Share
Purchase Agreement


 


BETWEEN


 


FRANKLY
INC.


 


–
and –


 


RAYCOM
MEDIA, INC.


 


August
31, 2016


 



    	 		 



    	 		 



    

 


Table
of Contents


 


	 	 	 	Page
	 	 	 	 
	Article
    1 INTERPRETATION	 	1
	1.1    	Definitions	 	1
	 	 	 	 
	Article
    2 PURCHASE AND SALE	 	2
	2.1	Agreement
    of Purchase and Sale	 	2
	2.2	Amount
    of Purchase Price	 	3
	2.3	Payment
    of Purchase Price	 	3
	2.4    	Closing
    Arrangements	 	3
	2.5    	Closing
    Documentation	 	3
	 	 	 	 
	Article
    3 representations and warranties	 	3
	3.1    	Corporation’s
    Representations and Warranties	 	3
	3.2    	Buyer’s
    Representations and Warranties	 	6
	 	 	 	 
	Article
    4 Covenants	 	7
	4.1    	Conduct
    Before Closing	 	7
	4.2    	Directors	 	7
	4.3    	Personal
    Information	 	8
	4.4    	Class
    A Restricted Voting Shares	 	9
	 	 	 	 
	Article
    5 CLOSING CONDITIONS	 	9
	5.1    	Conditions
    for the Benefit of the Buyer	 	9
	5.2    	Waiver
    or Termination by the Buyer	 	10
	5.3    	Conditions
    for the Benefit of the Corporation	 	10
	5.4    	Waiver
    or Termination by the Corporation	 	11
	5.5    	Conditions
    Precedent	 	11
	 	 	 	 
	Article
    6 survival and INDEMNIFICATION	 	12
	6.1    	Survival	 	12
	6.2    	Indemnity	 	12
	 	 	 	 
	Article
    7 general	 	 
	7.1    	Governing
    Law	 	12
	7.2    	Entire
    Agreement	 	12
	7.3    	Time
    of Essence	 	12
	7.4    	Further
    Assurances	 	13
	7.5    	Assignment
    and Enurement	 	13
	7.6    	Counterparts
    and Electronic Delivery	 	13


 



    	 		 



    	 		 



    

 


THIS
AGREEMENT is dated August 31, 2016


 


BETWEEN:


 


FRANKLY
INC., a corporation existing under the laws
of the Province of British Columbia


 


(the
“Corporation”)


 


-
and -


 


RAYCOM
MEDIA, INC., a corporation existing under
the laws of Delaware


 


(the
“Buyer”)


 


CONTEXT:


 


	A.	The
    Corporation issued to the Buyer a promissory note dated August 25, 2015 (the “Promissory Note”) in the
    principal amount of U.S.$4,000,000 (the “Principal Amount”) as partial consideration for the acquisition
    of Buyer’s interest in Gannaway Web Holdings, LLC.
	 	 
	B.	The
    Corporation will repay U.S.$3,000,000 of the Principal Amount on the Closing Date and wishes to satisfy the remaining U.S.$1,000,000
    of the Principal Amount by issuing the Purchased Shares to the Buyer.
	 	 
	C.	The
    Buyer has agreed to accept the Purchased Shares in settlement of the U.S.$1,000,000 of the balance of the Principal Amount
    subject to the terms and conditions of this Agreement.
	 	 
	D.	The
    Corporation wants to sell to the Buyer, and the Buyer wants to purchase from the Corporation, the Purchased Shares.


 


THEREFORE,
the Parties agree as follows:


 


Article
1

INTERPRETATION


 


	1.1	Definitions


 


In
this Agreement the following terms have the following meanings:


 


	1.1.1	 “Agreement”
    means this share purchase agreement as it may be confirmed, amended, modified, supplemented or restated by written agreement
    between the Parties.
	 	 
	1.1.2	“Board”
    means the board of directors of the Corporation. 
	 	 
	1.1.3	“Closing”
    means the purchase and sale of the Purchased Shares pursuant to the terms of this Agreement.
	 	 
	1.1.4	“Closing
    Date” means August 31, 2016 or such other date as agreed by the Corporation and the Buyer.



 



    	 		 



    	 	- 2 -	 



    

 


	1.1.5	“Closing
    Time” means the time at which the Closing occurs on the Closing Date.
	 	 
	1.1.6	“Common
    Shares” means the common shares of the Corporation. 
	 	 
	1.1.7	“Governmental
    Authority” means:


 


	 	1.1.7.1	any
    federal, provincial, state, local, municipal, regional, territorial, aboriginal, or other government, governmental or public
    department, branch, ministry, or court, domestic or foreign, including any district, agency, commission, board, arbitration
    panel or authority and any subdivision of any of them exercising or entitled to exercise any administrative, executive, judicial,
    ministerial, prerogative, legislative, regulatory, or taxing authority or power of any nature; and
	 	 	 
	 	1.1.7.2	any
    quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of
    any of them, and any subdivision of any of them.


 


	1.1.8	“Material
    Adverse Effect” means a change, effect, event, circumstance, fact or occurrence that has a material adverse effect
    on the financial condition, business, assets, liabilities or results of operations of the Corporation and its subsidiaries,
    taken as a whole, other than any change (a) relating to the economy, political conditions or securities markets in general;
    (b) relating to any generally applicable change in applicable laws or in applicable generally accepted accounting principles;
    (c) relating to this Agreement and other transactions contemplated by this Agreement or the announcement hereof; (d) relating
    to changes affecting generally the industry in which the Corporation and/or its subsidiaries conduct business; and (e) relating
    to changes in currency exchange rates.
	 	 
	1.1.9	“Permits”
    is defined in Section 3.1.16.1.
	 	 
	1.1.10	“Principal
    Amount” is defined in the recitals to this Agreement. 
	 	 
	1.1.11	“Promissory
    Note” is defined in the recitals to this Agreement. 
	 	 
	1.1.12	“Purchase
    Price” is defined in Section 2.2.
	 	 
	1.1.13	“Purchased
    Shares” means 2,553,400 Common Shares of the Corporation.
	 	 
	1.1.14	“Parties”
    means collectively the Corporation and the Buyer and “Party” means any one of them.
	 	 
	1.1.15	“TSXV”
    means the TSX Venture Exchange Inc.


 


Article
2

PURCHASE AND SALE


 


	2.1	Agreement
    of Purchase and Sale


 


Subject
to the terms and conditions of this agreement, on the Closing Date, the Corporation will issue and sell, and the Buyer will purchase,
the Purchased Shares.


 



    	 		 



    	 	- 3 -	 



    

 


	2.2	Amount
    of Purchase Price


 


The
purchase price payable by the Buyer to the Corporation for the Purchased Shares will be CDN$1,276,700 (the “Purchase
Price”), which is the Canadian dollar equivalent of U.S.$1,000,000, being the balance of the Principal Amount outstanding
on the Closing Date.


 


	2.3	Payment
    of Purchase Price


 


The
Buyer will satisfy the Purchase Price at the Closing by cancelling U.S.$1,000,000 of the Principal Amount of the Promissory Note.


 


	2.4	Closing
    Arrangements


 


The
Closing will occur at the Closing Time at the offices of Gowling WLG (Canada) LLP, Suite 1600, One First Canadian Place, 100 King
St. W. Toronto, ON M5X 1G5, when the Corporation will deliver share certificates representing the Purchased Shares to the Buyer.


 


	2.5	Closing
    Documentation


 


On
the Closing Date the Corporation and the Buyer will provide each other with the documents set out in Section 5.1.4 and Section
5.3.2, respectively.


 


Article
3

representations and warranties


 


	3.1	Corporation’s
    Representations and Warranties


 


The
Corporation represents and warrants to the Buyer, as at the date this Agreement is executed by the Corporation and at the Closing
Time, as follows, and acknowledges that the Buyer is relying on the representations and warranties given by the Corporation in
this Agreement, despite any investigation made by or on behalf of the Buyer that:


 


	3.1.1	the
    Corporation is a corporation duly incorporated and validly existing under the laws of the Province of British Columbia;
	 	 
	3.1.2	the
    execution, delivery and performance of this Agreement has been duly authorized by all necessary corporate action (other than
    shareholder approval which will be obtained prior to the Closing Date) on the part of the Corporation;
	 	 
	3.1.3	each
    of the Corporation and its subsidiaries has all necessary corporate power, authority and capacity to own or lease its assets
    and to carry on its business as currently being conducted;
	 	 
	3.1.4	the
    Corporation has all necessary corporate power, authority and capacity to enter into and perform its obligations under this
    Agreement;
	 	 
	3.1.5	this
    Agreement has been duly executed and delivered by the Corporation. This Agreement constitutes a legal, valid and binding obligation
    of the Corporation, enforceable against the Corporation in accordance with its terms, provided that (i) specific performance,
    injunction and other equitable remedies are discretionary and, in particular, may not be available where damages are considered
    an adequate remedy; and (ii) enforcement may be limited by bankruptcy, insolvency, liquidation, reorganization and other laws
    generally affecting enforceability of creditors’ rights;



 



    	 		 



    	 	- 4 -	 



    

 


	3.1.6	the
    entering into of this Agreement by the Corporation and, subject to the receipt of shareholder approval and TSXV approval,
    the performance by the Corporation of the transactions contemplated by this Agreement do not and will not result in the violation
    of any of the terms and provisions of any law, judgment or order applicable to the Corporation and its subsidiaries, or the
    constating documents of the Corporation or its subsidiaries, or any agreement, written or oral, to which the Corporation or
    any of its subsidiaries may be a party or by which the Corporation or any of its subsidiaries is or may be bound;
	 	 
	3.1.7	the
    authorized capital of the Corporation consists of an unlimited number of Common Shares and an unlimited number of Class A
    restricted voting shares. As at the date hereof, there are 22,078,729 Common Shares and 10,014,602 Class A restricted voting
    shares validly issued and outstanding as fully paid and non-assessable shares of the Corporation. All securities of the Corporation
    have been issued in compliance with applicable laws and have not been issued in violation of any pre-emptive rights or other
    contractual rights to purchase securities granted by the Corporation;
	 	 
	3.1.8	the
    Purchased Shares have been duly and validly authorized and, at the Closing Date, upon cancellation of the Promissory Note,
    the Purchased Securities will be validly issued as fully paid and non-assessable shares of the Corporation;
	 	 
	3.1.9	the
    issued and outstanding Common Shares (excluding the Purchased Shares) are listed and posted for trading on the TSXV and the
    Corporation is in compliance in all material respects with the rules and regulations of the TSXV other than the requirement
    to have independent directors on its Board and audit committee. The TSXV has conditionally accepted notice of the sale of
    the Purchased Shares pursuant to the terms of this Agreement, subject to the conditions set out in the letter from the TSXV
    dated August 25, 2016 in respect of the transactions contemplated by this Agreement;
	 	 
	3.1.10	the
    Corporation is a “reporting issuer” in British Columbia, Alberta and Ontario and is in compliance in all material
    respects with applicable securities laws in those jurisdictions;
	 	 
	3.1.11	no
    securities commission or comparable authority has issued any order preventing or suspending the distribution of the Common
    Shares or the trading of securities of the Corporation generally and, to the Corporation’s knowledge, there is no investigation,
    inquiry or proceeding for this purpose that has been commenced or which is pending, contemplated or threatened;
	 	 
	3.1.12	Equity
    Financial Trust Company at its principal office in Toronto is the duly appointed registrar and transfer agent of the Corporation
    with respect to the Common Shares;
	 	 
	3.1.13	the
    Corporation has not retained any financial advisor, broker, agent or finder, nor entered into any agreement entitling any
    person to any broker’s commission or finder’s fee, in respect of the transactions contemplated by this Agreement;
	 	 
	3.1.14	each
    of the Corporation and its subsidiaries has conducted and is conducting its business in compliance in all material respects
    with all applicable laws other than the requirement to have independent directors on its Board and audit committee;



 



    	 		 



    	 	- 5 -	 



    

 


	3.1.15	each
    of the Corporation and its subsidiaries owns, possesses and has good and marketable title to all of the assets necessary for
    it to carry on its business as it is currently operated;
	 	 
	3.1.16	except
    as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect:


 


	 	3.1.16.1	the
    Corporation owns, possesses or has obtained all authorizations, registrations, permits, approvals, grants, licences, rights
    or privileges, in each case issued or granted by any provincial, state, municipal, federal or other governmental or regulatory
    authority, agency or body, required to enable the Corporation to carry on its business as currently conducted and to enable
    it to own, lease and operate its assets (the “Permits”); and
	 	 	 
	 	3.1.16.2	all
    the Permits are valid and subsisting, in full force and effect, and the Corporation is not in default or breach of any Permit,
    and no proceeding is pending or, to the knowledge of the Corporation, threatened, to revoke or limit any Permit;


 


	3.1.17	except
    as would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the business,
    operations or financial condition of the Corporation:


 


	 	3.1.17.1	the
    Corporation is not in default or alleged to be in default in the performance of any term or obligation to be performed by
    it under any agreement or instrument to which the Corporation is a party or by which the Corporation or its assets are bound;
    and
	 	 	 
	 	3.1.17.2	no
    event, condition or occurrence exists that, after notice or lapse of time or both, would constitute a default under any such
    agreement or instrument;


 


	3.1.18	the
    Corporation has filed on SEDAR all documents required to be filed by the Corporation under applicable securities laws in British
    Columbia, Alberta and Ontario;
	 	 
	3.1.19	the
    Corporation has properly completed and filed on a timely basis all tax returns required to be filed by it and all federal,
    state, provincial, local and foreign income, profits, franchise, sales, use, occupancy, excise and other taxes and assessments
    (including interest and penalties) that are or may become payable by or due from the Corporation have been fully paid when
    due or adequate provisions have been made in respect of them in the books and records of the Corporation;
	 	 
	3.1.20	the
    sale of the Purchased Shares will be exempt from prospectus requirements under applicable securities laws pursuant to Section
    2.14 of National Instrument 45-106 – Prospectus Exemptions of the Canadian Securities Administrators; and
	 	 
	3.1.21	all
    “material facts” (as such term is defined in the Securities Act (Ontario)) relating to the Corporation,
    its subsidiaries, its business, assets and liabilities have been disclosed to the Buyer.


 



    	 		 



    	 	- 6 -	 



    

 


	3.2	Buyer’s
    Representations and Warranties


 


The
Buyer represents and warrants to the Corporation that:


 


	3.2.1	the
    Buyer is a corporation duly incorporated and validly existing under the laws of Delaware; 
	 	 
	3.2.2	the
    execution, delivery and performance of this agreement has been duly authorized by all necessary corporate action on the part
    of the Buyer;
	 	 
	3.2.3	the
    execution and delivery of this Agreement and performance by the Buyer of the transactions contemplated herein have been duly
    authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part
    of the Buyer. This Agreement and related documents to which it is a party has been duly executed by the Buyer, and when delivered
    by the Buyer in accordance with the terms hereof, will constitute the valid and legally binding obligation of the Buyer, enforceable
    against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy,
    insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights
    generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
    remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law;
	 	 
	3.2.4	the
    Buyer is acquiring the Purchased Shares as principal for its own account and has no direct or indirect arrangement or understandings
    with any other persons to distribute or regarding the distribution of such Purchased Shares (this representation and warranty
    not limiting such Buyer’s right to sell the Purchased Shares in compliance with applicable securities laws);
	 	 
	3.2.5	at
    the time the Buyer was offered the Purchased Shares, it was, and as of the date hereof it is: (i) an “accredited investor”
    as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the United States Securities Act of 1933 or (ii)
    a “qualified institutional buyer” as defined in Rule 144A(a) under the United States Securities Act of 1933;
	 	 
	3.2.6	the
    Buyer, either alone or together with its representatives, has such knowledge, sophistication and experience in business and
    financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Purchased Shares,
    and has so evaluated the merits and risks of such investment. The Buyer is able to bear the economic risk of an investment
    in the Purchased Shares and, at the present time, is able to afford a complete loss of such investment; 
	 	 
	3.2.7	the
    Buyer acknowledges that it has been afforded, (i) the opportunity to ask such questions as it has deemed necessary of, and
    to receive answers from, representatives of the Corporation concerning the terms and conditions of the offering of the Purchased
    Shares and the merits and risks of investing in the Purchased Shares; (ii) access to information about the Corporation and
    its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to
    evaluate its investment; and (iii) the opportunity to obtain such additional information that the Corporation possesses or
    can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect
    to the investment; 



 



    	 		 



    	 	- 7 -	 



    

 


	3.2.8	other
    than to other Persons party to this Agreement or to the Buyer’s representatives, including, without limitation, its
    officers, directors, partners, legal and other advisors, employees, agents and Affiliates, the Buyer has maintained the confidentiality
    of all disclosures made to it in connection with this Agreement and the transactions contemplated herein (including the existence
    and terms of this Agreement); and
	 	 
	3.2.9	other
    than consummating the transactions contemplated hereunder, the Buyer has not, nor has any Person acting on behalf of or pursuant
    to any understanding with the Buyer, directly or indirectly executed any purchases or sales, including short sales, of the
    securities of the Corporation during the period commencing as of the time that such Buyer first received a term sheet (written
    or oral) from the Corporation or any other Person representing the Corporation setting forth the material pricing terms of
    the transactions contemplated hereunder and ending immediately prior to the execution hereof.


 


Article
4

Covenants


 


	4.1	Conduct
    Before Closing


 


Until
the Closing Date, the Corporation will:


 


	4.1.1	conduct
    its business in the ordinary course and maintain the goodwill of its business;
	 	 
	4.1.2	not
    to enter into any contract, commitment or transaction pertaining to its business except as necessary to conduct its business
    in the ordinary course;
	 	 
	4.1.3	not
    to increase wages, salaries, benefits or other compensation of any of its employees except in the ordinary course of business;
    and
	 	 
	4.1.4	not
    to sell, dispose of or encumber any of its assets other than inventories used in the ordinary course of business, other than
    granting Silicon Valley Bank a first-priority security interest in the Corporation’s and its subsidiaries’ accounts
    receivables and cash in connection with a revolving credit line to be extended by Silicon Valley Bank to the Corporation and/or
    its subsidiaries.


 


	4.2	Directors
    


 


	4.2.1	The
    Board currently consists of four directors, namely, Steve Chung, Choong Sik Hyun, Jung Woo Sung and Joseph G. Fiveash, III.
    The Corporation hereby covenants to enlarge the Board to seven directors within 90 days of the Closing Date, subject to shareholder
    approval. Two of the three vacant Board seats resulting from enlargement of the Board will be independent directors and selected
    by the Board, subject to shareholder approval. The Buyer will have the right to designate the third director resulting from
    enlargement of the Board who, subject to TSX-V Personal Information Form clearance, will be appointed by the Board. Additionally,
    prior to the Closing Date, the Corporation will have received a Board resignation from Jung Woo Sung, such resignation to
    be effective upon the date of TSX-V Personal Information Form clearance of a replacement director. The Buyer will work together
    with the Corporation to find a mutually agreeable replacement director who will be an independent director and, subject to
    TSX-V clearance, shall be appointed by the Board to replace Jung Woo Sung.



 



    	 		 



    	 	- 8 -	 



    

 


	4.2.2	The
    Corporation hereby agrees that following the Closing Date:


 


	 	4.2.2.1	the
    Corporation covenants and agrees that so long as the Buyer owns Common Shares representing not less than 20% of the issued
    and outstanding Common Shares calculated on a fully-diluted basis, a total of two individuals, (one of whom is independent
    of the Corporation) designated by the Buyer (the “Buyer Nominees”) will be named, subject to TSX-V Personal
    Information Form clearance, as management’s nominees for election as directors in the Corporation’s annual management
    proxy circular mailed to the Corporation’s shareholders;
	 	 	 
	 	4.2.2.2	in
    addition to the nomination rights provided in Section 4.2.2.1, the Corporation covenants and agrees that so long as the Buyer
    owns Common Shares representing not less than 20% of the issued and outstanding Common Shares calculated on a fully-diluted
    basis, one individual who is independent of the Corporation for purposes of applicable securities law shall be designated
    by the Board (the “Independent Nominee”) and subsequently approved by the Buyer will be named, subject
    to TSX-V Personal Information Form clearance, as a management nominee for election as director in the Corporation’s
    annual management proxy circular mailed to the Corporation’s shareholders. If the Buyer does not approve of such Independent
    Nominee, the Board shall designate a suitable replacement until both the Board and the Buyer have agreed on such independent
    nominee;
	 	 	 
	 	4.2.2.3	subject
    to applicable laws and the rules and policies of any stock exchange or quotation system on which any securities of the Corporation
    are listed and posted for trading or quoted, as applicable, at the relevant time, in the event that a vacancy on the Board
    is created as a result of a Buyer Nominee’s death, resignation, disqualification or removal from the Board, then the
    Buyer shall have seven days from the date of such event to select another individual as the Buyer Nominee. Following receipt
    of such notice, the members of the Board (or an appropriate committee thereof) shall review the qualifications and credentials
    of such replacement Buyer Nominee, in good faith in the exercise of their duties, and determine whether to recommend the appointment
    of the individual to the Board to fill the vacancy. In the event that such replacement Buyer Nominee is appointed as a director,
    such individual shall serve on the Board. In the event such individual is not appointed to the Board, the Board shall promptly
    notify the Buyer and the Buyer shall be entitled to select another individual who shall then be subject to approval in accordance
    with the procedures set forth above, and so on as necessary until the vacancy shall be filled with a Buyer Nominee. 


 


	4.3	Personal
    Information


 


The
Buyer consents to the collection by the Corporation of personal information about the Buyer (as defined under applicable privacy
laws, the “Personal Information”) for the purpose of completing the transactions contemplated by this Agreement.
The Buyer consents to the Corporation retaining the Personal Information for as long as permitted or required by law or business
practices. The Buyer acknowledges that the Corporation may use the Personal Information: (i) internally (for the purpose of managing
the relationships between and contractual obligations of the Corporation and the Buyer); (ii) for income tax-related purposes;
(iii) to demonstrate compliance with securities laws; and (iv) in record books prepared in respect of the transactions contemplated
by this Agreement. The Buyer acknowledges that the Corporation may disclose the Personal Information: (i) to the Canada Revenue
Agency; (ii) to professional advisers of the Corporation in connection with the performance of their professional services; (iii)
as required by securities regulatory authorities, stock exchanges and other regulatory bodies; (iv) to a governmental or other
authority to which the disclosure is required by court order or subpoena compelling that disclosure (if there is no reasonable
alternative to that disclosure); (v) to a court determining the rights of the parties under this Agreement; (vi) to any other
parties involved in the transactions contemplated by this Agreement, including legal counsel; (vii) to the Corporation’s
registrar and transfer agent; and (viii) as otherwise required or permitted by law. The Buyer consents to the use and disclosure
of the Personal Information set out in this Section 4.3.


 



    	 		 



    	 	- 9 -	 



    

 


	4.4	Class
    A Restricted Voting Shares


 


The
Corporation hereby covenants to release the Buyer’s Class A restricted voting shares from any lock-up arrangements between
the Corporation and the Buyer and shall use best efforts to convert the Buyer’s Class A restricting voting shares of the
Corporation into Common Shares to the extent not so converted by the Closing Time and approved for listing on the TSXV, provided
that the Buyer delivers the original share certificate representing its Class A restricted voting shares of the Corporation to
the Transfer Agent along with a letter requesting that such Class A restricted voting shares be converted into Common Shares.


 


Article
5

CLOSING CONDITIONS


 


	5.1	Conditions
    for the Benefit of the Buyer


 


The
obligation of the Buyer to complete the purchase of the Purchased Shares will be subject to the fulfilment of the following conditions
at or before the Closing Time:


 


	5.1.1	Representations,
    Warranties and Covenants. The representations and warranties of the Corporation made in this Agreement, and any other
    agreement or document delivered pursuant to this Agreement, will be true and accurate at the Closing Time with the same force
    and effect as though those representations and warranties had been made as of the Closing Time, and for certainty, any representations
    and warranties made as at a date before the Closing Time will be deemed to be made as at the Closing Time. The Corporation
    will have complied with all covenants and agreements to be performed or caused to be performed by it under this Agreement,
    and any other agreement or document delivered pursuant to this Agreement, at or before the Closing Time. In addition, if the
    Closing Date is a date other than the date hereof, the Corporation will have delivered to the Buyer a certificate of a senior
    officer of the Corporation confirming the same. The receipt of that certificate and the completion of the Closing will not
    be deemed to constitute a waiver of any of the representations, warranties or covenants of the Corporation contained in this
    Agreement, or in any other agreement or document delivered pursuant to this Agreement. Those representations, warranties and
    covenants will continue in full force and effect as provided in Article 6.
	 	 
	5.1.2	Consents.
    All filings, notifications and consents with, to or from third parties including shareholder approval and TSXV approval
    will have been made, given or obtained on terms acceptable to the Buyer, acting reasonably, so that the transactions contemplated
    by this Agreement may be completed without resulting in the violation of, or a default under, or any termination, amendment
    or acceleration of any obligation under any licence, Permit, or contract of or affecting the business of the Corporation or
    any of its subsidiaries.



 



    	 		 



    	 	- 10 -	 



    

 


	5.1.3	Closing
    of Loan Transaction. The Corporation shall have closed the debt financing transaction with the Buyer to repay the outstanding
    U.S.$15,000,000 of promissory notes issued by Corporation to the sellers in connection with Corporation’s purchase of
    its Frankly Media LLC subsidiary, excluding U.S.$1,000,000 of the principal amount of the Promissory Note owing to the Buyer
    (plus interest and other amounts owing in respect thereof) under the Promissory Note (the “Loan Transaction”).
	 	 
	5.1.4	Deliveries.
    The Corporation will have delivered to the Buyer the following in form and substance satisfactory to the Buyer:


 


	 	5.1.4.1	a
    favourable opinion of counsel to the Corporation, in the form acceptable to the Buyer and its counsel;
	 	 	 
	 	5.1.4.2	duly
    executed resignation from Jung Woo Sung;
	 	 	 
	 	5.1.4.3	the
    consents referred to in Section 5.1.2;
	 	 	 
	 	5.1.4.4	original
    share certificates representing the Purchased Shares;
	 	 	 
	 	5.1.4.5	a
    code escrow agreement duly executed by the Corporation substantially in the form acceptable to the Buyer and its counsel (the
    “Code Escrow Agreement”), together with evidence satisfactory to Buyer that the Source Code (as defined
    in the Code Escrow Agreement) has been deposited with the Escrow Agent (as defined in the Code Escrow Agreement); and
	 	 	 
	 	5.1.4.6	all
    documentation and other evidence reasonably requested by the Buyer in order to establish the due authorization and completion
    of the transactions contemplated by this Agreement, including the taking of all corporate proceedings by the boards of directors
    and shareholders of the Corporation and the Corporation required to effectively carry out the obligations of the Corporation
    and the Corporation pursuant to this Agreement.


 


	5.2	Waiver
    or Termination by the Buyer


 


The
conditions contained in Section 5.1 are inserted for the exclusive benefit of the Buyer and may be waived in whole or in part
by the Buyer at any time without prejudice to any of its rights of termination in the event of non-performance of any other condition
in whole or in part. If any of the conditions contained in Section 5.1 are not fulfilled or complied with by the time that is
required under this Agreement, the Buyer may, at or before the Closing Time, terminate this Agreement by notice in writing after
that time to the Corporation. In that event the Buyer and the Corporation will be released from all obligations under this Agreement.


 


	5.3	Conditions
    for the Benefit of the Corporation


 


The
obligation of the Corporation to complete the sale of the Purchased Shares will be subject to the fulfilment of the following
conditions at or before the Closing Time:


 


	5.3.1	Representations,
    Warranties and Covenants. The representations and warranties of the Buyer made in this Agreement, and any other agreement
    or document delivered pursuant to this Agreement, will be true and accurate at the Closing Time with the same force and effect
    as though those representations and warranties had been made as of the Closing Time. The Buyer will have complied with all
    covenants and agreements agreed to be performed or caused to be performed by it under this Agreement, and any other agreement
    or document delivered pursuant to this Agreement, at or before the Closing Time. In addition, if the Closing Date is a date
    other than the date hereof, the Buyer will have delivered to the Corporation a certificate of a senior officer of the Buyer
    confirming the same. The receipt of that certificate and the completion of the Closing will not be deemed to constitute a
    waiver of any of the representations, warranties or covenants of the Buyer contained in this Agreement, or in any other agreement
    or document delivered pursuant to this Agreement. Those representations, warranties and covenants will continue in full force
    and effect as provided in Article 6



 



    	 		 



    	 	- 11 -	 



    

 


	5.3.2	Deliveries.
    The Buyer will have delivered to the Corporation the following in form and substance satisfactory to the Corporation:


 


	 	5.3.2.1	the
    cancelled Promissory Note; and
	 	 	 
	 	5.3.2.2	all
    documentation and other evidence reasonably requested by the Corporation in order to establish the due authorization and completion
    of the transactions contemplated by this Agreement, including the taking of all corporate proceedings by the board of directors
    and the shareholders of the Buyer required to effectively carry out the obligations of the Buyer pursuant to this Agreement.


 


	5.4	Waiver
    or Termination by the Corporation


 


The
conditions contained in Section 5.3 are inserted for the exclusive benefit of the Corporation and may be waived in whole or in
part by the Corporation at any time without prejudice to any of its rights of termination in the event of non-performance of any
other condition in whole or in part. If any of the conditions contained in Section 5.3 are not fulfilled or complied with by the
time that is required under this Agreement, the Corporation may, at or before the Closing Time, terminate this Agreement by notice
in writing after that time to the Buyer, unless the condition or conditions which have not been fulfilled are reasonably capable
of being fulfilled or caused to be fulfilled by the Buyer. In that event the Corporation and the Buyer will be released from all
obligations under this Agreement.


 


	5.5	Conditions
    Precedent


 


The
purchase and sale of the Purchased Shares is subject to the following conditions to be fulfilled at or before the Closing Time,
which conditions are true conditions precedent to the completion of the transactions contemplated by this Agreement:


 


	5.5.1	No
    Action to Restrain. No order of any Governmental Authority will be in force, and no action or proceeding will be pending
    or threatened by any Person:


 


	 	5.5.1.1	to
    restrain or prohibit the completion of the transactions contemplated in this Agreement, including the sale and purchase of
    the Purchased Shares;
	 	 	 
	 	5.5.1.2	to
    restrain or prohibit the Corporation or any of its subsidiaries from carrying on its respective business; or
	 	 	 
	 	5.5.1.3	which
    would have a Material Adverse Effect.


 



    	 		 



    	 	- 12 -	 



    

 


If
any of these conditions precedent have not been fulfilled at or before the Closing Time, a Party may provide notice to the other
of the termination of this Agreement and, in such circumstances, the Parties will be released from all obligations under this
Agreement.


 


Article
6

survival and INDEMNIFICATION


 


	6.1	Survival


 


All
of the representations, warranties and covenants in this Agreement will survive the Closing.


 


	6.2	Indemnity


 


The
Corporation acknowledges and agrees that its representations, warranties and covenants in this Agreement are made with the intent
that they may be relied upon in the Buyer’s decision to purchase the Purchased Shares. The Corporation agrees to indemnify
and hold harmless the Buyer and its representatives, directors, officers, employees, legal counsel and agents from and against
all losses, liability, claims, costs, expenses and damages (including all fees, costs and expenses reasonably incurred in investigating,
preparing or defending against any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened)
arising out of or based on any representation or warranty of the Corporation in this Agreement being untrue in any material respect
or any breach of a covenant in this Agreement by the Corporation. The rights to indemnification provided in this Section 6.2 will
be in addition to, and not in derogation of, any other rights or remedies which any indemnified party may have. To the extent
that any person entitled to be indemnified under this Section 6.2 is not a party to this Agreement, the Buyer is acting as agent
for that person with respect to those indemnities, and the Buyer will hold the rights and benefits of this Agreement in trust
for, and on behalf of, that person.


 


Article
7

general


 


	7.1	Governing
    Law


 


This
agreement is governed by, and is to be construed and interpreted in accordance with, the laws of the Province of Ontario and the
laws of Canada applicable in that Province.


 


	7.2	Entire
    Agreement


 


This
Agreement constitutes the entire agreement between the parties pertaining to the subject matter of this agreement and supersedes
all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties, and there are no
representations, warranties or other agreements between the parties, express or implied, in connection with the subject matter
of this agreement except as specifically set out in this Agreement. No party has been induced to enter into this agreement in
reliance on, and there will be no liability assessed, either in tort or contract, with respect to, any warranty, representation,
opinion, advice or assertion of fact, except to the extent it has been reduced to writing and included as a term in this Agreement.


 


	7.3	Time
    of Essence


 


Time
is of the essence in all respects of this agreement.


 



    	 		 



    	 	- 13 -	 



    

 


	7.4	Further
    Assurances


 


Each
of the parties, upon the request of the other party, whether before or after the Closing Date, will do, execute, acknowledge and
deliver or cause to be done, executed, acknowledged and delivered all further acts, deeds, documents, assignments, transfers,
conveyances, powers of attorney and assurances as may be reasonably necessary or desirable to complete and give full effect to
the transactions contemplated by this agreement.


 


	7.5	Assignment
    and Enurement


 


Neither
this agreement nor any right or obligation under this agreement may be assigned by either party without the prior consent of the
other party. This agreement enures to the benefit of and is binding upon the parties and their respective successors and permitted
assigns.


 


	7.6	Counterparts
    and Electronic Delivery


 


This
Agreement may be executed and delivered by the parties in one or more counterparts, each of which will be an original, and each
of which may be delivered by facsimile, e-mail or other functionally equivalent electronic means of transmission, and those counterparts
will together constitute one and the same instrument.


 


[Remainder
of page intentionally left blank]


 



    	 		 



    	 		 



    

 


Each
of the parties has executed and delivered this Agreement as of date first written above.


 


	 	FRANKLY
    INC.
	 	 	 
	 	Per:	/s/ Steve
    Chung 
	 	Name:	Steve
    Chung
	 	Title:	Chief
    Executive Officer
	 	 	 
	 	RAYCOM
    MEDIA, INC.
	 	 	 
	 	Per:	/s/ Warren
    Spector 
	 	Name:	Warren
    Spector
	 	Title:	Chief
    Financial Officer