Document:

THE
      COMMON STOCK ISSUABLE PURSUANT TO THIS AGREEMENT HAS NOT BEEN REGISTERED UNDER
      THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW. THE COMMON
      STOCK ISSUABLE PURSUANT TO THIS AGREEMENT 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 THE COMMON STOCK ISSUABLE PURSUANT
      TO THIS AGREEMENT, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
      SUCH REGISTRATION IS NOT REQUIRED.

    

    USA
      TECHNOLOGIES, INC.

    2006-B
      COMMON STOCK PURCHASE AGREEMENT

    

    This
      2006-B COMMON STOCK PURCHASE AGREEMENT is made this 25 day of August 2006 by
      and
      between USA TECHNOLOGIES,
      INC., a Pennsylvania corporation (“USA” or the “Company”), and STEVE ILLES
      (“ILLES” or “Investor”). 

    

    Background

    

    As
      more
      fully set forth herein, ILLES has agreed to purchase from the Company shares
      of
      Common Stock of the Company (“Common Stock”) for a purchase price not to exceed
      Fifteen Million Dollars ($15,000,000)(the “Commitment Amount”). 

    

    Agreement

    

    NOW
      THEREFORE, intending to be legally bound hereby, the parties agree as
      follows:

    

    1.Commitment.
      Subject
      to the terms and conditions hereof, ILLES agrees to purchase from USA shares
      of
      Common Stock with an aggregate purchase price not to exceed the Commitment
      Amount. The aggregate number of shares of Common Stock to be purchased by ILLES
      under this Agreement shall be as provided in subsection C. of this Section
      1.

    

    During
      the Put Commitment Period (as defined below), ILLES shall be required to
      purchase Common Stock from USA from time to time pursuant to the election of
      USA
      as described in subsection A. below. 

    

    A.
       During
      the period of time from and after the effectiveness of the Initial Registration
      Statement (as defined in Section 7 hereof) and through August 30, 2009 (“Put
      Commitment Period”), USA shall have the right at any time and from time to time
      to require ILLES to purchase Common Stock from the Company at the lower of
      the
      following price: (i) Thirty Dollars ($30.00) per share (the “Base Per Share
      Price”); or (ii) 90% of the closing bid price per share on the date prior to the
      date of the delivery by USA to ILLES of the Commitment To Purchase Form
      described below. For example, if the closing bid price of the shares on the
      applicable date was $50.00, then the exercise price would be the Base Per Share
      Price (i.e., $30.00), and if the closing bid price of the shares on the
      applicable date was $20.00, then the exercise price would be $18.00. USA
      shall
      require
      ILLES to purchase Common Stock from USA hereunder by delivery to ILLES (prior
      to
      expiration of the Put Commitment Period) of the completed Commitment To Purchase
      Form that is attached hereto setting forth the purchase price of the Common
      Stock to be purchased by ILLES from USA (“Commitment Purchase Price”) and the
      aggregate number of shares to be purchased by ILLES. The Commitment Purchase
      Price shall be delivered to the Company by ILLES within seven (7) business
      days
      after delivery to ILLES of the Commitment To Purchase Form and shall be paid
      by
      ILLES either in cash or by certified check or bank draft payable to the order
      of
      the Company. ILLES shall not be required by USA to purchase any Common Stock
      from USA pursuant to this Section 1.A unless the Common Stock being purchased
      by
      ILLES from USA hereunder has been registered for resale by ILLES under the
      Act
      pursuant to an effective registration statement, all in accordance with Section
      7.

     

    
      
         

      

      
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    B.
      Notwithstanding anything else set forth herein during any calendar month during
      the Put Commitment Period, ILLES shall not be required by USA to purchase under
      this Agreement Common Stock with an aggregate purchase price of more than Eight
      Hundred Thousand Dollars ($800,000).

    

    C.
      The
      initial number of shares of Common Stock subject to this Agreement shall be
      1,000,000. In order to ensure that ILLES shall purchase Common Stock under
      this
      Agreement with a purchase price of up to the Commitment Amount, at any time
      and
      from time to time during the Put Commitment Period, and subject to the other
      terms and conditions of this Agreement, USA shall have the right to increase
      the
      number of shares of Common Stock covered by this Agreement by notice to ILLES.
       

    

    
      
         

      

      
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    D.
      At the
      time of ILLES’ signing of this Agreement, USA shall pay to ILLES a due
      diligence/commitment fee consisting of 20,000 shares of restricted Common Stock
      (“Due Diligence Shares”). 

    

    2.
      Share
      Issuance.
      Upon
      the payment of the Commitment Purchase Price as aforesaid, the Company shall
      issue and cause to be delivered with all reasonable dispatch to ILLES and in
      the
      name of ILLES, a certificate or certificates for the number of shares of Common
      Stock so purchased. Such certificate or certificates shall be deemed to have
      been issued and ILLES 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 and payment
      of the Commitment Purchase Price as aforesaid. If, however, at the date of
      payment of such Commitment Purchase Price, the transfer books for the Common
      Stock shall be closed, the certificates for the Common Stock shall be issued
      and
      ILLES 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.

     

    3.
      Representations
      by ILLES.
      ILLES
      represents and warrants to the Company as follows:

    

    (a)
      ILLES
      has received, read and understands the provisions of each of the following:
      (i)
      the Company’s Annual Report on Form 10-K for the fiscal year ended June 30,
      2005; (ii) the Company’s Quarterly Report on Form 10-Q for the quarter ended
      September 30, 2005; (iii) the Company’s Quarterly Report on Form 10-Q for the
      quarter ended December 31, 2005; (iv) the Company’s Quarterly Report on Form
      10-Q for the quarter ended March 31, 2006; (v) the Company’s Amendment No. 1 to
      Registration Statement on Form S-1 filed with the Commission on April 6, 2006
      (File No. 333-132019); (vi) the risk factors incorporated by reference herein
      in
      Section 3(i) hereof; and (vii) the Company’s Form 8-K filed with the Commission
      on June 13, 2006, June 20, 2006, and July 26, 2006. All of the foregoing
      together with this Agreement shall be referred to herein as “Offering
      Materials”.

    

    (b)
      ILLES
      has relied only upon the information presented and contained in the Offering
      Materials. ILLES has had the opportunity to ask of the person or persons acting
      on behalf of the Company any and all relevant questions in connection with
      any
      aspect of the Company including, but not limited to, the Common Stock offered
      by
      the Offering Materials and has received answers which ILLES considers to be
      reasonably responsive to such questions. ILLES has had the opportunity to verify
      the accuracy of the information contained in the Offering Materials.

    

    
      
         

      

      
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    (c)
      ILLES
      understands that ILLES is subscribing for the Common Stock without being
      furnished any literature or prospectus in connection with the Offering other
      than the Offering Materials, and that the Offering of the Common Stock presented
      in the Offering Materials will not have been scrutinized by the securities
      administrator or similar bureau, agency, or department of the state of ILLES’
residence.

    

    (d)
      ILLES
      understands (i) that the neither the Common Stock nor the Due Diligence Shares
      have been registered under the Securities Act of 1933, as amended (the “Act”),
      or registered or qualified under the securities laws of the state of ILLES’
residence, (ii) except as provided in Section 7 hereof, ILLES has no right
      to
      require such registration or qualification, and (iii) that therefore ILLES
      must
      bear the economic risk of the investment for an indefinite period of time
      because neither the Common Stock nor the Due Diligence Shares may be sold unless
      so registered or qualified or unless an exemption from such registration and
      qualification is available.

    

    Although
      the Company has agreed to use its best efforts to register for resale the Common
      Stock and the Due Diligence Shares with the SEC, and to use its best efforts
      to
      keep such registration statement current and effective, there can be no
      assurance that such efforts will be successful. In any such event, neither
      the
      Common Stock nor the Due Diligence Shares would be registered for resale under
      the Act, and could only be sold in reliance upon exemptions from registration
      under the Act.

    

    (e)
      The
      Common Stock is being purchased for ILLES’ own account for investment purposes
      only and not for the interest of any other person and is not being purchased
      with a view to or for the resale, distribution, subdivision or fractionalization
      thereof. Although the Common Stock is currently traded on the OTC Bulletin
      Board
      under the symbol USAT, ILLES also understands that there may not be any
      established public trading market for the sale of such securities.

    

    
      
         

      

      
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    (f)
      ILLES
      is able to bear the economic risks related to purchase of the Common Stock
      for
      an indefinite period of time (i.e., ILLES is able to afford a complete loss
      of
      the Common Stock ILLES is subscribing to purchase). ILLES’ net worth and assets
      are sufficient to enable ILLES to purchase shares of Common Stock from USA
      in
      the amount of the Commitment Amount pursuant to this Agreement. 

    

    (g)
      ILLES’ overall commitment to investments which are not readily marketable is not
      disproportionate to ILLES’ net worth and ILLES’ investment in the Company will
      not cause such overall commitment to become excessive.

    

    (h)
      ILLES
      has adequate means of providing for ILLES’ current needs and possible personal
      contingencies. ILLES has no need for liquidity of the Common Stock subscribed
      to
      be purchased hereby and has no reason to anticipate any change in ILLES’
personal circumstances, financial or otherwise, which might cause or require
      any
      sale or distribution of such Common Stock subscribed to be purchased.

    

    (i)
      ILLES
      recognizes that the purchase of the Common Stock involves a high degree of
      risk
      including those special risks set forth under the caption "Risk Factors" and
      “Forward Looking Statements” in Amendment No. 1 to the Form S-1 Registration
      Statement of the Company filed with the Commission on April 6, 2006 (No.
      333-132019) all of which are incorporated herein by reference.

     

    (j)
      ILLES
      understand that ILLES’ right to transfer the Common Stock and the Due Diligence
      Shares will be restricted as set forth on the certificate evidencing the Common
      Stock and the Due Diligence Shares. Such restrictions include provisions against
      transfer unless such transfer is not in violation of the Act, or applicable
      state securities laws (including investor suitability standards). ILLES is
      familiar with Regulation M promulgated under the Act and agrees to comply with
      his obligations thereunder including those relating to his status as an
      underwriter of the Common Stock and the Due Diligence Shares. ILLES is aware
      of
      the SEC staff’s position on short sales set forth in CF Tel. Interp. A.65.

     

    
      
         

      

      
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    (k)
      All
      information which ILLES has provided to the Company including, but not limited
      to, financial position, and status as an accredited investor, and knowledge
      of
      financial and business matters is true, correct and complete as of the date
      of
      execution of this Agreement. ILLES understands that the Company will rely in
      a
      material degree upon the representations contained herein. 

    

    (l)
      ILLES
      understands that a legend may be placed on any stock certificate representing
      the Common Stock and the Due Diligence Shares substantially to the following
      effect:

    

    THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES STATUTES
      AND
      REGULATIONS. SUCH SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
      TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
      APPLICABLE STATE SECURITIES STATUTES AND REGULATIONS, UNLESS, IN THE OPINION
      (WHICH SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION) OF
      COUNSEL SATISFACTORY TO THE CORPORATION, SUCH REGISTRATION IS NOT
      REQUIRED.

    

    (m)
      ILLES
      is an "accredited investor" as defined in Rule 501 promulgated under the Act
      because ILLES’ individual net worth (or ILLES’ joint net worth with his spouse)
      on the date hereof exceeds $1,000,000.

    

    (n)
      ILLES
      has obtained all necessary authorizations, registrations, permits, or consents,
      governmental or otherwise, required in connection with his entering into or
      performing any of the transactions contemplated by this Agreement. 

    

    4.
      Adjustments.
      Subject
      and pursuant to the provisions of this Section 4, the Base Per Share Price
      shall
      be subject to adjustment from time to time only as set forth
      hereinafter:

    

    
      
         

      

      
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    a.
      In
      case the Company shall declare a Common Stock dividend on the Common Stock,
      then
      the Base Per Share 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 Base Per Share
      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 Base Per Share Price immediately prior to such combination shall
      be
      proportionately increased. Any such adjustment to the Base Per Share Price
      shall
      become effective at the close of business on the record date for such
      subdivision or combination. The Base Per Share 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.

    

    c. Whenever
      the Base Per Share Price is adjusted as herein provided, the Company shall
      promptly mail to ILLES a statement setting forth the adjusted Base Per Share
      Price determined as so provided.

    

    5.
      Non-Assessable.
      The
      Company agrees that all shares of Common Stock issued hereunder shall be, at
      the
      time of delivery of the certificates for such Common Stock, validly issued
      and
      outstanding, fully paid and non-assessable.

    

    6.
      Securities
      Laws.
      As a
      condition to the issuance of any Common Stock pursuant this Agreement, ILLES
      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 or its transfer
      agent.

    

    
      
         

      

      
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    7.
      Registration
      Provisions.
      The
      Company shall promptly prepare and file, at its sole cost and expense, and
      thereafter use its best efforts to have declared effective, an appropriate
      registration statement with the Securities and Exchange Commission registering
      all of the 1,000,000 shares of Common Stock initially covered by this Agreement
      and the Due Diligence Shares for resale by ILLES under the Act (the “Initial
      Registration Statement”). As provided in Section 1.C hereof, USA has the right
      from time to time to increase the number of shares of Common Stock to be covered
      by this Agreement. Any such additional shares may be included in an amendment
      to
      the Initial Registration Statement, or in a separate additional registration
      statement. 

    

    The
      term
“registration statement” whenever and as used in this Agreement shall mean and
      include for all purposes the Initial Registration Statement and any amendment
      or
      post-effective amendment thereto as well as any additional registration
      statement or amendment or post-effective amendment thereto covering any Common
      Stock subject to this Agreement.

    

    The
      registration statement shall be prepared as a "shelf" registration statement
      under Rule 415, and the Company shall use its best efforts to have the
      registration statement maintained effective until the earlier of (i) two years
      from the effective date of the Initial Registration Statement, or (ii) the
      date
      that all of the Common Stock covered by this Agreement is resold by ILLES
      pursuant to the registration statement or otherwise.

     

    At
      the
      Company’s request, ILLES shall furnish to the Company such information regarding
      ILLES, the Common Stock held by ILLES, and the intended method of disposition
      of
      such Common Stock to the extent required to effect the registration of the
      Common Stock. The Company shall include all information provided by ILLES
      pursuant hereto in the registration statement, substantially in the form
      supplied, except to the extent such information is not permitted by law. ILLES
      understands and agrees that ILLES will be listed and disclosed in the
      registration statement as an underwriter of the Common Stock as such term is
      defined in Section 2(a)(11) of the Act and as such ILLES will have liability,
      among other things, under Section 11 of the Act. 

    

    
      
         

      

      
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    All
      expenses (other than commissions and fees and expenses of counsel to ILLES)
      incurred in connection with the registration statement, including (without
      limitation) all registration, filing and qualification fees, printers' and
      accounting fees, fees and disbursements of counsel for the Company, shall be
      borne by the Company.

    

    8.
      Binding
      Effect.
      This
      Agreement shall be binding upon the party’s respective heirs, personal
      representatives, successors and assigns; provided, however, that this Agreement
      shall not be assignable by ILLES, in whole or in part, without the prior consent
      of the USA. 

    

    9. Indemnification.
      In the
      event any shares of Common Stock are included in a registration statement under
      this Agreement:

    

    (a)  To
      the
      extent permitted by law, the Company will indemnify and hold harmless ILLES,
      against any losses, claims, damages, or liabilities to which ILLES may become
      subject under the Act, the Securities Exchange Act of 1934, as amended (the
      “Exchange Act”)(or other federal or state law, insofar as such losses, claims,
      damages, or liabilities (or actions in respect thereof) arise out of or are
      based upon any of the following statements or omissions: (i) any untrue
      statement or alleged untrue statement of a material fact contained in such
      registration statement, including any preliminary prospectus or final prospectus
      contained therein or any amendments or supplements thereto, or (ii) the omission
      or alleged omission to state therein a material fact required to be stated
      therein, or necessary to make the statements therein not misleading, and the
      Company will reimburse ILLES for any legal or other expenses reasonably incurred
      by ILLES in connection with investigating or defending any such loss, claim,
      damage, liability, or action; provided, however, that the indemnity agreement
      contained in this subsection 9(a) shall not apply to amounts paid in settlement
      of any such loss, claim, damage, liability, or action if such settlement is
      effected without the consent of the Company (which consent shall not be
      unreasonably withheld), nor shall the Company be liable in any such case for
      any
      such loss, claim, damage, liability, or action to the extent that it arises
      out
      of or is based upon a violation which occurs in reliance upon and in conformity
      with written information furnished expressly for use in connection with such
      registration by ILLES; provided however, that the above shall not relieve the
      Company from any other liabilities which it might otherwise have.

    

    
      
         

      

      
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    (b)
       ILLES
      shall indemnify and hold harmless the Company, its directors and officers,
      each
      underwriter and each other person, if any, who controls (within the meaning
      of
      the Act) the Company or such other indemnified party, against any liability,
      joint or several, to which any such indemnified party may become subject under
      the Act or any other statute or at common law, insofar as such liability (or
      actions in respect thereof) arises out of or is based upon (i) any untrue
      statement or alleged untrue statement of any material fact contained, on the
      effective date thereof, in any registration statement under which securities
      were registered under the Act, any preliminary prospectus or final prospectus
      contained therein, or any amendment or supplement thereto, or (ii) any omission
      or alleged omission by ILLES to state therein a material fact required to be
      stated therein or necessary to make the statements therein not misleading,
      to
      the extent, but only to the extent, that such untrue statement or alleged untrue
      statement or omission or alleged omission was made in such registration
      statement, preliminary or final prospectus, amendment or supplement thereto
      in
      reliance upon and in conformity with information furnished in writing to the
      Company by ILLES specifically for use therein. ILLES shall reimburse any
      indemnified party for any legal fees incurred in investigating or defending
      any
      such liability.

    

    (c) Promptly
      after receipt by an indemnified party under this Section 9 of notice of the
      commencement of any action (including any governmental action), such indemnified
      party will, if a claim in respect thereof is to be made against any indemnifying
      party under this Section 9, deliver to the indemnifying party a written notice
      of the commencement thereof and the indemnifying party shall have the right
      to
      participate in, and, to the extent the indemnifying party so desires, jointly
      with any other indemnifying party similarly noticed, to assume, the defense
      thereof with counsel mutually satisfactory to the parties; provided, however,
      that an indemnified party shall have the right to retain its own counsel, with
      the reasonably incurred fees and expenses of one such counsel to be paid by
      the
      indemnifying party, if representation of such indemnified party by the counsel
      retained by the indemnifying party would be inappropriate due to actual or
      potential conflicting interests between such indemnified party and any other
      party represented by such counsel in such proceeding. The failure to deliver
      written notice to the indemnifying party within a reasonable time of the
      commencement of any such action, if materially prejudicial to its ability to
      defend such action, shall relieve such indemnifying party of any liability
      to
      the indemnified party under this Section 9, but the omission so to deliver
      written notice to the indemnifying party will not relieve it of any liability
      that it may have to any indemnified party otherwise than under this Section
      9.

     

    
      
         

      

      
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    (d) In
      the
      event that the indemnity provided in paragraphs (a) and/or (b) of this Section
      9
      is unavailable to or insufficient to hold harmless an indemnified party for
      any
      reason, the Company and ILLES agree to contribute to the aggregate claims,
      losses, damages and liabilities (including legal or other expenses reasonably
      incurred in connection with investigating or defending same) (collectively
      “Losses”) to which the Company and ILLES may be subject in such proportion as is
      appropriate to reflect the relative fault of the Company and ILLES in connection
      with the statements or omissions which resulted in such Losses. Relative fault
      shall be determined by reference to whether any alleged untrue statement or
      omission relates to information provided by the Company or by ILLES. The Company
      and ILLES agree that it would not be just and equitable if contribution were
      determined by pro rata allocation or any other method of allocation that does
      not take account of the equitable considerations referred to above.
      Notwithstanding the provisions of this paragraph (d), no person guilty of
      fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
      shall be entitled to contribution from any person who was not guilty of such
      fraudulent misrepresentation. For purposes of this Section 9, each person who
      controls the Company within the meaning of either the Act or the Exchange Act
      and each director and officer of the Company shall have the same rights to
      contribution as the Company, subject in each case to the applicable terms and
      conditions of this paragraph (d).

    

    (e) The
      obligations of the Company and ILLES under this Section 9 shall survive the
      resale, if any, of the Common Stock in a registration statement under this
      Agreement, and otherwise.

    

    
      
         

      

      
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    10.
      Applicable
      Law.
      This
      Agreement 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.

    

    11. Brokers
      and Finders.
      USA and
      ILLES hereby represent to each other that no broker or finder has been employed
      or engaged by either of them in connection with the transactions contemplated
      in
      this Agreement and that all negotiations relative to this Agreement have been
      carried on directly between the parties hereto without the intervention of
      any
      other person. 

     

    12. Survival
      of Representations and Warranties, and Remedies.
      All
      representations and warranties contained in this Agreement shall survive the
      execution and delivery of this Agreement. 

     

    13.  Entire
      Agreement. This
      Agreement constitutes the entire understanding and agreement between the parties
      hereto with respect to the transactions contemplated herein, supersedes all
      prior and contemporaneous agreements, understandings, negotiations and
      discussions, whether oral or written, of the parties, and there have been no
      warranties, representations or promises, written or oral, made by any of the
      parties hereto except as herein expressly set forth herein. The parties have
      previously entered into a 2006 Common Stock Purchase Agreement dated February
      17, 2006, and USA acknowledges and agrees that except for the 401,975 shares
      of
      Common Stock currently covered by the Registration Statement on Form S-1 (File
      No. 333-132019), USA shall not require ILLES to purchase from USA, and ILLES
      shall not purchase from USA, any additional shares of Common Stock thereunder.
      

     

    14. Waiver,
      Modification, etc..
      Any
      party to this Agreement may waive any of the terms or conditions of this
      Agreement or agree to an amendment or modification to this Agreement by an
      agreement in writing executed in the same manner (but not necessarily by the
      same persons) as this Agreement. No amendment or modification of this Agreement
      shall be binding unless in writing executed by all of the parties to this
      Agreement. No waiver of any of the provisions
      of this Agreement shall be deemed or shall constitute a waiver of any other
      provision hereof (whether or not similar), nor shall any waiver constitute
      a
      continuing waiver unless otherwise expressly provided.

     

    
      
         

      

      
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    15.
      Notice.
      Any
      notice or other communications required or permitted hereunder shall be
      sufficiently given: (i) three (3) business days after if sent by certified
      mail,
      return receipt requested, postage prepaid, or (ii) one (1) business day after
      sent by Federal Express or other overnight courier providing delivery
      confirmation for next business day delivery, or (ii) when delivered by personal
      delivery, telecopier, or e-mail, in any event delivered to or addressed as
      follows:

     

    If
      to
      ILLES:

     

    Mr.
      Steve
      Illes

    8006
      Southeast 167th
      Hilltop
      Loop

            
   Villages,
      Florida 32162

     

    If
      to
      USA:

     

    USA
      Technologies, Inc.

    Suite
      140

    100
      Deerfield Lane

    Malvern,
      Pennsylvania 19355

    Attn:
      George R. Jensen, Jr., Chief

     

    Executive
      Officer

     

    16.  Consent
      to Jurisdiction.
      Each of
      USA and ILLES irrevocably consents and agrees that any legal action or
      proceeding whatsoever arising out of or in any way connected with this Agreement
      or the transactions contemplated hereby may be commenced, filed, instituted
      or
      brought in the state or federal courts of the Commonwealth of Pennsylvania,
      and
      each of the parties hereto irrevocably submits and accepts with regard to any
      such legal action or proceeding to the jurisdiction of such courts. Each of
      the
      parties irrevocably consents to service of process out of any of the
      aforementioned courts in any such action or proceeding by the mailing of copies
      thereof by registered or certified mail, postage prepaid, to the parties hereto,
      such service to become effective upon mailing. Each of the parties hereto hereby
      irrevocably waive, to the fullest extent permitted by law, any objection which
      any of them may now or hereafter have to the laying of the venue of any suit,
      action or proceeding arising out of or relating to this Agreement or the
      transactions contemplated hereby, brought in such Pennsylvania courts, and
      hereby further irrevocably waives any claim, that any such suit, action or
      proceeding brought in such courts, has been brought in an inconvenient forum.
      

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    17.
      Counterparts.
      This
      Agreement may be signed in two or more counterparts which counterparts shall
      constitute a single, integrated agreement binding upon all the signatories
      to
      such counterparts. Delivery of an executed counterpart of this Agreement by
      facsimile shall be equally as effective as delivery of a manually executed
      counterpart of this Agreement. 

     

    18.
      Expenses.
      Except
      as specifically provided otherwise herein, each party hereto shall pay its
      or
      his own expenses arising from this Agreement and the transactions contemplated
      hereby, including, without limitation, all legal and accounting fees and
      disbursements; provided, however, that nothing herein shall limit or otherwise
      modify any right of the parties to recover such expenses (including legal fees
      and costs of litigation) from the other in the event any party hereto breaches
      this Agreement.

     

    19.
      Further
      Assurances.
      Each of
      the parties hereto shall hereafter execute and deliver such further documents
      and instruments and do such further acts and things as may be required or useful
      to carry out the intent and purpose of this Agreement and as are not
      inconsistent with the terms hereof.

     

    IN
      WITNESS WHEREOF, the parties hereto have executed and delivered this 2006-B
      Common Stock Purchase Agreement on the date first written above.

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

              STEVE
                ILLES

            	
              

              George
                R. Jensen, Jr.,

              Chief
                Executive Officer

            
	 	 

    

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    Mr.
      Steve
      Illes

    8006
      Southeast 167th
      Hilltop
      Loop

    Villages,
      Florida 32162

    

    COMMITMENT
      TO PURCHASE

    

    Pursuant
      to the 2006-B Common Stock Purchase Agreement between USA and ILLES, USA hereby
      irrevocably elects to require ILLES to purchase  
      shares
      of Common Stock provided for therein at the price of ___ per share, or an
      aggregate of $_________, for ____________ shares of Common Stock. Pursuant
      to
      the Agreement, ILLES shall deliver the purchase price for the shares within
      seven business days. The certificate representing such shares of Common Stock
      shall be issued to and registered in the name of, and delivered to, the ILLES
      at
      the address set forth in the Agreement. 

    
      	 	 	 
	Dated:
              ______,
              200__	USA
              TECHNOLOGIES,
              INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Title:

            
	 	 

    

    

    
      
         

      

      
        15THESE
        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                             

                NO.
                  201

              	
                75,000
                  COMMON STOCK
                  OPTIONS

              

      

      

      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 GEORGE R. JENSEN,
        JR.
        (“JENSEN”), or the registered holder thereof, is the owner of 75,000 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.

       

      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 $7.50 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.

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

      3.  Vesting
        of Options.
        

       

      a.  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 JENSEN, or the registered holder hereof, in accordance with the terms
        and
        conditions set forth in this Section 3. If JENSEN is employed by the Company
        as
        of the date set forth in Column "A" below, the number of Options set forth
        in
        Column "B" below shall on such date become irrevocably and absolutely vested
        and
        exercisable.

       

      
        	
                Column
                  "A"

              	 	
                Column
                  "B"

              	 
	
                Vesting
                  Date

              	 	
                Options
                  Vested

              	 
	
                May
                  11, 2006

              	 	 	
                25,000

              	 
	
                June
                  30, 2007

              	 	 	
                25,000

              	 
	
                June
                  30, 2008

              	 	 	
                25,000

              	 
	
                TOTAL

              	 	 	
                75,000

              	 

      

       

      b.  The
        Amended and Restated Employment and Non-Competition Agreement dated May 11,
        2006
        between JENSEN and the Company, including any and all supplements, amendments,
        restatements, or modifications thereto made from time to time in the future
        (the
        "Employment Agreement"), are hereby incorporated herein by reference. The
        terms
        and conditions thereof shall be used to determine whether JENSEN is employed
        by
        the Company on any particular vesting date. Therefore, and as set forth in
        the
        Employment Agreement (as existing on the date hereof), JENSEN's employment
        would
        be considered terminated upon his death or disability under Section 5 thereof,
        or upon notice given to JENSEN by the Company under Section 4 thereof, or
        upon
        notice given by the Company or JENSEN under Section 1(a) thereof.

       

      c.  If
        pursuant hereto JENSEN shall not become vested in any particular Option or
        Options, he shall only forfeit the Option or Options not so vested. Any Option
        or Options previously vested pursuant hereto shall nevertheless remain fully
        vested and exercisable all in accordance with the terms hereof.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      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.

       

      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.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      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.

       

      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.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      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.

       

      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.

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      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, and provided that JENSEN is then employed
        by
        the Company, 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). 

       

      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.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      9.  Reservation.
        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 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.

       

      13.  Transferability.
        Subject
        to compliance with applicable securities laws, all Options that have vested
        in
        accordance with Section 3(a) or Section 8(d)(iii) hereof and represented
        by this
        Certificate 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.

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      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:
                  May 11, 2006

              	
              

      

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      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:___________________ 

      

        

      
        
           

        

        
          9

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