This Custodial and Voting Agreement (this "Agreement") is entered into as of the date of electronic consent by the parties on the funding portal (the "Portal") of Wefunder Portal, LLC ("Wefunder"), by and among Wefunder, XX Investments, LLC, a Delaware limited liability company ("Custodian"), and the undersigned investor ("Investor").
Custodian has agreed to open and maintain the Account (as defined below) for Investor and to provide other services to Investor in connection with the Account. This Agreement sets out the terms under which Custodian will provide those services to Investor and the arrangements that will apply in connection with those services.
In consideration of the mutual promises herein made and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:
In this Agreement:
Pursuant to Section 6 of the Investor Agreement, Investor agrees that Investor's purchase of the Securities will serve as a direction to the Issuer of the Securities to issue the legal interest in the Securities to Custodian, in Custodian's capacity as a securities intermediary. Contemporaneously with Custodian's receipt of the legal interests in the Securities corresponding to the Investor's purchase of the Securities, Custodian shall open and maintain the Account for the beneficial interests in the Securities beneficially held by Investor.
The balance of Investor's Account shall reflect the Securities beneficially held by Investor. A deposit is made into Investor's Account when the escrow agent sends money to the Issuer or a seller of Securities, as the case may be, and Custodian, as transfer agent, acting in accordance with the Transfer Agent Agreement, records the number of Securities that Investor beneficially holds. A withdrawal occurs when Custodian, as transfer agent, acting in accordance with the Transfer Agent Agreement, records that the Securities have been beneficially sold or transferred.
Reports relating to deposits into and withdrawals from the Account and the Account Balance will be available to Investor daily by means of a section on the Portal to which Investor may login (the "Website").
Investor hereby appoints Custodian to act as custodian of the Securities, paying agent, and voting agent with respect to the Securities in accordance with this Agreement and applicable law.
Consistent with Section 2.1 above, Custodian will be the sole holder of legal title to the Securities while Investor will hold beneficial ownership of the Securities. The Custodian will be the sole record holder of the Securities on the books and records of the Issuer. The sole dispositive record of Investor's beneficial ownership of the Securities will be in the books and records of the Custodian, in its capacity as transfer agent.
As record holder of the Securities, Custodian will receive all distributions from the Issuer with respect to the Securities. At any time after the SEC or the SEC Staff issue the Guidance, Investor hereby directs Custodian to pay out all distributions received with respect to Securities in which Investor holds a beneficial interest as follows: all distributions received shall be paid to the Investor, but only after a specified percentage (the "Specified Percentage") of such distributions is paid to XX Team LLC as compensation for services XX Team LLC provides to Investor. Investor acknowledges and agrees that Investor has authorized such payments to XX Team LLC in the Investor Agreement. The Specified Percentage may vary based on the Issuer and will be disclosed in the Issuer's Form C and posted by Issuer on the Portal.
The Investor understands and acknowledges that the Custodian will not distribute fractional Securities that are beneficially owned by the Investor. If the Custodian is required to distribute fractional Securities, it is authorized to instead distribute the cash equivalent of the value of the fractional Securities and to retain for its own account the beneficial interest ownership of the fractional Securities.
Prior to the Withdrawal Date, at every meeting of the equity or interest holders of the Issuer called with respect to any matter, and at every adjournment or postponement thereof, and on every action or approval by written consent or resolution of the equity or interest holders of the Issuer, Investor agrees that Custodian shall vote Investor's Securities, in the event Investor's Securities contain voting rights, and take any actions in connection with such voting at the direction of XX Team LLC, which holds the right to vote the Investor's Securities, in accordance with the Lead Investor Power of Attorney contained in Section 6.3 of the Investor Agreement. The parties acknowledge and agree that any voting rights with respect to the identity of the representative(s) (the "Lead Investor(s)") of XX Team LLC who will act on behalf of XX Team LLC with respect to Investor's Securities will be exercised by Investor and not by the Custodian or XX Team LLC.
Custodian serves as transfer agent with respect to Issuer's securities and is paid for its transfer agent services by Issuer. In light of the fees that the Custodian already receives, Custodian is not currently charging any additional fees to the Investor for services provided under this Agreement.
Custodian may use reasonable care in the performance of its duties under this Agreement and will only be responsible for any loss or damage suffered by Investor as a direct result of any gross negligence, fraud or willful misconduct on Custodian's part in the performance of Custodian's duties, and in which case Custodian's liability will not exceed the aggregate market value of the Securities at the time of such gross negligence, fraud or willful misconduct.
Neither Custodian, nor any of Custodian's directors, employees, agents or affiliates shall incur any liability to Investor if, by reason of any provision of any present or future law or regulation of any governmental or regulatory authority or stock exchange, or by reason of any act of God or war or terrorism or other circumstances beyond Custodian's control, Custodian is prevented or forbidden from, or would be subject to any civil or criminal penalty on account of, or are delayed in, doing or performing any act or thing which by the terms of this Agreement it is provided shall be done or performed and accordingly Custodian does not do that thing or does that thing at a later time than would otherwise be required.
Custodian may terminate this Agreement by giving not less than 60 Business Days written notice to Investor and Wefunder, provided that Custodian's termination shall only be effective if, on the date of termination, there is a successor service provider that is able to provide the same services described under this Agreement that has entered into an agreement substantially similar to this Agreement. Sections 5.1, 6.2, and 7 shall survive termination of this Agreement.
Termination shall not affect rights and obligations then outstanding under this Agreement, which shall continue to be governed by this Agreement until all obligations have been fully performed.
Custodian's duties and obligations under this Agreement do not include providing Investor with investment advice. In asking Custodian to open and maintain the Account, Investor does so in reliance upon Investor's own judgment and Custodian shall not owe to Investor any duty to exercise any judgment on Investor's behalf as to the merits or suitability of any deposits into, or withdrawals from, an Account or any actions taken at the direction of XX Team LLC.
This Agreement may not be assigned or amended without the consent of the other parties.
If any provisions of this Agreement becomes are held for any reason to be unenforceable, the remainder of this Agreement shall nevertheless remain in full force and effect.
This document represents the entire agreement, and supersedes any previous agreements, among the parties relating to the subject matter of this Agreement.
This Agreement is governed by the laws of the State of Delaware without regard to its conflicts of laws principles.
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