Document:

Letter Agreement

 

Exhibit 10.35

January 5, 2017

Reference is hereby made to that certain Financing Agreement dated as of October 30, 2014 (as amended, restated, supplemented or otherwise modified and in effect immediately prior to the consummation of the Payoff (as defined below), the "Financing Agreement"), by and among Social Reality, Inc., a Delaware corporation (the "Company"), Steel Media, a California corporation ("Steel"); together with the Company, each a Borrower and collectively, the ("Borrowers"), the Company, as the Borrower Representative, the Guarantors party thereto (together with the Borrowers, the "Credit Parties"), the Lenders party thereto and Victory Park Management, LLC, as administrative agent and collateral agent (the "Agent") for the Lenders and the Holders party thereto. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings ascribed thereto in the Financing Agreement and/or the Warrants, as applicable.

Reference is further made to that certain Securities Purchase Agreement, dated as of the date hereof (as i n effect on the date of this letter agreement (this "letter agreement"), the "SPA"; the SPA, together with each of the documents and instruments entered into in connection therewith, referred to herein as the "SPA Documents," in each case as amended from time to time, but in no event amended or otherwise modified in a manner that increases the amounts payable by the Company in cash thereunder), pursuant to which the Company is selling to the buyers named therein, and such buyers are purchasing from the Company, on the date hereof up to $4,000,000 of its securities, consisting of shares of Common Stock, Series A Warrants and Series B Warrants (in each case, as defined in the SPA), all upon the terms and conditions set forth therein, in each case as amended from time to time, but in no event amended or otherwise modified in a manner that increases the amounts payable by the Company in cash thereunder (the ("Financing Transaction").  The Company has provided to the Agent copies of the SPA, the Series A Warrants and the Series B Warrants.

In connection with the execution and delivery of the SPA by the Company and the other parties thereto, and the concurrent closing of the transactions contemplated thereby, the Company is delivering to the Agent, pursuant to and in accordance with the terms of that certain Note Payoff Letter, dated as of the date hereof (the "Payoff Letter"), an amount equal to $_______ in full satisfaction of all of the Credit Parties' respective Obligations with respect to the Notes (the "Payoff').

NOW, THEREFORE, i n consideration of the agreements, provisions and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the undersigned agrees as follows:

1.

Financing Transaction. Pursuant to Section 8.2 l of the Financing Agreement, the Company is required to deliver the Future Offering Notice to a Holder and such Holder is entitled to exercise such Holder's Purchase Option . Subject to and effective upon the satisfaction of the conditions precedent set forth in Section 4 hereof, including for the avoidance of doubt the consummation of the Payoff, with respect to the offer and sale by the Company of up to $4,000,000 of its securities pursuant to the Financing Transaction, (i) the parties hereto acknowledge and agree that this letter shall serve as the Future Offering Notice with respect to the Financing Transaction; (ii) the Holder declines its Holder Purchase Option, pursuant to Section 8.2 1 of the Financing Agreement, with respect to the Company securities sold pursuant to the SPA in the Financing Transaction, and (i ii) the Agent consents to the offer and sale of the Company's securities in the Financing Transaction pursuant to the SPA, in accordance with Section 8.20 of the Financing Agreement.

2.

Put Right. Subject to and effective upon the satisfaction of the conditions precedent set forth in Section 4 hereof, including for the avoidance of doubt the consummation of the Payoff, (i) the Holder agrees not to exercise the Put Right pursuant to Section 10 of the Warrant prior to the date that is one hundred thirty-five ( 135) days after the closing of the Financing Transaction on the date of this letter agreement (the "Put Standstill Period"), and (ii) following any exercise of the Put Right after the expiration of the Put Standstill Period, the date of the Put Right Closing (as such term is defined in the Warrant) shall be as mutually determined by the Company and the Holder, but in any event shall occur no later than 45 days following the delivery of the Put Right Notice .

3.

Amendment to Warrants. The Company hereby agrees with the Agent and the Holder that, subject to and effective upon the satisfaction of the conditions precedent set forth in Section 4 hereof, including for the

 

avoidance of doubt the consummation of the Payoff, as of the date first written above each of the Warrants is hereby amended as follows:

a.

Section 10 of each of the Warrants is hereby amended by adding the following as new clause (d) thereto:

"(d)

If the Company shall fail to deliver all or any portion of the purchase price at a Put Right Closing with respect to any Put Right Securities, in addition to any remedy the Holder may have under this Warrant, the Financing Agreement or otherwise, such purchase price with respect to such Put Right Securities shall bear interest at a rate equal to the lesser of (i) fourteen percent (14%) per annum, and (ii) the maximum rate of interest allowed under applicable law, in any such case until paid in full. Notwithstanding anything set forth herein to the contrary, until the purchase price with respect to any Put Right Securities is paid in full, this Warrant may be exercised, in whole or in part, by the Holder in accordance with the terms hereof."

b.

As amended hereby, each of the Warrants shall remain in full force and effect. Each of the Credit Parties hereby covenants, acknowledges and agrees that (i) each Holder of a Warrant shall have the right to request, at any time following the date of this letter agreement, for any reason or no reason , including without limitation, in connection with any proposed sale, assignment or other transfer of a Warrant, that the Company issue a new instrument representing such Warrant, as amended hereby, and (i i) the Company shall promptly, and in no event later than three Business Days following any such Holder 's request, execute and deliver such new instrument representing such Warrant, as amended hereby , to such Holder, at the address specified by such Holder. Upon the receipt by such Holder of the new instrument representing such Holder's Warrant, as amended hereby, such Holder's existing Warrant will be void and of no further force and effect, and such Holder shall return its existing Warrant to the Company for cancellation.

4.

Conditions.   This letter agreement shall become effective upon the satisfaction in full of each of the following conditions:

a.

the consummation  of the Payoff pursuant to, and i n accordance with, the Payoff Letter; and

b.

the execution and delivery of this letter agreement and the Payoff Letter by Borrowers, the other Credit Parties, the Lenders and the Agent, as applicable.

5.

Covenants of the Credit Parties.

a.

Each of the covenants, representations and agreements set forth in Sections 2.8, 2.11, 8.29, 8.30, 8.31, 8.32, 8.33, 8.34, 8.35, 8.37, 13.8, 13.10 and 13.12 of the Financing Agreement, each solely as they relate to the Warrants, the Warrant Shares and the Warrant Documents (each, a "Subject Agreement" and, collectively, the ("Subject Agreements"), is incorporated by reference herein, and each of the Credit Parties hereby remakes and reaffirms each of the Subject Agreements with the same force and effect as if each was separately stated herein and made as of the date hereof .

b.

Each of the Credit Parties hereby covenants, acknowledges and agrees that, during the period beginning with the date of this letter agreement and ending on the first date on which no Warrants are outstanding, no Credit Party shall (and each Credit Party shall cause each of its Subsidiaries not to, directly or indirectly, other than the incurrence of indebtedness in the ordinary course of business under the factoring arrangement with FAST PAY PARTNERS LLC as in effect on the date hereof (or similar asset based arrangement replacing the factoring arrangement with FAST PAY PARTNERS LLC), create, incur or guarantee, assume, or suffer to exist any Indebtedness or engage in any sale and leaseback, synthetic lease or similar transaction , or offer, sell, grant any option to  purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of its debt securities,

 

in any such case without the prior written consent of the Agent.   For the avoidance of doubt, the Financing Transaction shall not constitute the incurrence of Indebtedness in violation of this section.

6.

[Intentionally  Omitted]

7.

Representations and Warranties of the Credit Parties.  To induce each Lender and the Agent to execute and deliver this letter agreement, each Credit Party represents, warrants and covenants that:

a.

the execution, delivery and performance by each Credit Party of this letter agreement, the Payoff Letter, the Warrants (as amended hereby), the SPA Documents and all documents and instruments delivered in connection herewith and therewith have been duly authorized by all necessary action required on its part and no further consent or authorization is required by any Credit Party or their respective boards of directors (or similar governing bodies) or shareholders or other equity holders , and this letter agreement, the Payoff Letter, the Warrants (as amended hereby), the SPA Documents and all documents and instruments delivered in connection herewith are legal, valid and binding obligation s of such Credit Party enforceable against such Credit Party in accordance with its terms except as such enforceability may be limited by general  principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.

b.

neither the execution, delivery and performance of this letter agreement, the Payoff Letter, the Warrants (as amended hereby) or the SPA Documents nor the consummation of the transactions contemplated hereby or thereby does or shall (i) result in a violation of any Credit Party 's certificate of incorporation, certificate of formation, bylaws, limited liability company agreement or other governing documents, or the terms of any Capital Stock or other Equity Interests of any Credit Party; (ii) conflict with , or constitute a breach or default (or an event which, with notice or lapse of time or both, would become a breach or default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which any Credit Party is a party; (iii) result in any "price reset" or other material change in or other modification to the terms of any Indebtedness, Equity Interests or other securities of any Credit Party; or (iv) result in a violation of any law, rule, regulation, order, judgment or decree. No Credit Party is required to obtain any consent, authorization or order of or make any filing or registration with, any court or governmental agency or any regulatory or self-regulatory agency, including without limitation the Principal Market, in order for it to execute, deliver or perform any of its obligations under this letter agreement, the Payoff Letter, the Warrants (as amended hereby) or, except as expressly contemplated thereby, the SPA Documents.

8.

Reference to and Effect Upon the Transaction Documents.

a.

Except as specifically amended hereby or as otherwise expressly set forth in the Payoff Letter, all terms, conditions, covenants, representations and warranties contained in the Warrant Documents (as amended hereby), and all rights of the Lenders, the Holders and the Agent and all of the obligations under the Warrant Documents (as amended hereby), shall remain in full force and effect. Each Credit Party hereby confirms that each of the Warrant Documents (as amended hereby) is in full force and effect, and that no Credit Party has any right of setoff, recoupment or other offset or any defense, claim or counterclaim with respect to any Warrant Document (as amended hereby) or the Credit Parties' obligations thereunder.

b.

Except as expressly set forth herein or in the Payoff Letter, the execution, delivery and effectiveness of this letter agreement and any consents or waivers set forth herein shall not directly or indirectly: (i) constitute a consent or waiver of any future violations of any Warrant Document; (ii) amend, modify or operate as a waiver of any provision of any Warrant Document or any right, power or remedy of any Lender, any Holder or the Agent, or (iii) constitute a course of dealing or other basis for altering any obligations under the Warrant Documents.

c.

From and after the date hereof, (i) all references to the term "Warrants" as used in any Transaction Document, shall mean the Warrants (as amended hereby), (ii) all reference s to the term

 

"Securities" as used in any Transaction Document, shall include, without limitation, the Warrants (as amended hereby), (iii) all references to the term "Warrant Documents" as used in any Transaction Document, shall include, without limitation, this letter agreement, the Payoff Letter and the Warrants (as amended hereby), (iv) all references to the term "Transaction Documents" as used in any Transaction Document shall include, without limitation, this letter agreement, the Payoff Letter, the Warrants (as amended hereby), and any other agreements, instruments and other documents executed or delivered in connection herewith.

9.

Governing Law; Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this letter agreement shall be governed by the internal laws of the State of Illinois, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Illinois or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Illinois. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in Chicago, Illinois, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this letter agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.

10.

Successors and Assigns. This letter agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.  The successors and assigns of such entities shall include their respective receivers, trustees or debtors-in-possession.

11.

Severability. The invalidity, illegality, or unenforceability of any provision in or obligation under this letter agreement in any jurisdiction shall not affect or impair the validity, legality, or enforceability of the remaining provisions or obligations under this letter agreement or of such provision or obligation in any other jurisdiction. If feasible, any such offending provision shall be deemed modified to be with in the limits of enforceability or validity; provided that if the offending provision cannot be so modified, it shall be stricken and all other provisions of this letter agreement in all other respects shall remain valid and enforceable.

This letter agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.  This letter agreement may be delivered by facsimile, email or similar electronic transmission, each of which shall be deemed the equivalent of an originally signed document and shall be fully admissible in any enforcement proceedings regarding this letter agreement.

[Signature Pages Follow]

 

IN WITNESS WHEREOF, each party has caused its signature page to this letter agreement to be duly executed as of the date first written above.

			
	 
	CREDIT PARTIES:

	 
	 

	 
	SOCIAL REALITY, INC.

	 
	 
	 

	 
	By: 

	/s/ Christopher Miglino

	 
	Name:

	Christopher Miglino

	 
	Its: 

	Duly Authorized Signatory

	 
	 
	 

	 
	 
	 

	 
	STEEL MEDIA

	 
	 
	 

	 
	By: 

	/s/ Christopher Miglino

	 
	Name:

	Christopher Miglino

	 
	Its: 

	Duly Authorized Signatory

	 
	 
	 

	 
	 
	 

	 
	FIVE DELTA, INC.,

	 
	 
	 

	 
	By: 

	/s/ Christopher Miglino

	 
	Name:

	Christopher Miglino

	 
	Its: 

	Duly Authorized Signatory

 

			
	 
	AGENT:

	 
	 
	 

	 
	VICTORY PARK MANAGEMENT, LLC, as Agent

	 
	 
	 

	 
	By: 

	/s/ Scott Zemnick

	 
	Name:

	Scott Zemnick

	 
	Its: 

	Manager

	 
	 
	 

	 
	LENDERS:

	 
	 
	 

	 
	VPC SBIC I, LP

	 
	 
	 

	 
	By: Victory Park Capital Advisors, LLC

	 
	Its: Investment Manager

	 
	 
	 

	 
	By:

	/s/ Scott Zemnick

	 
	Name:

	Scott Zemnick

	 
	Title:

	General Counsel

[Signature Page to Letter Agreement]INSIDER TRADING POLICY

 

EXHIBIT 10.36

INSIDER TRADING POLICY

Adopted by the Board of Directors on February 23, 2016

Social Reality, Inc. has adopted this Statement of Policy on Securities Trading by Company personnel and consultants (this “Policy Statement”) governing securities transactions by officers, directors, employees and consultants (including entities over the individual has influence or control, including corporations, limited liability companies, partnerships or trusts) of Social Reality, Inc. and its subsidiaries (collectively, with Social Reality, Inc., the “Company”).

The Insider Trading and Securities Fraud Enforcement Act of 1988 (the “Act”) authorizes the Securities and Exchange Commission and the Justice Department to vigorously prosecute insider trading that is based on information acquired in the workplace and imposes substantial penalties on individuals for insider trading. In addition, the Act places direct responsibility on companies to monitor the securities transactions of their employees. Onerous penalties may be assessed against the Company for the insider trading violations of its employees. Accordingly, if the Company does not take active steps to adopt preventive policies and procedures covering securities transactions by Company personnel, the consequences could be severe.

The Company has also adopted this Policy Statement to avoid damage to its reputation for integrity and ethical conduct. We all strive to establish a reputation for observing the highest standards of conduct, and even the appearance of improper conduct must be avoided.

Consequences of Insider Trading Violations

The civil and criminal penalties for insider trading violations under the Act are as follows:

For individuals who trade on inside information (or who tip information to others):

·

A civil penalty of up to three times the profit gained or loss avoided;

·

A criminal fine (no matter how small the profit) of up to $1 million; and

·

A maximum jail term of 10 years.

For a company (as well as possibly any supervisory person) that fails to take appropriate steps to prevent illegal trading:

·

A civil penalty of the greater of $1 million or three times the profit gained or loss avoided as a result of the employee’s violation; and

·

A maximum criminal penalty of $2.5 million.

  

Moreover, anyone who fails to comply with any of the policies or procedures set forth in this Policy Statement may be disciplined or terminated at the Company’s sole discretion, whether or not such individual’s failure to comply results in a violation of law. Needless to say, a violation of law, or even a Securities and Exchange Commission investigation that does not result in prosecution, can tarnish one’s reputation and irreparably damage a career.

In this regard, every officer, director, employee and consultant is responsible for the actions of his or her immediate family and personal household as well as family members who do not live with you but whose transactions in the Company's securities are directed by you or subject to your influence or control. Prohibited securities transactions by an employee’s spouse, for example, could have the same consequences as trading initiated directly by the employee.

Prohibited Use of Material Information

If a director, officer, employee or consultant knows of material nonpublic information relating to the Company, it is our policy that neither that person nor any related person may buy or sell the Company’s securities or engage in any other action to take advantage of, or pass on to others, that information.

In addition, it is the policy of the Company that no director, officer, employee or consultant of the Company who, in the course of working for the Company, learns of material nonpublic information about a company with which the Company does business, including a customer or supplier of the Company, may trade in that company’s securities until the information becomes public or is no longer material.

Transactions that may be necessary or justifiable for independent reasons (such as the need to raise money for an emergency expenditure) are not exempt from this policy. The securities laws do not recognize such mitigating circumstances, and, in any event, even the appearance of an improper transaction must be avoided to preserve the Company’s reputation for adhering to the highest standards of conduct.

For purposes of this Policy Statement, “material information” means any information that a reasonable investor would consider important in a decision to buy, hold, or sell stock of the Company or of any other company. In short, any information is material if it could reasonably affect the price of the stock.

Common examples of information that will frequently be regarded as material are:

·

Projections of future earnings or losses;

·

Earnings that are inconsistent with the consensus expectations of the investment community;

·

News of a pending or proposed merger, acquisition, or similar transaction;

·

News of a significant sale of assets or the disposition of a subsidiary;

·

Changes in dividend policies, the declaration of a stock split, or the offering of additional securities;

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SOCIAL REALITY, INC. INSIDER TRADING POLICY

  

·

Entering into contracts that could lead to significant revenue;

·

Changes in management;

·

Institution of or changes in the status of governmental investigations;

·

Significant new products or discoveries;

·

Impending bankruptcy or financial liquidity problems; and

·

The gain or loss of a substantial customer.

Twenty-Twenty Hindsight

If your securities transactions become the subject of investigation, they will be viewed by the Securities and Exchange Commission after the fact with the benefit of hindsight. Therefore, before engaging in any transaction, you may want to consult with your own attorney (in addition to clearing the transaction with Pearlman Schneider, LLP, the Company’s outside securities counsel), and carefully consider how regulators and others might view the transaction in hindsight.

Trading After Public Announcements

It is also Company policy that, except as discussed below under “Preplanned Trading Programs,” no officer, director, employee or consultant, nor anyone related to any such person, may enter into a trade immediately after the Company has publicly announced material information, including earnings releases. Because the Company’s stockholders and the investing public should be allowed time to receive the information and digest it sufficiently, as a general rule such persons should not engage in any transactions until at least two business days after the information has been released. Moreover, because the Company’s press releases are typically not reported by the financial press, it may be necessary in certain situations to delay a trade for an even longer period of time.

Stock Option Exercises

The Company’s insider trading policy does not apply to the exercise of an employee or consultant stock option, or to the exercise of a tax withholding right pursuant to which you elect to have the Company withhold shares subject to an option to satisfy tax withholding requirements. The policy does apply, however, to any sale of stock as part of a broker-assisted cashless exercise of an option, or any other market sale for the purpose of generating the cash needed to pay the exercise price of an option.

Preplanned Trading Program

A preplanned trading program, if properly structured and implemented, can be a better way to facilitate trading in the Company’s securities than our regular system of trading windows and black-out periods. The Company, therefore, will permit trading in its securities under preplanned trading programs that satisfy the requirements of Securities and Exchange Commission Rule 10b5-1 and the policies set forth in this Policy Statement.

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All preplanned trading programs must be pre-cleared and coordinated with the Company as described below under “Pre-Clearance of All Trades and “Broker Interface Procedures.” Once the preplanned trading program has been pre-cleared, the actual transactions in the Company’s securities effected pursuant to the program will not require any further clearance as long as there have been no modifications or changes to the program as pre-cleared.

Gifts

A gift of Company securities to a family member, charitable organization or any other person (including a transfer to a family trust) should be pre-cleared as described below under “Pre-Clearance of All Trades” and may not be made during a black-out period described below under "Black-Out Periods." 

Tipping Information to Others

Whether the information is proprietary information about the Company or information that could have an impact on the Company’s stock price, you must not pass it on to others. The penalties set forth above apply, whether or not you derive any benefit from someone else’s actions. In one case, for example, the Securities and Exchange Commission imposed a $470,000 penalty on a tipper even though he did not profit personally from his tippees’ trading.

This policy also serves the Company’s broader interest in preserving the confidentiality of its proprietary information.

Additional Prohibited Transactions

Because we believe it is improper and inappropriate for any Company personnel to engage in short-term or speculative transactions involving the Company’s securities, it is the Company’s policy that directors, officers, employees and consultants should not engage in any of the following activities with respect to the Company’s securities:

1.

Trading on a short-term basis. Any Company securities purchased in the open market must be held for a minimum of six months and preferably longer. (Note that the Securities and Exchange Commission’s short-swing profit rule requires disgorgement of profits made by officers and directors from selling any Company securities within six months of a purchase. For some of the same policy reasons, we are simply expanding this rule to all employees. However, the rule does not apply to stock option exercises and subsequent sales of the underlying securities, except to the extent required by law for officers and directors.)

2.

Short selling. Short sales of the Company’s securities evidence an expectation on the part of the seller that the securities will decline in value, and therefore signal to the market that the seller has no confidence in the Company or its short-term prospects. In addition, short sales may reduce the seller’s incentive to improve the Company’s performance. For these reasons, short sales of the Company’s securities are prohibited by this Policy Statement. In addition, Section 16(c) of the Securities Exchange Act of 1934 prohibits officers and directors from engaging in 

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SOCIAL REALITY, INC. INSIDER TRADING POLICY

  

short sales. This prohibition extends to so-called short sales against the box, where the seller may own the securities being sold, but may not deliver those securities to cover the sale order.

3.

Publicly Traded Options. A transaction in options is, in effect, a bet on the short-term movement of the Company’s stock and therefore creates the appearance that the individual is trading based on inside information. Transactions in options also may focus the individual’s attention on short-term performance at the expense of the Company’s long-term objectives. Accordingly, transactions in puts, calls or other derivative securities, on an exchange or in any other organized market, are prohibited by this Policy Statement. Option positions arising from certain types of hedging transactions are governed by the section below captioned “Hedging Transactions.”

4.

Hedging Transactions. Certain forms of hedging or monetization transactions, such as zero-cost dollars and forward sale contracts, allow an individual to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock. These transactions allow the individual to continue to own the covered securities, but without the full risks and rewards of ownership. When that occurs, the individual may no longer have the same objectives as the Company’s other stockholders. Therefore, the Company strongly discourages you from engaging in such transactions. Any person wishing to enter into such an arrangement must first pre-clear the proposed transaction with the Company's Chief Executive Officer. Any request for pre-clearance of a hedging or similar arrangement must be submitted to the Chief Executive Officer at least two weeks prior to the proposed execution of documents evidencing the proposed transaction and must set forth a justification for the proposed transaction.

5.

Margin Accounts and Pledges. Securities held in a margin account may be sold by the broker without the customer’s consent if the customer fails to meet a margin call. Similarly, securities pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan. Because a margin sale or foreclosure sale may occur at a time when the pledgor is aware of material nonpublic information or otherwise is not permitted to trade in Company securities, directors, officers, employees and consultants are prohibited from holding Company securities in a margin account or pledging Company securities as collateral for a loan, without obtaining prior approval. An exception to this prohibition may be granted where a person wishes to pledge Company securities as collateral for a loan (not including margin debt) and clearly demonstrates the financial capacity to repay the loan without resort to the pledged securities. Any person who wishes to pledge Company securities as collateral for a loan must submit a request for approval to the Chief Executive Officer at least two weeks prior to the proposed execution of documents evidencing the proposed pledge. This prohibition does not apply to pledges of securities in effect prior to the adoption of this Policy Statement.

Pre-Clearance of All Trades

To provide assistance in preventing inadvertent insider trading violations and avoiding the appearance of an improper transaction (which could result, for example, when an employee engages in a trade while unaware of a pending major development), and also to comply with recent accelerated reporting requirements of insider transactions, all transactions in the 

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SOCIAL REALITY, INC. INSIDER TRADING POLICY

  

Company’s securities (acquisitions, dispositions, transfers, etc.) by any officer, director, employee or consultant, together with their family members, must be pre-cleared by the Chief Executive Officer. 

If you contemplate a transaction, you should contact the Chief Executive Officer at least two business days in advance. The Chief Executive Officer is under no obligation to approve a trade submitted for pre-clearance, and may determine not to permit the trade after review of the legal considerations applicable to the proposed trade. In the absence of the Chief Executive Officer, all of the foregoing transactions should be cleared by James M. Schneider, Esq. of Pearlman Schneider LLP, the Company’s outside securities counsel.  Any clearance by Mr. Schneider, however, is not to be construed as legal advice to you and you remain responsible for complying with this Policy Statement.  Transactions of the foregoing type by the Chief Executive Officer must be cleared by either the Company’s Chairman of the Board or Chairman of the Audit Committee.

This requirement does not apply to stock option exercises, but does cover market sales of option stock.

Broker Interface Procedures

The accelerated reporting of transactions pursuant to the Sarbanes-Oxley Act of 2002, which applies to directors and executive officers, will require tight interface with brokers handling transactions for our directors and executives. A knowledgeable, alert broker can act as a gatekeeper, helping ensure compliance with our pre-clearance procedures and helping prevent inadvertent violations.

We will require that all directors and executives officers and their brokers sign the enclosed Broker Instruction/Representation Form which imposes two requirements on the broker handling transactions in Company securities:

Not to enter any order (except for orders under pre-approved Rule 10b5-1 plans) without:

(a)

first verifying with the Company that the transaction was pre-cleared; and

(b)

complying with the brokerage firm’s compliance procedures (e.g., Rule 144).

To report immediately to the Company via:

(a)

telephone; and

(b)

in writing (via e-mail or fax) the details of every transaction involving Company securities, including gifts, transfers, pledges, and all 10b5-1 transactions.

Each director and executive officer should sign, and also have his broker sign, the enclosed Broker Instruction/Representation Form and return it to us as soon as possible following receipt of this Policy Statement so that we can work out with the brokers a coordinated procedure for handling any trades in the Company’s securities.

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SOCIAL REALITY, INC. INSIDER TRADING POLICY

  

Black-Out Periods 

1.

Quarterly Black-Out Periods. Unless made pursuant to a Preplanned Trading Program as permitted above, transactions in the Company’s securities can only be made outside of “black-out” periods. The standard black-out periods begin on the 30th day in the month before the end of a fiscal quarter or fiscal year and end two business days after public release of quarterly or annual financial results for that fiscal period.

2.

Event-Specific Black-Out Periods. The Company may on occasion issue interim earnings guidance or other potentially material information by means of a press release, Securities and Exchange Commission filing on Form 8-K or other means designed to achieve widespread dissemination of the information. You should anticipate that trades are unlikely to be pre-cleared while the Company is in the process of assembling the information to be released and until the information has been released and fully absorbed by the market. The Company generally will not disclose the reason for additional black-out periods.

3.

Hardship Exceptions. A person who is subject to a quarterly earnings black-out period and who has an unexpected and urgent need to sell Company stock in order to generate cash may, in appropriate circumstances, be permitted to sell Company stock even during the black-out period. Hardship exceptions may be granted only by the Chief Executive Officer and must be requested at least two days in advance of the proposed trade. A hardship exception may be granted only if the Chief Executive Officer concludes that the Company’s earnings information for the applicable quarter does not constitute material nonpublic information. Under no circumstance will a hardship exception be granted during an event-specific black-out period.

Transactions by Family Members

This Policy Statement also applies to your family members who reside with you, anyone else who lives in your household, and any family members who do not live in your household but whose transactions in Company securities are directed by you or are subject to your influence or control, such as parents or children who consult with you before they trade in Company securities. You are responsible for the transactions of these other persons and therefore should make them aware of the need to confer with you before they trade in Company securities.

Post-Termination Transactions

This Policy Statement continues to apply to your transactions in Company securities even after you have terminated employment or are no longer serving the Company as a director or consultant. If you are in possession of material nonpublic information when your employment or your service as a director or consultant terminates, you may not trade in Company securities until that information has become public or is no longer material.

In all other respects, the procedures set forth in this Policy Statement will cease to apply to your transactions in Company securities upon the expiration of any “black-out period” that is applicable to your transactions at the time of your termination of service.

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SOCIAL REALITY, INC. INSIDER TRADING POLICY

  

A Special Note to Affiliates

Officers, directors and 10% or greater stockholders of the Company are considered "affiliates" under Federal securities laws.  Affiliates are reminded that in addition to compliance with this Policy Statement, you are also required to comply with the provisions of Rule 144 of the Securities Act of 1933 in any sales or dispositions of Company securities.

Company Assistance

Any person who has any questions about specific transactions may obtain additional guidance from the Chief Executive Officer. However, the ultimate responsibility for adhering to this Policy Statement and avoiding improper transactions rests with you. Therefore, it is imperative that you use good judgment with respect to all your transactions in Company securities.

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SOCIAL REALITY, INC. INSIDER TRADING POLICY

  

BROKER INSTRUCTION/REPRESENTATION FORM

The undersigned executive officer or director of Social Reality, Inc. and its subsidiaries (collectively, with Social Reality, Inc., the “Company”) and such person’s securities broker hereby acknowledge and agree to the following in order to comply with the accelerated two-day reporting requirements of the Sarbanes-Oxley Act of 2002:

1.

Not to enter any order (except for orders under pre-approved Rule 10b5-1 plans) without:

(a)

first verifying with the Company that such transaction was pre-cleared, and

(b)

complying with the brokerage firm’s compliance procedures (e.g., Rule 144).

2.

To report immediately to the Company to the attention of the Chief Executive Officer via:

(a)

telephone, and

(b)

in writing (via e-mail or fax) the details of every transaction involving Company stock, including gifts, transfers, pledges, and all 10b5-1 transactions.

Dated: ___________________, 201_

__________________________________

Signature

Print name: _________________________

Title: _______________________________

Brokerage Firm

Dated: ___________________, 201_

___________________________________

[Print name of firm]

By: ________________________________

Print name: _________________________

Title: _______________________________

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SOCIAL REALITY, INC. INSIDER TRADING POLICY

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