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                       SECOND AMENDMENT TO EMPLOYMENT AND
                            NON-COMPETITION AGREEMENT

         This Second Amendment is made as of the 22nd day of February 2000, by
and between GEORGE R. JENSEN, JR. ("Jensen"), and USA TECHNOLOGIES, INC., a
Pennsylvania corporation ("USA").

                                   Background

         USA and Jensen entered into an Employment And Non-Competition Agreement
dated November 20, 1997, and a First Amendment thereto dated June 17, 1999
(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 Jensen as Chairman and Chief Executive Officer
            commencing on June 17, 1999, and continuing through June 30, 2002
            (the "Employment Period") and Jensen 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. Subparagraph (c) of Section 1. Employment of the Agreement is hereby
deleted and the following new subparagraph (c) is hereby substituted in its
place:

            (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.

         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 Jensen a base salary of $135,000 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.


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         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:

            (b) (i) In addition to the base salary provided for in subparagraph
            (a), Jensen shall be eligible to receive such bonus or bonuses as
            the Compensation Committee of the Board of Directors may, in their
            sole discretion, pay to Jensen from time to time based upon his
            performance and/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 Second Amendment, USA shall issue to
            Jensen 25,000 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) Jensen shall also be eligible 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 number of shares to be
            awarded to Jensen 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/or the performance of Jensen during
            the 2000 calendar year. USA shall issue to Jensen 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 Jensen is an employee of USA at the end of the
            original Employment Period hereunder (i.e., on June 30, 2002), and
            further provided that Jensen has not materially breached any
            provision of this Agreement if he is so employed, then USA shall
            issue to Jensen 40,000 fully vested shares of Common Stock. USA
            shall issue to Jensen 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.


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                  Jensen 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 Common Stock
                  issuable to Jensen 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 7.
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
            Jensen on behalf of USA or at its direction or for USA's use, or
            otherwise devised, developed, created, or invented in connection
            with Jensen's employment with USA or Jensen's 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 Jensen has
            and shall have no right or interest whatsoever thereto. Jensen
            hereby renounces and disclaims the work-for-hire doctrine and
            acknowledges that all such rights to intellectual property shall
            belong exclusively to USA and not to Jensen. 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.
            Jensen hereby assigns, transfers, and conveys to USA all of Jensen's
            right, title and interest in and to any and all such inventions,
            discoveries, improvements, modifications and other intellectual
            property rights and agrees 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


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            rights to confirm or evidence such assignment, transfer and
            conveyance. At USA's direction and request, Jensen shall execute and
            deliver any and all forms, documents, or applications required under
            any applicable copyright, patent, trademark, or other law, rule or
            regulation.

         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 Second
Amendment as of the day and year first above written.

                                                   USA TECHNOLOGIES, INC.



                                                   By: /s/ Stephen P. Herbert
                                                       -------------------------
                                                       Stephen P. Herbert,
                                                       President


                                                       /s/ George R. Jensen, Jr.
                                                       -------------------------
                                                        GEORGE R. JENSEN, JR.


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