EXECUTION COPY


                              EMPLOYMENT AGREEMENT


         THIS  AGREEMENT,  made and entered  into as of the 17th day of January,
1996, by and among INTERNATIONAL DISPENSING CORPORATION,  a Delaware corporation
with offices at 342 Madison  Avenue,  Suite 1034,  New York, New York 10173 (the
"Company"), and JON SILVERMAN, who resides at 13 Longledge Drive, Rye Brook, New
York 10573 (the "the Executive").


                              W I T N E S S E T H :
                              ---------------------


         WHEREAS, the Company desires to retain the services of the Executive as
an employee of the Company; and

         WHEREAS,  the  Executive  is  desirous  of  becoming an employee of the
Company on the conditions hereinafter provided;

         NOW  THEREFORE,  in  consideration  of the premises,  and of the mutual
covenants herein contained, the parties hereto agree as follows:

         1.    Employment

         The Company hereby agrees to employ the Executive during the Employment
Period, as that term is defined in Section 2, and the Executive agrees to accept
such employment on the terms and conditions  hereinafter  set forth.  During the
Employment  Period, the Executive also shall be elected,  effective  immediately
upon the commencement of the Employment  Period, to and shall serve on the Board
of Directors.

         2.    Employment Period

         The  term of the  Executive's  employment  hereunder  (the  "Employment
Period") shall commence on the date the Company's Registration Statement on Form
SB-2 (No.  333-7915)  is  declared  effective  by the  Securities  and  Exchange
Commission  ("Effective  Date") and shall continue until the earlier to occur of
December 31, 1999 or the Termination Date (as defined).

         3.    Duties and Responsibilities
               During the Employment Period

         During the Employment  Period the Executive shall serve as the Chairman
of the Board of Directors,  President and Chief Executive Officer ("CEO") of the
Company.  The  Executive  shall not be required to perform his duties during the
Employment Period in


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any location other than New York, New York, other than incidental travel.

         As President  and CEO,  the  Executive  shall have  general  management
authority  over the  day-to-day  operations  of the  Company  and in  connection
therewith perform such executive duties and  responsibilities as may be assigned
to him from time to time by or under the  authority of the Board of Directors of
the Company,  consistent with his positions as designated in this Section 3, and
in the absence of such assignment,  such duties customary to such offices as are
necessary to the  successful  operations of the Company.  During the  Employment
Period, the Executive agrees that he will devote a majority of his business time
to the business of the Company, to work with other employees of the Company in a
competent and professional  manner and generally to promote the interests of the
Company and its business.  The Executive may serve on the boards of directors of
other corporations and engage in other business and charitable activities.

         4.    Basic Salary

         As compensation for services to be rendered by the Executive  hereunder
during the  Employment  Period,  the Company hereby agrees to pay or cause to be
paid to the  Executive,  and the  Executive  agrees to  accept  as  compensation
hereunder,  a base fixed  salary  ("Basic  Salary") at the rate of $180,000  per
annum payable in substantially equal monthly installments in arrears on the date
regular payroll is paid to the employees of the Company. The Basic Salary may be
increased at the discretion of the Board of Directors.

         5.    Benefits

         Executive  shall be entitled to any benefits which become  available to
the  Executive  along with other  employees of the Company  according to his and
their  respective  positions under any stock option plan or arrangement,  bonus,
deferred   compensation,   incentive  compensation  or  profit-sharing  plan  or
arrangement,  group life insurance plan,  hospitalization plan, dental insurance
plan,  disability  insurance plan, medical services plan, and any other employee
benefit plan or arrangement  now or hereafter  provided by the Company to any of
its employees during the Employment Period (the "Benefits"). The Executive shall
be  entitled to four (4) weeks paid  vacation  per year.  During the  Employment
Period,  the  Executive may  participate  in all Benefits in effect from time to
time as may be made available to the officers of the Company,  whether currently
in effect or adopted  hereafter during the Employment  Period, to the extent the
Executive  meets  the  eligibility  requirements  specified  in any  plan  of or
relating to a Benefit.


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         6.    Life Insurance

         If the Executive is insurable,  the Company shall  purchase a term life
insurance  policy on the life of the  Executive in the face amount of $1,000,000
for a term  commencing  as of the date of the purchase of the policy and ending,
subject to paragraph 9 hereof,  on the last day of the  Employment  Period.  The
beneficiary  of such policy shall be  designated by the  Executive.  The Company
shall maintain such insurance in full force and effect and shall not cancel such
policy or take or omit to take any action which might result in the  termination
or  cancellation  thereof.  The Company shall pay all premiums on such policy as
they  become  due and shall  give due proof of said  payments  to the  Executive
within five (5) days after its due date on each  premium.  If any premium is not
paid within five (5) days after its due date, the Executive may pay or cause the
premiums to be paid, and he shall be entitled to reimbursement from the Company.
The Executive agrees to submit to such medical examinations as may be reasonably
required by any insurance company with respect to such policy.

         7.    Expenses and Accommodations

         During the  Employment  Period the Company  shall pay the Executive for
any reasonable documented travel, hotel, meals,  entertainment,  telephone,  and
other  expenses  incurred by him in  connection  with his  rendering of services
hereunder.

         8.    Definitions Relating to Termination

         8.1   Disability

         The term  "Disability"  shall mean any physical or mental  condition of
the Executive  which,  in the  reasonable  discretion of the Board of Directors,
after  consultation  with the  Executive's  physician,  materially  impairs  the
Executive's  ability to render the services to be performed by him  hereunder if
during the  Employment  Period,  for a period of 90  consecutive  days or for at
least 120 days in any  consecutive  180 day period.  The Company  shall give the
Executive at least 30 days advanced  written  notice of the  termination  of his
employment hereunder for Disability.

         8.2   Cause

         (a) The term "Cause"  shall mean the good faith finding by the Board of
Directors of the Company upon  resolution  adopted by it of the existence of any
one of the following:

          (i) The  Executive's  failure or refusal to perform  specific  written
          directives  consistent  with his  duties and  responsibilities  as set
          forth in  Section 3 hereof,  which  lack of  performance  is not cured
          within 30 days after written  notice thereof or 60 days if at the 15th
          day  after  such  written  notice  and  thereafter  the  Executive  is
          diligently attempting to cure.


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               (ii) Excessive use of alcohol or illegal drugs,  interfering with
               performance of the Executive's  obligations under this Agreement,
               which  interference  is not cured  within 30 days  after  written
               notice  thereof or 60 days if at the 30th day after such  written
               notice and thereafter the  Executive's  diligently  attempting to
               cure;

               (iii)  Conviction  of a felony  or of any crime  involving  moral
               turpitude or fraud;

               (iv) Any  material  breach (not covered by any of the clauses (i)
               through (iii) hereof) of any of the provisions of this Agreement,
               if such breach is not cured within 30 days after  written  notice
               thereof to the Executive by the Board of Directors.

         The Board of  Directors  shall  notify the  Executive in writing of its
decision to terminate his  employment for Cause which notice shall set forth the
Termination Date (which date shall be no sooner than the date of such notice and
shall be after the lapse of all applicable cure periods) and be accompanied by a
copy of the Board of Director's resolution as provided by this Section 8.2.

         (b) If the  Executive  leaves the employ of the Company  other than for
Good Reason (as  defined),  the  cessation  of  employment  will be treated as a
termination  for Cause.  The  Executive  shall give the Company at least 30 days
advanced  written  notice of his  decision  to leave the employ with the Company
other than for Good Reason.

         8.3   Without Cause

         The term  "Without  Cause" shall mean a  determination  of the Board of
Directors to terminate  the  Executive  for any reason other than  Disability or
Cause.  The Company  shall give the  Executive at least six (6) months  advanced
written  notice of the  termination of his  employment  hereunder  Without Cause
which notice shall set forth the Termination Date.

         8.4   Good Reason

         The term "Good Reason" shall mean (i) the sale by the Company of all or
substantially  all of its  assets,  (ii) a  "Change  in  Control"  as  hereafter
defined,  (iii) any removal of the Executive  during the Employment  Period from
his  positions as the  Chairman of the Board of  Directors,  President  and CEO,
except  in  connection  with   termination  or  suspension  of  the  Executive's
employment for death, Disability or Cause, or (iv) a material


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reduction or change in the Executive's duties and  responsibilities  as Chairman
of the Board of  Directors,  President  and CEO.  The  Executive  shall give the
Company at least 30 days  advanced  written  notice of his decision to terminate
his  employment  hereunder  for "Good  Reasons"  which notice shall  specify the
reasons for his decision and the Termination Date relating thereto.

         8.5   Change in Control

               A "Change of Control" shall be deemed to have occurred if:

               (a) any "person"  (as defined in Sections  13(d) and 14(d) of the
Securities  Exchange Act of 1994, as amended (the "Exchange  Act") is or becomes
the  "beneficial  owner"  (as  defined in Rule 13d-3  under the  Exchange  Act),
directly or indirectly,  of securities of the Company representing fifty percent
(50%) or more of the combined  voting power of the  Company's  then  outstanding
securities;

               (b) there shall cease to be a majority of the Board  comprised as
follows:  individuals who on the Effective Date constitute the Board and any new
director(s)  whose  election  by the Board or  nomination  for  election  by the
Company's  shareholders  was  approved by a vote of a majority of the  directors
then still in office who either were  directors or whose  election or nomination
for election was previously so approved; or

               (c)  the   shareholders  of  the  Company  approve  a  merger  or
consolidation of the Company with any other corporation,  other than a merger or
consolidation  which  would  result  in the  voting  securities  of the  Company
outstanding   immediately  prior  thereto   continuing  to  represent  at  least
sixty-five  percent (65%) of the combined voting power of the voting  securities
of the  Company or such  surviving  entity  outstanding  immediately  after such
merger or  consolidation,  or the  shareholders of the Company approve a plan of
complete  liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all the Company's assets.

         8.6   Termination Date. The term "Termination Date" shall mean:

               (a) in the case of the termination of the Executive's  employment
by the Company for Disability, the date specified in the notice delivered by the
Company  pursuant  to Section  8.1 hereof  which date shall be at thirty 30 days
after the date of such notice;

               (b) in the case of the termination of the Executive's  employment
by the  Company  for  Cause,  the later of (i) the date the  Board of  Directors
provides  the  Executive  with a written copy of the  resolution  adopted by the
Board of Directors as


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<PAGE>

required in Section  8.2(a) or (ii) the date specified by the Board of Directors
in a written notice required by Section 8.2(a);

               (c) in the case of the Executive's terminating his employment for
any reason other than Good Reason, the date specified in the notice delivered by
the Executive  pursuant to paragraph  8.2(b) hereof which date shall be at least
30 days after the date of such notice.

               (d) in the case of the termination of the Executive's  employment
by the Company Without Cause,  the date specified in the notice delivered by the
Company  pursuant  to Section  8.3  hereof  which date shall be at least six (6)
months after the date of such notice;

               (e) in the case of the termination by Executive of his employment
with the Company for Good Reason,  the date specified in the notice delivered by
the  Executive  pursuant to Section  8.4 hereof  which date shall be at least 30
days after the date of such notice; or

               (f) in the  case of the  Executive's  death,  the last day of the
month after the month in which the Executive dies.

         9.    Effect of Termination on
               Compensation and Incentive Bonus

               (a) If the Executive's  employment with the Company is terminated
for any  reason,  the  Executive  shall be paid his  Basic  Salary  through  the
Termination Date.

                           In addition, if Executive's employment is terminated
by the Company for Disability or Without Cause or if Executive leaves the employ
of the Company  for Good  Reason he shall be entitled to an amount  equal to the
greater of (i) one year's Basic Salary at the highest rate paid to the Executive
during the Employment  Period or (ii) the Basic Salary that would have been paid
to the Executive had the Employment Period ended on December 31, 1999 calculated
at the highest rate paid to the  Executive  during the  Employment  Period.  The
amount due under  this  Section  9(a) shall be paid  within ten (10) days of the
Termination Date.

               (b) If the  Executive  is  insurable  and  if his  employment  is
terminated  by the Company for  Disability  or Without Cause or if the Executive
leaves the employ of the Company for Good Reason,  the Company shall continue to
provide the  Executive  with the life  insurance  described  in Section 6 hereof
until the later of December 31, 1999 or the first  anniversary of the applicable
Termination Date.

               (c) Upon the  termination of his employment  with the Company for
any reason,  the Executive shall be entitled to such Benefits under any plans or
arrangements  maintained  by  the  Company  for  any  of  its  employees  on the
Termination Date in which Executive


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was  participating  on the  Termination  Date in  accordance  with the terms and
conditions of such plans or arrangements.

         10.   Indemnification

         The Company  shall  indemnify  and hold  harmless the  Executive to the
fullest extent permitted by the General  Corporation Law of Delaware as the same
currently exists or may hereafter be amended. Expenses incurred by the Executive
in defending a civil or criminal action, suit or proceeding brought by any party
other than the Company  against the  Executive at any time when he has ceased to
serve as such,  in respect to the  Executive's  acts or actions in his  official
capacity with the Company,  shall be advanced by the Company  promptly after the
Executive has delivered to the Company a written  request  therefor and prior to
final  disposition  of the  action.  The  indemnification  and  advancements  of
expenses  provided by this  Section  shall not be deemed  exclusive of any other
rights to which the Executive may be entitled under any other by-law, agreement,
vote of stockholders or disinterested  directors, or otherwise,  and shall inure
to the benefit of the heirs,  executors and  administrators  of the Executive to
the fullest extent permitted by General  Corporation Law of Delaware as the same
currently exists or may hereinafter be amended.

         11.   Entire Agreement

         This Agreement  constitutes the entire  agreement of the parties hereto
with respect to the  Executive's  consultancy  to and employment by the Company,
and all prior agreements and  arrangements are hereby  superseded and terminated
with effect from and after the date hereof.  The clause headings used herein are
for  convenience of reference only, and shall not define or limit the provisions
of this Agreement.

         12.   Exercise of Rights

         No  failure  by  either  party  hereto  to  exercise,  and no  delay in
exercising, any right hereunder shall operate as a waiver thereof, nor shall any
single or partial  exercise of any right  hereunder by either party preclude any
other or future  exercise  of that right or any other  right  hereunder  by that
party.

         13.   Validity of Provisions

         In case any one or more of the provisions of this  Agreement  should be
invalid,  illegal or  unenforceable  in any respect,  the validity,  legality or
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.

         14.   No Assignment

         This Agreement shall not be assignable,  in whole or in part, by either
party, except that the Company may assign this


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Agreement to and it shall be binding upon any person, firm or company with which
the  Company  may be  merged  or  consolidated,  or  which  may  acquire  all or
substantially  all of the assets of the  Company.  In the event of the merger or
liquidation of the Company into another  corporate  entity,  whether  foreign or
domestic, the obligations of the Company hereunder to the Executive shall remain
in full force as to such successor  entity and no waiver on the Executive's part
shall be deemed made in any respect.

         15.   Amendment

         This Agreement may not be amended,  terminated or superseded  except by
an agreement in writing between the Company and the Executive.

         16.   Execution of Agreement

         This  Agreement  may be executed in two or more  counterparts,  each of
which  shall be deemed  an  original  hereof,  and all of which  together  shall
constitute  one and  the  same  document.  This  document  may be  executed  and
thereafter transmitted by facsimile and the return facsimile shall constitute an
original.

         17.   Notices

         All  notices  hereunder  shall be given in  writing  by  registered  or
certified mail,  postage  prepaid,  return receipt  requested,  addressed to the
parties at the following respective  addresses,  or at such other address as may
from time to time be designated by either party to the other hereunder:

To the Executive:              Jon Silverman
                               13 Longledge Drive
                               Rye Brook, NY 10573
                               Telecopier:              (914) 939-7139

With a copy to:                Lowenthal, Landau, Fischer & Bring, P.C.
                               250 Park Avenue
                               Suite 1000
                               New York, NY 10177
                               Attention:               Martin R. Bring, Esq.
                               Telecopier:              (212) 986-0604

To the Company:                International Dispensing Corporation
                               342 Madison Avenue
                               Suite 1034
                               New York, NY 10173
                               Attention:              Joseph Koster
                                                       Executive Vice President
                               Telecopier:             (212) 682-4720


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<PAGE>


With a copy to:                Kramer, Levin, Naftalis
                                 & Frankel
                               919 Third Avenue
                               New York, NY 10022
                               Attention:               Scott S. Rosenblum, Esq.
                               Telecopier:              (212) 688-2119

         18.   Governing Law

         This Agreement  shall be governed by, and construed in accordance  with
the  substantive  laws of the  State of New York and the  precedents  applicable
thereto, exclusive,however, of any provision thereof as to choice of law.


         IN WITNESS  WHEREOF,  the  Company  has  caused  this  Agreement  to be
executed on authority of the Board of Directors  and Jon  Silverman has hereunto
set his hand the day and year first above written.


                                         /s/ Jon Silverman
                                         -----------------
                                         JON SILVERMAN


                                         INTERNATIONAL DISPENSING CORPORATION



                                         By:  /s/ Joseph Koster
                                              -----------------
                                         Name:   Joseph Koster
                                         Title:  Executive Vice President


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