Document:

Subordination Agreement to the Credit Agreement

 EXHIBIT 4.2 
  

SUBORDINATION AGREEMENT 
  
 This Subordination Agreement dated as of June 3, 2003 (this “Agreement”), is made by COINSTAR, INC., a Delaware corporation, (the
“Subordinated Creditor”), and PUKKA, INC., a Washington corporation (the Debtor”), in favor of BANK OF AMERICA, N.A., (“Agent”) in its capacity as Administrative Agent referred to below, for the benefit
of itself, the Lenders, and the L/C Issuer (collectively, the “Senior Creditors”). 
  
 INTRODUCTION 
  
 Capitalized terms used herein, but not defined herein shall have the meanings set forth for such terms in the Credit Agreement (as defined below). 
  
 Reference is made to the Credit Agreement dated as of April 18, 2002 (as modified from time to time, the “Credit Agreement”), among the
Subordinated Creditor, each lender from time to time party thereto (the “Lenders”) and the Agent, as Administrative Agent and L/C Issuer. Pursuant to the terms of the Credit Agreement, the Senior Creditors have made extensions of
credit to the Subordinated Creditor in exchange for which the Subordinated Creditor has made and/or will make certain promises to the Senior Creditors including covenants to subordinate certain Indebtedness owed to the Subordinated Creditor and
Liens in favor of the Subordinated Creditor to the Obligations and Indebtedness of the Loan Parties under the Loan Documents and the Liens securing such Obligations. 
  
 The Subordinated Creditor has extended credit to the Debtor as evidenced by the Subordinated Note (as hereinafter defined)
payable to the Subordinated Creditor and secured by the Subordinated Lien (as hereinafter defined). 
  
 The Senior Creditors, the Agent, and the Subordinated Creditor have agreed to enter into Amendment No. 2 to the Credit Agreement dated as of June, 3 2003
(the “Amendment”), pursuant to which the debt incurred by the Debtor under the Subordinated Note would be permitted under the Credit Agreement. It is a condition precedent to the effectiveness of the Amendment that the Subordinated
Creditor and the Debtor enter into this Agreement. The Subordinated Creditor and the Debtor are entering into this Agreement to induce the Senior Creditors to enter into the Amendment and to continue to extend credit to the Debtor thereunder.

  
 In consideration of the foregoing and for other good and
valuable consideration, the Subordinated Creditor and the Debtor, for the benefit of the Senior Creditors, hereby agree as follows: 
  
 SECTION 1.    Definitions.    The following terms shall have the following meanings: 
  
 “Insolvency Proceeding” means any bankruptcy,
reorganization, insolvency, receivership, or other similar proceeding. 

 “Remedial Action” means any action to (a) take from the Debtor, any of the Debtor’s
affiliates, or any assets of the Debtor or any of the Debtor’s affiliates any payments on the Subordinated Debt (as hereafter defined) by foreclosure, setoff, or any other nonjudicial action, (b) commence, join, or enforce any suit, action, or
proceeding (other than an Insolvency Proceeding) against the Debtor or its assets to enforce payment of any portion of the Subordinated Debt or enforce any of the rights and remedies under the Subordinated Note, the Security Agreement, or any other
agreement, instrument, or document to which the Debtor is a party or applicable law with respect to the Subordinated Debt, or (c) commence, join, or enforce an Insolvency Proceeding with respect to the Debtor or its assets. 
  
 “Senior Debt” means (a) all principal, interest, fees,
reimbursements, indemnifications, and other amounts (including interest accruing after the filing of a petition initiating any Insolvency Proceeding with respect to the Debtor or any assets of the Debtor, whether or not permitted by such Insolvency
Proceeding) now or hereafter owed by the Debtor to any Senior Creditor under or in connection with the Credit Agreement or any of the other Loan Documents and (b) any increases, extensions, and rearrangements of the foregoing obligations under any
amendments, supplements, and other modifications of the documents creating the foregoing obligations, including any restatements or refinancings of such obligation. 
  
 “Senior Lien” means any and all Liens securing any of the Senior Debt in favor of the Agent for the benefit
of itself or any of the Senior Creditors. 
  
 “Subordinated Debt” means all present and future indebtedness, liabilities, and obligations of any kind owed by the Debtor to the Subordinated Creditor including, without limitation, all indebtedness, liabilities, and
obligations under or in connection with the Subordinated Note. 
  
 “Subordinated Lien” means the Lien secured by the Security Agreement (“Security Agreement”) dated as of January 31, 2003 between the Debtor and the Subordinated Creditor securing the repayment of all or any
portion of the Subordinated Debt. 
  
 “Subordinated
Note” means the Promissory Note dated as of January 31, 2003 made by the Debtor payable to the order of the Subordinated Creditor in the original principal amount of $600,000. 
  
 SECTION 2.    Terms of Subordination.    Unless and until the Senior Debt shall have been
irrevocably paid in full and all commitments of the Senior Creditors to extend further Senior Debt have been terminated, (i) all Subordinated Debt shall be subordinate to all Senior Debt to the extent and in the manner set forth in this Section 2,
and (ii) the Subordinated Lien shall be subordinate to the Senior Lien. 
  
 2.1    Limitation on Payments. 
  
 (a)    Unless and until the Senior Debt shall have been irrevocably paid in full and all commitments of any Senior Creditor to make further advances or extensions of credit with respect to the
Senior Debt have been terminated, there shall be no payments of any kind, direct or indirect, on the Subordinated Debt, subject to Section 2.1(b) below. 
  

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 (b)    Notwithstanding Section 2.1(a), if no Default or Event of
Default is continuing or would be caused thereby, the Debtor may make regularly-scheduled payments of interest and principal with respect to the Subordinated Note (such payments being referred to herein as “Permitted Payments”). The
Subordinated Creditor shall consult with Debtor for the purpose of determining that each Permitted Payment to the Subordinated Creditor shall not cause a Default or Event of Default when made and the Subordinated Creditor shall bear the risk that
the making of any Permitted Payments to the Subordinated Creditor violates the foregoing restriction. If at any time there shall occur a Default or Event of Default, the Debtor shall not make any payments with respect to the Subordinated Note until
the earlier of (i) the cure of the Default or Event of Default to the satisfaction of the Senior Creditors or (ii) the irrevocable payment in full of the Senior Debt and the termination of all commitments of the Senior Creditors to make any advances
with respect to the Senior Debt. The Debtor shall give the Subordinated Creditor prompt notice of any such Default or Event of Default. 
  
 2.2    Limitations on Remedial Action.    If there shall exist an event of default, however denominated,
with respect to the Subordinated Debt, the Subordinated Creditor shall not take any Remedial Action with respect to such event of default until the earlier of (a) the irrevocable payment in full of the Senior Debt and the termination of all
commitments of the Senior Creditors to make any advances with respect to the Senior Debt, or (b) the receipt of written consent from the Agent to commence Remedial Action. 
  
 2.3    Subordination on Liquidation.    Upon any distribution to creditors of
the Debtor in a liquidation or dissolution of the Debtor or in any Insolvency Proceeding with respect to the Debtor or any of its assets, all amounts due with respect to the Senior Debt (including interest accrued after the commencement of such
Insolvency Proceeding in accordance the terms of the Credit Agreement, whether or not permitted by such Insolvency Proceeding) shall be irrevocably paid in full before the Subordinated Creditor shall be entitled to collect or receive any payment
with respect to the Subordinated Debt. Until each Senior Creditor has received all amounts due to such Senior Creditor with respect to the Senior Debt in cash, or such payment is duly provided for, any distribution from the Debtor or its assets to
which the Subordinated Creditor should otherwise be entitled shall be made to the holders of the Senior Debt. 
  
 2.4    Impermissible Payments.    Any payments received by the Subordinated Creditor in violation of this
Agreement shall be held by the Subordinated Creditor in trust for the benefit of the Senior Creditors and shall be immediately turned over to the Agent in the form received (together with any necessary endorsements) for application to the Senior
Debt in accordance with the terms of the Credit Agreement to the extent necessary to pay the Senior Debt in full. 
  
 2.5    No Liens.    Other than the Subordinated Lien, the Subordinated Creditor will not create, assume, or
suffer to exist any lien, security interest, or assignment of collateral securing the repayment of the Subordinated Debt. Any lien, security interest, or assignment existing in violation of the foregoing and the Subordinated Lien shall be fully
subordinate to the Senior Lien. At the request of the Agent, the Subordinated Creditor and the Debtor will take any and all steps necessary to fully effect the release of any such lien, security interest, assignment, or collateral. Any financing
statement filed with respect to the Subordinated Lien shall contain the following statement, “The security interest described in this financing statement is fully 

  

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subordinate to the security interest in Pukka, Inc. in favor of Bank of America, N.A., in its capacity as agent under an existing security agreement.”

  
 2.6    Further
Assurances.    The Subordinated Creditor and the Debtor agree to execute any and all other documents requested by the Agent to further evidence the subordination of the Subordinated Debt to the Senior Debt and/or the
Subordinated Lien to the Senior Lien. 
  
 SECTION
3.    Subordination Absolute.    This is an irrevocable agreement of subordination and the Agent or any other Senior Creditor, as applicable, may, in accordance with the terms of the Loan Documents, and
without notice to any of the parties hereto and without impairing or releasing the obligations of the Debtor and the Subordinated Creditor hereunder, (a) create Senior Debt by extending credit under the terms of the Credit Agreement or by extending
other credit to the Subordinated Creditor or Debtor; (b) change the terms of or increase the amount of the Senior Debt by extending, rearranging, amending, supplementing, or otherwise modifying any of the Loan Documents or other agreements creating
Senior Debt; (c) sell, exchange, release, or otherwise deal with any collateral securing any Senior Debt; (d) release anyone, including the Subordinated Creditor, Debtor, or any guarantor, liable in any manner for the payment or collection of any
Senior Debt; (e) exercise or refrain from exercising any rights against the Debtor or any other Person; and (f) apply any sums received by any Senior Creditor, from whatever source, to the payment of the Senior Debt, according to the terms of the
Credit Agreement. 
  
 SECTION 4.    Provisions Regarding
Subordinated Debt. 
  
 4.1    There may
be no increases, extensions, rearrangements, amendments, supplements, or other modifications to the Subordinated Note, Security Agreement or any other agreement, instrument, or document to which the Debtor is a party or applicable law with respect
to the Subordinated Debt or Subordinated Lien without the prior written consent of the Agent. 
  
 4.2    The Subordinated Creditor will cause all Subordinated Debt to be evidenced by a note, debenture, instrument, or other writing evidencing such Subordinated Debt and will inscribe a statement
or legend thereon to the effect that such note, debenture, instrument, or other writing is subordinated to the Senior Debt in favor of the Senior Creditors in the manner and to the extent set forth in this Agreement. The Subordinated Creditor shall
inscribe a statement or legend on the Security Agreement to the effect that the security interest created thereby is fully subordinated to the security interest in favor of the Senior Creditors. 
  
 4.3    The Subordinated Creditor shall not assign or
otherwise transfer to any other person any interest in the Subordinated Debt unless the Subordinated Creditor causes the assignee or other transferee to execute and deliver to the Agent for the benefit of the Senior Creditors a subordination
agreement in substantially the form of this Agreement or otherwise acknowledges to the reasonable satisfaction of the Senior Creditors the subordination of the applicable Subordinated Debt in accordance with this Agreement. 
  

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 SECTION 5.    Miscellaneous. 
  
 5.1    The miscellaneous provisions of Article 10 of the Credit Agreement, including without limitation
the provisions for indemnification and choice of law are incorporated herein as if fully set forth herein. 
  
 5.2    All notices and other communications under this Agreement shall be in writing and mailed by certified mail (return receipt
requested), telecopied, hand delivered, or delivered by a nationally recognized overnight courier, to the following addresses: 
  
 If to the Debtor: 
  
 Pukka, Inc. 
 1800 114th Ave. S.E. 

Bellevue, WA 98004 

	 	Attn:	 	Corporate Counsel 

	 	        	 	Telephone: (425) 943-8161 

	 	        	 	Telecopier: (425) 943-8090 

  
 If to the Subordinated Creditor, the addresses for notice set forth in the Credit Agreement. 
  
 If to the Agent or Lenders, the addresses for notice set forth in the Credit Agreement. 
  
 or at such other address as shall be designated by one party in a written notice to the other parties. Mailed notices shall be effective
when received. Telecopied notices shall be effective when transmission is completed. Delivered notices shall be effective when delivered by messenger or courier. 
  
 5.3    This Agreement is a Loan Document for the purposes of the provisions of the other Loan Documents.

  
 IN THE EVENT THERE IS A CONFLICT BETWEEN THIS AGREEMENT AND ANY OTHER
DOCUMENTS RELATED TO THE SUBORDINATED DEBT, THIS AGREEMENT SHALL CONTROL. 
  
 THIS
WRITTEN AGREEMENT AND THE RELATED LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. 
  
 THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. 
  

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 EXECUTED as of the date first above written. 
  

	COINSTAR, INC.
		
	 By:
	 	/S/    DAVID W. COLE        
		
	Name:	 	        David W. Cole
		
	Title:	 	        CEO

  
  

	
	PUKKA, INC.
		
	 By:
	 	/S/    DONALD R. RENCH        
		
	Name:	 	        Donald R. Rench
		
	Title:	 	        Secretary

  

 -6-Employoment Agreement with Brian V. Turner

 Exhibit 10.1 
  
 EMPLOYMENT AGREEMENT 
  
 This Employment Agreement (this “Agreement”), dated as of April 29, 2003, between Coinstar, Inc., a Delaware corporation (“Employer”),
and Brian V. Turner (“Employee”); 
  
 W I T N E S S
E T H: 
  
 WHEREAS, Employer and Employee wish to document
certain understandings and agreements; and 
  
 WHEREAS, Employer
desires to employ Employee upon the terms and conditions set forth herein; and 
  
 WHEREAS, Employee is willing to provide services to Employer upon the terms and conditions set forth herein; 
  
 A G R E E M E N T S: 
  
 NOW, THEREFORE, for and in consideration of the foregoing premises and for other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, Employer and Employee hereby agree as follows: 
  
 1.    CHIEF FINANCIAL OFFICER 
  
 1.1    Employment 
  
 Employer will employ Employee and Employee will provide services to Employer as its Chief Financial Officer (“CFO”) beginning on June 2, 2003 or such other date as mutually agreed by Employee and Employer’s Chief Executive
Officer. 
  
 1.2    Attention and Effort

  
 Employee will devote all of his productive time, ability,
attention and effort to Employer’s business and will skillfully serve its interests during the Term (as defined below). 
  
 1.3    Term 
  
 Unless otherwise terminated pursuant to paragraph 2 of this Agreement, Employee’s term of employment as CFO under this Agreement shall begin as set
forth in paragraph 1.1 and shall expire on June 2, 2005 (the “Term”). 
  

 1 

 1.4    Compensation 
  
 During the Term, Employer agrees to pay or cause to be paid to Employee, and
Employee agrees to accept in exchange for the services rendered hereunder by him, the following compensation: 
  
 (a)    Base Salary 
  
 Employee’s compensation as CFO shall consist, in part, of an annual base salary of Two Hundred Fifty Thousand Dollars ($250,000)
before all customary payroll deductions. Such annual base salary shall be paid in substantially equal installments and at the same intervals as other officers of Employer are paid. Employee’s salary shall be reviewed by Employer’s
Compensation Committee before January 1, 2004 to determine in its discretion whether it is appropriate to increase the base salary. 
  
 (b)    Bonus 
  
 Employee shall be eligible for a cash bonus for 2003 consistent with the existing program for senior managers, provided performance
targets applicable to such bonuses are met, and, provided further, any such bonus shall be pro-rated in the event of a termination without Cause. 
  
 (c)    Stock Options 
  
 Employee has been awarded a non-qualified stock option grant for the purchase of 110,000 shares of the Employer’s stock which is
evidenced by a separate Stock Option Agreement. Employee shall be eligible for consideration for additional grants of options annually. 
  
 1.5    Benefits 
  
 During the Term, Employee will be entitled to participate, subject to and in accordance with applicable eligibility requirements, in fringe benefit
programs as shall be provided from time to time by, to the extent required, action of Employer’s Board of Directors. 
  
 2.    TERMINATION 
  
 Employment of Employee pursuant to this Agreement may be terminated as follows, but in any case, the provisions of paragraph 4 hereof shall survive the
termination of this Agreement and the termination of Employee’s employment hereunder: 
  

 2 

 2.1    By Employer 
  
 With or without Cause (as defined below), Employer may terminate the
employment of Employee at any time during the term of employment upon giving Notice of Termination (as defined below). 
  
 2.2    By Employee 
  
 Employee may terminate his employment at any time, for any reason, upon giving Notice of Termination. 
  
 2.3    Automatic Termination 
  
 This Agreement and Employee’s employment hereunder shall terminate
automatically upon the death or total disability of Employee. The term “total disability” as used herein shall mean Employee’s inability to perform the duties set forth in paragraph 1 hereof for a period or periods aggregating
180 calendar days in any 12-month period as a result of physical or mental illness, loss of legal capacity or any other cause beyond Employee’s control, unless Employee is granted a leave of absence by the Employer. Employee and Employer hereby
acknowledge that Employee’s ability to perform the duties specified in paragraph 1 hereof is of the essence of this Agreement. Termination hereunder shall be deemed to be effective (a) at the end of the calendar month in which Employee’s
death occurs or (b) immediately upon a determination by the Employer of Employee’s total disability, as defined herein. 
  
 2.4    Termination in Connection With a Change in Control 
  
 Concurrent with the commencement of Employee’s employment hereunder as CFO, Employee and the Company shall enter into a
Change of Control Agreement, form of which is attached hereto as Exhibit A. Notwithstanding Sections 3.1 and 3.2 of this Agreement and in full substitution therefor, if Employee’s employment terminates under circumstances described in the
Change of Control Agreement, Employee’s rights upon termination will be governed by terms of the Change of Control Agreement and his right to termination payments under this Employment Agreement shall cease. 
  
 2.5    Notice 
  
 The term “Notice of Termination” shall mean at least 30
days’ written notice of termination of Employee’s employment, during which period Employee’s employment and performance of services will continue; provided, however, that Employer may, upon notice to Employee and without
reducing Employee’s compensation during such period, excuse Employee from any or all of his duties during such period. The effective date of the termination of Employee’s employment hereunder shall be the date on which such 30-day period
expires. 
  

 3 

 3.    TERMINATION PAYMENTS 
  
 In the event of termination of the employment of Employee during the Term, all compensation and benefits set forth in this
Agreement shall terminate except as specifically provided in this paragraph 3: 
  
 3.1    Termination by Employer 
  
 If Employer terminates Employee’s employment without Cause during the Term, Employee shall be entitled to receive (a) termination payments equal to twelve (12) months’ annual base salary, and (b) any unpaid
annual base salary which has accrued for services already performed as of the date termination of Employee’s employment becomes effective. Such payment shall be provided in equal monthly installments, less applicable deductions and tax
withholding, at regular payroll intervals. Employer agrees to continue Employee’s health insurance benefits, including current dependent coverage, for twelve (12) months following the date the Employee is terminated without Cause. Thereafter
Employee may self-pay health insurance under COBRA if he elects to do so. All other Employer benefits cease on the date of termination without Cause. If Employee is terminated by Employer for Cause during the Term, Employee shall not be entitled to
receive any of the foregoing benefits, other than those set forth in clause (b) above. In the event Employee obtains other employment during any salary continuation period hereunder following a termination without Cause, Employer’s obligation
shall be offset by the amount of salary or pay received from such other employment. 
  
 3.2    Termination by Employee 
  
 In the case of the termination of Employee’s employment by Employee, Employee shall not be entitled to any payments hereunder, other than those set forth in clause (b) of subparagraph 3.1 hereof if such
termination occurs during the Term. 
  
 3.3    Expiration of Term 
  
 In the case of a termination of Employee’s employment as a result of the expiration of the Term, Employee shall be entitled to receive termination payments consistent with those set forth in subparagraph 3.1 for a termination without
Cause. 
  
 3.4    Payment Schedule

  
 All payments under this paragraph 3 shall be made to
Employee at the same interval as payments of salary were made to Employee immediately prior to termination. 
  
 3.5    Cause 
  
 Wherever reference is made in this Agreement to termination being with or without Cause, “Cause” is limited to the occurrence of one or
more of the following events: 
  

 4 

 (a)    Failure or refusal to carry out the lawful duties of Employee described in
Section 1 hereof or any directions of the Board of Directors of Employer, which directions are reasonably consistent with the duties herein set forth to be performed by Employee; 
  
 (b)    Violation by Employee of a state or federal criminal law involving the commission of a crime
against Employer or a felony; 
  
 (c)    Current use by Employee of illegal substances; deception, fraud, misrepresentation or dishonesty by Employee; any act or omission by Employee which substantially impairs Employer’s business, good will or
reputation; or 
  
 (d)    Any other material
violation of any provision of this Agreement. 
  
 4.    NONCOMPETITION, NONDISCLOSURE AND NONDISPARAGEMENT 
  
 (a)    The nature of Employee’s employment with Employer has given Employee access to trade secrets and confidential information, including information about its technology and customers.
Therefore, during the one (1) year following termination of employment for whatever reason during the Term, Employee agrees that he will not engage in, be employed by, perform services for, participate in the ownership, management, control or
operation of, or otherwise be connected with, either directly or indirectly, any business or activity whose efforts are in competition with (i) the products or services manufactured or marketed by Employer at the time of this Agreement, or (ii) the
products or services which have been under research or development by Employer during the term of Employee’s employment, and which Employer has demonstrably considered for further development or commercialization. The geographic scope of this
restriction shall extend to anywhere Employer is doing business, has done business or intends to do business. Employee acknowledges that the restrictions are reasonable and necessary for protection of the business and goodwill of Employer.

  
 If, within one year of the date of termination, Employee
violates this paragraph 4, Employee shall forfeit any remaining termination payments provided under paragraph 3. 
  
 (b)    Employee further agrees that he will not at any time disclose confidential information about Employer relating to its business,
technology, practices, products, marketing, sales, services, finances or legal affairs. 
  
 (c)    Following termination of Employee for any reason, Employee and Employer shall refrain from making any derogatory comment in the future to the press or any individual or entity regarding the
other that relates to their activities or relationship prior to the date of termination, which comment would likely cause material damage or harm to the business interests or reputation of Employee or Employer. Employee acknowledges that the
non-disparagement provisions of this Section 4(c) are essential to Employer, that Employer would not enter into this Agreement if it did not include this Section 4(c), and that damages sustained by Employer as a result of a breach of this Section
4(c) cannot be adequately 

  

 5 

 
quantified or remedied by damages alone. Accordingly, Employer shall be entitled to injunctive and other equitable relief to prevent or curtail any breach of
this Section 4(c). 
  
 5.    REPRESENTATIONS AND WARRANTIES
OF EMPLOYEE 
  
 Employee represents and warrants that neither
the execution nor the performance of this Agreement by Employee will violate or conflict in any way with any other agreement by which Employee may be bound, or with any other duties imposed upon Employee by corporate or other statutory or common
law. 
  
 6.    FORM OF NOTICE 
  
 All notices given hereunder shall be given in writing, shall specifically
refer to this Agreement and shall be personally delivered or sent by registered or certified mail, return receipt requested, at the address set forth below or at such other address as may hereafter be designated by notice given in compliance with
the terms hereof: 
  

	 	If to Employee:	 	Brian V. Turner 

  

	 	                        	 	                                      
                                

  

	 	                        	 	                                      
                                

  

	 	If to Employer:	 	Coinstar, Inc. 

	 	                        	 	1800 114th Avenue SE 

	 	                        	 	Bellevue, WA 98004 

	 	                        	 	Attn: Chief Executive Officer 

	 	                        	 	cc:     General Counsel 

  

	 	Copy to:        	 	Perkins Coie LLP 

	 	                        	 	Attn: Kurt Becker 

	 	                        	 	1201 Third Ave., 48th Floor 

	 	                        	 	Seattle, WA 98101-3099 

  
 If notice is mailed, such notice shall be effective upon mailing, or if notice is personally delivered, it shall be effective upon receipt. 
  
 7.    ASSIGNMENT 
  
 This Agreement is personal to Employee and shall not be assignable by
Employee. Employer may assign its rights hereunder to (a) any corporation or other entity resulting from any merger, consolidation or other reorganization to which Employer is a party or (b) any corporation, partnership, association or other person
to which Employer may transfer all or substantially all of the assets and business of Employer existing at such time. All of the terms and provisions of this Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the
parties hereto and their respective successors and permitted assigns. 
  

 6 

 8.    WAIVERS 
  
 No delay or failure by any party hereto in exercising, protecting or enforcing any of its rights, titles, interests or
remedies hereunder, and no course of dealing or performance with respect thereto, shall constitute a waiver thereof. The express waiver by a party hereto of any right, title, interest or remedy in a particular instance or circumstance shall not
constitute a waiver thereof in any other instance or circumstance. All rights and remedies shall be cumulative and not exclusive of any other rights or remedies. 
  
 9.    ARBITRATION 
  
 Any controversies or claims arising out of or relating to this Agreement shall be fully and finally settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association then in effect (the “AAA Rules”), conducted by one arbitrator either mutually agreed upon by Employer and Employee or chosen in accordance with the AAA Rules,
except that the parties thereto shall have any right to discovery as would be permitted by the Federal Rules of Civil Procedure for a period of 90 days following the commencement of such arbitration and the arbitrator thereof shall resolve any
dispute which arises in connection with such discovery. The prevailing party shall be entitled to costs, expenses and reasonable attorneys’ fees, and judgment upon the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. This provision shall not preclude Employer from seeking court enforcement or relief based upon an alleged violation of Employee’s obligations under any noncompetition or non-disclosure agreement. 
  
 10.    AVAILABILITY AND CONSULTATION 
  
 If Employee’s employment with Employer terminates for any reason,
Employee will thereafter make himself reasonably available to Employer and counsel for Employer for the purpose of enabling Employer to defend against any legal claims in which Employer determines he may have knowledge or information. Employer will
reimburse Employee for reasonable out-of-pocket expenses incurred in connection with any consultations under this Section 10. 
  
 11.    AMENDMENTS IN WRITING 
  
 No amendment, modification, waiver, termination or discharge of any provision of this Agreement, nor consent to any departure therefrom by either party
hereto, shall in any event be effective unless the same shall be in writing, specifically identifying this Agreement and the provision intended to be amended, modified, waived, terminated or discharged and signed by Employer and Employee, and each
such amendment, modification, waiver, termination or discharge shall be effective only in the specific instance and for the specific purpose for which given. No provision of this Agreement shall be varied, contradicted or explained by any oral
agreement, course of dealing or performance or any other matter not set forth in an agreement in writing and signed by Employer and Employee. 
  

 7 

 12.    APPLICABLE LAW 
  
 This Agreement shall in all respects, including all matters of construction, validity and performance, be governed by, and
construed and enforced in accordance with, the laws of the state of Washington, without regard to any rules governing conflicts of laws. 
  
 13.    SEVERABILITY 
  
 If any provision of this Agreement shall be held invalid, illegal or unenforceable in any jurisdiction, for any reason, including, without limitation, the
duration of such provision, its geographical scope or the extent of the activities prohibited or required by it, then, to the full extent permitted by law (a) all other provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intent of the parties hereto as nearly as may be possible, (b) such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of any other provision
hereof, and (c) any court or arbitrator having jurisdiction thereover shall have the power to reform such provision to the extent necessary for such provision to be enforceable under applicable law. 
  
 14.    HEADINGS 
  
 All headings used herein are for convenience only and shall not in any way
affect the construction of, or be taken into consideration in interpreting, this Agreement. 
  
 15.    COUNTERPARTS 
  
 This Agreement, and any amendment or modification entered into pursuant to paragraph 11 hereof, may be executed in any number of counterparts, each of which counterparts, when so executed and delivered, shall be
deemed to be an original and all of which counterparts, taken together, shall constitute one and the same instrument. 
  
 16.    ENTIRE AGREEMENT 
  
 Except for the Proprietary Information and Invention Agreement executed by Employee as of the date hereof, this Agreement sets forth the entire
understanding between Employee and Employer, superseding any prior agreements or understandings, express or implied, pertaining to the terms of Employee’s employment with Employer. Employee acknowledges that in executing this Agreement, he does
not rely upon any representation or statement by any representative or agent of Employer concerning the subject matter of this Agreement. 
  

 8 

 IN WITNESS WHEREOF, the parties have executed and entered into this Agreement on the date set forth
above. 
  

	 	 	 	 	COINSTAR, INC.
				
	/S/    BRIAN V. TURNER        	 	 	 	By	 	/S/    DAVID W. COLE        
	
	 	 	 	 	 	

	BRIAN V. TURNER	 	 	 	Its	 	Chief Executive Officer
	
	 	 	 	 	 	

  

 9 

 Exhibit A 
  

CHANGE OF CONTROL AGREEMENT 
  
 This Change of Control Agreement (this “Agreement”), dated as of June 23, 2003, is between Coinstar, Inc. (the “Employer”), and Brian
V. Turner (the “Employee”). This Agreement is an exhibit to that certain Employment Agreement dated as of April 29, 2003 between the Employer and the Employee (the “Employment Agreement”). 
  
 The Board of Directors of the Employer (the “Board”) has determined
that it is in the best interests of the Employer and its stockholders to ensure that the Employer will have the continued dedication of the Employee, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined in
Appendix A to this Agreement, which is incorporated herein by this reference) of the Employer. The Board believes it is imperative to diminish the inevitable distraction of the Employee arising from the personal uncertainties and risks created by a
pending or threatened Change of Control, to encourage the Employee’s full attention and dedication to the Employer currently and in the event of any threatened or pending Change of Control, to encourage the Employee’s willingness to serve
a successor in an equivalent capacity, and to provide the Employee with reasonable compensation and benefits arrangements in the event that a Change of Control results in the Employee’s loss of equivalent employment. 
  
 In order to accomplish these objectives, the Board has caused the Employer to
enter into this Agreement. 
  
 1.    EMPLOYMENT

  
 1.1    Certain Definitions

  
 (a)    “Effective
Date” shall mean the first date during the Change of Control Period (as defined in Section 1.1(b)) on which a Change of Control occurs. 
  
 (b)    “Change of Control Period” shall mean the period commencing on the date of this Agreement and ending on the
second anniversary of the date the Employer gives notice to the Employee that the Change of Control Period shall be terminated. 
  
 1.2    Employment Period 
  
 The Employer hereby agrees to continue the Employee in its employ or in the employ of its affiliated companies, and the Employee hereby agrees to remain
in the employ of the Employer or its affiliated companies, in accordance with the terms and provisions of this Agreement, for the period commencing on the Effective Date and ending on the second anniversary of such date (the “Employment
Period”). 

 EXHIBIT A 
  

 1.3    Position and Duties 
  
 During the Employment Period, the Employee’s position, authority, duties
and responsibilities shall be at least reasonably commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 90-day period immediately preceding the Effective Date. 
  
 1.4    Employment Status 
  
 If prior to the Effective Date the Employee’s employment with the
Employer or its affiliated companies terminates, then the Employee shall have no further rights under this Agreement. 
  
 2.    ATTENTION AND EFFORT 
  
 During the Employment Period, and excluding any periods of vacation and sick leave to which the Employee is entitled, the Employee will devote all of his
professional productive time, ability, attention and effort to the business and affairs of the Employer and the discharge of the responsibilities assigned to him hereunder, and will use his best efforts to perform faithfully and efficiently such
responsibilities. 
  
 3.    COMPENSATION 
  
 During the Employment Period, the Employer agrees to pay or cause to be paid
to the Employee, and the Employee agrees to accept in exchange for the services rendered hereunder by him, the following compensation: 
  
 3.1    Salary 
  
 The Employee shall receive an annual base salary (the “Annual Base Salary”), at least equal to the annual salary established by the Board prior
to the Effective Date for the fiscal year in which the Effective Date occurs. The Annual Base Salary shall be paid in substantially equal installments and at the same intervals as the salaries of other officers of the Employer are paid. 

 
 3.2    Bonus 
  
 Employee may be entitled to receive, in addition to the Annual Base Salary,
an annual bonus in an amount to be determined by the Board of Directors of the Employer in its sole discretion. 
  
 3.3    Benefits 
  
 During the Employment Period, the Employee shall be entitled to participate, subject to and in accordance with applicable eligibility requirements, in
such fringe benefit programs as shall be provided to other executive employees of the Employer and its affiliated companies from time to time during the Employment Period by action of the Board (or any 
  

 2 

 EXHIBIT A 
  

 person or committee appointed by the Board to determine fringe benefit programs and other emoluments). 
  
 3.4    Expenses 
  
 During the Employment Period, the Employee shall be entitled to receive
prompt reimbursement for all reasonable employment expenses incurred by him in accordance with the policies, practices and procedures of the Employer and its affiliated companies in effect for the employees of the Employer and its affiliated
companies during the Employment Period or pursuant to an applicable travel policy. 
  
 4.    TERMINATION 
  
 Employment of the Employee during the Employment Period may be terminated as follows but, in any case, the nondisclosure and noncompetition provisions set forth in Section 4 of the Employment Agreement shall survive the termination of this
Agreement and the termination of the Employee’s employment with the Employer: 
  
 4.1    By the Employer or the Employee 
  
 Upon giving Notice of Termination (as defined below), the Employer may terminate the employment of the Employee with or without Cause (as defined in the
Employment Agreement), and the Employee may terminate his employment for Good Reason (as defined below) or for any reason, at any time during the Employment Period. 
  
 4.2    Automatic Termination 
  
 This Agreement and the Employee’s employment during the Employment Period shall terminate automatically pursuant to
Section 2.3 of the Employment Agreement upon the death or total disability of the Employee. The Employee and the Employer hereby acknowledge that the Employee’s presence and ability to perform the duties specified in Section 1.3 hereof is of
the essence of this Agreement. 
  
 4.3    Notice of Termination 
  
 Any termination by the Employer or by the Employee during the Employment Period shall be communicated by Notice of Termination to the other party given within 30 days in accordance with Section 2.5 of the Employment Agreement. The term
“Notice of Termination” shall mean a written notice which (a) indicates the specific termination provision in this Agreement relied upon and (b) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Employee’s employment under the provision so indicated. The failure by the Employer to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not
waive any right of the Employer hereunder or preclude the Employer from asserting such fact or circumstance in enforcing the Employer’s rights hereunder. 
  

 3 

 EXHIBIT A 
  

 4.4    Date of Termination 
  
 During the Employment Period, “Date of Termination” means (a) if
the Employee’s employment is terminated by reason of death, at the end of the calendar month in which the Employee’s death occurs, and (b) in all other cases, five days after the date of personal delivery of or mailing of, as applicable,
the Notice of Termination. The Employee’s employment and performance of services will continue during such five-day period; provided, however, that the Employer may, upon notice to the Employee and without reducing the
Employee’s compensation during such period, excuse the Employee from any or all of his duties during such period. 
  
 5.    TERMINATION PAYMENTS 
  
 In the event of termination of the Employee’s employment during the Employment Period, all compensation and benefits set forth in this Agreement
shall terminate except as specifically provided in this Section 5. 
  
 5.1    Termination by the Employer for Other Than Cause or by the Employee for Good Reason 
  
 If the Employer terminates the Employee’s employment other than for Cause or the Employee terminates his employment for Good Reason prior to the end
of the Employment Period, the Employee shall be entitled to: 
  
 (a)    Receive payment of the following accrued obligations (the “Accrued Obligations”): 
  
 (i)    the Employee’s Annual Base Salary through the Date of Termination to the extent not theretofore paid;

  
 (ii)    the product of
(x) the Annual Bonus payable with respect to the fiscal year in which the Date of Termination occurs and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of
which is 365; and 
  
 (iii)    any compensation previously deferred by the Employee (together with accrued interest or earnings thereon, if any) as such deferred compensation becomes payable under the deferral plan, and any accrued vacation
pay, in each case to the extent not theretofore paid; and 
  
 (b)    an amount as separation pay equal to the Employee’s Annual Base Salary. 
  
 5.2    Termination for Cause or Other Than for Good Reason 
  
 If the Employee’s employment shall be terminated by the Employer for Cause as defined in the Employment Agreement or by
the Employee for other than Good Reason 
  

 4 

 EXHIBIT A 
  

 during the Employment Period, this Agreement shall terminate without further obligation to the Employee other than
the obligation to pay to the Employee his Annual Base Salary through the Date of Termination plus the amount of any compensation previously deferred by the Employee (as such deferred compensation becomes payable under the deferral plan), in each
case to the extent theretofore unpaid. 
  
 5.3    Termination Because of Death or Total Disability 
  
 If the Employee’s employment is terminated by reason of the Employee’s death or total disability during the Employment Period, this Agreement shall terminate automatically without further obligations to the
Employee or his legal representatives under this Agreement, other than for payment of Accrued Obligations (which shall be paid to the Employee’s estate or beneficiary, as applicable in the case of the Employee’s death). 
  
 5.4    Payment Schedule 
  
 Payments under Section 5.1(a) shall be paid to the Employee in a lump sum in
cash within 30 days of the Date of Termination. Payments under Section 5.1(b) shall be paid to Employee at regular scheduled payroll intervals over the twelve (12) month period following the Date of Termination. 
  
 5.5    Good Reason 
  
 For purposes of this Agreement, “Good Reason” means any of the
following events or conditions and the failure to cure such event or condition within 20 days after receipt of written notice from Employee: 
  
 (a)    The assignment to the Employee of any duties inconsistent in any material respect with the Employee’s position, authority,
duties or responsibilities as contemplated by Section 1.3 hereof or any other action by the Employer which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated and inadvertent action
not taken in bad faith and which is remedied by the Employer promptly after receipt of notice thereof given by the Employee, and further excluding reasonable changes in particular duties and reporting responsibilities which may result from the
Employer becoming part of a larger business organization at some future time provided that such changes in the aggregate do not result in a material alteration in the Employee’s position, authority, duties or responsibilities; 
  
 (b)    Any failure by the Employer to comply with any of
the provisions of Section 3 hereof, other than an isolated and inadvertent failure not occurring in bad faith and which is remedied by the Employer promptly after receipt of notice thereof given by the Employee; 
  
 (c)    Any failure by the Employer to comply with and
satisfy Section 7 of the Employment Agreement, provided that the Employer’s successor has received at least ten days’ prior written notice from the Employer or the Employee of the requirements of Section 7 thereof; 
  

 5 

 EXHIBIT A 
  

 (d)    Any purported termination of the Employee’s employment that is not in
accordance with the definition of Cause under the Employment Agreement; or 
  
 (e)    A relocation of the Employer’s principal executive offices to a location more than 50 miles from the Seattle metropolitan area, or the Employer’s requirement that the Employee be
based anywhere other than within 50 miles of the Seattle metropolitan area, except for required travel on the Employer’s business to an extent substantially consistent with the Employee’s position, duties and responsibilities. 

 
 6.    REPRESENTATIONS, WARRANTIES AND OTHER CONDITIONS

  
 In order to induce the Employer to enter into this
Agreement, the Employee represents and warrants to the Employer as follows: 
  
 6.1    No Violation of Other Agreements 
  
 The Employee represents that neither the execution nor the performance of this Agreement by the Employee will violate or conflict in any way with any
other agreement by which the Employee may be bound. 
  
 6.2    Reaffirmation of Obligations 
  
 The Employee hereby acknowledges and reaffirms the Employee Proprietary Information and Inventions Agreement previously executed by Employee on the date hereof and Employee’s obligations under Section 4 of the Employment Agreement.

  
 IN WITNESS WHEREOF, the parties have executed and entered into
this Agreement on the date set forth above. 
  

	EMPLOYEE
	
	 /s/ BRIAN V. TURNER

	 Brian V. Turner

  
  

	 COINSTAR, INC.
  

		
	 By:
	 	 /s/ DAVID W. COLE

	 	 	 Its Chief Executive Officer

  

 6 

 APPENDIX A TO 
  
 CHANGE OF CONTROL AGREEMENT 
  

For purposes of this Agreement, a “Change of Control” shall mean: 
  
 (a)    A “Board Change” which, for purposes of this Agreement, shall have occurred if
individuals who, as of the date of this Agreement, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person (as hereinafter defined) other than the Board; or

  
 (b)    The acquisition by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of (i) 20% or more of either (A) the then
outstanding shares of Common Stock of the Employer (the “Outstanding Employer Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Employer entitled to vote generally in the election of directors
(the “Outstanding Employer Voting Securities”), in the case of either (A) or (B) of this clause (i), which acquisition is not approved in advance by a majority of the Incumbent Directors, or (ii) 33% or more of either (A) the Outstanding
Employer Common Stock or (B) the Outstanding Employer Voting Securities, in the case of either (A) or (B) of this clause (ii), which acquisition is approved in advance by a majority of the Incumbent Directors; provided, however, that
the following acquisitions shall not constitute a Change of Control: (w) any acquisition directly from the Employer or in connection with an offering of the Employer pursuant to a registration statement filed with and declared effective by the
Securities and Exchange Commission, (x) any acquisition by the Employer, (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Employer or any corporation controlled by the Employer or (z) any acquisition
by any corporation pursuant to a reorganization, merger or consolidation, if, following such reorganization, merger or consolidation, the conditions described in clauses (i), (ii) and (iii) of subsection (c) of this Appendix A are satisfied; or

  
 (c)    Consummation of a reorganization,
merger or consolidation approved by the stockholders of the Employer, in each case, unless, immediately following such reorganization, merger or consolidation, (i) more than 60% of, respectively, the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or consolidation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then 

 beneficially owned, directly or indirectly, by all or substantially all the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Employer Common Stock and the Outstanding Employer Voting Securities immediately prior to such reorganization, merger or consolidation in substantially the same proportion as their ownership
immediately prior to such reorganization, merger or consolidation of the Outstanding Employer Common Stock and the Outstanding Employer Voting Securities, as the case may be, (ii) no Person (excluding the Employer, any employee benefit plan (or
related trust) of the Employer or such corporation resulting from such reorganization, merger or consolidation and any Person beneficially owning, immediately prior to such reorganization, merger or consolidation, directly or indirectly, 33% or more
of the Outstanding Employer Common Stock or the Outstanding Voting Securities, as the case may be) beneficially owns, directly or indirectly, 33% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from
such reorganization, merger or consolidation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors, and (iii) at least a majority of the members of the
board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Board at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation; or

  
 (d)    Consummation of the following
events approved by the stockholders of the Employer (i) a complete liquidation or dissolution of the Employer or (ii) the sale or other disposition of all or substantially all the assets of the Employer, other than to a corporation with respect to
which immediately following such sale or other disposition, (A) more than 60% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all the individuals and entities who were the beneficial owners, respectively, of the Outstanding
Employer Common Stock and the Outstanding Employer Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding
Employer Common Stock and the Outstanding Employer Voting Securities, as the case may be, (B) no Person (excluding the Employer, any employee benefit plan (or related trust) of the Employer or such corporation and any Person beneficially owning,
immediately prior to such sale or other disposition, directly or indirectly, 33% or more of the Outstanding Employer Common Stock or the Outstanding Employer Voting Securities, as the case may be) beneficially owns, directly or indirectly, 33% or
more of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (C) at
least a majority of the members of the board of directors of such corporation were approved by a majority of the members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or
other disposition of assets of the Employer. 
  
 Notwithstanding
the foregoing, there shall not be a Change of Control if, in advance of such event, the Employee agrees in writing that such event shall not constitute a Change of Control. 
  

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