Side Letter Agreement, Jordan Turk, dated May 10, 2018

EX-10.5 3 exhibit105.htm SIDE LETTER AGREEMENT, JORDAN TURK, DATED MAY 10, 2018 Converted by EDGARwiz

May 10, 2018

Re: Side Letter Agreement regarding the Promissory Notes by and between Two Hands

Corporation (hereinafter the "Company") and Jordan Turk.

Dear Sirs:

This Side Letter Agreement ("Agreement") entered into on the date of this letter,

by and between the Company and Jordan Turk will serve to amend and add certain

terms to the Promissory Note issued by Two Hands Corporation (the "Note") for cash

advanced to the Company of $35,000 by Jordan Turk on May 9, 2018. Totalling

($35,000).

Capitalized terms used herein which are not otherwise defined shall have the same

meaning as those given to them in the Note.

For good and valuable consideration, both parties agree that the Note will

be amended as follows:

CONVERTIBLE SECURED PROMISSORY NOTE

ISSUE AMOUNT U.S. $35,000

FACE AMOUNT U.S. $42,000

INTEREST RATE 20% per year

ISSUANCE DATE May 10, 2018

FOR VALUE RECEIVED, Two Hands Corporation, a Delaware corporation (the "Company"),

hereby promises to pay Jordan Turk (the "Holder"), the Face Amount, subject to

further adjustment as described below, in such amounts, at such times and on such

terms and conditions as are specified herein (this "Note").

Article 1. Advancement and Fees

The Company agrees to pay The Holder the sum of Forty Two Thousand Dollars and

Zero Cents ($42,000.00) upon the issuance of this Note for advancements made by

the Holder.

Article 2. Maturity

The Face Amount of this Note is payable December 31, 2018 (the "Maturity

Date"). The Maturity Date of any outstanding Face Amount due on January 1, 2019

will be extended by one year. The Maturity Date of any outstanding Face Amount due

on January 1, 2020 will be extended by another one year and again on each one year

anniversary until the Note has been paid in full.

Notwithstanding any provision to the contrary in this Note, the Company may

pay in full to the Holder the Face Amount, or any balance remaining thereof,

in readily available funds at any time and from time to time without penalty

("Prepayment").

Article 3. Interest

The outstanding Face Amount of the Note shall increase by 20% on

January 1, 2019. The outstanding Face Amount of the Note shall increase by

another 20% on January 1, 2020 and again on each one year anniversary of

until the Note has been paid in full.

Article 4. Collateral

The Holder may elect to secure a portion of the Company's assets not to

exceed 200% of the Face Amount of the Note, including, but not limited to,

accounts receivable, cash, marketable securities, equipment, building, land

or inventory (the "Collateral").

Article 5. Defaults and Remedies

Article 5.1. Events of Default

An "Event of Default" or "Default" occurs if the Company does not pay the

Face Amount of this Note within five (5) business days after the Maturity

Date.

Upon the occurrence of an Event of Default, the Holder may:

* Transfer any or all of the Collateral into its name, or into the name of

its nominee or nominees;

* Exercise all corporate rights with respect to the Collateral, including,

without limitation, all rights of conversion, exchange, subscription or any

other rights, privileges or options pertaining to any shares of the Collateral as

if it were the absolute owner thereof, including, but without limitation, the

right to exchange, at its discretion, any or all of the Collateral upon the

merger, consolidation, amalgamation, reorganization, recapitalization or other

readjustment of the Company thereof, or upon the exercise by the Company of any

right, privilege or option pertaining to any of the Collateral, and, in connection

therewith, to deposit and deliver any and all of the Collateral with any

committee, depository, transfer agent, registrar or other designated agent upon

such terms and conditions as it may determine, all without liability except to

account for property actually received by it; and

* Subject to any requirement of applicable law including, for greater

certainty, the Personal Property Security Act (Ontario), sell, assign and

deliver the whole or, from time to time, any part of the Collateral at the

time held by the Holder, at any private sale or at public auction, with or

without demand, advertisement or notice of the time or place of sale or

adjournment thereof or otherwise (all of which are hereby waived, except such

notice as is required by applicable law and cannot be waived), for cash or

credit or for other property for immediate or future delivery, and for such

price or prices and on such terms as the Pledgee in its sole discretion may

determine, or as may be required by applicable law.

Article 5.2 Conversion Privilege

The company shall have the right to convert the Note into shares of the

Company's common stock (the "Common Stock") at any time prior to the

Maturity Date. The number of shares of Common Stock issuable upon the

conversion of the Note shall be determined pursuant to Article 5.3. Any

fractional shares that occur as a result of conversion shall be rounded

up or down, as the case may be, to the nearest whole share.

Article 5.3 Conversion Procedure.

(a) The Residual Amount may be converted, in whole or in part, any time and

from time to time, prior to the Maturity Date. Such conversion shall be

effectuated by the Company, issuing a signed notice of conversion (the

"Notice of Conversion"). The date on which the Notice of Conversion is

effective ("Conversion Date") shall be deemed to be the date on which the

Holder has received from the Company a facsimile or original of the

signed Notice of Conversion. Notwithstanding the above, any Notice of

Conversion received on or after 4:00 P.M. EST shall be deemed to have

Been received the following business day (receipt being via a

confirmation of the time such facsimile to the Holder is received).

(b) Common Stock to be Issued - Upon any conversion of the Note, and upon

receipt by the Holder or its attorney of a facsimile or original of the

Company's signed Notice of Conversion, the Company shall instruct its

transfer agent to issue stock certificates without restrictive legends

or stop transfer instructions, if at that time the aforementioned

registration statement described in Article 5.1 has been declared

effective (or with proper restrictive legends if the registration

statement has not as yet been declared effective), in such denominations

to be specified at conversion representing the number of shares of Common

Stock issuable upon such conversion, as applicable. In the event that

the Note is aged and deemed sellable under Rule 144, the Company

shall, upon a Notice of Conversion, instruct the transfer agent to issue

free trading certificates without restrictive legends, subject to other

applicable securities laws. The Company is responsible for all costs

associated with the issuance of the shares, excluding, but not limited

to, fees associated with the opinion letter, FedEx of the certificates

and any other costs that arise. The Company shall act as registrar and

shall maintain an appropriate ledger containing the necessary information

with respect to the Note. The Company warrants that no instructions,

other than these instructions, have been given or will be given to the

transfer agent and that the Common Stock shall otherwise be freely

resold, except as may be set forth herein or subject to applicable law.

$0.0001

(d) Nothing contained in the Note shall be deemed to establish or require the

payment of interest to the Holder at a rate in excess of the maximum rate

permitted by governing law. In the event that the rate of interest

required to be paid exceeds the maximum rate permitted by governing law,

the rate of interest required to be paid thereunder shall be

automatically reduced to the maximum rate permitted under the governing

law and such excess shall be returned with reasonable promptness by the

Holder to the Company.

(e) It shall be the Company's responsibility to take all necessary actions

and to bear all such costs to issue the Common Stock as provided herein,

including the responsibility for the delivery of an opinion letter to

the transfer agent, if so required. The Holder shall be treated as a

shareholder of record on the date Common Stock is issued to the Holder.

If the Holder shall designate another person as the entity in the name of

which the stock certificates issuable upon conversion of the Note are to

be issued prior to the issuance of such certificates, the Holder shall

provide to the Company evidence that either no tax shall be due and

payable as a result of such transfer or that the applicable tax has been

paid by the Holder or such person. Upon surrender of any Notes that are

to be converted in part, the Company shall issue to the Holder a new Note

equal to the unconverted amount, if so requested in writing by the

Holder.

(f) Within five (5) business days after receipt of the documentation referred

to above in Article 5.2, the Company shall deliver a certificate for the

number of shares of Common Stock issuable upon the conversion. In the

event the Company does not make delivery of the Common Stock as

instructed by the Holder within five (5) business days after the

Conversion Date, then in such event the Company shall pay to the Holder

one percent (1%) in cash of the dollar value of the amount remaining on

the Note after said conversion, compounded daily, per each day after the

fifth (5th) business day following the Conversion Date that the Common

Stock is not delivered to the Holder.

The Company acknowledges that its failure to deliver the Common Stock

within five (5) business days after the Conversion Date will cause the

Holder to suffer damages in an amount that will be difficult to

ascertain. Accordingly, the parties agree that it is appropriate to

include in this Note a provision for liquidated damages. The parties

acknowledge and agree that the liquidated damages provision set forth in

this section represents the parties' good faith effort to quantify such

damages, and, as such, agree that the form and amount of such liquidated

damages are reasonable and will not constitute a penalty. The payment of

liquidated damages shall not relieve the Company from its obligations to

deliver the Common Stock pursuant to the terms of this Note.

(g) The Company shall at all times reserve (or make alternative written

arrangements for reservation or contribution of shares) and have

available all Common Stock necessary to meet conversion of the entire

amount of the Note then outstanding. If, at any time the Company does

not have sufficient authorized but unissued shares of Common Stock (or

alternative shares of Common Stock as may be contributed by stockholders

of the Company) available to effect, in full, a conversion of the Note

(a "Conversion Default," the date of such default being referred to

herein as the "Conversion Default Date"), the Company shall issue to

the Holder all of the shares of Common Stock which are available, and

the Notice of Conversion as to any Note requested to be converted but

not converted (the "Unconverted Note") may be deemed null and void upon

written notice sent by the Company. The Company shall

provide notice of such Conversion Default ("Notice of Conversion

Default") to the Holder, by facsimile within three (3) business days

of such default (with the original delivered by overnight mail or two

day courier), and the Holder shall give notice to the Company by

facsimile within five (5) business days of receipt of the original

Notice of Conversion Default (with the original delivered by overnight

mail or two day courier) of its election to either nullify or confirm

the Notice of Conversion.

The Company acknowledges that its failure to maintain a sufficient

number of authorized but unissued shares of Common Stock to effect, in

full, a conversion of the Note will cause the Holder to suffer damages

in an amount that will be difficult to ascertain. Accordingly, the

parties agree that it is appropriate to include in this Note a provision

for liquidated damages.

(h) If, by the fifth (5th) business day after the Conversion Date of any

portion of the Note to be converted (the "Delivery Date"), the transfer

agent fails for any reason to deliver the Common Stock upon conversion by

the Company and after such Delivery Date, the Holder purchases, in an

open market transaction or otherwise, shares of Common Stock (the

"Covering Shares") solely in order to make delivery in satisfaction of a

sale of Common Stock by the Holder (the "Sold Shares"), which delivery

such Holder anticipated to make using the Common Stock issuable upon

conversion (a "Buy-In"), the Company shall pay to the Holder, in addition

to any other amounts due to the Holder pursuant to this Note, and not in

lieu thereof, the Buy-In Adjustment Amount (as defined below). The "Buy

In Adjustment Amount" is the amount equal to the excess, if any, of (x)

The Holder's total purchase price (including brokerage commissions, if

any) for the Covering Shares over (y) the net proceeds (after brokerage

commissions, if any) received by the Holder from the sale of the Sold

Shares. The Company shall pay the Buy-In Adjustment Amount to the Holder

in immediately available funds within five (5) business days of written

demand by the Holder. By way of illustration and not in limitation of

the foregoing, if the Holder purchases shares of Common Stock having a

total purchase price (including brokerage commissions) of $11,000 to

cover a Buy-In with respect to shares of Common Stock it sold for net

proceeds of $10,000, the Buy-In Adjustment Amount which the Company

will be required to pay to the Holder will be $1,000.

(i) The Company shall defend, protect, indemnify and hold harmless the

Holder and all of its shareholders, officers, directors, employees,

counsel, and direct or indirect investors and any of the foregoing

person's agents or other representatives (including, without limitation,

those retained in connection with the transactions contemplated by this

Agreement, collectively, the "Article 5.3(i) Indemnitees") from and

against any and all actions, causes of action, suits, claims, losses,

costs, penalties, fees, liabilities and damages, and expenses in

connection therewith (irrespective of whether any such Article 5.3(i)

Indemnitee is a party to the action for which indemnification hereunder

is sought), and including reasonable attorneys' fees and disbursements

(the "Article 5.3(i) Indemnified Liabilities"), incurred by any

Article 5.3(i) Indemnitee as a result of, or arising out of, or

relating to (i) any misrepresentation or breach of any representation

or warranty made by the Company in this Note or any other certificate,

instrument or document contemplated hereby or thereby, (ii) any breach

of any covenant, agreement or obligation of the Company contained in

this Note or any other certificate, instrument, or document contemplated

hereby or thereby, (iii) any cause of action, suit, or claim brought or

made against such Article 5.3(i) Indemnitee by a third party and arising

out of or resulting from the execution, delivery, performance, or

enforcement of the Note or any other certificate, instrument, or document

contemplated hereby or thereby, (iv) any transaction financed or to be

financed in whole or in part, directly or indirectly, with the proceeds

of the issuance of the Common Stock underlying the Note, or (v) the

status of the Holder or holder of the Note as an investor in the Company,

except insofar as any such misrepresentation, breach or any untrue

statement, alleged untrue statement, omission, or alleged omission is

made in reliance upon and in conformity with written information

furnished to the Company by the Holder which is specifically intended

by the Holder to be relied upon by the Company, including for use in

the preparation of any such registration statement, preliminary

prospectus, or prospectus, or is based on illegal trading of the Common

Stock by the Holder. To the extent that the foregoing undertaking by the

Company may be unenforceable for any reason, the Company shall make the

maximum contribution to the payment and satisfaction of each of the

Indemnified Liabilities that is permissible under applicable law. The

indemnity provisions contained herein shall be in addition to any cause

of action or similar rights the Holder may have, and any liabilities the

Holder may be subject to.

(j) Furthermore if the Company elects to convert any portion of the

outstanding balance of the Note(s) into shares of the Company's common

stock it may do so at any time at its sole option. The number of Common

Stock issued may not have the Holder's common stock Holdings exceed 9.9%

of the Company at any time.

Article 6. Mergers

The Company shall not consolidate or merge into, or transfer all or

substantially all of its assets to, any person, unless such person

assumes in writing the obligations of the Company under this Note and

immediately after such transaction no Event of Default exists. Any

reference herein to the Company shall refer to such surviving or

transferee corporation and the obligations of the Company shall terminate

upon such written assumption. Failure to do so will constitute an Event

of Default under this Note and the Holder may immediately seek to take

actions as described under Article 5 of this Note.

Article 7. Notices

Any notices, consents, waivers or other communications required or

permitted to be given under the terms of this Note must be in writing

and will be deemed to have been delivered (i) upon receipt, when

delivered personally, (ii) upon receipt, when sent by facsimile (provided

a confirmation of transmission is mechanically or electronically

generated and kept on file by the sending party), or (iii) one (1) day

after deposit with a nationally recognized overnight delivery service, in

each case properly addressed to the party to receive the same.

Article 8. Time

Where this Note authorizes or requires the payment of money or the

performance of a condition or obligation on a Saturday or Sunday or a

holiday in which the United States Stock Markets ("US Markets") are

closed ("Holiday"), or authorizes or requires the payment of money or the

performance of a condition or obligation within, before or after a period

of time computed from a certain date, and such period of time ends on a

Saturday or a Sunday or a Holiday, such payment may be made or condition

or obligation performed on the next succeeding business day, and if the

period ends at a specified hour, such payment may be made or condition

performed, at or before the same hour of such next succeeding business

day, with the same force and effect as if made or performed in accordance

with the terms of this Note. A "business day" shall mean a day on which

the US Markets are open for a full day or half day of trading.

Article 9. No Assignment

This Note shall not be assigned.

Article 10. Rules of Construction

In this Note, unless the context otherwise requires, words in the

Singular number include the plural, and in the plural include the

singular, and words of the masculine gender include the feminine and the

neuter, and when the tense so indicates, words of the neuter gender may

refer to any gender. The numbers and titles of sections contained in

this Note are inserted for convenience of reference only, and they

neither form a part of this Note nor are they to be used in the

construction or interpretation hereof. Wherever, in this Note, a

determination of the Company is required or allowed, such determination

shall be made by a majority of the Board of Directors of the Company and,

if it is made in good faith, it shall be conclusive and binding upon the

Company and the Holder.

Article 11. Governing Law

The validity, terms, performance and enforcement of this Note shall be

governed and construed by the provisions hereof and in accordance with

the laws of the State of Delaware applicable to agreements that are

negotiated, executed, delivered and performed solely in the State of

Delaware.

Article 12. Waiver

The Holder's delay or failure at any time or times hereafter to require

strict performance by Company of any undertakings, agreements or

covenants shall not waiver, affect, or diminish any right of the Holder

under this Note to demand strict compliance and performance herewith. Any

waiver by the Holder of any Event of Default shall not waive or affect

any other Event of Default, whether such Event of Default is prior or

subsequent thereto and whether of the same or a different type. None of

the undertakings, agreements and covenants of the Company contained in

this Note, and no Event of Default, shall be deemed to have been waived

by the Holder, nor may this Note be amended, changed or modified, unless

such waiver, amendment, change or modification is evidenced by an

instrument in writing specifying such waiver, amendment, change or

modification and signed by the Holder.

Article 13. Senior Obligation

The Company shall cause this Note and all other existing Notes with the

Holder ("Holder's Debt") to be senior in right of payment to all other

indebtedness of the Company.

Article 14. Miscellaneous

(a) All pronouns and any variations thereof used herein shall be deemed to

refer to the masculine, feminine, impersonal, singular or plural, as the

identity of the person or persons may require.

(b) Neither this Note nor any provision hereof shall be waived, modified,

changed, discharged, terminated, revoked or canceled, except by an

instrument in writing signed by the party effecting the same against whom

any change, discharge or termination is sought.

together shall constitute one instrument. Execution and delivery of this

Note by exchange of facsimile copies bearing the facsimile signature of a

party shall constitute a valid and binding execution and delivery of this

Note by such party. Such facsimile copies shall constitute enforceable

original documents.

(d) This Note represents the FINAL AGREEMENT between the Company and the

Holder and may not be contradicted by evidence of prior, contemporaneous,

or subsequent oral agreements of the parties, there are no unwritten oral

agreements among the parties.

(e) The execution, delivery and performance of this Note by the Company and

the consummation by the Company of the transactions contemplated hereby

and thereby will not (i) result in a violation of the Certificate of

Incorporation, any Certificate of Designations, Preferences and Rights of

any outstanding series of preferred stock of the Company or the By-laws,

or (ii) conflict with, or constitute a material default (or an event

which with notice or lapse of time or both would become a material

default) under, or give to others any rights of termination, amendment,

acceleration or cancellation of, any material agreement, contract,

indenture mortgage, indebtedness or instrument to which the Company or

any of its Subsidiaries is a party, or result in a violation of any law,

rule, regulation, order, judgment or decree, including United States

federal and state securities laws and regulations and the rules and

regulations of the principal securities exchange or trading market on

which the Common Stock is traded or listed (the "Principal Market"),

applicable to the Company or any of its Subsidiaries or by which any

property or asset of the Company or any of its Subsidiaries is bound or

affected.

Any misrepresentations shall be considered a breach of contract and

Default under this Note and the Holder may seek to take actions as

described under Article 5 of this Note.

IN WITNESS WHEREOF, the Company has duly executed this Note as of the Issuance

Date first written above.

Two Hands Corporation

Jordan Turk

________________________________

_____________________________

Name: Nadav Elituv

Name: Jordan Turk

Title: CEO,Two Hands Corporation