Document:

Exhibit 10.3

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”), effective August 25, 2011, is entered into by and between Augme Technologies, Inc. (“the Company”), a Delaware corporation, (the ‘Employer” or the “Company”), and Eric Harber (the “Employee”).

 

WITNESSETH:

 

WHEREAS, Employer is engaged in the interactive media technology business and related businesses, including but not limited to Internet and mobile communications advertising services, hardware and software development and sales, and information technology (the “Technologies”); and conducts research, experimentation, development, and exploitation of related technologies and engages in other businesses; and

 

WHEREAS, Employer desires to employ Employee to serve as Chief Operating Officer  of the Company, and Employee desires to be employed by Employer in such capacity pursuant to the terms and conditions hereinafter set forth.

 

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

 

1.                                   EMPLOYMENT: DUTIES AND RESPONSIBILITIES

 

Employer hereby employs Employee as Chief Operating Officer of the Company.  Subject at all times to the direction of the Chief Executive Officer and the Board of Directors of the Employer, Employee’s responsibilities shall include managing the day to day operations of the Company and executing the policies of the Chief Executive Officer and the Board of Directors, and such other duties as the Chief Executive Officer and the Board of Directors may prescribe from time to time. Employee’s job sites shall be in the Kirkland, Washington metropolitan area.  Employee shall serve, by mutual consent, in such other positions and offices of the Employer and its affiliates, if selected, without any additional compensation.

 

Employee shall confer with the Directors and other officers of the Company regarding ideas and proposals with respect to the overall direction and operation of the Company.

 

2.                                    FULL TIME EMPLOYMENT

 

Employee hereby accepts employment by Employer, upon the terms and conditions contained herein, and agrees that during the term of this Agreement the Employee shall devote substantially all of his business time, attention, and energies to the business of the Employer. Employee, during the term of this Agreement, will not perform any services for any other business entity, whether such entity conducts a business which is competitive with the business of Employer or is engaged in any other business activity; provided, however, that nothing herein contained shall be construed as (a) preventing Employee from investing his personal assets in any business or

 

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businesses which do not compete directly or indirectly with the Employer, provided such investment or investments do not require any services on his part in the operation of the affairs of the entity in which such investment is made and in which his participation is solely that of an investor, (b) preventing Employee from purchasing securities in any corporation whose securities are regularly traded, if such purchases shall not result in his owning beneficially, at any time, more than 5%  of the equity securities of any corporation engaged in a business which is competitive, directly or indirectly, to that of Employer, (c) preventing Employee from (i) engaging in charitable activities, (ii) serving on corporate, advisory, civil or charitable boards or committees, or (iii) delivering lectures, or teaching at educational institutions, so long as such activities, individually or in aggregate, do not adversely affect the Employee’s performance of his duties hereunder, which determination shall be made at the discretion of the Board, or (d) engaging in any other activities, if he receives the prior written approval of the Board of Directors of the Company with respect to his engaging in such activities.

 

3.                                   RECORDS

 

In connection with his engagement hereunder, Employee shall accurately maintain and preserve all notes and records generated by Employer which relate to Employer and its business and shall make all such reports, written if required, as Employer may reasonably require.

 

4.                                   TERM

 

Employee’s employment hereunder shall be for three twelve month periods (the “Initial Term”), to commence on August 25, 2011 and end thirty-six months from the date of this Agreement.  Thereafter, the Company may elect to extend employment to Employee for one or more additional twelve-month periods (the “Subsequent Term”), commencing thirty-six months from the date hereof.  A twelve-month period shall be deemed a Contract Year.  For all compensation and benefit purposes, other than those specifically addressed herein, the Employee shall be deemed to have been continually employed with the Employer from August 25, 2011.

 

5.                                   SALARY

 

As full compensation (“Base Salary”) for the performance of his duties on behalf of Employer, Employee shall be compensated as follows:

 

(i)       Base Salary. Employer, (x) during the first-year of the term hereof, shall pay Employee a base salary at the rate of $245,000 per annum, payable semi-monthly; (y) during the subsequent second-year of the term, Employer agrees to pay Employee a base salary at the rate of $269,500 per annum, payable semi-monthly; and (z) during the subsequent third-year of the term, Employer agrees to pay Employee a base salary at the rate of $296,450 per annum, payable semi-monthly.  If this Agreement is renewed for a subsequent term or terms, base salary shall be increased a) by a minimum of Ten-Percent (10%) (the “Minimum Increase”) over the base salary in effect on the renewal date; or b) as the Board of Directors shall determine if in excess of the Minimum Increase.  Future salary increases will be subject to mutual agreement.

 

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(ii)        Annual Bonus. In addition to the Base Salary, Employee will be eligible for an annual performance bonus, consistent with the annual performance bonus afforded to other senior management employees, to be payable upon achievement of performance goals and objectives to be mutually agreed upon by the Employee and the Company’s Board of Directors in advance of the relevant performance period.

 

(iii)      Other Meritorious Adjustments. The Board of Directors may, in its sole and absolute discretion, consider other meritorious adjustments in compensation, or a bonus, under appropriate circumstances, including the conception of valuable or unique inventions, processes, discoveries or improvements capable of profitable exploitation by the Company.

 

6.                                    EQUITY

 

(i)        Incentive Stock Options. Employee shall receive options during the Term of this Agreement as determined by the Employer’s Board of Directors from time to time, subject to subsections 6(ii) and (iii) below.

 

(ii)       Initial Stock Option Grant.  Upon execution of this Agreement, Employee shall be granted an aggregate of 222,500 stock options from the Augme Technologies Inc. 2010 Incentive Stock Option Plan.  The options shall have an exercise price of $3.04 per share (which exercise price is not less than the closing price on the date of Board approval) and a five year term.  The options shall vest in accordance with the following schedule:

 

a.      44,500 of the stock options shall vest immediately.

 

b.      178,000 of the stock options shall vest in equal monthly increments over a three-year period (1/36th per month) starting at the date of this Agreement.

 

c.      In the event of (A) a merger, acquisition or sale transaction by the Company which causes a change of control of the Company (the “Control Change”), any unvested common stock, options to purchase common stock or similar securities held beneficially by you shall automatically become fully  vested.  For purposes of this section, Control Change shall mean the occurrence of any of the following events:  (i) a majority of the outstanding voting stock of the Company shall have been acquired or beneficially owned by any person or any two or more persons acting as a partnership, limited partnership, syndicate or other group, entity or association acting in concert for the purpose of voting, acquiring, holding, or disposing of voting stock of the Company; or (ii) a merger or a consolidation of the Company with or into another corporation, other than (A) a merger or consolidation with a subsidiary of the Company, or (B) a merger or consolidation in which the holders of voting stock of the Company immediately prior to the merger as a class hold immediately after the merger at least a majority of all outstanding voting power of the surviving or resulting corporation or its parent; or (iii) a statutory exchange of shares of one or more classes or series of outstanding voting stock of the Company for cash, securities, or other property, other than an exchange in which the holders of voting stock of the Company immediately prior to the exchange as a class hold immediately after the exchange at least a majority of all outstanding voting

 

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power of the entity with which the Company stock is being exchanged; or (iv) the sale or other disposition of all or substantially all of the assets of the Company, in one transaction or a series of transactions, other than a sale or disposition in which the holders of voting stock of the Company immediately prior to the sale or disposition as a class hold immediately after the exchange at least a majority of all outstanding voting power of the entity to which the assets of the Company are being sold; or (B) a transaction relating to a litigation settlement, exclusive licensing fee arrangement or sale of intellectual property wherein the Company receives cash proceeds, in which case the remaining amount of unvested stock options held by you shall be immediately vested according to the following terms;

 

	
Net Amount Received by Company
    	
 
    	
Percentage of Remaining Stock Options
   to be Vested
    
	
 
    	
 
    	
 
    
	
Over $10,000,000 to $24,999.99
    	
 
    	
50%
    
	
 
    	
 
    	
 
    
	
Over $25,000,000
    	
 
    	
100%
    

 

7.                                    BUSINESS EXPENSES

 

The Employer also shall reimburse the Employee for all reasonable business expenses incurred by Employee in the performance of his duties hereunder including, but not limited to, travel on business, attending technical and business meetings, professional activities, and customer entertainment, such reimbursement to be made in accordance with regular Company policy and within a reasonable period following Employee’s presentation of the details of, and proof of, such expenses.

 

8.                                   FRINGE BENEFITS

 

(i)      During the term of this Agreement, Employer shall provide to Employee, at its sole expense, health insurance and other fringe benefits on the same terms and conditions as it shall afford other senior management employees.

 

(ii)     During the term of this Agreement, Employer shall provide paid vacation to Employee which accrues monthly from the date of execution of this Agreement. The annual paid vacation earned for each Contract Year is: (i) three (3) weeks per Contract Year for the first three (3) Contract Years of full-time employment; (ii) four (4) weeks per Contract Year for more than three (3) and up to seven (7) Contract Years of full-time employment; and (iii) five (5) weeks per Contract Year for more than seven (7) Contact Years of full-time employment.

 

9.                                   SUBSIDIARIES

 

For the purposes of this Agreement all references to business products, services and sales of Employer shall include those of Employer’s affiliates.

 

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10.                           INVENTIONS

 

All systems, inventions, discoveries, apparatus, techniques, methods, know-how, formulae or improvements made, developed or conceived by Employee during Employee’s employment by Employer, whenever or wherever made, developed or conceived, and whether or not during business hours, which constitute an improvement, on those heretofore, now or at any time during Employee’s employment, developed, manufactured or used by Employer in connection with the manufacture, process or marketing of any product heretofore or now or hereafter developed or distributed by Employer, or any services to be performed by Employer or of any product which shall or could reasonably be manufactured or developed or marketed in the reasonable expansion of Employer’s business, shall be and continue to remain Employer’s exclusive property, without any added compensation or any reimbursement for expenses to Employee, and upon the conception of any and every such invention, process, discovery or improvement and without waiting to perfect or complete it, Employee promises and agrees that Employee will immediately disclose it to Employer and to no one else and thenceforth will treat it as the property and secret of Employer.

 

Employee will also execute any instruments requested from time to time by Employer to vest in it complete title and ownership to such invention, discovery or improvement and will, at the request of Employer, do such acts and execute such instruments as Employer may require, but at Employer’s expense to obtain Letters of Patent, trademarks or copyrights in the United States and foreign countries, for such invention, discovery or improvement and for the purpose of vesting title thereto in Employer, all without any reimbursement for expenses (except as provided in Section 7  or otherwise) and without any additional compensation of any kind to Employee.

 

Any assignment of Inventions required by this Agreement does not apply to an Invention for which no equipment, supplies, facility, intellectual property or trade secret information of Employer was used and which was developed entirely on the Employee’s own time, unless (a) the Invention relates (i) directly to the business of Employer or (ii) to Employer’s actual or demonstrably anticipated research or development or (b) the Invention results from any work performed by Employee for Employer.

 

11.                           CONFIDENTIAL INFORMATION and TRADE SECRETS

 

(i)                                   All Confidential Information shall be the sole property of Employer.  Employee will not, during the period of his employment and for a period ending two years after termination of his employment for any reason, disclose to any person or entity or use or otherwise exploit for Employee’s own benefit or for the benefit of any other person or entity any Confidential Information which is disclosed to Employee or which becomes known to Employee in the course of his employment with Employer without the prior written consent of an officer of Employer except as may be necessary and appropriate in the ordinary course of performing his duties to Employer during the period of his employment with Employer. For purposes of this Section 11(i), “Confidential Information” shall mean any data or information belonging to Employer, other than Trade Secrets, that is of value to Employer and is not generally known to competitors of Employer 

 

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or to the public, and is maintained confidential by Employer, including but not limited to non-public information about Employer’s clients, executives, key contractors and other contractors and information with respect to its products, designs, services, strategies, pricing, processes, procedures, research, development, inventions, improvements, purchasing, accounting, engineering and marketing (including any discussions or negotiations with any third parties).  Notwithstanding the foregoing, no information will be deemed to be Confidential Information unless such information is treated by Employer as confidential and shall not include any data or information of Employer that has been voluntarily disclosed to the public by Employer (except where such public disclosure has been made without the authorization of Employer), or that has been independently developed and disclosed by others, or that otherwise enters the public domain through lawful means.

 

(ii)      All Trade Secrets shall be the sole property of Employer. Employee agrees that during his employment with Employer and after its termination, Employee will keep in confidence and trust and will not use or disclose any Trade Secret or anything relating to any Trade Secret, or deliver any Trade Secret, to any person or entity outside Employer without the prior written consent of the Board of Directors.  For purposes of this Section 11(ii), “Trade Secrets” shall mean any scientific, technical and non-technical data, information, formula, pattern, compilation, program, device, method, technique, drawing, process, financial data, financial plan, product plan or list of actual or potential customers or vendors and suppliers of Employer or any portion or part thereof, whether or not copyrightable or patentable, that is of value to Employer and is not generally known to competitors of Employer or to the public, and whose confidentiality is maintained, including unpatented and un-copyrighted information relating to Employer’s products, information concerning proposed new products or services, market feasibility studies, proposed or existing marketing techniques or plans and customer consumption data, usage or load data, and any other information that constitutes a trade secret, as such term as defined under New York law, in each case to the extent that Employer, as the context requires, derives economic value, actual or potential, from such information not being generally known to, and not being readily ascertainable by proper means by, other persons or entities who can obtain economic value from its disclosure or use.

 

12.                            NON-SOLICITATION OF EMPLOYEES

 

During the term of Employee’s employment and for one year thereafter, Employee will not cause or attempt to cause any employee of Employer to cease working for Employer.  However, this obligation shall not affect any responsibility Employee may have as an employee of Employer with respect to the bona fide hiring and firing of Employer’s personnel.

 

13.                            NON-SOLICITATION OF CUSTOMERS AND PROSPECTIVE CUSTOMERS

 

Employee will not, during the period of his employment and for a period ending one year after the termination of his employment for any reason, directly or indirectly, solicit the business of any customer for the purpose of, or with the intention of, selling or providing to such customer any product or service in competition with any product or service sold or provided by Employer during the 12 months immediately preceding the termination of Employee’s employment with Employer.

 

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14.                            NON-COMPETITION

 

Employee agrees that during his employment with Employer, Employee will not engage in any employment, business, or activity that is in any way competitive with the business or proposed business of Employer, and Employee will not assist any other person or organization in competing with Employer or in preparing to engage in competition with the business or proposed business of Employer. The provisions of this paragraph shall apply both during normal working hours and at all other times including, without limitation, nights, weekends and vacation time, while Employee is employed with Employer.

 

15.                           TERMINATION

 

Employee’s employment with Employer may be terminated as follows:

 

(a)                                                       Termination Without Just Cause.

 

(i)      Employer, in its sole discretion, may terminate Employee’s employment hereunder for any reason without Just Cause (as defined below), at any time, by giving written notice to Employee of such intent at least 30 days in advance of the effective date of termination; provided, during all that 30 day notice period, Employer, in its sole discretion, may modify, reduce or eliminate Employee’s duties hereunder.

 

(ii)     If Employer terminates Employee’s employment hereunder without Just Cause Employer shall continue to pay to Employee his then-current base salary, in accordance with customary payroll practices, plus accrued but unpaid vacation time, accrued but unpaid benefits (as described in Section 8(i) above) and reimbursement of all unpaid business expenses (in each case, as of the date of termination) (collectively the “Continued Benefits”) for a period of the greater of (a) six months; or (b) the remainder of the Initial Term or Subsequent Term, whichever the case may be (the “Continuation Period”).  Employee shall be entitled to continued participation in all medical and disability plans, to the extent such plans are provided by Employer, on the same terms and conditions as if his employment had not terminated until the expiration of the Continuation Period.  Further, Employee shall be entitled to exercise any unvested stock option rights and stock purchase rights granted to him and outstanding at the effective date of the termination of this Agreement.

 

(b)                              Termination With Just Cause.

 

(i)      Employer may immediately terminate Employee’s employment hereunder for Just Cause (as defined below) at any time upon delivery of written notice to Employee.

 

(ii)     For purposes of this Agreement, the phrase “Just Cause” means: (A) Employee’s material fraud, gross malfeasance, gross negligence, or willful misconduct done in bad faith, with respect to Employer’s business affairs; (B) Employee’s refusal or repeated failure to follow Employer’s established reasonable and lawful policies; (C) Employee’s material breach of this Agreement; or (D) Employee’s conviction of a felony or crime involving moral turpitude.  A termination of Employee for Just Cause based on clause (A), (B) or (C) of the preceding sentence will take effect 30 days after Employer gives written notice of its intent to terminate Employee’s

 

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employment and Employer’s description of the alleged cause, unless Employee, in the good-faith opinion of Employer, during such 30-day period, remedies the events or circumstances constituting Just Cause.

 

(iii)    If Employee’s employment hereunder is terminated by Employer for Just Cause, Employer will be required to pay to Employee only that portion of his Base Salary, accrued but unused vacation pay, and to the extent required under the terms of any benefit plan or this Agreement, the vested portion of any benefit under such plan, all as earned through the date of termination, including, without limitation, the right to exercise any vested stock option rights and stock purchase rights granted to him and outstanding at the effective date of the termination of this Agreement.

 

(c)                                                       For Good Reason.

 

(i)      Employee may terminate employment hereunder For Good Reason (as defined below), at any time, by giving written notice to Employer of such intent at least 30 days in advance of the effective date of termination.

 

(ii)     For purposes of this Agreement, the phrase “For Good Reason” means (A) any material reduction in Employee’s duties, responsibility, position or compensation, without the consent of Employee; (B) relocation of the Employee’s position from the Kirkland, Washington metropolitan area; (C) Employer’s material breach of this Agreement; or (D) Employer’s refusal or failure to establish and follow lawful policies and practices that are material to Employee’s position or job responsibilities.

 

(iii)    If Employee terminates employment hereunder For Good Reason, Employer shall continue to pay to Employee the Continued Benefits for the Continuation Period.  Employee shall be entitled to continued participation in all medical and disability plans, to the extent such plans are provided by Employer, at the same benefit level at which he was participating on the date of termination of the Employee’s employment until the expiration of the Continuation Period.  Further, Employee shall be entitled to exercise any unvested stock option rights and stock purchase rights granted to him and outstanding at the effective date of the termination of this Agreement.

 

(d)                                                      Without Good Reason.

 

(i)      Employee may terminate employment hereunder without Good Reason, at any time, by giving written notice to Employer of such intent at least 30 days in advance of the effective date of termination.

 

(ii)     If Employee terminates employment hereunder without Good Reason, Employer will be required to pay to Employee only that portion of his Base Salary, accrued but unused vacation pay, and to the extent required under the terms of any benefit plan or this Agreement, the vested portion of any benefit under such plan, all as earned through the date of termination, including, without limitation, the right to exercise any vested stock option rights and stock purchase rights granted to him and outstanding at the effective date of the termination of this Agreement.

 

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(e)              Disability and Death.

 

Employee’s employment hereunder will be terminated immediately upon his Disability (as defined below) or his death.  If Employee’s employment is terminated due to such disability or death, Employer will be required to pay to Employee or Employee’s estate, as the case may be, unrelated to any amounts that Employee may receive pursuant to Employer’s short-term and long-term disability plans or life insurance plans (as applicable), only his base salary and accrued but unpaid vacation pay, earned through the date of termination, and to the extent required under the terms of any benefit plan or this Agreement, the vested portion of any benefit under such plan.  Employee or Employee’s estate, as the case may be, will not by operation of this provision forfeit any rights in which Employee is vested at the time of Employee’s disability or death, including, without limitation, the right to exercise any vested stock option rights and stock purchase rights granted to him and outstanding at the effective date of the termination of this Agreement.

 

The term “Disability”  means Employee’s inability, due to physical or mental ill health, to perform the essential functions of his job, with or without a reasonable accommodation, for a period in excess of 120 consecutive days or in excess of 180 days in any consecutive 12 month period. In the event of any dispute under this paragraph, Employee shall submit to a physical and/or psychological examination by a licensed physician mutually satisfactory to Employer and Employee, the cost of such examination to be paid by Employer, and the determination of such physician shall be determinative.

 

16.       INJUNCTION

 

(i)         Should Employee at any time reveal, or threaten to reveal, any Confidential Information or Trade Secret of Employer, or during any restricted period engage, or threaten to engage, in any business in competition with that of Employer, or perform, or threaten to perform, any services for anyone engaged in such competitive business, or in any way violate, or threaten to violate, any of the provisions of this Agreement, Employer shall be entitled to an injunction restraining Employee from doing, or continuing to do, or performing any such acts; and Employee hereby consents to the issuance of such an injunction without any requirement that Employer post a bond.

 

(ii)        In the event that a proceeding is brought in equity to enforce the provisions of this Paragraph, Employee shall not argue as a defense that there is an adequate remedy at law, nor shall Employer be prevented from seeking any other remedies which may be available.

 

(iii)       The existence of any claim or cause of action by Employer against Employee, or by Employee against Employer, whether predicated upon this Agreement or otherwise, shall not constitute a defense to the enforcement by Employer of the foregoing restrictive covenants but shall be litigated separately.

 

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17.       ARBITRATION

 

(i)         In the event that there shall be a dispute (a “Dispute”) among the parties arising out of or relating to this Agreement, or the breach thereof, the parties agree that such dispute shall be resolved by final and binding arbitration before a single arbitrator in the metropolitan area in which the Employee was primarily performing services at the time the Dispute arose, administered by the American Arbitration Association (the “AAA”), in accordance with AAA’s Employment ADR Rules.  The arbitrator’s decision shall be final and binding upon the parties, and may be entered and enforced in any court of competent jurisdiction by either of the parties.  The arbitrator shall have the power to grant temporary, preliminary and permanent relief, including without limitation, injunctive relief and specific performance.

 

(ii)       The Company will pay the direct costs and expenses of the arbitration, including arbitration and arbitrator fees.  Except as otherwise provided by statute, Employee and the Company are responsible for their respective attorneys’ fees incurred in connection with enforcing this Agreement.  Employee and the Company agree that, to the extent permitted by law, the arbitrator may, in his or her discretion, award reasonable attorneys’ fees to the prevailing party.

 

18.       SECTION 409A COMPLIANCE

 

(i)         This Agreement is intended to comply with the requirements of Section 409A of the Code and regulations promulgated thereunder (“Section 409A”).  To the extent that any provision in this Agreement is ambiguous as to its compliance with Section 409A, the provision shall be read in such a manner so that no payments due under this Agreement shall be subject to an “additional tax” as defined in Section 409A(a)(1)(B) of the Code.  For purposes of Section 409A, each payment made under this Agreement shall be treated as a separate payment.  In no event may Employee, directly or indirectly, designate the calendar year of payment.  Notwithstanding anything contained herein to the contrary, Employee shall not be considered to have terminated employment with Employer for purposes of Section 15 hereof unless he would be considered to have incurred a “termination of employment” from Employer within the meaning of Treasury Regulation §1.409A-1(h)(1)(ii).

 

(ii)       Notwithstanding the foregoing, if necessary to comply with the restriction in Section 409A(a)(2)(B) of the Internal Revenue Code of 1986, as amended (the “Code”) concerning payments to “specified employees,” any payment on account of Employee’s separation from service that would otherwise be due hereunder within six months after such separation shall nonetheless be delayed until the first business day of the seventh month following Employee’s date of termination and the first such payment shall include the cumulative amount of any payments that would have been paid prior to such date if not for such restriction, together with interest on such cumulative amount during the period of such restriction at a rate, per annum, equal to the applicable federal short-term rate (compounded monthly) in effect under Section 1274(d) of the Code on the date of termination.  For purposes of Section 15 hereof, Employee shall be a “specified employee” for the 12-month period beginning on the first day of the fourth month following each “Identification Date” if he is a “key employee” (as defined in Section 416(i) of the Code without regard to Section

 

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416(i)(5) thereof) of Employer at any time during the 12-month period ending on the “Identification Date.”  For purposes of the foregoing, the Identification Date shall be December 31.”

 

(iii)       All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during Employee’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement is not subject to liquidation or exchange for another benefit.

 

19.       MISCELLANEOUS

 

If any provision of this Agreement shall be declared, by a court of competent jurisdiction, to be invalid, illegal or incapable of being enforced in whole or in part, the remaining conditions and provisions or portions thereof shall nevertheless remain in full force and effect and enforceable to the extent they are valid, legal and enforceable, and no provision shall be deemed dependent upon any covenant or provision so expressed herein.

 

The parties hereto have made no agreements, representations or warranties relating to the subject matter of this Agreement which are not set forth herein. The provisions of this Agreement may not be amended, supplemented, waived, or changed orally, but only in writing and signed by the party against whom enforcement of any such amendment, supplement, waiver, or modification is sought and making specific reference to this Agreement.

 

The rights, benefits, duties and obligations under this Agreement shall inure to, and be binding upon, the Employer, its successors and assigns, and upon the Employee and his legal representatives, heirs and legatees. This Agreement constitutes a personal service agreement, and the performance of the Employee’s obligations hereunder may not be transferred or assigned by the Employee.

 

The failure of either party to insist upon the strict performance of any of the terms, conditions and provisions of this Agreement shall not be construed as a waiver or relinquishment of future compliance therewith, and said terms, conditions and provisions shall remain in full force and effect. No waiver of any term or condition of this Agreement, on the part of either party, shall be effective for any purpose whatsoever unless such waiver is in writing and signed by such party.

 

This Agreement shall be construed and governed by the laws of the State of New York.

 

 

[The remainder of this page has been intentionally left blank.]

 

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IN WITNESS WHEREOF, this employment agreement is dated as of the 25th day of August 2011.

 

	
 
    	
On Behalf of Employer:
    
	
 
    	
 
    
	
 
    	
AUGME   TECHNOLOGIES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Paul R.   Arena
    	
 
    
	
 
    	
 
    	
  Paul R.   Arena, Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Eric Harber
    	
 
    
	
 
    	
 
    	
  Eric   Harber, Employee
    

 

12Exhibit 10.4

 

THIS UNSECURED PROMISSORY NOTE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS.  IT MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER SUCH ACT OR IN COMPLIANCE WITH AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS.  THE ISSUER OF THIS PROMISSORY NOTE MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS.

 

 

THIS UNSECURED PROMISSORY NOTE IS NOT ASSIGNABLE BY THE HOLDER WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY.

 

UNSECURED PROMISSORY NOTE

 

	
$1,000,000
    	
August 25, 2011
    

 

Augme Technologies, Inc., a Delaware corporation (the “Company”), hereby promises to pay to the order of Hipcricket, Inc., a Delaware corporation (the “Holder”), on the Maturity Date, the principal amount of One Million Dollars ($1,000,000) (the “Principal Amount”) in accordance with the provisions of this Unsecured Promissory Note (this “Note”).

 

1.         Interest.  Simple interest shall accrue on the unpaid principal balance of this Note at a fixed annual rate of three percent (3%) (the “Applicable Rate”).  Interest shall accrue daily at the Applicable Rate computed on the basis of a 365/366 day year and the actual number of days elapsed in any year from the date hereof.

 

2.         Maturity.  The outstanding principal balance of this Note shall be paid by the Company to the Holder, together with accrued and unpaid interest thereon, on the first to occur (the “Maturity Date”) of: (i) December 30, 2011, and (ii) five (5) business days following the consummation by the Company of an equity or equity-linked financing with gross proceeds to the Company of at least Seven Million Dollars ($7,000,000).

 

3.         Prepayment.  The Company may prepay the outstanding principal balance of this Note, in whole or in part, or pay any accrued interest hereon, at any time or from time to time, without premium or penalty.  Any such prepayments will be applied first to the payment of accrued but unpaid interest and then to the principal balance outstanding hereunder.

 

4.         Time and Manner of Payments.  All payments on account of indebtedness evidenced by this Note shall be made not later than 1 p.m. (New York time) on the day when due in lawful money of the United States, or, in the event such day is not a business day, on the next succeeding business day.  Such payments are to be made in immediately available funds at Holder’s office listed in Section 12, or at such other place as Holder may, from time to time, designate to the Company in writing in accordance with Section 12.

 

 

5.         Applicable Law; Jurisdiction; Waiver of Jury Trial.  THE COMPANY AND HOLDER AGREE THAT THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE COMPANY AND HOLDER HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICTS OF LAW PRINCIPLES.  THE VENUE FOR ANY DISPUTE OR ACTION ARISING PURSUANT TO THIS NOTE SHALL BE IN THE COURTS OF THE STATE OF NEW YORK, BOROUGH OF MANHATTAN, OR, IF IT HAS OR CAN ACQUIRE JURISDICTION, IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND EACH OF HOLDER AND THE COMPANY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF EACH SUCH COURT IN ANY SUCH DISPUTE OR ACTION, INCLUDING, BUT NOT LIMITED TO, THE IN PERSONAM AND SUBJECT MATTER JURISDICTION OF EACH SUCH COURT, WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO VENUE OR TO CONVENIENCE OF FORUM, AGREES THAT ALL CLAIMS IN RESPECT OF THE DISPUTE OR ACTION SHALL BE HEARD AND DETERMINED ONLY IN ANY SUCH COURT, AND AGREES NOT TO BRING ANY DISPUTE OR ACTION ARISING OUT OF OR RELATING TO THIS NOTE IN ANY OTHER COURT. EACH OF THE COMPANY AND HOLDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS NOTE AND ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

6.         Severability.  If any one or more of the provisions contained herein shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, and this Note shall be construed as if such invalid, illegal or unenforceable provision had never been included.

 

7.         Maximum Interest.  Notwithstanding any provision of this Note or any other Agreement between Company and Holder to the contrary, nothing herein shall require the Company to pay, or Holder to accept, interest in an amount which subjects the holder to any penalty or forfeiture under applicable law, and in no event shall the total of all charges payable hereunder (whether of interest or of such other charges which may or might be characterized as interest) exceed the maximum rate permitted to be charged under applicable law.  Should Holder receive any payment which is or would be in excess of that permitted to be charged under applicable law, such payment shall have been, and shall be deemed to have been, made in error and shall be promptly repaid to the Company.

 

8.         Events of Default.  The occurrence of any one of the following shall constitute an “Event of Default” hereunder:

 

(a)        the failure of the Company to pay any part of the principal of, or interest on, this Note when due, whether at stated maturity or by acceleration;

 

2

 

(b)        the Company shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, administrative receiver, administrator, custodian, trustee or liquidator of itself or of all or a substantial part of its property, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under any bankruptcy or similar law (as now or hereafter in effect), (iv) file a petition seeking to take advantage of any other law providing for the relief of debtors, or (v) fail to controvert in a timely manner, or acquiesce in writing to, any petition filed against it in an involuntary case under any bankruptcy or similar law;

 

(c)        a proceeding or case shall be commenced against the Company in any court of competent jurisdiction, seeking (i) the liquidation, reorganization, dissolution, winding up or composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, administrative receiver, administrator, custodian, liquidator or the like of it or of all or any substantial part of its assets, or (iii) similar relief in respect of it, under any bankruptcy or similar law; and such proceeding or case shall continue undismissed, or unstayed and in effect, for a period of sixty (60) days; and

 

(d)        a receiver, liquidator or trustee of the Company of a substantial part of the properties of either of them shall be appointed by court order and such order shall remain in effect for more than sixty (60) days; or the Company shall be adjudicated bankrupt or insolvent; all or substantially all of the assets of the Company or any material portion thereof is attached, seized, subject to a writ of distress warrant, or levied upon, or comes into the possession of any receiver, trustee, custodian or assignee for the benefit of creditors, or are otherwise taken possession of by a secured or unsecured creditor; and the same is not vacated, stayed, dismissed or set aside within sixty (60) days after the occurrence thereof.

 

9.         Remedies Upon an Event of Default.  Upon the occurrence and during the continuance of any Event of Default, Holder may, by written notice to the Company, declare all unpaid principal and accrued interest under this Note immediately due and payable, in which event the entire principal amount and accrued interest on this Note shall become immediately due and payable, and the holder of this Note shall have all of the rights and remedies conferred upon Holder of this Note pursuant to applicable law or equity.

 

10.       Amendments.  No amendment or waiver of any provision of this Note, nor consent to any departure by the Company therefrom, shall in any event be effective unless the same shall be in writing and shall be signed by the Holder (and in the case of any amendment, signed by the Company); any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

11.       Assignment.  Holder may not sell, transfer, assign, pledge or grant a security interest in this Note without the prior written consent of the Company, which consent may be granted or withheld by the Company in its sole discretion.

 

12.       Notice.  Any notice, demand, request, consent, approval, declaration, delivery, or other communication to be made pursuant to the provisions of this Note shall be in writing and shall be deemed to have been validly served, given or delivered (i) upon the earlier of actual receipt and three (3) business days after deposit in the United States Mail, registered or certified 

 

3

 

mail, return receipt requested, with proper postage prepaid, (ii) upon transmission, when sent by facsimile transmission (with confirmation of delivery by the sending device) or by delivery of a copy by personal delivery, (iii) one (1) business day after deposit with a reputable overnight courier with all charges prepaid or (iv) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address or facsimile number as follows:

 

	
(i)
    	
If to the   Company at:
    
	
 
    	
 
    
	
 
    	
Augme Technologies,   Inc.
    
	
 
    	
43 W 24th St.
    
	
 
    	
11th Floor
    
	
 
    	
New York, NY 10010
    
	
 
    	
Fax: (212) 710-9359
    
	
 
    	
Attn: CEO
    
	
 
    	
 
    
	
with   a copy to:
    
	
 
    	
 
    
	
 
    	
Richardson & Patel LLP
    
	
 
    	
750 Third Avenue, 9th Floor
    
	
 
    	
New York, New York 10017
    
	
 
    	
Fax: (212) 591-6898
    
	
 
    	
Attention: Kevin Friedmann, Esq.
    
	
 
    	
 
    
	
(ii)
    	
If to Holder at:
    
	
 
    	
 
    
	
 
    	
Hipcricket, Inc.
    
	
 
    	
11241 Slater Avenue NE,   Suite 201
    
	
 
    	
Kirkland, WA 98033
    
	
 
    	
Fax: (206) 464-0484
    
	
 
    	
Attn: CEO
    
	
 
    	
 
    
	
with a copy to (which shall not constitute   notice):
    
	
 
    	
 
    
	
 
    	
Vandeberg Johnson &   Gandara, LLP
    
	
 
    	
One Union Square, Suite   2424
    
	
 
    	
600 University Street
    
	
 
    	
Seattle, WA 98101-1192
    
	
 
    	
Fax: (206) 464-0484
    
	
 
    	
Attention: Daren Nitz,   Esq.
    

 

or to such other address (or facsimile number) as may be substituted by notice given as herein provided.  The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice.  Failure or delay in delivering copies of any notice, demand, request, consent, approval, declaration or other communication to any designated individual or entity above to receive copies shall in no way adversely affect the effectiveness of such notice, demand, request, consent, approval, declaration or other communication.

 

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- Remainder of Page Intentionally Left Blank-

 

[Signature Page Follows]

 

5

 

IN WITNESS WHEREOF, the Company and Holder have caused this Note to be duly executed and delivered as of the date first above written.

 

	
 
    	
Company:
    
	
 
    	
 
    
	
 
    	
AUGME   TECHNOLOGIES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Paul Arena
    	
 
    
	
 
    	
Name: Paul Arena
    
	
 
    	
Its:   Chief Executive Officer
    
	
 
    	
 
    
	
Holder:
    	
 
    
	
 
    	
 
    
	
HIPCRICKET, INC.
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Ivan Braiker
    	
 
    	
 
    
	
Name:   Ivan Braiker
    	
 
    
	
Its:   Chief Executive Officer

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