Document:

ruth-ex101_6.htm

 

Exhibit 10.1

 

CID #:   000011416

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of September 18, 2019, is by and among RUTH’S HOSPITALITY GROUP, INC., a Delaware corporation (the “Borrower”), the Guarantors party hereto, WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent on behalf of the Lenders under the Credit Agreement (as hereinafter defined) (in such capacity, the “Administrative Agent”), and the Lenders party hereto.  

 

W I T N E S E T H

 

WHEREAS, the Borrower, the Guarantors, the Lenders and the Administrative Agent are parties to that certain Credit Agreement dated as of February 2, 2017 (as amended, modified, extended, restated, replaced, or supplemented from time to time, the “Credit Agreement”; capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement); 

 

WHEREAS, the Borrower has requested that the Lenders (i) increase the aggregate amount of the Commitments to $120 million pursuant to Section 4.13 of the Credit Agreement and (ii) make certain other amendments to the Credit Agreement as set forth herein; 

 

WHEREAS, concurrently with the effectiveness of this Amendment, the Lenders have agreed to provide such increase to the aggregate amount of the Commitments (the “Incremental Commitments”) to the Borrower, as set forth in Section 2.1 hereof in the amounts and subject to the conditions set forth herein; and

 

WHEREAS, the Lenders have agreed to amend the Credit Agreement, in each case subject to the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

 

ARTICLE I

AMENDMENT TO CREDIT AGREEMENT

 

As of the First Amendment Effective Date (as hereinafter defined), the Credit Agreement is hereby amended in the following respects:

 

1.1Amendment to the definition of “Applicable Margin”.  The first sentence following the pricing grid in the definition of “Applicable Margin” in Section 1.1 of the Credit Agreement is hereby amended in its entirety to read as follows:

 

The Applicable Margin shall be determined and adjusted quarterly on the date five (5) Business Days after the day on which the Borrower provides a Compliance Certificate pursuant to Section 7.1(iv) for the most recently ended Fiscal Quarter of the Borrower (each such date, a “Calculation Date”); provided that (a) the Applicable Margin shall be based on Pricing Level II until the first Calculation Date occurring after the First Amendment Effective Date and, thereafter 

 

the Pricing Level shall be determined by reference to the Consolidated Leverage Ratio as of the last day of the most recently ended Fiscal Quarter of the Borrower preceding the applicable Calculation Date, and (b) if the Borrower fails to provide a Compliance Certificate when due as required by Section 7.1(iv) for the most recently ended Fiscal Quarter of the Borrower preceding the applicable Calculation Date, the Applicable Margin from the date on which such Compliance Certificate was required to have been delivered shall be based on Pricing Level IV until such time as such Compliance Certificate is delivered, at which time the Pricing Level shall be determined by reference to the Consolidated Leverage Ratio as of the last day of the most recently ended Fiscal Quarter of the Borrower preceding such Calculation Date.  

 

1.2Amendment to the definition of “Commitment”.  The last two sentences in the definition of “Commitment” in Section 1.1 of the Credit Agreement are hereby amended in their entireties to read as follows:

 

The aggregate Commitments of all the Lenders on the First Amendment Effective Date shall be ONE HUNDRED TWENTY MILLION DOLLARS ($120,000,000).  The Commitment of each Lender as of the First Amendment Effective Date is set forth opposite the name of such Lender on Schedule 1.1(b).

 

1.3Amendment to Section 1.1.  The following new definition is hereby added to Section 1.1 of the Credit Agreement in the appropriate alphabetical order to read as follows:

 

“First Amendment Effective Date” means September 17, 2019.

 

1.4Amendment to Section 4.13(a).  Section 4.13(a) of the Credit Agreement is hereby amended by replacing the reference to “$60,000,000” therein with “$30,000,000”.  

 

1.5Amendment to Schedule 1.1(b).  Schedule 1.1(b) to the Credit Agreement is hereby amended and restated in its entirety to read as provided on Schedule 1.1(b) attached hereto.  

 

 

ARTICLE II

INCREMENTAL COMMITMENTS

 

2.1 Incremental Commitments.  Each Lender by its execution of this Amendment, hereby acknowledges, agrees and confirms its Commitment in the aggregate principal amount for such Lender as set forth on Schedule 1.1(b) attached hereto (which includes the Incremental Commitments for such Lender) and its obligation to make its portion of the Revolving Credit Loans to the Borrower from time to time in accordance with the provisions of the Credit Agreement.  Each of the parties hereto acknowledges and agrees that, after giving effect to this Amendment, the total aggregate principal amount for all additional Incremental Commitments permitted to be established pursuant to Section 4.13 of the Credit Agreement shall not (as of any date of incurrence thereof) exceed $30,000,000.

 

 

ARTICLE III

CONDITIONS

 

3.1Closing Conditions.  This Amendment shall be deemed effective as of the date set forth above (the “First Amendment Effective Date”) upon satisfaction of the following conditions (in form and substance reasonably acceptable to the Administrative Agent):

 

 

(a)Executed Amendment.  The Administrative Agent shall have received a copy of this Amendment duly executed by each of the Credit Parties, the Administrative Agent and the Lenders.

 

(b)Closing Certificates; Etc.  The Administrative Agent shall have received each of the following:

 

(i)Officer’s Certificate.  A certificate from a Responsible Officer of the Borrower to the effect that (A) after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing and (B) each of the representations and warranties of the Credit Parties contained in Article VI of the Credit Agreement are true and correct in all material respects, except to the extent any such representation and warranty is qualified by materiality or reference to Material Adverse Effect, in which case, such representation and warranty shall be true and correct in all respects, as of the date hereof  (except for any such representation and warranty that by its terms is made only as of an earlier date, which representation and warranty shall remain true and correct as of such earlier date).

 

(ii)Compliance Certificate.  A Compliance Certificate from the Borrower demonstrating that (1) the Borrower is in compliance with the financial covenants set forth in Section 8.6 of the Credit Agreement and (2) the Consolidated Leverage Ratio is less than 2.50:1.00, in each case, based on the financial statements most recently delivered pursuant to Section 7.1(ii) or 7.1(iii) of the Credit Agreement, as applicable, both before and after giving effect (on a Pro Forma Basis) to (x) the Incremental Commitments, (y) the making of any Incremental Loans (with the Incremental Commitments being deemed to be fully funded) and (z) any Permitted Acquisition consummated in connection with such Incremental Loans (if any).

 

(iii)Certificates of Good Standing.  Certificates as of a recent date of the good standing of each Credit Party under the laws of its jurisdiction of organization.

 

(c)Upfront Fees.  The Administrative Agent shall have received, for the account of each Lender, an upfront fee in an amount equal to 10 basis points on the aggregate amount the Incremental Commitment of such Lender.

 

(d)Other Fees and Out of Pocket Costs.  The Borrower shall have paid any and all reasonable out-of-pocket costs incurred by the Administrative Agent (including the fees and expenses Moore & Van Allen PLLC as legal counsel to the Administrative Agent), and all other fees and other amounts payable to the Administrative Agent, in each case in connection with the negotiation, preparation, execution and delivery of this Amendment.

 

 

ARTICLE IV
MISCELLANEOUS

 

4.1Amended Terms.  On and after the date hereof, all references to the Credit Agreement in each of the Loan Documents shall hereafter mean the Credit Agreement as amended by this Amendment.  Except as specifically amended hereby or otherwise agreed, the Credit Agreement is hereby ratified and confirmed and shall remain in full force and effect according to its terms.

 

 

4.2Representations and Warranties of the Credit Parties.  Each of the Credit Parties represents and warrants as follows:

 

(a)Each Credit Party has all requisite power and authority and has taken all necessary corporate and other action, to authorize the execution, delivery and performance of this Amendment in accordance with its terms.  

 

(b)This Amendment has been duly executed and delivered by the duly authorized officers of each Credit Party that is a party hereto and constitutes the legal, valid and binding obligation of each Credit Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

(c)No consent or authorization of, filing with, or other act in respect of, an arbitrator or Governmental Authority and no consent of any other Person is required in connection with the execution, delivery, performance, validity or enforceability of this Amendment.

 

(d)After giving effect to this Amendment, the representations and warranties set forth in the Loan Documents are true and correct in all material respects as of the date hereof (except for (i) those which expressly relate to an earlier date and (ii) those that are qualified by materiality or reference to Material Adverse Effect, which are true and correct in all respects).

 

(e)After giving effect to this Amendment, no event has occurred and is continuing which constitutes a Default or an Event of Default.

 

(f)The Security Documents continue to create a valid security interest in, and Lien upon, the Collateral, in favor of the Administrative Agent, for the benefit of the Lenders, which security interests and Liens are perfected in accordance with the terms of the Security Documents and prior to all Liens other than Permitted Encumbrances.

 

(g)Except as specifically provided in this Amendment, the Obligations of the Credit Parties are not reduced or modified by this Amendment and are not subject to any offsets, defenses or counterclaims.

 

4.3Reaffirmation of Obligations.  Each Credit Party hereby ratifies the Credit Agreement and each other Loan Document to which it is a party and acknowledges and reaffirms (a) that it is bound by all terms of the Credit Agreement and each other Loan Document to which it is a party applicable to it and (b) that it is responsible for the observance and full performance of its respective obligations under the Loan Documents.

 

4.4Loan Document.  This Amendment shall constitute a Loan Document under the terms of the Credit Agreement.

 

4.5Expenses.  The Borrower agrees to pay all reasonable costs and expenses of Administrative Agent in connection with the preparation, execution and delivery of this Amendment, including without limitation the reasonable fees and expenses of the Administrative Agent’s legal counsel.

 

 

4.6Entirety.  This Amendment and the other Loan Documents embody the entire agreement among the parties hereto and supersede all prior agreements and understandings, oral or written, if any, relating to the subject matter hereof.

 

4.7Counterparts; Telecopy.  This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument.  Delivery of an executed counterpart to this Amendment by telecopy or other electronic means shall be effective as delivery of a manually executed counterpart of this Amendment.

 

4.8GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

4.9Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns.

 

4.10Consent to Jurisdiction; Service of Process; Waiver of Jury Trial.  The jurisdiction, services of process and waiver of jury trial provisions set forth in Sections 11.5 and 11.6 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis.

 

 

[Signature pages to follow]

 

 

IN WITNESS WHEREOF the parties hereto have caused this Amendment to be duly executed on the date first above written.

 

BORROWER:RUTH’S HOSPITALITY GROUP, INC.

By: /s/ Arne G. Haak
Name: Arne G. Haak
Title: Executive Vice President and Chief Financial Officer

GUARANTORS:RCSH OPERATIONS, INC.

By: /s/ Arne G. Haak
Name: Arne G. Haak
Title: Executive Vice President and Chief Financial Officer

RCSH OPERATIONS, LLC

By: /s/ Arne G. Haak
Name: Arne G. Haak
Title: Executive Vice President and Chief Financial Officer

RUTH’S CHRIS STEAK HOUSE BOSTON, LLC

By: /s/ Arne G. Haak
Name: Arne G. Haak
Title: Executive Vice President and Chief Financial Officer

RUTH’S CHRIS STEAK HOUSE FRANCHISE, LLC

By: /s/ Arne G. Haak
Name: Arne G. Haak
Title: Executive Vice President and Chief Financial Officer

RCSH MANAGEMENT, INC.

By: /s/ Arne G. Haak
Name: Arne G. Haak
Title: Executive Vice President and Chief Financial Officer

RHGI GIFTCO, INC.

By: /s/ Arne G. Haak
Name: Arne G. Haak
Title: Executive Vice President and Chief Financial Officer

 

 

RUTH’S HOSPITALITY GROUP, INC.

FIRST AMENDMENT

 

 

 

 

AGENT AND LENDERS:WELLS FARGO BANK, NATIONAL

ASSOCIATION, as Administrative Agent,

Swingline Lender, Issuing Lender and Lender

 

 

By:  /s/ Meghan Hinds

Name:  Meghan Hinds

Title:  Managing Director

 

 

 

RUTH’S HOSPITALITY GROUP, INC.

FIRST AMENDMENT

 

JPMORGAN CHASE BANK, N.A.,

as Lender

 

 

By:  /s/ Caroline Eagan

Name:  Caroline Eagan

Title:  Vice President

 

 

 

 

RUTH’S HOSPITALITY GROUP, INC.

FIRST AMENDMENT

 

TD BANK, N.A.,

as Lender

 

 

By:  /s/ Michael Nursey

Name:  Michael Nursey

Title:  Managing Director

 

 

RUTH’S HOSPITALITY GROUP, INC.

FIRST AMENDMENT

 

SCHEDULE 1.1(b)

 

Commitments and Commitment Percentages

 

 

			
	
Lender
	
Commitment
	
Commitment Percentage

	
Wells Fargo Bank, National Association
	
 

$46,666,666.67

 
	
38.888888889%

	
JPMorgan Chase Bank, N.A.
	
 

$33,333,333.33

 
	
27.777777778%

	
TD Bank, N.A.
	
 

$40,000,000.00

 
	
33.333333333%

	
Total:
	
 

$120,000,000.00

 
	
100.000000000%Blueprint

 

Exhibit 10.40

 

 

CONFIDENTIAL

 

November
6, 2018

 

Ronald P. Erickson

Founder and Chairman

 

Phillip A. Bosua

CEO

Know Labs, Inc.

500 Union Street, Suite 810

Seattle, WA 98101

 

Dear
Ron and Phil:

 

We are
pleased to submit the following agreement with respect to certain
financing transactions, strategic corporate transactions and other
activities described herein by and for Know Labs, Inc. and its
consolidated subsidiaries (the “Company”).

 

Boustead
Securities, LLC (“Boustead”) is pleased to act as
exclusive financial advisor to the Company, subject to the terms
and conditions outlined below, in connection with the
Company’s intention to pursue the activities described in
Section 2 below. The exclusive best efforts, engagement outlined in
this letter has the objective of providing growth capital for the
Company’s future expansion and IP development
plans.

 

This
letter agreement (“Agreement”) states certain
conditions and assumptions upon which the proposed services by
Boustead will be based. The final terms of any transaction will be
dictated by investor interest, market conditions and the financial
performance of the Company and its consolidated
subsidiaries.

 

This
Agreement will confirm the understanding and agreement between
Boustead and the Company as follows:

 

1.

Advisory
Services: Boustead will provide advisory services to the
Company in the areas of strategic corporate development, financing
and/or capital placement transactions. Boustead will also introduce
strategic corporate investors / partners to the Company as
appropriate during the normal course of business and act as
coordinator for all activities within its purview. It is also
understood that Boustead is acting as an advisor only, and shall
have no authority to enter into any commitments on the
Company’s behalf, or to negotiate the terms of any
transaction, or to hold any funds or securities in connection with
any transaction or to perform any other acts on behalf of the
Company without the Company’s express written
consent.

 

	

Boustead
Securities, LLC

	

Direct
phone:

	

+1 310
383 7874

	

6
Venture, Suite 265

	

Email:

	

 pete@boustead1828.com

	

Irvine,
CA 92618 USA

	

Web:

	

www.boustead1828.com

 

1

 

 

Boustead will serve
as exclusive financial advisor to the Company to:

 

(a)

Secure financing on
a best efforts basis, related to the sale of up to USD$5,000,000,
or more at the discretion of the Company, of the Company’s
securities (the “Financing”) based upon
reasonably acceptable terms from qualified investors. The Financing
will be completed pursuant to a securities purchase agreement and
other customary documents containing terms and conditions that are
customary for a financing of the proposed size and
nature.

 

2.

Fees and
Expenses: In connection with the services to be rendered
hereunder, the Company agrees to pay Boustead the following fees
and expenses:

 

a)

Success
Fees:

 

Financing:
For any equity investment into the Company, including preferred
stock, common stock, convertible debentures, convertible debt,
subordinated debt with warrants or any other securities convertible
into common or preferred stock, or any other form of debt
instrument involving any other form of equity participation,
Boustead shall receive upon closing: (i) a success fee, payable in
cash, equal to eight percent (8%) of the gross amount to be
disbursed to the Company from such equity closing, plus (ii)
placement agent warrants in the same equity as issued by the
Company equal to eight percent (8%) of the gross issuance of
securities by the Company from such equity closing. Any shares of
stock issued to Boustead hereunder shall be subject to the rights,
restrictions and obligations set forth in the Company’s stock
purchase and investor rights agreements.

 

For any
equity investment into the Company, including preferred stock,
common stock, convertible debentures, convertible debt,
subordinated debt with warrants or any other securities convertible
into common or preferred stock, or any other form of debt
instrument involving any other form of equity participation from
any accredited investor introduced by Ronald Erickson or Philip
Bosua (the “Company Investors”), Boustead shall receive
upon closing: (i) a success fee, payable in cash, equal to two
percent (2%) of the gross amount to be disbursed to the Company
from such equity closing, plus (ii) placement agent warrants in the
same equity as issued by the Company equal to two percent (2%) of
the gross issuance of securities by the Company from such equity
closing. Any shares of stock issued to Boustead hereunder shall be
subject to the rights, restrictions and obligations set forth in
the Company’s stock purchase and investor rights
agreements.

 

 

2

 

 

Payment of Success Fees:

 

(i)           

Cash Fee:
The cash portion of the Success Fee will be due and payable upon
the closing of each Financing as the case may be and will be
payable directly to Boustead from the escrow or clearing account
established for such closing or in such other manner as may be
acceptable to Boustead. Immediately prior to closing of a
Financing, the Company will sign a payment authorization letter, in
a form to be prepared at the sole discretion of Boustead,
irrevocably instructing the Escrow or Closing Agent to deduct the
Success Fees due to Boustead from the Financing and remit those
Success Fees directly to Boustead.

 

(ii)           

Warrants:
The Boustead Warrants will be due and payable upon the closing of
each Financing and issued to Boustead in conjunction with the
issuance of the other securities pursuant to the Financing. The
Boustead Warrants will have a five (5) year term (or such longer
term as is provided in any warrants issued in the Financing) and
will provide for cashless exercise (even if the Investors do not
have such a right). The shares underlying the Boustead Warrants
will be included in the first registration statement filed by the
Company covering the securities issued in the Financing (or
securities issuable upon conversion or exercise thereof). The
Boustead Warrants will be transferable within Boustead’s
organization, at Boustead’s discretion. The Boustead Warrants
will contain such other terms and conditions no less favorable to
Boustead than the term and conditions of any warrants, if any,
issued to the Investors in the Financing, including any callable
provisions.

 

b)

Expenses:
The Company also agrees to reimburse Boustead, at the close of the
Financing upon presentation of an invoice, for all of its
reasonable out-of-pocket expenses (including reasonable fees and
expenses of its legal counsel) in connection with the performance
of its services hereunder. Any expense exceeding USD$1,500 shall be
pre-approved in writing by the Company. In the event the any fee becomes delinquent,
Boustead employs the same prudent collection procedures as other
businesses and, if it becomes necessary to file suit or to engage a
collection agency for the collection of any fees and/or expenses,
the Company shall pay all related costs and expenses of such
collection efforts, including reasonable attorney
fees.

 

c)

Advisory
Fee: Upon execution of this Agreement and presentation of an
invoice, the Company shall pay
Boustead an Advisory Fee of USD$25,000 which amount shall be
deducted from the cash fee at closing of the contemplated
financing.

3.

Indemnification:
The Company agrees to indemnify Boustead as set forth in Schedule A
annexed hereto and made a part hereof.

 

4.

Successors: This
Agreement shall be binding upon any and all successors and assigns
of the Company (including any entity surviving any merger to which
the Company is a party). Boustead shall be permitted to assign its
rights or delegate its obligations hereunder by operation of law,
including as a result of the partial or total merger or
consolidation of Boustead with another entity.

 

 

3

 

 

5.

Term: The
term of this Agreement (the “Engagement Period”) will
expire upon the earlier to occur of (i) six (6) months from the
date Boustead receives an executed copy of this Agreement from the
Company or (ii) the mutual written agreement of the Company and
Boustead, or (iii) the closing of the Financing. The Engagement
Period may be extended for additional six (6) month periods under
the same terms and conditions as described herein by mutual written
agreement of the Company and Boustead. In addition, Boustead shall be
entitled to a success fee(s), as defined above, if the Company
completes a Financing with any party who has made an investment in
the Company during Boustead’s engagement hereunder
(collectively, the “Identified Party (ies)”) during the
twelve (12) month period following the termination of this
Agreement.

 

6.

Governing Law;
Dispute Resolution: This Agreement shall be deemed to
have been made in the State of California and shall be construed,
and the rights and liabilities determined, in accordance with the
law of the State of California, without regard to the conflicts of
laws rules of such jurisdiction. Any controversy or claim relating
to or arising from this Agreement (an "Arbitrable Dispute") shall
be settled by arbitration in accordance with the Financial Industry
Regulation Authority (“FINRA”) as such rules may be
modified herein or as otherwise agreed by the parties in
controversy. The forum for arbitration shall be Orange County,
California. Following thirty (30) days’ notice by any party
of intention to invoke arbitration, any Arbitrable Dispute arising
under this Agreement and not mutually resolved within such thirty
(30) day period shall be determined by a single arbitrator upon
which the parties agree.

 

7.

USA Patriot
Act: Boustead is committed to complying with U.S. statutory
and regulatory requirements designed to combat money laundering and
terrorist financing. The USA Patriot Act requires that all
financial institutions obtain certain identification documents or
other information in order to comply with their customer
identification procedures.

 

8.

Confidentiality:
All non-public information concerning the Company and its
subsidiaries which is given to Boustead will be used by Boustead
solely in the course of the performance of its services hereunder
and will be treated confidentially by Boustead and any retained
advisors and agents for as long as such information remains
non-public. Except as otherwise required by law, Boustead will not
use such information or disclose such information to a third party,
other than its Representatives (as herein defined) who have a need
to know such information in connection with the transaction
contemplated by this Agreement and who agree to keep such
information confidential.

 

This
Agreement is for confidential use of the Company and Boustead only
and may not be disclosed by the Company to any person other than
its attorneys, accountants and financial advisors, and only on a
confidential basis in connection with the proposed transaction or
financing, except where disclosure is required by law or is
mutually consented to in writing by Boustead and the
Company.

 

 

4

 

 

9.

Access to
Information: In connection with Boustead activities on the
Company’s behalf, the Company agrees that it will furnish
Boustead with all information concerning the Company and the
Financing that Boustead reasonably deems appropriate and that the
Company will provide Boustead with reasonable access to its
officers, accountants, attorneys and other professional advisors.
The Company represents that all information made available to
Boustead will be complete and correct in all material respects and
will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein not misleading in light of the circumstances under which
such statements are made. In rendering its services hereunder,
Boustead will be utilizing and relying on the information without
independent verification thereof or independent appraisal of any of
the Company’s assets.

 

Disclosure:
During the Engagement Period and for sixty (60) days thereafter,
the Company agrees not to issue any press releases or
communications to the public relating to the Financing without
Boustead prior approval or unless otherwise required by law, which
will not be unreasonably withheld or delayed, and the Company
agrees that such press release will state that the transaction
and/or financing was arranged by Boustead, unless we mutually agree
otherwise or unless otherwise required by law. The Company further
agrees that Boustead may, at its own expense, publicize its
services to the Company hereunder, including, without limitation,
issuing press releases, placing advertisements and referring to the
Financing on Boustead website.

 

10.

Modification: This
Agreement may not be modified or amended except in writing duly
executed by the parties hereto.

 

 

5

 

   

Please
confirm that the foregoing is in accordance with our understanding
by signing and returning one copy of this Agreement to Boustead to indicate the Company’s
acceptance of the terms set forth herein.

 

Very
truly yours,

 

Accepted
as of the date first above written:

 

Know Labs, Inc.

 

	

By:

	

/s/
Ronald P. Erickson

	
 

	
 

	

Name:

	

Ronald
P. Erickson

	
 

	
 

	

Title:

	

Founder
and Chairman

	

Boustead Securities, LLC

	
 

	
 

	
 

	
 

	

By:

	

/s/
Phillip A. Bosua

	
 

	
 

	

Name:

	

Phillip
A. Bosua

	
 

	
 

	

Title:

	

CEO

	

By:

	

/s/
Keith Moore

	
 

	
 

	
 

	

Keith
Moore

	
 

	
 

	
 

	

CEO

	
 

	
 

	
 

	
 

	
 

	
 

	

By:

	

/s/
Peter Conley

	
 

	
 

	
 

	

Peter
Conley

	
 

	
 

	
 

	

Managing
Director

	
 

	
 

	
 

	

Head of
IP Banking

 

 

6

 

Schedule A

 

The
Company agrees that it shall indemnify and hold harmless, Boustead
Securities, LLC (“BSL”), its members, managers,
officers, employees, agents, affiliates and controlling persons
within the meaning of Section 20 of the Securities Exchange Act of
1934 and Section 15 of the Securities Act of 1933, each as amended
(any and all of whom are referred to as an "Indemnified Party"),
from and against any and all losses, claims, damages, liabilities,
or expenses, and all actions in respect thereof (including, but not
limited to, all legal or other expenses reasonably incurred by an
Indemnified Party in connection with the investigation,
preparation, defense or settlement of any claim, action or
proceeding, whether or not resulting in any liability), incurred by
an Indemnified Party with respect to, caused by, or otherwise
arising out of any transaction contemplated by this Agreement or
BSL's performing the services contemplated hereunder; provided,
however, the Company will not be liable to the extent, and only to
the extent, that any loss, claim, damage, liability or expense is
finally judicially determined to have resulted primarily from BSL's
gross negligence or bad faith in performing such
services.

 

If
the indemnification provided for herein is conclusively determined
(by an entry of final judgment by a court of competent jurisdiction
and the expiration of the time or denial of the right to appeal) to
be unavailable or insufficient to hold any Indemnified Party
harmless in respect to any losses, claims, damages, liabilities or
expenses referred to herein, then the Company shall contribute to
the amounts paid or payable by such Indemnified Party in such
proportion as is appropriate and equitable under all circumstances
taking into account the relative benefits received by the Company
on the one hand and BSL on the other, from the transaction or
proposed transaction under the Agreement or, if allocation on that
basis is not permitted under applicable law, in such proportion as
is appropriate to reflect not only the relative benefits received
by the Company on the one hand and BSL on the other, but also the
relative fault of the Company and BSL; provided, however, in no
event shall the aggregate contribution of BSL and/or any
Indemnified Party be in excess of the net compensation actually
received by BSL and/or such Indemnified Party pursuant to this
Agreement.

 

The
Company shall not settle or compromise or consent to the entry of
any judgment in or otherwise seek to terminate any pending or
threatened action, claim, suit or proceeding in which any
Indemnified Party is or could be a party and as to which
indemnification or contribution could have been sought by such
Indemnified Party hereunder (whether or not such Indemnified Party
is a party thereto), unless such consent or termination includes an
express unconditional release of such Indemnified Party, reasonably
satisfactory in form and substance to such Indemnified Party, from
all losses, claims, damages, liabilities or expenses arising out of
such action, claim, suit or proceeding.

 

In
the event any Indemnified Party shall incur any expenses covered by
this Exhibit A, the Company shall reimburse the Indemnified Party
for such covered expenses within ten (10) business days of the
Indemnified Party's delivery to the Company of an invoice therefor,
with receipts attached. Such obligation of the Company to so
advance funds may be

conditioned upon the Company's receipt of a written undertaking
from the Indemnified Party to repay such amounts within ten (10)
business days after a final, non-appealable judicial determination
that such Indemnified Party was not entitled to indemnification
hereunder.

 

The
foregoing indemnification and contribution provisions are not in
lieu of, but in addition to, any rights which any Indemnified Party
may have at common law hereunder or otherwise, and shall remain in
full force and effect following the expiration or termination of
BSL's engagement and shall be binding on any successors or assigns
of the Company and successors or assigns to all or substantially
all of the Company's business or assets.

 

 

 

7

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