USA Technologies, Inc.
000 Xxxxx Xxxxxx
Xxxxx, Xxxxxxxxxxxx 00000
December 17, 1996
Xx. Xxxxxx X. Xxxxxxxx, C.P.A.
0 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
RE: Separation And Consulting Agreement
Dear Ed:
This will confirm your resignation as Chief Financial Officer of the
Company effective at the close of business on November 30, 1996. This letter
also sets forth and confirms the various agreements we have reached concerning
your separation from the Company as well as the terms of a consulting
arrangement.
1. Consulting Arrangement. Effective December 1, 1996, you shall no longer
be an employee or officer of the Company. From and after December 1,
1996 and through February 28, 1997, you shall act as a consultant to
the Company. In this capacity, under my direction, you shall assist the
Company to maintain the daily operations of the financial function,
including all current activities, as well as special projects such as
the inventory system, business plan projections and physical inventory.
You shall be present at the offices of the Company at least 25 hours
per week. You shall be compensated by the Company for your consulting
work at the rate of $50.00 per hour, to be billed and paid weekly. In
addition, your existing medical insurance will be provided to you by
the Company at no cost to you during the consulting period. Upon the
termination of the consulting period, and if permitted by law and the
Company's medical plan, you may elect to maintain your health insurance
coverage at your sole cost and expense. As an independent contractor to
the Company, you acknowledge that you (and not the Company) shall be
responsible for payment of all applicable taxes on your compensation.
2. Outstanding Options. On April 29, 1996, the Company issued to you
options to acquire up to 50,000 shares of Common Stock of the Company
at $.65 per share. As originally stated, the options do not vest until
June 30, 1997. We have agreed, however, that effective immediately, an
aggregate of 21,000 options shall be fully vested with the balance of
29,000 options being forfeited by you and considered null and void. The
21,000 options which are vested must be exercised by you on or before
November 30, 2001.
3. Rule 144. You acknowledge that the shares of Common Stock currently
owned by you can only be sold by you in compliance with all of the
provisions of Rule 144 promulgated under the Securities Act of 1993, as
amended, and you agree to comply
December 17, 1996
Xx. Xxxxxx X. Xxxxxxxx, C.P.A.
Page 2
with all of the requirements thereof. You shall not sell or offer to
sell any securities whatsoever of the Company during the consulting
period referred to in Section 1 without prior written notice to the
Company. In the event that you so notify the Company, the Company may,
at its sole discretion, terminate the consulting arrangement described
in Section 1 above and have no further obligation thereunder; provided
that all of the other terms and conditions of this letter other than
Section 1 hereof shall survive any such termination and shall remain in
full force and effect; and provided, further, however, and if permitted
by law and the Company's medical plan, you may elect to maintain your
health insurance coverage at your sole cost and expense following any
such termination of the consulting arrangement.
4. Xxxxxxxx General Release. You agree, intending to be legally bound, to
voluntarily and forever release and discharge the Company, as well as
all of its past, present and future officers, directors, employees,
shareholders and agents and their respective successors and assigns
(collectively "Releasees"), jointly and severally, from any and all
actions, charges, causes of action or claims of any kind (collectively,
"claims"), known or unknown, suspected or claimed, which you, your
heirs, agents, successors or assigns ever had, now have or hereafter
may have against Releasees arising heretofore out of any matter,
occurrence or event existing or occurring prior to your execution
hereof, including, without limitation:
(a) Any claims relating to or arising out of your employment with
and/or separation of employment with the Company;
(b) Any claims for unpaid or withheld wages, severance, stock
options, benefits, bonuses and/or other compensation of any
kind; or
(c) Any claims of discrimination and/or harassment based on age,
sex, race, religion, color, creed, disability, handicap,
citizenship, national origin, sexual preference or any other
factor prohibited by Federal, state or local law or ordinance,
common law or administrative regulations (such as the Age
Discrimination in Employment Act, the Americans With
Disabilities Act, Title VII of the Civil Rights Act of 1964,
the Employee Retirement Income Security Act and the
Pennsylvania Human Relations Act), and/or any other statutory
or common law claims, now existing or hereinafter recognized,
including, but not limited to, breach of contract, quasi-
contract, breach of covenant of good faith and fair dealing,
detrimental reliance, libel, slander, fraud, wrongful
discharge, promissory estoppel, equitable estoppel and
intentional or negligent misrepresentation.
In addition, you covenant and agree to never, individually or with any
other person or in any way, commence, aid in any fashion, prosecute or
cause or permit to be
December 17, 1996
Xx. Xxxxxx X. Xxxxxxxx, C.P.A.
Page 3
commenced against the Company or any Releasee any action, obligation,
damage, or liability that is the subject matter of this Section 4.
5. A. Company General Release. The Company agrees, intending to be legally
bound, to voluntarily and forever release and discharge you, as well as
all of your heirs, personal representatives, successors and assigns
(collectively "Releasees"), jointly and severally, from any and all
actions, charges, causes of action or claims of any kind , known or
unknown, suspected or claimed, which the Company ever had, now has or
hereafter may have against Releasees arising heretofore out of any
matter, occurrence or event existing or occurring prior to the
Company's execution hereof. In addition, the Company covenants and
agrees to never, by itself or with any other person or in any way,
commence, aid in any fashion, prosecute or cause or permit to be
commenced against any Releasee any action, obligation, damage, or
liability that is the subject matter of this Section 5.
B. Company Indemnification . This will confirm that notwithstanding
anything else contained in this letter, you shall continue to be
indemnified under the Company's Bylaws to the fullest extent provided
or to be provided from time to time thereunder to officers of the
Company.
6. Future Actions. You agree not to take any actions which are
specifically intended to damage the business interests of the Company
or which reflect negatively on the Company or its employees, directors,
shareholders or agents, including, but not limited to, contacting the
Company's agents, customers, employees (past, present or future to the
extent you know them to be related to the Company), or using documents
or other data obtained while in the employ of the Company, in a manner
that interferes with or damages the Company's reputation, purpose, or
employee relations.
7. Termination of Employment Agreement. It is agreed that effective
December 1, 1996, the Employment And Non-Competition Agreement between
you and the Company dated July 1, 1993, as well as the First Amendment
thereto dated April 29, 1996 are hereby terminated and are of no
further force and effect and shall be completely superseded and
replaced by this letter.
8. Non-disclosure. From and after the date hereof, and except in
connection with your consulting duties under Section 1, you shall not
directly or indirectly, at any time from and after the date hereof,
make any use of, exploit, disclose, or divulge to any other person,
firm or corporation, any trade or business secret, customer or supplier
information, documents, know-how, data, marketing information, method
or means, or any other confidential or proprietary information (i.e.,
not already otherwise disseminated to or available to the public)
concerning the business or policies of the Company, that you learned as
a result of, in connection with, through your employment with, or
through your affiliation with the Company.
December 17, 1996
Xx. Xxxxxx X. Xxxxxxxx, C.P.A.
Page 4
9. Severability. Should any provision of this letter be held invalid or
illegal, such illegality shall not invalidate the whole of this letter
but rather, the letter shall be construed as if it did not contain the
illegal part, and the rights and obligations of the parties shall be
construed and enforced accordingly.
10. Merger Clause. This letter contains the complete understanding and
agreement between the parties hereto and supersedes any and all prior
and contemporaneous agreements, understandings, negotiations and
discussions between the parties, oral or written, express or implied
including but not limited to your Employment And Non-Competition
Agreement referred to in Section 7.
11. Choice of Law. This letter has been executed in the Commonwealth of
Pennsylvania and shall be construed in accordance with the laws of the
Commonwealth of Pennsylvania without regard to its conflict of law
rules.
12. Revocation. You have twenty-one (21) days within which to consider this
letter. If you sign this letter, you will retain the right to revoke it
for seven (7) days. To revoke this letter, you must send a certified
letter to my attention. The letter must be postmarked within seven (7)
days of your execution of this letter. If you elect to so revoke this
letter, all of the terms and conditions hereof shall become void and of
no further force or effect whatsoever.
December 17, 1996
Xx. Xxxxxx X. Xxxxxxxx, C.P.A.
Page 5
Ed, please indicate your agreement with this letter by signing and
dating this letter below where indicated and returning it to me.
Sincerely,
USA TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
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Xxxxxx X. Xxxxxx, Xx., Chief Executive Officer
UNDERSTOOD AND AGREED:
/s/ Xxxxxx X. Xxxxxxxx
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XXXXXX X. XXXXXXXX
Date: December 17, 1996
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