Document:

Exhibit 4.2

 

Form of Warrant

 

STOCK PURCHASE WARRANT

 

To Subscribe for and Purchase

Common Stock of

 

AUGME TECHNOLOGIES, INC.

 

THIS CERTIFIES THAT, for value received, [                      ], or its registered assigns, (herein referred to as the “Purchaser” or “holder”), is entitled to subscribe for and purchase from Augme Technologies, Inc. (herein called the “Company”), a corporation organized and existing under the laws of the State of Delaware,                        (1) fully paid and nonassessable shares (“Shares”) of common stock (herein the “Common Stock”) (subject to the limitation in Section 2(b) and to adjustment as noted below) at the exercise price of $                per Share (the “Warrant Purchase Price”) (subject to adjustment as noted below). This Warrant may only be exercised during the Exercise Period specified herein. This Warrant has been issued together with Shares of the Common Stock in a public offering registered on the Company’s Registration Statement on Form S-3 (Reg. No. 333-175191) (the “Registration Statement”) filed with the U.S. Securities and Exchange Commission (the “SEC”) in connection with a public offering (the “Offering”) described in the prospectus supplement dated September 20, 2012 filed with the SEC.

 

This Warrant is subject to the following provisions, terms and conditions:

 

1.             The Warrant exercise period (the “Exercise Period”) for this Warrant shall begin on the date of the issuance of this Warrant at the closing of the Offering and shall end on September 28, 2017.

 

2.             The rights represented by this Warrant may be exercised by the holder hereof as follows:

 

(a)           The rights represented by this Warrant may be exercised by the holder hereof, in whole or in part, by written notice of exercise delivered to the Company and by the surrender of this Warrant (properly endorsed if required) at the principal office of the Company and upon payment to it by check of the Warrant Purchase Price for such Shares. The Company agrees that the Shares so purchased shall be and are deemed to be issued to the holder hereof as the record owner of such Shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such Shares as aforesaid. Subject to the provisions of the next succeeding paragraph, within 10 Business Days after the rights represented by this Warrant shall have been exercised the Company shall cause its transfer agent to issue the Shares of stock so purchased to Purchaser in book—entry format and deliver evidence of such issuance to Purchaser, and, unless this Warrant has expired, a new Warrant representing the number of Shares, if any, with respect to which this Warrant shall not then have been exercised shall also be delivered to the holder hereof within such time.

 

(b)           Notwithstanding any other provision in this Warrant, no holder shall be permitted to exercise this Warrant for an amount of Common Stock that would result in such holder owning more than 19.99% of the Common Stock outstanding after such exercise.

 

3.             The Company represents and warrants that this Warrant has been duly authorized by all necessary corporate action, has been duly executed and delivered and is a legal and binding obligation of the Company, enforceable against the Company in accordance with the terms of this Warrant, except to the extent (i) such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights generally and (ii) such enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). The Company covenants and agrees that all Shares which may be issued upon the exercise of the rights represented by this Warrant according to the terms hereof or represented by the Common Stock will, upon issuance and payment therefor, be duly authorized and issued, fully paid and nonassessable. The Company further covenants and agrees that during the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of issue or transfer upon exercise of the subscription rights evidenced by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the

 

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rights represented by this Warrant, free from preemptive rights or other actual contingent purchase rights other than those held by a holder of this Warrant (as a result of holding this Warrant).

 

4.             The Company will pay any documentary stamp taxes attributable to the issuance of Shares of Common Stock upon the exercise of this Warrant; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrants, or shares of Common Stock issued upon exercise of this Warrant, in a name other than that of the Purchaser. The Purchaser shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Shares of Common Stock upon exercise hereof.

 

5.             The above provisions are, however, subject to the following:

 

(a)           The Warrant Purchase Price shall, from and after the date of issuance of this Warrant, be subject to adjustment from time to time as hereinafter provided. Upon each adjustment of the Warrant Purchase Price, the holder of this Warrant shall thereafter be entitled to purchase, at the Warrant Purchase Price resulting from such adjustment, the number of Shares obtained by multiplying the Warrant Purchase Price in effect immediately prior to such adjustment by the number of Shares purchasable pursuant hereto immediately prior to such adjustment and dividing the product thereof by the warrant purchase price resulting from such adjustment.

 

(b)           In case the Company shall at any time subdivide its outstanding shares of Common Stock into a greater number of shares, the Warrant Purchase Price in effect immediately prior to such subdivision shall be proportionately reduced, and conversely, in case the outstanding shares of Common Stock of the Company shall be combined into a smaller number of shares, the Warrant Purchase Price in effect immediately prior to such combination shall be proportionately increased.

 

(c)           Upon any adjustment of the Warrant Purchase Price or any adjustment of any material terms hereof, then and in each such case an officer of the Company shall, as soon as practicable after the occurrence of any event that requires an adjustment or readjustment, give signed written notice thereof, by first—class mail, postage prepaid, addressed to the registered holder of this Warrant at the address of such holder as shown on the books of the Company, which notice shall state the Warrant Purchase Price resulting from such adjustment, any material change in the terms of the Warrant, and the increase or decrease, if any, in the number of Shares purchasable at such price upon the exercise of this Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.

 

(d)           In case any time there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company, then, in any one or more of said cases, the Company shall give written notice, by first—class mail, postage prepaid, addressed to the registered holder of this Warrant at the address of such holder as shown on the books of the Company, of the date on which such dissolution, liquidation or winding up shall take place, as the case may be. Such notice shall also specify the date as of which the holders of capital stock of record shall be entitled to exchange their capital stock for securities or other property deliverable upon such dissolution, liquidation or winding up, as the case may be. Such written notice shall be given at least 20 days prior to the action in question and not less than 20 days prior to the record date or the date on which the Company’s transfer books are closed in respect thereto.

 

(e)           Fundamental Transactions.

 

(i)            It shall be a condition to the Company’s entry into a Fundamental Transaction that (i) if the Successor Entity (or the Successor Entity’s Parent Entity) is a publicly traded entity whose common stock is quoted on or listed for trading on an U.S. national securities exchange, the Successor Entity (or Parent Entity, if applicable) assumes in writing (or remains bound by) all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 5(e), including agreements (if necessary) to deliver to each holder of the Warrants in exchange for such Warrants a security of the Successor Entity (or Parent Entity, if applicable) evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, an adjusted (if necessary) exercise price equal to the value for the shares of Common Stock reflected by the terms of such Fundamental Transaction, and exercisable for a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and (ii) if the Successor Entity (or the Successor Entity’s Parent Entity) is not a publicly traded entity whose common stock is quoted on or listed for trading on an U.S. national securities exchange, the Successor Entity assumes in writing (or remains bound by) all of the obligations of the Company under this Warrant pursuant to written agreements,

 

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including (if necessary) agreements to deliver to each holder of Warrants in exchange for such Warrants a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant exercisable for the consideration that would have been issuable in the Fundamental Transaction in respect of the Warrant Shares had this Warrant been exercised immediately prior to the consummation of the Fundamental Transaction.  Upon the occurrence of any such Fundamental Transaction, the Successor Entity (or Parent Entity, if applicable) shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity (or Parent Entity, if applicable)), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity (or Parent Entity, if applicable) had been named as the Company herein.  The provisions of this paragraph (e) shall similarly apply to subsequent Fundamental Transactions.

 

(ii)           Notwithstanding the foregoing, in the event of a Fundamental Transaction (other than a merger, consolidation or other transaction effected solely to change the Company’s jurisdiction of organization), at the written request of the Holder delivered before the 30th day after the consummation of such Fundamental Transaction, the Company (or the Successor Entity) shall purchase this Warrant from the Holder by paying to the Holder on the effective date of the Fundamental Transaction (or within five Business Days after such request if delivered after the effective date), cash in an amount equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of such Fundamental Transaction.

 

(iii)          For purposes of this Warrant, the following definitions shall apply:

 

“Black Scholes Value” means the value of this Warrant based on the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of the closing of the applicable Fundamental Transaction for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of such date of request, (ii) an expected volatility equal to the greater of (A) 100% and (B) the 100 day volatility obtained from the HVT function on Bloomberg as of the day immediately following the public announcement of the applicable Fundamental Transaction, and (iii) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash, if any, plus the value of any non cash consideration, if any, being offered in the Fundamental Transaction.

 

“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.

 

“Fundamental Transaction” means that (A) the Company shall, directly or indirectly, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Person, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person, or (iii) another Person completes a purchase, tender or exchange offer that is accepted by the holders of more than the 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (iv) consummate a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than the 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock purchase agreement or other business combination), or (v) reorganize, recapitalize or reclassify its Common Stock (other than as a result of a subdivision or combination of shares of Common Stock covered by Section 5(b) above) or (B) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock.

 

“Parent Entity” of a Person means a Person that, directly or indirectly, controls the applicable Person, or, if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest market capitalization as of the date of consummation of the Fundamental Transaction.

 

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“Person” means any individual, partnership, corporation, limited liability company, association, joint stock company, trustee or trust, joint venture, unincorporated organization or any other business entity or association.

 

“Successor Entity” means the Person formed by, resulting from or surviving any Fundamental Transaction or the Person with which such Fundamental Transaction shall have been entered into.

 

(f)            If any event occurs as to which in the opinion of the Board of Directors of the Company the other provisions of this Section 5 are not strictly applicable or if strictly applicable would not fairly protect the purchase rights of the holder of this Warrant or of Common Stock in accordance with the essential intent and principles of such provisions, then the Board of Directors shall make an adjustment in the application of such provisions, in accordance with such essential intent and principles, so as to protect such purchase rights as aforesaid.

 

6.             This Warrant shall not entitle the holder hereof to any voting rights or other rights as a stockholder of the Company.

 

7.             This Warrant is exchangeable, upon the surrender hereof by the holder hereof at the principal office of the Company, for new Warrants of like tenor representing in the aggregate the right to subscribe for and purchase the number of shares which may be subscribed for and purchased hereunder, each of such new Warrants to represent the right to subscribe for and purchase such number of shares as shall be designated by said holder hereof at the time of such surrender.

 

8.             Subject to compliance with any applicable securities laws, this Warrant may be offered for sale, sold, transferred or assigned, in whole or in part, without the consent of the Company. Any such sale, transfer or other assignment shall be effected by delivery at the principal office of the Company or its designated agent, of a written assignment of this Warrant in a form reasonably satisfactory to the Company duly executed by the Holder or its agent or attorney, and of funds sufficient to pay any transfer taxes payable upon the making of such transfer.

 

9.             This Warrant has been registered with the SEC and qualified by state authorities, or an exemption from such registration and qualification requirements is available. The Shares of Common Stock issuable upon exercise of the Warrant may be transferred and sold in reliance on the Registration Statement. The Company will attempt to maintain the effectiveness of a current prospectus covering the Common Stock issuable upon exercise of the Warrants until the expiration or redemption of the Warrants.

 

10.           The Company will not be required upon the exercise of this Warrant to issue fractions of shares of Common Stock, but may, at its option, either (a) purchase such fraction for an amount in cash equal to the current value of such fraction computed on the basis of the closing market price of a share of Common Stock as quoted on the principal exchange or trading facility on which shares of Common Stock are traded on the trading day immediately preceding the day upon which this Warrant was surrendered for exercise in accordance with Section 2 hereof, or (b) issue the required share. By accepting this Warrant, the holder hereof expressly waives any right to receive any fractional share upon exercise of a Warrant, except as expressly provided in this Section 10.

 

11.           If this Warrant is exercised for less than all of the then-current number of shares purchasable hereunder, then the Company shall, concurrently with the issue of the Shares of stock purchased by Purchaser upon such exercise in accordance with Section 2, issue a new warrant exercisable for the remaining number of shares purchasable under this Warrant.

 

12.           Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant and security reasonably satisfactory to it, the Company shall execute and deliver a new warrant of like tenor as the Warrant so lost, stolen, destroyed or mutilated.

 

13.           All questions concerning this Warrant will be governed and interpreted and enforced in accordance with the internal law, not the law of conflicts, of the State of Delaware.

 

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IN WITNESS WHEREOF, Augme Technologies, Inc. has caused this Warrant to be signed by its duly authorized officer and this Warrant to be dated as of the date set forth above.

 

	
 
    	
AUGME TECHNOLOGIES, INC.
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Its
    	
 
    

 

 

SUBSCRIPTION FORM

 

To be Executed by the Holder of this Warrant if such Holder

Desires to Exercise this Warrant in Whole or in Part

 

	
To:
    	
Augme Technologies, Inc. (the “Company”)
    

 

The undersigned

 

Please insert Social Security or other

identifying number of Subscriber:

 

hereby irrevocably elects to exercise the right of purchase represented by this Warrant for, and to purchase thereunder, shares of the Common Stock (the “Common Stock”) provided for therein and tenders payment herewith to the order of the Company in the amount of $            , such payment being made as provided on the face of this Warrant.

 

The undersigned requests that certificates for such shares of Common Stock be issued as follows:

 

	
Name:
    	
 
    
	
 
    	
 
    
	
Address:
    	
 
    
	
 
    	
 
    
	
Deliver to:
    	
 
    
	
 
    	
 
    
	
Address:
    	
 
    

 

and, if such number of shares of Common Stock shall not be all the shares of Common Stock purchasable hereunder, that a new Warrant for the balance remaining of the shares of Common Stock purchasable under this Warrant be registered in the name of, and delivered to, the undersigned at the address stated above.

 

	
Dated:
    	
 
    	
 
    
	
 
    	
 
    	
Signature
    
	
 
    	
 
    	
Note: The signature on this Subscription   Form must correspond with the name as written upon the face of this   Warrant in every particular, without alteration or enlargement or any change   whatever.Exhibit 10.1

 

SEPARATION AND RELEASE AGREEMENT

 

This Separation and Release Agreement (this “Agreement”) is made and entered into as of September 25, 2012 (the “Contract Date”), by and between Paul R. Arena (“Employee” or “You”), on the one hand, and Augme Technologies, Inc., a Delaware corporation, Hipcricket, Inc., a Delaware corporation, and Geos Communications IP Holdings, Inc., a Delaware corporation, on the other (collectively, the “Company” or “Employer”).  Employee and the Company are sometimes each referred to herein as a “Party” and collectively, as the “Parties”.  Terms used herein but not otherwise defined shall have the meanings ascribed thereto in the Employment Agreement (as defined below).

 

WITNESSETH:

 

WHEREAS, Employee and the Company are parties to that certain Employment Agreement, effective June 8, 2010, as amended September 7, 2010 and June 27, 2011 (the “Employment Agreement”); and

 

WHEREAS, Employee and the Company desire to separate from their business relationship as provided herein;

 

NOW, THEREFORE, in consideration of the premises and mutual promises herein contained, it is agreed as follows:

 

1.                                       Effective as of September 17, 2012 (the “Separation Date”), your employment with the Company (including your position as Chief Executive Officer and Secretary and any and all other offices you held with the Company or any of its subsidiaries (excluding your positions as a member of the Board of Directors of Augme Technologies, Inc., Hipcricket, Inc. and Geos Communications IP Holdings, Inc.)) terminated.  Except for Sections 11, 12, 13 and 16 of the Employment Agreement, as of the Separation Date, the Employment Agreement terminated and had no further force or effect.  The Parties understand and agree that neither the making of this Agreement nor the fulfillment of any condition or obligation of this Agreement constitutes an admission of any liability or wrongdoing by the Company, any of the Employee Releasees (as defined below) or any of the Company Releasees (as defined below).

 

2.                                       On December 31, 2012, your position as a member of the Board of Directors of Augme Technologies, Inc., Hipcricket, Inc., and Geos Communications IP Holdings, Inc. will end as a result of your resignation.  Furthermore, upon execution of this Agreement, Employee will deliver to the Company an executed resignation letter, in substantially the form attached hereto as Exhibit A. The contents of the resignation letter shall form the substance of the Company’s 8-K filing with respect to the Employee’s depature from the Board of Directors of Augme Technologies, Inc., Hipcricket, Inc., and Geos Communications IP Holdings, Inc.

 

3.                                       This Agreement supersedes any and all other agreements, written or verbal, which may exist between the Company and Employee concerning Employee’s

 

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separation from the Company, including without limitation any representations made to Employee by any executive officer or director of the Company.

 

4.                                       Employee Acknowledgments.

 

(a)                                  You have been advised by the Company to consult with the attorney of your choice prior to signing this Agreement.

 

(b)                                 You have been given a period of at least twenty-one (21) days within which to consider this Agreement.

 

(c)                                  You would not be entitled to receive the consideration offered to You herein but for your signing this Agreement.

 

(d)                                 You may revoke this Agreement within seven (7) days after the date You sign it by providing written notice of the revocation to the Chief Executive Officer of the Company no later than the seventh day after You sign it.  It is understood and agreed that any notice of revocation received by the Chief Executive Officer of the Company after the expiration of this seven (7) day period shall be null and void.

 

5.                                       It is further expressly agreed by the Parties that this Agreement shall not become effective or enforceable and the consideration referred to in Section 7 below and elsewhere herein will not be paid until the seven (7) day revocation period described in Section 4(d) above has expired.  Therefore, it is expressly agreed by the Parties that the “Effective Date” of this Agreement is the first day after the date the seven (7) day revocation period has expired.

 

6.                                       Employee represents that he has consulted or has had sufficient opportunity to discuss with any person, including the attorney of his choice, all provisions of this Agreement, that he has carefully read and fully understands all the provisions of this Agreement, that he is competent to execute this Agreement, and that he is voluntarily entering into this Agreement of his own free will and accord, without reliance upon any statement or representation of the Company or its representatives.

 

7.                                       Provided that Employee does not revoke this Agreement and complies with his obligations hereunder, the Company agrees as follows:

 

(a)                                  For the period commencing on September 17, 2012 through June 8, 2013 (the “Separation Payment Period”), the Company will pay to Employee an amount equal to $35,416.67 (less statutory deductions) per calendar month, payable semi-monthly (pro-rated for partial months).

 

(b)                                 Employee has submitted to the Company a list of expenses for which he is seeking reimbursement. Immediately following the Effective Date, the Company will pay Employee $2,970.01 in full and final payment of all expense claims of Employee.  In addition, immediately following the Effective Date, the Company will pay Employee $43,608.11, less statutory deductions, representing any amounts owed Employee for accrued but unpaid payroll and accrued and unused paid time off.  After the

 

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Effective Date, the Company also will reimburse You up to a maximum of $2,000.00, for your reasonable legal fees and expenses incurred in negotiating this Agreement and related matters; provided that You submit to the Company an invoice for such services from your attorney.

 

(c)                                  Following the Separation Date, You will be entitled to retain the Samsung and iPhone cellular phones along with the Apple monitor, keyboard, mouse and HP P2055 printer from your office currently owned by the Company (the “Retained Equipment”), and the Company will reimburse you $130.00 each month during the Separation Payment Period for the fees and taxes for such cell phones and payment shall be made by the 15th of every month, with the first payment to be paid by October 15, 2012 and the last payment to be made by June 15, 2013.

 

(d)                                 Following the Separation Date, the Company will reimburse you $4,600.00 each month during the Separation Payment Period for an apartment in New York and payment shall be made by the 1st of each month, with the first payment to be made by October 1, 2012 and the last payment to be made by June 1, 2013.  In addition, the Company will pay you $3,000.00 per month of non-accountable expense reimbursement for a period of six months beginning October 2012 and ending April 2013, and payment shall be made to you by the 15th of each such month.

 

(e)                                  Upon execution of this Agreement by the Parties, You will deliver to the Company a flashdrive containing a copy of all information pertaining to the Company and its subsidiaries on the harddrive of any computer within your possession, custody or control.

 

(f)                                    The Company will pay on Employee’s behalf payments for medical and dental benefits under the Company’s medical and dental benefit plans, according to those benefits chosen by Employee for continuation under The Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), until March 31, 2014; provided, however, that nothing set forth within this Agreement shall be construed as obligating the Company to maintain and/or continue in force any benefit plan.

 

8.                                       Reference is hereby made to that certain Incentive Stock Option Agreements, dated as of June 8, 2010, September 7, 2010 and Decmber 29, 2011 by and between the Company and Employee (the “Option Agreements”).  Effective as of the Effective Date, all options granted to Employee prior to the Effective Date are hereby vested in full.  In addition, notwithstanding anything to the contrary, effective as of the Effective Date: (i) the Option Period (as defined therein) shall expire at the close of business on fifth anniversary of each option issuance; and (ii) if the options granted under the September 7, 2010 Option Agreement and December 29, 2010 Option Agreement are deemed to have been issued under the Company’s 2010 Stock Incentive Plan (the “2010 Option Plan”), then it is agreed that Section 9 of the 2010 Option Plan shall not apply to the September 7, 2010 and December 29, 2010 Option Agreements.

 

9.                                       On the Effective Date the Company will execute and deliver to You a warrant, which warrant: (i) is exercisable to purchase 250,000 shares at an exercise price

 

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of $1.50 for a period of 5 years with cashless exercise provisions;  (ii) is hereby vested in full; and (iii) is otherwise in the form of Exhibit B attached hereto.

 

10.                                 The Employment Agreement provided for the issuance by the Company to You of 225,000 shares of Common Stock (the “Employment Shares”). As of the Effective Date, all Employment Shares granted to Employee are hereby vested in full.

 

11.                                 Except as provided in Section 7(f) above, Employee’s health insurance and all other Company benefits will terminate according to the terms of the plans.  This provision is not, however, intended to waive Employee’s rights under COBRA.  Employee acknowledges that the Company will provide the COBRA notice, in accordance with federal guidelines, under which Employee may elect continuation of coverage.

 

12.                                 Effective as of the Separation Date, You will be deemed to have resigned as Chief Executive Officer and Secretary of Augme Technologies, Inc., Hipcricket, Inc. and Geos Communications IP Holdings, Inc., it being agreed and understood that this Agreement shall serve as irrevocable written notice of such resignation; and furthermore, upon execution of this Agreement, you will deliver to the Company an executed Resignation Letter, dated as of the Separation Date, in substantially the form attached hereto as Exhibit C.

 

13.                                 During the Separation Payment Period, You agree to make yourself available to consult with the Chief Executive Officer of the Company (the “CEO”) or persons designated by the CEO on matters concerning the Company and its subsidiaries as reasonably requested by the CEO from time to time; provided, however, that in no event shall You be required to devote more than sixty (60) hours of your time to performing such services during any calendar quarter.  You and the Company agree that You will receive no compensation for performing such services, but You will be: (i) paid at the rate of $250 per hour for each hour over sixty (60) hours performed in any calendar quarter (it being agreed and understood that you will advise the Company in writing each quarter when you have performed sixty (60) hours of services in any calendar quarter on behalf of the Company); and (ii) reimbursed for all reasonable out-of-pocket expenses you incurred in performing such services that have been approved in writing by the Company prior to your incurrence thereof. The parties hereto acknowledge that but for this Agreement You would not be required to render the services described in this Paragraph.

 

14.                                 Employee represents and acknowledges that in executing this Agreement, he does not rely and has not relied upon any representation or statement made by the Company or any of its agents, representatives or attorneys with regard to the subject matter, basis or effect of this Agreement or otherwise other than the representations contained in this Agreement.

 

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15.                                 Employee agrees as follows:

 

(a)                                  As a material inducement to the Company to enter into this Agreement and subject to the terms of this Section 15, Employee hereby irrevocably and unconditionally releases, acquits and forever discharges the Company and each of its parent, owners, stockholders, predecessors, successors, assigns, agents, directors, officers, employees, representatives, attorneys, divisions, subsidiaries, affiliates and all persons acting by, through, under or in concert with any of them, (collectively “Company Releasees”), from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses (including attorneys’ fees and costs actually incurred), of any nature whatsoever, known or unknown (“Claim” or “Claims”) which Employee now has, owns, holds, or which Employee at any time heretofore had, owned, or held against each of the Company Releasees, including, but not limited to: (a) all Claims under the Age Discrimination in Employment Act of 1967, as amended; (b) all Claims under Title VII of the Civil Rights Act of 1964, as amended; (c) all Claims under the Employee Retirement Income Security Act of 1974, as amended; (d) all Claims arising under the Americans With Disabilities Act of 1990, as amended; (e) all Claims arising under the Family and Medical Leave Act of 1993, as amended; (f) all Claims related to Employee’s employment with the Company; (g) all Claims of unlawful discrimination based on age, sex, race, religion, national origin, handicap, disability, equal pay, sexual orientation or otherwise; (h) all Claims of wrongful discharge, breach of an implied or express employment contract, negligent or intentional infliction of emotional distress, libel, defamation, breach of privacy, fraud, breach of any implied covenant of good faith and fair dealing and any other federal, state, or local common law or statutory claims, whether in tort or in contract; (i) all Claims related to unpaid wages, salary, overtime compensation, bonuses, severance pay, vacation pay, expenses or other compensation or benefits arising out of Employee’s employment with the Company; (j) all claims arising under any federal, state or local regulation, law, code or statute; (k) all claims of discrimination arising under any state or local law or ordinance; and (l) all claims relating to any agreement, arrangement or understanding that Employee has, or may have, with the Company (including, without limitation, the Employment Agreement, but specifically excluding this Agreement, the June 8, 2010, September 7, 2010 and December 29, 2010 Option Agreements, and the Employment Shares (collectively, the “Other Agreements”)).  Notwithstanding anything to the contrary contained in this subsection (a), the Company agrees that Employee shall remain a beneficiary under any past and current Directors and Officers Insurance policies to the extent that Employee was a beneficiary as of the Separation Date, and notwithstanding anything to the contrary contained in this Agreement, Employee is not releasing in any way any coverage under said insurance policies.

 

(b)                                 Employee covenants and promises not to sue, commence an arbitration or otherwise pursue legal action against the Company, other than for breach of this Agreement or the Other Agreements, and further covenants and promises to indemnify and defend the Company from any and all such claims, demands and causes of action, including the payment of reasonable costs and attorneys’ fees relating to any claim, demand, or causes of action brought by him.  Employee agrees that should any legal action be pursued on his behalf by any person or other entity against the Company regarding the claims released by Employee in this Agreement, Employee will not accept

 

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recovery from such action, but will assign such recovery to the Company and agrees to indemnify the Company against such claims and assessment of damages.  Employee further represents that he has filed no lawsuits, arbitrations or other actions against the Company.

 

(c)                                  Employee further promises and agrees that he will not at any time disparage the Company or any of its directors, officers, employees, products, operations, policies, decisions, advertising or marketing programs, if the effect of such disparagement reasonably could be anticipated to cause material harm to the Company’s reputation, business, interests or to the morale among its work force, or the reputation of any Company employee.  Additionally, Employee will refer all inquiries that he receives (whether written or oral) regarding the business or operations of the Company to the CEO (or his designee).  Employee will make reasonable efforts to transition Company information to an authorized representative of the Company.

 

16.                                 The Company agrees as follows:

 

(a)                                  As a material inducement to Employee to enter into this Agreement and subject to the terms of this paragraph, the Company, on its own behalf and on behalf of each of the Company Releasees, hereby irrevocably and unconditionally releases, acquits and forever discharges Employee, and his heirs, representatives, successors and assigns and all persons acting by, through, under or in concert with any of them (collectively, the “Employee Releasees”), from any and all Claims which any Company Releasee now has, owns, holds, or which any Company Releasee at any time heretofore had, owned, or held against any of the Employee Releasees (including, without limitation, any Claims arising out of, in connection with, or related to Employee’s involvement as an officer or director of the Company or any of its subsidiaries).

 

(b)                                 The Company covenants and promises not to sue, commence an arbitration or otherwise pursue legal action against Employee, other than for breach of this Agreement or the Other Agreements, and further covenants and promises to indemnify and defend Employee from any and all such claims, demands and causes of action, including the payment of reasonable costs and attorneys’ fees relating to any claim, demand, or causes of action brought by the Company.  The Company agrees that should any legal action be pursued on its behalf by any person or other entity against Employee regarding the claims released in this Agreement, the Company will not accept recovery from such action, but will assign such recovery to Employee and agrees to indemnify Employee against such claims and assessment of damages.  The Company further represents that it has filed no lawsuits, arbitrations or other actions against Employee.

 

(c)                                  The Company further promises and agrees that it will not at any time disparage Employee, if the effect of such disparagement reasonably could be anticipated to cause material harm to Employee’s reputation.

 

17.                                 Employee will not, for a period ending one year after the Effective Date, for any reason, directly or indirectly: (a) solicit the business of any customer of the Company, for the purpose of, or with the intention of, selling or providing to such

 

6

 

customer any product or service in competition with any product or service sold or provided by Employer during the 12 months immediately preceding the termination of Employee’s employment with Employer; (b) cause or attempt to cause any employee of Employer to cease working for Employer.

 

18.                                 Employee will not, for a period ending one year after the Effective Date, directly or indirectly, enter into the employment of, render services to, or acquire any interest whatsoever, whether as a sole proprietor, partner, associate, shareholder, officer, director, employee, consultant, trustee, lessor, creditor, or otherwise, in any business, trade or occupation in competition with the business of the Company.  Employee agrees that damages for breach of this covenant will be difficult to determine and therefore consents that this provision may be enforced by temporary or permanent injunction, without the necessity of a bond.  Such injunctive relief shall be in addition to, and not in place of, any remedies at law.  Employee agrees that the provisions of this paragraph are reasonable.  However, should any court ever find that any provision within this paragraph is unreasonable, either in period of time, geographical area, or otherwise, then and in that event Employee agrees that this paragraph shall be interpreted and enforced to the maximum extent which the court deems reasonable.

 

19.                                 Notwithstanding anything in this Agreement to the contrary, the Company and Employee agree that the Other Agreements shall remain in full force and effect, as revised above.

 

20.                                 If Employee or the Company determines that the other has breached this Agreement, the non-breaching Party will notify the Party in breach of that fact in writing and the Party in breach will be afforded ten (10) days to cure the breach.

 

21.                                 Employee agrees that by three days after the Effective Date, he will use his best efforts to return to the Company any and all property of the Company in his possession, custody or contol, including without limitation marketing plans and related information, product development plans and related information, trade secret information, pricing information, vendor information, financial information, telephone lists, computer software and hardware, keys, credit cards, vehicle, telephone, camera and office equipment. You specifically acknowledge and agree that You will continue to be bound by and subject to the confidentiality provisions of Section 11 of the Employment Agreement and You will not, among other things, use or disclose any of the Company information contained on the harddrive of your computer in violation of such Section 11.

 

22.                                 No waiver of any of the terms of this Agreement shall be valid unless in writing and signed by both Parties.  No waiver or default of any term of this Agreement shall be deemed a waiver of any subsequent breach or default of the same or similar nature.  This Agreement may not be changed except by writing signed by both Parties.

 

23.                                 This Agreement shall be binding upon Employee and upon Employee’s heirs, administrators, representatives, executors, trustees, successors and assigns, and shall inure to the benefit of Company Releasees and each of them, and to their heirs, administrators, representatives, executors, trustees, successors, and assigns.

 

7

 

24.                                 For the same aforesaid consideration, it is further expressly agreed and understood that the Parties will promptly execute any and all documents that are necessary and appropriate to effectuate the terms of this Agreement.

 

25.                                 For the same aforesaid consideration, it is expressly agreed and understood that the contents of this Agreement, including its terms, any monetary consideration paid therein, and the parties thereto, shall not be disclosed, released or communicated to any person (except their attorneys, spouses, and tax consultants), including natural persons, corporations, partnerships, limited partnerships, joint ventures, sole proprietorships or other business entities, except for the purpose of enforcing this Agreement or any provision therein or pursuant to a lawful subpoena or except as otherwise required by applicable law (including, without limitation, Federal securities laws).  Each Party agrees to give reasonable notice to the other in the event disclosure of this Agreement is sought by subpoena or otherwise.

 

26. This Agreement is entered into and shall be interpreted, enforced and governed by the law of the State of New York. In any proceeding to enforce this Agreement, the prevailing Party shall be entitled to costs and reasonable attorneys’ fees.

 

27.                                 All notices and other communications hereunder shall be in writing and shall be given by personal delivery, mailed by registered or certified mail (postage prepaid, return receipt requested), sent by facsimile transmission, sent by a nationally recognized overnight courier service to the parties at the following addresses (or at such other address for a party as is specified by like change of address):

 

	
 
    	
If to the Company:
    	
 
    	
Robert F. Hussey, CEO
    
	
 
    	
 
    	
 
    	
Augme Technologies, Inc.
    
	
 
    	
 
    	
 
    	
350 7th Avenue, 2nd Floor
    
	
 
    	
 
    	
 
    	
New York, NY 10001
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
If to Employee:
    	
 
    	
Paul R. Arena
    

 

28.                                 The Parties agree that the Agreement may be executed in multiple originals.

 

29.                                 To the extent that the Company or counsel for the Company requests the assistance of Employee with respect to any legal matters relating to the Company, including without limitation any lawsuit, arbitration or other action to which the Company is a party or any inquiry or investigation made or undertaken by any government authority, Employee shall provide such assistance upon reasonable notice to Employee.  If the provision of such requested assistance, combined with other time spent providing consulting services pursuant to Section 13 hereof, requires more than sixty (60) hours of Employee’s time in any calendar quarter, Employee shall be paid at the rate of $250 per hour for each hour over sixty (60) hours performed in any such calendar quarter.

 

8

 

EXECUTED as of the Contract Date.

 

	
 
    	
/s/   Paul R. Arena
    
	
 
    	
Paul R. Arena
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
AUGME   TECHNOLOGIES, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert F. Hussey
    
	
 
    	
Printed:   Robert F. Hussey
    
	
 
    	
Title:   Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
HIPCRICKET,   INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert F. Hussey
    
	
 
    	
Printed:   Robert F. Hussey
    
	
 
    	
Title:   Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GEOS   COMMUNICATIONS IP HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert F. Hussey
    
	
 
    	
Printed:   Robert F. Hussey
    
	
 
    	
Title:   Chief Executive Officer
    

 

 

EXHIBIT A

 

Form of Resignation Letter—Board

 

[See attached document]

 

10

 

EXHIBIT B

 

Form of Warrant Agreement

 

[See attached document]

 

A-1

 

EXHIBIT C

 

Form of Resignation Letter—Employment

 

[See attached document]

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