September 27, 2019

USA Technologies, Inc.

100 Deerfield Lane

Suite 300

Malvern, PA  19355

Attention: Glen Goold

Re:

CONSENT TO EXTENSION AND AMENDMENT

Dear Sir or Madam:

We refer to that certain Credit Agreement, dated as of November 9, 2017 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”), among USA Technologies, Inc., a Pennsylvania corporation (the “Borrower”), the other Loan Parties party thereto (together with the Borrower, the “Loan Parties”), the lenders party thereto from time to time (the “Lenders”), and JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”) for the Lenders.  Capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in the Credit Agreement.

The Loan Parties have requested that the Administrative Agent consent to an extension of (a) the delivery of the Borrower’s audited financial statements for the fiscal year ended June 30, 2018, the unaudited financial statements for the fiscal quarters ended September 30, 2018,  December 31, 2018, March 31, 2019 and June 30, 2019, and the related compliance certificates required to be delivered pursuant to Section 5.01(a), (b) and (c), as applicable, of the Credit Agreement to October 31, 2019 (the “Financial Reporting Extension”; the foregoing reporting, the “Specified Reporting Requirements”) and (b) the date by which the Borrower must comply with the financial covenants set forth in Section 6.12 of the Credit Agreement with respect to the fiscal quarters ended June 30, 2018, September 30, 2018, December 31, 2018, March 31, 2019 and June 30, 2019, to October 31, 2019 (the “Financial Covenant Extension”; and together with the Financial Reporting Extension, the “Specified Extension”).  For the avoidance of doubt, the failure of Borrower to comply with the financial covenants set forth in Section 6.12 of the Credit Agreement as of the last day of any fiscal quarter prior to October 31, 2019, shall not constitute an Event of Default under the Credit Agreement until, if in fact such financial covenants were breached for any such prior fiscal quarter, October 31, 2019.

At your request and subject to the terms and conditions of this letter agreement, the Administrative Agent and the Lenders consent to the Specified Extension.

In consideration of the Specified Extension, the Loan Parties agree that (a) the Revolving Commitment is hereby permanently reduced to $10,000,000, provided that, until written notice to the contrary is delivered by the Administrative Agent to the Borrowers and notwithstanding the satisfaction of the Specified Reporting Requirements after the date hereof, the Borrower shall not request, and the Secured Parties shall not be required to honor, any request for additional Revolving Loans, Letters of Credit, or other credit accommodations, provided that the Secured Parties may do so in their sole and absolute discretion, (b) within (30) days after the end of each fiscal month, they shall deliver an unaudited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal month and the then elapsed portion of current fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by a Financial Officer as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal quarterly controls and adjustments (i.e., controls and adjustments that are not performed on a monthly basis), normal year-end audit adjustments, and the absence of footnotes, and indicating that the unaudited consolidated financial statements do not reflect: (i) any adjustments which may be required by the internal investigation or the non-investigatory adjustments identified during the audit process which are described in the Borrower’s public disclosures to the extent that such adjustments have not yet been finalized; and (ii) any adjustments related to the adoption of ASC 606 (including gross versus net of transaction reporting) until the analysis with respect to such adjustments has been completed, provided that the due date for the delivery to Lender of the foregoing unaudited consolidated financial statements for the fiscal months ended July 31, 2019 and August 31, 2019, and the related certifications, shall be extended from September 30, 2019 until October 31, 2019, (c) on or before Friday of each week, the Borrower shall deliver to the Administrative Agent a 13-week rolling cash flow report, (d) the Applicable Rate shall continue to be set at Category 1 until at least the date that the unaudited financial statements and related compliance certificate required to be delivered pursuant to Sections 5.01(b) and (c) with respect to the fiscal quarters ending September 30, 2018, December 31, 2018, March 31, 2019 and June 30, 2019, are delivered to the Administrative Agent, and (e) from and after the date hereof, no Loan Party will, nor will it permit any Subsidiary to, (i) declare or make, or agree to declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, other than Restricted Payments made to other Loan Parties, (ii) sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it, pursuant to Section 6.05(h) of the Credit Agreement, nor will the Borrower permit any Subsidiary to issue any additional Equity Interest in such Subsidiary (other than to the Borrower or another Subsidiary in compliance with Section 6.03 or Section 6.04 of the Credit Agreement), (iii) merge into or consolidate with it, or liquidate or dissolve, or (iv) consummate an Acquisition or enter into an agreement with respect to an Acquisition.  The failure to comply with the foregoing sentence will constitute an immediate Event of Default under the Credit Agreement.

Each of the Loan Parties hereby (a) agrees that, after giving effect to the terms hereof, no Default or Event of Default exists as of the date hereof, (b) reaffirms all of its obligations and covenants under the Credit Agreement and the other Loan Documents to which it is a party, (c) restates and renews each and every representation and warranty heretofore made by it in the Credit Agreement and the other Loan Documents as fully as if made on the date hereof (except with respect to representations and warranties made as of an expressed date, in which case such representations and warranties shall be true and correct as of such date); provided, however, that (i) Section 3.04(a) of the Credit Agreement shall be subject to the restatement of the fiscal year 2017 financial statements of the Borrower disclosed in the Borrower’s Form 8-K dated February 6, 2019, (ii) Section 3.06(a)(i) of the Credit Agreement shall be subject to the purported class actions filed against the Borrower disclosed in the Borrower’s Form 12b-25 dated February 11, 2019, and the purported class action filed against the Borrower in the Chester County, Pennsylvania, Court of Common Pleas (Docket No. 2019-04821-MJ) on May 17, 2019, and (iii) Section 3.09 of the Credit Agreement shall be subject to sales taxes due by the Loan Parties to various jurisdictions as disclosed in the Borrower’s Form 8-K dated September 20, 2019, and (d) agrees that none of its respective obligations and covenants shall be reduced or limited by the execution and delivery of this letter agreement.

Each Loan Party and their respective Affiliates, successors, assigns, and legal representatives (collectively, the “Releasors”), acknowledge and agree that through the date hereof, each Secured Party has acted in good faith and has conducted itself in a commercially reasonable manner in its relationships with the Releasors in connection with this agreement and in connection with the Secured Obligations, the Credit Agreement, and the other Loan Documents, and the obligations and liabilities of the Releasors existing thereunder or arising in connection therewith, and the Releasors hereby waive and release any claims to the contrary.  The Releasors hereby release, acquit, and forever discharge each Secured Party and its Affiliates (including, without limitation, its parent and its subsidiaries) and their respective officers, directors, employees, agents, attorneys, advisors, successors and assigns, both present and former (collectively, the “Secured Party Affiliates”) from any and all manner of losses, costs, defenses, damages, liabilities, deficiencies, actions, causes of action, suits, debts, controversies, damages, judgments, executions, claims, demands, and expenses whatsoever, asserted or unasserted, known or unknown, foreseen or unforeseen, in contract, tort, law or equity (generically, “Claims”), that any Releasor has or may have against any Secured Party and/or any Secured Party Affiliate by reason of any action, failure to act, event, statement, accusation, assertion, matter, or thing whatsoever arising from or based on facts occurring prior to the effectiveness of this Agreement that arises out of or is connected to the Loan Documents or the Secured Obligations.  Each of the Releasors hereby unconditionally and irrevocably agrees that it will not sue any Secured Party or any Secured Party Affiliate on the basis of any Claim released, remised, and discharged by such Releasor pursuant to this paragraph.  If any Releasor or any of their respective successors, assigns, or other legal representatives violates the foregoing covenant, each Releasor, for itself and its successors, assigns, and legal representatives, agrees to pay, in addition to such other damages as any Secured Party or any Secured Party Affiliate may sustain as a result of such violation, all reasonable and documented attorneys’ fees and costs incurred by any Secured Party or any Secured Party Affiliate as a result of such violation.

 

This letter agreement shall not become effective until (a) each of the Loan Parties and the Administrative Agent have executed and delivered this letter agreement to the Administrative Agent, (b) on or before September 30, 2019, the Loan Parties shall have repaid the remaining principal amount of the Term A Loan (i.e., $1,458,333.00) and all accrued and unpaid interest thereon in full, (c) the Loan Parties shall have paid to the Administrative Agent, for the benefit of the Lenders, a non-refundable extension fee of $15,000 in immediately available funds, and (d) the Loan Parties shall have paid (or made arrangements acceptable to the Administrative Agent to pay) all outstanding legal fees of counsel to the Administrative Agent.

 

Except for the consents and amendments set forth above, the text of the Credit Agreement and all other Loan Documents shall remain unchanged and in full force and effect.  This letter agreement shall not constitute an amendment to any other provision of the Credit Agreement or any other Loan Document. The Specified Extension is a one-time consent and shall not be construed as an agreement to consent to any future event. No consent by the Administrative Agent or the Lenders under the Credit Agreement or any other Loan Document is granted or intended except as expressly set forth herein.  Except as set forth herein, the consents and amendments agreed to herein shall not constitute a modification of the Credit Agreement or any of the other Loan Documents, or a course of dealing with the Administrative Agent and the Lenders at variance with the Credit Agreement or any of the other Loan Documents, such as to require further notice by the Administrative Agent or the Lenders to require strict compliance with the terms of the Credit Agreement and the other Loan Documents in the future.  This letter agreement shall be a “Loan Document” for all purposes under the Credit Agreement. This letter agreement shall be governed by, and construed in accordance with, the laws of the State of New York.  This letter agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such separate counterparts shall together constitute but one and the same instrument.  Delivery by one or more parties hereto of an executed counterpart of this letter agreement via facsimile, telecopy, or other electronic method of transmission pursuant to which the signature of such party can be seen (including, without limitation, Adobe Corporation’s Portable Document Format) shall have the same force and effect as the delivery of an original executed counterpart of this letter agreement.  Any party delivering an executed counterpart of this letter agreement by facsimile or other electronic method of transmission shall also deliver an original executed counterpart to the Administrative Agent, but the failure to do so shall not affect the validity, enforceability, or binding effect of this letter agreement.

 

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ADMINISTRATIVE AGENT AND SOLE LENDER:

CONSENT, REAFFIRMATION, AND AGREEMENT OF GUARANTORS

Each of the undersigned (a) acknowledges receipt of the foregoing consent and amendment (the “Agreement”); (b) consents to the execution and delivery of the Agreement; and (c) reaffirms all of its obligations and covenants under the Credit Agreement (as defined in the Agreement) and all of its other obligations under the Loan Documents to which it is a party, and, agrees that none of its obligations and covenants shall be reduced or limited by the execution and delivery of the Agreement or any of the other instruments, agreements or other documents executed and delivered pursuant thereto.

 

This Consent, Reaffirmation, and Agreement of Guarantors (this “Consent”) may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument.  This Consent may be executed by each party on separate copies, which copies, when combined so as to include the signatures of all parties, shall constitute a single counterpart of the Consent.

 

As of September 27, 2019