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                        THIRD AMENDMENT TO EMPLOYMENT AND
                            NON-COMPETITION AGREEMENT

         This Third Amendment is made as of the 22nd day of February 2000, by
and between HAVEN BROCK KOLLS, JR. ("Kolls"), and USA TECHNOLOGIES, INC., a
Pennsylvania corporation ("USA").

                                   Background

         USA and Kolls entered into an Employment And Non-Competition Agreement
dated May 1, 1994, and a First Amendment thereto dated May 1, 1995, and a Second
Amendment thereto dated March 30, 1996 (collectively, the "Agreement"). As more
fully set forth herein, the parties desire to amend the Agreement in certain
respects.

                                    Agreement

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

         1. Amendments.

         A. Subparagraph A. of Section 1. Employment of the Agreement is hereby
deleted and the following new subparagraph A. is hereby substituted in its
place:

            A. USA shall employ Kolls as Senior Vice President - Research and
            Development commencing on December 12, 1997 and continuing through
            June 30, 2002 (the "Employment Period") and Kolls hereby accepts
            such employment. Unless terminated by either party hereto upon at
            least 60-days notice prior to end of the original Employment Period
            ending June 30, 2002, 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.

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         B. The following new subparagraph C. is hereby added to Section 1.
Employment of the Agreement:

            C. Nothing contained in subparagraph 1.B. hereof shall prohibit
            Kolls 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 Kolls 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.

         C. Subparagraph A. of Section 2. Compensation and Benefits of the
Agreement is hereby deleted and the following new subparagraph A. is hereby
substituted in its place:

            A. In consideration of his services rendered, commencing March 1,
            2000, USA shall pay to Kolls a base salary of $120,000 per year
            during the Employment Period, subject to any withholding required by
            law.

         D. Subparagraph B. of Section 2. Compensation and Benefits of the
Agreement is hereby deleted and the following new subparagraph B. is hereby
substituted in its place:


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            B. (i) In addition to the base salary provided for in subparagraph
            A., Kolls shall be entitled to receive such bonus or bonuses as the
            Compensation Committee of the Board of Directors may, in their sole
            discretion, pay to Kolls from time to time based upon his
            performance or the performance of USA. All awards in this regard may
            be made in cash or in Common Stock of USA ("Common Stock").

            (ii) As of the date of this Third Amendment, the Company shall issue
            to Kolls 20,000 shares of fully vested Common Stock as a bonus on
            account of calendar year 2000. Such shares of Common Stock shall be
            registered under the Securities Act of 1933, as amended ("Act"),
            pursuant to a Form S-8, at USA's cost and expense.

            (iii) Kolls shall also be entitled to receive an additional bonus of
            up to 25,000 shares of Common Stock on account of the 2000 calendar
            year. The determination of the amount of shares to be awarded to
            Kolls shall be made by the Compensation Committee of the Board of
            Directors, in their sole discretion, and shall be based upon the
            performance of USA and the performance of Kolls during the 2000
            calendar year. USA shall issue to Kolls any such shares of Common
            Stock during January 2001. Such shares of Common Stock shall be
            registered under the Act pursuant to a Form S-8, at USA's cost and
            expense.

            (iv) Provided that Kolls is an employee of USA at the end of the
            original Employment Period hereunder (i.e., on June 30, 2002), and
            further provided that Kolls has not materially breached any
            provision of this Agreement if he is so employed, then USA shall
            issue to Kolls 40,000 fully vested shares of Common Stock. USA shall
            issue to Kolls such shares of Common Stock during July 2002. All of
            such shares shall be registered under the Act pursuant to a Form
            S-8, at the cost and expense of USA. Kolls shall not be entitled to
            any such shares of Common Stock if for any reason whatsoever he is
            not an employee of USA on June 30, 2002. The number of shares of



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            Common Stock issuable to Kolls shall be equitably adjusted from time
            to time to reflect any stock splits, stock combinations, stock
            subdivisions, stock recapitilizations, reverse stock splits, stock
            dividends paid on, and other similar events involving the Company's
            Common Stock occurring prior to and as of June 30, 2002.

         E. The following new subparagraph D. is hereby added to Section 5
Business Secrets of the Agreement:

            D. All documents, data, know-how, designs, products, ideas,
            equipment, inventions, names, devices, marketing information, method
            or means, materials, software programs, hardware, configurations,
            information, or any other materials or data of any kind developed by
            you on behalf of USA or at its direction or for USA's use, or
            otherwise devised, developed, created, or invented in connection
            with your employment with USA or your affiliation with USA, and
            whether before or after the date of this Agreement, are and shall
            remain the sole and exclusive property of USA, and you have and
            shall have no right or interest whatsoever thereto. You hereby
            renounce and disclaim the work-for-hire doctrine and acknowledge
            that all such rights to intellectual property shall belong
            exclusively to USA and not to you. Any and all rights of ownership
            in connection with any of the foregoing shall belong solely to USA,
            and all copyright, patent, trademark, or similar rights or interests
            shall be the sole and exclusive property of USA. You hereby assign,
            transfer, and convey to USA all of your right, title and interest in
            and to any and all such inventions, discoveries, improvements,
            modifications and other intellectual property rights and agree to
            take all such actions as may be required by USA at any time and with
            respect to any such invention, discovery, improvement, modification
            or other intellectual property rights to confirm or evidence such
            assignment, transfer and conveyance. At USA's direction and request,
            you shall execute and deliver any and all forms, documents, or
            applications required under any applicable copyright, patent,
            trademark, or other law, rule or regulation.


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         2. Modification. Except as otherwise specifically set forth in
Paragraph 1, the Agreement shall not be amended or modified in any respect
whatsoever and shall continue in full force and effect.

         3. Capitalized Terms. Except as specifically provided otherwise herein,
all capitalized terms used herein shall have the meanings ascribed to them in
the Agreement.

         4. Original Part. The amendments to the Agreement made in Paragraph 1
hereof shall be deemed to have been an original part of the Agreement and to
have been effective from and after the date of the Agreement.

         IN WITNESS WHEREOF, the parties hereto have executed this Third
Amendment as of the day and year first above written.

                                                         USA TECHNOLOGIES, INC.



                                                  By: /s/ George R. Jensen, Jr.
                                                      --------------------------
                                                      George R. Jensen, Jr.
                                                      Chief Executive Officer


                                                      /s/ Haven Brock Kolls, Jr.
                                                      --------------------------
                                                      HAVEN BROCK KOLLS, JR.



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