EMPLOYEE AGREEMENT
Exhibit 10.1
This
Agreement (the “Agreement”) is made and entered into as
of December 10, 2020 by SharpSpring Technologies, Inc., a Delaware
corporation (the “Company”), including its parents,
affiliates, assignees, and successors, each of whom are expressly
authorized to enforce this Agreement, and who are referenced herein
as the “Company” and Xxxxx Xxxxxxx, referenced herein
as “you” or “your” or
“Employee”.
1.
CONSIDERATION.
You agree that this Agreement is entered into in consideration of
the mutual promises contained in this Agreement and other good and
valuable consideration, and in further consideration of your
present employment or association with the Company or your
continued employment or association with the Company. Your
employment or association with the Company is at-will and may be
terminated at any time at the election of either party. This
Agreement does not guarantee your employment by or association with
the Company for any definite period of time.
2.
REPRESENTATIONS
AND WARRANTIES. You represent and warrant to the Company that the
following statements are true and correct and shall remain true and
correct at all times during your employment or association with the
Company:
a.
All
statements and representations contained in your application for
employment or association are true and correct; and
b.
This
Agreement constitutes a legal, valid, and binding agreement and
obligation enforceable against you in accordance with its
terms.
3.
POSITION
AND DUTIES. The Company agrees to employ you to act as its Chief
Financial Officer effective as of December 10, 2020. You shall be
responsible for leading the Company’s finance and accounting
functions, including financial reporting and analysis, and other
duties as may be prescribed by the Company’s Chief Executive
Officer from time to time. You agree that you will serve the
Company faithfully and to the best of your ability during the term
of employment, under the direction of the Chief Executive Officer
of the Company.
4.
PLACE
OF EMPLOYMENT. You shall perform your duties under this Agreement
at 0000 Xxxxxxxxxxx Xxxxxx Xxx, Xxxxxxxxxxx, XX, or the
Company’s then-current headquarters office.
5.
COMPENSATION
OF EMPLOYEE. For all services rendered, you shall initially receive
compensation as follows:
a.
Base
Salary: The Company agrees to pay you at a rate of $175,000 per
year, which may be increased from time to time by the Compensation
Committee of the Company’s Board of Directors (the
“Board”), except pursuant to across-the-board salary
reductions affecting all other senior executives of the Company,
may not be decreased. The Base Salary will be payable on a
semi-monthly basis, or on whatever basis SharpSpring may adopt in
the future, in accordance with the Company’s standard payroll
practices
Page 1
b.
Bonus:
You will be eligible for participation in SharpSpring’s
executive bonus plan with a bonus opportunity of $50,000. The
payout related to your bonus opportunity will initially be based on
the Company achieving specified revenue and EBITDA performance
targets as set by the Board and may be modified from time to time
by the Board in their sole discretion. The executive bonus is
currently paid quarterly but may be paid annually in the future at
the election of the Board.
c.
Equity: Subject to approval by the Board, you will
be granted 37,900 Restricted Stock Units (“RSUs”). The
RSUs will be subject to the terms and conditions of
the Company’s 2019 Equity
Incentive Plan, as may be amended, and the Restricted Stock Unit
Agreement that you will sign in connection with receiving the RSUs.
The RSUs shall vest over four (4) years, with 25% of the RSUs
vesting on the one-year anniversary of the date of the grant and
the remaining 75% of the RSUs vesting on a quarterly basis
thereafter. In the event of a Change in Control any unvested awards
will immediately vest (“Change in Control Vesting”). If
acquirer notifies you in writing that your services in the same
role, title, and total compensation is required for up to six (6)
months following announced change in control then vesting will
still occur but with a lockup period no longer than six (6) months
from date of notice by acquirer. For purposes of this Agreement, a
“Change of Control” shall mean the occurrence of any of
the following events: (i) an acquisition of the Company by another
entity by means of any transaction or series of related
transactions (including, without limitation, any reorganization,
merger or consolidation but excluding any merger effected
exclusively for the purpose of changing the domicile of the
Company), or (ii) a sale of all or substantially all of the assets
of the Company (collectively, a “Merger”), so long as
in either case the Company’s stockholders of record
immediately prior to such Merger will, immediately after such
Merger, hold less than fifty percent (50%) of the voting power of
the surviving or acquiring entity. You will be considered for
future stock and or option grants to the extent that the Board
considers those for other Company executives.
d.
Withholdings:
All amounts due from the Company to the Employee hereunder shall be
paid to the Employee net of all taxes and other amounts which the
Company is required to withhold by law.
6.
REIMBURSEMENT
FOR BUSINESS EXPENSES. Subject to the approval of the Company, the
Company shall promptly pay or reimburse you for all reasonable
business expenses incurred in performing your duties and
obligations under this Employee Agreement, but only if you properly
account for expenses in accordance with the Company’s
policies.
7.
PAID TIME OFF AND BENEFITS. You shall be entitled
to the same benefits, paid time off and Company holidays offered by
the Company to its senior management. Nothing in this Employee Agreement shall prohibit
the Company from modifying or terminating any of its employee
benefit plans in a manner that does not discriminate between
Employee and other Company senior management.
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8.
TERMINATION OF
EMPLOYMENT. Employee’s employment hereunder shall
automatically terminate upon (i) his death; (ii) Employee
voluntarily leaving the employ of the Company; or (iii) at the
Company’s sole discretion, for any reason, with or without
cause.
a.
Payment at
termination: In the event that your employment under this Agreement
is terminated for any reason, Company shall promptly pay Employee
(i) any salary accrued through the date of termination, and (ii)
reimbursement for business related expenses during the period of
Employee’s employment, providing that such expenses are
submitted in accordance with Company policies. In the event that
you leave the Company’s employment for Good Reason (defined
below) or if the Company terminates your employment without Cause
(defined below), you shall be entitled to receive severance in an
amount equal to one day of base salary for every completed work day
of employment with the Company, up to a maximum of six (6) months
of base salary. Such severance shall be paid semi-monthly according
to the Company’s normal payroll process and shall terminate
immediately if you become gainfully employed during the severance
period. Notwithstanding anything to the contrary in this Section
8(a), the payment of the severance is contingent upon
Employee’s execution of a written separation agreement (in a
form satisfactory to the Company) containing, among other things, a
general release of claims against the Company, and the rescission
period of such agreement must expire, without revocation of such
agreement, within sixty (60) days following the effective date of
termination. To the extent that payments would otherwise be paid to
Employee within the sixty (60) day period following the effective
date of termination, such payment(s) shall be made following
Employee’s execution of such separation agreement and the
expiration of the applicable rescission period, except where the
sixty (60) day period following the effective date of termination
spans two (2) different calendar years, in which case such
payment(s) will not be paid until the later calendar year during
the sixty (60) day period.
b.
Definition of Good
Reason: For purposes hereof, “Good Reason” means
(i) a reduction in your Base Salary of more than five percent
(5%), other than pursuant to an across-the-board reduction in
accordance with Section 5; (ii) a material diminution in
your duties or responsibilities inconsistent with your position;
(iii) a change in your principal office to a location more
than fifty (50) miles from Gainesville, Florida, provided such
location is also more than fifty (50) miles from your principal
residence as of the date of relocation; or (iv) the failure of
the Company to obtain the assumption (by operation of law, the
continuation of the corporate existence of the Company, SharpSpring
or otherwise) of this Agreement or substitution of a substantially
similar agreement by any successors in a Change of Control (defined
above), in each case without your prior written
consent; provided that you must deliver
written notice of your resignation to the Company within thirty
(30) days of your actual knowledge of any such event, the Company
must be provided at least thirty (30) days during which it may
remedy the condition and you must terminate your employment within
six (6) months of the initial occurrence of Good Reason in order
for such resignation to be with Good Reason for any purpose
hereunder.
Page 3
c.
Definition of
Cause: For purposes hereof “Cause” means, the
determination by the Company that Employee has engaged in any of
the following: (i) the conviction or plea of guilty or no
contest for or indictment on a felony or a crime involving moral
turpitude or the commission of any other act or omission involving
misappropriation, embezzlement or fraud, which involves a material
matter with respect to the Company or any subsidiary or any of
their customers or suppliers; (ii) substantial and repeated
failure to perform duties of the office you hold as reasonably
directed by the CEO or Board after notice from the CEO or Board and
a reasonable opportunity to respond to such notice; or
(iii) gross negligence or willful misconduct with respect to
the Company or any subsidiary that is or could reasonably be
expected to be harmful to the Company or any subsidiary in any
material respect after notice from the CEO or Board and a
reasonable opportunity to respond to such notice.
9.
BEST
EFFORTS AND OUTSIDE ACTIVITIES. You shall devote all of the
necessary business time, attention, and energies, as well as your
best talents and abilities to the business of the Company in
accordance with the Company’s instructions and directions.
You may engage to a limited extent in other business activities
unrelated to the Company so long as such activities do not create a
conflict of interest or otherwise interfere with the performance of
your duties and the terms and conditions of this Employee
Agreement.
10.
MAINTENANCE OF
LIABILITY INSURANCE. So long as you shall serve as an executive
officer of the Company pursuant to this Employee Agreement, the
Company shall obtain and maintain in full force and effect a policy
of director and officer liability insurance of at least $5,000,000
from an established and reputable insurer. In all policies of such
insurance, Employee shall be named as an insured in such manner as
to provide Employee the same rights and benefits as are accorded to
the most favorably insured of the Company’s officers or
directors.
11.
INDEMNIFICATION. In
addition to the insurance coverage described above and the
indemnification protection set forth in Article IX of the
Company’s Bylaws, the Company shall indemnify Employee to the
fullest extent permitted by applicable law if he is made, or
threatened to be made, a party to an action or proceeding, whether
civil, criminal, administrative or investigative (each a
“Proceeding”), by reason of the fact that Employee is
or was an officer, director, or employee of the Company or any of
its affiliates, against all “Expenses” (as defined
below) resulting from or related to such Proceeding, or any appeal
thereof. Any such indemnification pursuant to this section shall
continue as to Employee even if Employee has ceased to be an
executive, officer, director or employee of the Company and/or any
of its affiliates, and shall inure to the benefit of
Employee’s heirs, executors and administrators. Expenses
incurred by Employee in connection with any
indemnification-eligible Proceeding shall be paid by the Company in
advance upon request of Employee that the Company pay such
Expenses, (a) after receipt by the Company of a written request
from Employee for such advance, together with documentation
reasonably acceptable to the Board, and (b) subject to an
undertaking by Employee to pay back any advanced amounts for which
it is later determined that Employee was not entitled to
indemnification as described herein. Employee shall be entitled to
select his own counsel in connection with any
indemnification-eligible Proceeding. Notwithstanding the foregoing
provisions of this section to the contrary, the Company shall have
no obligation to indemnify Employee or advance Expenses to
Employee, (i) in connection with any claim or proceeding between
Employee and the Company (unless approved by the Board), or (ii) if
Employee’s actions or omissions giving rise to his status as
a party to a Proceeding involve intentional or willful misconduct
or malfeasance on the part of Employee in connection with the
performance of his job. For purposes of this section, the
term “Expenses” means any damages, losses, judgments,
liabilities, fines, penalties, excise taxes, settlements, costs,
reasonable attorneys’ fees, accountants’ fees, expert
fees, and disbursements and costs of attorneys, experts and
accountants.
Page 4
12.
RECORDS OWNERSHIP.
You acknowledge, understand, and agree that all files, records and
documents, whether in hard copy, electronic or any other form,
generated or received by the Company or its employees, or
concerning the Company or its business, belong to and constitute
the property of the Company and that the Company is the records
owner of all such files, records and documents. Therefore, upon
your separation from employment, all such files, records and
documents shall remain on the premises and in the possession of the
Company, and you shall promptly return any and all such files,
records and documents to the Company that you may then have, or at
any time thereafter you discover in your possession. You shall not
retain any copies of such files, records and
documents.
13.
INTANGIBLE
PROPERTY OWNERSHIP. You hereby irrevocably assign and transfer, and
agree to assign and transfer, to the Company all of your rights,
title and interest in and to any and all inventions and works you
create or modify (including, but not limited to software or other
works, designs, or the like) for or on behalf of the Company. You
hereby acknowledge and agree that such works are within the scope
of your employment or association, and that all intellectual
property rights, including copyright, inventions, designs, and
trade secrets, whether patentable or not, are the exclusive and
sole worldwide property of the Company. Copyrighted works developed
or created by you and owned by the Company include the right to
copy, license, market, manufacture, publish, distribute, create
derivative works from the works created, xxxx as copyrighted by the
Company, and to authorize others to do some or all of the foregoing
as needed or desired by the Company to carry out its business
purpose.
You
will not at any time during or after your employment or association
with the Company have or claim any right, title or interest in any
trade name, trademark, patent, copyright, work for hire, or other
similar rights belonging to or used by the Company. You shall not
have or claim any right, title or interest in any material or
matter of any sort prepared for or used in connection with the
business or promotion of the Company, whatever your involvement
with such matters may have been, and whether procured, produced,
prepared or published in whole or in part by you. You further
release and hereby assign all rights in any and all intellectual
property to the Company, and shall, at the request of the Company,
give evidence and testimony and execute any and all agreements or
other documents as needed to effect or memorialize any such
transfer of rights without encumbrance, and for the Company to
carry out its business purpose. You hereby irrevocably appoint the
Company as your attorney-in-fact (with a power couple with an
interest) to execute any and all documents which may be necessary
or appropriate in the security of such rights, including but not
limited to, any copyright in your work.
You
certify that all works pursuant to this Agreement are original
works and are not the property of others, and that any liability
from or caused by you in this regard is your sole responsibility.
You shall hold harmless and indemnify the Company from and against
any and all claims, actions, losses, costs, or other liabilities
based on or arising out of claimed infringement by the works of any
copyright or other intellectual property rights of any third party,
and you agree to cooperate in the defense of the Company against
any and all claims, actions, losses, costs, or other liabilities
based on or arising out of claimed infringement or any other action
by the works of any copyright or other intellectual property rights
of any third party at your expense.
Page 5
You
have attached hereto, as Exhibit A, a list detailing all
inventions, original works of authorship, developments,
improvements, and trade secrets which you made prior to the
commencement of this Agreement (collectively referred to as
“Prior Inventions”), which belong solely to you or
belong to you jointly with another, and which are not assigned to
the Company hereunder or, if no such list is attach, you represent
that there are no such Prior Inventions.
14.
TRADE
SECRETS AND CONFIDENTIAL INFORMATION. You agree to keep
confidential and not disclose to others any Trade Secrets or
Confidential and Proprietary Information, during the term of this
Agreement and for five (5) years thereafter, except as required by
law or as consented in writing by the Company’s CEO. You
agree that the Trade Secrets and Confidential and Proprietary
Information described herein are valuable information.
a.
Definition
of Trade Secrets; Confidential and Proprietary Information: Trade
Secrets and Confidential and Proprietary Information includes all
forms of information whether in oral, written, graphic, magnetic or
electronic form without limitation. Trade Secrets and Confidential
and Proprietary Information means, without limitation, the
Company’s client and prospective client names, addresses,
relationships, terms and information; suppliers’ names,
addresses, terms and information; financial information; business
and/or marketing plans; methods of operation; internal structure;
financial information and practices; products and services;
inventions; systems; devices; methods; ideas, procedures; client
lists and files; fee schedules; test data; descriptions; drawings;
techniques; algorithms; programs; designs; formula; software;
business management and methods; planning methods; sales and
marketing methods; valuable confidential business and professional
information; proprietary computer software; management information;
and all know-how, trade secrets, confidential information and any
other information developed by and belonging to the Company which
gives the Company a competitive advantage over others.
b.
Return
of Property: If you shall leave, separate or terminate from the
Company, you will neither take nor retain any file, record,
document, Trade Secrets or Confidential and Proprietary
Information, whether a reproduction, duplication, copy or original,
of any kind or nature developed by, compiled by or belonging to the
Company.
c.
Trade
Secret Law: Nothing in this Agreement shall limit or supersede any
common law, statutory or other protections of Trade Secrets where
such protections provide the Company with greater rights or
protections for a longer duration than provided in this Agreement.
With respect to the disclosure of a Trade Secret and in accordance
with 18 U.S.C. § 1833, you shall not be held criminally or
civilly liable under any federal or state trade secret law for the
disclosure of a Trade Secret that, (i) is made in confidence to a
federal, state or local government official, either directly or
indirectly, or to an attorney, provided that, the information is
disclosed solely for the purpose of reporting or investigating a
suspected violation of law, or (ii) is made in a complaint or other
document filed in a lawsuit or other proceeding filed under seal so
that it is not disclosed to the public. You are further notified
that if you file a lawsuit for retaliation by the Company for
reporting a suspected violation of law, you may disclose the Trade
Secrets of the Company to your attorney and use the Trade Secret
information in the court proceeding, provided that, you file any
document containing the Trade Secret under seal so that it is not
disclosed to the public and does not disclose the Trade Secret,
except pursuant to court order.
Page 6
15.
NO
PRIOR COVENANT NOT TO COMPETE. You warrant and represent that
except for this Agreement and except as otherwise disclosed in
writing to the Company, (a) you are not presently subject to any
contract or understanding that restricts in any manner your ability
to provide services to the Company; (b) you have performed all
duties and obligations that you may have under any contract or
agreement with a former employer (or other party) including but not
limited to the return of all confidential information; and (c) you
are currently not in possession of any confidential materials or
property belonging to any former employer (or other party).
Further, you agree to defend, indemnify, and hold the Company
harmless from and against any demands, claims, obligations, causes
of action, diminution in the value of the Company, damages,
liabilities, costs, expenses, interest, and fees, which the Company
may incur due to, (a) any conflict between your employment with the
Company and any prior employment or association, duty contract,
agreement, order or restrictive covenant, or (b) any
misrepresentation by you as to any facts which are the subject
matter of any conflict or violation of any prior contract,
agreement, order or restrictive covenant on your part.
16.
COVENANT
NOT TO COMPETE. You acknowledge that you are familiar with
restrictive covenants of this nature, the covenant is a material
inducement to this Agreement and your employment, the Company will
suffer irreparable injury if you violate this restrictive covenant,
and the covenant is fair and reasonable to protect the
Company’s trade secrets, confidential and proprietary
information, relationships with prospective and existing clients,
goodwill, and/or other legitimate business interests. You further
agree that your work with the Company has provided and will provide
you extraordinary and specialized training, knowledge and
information over the Company’s techniques, methods, products
and systems; the Company’s valuable confidential proprietary
and business information which you would not otherwise acquire; and
access to its substantial relationships with present and
prospective clients and substantial goodwill associated with its
name. This covenant is intended to protect the Company’s
legitimate business interests which include but are not limited to
the extraordinary and specialized training of its employees;
valuable confidential and proprietary business and professional
information; substantial relationships with prospective and
existing clients; client good will associated with the
Company’s ongoing professional and business practice and
trade name in the fields of business and financial software and
related professional activities throughout North America and
globally. Accordingly, you agree that while employed by the Company
and for the one (1) year period following your separation or
termination (with or without cause) (referenced herein as
“the Restricted Period):
a.
Non-competition:
You shall not engage, directly or indirectly, as principal, agent,
advisor, stockholder, consultant, partner, independent contractor,
or employee or in any other manner in any business or activity
which is in competition with the Company anywhere the Company does
or has plans to do business.
b.
Non-Solicitation
of Customers: You shall not directly or indirectly induce or
attempt to induce current clients of the Company to do business
with any Competitor of the Company.
Page 7
c.
Non-Solicitation
of Employees: You shall not directly or indirectly induce or
attempt to induce any of the officers, agents, employees, or
associates of the Company to leave the employment or association of
the Company.
d.
Definition of Competitor: For purposes of this
Agreement, the term “Competitor” shall mean any
business entity that is engaged in the same or similar business as
the Company or which may propose to go into competition with the
Company. The term shall include, without limitation: HubSpot,
Marketo, Xxxxxxxxxx.xxx, Act-On, Eloqua and Responsys (both part of
Oracle), Constant Contact, iContact, MailChimp, Infusionsoft, J2 Global
(Campaigner), and Feathr. This list of businesses is not intended
to be an exclusive list.
Nothing
herein shall prohibit you from purchasing or owning less than five
percent (5%) of the publicly traded securities of any corporation,
provided that such ownership represents a passive investment and
that you are not a controlling person of, or a member of a group
that controls, such corporation.
17.
REMEDIES
FOR BREACH OF RESTRICTIVE COVENANTS. The Company is entitled to
obtain equitable relief, including specific performance by means of
injunctions, as well as monetary damages and any other available
remedies. In the event a court of competent jurisdiction determines
these restrictive covenants are not enforceable as written herein,
the court will reform or modify the restrictive covenants(s) to
make it (them) reasonable and enforceable, and the court will
enforce the restrictive covenants(s) as so reformed or modified.
Assignees and successors of the Company are expressly authorized to
enforce these restrictive covenants. The restrictive covenants of
this Agreement shall not be interpreted to employ any rule of
contract construction that requires construing a restrictive
covenant narrowly, against the restraint, or against the drafter of
this Agreement. Further, you understand that any and all
obligations of the Company to pay any compensation to you for any
reason shall cease and terminate upon your breach of any of the
obligations in this Employee Agreement.
18.
NOTIFICATION
OF INTERESTED PARTIES. You agree that the Company may notify anyone
employing or engaging you to perform services or evidencing an
intention to employ you now or in the future as to the existence
and provisions of this Agreement. You shall, during the restricted
period, (1) inform anyone employing or engaging you or evidencing
an intent to employ or engage you, of the existence of the
restrictive covenants in this Agreement, and (2) notify the Company
of the name, address, and telephone number of anyone who employs or
engages you to perform services.
19.
WAIVERS.
The Company’s waiver of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any
subsequent breach.
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21.
INDEPENDENT
RESTRICTIVE COVENANTS AND SEVERABILITY. The provisions of this
Agreement are independent of and separate from each other and from
any other agreements. The breach, invalidity or unenforceability of
any provision or part of any provision in this Agreement or any
other agreements shall not in any way affect the validity or
enforceability of any other provision or part of provision of this
Agreement. The existence of any claim or cause of action by you
against the Company shall not constitute a defense to the
enforcement of these provisions.
22.
MODIFICATION.
If any one or more of the provisions of this Agreement are held
unenforceable or invalid by any court of competent jurisdiction, or
are voided or nullified for any reason, then, to the extent allowed
by applicable law, each such provision shall be interpreted to the
fullest extent possible so as to be valid and effective, the
remaining provisions of this Agreement shall continue in full force
and effect, and this Agreement as so construed shall be binding on
the parties so as to carry out the intent and purposes of the
parties as nearly as possible.
23.
ARBITRATION
OF DISPUTES. If a dispute arises out of or relates to this Employee
Agreement, or the breach thereof, and if the dispute cannot be
settled through negotiation, the parties agree first to try in good
faith to settle the dispute by mediation administered by the
American Arbitration Association under its Employment Mediation
Rules before resorting to arbitration, litigation or some other
dispute resolution procedure.
24.
ENTIRE
AGREEMENT. This Agreement comprises the entire agreement and
understanding by the parties regarding the topics contained herein;
no representations, promises, agreements, or understandings,
written or oral, relating hereto but not contained herein, shall be
of any force or effect. This Agreement may be amended only in
writing and by mutual agreement of the parties.
25.
ATTORNEYS’
FEES AND COSTS. If any litigation proceedings are brought arising
out of or related to the terms of this Agreement, the successful
prevailing party will be entitled to reimbursement for all
reasonable costs, including reasonable attorneys’
fees.
26.
ACKNOWLEDGEMENT.
Employee acknowledges that he has had the benefit of independent
professional counsel with respect to this Agreement and that the
Employee is not relying upon the Company, the Company’s
attorneys or any person on behalf of or retained by the Company for
any advice or counsel with respect to this Agreement.
27.
CONSISTENCY
WITH APPLICABLE LAW. Employee acknowledges and agrees that nothing
in this Agreement prohibits Employee from reporting possible
violations of law to any governmental agency or entity or making
other disclosures that are protected under the whistleblower
provisions of federal, state or local laws or
regulations
28.
NUMBER
OF PAGES. This Agreement, including the signatures and excluding
Exhibits, is comprised of ten (10) pages.
Page 9
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Employee: Xxxxx
Xxxxxxx
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Date
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/s/ Xxxx
Xxxxxxx
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Xxxx Xxxxxxx, CEO and President
for SharpSpring Technologies, Inc.
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Date
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Page
10
Exhibit A
NONE
Page
11
