THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED ("ACT"), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S.
PERSONS UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT, OR AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE ACT IS AVAILABLE. ANY HEDGING TRANSACTIONS
INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
ACT.
COMMON STOCK
SUBSCRIPTION AGREEMENT
USA TECHNOLOGIES, INC.
000 Xxxxx Xxxxxx
Xxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Xx.,
Chief Executive Officer
Dear Xx. Xxxxxx:
The undersigned, CLIPPER HOLDINGS LIMITED (hereinafter referred to as
"the undersigned", "I", or "my") understands that the Company is offering for
sale (the "Offering") up to 2,000,000 shares of restricted Common Stock of the
Company ("Common Stock") at U.S. $1.50 per share. The Offering consists of 20
units at a price of U.S. $150,000 per unit ("Unit"), with each Unit consisting
of 100,000 shares of Common Stock. The Offering will terminate on June 15, 2000
and the minimum purchase by the undersigned is one Unit. Promptly following the
termination of the Offering, the Company shall file and use its best efforts to
have declared effective, an appropriate registration statement with the United
States Securities and Exchange Commission ("Commission") registering all of the
shares of Common Stock sold in the Offering for resale by the undersigned under
the Securities Act of 1933, as amended (the "Act").
1. Subscription. The undersigned hereby subscribes to become a
shareholder in the Company, and to purchase the number of Units in the Company
indicated below in accordance with the terms and conditions of the Offering
Materials (as defined below). I understand that this subscription for Units may
be rejected at the discretion of the Company, and that I must qualify as an
"accredited investor" under Regulation D, as promulgated by the Commission under
the Act.
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2. Verification of Suitability and Status as "Accredited
Investor" under Regulation D. I understand that in order to subscribe for Units
in the Offering, I must be an "accredited investor" as defined in Section 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 in 1998 and 1999, or joint income
with that person's spouse (if married) in excess of $300,000
in each of those years, and has a reasonable expectation of
reaching the same income level in 2000; or
_X_ 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 entity in which all the equity
owners are accredited investors each of which satisfy one of
the categories set forth herein; or
____the undersigned is a bank as defined in Section 3(a)(2) of
the Act, or a broker-dealer registered pursuant to section 15
of the Securities Exchange Act of 1934, or an investment
company registered under the Investment Company Act of 1940.
3. Representations by Undersigned. The undersigned represents
and warrants to the Company as follows:
(a) I have received from the Company, 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, 1999; and (ii) the
Company's Form 10-QSB Quarterly Report for the quarterly period ended
September 30, 1999; and (iii) the Company's Form 10-QSB Quarterly
Report for the quarterly period ended December 31, 1999; and (iv) the
Company's Form 10-QSB Quarterly Report for the quarterly period ended
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March 31, 2000; and (v) the Company's Form SB-2 Registration Statement
filed with the Commission on April 18, 2000(File No. 333-35070); and
(vi) the term sheet for this Offering dated June 5, 2000; and (vii) the
Risk Factors section incorporated by reference herein in Section 3(i)
hereof. 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 Units offered by the Offering
Materials and have received answers which I consider to be reasonably
responsive to such questions. I have had the opportunity to verify the
accuracy of the information contained in the Offering Materials.
(c) I understand that I am subscribing for Units without being
furnished any literature or prospectus in connection with the Offering
other than the Offering Materials, and that the Offering of Units
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) 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 under the Act, 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 by the undersigned
under the Act, and could only be sold by the undersigned in reliance
upon exemptions from registration under the Act, or in accordance
with Regulation S.
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(e) The Units are being purchased for my own account for
investment purposes only and not for the interest of any other person
and are 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 Unit(s) for an indefinite period of time (i.e., I am able to
afford a complete loss of the Unit(s) I am subscribing to purchase).
(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 Unit(s) 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 Unit(s) subscribed to be purchased.
(i) I recognize that the purchase of the Unit(s) involves a
high degree of risk including those special risks set forth under the
caption "Risk Factors" in the Form SB-2 Registration Statement of the
Company filed with the Commission on April 18, 2000 (No. 333-35070) 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 stock certificates. 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
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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.
(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 Units.
(m) I understand that a legend shall 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 ARE PROHIBITED
FROM BEING SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED (I) EXCEPT IN ACCORDANCE
WITH REGULATION S (RULE 901 THROUGH RULE 905, AND PRELIMINARY NOTES), OR (II) 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, OR (III) 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. HEDGING TRANSACTIONS INVOLVING
THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT.
(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.
(o) The undersigned certifies that it (i) is not a U.S.
person and is not acquiring the securities for the account or
benefit of any U.S. person, or (ii) is a U.S. person who
purchased securities in a transaction that did not require
registration under the Act.
(p) The undersigned agrees to resell the Common Stock
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only either (i) pursuant to registration under the Act, or (ii)
pursuant to an available exemption under the Act, or (iii) in
accordance with the provisions of Regulation S (Rule 901 through Rule
905, and Preliminary Notes); and agrees not to engage in hedging
transactions with regard to such Common Stock unless in compliance with
the Act.
4. Non-transfer. The undersigned acknowledges that the Company is
required to refuse to register any transfer by the undersigned of the Common
Stock not made either (i) pursuant to registration under the Act, or (ii)
pursuant to an available exemption from registration under the Act, or (iii) in
accordance with the provisions of Regulation S (Rule 901 through Rule 905, and
Preliminary Notes). As stated above, promptly following the termination of the
Offering, the Company shall file and use its best efforts to have declared
effective, an appropriate registration statement with the Commission registering
all of the shares of Common Stock sold in the Offering for resale by the
undersigned under the Act.
5. Transferability of Subscription. The undersigned agrees not to
transfer or assign this Subscription Agreement, or any of the undersigned's
interest herein.
6. 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.
7. Units Subscribed. The undersigned hereby subscribes at One Hundred
Fifty Thousand Dollars (U.S. $150,000) per Unit for five Unit(s) of USA
Technologies, Inc., each Unit consisting of 100,000 shares of Common Stock, and
agrees to pay $750,000 U.S. Dollars in full therefor by delivery to the Company
of immediately available funds no later than August 31, 2000.
This Subscription Agreement, upon acceptance by the Company shall be
binding upon the heirs, executors, administrators and successors of the
undersigned.
This Subscription Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania without regard to
its conflict of laws rules.
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The undersigned hereby represents that the undersigned has received and
read this entire Subscription Agreement and all of the Offering Materials.
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement on this 19th day of June, 2000.
CLIPPER HOLDINGS LIMITED
Type of Entity:
By: /s/
----------------------------
Signature
Corporation
-------------------------
/s/
-------------------------------
Place of Formation: Witness
Cayman Islands
------------------------- /s/
-------------------------------
Name and Title
(000) 000-0000
-------------------------------
Telephone No.
N/A
-------------------------------
Tax I.D. No.
0000 Xxx Xxxxxx, Xxxxx 0000
-------------------------------
Xxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx X0X0X0 Xxxxxx
------------------------------
City State Zip
ACCEPTED:
USA TECHNOLOGIES, INC.
Dated: June 26, 2000 By:/s/ Xxxxxx X. Xxxxxx, Xx.
------------------ ------------------------------
Title: Chief Executive Officer
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