THESE OPTIONS AND THE COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAW. THESE OPTIONS AND THE COMMON STOCK ISSUABLE UPON THE EXERCISE
HEREOF MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF A REGISTRATION STATEMENT IN EFFECT UNDER SUCH ACT AND SUCH LAWS WITH RESPECT
TO THESE OPTIONS AND THE COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF, OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
 
OPTION CERTIFICATE
6,000 COMMON STOCK OPTIONS
NO. 209
 

 
USA TECHNOLOGIES, INC.

COMMON STOCK OPTIONS

(These Options will be void if not exercised
by the Termination Times specified below.)

1.  Options. Subject to the terms and conditions hereof, this certifies that
STEPHEN W. McHUGH, or the registered holder hereof, is the owner of 6,000
Options (the "Options") of USA Technologies, Inc. (the "Company"), a
Pennsylvania corporation. Each Option, when vested in accordance with Section 3
hereof, entitles the holder hereof to purchase from the Company at any time
prior to 5:00 p.m. on the fifth annual anniversary of the vesting of such Option
(the "Termination Time"), one fully paid and non-assessable share of the
Company's Common Stock, without par value (the "Common Stock"), subject to
adjustment as provided in Section 8 hereof.
 
 
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2.  Option Price. The Options, when vested, shall be exercised by delivery to
the Company (prior to the Termination Time for such Options) of the option price
for each share of Common Stock being purchased hereunder (the "Option Price"),
this Certificate, and the completed Election to Purchase Form which is attached
hereto. The Option Price shall be $8.00 per share of Common Stock to be
purchased pursuant to each Option issued pursuant hereto. The Option Price shall
be subject to adjustment as provided in Section 8 hereof. The Option Price is
payable either in cash or by certified check or bank draft payable to the order
of the Company.
 
3.  Vesting of Options. Notwithstanding anything contained herein to the
contrary, and subject to Section 8(d)(iii), the Options represented by this
Certificate shall only become vested and exercisable by the registered holder
hereof in accordance with the vesting schedule set forth below. On the date set
forth in Column "A" below, the number of Options set forth in Column "B" below
shall become irrevocably and absolutely vested and exercisable.
 
Column "A"
   
Column "B"
 
Vesting Date
 
 
Options Vested
 
June 20, 2007
 
 
3,000
 
June 20, 2008
 
 
3,000
 
TOTAL
 
 
6,000
 

 
4.  Exercise. Upon the surrender of this Certificate and payment of the Option
Price as aforesaid, the Company shall issue and cause to be delivered with all
reasonable dispatch to or upon the written order of the registered holder of
this Option and in such name or names as the registered holder may designate, a
certificate or certificates for the number of full shares of Common Stock so
purchased upon the exercise of any Option. Such certificate or certificates
shall be deemed to have been issued and any person so designated to be named
therein shall be deemed to have become a holder of record of such Common Stock
on and as of the date of the delivery to the Company of this Certificate and
payment of the Option Price as aforesaid. If, however, at the date of surrender
of this Certificate and payment of such Option Price, the transfer books for the
Common Stock purchasable upon the exercise of any Option shall be closed, the
certificates for the Common Stock in respect to which any such Option are then
exercised shall be issued and the owner of such Common Stock shall become a
record owner of such Common Stock on and as of the next date on which such books
shall be opened, and until such date the Company shall be under no duty to
deliver any certificate for such Common Stock.
 
5.  Partial Exercise. The rights of purchase represented by the Options shall be
exercisable, at the election of the registered holder hereof, either as an
entirety, or from time to time for any part of the Common Stock specified herein
and, in the event that the Options are exercised with respect to less than all
of the Common Stock specified herein at any time prior to the Termination Time,
a new Certificate will be issued to such registered holder for the remaining
number of Options not so exercised.
 
 
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6.  Termination Time. All of the Options must be exercised in accordance with
the terms hereof prior to the Termination Time relating to any such Option. At
and after the Termination Time relating to any such Option any and all
unexercised rights hereunder relating to such Option shall become null and void
and such Option shall without any action on behalf of the Company become null
and void.
 
7.  Lost, Mutilated Certificate. In case this Common Stock Option Certificate
shall become mutilated, lost, stolen or destroyed, the Company shall issue in
exchange and substitution for and upon cancellation of the mutilated
certificate, or in lieu of and in substitution for the Certificate lost, stolen,
or destroyed, a new Certificate of like tenor and representing an equivalent
right or interest, but only upon receipt of evidence satisfactory to the Company
of such loss, theft or destruction of such certificate and indemnity, if
requested, also satisfactory to the Company.
 
8.  Adjustments. Subject and pursuant to the provisions of this Section, the
Option Price and number of shares of Common Stock subject to the Options shall
be subject to adjustment from time to time only as set forth hereinafter:
 
a.  In case the Company shall declare a Common Stock dividend on the Common
Stock, then the Option Price shall be proportionately decreased 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.
 
b.  If the Company shall at any time subdivide its outstanding Common Stock by
recapitalization, reclassification or split-up thereof, the Option Price
immediately prior to such subdivision shall be proportionately decreased, and,
if the Company shall at any time combine the outstanding shares of Common Stock
by recapitalization, reclassification, reverse stock split, or combination
thereof, the Option Price immediately prior to such combination shall be
proportionately increased. Any such adjustment to the Option Price shall become
effective at the close of business on the record date for such subdivision or
combination. The Option Price shall be proportionately increased or decreased,
as the case may be, in proportion to such increase or decrease, as the case may
be, of outstanding shares of Common Stock.
 
 
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c.  Upon any adjustment of the Option Price as hereinabove provided, the number
of shares of Common Stock issuable upon exercise of the Options remaining
unexercised immediately prior to any such adjustment, shall be changed to the
number of shares determined by dividing (i) the appropriate Option Price payable
for the purchase of all shares of Common Stock issuable upon exercise of all of
the Options remaining unexercised immediately prior to such adjustment by (ii)
the Option Price per share of Common Stock in effect immediately after such
adjustment. Pursuant to this formula, the total sum payable to the Company upon
the exercise of the Options remaining unexercised immediately prior to such
adjustment shall remain constant.
 
d.  
 
i.  If any capital reorganization or reclassification of the capital stock of
the Company, or consolidation or merger of the Company with another corporation,
person, or entity, or the sale of all or substantially all of its assets to
another corporation, person, or entity, shall be effected in such a way that
holders of Common Stock shall be entitled to receive stock, securities, cash,
property, or assets with respect to or in exchange for Common Stock, and
provided no election is made by the Company pursuant to subsection (ii) hereof,
then, as a condition of such reorganization, reclassification, consolidation,
merger or sale, the Company or such successor or purchasing corporation, person,
or entity, as the case may be, shall agree that the registered holder of the
Options shall have the right thereafter and until the Termination Time to
exercise such Options for the kind and amount of stock, securities, cash,
property, or assets receivable upon such reorganization, reclassification,
consolidation, merger, or sale by a holder of the number of shares of Common
Stock for the purchase of which such Options might have been exercised
immediately prior to such reorganization, reclassification, consolidation,
merger or sale, subject to such subsequent adjustments which shall be equivalent
or nearly equivalent as may be practicable to the adjustments provided for in
this Section.
 
 
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ii.  Notwithstanding subsection (i) hereof and in lieu thereof, the Company may
elect by written notice to the registered holder hereof, to require such
registered holder to exercise all of the Options remaining unexercised prior to
any such reorganization, reclassification, consolidation, merger or sale. If the
holder of this Option shall not exercise all or any part of the Options
remaining unexercised prior to such event, such unexercised Options shall
automatically become null and void upon the occurrence of any such event, and of
no further force and effect. The Common Stock issued pursuant to any such
exercise shall be deemed to be issued and outstanding immediately prior to any
such event, and shall be entitled to be treated as any other issued and
outstanding share of Common Stock in connection with such event. If an election
is not made by the Company pursuant to this subsection (ii) in connection with
any such event, then the provisions of subsection (i) hereof shall apply to such
event.
 
iii.  Notwithstanding anything else contained herein, including Section 3
hereof, immediately prior to any such reorganization, reclassification,
consolidation, merger or sale, which constitutes a Change In Control, any
Options which have not become vested pursuant to Section 3 hereof shall become
fully vested and exercisable immediately prior to any such event, and shall be
subject to subsection (i) or (ii) hereof, as the case may be.
 
For purposes hereof, the term "Change In Control" shall mean a sale, transfer,
assignment, or other disposition (including by reorganization, merger or
consolidation), of a controlling interest (i.e., at least 51% of the voting
power) of the then outstanding stock of the Company, or of all or substantially
all of the assets of the Company, or a liquidation or dissolution of the
Company. Other than in connection with a liquidation or dissolution, any such
transaction shall not, however, constitute a Change In Control if, following
such transaction, the beneficial owners of the voting stock of the Company
immediately prior to such transaction 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
or entities resulting from such transaction (including without limitation, an
entity which as a result of such transaction owns the Company, or all or
substantially all of the Company’s assets, either directly or through one or
more subsidiaries).
 
 
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e.  Whenever the Option Price and number of shares of Common Stock subject to
this Option is adjusted as herein provided, the Company shall promptly mail to
the registered holder of this Option a statement signed by an officer of the
Company setting forth the adjusted Option Price and the number of shares of
Common Stock subject to this Option, determined as so provided.
 
f.  This form of Certificate need not be changed because of any adjustment which
is required pursuant to this Section. However, the Company may at any time in
its sole discretion (which shall be conclusive) make any change in the form of
this Certificate that the Company may deem appropriate and that does not affect
the substance hereof; and any Certificate thereafter issued, whether in exchange
or substitution for this Certificate or otherwise, may be in the form as so
changed.
 
9.  Reservation. There has been reserved, and the Company shall at all times
keep reserved out of the authorized and un-issued shares of Common Stock, a
number of shares of Common Stock sufficient to provide for the exercise of the
right of purchase represented by the Options. The Company agrees that all shares
of Common Stock issued upon exercise of the Options shall be, at the time of
delivery of the Certificates for such Common Stock, validly issued and
outstanding, fully paid and non-assessable.
 
10.  Fractional Shares. The Company shall not issue any fractional shares of
Common Stock pursuant to any exercise of any Option and shall pay cash to the
holder of any Option in lieu of any such fractional shares.
 
11.  No Right. The holder of any Options shall not be entitled to any of the
rights of a shareholder of the Company prior to the date of issuance of the
Common Stock by the Company pursuant to an exercise of any Option.
 
12.  Securities Laws. As a condition to the issuance of any Common Stock
pursuant to the Options, the holder of such Common Stock shall execute and
deliver such representations, warranties, and covenants, that may be required by
applicable federal and state securities law, or that the Company determines is
reasonably necessary in connection with the issuance of such Common Stock. In
addition, the certificates representing the Common 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 the Company.
 
 
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13.  Transferability. Subject to compliance with applicable securities laws, all
Options represented by this Certificate that have vested in accordance with
Section 3 or Section 8(d)(iii) hereof shall inure to the benefit of, and be
exercisable by, any holder’s heirs, personal representatives, successors and
assigns, and shall be fully assignable and transferable by any holder at any
time and from time to time, including by will, intestacy or otherwise. Any such
assignee or transferee shall be entitled to all the benefits hereof and shall be
the holder hereof.
 
14.  Applicable Law. The Options and this Certificate shall be deemed to be a
contract made under the laws of the Commonwealth of Pennsylvania and for all
purposes shall be construed in accordance with the laws thereof regardless of
its choice of law rules.
 
IN WITNESS WHEREOF, USA TECHNOLOGIES, INC., has executed and delivered this
Certificate and caused its corporate seal to be affixed hereto.

        USA TECHNOLOGIES, INC.  
   
   
    By:   /s/ GEORGE R. JENSEN, JR.  

--------------------------------------------------------------------------------

George R. Jensen, Jr.,
Chief Executive Officer
   

           
   
   
    Attest:  /s/ STEPHEN P. HERBERT  

--------------------------------------------------------------------------------

Stephen P. Herbert, Secretary
Dated: July 20, 2006
 

 
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USA TECHNOLOGIES, INC.
100 Deerfield Lane, Suite 140
Malvern, Pennsylvania 19355
Attn: George R. Jensen, Jr.,
    Chief Executive Officer
 
ELECTION TO PURCHASE

The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the attached Option Certificate No.   of the Company. The
undersigned desires to purchase   shares of Common Stock provided for therein
and tenders herewith full payment of the Option Price for the shares of Common
Stock being purchased, all in accordance with the Certificate. The undersigned
requests that a Certificate representing such shares of Common Stock shall be
issued to and registered in the name of, and delivered to, the undersigned at
the following address:______________________________________. If said number of
shares of Common Stock shall not be all the shares purchasable under the
Certificate, then a new Common Stock Option Certificate for the balance
remaining of the shares of Common Stock purchasable shall be issued to and
registered in the name of, and delivered to, the undersigned at the address set
forth above.

           
   
   
         Dated: ________, 200__ Signature:___________________

 
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