Document:

EX-10.1-ICP Third Amendment

		

			Exhibit 10.1

		

		
			THIRD AMENDMENT TO THE
		

		
			A. H. BELO CORPORATION
		

		
			2017 INCENTIVE COMPENSATION PLAN
		

		
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			THIS THIRD AMENDMENT (the “Third Amendment”) to the A. H. Belo 2017 Incentive Compensation Plan, as amended from time to time (the “Plan”), has been adopted by A. H. Belo Corporation, a Texas corporation (the “Company”). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Plan.
		

		
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			W I T N E S S E T H:
		

		
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			WHEREAS, the Company previously adopted the Plan; 
		

		
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			WHEREAS, Section 18(a) of the Plan provides that the board of directors of the Company (the “Board”) or the Compensation Committee of the Board (the “Committee”) may amend the Plan from time to time without the consent of any Participant, other holder or beneficiary of an Award, or any other person;
		

		
			WHEREAS,  the Company intends to change its name to “DallasNews Corporation” effective upon the filing of an amendment to its Certificate of Formation and desires to amend the Plan to reflect such name change effective immediately upon such filing;
		

		
			WHEREAS,  the Company intends to affect a reverse stock split with respect to its shares of Common Stock and Section 14 of the Plan provides that the Committee shall adjust the maximum number of shares of Common Stock specified in Section 4 and Section 5 of the Plan upon such a split;
		

		
			WHEREAS, the Committee desires to amend the Plan to reduce the number of shares of Common Stock available to an amount that is lower than the amount that would be available following adjustments to the Plan to reflect the reserve stock split; 
		

		
			WHEREAS,  the Board now desires to amend the Plan effective immediately following the Company’s reverse stock split to (i) reduce the aggregate number of shares of Common Stock that may be issued or transferred under the Plan, as set forth in Section 4 of the Plan, to 1 million shares, (ii) adjust the limit on incentive stock option grants in Section 5 to reflect the lower number of authorized shares,  and (iii) remove the limitations in Section 5(c) and 5(d) that are no longer required due to the changes made to Section 162(m) of the Internal Revenue Code; and
		

		
			WHEREAS, the Board has determined that the Third Amendment shall be made effective as of the dates set forth below.
		

		
			NOW, THEREFORE,  the Plan shall be amended as set forth below:
		

		
			1.Effective on the date that the Company files an amendment to its Certificate of Formation to change its name (“Name Change Effective Date”), the name of the Plan shall be, and hereby is, amended to be the “DallasNews Corporation 2017 Incentive Compensation Plan” and 
		

		 

 

		all references in the Plan to “A. H. Belo Corporation” shall be and hereby are, amended to refer to “DallasNews Corporation”.
		

		
			2.Effective on immediately following the Company’s reverse stock split (the “Share Adjustment Effective Date”), Section 4 of the Plan shall be, and it hereby is, amended by deleting said section in its entirety and substituting in lieu thereof the following new Section 4:
		

		
			4.    Shares Available Under Plan. The number of shares of Common Stock that may be issued or transferred (i) upon the exercise of Appreciation Rights or Stock Options, (ii) as Restricted Shares and released from all restrictions, (iii) as Restricted Stock Units, (iv) in payment of Performance Shares, Performance Units or Incentive Compensation Plan Bonuses will not exceed in the aggregate 1 million shares. Such shares may be shares of original issuance or treasury shares or a combination of the foregoing. The number of shares of Common Stock available under this Section 4 will be subject to adjustment as provided in Section 14 and will be further adjusted to include shares that (i) relate to Awards that expire or are forfeited or (ii) are transferred, surrendered or relinquished to or withheld by A. H. Belo in satisfaction of any Option Price or in satisfaction of any tax withholding amount. Upon payment in cash of the benefit provided by any Award, any shares that were covered by that Award will again be available for issue or transfer under the Plan.
		

		
			3.Effective as of the Share Adjustment Effective Date, Section 5 of the Plan shall be, and it hereby is, amended by deleting said Section in its entirety and substituting in lieu thereof the following new Section 5:
		

		
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			5.    Limitations on Awards.  No more than 1 million shares of Common Stock, subject to adjustment only as provided in Section 14, will be issued pursuant to Stock Options that are intended to qualify as incentive stock options under Section 422 of the Code pursuant to the terms of this 2017 Incentive Compensation Plan. No Stock Option may be issued to a Director if such Stock Option is intended to qualify as an incentive stock option under Section 422 of the Code, instead the Director’s Stock Option shall be treated as a Stock Option issued under Section 12(c) of the Plan.
		

		
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			RESOLVED FURTHER, that except as amended hereby, the Plan is specifically ratified and reaffirmed.
		

		
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			[Signature Page Follows]
		

		
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		IN WITNESS WHEREOF, the Company has executed this Third Amendment, effective as of the Name Change Effective Date and the Share Adjustment Effective Date, as set forth above.
		

			
					
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						COMPANY:

				
	
					
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						A. H. BELO CORPORATION,

				
	
					
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						a Texas corporation

				
	
					
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						A T

					
					
						 

				
	
					
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						By:

					
					
						 

					
					
						/s/ Katy Murray

				
	
					
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						Its:

					
					
						 

					
					
						Executive Vice President/Chief Financial Officer

				

		
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			3Exhibit 4.1

 

Representative’s Warrant Agreement

 

THE REGISTERED HOLDER OF THIS PURCHASE WARRANT
BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE WARRANT EXCEPT AS HEREIN PROVIDED AND THE REGISTERED
HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE WARRANT FOR A PERIOD
OF ONE HUNDRED EIGHTY DAYS FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE OTHER THAN (I) KINGSWOOD CAPITAL MARKETS, DIVISION
OF BENCHMARK INVESTMENTS, INC. OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER
OR PARTNER OF KINGSWOOD CAPITAL MARKETS, DIVISION OF BENCHMARK INVESTMENTS, INC. OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.

 

THIS PURCHASE WARRANT IS NOT EXERCISABLE PRIOR
TO NOVEMBER 13, 2021. VOID AFTER 5:00 P.M., EASTERN TIME, MAY 13, 2026.

 

COMMON STOCK PURCHASE WARRANT

 

For the Purchase of 120,482
Shares of Common Stock

of

DIGITAL BRANDS GROUP, INC.

 

1.              Purchase
Warrant. THIS CERTIFIES THAT, in consideration of funds duly paid by or on behalf of Kingswood Capital Markets, division of Benchmark
Investments, Inc. (“Holder”), as registered owner of this Purchase Warrant, Digital Brands Group, Inc., a
Delaware corporation (the “Company”), Holder is entitled, at any time or from time to time from November 13, 2021
(the “Commencement Date”), and at or before 5:00   p.m., Eastern time, May 13, 2026 (the ”Expiration Date”),
but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to 120,482 shares of common stock of the Company,
par value $0.0001 per share (the “Shares”), subject to adjustment as provided in Section 6 hereof. If the Expiration
Date is a day on which banking institutions are authorized by law to close, then this Purchase Warrant may be exercised on the next succeeding
day which is not such a day in accordance with the terms herein. During the period ending on the Expiration Date, the Company agrees not
to take any action that would terminate this Purchase Warrant. This Purchase Warrant is initially exercisable at $5.19 per Share ; provided,
however, that upon the occurrence of any of the events specified in Section 6 hereof, the rights granted by this Purchase
Warrant, including the exercise price per Share and the number of Shares to be received upon such exercise, shall be adjusted as therein
specified. The term “Exercise Price” shall mean the initial exercise price or the adjusted exercise price, depending
on the context. The term “Effective Date” shall mean May 13, 2021, the date on which the Registration Statement
on Form S-1 (File No. 333- 255193) of the Company was declared effective by the Securities and Exchange Commission.

 

2.              Exercise.

 

2.1           Exercise
Form. In order to exercise this Purchase Warrant, the exercise form attached hereto must be duly executed and completed and delivered
to the Company, together with this Purchase Warrant and payment of the Exercise Price for the Shares being purchased payable in cash by
wire transfer of immediately available funds to an account designated by the Company or by certified check or official bank check. If
the subscription rights represented hereby shall not be exercised at or before 5:00 p.m., Eastern time, on the Expiration Date, this Purchase
Warrant shall become and be void without further force or effect, and all rights represented hereby shall cease and expire.

 

2.2           Cashless
Exercise.  If at any time after the Commencement Date there is no effective registration statement registering, or no current
prospectus available for, the resale of the Shares by the Holder, then in lieu of exercising this Purchase Warrant by payment of cash
or check payable to the order of the Company pursuant to Section 2.1 above, Holder may elect to receive the number of Shares equal
to the value of this Purchase Warrant (or the portion thereof being exercised), by surrender of this Purchase Warrant to the Company,
together with the exercise form attached hereto, in which event the Company shall issue to Holder, Shares in accordance with the following
formula:

 

     

     

    

 

	X	=	Y(A-B)	 
	A	 

 

	Where,	 	 	 
	 	X	=	The number of Shares to be issued to Holder;
	 	Y	=	The number of Shares for which the Purchase Warrant is being exercised;
	 	A	=	The fair market value of one Share; and
	 	B	=	The Exercise Price.

 

For purposes of this Section 2.2,
the fair market value of a Share is defined as follows:

 

		(i)	if the Company’s common stock is traded on a securities exchange, the value shall be deemed to be
the closing price on such exchange prior to the exercise form being submitted in connection with the exercise of the Purchase Warrant;
or

 

		(ii)	if the Company’s common stock is actively traded over-the-counter, the value shall be deemed to
be the closing bid price prior to the exercise form being submitted in connection with the exercise of the Purchase Warrant; if there
is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Company’s Board
of Directors.

 

2.3           Legend.
Each certificate for the securities purchased under this Purchase Warrant shall bear a legend as follows unless such securities have been
registered under the Securities Act of 1933, as amended (the “Securities Act”):

 

“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE
STATE LAW. NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
AND APPLICABLE STATE LAW WHICH, IN THE OPINION OF COUNSEL TO THE COMPANY, IS AVAILABLE.”

 

3.             Transfer.

 

3.1           General
Restrictions. The registered Holder of this Purchase Warrant agrees by his, her or its acceptance hereof, that such Holder will not:
(a) sell, transfer, assign, pledge or hypothecate this Purchase Warrant or the securities issuable hereunder for a period of three
hundred sixty (360) days following the Effective Date to anyone other than: (i) Kingswood Capital Markets, division of Benchmark
Investments, Inc. (“Kingswood”) or an underwriter or a selected dealer participating in the Offering, or (ii) a
bona fide officer or partner of Kingswood or of any such underwriter or selected dealer, in each case in accordance with FINRA Conduct
Rule 5110(e)(1), or (b) for a period of three hundred sixty (360) days following the Effective Date, cause this Purchase Warrant
or the securities issuable hereunder to be the subject of any hedging, short sale, derivative, put or call transaction that would result
in the effective economic disposition of this Purchase Warrant or the securities hereunder, except as provided for in FINRA Rule 5110(e)(2).
On and after 360 days after the Effective Date, transfers to others may be made subject to compliance with or exemptions from applicable
securities laws. In order to make any permitted assignment, the Holder must deliver to the Company the assignment form attached hereto
duly executed and completed, together with the Purchase Warrant and payment of all transfer taxes, if any, payable in connection therewith.
The Company shall within five (5) business days transfer this Purchase Warrant on the books of the Company and shall execute and
deliver a new Purchase Warrant or Purchase Warrants of like tenor to the appropriate assignee(s) expressly evidencing the right to
purchase the aggregate number of Shares purchasable hereunder or such portion of such number as shall be contemplated by any such assignment.

 

     

     

    

 

3.2           Restrictions
Imposed by the Securities Act. The securities evidenced by this Purchase Warrant shall not be transferred unless and until: (i) the
Company has received the opinion of counsel for the Holder that the securities may be transferred pursuant to an exemption from registration
under the Securities Act and applicable state securities laws, the availability of which is established to the reasonable satisfaction
of the Company (the Company hereby agreeing that the opinion of Manatt, Phelps & Phillips, LLP shall be deemed satisfactory evidence
of the availability of an exemption), or (ii) a registration statement or a post-effective amendment to the Registration Statement
relating to the offer and sale of such securities has been filed by the Company and declared effective by the U.S. Securities and Exchange
Commission (the “Commission”) and compliance with applicable state securities law has been established.

 

4              Registration
Rights.

 

4.1           Demand
Registration.

 

4.1.1            Grant
of Right. The Company, upon written demand (a “Demand Notice”) of the Holders of at least 51% of the Purchase Warrants
and/or the underlying Shares, agrees to register, on one (1) occasion, all or any portion of the Shares underlying the Purchase Warrants
(collectively, the “Registrable Securities”). On such occasion, the Company will file a registration statement with
the Commission covering the Registrable Securities within sixty (60) days after receipt of a Demand Notice and use its reasonable best
efforts to have the registration statement declared effective promptly thereafter, subject to compliance with review by the Commission;
provided, however, that the Company shall not be required to comply with a Demand Notice if the Company has filed a registration
statement with respect to which the Holder is entitled to piggyback registration rights pursuant to Section 4.2 hereof and either:
(i) the Holder has elected to participate in the offering covered by such registration statement or (ii) if such registration
statement relates to an underwritten primary offering of securities of the Company, until the offering covered by such registration statement
has been withdrawn or until thirty (30) days after such offering is consummated. The Company covenants and agrees to give written notice
of its receipt of any Demand Notice by any Holders to all other registered Holders of the Purchase Warrants and/or the Registrable Securities
within ten (10) days after the date of the receipt of any such Demand Notice.

 

4.1.2            Terms.
The Company shall bear all fees and expenses attendant to the registration of the Registrable Securities pursuant to Section 4.1.1,
but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent
them in connection with the sale of the Registrable Securities. The Company agrees to use its reasonable best efforts to cause the filing
required herein to become effective promptly and to qualify or register the Registrable Securities in such states as are reasonably requested
by the Holders; provided, however, that in no event shall the Company be required to register the Registrable Securities
in a State in which such registration would cause: (i) the Company to be obligated to register or license to do business in such
State or submit to general service of process in such State, or (ii) the principal stockholders of the Company to be obligated to
escrow their shares of capital stock of the Company. The Company shall cause any registration statement filed pursuant to the demand right
granted under Section 4.1.1 to remain effective for a period of at least twelve (12) consecutive months after the date that the Holders
of the Registrable Securities covered by such registration statement are first given the opportunity to sell all of such securities. The
Holders shall only use the prospectuses provided by the Company to sell the shares covered by such registration statement, and will immediately
cease to use any prospectus furnished by the Company if the Company advises the Holder that such prospectus may no longer be used due
to a material misstatement or omission. Notwithstanding the provisions of this Section 4.1.2, the Holder shall be entitled to a demand
registration under this Section 4.1.2 on only one (1) occasion and such demand registration right shall terminate on the fifth
anniversary of the Effective Date in accordance with FINRA Rule 5110(g)(8)(C).

 

4.2           “Piggy-Back”
Registration.

 

4.2.1            Grant
of Right. In addition to the demand right of registration described in Section 4.1 hereof, the Holder shall have the right, for
a period of no more than five (5) years from the Effective Date in accordance with FINRA Rule 5110(g)(8)(D), to include the
Registrable Securities as part of any other registration of securities filed by the Company (other than in connection with a transaction
contemplated by Rule 145(a) promulgated under the Securities Act or pursuant to Form S-8 or Form S-4 or any equivalent
form); provided, however, that if, solely in connection with any primary underwritten public offering for the account of
the Company, the managing underwriter(s) thereof shall, in its reasonable discretion, impose a limitation on the number of shares
of common stock which may be included in the Registration Statement because, in such underwriter(s)’ judgment, marketing or other
factors dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to include in such
Registration Statement only such limited portion of the Registrable Securities with respect to which the Holder requested inclusion hereunder
as the underwriter shall reasonably permit. Any exclusion of Registrable Securities shall be made pro rata among the Holders seeking to
include Registrable Securities in proportion to the number of Registrable Securities sought to be included by such Holders; provided,
however, that the Company shall not exclude any Registrable Securities unless the Company has first excluded all outstanding securities,
the holders of which are not entitled to inclusion of such securities in such Registration Statement or are not entitled to pro rata inclusion
with the Registrable Securities.

 

     

     

    

 

4.2.2              Terms.
The Company shall bear all fees and expenses attendant to registering the Registrable Securities pursuant to Section 4.2.1 hereof,
but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent
them in connection with the sale of the Registrable Securities. In the event of such a proposed registration, the Company shall furnish
the then Holders of outstanding Registrable Securities with not less than thirty (30) days’ written notice prior to the proposed
date of filing of such registration statement. Such notice to the Holders shall continue to be given for each registration statement filed
by the Company until such time as all of the Registrable Securities have been sold by the Holder. The holders of the Registrable Securities
shall exercise the “piggy-back” rights provided for herein by giving written notice within ten (10) days of the receipt
of the Company’s notice of its intention to file a registration statement. Except as otherwise provided in this Purchase Warrant,
there shall be no limit on the number of times the Holder may request registration under this Section 4.2.2; provided, however,
that such registration rights shall terminate on the fifth anniversary of the Commencement Date.

 

4.3           General
Terms.

 

4.3.1              Indemnification.
The Company shall indemnify the Holders of the Registrable Securities to be sold pursuant to any registration statement hereunder and
each person, if any, who controls such Holders within the meaning of Section 15 of the Securities Act or Section 20(a) of
the Securities Exchange Act of 1934, as amended (“Exchange Act”), against all loss, claim, damage, expense or liability
(including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against
any claim whatsoever) to which any of them may become subject under the Securities Act, the Exchange Act or otherwise, arising from such
registration statement but only to the same extent and with the same effect as the provisions pursuant to which the Company has agreed
to indemnify the Underwriters contained in Section 5.1 of the Underwriting Agreement between the Underwriters and the Company, dated
as of May 13, 2021. The Holders of the Registrable Securities to be sold pursuant to such registration statement, and their successors
and assigns, shall severally, and not jointly, indemnify the Company, against all loss, claim, damage, expense or liability (including
all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim
whatsoever) to which they may become subject under the Securities Act, the Exchange Act or otherwise, arising from information furnished
by or on behalf of such Holders, or their successors or assigns, in writing, for specific inclusion in such registration statement to
the same extent and with the same effect as the provisions contained in Section 5.2 of the Underwriting Agreement pursuant to which
the Underwriters have agreed to indemnify the Company.

 

4.3.2            Exercise
of Purchase Warrants. Nothing contained in this Purchase Warrant shall be construed as requiring the Holders to exercise their Purchase
Warrants prior to or after the initial filing of any registration statement or the effectiveness thereof.

 

4.3.3            Documents
Delivered to Holders. The Company shall furnish to each Holder participating in any of the foregoing offerings and to each underwriter
of any such offering, if any, a signed counterpart, addressed to such Holder or underwriter, of: (i) an opinion of counsel to the
Company, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering,
an opinion dated the date of the closing under any underwriting agreement related thereto), and (ii) a “cold comfort”
letter dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, a
letter dated the date of the closing under the underwriting agreement) signed by the independent registered public accounting firm which
has issued a report on the Company’s financial statements included in such registration statement, in each case covering substantially
the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of such accountants’
letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer’s
counsel and in accountants’ letters delivered to underwriters in underwritten public offerings of securities. The Company shall
also deliver promptly to each Holder participating in the offering requesting the correspondence and memoranda described below and to
the managing underwriter, if any, copies of all correspondence between the Commission and the Company, its counsel or auditors and all
memoranda relating to discussions with the Commission or its staff with respect to the registration statement and permit each Holder and
underwriter to do such investigation, upon reasonable advance notice, with respect to information contained in or omitted from the registration
statement as it deems reasonably necessary to comply with applicable securities laws or rules of FINRA. Such investigation shall
include access to books, records and properties and opportunities to discuss the business of the Company with its officers and independent
auditors, all to such reasonable extent and at such reasonable times as any such Holder shall reasonably request.

 

     

     

    

 

4.3.4            Underwriting
Agreement. The Company shall enter into an underwriting agreement with the managing underwriter(s), if any, selected by any Holders
whose Registrable Securities are being registered pursuant to this Section 4, which managing underwriter shall be reasonably satisfactory
to the Company. Such agreement shall be reasonably satisfactory in form and substance to the Company, each Holder and such managing underwriters,
and shall contain such representations, warranties and covenants by the Company and such other terms as are customarily contained in agreements
of that type used by the managing underwriter. The Holders shall be parties to any underwriting agreement relating to an underwritten
sale of their Registrable Securities and may, at their option, require that any or all the representations, warranties and covenants of
the Company to or for the benefit of such underwriters shall also be made to and for the benefit of such Holders. Such Holders shall not
be required to make any representations or warranties to or agreements with the Company or the underwriters except as they may relate
to such Holders, their Shares and their intended methods of distribution.

 

4.3.5            Documents
to be Delivered by Holders. Each of the Holders participating in any of the foregoing offerings shall furnish to the Company a completed
and executed questionnaire provided by the Company requesting information customarily sought of selling security holders.

 

4.3.6            Damages.
Should the registration or the effectiveness thereof required by Sections 4.1 and 4.2 hereof be delayed by the Company or the Company
otherwise fails to comply with such provisions, the Holders shall, in addition to any other legal or other relief available to the Holders,
be entitled to obtain specific performance or other equitable (including injunctive) relief against the threatened breach of such provisions
or the continuation of any such breach, without the necessity of proving actual damages and without the necessity of posting bond or other
security.

 

4.4           Termination
of Registration Rights. The registration rights afforded to the Holders under this Section 4 shall terminate on the earliest
date when all Registrable Securities of such Holder either: (i) have been publicly sold by such Holder pursuant to a Registration
Statement, (ii) have been covered by an effective Registration Statement on Form S-1 or Form S-3 (or successor form), which
may be kept effective as an evergreen Registration Statement, or (iii) may be sold by the Holder within a 90 day period without registration
pursuant to Rule 144 or consistent with applicable SEC interpretive guidance (including CD&I no. 201.04 (April 2, 2007)
or similar interpretive guidance).

 

5.             New
Purchase Warrants to be Issued.

 

5.1           Partial
Exercise or Transfer. Subject to the restrictions in Section 3 hereof, this Purchase Warrant may be exercised or assigned in
whole or in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Purchase Warrant for cancellation,
together with the duly executed exercise or assignment form and funds sufficient to pay any Exercise Price and/or transfer tax if exercised
pursuant to Section 2.1 hereto, the Company shall cause to be delivered to the Holder without charge a new Purchase Warrant of like
tenor to this Purchase Warrant in the name of the Holder evidencing the right of the Holder to purchase the number of Shares purchasable
hereunder as to which this Purchase Warrant has not been exercised or assigned.

 

5.2          Lost
Certificate. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Purchase
Warrant and of reasonably satisfactory indemnification or the posting of a bond, the Company shall execute and deliver a new Purchase
Warrant of like tenor and date. Any such new Purchase Warrant executed and delivered as a result of such loss, theft, mutilation or destruction
shall constitute a substitute contractual obligation on the part of the Company.

 

     

     

    

 

6.              Adjustments.

 

6.1           Adjustments
to Exercise Price and Number of Securities. The Exercise Price and the number of Shares underlying the Purchase Warrant shall be subject
to adjustment from time to time as hereinafter set forth:

 

6.1.1           Share
Dividends; Split Ups. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of outstanding
Shares is increased by a stock dividend payable in Shares or by a split up of Shares or other similar event, then, on the effective day
thereof, the number of Shares purchasable hereunder shall be increased in proportion to such increase in outstanding Shares, and the Exercise
Price shall be proportionately decreased.

 

6.1.2           Aggregation
of Shares. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of outstanding Shares is
decreased by a consolidation, combination or reclassification of Shares or other similar event, then, on the effective date thereof, the
number of Shares purchasable hereunder shall be decreased in proportion to such decrease in outstanding Shares, and the Exercise Price
shall be proportionately increased.

 

6.1.3           Replacement
of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding Shares other than
a change covered by Section 6.1.1 or 6.1.2 hereof or that solely affects the par value of such Shares, or in the case of any share
reconstruction or amalgamation or consolidation of the Company with or into another corporation (other than a consolidation or share reconstruction
or amalgamation in which the Company is the continuing corporation and that does not result in any reclassification or reorganization
of the outstanding Shares), or in the case of any sale or conveyance to another corporation or entity of the property of the Company as
an entirety or substantially as an entirety in connection with which the Company is dissolved, the Holder of this Purchase Warrant shall
have the right thereafter (until the expiration of the right of exercise of this Purchase Warrant) to receive upon the exercise hereof,
for the same aggregate Exercise Price payable hereunder immediately prior to such event, the kind and amount of shares of stock or other
securities or property (including cash) receivable upon such reclassification, reorganization, share reconstruction or amalgamation, or
consolidation, or upon a dissolution following any such sale or transfer, by a Holder of the number of Shares of the Company obtainable
upon exercise of this Purchase Warrant immediately prior to such event; and if any reclassification also results in a change in Shares
covered by Section 6.1.1 or 6.1.2, then such adjustment shall be made pursuant to Sections 6.1.1, 6.1.2 and this Section 6.1.3.
The provisions of this Section 6.1.3 shall similarly apply to successive reclassifications, reorganizations, share reconstructions
or amalgamations, or consolidations, sales or other transfers.

 

6.1.4           Changes
in Form of Purchase Warrant. This form of Purchase Warrant need not be changed because of any change pursuant to this Section 6.1,
and Purchase Warrants issued after such change may state the same Exercise Price and the same number of Shares as are stated in the Purchase
Warrants initially issued pursuant to this Agreement. The acceptance by any Holder of the issuance of new Purchase Warrants reflecting
a required or permissive change shall not be deemed to waive any rights to an adjustment occurring after the Commencement Date or the
computation thereof.

 

6.2           Substitute
Purchase Warrant. In case of any consolidation of the Company with, or share reconstruction or amalgamation of the Company with or
into, another corporation (other than a consolidation or share reconstruction or amalgamation which does not result in any reclassification
or change of the outstanding Shares), the corporation formed by such consolidation or share reconstruction or amalgamation shall execute
and deliver to the Holder a supplemental Purchase Warrant providing that the holder of each Purchase Warrant then outstanding or to be
outstanding shall have the right thereafter (until the stated expiration of such Purchase Warrant) to receive, upon exercise of such Purchase
Warrant, the kind and amount of shares of stock and other securities and property receivable upon such consolidation or share reconstruction
or amalgamation, by a holder of the number of Shares for which such Purchase Warrant might have been exercised immediately prior to such
consolidation, share reconstruction or amalgamation, sale or transfer. Such supplemental Purchase Warrant shall provide for adjustments
which shall be identical to the adjustments provided for in this Section 6. The above provision of this Section shall similarly
apply to successive consolidations or share reconstructions or amalgamations.

 

6.3           Elimination
of Fractional Interests. The Company shall not be required to issue certificates representing fractions of Shares upon the exercise
of the Purchase Warrant, nor shall it be required to issue scrip or pay cash in lieu of any fractional interests, it being the intent
of the parties that all fractional interests shall be eliminated by rounding any fraction up or down, as the case may be, to the nearest
whole number of Shares or other securities, properties or rights.

 

     

     

    

 

7.             Reservation
and Listing. The Company shall at all times reserve and keep available out of its authorized Shares, solely for the purpose of issuance
upon exercise of the Purchase Warrants, such number of Shares or other securities, properties or rights as shall be issuable upon the
exercise thereof. The Company covenants and agrees that, upon exercise of the Purchase Warrants and payment of the Exercise Price therefor,
in accordance with the terms hereby, all Shares and other securities issuable upon such exercise shall be duly and validly issued, fully
paid and non-assessable and not subject to preemptive rights of any stockholder. The Company further covenants and agrees that upon exercise
of the Purchase Warrants and payment of the exercise price therefor, all Shares and other securities issuable upon such exercise shall
be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any stockholder. As long as the Purchase
Warrants shall be outstanding, the Company shall use its commercially reasonable efforts to cause all Shares issuable upon exercise of
the Purchase Warrants to be listed (subject to official notice of issuance) on all national securities exchanges (or, if applicable, on
the OTC Bulletin Board or any successor trading market) on which the Shares issued to the public in the Offering may then be listed and/or
quoted.

 

8.             Certain
Notice Requirements.

 

8.1           Holder’s
Right to Receive Notice. Nothing herein shall be construed as conferring upon the Holders the right to vote or consent or to receive
notice as a stockholder for the election of directors or any other matter, or as having any rights whatsoever as a stockholder of the
Company. If, however, at any time prior to the expiration of the Purchase Warrants and their exercise, any of the events described in
Section 8.2 shall occur, then, in one or more of said events, the Company shall give written notice of such event at least fifteen
(15) days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the stockholders
entitled to such dividend, distribution, conversion or exchange of securities or subscription rights, or entitled to vote on such proposed
dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of the closing of the transfer books,
as the case may be. Notwithstanding the foregoing, the Company shall deliver to each Holder a copy of each notice given to the other stockholders
of the Company at the same time and in the same manner that such notice is given to the stockholders.

 

8.2           Events
Requiring Notice. The Company shall be required to give the notice described in this Section 8 upon one or more of the following
events: (i) if the Company shall take a record of the holders of its Shares for the purpose of entitling them to receive a dividend
or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of retained earnings, as
indicated by the accounting treatment of such dividend or distribution on the books of the Company; (ii) the Company shall offer
to all the holders of its Shares any additional shares of capital stock of the Company or securities convertible into or exchangeable
for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor; or (iii) a dissolution, liquidation
or winding up of the Company (other than in connection with a consolidation or share reconstruction or amalgamation) or a sale of all
or substantially all of its property, assets and business shall be proposed.

 

8.3           Notice
of Change in Exercise Price. The Company shall, promptly after an event requiring a change in the Exercise Price pursuant to Section 6
hereof, send notice to the Holders of such event and change (“Price Notice”). The Price Notice shall describe the event
causing the change and the method of calculating same and shall be certified as being true and accurate by the Company’s Chief Financial
Officer.

 

8.4           Transmittal
of Notices. All notices, requests, consents and other communications under this Purchase Warrant shall be in writing and shall be
deemed to have been duly made when hand delivered or mailed by express mail or private courier service: (i) if to the registered
Holder of the Purchase Warrant, to the address of such Holder as shown on the books of the Company, or (ii) if to the Company, to
following address or to such other address as the Company may designate by notice to the Holders:

 

     

     

    

 

If to the Holder:

 

Kingswood Capital Markets

17 Battery Place, Suite 625

New York, New York 10004

Attn: Joseph T. Rallo

 

with a copy (which shall not constitute
notice) to:

 

Nelson Mullins Riley & Scarborough
LLP

101 Constitution Avenue NW, Suite 900

Washington, DC 20001

Attn: Andrew M. Tucker, Esq.

Fax No.: (202) 689-2860

 

If to the Company:

 

Digital Brands Group, Inc.

1400 Lavaca Street

Austin, Texas 78701

Attn: John Hilburn Davis IV

Email: hil@dstld.la

 

with a copy (which shall not constitute
notice) to:

 

Manatt, Phelps & Phillips, LLP

695 Town Center Drive, 14th
Floor

Costa Mesa, CA 92646

Attn: Thomas J. Poletti, Esq.

Fax No.: (714) 371-2551

 

9.             Miscellaneous.

 

9.1           Amendments.
The Company and Kingswood may from time to time supplement or amend this Purchase Warrant without the approval of any of the Holders in
order to cure any ambiguity, to correct or supplement any provision contained herein that may be defective or inconsistent with any other
provisions herein, or to make any other provisions in regard to matters or questions arising hereunder that the Company and Kingswood
may deem necessary or desirable and that the Company and Kingswood deem shall not adversely affect the interest of the Holders. All other
modifications or amendments shall require the written consent of and be signed by the party against whom enforcement of the modification
or amendment is sought.

 

9.2           Headings.
The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Purchase Warrant.

 

9.3           Entire
Agreement. This Purchase Warrant (together with the other agreements and documents being delivered pursuant to or in connection with
this Purchase Warrant) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes
all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.

 

9.4           Binding
Effect. This Purchase Warrant shall inure solely to the benefit of and shall be binding upon, the Holder and the Company and their
permitted assignees, respective successors, legal representative and assigns, and no other person shall have or be construed to have any
legal or equitable right, remedy or claim under or in respect of or by virtue of this Purchase Warrant or any provisions herein contained.

 

     

     

    

 

9.5           Governing
Law; Submission to Jurisdiction; Trial by Jury. This Purchase Warrant shall be governed by and construed and enforced in accordance
with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees that any
action, proceeding or claim against it arising out of, or relating in any way to this Purchase Warrant shall be brought and enforced in
the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, and irrevocably
submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction
and that such courts represent an inconvenient forum. Any process or summons to be served upon the Company may be served by transmitting
a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in
Section 8 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding
or claim. The Company and the Holder agree that the prevailing party(ies) in any such action shall be entitled to recover from the other
party(ies) all of its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection
with the preparation therefor. The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders
and affiliates) and the Holder hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial
by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

 

9.6           Waiver, etc.
The failure of the Company or the Holder to at any time enforce any of the provisions of this Purchase Warrant shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the validity of this Purchase Warrant or any provision hereof
or the right of the Company or any Holder to thereafter enforce each and every provision of this Purchase Warrant. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Purchase Warrant shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance
or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.

 

9.7           Execution
in Counterparts. This Purchase Warrant may be executed in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement,
and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the other
parties hereto. Such counterparts may be delivered by facsimile transmission or other electronic transmission.

 

9.8           Exchange
Agreement. As a condition of the Holder’s receipt and acceptance of this Purchase Warrant, Holder agrees that, at any time prior
to the complete exercise of this Purchase Warrant by Holder, if the Company and Kingswood enter into an agreement (“Exchange
Agreement”) pursuant to which they agree that all outstanding Purchase Warrants will be exchanged for securities or cash or
a combination of both, then Holder shall agree to such exchange and become a party to the Exchange Agreement.

 

[Signature Page Follows]

 

     

     

    

 

IN WITNESS WHEREOF, the Company has caused this
Purchase Warrant to be signed by its duly authorized officer as of the 18 day of May, 2021.

 

DIGITAL BRANDS GROUP, INC.

 

	By:	 /s/ John Hilburn Davis IV	 
	 	Name: John Hilburn Davis IV	 
	 	Title: President and Chief Executive Officer

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