Document:

usat_Ex10_3

		
			Exhibit 10.3
		

		
			 
		

		
			 
		

		
			EMPLOYMENT, NON-INTERFERENCE, NON-SOLICITATION, NON-COMPETITION AND INVENTION ASSIGNMENT AGREEMENT
		

		
			 
		

		
			Agreement made 9th this day of November, 2017, by and between MANDEEP ARORA ("Arora"), and USA TECHNOLOGIES, INC., a Pennsylvania corporation ("USAT").
		

		
			 
		

		
			BACKGROUND
		

		
			 
		

		
			Arora was a founder, Chief Executive Officer, and stockholder of Cantaloupe Systems, Inc., a Delaware corporation (the “Company”).
		

		
			 
		

		
			Pursuant to an Agreement and Plan of Merger dated of even date herewith by and between USAT, the Company, and certain other parties (the “Merger Agreement”), the Company has been acquired by USAT as of the date hereof through a merger, and the Company has become a wholly owned subsidiary of USAT.
		

		
			 
		

		
			USAT desires to employ Arora as an executive officer because of, among other matters, the valuable knowledge of the business of the Company by Arora, and the decreased value of the business of USAT and the Company that would result if Arora would divulge certain confidential information and compete in the business conducted by Company.
		

		
			 
		

		
			As more fully set forth herein, Arora has become an executive officer of USAT, and Arora has agreed that he will be subject to certain covenants and restrictions following the date hereof.
		

		
			 
		

		
			
		

		
			

		 

		

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			AGREEMENT
		

		
			 
		

		
			NOW, THEREFORE, in consideration of the covenants set forth herein, and intending to be legally bound hereby, the parties agree as follows:
		

		
			 
		

		
			1.  Employment.
		

		
			 
		

		
			(a)       USAT shall employ Arora as Chief Product Officer commencing on November 9, 2017 and continuing through November 8, 2018 (the “Employment Period”), and Arora accepts such employment. Unless terminated by either party hereto upon at least 90-days’ notice prior to the end of the original Employment Period ending November 8, 2018, or prior to the end of any one-year extension of the Employment Period, the Employment Period shall not be terminated, and shall automatically continue in full force and effect for consecutive one-year periods.
		

		
			 
		

		
			(b)       During the Employment Period, Arora shall devote his full time, energy, skills, and attention to the business of USAT, and shall not be engaged or employed in any other activity whatsoever that competes with USAT’s or the Company’s business, nor take any action on behalf of or otherwise assist USAT’s or the Company’s competitors. Arora shall disclose to USAT Arora’s membership on the board of directors of any entity as of the date of this Agreement, and shall obtain prior approval from USAT before serving as a board member for any other entity during the Employment Period.
		

		
			 
		

		
			
		

		
			

		 

		

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			(c)       During the Employment Period, Arora shall perform and discharge well and faithfully such duties for USAT as shall be necessary or as otherwise may be directed by USAT or by the Chief Executive Officer of USAT, and shall comply with the written terms, conditions, policies, and procedures made available to employees of USAT.
		

		
			 
		

		
			(d)       Nothing contained in this Agreement shall prohibit Arora from (i) participating in the “Permitted Activities,” described below as long as the Permitted Activities do not involve activities or conduct which are in violation of Arora’s duties under Sections 5 and 6 of this Agreement; (ii) investing his personal assets in businesses which do not compete with USAT or the Company, in which his participation is solely that of a passive investor; (iii) serving as a member of boards of directors, boards of trustees, or other governing bodies of any organization, provided that USAT approves such board or governing body membership in advance; or (iv) participating in trade associations, charitable, civic and any similar activities of a not-for-profit, philanthropic or eleemosynary nature; or from attending educational events or classes.
		

		
			 
		

		
			(e)       “Permitted Activities” shall mean: (i) acting as an advisor and/or investor with Geegah, LLC, which is owned by Dr. Amit Lal, or its affiliates; (ii) developing and working with companies in the field of ultrasonic MEMs based biometric sensor
		

		
			 
		

		
			
		

		
			

		 

		

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			(finger print sensor) that may be incorporated into cashless payments, credit cards, debit cards, smartphones, laptops, tablets, automobiles, IOT devices, and other consumer applications; (iii) licensing or manufacturing such biometric sensor technology; (iv) advising or participating as an advisor, manager, member or trustee of Passion Fruit Holdings LLC (a family holding company) or its affiliates; (v) acting as a director of Reuzel Inc.; or (vi) acting as an advisor or director of Accel Robotics Corporation. For avoidance of doubt, Permitted Activities shall not include or refer to any activities that are in competition with any business activity conducted by USAT or the Company at any time from the date of this Agreement up until the date of Arora’s separation from USAT’s employment, including but not limited to, delivering services or products to unattended retail locations, and including any production, promotion, marketing, or sales activities relating thereto. Any participation by Arora in such Permitted Activities shall not interfere in any manner whatsoever with the performance of his duties as Chief Product Officer of USAT.  Permitted activities are not considered to be performed in connection with Arora’s employment with USAT.
		

		
			 
		

		
			2.  Compensation and Benefits.
		

		
			 
		

		
			(a)       In consideration of his services rendered, USAT shall pay to Arora, effective as of November 9, 2017, an “Annual Base Salary” of $280,000 per year during the Employment Period,
		

		
			 
		

		
			
		

		
			

		 

		

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			subject to any withholding required by law. Arora’s Annual Base Salary may be increased (and not decreased) from time to time in the discretion of the Board of Directors of USAT.
		

		
			 
		

		
			(b)       In addition to the Annual Base Salary, Arora shall be eligible to receive such bonus or bonuses as the Board of Directors of USAT may, in their discretion, pay or award to Arora from time to time based upon his performance and/or the performance of USAT. All such bonuses in this regard may be made in cash, common stock or other equity of USAT.
		

		
			 
		

		
			(c)       Arora shall also participate in and shall be eligible for compensation under the Short-Term Cash Incentive Plan (the “STI Plan”) and in the Long-Term Stock Incentive Plan (the “LTI Stock Plan”) established by the Board of Directors for fiscal year 2018 and each fiscal year during the Employment Period for the executive officers of USAT. The target bonuses and awards for Arora under the STI Plan and the LTI Stock Plan shall be approved by the Board of Directors and shall be based upon his Annual Base Salary.
		

		
			 
		

		
			(d)       For fiscal year 2018, Arora’s STI Plan and LTI Stock Plan awards would be pro-rated from November 9, 2017 through June 30, 2018. If the year-over-year percentage target goals would be achieved under the LTI Stock Plan for the 2018 fiscal year, Arora would earn an award of shares under the LTI Stock Plan with a value equal to 100% of his Annual Base Salary (subject to proration). If
		

		
			 
		

		
			
		

		
			

		 

		

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			the target goals under the STI Plan would be achieved for the 2018 fiscal year, Arora would earn a cash bonus equal to 40% of his Annual Base Salary (subject to proration).
		

		
			 
		

		
			(e)       Retention Bonus.  In addition to the compensation described above, Arora shall be eligible to receive a cash bonus in the aggregate amount of up to $420,000 (the “Retention Bonus”). The Retention Bonus shall only be earned by Arora as follows: one-half thereof ($210,000) if he remains employed with USAT on the first annual anniversary of the date of this Agreement; and one-half thereof ($210,000) if he remains employed with USAT on the second annual anniversary of this Agreement. There are to be no partial payments of the two Retention Bonus payments referred to in the preceding sentence. The portion of the Retention Bonus that may be earned by Arora shall be paid to Arora by USAT at the time of the first employee payroll of USAT occurring after the applicable date on which the Retention Bonus has been earned by Arora. Notwithstanding the prior sentence, (i) if Arora is terminated by USAT without Cause, as defined below, (ii) if Arora terminates for Good Reason, as defined below, or (iii) if this Agreement is not renewed by USAT under Section 1(a); all of the then unearned Retention Bonus, if any, shall be deemed to have been earned by Arora, and shall be paid by USAT to Arora within ten (10) days following the date of such termination. It is
		

		
			 
		

		
			
		

		
			

		 

		

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			understood and agreed that the Retention Bonus shall be subject to and reduced by any withholding required under applicable laws.
		

		
			 
		

		
			(f)       Arora shall be entitled to be reimbursed by USAT for all necessary expenses reasonably incurred by Arora in connection with the discharge of his employment duties hereunder, consistent with California Labor Code Section 2802. Arora shall reasonably document all requests for expense reimbursements.
		

		
			 
		

		
			(g)       During the Employment Period, Arora shall be entitled to participate in and be covered by all standard fringe and employee benefits made available to other employees of USAT.  During the Employment Period, Arora shall be entitled to 20 days paid time off (“PTO”) each full calendar year consistent with other employees of USAT. Arora is not entitled to any accrued or unused vacation pay from his employment with the Company prior to the date of this Agreement. Any PTO shall be taken at the reasonable and mutual convenience of USAT and Arora. Holidays shall be provided in accordance with USAT policy, as in effect from time to time.
		

		
			 
		

		
			(h)       Arora acknowledges that the above compensation and the purchase of his stock of the Company pursuant to the Merger Agreement are sufficient consideration for his entering into this Agreement.
		

		
			
		

		
			

		 

		

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			3.  Termination.
		

		
			 
		

		
			 (a)       Arora’s employment hereunder may be terminated by USAT or Arora, as applicable, only under the following circumstances:
		

		
			 
		

		
			(i)       Arora’s employment hereunder shall terminate upon Arora’s death.
		

		
			 
		

		
			(ii)      Disability.  Arora’s employment hereunder shall terminate if Arora is no longer able to competently and effectively perform his job duties due to disability (consistent with any and all applicable federal and state disability and leave laws). If Arora incurs a Disability, USAT may give Arora written notice of its intention to terminate Arora’s employment.  In that event, Arora’s employment with USAT shall terminate, effective on the later of the thirtieth (30th) day after receipt of such notice by Arora or the date specified in such notice; provided that within the thirty (30) day period following receipt of such notice, Arora shall not have returned to full-time performance of Arora’s duties hereunder. “Disability” shall mean Arora’s inability to engage in his job duties existing pursuant to this Agreement by reason of a medically determinable physical or mental impairment that can be expected to result in death or that can be expected to last for a continuous period of not less than six (6) months.
		

		
			 
		

		
			(iii)      Termination for Cause.  USAT may terminate Arora’s employment for “Cause,” as defined below.
		

		
			 
		

		
			
		

		
			

		 

		

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			(iv)      Termination without Cause.  USAT may terminate Arora’s employment without Cause.
		

		
			 
		

		
			(v)       Arora may resign from Arora’s employment for “Good Reason,” as defined below.
		

		
			 
		

		
			(vi)      Arora may resign from Arora’s employment without Good Reason.
		

		
			 
		

		
			(b)       Notice of Termination.  Any termination of Arora’s employment by USAT or by Arora under this Section 3 (other than a termination pursuant to Section 3(a)(i) or (ii) above) shall be communicated by a written notice to the other party hereto (a “Notice of Termination”): (i) indicating the specific termination provision in this Agreement relied upon, and (ii) except with respect to a termination pursuant to Sections 3(a)(iv) or (vi), setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Arora’s employment under the provision so indicated, and (iii) specifying a Date of Termination which, if submitted by Arora, shall be at least thirty (30) days following the date of such notice; provided, however, that a Notice of Termination delivered by USAT pursuant to Section 3(a)(ii) shall not be required to specify a Date of Termination, in which case the Date of Termination shall be determined pursuant to Section 3(a)(ii); and provided, further, that in the event that Arora delivers a Notice of Termination to USAT, USAT may, in its sole discretion, accelerate the Date of Termination to any date
		

		
			 
		

		
			
		

		
			

		 

		

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			that occurs following the date of USAT’s receipt of such Notice of Termination (even if such date is prior to the date specified in such Notice of Termination).  A Notice of Termination submitted by USAT (other than a Notice of Termination under Section 3(a)(ii) above) may provide for a Date of Termination on the date Arora receives the Notice of Termination, or any date thereafter elected by USAT in its sole discretion.  The failure by USAT or Arora to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause or Good Reason shall not waive any right of USAT or Arora hereunder or preclude USAT or Arora from asserting such fact or circumstance in enforcing USAT’s or Arora’s rights hereunder.
		

		
			 
		

		
			(c)       USAT shall have “Cause” to terminate Arora’s employment hereunder upon: (i) Arora’s conviction or Arora’s entry of a guilty plea or plea of no contest to any felony or to any other crime involving moral turpitude; or (ii) Arora materially breaches any term, condition, representation, or warranty of this Agreement; or (iii) Arora willfully abandons his duties hereunder, unless arising from Arora’s Disability; or (iv) Arora’s fraud, gross malfeasance or willful misconduct with respect to USAT’s business; or (v) any willful violation by Arora of any law, rule or regulation, which violation results or could reasonably be expected to result in material harm to the business or reputation of USAT; or (vi) any intentional misapplication by Arora of USAT’s
		

		
			 
		

		
			
		

		
			

		 

		

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			funds; or (vii) any willful failure by Arora to obey the reasonable and lawful instructions from USAT’s Chief Executive Officer or the Board made within the scope of the Chief Executive Officer’s or Board’s respective authority in a manner that is both material in nature and detrimental to USAT; and which, in the case of clauses (ii) and (vii), continues beyond thirty (30) days after USAT has provided Arora written notice of such failure or breach.  Upon such termination, neither party hereto shall have any further duties or obligations except as provided in this Section; however, that Arora's obligations under Sections 5 and 6 hereof shall survive any such termination.
		

		
			 
		

		
			(d)       Arora shall have “Good Reason” to terminate Arora’s employment hereunder within ninety (90) days after the initial occurrence of one or more of the following conditions: (i) a material diminution in Arora’s authority, duties, or responsibilities, as described herein; (ii) a material diminution in Arora’s Annual Base Salary or if USAT maintains a LTI and STI plan and Arora’s performance level bonus is decreased and the percentage of decrease is materially higher than the decrease for other USAT C-level executives (other than the Chief Executive Officer and the Chief Financial Officer); (iii) any other action or inaction that constitutes a material breach of this Agreement by USAT; (iv) a relocation of Arora’s principal office and place of business to a location more than thirty (30) miles from Arora’s
		

		
			 
		

		
			
		

		
			

		 

		

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			current residence in San Francisco, California and which, in the case of any of the foregoing, continues beyond thirty (30) days after Arora has provided USAT written notice that Arora believes in good faith that such condition giving rise to such claim of Good Reason has occurred, so long as such notice is provided within ninety (90) days after the initial existence of such condition.
		

		
			 
		

		
			(e)       “Date of Termination” shall mean (i) if Arora’s employment is terminated due to Arora’s death, the date of Arora’s death; (ii) if Arora’s employment is terminated due to Arora’s Disability, the date determined pursuant to Section 3(a)(ii); or (iii) if Arora’s employment is terminated pursuant to Section 3(a)(iii)-(vi) either the date indicated in the Notice of Termination or the date specified by USAT pursuant to Section 3(b), whichever is earlier.
		

		
			 
		

		
			4.  USAT Obligations Upon Termination of Employment
		

		
			 
		

		
			(a)       In General.  Upon a termination of Arora’s employment for any reason, Arora (or Arora’s estate) shall be entitled to receive: (i) any portion of Arora’s Annual Base Salary through the Date of Termination not theretofore paid, (ii) any expenses owed to Arora under Section 2(f), (iii) any accrued but unused PTO pay owed to Arora pursuant to Section 2(g), and (iv) any amount arising from Arora’s participation in, or benefits under, any employee benefit plans, programs or arrangements under Section 2(g), which amounts shall be payable or vested in
		

		
			 
		

		
			
		

		
			

		 

		

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			accordance with the terms and conditions of such employee benefit plans, programs or arrangements.
		

		
			 
		

		
			(b)       In the event of Arora’s termination of employment by USAT without Cause pursuant to Section 3(a)(iv) or by Arora’s resignation for Good Reason pursuant to Section 3(a)(v), USAT shall pay Arora any STI or LTI award that was earned prior to Termination, and any portion of any STI or LTI award for the year in which Termination occurs with the award and targets adjusted pro rata for the partial year. For the purposes of this Subsection 4(b), the term earned shall mean the pro rata target for the STI or LTI as of the date of Arora’s termination without Cause, regardless whether Arora is employed for USAT’s full fiscal year. Except as otherwise set forth in Section 4(c) below, the payments and benefits described in Section 4(a) and this Section 4(b) shall be the only payments and benefits payable in the event of Arora’s termination of employment for any reason.
		

		
			 
		

		
			(c)       Severance Payments.  In the event of (1) Arora’s termination of employment by USAT without Cause pursuant to Section 3(a)(iv), (2) by Arora’s resignation for Good Reason pursuant to Section 3(a)(v), or (3) nonrenewal of this Agreement under Section 1(a) by USAT; in addition to the payments and benefits described in Sections 4(a) and 4(b) above, USAT shall, subject to Section 15 and Section 4(d) and subject to Arora’s execution of a release of any and all claims, suits, or causes of action (except for any
		

		
			 
		

		
			
		

		
			

		 

		

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			USAT post termination obligations under this Agreement) against USAT and its affiliates in form reasonably acceptable to USAT:
		

		
			 
		

		
			(i)       Continue to pay to Arora Annual Base Salary (as it exists on the Date of Termination), during the period beginning on the Date of Termination and ending on the first anniversary of the Date of Termination (the “Severance Period”) in accordance with USAT’s regular payroll practice as of the Date of Termination; and
		

		
			 
		

		
			(ii)      Continue during the Severance Period coverage for Arora and any eligible dependents under all USAT group health benefit plans in which Arora and any dependents were entitled to participate immediately prior to the Date of Termination, to the extent permitted (“Continued Coverage”); provided that if such Continued Coverage would result in penalties under Section 4980D of the Code, then USAT may in its sole discretion provide that (i) Arora shall pay to USAT, on an after-tax basis, a monthly amount equal to the full premium cost of the Continued Coverage (determined in accordance with the methodology under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended,) for such month and (ii) within 30 days of such premium payment, USAT shall reimburse Arora in cash (less required withholding) an amount equal to the sum of (A) the full premium cost of the Continued Coverage for such month and (B) an additional tax “gross up” payment to cover all estimated applicable local,
		

		
			 
		

		
			
		

		
			

		 

		

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			state and federal income and payroll taxes imposed on Arora with respect to the Continued Coverage.
		

		
			 
		

		
			(d)       Notwithstanding any other provision of this Agreement, no payment shall be made or benefit provided pursuant to Sections 4(b) or 4(c) if Arora has violated any of the restrictive covenants set forth in Sections 5 and 6.  The provisions of this Section 4 shall supersede in their entirety any severance payment provisions in any severance plan, policy, program or other arrangement maintained by USAT.
		

		
			 
		

		
			5.  Business Secrets, Disclosure of Inventions, and Invention Assignment.
		

		
			 
		

		
			(a)       The term “Invention” includes all inventions, improvements, modifications and enhancements, whether or not patentable and whether or not reduced to practice, together with each work of such owner, whether or not copyrightable, as well as ideas, concepts, designs, and processes, whether or not patentable.
		

		
			 
		

		
			(b)       Except in connection with Arora’s duties hereunder and as set forth in Section 7 below, Arora shall not, directly or indirectly, at any time from and after the date hereof, and whether or not the Employment Period has terminated, or whether or not Arora's employment has terminated for any reason whatsoever, make any use of, exploit, disclose, or divulge to any other person, firm or corporation, any confidential information including, but 
		

		
			
		

		
			

		 

		

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			not limited to, proprietary information, trade secret, business secret, document, practice, process procedure, know-how, data, sales information, marketing information, marketing method, marketing means, software information, intellectual property, special arrangement, internal organization, employment list, customer list, or any other confidential information concerning the business or policies of the Company or USAT or concerning the Company or USAT's customers, clients, accounts, or suppliers, that Arora learned as a result of, in connection with, through his employment with, or through his affiliation with, the Company or USAT, whether or not pursuant to this Agreement, and whether prior to or after the date hereof, but not information that can be shown through documentary evidence to be in the public domain, or information that falls in to the public domain, unless such information falls into the public domain by Arora's direct or indirect disclosure or other improper acts. Arora agrees to use his best endeavors to prevent the unauthorized disclosure or publication of confidential information and not to copy nor remove confidential information from the Company or USAT's premises, whether physically or electronically, unless it is maintained on USAT issued equipment, without the express written permission of USAT management.
		

		
			 
		

		
			(c)       All documents, data, know-how, designs, Inventions, names, marketing information, marketing method, marketing means,
		

		
			 
		

		
			
		

		
			

		 

		

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			materials, software programs, hardware, configurations, information, data processing reports, lists and sales analyses, price lists or information, or any other materials or data of any kind furnished to Arora by the Company or USAT, or by the Company or USAT's customers, clients, accounts, and suppliers, or developed by Arora on behalf of the Company or USAT or at the Company or USAT's direction or for the Company or USAT's use, or otherwise devised, developed, created, or invented in connection with Arora's employment hereunder or his affiliation with the Company or USAT(whether or not during normal working hours), are, and shall remain, the sole and exclusive property of the Company or USAT, and Arora shall have no right or interest whatsoever thereto, including but not limited to, any copyright or patent interest whatsoever. If USAT requests the return of any such items (including all copies) at any time whatsoever, Arora shall immediately deliver the same to USAT.
		

		
			 
		

		
			(d)       Arora shall promptly disclose in writing to USAT’s Chief Executive Officer all Inventions made by Arora during the term of Arora’s employment with either the Company or USAT, including all Inventions made prior to the date of this Agreement, or subsequent to the date of this Agreement, whether made solely or jointly with others, and regardless of whether Arora contends the Invention is Arora’s own Invention including the inventions listed on Exhibit A attached hereto and incorporated by
		

		
			 
		

		
			
		

		
			

		 

		

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			reference(“Excluded Invention”), or the Company or USAT’s Invention (“Subject Invention”).  Arora shall promptly disclose to USAT a general description of the Invention made or conceived by Arora during the term of Arora’s employment with either the Company or USAT, so that USAT can determine whether the Invention is properly classified as a Subject Invention or Excluded Invention.
		

		
			 
		

		
			(e)       Arora hereby assigns to USAT, without additional consideration to Arora, the entire right, title and interest in and to all Subject Inventions (including Subject Inventions made prior to the execution hereof) and all confidential information writings, apparatus, and other matter related to the Subject Inventions and in and to all proprietary rights therein or based thereon. Arora understands and agrees that all material included in any Subject Invention which is eligible for protection under the United States, or any other country’s or jurisdiction’s copyright laws shall be deemed created in the ordinary course and scope of Arora’s employment by the Company and shall be “Works for Hire” under the copyright laws of the United States. Arora and USAT acknowledge the terms of California Labor Code Section 2870 and Arora is hereby notified that the obligation to assign or offer to assign any of Arora’s rights in any Invention to USAT do not apply to any Invention which qualifies as an Excluded Invention and which complies fully with the provisions of California Labor Code Section 2870(a).
		

		
			 
		

		
			
		

		
			

		 

		

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			(f)       Except for Excluded Inventions, all documents, data, know-how, designs, products, ideas, equipment, Inventions, names, devices, marketing information, marketing methods, marketing means, materials, software programs, hardware, configurations, information, or any other materials or data of any kind developed by Arora on behalf of the Company or USAT or at their direction or for the Company or USAT's use, or otherwise devised, developed, created, or invented in connection with Arora's employment with the Company or USAT or Arora's affiliation with the Company or USAT (whether or not during normal working hours), whether before or after the date of this Agreement, are and shall remain the sole and exclusive property of USAT, and Arora agrees to apprise USAT of the existence of such, and Arora does not and shall not have any right, title or interest whatsoever thereto. Arora hereby acknowledges that all such rights to such intellectual property shall belong exclusively to USAT and not to Arora. Any and all rights of ownership in connection with any of the foregoing shall belong solely to USAT, and all copyright, patent, trademark, or similar rights or interests shall be the sole and exclusive property of USAT. Arora hereby assigns, transfers, and conveys to USAT all of his right, title and interest in and to any and all such Inventions, discoveries, improvements, modifications, and other intellectual property rights, and agrees to take all such actions as may be required by USAT at any time
		

		
			 
		

		
			
		

		
			

		 

		

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			and with respect to any such Invention, discovery, improvement, modification, or other intellectual property rights to effectuate, confirm, or evidence such assignment, transfer, and conveyance, including, but not limited to, executing and delivering any and all applicable forms, documents, or applications required under any applicable copyright, patent, trademark, or other law, rule, or regulation.
		

		
			 
		

		
			(g)       Arora may respond to a lawful and valid subpoena or other legal process but shall give USAT the earliest possible notice thereof, and shall, as much in advance of the return date as possible, make available to USAT and its counsel the documents and other information sought, and shall assist such counsel in resisting or otherwise responding to such process.
		

		
			 
		

		
			6.  Non-Compete, Non-Solicitation and Non-Interference.
		

		
			 
		

		
			(a)       Non-Compete. For a three (3) year period following the date of this Agreement, Arora shall be prohibited from competing within any geographic area in which the Company’s business was conducted as of the date this Agreement, with the business of USAT or the Company, as presently or as hereinafter conducted as of the termination of the Employment Period; including but not limited to, delivering services or products to unattended retail locations, and including any production, promotion, marketing, or sales activities relating thereto. For the purposes hereof, the term "competing" shall mean acting, directly or
		

		
			 
		

		
			
		

		
			

		 

		

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			indirectly, as a partner, principal, stockholder, joint venturer, associate, independent contractor, creditor of, consultant, trustee, lessor to, sub-lessor to, employee or agent of, or to have any other involvement with, any person, firm, corporation, or other business organization which is engaged in the businesses described in this Section.
		

		
			 
		

		
			(b)       Non-Interference with Employees. For a three (3) year period following the date of this Agreement, or one year following the termination of the Employment Period, whichever is later (the “Non-Interference Period”), Arora shall not (a) directly or indirectly, solicit for hire for any business entity other than USAT or the Company, any person employed by the Company as of the date of termination of this Agreement or at any time through the duration of the Non-Interference Period; or (b) directly or indirectly interfere with USAT's relations with any person employed by the Company as of the date of termination of this Agreement or at any time through the duration of the Non-Interference Period. Such restriction shall not limit any employee or candidate responding to a general job posting.
		

		
			 
		

		
			(c)       Non-Solicitation of Customers. For a three (3) year period following the date of this Agreement, or one year following the termination of the Employment Period, whichever is later, Arora shall be prohibited from soliciting any customer of the Company in connection with Arora’s engaging in a business competing with or
		

		
			 
		

		
			
		

		
			

		 

		

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			similar to that of the Company as conducted as of the date this Agreement, including but not limited to, delivering services or products to unattended retail locations, and including any production, promotion, marketing, or sales activities relating thereto, and including any production, promotion, marketing, or sales activities relating thereto.
		

		
			 
		

		
			(d)        Exempt Businesses. Notwithstanding such restrictions or any other USAT policy or provision in this Agreement; Arora shall not be prohibited after the Employment Period from investing in, or advising Permitted Activities.
		

		
			 
		

		
			(e)       If any of the provisions contained in this Section shall, for any reason, be held by a court of competent jurisdiction to be excessively broad as to duration, scope, activity, or subject, those provisions shall be construed by limiting and reducing them so as to be valid and enforceable to the extent compatible with the applicable law.
		

		
			 
		

		
			7.  Government Agencies and Legal Proceedings Brought By Others;  No disparagement.
		

		
			 
		

		
			(a)       Nothing in this Agreement prohibits or prevents Arora from filing a charge with or participating, testifying, or assisting in any investigation, hearing, or other proceeding before any federal, state, or local government agency. Arora further understands that this Agreement does not limit his ability to make any disclosures that are protected under the whistleblower
		

		
			 
		

		
			
		

		
			

		 

		

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			provisions of federal law or regulation. This Agreement does not limit Arora’s right to receive an award for information provided to any Government Agencies.
		

		
			 
		

		
			(b)       Arora and USAT agree not to disparage each other, any of USAT’s products or practices, or any of its directors, officers, agents, representatives, equity holders or affiliates, either orally or in writing, at any time; provided that the parties may confer in confidence with their legal representatives and make truthful statements as required by law, rule or regulation.
		

		
			 
		

		
			8.  Remedies.
		

		
			 
		

		
			Arora acknowledges that any breach by Arora of the obligations set forth in Sections 5 or 6 hereof would substantially and materially impair and irreparably harm USAT's business and goodwill; that such impairment and harm would be difficult to measure; and, therefore, total compensation in solely monetary terms would be inadequate. Consequently, Arora agrees that in the event of any breach or any threatened breach by Arora of any of the provisions of Section 5 or 6 hereof, USAT shall be entitled, in addition to monetary damages or other remedies, and without posting bond, to equitable relief, including injunctive relief, and to the payment by Arora of all costs and expenses incurred by USAT in enforcing the provisions thereof, including attorneys' fees. The remedies granted to USAT in this Agreement are cumulative
		

		
			 
		

		
			
		

		
			

		 

		

			23

		

 

		

		
			and are in addition to remedies otherwise available to USAT at law or in equity.
		

		
			 
		

		
			9.  Non-Waiver.
		

		
			 
		

		
			The waiver by either party of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any other or subsequent breach by such party of such or any other provision.
		

		
			 
		

		
			10. Notices.
		

		
			 
		

		
			All notices required or permitted hereunder shall be in writing and shall be sent by overnight delivery service, as follows:
		

		
			 
		

		
			To USAT:
		

		
			 
		

		
			USA Technologies, Inc.
		

		
			100 Deerfield Lane, Suite 300
		

		
			Malvern, Pennsylvania 19355
		

		
			Attn: Stephen P. Herbert, Chief Executive Officer
		

		
			 
		

		
			To Arora:
		

		
			 
		

		
			Mandeep Arora
		

		
			1839 15th Street, Unit #357
		

		
			San Francisco, CA 94103
		

		
			 
		

		
			 
		

		
			 
		

		
			or to such other address as either of them may designate in a written notice served upon the other party in the manner provided herein. All notices required or permitted hereunder shall be deemed duly given and received on the first day next succeeding the date of mailing.
		

		
			
		

		
			

		 

		

			24

		

 

		

		
			11. Severability.
		

		
			 
		

		
			If any term or provision of this Agreement or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or the application of any such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
		

		
			 
		

		
			12. Binding Effect and Assignability.
		

		
			 
		

		
			The rights and obligations of both parties under this Agreement shall inure to the benefit of, and shall be binding upon, their personal representatives, heirs, successors and assigns. This Agreement, or any part hereof, may be assigned by USAT without the consent of Arora. This Agreement, or any part thereof, may not be assigned by Arora.
		

		
			 
		

		
			13. Entire Agreement and Prior Agreements.
		

		
			 
		

		
			As of the date of this Agreement; Arora’s Employment Agreement with the Company dated April 1, 2010, and signed by Arora on March 11, 2011 (“April 1, 2010 Agreement”), is superseded and replaced by this Agreement, except for Arora’s duties and obligations set forth in Sections 6 and 7(a) of the April 1, 2010 Agreement.  Arora shall have no right to any of the Cash and Incentive Compensation provided for in the April 1, 2010 Agreement. Arora’s duties and obligations set forth in the Employee Nondisclosure, Non-Compete,
		

		
			 
		

		
			
		

		
			

		 

		

			25

		

 

		

		
			Non-Solicitation and Invention Assignment Agreement as of 2004 (“2004 NDA Agreement”) shall remain in full force and effect, and are not abrogated by this Agreement. To the extent Sections 6 and 7(a) of the April 1, 2010 Agreement and the provisions of the 2004 NDA Agreement conflict with the terms of this Agreement, the terms of this Agreement shall govern. Except as set forth above in this Section, this Agreement constitutes the entire agreement with respect to the subject matter hereof between the parties hereto and, except as provided herein, there are no other agreements between the parties relating to the subject matter hereof. This Agreement may only be modified by an agreement in writing executed by both USAT and Arora.  USAT hereby agrees that all actions taken by Arora consistent with the terms of this Agreement shall not be a violation of the April 1, 2010 Agreement or 2004 NDA Agreement.
		

		
			 
		

		
			14. Understanding of Agreement.
		

		
			 
		

		
			Arora hereby represents and warrants each of the following: (i) he has carefully read all of the terms and conditions of this Agreement; (ii) he fully understands the meaning and effect of this Agreement; (iii) the entry into, and execution of, this Agreement by him is his own free and voluntary act and deed; and (iv) he has received (or had the opportunity to receive) the advice of his own attorney, accountant, or other advisors, concerning this Agreement and its meaning and legal effect, and has fully and completely discussed and reviewed (or has had the opportunity to
		

		
			 
		

		
			
		

		
			

		 

		

			26

		

 

		

		
			fully and completely discuss and review) the Agreement and its meaning and legal effect, with his own attorney, accountant or other advisors.
		

		
			 
		

		
			15. Section 409A.
		

		
			 
		

		
			(a)       General.  “Section 409A” shall mean Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date.
		

		
			 
		

		
			The parties hereto acknowledge and agree that, to the extent applicable, this Agreement shall be interpreted in accordance with, and incorporate the terms and conditions required by, Section 409A.  Notwithstanding any provision of this Agreement to the contrary, in the event that USAT determines that any amounts payable hereunder will be immediately taxable to Arora under Section 409A, USAT reserves the right (without any obligation to do so or to indemnify Arora for failure to do so) to (i) adopt such amendments to this Agreement and appropriate policies and procedures, including amendments and policies with retroactive effect, that USAT determines to be necessary or appropriate to preserve the intended tax treatment of the benefits provided by this Agreement, to preserve the economic benefits of this Agreement and to avoid less favorable accounting or tax consequences for USAT and/or (ii) take such other actions as USAT determines to be
		

		
			 
		

		
			
		

		
			

		 

		

			27

		

 

		

		
			necessary or appropriate to exempt the amounts payable hereunder from Section 409A or to comply with the requirements of Section 409A and thereby avoid the application of penalty taxes thereunder.  No provision of this Agreement shall be interpreted or construed to transfer any liability for failure to comply with the requirements of Section 409A from Arora or any other individual to USAT or any of its Affiliates, employees or agents and in no event shall USAT or any of its affiliates, employees or agents be responsible for reimbursing or indemnifying Argawal for any violation of Section 409A.
		

		
			 
		

		
			(b)       Separation from Service under Section 409A.  Notwithstanding any provision to the contrary in this Agreement:  (i) no amount shall be payable pursuant to Section 4(b) unless the termination of Arora’s employment constitutes a “separation from service” within the meaning of Section 1.409A-1(h) of the Department of Treasury Regulations; (ii) for purposes of Section 409A, Arora’s right to receive installment payments pursuant to Section 4(b) shall be treated as a right to receive a series of separate and distinct payments; and (iii) to the extent that any reimbursement of expenses or in-kind benefits constitutes “deferred compensation” under Section 409A, such reimbursement or benefit shall be provided no later than December 31 of the year following the year in which the expense was incurred.  The amount of expenses reimbursed in one year shall not affect the amount
		

		
			 
		

		
			
		

		
			

		 

		

			28

		

 

		

		
			eligible for reimbursement in any subsequent year.  The amount of any in-kind benefits provided in one year shall not affect the amount of in-kind benefits provided in any other year. Notwithstanding any provision to the contrary in this Agreement, if Arora is deemed at the time of his separation from service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the termination benefits to which Arora is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of Arora’s termination benefits shall not be provided to Arora prior to the earlier of (x) the expiration of the six-month period measured from the date of Arora’s “separation from service” with USAT (as such term is defined in the Treasury Regulations issued under Section 409A of the Code) or (y) the date of Arora’s death; upon the earlier of such dates, all payments deferred pursuant to this sentence shall be paid in a lump sum to Arora, and any remaining payments due under the Agreement shall be paid as otherwise provided herein.
		

		
			 
		

		
			16. Choice of Law, Venue and Arbitration.
		

		
			 
		

		
			This Agreement will be governed by California law, without application of that state’s conflict of laws principles. Except for a claimed breach of Sections 5 and 6 of this Agreement, USAT and Arora agree that any dispute between the Parties will be
		

		
			 
		

		
			
		

		
			

		 

		

			29

		

 

		

		
			referred to final and binding arbitration, in accordance with the then-current Employment Arbitration Rules (the “Rules”) of the American Arbitration Association (“AAA”) with the hearing venue to be located in California.  To the extent any dispute between the Parties is not subject to AAA arbitration, then the Parties hereby consent to the exclusive jurisdiction of the state and federal courts of the State of California. USAT and Arora, upon prior mutual written agreement, may agree to have any Dispute referred to and conducted in accordance with the rules (as same may be modified by such written mutual agreement) of another private arbitration institution, such as by way of example only, Judicial Arbitration & Mediations Services, Inc.
		

		
			 
		

		
			17. Merger Agreement Beneficiary.
		

		
			 
		

		
			 USAT and Arora acknowledge that Arora is an intended beneficiary of Section 5.6 of the Merger Agreement, and he shall be a third party beneficiary thereof.
		

		
			 
		

		
			 
		

		
			[Signature page follows]
		

		
			 
		

		
			 
		

		
			

		 

		

			30

		

 

		

		
			IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.
		

		
			 
		

			
					
						 

					
					
						USA TECHNOLOGIES, INC.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By: 

					
					
						/s/ Stephen P. Herbert

				
	
					
						 

					
					
						 

					
					
						Stephen P. Herbert,

				
	
					
						 

					
					
						 

					
					
						Chief Executive Officer

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						/s/ Mandeep Arora

				
	
					
						 

					
					
						 

					
					
						MANDEEP ARORA

				

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			
		

		
			

		 

		

			 

		

 

		

		
			EXHIBIT A
		

		
			 
		

		
			EXCLUDED INVENTIONS AND CONCEPTS
		

		
			 
		

		
			 
		

		
			 
		

		
			NONEBlueprint

 

EXHIBIT 4(b)

 

CEL-SCI CORPORATION

2017 NON-QUALIFIED STOCK OPTION PLAN

 

 

l.          

Purpose. This Non-Qualified
Stock Option Plan (the "Plan") is intended to advance the interests
of CEL-SCI Corporation (the “Company”) and its
shareholders, by encouraging and enabling selected officers,
directors, consultants and key employees upon whose judgment,
initiative and effort the Company is largely dependent for the
successful conduct of its business, to acquire and retain a
proprietary interest in the Company by ownership of its stock.
Options granted under the Plan are intended to be Options which do
not meet the requirements of Section 422 of the Internal Revenue
Code of 1954, as amended (the "Code").

 

2.          

Definitions.

 

(a)          

"Board" means the
Board of Directors of the Company.

 

(b)          

"Committee" means
the directors duly appointed to administer the Plan.

 

(c)          

"Common Stock"
means the Company's Common Stock.

 

(d)          

"Date of Grant"
means the date on which an Option is granted under the
Plan.

 

(e)          

"Option" means an
Option granted under the Plan.

 

(f)          

"Optionee" means a
person to whom an Option, which has not expired, has been granted
under the Plan.

 

(g)          

"Successor" means
the legal representative of the estate of a deceased optionee or
the person or persons who acquire the right to exercise an Option
by bequest or inheritance or by reason of the death of any
Optionee.

 

3.          

Administration of Plan. The
Plan shall be administered by the Company's Board of Directors or
in the alternative, by a committee of two or more directors
appointed by the Board (the "Committee"). If a Committee should be
appointed, the Committee shall report all action taken by it to the
Board. The Committee shall have full and final authority in its
discretion, subject to the provisions of the Plan, to determine the
individuals to whom and the time or times at which Options shall be
granted and the number of shares and purchase price of Common Stock
covered by each Option; to construe and interpret the Plan; to
determine the terms and provisions of the respective Option
agreements, which need not be identical, including, but without
limitation, terms covering the payment of the Option Price; and to
make all other determinations and take all other actions deemed
necessary or advisable for the proper administration of the Plan.
All such actions and determinations shall be conclusively binding
for all purposes and upon all persons.

 

4.          

Common Stock Subject to
Options. The aggregate number of shares of the Company's
Common Stock which may be issued upon the exercise of Options
granted under the Plan shall not exceed 800,000. The shares of
Common Stock to be issued upon the exercise of Options may be
authorized but unissued shares, shares issued and reacquired by the
Company or shares bought on the market for the purposes of the
Plan. In the event any Option shall, for any reason, terminate or
expire or be surrendered without having been exercised in full, the
shares subject to such Option but not purchased thereunder shall
again be available for Options to be granted under the
Plan.

 

 

1

 

 

 

5.          

Participants. Options may be
granted under the Plan to employees, directors and officers, and
consultants or advisors to the Company (or the Company’s
subsidiaries), provided however that bona fide services shall be
rendered by such consultants or advisors and such services must not
be in connection with the offer or sale of securities in a
capital-raising transaction and do not directly or indirectly
promote or maintain a market for the Company’s
securities.

 

6.          

Terms and Conditions of
Options. Any Option granted under the Plan shall be
evidenced by an agreement executed by the Company and the recipient
and shall contain such terms and be in such form as the Committee
may from time to time approve, subject to the following limitations
and conditions:

 

(a)          

Option Price. The Option Price
per share with respect to each Option shall be determined by the
Committee. The option price of any
options granted pursuant to the Plan may not be changed, except in
the case of stock splits, reorganizations or
recapitalizations.

 

(b)          

Period of Option. The period
during which each option may be exercised, and the expiration date
of each Option shall be fixed by the Committee, but,
notwithstanding any provision of the Plan to the contrary, such
expiration date shall not be more than ten years from the date of
Grant.

 

(c)          

Vesting of Shareholder Rights.
Neither an Optionee nor his successor shall have any rights as a
shareholder of the Company until the certificates evidencing the
shares purchased are properly delivered to such Optionee or his
successor.

 

(d)          

Exercise of Option. Each Option
shall be exercisable from time to time during a period (or periods)
determined by the Committee and ending upon the expiration or
termination of the Option; provided, however, the Committee may, by
the provisions of any Option Agreement, limit the number of shares
purchaseable thereunder in any period or periods of time during
which the Option is exercisable.

 

(e)          

Nontransferability of Option.
No Option shall be transferable or assignable by an Optionee,
otherwise than by will or the laws of descent and distribution and
each Option shall be exercisable, during the Optionee's lifetime,
only by him. No Option shall be pledged or hypothecated in any way
and no Option shall be subject to execution, attachment, or similar
process except with the express consent of the
Committee.

 

(f)          

Death of Optionee. In the event
of the death of an Optionee, an option theretofore granted to the
Optionee shall be exercisable only (i) by the person or persons to
whom the Optionee’s rights under the option shall pass by the
Optionee’s will or by the laws of descent and distribution;
and (ii) if and only to the extent that the Optionee was entitled
to exercise the option at the date of death.

 

(g)          

Payment for Options. The
Corporation is not required to pay
cash for an option under any circumstances.

 

7.          

Reclassification, Consolidation, or
Merger. If and to the extent that the number of issued
shares of Common Stock of the Corporation shall be increased or
reduced by change in par value, split up, reclassification,
distribution of a dividend payable in stock, or the like, the
number of shares which may be issued upon the exercise of any
Options which may be granted pursuant to this Plan, the number of
shares issuable upon the exercise of any Option previously granted
and the Exercise Price of any Option previously granted, shall be
proportionately adjusted by the Committee, whose determination
shall be conclusive. If the Corporation is reorganized or
consolidated or merged with another corporation, an Optionee
granted an Option hereunder shall be entitled to receive Options
covering shares of such reorganized, consolidated, or merged
company in the same proportion, at an equivalent price, and subject
to the same conditions. The new Option or assumption of the old
Option shall not give Optionee additional benefits which he did not
have under the old Option, or deprive him of benefits which he had
under the old Option.

 

8.          

Restrictions on Issuing Shares.
The exercise of each Option shall be subject to the condition that
if at any time the Company shall determine in its discretion that
the satisfaction of withholding tax or other withholding
liabilities, or that the listing, registration, or qualification of
any shares otherwise deliverable upon such exercise upon any
securities exchange or under any state or federal law, or that the
consent or approval of any regulatory body, is necessary or
desirable as a condition of, or in connection with, such exercise
or the delivery or purchase of shares purchased thereto, then in
any such event, such exercise shall not be effective unless such
withholding, listing, registration, qualification, consent, or
approval shall have been effected or obtained free of any
conditions not acceptable to the Company.

 

 

2

 

 

Unless
the shares of stock covered by the Plan have been registered with
the Securities and Exchange Commission pursuant to Section 5 of the
Securities Act of l933, each optionee shall, by accepting an
option, represent and agree, for himself and his transferrees by
will or the laws of descent and distribution, that all shares of
stock purchased upon the exercise of the option will be acquired
for investment and not for resale or distribution. Upon such
exercise of any portion of an option, the person entitled to
exercise the same shall, upon request of the Company, furnish
evidence satisfactory to the Company (including a written and
signed representation) to the effect that the shares of stock are
being acquired in good faith for investment and not for resale or
distribution. Furthermore, the Company may, if it deems
appropriate, affix a legend to certificates representing shares of
stock purchased upon exercise of options indicating that such
shares have not been registered with the Securities and Exchange
Commission and may so notify the Company's transfer agent. Such
shares may be disposed of by an optionee in the following manner
only: (l) pursuant to an effective registration statement covering
such resale or reoffer, (2) pursuant to an applicable exemption
from registration as indicated in a written opinion of counsel
acceptable to the Company, or (3) in a transaction that meets all
the requirements of Rule l44 of the Securities and Exchange
Commission. If shares of stock covered by the Plan have been
registered with the Securities and Exchange Commission, no such
restrictions on resale shall apply, except in the case of optionees
who are directors, officers, or principal shareholders of the
Company. Such persons may dispose of shares only by one of the
three aforesaid methods.

 

9.          

Use of Proceeds. The proceeds
received by the Company from the sale of Common Stock pursuant to
the exercise of Options granted under the Plan shall be added to
the Company's general funds and used for general corporate
purposes.

 

10.          

Amendment, Suspension, and Termination
of Plan. The Board of Directors may alter, suspend, or
discontinue the Plan at any time.

 

Unless
the Plan shall theretofore have been terminated by the Board, the
Plan shall terminate ten years after the adoption of the Plan. No
Option may be granted during any suspension or after the
termination of the Plan. No amendment, suspension, or termination
of the Plan shall, without an Optionee's consent, alter or impair
any of the rights or obligations under any Option theretofore
granted to such Optionee under the Plan.

 

11.          

Limitations. Every right of
action by any person receiving options pursuant to this Plan
against any past, present or future member of the Board, or any
officer or employee of the Company arising out of or in connection
with this Plan shall, irrespective of the place where such action
may be brought and irrespective of the place of residence of any
such director, officer or employee cease and be barred by the
expiration of one year from the date of the act or omission in
respect of which such right of action arises.

 

l2.          

Governing Law. The Plan shall
be governed by the laws of the State of Colorado.

 

13.          

Expenses of Administration. All
costs and expenses incurred in the operation and administration of
this Plan shall be borne by the Company.

 

 

3

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