Document:

[CONFIDENTIAL TREATMENT REQUESTED. CERTAIN PORTIONS OF THIS AGREEMENT HAVE BEEN
REDACTED AND FILED SEPARATELY WITH THE COMMISSION.]

CNC Associates, Inc.
2900 Challenger Place
Oxnard, California 93030
Tel: 888-350-4262
Fax: 805-278-8501

Lease Number: 23281001

Full Legal Name and Address of Lessee
Innovative Card Technologies, Inc.
11601 Wilshire Blvd. Suite 2160
Los Angeles, CA  90025

Supplier of Equipment (Complete Address)
Productivity, Inc.
15150 25th Avenue North
Minneapolis, MN  55447

Equipment Leased
See Schedule A attached hereto and made part of.

Equipment Location if Different
Street Address: 1495 Steiger Lake Lane
City: Victoria
State: MN
Zip: 55386

Terms: See Schedule "B" Attached

LEASE RENTAL AGREEMENT
TERMS AND CONDITIONS OF LEASE

1. AGREEMENT TO LEASE. Lessee hereby agrees to lease from Lessor, and Lessor
hereby agrees to lease to Lessee for Lessee's business use, subject to the terms
and conditions on the face and reverse side of this Lease Rental Agreement
("Lease"), the personal property described above (which, with all replacement
parts, repairs, additions and accessories thereto, is hereinafter called
"Equipment"), or, if separately scheduled, on the schedule annexed hereto
(marked Schedule "A") and made part hereof. The parties agree that this Lease is
a "Finance Lease" as defined by Section 2A-l 04(g) of the Uniform Commercial
Code ("UCC"). Lessee acknowledges either (a) that Lessee has reviewed and
approved any written Supply Contract covering the Equipment purchased from the
Supplier thereof for lease, or (b) that Lessor has informed or advised Lessee,
in writing, either previously or by this Lease, of the following: (i) the
identity of the Supplier; (ii) that Lessee may have rights under the Supply
Contract; and (iii) that Lessee may contact the Supplier for a description of
any such rights Lessee may have under the Supply Contract.

2. SELECTION AND ORDERING OF EQUIPMENT. Lessee, at its sole option and
discretion, has selected the Equipment and the Supplier(s) thereof and hereby
requests Lessor to order the Equipment from the Supplier(s) named herein, to
arrange for delivery to Lessee at Lessee's expense and to pay for the Equipment
after its delivery to and acceptance by Lessee.

3. DISCLAIMER OF WARRANTIES AND CLAIMS/LIMITATION OF REMEDIES. There are no
warranties by or on behalf of Lessor, and Lessee acknowledges and agrees by
Lessee's initials below that: (a) Lessor, being neither the manufacturer, nor
the Supplier, nor a dealer in the Equipment, makes NO WARRANTY, express or
implied, to anyone as to design, condition, capacity, performance or any other
aspect of the Equipment, or its material or workmanship. Lessor also disclaims
any warranty of merchantability or fitness for use or purpose, whether arising
by operation of law or otherwise. Lessor further disclaims any liability for
loss, damage, or injury to Lessee or to any third parties as a result of any
latent or patent defects in the Equipment, whether arising from the laws of

<PAGE>

strict liability or otherwise. As to the Lessor, the Lessee leases the Equipment
"as-is". Lessee acknowledges that Lessor has not recommended the Supplier(s) of
the Equipment. Lessor shall have no obligation to install, maintain, or service
the Equipment, or cause the same to be performed by any third parties. If the
Equipment is unsatisfactory for any reason, Lessee shall make claim on account
thereof solely against the Supplier and/or the manufacturer of the Equipment,
and shall nevertheless payor continue to pay all rent due under the Lease;

(b) As long as Lessee is not deemed to be in default hereunder, Lessor assigns
to Lessee, solely for the purpose of prosecuting such a claim, all of the rights
which Lessor may have against the Supplier and/or the manufacturer of the
Equipment for breach of warranty or other representations concerning the
Equipment;

(c) Regardless of any cause, Lessee agrees not to assert any claim or
counterclaim whatsoever against Lessor for loss of anticipatory profits, or any
other indirect, special or consequential damages, nor shall Lessor be
responsible for any damages or costs which may be assessed against Lessee in any
action for infringement of any United States Letters Patent. Lessor makes no
warranty as to the treatment of this Lease for tax or accounting purposes;

(d) Neither the Supplier, nor any of its representatives, agents, employees, or
sales personnel are in any way to be construed as agents of Lessor;
consequently, neither the Supplier, nor any of its representatives, agents,
employees, or sales personnel are authorized to waive or alter any of the terms,
conditions, or provisions of this Lease, or to make any representation
whatsoever for or on behalf of Lessor;

(e) Lessee, by affixing Lessee's initials hereto, agrees and acknowledges that
Lessor and Lessee have specifically negotiated and agreed to the terms and
conditions of this Paragraph 3.

Lessee's initials: /s/ Alan Finklestein.

4. TERM AND RENT. THIS LEASE IS NON-CANCELLABLE FOR THE ORIGINAL TERM HEREOF,
EXCEPT AS HEREIN PROVIDED. The Lease shall commence when accepted by the Lessor
at its principal office in the County of Ventura, State of California and
continue until all of Lessee's obligations under the Lease have been performed
to the satisfaction of Lessor. Lessee agrees to pay the total rent equal to the
"Amount of Each Payment" multiplied by the number of payments specified in "No.
of Payments." Payments will be made in advance and periodically as specified in
"Terms" and will be considered to be made when received by Lessor at its
principal office in Ventura County, California. Lessee's obligation to pay the
rentals due hereunder is unconditional. Lessee shall not set-off, abate, deduct
any amount, or reduce any payment for any reason. The first payment shall be due
on the date Lessee accepts delivery of the Equipment, and subsequent payments
shall be due on the same day of each succeeding payment period throughout the
remaining term of the Lease. If, for any reason whatsoever, the Lease does not
commence, or the Lessor duly terminates the Lease, Lessor may retain the advance
rental(s) as liquidated damages.

5. SECURITY DEPOSIT. As security for the prompt, faithful and full payment of
the amounts due under this Lease, and Lessee's complete performance of all of
its obligations under this Lease, and any extension or renewal hereof, Lessee,
if so noted above, has deposited with Lessor the security amount set forth in
the section shown as "Security Deposit." In the event that any default shall be
made in the performance of any of Lessee's obligations to Lessor, whether under
this Lease or otherwise, Lessor shall have the right, but shall not be
obligated, to apply the Security Deposit to the curing of such default. Within
15 days after Lessor mails notice to Lessee that Lessor has applied any portion
of the Security Deposit to the curing of any default, Lessee shall restore said
Security Deposit to the full amount set forth hereinabove. On the expiration or
earlier termination or cancellation of this Lease, or any extension or renewal
hereof, Lessor will return to Lessee any then remaining balance of said Security
Deposit, without interest. The Security Deposit may be commingled with Lessor's
other funds.

Lessee's initials: /s/ Alan Finklestein.

6. EXPIRATION AND RENEWAL. Unless earlier terminated or cancelled by Lessor, and
provided that Lessee has performed all of its covenants hereunder to Lessor's
satisfaction, this Lease shall expire upon the expiration of the number of
months set forth in "Term of Lease." At the expiration of the Lease, Lessee
shall return the Equipment to Lessor in accordance with Paragraph 7 hereof. At
Lessor's option, this Lease may be continued on a month-to-month basis until 30
days after the Lessee returns the Equipment to Lessor. In the event the Lease is
so continued, Lessee shall pay to Lessor rentals in such periodic amounts as may
be agreed upon between Lessor and Lessee at that time.

7. SURRENDER. By this Lease, Lessee acquires no ownership rights in the
Equipment and has no option to purchase same. Upon the expiration or earlier
termination or cancellation of the Lease, or in the event of a default, as
defined under paragraph 18 herein under, Lessee, at its sole cost and expense,
shall return the Equipment in good repair, condition and working order, ordinary
wear and tear resulting from proper use thereof alone excepted, by delivering
it, packed and ready for shipment, to such place or carrier as Lessor may
designate.

<PAGE>

8. OWNERSHIPIPERSONAL PROPERTY. The Equipment is, and shall remain, the property
of Lessor, and, notwithstanding any trade-in or down payment made by Lessee or
on its behalf, Lessee shall have no right, title, or interest in and to the
Equipment, except as expressly set forth in this Lease. The Equipment shall
remain personal property even though installed in or attached to real property.
The Equipment is removable from and is not essential to the premises at which
the Equipment is located.

9. LOCATION OF EQUIPMENT. Lessee shall keep the Equipment at the location
specified hereinabove, or, if none is specified, at Lessee's address as shown
hereinabove, and it shall not be removed without Lessor's prior written consent.

10. CARE AND USE OF EQUIPMENT. Lessee, at its sole cost and expense, shall at
all times maintain and keep the Equipment in good repair, condition and working
order, shall use the Equipment lawfully and shall not alter the Equipment
without Lessor's prior written consent. If the manufacturer of the Equipment has
provided Lessee with a standard maintenance schedule, such schedule will
constitute minimum maintenance compliance, and, at Lessor's request, Lessee will
furnish Lessor with evidence of such compliance.

11. INSURANCE, LIENS, TAXES, FEES. Lessee shall provide and maintain insurance
against Joss, theft, damage, or destruction of the Equipment in an amount not
less than the full replacement value of the Equipment, with loss payable to
Lessor. Lessee shall also provide and maintain comprehensive genera] all-risk
liability insurance without limitation, insuring Lessor and Lessee, with a
severability of interest endorsement, or its equivalent, against any and all
loss or liability for all damages, either to persons or property, or otherwise,
which might result from or happen in connection with the condition, use, or
operation of the Equipment, with such limits and with an insurer satisfactory to
Lessor. Each policy shall expressly provide that said insurance as to Lessor and
its assigns shall not be invalidated by any act, omission, or neglect of Lessee
and cannot be cancelled without 30 days' prior written notice to Lessor. As to
each policy, Lessee shall furnish to Lessor a certificate of insurance from the
Insurer, which certificate shall evidence the insurance coverage required by
this Paragraph. Lessor shall have no obligation to ascertain the existence of or
provide any insurance coverage for the Equipment or for Lessee's benefit. In the
event that Lessor shall take real property as additional security to the Lease,
Lessee agrees to maintain such fire and other hazard insurance upon said
premises as Lessor shall direct, showing Lessor and/or its assigns as Loss Payee
thereunder. Lessee shall keep the Equipment free and clear of any and all
levies, liens and encumbrances. Lessee shall pay all charges and taxes (local,
state and federal) which may now or hereafter be imposed upon the ownership,
leasing, rental, sale, purchase, possession, or use of the Equipment, excluding,
however, all taxes on or measured by Lessor's net income. Lessee shall pay all
fees, other than those for credit investigation, incurred by Lessor on Lessee's
behalf. If Lessee fails to procure or maintain said insurance, or to pay any of
the said fees, charges, or taxes, Lessor shall have the right, but shall not be
obligated, to effect such insurance, or to pay such fees, charges, or taxes. In
that event, Lessor shall notify Lessee of such payment, and Lessee shall repay
to Lessor the cost thereof within 15 days after such notice is mailed to Lessee.

12. LOSS AND DAMAGE. Lessee shall at all times after signing this Lease bear the
entire risk of loss, theft, damage, or destruction of the Equipment from any
cause whatsoever, and no Joss, theft, damage, or destruction of the Equipment
shall relieve the Lessee of the obligation to pay rent or to comply with any
other obligation or provision under this Lease. In the event of loss, Lessee
shall give immediate written notice of such to Lessor or Lessor's assignee, if
any, but Lessor shall not by such notice become obligated to make proof of loss
to the insurance company(ies). Each insurance carrier is hereby authorized and
directed to make payment for such loss directly to Lessor or Lessor's assignee.
In case of any loss, the amount collected under any policy of insurance on the
Equipment may, at Lessor's sole option and discretion, be used by Lessor to
repair or replace the Equipment, or held by Lessor to compensate Lessor for
diminution in the value of such Equipment as a result of said Joss, or applied
by Lessor to Lessee's obligations under this Lease.

In furtherance of the assignment of rights contained herein, Lessee hereby
appoints Lessor as Lessee's attorney-in-fact (hereby granting Lessor a power of
attorney coupled with an interest) to make claim for, receive payment of and
execute and endorse any and all documents, checks, or drafts for loss, damages,
or returned premium under any insurance policy(ies) in favor of Lessee insuring
the Equipment, and with the power also to enter into any agreement on Lessee's
behalf and binding Lessee for settlement of any claim or claims relating to the
Equipment which is the subject of this Lease.

13. FURTHER ASSURANCES AND SPECIAL POWER OF ATTORNEY. Lessee shall execute, or
otherwise authenticate, or obtain from third parties, and deliver to Lessor,
upon Lessor's request, such instruments and assurances and other records as
Lessor deems necessary or advisable for the confirmation or perfection of this
Lease and Lessor's rights hereunder. Lessee further agrees and does hereby
appoint Lessor as Lessee's true and lawful attorney-in-fact to prepare, execute
and file any and all documents, including, without limitation, security
agreements and financing statements, including UCC-] 's, in order to give notice
of Lessor's ownership interest in the Equipment and to sign the name of Lessee

<PAGE>

with the same force and effect as if, in fact, signed by Lessee. The filing of
the financing statement is made for the express purpose of protecting the
interests of the parties hereto from any unwarranted claims made by any third
party. This Paragraph shall survive the termination, cancellation, or expiration
of this Lease. Lessee's full and accurate legal name is as first provided above.

14. INDEMNITY. Lessee shall hold Lessor harmless from, indemnify and defend
Lessor against any and all claims, actions, suits, proceedings, costs, expenses,
including attorney's fees, damages and liability, arising out of, connected
with, or resulting from the Equipment or this Lease, including, without
limitation, the manufacture, selection, delivery, possession, use, operation, or
return of the Equipment. This indemnification shall survive the termination,
cancellation, or expiration of this Lease. Lessee waives any immunity Lessee may
have under any industrial insurance act, with regard to the indemnification of
Lessor.

15. ASSIGNMENT. ASSIGNMENT BY LESSEE IS PROHIBITED. WITHOUT LESSOR'S PRIOR
WRITTEN CONSENT, LESSEE SHALL NOT ASSIGN THIS LEASE OR SUBLEASE THE EQUIPMENT OR
ANY INTEREST THEREIN, OR PLEDGE, HYPOTHECATE, TRANSFER, OR DISPOSE OF THE
EQUIPMENT IN ANY MANNER, OR PERMIT THE EQUIPMENT TO BE USED BY ANYONE OTHER THAN
LESSEE OR LESSEE'S EMPLOYEES. Any assignee of Lessor shall have all of the
rights but none of the obligations of Lessor under this Lease. Lessee shall
recognize and hereby consents to any assignment of this Lease by Lessor, and
shall not assert against the assignee any defense, counterclaim, or setoff that
Lessee may have against Lessor.

16. SERVICE CHARGES; INTEREST. ]f Lessee shall fail to make any payment required
by this Lease within 10 days of the due date thereof, Lessee shall pay to Lessor
a service charge of7% of the amount due; provided, however, that not more than
one such service charge shall be made on any delinquent payment, regardless of
the length of the delinquency. In addition, Lessee shall pay to Lessor any
actual additional expenses incurred by Lessor in collection efforts, including,
without limitation, long-distance telephone charges and travel expenses. Lessee
shall pay to Lessor interest on any delinquent payment or amount due under this
Lease, from the due date thereof until paid, at the lesser of the maximum rate
of interest allowed by law or 18% per annum.

Lessee's initials: /s/ Alan Finklestein.

17. TIME OF ESSENCE. Time is of the essence of this Lease, and this position
shall not be impliedly waived by the acceptance on occasion of late or defective
performance.

18. DEFAULT. An Event of Default shall occur hereunder if:

(a) Lessee fails to pay any installment of rent or other payment required
hereunder when due and such failure continues for a period of 10 days; or

(b) Lessee fails to observe, keep, or perform any provision of this Lease, and
such failure shall continue for a period of 10 days; or

(c) Lessee has made any false or misleading statement in connection with
application for, or performance of, this Lease; or

(d) The Equipment, or any part thereof, shall be subject to any lien, levy,
seizure, assignment, transfer, bulk transfer, encumbrance, application,
attachment, execution, sublease or sale without prior written consent of Lessor,
or if Lessee shall abandon the Equipment, or permit another entity or person to
use the Equipment without the prior written consent of Lessor; or

(e) Lessee dies, or ceases to exist as a going concern; or

(f) Lessee defaults under the terms, provisions, or conditions of any other
agreement Lessee has with Lessor; or

(g) If a petition in bankruptcy, arrangement, insolvency, or reorganization is
filed by or against Lessee, or if Lessee sells all or a substantial part of
Lessee's assets, or if a majority of Lessee's voting stock is transferred; or if
Lessee shall make an assignment for the benefit of creditors; or

(h) If there shall be a material adverse change in the financial or business
condition of the Lessee; or

(i) Any guarantor of this Lease defaults on any obligation to Lessor, whether or
not under this Lease, or any of the above-listed events of default occur with
respect to any such guarantor.

19. REMEDIES. Upon the occurrence of any Event of Default hereunder, Lessor,
with or without notice to Lessee, shall have the right to exercise anyone or
more of the following remedies, concurrently or separately, and without any
election of remedies being deemed to have been made.

<PAGE>

(a) Lessor may enter upon Lessee's premises and, without any court order or
other process of law, may repossess and remove the Equipment, or render the
Equipment unusable without removal, either with or without notice to Lessee.
Lessee hereby waives any trespass or right of action for damages by reason of
such entry, removal, or disabling. Any such repossession shall not constitute a
termination of this Lease, unless Lessor so notifies Lessee in writing;

(b) Lessor may require Lessee, at Lessee's sole cost and expense, to return the
Equipment in good repair, ordinary wear and tear !Tom proper use thereof alone
excepted, by delivering it, packed and ready for shipment, to such place or
carrier as Lessor may specify;

(c) Lessor may cancel or terminate this Lease and may retain any and all prior
payments paid by or for the account of Lessee;

(d) Lessor may declare all sums due and to become due under this Lease and under
any other agreement Lessee may have with Lessor immediately due and payable,
without notice or demand to or upon Lessee;

(e) Lessor may re-lease the Equipment, without notice to Lessee, to any third
party, upon such terms and conditions as Lessor alone shall determine, or may
sell the Equipment without notice to the Lessee, at private or public sale, at
which sale Lessor may be the purchaser;

(f) Lessor may sue for and recover from Lessee the sum of all unpaid rents and
other payments due under this Lease then accrued, all accelerated future
payments due under this Lease, discounted to their present value at a discount
rate of 8% as of the date of default, plus Lessor's estimate at the time this
Lease was entered into of Lessor's residual interest in the Equipment, reduced
to present value at a discount rate of 8% as of the date of default, less the
net proceeds of disposition, if any, of the Equipment.

(g) Lessor may sue for and recover from Lessee the sum of all amounts due and to
become due under any other agreements between Lessee and Lessor under the same
formula as set forth in subsection (f) of this Paragraph;

(h) Lessor may pursue any other remedy available by law, by statute, or in
equity.

No right or remedy herein conferred upon or reserved to Lessor is exclusive of
any other right or remedy herein, or by law or by equity provided or permitted,
but each shall be cumulative of every other right or remedy given by statute or
otherwise, and may be enforced concurrently therewith or from time to time. No
single or partial exercise by Lessor of any right hereunder shall preclude any
other or further exercise of any other right or remedy.

20. LESSEE REPRESENTATIONS AND COVENANTS. Lessee represents and covenants with
Lessor that all financial and other information furnished to Lessor in
connection with this Lease was, at the time of delivery to Lessor, true and
correct in all respects. During the term of this Lease, Lessee shall furnish to
Lessor such interim or annual financial statements as Lessor may request from
time to time.

21. NOTICES. Services of all notices under this Lease shall be sufficient if
given personally or mailed to the intended party at its respective address as
set forth herein, or at such other address as said party may provide in writing
!Tom time to time. Any such notice mailed to said address shall be effective 3
days following the date when deposited in the United States Mail, duly addressed
and with sufficient postage thereon prepaid.

22. ENTIRE AGREEMENT; GOVERNING LAW; VENUE; GENERAL. This Lease, together with
any and all addenda or supplements hereto, contains the entire agreement between
the parties and may not be altered, amended, modified, terminated, or otherwise
changed except by a writing signed by the parties, or as otherwise provided
hereinabove. The parties hereto agree that this Lease is made and executed in
the County of Ventura, State of California. This Lease shall be binding when
accepted by Lessor at its principal office in the County of Ventura, State of
California and shall be governed by and construed according to the laws of the
State of California. Lessee agrees that all actions of proceedings instituted by
Lessee of Lessor hereunder shall be brought in a court of competent jurisdiction
in Ventura County, California. Lessee shall pay to Lessor all costs and
expenses, including attorneys' fees and Court costs incurred by Lessor of
awarded by the Court in exercising any of Lessor's rights or remedies hereunder
or enforcing any of the terms or provisions herein. Furthermore, should Lessor,
without fault on Lessor's part, be made a party to any litigation instituted by
third parties against Lessee or Lessor as a result of Lessee's use of the
Equipment, Lessee covenants to pay Lessor all costs and expenses, including
reasonable attorneys' fees, incurred by Lessor in connection with such
litigation. Lessee agrees that Paragraph headings will not affect the
interpretation of the provisions of the Lease. Lessee waives, insofar as
permitted by law, right to trial by jury in any action between the parties.
Lessor and Lessee intend this Lease to be a valid and subsisting legal document
and agree that no provision of the Lease which may be deemed unenforceable shall
in any way invalidate any other provision or provisions of the Lease, all of
which shall remain in full force and effect. This Lease shall be binding upon
the parties, their heirs, successors, legal representatives and assigns. The
liability of Co-Lessees hereunder shall be joint and several. Wherever the
context so requires herein, the singular number includes the plural and the
plural number includes the singular; masculine terms include the feminine and
neuter and vice-versa.

THIS LEASE CANNOT BE CANCELLED BY LESSEE DURING THE INITIAL TERM.

Accepted at Ventura County, California

<PAGE>

This 30 day of November 2004

Lessee (Full Legal Name)
Innovative Card Technologies, Inc.

The Undersigned affirms that he is a duly authorized corporate officer, partner,
or proprietor of the above-named Lessee, or has the authority to execute this
Lease on Lessee's behalf.

Dated: September 24, 2004
By: /s/ Alan Finkelstein

Title: CEO

Lessor: CNC Associates, Inc.

By: /s/ Justin Snyder

Title: Operations Manager

AMENDMENT TO LEASE RENTAL AGREEMENT

Re: Lease Rental Agreement number 23281001, dated September 24, 2004 ,between
CNC Associates, Inc., as Lessor, and Innovative Card Technologies, Inc., as
Lessee.

Notwithstanding any language in the captioned Lease Rental Agreement ("Lease")
to the contrary, it is agreed between Lessor and Lessee that, provided Lessee
has performed all of its obligations under the Lease, as provided therein, then,
at the end of the initial term of the Lease, or, when such obligations shall
have been completely performed prior to the end of the initial term thereof,
Lessee may purchase the leased Equipment for the sum of One Hundred and One
Dollar ($101.00) Plus any applicable taxes.

Lessee is hereby put on notice that Lessor will make the Equipment available to
sale to Lessee WITHOUT ANY WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING,
WITHOUT LIMIT A TION, WARRANTIES AS TO MERCHANT ABILITY, OR AS TO FITNESS FOR
ANY PARTICULAR PURPOSE.

READ AND AGREED TO:

Lessor: CNC Associates, Inc.

By: /s/ Justin Snyder

Title: Operations Manager

Date: November 30, 2004

Lessee: Innovative Card Technologies, Inc.

By: /s/ Alan Finkelstein

Title: CEO

Date: September 24, 2004

SCHEDULE 'A' EQUIPMENT SCHEDULE

TillS SCHEDULE is attached to and made part of a certain Lease Rental Agreement,
number 23281001, between CNC Associates, Inc., as Lessor, and Innovative Card
Technologies, Inc., as Lessee.

<PAGE>

QUANTITY                   EQUIPMENT DESCRIPTION              SERIAL NUMBER

(1)                        HAAS Tool Room Mill, Model TM-2
including:                                                    38075

(1) Rigid Tapping

(1) Work Light

(1)                        3.5" Floppy Disk Drive and Interface

The Lessee hereby certifies that the description of personal property set forth
above constitutes an accurate account of the Equipment, as such is defined in
the Lease Rental Agreement of which this Schedule is a part.

Lessor: CNC Associates, Inc.

By: /s/ Justin Snyder

Title: Operations Manager

Date: November 30, 2004

Lessee: Innovative Card Technologies, Inc.

By: /s/ Alan Finkelstein

Title: CEO

Date: September 24, 2004

SCHEDULE "B"
PAYMENT SCHEDULE

THIS SCHEDULE is attached to and made part of a certain Lease Rental Agreement
number 23281001, dated September 24, 2004 ("Lease") between CNC Associates,
Inc., as

Lessor, and Innovative Card Teclinologies, Inc., as Lessee. Lessor and Lessee
agree that Lessee is obligated for the original term of the Lease to make
periodic rental payments under the Lease as follows:

Thirty (30) days after Lessee accepts the equipment, and for Thirty-Five (35)
successive months thereafter (for a total of 36 payments), Lessee shall pay
Lessor monthly rentals in the amount of $865.93 plus any applicable tax.

Lessor: CNC Associates, Inc.

By: /s/ Justin Snyder

Title: Operations Manager

Date: November 30, 2004

Lessee: Innovative Card Technologies, Inc.

By: /s/ Alan Finkelstein

Title: CEO

Date: September 24, 2004

EQUIPMENT AND DELIVERY ACCEPTANCE NOTICE

<PAGE>

Re: Lease Rental Agreement, number 23281001, dated _September 24,2004_, between
CNC Associates, Inc., as Lessor, and Innovative Card Technologies, Inc., as
Lessee.

Lessee hereby acknowledges and affirms that Lessee has received the Equipment
exactly as described under the Lease Rental Agreement and on any Schedule or
Schedules annexed thereto and that the Equipment has been installed, Lessee
further acknowledges and affirms that said Equipment has not been delivered,
installed or accepted on a "trial basis". Lessee affirms that Lessor has made no
representations or warranties whatsoever as to the Equipment.

Lessee acknowledges and affirms that Lessor is not responsible for any service
contracts or duties to be performed thereunder and that such contracts do not
affect Lessee's obligation to Lessor under the Lease Rental Agreement.

Date of Acceptance: November 4, 2004

Lessee: Innovative Card Technologies, Inc.

By: /s/ Bennet Lientz, Jr.
Title: CFO

Attention: Please retain and do NOT sign this document, until your machine has
been delivered.

Please fax this document to (805) 278-8501 and mail the original to 2900
Challenger Place, Oxnard, CA 93030.

LESSEE ACKNOWLEDGMENT/ESTOPPEL

Re: Lease Rental Agreement, number 23281001, dated September 24, 2004
("Agreement") between CNCAssociates, Inc., as Lessor, and Innovative Card
Technologies, Inc., as Lessee.

LESSEE HEREBY ACKNOWLEDGES THAT:

(a) Lessee, alone and in its sole discretion, has selected the equipment which
is the subject of the Agreement ("Equipment") and the Supplier thereof, namely,
Productivity, Inc.; and

(b) Lessor has made no representations, warranties, or promises, written or
oral, express or implied, as to the fitness of the Equipment for any particular
purpose, its merchantability, its potential profitability or cost-saving
potential, condition, quality, durability, or latent or patent defects; and

(c) Any agreement for the installation, service, maintenance, or repair of the
Equipment is a matter between the Supplier of the Equipment and the Lessee; and
any failure of said Supplier to perform or any failure of the equipment to
perform shall not be grounds for Lessee to fail to perform any of its
obligations under the Agreement; and

(d) Lessee may have rights as to Equipment warranties from the Supplier
specified in Paragraph "a", above; and

(e) Neither the Supplier, nor any of its agents, representatives, employees, or
sales personnel are in any way to be construed as being agents of Lessor.
Consequently, none of them is in any way authorized to waive or alter any of the
terms, provisions, or conditions of the Agreement, or to make any
representations whatever on behalf of Lessor with regard to the agreement; and

(f) The Equipment is and shall remain personal property, even though installed
in or attached to real property; and

(g) Lessee warrants and represents that all of the financial and other
information furnished to Lessor for purposes of Lessor's evaluation of Lessee's
creditworthiness for this Agreement was true and correct when prepared and
furnished and that there has been no material adverse change in Lessee's
business or financial condition since such preparation and furnishing.
Furthermore, Lessee warrants and represents that there has been no omission of
any information which might have affected Lessor's credit evaluation of Lessee's
creditworthiness or Lessor's evaluation of any Guarantor's ability to perform
under any Guaranty to this Agreement; and

<PAGE>

/s/ Alan Finkelstein (initial) (h) Lessee has thoroughly read and understood the
entire Agreement, this Initial Acknowledgment/Estoppel and any other documents
which Lessee has signed with regard to this Agreement, or has retained the
services of a competent person, such as an attorney, who has explained to Lessee
all of the terms, conditions and provisions of the Agreement and of this
Acknowledgment/Estoppel.

LESSEE AFFIRMS ITS ACKNOWLEDGMENT AND FULL UNDERSTANDING THAT THE AGREEMENT IS
NON-CANCELABLE FOR ITS TERM.

Lessee: Innovative Card Technologies, Inc.

By: /s/ Alan Finkelstein

Title: CEO

Date: September 24, 2004

Re: DISCLAIMER OF OWNERSHIP

Lease Rental Agreement Number 23281001, dated September 24, 2004 , between CNC
Associates, Inc., as Lessor, and Innovative Card Technologies, Inc., as Lessee.

The undersigned is Lessee of certain personal property ("Equipment") which is
the subject of the above-referenced Lease Rental Agreement ("Lease"). At
Lessee's request, Lessor has purchased the Equipment from Productivity, Inc.,
("Vendor"). Lessee has paid a deposit, or form of deposit, to the Vendor as part
of one or more of its original purchase orders, prior to or coincident with
Lessee's proposal to enter into the Lease with Lessor. Having received all
necessary and properly executed documentation pertinent to said Lease, and being
satisfied that Lessee has met all of the conditions incident to Lessor's
ratification of the Lease, Lessor has paid to the Vendor: (a) the remaining
balance of the purchase price of the Equipment; or (b) 100% of the purchase
price of the Equipment, it being affirmed by Lessee that the vendor has refunded
to Lessee the deposit(s) herein above mentioned. In either case, in return for
such payment to the Vendor, Lessor has received a Bill of Sale or Invoice from
the Vendor conveying a 100% interest in the Equipment to the Lessor.

Lessee hereby affirmatively states that it is satisfied that its payments under
the Lease are based solely on Lessor's payment to the Vendor and do not include
Lessee's deposit(s); and Lessee hereby consents to Vendor transferring the
entire ownership of the Equipment to the Lessor. Effective on the actual
transfer of the ownership of the Equipment to Lessor, Lessee disclaims any
ownership interest or rights in the Equipment, save for those the Lessee may
have by virtue of its being Lessee under the Lease.

Lessee: Innovative Card Technologies, Inc.

By: /s/ Alan Finkelstein

Title: CEO

Date: September 24, 2004

AMENDMENT TO LEASE

Re: Lease Rental Agreement #23281001 ("Lease")

Notwithstanding anything to the contrary in the referenced Lease, Lessee may
prepay the obligation evidenced thereby at any time during its original term
without penalty for so doing; provided, however, that such prepayment may be
made without penalty only if the Lessee has promptly and faithfully performed
all of its obligations under the Lease, including, without limitation, its
obligation to remit the monthly payments under the Lease promptly when due.

The prepayment amount shall be the then outstanding principal amount of the
obligation, plus any other amounts due or accrued at the time such prepayment is
made, plus any applicable taxes, plus: 3% of the original invoice cost of the
Equipment under the Lease during the term covered by the first 12 payments,
excluding advance payments; 2% of the original invoice cost of the Equipment
under the Lease during the term covered by the second 12 payments, excluding
advance payments.

All other terms, conditions and provisions of the Lease shall remain unchanged
and in full force and effect.

<PAGE>

Lessor: CNC Associates, Inc.

By: /s/ Justin Snyder

Title: Operations Manager

Date: November 30, 2004

Lessee: Innovative Card Technologies, Inc.

By: /s/ Alan Finkelstein

Title: CEO

Date: September 24, 2004

PERSONAL GUARANTY

This PERSONAL GUARANTY is entered into on September 24, 2004, by and between
Alan Finkelstein ("Guarantor") and CNC Associates, Inc. ("Lessor"). Guarantor
offers this PERSONAL GUARANTY as an inducement for CNCA to enter into
Finance/Lease Agreement #23281001, with Innovative Card Technologies, Inc.
("Lessee").

To induce Lessor to enter into the within Lease, the undersigned unconditionally
guarantees to Lessor the prompt payment when due of all of Lessee's obligations
to Lessor. Lessor shall not be required to proceed against Lessee or the
Equipment or enforce any other remedy before proceeding against the undersigned.
Guarantor consents to any extensions or modification granted to Lessee and the
release and/or compromise of any obligation of Lessee or any other obligors and
guarantors without in any way releasing the undersigned from its obligations
hereunder. This is a continuing Guaranty and shall not be discharged or affected
by death of the undersigned, shall bind the heirs, administrators,
representatives, successors and assigns, and may be enforced by or for the
benefit of any assignee or successor of Lessor. The undersigned agrees and
consents to the Courts of the State of California having jurisdiction in Ventura
County. Any Federal District Court having jurisdiction in said County shall have
jurisdiction and shall be the proper venue for the determination of all
controversies and disputes arising hereunder.

Guarantor warrants and represents that Guarantor has an interest, financial or
otherwise, in Lessee, and it is to the benefit of the Guarantor that Lessee
enter into the Finance/Lease Agreement and other Agreements, or any of them,
with Lessor; that Guarantor is and shall remain, familiar with the state of
Lessee's finances and the operation of Lessee's business; and that Guarantor
understands that Lessor would be unwilling to enter into the Agreements, or any
of them, with Lessee without this PERSONAL GUARANTY and that CNCA depends upon
Guarantor's warranties, covenants and representations.

This Guaranty contains the entire agreement between the parties and it may not
be altered, amended, modified, or terminated, except by a writing signed by the
parties. Should either party institute Suit hereunder, the prevailing party
shall be entitled to reasonable attorney fees and costs. No provision of this
Guaranty which may be deemed unenforceable shall in any way invalidate any other
provision or provisions of the Guaranty, all of which shall remain in full force
and effect. This Guaranty may be assigned by Lessor without notice to the
Guarantor, but may not be assigned by the Guarantor. This Guaranty shall inure
to the benefit of Lessor, its successors, and assigns, and shall bind the
Guarantor, his/her heirs, representatives, successors and assigns. Service of
all notices regarding this Guaranty shall be sufficient if given personally or
mailed to the intended party at the address as set forth herein, or at such
other address as said party may provide in writing from time to time.

Guarantor:

Alan Finkelstein

By: /s/ Alan Finkelstein

Address:  12644 Mulholland Drive

<PAGE>

Beverly Hills, CA  90210

Social Security Number [***]

Accepted at Ventura County, California

This 30th day of November 2004

CNC Associates, Inc.

By: Justin Snyder

Title: Operations Manager

*** Confidential Treatment RequestedExhibit
10.4

INVESTORS’
RIGHTS AGREEMENT

STANDSTILL
AND EXTENSION AGREEMENT

 

This
Investors’ Rights Agreement Standstill And EXTENSION
Agreement
(“Agreement”)
is made as of March 12, 2004 (the “Effective
Date”),
by and between Rubio’s
Restaurants, Inc.,
a Delaware corporation, (“Rubio’s”),
and Rosewood
Capital, L.P.,
a Delaware limited partnership (the “Investor”).

 

Recitals

 

A. Rubio’s
and the Investor are parties to that certain Amended and Restated Investors’
Rights Agreement, dated as of November 19, 1997, as amended on December 31, 1997
and in May 1998 (the “Rights
Agreement”),
wherein the Rubio’s granted to the Investor certain registration
rights.

 

B. The
Investor desires to obtain an extension to its registration rights.

 

C. The
Company is willing to grant to Investor an extension of Investor’s registration
rights through May 6, 2006 in exchange for the Investor agreeing not to exercise
any demand registration rights on or before February 1, 2005.

 

Agreement

 

NOW,
THEREFORE,
the parties hereto agree as follows:

 

1.  Extension
of Registration Rights.
Beginning on the Effective Date and extending through May, 6, 2006, Rubio’s
hereby grants to the Investor the same rights, if any, held by the Investor as
of the Effective Date under Sections 1.2, 1.3, 1.4, 1.6, 1.7, 1.8, 1.9, 1.10,
1.11, 1.12 and 1.14 of the Rights Agreement. Such rights shall be governed by
the relevant terms and conditions as set forth in the Rights Agreement, which
terms are hereby incorporated by reference, provided that the Investor shall be
considered the “Holder” as that term is used in the Rights
Agreement.

 

2.  Standstill.
Beginning on the Effective Date and extending through February 1, 2005, the
Investor will not exercise any demand registration rights, as described in
Sections 1.2 or 1.12 of the Rights Agreement or set forth in Section 1 hereof,
that it is entitled to, whether pursuant to this Agreement or pursuant to the
Rights Agreement.

 

3.  Miscellaneous.

 

(a)  Waivers
and Amendments.
Neither this Agreement nor any provision hereof may be changed, waived,
discharged, terminated, modified or amended except upon the written consent of
Rubio’s and the Investor.

 

 

(b)  Headings.
The headings of the various sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be part of this
Agreement.

 

(c)  Severability.
In case any provision contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby. 

 

(d)  Notices.
All notices, requests, consents and other communications hereunder shall be in
writing, shall be sent by confirmed facsimile or mailed by first-class
registered or certified airmail, or nationally recognized overnight express
courier, postage prepaid, and shall be deemed given when so sent in the case of
facsimile transmission, or when so received in the case of mail or courier, and
addressed as set forth on the signature page of this Agreement.

 

(e)  Governing
Law.
This Agreement shall be governed by and construed in accordance with the laws of
the State of California as applied to contracts entered into and performed
entirely in California by California residents, without regard to conflicts of
law principles.

 

(f)  Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall
constitute an original, but all of which, when taken together, shall constitute
but one instrument, and shall become effective when one or more counterparts
have been signed by each party hereto and delivered to the other
parties.

 

(g)  Successors
and Assigns.
Except as otherwise expressly provided herein, the provisions hereof shall inure
to the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties hereto.

 

(h)  Entire
Agreement.
This Agreement constitutes the full and entire understanding and agreement
between the parties with regard to the subject hereof.

 

[Signature
Pages Follow]

 

 

In
Witness Whereof,
the parties hereto have caused this Agreement to be executed by their duly
authorized representatives as of the day and year first above
written.

 

 

	Company:	
      Rubio’s Restaurants, Inc.

      
      a
      Delaware corporation

      

      By:  
      ______________________________

      Ralph
      Rubio, Chief Executive Officer

      

      Address:  
      1902
      Wright Place, Suite 300

      San
      Diego, CA 92008

      Fax
      No.: (760) 602-5113

       

	Investor:	
      Rosewood Capital, L.P.

      
       

      By: Rosewood
      Associates L.P.

      Its: General
      Partner

      

      By:  
      ________________________________

      Kyle
      Anderson, Principal

      

      Address:  
      One
      Maritime Plaza, Suite 1330

      San
      Francisco, CA 94111

      Fax
      No.: (415) 362-1192

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