Document:

Employment Contract

Execution Version

EMPLOYMENT AGREEMENT

Between Ritesh Bhavnani and Snipp Interactive, Inc.

This Employment Agreement ("Agreement") is entered into as of June 1, 2015 (the “Effective Date”) by and between Snipp Interactive, Inc., a Canadian corporation with an office at 6708 Tulip Hill Terrace, Bethesda, MD 20816 (the "Company"), and Ritesh Bhavnani, an individual currently residing at 6708 Tulip Hill Terrace, Bethesda, MD 20816 (the "Executive", and together with the Company the “Parties”, and each sometimes, a “Party”), which shall be Executive's first date of employment pursuant to this Agreement. The Parties believe it to be in their best interest to document the terms of the Executive's employment with the Company, as follows:

In consideration of the employment of the Executive by the Company and the mutual agreements in this Agreement, the Executive and the Company agree as follows:

1.

TERM OF AGREEMENT

This Agreement shall become effective as of the Effective Date and shall continue in full force and effect until such time as it is terminated by either Party in accordance with the provisions of Section 6 of this Agreement (the “Term”).

2.

EMPLOYMENT POSITION AND DUTIES

a.

During the Term, the Company agrees to employ the Executive and the Executive hereby accepts employment with the Company as its President subject to the general supervision, advice and direction of the board of directors of the Company (the “Board”) and subject to the terms and conditions of this Agreement. The Executive's authority, duties and responsibilities shall be consistent with such authority, duties and responsibilities as are customary for this position, including, without limitation: supervising and managing all aspects of the Company's businesses; direct responsibility for the Company's product lines; further developing, refining and implementing the Company's strategic growth plans; and overall responsibility for the Company's domestic and international operations. Executive shall also perform such other services and duties as Board may from time-to-time designate in its sole discretion.

b.

During the Term, the Company agrees to use its commercially reasonable best efforts to ensure that that Executive will be nominated for election by its shareholders to the Board.

c.

Executive shall faithfully, honestly and diligently serve the Company, devote his full working time and attention to his duties, use his best efforts to promote the interests of the Company and follow the reasonable and lawful instructions of the Chairman or the Board. Executive shall carry out his duties in a manner consistent with and in compliance with all present and future requirements and limitations of all applicable federal, state and provincial laws and regulations, including all applicable corporate and securities laws, and all rules, policies and regulations thereunder, to the extent Executive has actual or constructive knowledge of such laws and regulations. Executive acknowledges and fully understands that by entering into this Agreement, he undertakes a fiduciary relationship with the Company and, as a fiduciary, is under an obligation to use due care and act in the best interest of the Company at all times.

d.

Executive agrees that he shall at all times observe and be bound by all rules, policies, procedures, practices, and resolutions adopted, or to be adopted, by the Company which are generally applicable to the Company's officers and employees and which do not otherwise conflict with this Agreement.

e.

The Company shall indemnify Executive in the performance of his duties and responsibilities, and advance expenses in connection with such indemnification to the same extent as the Company's other senior executives and officers, all as set forth in Section 11.

3.

NON-COMPETITION AND NON-SOLICITATION 

a.

Acknowledgment. The Executive acknowledges that he is a senior executive of the Company and has extensive knowledge of the Company’s business and marketing practices, customer and vendor relationships and other matters of a confidential nature which are proprietary and highly valuable to the Company.

b.

Restricted Activities. The Executive agrees that, during the course of the Executive’s employment by the Company, and solely in the event of a termination of the Executive’s employment, (a) by the Company for Cause, as further set forth in Section 5.e of this Agreement, or (b) by the Executive without Good Reason, as further set forth in Section 5.a of this Agreement (collectively, the “Qualifying Terminations”),: (A) for a period of twelve (12) months after such Qualifying Termination, the Executive shall not, whether as owner, partner, shareholder, director, consultant, agent, employee, guarantor, surety or otherwise, or through any person: (i) consult with or in any way, directly or indirectly, aid or assist any competitor of the Company in the Restricted Business anywhere in the Restricted Jurisdiction; or (ii) engage or attempt to engage in any employment, consulting or other activity, which activity competes, directly or indirectly, with the activities of the Company in the Restricted Business anywhere in the Restricted Jurisdiction; and (B) for a period of eighteen (18) months after such Qualifying Termination, solicit, endeavor to entice away, employ or offer to employ any person who is on the date hereof employed by the Company, provided that nothing contained herein shall preclude the Executive from employing or offering employment to any employee of the Company who: (x) responds to a general and public advertisement; or (y) directly approaches the Executive for employment (the restrictions in (A) and (B) above, collectively, the “Restricted Activities”). As used in this Agreement, “Restricted Business” means “any business utilizing OCR (Optical Character Recognition) technology for the purposes of verifying/validation of purchases and/or the delivery of rewards, rebates or loyalty points”, and “Restricted Jurisdiction” means the United States of America and Canada.

For the abundance of caution, and notwithstanding anything else to the contrary in this Agreement, it is hereby clarified that the Restricted Activities set forth in this Section 3.b shall immediately terminate and not apply, and except as otherwise set forth in Section 7 and Section 8, the Executive will be under no other restrictions whatsoever, in the event of any termination of the Executive’s employment by the Company other than a Qualifying Termination, including a termination (x) by the Company for any reason during the Term other than for Cause, as further set forth in Section 5.b of this Agreement, and/or (y) by the Executive for good Reason, as further set forth in Section 5.b of this Agreement.

c.

Restricted Activities Consideration.  As consideration to the Executive for agreeing to, and performing in accordance with, the Restricted Activities, the Company will within sixty (60) calendar days from the Effective Date pay the Executive, in immediately available funds, an amount of One Hundred Thousand Dollars ($100,000). Additional consideration to the Executive for agreeing to, and performing in accordance with, the Restricted Activities, includes the continued employment of the Executive by the Company, and the compensation and benefits received and to be received by the Executive in connection with the Executive’s present and future employment by the Company.

4.

ONGOING COMPENSATION AND BENEFITS:

a.

Base Salary: The Executive shall receive an annual base salary of Two Hundred Thousand Dollars ($200,000.00) payable in accordance with the Company's regular payroll practices, as established from time to time, but no less frequently than monthly. During the Term, the Compensation Committee shall review the Executive's base salary on an annual basis taking into consideration such factors as market trends, internal considerations and job performance, and may (but is not obligated to) increase, but not decrease, the annual base salary upon such review, unless the decrease is generally applicable to substantially all senior executives of the Company (but nonetheless totaling no more than 20% in the aggregate).

b.

Annual Incentive Cash Bonus: Executive will be eligible to receive an annual incentive cash bonus (“Annual Bonus”) for each full fiscal year ending during the Term beginning with the 2015 fiscal year with a maximum incentive bonus of 100% of his base salary or any such higher number, when, as and if determined from time to time by the Compensation Committee. The payment of the Annual Bonus is conditional on achievement of pre-determined objective performance goals set forth in writing by the Compensation Committee within a reasonable period after execution of this Agreement. The Annual Bonus determined to be due, if any, will be paid within 30 calendar days after the close of the Company's fiscal year, or such other date as agreed to by the Parties.

c.

Stock Options: Executive shall also be eligible to receive annual stock option grants each year of the Term, at the discretion of the Compensation Committee, which grants will be subject to the terms and conditions applicable to options granted under the Company’s 2015 Incentive Stock Option Plan, as described in that plan and the applicable stock option agreement which the Executive will be required to sign. The grant of stock options shall be at the discretion of the Compensation Committee and determined in discussions with the Executive.

d.

Employee Benefits: The Executive may participate in the Company's, or its Subsidiaries’ employee welfare, benefit, retirement and deferred compensation plans, programs or policies that are in effect and generally available to the other senior executives of the Company, including any profit sharing or 401(k) plans (if and when such plans are created); employee stock purchase, group life, health, hospitalization and disability insurance plans; paid time off; and discount privileges (the "Benefit Plans"). The Executive's participation in the Benefit Plans will be subject to the terms and conditions of each such Benefit Plan, including eligibility and compliance requirements, and on terms at least as favorable as provided to any other executive officer of the Company. Notwithstanding the foregoing, the Company shall have the right to change, alter or terminate any Benefit Plan in its sole discretion.

e.

Reimbursement of Business Expenses: The Company shall pay, advance or reimburse Executive for all normal and reasonable business-related expenses incurred by Executive in the performance of his duties, including travel expenses, in accordance with the Company's policies and on the same basis as paid, advanced or reimbursed to the Company's other senior executives.

5.

TERMINATION OF EMPLOYMENT; CHANGE OF CONTROL

The Parties acknowledges and understands that employment of the Executive with the Company is “at-will” and can be terminated by either Party for no reason, or for any reason not otherwise specifically prohibited by law. Nothing in this Agreement is intended to alter Executive's at-will employment status or obligate the Company to continue to employ Executive for any specific period of time, or in any specific role or geographic location. Except as expressly provided for in this Agreement, upon any termination of employment, Executive shall not be entitled to receive any payments or benefits under this Agreement other than accrued, but unpaid or unused: (i) base salary; and (ii) business expenses. For purposes of this Section 5, these amounts shall be collectively referred to as the "Accrued Obligations." Except as otherwise provided for in this Agreement, upon any termination of employment, Executive shall forfeit all unvested equity awards. Capitalized terms used in this Section 5, but not specifically defined herein, shall have the same meaning as assigned to them in Appendix A to this Agreement.

a.

Termination by Executive without Good Reason. The Executive may voluntarily terminate his employment at any time without Good Reason by providing 30 days prior written notice to the chairman of the Board. If the Executive voluntarily terminates his employment with the Company at any time without Good Reason:

i.

Accrued Obligations. The Company shall pay to the Executive the Accrued Obligations in a lump sum payment, less applicable withholdings and deductions, within 10 days of the Termination Date, or in the case of business expenses, within 10 days after Executive submits a properly documented request for reimbursement.

ii.

Accelerated Vesting. The Company shall, as of the Termination Date, accelerate the vesting of any stock option which remains unvested on the Termination Date as to that number of shares subject to such stock option equal to the product of (i) the number of shares as to which such stock option would have become vested on the vesting date next following the Termination Date (the "Next Option Vesting Tranche"), multiplied by (ii) a fraction, the numerator of which is the number of days elapsed in the vesting period applicable to the Next Option Vesting Tranche through the Termination Date, and the denominator of which is the total number of days in such vesting period. [By way of example, if a stock option vests at a rate of 1/3 of the shares subject thereto on each of the first three anniversaries of grant, the Next Option Vesting Tranche would be that 1/3 of the shares subject to such stock option which would vest on the vesting date next following the Termination Date, and the number of days in the vesting period applicable to the Next Option Vesting Tranche would be 365.] Outstanding vested stock options held by Executive shall remain exercisable until the earlier of (i) the expiration date set forth in the stock option award agreement, and (ii) six (6) months after the Termination Date. Any stock options unvested as of the Termination Date after application of the first sentence of this Section 5.a.ii shall forfeit. Notwithstanding the above, this Section 5.a.ii shall not apply to any unvested stock option which is capable of vesting only if a performance condition (other than the continued performance of services) is attained. To the extent permitted by the applicable regulatory authorities, including any stock exchange on which the Company is listed for trading, the Executive may exercise this stock option by means of a "net exercise," pursuant to which a number of shares subject to such exercise having a fair market value equal to the applicable exercise price will be withheld by the Company in satisfaction of such exercise price.

b.

Termination of Employment by Company without Cause, or by Executive for Good Reason, other Than in Connection with a  Change in Control. If, other than in connection with a Change in Control during the Protection Period (which shall be determined in accordance with the provisions of Section 5.d), at any other time, the Executive's employment is involuntarily terminated by the Company for any reason during the Term other than for Cause, or the Executive terminates his employment for Good Reason:

i.

Accrued Obligations. The Company shall pay to the Executive the Accrued Obligations in a lump sum payment, less applicable withholdings and deductions, within 10 days of the Termination Date, or in the case of business expenses, within 10 days after Executive submits a properly documented request for reimbursement.

ii.

Accelerated Vesting. The Company shall, as of the Termination Date, accelerate the vesting in full of all stock options which remains unvested on the Termination Date. Outstanding vested stock options held by Executive shall remain exercisable until the earlier of (i) the expiration date set forth in the stock option award agreement, and (ii) six (6) months after the Termination Date. To the extent permitted by the applicable regulatory authorities, including any stock exchange on which the Company is listed for trading, the Executive may exercise this stock option by means of a "net exercise," pursuant to which a number of shares subject to such exercise having a fair market value equal to the applicable exercise price will be withheld by the Company in satisfaction of such exercise price.

iii.

Payments. The Company shall, subject to Section 7 and Section 8, make the following payments to Executive, in a lump sum payment, less applicable withholdings and deductions, on the first regular payroll date following the Termination Date:

1.

An amount equal to one (1) times the then annual base salary of the Executive from the Company and its Subsidiaries, in effect immediately prior to the Termination Date, annualized for any partial year; and

2.

A pro-rated portion of the Executive’s Annual Bonus in effect immediately prior to the Termination Date, which pro-rated portion shall be a minimum of One Hundred Thousand Dollars ($100,000).

iv.

Other Benefits. Provided that the Executive and his eligible dependents, if any, are participating in the Company's (or its Subsidiaries’) group health, dental and vision plans on the Termination Date and elect on a timely basis to continue that participation in some or all of the offered plans through the federal law commonly known as "COBRA," the Company will reimburse Executive for Executive's actual COBRA premiums, excluding any administrative fees or costs associated with the processing of Executive's payment by the Company's third-party vendor (the "Company-Subsidized Health Coverage"). The Executive shall continue to be eligible for the Company-Subsidized Health Coverage until the earlier to occur of: (a) twelve (12) months after his Termination Date, (b) the date he is eligible to enroll in the health, dental and/or vision plans of another employer or (c) if the Company in good faith determines that payments under this paragraph (ii) would result in a discriminatory health plan pursuant to the Patient Protection and Affordable Care Act of 2010, as amended, and any guidance or regulations promulgated thereunder (collectively, "PPACA"); provided, however, that the Executive's participation is dependent on him and his dependents continuing to be eligible to participate in the Company's offered plans through COBRA and paying the applicable employee contribution toward the premium cost along with any co-payments or other fees. The Executive agrees to notify the Company promptly if he becomes eligible to enroll in the plans of another employer or if he or any of his dependents cease to be eligible to continue participation in the Company's plans through COBRA. Notwithstanding the foregoing, if the Company's payment of a portion of the Executive's COBRA continuation coverage will be considered discriminatory under the PPACA, the Company shall not pay for or reimburse any portion of the Executive's COBRA continuation coverage upon his termination of employment.

v.

Provided, however, that there will be no duplication of benefits, and that compensation and benefits provided hereunder is in lieu of any compensation or benefits for which the Executive might otherwise have been eligible under any plan, program, or practice of the Company or any related entity. To the extent necessary to avoid duplication of benefits, payments and benefits under this Agreement will be reduced to offset payments or benefits under any other plan, program, or policy.

vi.

Executive shall not be obligated to seek other employment or take any other action by way of mitigation of the compensation and benefits payable to Executive under this Section 5.b.

c.

Termination Due to Death or Disability. The Executive's employment shall terminate automatically upon his death, with the date of death being Executive's Termination Date. If the Executive has a Disability, the Company shall give the Executive written notice of its intention to terminate his employment. In such event, the Executive's Termination Date shall be the 15th day after the date of such written notice. In the event of Executive's death or Disability, the Company shall pay the following:

i.

Accrued Obligations. The Company will pay the Executive, or the Executive’s estate the Accrued Obligations in a lump sum payment, less applicable withholdings and deductions, within 10 days of the Termination Date, or in the case of business expenses, within 10 days after Executive, or his estate, submits a properly documented request for reimbursement.

ii.

Accelerated Options. The Company shall, as of the Termination Date, accelerate the vesting in full of all stock options which remains unvested on the Termination Date. Outstanding vested stock options held by Executive shall remain exercisable until the earlier of (i) the expiration date set forth in the stock option award agreement, and (ii) six (6) months after the Termination Date. To the extent permitted by the applicable regulatory authorities, including any stock exchange on which the Company is listed for trading, the Executive or his legal heirs may exercise this stock option by means of a "net exercise," pursuant to which a number of shares subject to such exercise having a fair market value equal to the applicable exercise price will be withheld by the Company in satisfaction of such exercise price.

iii.

Payments. The Company shall pay the Executive or his estate any declared but unpaid annual incentive cash bonus that, but for Executive's death or Disability, would otherwise have been payable to Executive. Payment of the bonus, if any, to the Executive or his estate will be made at the same time as the Company pays annual incentive cash bonuses, if any, to its other senior executives.

d.

Change in Control: The Company believes that it is in the best interest of the Company and its stockholders for Executive to be in a position to be able to assess objectively and pursue aggressively the interests of the Company's stockholders in making evaluations and carrying on negotiations regarding offers, proposals or other transactions which could result in a Change in Control. To achieve these interests, the Company believes it is essential to provide Executive with compensation arrangements upon a change in control that provide Executive with some financial security.

i.

Accelerated Options as of Change in Control Date. In the event of any Change in Control, any shares, options, restricted shares, performance shares, or other forms of securities issued by the Company and beneficially owned by Executive (whether granted before or after the date of this Agreement) that are unvested, restricted, or subject to any similar restriction that would otherwise require continued employment by Executive beyond the Change in Control Date in order to be vested in the hands of Executive shall immediately vest and become exercisable, or such restrictions shall immediately lapse only to the extent and in the manner specified in the respective award agreements. Outstanding vested stock options held by Executive shall remain exercisable until the earlier of (i) the expiration date set forth in the stock option award agreement, and (ii) six (6) months after the Change in Control Date. To the extent permitted by the applicable regulatory authorities, including any stock exchange on which the Company is listed for trading, the Executive may exercise this stock option by means of a "net exercise," pursuant to which a number of shares subject to such exercise having a fair market value equal to the applicable exercise price will be withheld by the Company in satisfaction of such exercise price.

ii.

Termination during Protection Period. During the Protection Period upon a Change in Control, if Executive’s employment is terminated by the Company, other than for Cause, Disability or other than as a result of Executive's death, or if Executive terminates his employment for Good Reason:

1.

Accrued Obligations. The Company shall pay to the Executive the Accrued Obligations in a lump sum payment, less applicable withholdings and deductions, within 10 days of the Termination Date, or in the case of business expenses, within 10 days after Executive submits a properly documented request for reimbursement.

2.

Accelerated Options. The Company shall, as of the Termination Date, accelerate the vesting in full of all stock options which remains unvested on the Termination Date. Outstanding vested stock options held by Executive shall remain exercisable until the earlier of (i) the expiration date set forth in the stock option award agreement, and (ii) six (6) months after the Termination Date. To the extent permitted by the applicable regulatory authorities, including any stock exchange on which the Company is listed for trading, the Executive may exercise this stock option by means of a "net exercise," pursuant to which a number of shares subject to such exercise having a fair market value equal to the applicable exercise price will be withheld by the Company in satisfaction of such exercise price.

3.

Payments. The Company shall, subject to Section 7 and Section 8, make the following payments to Executive, in a lump sum payment, less applicable withholdings and deductions, on the first regular payroll date following the Termination Date:

A.

(x) In the event the applicable Change in Control was approved by the Executive (including by way of voting in favor of such Change in Control in a Board or stockholders’ meeting), an amount equal to one (1) times the then annual base salary of the Executive from the Company and its Subsidiaries, in effect immediately prior to the Termination Date, annualized for any partial year; or (y) in the event the applicable Change in Control has been specifically objected to in writing by the Executive (including by way of voting against such Change in Control in a Board or stockholders’ meeting), an amount equal to two (2) times the then annual base salary of the Executive from the Company and its Subsidiaries, in effect immediately prior to the Termination Date, annualized for any partial year; and

B.

an amount equal to the Executive's annual incentive cash bonus amount in effect immediately prior to the Change in Control Date, at target.

4.

Other Benefits.  Upon Executive's timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), the Company shall pay, on Executive's behalf, the portion of premiums of Executive's group health insurance, including coverage for eligible dependents, that the Company, or its Subsidiaries paid immediately prior to the date of termination ("COBRA Payments") for the period that Executive is entitled to coverage under COBRA, but not to exceed eighteen months ("COBRA Period"). Upon becoming eligible to receive comparable coverage from a new employer, the Company will no longer be required to pay such COBRA Payments and Executive will promptly notify the Company.

e.

Termination by the Company for Cause. The Company may involuntarily terminate the Executive's employment for Cause at any time. If the Executive's employment is involuntarily terminated by the Company for Cause, this Agreement shall terminate without further obligations to Executive, other than payment of the Accrued Obligations, which shall be paid in a lump sum payment, less applicable withholdings and deductions, within 10 days of the Termination Date, or in the case of business expenses, within 10 days after Executive submits a properly documented request for reimbursement. All unvested stock options shall forfeit. The Executive's involuntary termination by the Company for Cause shall be communicated by Notice of Termination given to the Executive in accordance with this Agreement. The Company's failure to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of the Company under this Agreement or preclude the Company from asserting such fact or circumstance in enforcing the Company's rights under this Agreement.

f.

General Release of Claims. Notwithstanding any provision of this Agreement, all payments and benefits described in this Agreement, except for payment of the Accrued Obligations, are conditioned upon the execution, delivery to the Company, and expiration of any applicable revocation period without a notice of revocation having been given by Executive, all by the 30th day following the Termination Date of a General Release of Claims by and between Executive (or the Executive's estate) and the Company in the form attached as Appendix B to this Agreement. (In the event of Executive's death or incapacity due to disability, the form attached as Appendix B will be revised for signature accordingly.)

6.

INTELLECTUAL PROPERTY AND CONFIDENTIAL INFORMATION.

Executive acknowledges that he will be employed by the Company during the Term in a position of special trust and confidence and will be granted access to or may develop trade secrets, intellectual property, and other confidential or proprietary information of the Company. Accordingly, in recognition of the highly competitive nature of the Company's business, Executive understands and agrees as follows.

a.

Intellectual Property. Executive agrees that all inventions, designs and ideas conceived, produced, created, or reduced to practice, either solely or jointly with others, during his employment with the Company, including those developed on his own time, which relate to or are useful in the Restricted Business (collectively, "Intellectual Property") shall be owned solely by the Company. Executive understands that whether in preliminary or final form, such Intellectual Property includes, for example, all ideas, inventions, discoveries, designs, innovations, improvements, trade secrets, and other intellectual property. All Intellectual Property is either work made for hire for the company within the meaning of the U.S. Copyright Act, or, if such Intellectual Property is determined not to be work made for hire, then Executive irrevocably assigns all right, title and interest in and to the Intellectual Property to the Company, including all copyrights, patents, and/or trademarks. Executive will, without any additional consideration, execute all documents and take all other actions needed to convey his complete ownership of the Intellectual Property to the Company so that the Company may own and protect such Intellectual Property and obtain patent, copyright and trademark registrations for it. Executive agrees that the Company may alter or modify the Intellectual Property at the Company's sole discretion, and Executive waives all right to claim or disclaim authorship. Executive represents and warrants that any Intellectual Property that he assigns to the Company, except as otherwise disclosed in writing at the time of assignment, will be his sole, exclusive, original work.

b.

Confidentiality. Executive understands that, by virtue of Executive's employment with the Company, Executive will acquire and be exposed to Confidential Information of the Company. "Confidential Information" includes all ideas, information and materials, tangible or intangible, not generally known to the public, relating in any manner to the business of the Company, its products and services (including all trade secrets), its competitive strengths and weaknesses, its personnel (including its officers, directors, employees, and contractors), its clients, vendors and suppliers and all others with whom it does business that Executive learns or acquires during Executive's employment with the Company. Confidential Information includes, but is not limited to, manuals, documents, computer programs and software used by the Company, all formulas or processes, users manuals, compilations of technical, financial, legal or other data, salary information, client or prospective client lists, names of suppliers or vendors, client, supplier or vendor contact information, customer contact information, business referral sources, specifications,

Intellectual Property, designs, devices, inventions, processes, business or marketing plans or strategies, pricing information, information regarding the identity of the Company's designs, mock-ups, prototypes, and works in progress, all other research and development information, forecasts, financial information, and all other technical or business information. Confidential Information does not include publicly available information or information that is generally known and used within the industry or industries in which the Company engages in business. Executive agrees to hold in trust and confidence all Confidential Information during and for a period of twelve (12) months after the period of Executive's employment with the Company. Executive shall not disclose any Confidential Information to anyone outside the Company or use any Confidential Information for any purpose other than for the benefit of the Company as required by Executive's authorized duties for the Company.

c.

Executive understands that the various terms and conditions of this Agreement shall survive and continue after Executive's employment with the Company terminates. To further protect the Company's Confidential Information and to protect against unauthorized disclosure, Executive hereby expressly agrees that the Company may inform Executive's new employer regarding Executive's duties and obligations under this Section 6.

7.

ADDITIONAL RESTRICTED ACTIVITIES. In addition to the Restricted Activities set forth in Section 3.b, and in exchange for good and valuable consideration, the Executive agrees that some restrictions on his activities during and after his employment are necessary to protect the goodwill, Confidential Information and other legitimate interests of the Company and its affiliates. Accordingly, in recognition of the highly competitive nature of the Company's business, Executive understands and agrees as follows.

a.

Executive agrees that, while he is employed by the Company and thereafter, he will not willfully make false, misleading or disparaging statements about the Company or any of its affiliates including, without limitation, its products, services, management, employees and customers.

b.

Executive shall not breach any lawful, enforceable agreement to keep in confidence, or to refrain from using, the nonpublic ideas, information or materials of a third party, including, but not limited to, a former employer or present or former customer or client. Executive shall not bring any such ideas, information or materials to the Company, or use any such ideas, information or materials in connection with Executive's employment by the Company.

c.

Executive acknowledges that he has carefully read and considered all the terms and conditions of this Agreement, including the restraints imposed upon him pursuant to Sections 6 and 7 of this Agreement. The Executive agrees without reservation that each of the restraints contained in this Agreement is reasonable and necessary for the protection of the goodwill, confidential information and other legitimate interests of the Company and its affiliates; that each and every one of the restraints is reasonable in respect to subject matter, and that the restraints, individually or in the aggregate, will not prevent him from obtaining other suitable employment during the period in which he is bound by the restraints. The Executive further agrees that he will never assert, or permit to be asserted on his own behalf, in any forum, any position contrary to the foregoing. Executive further acknowledges that, were he to breach any of the covenants contained in Sections 6 and 7 hereof, the damage to the Company would be irreparable. Executive therefore agrees that the Company, in addition to any other remedies available to it, shall be entitled to preliminary and permanent injunctive relief against any breach or threatened breach by him of any of said covenants, without having to post bond. The Parties further agree that, in the event that any provision of Section 6 and 7 of this Agreement shall be determined by any court of competent jurisdiction to be unenforceable, such provision shall be deemed to be modified to permit its enforcement to the maximum extent permitted by law.

8.

COOPERATION.

a.

With Company. Executive agrees to cooperate with Company during the course of all third-party proceedings arising out of Company's business about which Executive has knowledge or information before the Termination Date. Such proceedings may include, but are not limited to, internal investigations, administrative investigations or proceedings, and lawsuits (including pre-trial discovery). For purposes of this paragraph, cooperation includes, but is not limited to, Executive's making himself available for interviews, meetings, depositions, hearings, and/or trials without the need for subpoena or assurances by Company, providing any and all documents in his possession that relate to the proceeding, and providing assistance in locating any and all relevant notes and/or documents.

b.

With Third Parties. Executive agrees to communicate with, or give statements to, third parties relating to any matter about which Executive has knowledge or information as a result of his employment only to the extent that it is Executive's good faith belief that such communication or statement is in Company's business interests, or as otherwise required by law.

c.

With Media. Executive agrees to communicate with, or give statements to, any member of the media (print, television, radio, or other) relating to any matter about which Executive has knowledge or information as a result of his employment only to the extent that it is Executive's good faith belief that such communication or statement is in Company's business interests.

9.

TAXATION & SECTION 409A.

a.

The Company makes no representations or warranties to Executive with respect to tax, economic or legal consequences of the Agreement or any payments or other benefits provided hereunder, including without limitation under Internal Revenue Code Section 409A ("Section 409A"), and no provision of this Agreement shall be interested or construed to transfer any liability for tax penalties, accelerated taxation or interest on account of Section 409A from Executive or any other individual to the Company or any of its affiliates. Executive, by executing this Agreement, shall be deemed to have waived any claim against the Company and its affiliates with respect to any such tax, economic or legal consequences.

b.

The Parties intend that this Agreement and the payments and benefits provided hereunder be exempt from the application of Section 409A, and the rules and regulations issued thereunder, to the maximum extent possible, whether pursuant to the short-term deferral exception described in Treasury Regulation Section 1.409A-1(b)(4), the involuntary separation pay plan exception described in Treasury Regulation Section 1.409A-1(b)(9)(iii), or otherwise. To the extent Section 409A is applicable to this Agreement, the Parties intend that this Agreement and any payments and benefits hereunder comply with the deferral, payout and other limitations and restrictions imposed under Section 409A so as to avoid the imputation of any tax, penalties, accelerated taxation or interest under Section 409A. Notwithstanding anything herein to the contrary, this Agreement shall be construed, interpreted, operated and administered in a manner consistent with such intentions. Without limiting the generality of the foregoing, and notwithstanding any other provision of this Agreement to the contrary:

c.

If (i) Executive is a "specified employee" within the meaning of Section 409A upon his Termination Date, and (ii) some or any portion of the amounts payable to Executive, if any, when considered together with any other severance payments or separation benefits which may be considered deferred compensation under Section 409A (together, the "Deferred Compensation Separation Benefits") would result in the imposition of the penalty tax under Section 409A if paid to Executive on or within the six (6) month period following the Termination Date, then to the extent such portion of the Deferred Compensation Separation Benefits resulting in the imposition of additional tax would otherwise have been payable on or within the first six (6) months following the Termination Date, it will instead become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the Termination Date (or such longer period as is required to avoid the imposition of additional tax under Section 409A). All subsequent Deferred Compensation Separation Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit.

d.

The Company's obligation to make any reimbursements or provide in-kind benefits to the Executive will be subject to the following restrictions: (1) the expenses paid or reimbursed by the Company in one calendar year will not affect the expenses paid or reimbursed in another calendar year; and (2) reimbursement for any expenses will be made within a reasonable period of time following the date on which the Company receives written documentation of the expense, provided that all expenses will be reimbursed on or before the last day of the calendar year following the calendar year in which the expense was incurred.

10.

NO MITIGATION OBLIGATION 

Executive shall not be required to mitigate the amount of any payment or benefit provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for herein be reduced by any compensation earned by other employment or otherwise.

11.

INDEMNIFICATION AND D&O INSURANCE

Executive will be provided indemnification to the maximum extent permitted by the Company’s and its subsidiaries’ and affiliates’ Articles of Incorporation or Bylaws, including, if applicable, any directors and officers insurance policies, with such indemnification to be on terms determined by the Board or any of its committees, but on terms no less favorable than provided to any other Company executive officer or director and subject to the terms of any separate written indemnification agreement.

12.

REPRESENTATIONS AND WARRANTIES

The Executive represents and warrants that he is not a party to, or otherwise subject to, any covenant not to compete, or other agreement with any person or entity that would restrict or limit his ability to perform his responsibilities under this Agreement, and that his performance of his obligations under this Agreement will not violate the terms and conditions of any contract or obligation, written or oral, between him and any other person or entity. The Executive is not under any contractual agreement that would conflict with or in any way prevent the Executive from entering into this Agreement or from performing any and all of the Executives' duties hereunder. Executive will not utilize any proprietary or confidential materials or information of any third party while performing duties for the Company.

13.

ASSIGNMENT AND SUCCESSOR

This Agreement is personal to the Executive and, without the prior written consent of the Company, shall not be assignable by him. This Agreement shall inure to the benefit of and be enforceable by the Company and its successors and assigns.

14.

NOTICES

Any notices required to be given to the Executive shall be sent to his address as shown in the Company's records, which he is responsible for keeping up-to-date. Notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by registered mail, postage pre-paid, addressed as follows:

If to the Executive, to:

Ritesh Bhavnani,

6708 Tulip Hill Terrace,

Bethesda, MD 20816

If to the Company, to:

Attn: Noordin S.K. Nanji. Esq.

Stikeman Elliot

Suite 1700, Park Place

666 Burrard Street

Vancouver, BC V6C 2X8

Phone: (604) 631-1300

Fax: (604) 681-1825

With a copy to:

Snipp Interactive Inc.,

Attn: Chairman of the Board

6708 Tulip Hill Terrace,

Bethesda, MD 20816

or to such other address as either party may have furnished to the other in writing, except that notices of change of address shall be effective only upon receipt.

15.

SEVERABILITY AND CONSTRUCTION: If any provision of this Agreement is determined to be invalid, unenforceable, or unlawful by a court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect, and the provisions that are determined to be invalid, unenforceable, or unlawful will either be limited or reformed so that they will remain in effect to the fullest extent allowed by law.

16.

WAIVER OF BREACH: Except as otherwise specifically provided for in this Agreement, no failure by any party to give notice of any breach of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver or relinquishment of that party's rights, and no waiver or relinquishment of rights by any party at any one or more times will be deemed to be a waiver or relinquishment of such right or power at any other time or times.

17.

ENTIRE AGREEMENT/MODIFICATION IN WRITING: This Agreement, together with the Company's plan or policy documents and governing policies of the Company (each as amended from time to time), constitute the entire understanding relating to the matters addressed in this Agreement and supersede any other prior agreement, whether written or oral. No addition to, or modification of, this Agreement shall be effective unless in writing and signed by both the Executive and an authorized representative of the Company.

18.

DISPUTE RESOLUTION; JURISDICTION: The Parties shall attempt in good faith to resolve promptly any dispute arising out of or relating to this Agreement. Any Party may give the other Party a written notice of any dispute not so resolved in the normal course of business or through any specific dispute resolution processes provided for elsewhere in this Agreement. Within thirty (30) days after delivery of such notice, representatives of the Parties with full settlement authority shall meet at a mutually acceptable time and place and thereafter as often as they reasonably deem necessary, to exchange relevant information and to attempt to resolve the dispute. If the Parties are not able to resolve the dispute within such thirty (30) day time period, then either Party may bring an action arising out of or relating to this Agreement exclusively in any federal court located in Washington, DC; provided, however, that if such federal court does not have jurisdiction over such action, such action will be heard and determined exclusively in any District of Columbia Court (and, in each case, any appellate court therefrom). By execution and delivery of this Agreement and such other documents executed in connection herewith, each Party hereby (a) accepts the exclusive jurisdiction of the aforesaid courts, and (b) irrevocably waives, to the fullest extent permitted by law, any objection it may now or hereafter have to the laying of venue of any action or proceeding brought in any such court, and further irrevocably waives, to the fullest extent permitted by law, any claim that any such action brought in any such court has been brought in any inconvenient forum. In the event that the Executive is the prevailing party in any such action, the Company agrees to reimburse the Executive 100% (or the maximum amount permissible under applicable law) of the reasonable costs and disbursements and attorneys’ fees incurred by the Executive in any such action. The Executive and the Company expressly waive trial by jury for all claims covered by this Agreement 

19.

CONSTRUCTION 

Each party and his or its counsel have reviewed this Agreement and have been provided the opportunity to revise this Agreement, and, accordingly, the normal rule of construction providing for any ambiguities to be resolved against the drafting party shall not be employed in the interpretation of this Agreement. Instead, the language of all parts of this Agreement shall be construed as a whole and according to its fair meaning, not strictly for or against either party. Nothing in this Agreement is intended to or constitutes a guarantee of employment for a fixed or specific term, and the Company reserves the right to adopt, amend, discontinue, or otherwise alter its compensation, benefit, and human resources practices, policies, and programs at its discretion.

20.

CONTROLLING LAW:

Except where otherwise provided for herein, this Agreement, and any clams subject to arbitration under this Agreement, shall be governed by and construed in all respects with the laws of the State of New York, excluding any conflict-of-law rule that might refer the construction of this Agreement to the laws of another state, province or country.

21.

COUNTERPARTS

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

22.

INDEPENDENT LEGAL ADVICE

The Executive and the Company acknowledge having the opportunity to obtain independent legal advice in connection with this Agreement. The Executive and the Company have expressly waived this opportunity, have agreed to be jointly represented by The Law Practice of Rahoul Roy, and have agreed to waive any and all conflicts of interest arising from this joint representation.

23.

TERMINATION OF CONSULTING AGREEMENT; RELEASE

Prior to the Effective Date, the Executive was providing services to the Company pursuant Prior to the Effective Date, the Executive was providing services to the Company pursuant to consulting and employment agreements between the Company/its affiliates and the Executive (collectively, the “Consulting Agreements”). The Company and the Executive hereby irrevocably agree that the Consulting Agreements are hereby terminated as of the Effective Date. Each of the Executive and Company hereby for themselves, and on behalf of all of their Subsidiaries and affiliates (each, as applicable, a “Releasor Party”), fully, irrevocably and unconditionally releases, remises, waives and forever discharges the other party, and such other party’s Subsidiaries and affiliates (each, as applicable, a “Released Party” ) of and from, any and all claims, counterclaims, demands, damages, contributions, indemnities, suits, rights to sue, covenants, dues, contracts, judgments, actions and causes of action at law or in equity, whether arising by statute, contract, common law, or otherwise, including claims for negligence, (collectively, the “Claims”) that a Releasor Party, had, has, or may have, against any Released Party arising out of, or in connection with the Consulting Agreement.

[Signature Page Follows]

PRESIDENT EMPLOYMENT AGREEMENT

APPENDIX A - DEFINITIONS

As used in the Agreement, the following terms will have the definitions set forth in this Appendix A:

1. 

"Cause" shall mean one or more of the following, provided, however, that for purposes of this definition, no act or failure to act shall be deemed "willful" unless effected by the Executive not in good faith and without a reasonable belief that such action or failure to act was in or not opposed to the Company's best interests, and no act or failure to act shall be deemed "willful" if it results from any incapacity of the Executive due to physical or mental illness.

a. 

A willful material breach by Executive of any term of this Agreement, or any of the Company's policies that have been agreed to by the Executive, or of any law, statute, or regulation that is applicable to the Company, which breach remains uncured by the Executive after a period of 30 days after the Executive’s receipt of a written notice from the Company informing the Executive of such breach and providing reasonable information relating to such breach;

b.

The willful appropriation of (or attempted appropriation of) a business opportunity of the Company or its affiliates, including attempting to secure or securing any personal profit in connection with any transaction by the Company or its affiliates;

c.

Intentional and willful injury of another employee or any person in the course of performing services for the Company; or

d.

Any willful conflict of interest, including, but not limited to solicitation of business on behalf of a competitor or potential competitor.

2.

"Good Reason" shall mean one or more of the following:

a.

Material reduction, without Executive's consent, of Executive's base salary, unless the reduction is generally applicable to substantially all senior executives of the Company (but nonetheless totaling no more than 20% in the aggregate);

b.

Failure to pay Executive the compensation described in this Agreement.

c.

Employing any individual (as an employee or a consultant), that the Executive specifically objects to in writing.

d.

Material reduction on an aggregate basis of the benefits provided to Executive under Company benefits plans, unless the reduction is generally applicable to substantially all senior executives of the Company;

e.

A substantial diminution in Executive's authority or duties that is materially inconsistent with Executive's position of Chief Executive Officer without Executive's consent;

f.

Relocation of the Company’s office where the Executive is required to work that increases the commute from Executive's principal residence by more than 50 miles; or

g.

Willful conduct by the Board that results in the Executive being reasonably unable to perform duties that a chief executive officer or a company similar to the Company is reasonably expect to perform.

provided however, that for purposes of "Good Reason", nothing described above shall constitute Good Reason unless Executive has notified the Company in writing describing the event which constitutes Good Reason within 30 days after the occurrence of such event and then only if the Company shall have failed to cure such event within 30 days after the Company's receipt of such written notice and Executive elects to terminate his employment as a result at the end of such 30 day cure period.

3.

"Change in Control" shall mean and be deemed to have occurred if there shall occur any of the following:

(i)

The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, or successor provisions (a "Person")) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act, or successor provisions ("beneficial ownership")) of more than 50% or more of either (1) the then-outstanding or newly issued shares of common stock of the Company (the "Outstanding Company Common Stock") or (2) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors  (the "Outstanding Company Voting Securities"); provided, however, that, for purposes of this definition, the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any affiliate of the Company or a successor, or (D) any acquisition by any entity pursuant to a transaction that complies with subsections (v)(A), (B) and (C) below;

(ii)

During the twelve (12) month period ending on the date of the most recent acquisition of Outstanding Company Voting Securities by a Person, the acquisition by such Person of beneficial ownership of 30% or more of the Outstanding Company Voting Securities; provided, however, that, for purposes of this definition, the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any affiliate of the Company or a successor, or (D) any acquisition by any entity pursuant to a transaction that complies with subsections [(v)(A), (B) and (C) below;

(iii)

During the twelve (12) month period ending on the date of the most recent acquisition of assets of the Company by a Person, the acquisition by such Person of assets of the Company having a total gross fair value equal to or more than 40% of the total gross fair market value of the Company's assets immediately before such acquisition; provided, however, that, for purposes of this definition, the following acquisitions shall not constitute a Change in Control: (A) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any affiliate of the Company or a successor, or (B) any acquisition by any entity pursuant to a transaction that complies with subsections (v)(A), (B) and (C) below;

(iv)

Consummation of a reorganization, merger, recapitalization, reverse stock split, statutory share exchange or consolidation or similar corporate transaction involving the Company or any of its Subsidiaries, or the acquisition of assets or stock of another entity by the Company or any of its Subsidiaries (each, a "Business Combination"), in each case unless, following such Business Combination, (A) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company's assets directly or through one or more subsidiaries (a "Parent")) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any entity resulting from such Business Combination or a Parent or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination or Parent) beneficially owns, directly or indirectly, more than 50% of, respectively, the then-outstanding shares of common stock of the ultimate parent entity resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such entity, except to the extent that the ownership in excess of more than 50% existed prior to the Business Combination, and (C) at least a majority of the members of the board of directors or trustees of the entity resulting from such Business Combination or a Parent were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or

4.

"Change in Control Date" shall be any date during the Term of this Agreement on which a Change in Control occurs. Anything in this Agreement to the contrary notwithstanding, if Executive's employment or status as an officer with the Company is terminated within twelve (12) months before the date on which a Change in Control occurs, and it is reasonably demonstrated that such termination (i) was at the request of a third party who has taken steps reasonably calculated or intended to effect a Change in Control or (ii) otherwise arose in connection with or anticipation of a Change in Control, then for all purposes of this Agreement the "Change in Control Date" shall mean the date immediately before the date of such termination.

5.

“Protection Period” means the period beginning on the Change in Control Date and ending on the last day of the 18-month period following the Change in Control Date.

6.

"Disability" means Executive's inability to perform the essential functions of his regular duties and responsibilities as the Company's Chief Executive Officer, with or without reasonable accommodation, due to a physical or mental injury, illness or impairment for a period of (i) six consecutive months or (ii) an aggregate of nine months (whether or not consecutive) in any 12-month period. The Company reserves the right to make the determination of disability under this Agreement in good faith based upon information supplied by Executive and/or his medical personnel, as well as information from medical personnel (or others) selected by the Company or its insurers. Executive shall not unreasonably withhold his consent to release relevant medical information or records to the medical personnel selected by the Company or its insurers. Executive and the Company acknowledge that Executive's ability to perform Executive's duties and responsibilities, with or without reasonable accommodation, is the essence of this Agreement.

7.

"Termination Date" means the effective date of Executive's "separation from service" from the Company as defined in Section 409A and Treasury Regulations promulgated thereunder.

8.

"Notice of Termination" means a written notice of termination of this Agreement which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated, and (iii) specifies the Termination Date

9.

"Subsidiary" means an entity 50 percent or more of the voting securities or interests of which are owned, directly or indirectly, by the Company or which is otherwise controlled directly or indirectly by the Company.

APPENDIX B –

GENERAL RELEASE OF CLAIMS

In exchange for the promises and benefits set forth in the Agreement, and to be provided to me following the Effective Date of this General Release, I, Ritesh Bhavnani, on behalf of myself, my heirs, executors and assigns, hereby acknowledge, understand and agree as follows:

1.  On behalf of myself and my family, heirs, executors, administrators, personal representatives, agents, employees, assigns, legal representatives, accountants, affiliates and for any partnerships, corporations, sole proprietorships, or other entities owned or controlled by me, I fully release, acquit, and forever discharge Snipp Interactive, Inc., its past, present and future officers, directors, shareholders, agents, representatives, insurers, employees, attorneys, subsidiaries, affiliated corporations, and assigns (collectively, the "Releasees"), from any and all charges, actions, causes of action, claims, grievances, damages, obligations, suits, agreements, costs, expenses, attorneys' fees, or any other liability of any kind whatsoever, suspected or unsuspected, known or unknown, which have or could have arisen out of my employment with the Company and/or termination of my employment with the Company (collectively, "Claims"), including:

a.  Claims arising under Title VII of the Civil Rights Act of 1964 (as amended); the Civil Rights Acts of 1866 and 1991; the Americans With Disabilities Act; the Family and Medical Leave Act; the Employee Retirement Income Security Act; the Occupational Health and Safety Act; the Sarbanes-Oxley Act;

b.  Claims for age discrimination arising under the Age Discrimination in Employment Act of 1967 (as amended) ("ADEA") and the Older Workers Benefits Protection Act, except ADEA claims that may arise after the execution of this General Release;

c.  Claims arising out of any other federal, state, local or municipal statute, law, constitution, ordinance or regulation; and/or

d.  Any other employment related claim whatsoever, whether in contract, tort or any other legal theory, arising out of or relating to my employment with the Company and/or my separation of employment from the Company. I also agree that I have been properly paid for all hours worked, have not suffered any on-the-job injury for which I have not already filed a claim and I have been properly provided any leaves of absence because of my own health condition or a family member's health condition.

e.  Excluded from this General Release are any claims that cannot be released or waived by law. This includes, but is not limited to, my right to file a charge with or participate in an investigation conducted by certain government agencies, such as the EEOC or NLRB. I acknowledge and agree, however, that I am releasing and waiving my right to any monetary recovery should any government agency pursue any claims on my behalf that arose prior to the effective date of this General Release.

f.  I waive all rights to re-employment with the Company. If I do apply for employment with the Company, the Company and I agree that the Company need not employ me, and that if the Company declines to employ me for any reason, it shall not be liable to me for any cause of action or damages whatsoever. I further agree that if I am re-hired by the Company or engaged by the Company in any capacity within the 6-month period immediately following my date of separation, I will repay the Company an amount equal to one-half of the net of any severance or separation pay I received. I agree to repay this amount within 30 days following the date I am re-hired or engaged by the Company.

2.  Release of Other Claims. I fully release, acquit, and forever discharge the Company from any and all other charges, actions, causes of action, claims, grievances, damages, obligations, suits, agreements, costs, expenses, attorneys' fees or any other liability of any kind whatsoever of which I have knowledge as of the time I sign this General Release.

3.  Restrictive Covenants. I acknowledge and agree that all of my obligations under the restrictive covenants in Sections 6 and 7 of my Chief Executive Officer Employment Agreement remain in full force and effect and shall survive the termination of my employment with the Company and the execution of this General Release.

4.  Consultation with Attorney. I am advised and encouraged to consult with an attorney prior to executing this General Release. I acknowledge that if I have executed this General Release without consulting an attorney, I have done so knowingly and voluntarily.

5.  Period for Review. I acknowledge that I have been given at least 21 days from the date I first received this General Release, or at least 45 days from the date I first received this General Release if my termination is part of a group reduction in force, which date was on or before ___________, during which to consider signing it.

6.  Revocation of General Release. I acknowledge and agree that I have the right to revoke my acceptance of this General Release if I notify the Company in writing within 7 calendar days following the date I sign it. Any revocation, to be effective, must be in writing, signed by me, and either: a) postmarked within 7 calendar days of the date I signed it and addressed to the Chairman of the Board, Snipp Interactive Inc, 6708 Tulip Hill Terrace, Bethesda, MD 20816 ; or b) hand delivered within 7 days of execution of this General Release to the Chairman of the Board. This General Release will become effective on the 8th day after I sign it (the "Effective Date"); provided that I have not timely revoked it.

I ACKNOWLEDGE AND AGREE THAT I HAVE BEEN ADVISED THAT THE GENERAL RELEASE IS A LEGAL DOCUMENT, AND I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY CONCERNING THIS GENERAL RELEASE. I ACKNOWLEDGE AND AGREE THAT I HAVE CAREFULLY READ AND FULLY UNDERSTAND ALL PROVISIONS OF THIS GENERAL RELEASE AND I AM VOLUNTARILY AND KNOWINGLY SIGNING IT.

By:    _______________________________________

SIGNATURE DATEEmployment Contract

HIP DIGITAL MEDIA, INC.

AMENDMENT #1 TO BARIS KARADOGAN EMPLOYMENT AGREEMENT

This amendment (the "Amendment") is as of the 2nd day of June 2011 (the "Amendment Date") to that certain Employment Agreement (the "Agreement") made and entered into as of 151 of January of 2011, by and between Bails Karadogan, ("Employee") and Hip Digital Media Inc., a Delaware corporation with a mailing address of 800 Menlo Drive #220, Menlo Park, CA 94025 ("Company").

Capitalized terms used herein have the same meaning as the Agreement unless defined otherwise in this Addendum. All terms and conditions of the Agreement are unchanged, except for the following:

-

As of May 1, 2011, the annual Base Salary for Baris Karadogan is changed to $250,000.

-

If employee's employment is terminated by the Company for a reason other than Cause (as defined in the Company's Stock Plan), then Company and employee shall enter into a consulting agreement under which employee will provide at least 5 hours of service per month at an hourly rate of $50, for a period which will end on 12/31/2016 unless terminated earlier by mutual consent of the parties.

HIP DIGITAL MEDIA, INC.

BARIS KARADOGAN EMPLOYMENT AGREEMENT

This Agreement is entered into as of 1/1/2011, (the "Effective Date") by and between Hip Digital Media, Inc., a Delaware corporation (the "Company"), and Baris Karadogan ("Executive").

1.

Duties and Scope of Employment.

(a)

Positions and Duties. As of the Effective Date, Executive will serve as the Chief Executive Officer of the Company. Executive will render such business and professional services in the performance of his duties, consistent with Executive's position within the Company, as will reasonably be assigned to him by the Company's Board of Directors (the "Board").

(b)

Board Membership. During the Agreement Term as defined below, Executive will serve as a member and Chairman of the Board, subject to any required Board and/or stockholder approval.

(c)

Obligations. During the Agreement Term, Executive will perform his duties faithfully and to the best of his ability and will devote his full business efforts and time to the Company. For the duration of the Agreement_Term, Executive agrees not to actively engage in any other employment, occupation or consulting activity for any direct or indirect remuneration without the prior approval of the Board.

2.

Agreement Term. 

The term of this Agreement (herein called the "Agreement Term") shall commence effective as of January 1, 2011, and shall continue for a period of one (1) calendar year, subject to early termination under Section 7 below. Two months prior to the end of the Agreement Term, the parties shall begin discussions regarding renewal or extension of the Agreement. In the event either party wishes not to renew or extend the Agreement at the end of the Agreement Term, said party shall deliver written notice to the other no later than one (1) month prior to the end of the Agreement Term.

3.

Compensation.

(a)

Base Salary. During the Agreement Term, the Company will pay Executive an annual salary of $190,000 as compensation for his services (the "Base Salary"). The Base Salary will be paid periodically in accordance with the Company's normal payroll practices and be subject to the usual, required withholding. Executive's salary will be subject to review and adjustments will be made based upon the Company's normal performance review practices.

(b)

Bonus. Executive will be eligible to receive a bonus to be determined by the Board, less applicable withholding taxes, upon achievement of performance objectives to be determined by the Board in its sole discretion, which such objectives will be established within [forty-filye (45)] days of Executive's start date.

(c)

Equity. Executive will be eligible to receive awards of stock options, restricted stock or other equity awards pursuant to any plans or arrangements the Company may have effect from time to time. The Board or its committee will determine in its sole discretion whether Executive will be granted any such equity awards and the terms of any such award in accordance with the terms of any applicable plan or arrangement that may be in effect from time to time.

.

4.

Employee Benefits.  During this Agreement, Executive will be entitled to participate in the employee' benefit plans currently and hereafter maintained by the Company of general applicability to other senior executives of the Company, including, without limitation, the Company’s group medical, dental, vision, disability, life insurance, and flexible-spending account plans. The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time.

5.

Vacation.  Executive will be entitled to paid vacation of 3 weeks per year in accordance with the Company's vacation policy, with the timing and duration of specific vacations mutually and reasonably agreed to by the parties hereto.

6.

Expenses.  The Company will reimburse Executive for reasonable travel, entertainment or other expenses incurred by Executive in the furtherance of or in connection with the performance of Executive's duties hereunder, in accordance with the Company's expense reimbursement policy as in effect from time to time. Before incurring any expense over the sum of s25,000.00 for a single item or event, Executive shall confer informally with Company's Board for approval of such expense.

7.

Termination.

(a)

Executive's Right to Terminate Agreement.

(i)

Without Reason. Executive has the right to terminate the Agreement and the Agreement Term, at any time, upon sixty (60) days notice to Company.

(ii)

Breach by Company. Notwithstanding any other provision herein, Executive may terminate this Agreement prior to the end of the Agreement Term because of a material breach of the Agreement by Company, upon written notice to Company delivered to the Board and thirty (30) days opportunity to cure by Company.

(iii)

Good Reason. Executive may terminate this Agreement prior to the end of the Agreement Term for Good Reason as defined herein.

(b)

Employer's Right to Terminate Agreement.

(i)

Executive's Death or Disability. Notwithstanding any other provision herein, this Agreement shall terminate automatically, immediately, and without prior notice upon Executive's death. Notwithstanding any other provision herein, this Agreement shall terminate at Company's option if Executive becomes physically or mentally disabled such that Company's Board of Directors, without consideration of the opinions of Executive, reasonably believes Executive is incapable of performing one or more of the essential functions of Executive's job and cannot be reasonably accommodated under the Americans with Disabilities Act.

(ii)

For Cause. Notwithstanding any other provision of this Agreement, Company may immediately terminate this Agreement for Cause as defined herein.

(iii)

Without Cause.  Notwithstanding any other provision of this AgreerOnt, Company may terminate this Agreement for any reason upon thirty (30) days written notice to Executive.

8.

Severance.

(a)

Termination for other than Cause, Death, or Disability, or Alternatively Termination with Good Reason Apart from a Change of Control. If within six (6) months of a Change of Control (i) the Company terminates Executive's employment with the Company other than for Cause, death or disability, or (ii) Executive resigns from his employment with the Company for Good Reason, then, subject to Section 9, Executive will be entitled to (A) receive continuing payments of severance pay at a rate equal to his Base Salary rate, as then in effect, for four (4) months from the date of such termination in accordance with the Company's normal payroll policies; (B) a pro-rated amount of Executive's target bonus for the year in which the termination occurs, to be paid in equal installments over the six-month period from the date of such termination on the same dates and pursuant to the Company's standard payroll practices, (C) accelerated vesting of all outstanding equity awards as to 50% of the then unvested portion of any such award, (D) COBRA reimbursement for Executive and Executive's eligible dependents under the Company's Benefit Plans for six (6) months following such termination.

(b)

Termination for Cause, Death or Disability, or Alternatively without Good Reason. If Executive's employment with the Company terminates voluntarily by Executive (except upon resignation for Good Reason), for Cause by the Company or due to Executive's death or disability, then (i) all vesting will terminate immediately with respect to Executive's outstanding equity awards, (ii) all payments of compensation by the Company to Executive hereunder will terminate immediately (except as to amounts already earned), and (iii) Executive will only be eligible for severance benefits in accordance with the Company's established policies, if any, as then in effect.

9.

Return of Materials. Executive agrees that upon termination of Executive's relationship with Company, for any reason, such Executive shall (i) deliver to the Company all Confidental Information and all copies thereof, along with any and all other property belonging to the Company or any client or supplier of the Company, and (ii) return to the Company all sales material, and all other documents, information, equipment, or materials of whatever kind or nature and stored on any type of media developed by or for the Company and thereafter shall neither use such documents, information materials or any similar materials, nor supply or make available such documents, information or materials to any third party.

10.

Corporate Opportunity.  Executive acknowledges that while employed by Company, each and every business opportunity which Executive encounters which is reasonably incident' to Company's present or prospective business dealings is owned first by Company. Before personally engaging in any business opportunity of this type Executive shall present by written notice to Company's Board a good faith full description of the business opportunity outlining the details of the opportunity, the timeframe in which such opportunity must reasonably be pursued for potential success, and clearly stating Executive's desire to personally pursue the opportunity if passed bn by Company. Company shall have thirty (30) days from receipt of notice during which to consider the opportunity. If Company does not accept the opportunity in writing within thirty (30) days of notice by Executive, Executive may engage in the business opportunity so long as engaging in such opportunity does not in any way infringe upon any obligation of Executive under this Agreerrient or interfere with Executive's ability to perform Executive's responsibilities to Company under the Agreement.

11.

Intellectual Property.   All inventions, designs, concepts, innovations or improvements relating to Company's business, products, services and/or methods of conducting business (including new contributions, improvements, ideas and discoveries, whether patentable or not) conceived or made by Executive during Executive's employment with Company, that result from any aid, support or assistance by the Company, or that are created during Executive's work time with Company (collectively, the "Inventions") belong and are hereby assigned to Company. Executive will promptly and fully disclose such Inventions to the Board and perform all actions reasonably requested by the Board to establish and confirm such ownership (including execution of written assignments).

12.

Conditions to Receipt of Severance; No Duty to Mitigate.

(a)

Separation Agreement and Release of Claims. The receipt of any severance pursuant to Section 8 will be subject to Executive signing and not revoking a separation agreement and general release of claims in a form satisfactory to the Company, including a unilateral non-disparagement provision guaranteeing that Executive will not disparage the Company, its officers employees, products or services. No severance pursuant to such Sections will be paid or provided until the separation agreement and release agreement becomes effective.

(b)

Nonsolicitation.

The receipt of any severance benefits pursuant to Sectionl8(a) will be subject to Executive not violating the provisions of Section 14 and 16. In the event Executive breaches the provisions of Section 15 and 16, all continuing payments and benefits to which Executive may otherwise be entitled pursuant to Section 8(a) will immediately cease.

(c)

Section 409A. Notwithstanding anything to the contrary in this Agreement, any cash severance payments otherwise due to Executive pursuant to Section 8 or otherwise on or within the six-month period following Executive's termination will accrue during such six-month period and will become payable in a lump sum payment on the date six (6) months and one (1) day following the date of Executive's termination, provided, that such cash severance payments will be paid earlier, at the times and on the terms set forth in the applicable provisions of Section 8, if the Company reasonably determines that the imposition of additional tax under Section 409A of the Internal'' Revenue Code of 1986, as amended, will not apply to an earlier payment of such cash severance payments. In addition, this Agreement will be deemed amended to the extent necessary to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Code Section 409A and any temporary, proposed or final Treasury Regulations and guidance promulgated thereunder and the parties agree to cooperate with each other and to take reasonably necessary steps in this regard.

(d)

No Duty to Mitigate. Executive will not be required to mitigate the amount of any payment contemplated by this Agreement, nor will any earnings that Executive may receive from alibi other source reduce any such payment.

13.

Definitions.

(a)

Benefit Plans. For purposes of this Agreement, "Benefit Plans" means plans, policies', or arrangements that the Company sponsors (or participates in) and that immediately prior to Executive’s termination of employment provide Executive and/or Executive's eligible dependents with medical, dental, and/or vision benefits. Benefit Plans do not include any other type of benefit (including, but not by way of limitation, disability, life insurance or retirement benefits). A requirement that the Company provide Executive and Executive's eligible dependents with coverage under the Benefit Plans will not be satisfied unless the coverage is no less favorable than that provided to senior executives of the Company at any applicable time during the period Executive is entitled to receive severance pursuant to Section 8(a). The Company may, at its option, satisfy any requirement that the Company provide coverage under any Benefit Plan by (i) reimbursing Execu4e's premiums under Title X of the Consolidated Budget Reconciliation Act of 1985, as amended ("COBRA") after Executive has properly elected continuation coverage under COBRA (in which case Executive will be solely responsible for electing such coverage for his eligible dependents), or (ii) providing coverage under a separate plan or plans providing coverage that is no less favorable or by paying Executive a lump-sum payment which is, on an after-tax basis, sufficient to provide Executive and Executive's eligible dependents with equivalent coverage under a third party plan that is reasonably available to Executive and Executive's eligible dependents.

(b)

Cause. For purposes of this Agreement, "Cause" is defined as (i) an act of dishonesty made by Executive in connection with Executive's responsibilities as an employee, (ii) Executive’s conviction of, or plea of nolo contendere to, a felony or any crime involving fraud, embezzlement or any other act of moral turpitude, (iii) Executive's gross misconduct or violation of Company policy, (iv) Executive's unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom Executive owes an obligation of nondisclosure as a result of Executive's relationship with the Company; (v) Executive's willful breach Of any obligations under any written agreement or covenant with the Company; (vi) Executive’s failure to perform duties specifically required by this Agreement, which are part of Executive’s position with Company, or otherwise reasonably required by Company after written demand, by Company with ten (10) days for Executive to cure; (vii) Executive seeks federal bankruptcy protection and such action reflects negatively upon the reputation of Company; (viii) takes actions which materially impugns the reputation or good will of Company; (ix) Executive takes actions Which are grossly negligent or demonstrate reckless disregard for the interests of Company; (x) Executive fails to maintain appropriate decorum in and out of the work place in a way that negatively impacts the reputation or good will of Company; (xi) Executive commits an action which may in reasonable probability subject Company to significant legal liability, including but not limited to commission of acts which violate: (a) the Americans with Disabilities Act of 1990, as amended; (b) Title VII of the Civil Rights Act of 1964, as amended and including 42 U.S.C. Sec 2000(e) et seq.; (c) the Civil Rights Act of 1991; (d) The Civil Rights Acts of 1866, 1871 and 1964, as amended; (e) 42 U.S.C. Sec 1981; (f) the Age Discrimination in Employment Act of 1967, as amended; (g) the Texas Commission on Human Rights Act of 1983, as amended; or other law which may expose the company to liability; or (xii) Executive develops a drug or alcohol problem which Company deems to materially affect its reputation or which Executive fails or refuses to treat and end within a reasonable period of time upon reasonable request of Company.

(c)

Change of Control. For purposes of this Agreement, "Change of Control" of the Company is defined as:

(i)

any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company's then outstanding voting securities; or

(ii)

a change in the composition of the Board occurring within a two-year period, as a result of which fewer than a majority of the directors are Incumbent Directors. "Incu4ent Directors" will mean directors who either (A) are directors of the Company as of the date hereof, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but will not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company); or

(iii)

the date of the consummation of a merger or consolidation of the Company with any other corporation that has been approved by the stockholders of the Company, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or the stockholders of the Company approve, a plan of complete liquidation of the Company; provided, however, that the changes in Board Composition which occurred in 2010 shall not be considered Changes of Control for the purposes of this Agreement; or

(iv)

the date of the consummation of the sale or disposition by the Company of all or substantially all the Company's assets.

(d)

Good Reason. For the purposes of this Agreement, "Good Reason" means without Executive's express written consent (i) a significant reduction of Executive's duties, position or responsibilities, or the removal of Executive from such position and responsibilities, unless Executive is provided with a comparable position (i.e., a position of equal or greater organizational level, duties, authority, compensation and status); provided, however, that a reduction in duties, position; or responsibilities solely by virtue of the Company being acquired and made part of a larger entity (As, for example, when the Chief Financial Officer of the Company remains as such following a Change of Control but is not made the Chief Financial Officer of the acquiring corporation) will not constitute "Good Reason"; (ii) the significant reduction of Executive's aggregate base salary and target bonus opportunity ("Base Compensation") below Executive's Base Compensation immedi4tely prior to such reduction, unless the Company also similarly reduces the Base Compensation of all other executives of the Company); (iii) the relocation of Executive to a facility or a location more than fifty (50) miles from the facility at which Executive is then currently present.

(e)

Confidential Information.

For the purposes of this Agreement, "Confidential Information" means Company's information which is used in Company's Business and is (i) proprietary to, about or created by the Party; (ii) gives Company some competitive business advantage or the opportunity of obtaining such advantage or the disclosure of which could be detrimental to the interests of Company; (iii) designated as Confidential Information by Company, or from all the relevant circumstances should reasonably be assumed by the Executive to be confidential and proprietary to Company; or (iv) not generally known by persons or businesses outside of Company. Such Confidential Information includes, but is not limited to, the following types of information and other information of a similar nature (whether or not reduced to writing or designated as confidential).

i.

Work Product. Work product resulting from or related to work or projects performed or to be performed for Company;

ii.

Other Proprietary Information.

Executive is aware of and acknowledges that Company has developed special competence and knowledge in Company's industry and has accumulated information not generally known to others in the field which is of unique value in the conduct and growth of Company's business and which Company treats as proprietary. This information includes data relating to Company's proprietary rights prior to any public disclosure thereof, including but not limited to the nature of the proprietary rights, production data, the status and details of research and development of products and services, and information regarding acquiring, protecting, enforcing and licensing proprietary rights (including patents, copyrights and trade secrets);

iii.

Business Operations. Internal personnel and financial information, vendor names and other vendor information (including vendor characteristics, services and agreements), purchasing and internal cost information, internal services and operational manuals, and the 'manner and methods of conducting Company's Business;

iv.

Marketing and Development Operations. Marketing and development plans, price and cost data, price and fee amounts, pricing and billing policies, quoting procedures, marketing techniques and methods of obtaining business, forecasts and forecast assump6ons and volumes, and future plans and potential strategies of Company which have been or are being discussed; and

v.

Clients. Names of Clients and their representatives, contracts and their contents and parties, customer services.

14.

Non-Solicitation. Until the date one (I) year after the termination of Executive's employment with the Company for any reason, Executive agrees not, either directly or indirectly, to solicit any employee of the Company (or any parent or subsidiary of the Company) to leave his employment either for Executive or for any other entity or person.

15.

Non-Disclosure. Executive agrees that Executive shall not for five years after termination disclose Company's Confidential Information to anyone for any purpose unless acting within tie course and scope of employment for Company and for purpose of furthering Company business. This clause shall survive the termination of this Agreement for any reason.

16.

Assignment. This Agreement will be binding upon and inure to the benefit of (a) the heirs, executors and legal representatives of Executive upon Executive's death and (b) any successor of the company. Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes. For this purpose, "successor" means any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company. None of the rights of Executive to receive any form of compensation payable pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution. Any other attempted assignment, transfer, conveyance or other disposition of Executive's right to compensation or other benefits will be null and void.

17.

Notices. All notices, requests, demands and other communications called for hereunder will be in writing and will be deemed given (i) on the date of delivery if delivered personally, (ii) one (1) day after being sent by a well established commercial overnight service, or (iii) four (4) days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed to the parties or their successors at the following addresses, or at such other addresses as the parties may later designate in writing:

If to the Company:

Hip Digital Media, Inc.

800 Menlo Avenue, Ste 220, Menlo Park, CA 94025 USA

Attn:  ____________________________

If to Executive:

at the last residential address known by the Company.

18.

Severability. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement will continue in full force and effect without said provision.

19.

Arbitration.

(a)

Arbitration. In consideration of Executive's employment with the Company, its promise to arbitrate all employment-related disputes and his receipt of the compensation, pay raises and other benefits paid to him by the Company, at present and in the future, Executive agrees that any and all controversies, claims, or disputes with anyone (including the Company and any employee, officer, director, shareholder or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting from Executive's employment with the Company or the termination of Executive's employment with the Company, including any breach of this Agreement will be subject to binding arbitration under the Arbitration Rules set forth in California Code of Civil Procedure Section 1280 through 1294.2, including Section 1283.05 (the "Rules") and pursuant to California law. Disputes which Executive agrees to arbitrate, and thereby agrees to waive any right to a trial by jury, include any statutory claims under state or federal law, including, but not limited to, claims under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the Worker Adjustment and Retraining Notification Act, the California Fair Employment and Housing Act, the Family and Medical Leave Act, the California Family Rights Act, the California Labor Code, claims of harassment, discrimination or wrongful termination and any statutory claims. Executive further understands that this Agreement to arbitrate also applies to any disputes that the Company may have with him.

(b)

Procedure. Executive agrees that any arbitration will be administered by JAMS (."JAMS") pursuant to JAMS Employment Arbitration Rules, which can be downloaded at http://www.jamsadr.corn/rules-employment-arbitration/ ("JAMS Employment Rules"). Executive agrees that the arbitrator will have the power to decide the threshold issue of the enforceability of this agreement, as well as any motions brought by any party to the arbitration, including motions for summary judgment and/or adjudication and motions to dismiss and demurrers, prior to any arbitration hearing. Executive also agrees that the arbitrator will have the power to award any remedies including attorneys' fees and costs, available under applicable law. Executive understands that the company will pay for any administrative or hearing fees charged by the arbitrator or JAMS except that Executive will be responsible for paying that portion of the filing fee that Executive would have otherwise had to pay to file any dispute initiated by Executive if it had been filed in Court. Executive agrees that the arbitrator will administer and conduct any arbitration in a manner consistent with this arbitration provision and the Rules and that to the extent that the JAMS Employment Rules conflict with the Rules, the Rules will take precedence. Executive agrees that the decision of the arbitrator will be in writing.

(c)

Remedy. Except as provided by this Agreement and by the Rules, including any provisional relief offered therein, arbitration will be the sole, exclusive and final remedy for any dispute between Executive and the Company. Accordingly, except as provided for by the Rules and this Agreement, neither Executive nor the Company will be permitted to pursue court action regarding claims that are subject to arbitration. Notwithstanding, the arbitrator will not have the authority to disregard or refuse to enforce any lawful Company policy, and the arbitrator will not order or require the Company to adopt a policy not otherwise required by law which the Company has not adopted.

(d)

Administrative Relief. Executive understands that this Agreement does not prohibit him from pursuing an administrative claim with a local, state or federal administrative body such as the National Labor Relations Board, the Department of Fair Employment and Housing, the Equal Employment Opportunity Commission, the workers' compensation board, or any other administrative claim prohibited by law from mandatory arbitration. This Agreement does, however, preclude Executive from pursuing court action regarding any such claim.

(e)

Voluntary Nature of Agreement. Executive acknowledges and agrees that Executi4e is executing this Agreement voluntarily and without any duress or undue influence by the Company or anyone else. Executive further acknowledges and agrees that Executive has carefully read this Agreement and that Executive has asked any questions needed for Executive to understand the terms, consequences and binding effect of this Agreement and fully understands it, including that Executive is waiving Executive's right to a jury trial. Finally, Executive agrees that Executive has been provided an opportunity to seek the advice of an attorney of Executive's choice before signing this Agreement.

20.

Integration. This Agreement, together with any Option Plan, and any Option Agreement ever given to the Executive represents the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous agreements whether written or oral. This Agreement may be modified only by agreement of the parties by a written instrument executed by the parties that is designated as an amendment to this Agreement.

21.

Waiver of Breach. The waiver of a breach of any term or provision of this Agreement, which must be in writing, will not operate as or be construed to be a waiver of any other previous or subsequent breach of this Agreement.

22.

Headings. All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

23.

Tax Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable taxes.

24.

Governing Law. This Agreement will be governed by the laws of the State of California (with the exception of its conflict of laws provisions).

25.

Acknowledgment. Executive acknowledges that he has had the opportunity to discuss this matter with and obtain advice from his private attorney, has had sufficient time to, and has carefully read and fully understands all the provisions of this Agreement, and is knowingly and voluntarily entering into this Agreement.

26.

Counterparts. This Agreement may be executed in counterparts, and each counterpart will have the same force and effect as an original and will constitute an effective, binding agreement on the part of each of the undersigned.

27.

Survivability. Sections 14 and 15 of this Agreement shall expressly survive its termination and remain obligations of Executive even after termination of the Agreement regardless of the reason for termination.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by their duly authorized officers, as of the day and year first above written.

COMPANY:

HIP DIGITAL MEDIA, INC.

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