Material Agreement (Form 8-K)

On August 13, 2025 (the "Execution Date"), Universal Safety Products, Inc., a Maryland corporation (the "Company") entered into a Securities Purchase Agreement (the "Agreement") with SJC Lending LLC, a Delaware limited liability company ("SJC"), pursuant to which the Company agreed to sell to SJC convertible promissory notes in the aggregate principal amount of up to $2,750,000 (the "Convertible Notes") for a total purchase price of up to $2.5 million dollars (the "Loan"),

The consummation of the transactions contemplated by the Agreement, specifically the conversion of the Convertible Notes in an aggregate number in excess of 19.99% of the number of shares of the Company's common stock, par value $0.01 per share (the "Common Stock") on the Execution Date, are subject to various customary closing conditions as well as regulatory and Stockholder Approval (as hereinafter defined).

The material terms of the Agreement and the Convertible Notes are summarized below.

Description of the Agreement

The Agreement provides that the Loan shall be conducted through three (3) separate tranche closings, provided, however, that SJC has the ability, exercisable in its sole discretion, to purchase any principal face amount of Convertible Notes prior to the dates of the tranche closings provided for in the Agreement. Pursuant to the Agreement, the initial tranche closing, which occurred on the Execution Date, consisted of the issuance of a Convertible Note to SJC in the principal face amount of $1.1 million, for a purchase price of One Million Dollars ($1,000,000).

Pursuant to the Agreement, upon the filing by the Company with the Securities and Exchange Commission (the "SEC") of a registration statement (the "Registration Statement") registering for resale under the Securities Act of 1933, as amended (the "Securities Act") the shares of Comon Stock issuable upon conversion of the Convertible Notes, SJC shall be required to purchase a Convertible Note in the principal face amount of $550,000, for a purchase price of Five Hundred Thousand Dollars ($500,000).

Pursuant to the Agreement, upon the SEC declaring the Registration Statement effective, subject to Stockholder Approval having been obtained, SJC shall be required to purchase a Convertible Note in the principal face amount of $1.1 million, for a purchase price of One Million Dollars ($1,000,000).

Commencing on the Execution Date and continuing for a period of ninety (90) days thereafter, neither the Company nor any subsidiary thereof shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or instruments convertible into, exercisable or exchangeable for such shares of Common Stock, with certain exceptions.

Additionally, commencing on the Execution Date and continuing until the earlier of (i) such date when the Convertible Notes are no longer outstanding or (ii) one (1) year thereafter, the Company shall be prohibited from entering into a variable rate transaction.

From the Execution Date and continuing until the date that is one (1) year therefrom, SJC shall have a right of first refusal with respect to any investment proposed to be made by any individual or entity for each and every future public or private equity offering, including a debt instrument convertible into equity of the Company during such period.

The Agreement contains customary representations, warranties and agreements by the Company, obligations of the parties, termination provisions and closing conditions. The representations, warranties and covenants contained in the Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties.

Description of Convertible Notes

The first Convertible Note, which was issued to SJC on the Execution Date, has a principal face amount of $1,100,000 and was issued with an original issue discount of ten percent (10%). The second and third Convertible Notes will be issued as described above under "Description of the Agreement". The Convertible Notes accrue interest at the rate of 8% per annum, unless an event of default (as defined in the Convertible Notes) occurs, at which time the Convertible Notes in excess of $500,000 would accrue interest at 20% per annum. The Convertible Notes will mature on the first anniversary of issuance. The Convertible Notes are convertible into shares (the "Conversion Shares") of the Company's Common Stock at any time after NYSE American approval of the Supplemental Listing Application (the "SLAP") at a conversion price (the "Conversion Price") equal to the greater of (i) $1.00 (the "Floor Price"), which Floor Price shall not be adjusted for stock dividends, stock splits, stock combinations and other similar transactions and (ii) 80% of the lowest VWAP (as defined in the Convertible Notes) of the Common Stock during the ten (10) trading days immediately prior to the date of conversion into shares of Common Stock, but not greater than $10.00 per share.