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AGREEMENT
THIS AGREEMENT (the "Agreement") is entered into as of September 15,
2000, by and among USA TECHNOLOGIES, INC., a corporation duly organized and
existing under the laws of the State of Pennsylvania (the "Company") and Swartz
Private Equity, LLC (hereinafter referred to as "Swartz").
RECITALS:
WHEREAS, pursuant to the Company's offering ("Equity Line") of up to
Twenty Million Dollars ($20,000,000), excluding any funds paid upon exercise of
the Warrants, of Common Stock of the Company pursuant to that certain Investment
Agreement (the "Investment Agreement") between the Company and Swartz dated on
or about September 15, 2000, the Company has agreed to sell and Swartz has
agreed to purchase, from time to time as provided in the Investment Agreement,
shares of the Company's Common Stock for a maximum aggregate offering amount of
Twenty Million Dollars ($20,000,000); and
WHEREAS, pursuant to the terms of the Investment Agreement, the Company
has agreed, among other things, to issue to Swartz Commitment Warrants, as
defined in the Investment Agreement, to purchase a number of shares of Common
Stock, exercisable for five (5) years from their respective dates of issuance.
TERMS:
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in Agreement and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
1. Issuance of Commitment Warrants. As compensation for entering into the Equity
Line, Swartz received a warrant convertible into 1,200,000 shares of the
Company's Common Stock, a copy of which is attached hereto as Exhibit A (the
"Commitment Warrants").
2. Issuance of Additional Warrants. On the Effective Date (as defined in the
Investment Agreement) and on each six month anniversary of the date of execution
by the Company and the Investor of the Investment Agreement (each, a "Six Month
Anniversary Date"), the Company shall issue to the Investor additional warrants
(the "Additional Warrants"), to purchase a number of shares of Common Stock, if
necessary, such that the sum of the number of Commitment Warrants and the number
of Additional Warrants issued to Investor shall equal at least "Y%" of the
number of fully diluted shares of Common Stock of the Company on such Six Month
Anniversary Date, where "Y" shall initially equal 5.0%, and shall be reduced by
0.5% for each Six Month Anniversary Date after the first Six Month Anniversary
Date. The Additional Warrants shall initially be exerciseable at the same price
as the Commitment Warrants (as most recently reset), shall have the same reset
provisions as the Commitment Warrants (which resets shall occur on each six
month anniversary of the date of issuance of the applicable Additional Warrant
throughout the term of the applicable Additional Warrant), shall have piggyback
registration rights and shall have a 10-year term. For purposes hereof, the
shares of Common Stock underlying the Purchase Warrants (as defined in the
Investment Agreement) and the Put Shares (as defined in the Investment
Agreement) shall not be taken into account in determining the number of fully
diluted shares of Common Stock of the Company as of any Six Month Anniversary
Date.
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3. Opinion of Counsel. Concurrently with the issuance and delivery of the
Commitment Opinion (as defined in the Investment Agreement) to the Investor, the
Company shall deliver to the Investor an Opinion of Counsel (signed by the
Company's independent counsel) covering the issuance of the Commitment Warrants
and the Additional Warrants, and the issuance of the Common Stock issuable upon
exercise of the Warrants and the Additional Warrants.
4. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements made
in and wholly to be performed in that jurisdiction, except for matters arising
under the Act or the Securities Exchange Act of 1934, which matters shall be
construed and interpreted in accordance with such laws.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
this 15th day of September, 2000.
USA TECHNOLOGIES, INC.
By: /s/ George R. Jensen, Jr.
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George R. Jensen, Jr.
Address: 200 Plant Avenue
Wayne, PA 19087
Telephone: (610) 989-0340
Facsimile: (610) 989-0344
INVESTOR:
SWARTZ PRIVATE EQUITY, LLC.
By: /s/ Eric S. Swartz
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Eric S. Swartz, Manager
Address: 1080 Holcomb Bridge Road
Bldg. 200, Suite 285
Roswell, GA 30076
Telephone: (770) 640-8130
Facsimile: (770) 640-7150
