UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549


FORM 8-K


CURRENT REPORT


Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported)  December 19, 2014


[SCRI_8K001.JPG]

SOCIAL REALITY, INC.

(Exact name of registrant as specified in its charter)


Delaware

000-54996

42-2925231

(State or other jurisdiction of
incorporation or organization)

(Commission File Number)

(I.R.S. Employer
Identification No.)


456 Seaton Street, Los Angeles, CA   90013

(Address of principal executive offices)(Zip Code)


Registrant's telephone number, including area code :   (323) 283-8505


not applicable

(Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


o

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


o

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


o

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


o

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 






Item 1.01

Entry into a Material Definitive Agreement.


On December 19, 2014 Social Reality, Inc. acquired 100% of the outstanding capital stock of Five Delta, Inc., a Delaware corporation (" Five Delta "), in exchange for 600,000 shares of our Class A common stock pursuant to the terms and conditions of the Share Acquisition and Exchange Agreement dated December 19, 2014 (the " Five Delta Agreement ") by and among Social Reality, Five Delta and the stockholders of Five Delta.


Five Delta is a managed advertising service that uses proprietary technology and methods to optimize digital advertising for its customers. Five Delta primarily utilizes high quality first party data from major platforms like Facebook, Yahoo, LinkedIn and Google in optimization decisions. Five Delta's goal is to maximize marketing budget utility while simultaneously reporting clear and actionable information to its clients.


Under the terms of the Five Delta Agreement, 300,000 shares of the Class A common stock (the " Escrow Shares ") were deposited in escrow by the holders with the escrow agent pending satisfaction of certain post-closing conditions as described in the agreement. If these post-closing conditions are not satisfied by the second annual anniversary of the closing date, all or a portion of the Escrow Shares are subject to forfeiture. While the Escrow Shares remain in escrow, the holders granted Mr. Chris Miglino, our Chief Executive Officer, a voting proxy over the Escrow Shares. The Five Delta stockholders also granted us a right of first refusal over the shares of our Class A common stock tendered as consideration for a four year period from the closing date.


At closing we entered into an Employment Agreement with Mr. Dustin Suchter, Five Delta's Chief Executive Officer, which is described later in this report. Under the terms of the Five Delta Agreement, Mr. Suchter agreed to a non-compete for a period of four years following the termination date of his Employment Agreement.


The Five Delta stockholders also entered into 24 month Lock Up Agreements at the closing of the Five Delta Agreement. The Lock Up Agreements provide that one-half of our shares of Class A common stock acquired in the transaction will be released from the lock up on the one year anniversary of the closing date, with the balance released on the two year anniversary of the closing date. Following the release of any of the shares from the Lock Up Agreement, the holders agreed to limit the resale of such shares based upon a numerical formula tied to the trading volume of our Class A common stock and agreed that all permitted resales will be made at the then current bid price of our Class A common stock. The lock up automatically terminates upon a change of control of our company.


The foregoing descriptions of the Five Delta Agreement and the form of Lock Up Agreement are not complete and are qualified in their entirety by reference to the full and complete terms of these agreements which are filed as Exhibits 10.34 and 10.35 to this report and incorporated herein by such references.


Item 7.01

Regulation FD Disclosure.


On December 22, 2014 we issued a press release announcing the acquisition of Five Delta. A copy of this press release is furnished as Exhibit 99.1 to this report.


Pursuant to General Instruction B.2 of Form 8-K, the information in this Item 7.01 of Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise be subject to the liabilities of that section, nor is it incorporated by reference into any filing of Social Reality under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof, regardless of any general incorporation language in such filing.





Item 8.01

Other Events.


On December 19, 2014 we entered into an Employment Agreement with Mr. Dustin Suchter. The initial term of the agreement expires on December 19, 2018, subject to automatic 12 month extensions unless a non-renewal notice is received by either party at least 60 days prior to the expiration of the then current renewal term. Mr. Suchter’s compensation includes: (i) an annual salary of $84,000, subject to increase at the discretion of the board of directors; (ii) a quarterly bonus equal to 10% of the operating profit of our direct business unit; (iii) a discretionary bonus as may be awarded at the discretion of our board; (iv) options to purchase 100,000 shares of our Class A common stock, at an exercise price of $1.26 per share, vesting in eight equal installments; (v) a restricted stock grant of 50,000 shares of our Class A common stock vesting on December 19, 2015; and (vi) paid time off of 25 days per calendar year, subject to accrual limitations. Mr. Suchter is entitled to severance in an amount equal to (x) 12 months of his annual base salary in the event he is terminated without “cause” or resigns for “good reason” each as defined in the Employment Agreement, or if the termination occurs during the last 12 months of the then current term, an amount equal to his base salary for the remaining months under the term, plus (y) an amount equal to the greater of his most recent bonus, calculated on an annualized basis, or $116,000. The Employment Agreement contains a customary non-solicitation and invention assignments clause and Mr. Suchter executed separate confidentiality and arbitration agreements with our company.


The foregoing description of the Employment Agreement with Mr. Suchter is not complete and is qualified in its entirety by reference to the full and complete terms of the Employment Agreement which is filed as Exhibit 10.36 to this report and incorporated herein by reference.


Item 9.01

Financial Statements and Exhibits.


(d)

Exhibits .


Exhibit

No.

 

Description

 

 

 

10.34

 

Share Acquisition and Exchange Agreement dated December 19, 2014 by and among Social Reality, Inc., Five Delta, Inc. and the Stockholders of Five Delta, Inc. **

10.35

 

Form of Lock Up Agreement dated December 19, 2014 by and between Social Reality, Inc. and each of the Five Delta stockholders

10.35

 

Employment Agreement dated December 19, 2014 by and between Social Reality, Inc. and Dustin Suchter

99.1

 

Press release dated December 22, 2014

———————

**

Exhibits and schedules omitted pursuant to Item 601(b)(2) of Regulation S-K. Social Reality, Inc. agrees to furnish a supplemental copy of an omitted exhibit or schedule to the SEC upon request.









SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

SOCIAL REALITY, INC.

 

 

 

Date: December 22, 2014

By:

/s/ Carrie McQueen

 

 

Carrie McQueen, Chief Financial Officer









Exhibit Index


Exhibit

No.

 

Description

 

 

 

10.34

 

Share Acquisition and Exchange Agreement dated December 19, 2014 by and among Social Reality, Inc., Five Delta, Inc. and the Stockholders of Five Delta, Inc.

10.35

 

Form of Lock Up Agreement dated December 19, 2014 by and between Social Reality, Inc. and each of the Five Delta stockholders

10.35

 

Employment Agreement dated December 19, 2014 by and between Social Reality, Inc. and Dustin Suchter

99.1

 

Press release dated December 22, 2014




Exhibit 10.34












SHARE ACQUISITION AND EXCHANGE AGREEMENT


Dated December 19, 2014


by and among


Social Reality, Inc.


Five Delta, Inc.


the Stockholders of Five Delta, Inc.


and


Pearlman Schneider LLP as Escrow Agent











TABLE OF CONTENTS


 

 

Page

 

 

 

1.

DEFINITIONS AND INTERPRETATION

5

 

 

 

2.

ACQUISITION OF FIVE DELTA BY SOCIAL REALITY; CLOSING; ESCROW SHARES

10

 

 

 

2.1

Exchange of the Five Delta Shares for Social Reality Shares

10

2.2

Closing

10

2.3

Stockholders’ and Five Delta’s Closing Deliveries

10

2.4

Social Reality's Closing Deliveries

11

2.5

Escrow Shares

11

 

 

 

3.

REPRESENTATIONS AND WARRANTIES OF FIVE DELTA

15

 

 

 

3.1

Power and Authority

15

3.2

Consents and Approvals

16

3.3

Authorized and Issued Capital Stock

16

3.4

Subsidiaries

16

3.5

Undisclosed Liabilities

16

3.6

Intellectual Property

17

3.7

Personal Property

17

3.8

Real Property

17

3.9

Litigation and Complaints

18

3.10

Employees; Benefits

18

3.11

Tax Matters

18

3.12

Financial Statements

19

3.13

Contracts

19

3.14

Compliance with Laws

19

3.15

No Adverse Changes

19

3.16

Insurance

20

3.17

Incorporation or Formation Documents; Minute Books

20

3.18

Brokers

20

 

 

 

4.

REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS

20

 

 

 

4.1

Power and Authority

20

4.2

Ownership of Five Delta Shares

20

4.3

Consents and Approvals

21

4.4

Investment Representations

21

4.5

Information on Stockholders

22

4.6

Access to Counsel

22

 

 

 




2






5.

REPRESENTATIONS AND WARRANTIES OF SOCIAL REALITY

22

 

 

 

5.1

Power and Authority of Social Reality

22

5.2

Consents and Approvals

23

5.3

Litigation; Complaints; Government Inquiries

23

5.4

Financial Statements

24

5.5

Compliance with Laws

24

5.6

No Adverse Changes

24

5.7

Exchange Act Reports

24

5.8

Trading

24

 

 

 

6.

COVENANTS; ADDITIONAL AGREEMENTS

25

 

 

 

6.1

Affirmative Covenants

25

6.2

Negative Covenants of Five Delta

25

6.3

Access and Information

26

6.4

Confidential Information

26

6.5

Additional Covenants of Social Reality, Five Delta and the Stockholders

27

 

 

 

7.

CLOSING CONDITIONS

27

 

 

 

7.1

Conditions to the Obligations of the Stockholders to Close

27

7.2

Conditions to Social Reality's Obligation to Close

27

 

 

 

8.

TERMINATION

28

 

 

 

8.1

Termination

28

8.2

Effect of Termination

28

 

 

 

9.

RIGHT OF FIRST REFUSAL

29

 

 

 

9.1

Right of First Refusal

29

9.2

BFO Notice; Procedures to be Followed

29

9.3

Closing

30

9.4

Transfer Void; Equitable Relief

29

9.5

Exempted Transfers

30

9.6

Prohibited Transfers

31

 

 

 

10.

NON-COMPETITION; NON-SOLICITATION

31

 

 

 

11.

NOTICES

32

 

 

 




3






12.

MISCELLANEOUS

32

 

 

 

12.1

Entire Agreement

32

12.2

Waiver

32

12.3

Amendment

32

12.4

Construction

32

12.5

Assignment

33

12.6

Costs and Expenses

33

12.7

Non-Impairment of Rights

33

12.8

Counterparts

33

12.9

Governing Law

33


S CHEDULES


3.3

Five Delta Derivative Securities

3.6

Five Delta Intellectual Property Rights

3.8

Five Delta Real Property

3.10

Five Delta Employee Benefits

3.11

Five Delta Tax Matters

3.12

Five Delta Financial Statements

3.13

Five Delta Contracts

3.14

Five Delta Compliance with Laws

3.15

Five Delta Adverse Changes

10.10

Exemption from Competitive Activities




4





SHARE ACQUISITION AND EXCHANGE AGREEMENT


This Share Acquisition and Exchange Agreement (“ Agreement ”) dated December 19, 2014, is between and among Social Reality, Inc. (" Social Reality ”), a corporation organized under the laws of the State of Delaware, having an office for the transaction of business at 456 Seaton Street, Los Angeles, CA 90013, Five Delta, Inc., (“ Five Delta ”), a corporation organized under the laws of the State of Delaware, having an office for the transaction of business at 3100 Donald Douglas Loop North, Hangar #7, Santa Monica, CA  90405, the stockholders of Five Delta listed on the signature page and Exhibit A hereto, constituting all of the stockholders of Five Delta (collectively, the “ Stockholders ” and individually a “ Stockholder ”), each having an address set forth on Exhibit A hereto, and Pearlman Schneider LLP, a limited liability partnership organized under the laws of the State of Florida, and having an office for the transaction of business at 2200 Corporate Boulevard, N.W., Suite 210, Boca Raton, FL  33431 (the “ Escrow Agent ”).


WHEREAS , the Stockholders own all of the issued and outstanding shares of Five Delta (“ Five Delta Shares ”); and


WHEREAS , Social Reality desires to acquire from the Stockholders, and the Stockholders desire to sell to Social Reality, all of the Five Delta Shares in exchange (the “ Exchange ”) for the issuance by Social Reality of an aggregate of Six Hundred Thousand (600,000) shares (the “ Social Reality Shares ”) of the Social Reality Class A common stock, par value $0.001 per share (the “ Social Reality Common Stock ”), making Five Delta a wholly-owned subsidiary of Social Reality, on the terms and conditions set forth below;


WHEREAS , certain of the Social Reality Shares shall be subject to escrow and subject to forfeiture pending the certain conditions as hereinafter set forth; and


WHEREAS , it is the intention of the parties hereto that: (i) the Exchange shall qualify as a transaction exempt from registration or qualification under the Securities Act of 1933, as amended (the “ Securities Act ”), and (ii) the Exchange shall qualify as a “tax-free” transaction within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended (the “ Code ”).


NOW, THEREFORE , in consideration of the foregoing, and the mutual terms, covenants and conditions herein below set forth, the parties agree, as follows:


1.

DEFINITIONS AND INTERPRETATION


1.1

Definitions.  In this Agreement:


Affiliate ” means, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person, and the term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct



5





or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise.


" Balance Sheet Date " means September 30, 2014;


Business ” means the use of the Facebook API platform by Five Delta to programmatically create and control marketing campaigns.


Closing Shares ” means an aggregate of Three Hundred Thousand (300,000) Social Reality Shares to be issued to the Stockholders in the amounts set forth opposite their respective names on Exhibit A hereto;


" Commission " means the United States Securities and Exchange Commission;


Escrow Shares ” means an aggregate of Three Hundred Thousand (300,000) Social Reality Shares to be issued to the Stockholders in the amounts set forth opposite their respective names on Exhibit A hereto and deposited into escrow with the Escrow Agent at Closing pending the satisfaction of the Post-Closing Conditions;


" Exchange Act " means the United States Securities Exchange Act of 1934, as amended;


" Five Delta Financial Statements " means the unaudited financial statements for the years ended December 31, 2013 and 2013, the Balance Sheet and the unaudited income statement for the nine months ended September 30, 2014;


GAAP ” means U.S. generally accepted accounting principles consistently applied.


" Governmental Entity " means any federal, state or local government or any court, administrative or regulatory agency or commission or other governmental authority or agency, domestic or foreign;


Gross Profit Post-Closing Condition ” means after the Closing Date Five Delta shall report a gross profit calculated in accordance with GAAP for one (1) fiscal quarter;


" Income Tax " means any federal, state, local, or foreign income tax, including any interest, penalty, or addition thereto, whether disputed or not;


" Income Tax Return " means any return, declaration, report, claim for refund, or information return or statement relating to any Income Tax, including any schedule or attachment thereto, and including any amendment thereof;




6





" Intellectual Property Right " means all (i) patents, patent applications, patent disclosures and inventions, (ii) trademarks, service marks, trade dress, trade names, URL's, logos and corporate names and registrations and applications for registration thereof, together with all of the goodwill associated therewith, (iii) copyrights (registered or unregistered) and copyrightable works and registrations and applications for registration thereof, (iv) mask works and registrations and applications for registration thereof, (v) computer software, data, data bases and documentation thereof, (vi) trade secrets and other confidential information (including ideas, formulas, compositions, inventions (whether patentable or unpatentable and whether or not reduced to practice), know-how, manufacturing and production processes and techniques, research and development information, drawings, specifications, designs, plans, proposals, technical data, copyrightable works, financial and marketing plans and customer and supplier lists and information), (vii) other intellectual property rights and (viii) copies and tangible embodiments thereof (in whatever form or medium);


" Liability " or " Liabilities " mean any and all debts, liabilities, commitments and obligations, whether fixed, contingent or absolute, matured or unmatured, liquidated or unliquidated, accrued or not accrued, known or unknown, whenever or however arising (including whether arising out of any contract or tort based on negligence or strict liability) and whether or not the same would be required by GAAP to be reflected in financial statements or disclosed in the notes thereto;


" Lien " means any right which (a) shall entitle any Person to terminate, amend, accelerate or cancel any agreement, option, license or other instrument to which Social Reality, Five Delta or any Stockholder is a party by reason of the occurrence of (i) a violation, breach or default thereunder by Social Reality, Five Delta or any Stockholder, as the case may be; or (ii) an event which with or without notice or lapse of time or both would become a default thereunder; or (b) if exercised by the holder thereof, will (i) entitle such Person to accelerate the performance of any obligations or the payment of any sums owed by Social Reality, Five Delta or any Stockholder, as the case may be, under any agreement, option, license or other instrument, or (ii) result in any loss of any benefit under, or the creation of any pledges, claims, equities, options, liens, charges, call rights, rights of first refusal, "tag" or "drag" along rights, encumbrances and security interests of any kind or nature whatsoever on any of the property or assets of Social Reality, Five Delta or any Stockholder;


" Material Adverse Effect " means any effect or change that would be materially adverse to the business, assets, condition (financial or otherwise), operating results, operations, or business prospects of Social Reality, Five Delta or any Stockholder, as the case may be, taken as a whole, or on the ability of any Party to consummate timely the transactions contemplated hereby;


" Person " means a natural person, company, corporation, partnership, association, trust or any unincorporated organization;


PMD Post-Closing Condition ” means after the Closing Date Social Reality shall have received preferred marketing developer (PMD) status from Facebook, Inc.;




7






Post-Closing Conditions ” means the Gross Profit Post-Closing Condition and the PMD Post-Closing Condition;


" Rule 144 " means Rule 144 promulgated by the Commission under the Securities Act;


" Social Reality Reports " has the meaning attributed to such term in Section 5.10.1;


" Subsidiary " means, with respect to any Person, any corporation, limited liability company, partnership, association, or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof or (ii) if a limited liability company, partnership, association, or other business entity (other than a corporation), a majority of partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof and for this purpose, a Person or Persons own a majority ownership interest in such a business entity (other than a corporation) if such Person or Persons shall be allocated a majority of such business entity's gains or losses or shall be or control any managing director or general partner of such business entity (other than a corporation). The term "Subsidiary" shall include all Subsidiaries of such Subsidiary;


" Tax " or " Taxes " means any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code §59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not;


" Taxation Authority " means any federal, state, local or foreign governmental agency, department or other entity which is authorized by applicable law to assess and collect Taxes;


" Tax Return " means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof;


Termination Date ” shall have the same meaning as in the Employment Agreement to be entered into between Social Reality and Suchter at Closing in accordance with the provisions of Section 7.2.8 hereof; and




8





" Treas. Reg ." means the regulations promulgated by the United States Department of the Treasury under the Code, as amended.


1.2

Interpretation .


1.2.1

As used in this Agreement, unless the context clearly indicates otherwise:


(a)

words used in the singular include the plural and words in the plural include the singular;


(b)

reference to any Person includes such person's successors and assigns, but only if such successors and assigns are permitted by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity;


(c)

reference to any gender includes the other gender;


(d)

whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation" or "but not limited to" or words of similar import;


(e)

reference to any Section means such Section of this Agreement, and references in any Section or definition to any clause means such clause of such Section or definition;


(f)

the words "herein," "hereunder," "hereof," "hereto" and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Section or other provision hereof;


(g)

reference to any agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and by this Agreement;


(h)

reference to any law (including statutes and ordinances) means such law (including all rules and regulations promulgated thereunder) as amended, modified, codified or reenacted, in whole or in part, and in effect at the time of determining compliance or applicability, and reference to any particular provision of any law shall be interpreted to include any revision of or successor to that provision regardless of how numbered or classified;


(i)

relative to the determination of any period of time, "from" means "from and including," "to" means "to but excluding" and "through" means "through and including"; and




9





(j)

the titles and headings of Sections contained in this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of or to affect the meaning or interpretation of this Agreement.


1.2.2

This Agreement was negotiated by the parties with the benefit of legal representation, and no rule of construction or interpretation otherwise requiring this Agreement to be construed or interpreted against any party shall apply to any construction or interpretation hereof. This Agreement shall be interpreted and construed to the maximum extent possible so as to uphold the enforceability of each of the terms and provisions hereof, it being understood and acknowledged that this Agreement was entered into by the parties after substantial negotiations and with full awareness by the parties of the terms and provisions hereof and the consequences thereof.


1.2.3

Where a statement in this Agreement is qualified by the expression "to the best of Social Reality’s knowledge," "to the best of Five Delta’s knowledge," "to the best of the Stockholder’s knowledge,” "so far as Social Reality is aware," "so far as Five Delta is aware" or "so far as the Stockholder is aware" or any similar expression shall be deemed to include Social Reality’s, Five Delta’s or the Stockholder’s actual knowledge and what Social Reality, Five Delta or the Stockholder should have known after due and careful inquiry of, in the case of Social Reality and Five Delta, the President, the members of the Board of Directors and any relevant person(s) involved in the management of the business of Social Reality and Five Delta.


2.

ACQUISITION OF FIVE DELTA BY SOCIAL REALITY; CLOSING; ESCROW SHARES


2.1

Exchange of the Five Delta Shares for the Social Reality Shares. On the Closing Date, the Stockholders shall exchange, transfer and assign all of the Five Delta Shares to Social Reality, and Social Reality shall issue and deliver to the Stockholders the Social Reality Shares in the amounts to each Stockholder as set forth in Exhibit A hereto, subject to the conditions of this Agreement.


2.2

Closing. Closing of the Exchange (“ Closing ”) shall take place at the offices of Social Reality. All actions taken at the Closing shall be deemed to have been taken simultaneously at the time the last of any such actions is taken or completed. The Closing shall occur on the first business day following the satisfaction of the closing conditions described in Section 7 herein (the “ Closing Date ”) or at such other place, and on such other date, as the Parties may agree in writing.


2.3

Stockholders’ and Five Delta Closing Deliveries . At or prior to the Closing, the Stockholders and or Five Delta shall deliver to Social Reality the following:

(a)

incorporation or formation documents and amendments thereto, certificate of good standing in Five Delta’s jurisdiction of incorporation;

(b)

all applicable schedules hereto;



10





(c)

all minutes and resolutions of board of director and stockholder meetings in possession of Five Delta;

(d)

all financial statements and tax returns in possession of the Company;

(e)

copies of board, and if applicable, stockholder resolutions approving this transaction and authorizing the issuances of the shares hereto; and

(f)

any other document reasonably requested by Social Reality that it deems necessary for the consummation of this transaction.


2.4

Social Reality's Closing Deliveries . At or prior to the Closing, Social Reality shall deliver to the Stockholders the following:


(a)

all applicable schedules hereto; and


(b)

certificates representing Closing Shares and the Escrow Shares issued in the denominations as set forth opposite the respective names of the Stockholders as set forth on Exhibit A on the Closing Date, duly authorized, validly issued, fully paid for and non-assessable. The certificates representing the Closing Shares and the Escrow Shares will bear the following or similar legends:


“The sale, gift, hypothecation or other transfer or disposition of the shares of Social Reality, Inc. Class A common stock represented by this certificate are restricted by the terms of the Share Acquisition and Exchange Agreement dated December 19, 2014 by and between the holder and Social Reality, Inc., a copy of which is on file at the principal executive offices of Social Reality, Inc.”


2.5

Escrow Shares .  


(a)

At Closing, Mr. Brock Pierce (“ Pierce ”) and Mr. Dustin Suchter (“ Suchter ”), two of the Stockholders (collectively, the “ Escrow Stockholders ”), shall deposit with the Escrow Agent (the “ Escrow Account ”) certificates representing the Escrow Shares in the amounts set forth on Exhibit A .  This Agreement and the escrow created hereunder shall not become effective unless and until the certificates representing the Escrow Shares has been deposited with the Escrow Agent. During the pendency of the Escrow Account, the Escrow Agent shall hold and keep such certificates representing the Escrow Shares in its possession and such shares shall not be sold, assigned, transferred, pledged, or otherwise hypothecated by it during the term of the Escrow Account.  


(b)

The Escrow Agent shall disburse the Escrow Shares, as follows:


(i)

At such time as the Gross Profit Post-Closing Condition has been satisfied in full, on or before the second annual anniversary of the Closing, Social Reality and the Escrow Stockholders shall provide the Escrow Agent with written notice thereof,



11





signed by Social Reality and the Escrow Stockholders, upon receipt of same the Escrow Agent shall immediately deliver the one-half of the Escrow Shares to the Escrow Stockholders in the amounts set forth on Exhibit A ; and


(ii)

At such time as the PMD Post-Closing Condition has been satisfied in full, on or before the second annual anniversary of the Closing, Social Reality and the Escrow Stockholders shall provided the Escrow Agent with written notice thereof, signed by Social Reality and the Escrow Stockholders, upon receipt of same the Escrow Agent shall immediately deliver the one-half of the Escrow Shares to the Escrow Stockholders in the amounts set forth on Exhibit A ; or


(ii)

If the either the Gross Profit Post-Closing Conditions and/or the PMD Post-Closing Condition have not been met prior the second annual anniversary of the Closing, Social Reality and the Escrow Stockholders shall provide the Escrow Agent with written notice thereof, signed by Social Reality and the Escrow Stockholders.  In such event, the Escrow Stockholders shall forfeit any interests in the Escrow Shares which have not previously been released in accordance with this Section 2.5(b), the Escrow Agent shall release the all or any remaining portion of the Escrow Shares to Social Reality and such shares shall be cancelled and returned to the status of authorized but unissued shares of Social Reality Common Stock.  


Upon disbursement of the Escrow Shares as set forth in this Section 2.5(b), the Escrow Account shall terminate.


(c)

So long as the Escrow Shares remain in the Escrow Account, each of Suchter and Pierce hereby irrevocably appoint Christopher Miglino, Chief Executive Officer of Social Reality, as his attorney-in-fact and proxy, with full power of substitution, for and in his name, place and stead, to attend all meetings of stockholders of Social Reality, regular or special, whenever and wherever held, and any and all adjournments thereof, and thereat to vote the number of Escrow Shares set forth on Exhibit A which he would be entitled to vote if personally present at said meetings, or any and all adjournments thereof for all purposes; or to express consent or dissent to corporate action in writing without a meeting in accordance with the laws of the State of Delaware for all matters relating to Social Reality, all as fully and to the same effect as he might or could do if personally present at said meetings or at such adjournment or adjournments thereof or signed such writing; each of Suchter and Pierce hereby ratifying and confirming all that said attorney and proxy may lawfully do or cause to be done by virtue thereof.  


(d)

At any time, the Escrow Agent, in its sole discretion, may commence an action in the nature of interpleader in any court it deems appropriate, to determine ownership or disposition of the Escrow Shares or it may deposit the Escrow Shares with the clerk of any appropriate court or it may retain the Escrow Shares pending receipt of a final, nonappealable order of a court having jurisdiction over all of the parties hereto directing to whom and under what circumstances the Escrow Shares are to be disbursed and delivered.  During the pendency of any such action, the Escrow Agent may suspend the performance of any of its obligations under this Agreement until such dispute or uncertainty shall be resolved to the sole satisfaction of Escrow Agent or until a successor Escrow Agent shall have been appointed (as the case may be).  The Escrow Agent shall have no liability to the parties hereto or any other



12





person with respect to any such suspension of performance or disbursement into court, specifically including any liability or claimed liability that may arise, or be alleged to have arisen, out of or as a result of any delay in the disbursement of funds held in the Escrow Account or any delay in or with respect to any other action required or requested of Escrow Agent.  


(e)

The acceptance by the Escrow Agent of its duties as such under this Agreement is subject to the following terms and conditions, which all parties to this Agreement hereby agree shall govern and control with respect to the rights, duties, liabilities and immunities of the Escrow Agent:


(i)

The Escrow Agent shall not be liable for any error in judgment or mistake of law or fact, or for any action taken or omitted to be taken by it, or any action suffered by it to be taken or omitted by it, in good faith and in the exercise of its own best judgment.  The Escrow Agent shall not be liable for any delay in delivering Escrow Shares as required hereby, absent its own gross negligence or willful misconduct;


(ii)

The Escrow Agent may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Escrow Agent other than itself), statement, instrument, report or other paper or document (not only as to its due execution and validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) which is believed by the Escrow Agent to be genuine and to be signed or presented by the proper person or persons;  


(iii)

The Escrow Agent shall not be bound by any notice or demand, or any waiver, modification, termination or rescission of this Agreement unless evidenced by a writing delivered to the Escrow Agent signed by Social Reality, Five Delta and the Stockholders and, if the duties or rights of the Escrow Agent are affected by any such modification of or waiver under this Agreement, unless the Escrow Agent shall have given its prior written consent thereto;


(iv)

The Escrow Agent acts hereunder as a depositary only, and shall not be responsible for the sufficiency or accuracy, the form of, or the execution, validity, value or genuineness of any document or property received, held or delivered by it hereunder, or of any signature or endorsement thereon, or for any lack of endorsement thereon, or for any description therein, nor shall the Escrow Agent be responsible or liable in any respect on account of the identity, authority or rights of the persons executing or delivering or purporting to execute or deliver any document or property paid or delivered by the Escrow Agent pursuant to the provisions hereof.  The Escrow Agent shall be entitled to rely upon the notices to be provided to it pursuant to Section 2.5(b) hereof and shall have no responsibility to independently ascertain if the Post-Closing Conditions have or have not been satisfied;


(v)

The Escrow Agent shall have the right to assume, in the absence of written notice to the contrary from Social Reality, Five Delta and the Stockholders, that a fact or an event by reason of which an action would or might be taken by the Escrow Agent does not exist or has not occurred, without incurring liability for any action taken or



13





omitted, in good faith and in the exercise of its own best judgment, in reliance upon such assumption;


(vi)

The Escrow Agent shall be indemnified and held harmless by Social Reality, Five Delta and the Stockholders, and each of their respective officers, directors, stockholders, employees, agents and Affiliates, upon demand by the Escrow Agent, from and against any claims, demands, losses, damages, liabilities, costs and expenses, including counsel fees and disbursements, (collectively, “ Damages ”) suffered by the Escrow Agent in connection with any action, suit or other proceeding involving any claim, or in connection with any claim or demand, which in any way directly or indirectly arises out of or relates to this Agreement, the services of the Escrow Agent hereunder, the monies or other property held by it hereunder or any such Damages.  Promptly after the receipt by the Escrow Agent of notice of any demand or claim or the commencement of any action, suit or proceeding, the Escrow Agent shall, if a claim in respect thereof shall be made against the other parties hereto, notify such parties thereof in writing; but the failure by the Escrow Agent to give such notice shall not relieve any party from any liability which such party may have to the Escrow Agent hereunder, except to the extent of actual prejudice demonstrated by such party.  The obligations of Social Reality, Five Delta and the Stockholders under this Section 2.5(e)(vi) shall survive any termination of this Agreement and the resignation or removal of the Escrow Agent;


(vii)

From time to time on and after the date hereof, the parties shall deliver or cause to be delivered to the Escrow Agent such further documents and instruments and shall do or cause to be done such further acts as the Escrow Agent shall reasonably request (it being understood that the Escrow Agent shall have no obligation to make such request) to carry out more effectively the provisions and purposes of this Agreement, to evidence compliance herewith or to assure itself that it is protected in acting hereunder;


(viii)

The Escrow Agent may resign at any time and be discharged from its duties as Escrow Agent hereunder by its giving the other parties hereto prior written notice of at least seven (7) business days.  As soon as practicable after its resignation, the Escrow Agent shall turn over to a successor escrow agent appointed by the other parties hereto, jointly, all of the Escrow Shares held hereunder upon presentation of the document appointing the new escrow agent and its acceptance thereof.  If no new escrow agent is so appointed within the seven (7) day period following the giving of such notice of resignation, the Escrow Agent may deposit the Escrow Shares with any court it deems appropriate;


(ix)

The Escrow Agent may consult with, and obtain advice from, legal counsel in the event of any dispute or question as to the construction of any of the provisions hereof or its duties hereunder, and it shall incur no liability and shall be fully protected in acting in good faith in accordance with the opinion and instructions of such counsel, other than itself;


(x)

The Escrow Agent is authorized, in its sole discretion, to comply with orders issued or process entered by any court with respect to the Escrow Shares, without determination by the Escrow Agent of such court’s jurisdiction in the matter.  If any portion of the Escrow Shares is at any time attached, garnished or levied upon under any court



14





order, or in case the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court affecting such property or any part thereof, then and in any such event, the Escrow Agent is authorized, in its sole discretion, to rely upon and comply with any such order, writ, judgment or decree which it is advised by legal counsel selected by it (other than itself) is binding upon it without the need for appeal or other action; and if the Escrow Agent complies with any such order, writ, judgment or decree, it shall not be liable to any of the parties hereto or to any other person or entity by reason of such compliance even though such order, writ, judgment or decree may be subsequently reversed, modified, annulled, set aside or vacated; and


(xi)

The parties acknowledge that the Escrow Agent has acted as counsel to Social Reality in various matters, including in connection with the Exchange contemplated by this Agreement, and has prepared this Agreement, and may continue to act as counsel to Social Reality during and following the term of this Agreement.  All parties to this Agreement waive any conflicts that exist or may arise by reason of such representation; provided, however , that the Escrow Agent shall ensure that the Escrow Shares are under the sole control of the Escrow Agent.


(f)

The fees of the Escrow Agent shall be paid by Social Reality.  The obligations under this Section 2.5 shall survive any termination of this Agreement and the resignation or removal of Escrow Agent.


3.

REPRESENTATIONS AND WARRANTIES OF FIVE DELTA


Five Delta hereby warrants and represents to Social Reality, as of the date of this Agreement and with the same force and effect on the Closing Date as if then made, as follows:


3.1

Power and Authority . Five Delta is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, and has the corporate power and authority to carry on its business as now conducted and to own, lease and operate its properties and assets. Five Delta is duly qualified or licensed to transact business as a foreign corporation in good standing in the states of the United States and/or foreign jurisdictions where the character of its assets or the nature or conduct of its business requires it to be so qualified or licensed. Five Delta has all requisite corporate power and authority to execute and deliver this Agreement and each instrument to be executed and delivered by Five Delta in connection with the Closing, to perform its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and each instrument required hereby to be executed and delivered by Five Delta prior to or at the Closing, the performance of its obligations hereunder and thereunder and the consummation by Five Delta of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of Five Delta, and no other corporate proceedings on the part of Five Delta are necessary to authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed by Five Delta, and, assuming this Agreement has been duly executed by Social Reality, this Agreement constitutes a valid and binding agreement of Five Delta, enforceable against Five Delta in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar



15





laws of general applicability relating to or affecting creditors' rights and to general equity principles.


3.2

Consents and Approvals . The execution and performance of this Agreement do not, and the consummation of the transactions contemplated hereby and compliance with the provisions of this Agreement will not (a) conflict with or violate the Amended and Restated Certificate of Incorporation and Bylaws of Five Delta, (b) conflict with or violate any statute, ordinance, rule, regulation, judgment, order, writ, injunction, decree or law applicable to Five Delta, or by which either Five Delta or its properties or assets may be bound or affected, or (c) result in a violation or breach of or constitute a default (or an event which with or without notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in any loss of any benefit under, any contract, agreement or arrangement to which Five Delta is a party, or the creation of Liens on any of the property or assets of Five Delta.  No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity, is required by Five Delta in connection with the execution of this Agreement or the consummation by it of the transactions contemplated hereby, except for such other consents, approvals, orders, authorizations, registrations, declarations or filings, the failure of which to obtain would not individually or in the aggregate have a Material Adverse Effect.


3.3

Authorized and Issued Capital Stock . Five Delta is authorized, pursuant to its incorporation and or formation documents, to issue twenty million (20,000,000) shares of common stock, $0.001 par value, and two million five hundred thousand (2,500,000) shares of blank check preferred stock, $0.001 par value, all of which have been designated as Series A Preferred Stock (“ Five Delta Series A ”). As of the date hereof two million (2,000,000) shares of Five Delta's common stock and two hundred sixty thousand (260,000) shares of Five Delta Series A are issued and outstanding, all of which are owned by the Stockholders.  All of the outstanding Five Delta Shares are issued on an uncertificated basis.  The Five Delta Shares have been duly authorized, are duly and validly issued, fully paid, and nonassessable, and are free of any Lien, encumbrance or restrictions on transfer other than restrictions on transfer under this Agreement, and under applicable state and federal securities laws.  There is no outstanding security of any kind convertible into or exchangeable for shares or equity ownership interest in Five Delta other than as set forth on Schedule 3.3 hereto, which such options shall be cancelled by Five Delta prior to the Closing Date.  Suchter and Pierce jointly and severally indemnify and hold Social Reality harmless against any claims made by any third parties claiming ownership of any security of any kind convertible into or exchangeable for shares or equity ownership interest in Five Delta following the Closing Date, and shall satisfy any such claim through a transfer of Social Reality Shares owned by them.


3.4

Subsidiaries . Five Delta owns no subsidiaries, and on the Closing Date, Five Delta shall not own, or be a party to any agreement to own, any securities of any other corporation, or any other entity or business association of whatever kind.


3.5

Undisclosed Liabilities . As of the Closing Date, Five Delta has no debts, Liabilities or obligations of any nature (whether accrued, absolute, contingent, direct, indirect, unliquidated or otherwise and whether due or to become due) arising out of transactions entered



16





into on or prior to the Closing Date, or any transaction, series of transactions, action or inaction occurring on or prior to the Closing Date, or any state of facts or condition existing on or prior to the Closing Date (regardless of when such liability or obligation is asserted) except such debts, Liabilities or obligations that have been disclosed to Social Reality in this Agreement or in the Five Delta Financial Statements.


3.6

Intellectual Property.


3.6.1

The activities of Five Delta (or of any licensee under any license granted by Five Delta) do not infringe or are not likely to infringe on any Intellectual Property Rights of any third party and no claim has been made, has been threatened, or is likely to be made or threatened, against Five Delta or any such licensee in respect of such infringement.


3.6.2

Details of all registered Intellectual Property Rights (including applications to register the same) and all commercially significant unregistered Intellectual Property Rights owned or used by Five Delta are set out in Schedule 3.6 .


3.6.3

Five Delta does not, as of the date hereof, use in its Business any Intellectual Property Rights, other than the Intellectual Property Rights identified on Schedule 3.6, and is under no obligation to pay license fees or royalties for any Intellectual Property Rights other than those identified on said Schedule.


3.7

Personal Property . Five Delta has good and marketable title to, or in the case of leased or licensed personal property, it has valid leasehold or license interests in, all Personal Property, except for properties and assets sold since the Balance Sheet Date in the ordinary course of business consistent with past practices. None of such Personal Property is subject to any Liens, other than:


3.7.1

Liens that do not materially detract from the value of the Personal Property as now used, or materially interfere with any present or intended use of the Personal Property; or


3.7.2

Liens reflected on the Five Delta Financial Statements.


3.7.3

Each item of Personal Property has no material defects, is in good operating condition and repair (ordinary wear and tear excepted), and is generally adequate for the uses to which it is being put.


3.8

Real Property .


3.8.1

None of the real property is owned by Five Delta. All of the Real Property is leased by Five Delta as leasee or subleasee. Schedule 3.8 sets forth all leases and subleases of the Real Property leased by Five Delta (the " Leases "), true and correct copies of which have been previously provided to Social Reality.




17





3.8.2

The Leases are valid, binding and enforceable in accordance with their respective terms, and there does not exist under any such Lease any default by Five Delta or, to Five Delta's and each Stockholder’s knowledge, by any other Person, or any event that, with notice or lapse of time or both, would constitute a default by Five Delta or, to Five Delta's and each Stockholder’s knowledge, by any other Person. Five Delta has delivered to Social Reality complete and accurate copies of all Leases, including all amendments and agreements related thereto. All rent and other charges currently due and payable under the Leases have been paid.


3.9

Litigation and Complaints .


3.9.1

Five Delta is not engaged in any litigation or arbitration proceedings, and there are no such proceedings pending or, to the knowledge of Five Delta and each Stockholder, threatened against or by Five Delta. To the best of Five Delta's and each Stockholder’s knowledge, there are no matters or circumstances which are likely to give rise to any litigation or arbitration proceedings by or against Five Delta.


3.9.2

Five Delta is not subject to any investigation, inquiry or enforcement proceedings or processes by any Governmental Entity, and to the best of Five Delta's and each Stockholder’s knowledge, there are no matters or circumstances which are likely to give rise to any such investigation, inquiry, proceedings or process.


3.10

Employees; Benefits .


3.10.1

There are no outstanding offers (whether accepted or not) of employment made to any Person by Five Delta other than as set forth on Schedule 3.10 hereto.


3.10.2

Five Delta is not party to or bound by any collective bargaining, shop or similar agreements.


3.10.3

Except as set forth on Schedule 3.10 hereto, Five Delta does not have any "employee benefit plans" including, but not limited to, bonus, pension, profit sharing, deferred compensation, incentive compensation, excess benefit, stock, stock option, severance, termination pay, change in control or other employee benefit plans, programs or arrangements, whether written or unwritten, qualified or unqualified, funded or unfunded, currently maintained, or contributed to, or required to be maintained or contributed to, by Five Delta (each of which is referred to as a " Benefit Plan " and all of which are collectively referred to as the " Benefit Plans "), other than the employment contracts, medical, dental, vision, disability, life insurance and or vacation benefits.


3.11

Tax Matters.


3.11.1

Five Delta has filed, all federal Income Tax Returns and all other material Tax Returns that it was required to file since the date of its organization.


3.11.2

To the best of Five Delta's and each Stockholder’s knowledge, Five Delta has paid all Taxes that it was required to pay since the date of its organization.



18






3.11.3

Five Delta is not currently the beneficiary of any extension of time within which to file any Tax Return.


3.11.4

To the best of Five Delta's and each Stockholder’s knowledge, there are no Liens for Taxes (other than Taxes not yet due and payable) upon any of the assets of Five Delta.


3.11.5

There is no material dispute or claim concerning any Tax liability of Five Delta either (i) claimed or raised by any Taxation Authority in writing or (ii) as to which Five Delta has knowledge, except for those reflected on the Five Delta Financial Statements or identified in Schedule 3.11 hereof.


3.12

Financial Statements . Schedule 3.12 contains copies of the Five Delta Financial Statements.


3.13

Contracts .  A copy of each of the material contracts, instruments, agreements, or understandings, whether written or oral, to which Five Delta is a party that relates to or affects the assets or operations of Five Delta or to which Five Delta’s assets or operations may be bound or subject (collectively, the “ Contracts ”), has been provided to Social Reality, a list of which is attached hereto as Schedule 3.13 .  Each of the Contracts is a valid and binding obligation of Five Delta and in full force and effect, except for where the failure to be in full force and effect would not, individually or in the aggregate, have a Material Adverse Effect. For purposes of this Agreement a material contract shall be any contract or agreement involving consideration in excess of $10,000.  There are no existing defaults by Five Delta thereunder or, to the knowledge of Five Delta or the Stockholders, by any other party thereto, which defaults, individually or in the aggregate, would have a Material Adverse Effect.


3.14

Compliance with Laws . Except as set forth on Schedule 3.14 , Five Delta is conducting its business or affairs in material compliance with applicable law, ordinance, rule, regulation, court or administrative order, decree or process, or any requirement of insurance carriers.  Five Delta has received any notice of violation or claimed violation of any such law, ordinance, rule, regulation, order, decree, process or requirement.


3.15

No Adverse Changes .  Except as set forth on Schedule 3.15 , since August 31, 2014, there has not been (a) any material adverse change in the business, prospects, the financial or other condition, or the respective assets or Liabilities of Five Delta as reflected in the Five Delta Financial Statements, (b) any material loss sustained by Five Delta, including, but not limited to any loss on account of theft, fire, flood, explosion, accident or other calamity, whether or not insured, which has materially and adversely interfered, or may materially and adversely interfere, with the operation of Five Delta’s business, or (c) to the knowledge of Five Delta and the Stockholders, any event, condition or state of facts, including, without limitation, the enactment, adoption or promulgation of any law, rule or regulation, the occurrence of which materially and adversely does or would affect the results of operations or the business or financial condition of Five Delta. Five Delta is, and on the Closing Date will be, a preferred marketing developer (PMD) of Facebook, Inc.  Five Delta has not received notice from



19





Facebook, Inc. that it intends to suspend or discontinue Five Delta’s PMD status, nor has Facebook, Inc., or any of Five Delta’s other partners advised Five Delta, orally or in writing, that any such partner intends to discontinue its current relationship with Five Delta, the occurrence of which would have a Material Adverse Effect on Five Delta, nor, to the knowledge of Five Delta and the Stockholders, is any such notice pending or threatened.


3.16

Insurance .  Five Delta maintains insurance against all risks customarily insured against by companies in its industry.  All such policies are in full force and effect, and Five Delta has not received any notice from any insurance company suspending, revoking, modifying or canceling (or threatening such action) any insurance policy issued to Five Delta.


3.17

Incorporation or Formation Documents; Minute Books .  The copies of the incorporation or formation documents of Five Delta, and all amendments to each are true, correct and complete.  The minute book of Five Delta contain true and complete records of all meetings and consents in lieu of meetings of their Board of Directors (and any committees thereof), or similar governing bodies, since the time of their respective organization.   The stock records of Five Delta are true, correct and complete.


3.18

Brokers .  All negotiations relative to this Agreement and the transactions contemplated hereby have been carried without the intervention of any Person in such a manner as to give rise to any valid claim by any Person against Five Delta or any Stockholder for a finder’s fee, brokerage commission or similar payment.


4.

REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS


Each Stockholder hereby warrants and represents to Social Reality, as of the date of this Agreement and with the same force and effect on the Closing Date as if then made, as follows:


4.1

Power and Authority . The execution and delivery of this Agreement and each instrument required hereby to be executed and delivered by each Stockholder prior to or at the Closing, the performance of each Stockholder's obligations hereunder and thereunder and the consummation by the Stockholder of the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of each Stockholder, and no other proceedings on the part of the Stockholder is necessary to authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed by each Stockholder, and, assuming this Agreement has been duly executed by Five Delta and Social Reality, this Agreement constitutes a valid and binding agreement of each Stockholder, enforceable against each Stockholder in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles.


4.2

Ownership of Five Delta Shares .  The Stockholder is the sole record and beneficial owner of the Five Delta Shares, all of which Five Delta Shares are owned free and clear of all Liens, and have not been sold, pledged, assigned or otherwise transferred except pursuant to this Agreement.  The Five Delta Shares are held by the Stockholder on an



20





uncertificated basis.  There are no outstanding subscriptions, rights, options, warrants or other agreements obligating the Stockholder to sell or transfer to any third person any of the Five Delta Shares owned by the Stockholder, or any interest therein.  The Stockholder has full power and authority to exchange, transfer and deliver to Social Reality the Five Delta Shares.


4.3

Consents and Approvals . The execution and performance of this Agreement does not, and the consummation of the transactions contemplated hereby and compliance with the provisions of this Agreement will not (a) conflict with or violate any statute, ordinance, rule, regulation, judgment, order, writ, injunction, decree or law applicable to the Stockholder, or (b) by which either the Stockholder or his properties or assets may be bound or affected, or result in a violation or breach of or constitute a default (or an event which with or without notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in any loss of any benefit under, any contract, agreement or arrangement to which the Stockholder is a party, or the creation of Liens on any of the properties or assets of the Stockholder. No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity, is required by the Stockholder in connection with the execution of this Agreement by the Stockholder or the consummation by him of the transactions contemplated hereby, except for such other consents, approvals, orders, authorizations, registrations, declarations or filings, the failure of which to obtain would not individually or in the aggregate have a Material Adverse Effect.


4.4

Investment Representations .


4.4.1 Each Stockholder is acquiring the Social Reality Shares for his own account with the present intention of holding such securities for purposes of investment, and that they each have no intention of distributing such Social Reality Shares or selling, transferring or otherwise disposing of such Social Reality Shares in a public distribution, in any of such instances, in violation of the federal securities laws of the United States of America.  


4.4.2 The Stockholder understands that (a) the Social Reality Shares are "restricted securities," as defined in Rule 144; (b) such Social Reality Shares have not been registered under the Securities Act, and are being or will be issued in reliance on exemptions for private offerings contained in Section 4(a)(2) of the Securities Act; (c) the Social Reality Shares may not be distributed, re-offered or resold except through a valid and effective registration statement or pursuant to a valid exemption from the registration requirements under the Securities Act; and (d) until such time as the Social Reality Shares become eligible for sale by it, either pursuant to the registration of such shares under the Securities Act, or pursuant to a valid exemption from such registration, the certificates evidencing the Social Reality Shares shall contain the following legends:


"The shares of common stock evidenced by this certificate have not been registered under the Securities Act of 1933, as amended (the "Act"). Such shares may not be sold, transferred, pledged, hypothecated or otherwise disposed of unless they have been so registered or the issuer of such shares shall have received an opinion of counsel satisfactory to it to the



21





effect that registration thereof for purposes of transfer is not required under the Act or the securities laws of any state."


" THE SALE OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A LOCK UP AGREEMENT DATED DECEMBER 19, 2014, BETWEEN THE ISSUER AND THE STOCKHOLDER LISTED ON THE FACE HEREOF. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE ISSUER AND WILL BE PROVIDED TO THE HOLDER HEREOF UPON REQUEST. NO TRANSFER OF SUCH SECURITIES WILL BE MADE ON THE BOOKS OF THE ISSUER UNLESS ACCOMPANIED BY EVIDENCE OF COMPLIANCE WITH THE TERMS OF SUCH LOCK UP AGREEMENT ."


4.4.3

Each Stockholder is fully aware of the restrictions on sale, transferability and assignment of the Social Reality Shares, and that they must bear the economic risk of retaining ownership of such securities for an indefinite period of time. Each Stockholder is aware that (a) the Social Reality Shares will not be registered under the Securities Act; and (b) because the issuance of the Social Reality Shares has not been registered under the Securities Act, an investment in the Social Reality Shares cannot be readily liquidated if the Stockholders desire to do so, but rather may be required to be held indefinitely.


4.5

Information on Stockholders .  Each Stockholder is an “accredited investor,” as such term is defined in Regulation D promulgated under the Securities Act, or is otherwise experienced in investments and business matters, has made investments of a speculative nature and has such knowledge and experience in financial, tax and other business matters as to enable him to evaluate the merits and risks of, and to make an informed investment decision with respect to, this Agreement.  Each Stockholder understands that his acquisition of the Social Reality Shares is a speculative investment, and each Stockholder represents that he is able to bear the risk of such investment for an indefinite period, and can afford a complete loss thereof.


4.6

Access to Counsel .  Each Stockholder acknowledges that, in executing this Agreement, he has had the opportunity to seek the advice of independent legal and/or tax counsel, and has read and understood all of the terms and provisions of this Agreement.


5.

REPRESENTATIONS AND WARRANTIES OF SOCIAL REALITY


Social Reality hereby warrants and represents to the Stockholders, as of the date of this Agreement and with the same force and effect on the Closing Date as if then made, as follows:


5.1

Power and Authority of Social Reality . Social Reality is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, and has the corporate power and authority to carry on its business as now conducted and to own, lease and operate its properties and assets. Social Reality is duly qualified or licensed to transact



22





business as a foreign corporation in good standing in the states of the United States and foreign jurisdictions where the character of its assets or the nature or conduct of its business requires it to be so qualified or licensed. Social Reality has all requisite corporate power and authority to execute and deliver this Agreement and each instrument to be executed and delivered by Social Reality in connection with the Closing, to perform its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and each instrument required hereby to be executed and delivered by Social Reality prior to or at the Closing, the performance of its obligations hereunder and thereunder and the consummation by Social Reality of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of Social Reality, and no other corporate proceedings on the part of Social Reality are necessary to authorize this Agreement or to consummate the transactions contemplated hereby.  This Agreement has been duly and validly executed by Social Reality, and, assuming this Agreement is duly executed by the Stockholders and Five Delta, this Agreement constitutes a valid and binding agreement of Social Reality, enforceable against Social Reality in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles.


5.2

Consents and Approvals . The execution and performance of this Agreement do not, and the consummation of the transactions contemplated hereby and compliance with the provisions of this Agreement will not (a) conflict with or violate the Certificate of Incorporation or Bylaws of Social Reality, (b) conflict with or violate any statute, ordinance, rule, regulation, judgment, order, writ, injunction, decree or law applicable to Social Reality, or by which Social Reality or its properties or assets may be bound or affected, or (c) result in a violation or breach of or constitute a default (or an event which with or without notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in any loss of any benefit under, any contract, agreement or arrangement to which Social Reality is a party, or the creation of Liens on any of the property or assets of Social Reality, other than the outstanding warrants and options previously disclosed in the Social Reality Reports. No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required by Social Reality in connection with the execution of this Agreement by Social Reality or the consummation by it of the transactions contemplated hereby, except for consents, approvals, orders, authorizations, registrations, declarations or filings, the failure of which to obtain would not individually or in the aggregate have a Material Adverse Effect.


5.3

Litigation; Complaints; Government Inquiries .


5.3.1

Social Reality is not engaged in any litigation or arbitration proceedings, except as identified in the Social Reality Reports (as hereinafter defined), and there are no other such proceedings pending or, to the knowledge of Social Reality, threatened against or by Social Reality. To the best of Social Reality's knowledge, there are no matters or circumstances which are likely to give rise to any additional litigation or arbitration proceedings by or against Social Reality.




23





5.3.2

Social Reality is not subject to any investigation, inquiry, unresolved SEC comments or enforcement proceedings or processes by any Governmental Entity, and to the best of Social Reality's knowledge, there are no matters or circumstances which are likely to give rise to any such investigation, inquiry, proceedings or process.


5.4

Financial Statements . The balance sheet of Social Reality at December 31, 2013 and the related statements of operations, stockholders’ equity and cash flows for the fiscal year then ended, including the notes thereto, as audited by RBSM LLP, certified public accountants and the unaudited balance sheet of the Social Reality at September 30, 2014, and the related consolidated statements of operations, stockholders’ equity and cash flows for the six month period then ended prepared by the Social Reality’s management (collectively, the “ Social Reality Financial Statements ”) are contained in the Social Reality Reports.


5.5

Compliance with Laws . Except as set forth in the Social Reality Reports, Social Reality is conducting its business or affairs in material compliance with applicable law, ordinance, rule, regulation, court or administrative order, decree or process, or any requirement of insurance carriers.  Social Reality has received any notice of violation or claimed violation of any such law, ordinance, rule, regulation, order, decree, process or requirement.


5.6

No Adverse Changes .  Since September 30, 2014, there has not been (a) any material adverse change in the business, prospects, the financial or other condition, or the respective assets or Liabilities of Social Reality as reflected in the Social Reality Financial Statements, (b) any material loss sustained by Social Reality, including, but not limited to any loss on account of theft, fire, flood, explosion, accident or other calamity, whether or not insured, which has materially and adversely interfered, or may materially and adversely interfere, with the operation of Social Reality’s business, or (c) to the knowledge of Social Reality, any event, condition or state of facts, including, without limitation, the enactment, adoption or promulgation of any law, rule or regulation, the occurrence of which materially and adversely does or would affect the results of operations or the business or financial condition of Social Reality.


5.7

Exchange Act Reports .  Social Reality has filed with the Commission all forms, reports, schedules, statements and other documents required to be filed by it pursuant to Section 13 or 15 of the Exchange Act (as such documents have been amended since the time of their filing, collectively, the " Social Reality Reports "). As of their respective dates or, if amended, as of the date of the last such amendment, the Social Reality Reports, including, without limitation, any financial statements or schedules included therein, to the best of Social Reality's knowledge, complied in all material respects with the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the Commission promulgated thereunder applicable to such Social Reality Reports, and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.


5.8

Trading .  The Social Reality Common Stock is currently quoted on the OTCQB Tier of the OTC Markets and Social Reality has received no notice that its Common Stock is subject to being discontinued from quotation thereon.



24






6.

COVENANTS; ADDITIONAL AGREEMENTS


6.1

Affirmative Covenants .  Prior to the Closing Date or the earlier termination of this Agreement, pursuant to Section 8 hereof, unless otherwise specifically provided in this Agreement or consented to in writing by Social Reality, the Stockholders and Five Delta, Social Reality and Five Delta each shall: (i) operate its Business and conduct its affairs only in the usual and ordinary course consistent with past practices, and in such manner as shall be consistent with all representations and warranties of Social Reality and Five Delta so that the same remain true and accurate as of the Closing Date; (ii) preserve substantially intact its business organization, maintain its rights and franchises, use its reasonable efforts to retain the services of its officers and key employees and maintain its relationships with its customers and suppliers.


6.2

Negative Covenants of Five Delta .  Except as specifically provided in this Agreement or otherwise consented to in writing by Social Reality (which consent shall not be unreasonably withheld) from the date of this Agreement until the Closing Date, or until the earlier termination of this Agreement, Five Delta shall not do any of the following:


(a)

(i) increase the compensation payable or to become payable to any director of officer; (ii) grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or employee; or (iii) establish, adopt, enter into, or amend, any Benefit Plan except as may be required by applicable Law except in any case for customary bonus or increases in the ordinary course of business or as required by  contract;


(b)

declare, set aside or pay any dividend on, or make any other distribution in respect of, outstanding shares of capital stock;


(c)

(i) redeem, purchase or otherwise acquire any shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock, or any options, warrants or conversion or other rights to acquire any shares of its capital stock or any such securities or obligations; (ii) effect any reorganization or recapitalization; or (iii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities.


(d)

acquire or agree to acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or in any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets of any other person;


(e)

sell, lease, exchange, mortgage, pledge, transfer or otherwise dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer or otherwise dispose of, any of its material assets, except for dispositions of assets in the ordinary course of business and consistent with past practice;




25





(f)

initiate, solicit, encourage (including by way of furnishing information or assistance), or take any other action to facilitate, any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any competing transaction, or enter into discussions or negotiate with any person or entity in furtherance of such inquires or otherwise with respect to a competing transaction, or agree to or endorse any competing transaction, or authorize or permit any of the officers, directors or employees of Five Delta or any investment banker, financial advisor, attorney, accountant or other representative retained by Five Delta to take any such action;  


(g)

propose or adopt any amendments to its Amended and Restated Certificate of Incorporation or Bylaws;


(h)

incur any obligation for borrowed money or purchase money indebtedness, whether or not evidenced by a note, bond, debenture or similar instrument, except in the ordinary course of business consistent with past practice;  


(i)

(i) change any of its methods of accounting in effect at August 31, 2014 (ii) make or rescind any express or deemed election relating to taxes, or (iii) change any of its methods of reporting income or deductions for federal Income Tax purposes from those employed in the preparation of the federal Income Tax Returns for the taxable year ended December 31, 2013, except, in the case of clause (i) or (ii) as may be required by Law or generally accepted accounting principles;


(j)

agree in writing or otherwise to do any of the foregoing.


6.3

Access and Information .  Social Reality and Five Delta shall:  (i) provide to each party and its officers, directors, employees, accountants, consultants, legal counsel, agents and other representatives (collectively, the " Representatives ") reasonable access at reasonable times upon reasonable prior notice to the officers, employees, agents, properties, offices and other facilities of the other party and to the books and records thereof; (ii) furnish promptly to the other party and their representatives such information concerning the business, properties, contracts, records and personnel of the other party (including, without limitation, financial, operating and other data and information) as may be reasonably requested, from time to time, by such party; each party shall keep such information confidential in accordance with the terms of Section 6.4.


6.4

Confidential Information . In connection with the negotiation of this Agreement and the consummation of the transactions contemplated hereby, each party hereto will have access to data and confidential information relating to the other party.  Each party hereto shall treat such data and information as confidential, preserve the confidentiality thereof and not duplicate or use such data or information, except in connection with the transactions contemplated hereby, and in the event of the termination of this Agreement for any reason whatsoever, each party hereto shall return to the other all documents, work papers and other material (including all copies thereof) obtained in connection with the transactions contemplated hereby and will use reasonable efforts, including instructing its employees who have had access to such information, to keep confidential and not to use any such data or information ; provided,



26





however , that such obligations shall not apply to any data and information (i) which at the time of disclosure, is available publicly, (ii) which, after disclosure, becomes available publicly through no fault of the receiving party, (iii) which the receiving party knew or to which the receiving party had access prior to disclosure by the disclosing party, (iv) which is required by law, regulation or exchange rule, or in connection with legal process, to be disclosed, (v) which is disclosed by a receiving party to its attorneys or accountants, who shall respect the above restrictions, or (vi) which is obtained in connection with any Tax matters and is disclosed in connection with the filing of Tax Returns or claims for refund or in conducting an audit or other proceeding.


6.5

Additional Covenants of Social Reality, Five Delta and the Stockholders .  Until the Closing Date or earlier termination of this Agreement, Social Reality, Five Delta and the Stockholders shall not take or agree in writing or otherwise take any action which would make any of the representations or warranties of Social Reality or Five Delta or the Stockholders contained in this Agreement untrue or incorrect or prevent Social Reality or Five Delta or the Stockholders from performing or causing or cause Social Reality, Five Delta and the Stockholders not to perform their covenants hereunder.


7.

CLOSING CONDITIONS


7.1

Conditions to the Obligations of the Stockholders Close . The obligation of the Stockholders to consummate the transactions contemplated hereby at the Closing is subject to the fulfillment to the satisfaction of the Stockholders, or the waiver by the Stockholders, at or prior to the Closing of each of the following conditions:


7.1.1

Each of the representations and warranties of Social Reality contained in Article 5 shall be true, correct and complete on and as of the Closing Date as though then made.

7.1.2

That the parties shall have performed or complied with all agreements, terms and conditions required by this Agreement to be performed or complied with by them prior to or at the time of the Closing.

7.1.3

No material adverse change shall have occurred in the financial, business or trading conditions of Social Reality from the date hereof up to and including the Closing Date.


7.2

Conditions to Social Reality's Obligation to Close . The obligation of Social Reality to consummate the transactions contemplated hereby at the Closing is subject to the fulfillment to the satisfaction of Social Reality, or the waiver by Social Reality, at or prior to the Closing, of each of the following conditions:


7.2.1

Each of the representations and warranties of Five Delta contained in Article 3, and each of the representations and warranties of the Stockholders contained in Article 4 shall be true, correct and complete on and as of the Closing Date as though then made.



27





7.2.2

That the parties shall have performed or complied with all agreements, terms and conditions required by this Agreement to be performed or complied with by them prior to or at the time of the Closing.

7.2.3

No material adverse change shall have occurred in the financial or business conditions of Five Delta from the date hereof up to and including the Closing Date.


7.2.4

All third party and other consents required for the Exchange shall have been obtained.


7.2.5

No action, suit or proceeding shall have been instituted or, to the knowledge of Five Delta or the Stockholders, be pending or threatened before any court or other governmental body by any public agency or governmental authority seeking to restrain, enjoin or prohibit the Exchange or to seek damages or other relief in connection therewith against the Stockholders or Five Delta.


7.2.6

Social Reality’s independent registered public accounting firm shall have determined, in its sole discretion, that such audited financial statements of Five Delta as are deemed necessary to comply with Social Reality’s disclosure obligations under the rules and regulations of the Commission can be prepared within the scope and timeframe prescribed therein.


7.2.7

The Amended Stockholders Agreement by and between Five Delta and the Stockholders dated November 8, 2012 shall have been terminated.


7.2.8

Social Reality and Suchter shall have entered into an Employment Agreement in the form substantially attached hereto as Exhibit 7.2.8 .


7.2.9

Social Reality and each of the Five Delta Stockholders shall have entered into lockup and leak out agreements in the form substantially attached hereto as Exhibit 7.2.9.  


7.2.10

Suchter and James Willenborg shall have executed agreements relative to the cancellation of options to purchase an aggregate of 550,000 shares of Five Delta's common stock as more fully described on Schedule 3.3 hereto


7.2.11

Five Delta shall have delivered documents or other evidence satisfactory to Social Reality in its sole discretion that all liabilities of Five Delta shall have been satisfied and its cash balance on the date immediately preceding the Closing Date shall be zero.


8.

TERMINATION


8.1

Termination .  This Agreement may be terminated at any time prior to or, at Closing, by:

(a)

The mutual agreement of the Parties;




28





(b)

Any Party if:


(i)

Any provision of this Agreement applicable to a Party shall be materially untrue or fail to be accomplished;


(ii)

Any legal proceeding shall have been instituted or shall be imminently threatening to delay, restrain or prevent the consummation of this Agreement; or


(iii)

by December 31, 2014, the Closing conditions are not satisfied.

8.2

Effect of Termination .  In the event of termination of this Agreement pursuant to Section 8.2, this Agreement shall become void, there shall be no liability under this Agreement on the part of Social Reality, the Stockholders or Five Delta or any of their respective officers or directors, and all rights and obligations of each party hereto shall cease, other than as specifically set forth to the contrary herein.


9.

RIGHT OF FIRST REFUSAL.


9.1

Right of First Refusal .  If any Stockholder shall receive or negotiate a Bona Fide Offer to sell, transfer, or otherwise purchase (a “ Transfer ”) any or all of the Social Reality Shares received by the Stockholder in the Exchange within four (4) years from the Closing, and is willing to accept such Bona Fide Offer, such Stockholder (the “ Offering Stockholder ”) shall promptly send a BFO Notice (as hereinafter defined) to Social Reality offering to sell his Social Reality Shares to Social Reality at the same price and upon the same terms and conditions as are contained in the Bona Fide Offer.  Social Reality shall then have such rights and privileges for the prescribed time periods as are set forth herein.  For the purposes of this Agreement, Bona Fide Offer ” shall mean an offer in writing, signed by an offeror or offerors.


9.2

BFO Notice; Procedure to be Followed .


9.2.1

When notice is sent to Social Reality by the Offering Stockholder with respect to a Bona Fide Offer (by a method provided for herein), such notice (“ BFO Notice ”) shall contain a true and complete copy of the Bona Fide Offer setting forth the price and all terms and conditions of the proposed Transfer, with the name(s) and address(es) of the offeror(s).  Any purported notice, which does not contain all such requisite information, shall not be considered a BFO Notice for the purposes of this Agreement.


9.2.2

Upon the receipt of a BFO Notice Social Reality shall have the right but not the obligation, at its sole option, to purchase any or all of the Social Reality Shares so offered.  Social Reality shall provide written notice (the “ Company Notice ”) to the Offering Stockholder of its acceptance or decline of the BFO Notice prior to the expiration of ten (10) business days from the receipt of the BFO Notice;




29





9.2.3

if Social Reality does not elect, within the prescribed time period, to purchase all or any portion of the Social Reality Shares covered by the Bona Fide Offer (the “ Transfer Shares ”), the Offering Shareholder shall have the right to accept the Bona Fide Offer, subject to the provisions and restrictions of this Agreement, in strict accordance with the terms of the Bona Fide Offer and only if the sale is fully consummated within sixty (60) days after the original mailing of the BFO Notice.  If such sale is not fully consummated within sixty (60) days after the original delivery of the BFO Notice to Social Reality, the provisions herein as to the subject hereof must again be complied with by the Offering Shareholder.


9.3

Closing .  The closing of the purchase of Transfer Stock by Social Reality shall take place not later than forty-five (45) days after delivery of the Company Notice should such notice specify the election by Social Reality to purchase the Transfer Stock.  At such closing, Social Reality shall deliver payment in full for the Transfer Stock to be so purchased and the Offering Stockholder shall tender the stock certificate representing the Transfer Shares so purchased, together with a stock power executed in blank and with a Medallion guarantee and such other documents as Social Reality shall reasonably request to facilitate such transaction.


9.4

Transfer Void; Equitable Relief .  Any proposed Transfer of the Social Reality Shares not made in compliance with the requirements of this Agreement shall be null and void ab initio, shall not be recorded on the books of Social Reality its transfer agent and shall not be recognized by Social Reality.  The Stockholder hereto acknowledges and agrees that any breach of this Agreement would result in substantial harm to Social Reality for which monetary damages alone could not adequately compensate.  Therefore, the Stockholder unconditionally and irrevocably agrees that Social Reality shall be entitled to seek protective orders, injunctive relief and other remedies available at law or in equity (including, without limitation, seeking specific performance or the rescission of purchases, sales and other transfers of Social Reality Shares not made in strict compliance with this Agreement).


9.5

Exempted Transfers .  Notwithstanding the foregoing or anything to the contrary herein, the provisions of Section 9 shall not apply to (i) a pledge of Social Reality Shares by a Stockholder that creates a mere security interest in the pledged shares, provided that the pledgee thereof agrees in writing in advance to be bound by and comply with all applicable provisions of this Agreement to the same extent as if it were the Stockholder making such pledge, or (ii) upon a transfer of Social Reality Shares by such Stockholder made for bona fide estate planning purposes, either during his lifetime or on death by will or intestacy to his spouse, child (natural or adopted), or any other direct lineal descendant of such Stockholder (or his or her spouse) (all of the foregoing collectively referred to as “family members”), or any other person approved by consent of the Board of Directors of Social Reality, or any custodian or trustee of any trust, partnership or limited liability company for the benefit of, or the ownership interests of which are owned wholly by, such Stockholder or any such family members; provided that the Stockholder shall deliver prior written notice to Social Reality of such pledge, gift or transfer and such Social Reality Shares shall at all times remain subject to the terms and restrictions set forth in this Agreement and such transferee shall, as a condition to such issuance, deliver a counterpart signature page to this Agreement as confirmation that such transferee shall be bound by all the terms and conditions of this Agreement as a Stockholder (but only with respect to the securities



30





so transferred to the transferee), including the obligations of a Stockholder with respect to this Section 9.


9.6

Prohibited Transferees .  Notwithstanding the foregoing, no Stockholder shall Transfer any Social Reality Shares to (a) any entity which, in the determination of Social Reality’s Board of Directors, directly or indirectly competes with Social Reality, or (b) any customer, distributor or supplier of Social Reality, if Social Reality’s Board of Directors should determine that such transfer would result in such customer, distributor or supplier receiving information that would place Social Reality at a competitive disadvantage with respect to such customer, distributor or supplier.


10.

NONCOMPETITION; NON-SOLICITATION.  


10.1

In consideration of the transactions contemplated by this Agreement, and in order to protect and preserve the legitimate business interests of Social Reality, Suchter agrees as follows:


10.1.1

Commencing on the Closing Date and ending on the four (4) year anniversary of the Termination Date (the “ Restricted Period ”), Suchter shall not, anywhere in the United States, directly or indirectly, engage in any Competitive Activities (as defined below).  Suchter shall be deemed to be engaged in Competitive Activities if he serves as a stockholder, officer, director, member, manager, trustee or partner of, or consults with, advises or assists in any way, whether or not for consideration, any Person that engages in any Competitive Activities (a “ Competitor ”); provided, however , that in the event Mr. Suchter’s employment is terminated by the Company Without Cause (as defined in the Employment Agreement), the Restricted Period shall end on the sixtieth (60th) day following such date of termination of his employment.  In the event a court of competent jurisdiction determines that the provisions of this Section 10.1 are excessively broad as to duration, geographical scope or activity, it is expressly agreed that this Section 10.1 shall be construed so that the remaining provisions of this Section 10.1 shall not be affected, but shall remain in full force and effect, and any such overbroad provisions shall be deemed, without further action on the part of any Person, to be modified, amended and/or limited, but only to the extent necessary to render the same valid and enforceable in such jurisdiction.  The term “ Competitive Activities ” as used herein shall mean any activity that is directly competitive with the Business; provided , however , the term “Competitive Activities” shall not include, the ownership of securities of entities which are listed on a national securities exchange or traded in the national over-the-counter market in an amount which shall not exceed five percent (5%) of the outstanding shares of any such entity or the ownership of the securities of the Persons set forth on Schedule 10.1 or any Person engaged in the Business or a business substantially the same as such Persons set forth on Schedule 10.1 .


10.1.2

During the Restricted Period, (i) Suchter or any Affiliate of Suchter shall not, directly or indirectly, solicit or assist any third party in soliciting any Person who is, during the Restricted Period, a client or customer of the Business for purpose of reducing the level of business that such Person transacts with the Business, and (ii) Suchter or any Affiliate of Suchter shall not, directly or indirectly, solicit for employment or hire any persons who on the Termination Date are employees of Social Reality, unless such employee’s



31





employment has been terminated by Social Reality other than for cause; provided , however , that this Agreement shall in no way restrict Suchter or any Affiliate of Suchter from hiring any person who first contacts Suchter or such Affiliate in response to a general advertisement for employment to the public in a newspaper of general circulation, on recruitment or similar website or by other similar means.


10.2

Social Reality and Suchter agree that the provisions and restrictions contained in this Section 10 are necessary to protect the legitimate continuing interests of Social Reality, and that any violation or breach of these provisions will result in irreparable injury to Social Reality for which monetary damages or any other remedy at law may be inadequate and that, in addition to any relief at law which may be available to Social Reality for such violation or breach and regardless of any other provision contained in this Agreement, Social Reality may be entitled to seek temporary and permanent injunctive relief (without the necessity of having to prove actual damages therefrom) and such other equitable relief as a court may grant.


11.

NOTICES


All notices and other communications hereunder shall be in writing and shall be deemed given if sent by e-mail transmission (if receipt is electronically confirmed), or by a prepaid overnight courier service (if receipt is confirmed in writing) addressed to the Social Reality, Five Delta and the Escrow Agent to the addresses set forth earlier in this Agreement, and to the Stockholders to the address set forth on Exhibit A (or at such other address for a party as shall be specified by like notice).


12.

MISCELLANEOUS


12.1

Entire Agreement .  This Agreement contains the entire agreement of the parties hereto with respect to the subject matter contained herein. All prior negotiations and agreements between the parties hereto with respect to the transactions provided for herein are superseded by this Agreement.


12.2

Waiver .  No waiver of any of the provisions of this Agreement shall be effective against any party to this Agreement unless reduced in writing and duly signed by such party. The waiver by any party of any right hereunder or of any breach of any of the terms hereof or defaults hereunder shall not be deemed a waiver of any other rights or any subsequent breach or default, whether of the same or of a similar nature, and shall not in any way affect the terms hereof except to the extent of such waiver.


12.3

Amendment.  This Agreement can not be amended or modified unless made in writing and duly signed by or on behalf of the Stockholders, Five Delta and Social Reality.


12.4

Construction .  Wherever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law and in such a way as to, as closely as possible, achieve the intended economic effect of such provision and this Agreement as a whole, but if any provision contained herein is, for any reason, held to be invalid,



32





illegal or unenforceable in any respect, such provision shall be ineffective to the extent, but only to the extent, of such invalidity, illegality or unenforceability without invalidating the remainder of such provision or any other provisions hereof, unless such a construction would be unreasonable.


12.5

Assignment .  This Agreement may not be transferred, assigned, pledged or hypothecated by any party hereto. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assignees.


12.6

Costs and Expenses .  Each party shall pay its own and its advisers' fees and expenses (including financial and legal advisors) incurred in connection with the negotiation, execution and closing of this Agreement and the transactions contemplated herein.


12.7

Non-Impairment of Rights .  No failure or delay on the part of any party hereto in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty or agreement herein, nor shall any single or partial exercise of any such right preclude other or further exercise thereof or of any other right.


12.8

Counterparts .  This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart, or facsimile of a counterpart, of the Agreement signed by the other party or parties hereto. Delivery of an executed copy of this Agreement by facsimile transmission shall have the same effect as delivery of an originally executed copy of this Agreement, whether an originally executed copy shall be delivered subsequent thereto.


12.9

Governing Law .  This Agreement shall be governed and construed under and in accordance with the laws of the State of Delaware.  Each of the Parties hereto expressly and irrevocably (1) agree that any legal suit, action or proceeding arising out of or relating to this Agreement will be instituted exclusively in either the California State Supreme Court, County of Los Angeles, or in the United States District Court for the Central District of California, (2) waive any objection they may have now or hereafter to the venue of any such suit, action or proceeding, and (3) consent to the in personam jurisdiction of either the California State Supreme Court, County of Los Angeles, or the United States District Court for the Central District of California in any such suit, action or proceeding.  Each of the Parties hereto further agrees to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in either the California State Supreme Court, County of Los Angeles, or in the United States District Court for the Central District of California and agree that service of process upon it mailed by certified mail to its address will be deemed in every respect effective service of process upon it, in any such suit, action or proceeding.   THE PARTIES HERETO AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY.  THE PARTY PREVAILING THEREIN SHALL BE ENTITLED TO



33





PAYMENT FROM THE OTHER PARTY HERETO OF ALL OF ITS REASONABLE COUNSEL FEES AND DISBURSEMENTS.


IN WITNESS WHEREOF , the parties have executed this Agreement on the date first above written.


Social Reality, Inc.


By: /s/ Christopher Miglino

Christopher Miglino, Chief Executive Officer


Five Delta, Inc.


By: /s/ Dustin Suchter

Dustin Suchter, Chief Executive Officer


Stockholders:


Willenborg Family Partnership

By:   /s/ James Willenborg

James Willenborg, Manager


/s/ Frederick R. Krueger

Frederick R. Krueger


/s/ Brock Pierce

Brock Pierce


Kortschak Investments LP

By:   /s/ Walter Kortschak

Walter Kortschak, Managing Partner


/s/ Ben Nunemaker

Ben Nunemaker


Universal Curve LLC

By:   /s/ Dustin Suchter

Dustin Suchter, President


Pearlman Schneider LLP

By: /s/ James M. Schneider

James M. Schneider




34





Exhibit A


Five Delta Stockholder

No. of Five Delta Shares to
be Tendered

No. of Social Realty
Shares to be Issued

Escrow
Shares to
be Released
upon
Satisfaction
of Gross
Profit Post-
Closing
Condition

Escrow
Shares to
be Released
upon
Satisfaction
of PMD
Post-
Closing
Condition

 

Common
Stock

Series A
Preferred

Closing
Shares

Total
Escrow
Shares

Willenborg Family Partnership

2410 Baker Street

San Francisco, CA  94123

Taxpayer ID#: _______

0

100,000

115,385

0

0

0

Kortschak Investments LP

2061 Avy Avenue

First Floor

Menlo Park, CA  94025

Taxpayer ID#: _______

0

100,000

115,385

0

0

0

Frederick R. Krueger

3100 Donald Douglas Loop, Hangar 7

Santa Monica, CA  90405

Taxpayer ID#: _______

1,000,000

50,000

57,692

0

0

0

Ben Nunemaker

1308 Ocean Park Blvd.,

Apt 3

Santa Monica, CA  90405

Taxpayer ID#: ________

0

5,000

5,769

0

0

0

Universal Curve LLC

1031 Monte Verde Drive

Arcadia, CA  91007

Taxpayer ID#: ______

0

5,000

5,769

200,000

100,000

100,000

Brock Pierce

666 71st Street

Miami Beach, FL  33141

Taxpayer ID#: _________

1,000,000

0

0

100,000

50,000

50,000

Total

2,000,000

260,000

300,000

300,000

150,000

150,000






E xhibit 10.35


LOCK UP AGREEMENT


THIS LOCK UP AGREEMENT (the “ Agreement ”) is entered into as of this 19th day of December, 2014 (the “ Effective Date ”) by and between _______________________ (the “ Stockholder ”) and Social Reality, Inc., a Delaware corporation (the “ Company ”).


WHEREAS , the Stockholder and the Company are parties to that certain Share Acquisition and Exchange Agreement (the “ Share Purchase Agreement ”) of even date herewith by and among the Company, Five Delta, Inc., a Delaware corporation (“ Five Delta ”) and the stockholders of Five Delta, pursuant to which the Company acquired Five Delta in exchange for shares of its Class A common stock, par value $0.001 per share (the “ Common Stock ”).


WHEREAS , as consideration under the Share Purchase Agreement, the Stockholder was issued an aggregate of _______ shares of Common Stock at the closing of the Share Purchase Agreement (the “ Closing Shares ”) together with an additional _________ shares of Common Stock (the “ Escrow Shares ”) which are subject to forfeiture under the terms of the Share Purchase Agreement if the Post-Closing Conditions (as that term is defined in the Share Exchange Agreement) are not achieved.  The Closing Shares and the Escrow Shares are sometimes hereinafter collectively referred to as the “ Shares .”


WHEREAS , as a condition of the Share Purchase Agreement, the agreed to restrict the sale, assignment, transfer, encumbrance or other disposition of the Shares by the Stockholder as hereinafter provided.


NOW THEREFORE , in consideration of the premises and of the terms and conditions contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:


1.

LOCK UP OF SHARES; PERMITTED LEAK OUTS .


(a)

The Stockholder hereby agrees that, without the prior written consent of the Company and except as set forth below, he will not during the period commencing on the Effective Date and ending on the 24 month anniversary of the Effective Date (the “ Lock Up Period ”) (i) offer, pledge, gift, donate, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Shares, or (ii) enter into any swap, option (including, without limitation, put or call options), short sale, future, forward or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Shares, whether any such transaction is to be settled by delivery of shares of the Company’s Common Stock or such other securities, in cash or otherwise ((i) and (ii) being hereinafter collectively referred to as the “ Lock Up ”);


(b)

On the 12 month anniversary of the Effective Date, ________ Closing Shares shall be released from the Lock Up;


(c)

On the 24 month anniversary of the Effective Date, an additional ________ Closing Shares shall be released from the Lock Up;


(d)

The Stockholder hereby authorizes the Company during the relevant Lock Up Period to cause any transfer agent for the Shares to decline to transfer, and to note stop transfer restrictions on the stock register and other records relating to the Shares subject to the Lock Up for which the Stockholder is the record holder and, in the case of Shares subject to this Agreement for which the Stockholder is the beneficial but not the record holder, agrees during the Lock Up Period to cause the record holder to cause the relevant transfer agent to decline to transfer, and to note stop transfer restrictions on the stock register and other records relating to the Shares subject to the Lock Up, if such transfer would constitute a violation or breach of this Agreement; and


(e)

Notwithstanding the foregoing, upon the prior written consent of the Company the Stockholder may transfer (the “ Permitted Transfer ”) Shares as a bona fide gift, by will or intestacy or to a family member or trust for the benefit of a family member; provided that each transferee, donee or distributee of the Shares shall sign



1




and deliver to the Company a lock-up letter substantially in the form of this letter contemporaneously with such transaction.


(f)

Following the release of any Shares from the Lock Up, and subject to the terms of the right of first refusal granted the Company pursuant to Section 9 of the Share Purchase Agreement, the Stockholder agrees to limit the resales of such Shares in the public market as follows:


(i)

if the daily average trading volume on all trading markets on which the Common Stock is then quoted or listed (i) is less than 30,000 shares of Common Stock, the Stockholder shall not sell more than 1,000 Shares per trading day; (ii) is greater than 30,000 shares of Common Stock, but less than 100,000 shares, the Stockholder shall not sell more than 5,000 Shares per trading day; and (iii) is greater than 100,000 shares, the Stockholder shall not sell more than 50,000 Shares; and  


(ii)

any permitted resales by the Stockholder shall be at the then current bid price of the Common Stock.


2.

RELEASES .


(a)

The Lock Up shall automatically terminate if a Change of Control should occur during the Lock Up Period.  For the purposes of this Agreement, “ Change of Control ” shall mean any one of the following: (i) the consummation of a merger or consolidation of the Company with or into another any individual, corporation, partnership, limited liability company, firm, joint venture, association, joint-stock company, trust, unincorporated organization or other entity (collectively, a “ Person ”) (except a merger or consolidation in which the holders of capital stock of the Company immediately prior to such merger or consolidation collectively continue to hold at least 60% of the earning power, voting power or capital stock of the surviving Person); (ii) the issuance, transfer, sale or disposition to another Person of the voting power or capital stock of the Company, if after such issuance, sale, transfer or disposition such Person would hold more than 40% of the voting power or capital stock of the Company; (iii) if the Persons who, on the date of this Agreement, constitute a majority of the board of directors of the Company or Persons nominated and/or appointed as directors by vote of a majority of such Persons, shall for any reason cease to constitute a majority of the Company’s board of directors; (iv) a sale, transfer or disposition of all or substantially all of the assets or earning power of Company; or (iv) dissolution, liquidation or winding up of the affairs of the Company.


(b)

At any time during the Lock Up Period, in the sole discretion of the Company’s board of directors, the Company may elect to release some or all of the Shares from the Lock Up in such amounts as it may determine; provided that any such Shares so released shall be in equal an percentage to the total number of Shares subject to this Agreement as to the release of lock ups for shares of the Company’s Common Stock to which other stockholders of the Company may then be subject.


3.

TRANSFER; SUCCESSOR AND ASSIGNS .  The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. As provided above, any Permitted Transfer shall require the transferee to execute a lock up agreement in accordance with the same terms set forth herein.  Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.


4.

COMPLIANCE WITH SECURITIES LAWS .  In the event of a Permitted Transfer, as a condition to the Company agreeing to such Permitted Transfer, the Stockholder shall have furnished the Company with an opinion of counsel reasonably satisfactory to the Company, to the effect that the transfer is exempt from registration under the Securities Act of 1933, as amended (the “ Securities Act ”) and that the transfer otherwise complies with the terms of this Agreement.




2




5.

LEGENDS .


(a)

The Stockholder hereby agrees that each outstanding certificate representing the Shares shall during the Lock Up Period, in addition to any other legends as may be required in compliance with Federal securities laws, bear a legend reading substantially as follows:


THE SALE OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A LOCK UP AGREEMENT DATED DECEMBER 19, 2014, BETWEEN THE ISSUER AND THE STOCKHOLDER LISTED ON THE FACE HEREOF. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE ISSUER AND WILL BE PROVIDED TO THE HOLDER HEREOF UPON REQUEST. NO TRANSFER OF SUCH SECURITIES WILL BE MADE ON THE BOOKS OF THE ISSUER UNLESS ACCOMPANIED BY EVIDENCE OF COMPLIANCE WITH THE TERMS OF SUCH LOCK UP AGREEMENT.


(b)

A copy of this Agreement shall be filed with the corporate secretary of the Company, shall be kept with the records of the Company and shall be made available for inspection by any stockholder of the Company.  In addition, a copy of this Agreement shall be filed with the Company's transfer agent of record.


6.

NO OTHER RIGHTS .  The Stockholder understands and agrees that the Company is under no obligation to register the sale, transfer or other disposition of the Shares under the Securities Act or to take any other action necessary in order to make compliance with an exemption from such registration available.


7.

SPECIFIC PERFORMANCE .  The Stockholder acknowledges that there would be no adequate remedy at law if the Stockholder fails to perform any of its obligations hereunder, and accordingly agrees that the Company, in addition to any other remedy to which it may be entitled at law or in equity, shall be entitled to compel specific performance of the obligations of the Stockholder under this Agreement in accordance with the terms and conditions of this Agreement. Any remedy under this Section 7 is subject to certain equitable defenses and to the discretion of the court before which any proceedings therefor may be brought.


8.

NOTICES .  All notices, statements, instructions or other documents required to be given hereunder shall be in writing and shall be given either personally or by mailing the same in a sealed envelope, first-class mail, postage prepaid and either certified or registered, return receipt requested, or by telecopy, and shall be addressed to the Company at its principal offices and to the Stockholder at the address last appearing on the books and records of the Company.


9.

RECAPITALIZATIONS AND EXCHANGES AFFECTING SHARES .  Except as otherwise provided herein, the provisions of this Agreement shall apply, to the full extent set forth herein with respect to the Shares, to any and all shares of capital stock or equity securities of the Company which may be issued by reason of any stock dividend, stock split, reverse stock split, combination, recapitalization, reclassification or otherwise.


10.

GOVERNING LAW .  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware. Any suit, action or proceeding with respect to this Agreement shall be brought in the state or federal courts located in Los Angeles County in the State of California.  The parties hereto hereby accept the exclusive jurisdiction and venue of those courts for the purpose of any such suit, action or proceeding.  The parties hereto hereby irrevocably waive, to the fullest extent permitted by law, any objection that any of them may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any judgment entered by any court in respect thereof brought in Los Angeles County, California, and hereby further irrevocably waive any claim that any suit, action or proceeding brought in Los Angeles County, California has been brought in an inconvenient form.


11.

COUNTERPARTS .  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.




3




12.

ATTORNEYS' FEES .  If any action at law or in equity (including arbitration) is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled as determined by such court, equity or arbitration proceeding.


13.

AMENDMENTS AND WAIVERS .  Any term of this Agreement may be amended with the written consent of the Company and the Stockholder.  No delay or failure on the part of the Company in exercising any power or right under this Agreement shall operate as a waiver of any power or right.


14.

SEVERABILITY .  If one or more provisions of this Agreement are held to be unenforceable under applicable law, portions of such provisions, or such provisions in their entirety, to the extent necessary, shall be severed from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.


15.

CONSTRUCTION .  This Agreement has been entered into freely by each of the parties, following consultation with their respective counsel, and shall be interpreted fairly in accordance with its respective terms, without any construction in favor of or against either party.


16.

ENTIRE AGREEMENT .  This Agreement and the documents referred to herein constitute the entire agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements existing between the parties hereto are expressly canceled.


IN WITNESS WHEREOF , the parties hereto have executed this Agreement as of the date first above written.


 

 

 

COMPANY:


SOCIAL REALITY, INC.

 

 

Date:

 December 19, 2014

By:

_________________________

 

 

Christopher Miglino,

Chief Executive Officer 

 


 

 

 

STOCKHOLDER:


_____________________________ 

Date:

 December 19, 2014 

 

 




4





Exhibit 10.36

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (“ Agreement ”), dated as of December 19, 2014, by and between Social Reality, Inc., a Delaware corporation (the “ Employer ”) and Dustin Suchter, an individual residing at ___________________ (the “ Executive ”).


RECITALS

WHEREAS , the Employer owns and operates an Internet-based advertising agency operating on a worldwide basis;

WHEREAS , the Employer wishes to employ the Executive as its Executive Vice President; and

WHEREAS , the Employer and the Executive desire to set forth the terms pursuant to which the Executive will be employed by the Employer as its Executive Vice President.

NOW, THEREFORE , the Employer and the Executive hereby agree as follows:

Section 1.

Employment .

(a)

The Employer shall employ the Executive, and the Executive agrees to be employed by the Employer, upon the terms and conditions hereinafter provided, for a term (the “ Initial Term ”) commencing December 19, 2014 (the “ Effective Date ”) and expiring December 19, 2018.  The Initial Term shall be automatically extended for additional successive periods of twelve (12) month renewal terms (each a “ Renewal Term ”) unless either the Employer or the Executive provides notice to the other of its (or his) intent not to renew the Initial Term or the then current Renewal Term (as applicable) at least sixty (60) days prior to the expiration of the Initial Term or the then current Renewal Term (as applicable).  The Initial Term and any Renewal Terms are referred to herein as the “ Term ”.

(b)

The Executive hereby represents and warrants that the Executive has the legal capacity to execute and perform this Agreement, that this Agreement is a valid and binding agreement enforceable against the Executive according to its terms, and that the execution and performance of this Agreement by the Executive does not violate the terms of any existing agreement or understanding to which the Executive is a party.

Section 2.

Duties .  

The Executive shall report to the Chief Executive Officer and Chief Operating Officer, or an other executive officer of the Employer as may be determined by the Chief Executive Officer from time to time.  The Executive shall have such duties as are consistent with the Executive’s experience, expertise and position as shall be assigned to the Executive from time to time.  During the Term, and except for vacation in accordance with the Employer’s standard paid time off policies or due to illness or incapacity, the Executive shall devote substantially all of the Executive’s business time, attention, skill and efforts to the business and affairs of the Employer









and its parents, subsidiaries and affiliates.  Notwithstanding the foregoing, the Executive may (1) make personal investments in such form or manner as will neither require the Executive’s services in the operation or affairs of the business in which such investments are made, and (2) serve as a director on the board of directors of other non-competing companies with prior written notice to the Board.  The Executive agrees not to engage in any outside business activities that materially interfere with or materially delay the performance of the Executive’s duties hereunder (which duties shall be performed on a first-priority basis); provided , that , it is understood and agreed that service on a board of a non-competing company, in and of itself, shall not be deemed to so delay or interfere with the Executive’s duties hereunder, unless the Employer’s Board of Directors (the “ Board ”) shall have determined in good faith that such other company is directly competitive with the Employer.

Section 3.

Compensation .  

For all services rendered by the Executive in any capacity required hereunder during the Term, including, without limitation, services as an officer, director, or member of any committee of the Employer or any parent, subsidiary, affiliate or division thereof, the Executive shall be compensated as follows:

(a)

Salary .  The Employer shall pay the Executive a fixed salary (“ Base Salary ”) at a rate of $84,000 per annum.  The Board may from time to time further increase, but not decrease, the Base Salary, in its sole discretion. The Base Salary shall be payable in accordance with the customary payroll practices of the Employer.  

(b)

Bonus .  Subject to Section 3(g) , the Executive shall receive a quarterly bonus that is equal to ten percent (10%) of the Operating Profit (as hereinafter defined) of the business unit that manages and buys social and native media which represents media spend that is generated from direct buys networks including, but are not limited to, Facebook, Twitter, Yahoo, LinkedIn, SnapChat, Instagram, and other media that may be added from time to time, but specifically excluding all real time bidding platforms (the “ Direct Buy Business Unit ”).  When used herein, “ Operating Profit ” shall mean gross revenues derived from the Direct Buy Business Unit, less all costs associated therewith including the media cost of goods, the base salary of the Executive and the base salary of any employee that is 100% dedicated to the Direct Buy Business Unit, the direct hours of an individual that works for the Direct Buy Business Unit, and all related Costs including, but not limited to, the directly associated sales commissions for the Direct Buy Business Unit’s media spend, all as determined by the Employer in accordance with generally accepted accounting principles consistently applied.  

(c)

Discretionary Bonus .  At the sole discretion of the Board, the Executive shall be eligible to receive an annual discretionary bonus (the “ Discretionary Bonus ”) during the prior year.  Any awarded Discretionary Bonus shall be paid within sixty (60) days of being granted. Executive acknowledges that the Discretionary Bonus may be comprised of cash or non-cash compensation as determined at the sole discretion of the Board or its designee. The provisions of this Section 3(c) in no way guarantee or entitle the Executive to any discretionary bonus whatsoever, the award of which is entirely discretionary.



-2-






(d)

Equity Incentives . On the Effective Date, the Executive shall receive an option to purchase 100,000 shares of the Employer’s Class A common stock, $0.001 par value per share at an exercise price of $1.26 per share (in each case subject to adjustment in the event of a stock split, stock dividend, recapitalization or similar event) (the “ Option ”).  The Option shall be granted under the Employer’s 2012 Equity Compensation Plan and, except as otherwise provided in Section 5 hereof, shall vest and become exercisable in eight equal installments of 12,500 shares on each of the 5 th , 6 th , 7 th , 8 th , 9 th , 10 th , 11 th and 12 th quarter anniversary dates of the Effective Date, subject to continued employment with the Employer.  Executive will also receive 50,000 Restricted Stock shares of the Employer’s Class A common stock that will vest on the first annual anniversary Effective Date, subject to continued employment with the Employer.  

(e)

Benefits . Except as set forth in this Agreement, the Executive shall be entitled to participate in all employee benefit plans or programs, and to receive all benefits, perquisites and emoluments, which are approved by the Board and are generally made available by the Employer to salaried employees of the Employer, to the extent permissible under the general terms and provisions of such plans or programs and in accordance with the provisions thereof.  Notwithstanding the foregoing, nothing in this Agreement shall require any particular plan or program to be continued nor preclude the amendment or termination of any such plan or program, provided that such amendment or termination is applicable generally to the employees of the Employer.  

(f)

Paid Time Off .  The Executive shall be entitled to twenty-five (25) days of paid time off (“ PTO ”) per calendar year during the Term.  The Executive will not forfeit accrued PTO that is not used by the end of the calendar year; provided, however , once the Executive has fifty (50) days of accrued, but unused, PTO days (the “ PTO Accrual Cap ”), the Executive will not accrue any additional PTO time until he reduces the balance of his accrued PTO days below the PTO Accrual Cap.

Section 4.

Business Expenses .  

The Employer shall pay or promptly reimburse the Executive for all necessary expenses reasonably incurred by the Executive in connection with the performance of the Executive’s duties and obligations under this Agreement, subject to the Executive’s presentation of appropriate vouchers in accordance with such expense account policies and approval procedures as the Employer may from time to time reasonably establish for employees (including but not limited to prior approval of extraordinary expenses).  The With the exception of travel expenses, Executive agrees to obtain prior written approval from the Employer before incurring any single out-of-pocket expense in connection with the Executive’s performance of his duties and obligations under this Agreement in excess of $2,500.00 (or such higher limit as permitted by the Employer’s President).

Section 5.

Effect of Termination of Employment .  

(a)

Termination Generally; Accrued Obligations . The date specified in any notice of termination as the Executive’s final day of employment shall be referred to herein as the “ Termination Date .” Except as set forth in this Section 5 , in the event that the Executive’s



-3-






employment hereunder is terminated for any reason, then the Executive shall be entitled to no compensation or other benefits of any kind whatsoever, other than: (i) payment of the Executive’s unpaid Base Salary under Section 3(a) through the Termination Date, payable on the Employer’s next regular pay date following the Termination Date (or such earlier date as may be required by applicable law); (ii) payment of any unpaid bonus under Sections 3(b) and 3(c) for the preceding year, payable on the date that such bonus is due and payable (but not later than March 15 th of the calendar year in which the Termination Date occurs); (iii) payment of any unused PTO that accrued through the Termination Date, payable on the Employer’s next regular pay date following the Termination Date (or such earlier date as may be required by applicable law); (iv) expenses reimbursable under Section 4 incurred on or prior to the Termination Date, but not yet reimbursed, which reimbursable (but not yet reimbursed) expenses, if any, shall be paid on the next regular payroll date of the Employer that occurs after the Termination Date (or as soon thereafter as administratively practicable); (v) payment of any other unpaid amounts due and owing under any benefit, fringe or equity plans, programs, policies and/or practices, in accordance with such plan, program, policy or practice; and (vi) the opportunity to continue health coverage under the Employer’s group health plan in accordance with “COBRA” (“ COBRA Coverage ”) (the foregoing payments and benefits collectively referred to herein as “ Accrued Obligations ”).

(b)

Termination Without Cause; Resignation for Good Reason .  In the event that the Employer terminates the Executive’s employment hereunder during the Term without “Cause” or the Executive resigns for “Good Reason”, then the Executive shall be entitled to no compensation or other benefits of any kind whatsoever, other than: (i) the Accrued Obligations; (ii) the Severance Amount (defined below), which Severance Amount shall be payable, subject to Section 16 , in equal installments over the Severance Period (defined below) in accordance with the Employer’s normal payroll practices, commencing on the first regular pay date of the Employer that occurs after the date that is sixty (60) days following the Termination Date; provided, however , the first payment shall include the cumulative amount of payments that would have been paid to the Executive during the period of time between the Termination Date and the date such payments commence had such payments commenced immediately following the Termination Date; and provided, further, that the such payments shall immediately cease, and the Employer shall have no further obligation, if the Executive materially breaches any provision of this Agreement, including, but not limited to Section 6 of this Agreement; (iii) the Executive’s stock options and/or restricted shares granted to the Executive during the Term (to the extent not fully vested as of the Termination Date), shall become fully vested as of the Termination Date, and the Executive shall be permitted to exercise such options for up to twelve months following the Termination Date (unless otherwise agreed to by the Executive and the Employer in the case of any stock options or restricted shares granted after the Effective Date); and (iv) if the Executive elects COBRA Coverage following the Termination Date, the Employer shall waive the cost of such coverage (for the Executive and his eligible dependents) during the Severance Period (or such earlier date that COBRA coverage expires).

(c)

Death or Disability .  The Executive’s employment with the Employer shall terminate upon Executive’s death or “Disability” (defined below), in which case the Executive (or his estate and heirs) shall be entitled to no compensation or other benefits of any kind whatsoever for any period after the Executive’s date of termination other than: (i) the Accrued Obligations; and (ii) if the Executive and/or his eligible dependents elect COBRA



-4-






coverage, the Employer shall waive the cost of such coverage (for the Executive and his eligible dependents) during the Severance Period (or such earlier date that COBRA coverage expires).  In addition, the Executive (or his estate and heirs) shall be permitted to exercise the Executive’s stock options granted to the Executive during the Term (to the extent vested as of the Termination Date) for up to six (6) months following the Termination Date.

(d)

Termination Due to Non-Renewal .  If the Executive’s employment with the Employer terminates due to the Employer’s notice of non-renewal of the Term in accordance with Section 1(a) , then the Executive shall be entitled to no compensation or other benefits of any kind whatsoever, other than: (i) the Accrued Obligations; (ii) the Severance Amount, which Severance Amount shall be payable, subject to Section 15 , in equal installments over the Severance Period in accordance with the Employer’s normal payroll practices, commencing on the first regular pay date of the Employer that occurs after the Termination Date; and (iii) if the Executive elects COBRA coverage, the Employer shall waive the cost of such coverage (for the Executive and his eligible dependents) during the Severance Period (or such earlier date that COBRA coverage expires).  In addition, the Executive shall be permitted to exercise the Executive’s stock options granted to the Executive during the Term (to the extent vested as of the Termination Date) for up to six (6) months following the Termination Date the Accrued Obligations.

(e)

Release .  Payment of any amounts under this Section 5 (other than the Accrued Obligations) shall be contingent upon the Executive executing a general release of all claims in favor of the Employer in a form acceptable to the Employer, which release shall be provided to the Executive within five (5) business days following the Termination Date, and which must be executed by the Executive and become effective (and no longer subject to revocation) within sixty (60) days following the Termination Date.

(f)

Termination With Cause .  The Employer may terminate this Agreement immediately for “Cause” by giving written notice to the Executive. In the event that this Agreement is terminated pursuant to this Section 5(f) , the Executive shall be entitled to no compensation or other benefits of any kind whatsoever for any period after the Termination Date set forth in the notice given by the Employer to the Executive, except for the Accrued Obligations.  Further, if the Executive’s employment is terminated for Cause pursuant to this Section 5(f) , the stock options granted to the Executive during the Term, to the extent vested, but not exercised, as of the Termination Date, shall be forfeited.

(g)

Definitions .  For purposes of this Agreement:

(i)

Cause ” shall mean: (1) the Executive’s negligence in the performance of the material responsibilities of his office or position; (2) the Executive’s failure to perform the material responsibilities of his office or position, including, but not limited to, following the lawful directives of the Board; (3) any conviction by a court of law of, or entry of a pleading of guilty by the Executive with respect to a felony; (4) the Executive’s embezzlement or intentional misappropriation of any property of the Employer (other than good faith expense account disputes); (5) fraud by the Executive resulting in harm to the Employer; or (6) the Executive’s breach of this Agreement.  The Executive shall be given prior written notice of the termination of his employment for Cause.  If the Executive shall be terminated pursuant to clause



-5-






(1), (2) or (6) above, the Executive shall be given a reasonable period of time, not to exceed 30 days, to cure the matter (if curable).  In all other cases, including if the Executive shall be terminated pursuant to clause (3), (4) or (5) above, termination shall be effective as of the date notice is given.

(iii)

Disability ” shall mean that the Executive is incapable of performing his principal duties due to physical or mental incapacity or impairment for 180 consecutive days, or for 240 non-consecutive days, during any twelve (12) month period.

(iv)

Good Reason ” shall mean the occurrence of any of the following: (a) the relocation of the Executive’s principal office location, without the Executive’s consent, to a location that is at least forty-five (45) miles from the prior location with the Executive’s consent; (b) any reduction, without the Executive’s consent, of the Executive’s Base Salary, except to the extent the compensation of the Employer’s Chief Executive Officer is similarly and proportionately reduced; or (c) a breach by the Employer of a material term of the Agreement; provided, however , that the Executive must notify the Employer within ninety (90) days of the occurrence of any of the foregoing conditions that he considers it to be a “Good Reason” condition and provide the Employer with at least thirty (30) days in which to cure the condition.  If the Executive fails to provide this notice and cure period prior to his resignation, or resigns more than six (6) months after the initial existence of the condition, his resignation will not be deemed to be for “Good Reason.”

(v)

Severance Amount ,” for purposes of Sections 5(b) and 5(d) , shall equal the sum of: (a) an amount equal to (i) twelve (12) months of the Executive’s Base Salary at the rate in effect as of the Executive’s Termination Date (or, in the case of a termination for Good Reason due to the reduction in the Executive’s Base Salary, the Base Salary rate in effect immediately prior to such reduction), or (ii) if the Termination Date is during the last twelve (12) months of the then current Term of this Agreement, an amount equal to Executive’s Base Salary at the rate in effect as of the Executive’s Termination Date for the remaining months comprising then current Term of this Agreement (or, in the case of a termination for Good Reason due to the reduction in the Executive’s Base Salary, the Base Salary rate in effect immediately prior to such reduction); and in each case plus (b) an amount equal to the greater of (x) the most recent Bonus that would be payable to the Executive by the Employer, calculated on an annualized basis up to the month the Executive is terminated, and (y) $116,000.

(vi)

Severance Period ,” for purposes of Sections 5(b) and 5(c) , shall mean a period of eighteen (18) months following the Termination Date.


Section 6.

Covenants Regarding Confidentiality and Non-Solicitation .  

(a)

Confidentiality .  The Executive shall execute, and abide by the terms of, the confidentiality/non-disclosure agreement in the form annexed hereto as Exhibit A (the “ Confidentiality Agreement ”), the terms of which are incorporated herein.

(b)

Non-Solicitation .  To the fullest extent permitted by law, for a period of two (2) years after termination of the Executive’s employment, the Executive shall not directly, employ, solicit for employment, or advise or recommend to any other person that such other



-6-






person employ or solicit for employment, any person employed or under contract  (whether as a consultant, employee or otherwise) by or to the Employer or any of its subsidiaries during the period of such person’s association with  Employer or any of its subsidiaries and two years thereafter.  To the fullest extent permitted by law, for a period of two years after termination of the Executive’s employment, the Executive shall not directly solicit any clients, customers or vendors of the Employer or any of its subsidiaries.  The Executive agrees that such solicitation would necessarily involve disclosure or use of Confidential Information (as defined in the Confidentiality Agreement) in breach of this Agreement or the Confidentiality Agreement.

Section 7.

Assignment of Developments; Works for Hire .  

If at any time or times during Executive’s employment with the Employer, the Executive shall (either alone or with others) make, conceive, discover or reduce to practice any invention, modification, discovery, design, development, improvement, process, software program, work-of-authorship, documentation, formula, data, technique, know-how, secret or intellectual property right whatsoever or any interest therein (whether or not patentable or registrable under copyright or similar statutes or subject to analogous protection) (herein called “ Developments ”) that (a) relates to the business of the Employer (or any subsidiary of the Employer) or any customer of or supplier to the Employer (or any of its subsidiaries) or any of the products or services being developed, manufactured, sold or provided by the Employer or which may be used in relation therewith or (b) results from tasks assigned to the Executive by the Employer, such Developments and the benefits thereof shall immediately become and/or be considered as the sole and absolute property of the Employer and its assigns as a work for hire, and the Executive shall promptly disclose to the Employer (or any persons designated by it) each such Development and hereby assigns any rights the Executive may have or acquire in the Developments and benefits and/or rights resulting therefrom to the Employer and its assigns without further compensation and shall communicate, without cost or delay, and without publishing the same, all available information relating thereto (with all necessary documentation, plans and models) to the Employer.  Upon disclosure of each Development to the Employer, the Executive will, during the Term and at any time thereafter, at the request and cost of the Employer, sign, execute, make and do all such deeds, documents, acts and things as the Employer and its duly authorized agents may reasonably require:

(a)

to apply for, obtain and vest in the name of the Employer alone (unless the Employer otherwise directs) letters patent, copyrights, trademarks, service marks or other analogous protection in any country throughout the world and when so obtained or vested to renew and restore the same; and

(b)

to defend any opposition proceedings in respect of such applications and any opposition proceedings or petitions or applications for revocation of such letters patent, copyrights, trademarks, service marks or other analogous protection.

In the event the Employer is unable, after reasonable effort, to secure the Executive’s signature on any letters patent, copyrights, trademarks, service marks or other analogous protection relating to a Development, whether because of the Executive’s physical or mental incapacity or for any other reason whatsoever, the Executive hereby irrevocably designates and appoints the Employer and its duly authorized officers and agents as the Executive’s agent and



-7-






attorney-in-fact, to act for and on his behalf and stead to execute and file any such application or applications and to do all other lawfully permitted acts to further the prosecution and issuance of any such letters patent, copyrights, trademarks, service marks and other analogous protection thereon with the same legal force and effect as if executed by the Executive.

Section 8.

Withholding Taxes .  

The Employer may directly or indirectly withhold from any payments to be made under this Agreement all federal, state, city or other taxes and all other deductions as shall be required pursuant to any law or governmental regulation or ruling or pursuant to any contributory benefit plan maintained by the Employer.

Section 9.

Notices .  

All notices, requests, demands and other communications required or permitted hereunder shall be given in writing, and shall be deemed effective upon (a) personal delivery, if delivered by hand, (b) three days after the date of deposit in the mails, postage prepaid, if mailed by certified or registered United States mail, or (c) the next business day, if sent by a prepaid overnight courier service, and in each case addressed as follows:

(a)

To the Employer:

Social Reality, Inc.
456 Seaton Street

Los Angeles, CA 90013

Attention: Christopher Miglino


with a copy (which shall not be deemed notice) to:

Pearlman Schneider LLP
2200 Corporate Blvd., Suite 210
Boca Raton, FL 33431

Attention:  Jim Schneider, Esq.

(b)

To the Executive:

Dustin Suchter

______________

______________


or to such other address as either party shall have previously specified in writing to the other.

Section 10.

Binding Agreement; No Assignment .  

This Agreement shall be binding upon, and shall inure to the benefit of, the Executive, the Employer and their respective permitted successors, assigns, heirs, beneficiaries and representatives.  This Agreement is personal to the Executive and may not be assigned by the



-8-






Executive without the prior written consent of the Board, as evidenced by a resolution of the Board.  Any attempted assignment in violation of this Section 10 shall be null and void.

Section 11.

Governing Law; Consent to Jurisdiction; Arbitration.

This Agreement, and all matters arising directly or indirectly from this Agreement, shall be governed by, and construed and interpreted in accordance with, the laws of the State of California, without giving effect to the choice of law provisions thereof.  Any and all actions arising out of this Agreement or the Executive’s employment by the Employer or termination therefrom shall be submitted to arbitration pursuant to the terms set forth in Exhibit B .

Section 12.

Entire Agreement .

This Agreement, including all Exhibits hereto shall constitute the entire agreement between the parties with respect to the matters covered hereby and supersedes all previous written, oral or implied understandings between them with respect to such matters, including without limitation, any “employment” or similar agreements (whether written, oral or implied) between the Employer and the Executive.  Notwithstanding anything in this Agreement to the contrary, the Executive shall have no liability to the Employer or any other person or entity (and all such liability is hereby irrevocably waived, discharged and released, which such waiver, discharge and release are a material inducement to the Executive for entering into this Agreement) whatsoever of any kind with respect to any termination of his employment for any consequential, special, punitive or other similar damages, whether foreseeable, known to Executive, or even if Executive was advised thereof.

Section 13.

Amendments .  

This Agreement may only be amended or otherwise modified by a writing executed by each of the parties hereto.

Section 14.

Survivorship .  

The provisions of Sections 5 through 17 , as well as Exhibits A and B hereto, shall survive the termination of this Agreement.

Section 15.

409A Compliance .  

All payments under this Agreement are intended to comply with or be exempt from the requirements of Section 409A of the Code and regulations promulgated thereunder (“ Section 409A ”).  As used in this Agreement, the “ Code ” means the Internal Revenue Code of 1986, as amended.  To the extent permitted under applicable regulations and/or other guidance of general applicability issued pursuant to Section 409A, the Employer reserves the right to modify this Agreement to conform with any or all relevant provisions regarding compensation and/or benefits so that such compensation and benefits are exempt from the provisions of 409A and/or otherwise comply with such provisions so as to avoid the tax consequences set forth in Section 409A and to assure that no payment or benefit shall be subject to an “additional tax” under Section 409A.  To the extent that any provision in this Agreement is ambiguous as to its



-9-






compliance with Section 409A, or to the extent any provision in this Agreement must be modified to comply with Section 409A, such provision shall be read in such a manner so that no payment due to the Executive shall be subject to an “additional tax” within the meaning of Section 409A(a)(1)(B) of the Code.  If necessary to comply with the restriction in Section 409A(a)(2)(B) of the Code concerning payments to “specified employees,” any payment on account of the Executive’s separation from service that would otherwise be due hereunder within six (6) months after such separation shall be delayed until the first business day of the seventh month following the Termination Date and the first such payment shall include the cumulative amount of any payments (without interest) that would have been paid prior to such date if not for such restriction.  Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A. In no event may the Executive, directly or indirectly, designate the calendar year of payment. All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during the Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement is not subject to liquidation or exchange for another benefit.  Notwithstanding anything contained herein to the contrary, the Executive shall not be considered to have terminated employment with the Employer for purposes of Section 5(b) or 5(c) unless the Executive would be considered to have incurred a “termination of employment” from the Employer within the meaning of Treasury Regulation §1.409A-1(h)(1)(ii).  

Section 16

Section 280G Limitation .

If any payment(s) or benefit(s) the Executive would receive pursuant to this Agreement and/or pursuant to any other agreement or arrangement would (a) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (b) but for this Section 16 , be subject to the excise tax imposed by Section 4999 of the Code (the “ Excise Tax ”), then such payment(s) or benefit(s) (collectively, “ Payments ”) shall be reduced to the Reduced Amount.  The “ Reduced Amount ” shall be the largest portion of the Payments that can be paid or provided without causing any portion of the Payments being subject to the Excise Tax.  If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payments equal the Reduced Amount, reduction shall occur in the following order: (i) first, the Severance Payment under this Agreement, (ii) second, any other cash payments due under any other agreement between the Employer and the Executive; (iii) third, cancellation of the acceleration of vesting of any stock options, and (iv) lastly, other non-cash forms of benefits.  Calculations of the foregoing will be performed at the expense of the Employer by an accounting firm selected by the Employer.  The determinations of such accounting firm shall be final, binding and conclusive upon the Employer and the Executive.

Section 17.

Counterparts .  

This Agreement may be executed in any number of counterparts or facsimile copies, each of which when executed shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.



-10-






IN WITNESS WHEREOF , the Employer has caused this Agreement to be executed and delivered by its duly authorized officer and the Executive has signed this Agreement, all as of the first date written above.

SOCIAL REALITY, INC.

By:   /s/ Christopher Miglino

Christopher Miglino,

Chief Executive Officer



EXECUTIVE:

/s/ Dustin Suchter

Dustin Suchter






-11-






Exhibit A



CONFIDENTIALITY/ NON-DISCLOSURE AGREEMENT


THIS MUTUAL NON-DISCLOSURE AGREEMENT (this “ Agreement ”) is made and entered into as of the date of the latter of the two signatures appearing below between Social Reality, Inc. (“ Employer ”) and Dustin Suchter (“ Executive ”).


1.

Purpose.  Employer wishes to employ the Executive pursuant, during which employment the Employer may disclose to Executive certain confidential technical, financial, and business information – including but not limited to information relating to advertising techniques, historical prices, Internet-based advertising, marketing practices, clients, prospective clients, proprietary software, trade secrets, and other intellectual property – which Employer desires Executive to treat as confidential during and after the termination of Executive’s employment.


2.

Definition.  " Confidential Information " means any information, documents, and/or tangible things disclosed to Executive by Employer, either directly or indirectly in writing, orally or by inspection of tangible objects, including without limitation the Employer's business and operating plans, software, and competitors.  Without limiting the generality of the foregoing, Confidential Information shall include trade secrets as “trade secrets” are defined under the version of the Uniform Trade Secrets Act adopted and in effect in the State of California, as amended from time to time during the term of this Agreement, the provisions of which defining “trade secrets” are incorporated herein by reference.  Confidential Information shall also include but not be limited to all other discoveries, developments, designs, improvements, inventions, formulas, software programs, business plans, processes, username and password information, techniques, know-how, negative know-how, data, research, techniques, technical data, client and customer and supplier lists, financial projections, current and prospective financing arrangements, marketing methods, plans, and related data, customer lists, buying habits and practices, pricing structures, and payment and credit histories, costs of sales and terms of trade, the identity and business practices of vendors, suppliers, financiers, bankers, agents, or brokers, the identity, skill sets, and job duties of vendors, employees, independent contractors, or Executives, terms of employment for employees, agents, and representatives, including employee stock option plans and participation, written records and data used in developing and operating its business, other confidential information of, about, or concerning Employer’s business and affairs, the financing and operations of its business, and its relationships with its employees, agents, customers, vendors, or representatives, and any modifications or enhancements of any of the foregoing, and all Employer program, pricing, marketing, sales, business contract, or other financial or business information. Confidential Information shall not, however, include any information which Executive can establish: (i) was publicly known and made generally available in the public domain prior to the time of disclosure to Executive by Employer; (ii) becomes publicly known and made generally available after disclosure to Executive by Employer through no action or inaction of Executive; or (iii) is in the possession of Executive, without confidentiality restrictions, at the time of disclosure by the Employer as shown by Executive's files and records immediately prior to the time of disclosure.








It shall be presumed that any information in the possession of Executive that has been disclosed to Executive by Employer, or any agent or representative of Employer, is not within any of the exceptions to the definition of Confidential Information set forth in the previous sentence, and the burden is on Executive to prove otherwise by written records and documentation.


3.

Non-use and Non-disclosure .  Executive agrees not to use or disclose any Confidential Information for any purpose except as part of Executive’s performance of his job duties during his employment by the Employer.  Executive shall not reverse-engineer, disassemble or decompile any prototypes, software or other tangible objects, which embody Employer's Confidential Information and which are provided to Executive hereunder. The Executive agrees that all Confidential Information shall not be used by the Executive in any way adverse to the interests of the Employer or any of its subsidiaries during the Term of this Agreement, and shall not be used by the Executive in any way whatsoever following the Term of this Agreement.  The Executive will not, during the Term or thereafter, use, reference, paraphrase, deliver, reproduce, or in any way allow such information, documents, and/or things to be used, delivered, reproduced, or referenced, by any third party without specific prior written request to and the written authorization from a duly authorized representative of the Employer.  During and after termination of the Executive’s employment with the Employer, the Executive will not use, publish, release, reproduce, or otherwise make available to any third party any information, document, or thing containing or describing any trade secret or other Confidential Information of the Employer without prior specific written authorization of the Employer.  


4.

Maintenance of Confidentiality.  Executive agrees that he shall take all reasonable measures to protect the secrecy of and avoid disclosure and unauthorized use of the Confidential Information.  Without limiting the foregoing, Executive shall take at least those measures that Executive takes to protect his own most highly confidential information.  Executive shall not make any copies of Confidential Information, except as previously approved in writing by the Employer.  Executive shall reproduce the Employer's proprietary rights and confidentiality notices on any such approved copies, in the same manner in which such notices were set forth in or on the original.  Executive shall immediately notify the Employer in the event of any unauthorized use or disclosure of the Confidential Information.


5.

Ownership.

All documentary Confidential Information, and all copies and summaries or synopses thereof, however made or obtained, and whether in tangible or electronic medium, are and shall remain the exclusive property of the Employer.  


6.

Return of Materials.  All documents and other tangible objects containing or representing Confidential Information and all copies thereof which are in the possession of Executive shall be and remain the property of Employer and shall be promptly returned to Employer upon Employer's request.


7.

No License.  Nothing in this Agreement is intended to grant any rights to Executive under any patent, mask work right, or copyright of Employer, nor shall this Agreement grant Executive any rights in or to Confidential Information except as expressly set forth herein.



-2-






8.

Term.  This Agreement shall survive until such time as all Confidential Information disclosed hereunder becomes publicly known and made generally available through no action or inaction of Executive.


9.

Remedies.  Executive agrees that any violation or threatened violation of this Agreement will cause irreparable injury to the Employer, entitling Employer to seek injunctive relief in addition to all legal remedies.


AGREED AND ACCEPTED:


DUSTIN SUCHTER (“Executive”):


 

 

Date:

 

 

 

 

    

 

 

 

SOCIAL REALITY, INC. (“Employer”):

 

By:

 

 

Name:

Chris Miglino

 

Title:

Chief Executive Officer

 

Date:

 

 





-3-






Exhibit B


MUTUAL AGREEMENT TO ARBITRATE CLAIMS

I recognize that differences may arise between Social Reality, Inc. ( the “ Company ), and me during or following my employment with the Company, and that those differences may or may not relate to my employment or the termination of my employment.  I understand and agree that by entering into this Mutual Agreement to Arbitrate Claims ( Arbitration Agreement ), I anticipate gaining the benefits of a speedy, impartial, final and binding dispute-resolution procedure for any such differences.  

Except as provided in this Arbitration Agreement, the Federal Arbitration Act shall govern the interpretation, enforcement and all proceedings pursuant to this Arbitration Agreement.  To the extent that the Federal Arbitration Act is inapplicable, or held not to require arbitration of a particular Claim (as defined below), California law (or, to the extent applicable, other state law) pertaining to agreements to arbitrate shall apply.

1.

Claims Covered by the Arbitration Agreement.

The Company and I mutually consent to the resolution by arbitration of all claims or controversies ( Claims ), past, present or future, of whatever kind or nature and whether or not arising out of my employment or the termination of my employment, that the Company may have against me (or my successors, legal representatives, or assigns) or that I (or my successors, legal representatives, or assigns) may have against or related to any of the following:  (1) the Company, (2) its officers, directors, employees or agents in their capacity as such or otherwise, (3) the Company s parent, subsidiary and affiliated entities, (4) the benefit plans offered by the Company or the plans ’ sponsors, fiduciaries, administrators, affiliates and agents, and/or (5) all successors and assigns of any of the foregoing.

The only Claims subject to arbitration are those that, in the absence of this Arbitration Agreement, would have been justiciable (subject to resolution in a court of law under applicable state or federal law).  The Claims covered by this Arbitration Agreement include but are not limited to: claims for wages or other compensation due, including but not limited to stock options, bonuses and commissions; claims for breach of any contract or covenant (express or implied); tort claims; claims for discrimination (including but not limited to race, sex, sexual orientation, religion, national origin, age, marital status, physical or mental disability or handicap, or medical condition); claims for benefits (except claims under an employee benefit or pension plan that either (1) specifies that its claims procedure shall culminate in an arbitration procedure different from this one, or (2) is underwritten by a commercial insurer which decides claims); and claims for violation of any federal, state, or other governmental law, statute, regulation, or ordinance, except claims excluded by Section 2 of this Arbitration Agreement entitled “Claims Not Covered By The Arbitration Agreement”.

Except as otherwise provided in this Arbitration Agreement, both the Company and I agree that neither of us shall initiate or prosecute any lawsuit in State or Federal Court.  This Arbitration Agreement does not prohibit the filing of administrative claims or actions with the Equal Employment Opportunity Commission, the California Department of Fair Employment








and Housing, the United States Department of Labor, the California Labor Commission, or the National Labor Relations Board.

2.

Claims Not Covered by the Arbitration Agreement.

The only claims not covered by this Arbitration Agreement are (1) claims for workers compensation or unemployment compensation benefits; (2) claims for equitable relief, including but not limited to temporary or permanent restraining orders or injunctions in cases in which such equitable relief would otherwise be authorized by law; and (3) wage and hour claims where the amount in controversy is less than $25,000.00.  

3.

Arbitration Procedures.

a.

General Procedures

The Company and I agree that the aggrieved party must give formal written notice of any Claim to the other party no later than the expiration of the statute of limitations deadline for filing that the law prescribes for the Claim.  Otherwise, the Claim shall be void and deemed waived.  Written notice to the Company, or its officers, directors, employees or agents shall be sent to Chris Miglino at the Company s then-current address.  The Company will provide me written notice at the last address recorded in my personnel file.  The written notice shall identify and describe the nature of all Claims asserted, the facts upon which such Claims are based, and the relief or remedy sought.  The notice shall be sent to the other party by certified or registered mail, return receipt requested.    

The arbitration will be held before JAMS and, except as provided in this Arbitration Agreement, will be conducted in accordance with JAMS ’s then-current employment arbitration rules/procedures.  The Arbitrator shall be either a retired judge, or an attorney who is experienced in employment law and licensed to practice law in the state in which the arbitration is convened (the Arbitrator ).  The arbitration shall take place in Los Angeles County, California or in an alternate venue that is mutually agreeable to the parties.  The Arbitrator shall be selected pursuant to JAMS ’s then-current employment arbitration rules/procedures.  

Any party may be represented by an attorney or other representative selected by the party.

The Arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the state in which the Claim arose, or federal law, or both, as applicable to the Claim(s) asserted.  The Arbitrator shall have no jurisdiction to apply any different substantive law or law of remedies.  The Arbitrator shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Arbitration Agreement, including but not limited to disputes regarding the arbitrability of Claims and any Claim that all or any part of this Arbitration Agreement is void or voidable.  The arbitration shall be final and binding upon the parties, except as provided in this Arbitration Agreement.

The Arbitrator shall have jurisdiction to hear and rule on pre-hearing disputes and is authorized to hold pre-hearing conferences by telephone or in person, as the Arbitrator deems advisable.  The Arbitrator shall have the authority to entertain a motion to dismiss and/or a motion for summary judgment by any party and shall apply the standards governing such motions under the Federal Rules of Civil Procedure.  Should any party refuse or neglect to


-2-






appear for, or participate in, the arbitration hearing, the Arbitrator shall have the authority to decide the dispute based upon whatever evidence is presented.

The parties seek an expeditious completion of the arbitration, ideally in three days of hearing or less; provided , however , that the Arbitrator shall grant the parties time to present their positions that is sufficient in the Arbitrator’s judgment, taking into account the facts and issues in the case.

The Arbitrator shall render an award and written opinion no later than thirty (30) days from the date the arbitration hearing concludes.  The opinion shall include the factual and legal basis for the award.

Either party shall have the right, within twenty (20) days of issuance of the Arbitrato r’s opinion, to file with the Arbitrator a motion to reconsider (accompanied by a supporting brief), and the other party shall have twenty (20) days from the date of the motion to respond.  The Arbitrator thereupon shall reconsider the issues raised by the motion (without hearing or oral argument by the parties) and, promptly, either confirm or change the decision, which (except as provided by this Arbitration Agreement) shall then be final and conclusive upon the parties.   


b.

Discovery, Designation of Witnesses, Subpoenas


Each party shall have the right to take the deposition of significant percipient witnesses and any expert witness designated by another party.  Each party also shall have the right to make requests for production of documents to any party and to subpoena documents from third parties.  Either party may submit to the Arbitrator a request for additional discovery .  The Arbitrator shall grant an order for such requested additional discovery that the Arbitrator finds the party requires to adequately arbitrate a Claim, taking into account the parties’ mutual desire to have a fast, cost-effective dispute resolution mechanism.  


At least 30 days before the arbitration, the parties must exchange lists of witnesses, including any experts, and copies of all exhibits each party intends to use at the arbitration.

Each party shall have the right to subpoena witnesses and documents for the arbitration as well as documents relevant to the case from third parties.

4.

Fees and Costs.

a.

Petition to Compel Arbitration .  If any party initiates a lawsuit or administrative action that in any way relates to any Claim covered by this Arbitration Agreement, and the other party files and prevails on a Petition to Compel Arbitration or other legal proceeding to compel resolution of the Claim(s) in arbitration, that prevailing party shall recover reasonable attorneys’ fees and costs incurred in connection with such petition or other legal proceeding.  

b.

Arbitration Proceeding .  The Company shall bear the expenses associated with access to the arbitration forum.  However, each party shall pay those costs that would otherwise be incurred if the case were pending in court (e.g., reasonable filing and other administrative costs).  The remedies available in the arbitration shall be identical to those allowed by law.  Discovery will be allowed consistent with, and on the same terms as, the specifications in the


-3-






California Arbitration Act.  At the conclusion of the arbitration, the arbitrator shall be entitled to award reasonable attorneys' fees to the prevailing party, consistent with applicable law.    

5.

Requirements for Modification or Revocation.

This Arbitration Agreement to arbitrate shall survive the termination of my employment and the expiration of any benefit plan.  It can only be revoked or modified by a writing signed by both the Company and me which specifically states an intent to revoke or modify this Arbitration Agreement.

6.

Sole and Entire Arbitration Agreement and Construction.

This is the complete agreement of the parties on the subject of arbitration of disputes (except for any arbitration agreement in connection with any pension or benefit plan).  This Arbitration Agreement supersedes any prior or contemporaneous oral or written understandings on the subject.  No party is relying on any representations, oral or written, on the subject of the effect, enforceability, or meaning of this Arbitration Agreement, except as specifically set forth in this Arbitration Agreement.

If any provision of this Arbitration Agreement is held to be illegal, invalid or unenforceable under, or would require the commission of any act contrary to, existing or later-enacted laws, such provisions shall be fully severable, the Arbitration Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Arbitration Agreement, and the remaining provisions of this Arbitration Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Arbitration Agreement.  Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as part of this Arbitration Agreement a legal and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible, to the fullest extent allowed by law.

7.

Consideration.

The Company’s promise to arbitrate differences rather than litigate them before the courts and the Company’s offer to employ (or continue to employ) and my promise to arbitrate differences rather than litigate them before courts, provide consideration for each other.

8.

Not an Employment Agreement.

This Arbitration Agreement is not, and shall not be construed to create, any contract of employment, express or implied, nor does this Arbitration Agreement in any way alter the status of my employment.

9.

Voluntary Agreement

I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT, THAT I UNDERSTAND ITS TERMS, THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY AND ME RELATING TO THE SUBJECTS COVERED IN THE AGREEMENT ARE CONTAINED IN IT, AND THAT I HAVE ENTERED INTO THE AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON ANY


-4-






PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN THIS AGREEMENT ITSELF.

I UNDERSTAND THAT BY SIGNING THIS AGREEMENT I AM GIVING UP MY RIGHT TO A JURY TRIAL.


Employee Initials:

______________


I FURTHER ACKNOWLEDGE THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO DISCUSS THIS AGREEMENT WITH MY PRIVATE LEGAL COUNSEL AND HAVE AVAILED MYSELF OF THAT OPPORTUNITY TO THE EXTENT I WISH TO DO SO.

IN WITNESS WHEREOF , the parties have caused this Arbitration Agreement to be duly executed on the date(s) set forth below.

EMPLOYEE:

COMPANY:

Name: Dustin Suchter

Signature: _____________________

Date: _________________________

SOCIAL REALITY, INC.


By: ________________________

Christopher Miglino,

Chief Executive Officer

Date: _______________________

 

 




-5-



EXHIBIT 99.1

[SCRI_EX99Z1001.JPG]

Social Reality, Inc. Acquires Five Delta As They Continue Consolidation of Social and RTB Offerings

Five Delta technology and market knowledge complement Social Reality and the combination of their SRAX and Social Platforms.  


LOS ANGELES, December 22, 2014 – Social Reality, Inc. (OTCBB: SCRI), a leader in automated digital platform technology and social management software for Internet advertising, announced today the acquisition of Five Delta, a privately held company that specializes in the execution and management of media buys across all social platforms.  


Five Delta has developed patent pending technology that will integrate into the SRAX (Social Reality Ad Exchange) platform and allow both publishers and media buyers to benefit from the optimization of both social and RTB media buys.   


“We are excited to integrate the Five Delta technology into our platform and to further enhance our offerings to our customers,” said Chris Miglino, CEO and Co-Founder of Social Reality. “We continue to build technology that bridges the gap between social and RTB media buying, and Five Delta will help us accelerating these offerings.”


“It isn't often I see such an interesting ad technology company and, better yet, be fortunate enough to join forces with it," said Dustin Suchter, Founder of Five Delta. "Honestly, I get excited when things start to multiply and have a really meaningful impact on the marketplace. Social Reality's SRAX is a great platform and adding Five Delta is so mutually beneficial that I am really looking forward to the net result."


The company’s Social Reality Ad Exchange (SRAX) is an SSP that was launched in early 2013 in order to connect online publishers with demand partners and buyers through advanced programmatic technology and RTB integration. The SRAX platform has gained the reputation for making buying and selling of display, video, mobile and in-app advertising an easier and more efficient experience than other digital ad technologies. Its proprietary RTB management platform integrates social information to optimize client results from the DSP and SSP offerings. Social Reality’s GroupAd product offering is a complementary social management and tracking software focused on delivering brand advocacy and customer loyalty via an integrated dashboard, to launch, distribute and optimize social and digital media campaigns.


About Social Reality

Founded in 2010, Los Angeles-based Social Reality, Inc. is an Internet advertising company that provides tools that automate the digital advertising market. The company has built technologies and leveraged partner technologies that service social media and the real-time bidding (RTB) markets. For more information, please visit www.socialreality.com, www.srax.com , www.sraxmd.com , www.sraxdi.com , www.groupad.com , www.steelmediainc.com .



1





About Five Delta

Founded in 2012, Santa Monica-based Five Delta, Inc. is an Internet technology company that leverages high quality data to optimize digital advertising. The company has two pending patents and a platform that automates step-function performance gains for online advertisers buying social traffic today.


Forward-Looking Statements


This press release contains forward-looking statements. Any statements contained herein which do not describe historical facts, including but not limited to, statements regarding: (i) our business; (ii) the transaction with Steel Media, including expected benefits, opportunities, synergies, financing, results and the impact on revenue, adjusted operating earnings, EBITDA, shareholder value, and the impact on our financial profile; (iii) expectations about the combined company; (iv) SCRI's intentions to provide further guidance and its intention to name the current Steel Media executives who will be joining SCRI's leadership team; (v) expectations for the Steel Media commercial platform and our entry into a segment important for future growth; (vi) our belief that this is a transformative transaction that propels us into a profitable, multi-product company positioned for continued revenue, and operating income growth, further diversification and shareholder value creation; (vii) expectations regarding  future acquisitions; (viii) beliefs about the commercial platform and the strategic fit of Steel Media; (ix) our plans to expand our portfolio through the in-license or purchase of additional products or companies; and (x) our goal of bringing to the market services and products that provide clear benefits and improve our customers’ businesses, are forward-looking statements which involve risks and uncertainties that could cause actual results to differ materially from those discussed in such forward-looking statements. Statements about SCRI's or Steel Media's past financial results do not, and are not meant to, predict future results. Social Reality can provide no assurance that such results and performance will continue.


Risks and uncertainties include, among others: (1) the possibility that we may not realize the expected benefits, synergies and opportunities anticipated in connection with the transaction, including the anticipated revenue and cost synergies, and continuing revenue growth, (2) the challenges of integrating the Steel Media commercial team with Social Reality, (3) the impact on sales from competitive pricing, and sales and marketing initiatives, (4) liabilities we assume from Steel Media that may be higher than expected, (5) the possibility that sales will not meet expectations as a result of current and future competition, (6) in connection with the Steel Media acquisition, we will incur a substantial amount of indebtedness and will have to comply with restrictive and affirmative debt covenants, (7) the expectation that we will need to raise additional capital from the sale of our common stock, which will cause significant dilution to our stockholders, in order to satisfy our contractual obligations, including our debt service, earn out payments that may become payable to Steel Media’s stockholder or in order to pursue business development activities, (8) due to the Steel Media transaction, we will be highly leveraged and have limited cash and cash equivalent resources which may limit our ability to take advantage of attractive business development opportunities and execute on our strategic plan, (9) our ability to execute on our long-term strategic plan or to realize the expected results from our long-term strategic plan, (10) our patents and proprietary rights both in the U.S. and outside the U.S. (including those that we acquire from the acquisition of Steel Media), (11) other risks identified in our filings with the U.S. Securities and Exchange Commission (SEC), including our Quarterly Report on Form 10-Q and subsequent filings with the SEC. Any of the above risks and uncertainties could materially and adversely affect our results of operations, our profitability and our cash flows, which would, in turn, have a significant and adverse impact on our stock price. Use of the term "including" in the two paragraphs above shall mean in each case "including, but not limited to." We caution you not to place undue reliance on any forward-looking statements, which speak only as of the date they are made.




2




We disclaim any obligation to publicly update or revise any such statements to reflect any change in expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.



Contact:

Laura Knapp

Social Reality Inc.

Socialreality.com

laura@socialreality.com


















3