Document:

SusGlobal Energy Corp.: Exhibit 4.1 - Filed by newsfilecorp.com

    

    Exhibit 4.1

    September 15, 2022

    SusGlobal Energy Corp. 
200 Davenport Road 
Toronto, Ontario M5R 1J2 
Attn: Marc Hazout

    E-mail:

    VIA ELECTRONIC MAIL

    Re: Amendments to OID Convertible Promissory Notes

    Dear Marc:

    Reference is made to (i) those certain Securities Purchase Agreements, dated as of March 3, 2022 and March 7, 2022 (the "March Purchase Agreements"), among SusGlobal Energy Corp. (the "Company"), and Target Capital 2 LLC ("Target") and Cypress Bridge Capital LLC ("Cypress," together with Target, the "Purchasers"; and, collectively with the Company, the "Parties"), (ii) the two separate Notes (as respectively defined in the March Purchase Agreements referred to herein as the "March 3 Target Note"  and the "March 7 Cypress Note") of the Company issued in favor of each Purchaser (the "March Purchaser Notes"), (iii) that certain Securities Purchase Agreement, dated as of October 29, 2021 (the "October Purchase Agreement," and collectively with the March Purchase Agreements, the "Purchase Agreements"), between the Company and Target, and (iv) the Note (as defined in the October Purchase Agreement) of the Company issued in favor of Target (the "October Target Note," collectively with the March Purchaser Notes, the "Purchaser Notes").  Defined terms used herein but not defined herein shall have the meanings ascribed to such terms in the Purchase Agreements or Purchaser Notes, as applicable.

    For good and valuable consideration, the Parties hereby agree ("Agreement") as follows.

    1. Amendments of Purchaser Notes.  The Purchaser Notes are hereby amended as follows:

    a) Increase in Principal Amount of Purchaser Notes. The outstanding principal amount of each Purchaser Note shall be automatically increased by ten (10%) percent. For avoidance of doubt, the principal amount of the: (i) October Target Note shall be $1,618,100; (ii) March 3 Target Note shall be $1,320,000; and (iii) March 7 Cypress Note shall be $1,320,000. For every day that the DTC chill continues past September 19, 2022, the principal amount of each Purchaser Note will increase by 0.1%, so for example, if the DTC chill is removed on September 20, 2022, the principal amount of the October Target Note shall increase by $1,618.10 so the new principal amount will become $1,619,718.10, the principal amount of each of the March 3 Target Note and the March 7 Cypress Note will increase by $1,320.00 so the new principal amount will become $1,321,320.00. If the DTC chill is removed on September 21, 2022, the principal amount of the October Target Note shall increase by $1,619.72 so the new principal amount will become $1,621,337.82 and the principal amount of each of the March 3 Target Note; and the March 7 Cypress Note will increase by $1,321.32 so the new principal amount will become $1,322,641.32, etcetera.

    b) Extension of Maturity Date.    The Maturity Date for each Purchaser Note shall be hereby extended to November 15, 2022. No allonge shall be required for any Purchaser Note to reflect the new Maturity Date.

    c) Further Extension of the Maturity Date.  If: (i) no Event of Default has occurred and is continuing on or prior to the Maturity Date, (ii) there have been, in the sole judgment of the Purchasers, no material issues or problems with the conversion of the Purchaser Notes, and (iii) the Purchaser Notes have not been fully converted or fully repaid as of such date, the Maturity Date for each Purchaser Note shall automatically be extended to January 15, 2023 on the terms as set forth in the Purchaser Notes, including the terms hereof, without additional payment or premium due from the Company. The automatic extension shall take effect provided that the Purchasers have not notified the Company in writing prior to the Maturity Date that the automatic extension of the Maturity Date has been cancelled.

    

    d) The Company may repay, in full or in part, the outstanding principal balance, all accrued interest and any fees, expenses or other amounts due and owing on any of the October Target Note, March 3 Target Note and/or the March 7 Cypress Note at any time, and from time to time, prior to the Maturity Date. Except for the October Target Note which shall be repaid only with a prepayment penalty of 120% of the then outstanding principal balance, the other two notes may be prepaid prior to the Maturity Date without penalty or premium.

    e) If at any time and for any reason, as determined in the sole discretion of the Purchasers,  the Purchaser is not able to facilitate the conversion and sell-through of the conversion shares in a timely fashion (for example, due to another DTC chill, the Company not being current on its quarterly and annual filings, the Company refuses to provide the required or necessary legal opinion, or the Transfer Agent refuses to transfer the conversion shares in a timely manner, or other reason) such event or occurrence shall be considered to be an "event of default" under each of the October Target Note, the March 3 Target Note and the March 7 Cypress Note, and each such note shall thereupon be immediately in default and will incur all the default provisions outlined in the applicable loan documents. Notwithstanding the above, no event of default shall have occurred if the Company cures such default as follows: (i) if the Company has not timely filed its quarterly or annual reports with the Securities and Exchange Commission or other regulatory authority, the Company shall have six (6) Trading Days to cure such late filing but only after the timely filing of a Form 12b-25; and (ii) if the Company is unable to process a conversion transaction within the Trading Deadline, the Company shall have 24 hours to cure such default. Nothing herein shall require the Purchasers to give the Company the notice of any event of default. The Company must document the timely cure of any event of default to the Purchasers' satisfaction.

    f) Except as provided herein, the terms and provisions of the March Purchase Agreements and the October Purchase Agreement, the promissory notes and all other documents related thereto, shall remain unchanged and shall remain in full force and effect. The said Purchase Agreements and the related promissory notes as modified and amended hereby are hereby ratified and confirmed in all respects.

    2. Company's Covenants. 

    a) The Company will remove the DTC chill by no later than September 19, 2022 and will permit Target to begin to submit conversion requests thereafter in accordance with the variable conversion rates previously agreed.

    b) The Company will use its best efforts to promptly facilitate the conversion of the Purchaser Notes and share deliveries from its Transfer Agent to a Purchasers' Broker Dealer, including obtaining legal opinions, at the Company's sole expense, for each conversion and providing necessary instructions to the Transfer Agent. Additionally, the Company will use its best efforts to ensure the transfer of all conversion shares within seventy-two (72) hours of the Company's receipt of any conversion notice ("Trading Deadline").  If the reason for the failure to process the transfer is due to the fault of the Company, the Company shall pay to the Purchaser in cash, as liquidated damages and not as a penalty, for each $1,000 of conversion shares being transferred, $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after the Trading Deadline) for each Trading Day after such Trading Deadline until such conversion shares are delivered or transferor rescinds such conversion. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as the Purchaser Notes remain outstanding and convertible.  Should the Company's Transfer Agent fail process two or more trades by the Trading Deadline, the Company will, within 10 Trading Days after the second failure, enter into an agreement with a transfer agent reasonably acceptable to Target. A "Trading Day" means a day on which the Common Stock of the Company is traded on a U.S. or Canadian national securities exchange, the OTCQB or OTCQX, or any successors to the foregoing. If any conversion has not been processed within five (5) Trading Days of the date of request, then the Purchasers may, at their sole option, either (i) rescind the conversion request; or (ii) call an "event of default" under that Purchase Agreement and seek all remedies provided by such agreement and by applicable law and equity.

    

    3. Purchasers' Covenants.

    a) Neither Purchaser shall (i) convert more than $100,000 of any or all of its Purchaser Notes in any one conversion notice, (ii) issue an additional conversion notice unless and until any previously issued conversion shares have been sold by such Purchaser, or (iii) exceed 10% of the daily trading volume in selling the Company's shares.

    b) The October Purchaser Note shall be the first Purchaser Note to be converted.  In the event that the October Purchaser Note is fully converted and the conversion shares sold, thereafter the March Purchaser Notes may both be converted at the Purchasers' discretion on a pari-passu basis; provided, however, that no conversion request shall exceed $50,000 for each Purchaser Note and each Purchaser shall not sell more than 5% of the daily trading volume in selling the Company's shares.

    c) If at any time while the Purchaser Notes remain outstanding an event of default has not occurred and is continuing on any of the Purchaser Notes and the Company has a definitive agreement with an investment bank to facilitate the uplist of its shares where there is no requirement by the investment bank or other person or entity for a full lock-up of the Purchaser Notes and/or the conversion shares, each Purchaser shall cooperate with the Company in good faith and shall take any and all commercially reasonable actions to facilitate the uplist, including, without limitation, temporarily ceasing any conversions of the Purchaser Notes and extending the Maturity Date of the  Purchaser Notes to the date of the closing of the uplist.

    4. No Material Non-Public Information. The Company hereby represents and warrants and covenants to the Purchaser that, upon the Company disclosing this amendment via the filing of a Current Report on Form 8-K with the Securities and Exchange Commission prior to 4 PM ET on September 21, 2022, the Company shall have disclosed all material, non-public information (if any) provided up to the date hereof to the Purchasers by the Company or any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents, that has not previously been publicly disclosed by the Company in a filing with the Securities and Exchange Commission. Thereafter, the Company agrees that the Purchasers shall not be in possession of any material non-public information. After the date of such filing, the Purchasers shall be free to trade in the securities of the Company.

    5. No Confidentiality. The Company hereby covenants and agrees that, as of the date hereof, (i) the Purchasers have no confidentiality or similar obligation under any agreement to the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents and (ii) the Purchasers have not made any agreement with the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agent not to purchase or sell, long and/or short, the Common Stock or any other securities of the Company.

    6. Default; Remedies. If the Company shall fail to keep or perform any of the covenants or agreements contained herein (subject to the applicable notice and cure periods) or if any statement, representation or warranty contained herein is false, misleading or erroneous in any material respect, the Company shall be deemed to be in default under the March Purchase Agreements, the October Purchase Agreement and the related promissory notes and the Purchasers shall be entitled at their option to exercise any and all of the rights and remedies granted pursuant to the said agreements and notes or to which the Purchasers may otherwise be entitled, whether at law or in equity.

    7. Representations and Warranties. The Company hereby represents and warrants that (a) the Company is duly organized and legally existing under the laws of the State of Delaware ; (b) the execution and delivery of, and performance under this Agreement are within the Company's power and authority without the joinder or consent of any other party and have been duly authorized by all requisite action and are not in contravention of law or the powers of the Company's respective organization documents; (c) this Agreement constitutes the legal, valid and binding obligations of the Company enforceable in accordance with its terms; (d) the execution and delivery of this Agreement by the Company do not contravene, result in a breach of or constitute a default under any deed of trust, loan agreement, indenture or other contract, agreement or undertaking to which the Company is a party or by which the Company or any of its properties may be bound (nor would such execution and delivery constitute such a default with the passage of time or the giving of notice or both) and do not violate or contravene any law, order, decree, rule or regulation to which the Company is subject; and (e) to the best of the Company's knowledge there exists no uncured default under any of the Purchase Agreements or promissory notes. The Company agrees to indemnify and hold Purchasers harmless against any loss, claim, damage, liability or expense (including without limitation reasonable attorneys' fees) incurred as a result of any representation or warranty made by it herein proving to be untrue in any respect.

    

    8. Entire Agreement. This Agreement supersedes and merges all prior and contemporaneous promises, representations and agreements. No modification of this Agreement or of the March Purchase Agreements, the October Purchase Agreement or the related promissory notes or any other document related thereto, or any waiver of rights under any of the foregoing, shall be effective unless made by supplemental agreement, in writing, executed by Purchasers and the Company. The Purchasers and the Company further agree that this Agreement may not in any way be explained or supplemented by a prior, existing or future course of dealings between the parties or by any prior, existing, or future performance between the parties pursuant to this Agreement or otherwise.

    9. Release of Purchasers. The Company hereby releases, remises, acquits and forever discharges the Purchasers, together with their respective managers, members, participants, employees, agents, representatives, consultants, attorneys, fiduciaries, servants, officers, directors, partners, predecessors, successors and assigns, (all of the foregoing hereinafter called the "Released Parties"), from any and all actions and causes of action, judgments, executions, suits, debts, claims, demands, liabilities, obligations, damages and expenses of any and every character, known or unknown, direct and/or indirect, at law or in equity, of whatsoever kind or nature, whether heretofore or hereafter accruing, for or because of any matter or things done, omitted or suffered to be done by any of the Released Parties prior to and including the date hereof, and in any way directly or indirectly arising out of or in any way connected to this Agreement or of the March Purchase Agreements, the October Purchase Agreement, the related promissory notes, or any of the transactions associated therewith, including specifically but not limited to claims of usury.

    10. Time of the Essence. It is expressly agreed by the parties hereto that time is of the essence with respect to this Agreement.

    11. Severability. If any covenant, condition, or provision herein contained is held to be invalid by final judgment of any court of competent jurisdiction, the invalidity of such covenant, condition, or provision shall not in any way affect any other covenant, condition or provision herein contained.

    12. Representation by Counsel. The parties acknowledge and confirm that each of their respective attorneys have participated jointly in the review and revision of this Agreement and that it has not been written solely by counsel for one party. The parties hereto therefore stipulate and agree that the rule of construction to the effect that any ambiguities are to or may be resolved against the drafting party shall not be employed in the interpretation of this Agreement to favor either party against the other.

    13. Successors and Assigns. The terms and provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors. This Agreement is not assignable by the Company.

    14. Breach. Any breach of this Agreement shall be an Event of Default under the  March Note Purchase Agreements and the October Note Purchase Agreement and the Investor shall have all rights under the said Note Purchase Agreements in such event.

    

    15. Costs and Expenses. Each party shall pay its own expenses with respect to the negotiation, preparation and execution of this Agreement.

    16. Miscellaneous. This letter agreement shall be governed by and construed and enforced in accordance with the internal laws of the state of Arizona, without regard to the principles of conflict of laws thereof. Any dispute arising under or relating to or in connection with this letter agreement shall be subject to the exclusive jurisdiction and venue of the State and/or Federal courts located in the Borough of Manhattan, City of New York, New York. This letter agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one and the same instrument.

    Very truly yours,

    Target Capital 2 LLC

     

    By: /s/ Dmitriy Shapiro                
Name: Dmitriy Shapiro

    Title: Managing Partner

    Cypress Bridge Capital LLC

    By: /s/ Name of CFO                    
Name: Name of CFO

    Title: CFO

    Acknowledged and Agreed:

    SusGlobal Energy Corp.

    By: /s/ Marc Hazout 
Name: Marc Hazout 
Title: President and CEOknwn_ex41.htm

 
 EXHIBIT 4.1
  
 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 SEPTEMBER 15, 2022, WHICH IS THE COMMENCEMENT OF SALES OF COMMON STOCK IN THE OFFERING, (THE “EFFECTIVE DATE”) TO ANYONE OTHER THAN (I) BOUSTEAD SECURITIES, LLC OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING FOR WHICH THIS PURCHASE WARRANT WAS ISSUED TO THE UNDERWRITER AS CONSIDERATION (THE “OFFERING”), OR (II) AN OFFICER, PARTNER, REGISTERED PERSON OR AFFILIATE OF BOUSTEAD SECURITIES, LLC.
  
 COMMON STOCK PURCHASE WARRANT
  
 For the Purchase of 289,800 Shares of Common Stock
 of
 Know Labs, Inc.
  
 1. Purchase Warrant. THIS CERTIFIES THAT, in consideration of funds duly paid by or on behalf of Boustead Securities, LLC (“Holder”), as registered owner of this Purchase Warrant, to Know Labs, Inc., a Nevada corporation (the “Company”), Holder is entitled, at any time or from time to time beginning Septemeber 20, 2022 (the “Commencement Date”), and at or before 5:00 p.m., Eastern time, September 15, 2027 (the “Expiration Date”), but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to 289,800 shares of common stock of the Company, par value $0.001 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 $2.40 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.
  
 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. Each exercise hereof shall be irrevocable.
  
 2.2 Cashless Exercise. 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, this Purchase Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
  
 (A) = the FMV of one share of Common Stock;
  
 (B) = the Exercise Price of this Purchase Warrant, as adjusted hereunder; and
  
 	 
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 (X) = the number of shares of Common Stock underlying the Purchase Warrant that would be issuable upon exercise of this Purchase Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.
  
 If Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Shares shall take on the registered characteristics of the Purchase Warrants being exercised. The Company agrees not to take any position contrary to this Section 2.2.
  
 Notwithstanding anything herein to the contrary, on the Expiration Date, this Purchase Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2.2.
  
 “FMV” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the value shall be deemed to be the highest intra-day or closing price on any trading day on such Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (“Bloomberg”) (based on a trading day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)) during the five trading days preceding the exercise, (b) if OTCQB or OTCQX is not a Trading Market, the value shall be deemed to be the highest intra-day or closing price on any trading day on the OTCQB or OTCQX on which the Common Stock is then quoted as reported by Bloomberg L.P. (based on a trading day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)) during the five trading days preceding the exercise, as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the “OTC Markets Group”, the value shall be deemed to be the highest intra-day or closing price on any trading day on the Pink Sheets on which the Common Stock is then quoted as reported by OTC Markets Group (based on a trading day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)) during the five trading days preceding the exercise, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
  
 “Trading Market” means the NASDAQ Stock Market LLC, or any of the following other markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).
  
 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 “Act”):
  
 “The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “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 Act, or pursuant to an exemption from registration under the 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 for a period of one hundred eighty (180) days following the Effective Date to anyone other than: (i) Boustead Securities, LLC (“Boustead”) or an underwriter, placement agent, or a selected dealer participating in the Offering, or (ii) an officer, partner, registered person or affiliate of Boustead or of any such underwriter, placement agent or selected dealer, in each case in accordance with FINRA Conduct Rule 5110(e)(1), or (b) 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). After 180 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.
  
 	 
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 3.2 Restrictions Imposed by the Act. The securities evidenced by this Purchase Warrant shall not be transferred unless and until: (i) if required by applicable law, the Company has received the opinion of counsel for the Company that the securities may be transferred pursuant to an exemption from registration under the Act and applicable state securities laws, 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. Piggyback Registration Rights.
  
 4.1 Grant of Right. Whenever the Company proposes to register any shares of its common stock under the Act (other than (i) a registration effected solely to implement an employee benefit plan or a transaction to which Rule 145 of the Act is applicable, or (ii) a registration statement on Form S-4, S-8 or any successor form thereto or another form not available for registering the Shares issuable upon exercise of this Purchase Warrant for sale to the public, whether for its own account or for the account of one or more stockholders of the Company (a “Piggyback Registration”), the Company shall give prompt written notice (in any event no later than ten (10) Business Days prior to the filing of such registration statement) to the Holder of the Company’s intention to effect such a registration and, subject to the remaining provisions of this Section 4.1, shall include in such registration such number of Shares underlying this Purchase Warrant (the “Registrable Securities”) that the Holders have (within ten (10) Business Days of the respective Holder’s receipt of such notice) requested in writing (including such number) to be included within such registration. If a Piggyback Registration is an underwritten offering and the managing underwriter advises the Company that it has determined in good faith that marketing factors require a limit on the number of shares of common stock to be included in such registration, including all Shares issuable upon exercise of this Purchase Warrant (if the Holder has elected to include such shares in such Piggyback Registration) and all other shares of common stock proposed to be included in such underwritten offering, the Company shall include in such registration (i) first, the number of shares of common stock that the Company proposes to sell and (ii) second, the number of shares of common stock, if any, requested to be included therein by selling stockholders (including the Holder) allocated pro rata among all such persons on the basis of the number of shares of common stock then owned by each such person. If any Piggyback Registration is initiated as a primary underwritten offering on behalf of the Company, the Company shall select the investment banking firm or firms to act as the managing underwriter or underwriters in connection with such offering. Notwithstanding anything to the contrary, the obligations of the Company pursuant to this Section 4.1 shall terminate on the earlier of (i) the fifth anniversary of the Effective Date and (ii) the date that Rule 144 would allow the Holder to sell its Registrable Securities during any ninety (90) day period.
  
 4.2 Indemnification. The Company shall indemnify the Holder(s) 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 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 out-of-pocket expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which any of them may become subject under the 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 Boustead contained in the Underwriting Agreement between Boustead and the Company, dated as of September 15, 2022. The Holder(s) 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 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 the Underwriting Agreement pursuant to which Boustead has agreed to indemnify the Company. 
  
 	 
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 4.3 Exercise of Purchase Warrants. Nothing contained in this Purchase Warrant shall be construed as requiring the Holder(s) to exercise their Purchase Warrants prior to or after the initial filing of any registration statement or the effectiveness thereof. 
  
 4.4 Documents Delivered to Holders. The Company shall deliver promptly to each Holder participating in the offering requesting the correspondence and memoranda described below, 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, during normal business hours, as any such Holder shall reasonably request. 
  
 4.5 Underwriting Agreement. The Holders shall be parties to any underwriting agreement relating to a Piggyback Registration. 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 the amount and nature of their ownership thereof and their intended methods of distribution. 
  
 4.6 Documents to be Delivered by Holder(s). Each of the Holder(s) 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. 
  
 4.7 Damages. Should the Company fail to comply with such provisions, the Holder(s) shall, in addition to any other legal or other relief available to the Holder(s), 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. 
  
 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, determined in the sole discretion of the Company, 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.
  
 	 
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 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 or merger of the Company with or into another corporation (other than a consolidation or share reconstruction or amalgamation or merger 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 or merger of the Company with or into, another corporation (other than a consolidation or share reconstruction or amalgamation or merger 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 of the Company for which such Purchase Warrant might have been exercised immediately prior to such consolidation, share reconstruction or amalgamation or merger, 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 or mergers.
  
 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.
  
 	 
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 7. Reservation. 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 shareholder.
  
 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 shareholder for the election of directors or any other matter, or as having any rights whatsoever as a shareholder 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 deliver to each Holder a copy of each notice relating to such events given to the other shareholders of the Company at the same time and in the same manner that such notice is given to the shareholders.
  
 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, or (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.
  
 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.
  
 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:
  
 Boustead Securities, LLC
 6 Venture, Suite 265
 Irvine, CA 92618
 Attention: Chief Executive Officer
  
 with a copy (which shall not constitute notice) to:
 ArentFox Schiff LLP
 1717 K Street, NW
 Washington, DC 20006
 Attention: Cavas S. Pavri
 Fax No: (202) 778-6460
  
 If to the Company:
  
 Know Labs, Inc.
 500 Union Street, Suite 810
 Seattle, Washington 98101
 Attention: Chief Executive Officer
 Email: 
  
 	 
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 with a copy (which shall not constitute notice) to:
 Bevilacqua PLLC
 1050 Connecticut Avenue NW, Suite 500
 Washington, DC 20036
 Attn: Louis Bevilacqua, Esq.
 Email: 
  
 9. Miscellaneous.
  
 9.1 Amendments. The Company and Boustead 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 Boustead may deem necessary or desirable and that the Company and Boustead 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 (i) the Company and (ii) the Holder(s) of Purchase Warrants then-exercisable for at least a majority of the Shares then-exercisable pursuant to all then-outstanding Purchase Warrants.
  
 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 California, 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 courts located in Los Angeles, California, or in the United States District Court located in Los Angeles, California, 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.
  
 	 
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 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 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 Boustead 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]
  
 	 
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 IN WITNESS WHEREOF, the Company has caused this Purchase Warrant to be signed by its duly authorized officer as of the 20th day of September, 2022.
  
 	 	 Know Labs, Inc.
	
	 	 	 	 
		By:	/s/ Peter Conley	
	  
	  
	Name: Peter Conley	 
	 	 	Title: Chief Financial Officer	 

  
 	 
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 [Form to be used to exercise Purchase Warrant]
  
 Date: __________, 20___
  
 The undersigned hereby elects irrevocably to exercise the Purchase Warrant for ______ shares of common stock, par value $0.001 per share (the “Shares”), of Know Labs, Inc., a Nevada corporation (the “Company”), and hereby makes payment of $____ (at the rate of $____ per Share) in payment of the Exercise Price pursuant thereto. Please issue the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been exercised.
  
 or
  
 The undersigned hereby elects irrevocably to convert its right to purchase ___ Shares of the Company under the Purchase Warrant for ______ Shares, as determined in accordance with the following formula:
  
 dividing [(A-B) (X)] by (A), where:
  
 	  
	 (A) 
	 = the FMV;

	  
	  
	  

	  
	 (B)
	 = the Exercise Price of this Purchase Warrant, as adjusted hereunder; and

	  
	  
	  

	  
	 (X) 
	 = the number of shares of Common Stock underlying the Purchase Warrant that would be issuable upon exercise of this Purchase Warrant in accordance with the terms of this Purchase Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

  
 The undersigned agrees and acknowledges that the calculation set forth above is subject to confirmation by the Company.
  
 Please issue the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been converted.
  
 Signature ___________________________________________________________________
  
 Signature Guaranteed __________________________________________________________
  
 	 
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 INSTRUCTIONS FOR REGISTRATION OF SECURITIES
  
 	 Name: 
	  
	  

	  
	 (Print in Block Letters)
	  

	  
	  
	  

	 Address:
	  
	  

	  
	  
	  

	  
	  
	  

	  
	  
	  

	  
	  
	  

  
 NOTICE: The signature to this form must correspond with the name as written upon the face of the Purchase Warrant without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange.
  
 	 
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 [Form to be used to assign Purchase Warrant]
  
 ASSIGNMENT
  
 (To be executed by the registered Holder to effect a transfer of the within Purchase Warrant):
  
 FOR VALUE RECEIVED, __________________ does hereby sell, assign and transfer unto the right to purchase shares of Common Stock, par value $0.001 per share, of Know Labs, Inc., a Nevada corporation (the “Company”), evidenced by the Purchase Warrant and does hereby authorize the Company to transfer such right on the books of the Company.
  
 Dated: __________, 20__
  
 Signature ___________________________________________________________________
  
 Signature Guaranteed __________________________________________________________
  
 NOTICE: The signature to this form must correspond with the name as written upon the face of the within Purchase Warrant without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange.
  
 	 
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