Exhibit 10.6
TERMINATION AGREEMENT
This Termination Agreement (this "Agreement") is made this 31st day of
December, 2003, by and between Xxxxxxx Kodak Company, a New Jersey corporation
("Kodak"), Maytag Corporation, a Delaware corporation ("Maytag"), Xxxxx-Narco,
Inc., a Delaware corporation, and wholly-owned subsidiary of Maytag Holdings,
Inc, which is a wholly-owned subsidiary of Maytag ("Dixie"), and Stitch Networks
Corporation, a Delaware corporation, which is a wholly-owned subsidiary of USA
Technologies, Inc. and successor in interest to x-Xxxx.xxx Corporation
("Stitch").
BACKGROUND
Kodak, Maytag, Xxxxx, and Stitch are parties to that certain Vending
Placement, Supply and Distribution Agreement dated December 1, 2000, the First
Amendment thereto dated as of December 18, 2000, and the Second Amendment
thereto dated as of June 20, 2001 (collectively, "Vending Agreement";
capitalized terms used without definition herein shall have the meanings
assigned to them in the Vending Agreement). Pursuant to the Vending Agreement,
the parties formed a strategic alliance to market and execute a large scale,
national vending program under which Stitch purchased all of its requirements of
Kodak consumer cameras and film from Kodak, and distributed and sold the Kodak
merchandise solely from vending machines purchased from Xxxxx. As more fully set
forth herein, the parties desire to terminate the Vending Agreement.
AGREEMENT
NOW THEREFORE, intending to be legally bound hereby, the parties hereto
agree as follows:
1. Termination. Subject to the terms and conditions set forth below,
the parties hereby terminate the Vending Agreement as of the date hereof. From
and after the date hereof, the Vending Agreement shall have no further force or
effect whatsoever and shall be null and void, other than any provisions of the
Vending Agreement which survive expiration or termination pursuant to Section 34
of the Vending Agreement or pursuant to the terms of this Agreement.
2. Kodak Payment. On the date hereof, Kodak has delivered to USA
Technologies, Inc. ("USA") the sum of $736,399 (the "Kodak Payment") and Stitch
hereby acknowledges that it has authorized USA to receive such sum on Stitch's
behalf. The Kodak Payment consists of a cash payment by Kodak to USA in the
amount of $674,649 and a credit of $61,750 representing the amount owed by
Stitch to Kodak in connection with payments made by Kodak to Stitch for removal
of Vending Machines. Stitch hereby represents and warrants that the Kodak
Payment represents payment in full by Kodak of all of the amounts due to U.S.
Bancorp Leasing & Financial by Stitch under Master Agreement dated May 22, 2001
by and between U.S. Bancorp and Stitch (the "Master Agreement") and that the
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funds borrowed by Stitch under the Master Agreement were used by Stitch to fund
the purchase from Xxxxx of the Vending Machines covered by the Vending
Agreement. The parties agree that the payment by Kodak of the Kodak Payment is
in full and final resolution of all payments due by Kodak and that no further
sums are or will be owed, either under the Master Agreement, the Vending
Agreement or the Termination Agreement.
3. Maytag, Xxxxx and Stitch Actions.
A. As of the date hereof, the vending machines covered by the
Vending Agreement ("Vending Machines") are located at the 284 locations
identified in Exhibit "A" attached hereto ("Locations"). Maytag and Xxxxx shall
use their reasonable best efforts to remove all of the Vending Machines from the
Locations within 180 days from the date hereof at their sole cost and expense
and shall purchase each Vending Machine from Stitch as described in Paragraph C
below. For each of those nineteen (19) Locations designated as legend type "C"
in Exhibit "A" whose Customer Agreements (as defined in Paragraph E below) do
not terminate within ninety (90) days of the date hereof, Stitch shall use its
best efforts to negotiate at its sole cost and expense the early termination of
the Customer Agreement during such ninety (90) day period. If any such Customer
Agreement is
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not so terminated by March 31, 2004, then Maytag and Xxxxx shall not be required
to remove such Vending Machine from the Location, and in such event, Stitch
shall, at its sole cost and expense, remove any such Vending Machine from the
Location upon termination of the related Customer Agreement.
B. Stitch shall be responsible for accurately informing Maytag and
Xxxxx of the location of each Vending Machine and will work with Maytag and
Xxxxx to the extent reasonably necessary in order to co-ordinate the removal by
Maytag and Xxxxx of each Vending Machine from each Location. If the Vending
Machine is not located at the place Stitch indicates, then Maytag and Xxxxx
shall be reimbursed by Stitch for all of its expenses in attempting to remove
the Vending Machine. If Stitch does not reimburse Xxxxx within thirty (30) days
of notice of any such expenses, Xxxxx shall have no further obligation to remove
any Vending Machines under this Agreement, and in such event, Stitch shall, at
its sole cost and expense, remove any remaining Vending Machines from the
Locations upon termination of the related Customer Agreement. Dixie's and
Maytag's obligation to remove the Vending Machines in this paragraph does not
begin until Stitch confirms in writing that Xxxxx has authority to remove the
Vending Machine and provides a name and address and phone number of the vendor.
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C. Within 15 days after the end of each calendar month, Maytag and
Xxxxx shall deliver to Stitch the sum of Three Hundred Dollars ($300) for each
and every Vending Machine removed by Xxxxx and Maytag from the Locations at any
time during the immediately preceding calendar month. Upon receipt of payment by
Stitch for a Vending Machine, the title to the Vending Machine shall pass from
Stitch to Maytag and Xxxxx, and Stitch shall thereafter upon request execute and
deliver any and all documents required to confirm such title in Maytag or Xxxxx.
Stitch shall not be responsible for the condition of the Vending Machines and
Maytag and Xxxxx agree to accept the Vending Machines in their "as is"
condition. Any and all product contained in the Vending Machine shall be removed
by Stitch prior to removal of each Vending Machine from the Location and shall
remain the property of Stitch.
D. The amount of $123,716 currently due from Stitch to Xxxxx and
which was incurred in connection with the purchase of Vending Machines is hereby
canceled and forgiven by Maytag and Xxxxx and no further sums are due in
connection therewith by Stitch.
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X. Xxxxxx hereby represents and warrants to Kodak, Maytag and Xxxxx
that: (i) each of Locations has entered into a placement agreement with Stitch
covering the installation, maintenance and use of the Vending Machines
("Customer Agreements"); (ii) each of the Customer Agreements authorizes Stitch
to remove the Vending Machine from the Locations; and (iii) except for the 38
locations designated as legend type "B" or "C" on Exhibit "A", all of these
Customer Agreements automatically terminate upon the termination of the Vending
Agreement.
F. Stitch hereby agrees to indemnify Maytag, Xxxxx and Kodak against
any claims by any person related to the removal of any Vending Machine from any
Location in accordance with the terms of this Agreement, including, without
limitation, any claim that such removal constitutes a breach of any Customer
Agreement. Such indemnification shall include reasonable attorneys fees whether
incurred in a third-party action or in an action to enforce this Agreement.
4. Kodak Release.
A. Kodak fully, irrevocably and forever releases and discharges each
of Maytag, Xxxxx-Narco, and Stitch, and each of their respective present and
former officers, directors, employees, representatives, affiliates,
subsidiaries,
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successors, assigns, and agents of any of them, in their individual and official
capacities (collectively referred to herein as the "Kodak Released Parties"), of
and from any and all claims, demands, causes of action, complaints, suits, sums
of money, compensation, commissions, fees, wages, income, damages, and
liabilities whatsoever, whether contingent or fixed, matured or unmatured,
vested or unvested, existing or hereafter accruing, known or unknown, and
whether based upon statute, federal or state law, contract, tort, common law, or
any other legal or equitable theory, which Kodak ever had, now has, or may or
can hereafter have, against the Kodak Released Parties for, based upon, by
reason of, or arising out of the Vending Agreement; provided, however, that the
foregoing release shall not apply with respect to any breaches by Maytag,
Xxxxx-Narco, and Stitch of any of their respective representations, warranties,
covenants and agreements under this Agreement or under the Vending Agreement
which survive termination pursuant to the terms of this Agreement.
B. Kodak represents and warrants to each of Maytag, Xxxxx-Narco, and
Stitch that it has not sold, assigned, transferred, conveyed or otherwise
disposed of any claim, demand or cause of action relating to any matter covered
by this Section 4.
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5. Maytag Release.
A. Maytag and Xxxxx-Narco, jointly and severally, hereby fully,
irrevocably and forever releases and discharges each of Kodak and Stitch, and
each of their respective present and former officers, directors, employees,
representatives, affiliates, subsidiaries, successors, assigns, and agents of
any of them, in their individual and official capacities (collectively referred
to herein as the "Maytag Released Parties"), of and from any and all claims,
demands, causes of action, complaints, suits, sums of money, compensation,
commissions, fees, wages, income, damages, and liabilities whatsoever, whether
contingent or fixed, matured or unmatured, vested or unvested, existing or
hereafter accruing, known or unknown, and whether based upon statute, federal or
state law, contract, tort, common law, or any other legal or equitable theory,
which Maytag or Xxxxx ever had, now has, or may or can hereafter have, against
the Maytag Released Parties for, based upon, by reason of, or arising out of the
Vending Agreement; provided, however, that the foregoing release shall not apply
with respect to any breaches by Kodak and Stitch of any of their respective
representations, warranties, covenants and agreements under this Agreement or
under the Vending Agreement which survive termination pursuant to the terms of
this Agreement.
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B. Each of Maytag and Xxxxx-Narco represents and warrants to each of
Kodak and Stitch that neither of them has sold, assigned, transferred, conveyed
or otherwise disposed of any claim, demand or cause of action relating to any
matter covered by this Section 5.
6. Stitch Release.
A. Stitch fully, irrevocably and forever releases and discharges
each of Kodak, Maytag, and Xxxxx-Narco, and each of their respective present and
former officers, directors, employees, representatives, affiliates,
subsidiaries, successors, assigns, and agents of any of them, in their
individual and official capacities (collectively referred to herein as the
"Stitch Released Parties"), of and from any and all claims, demands, causes of
action, complaints, suits, sums of money, compensation, commissions, fees,
wages, income, damages, and liabilities whatsoever, whether contingent or fixed,
matured or unmatured, vested or unvested, existing or hereafter accruing, known
or unknown, and whether based upon statute, federal or state law, contract,
tort, common law, or any other legal or equitable theory, which Stitch ever had,
now has, or may or can hereafter have, against the Stitch Released Parties for,
based upon, by reason of, or arising out of the Vending Agreement; provided,
however, that the foregoing release shall not apply with respect to any breaches
by Kodak, Maytag, and Xxxxx-Narco of any of their respective representations,
warranties, covenants and agreements under this Agreement or under the Vending
Agreement which survive termination pursuant to the terms of this Agreement.
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B. Stitch represents and warrants to each of Kodak, Maytag, and
Xxxxx-Narco that it has not sold, assigned, transferred, conveyed or otherwise
disposed of any claim, demand or cause of action relating to any matter covered
by this Section 6.
C. Stitch represents and warrants to each of Kodak, Maytag, and
Xxxxx-Narco that it is the successor in interest to x-Xxxx.xxx Corporation and
has full authority to enter into and perform this Agreement.
D. During period beginning of the date hereof and ending on the
Final Removal Date (as defined in paragraph E below), Stitch shall use its best
efforts to continue to provide, or cause to be provided, stocking services for
Kodak Merchandise with respect to each Vending Machine until such Vending
Machine is removed from its Location.
E. As of the date the last Vending Machine is removed from its
Location by Stitch (the "Final Removal Date"), all unused Kodak Merchandise in
Stitch's inventory as of such date may be returned to Kodak in accordance with
Kodak's standard return procedures as stated in Sections 11.3 through 11.5 of
the Vending Agreement. All Kodak trademark and other Kodak identification must
be removed from each Vending Machine as of the date such Vending Machine is
removed from its Location.
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F. Kodak and Stitch agree that Section 9.2 of the Vending Agreement
shall apply with respect the period beginning on the date hereof and ending on
the Final Removal Date. Stitch shall continue to deliver to Kodak a
Reconciliation Statement (as defined in Section 9.2 of the Vending Agreement)
with respect to each month closing in such period; provided, however, that if
the Final Removal Date is not the last day of a month then Stitch shall also
deliver to Kodak within thirty (30) days of the Final Removal Date a
Reconciliation Statement with respect to the period beginning on the first day
of such month and ending on the Final Removal Date. Kodak and Stitch further
agree that (i) in the event the e-Vend Purchase Price exceeds the Dealer Cost,
e-Vend shall forward to Kodak with the related Reconciliation Statement a check
in an amount equal to the amount by which the e-Vend Purchase Price exceeds the
Dealer Cost and (ii) in the event the Dealer Cost exceeds the e-Vend Purchase
Price, Kodak shall forward to e-Vend a check in an amount equal to the amount of
the excess.
7. Entire Agreement. This Agreement constitutes the entire
understanding and agreement between the parties hereto with respect to the
transactions contemplated herein, supersedes all prior and contemporaneous
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties, and there have been no warranties, representations or
promises, written or oral, made by any of the parties hereto except as expressly
set forth herein. The titles and captions of the Sections of this Agreement are
for the convenience of the parties only, and shall not affect, enlarge, or
modify the terms and conditions of this Agreement, and shall not be considered
in any manner whatsoever in the interpretation, intent, or meaning of this
Agreement.
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8. Binding Agreement. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, as well as their respective heirs, personal
representatives, successors and assigns.
9. Waiver, Modification, etc.. Any party to this Agreement may waive
any of the terms or conditions of this Agreement or agree to an amendment or
modification to this Agreement by an agreement in writing executed in the same
manner (but not necessarily by the same persons) as this Agreement. No amendment
or modification of this Agreement shall be binding unless in writing executed by
the party amending or waiving such term or condition of this Agreement. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof (whether or not similar), nor
shall any waiver constitute a continuing waiver unless otherwise expressly
provided.
10. Notice. Any notice or other communications required or permitted
hereunder shall be sufficiently given if sent by certified mail, return receipt
requested, postage prepaid, addressed as follows:
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If to Stitch:
Stitch Networks Corporation
000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn. Xxxxxxx X. Xxxxxxx,
President
If to Kodak:
Xxxxxxx Kodak Company
0000 Xxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn. Xxxx Xxxxxx, Director of Capture Marketing
with a copy to:
Xxxxxxx Kodak Company
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attn. Legal Department
If to Maytag or Xxxxx-Narco:
Maytag Corporation Law Department
000 X. 0xx Xxxxxx Xxxxx
Xxxxxx, Xxxx 00000
Attn: General Counsel
11. Governing Law. This Agreement shall be construed in accordance with
and shall be governed by the laws of the State of New York without regard to any
conflicts of law rules which would require the application of the laws of any
other jurisdiction.
12. Consent to Jurisdiction. Each of the parties hereto irrevocably
consents to the jurisdiction of the state courts of New York and the United
States District Court for the Western District of New York with respect to all
matters arising from this Agreement, for that limited purpose only, and each
Party waives any objections to venue in such courts and agrees that process may
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be served in the manner provided herein for giving of notices or otherwise as
allowed by the applicable court; provided, however, that each Party agrees not
to commence any action, suit or proceeding in state court unless the United
States District Court for the Western District of New York lacks subject matter
jurisdiction with respect to the dispute or otherwise is unable to hear the
matter.
13. Arbitration. Any dispute arising out of or relating to this
Agreement shall be settled by arbitration before a panel of three independent
and impartial arbitrators (the "Arbitration Panel") in accordance with the then
current commercial arbitration rules of the American Arbitration Association
("AAA"). Each party to this Agreement who is party to such dispute shall select
one member of the Arbitration Panel. If there are only two parties to such
dispute, the third member of the Arbitration Panel shall be jointly selected by
the other members of the Arbitration Panel. In no case shall there be any ex
parte communications between any party hereto and any member of the Arbitration
Panel regarding any dispute between the parties. The Arbitration Panel shall not
have the authority to make any ruling, finding or award that does not conform to
the terms and conditions of this Agreement. The site of any arbitration brought
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pursuant to this Agreement shall be at a location to be mutually agreed upon by
the parties to such arbitration. All discovery activities shall be completed
within 60 days after the initial meeting of the Arbitration Panel. The award of
the Arbitration Panel shall be (i) final and binding upon the parties, (ii)
issued within 90 days after the initial meeting of the Arbitration Panel, (iii)
in writing and (iv) set forth the factual and legal bases for such award. The
Arbitration Panel is to award attorneys' fees and costs of the arbitration to
the prevailing party. Judgment on the award rendered by the Arbitration Panel
may be entered and enforced in any court having jurisdiction thereof.
14. Counterparts. This Agreement may be signed in two or more
counterparts which counterparts shall constitute a single, integrated agreement
binding upon all the signatories to such counterparts.
15. Expenses. Except as specifically provided otherwise herein, each
party hereto shall pay its own expenses arising from this Agreement and the
transactions contemplated hereby, including, without limitation, all legal and
accounting fees and disbursements; provided, however, that nothing herein shall
limit or otherwise modify any right of the parties to recover such expenses from
the other in the event any party hereto breaches this Agreement.
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16. Further Assurances. Each of the parties hereto shall hereafter
execute and deliver such further documents and instruments and do such further
acts and things as may be required or useful to carry out the intent and purpose
of this Agreement and as are not inconsistent with the terms hereof.
17. Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties hereto, have executed
and delivered this Agreement the day and year above written.
XXXXXXX KODAK COMPANY
Attest: By: /s/ Xxxxxx Quindler
-------------------------------- ---------------------------------
Name: Xxxxxx Quindler
-------------------------------------
Title: VP GM WW Sales & Ops
------------------------------------
MAYTAG CORPORATION
Attest: By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------- ---------------------------------
Name: Xxxxx X. Xxxxxxxx
-------------------------------------
Title: Sr. VP
------------------------------------
XXXXX-NARCO, INC.
Attest: By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------- ---------------------------------
Name: Xxxxx X. Xxxxxxxx
-------------------------------------
Title: Asst. Secretary
------------------------------------
STITCH NETWORKS CORPORATION
Attest: By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------- ---------------------------------
Name: Xxxxxxx X. Xxxxxxx
-------------------------------------
Title: President
------------------------------------
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