Exhibit 10.1

 

SHARPSPRING, INC.

 

Extension Agreement

 

This Extension Agreement (this “Agreement”) is dated March 15, 2016, by and
between SharpSpring, Inc., a Delaware corporation (the “Company”), and RCTW,
LLC, a Delaware limited liability company f/k/a SharpSpring (“RCTW”).
Capitalized terms not otherwise defined in this Agreement will have the meanings
given them by the Asset Purchase Agreement (as defined below).

 

Recitals

 

WHEREAS, on August 12, 2014, the Company and RCTW entered into an Asset Purchase
Agreement (“Asset Purchase Agreement”), under which the Company purchased and
assumed from RCTW, substantially all the assets and certain specified
liabilities of RCTW;

 

WHEREAS, pursuant to Section 2.06 of the Asset Purchase Agreement, the Company
agreed to pay RCTW an earn-out payment consisting of (a) $6,000,000 in cash; and
(b) up to $4,000,000 in the Company’s common stock, par value $0.001 per share
(the “Common Stock”), each amount subject to adjustment, and subject to the
terms and conditions as described in the Asset Purchase Agreement;

 

WHEREAS, pursuant to that certain Subscription Agreement between the parties
dated May 18], 2015 the Company (i) provided irrevocable notice of its intent to
pay in full the Earn Out Cash Component and Earn Out Stock Component pursuant to
section 2.06(b) of the Asset Purchase Agreement, (ii) prepaid $5,000,000 of the
Earn Out Cash Component in cash and Common Stock, and (iii) committed to pay the
remaining $1,000,000 of the Cash Earn Out and the $4,000,000 Stock Earn Out in
full on the date specified by the Asset Purchase Agreement, that is, April 6,
2016;

 

WHEREAS, under Agreement Section 2.06(e)(i), if (i) the Company requires
stockholder approval to issue the Shares required to satisfy the Earn Out Stock
Component, and (ii) the Company by April 6, 2016, fails to obtain the required
stockholder approval, then the Company is obligated to pay both the Earn Out
Cash Component and Earn Out Stock Component in cash on April 6, 2016;

 

WHEREAS, the Company has determined that it requires stockholder approval to
issue the Common Stock required by the Earn Out Stock Component, and that it is
unable to obtain such stockholder approval in time to pay the Stock Earn Out as
required;

 

WHEREAS, the Company has asked RCTW to extend the payment date of the Earn Out
Stock Component and RCTW, has on the terms set forth in this Extension
Agreement, has agreed to extend the payment date; and

 

   

 

 

NOW, THEREFORE, in consideration of the foregoing and the mutual promises and
covenants set forth in this Agreement, the parties agree as follows:

 

1. Company Obligations

 

a. The Company will pay RCTW $1,000,000, comprising the remainder of the Earn
Out Cash Component, on April 6, 2016, and will promptly reimburse RCTW for its
legal fees up to $5,000 associated with this Extension Agreement.

 

b. The Company, in accordance with Delaware law and the rules of NASDAQ, and as
soon as reasonably practicable after the Securities and Exchange Commission (the
“SEC”) confirms that it has no further comments on the Company’s proxy
statement, establish a record date for, duly call, give notice of, convene and
hold the 2016 annual meeting of its stockholders (the “Company Stockholder
Meeting”) for the purpose, among other things, of obtaining the stockholders’
approval permitting issuance of the Earn Out Stock Component to RCTW as
contemplated by this Extension Agreement; provided, that the Company will
distribute the proxy statement to the Company’s stockholders promptly after the
date of such confirmation and will hold the Company Stockholder Meeting as
promptly as practicable after the date of such distribution, but in any event by
May 27, 2016.

 

c. The Board of Directors of the Company will

 

i. recommend approval permitting issuance of the Earn Out Stock Component to
RCTW as contemplated by this Extension Agreement, and shall include such
recommendation in the proxy statement,

 

ii. use its reasonable best efforts to solicit proxies from the Company’s
stockholders in favor of such approval, and

 

iii. otherwise comply with all legal requirements applicable to the Company
Stockholder Meeting.

 

d. Within three (3) Business Days following the date on which stockholder
approval is obtained, the Company will cause the delivery of Shares to RCTW
pursuant to the instructions set forth on the signature page attached hereto
under the heading “Share Instructions,” with the number of Shares to be
calculated under Agreement section 2.06(a) as if the Shares were delivered on
April 6, 2016.

 

2. Grant of Extension

 

a. RCTW, in exchange for the Company’s performance of its obligations under
Section 1 of this Agreement, will demand that the Company pay cash in lieu of
the Earn Out Stock Component only if:

 

i. The Company breaches an obligation under Section 1 of this Agreement and
fails to cure the breach within three (3) Business Days of RCTW’s notice; or

 

ii. The Company for any reason fails by June 1, 2016, to issue to the number of
Shares contemplated by Section 1.d, above.

 

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b. The Company, within three (3) Business Days of receiving RCTWs notice
properly demanding cash payment under this Section 2.a, will pay RCTW $4,000,000
in immediately available cash funds in lieu of the Earn Out Stock Component.

 

c. For the avoidance of doubt, if RCTW, before delivering the notice
contemplated by Section 2.b, receives all of the Shares contemplated by Section
1.d, above, RCTW will be deemed to have waived permanently its rights to receive
cash in lieu of the Earn Out Stock Component.

 

3. Accredited Investor

 

RCTW represents and warrants to the Company that it is an “accredited investor,”
as such term is defined in Rule 501(a) of Regulation D of the Securities Act.

 

4. Miscellaneous.

 

This Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument and shall become effective
when counterparts have been signed by each party and delivered to the other
parties hereto, it being understood that all parties need not sign the same
counterpart. Execution may be made by delivery by facsimile or via electronic
format.

 

All communications hereunder, except as may be otherwise specifically provided
herein, shall be in writing and shall be mailed, hand delivered, sent by a
recognized overnight courier service such as Federal Express, or sent via
facsimile and confirmed by letter, to the party to whom it is addressed at the
following addresses or such other address as such party may advise the other in
writing:

 

To the Company: as set forth on the signature page hereto.

 

To RCTW: as set forth on the signature page hereto.

 

All notices hereunder shall be effective upon receipt by the party to which it
is addressed.

 

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If the foregoing correctly sets forth our agreement, please confirm this by
signing and returning to us the duplicate copy of this Extension Agreement.

 

  SHARPSPRING, INC.         By: /s/ Edward Lawton   Name: Edward Lawton

 

 

Aggregate Value of the Shares: $4,000,000

 

 

Title:

CFO

 

Address for Notice:

 

304 West University Ave

Gainesville, FL 32601

877-705-9362

 

RCTW, LLC         By: /s/ Richard Carlson   Name: Richard Carlson   Title:
President  

 

Address for Notice:

 

8810 SW 115th Ave

Gainesville Florida 32608

United States  

     

SHARE INSTRUCTIONS  

To be provided  

     

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