SC 13D

Number of

shares

beneficially

owned by

each

reporting

person

with

SOLE VOTING POWER

SHARED VOTING POWER

3,800,000

SOLE DISPOSITIVE POWER

0

SHARED DISPOSITIVE POWER

3,800,000

0001193125-19-268574.txt : 20191016 0001193125-19-268574.hdr.sgml : 20191016 20191016170119 ACCESSION NUMBER: 0001193125-19-268574 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20191016 DATE AS OF CHANGE: 20191016 GROUP MEMBERS: ANTARA CAPITAL FUND GP LLC GROUP MEMBERS: ANTARA CAPITAL GP LLC GROUP MEMBERS: ANTARA CAPITAL MASTER FUND LP GROUP MEMBERS: HIMANSHU GULATI SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: USA TECHNOLOGIES INC CENTRAL INDEX KEY: 0000896429 STANDARD INDUSTRIAL CLASSIFICATION: CALCULATING & ACCOUNTING MACHINES (NO ELECTRONIC COMPUTERS) [3578] IRS NUMBER: 232679963 STATE OF INCORPORATION: PA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-79579 FILM NUMBER: 191153311 BUSINESS ADDRESS: STREET 1: 100 DEERFIELD LANE STREET 2: SUITE 300 CITY: MALVERN STATE: PA ZIP: 19355 BUSINESS PHONE: 6109890340 MAIL ADDRESS: STREET 1: 100 DEERFIELD LANE STREET 2: SUITE 300 CITY: MALVERN STATE: PA ZIP: 19355 FORMER COMPANY: FORMER CONFORMED NAME: USA ENTERTAINMENT CENTER INC DATE OF NAME CHANGE: 19931029 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Antara Capital LP CENTRAL INDEX KEY: 0001750183 IRS NUMBER: 824823093 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 500 FIFTH AVENUE, SUITE 2320 CITY: NEW YORK STATE: NY ZIP: 10110 BUSINESS PHONE: 646-762-8580 MAIL ADDRESS: STREET 1: 500 FIFTH AVENUE, SUITE 2320 CITY: NEW YORK STATE: NY ZIP: 10110 SC 13D 1 d818749dsc13d.htm SC 13D SC 13D

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. )*

USA Technologies, Inc.

(Name of Issuer)

Common Stock, no par value

(Title of Class of Securities)

90328S500

(CUSIP Number)

Lance Kravitz

Antara Capital LP

500 Fifth Avenue, Suite 2320

New York, New York 10110

(646) 762 8591

(Name/Address/Telephone Number of Person Authorized to Receive Notices and Communications)

October 9, 2019

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box ☐.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent.

*	The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

SCHEDULE 13D

CUSIP No. 90328S500


1		NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY) Antara Capital Master Fund LP
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) ☐ (b) ☐
3		SEC USE ONLY
4		SOURCE OF FUNDS (SEE INSTRUCTIONS) OO
5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ☐
6		CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands

Based on 63,808,481 shares of Common Stock (defined below) issued and outstanding, represented by (i) 60,008,481 shares of Common Stock issued and outstanding as of October 9, 2019, as determined in reliance on a representation to that effect made by the Issuer in the Stock Purchase Agreement (defined below), plus (ii) 3,800,000 shares of Common Stock issued to Antara Capital Master Fund LP in connection with the Stock Purchase Agreement.

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CUSIP No. 90328S500


1		NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY) Antara Capital Fund GP LLC
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) ☐ (b) ☐
3		SEC USE ONLY
4		SOURCE OF FUNDS (SEE INSTRUCTIONS) OO
5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ☐
6		CITIZENSHIP OR PLACE OF ORGANIZATION Delaware

- 3 -

CUSIP No. 90328S500


1		NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY) Antara Capital LP
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) ☐ (b) ☐
3		SEC USE ONLY
4		SOURCE OF FUNDS (SEE INSTRUCTIONS) OO
5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ☐
6		CITIZENSHIP OR PLACE OF ORGANIZATION Delaware

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CUSIP No. 90328S500


1		NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY) Antara Capital GP LLC
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) ☐ (b) ☐
3		SEC USE ONLY
4		SOURCE OF FUNDS (SEE INSTRUCTIONS) OO
5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ☐
6		CITIZENSHIP OR PLACE OF ORGANIZATION Delaware

- 5 -

CUSIP No. 90328S500


1		NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON (ENTITIES ONLY) Himanshu Gulati
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) ☐ (b) ☐
3		SEC USE ONLY
4		SOURCE OF FUNDS (SEE INSTRUCTIONS) OO
5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ☐
6		CITIZENSHIP OR PLACE OF ORGANIZATION New York

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Item 1. Security and Issuer

This Schedule 13D relates to the common stock, without par value (“Common Stock”), of USA Technologies, Inc., a Pennsylvania corporation (“USAT” or the “Issuer”). The address of the principal executive office of USAT is 100 Deerfield Lane, Suite 140, Malvern, PA 19355.

Item 2. Identity and Background

(a)	This Schedule 13D is filed by

(i)

Antara Capital Master Fund LP, a Cayman Islands exempted limited partnership (“Antara Master Fund”), with respect to the Common Stock directly and beneficially owned by it.

(ii)

Antara Capital Fund GP LLC, a Delaware limited liability company (“Antara Fund GP”), with respect to the Common Stock indirectly and beneficially owned by it.

(iii)

Antara Capital LP, a Delaware limited partnership (“Antara Capital”), with respect to the Common Stock indirectly and beneficially owned by it.

(iv)

Antara Capital GP LLC, a Delaware limited liability company (“Antara GP”), with respect to the Common Stock indirectly and beneficially owned by it.

(v)

Himanshu Gulati, an individual (“Mr. Gulati”), with respect to the Common Stock indirectly and beneficially owned by him.

Each of the foregoing is referred to as a “Reporting Person” and collectively as the “Reporting Persons.”

(b)	The principal business and principal office of each of the Reporting Persons is 500 Fifth Avenue, Suite 2320, New York, New York 10110.

(c)

The principal business of the Reporting Persons is investment management and investing in securities and other financial instruments. Antara Master Fund makes investments for its own account. The general partner of Antara Master Fund is Antara Fund GP. The investment manager of Antara Master Fund is Antara Capital. The general partner of Antara Capital is Antara GP. The sole member of Antara GP and Antara Fund GP is Mr. Gulati.

(d)	No Reporting Person, has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e)

No Reporting Person, has, during the last five years, been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3. Source and Amount of Funds or Other Consideration

Pursuant to the Stock Purchase Agreement (as defined in Item 6 below), the aggregate purchase price for the Shares (as defined in Item 6 below) was $19,950,000. The source of funding for the transactions pursuant to which the Reporting Persons obtained beneficial ownership of the Shares was the investment capital of Antara Master Fund.

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Item 4. Purpose of Transaction

The Reporting Persons acquired the Shares for investment purposes. The Reporting Persons review on a continuing basis their investment in the Issuer. Based on such review and subject to the terms of the Stock Purchase Agreement and the Non-Disclosure Agreement (as defined in Item 6 below), one or more of the Reporting Persons, individually or in the aggregate, from time to time, may acquire, or cause to be acquired, through open market purchases, privately negotiated agreements or otherwise, additional securities or assets of the Issuer or its subsidiaries, dispose of, or cause to be disposed, securities of the Issuer or its subsidiaries, enter into or unwind hedging or other derivative transactions with respect to securities of the Issuer or its subsidiaries, form joint ventures with the Issuer or its subsidiaries, pledge their interest in securities of the Issuer or its subsidiaries as a means of obtaining liquidity or as credit support for loans or for any other purpose, or formulate other purposes, plans or proposals, and/or take, encourage or support any other action which the Reporting Persons may deem to be appropriate in the circumstances including an extraordinary corporate transaction, regarding the Issuer, its subsidiaries and/or any of their respective securities or assets, in light of the Reporting Persons’ investment mandates and the general investment and trading policies of the Reporting Persons, the Issuer’s business and prospects, financial condition and operating results, general market and industry conditions and/or other factors. In addition, subject to the terms of the Stock Purchase Agreement and the Non-Disclosure Agreement, the Reporting Persons and their representatives and advisors have and may in the future communicate with the board of directors, members thereof and management of the Issuer or its subsidiaries concerning the types of transactions disclosed in this paragraph and/or the types of actions set forth in subparagraphs (a)–(j) of Item 4 of Schedule 13D, including but not limited to the acquisition of equity securities of the Issuer or its subsidiaries and the exploration by the Issuer of strategic alternatives. Furthermore, the Reporting Persons may exercise any and all of their rights in a manner consistent with their direct and indirect equity interests, contractual rights and restrictions and other duties, if any. If the Reporting Persons were to acquire additional equity of the Issuer, the Reporting Persons’ ability to influence the management, the board of directors or the policies of the Issuer may increase. Moreover, subject to the terms of the Stock Purchase Agreement and the Non-Disclosure Agreement, from time to time the Reporting Persons and their representatives and advisors have and may in the future communicate with some or all of the following: each other, the board of directors, members thereof, management or representatives of the Issuer, other current and prospective security holders or lenders of the Issuer, industry participants, businesses in the industry and interested parties, in each case, concerning the Issuer. The foregoing potential actions and/or communications could involve one or more of the events referred to in subparagraphs (a)–(j) of Item 4 of Schedule 13D.

The information set forth in Item 6 below is incorporated by reference in its entirety into this Item 4.

Except as set forth in this Schedule 13D, or such as would occur upon or in connection with completion of, or following, any of the actions discussed herein, none of the Reporting Persons presently has any additional plans or proposals that relate to or would be required to be described in Schedule 13D. The Reporting Persons reserve the right to change their intentions with respect to any and all matters referred to in subparagraphs (a)–(j) of Item 4 of Schedule 13D.

Item 5. Interest in Securities of the Issuer

(a) The Reporting Persons beneficially own, in the aggregate, 3,800,000 shares of Common Stock pursuant to the Stock Purchase Agreement. For a more detailed description of the Stock Purchase Agreement, see Item 6 below, which description is incorporated by reference herein in response to this Item 5.

As of the date hereof, the Reporting Persons each beneficially own 3,800,000 shares of Common Stock, which represents 5.96% of the Common Stock issued and outstanding by USAT. The aggregate percentage of Common Stock reported owned by each person named herein is based upon 63,808,481 shares of Common Stock issued and outstanding, represented by (i) 60,008,481 shares of Common Stock issued and outstanding as of October 9, 2019, as determined in reliance on a representation to that effect made by the Issuer in the Stock Purchase Agreement (defined below), plus (ii) 3,800,000 shares of Common Stock issued to Antara Capital Master Fund LP in connection with the Stock Purchase Agreement.

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Antara Master Fund directly beneficially owns the Shares issued pursuant to the Stock Purchase Agreement. Antara Fund GP, Antara GP and Antara Capital are deemed to have beneficial ownership of the Shares owned beneficially by Antara Master Fund. Mr. Gulati is deemed to have beneficial ownership of the Shares owned beneficially by each of the foregoing Reporting Persons.

(b) Each of the Reporting Persons has the shared power to vote or direct the vote and shared power to dispose or to direct the disposition of the Common Stock reported for it, either for its own benefit or for the benefit of its investment clients or its partners, as the case may be.

(c) Except as provided in Item 6 hereof, all transactions in the capital stock of USAT effected during the past sixty (60) days on behalf of the Reporting Persons over which the Reporting Persons have investment discretion are set forth in Schedule I attached hereto and incorporated herein by reference.

(d) Except as otherwise described in this Schedule 13D, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, securities covered by this Section 13D.

(e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

The Reporting Persons are directly or indirectly party to the following arrangements with the Issuer:

(a) Stock Purchase Agreement

Pursuant to a certain Stock Purchase Agreement, dated October 9, 2019 (the “Closing Date”), by and between USAT and Antara Master Fund (the “Stock Purchase Agreement), USAT sold to Antara Master Fund 3,800,000 shares of Common Stock (the “Shares”) at a price of $5.25 per share for an aggregate purchase price of $19,950,000. Antara Master Fund has agreed not to dispose of the Shares for a period of ninety (90) days from the Closing Date.

The foregoing summary description of the material terms of the Stock Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Stock Purchase Agreement, which is filed as Exhibit 2 and is incorporated herein by reference in its entirety.

(b) Registration Rights Agreement

Pursuant to the Stock Purchase Agreement, USAT and Antara Master Fund entered into a Registration Rights Agreement, dated October 9, 2019 (the “Registration Rights Agreement”), pursuant to which USAT has agreed, at its expense, to file a registration statement under the Securities Act of 1933, as amended, with the Securities and Exchange Commission covering the resale of the Shares by Antara Master Fund (the “Registration Statement”). USAT will be required to pay certain negotiated cash payments to Antara Master Fund in the event that the Registration Statement is not filed within thirty (30) days of the Closing Date or if the Registration Statement is not declared effective within three (3) months of the Closing Date, subject to the terms of the Registration Rights Agreement.

The foregoing summary description of the material terms of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Registration Rights Agreement, which is filed as Exhibit 3 and is incorporated herein by reference in its entirety.

(c) Debt Commitment Letter

On the Closing Date, USAT also entered into a Debt Commitment Letter (the “Debt Commitment Letter”) with Antara Capital and certain of its affiliates, pursuant to which Antara Capital has committed to extend to USAT a $30 million senior secured term loan facility (the “Term Facility”). The Term Facility is subject to various closing

- 9 -

conditions, including the execution and delivery of definitive loan documentation by USAT and Antara Capital on or before October 31, 2019. Pursuant to the Debt Commitment Letter, USAT will draw $15 million of the Term Facility concurrently with the execution of the definitive loan documentation, and subject to the terms of the definitive loan documentation, will draw the remaining $15 million during the period commencing on the nine-month anniversary and terminating on the eighteen-month anniversary of the execution of the definitive loan documentation. The outstanding amount of the draws under the Term Facility will bear interest at 9.75% per annum, payable monthly in arrears.

The foregoing summary description of the material terms of the Debt Commitment Letter does not purport to be complete and is qualified in its entirety by reference to the full text of the Debt Commitment Letter, which is filed as Exhibit 4 and is incorporated herein by reference in its entirety.

(d) Non-Disclosure Agreement

On September 30, 2019, USAT and Antara Capital entered into a non-disclosure agreement (the “Non-Disclosure Agreement”), pursuant to which Antara Capital agreed to customary non-disclosure and non-use obligations for a one-year period (the “Restricted Period”), subject to certain exceptions. The Non-Disclosure Agreement also requires that Antara Capital abide by customary standstill and employee non-solicitation obligations during the Restricted Period, subject to certain conditions and exceptions.

The foregoing summary description of the material terms of the Non-Disclosure Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Non-Disclosure Agreement, which is filed as Exhibit 5 and is incorporated herein by reference in its entirety.

The information set forth in Items 3 and 5 of this Schedule 13D is incorporated by reference in its entirety into this Item 6.

Item 7. Material to be Filed as Exhibits


Exhibit		Description

1		Joint Filing Agreement, dated October 16, 2019, among Antara Capital Master Fund LP, Antara Capital Fund GP LLC, Antara Capital GP LLC, Himanshu Gulati and Antara Capital LP.

2		Stock Purchase Agreement, dated October 9, 2019, by and between USA Technologies, Inc. and Antara Capital Master Fund LP. Incorporated by reference to Exhibit 10.1 to USAT’s Current Report on Form 8-K (File No. 001-33365), filed October 9, 2019.

3		Registration Rights Agreement, dated October 9, 2019, by and between USA Technologies, Inc. and Antara Capital Master Fund LP. Incorporated by reference to Exhibit 10.2 to USAT’s Current Report on Form 8-K (File No. 001-33365), filed October 9, 2019.

4		Debt Commitment Letter, dated October 9, 2019, by and between USA Technologies, Inc. and Antara Capital LP. Incorporated by reference to Exhibit 10.3 to USAT’s Current Report on Form 8-K (File No. 001-33365), filed October 9, 2019.

5		Non-Disclosure Agreement, dated September 30, 2019, by and between Antara Capital LP and USA Technologies, Inc.

- 10 -

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.


ANTARA CAPITAL MASTER FUND LP

By:		Antara Capital LP not in its individual corporate capacity, but solely as Investment Advisor and agent

By:		Antara Capital GP LLC, its general partner

By:		/s/ Himanshu Gulati
Name:		Himanshu Gulati
Title:		Managing Member
Date:		October 16, 2019

ANTARA CAPITAL LP

By:		Antara Capital GP LLC, its general partner

By:		/s/ Himanshu Gulati
Name:		Himanshu Gulati
Title:		Managing Member
Date:		October 16, 2019

ANTARA CAPITAL GP LLC

By:		/s/ Himanshu Gulati
Name:		Himanshu Gulati
Title:		Managing Member
Date:		October 16, 2019

ANTARA CAPITAL FUND GP LLC

By:		/s/ Himanshu Gulati
Name:		Himanshu Gulati
Title:		Managing Member
Date:		October 16, 2019

By:		/s/ Himanshu Gulati
		Himanshu Gulati, an individual
		Date: October 16, 2019

- 11 -

Schedule I

Transactions

The following table sets forth all transactions with respect to the capital stock of USAT effected in the last sixty (60) days by the Reporting Persons or on behalf of the Reporting Persons in respect of the capital stock, inclusive of any transactions effected through 4:00 pm, New York City time, on October 16, 2019.

Transaction

Type

Trade Date

Security Type

Quantity

Security Ticker

Trade Price

Sell

8/28/2019

Common Stock

100.00

USAT

7.9500

Short

9/24/2019

Common Stock

100,000.00

USAT

4.9993

Cover

9/24/2019

Common Stock

100,000.00

USAT

5.0083

Buy

9/25/2019

Common Stock

250,000.00

USAT

4.3600

Sell

9/26/2019

Common Stock

190,543.00

USAT

5.1503

Sell

9/27/2019

Common Stock

59,457.00

USAT

5.1500

- 12 -

EX-99.1 2 d818749dex991.htm EX-1 EX-1

Exhibit 1

JOINT FILING AGREEMENT

This agreement is made this 16^th day of October, 2019, by and among each of the undersigned (the “Agreement”).

WHEREAS, each of the undersigned is required to file a Schedule 13D with respect to ownership of securities in USA Technologies, Inc.

NOW, THEREFORE, the undersigned agree to file only one Schedule 13D reflecting their combined beneficial ownership of securities in USA Technologies, Inc., and each of the undersigned hereby designates and appoints the other as his attorney-in-fact with full power of substitution for each of them, each acting singly, to sign, file and make any further amendments to such Schedule 13D.

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, each of the undersigned has executed this Joint Filing Agreement as of the date first written above.


ANTARA CAPITAL MASTER FUND LP

By:		Antara Capital LP not in its individual corporate capacity, but solely as Investment Advisor and agent

By:		Antara Capital GP LLC, its general partner

By:		/s/ Himanshu Gulati
Name:		Himanshu Gulati
Title:		Managing Member

ANTARA CAPITAL LP

By:		Antara Capital GP LLC, its general partner

By:		/s/ Himanshu Gulati
Name:		Himanshu Gulati
Title:		Managing Member

ANTARA CAPITAL GP LLC

By:		/s/ Himanshu Gulati
Name:		Himanshu Gulati
Title:		Managing Member

ANTARA CAPITAL FUND GP LLC

By:		/s/ Himanshu Gulati
Name:		Himanshu Gulati
Title:		Managing Member

By:		/s/ Himanshu Gulati
		Himanshu Gulati, an individual

[Signature Page – 13D Joint Filing Agreement]

EX-99.5 3 d818749dex995.htm EX-5 EX-5

Exhibit 5

HIGHLY CONFIDENTIAL AND PROPRIETARY

September 30, 2019

Antara Capital, L.P.

500 Fifth Avenue, Suite 2320

New York, NY 10110

Attention: Lance Kravitz, Chief Compliance Officer

Dear Mr. Kravitz:

USA Technologies, Inc. (the “Company”) understands that Antara Capital, L.P. (“you” or “your”) has requested information regarding the Company for the purposes of evaluating a possible transaction between the Company and you, including a strategic investment in the Company (a “Transaction”). It is understood and agreed that this agreement does not obligate the Company to enter into any Transaction or any agreement relating to a Transaction. To induce the Company to furnish information to you, you hereby agree as follows:

1. As used herein:

“Act” means the Securities Exchange Act of 1934, as amended.

“Affiliate” means any Person that (i) directly or indirectly controls you, (ii) directly or indirectly is controlled by you or (iii) is under direct or indirect common control with you;

“Information” means any information regarding the Company or any of its Affiliates or their respective assets or businesses which is furnished to you, directly or indirectly, by the Company or its Representatives, whether in writing, orally, electronically, or by any other medium, and all notes, analyses, compilations, studies, interpretations or other documents prepared by you or your Representatives which contain, reflect or are based upon, in whole or in part, the information furnished to you or your Representatives pursuant hereto;

“Person” means any corporation, partnership, group, individual or other entity, the media and any government or political subdivision, agency or instrumentality of the government;

“Representatives” means attorneys, accountants, consultants, agents, financial advisors, financing sources and any other advisors retained by the Company or you, as the case may be; and

“Restricted Period” means the one-year period commencing on the date hereof.

HIGHLY CONFIDENTIAL AND PROPRIETARY

2. All Information will be kept confidential by you, except that you may disclose or make available Information to your directors, officers and employees and to your Representatives for the exclusive purpose of assisting you in the evaluation and consummation of a possible Transaction, all of whom shall be specifically informed by you of the confidential character of such Information and that by receiving the Information they are agreeing to be bound by the terms of this letter agreement relating to the confidential treatment of such Information. You will not use, or permit any of your Representatives to use, any of the Information for any purpose whatsoever other than the evaluation and consummation of a possible Transaction. You shall take reasonable measures to protect the confidentiality of and avoid disclosure of and unauthorized use of the Information, and take at least those measures that you take to protect your own confidential information of a similar nature, but in no case less than reasonable care. You shall be responsible for any breach of this letter agreement by any of your Representatives.

3. You hereby acknowledge that you are aware (and that prior to the disclosure of any Information to any Person pursuant to paragraph 2 such person will be advised) that the United States securities laws prohibit any Person who has material non-public information about a company from purchasing or selling securities of such company or from communicating such information to any other Person under circumstances in which it is reasonably foreseeable that such Person is likely to purchase or sell such securities.

4. Unless specifically requested or consented to in writing in advance by the Company’s Board of Directors, you will not at any time during the Restricted Period (and you will not at any time during the Restricted Period assist or encourage others to):

(a) acquire or agree, offer, seek or propose to acquire (or directly or indirectly request permission to do so), directly or indirectly, alone or in concert with any other Person, by purchase or otherwise, any ownership, including, but not limited to, beneficial ownership as defined in Rule 13d-3 under the Act, of any assets, businesses or securities of the Company or any subsidiary thereof, or any rights or options to acquire such ownership (including from any third party);

(b) solicit proxies (as such terms are defined in Rule 14a-1 under the Act), whether or not such solicitation is exempt under Rule 14a-2 under the Act, with respect to any matter from holders of any shares of common stock of the Company (“Stock”) or any securities convertible into or exchangeable for or exercisable (whether currently or upon the occurrence of any contingency) for the purchase of Stock, or make any communication exempted from the definition of solicitation by Rule 14a-1(1)(2)(iv) under the Act;

(c) initiate, or induce or attempt to induce any other Person, entity or group (as defined in Section 13(d)(3) of the Act) to initiate, any shareholder proposal or tender offer for any securities of the Company or any subsidiary thereof or the convening of a shareholders’ meeting of the Company or any subsidiary thereof;

HIGHLY CONFIDENTIAL AND PROPRIETARY

(d) otherwise seek or propose (or request permission to propose) to influence or control the management or policies of the Company or any subsidiary thereof;

(e) enter into any discussions, negotiations, arrangements or understandings with any other Person with respect to any matter described in the foregoing subparagraphs (a) through (d);

(f) request the Company (or its directors, officers, employees or agents), directly or indirectly, to amend or waive any provision of this paragraph 4; or

(g) take any action inconsistent with any of the foregoing subparagraphs (a) through (f).

5. Except with the prior written approval of the Company, you will not disclose, and you will not permit your Representatives to disclose, to any Person other than the Persons described in Paragraph 2, the fact that you are engaged in discussions with the Company regarding a possible Transaction, the subject matter or status of any such discussions, the fact that the Information has been made available to you or that you have inspected any portion of the Information, the fact that you are subject to any of the restrictions described in Paragraph 4, or the existence of this agreement.

6. In the event that you or any of your Representatives are requested or required by applicable law, regulation, governmental entity or judicial or administrative proceeding or other legal process (collectively, a “Proceeding”) to disclose any Information received by you or any matter subject to paragraph 5, you will, to the extent permitted by applicable law, give the Company notice as soon as possible of such request so that the Company may seek, at the Company’s expense, an appropriate protective order. If, in the absence of a protective order, you or your Representatives are nonetheless on the advice of counsel legally compelled to disclose any such Information or matter, you or your Representative may disclose such Information or matter without liability hereunder, provided that (i) you disclose in such Proceeding only that portion of the Information which such counsel advises you is legally required to be disclosed and (ii) you exercise your reasonable best efforts to preserve the confidentiality of the Information, including, without limitation, by cooperating with the Company to obtain, at the Company’s expense, an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Information in such Proceeding.

7. The restrictions with respect to Information set forth in paragraph 2 shall not apply to any Information which you demonstrate (i) is on the date hereof or hereafter becomes generally available to the public other than as a result of a disclosure, directly or indirectly, by you or your Representatives in breach of this Agreement, (ii) was available to you on a nonconfidential basis prior to its disclosure to you by the Company or its Representatives or becomes available to you on a nonconfidential basis, in each case from a source other than the Company or its Representatives, which source, to your knowledge, was not itself bound by a confidentiality agreement with the Company or its Representatives, or any other contractual, legal or fiduciary obligation to the Company, in each case with respect to such Information or (iii) is or was independently developed by you without use of or reference to any Information.

HIGHLY CONFIDENTIAL AND PROPRIETARY

8. The Company makes no representation or warranty as to the accuracy or completeness of the Information provided to you. Except in the case of fraud, neither the Company nor any of its Representatives shall have any liability resulting from the use of the Information by you or any of your Representatives. Only those representations or warranties which are made in a final definitive agreement regarding the possible Transaction when, as and if executed, and subject to such limitations and restrictions as may be specified therein, will have any legal effect.

9. Unless and until a final definitive agreement regarding a Transaction between the Company and you has been executed and delivered, neither the Company nor you will be under any legal obligation of any kind whatsoever with respect to a possible Transaction by virtue of this letter agreement except for the matters specifically agreed to herein.

10. You acknowledge and agree that the Information is, and at all times shall remain, the sole and exclusive property of the Company. You also acknowledge and agree that the Company may at any time terminate your access to the Information. At any time upon the written request of the Company for any reason you will promptly redeliver to the Company or destroy, at your choosing, all copies of documents containing Information and will promptly destroy all memoranda, notes and other writings prepared by you or by any Person referred to in paragraph 2 based on such Information; provided, however, that you and your Representatives may retain such copies as are required to be retained by applicable law or bona fide records retention policies and shall not be required to delete information from routine backup or archival systems. Notwithstanding the return or destruction of the Information, you and your Representatives will continue to be bound by your obligations of confidentiality and other obligations hereunder.

11. During the Restricted Period, you will not (and will not assist or encourage others to) solicit, hire, or retain the services, as employee, consultant or otherwise, of any employee of the Company, provided, however, that the above restriction shall not be deemed to preclude general solicitations of employment (including general advertising via executive recruiters, periodicals, the Internet and other media) not specifically directed towards employees of the Company or the hiring of any employees of the Company that respond to such general solicitations.

12. You acknowledge that irreparable damage may occur to the Company in the event any of the provisions of this agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, the Company shall be entitled to seek an injunction or injunctions to prevent breaches of the provisions of this agreement and to enforce specifically the terms and provisions hereof in any court of competent jurisdiction in the United States of America or any state thereof, in addition to any remedy to which the Company may be entitled at law or in equity.

HIGHLY CONFIDENTIAL AND PROPRIETARY

13. If any term or provision of this letter agreement or any application hereof shall be invalid or unenforceable, the remainder of this agreement and any other application of such term or provision shall not be affected thereby. It is understood and agreed that no failure or delay by the Company in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder. In the event of litigation relating to this letter agreement, the non-prevailing party shall be liable for and pay to the prevailing party the reasonable legal fees and expenses incurred in connection with such litigation, including any appeal, in addition to any other remedies to which the prevailing party may be entitled as determined by a court of competent jurisdiction.

14. This letter agreement may be executed in any number of counterparts, each of which when so executed and delivered (including by electronic means or by PDF format) shall be an original, but such counterparts shall constitute one and the same instrument.

15. This agreement contains the entire understanding of the parties hereto with respect to the matters covered hereby and may be amended only by an agreement in writing executed by the Company and you.

16. This letter agreement shall be binding upon, inure to the benefit of and be enforceable by our respective successors and assigns; provided that you shall not assign this agreement in whole or in part without the prior written consent of the Company.

17. This letter agreement shall be governed by and construed in accordance with the internal laws (as opposed to conflict of law provisions) of the Commonwealth of Pennsylvania.

18. This letter agreement shall terminate on the last day of the Restricted Period.

HIGHLY CONFIDENTIAL AND PROPRIETARY

If the foregoing correctly sets forth our agreement as to the matters set forth herein, please confirm our agreement by executing and returning a copy of this letter agreement to the undersigned.


Very truly yours,

USA Technologies, Inc.

By:		/s/ Stephen P. Herbert
		Stephen P. Herbert, Chief Executive Officer

Agreed and Accepted
As of date listed above:

Antara Capital, L.P.

By:		/s/ Lance Kravitz
		Lance Kravitz, Chief Compliance Officer