On January 3, 2013, USA Technologies Inc. and Avidbank Corporate Finance, a division of Avidbank, entered into a First Amendment to the Loan and Security Agreement previously entered into by them on July 10, 2012. The Loan Agreement provides for a secured asset-based revolving line of credit based upon a borrowing base equal to a percentage of the company's accounts receivable and processing revenues and service fees, provided that the aggregate amount of advances under the line of credit shall not exceed $3,000,000. As a result of the First Amendment, the borrowing base has now been increased by $1,000,000.

Pursuant to the original Loan Agreement, the aggregate amount of advances under the Line of Credit could not exceed the lesser of $3,000,000, or 75% of eligible accounts receivable as defined in the Loan Agreement plus 80% of the prior two months transaction processing revenues and networking service fees as defined in the Loan Agreement, provided that the amounts advanced on account of such processing revenues and service fees could not exceed $1,000,000 without the Bank's prior consent. Pursuant to the First Amendment, the Bank has now agreed that the amounts to be advanced on account of such processing revenues and service fees shall be increased from $1,000,000 to $2,000,000. As a result of such increase, the Borrowing Base has been increased by $1,000,000.