Document:

Ex-10.47

 

Exhibit 10.47

AIRCRAFT TIME SHARING AGREEMENT

     This Aircraft Time Sharing Agreement (“Agreement”) by and between Federal Express Corporation
(“Lessor”), a Delaware corporation, and                                          (“Lessee”), (individually a
“Party,” and collectively the “Parties”), is effective immediately and shall remain in effect,
unless terminated pursuant to the provisions of Article 1 below.

RECITALS

	 	A.	 	Lessor is the operator of aircraft (“Aircraft”) described in Exhibit A attached
to this Agreement and Lessor employs a fully qualified flight crew to operate the
Aircraft;
	 
	 	B.	 	If requested by Lessee, and subject to the terms of this Agreement, Lessor and
Lessee desire that Lessor lease the Aircraft and Lessor’s flight crews to Lessee and
that Lessee lease the Aircraft and Lessor’s flight crews from Lessor for Lessee’s
personal travel on a non-exclusive time sharing basis as defined in Section 91.501 (c)
(1) of the Federal Aviation Regulations (“FAR”);
	 
	 	C.	 	This Agreement sets forth the understanding of the Parties as to the terms
under which Lessor will provide Lessee with the use, on a periodic basis, of such
Aircraft; and
	 
	 	D.	 	The use of the Aircraft will at all times be pursuant to and in full compliance
with the requirements of FAR 91.501(b)(6), 91.501(c) (1), and 91.501(d).

     NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the
Parties agree as follows:

1. Lease; Term; Termination.

     (a) Upon request by Lessee, but subject to the terms and conditions of this Agreement, Lessor
shall lease the Aircraft to Lessee for Lessee’s personal travel pursuant to the provisions of FAR
Section 91.501(c)(1) and shall provide a fully qualified flight crew for flights scheduled in
accordance with the terms of this Agreement.

     (b) The term of this Agreement begins on the date that this Agreement is fully executed by
both Parties and ends automatically on the earlier of:

	 	(i)	 	the date that Lessee is not a full-time employee of
Lessor or any of its affiliates; and
	 
	 	(ii)	 	the date that Lessee is not permitted to lease Aircraft
under the FedEx Corporation Policy on Personal Use of Corporate Aircraft
(“Corporate Policy”).

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     (c) This Agreement may also be terminated by either Party by written notice to the other party
(in accordance with the provisions of Section 13 of this Agreement) for any reason or no reason and
such termination will be effective upon the date set out in such termination notice, or if a date
is not set out in such termination notice, the termination will be effective upon the date the
notice is deemed to have been given as provided in Section 13 of this Agreement.

2. Use of Aircraft.

     (a) Lessee may use the Aircraft from time to time subject to (i) the terms and conditions of
this Agreement, (ii) the approval of Lessor, and (iii) the Corporate Policy.

     (b) Lessee represents, warrants and covenants to Lessor that:

     1. Lessee will use each Aircraft for and on Lessee’s own account only and
will not use any Aircraft for the purposes of providing transportation of
passengers or cargo in air commerce for compensation or hire;

     2. Lessee shall refrain from incurring any mechanics or other lien in
connection with inspection, preventative maintenance, maintenance or storage of
the Aircraft, whether permissible or impermissible under this Agreement, and
Lessee shall not attempt to convey, mortgage, assign, lease or any way alienate
the Aircraft or create any kind of lien or security interest involving the
Aircraft or do anything or take any action that might mature into such a lien;
and

     3. During the term of this Agreement, Lessee will abide by and conform to
all such laws, governmental and airport orders, rules, and regulations as shall
from time to time be in effect relating in any way to the operation and use of
the Aircraft by a time-sharing Lessee.

     (c) Lessee shall provide Lessor’s Corporate Aviation department with notice of Lessee’s desire
to use the Aircraft and proposed flight schedule as far in advance of any given flight as possible.
Requests for flight time shall be made in accordance with Corporate Policy.

Lessee shall provide at least the following information for each proposed flight prior to scheduled
departure, as required by the Lessor or Lessor’s flight crew:

	 	1.	 	proposed departure point;
	 
	 	2.	 	destination;
	 
	 	3.	 	date and time of flight;
	 
	 	4.	 	the number and identity of anticipated
passengers and relationship to the Lessee;
	 
	 	5.	 	the nature and extent of luggage and/or cargo
to be carried;
	 
	 	6.	 	the date and time of return flight, if any; and

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	 	7.	 	any other information concerning the proposed
flight that may be pertinent or required by Lessor or Lessor’s
flight crew.

     (c) The use of Aircraft by Lessee is subject to the priority guidelines issued from time to
time by the Lessor and Corporate Policy. Lessor shall notify Lessee as to whether or not the
requested use of the Aircraft can be accommodated.

     (d) Lessor shall have exclusive authority over the scheduling of Aircraft, including the
selection of Aircraft to be used for any particular flight.

     (e) Lessor may add, substitute, or delete Aircraft from the list set out in Exhibit A.

3. Time-Sharing Arrangement.

     It is intended that this Agreement will meet the requirements of a “Time Sharing Agreement” as
that term is defined in FAR Part 91.501(c) (1) whereby Lessor will lease its Aircraft and flight
crew to Lessee.

4. Cost of Use of Aircraft.

     (a) In exchange for use of the Aircraft, Lessee shall pay to Lessor the direct operating costs
of the Aircraft as mutually agreed by the Parties; provided, that those direct operating costs
shall equal 200 percent of the cost of fuel for the flight and any deadhead flights that may be
required in connection with such travel.

     (b) Lessor will invoice, and Lessee will pay, for all other appropriate charges in the manner
set forth in the Corporate Policy.

     (c) In addition to the rent referenced in Section 4(a) above, Lessee shall also be assessed
the Federal Excise Taxes as imposed under Section 4261 of the Internal Revenue Code (the
“Commercial Transportation Tax”) and any segment fees associated with such flight(s). Lessee shall
pay to Lessor (for payment to the appropriate governmental agency) any Commercial Transportation
Tax applicable to flights of the Aircraft conducted under this Agreement.

5. Invoicing and Payment.

     All payments to be made to Lessor by Lessee under this Agreement shall be paid in the manner
set forth in the Corporate Policy. Lessor will pay to suppliers, employees, contractors and
government entities all expenses related to the operations of the Aircraft in the ordinary course.

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6. Insurance and Limitation of Liability.

     (a) The risk of loss during the period when any Aircraft is operated on behalf of Lessee under
this Agreement shall remain with Lessor and Lessor will retain all rights and benefits with respect
to the proceeds payable under policies of hull insurance maintained by Lessor that may be payable
as a result of any incident or occurrence while an Aircraft is being operated on behalf of Lessee
under this Agreement. Lessee shall be named as an additional insured on liability insurance
policies maintained by Lessor on the Aircraft with respect to flights conducted pursuant to this
Agreement. Any hull insurance policies maintained by Lessor on any Aircraft used by Lessee under
this Agreement shall include a waiver of any rights of subrogation of the insurers against Lessee.

     (b) Subject to the provisions of Sections 6(c) and 6(d) below, Lessor and Lessee agree as
follows:

     (1) Lessor shall indemnify Lessee and hold Lessee harmless from and against
any liabilities, obligations, losses, damages, claims, actions, suits, costs,
expenses and disbursements (individually a “Loss” and collectively, “Losses”)
imposed on, incurred by, or asserted against Lessee, arising out of or resulting
from the ownership, lease, maintenance, repair, possession, use, operation,
condition, or other disposition or application of the Aircraft. Lessor’s
obligation to indemnify Lessee under this Section 6 shall not, however, extend
to any Loss (i) arising out of the willful misconduct or gross negligence of
Lessee, (ii) arising from any failure of Lessee to comply with any covenants
required to be performed or observed by Lessee under this Agreement, or (iii)
arising from any breach by Lessee of any of Lessee’s warranties or
representations set out in this Agreement.

     (2) Lessee shall indemnify Lessor and shall hold Lessor harmless from and
against any Losses imposed on, incurred by or asserted against Lessor (i)
arising out of the willful misconduct or gross negligence of Lessee, (ii)
arising from any failure of Lessee to comply with any covenants required to be
performed or observed by Lessee under this Agreement, or (iii) arising from any
breach by Lessee of any of Lessee’s warranties or representations set out in
this Agreement.

     (3) Losses shall be determined after taking into account the available
proceeds of any applicable insurance policies.

     (c) Lessor shall not be liable to Lessee or any other person for loss, injury, or damage
occasioned by the delay or failure to furnish the Aircraft and crew pursuant to this Agreement for
any reason, including, without limitation, a delay or failure caused by government regulation or
authority, mechanical difficulty or breakdown, war, civil commotion, strikes or labor disputes,
weather conditions, acts of God or other circumstances beyond Lessor’s reasonable control.

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     (d) LESSOR SHALL IN NO EVENT BE LIABLE TO LESSEE OR LESSEE’S EMPLOYEES, AGENTS,
REPRESENTATIVES, GUESTS, OR INVITEES FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES
OF ANY KIND OR NATURE UNDER ANY CIRCUMSTANCES OR FOR ANY REASON INCLUDING ANY DELAY OR FAILURE TO
FURNISH THE AIRCRAFT OR CAUSED OR OCCASIONED BY THE PERFORMANCE OR NON-PERFORMANCE OF ANY SERVICES
COVERED BY THIS AGREEMENT.

     This Section 6 shall survive the expiration or termination of this Agreement.

7. Aircraft Maintenance.

     The Aircraft has been inspected and maintained in the twelve-month period preceding the date
of this Agreement in accordance with the provisions of FAR Part 91. Lessor shall, at its own
expense, inspect, maintain, service, repair, overhaul, and test the Aircraft in accordance with FAR
Part 91. The Aircraft will remain in good operating condition and in a condition consistent with
its airworthiness certification, including all FAA-issued airworthiness directives and mandatory
service bulletins.

8. No Warranty.

     NEITHER LESSOR (NOR ITS AFFILIATES) MAKES, HAS MADE, OR SHALL BE DEEMED TO MAKE OR HAVE MADE
ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO ANY
AIRCRAFT USED BY LESSEE UNDER THIS AGREEMENT OR ANY ENGINE, ENGINE COMPONENT OR AIRCRAFT COMPONENT,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY AS TO DESIGN, COMPLIANCE WITH SPECIFICATIONS, QUALITY
OF MATERIALS OR WORKMANSHIP, MERCHANTABILITY, FITNESS FOR ANY PURPOSE, USE OR OPERATION,
AIRWORTHINESS, SAFETY, PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT OR TITLE.

9. Operational Control.

     (a) Lessor shall be responsible for the physical and technical operation of the Aircraft and
the safe performance of all flights and shall retain full authority and control, including
exclusive operational control, and possession of the Aircraft at all times during the term of this
Agreement. Lessor’s operation of the Aircraft is subject to the operational guidelines of the
Lessor’s Corporate Aviation Department policies and procedures and FAR 91.

     (b) In accordance with applicable FARs, the qualified flight crew provided by Lessor will
exercise all required and/or appropriate duties and responsibilities in regard to the safety of
each flight conducted under this Agreement. In accordance with FAR Section 91.3, the
Pilot-In-Command shall have absolute discretion in all matters concerning the preparation of the
Aircraft for flight and the flight itself, the load carried and its distribution, the decision
whether or not a

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flight shall be undertaken, the route to be flown, the place where landings shall be made and
all other matters relating to operation of the Aircraft. Lessee specifically agrees that the flight
crew shall have final and complete authority to delay or cancel any flight for any reason or
condition which, in sole judgment of the Pilot-In-Command, could compromise the safety of the
flight and to take any other action which, in the sole judgment of the Pilot-In-Command, is
necessitated by considerations of safety. No such action of the Pilot-In-Command shall create or
support any liability to Lessee or any other person for loss, injury, damages or delay.

10. Governing Law.

     The Parties hereto acknowledge that this Agreement shall be governed by and construed in all
respects in accordance with the laws of the State of Tennessee.

11. Counterparts.

     This Agreement may be executed in one or more counterparts each of which will be deemed an
original, all of which together shall constitute one and the same agreement.

12. Entire Agreement.

     This Time Sharing Agreement and the Corporate Policy constitute the entire understanding
between the Parties with respect to its subject matter, and there are no representations,
warranties, rights, obligations, liabilities, conditions, covenants, or agreements other than as
expressly set forth in this Agreement.

13. Notices and Communications.

     All notices, requests, demands and other communications required or desired to be given under
this Agreement shall be in writing (except for notices given under Section 2(c) of this Agreement
if Corporate Policy allows verbal notices) and shall be deemed to be given: (i) if personally
delivered, upon actual receipt of such delivery; (ii) if sent by FedEx, upon actual receipt; or
(iii) if sent by facsimile, upon actual receipt of such facsimile, provided that a copy of such
facsimile notice is also sent by the method set out in (ii) above at the same time as the facsimile
is sent:

	 	 	 	 	 
	 

	 	If to LESSOR:
	 	Managing Director – Corporate Aviation
	 

	 	 	 	Federal Express Corporation
	 

	 	 	 	2461 Democrat Rd
	 

	 	 	 	20 Hanger
	 

	 	 	 	Memphis, TN 38118
	 

	 	 	 	US
	 

	 	 	 	Facsimile: (901) 397-0031

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	 	With copies to:
	 	Managing Director
	 

	 	 	 	Business Transactions
	 

	 	 	 	Federal Express Corporation
	 

	 	 	 	3620 Hacks Cross Road
	 

	 	 	 	Building B, 3rd Floor
	 

	 	 	 	Memphis, Tennessee 38125
	 

	 	 	 	Facsimile: (901) 434-7831
	 
	 	 	 	 
	 

	 	If to LESSEE:
	 	                                        
	 

	 	 	 	                                        
	 

	 	 	 	                                        

     Addresses may be changed by written notice given as provided herein and signed by the party
giving the notice.

14. Further Acts.

     Lessor and Lessee shall, from time to time, perform such other and further acts and execute
such other and further instruments as may be required by law or may be reasonably necessary to: (i)
carry out the intent and purpose of this Agreement; and (ii) establish, maintain and protect the
respective rights and remedies of the other party.

15. Successors and Assigns.

     Neither this Agreement nor any party’s interest herein shall be assignable to any other party
whatsoever. This Agreement shall inure to the benefit of and be binding upon the Parties hereto,
their heirs, representatives and successors.

16. Severability.

     In the event that any one or more of the provisions of the Agreement shall for any reason be
held to be invalid, illegal, or unenforceable, those provisions shall be replaced by provisions
acceptable to both Parties to this Agreement, and the remaining provisions of this Agreement shall
remain unimpaired. To the extent permitted by applicable law, the Parties waive any provision of
law that renders any provision of this Agreement unenforceable in any respect.

17. Flight Crew.

     Lessor shall employ, pay for and provide a qualified flight crew for all flight operations
under this Agreement.

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18. Base of Operations.

     For purposes of this Agreement, the base of operation of the Aircraft is Memphis-Shelby County
International Airport; provided, that such base may be changed from time to time upon notice from
Lessor to Lessee.

19. Title.

     Legal title to the Aircraft shall remain with Federal Express Leasing Corporation at all
times.

20. Truth-in-Leasing.

     Lessor shall mail a copy of this Agreement for and on behalf of both Parties to: Flight
Standards Technical Division, P.O. Box 25724, Oklahoma City, Oklahoma 73125, within twenty-four
(24) hours of its execution, as provided by FAR 91.23(c)(1). Additionally, Lessor agrees to
comply with the notification requirements of FAR Section 91.23 by notifying by telephone or in
person the Memphis, Tennessee FAA Flight Standards District Office at least forty-eight (48) hours
prior to the first flight under this Agreement.

     (a) LESSOR CERTIFIES THAT THE AIRCRAFT HAS BEEN INSPECTED AND MAINTAINED WITHIN THE 12-MONTH
PERIOD PRECEDING THE DATE OF THIS AGREEMENT IN ACCORDANCE WITH THE PROVISIONS OF PART 91 OF THE
FEDERAL AVIATION REGULATIONS AND THAT ALL APPLICABLE REQUIREMENTS FOR THE AIRCRAFT’S MAINTENANCE
AND INSPECTION UNDER SUCH REGULATIONS HAVE BEEN MET AND ARE VALID FOR THE OPERATIONS TO BE
CONDUCTED UNDER THIS AGREEMENT.

     (b) LESSOR, WHOSE ADDRESS APPEARS IN PARAGRAPH 13 ABOVE AND WHOSE AUTHORIZED SIGNATURE APPEARS
BELOW, AGREES, CERTIFIES AND ACKNOWLEDGES THAT WHENEVER THE AIRCRAFT IS OPERATED UNDER THIS
AGREEMENT, LESSOR SHALL BE KNOWN AS, AND SHALL IN FACT BE, THE OPERATOR OF THE AIRCRAFT, AND THAT
LESSOR UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION
REGULATIONS.

     (c) THE PARTIES UNDERSTAND THAT AN EXPLANATION OF FACTORS AND PERTINENT FEDERAL AVIATION
REGULATIONS BEARING ON OPERATIONAL CONTROL OF THE AIRCRAFT CAN BE OBTAINED FROM THE NEAREST FAA
FLIGHT STANDARDS DISTRICT OFFICE.

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     IN WITNESS WHEREOF, the Parties hereto have each caused this Agreement to be duly executed on
                                        , 200                    .

	 	 	 	 	 	 	 
	LESSOR:	 	LESSEE:	 	 
	 
	 	 	 	 	 	 
	Federal Express Corporation	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 

	 	 

Kirby A. Woehst
	 	 

	 	 
	 

	 	 	 	 

	 	 
	Its:

	 	Managing Director — Corporate Aviation
	 	     Print Name	 	 

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EXHIBIT A

Aircraft Subject to Time Sharing Agreement

     The Aircraft described below constitute the “Aircraft” referred to in this Agreement.

[Aircraft Registration Numbers]

10exv10w1

 

EXHIBIT
10.1

SEPARATION AGREEMENT AND GENERAL RELEASE

     This Separation Agreement and General Release (the “Agreement”) is entered into on this
11th day of July, 2007, by and between Hypercom Corporation, a Delaware corporation
(“Company”), and William Keiper (“Executive”).

RECITALS

     A. Executive presently is employed by Company as its Chief Executive Officer pursuant to the
terms of an Employment Agreement dated as of August 29, 2005, as it may have been amended in
writing (the “Employment Agreement”), a copy of which is attached to this Agreement as Exhibit A.

     B. Company and Executive have decided to terminate their relationship.

     C. Following the termination of the employment relationship between Company and Executive,
Executive has agreed to provide certain consulting services to Company in exchange for the
consideration described below.

     NOW THEREFORE, in consideration of the premises and the mutual promises hereinafter set forth,
Company and Executive agree as follows:

AGREEMENTS

          1.Resignation. By the execution of this Agreement, Executive submits, and Company
accepts, Executive’s resignation from his position as a member of the Board of Directors of Company
and as the Chief Executive Officer of Company, effective as of August 15, 2007 or such earlier date
following the execution of this Agreement as may be selected by Company and communicated to
Executive in writing (the “Resignation Date”). As of the Resignation Date, Executive also will be
deemed to automatically resign, without any further action by Executive, from any other position or
office he held with Company, as well as any position or office he held with any other entity or
employee benefit plan by reason of his association with Company.

          2. Continuing Responsibilities. Until Executive’s Resignation Date, Executive shall
continue to perform all of his normal duties and responsibilities as Company’s Chief Executive
Officer, except as otherwise specified in writing by Daniel D. Diethelm, the Chairman of Company’s
Board of Directors (the “Company Chairman”), and Company shall pay Executive his current base
salary and provide Executive with all other benefits set forth in the Employment Agreement through
the Resignation Date. In addition, Executive acknowledges and agrees that he is responsible for
all required CEO certifications related to public filings with the Securities and Exchange
Commission, as required by applicable law or regulations, with respect to the second quarter of
fiscal 2007 and prior periods during the term of his employment by the Company. Company
acknowledges that Executive has provided all required CEO certifications related to public filings
with the Securities and Exchange Commission as required by applicable law or regulations, with
respect to all periods prior to the second quarter of fiscal 2007. Executive also agrees to assist
Company’s Chairman with Company’s earnings call for

 

 

the second quarter of fiscal 2007, which call is presently scheduled for August 2, 2007.
Executive agrees to execute the necessary CEO certifications and assist with the earnings call for
the second quarter of fiscal 2007, so long as these responsibilities require action on the part of
Executive on or before the Resignation Date.

          3. Consulting Agreement. Simultaneous with the execution of this Agreement, Company
and Executive will enter into a Consulting Agreement in the form attached hereto as Exhibit B,
which calls for Executive to provide certain consulting services to Company during the 90-day
period beginning on the Resignation Date.

          4.  Severance Benefits. If Executive executes this Agreement within the 21-day period
referenced in Section 16, and then does not revoke this Agreement within the 7-day Revocation
Period referenced in Section 16, Executive will be entitled to receive the following severance
benefits from Company:

               (a)  Severance Payment. Executive shall receive a lump sum severance payment of
$450,000.00, with such payment to be made on the later of the Resignation Date or the first
business day following the expiration of the Revocation Period set forth in Section 16.

               (b)  Retention Bonus. Executive shall receive a lump sum retention bonus payment of
$50,000.00, with such payment to be made on the later of the Resignation Date or the first business
day following the expiration of the Revocation Period set forth in Section 16.

               (c)  Health Insurance. For a period of 18 months following the Resignation Date,
Company will pay or reimburse Executive for the cost of any COBRA premiums, if and to the extent
COBRA benefits are elected by Executive pursuant to Section 13 and the requirements of COBRA.
Company also will reimburse Executive for any medical expenses incurred by Executive that would
otherwise have been covered (if Executive’s employment had continued) pursuant to any Company
executive level health benefit program in effect on the Resignation Date, including but not limited
to all charges for Mayo Clinic related healthcare professionals’ tests and procedures, as long as
such expenses are incurred prior to the end of the 18-month period following the Resignation Date.
All claims for reimbursements for expenses incurred in calendar year 2007 must be submitted to
Company by February 1, 2008 and will be reimbursed by Company within thirty (30) days thereafter.
All claims for reimbursements for expenses incurred in calendar year 2008 must be submitted to
Company by February 1, 2009 and will be reimbursed by Company within thirty (30) days thereafter.
All claims for reimbursements for expenses incurred after December 31, 2008, but before the end of
the 18-month period must be submitted to Company by April 15, 2009 and will be reimbursed by
Company within thirty (30) days thereafter. The health insurance expenses reimbursed in one
taxable year under this Section will not affect the health insurance expenses eligible for
reimbursement in a different taxable year. Executive may not elect to receive cash or any other
benefit in lieu of the health insurance benefits provided by this Section. All reimbursements made
pursuant to the preceding sentences shall be consistent with past and current Company practice.

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               (d)  Relocation Expenses.

                    (i) As of the Resignation Date, Executive is relieved of any obligation he may have under the
terms of his Employment Agreement or otherwise, to reimburse Company for any relocation or related
expenses previously reimbursed by Company in connection with Executive’s move from San Francisco to
Paradise Valley, Arizona in October of 2006, including but not limited to any tax Gross-up
Payments.

                    (ii) In the event that within twelve (12) months from the Resignation Date, Executive moves
from his current residence in Paradise Valley, Arizona to the San Francisco Bay area (including the
counties of Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano or
Santa Cruz), Company will, at Executive’s election, directly pay or reimburse Executive for the
following moving costs actually incurred by Executive in connection with such move (the “Moving
Costs”):

                         (1) The costs of packing, insuring, moving, storage (for up to three months) and unpacking
Executive’s household goods; and

                         (2) The costs of shipping Executive’s automobiles; and

                         (3) A Gross-up Payment on the Moving Costs equal to 44.55% of the total amount of the Moving
Costs includable in Executive’s net income for tax purposes but for which Executive is not
otherwise entitled to a deduction (without regard to the Gross-up Payment) to cover Executive’s
federal and state tax liability relating to payment of the Moving Costs.

                         (4) Any Moving Costs to be paid or reimbursed by Company pursuant to this Section 4(d) shall
be paid or reimbursed by no later than the end of calendar year 2008. In addition, any Gross–up
Payment to be paid pursuant to this Section 4(d) shall be payable by Company upon thirty (30) days
written notice of the payment and amount due; provided however that in no event will such payment
be made after the close of the calendar year in which Executive remits payment of the taxes that
give rise to the Gross-up Payment.

                    (iii) Executive acknowledges and agrees that Company will have no obligation to pay any Moving
Costs or any Gross-up Payment pursuant to this Section if a third party has offered to or is
responsible for payment of such Moving Costs either as a result of an offer of employment or
otherwise.

               (e)  Retention of Equipment. Executive shall be entitled to retain all computer and
communication equipment provided for his use as of August 15, 2007 by Company. Executive shall
provide Company with a list of such equipment on August 15, 2007. Executive shall submit such
equipment to Company on, or as soon as possible after the termination of the Consulting Agreement
to allow Company to delete any and all Company information from the equipment.

               (f)  Stock Bonus. On the latest of (1) the Resignation Date, (2) the first business
day following the expiration of the Revocation Period set forth in Section 16, or (3) the first day
on which Executive may trade in Company stock following the issuance of the Press

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Release described in Section 10 below, Company will grant Executive 8,334 shares of Company
stock pursuant to the terms and provisions of the Hypercom Long-Term Incentive Plan which shares
shall be freely tradable. In addition, Company shall make a Gross-up Payment to Executive relating
to these shares equal to 44.55% of the value of the stock grant includable in Executive’s net
income for tax purposes (without regard to the Gross-up Payment) to cover Executive’s federal and
state tax liability relating to the stock grant. Any Gross-up Payment to be paid pursuant to this
Agreement shall be payable by Company upon thirty (30) days of written notice of the payment and
amount due; provided however that in no event will such payment be made after the close of the
calendar year in which Executive remits payment of the taxes that give rise to the Gross-up
Payment 

          5.  Options and Restricted Stock.

               (a) Executive agrees that the May 8, 2006 grant of an option for Executive to acquire 150,000
shares of Company stock at a price of $10.59 per share is hereby canceled.

               (b) Executive also agrees that the 100,000 shares of restricted stock granted to Executive
pursuant to Section 3(d) of the Employment Agreement have never been earned and will be
automatically forfeited upon execution of this Agreement.

               (c) Except as set forth in Section 5(a) of this Agreement, all of Executive’s options to
purchase common stock of Company, including:

                    (i) those granted under the 1997 Long-Term Incentive Plan, the 2000 Broad Based Incentive Plan
and the Nonemployee Directors’ Stock Option Plan, which have vested on or prior to the Resignation
Date; and

                    (ii) all other options the exercise price of which is less than the fair market value of
Hypercom common stock at the close of trading on the New York Stock Exchange on the Resignation
Date which have not yet vested

shall be considered vested options (the “Vested Options”) as of the Resignation Date under the
applicable award or granting agreement or instrument notwithstanding any provision to the contrary
in any such award or granting agreement or instrument.

               (d) In addition, the unvested portion of Executive’s stock options granted pursuant to Section
3(e) of the Employment Agreement shall fully vest as of the Resignation Date, and all 100,000
options under such grant shall be considered Vested Options whether or not the exercise price of
any of the options is less than the fair market value of such common stock on the Resignation Date.

               (e) Notwithstanding the terms of any award or granting agreement or instrument, Executive
shall have the later of (i) ninety (90) days from the Resignation Date or (ii) the expiration date
of such options, to exercise any and all Vested Options.

          6.  2007 Compensation. Company acknowledges that the Compensation Committee of the
Company’s Board approved an increase in base salary for Executive from

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$400,000 to $500,000 annually effective as of January 1, 2007, and Executive voluntarily
agreed to take only $450,000. For purposes of this Agreement and the Consulting Agreement,
Executive agrees that his base salary for 2007 shall be calculated at a rate of $450,000 per year.

          7.  Release of Company. In consideration of the promises and payments set forth in
this Agreement, Executive hereby releases and forever discharges Company and/or any of its
“Affiliates” from any and all claims, complaints, causes of action, and demands of any kind,
whether known or unknown, which Executive has, ever has had, or may have arising out of or related
to Executive’s employment or resignation from employment with Company, Executive’s service on
Company’s Board of Directors or the termination or cessation thereof, or otherwise, excepting those
arising out of this Agreement, the Consulting Agreement, the Indemnification Agreement referenced
in Section 8, Executive’s rights under all insurance policies providing benefits to Executive,
including, but not limited to, the Directors and Officers and Errors and Omissions policies, and
Executive’s rights under any option or restricted stock agreement entered, or agreed to be entered,
into between Company and Executive pursuant to the Hypercom Corporation Long-Term Incentive Plan or
any other plan or program pursuant to which Executive may have been granted options or restricted
shares in the past, other than the option agreement relating to the May 8, 2006 grant referred to
above, which option agreement Executive has agreed to cancel pursuant to Section 5(a) and the
restricted stock granted under Section 3(d) of the Employment Agreement referred to above, which
Executive has agreed to forfeit pursuant to Section 5(b).

          This Release is a FULL WAIVER AND RELEASE and includes, without limitation, any right,
claim, demand or cause of action arising under Title VII of the Civil Rights Act of 1964, as
amended; the Americans with Disabilities Act; the Family and Medical Leave Act; the Employee
Retirement Income Security Act of 1974 (“ERISA”); the Older Workers Benefit Protection Act; the
Fair Labor Standards Act; the Age Discrimination in Employment Act; the Rehabilitation Act of 1973;
the Workers Adjustment & Retraining Notification Act (“WARN”); the Consolidated Omnibus Budget
Reconciliation Act; the Fair Labor Standards Act; and any applicable state civil rights act and/or
any other federal, state, or local law or regulation. This Release also includes any contract or
tort causes of action arising from or in any way related to Executive’s employment relationship
with Company and/or any Affiliates, including any claims relating to Company’s right to terminate
Executive’s employment, including, but not limited to, any claims for wrongful discharge,
retaliatory discharge, breach of contract, breach of the covenant of good faith and fair dealing
and/or prima facie tort, except as arising out of this Agreement.

          This Release specifically includes any claims arising under Executive’s Employment Agreement
(other than for payment of Executive’s base salary and benefits through the Resignation Date) as
well as any written or oral amendments or supplements thereto. Executive acknowledges that he is
not entitled to receive any cash or other bonus compensation for Company’s current fiscal year.

          Notwithstanding any provision herein to the contrary, Executive does not release any claims or
rights Executive may have under any “employee benefit plan” (as that term is defined in regulations
issued pursuant to ERISA) sponsored by Company or any Affiliate.

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          If Executive executes this Agreement prior to his Resignation Date, on request Executive
agrees to execute a separate Release Agreement on the Resignation Date or within five (5) business
days thereafter, which includes a release the same as the release included in this Section 7.

          For purposes of this Agreement, the term “Affiliate” means and includes: (a) any subsidiary,
brother-sister or other organization that is treated as a single employer with Company pursuant to
Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986; and (b) any officer, owner,
director, employee, representative, or insurer of Company or any organization referred to in clause
(a); and (c) the successors and assigns of any organization or individual described in clauses (a)
or (b).

          8. Release of Executive. In consideration of the promises and payments set forth in
this Agreement, Company hereby releases and forever discharges Executive from any and all claims,
complaints, causes of action, and demands of any kind, whether known or unknown, which Company has,
ever has had, or may have arising out of or related to the performance of Executive’s services to
Company as a member of its Board of Directors or as its President and Chief Executive Officer, but
only to the extent to which Executive is entitled to indemnification with respect to such claim,
complaint, cause of action or demand pursuant to the terms of the Indemnification Agreement dated
August 1, 2006 entered into between Executive and Company. The purpose of this Section 8 is to
release Executive only from those claims, complaints, causes of action and demands with respect to
which he is entitled to indemnification and this Section 8 shall be interpreted in a manner
consistent with this purpose.

          9.  Confidential Information and Non-Disclosure. Executive hereby acknowledges that he
is subject to all of the terms and provisions of the Hypercom Employee Non-Disclosure Agreement
included as a part of his Employment Agreement, which is attached as Exhibit A to this Agreement
and that his obligations under such agreement survive the execution of this Agreement.

          10.  Press Release. Executive’s departure from Company shall be announced by Company
in a Press Release substantially in the form of Exhibit D attached to this Agreement. The attached
Press Release has been reviewed and approved by Executive. Any changes to the form of Exhibit D
will be subject to Executive’s prior review and written approval.

          11.
 Mutual Non-Disparagement. The parties agree that they will not, at any time, make
any comments about each other that are, or could be interpreted to be, disparaging or derogatory or
that paint the other party in a negative light. Specifically, Executive agrees, among other
things, that he will not make any disparaging, derogatory or negative comments about Company
officers, directors, owners, employees, products, policies or practices. Company’s obligation
pursuant to this Section is limited to comments made by members of Company’s Board of Directors or
Company’s officers. If either party breaches the commitments contained in this Section, that party
will be liable to the other for any resulting harm incurred.

          12.  Employee Benefit Plans. Executive acknowledges and agrees that, effective as of
the Resignation Date, he no longer will be eligible to participate in any employee

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benefit plans offered by Company. Executive also specifically acknowledges that after the
Resignation Date he will not be entitled to make any additional deferrals of compensation pursuant
to the Company 401(k) Plan or any other Company benefit plan that permits or requires contributions
by plan participants.

          13.  COBRA. Executive may avail himself of any rights to which he may be entitled to
continue health insurance coverage pursuant to the provisions of COBRA following his Resignation
Date. If Executive is eligible to elect COBRA coverage, and elects such coverage, Executive will
be obligated to pay the entire cost of such coverage, but shall be entitled to reimbursement to the
extent called for by Section 4(b).

          14.  Unpaid Salary and Expenses. Except as modified by this Agreement or the
Consulting Agreement:

               (a) Any unpaid salary earned by Executive prior to the Resignation Date, including any accrued
but unused vacation or Paid Time Off applicable to 2007 or any prior periods, but only to the
extent required by Company policy, as well as any claims for expenses incurred by Executive on
behalf of Company, will be paid to Executive promptly following the Resignation Date;

               (b) Executive acknowledges that he has received all amounts, and all benefits or other
entitlements, to which he was or may have been or may become entitled pursuant to the terms of his
Employment Agreement; and

               (c) Executive acknowledges that following the execution of this Agreement he will not have any
claim to any amounts, benefits, or other entitlements pursuant to his Employment Agreement (other
than his right to continue receiving his existing salary and benefits through the Resignation Date
pursuant to Section 2).

          15.  Cooperation. If Executive has knowledge or is alleged to have knowledge of any
matters which are the subject of any pending, threatened or future litigation or administrative
proceeding involving Company, Executive will make himself available to testify if and as necessary.
Executive also will make himself reasonably available to the attorneys representing Company in
connection with any such litigation or administrative proceeding for such purposes as they may deem
necessary, including but not limited to the review of documents, discussion of the case and
preparation for the trial or administrative proceeding. After termination of the Consulting
Agreement, Company will pay Executive a flat rate of $1,000 per half-day that Executive provides
services to the Company under this Section 15. This Agreement is not intended to and shall not be
construed so as to in any way limit or affect the testimony which Executive gives in any such
litigation; it is understood and agreed that Executive will at all times testify fully, truthfully
and accurately, whether in deposition, trial or otherwise.

          16. Period to Consider and Revocation Period. By his signature below, Executive
affirms that he has been given at least 21 days during which to consider the execution of this
Agreement. Executive may revoke this Agreement at any time within 7 days following his execution
of this Agreement (the “Revocation Period”) by executing the Revocation form

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attached hereto as Exhibit C. To be effective, the signed Revocation form must be received by
Doug Reich, General Counsel of Company, within the 7-day revocation period (the “Revocation
Period”). This Agreement shall not become effective or enforceable until the Revocation Period has
expired.

          17.  Independent Counsel. Executive acknowledges that he has been advised to consult
with an attorney of his choosing before executing this Agreement and that he has done so.

          18. Payroll Taxes. Any amounts due pursuant to this Agreement will be subject to all
applicable federal, social security and state payroll withholding taxes.

          19.  Governing Law. This Agreement is to be construed and interpreted in accordance
with the laws of the State of Arizona, except as those laws may be preempted by federal law.

          20. Severability. If any part or parts of this Agreement are found to be
unenforceable, the remaining portions of the Agreement shall remain in full force and effect.

          21. Compliance with Section 409A.

               (a) Compliance Strategy. Company has concluded that the severance payment provided by
Section 4(a), the treatment of previously reimbursed relocation expenses provided by Section 4(d)
and the retention of equipment benefit provided by Section 4(e) either do not constitute deferred
compensation subject to the requirements of Section 409A of the Internal Revenue Code of 1986 (the
“Code”) or qualify for the short-term deferral exception to the requirements of Section 409A of the
Internal Revenue Code, as such exception is described in Treas. Reg. § 1.409A-1(b)(4). Company
further has concluded the reimbursement of Moving Costs provided by Section 4(d) qualifies for the
separation pay exception to the requirements of Section 409A as such exception is described in
Treas. Reg. § 1.409A-1(b)(9) and the health insurance benefits provided by Section 4(b) comply with
the requirements of Section 409A pursuant to Treas. Reg. § 1.409A-3(i)(1)(iv). Further, Company has
concluded that the stock bonus provided by Section 4(e) and the extension of the exercise period
for outstanding options provided by Section 4(f) are not subject to the requirements of Section
409A.

               (b) Payment Provisions. In order to assure compliance with the short-term deferral
exception referred to above, if any of the payment called for by Section 4(a) is not made at the
time specified in that Section, such payment shall be made no later than March 15, 2008. If
Company fails to make a payment (including a transfer of Company stock), either intentionally or
unintentionally, within the period required by Section 4, but the payment is made within the same
calendar year, it will be treated as made within the period required by Section 4 pursuant to
Treas. Reg. § 1.409A-3(d). In addition, if a payment is not made due to a dispute between Company
and Executive, payments may be delayed in accordance with Treas. Reg. § 1.409A-3(g).

               (c) Ban on Acceleration or Deferral. Under no circumstances may the time or schedule
of any payment made or benefit provided pursuant to this Agreement be

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accelerated or subject to a further deferral except as otherwise permitted or required
pursuant to regulations and other guidance issued pursuant to Section 409A of the Code.

               (d) No Elections. Executive does not have any right to make any election regarding
the time or form of any payment due under this Agreement.

               (e) Compliant Operation and Interpretation. If Company determines, in the exercise of
its discretion, that no exception to the requirements of Section 409A is available, this Agreement
(or the portions thereof that do not qualify for any exception) shall be operated in compliance
with Section 409A and each provision of this Agreement shall be interpreted, to the extent
possible, to comply with Section 409A.

          22. Entire Agreement. Executive represents that he has carefully read and fully
understands all of the provisions of this Agreement, which sets forth the entire agreement between
Company and Executive with regard to Executive’s employment with Company and the termination of the
relationship between Executive and Company, except as set forth in the Consulting Agreement of even
date. Executive acknowledges that he has not relied upon any representation made by Company or any
representative of Company (including Company’s counsel), except as set forth in this Agreement.

          23. Impact on Other Agreements. Following the execution of this Agreement, all
agreements, including but not limited to the Employment Agreement, previously entered into between
Executive and Company relating to Executive’s employment by and services to Company are terminated
other than the following: (a) this Agreement; (b) the Consulting Agreement; (b) the Hypercom
Employee Non-Disclosure Agreement; (c) the Indemnification Agreement; (d) Executive’s rights under
insurance policies providing Executive benefits, including but not limited to, Directors and
Officers and Errors and Omissions insurance policies; (e) any option agreement or restricted stock
agreement entered, or agreed to be entered, into between Company and Executive pursuant to the
Hypercom Corporation Long-Term Incentive Plan, or any other plan or program pursuant to which
Executive may have been granted options or restricted shares in the past, other than the option
agreement relating to the May 8, 2006 grant referred to above, which agreement and grant have been
canceled pursuant to Section 5(a) or the grant of restricted stock under Section 3(d) of the
Employment Agreement which has been forfeited pursuant to Section 5(b) of this Agreement.

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     In witness whereof, Executive has executed this Agreement and Company has caused this
Agreement to be executed by its duly authorized officer, on this 11th day of July, 2007.

	 	 	 	 	 
	 	 	HYPERCOM CORPORATION
	 
	 	 	 	 
	 

	 	By
	 	/s/ Daniel Diethelm
	 

	 	 	 	 
	 

	 	 	 	Dan Diethelm, Chairman of the Board
	 
	 	 	 	 
	 	 	/s/ William Keiper
	 	 	 
	 	 	William Keiper

- 10 -

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