STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement is made this 9th day of January 2006, by and
between USA TECHNOLOGIES, INC., a Pennsylvania corporation ("USA" or "Company"),
and Rationalwave OnShore Equity Fund, L.P. ("Buyer").
BACKGROUND
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As more fully set forth herein, Buyer has purchased from the Company
4,000,000 shares of Common Stock of USA (the "Securities") for $.10 per share,
for an aggregate of $400,000.
AGREEMENT
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NOW THEREFORE, intending to be legally bound hereby, the parties hereto
agree as follows:
1. SUBSCRIPTION. Buyer hereby purchases the Securities from the Company
and the Company hereby sells and issues the Securities to Buyer. In full payment
for the Securities, Buyer has delivered to USA a check payable to USA or wire
transfer of immediately available funds in the amount of $400,000. USA has
delivered to Buyer a certificate representing 4,000,000 shares of USA Common
Stock duly registered in the name of Buyer.
No later than January 12, 2006, USA shall at its cost and expense prepare
and file and thereafter use its best efforts to have declared effective, an
appropriate Registration Statement with the Securities and Exchange Commission
("SEC") registering all of the Securities for resale by the holder under the
Securities Act of 1933, as amended ("Act"). The registration statement shall be
prepared as a "shelf" registration statement under Rule 415, and the Company
shall use its best efforts to have the registration statement maintained
effective until the earlier of (i) one year from the date hereof, or (ii) the
date that all of the Securities are resold pursuant to the registration
statement or otherwise.
2. VERIFICATION OF STATUS AS "ACCREDITED INVESTOR". Buyer hereby
represents to USA that it qualifies as an "accredited investor" as such term is
defined in Rule 501 promulgated under the Act because Buyer is a corporation or
partnership not formed for the specific purpose of acquiring the Securities with
total assets in excess of $5,000,000.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby makes
the following representations and warranties to Buyer:
(a) Issuance of Securities. The issuance of the Securities has been
duly authorized by USA, and are validly issued, fully paid and non-assessable.
(b) Corporate Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania, with all requisite power, authority and licensing
to own, operate and lease its properties and carry on its business as now being
conducted.
(c) Authority. The execution and delivery of this Agreement, and the
consummation of the transactions contemplated hereby have been duly authorized
by the Board of Directors of the Company and no other corporate proceedings on
the part of the Company are necessary to authorize this Agreement or to carry
out the transactions contemplated hereby.
4. REPRESENTATIONS BY BUYER. Buyer represents and warrants to the Company
as follows:
(a) Buyer has received, read and understands the provisions of each
of the following: (i) the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 2005; (ii) the Company's Current Report on Form
8-K filed with the Commission on September 28, 2005; (iii) the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 2005;
(iv) the Company's Registration Statement on Form S-1 filed with the
Commission on May 13, 2005 (File No. 333-124078); (v) the risk factors
incorporated by reference herein in Section 4(i) hereof; and (vi) the
definitive proxy statement of the Company filed with the SEC on November
17, 2005. Buyer understands that all of the foregoing together with this
Subscription Agreement shall be referred to herein as "Offering
Materials".
(b) Buyer has relied only upon the information presented and
contained in the Offering Materials. Buyer has 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 Securities offered by the Offering Materials and
has received answers which it considers to be reasonably responsive to
such questions. Buyer has had the opportunity to verify the accuracy of
the information contained in the Offering Materials.
(c) Buyer understands that it is subscribing for the Securities
without being furnished any literature or prospectus in connection with
the offering of the Securities other than the Offering Materials, and that
the offering of the Securities presented in the Offering Materials will
not have been scrutinized by the securities administrator or similar
bureau, agency, or department of the state of his residence.
(d) Buyer understands (i) that the Securities have not been
registered under the Act or registered or qualified under the securities
laws of the state of domicile of Buyer; (ii) that except as otherwise
provided herein, Buyer has no right to require such registration or
qualification; and (iii) that therefore Buyer must bear the economic risk
of the investment for an indefinite period of time because the Securities
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 Securities with the Securities and Exchange Commission, 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 Securities 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) Subject to being resold pursuant to an effective registration
statement, the Securities are being purchased for Buyer's 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 of USA
is currently traded on the OTC Bulletin Board under the symbol USTT, Buyer
also understands that there may not be any established public trading
market for the sale of the Securities.
(f) Buyer recognizes that the purchase of the Securities involves a
high degree of risk including those special risks set forth under the
caption "Risk Factors" and "Forward Looking Statements" in the Form S-1
Registration Statement of the Company (File No. 333-124078) filed with the
Securities and Exchange Commission on May 13, 2005, all of which are
incorporated herein by reference.
(g) Subject to the registration rights set forth above, Buyer
understands that its right to transfer the Securities 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). Buyer is familiar with Regulation M promulgated
under the Act and agrees to comply with its obligations thereunder.
(h) All information which Buyer has provided to the Company
including, but not limited to, its tax identification number, its
financial position, and status as an accredited investor, and its
knowledge of financial and business matters is true, correct and complete
as of the date of execution of this Stock Purchase Agreement. Buyer
understands that USA will rely in a material degree upon the
representations contained herein.
(i) Buyer maintains a principal place of business at the address
shown on the signature page of this Stock Purchase Agreement, at which
address Buyer has subscribed for the Shares.
(j) Buyer understands that legends may be placed on any certificate
representing the Securities 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.
(k) The execution and delivery of this Agreement, and the
consummation of the transactions contemplated hereby has been duly
authorized by Buyer.
5. SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS, AGREEMENTS AND
REMEDIES. Except as specifically provided otherwise herein, all representations,
warranties, covenants, agreements and remedies of the parties hereto, shall
survive the date hereof.
6. ENTIRE AGREEMENT. This Agreement constitutes the entire understanding
and agreement between the parties hereto with respect to the transactions
contemplated herein, supersedes all prior and contemporaneous agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties, and there have been no warranties, representations or promises, written
or oral, made by any of the parties hereto except as herein expressly set forth
herein.
7. BINDING AGREEMENT. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, as well as their respective heirs, personal
representatives, successors and assigns but no party may assign its obligations
hereunder.
8. PENNSYLVANIA LAW CONTROLS. This Agreement shall be construed in
accordance with and shall be governed by the laws of the Commonwealth of
Pennsylvania without regard to its conflicts of law rules.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Stock Purchase Agreement on the date first above written.
BUYER:
RATIONALWAVE ONSHORE EQUITY FUND, L.P.
Witness: /s/ X.Xxxxxxx /s/ Xxxx Xxxxxxxxxx
----------------------------- -----------------------------------
Print Name: Xxxx Xxxxxxxxxx
Title:
Address:
Rationalwave Associates
000 Xxxx Xx., Xxxxx 000
XX, XX 00000
Tax Identification Number:
00-0000000
USA TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
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Xxxxxx X. Xxxxxx, Xx.,
Chief Executive Officer
