Executed Version

                          REGISTRATION RIGHTS AGREEMENT

     This  REGISTRATION  RIGHTS  AGREEMENT,  dated as of March  23,  2000  (this
"Agreement"),  by and  between  IFS  International  Holdings,  Inc.,  a Delaware
corporation,  with principal executive offices located at Rensselaer  Technology
Park,  300 Jordan Rd., Troy, NY 12180 (the  "Company"),  and The Shaar Fund Ltd.
(the "Initial Investor").

                  WHEREAS,  upon the terms and subject to the  conditions of the
Securities  Purchase  Agreement  dated as of March 23, 2000,  by and between the
Initial  Investor and the Company (the  "Securities  Purchase  Agreement"),  the
Company has agreed to issue and sell to the Initial  Investor (i) 200,000 shares
of Series B 5%  Convertible  Preferred  Stock,  par value  $0.001 per share (the
"Preferred  Shares")  which,  upon the terms of and subject to the conditions of
the Company's  Certificate of  Designation of Series B 5% Convertible  Preferred
Stock (the  "Certificate of  Designation"),  are convertible  into shares of the
Company's common stock, par value $0.001 per share (the "Common Stock") and (ii)
Common Stock Purchase  Warrants (the  "Warrants")  to purchase  shares of Common
Stock; and

                  WHEREAS, to induce the Initial Investor to execute and deliver
the  Securities  Purchase  Agreement,  the  Company  has agreed to provide  with
respect to the Common Stock issued or issuable in lieu of cash dividend payments
on the Preferred Shares, upon conversion of the Preferred Shares and exercise of
the Warrants certain registration rights under the Securities Act;

                  NOW,  THEREFORE,  in  consideration  of the  premises  and the
mutual covenants  contained herein, the parties hereto,  intending to be legally
bound,  hereby agree as follows:  1.  Definitions (a) As used in this Agreement,
the following terms shall have the meanings:

(i)  "Affiliate,"  of any specified  Person means any other Person who directly,
     or  indirectly  through  one or more  intermediaries,  is in control of, is
     controlled by, or is under common control with, such specified Person.  For
     purposes of this definition,  control of a Person means the power, directly
     or  indirectly,  to direct or cause the  direction  of the  management  and
     policies of such  Person  whether by  contract,  securities,  ownership  or
     otherwise; and the terms "controlling" and "controlled" have the respective
     meanings correlative to the foregoing.

(ii) "Closing  Date"  means  the date and time of the  issuance  and sale of the
     Preferred Shares and the Warrants.

(iii) "Commission" means the Securities and Exchange Commission.

(iv) "Current Market Price" on any date of  determination  means the closing bid
     price of a share of the Common  Stock on such day as reported on the Nasdaq
     SmallCap  Market  ("Nasdaq");  provided,  if such security is not listed or
     admitted to trading on the Nasdaq,  as reported on the  principal  national
     security  exchange or quotation  system on which such security is quoted or
     listed or admitted  to trading,  or, if not quoted or listed or admitted to
     trading on any  national  securities  exchange  or  quotation  system,  the
     closing bid price of such  security on the  over-the-counter  market on the
     day in  question  as  reported  by  Bloomberg  LP, or a  similar  generally
     accepted reporting service, as the case may be.

(v)  "Exchange Act" means the Securities  Exchange Act of 1934, as amended,  and
     the rules and  regulations  of the  Commission  thereunder,  or any similar
     successor statute.

(vi) "Investor"  means  each  of the  Initial  Investor  and any  transferee  or
     assignee of Registrable  Securities  which agrees to become bound by all of
     the terms and  provisions of this  Agreement in  accordance  with Section 8
     hereof.

(vii)"Person" means any individual, partnership,  corporation, limited liability
     company,   joint  stock   company,   association,   trust,   unincorporated
     organization, or a government or agency or political subdivision thereof.

(viii) "Prospectus" means the prospectus  (including,  without  limitation,  any
     preliminary  prospectus  and any final  prospectus  filed  pursuant to Rule
     424(b) under the Securities  Act,  including any prospectus  that discloses
     information  previously  omitted  from a  prospectus  filed  as  part of an
     effective  registration  statement  in  reliance  on Rule  430A  under  the
     Securities  Act)  included  in the  Registration  Statement,  as amended or
     supplemented by any prospectus  supplement with respect to the terms of the
     offering  of any  portion  of the  Registrable  Securities  covered  by the
     Registration  Statement and by all other amendments and supplements to such
     prospectus,  including  all  material  incorporated  by  reference  in such
     prospectus and all documents filed after the date of such prospectus by the
     Company under the Exchange Act and incorporated by reference therein.

(ix) "Public  Offering"  means an offer  registered  with the Commission and the
     appropriate state securities commissions by the Company of its Common Stock
     and made pursuant to the Securities Act.

(x)  "Registrable  Securities"  means the Common Stock issued or issuable (i) in
     lieu  of  cash  dividend  payments  on  the  Preferred  Shares,  (ii)  upon
     conversion or redemption of the Preferred  Shares or (iii) upon exercise of
     the Warrants;  provided, however, a share of Common Stock shall cease to be
     a Registrable  Security for purposes of this Agreement when it no longer is
     a Restricted Security.

(xi) "Registration  Statement"  means a  registration  statement  of the Company
     filed on an  appropriate  form under the  Securities  Act providing for the
     registration  of,  and the sale on a  continuous  or  delayed  basis by the
     holders of, all of the  Registrable  Securities  pursuant to Rule 415 under
     the Securities Act, including the Prospectus  contained therein and forming
     a  part  thereof,  any  amendments  to  such  registration   statement  and
     supplements  to such  Prospectus,  and all  exhibits to and other  material
     incorporated by reference in such registration statement and Prospectus.

(xii)"Restricted Security" means any share of Common Stock issued or issuable in
     lieu of cash dividend payments on the Preferred Shares,  upon conversion or
     redemption of the Preferred  Shares or exercise of the Warrants  except any
     such  share  that  (i)  has  been  registered   pursuant  to  an  effective
     registration  statement  under  the  Securities  Act and  sold in a  manner
     contemplated  by the prospectus  included in such  registration  statement,
     (ii) has been transferred in compliance with the resale  provisions of Rule
     144 under the  Securities  Act (or any successor  provision  thereto) or is
     transferable pursuant to paragraph (k) of Rule 144 under the Securities Act
     (or  any  successor  provision  thereto),   or  (iii)  otherwise  has  been
     transferred  and a new  share of  Common  Stock  not  subject  to  transfer
     restrictions under the Securities Act has been delivered by or on behalf of
     the Company.

(xiii) "Securities  Act" means the Securities  Act of 1933, as amended,  and the
     rules  and  regulations  of  the  Commission  thereunder,  or  any  similar
     successor statute.

(b) All  capitalized  terms  used and not  defined  herein  have the  respective
meaning assigned to them in the Securities Purchase  Agreement.

 2. Registration

(a) Filing and  Effectiveness  of  Registration  Statement.  The  Company  shall
prepare  and file with the  Commission  not later than 90 days after the Closing
Date, a Registration Statement relating to the offer and sale of the Registrable
Securities  and shall use its best  efforts to cause the  Commission  to declare
such  Registration  Statement  effective under the Securities Act as promptly as
practicable but in no event later than 180 days after the Closing Date, assuming
for purposes  hereof a Conversion  Price under the Certificate of Designation of
$2.50 per share.  The Company shall promptly (and, in any event, no more than 24
hours after it receives comments from the Commission), notify the Buyer when and
if it receives any comments from the  Commission on the  Registration  Statement
and promptly  forward a copy of such  comments,  if they are in writing,  to the
Buyer. At such time after the filing of the Registration  Statement  pursuant to
this Section 2(a) as the Commission indicates, either orally or in writing, that
it has no further comments with respect to such  Registration  Statement or that
it  is  willing  to  entertain   appropriate   requests  for   acceleration   of
effectiveness of such Registration Statement, the Company shall promptly, and in
no event later than two business days after receipt of such  indication from the
Commission,  request that the  effectiveness of such  Registration  Statement be
accelerated  within 48 hours of the  Commission's  receipt of such request.  The
Company  shall not include any other  securities in the  Registration  Statement
relating to the offer and sale of the Registrable Securities.  The Company shall
notify the Initial Investor by written notice that such  Registration  Statement
has  been  declared  effective  by  the  Commission  within  24  hours  of  such
declaration by the Commission.

(b) Registration Default. If the Registration Statement covering the Registrable
Securities  required to be filed by the Company pursuant to Section 2(a), is not
(i) filed  with the  Commission  within 90 days after the  Closing  Date or (ii)
declared  effective  by the  Commission  within 180 days after the Closing  Date
(either of which,  without  duplication,  an "Initial  Date"),  then the Company
shall make the payments to the Initial Investor as provided in the next sentence
as liquidated damages and not as a penalty. The amount to be paid by the Company
to the Initial  Investor  shall be  determined as of each  Computation  Date (as
defined  below),  and such amount shall be equal to 2% (the  "Liquidated  Damage
Rate") of the Purchase Price (as defined in the Securities  Purchase  Agreement)
from the Initial  Date to the first  Computation  Date and for each  Computation
Date  thereafter,  calculated  on a pro rata  basis  to the  date on  which  the
Registration  Statement is filed with (in the event of an Initial Date  pursuant
to clause (i) above) or declared  effective  by (in the event of an Initial Date
pursuant to clause (ii) above) the Commission (the "Periodic  Amount") provided,
however,  that in no event shall the  liquidated  damages be less than  $25,000;
provided,  further,  however, that if the Registration Statement is not declared
effective by the Commission  within 210 days after the Initial Date set forth in
clause  (ii)  above,  then the  Liquidated  Damage  Rate shall  increase  to 4%;
provided, further, however, that the Liquidated Damage Rate shall increase by 1%
for each 30 day period  after the 210th day after the Initial  Date set forth in
clause (ii) above that the Registration  Statement is not declared  effective by
the  Commission.  The full  Periodic  Amount shall be paid by the Company to the
Initial  Investor by wire transfer of immediately  available  funds within three
days after each  Computation  Date.  In no event shall the Company be liable for
damages  hereunder if any delay relates  solely to an action or a failure to act
on the part of the  Investor and the Company is  diligently  pursuing the timely
filing and effectiveness of the Registration Statement.

                  As used in this  Section  2(b),  "Computation  Date" means the
date which is 30 days after the Initial Date and, if the Registration  Statement
required to be filed by the Company pursuant to Section 2(a) has not theretofore
been declared effective by the Commission,  each date which is 30 days after the
previous  Computation  Date until such  Registration  Statement  is so  declared
effective.

(c)  Eligibility for Use of Form S-3. The Company agrees that at such time as it
meets all the requirements for the use of Securities Act Registration  Statement
on Form S-3 it shall file all reports and information required to be filed by it
with the  Commission  in a timely manner and take all such other action so as to
maintain such eligibility for the use of such form.

(d)  Additional  Registration  Statement.  In the event the Current Market Price
declines  to $3.00 per share or less and each time  thereafter  that the Current
Market  Price  declines by 20% (each such date, a "Decline  Date"),  the Company
shall,  to the extent  required by the  Securities  Act (because the  additional
shares were not covered by the Registration  Statement filed pursuant to Section
2(a)),  as  reasonably  determined by the Initial  Investor,  file an additional
Registration  Statement  with the  Commission  for  such  additional  number  of
Registrable  Securities  as would be issuable  upon  conversion of the Preferred
Shares and exercise of the Warrants (the "Additional Registrable Securities") in
addition to those previously registered,  assuming (x) with respect to the first
Additional Registration Statement, a Conversion Price of $1.50 per share and (y)
with respect to each succeeding Additional  Registration Statement, a Conversion
Price  of 20%  less  than the  Conversion  Price  assumed  with  respect  to the
immediately preceding Additional Registration  Statement.  The Company shall, to
the extent  required by the  Securities  Act, as  reasonably  determined  by the
Initial  Investor,  prepare and file with the Commission not later than the 30th
day thereafter,  a Registration Statement relating to the offer and sale of such
Additional  Registrable  Securities  and shall use its best efforts to cause the
Commission to declare such Registration Statement effective under the Securities
Act as  promptly  as  practicable  but not later  than 60 days  thereafter.  The
Company  shall not include any other  securities in the  Registration  Statement
relating to the offer and sale of such Additional Registrable Securities.

                  If the Additional Registration Statement is not (i) filed with
the Commission within 30 days after the Decline Date or (ii) declared  effective
by the  Commission  within 90 days  after the  Decline  Date  (either  of which,
without duplication,  an "Additional Registration Date"), then the Company shall
make the payments to the Initial Investor at the Liquidated Damage Rate from the
Additional  Registration  Date to the first Additional  Computation Date and for
each Additional  Computation Date thereafter,  calculated on a pro rata basis to
the date on which the  Additional  Registration  Statement is filed with (in the
event of an  Additional  Registration  Date  pursuant  to clause  (i)  above) or
declared effective by (in the event of an Additional  Registration Date pursuant
to  clause  (ii)  above)  the  Commission  (the  "Additional  Periodic  Amount")
provided,  however,  that in no event shall the liquidated  damages be less than
$25,000;  provided,  further,  however,  that  if  the  Additional  Registration
Statement is not declared  effective by the Commission within 120 days after the
Additional Registration Date set forth in clause (ii) above, then the Liquidated
Damage  Rate  shall  increase  to  4%;  provided,  further,  however,  that  the
Liquidated  Damage Rate shall  increase  by 1% for each 30 day period  after the
120th day after the Additional  Registration Date set forth in clause (ii) above
that the  Additional  Registration  Statement is not  declared  effective by the
Commission.  The full Additional Periodic Amount shall be paid by the Company to
the Initial  Investor by wire  transfer of  immediately  available  funds within
three days after each Additional Computation Date.

                  As used in this Section 2(d),  "Additional  Computation  Date"
means the date which is 30 days after the Additional  Registration  Date and, if
the  Additional  Registration  Statement  required  to be filed  by the  Company
pursuant to this Section 2(d) has not theretofore been declared effective by the
Commission, each date which is 30 days after the previous Additional Computation
Date until such Additional Registration Statement is so declared effective.

3.       Obligations of the Company

                  In  connection  with  the   registration  of  the  Registrable
Securities,  the  Company  shall:  (a)  Promptly  (i)  prepare and file with the
Commission  such  amendments  (including   post-effective   amendments)  to  the
Registration  Statement and supplements to the Prospectus as may be necessary to
keep the Registration  Statement  continuously  effective and in compliance with
the  provisions of the  Securities  Act  applicable  thereto so as to permit the
Prospectus  forming  part  thereof to be current  and useable by  Investors  for
resales of the  Registrable  Securities for a period of five years from the date
on  which  the  Registration  Statement  is  first  declared  effective  by  the
Commission  (the  "Effective  Time") or such shorter  period that will terminate
when all the Registrable  Securities covered by the Registration  Statement have
been sold pursuant thereto in accordance with the plan of distribution  provided
in the Prospectus,  transferred pursuant to Rule 144 under the Securities Act or
otherwise transferred in a manner that results in the delivery of new securities
not subject to transfer restrictions under the Securities Act (the "Registration
Period") and (ii) take all lawful action such that each of (A) the  Registration
Statement and any amendment thereto does not, when it becomes effective, contain
an 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
and (B) the  Prospectus  forming  part of the  Registration  Statement,  and any
amendment or supplement  thereto,  does not at any time during the  Registration
Period  include  an  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,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.  (b) During the Registration  Period,  comply with the provisions of
the  Securities  Act with respect to the  Registrable  Securities of the Company
covered by the Registration Statement until such time as all of such Registrable
Securities  have been  disposed of in  accordance  with the intended  methods of
disposition by the Investors as set forth in the Prospectus  forming part of the
Registration  Statement;  (c) (i) Prior to the filing with the Commission of any
Registration  Statement  (including any amendments thereto) and the distribution
or delivery of any Prospectus (including any supplements  thereto),  provide (A)
draft copies  thereof to the  Investors  and reflect in such  documents all such
comments as the Investors (and their counsel)  reasonably may propose and (B) to
the Investors a copy of the  accountant's  consent  letter to be included in the
filing and (ii)  furnish  to each  Investor  whose  Registrable  Securities  are
included in the Registration  Statement and its legal counsel  identified to the
Company, (A) promptly after the same is prepared and publicly distributed, filed
with the Commission,  or received by the Company,  one copy of the  Registration
Statement,  each Prospectus,  and each amendment or supplement thereto,  and (B)
such  number of copies of the  Prospectus  and all  amendments  and  supplements
thereto and such other  documents,  as such Investor may  reasonably  request in
order to facilitate the disposition of the Registrable  Securities owned by such
Investor  and, in each case  specified  in this clause (c), the  Investors  will
promptly  provide any comments to the  Company;  (d) (i) Register or qualify the
Registrable   Securities  covered  by  the  Registration  Statement  under  such
securities or "blue sky" laws of such  jurisdictions as the Investors who hold a
majority-in-interest  of the  Registrable  Securities  being offered  reasonably
request,  (ii) prepare and file in such jurisdictions such amendments (including
post-effective   amendments)   and   supplements  to  such   registrations   and
qualifications as may be necessary to maintain the effectiveness  thereof at all
times during the Registration  Period,  (iii) take all such other lawful actions
as may be necessary to maintain such  registrations and qualifications in effect
at all times during the Registration Period, and (iv) take all such other lawful
actions reasonably necessary or advisable to qualify the Registrable  Securities
for sale in such jurisdictions; provided, however, that the Company shall not be
required in connection  therewith or as a condition thereto to (A) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(d),  (B) subject  itself to general  taxation in any such
jurisdiction  or (C) file a general  consent  to  service of process in any such
jurisdiction; (e) As promptly as practicable after becoming aware of such event,
notify each Investor of the  occurrence  of any event,  as a result of which the
Prospectus included in the 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,  in
light of the  circumstances  under  which they were made,  not  misleading,  and
promptly  prepare an amendment to the  Registration  Statement and supplement to
the  Prospectus  to correct such untrue  statement  or  omission,  and deliver a
number of copies of such  supplement  and  amendment  to each  Investor  as such
Investor may reasonably  request;  (f) As promptly as practicable after becoming
aware of such event, notify each Investor who holds Registrable Securities being
sold (or, in the event of an underwritten  offering,  the managing underwriters)
of the issuance by the  Commission of any stop order or other  suspension of the
effectiveness  of the Registration  Statement at the earliest  possible time and
take all lawful  action to effect the  withdrawal,  recession or removal of such
stop order or other suspension; (g) Cause all the Registrable Securities covered
by the Registration  Statement to be listed on the principal national securities
exchange,  and  included in an  inter-dealer  quotation  system of a  registered
national securities association,  on or in which securities of the same class or
series  issued by the  Company  are then  listed or  included;  (h)  Maintain  a
transfer agent and registrar,  which may be a single entity, for the Registrable
Securities not later than the effective date of the Registration Statement;  (i)
Cooperate with the Investors who hold  Registrable  Securities  being offered to
facilitate  the  timely   preparation  and  delivery  of  certificates  for  the
Registrable  Securities to be offered pursuant to the registration statement and
enable  such  certificates  for  the  Registrable   Securities  to  be  in  such
denominations  or amounts,  as the case may be, as the Investors  reasonably may
request and  registered in such names as the Investor may request;  and,  within
three business days after a registration  statement  which includes  Registrable
Securities  is declared  effective  by the  Commission,  deliver and cause legal
counsel  selected  by the  Company  to  deliver  to the  transfer  agent for the
Registrable   Securities  (with  copies  to  the  Investors  whose   Registrable
Securities  are  included  in  such   registration   statement)  an  appropriate
instruction and, to the extent necessary,  an opinion of such counsel;  (j) Take
all such other lawful  actions  reasonably  necessary to expedite and facilitate
the disposition by the Investors of their  Registrable  Securities in accordance
with  the  intended  methods  therefor  provided  in the  Prospectus  which  are
customary under the circumstances;  (k) Make generally available to its security
holders as soon as practicable, but in any event not later than three (3) months
after (i) the  effective  date (as defined in Rule 158(c)  under the  Securities
Act)  of the  Registration  Statement,  and  (ii)  the  effective  date  of each
post-effective  amendment to the Registration  Statement, as the case may be, an
earnings  statement of the Company and its  subsidiaries  complying with Section
11(a) of the  Securities  Act and the rules and  regulations  of the  Commission
thereunder (including, at the option of the Company, Rule 158); (l) In the event
of an  underwritten  offering,  promptly  include or incorporate in a Prospectus
supplement  or  post-effective  amendment  to the  Registration  Statement  such
information as the managers  reasonably  agree should be included therein and to
which the Company does not  reasonably  object and make all required  filings of
such Prospectus  supplement or  post-effective  amendment as soon as practicable
after it is  notified of the  matters to be  included  or  incorporated  in such
Prospectus  supplement  or  post-effective  amendment;  (m) (i) Make  reasonably
available for  inspection by Investors,  any  underwriter  participating  in any
disposition pursuant to the Registration Statement, and any attorney, accountant
or other agent retained by such Investors or any such  underwriter  all relevant
financial and other records, pertinent corporate documents and properties of the
Company and its subsidiaries,  and (ii) cause the Company's officers,  directors
and employees to supply all information  reasonably  requested by such Investors
or any such  underwriter,  attorney,  accountant or agent in connection with the
Registration  Statement, in each case, as is customary for similar due diligence
examinations;  provided,  however,  that all records,  information and documents
that are designated in writing by the Company,  in good faith, as  confidential,
proprietary  or  containing  any material  nonpublic  information  shall be kept
confidential by such Investors and any such underwriter, attorney, accountant or
agent (pursuant to an appropriate  confidentiality  agreement in the case of any
such  holder or agent),  unless  such  disclosure  is made  pursuant to judicial
process in a court  proceeding  (after first  giving the Company an  opportunity
promptly  to seek a  protective  order  or  otherwise  limit  the  scope  of the
information  sought to be  disclosed)  or is required  by law, or such  records,
information or documents  become  available to the public generally or through a
third party not in violation of an accompanying  obligation of  confidentiality;
and  provided,  further,  that,  if the  foregoing  inspection  and  information
gathering would otherwise  disrupt the Company's  conduct of its business,  such
inspection and information  gathering shall, to the maximum extent possible,  be
coordinated on behalf of the Investors and the other parties entitled thereto by
one firm of counsel  designed  by and on behalf of the  majority  in interest of
Investors and other parties;  (n) In connection with any underwritten  offering,
make such representations and warranties to the Investors  participating in such
underwritten  offering and to the managers,  in form, substance and scope as are
customarily  made by the  Company  to  underwriters  in  secondary  underwritten
offerings; (o) In connection with any underwritten offering,  obtain opinions of
counsel  to the  Company  (which  counsel  and  opinions  (in  form,  scope  and
substance)  shall be reasonably  satisfactory to the managers)  addressed to the
underwriters,  covering  such  matters as are  customarily  covered in  opinions
requested in secondary  underwritten offerings (it being agreed that the matters
to be covered by such opinions shall include, without limitation, as of the date
of the opinion and as of the  Effective  Time of the  Registration  Statement or
most recent  post-effective  amendment thereto,  as the case may be, the absence
from the  Registration  Statement  and the  Prospectus,  including any documents
incorporated by reference therein,  of an untrue statement of a material fact or
the omission of a material  fact  required to be stated  therein or necessary to
make the  statements  therein  (in the case of the  Prospectus,  in light of the
circumstances  under which they were made) not misleading,  subject to customary
limitations);  (p) In connection with any  underwritten  offering,  obtain "cold
comfort" letters and updates thereof from the independent  public accountants of
the Company (and, if necessary,  from the independent  public accountants of any
subsidiary  of the Company or of any business  acquired by the Company,  in each
case for which  financial  statements and financial data are, or are required to
be,  included in the  Registration  Statement),  addressed  to each  underwriter
participating  in such  underwritten  offering (if such underwriter has provided
such letter,  representations  or documentation,  if any, required for such cold
comfort  letter to be so addressed),  in customary form and covering  matters of
the type  customarily  covered  in "cold  comfort"  letters in  connection  with
secondary  underwritten  offerings;  (q) In  connection  with  any  underwritten
offering,  deliver such documents and certificates as may be reasonably required
by the managers, if any; and (r) In the event that any broker-dealer  registered
under the Exchange Act shall be an "Affiliate" (as defined in Rule 2729(b)(1) of
the rules and  regulations of the National  Association  of Securities  Dealers,
Inc. (the "NASD Rules") (or any successor  provision thereto)) of the Company or
has a "conflict of interest"  (as defined in Rule  2720(b)(7)  of the NASD Rules
(or any successor  provision  thereto)) and such broker-dealer shall underwrite,
participate as a member of an underwriting  syndicate or selling group or assist
in the  distribution of any Registrable  Securities  covered by the Registration
Statement,  whether  as a  holder  of  such  Registrable  Securities  or  as  an
underwriter,  a  placement  or sales  agent or a broker  or  dealer  in  respect
thereof, or otherwise,  the Company shall assist such broker-dealer in complying
with the requirements of the NASD Rules, including,  without limitation,  by (A)
engaging a "qualified  independent  underwriter" (as defined in Rule 2720(b)(15)
of the NASD Rules (or any successor  provision  thereto)) to  participate in the
preparation  of  the  Registration   Statement   relating  to  such  Registrable
Securities,  to exercise usual standards of due diligence in respect thereof and
to recommend  the public  offering  price of such  Registrable  Securities,  (B)
indemnifying  such  qualified  independent  underwriter  to  the  extent  of the
indemnification of underwriters  provided in Section 6 hereof, and (C) providing
such  information  to such  broker-dealer  as may be  required in order for such
broker-dealer  to comply with the requirements of the NASD Rules. 4. Obligations
of the Investors

                  In  connection  with  the   registration  of  the  Registrable
Securities, the Investors shall have the following obligations:  (a) It shall be
a  condition  precedent  to the  obligations  of the  Company  to  complete  the
registration  pursuant  to  this  Agreement  with  respect  to  the  Registrable
Securities  of a particular  Investor  that such  Investor  shall furnish to the
Company such information regarding itself, the Registrable Securities held by it
and the intended method of disposition of the Registrable  Securities held by it
as shall be reasonably  required to effect the  registration of such Registrable
Securities and shall execute such documents in connection with such registration
as the Company may  reasonably  request.  As least seven days prior to the first
anticipated filing date of the Registration Statement,  the Company shall notify
each Investor of the  information  the Company  requires from each such Investor
(the  "Requested  Information")  if such  Investor  elects  to  have  any of its
Registrable Securities included in the Registration  Statement.  If at least two
business days prior to the anticipated  filing date the Company has not received
the Requested Information from an Investor (a "Non-Responsive  Investor"),  then
the Company may file the Registration  Statement without  including  Registrable
Securities of such  Non-Responsive  Investor and have no further  obligations to
the  Non-Responsive  Investor;  (b)  Each  Investor  by  its  acceptance  of the
Registrable  Securities  agrees to cooperate with the Company in connection with
the preparation and filing of the Registration Statement hereunder,  unless such
Investor  has  notified the Company in writing of its election to exclude all of
its  Registrable  Securities  from  the  Registration  Statement;  and (c)  Each
Investor  agrees  that,  upon  receipt  of any  notice  from the  Company of the
occurrence of any event of the kind  described in Section 3(e) or 3(f), it shall
immediately  discontinue its disposition of Registrable  Securities  pursuant to
the  Registration  Statement  covering such  Registrable  Securities  until such
Investor's  receipt of the  copies of the  supplemented  or  amended  Prospectus
contemplated  by Section 3(e) and, if so directed by the Company,  such Investor
shall  deliver to the Company (at the  expense of the  Company) or destroy  (and
deliver  to the  Company  a  certificate  of  destruction)  all  copies  in such
Investor's  possession,  of the Prospectus covering such Registrable  Securities
current at the time of receipt of such notice. 5. Expenses of Registration

                  All   expenses,   other  than   underwriting   discounts   and
commissions,   incurred   in   connection   with   registrations,   filings   or
qualifications  pursuant to Section 3, but including,  without  limitation,  all
registration,  listing,  and qualifications  fees,  printing and engraving fees,
accounting fees, and the fees and disbursements of counsel for the Company,  and
the  reasonable  fees of one firm of  counsel to the  holders  of a majority  in
interest  of the  Registrable  Securities  shall be borne by the  Company  in an
amount not to exceed $20,000.

6.       Indemnification and Contribution

(a) The  Company  shall  indemnify  and hold  harmless  each  Investor  and each
underwriter,   if  any,  which   facilitates   the  disposition  of  Registrable
Securities,  and each of their respective officers and directors and each person
who controls  such Investor or  underwriter  within the meaning of Section 15 of
the  Securities  Act or Section 20 of the  Exchange  Act (each such person being
sometimes  hereinafter referred to as an "Indemnified  Person") from and against
any losses,  claims,  damages or  liabilities,  joint or several,  to which such
Indemnified  Person may become  subject under the  Securities  Act or otherwise,
insofar as such losses,  claims,  damages or liabilities  (or actions in respect
thereof)  arise out of or are based upon an untrue  statement or alleged  untrue
statement  of a material  fact  contained  in any  Registration  Statement or an
omission or alleged  omission to state  therein a material  fact  required to be
stated therein or necessary to make the statements therein,  not misleading,  or
arise out of or are based upon an untrue  statement or alleged untrue  statement
of a  material  fact  contained  in any  Prospectus  or an  omission  or alleged
omission  to state  therein a material  fact  required  to be stated  therein or
necessary  to make the  statements  therein,  in the light of the  circumstances
under which they were made,  not  misleading;  and the Company  hereby agrees to
reimburse such  Indemnified  Person for all reasonable  legal and other expenses
incurred by them in connection with  investigating  or defending any such action
or claim as and when such expenses are  incurred;  provided,  however,  that the
Company shall not be liable to any such  Indemnified  Person in any such case to
the extent that any such loss,  claim,  damage or liability  arises out of or is
based upon (i) an untrue  statement or alleged  untrue  statement made in, or an
omission or alleged omission from, such Registration  Statement or Prospectus in
reliance  upon and in  conformity  with  written  information  furnished  to the
Company by such Indemnified Person expressly for use therein or (ii) in the case
of the  occurrence of an event of the type specified in Section 3(e), the use by
the Indemnified Person of an outdated or defective  Prospectus after the Company
has provided to such  Indemnified  Person an updated  Prospectus  correcting the
untrue  statement or alleged  untrue  statement or omission or alleged  omission
giving rise to such loss, claim, damage or liability.

(b) Indemnification by the Investors and Underwriters.  Each Investor agrees, as
a  consequence  of the  inclusion  of any of  its  Registrable  Securities  in a
Registration  Statement,  and each  underwriter,  if any, which  facilitates the
disposition  of  Registrable   Securities  shall  agree,  as  a  consequence  of
facilitating  such  disposition  of  Registrable  Securities,  severally and not
jointly,  to  (i)  indemnify  and  hold  harmless  the  Company,  its  directors
(including any person who, with his or her consent, is named in the Registration
Statement  as a director  nominee of the  Company),  its  officers  who sign any
Registration  Statement and each person, if any, who controls the Company within
the  meaning  of either  Section 15 of the  Securities  Act or Section 20 of the
Exchange Act,  against any losses,  claims,  damages or liabilities to which the
Company or such other persons may become  subject,  under the  Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect  thereof) arise out of or are based upon an untrue  statement or alleged
untrue statement of a material fact contained in such Registration  Statement or
Prospectus 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  (in light of the  circumstances  under which they were
made,  in the  case of the  Prospectus),  not  misleading,  in each  case to the
extent,  but only to the extent,  that such untrue  statement or alleged  untrue
statement  or omission  or alleged  omission  was made in  reliance  upon and in
conformity with written  information  furnished to the Company by such holder or
underwriter  expressly for use therein;  provided,  however, that no Investor or
underwriter  shall be liable under this Section 6(b) for any amount in excess of
the net proceeds paid to such Investor or  underwriter in respect of shares sold
by it, and (ii) reimburse the Company for any legal or other  expenses  incurred
by the Company in connection with  investigating or defending any such action or
claim as such expenses are incurred.

(c)  Notice  of  Claims,   etc.  Promptly  after  receipt  by  a  party  seeking
indemnification  pursuant to this Section 6 (an "Indemnified  Party") of written
notice of any  investigation,  claim,  proceeding  or other action in respect of
which  indemnification is being sought (each, a "Claim"),  the Indemnified Party
promptly  shall notify the party against whom  indemnification  pursuant to this
Section  6 is  being  sought  (the  "Indemnifying  Party")  of the  commencement
thereof;  but the omission to so notify the Indemnifying Party shall not relieve
it from any  liability  that it  otherwise  may have to the  Indemnified  Party,
except to the extent that the  Indemnifying  Party is materially  prejudiced and
forfeits  substantive  rights  and  defenses  by  reason  of  such  failure.  In
connection  with any  Claim as to which  both  the  Indemnifying  Party  and the
Indemnified  Party are  parties,  the  Indemnifying  Party  shall be entitled to
assume the defense thereof. Notwithstanding the assumption of the defense of any
Claim by the Indemnifying  Party, the Indemnified  Party shall have the right to
employ  separate  legal counsel and to participate in the defense of such Claim,
and the Indemnifying Party shall bear the reasonable fees,  out-of-pocket  costs
and expenses of such  separate  legal counsel to the  Indemnified  Party if (and
only if): (x) the  Indemnifying  Party shall have agreed to pay such fees, costs
and  expenses,  (y) the  Indemnified  Party  and the  Indemnifying  Party  shall
reasonably have concluded that  representation  of the Indemnified  Party by the
Indemnifying  Party by the same legal  counsel would not be  appropriate  due to
actual or, as reasonably  determined by legal counsel to the Indemnified  Party,
potentially  differing  interests  between  such  parties in the  conduct of the
defense  of such  Claim,  or if there  may be legal  defenses  available  to the
Indemnified  Party that are in addition to or disparate from those  available to
the  Indemnifying  Party,  or (z) the  Indemnifying  Party  shall have failed to
employ legal counsel  reasonably  satisfactory to the Indemnified Party within a
reasonable period of time after notice of the commencement of such Claim. If the
Indemnified Party employs separate legal counsel in circumstances  other than as
described in clauses (x), (y) or (z) above, the fees, costs and expenses of such
legal counsel shall be borne  exclusively by the  Indemnified  Party.  Except as
provided above, the  Indemnifying  Party shall not, in connection with any Claim
in the same  jurisdiction,  be liable for the fees and expenses of more than one
firm of counsel for the  Indemnified  Party  (together  with  appropriate  local
counsel).  The Indemnified Party shall not, without the prior written consent of
the  Indemnifying  Party (which  consent  shall not  unreasonably  be withheld),
settle or compromise any Claim or consent to the entry of any judgment that does
not  include  an  unconditional  release  of the  Indemnifying  Party  from  all
liabilities with respect to such Claim or judgment.

(d)  Contribution.  If the  indemnification  provided  for in this  Section 6 is
unavailable  to or  insufficient  to hold harmless an  Indemnified  Person under
subsection  (a) or (b)  above in  respect  of any  losses,  claims,  damages  or
liabilities  (or actions in respect  thereof)  referred  to  therein,  then each
Indemnifying  Party  shall  contribute  to the  amount  paid or  payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities (or
actions in respect  thereof) in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and the Indemnified Party in connection
with the statements or omissions which resulted in such losses,  claims, damages
or liabilities  (or actions in respect  thereof),  as well as any other relevant
equitable  considerations.  The relative  fault of such  Indemnifying  Party and
Indemnified  Party shall be  determined  by reference  to,  among other  things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged  omission to state a material  fact relates to  information  supplied by
such Indemnifying  Party or by such Indemnified Party, and the parties' relative
intent,  knowledge,  access to information and opportunity to correct or prevent
such  statement or omission.  The parties hereto agree that it would not be just
and equitable if  contribution  pursuant to this Section 6(d) were determined by
pro rata allocation (even if the Investors or any  underwriters  were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable  considerations  referred to in this Section 6(d).
The amount  paid or payable by an  Indemnified  Party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
shall be  deemed  to  include  any legal or other  fees or  expenses  reasonably
incurred by such Indemnified Party in connection with investigating or defending
any such  action or  claim.  No person  guilty of  fraudulent  misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution   from  any  person   who  was  not   guilty  of  such   fraudulent
misrepresentation. The obligations of the Investors and any underwriters in this
Section 6(d) to contribute  shall be several in proportion to the  percentage of
Registrable  Securities registered or underwritten,  as the case may be, by them
and not joint. (e)  Notwithstanding any other provision of this Section 6, in no
event shall any (i)  Investor be required to  undertake  liability to any person
under  this  Section 6 for any  amounts  in excess of the  dollar  amount of the
proceeds  to be  received  by such  Investor  from the  sale of such  Investor's
Registrable  Securities  (after  deducting any fees,  discounts and  commissions
applicable  thereto)  pursuant to any  Registration  Statement  under which such
Registrable  Securities  are to be registered  under the Securities Act and (ii)
underwriter be required to undertake  liability to any Person  hereunder for any
amounts in excess of the aggregate  discount,  commission or other  compensation
payable  to  such  underwriter  with  respect  to  the  Registrable   Securities
underwritten by it and distributed pursuant to the Registration Statement.

(f) The  obligations of the Company under this Section 6 shall be in addition to
any liability which the Company may otherwise have to any Indemnified Person and
the  obligations  of any  Indemnified  Person  under this  Section 6 shall be in
addition to any liability  which such  Indemnified  Person may otherwise have to
the Company. The remedies provided in this Section 6 are not exclusive and shall
not limit  any  rights  or  remedies  which may  otherwise  be  available  to an
indemnified party at law or in equity.

7.       Rule 144

                  With a view to making  available to the Investors the benefits
of Rule 144 under the  Securities Act or any other similar rule or regulation of
the Commission  that may at any time permit the Investors to sell  securities of
the Company to the public without  registration ("Rule 144"), the Company agrees
to use its best efforts to:

(a)      comply with the provisions of paragraph (c) (1) of Rule 144; and
(b) file with the Commission in a timely manner all reports and other  documents
required  to be filed by the  Company  pursuant to Section 13 or 15(d) under the
Exchange Act; and, if at any time it is not required to file such reports but in
the past had  been  required  to or did file  such  reports,  it will,  upon the
request of any Investor, make available other information as required by, and so
long as  necessary to permit sales of, its  Registrable  Securities  pursuant to
Rule 144.

8.       Assignment

                  The rights to have the Company register Registrable Securities
pursuant to this Agreement shall be  automatically  assigned by the Investors to
any permitted  transferee of all or any portion of such  Registrable  Securities
(or all or any portion of any  Preferred  Shares or Warrant of the Company which
is convertible into such securities) only if: (a) the Investor agrees in writing
with the  transferee  or  assignee  to assign  such  rights,  and a copy of such
agreement  is  furnished  to the  Company  within a  reasonable  time after such
assignment,  (b) the Company is, within a reasonable time after such transfer or
assignment,  furnished  with written  notice of (i) the name and address of such
transferee  or  assignee  and (ii) the  securities  with  respect  to which such
registration rights are being transferred or assigned, (c) immediately following
such transfer or  assignment,  the  securities so transferred or assigned to the
transferee or assignee constitute  Restricted  Securities,  and (d) at or before
the time the Company  received the written notice  contemplated by clause (b) of
this sentence the  transferee or assignee  agrees in writing with the Company to
be bound by all of the provisions contained herein. 9. Amendment and Waiver

     Any provision of this Agreement may be amended and the  observance  thereof
may  be  waived  (either  generally  or  in a  particular  instance  and  either
retroactively  or  prospectively),  only with the written consent of the Company
and Investors who hold a majority-in-interest of the Registrable Securities. Any
amendment or waiver  effected in accordance with this Section 9 shall be binding
upon each Investor and the Company.

10.      Changes in Common Stock

                  If, and as often as, there are any changes in the Common Stock
by  way  of  stock  split,  stock  dividend,   reverse  split,   combination  or
reclassification,   or  through   merger,   consolidation,   reorganization   or
recapitalization, or by any other means, appropriate adjustment shall be made in
the  provisions  hereof,  as may be required,  so that the rights and privileges
granted hereby shall continue with respect to the Common Stock as so changed.

11.      Miscellaneous

(a) A person or entity shall be deemed to be a holder of Registrable  Securities
whenever such person or entity owns of record such  Registrable  Securities.  If
the Company receives conflicting instructions,  notices or elections from two or
more persons or entities with respect to the same  Registrable  Securities,  the
Company shall act upon the basis of  instructions,  notice or election  received
from the registered owner of such Registrable Securities.

(b) If,  after  the date  hereof  and  prior  to the  Commission  declaring  the
Registration  Statement to be filed pursuant to Section 2(a) effective under the
Securities  Act, the Company grants to any Person any  registration  rights with
respect to any Company  securities which are more favorable to such other Person
than those provided in this  Agreement,  then the Company  forthwith shall grant
(by means of an amendment to this Agreement or otherwise) identical registration
rights to all Investors hereunder.

(c)  Except  as  may  be  otherwise   provided  herein,   any  notice  or  other
communication  or delivery  required or permitted  hereunder shall be in writing
and shall be delivered personally or sent by certified mail, postage prepaid, or
by a nationally  recognized overnight courier service, and shall be deemed given
when so delivered  personally or by overnight  courier  service,  or, if mailed,
three days after the date of deposit in the United States mails, as follows:

                  (i)      if to the Company, to:

                           IFS International Holdings, Inc.
                           Rensselaer Technology Park
                           300 Jordan Rd.
                           Troy, NY 12180
                           Attention:
                           (518) 283-7900
                           [                        ] (Fax)
                            ------------------------

                           with a copy to:

                           Parker Duryee Rosoff & Haft
                           529 Fifth Avenue
                           New York, NY 10017
                           Attention:  Michael D. DiGiovanna, Esq.
                           (212) 599-0500
                           (212) 972-9487 (Fax)

                  (ii)     if to the Initial Investor, to:

                           The Shaar Fund Ltd.,
                           c/o Levinson Capital Management
                           2 World Trade Center, Suite 1820
                           New York, NY  10048
                           Attention:  Samuel Levinson
                           (212) 432-7711
                           (212) 432-7771 (Fax)

                           with a copy to:

                           Cadwalader, Wickersham & Taft
                           100 Maiden Lane
                           New York, NY 10038
                           Attention:  Dennis J. Block, Esq.
                           (212) 504-5555
                           (212) 504-5557 (Fax)

                           (iii) if to any other  Investor,  at such  address as
         such Investor shall have provided in writing to the Company.

The  Company,  the Initial  Investor or any  Investor  may change the  foregoing
address by notice given pursuant to this Section 11(c). (d) Failure of any party
to exercise any right or remedy under this Agreement or otherwise, or delay by a
party in exercising such right or remedy, shall not operate as a waiver thereof.

(e) This Agreement  shall be governed by and  interpreted in accordance with the
laws of the State of New York. Each of the parties  consents to the jurisdiction
of the federal courts whose districts encompass any part of the City of New York
or the state  courts of the State of New York sitting in the City of New York in
connection with any dispute  arising under this Agreement and hereby waives,  to
the maximum extent permitted by law, any objection including any objection based
on  forum  non  conveniens,  to the  bringing  of any  such  proceeding  in such
jurisdictions.

(f) The remedies  provided in this Agreement are cumulative and not exclusive of
any remedies provided by law. If any term, provision, covenant or restriction of
this  Agreement  is held by a court of  competent  jurisdiction  to be  invalid,
illegal,  void  or  unenforceable,  the  remainder  of  the  terms,  provisions,
covenants  and  restrictions  set forth  herein  shall  remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an  alternative  means to
achieve the same or substantially  the same result as that  contemplated by such
term, provision,  covenant or restriction.  It is hereby stipulated and declared
to be the  intention of the parties that they would have  executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

(g) The  Company  shall  not  enter  into  any  agreement  with  respect  to its
securities  that is  inconsistent  with the  rights  granted  to the  holders of
Registrable  Securities  in this  Agreement  or  otherwise  conflicts  with  the
provisions  hereof.  The  Company  is not  currently  a party  to any  agreement
granting any  registration  rights with respect to any of its  securities to any
person which  conflicts  with the Company's  obligations  hereunder or gives any
other party the right to include any  securities in any  Registration  Statement
filed  pursuant  hereto,  except  for such  rights  and  conflicts  as have been
irrevocably  waived.  Without limiting the generality of the foregoing,  without
the written  consent of the holders of a majority in interest of the Registrable
Securities, the Company shall not grant to any person the right to request it to
register any of its  securities  under the  Securities  Act unless the rights so
granted  are  subject  in all  respect  to the prior  rights of the  holders  of
Registrable  Securities  set forth herein,  and are not otherwise in conflict or
inconsistent  with the provisions of this  Agreement.  The  restrictions  on the
Company's  rights  to grant  registration  rights  under  this  paragraph  shall
terminate on the date the Registration Statement to be filed pursuant to Section
2(a) is declared effective by the Commission.

(h) This Agreement,  the Securities Purchase Agreement, the Escrow Instructions,
dated as of a date  even  herewith  (the  "Escrow  Instructions"),  between  the
Company,  the Initial Investor and Cadwalader,  Wickersham & Taft, the Preferred
Shares and the Warrants constitute the entire agreement among the parties hereto
with respect to the subject matter hereof. There are no restrictions,  promises,
warranties  or  undertakings,  other than those set forth or referred to herein.
This Agreement, the Securities Purchase Agreement, the Escrow Instructions,  the
Certificate of Designation and the Warrants  supersede all prior  agreements and
undertakings among the parties hereto with respect to the subject matter hereof.

(i) Subject to the requirements of Section 8 hereof,  this Agreement shall inure
to the benefit of and be binding upon the  successors and assigns of each of the
parties  hereto.  (j) All  pronouns  and any  variations  thereof  refer  to the
masculine, feminine or neuter, singular or plural, as the context may require.

(k) The headings in this  Agreement are for  convenience  of reference  only and
shall not  limit or  otherwise  affect  the  meaning  thereof.  (l) The  Company
acknowledges  that any failure by the Company to perform its  obligations  under
Section 3, or any delay in such  performance  could result in direct  damages to
the  Investors and the Company  agrees that, in addition to any other  liability
the Company may have by reason of any such failure or delay,  the Company  shall
be liable for all direct damages caused by such failure or delay.

(m) This  Agreement may be executed in two or more  counterparts,  each of which
shall be deemed an original but all of which shall  constitute  one and the same
agreement.  A facsimile transmission of this signed Agreement shall be legal and
binding on all parties hereto.

                                             [SIGNATURE PAGE FOLLOWS.]




<PAGE>



                  In Witness Whereof,  the parties have caused this Agreement to
be duly executed and delivered as of the date first above written.

                                IFS International Holdings, Inc.



                                By:
                                    Name:
                                    Title:


                                The Shaar Fund Ltd.



             By:

                                    Name:  Samuel Levinson
                                    Title:  Managing Director