Exhibit 4.31
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made this ___ day
of September 2003, by and between USA TECHNOLOGIES, INC., a Pennsylvania
corporation ("USA" or "Company"), and PROPHECY ASSET MANAGEMENT, INC., a
_____________ corporation ("Buyer").
Background
As more fully set forth herein, the Buyer has agreed to purchase
from the Company 750,000 shares of Common Stock of USA (the "Securities") for
$0.25 per share, for an aggregate of $_____________ ("Purchase Price").
Agreement
NOW THEREFORE, intending to be legally bound hereby, the parties hereto agree as
follows:
1. Subscription. The Buyer hereby purchases the Securities from the Company and
the Company hereby sells and issues the Securities to the Buyer. In full payment
for the Securities, the Buyer has delivered to USA, upon receipt of the
Securities, a check payable to USA or wire transfer of immediately available
funds in the amount of $187,500. USA has delivered to Buyer a certificate
representing the Buyer's interest in the __________ shares of USA Common Stock
duly registered in the name of Buyer.
No later than thirty days after the date hereof, USA shall at its cost and
expense prepare and file a Registration Statement filed on Form S-3
("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 ("33 Act"). In the event that Form S-3 is unavailable
and/or inappropriate for such a registration, the Company shall use such other
form as is available and appropriate for such a registration. The Registration
Statement shall be prepared as a "shelf" Registration Statement under Rule 415.
Thereafter, the Company will use its best efforts to have the Registration
Statement declared effective by the SEC within ninety days from the date hereof.
The Company shall use its best efforts to have the Registration Statement
maintained effective until the earlier of (i) one year from the effective date
thereof, or (ii) the date that all of the Securities are resold pursuant to the
Registration Statement or otherwise.
In the event that the Registration Statement to be filed by the Company is not
declared effective by the SEC within ninety days from the date hereof, then the
Company will pay Buyer as liquidated damages for such failure and not as a
penalty three percent (3%) of the Purchase Price ("Liquidated Damages Amount").
Such payment of the liquidated damages shall be made to Buyer in cash, within
five (5) calendar days of demand; provided, however, that the payment of such
liquidated damages shall not relieve the Company from its obligations to
register the Securities pursuant to this Agreement.
2. Verification of Status as "Accredited Investor". Buyer hereby
represents to USA that it qualifies as an "accredited investor" as such term is
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defined in Rule 501 promulgated under the 33 Act, with total assets in excess of
$5,000,000. Buyer hereby represents that it is not a corporation or partnership
formed for the specific purpose of acquiring the Securities.
3. Representations And Warranties of the Company. The Company hereby
makes the following representations and warranties to the Buyer:
(a) Issuance of Securities. The issuance of the Securities has
been duly authorized by USA, and the Securities 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-KSB for the
fiscal year ended June 30, 2002; (ii) the Company's Quarterly Report on
Form 10-QSB for the quarter ended September 30, 2002; (iii) the
Company's Quarterly Report on Form 10-QSB for the quarter ended
December 31, 2002; (iv) the Company's Quarterly Report on Form 10-QSB
for the quarter ended March 31, 2003; (v)the Company's Registration
Statement on Form SB-2 (File No. 333-101032) filed on November 6, 2002
with the SEC (as well as the first amendment thereto filed with the SEC
on April 17, 2003 and the second amendment thereto filed with the SEC
on August 5, 2003); (vi) the Company's Registration Statement on Form
SB-2 (File No. 333-107800) filed on August 8, 2003 with the SEC; (vii)
the definitive proxy statement of the Company filed with the SEC on
June 11, 2003; and (viii) the Risk Factors section incorporated by
reference herein in Section 4(f) hereof. Buyer understands that all of
the foregoing together with this 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.
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(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 its residence.
(d) Buyer understands (i) that the Securities have not been registered
under the 33 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 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
Securities would not be registered for resale under the 33 Act, and
could only be sold by the holder in reliance upon exemptions from
registration under the 33 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
SB-2 Registration Statement of the Company (File No. 333-107800) filed
with the SEC on August 8, 2003, 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 33 Act, or applicable state securities laws (including
investor suitability standards). Buyer is familiar with Regulation M
promulgated under the 33 Act and agrees to comply with its obligations
thereunder.
(h) All information which the 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 Agreement. Buyer
understands that USA will rely in a material degree upon the
representations contained herein.
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(i) Buyer maintains a principal place of business at the address shown
on the attached schedule A of this Agreement, at which address Buyer
has subscribed for the Securities.
(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.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement the date first above written.
BUYER: /s/ illegible
PROPHECY ASSET MANAGEMENT, INC.
Witness:________________ By: President
Title:
Address:
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Tax Identification Number:
--------------------------
USA TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.,
-----------------------------------
Chief Executive Officer
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