Document:

Exhibit
10.3

 

LEAK-OUT
AGREEMENT

 

THIS
LEAK-OUT AGREEMENT (the “Agreement”) is made and entered into as of the 19th day of July, 2022, between ________
(the “Holder”) and Soluna Holdings, Inc., a Nevada corporation (the “Company”).

 

RECITALS

 

WHEREAS,
the Company is the issuer of that certain Series B Convertible Preferred Stock (the “Series B Preferred” or
“Securities”) pursuant to that certain Securities Purchase Agreement (the “Purchase Agreement”)
dated as of the date hereof by and among the Company and the Holder;

 

WHEREAS,
any capitalized terms not defined in this Agreement shall their respective meanings ascribed to them in the Purchase Agreement;

 

WHEREAS,
the Holder owns the amount of Securities as listed on Schedule A;

 

WHEREAS,
each of the Securities provides the Holder with the right to receive shares of the Company’s common stock, par value $0.0001
of the Company (the “Common Stock”) through the conversion of the Series B Preferred; and

 

WHEREAS,
the Company and the Holder agree to enter into this Agreement in order to provide for the orderly conversion of the Securities;
and

 

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

 

1              Representations
and Warranties. Each of the parties hereto, by their respective execution and delivery of this Agreement, hereby represents
and warrants to the others and to all third party beneficiaries of this Agreement that: (a) such party has the full right, capacity
and authority to enter into, deliver and perform its respective obligations under this Agreement, (b) this Agreement has been
duly executed and delivered by such party and is the binding and enforceable obligation of such party, enforceable against such
party in accordance with the terms of this Agreement, and (c) the execution, delivery and performance of such party’s obligations
under this Agreement will not conflict with or breach the terms of any other agreement, contract, commitment or understanding
to which such party is a party or to which the assets or securities of such party are bound.

 

2.             Leak
Out.

 

(a)
Except as otherwise expressly provided herein, and subject to any other restrictions prohibiting the conversion, offer, sale or
transfer of the shares of Common Stock under applicable United States federal or state securities laws, rules and regulations
(collectively, the “Regulations”), the Company and the Holder agree that:

 

(i)
Commencing the later of the date of this Agreement or the date that the Series B Preferred may, in accordance with its terms becomes
convertible, subject to any applicable Regulations, the Holder shall be entitled to convert the Series B Preferred and sell the
underlying shares, in accordance with the restrictions contained under Section 2(b) (the “Leak Out”). The Leak
Out will remain in effect so long as any Series B Preferred (as defined in that certain Securities Purchase Agreement, dated July19,
2022, by and among the Company and the investors party thereto) or shares of Series A Preferred Stock of the Company remain outstanding,
unless otherwise expressly extended in writing by the Holder (the “Leak Out Period”), at which time the Holder
shall no longer be subject to the Leak Out restrictions, and shall be entitled to convert the Securities, as the Holder in their
sole discretion may determine. In the event the Company terminates, reduces, waives or otherwise modifies any of the restrictions
set forth in any other Leak-Out Agreement executed and delivered on or about the date hereof, then the Holder under this Agreement
shall be entitled to the same modification of its restrictions hereunder.

 

    1

     

    

 

(ii)  
Upon a breach of any representation, warranty or covenant of the Company pursuant to this Agreement, the Holder shall no longer
be subject to the Leak Out restrictions, subject to any applicable Regulations.

 

(iii)
The Company shall facilitate any conversion notice received from the Holder, and shall cause to be issued such shares, as contained
in such conversion notice on a timely basis, as provided for in the respective Security.

 

(b)
Commencing on the date of this Agreement, subject to any applicable Regulations, each Holder agrees, on behalf of itself and each
affiliate (as defined in Rule 405 under the Securities Act of 1933, as amended) of the Holder which (x) had knowledge of the transactions
contemplated hereby, (y) has or shares discretion relating to the Holder’s investments or trading or information concerning
the Holder’s investments, including in respect of the Securities, or (z) is subject to the Holder’s review or input
concerning such affiliate’s investments or trading (collectively, the “Trading Affiliates”), that, on
any trading day during the Leak Out Period, the Holder will not, and will cause each of its Trading Affiliates not to, sell, dispose
or otherwise transfer, in the aggregate, more than 15% of the composite daily trading volume of the Common Stock as reported by
Bloomberg, LP.

 

3.             Lock-up.
The Holder hereby agrees to execute any lock-up agreement reasonably requested by the underwriters in connection with any
underwritten offering of securities of the Company which is also executed by the Company’s officers and directors.

 

4.             Conflict.
In the event there is a conflict between the terms of any of the Securities with this Agreement, the terms of this Agreement shall
control any interpretation; provided, however, that, unless this Agreement expressly amends or supplements the language
of the respective Security, the Security shall remain in full force and effect.

 

5.             Remedies.
The Holder shall have the right to specifically enforce all of the obligations of the Company under this Agreement (without posting
a bond or other security), in addition to recovering damages by reason of any breach by the Company of any provision of this Agreement
and to exercise all other rights granted by law and/or any of the documents related to the acquisition of the Securities by the
Holder. The Company shall have the right to request statements and/or any transaction or trading records from the Holder at any
time during the term of this Agreement. In the event that the Holder is found to have intentionally violated its obligations under
this Agreement, such Holder will be precluded from trading for a period of ten (10) trading days (the “Standstill Period”)
and the Company shall not be required to honor any conversions, conversion notices during such Standstill Period.

 

6.             Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as the other party may request in order
to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
By way of illustration and not limitation, so that the Company may monitor Holder’s compliance with the terms hereof, the
Holder shall provide to the Company brokerage account statements (or other suitable evidence, such as confirmations) on a monthly
basis, and, upon reasonable demand. Such statements shall show the beginning securities balance, the number of securities sold
during the month, and the ending securities balance.

 

    2

     

    

 

6.             Notices.
All notices, instructions or other communications required or permitted to be given pursuant to this Agreement shall be given
in writing and delivered by facsimile, certified mail, return receipt requested or overnight courier by a nationally recognized
courier service to the respective address as set forth in the Series B Preferred. All notices shall be deemed to be given on the
same day if delivered by facsimile, on the following business day if sent by overnight delivery or on the third business day following
the date of mailing.

 

7.             Entire
Agreement. 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. This Agreement supersedes any prior agreement
(including, without limitation any prior lock-up or leak-out agreements), representation or understanding with respect to such
subject matter.

 

8.             Governing
Law. This Agreement and the terms and conditions set forth herein, shall be governed by and construed solely and exclusively
in accordance with the internal laws of the State of New York without regard to the conflicts of laws principles thereof. The
parties hereto hereby expressly and irrevocably agree that any suit or proceeding arising directly and/or indirectly pursuant
to or under this Agreement shall be brought solely in a federal or state court located in the City, County and State of New York.
By its execution hereof, the parties hereto covenant and irrevocably submit to the in personam jurisdiction of the federal and
state courts located in the City, County and State of New York and agree that any process in any such action may be served upon
any of them personally, or by certified mail or registered mail upon them or their agent, return receipt requested, with the same
full force and effect as if personally served upon them in New York, New York. The parties hereto expressly and irrevocably waive
any claim that any such jurisdiction is not a convenient forum for any such suit or proceeding and any defense or lack of in personam
jurisdiction with respect thereto. In the event of any such action or proceeding, the party prevailing therein shall be entitled
to payment from the other parties hereto of all of its reasonable counsel fees and disbursements.

 

9.             Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being
understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “pdf” format data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.

 

10.           Severability.
In the event any provision of this Agreement is held to be invalid, illegal or unenforceable for any reason and in any respect,
such invalidity, illegality, or unenforceability shall in no event affect, prejudice or disturb the validity of the remainder
of this Agreement, which shall remain in full force and effect, enforceable in accordance with its terms.

 

11.           Effectiveness.
This Agreement shall become effective immediately upon the full execution of this Agreement by the Company and the Holder. The
Company agrees that the rest and the remainder of the terms and conditions of the Series B Preferred of the Company, not specifically
altered by this Agreement shall remain in full force and effect, and inure to the benefit of the Holder.

 

[Signature
page follows]

 

    3

     

    

 

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

 

	HOLDER:	 
	 	 
	 	 
	COMPANY:	 
	 	 
	SOLUNA HOLDINGS, INC.	 
	 	 	 
	By:	 	 
	Name:	 	 
	Title:	 	 

 

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Schedule
A

 

	Holder	Series B Preferred

 

    5EX-10.1

 Exhibit 10.1 

AMENDMENT TO EMPLOYMENT AGREEMENT 

This Amendment to Employment Agreement (this “Amendment”) is entered into as of July 15, 2022 (the “Effective
Date”), by and between Aware, Inc., a Massachusetts corporation with its principal offices located at 40 Middlesex Turnpike, Bedford, Massachusetts 01730 (together with its successors and assigns, the “Company”), and Robert
Mungovan (the “Executive”). 
 WHEREAS, the Company and the Executive entered into an Employment Agreement dated as of
October 1, 2019 (the “Employment Agreement”); 
 WHEREAS, the Company has indicated that it intends to eliminate the
position of Chief Commercial Officer; 
 WHEREAS, the Company and the Executive desire that the Executive continue to work for the Company
during a transition period from the Effective Date until August 31, 2022; and 
 WHEREAS, the Company and the Executive desire to amend
the Employment Agreement on the terms and conditions set forth herein. 
 NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, the parties agree as follows: 
 1. Definitions. Capitalized terms used herein but not defined herein
shall be given the respective meanings given to such terms in the Employment Agreement. 
 2. Term of Employment. The
Executive’s Term of employment with the Company will continue until August 31, 2022. From the Effective Date through the end of the Term, the Executive will continue to perform executive-level functions and will assist the Company in
transitioning the executive’s job duties to the new Chief Revenue Officer. The Company may, at its discretion, choose to separate the Executive from employment prior to August 31, 2022 without cause. If the Company exercises this option,
the Executive will be paid through August 31, 2022 in accordance with Section 4 of this Amendment as if he had performed services through August 31, 2022. 

3. Compensation. During the Term, the Executive will continue to receive his annual base salary as in effect on the Effective Date (the
“Base Salary”) and he will continue to be eligible to participate in or receive benefits under the Company’s employee benefit plans in effect from time to time, subject to the terms of such plans. 

4. Post-Employment - Compensation for Service Through August 31, 2022. Unless the Executive’s employment
with the Company has been terminated by the Company for Cause prior to August 31, 2022 or the Executive has voluntarily terminated his employment with the Company other than for Good Reason before August 31, 2022, and subject to the
Executive signing and delivering to the Company the Noncompete Agreement in substantially the form 

 
attached to the Employment Agreement as Exhibit A and a Release substantially in the form attached to the Employment Agreement as Exhibit B, with the Release becoming irrevocable
and fully effective, the Company shall pay the Executive an amount equal to the Executive’s Base Salary to be paid out in substantially equal installments in accordance with the Company’s payroll practice over twelve (12) months
commencing September 1, 2022. 
 5. Non-Disparagement. The Executive agrees not to make
any disparaging statements concerning the Company, any of its affiliates; any of its or their products or services; or any of its or their current or former officers, directors, shareholders, employees, clients or agents. These non-disparagement obligations shall not in any way affect the Executive’s obligation to testify truthfully in any legal proceeding. The Company agrees that its executive team and Board members will not make any
disparaging statements about the Executive. This obligation shall not in any way affect their obligation to testify truthfully in any legal proceeding. 

6. General Terms. 
 6.1.
Entire Agreement. This Amendment and the Employment Agreement and the documents referred to herein and therein constitute the entire agreement and understanding between the Company and the Executive, and supersede all prior negotiations,
agreements, arrangements, and understandings, both written or oral, between the Company and the Executive with respect to the subject matter of this Amendment and the Employment Agreement. 

6.2. Waiver or Amendment. 

(a) The waiver by either party of a breach or violation of any term or provision of this Amendment by the other party shall not operate or be
construed as a waiver of any subsequent breach or violation of any provision of this Amendment or of any other right or remedy. 
 (b) No
provision in this Amendment may be amended unless such amendment is set forth in a writing that specifically refers to this Amendment and is signed by the Executive and the Company. 

6.3. Counterparts. This Amendment may be executed in any number of counterparts and by the separate parties hereto in separate
counterparts, each of which shall be deemed to constitute an original and all of which shall be deemed to be one and the same instrument. 

6.4. Authority to Execute. The undersigned representative of the Company represents and warrants that he has full power and authority
to enter into this Amendment on behalf of the Company, and that the execution, delivery and performance of this Amendment have been authorized by the Board. Upon the Executive’s acceptance of this Amendment by signing and returning it to the
Company, this Amendment will become binding upon the Executive and the Company. 

  
 2 

 IN WITNESS WHEREOF, the parties have executed this Amendment as of the day and year first
written above. 
  

									
	 EXECUTIVE
	 		 	 AWARE, INC.

				
	/s/ Robert Mungovan	 		 	By:	 	 /s/ Robert Eckel

	Robert Mungovan	 		 		 	

  
 3

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