Exhibit 10.1
 
PURCHASE AGREEMENT
 
THIS PURCHASE AGREEMENT (“Agreement”) is made as of the 20th day of November,
2019 by and among SharpSpring, Inc., a Delaware corporation (the “Company”), and
the Investors set forth on the signature pages affixed hereto (each an
“Investor” and collectively the “Investors”).
 
Recitals
 
A.           The Company and the Investors are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D (“Regulation D”), as promulgated by the U.S.
Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933,
as amended; and
 
B.           The Investors wish to purchase, severally and not jointly, from the
Company, and the Company wishes to sell and issue to the Investors, upon the
terms and conditions stated in this Agreement, an aggregate of 555,556 shares
(the “Shares”) of the Company’s Common Stock, par value $0.001 per share
(together with any securities into which such shares may be reclassified,
whether by merger, charter amendment or otherwise, the “Common Stock”), at
purchase price of $9.00 per Share (the “Per Share Price”), for an aggregate
purchase price of Five Million Four Dollars ($5,000,004) (the “Purchase Price”);
and
 
C.           Contemporaneously herewith, the parties hereto are executing and
delivering a Registration Rights Agreement, in the form attached hereto as
Exhibit A (the “Registration Rights Agreement”), pursuant to which the Company
will agree to provide certain registration rights under the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder, and
applicable state securities laws.
 
D.           The Company has entered into an Asset Purchase Agreement in the
form attached hereto as Exhibit B (the “Asset Purchase Agreement”), pursuant to
which the Company will, on or prior to the Closing (as defined below), acquire
(the “Acquisition”) from Marin Software Incorporated (“Seller”) substantially
all of the assets and assume certain liabilities of the Seller’s Perfect
Audience business (the “Target”) for aggregate consideration not to exceed Five
Million Dollars ($5,000,000) (the “Acquisition Consideration”);
 
In consideration of the mutual promises made herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
 
1.           Definitions. In addition to those terms defined above and elsewhere
in this Agreement, for the purposes of this Agreement, the following terms shall
have the meanings set forth below:
 
 
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“Acquisition Documents” means the Asset Purchase Agreement, the Services
Agreement in substantially the form attached as exhibits to the Asset Purchase
Agreement, and any related ancillary documents entered into by the Company or
any Subsidiary in connection with the Acquisition.
 
“Acquisition Transactions” means the Acquisition and the other transactions
contemplated by the Asset Purchase Agreement and the other Acquisition
Documents.
 
“Affiliate” means, with respect to any Person, any other Person which directly
or indirectly through one or more intermediaries Controls, is controlled by, or
is under common Control with, such Person.
 
“Business Day” means a day, other than a Saturday or Sunday, on which banks in
New York City are open for the general transaction of business.
 
“Common Stock Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into,
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.
 
“Company’s Knowledge” means the actual knowledge of the executive officers (as
defined in Rule 405 under the 1933 Act) of the Company, after due inquiry.
 
“Confidential Information” means trade secrets, confidential information and
know-how (including but not limited to ideas, formulae, compositions, processes,
procedures and techniques, research and development information, computer
program code, performance specifications, support documentation, drawings,
specifications, designs, business and marketing plans, and customer and supplier
lists and related information).
 
“Control” (including the terms “controlling”, “controlled by” or “under common
control with”) means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
 
“Effective Date” means the date on which the Registration Statement is declared
effective by the SEC.
 
“Effectiveness Deadline” means the date on which the Registration Statement is
required to be declared effective by the SEC under the terms of the Registration
Rights Agreement.
 
“Insider” means each director or executive officer of the Company, any other
officer of the Company participating in the offering, any beneficial owner of
20% or more of the Company’s outstanding voting equity securities, calculated on
the basis of voting power, and any promoter connected with the Company in any
capacity on the date hereof.
 
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“Intellectual Property” means all of the following: (i) patents, patent
applications, patent disclosures and inventions (whether or not patentable and
whether or not reduced to practice); (ii) trademarks, service marks, trade
dress, trade names, corporate names, logos, slogans and Internet domain names,
together with all goodwill associated with each of the foregoing; (iii)
copyrights and copyrightable works; (iv) registrations, applications and
renewals for any of the foregoing; and (v) proprietary computer software
(including but not limited to data, data bases and documentation).
 
“Material Adverse Effect” means a material adverse effect on (i) the assets,
liabilities, results of operations, condition (financial or otherwise),
business, or prospects of the Company and its Subsidiaries taken as a whole, or
(ii) the ability of the Company or any Subsidiary, as the case may be, to
perform its obligations under the Acquisition Documents and the Transaction
Documents.
 
“Material Contract” means the Acquisition Documents and any contract, instrument
or other agreement to which the Company or any Subsidiary is a party or by which
it is bound which is material to the business of the Company and its
Subsidiaries, taken as a whole, including those that have been filed or were
required to have been filed as an exhibit to the SEC Filings pursuant to Item
601(b)(4) or Item 601(b)(10) of Regulation S-K.
 
“Nasdaq” means The Nasdaq Global Market.
 
“Person” means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture,
sole proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed herein.
 
“Registration Statement” has the meaning set forth in the Registration Rights
Agreement.
 
“Required Investors” means (i) prior to Closing each of the Investors party
hereto and (ii) from and after the Closing, (A) each Investor, who, together
with its Affiliates, beneficially owns (calculated in accordance with Rule 13d-3
under the 1934 Act) at least 25% of the Shares and (B) the Investors who,
together with their Affiliates, beneficially own (calculated in accordance with
Rule 13d-3 under the 1934 Act) at least a majority of the Shares then owned by
the Investors.
 
“SEC Filings” has the meaning set forth in Section 4.6.
 
“Subsidiary” of any Person means another Person, an amount of the voting
securities, other voting ownership or voting partnership interests of which is
sufficient to elect at least a majority of its Board of Directors or other
governing body (or, if there are no such voting interests, 50% or more of the
equity interests of which) is owned directly or indirectly by such first Person.
 
 
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“Transaction Documents” means this Agreement and the Registration Rights
Agreement.
 
“1933 Act” means the Securities Act of 1933, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.
 
“1934 Act” means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.
 
2.           Purchase and Sale of the Shares. Subject to the terms and
conditions of this Agreement, on the Closing Date, each of the Investors shall
severally, and not jointly, purchase, and the Company shall sell and issue to
each Investor, the Shares in the amount set forth opposite such Investor’s name
on the signature pages attached hereto in exchange for the portion of the
Purchase Price equal to the Per Share Price multiplied by the number of Shares
to be purchased by such Investor as specified in Section 3 below.
 
3.           Closing. Unless other arrangements have been made with a particular
Investor, upon confirmation that the other conditions to closing specified
herein have been satisfied or duly waived by the Investors, the Company shall
deliver to Lowenstein Sandler LLP, in trust, a certificate or certificates,
registered in such name or names as the Investors may designate, representing
the Shares, with instructions that such certificates are to be held for release
to the Investors only upon payment in full of the Purchase Price to the Company
by all the Investors. Unless other arrangements have been made with a particular
Investor, upon such receipt by Lowenstein Sandler LLP of the certificates, each
Investor shall promptly, but no more than one Business Day thereafter, cause a
wire transfer in same day funds to be sent to the account of the Company as
instructed in writing by the Company, in an amount representing such Investor’s
pro rata portion of the Purchase Price as set forth on the signature pages to
this Agreement. On the date (the “Closing Date”) the Company receives the
Purchase Price, the certificates evidencing the Shares shall be released to the
Investors (the “Closing”). The Closing of the purchase and sale of the Shares
shall take place at the offices of Lowenstein Sandler LLP, 1251 Avenue of the
Americas, 18th Floor, New York, New York 10020, or at such other location and on
such other date as the Company and the Investors shall mutually agree.
 
4.           Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investors that, except as set forth in the
schedules delivered herewith (collectively, the “Disclosure Schedules”):
 
4. 1                 Organization, Good Standing and Qualification. Each of the
Company and its Subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
has all requisite corporate power and authority to carry on its business as now
conducted and to own or lease its properties. Each of the Company and its
Subsidiaries is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property makes such qualification or leasing necessary
unless the failure to so qualify or to be in good standing has not had and could
not reasonably be expected to have a Material Adverse Effect. The Company’s
Subsidiaries are listed on Schedule 4.1 hereto.
 
4.2                 Authorization. The Company has full power and authority and
has taken, or caused one or more of its Subsidiaries to take, all requisite
action on the part of the Company, such Subsidiaries, and their respective
officers, directors and stockholders necessary for (i) the authorization,
execution and delivery of the Acquisition Documents and the Transaction
Documents, (ii) the authorization of the performance of all obligations of the
Company and such Subsidiaries hereunder and thereunder, and (iii) the
authorization, issuance and delivery of the Shares and the consummation of the
Acquisition Transactions. The Acquisition Documents and the Transaction
Documents constitute, or upon the execution and delivery thereof by the Company
or the Subsidiary party thereto will constitute, the legal, valid and binding
obligations of the Company or such Subsidiary, enforceable against the Company
or the Subsidiary party thereto, as the case may be, in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability, relating to or affecting
creditors’ rights generally and to general equitable principles.
 
4.3                 Capitalization. The SEC Filings set forth, as of their
respective dates (to the extent applicable) (a) the authorized capital stock of
the Company; (b) the number of shares of capital stock issued and outstanding;
(c) the number of shares of capital stock issuable pursuant to the Company’s
stock plans; and (d) the number of shares of capital stock issuable and reserved
for issuance pursuant to securities (other than the Shares) exercisable for, or
convertible into or exchangeable for any shares of capital stock of the Company.
All of the issued and outstanding shares of the Company’s capital stock have
been duly authorized and validly issued and are fully paid, nonassessable and
free of pre-emptive rights and were issued in compliance in all material
respects with applicable state and federal securities law and any rights of
third parties. All of the issued and outstanding shares of capital stock of each
Subsidiary have been duly authorized and validly issued and are fully paid,
nonassessable and free of pre-emptive rights, were issued in full compliance
with applicable state and federal securities law and any rights of third parties
and are owned by the Company, beneficially and of record, subject to no lien,
encumbrance or other adverse claim, except as described in the SEC Filings. No
Person is entitled to pre-emptive or similar statutory or contractual rights
with respect to any securities of the Company. Except as described in the SEC
Filings, there are no outstanding warrants, options, convertible securities or
other rights, agreements or arrangements of any character under which the
Company or any of its Subsidiaries is or may be obligated to issue any equity
securities of any kind and except as contemplated by this Agreement, neither the
Company nor any of its Subsidiaries is currently in negotiations for the
issuance of any equity securities of any kind. Except for the Registration
Rights Agreement, there are no voting agreements, buy-sell agreements, option or
right of first purchase agreements or other agreements of any kind among the
Company and any of the securityholders of the Company relating to the securities
of the Company held by them. Except as provided in the Registration Rights
Agreement, no Person has the right to require the Company to register any
securities of the Company under the 1933 Act, whether on a demand basis or in
connection with the registration of securities of the Company for its own
account or for the account of any other Person.
 
The issuance and sale of the Shares hereunder will not obligate the Company to
issue shares of Common Stock or other securities to any other Person (other than
the Investors) and will not result in the adjustment of the exercise,
conversion, exchange or reset price of any outstanding security.
 
The Company does not have outstanding stockholder purchase rights or “poison
pill” or any similar arrangement in effect giving any Person the right to
purchase any equity interest in the Company upon the occurrence of certain
events.
 
4.4                 Valid Issuance. The Shares have been duly and validly
authorized and, when issued and paid for pursuant to this Agreement, will be
validly issued, fully paid and nonassessable, and shall be free and clear of all
encumbrances and restrictions (other than those created by the Investors),
except for restrictions on transfer set forth in the Transaction Documents or
imposed by applicable securities laws.
 
4.5                 Consents. The execution, delivery and performance by the
Company or its Subsidiaries, as the case may be, of the Acquisition Documents
and the Transaction Documents, the consummation of the Acquisition Transactions,
and the offer, issuance and sale of the Shares require no consent of, action by
or in respect of, or filing with, any Person, governmental body, agency, or
official other than filings that have been made pursuant to applicable state
securities laws and post-sale filings pursuant to applicable state and federal
securities laws which the Company undertakes to file within the applicable time
periods. Subject to the accuracy of the representations and warranties of each
Investor set forth in Section 5 hereof, the Company has taken all action
necessary to exempt (i) the issuance and sale of the Shares, and (ii) the other
transactions contemplated by the Transaction Documents from the provisions of
any applicable stockholder rights plan or other “poison pill” arrangement, any
anti-takeover, business combination or control share law or statute binding on
the Company or to which the Company or any of its assets and properties may be
subject and any provision of the Company’s Certificate of Incorporation or
Bylaws that is or could reasonably be expected to become applicable to the
Investors as a result of the transactions contemplated hereby, including without
limitation, the issuance of the Shares and the ownership, disposition or voting
of the Shares by the Investors or the exercise of any right granted to the
Investors pursuant to this Agreement or the other Transaction Documents.
 
4.6                 Delivery of SEC Filings; Business. The Company has made
available to the Investors through the EDGAR system, true and complete copies of
the Company’s most recent Annual Report on Form 10-K for the fiscal year ended
December 31, 2018 (the “10-K”), and all other reports filed by the Company
pursuant to the 1934 Act since December 31, 2018 and prior to the date hereof
(collectively, the “SEC Filings”). The SEC Filings are the only filings required
of the Company pursuant to the 1934 Act for such period. The Company and its
Subsidiaries are engaged in all material respects only in the business described
in the SEC Filings and the SEC Filings contain a complete and accurate
description in all material respects of the business of the Company and its
Subsidiaries, taken as a whole. Since the filing of each of the SEC Filings, no
event has occurred that would require an amendment or supplement to any such SEC
Filing and as to which such an amendment or supplement has not been filed prior
to the date hereof.
 
 
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4.7                 Use of Proceeds. The net proceeds of the sale of the Shares
hereunder shall be used by the Company to pay the Acquisition Consideration and,
to the extent of any excess, for general corporate purposes.
 
4.8                 No Material Adverse Change. Since December 31, 2018, except
as identified and described in the SEC Filings or as previously disclosed to the
Investors and to be publicly disclosed prior to or in the Press Release (as
defined in Section 9.7), there has not been:
 
(i)           any change in the consolidated assets, liabilities, financial
condition or operating results of the Company from that reflected in the
financial statements included in the Company’s Quarterly Report on Form 10-Q for
the quarter ended June 30, 2019, except as contemplated by the Acquisition
Transactions and except for changes in the ordinary course of business which
have not had and could not reasonably be expected to have a Material Adverse
Effect, individually or in the aggregate;
 
(ii)           any declaration or payment of any dividend, or any authorization
or payment of any distribution, on any of the capital stock of the Company, or
any redemption or repurchase of any securities of the Company;
 
(iii)           any material damage, destruction or loss, whether or not covered
by insurance to any assets or properties of the Company or its Subsidiaries;
 
(iv)           any waiver, not in the ordinary course of business, by the
Company or any Subsidiary of a material right or of a material debt owed to it;
 
(v)           any satisfaction or discharge of any lien, claim or encumbrance or
payment of any obligation by the Company or a Subsidiary, except in the ordinary
course of business and which is not material to the assets, properties,
financial condition, operating results or business of the Company and its
Subsidiaries taken as a whole (as such business is presently conducted and as it
is proposed to be conducted);
 
(vi)           any change or amendment to the Company’s Certificate of
Incorporation or Bylaws, or material change to any material contract or
arrangement by which the Company or any Subsidiary is bound or to which any of
their respective assets or properties is subject;
 
(vii)           any material labor difficulties or labor union organizing
activities with respect to employees of the Company or any Subsidiary;
 
(viii)                      Except as contemplated by the Acquisition Documents
and the Transaction Documents, any material transaction entered into by the
Company or a Subsidiary other than in the ordinary course of business;
 
(ix)           the loss of the services of any executive officer, other key
employee, or material change in the composition or duties of the senior
management of the Company or any Subsidiary;
 
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(x)           the loss or threatened loss of any customer which has had or could
reasonably be expected to have a Material Adverse Effect; or
 
(xi)           any other event or condition of any character that has had or
could reasonably be expected to have a Material Adverse Effect.
 
4.9                 SEC Filings; S-3 Eligibility.
 
(a)           At the time of filing thereof, the SEC Filings complied as to form
in all material respects with the requirements of the 1934 Act and did not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading.
 
(b)           Each registration statement and any amendment thereto filed by the
Company since January 1, 2016 pursuant to the 1933 Act and the rules and
regulations thereunder, as of the date such statement or amendment became
effective, complied as to form in all material respects with the 1933 Act and
did not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein not misleading; and each prospectus filed pursuant to
Rule 424(b) under the 1933 Act, as of its issue date and as of the closing of
any sale of securities pursuant thereto did not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
 
(c)           The Company is eligible to use Form S-3 to register the
Registrable Securities (as such term is defined in the Registration Rights
Agreement) for sale or other disposition by the Investors as contemplated by the
Registration Rights Agreement.
 
4.10                 No Conflict, Breach, Violation or Default. The execution,
delivery and performance of the Acquisition Documents and the Transaction
Documents by the Company or the Subsidiaries party thereto, as the case may be,
the consummation of the Acquisition Transactions and the issuance and sale of
the Shares will not (i) conflict with or result in a breach or violation of (a)
any of the terms and provisions of, or constitute a default under the Company’s
Certificate of Incorporation or the Company’s Bylaws, both as in effect on the
date hereof (true and complete copies of which have been made available to the
Investors through the EDGAR system), or (b) any statute, rule, regulation or
order of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company, any Subsidiary or any of their respective
assets or properties, except for such conflicts, breaches or violations as have
not had and could not reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate, or (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become a default)
under, result in the creation of any lien, encumbrance or other adverse claim
upon any of the properties or assets of the Company or any Subsidiary or give to
others any rights of termination, amendment, acceleration or cancellation (with
or without notice, lapse of time or both) of, any Material Contract, except for
such as have not had and could not reasonably be expected to have a Material
Adverse Effect, individually or in the aggregate.
 
 
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4.11                 Tax Matters. The Company and each Subsidiary has timely
prepared and filed all tax returns required to have been filed by the Company or
such Subsidiary with all appropriate governmental agencies and timely paid all
taxes shown thereon or otherwise owed by it, other than taxes being contested in
good faith and for which adequate reserves have been made on the Company’s
financial statements included in the SEC Filings. The charges, accruals and
reserves on the books of the Company in respect of taxes for all fiscal periods
are adequate in all material respects, and there are no material unpaid
assessments against the Company or any Subsidiary nor, to the Company’s
Knowledge, any basis for the assessment of any additional taxes, penalties or
interest for any fiscal period or audits by any federal, state or local taxing
authority except for any assessment which is not material to the Company and its
Subsidiaries, taken as a whole. All taxes and other assessments and levies that
the Company or any Subsidiary is required to withhold or to collect for payment
have been duly withheld and collected and paid to the proper governmental entity
or third party when due, other than taxes being contested in good faith and for
which adequate reserves have been made on the Company’s financial statements
included in the SEC Filings. There are no tax liens or claims pending or, to the
Company’s Knowledge, threatened against the Company or any Subsidiary or any of
their respective assets or property. There are no outstanding tax sharing
agreements or other such arrangements between the Company and any Subsidiary or
other corporation or entity.
 
4.12                 Title to Properties. Except as disclosed in the SEC
Filings, the Company and each Subsidiary has good and marketable title to all
real properties and all other properties and assets owned by it, in each case
free from liens, encumbrances and defects that would materially affect the value
thereof or materially interfere with the use made or currently planned to be
made thereof by them; and except as disclosed in the SEC Filings, the Company
and each Subsidiary holds any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere with the
use made or currently planned to be made thereof by them.
 
4.13                 Certificates, Authorities and Permits. The Company and each
Subsidiary possess adequate certificates, authorities or permits issued by
appropriate governmental agencies or bodies necessary to conduct the business
now operated by it, except where the failure to so possess has not had and could
not reasonably be expected to have a Material Adverse Effect, individually or in
the aggregate, and neither the Company nor any Subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the Company or
such Subsidiary, could reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate.
 
4.14                 Labor Matters.
(a)           The Company is not a party to or bound by any collective
bargaining agreements or other agreements with labor organizations. The Company
has not violated in any material respect any laws, regulations, orders or
contract terms, affecting the collective bargaining rights of employees, labor
organizations or any laws, regulations or orders affecting employment
discrimination, equal opportunity employment, or employees’ health, safety,
welfare, wages and hours.
(b)           (i) There are no labor disputes existing, or to the Company’s
Knowledge, threatened, involving strikes, slow-downs, work stoppages, job
actions, disputes, lockouts or any other disruptions of or by the Company’s
employees, (ii) there are no unfair labor practices or petitions for election
pending or, to the Company’s Knowledge, threatened before the National Labor
Relations Board or any other federal, state or local labor commission relating
to the Company’s employees, (iii) no demand for recognition or certification
heretofore made by any labor organization or group of employees is pending with
respect to the Company and (iv) to the Company’s Knowledge, the Company enjoys
good labor and employee relations with its employees and labor organizations.
(c)           The Company is, and at all times has been, in compliance with all
applicable laws respecting employment (including laws relating to classification
of employees and independent contractors) and employment practices, terms and
conditions of employment, wages and hours, and immigration and naturalization,
except for such instances of non-compliance as have not had and could not
reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate. There are no claims pending against the Company before the Equal
Employment Opportunity Commission or any other administrative body or in any
court asserting any violation of Title VII of the Civil Rights Act of 1964, the
Age Discrimination Act of 1967, 42 U.S.C. §§ 1981 or 1983 or any other federal,
state or local Law, statute or ordinance barring discrimination in employment.
(d)           Except as disclosed in the SEC Filings, the Company is not a party
to, or bound by, any employment or other contract or agreement that contains any
severance, termination pay or change of control liability or obligation,
including, without limitation, any “excess parachute payment,” as defined in
Section 280G(b) of the Internal Revenue Code.
 
(e)           To the Company’s Knowledge, each employee of the Company and its
Subsidiaries located in the United States is a Person who is either a United
States citizen or a permanent resident entitled to work in the United States. To
the Company’s Knowledge, neither the Company nor any Subsidiary has any
liability for the improper classification of any such employee as an independent
contractor or leased employee.
 
4.15                 Intellectual Property.
 
(a)           All Intellectual Property of the Company and its Subsidiaries is
currently in compliance in all material respects with all legal requirements
(including timely filings, proofs and payments of fees) and is valid and
enforceable. No Intellectual Property of the Company or its Subsidiaries which
is necessary for the conduct of Company’s and each of its Subsidiaries’
respective businesses as currently conducted or as currently proposed to be
conducted has been or is now involved in any cancellation, dispute or
litigation, and, to the Company’s Knowledge, no such action is threatened. No
patent of the Company or its Subsidiaries has been or is now involved in any
interference, reissue, re-examination or opposition proceeding.
 
(b)           All of the licenses and sublicenses and consent, royalty or other
agreements concerning Intellectual Property which are necessary for the conduct
of the Company’s and each of its Subsidiaries’ respective businesses as
currently conducted or as currently proposed to be conducted to which the
Company or any Subsidiary is a party or by which any of their assets are bound
(other than  generally commercially available, non-custom, off-the-shelf
software application programs having a retail acquisition price of less than
$10,000 per license) (collectively, “License Agreements”) are valid and binding
obligations of the Company or its Subsidiaries that are parties thereto and, to
the Company’s Knowledge, the other parties thereto, enforceable in accordance
with their terms, except to the extent that enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws affecting the enforcement of creditors’ rights generally, and
there exists no event or condition which will result in a violation or breach of
or constitute (with or without due notice or lapse of time or both) a default by
the Company or any of its Subsidiaries under any such License Agreement, except
for such violations, breaches and defaults as have not had and could not
reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate.
 
(c)           The Company and its Subsidiaries own or have the valid right to
use all of the Intellectual Property that is necessary for the conduct of the
Company’s and each of its Subsidiaries’ respective businesses as currently
conducted or as currently proposed to be conducted and for the ownership,
maintenance and operation of the Company’s and its Subsidiaries’ properties and
assets, free and clear of all liens, encumbrances, adverse claims or obligations
to license all such owned Intellectual Property and Confidential Information,
other than licenses entered into in the ordinary course of the Company’s and its
Subsidiaries’ businesses. The Company and its Subsidiaries have a valid and
enforceable right to use all third party Intellectual Property and Confidential
Information used or held for use in the respective businesses of the Company and
its Subsidiaries.
 
(d)           The conduct of the Company’s and its Subsidiaries’ businesses as
currently conducted does not infringe or otherwise impair or conflict with
(collectively, “Infringe”) any Intellectual Property rights of any third party
or any confidentiality obligation owed to a third party, and, to the Company’s
Knowledge, the Intellectual Property and Confidential Information of the Company
and its Subsidiaries which are necessary for the conduct of Company’s and each
of its Subsidiaries’ respective businesses as currently conducted or as
currently proposed to be conducted are not being Infringed by any third party.
There is no litigation or order pending or outstanding or, to the Company’s
Knowledge, threatened or imminent, that seeks to limit or challenge or that
concerns the ownership, use, validity or enforceability of any Intellectual
Property or Confidential Information of the Company and its Subsidiaries and the
Company’s and its Subsidiaries’ use of any Intellectual Property or Confidential
Information owned by a third party, and, to the Company’s Knowledge, there is no
valid basis for the same.
 
(e)           The consummation of the Acquisition Transactions and the
transactions contemplated hereby and by the other Transaction Documents will not
result in the alteration, loss, impairment of or restriction on the Company’s or
any of its Subsidiaries’ ownership or right to use any of the Intellectual
Property or Confidential Information which is necessary for the conduct of
Company’s and each of its Subsidiaries’ respective businesses as currently
conducted or as currently proposed to be conducted.
 
7

 
 
(f)           The Company and its Subsidiaries have taken reasonable steps to
protect the Company’s and its Subsidiaries’ rights in their Intellectual
Property and Confidential Information. Each employee, consultant and contractor
who has had access to Confidential Information which is necessary for the
conduct of Company’s and each of its Subsidiaries’ respective businesses as
currently conducted or as currently proposed to be conducted has executed an
agreement to maintain the confidentiality of such Confidential Information and
has executed appropriate agreements that are substantially consistent with the
Company’s standard forms thereof. Except under confidentiality obligations,
there has been no material disclosure of any of the Company’s or its
Subsidiaries’ Confidential Information to any third party.
 
4.16                 Environmental Matters. Neither the Company nor any
Subsidiary is in violation of any statute, rule, regulation, decision or order
of any governmental agency or body or any court, domestic or foreign, relating
to the use, disposal or release of hazardous or toxic substances or relating to
the protection or restoration of the environment or human exposure to hazardous
or toxic substances (collectively, “Environmental Laws”), owns or operates any
real property contaminated with any substance that is subject to any
Environmental Laws, is liable for any off-site disposal or contamination
pursuant to any Environmental Laws, or is subject to any claim relating to any
Environmental Laws, which violation, contamination, liability or claim has had
or could reasonably be expected to have a Material Adverse Effect, individually
or in the aggregate; and there is no pending or, to the Company’s Knowledge,
threatened investigation that might lead to such a claim.
 
4.17                 Litigation. Except as disclosed in the SEC Filings, there
are no pending actions, suits or proceedings against or affecting the Company,
its Subsidiaries or any of its or their properties which are required to be
disclosed in an SEC Filing; and to the Company’s Knowledge, no such actions,
suits or proceedings are threatened or contemplated. Neither the Company nor any
Subsidiary, nor any director or officer thereof, is or since January 1, 2014 has
been the subject of any action involving a claim of violation of or liability
under federal or state securities laws or a claim of breach of fiduciary duty.
To the Company’s Knowledge, there is not pending or contemplated any
investigation by the SEC involving the Company or any current or former director
or officer of the Company. The SEC has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by the Company
or any Subsidiary under the 1933 Act or the 1934 Act.
 
4.18                 Financial Statements. The financial statements included in
each SEC Filing comply in all material respects with applicable accounting
requirements and the rules and regulations of the SEC with respect thereto as in
effect at the time of filing (or to the extent corrected by a subsequent
restatement) and present fairly, in all material respects, the consolidated
financial position of the Company and its Subsidiaries as of the dates shown and
their consolidated results of operations and cash flows for the periods shown,
and such financial statements have been prepared in conformity with United
States generally accepted accounting principles applied on a consistent basis
(“GAAP”) (except as may be disclosed therein or in the notes thereto, and, in
the case of quarterly financial statements, as permitted by Form 10-Q under the
1934 Act). Except as (i) set forth in the financial statements of the Company
included in the SEC Filings filed prior to the date hereof or (ii) expressly
contemplated by the Acquisition Transactions, neither the Company nor any of its
Subsidiaries has incurred any liabilities, contingent or otherwise, except those
incurred in the ordinary course of business, consistent (as to amount and
nature) with past practices since the date of such financial statements, none of
which, individually or in the aggregate, have had or could reasonably be
expected to have a Material Adverse Effect.
 
8

 
 
4.19                 Insurance Coverage. The Company and each Subsidiary
maintains in full force and effect insurance coverage that is customary for
comparably situated companies for the business being conducted and properties
owned or leased by the Company and each Subsidiary, and the Company reasonably
believes such insurance coverage to be adequate against all liabilities, claims
and risks against which it is customary for comparably situated companies to
insure.
 
4.20                 Compliance with Nasdaq Continued Listing Requirements. The
Company is in compliance with applicable Nasdaq continued listing requirements.
There are no proceedings pending or, to the Company’s Knowledge, threatened
against the Company relating to the continued listing of the Common Stock on
Nasdaq and the Company has not received any notice of, nor to the Company’s
Knowledge is there any basis for, the delisting of the Common Stock from Nasdaq.
 
4.21                 Brokers and Finders. No Person will have, as a result of
the transactions contemplated by the Transaction Documents, any valid right,
interest or claim against or upon the Company, any Subsidiary or an Investor for
any commission, fee or other compensation pursuant to any agreement, arrangement
or understanding entered into by or on behalf of the Company, other than as
disclosed to the Investors in writing on or prior to the date hereof.
 
4.22                 No General Solicitation. Neither the Company nor any Person
acting on its behalf has conducted any general solicitation or general
advertising (as those terms are used in Regulation D) in connection with the
offer or sale of any of the Shares.
 
4.23                 No Integrated Offering. Neither the Company nor any of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any Company security or solicited any
offers to buy any security, under circumstances that would adversely affect
reliance by the Company on Section 4(a)(2) for the exemption from registration
for the transactions contemplated hereby or would require registration of the
Securities under the 1933 Act.
 
4.24                 Rule 506 Compliance. To the Company’s knowledge, neither
the Company nor any Insider is subject to any of the “Bad Actor”
disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a
“Disqualification Event”), except for a Disqualification Event covered by Rule
506(d)(2)(i) or (d)(3) of the 1933 Act. The Company is not disqualified from
relying on Rule 506 of Regulation D under the 1933 Act (“Rule 506”) for any of
the reasons stated in Rule 506(d) in connection with the issuance and sale of
the Securities to the Investors pursuant to this Agreement. The Company has
exercised reasonable care, including without limitation, conducting a factual
inquiry that is appropriate in light of the circumstances, into whether any such
disqualification under Rule 506(d) exists. The Company has furnished to each
Investor, a reasonable time prior to the date hereof, a description in writing
of any matters relating to the Company and the Insiders that would have
triggered disqualification under Rule 506(d) but which occurred before September
23, 2013, in each case, in compliance with the disclosure requirements of Rule
506(e). The Company has exercised reasonable care, including without limitation,
conducting a factual inquiry that is appropriate in light of the circumstances,
into whether any such disqualification under Rule 506(d) would have existed and
whether any disclosure is required to be made to Investor under Rule 506(e). Any
outstanding securities of the Company (of any kind or nature) that were issued
in reliance on Rule 506 at any time on or after September 23, 2013 have been
issued in compliance with Rule 506(d) and (e).
 
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4.25                 Private Placement. The offer and sale of the Shares to the
Investors as contemplated hereby is exempt from the registration requirements of
the 1933 Act.
 
4.26                 Shell Company Status. The Company is not, and has never
been, an issuer identified in Rule 144(i)(1).
 
4.27                 Questionable Payments. Neither the Company nor any of its
Subsidiaries nor, to the Company’s Knowledge, any of their respective current or
former stockholders, directors, officers, employees, agents or other Persons
acting on behalf of the Company or any Subsidiary, has on behalf of the Company
or any Subsidiary or in connection with their respective businesses: (a) used
any corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; (b) made any direct or
indirect unlawful payments to any governmental officials or employees from
corporate funds; (c) established or maintained any unlawful or unrecorded fund
of corporate monies or other assets; (d) made any false or fictitious entries on
the books and records of the Company or any Subsidiary; or (e) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment of
any nature.
 
4.28                 Transactions with Affiliates. Except as disclosed in the
SEC Filings and except for the participation in this offering of certain
Investors that are Affiliates of a director of the Company, none of the officers
or directors of the Company and, to the Company’s Knowledge, none of the
employees of the Company is presently a party to any transaction with the
Company or any Subsidiary (other than as holders of stock options and/or
warrants, and for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any officer, director or such
employee or, to the Company’s Knowledge, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer,
director, trustee or partner.
 
4.29                 Internal Controls. The Company is in material compliance
with the provisions of the Sarbanes-Oxley Act of 2002 currently applicable to
the Company. The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets and liabilities is compared with the existing assets
and liabilities at reasonable intervals and appropriate action is taken with
respect to any differences. The Company has established disclosure controls and
procedures (as defined in 1934 Act Rules 13a-15(e) and 15d-15(e)) for the
Company and designed such disclosure controls and procedures to ensure that
material information relating to the Company, including the Subsidiaries, is
made known to the certifying officers by others within those entities,
particularly during the period in which the Company’s most recently filed
periodic report under the 1934 Act, as the case may be, is being prepared. The
Company has established internal control over financial reporting (as defined in
1934 Act Rules 13a-15(f) and 15d-15(f)) to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with GAAP. The
Company’s certifying officers have evaluated the effectiveness of the Company’s
disclosure controls and procedures and the Company’s internal control over
financial reporting (collectively, “internal controls”) as of the end of the
period covered by the most recently filed periodic report under the 1934 Act
(such date, the “Evaluation Date”). The Company presented in its most recently
filed periodic report under the 1934 Act the conclusions of the certifying
officers about the effectiveness of such internal controls based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there have
been no significant changes in the Company’s internal controls or, to the
Company’s Knowledge, in other factors that could significantly affect the
Company’s internal controls. The Company maintains and will continue to maintain
a standard system of accounting established and administered in accordance with
GAAP and the applicable requirements of the 1934 Act.
 
10

 
 
4.30                 Disclosures. Neither the Company nor any Person acting on
its behalf has provided the Investors or their agents or counsel with any
information that constitutes or might constitute material, non-public
information, other than the terms of the transactions contemplated hereby and
the terms of the Acquisition. The written materials delivered to the Investors
in connection with the transactions contemplated by the Acquisition Documents
and the Transaction Documents do not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading.
 
4.31                 Investment Company. The Company is not required to be
registered as, and is not an Affiliate of, and immediately following the Closing
will not be required to register as, an “investment company” within the meaning
of the Investment Company Act of 1940, as amended.
 
4.32                 Acquisition Transactions. The Company has provided the
Investors and their counsel with true and complete copies of the Acquisition
Documents. The representations and warranties of the Company and, to the
Company’s Knowledge, the other parties to the Asset Purchase Agreement and the
other Acquisition Documents are true and correct in all material respects. To
the Company’s Knowledge, there is no reason that the Company or the other
parties to the Asset Purchase Agreement or any other Acquisition Document, will
not be able to perform in all material respects the covenants and obligations of
the Company or such other parties set forth therein on a timely basis when due.
Other than the Acquisition Documents, there are no other agreements,
arrangements or understandings relating to the Acquisition or the other
Acquisition Transactions that create substantive obligations on the Company or
any Subsidiary. The Target does not constitute and, after giving effect to the
Acquisition Transactions, will not constitute, a “significant subsidiary” of the
Company as defined in Rule 1-02(w) of Regulation S-X under the 1933 Act. No
financial statements of the Seller, the Target or any other entity other than
the Company or pro forma financial information relating to the Acquisition will
be required to be included in or incorporated by reference into the Registration
Statement pursuant to the requirements of such Regulation S-X.
 
4.33.                 No Fiduciary. The Company acknowledges that none of the
Investors is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to this Agreement, the other Transaction
Documents and the transactions contemplated hereby and thereby, and any advice
or other guidance provided by any Investor or any of its representatives and
agents with respect to this Agreement, the other Transaction Documents and the
transactions contemplated hereby and thereby is merely incidental to such
Investor’s entry into such transactions. The Company’s decision to enter into
this Agreement and the other Transaction Documents has been based solely on the
independent evaluation by the Company and its representatives and agents.
 
5.           Representations and Warranties of the Investors. Each of the
Investors hereby severally, and not jointly, represents and warrants to the
Company that:
 
5.1                 Organization and Existence. Such Investor is a validly
existing corporation, limited partnership or limited liability company and has
all requisite corporate, partnership or limited liability company power and
authority to invest in the Shares pursuant to this Agreement.
 
5.2                 Authorization. The execution, delivery and performance by
such Investor of the Transaction Documents to which such Investor is a party
have been duly authorized and each will constitute the valid and legally binding
obligation of such Investor, enforceable against such Investor in accordance
with their respective terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability,
relating to or affecting creditors’ rights generally and to general equity
principles.
 
5.3                 Purchase Entirely for Own Account. The Shares to be received
by such Investor hereunder will be acquired for such Investor’s own account, not
as nominee or agent, and not with a view to the resale or distribution of any
part thereof in violation of the 1933 Act, and such Investor has no present
intention of selling, granting any participation in, or otherwise distributing
the same in violation of the 1933 Act without prejudice, however, to such
Investor’s right at all times to sell or otherwise dispose of all or any part of
such Shares in compliance with applicable federal and state securities laws.
Nothing contained herein shall be deemed a representation or warranty by such
Investor to hold the Shares for any period of time. Such Investor is not a
broker-dealer registered with the SEC under the 1934 Act or an entity engaged in
a business that would require it to be so registered.
 
5.4                 Investment Experience. Such Investor acknowledges that it
can bear the economic risk and complete loss of its investment in the Shares and
has such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment contemplated
hereby.
 
5.5                 Disclosure of Information. Such Investor has had an
opportunity to receive all information related to the Company requested by it
and to ask questions of and receive answers from the Company regarding the
Company, its business and the terms and conditions of the offering of the
Shares. Such Investor acknowledges receipt of copies of the SEC Filings. Neither
such inquiries nor any other due diligence investigation conducted by such
Investor shall modify, limit or otherwise affect such Investor’s right to rely
on the Company’s representations and warranties contained in this Agreement.
 
5.6                 Restricted Securities. Such Investor understands that the
Shares are characterized as “restricted securities” under the U.S. federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the 1933 Act only in certain limited circumstances.
 
5.7                 Legends. It is understood that, except as provided below,
certificates evidencing the Shares may bear the following or any similar legend:
 
(a)           “The securities represented hereby have not been registered with
the Securities and Exchange Commission or the securities commission of any state
in reliance upon an exemption from registration under the Securities Act of
1933, as amended, and, accordingly, may not be transferred unless (i) such
securities have been registered for sale pursuant to the Securities Act of 1933,
as amended, (ii) such securities are sold pursuant to Rule 144, or (iii) the
Company has received an opinion of counsel reasonably satisfactory to it that
such transfer may lawfully be made without registration under the Securities Act
of 1933, as amended.”
 
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(b)           If required by the authorities of any state in connection with the
issuance of sale of the Shares, the legend required by such state authority.
 
5.8                 Investor Status. At the time such Investor was offered the
Securities, it was, and at the date hereof it is, (i) an “accredited investor”
as defined in Rule 501(a) under the 1933 Act and (ii) an “institutional
investor” as defined in Financial Industry Regulatory Authority Rule
5110(d)(4)(B). Such Investor is not a registered broker dealer registered under
Section 15(a) of the Exchange Act, or a member of the Financial Industry
Regulatory Authority, Inc. (“FINRA”) or an entity engaged in the business of
being a broker dealer. Except as otherwise disclosed in writing to the Company
on or prior to the date of this Agreement, such Investor is not affiliated with
any broker dealer registered under Section 15(a) of the 1934 Act, or a member of
FINRA or an entity engaged in the business of being a broker dealer. Such
Investor maintains his or her principal residence (in the case of an individual)
or its principal executive office (in the case of an entity) at the location
specified on its signature page hereto.
 
5.9                 No General Solicitation. Such Investor did not learn of the
investment in the Shares as a result of any general solicitation or general
advertising.
 
5.10                 Brokers and Finders. No Person will have, as a result of
the transactions contemplated by the Transaction Documents, any valid right,
interest or claim against or upon the Company, any Subsidiary or an Investor for
any commission, fee or other compensation pursuant to any agreement, arrangement
or understanding entered into by or on behalf of such Investor.
 
5.11                 Prohibited Transactions. Since the earlier of (a) such time
as such Investor was first contacted by the Company or any other Person acting
on behalf of the Company regarding the transactions contemplated hereby or (b)
thirty (30) days prior to the date hereof, neither such Investor nor any
Affiliate of such Investor which (x) had knowledge of the Acquisition
Transactions or the transactions contemplated hereby, (y) has or shares
discretion relating to such Investor’s investments or trading or information
concerning such Investor’s investments, including in respect of the Shares, or
(z) is subject to such Investor’s review or input concerning such Affiliate’s
investments or trading (collectively, “Trading Affiliates”) has, directly or
indirectly, effected or agreed to effect any short sale, whether or not against
the box, established any “put equivalent position” (as defined in Rule 16a-1(h)
under the 1934 Act) with respect to the Common Stock, granted any other right
(including, without limitation, any put or call option) with respect to the
Common Stock or with respect to any security that includes, relates to or
derived any significant part of its value from the Common Stock or otherwise
sought to hedge its position in the Shares (each, a “Prohibited Transaction”).
Prior to the earliest to occur of (i) the termination of this Agreement, (ii)
the Effective Date or (iii) the Effectiveness Deadline, such Investor shall not,
and shall cause its Trading Affiliates not to, engage, directly or indirectly,
in a Prohibited Transaction. Such Investor acknowledges that the
representations, warranties and covenants contained in this Section 5.11 are
being made for the benefit of the Investors as well as the Company and that each
of the other Investors shall have an independent right to assert any claims
against such Investor arising out of any breach or violation of the provisions
of this Section 5.11.
 
 
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6. Conditions to Closing.
 
6.1                 Conditions to the Investors’ Obligations. The obligation of
each Investor to purchase its Shares at the Closing is subject to the
satisfaction, on or prior to the Closing Date, of the following conditions, any
of which may be waived by such Investor (as to itself only):
 
(a)           The representations and warranties made by the Company in Section
4 hereof qualified as to materiality shall be true and correct at all times
prior to and on the Closing Date, except to the extent any such representation
or warranty expressly speaks as of an earlier date, in which case such
representation or warranty shall be true and correct as of such earlier date,
and, the representations and warranties made by the Company in Section 4 hereof
not qualified as to materiality shall be true and correct in all material
respects at all times prior to and on the Closing Date, except to the extent any
such representation or warranty expressly speaks as of an earlier date, in which
case such representation or warranty shall be true and correct in all material
respects as of such earlier date. The Company shall have performed in all
material respects all obligations and covenants herein required to be performed
by it on or prior to the Closing Date.
 
(b)           The Company shall have obtained any and all consents, permits,
approvals, registrations and waivers necessary or appropriate for consummation
of the Acquisition Transactions, the purchase and sale of the Shares and the
consummation of the other transactions contemplated by the Acquisition Documents
and the Transaction Documents, all of which shall be in full force and effect.
 
(c)           The Company shall have executed and delivered the Registration
Rights Agreement.
 
(d)           The Company and each other party thereto shall have executed and
delivered all of the Acquisition Documents, substantially in the forms provided
to the Investors and their counsel.
 
(e)           The Acquisition shall have been consummated pursuant to the terms
of the Asset Purchase Agreement and the other Acquisition Documents. Without
limiting the generality of the foregoing, no increase in the Acquisition
Consideration shall have occurred, and there shall have been no amendment,
modification, waiver or supplement of the Asset Purchase Agreement or any other
Acquisition Document that is less favorable to the Company in the aggregate than
the original terms of the Asset Purchase Agreement and the other Acquisition
Documents.
 
(f)           The Company shall have filed with Nasdaq a Notification Form:
Listing of Additional Shares for the listing of the Shares on Nasdaq, a copy of
which shall have been provided to the Investors, and Nasdaq shall not have
raised any unresolved objection thereto.
 
(g)           The Company shall have received confirmation that the full
Purchase Price will be paid by the Investors upon the Closing.
 
13

 
 
(h)           No judgment, writ, order, injunction, award or decree of or by any
court, or judge, justice or magistrate, including any bankruptcy court or judge,
or any order of or by any governmental authority, shall have been issued, and no
action or proceeding shall have been instituted by any governmental authority,
enjoining or preventing the consummation of any Acquisition Transaction, the
sale of the Shares as contemplated hereby or the consummation of any other
transaction contemplated by the Acquisition Documents and the Transaction
Documents.
 
(i)           The Company shall have delivered a Certificate, executed on behalf
of the Company by its Chief Executive Officer or its Chief Financial Officer,
dated as of the Closing Date, certifying to the fulfillment of the conditions
specified in subsections (a), (b), (g), (h) and (l) of this Section 6.1.
 
(j)           The Company shall have delivered a Certificate, executed on behalf
of the Company by its Secretary, dated as of the Closing Date, certifying the
resolutions adopted by the Board of Directors of the Company, or a duly
appointed committee thereof, approving (i) the Acquisition Transactions and the
Acquisition Documents to which the Company is a party, (ii) the sale of the
Shares as contemplated by this Agreement and the consummation of the other
transaction contemplated hereby and under the other Transaction Documents, (iii)
certifying the current versions of the Certificate of Incorporation and Bylaws
of the Company, and (iv) certifying as to the signatures and authority of
persons signing the Transaction Documents and related documents on behalf of the
Company.
 
(k)           The Investors shall have received an opinion from Godfrey & Kahn
S.C., the Company’s counsel with respect to the transactions contemplated by the
Transaction Documents, dated as of the Closing Date, in form and substance
reasonably acceptable to the Investors and addressing such legal matters as the
Investors may reasonably request.
 
(l)           No stop order or suspension of trading shall have been imposed by
Nasdaq, the SEC or any other governmental or regulatory body with respect to
public trading in the Common Stock.
 
6.2                 Conditions to Obligations of the Company. The Company’s
obligation to sell and issue the Shares at the Closing is subject to the
satisfaction on or prior to the Closing Date of the following conditions, any of
which may be waived by the Company:
 
(a)           The representations and warranties made by the Investors in
Section 5 hereof, other than the representations and warranties contained in
Sections 5.3, 5.4, 5.5, 5.6, 5.7, 5.8 and 5.9 (the “Investment
Representations”), shall be true and correct in all material respects when made,
and shall be true and correct in all material respects on the Closing Date with
the same force and effect as if they had been made on and as of said date. The
Investment Representations shall be true and correct in all respects when made,
and shall be true and correct in all respects on the Closing Date with the same
force and effect as if they had been made on and as of said date. The Investors
shall have performed in all material respects all obligations and covenants
herein required to be performed by them on or prior to the Closing Date.
 
 
14

 
 
(b)           The Investors shall have executed and delivered the Registration
Rights Agreement.
 
(c)           The Investors shall have delivered the Purchase Price to the
Company.
 
6.3                 Termination of Obligations to Effect Closing; Effects.
 
(a)           The obligations of the Company, on the one hand, and the
Investors, on the other hand, to effect the Closing shall terminate as follows:
 
(i)                 Upon the mutual written consent of the Company and the
Investors;
 
(ii)                 By the Company if any of the conditions set forth in
Section 6.2 shall have become incapable of fulfillment, and shall not have been
waived by the Company;
 
(iii)                 By an Investor (with respect to itself only) if any of the
conditions set forth in Section 6.1 shall have become incapable of fulfillment,
and shall not have been waived by the Investor; or
 
(iv)                 By either the Company or any Investor (with respect to
itself only) if the Closing has not occurred on or prior to November 22, 2019;
 
provided, however, that, except in the case of clause (i) above, the party
seeking to terminate its obligation to effect the Closing shall not then be in
breach of any of its representations, warranties, covenants or agreements
contained in this Agreement or the other Transaction Documents if such breach
has resulted in the circumstances giving rise to such party’s seeking to
terminate its obligation to effect the Closing.
 
(b)           In the event of termination by the Company or any Investor of its
obligations to effect the Closing pursuant to this Section 6.3, written notice
thereof shall forthwith be given to the other Investors by the Company and the
other Investors shall have the right to terminate their obligations to effect
the Closing upon written notice to the Company and the other Investors. Nothing
in this Section 6.3 shall be deemed to release any party from any liability for
any breach by such party of the terms and provisions of this Agreement or the
other Transaction Documents or to impair the right of any party to compel
specific performance by any other party of its obligations under this Agreement
or the other Transaction Documents.
 
7.           Covenants and Agreements of the Company.
 
7.1                 [RESERVED]
 
7.2                 Reports. The Company will furnish to the Investors and/or
their assignees such information relating to the Company and its Subsidiaries as
from time to time may reasonably be requested by the Investors and/or their
assignees; provided, however, that the Company shall not disclose material
nonpublic information to the Investors, or to advisors to or representatives of
the Investors, unless prior to disclosure of such information the Company
identifies such information as being material nonpublic information and provides
the Investors, such advisors and representatives with the opportunity to accept
or refuse to accept such material nonpublic information for review and any
Investor wishing to obtain such information enters into an appropriate
confidentiality agreement with the Company with respect thereto.
 
 
15

 
 
7.3                 No Conflicting Agreements. The Company will not take any
action, enter into any agreement or make any commitment that would conflict or
interfere in any material respect with the Company’s obligations to the
Investors under the Transaction Documents.
 
7.4                 Insurance. The Company shall maintain in full force and
effect insurance coverage that is customary for comparably situated companies
for the business being conducted and properties owned or leased by the Company
and each Subsidiary, which the Company reasonably believes such insurance
coverage to be adequate against all liabilities, claims and risks against which
it is customary for comparably situated companies to insure.
 
7.5                 Compliance with Laws. The Company will comply in all
material respects with all applicable laws, rules, regulations, orders and
decrees of all governmental authorities.
 
7.6                 Listing of Underlying Shares and Related Matters. Promptly
following the date hereof, the Company shall take all necessary action to cause
the Shares to be listed on Nasdaq no later than the Closing Date. Further, if
the Company applies to have its Common Stock or other securities traded on any
other principal stock exchange or market, it shall include in such application
the Shares and will take such other action as is necessary to cause such Common
Stock to be so listed. The Company will use commercially reasonable efforts to
continue the listing and trading of its Common Stock on Nasdaq and, in
accordance, therewith, will use commercially reasonable efforts to comply in all
respects with the Company’s reporting, filing and other obligations under the
bylaws or rules of such market or exchange, as applicable.
 
7.7                 Termination of Covenants. The provisions of Sections 7.2
through 7.5 shall terminate and be of no further force and effect on the date on
which the Company’s obligations under the Registration Rights Agreement to
register or maintain the effectiveness of any registration covering the
Registrable Securities (as such term is defined in the Registration Rights
Agreement) shall terminate.
 
7.8                 Removal of Legends. In connection with any sale or
disposition of the Shares by an Investor in accordance with Rule 144 or in
accordance with any other exemption under the 1933 Act such that the purchaser
acquires freely tradable shares and upon compliance by the Investor with the
requirements of this Agreement, the Company shall cause the transfer agent for
the Common Stock (the “Transfer Agent”) to issue replacement certificates
representing the Shares sold or disposed of without restrictive legends. Upon
the earlier of (i) registration for resale pursuant to the Registration Rights
Agreement or (ii) the Shares becoming freely tradable by a non-affiliate
pursuant to Rule 144 the Company shall (A) deliver to the Transfer Agent
irrevocable instructions that the Transfer Agent shall reissue a certificate
representing shares of Common Stock without legends upon receipt by such
Transfer Agent of the legended certificates for such shares, together with
either (1) a customary representation by the Investor that Rule 144 applies to
the shares of Common Stock represented thereby or (2) a statement by the
Investor that such Investor will sell (or, in the case of any Affiliate of the
Company has sold) the shares of Common Stock represented thereby in accordance
with the Plan of Distribution contained in the Registration Statement, and (B)
cause its counsel to deliver to the Transfer Agent one or more blanket opinions
to the effect that the removal of such legends in such circumstances may be
effected under the 1933 Act. From and after the earlier of such dates, upon an
Investor’s written request, the Company shall promptly cause certificates
evidencing the Investor’s Shares to be replaced with certificates which do not
bear such restrictive legends. When the Company is required to cause an
unlegended certificate to replace a previously issued legended certificate, if:
(1) the unlegended certificate is not delivered to an Investor within two (2)
Business Days of submission by that Investor of a legended certificate and
supporting documentation to the Transfer Agent as provided above and (2) prior
to the time such unlegended certificate is received by the Investor, the
Investor, or any third party on behalf of such Investor or for the Investor’s
account, purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by the Investor of shares represented
by such certificate (a “Buy-In”), then the Company shall pay in cash to the
Investor (for the documented costs incurred either directly by such Investor or
on behalf of a third party) the amount by which the total purchase price paid
for Common Stock as a result of the Buy-In (including brokerage commissions, if
any) exceeds the proceeds received by such Investor as a result of the sale to
which such Buy-In relates. The Investor shall provide the Company written notice
indicating the amounts payable to the Investor in respect of the Buy-In.
 
 
16

 
 
7.9                 Subsequent Equity Sales; Registration Statements.
 
(a)           From the date hereof until ninety (90) days after the Closing
Date, without the consent of the Required Investors, neither the Company nor any
Subsidiary shall issue shares of Common Stock or Common Stock Equivalents.
Notwithstanding the foregoing, the provisions of this Section 7.9(a) shall not
apply to (i) the issuance of the Shares, (ii) the issuance of Common Stock or
Common Stock Equivalents upon the conversion or exercise of any securities of
the Company or a Subsidiary outstanding on the date hereof, provided that the
terms of such security are not amended after the date hereof to decrease the
exercise price or increase the Common Stock or Common Stock Equivalents
receivable upon the exercise, conversion or exchange thereof, or (iii) the
issuance of any Common Stock or Common Stock Equivalents pursuant to any Company
equity incentive plan approved by the Company’s stockholders and in place as of
the date hereof.
 
(b)           Without the prior written consent of the Required Investors, from
the date hereof until the earlier of (i) three years from the Closing Date or
(ii) such time as no Investor holds any of the Shares, the Company shall be
prohibited from effecting or entering into an agreement to effect any “Variable
Rate Transaction”. The term “Variable Rate Transaction” shall mean a transaction
in which the Company issues or sells (i) any debt or equity securities that are
convertible into, exchangeable or exercisable for, or include the right to
receive additional shares of Common Stock either (A) at a conversion, exercise
or exchange rate or other price that is based upon and/or varies with the
trading prices of or quotations for the shares of Common Stock at any time after
the initial issuance of such debt or equity securities, or (B) with a
conversion, exercise or exchange price that is subject to being reset at some
future date after the initial issuance of such debt or equity security or upon
the occurrence of specified or contingent events directly or indirectly related
to the business of the Company or the market for the Common Stock or (ii) enters
into any agreement, including, but not limited to, an equity line of credit,
whereby the Company may sell securities at a future determined price. For the
avoidance of doubt, the issuance of a security which is subject to customary
anti-dilution protections, including where the conversion, exercise or exchange
price is subject to adjustment as a result of stock splits, reverse stock splits
and other similar recapitalization or reclassification events, shall not be
deemed to be a “Variable Rate Transaction.”
 
(c)           The Company shall not, and shall use its commercially reasonable
efforts to ensure that no Affiliate of the Company shall, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the 1933 Act) that will be integrated with the offer or
sale of the Securities in a manner that would require the registration under the
1933 Act of the sale of the Shares to the Investors, or that will be integrated
with the offer or sale of the Shares for purposes of the rules and regulations
of any trading market such that it would require stockholder approval prior to
the closing of such other transaction unless stockholder approval is obtained
before the closing of such subsequent transaction.
 
17

 
 
(d)           The Company shall not, from the date hereof until ninety (90) days
after the Effective Date, prepare and file with the SEC a registration statement
relating to an offering for its own account or the account of others under the
1933 Act of any of its equity securities, other than (i) a Registration
Statement pursuant to the Registration Rights Agreement or (ii) any registration
statement or post-effective amendment to a registration statement (or supplement
thereto) relating to the Company’s employee benefit plans registered on Form S-8
or, in connection with an acquisition, on Form S-4.
 
7.10                 Equal Treatment of Investors. No consideration shall be
offered or paid to any Person to amend or consent to a waiver or modification of
any provision of any of the Transaction Documents unless the same consideration
is also offered to all of the parties to the Transaction Documents. For
clarification purposes, this provision constitutes a separate right granted to
each Investor by the Company and negotiated separately by each Investor, and is
intended for the Company to treat the Investors as a class and shall not in any
way be construed as the Investors acting in concert or as a group with respect
to the purchase, disposition or voting of Securities or otherwise.
 
8.           Survival and Indemnification.
 
8.1 Survival. The representations, warranties, covenants and agreements
contained in this Agreement shall survive the Closing of the transactions
contemplated by this Agreement.
 
8.2 Indemnification. The Company agrees to indemnify and hold harmless each
Investor and its Affiliates and their respective directors, officers, trustees,
partners, members, managers, employees and agents, and their respective
successors and assigns, from and against any and all losses, claims, damages,
liabilities and expenses (including without limitation reasonable attorney fees
and disbursements and other reasonable, documented expenses incurred in
connection with investigating, preparing or defending any action, claim or
proceeding, pending or threatened and the costs of enforcement thereof)
(collectively, “Losses”) to which such Person may become subject as a result of
any breach of representation, warranty, covenant or agreement made by or to be
performed on the part of the Company under the Transaction Documents, and will
reimburse any such Person for all such amounts as they are incurred by such
Person.
 
8.3 Conduct of Indemnification Proceedings. Any person entitled to
indemnification hereunder shall (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided that any person entitled to
indemnification hereunder shall have the right to employ separate counsel and to
participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such person unless (a) the indemnifying party
has agreed to pay such fees or expenses, or (b) the indemnifying party shall
have failed to assume the defense of such claim and employ counsel reasonably
satisfactory to such person or (c) in the reasonable judgment of any such
person, based upon written advice of its counsel, a conflict of interest exists
between such person and the indemnifying party with respect to such claims (in
which case, if the person notifies the indemnifying party in writing that such
person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such person); and provided, further, that the failure of
any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations hereunder, except to the extent that such
failure to give notice shall materially adversely affect the indemnifying party
in the defense of any such claim or litigation. It is understood that the
indemnifying party shall not, in connection with any proceeding in the same
jurisdiction, be liable for fees or expenses of more than one separate firm of
attorneys at any time for all such indemnified parties. No indemnifying party
will, except with the consent of the indemnified party, consent to entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect of such claim or litigation.
 
 
18

 
 
9.           Miscellaneous.
 
9.1                 Successors and Assigns. This Agreement may not be assigned
by a party hereto without the prior written consent of the Company or the
Investors, as applicable, provided, however, that an Investor may assign its
rights and delegate its duties hereunder in whole or in part to an Affiliate or
to a third party acquiring some or all of its Securities in a transaction
complying with applicable securities laws without the prior written consent of
the Company or the other Investors. The provisions of this Agreement shall inure
to the benefit of and be binding upon the respective permitted successors and
assigns of the parties. Without limiting the generality of the foregoing, in the
event that the Company is a party to a merger, consolidation, share exchange or
similar business combination transaction in which the Common Stock is converted
into the equity securities of another Person, from and after the effective time
of such transaction, such Person shall, by virtue of such transaction, be deemed
to have assumed the obligations of the Company hereunder, the term “Company”
shall be deemed to refer to such Person and the term “Shares” shall be deemed to
refer to the securities received by the Investors in connection with such
transaction. Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.
 
9.2                 Counterparts; Faxes. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement may
be delivered by facsimile or other form of electronic transmission, which shall
be deemed an original.
 
9.3                 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
 
9.4                 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given as hereinafter described (i) if given by personal delivery,
then such notice shall be deemed given upon such delivery, (ii) if given by
telex or telecopier, then such notice shall be deemed given upon receipt of
confirmation of complete transmittal, (iii) if given by electronic mail during
normal business hours of the recipient, and if not sent during normal business
hours, then on the recipient’s next business day, (iv) if given by mail, then
such notice shall be deemed given upon the earlier of (A) receipt of such notice
by the recipient or (B) three days after such notice is deposited in first class
mail, postage prepaid, and (v) if given by an internationally recognized
overnight air courier, then such notice shall be deemed given one Business Day
after delivery to such carrier. All notices shall be addressed to the party to
be notified at the address as follows, or at such other address as such party
may designate by ten days’ advance written notice to the other party:
 
If to the Company:
 
SharpSpring, Inc.
5001 Celebration Pointe Avenue
Suite 410
Gainseville, Florida 32608
Attention: Brad Stanczak
E-mail: brad.stanczak@sharpspring.com
 
 
19

 
 
With a copy to:
 
Godfrey & Kahn S.C.
833 East Michigan Street
Suite 1800
Milwaukee, Wisconsin 53202-5615
Attention: C.J. Wauters, Esq.
Fax: (414) 273-5198
E-mail: cwauters@gklaw.com
 
If to the Investors:
 
to the addresses set forth on the signature pages hereto.
 
9.5                 Expenses. The parties hereto shall pay their own costs and
expenses in connection herewith, except that the Company shall pay to Lowenstein
Sandler LLP a fee not to exceed $40,000, regardless of whether the transactions
contemplated hereby are consummated; it being understood that Lowenstein Sandler
LLP has only rendered legal advice to the Special Situations Funds participating
in this transaction and not to the Company or any other Investor in connection
with the transactions contemplated hereby, and that each of the Company and each
Investor has relied for such matters on the advice of its own respective
counsel. Such expenses shall be paid at the Closing or, if the Closing does not
occur, within five (5) Business Days of the termination of this Agreement. The
Company shall reimburse the Investors upon demand for all reasonable and
documented out-of-pocket expenses incurred by the Investors, including without
limitation reimbursement of attorneys’ fees and disbursements, in connection
with any amendment, modification or waiver of this Agreement or the other
Transaction Documents requested by the Company subsequent to the Closing. In the
event that legal proceedings are commenced by any party to this Agreement
against another party to this Agreement in connection with this Agreement or the
other Transaction Documents, the party or parties which do not prevail in such
proceedings shall severally, but not jointly, pay their pro rata share of the
reasonable attorneys’ fees and other reasonable and documented out-of-pocket
costs and expenses incurred by the prevailing party in such proceedings.
 
9.6                 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Required
Investors. Any amendment or waiver effected in accordance with this paragraph
shall be binding upon each holder of any Securities purchased under this
Agreement at the time outstanding, each future holder of all such Securities,
and the Company.
 
20

 
 
9.7                 Publicity. Except as set forth below, no public release or
announcement concerning the transactions contemplated hereby shall be issued by
the Company or the Investors without the prior consent of the Company (in the
case of a release or announcement by the Investors) or the Investors (in the
case of a release or announcement by the Company) (which consents shall not be
unreasonably withheld), except as such release or announcement may be required
by law or the applicable rules or regulations of any securities exchange or
securities market, in which case the Company or the Investors, as the case may
be, shall allow the Investors or the Company, as applicable, to the extent
reasonably practicable in the circumstances, reasonable time to comment on such
release or announcement in advance of such issuance. By 8:30 a.m. (New York City
time) on the trading day immediately following the execution and delivery of
this Agreement, the Company shall issue a press release (the “Press Release”)
(A) disclosing the execution of the Asset Purchase Agreement, (B) describing the
Acquisition and the consummation of the other Acquisition Transactions
contemplated by the Acquisition Documents, (C) disclosing the execution of this
Agreement and the other Transaction Documents, (D) describing the transactions
contemplated hereby and by the other Transaction Documents, and (E) disclosing
any other material nonpublic information regarding the Company or any other
information to be included in the 8-K (as defined below). No later than one
Business Day after the Closing Date, the Company shall file with the SEC a
Current Report on Form 8-K (the “8-K”) attaching the Press Release as well as
copies of the Acquisition Documents required to be filed with the SEC and the
Transaction Documents. In addition, the Company will make such other filings and
notices in the manner and time required by the SEC or Nasdaq.
 
9.8                 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereby
waive any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.
 
9.9                 Entire Agreement. This Agreement, including the Exhibits and
the Disclosure Schedules, and the other Transaction Documents constitute the
entire agreement among the parties hereof with respect to the subject matter
hereof and thereof and supersede all prior agreements and understandings, both
oral and written, between the parties with respect to the subject matter hereof
and thereof.
 
9.10                 Further Assurances. The parties shall execute and deliver
all such further instruments and documents and take all such other actions as
may reasonably be required to carry out the transactions contemplated hereby and
to evidence the fulfillment of the agreements herein contained.
 
9.11                 Construction. The parties agree that they and/or their
respective counsel have reviewed and had an opportunity to revise the
Transaction Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any
amendments thereto.
 
21

 
 
9.112                 Governing Law; Consent to Jurisdiction; Waiver of Jury
Trial. This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of New York without regard to the choice of law
principles thereof. Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York located in New
York County and the United States District Court for the Southern District of
New York for the purpose of any suit, action, proceeding or judgment relating to
or arising out of this Agreement and the transactions contemplated hereby.
Service of process in connection with any such suit, action or proceeding may be
served on each party hereto anywhere in the world by the same methods as are
specified for the giving of notices under this Agreement. Each of the parties
hereto irrevocably consents to the jurisdiction of any such court in any such
suit, action or proceeding and to the laying of venue in such court. Each party
hereto irrevocably waives any objection to the laying of venue of any such suit,
action or proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO
REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND THE
OTHER TRANSACTION DOCUMENTS OR ARISING OUT OF THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY
AS TO THIS WAIVER.
 
9.13                 Independent Nature of Investors’ Obligations and Rights.
The obligations of each Investor under any Transaction Document are several and
not joint with the obligations of any other Investor, and no Investor shall be
responsible in any way for the performance of the obligations of any other
Investor under any Transaction Document. The decision of each Investor to
purchase Securities pursuant to the Transaction Documents has been made by such
Investor independently of any other Investor. Nothing contained herein or in any
Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents. Each
Investor acknowledges that no other Investor has acted as agent for such
Investor in connection with making its investment hereunder and that no Investor
will be acting as agent of such Investor in connection with monitoring its
investment in the Securities or enforcing its rights under the Transaction
Documents. Each Investor shall be entitled to independently protect and enforce
its rights, including, without limitation, the rights arising out of this
Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose. The Company acknowledges that each of the Investors
has been provided with the same Transaction Documents for the purpose of closing
a transaction with multiple Investors and not because it was required or
requested to do so by any Investor.
[signature page follows]
 
 
22

 
 
IN WITNESS WHEREOF, the parties have executed this Agreement or caused their
duly authorized officers to execute this Agreement as of the date first above
written.
 
The Company:

SHARPSPRING, INC.
 
By:   /s/ Brad Stanczak
Name: Brad Stanczak
Title: Chief Financial Officer
 
 
 
 
 
 
 
 
23

 
 

 
The Investors:                                                                 
SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P.
 
By:  /s/ Adam Stettner
Name: Adam Stettner
Title: General Partner
 
Aggregate Purchase Price: $500,004
Number of Shares: 55,556
TIN: 13-3916551
 
Address for Notice:
527 Madison Avenue
Suite 2600
New York, NY 10022
Attn: Marianne Kelly
Telephone: 212.319.6625
Facsimile: 212.319.6677
E-mail: Marianne@ssfund.com
 
with a copy to:
 
Lowenstein Sandler LLP
65 Livingston Avenue
Roseland, NJ 07068
Attn: John D. Hogoboom, Esq.
Telephone: 973.597.2500
Facsimile:  973.597.2400
E-mail: jhogoboom@lowenstein.com
 
 
 
 
24

 
 
SPECIAL SITUATIONS TECHNOLOGY FUND, L.P.
 
 
 
By: /s/ Adam Stettner
Name: Adam Stettner
Title: General Partner
 
Aggregate Purchase Price: $319,995
Number of Shares: 35,555
TIN: 20-0051532
 
Address for Notice:
527 Madison Avenue
Suite 2600
New York, NY 10022
Attn: Marianne Kelly
Telephone: 212.319.6625
Facsimile: 212.319.6677
E-mail: Marianne@ssfund.com
 
with a copy to:
 
Lowenstein Sandler LLP
65 Livingston Avenue
Roseland, NJ 07068
Attn: John D. Hogoboom, Esq.
Telephone: 973.597.2500
Facsimile: 973.597.2400
E-mail: jhogoboom@lowenstein.com
 
 
 
25

 
 
SPECIAL SITUATIONS TECHNOLOGY FUND II, L.P.
 
By: /s/ Adam Stettner
Name: Adam Stettner
Title: General Partner
 
Aggregate Purchase Price: $1,680,003
Number of Shares: 186,667
TIN: 13-3937585
 
Address for Notice:
527 Madison Avenue
Suite 2600
New York, NY 10022
Attn: Marianne Kelly
Telephone: 212.319.6625
Facsimile: 212.319.6677
E-mail: Marianne@ssfund.com
 
with a copy to:
 
Lowenstein Sandler LLP
65 Livingston Avenue
Roseland, NJ 07068
Attn: John D. Hogoboom, Esq.
Telephone: 973.597.2500
Facsimile: 973.597.2400
E-mail: jhogoboom@lowenstein.com
 
 
 
26

 
 
GREENHAVEN ROAD CAPITAL FUND 1, LP
 
By: Greenhaven Road Investment Management, LP,
As Investment Manager
 
By:            
/s/ Scott Stewart Miller, Jr.____
Name: Scott Stewart Miller, Jr.
Title: Authorized Signatory
 
Aggregate Purchase Price: $1,235,250
Number of Shares: 137,250
TIN: 45-4741929
 
Address for Notice:
 
8 Sound Shore Drive, Suite 190
Greenwich, CT 06830
Attn: Scott Stewart Miller, Jr.
Telephone: 917.880.2051
Facsimile: 203.584.9000
E-mail: Scott@greenhavenroad.com
 
 
27

 
 
GREENHAVEN ROAD CAPITAL FUND 2, LP
 
By: Greenhaven Road Investment Management, LP,
As Investment Manager
 
By:            
/s/ Scott Stewart Miller, Jr.____
Name: Scott Stewart Miller, Jr.
Title: Authorized Signatory
 
Aggregate Purchase Price: $1,264,752
Number of Shares: 140,528
TIN: 82-3291170
 
Address for Notice:
 
8 Sound Shore Drive, Suite 190
Greenwich, CT 06830
Attn: Scott Stewart Miller, Jr.
Telephone: 917.880.2051
Facsimile: 203.584.9000
E-mail: Scott@greenhavenroad.com
 
 
28