Document:

Exhibit 4.1

[This Form of Warrant is Representative of the Warrant Agreement Under Which the
Selling  Security  Holders Were Issued Their Warrants in the Private  Placement.
See  Schedule A attached  hereto for a list of the number of warrants  issued to
each purchaser.]

NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK  ISSUABLE  UPON  EXERCISE OF
THIS WARRANT HAVE BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "  SECURITIES  ACT"  ),  OR THE  SECURITIES  LAWS  OF ANY  STATE  OR  OTHER
JURISDICTION.  HOLDER MAY NOT OFFER,  SELL,  PLEDGE OR OTHERWISE  TRANSFER  THIS
WARRANT,  OR ANY SHARES OF COMMON STOCK  ISSUABLE UPON EXERCISE OF THIS WARRANT,
EXCEPT (1) PURSUANT TO AN EXEMPTION FROM  REGISTRATION  UNDER THE SECURITIES ACT
OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES AND
OTHER JURISDICTIONS,  AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION,
UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
IT THAT SUCH TRANSACTION DOES NOT REQUIRE  REGISTRATION UNDER THE SECURITIES ACT
AND SUCH OTHER APPLICABLE LAWS.

                               Intelli-Check, Inc.

               Warrant for the Purchase of Shares of Common Stock,
                           par value $0.001 per Share

No. W-12                                                           24,750 Shares

      THIS CERTIFIES that, for value received Presidio  Partners,  whose address
is 44 Montgomery  Street,  #2110,  San Francisco,  CA 94104 (the  "Holder"),  is
entitled to subscribe  for and  purchase  from  Intelli-Check,  Inc., a Delaware
corporation  (the  "Company"),  upon the terms and  conditions set forth herein,
24,750 shares of the Company's Common Stock, par value $0.001 per share ("Common
Stock"),  at a price of $5.40 per share (the "Exercise  Price").  As used herein
the term "this Warrant" shall mean and include this Warrant and any Common Stock
or Warrants  hereafter  issued as a  consequence  of the exercise or transfer of
this Warrant in whole or in part.

      The Exercise  Price may be adjusted from time to time as  hereinafter  set
forth.  The  number of shares of Common  Stock  issuable  upon  exercise  of the
Warrants (the "Warrant Shares") are entitled to the benefits, and subject to the
obligations,  set forth in the Registration Rights Agreement between the Company
and the Holder dated concurrently herewith.

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      1. Exercise Price,  Exercise Period and Possible Mandatory Exercise.  This
Warrant  may be  exercised  at any time or from time to time  during  the period
commencing  on  August 8,  2005 and  ending  on  August  8, 2010 (the  "Exercise
Period").  Notwithstanding  the  foregoing,  the Company may,  commencing on the
third  anniversary of the Closing Date,  require the exercise of any outstanding
Warrants if the Current  Market Price (as  hereinafter  defined) is equal to, or
greater than, 175% of the Exercise Price.

      2. Procedure for Exercise; Effect of Exercise.

      (a) Cash  Exercise.  Subject to the conditions and terms set forth herein,
this Warrant may be exercised,  in whole or in part, by the Holder during normal
business  hours on any  business  day  during  the  Exercise  Period  by (i) the
presentation  and  surrender  of this  Warrant to the  Company at its  principal
office along with a duly  executed  Notice of Exercise (in the form  attached to
this  Agreement  duly executed by the Holder)  specifying  the number of Warrant
Shares to be  purchased,  and (ii)  delivery  of payment  to the  Company of the
Exercise  Price for the  number of  Warrant  Shares  specified  in the Notice of
Exercise by cash, wire transfer of immediately available funds to a bank account
specified by the Company, or by certified or bank cashier's check or by means of
a cashless exercise pursuant to Section 2(c).

      (b) Effect of Exercise.  Upon receipt by the Company of this Warrant and a
Notice of  Exercise,  together  with proper  payment of the Exercise  Price,  as
provided in this Section 2, the Company agrees that such Warrant Shares shall be
deemed to be issued to the Holder as the record holder of such Warrant Shares as
of the close of business on the date on which this Warrant has been  surrendered
and  payment  has been  made for such  Warrant  Shares in  accordance  with this
Agreement  and the  Holder  shall be  deemed  to be the  holder of record of the
Warrant  Shares,  notwithstanding  that the stock  transfer books of the Company
shall then be closed or that certificates representing such Warrant Shares shall
not  then  be  actually   delivered  to  the  Holder.  A  stock  certificate  or
certificates for the Warrant Shares specified in the Notice of Exercise shall be
delivered to the Holder as promptly as practicable.  The stock certificate(s) so
delivered shall be in any such  denominations as may be reasonably  specified by
the Holder in the Notice of  Exercise.  If this  Warrant  should be exercised in
part only, the Company shall,  upon surrender of this Warrant for  cancellation,
execute and deliver a new Warrant evidencing the right of the Holder to purchase
the balance of the Warrant Shares subject to purchase hereunder.

      (c)  Cashless  Exercise.  If, but only if, at any time after one year from
the  date of  issuance  of  this  Warrant  there  is no  effective  Registration
Statement  registering  the resale of the  Warrant  Shares by the  Holder,  this
Warrant may also be exercised at such time by means of a " cashless exercise" in
which the Holder  shall be entitled to receive a  certificate  for the number of
Warrant  Shares equal to the quotient  obtained by dividing  [(A-B) (X)] by (A),
where:

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<PAGE>

            (A) = the  Current  Market  Price (as  hereinafter  defined)  on the
                  trading day preceding the date of such election;

            (B) = the Exercise Price of the Warrants, as adjusted; and

            (X) = the number of Warrant  Shares  issuable  upon  exercise of the
                  Warrants in accordance with the terms of this Warrant.

      (d) Issuance of Certificates.  In addition to all other available remedies
at law or in  equity,  if the  Company  fails to  deliver  certificates  for the
Warrant  Shares  within five (5) business  days after this Warrant is exercised,
then the Company shall pay to the holder in cash a penalty (the "Penalty") equal
to 1% of the number of Warrant  Shares that the holder is entitled to multiplied
by the  Current  Market  Price (as  hereinafter  defined)  for each day that the
Company fails to deliver  certificates for the Warrant Shares.  For example,  if
the holder is entitled to 100,000 Warrant Shares and the Current Market Price is
$2.00,  then the  Company  shall pay to the holder  $2,000 for each day that the
Company fails to deliver  certificates for the Warrant Shares. The Penalty shall
be paid to the holder by the fifth (5th) day of the month following the month in
which it has accrued.

      3.  Registration  of Warrants;  Transfer of Warrants.  Any Warrants issued
upon the  transfer  or exercise in part of this  Warrant  shall be numbered  and
shall be registered in a Warrant Register as they are issued.  The Company shall
be  entitled  to treat the  registered  holder  of any  Warrant  on the  Warrant
Register as the owner in fact thereof for all purposes and shall not be bound to
recognize  any  equitable  or other claim to or interest in such  Warrant on the
part of any  other  person,  and shall not be  liable  for any  registration  or
transfer of Warrants  which are  registered or to be registered in the name of a
fiduciary  or the nominee of a fiduciary  unless made with the actual  knowledge
that a fiduciary or nominee is committing a breach of trust in  requesting  such
registration  or  transfer,  or with  the  knowledge  of  such  facts  that  its
participation  therein amounts to bad faith.  This Warrant shall be transferable
only on the books of the Company  upon  delivery  thereof  duly  endorsed by the
Holder or by its duly authorized  attorney or representative,  or accompanied by
proper  evidence of  succession,  assignment,  or authority to transfer.  In all
cases of transfer by an attorney,  executor,  administrator,  guardian, or other
legal representative,  duly authenticated evidence of his or its authority shall
be produced.  Upon any registration of transfer, the Company shall deliver a new
Warrant  or  Warrants  to the  person  entitled  thereto.  This  Warrant  may be
exchanged,  at the option of the Holder thereof,  for another Warrant,  or other
Warrants  of  different  denominations,  of like tenor and  representing  in the
aggregate the right to purchase a like number of Warrant Shares,  upon surrender
to the Company or its duly authorized agent.

      4.  Restrictions on Transfer.  (a) The Holder,  as of the date of issuance
hereof, represents to the Company that such Holder is acquiring the Warrants for
its own account for investment  purposes and not with a view to the distribution
thereof or of the Warrant Shares.  Notwithstanding  any provisions  contained in
this Warrant to the contrary,  this Warrant and the related Warrant Shares shall
not be transferable  except  pursuant to the proviso  contained in the following
sentence or upon the  conditions  specified in this Section 4, which  conditions
are intended,  among other things,  to insure  compliance with the provisions of
the Securities Act of 1933, as amended (the " Securities  Act" ), and applicable
state law in respect of the transfer of this Warrant or such Warrant Shares. The
Holder by  acceptance  of this Warrant  agrees that the Holder will not transfer
this Warrant or the related  Warrant  Shares prior to delivery to the Company of
an opinion  of the  Holder's  counsel  (as such  opinion  and such  counsel  are
described in Section 4(b) hereof) or until  registration  of such Warrant Shares
under the Securities Act has become effective or after a sale of such Warrant or
Warrant Shares has been consummated  pursuant to Rule 144 or Rule 144A under the
Securities  Act;  provided,  however,  that the Holder may freely  transfer this
Warrant or such Warrant Shares (without delivery to the Company of an opinion of
Counsel) (i) to one of its nominees,  affiliates or a nominee thereof, (ii) to a
pension or  profit-sharing  fund established and maintained for its employees or
for  the  employees  of  any  affiliate,  (iii)  from  a  nominee  to any of the
aforementioned  persons as  beneficial  owner of this  Warrant  or such  Warrant
Shares, or (iv) to a qualified  institutional buyer, so long as such transfer is
effected in compliance with Rule 144A under the Securities Act.

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<PAGE>

      (b) The  Holder,  by its  acceptance  hereof,  agrees  that  prior  to any
transfer  of this  Warrant  or of the  related  Warrant  Shares  (other  than as
permitted  by  Section  4(a)  hereof or  pursuant  to a  registration  under the
Securities  Act),  the Holder  will give  written  notice to the  Company of its
intention to effect such transfer,  together with an opinion of such counsel for
the Holder as shall be reasonably  acceptable to the Company, to the effect that
the proposed transfer of this Warrant and/or such Warrant Shares may be effected
without  registration under the Securities Act. Upon delivery of such notice and
opinion to the Company,  the Holder  shall be entitled to transfer  this Warrant
and/or such Warrant Shares in accordance with the intended method of disposition
specified in the notice to the Company.

      (c)  Each  stock  certificate  representing  Warrant  Shares  issued  upon
exercise or exchange of this Warrant shall bear the following  legend unless the
opinion of  counsel  referred  to in  Section  4(b)  states  such  legend is not
required:

            " THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
            REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED
            (THE " SECURITIES  ACT"),  OR THE SECURITIES LAWS OF ANY
            STATE  OR  OTHER  JURISDICTION.  THE  SHARES  MAY NOT BE
            OFFERED,  SOLD, PLEDGED OR OTHERWISE  TRANSFERRED EXCEPT
            (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
            SECURITIES   ACT  OR  (2)   PURSUANT  TO  AN   EFFECTIVE
            REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH
            CASE IN ACCORDANCE  WITH ALL APPLICABLE  SECURITIES LAWS
            OF THE STATES AND OTHER  JURISDICTIONS,  AND IN THE CASE
            OF A TRANSACTION  EXEMPT FROM  REGISTRATION,  UNLESS THE
            COMPANY HAS  RECEIVED  AN OPINION OF COUNSEL  REASONABLY
            SATISFACTORY  TO  IT  THAT  SUCH  TRANSACTION  DOES  NOT
            REQUIRE  REGISTRATION  UNDER THE SECURITIES ACT AND SUCH
            OTHER APPLICABLE LAWS."

                                 4
<PAGE>

The Holder understands that the Company may place, and may instruct any transfer
agent or depository for the Warrant Shares to place, a stop transfer notation in
the securities records in respect of the Warrant Shares.

      5.  Reservation  of  Shares.  The  Company  shall at all times  during the
Exercise  Period  reserve and keep  available out of its authorized and unissued
Common Stock, solely for the purpose of providing for the exercise of the rights
to purchase all Warrant Shares granted pursuant to the Warrants,  such number of
shares of Common Stock as shall, from time to time, be sufficient therefor.  The
Company covenants that all shares of Common Stock issuable upon exercise of this
Warrant,  upon receipt by the Company of the full Exercise Price  therefor,  and
all shares of Common Stock  issuable upon  conversion of this Warrant,  shall be
validly issued, fully paid, non-assessable, and free of preemptive rights.

      6.  Exercise  Price  Adjustments.  The Exercise  Price shall be subject to
adjustment from time to time as follows:

      (a) (i) In the event that the  Company  shall (A) pay a dividend or make a
distribution,  in shares of Common  Stock,  on any class of capital stock of the
Company or any  subsidiary  which is not directly or indirectly  wholly owned by
the Company,  (B) split or  subdivide  its  outstanding  Common Stock or reverse
split into a greater  number of shares,  or (C) combine its  outstanding  Common
Stock into a smaller number of shares, then in each such case the Exercise Price
in effect  immediately  prior  thereto shall be adjusted so that the Holder of a
Warrant  thereafter  surrendered  for exercise  shall be entitled to receive the
number of shares of Common  Stock that such Holder would have owned or have been
entitled to receive after the  occurrence of any of the events  described  above
had such Warrant been  exercised  immediately  prior to the  occurrence  of such
event.  An  adjustment  made  pursuant  to this  Section  6(a)(i)  shall  become
effective immediately after the close of business on the record date in the case
of a dividend or  distribution  (except as  provided in Section  6(e) below) and
shall become effective  immediately after the close of business on the effective
date in the case of such subdivision,  split or combination, as the case may be.
Any shares of Common Stock  issuable in payment of a dividend shall be deemed to
have been issued  immediately  prior to the close of business on the record date
for such dividend for purposes of calculating  the number of outstanding  shares
of Common Stock under clauses (ii) and (iii) below.

      (ii) If, prior to the third  anniversary  of the Closing Date, the Company
shall  commit to issue or  distribute  Common Stock or issue  rights,  warrants,
options or convertible or exchangeable  securities  entitling the holder thereof
to subscribe for or purchase,  convert into or exchange for Common Stock, in any
such  case at a price per share  less than the  Exercise  Price per share on the
earliest of (i) the date the Company  shall enter into a firm  contract for such
issuance  or  distribution,  (ii)  the  record  date  for the  determination  of
stockholders  entitled  to  receive  any  such  rights,  warrants,   options  or
convertible or  exchangeable  securities,  if  applicable,  or (iii) the date of
actual issuance or  distribution  of any such Common Stock or rights,  warrants,
options or convertible or exchangeable securities (provided that the issuance of
Common Stock upon the exercise of rights,  warrants,  options or  convertible or
exchangeable securities will not cause an adjustment in the Exercise Price if no
such adjustment would have been required at the time such right, warrant, option
or convertible or exchangeable  security was issued), then the Exercise Price in
effect  immediately  prior to such  earliest  date shall be  adjusted to a price
equal to the price paid per share for such new securities.

                                       5
<PAGE>

Such  adjustment  shall be made  successively  whenever  any such Common  Stock,
rights,  warrants,  options or convertible or exchangeable securities are issued
or distributed.  In determining whether any rights,  warrants or options entitle
the holders to  subscribe  for or purchase  shares of Common  Stock at less than
such Exercise Price,  and in determining the aggregate  offering price of shares
of Common Stock so issued or distributed,  there shall be taken into account any
consideration  received by the Company for such Common Stock, rights,  warrants,
options,  or  convertible  or  exchangeable   securities,   the  value  of  such
consideration,  if other than cash,  to be determined by the Board of Directors,
whose  determination  shall be conclusive  and described in a certificate  filed
with the records of corporate proceedings of the Company. If any right, warrant,
option or  convertible  or  exchangeable  security to purchase or acquire Common
Stock,  the issuance of which  resulted in an adjustment  in the Exercise  Price
pursuant to this subsection (ii) shall expire and shall not have been exercised,
the Exercise Price shall, immediately upon such expiration, be recomputed to the
Exercise  Price  which  would  have been in  effect  had the  adjustment  of the
Exercise  Price  made  upon the  issuance  of such  right,  warrant,  option  or
convertible  or  exchangeable  security  been made on the basis of offering  for
subscription,  purchase  or  issuance,  as the case may be,  only that number of
shares of Common Stock actually  purchased or issued upon the actual exercise of
such right, warrant, option or convertible or exchangeable securities.

      (iii) No  adjustment  in the Exercise  Price shall be required  unless the
adjustment  would require an increase or decrease of at least 1% in the Exercise
Price then in effect; provided,  however, that any adjustments that by reason of
this Section 6(a) are not required to be made shall be carried forward and taken
into account in any subsequent  adjustment.  All calculations under this Section
6(a) shall be made to the nearest cent or nearest 1/100th of a share.

      (iv)  Notwithstanding  anything to the  contrary set forth in this Section
6(a), no adjustment shall be made to the Exercise Price upon (A) the issuance of
shares of Common  Stock  pursuant  to any  compensation  or  incentive  plan for
officers, directors, employees or consultants of the Company which plan has been
approved by the Compensation Committee of the Board of Directors (or if there is
no such  committee  then serving,  by the majority  vote of the  Directors  then
serving  who are not  employees  or  officers  of the  Company,  a 5% or greater
stockholder  of the Company or an officer,  employee,  affiliate or associate of
any such 5% or  greater  stockholder)  (unless  the  exercise  price  thereof is
changed   after  the  date  hereof   other  than  solely  by  operation  of  the
anti-dilution  provisions thereof or by the Compensation  Committee of the Board
of Directors or, if applicable,  the Board of Directors and, if required by law,
the  stockholders  of the Company as provided  in this clause  (A)),  or (B) the
issuance  of Common  Stock  upon the  conversion  or  exercise  of the  options,
warrants  or rights of the  Company  outstanding  on August 8, 2005,  unless the
conversion or exercise price thereof is changed after August 8, 2005 (other than
solely by operation of the anti-dilution provisions thereof).

                                       6
<PAGE>

      (v) In the  event  that,  at any time as a result  of an  adjustment  made
pursuant to Sections 6(a)(i) through  6(a)(iii) above, the Holder of any Warrant
thereafter  surrendered for exercise shall become entitled to receive any shares
of the Company other than shares of the Common Stock,  thereafter  the number of
such other  shares so  receivable  upon  exercise of any such  Warrant  shall be
subject  to  adjustment  from  time to time in a manner  and on terms as  nearly
equivalent as  practicable  to the  provisions  with respect to the Common Stock
contained in Sections  6(a)(i) through  6(a)(iv) above, and the other provisions
of this  Section 6(a) with respect to the Common Stock shall apply on like terms
to any such other shares.

      (b) In case of any  reclassification  of the Common Stock (other than in a
transaction to which Section 6(a)(i) applies),  any consolidation of the Company
with,  or merger of the Company into,  any other  entity,  any merger of another
entity  into the  Company  (other  than a merger  that  does not  result  in any
reclassification,  conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company),  any sale or transfer of all or substantially  all
of the assets of the Company or any compulsory share exchange, pursuant to which
share  exchange  the Common Stock is converted  into other  securities,  cash or
other property, then lawful provision shall be made as part of the terms of such
transaction  whereby  the Holder of a Warrant  then  outstanding  shall have the
right  thereafter,  during the period  such  Warrant  shall be  exercisable,  to
exercise such Warrant only for the kind and amount of securities, cash and other
property  receivable upon the  reclassification,  consolidation,  merger,  sale,
transfer or share  exchange by a holder of the number of shares of Common  Stock
of the  Company  into  which a Warrant  might  have been  able to  exercise  for
immediately prior to the reclassification, consolidation, merger, sale, transfer
or share  exchange  assuming that such holder of Common Stock failed to exercise
rights of  election,  if any,  as to the kind or amount of  securities,  cash or
other property  receivable  upon  consummation  of such  transaction  subject to
adjustment as provided in Section 6(a) above  following the date of consummation
of such  transaction.  The provisions of this Section 6(b) shall similarly apply
to successive  reclassifications,  consolidations,  mergers, sales, transfers or
share exchanges.

      (c) If:

            (i) the  Company  shall  take any  action  which  would  require  an
            adjustment in the Exercise Price pursuant to Section 6(a); or

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<PAGE>

            (ii) the Company shall  authorize the granting to the holders of its
            Common Stock  generally of rights,  warrants or options to subscribe
            for or  purchase  any  shares  of any  class  or any  other  rights,
            warrants or options; or

            (iii)  there shall be any  reclassification  or change of the Common
            Stock (other than a subdivision or  combination  of its  outstanding
            Common Stock or a change in par value) or any consolidation,  merger
            or statutory  share exchange to which the Company is a party and for
            which approval of any  stockholders  of the Company is required,  or
            the sale or  transfer of all or  substantially  all of the assets of
            the Company; or

            (iv)  there  shall  be  a  voluntary  or  involuntary   dissolution,
            liquidation or winding up of the Company;

then,  the  Company  shall  cause to be filed  with the  transfer  agent for the
Warrants and shall cause to be mailed to each Holder at such Holder's address as
shown on the  books of the  transfer  agent for the  Warrants,  as  promptly  as
possible,  but at  least  30  days  prior  to the  applicable  date  hereinafter
specified,  a notice  stating  (A) the date on which a record is to be taken for
the purpose of such dividend,  distribution  or granting of rights,  warrants or
options, or, if a record is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such dividend,  distribution or rights,
warrants  or  options  are to be  determined,  or (B)  the  date on  which  such
reclassification, change, consolidation, merger, statutory share exchange, sale,
transfer, dissolution, liquidation or winding-up is expected to become effective
or occur,  and the date as of which it is expected  that holders of Common Stock
of record  shall be  entitled  to  exchange  their  shares  of Common  Stock for
securities or other property  deliverable  upon such  reclassification,  change,
consolidation,  merger, statutory share exchange,  sale, transfer,  dissolution,
liquidation  or winding up.  Failure to give such  notice or any defect  therein
shall not affect the legality or validity of the  proceedings  described in this
Section 6(c).

      (d)  Whenever  the  Exercise  Price is  adjusted as herein  provided,  the
Company  shall  promptly  cause a notice of the  adjusted  Exercise  Price to be
mailed to each Holder.

      (e) In any case in which Section 6(a)  provides  that an adjustment  shall
become effective immediately after a record date for an event and the date fixed
for such  adjustment  pursuant to Section 6(a) occurs after such record date but
before the  occurrence  of such  event,  the  Company may defer until the actual
occurrence  of such event (i)  issuing to the Holder of any  Warrants  exercised
after such record date and before the  occurrence  of such event the  additional
shares of Common Stock issuable upon such conversion by reason of the adjustment
required  by such  event  over and above the  Common  Stock  issuable  upon such
exercise before giving effect to such adjustment, and (ii) paying to such holder
any amount in cash in lieu of any fraction pursuant to Section 6(h).

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<PAGE>

      (f) For the purpose of any computation  under Section 2 or this Section 6,
the "Current Market Price" per share of Common Stock on any date shall be deemed
to be the  closing  price of a single  share of Common  Stock on the trading day
immediately  preceding  the date in question as reported on the  American  Stock
Exchange.  If on any such dates the Common  Stock is not listed or  admitted  to
trading on the American Stock Exchange or any other national securities exchange
and is not  quoted by NASDAQ or any  similar  organization,  the fair value of a
share of Common Stock on such date,  as determined in good faith by the board of
directors  of the  Company,  whose  determination  shall  be  conclusive  absent
manifest error, shall be used.

      (g) The  Company  shall not be required  to issue  fractions  of shares of
Common  Stock or other  capital  stock of the Company  upon the exercise of this
Warrant.  If any  fraction of a share would be issuable on the  exercise of this
Warrant (or  specified  portions  thereof),  the  Company  shall  purchase  such
fraction for an amount in cash equal to the same fraction of the Current  Market
Price of such share of Common Stock on the date of exercise of this Warrant.

      7. Transfer Taxes. The issuance of any shares or other securities upon the
exercise of this Warrant,  and the delivery of certificates or other instruments
representing  such shares or other  securities,  shall be made without charge to
the Holder for any tax or other charge in respect of such issuance.  The Company
shall not,  however,  be required to pay any tax which may be payable in respect
of any transfer  involved in the issue and delivery of any certificate in a name
other than that of the Holder and the Company  shall not be required to issue or
deliver any such certificate  unless and until the person or persons  requesting
the issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.

      8. Loss or Mutilation of Warrant. Upon receipt of evidence satisfactory to
the Company of the loss, theft,  destruction,  or mutilation of any Warrant (and
upon  surrender  of any Warrant if  mutilated),  and upon  reimbursement  of the
Company's reasonable incidental expenses,  the Company shall execute and deliver
to the Holder thereof a new Warrant of like date, tenor, and denomination.

      9. No Rights as a  Stockholder.  The Holder of any Warrant shall not have,
solely on account of such status,  any rights of a  stockholder  of the Company,
either at law or in equity,  or to any notice of meetings of  stockholders or of
any other proceedings of the Company, except as provided in this Warrant.

      10.  Governing Law. This Warrant shall be construed in accordance with the
laws of the State of Delaware  applicable to contracts made and performed within
such State, without regard to principles of conflicts of law.

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<PAGE>

      11.  Notices.  All notices  and other  communications  under this  Warrant
(except payment) shall be in writing and shall be sufficiently  given if sent to
the  Holder  or the  Company,  as the case  may be,  by hand  delivery,  private
overnight courier, with acknowledgement of receipt,  facsimile, or by registered
or certified mail, return receipt requested, as follows:

      If to Holder:      Presidio Partners
                         44 Montgomery Street, #2110
                         San Francisco, CA 94104
                         Attn: William Brady

      If to Company      Intelli-Check, Inc.
                         246 Crossways Park West
                         Woodbury, New York 11797
                         Attention: Frank Mandelbaum

Or to such other  address as any of them,  by notice to the others may designate
from time to time.  Time shall be counted  to, or from,  as the case may be, the
date of delivery in person or by  overnight  courier or five (5)  business  days
after mailing.

      12.  Remedies.  The  Company  stipulates  that the  remedies at law of the
Holder of this Warrant in the event of any default or threatened  default by the
Company  in the  performance  of or  compliance  with  any of the  terms of this
Warrant  are not and  will not be  adequate  and  that,  to the  fullest  extent
permitted by law,  such terms may be  specifically  enforced by a decree for the
specific  performance  of any  agreement  contained  herein or by an  injunction
against a violation of any of the terms hereof or otherwise.

      13.  Amendment  and Waiver.  Except as  otherwise  provided  herein,  this
Warrant may not be  modified or amended  except  pursuant  to an  instrument  in
writing  signed by the  Company  and the  holder of the  Warrant.  No  provision
hereunder  may be waived  other  than in a written  instrument  executed  by the
waiving party.

                                       10
<PAGE>

Dated: August 8, 2005

                                         Intelli-Check, Inc.

                                         /s/ Frank Madelabum
                                         ---------------------------------------
                                         By: Frank Mandelbaum
                                             Chief Executive Officer

                                       11
<PAGE>

                               FORM OF ASSIGNMENT

(To be executed by the registered  holder if such holder desires to transfer the
attached Warrant.)

FOR  VALUE  RECEIVED,   ________hereby   sells,   assigns,  and  transfers  unto
__________________  a Warrant to purchase __________ shares of Common Stock, par
value $0.001 per share, of Intelli-Check,  Inc. (the " Company" ), together with
all right, title, and interest therein,  and does hereby irrevocably  constitute
and appoint attorney to transfer such Warrant on the books of the Company,  with
full power of substitution.

Dated:
      -----------------------

By:
   --------------------------------------
   Signature

      The signature on the foregoing  Assignment  must correspond to the name as
written upon the face of this Warrant in every particular, without alteration or
enlargement or any change whatsoever.

<PAGE>

To:   Intelli-Check, Inc.
      246 Crossways Park West
      Woodbury, New York 11797
      Attention: Chief Financial Officer

                               NOTICE OF EXERCISE

      The   undersigned   hereby   exercises  his  or  its  rights  to  purchase
_______Warrant Shares in accordance with the terms thereof, and tenders herewith
payment of the exercise  price in full,  together with all  applicable  transfer
taxes, if any.

Payment shall take the form of (check applicable box):

      |_| in lawful money of the United States; or

      |_| the cancellation of such number of Warrant Shares as is necessary,  in
      accordance  with the formula set forth in Section  2(c),  to exercise this
      Warrant with respect to the maximum number of Warrant  Shares  purchasable
      pursuant to the cashless exercise procedure set forth in subsection 2(c).

      The undersigned  requests that  certificates for such securities be issued
in the name of, and delivered to:

                    ________________________________________
                    ________________________________________
                    ________________________________________

                    (Print Name, Address and Social Security
                          or Tax Identification Number)

NOTICE: THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS WRITTEN UPON
THE  FACE OF THE  WITHIN  WARRANT  IN EVERY  PARTICULAR  WITHOUT  ALTERATION  OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER.

and,  if such  number of  Warrant  Shares  shall not be all the  Warrant  Shares
covered by the within Warrant, that a new Warrant for the balance of the Warrant
Shares covered by the within Warrant be registered in the name of, and delivered
to, the undersigned at the address stated below.

<PAGE>

Dated:
      -----------------------

By:
   --------------------------------------
   Print Name

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

Address:

-----------------------------

-----------------------------

<PAGE>

SCHEDULE A

Other than in the  following  amounts of common stock for which the warrants are
exercisable,  each  of the  warrants  issued  to the  investors  in the  private
placement  named below are  exercisable  at $5.40 per share of common  stock and
identical in all other material respects.

                                                       Number of Warrants Issued
Security Holders                                       in the Private Placement
-----------------------------------------              -------------------------
WPG Software Fund, L.P.                                        110,000
SRG Capital, LLC                                                28,000
Enable Opportunity Partners, L.P.                               10,000
Enable Growth Partners, L.P.                                    30,000
Smithfield Fiduciary LLC                                        50,000
Iroquois Master Fund Ltd.                                       50,000
Gruber & McBaine International                                   7,200
Jon D. and Linda W. Gruber Trust                                10,000
RHP Master Fund, Ltd.                                           50,000
Nite Capital L.P.                                               26,000
Lagunitas Partners L.P.                                         32,800
Presidio Partners                                               24,750
Geary Partners                                                  19,450
Brady Fund L.P.                                                  5,800
Robert T. Lempert                                               10,000
Todd Cohen                                                       4,000
H. Leon Pachter, M.D.                                            8,000
H. Leon Pachter, M.D., IRA Rollover                              8,000
Joe Giamanco                                                    16,000
JMP Securities LLC                                             125,000Exhibit 10.1

This Form of Purchase  Agreement is  Representative  of the  Purchase  Agreement
under which the Selling Security Holders  Purchased their Shares of Common Stock
in the  Private  Placement.  See  Schedule A  attached  hereto for a list of the
number of shares purchased by, and warrants issued to, each purchaser.]

                               PURCHASE AGREEMENT

      THIS  AGREEMENT  is made as of the  8th  day of July  2005 by and  between
Intelli-Check,  Inc. (the "Company"),  a corporation organized under the laws of
the State of Delaware,  with its principal  offices at 246 Crossways  Park West,
Woodbury,  New York 11797, and the purchaser whose name and address is set forth
on the signature page hereof (the "Purchaser").

      IN CONSIDERATION of the mutual covenants contained in this Agreement,  the
Company and the Purchaser agree as follows:

                  SECTION 1. Authorization of Sale of the Securities. Subject to
the terms and  conditions  of this  Agreement,  the Company has  authorized  the
issuance and sale of up to (i) 275,000  shares (the  "Shares") of common  stock,
par value  $0.001  per share  (the  "Common  Stock"),  of the  Company  and (ii)
warrants (the  "Warrants")  to purchase up to 110,00 shares of common stock (the
"Warrant  Shares") at an initial  exercise price of $5.40 per share,  subject to
adjustment. The Company reserves the right to increase or decrease the number of
Shares or Warrant  Shares sold in this  private  placement  prior to the Closing
Date. The Shares and the Warrants are hereinafter sometimes referred to together
as the "Securities."

                  SECTION 2. Agreement to Sell and Purchase the  Securities.  At
the Closing  (as  defined in Section 3), the Company  will issue and sell to the
Purchaser,  and the  Purchaser  will buy from the  Company,  upon the  terms and
conditions  hereinafter set forth,  the Securities (at the purchase price) shown
below:

                                           Price Per Share
     Shares to be     Warrant Shares         And Warrant         Aggregate
      Purchased       to be Purchased        In Dollars            Price
     ------------     ---------------      ---------------       ---------
        61,875             24,750              $4.00             $247,500

      The Company  proposes  to enter into the same form of  purchase  agreement
with certain other  investors (the "Other  Purchasers")  and expects to complete
sales of the  Securities to them.  The Purchaser  and the Other  Purchasers  are
hereinafter  sometimes  collectively  referred to as the  "Purchasers," and this
Agreement and the agreements  executed by the Other  Purchasers are  hereinafter
sometimes  collectively  referred to as the  "Agreements."  The term  "Placement
Agent" shall mean JMP Securities LLC.

<PAGE>

                  SECTION 3.  Delivery of the  Securities  at the  Closing.  The
completion  of the purchase and sale of the  Securities  (the  "Closing")  shall
occur at the offices of Morrison & Foerster  LLP,  1290 Avenue of the  Americas,
New York, New York 10104 as soon as practicable  and as agreed to by the parties
hereto, within three business days following the execution of the Agreements, or
on such later date or at such  different  location as the parties shall agree in
writing,  but not prior to the date that the  conditions  for  Closing set forth
below have been  satisfied  or waived by the  appropriate  party  (the  "Closing
Date").

      At the Closing,  the Company  shall  deliver to the  Purchaser one or more
stock  certificates  representing  the  number of Shares  set forth in Section 2
above and one or more Warrant  certificates  representing  the number of Warrant
Shares  set  forth  in  Section  2  above,  each  registered  in the name of the
Purchaser,  or, if so  indicated  on the  Securities  Certificate  Questionnaire
attached  hereto as Appendix I, in such  nominee  name(s) as  designated  by the
Purchaser,  and bearing an  appropriate  legend  referring  to the fact that the
Securities were sold in reliance upon the exemption from registration  under the
Securities  Act of 1933, as amended (the  "Securities  Act") provided by Section
4(2)  thereof  and  Rule  506  thereunder.   The  name(s)  in  which  the  stock
certificates and the Warrant  certificates are to be registered are set forth in
the  Securities  Certificate  Questionnaire  attached  hereto as Appendix I. The
Company's  obligation  to complete the purchase and sale of the  Securities  and
deliver such stock certificate(s) and Warrant certificate(s) to the Purchaser at
the Closing  shall be subject to the  following  conditions,  any one or more of
which may be waived by the Company: (a) receipt by the Company of same-day funds
in the full amount of the  purchase  price for the  Securities  being  purchased
hereunder;  (b) completion of the purchases and sales under the Agreements  with
the  Purchasers;   and  (c)  the  accuracy  in  all  material  respects  of  the
representations   and   warranties   made   by  the   Purchasers   (as  if  such
representations   and  warranties  were  made  on  the  Closing  Date)  and  the
fulfillment of those undertakings of the Purchasers to be fulfilled prior to the
Closing.   The   Purchaser's   obligation  to  accept  delivery  of  such  stock
certificate(s)  and  Warrant  certificate(s)  and  to  pay  for  the  Securities
evidenced thereby shall be subject to the following conditions,  any one or more
of which may be waived by the  Purchaser:  (a) each of the  representations  and
warranties  of the Company made herein shall be accurate as of the Closing Date;
(b) the delivery to the  Purchaser by counsel to the Company of a legal  opinion
in a form reasonably satisfactory to counsel to the Placement Agent; and (c) the
fulfillment in all material respects of those  undertakings of the Company to be
fulfilled prior to Closing. The Purchaser's  obligations hereunder are expressly
not  conditioned  on the purchase by any or all of the Other  Purchasers  of the
Securities that they have agreed to purchase from the Company.

                  SECTION 4.  Representations,  Warranties  and Covenants of the
Company.  The Company hereby represents and warrants to, and covenants with, the
Purchaser as follows:

                  4.1   Organization  and   Qualification.   The  Company  is  a
corporation duly  incorporated,  validly existing and in good standing under the
laws of the State of Delaware  and the Company is  qualified to do business as a
foreign  corporation in each  jurisdiction in which  qualification  is required,
except where  failure to so qualify  would not  reasonably be expected to have a
Material  Adverse Effect (as defined  herein).  The Company has no subsidiaries.
For purposes of this Agreement,  the term "Material Adverse Effect" shall mean a
material adverse effect upon the business,  financial  condition,  properties or
results of operations of the Company.

                                       2
<PAGE>

                  4.2  Authorized  Capital  Stock.  Except  as  disclosed  in or
contemplated by the Confidential  Private Placement  Memorandum,  dated June 13,
2005 prepared by the Company, including all exhibits, supplements and amendments
thereto (the "Private  Placement  Memorandum"),  the Company had outstanding the
capital  stock  set forth  under the  heading  "Capitalization"  in the  Private
Placement  Memorandum  as  of  the  date  set  forth  therein;  the  issued  and
outstanding  shares of the Company's  Common Stock have been duly authorized and
validly issued, are fully paid and nonassessable, have been issued in compliance
with all federal and state  securities  laws, were not issued in violation of or
subject to any  preemptive  rights or other rights to subscribe  for or purchase
securities,  and conform in all  material  respects to the  description  thereof
contained  in the  Private  Placement  Memorandum.  Except as  disclosed  in the
Private Placement Memorandum,  the Company does not have outstanding any options
to purchase,  or any  preemptive  rights or other rights to subscribe  for or to
purchase,  any securities or obligations  convertible  into, or any contracts or
commitments  to issue or sell,  shares of its capital stock or any such options,
rights, convertible securities or obligations.  The description of the Company's
stock,  stock  bonus and other stock  plans or  arrangements  and the options or
other  rights  granted  and  exercised  thereunder,  set  forth  in the  Private
Placement  Memorandum  accurately and fairly  presents all material  information
with respect to such plans, arrangements, options and rights.

                  4.3  Issuance,  Sale  and  Delivery  of  the  Securities.  The
Securities  and the Warrant Shares have been duly  authorized  and, when issued,
delivered and paid for in the manner set forth in this  Agreement,  will be duly
authorized,  validly issued,  fully paid and nonassessable and free and clear of
all pledges,  liens,  restrictions and encumbrances  (other than restrictions on
transfer under state and/or federal  securities  laws),  and will conform in all
material respects to the description  thereof set forth in the Private Placement
Memorandum  as of the dates set forth  therein.  No  preemptive  rights or other
rights to subscribe for or purchase  exist with respect to the issuance and sale
of the  Securities  or the  Warrant  Shares  by the  Company  pursuant  to  this
Agreement.  No  stockholder  of the  Company  has any right  (which has not been
waived or has not expired by reason of lapse of time following  notification  of
the  Company's  intent  to file  the  registration  statement  to be filed by it
pursuant to Section 7.1 (the  "Registration  Statement")) to require the Company
to  register  the  sale of any  shares  owned  by  such  stockholder  under  the
Securities Act of 1933, as amended (the  "Securities  Act") in the  Registration
Statement.  No further approval or authority of the stockholders or the Board of
Directors  of the Company  will be  required  for the  issuance  and sale of the
Securities  or the  Warrant  Shares to be sold by the  Company  as  contemplated
herein.  The Company has reserved  from its duly  authorized  capital  stock the
maximum number of shares of Common Stock issuable pursuant to the Warrants.

                  4.4 Due Execution, Delivery and Performance of this Agreement.
The Company has full legal right,  corporate  power and  authority to enter into
this Agreement and perform the transactions  contemplated hereby. This Agreement
has been duly authorized,  executed and delivered by the Company. The execution,
delivery and  performance of this Agreement by the Company and the  consummation
of the transactions  herein  contemplated  will not violate any provision of the
certificate of incorporation or bylaws of the Company and will not result in the
creation of any lien,  charge,  security interest or encumbrance upon any assets

                                       3
<PAGE>

of the Company pursuant to the terms or provisions of, and will not (i) conflict
with,  result in the breach or violation of, or constitute,  either by itself or
upon notice or the passage of time or both, a default  under (A) any  agreement,
lease, franchise,  license, permit or other instrument to which the Company is a
party or by which the Company or any of its  properties may be bound or affected
and in each case  which  would  have a Material  Adverse  Effect,  or (B) to the
Company's  knowledge,  any  statute  or any  judgment,  decree,  order,  rule or
regulation of any court or any regulatory body,  administrative  agency or other
governmental  body applicable to the Company or any of its properties where such
conflict, breach, violation or default is likely to result in a Material Adverse
Effect.  No  consent,  approval,  authorization  or other  order  of any  court,
regulatory body,  administrative  agency or other  governmental body is required
for the  execution  and delivery of this  Agreement or the  consummation  of the
transactions contemplated by this Agreement, except for compliance with the blue
sky  laws  and  federal  securities  laws  applicable  to  the  offering  of the
Securities.  Upon the execution and delivery of this Agreement and the Warrants,
and assuming the valid  execution  thereof by the Purchaser,  this Agreement and
the  Warrants  will  constitute a valid and binding  obligation  of the Company,
enforceable  in  accordance  with its  terms,  except as  enforceability  may be
limited by  applicable  bankruptcy,  insolvency,  reorganization,  moratorium or
similar laws affecting  creditors' and contracting parties' rights generally and
except  as  enforceability  may be  subject  to  general  principles  of  equity
(regardless  of whether such  enforceability  is  considered  in a proceeding in
equity or at law) and except as the indemnification agreements of the Company in
Section  7.3 hereof may be  limited by federal or state  securities  laws or the
public policy underlying such laws.

                  4.5  Accountants.  Each of the  firms of Amper,  Politziner  &
Mattia,  P.C. and Grant  Thornton  LLP,  each of which has expressed its opinion
with  respect  to  the  consolidated  financial  statements  to be  included  or
incorporated by reference in the Registration Statement and the prospectus which
forms  a part  thereof  (the  "Prospectus"),  is an  independent  accountant  as
required  by the  Securities  Act  and the  rules  and  regulations  promulgated
thereunder (the "Rules and Regulations").

                  4.6 No Defaults.  Except as disclosed in the Private Placement
Memorandum,  the Company is not in violation or default of any  provision of its
certificate of incorporation or bylaws,  or in breach of or default with respect
to any provision of any agreement,  judgment,  decree, order, lease,  franchise,
license, permit or other instrument to which it is a party or by which it or any
of its  properties  are bound  which  could  reasonably  be  expected  to have a
Material Adverse Effect and there does not exist any state of facts which,  with
notice or lapse of time or both,  would  constitute  an event of  default on the
part of the Company as defined in such documents and which would have a Material
Adverse Effect.

                  4.7  Contracts.  Except as disclosed in the Private  Placement
Memorandum,  the Company has no material  contracts.  Any contracts described in
the Private  Placement  Memorandum  that are material to the Company are in full
force and  effect on the date  hereof;  and  neither  the  Company  nor,  to the
Company's  knowledge,  is any other  party in breach of or default  under any of
such contracts which would have a Material Adverse Effect.

                                       4
<PAGE>

                  4.8 No Actions.  Except as disclosed in the Private  Placement
Memorandum, (1) there are no legal or governmental actions, suits or proceedings
pending  and  (2)  to  the  Company's  knowledge,  there  are  no  inquiries  or
investigations,  nor are there  any legal or  governmental  actions,  suits,  or
proceedings  threatened  to which the  Company  is or may be a party or of which
property owned or leased by the Company is or may be the subject,  or related to
environmental or discrimination  matters,  which actions,  suits or proceedings,
individually  or in the  aggregate,  might  reasonably  be  expected  to  have a
Material  Adverse  Effect;  and no labor  disturbance  by the  employees  of the
Company  exists  or,  to  the  Company's  knowledge,  is  imminent  which  might
reasonably  be expected to have a Material  Adverse  Effect.  The Company is not
party to or subject to the  provisions of any  injunction,  judgment,  decree or
order of any court, regulatory body, administrative agency or other governmental
body which might reasonably be expected to have a Material Adverse Effect.

                  4.9 Properties.  The Company has good and marketable  title to
all  properties  and  assets  reflected  as  owned in the  financial  statements
included  in the Private  Placement  Memorandum,  subject to no lien,  mortgage,
pledge, charge or encumbrance of any kind except (i) those, if any, reflected in
the  financial  statements  included  in the  Private  Placement  Memorandum  or
otherwise  in the  Private  Placement  Memorandum,  or (ii) those  which are not
material in amount and do not  adversely  affect the use of such property by the
Company. The Company holds its leased properties under valid and binding leases,
with such  exceptions  as are not  materially  significant  in  relation  to its
business  taken  as a  whole.  Except  as  disclosed  in the  Private  Placement
Memorandum,  the Company  leases all such  properties  as are  necessary  to its
operations as now conducted.

                  4.10 No Material  Change.  Since December 31, 2004, and except
as  described  in the  Private  Placement  Memorandum  (i) the  Company  has not
incurred any material liabilities or obligations,  indirect,  or contingent,  or
entered into any material oral or written  agreement or other  transaction which
is not in the ordinary course of business or which could  reasonably be expected
to result in a material  reduction in the future  earnings of the Company;  (ii)
the  Company  has not  sustained  any  material  loss or  interference  with its
businesses or properties from fire, flood, windstorm, accident or other calamity
not  covered  by  insurance;  (iii) the  Company  has not paid or  declared  any
dividends  or other  distributions  with  respect to its  capital  stock and the
Company  is not in  default  in the  payment of  principal  or  interest  on any
outstanding debt obligations;  (iv) there has not been any change in the capital
stock of the Company other than the sale of the Securities hereunder,  shares or
options issued  pursuant to employee  equity  incentive  plans or purchase plans
approved  by the  Company's  Board of  Directors  and  repurchases  of shares or
options  pursuant to repurchase plans already approved by the Company's Board of
Directors,  or indebtedness not incurred in the ordinary course of business that
is material to the Company; and (v) there has not been any other event which has
caused a Material Adverse Effect.

                  4.11 Intellectual Property. Except as disclosed in the Private
Placement Memorandum: (i) the Company owns or has obtained valid and enforceable
licenses or options for the inventions, patent applications, patents, trademarks
(both registered and  unregistered),  trade names,  copyrights and trade secrets
necessary  for the  conduct of the  Company's  business as  currently  conducted
(collectively,  the  "Intellectual  Property");  and (ii) (a) there are no third

                                       5
<PAGE>

parties who have any ownership rights to any Intellectual Property that is owned
by, or has been  licensed  to, the Company  for the  products  described  in the
Private Placement Memorandum that would preclude the Company from conducting its
business as currently  conducted and have a Material Adverse Effect,  except for
the  ownership  rights of the owners of the  Intellectual  Property  licensed or
optioned by the Company; (b) there is no pending or, to the Company's knowledge,
threatened action, suit, proceeding or claim by others challenging the rights of
the Company in or to any  Intellectual  Property owned,  licensed or optioned by
the Company,  other than claims which would not reasonably be expected to have a
Material Adverse Effect; (c) there is no pending or, to the Company's knowledge,
threatened action, suit,  proceeding or claim by others challenging the validity
or scope  of any  Intellectual  Property  owned,  licensed  or  optioned  by the
Company, other than non-material actions, suits, proceedings and claims; and (d)
there is no pending or, to the Company's  knowledge,  threatened  action,  suit,
proceeding or claim by others that the Company  infringes or otherwise  violates
any patent,  trademark,  copyright,  trade secret or other  proprietary right of
others, other than non-material actions, suits, proceedings and claims.

                  4.12  Compliance.  The Company has not been advised,  nor does
the Company have reason to believe,  that it is not  conducting  its business in
compliance with all applicable laws, rules and regulations of the  jurisdictions
in which it is  conducting  its business,  including,  without  limitation,  all
applicable local, state and federal  environmental laws and regulations;  except
where failure to be so in compliance would not have a Material Adverse Effect.

                  4.13 Taxes. The Company has filed all necessary federal, state
and foreign  income and  franchise tax returns and has paid or accrued all taxes
shown as due thereon, and the Company has no knowledge of a tax deficiency which
has been or might be asserted or threatened against it which might reasonably be
expected to have a Material Adverse Effect.

                  4.14 Transfer  Taxes.  On the Closing Date, all stock transfer
or other  taxes  (other  than  income  taxes)  which are  required to be paid in
connection  with the  sale  and  transfer  of the  Securities  to be sold to the
Purchaser  hereunder  will be, or will have been,  fully paid or provided for by
the Company and all laws  imposing such taxes will be or will have been complied
with.

                  4.15  Investment  Company.  The Company is not an  "investment
company" or an "affiliated person" of, or "promoter" or "principal  underwriter"
for an investment  company,  within the meaning of the Investment Company Act of
1940, as amended.

                  4.16 Offering  Materials.  The Company has not distributed and
will  not  distribute  prior  to the  Closing  Date  any  offering  material  in
connection  with the offering and sale of the Securities  other than the Private
Placement Memorandum or any amendment or supplement thereto. Neither the Company
nor any person acting on its behalf has in the past or will  hereafter  take any
action  independent  of the Placement  Agent to sell,  offer for sale or solicit
offers to buy any  securities  of the  Company  which  would  subject the offer,
issuance or sale of the Securities,  as  contemplated by this Agreement,  to the
registration requirements of Section 5 of the Securities Act.

                                       6
<PAGE>

                  4.17 Insurance.  The Company maintains  insurance of the types
and in the amounts  that the  Company  reasonably  believes is adequate  for its
business,  including,  but not  limited  to,  insurance  covering  all  real and
personal property leased by the Company against theft, damage, destruction, acts
of  vandalism  and all other  risks  customarily  insured  against by  similarly
situated companies, all of which insurance is in full force and effect.

                  4.18 Additional Information.  The information contained in the
following  documents,  which the Placement Agent has furnished to the Purchaser,
or will furnish prior to the Closing, does not include any untrue statement of a
material fact or omit to state any material  fact required to be stated  therein
or necessary to make the statements  therein,  in the light of the circumstances
in which they were made, not misleading, as of their respective final dates:

                  (a) the  Company's  Annual  Report  on Form  10-K for the year
ended December 31, 2004;

                  (b)  the  Company's  Quarterly  Report  on Form  10-Q  for the
quarter ended March 31, 2005;

                  (c) the Company's  Definitive  Proxy Statement on Schedule 14A
filed on May 13, 2005;

                  (d) the Private  Placement  Memorandum,  including all addenda
and exhibits thereto (other than the Purchase Agreement and the Appendices); and

                  (e) all other documents, if any, filed by the Company with the
Commission since December 31, 2004 pursuant to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").

                  4.19 Price of Common  Stock.  The Company  has not taken,  and
will not take,  directly or indirectly,  any action  designed to cause or result
in,  or  which  has  constituted  or  which  might  reasonably  be  expected  to
constitute,  the stabilization or manipulation of the price of the shares of the
Common Stock to facilitate the sale or resale of the Securities.

                  4.20  Corporate   Legal   Opinion.   As  a  condition  to  the
Purchasers' obligation to purchase the Securities,  legal counsel to the Company
will  deliver  one or more  legal  opinions  to the  Placement  Agent  in a form
reasonably  satisfactory to the Placement  Agent and its counsel.  Such opinions
also shall state that each of the  Purchasers may rely thereon as though it were
addressed directly to such Purchaser.

                  4.21 Certificate.  At the Closing, the Company will deliver to
Purchaser a certificate  executed by the chief  executive  officer and the chief
financial or accounting officer of the Company, dated as of the Closing Date, in
form and substance reasonably satisfactory to the Purchasers, to the effect that
the  representations  and  warranties of the Company set forth in this Section 4
are true and correct as of the date of this Agreement and as of the Closing Date
and that the Company has complied with all the  agreements and satisfied all the
conditions  herein on its part to be  performed or satisfied on or prior to such
Closing Date.

                                       7
<PAGE>

                  4.22  Reporting  Company;  Form S-3. The Company is subject to
the  reporting  requirements  of the  Exchange  Act and has  filed  all  reports
required thereby. The Company is eligible to register the Shares and the Warrant
Shares for resale by the Purchaser on a registration statement on Form S-3 under
the Securities  Act. There exist no facts or  circumstances  (including  without
limitation any required approvals or waivers or any circumstances that may delay
or prevent the obtaining of  accountant's  consents)  that  reasonably  could be
expected  to  prohibit  or delay the  preparation  and filing of a  registration
statement  on Form S-3 that will be  available  for the resale of the Shares and
the Warrant Shares by the Purchaser.

                  4.23 Use of Proceeds.  The Company shall use the proceeds from
the sale of the  Securities as described  under "Use of Proceeds" in the Private
Placement Memorandum.

                  4.24 Non-Public  Information.  Neither the Company nor, to the
Company's  knowledge,  any person acting on behalf of the Company,  has provided
the  Purchaser  with any  information  that  the  Company  believes  constitutes
material,  non-public  information,  unless the Purchaser  had first  executed a
written non-disclosure  agreement.  On the Closing Date, the Company shall issue
the press release  described in Section 7.1(h)  hereof.  On or before 9:00 a.m.,
New York City  time,  on the first  business  day after the  Closing  Date,  the
Company shall file a Current Report on Form 8-K describing the material terms of
the transactions  contemplated by this Agreement, and attaching as an exhibit to
such Form 8-K a form of this  Agreement  and a form of Warrant  (including  such
exhibits,  the "8-K  Filing").  The  Company  shall not,  and shall use its best
efforts to cause each of its officers,  directors,  employees and agents not to,
provide the  Purchaser  with any material  nonpublic  information  regarding the
Company from and after the filing of the 8-K Filing without the express  written
consent  of the  Purchaser.  The  Company  understands  and  confirms  that  the
Purchaser  will  rely on the  representations  and  covenants  set forth in this
section in effecting transactions in securities of the Company.

                  4.25 Use of  Purchaser  Name.  Except  as may be  required  by
applicable law or regulation,  the Company shall not use the Purchaser's name or
the name of any of its  affiliates  in any  advertisement,  announcement,  press
release or other similar public  communication  unless it has received the prior
written  consent  of the  Purchaser  for the  specific  use  contemplated  or as
otherwise required by applicable law or regulation.

                  4.26 Related Party  Transactions.  No transaction has occurred
between or among the Company and its  affiliates,  officers or  directors or any
affiliate or affiliates of any such officer or director that is required to have
been described under applicable  securities laws in its Exchange Act filings and
is not so described in such filings.

                                       8
<PAGE>

                  4.27 Off-Balance Sheet Arrangements.  There is no transaction,
arrangement or other  relationship  between the Company and an unconsolidated or
other  off-balance  sheet entity that is required to be disclosed by the Company
in its Exchange Act filings and is not so disclosed or that  otherwise  would be
reasonably  likely  to  have a  Material  Adverse  Effect.  There  are  no  such
transactions,  arrangements  or other  relationships  with the Company  that may
create  contingencies  or  liabilities  that are not otherwise  disclosed by the
Company in its Exchange Act filings.

                  4.28   Governmental   Permits,   Etc.   The  Company  has  all
franchises,  licenses,  certificates and other authorizations from such federal,
state or local  government or governmental  agency,  department or body that are
currently required for the operation of the business of the Company as currently
conducted,  except  where the  failure  to  posses  currently  such  franchises,
licenses,  certificates and other  authorizations is not reasonably  expected to
have a Material  Adverse  Effect.  The  Company has not  received  any notice of
proceedings relating to the revocation or modification of any such permit which,
if the subject of an unfavorable decision,  ruling or finding,  could reasonably
be expected to have a Material Adverse Effect.

                  4.29  Financial  Statements.  The financial  statements of the
Company and the related  notes  contained in its  Exchange  Act filings  present
fairly,  in  accordance  with  generally  accepted  accounting  principles,  the
financial position of the Company as of the dates indicated,  and the results of
its  operations,  cash  flows and the  changes in  stockholders'  equity for the
periods  therein  specified,   subject,  in  the  case  of  unaudited  financial
statements  for interim  periods,  to normal  year-end audit  adjustments.  Such
financial  statements  (including  the  related  notes)  have been  prepared  in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods therein specified,  except that unaudited financial
statements  may  not  contain  all  footnotes  required  by  generally  accepted
accounting principles.

                  4.30 Listing.  The Company has not, in the two years preceding
the date hereof,  received any written notice from the American Stock  Exchange,
any stock exchange,  market or trading  facility on which the Common Stock is or
has been listed (or on which it has been  quoted) to the effect that the Company
is not in  compliance  with the  listing  or  maintenance  requirements  of such
exchange,  market  or  trading  facility.  The  Company  shall  comply  with all
requirements  of the American Stock Exchange with respect to the issuance of the
Shares and the Warrant  Shares and shall use its best efforts to have the Shares
and the Warrant  Shares listed on the American  Stock  Exchange on or before the
first  date  that  the  Registration  Statement  is  declared  effective  by the
Commission. The Common Stock is presently listed on the American Stock Exchange.

                  4.31 Sarbanes-Oxley Act; Accounting Controls.  The Company is,
and at the Closing Date will be, in material  compliance  with all provisions of
the Sarbanes-Oxley Act of 2002 which are applicable to it. The Company maintains
a system of  internal  accounting  controls  sufficient  to  provide  reasonable
assurance that (i)  transactions  are executed in accordance  with  management's
general or specific  authorization;  (ii) transactions are recorded as necessary
to permit  preparation  of financial  statements  in conformity  with  generally
accepted accounting principles and to maintain  accountability for assets; (iii)
access to assets is permitted only in accordance  with  management's  general or
specific  authorization;  and (iv) the  recorded  accountability  for  assets is
compared with existing assets at reasonable  intervals and appropriate action is
taken with respect to any differences.

                                       9
<PAGE>

                  4.32 ERISA  Compliance.  Each material  employee benefit plan,
within the meaning of Section 3(3) of the Employee  Retirement  Income  Security
Act  of  1974,  as  amended  ("ERISA"),  that  is  maintained,  administered  or
contributed  to by the Company or any of its  affiliates for employees or former
employees of the Company has been  maintained  in material  compliance  with its
terms  and the  requirements  of any  applicable  statutes,  orders,  rules  and
regulations, including but not limited to ERISA and the Internal Revenue Code of
1986, as amended (the "Code"); no prohibited transaction,  within the meaning of
Section  406 of ERISA or Section  4975 of the Code,  has  occurred  which  would
result in a material  liability  to the  Company  with  respect to any such plan
excluding  transactions  effected  pursuant  to a  statutory  or  administrative
exemption;  and for each such  plan  that is  subject  to the  funding  rules of
Section  412 of the  Code or  Section  302 of  ERISA,  no  "accumulated  funding
deficiency" as defined in Section 412 of the Code has been incurred,  whether or
not waived, and the fair market value of the assets of each such plan (excluding
for these purposes accrued but unpaid  contributions)  exceeds the present value
of all benefits accrued under such plan determined  using  reasonable  actuarial
assumptions.

                  4.33 Foreign  Corrupt  Practices.  Neither the Company nor, to
the knowledge of the Company, any director,  officer,  agent,  employee or other
Person acting on behalf of the Company has, in the course of its actions for, or
on  behalf  of,  the  Company  (i) used any  corporate  funds  for any  unlawful
contribution,  gift,  entertainment  or  other  unlawful  expenses  relating  to
political  activity;  (ii) made any direct or indirect  unlawful  payment to any
foreign or domestic  government official or employee from corporate funds; (iii)
violated  or is in  violation  of any  provision  of the  U.S.  Foreign  Corrupt
Practices  Act of 1977,  as amended;  or (iv) made any unlawful  bribe,  rebate,
payoff, influence payment,  kickback or other unlawful payment to any foreign or
domestic government official or employee.

                  4.34 Employee Relations. (a) The Company is not a party to any
collective  bargaining  agreement or employs any member of a union.  The Company
believes that its relations with its employees are good. No executive officer of
the Company (as defined in Rule 501(f) of the  Securities  Act) has notified the
Company  that such officer  intends to leave the Company or otherwise  terminate
such officer's employment with the Company. No executive officer of the Company,
to the  knowledge of the Company,  is, or is now expected to be, in violation of
any material term of any  employment  contract,  confidentiality,  disclosure or
proprietary  information  agreement,  non-competition  agreement,  or any  other
contract or agreement or any restrictive covenant,  and the continued employment
of each such  executive  officer  does not subject the Company to any  liability
with respect to any of the foregoing matters.

                  4.35  Environmental   Matters.  There  has  been  no  storage,
disposal,  generation,  manufacture,  transportation,  handling or  treatment of
toxic wastes,  hazardous  wastes or hazardous  substances by the Company (or, to
the knowledge of the Company,  any of its  predecessors in interest) at, upon or
from any of the  property  now or  previously  owned or leased by the Company in
violation of any applicable law, ordinance,  rule, regulation,  order, judgment,
decree or permit or which would  require  remedial  action under any  applicable
law, ordinance,  rule, regulation,  order, judgment, decree or permit; there has
been no material spill, discharge, leak, emission, injection, escape, dumping or
release of any kind into such property or into the environment  surrounding such
property of any toxic wastes, medical wastes, solid wastes,  hazardous wastes or
hazardous  substances  due to or caused by the Company or with  respect to which
the  Company  has  knowledge;  the terms  "hazardous  wastes",  "toxic  wastes",
"hazardous  substances",  and "medical wastes" shall have the meanings specified
in any applicable  local,  state,  federal and foreign laws or regulations  with
respect to environmental protection.

                                       10
<PAGE>

                  4.36 Equal Treatment of Purchasers. Each Purchaser has entered
into the Agreement on materially  equivalent  terms. No  consideration  shall be
offered or paid to any person to amend or consent to a waiver or modification of
any  provision  of  any of  this  Agreement  or  the  Warrant  unless  the  same
consideration  is also  offered  to all of the  parties to the  Agreements.  For
clarification  purposes,  this provision constitutes a separate right granted to
each Purchaser by the Company and negotiated  separately by each Purchaser,  and
is intended to treat for the Company the  Purchasers as a class and shall not in
any way be  construed  as the  Purchasers  acting in  concert or as a group with
respect to the purchase, disposition or voting of Securities or otherwise.

                  SECTION 5.  Representations,  Warranties  and Covenants of the
Purchaser. (a) The Purchaser represents and warrants to, and covenants with, the
Company that: (i) the Purchaser is knowledgeable,  sophisticated and experienced
in making,  and is qualified to make,  decisions  with respect to investments in
shares representing an investment decision like that involved in the purchase of
the Securities,  including  investments in securities  issued by the Company and
comparable entities, and has had the opportunity to request, receive, review and
consider all  information  it deems  relevant in making an informed  decision to
purchase the  Securities;  (ii) the  Purchaser is acquiring the  Securities  set
forth in Section 2 above in the ordinary  course of its business and for its own
account for investment only and with no present intention of distributing any of
such  Securities  or any  arrangement  or  understanding  with any other persons
regarding the distribution of such Securities (this  representation and warranty
not  limiting  the  Purchaser's  right  to  sell  pursuant  to the  Registration
Statement  or  in  compliance   with  the  Securities  Act  and  the  Rules  and
Regulations,  or, other than with respect to any claims  arising out of a breach
of this  representation  and warranty,  the Purchaser's right to indemnification
under Section 7.3); (iii) the Purchaser will not, directly or indirectly, offer,
sell,  pledge,  transfer or otherwise  dispose of (or solicit any offers to buy,
purchase or otherwise  acquire or take a pledge of) any of the  Securities,  nor
will the Purchaser engage in any short sale that results in a disposition of any
of the Securities by the Purchaser, except in compliance with the Securities Act
and the Rules and Regulations and any applicable state securities laws; (iv) the
Purchaser  has completed or caused to be completed  the  Registration  Statement
Questionnaire  attached  hereto as part of Appendix I, for use in preparation of
the Registration  Statement,  and the answers thereto are true and correct as of
the date  hereof and will be true and  correct as of the  effective  date of the
Registration  Statement and the Purchaser will notify the Company immediately of
any  material  change  in any  such  information  provided  in the  Registration
Statement  Questionnaire  until such time as the  Purchaser  has sold all of its
Shares and Warrant Shares or until the Company is no longer required to keep the
Registration Statement effective;  (v) the Purchaser has, in connection with its
decision to purchase the Securities set forth in Section 2 above,  relied solely
upon the Private  Placement  Memorandum  and the documents  included  therein or
incorporated by reference and the  representations and warranties of the Company
contained  herein;  (vi) the  Purchaser has had an  opportunity  to discuss this
investment with  representatives of the Company and ask questions of them; (vii)
the Purchaser is an "accredited  investor"  within the meaning of Rule 501(a) of
Regulation D  promulgated  under the  Securities  Act ; and (vii) the  Purchaser
agrees to notify the Company  immediately  of any change in any of the foregoing
information  until  such time as the  Purchaser  has sold all of its  Shares and
Warrant  Shares or the Company is no longer  required  to keep the  Registration
Statement effective.

                                       11
<PAGE>

                  (b) The Purchaser  understands  that the  Securities are being
offered  and  sold  to  it  in  reliance  upon  specific   exemptions  from  the
registration  requirements  of the Securities Act, the Rules and Regulations and
state  securities  laws and that the  Company  is  relying  upon the  truth  and
accuracy  of,  and  the  Purchaser's   compliance  with,  the   representations,
warranties, agreements,  acknowledgments and understandings of the Purchaser set
forth herein in order to determine the  availability  of such exemptions and the
eligibility of the Purchaser to acquire the Securities.

                  (c) For the benefit of the Company,  the Purchaser  previously
agreed orally or in writing with the Placement  Agent to keep  confidential  all
information  concerning this private placement.  The Purchaser  understands that
the  information  contained  in the  Private  Placement  Memorandum  is strictly
confidential  and  proprietary  to the  Company and has been  prepared  from the
Company's  publicly  available  documents  and  other  information  and is being
submitted to the Purchaser  solely for such  Purchaser's  confidential  use. The
Purchaser  agrees to use the  information  contained  in the  Private  Placement
Memorandum  for the sole  purpose of  evaluating  a possible  investment  in the
Securities  and the Purchaser  hereby  acknowledges  that it is prohibited  from
reproducing or distributing the Private Placement Memorandum, this Agreement, or
any other  offering  materials or other  information  provided by the Company in
connection with the Purchaser's  consideration of its investment in the Company,
in whole or in part, or divulging or discussing any of their contents, except to
its  financial,  investment or legal  advisors in  connection  with its proposed
investment  in the  Securities.  Further,  the  Purchaser  understands  that the
existence and nature of all conversations and  presentations,  if any, regarding
the Company and this offering must be kept strictly confidential.  The Purchaser
understands  that the federal  securities  laws impose  restrictions  on trading
based on information regarding this offering. In addition,  the Purchaser hereby
acknowledges that unauthorized disclosure of information regarding this offering
may result in a violation of Regulation FD. This  obligation will terminate upon
the filing by the  Company of a press  release  or press  releases  or a Current
Report on Form 8-K  describing  this  offering.  In addition  to the above,  the
Purchaser  shall maintain in confidence the receipt and content of any notice of
a Suspension (as defined in Section 5(h) below). The foregoing  agreements shall
not apply to any information  that is or becomes publicly  available  through no
fault of the Purchaser,  or that the Purchaser is legally  required to disclose;
provided, however, that if the Purchaser is requested or ordered to disclose any
such  information  pursuant to any court or other  government order or any other
applicable legal  procedure,  it shall provide the Company with prompt notice of
any such  request or order in time  sufficient  to enable the Company to seek an
appropriate protective order.

                                       12
<PAGE>

                  (d) The  Purchaser  understands  that  its  investment  in the
Securities involves a significant degree of risk, including a risk of total loss
of the  Purchaser's  investment,  and the Purchaser  has full  cognizance of and
understands all of the risk factors  related to the Purchaser's  purchase of the
Securities,  including,  but not limited  to,  those set forth under the caption
"Risk Factors" in the Private Placement  Memorandum.  The Purchaser  understands
that the  market  price  of the  Common  Stock  has  been  volatile  and that no
representation  is being made as to the future  value of the Common  Stock.  The
Purchaser has the knowledge and experience in financial and business  matters as
to be  capable  of  evaluating  the  merits  and risks of an  investment  in the
Securities  and has the ability to bear the economic  risks of an  investment in
the Securities.

                  (e) The Purchaser understands that no United States federal or
state agency or any other  government or governmental  agency has passed upon or
made any recommendation or endorsement of the Securities.

                  (f) The  Purchaser  understands  that,  (i) at all  times  the
Warrants  and  (ii)  until  such  time as the  Registration  Statement  has been
declared effective and the Shares and the Warrant Shares may be sold pursuant to
subsection  (h) below or pursuant to Rule 144 under the  Securities  Act without
any  restriction as to the number of securities as of a particular date that can
then be  immediately  sold,  the  Securities  and the Warrant Shares will bear a
restrictive legend in substantially the following form:

            "The securities  evidenced by this  certificate have not
            been  registered  under the  Securities  Act of 1933, as
            amended (the  "Securities  Act"), or the securities laws
            of any state or other  jurisdiction.  The Shares may not
            be  offered,  sold,  pledged  or  otherwise  transferred
            except (1)  pursuant to an exemption  from  registration
            under the Securities Act or (2) pursuant to an effective
            registration statement under the Securities Act, in each
            case in accordance  with all applicable  securities laws
            of the states and other  jurisdictions,  and in the case
            of a transaction  exempt from  registration,  unless the
            Company has  received  an opinion of counsel  reasonably
            satisfactory  to  it  that  such  transaction  does  not
            require  registration  under the Securities Act and such
            other applicable laws."

                  (g) The  Purchaser's  principal  executive  offices are in the
jurisdiction set forth  immediately  below the Purchaser's name on the signature
pages hereto.

                  (h) The  Purchaser  hereby  covenants  with the Company not to
make any  sale of the  Shares  or the  Warrant  Shares  under  the  Registration
Statement  without  complying  with the provisions of this Agreement and without
effectively causing the prospectus delivery requirement under the Securities Act
to be satisfied,  and the Purchaser acknowledges and agrees that such Shares and
Warrant  Shares  are  not  transferable  on the  books  of the  Company  without

                                       13
<PAGE>

registration  unless the Company has  received an opinion of counsel  reasonably
satisfactory to it that such transaction does not require registration under the
Securities Act and such other  applicable laws or the  certificate  submitted to
the transfer agent evidencing the Shares or the Warrant Shares is accompanied by
a  separate  Purchaser's  Certificate  of  Subsequent  Sale:  (i) in the form of
Appendix II hereto,  (ii) executed by an officer of, or other authorized  person
designated by, the Purchaser, and (iii) to the effect that (A) the Shares or the
Warrant Shares have been sold in accordance with the Registration Statement, the
Securities Act and any applicable  state securities or blue sky laws and (B) the
requirement of delivering a current prospectus has been satisfied. The Purchaser
will notify the Company promptly after the sale of all of its Shares and Warrant
Shares. The Purchaser acknowledges that there may occasionally be times when the
Company  must  suspend  the  use  of  the  Prospectus  forming  a  part  of  the
Registration  Statement (a "Suspension")  until such time as an amendment to the
Registration  Statement has been filed by the Company and declared  effective by
the  Commission,  or until  such time as the  Company  has filed an  appropriate
report with the  Commission  pursuant to the Exchange Act. The Purchaser  hereby
covenants  that it will not sell any Shares or Warrant  Shares  pursuant to said
Prospectus  during the period  commencing at the time at which the Company gives
the Purchaser written notice of the Suspension of the use of said Prospectus and
ending at the time the  Company  gives the  Purchaser  written  notice  that the
Purchaser   may   thereafter   effect   sales   pursuant  to  said   Prospectus.
Notwithstanding  the foregoing,  the Company agrees that no Suspension  shall be
for a period of longer than 30 consecutive  days, and no Suspension shall be for
a period of an  aggregate in any 365-day  period of longer than 45 days.  In the
event that a Suspension  is for a period of longer than 30  consecutive  days or
for a period of an aggregate in any 365-day  period of longer than 60 days,  the
Company shall pay to each Purchaser an amount, as liquidated  damages and not as
a penalty,  equal to one half of one percent  (0.5%) per month (pro rata on a 30
day basis) for the first thirty (30) days,  and  thereafter,  one percent (1.5%)
per month (pro rata on a 30 day basis), of the aggregate  purchase price paid by
such Purchaser  pursuant to this Agreement for any Securities  then held by such
Purchaser  until the  Suspension  is cured.  Such  liquidated  damages  shall be
payable monthly in cash.

                  (i) The  Purchaser  further  represents  and  warrants to, and
covenants  with,  the Company  that (i) the  Purchaser  has full  right,  power,
authority  and  capacity  to enter into this  Agreement  and to  consummate  the
transactions contemplated hereby and has taken all necessary action to authorize
the execution,  delivery and performance of this Agreement,  (ii) the making and
performance  of this  Agreement by the  Purchaser  and the  consummation  of the
transactions   herein  contemplated  will  not  violate  any  provision  of  the
organizational documents of the Purchaser or conflict with, result in the breach
or violation of, or  constitute,  either by itself or upon notice or the passage
of time or both,  a default  under any  material  agreement,  mortgage,  deed of
trust, lease, franchise, license, indenture, permit or other instrument to which
the Purchaser is a party, or any statute or any authorization, judgment, decree,
order,  rule or regulation of any court or any regulatory  body,  administrative
agency or other governmental body applicable to the Purchaser, (iii) no consent,
approval,   authorization  or  other  order  of  any  court,   regulatory  body,
administrative  agency or other governmental body is required on the part of the
Purchaser for the execution and delivery of this  Agreement or the  consummation
of the transactions  contemplated by this Agreement, (iv) upon the execution and
delivery of this Agreement,  this Agreement shall constitute a legal,  valid and
binding  obligation of the Purchaser,  enforceable in accordance with its terms,
except as enforceability  may be limited by applicable  bankruptcy,  insolvency,
reorganization,  moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding  in equity or at law) and except to the extent  enforcement  of the
indemnification  provisions,  set forth in Section 7.3 of this Agreement, may be
limited by federal or state securities laws or the public policy underlying such
laws,  and (v) there is not in effect any order  enjoining  or  restraining  the
Purchaser from entering into or engaging in any of the transactions contemplated
by this Agreement.

                                       14
<PAGE>

                  SECTION  6.  Survival  of   Representations,   Warranties  and
Agreements.  Notwithstanding  any  investigation  made  by  any  party  to  this
Agreement or by the Placement Agent, all covenants, agreements,  representations
and  warranties  made  by  the  Company  and  the  Purchaser  herein  and in the
certificates  for the  Securities  delivered  pursuant  hereto shall survive the
execution of this  Agreement,  the delivery to the  Purchaser of the  Securities
being purchased and the payment therefore.

                  SECTION 7.  Registration of the Shares and the Warrant Shares;
Compliance with the Securities Act.

                  7.1 Registration Procedures and Expenses. The Company shall:

                  (a) as soon as reasonably  practicable,  but in no event later
than ten (10)  days  following  the  Closing  Date,  prepare  and file  with the
Commission  the  Registration  Statement on Form S-3 relating to the sale of the
Shares and the Warrant  Shares by the  Purchaser and the Other  Purchasers  from
time to time on the American  Stock  Exchange or the  facilities of any national
securities   exchange   on  which  the  Common   Stock  is  then  traded  or  in
privately-negotiated transactions;

                  (b) use its best  efforts,  subject to  receipt  of  necessary
information  from the  Purchasers,  to  cause  the  Commission  to  declare  the
Registration  Statement  effective within forty-five (45) days after the Closing
Date  or,  in the  event  of a  review  of  the  Registration  Statement  by the
Commission, within sixty (60) days after the Closing Date;

                  (c) use its best efforts to promptly prepare and file with the
Commission such amendments and supplements to the Registration Statement and the
prospectus  used  in  connection  therewith  as may be  necessary  to  keep  the
Registration  Statement  effective until the earliest of (i) two years after the
effective date of the  Registration  Statement,  or (ii) such time as the Shares
and the Warrant Shares become eligible for resale by non-affiliates  pursuant to
Rule 144(k) under the Securities Act of 1933, as amended;

                  (d) furnish to the  Purchaser  with  respect to the Shares and
the Warrant  Shares  registered  under the  Registration  Statement (and to each
underwriter,  if any, of such Shares or Warrant Shares) such number of copies of
prospectuses  and such other documents as the Purchaser may reasonably  request,
in order to facilitate the public sale or other disposition of all or any of the
Shares and the Warrant Shares by the Purchaser;

                  (e) file documents required of the Company for normal Blue Sky
clearance in states  specified in writing by the Purchaser;  provided,  however,
that the  Company  shall not be required to qualify to do business or consent to
service of process in any  jurisdiction  in which it is not now so  qualified or
has not so consented;

                                       15
<PAGE>

                  (f) bear all expenses in  connection  with the  procedures  in
paragraphs  (a) through  (e) of this  Section  7.1 and the  registration  of the
Shares and the Warrant Shares pursuant to the Registration Statement, other than
fees and expenses,  if any, of counsel or other advisers to the Purchaser or the
Other  Purchasers or  underwriting  discounts,  brokerage  fees and  commissions
incurred by the Purchaser or the Other Purchasers, if any;

                  (g) file a Form D with respect to the  Securities  as required
under Regulation D and to provide a copy thereof to the Purchaser promptly after
filing;

                  (h)  issue  a  press  release   describing  the   transactions
contemplated by this Agreement on the Closing Date; and

                  (i)  make  available,  while  the  Registration  Statement  is
effective and available for resale, its Chief Executive Officer, Chief Financial
Officer,  and Chief Operating Officer for questions regarding  information which
the  Purchaser  may  reasonably  request in order to fulfill  any due  diligence
obligation on its part.

      The Company understands that the Purchaser disclaims being an underwriter,
but the Purchaser  being deemed an underwriter  shall not relieve the Company of
any  obligations  it  has  hereunder.  A  questionnaire  related  thereto  to be
completed by the Purchaser is attached hereto as Appendix I.

                  7.2 Transfer of Shares and Warrant Shares After  Registration.
The Purchaser  agrees that it will not effect any  disposition of the Securities
or the Warrant  Shares or its right to purchase  the  Securities  or the Warrant
Shares that would  constitute a sale within the meaning of the Securities Act or
any applicable state securities laws, except as contemplated in the Registration
Statement referred to in Section 7.1 or as otherwise  permitted by law, and that
it will promptly  notify the Company of any changes in the information set forth
in  the  Registration   Statement   regarding  the  Purchaser  or  its  plan  of
distribution.

                  7.3 Indemnification. For the purpose of this Section 7.3:

                  (i) the term "Purchaser/Affiliate" shall mean any affiliate of
                  the  Purchaser,  including a transferee who is an affiliate of
                  the  Purchaser,  and any person who controls the  Purchaser or
                  any affiliate of the  Purchaser  within the meaning of Section
                  15 of the  Securities  Act or Section 20 of the Exchange  Act;
                  and

                  (ii) the  term  "Registration  Statement"  shall  include  any
                  preliminary prospectus, final prospectus,  exhibit, supplement
                  or  amendment  included  in or relating  to, and any  document
                  incorporated  by  reference  in,  the  Registration  Statement
                  referred to in Section 7.1.

                  (a) The Company  agrees to indemnify  and hold  harmless  each
Purchaser  and each  Purchaser/Affiliate  against any losses,  claims,  damages,
liabilities  or  expenses,   joint  or  several,  to  which  such  Purchaser  or
Purchaser/Affiliate  may become subject,  under the Securities Act, the Exchange
Act, or any other federal or state statutory law or regulation, or at common law

                                       16
<PAGE>

or otherwise  (including in settlement of any litigation,  if such settlement is
effected with the prior written consent of the Company), insofar as such losses,
claims,  damages,  liabilities  or expenses  (or  actions in respect  thereof as
contemplated  below)  arise out of or are based  upon any  untrue  statement  or
alleged  untrue  statement of any material  fact  contained in the  Registration
Statement, including the Prospectus, financial statements and schedules, and all
other documents filed as a part thereof, as amended at the time of effectiveness
of the  Registration  Statement,  including any information  deemed to be a part
thereof as of the time of effectiveness  pursuant to paragraph (b) of Rule 430A,
or pursuant to Rule 434, of the Rules and Regulations, or the Prospectus, in the
form first filed with the Commission pursuant to Rule 424(b) of the Regulations,
or filed as part of the  Registration  Statement at the time of effectiveness if
no Rule 424(b) filing is required,  or any amendment or supplement  thereto,  or
arise out of or are based upon the omission or alleged  omission to state in any
of them a material fact  required to be stated  therein or necessary to make the
statements in any of them, in light of the  circumstances  under which they were
made,  not  misleading,  or arise out of or are based in whole or in part on any
inaccuracy in the representations or warranties of the Company contained in this
Agreement, or any failure of the Company to perform its obligations hereunder or
under  law,  and will  promptly  reimburse  each  such  Purchaser  and each such
Purchaser/Affiliate  for any legal  and  other  expenses  as such  expenses  are
reasonably incurred by such Purchaser or such  Purchaser/Affiliate in connection
with investigating,  defending or preparing to defend, settling, compromising or
paying any such loss, claim, damage, liability,  expense or action not to exceed
the  proceeds  from  the  purchase  and  sale  of the  Securities  paid  by such
Purchaser;  provided,  however,  that the Company will not be liable in any such
case to the extent, but only to the extent,  that any such loss, claim,  damage,
liability or expense  arises out of or is based upon (i) an untrue  statement or
alleged  untrue   statement  or  omission  or  alleged   omission  made  in  the
Registration Statement, the Prospectus or any amendment or supplement thereto in
reliance  upon and in  conformity  with  written  information  furnished  to the
Company by or on behalf of the Purchaser  expressly for use therein, or (ii) the
failure of such Purchaser to comply with the covenants and agreements  contained
in Sections 5 or 7.2, or (iii) the inaccuracy of any  representation or warranty
made by  such  Purchaser  herein  or  (iv)  any  statement  or  omission  in any
Prospectus that is corrected in any subsequent  Prospectus that was delivered to
the Purchaser prior to the pertinent sale or sales by the Purchaser.

                  (b) Each Purchaser will severally  indemnify and hold harmless
the Company,  each of its directors,  each of its executive officers,  including
such officers who signed the Registration  Statement,  and each person,  if any,
who controls the Company  within the meaning of Section 15 of the Securities Act
or  Section  20 of the  Exchange  Act,  against  any  losses,  claims,  damages,
liabilities or expenses to which the Company, each of its directors, each of its
officers who signed the Registration  Statement or controlling person may become
subject,  under the  Securities  Act, the Exchange  Act, or any other federal or
state statutory law or regulation,  or at common law or otherwise  (including in
settlement of any  litigation,  if such  settlement is effected with the written
consent of such Purchaser) insofar as such losses, claims, damages,  liabilities
or expenses (or actions in respect thereof as  contemplated  below) arise out of
or are based upon (i) any failure to comply with the  covenants  and  agreements
contained  in  Sections  5  or  7.2  hereof,  or  (ii)  the  inaccuracy  of  any
representation or warranty made by such Purchaser herein, or (iii) any untrue or
alleged  untrue  statement of any material  fact  contained in the  Registration
Statement, the Prospectus,  or any amendment or supplement thereto, or arise out
of or are  based  upon the  omission  or  alleged  omission  to state  therein a
material fact required to be stated  therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such  untrue  statement  or alleged  untrue  statement  or  omission  or alleged

                                       17
<PAGE>

omission  was  made  in  the  Registration  Statement,  the  Prospectus,  or any
amendment or supplement thereto, in reliance upon and in conformity with written
information  furnished to the Company by or on behalf of any Purchaser expressly
for use therein, and will reimburse the Company, each of its directors,  each of
its officers who signed the Registration Statement or controlling person for any
legal  and  other  expense  reasonably  incurred  by the  Company,  each  of its
directors,  each of its  officers  who  signed  the  Registration  Statement  or
controlling  person  in  connection  with  investigating,  defending,  settling,
compromising  or paying  any such loss,  claim,  damage,  liability,  expense or
action.  Notwithstanding  anything hereon contained to the contrary, in no event
shall the liability of any Purchaser be greater in amount than the dollar amount
of the net  proceeds  received  by such  Purchaser  upon the sale of the  Shares
giving rise to such indemnification obligation.

                  (c) Promptly after receipt by an indemnified  party under this
Section  7.3 of  notice  of the  threat  or  commencement  of any  action,  such
indemnified  party will, if a claim in respect  thereof is to be made against an
indemnifying  party under this Section  7.3,  promptly  notify the  indemnifying
party in writing thereof;  but the omission so to notify the indemnifying  party
will not  relieve  it from any  liability  which it may have to any  indemnified
party for contribution or otherwise under the indemnity  agreement  contained in
this Section 7.3 to the extent it is not prejudiced as a result of such failure.
In case any such  action  is  brought  against  any  indemnified  party and such
indemnified party seeks or intends to seek indemnity from an indemnifying party,
the  indemnifying  party will be entitled to participate  in, and, to the extent
that  it may  wish,  jointly  with  all  other  indemnifying  parties  similarly
notified, to assume the defense thereof with counsel reasonably  satisfactory to
such indemnified party; provided,  however, if the defendants in any such action
include  both  the  indemnified  party  and  the  indemnifying   party  and  the
indemnified  party  shall  have  reasonably  concluded,  based on an  opinion of
counsel reasonably  satisfactory to the indemnifying  party, that there may be a
conflict of interest  between the  positions of the  indemnifying  party and the
indemnified party in conducting the defense of any such action or that there may
be legal  defenses  available to it and/or other  indemnified  parties which are
different from or additional to those available to the  indemnifying  party, the
indemnified  party or parties shall have the right to select separate counsel to
assume such legal  defenses and to otherwise  participate in the defense of such
action on behalf of such  indemnified  party or parties.  Upon receipt of notice
from the indemnifying  party to such indemnified party of its election to assume
the defense of such action and approval by the indemnified party of counsel, the
indemnifying  party  will not be liable to such  indemnified  party  under  this
Section  7.3 for any  legal  or other  expenses  subsequently  incurred  by such
indemnified  party  in  connection  with  the  defense  thereof  unless  (i) the
indemnified  party  shall have  employed  such  counsel in  connection  with the
assumption  of legal  defenses in  accordance  with the proviso to the preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable  for  the  expenses  of  more  than  one  separate  counsel,   reasonably
satisfactory to such  indemnifying  party,  representing  all of the indemnified
parties who are parties to such action) or (ii) the indemnifying party shall not
have  employed  counsel  reasonably  satisfactory  to the  indemnified  party to
represent  the  indemnified  party  within a  reasonable  time  after  notice of
commencement of action,  in each of which cases the reasonable fees and expenses
of counsel shall be at the expense of the indemnifying  party. In no event shall
any indemnifying party be liable in respect of any amounts paid in settlement of
any action  unless the  indemnifying  party  shall have  approved in writing the
terms of such  settlement;  provided that such consent shall not be unreasonably
withheld.  No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in  respect  of which any  indemnified  party is or could  have been a party and
indemnification  could have been sought hereunder by such indemnified party from
all liability on claims that are the subject matter of such proceeding.

                                       18
<PAGE>

                  (d) If the indemnification provided for in this Section 7.3 is
required  by its  terms  but is for  any  reason  held to be  unavailable  to or
otherwise  insufficient to hold harmless an indemnified  party under  paragraphs
(a), (b) or (c) of this Section 7.3 in respect to any losses,  claims,  damages,
liabilities or expenses  referred to herein,  then each applicable  indemnifying
party shall contribute to the amount paid or payable by such  indemnified  party
as a result of any losses, claims, damages,  liabilities or expenses referred to
herein (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Purchaser  from the private  placement of Common
Stock  hereunder or (ii) if the  allocation  provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the  relative  benefits  referred  to in clause (i) above but the  relative
fault of the Company and the  Purchaser in  connection  with the  statements  or
omissions  or  inaccuracies  in  the  representations  and  warranties  in  this
Agreement  and/or the  Registration  Statement  which  resulted in such  losses,
claims,  damages,  liabilities  or  expenses,  as  well  as any  other  relevant
equitable  considerations.  The  respective  relative  benefits  received by the
Company on the one hand and each Purchaser on the other shall be deemed to be in
the same proportion as the amount paid by such Purchaser to the Company pursuant
to this Agreement for the Securities  purchased by such Purchaser that were sold
pursuant  to  the   Registration   Statement   bears  to  the  difference   (the
"Difference")  between the amount such  Purchaser  paid for the Shares that were
sold  pursuant to the  Registration  Statement  and the amount  received by such
Purchaser from such sale.  The relative  fault of the Company,  on the one hand,
and each Purchaser on the other shall be determined by reference to, among other
things,  whether  the untrue or  alleged  statement  of a  material  fact or the
omission or alleged  omission to state a material fact or the  inaccurate or the
alleged  inaccurate   representation  and/or  warranty  relates  to  information
supplied by the Company or by such Purchaser and the parties'  relative  intent,
knowledge,  access to  information  and  opportunity  to correct or prevent such
statement or omission.  The amount paid or payable by a party as a result of the
losses,  claims,  damages,  liabilities and expenses  referred to above shall be
deemed to include, subject to the limitations set forth in paragraph (c) of this
Section  7.3,  any legal or other fees or expenses  reasonably  incurred by such
party in connection  with  investigating  or defending any action or claim.  The
provisions  set forth in  paragraph  (c) of this Section 7.3 with respect to the
notice of the threat or  commencement  of any threat or action  shall apply if a
claim  for  contribution  is to be made  under  this  paragraph  (d);  provided,
however,  that no additional notice shall be required with respect to any threat
or action for which  notice has been given under  paragraph  (c) for purposes of
indemnification.  The Company and each Purchaser agree that it would not be just
and  equitable  if  contribution  pursuant to this  Section 7.3 were  determined
solely by pro rata allocation  (even if the Purchaser were treated as one entity
for such  purpose)  or by any other  method of  allocation  which  does not take
account  of  the  equitable   considerations  referred  to  in  this  paragraph.
Notwithstanding  the  provisions  of this  Section  7.3, no  Purchaser  shall be
required  to  contribute  any  amount  in  excess  of the  amount  by which  the
Difference  exceeds the amount of any damages that such  Purchaser has otherwise
been  required to pay by reason of such untrue or alleged  untrue  statement  or
omission or alleged omission.  No person guilty of fraudulent  misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution   from  any  person   who  was  not   guilty  of  such   fraudulent
misrepresentation.  The Purchasers'  obligations to contribute  pursuant to this
Section 7.3 are several and not joint.

                                       19
<PAGE>

                  7.4   Termination   of   Conditions   and   Obligations.   The
restrictions  imposed by Section 5 or this Section 7 upon the transferability of
the  Securities  and the  Warrant  Shares  shall cease and  terminate  as to any
particular  number of the Shares or Warrant Shares upon the passage of two years
from the effective date of the Registration  Statement  covering such Shares and
Warrant Shares or at such time as an opinion of counsel satisfactory in form and
substance  to the  Company  shall have been  rendered  to the  effect  that such
conditions are not necessary in order to comply with the Securities Act.

                  7.5  Information  Available.   So  long  as  the  Registration
Statement is effective covering the resale of Shares and Warrant Shares owned by
the Purchaser, the Company will furnish to the Purchaser:

                  (a) other than any such reports or  communications  filed with
the Commission pursuant to the Commission's EDGAR system, as soon as practicable
after  available  (but in the case of the  Annual  Report  to the  Stockholders,
within 150 days after the end of each fiscal year of the  Company),  one copy of
(i) its  Annual  Report to  Stockholders  (which  Annual  Report  shall  contain
financial  statements audited in accordance with generally  accepted  accounting
principles  by a national  firm of certified  public  accountants),  (ii) if not
included in substance in the Annual Report to Stockholders,  upon the request of
Purchaser,  its Annual Report on Form 10-K, (iii) upon request of Purchaser, its
quarterly  reports  on  Form  10-Q,  and  (iv) a  full  copy  of the  particular
Registration   Statement  covering  the  Shares  and  the  Warrant  Shares  (the
foregoing, in each case, excluding exhibits);

                  (b) upon the reasonable request of the Purchaser, a reasonable
number of copies of the Prospectuses,  and any supplements thereto, to supply to
any other party requiring such Prospectuses;

and the Company,  upon the  reasonable  request of the  Purchaser and with prior
notice,  will be available to the Purchaser or a  representative  thereof at the
Company's  headquarters  to discuss  information  relevant for disclosure in the
Registration  Statement  covering  the  Shares and the  Warrant  Shares and will
otherwise  cooperate  with any  Purchaser  conducting an  investigation  for the
purpose of reducing or eliminating such Purchaser's  exposure to liability under
the Securities  Act,  including the reasonable  production of information at the
Company's headquarters, subject to appropriate confidentiality limitations.

                  7.6  Liquidated   Damages.   In  the  event  the  Registration
Statement is not declared  effective  within  forty-five (45) days following the
Closing Date, or in the event of a review of the  Registration  Statement by the
Commission, within sixty (60) days after the Closing Date, the Company shall pay
to each Purchaser an amount, as liquidated  damages and not as a penalty,  equal
to one half of one percent (0.5%) per month (pro rata on a 30 day basis) for the
first thirty (30) days, and  thereafter,  one percent (1.5%) per month (pro rata
on a 30 day  basis),  of the  aggregate  purchase  price paid by such  Purchaser
pursuant to this Agreement for any Securities  then held by such Purchaser until
the Registration Statement is declared effective.  Such liquidated damages shall
be payable monthly in cash.

                                       20
<PAGE>

                  SECTION 8. Right of First Offer.

                  8.1  Subject  to the terms and  conditions  specified  in this
Section 8, the Company hereby grants to each  Purchaser,  for the 365 day period
following  the Closing Date, a right of first offer with respect to future sales
by the Company of shares of any class of its capital  stock,  or any  securities
convertible or exercisable therefor ("First Offer Shares").

                  8.2 Each time the Company  proposes to offer any shares of, or
securities  convertible  into or  exercisable  for any First Offer  Shares,  the
Company  shall first make an offer of such First Offer Shares to each  Purchaser
in accordance with the following provisions:

                  (a) The Company shall deliver a notice (the  "Notice") to each
Purchaser  stating (A) its bona fide intention to offer such First Offer Shares,
(B) the number of such First  Offer  Shares to be offered  and (C) the price and
terms, if any, upon which it proposes to offer such First Offer Shares.

                  (b) Within  seven (7) days after  receipt of the Notice,  each
Purchaser  may  elect to  purchase  or  obtain,  at the  price  and on the terms
specified  in the Notice,  that  portion of such First Offer Shares which equals
the proportion that the number of shares of Common Stock issued and held by such
Purchaser  bears to the total  number of shares of Common  Stock of the  Company
(assuming  full  conversion  and  exercise  of all  convertible  or  exercisable
securities)  then held by all of the  shareholders  of the Company.  The Company
shall promptly, in writing, inform each Purchaser which purchases all the shares
available  to it (a  "Fully-Exercising  Purchaser")  of  any  other  Purchaser's
failure to do likewise. During the seven (7) day period commencing after receipt
of such information, each Fully-Exercising Purchaser shall be entitled to obtain
that  portion of the Shares not  subscribed  for by the  Purchaser  equal to the
proportion  that the  number of shares of Common  Stock  issued and held by such
Fully-Exercising  Purchaser  bears to the total number of shares of Common Stock
issued and held by all Fully-Exercising  Purchasers who wish to purchase some of
the unsubscribed First Offer Shares.

                  (c) If all of the First  Offer  Shares  are not  elected to be
obtained as provided in subsection  8.2(b), the Company may, during the fourteen
(14) day period  following the  expiration of the period  provided in subsection
8.2(b)  hereof,  offer the  remaining  unsubscribed  portion of such First Offer
Shares to any person or persons at a price not less than, and upon terms no more
favorable to the offeree than those specified in the Notice. If the Company does
not enter into an agreement  for the sale of the First Offer Shares  within such
period, or if such agreement is not consummated within fourteen (14) days of the
execution  thereof,  the right provided  hereunder shall be deemed to be revived
and such First Offer Shares shall not be offered  unless first  reoffered to the
Purchasers in accordance herewith.

                  (d) The  right of first  offer in this  Section 8 shall not be
applicable  (i) to the  issuance  of sale of shares of Common  Stock (or options
therefor) to directors,  officers,  employees or  consultants of the Company for
the primary  purpose of soliciting or retaining  their  services (or for similar
compensatory  purposes) or (ii) to or after  consummation of a bona fide, firmly
underwritten  public offering of the Company under the Securities Act,  pursuant
to a  registration  statement on Form S-1, or (iii) the  issuance of  securities
pursuant  to the  conversion  or  exercise of  then-outstanding  convertible  or
exercisable securities.

                                       21
<PAGE>

                  SECTION 9. Broker's Fee. The Purchaser  acknowledges  that the
Company  intends to pay to the  Placement  Agent a fee in respect of the sale of
the Securities to the Purchaser. The Purchaser and the Company hereby agree that
the Purchaser  shall not be  responsible  for such fee and that the Company will
indemnify and hold harmless the Purchaser and each  Purchaser/Affiliate  against
any losses, claims, damages, liabilities or expenses, joint or several, to which
such  Purchaser or  Purchaser/Affiliate  may become subject with respect to such
fee.  Each of the parties  hereto  hereby  represents  that, on the basis of any
actions and agreements by it, there are no other brokers or finders  entitled to
compensation in connection with the sale of the Securities to the Purchaser.

                  SECTION  10.  Notices.   All  notices  required  or  permitted
hereunder shall be in writing and shall be deemed  effectively  given:  (i) upon
delivery to the party to be notified;  (ii) when received by confirmed facsimile
or (iii)  one (1)  business  day  after  deposit  with a  nationally  recognized
overnight  carrier,   specifying  next  business  day  delivery,   with  written
verification of receipt. All communications shall be sent to the Company and the
Purchaser as follows or at such other  addresses as the Company or the Purchaser
may designate upon ten (10) days' advance written notice to the other party:

                  (a)   if to the Company, to:

                  Intelli-Check, Inc.
                  246 Crossways Park West
                  Woodbury, New York 11797
                  Attn: Edwin Winiarz
                  Facsimile: (516) 992-1918

                  with a copy to:

                  Mitchell S. Nussbaum, Esq.
                  Loeb & Loeb LLP
                  345 Park Avenue
                  New York, New York 10154
                  Facsimile: (212) 407-4990

                  (b) if to the  Purchaser,  at its  address as set forth at the
end of this Agreement.

                  SECTION 11.  Changes.  This  Agreement  may not be modified or
amended  except  pursuant to an instrument in writing  signed by the Company and
the  Purchaser.  No  provision  hereunder  may be waived other than in a written
instrument executed by the waiving party.

                                       22
<PAGE>

                  SECTION 12. 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.

                  SECTION 13.  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.

                  SECTION 14. Governing Law. This Agreement shall be governed by
and  construed  in  accordance  with the  laws of the  State of New York and the
federal law of the United States of America.

                  SECTION 15.  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 (including by facsimile) to the other parties.

                  SECTION  16.  Entire   Agreement.   This   Agreement  and  the
instruments  referenced  herein contain the entire  understanding of the parties
with  respect  to  the  matters  covered  herein  and  therein  and,  except  as
specifically set forth herein or therein,  neither the Company nor the Purchaser
makes any representation, warranty, covenant or undertaking with respect to such
matters.

                  SECTION 17. Assignment. Except as otherwise expressly provided
herein,  the  provisions  hereof  shall  inure to the benefit of, and be binding
upon, the parties hereto and their  respective  permitted  successors,  assigns,
heirs,  executors  and  administrators.  This  Agreement  and the  rights of the
Purchaser  hereunder  may be assigned by the  Purchaser  with the prior  written
consent of the Company,  except such  consent  shall not be required in cases of
assignments by an investment adviser to a fund for which it is the adviser or by
or among funds that are under common control, provided that such assignee agrees
to be bound by the terms of this Agreement.

                  SECTION 18. Further Assurances. Each party agrees to cooperate
fully with the other parties and to execute such further instruments,  documents
and agreements and to give such further  written  assurance as may be reasonably
requested by any other party to evidence and reflect the transactions  described
herein and contemplated hereby and to carry into effect the intents and purposes
of this Agreement.

                  SECTION 19. Independent Nature of Purchasers'  Obligations and
Rights.  The  obligations of the Purchaser  under this Agreement are several and
not joint with the obligations of any Other Purchaser, and no Purchaser shall be
responsible  in any way for the  performance  of the  obligations  of any  Other
Purchaser  under the  Agreements.  The  decision of each  Purchaser  to purchase
Securities   pursuant  to  the  Agreements  has  been  made  by  such  Purchaser
independently of any other Purchaser.  Nothing contained in the Agreements,  and
no action taken by any Purchaser pursuant thereto, shall be deemed to constitute
the Purchasers as a partnership,  an  association,  a joint venture or any other
kind of  entity,  or create a  presumption  that the  Purchasers  are in any way
acting  in  concert  or as a  group  with  respect  to such  obligations  or the
transactions contemplated by the Agreements. Each Purchaser acknowledges that no
other  Purchaser has acted as agent for such Purchaser in connection with making
its  investment  hereunder and that no Purchaser will be acting as agent of such
Purchaser in connection  with  monitoring  its  investment in the  Securities or
enforcing its rights under this  Agreement.  Each Purchaser shall be entitled to
independently  protect and enforce its rights,  including without limitation the
rights  arising out of this  Agreement,  and it shall not be  necessary  for any
other  Purchaser to be joined as an additional  party in any proceeding for such
purpose.

                                       23
<PAGE>

      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.

                                  INTELLI-CHECK, INC.

                                  By /s/ Frank Mandelbaum
                                     -------------------------------------------
                                     Name:  Frank Mandelbaum
                                     Title: Chief Executive Officer

                                  NAME OF PURCHASER:

                                  PRESIDIO PARTNERS
                                  By William Brady, its General Partner

                                  /s/ William Brady
                                  ----------------------------------------------

                                  See also SCHEDULE A attached hereto.

<PAGE>

                     SUMMARY INSTRUCTION SHEET FOR PURCHASER

         (to be read in conjunction with the entire Purchase Agreement
                              which this follows)

      A. Complete the following items on BOTH Purchase  Agreements  (Please sign
      two originals):

1.    Page 24 - Signature:

      (i)   Name of Purchaser (Individual or Institution)

      (ii)  Name of Individual representing Purchaser (if an Institution)

      (iii) Title of Individual representing Purchaser (if an Institution)

      (iv)  Signature  of  Individual   Purchaser  or  Individual   representing
            Purchaser

2.    Appendix I - Securities Certificate  Questionnaire/Registration  Statement
      Questionnaire:

      Provide  the   information   requested  by  the   Securities   Certificate
      Questionnaire and the Registration Statement Questionnaire.

3.    Return BOTH properly  completed and signed Purchase  Agreements  including
      the properly  completed  Appendix I to (initially  by facsimile  with hand
      copy by overnight delivery):

            JMP Securities LLC
            600 Montgomery Street
            San Francisco, California 94111
            Facsimile: (415) 835-8920
            Attn: Kevin McClellan

      B.  Instructions  regarding  the transfer of funds for the purchase of the
      Securities  will be sent by  facsimile to the  Purchaser by the  Placement
      Agent at a later date.

      C. Upon the resale of the Shares or the Warrant  Shares by the  Purchasers
      after the  Registration  Statement  covering  the Shares  and the  Warrant
      Shares  is  effective,  as  described  in  the  Purchase  Agreement,   the
      Purchaser:

      (i)   must  deliver  a  current  prospectus  of the  Company  to the buyer
            (prospectuses  must be obtained from the Company at the  Purchaser's
            request); and

      (ii)  must send a letter in the form of Appendix II to the Company so that
            the Shares or the Warrant Shares may be properly transferred.

<PAGE>

                                                                      Appendix I

                               INTELLI-CHECK, INC.
                      SECURITIES CERTIFICATE QUESTIONNAIRE

      Pursuant  to  Section  3 of the  Agreement,  please  provide  us with  the
following information:

1.    The    exact    name   that   your
      Securities are to be registered in
      (this is the name that will appear
      on your stock certificate(s)). You
      may   use  a   nominee   name   if
      appropriate:                            __________________________________

2.    The   relationship   between   the
      Purchaser  of the  Securities  and
      the  Registered  Holder  listed in
      response to item 1 above:               __________________________________

3.    The   mailing   address   of   the
      Registered    Holder   listed   in
      response to item 1 above:               __________________________________

4.    The Social  Security Number or Tax
      Identification   Number   of   the
      Registered    Holder   listed   in
      response to item 1 above:               __________________________________

<PAGE>

                                                                      Appendix I

                               INTELLI-CHECK, INC.
                      REGISTRATION STATEMENT QUESTIONNAIRE

                         Intelli-Check, Inc. ("Company")

                        SELLING STOCKHOLDER QUESTIONNAIRE

      The following  information  is requested  for use in  connection  with the
preparation of a registration  statement  registering shares of our common stock
(the "Shares") and shares of our common stock issuable upon exercise of warrants
(the "Warrant  Shares") for resale by you as a selling  stockholder.  The Shares
and Warrant Shares,  which you acquired in connection with the Company's private
placement  (the  "Private  Placement"),  will  be  included  in  a  Registration
Statement on Form S-3 filed under the Securities Act of 1933 (the "Act").

      Please complete and sign one copy of this questionnaire,  and return it to
Mitchell S. Nussbaum, Esq., Loeb & Loeb LLP, 345 Park Avenue, New York, New York
10154 at your earliest opportunity.

      Kindly  note that while some of the  information  requested  herein may be
deemed  not  material  and  therefore  not  required  to  be  disclosed  in  the
registration  statement  relating to the proposed  public  offering,  you should
provide all the information requested.

                               ITEM 1. DEFINITIONS

      Before you complete this  Questionnaire,  please give consideration to the
following definitions of various terms used in this Questionnaire.

            "Associate",  as used throughout this  questionnaire,  means (a) any
corporation or organization  (other than the Company or any of its subsidiaries)
of which you are an officer,  director or partner or of which you are,  directly
or  indirectly,  the  beneficial  owner  of 5% or more of any  class  of  equity
securities,  (b) any  trust or other  estate  in  which  you have a  substantial
beneficial  interest  or as to  which  you  serve  as  trustee  or in a  similar
capacity,  (c) your  spouse,  (d) any relative of your spouse or any relative of
yours  who has the  same  home as you or who is a  director  or  officer  of key
executive of the Company or any of its subsidiaries,  (e) any partner, syndicate
member or person with whom you have agreed to act in concert with respect to the
acquisition,   holding,  voting  or  disposition  of  shares  of  the  Company's
securities.

            "Beneficially",  when  used in  connection  with  the  ownership  of
securities,  means (a) any interest in a security  which  entitled you to any of
the rights or  benefits  of  ownership  even  though you may not be the owner of
record or (b) securities  owned by you directly or indirectly,  including  those
held by you for your own benefit (regardless of how registered),  and securities
held by others  for your  benefit  (regardless  of how  registered),  such as by
custodians,  brokers, nominees, pledgees, etc., and including securities held by
an estate or trust in which you have an  interest  as  legatee  or  beneficiary,
securities owned by a partnership of which you are a partner, securities held by
a personal holding company of which you are a stockholder,  etc., and securities
held in the name of your spouse,  minor  children and any relative  (sharing the
same home). A "beneficial owner" of a security includes any person who, directly
or indirectly, through any contract, arrangement, understanding, relationship or
other wise has or shares:

<PAGE>

            (1)   voting power which  includes  the power to vote,  or to direct
                  the voting of, such security; and/or

            (2)   investment  power which  includes the power to dispose,  or to
                  direct the disposition, of such security.

In addition to being  beneficial  owner of  securities  over which you have,  or
share,  voting or investment power, you are deemed to be the beneficial owner of
a  security  if you have a right,  within  sixty  days,  to  acquire  beneficial
ownership  of (i.e.,  the right to obtain or share  voting or  investment  power
over) such security. Examples of such rights would include the right to acquire:
(i) through the exercise of any option,  warrant or similar right;  (ii) through
conversion of any  security;  or (iii)  pursuant to the power to revoke,  or the
provision  for  automatic  termination  of, a trust,  discretionary  account  or
options,  convertible  securities  or  power  to  revoke  such a trust  with the
"purpose or effect" or changing or  influencing  control  underlying  securities
upon such acquisition, without regard to the sixty day rule state above.

            "Control" means the possession, directly or indirectly, of the power
to direct or cause the  direction  of the  management  and policies of a person,
whether through the ownership of voting securities, by contract or otherwise.

            A "Control  Person" of a specified person is a person that directly,
or indirectly through one or more intermediaries, controls the person specified.

            "Material", when used in this questionnaire to qualify a requirement
for the  furnishing of  information  as to any subject,  limits the  information
required  to those  matters  as to  which  an  average  prudent  investor  ought
reasonable to be informed before purchasing the securities of the Company.

            "Material  Relationship"  has not been defined by the Securities and
Exchange Commission. However, the Commission has indicated that it will probably
construe as a "material  relationship"  any relationship  which tends to prevent
armslength  bargaining in dealings with a company,  whether arising from a close
business  connection  or family  relationship,  a  relationship  of  control  or
otherwise.  It seems prudent,  therefore, to consider that you would have such a
relationship,  for example,  with any  organization of which you are an officer,
director, trustee or partner or in which you own, directly or indirectly, 10% or
more  of  the  outstanding  voting  stock,  or in  which  you  have  some  other
substantial interest, and with any person or organization with whom you have, or
with whom any  relative  or spouse (or any other  person or  organization  as to
which you have any of the  foregoing  other  relationships)  has, a  contractual
relationship.

            The  National  Association  of  Securities  Dealers,  Inc.  ("NASD")
defines a "Member" as being either any broker or dealer admitted to a membership
in the  NASD or any  officer  or  partner  of such a  member,  or the  executive
representative of such a member or the substitute for such a representative.

<PAGE>

            The NASD defines a "Person  Associated with a Member" as being every
sole proprietor,  partner, officer, director or branch manager of any member, or
any natural person occupying a similar status or performing  similar  functions,
or any natural person engaged in the investment  banking or securities  business
who is directly or  indirectly  controlling  or  controlled  by such member (for
example,  any employee),  whether or not any such person is registered or exempt
from registration with the NASD.

            The NASD defines an  "Underwriter  or a Related Person" with respect
to a proposed offering as being underwriters,  underwriters' counsel,  financial
consultants and advisors, finders, members of the selling or distribution group,
and any and all other persons associated with or related to any of such persons.

                     ITEM 2. Please complete the following:

      If you need  more  space to  respond  to or  clarify  your  response  to a
question,   use  the   "Additional   Information"   page  at  the  end  of  this
Questionnaire.

1.    Print name of stockholder        _________________________________________

                                       _________________________________________

2.    Print correct address            _________________________________________

                                       _________________________________________

                                       _________________________________________

3.    List all positions or offices which  stockholder  or any of its directors,
      officers or partners have had since  January 1, 1997,  with the Company or
      any of its affiliates:

4.    Describe below any pending legal  proceedings in which either  stockholder
      or any of its associates has an interest adverse to the Company:

5.    Describe  below  any  material  relationship  stockholder  or  any  of its
      directors,  officers or  partners  have had with the Company or any of its
      officers or directors:

6.    Describe below any  information  known to  stockholder,  and if none state
      "none",  pertaining to underwriting  compensation  and arrangements or any
      dealings between any underwriter or related person,  member of the NASD or
      a person  associated  with a member of the NASD,  and the  Company  or any
      controlling stockholder thereof since January 1, 1993:

7.    State below whether  stockholder  or any of its associates are a member of
      NASD,  a  controlling  shareholder  of a member,  a person  associated  or
      affiliated  with a member or an underwriter or related person with respect
      to  the  proposed   offering.   If  you  respond   "yes",   describe  such
      relationship:

                                 Yes |_| No |_|

<PAGE>

(IF THE RESPONSE TO 7 WAS "NO", DO NOT RESPOND TO 8-10)

8.    Describe below information as to all purchases and acquisitions (including
      contracts  to  purchase or to  acquire)  of  securities  of the Company by
      stockholder  during the last twenty months, and all proposed purchases and
      acquisitions  which are to be  consummated  in whole or in part within the
      next twelve months:

          Seller or               Amount and         Price or Other
      Prospective Seller     Nature of Securities     Consideration       Date
      ------------------     --------------------    --------------     --------

9.    Describe below all information as to all sales and dispositions (including
      contracts to sell or to dispose) of securities  of the Company  during the
      last  twenty  months by  stockholder  to any  "member"  of the NASD or any
      "person  associated  with a member" with  respect to the  proposed  public
      offering, as well as to all proposed sales and dispositions by stockholder
      which are to be  consummated  in whole or in part  within the next  twelve
      months.

          Seller or               Amount and         Price or Other
      Prospective Seller     Nature of Securities     Consideration       Date
      ------------------     --------------------    --------------     --------

10.   If stockholder has had during the last twenty months, or is to have within
      the next twelve months,  any  transaction of the character  referred to in
      either  Item  8 or 9  above,  describe  briefly  below  the  relationship,
      affiliation or association of both  stockholder  and, if known,  the other
      party or parties to any such  transaction with an underwriter or other "in
      the stream of distribution" with respect to the proposed offering.  In any
      case, where the purchaser  (whether you or any such party) is known by you
      to be a member of a "private  investment  group",  such as a hedge fund or
      other  group of  purchasers,  list,  if known,  the  names of all  persons
      comprising the "group" and their  "association  with" or "relationship to"
      any broker-dealer.

11.   Describe any arrangement known to you made or to be made by any person, or
      any transaction already effected and if no such arrangement or transaction
      is known to you, state "none":

      (i)   to  limited or  restrict  the sale of the  Common  Stock  during the
            period  of the  offering  of the  securities  registered  under  the
            Registration Statement;

<PAGE>

      (ii)  to stabilize the market for the Common Stock; or

      (iii) to withhold  commissions  or otherwise to hold each  underwriter  or
            dealer  responsible for the distribution of his participation in the
            offering.

12.   Specify below the  information  required as to Shares,  Warrant Shares and
      all other securities  beneficially  owned by you (including any options or
      warrants)  as of the  date of this  Questionnaire.  [Please  refer  to the
      attached definition of "Beneficially."]

<TABLE>
<CAPTION>
                                                                                                 Remarks (specify
                                                                                               voting or investment
                                                                                                power you have, in
                         Number of Warrant         Registered in           Beneficially         what capacity you
Number of Shares              Shares                the Name of:            Owned by*:           have such power)
----------------         -----------------         -------------           ------------        --------------------
<S>                      <C>                       <C>                     <C>                 <C>

</TABLE>

13.   Specify below the number of Shares and Warrant  Shares  acquired by you in
      the  Private  Placement  which  you wish to  include  in the  Registration
      Statement  pursuant to your  registration  right (if left blank,  all such
      Shares will be included):

<TABLE>
<CAPTION>
                                                                       Remarks (specify
                                                                     voting or investment
                                                                      power you have, in
                         Registered in           Beneficially         what capacity you
Number of Shares          the Name of:            Owned by*:           have such power)
----------------         -------------           ------------        --------------------
<S>                      <C>                     <C>                 <C>

</TABLE>

14.      State below whether stockholder or any of its associates are a
         market-maker in, or in any other way involved in the trading of, any
         security of the Company. If you respond "yes", describe such
         relationship:

                                 Yes |_| No |_|

<PAGE>

15.   State  below  whether  stockholder  is selling  the Shares or the  Warrant
      Shares to be sold pursuant to the registration  statement for the purposes
      of raising funds or diversifying your investment portfolio. If you respond
      "no", describe the purpose of your sale:

                                 Yes |_| No |_|

16.   State whether stockholder may sell the Shares or the Warrant Shares in any
      method of distribution, in negotiated transactions, through the writing of
      options or a combination  of such methods of sale.  If you respond  "yes",
      describe such method:

                                 Yes |_| No |_|

17.   State whether  stockholder may sell the Shares or the Warrant Shares to or
      through broker-dealers.

                                 Yes |_| No |_|

      Please note that the selling stockholders and any broker-dealers or agents
      who  participate in the  distribution  of the Shares or the Warrant Shares
      pursuant to the registration  statement may be deemed to be "underwriters"
      as that term is defined in the Act, and any  commissions  received by them
      and profit on any resale of the Shares or the Warrant  Shares as principal
      might be deemed to be  underwriting  discounts and  commissions  under the
      Act.

                                ITEM 3. SIGNATURE

I understand that the  information  that I am furnishing you herein will be used
by Intelli-Check,  Inc. in the preparation of a registration statement under the
Securities Act of 1933, as amended. The responses supplied in this questionnaire
are accurate and complete to the best knowledge of the  undersigned.  If, at any
time after the date of signing this  Questionnaire  by the undersigned and prior
to the date of  registration  of our  securities,  any change occurs which would
render any of the  undersigned's  statements in this  Questionnaire  inaccurate,
misleading or incomplete in any respect, the undersigned will immediately advise
Loeb & Loeb LLP of such changes and the details thereof.

Signature: ____________________________________________

Name (please print): __________________________________

Title: ________________________________________________

Telephone No: _________________________________________

Fax No: _______________________________________________

Business Address: _____________________________________

                  _____________________________________

Date: _________________________________________________

<PAGE>

                             ADDITIONAL INFORMATION

<PAGE>

                                                                     APPENDIX II

[Transfer Agent]
[Address]

Attention:

                   PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE

      The undersigned, [an officer of, or other person duly authorized by]

_____________________________________________________________ hereby certifies
   [fill in official name of individual or institution]

that he/she [said institution] is the Purchaser of the shares evidenced by the

attached certificate, and as such, sold such shares on _______________ in
                                                           [date]

accordance with the terms of the Purchase Agreement and in accordance with

Registration Statement number ____________________________________________
                              [fill in the number of or otherwise identify

________________________ or otherwise in accordance with the Securities Act
Registration Statement]

of 1933, as amended, and, in the case of a transfer pursuant to the Registration

Statement, the requirement of delivering a current prospectus by the Company has

been complied with in connection with such sale.

Print or Type:

            Name of Purchaser
            (Individual or Institution):      ______________________

            Name of Individual
            representing Purchaser
            (if an Institution)               ______________________

            Title of Individual
            representing Purchaser
            (if an Institution):              ______________________

            Signature by:
            Individual Purchaser
            or Individual
            representing Purchaser:           ______________________

<PAGE>

                                                                      SCHEDULE A

SCHEDULE OF PURCHASERS

Other than in the  following  amounts  of common  stock  purchased,  each of the
securities  purchase agreements under which each investor purchased their shares
of  common  stock  in the  private  placement  were  identical  in all  material
respects.

<TABLE>
<CAPTION>
                                              Number of Shares of Common
                                                Stock Purchased in the           Number of Warrants Issued
Security Holders                                   Private Placement             in the Private Placement
---------------------------------------       --------------------------         -------------------------
<S>                                                     <C>                              <C>
WPG Software Fund, L.P.                                 275,000                          110,000
SRG Capital, LLC                                         70,000                           28,000
Enable Opportunity Partners, L.P.                        25,000                           10,000
Enable Growth Partners, L.P.                             75,000                           30,000
Smithfield Fiduciary LLC                                125,000                           50,000
Iroquois Master Fund Ltd.                               125,000                           50,000
Gruber & McBaine International                           18,000                            7,200
Jon D. and Linda W. Gruber Trust                         25,000                           10,000
RHP Master Fund, Ltd.                                   125,000                           50,000
Nite Capital L.P.                                        65,000                           26,000
Lagunitas Partners L.P.                                  82,000                           32,800
Presidio Partners                                        61,875                           24,750
Geary Partners                                           48,625                           19,450
Brady Fund L.P.                                          14,500                            5,800
Robert T. Lempert                                        25,000                           10,000
Todd Cohen                                               10,000                            4,000
H. Leon Pachter, M.D.                                    20,000                            8,000
H. Leon Pachter, M.D., IRA Rollover                      20,000                            8,000
Joe Giamanco                                             40,000                           16,000
</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}]]