Document:

scvl-ex41_6.htm

Exhibit 4.1

EXECUTION VERSION

FOURTH AMENDMENT TO CREDIT AGREEMENT

THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this “Agreement”) is made and entered into as of July 20, 2020, by and among SHOE CARNIVAL, INC., an Indiana corporation (the “Borrower”), the Banks (as defined herein) party hereto, and WELLS FARGO BANK, N.A., a national banking association, as successor-by-merger to Wachovia Bank, National Association (together with its successors and assigns, the “Agent”), as Agent on behalf of itself and the Banks. 

W I T N E S S E T H :

WHEREAS, Borrower, the financial institutions from time to time party thereto (the “Banks”), and Agent have executed and delivered that certain Credit Agreement dated as of January 20, 2010, as amended by that certain First Amendment to Credit Agreement dated as of April 10, 2013, as further amended by that certain Second Amendment to Credit Agreement dated as of March 27, 2017, as further amended by that certain Third Amendment to Credit Agreement dated as of April 16, 2020 (and as the same may have been further amended, restated, supplemented, or otherwise modified from time to time before the date hereof, the “Credit Agreement”); and

WHEREAS, the Borrower has requested that the Agent and the Banks party hereto amend certain provisions of the Credit Agreement as set forth herein, and the Agent and the Banks party hereto have agreed to such amendments, subject to the terms and conditions hereof. 

NOW, THEREFORE, for and in consideration of the above premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties hereto, the parties hereto hereby covenant and agree as follows:

SECTION 1.  Definitions.  Unless otherwise specifically defined herein, each term used herein (and in the recitals above) which is defined in the Credit Agreement shall have the meaning assigned to such term in the Credit Agreement.  Each reference to “hereof,” “hereunder,” “herein,” and “hereby” and each other similar reference and each reference to “this Agreement” and each other similar reference contained in the Credit Agreement shall from and after the date hereof refer to the Credit Agreement as amended hereby.

SECTION 2.  Amendments to Credit Agreement.  

(a)  Section 1.1 of the Credit Agreement is amended to add the following new definition in appropriate alphabetical order:

“Fourth Amendment Effective Date” means July 20, 2020.

(b)  The definition of “LIBOR” in Section 1.1 of the Credit Agreement is amended so that it reads, in its entirety, as follows:

“LIBOR” shall mean the greater of (a) 0.75% per annum and (b) subject to the implementation of a Benchmark Replacement in accordance with Section 7.3, for any interest rate calculation with respect to a LIBOR Loan, the rate of interest per annum determined on the basis of the rate for deposits in Dollars for 

 

 

a period equal to the applicable Interest Period as published by the ICE Benchmark Administration Limited, a United Kingdom company, or a comparable or successor quoting service approved by the Agent, at approximately 11:00 a.m. (London time) two Eurocurrency Business Days prior to the first day of the applicable Interest Period.  If, for any reason, the rate referred to in the foregoing clause (b) is not so published then “LIBOR” shall be determined by the Agent to be the arithmetic average of the rate per annum at which deposits in Dollars would be offered by first class banks in the London interbank market to the Agent at approximately 11:00 a.m. (London time) two Eurocurrency Business Days prior to the first day of the applicable Interest Period for a period equal to such Interest Period.  Each determination of LIBOR shall be made by the Agent and shall be conclusive in the absence of manifest error.  Notwithstanding the foregoing, (x) in no event shall LIBOR (including any Benchmark Replacement with respect thereto), as calculated under the foregoing clause (b), be less than zero and (y) unless otherwise specified in any amendment to this Agreement entered into in accordance with Section 7.3, in the event that a Benchmark Replacement with respect to LIBOR is implemented then all references herein to LIBOR shall be deemed references to such Benchmark Replacement (but subject to the minimum rate of interest established in the foregoing clause (a)).   

(c)  Section 4.1(l) of the Credit Agreement is amended so that it reads, in its entirety, as follows:

 (l)Other Loans and Guarantees.  Schedule 4.1(l) attached hereto lists all outstanding Funded Debt of Borrower and the Subsidiaries as of the Fourth Amendment Effective Date and after giving effect to the transactions contemplated herein.  There exists no default under the provisions of any instrument evidencing or securing Debt of Borrower or any Subsidiary or of any agreement otherwise relating thereto which has had or could reasonably be expected to result in a Material Adverse Effect.  Except (i) the Obligations and (ii) as disclosed on Schedule 4.1(l), neither Borrower nor any Subsidiary is a party to any loan transaction or Guarantee (other than the Subsidiary Guaranty Agreement) nor has any other existing Funded Debt.

(d)  Section 5.1(a)(iv) of the Credit Agreement is amended so that it reads, in its entirety, as follows:

(iv)As soon as available and in any event within 15 days after (A) the end of each of the fiscal months ending on or about May 31, 2020, through and including the last fiscal month of Borrower’s fiscal year ending on or about January 31, 2021, and (B) at all other times, the end of each fiscal month as to which there are Revolving Loans outstanding at the end of such fiscal month, a Borrowing Base Certificate, dated as of the end of such fiscal month, in the form of Exhibit E attached hereto (each a “Borrowing Base Certificate”), all certified (subject to normal year-end adjustments) as to fairness of presentation, generally accepted accounting principles, and consistency by the president, chief financial officer, or principal accounting officer of Borrower;

(e)  The first sentence of Section 5.1(e)(ii) of the Credit Agreement is amended so that it reads, in its entirety, as follows:

Have a ratio of (A) the sum of (1) Funded Debt plus (2) three times Borrower’s Rental Expense (as defined below), to (B) the sum of (1) EBITDA (as defined below) plus (2) Borrower’s Rental Expense of not more than 3.0 to 1.0 at each 

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fiscal quarter-end during the Term hereof (other than at the fiscal quarter ends occurring on or about July 31, 2020, October 31, 2020, and January 31, 2021).

(f)  Section 5.1(e)(iv) of the Credit Agreement is amended so that it reads, in its entirety, as follows:

(iv)Deliver a certificate of the chief financial officer or principal accounting officer of Borrower, containing the financial ratio calculations described in clauses 5.1(e)(i) and (ii) above (regardless of whether such calculations are being tested for covenant purposes under clause 5.1(e)(ii)) and of the Distributions paid under Section 5.2(e), simultaneously with the Compliance Certificate referred to in Section 5.1(a)(iii).

(g)  Schedule 4.1(l) to the Credit Agreement is amended so that it reads, in its entirety, in the form attached hereto as Schedule 4.1(l).

SECTION 3.  Conditions Precedent.  This Agreement shall become effective only upon satisfaction of the following conditions precedent:

(a)execution and delivery of this Agreement by Borrower, Agent, and each of the Banks; 

(b)execution and delivery of the Consent, Reaffirmation, and Agreement of the Guarantors at the end hereof by each of the Guarantors; 

(c)execution and delivery of the Florida Out-of-State Affidavit in the form of Exhibit A, attached hereto and made a part hereof, by the Borrower; 

(d)there shall not have occurred a material adverse change since February 1, 2020, in the business, assets, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of Borrower and its Subsidiaries taken as a whole or in the facts and information regarding such entities as represented to date; provided, that the impacts of the COVID-19 pandemic on the business operations or financial condition of the Borrower or any of its Subsidiaries that were disclosed by Borrower to the Agent in writing before the Third Amendment Effective Date shall not be given effect in determining whether the conditions precedent set forth in this clause (d) has been satisfied;

(e)there shall not have occurred any action, suit, investigation, or proceeding pending or threatened in any court or before any arbitrator or governmental authority that purports to materially and adversely affect (i) Borrower or any of its Subsidiaries, taken as a whole, (ii) any transaction contemplated hereby, or (iii) the ability of Borrower or any of its Subsidiaries or any other Obligor under any Guarantee to perform its respective obligations under the Loan Documents (as amended hereby); and

(f)Borrower shall have paid (or the Agent shall be satisfied with the arrangements made for the payment of) (i) an upfront fee to each of the Banks in an amount equal to 0.05% of each such Bank’s Commitment on the date hereof (and after giving effect hereto) and (ii) all other costs, fees, and expense owed by Borrower to the Banks and Agent as of the date hereof (with the 

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Borrower hereby authorizing the Agent to debit its applicable deposit account maintained with the Agent and to apply the proceeds thereof to the payment of the foregoing items). 

SECTION 4.  Miscellaneous Terms.

(a)  Effect of Agreement.  Except as set forth expressly hereinabove, all terms of the Credit Agreement and the other Loan Documents shall be and remain in full force and effect, and shall constitute the legal, valid, binding, and enforceable obligations of Borrower.  Except to the extent otherwise expressly set forth herein, the amendments set forth herein shall have prospective application only from and after the date of this Agreement.

(b)  No Novation or Mutual Departure.  Borrower expressly acknowledges and agrees that (i) there has not been, and this Agreement does not constitute or establish, a novation with respect to the Credit Agreement or any of the other Loan Documents, or a mutual departure from the strict terms, provisions, and conditions thereof, other than with respect to the amendments contained in Section 2 above; (ii) nothing in this Agreement shall affect or limit Agent’s and Banks’ right to demand payment of liabilities owing from Borrower to Agent and Banks under, or to demand strict performance of, the terms, provisions, and conditions of the Credit Agreement and the other Loan Documents, to exercise any and all rights, powers, and remedies under the Credit Agreement or the other Loan Documents or at law or in equity, or to do any and all of the foregoing, immediately at any time after the occurrence and continuance of a Default or an Event of Default under the Credit Agreement or the other Loan Documents; and (iii) the amendments in Section 2 above shall not apply to any other past, present, or future noncompliance with any provision of the Credit Agreement or any of the other Loan Documents and do not constitute any course of dealing between Agent, Banks, and Borrower.

(c)  Ratification.  Borrower (i) hereby restates, ratifies, and reaffirms each and every term, covenant, and condition set forth in the Credit Agreement and the other Loan Documents to which it is a party effective as of the date hereof and (ii) restates and renews each and every representation and warranty heretofore made by it in the Credit Agreement and the other Loan Documents as fully as if made on the date hereof and with specific reference to this Agreement and any other Loan Documents executed or delivered in connection herewith (except with respect to representations and warranties made as of an expressed date, in which case such representations and warranties shall be true and correct as of such date).

(d)  No Default.  To induce Agent and the Banks a party hereto to enter into this Agreement and to continue to make advances pursuant to the Credit Agreement (subject to the terms and conditions hereof and thereof), Borrower hereby acknowledges and agrees that, as of the date hereof, and after giving effect to the terms hereof, there exists (i) no Default or Event of Default and (ii) no right of offset, defense, counterclaim, claim, or objection in favor of Borrower or arising out of or with respect to any of the Loans or other obligations of Borrower owed to the Agent and the Banks under the Credit Agreement or any other Loan Document.

(e)  Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument.  This Agreement may be executed by each party on separate copies, 

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which copies, when combined so as to include the signatures of all parties, shall constitute a single counterpart of the Agreement.

(f)  Fax or Other Transmission.  Delivery by one or more parties hereto of an executed counterpart of this Agreement via facsimile, telecopy, or other electronic method of transmission pursuant to which the signature of such party can be seen (including, without limitation, Adobe Corporation’s Portable Document Format) shall have the same force and effect as the delivery of an original executed counterpart of this Agreement.  Any party delivering an executed counterpart of this Agreement by facsimile or other electronic method of transmission shall also deliver an original executed counterpart, but the failure to do so shall not affect the validity, enforceability, or binding effect of this Agreement.

(g)  Section References.  Section titles and references used in this Agreement shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreements among the parties hereto evidenced hereby.

(h)  Further Assurances.  Borrower agrees to take, at Borrower’s expense, such further actions as Agent shall reasonably request from time to time to evidence the amendments set forth herein and the transactions contemplated hereby.

(i)  Severability.  Any provision of this Agreement which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction.

(j)  Governing Law.  This Agreement shall be governed by and construed and interpreted in accordance with the internal laws of the State of New York but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of New York.

[Continued on following page.]

 

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IN WITNESS WHEREOF, each of the Borrower, the Agent, and the Banks a party hereto has caused this Agreement to be duly executed by its duly authorized officer as of the day and year first above written.

	
 
	
BORROWER:

	
 
	
 
	
 

	
 
	
SHOE CARNIVAL, INC.,
an Indiana corporation

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
By:
	
/s/ W. Kerry Jackson

	
 
	
Name:
	
W. Kerry Jackson

	
 
	
Title:
	
Senior Executive Vice President, Chief Financial and Administrative Officer and Treasurer

 

 

  

 

 

	
 
	
AGENT AND BANKS:

	
 
	
 

	
 
	
WELLS FARGO BANK, N.A., as successor-by- merger to Wachovia Bank, National Association, as Agent and a Bank

	
 
	
 

	
 
	
By:
	
/s/ Andrew T. Cavallari

	
 
	
Name:
	
Andrew T. Cavallari 

	
 
	
Title:
	
Vice President

 

 

 

 

 

 

	
 
	
FIFTH THIRD BANK, as a Bank

	
 
	
 

	
 
	
By:
	
/s/ Kelvin Canaday

	
 
	
Name:
	
Kelvin Canaday 

	
 
	
Title:
	
Assistant Vice President

	
 
	
 
	
 

 

 

 

 

 

CONSENT, REAFFIRMATION, AND AGREEMENT OF GUARANTORS

 

Each of the undersigned (i) acknowledges receipt of the foregoing Fourth Amendment to Credit Agreement (the “Agreement”), (ii) consents to the execution and delivery of the Agreement by the parties thereto, and (iii) reaffirms all of its respective obligations and covenants under that certain Subsidiary Guaranty dated as of January 20, 2010 (as amended, restated, supplemented, or otherwise modified from time to time) and, in each case, agrees that none of its respective obligations and covenants thereunder shall be reduced or limited by the execution and delivery of the Agreement.

This Consent, Reaffirmation, and Agreement of Guarantors (this “Consent”) may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument.  This Consent may be executed by each party on separate copies, which copies, when combined so as to include the signatures of all parties, shall constitute a single counterpart of the Consent. 

 

Dated:  July 20, 2020.

 

	
 
	
SCLC, INC., a Delaware corporation

	
 
	
 

	
 
	
 

	
 
	
By:
	
/s/ Darryl E. Smith

	
 
	
 

	
 
	
Name:
	
Darryl E. Smith

	
 
	
 

	
 
	
Title:
	
Treasurer and Secretary

	
 
	
 

	
 
	
 

	
 
	
SCHC, INC., a Delaware corporation

	
 
	
 

	
 
	
 

	
 
	
By:
	
/s/ Pamela A. Jasinski

	
 
	
 

	
 
	
Name:
	
Pamela A. Janinski

	
 
	
 

	
 
	
Title:  
	
Secretary and Assistant Treasurer

 

 

 

 

 

 

Exhibit A

 

FORM OF Florida Out-of-State Affidavit of BORROWER

[See attached.]

 

 

 

FLORIDA OUT-OF-STATE AFFIDAVIT OF BORROWER

STATE OF INDIANA

COUNTY OF VANDERBURGH

 

I, W. Kerry Jackson, after being duly sworn, depose and say:

 

(1)I am the Senior Executive Vice President, Chief Financial and Administrative Officer and Treasurer of Shoe Carnival, Inc., an Indiana corporation (the “Borrower”).

(2)On the date hereof, I, on behalf of the Borrower and with full authorization, executed that certain Fourth Amendment to Credit Agreement (the “Amendment”) to be dated on or about the date hereof, by and among the Borrower, the other Loan Parties party thereto, the financial institutions party thereto, and Wells Fargo Bank, N.A., as successor-by-merger to Wachovia Bank, National Association (together with its successors and assigns, the “Agent”), in Evansville, Indiana.  

(3)On the date hereof, I, on behalf of Borrower, caused the Amendment to be delivered to Bethani Oppenheimer, Esq., via overnight courier (to Greenberg Traurig, LLP, 3333 Piedmont Road, NE, Suite 2500, Atlanta, GA  30305, Attn:  Bethani Oppenheimer), in Atlanta, Georgia.

(4)This Affidavit is made for the benefit of Agent for compliance with the laws of the State of Florida relating to documentary stamp taxes.

 

[CONTINUED ON FOLLOWING PAGE]

1.

 

 

 

		
	
FURTHER AFFIANT SAYETH NOT:
	
 

	
Signature of Borrower:

 

shoe Carnival, Inc. 

 
	
Dated as of July __, 2020

	

By:  _______________________________

Name:  W. Kerry Jackson 

Title:    Senior Executive Vice President, 
             Chief Financial and Administrative
             Officer and Treasurer

 
	
 

	
 
	
 

The foregoing affidavit was sworn to before me by W. Kerry Jackson this __ day of July, 2020, in Evansville, Indiana.

 

	
 
	
 

	
 
	
 Notary Public, State of Indiana

	
 
	
 

	
 
	
 

	
 
	
Print Name

	
 
	
 

	
 
	
My commission expires:
	
 

	
 
	
 
	
 

	
 
	
My county of residence:
	
 

 

[NOTARY SEAL]

 

 

 

Schedule 4.1(l)

 

Loans and Guarantees

 

Outstanding Funded Debt of Borrower and the Subsidiaries as of the Fourth Amendment Effective Date:

 

	
 
	
1.
	
Standby letter of credit in the amount of $1,100,000 with Sentry Insurance a Mutual Company as beneficiary

	
 
	
2.
	
Standby letter of credit in the amount of $50,000 with Hartford Fire Insurance Company as beneficiaryExhibit
10.1

 

SEPARATION
AGREEMENT AND RELEASE

 

This
Separation Agreement and Release (“Agreement”) is made as of May 22, 2020, by and between Wais Asefi (“Employee”)
and Resonate Blends, Inc., a Nevada corporation (the “Company”). Employee and the Company shall collectively
be referred to herein as the “Parties”, and each individually as a “Party.”

 

RECITALS

 

WHEREAS,
Employee was employed by the Company, among other positions, as its Chairman, President, Chief Executive Officer and Director;

 

WHEREAS,
Employee and the Company and its wholly-owned subsidiary executed an Employment Agreement dated on or about December 17, 2013
(the “Employment Agreement”);

 

WHEREAS,
Employee ceased to be an employee and officer of the Company, effective on or before January 20, 2020 (the “Separation Date”);

 

WHEREAS,
simultaneously with execution and delivery hereof, the Company, Employee and a number of other entities are entering into the
Stock Purchase Agreement, dated as of the date hereof (the “SPA”), pursuant to which the Company intends to
transfer to Employee and such other entities all of the outstanding securities in Textmunication, Inc., a California corporation,
in exchange for certain securities of the Company held thereby; and

 

WHEREAS,
the Parties wish to resolve any and all disputes, claims, complaints, grievances, charges, actions, petitions, and demands that
the Employee may have against the Company and any of the Releasees (as defined below), including, but not limited to, any and
all claims arising out of or in any way related to the Employment Agreement and Employee’s employment with or separation
from the Company.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the mutual promises made herein, the Company and Employee hereby agree as follows:

 

1.
Departure. Employee hereby acknowledges and agrees that he ceased to be (a) an employee of Company, (b) an officer of Company
and (c) a director of the Company, in each case, effective as of the Separation Date.

 

2.
Termination of Employment Agreement and Return and Transfer of Shares.

 

(a)
The Parties acknowledge and agree that upon receipt of the fully executed counterparts of this Agreement and receipt by Employee
of the Indebtedness Payment (described below), the obligations under the Employment Agreement shall terminate and be of no further
force or effect.

 

    	 		 

     

    

 

(b)
Employee agrees to return his 4,000,000 shares of Series A Preferred Stock to the Company for cancellation and to transfer 2,000,000
shares of Series C Preferred Stock in the Company to Geoffrey Selzer (collectively, the “Shares”) upon the execution
of this Agreement. To accomplish this, effective upon execution of this Agreement, Employee hereby irrevocably appoints Mr. David
Thielen as his representative and attorney-in-fact with full power and authority to act on Employee’s behalf to accomplish
the cancellation and transfer of the Shares on the books and records of the Company.

 

3.
Payment. In full satisfaction of all amounts due Employee and for the cancellation and transfer of the Shares, the Company
agrees to pay Employee the total sum of $200,000 (“Indebtedness Payment”) from monies raised by the Company following
execution of the Agreement as follows:

 

	 	●	$12,500
    when the initial $250,000 is raised by the Company;
	 	●	$12,500
    when a total of $500,000 is raised by the Company;
	 	●	$10,000
    when a total of $750,000 is raised by the Company;
	 	●	$35,000
    when a total of $1,750,000 is raised by the Company;
	 	●	$35,000
    when a total of $2,750,000 is raised by the Company;
	 	●	$35,000
    when a total of $3,750,000 is raised by the Company;
	 	●	$35,000
    when a total of $4,750,000 is raised by the Company; and
	 	●	$25,000
    when a total of $5,750,000 is raised by the Company;

 

The
payments are not tied to any specific date; rather, the aforementioned payments will be made from proceeds from the Company’s
future fundraising efforts, if and when raised, based on the schedule above.

 

4.
Payment of Salary and Receipt of All Benefits. Except for the Indebtedness Payment, Employee acknowledges and represents
that the Company has paid or provided all salary, wages, bonuses, accrued vacation/paid time off, premiums, leaves, housing allowances,
relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses, commissions, stock, stock options, vesting,
and any and all other benefits and compensation due to Employee through the Separation Date.

 

5.
Release of Claims. Employee agrees that the Indebtedness Payment represents settlement in full of all outstanding obligations
owed to Employee by the Company and its current and former officers, directors, employees, agents, investors, attorneys, shareholders,
administrators, affiliates, benefit plans, plan administrators, insurers, trustees, divisions, and subsidiaries, and predecessor
and successor corporations and assigns (collectively, the “Releasees”), other than those obligations of the Company
under the SPA and the agreements executed pursuant thereto, and in connection therewith (the “Excluded Obligations”).
Except for the Excluded Obligations, Employee, on his own behalf and on behalf of his respective heirs, family members, executors,
agents, and assigns, hereby and forever voluntarily releases the Releasees from, and agrees not to sue concerning, or in any manner
to institute, prosecute, or pursue, any claim, complaint, charge, duty, obligation, demand, or cause of action relating to any
matters of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may possess against any of the
Releasees arising from any omissions, acts, facts, or damages that have occurred up until and including the Effective Date of
this Agreement, including, without limitation:

 

    	 		 

     

    

 

(a)
any and all claims relating to:

 

	 	(i)	ownership
    of the Shares or other Company securities held by Employee;
	 	(ii)	fiduciary
    duties of Releasees; or
	 	(iii)	breach
    of any agreement by or between/among Releasees and Employee other than this Agreement and the Excluded Obligations

 

(b)
any and all claims relating to or arising from Employee’s employment relationship with the Company and the termination of
that relationship;

 

(c)
any and all claims relating to, or arising from, Employee’s right to purchase, or actual purchase or sale of the Shares
and of shares of stock of the Company, including, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of
duty under applicable state corporate law, and securities fraud under any state or federal law;

 

(d)
any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; harassment;
retaliation; breach of contract, both express and implied; breach of covenant of good faith and fair dealing, both express and
implied; promissory estoppel; negligent or intentional infliction of emotional distress; fraud; negligent or intentional misrepresentation;
negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation;
libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; conversion; and disability
benefits;

 

(e)
any and all claims for violation of any federal, state, or municipal statute, including, but not limited to, Title VII of the
Civil Rights Act of 1964; the Civil Rights Act of 1991; the Rehabilitation Act of 1973; the Americans with Disabilities Act of
1990; the Equal Pay Act; the Fair Labor Standards Act; the Fair Credit Reporting Act; the Age Discrimination in Employment Act
of 1967; the Older Workers Benefit Protection Act; the Employee Retirement Income Security Act of 1974; the Worker Adjustment
and Retraining Notification Act; the Family and Medical Leave Act; the Sarbanes-Oxley Act of 2002; the Immigration Control and
Reform Act;

 

(f)
any and all claims for violation of the federal or any state constitution;

 

(g)
any and all claims arising out of any other laws and regulations relating to employment or employment discrimination;

 

(h)
any claim for any loss, cost, damage, or expense arising out of any dispute over the nonwithholding or other tax treatment of
any of the proceeds received by Employee as a result of this Agreement or other compensation received by Employee;

 

(i)
any and all claims airing under the Employment Agreement and/or its termination; and

 

(j)
any and all claims for attorneys’ fees and costs.

 

    	 		 

     

    

 

Employee
acknowledges and agrees that the facts in respect to which this release is given may turn out to be other than or different than
expected, and expressly, knowingly and voluntarily waives any and all benefits and rights granted pursuant to Section 1542 of
the Civil Code of the State of California with which section it is familiar and which section reads as follows:

 

“A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

 

Employee
agrees that the release set forth in this section shall be and remain in effect in all respects as a complete general release
as to the matters released. However, this release does not extend to any obligations incurred under this Agreement or the Excluded
Obligations. This release does not release claims that cannot be released as a matter of law, including, but not limited to, Employee’s
right to file a charge with or participate in a charge by the Equal Employment Opportunity Commission, or any other local, state,
or federal administrative body or government agency that is authorized to enforce or administer laws related to employment, against
the Company (with the understanding that any such filing or participation does not give Employee the right to recover any monetary
damages against the Company; Employee’s release of claims herein bars Employee from recovering such monetary relief from
the Company). Employee represents that he has made no assignment or transfer of any right, claim, complaint, charge, duty, obligation,
demand, cause of action, or other matter waived or released by this Section.

 

6.
Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges that he is waiving and releasing any rights he may
have under the Age Discrimination in Employment Act of 1967 (“ADEA”), and that this waiver and release is knowing
and voluntary. Employee acknowledges that the consideration given for this waiver and release is in addition to anything of value
to which Employee was already entitled. Employee further acknowledges that he has been advised by this writing that: (a) he should
consult with an attorney prior to executing this Agreement; (b) he has twenty-one (21) days within which to consider this
Agreement; (c) he has seven (7) days following his execution of this Agreement to revoke this Agreement; (d) this Agreement shall
not be effective until after the revocation period has expired; and (e) nothing in this Agreement prevents or precludes Employee
from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any
condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law. In the event Employee signs
this Agreement and returns it to the Company in less than the 21-day period identified above, Employee hereby acknowledges that
he has freely and voluntarily chosen to waive the time period allotted for considering this Agreement.

 

7.
Employee’s Acknowledgment of Tax Liability. Employee hereby acknowledges and agrees as follows: (a) nothing in this
Agreement constitutes tax advice; (b) the Company does not take any responsibility, or have any liability to Employee with respect
to Employee’s tax liability and/or Employee’s personal tax reporting; (c) Employee has been given the opportunity
and encouraged to consult with Employee’s own attorney and to seek professional tax advice prior to execution of this Agreement;
and (d) Employee agrees to indemnify the Company and hold it harmless from any liability for his taxes, interest or penalties
that may be imposed as a result of under-payment or non-payment of income taxes on any amounts paid Employee under the terms of
this Agreement.

 

    	 		 

     

    

 

8.
No Pending or Future Lawsuits. Employee represents that he has no lawsuits, claims, or actions pending in his name, or
on behalf of any other person or entity, against the Company or any of the other Releasees. Employee also represents that he does
not, at the date hereof, intend to bring any claims on his own behalf or on behalf of any other person or entity against the Company
or any of the other Releasees.

 

9.
Non-Disparagement. Each Party shall at all times refrain from taking actions or making statements, written or oral, that
denigrate, disparage, or defame the goodwill or reputation of the other Party. Employee further agrees not to make any negative
statement to third parties or Company employees relating to the Employee’s employment or any aspect of the business of the
Company and not to make any statements to third parties or Company employees about the circumstances of the termination of Employee’s
employment, or about Releasees, except as may be required by a court or governmental authorities. Employee shall direct any inquiries
by potential future employers to the Company’s human resources department.

 

10.
No Admission of Liability. Employee understands and acknowledges that this Agreement constitutes a compromise and settlement
of any and all actual or potential disputed claims by Employee. No action taken by the Company hereto, either previously or in
connection with this Agreement, shall be deemed or construed to be (a) an admission of the truth or falsity of any actual or potential
claims or (b) an acknowledgment or admission by the Company of any fault or liability whatsoever to Employee or to any third party.

 

11.
Costs. The Parties shall each bear their own costs, attorneys’ fees, and other fees incurred in connection with the
preparation of this Agreement.

 

12.
Authority. The Company represents and warrants that the undersigned has the authority to act on behalf of the Company and
to bind the Company and all who may claim through it to the terms and conditions of this Agreement. Employee represents and warrants
that he has the capacity to act on his own behalf and on behalf of all who might claim through him to bind them to the terms and
conditions of this Agreement. Each Party warrants and represents that there are no liens or claims of lien or assignments in law
or equity or otherwise of or against any of the claims or causes of action released herein.

 

13.
No Representations. Employee represents that he has had an opportunity to consult with an attorney, and has carefully read
and understands the scope and effect of the provisions of this Agreement. Employee has not relied upon any representations or
statements made by the Company that are not specifically set forth in this Agreement.

 

14.
Severability. In the event that any provision or any portion of any provision hereof or any surviving agreement made a
part hereof becomes or is declared by a court of competent jurisdiction or arbitrator to be illegal, unenforceable, or void, this
Agreement shall continue in full force and effect without said provision or portion of provision.

 

    	 		 

     

    

 

15.
Attorneys’ Fees. Except with regard to a legal action challenging or seeking a determination in good faith of the
validity of the waiver herein under the ADEA, in the event that either Party brings an action to enforce or effect its rights
under this Agreement, the prevailing Party shall be entitled to recover its costs and expenses, including the costs of mediation,
arbitration, litigation, court fees, and reasonable attorneys’ fees incurred in connection with such an action.

 

16.
Entire Agreement. This Agreement represents the entire agreement and understanding between the Company and Employee concerning
the subject matter of this Agreement and Employee’s employment with and separation from the Company and the events leading
thereto and associated therewith, and supersedes and replaces any and all prior agreements and understandings concerning the subject
matter of this Agreement and Employee’s relationship with the Company.

 

17.
No Oral Modification. This Agreement may only be amended in a writing signed by Employee and the Company’s Chief
Executive Officer.

 

18.
Governing Law. This Agreement shall be governed by the laws of the State of Nevada, without regard for choice-of-law provisions.
Employee consents to personal and exclusive jurisdiction and venue in the State of Nevada.

 

19.
Effective Date. Employee understands that: a) this Agreement shall be null and void if not executed by him within twenty
one (21) days; and b) Employee may revoke this agreement within seven days following his execution of it. This Agreement will
become effective on the eighth (8th) day after Employee signs this Agreement, so long as it has been signed by the Parties and
has not been revoked by either Party before that date (the “Effective Date”). If Employee declines to sign
this agreement or revokes it within 7 days of his execution, this Agreement shall be null and void, and Employee shall return
the Indebtedness Payment to the Company if and to the extent paid to Employee prior to such date.

 

20.
Counterparts. This Agreement may be executed in counterparts and by facsimile, and each counterpart and facsimile shall
have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the
undersigned.

 

21.
Breach by Employee. Employee specifically agrees that the Company’s payments to Employee under this Agreement are
made in return for Employee’s obligations set forth in this Agreement.

 

22.
Voluntary Execution of Agreement. Employee understands and agrees that he executed this Agreement voluntarily, without
any duress or undue influence on the part or behalf of the Company or any third party, with the full intent of releasing all of
his/her claims against the Company and any of the other Releasees, except as otherwise provided herein. Employee acknowledges
that: (a) he has read this Agreement; (b) he has been represented in the preparation, negotiation, and execution of this Agreement
by legal counsel of his/her own choice or has elected not to retain legal counsel; (c) he understands the terms and consequences
of this Agreement and of the releases it contains; and (d) he is fully aware of the legal and binding effect of this Agreement.

 

    	 		 

     

    

 

IN
WITNESS WHEREOF, the Parties have executed this Agreement on the date first set forth above.

 

RESONATE
BLENDS, INC.

 

	 	 	 
	By:
    	Geoffrey
    Selzer	 
	Its:	Chief Executive Officer	 

 

	 	 
	Wais
    Asefi

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