of proof shall arise
favoring or disfavoring any party because of the authorship of any provision of
this Agreement.  The words “include,” “includes,” and “including” shall be
deemed to be followed by “without limitation.”  Pronouns in masculine, feminine,
and neuter genders shall be construed to include any other gender, and words in
the singular form shall be construed to include the plural and vice versa,
unless the context otherwise requires.  The words “this Agreement,” “herein,”
“hereof,” “hereby,” “hereunder,” and words of similar import refer to this
Agreement as a whole and not to any particular subdivision unless expressly so
limited.  Any reference herein to “day” or “days” shall, unless otherwise
provided for, mean a calendar day or calendar days.

- 8 -

DOCS 125362-000003/3732963.1

--------------------------------------------------------------------------------

 

6.13Entire Agreement. This Agreement and the Transaction Documents (and the
Exhibits hereto and thereto) constitute the entire understanding between the
Company and the Investors relative to the subject matter hereof.  Any prior and
contemporaneous agreement, discussion, understanding, correspondence and/or
communication between the Company and such Investors regarding the purchase of
securities, capital stock of the Company or otherwise, whether written or oral,
is superseded by this Agreement.

6.14Attorney’s Fees. If, in any action at law or in equity (including
arbitration), it is necessary to enforce or interpret the terms of any of the
Transaction Documents, the prevailing party shall be entitled to reasonable
attorney’s fees, costs and necessary disbursements in addition to any other
relief that such party may be entitled.

6.15Waiver of Conflicts. Each party to this Agreement acknowledges and agrees
that Procopio, Cory, Hargreaves & Savitch LLP (“Procopio”) is acting as counsel
only to the Company in connection with the preparation of this Agreement and
related securities offerings, and that Procopio has in the past represented, and
may, now or in the future, represent the Company, and/or its affiliates in
matters unrelated to the Company. The applicable rules of professional conduct
require that Procopio inform the parties previously or presently represented by
Procopio of this representation and obtain their consent. Procopio has served as
counsel to the Company and has negotiated the terms of this Agreement and
related securities offerings solely on behalf of the Company. Each party to this
Agreement acknowledges, represents and warrants to Procopio that: (A) (i) the
party has read this Agreement; (ii) the party has been represented in the
preparation, negotiation and execution of this Agreement and related securities
offerings by legal counsel of the party’s own choice or has voluntarily declined
to seek such counsel; and (iii) the party understands the terms and consequences
of this Agreement and is fully aware of the legal and binding effect; and (B)
the party understands that (i) Procopio has been retained by the Company in
connection with the preparation, negotiation and execution of this Agreement and
related securities offerings; and (ii) the party has not engaged the services of
Procopio in connection with the preparation, negotiation and execution of this
Agreement and related securities offerings and the party is not represented by
Procopio in the preparation, negotiation and execution of this Agreement and
related securities offerings.

6.16Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  Counterparts may be
delivered via facsimile, electronic mail (including pdf or any electronic
signature complying with the U.S. federal ESIGN Act of 2000, e.g.,
www.docusign.com) or other transmission method and any counterpart so delivered
shall be deemed to have been duly and validly delivered and be valid and
effective for all purposes.

 

[Signature Page Follows]

 

- 9 -

DOCS 125362-000003/3732963.1

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have executed this Note and Warrant
Purchase Agreement as of the date first above written.

 

Company:

One Stop Systems, Inc.,

 

a Delaware corporation

 

 

 

 

By:

 

 

 

John W. Morrison, Jr., Chief Financial Officer

 

INVESTORS:

 

 

If Investor is a Corporation, Partnership or Other Entity:

 

If Investor is an Individual:

 

 

 

 

 

 

Name of Entity

 

Print Name of Individual

 

 

 

Signature of Authorized Person

 

Signature of Individual

 

 

 

Print Name of Authorized Person

 

Print Name of Individual (If more than one signatory)

 

 

 

Title

 

Signature of Individual (If more than one signatory)

 

 

 

Telephone (Day):

 

 

Telephone (Day):

 

 

 

 

 

 

Facsimile:

 

 

Facsimile:

 

 

 

 

 

 

Email Address:

 

 

Email Address:

 

 

 

 

 

 

Address:

 

 

Address:

 

 

 

 

 

 

 

 

DOCS 125362-000003/3732963.1

--------------------------------------------------------------------------------

 

EXHIBITS

Exhibits

Exhibit ASchedule of Investors

Exhibit BForm of Note

Exhibit CForm of Warrant

Exhibit DForm of Security Agreement

 

 

- 11 -

DOCS 125362-000003/3732963.1

--------------------------------------------------------------------------------

 

EXHIBIT A

Schedule Of Investors

 

Investor

Principal Amount of Note

Date of Purchase

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

EXHIBIT B

Form Of Senior Secured Promissory Note

[Attached]

 

 

--------------------------------------------------------------------------------

 

EXHIBIT C

Form of Common Stock Purchase Warrant

[Attached]

 

 

 

--------------------------------------------------------------------------------

 

EXHIBIT D

Form of Security Agreement

[Attached]

- 15 -