EMPLOYMENT AND NON-COMPETITION AGREEMENT

          Agreement made this 24th day of September, 2009, by and between GEORGE R. JENSEN, JR., an individual (“Jensen”), and USA TECHNOLOGIES, INC., a Pennsylvania corporation (“USA”).

          Jensen is the founder as well as the Chairman and Chief Executive Officer of USA. Jensen and USA had entered into an Amended and Restated Employment And Non-Competition Agreement dated May 11, 2006, a First Amendment thereto dated as of March 13, 2007, and a Second Amendment thereto dated September 22, 2008. As more fully set forth herein, the parties desire to amend, completely restate, and replace the foregoing agreements effective October 1, 2009.

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

           SECTION 1. Employment .

                    A.     USA shall employ Jensen as Chairman and Chief Executive Officer commencing on October 1, 2009 and continuing through September 30, 2012 (the “Employment Period”), and Jensen hereby accepts such employment. Unless terminated by either party hereto upon at least 90-days notice prior to end of the original Employment Period ending September 30, 2012, or prior to the end of any one year extension of the Employment Period, the Employment Period shall not be terminated and shall automatically continue in full force and effect for consecutive one year periods.

                    B.     During the Employment Period, Jensen shall devote his full time, energy, skills, and attention to the business of USA, and shall not be engaged or employed in any other business activity whatsoever, whether or not such activity is pursued for gain, profit or other pecuniary advantage. During the Employment Period, Jensen shall perform and discharge well and faithfully such executive management duties for USA as shall be necessary and as otherwise may be directed by the Board of Directors of USA.

                    C.     Nothing contained in subparagraph 1.B hereof shall prohibit Jensen from investing his personal assets in businesses which do not compete with USA, where the form or manner of such investments will not require more than minimal services on the part of Jensen in the operation of the affairs of the business in which such investments are made, or in which his participation is solely that of a passive investor; or from serving as a member of boards of directors, boards of trustees, or other governing bodies of any organization, provided that USA approves such activities in advance; or from participating in trade associations, charitable, civic and any similar activities of a not-for-profit, philanthropic or eleemosynary nature; or from attending educational events or classes. It is understood and agreed that any such permitted activities which shall occur during business hours shall be limited to no greater than forty hours per year.

                    A.     In consideration of his services rendered, USA shall pay to Jensen a base salary of $365,000 per year during the Employment Period, subject to any withholding required by law. Jensen’s base salary may be increased from time to time in the discretion of the Board of Directors.

                    F.     During the Employment Period, USA shall obtain and pay the premiums for, a term life insurance policy on Jensen’s life in the face amount of $2,000,000. During the Employment Period, Jensen shall designate the beneficiary of the policy. If Jensen shall die during the Employment Period, the proceeds of the policy shall be paid to his designated beneficiary. Jensen agrees to cooperate with the insurance company and USA in connection with the issuance of the policy. Jensen agrees that he will submit to examinations by such practicing medical doctors selected by USA or the insurance company upon receipt of written request from USA or the insurance company to do so.

                    G.     During the Employment Period, USA shall obtain and pay the premiums for, a supplemental long-term disability policy covering Jensen over and above the existing long-term group disability plan of USA. If Jensen shall become disabled during the Employment Period, the supplemental policy would provide Jensen with monthly payments of up to 65% of Jensen’s base salary through age sixty-five. Jensen agrees to cooperate with the insurance company and USA in connection with the issuance of the policy. Jensen agrees that he will submit to examinations by such practicing medical doctors selected by USA or the insurance company upon receipt of written request from USA or the insurance company to do so.

          Due to Jensen’s age, if Jensen would become disabled while employed by USA, the monthly benefit provided by the supplemental long-term disability policy is not anticipated to provide Jensen with at least 65% of Jensen’s monthly base salary. In such event, and subject to the next sentence, USA shall make monthly payments to Jensen in an amount equal to the difference between 65% of his monthly base salary and the amount of monthly benefit provided by the supplemental disability policy and any group disability policy of USA. It is anticipated that USA’s obligation to Jensen under the prior sentence would be approximately $2,250 per month, and it is understood and agreed that USA’s total obligation to Jensen under the prior sentence shall be limited to and in no event exceed $110,000.

                    H.     During the Employment Period, USA shall pay to Jensen an automobile allowance in the amount of $17,875 per annum, payable in equal bi-monthly installments of $774.79.

                    I.     During the Employment Period, and in addition to the other benefits provided to Jensen hereunder, Jensen shall be entitled to participate in and be covered by all standard fringe and employee benefits made available to other employees of USA. These current benefits include medical and dental insurance, paid vacation and holidays, a 401(k) plan, and a long-term group disability plan.

                    A. If at any time after the date hereof there shall be a USA Transaction, USA shall issue to Jensen an aggregate of 140,000 shares of Common Stock (the “Jensen Stock”) subject to adjustment as provided in subparagraph B of this Section 3. At the time of any USA Transaction, all of the shares of Jensen Stock shall automatically and without any action on Jensen’s part be deemed to be issued and outstanding immediately prior to any such USA Transaction, and shall be entitled to be treated as any other issued and outstanding share of Common Stock in connection with such USA Transaction. In connection with a USA Transaction, USA and/or such successor or purchasing corporation, person, or entity, as the case may be, shall recognize and specifically provide for the Jensen Stock as provided for in this Section 3.

                    B.     The number of shares of Common Stock to be issued to Jensen upon the occurrence of a USA Transaction shall be subject to adjustment from time to time only as set forth hereinafter: (i) in case USA shall declare a Common Stock dividend on the Common Stock, then the number of shares shall be proportionately increased as of the close of business on the date of record of said Common Stock dividend in proportion to such increase of outstanding shares of Common Stock; or (ii) if USA shall at any time subdivide its outstanding Common Stock by recapitalization, reclassification or split-up thereof, the number of shares shall be proportionately increased, and, if USA shall at any time combine the outstanding shares of Common Stock by recapitalization, reclassification, reverse stock split, or combination thereof, the number of shares shall be proportionately decreased. Any such adjustment to the number of shares shall become effective at the close of business on the record date for such subdivision or combination. All shares of Common Stock issued to Jensen shall be, at the time of delivery of the certificates for such Common Stock, validly issued and outstanding, fully paid and non-assessable.

                   C. For purposes of this Agreement, the term “USA Transaction” shall mean:

                    (i) the acquisition by any person, entity or group required to file (or which would be required to file if USA had been subject to such provisions) a Schedule 13D or Schedule 14d-1 promulgated under the Securities Exchange Act of 1934 (“Exchange Act”) or any acquisition by any person entitled to file (or which would be entitled to file if USA had been subject to such provisions) a Form 13G under the Exchange Act with respect to such acquisition of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 51% or more of USA’s then outstanding voting securities entitled to vote generally in the election of Directors (the “Outstanding Shares”); or

                    (ii)     a change in the composition of the Board of Directors of USA over a period of twelve (12) months or less such that the Continuing Directors (as defined below) fail to constitute a majority of the Board (or, if applicable, the Board of Directors of a successor corporation to USA), where the term “Continuing Director” means at any date a member of the Board (i) who was a member of the Board on the date of the execution of this Agreement or (ii) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; or

                    (iii) approval by the shareholders of USA of a reorganization, merger, consolidation, liquidation, or dissolution of USA, or the sale, transfer, lease or other disposition of all or substantially all of the assets of USA ( “Business Combination”).

                    Notwithstanding subsection (iii) above, and other than in connection with a liquidation or dissolution of USA, a Business Combination described in subsection (iii) above shall not constitute a USA Transaction if following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Shares immediately prior to such Business Combination beneficially own, directly or indirectly, more than 51% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of Directors of the entity resulting from such business combination (including without limitation, an entity which as a result of such transactions owns USA or all or substantially all of USA’s assets either directly or through one or more subsidiaries), and (B) no person owns, directly or indirectly, 49% or more of the combined voting power of the then outstanding voting securities of the entity resulting from such Business Combination except to the extent that such ownership existed prior to the Business Combination.

                    D. USA shall at its sole cost and expense, take such action as shall be required to have the Jensen Stock registered or exempted from registration under applicable Federal and state securities laws. As a condition to the issuance by USA of any Jensen Stock, Jensen shall execute and deliver such representations, warranties, and covenants, that may be required by applicable Federal and state securities law, or that USA determines is reasonably necessary in connection with the issuance of such Jensen Stock. In addition, the certificates representing the Jensen Stock shall contain such legends, or restrictive legends, or stop transfer instructions, as shall be required by applicable Federal or state securities laws, or as shall be reasonably required by USA or its transfer agent.

                    E. The Jensen Stock granted hereunder to Jensen shall be irrevocable by USA and are unconditional, absolute and fully vested obligations of USA. The Jensen Stock shall not be subject to any right of set off, recoupment or any other equitable defenses by USA and shall be issued to Jensen in strict accordance with their terms. The terms and conditions of this Section 3 shall not be affected by the termination of Jensen’s employment with USA for any reason whatsoever, and whether or not any “cause” exists therefore, and shall not be affected by Jensen’s breach of this Agreement or any other agreement with USA.

                    F. The right to receive the Jensen Stock shall be transferable by Jensen, or by any subsequent assignee, in whole or in part, at any time or from time to time, by notice to USA. As a condition precedent of such transfer, the assignee shall execute and deliver such representations, warranties, and covenants that may be required by applicable Federal and state securities laws. In addition, USA may require that the transferor deliver to USA an opinion of counsel, acceptable to USA, to the effect that such transfer is permitted under and does not violate any applicable state or Federal securities laws. The right to receive the Jensen Stock shall be transferable under and pursuant to the last will and testament of Jensen in accordance with this subparagraph F, and the death of Jensen shall not affect the right to receive the Jensen Stock, and in such event the right to receive the Jensen Stock shall continue in full force and effect in accordance with this Section 3.

                    G.     There has been reserved, and the Company shall at all times keep reserved out of the authorized and unissued shares of Common Stock, a number of shares of Common Stock sufficient to provide for the Jensen Stock. The Company agrees that the Jensen Stock shall be, at the time of delivery of the certificates for such Jensen Stock, validly issued and outstanding, fully paid and non-assessable.

          SECTION 4. Long-Term Equity Compensation Program .

          A.     On February 12, 2007, USA adopted the Long-Term Equity Incentive Program (the “Plan”). The Plan covers each of the fiscal years of USA ending June 30, 2007, June 30, 2008, and June 30, 2010 (severally, “Fiscal Year” and collectively, “Fiscal Years”). Pursuant to the Plan, Jensen is entitled to earn shares of Common Stock of USA (“Shares”) based upon the achievement by USA of certain target goals during each Fiscal Year. The target goals and the number of Shares to be earned by Jensen during any Fiscal Year are set forth in the minutes of the USA Board of Directors meeting held on February 12, 2007.

          B.     Except as provided in Subsections C or E, Jensen must be an employee of USA as of the last day of any Fiscal Year in order to earn any Shares on account of such Fiscal Year. Any Shares that are earned by Jensen as of the completion of any Fiscal Year shall be fully and irrevocably vested and issuable to Jensen by USA. Except as provided in Subsection C, the issuance to Jensen by USA of any Shares earned by Jensen under the Plan shall occur as soon as practicable after the completion of the audited financial statements of USA for the completed Fiscal Year.

          C.     In the event of the occurrence of a USA Transaction (as defined in Section 3.C hereof) during any Fiscal Year, and provided that Jensen is an employee of USA on the date of such USA Transaction, Jensen shall be awarded Shares (the “Accelerated Shares”) for each of the Fiscal Years that have not yet been completed as of the date of such USA Transaction. The number of Accelerated Shares shall be 178,570 for each of the Fiscal Years. The award of Accelerated Shares to Jensen shall be in lieu of all Shares otherwise issuable to Jensen under the Plan for any uncompleted Fiscal Year, and Jensen shall not be entitled to earn any additional Shares under the Plan on account of any such uncompleted Fiscal Year.

          For example, if a USA Transaction would occur on March 1, 2008, Jensen would be entitled to 178,570 Accelerated Shares for each of the uncompleted Fiscal Years ending June 30, 2008 and June 30, 2010. These Accelerated Shares would be issuable to him on and as of the occurrence of the USA Transaction. Jensen would not be entitled to any additional Shares on account of these uncompleted Fiscal Years.

          At the time of any USA Transaction, all of the Accelerated Shares shall automatically and without any action on Jensen’s part be deemed to be issued and outstanding immediately prior to any such USA Transaction, and shall be entitled to be treated as any other issued and outstanding share of Common Stock in connection with such USA Transaction. In connection with a USA Transaction, USA and/or such successor or purchasing corporation, person, or entity, as the case may be, shall recognize and specifically provide for the Accelerated Shares as provided for in this Section 3.C.

          D.     In the event that Jensen’s employment with USA is terminated by USA for Cause pursuant to Section 5.D hereof during any Fiscal Year, then the Plan shall be immediately terminated as to Jensen as of the date of such termination, and except for Shares that have already been earned by Jensen on account of any Fiscal Year that has been complete