SUBSCRIPTION AGREEMENT
                                DCAP GROUP, INC.


         Subscription Agreement for the Purchase of Units consisting of
     Common Stock, Class A Warrants, Class B, Warrants and Class C Warrants

     The undersigned (the "Investor")  hereby subscribes for the number of units
("Units") set forth on page 13 hereof of DCAP Group, Inc. (the "Company"),  each
Unit  consisting  of (i) 45,453 shares of the  Company's  common stock  ("Common
Stock");  (ii)  15,151  Class A Common  Stock  purchase  warrants  (the "Class A
Warrants"),  each Warrant  entitling the holder thereof to purchase one share of
Common Stock at an exercise  price that is equal to $1.65;  (iii) 15,151 Class B
Common Stock purchase warrants (the "Class B Warrants"),  each Warrant entitling
the holder  thereof to purchase one share of Common  Stock at an exercise  price
that is equal to $2.06;  and (iv) 15,151 Class C Common Stock purchase  warrants
(the "Class C Warrants"),  each Warrant entitling the holder thereof to purchase
one share of Common Stock at an exercise price that is equal to $2.48. The Class
A  Warrants,  the Class B Warrants  and the Class C Warrants  shall  hereinafter
collectively  be referred to as the  "Warrants."  The Units are being offered in
connection with the Company's private placement (the "Offering") of a minimum of
$1,000,000  (the "Minimum  Offering") and a maximum of $2,000,000  (the "Maximum
Offering") of Units at a price of $50,000 per Unit.  The Minimum  Offering shall
be on a "best efforts,  all or none basis," and any  additional  Units up to the
Maximum Offering shall be offered on a "best efforts" basis.

     The number of shares of Common Stock included with a Unit was determined by
dividing the per Unit purchase price of $50,000 by $1.10.  For each three shares
of Common Stock included

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<PAGE>



within a Unit, one Class A Warrant,  one Class B Warrant and one Class C Warrant
were also included.

     At the  time any of the  Common  Stock  issued  to the  Investor  initially
becomes publicly  saleable  (either  pursuant to Rule 144 promulgated  under the
Securities  Act of 1933,  as  amended  (the  "Securities  Act"),  or  because  a
registration  statement  filed under the  Securities Act covering such shares is
declared  effective by the Securities and Exchange  Commission (the "SEC")),  if
the  preceding 30 trading day average of the closing  prices of the Common Stock
(as  reported by the  Bulletin  Board,  The Nasdaq  Stock Market or a securities
exchange,  depending  upon where the  Company's  Common  Stock is then traded or
listed)  (the  "Later  Market  Value")  is less than  $1.65 per share (the "Base
Market Value"),  the Investor shall be entitled to receive  additional shares of
Common  Stock and  Warrants  as if the  Offering  had been  based upon the Later
Market  Value  (rounded up to the next whole cent) (but in no event more than an
additional 50% of the original shares of Common Stock and Warrants issued).  The
right to  receive  additional  Common  Stock  and  Warrants  shall not be deemed
attached to the purchased Common Stock and Warrants, and shall not be considered
transferred to any person who acquires such  originally  purchased  Common Stock
and Warrants.

     At any time during the two year period  following the first  anniversary of
the final closing of the Offering (the "Final  Closing") (with respect to demand
registration  rights)  and  during  the four  year  period  following  the first
anniversary  of the  Final  Closing  (with  respect  to  piggyback  registration
rights),  the  Investor  will be  entitled  to  exercise  demand  and  piggyback
registration  rights pursuant to the terms of a Registration Rights Agreement to
be executed simultaneously herewith.

                                        2


<PAGE>



     In connection with the Offering,  the placement agent,  Aegis Capital Corp.
(the "Placement Agent"), shall be entitled to receive a commission of 10% of the
gross proceeds derived from the sale of Units and warrants to purchase up to 10%
of the aggregate  amount of Units sold in the Offering (the  "Placement  Agent's
Warrants"),  except that the Placement  Agent shall not be entitled to receive a
commission or any Placement  Agent's Warrants in connection with a sale of Units
to Eagle  Insurance  Company (a  principal  stockholder  of the  Company)  or an
affiliate  thereof.  The  Company  will pay all  costs and  expenses  reasonably
incurred by the Placement  Agent in connection  with the Offering up to $35,000,
including all legal fees and  disbursements.  In addition,  the Placement  Agent
will perform consulting  services to the Company for a period of two years for a
aggregate  fee of  $50,000  which is  payable  upon  the  first  closing  of the
Offering.

     The undersigned agrees to pay an aggregate of $50,000 as a subscription for
each Unit  being  purchased  hereunder.  The  entire  purchase  price is due and
payable upon the execution of this Subscription Agreement,  and shall be payable
by wire transfer or check subject to  collection,  to the order of  "Continental
Stock Transfer & Trust Company, as Agent for DCAP Group, Inc." The wire transfer
instructions are as follows:

<TABLE>
<CAPTION>

        <S>                                     <C>
         Name:                      Continental Stock Transfer & Trust Company, as Escrow Agent for
                                    DCAP Group, Inc.
         Account Number:            777581744
         Bank:                      Chase Bank,  52 Broadway, New York, NY
         ABA Number:                021 000 021

</TABLE>

     The  Company  and the  Placement  Agent shall each have the right to reject
this subscription in whole or in part.

                                        3


<PAGE>



     The undersigned  acknowledges  that the Unit(s) being  purchased  hereunder
have not been registered under the Securities Act, or the securities laws of any
state, that, absent an exemption from registration  contained in those laws, the
Unit(s) and the securities  underlying  the Unit(s) would require  registration,
and  that  the  Company's  reliance  upon  such  exemption  is  based  upon  the
undersigned's  representations,  warranties,  and  agreements  contained in this
Subscription  Agreement,  the Registration  Rights Agreement between the Company
and the  undersigned and the  accompanying  Confidential  Prospective  Purchaser
Questionnaire (collectively, the "Subscription Documents").

          1. The undersigned represents, warrants, and agrees as follows:

          a. The  undersigned  agrees that this  Subscription  Agreement  is and
          shall  be  irrevocable.

          b.  The  undersigned  has  carefully  read  the  Confidential  Private
          Offering  Memorandum,  dated April 5, 1999, and exhibits  thereto (the
          "Memorandum"),  and  the  Subscription  Documents  (collectively,  the
          "Offering Materials"),  all of which the undersigned  acknowledges has
          been provided to the  undersigned.  The undersigned has been given the
          opportunity to ask questions of, and receive answers from, the Company
          concerning  the terms and conditions of this Offering and the Offering
          Materials and to obtain such additional information, to the extent the
          Company   possesses  such   information  or  can  acquire  it  without
          unreasonable  effort or expense,  necessary  to verify the accuracy of
          same as the  undersigned  reasonably  desires in order to evaluate the
          investment.  The undersigned  understands the Offering Materials,  and
          the  undersigned  has had the  opportunity  to discuss  any  questions
          regarding  any of the  Offering  Materials  with his  counsel or other
          advisor.  Notwithstanding  the foregoing,  the only  information  upon
          which the undersigned has

                                        4


<PAGE>



          relied is that set forth in the Offering  Materials.  The  undersigned
          has received no  representations  or warranties from the Company,  its
          employees,  agents or  attorneys  in making this  investment  decision
          other than as set forth in the  Offering  Materials.  The  undersigned
          does not desire to receive any further information.

          c. The  undersigned  is aware that the  purchase  of the  Unit(s) is a
          speculative  investment involving a high degree of risk, that there is
          no  guarantee  that the  undersigned  will  realize any gain from this
          investment,  and that the  undersigned  could lose the total amount of
          this investment. The undersigned has specifically reviewed the section
          in the Memorandum entitled "Risk Factors."

          d. The  undersigned  understands  that no federal or state  agency has
          made any  finding or  determination  regarding  the  fairness  of this
          Offering, or any recommendation or endorsement of this Offering.

          e. The undersigned is purchasing the Unit(s) for the undersigned's own
          account, with the intention of holding the Unit(s) and with no present
          intention  of  dividing  or  allowing  others to  participate  in this
          investment  or of reselling or  otherwise  participating,  directly or
          indirectly,  in a distribution of the Unit(s),  and shall not make any
          sale,  transfer,  or pledge  thereof  without  registration  under the
          Securities  Act and any  applicable  securities  laws of any  state or
          unless an exemption from registration is available under those laws.

          f. The undersigned  represents that he is an "accredited investor," as
          such term is defined in Rule 501 of Regulation D promulgated under the
          Securities  Act.  The  Investor  is  referred  to the  section  of the
          Memorandum  entitled "Plan of Offering - Investor  Suitability"  for a
          full explanation of such term.

                                        5


<PAGE>



          g. The undersigned represents that, if an individual,  he has adequate
          means of  providing  for his or her  current  needs and  personal  and
          family  contingencies and has no need for liquidity in this investment
          in the  Unit(s).  The  undersigned  has no  reason to  anticipate  any
          material  change in his or her personal  financial  condition  for the
          foreseeable future.

          h. The  undersigned is  financially  able to bear the economic risk of
          this   investment,   including   the   ability  to  hold  the  Unit(s)
          indefinitely,  or to afford a complete  loss of his  investment in the
          Unit(s).

          i.  The  undersigned   represents  that  the   undersigned's   overall
          commitment  to  investments  which are not readily  marketable  is not
          disproportionate to the undersigned's net worth, and the undersigned's
          investment  in the Unit(s) will not cause such overall  commitment  to
          become excessive. The undersigned understands that the statutory basis
          on which the  Unit(s)  are being  sold to the  undersigned  and others
          would not be available if the undersigned's  present intention were to
          hold the  Unit(s)  for a fixed  period  or until the  occurrence  of a
          certain event. The undersigned  realizes that, in the view of the SEC,
          a  purchase  now with a  present  intent  to  resell  by  reason  of a
          foreseeable  specific  contingency  or any  anticipated  change in the
          market  value,  or in the  condition  of the  Company,  or that of the
          industry  in which  the  business  of the  Company  is  engaged  or in
          connection with a contemplated liquidation,  or settlement of any loan
          obtained by the undersigned  for the  acquisition of the Unit(s),  and
          for which such  Unit(s) may be pledged as security or as  donations to
          religious  or  charitable  institutions  for the purpose of securing a
          deduction  on an  income  tax  return,  would,  in fact,  represent  a
          purchase   with  an  intent   inconsistent   with  the   undersigned's
          representations  to the  Company,  and the SEC would then  regard such
          sale as a sale for which the

                                        6


<PAGE>



          exemption from registration is not available. The undersigned will not
          pledge,  transfer  or  assign  this  Subscription  Agreement.

          j.  The  undersigned  represents  that  the  funds  provided  for this
          investment are either separate property of the undersigned,  community
          property over which the undersigned  has the right of control,  or are
          otherwise  funds as to which  the  undersigned  has the sole  right of
          management.  The  undersigned  is  purchasing  the  Unit(s)  with  the
          undersigned's funds and not with the funds of any other person,  firm,
          or entity and is acquiring the Unit(s) for the undersigned's  account.
          No person other than the  undersigned  has any beneficial  interest in
          the Unit(s) being purchased hereunder.

          k. FOR PARTNERSHIPS,  CORPORATIONS, TRUSTS, OR OTHER ENTITIES ONLY: If
          the undersigned is a partnership,  corporation, trust or other entity,
          (i) the  undersigned  has enclosed  with this  Subscription  Agreement
          appropriate evidence of the authority of the individual executing this
          Subscription  Agreement  to act on its  behalf  (e.g.,  if a trust,  a
          certified copy of the trust agreement;  if a corporation,  a certified
          corporate resolution authorizing the signature and a certified copy of
          the articles of incorporation;  or if a partnership,  a certified copy
          of the partnership  agreement),  (ii) the  undersigned  represents and
          warrants  that it was not  organized or  reorganized  for the specific
          purpose of acquiring the Unit(s),  (iii) the  undersigned has the full
          power of such entity to make the  representations  and warranties made
          herein on its behalf, and (iv) this investment in the Company has been
          affirmatively  authorized, if required, by the governing board of such
          entity and is not prohibited by the governing documents of the entity.

                                        7


<PAGE>



          l. The address shown under the  undersigned's  signature at the end of
          this Subscription  Agreement is the undersigned's  principal residence
          if he or she is an individual, or its principal business address if it
          is a corporation or other entity.

          m. The  undersigned has such knowledge and experience in financial and
          business  matters as to be capable of evaluating  the merits and risks
          of an investment in the Units.

          n. The undersigned  acknowledges  that the certificates for the Common
          Stock underlying the Units,  which the undersigned will receive,  will
          contain a legend substantially as follows:

                  THE SECURITIES  WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE
                  NOT BEEN  REGISTERED  UNDER  THE  SECURITIES  ACT OF 1933,  AS
                  AMENDED (THE "ACT").  THE  SECURITIES  HAVE BEEN  ACQUIRED FOR
                  INVESTMENT  PURPOSES ONLY AND NOT WITH A VIEW TO  DISTRIBUTION
                  OR RESALE, AND MAY NOT BE SOLD, TRANSFERRED, MADE SUBJECT TO A
                  SECURITY INTEREST, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
                  OF UNLESS AND UNTIL REGISTERED UNDER THE ACT, OR AN OPINION OF
                  COUNSEL FOR THE COMPANY IS RECEIVED THAT  REGISTRATION  IS NOT
                  REQUIRED UNDER SUCH ACT. THE SECURITIES  WHICH ARE REPRESENTED
                  BY  THIS  CERTIFICATE  ARE  SUBJECT  TO  THE  PROVISIONS  OF A
                  SUBSCRIPTION AGREEMENT, DATED JUNE 2, 1999, BETWEEN THE HOLDER
                  AND THE  COMPANY,  A COPY OF WHICH IS AVAILABLE AT THE OFFICES
                  OF THE COMPANY.

          The undersigned  further  acknowledges that a stop transfer order will
          be placed upon the  certificates for the securities in accordance with
          the Securities  Act. The  undersigned  further  acknowledges  that the
          Company is under no obligation to aid the undersigned in obtaining any
          exemption from registration requirements.

     2. The undersigned  expressly  acknowledges  and agrees that the Company is
relying upon the  undersigned's  representations  contained in the  Subscription
Documents.

                                        8


<PAGE>



     3. The undersigned  irrevocably appoints and authorizes the Placement Agent
to take such action as agent and  attorney-in-fact on his behalf and to exercise
such  power and  authority  as said  agent and  attorney-in-fact  would  have if
personally  acting,  with  respect to all  matters  arising in  connection  with
securing the Company's  obligations  under the Registration  Rights Agreement of
even date hereof, with full power and authority to execute,  deliver and enforce
for  and  on  behalf  of the  undersigned  all  such  agreements,  consents  and
documents.  Neither  the  Placement  Agent nor any of its  directors,  officers,
agents  or  employees  shall be  liable  for any  action  taken or not  taken in
connection with the authority  granted  pursuant to the preceding  sentence,  or
incur any liability by acting in reliance upon any notice, consent, certificate,
statement or other writing believed by it or them to be genuine. The undersigned
shall indemnify the Placement Agent against any cost, expense (including counsel
fees and disbursements),  claim,  demand,  action, loss or liability (except any
thereof  arising  out of the  gross  negligence  or  willful  misconduct  of the
Placement Agent) that Placement Agent may suffer or incur in connection with any
action  or  inaction  pursuant  to  the  foregoing   appointment  as  agent  and
attorney-in-fact.

     4. The  undersigned  agrees  that he will not sell or  transfer  the Common
Stock or Warrants, or the shares of Common Stock underlying the Warrants,  for a
period of twelve months from the first closing date of the Offering  without the
prior written consent of the Placement  Agent.  The undersigned also agrees that
he will be subject  to any  lock-up  imposed  by NASDAQ or any other  regulatory
agency.

     5. The  Company  has been  duly and  validly  incorporated  and is  validly
existing and in good  standing as a  corporation  under the laws of the State of
Delaware.  The Company has all requisite power and authority,  and all necessary
authorizations, approvals and orders required as

                                        9


<PAGE>



of the date hereof to own its  properties  and conduct its business as described
in the Memorandum and to enter into this Subscription  Agreement and to be bound
by the provisions and conditions hereof.

     6. Except as otherwise specifically provided for hereunder,  no party shall
be  deemed  to have  waived  any of his  rights  hereunder  or under  any  other
agreement,  instrument  or  papers  signed by any of them  with  respect  to the
subject  matter  hereof unless such waiver is in writing and signed by the party
waiving said right. Except as otherwise specifically provided for hereunder,  no
delay or  omission  by any party in  exercising  any right  with  respect to the
subject  matter  hereof  shall  operate as a waiver of such right or of any such
other  right.  A waiver on any one occasion  with respect to the subject  matter
hereof  shall not be construed as a bar to, or waiver of, any right or remedy on
any future occasion.  All rights and remedies with respect to the subject matter
hereof,  whether  evidenced  hereby or by any other  agreement,  instrument,  or
paper, will be cumulative, and may be exercised separately or concurrently.

     7. The parties have not made any representations or warranties with respect
to the  subject  matter  hereof  not set  forth  herein,  and this  Subscription
Agreement,  together  with any  instruments  executed  simultaneously  herewith,
constitutes the entire agreement between them with respect to the subject matter
hereof.  All  understandings  and agreements  heretofore had between the parties
with  respect to the  subject  matter  hereof  are  merged in this  Subscription
Agreement and any such instruments executed simultaneously herewith, which alone
fully and completely expresses their agreement.

                                       10


<PAGE>



     8. This  Subscription  Agreement  may not be changed,  modified,  extended,
terminated or discharged orally,  but only by an agreement in writing,  which is
signed by all of the parties to this Subscription Agreement.

     9. The parties agree to execute any and all such other further  instruments
and documents,  and to take any and all such further actions reasonably required
to effectuate this Subscription Agreement and the intent and purposes hereof.

     10. This  Subscription  Agreement  shall be governed  by and  construed  in
accordance  with the laws of the  State of New  York,  excluding  choice  of law
principles  thereof,  and the undersigned hereby consents to the jurisdiction of
the  courts  of the  State of New York and the  United  States  District  Courts
situated therein, without giving effect to the actual domiciles of the parties.

     11. Any reference in this  Subscription  Agreement to the male gender shall
be deemed to refer to the feminine or neuter where applicable.

     12. This  Subscription  Agreement may be executed in  counterparts  each of
which  shall be  deemed  an  original  and all of  which  taken  together  shall
constitute one and the same instrument.

     13. Upon the execution and delivery of this  Subscription  Agreement by the
Investor,  this Subscription  Agreement shall become a binging obligation of the
Investor with respect to the purchase of the Units as herein provided.

     14.  Any  notice or other  communication  given  hereunder  shall be deemed
sufficient  if in writing and hand  delivered or sent by registered or certified
mail, return receipt requested, or overnight mail or delivery,  addressed to the
Company at 90 Merrick Avenue, East

                                       11


<PAGE>



Meadow, New York 11554 Attention:  Chairman of the Board, and to the Investor at
his address  indicated on the  signature  page of this  Subscription  Agreement.
Notices  shall be  deemed  to have  been  given on the date of  mailing,  except
notices  of change of  address,  which  shall be deemed to have been  given when
received.

                                       12


<PAGE>





                     ALL SUBSCRIBERS MUST COMPLETE THIS PAGE

     IN  WITNESS  WHEREOF,   the  undersigned  has  executed  this  Subscription
Agreement on this ___ day of ________ , 1999.

                        x ($50,000 Per Unit) = $
----------------------                         -------------------------------
  Units Subscribed


1.  o   Individual                                8. o  As a Custodian for
2.  o   Joint Tenants with Right of Survivorship        ____________________
3.  o   Community Property                              Under the Uniform Gift
4.  o   Tenants in Common                               to Minors Act of the
5.  o   Corporation/Partnership                         State.
6.  o   IRA of
               --------------------------------   9. o  Married with Separate
7.  o   Trust                                           Property
                                                 10. o  Keogh

        Date Opened__________________





                                       13


<PAGE>



                 EXECUTION BY SUBSCRIBER WHO IS A NATURAL PERSON

--------------------------------------------------------------------------------
                     Exact Name in Which Title is to be Held

--------------------------------------------------------------------------------
                                    Signature

--------------------------------------------------------------------------------
                               Name (Please Print)

--------------------------------------------------------------------------------
                          Residence: Number and Street

--------------------------------------------------------------------------------
City                            State                               Zip Code

--------------------------------------------------------------------------------
                             Social Security Number

Accepted this 2nd day of June 1999, on behalf of:

                                         DCAP GROUP, INC.

                                         By:_____________________________






                                       14


<PAGE>


                  EXECUTION BY SUBSCRIBER WHO IS A CORPORATION,
                            PARTNERSHIP, TRUST, ETC.


--------------------------------------------------------------------------------
                     Exact Name in Which Title is to be Held

--------------------------------------------------------------------------------
                                    Signature

--------------------------------------------------------------------------------
                               Name (Please Print)

--------------------------------------------------------------------------------
                               Title of Signatory

--------------------------------------------------------------------------------
                       Business Address: Number and Street

--------------------------------------------------------------------------------
City                              State                               Zip Code

--------------------------------------------------------------------------------
                          Employer or NASD affiliation

--------------------------------------------------------------------------------
                            Tax Identification Number

Accepted this 2nd day of June, 1999, on behalf of:

                                          DCAP GROUP, INC.

                                          By:_____________________________



                                       15


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