EXHIBIT
      F

    


    SUBSIDIARY
      GUARANTEE

    


    SUBSIDIARY
      GUARANTEE, dated as of January __, 2008 (this “Guarantee”),
      made
      by each of the signatories hereto (together with any other entity that may
      become a party hereto as provided herein, the “Guarantors”),
      in
      favor of the purchasers signatory (together with their permitted assigns, the
      “Purchasers”)
      to
      that certain Securities Purchase Agreement, dated as of the date hereof, between
      Innovative Card Technologies, Inc., a Delaware corporation (the “Company”)
      and
      the Purchasers. 

     

    WITNESSETH:

    


    WHEREAS,
      pursuant to that certain Securities Purchase Agreement, dated as of the date
      hereof, by and between the Company and the Purchasers (the “Purchase
      Agreement”),
      the
      Company has agreed to sell and issue to the Purchasers, and the Purchasers
      have
      agreed to purchase from the Company the Company’s 8% Senior Secured Convertible
      Debentures, due January __,
      2011 (the
      “Debentures”),
      subject to the terms and conditions set forth therein; and

    


    WHEREAS,
      each Guarantor will directly benefit from the extension of credit to the Company
      represented by the issuance of the Debentures; and 

     

    NOW,
      THEREFORE, in consideration of the premises and to induce the Purchasers to
      enter into the Purchase Agreement and to carry out the transactions contemplated
      thereby, each Guarantor hereby agrees with the Purchasers as
      follows:

     

    1. Definitions.
      Unless
      otherwise defined herein, terms defined in the Purchase Agreement and used
      herein shall have the meanings given to them in the Purchase Agreement. The
      words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import
      when used in this Guarantee shall refer to this Guarantee as a whole and not
      to
      any particular provision of this Guarantee, and Section and Schedule references
      are to this Guarantee unless otherwise specified. The meanings given to terms
      defined herein shall be equally applicable to both the singular and plural
      forms
      of such terms. The following terms shall have the following
      meanings:

    


    “Guarantee”
means
      this Subsidiary Guarantee, as the same may be amended, supplemented or otherwise
      modified from time to time.

    


    “Obligations”
means,
      in addition to all other costs and expenses of collection incurred by Purchasers
      in enforcing any of such Obligations and/or this Guarantee, all
      of the liabilities
      and obligations (primary, secondary, direct, contingent, sole, joint or several)
      due or to become due, or that are now or may be hereafter contracted or
      acquired, or owing to, of the Company or any Guarantor to the Purchasers,
      including, without limitation, all
      obligations under this Agreement, the Debentures, this Guarantee and any other
      instruments, agreements or other documents executed and/or delivered in
      connection herewith or therewith, in each case, whether now or hereafter
      existing, voluntary or involuntary, direct or indirect, absolute or contingent,
      liquidated or unliquidated, whether or not jointly owed with others, and whether
      or not from time to time decreased or extinguished and later increased, created
      or incurred, and all or any portion of such obligations or liabilities that
      are
      paid, to the extent all or any part of such payment is avoided or recovered
      directly or indirectly from any of the Purchasers as a preference, fraudulent
      transfer or otherwise as such obligations may be amended, supplemented,
      converted, extended or modified from time to time. Without limiting the
      generality of the foregoing, the term “Obligations” shall include, without
      limitation: (i) principal of, and interest on the Debentures and the loans
      extended pursuant thereto; (ii) any and all other fees, indemnities, costs,
      obligations and liabilities of the Company or any Guarantor from time to time
      under or in connection with this Agreement, the Debentures, the Guarantee and
      any other instruments, agreements or other documents executed and/or delivered
      in connection herewith or therewith; and (iii) all amounts (including but not
      limited to post-petition interest) in respect of the foregoing that would be
      payable but for the fact that the obligations to pay such amounts are
      unenforceable or not allowable due to the existence of a bankruptcy,
      reorganization or similar proceeding involving the Company or any
      Guarantor. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2. Guarantee.

    


    (a) Guarantee.

     

    (i) The
      Guarantors hereby, jointly and severally, unconditionally and irrevocably,
      guarantee to the Purchasers and their respective successors, indorsees,
      transferees and assigns, the prompt and complete payment and performance when
      due (whether at the stated maturity, by acceleration or otherwise) of the
      Obligations. 

     

    (ii) Anything
      herein or in any other Transaction Document to the contrary notwithstanding,
      the
      maximum liability of each Guarantor hereunder and under the other Transaction
      Documents shall in no event exceed the amount which can be guaranteed by such
      Guarantor under applicable federal and state laws, including laws relating
      to
      the insolvency of debtors, fraudulent conveyance or transfer or laws affecting
      the rights of creditors generally (after giving effect to the right of
      contribution established in Section 2(b)). 

    


    (iii) Each
      Guarantor agrees that the Obligations may at any time and from time to time
      exceed the amount of the liability of such Guarantor hereunder without impairing
      the guarantee contained in this Section 2 or affecting the rights and remedies
      of the Purchasers hereunder.

     

    
      
         

      

      
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    (iv) The
      guarantee contained in this Section 2 shall remain in full force and effect
      until all the Obligations and the obligations of each Guarantor under the
      guarantee contained in this Section 2 shall have been satisfied by indefeasible
      payment in full. 

    


    (v) No
      payment made by the Company, any of the Guarantors, any other guarantor or
      any
      other Person or received or collected by the Purchasers from the Company, any
      of
      the Guarantors, any other guarantor or any other Person by virtue of any action
      or proceeding or any set-off or appropriation or application at any time or
      from
      time to time in reduction of or in payment of the Obligations shall be deemed
      to
      modify, reduce, release or otherwise affect the liability of any Guarantor
      hereunder which shall, notwithstanding any such payment (other than any payment
      made by such Guarantor in respect of the Obligations or any payment received
      or
      collected from such Guarantor in respect of the Obligations), remain liable
      for
      the Obligations up to the maximum liability of such Guarantor hereunder until
      the Obligations are indefeasibly paid in full.

    


    (vi) Notwithstanding
      anything to the contrary in this Agreement, with respect to any defaulted
      non-monetary Obligations the specific performance of which by the Guarantors
      is
      not reasonably possible (e.g. the issuance of the Company's Common Stock),
      the
      Guarantors shall only be liable for making the Purchasers whole on a monetary
      basis for the Company's failure to perform such Obligations in accordance with
      the Transaction Documents. 

    


    (b) Right
      of Contribution.
      Subject
      to Section 2(c), each Guarantor hereby agrees that to the extent that a
      Guarantor shall have paid more than its proportionate share of any payment
      made
      hereunder, such Guarantor shall be entitled to seek and receive contribution
      from and against any other Guarantor hereunder which has not paid its
      proportionate share of such payment. Each Guarantor's right of contribution
      shall be subject to the terms and conditions of Section 2(c). The provisions
      of
      this Section 2(b) shall in no respect limit the obligations and liabilities
      of
      any Guarantor to the Purchasers, and each Guarantor shall remain liable to
      the
      Purchasers for the full amount guaranteed by such Guarantor
      hereunder.

     

    (c) No
      Subrogation.
      Notwithstanding any payment made by any Guarantor hereunder or any set-off
      or
      application of funds of any Guarantor by the Purchasers, no Guarantor shall
      be
      entitled to be subrogated to any of the rights of the Purchasers against the
      Company or any other Guarantor or any collateral security or guarantee or right
      of offset held by the Purchasers for the payment of the Obligations, nor shall
      any Guarantor seek or be entitled to seek any contribution or reimbursement
      from
      the Company or any other Guarantor in respect of payments made by such Guarantor
      hereunder, until all amounts owing to the Purchasers by the Company on account
      of the Obligations are indefeasibly paid in full. If any amount shall be paid
      to
      any Guarantor on account of such subrogation rights at any time when all of
      the
      Obligations shall not have been paid in full, such amount shall be held by
      such
      Guarantor in trust for the Purchasers, segregated from other funds of such
      Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over
      to the Purchasers in the exact form received by such Guarantor (duly indorsed
      by
      such Guarantor to the Purchasers, if required), to be applied against the
      Obligations, whether matured or unmatured, in such order as the Purchasers
      may
      determine.

     

    
      
         

      

      
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    (d) Amendments,
      Etc. With Respect to the Obligations.
      Each
      Guarantor shall remain obligated hereunder notwithstanding that, without any
      reservation of rights against any Guarantor and without notice to or further
      assent by any Guarantor, any demand for payment of any of the Obligations made
      by the Purchasers may be rescinded by the Purchasers and any of the Obligations
      continued, and the Obligations, or the liability of any other Person upon or
      for
      any part thereof, or any collateral security or guarantee therefor or right
      of
      offset with respect thereto, may, from time to time, in whole or in part, be
      renewed, extended, amended, modified, accelerated, compromised, waived,
      surrendered or released by the Purchasers, and the Purchase Agreement and the
      other Transaction Documents and any other documents executed and delivered
      in
      connection therewith may be amended, modified, supplemented or terminated,
      in
      whole or in part, as the Purchasers may deem advisable from time to time, and
      any collateral security, guarantee or right of offset at any time held by the
      Purchasers for the payment of the Obligations may be sold, exchanged, waived,
      surrendered or released. The Purchasers shall have no obligation to protect,
      secure, perfect or insure any Lien at any time held by them as security for
      the
      Obligations or for the guarantee contained in this Section 2 or any property
      subject thereto. 

     

    (e) Guarantee
      Absolute and Unconditional.
      Each
      Guarantor waives any and all notice of the creation, renewal, extension or
      accrual of any of the Obligations and notice of or proof of reliance by the
      Purchasers upon the guarantee contained in this Section 2 or acceptance of
      the
      guarantee contained in this Section 2; the Obligations, and any of them, shall
      conclusively be deemed to have been created, contracted or incurred, or renewed,
      extended, amended or waived, in reliance upon the guarantee contained in this
      Section 2; and all dealings between the Company and any of the Guarantors,
      on
      the one hand, and the Purchasers, on the other hand, likewise shall be
      conclusively presumed to have been had or consummated in reliance upon the
      guarantee contained in this Section 2. Each Guarantor waives to the extent
      permitted by law diligence, presentment,
      protest, demand for payment and notice of default or nonpayment to or upon
      the
      Company or any of the Guarantors with respect to the Obligations. Each Guarantor
      understands and agrees that the guarantee contained in this Section 2 shall
      be
      construed as a continuing, absolute and unconditional guarantee of payment
      and
      performance without regard to (a) the validity or enforceability of the Purchase
      Agreement or any other Transaction Document, any of the Obligations or any
      other
      collateral security therefor or guarantee or right of offset with respect
      thereto at any time or from time to time held by the Purchasers, (b) any
      defense, set-off or counterclaim (other than a defense of payment or performance
      or fraud by Purchasers) which may at any time be available to or be asserted
      by
      the Company or any other Person against the Purchasers, or (c) any other
      circumstance whatsoever (with or without notice to or knowledge of the Company
      or such Guarantor) which constitutes, or might be construed to constitute,
      an
      equitable or legal discharge of the Company for the Obligations, or of such
      Guarantor under the guarantee contained in this Section 2, in bankruptcy or
      in
      any other instance. When making any demand hereunder or otherwise pursuing
      its
      rights and remedies hereunder against any Guarantor, the Purchasers may, but
      shall be under no obligation to, make a similar demand on or otherwise pursue
      such rights and remedies as they may have against the Company, any other
      Guarantor or any other Person or against any collateral security or guarantee
      for the Obligations or any right of offset with respect thereto, and any failure
      by the Purchasers to make any such demand, to pursue such other rights or
      remedies or to collect any payments from the Company, any other Guarantor or
      any
      other Person or to realize upon any such collateral security or guarantee or
      to
      exercise any such right of offset, or any release of the Company, any other
      Guarantor or any other Person or any such collateral security, guarantee or
      right of offset, shall not relieve any Guarantor of any obligation or liability
      hereunder, and shall not impair or affect the rights and remedies, whether
      express, implied or available as a matter of law, of the Purchasers against
      any
      Guarantor. For the purposes hereof, “demand” shall include the commencement and
      continuance of any legal proceedings.

     

    
      
         

      

      
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    (f) Reinstatement.
      The
      guarantee contained in this Section 2 shall continue to be effective, or be
      reinstated, as the case may be, if at any time payment, or any part thereof,
      of
      any of the Obligations is rescinded or must otherwise be restored or returned
      by
      the Purchasers upon the insolvency, bankruptcy, dissolution, liquidation or
      reorganization of the Company or any Guarantor, or upon or as a result of the
      appointment of a receiver, intervenor or conservator of, or trustee or similar
      officer for, the Company or any Guarantor or any substantial part of its
      property, or otherwise, all as though such payments had not been
      made.

    


    (g) Payments.
      Each
      Guarantor hereby guarantees that payments hereunder will be paid to the
      Purchasers without set-off or counterclaim in U.S. dollars at the address set
      forth or referred to in the Purchase Agreement.

    


    3. Representations
      and Warranties.
      Each
      Guarantor hereby makes the following representations and warranties to
      Purchasers as of the date hereof:

     

    (a) Organization
      and Qualification.
      The
      Guarantor is a corporation, duly incorporated, validly existing and in good
      standing under the laws of the applicable jurisdiction set forth on Schedule
      1,
      with the requisite corporate power and authority to own and use its properties
      and assets and to carry on its business as currently conducted. The Guarantor
      has no subsidiaries other than those identified as such on the Disclosure
      Schedules. The Guarantor is duly qualified to do business and is in good
      standing as a foreign corporation in each jurisdiction in which the nature
      of
      the business conducted or property owned by it makes such qualification
      necessary, except where the failure to be so qualified or in good standing,
      as
      the case may be, could not, individually or in the aggregate, (x) adversely
      affect the legality, validity or enforceability of any of this Guaranty in
      any
      material respect, (y) have a material adverse effect on the results of
      operations, assets, prospects, or financial condition of the Guarantor or (z)
      adversely impair in any material respect the Guarantor's ability to perform
      fully on a timely basis its obligations under this Guaranty (a “Material
      Adverse Effect”).

     

    
      
         

      

      
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    (b) Authorization;
      Enforcement.
      The
      Guarantor has the requisite corporate power and authority to enter into and
      to
      consummate the transactions contemplated by this Guaranty, and otherwise to
      carry out its obligations hereunder. The execution and delivery of this Guaranty
      by the Guarantor and the consummation by it of the transactions contemplated
      hereby have been duly authorized by all requisite corporate action on the part
      of the Guarantor. This Guaranty has been duly executed and delivered by the
      Guarantor and constitutes the valid and binding obligation of the Guarantor
      enforceable against the Guarantor in accordance with its terms, except as such
      enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium, liquidation or similar laws relating to, or
      affecting generally the enforcement of, creditors' rights and remedies or by
      other equitable principles of general application.

    


    (c) No
      Conflicts.
      The
      execution, delivery and performance of this Guaranty by the Guarantor and the
      consummation by the Guarantor of the transactions contemplated thereby do not
      and will not (i) conflict with or violate any provision of its Certificate
      of
      Incorporation or By-laws or (ii) conflict with, constitute a default (or an
      event which with notice or lapse of time or both would become a default) under,
      or give to others any rights of termination, amendment, acceleration or
      cancellation of, any agreement, indenture or instrument to which the Guarantor
      is a party, or (iii) result in a violation of any law, rule, regulation, order,
      judgment, injunction, decree or other restriction of any court or governmental
      authority to which the Guarantor is subject (including Federal and state
      securities laws and regulations), or by which any material property or asset
      of
      the Guarantor is bound or affected, except in the case of each of clauses (ii)
      and (iii), such conflicts, defaults, terminations, amendments, accelerations,
      cancellations and violations as could not, individually or in the aggregate,
      have or result in a Material Adverse Effect. The business of the Guarantor
      is
      not being conducted in violation of any law, ordinance or regulation of any
      governmental authority, except for violations which, individually or in the
      aggregate, do not have a Material Adverse Effect.

     

    
      
         

      

      
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    (d) Consents
      and Approvals.
      The
      Guarantor is not required to obtain any consent, waiver, authorization or order
      of, or make any filing or registration with, any court or other federal, state,
      local, foreign or other governmental authority or other person in connection
      with the execution, delivery and performance by the Guarantor of this
      Guaranty.

    


    (e) Purchase
      Agreement.
      The
      representations and warranties of the Company set forth in the Securities
      Purchase Agreement as they relate to such Guarantor, each of which is hereby
      incorporated herein by reference, are materially true and correct as of each
      time such representations are deemed to be made pursuant to such Purchase
      Agreement, and the Purchasers shall be entitled to rely on each of them as
      if
      they were fully set forth herein, provided that each reference in each such
      representation and warranty to the Company's knowledge shall, for the purposes
      of this Section 3, be deemed to be a reference to such Guarantor's knowledge.
      

    


    (f) Foreign
      Law.
      Each
      Guarantor has consulted with appropriate foreign legal counsel with respect
      to
      any of the above representations for which non-U.S. law is applicable. Such
      foreign counsel have advised each applicable Guarantor that such counsel knows
      of no reason why any of the above representations would not be true and
      accurate. Such foreign counsel were provided with copies of this Subsidiary
      Guarantee and the Transaction Documents prior to rendering their advice.


    


    4. Covenants.
      

    


    (a) Each
      Guarantor covenants and agrees with the Purchasers that, from and after the
      date
      of this Guarantee until the Obligations shall have been indefeasibly paid in
      full, such Guarantor shall take, and/or shall refrain from taking, as the case
      may be, each commercially reasonable action that is necessary to be taken or
      not
      taken, as the case may be, so that no Event of Default is caused by the failure
      to take such action or to refrain from taking such action by such Guarantor.
      

     

    (b) So
      long
      as any of the Obligations are outstanding, each Guarantor will not directly
      or
      indirectly on or after the date of this Guarantee without the written consent
      of
      60% in interest of the outstanding principal balance of the
      Debentures:

    


    i. enter
      into, create, incur, assume or suffer to exist any indebtedness for borrowed
      money of any kind, including but not limited to, a guarantee, on or with respect
      to any of its property or assets now owned or hereafter acquired or any interest
      therein or any income or profits therefrom;

     

    
      
         

      

      
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    ii. enter
      into, create, incur, assume or suffer to exist any liens of any kind, on or
      with
      respect to any of its property or assets now owned or hereafter acquired or
      any
      interest therein or any income or profits therefrom;

    


    iii. amend
      its certificate of incorporation, bylaws or other charter documents so as to
      adversely affect any rights of any Purchaser;

    


    iv. repay,
      repurchase or offer to repay, repurchase or otherwise acquire more than a de
      minimis number of shares of its securities or debt obligations; 

    


    v. pay
      cash
      dividends on any equity securities of the Company;

    


    vi. enter
      into any transaction with any Affiliate of the Guarantor which would be required
      to be disclosed in any public filing of the Company with the Commission, unless
      such transaction is made on an arm’s-length basis and expressly approved by a
      majority of the disinterested directors of the Company (even if less than a
      quorum otherwise required for board approval); or

    


    vii. enter
      into any agreement with respect to any of the foregoing.

    


    5. Miscellaneous.

    


    (a) Amendments
      in Writing.
      None of
      the terms or provisions of this Guarantee may be waived, amended, supplemented
      or otherwise modified except in writing by Purchasers representing 60% in
      interest of the outstanding principal balance of the Debentures.

     

    (b) Notices.
      All
      notices, requests and demands to or upon the Purchasers or any Guarantor
      hereunder shall be effected in the manner provided for in the Purchase
      Agreement, provided that any such notice, request or demand to or upon any
      Guarantor shall be addressed to such Guarantor at its notice address set forth
      on Schedule
      5(b).

    


    (c) No
      Waiver By Course Of Conduct; Cumulative Remedies.
      The
      Purchasers shall not by any act (except by a written instrument pursuant to
      Section 5(a)), delay, indulgence, omission or otherwise be deemed to have waived
      any right or remedy hereunder or to have acquiesced in any default under the
      Transaction Documents or Event of Default. No failure to exercise, nor any
      delay
      in exercising, on the part of the Purchasers, any right, power or privilege
      hereunder shall operate as a waiver thereof. No single or partial exercise
      of
      any right, power or privilege hereunder shall preclude any other or further
      exercise thereof or the exercise of any other right, power or privilege. A
      waiver by the Purchasers of any right or remedy hereunder on any one occasion
      shall not be construed as a bar to any right or remedy which the Purchasers
      would otherwise have on any future occasion. The rights and remedies herein
      provided are cumulative, may be exercised singly or concurrently and are not
      exclusive of any other rights or remedies provided by law.

     

    
      
         

      

      
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    (d) Enforcement
      Expenses; Indemnification.

    


    (i) Each
      Guarantor agrees to pay, or reimburse the Purchasers for, all its costs and
      expenses incurred in collecting against such Guarantor under the guarantee
      contained in Section 2 or otherwise enforcing or preserving any rights under
      this Guarantee and the other Transaction Documents to which such Guarantor
      is a
      party, including, without limitation, the reasonable fees and disbursements
      of
      counsel to the Purchasers.

     

    (ii) Each
      Guarantor agrees to pay, and to save the Purchasers harmless from, any and
      all
      liabilities with respect to, or resulting from any delay in paying, any and
      all
      stamp, excise, sales or other taxes which may be payable or determined to be
      payable in connection with any of the transactions contemplated by this
      Guarantee.

    


    (iii) Each
      Guarantor agrees to pay, and to save the Purchasers harmless from, any and
      all
      liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
      costs, expenses or disbursements of any kind or nature whatsoever with respect
      to the execution, delivery, enforcement, performance and administration of
      this
      Guarantee to the extent the Company would be required to do so pursuant to
      the
      Purchase Agreement.

    


    (iv) The
      agreements in this Section shall survive repayment of the Obligations and all
      other amounts payable under the Purchase Agreement and the other Transaction
      Documents. 

    


    (e) Successor
      and Assigns.
      This
      Guarantee shall be binding upon the successors and assigns of each Guarantor
      and
      shall inure to the benefit of the Purchasers and their respective successors
      and
      assigns; provided that no Guarantor may assign, transfer or delegate any of
      its
      rights or obligations under this Guarantee without the prior written consent
      of
      the Purchasers.

     

    (f) Set-Off.
      Each
      Guarantor hereby irrevocably authorizes the Purchasers at any time and from
      time
      to time while an Event of Default under any of the Transaction Documents shall
      have occurred and be continuing, without notice to such Guarantor or any other
      Guarantor, any such notice being expressly waived by each Guarantor, to set-off
      and appropriate and apply any and all deposits, credits, indebtedness or claims,
      in any currency, in each case whether direct or indirect, absolute or
      contingent, matured or unmatured, at any time held or owing by the Purchasers
      to
      or for the credit or the account of such Guarantor, or any part thereof in
      such
      amounts as the Purchasers may elect, against and on account of the obligations
      and liabilities of such Guarantor to the Purchasers hereunder and claims of
      every nature and description of the Purchasers against such Guarantor, in any
      currency, whether arising hereunder, under the Purchase Agreement, any other
      Transaction Document or otherwise, as the Purchasers may elect, whether or
      not
      the Purchasers have made any demand for payment and although such obligations,
      liabilities and claims may be contingent or unmatured. The Purchasers shall
      notify such Guarantor promptly of any such set-off and the application made
      by
      the Purchasers of the proceeds thereof, provided that the failure to give such
      notice shall not affect the validity of such set-off and application. The rights
      of the Purchasers under this Section are in addition to other rights and
      remedies(including, without limitation, other rights of set-off) which the
      Purchasers may have.

     

    
      
         

      

      
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    (g) Counterparts.
      This
      Guarantee may be executed by one or more of the parties to this Guarantee on
      any
      number of separate counterparts (including by telecopy), and all of said
      counterparts taken together shall be deemed to constitute one and the same
      instrument. 

    


    (h) Severability.
      Any
      provision of this Guarantee which is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof, and any such prohibition or unenforceability in any
      jurisdiction shall not invalidate or render unenforceable such provision in
      any
      other jurisdiction. 

    


    (i) Section
      Headings.
      The
      Section headings used in this Guarantee are for convenience of reference only
      and are not to affect the construction hereof or be taken into consideration
      in
      the interpretation hereof.

    


    (j) Integration.
      This
      Guarantee and the other Transaction Documents represent the agreement of the
      Guarantors and the Purchasers with respect to the subject matter hereof and
      thereof, and there are no promises, undertakings, representations or warranties
      by the Purchasers relative to subject matter hereof and thereof not expressly
      set forth or referred to herein or in the other Transaction
      Documents.

    


    (k) Governing
      Laws.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Guarantee shall be governed by and construed and enforced in accordance
      with the internal laws of the State of New York, without regard to the
      principles of conflicts of law thereof. Each of the Company and the Guarantors
      agree that all proceedings concerning the interpretations, enforcement and
      defense of the transactions contemplated by this Guarantee (whether brought
      against a party hereto or its respective affiliates, directors, officers,
      shareholders, partners, members, employees or agents) shall be commenced
      exclusively in the state and federal courts sitting in the City of New York,
      Borough of Manhattan. Each of the Company and the Guarantors hereby irrevocably
      submits to the exclusive jurisdiction of the state and federal courts sitting
      in
      the City of New York, Borough of Manhattan for the adjudication of any dispute
      hereunder or in connection herewith or with any transaction contemplated hereby
      or discussed herein, and hereby irrevocably waives, and agrees not to assert
      in
      any proceeding, any claim that it is not personally subject to the jurisdiction
      of any such court, that such proceeding is improper. Each party hereto hereby
      irrevocably waives personal service of process and consents to process being
      served in any such proceeding by mailing a copy thereof via registered or
      certified mail or overnight delivery (with evidence of delivery) to such party
      at the address in effect for notices to it under this Guarantee and agrees
      that
      such service shall constitute good and sufficient service of process and notice
      thereof. Nothing contained herein shall be deemed to limit in any way any right
      to serve process in any manner permitted by law. Each party hereto hereby
      irrevocably waives, to the fullest extent permitted by applicable law, any
      and
      all right to trial by jury in any legal proceeding arising out of or relating
      to
      this Guarantee or the transactions contemplated hereby.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (l) Acknowledgements.
      Each
      Guarantor hereby acknowledges that:

    


    (i) it
      has
      been advised by counsel in the negotiation, execution and delivery of this
      Guarantee and the other Transaction Documents to which it is a party;


     

    (ii) the
      Purchasers have no fiduciary relationship with or duty to any Guarantor arising
      out of or in connection with this Guarantee or any of the other Transaction
      Documents, and the relationship between the Guarantors, on the one hand, and
      the
      Purchasers, on the other hand, in connection herewith or therewith is solely
      that of debtor and creditor; and 

    


    (iii) no
      joint
      venture is created hereby or by the other Transaction Documents or otherwise
      exists by virtue of the transactions contemplated hereby among the Guarantors
      and the Purchasers. 

    


    (m) Additional
      Guarantors.
      The
      Company shall cause each of its subsidiaries formed or acquired on or subsequent
      to the date hereof to become a Guarantor for all purposes of this Guarantee
      by
      executing and delivering an

    Assumption
      Agreement in the form of Annex 1 hereto.

     

    (n) Release
      of Guarantors.
      Each
      Guarantor will be released from all liability hereunder concurrently with the
      indefeasible repayment in full of all amounts owed under the Purchase Agreement,
      the Debentures and the other Transaction Documents. 

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    
 

    (o) Seniority.
      The
      Obligations of each of the Guarantors hereunder rank senior in priority to
      any
      other Indebtedness (as defined in the Purchase Agreement) of such Guarantor.
      

    


    (p) Commercially
      Reasonable. For
      purposes of this Agreement, any time any action, cost or expense is undertaken
      by the Purchasers or their agents, such action, cost or expense shall be
      required to be commercially reasonable under the circumstances.

    


    (q) Waiver
      of Jury Trial.
      EACH
      GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, THE PURCHASERS, HEREBY
      IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
      PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM
      THEREIN.


    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, each of the undersigned has caused this Guarantee to
      be
      duly executed and delivered as of the date first above written.

     

    
      	 	
              [SUBSIDIARY]

            
	 	 	 
	
               

            	
              By:

            	                       
              
	
               

            	 	
              Name:
                

            
	
               

            	 	
              Title:
                

            


    

    

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

    

     

    SCHEDULE
      1

    


    GUARANTORS

    


    The
      following are the names, notice addresses and jurisdiction of organization
      of
      each Guarantor.

    


    
      	
               

            	 	
              COMPANY

            
	
               

            	
              JURISDICTION
                OF 

            	
              OWNED
                BY

            
	
               

            	
              INCORPORATION
                

            	
              PERCENTAGE

            


    

    


    
      
        
           

        

        
          14

          
            

          

        

        
           

        

      

    

    
Annex
      1
      to

    SUBSIDIARY
      GUARANTEE

    


    ASSUMPTION
      AGREEMENT, dated as of ____ __, ______ made by ______________________________,
      a
      ______________ corporation (the “Additional
      Guarantor”),
      in
      favor of the Purchasers pursuant to the Purchase Agreement referred to below.
      All capitalized terms not defined herein shall have the meaning ascribed to
      them
      in such Purchase Agreement. 

    


    WITNESSETH:

    


    WHEREAS,
      Innovative Card Technologies, Inc., a Delaware corporation (the “Company”)
      and
      the Purchasers have entered into a Securities Purchase Agreement, dated as
      of
      January __, 2008 (as amended, supplemented or otherwise modified from time
      to
      time, the “Purchase
      Agreement”);
      

    


    WHEREAS,
      in connection with the Purchase Agreement, the Subsidiaries of the Company
      (other than the Additional Guarantor) have entered into the Subsidiary
      Guarantee, dated as of January __, 2008 (as amended, supplemented or otherwise
      modified from time to time, the “Guarantee”)
      in
      favor of the Purchasers; 

    


    WHEREAS,
      the Purchase Agreement requires the Additional Guarantor to become a party
      to
      the Guarantee; and

    


    WHEREAS,
      the Additional Guarantor has agreed to execute and deliver
      this Assumption Agreement in order to become a party to the
      Guarantee;

    


    NOW,
      THEREFORE, IT IS AGREED:

    


    1. Guarantee.
      By
      executing and delivering this Assumption Agreement, the Additional Guarantor,
      as
      provided in Section 5(n) of the Guarantee, hereby becomes a party to the
      Guarantee as a Guarantor thereunder with the same force and effect as if
      originally named therein as a Guarantor and, without limiting the generality
      of
      the foregoing, hereby expressly assumes all obligations and liabilities of
      a
      Guarantor thereunder. The information set forth in Annex 1-A hereto is hereby
      added to the information set forth in Schedule 1 to the Guarantee. The
      Additional Guarantor hereby represents and warrants that each of the
      representations and warranties contained in Section 3 of the Guarantee is true
      and correct on and as the date hereof as to such Additional Guarantor (after
      giving effect to this Assumption Agreement) as if made on and as of such
      date.

     

    2. Governing
      Law.
      THIS
      ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
      ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.


    
      
         

      

      
        15

        
          

        

      

      
         

      

    


    IN
      WITNESS WHEREOF, the undersigned has caused this Assumption Agreement
      to be duly executed and delivered as of the date first above
      written.

     

    
      	
               

            	
              [ADDITIONALGUARANTOR]

            
	 	 	 
	
               

            	
              By:
                

            	                      
              
	
               

            	 	
              Name:

            
	
               

            	 	
              Title:

            


    

    


    
      
         

      

      
        16