LEAK-OUTAGREEMENT
ThisLEAK-OUTAGREEMENT(hereinafter the“Agreement”) is madeandentered intoas of this 23rd day ofJune, 2017(hereinafter the“EffectiveDate”),byand betweenAuctusFund,LLC(hereinafter“Auctus” or the“Fund”)andTextmunicationHoldings, Inc.(hereinafter“TXHD” or the“Company”).TheFund includesanyaffiliate orcontrolling person ofAuctus,andany otheragent,representative or other personwithwhom theFund isacting inconcert.
RECITALS
A. TheFundand the Company haveentered into a Securities PurchaseAgreement, datedJuly 22, 2016byand between theFundand the Company(hereinafter the“SPA” or the“PurchaseAgreement”), pursuant towhich theFund purchased acertain Convertible PromissoryNote issued onJuly 22,2016, in the principalamount of $237,750.00(hereinafter the“Note”);
B.Pursuant to thatcertain Settlementand MutualGeneral ReleaseAgreement(hereinafter the“SettlementAgreement”),byand between theFundandthe Company, datedas ofevendate herewith,Fund hasagreed toenter into thisAgreement,which shallrestrict the public sale,assignment, transfer,conveyance,hypothecation oralienation ofall shares of the Company’scommon stock issuable uponconversion of theNote(hereinafter theforegoing shares,collectively, the“Shares”).
AGREEMENT
NOW, THEREFORE, inconsideration of theforegoingpremisesand of the mutualcovenantscontained herein, thereceiptand sufficiency ofwhichare herebyacknowledged, the parties herebyagreeasfollows:
1.Exceptas otherwiseexpresslyprovided herein,and provided that the Company has not breachedanyof the provisions of the SettlementAgreement,commencing on theexecutionand delivery of thisAgreementandending onNovember 23, 2017(the“Leak-Out Period”), Fund may only publicly sell its Sharesacquired through theconversion of theNote, subject to thefollowingconditions:
1.1Atany time during theLeak-Out Period,Fund may publiclysell daily thegreater of 4,910,714 shares or 20% of theaverage daily trading volume over the prior 10-day tradingperiod.
1.2All Shares subject to thisAgreementwill be subject toirrevocable instructions deliveredto theTransferAgent,as defined in the SettlementAgreement,concurrentlyherewith informand substance satisfactory to the Fund toensure promptcompliancewith the terms of thisAgreement, including providingforreleasesof the Sharesorremoval of legendsas setforth in such instructions. Such instructionswill include a directionrequiring the transferagent to deliver toeachparty to thisAgreement uponrequest areport settingforth the shareholdings ofeach party heretoandany transfers of such shares that may have occurred.
1.3TheFundagrees that itwill not, directly or indirectly,engage inany short selling,hypothecation of Shares orbyanyother manneror methodsell or lend Shares thatwould beaverse to thepublicly traded shares of Company during theLeak-Out Period.
1.4Any transferee ofany of the Sharescoveredby thisAgreement, other than purchaser transactions permitted under awaiverby the Company pursuant to Section 2 or purchaser transactions in the open market, shall be subject toall of the termsandconditions of thisAgreement, including,without limitation,allrestrictions on theresale of such Shares,andforall such purposes,any such transferee shall be a“Fund”asdefined herein.
1.5Any purported transfer of Shares in violation of thisAgreementshall be voidand of noforce oreffect,and no such transfer shall be madeorrecorded on the books of the Company.
2.Notwithstandinganything to thecontrary setforth herein, the Company may, in its sole discretionandingoodfaith,atany timeandfrom time totime,waiveanyof theconditions orrestrictionscontained herein.
3.In theeventof:(a) acompleted tender offer to purchaseall or substantiallyall of the Company’s issuedand outstanding securities; or(b) a merger,consolidation or otherreorganization of the Companywith or intoan unaffiliatedentity, then thisAgreement shall terminateas of theclosing of such transactionand the Sharesrestricted pursuant hereby shall bereleasedfrom suchrestrictions.
4.Exceptas otherwise provided in thisAgreement orany otheragreements between the partieshereto, theFund shall beentitled to itsrespective beneficialrights of ownership of the Shares, including theright to vote the Sharesforanyandall purposes.
5.All noticesand othercommunicationshereunder shallbe inwritingand shallbeacceptable if(a)delivered personally orby telecopy, or(b) if sentbyregistered orcertified mail(returnreceiptrequested)and postageprepaid,or(c) if sentbyreputable overnightcourier, so longas the parties to thisAgreementreceive such noticesat theaddresses setforth in theAgreement orat such otheraddressfor a partyas shall be specifiedby like notice.All notices shall be deemed tobegiven on the sameday ifdeliveredbyhand or telecopy or on thefollowing business day if sentby overnight deliveryor the second business dayfollowing the date of mailing.
6.Theresalerestrictions on the Shares setforth in thisAgreement shall beinaddition toall otherrestrictions on transferimposedbyapplicableUnited Statesand state securities laws,rulesandregulations.
7.If the Company orFundfails tofullyadhere to the termsandconditions of thisAgreement, suchparty shall be liable to the other partyheretoforany damages sufferedbyany party heretobyreason ofany such breach of thetermsandconditions hereof.Fundagrees that in theevent of a breach ofanyof the termsandconditions of thisAgreementbyFund, that inaddition toall otherremedies that maybeavailable in lawor inequity to the non-defaulting parties, the non-defaultingparty may seek a preliminaryandpermanent injunction,without bond or surety,andanorder of acourtrequiring such defaultingFund toceaseanddesistfrom violating the termsandconditions of thisAgreementand specificallyrequiring suchFund to perform his/her/its obligations hereunder isfairandreasonablebyreason of the inability of the parties to thisAgreement to presentlydetermine thetype,extent oramount of damages that the Company or its other shareholders may sufferas aresult ofany breachorcontinuation thereof.
8.ThisAgreement setsforth theentire understanding of the parties heretowithrespect to the subject matter hereof,and maynot beamendedexcept by awritten instrumentexecutedby the partieshereto.
9.ThisAgreement shall begovernedbyandconstrued inaccordancewith thelaws of the State ofNevada.Anyactionbroughtbyeither partyheretoagainst the otherconcerning thisAgreement shall be brought only in thefederal or statecourts of the Commonwealth of Massachusetts, sitting in Boston, Suffolk County, the Commonwealth of Massachusetts. In theevent of default hereunder, the non-defaulting party shallbeentitledtorecoverreasonableattorney’sfeesandcosts incurred in theenforcement of thisAgreement.
10.The Partieseachrepresent thatbeforeexecuting thisAgreementeach Partyhas had the opportunity toconsultwithcompetent legalcounsel of its ownchoosing,carefullyread theAgreement,and hasbeenfullyandfairlyadvisedas to its terms.The Parties heretoagree thatanyrule oflawor decision thatwouldrequire interpretation ofanyclaimedambiguities in thisAgreementagainst the Party that drafted it has noapplicationand isexpresslywaived.
11.ThisAgreement may beexecuted in multiplecounterparts,each ofwhich shall be deemedan originalforall purposesandall ofwhich shall be deemed,collectively, oneagreement.The partieshereto,and theirrespective successorsandassigns,are herebyauthorized torely upon the signature ofeachperson on thisAgreement,whicharedelivered byfacsimile,electronic signature orscannedelectronice-mailattachment,asconstituting a dulyauthorized, irrevocable,actual,current delivery of thisAgreementwith original ink signatures ofeach such person. Signatures of the parties transmittedbyfacsimile or scannede-mailattachment shall be deemed to be their original signaturesforall purposes.ThisAgreement shall becomeeffectivewhenexecutedanddelivered by theparties hereto.
12.Incaseany one or more of theprovisioncontained in thisAgreement isforanyreason held to be invalid, illegal or unenforceable inanyrespect, suchinvalidity, illegality or unenforceability shall notaffectany other provision of thisAgreement,and such invalid, illegal or unenforceableprovision shall bereformedandconstrued so that itwill be valid, legalandenforceable to the maximumextent permittedbylaw.
INWITNESSWHEREOF, the undersigned have dulyexecutedand delivered thisLeak-OutAgreementas of the dayandyearfirstabovewritten.
| | TEXTMUNICATION HOLDINGS, INC.,(theCompany) |
| | aNevadacorporation |
| | | |
| | By: |  |
| | | |
| | Its: | CEO |
| | | Wais Asefi, CEO |
| | | |
| | AUCTUSFUND, LLC(theFund) |
| | aDelaware limited liabilitycompany |
| | | |
| | By |  |
| | Its: | Alfred J Sollami Manager |
| | | [NameandTitle] |
