LOAN
AND SECURITY MODIFICATION AGREEMENT


 


This
Loan and Security Modification Agreement is entered into as of June 24, 2016 by and between Western Alliance Bank (“Bank”)
and SharpSpring, Inc. (“Parent”),
Quattro Hosting LLC (“Quattro”), and SharpSpring Technologies, Inc. (“SharpSpring Technologies”). Parent,
Quattro, and SharpSpring Technologies are each referred to herein as a “Borrower”, and collectively, as the “Borrowers”.


 


1.
DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be owing
by Borrowers to Bank, Borrowers are indebted to Bank pursuant to, among other documents, a Loan and Security Agreement by and
between Borrowers and Bank, dated as of March 21, 2016 and as may be amended from time to time (the “Loan and Security Agreement”).
Capitalized terms used without definition herein shall have the meanings assigned to them in the Loan and Security Agreement.



 


2.
CONSENT TO ASSET SALE. Parent intends to sell to The Electric Mail Company
(“Buyer”) certain assets related to Borrowers’ business as currently conducted whereby Borrowers provide SMTP
relay and email delivery products and services, as set forth in that certain Asset Purchase Agreement by and between Parent and
Buyer dated on or around the date hereof (the “Asset Purchase Agreement”), and in connection therewith, Buyer shall
assume certain liabilities of Parent (the foregoing transactions referred to herein as the “Sale”). Notwithstanding
the prohibition in Section 7.1 of the Loan and Security Agreement, Bank hereby consents to the Sale. 


 


3.
COVENANTS. Prior to the Closing, Parent shall deliver to Bank the
Asset Purchase Agreement, in substantially final form, including all schedules and exhibits, and such other documents or information
as Bank may reasonably request, including a detailed listing of the Assets (as defined in the Asset Purchase Agreement).
Promptly following the Closing, Parent shall deliver to Bank the fully executed Asset Purchase Agreement, with all exhibits
and schedules (in any event within one Business Day of its execution). The proceeds from the Sale shall be deposited directly
into Parent’s account maintained at Bank.


 


4.
RELEASE OF LIEN. Effective as of the Closing (as defined in the Asset Purchase
Agreement), Bank’s security interest in the Assets is automatically and irrevocably released, including any security interest
granted under any Loan Document. Promptly following Bank’s receipt of the executed Asset Purchase Agreement, together with
all schedules and exhibits, Bank shall file any applicable Uniform Commercial Code termination statements and/or other release
documents, in form and substance reasonably satisfactory to Bank and Buyer, to effect and evidence the release of the Assets from
Bank’s security interest including any security interest granted under any Loan Document, each at Borrowers’ expense.


 


5.
CONTINUING LIEN; USE OF PROCEEDS. Borrowers acknowledge and agree that Bank
retains its security interest in the proceeds from the sale of the Assets, which proceeds constitute Collateral under the Loan
Agreement, and shall be deposited into Parent’s account(s) maintained at Bank. Borrowers acknowledge and agree that the
proceeds from the sale shall be retained by Borrowers for working capital and other corporate purposes, and shall not be distributed
to Parent’s stockholders.


 


6.
DESCRIPTION OF CHANGE IN TERMS.


 


A.
Modification(s) to Loan and Security Agreement:




 


	 	(1)	The
                                         following is added to the end of Section 6.9(c):



 


Notwithstanding
the foregoing, Borrowers shall not be in breach of this Section 6.9(c) if Borrowers’ Adjusted EBITDA loss (x) for quarter
ending September 30, 2016 does not exceed negative $1,535,000 or (y) for quarter ending December 31, 2016 does not exceed negative
$1,509,000.


 


7.
CONSISTENT CHANGES. The Loan Documents are each hereby amended wherever necessary to reflect the changes described above.


 






    	 



    	 



    

 


8.
NO DEFENSES OF BORROWER/GENERAL RELEASE. Each Borrower agrees that, as of this date, it has no defenses against the obligations
to pay any amounts under Loan Documents. Each Borrower and its affiliates (each, a “Releasing Party”) acknowledges
that Bank would not enter into this Loan and Security Modification Agreement without Releasing Party’s assurance that it
has no claims against Bank or any of Bank’s officers, directors, employees or agents. Except for the obligations arising
hereafter under this Loan and Security Modification Agreement, each Releasing Party releases Bank and each of Bank’s officers,
directors and employees from any known or unknown claims that Releasing Party now has against Bank of any nature, including any
claims that Releasing Party, its successors, counsel, and advisors may in the future discover they would have now had if they
had known facts not now known to them, whether founded in contract, in tort or pursuant to any other theory of liability, including
but not limited to any claims arising out of or related to the Loan and Security Agreement or the transactions contemplated thereby.
Releasing Party waives the provisions of California Civil Code section 1542, which states:


 


A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME
OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.


 


The
provisions, waivers and releases set forth in this section are binding upon each Releasing Party and its shareholders, agents,
employees, assigns and successors in interest. The provisions, waivers and releases of this section shall inure to the benefit
of Bank and its agents, employees, officers, directors, assigns and successors in interest. The provisions of this section shall
survive payment in full of the Obligations, full performance of all the terms of this Loan and Security Modification Agreement
and the other Loan Documents, and/or Bank’s actions to exercise any remedy available under the Loan Documents or otherwise.


 


9.
CONTINUING VALIDITY. Each Borrower understands and agrees that in modifying the existing Loan Documents, Bank is relying
upon Borrowers’ representations, warranties, and agreements, as set forth in the Loan Documents. Each Borrower represents
and warrants that the representations and warranties contained in the Loan and Security Agreement are true and correct as of the
date of this Loan and Security Modification Agreement, and that no Event of Default has occurred and is continuing. Except as
expressly modified pursuant to this Loan and Security Modification Agreement, the terms of the Loan Documents remain unchanged
and in full force and effect. Bank’s agreement to modifications to the existing Loan Documents pursuant to this Loan and
Security Modification Agreement in no way shall obligate Bank to make any future modifications to the Loan Documents. Nothing
in this Loan and Security Modification Agreement shall constitute a satisfaction of the Obligations. It is the intention of Bank
and Borrower to retain as liable parties all makers and endorsers of Loan Documents, unless the party is expressly released by
Bank in writing. No maker, endorser, or guarantor will be released by virtue of this Loan and Security Modification Agreement.
The terms of this paragraph apply not only to this Loan and Security Modification Agreement, but also to any subsequent loan and
security modification agreements. 


 


10.
CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; REFERENCE PROVISION. This Loan and Security Modification Agreement constitutes
a “Loan Document” as defined and set forth in the Loan and Security Agreement, and is subject to Sections 11 and 12
of the Loan and Security Agreement, which are incorporated by reference herein. 


 


[signature
page follows]


 




    	 



    	 



    





 


11.
COUNTERSIGNATURE. This Loan and Security Modification Agreement shall become effective only when executed by Bank and Borrowers.



 


	BORROWERS:	 	BANK:
	 	 	 
	SHARPSPRING,
    INC.	 	WESTERN
    ALLIANCE BANK
	 	 	 
	By:	/s/
    Edward Lawton	 	By:	/s/
    Thomas P. McLoughlin
	Name:	Edward Lawton	 	Name:	Thomas
    P. McLoughlin
	Title:	CFO	 	Title:	SVP
	 	 	 
	quattro
    hosting llc	 	 
	 	 	 
	By:	/s/
    Edward Lawton	 	 	 
	Name:	Edward Lawton	 	 	 
	Title:	CFO	 	 	 
	 	 	 
	SHARPSPRING
    TECHNOLOGIES, INC.	 	 
	 	 	 
	By:	/s/
    Edward Lawton	 	 	 
	Name:	Edward Lawton	 	 	 
	Title:	CFO