2004-A COMMON STOCK
SUBSCRIPTION AGREEMENT
USA TECHNOLOGIES, INC.
000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Xx.,
Chief Executive Officer
Dear Xx. Xxxxxx:
I understand that the Company is offering for sale (the "Offering") up to
35,000,000 shares of Common Stock of the Company ("Common Stock") at a price of
$.15 per share.
The Offering will terminate on April 30, 2004, unless extended by the
Company for up to thirty additional days. There is no minimum offering amount,
and all subscription proceeds would be placed directly into the bank accounts of
the Company as subscription funds are received. If all of the Common Stock
offered in the private placement is sold, the Company would receive gross
proceeds of $5,250,000. The Company reserves the right to increase the amount of
Common Stock sold in this Offering and to extend the termination date of the
Offering at any time and from time to time without notice to the undersigned.
Promptly following the termination of the Offering, the Company shall file
(expected to be filed on or before June 30, 2004) and use its best efforts to
have declared effective, an appropriate registration statement with the
Securities and Exchange Commission registering all of the shares of Common Stock
for resale under the Securities Act of 1933, as amended (the "Act"). The Company
shall use its best efforts to keep the registration statement current and
effective for a period of two years from the completion date of the Offering.
For a period of six months following the termination of this Offering, the
Company shall not sell Equity Securities for a price per share of less than
fifteen cents ($.15)(subject to equitable adjustment for stock splits or stock
combinations or other stock reorganizations). For purposes hereof, "Equity
Securities" shall mean either Common Stock or any debt or equity securities
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which are convertible into, exercisable or exchangeable for, or carry the right
to receive additional shares of Common Stock. The restrictions of this paragraph
shall not apply to (i) any transaction involving issuances of securities in
connection with a merger, consolidation, acquisition or sale of assets, or in
connection with any strategic partnership or joint venture (the primary purpose
of which is not to raise equity capital), or (ii) in connection with the
disposition or acquisition of a business, product or license by the Company or
(iii) to the issuance of securities upon exercise or conversion of the Company's
options, warrants or other convertible securities (including notes) outstanding
as of April 16, 2004, or (iv) to the grant of additional options or warrants, or
the issuance of additional securities, under any Company stock option or stock
plan for the benefit of the Company's employees, directors or consultants or
under any Employee Benefit Plan (as defined in Rule 405 of the Act).
1. Subscription. The undersigned hereby subscribes to purchase the number
of shares of Common Stock indicated below in accordance with the terms and
conditions of the Offering Materials (as defined below). I understand that this
subscription may be rejected at the discretion of the Company, in whole or in
part, and that I must qualify as an "accredited investor" under Regulation D, as
promulgated by the Securities and Exchange Commission ("SEC" or "Commission")
under the Act.
2. Verification of Suitability and Status as "Accredited Investor" under
Regulation D. I understand that in order to subscribe for the Common Stock in
the Offering, I must be an "accredited investor" as defined in Rule 501 of
Regulation D under the Act and hereby represent and warrant to the Company that
I am an "accredited investor." In this regard, the undersigned is an "accredited
investor" by virtue of qualifying under one of the following categories (check
appropriate item):
the undersigned is a natural person whose individual net worth with
that person's spouse (if married), at the time of purchase exceeds
$1,000,000; or
the undersigned is a natural person who had an individual income in
excess of $200,000 during each of the last two calendar years, or
joint income with that person's spouse (if married) in excess of
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$300,000 in each of those years, and has a reasonable expectation of
reaching the same income level during the current calendar year; or
the undersigned is a corporation or partnership not formed for the
purpose of investing in the Company with total assets in excess of
$5,000,000; or
the undersigned is an investment company registered under the
Investment Company Act of 1940; or
the undersigned is an entity in which all the equity owners are
accredited investors.
3. Representations by Undersigned. The undersigned represents and warrants
to the Company as follows:
(a) I have received, read and understand the provisions of each of the
following: (i) the Company's Annual Report on Form 10-KSB for the fiscal
year ended June 30, 2003; (ii) the Company's Amendment No. 1 to
Registration Statement on Form SB-2 filed with the Securities and Exchange
Commission on December 19, 2003 (File No. 333-110148); (iii) the Risk
Factors section incorporated by reference herein in Section 3(i) hereof;
(iv) the Company's Form 10-QSB for the quarter ended September 30, 2003;
(v) the Company's Form 10-QSB for the quarter ended December 31, 2003;
(vi) the definitive proxy statement of the Company filed with the SEC on
December 15, 2003, and (vii) any report, form, or schedule filed by the
Company with the SEC under the Securities Exchange Act of 1934 on or prior
to the date of execution hereof by the undersigned. I understand that all
of the foregoing together with this Subscription Agreement shall be
referred to herein as "Offering Materials".
(b) I have relied only upon the information presented and contained in the
Offering Materials. I have had the opportunity to ask of the person or
persons acting on behalf of the Company any and all relevant questions in
connection with any aspect of the Company including, but not limited to,
the Common Stock offered by the Offering Materials and have received
answers which I consider to be reasonably responsive to such questions. I
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have had the opportunity to verify the accuracy of the information
contained in the Offering Materials.
(c) I understand that I am subscribing for the Common Stock without being
furnished any literature or prospectus in connection with the Offering
other than the Offering Materials, and that the Offering of the Common
Stock presented in the Offering Materials will not have been scrutinized
by the securities administrator or similar bureau, agency, or department
of the state of my residence.
(d) I understand (i) that the Common Stock has not been registered under
the Act or registered or qualified under the securities laws of the state
of my residence, (ii) except as provided above, that I have no right to
require such registration or qualification, and (iii) that therefore I
must bear the economic risk of the investment for an indefinite period of
time because the Common Stock may not be sold unless so registered or
qualified or unless an exemption from such registration and qualification
is available.
Although the Company has agreed to use its best efforts to register for
resale the Common Stock with the SEC, and to use its best efforts to keep
such registration statement current and effective, there can be no
assurance that such efforts will be successful. In any such event, the
Common Stock would not be registered for resale under the Act, and could
only be sold by the holder in reliance upon exemptions from registration
under the Act.
(e) The Common Stock is being purchased for my own account for investment
purposes only and not for the interest of any other person and is not
being purchased with a view to or for the resale, distribution,
subdivision or fractionalization thereof. Although the Common Stock is
currently traded on the OTC Bulletin Board under the symbol USTT, I also
understand that there may not be any established public trading market for
the sale of such securities.
(f) I am able to bear the economic risks related to purchase of the Common
Stock for an indefinite period of time (i.e., I am able to afford a
complete loss of the Common Stock I am subscribing to purchase).
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(g) My overall commitment to investments which are not readily marketable
is not disproportionate to my net worth and my investment in the Company
will not cause such overall commitment to become excessive.
(h) I have adequate means of providing for my current needs and possible
personal contingencies. I have no need for liquidity of the Common Stock
subscribed to be purchased hereby and have no reason to anticipate any
change in my personal circumstances, financial or otherwise, which might
cause or require any sale or distribution of such Common Stock subscribed
to be purchased.
(i) I recognize that the purchase of the Common Stock involves a high
degree of risk including those special risks set forth under the caption
"Risk Factors" and "Forward Looking Statements" in Amendment No. 1 to the
Form SB-2 Registration Statement of the Company filed with the Commission
on December 19, 2003 (No. 333-110148) all of which are incorporated herein
by reference.
(j) I understand that my right to transfer the Common Stock will be
restricted as set forth on the certificate evidencing the Common Stock.
Such restrictions include provisions against transfer unless such transfer
is not in violation of the Act, or applicable state securities laws
(including investor suitability standards).
(k) All information which I have provided to the Company including, but
not limited to, my Social Security or tax identification number, my
financial position, and status as an accredited investor, and my knowledge
of financial and business matters is true, correct and complete as of the
date of execution of this Subscription Agreement. I undertake to provide
promptly to the Company written notice of any material changes in my
financial position or otherwise and such information will be true, correct
and complete as of the date given. I understand that the Company will rely
in a material degree upon the representations contained herein.
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(l) The undersigned maintains a domicile or business at the address shown
on the signature page of this Subscription Agreement, at which address the
undersigned has subscribed for the Common Stock.
(m) I understand that a legend may be placed on any stock certificate
representing the Common Stock substantially to the following effect:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES STATUTES AND
REGULATIONS. SUCH SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES STATUTES AND REGULATIONS, UNLESS, IN THE OPINION
(WHICH SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION) OF
COUNSEL SATISFACTORY TO THE CORPORATION, SUCH REGISTRATION IS NOT REQUIRED.
(n) I understand that the Company may require me to meet additional
suitability standards if it deems it necessary or advisable to comply with
any applicable state securities or other laws.
4. Transferability of Subscription. The undersigned agrees not to transfer
or assign this Subscription Agreement, or any of the undersigned's interest
herein without the prior written consent of the Company.
5. Revocation. The undersigned agrees that the undersigned shall not
cancel, terminate or revoke this Subscription Agreement or any agreement of the
undersigned made hereunder and that this Subscription Agreement shall survive
the death or disability of the undersigned.
6. Common Stock Subscription. The undersigned hereby subscribes at $.15
per share for shares of Common Stock of USA Technologies, Inc., and agrees to
pay _________________ Dollars ($________) in full payment therefor by check
delivered herewith made payable to "USA Technologies, Inc." or by wire transfer
of immediately available funds to the Company. The Company shall deliver to the
undersigned at the address indicated below a certificate registered in the name
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of the undersigned representing the shares of Common Stock subscribed for by the
undersigned.
The Company may reject this offer in whole or in part by refunding all or
any portion of the subscription monies paid thereon. This Subscription
Agreement, upon acceptance by the Company shall be binding upon the heirs,
executors, administrators and successors of the undersigned. The undersigned
hereby represents that the undersigned has read this entire Subscription
Agreement and Offering Materials.
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IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement on this day of , 2004.
#1 #2
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Signature Signature
#1 #2
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Witness Witness
Investor #1 Print or Type Name Investor #2 Print or Type Name
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Occupation Telephone No. Occupation Telephone No.
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Telephone No. (Residence) Telephone No. (Residence)
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Social Security or Tax I.D. No. Social Security or Tax I.D. No.
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Xxxxxx Xxxxxxx Xxxxxx Xxxxxxx
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City State Zip City State Zip
ACCEPTED:
USA TECHNOLOGIES, INC.
Dated: By:
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