ex10_3.htm


    
      

    

    Exhibit
      10.3


    STOCK
      ISSUANCE AGREEMENT

    


    This
      Agreement is made on the 28th day
      of September 2007, by and between DAVID M. DEMEDIO (“DeMedio”), and USA
      TECHNOLOGIES, INC., a Pennsylvania corporation (“USA”).

    


    Background

    


    On
      February 12, 2007, USA adopted a
      Long-Term Equity Incentive Program (the “Plan”). Pursuant to the Plan, DeMedio
      has earned 20,580 shares of Common Stock of USA (the “Plan Shares”) on account
      of the 2007 fiscal year. The Plan Shares have not yet been issued to DeMedio.
      As
      more fully set forth herein, the parties desire to make arrangements for the
      issuance of the Plan Shares to DeMedio and for the satisfaction of USA’s
      withholding obligations in respect of these shares.

    


    Agreement

    


    NOW,
      THEREFORE, in consideration of the
      covenants set forth herein, and intending to be legally bound hereby, the
      parties agree as follows:

    


    1.           As
      of the date hereof, USA shall issue to DeMedio an aggregate of 20,580 shares
      which represent the Plan Shares earned by DeMedio for the 2007 fiscal
      year.

    


    2.           USA
      shall instruct its transfer agent to issue the Plan Shares as of the date
      hereof. The certificates representing the Plan Shares shall be subject to stop
      transfer instructions and shall bear the following restrictive
      legends:

    


    THESE
      SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR JURISDICTION, IN RELIANCE UPON
      EXEMPTIONS UNDER THOSE ACTS. THE SALE OR OTHER DISPOSITION OF THESE SECURITIES
      IS PROHIBITED UNLESS THE CORPORATION RECEIVES AN OPINION OF COUNSEL SATISFACTORY
      TO IT THAT SUCH SALE OR DISPOSITION CAN BE MADE WITHOUT REGISTRATION UNDER
      THE
      SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR
      JURISDICTION. BY ACQUIRING THESE SECURITIES, THE HOLDER REPRESENTS THAT THE
      HOLDER HAS ACQUIRED SUCH SECURITIES FOR INVESTMENT PURPOSES ONLY AND THAT THE
      HOLDER WILL NOT SELL OR OTHERWISE DISPOSE OF THESE SECURITIES WITHOUT
      REGISTRATION OR COMPLIANCE WITH THE AFORESAID ACTS AND THE RULES AND REGULATIONS
      ISSUED THEREUNDER.


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    


    THE
      SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CANCELLATION PURSUANT
      TO
      THE TERMS OF A CERTAIN STOCK ISSUANCE AGREEMENT DATED SEPTEMBER 28, 2007 ENTERED
      INTO BY THE CORPORATION AND THE INITIAL HOLDER HEREOF, A COPY OF WHICH AGREEMENT
      MAY BE INSPECTED BY THE HOLDER OF THIS CERTIFICATE AT THE PRINCIPAL OFFICE
      OF
      THE CORPORATION, OR FURNISHED BY THE CORPORATION TO THE HOLDER OF THIS
      CERTIFICATE UPON WRITTEN REQUEST WITHOUT CHARGE.

    


    3.           DeMedio
      agrees that, on or before December 31, 2007, DeMedio shall satisfy all
      applicable federal, state and local income and other tax withholding obligations
      of USA in connection with the Plan Shares earned by him on account of the 2007
      fiscal year through either: (a) the delivery by DeMedio to USA of the amount
      of
      the withholding tax obligations, or (b) the cancellation of a portion of the
      shares issued to DeMedio hereunder by that number of shares having a value
      equal
      to the withholding tax obligations required to be withheld by law.

    


    4.           The
      implementation and interpretation of this Agreement shall be governed by and
      enforced in accordance with the laws of the Commonwealth of Pennsylvania without
      regard to its conflict of laws rules.


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    


    5.           The
      rights and obligations of both parties under this Agreement shall inure to
      the
      benefit of and shall be binding upon their personal representatives, heirs,
      successors and assigns.

    


    6.           This
      Agreement may only be modified by an agreement in writing executed by both
      USA
      and DeMedio.

    


    IN
      WITNESS WHEREOF, the parties hereto
      have executed this Stock Issuance Agreement on the day and year first above
      written.

     

     

    
      	 	
              /s/
                David M. Demedio

            
	 	
              DAVID
                M. DEMEDIO

            
	 	 	 
	 	
              USA
                TECHNOLOGIES, INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	
              /s
                Stephen P. Herbert

            
	 	 	
              Stephen
                P. Herbert,

              President

            


    

     

     

    3