INTERNATIONAL CARD ESTABLISHMENT INC
EXHIBIT 10.1
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>ex10-1.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>



                                                                    EXHIBIT 10.1


                             SUBSCRIPTION AGREEMENT


         THIS SUBSCRIPTION AGREEMENT (this "Agreement"), dated as of May ___,
2004, by and among International Card Establishment, Inc., a Delaware
corporation (the "Company"), and the subscribers identified on the signature
page hereto (each a "Subscriber" and collectively "Subscribers").

         WHEREAS, the Company and the Subscribers are executing and delivering
this Agreement in reliance upon an exemption from securities registration
afforded by the provisions of Section 4(2), Section 4(6) and/or Regulation D
("Regulation D") as promulgated by the United States Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"1933 Act").

         WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to the
Subscribers, as provided herein, and the Subscribers shall purchase, in the
aggregate, up to $3,000,000 (the "Purchase Price") of the Company's shares of
common stock, $.0005 par value (the "Common Stock" or "Shares"), and share
purchase warrants in the forms attached hereto as EXHIBIT A AND EXHIBIT B
(collectively, the "Warrants"), to purchase shares of Common Stock (the "Warrant
Shares"). The per Share Purchase Price shall be $0.63, subject to adjustment as
described in this Agreement. The Purchase Price shall be payable to the Company
on the Closing Date, as defined in Section 13(b) hereof. The Common Stock, the
Warrants and the Warrant Shares are collectively referred to herein as the
"Securities"; and

         WHEREAS, the aggregate proceeds of the sale of the Common Stock and the
Warrants contemplated hereby shall be held in escrow pursuant to the terms of a
Funds Escrow Agreement to be executed by the parties substantially in the form
attached hereto as EXHIBIT C (the "Escrow Agreement").

         NOW, THEREFORE, in consideration of the mutual covenants and other
agreements contained in this Agreement, the Company and the Subscribers hereby
agree as follows:

                  1. Purchase and Sale of Shares and Warrants. Subject to the
satisfaction (or waiver) of the conditions to Closing set forth in this
Agreement and the Escrow Agreement, each Subscriber shall purchase the Shares
and Warrants for the portion of the Purchase Price indicated on the signature
page hereto, and the Company shall sell such Shares and Warrants to the
Subscriber. The Purchase Price for the Shares and Warrants shall be paid in
cash. The entire Purchase Price shall be allocated to the Shares.

                  2. Escrow Arrangements; Form of Payment. Upon execution hereof
by the parties and pursuant to the terms of the Escrow Agreement, each
Subscriber agrees to make the deliveries required of such Subscriber as set
forth in the Escrow Agreement and the Company agrees to make the deliveries
required of the Company as set forth in the Escrow Agreement.

                  3. Warrants.

                           (a) A Warrants. On the Closing Date the Company will
issue A Warrants to the  Subscribers.  One (1) A Warrant will be issued for each
two (2) Shares issued on the Closing Date.  The per Warrant Share exercise price
to acquire a Warrant Share upon  exercise of an A Warrant shall be $0.69.  The A
Warrants  shall be exercisable  until the  registration  statement  described in
Section 11.1(iv) of this Agreement has been effective for one hundred and eighty
(180) days. The A Warrants will be exercisable on a cash only basis.


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<PAGE>


                           (b) B Warrants. On the Closing Date the Company will
issue B Warrants to the  Subscribers.  One (1) B Warrant will be issued for each
one (1) Share issued on the Closing Date.  The per Warrant Share  exercise price
to acquire a Warrant Share upon  exercise of a B Warrant  shall be $1.00.  The B
Warrants shall be exercisable until five (5) years after the Closing Date.

                           (c) The Warrants will be subject to a "Call" feature
exercisable by the Company on terms and conditions described in the Warrants.

                  4. Subscriber's Representations and Warranties. Each
Subscriber hereby represents and warrants to and agrees with the Company only as
to such Subscriber that:

                           (a) Information on Company. The Subscriber has been
furnished  with or has had access at the EDGAR Website of the  Commission to the
Company's  Form  10-KSB for the year ended  December  31, 2003 as filed with the
Commission,  together with all subsequently filed Forms 10-QSB, 8-K, and filings
made with the Commission available at the EDGAR website (hereinafter referred to
collectively  as the  "Reports").  In addition,  the  Subscriber has received in
writing  from the Company  such other  information  concerning  its  operations,
financial condition and other matters as the Subscriber has requested in writing
(such other information is collectively,  the "Other Written Information"),  and
considered  all  factors  the  Subscriber  deems  material  in  deciding  on the
advisability of investing in the Securities.

                           (b) Information on Subscriber. The Subscriber is, and
will be at the time of the conversion of the Common Stock and exercise of any of
the Warrants, an "accredited investor",  as such term is defined in Regulation D
promulgated by the Commission  under the 1933 Act, is experienced in investments
and business  matters,  has made  investments  of a  speculative  nature and has
purchased  securities  of United  States  publicly-owned  companies  in  private
placements in the past and,  with its  representatives,  has such  knowledge and
experience  in  financial,  tax and other  business  matters  as to  enable  the
Subscriber to utilize the information  made available by the Company to evaluate
the merits and risks of and to make an informed investment decision with respect
to the  proposed  purchase,  which  represents  a  speculative  investment.  The
Subscriber  has the authority and is duly and legally  qualified to purchase and
own the  Securities.  The Subscriber is able to bear the risk of such investment
for an indefinite period and to afford a complete loss thereof.  The information
set forth on the signature page hereto regarding the Subscriber is accurate.

                           (c) Purchase of Common Stock and Warrants. On each
closing  date,  the  Subscriber  will  purchase the Common Stock and Warrants as
principal for its own account and not with a view to any distribution thereof.

                           (d) Compliance with Securities Act. The Subscriber
understands and agrees that the Securities  have not been  registered  under the
1933 Act or any applicable state securities laws, by reason of their issuance in
a transaction  that does not require  registration  under the 1933 Act (based in
part  on the  accuracy  of the  representations  and  warranties  of  Subscriber
contained herein),  and that such Securities must be held indefinitely  unless a
subsequent  disposition is registered under the 1933 Act or any applicable state
securities laws or is exempt from such  registration.  In any event, and subject
to compliance  with  applicable  securities  laws, the Subscriber may enter into
hedging transactions with third parties, which may in turn engage in short sales
of the  Securities  in the course of hedging  the  position  they assume and the
Subscriber may also enter into short positions or other derivative  transactions
relating to the  Securities,  or  interests in the  Securities,  and deliver the
Securities,  or interests in the  Securities,  to close out their short or other
positions or  otherwise  settle  short sales or other  transactions,  or loan or
pledge the Securities,  or interests in the Securities, to third parties that in
turn may dispose of these Securities.


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<PAGE>


                           (e) Shares Legend. The Shares and the Warrant Shares
shall bear the following or similar legend:

                  "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE
                  SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
                  HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
                  STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE STATE
                  SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY
                  SATISFACTORY TO INTERNATIONAL CARD ESTABLISHMENT, INC. THAT
                  SUCH REGISTRATION IS NOT REQUIRED."

                           (f) Warrants Legend. The Warrants shall bear the
following or similar legend:

                  "THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF
                  THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
                  OF 1933, AS AMENDED. THIS WARRANT AND THE COMMON SHARES
                  ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
                  OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
                  EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID
                  ACT OR ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF
                  COUNSEL REASONABLY SATISFACTORY TO INTERNATIONAL CARD
                  ESTABLISHMENT, INC. THAT SUCH REGISTRATION IS NOT REQUIRED."

                           (g) Communication of Offer. The offer to sell the
Securities was directly  communicated  to the  Subscriber by the Company.  At no
time was the Subscriber presented with or solicited by any leaflet, newspaper or
magazine  article,  radio or  television  advertisement,  or any  other  form of
general  advertising  or  solicited or invited to attend a  promotional  meeting
otherwise than in connection and concurrently with such communicated offer.

                           (h) Authority; Enforceability. This Agreement and
other  agreements  delivered  together  with  this  Agreement  or in  connection
herewith have been duly authorized, executed and delivered by the Subscriber and
are valid and binding  agreements  enforceable  in accordance  with their terms,
subject  to  bankruptcy,   insolvency,   fraudulent  transfer,   reorganization,
moratorium  and similar laws of general  applicability  relating to or affecting
creditors' rights generally and to general  principles of equity; and Subscriber
has full  corporate  power and authority  necessary to enter into this Agreement
and such other agreements and to perform its obligations hereunder and under all
other agreements entered into by the Subscriber relating hereto.

                           (i) Correctness of Representations. Each Subscriber
represents  as  to  such  Subscriber  that  the  foregoing  representations  and
warranties  are true and correct as of the date hereof and,  unless a Subscriber
otherwise  notifies  the  Company  prior to the  Closing  Date  (as  hereinafter
defined), shall be true and correct as of the Closing Date.

                           (j) Survival. The foregoing representations and
warranties shall survive the Closing Date for a period of two years.


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<PAGE>


                  5. Company Representations and Warranties. The Company
represents and warrants to and agrees with each Subscriber that:

                           (a) Due Incorporation. The Company and each of its
subsidiaries  is a  corporation  duly  organized,  validly  existing and in good
standing under the laws of the respective  jurisdictions of their  incorporation
and have the requisite  corporate power to own their  properties and to carry on
their business as now being conducted.  The Company and each of its subsidiaries
is  duly  qualified  as a  foreign  corporation  to do  business  and is in good
standing in each  jurisdiction  where the nature of the  business  conducted  or
property  owned by it makes  such  qualification  necessary,  other  than  those
jurisdictions  in which the  failure  to so  qualify  would not have a  material
adverse  effect  on the  business,  operations  or  financial  condition  of the
Company.

                           (b) Outstanding Stock. All issued and outstanding
shares of capital  stock of the Company and each of its  subsidiaries  have been
duly authorized and validly issued and are fully paid and non-assessable.

                           (c) Authority; Enforceability. This Agreement, the
Common  Stock,  the  Warrants,  the Escrow  Agreement  and any other  agreements
delivered together with this Agreement or in connection  herewith  (collectively
"Transaction  Documents") have been duly  authorized,  executed and delivered by
the Company and are valid and binding agreements  enforceable in accordance with
their  terms,   subject  to   bankruptcy,   insolvency,   fraudulent   transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting  creditors'  rights generally and to general  principles of equity.
The Company has full corporate  power and authority  necessary to enter into and
deliver the Transaction Documents and to perform its obligations thereunder.

                           (d) Additional Issuances/Registration Rights. There
are no  outstanding  agreements or preemptive  or similar  rights  affecting the
Company's common stock or equity and no outstanding rights,  warrants or options
to acquire,  or instruments  convertible into or exchangeable for, or agreements
or  understandings  with respect to the sale or issuance of any shares of common
stock  or  equity  of  the  Company  or  other  equity  interest  in  any of the
subsidiaries of the Company except as described on SCHEDULE 5(D).  Except as set
forth on SCHEDULE  5(D),  no person or entity has any right to cause the Company
to effect the registration under the 1933 Act of any securities of the Company.

                           (e) Consents. No consent, approval, authorization or
order  of  any  court,   governmental   agency  or  body  or  arbitrator  having
jurisdiction  over the Company,  or any of its  affiliates,  the American  Stock
Exchange, the National Association of Securities Dealers, Inc., Nasdaq, SmallCap
Market, the OTC Bulletin Board ("Bulletin Board") nor the Company's shareholders
is required for the  execution by the Company of the  Transaction  Documents and
compliance  and  performance  by  the  Company  of  its  obligations  under  the
Transaction Documents,  including,  without limitation, the issuance and sale of
the Securities.

                           (f) No Violation or Conflict. Assuming the
representations  and  warranties  of the  Subscribers  in Section 4 are true and
correct,  neither the issuance and sale of the Securities nor the performance of
the Company's  obligations under this Agreement and all other agreements entered
into by the Company relating thereto by the Company will:

                                    (i) violate, conflict with, result in a
breach of, or  constitute a default (or an event which with the giving of notice
or the lapse of time or both would be reasonably likely to constitute a default)


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<PAGE>

under (A) the articles or certificate of incorporation, charter or bylaws of the
Company,  (B) to the Company's  knowledge,  any decree,  judgment,  order,  law,
treaty,  rule,  regulation  or  determination  applicable  to the Company of any
court,  governmental  agency or body, or arbitrator having jurisdiction over the
Company  or any of its  subsidiaries  or over the  properties  or  assets of the
Company or any of its affiliates,  (C) the terms of any bond, debenture, note or
any other  evidence of  indebtedness,  or any  agreement,  stock option or other
similar plan, indenture,  lease, mortgage,  deed of trust or other instrument to
which the Company or any of its affiliates or  subsidiaries is a party, by which
the Company or any of its affiliates or  subsidiaries  is bound, or to which any
of the  properties of the Company or any of its  affiliates or  subsidiaries  is
subject,  or (D)  the  terms  of  any  "lock-up"  or  similar  provision  of any
underwriting or similar agreement to which the Company, or any of its affiliates
or subsidiaries is a party except the violation, conflict, breach, or default of
which would not have a material adverse effect on the Company; or

                                    (ii) result in the creation or imposition of
any lien,  charge or encumbrance upon the Securities or any of the assets of the
Company, its subsidiaries or any of its affiliates; or

                                    (iii) result in the activation of any
anti-dilution  rights or a reset or repricing of any debt or security instrument
of any  other  creditor  or  equity  holder of the  Company,  nor  result in the
acceleration of the due date of any obligation of the Company; or

                                    (iv) result in the activation of any
piggy-back registration rights of any person or entity holding securities of the
Company or having the right to receive securities of the Company.

                           (g) The Securities. The Securities upon issuance:

                                    (i) are, or will be, free and clear of any
security interests, liens, claims or other encumbrances, subject to restrictions
upon transfer under the 1933 Act and any applicable state securities laws;

                                    (ii) have been, or will be, duly and validly
authorized  and on the date of issuance  of the Shares and upon  exercise of the
Warrants,  the Shares and Warrant Shares will be duly and validly issued,  fully
paid and nonassessable  (and if registered  pursuant to the 1933 Act, and resold
pursuant  to an  effective  registration  statement  will  be free  trading  and
unrestricted,  provided  that  each  Subscriber  complies  with  the  prospectus
delivery requirements of the 1933 Act);

                                    (iii) will not have been issued or sold in
violation  of any  preemptive  or other  similar  rights of the  holders  of any
securities of the Company; and

                                    (iv) will not subject the holders thereof to
personal liability by reason of being such holders.

                            (h) Litigation. There is no pending or, to the best
knowledge of the Company,  threatened action, suit,  proceeding or investigation
before any court, governmental agency or body, or arbitrator having jurisdiction
over the Company,  or any of its  affiliates  that would affect the execution by
the  Company or the  performance  by the  Company of its  obligations  under the
Transaction  Documents.  Except as disclosed in the Reports, there is no pending
or, to the best knowledge of the Company,  basis for or threatened action, suit,
proceeding or investigation  before any court,  governmental  agency or body, or


                                       5


<PAGE>

arbitrator having  jurisdiction over the Company, or any of its affiliates which
litigation if adversely  determined  could have a material adverse effect on the
Company.

                           (i) Reporting Company. The Company is a publicly-held
company  subject  to  reporting  obligations  pursuant  to  Section  13  of  the
Securities  Exchange Act of 1934, as amended (the "1934 Act") and has a class of
common shares registered  pursuant to Section 12(g) of the 1934 Act. Pursuant to
the  provisions  of the 1934 Act,  the  Company  has filed all reports and other
materials  required  to be filed  thereunder  with  the  Commission  during  the
preceding twelve months.

                           (j) No Market Manipulation. The Company has not
taken,  and will not take,  directly or indirectly,  any action  designed to, or
that might  reasonably  be  expected  to,  cause or result in  stabilization  or
manipulation  of the price of the common stock of the Company to facilitate  the
sale or resale of the Securities or affect the price at which the Securities may
be issued or resold.

                           (k) Information Concerning Company. The Reports
contain all material  information relating to the Company and its operations and
financial  condition as of their respective dates which  information is required
to be disclosed therein.  Since the date of the financial statements included in
the Reports,  and except as modified in the Other Written  Information or in the
Schedules  hereto,  there has been no material  adverse  change in the Company's
business,  financial  condition or affairs not  disclosed  in the  Reports.  The
Reports do not contain any untrue  statement of a material fact or omit to state
a  material  fact  required  to be  stated  therein  or  necessary  to make  the
statements therein not misleading in light of the circumstances when made.

                           (l) Stop Transfer. The Securities, when issued, will
be restricted securities.  The Company will not issue any stop transfer order or
other order  impeding  the sale,  resale or  delivery of any of the  Securities,
except as may be required by any applicable federal or state securities laws and
unless contemporaneous notice of such instruction is given to the Subscriber.

                           (m) Defaults. The Company is not in violation of its
articles of incorporation or bylaws.  The Company is (i) not in default under or
in violation of any other  material  agreement  or  instrument  to which it is a
party or by which  it or any of its  properties  are  bound or  affected,  which
default or violation would have a material  adverse effect on the Company,  (ii)
not  in  default  with  respect  to  any  order  of  any  court,  arbitrator  or
governmental  body  or  subject  to or  party  to  any  order  of any  court  or
governmental  authority arising out of any action,  suit or proceeding under any
statute or other law respecting antitrust,  monopoly, restraint of trade, unfair
competition  or similar  matters,  or (iii) to its knowledge not in violation of
any statute,  rule or regulation of any  governmental  authority which violation
would have a material adverse effect on the Company.

                           (n) No Integrated Offering. Neither the Company, nor
any of its  affiliates,  nor any  person  acting  on its or  their  behalf,  has
directly or indirectly made any offers or sales of any security or solicited any
offers to buy any security under circumstances that would cause the offer of the
Securities  pursuant to this Agreement to be integrated  with prior offerings by
the Company for purposes of the 1933 Act or any applicable  stockholder approval
provisions,  including,  without limitation,  under the rules and regulations of
the  Bulletin  Board.  Nor  will  the  Company  or  any  of  its  affiliates  or
subsidiaries  take any  action  or  steps  that  would  cause  the  offer of the
Securities to be integrated with other  offerings.  The Company will not conduct
any  offering  other  than the  transactions  contemplated  hereby  that will be
integrated with the offer or issuance of the Securities.

                           (o) No General Solicitation. Neither the Company, nor
any of its affiliates,  nor to its knowledge,  any person acting on its or their
behalf, has engaged in any form of general  solicitation or general  advertising


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<PAGE>

(within the meaning of Regulation D under the 1933 Act) in  connection  with the
offer or sale of the Securities.

                           (p) Listing. The Company's common stock is quoted on
the Bulletin Board. The Company has not received any oral or written notice that
its common stock is not eligible nor will become ineligible for quotation on the
Bulletin Board nor that its common stock does not meet all  requirements for the
continuation  of such quotation and the Company  satisfies and as of the Closing
Date, the Company will satisfy all the requirements for the continued  quotation
of its common stock on the Bulletin Board.

                           (q) No Undisclosed Liabilities. The Company has no
liabilities or obligations which are material, individually or in the aggregate,
which are not disclosed in the Reports and Other Written Information, other than
those incurred in the ordinary course of the Company's businesses since December
31,  2003 and which,  individually  or in the  aggregate,  would  reasonably  be
expected to have a material adverse effect on the Company's financial condition,
other than as set forth in SCHEDULE 5(Q).

                           (r) No Undisclosed Events or Circumstances. Since
December 31, 2003, no event or circumstance  has occurred or exists with respect
to the Company or its businesses, properties, operations or financial condition,
that,  under applicable law, rule or regulation,  requires public  disclosure or
announcement  prior to the date  hereof by the Company but which has not been so
publicly announced or disclosed in the Reports.

                           (s) Capitalization. The authorized and outstanding
capital  stock of the Company as of the date of this  Agreement  and the Closing
Date are set forth on  SCHEDULE  5(S).  Except as set forth in the  Reports  and
Other Written Information and SCHEDULE 5(D), there are no options,  warrants, or
rights to subscribe to,  securities,  rights or obligations  convertible into or
exchangeable  for or giving  any right to  subscribe  for any  shares of capital
stock of the  Company.  All of the  outstanding  shares of  Common  Stock of the
Company have been duly and validly  authorized and issued and are fully paid and
nonassessable.

                           (t) Dilution. The Company's executive officers and
directors  understand  the  nature  of the  Securities  being  sold  hereby  and
recognize  that the issuance of the  Securities  will have a potential  dilutive
effect on the equity holdings of other holders of the Company's equity or rights
to receive  equity of the  Company.  The board of  directors  of the Company has
concluded,  in its  good  faith  business  judgment,  that the  issuance  of the
Securities  is in the best  interests of the Company.  The Company  specifically
acknowledges  that its  obligation  to issue the  Securities is binding upon the
Company and enforceable regardless of the dilution such issuance may have on the
ownership  interests of other shareholders of the Company or parties entitled to
receive equity of the Company.

                           (u) No Disagreements with Accountants and Lawyers.
There  are no  disagreements  of any  kind  presently  existing,  or  reasonably
anticipated by the Company to arise, between the Company and the accountants and
lawyers formerly or presently employed by the Company, including but not limited
to disputes or conflicts over payment owed to such accountants and lawyers.

                           (v) Investment Company. The Company is not, and is
not an Affiliate (as defined in Rule 405 under the 1933 Act) of, an  "investment
company" within the meaning of the Investment Company Act of 1940, as amended.

                           (w) Correctness of Representations. The Company
represents  that  the  foregoing  representations  and  warranties  are true and
correct as of the date hereof in all material respects,  and, unless the Company


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<PAGE>

otherwise  notifies the Subscribers prior to the Closing Date, shall be true and
correct in all material respects as of the Closing Date.

                           (x) Survival. The foregoing representations and
warranties shall survive the Closing Date for a period of two years.

                  6. Regulation D Offering. The offer and issuance of the
Securities to the Subscribers is being made pursuant to the exemption from the
registration provisions of the 1933 Act afforded by Section 4(2) or Section 4(6)
of the 1933 Act and/or Rule 506 of Regulation D promulgated thereunder. On the
Closing Date, the Company will provide an opinion reasonably acceptable to
Subscriber from the Company's legal counsel opining on the availability of an
exemption from registration under the 1933 Act as it relates to the offer and
issuance of the Securities and other matters reasonably requested by
Subscribers. A form of the legal opinion is annexed hereto as EXHIBIT E. The
Company will provide, at the Company's expense, such other legal opinions in the
future as are reasonably necessary for the resale of the Common Stock and
exercise of the Warrants and resale of the Warrant Shares.

                  7. Legal Fees. The Company shall pay to Grushko & Mittman,
P.C., a fee of $17,500 ("Legal Fees") (of which $7,500 has been paid) as
reimbursement for services rendered to the Subscribers in connection with this
Agreement and the purchase and sale of the Shares and Warrants (the "Offering")
and acting as Escrow Agent for the Offering. The Legal Fees will be payable on
the Closing Date out of funds held pursuant to the Escrow Agreement.

                  8. Placement Agent/Finder.

                           (a) Placement Agent's Fee. The Company on the one
hand,  and each  Subscriber  (for  himself  only) on the  other  hand,  agree to
indemnify  the  other  against  and hold  the  other  harmless  from any and all
liabilities to any persons claiming brokerage commissions or finder's fees other
than J.P. Turner & Company, L.L.C. ("Placement Agent") and the Finder identified
below on account of services  purported  to have been  rendered on behalf of the
indemnifying  party  in  connection  with  this  Agreement  or the  transactions
contemplated  hereby and arising out of such  party's  actions.  Anything to the
contrary  in  this  Agreement  notwithstanding,  each  Subscriber  is  providing
indemnification only for such Subscriber's own actions and not for any action of
any other Subscriber.  Each Subscriber's  liability hereunder is several and not
joint.  The Company agrees that it will pay the Placement  Agent a cash finder's
fee of five  percent  (5%)  of the  Purchase  Price  ("Placement  Agent's  Fee")
directly  out of the funds held  pursuant to the Escrow  Agreement.  The Company
represents   that  there  are  no  other  parties   entitled  to  receive  fees,
commissions,  or similar  payments in  connection  with the Offering  except the
Placement Agent and Finder. The Placement Agent will also be paid by the Company
five  percent  (5%) of the cash  proceeds  received by the Company  from Warrant
exercise ("Warrant Exercise  Compensation").  The Warrant Exercise  Compensation
must be paid by the Company to the  Placement  Agent  within five (5) days after
each receipt by the Company of Warrant Exercise cash proceeds.

                           (b) Placement Agent's Warrants. On the Closing Date,
the Company will issue to the Placement  Agent Warrants  similar to and carrying
the same  rights as the  Warrants  issuable to the  Subscribers  except that the
exercise  price to purchase  one Warrant  Share shall be $0.63 and the  Warrants
shall be exercisable until five years after the Closing Date ("Placement Agent's
Closing  Warrants").  The Placement Agent will receive  fifteen  Placement Agent
Closing  Warrants for each one hundred (100) Shares issued to the Subscribers on
the Closing  Date.  The  Placement  Agent will also  receive  Warrants  from the
Company in connection  with exercise of A Warrants and B Warrants by Subscribers
or their assigns.  The Placement Agent will receive fifteen "Placement Agent's A
Warrants"  for each one hundred A Warrants  exercised by a Subscriber  on a cash
basis. The Placement Agent's A Warrants will be exercisable at $0.69 per Warrant


                                       8


<PAGE>

Share. The Placement Agent will receive fifteen  "Placement  Agent's B Warrants"
for each one hundred B Warrants  exercised by a Subscriber on a cash basis.  The
Placement Agent's B Warrants will be exercisable at $1.00 per Warrant Share. All
Placement  Agent's  Warrants  will be  exercisable  for  five  years  after  the
respective  issue  dates,  will not be subject to Call and may be exercised on a
cashless basis. A form of Placement Agent's Warrant is annexed hereto as EXHIBIT
E.  Warrant  Exercise  Compensation  will  not be  payable  in  connection  with
Placement  Agent's  Warrants.  The  Placement  Agent's A Warrants and  Placement
Agent's B Warrants must be delivered to the Placement Agent  simultaneously with
the Warrant Exercise Compensation payable in connection with the exercise of the
A Warrants  and B Warrants  giving  rise to the  obligation  to issue  Placement
Agent's A Warrants and Placement  Agent's B Warrants.  All the Warrants issuable
to the Placement Agent are referred to as "Placement Agent's Warrants".  All the
representations,   covenants,  warranties,  undertakings,  remedies,  liquidated
damages,  indemnification,  and  other  rights  including  but  not  limited  to
reservation  requirements and registration  rights made or granted to or for the
benefit of the  Subscribers  are hereby also made and  granted to the  Placement
Agent in respect of the Placement Agent's Warrants.

                           (c) Finder's Fee. The Company agrees that it will pay
AKW  Consultants  (the "Finder") a cash finder's fee of five percent (5%) of the
Purchase Price ("Placement Agent's Fee") directly out of the funds held pursuant
to the  Escrow  Agreement.  The  Finder  will also be paid by the  Company  five
percent (5%) of the cash proceeds  received by the Company from Warrant exercise
("Warrant  Exercise  Compensation").  The Warrant Exercise  Compensation must be
paid by the  Company  to the  Placement  Agent  within  five (5) days after each
receipt by the Company of Warrant Exercise cash proceeds.

                           (d) Finder's Warrants. On the Closing Date, the
Company  will issue to the Finder  Warrants  similar  to and  carrying  the same
rights as the  Warrants  issuable to the  Subscribers  except that the  exercise
price to purchase  one Warrant  Share shall be $0.63 and the  Warrants  shall be
exercisable  until  five  years  after  the  Closing  Date  ("Finder's   Closing
Warrants"). The Finder will receive in the aggregate,  Finder's Closing Warrants
representing  the  right to  purchase  one (1)  Warrant  Share for each ten (10)
Shares purchased on the Closing Date. The Finder will also receive Warrants from
the  Company  in  connection  with  exercise  of A Warrants  and B  Warrants  by
Subscribers or their  assigns.  The Finder will receive one "Finder's A Warrant"
for each ten (10) A Warrants  exercised  by a  Subscriber  on a cash basis.  The
Finder's A Warrants will be exercisable  at $0.69 per Warrant Share.  The Finder
will receive one "Finder's B Warrants" for each ten (10) B Warrants exercised by
a Subscriber  on a cash basis.  The Finder's B Warrants will be  exercisable  at
$1.00 per Warrant  Share.  All Finder's  Warrants will be  exercisable  for five
years after the respective issue dates,  will be subject to Call as described in
the form of Warrant  annexed hereto as EXHIBIT F. The Finder's  Warrants will be
exercisable on a cashless basis,  only in certain  instances as set forth in the
Finder's  Warrant,  commencing one year after their  respective  Issue Dates (as
defined in the Warrant).  Warrant Exercise  Compensation  will not be payable in
connection  with  Finder's  Warrants.  The  Finder's A Warrants  and  Finder's B
Warrants  must be  delivered  to the  Finder  simultaneously  with  the  Warrant
Exercise  Compensation payable in connection with the exercise of the A Warrants
and B Warrants  giving rise to the  obligation to issue  Finder's A Warrants and
Finder's B Warrants.  All the Warrants issuable to the Finder are referred to as
"Finder's   Warrants".   All   the   representations,   covenants,   warranties,
undertakings,  remedies, liquidated damages,  indemnification,  and other rights
including but not limited to reservation  requirements and  registration  rights
made or granted to or for the  benefit of the  Subscribers  are hereby also made
and granted to the Finder in respect of the Finder's Warrants.

                  9.       Covenants of the Company.  The Company covenants and
agrees with the Subscribers as follows:


                                       9


<PAGE>


                           (a) Stop Orders. The Company will advise the
Subscribers,  promptly after it receives  notice of issuance by the  Commission,
any state securities  commission or any other  regulatory  authority of any stop
order or of any order preventing or suspending any offering of any securities of
the Company,  or of the suspension of the  qualification  of the Common Stock of
the Company for offering or sale in any  jurisdiction,  or the initiation of any
proceeding for any such purpose.

                           (b) Listing. The Company shall promptly secure the
listing of the shares of Common Stock and the Warrant  Shares upon each national
securities exchange, or automated quotation system upon which they are or become
eligible for listing (subject to official notice of issuance) and shall maintain
such listing so long as any Warrants are outstanding.  The Company will maintain
the listing of its Common Stock on the American Stock Exchange,  Nasdaq SmallCap
Market,  Nasdaq  National  Market  System,  Bulletin  Board,  or New York  Stock
Exchange  (whichever  of the  foregoing  is at the  time the  principal  trading
exchange  or market for the Common  Stock (the  "Principal  Market")),  and will
comply  in  all  respects  with  the  Company's  reporting,   filing  and  other
obligations  under the bylaws or rules of the Principal  Market,  as applicable.
The  Company  will  provide  the  Subscribers  copies of all notices it receives
notifying the Company of the threatened and actual delisting of the Common Stock
from any  Principal  Market.  As of the date of this  Agreement  and the Closing
Date, the Bulletin Board is and will be the Principal Market.

                           (c) Market Regulations. The Company shall notify the
Commission, the Principal Market and applicable state authorities, in accordance
with their requirements, of the transactions contemplated by this Agreement, and
shall take all other  necessary  action and  proceedings  as may be required and
permitted  by  applicable  law,  rule and  regulation,  for the  legal and valid
issuance of the  Securities  to the  Subscribers  and  promptly  provide  copies
thereof to Subscriber.

                           (d) Reporting Requirements. From the date of this
Agreement  and until the sooner of (i) two (2) years after the Closing  Date, or
(ii) until all the Shares and Warrant  Shares have been resold or transferred by
all the Subscribers  pursuant to the Registration  Statement or pursuant to Rule
144, without regard to volume limitation,  the Company will (v) cause its Common
Stock to continue to be registered under Section 12(b) or 12(g) of the 1934 Act,
(x) comply in all respects with its reporting and filing  obligations  under the
1934 Act, (y) comply with all reporting  requirements  that are applicable to an
issuer with a class of shares  registered  pursuant to Section 12(b) or 12(g) of
the 1934 Act, as applicable, and (z) comply with all requirements related to any
registration  statement filed pursuant to this  Agreement.  The Company will use
its best  efforts  not to take any action or file any  document  (whether or not
permitted by the 1933 Act or the 1934 Act or the rules  thereunder) to terminate
or suspend such registration or to terminate or suspend its reporting and filing
obligations  under said acts until two (2) years after the Closing  Date.  Until
the  earlier of the resale of the Common  Stock and the  Warrant  Shares by each
Subscriber or at least two (2) years after the Warrants have been exercised, the
Company  will use its best  efforts to continue  the listing or quotation of the
Common Stock on the Principal Market or other market with the reasonable consent
of  Subscribers  holding a majority of the Shares and Warrant  Shares,  and will
comply  in  all  respects  with  the  Company's  reporting,   filing  and  other
obligations  under the  bylaws or rules of the  Principal  Market.  The  Company
agrees  to  file a Form D with  respect  to the  Securities  as  required  under
Regulation D and to provide a copy  thereof to each  Subscriber  promptly  after
such filing.

                           (e) Use of Proceeds. The Company undertakes to use
the  proceeds of the  Subscribers'  funds for the purposes set forth on SCHEDULE
9(E) hereto.  A deviation from the use of proceeds set forth on SCHEDULE 9(E) of
more  than 15% per  item or more  than 25% in the  aggregate  shall be  deemed a
material breach of the Company's obligations  hereunder.  The Purchase Price may
not and will not be used for accrued and unpaid  officer and director  salaries,
payment of financing related debt, redemption of outstanding redeemable notes or


                                       10


<PAGE>

equity instruments of the Company nor non-trade  obligations  outstanding on the
Closing Date.

                           (f) Reservation. The Company undertakes to reserve,
pro  rata on  behalf  of each  Subscriber  and  holder  of a  Warrant,  from its
authorized  but unissued  common  stock,  a number of common shares equal to the
amount of Warrant Shares issuable upon exercise of the Warrants. Failure to have
sufficient  shares  reserved  pursuant  to  this  Section  9(f)  for  three  (3)
consecutive  business days or ten (10) days in the aggregate shall be a material
default of the Company's obligations under this Agreement.

                           (g) Taxes. From the date of this Agreement and until
the sooner of (i) two (2) years  after the Closing  Date,  or (ii) until all the
Shares and Warrant Shares have been resold or transferred by all the Subscribers
pursuant to the  Registration  Statement or pursuant to Rule 144, without regard
to volume limitations,  the Company will promptly pay and discharge, or cause to
be paid and discharged,  when due and payable, all lawful taxes, assessments and
governmental  charges or levies  imposed upon the income,  profits,  property or
business  of the  Company;  provided,  however,  that any such tax,  assessment,
charge or levy  need not be paid if the  validity  thereof  shall  currently  be
contested in good faith by appropriate proceedings and if the Company shall have
set aside on its books  adequate  reserves with respect  thereto,  and provided,
further,  that the  Company  will pay all such  taxes,  assessments,  charges or
levies  forthwith  upon the  commencement  of  proceedings to foreclose any lien
which may have attached as security therefore.

                           (h) Insurance. From the date of this Agreement and
until the sooner of (i) two (2) years after the Closing  Date, or (ii) until all
the  Shares  and  Warrant  Shares  have been  resold or  transferred  by all the
Subscribers  pursuant  to the  Registration  Statement  or pursuant to Rule 144,
without regard to volume limitations, the Company will keep its assets which are
of an insurable  character insured by financially  sound and reputable  insurers
against loss or damage by fire,  explosion and other risks  customarily  insured
against by companies in the Company's line of business, in amounts sufficient to
prevent the Company from  becoming a  co-insurer  and not in any event less than
one hundred percent (100%) of the insurable value of the property  insured;  and
the Company  will  maintain,  with  financially  sound and  reputable  insurers,
insurance  against other hazards and risks and liability to persons and property
to the extent and in the manner  customary for  companies in similar  businesses
similarly situated and to the extent available on commercially reasonable terms.

                           (i) Books and Records. From the date of this
Agreement  and until the sooner of (i) two (2) years after the Closing  Date, or
(ii) until all the Shares and Warrant  Shares have been resold or transferred by
all the Subscribers  pursuant to the Registration  Statement or pursuant to Rule
144,  without regard to volume  limitations,  the Company will keep true records
and books of account in which full, true and correct entries will be made of all
dealings or  transactions  in relation to its business and affairs in accordance
with generally accepted accounting principles applied on a consistent basis.

                           (j) Governmental Authorities. From the date of this
Agreement  and until the sooner of (i) two (2) years after the Closing  Date, or
(ii) until all the Shares and Warrant  Shares have been resold or transferred by
all the Subscribers  pursuant to the Registration  Statement or pursuant to Rule
144,  without regard to volume  limitations,  the Company shall duly observe and
conform in all  material  respects  to all valid  requirements  of  governmental
authorities  relating to the conduct of its  business  or to its  properties  or
assets.

                           (k) Intellectual Property. From the date of this
Agreement  and until the sooner of (i) two (2) years after the Closing  Date, or
(ii) until all the Shares and Warrant  Shares have been resold or transferred by
all the Subscribers  pursuant to the Registration  Statement or pursuant to Rule
144,  without regard to volume  limitations,  the Company shall maintain in full


                                       11


<PAGE>

force and effect its corporate existence, rights and franchises and all licenses
and other  rights to use  intellectual  property  owned or  possessed  by it and
reasonably deemed to be necessary to the conduct of its business.

                           (l) Properties. From the date of this Agreement and
until the sooner of (i) two (2) years after the Closing  Date, or (ii) until all
the  Shares  and  Warrant  Shares  have been  resold or  transferred  by all the
Subscribers  pursuant  to the  Registration  Statement  or pursuant to Rule 144,
without  regard to volume  limitation,  the Company will keep its  properties in
good repair, working order and condition, reasonable wear and tear excepted, and
from time to time make all necessary and proper repairs, renewals, replacements,
additions  and  improvements  thereto;  and the Company will at all times comply
with  each  provision  of all  leases  to which it is a party or under  which it
occupies  property if the breach of such provision could  reasonably be expected
to have a material adverse effect.

                           (m) Confidentiality/Public Announcement. From the
date of this  Agreement  and  until the  sooner  of (i) two (2) years  after the
Closing Date,  or (ii) until all the Shares and Warrant  Shares have been resold
or transferred by all the Subscribers pursuant to the Registration  Statement or
pursuant to Rule 144,  without  regard to volume  limitations,  except as may be
required in  connection  with a  registration  statement  filed on behalf of the
Subscribers pursuant to Section 11 of this Agreement, the Company agrees that it
will not disclose  publicly or privately the identity of the Subscribers  unless
expressly agreed to in writing by a Subscriber or only to the extent required by
law and then only upon ten days  prior  notice to  Subscriber.  In any event and
subject to the  foregoing,  the Company  undertakes to file a form 8-K or make a
public announcement describing the Offering not later than the first trading day
following the Closing Date. In the form 8-K or public announcement,  the Company
will specifically  disclose the amount of common stock  outstanding  immediately
after the Closing and any required names of the Subscribers.

                           (n) Further Registration Statements. Except for a
registration statement filed on behalf of the Subscribers pursuant to Section 11
of this  Agreement,  the  Company  will not file  any  registration  statements,
including  but not  limited  to Form  S-8,  with the  Commission  or with  state
regulatory  authorities  without the consent of the Subscriber  from the date of
this  Agreement  until  ninety  (90)  days  after  the  effective  date  of  the
registration  statement  described in Section 11.1(iv) ("Actual Effective Date")
and during which ninety (90) days such  Registration  Statement  shall have been
current and available for use in connection with the unrestricted  public resale
of the Shares and Warrant Shares ("Blackout Period").

                           (o) Blackout. The Company undertakes and covenants
that  until the first to occur of (i) the end of the  Blackout  Period,  or (ii)
until all the  Shares and  Warrant  Shares  have been  resold  pursuant  to such
registration statement, the Company will not enter into any acquisition, merger,
exchange or sale or other transaction that could have the effect of delaying the
effectiveness  of any  pending  registration  statement  or  causing  an already
effective  registration  statement to no longer be effective or current,  except
for the transactions described on SCHEDULE 9(O) hereto.

         10. Covenants of the Company and Subscriber Regarding Indemnification.

                           (a) The Company agrees to indemnify, hold harmless,
reimburse and defend the  Subscribers,  the  Subscribers'  officers,  directors,
agents,  affiliates,  control persons, and principal  shareholders,  against any
claim,  cost,  expense,   liability,   obligation,  loss  or  damage  (including
reasonable legal fees) of any nature, incurred by or imposed upon the Subscriber
or any  such  person  which  results,  arises  out of or is  based  upon (i) any
material  misrepresentation  by Company or breach of any  warranty by Company in
this  Agreement  or in any  Exhibits  or  Schedules  attached  hereto,  or other
agreement  delivered pursuant hereto; or (ii) after any applicable notice and/or


                                       12


<PAGE>

cure  periods,  any  breach or  default  in  performance  by the  Company of any
covenant or undertaking to be performed by the Company  hereunder,  or any other
agreement entered into by the Company and Subscriber relating hereto.

                           (b) Each Subscriber agrees to indemnify, hold
harmless,  reimburse and defend the Company and each of the Company's  officers,
directors, agents, affiliates, control persons against any claim, cost, expense,
liability,  obligation,  loss or damage (including reasonable legal fees) of any
nature,  incurred  by or  imposed  upon the  Company  or any such  person  which
results,  arises out of or is based upon (i) any material  misrepresentation  by
such  Subscriber  in this  Agreement or in any  Exhibits or  Schedules  attached
hereto,  or  other  agreement  delivered  pursuant  hereto;  or (ii)  after  any
applicable  notice and/or cure periods,  any breach or default in performance by
such  Subscriber  of  any  covenant  or  undertaking  to be  performed  by  such
Subscriber  hereunder,  or any other  agreement  entered into by the Company and
Subscribes relating hereto.

                           (c) In no event shall the liability of any Subscriber
or  permitted  successor  hereunder  or under any other  agreement  delivered in
connection  herewith  be  greater in amount  than the  dollar  amount of the net
proceeds  actually  received  by such  Subscriber  upon the sale of  Registrable
Securities (as defined herein).

                           (d) The procedures set forth in Section 11.6 shall
apply to the indemnifications set forth in Sections 10(a) and 10(b) above.

                  11.1. Registration Rights. The Company hereby grants the
following registration rights to holders of the Securities.

                           (i) On one occasion, for a period commencing
ninety-one  (91) days after the Closing  Date,  but not later than two (2) years
after the Closing Date ("Request  Date"),  upon a written request  therefor from
any record  holder or holders of more than 50% of the Shares and Warrant  Shares
actually  issued upon  exercise of the  Warrants,  the Company shall prepare and
file with the Commission a registration statement under the 1933 Act registering
the Shares and Warrant Shares including Warrant Shares issuable upon exercise of
the Placement Agent's Warrants and Finder's Warrants (collectively  "Registrable
Securities")  which are the  subject of such  request  for  unrestricted  public
resale by the holder  thereof.  For purposes of Sections  11.1(i) and  11.1(ii),
Registrable  Securities  shall not include  Securities  which are registered for
resale in an effective  registration statement or included for registration in a
pending  registration  statement,  or which  have been  issued  without  further
transfer  restrictions  after a sale or transfer  pursuant to Rule 144 under the
1933 Act.  Upon the receipt of such  request,  the Company  shall  promptly give
written notice to all other record holders of the  Registrable  Securities  that
such  registration   statement  is  to  be  filed  and  shall  include  in  such
registration  statement Registrable Securities for which it has received written
requests within ten (10) days after the Company gives such written notice.  Such
other  requesting  record holders shall be deemed to have exercised their demand
registration right under this Section 11.1(i).

                           (ii) If the Company at any time proposes to register
any of its securities under the 1933 Act for sale to the public, whether for its
own account or for the account of other  security  holders or both,  except with
respect  to  registration  statements  on Forms  S-4,  S-8 or  another  form not
available for  registering  the  Registrable  Securities for sale to the public,
provided the Registrable  Securities are not otherwise  registered for resale by
the Subscribers or Holder pursuant to an effective registration statement,  each
such time it will give at least fifteen (15) days' prior  written  notice to the
record holder of the Registrable  Securities of its intention so to do. Upon the
written  request of the holder,  received  by the  Company  within ten (10) days
after the  giving of any such  notice by the  Company,  to  register  any of the


                                       13


<PAGE>

Registrable  Securities not previously  registered,  the Company will cause such
Registrable  Securities as to which registration shall have been so requested to
be included  with the  securities  to be covered by the  registration  statement
proposed to be filed by the  Company,  all to the extent  required to permit the
sale or other  disposition  of the  Registrable  Securities so registered by the
holder of such Registrable Securities (the "Seller" or "Sellers").  In the event
that any registration pursuant to this Section 11.1(ii) shall be, in whole or in
part, an underwritten public offering of common stock of the Company, the number
of shares of Registrable  Securities to be included in such an underwriting  may
be reduced by the managing underwriter if and to the extent that the Company and
the  underwriter  shall  reasonably be of the opinion that such inclusion  would
adversely  affect the  marketing  of the  securities  to be sold by the  Company
therein; provided,  however, that the Company shall notify the Seller in writing
of any such reduction. Notwithstanding the foregoing provisions, or Section 11.4
hereof,  the Company may withdraw or delay or suffer a delay of any registration
statement  referred to in this Section  11.1(ii)  without thereby  incurring any
liability to the Seller.

                           (iii) If, at the time any written request for
registration is received by the Company pursuant to Section 11.1(i), the Company
has  determined  to  proceed  with  the  actual  preparation  and  filing  of  a
registration  statement under the 1933 Act in connection with the proposed offer
and sale for cash of any of its securities for the Company's own account and the
Company  actually  does file such other  registration  statement,  such  written
request shall be deemed to have been given pursuant to Section  11.1(ii)  rather
than Section  11.1(i),  and the rights of the holders of Registrable  Securities
covered by such written request shall be governed by Section 11.1(ii).

                           (iv) The Company shall file with the Commission not
later than thirty  (30) days after the Closing  Date (the  "Filing  Date"),  and
cause to be declared  effective  within the sooner of (i) ninety (90) days after
the actual filing date of the  registration  statement,  or (ii) one hundred and
twenty (120) days after the Closing  Date (the  "Effective  Date"),  a Form SB-2
registration  statement (the "Registration  Statement") (or such other form that
it is eligible  to use) in order to  register  the  Registrable  Securities  for
resale and  distribution  under the 1933 Act. The Company will register not less
than a number  of  shares of  common  stock in the  aforedescribed  registration
statement  that is  equal  to all of the  Shares  and  Warrant  Shares  issuable
pursuant to this Agreement. The Registrable Securities shall be reserved and set
aside  exclusively for the benefit of each  Subscriber and Warrant  holder,  pro
rata,  and not  issued,  employed or  reserved  for anyone  other than each such
Subscriber and Warrant holder.  The  Registration  Statement will immediately be
amended or additional  registration  statements will be immediately filed by the
Company as necessary to register  additional shares of Common Stock to allow the
public  resale of all Common  Stock  included  in and  issuable by virtue of the
Registrable  Securities.  Without  the  written  consent of the  Subscriber,  no
securities of the Company other than the Registrable Securities will be included
in the Registration Statement except as disclosed on SCHEDULE 11.1.

                  11.2. Registration Procedures. If and whenever the Company is
required by the provisions of Section 11.1(i), 11.1(ii), or (iv) to effect the
registration of any Registrable Securities under the 1933 Act, the Company will,
as expeditiously as possible:

                           (a) subject to the timelines provided in this
Agreement,  prepare  and  file  with the  Commission  a  registration  statement
required by Section 11, with respect to such securities and use its best efforts
to cause such  registration  statement  to become and remain  effective  for the
period of the distribution contemplated thereby (determined as herein provided),
and  promptly  provide to the holders of  Registrable  Securities  copies of all
filings and Commission  letters of comment including a notification by confirmed
telecopier of the declaration of  effectiveness  of any  Registration  Statement
within twenty-four (24) hours of such effectiveness;


                                       14


<PAGE>


                           (b) prepare and file with the Commission such
amendments  and  supplements to such  registration  statement and the prospectus
used in  connection  therewith  as may be  necessary  to keep such  registration
statement  effective  until the earlier of (i) all the Shares and Warrant Shares
have  been  resold  pursuant  to  such  registration   statement  or  (ii)  such
registration  statement has been  effective  for a period of two (2) years,  and
comply with the  provisions of the 1933 Act with respect to the  disposition  of
all of the  Registrable  Securities  covered by such  registration  statement in
accordance with the Sellers' intended method of
disposition set forth in such registration statement for such period;

                           (c) furnish to the Sellers, at the Company's expense,
such number of copies of the registration  statement and the prospectus included
therein  (including each preliminary  prospectus) as such persons reasonably may
request in order to  facilitate  the  public  sale or their  disposition  of the
securities covered by such registration statement;

                           (d) use its best efforts to register or qualify the
Sellers' Registrable Securities covered by such registration statement under the
securities or "blue sky" laws of such jurisdictions as the Sellers shall request
in writing,  provided,  however, that the Company shall not for any such purpose
be required to qualify generally to transact  business as a foreign  corporation
in any  jurisdiction  where it is not so  qualified  or to  consent  to  general
service of process in any such jurisdiction;

                           (e) if applicable, list the Registrable Securities
covered by such registration statement with any securities exchange on which the
Common Stock of the Company is then listed;

                           (f) immediately notify the Sellers when a prospectus
relating  thereto  is  required  to be  delivered  under  the 1933  Act,  of the
happening  of any event of which the Company has  knowledge as a result of which
the  prospectus  contained in such  registration  statement,  as then in effect,
includes  an untrue  statement  of a material  fact or omits to state a material
fact required to be stated therein or necessary to make the  statements  therein
not misleading in light of the circumstances then existing; and

                           (g) provided same would not be in violation of the
provision of Regulation FD under the 1934 Act, make  available for inspection by
the Sellers, and any attorney,  accountant or other agent retained by the Seller
or underwriter,  all publicly  available,  non-confidential  financial and other
records,  pertinent corporate documents and properties of the Company, and cause
the  Company's  officers,   directors  and  employees  to  supply  all  publicly
available,  non-confidential  information  reasonably  requested  by the seller,
attorney, accountant or agent in connection with such registration statement.

                  11.3. Provision of Documents. In connection with each
registration described in this Section 11, each Seller will furnish to the
Company in writing such information and representation letters with respect to
itself and the proposed distribution by it as reasonably shall be necessary in
order to assure compliance with federal and applicable state securities laws.

                  11.4. Non-Registration Events. The Company and the Subscribers
agree that the Sellers will suffer damages if the Registration Statement is not
filed by the Filing Date and not declared effective by the Commission by the
Effective Date, and any registration statement required under Section 11.1(i) or
11.1(ii) is not filed within 60 days after written request and declared
effective by the Commission within 120 days after such request, and maintained
in the manner and within the time periods contemplated by Section 11 hereof, and
it would not be feasible to ascertain the extent of such damages with precision.
Accordingly, if (i) the Registration Statement is not filed on or before the
Filing Date or is not declared effective on or before the sooner of the
Effective Date, or within three (3) business days of receipt by the Company of a
written or oral communication from the Commission that the Registration
Statement will not be reviewed or that the Commission has no further comments,
(ii) if the registration statement described in Sections 11.1(i) or 11.1(ii) is


                                       15


<PAGE>

not filed within 60 days after such written request, or is not declared
effective within 120 days after such written request, or (iii) any registration
statement described in Sections 11.1(i), 11.1(ii) or 11.1(iv) is filed and
declared effective but shall thereafter cease to be effective (without being
succeeded within ten (10) business days by an effective replacement or amended
registration statement) for a period of time which shall exceed 30 days in the
aggregate per year (defined as a period of 365 days commencing on the date the
Registration Statement is declared effective) or more than 20 consecutive days
(each such event referred to in clauses (i), (ii) and (iii) of this Section 11.4
is referred to herein as a "Non-Registration Event"), then the Company shall
deliver to the holder of Registrable Securities, as Liquidated Damages, an
amount equal to two percent (2%) for each thirty days or part thereof of the
Purchase Price of the Shares and actually paid "Purchase Price" (as defined in
the Warrants) of Warrant Shares issued or issuable upon actual exercise of the
Warrants, for the Registrable Securities owned of record by such holder as of
and during the pendency of such Non-Registration Event which are subject to such
Non-Registration Event. Liquidated Damages payable in connection with an
Effective Date related Non-Registration Event will be waived if the Actual
Effective Date occurs within thirty (30) days after the Effective Date. Provided
the Company has used reasonable good faith efforts in connection with obtaining
the effectiveness of the Registration Statement described in Section 11.1(iv),
then the Liquidated Damages relating to an Effective Date Non-Registration Event
shall accrue at the rate of one and one-half percent (1.5%) for the first sixty
days of the pendency of such Non-Registration Event. The Company must pay the
Liquidated Damages in cash within ten (10) days after the end of each thirty
(30) day period or shorter part thereof for which Liquidated Damages are
payable. In the event a Registration Statement is filed by the Filing Date but
is withdrawn prior to being declared effective by the Commission, then such
Registration Statement will be deemed to have not been filed. The Subscribers do
not waive any Liquidated Damages which may accrue due to the transactions
described on SCHEDULE 9(O) hereto.

                  11.5. Expenses. All expenses incurred by the Company in
complying with Section 11, including, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees and expenses (including
reasonable counsel fees) incurred in connection with complying with state
securities or "blue sky" laws, fees of the National Association of Securities
Dealers, Inc., transfer taxes, fees of transfer agents and registrars, costs of
insurance and fee of one counsel for all Sellers (in an amount not to exceed
$5,000) are called "Registration Expenses." All underwriting discounts and
selling commissions applicable to the sale of Registrable Securities, including
any fees and disbursements of any additional counsel to the Seller, are called
"Selling Expenses." The Company will pay all Registration Expenses in connection
with the registration statement under Section 11. Selling Expenses in connection
with each registration statement under Section 11 shall be borne by the Seller
and may be apportioned among the Sellers in proportion to the number of shares
sold by the Seller relative to the number of shares sold under such registration
statement or as all Sellers thereunder may agree.

                  11.6. Indemnification and Contribution.

                           (a) In the event of a registration of any Registrable
Securities  under the 1933 Act pursuant to Section 11, the Company  will, to the
extent permitted by law, indemnify and hold harmless the Seller, each officer of
the Seller,  each director of the Seller,  each  underwriter of such Registrable
Securities thereunder and each other person, if any, who controls such Seller or
underwriter  within the meaning of the 1933 Act,  against  any  losses,  claims,
damages  or  liabilities,  joint  or  several,  to  which  the  Seller,  or such
underwriter  or  controlling  person  may become  subject  under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect  thereof) arise out of or are based upon any untrue statement or alleged
untrue  statement of any material fact contained in any  registration  statement
under  which  such  Registrable  Securities  was  registered  under the 1933 Act
pursuant to Section 11, any preliminary prospectus or final prospectus contained
therein,  or any amendment or supplement  thereof,  or arise out of or are based


                                       16


<PAGE>

upon 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
in light of the  circumstances  when made, and will subject to the provisions of
Section  11.6(c)  reimburse  the  Seller,  each such  underwriter  and each such
controlling person for any legal or other expenses  reasonably  incurred by them
in connection  with  investigating  or defending any such loss,  claim,  damage,
liability or action; provided,  however, that the Company shall not be liable to
the Seller to the extent that any such damages arise out of or are based upon an
untrue  statement  or omission  made in any  preliminary  prospectus  if (i) the
Seller failed to send or deliver a copy of the final prospectus delivered by the
Company to the Seller with or prior to the delivery of written  confirmation  of
the sale by the Seller to the person asserting the claim from which such damages
arise,  (ii) the final  prospectus would have corrected such untrue statement or
alleged untrue statement or such omission or alleged  omission,  or (iii) to the
extent that any such loss, claim,  damage or liability arises out of or is based
upon an untrue  statement  or alleged  untrue  statement  or omission or alleged
omission so made in conformity with information furnished by any such Seller, or
any such controlling person in writing specifically for use in such registration
statement or prospectus.

                           (b) In the event of a registration of any of the
Registrable  Securities  under the 1933 Act  pursuant to Section 11, each Seller
severally but not jointly will,  to the extent  permitted by law,  indemnify and
hold  harmless  the Company,  and each person,  if any, who controls the Company
within the  meaning of the 1933 Act,  each  officer of the Company who signs the
registration statement,  each director of the Company, each underwriter and each
person who controls any underwriter  within the meaning of the 1933 Act, against
all losses,  claims,  damages or  liabilities,  joint or  several,  to which the
Company or such officer, director,  underwriter or controlling person may become
subject under the 1933 Act or otherwise, insofar as such losses, claims, damages
or  liabilities  (or actions in respect  thereof) arise out of or are based upon
any untrue  statement or alleged untrue statement of any material fact contained
in the  registration  statement  under which such  Registrable  Securities  were
registered under the 1933 Act pursuant to Section 11, any preliminary prospectus
or final prospectus  contained therein,  or any amendment or supplement thereof,
or arise out of or are based  upon 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 will reimburse the Company and each such
officer,  director,  underwriter and  controlling  person for any legal or other
expenses  reasonably  incurred  by  them in  connection  with  investigating  or
defending any such loss, claim, damage, liability or action, provided,  however,
that the  Seller  will be liable  hereunder  in any such case if and only to the
extent that any such loss, claim,  damage or liability arises out of or is based
upon an untrue  statement  or alleged  untrue  statement  or omission or alleged
omission made in reliance upon and in conformity with information  pertaining to
such  Seller,  as such,  furnished  in  writing to the  Company  by such  Seller
specifically for use in such registration statement or prospectus, and provided,
further, however, that the liability of the Seller hereunder shall be limited to
the net proceeds  actually  received by the Seller from the sale of  Registrable
Securities covered by such registration statement.

                           (c) Promptly after receipt by an indemnified party
hereunder of notice of the commencement of any action,  such  indemnified  party
shall,  if a claim in respect  thereof is to be made  against  the  indemnifying
party  hereunder,  notify the  indemnifying  party in writing  thereof,  but the
omission  so to notify  the  indemnifying  party  shall not  relieve it from any
liability  which it may have to such  indemnified  party  other  than under this
Section  11.6(c) and shall only relieve it from any liability  which it may have
to such indemnified party under this Section 11.6(c),  except and only if and to
the extent the  indemnifying  party is prejudiced by such omission.  In case any
such action shall be brought against any  indemnified  party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to  participate  in and, to the extent it shall wish,  to assume and
undertake  the defense  thereof with counsel  satisfactory  to such  indemnified
party,  and, after notice from the indemnifying  party to such indemnified party
of its election so to assume and undertake the defense thereof, the indemnifying
party shall not be liable to such  indemnified  party under this Section 11.6(c)
for any  legal  expenses  subsequently  incurred  by such  indemnified  party in


                                       17


<PAGE>

connection with the defense thereof other than reasonable costs of investigation
and of liaison  with  counsel  so  selected,  provided,  however,  that,  if the
defendants  in any such  action  include  both  the  indemnified  party  and the
indemnifying  party and the indemnified  party shall have  reasonably  concluded
that there may be reasonable  defenses  available to it which are different from
or additional to those available to the  indemnifying  party or if the interests
of the indemnified party reasonably may be deemed to conflict with the interests
of the indemnifying  party, the indemnified  parties, as a group, shall have the
right to select one  separate  counsel  and to assume  such legal  defenses  and
otherwise  to  participate  in the defense of such action,  with the  reasonable
expenses and fees of such separate  counsel and other  expenses  related to such
participation to be reimbursed by the indemnifying party as incurred.

                           (d) In order to provide for just and equitable
contribution  in the event of joint  liability under the 1933 Act in any case in
which either (i) a Seller, or any controlling person of a Seller,  makes a claim
for  indemnification  pursuant  to  this  Section  11.6  but  it  is  judicially
determined  (by the entry of a final  judgment or decree by a court of competent
jurisdiction  and the  expiration  of time to appeal  or the  denial of the last
right of appeal)  that such  indemnification  may not be  enforced  in such case
notwithstanding  the fact that this Section 11.6 provides for indemnification in
such case, or (ii)  contribution  under the 1933 Act may be required on the part
of the Seller or  controlling  person of the Seller in  circumstances  for which
indemnification  is not provided under this Section 11.6; then, and in each such
case,  the Company  and the Seller  will  contribute  to the  aggregate  losses,
claims,  damages or liabilities to which they may be subject (after contribution
from others) in such  proportion so that the Seller is responsible  only for the
portion  represented  by the  percentage  that the public  offering price of its
securities  offered by the  registration  statement bears to the public offering
price  of all  securities  offered  by such  registration  statement,  provided,
however,  that,  in any  such  case,  (y) the  Seller  will not be  required  to
contribute  any  amount  in  excess  of the  public  offering  price of all such
securities  offered by it pursuant to such  registration  statement;  and (z) no
person or entity guilty of fraudulent  misrepresentation  (within the meaning of
Section 10(f) of the 1933 Act) will be entitled to contribution  from any person
or entity who was not guilty of such fraudulent misrepresentation.

                  11.7. Delivery of Unlegended Shares.

                           (a) Within five (5) business days (such fifth
business day, the  "Unlegended  Shares Delivery Date") after the business day on
which the Company has received  (i) a notice that  Registrable  Securities  have
been sold either  pursuant to the  Registration  Statement or Rule 144 under the
1933 Act, (ii) a representation  that the prospectus delivery  requirements,  or
the requirements of Rule 144, as applicable,  have been satisfied, and (iii) the
original share  certificates  representing  the shares of Common Stock that have
been sold, and (iv) in the case of sales under Rule 144 customary representation
letters of the Subscriber and/or Subscriber's  broker regarding  compliance with
the requirements of Rule 144, the Company at its expense, (y) shall deliver, and
shall cause legal  counsel  selected by the Company to deliver,  to its transfer
agent (with copies to Subscriber) an appropriate instruction and opinion of such
counsel,  directing  the delivery of shares of Common Stock  without any legends
including  the  legends  set forth in  Sections  4(e) and 4(f)  above,  issuable
pursuant  to any  effective  and current  Registration  Statement  described  in
Section 11 of this  Agreement  or  pursuant  to Rule 144 under the 1933 Act (the
"Unlegended  Shares");  and  (z)  cause  the  transmission  of the  certificates
representing  the  Unlegended  Shares  together  with  a  legended   certificate
representing  the balance of the unsold shares of Common  Stock,  if any, to the
Subscriber at the address  specified in the notice of sale, via express courier,
by electronic  transfer or otherwise on or before the Unlegended Shares Delivery
Date. Transfer fees shall be the responsibility of the Seller.


                                       18


<PAGE>


                           (b) In lieu of delivering physical certificates
representing  the  Unlegended   Shares,  if  the  Company's  transfer  agent  is
participating in the Depository Trust Company ("DTC") Fast Automated  Securities
Transfer  program,  upon request of a  Subscriber,  so long as the  certificates
therefor do not bear a legend and the Subscriber is not obligated to return such
certificate for the placement of a legend  thereon,  the Company shall cause its
transfer agent to electronically transmit the Unlegended Shares by crediting the
account of  Subscriber's  prime  Broker with DTC through its Deposit  Withdrawal
Agent Commission system.  Such delivery must be made on or before the Unlegended
Shares Delivery Date.

                           (c) The Company understands that a delay in the
delivery  of the  Unlegended  Shares  pursuant  to Section 11 hereof  beyond the
Unlegended  Shares  Delivery Date could result in economic loss to a Subscriber.
As  compensation  to a Subscriber  for such loss, the Company agrees to pay late
payment fees (as liquidated  damages and not as a penalty) to the Subscriber for
late delivery of Unlegended  Shares in the amount of $100 per business day after
the Delivery Date for each $10,000 of purchase  price of the  Unlegended  Shares
subject to the delivery default. If during any 360 day period, the Company fails
to deliver  Unlegended  Shares as required by this Section 11.7 for an aggregate
of thirty (30) days, then each Subscriber or assignee holding Securities subject
to such default  may, at its option,  require the Company to purchase all or any
portion of the Shares and Warrant  Shares subject to such default at a price per
share  equal to 130% of the  Purchase  Price of such  Common  Stock and  Warrant
Shares.  The  Company  shall pay any  payments  incurred  under this  Section in
immediately available funds upon demand.

                           (d) In addition to any other rights available to a
Subscriber, if the Company fails to deliver to a Subscriber Unlegended Shares as
required  pursuant to this  Agreement,  within ten (10)  calendar days after the
Unlegended Shares Delivery Date and the Subscriber  purchases (in an open market
transaction or otherwise) shares of common stock to deliver in satisfaction of a
sale by such  Subscriber  of the  shares of Common  Stock  which the  Subscriber
anticipated receiving from the Company (a "Buy-In"),  then the Company shall pay
in cash to the Subscriber  (in addition to any remedies  available to or elected
by the Subscriber) the amount by which (A) the Subscriber's total purchase price
(including  brokerage  commissions,  if any) for the  shares of common  stock so
purchased exceeds (B) the aggregate purchase price of the shares of Common Stock
delivered to the Company for  reissuance  as  Unlegended  Shares,  together with
interest thereon at a rate of 15% per annum,  accruing until such amount and any
accrued  interest  thereon  is paid  in  full  (which  amount  shall  be paid as
liquidated damages and not as a penalty). For example, if a Subscriber purchases
shares of Common  Stock  having a total  purchase  price of  $11,000  to cover a
Buy-In  with  respect  to $10,000 of  purchase  price of shares of Common  Stock
delivered to the Company for reissuance as Unlegended  Shares, the Company shall
be required to pay the Subscriber  $1,000,  plus interest.  The Subscriber shall
provide  the  Company  written  notice  indicating  the  amounts  payable to the
Subscriber in respect of the Buy-In.

                           (e) In the event a Subscriber shall request delivery
of Unlegended Shares as described in Section 11.7(a), the Company may not refuse
to deliver  Unlegended Shares based on any claim that such Subscriber or any one
associated or affiliated  with such Subscriber has been engaged in any violation
of law, or for any other reason,  unless, an injunction or temporary restraining
order from a court,  on notice,  restraining  and or enjoining  delivery of such
Unlegended  Shares or  exercise of all or part of said  Warrant  shall have been
sought and  obtained and the Company has posted a surety bond for the benefit of
such  Subscriber in the amount of 130% of the amount of the  aggregate  purchase
price of the Common Stock and Warrant Shares which are subject to the injunction
or  temporary  restraining  order,  which bond shall  remain in effect until the
completion  of  arbitration/litigation  of the dispute and the proceeds of which
shall be payable to such Subscriber to the extent Subscriber obtains judgment in
Subscriber's favor.


                                       19


<PAGE>


                  12. (a) Right of First Refusal. From the date of this
Agreement until one hundred and fifty (150) days after the Actual Effective Date
during which the Registration Statement has been continuously available for use
by the Subscribers in connection with the resale of Common Stock ("Exclusion
Period"), the Subscribers shall be given not less than five (5) business days
prior written notice of any proposed sale by the Company of its common stock or
other equity securities or debt obligations, except in connection with (i)
employee or independent contractor stock options or compensation plans, (ii) as
full or partial consideration in connection with any merger, consolidation or
purchase of substantially all of the securities or assets of any corporation or
other entity, (iii) payment for goods, with such securities valued at not less
than the market price of the Common Stock on the date of delivery of such
securities, or (iv) as has been described in the Reports or Other Written
Information filed or delivered prior to the Closing Date (collectively "Excepted
Issuances"). The Subscribers who exercise their rights pursuant to this Section
12(a) shall have the right during the five (5) business days following receipt
of the notice to purchase all of such offered common stock, debt or other
securities in accordance with the terms and conditions set forth in the notice
of sale in the same proportion to each other as their purchase of Shares in the
Offering. In the event such terms and conditions are modified during the notice
period, the Subscribers shall be given prompt notice of such modification and
shall have the right during the original notice period or for a period of five
(5) business days following the notice of modification, whichever is longer, to
exercise such right.

                           (b) Favored Nations Provision. Except for the
Excepted Issuances, if at any time during the Exclusion Period the Company shall
offer,  issue or agree to issue any common stock or securities  convertible into
or exercisable  for shares of common stock (or modify any of the foregoing which
may be  outstanding  at any time  prior to the  Closing  Date) to any  person or
entity at a price per share or  conversion  or  exercise  price per share  which
shall be less than the Per Share  Purchase  Price,  without  the consent of each
Subscriber holding Shares, then the Company shall issue, for each such occasion,
additional  shares of Common  Stock to each  Subscriber  so that the average Per
Share  Purchase Price of the shares of Common Stock issued to the Subscriber (of
only the Common Stock or Warrant Shares still owned by the  Subscriber) is equal
to such other  lower price per share.  The  delivery  to the  Subscriber  of the
additional  shares of Common  Stock shall be not later than the closing  date of
the  transaction  giving rise to the requirement to issue  additional  shares of
Common Stock.  The Subscriber is granted the  registration  rights  described in
Section 11 hereof in relation to such  additional  shares of Common Stock except
that the Filing Date and Effective Date vis-a-vis such additional  common shares
shall be,  respectively,  the  sixtieth  (60th) and one  hundred  and  twentieth
(120th) date after the closing date giving rise to the  requirement to issue the
additional  shares of Common Stock.  For purposes of the issuance and adjustment
described  in this  paragraph,  the  issuance  of any  security  of the  Company
carrying  the right to convert such  security  into shares of Common Stock or of
any  warrant,  right or option to  purchase  Common  Stock  shall  result in the
issuance  of the  additional  shares of Common  Stock upon the  issuance of such
convertible  security,  warrant,  right or option and again upon any  subsequent
issuances of shares of Common Stock upon exercise of such conversion or purchase
rights if such  issuance  is at a price  lower than the then Per Share  Purchase
Price. The rights of the Subscriber set forth in this Section 12 are in addition
to any other rights the  Subscriber has pursuant to this Agreement and any other
agreement referred to or entered into in connection herewith.

                           (c) Maximum Exercise of Rights. In the event the
exercise of the rights described in Sections 12(a) and 12(b) would result in the
issuance  of an amount of common  stock of the  Company  that  would  exceed the
maximum  amount  that may be issued to a  Subscriber  calculated  in the  manner
described  in Section 10 of the Warrant,  then the  issuance of such  additional
shares of common  stock of the  Company to such  Subscriber  will be deferred in
whole or in part until such time as such Subscriber is able to beneficially  own
such common stock without  exceeding the maximum amount set forth  calculated in


                                       20


<PAGE>

the manner  described in Section 10 of the Warrant.  The  determination  of when
such common stock may be issued shall be made by each Subscriber as to only such
Subscriber.

                  13.      Miscellaneous.

                           (a) Notices. All notices, demands, requests,
consents,  approvals,  and other communications  required or permitted hereunder
shall  be in  writing  and,  unless  otherwise  specified  herein,  shall be (i)
personally served, (ii) deposited in the mail,  registered or certified,  return
receipt  requested,  postage  prepaid,  (iii) delivered by reputable air courier
service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or
facsimile,  addressed as set forth below or to such other  address as such party
shall  have  specified  most  recently  by written  notice.  Any notice or other
communication  required  or  permitted  to be given  hereunder  shall be  deemed
effective  (a) upon hand  delivery  or  delivery  by  facsimile,  with  accurate
confirmation  generated by the transmitting facsimile machine, at the address or
number  designated  below (if delivered on a business day during normal business
hours where such notice is to be received),  or the first business day following
such delivery (if delivered  other than on a business day during normal business
hours where such notice is to be  received)  or (b) on the second  business  day
following  the date of  mailing  by  express  courier  service,  fully  prepaid,
addressed to such address,  or upon actual  receipt of such  mailing,  whichever
shall first occur. The addresses for such communications shall be: (i) if to the
Company, to: International Card Establishment,  Inc., 300 Esplanade Drive, Suite
1950,  Oxnard,  CA 93036,  Attn:  William  Lopshire,  Chief  Executive  Officer,
telecopier:  (800)  236-2318,  with a copy by  telecopier  only  to:  Ronald  J.
Stauber,  Esq.,  1880  Century  Park East,  Suite 300,  Los  Angeles,  CA 90067,
telecopier:  (310)  556-3687,  (ii) if to the  Subscribers,  to: the one or more
addresses and telecopier  numbers indicated on the signature pages hereto,  with
an additional  copy by telecopier  only to:  Grushko & Mittman,  P.C., 551 Fifth
Avenue, Suite 1601, New York, New York 10176, telecopier number: (212) 697-3575,
(iii) if to the Placement Agent, to: J.P. Turner & Company, L.L.C., 17 Corporate
Plaza, Suite 200, Newport Beach, CA 92660, Attn: Michael Rose, telecopier: (949)
717-4839,  and (iv) if to the Finder,  to: AKW  Consultants,  48 Woodport  Road,
Sparta, NJ 07871, telecopier: (973) 726-6093.

                           (b) Closing. The consummation of the transactions
contemplated herein shall take place at the offices of Grushko & Mittman,  P.C.,
551 Fifth Avenue, Suite 1601, New York, New York 10176, upon the satisfaction of
all conditions to Closing set forth in this Agreement ("Closing Date").

                           (c) Entire Agreement; Assignment. This Agreement and
other documents  delivered in connection herewith represent the entire agreement
between the parties  hereto with respect to the subject matter hereof and may be
amended only by a writing executed by both parties.  Neither the Company nor the
Subscribers have relied on any  representations  not contained or referred to in
this Agreement and the documents delivered  herewith.  No right or obligation of
either  party shall be assigned by that party  without  prior  notice to and the
written consent of the other party.

                           (d) Counterparts/Execution. This Agreement may be
executed in any number of counterparts and by the different  signatories  hereto
on separate  counterparts,  each of which, when so executed,  shall be deemed an
original,  but all  such  counterparts  shall  constitute  but one and the  same
instrument.  This Agreement may be executed by facsimile signature and delivered
by facsimile transmission.

                           (e) Law Governing this Agreement. This Agreement
shall be governed by and construed in  accordance  with the laws of the State of
New York without  regard to principles of conflicts of laws.  Any action brought
by either party against the other  concerning the  transactions  contemplated by
this  Agreement  shall be brought only in the state courts of New York or in the
federal courts located in the state of New York. THE PARTIES AND THE INDIVIDUALS


                                       21


<PAGE>

EXECUTING THIS AGREEMENT AND OTHER AGREEMENTS REFERRED TO HEREIN OR DELIVERED IN
CONNECTION HEREWITH ON BEHALF OF THE COMPANY AGREE TO SUBMIT TO THE JURISDICTION
OF SUCH COURTS AND WAIVE TRIAL BY JURY. The  prevailing  party shall be entitled
to recover from the other party its reasonable attorney's fees and costs. In the
event that any provision of this Agreement or any other  agreement  delivered in
connection  herewith is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed  inoperative to the extent that
it may  conflict  therewith  and shall be deemed  modified to conform  with such
statute  or  rule of  law.  Any  such  provision  which  may  prove  invalid  or
unenforceable  under any law shall not affect the validity or  enforceability of
any other provision of any agreement.

                           (f) Specific Enforcement, Consent to Jurisdiction.
The Company and Subscriber  acknowledge and agree that irreparable  damage would
occur  in the  event  that  any of the  provisions  of this  Agreement  were not
performed in accordance with their specific terms or were otherwise breached. It
is  accordingly  agreed that the parties  shall be entitled to an  injunction or
injunctions  to prevent or cure breaches of the provisions of this Agreement and
to enforce  specifically the terms and provisions hereof, this being in addition
to any  other  remedy  to which any of them may be  entitled  by law or  equity.
Subject  to  Section  13(e)  hereof,  each of the  Company,  Subscriber  and any
signator hereto in his personal capacity hereby waives, and agrees not to assert
in any such suit,  action or  proceeding,  any claim  that it is not  personally
subject to the jurisdiction in New York of such court,  that the suit, action or
proceeding  is brought in an  inconvenient  forum or that the venue of the suit,
action or proceeding is improper.  Nothing in this Section shall affect or limit
any right to serve process in any other manner permitted by law.

                           (g) Independent Nature of Subscribers' Obligations
and Rights.  The  obligations of each  Subscriber  hereunder are several and not
joint  with the  obligations  of any  other  Subscriber  hereunder,  and no such
Subscriber  shall  be  responsible  in  any  way  for  the  performance  of  the
obligations of any other hereunder.

                           (h) Equitable Adjustment. The Securities and the
purchase prices of Securities  shall be equitably  adjusted to offset the effect
of stock  splits,  stock  dividends,  and  distributions  of  property or equity
interests of the Company to its shareholders.


                      [THIS SPACE INTENTIONALLY LEFT BLANK]


                                       22


<PAGE>





                    SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT


         Please acknowledge your acceptance of the foregoing Subscription
Agreement by signing and returning a copy to the undersigned whereupon it shall
become a binding agreement between us.

                                      INTERNATIONAL CARD
                                      ESTABLISHMENT, INC.
                                      a Delaware corporation



                                      By:_________________________________
                                               Name: William Lopshire
                                               Title: Chief Executive Officer

                                      Dated: May _____, 2004

<TABLE>
<CAPTION>


---------------------------------------------- --------------------- ----------------- ------------------- -------------------
SUBSCRIBER                                     PURCHASE PRICE        SHARES            A WARRANTS          B WARRANTS
---------------------------------------------- --------------------- ----------------- ------------------- -------------------
<S>                                            <C>                   <C>               <C>                <C>

------------------------------
Print Name of Subscriber



------------------------------
(Signature)

------------------------------
Print Name and Title

Address:----------------------

------------------------------
Fax: -------------------------

Tax ID (if any):--------------

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

</TABLE>


<PAGE>


                         LIST OF EXHIBITS AND SCHEDULES



         Exhibit A                  Form of A Warrant

         Exhibit B                  Form of B Warrant

         Exhibit C                  Escrow Agreement

         Exhibit D                  Form of Legal Opinion

         Exhibit E                  Form of Placement Agent's Warrant

         Exhibit F                  Form of Finder's Warrant

         Schedule 5(d)              Additional Issuances

         Schedule 5(q)              Undisclosed Liabilities

         Schedule 5(s)              Capitalization

         Schedule 8                 Finder

         Schedule 9(e)              Use of Proceeds

         Schedule 9(o)              Permitted Transactions

         Schedule 11.1              Other Securities to be Registered




</TEXT>
</DOCUMENT>
