CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE NON-PUBLIC INFORMATION HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
AMENDMENT TO
EMPLOYMENT AGREEMENT

This AMENDMENT, dated as of December 8, 2011, between Towerstream Corporation, a
Delaware corporation (the “Company”) and Jeffrey M. Thompson, an individual
(“Employee”), amends that certain Employment Agreement first entered into
between Company and Employee as of the 21st day of December 2007 (the
“Employment Agreement”).

 
1. 
Pursuant to the terms of the Employment Agreement, Employee was employed as
Company’s Chief Executive Officer.

 

 
2. 
The Company and the Employee desire to amend the Employment Agreement such that
Employee as set forth herein.

 

 
3. 
Section 4 (a) of the Employment Agreement is hereby deleted in its entirety and
replaced with the following:

 
“The Company shall pay the Employee as compensation for his services hereunder,
in equal semi-monthly or bi-weekly installments during the Term, the sum of
$330,000 per annum (the “Base Salary”), less such deductions as shall be
required to be withheld by applicable law and regulations. This Amendment
extends the term of the Employee Employment Agreement two years from the
Effective Date of this Amendment.
 

 
4. 
Section 4 of the Employment Agreement is hereby amended by adding new
subparagraph “(f)”, as follows:

 
“Special Bonuses.  The Employee shall be eligible to receive a bonus (the
“Bonus”) (and such additional Bonuses as is awarded by the Compensation
Committee of the Board (the “Compensation Committee”). The Bonus shall be paid
by the Company to the Employee promptly after determination that any of the
targets related Employee’s performance having been met. In the event that the
Compensation Committee is unable to act or if there shall be no such
Compensation Committee, then all references herein to the Compensation Committee
(except in the proviso to this sentence) shall be deemed to be references to the
Board of Directors.  The “Bonuses” shall survive expiration or termination of
this Agreement for a period of twelve (12) months, provided that the transaction
occurs with a party with which Employee had material substantive discussions and
a letter of intent and substantive due diligence activities commenced prior to
termination of the Term.
 
The Company shall pay the following Special Bonus amounts to Employee:
 

 
(i)
the Company shall pay Employee $25,000.00 as a bonus on the Effective Date;

 
 
 

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CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE NON-PUBLIC INFORMATION HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 

 
(ii)
the Company shall pay Employee $25,000.00 upon closing of the acquisition of
[*];

 

 
(iii)
the Company shall pay Employee, upon completion of the first agreement to
provide [*], a one-time bonus of $25,000.

 

 
(iv)
In addition, Employee can elect to convert to cash up to twenty-five (25%)
percent of the shares of Common Stock issued to Employee under the next three
awards of the equity incentive plan of the Company, cash amount determined under
the Black-Scholes method determined based upon the strike price of the Common
Stock as specified in the equity incentive plan.”

 

 
5. 
Section 13 of the Employment Agreement is hereby added as follows:

 
Section 409A.
 
The provisions of this Agreement are intended to comply with Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”) and any final regulations
and guidance promulgated thereunder (“Section 409A”) and shall be construed in a
manner consistent with the requirements for avoiding taxes or penalties under
Section 409A.  The Company and Employee agree to work together in good faith to
consider amendments to this Agreement and to take such reasonable actions which
are necessary, appropriate or desirable to avoid imposition of any additional
tax or income recognition prior to actual payment to Employee under Section
409A.
 
To the extent that Employee will be reimbursed for costs and expenses or in-kind
benefits, except as otherwise permitted by Section 409A, (a) the right to
reimbursement or in-kind benefits is not subject to liquidation or exchange for
another benefit, (b) the amount of expenses eligible for reimbursement, or
in-kind benefits, provided during any taxable year shall not affect the expenses
eligible for reimbursement, or in-kind benefits to be provided, in any other
taxable year; provided that the foregoing clause (b) shall not be violated with
regard to expenses reimbursed under any arrangement covered by Section 105(b) of
the Code solely because such expenses are subject to a limit related to the
period the arrangement is in effect and (c) such payments shall be made on or
before the last day of the taxable year following the taxable year in which you
incurred the expense.
 
A termination of employment shall not be deemed to have occurred for purposes of
any provision of this Agreement providing for the payment of any amounts or
benefits upon or following a termination of employment unless such termination
constitutes a “Separation from Service” within the meaning of Section 409A and,
for purposes of any such provision of this Agreement references to a
“termination,” “termination of employment” or like terms shall mean Separation
from Service.
 

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[*]Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission.  Confidential treatment has been
requested with respect to the omitted portion.
 
 
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CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE NON-PUBLIC INFORMATION HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 
Each installment payable hereunder shall constitute a separate payment for
purposes of Treasury Regulation Section 1.409A-2(b), including Treasury
Regulation Section 1.409A-2(b)(2)(iii).  Each payment that is made within the
terms of the “short-term deferral” rule set forth in Treasury Regulation Section
1.409A-1(b)(4) is intended to meet the “short-term deferral” rule.  Each other
payment is intended to be a payment upon an involuntary termination from service
and payable pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii), et.
seq., to the maximum extent permitted by that regulation, with any amount that
is not exempt from Code Section 409A being subject to Code Section 409A.
 
Notwithstanding anything to the contrary in this Agreement, if Employee is a
“specified employee” within the meaning of Section 409A at the time of
Employee’s termination, then only that portion of the severance and benefits
payable to Employee pursuant to this Agreement, if any, and any other severance
payments or separation benefits which may be considered deferred compensation
under Section 409A (together, the “Deferred Compensation Separation Benefits”),
which (when considered together) do not exceed the Section 409A Limit (as
defined herein) may be made within the first six (6) months following Employee’s
termination of employment in accordance with the payment schedule applicable to
each payment or benefit.  Any portion of the Deferred Compensation Separation
Benefits in excess of the Section 409A Limit otherwise due to Employee on or
within the six (6) month period following Employee’s termination will accrue
during such six (6) month period and will become payable in one lump sum cash
payment on the date six (6) months and one (1) day following the date of
Employee’s termination of employment.  All subsequent Deferred Compensation
Separation Benefits, if any, will be payable in accordance with the payment
schedule applicable to each payment or benefit. Notwithstanding anything herein
to the contrary, if Employee dies following termination but prior to the six (6)
month anniversary of Employee’s termination date, then any payments delayed in
accordance with this paragraph will be payable in a lump sum as soon as
administratively practicable after the date of Employee’s death and all other
Deferred Compensation Separation Benefits will be payable in accordance with the
payment schedule applicable to each payment or benefit.
 
For purposes of this Agreement, “Section 409A Limit” will mean a sum equal (x)
to the amounts payable prior to March 15 following the year in which Employee
terminations plus (y) the lesser of two (2) times: (i) Employee’s annualized
compensation based upon the annual rate of pay paid to Employee during the
Company’s taxable year preceding the Company’s taxable year of Employee’s
termination of employment as determined under Treasury Regulation
1.409A-1(b)(9)(iii)(A)(1) and any IRS guidance issued with respect thereto; or
(ii) the maximum amount that may be taken into account under a qualified plan
pursuant to Section 401(a)(17) of the Code for the year in which Employee’s
employment is terminated.
 
 
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CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A REQUEST FOR
CONFIDENTIAL TREATMENT AND THE NON-PUBLIC INFORMATION HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
 

 
6. 
The effective date of this Amendment shall be December 10, 2011.

 

 
7. 
Terms used in this Amendment but not defined herein will have the respective
meanings ascribed to such terms in the Employment Agreement.  In the event of
any conflict between the terms of this Amendment and the terms of the Employment
Agreement, this Amendment shall control.  Except as modified by this Amendment,
the Employment Agreement shall remain in full force and effect.

 
 

 
TOWERSTREAM CORPORATION

 
By:/s/ Howard L. Haronian                                     
Name:  Howard L. Haronian
Title:  Chairman, Compensation Committee
 
 
JEFFREY M. THOMPSON

 
/s/ Jeffrey M. Thompson                                            

 
 
 
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