LEAK-OUT AGREEMENT

 

This LEAK-OUT AGREEMENT (hereinafter the “Agreement”) is made and entered into
as of this 23rd day of June, 2017 (hereinafter the “Effective Date”), by and
between Auctus Fund, LLC (hereinafter “Auctus” or the “Fund”) and Textmunication
Holdings, Inc. (hereinafter “TXHD” or the “Company”). The Fund includes any
affiliate or controlling person of Auctus, and any other agent, representative
or other person with whom the Fund is acting in concert.

 

RECITALS

 

A. The Fund and the Company have entered into a Securities Purchase Agreement,
dated July 22, 2016 by and between the Fund and the Company (hereinafter the
“SPA” or the “Purchase Agreement”), pursuant to which the Fund purchased a
certain Convertible Promissory Note issued on July 22, 2016, in the principal
amount of $237,750.00 (hereinafter the “Note”);

 

B. Pursuant to that certain Settlement and Mutual General Release Agreement
(hereinafter the “Settlement Agreement”), by and between the Fund and the
Company, dated as of even date herewith, Fund has agreed to enter into this
Agreement, which shall restrict the public sale, assignment, transfer,
conveyance, hypothecation or alienation of all shares of the Company’s common
stock issuable upon conversion of the Note (hereinafter the foregoing shares,
collectively, the “Shares”).

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing premises and of the mutual
covenants contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

 

1. Except as otherwise expressly provided herein, and provided that the Company
has not breached any of the provisions of the Settlement Agreement, commencing
on the execution and delivery of this Agreement and ending on November 23, 2017
(the “Leak-Out Period”), Fund may only publicly sell its Shares acquired through
the conversion of the Note, subject to the following conditions:

 

1.1 At any time during the Leak-Out Period, Fund may publicly sell daily the
greater of 4,910,714 shares or 20% of the average daily trading volume over the
prior 10-day trading period.

 

1.2 All Shares subject to this Agreement will be subject to irrevocable
instructions delivered to the Transfer Agent, as defined in the Settlement
Agreement, concurrently herewith in form and substance satisfactory to the Fund
to ensure prompt compliance with the terms of this Agreement, including
providing for releases of the Shares or removal of legends as set forth in such
instructions. Such instructions will include a direction requiring the transfer
agent to deliver to each party to this Agreement upon request a report setting
forth the shareholdings of each party hereto and any transfers of such shares
that may have occurred.

 

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1.3 The Fund agrees that it will not, directly or indirectly, engage in any
short selling, hypothecation of Shares or by any other manner or method sell or
lend Shares that would be averse to the publicly traded shares of Company during
the Leak-Out Period.

 

1.4 Any transferee of any of the Shares covered by this Agreement, other than
purchaser transactions permitted under a waiver by the Company pursuant to
Section 2 or purchaser transactions in the open market, shall be subject to all
of the terms and conditions of this Agreement, including, without limitation,
all restrictions on the resale of such Shares, and for all such purposes, any
such transferee shall be a “Fund” as defined herein.

 

1.5 Any purported transfer of Shares in violation of this Agreement shall be
void and of no force or effect, and no such transfer shall be made or recorded
on the books of the Company.

 

2. Notwithstanding anything to the contrary set forth herein, the Company may,
in its sole discretion and in good faith, at any time and from time to time,
waive any of the conditions or restrictions contained herein.

 

3. In the event of: (a) a completed tender offer to purchase all or
substantially all of the Company’s issued and outstanding securities; or (b) a
merger, consolidation or other reorganization of the Company with or into an
unaffiliated entity, then this Agreement shall terminate as of the closing of
such transaction and the Shares restricted pursuant hereby shall be released
from such restrictions.

 

4. Except as otherwise provided in this Agreement or any other agreements
between the parties hereto, the Fund shall be entitled to its respective
beneficial rights of ownership of the Shares, including the right to vote the
Shares for any and all purposes.

 

5. All notices and other communications hereunder shall be in writing and shall
be acceptable if (a) delivered personally or by telecopy, or (b) if sent by
registered or certified mail (return receipt requested) and postage prepaid, or
(c) if sent by reputable overnight courier, so long as the parties to this
Agreement receive such notices at the addresses set forth in the Agreement or at
such other address for a party as shall be specified by like notice. All notices
shall be deemed to be given on the same day if delivered by hand or telecopy or
on the following business day if sent by overnight delivery or the second
business day following the date of mailing.

 

6. The resale restrictions on the Shares set forth in this Agreement shall be in
addition to all other restrictions on transfer imposed by applicable United
States and state securities laws, rules and regulations.

 

7. If the Company or Fund fails to fully adhere to the terms and conditions of
this Agreement, such party shall be liable to the other party hereto for any
damages suffered by any party hereto by reason of any such breach of the terms
and conditions hereof. Fund agrees that in the event of a breach of any of the
terms and conditions of this Agreement by Fund, that in addition to all other
remedies that may be available in law or in equity to the non-defaulting
parties, the non-defaulting party may seek a preliminary and permanent
injunction, without bond or surety, and an order of a court requiring such
defaulting Fund to cease and desist from violating the terms and conditions of
this Agreement and specifically requiring such Fund to perform his/her/its
obligations hereunder is fair and reasonable by reason of the inability of the
parties to this Agreement to presently determine the type, extent or amount of
damages that the Company or its other shareholders may suffer as a result of any
breach or continuation thereof.

 

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8. This Agreement sets forth the entire understanding of the parties hereto with
respect to the subject matter hereof, and may not be amended except by a written
instrument executed by the parties hereto.

 

9. This Agreement shall be governed by and construed in accordance with the laws
of the State of Nevada. Any action brought by either party hereto against the
other concerning this Agreement shall be brought only in the federal or state
courts of the Commonwealth of Massachusetts, sitting in Boston, Suffolk County,
the Commonwealth of Massachusetts. In the event of default hereunder, the
non-defaulting party shall be entitled to recover reasonable attorney’s fees and
costs incurred in the enforcement of this Agreement.

 

10. The Parties each represent that before executing this Agreement each Party
has had the opportunity to consult with competent legal counsel of its own
choosing, carefully read the Agreement, and has been fully and fairly advised as
to its terms. The Parties hereto agree that any rule of law or decision that
would require interpretation of any claimed ambiguities in this Agreement
against the Party that drafted it has no application and is expressly waived.

 

11. This Agreement may be executed in multiple counterparts, each of which shall
be deemed an original for all purposes and all of which shall be deemed,
collectively, one agreement. The parties hereto, and their respective successors
and assigns, are hereby authorized to rely upon the signature of each person on
this Agreement, which are delivered by facsimile, electronic signature or
scanned electronic e-mail attachment, as constituting a duly authorized,
irrevocable, actual, current delivery of this Agreement with original ink
signatures of each such person. Signatures of the parties transmitted by
facsimile or scanned e-mail attachment shall be deemed to be their original
signatures for all purposes. This Agreement shall become effective when executed
and delivered by the parties hereto.

 

12. In case any one or more of the provision contained in this Agreement is for
any reason held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement, and such invalid, illegal or unenforceable provision shall be
reformed and construed so that it will be valid, legal and enforceable to the
maximum extent permitted by law.

 

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IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Leak-
Out Agreement as of the day and year first above written.

 

  TEXTMUNICATION HOLDINGS, INC., (the Company)   a Nevada corporation        
By: [ex10-2_001.jpg]         Its: CEO     Wais Asefi, CEO         AUCTUS FUND,
LLC (the Fund)   a Delaware limited liability company         By
[ex10-2_002.jpg]   Its: Alfred J Sollami Manager     [Name and Title]

 

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