Document:

Exhibit
      _____

    

    

    

    INDEMNIFICATION
      AGREEMENT

    

    This
      Indemnification Agreement (“Agreement”) is effective as of this 19th day of
      March 2007, by and between Innovative Card Technologies, Inc., a Delaware
      corporation (the “Company”), and ________ (“Indemnitee”).

     

    WHEREAS,
      the Company and Indemnitee recognize the continued difficulty in obtaining
      liability insurance for its directors, officers, employees, agents and
      fiduciaries, the significant increases in the cost of such insurance and the
      general reductions in the coverage of such insurance;

     

    WHEREAS,
      the Company and Indemnitee further recognize the substantial increase in
      corporate litigation in general, subjecting directors, officers, employees,
      agents and fiduciaries to expensive litigation risks at the same time as the
      availability and coverage of liability insurance has been severely
      limited;

     

    WHEREAS,
      Indemnitee does not regard the current protection available as adequate under
      the present circumstances, and the Indemnitee and other directors, officers,
      employees, agents and fiduciaries of the Company may not be willing to continue
      to serve in such capacities without additional protection; and 

     

    WHEREAS,
      the Company desires to attract and retain the services of highly qualified
      individuals, such as Indemnitee, to serve the Company and, in part, in order
      to
      induce Indemnitee to continue to provide services to the Company, wishes to
      provide for the indemnification and advancing of expenses to Indemnitee to
      the
      maximum extent permitted by law.

     

    NOW,
      THEREFORE, the Company and Indemnitee hereby agree as follows:

     

    1.    Indemnification.

     

    (a)    Indemnification
      of Expenses.
      The
      Company shall indemnify Indemnitee to
      the
      fullest extent permitted by law if Indemnitee was or is or becomes a party
      to or
      witness or other participant in, or is threatened to be made a party to or
      witness or other participant in, any threatened, pending or completed action,
      suit, proceeding or alternative dispute resolution mechanism, or any hearing,
      inquiry or investigation that Indemnitee in good faith believes might lead
      to
      the institution of any such action, suit, proceeding or alternative dispute
      resolution mechanism, whether civil, criminal, administrative, investigative
      or
      other (hereinafter a “Claim”) by reason of (or arising in part out of) any event
      or occurrence related to the fact that Indemnitee is or was a director, officer,
      employee, agent or fiduciary of the Company; or any subsidiary of the Company,
      or is or was serving at the request of the Company as a director, officer,
      employee, agent or fiduciary of another corporation, partnership, joint venture,
      trust or other enterprise, or by reason of any action or inaction on the part
      of
      Indemnitee while serving in such capacity (hereinafter an “Indemnifiable Event”)
      against any and all expenses (including attorneys’ fees and all other costs,
      expenses and obligations incurred in connection with investigating, defending,
      being a witness in or participating in (including on appeal), or preparing
      to
      defend, be a witness in or participate in, any such action, suit, proceeding,
      alternative dispute resolution mechanism, hearing, inquiry or investigation),
      judgments, fines, penalties and amounts paid in settlement (if such settlement
      is approved in advance by the Company, which approval shall not be unreasonably
      withheld) of such Claim and any federal, state, local or foreign taxes imposed
      on the Indemnitee as a result of the actual or deemed receipt of any payments
      under this Agreement (collectively, hereinafter “Expenses”), including all
      interest, assessments and other charges paid or payable in connection with
      or in
      respect of such Expenses. Such payment of Expenses shall be made by the Company
      as soon as practicable but in any event no later than five days after written
      demand by Indemnitee therefor is presented to the Company.

    

    (b)    Reviewing
      Party.
      Notwithstanding the foregoing, (i) the obligations of the Company
      under Section 1(a) shall be subject to the condition that the Reviewing Party
      (as described in Section 10(e) hereof) shall not have determined (in a written
      opinion, in any case in which the Independent Legal Counsel referred to in
      Section 1(c) hereof is involved) that Indemnitee would not be permitted to
      be
      indemnified under applicable law, and (ii) the obligation of the Company to
      make
      an advance payment of Expenses to Indemnitee pursuant to Section
      2(a) (an “Expense Advance”) shall be subject to the condition that, if, when and
      to the extent that the Reviewing Party determines that Indemnitee would not
      be
      permitted to be so indemnified under applicable law, the Company shall be
      entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
      Company) for all such amounts theretofore paid; provided, however, that if
      Indemnitee has commenced or thereafter commences legal proceedings in a court
      of
      competent jurisdiction to secure a determination that Indemnitee should be
      indemnified under applicable law, any determination made by the Reviewing Party
      that Indemnitee would not be permitted to be indemnified under applicable law
      shall not be binding and Indemnitee shall not be required to reimburse the
      Company for any Expense Advance until a final judicial determination is made
      with respect thereto (as to which all rights of appeal therefrom have been
      exhausted or lapsed). Indemnitee’s obligation to reimburse the Company for any
      Expense Advance shall be unsecured and no interest shall be charged thereon.
      If
      there has not been a Change in Control (as defined in Section 10(c) hereof),
      the
      Reviewing Party shall be selected by the Board of Directors, and if there has
      been such a Change in Control (other than a Change in Control which has been
      approved by a majority of the Company’s Board of Directors who were directors
      immediately prior to such Change in Control), the Reviewing Party shall be
      the
      Independent Legal Counsel referred to in Section 1(c) hereof. If there has
      been
      no determination by the Reviewing Party or if the Reviewing Party determines
      that Indemnitee substantively would not be permitted to be indemnified in whole
      or in part under applicable law, Indemnitee shall have the right to commence
      litigation seeking an initial determination by the court or challenging any
      such
      determination by the Reviewing Party or any aspect thereof, including the legal
      or factual bases therefor, and the Company hereby consents to service of process
      and to appear in any such proceeding. Any determination by the Reviewing Party
      otherwise shall be conclusive and binding on the Company and
      Indemnitee.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (c)    Change
      in Control.
      The
      Company agrees that if there is a Change in Control
      of the Company (other than a Change in Control which has been approved by a
      majority of the Company’s Board of Directors who were directors immediately
      prior to such Change in Control) then with respect to all matters thereafter
      arising concerning the rights of Indemnitee to payments of Expenses and Expense
      Advances under this Agreement or any other agreement or under the Company’s
      Certificate of Incorporation or Bylaws as now or hereafter in effect,
      Independent Legal Counsel (as defined in Section 10(d) hereof) shall be selected
      by the Indemnitee and approved by the Company (which approval shall not be
      unreasonably withheld). Such counsel, among other things, shall render its
      written opinion to the Company and Indemnitee as to whether and to what extent
      Indemnitee would have permitted to be indemnified under applicable law and
      the
      Company agrees to abide by such opinion. The Company agrees to pay the
      reasonable fees of the Independent Legal Counsel referred to above and to fully
      indemnify such counsel against any and all expenses (including attorneys’ fees),
      claims, liabilities and damages arising out of or relating to this Agreement
      or
      its engagement pursuant hereto.

     

    (d)    Mandatory
      Payment of Expenses.
      Notwithstanding any other provision of this
      Agreement other than Section 9 hereof, to the extent that Indemnitee has been
      successful on the merits or otherwise, including, without limitation, the
      dismissal of an action without prejudice, in defense of any action, suit,
      proceeding, inquiry or investigation referred to in Section (1) (a) hereof
      or in
      the defense of any claim, issue or matter therein, Indemnitee shall be
      indemnified against all Expenses incurred by the Indemnitee in connection
      therewith.

     

    2.    Expenses;
      Indemnification Procedure.

     

    (a)    Advancement
      of Expenses.
      The
      Company shall advance all Expenses incurred
      by the Indemnitee. The advances to be made hereunder shall be paid by the
      Company to Indemnitee as soon as practicable but in any event no later than
      five
      days after written demand by Indemnitee therefor to the Company.

     

    (b)    Notice/Cooperation
      by Indemnitee.
      Indemnitee shall, as a condition precedent
      to Indemnitee’s right to be indemnified under this Agreement, give the Company
      notice in writing as soon as practicable of any claim made against Indemnitee
      for which indemnification will or could be sought under this Agreement. Notice
      to the Company shall be directed to the Chief Executive Officer of the Company
      at the address shown on the signature page of this Agreement (or such other
      address as the Company shall designate in writing to the Indemnitee). In
      addition, Indemnitee shall give the Company such information and cooperation
      as
      it may reasonably require and as shall be within Indemnitee’s
      power.

     

    (c)    No
      Presumptions; Burden of Proof.
      For
      purposes of this Agreement, the termination
      of any Claim by judgment, order, settlement (whether with or without court
      approval) or conviction, or upon a plea of nolo
      contendere,
      or its
      equivalent, shall not create of presumption that Indemnitee did not meet any
      particular standard of conduct or have any particular belief or that a court
      has
      determined that indemnification is not permitted by applicable law. In addition,
      neither the failure of the Reviewing Party to have made a determination as
      to
      whether Indemnitee has met any particular standard of conduct or had any
      particular belief, nor an actual determination by the Reviewing Party that
      Indemnitee has not met such standard of conduct or did not have such belief,
      prior to the commencement of legal proceedings by Indemnitee to secure a
      judicial determination that Indemnitee should be indemnified under applicable
      law, shall be a defense to Indemnitee’s claim or create a presumption that
      Indemnitee has not met any particular standard of conduct or did not have any
      particular belief. In connection with any determination by the Reviewing Party
      or otherwise as to whether the Indemnitee is entitled to be indemnified
      hereunder, the burden of proof shall be on the Company to establish that
      Indemnitee is not so entitled.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d)    Notice
      to Insurers.
      If, at
      the time of the receipt by the Company of a notice
      of
      a Claim pursuant to Section 2(b) hereof, the Company has liability insurance
      in
      effect which may cover such Claim, the Company shall give prompt notice of
      the
      commencement of such Claim to the insurers in accordance with the procedures
      set
      forth in the respective policies. The Company shall thereafter take all
      necessary or desirable action to cause such insurers to pay, on behalf of the
      Indemnitee, all amounts payable as a result of such action, suit, proceeding,
      inquiry or investigation in accordance with the terms of such
      policies.

     

    (e)    Selection
      of Counsel.
      In the
      event the Company shall be obligated hereunder
      to pay the Expenses of any Claim, the Company, if appropriate, shall be entitled
      to assume the defense of such Claim with counsel approved by Indemnitee, upon
      the delivery to Indemnitee of written notice of its election so to do. After
      delivery of such notice, approval of such counsel by Indemnitee and the
      retention of such counsel by the Company, the Company will not be liable to
      Indemnitee under this Agreement for any fees of counsel subsequently incurred
      by
      Indemnitee with respect to the same Claim; provided that, (i) Indemnitee shall
      have the right to employ Indemnitee’s counsel in any such Claim at Indemnitee’s
      expense and (ii) if (A) the employment of counsel by Indemnitee has been
      previously authorized by the Company, (B) Indemnitee shall have reasonably
      concluded that there may be a conflict of interest between the Company and
      Indemnitee in the conduct of any such defense, or (C) the Company shall not
      continue to retain such counsel to defend such Claim, then the fees and expenses
      of Indemnitee’s counsel shall be at the expense of the Company.

     

    3.    Additional
      Indemnification Rights; Nonexclusivity.

     

    (a)    Scope.
      The
      Company hereby agrees to indemnify the Indemnitee to the fullest
      extent permitted by law, notwithstanding that such indemnification is not
      specifically authorized by the other provisions of this Agreement, the Company’s
      Certificate of Incorporation, the Company’s Bylaws or by statute. In the event
      of any change after the date of this Agreement in any applicable law, statute
      or
      rule which expands the right of a Delaware corporation to indemnify a member
      of
      its Board of Directors or an officer, employee, agent or fiduciary, it is the
      intent of the parties hereto that Indemnitee shall enjoy by this Agreement
      the
      greater benefits afforded by such change. In the event of any change in any
      applicable law, statute or rule which narrows the right of a Delaware
      corporation to indemnify a member of its Board of Directors or an officer,
      employee, agent or fiduciary, such change, to the extent not otherwise required
      by such law, statute or rule to be applied to this Agreement, shall have no
      effect on this Agreement or the parties’ rights and obligations hereunder except
      as set forth in Section 8(a) hereof.

     

    (b)    Nonexclusivity.
      The
      indemnification provided by this Agreement shall be in
      addition to any rights to which Indemnitee may be entitled under the Company’s
      Certificate of Incorporation, its Bylaws, any agreement, any vote of
      stockholders or disinterested directors, the General Corporation Law of the
      State of Delaware, or otherwise. The indemnification provided under this
      Agreement shall continue as to Indemnitee for any action taken or not taken
      while serving in an indemnified capacity even though Indemnitee may have ceased
      to serve in such capacity.

     

    4.    No
      Duplication of Payments.
      The
      Company shall not be liable under this Agreement
      to make any payment in connection with any Claim made against Indemnitee to
      the
      extent Indemnitee has otherwise actually received payment (under any insurance
      policy, Certificate of Incorporation, Bylaw or otherwise) of the amounts
      otherwise indemnifiable hereunder.

     

    5.    Partial
      Indemnification.
      If
      Indemnitee is entitled under any provision of this Agreement
      to indemnification by the Company for some or a portion of Expenses incurred
      in
      connection with any Claim, but not, however, for all of the total amount
      thereof, the Company shall nevertheless indemnify Indemnitee for the portion
      of
      such Expenses to which Indemnitee is entitled.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    6.    Mutual
      Acknowledgement.
      Both
      the Company and Indemnitee acknowledge that
      in
      certain instances, Federal law or applicable public policy may prohibit the
      Company from indemnifying its directors, officers, employees, agents or
      fiduciaries under this Agreement or otherwise. Indemnitee understands and
      acknowledges that the Company has undertaken or may be required in the future
      to
      undertake with the Securities and Exchange Commission to submit the question
      of
      indemnification to a court in certain circumstances for a determination of
      the
      Company’s right under public policy to indemnify Indemnitee.

     

    7.    Liability
      Insurance.
      To the
      extent the Company maintains liability insurance applicable
      to directors, officers, employees, agents or fiduciaries, Indemnitee shall
      be
      covered by such policies in such a manner as to provide Indemnitee the same
      rights and benefits as are accorded to the most favorably insured of the
      Company’s directors, if Indemnitee is a director; or of the Company’s officers,
      if Indemnitee is not a director of the Company but is an officer; or of the
      Company’s key employees, agents or fiduciaries, if Indemnitee is not an officer
      or director but is a key employee, agent or fiduciary.

     

    8.    Exceptions.
      Any
      other provision herein to the contrary notwithstanding, the Company
      shall not be obligated pursuant to the terms of this Agreement:

     

    (a)    Excluded
      Action or Omissions.
      To
      indemnify Indemnitee for acts, omissions
      or transactions from which Indemnitee may not be relieved of liability under
      applicable law.

     

    (b)    Claims
      Initiated by Indemnitee.
      To
      indemnify or advance expenses to
      Indemnitee with respect to Claims initiated or brought voluntarily by Indemnitee
      and not by way of defense, except (i) with respect to actions or proceedings
      brought to establish or enforce a right to indemnification under this Agreement
      or any other agreement or insurance policy or under the Company’s Certificate of
      Incorporation or Bylaws now or hereafter in effect relating to Claims for
      Indemnifiable Events, (ii) in specific cases if the Board of Directors has
      approved the initiation or bringing of such Claim, or (iii) as otherwise as
      required under Section 145 of the Delaware General Corporation Law, regardless
      of whether Indemnitee ultimately is determined to be entitled to such
      indemnification, advance expense payment or insurance recovery, as the case
      may
      be.

     

    (c)    Lack
      of Good Faith.
      To
      indemnify Indemnitee for any expenses incurred by
      the
      Indemnitee with respect to any proceeding instituted by Indemnitee to enforce
      or
      interpret this Agreement, if a court of competent jurisdiction determines that
      each of the material assertions made by the Indemnitee in such proceeding was
      not made in good faith or was frivolous; or

     

    (d)    Claims
      Under Section 16(b).
      To
      indemnify Indemnitee for expenses and the
      payment of profits arising from the purchase and sale by Indemnitee of
      securities in violation of Section 16(b) of the Securities Exchange Act of
      1934,
      as amended, or any similar successor statute.

     

    9.    Period
      of Limitations.
      No
      legal action shall be brought and no cause of action shall
      be
      asserted by or in the right of the Company against Indemnitee, Indemnitee’s
      estate, spouse, heirs, executors or personal or legal representatives after
      the
      expiration of two years from the date of accrual of such cause of action, and
      any claim or cause of action of the Company shall be extinguished and deemed
      released unless asserted by the timely filing of a legal action within such
      two-year period; provided,
      however,
      that if
      any shorter period of limitations is otherwise applicable to any such cause
      of
      action, such shorter period shall govern.

     

    10.    Construction
      of Certain Phrases.

     

    (a)    For
      purposes of this Agreement, references to the “Company” shall include,
      in addition to the resulting corporation, any constituent corporation (including
      any constituent of a constituent) absorbed in a consolidation or merger which,
      if its separate existence had continued, would have had power and authority
      to
      indemnify its directors, officers, employees, agents or fiduciaries, so that
      if
      Indemnitee is or was a director, officer, employee, agent or fiduciary of such
      constituent corporation, or is or was serving at the request of such constituent
      corporation as a director, officer, employee, agent or fiduciary of another
      corporation, partnership, joint venture, employee benefit plan, trust or other
      enterprise. Indemnitee shall stand in the
      same
      position under the provisions of this Agreement with respect to the resulting
      or
      surviving corporation as Indemnitee would have with respect to such constituent
      corporation if its separate existence had continued.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)    For
      purposes of this Agreement, references to “other enterprises” shall include
      employee benefit plans; references to “fines” shall include any excise taxes
      assessed on Indemnitee with respect to an employee benefit plan; and references
      to “serving at the request of the Company” shall include any service as a
      director, officer, employee, agent or fiduciary of the Company which imposes
      duties on, or involves services by, such director, officer, employee, agent
      or
      fiduciary with respect to an employee benefit plan, its participants or its
      beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee
      reasonably believed to be in the interest of the participants and beneficiaries
      of an employee benefit plan, Indemnitee shall be deemed to have acted in a
      manner “not opposed to the best interests of the Company” as referred to in this
      Agreement.

     

    (c)    For
      purposes of this Agreement a “Change in Control” shall be deemed to have
      occurred if (i) any “person” (as such term is used in Sections 13(d) and 14(d)
      of the Securities Exchange Act of 1934, as amended), other than a trustee or
      other fiduciary holding securities under an employee benefit plan of the Company
      or a corporation owned directly or indirectly by the stockholders of the Company
      in substantially the same proportions as their ownership of stock of the
      Company, (A) who is or becomes the beneficial owner, directly or indirectly,
      of
      securities of the Company representing 10% or more of the combined voting power
      of the Company’s then outstanding Voting Securities, increases his beneficial
      ownership of such securities by 5% or more over the percentage so owned by
      such
      person, or (B) becomes the “beneficial owner” (as defined in Rule 13d-3 under
      said Act), directly or indirectly, of securities of the Company representing
      more than 20% of the total voting power represented by the Company’s then
      outstanding Voting Securities, (ii) during any period of two consecutive years,
      the individuals who at the beginning of such period constitute the Board of
      Directors of the Company and any new director whose election by the Board of
      Directors or nomination for election by the Company’s stockholders was approved
      by a vote of at least two-thirds of the directors then still in office who
      either were directors at the beginning of the period or whose election or
      nomination for election was previously so approved, cease for any reason to
      constitute a majority thereof, or (iii) the stockholders of the Company approve
      a merger or consolidation of the Company with any other corporation other than
      a
      merger or consolidation which would result in the Voting Securities of the
      Company outstanding immediately prior thereto continuing to represent (either
      by
      remaining outstanding or by being converted into Voting Securities of the
      surviving entity) at least 80% of the total voting power represented by the
      Voting Securities of the Company or such surviving entity outstanding
      immediately after such merger or consolidation, or the stockholders of the
      Company approve a plan of complete liquidation of the Company or an agreement
      for the sale or disposition by the Company of (in one transaction or a series
      of
      transactions) all of substantially all of the Company’s assets.

    

    (d)    For
      purposes of this Agreement, “Independent Legal Counsel” shall mean an
      attorney or firm of attorneys, selected in accordance with the provisions of
      Section 1(c) hereof, who shall not have otherwise performed services for the
      Company or Indemnitee within the last three years (other than with respect
      to
      matters concerning the rights of Indemnitee under this Agreement, or of other
      indemnitees under similar indemnity agreements.)

     

    (e)    For
      purposes of this Agreement, a “Reviewing Party” shall mean any appropriate
      person or body consisting of a member or members of the Company’s Board of
      Directors or any other person or body appointed by the Board of Directors who
      is
      not a party to the particular Claim for which Indemnitee is seeking
      indemnification, or Independent Legal Counsel.

     

    (f)    For
      purposes of this Agreement, “Voting Securities” shall mean any securities
      of the Company that vote generally in the election of directors.

     

    11.    Counterparts.
      This
      Agreement may be executed in one or more counterparts, each
      of
      which shall constitute an original.

     

    12.    Binding
      Effect; Successors and Assigns.
      This
      Agreement shall be binding upon and
      inure
      to the benefit of and be enforceable by the parties hereto and their respective
      successors, assigns, including any direct or indirect successor by purchase,
      merger, consolidation or otherwise to all or substantially all of the business
      and/or assets of the Company, spouses, heirs, and personal and legal
      representatives. The Company shall require and cause any successor (whether
      direct or indirect by purchase, merger, consolidation or otherwise) to all,
      substantially all, or a substantial part, of the business and/or assets of
      the
      Company, by written agreement
      in form and substance satisfactory to Indemnitee, expressly to assume and agree
      to perform this Agreement in the same manner and to the same extent that the
      Company would be required to perform if no such succession had taken place.
      This
      Agreement shall continue in effect regardless of whether Indemnitee continues
      to
      serve as a director or officer of the Company or of any other enterprise at
      the
      Company’s request.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    13.    Attorneys’
      Fees.
      In the
      event that any action is instituted by Indemnitee under this
      Agreement or under any liability insurance policies maintained by the Company
      to
      enforce or interpret any of the terms hereof or thereof, Indemnitee shall be
      entitled to be paid all Expenses incurred by Indemnitee with respect to such
      action, regardless of whether Indemnitee is ultimately successful in such
      action, and shall be entitled to the advancement of Expenses with respect to
      such action, unless as a part of such action a court of competent jurisdiction
      over such action determines that each of the material assertions made by
      Indemnitee as a basis for such action were not made in good faith or were
      frivolous. In the event of an action instituted by or in the name of the Company
      under this Agreement to enforce or interpret any of the terms of this Agreement,
      Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee
      in
      defense of such action (including costs and expenses incurred with respect
      to
      Indemnitee’s counterclaims and cross-claims made in such action), and shall be
      entitled to the advancement Expenses with respect to such action, unless as
      a
      part of such action a court having jurisdiction over such action determines
      that
      each of Indemnitee’s material defenses to such action were made in bad faith or
      were frivolous.

     

    14.    Notice.
      All
      notices, requests, demands and other communication under this Agreement
      shall be in writing and shall be deemed duly given (i) if delivered by hand
      and
      signed for by the party addressed, on the date of such delivery, or (ii) if
      mailed by domestic certified or registered mail with postage prepaid, on the
      third business day after the date postmarked. Addresses for notice to either
      party are as shown on the signature page of this Agreement, or as subsequently
      modified by written notice.

     

    15.    Consent
      to Jurisdiction.
      The
      Company and Indemnitee each hereby irrevocably consent
      to the jurisdiction of the courts of the State of Delaware for all purposes
      in
      connection with any action or proceeding which arises out of or relates to
      this
      Agreement.

     

    16.    Severability.
      The
      provisions of this Agreement shall be severable in the event that
      any
      of the provisions hereof (including any provision within a single section,
      paragraph or sentence) are held by a court of competent jurisdiction to be
      invalid, void or otherwise unenforceable, and the remaining provisions shall
      remain enforceable to the fullest extent permitted by law. Furthermore, to
      the
      fullest extent possible, the provisions of this Agreement (including, without
      limitations, each portion of this Agreement containing any provision held to
      be
      invalid, void or otherwise unenforceable that is not itself invalid, void or
      unenforceable) shall be construed so as to give effect to the intent manifested
      by the provision held invalid, illegal or unenforceable.

     

    17.    Choice
      of Law.
      This
      Agreement shall be governed by and its provisions construed
      and enforced in accordance with the laws of the State of Delaware, as applied
      to
      contracts between Delaware residents, entered into and to be performed entirely
      within the State of Delaware, without regard to the conflict of laws principles
      thereof.

     

    18.    Subrogation.
      In the
      event of payment under this Agreement, the Company shall be
      subrogated to the extent of such payment to all of the rights of recovery of
      Indemnitee, who shall execute all documents required and shall do all acts
      that
      may be necessary to secure such rights and to enable the Company effectively
      to
      bring suit to enforce such rights.

     

    19.    Amendment
      and Termination.
      No
      amendment, modification, termination or cancellation
      of this Agreement shall be effective unless it is in writing signed by both
      the
      parties hereto. No waiver of any of the provisions of this Agreement shall
      be
      deemed or shall constitute a waiver of any other provisions hereof (whether
      or
      not similar) nor shall such waiver constitute a continuing waiver.

     

    20.    Integration
      and Entire Agreement.
      This
      Agreement sets forth the entire understanding
      between the parties hereto and supercedes and merges all previous written and
      oral negotiations, commitments, understandings and agreements relating to the
      subject matter hereof between the parties hereto.

     

    21.    No
      Construction as Employment Agreement.
      Nothing
      contained in this Agreement
      shall be construed as giving Indemnitee any right to be retained in the employ
      of the Company or any of its subsidiaries.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      date
      first above written.

    

                INNOVATIVE
      CARD
      TECHNOLOGIES, INC.

    

                By:
      __________________________________

    

                Title:
      _________________________________

    

    

    

    AGREED
      TO
      AND ACCEPTED

    

    INDEMNITEE:

     

     

    _______________________________

    (signature)

    

    _______________________________

    (name
      of
      Indemnitee)

    

    _______________________________

    

    _______________________________

    (address)[LOGO]

                  Co-location and Bandwidth Services Agreement

This Co-location and Bandwidth Agreement (the "Agreement") by and between:

            PEER 1 NETWORK, INC.                 TeliPhone inc.
                  "Peer 1"                         "Customer"

Address:   1600 - 555 West Hastings   Address:   1080, Cote du Beaver Hall
           Vancouver, BC V6B 4N5                 Suite 1555 Montreal, Qc H2Z 1S8

Contact:   Marc-Alexandre Forget      Contact:   George Metrakos
Telephone: 514-878-0080               Telephone: 514-313-6010
Fax:       514-878-0085               Fax:       514-313-6001
Email:     mforget@peer1.net          Email:     gmetrakos@teliphone.ca

This Agreement (which includes and incorporates by reference Schedule 1 attached
and any Service Agreement Addendums) sets forth the terms under which the
parties agree that Peer 1 will provide certain services to Customer according to
the following specifications:

                          GENERAL TERMS AND CONDITIONS

1.    Services. Supplier agrees to supply the Services in accordance with the
      terms of this Agreement. Customer agrees to receive the Services from
      Supplier in accordance with the terms of this Agreement.

2.    Other Services. Upon written request by Customer, Peer 1 may at its
      option, provide Customer with technical and nontechnical support, such as
      equipment reboots, troubleshooting, DNS and other support ("Other
      Services"), in connection with Customer's use of the Customer Space and
      Bandwidth Services. Unless the parties agree otherwise, Customer will pay
      for such Other Services in accordance with the Technical Support Services
      section of this Agreement.

3.    Term. The Term of this Agreement will commence five (5) days after the
      "Effective Date" from Schedule 1 or the day the Customer connects to Peer
      1 Network, whichever is first, and will continue thereafter for the Term
      specified in the Service Table, unless terminated by either party as
      permitted by this Agreement. This contract shall automatically renew for a
      period of subsequent one (1) year periods unless written notice is
      provided by either party to the other at least 60 days prior to the
      expiration date, in which case the contract will expire on said expiration
      date.

4.    Payment.

        4.1     Customer will pay Peer 1 the One-Time Install Fees and Recurring
                Monthly Fees specified in the Service Table, as well as any
                charges for Other Services and the cost (on an estimated or
                actual basis) of supplying electrical power to the Customer
                Space in excess of 3.75 amps for octals, 7.5 amps for quarter
                cabinets, or 15 amps for half, full or custom cages (the
                "Additional Power"). Upon 30 days or greater written notice
                prior to the end of the Term, Peer 1 may change any fees payable
                under this Agreement. Customer will pay all taxes levied against
                or upon the services stipulated in the Service Table (as amended
                by the parties from time to time) or otherwise provided by Peer
                1 under this Agreement (not including taxes based on Peer 1's
                income).

        4.2     All One-Time Install Fees will be payable in advance. All
                Recurring Monthly Fees will be payable monthly in advance.
                Monthly Fees for Internet Traffic and charges for Other
                Services, which are not billed as Recurring Monthly Fees, will
                be payable monthly in arrears.

        4.3     Except for the First Payment shown in the Service Table, which
                must be paid by Customer to Peer 1 before commencement of the
                Term, all amounts will be payable on the 15th of the month in
                which an invoice is received, which invoices will be issued on
                the first day of each month. Customer will pay by pre-authorized
                payment to a Customer credit card, or by cheque of immediately
                available funds remitted to Peer 1 at the address set forth
                above.

        4.4     Any payment not made when due will be subject to interest of two
                percent (2%) per month compounded monthly (equivalent to a
                yearly interest rate of 26.86%).

        4.5     If Customer's traffic usage fails to meet or exceed the amount
                specified as the Minimum Commitment in the Bandwidth Pricing
                section of the Service Table of this Agreement, Customer will be
                billed for the amount of the Minimum Commitment.

        4.6     Peer 1 reserves the right to require a security deposit, the
                amount of which is based upon one (1) month's estimated or
                current usage.

5.    Termination. Either party may terminate this Agreement on 30 days written
      notice, if the other party becomes the subject of any voluntary
      proceedings under any bankruptcy or insolvency laws, or becomes the
      subject of any involuntary proceedings under any bankruptcy or insolvency
      laws which are not dismissed or withdrawn within 60 days after filing.
      Peer 1 may terminate this Agreement on 30 days written notice if the
      Customer commits a material default (which will include without limitation
      any failure to make any payment when due) and fails to rectify such
      default within 10 days after being given notice ofsuch default by the
      other party.

<PAGE>
                                                                          [LOGO]

6.    If Customer is in Default. If Customer is in default of any of its
      obligations under this Agreement, then Peer 1 may in its sole discretion
      do any or all of the following: (i) without notice suspend access to the
      Customer Space or the Premises, (ii) if Customer's default is non-payment
      of any sums due to Peer 1, exercise all the rights and remedies of a
      secured party under applicable law including, without limitation, with the
      minimum notice (if any) required by law, Peer 1 may seize the Equipment
      and sell the Equipment to third parties in satisfaction of any Customer
      indebtedness owing to Peer 1 as well as any costs (including reasonable
      legal fees) incurred by Peer 1 in exercising any remedy under this
      Agreement, and (iv) if Peer 1 terminates this Agreement in accordance with
      Section 5, after such termination is effective, remove the Equipment from
      the Customer Space, store the Equipment at another location at Customer's
      expense, and license the Customer Space to a third party.

7.    Credit Authorization. Customer hereby authorizes Peer 1 and gives consent
      to Peer 1 under applicable privacy laws for Peer 1 to obtain credit
      information and bank and other financial references regarding Customer for
      the purposes of assessing Customer's credit worthiness, and Customer will
      promptly execute and deliver to Peer 1 such further documents and
      assurances and take such further actions as Peer 1 may from time to time
      reasonably request in order to carry out the intent and purpose of this
      Section.

8.    Limitation of Liability. CUSTOMER ACKNOWLEDGES THAT PEER 1 PERMITS OTHER
      LICENSEES TO INSTALL THEIR EQUIPMENT IN THE PREMISES. PEER 1 WILL HAVE NO
      LIABILITY FOR ANY DAMAGES, COSTS, OR LOSSES INCURRED BY CUSTOMER (OR ITS
      CLIENTS) CAUSED BY SUCH OTHER LICENSEES' ACTS, EQUIPMENT, OR FAILURES TO
      ACT. THE LIMIT OF PEER 1'S LIABILITY IN CONTRACT, TORT (INCLUDING
      NEGLIGENCE) OR BY STATUTE OR OTHERWISE TO CUSTOMER (OR ITS CLIENTS)
      CONCERNING PERFORMANCE OR NONPERFORMANCE IN ANY MANNER RELATED TO THIS
      AGREEMENT, FOR ANY AND ALL CLAIMS WILL NOT, IN THE AGGREGATE, EXCEED THE
      TOTAL FEES PAID BY CUSTOMER TO PEER 1 UNDER THIS AGREEMENT IN THE
      IMMEDIATELY PRECEDING 2 MONTHS FROM THE DATE THE CLAIM AROSE. IN NO EVENT
      WILL PEER 1 BE LIABLE FOR ANY LOST PROFITS, SPECIAL, INDIRECT,
      CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES.

9.    Force Majeure. Neither party will be liable for any delay, interruption or
      failure in the performance of its obligations if caused by acts of God,
      war, declared or undeclared, fire, flood, storm, slide, earthquake, or
      other similar event beyond the control of the party affected ("Force
      Majeure"). If any Force Majeure occurs, the party claiming the Force
      Majeure will promptly notify the other. The party claiming the Force
      Majeure will use commercially reasonable efforts to eliminate or remedy
      the Force Majeure. This Section will not apply to excuse a failure to make
      any payment when due.

10.   Reselling. Upon prior written approval of Peer 1 which will not be
      unreasonably withheld or delayed, Customer in the normal course of its
      business may resell to its clients use (subject to all the terms of this
      Agreement) of the Customer Space and Bandwidth Services provided by Peer 1
      to Customer pursuant to this Agreement, except that Customer will not
      allow such clients to interconnect with other users in the Premises. Such
      clients will be deemed to be Customer's contractors to the extent they or
      their representatives are present at the Premises. Customer will act as
      the single point of contact with Peer 1 with respect to Customer's
      clients. Customer will remain responsible for all fees or other costs
      under this Agreement incurred by Customer's clients, both with or without
      the consent of Customer. Customer either will cause such clients to be
      covered by Customer's insurance coverages as required by this Agreement or
      will cause such clients to obtain such insurance independently. Any act or
      omission of any such client that would be a breach of this Agreement if
      committed by Customer will be deemed a breach of this Agreement by
      Customer. Customer agrees to defend, indemnify and hold harmless Peer 1,
      and its officers, directors and employees (collectively, the
      "Indemnities"), from any and all liabilities, costs and expenses,
      including reasonable legal fees, related to or arising from (i) any act or
      omission of any such client that would be a breach of this Agreement if
      committed by Customer, and (ii) any claim by any such client arising from
      use of the Premises, services provided by Peer 1 under this Agreement or
      otherwise from performance or non-performance by a party in any manner
      related to this Agreement.

11.   Miscellaneous.

        11.1.   Notices. Every notice, approval, request, authorization,
                direction or other communication under this Agreement will be
                given in writing to the party at the address first set forth
                above for such party and will be deemed to have been delivered
                and given for all purposes (i) on the delivery date, if
                delivered personally; (ii) one business day after deposit with a
                commercial overnight carrier, with written verification of
                receipt, if sent by courier; (iii) upon completion of
                transmission, if sent via facsimile with a confirmation of
                successful transmission; and (iv) upon personal acknowledgement
                by the recipient, if sent by email.

        11.2.   Compliance With Laws. Customer will comply with all applicable
                laws, regulations, and ordinances.

        11.3.   Assignment. Customer may not assign this Agreement or any of its
                rights or obligations or the license hereunder, without the
                prior written consent of Peer 1. Peer 1 may assign its rights
                and obligations under this Agreement to a Peer 1 affiliate,
                without Customer's consent.

        11.4.   Survival. The provisions set forth in Sections 4, 6, 8, 9, 10
                (indemnity obligations only), 11, 22, 23 and 26 (indemnity
                obligations only) of this Agreement will survive termination or
                expiration of this Agreement.

        11.5.   Reservation of Rights. Peer 1 reserves all rights not
                specifically granted herein.

        11.6.   Entire Agreement. This Agreement supersedes all previous
                Agreements and Service Agreement Addendums between the parties.
                This Agreement, the Schedule, and any subsequent Service
                Agreement Addendums constitute the entire agreement between the
                parties regarding the subject matter hereof and supersede all
                proposals and prior discussions and writings between the parties
                with respect thereto. EXCEPT AS SPECIFICALLY PROVIDED IN THIS
                AGREEMENT, PEER 1 MAKES NO REPRESENTATION, WARRANTY OR
                CONDITION, EXPRESS OR IMPLIED, AND EXPRESSLY EXCLUDES ALL
                IMPLIED OR STATUTORY WARRANTIES OR CONDITIONS OF
                MERCHANTABILITY, MERCHANTABLE QUALITY, DURABILITY OR FITNESS FOR
                A PARTICULAR PURPOSE OR TITLE OR NONINFRINGEMENT AND THOSE
                ARISING BY STATUTE OR OTHERWISE IN LAW OR FROM A COURSE OF
                DEALING OR USAGE OF TRADE.

                                       2
<PAGE>
                                                                          [LOGO]

        11.7.   Modifications. This Agreement may not be altered, amended or
                modified, except in writing signed by both parties.

        11.8.   No Waiver. No failure or delay in enforcing any right or
                exercising any remedy will be deemed a waiver of any right or
                remedy.

        11.9.   Severability and Reformation. If any portion of this Agreement
                is determined to be or becomes unenforceable or illegal, such
                portion will be reformed to the minimum extent necessary in
                order for this Agreement to remain in effect in accordance with
                its terms as modified by such reformation.

        11.10.  Remedies not Exclusive. The remedies available to the parties
                under this Agreement are cumulative and not exclusive to each
                other, and any such remedy will not be deemed or construed to
                affect any right which either of the parties is entitled to seek
                at law, in equity or by statute.

        11.11.  Relationship. The relationship of Peer 1 to Customer will be
                that of an independent contractor, and neither Peer 1 nor any
                employee of Peer 1 will be deemed to be an agent or employee of
                Customer.

        11.12.  Choice of Law and Attornment. This Agreement will be governed
                and interpreted by the laws of the jurisdiction where the
                Premises are located, without regard to its conflicts of law
                provisions. The parties hereby irrevocably and unconditionally
                attorn to the non-exclusive jurisdiction of the courts of the
                jurisdiction where the Premises are located, and all courts
                competent to hear appeals therefrom.

        11.13.  Further Assurances. Each of the parties will promptly execute
                and deliver to the other at the cost of the other such further
                documents and assurances and take such further actions as the
                other may from time to time request in order to more effectively
                carry out the intent and purpose of this Agreement and to
                establish and protect the rights, interests and remedies
                intended to be created in favour of the other.

        11.14.  Liens and Encumbrances. Customer (and its clients) will not have
                the power, authority or right to create and will not permit any
                lien or encumbrance, including without limitation, tax liens,
                mechanics' liens, builders liens or other license or
                encumbrances with respect to work performed, in connection with
                the Equipment or use of the Customer Space.

        11.15.  Language. This Agreement and all related documents have been
                drawn up in English at the mutual request of the parties hereto.
                La presente convention et tous documents y afferents ont ete
                rediges en anglais a la demande mutuelle des parties aux
                presentes.

                        CO-LOCATION TERMS AND CONDITIONS

12.   Grant of License. Subject to the terms of this Agreement, Peer 1 hereby
      grants to Customer, as of the Effective Date, a nonexclusive license to
      install, operate, replace, remove and maintain communications equipment,
      cabling, connections, associated hardware and accessions (the "Equipment")
      in the Co-location Space specified in the Service Table (the "Customer
      Space"), in the Premises during the Term. The license granted in this
      Agreement is a license of space only, and does not create an ownership
      interest or property rights of any nature in Peer 1's real or personal
      property.

13.   Installation and Requirements. Customer will be responsible for the
      delivery and installation of the Equipment and the connection of the
      Equipment to telecommunications lines and power. Except with Peer 1's
      prior written approval and subject to the terms of this Agreement,
      Customer may only install or remove Equipment upon reasonable prior
      written notice to Peer 1 and during business days between 8:00 a.m. and
      5:00 p.m. Customer will only install or place Equipment in the Customer
      Space. Peer 1 reserves the right to approve of Customer's technicians and
      other contractors. During the Term of this Agreement, Customer will
      immediately notify Peer 1 of any space, power or other requirements
      associated with the installation or operation of the Equipment. Peer 1
      will have no duty to monitor, maintain or care for the Equipment.

14.   Maintenance and Use of Premises. Customer, at its own cost and expense,
      will protect, maintain and keep in good order the Customer Space and any
      Equipment in such space. Customer will ensure that neither Customer nor
      its employees, agents, contractors or invitees damage any part of the
      Premises or any property located in or about the Premises, or interfere,
      or allow the Equipment to constitute a hazard to or to interfere with,
      Peer 1 or any other user of the Premises or any equipment owned or used by
      Peer 1 or any other user of the Premises. Customer will not make any
      alterations or installations of any kind to the Premises without the prior
      written consent of Peer 1.

15.   Immediate Threats. If, in the determination of Peer 1, acting reasonably,
      the Equipment poses an immediate threat to the physical integrity of the
      Premises or the physical integrity or performance of the equipment of Peer
      1 or any other user of the Premises, or poses an immediate threat to the
      safety of any person, then Peer 1 may perform such work and take such
      other actions that it may consider necessary without prior notice to
      Customer and without liability for damage to the Equipment or for any
      interruption of Customer's (or its clients') businesses. As soon as
      practicable after performing such work, Peer 1 will advise Customer in
      writing of the work performed or the action taken.

16.   Intervention. If any part of the Equipment is not placed and maintained in
      accordance with this Agreement, and Customer fails to correct the
      violation within 7 days after receipt of written notice thereof from Peer
      1, then Peer 1 may, at its option, without further notice to Customer,
      correct the deficiency at Customer's expense without liability for damages
      to the Equipment or interruption of Customer's (or its clients')
      businesses. As soon as practicable thereafter, Peer 1 will advise Customer
      in writing of the work performed or action taken. Customer will
      immediately reimburse Peer 1 for all expenses reasonably incurred by Peer
      1 associated with any work or action performed by Peer 1 with respect
      thereto.

                                       3
<PAGE>
                                                                          [LOGO]

17.   Relocation. Customer will, at Peer 1's expense, relocate the Equipment to
      other space within the Premises upon Peer 1's written request and within
      15 days of such request.

18.   Periodic Inspections. Peer 1 reserves the right (upon reasonable prior
      notice to Customer) to make periodic inspections of any part of the
      Customer Space or Equipment; provided that Customer will have the right to
      have one or more of its employees or representatives present during any
      such inspection.

19.   Insurance. Customer will maintain, at Customer's expense, during the Term
      of this Agreement for the Premises (i) Comprehensive General Liability
      Insurance protecting Peer 1 as an additional insured in an amount not less
      than one million dollars ($1,000,000.00) per occurrence for bodily injury
      or property damage, and (ii) Worker's Compensation coverage in an amount
      not less than that prescribed by statutory limits. Immediately upon
      commencement of the Term and thereafter upon Peer 1's request, Customer
      will provide Peer 1 with certificates of insurance or other satisfactory
      evidence that the insurance required in this Section has been obtained.
      Under no circumstances will Peer 1 be obligated to provide insurance
      coverage for any Customer Equipment in the Premises.

20.   Access. Subject to the terms of this Agreement and compliance with payment
      terms under Item 4.3, Customer will have unrestricted access to the
      Premises during the Term. Customer will cause its employees, agents,
      contractors or invitees who have access to the Premises to conform to all
      Peer 1 rules and regulations (as amended by Peer 1 from time to time).
      Failure to comply with the payment terms may result in denial of access as
      set forth in Item 6.

21.   Co-location facility Rules and Regulations. Peer 1 may vary these rules
      and regulations from time to time in its sole discretion, and Customer
      will comply with all other reasonable security requirements that Peer 1
      may impose from time to time, provided that Customer has been given 30
      days notice in writing.

        21.1.   All Customer employees, agents, contractors or invitees
                ("Customer Persons") having access to the Premises must be
                approved by Peer 1. Approval by Peer 1 does not release Customer
                from its responsibilities pursuant to this Agreement, nor by
                approving such Customer Persons does Peer 1 waive its right to
                be indemnified by Customer.

        21.2.   Customer must provide Peer 1 with particulars, including a
                current photograph of each Customer Person, before that Customer
                Person is given access to the Premises

        21.3.   No more than three Customer Persons will be authorized to have
                access to the Premises at any time.

22.   Removal of Equipment. Upon termination or expiration of the Term of this
      Agreement, unless prohibited by Peer 1 as permitted by this Agreement,
      Customer will remove the Equipment from the Premises. Unless the Parties
      otherwise agree in writing, in the event the Equipment has not been
      removed within 5 days following the termination or expiration, Peer 1 will
      have the right to remove, relocate, or otherwise store the Equipment at
      Customer's expense without liability to Customer. If after 30 days of such
      storage by Peer 1 Customer has not retrieved the Equipment and paid any
      indebtedness owing to Peer 1, then Peer 1 may exercise all the rights and
      remedies of a secured party under applicable law including, without
      limitation, Peer 1 may sell the Equipment to third parties and use the
      proceeds of such sale to satisfy any such indebtedness as well as any
      costs (including reasonable legal fees) incurred by Peer 1 in exercising
      any remedy under this Agreement.

23.   Security. As continuing security for the obligations of Customer to Peer 1
      as set out in this Agreement, Customer hereby grants to Peer 1 a security
      interest in the Equipment of Customer now located or hereafter located in
      the Customer Space and all proceeds therefrom in the event of a
      disposition thereof in accordance with the terms of this Agreement.

24.   Ownership of Equipment. Customer represents and warrants that it either
      owns all Equipment or has all necessary rights to locate the Equipment in
      the Premises.

25.   Consent to Video Monitoring. Customer acknowledges, agrees and hereby
      consents under applicable privacy laws that Peer 1 may monitor the
      Premises by way of closed circuit television or other monitoring device
      for the purposes of maintaining the safety and security of the Premises,
      any equipment in the Premises, and any persons using or present in the
      Premises from time to time.

                         BANDWIDTH TERMS AND CONDITIONS

26.   Bandwidth Services. Peer 1 will provide to Customer the Internet
      Connectivity, IP Addresses and Internet Traffic services (collectively,
      the "Bandwidth Services"), as specified in the Service Table (as amended
      by the parties from time to time). Peer 1 will provide Bandwidth Services
      in accordance with this Agreement, including the Service Level Agreement
      contained herein. Customer will comply (and will cause its clients to
      comply as if those clients were the Customer) with the Acceptable Uses
      Policy (as amended by Peer 1 from time to time) contained herein. Peer 1
      will have the right, but not the obligation, without prior notice, to
      monitor online conduct and communications, in order to verify compliance
      with this Agreement and applicable law. The security for transmissions
      made using the Bandwidth Services is the responsibility of Customer.
      Customer's sole remedy for any interruption of Bandwidth Services will be
      to receive refunds in accordance with the Service Level Agreement.
      Customer agrees to defend, indemnify and hold harmless Peer 1, and its
      officers, directors and employees (collectively, the "Indemnities"), from
      any and all liabilities, costs and expenses, including reasonable legal
      fees, related to or arising from any action or claim by a third party
      against the Indemnities asserting an intellectual property right violation
      or any other third party claims which concern Customer's (or its clients')
      use of the Bandwidth Services (including without limitation transmission
      of any message, information, software or other materials, or service
      interruptions).

27.   IP Addresses. Any IP Addresses allocated to Customer by Peer 1 must be
      maintained by Customer in an efficient manner as deemed by ARIN and
      utilized at 80% within 30 days of assignment by Peer 1 to Customer.
      Failure to comply with this Section may result in the revocation of IP
      Addresses by Peer 1 after five days notice to Customer.

                                       4
<PAGE>
                                                                          [LOGO]

28.   Traffic Billing.

        28.1    For purposes of billing traffic is measured as of the last day
                of each month.

        28.2    Traffic is measured using MRTG.

        28.3    Real-time access to MRTG data is available via a Web interface.

        28.4    Traffic data is captured on the Peer 1 switch associated with
                the customer connection.

        28.5    All BGP customers will be charged based on the 95th percentile
                method.

<TABLE>
<CAPTION>
                     TECHNICAL SUPPORT AND SERVICES PRICING

                   Network Operations Support (remote hands)

<S>                        <C>    <C>                 <C>                    <C>
Network Operations Support (8am - 5pm Mon - Fri)      $100.00/hour billed in 15 minute increments
Network Operations Support (Outside Business Hours)   $200.00/hour billed in 15 minute increments

                   Network Operations Support (remote hands)

Tape Back-up                             $50.00/month and $5.00/tape change during business hours
                                         $50.00/ tape change weekends/holidays non-business hours
24 hr. systems monitoring                                                        $100.00/month/IP
Primary & secondary DNS                                                        $50.00/year/domain
Domain name changes                                                                 $10.00/domain

                                     Other

Additional Access Cards (key included)                                                $50.00/card
</TABLE>

                          ACCEPTABLE USES POLICY (AUP)

     Customer agrees to use Bandwidth Services only for lawful purposes, in
   compliance with all applicable law. Specific activities that are prohibited
                        include, but are not limited to:

o     Threatening harm to persons or property or otherwise harassing behavior.
o     Violating Canadian export control laws for software or technical
      information.
o     Misrepresenting or fraudulently representing products/services using
      Customer's account.
o     Transmission, distribution or storage of any material in violation of any
      applicable law or regulation.
o     Transmission, distribution or storage of any material protected by
      copyright, trademark, trade secret or other intellectual property right
      without proper authorization, and material that is obscene, defamatory, an
      invasion of privacy or constitutes an illegal threat, or is otherwise
      illegal.
o     Facilitating, aiding, or encouraging any of the above activities, whether
      using Peer 1's network or service by itself or via a third party's network
      or service.
o     Interference with a third party's use of Peer 1's network or service, or
      ability to connect to the Internet or provide services to Internet users.

Email

Sending unsolicited email messages, including, without limitation, commercial
advertising and informational announcements, is explicitly prohibited. Customer
will not use another site's mail server to relay mail without the express
permission of the site. It is strictly forbidden to send out unsolicited email
from any other network that advertises, promotes or in any way points to a
location inside Peer 1 network. It is also strictly forbidden to be involved in
the distribution of tools designed for the aiding of Unsolicited Bulk
Email(UBE). A customer's connectivity may be terminated without delay if the
customer has been documented on a recognized SPAM abuse list or if the customer
has previously been denied access from another provider due to AUP violations.

System and Network Security

Customer is prohibited from utilizing Peer 1 services to compromise the security
or tamper with system resources or accounts on computers at the Premises or at
any third party site.

Specific activities that are prohibited include, but are not limited to:

o     Use or distribution of tools designed for compromising security.

o     Unauthorized access to or use of data, systems or networks, including any
      attempt to probe, scan or test the vulnerability of a system or network or
      to breach security or authentication measures without express
      authorization of the owner of the system or network.

o     Unauthorized monitoring of data or traffic on any network or system
      without express authorization of the owner of the system or network.

o     Deliberate attempts to overload a system and broadcast attacks.

o     Forging of any TCP-IP packet header or any part of the header information
      in an email or a newsgroup posting.

o     Intentionally or negligently transmitting files containing a computer
      virus or corrupted data.

                                       5
<PAGE>
                                                                          [LOGO]

Violation

Peer 1, in its sole discretion, will determine what action will be taken in
response to a violation on a case-by-case basis. Violation of this AUP could
also subject Customer to criminal or civil liability. Peer 1 may block access at
the router level to Customer's Equipment involved. If Peer 1 believes, in its
sole discretion, that a violation of this AUP has occurred, such action may also
include, but is not limited to, temporary or permanent blocking of access to
Customer's Equipment, and the suspension or termination of Customer's services
under this Agreement. Peer 1 may involve and will also fully cooperate with law
enforcement authorities in investigating suspected lawbreakers.

Peer 1 reserves the right to modify this AUP at any time without notice.

Customer is responsible for all use of the Co-location Space and Bandwidth
Services by itself, its employees, agents, contractors, invitees and clients,
whether such use is with or without the consent of Customer.

                            SERVICE LEVEL AGREEMENT

Peer 1 Network has implemented a high-availability Internet Transit network
infrastructure, available within secure Co-location facilities. This has been
accomplished by the following:

1)    All Customer connections make use of Cisco's HSRP (hot standby router
      protocol)
2)    Multiple upstream providers
3)    Fully redundant OCn internal backbone network
4)    All network devices have onsite spares
5)    All key network components are monitored 24x7

Service Level Agreement Terms for Onsite Co-location Customers

Peer 1 will provide 100 % uninterrupted transit to the Internet to all
co-location customers who have purchased said service from Peer 1. Should
transit to the Internet become unavailable for a cumulative period up to one
hour in any one calendar month, Customer will receive a refund equivalent to one
day of Customer's pro-rated Recurring Monthly Fees for that month. Customer will
receive an additional refund of one day of the pro-rated Internet Connectivity
Recurring Monthly Fees for each additional hour, or portion thereof, of
unavailability. All refund calculations will be based on unavailability in
one-hour increments. The above agreement does not cover outages caused by
equipment and/or events not under the direct control of Peer 1 or caused by
individuals not directly employed by Peer 1. This Service Level Agreement does
not cover outages due to scheduled or emergency network and/or facility
maintenance, which will be broadcast to all customers in advance, and will not
exceed 20 minutes per month.

Any and all refunds to Customer will not exceed 50% of the Customer's Recurring
Monthly Fees for the month in which the refund is paid.

Performance Guarantee

Peer 1 will maintain its network in such a manner as to provide to all customers
the best possible performance to the Internet. In order to achieve this Peer 1
makes the following guarantees to all onsite Internet customers:

o     100% guaranteed uninterrupted transit to the Internet
o     Zero packet loss internal to Peer 1 network

In addition to the above performance guarantees Peer 1 will take all possible
measures to insure all Customer traffic reaches its destination in a timely
fashion comparable and within reason to any other carrier in the area. These
measures include the manipulation of routing tables so as to direct traffic to
the Internet using its best possible upstream link.

By signing below, each party acknowledges that it has read, understands, and
agrees to the terms of this Co-location and Bandwidth Services Agreement.

Agreed to by:

PEER 1 NETWORK, INC.               CUSTOMER

By:                                By:
    -----------------------            -----------------------
(Signature)                        (Signature)
Elisabeth Philibert                George Metrakos
---------------------------        ---------------------------
(Name typed or printed)            (Name typed or printed)
City Manager
---------------------------        General Manager - President
(Title)                            ---------------------------
---------------------------        (Title)
(Date)                             ---------------------------
                                   (Date)

                                       6
<PAGE>
                                                                          [LOGO]

                                  SCHEDULE "1"
                                 SERVICE TABLE

Company Name: TeliPhone inc.

Address: 1080, Cote du Beaver Hall suite 1555 Montreal, Qc H2Z 1S8

General Company Number: 514-313-6010

Fax Number: 514-313-6001

Admin Contact (Name/Email/Phone): George Metrakos /
              gmetrakos@teliphone.ca / 514-313-6010

Technical Contact (Name/Email/Phone): Benoit Laliberte /
                  blaliberte@teliphone.ca / 514-313-3432

Accounts Payable Contact (Name/Email/Phone): George Metrakos /
                         gmetrakos@teliphone.ca / 514-313-6010

--------------------------------------------------------------------------------
Co-location and Bandwidth Services
Includes: 1 x 100 Mb port, 2 access cards, 2 keys
Standard Cages: UPS included; Custom Cages: UPS customer supplied
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                         Description                Qty    One-time Charges     Monthly Recurring
<S>                                  <C>      <C>    <C>              <C>                   <C>
Cage Type                Custom cage 81s.f. + 2Mb    1                0.00$               2 670.00$
Bandwidth commitment
Cross Connect/Cable Pull
Power
Additional Access Cards
Other

                                                           Subtotal:  0.00$     Subtotal: 2 670.00$
                                                           GST:       0.00$     GST:        186.90$
                                                           PST:       0.00$     PST:        214.27$
                                                           TOTAL A:   0.00$     TOTAL B:  3 071.17$

                         Total A + Total B = first         First month's payment: N/A
                         month's payment due upon
                         signing of agreement
</TABLE>

       Premises: 1080 Beaver Hall, Montreal
       Currency : CAD
       Term: 12 months
       Invoice: By email at gmetrakos@teliphone.ca
       Customer's Scheduled Move-In Date ("Effective Date"): December 1st, 2005

Special Instructions:

o     United American Corp, Inc. is responsible for this Co-location and
      Bandwidth Services Agreement on the behalf of TeliPhone inc (it's wholly
      owned subsidiary), and will take over the responsibility of this Agreement
      in the event of TeliPhone inc. not being able to do so.

                               BANDWIDTH PRICING

   Billing Method:      95th Percentile

                              Committed Traffic         Commit Price

Commitment first 6 months    2 Mb traffic per month   Included in monthly
                                                         fee of 2 670$

           Transfer Rate in Mb             No Commitment/BURST
               2.01 - 25                          $225/Mb
              25.01 - 50                          $200/Mb

                                       7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}]]