IFS INTERNATIONAL INC
SB-2/A, 1997-01-17
BLANK CHECKS
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<PAGE>

   
   AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 17, 1997 
                                                            FILE NO. 333-11653 
================================================================================
                   U.S. SECURITIES AND EXCHANGE COMMISSION 
                            Washington, D.C. 20549 
                                    ------ 
                               Amendment No. 1 
                                      to 
                                  Form SB-2 
                            REGISTRATION STATEMENT 
                                    Under 
                          THE SECURITIES ACT OF 1933 
                                    ------ 
                           IFS INTERNATIONAL, INC. 
                (Name of small business issuer in its charter) 
<TABLE>

<S>                                                    <C>                             <C>        
             Delaware                                  5045                            13-3393646 
 (State or other jurisdiction of           (Primary Standard Industrial             (I.R.S. Employer 
  incorporation or organization)           Classification Code Number)            Identification No.) 
</TABLE>
    

                           Rensselaer Technology Park
                                 185 Jordan Road
                              Troy, New York 12180
                                 (518) 283-7900
          (Address and telephone number of principal executive offices)
                                     ------

                           Rensselaer Technology Park
                                 185 Jordan Road
                              Troy, New York 12180
                   (Address of principal place of business or
                     intended principal place of business)

                   FRANK A. PASCUITO, Chief Executive Officer
                             IFS International, Inc.
                           Rensselaer Technology Park
                                 185 Jordan Road
                              Troy, New York 12180
                                 (518) 283-7900
            (Name, address and telephone number of agent for service)
                                     ------

                                   Copies to:
   MICHAEL D. DIGIOVANNA, Esq.              JAMES MARTIN KAPLAN, Esq. 
   PARKER DURYEE ROSOFF & HAFT          ZIMET, HAINES, FRIEDMAN & KAPLAN 
        529 Fifth Avenue                         460 Park Avenue 
    New York, New York 10017                New York, New York 10022 
         (212) 599-0500                          (212) 486-1700 

   Approximate date of proposed sale to the public: As soon as practicable 
after the effective date of this Registration Statement 

   If this Form is filed to register additional securities for an offering 
pursuant to Rule 462(b) under the Securities Act, please check the following 
box and list the Securities Act registration statement number of the earlier 
effective registration statement for the same offering. / /

   If this Form is a post-effective amendment filed pursuant to Rule 462(c) 
under the Securities Act, check the following box and list the Securities Act 
registration statement number of the earlier effective registration statement 
for the same offering. / /

   If delivery of the prospectus is expected to be made pursuant to Rule 434, 
please check the following box. / / 

   The registrant hereby amends this registration statement on such date or 
dates as may be necessary to delay its effective date until the registrant 
shall file a further amendment which specifically states that this 
registration statement shall thereafter become effective in accordance with 
Section 8(a) of the Securities Act of 1933 or until the registration 
statement shall become effective on such date as the Commission, acting 
pursuant to said Section 8(a), may determine. sion, acting pursuant to said 
Section 8(a), may determine. 
===============================================================================
<PAGE>
                       CALCULATION OF REGISTRATION FEE 
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
                                                     Proposed       Proposed
                                                     maximum         maximum        Amount of 
      Title of each class of        Amount to be  offering price    aggregate     registration 
    securities to be registered      registered     per unit(1) offering price(1)     fee 
- ------------------------------------------------------------------------------------------------
<S>                                <C>            <C>           <C>               <C>
Series A Convertible Preferred 
 Stock, $.001 par value(2)  ....   1,380,000shs.      $5.00        $6,900,000      $2,090.91 
- -----------------------------------------------------------------------------------------------
Redeemable Series A Convertible 
 Preferred Stock Purchase 
 Warrants(3)  ..................   1,955,000wts.      $0.10         $195,500         $59.24 
- -----------------------------------------------------------------------------------------------
Series A Convertible Preferred 
 Stock, $.001 par value(4)  ....   1,955,000shs.      $6.25        $12,218,750     $3,702.65 
- -----------------------------------------------------------------------------------------------
Underwriter's Warrants  ........    290,000wts.       $0.001          $290            (5) 
- -----------------------------------------------------------------------------------------------
Series A Convertible Preferred 
 Stock, $.001 par value(6)  ....    120,000shs.       $6.25         $750,000        $227.28 
- -----------------------------------------------------------------------------------------------
Redeemable Series A Convertible 
 Preferred Stock Purchase 
 Warrants(6)  ..................    170,000wts.       $0.125         $21,250         $6.44 
- -----------------------------------------------------------------------------------------------
Series A Convertible Preferred 
 Stock, $.001 par value(7)  ....    170,000shs.      $7.8125       $1,328,125       $402.47 
- -----------------------------------------------------------------------------------------------
Common Stock, $.001 par 
 value(8)  .....................   3,625,000shs.        --             --             (9) 
- -----------------------------------------------------------------------------------------------
Common Stock, $.001 par 
 value(10)  ....................    100,000shs.       $2.50         $250,000         $75.76 
- -----------------------------------------------------------------------------------------------
Total Registration Fee  ........................................................ $6,564.75(11) 
- -----------------------------------------------------------------------------------------------
</TABLE>

   
 (1) Estimated solely for the purpose of calculating the registration fee 
     pursuant to Rule 457(c). 

 (2) Includes 180,000 shares of Series A Convertible Preferred Stock issuable 
     pursuant to the Underwriter's over allotment option. 

 (3) Includes 255,000 Redeemable Series A Convertible Preferred Stock 
     Purchase Warrants issuable pursuant to the Underwriter's over allotment 
     option. 

 (4) Represents Series A Convertible Preferred Stock reserved for issuance 
     upon the exercise of the Redeemable Series A Convertible Preferred Stock 
     Purchase Warrants. 

 (5) Pursuant to Rule 457(g), no fee is paid for the registration of such 
     securities. 

 (6) Issuable upon exercise of the Underwriter's Warrants. 

 (7) Represents Series A Convertible Preferred Stock issuable upon exercise 
     of the warrants issuable upon exercise of the Underwriter's warrants. 

 (8) Represents the aggregate shares of Common Stock into which the Series A 
     Convertible Preferred Stock, including the Series A Convertible 
     Preferred Stock issuable upon exercise of the Redeemable Series A 
     Convertible Stock Purchase Warrants, is convertible. 

 (9) Pursuant to Rule 457(i), no fee is paid for the registration of such 
     securities. 

(10) Represents shares of Common Stock being sold by the Selling Stockholders 
     named herein upon exercise of outstanding warrants. 

(11) $6,456.20 has been previously paid. 
    
                                    
<PAGE>

Information contained herein is subject to completion or amendment. A 
registration statement relating to these securities has been filed with the 
Securities and Exchange Commission. These securities may not be sold nor may 
offers to buy be accepted prior to the time the registration statement 
becomes effective. This prospectus shall not constitute an offer to sell or 
the solicitation of an offer to buy nor shall there be any sale of these 
securities in any State in which such offer, solicitation or sale would be 
unlawful prior to registration or qualification under the securities laws of 
any such state. 

   
                            SUBJECT TO COMPLETION 
                PRELIMINARY PROSPECTUS DATED JANUARY 17, 1997 
           1,200,000 SHARES OF SERIES A CONVERTIBLE PREFERRED STOCK 
 1,700,000 REDEEMABLE SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE WARRANTS 
                           IFS INTERNATIONAL, INC. 

   IFS International, Inc. (the "Company") is offering hereby 1,200,000 
shares of its Series A Convertible Preferred Stock (the "Preferred Stock") 
and 1,700,000 Redeemable Series A Convertible Preferred Stock Purchase 
Warrants (the "Warrants"). The Preferred Stock and Warrants may be purchased 
separately and shall be separately transferable immediately upon issuance. 
Each share of Preferred Stock is convertible, at the option of the holder, 
into one share of Common Stock, subject to adjustment, for a period of five 
years commencing on the date hereof; provided that the Preferred Stock must 
be converted into Common Stock upon the earlier of the fifth anniversary of 
the date hereof or the occurrence of certain events. Each Warrant entitles 
the registered holder thereof to purchase one share of Preferred Stock at a 
price of $6.25 per share, subject to adjustment, for a period of three years 
commencing on _______________, 1999 [two years from the date of this 
Prospectus]; except that if the Warrants are called for redemption, or the 
Preferred Stock is required to be converted, prior to _________, 1999 [two 
years from the date of this Prospectus], the Warrants will be exercisable 
from the date on which notice of such redemption or mandatory conversion is 
given by the Company. The Warrants are redeemable, with the prior consent of 
Duke & Co., Inc. (the "Underwriter"), at any time commencing on 
_______________, 1998 [one year from the date of this Prospectus], upon 
notice of not less than 30 days, at a price of $0.10 per Warrant, provided 
that the last sale price of the Preferred Stock has been equal to or greater 
than $8.00 per share, subject to adjustment, for a period of 20 consecutive 
days of trading of the Preferred Stock prior to the mailing of the notice of 
redemption. See "Description of Securities." 

   Prior to this offering, there has been no public market for the Preferred 
Stock or the Warrants. It is currently estimated that the initial public 
offering price of the Preferred Stock will be approximately $5.00 per share 
and that the initial public offering price of the Warrants will be 
approximately $0.10 per Warrant. For factors considered in determining the 
initial public offering prices of the Preferred Stock and the Warrants and 
the exercise price of the Warrants, see "Underwriting." The Common Stock is 
quoted on the OTC Bulletin Board and on January 13, 1997, the closing bid 
price of the Common Stock was $3.50. The Company has applied to have the 
Preferred Stock, Warrants and Common Stock approved for quotation on The 
Nasdaq SmallCap Market under the symbols "EFTAP", "EFTAW" and "EFTA," 
respectively. The Company also intends to apply to the Boston Stock Exchange 
to list the Preferred Stock and Warrants for trading thereon. 

                This offering involves a high degree of risk. 
               See "Risk Factors" commencing on page 7 hereof. 
                                    ------ 
    
<PAGE>

  THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
       EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
     COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
       OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
                             IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
================================================================================
                                     Price to     Underwriting     Proceeds to                        
                                      Public      Discounts(1)     Company(2) 
- --------------------------------------------------------------------------------
<S>                                   <C>         <C>              <C>
Per Share ........................     $              $                $ 
- --------------------------------------------------------------------------------
Per Warrant  .....................     $              $                $ 
- --------------------------------------------------------------------------------
Total (3)  .......................     $              $                $ 
================================================================================
</TABLE>           
   
(1) Does not include additional compensation to the Underwriter in the form 
    of a nonaccountable expense allowance of 3% of the gross proceeds of this 
    offering. The Company has also agreed to sell to the Underwriter warrants 
    to purchase up to 120,000 shares of Preferred Stock at $6.25 per share 
    and up to 170,000 warrants (each to purchase one share of Preferred Stock 
    at an exercise price of $7.8125 per share), at an exercise price of $.125 
    per warrant, exercisable over a period of four years commencing one year 
    from the date hereof (the "Underwriter's Warrants") and to indemnify the 
    Underwriter against certain liabilities, including liabilities under the 
    Securities Act of 1933, as amended (the "Securities Act"). See 
    "Underwriting." 
    

(2) Before deducting expenses, including the Underwriter's nonaccountable 
    expense allowance of $_________ ($_________ if the Underwriter's 
    over-allotment option is exercised in full), estimated at $_________ 
    ($___________ if the Underwriter's over-allotment option is exercised in 
    full), payable by the Company. 

(3) The Company has granted the Underwriter a 45-day option to purchase up to 
    180,000 shares of Preferred Stock and up to 255,000 Warrants upon the 
    same terms and conditions as set forth above, solely to cover 
    over-allotments, if any. If such over-allotment option is exercised in 
    full, the total Price to Public, Underwriting Discounts and Proceeds to 
    Company will be $________, $____________ and $_____________, 
    respectively. See "Underwriting." 

   
   The Preferred Stock and Warrants are being offered, subject to prior sale, 
when, as and if delivered to and accepted by the Underwriter and subject to 
the approval of certain legal matters by counsel and to certain other 
conditions. The Underwriter reserves the right to withdraw, cancel or modify 
this offering and to reject any order in whole or in part. It is expected 
that delivery of certificates representing the Preferred Stock and Warrants 
will be made against payment therefor on or about ________________, 1997, at 
the offices of the Underwriter, 909 Third Avenue, New York, New York 10022. 
                                    ------ 
    

                           LOGO DUKE & CO., INC. 

   
                  The date of this Prospectus is      , 1997 
    

                                     
<PAGE>

   Concurrently with this offering, the Company also has registered on behalf 
of certain of its stockholders (the "Selling Stockholders") 100,000 shares of 
Common Stock (the "Selling Stockholders' Shares"). The Selling Stockholders' 
Shares are not part of this underwritten offering, however, and may not be 
sold prior to 12 months after the closing of this offering. The Company will 
not receive any proceeds from the sale of the Selling Stockholders' Shares. 

                            AVAILABLE INFORMATION 

   The Company is subject to the informational requirements of the Securities 
Exchange Act of 1934, as amended (the "Exchange Act"). In accordance 
therewith, the Company files reports and other information with the 
Securities and Exchange Commission (the "Commission"). Reports, proxy 
statements and other information that have been or will be filed by the 
Company can be inspected and copied at the public reference facilities 
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., 
Washington, D.C. 20549 and at the Regional Offices of the Commission at 7 
World Trade Center, New York, New York 10048 and Northwestern Atrium Center, 
500 West Madison Street, Chicago, Illinois 60621. Copies of such material may 
be obtained from the Public Reference Section of the Commission at prescribed 
rates by writing to the Commission at 450 Fifth Street, N.W., Washington, 
D.C. 20549. In addition, the Commission maintains a Web site on the Internet 
at http://www.sec.gov that contains reports and other information of issuers 
that file electronically with the Commission. 

   The Company has filed with the Commission a Registration Statement on Form 
SB-2 under the Securities Act with respect to the securities being offered 
hereby. This Prospectus does not contain all the information set forth in the 
Registration Statement, certain parts of which are omitted in accordance with 
the rules and regulations of the Commission. For further information, 
reference is made to the Registration Statement, copies of which can be 
obtained from the Public Reference Section of the Commission at Room 1024, 
450 Fifth Street, N.W., Washington, D.C. 20549, upon payment of the fees 
prescribed by the Commission. 

                                STABILIZATION 

   IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT 
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE PREFERRED 
STOCK OR WARRANTS OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE 
PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ 
SMALLCAP MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY 
TIME. 
<PAGE>

                              PROSPECTUS SUMMARY 

   
   The following summary is qualified in its entirety by the more detailed 
information and the Consolidated Financial Statements and notes thereto 
appearing elsewhere in this Prospectus. Unless otherwise indicated, such 
information has been adjusted to reflect a 1-for-10 reverse split of the 
Company's common stock (the "Common Stock") effectuated at the close of 
business on November 8, 1996 and assumes no exercise of outstanding options 
and warrants, the Underwriter's Warrants and the Underwriter's over- 
allotment option. Unless the context requires otherwise, as used in this 
Prospectus, the "Company" means IFS International, Inc. and its wholly-owned 
subsidiaries. 

   Certain terms used in the Prospectus are defined in the Glossary on page 
40. 
    

                                 THE COMPANY 

   The Company is engaged in the business of developing, marketing and 
supporting software products for the electronic funds transfer ("EFT") 
market. The Company's family of software products, marketed under the name 
TechNique Plus II ("TPII"), serves as a UNIX-based manager for EFT systems. 
TPII software products are designed to operate with computers utilizing the 
UNIX operating system, are written in C programming language and incorporate 
Oracle relational database technology and object oriented design concepts. As 
a result, TPII software products are compatible with a significant portion of 
the industry standard computer platforms. 

   An EFT system ("EFT System") of a bank or other financial institution 
permits the processing of transactions involving credit cards and debit cards 
(e.g., ATM cards). An EFT System generally consists of one or more of the 
following in various configurations: automatic teller machines ("ATMs"), 
point of sale ("POS") terminals, a host computer of the financial institution 
and regional, national and international networks ("Networks"), such as 
CIRRUS, NYCE, MAC or PLUS. TPII software products primarily route and 
authorize the processing of transactions through an EFT System. TPII software 
is offered in separate modules which perform different functions, including 
(i) interfacing with ATMs, POS terminals, a financial institution's host 
computer and Network computers, (ii) updating credit and debit card 
information, (iii) providing stand-in authorization for transactions when the 
financial institution's host computer is not operating, (iv) computing fees 
for transactions processed and (v) generating of reports. The TPII software 
products are installed generally at the financial institution's main 
processing facility. 

   
   The Company's primary business objective is to become a leading world-wide 
supplier of UNIX- based managers for EFT Systems. To date, the Company's TPII 
software products have been primarily installed in EFT Systems of banks and 
other financial institutions located in emerging countries and former Eastern 
Bloc nations. As of December 31, 1996, fourteen financial institutions and 
two Networks were utilizing TPII software products. Certain of such financial 
institutions serve up to 200 ATMs and 1,000 POS terminals and the two 
Networks serve 22 and 5 financial institutions, respectively. In addition, 
agreements have been executed for the installation of TPII software products 
in EFT Systems of four additional financial institutions (which excludes the 
agreements relating to the smart card pilot programs referred to below). The 
Company principally derives its revenues from the licensing of its TPII 
software products. A substantial portion of such revenues are generated by 
licensing through or to computer manufacturers, which incorporate the TPII 
software products into a turnkey system installed at a financial institution. 
The preparation of functional specifications, customization and installation 
of TPII software products and the training by the Company of the financial 
institution's personnel in the use of the TPII software products take an 
average of six to twelve months, depending upon the timing of installation 
and final acceptance of the EFT System by the customer. The Company generally 
receives payment of a substantial portion of the license fee prior to the 
final acceptance by the customer. The Company provides its customers with 
maintenance services for its TPII software for a separate fee. The Company 
also offers other support services, such as additional training of customer 
personnel and consulting, for additional consideration. 
    

   The Company recently has adapted its TPII software to manage EFT Systems 
that process transactions involving the "loading" of value on smart cards. A 
smart card is a plastic card with an electronic chip 

                                      3 
<PAGE>

   
that acts as a small computer. These cards can include a stored value 
feature, which enables the holder to "load" a fixed amount of purchasing 
power or cash equivalent on the card as authorized. As a result, the holder 
can purchase items or services without the necessity of carrying cash or 
entering into a credit card transaction. The Company has developed software 
for Visa International Service Association ("Visa") to manage an EFT System 
that facilitates the "loading" of value on a smart card through a bank's 
terminals. As a result of a successful test of the Company's TPII smart card 
software, Visa entered into an agreement with the Company in July 1996 for 
the licensing and installation of this software in connection with the 
operation of up to seven pilot programs for the purposes of evaluating the 
TPII smart card software and other aspects of the smart card system. The 
license for each pilot program is for a term of 24 months commencing on the 
date such pilot program goes on-line. As of the date hereof, Visa has 
selected financial institutions in the following countries to conduct five of 
the pilot programs: the United States, the United Kingdom, Japan, Germany and 
Italy. The Company anticipates that the first pilot program that will become 
operational will be in Germany during the first calendar quarter of 1997. 
Although there can be no assurance, the Company anticipates that revenues 
from its agreement with Visa will have a material impact on its financial 
position during the next 9-12 months. 
    

   The Company was incorporated in Delaware in 1986 under the name "Wellsway 
Ventures, Inc." and changed its name to "IFS International, Inc." in 1989. 
The Company's principal offices are located at Rensselaer Technology Park, 
185 Jordan Road, Troy, New York 12180 and its telephone number is (518) 
283-7900. 

                                 THE OFFERING 

<TABLE>
<CAPTION>
<S>                                 <C>
 Securities offered by 
  the Company ....................  1,200,000 shares of Preferred Stock 
                                    1,700,000 Warrants 
Common Stock: 
 To be outstanding after this 
   offering.......................  1,062,409 shares (1) 
Preferred Stock: 
 To be outstanding after this
   offering ......................  1,200,000 shares 
 Conversion Rate  ................  One share of Common Stock for each share of Preferred Stock, subject to adjustment 
                                    to prevent dilution in certain circumstances. See "Description of Securities." 
 Conversion Period  ..............  Commencing on the date hereof and terminating on , 2002 [five years from the 
                                    date of this Prospectus]; provided that the Preferred Stock must be converted 
                                    ("Mandatory Conversion") on the earlier of (i) , 2002 [five years from the date 
                                    of this Prospectus] or (ii) the consummation date of a merger or acquisition 
                                    of the Company in which the then outstanding securities of the Company are surrendered 
                                    or exchanged for cash, property or securities of another entity if the consideration 
                                    received in any such transaction is not less than $5.00 per share on a fully-diluted 
                                    basis. See "Description of Securities." 
 Voting Rights  ..................  One vote for each share held of record on all matters submitted to a vote of 
                                    stockholders, voting separately as a class, except that with respect to the 
                                    election of directors, the Preferred Stock and the Common Stock vote together 
                                    as one class. See "Description of Securities." 
 Liquidation Preference  .........  $5.00 per share 

</TABLE>
                                      4 
<PAGE>
<TABLE>
<CAPTION>
<S>                                 <C>
Warrants: 
 To be outstanding after this 
   offering.......................  1,700,000 Warrants 
 Exercise Price  .................  $6.25 per share of Preferred Stock, subject to adjustment. See "Description 
                                    of Securities." 
 Exercise Period  ................  Commencing on , 1999 [two years from the date of this Prospectus], and terminating 
                                    on , 2002 [five years from the date of this Prospectus]; except that (i) in 
                                    the event the Company gives notice of redemption of the Warrants prior to , 
                                    1999 [two years from the date of this Prospectus], the exercise period of the 
                                    Warrants will commence on the date of the notice of redemption and terminate 
                                    on the day prior to the date fixed for redemption or (ii) if the Preferred Stock 
                                    is subject to Mandatory Conversion prior to , 1999 [two years from the date 
                                    of this Prospectus], the exercise period of the Warrants will commence on the 
                                    date of notice of the Mandatory Conversion. See "Description of Securities." 
 Redemption  .....................  The Warrants are redeemable, with the prior consent of the Underwriter, at any 
                                    time commencing on , 1998 [one year from the date of this Prospectus], upon 
                                    notice of not less than 30 days, at a price of $.10 per Warrant, provided that 
                                    the last sale price of the Preferred Stock has been equal to or greater than 
                                    $8.00 per share, subject to adjustment, for 20 consecutive trading days prior 
                                    to the notice of redemption. See "Description of Securities." 
Use of Proceeds  .................  Expand contract capabilities by increasing personnel and computer-related 
                                    equipment, expand foreign marketing and licensing activities, research and 
                                    development for new and existing products, purchase and renovate new office 
                                    space, repayment of debt and interest and working capital. See "Use of Proceeds." 
Risk Factors  ....................  This offering involves a high degree of risk. Prospective investors should carefully 
                                    consider the risk factors set forth under "Risk Factors." 
Proposed Nasdaq Symbols(2) 
 Preferred Stock  ................  EFTAP 
 Warrants  .......................  EFTAW 
 Common Stock  ...................  EFTA 

</TABLE>

   
- ------ 
(1) Assumes no conversion of the Preferred Stock or certain outstanding 
    convertible debt (which debt is convertible into a maximum of 59,524 
    shares of Common Stock (subject to adjustment pursuant to anti-dilution 
    provisions)) or exercise of outstanding options to purchase 408,392 
    shares of Common Stock and outstanding warrants to purchase 100,000 
    shares of Common Stock. 
    

(2) Quotation on The Nasdaq SmallCap Market does not imply that a meaningful 
    sustained market for the Preferred Stock, the Warrants and/or the Common 
    Stock will develop. 

                                      5 
<PAGE>

                     SELECTED CONSOLIDATED FINANCIAL DATA 
                   (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 

STATEMENT OF OPERATIONS DATA: 

<TABLE>
<CAPTION>
                                                                               Six Months Ended 
                                                      Year Ended April 30,       October 31, 
                                                      --------------------   -------------------- 
                                                                                 (unaudited) 
                                                         1996       1995       1996       1995 
                                                       --------   --------    --------   -------- 
<S>                                                   <C>         <C>         <C>        <C>
Total revenues  ....................................    $2,441     $2,041     $1,587      $ 695 
Cost of revenues and services  .....................       505        346        388        163 
Operating expenses  ................................     1,934      1,857      1,021        922 
Income (loss) from operations  .....................         2       (162)       178       (390) 
Other income (expense)  ............................       (50)       (44)       (26)       (24) 
Litigation settlement costs  .......................        --         --       (100)        -- 
Income (loss) before income taxes and extraordinary 
  item .............................................       (48)      (206)        52       (414) 
Income (loss) before extraordinary item  ...........       (48)      (206)        52       (414) 
Extraordinary item - gain on debt restructuring and 
  extinguishments ..................................        --        378         --         -- 
Net income (loss)  .................................       (48)       172         52       (414) 
Net income (loss) per common share  ................    $ (.05)    $  .18     $  .04      $(.41) 
Weighted average shares outstanding  ...............     1,002        953      1,043        998 

</TABLE>

BALANCE SHEET DATA: 

<TABLE>
<CAPTION>
                                                      October 31, 1996 
                                               ------------------------------- 
                                                        (Unaudited) 
                                               Actual          As Adjusted(1) 
                                               --------         -------------- 
<S>                                            <C>             <C>
Working capital (deficit)  ...........         $ (874)             $4,179 
Total assets  ........................          2,070               6,623 
Total long-term debt  ................            436                 436 
Total stockholders' equity (deficit)             (634)              4,419 

</TABLE>

- ------ 
(1) As adjusted to give effect to the sale of 1,200,000 shares of Preferred 
    Stock and 1,700,000 Warrants offered hereby and the application of the 
    net proceeds therefrom (assuming initial public offering prices of $5.00 
    per share of Preferred Stock and $.10 per Warrant), including the 
    repayment of $500,000 in indebtedness incurred in September 1996 (the 
    "Bridge Financing"). See "Use of Proceeds," "Capitalization" and "Certain 
    Transactions." 

                                      6 
<PAGE>

                                 RISK FACTORS 

   The securities offered hereby are highly speculative and should be 
purchased only by persons who can afford to lose their entire investment in 
the Company. Each prospective investor should carefully consider the 
following risk factors, as well as all other information set forth elsewhere 
in this Prospectus. 

   This Prospectus contains certain forward-looking statements. Actual 
results could differ materially from those projected in the forward-looking 
statements as a result of the factors set forth below and elsewhere in this 
Prospectus, including, but not limited to, the success of the Visa pilot 
programs, the development of the capacity to accommodate additional and 
larger contracts, establishing the ability of TPII software products to 
process transactions for larger EFT Systems, acceptance of TPII software 
products by a significant number of new customers and the Company's continued 
relationship with computer manufacturers. 

   
OPERATING LOSSES; GOING CONCERN UNCERTAINTY INCLUDED AS PART OF AUDITOR'S 
REPORT 

   Although the Company had net income of approximately $52,100 for the six 
months ended October 31, 1996, the Company incurred a net loss of $48,380 for 
its fiscal year ended April 30, 1996 and a loss before extraordinary item of 
$205,472 for its fiscal year ended April 30, 1995. As of October 31, 1996, 
the Company had a shareholder's deficit of $633,687, an accumulated deficit 
of $2,854,345 and a working capital deficit of $874,445. In addition, as of 
October 31, 1996, the Company was not in compliance with several covenants of 
certain of its long-term debt obligations, including the nonpayment of 
principal and interest. However, the Company has received waivers with 
respect to such noncompliance and intends to repay the deferred principal and 
interest with a portion of the net proceeds of this offering. The Company's 
auditor, in its report regarding the Company's financial statements as of 
April 30, 1996, indicated that, since the Company had a working capital 
deficiency and a shareholders' deficit as of April 30, 1996, substantial 
doubt exists as to the Company's ability to continue as a going concern. 
There can be no assurance as to the future profitability of the Company. See 
"Selected Financial Data" and "Management's Discussion and Analysis of 
Financial Condition and Results of Operations." 
    

RELIANCE ON TPII FAMILY OF SOFTWARE PRODUCTS 

   
   The Company derived approximately 90%, 96% and 95% of its total revenues 
for the fiscal years ended April 30, 1995 and 1996, and the six months ended 
October 31, 1996, respectively, from the licensing of its TPII family of 
software products, services related to those products and isolated hardware 
sales. The TPII software products and related services are expected to 
provide the substantial majority of the Company's revenues in the forseeable 
future. The Company's results will depend upon continued market acceptance of 
its TPII software products and related services as well as the Company's 
ability to continue to adapt and configure its TPII software products to meet 
the changing needs of its customers. Any reduction in demand for TPII 
software products would have a material adverse effect on the Company's 
financial condition and results of operations. See "Management's Discussion 
and Analysis of Financial Condition and Results of Operations." 
    

DEPENDENCE ON REVENUES FROM FOREIGN SOURCES 

   
   The Company derived approximately 91%, 82% and 50% of its total revenues 
for the fiscal years ended April 30, 1995 and 1996, and the six months ended 
October 31, l996, respectively, from the licensing of TPII software products 
to customers outside the United States, primarily banks and other financial 
institutions located in emerging countries and former Eastern Bloc nations. 
Foreign revenues generally are subject to certain risks, including collection 
of accounts receivable, compliance with foreign regulatory requirements, 
variability of foreign economic conditions and changing restrictions imposed 
by United States export laws. To date, all foreign customers have paid the 
Company in United States currency, but if future customers pay in foreign 
currencies, the Company would be subject to fluctuations in exchange rates. 
There can be no assurance that the Company will be able to manage the risks 
related to licensing its TPII software products and selling its services in 
foreign markets. See "Business -- Marketing and Customers." 
    

DEPENDENCE ON EFT MARKET 

   The TPII software products are solely for installation in the EFT market, 
making the Company susceptible to adverse events in that market. For example, 
a decrease in the number of EFT transactions by the general pub- 

                                      7 
<PAGE>

lic or in spending by financial institutions for software and related 
services could result in a smaller overall market for EFT software. These 
factors, as well as others negatively affecting the EFT market, could have a 
material adverse effect on the Company's financial condition and results of 
operations. See "Business -- The EFT Market." 

POSSIBLE NEED FOR ADDITIONAL FINANCING 

   The Company believes that the proceeds of this offering, together with 
anticipated cash flow from operations, will be sufficient to finance the 
Company's working capital requirements for a period of at least 24 months 
following the completion of this offering. However, since a portion of the 
license fee for TPII software products is not paid until acceptance by the 
customer and, as a result, the Company is required to fund a portion of the 
costs of configuration and installation of such products from available 
capital, any substantial increase in the number of installations or delay in 
payment could create a need for additional financing. In such event, there 
can be no assurance that additional financing will be available on terms 
acceptable to the Company, or at all. The Underwriter's consent is required 
before the Company may complete certain types of financing. The obligation to 
obtain such consent may limit the Company's ability to complete such 
financing. See "Management's Discussion and Analysis of Financial Condition 
and Results of Operations" and "Underwriting." 

DEPENDENCE ON RELATIONSHIPS WITH COMPUTER MANUFACTURERS 

   
   In 1994, the Company entered into a strategic alliance with Digital 
Equipment International BV ("DEC"), pursuant to which such computer 
manufacturer agreed to market on a nonexclusive basis TPII software products 
in connection with DEC's world-wide sale of its computers for EFT Systems. In 
connection with DEC's sale of computers for EFT Systems, DEC, rather than the 
financial institutions, is generally the licensee of the Company's TPII 
software products. For the fiscal years ended April 30, 1995 and 1996 and the 
six months ended October 31, 1996, approximately 19%, 14% and 23%, 
respectively, of the Company's total revenues were derived pursuant to this 
relationship. The Company is, therefore, dependent upon this relationship and 
would be adversely affected by the loss of such relationship. The Company has 
a similar agreement with Unisys World Trade, Inc. ("Unisys") for Europe and 
Africa, but as of the date hereof, the Company has not derived any revenues 
pursuant to its relationship with Unisys. In addition, pursuant to an 
informal arrangement with IBM Thailand Company Limited ("IBM Thailand"), the 
Company licensed its TPII software products, through IBM Thailand, to two 
Asian financial institutions utilizing International Business Machine 
Corporation ("IBM") computers for their EFT Systems. Revenues from such 
licenses represented approximately 19% of the Company's total revenues during 
the fiscal year ended April 30, 1996. The Company is currently seeking to 
enter into alliances with additional computer manufacturers. See "Business -- 
Marketing and Customers." 
    

GROWTH DEPENDENT ON EXPANDING CUSTOMER BASE 

   
   Approximately 72% and 50% of the Company's software revenues for the 
fiscal year ended April 30, 1996 and the six months ended October 31, 1996, 
respectively, were derived from the licensing of its TPII software products 
to new customers at a fixed price. Although the Company will receive 
additional revenues from such customers as a result of providing ongoing 
maintenance services in support of its licensed TPII software and may receive 
additional revenues for enhancements of the TPII software products, the 
Company generally will not receive significant license revenues in a 
subsequent period from these customers. Since the Company does not usually 
generate repeat business from its customers, the Company will be required to 
continually attract new customers in order to increase revenues in the 
future. As a result, the Company will incur the higher marketing expenses 
generally associated with attracting new customers as compared to marketing 
expenses associated with attracting additional business from existing 
customers. Moreover, the Company's inability to generate additional business 
upon completion of its existing contracts would also have a material adverse 
effect on the Company's financial condition and results of operations. See 
"Management's Discussion and Analysis of Financial Condition and Results of 
Operations" and "Business -- Marketing and Customers." 
    

FLUCTUATIONS IN QUARTERLY REVENUES AND OPERATING RESULTS 

   Quarterly revenues and operating results have fluctuated and will 
fluctuate as a result of a variety of factors. The Company can experience 
long delays (i.e., between three to twelve months) before a customer executes 

                                      8 
<PAGE>

a software licensing agreement. These delays are primarily due to extended 
periods of software evaluation, contract review and the selection of the 
computer system. In addition, following execution of the agreement, the 
preparation of functional specifications, customization and installation of 
TPII software products and the training by the Company of the financial 
institution's personnel in the use of the TPII software products take an 
average of six to twelve months, depending upon the timing of installation 
and final acceptance of the EFT System by the customer. Accordingly, the 
Company's revenues may fluctuate dramatically from one quarter to another, 
making quarterly comparisons extremely difficult and not necessarily 
indicative of any trend or pattern for the year as a whole. Additional 
factors effecting quarterly results include the timing of revenue recognition 
of advance payments of license fees, the timing of the hiring or loss of 
personnel, capital expenditures, operating expenses and other costs relating 
to the expansion of operations, general economic conditions and acceptance 
and use of EFT. See "Selected Financial Data" and "Management's Discussion 
and Analysis of Financial Condition and Results of Operations." 

ATTRACTION AND RETENTION OF KEY PERSONNEL 

   The Company's success depends on Frank Pascuito and Charles Caserta, its 
Chief Executive Officer and President, respectively, the loss of either of 
whom could have a material adverse effect on the Company's financial 
condition and results of operations. Upon completion of this offering, each 
of these officers will be insured under key person term life policies in the 
amount of $1,000,000 and will be parties to employment agreements with the 
Company. The Company believes that its future success also depends on its 
ability to attract and retain highly-skilled technical, managerial and 
marketing personnel, including, in particular, additional personnel in the 
areas of research and development, technical support and project management. 
Competition for personnel is intense. There can be no assurance that the 
Company will be successful in attracting and retaining the personnel it 
requires. See "Management." 

COMPETITION 

   
   The market for EFT software is highly competitive. The Company's TPII 
software products face strong competition from proprietary (legacy) and 
UNIX-based software. In the international EFT market, well established 
worldwide competition includes Transaction Systems Architects, Inc., Deluxe 
Data Systems, Inc., SDM International, Inc., S2 Systems, Inc., a subsidiary 
of Stratus Computer, Inc. ("Stratus"), SLM Software, Inc., Consolidated 
Software and Oasis Systems, whose products run on Tandem Computers 
Incorporated ("Tandem") or Stratus fault-tolerant computers with proprietary 
operating systems or on IBM host or industry standard computers with UNIX 
operating systems. In addition, third party companies provide services for 
processing EFT transactions, which eliminate the need for a financial 
institution to purchase the Company's software products. Most of the 
Company's current and potential competitors have significantly greater 
financial, marketing, technical and other competitive resources than the 
Company. See "Business -- Competition." 
    

TECHNOLOGICAL CHANGE 

   The market for software in general is characterized by rapid changes in 
computer and software technology and is highly competitive with respect to 
the need for timely product innovation and new product introductions. If, for 
example, the UNIX operating system were no longer a significant operating 
system, the Company would be adversely affected if it could not adapt its 
TPII software products to whatever operating system becomes dominant. The 
Company believes that its future success, of which there can be no assurance, 
depends upon its success in enhancing the performance of its current TPII 
software products, such as the ability to handle higher volumes of card 
transactions and the adaptation of its software products to smart card 
technology, and developing new software products that address the 
increasingly complex needs of customers. See "Business--Software Development 
and Future Products." 

DEPENDENCE ON PROPRIETARY TECHNOLOGY 

   The Company relies on a combination of trade secret and copyright laws, 
nondisclosure and other contractual and technical measures to protect its 
proprietary rights in its software products. There can be no assurance that 
these provisions will be adequate to protect its proprietary rights. In 
addition, the laws of certain foreign 

                                      9 
<PAGE>

countries do not protect intellectual property rights to the same extent as 
the laws of the United States. Although the Company believes that its 
intellectual property rights do not infringe upon the proprietary rights of 
third parties, there can be no assurance that third parties will not assert 
infringement claims against the Company. See "Business -- Proprietary 
Rights." 

BROAD DISCRETION IN USE OF PROCEEDS 

   Approximately 32% of the net proceeds of this offering will be applied to 
working capital. In addition, the application of the balance of the proceeds 
may differ considerably from the estimates set forth herein due to changes in 
the economic climate and/or the Company's planned business operations or 
unanticipated complications, delays and expenses. According, management of 
the Company will have broad discretion over the use of proceeds. 

LACK OF MARKET; ARBITRARY DETERMINATION OF OFFERING PRICE; POSSIBLE 
VOLATILITY OF STOCK PRICE 

   Prior to this offering, there has been no public market for the Preferred 
Stock or Warrants, and only a very limited trading market for the Common 
Stock. The Company intends to apply for listing of the Preferred Stock, 
Warrants and Common Stock on The Nasdaq SmallCap Market effective upon 
commencement of this offering. Nevertheless, there can be no assurance that 
an active market in any securities of the Company will develop or be 
sustained after this offering. In the absence of an active public trading 
market, an investor may be unable to liquidate his or her investment. The 
initial public offering prices and other terms of the Preferred Stock and 
Warrants were determined by negotiations between the Company and the 
Underwriter and are not necessarily related to the Company's assets, 
earnings, book value per share, its results of operations or any other 
generally accepted criteria of value and should not be construed as 
indicative of their value. See "Underwriting." 

   There has been volatility in the market price of securities of technology 
companies. Future announcements concerning the Company or its competitors, 
including variations in financial results, changes in general market 
conditions, governmental regulations or other developments may have a 
significant impact on the market price of each of the Company's securities 
and could cause the market price of each of the Company's securities to 
fluctuate significantly. In addition, broad market fluctuations and general 
economic or political conditions may adversely affect the market price of 
each of the Company's securities, regardless of the Company's actual 
performance. 

   
NONPAYMENT OF DIVIDENDS 

   No dividends will be paid on the Preferred Stock, except that holders of 
Preferred Stock will be entitled to receive dividends if dividends are 
declared with respect to the Common Stock and, in such event, ratably with 
the holders of the Common Stock. The Company has never declared or paid a 
cash dividend on its Common Stock and does not expect to pay cash dividends 
in the foreseeable future. See "Dividend Policy." 
    

SHARES ELIGIBLE FOR FUTURE SALE 

   
   Upon completion of this offering, the Company will have outstanding an 
aggregate of 1,200,000 shares of Preferred Stock and 1,062,409 shares of 
Common Stock. All of the shares of Preferred Stock and 585,318 shares of 
Common Stock will be freely tradable without restriction or further 
registration under the Securities Act. Of the remaining 477,091 shares of 
Common Stock outstanding, 386,936 shares are "restricted" shares that are 
owned by "affiliates" of the Company as such terms are defined under the 
Securities Act and 90,155 shares are "restricted" shares that are owned by 
nonaffiliates of the Company. Absent registration under the Securities Act, 
the sale of such shares of Common Stock is subject to Rule 144, as 
promulgated under the Securities Act. In general, under Rule 144, subject to 
the satisfaction of certain other conditions, a person, including an 
affiliate of the Company, who has beneficially owned restricted shares of 
Common Stock for at least two years is entitled to sell in brokerage 
transactions, within any three-month period, a number of shares that does not 
exceed the greater of 1% of the total number of outstanding shares of the 
same class, or if the Common Stock is quoted on The Nasdaq Stock Market or a 
national stock exchange, the average weekly trading volume during the four 
calendar weeks preceding the sale. No prediction can be made as to the 
effect, if any, that sales of shares of Common Stock or the availability of 
such shares for sale will have on the market prices of the Com- 
    

                                      10 
<PAGE>

   
pany's securities prevailing from time to time. The possibility that 
substantial amounts of Common Stock may be sold under Rule 144 into the 
public market may adversely affect prevailing market prices for the Preferred 
Stock and the Warrants and could impair the Company's ability to raise 
capital in the future through the sale of equity securities. See "Shares 
Eligible for Future Sale." 

UNDERWRITER'S LIMITED UNDERWRITING EXPERIENCE; PENDING INVESTIGATION 

   While certain of the officers of the Underwriter have significant 
experience in corporate financing and the underwriting of securities, the 
Underwriter has previously underwritten only three public offerings. 
Accordingly, there can be no assurance that the Underwriter's limited public 
offering experience will not affect the Company's offering of the Preferred 
Stock and Warrants and subsequent development of a trading market, if any, in 
such securities. In addition, the Underwriter is aware that the Commission is 
investigating certain of the Underwriter's trading practices and mark-ups in 
connection with the securities of an issuer whose 1995 public offering was 
underwritten by the Underwriter. There can be no assurance that this 
investigation will not adversely and materially affect this offering or 
subsequent trading in the Preferred Stock, Warrants and/or Common Stock of 
the Company. See "Underwriting." 
    

DILUTIVE EFFECT OF OPTIONS, WARRANTS AND CONVERTIBLE SECURITIES 

   
   Upon completion of this offering, the Company will sell to the Underwriter 
warrants to purchase up to 120,000 shares of Preferred Stock and up to 
170,000 warrants to purchase Preferred Stock. The Underwriter's Warrants will 
be exercisable at any time during the four-year period commencing one year 
from the date of this Prospectus. In addition, as of the date hereof, there 
were (i) options and warrants outstanding to purchase an aggregate of 508,392 
shares of Common Stock, with exercise prices ranging from $.66 to $5.00 per 
share and which will expire on various dates through 2007 and (ii) certain 
outstanding debt convertible into a maximum of 59,524 shares of Common Stock 
(subject to adjustment pursuant to anti-dilution provisions). If the 
Underwriter's Warrants and the outstanding options and warrants are exercised 
and the outstanding debt is converted, the percentage of capital stock then 
held by the existing stockholders will be reduced. Furthermore, the 
Underwriter's Warrants and the outstanding options and warrants can be 
expected to be exercised at a time when the Company would be able to obtain 
funds from the sale of Preferred Stock, Common Stock or other securities at a 
price higher than the exercise prices thereof. See "Description of 
Securities" and "Underwriting." 

DILUTION 

   The initial public offering price of the Preferred Stock is substantially 
higher than the net book value of the currently outstanding Common Stock. 
Therefore, purchasers of the Preferred Stock will experience immediate and 
substantial dilution in the net tangible book value of the capital stock of 
the Company in the amount of $3.30 per share (66%) (based on an assumed 
initial public offering price of $5.00 per share of Preferred Stock). See 
"Dilution." 

PORTION OF PROCEEDS TO REPAY DEBT 

   Approximately $582,000 (11%) of the net proceeds of this offering will be 
used to repay a portion of outstanding debt and interest of the Company. See 
"Use of Proceeds." 
    

THE NASDAQ SMALLCAP MARKET ELIGIBILITY AND MAINTENANCE REQUIREMENTS; POSSIBLE 
DELISTING OF SECURITIES FROM THE NASDAQ SMALLCAP MARKET; RISKS OF LOW-PRICED 
STOCKS 

   
   The Company intends to apply for listing of the Preferred Stock, Warrants 
and Common Stock on The Nasdaq SmallCap Market. The Commission has approved 
rules imposing criteria for listing of securities on The Nasdaq SmallCap 
Market, including standards for maintenance of such listing. For continued 
listing, a company, among other things, must have at least $2,000,000 in 
total assets and $1,000,000 in capital and surplus, and the listed security 
must have a minimum bid price of $1.00 per share. Recently, a proposal has 
been made to increase the continued listing criteria on The Nasdaq SmallCap 
Market. If implemented as proposed, stricter criteria for continued listing 
on The Nasdaq SmallCap Market would be imposed, including the implementation 
of a $2,000,000 net tangible assets test, higher public float and market 
value of public float criteria and the implementation of new corporate 
governance rules. No assurance can be given that such proposal will be 
adopted, or, if adopted, will be adopted in its current form. 
    

   In the event that the Company is unable to satisfy the maintenance 
requirements and its securities are subsequently delisted from The Nasdaq 
SmallCap Market, trading of the Preferred Stock, Warrants and Common 

                                      11 
<PAGE>

Stock would be conducted on the NASD's OTC Bulletin Board or in the "pink 
sheets." In the absence of the Preferred Stock or Common Stock being quoted 
on The Nasdaq SmallCap Market, or the Company having at least $2,000,000 in 
stockholders' equity, trading in the Preferred Stock, Warrants and Common 
Stock would be covered by Rule 15g-9 promulgated under the Securities 
Exchange Act of 1934, as amended (the "Exchange Act"), for non-Nasdaq and 
non-exchange listed securities. Under such rule, broker-dealers who recommend 
"penny stocks" to persons other than established customers and institutional 
accredited investors must make a special written suitability determination 
for the purchaser and receive the purchaser's written agreement to a 
transaction prior to sale. The Commission defines a "penny stock" to be any 
equity security that has a market price of less than $5.00 per share, subject 
to certain exceptions. Such exceptions include an equity security listed on 
The Nasdaq Stock Market, or an equity security issued by an issuer that has 
(i) net tangible assets of at least $2,000,000, if such issuer has been in 
continuous operation for three years, (ii) net tangible assets of at least 
$5,000,000, if such issuer has been in continuous operation for less than 
three years, or (iii) average revenue of at least $6,000,000 for the 
preceding three years. 

   If the Company's securities were to become subject to the regulations 
applicable to penny stocks, the market liquidity for the securities would be 
severely affected, limiting the ability of broker-dealers to sell the 
securities and the ability of purchasers in this offering to sell their 
securities in the secondary market. There is no assurance that trading in the 
Company's securities will not be subject to these or other regulations that 
would adversely affect the market for such securities. 

NEED FOR CURRENT PROSPECTUS; NON-REGISTRATION IN CERTAIN JURISDICTIONS OF 
SHARES UNDERLYING THE WARRANTS 

   The Warrants are being registered pursuant to a Registration Statement 
filed with the Commission under the Securities Act, of which this Prospectus 
is a part. The Warrants may be exercised and their underlying shares of 
Preferred Stock may be sold in any public market that may develop for the 
securities commencing two years after the date hereof or earlier upon the 
occurrence of certain events, but only during the period in which a current 
prospectus covering such shares is in effect. Accordingly, unless the 
Registration Statement is kept current by the Company and measures to qualify 
or keep qualified such securities in certain states are taken, investors 
holding the Warrants will not be able to exercise the Warrants or sell the 
underlying shares of Preferred Stock issuable upon exercise of the Warrants 
in the public market. The Company has agreed to use its reasonable best 
efforts to qualify and maintain a current registration statement covering 
such shares of Preferred Stock during the term of the Warrants. There can be 
no assurance, however, that the Company will be able to maintain a current 
registration statement. Furthermore, although the Warrants will not knowingly 
be sold to purchasers in jurisdictions in which they are not registered or 
otherwise qualified for sale, purchasers may buy Warrants in the aftermarket 
or may move to jurisdictions in which the shares of Preferred Stock issuable 
upon exercise of the Warrants are not so registered or qualified during the 
period that the Warrants are exercisable. In such event, the Company would be 
unable to issue shares to those persons desiring to exercise their Warrants 
unless and until the shares could be registered or qualified for sale in the 
jurisdiction in which such purchasers reside, or an exemption to such 
qualification exists or is granted in such jurisdiction. No assurance can be 
given as to the ability of the Company to effect any required registration or 
qualification of the Preferred Stock in any jurisdiction in which 
registration or qualification has not already been completed.Although the 
Company does not presently intend to do so, the Company reserves the right to 
call the Warrants for redemption whether or not a current prospectus is in 
effect or such underlying shares are not, or cannot be, registered in the 
applicable states. If the Company is unable to register or qualify the shares 
in a particular state and no exemption to such registration or qualification 
was available in such jurisdiction, in order to realize any economic benefit 
from the purchase of the Warrants, a holder might have to sell the Warrants 
rather than exercising them. See "Description of Securities -- Warrants." 

POTENTIAL ADVERSE EFFECT OF REDEMPTION OF WARRANTS 

   The Warrants offered hereby are redeemable, in whole or in part, at a 
price of $.10 per Warrant, commencing one year after the date of this 
Prospectus and prior to their expiration with the Underwriter's consent; 
provided that (i) prior notice of not less than 30 days is given to the 
warrantholders; (ii) the last sale price of the Preferred Stock on each of 
the 20 consecutive days of trading of the Preferred Stock ending on the third 
busi- 

                                      12 
<PAGE>

ness day prior to the date on which the Company gives notice of redemption 
has been at least $8.00 per share; and (iii) warrantholders shall have 
exercise rights until the close of the business day preceding the date fixed 
for redemption. Notice of redemption of the Warrants could force the holders 
to exercise the Warrants and pay the exercise price at a time when it may be 
disadvantageous for them to do so, or to sell the Warrants at the current 
market price when they might otherwise wish to hold them, or to accept the 
redemption price, which may be substantially less than the market value of 
the Warrants at the time of redemption. In addition, the issuance of 
additional shares of Preferred Stock upon exercise of the Warrants may have 
an adverse effect upon the prevailing market price of the Preferred Stock. 
See "Description of Securities -- Warrants." 

UNDERWRITER'S INFLUENCE ON THE MARKET 

   
   A significant number of shares of Preferred Stock and Warrants offered 
hereby may be sold to customers of the Underwriter. Such customers 
subsequently may engage in transactions for the sale or purchase of such 
securities through or with the Underwriter. Although it has no obligation to 
do so, the Underwriter intends to engage in market-making activities or 
solicited broker's activities with respect to the purchase or sale of 
Preferred Stock and Warrants in The Nasdaq SmallCap Market or other 
over-the-counter market where such securities will trade. However, no 
assurance can be given that the Underwriter will continue to participate as a 
market maker in the securities of the Company or that other broker/dealers 
will make a market in such securities. The Underwriter also has the right to 
act as the Company's exclusive agent in connection with any future 
solicitation of warrantholders to exercise their Warrants. Unless granted an 
exemption by the Commission from Rule 10b-6 under the Exchange Act, the 
Underwriter will be prohibited from engaging in any market-making activities 
or solicited brokerage activities with regard to the Company's securities 
during a period prior to the commencement of any such solicitation and ending 
on the later of the termination of such solicitation activity or the 
termination (by waiver or otherwise) of any right the Underwriter may have to 
receive a fee for the exercise of the Warrants following such solicitation. 
As a result, the Underwriter and soliciting broker/dealers may be unable to 
continue to make a market in the Company's securities during certain periods 
while the exercise of the Warrants is being solicited. Such a limitation, 
while in effect, could impair the liquidity and market price of the Company's 
securities. See "Underwriting." 
    

                               USE OF PROCEEDS 

   The net proceeds to the Company from the sale of the Preferred Stock and 
Warrants in this offering (assuming initial public offering prices of $5.00 
per share of Preferred Stock and $.10 per Warrant) are estimated to be 
approximately $5,053,000 ($5,858,185 if the over-allotment option is 
exercised in full), after deducting the estimated underwriting discounts and 
offering expenses payable by the Company. The Company intends to use the 
proceeds as follows: 

<TABLE>
<CAPTION>
                                                                                           Percentage of 
                                 Purpose                                      Amount        Net Proceeds 
                               -----------                                  -----------   --------------- 
<S>                                                                         <C>           <C>
Expand contract capabilities by increasing personnel and 
  computer-related equipment                                                $  900,000           18% 
Expand foreign marketing and licensing activities, including hiring of 
  personnel and increasing advertising and public relations                    750,000           15% 
Research and development for new and existing products                         600,000           12% 
Purchase and renovate new office space                                         600,000           12% 
Repayment of debt and interest(1)                                              582,000           11% 
Working capital (2)(3)                                                       1,621,000           32% 
                                                                            -----------   --------------- 
     TOTAL                                                                   5,053,000          100% 
                                                                            ===========   =============== 
</TABLE>

   
- ------ 
(1) Represents repayment of (i) approximately $47,000 of deferred principal 
    and interest payable to the North Greenbush Industrial Development Agency 
    (the "NG Loan"), (ii) approximately $19,000 of deferred interest payable 
    to the New York State Science and Technology Foundation (the "Technology 
    Loan") and (iii) $500,000 principal amount of notes (the "Notes") issued 
    in September 1996 (the "Bridge Financing") and approximately $16,000 of 
    accrued interest thereon payable to unrelated third parties. The NG Loan, 
    the principal amount of which is $220,000, was originally made in January 
    1989, bears interest at 7 1/2% per 
    

                                      13 
<PAGE>

   
    annum and is payable in monthly installments of approximately $3,800 
    between May 1996 and April 2002. The Technology Loan, the principal 
    amount of which is $250,000, was originally made in July 1989, bears 
    interest at 7 1/2 % and is payable in installments of $80,000, $80,000 
    and $90,000 in April 1998, April 1999 and April 2000, respectively. The 
    Notes bear interest at 12% per annum and are due on the earlier of (i) 
    the closing of this offering or (ii) March 24, 1998. The proceeds of the 
    Notes were used by the Company for the payment of indebtedness, including 
    deferred salaries, interest and commissions, and for working capital and 
    general corporate purposes. See "Certain Transactions." 

(2) Includes the payment of $20,000 to the Underwriter upon the consummation 
    of this offering for services as a financial consultant to be performed 
    over a period of two years commencing upon the consummation of this 
    offering. See "Underwriting." 

(3) If all or any portion of the over-allotment option is exercised, the net 
    proceeds therefrom will be used for working capital. 
    

   The foregoing represents the Company's estimate of the allocation of the 
net proceeds of this offering, based upon the current status of its 
operations and anticipated business plans. It is possible, however, that the 
application of funds will differ considerably from the estimates set forth 
herein due to changes in the economic climate and/or the Company's planned 
business operations or unanticipated complications, delays and expenses. Any 
reallocation of the net proceeds will be at the discretion of the Board of 
Directors of the Company. 

   Pending the foregoing uses, a portion of the net proceeds of this offering 
may be invested in certificates of deposit, United States government 
obligations, prime commercial paper, money market funds or similar short- 
term investments. 

   
   The Company believes that the proceeds of this offering, together with 
anticipated cash flow from operations, will be sufficient to finance the 
Company's working capital requirements for a period of at least 24 months 
following the completion of this offering. However, since a portion of the 
license fee for TPII software products is not paid until acceptance by the 
customer and, as a result, the Company is required to fund a portion of the 
costs of configuration and installation of such products from available 
capital, any substantial increase in the number of installations or delay in 
payment could create a need for additional financing. In such event, there 
can be no assurance that additional financing will be available on terms 
acceptable to the Company, or at all. The Underwriter's consent is required 
before the Company may complete certain types of financing. The obligation to 
obtain such consent may limit the Company's ability to complete such 
financing. See "Management's Discussion and Analysis of Financial Condition 
and Results of Operations" and "Underwriting." 
    

                                      14 
<PAGE>

                         PRICE RANGE OF COMMON STOCK 

   
   The Company's Common Stock is currently quoted on the OTC Bulletin Board 
under the symbol IFSE. The Common Stock is traded, if at all, on a sporadic 
basis; therefore, the prices quoted below are not necessarily indicative of 
market value. The following table, which is restated to reflect a 1-for-10 
reverse split of the Common Stock effectuated at the close of business on 
November 8, 1996, sets forth the range of the high and low bid quotations of 
the Common Stock on the OTC Bulletin Board for the periods indicated. 
    

<TABLE>
<CAPTION>
 Quarter Ended                           High*                          Low* 
 ----------------                       -------                        ------- 
<S>                                     <C>                            <C>
July 31, 1994                            $2.00                         $1.25 
October 31, 1994                         $1.50                         $ .63 
January 31, 1995                         $1.50                         $ .63 
April 30, 1995                           $1.50                         $ .63 
July 31, 1995                            $1.50                         $1.50 
October 31, 1995                         $1.50                         $1.50 
January 31, 1996                         $1.88                         $1.50 
April 30, 1996                           $2.50                         $1.88 
July 31, 1996                            $2.50                         $2.50 
October 31, 1996                         $4.38                         $2.50 
</TABLE>

- ------ 
* The source of such quotations is the National Quotation Bureau, Inc. 

   
   On January 13, 1997, the closing bid price of the Common Stock was $3.50. 
The above quotations reflect inter-dealer prices, without mark-up, mark-down 
or commission, and may not represent actual transactions. 

   As of December 31, 1996, there were approximately 280 recordholders of the 
Common Stock. 
    

                               DIVIDEND POLICY 

   
   No dividends will be paid on the Preferred Stock, except that holders of 
Preferred Stock will be entitled to receive dividends if dividends are 
declared with respect to the Common Stock and, in such event, ratably with 
the holders of the Common Stock. The Company plans to retain any future 
earnings for use in its business and, accordingly, the Company does not 
anticipate paying dividends on its Common Stock and Preferred Stock in the 
foreseeable future. The payment of any dividends on the Common Stock and 
Preferred Stock will be at the discretion of the Company's Board of Directors 
and will be dependent upon the Company's results of operations, financial 
condition, capital requirements, contractual restrictions and other factors 
deemed relevant by the Board of Directors. 
    

                                      15 
<PAGE>

                                CAPITALIZATION 

   
   The following table sets forth the capitalization of the Company (i) at 
October 31, 1996 and (ii) as adjusted to reflect the sale of the 1,200,000 
shares of Preferred Stock and 1,700,000 Warrants offered hereby, and the 
application of the estimated net proceeds therefrom (assuming initial public 
offering prices of $5.00 per share of Preferred Stock and $.10 per Warrant). 
See "Use of Proceeds." This section should be read in conjunction with the 
Company's Consolidated Financial Statements and related notes appearing 
elsewhere in this Prospectus. 
    

<TABLE>
<CAPTION>
                                                                               October 31, 1996 
                                                                        ------------------------------ 
                                                                            Actual        As Adjusted 
                                                                         -------------   ------------- 
<S>                                                                     <C>              <C>
Total short-term debt, including current maturities of long term debt     $   548,886     $    29,025 
                                                                         -------------   ------------- 
Total long-term debt, less current maturities  .......................        436,394       436,394(1) 
                                                                         -------------   ------------- 
Shareholders' equity (deficit): 
Preferred Stock, $.001 par value; 25,000,000 shares authorized; none 
  issued or outstanding; 1,200,000 shares of Series A Convertible 
  Preferred Stock issued and outstanding as adjusted(2) ..............    $         0     $     1,200 
Common Stock, $.001 par value; 25,000,000 shares authorized; 
  1,059,730 shares issued and outstanding; 1,059,730 shares issued and 
  outstanding as adjusted(3)(4) ......................................          1,060           1,060 
Additional paid-in capital  ..........................................      2,219,598       7,271,398 
Accumulated deficit  .................................................     (2,854,345)     (2,854,345) 
                                                                         -------------   ------------- 
Total shareholders' equity (deficit)  ................................    $  (633,687)    $ 4,419,313 
                                                                         =============   ============= 

</TABLE>

   
- ------ 
(1) Exclusive of long-term debt expected to be incurred upon the financing of 
    the purchase of the Company's new facility. There can be no assurance 
    that financing will be available on terms acceptable to the Company, or 
    at all. See "Business -- Properties." 

(2) Does not include (i) 1,700,000 shares of Preferred Stock issuable upon 
    exercise of the Warrants, (ii) 120,000 shares of Preferred Stock issuable 
    upon exercise of the Underwriter's Warrants and (iii) 170,000 shares of 
    Preferred Stock issuable upon exercise of the warrants that are issuable 
    upon exercise of the Underwriter's Warrants. 

(3) Does not include (i) 3,625,000 shares of Common Stock issuable upon 
    conversion of the Preferred Stock, including the Preferred Stock issuable 
    upon exercise of the Warrants, the Underwriter's over-allotment option 
    and the Underwriter's Warrants, (ii) 100,000 shares of Common Stock 
    issuable upon exercise of the warrants sold in the Bridge Financing, 
    (iii) 408,392 shares of Common Stock issuable upon exercise of 
    outstanding stock options and (iv) a maximum of 59,524 shares of Common 
    Stock issuable upon conversion of certain outstanding debt (subject to 
    adjustment pursuant to anti-dilution provisions). 

(4) On January 10, 1997, the authorized Common Stock was increased to 
    50,000,000 shares. 

                                      16 
    
<PAGE>

   
                                   DILUTION 

   At October 31, 1996, the Company had a net tangible book value (deficit) 
of $(1,128,658), or $(1.07) per share of outstanding capital stock. Net 
tangible book value per share represents the Company's total tangible assets 
less total liabilities, divided by the number of shares of capital stock 
outstanding. After giving effect to receipt of the estimated net proceeds 
from the sale of the 1,200,000 shares of Preferred Stock at an assumed 
offering price of $5.00 per share (after deducting the estimated offering 
expenses), the pro forma net tangible book value of the Company would have 
been approximately $3,833,363, or approximately $1.70 per share of 
outstanding capital stock at October 31, 1996. This represents an immediate 
dilution of $3.30 per share, or 66%, to purchasers of Perferred Stock in this 
offering. The following table illustrates the per share dilution to be 
incurred by the public investors in this offering: 
    

<TABLE>
<CAPTION>
<S>                                                                <C>        <C>
 Assumed initial offering price per share  .....................               $5.00 
   Net tangible book value (deficit) per share at October 31, 
     1996  ....................................................    $(1.07) 
   Increase per share attributable to shares offered hereby ...      2.77 

Pro forma net tangible book value per share after this 
   offering ...................................................                 1.70 
                                                                              ------- 
Dilution of net tangible book value per share to new investors                 $3.30 
                                                                              ======= 
</TABLE>

                                      17 
<PAGE>

                           SELECTED FINANCIAL DATA 

   
   The selected consolidated financial data as of April 30, 1996 and for the 
fiscal years ended April 30, 1996 and 1995 set forth below have been derived 
from the audited consolidated financial statements included herein. Selected 
consolidated financial data as of April 30, 1995 set forth below have been 
derived from other audited consolidated financial statements. The selected 
historical financial data for the six months ended October 31, 1996 and 1995 
and as of October 31, 1996 set forth below have been derived from the 
Company's unaudited consolidated financial statements included elsewhere 
herein and, in the opinion of management, include all adjustments, consisting 
solely of normal recurring adjustments, necessary for a fair presentation. 
The results of operations for the six months ended October 31, 1996 are not 
necessarily indicative of the Company's results of operations to be expected 
for the full year. This financial information should be read in conjunction 
with "Management's Discussion and Analysis of Financial Condition and Results 
of Operations" and the Consolidated Financial Statements and notes thereto 
appearing elsewhere herein. 
    

                     SELECTED CONSOLIDATED FINANCIAL DATA 
                   (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 

STATEMENT OF OPERATIONS DATA: 

<TABLE>
<CAPTION>
                                                                               Six Months Ended 
                                                      Year Ended April 30,       October 31, 
                                                      --------------------   -------------------- 
                                                                                 (unaudited) 
                                                         1996       1995       1996       1995 
                                                       --------   --------    --------   -------- 
<S>                                                   <C>         <C>         <C>        <C>
Total revenues  ....................................    $2,441     $2,041     $1,587      $ 695 
Cost of revenues and services  .....................       505        346        388        163 
Operating expenses  ................................     1,934      1,857      1,021        922 
Income (loss) from operations  .....................         2       (162)       178       (390) 
Other income (expense)  ............................       (50)       (44)       (26)       (24) 
Litigation settlement costs  .......................        --         --       (100)        -- 
Income (loss) before income taxes and extraordinary 
  item .............................................       (48)      (206)        52       (414) 
Income (loss) before extraordinary item  ...........       (48)      (206)        52       (414) 
Extraordinary item - gain on debt restructuring and 
  extinguishments ..................................        --        378         --         -- 
Net income (loss)  .................................       (48)       172         52       (414) 
Net income (loss) per common share  ................    $ (.05)    $  .18     $  .04      $(.41) 
Weighted average shares outstanding  ...............     1,002        953      1,043        998 

</TABLE>

BALANCE SHEET DATA: 

<TABLE>
<CAPTION>
                                             April 30, 
                                          ------------------ 
                                                                October 31, 
                                           1996      1995           1996 
                                          -------   -------    --------------- 
                                                                (unaudited) 
<S>                                       <C>       <C>        <C>
Working capital (deficit)  ...........     (798)      (700)         (874) 
Total assets  ........................    1,307      1,222         2,070 
Total long-term debt  ................      452        635           436 
Total stockholders' equity (deficit)       (728)      (832)         (634) 

</TABLE>

                                      18 
<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS 
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 

INTRODUCTION 

   The Company is engaged in the business of developing, marketing, and 
supporting software for the EFT market. Substantially all of the Company's 
revenues have resulted from the licensing of its family of TPII software 
products. The preparation of functional specifications, customization and 
installation of TPII software products and the training by the Company of the 
financial institution's personnel in the use of the TPII software products 
take an average of six to twelve months, depending upon the timing of 
installation and final acceptance of the EFT System by the customer. The 
customer pays 30% to 50% of the licensing fees upon execution of the 
licensing agreement and also makes progress payments prior to acceptance. The 
Company recognizes revenue under the percentage of completion method for 
software installation contracts. The percentage of completion method is 
measured by estimates of the progress towards completion as determined by 
costs incurred. The Company also derives recurrent revenues from furnishing 
certain maintenance services to its customers for the TPII software and may 
also receive additional revenues for additional training of customer 
personnel and consulting services (collectively "service revenues"). With 
respect to revenues for maintenance services, the Company generally receives 
annual payments at the beginning of the contract year. Such payments are 
reflected as deferred revenues and are recognized ratably during such year. 

   The Company entered into an agreement with Visa in July 1996 for the 
licensing and installation of its TPII smart card software in connection with 
the operation of up to seven pilot programs. The license for each pilot 
program is for a term of 24 months commencing on the date such pilot program 
goes on-line. As of the date hereof, Visa has selected financial institutions 
in various countries to conduct five of the pilot programs. Revenues from the 
licensing of the TPII smart card software will be recognized in the same 
manner as revenues from the licensing of the other TPII software products. 

   
   Occasionally, the Company resells hardware to its customers in conjunction 
with its TPII software installation contracts. Since such sales are isolated 
and random the Company is unable to predict the amount of any future hardware 
revenues. Revenues from these occasional hardware sales are recognized when 
invoiced to the customer. 

RESULTS OF OPERATIONS 

 SIX MONTHS ENDED OCTOBER 31, 1996 COMPARED WITH SIX MONTHS ENDED OCTOBER 31, 
1995 

   Total revenues of $1,586,985 for the six months ended October 31, 1996 
represent an increase of $892,260, or 128.4%, over total revenues of $694,725 
for the six months ended October 31, 1995. This increase in total revenues 
resulted primarily from a substantial increase in licensing of TPII software 
products. Revenues from the licensing and installation of TPII software 
products were $1,076,761 for the six months ended October 31, 1996, as 
compared to $445,614 for the six months ended October 31, 1995. Service 
revenues for the six months ended October 31, 1996 increased by $122,932, or 
60.2%, over service revenues for the six months ended October 31, 1995. As of 
October 31, 1996, the Company had approximately $177,565 of deferred 
maintenance service revenues. Service revenue growth is expected to continue 
as long as the number of licenses for TPII software products increases and 
the customers continue to utilize such software products. 

   Revenues from licensing of TPII software products in countries outside the 
United States accounted for 49.5% of total revenues for the six months ended 
October 31, 1996 as compared to 81.6% for the six months ended October 31, 
1995. The decline as a percentage of total revenues resulted primarily from 
an increase in domestic software revenues. Such domestic software revenues 
increased by approximately $543,000, primarily as a result of revenues 
recognized from the smart card pilot programs. The Company nevertheless 
expects total revenues from foreign countries to continue to be a significant 
portion of its revenues in the future. 

   Gross profit, as expressed as a percentage of total revenues, decreased to 
75.6% for the six months ended October 31, 1996, as compared to 76.5% for the 
six months ended October 31, 1995. This slight decrease is 

                                      19 
    
<PAGE>
   
associated with the increase in hardware revenues. Hardware revenues 
typically have a lower gross margin than the Company's software products. 
Hardware revenues were $127,884 for the six months ended October 31, 1996 as 
compared to $35,248 for the six months ended October 31, 1995. 

   Operating expenses of $1,020,823 for the six months ended October 31, 1996 
represent an increase of $99,213, or 10.8%, from operating expenses of 
$921,610 for the six months ended October 31, 1995. This increase in 
operating expenses resulted primarily from an increase in personnel. The 
Company expects that operating expenses will increase following completion of 
this offering as a result of the planned addition of new personnel in 
anticipation of new business relating to the licensing of TPII software 
products, including the TPII smart card software. 

   Capitalized software costs for the six months ended October 31, 1996 were 
$153,983, as compared to $78,480 for the six months ended October 31, 1995. 
This increase in capitalized software costs resulted primarily from costs 
incurred with respect to the TPII smart card software technology. Such 
capitalized costs are being amortized on a straight line basis over the 
estimated five year marketing lives of the software. 

   Net income was $52,051 for the six months ended October 31, 1996, as 
compared to a net loss of $414,325 for the six months ended October 31, 1995, 
primarily as a result of substantially increased licensing of TPII software 
products and increased service revenues. 
    
 FISCAL YEAR ENDED APRIL 30, 1996 COMPARED TO FISCAL YEAR ENDED APRIL 30, 
1995 
   
   Total revenues of $2,440,783 for the fiscal year ended April 30, 1996 
represent an increase of $399,526, or 19.6%, over total revenues of 
$2,041,257 for the fiscal year ended April 30, 1995. This increase in total 
revenues resulted primarily from increased licensing of TPII software 
products. Revenues from the licensing and installation of TPII software 
products were $1,955,657 for the fiscal year ended April 30, 1996, as 
compared to $1,638,004 for the fiscal year ended April 30, 1995, representing 
an increase of $317,653, or 19.4%. 
    
   Revenues from licensing of software in countries outside the United States 
accounted for 82% of total revenues for the fiscal year ended April 30, 1996 
as compared to 91% for the fiscal year ended April 30, 1995 primarily because 
of an increase in software revenues resulting from licensing agreements with 
Standard Federal Bank and Lockheed Federal Credit Union, each a United States 
financial institution. However, the Company expects total revenues from 
foreign countries to continue to be a significant portion of its revenues in 
the future. 

   Service revenues were $412,743 for the fiscal year ended April 30, 1996, 
as compared to $280,080 for the fiscal year ended April 30, 1995, 
representing an increase of $132,663. The increased service revenues in 
fiscal 1996 reflects an increase in customers utilizing licensed TPII 
software products. As of April 30, 1996, the Company had $217,876 in deferred 
maintenance service revenues. 

   Operating expenses of $1,933,652 for the fiscal year ended April 30, 1996 
represent an increase of $77,023, or 4.1%, over operating expenses of 
$1,856,629 for the fiscal year ended April 30, 1995. This increase resulted 
primarily from an increase in technical personnel hired in anticipation of 
projected licenses of TPII software products for the fiscal year ended April 
30, 1996 (although the actual number of licenses for the year ended April 30, 
1996 ultimately proved to be lower than projected). Upon completion of this 
offering, the Company intends to increase its technical and marketing 
personnel. 

   The Company incurred a net loss of $48,380 for the fiscal year ended April 
30, 1996 as compared to net income of $172,215 for the fiscal year ended 
April 30, 1995. Net income resulted from an extraordinary gain recognized in 
connection with debt restructuring and extinguishments (i.e., debt 
forgiveness). Without giving effect to the extraordinary gain, the Company 
incurred an operating loss of $205,472 for the fiscal year ended April 30, 
1995. 
   
   The Company had net operating loss carryforwards of approximately 
$2,200,000 as of April 30, 1996. As a result of this offering, the use of 
such net operating loss carryforwards as an offset against future taxable 
income in any particular year will be significantly limited. 
    
LIQUIDITY AND CAPITAL RESOURCES 

   The Company's primary source of funds has been operating revenue. Although 
total revenues increased for the fiscal year ended April 30, 1996 by 
approximately 19.6%, the Company's working capital deficit increased 

                                      20 
<PAGE>

   
to $798,225 as of April 30, 1996 from $700,196 as of April 30, 1995. As a 
result, the Company was not able to meet scheduled principal and interest 
payments on its outstanding debt during fiscal 1996 nor pay its trade 
creditors on a current basis. Although software and service revenues 
increased for the six months ended October 31, 1996, the Company's net 
working capital deficit as of October 31, 1996 increased to $874,445, 
primarily as a result of the funding of noncurrent assets such as capitalized 
software costs, the purchase of equipment and deferred offering costs. The 
Company obtained approximately $500,000 from the Bridge Financing in 
September 1996. The Company believes that anticipated revenues from 
operations for the fiscal year ending April 30, 1997, as well as proceeds 
from the Bridge Financing, will be sufficient to meet current debt service 
requirements and operating costs of the Company through April 30, 1997. 
Nevertheless, the Company requires additional working capital in order to 
implement its plans to solicit and perform new business. The Company also 
believes an improved working capital position also is necessary to attract 
potential customers who are reluctant to do business with firms they perceive 
to be undercapitalized. 
    

   The Company believes that the proceeds of this offering, together with 
anticipated cash flow from operations, will be sufficient to finance the 
Company's working capital requirements for a period of at least 24 months 
following the completion of this offering. However, since a portion of the 
license fee for TPII software products is not paid until acceptance by the 
customer and, as a result, the Company is required to fund a portion of the 
costs of configuration and installation of such products from available 
capital, any substantial increase in the number of installations or delay in 
payment could create a need for additional financing. In such event, there 
can be no assurance that additional financing will be available on terms 
acceptable to the Company, or at all. The Underwriter's consent is required 
before the Company may complete certain types of financing. The obligation to 
obtain such consent may limit the Company's ability to complete such 
financing. 

   A portion of the net proceeds will be used to satisfy past due amounts 
under the NG Loan and the Technology Loan and also to repay the Notes. 

QUARTER TO QUARTER SALES AND EARNING VOLATILITY 

   Quarterly revenues and operating results have fluctuated and will 
fluctuate as a result of a variety of factors. The Company can experience 
long delays (i.e., between three to twelve months) before a customer executes 
a software licensing agreement. These delays are primarily due to extended 
periods of software evaluation, contract review and the selection of the 
computer system. In addition following execution of the agreement, the 
preparation of functional specifications, customization and installation of 
software products and the training by the Company of the financial 
institution's personnel in the use of the TPII software products take an 
average of six to twelve months, depending upon the timing of installation 
and final acceptance of the EFT System by the customer. Accordingly, the 
Company's revenues may fluctuate dramatically from one quarter to another, 
making quarterly comparisons extremely difficult and not necessarily 
indicative of any trend or pattern for the year as a whole. Additional 
factors effecting quarterly results include the timing of revenue recognition 
of advance payments of license fees, the timing of the hiring or loss of 
personnel, capital expenditures, operating expenses and other costs relating 
to the expansion of operations, general economic conditions and acceptance 
and use of EFT. 

INFLATION 

   The Company has not experienced any meaningful impact on its sales or 
costs as the result of inflation. 

                                      21 
<PAGE>

                                   BUSINESS 

INTRODUCTION 

   The Company is engaged in the business of developing, marketing and 
supporting software products for the EFT market. The Company's family of 
products, marketed under the name TechNique Plus II ("TPII"), serves as a 
UNIX-based manager for EFT Systems. TPII software products are designed to 
operate with computers utilizing the UNIX operating system, are written in C 
programming language and incorporate Oracle relational database technology 
and object oriented design concepts. As a result, TPII software products are 
compatible with a significant portion of the industry standard computer 
platforms. 

   An EFT System of a bank or other financial institution processes 
transactions involving credit cards and debit cards (e.g., ATM cards). An EFT 
System generally consists of one or more of the following in various 
configurations: automatic teller machines ("ATMs"), point of sale ("POS") 
terminals, a host computer of the financial institution and regional, 
national and international Networks, such as CIRRUS, NYCE, MAC or PLUS. TPII 
software products primarily route and authorize the processing of 
transactions through an EFT System. TPII software is offered in separate 
modules which perform different functions, including (i) interfacing with 
ATMs, POS terminals, a financial institution's host computer and Network 
computers, (ii) updating credit and debit card information, (iii) providing 
stand-in authorization for transactions when the financial institution's host 
computer is not operating, (iv) computing fees for transactions processed and 
(v) generating reports. The TPII software products are installed generally at 
the financial institution's main processing facility. 

   
   The Company's primary business objective is to become a leading world-wide 
supplier of UNIX-based managers for EFT Systems. To date, the Company's TPII 
software products have been primarily installed in EFT Systems of banks and 
other financial institutions located in emerging countries and former Eastern 
Bloc nations. As of December 31, 1996, fourteen financial institutions and 
two Networks were utilizing TPII software products. Certain of such financial 
institutions serve up to 200 ATMs and 1,000 POS terminals and the two 
Networks serve 22 and 5 financial institutions, respectively. In addition, 
agreements have been executed for the installation of TPII software products 
in EFT Systems of four additional financial institutions (which excludes the 
agreements relating to the smart card pilot programs referred to below under 
"Visa Contract"). 
    

EFT SYSTEMS 

   Typically, the completion of a debit card or credit card transaction or 
the "loading" of value to a smart card involves several steps through an EFT 
System. First, the bank customer or a retailer inserts the customer's debit, 
credit or smart card issued by the bank into an ATM, POS terminal or smart 
card "load" device thereby requiring authorization of a transaction. The 
request is routed to a Network or bank computer for authorization; the 
authorization message is then returned to the terminal at which the 
transaction was originated and the transaction then is completed. The whole 
process is generally accomplished within thirty seconds or less. Most EFT 
Systems operate twenty-four hours a day, seven days a week. 

   The routing and authorization of EFT transactions is a complex activity 
due to the large number of locations and variety of devices through which 
transactions can be generated, the large number of card issuers in the 
market, the high transaction volumes, the geographic dispersion of the 
Networks, the differing types of authorization and the varied reporting 
requirements. In addition, there are many variations to an EFT System. For 
example, ATMs, POS terminals or smart card "load devices" may be connected to 
one or several Network computers, in which case transaction authorization can 
be processed by the Network computer, with authorization and record 
information transmitted to the bank computer, if appropriate. Many smaller 
banks utilize processing firms for all or portion of their transactions or 
several banks establish a joint venture to process credit and debit card 
transactions. 

THE EFT MARKET 

   The EFT market has expanded considerably both domestically and 
internationally. In the United States, growth has occurred in all sectors of 
the market, including ATMs and POS terminals. For example, as of September 
1995, there were approximately 122,700 ATMs and 554,300 POS terminals in the 
United States, an increase of 12.5% and 47.6%, respectively, from 1994 (Bank 
Network News - EFT Network Data Book - 1995 

                                      22 
<PAGE>

Edition). These ATMs and POS terminals generated in the aggregate 
approximately 807.4 million and 64.6 million transactions per month, 
respectively, an increase of 14.6% and 36.9%, respectively, from 1994 (Bank 
Network News - EFT Network Data Book - 1995 Edition). The number of ATMs in 
the United States is expected to increase to 135,000 by 1997 (Investors 
Business Daily - 11/21/94). As of March 1995, there were approximately 
540,000 ATMs deployed in the world, with predictions of growth to 
approximately 937,000 by the year 2000 (Nilson Report - 9/94 and 3/95). 
(Statistics and industry estimates referred to herein are based on certain 
industry publications, which the Company relies upon in the conduct of its 
business and believes are generally relied upon by other industry 
participants.) 

   The Company expects increases in EFT transaction volume and more complex 
payment systems to be major trends in the marketplace for the reasons set 
forth below: 

   o  Many regions of the world are experiencing economic growth. Moreover, 
      credit and debit cards are being issued to a larger portion of the 
      world's population, and consumer use of credit and debit technology is 
      increasing. Demographic factors should also contribute to EFT 
      transaction growth, as generations of consumers who are comfortable 
      with technology gain more wealth. 

   o  Lower technology costs make it more economical to deploy devices and 
      create the networks necessary to implement EFT systems and move away 
      from traditional paper-based payment processes. 

   o  Banks find EFT-based transactions attractive, since they provide 
      fee-based revenue. 

   o  The current trend in bank consolidation may result in nationwide 
      expansion in ATMs and POS terminals. 

   o  Alternatives to banking at the financial institution's facilities (such 
      as the Internet) will offer consumers additional ways to access banking 
      services. This is consistent with efforts of financial institutions to 
      move transactions from branches to less expensive, unmanned electronic 
      points of delivery such as "self- service banking" and home banking. 
      The emergence of smart cards with the stored value option should 
      further increase the volume of electronic transactions, including the 
      ability to load value to a card from devices in the home, as well as at 
      the existing ATM base. 

TPII SOFTWARE PRODUCTS 

   The TPII software products are EFT Systems managers. Such software 
products primarily route and authorize the processing of transactions through 
an EFT System, thereby enabling the system to interface or communicate with 
other systems and Networks, as well as to provide other functions. TPII 
software products generally can be configured to (i) act as a front-end to a 
financial institution's host computer, (ii) perform as a switch connected to 
multiple financial institutions' host computers and Networks or (iii) act as 
an authorization-only system for financial transactions. 

   As a front-end system, TPII software products can intercept transactions 
from a financial institution's terminals and route them to the institution's 
host computer. This eliminates expenses that may be charged by data 
processing facilities or Networks. For example, a transaction initiated by 
the customer of a bank at the bank's ATM that is part of a larger shared 
Network generally is initially routed to the Network computer for a fee 
before it is routed back to the bank's host computer, typically referred to 
as an "on-us" transaction. The TPII front-end system, however, routes the 
"on-us" transaction directly to the bank for processing, thereby bypassing 
the Network. 

   As a switch, TPII software products can route transactions between 
multiple host computers of financial institutions for authorization of 
transactions. In this environment, ATMs, POS terminals and smart card 
"loading" devices of a financial institution are on-line to such financial 
institution's host computer and such host computer is on-line to the TPII 
software. If such financial institution's host computer receives a 
transaction request from an ATM, POS terminal or smart card "loading" device 
requiring an authorization from another financial institution which is part 
of the Network, then the request is transmitted to the Network utilizing the 
TPII software and the TPII software routes the request to the proper 
financial institution's host computer for authorization, which then transmits 
the authorization response back to the Network. The TPII software then routes 
the authorization response to the original requesting financial institution. 
In this environment, the TPII software can also authorize the transaction if 
the financial institution from which the authorization is requested is 
unavailable. 

                                      23 
<PAGE>

   As an authorization-only system, TPII software products receive 
authorization requests from various Network switches. In this environment, 
the TPII software is installed at the financial institution's main office, 
but is not interfaced with any of that institution's ATMs, POS terminals or 
smart card load devices. Instead, it will authorize transactions initiated by 
credit cards, debit cards and/or smart cards issued by the institution to its 
customers when the customers utilize terminals and devices owned by other 
financial institutions. In this environment, a transaction request 
originating at another financial institution's ATM, POS terminal or smart 
card "loading" device by the customer is transmitted to a Network switch and 
the Network switch will route the transaction request to the TPII software. 
The TPII software will then route the transaction to the host computer of the 
financial institution utilizing TPII software for authorization. If such 
institution's host computer is unavailable, then the TPII software will 
authorize the transaction and transmit the response back to the proper 
Network switch. 

   TPII software products can be installed at the financial institution's 
main office, a branch or at a data processing facility. TPII software 
products permit 7-day, 24-hour remote banking by storing customer balance 
files and communicating with the customers' in-house computer(s) or data 
center(s) on a continuous (real time) or batch (delayed) basis with no 
changes required to existing host application software. TPII software 
products are capable of sending or receiving messages from ATMs, POS 
terminals, Networks and host computers. Such products may authorize 
transactions without the necessity of interfacing with the host computer and 
can periodically input the transactions into the host computer. 

   TPII software is offered in separate modules depending on the function to 
be performed. Set forth below is a description of the various modules of the 
Company's TPII software products: 

       ATM, POS, Smart Card, Host and Network Interfaces each provide for the 
   access to and messages between a financial institution's or Network's EFT 
   System and its associated terminals or processors. 
       The Card Management Module is responsible for the updating and 
   maintenance of a relational database of card data. This module is capable 
   of maintaining the day-to-day history of the existing card base and is 
   used for both the ordering of new cards and the replacement of lost or 
   damaged cards. 
       The Stand-In Module is primarily responsible for the logging of 
   transactions whenever communications are not available between the EFT 
   System and the host due to host failure or scheduled host downtime. When 
   communications are re-established the Stand-In Module is responsible for 
   sending stand-in transactions to the host. 
       The Settlement Processing Module is responsible for the computation of 
   fees for both the Network and issuer transactions processed on an EFT 
   System and is responsible for generating operational and statistical 
   reports in industry standard format for terminals, banks and Networks. 
       The Authorization Module provides, if required, transaction 
   authorization using various methods. 
       The Software Distribution Module is responsible for the down-line 
   loading of various configuration parameters to the ATM terminals and to 
   encrypt and decrypt the personal identical number (PIN) portion of the 
   message to or from ATMs. The encryption and decryption processes are 
   performed by the connected Host Security Module on behalf of the Software 
   Distribution program. 
       The Device Monitor Module is responsible for supplying the ATM Network 
   manager with real time device status monitoring. When the device monitor 
   module determines the need to inform the manager of a particular 
   condition, it will send a warning message indicating the problem. 

VISA CONTRACT 

   The Company has adapted its TPII software to manage EFT Systems that 
process transactions involving the "loading" of value on smart cards. A smart 
card is a plastic card with an electronic chip that acts as a small computer. 
These cards can include a stored value feature, which enables the holder to 
"load" a fixed amount of purchasing power or cash equivalent on the card as 
authorized. As a result, the holder can purchase items or services without 
the necessity of carrying cash or entering into a credit card transaction. 
For example, the smart card may be activated with $60.00 of purchasing power 
by inserting the smart card into a smart card terminal 

                                      24 
<PAGE>

(i.e. a "loading" device). The card holder then uses the smart card to 
purchase a product for $12.00, which reduces the purchasing power of the 
smart card to $48.00. The stored value on the card can be changed at a 
participating ATM or other terminal. This system is not yet operational. 

   
   The Company has developed software for Visa to manage an EFT System that 
facilitates the "loading" of value on a smart card through a bank's 
terminals. As a result of a successful test of the Company's TPII smart card 
software, Visa entered into an agreement with the Company in July 1996 for 
the licensing and installation of this software in connection with the 
operation of up to seven pilot programs for the purposes of evaluating the 
TPII smart card software and other aspects of the smart card system. The 
license for each pilot program is for a term of 24 months commencing on the 
date such pilot program goes on-line. As of the date hereof, Visa has 
selected financial institutions in the following countries to conduct five of 
the pilot programs: the United States, the United Kingdom, Japan, Germany and 
Italy. The Company anticipates that the first pilot program that will become 
operational will be in Germany during the first calendar quarter of 1997. 
Although there can be no assurance, the Company anticipates that revenues 
from its agreement with Visa will have a material impact on its financial 
position during the next 9-12 months. 

   The Company is also negotiating with a financial institution to implement 
the "loading" of value to a smart card adapted for use with that 
institution's MasterCard. There can be no assurance that the Company and the 
financial institution will enter into an agreement. 
    

LICENSING, SERVICES AND TRAINING 

   The Company licenses its TPII software products pursuant to a 
non-exclusive perpetual licensing agreement. Under these agreements, the 
customer receives the non-exclusive right to use one copy of the software 
product on designated equipment upon payment of a one-time fixed license fee. 
Each financial institution's computer requires a separate copy of the TPII 
software and the license portion of the fee is incurred for each copy of the 
software installed. The Company trains the financial institution's personnel 
in the use of the TPII software products. 

   The TPII software products generally involve customization to enable the 
TPII software to interface with a customer's unique host software and to meet 
the particular needs of the customer. For example, each financial institution 
has different software operating various ATMs or POS terminals, as well as 
bank and Network computers, requiring modification to configure with the 
Company's TPII software. Licenses for TPII software products generally begin 
at $180,000 and average approximately $300,000 per contract depending upon 
the modules selected. Payments under these types of contracts are usually 
made in several stages commencing with signing of the license agreement and 
then as certain milestones are completed. Following this offering, the 
Company intends to evaluate the feasibility of licensing its TPII software 
products on a fee-per-transaction basis in addition to, or in lieu of, the 
one-time licensing fee structure currently used. 

   The Company generally warrants its TPII software products for 90 days. 
Subsequent to the warranty period of the TPII software products, the Company 
provides maintenance services with respect to such software products. Yearly 
service fees are typically 15% of the original TPII software license fee, 
subject to annual increases based on changes in the Consumer Price Index in 
the United States, and are generally payable annually in advance. During the 
period of service, the customer receives copies of the Company's latest 
standard releases and any software enhancements that the Company considers to 
be logical improvements. These releases and enhancements are accompanied by 
documentation updates as necessary. 

   For an additional fee, the Company will provide additional training of 
customer personnel. Depending on the complexity of the customer's system, 
training can take from 2-4 days to 2-4 weeks. 

   
   Oracle Corporation has granted the Company, in exchange for the payment of 
royalties to Oracle, a nonexclusive license to use, and grant sublicenses 
with the respect to, the Oracle relational database software which is 
incorporated into the TPII software products. 
    

SPECIAL DEVELOPMENT CONTRACTS 

   The Company performs specialized software modifications or enhancements to 
its TPII software for its customers, such as enhancing the TPII software to 
issue postage stamps at an ATM terminal. The Company generally receives a fee 
for the modification and has all proprietary rights to the software developed 
and may then include the modification in its standard TPII software products. 
The Company finds these contracts to be beneficial because of the resulting 
enhancements to its base software products. 

                                      25 
<PAGE>

MARKETING AND CUSTOMERS 

   
   TPII software products generally have been primarily installed in EFT 
Systems of banks and other financial institutions located in emerging 
countries and former Eastern Bloc nations which operate or are members of 
geographically-distributed EFT Systems or Networks servicing large volumes of 
transactions through many types of devices. They include the following: 
Budapest Bank, Budapest, Hungary; Ceska Sporitelna, Prague, Czech Republic; 
Slovak State Savings Bank, Bratislava, Slovak Republic; and Trustee's Saving 
Bank, Cork, Ireland. Certain of such financial institutions serve up to 200 
ATMs and 1,000 POS terminals. In addition, the Company has recently licensed 
its TPII software products to two United States financial institutions, 
Standard Federal Bank, Detroit, Michigan and Lockheed Federal Credit Union, 
Burbank, California. 

   In 1994, the Company entered into a strategic alliance with DEC, pursuant 
to which such computer manufacturer agreed to market on a nonexclusive basis 
TPII software products in connection with DEC's world-wide sale of its 
computers for EFT Systems. In connection with DEC's sale of computers for EFT 
Systems, DEC, rather than the financial institutions, is generally the 
licensee of the Company's TPII software products. For the fiscal years ended 
April 30, 1995 and 1996 and the six months ended October 31, 1996, 
approximately 19%, 14% and 23%, respectively, of the Company's total revenues 
were derived pursuant to this relationship. The Company is, therefore, 
dependent upon this relationship and would be adversely affected by the loss 
of such relationship. The Company has a similar agreement with Unisys for 
Europe and Africa, but as of the date hereof, the Company has not derived any 
revenues pursuant to its relationship with Unisys. In addition, pursuant to 
an informal arrangement with IBM Thailand, the Company licensed its TPII 
software products, through IBM Thailand, to two Asian financial institutions 
utilizing IBM computers for their EFT Systems. Revenues from such licenses 
represented approximately 19% of the Company's total revenues during the 
fiscal year ended April 30, 1996. The Company is currently seeking to enter 
into alliances with additional computer manufacturers. 
    

   The Company also markets its products directly through Charles J. Caserta, 
President of the Company, and Simon J. Theobald, Director of the Sales and 
Marketing Division in the Company's European office based in London. The 
Company intends to hire additional sales personnel after this offering. 

   The Company's software product information is disseminated internally 
within DEC through in-house newsletters and other promotional tools. Products 
are also advertised, to a limited extent, in user publications and at various 
trade shows. Upon completion of the offering, the Company intends to engage 
an advertising agency to implement a marketing campaign, including 
advertising in publications targeted for financial institutions. 

BACKLOG AND DEFERRED MAINTENANCE SERVICE REVENUES 

 BACKLOG 

   
   As of October 31, 1996 and 1995, the Company had backlog of approximately 
$942,000 and $1,182,000, respectively, in software license fees. The backlog 
was higher as of October 31, 1995 as the Company had more license agreements 
in process at that date as compared to October 31, 1996. Additionally, the 
stages of completion on contracts in process as of October 31, 1995 were 
generally less than the stages of completion on contracts in process as of 
October 31, 1996. The Company includes in its backlog all license fees not 
included as revenues under the percentage of completion method to the extent 
that the Company contemplates recognition of the related revenues within one 
year. Between November 1, 1996 and December 31, 1996, the Company entered 
into a new license agreement with a financial institution for an additional 
$303,500 in software license fees. There can be no assurance that the 
contracts included in backlog will actually generate the specified revenues 
or that the actual revenues will be generated within the one year period. 
    

 DEFERRED MAINTENANCE SERVICE REVENUES 

   
   As of October 31, 1996 and 1995, the Company had deferred maintenance 
service revenues of approximately $178,000 and $120,000, respectively. As 
more TPII software products are installed, maintenance service revenues are 
expected to increase. 
    

                                      26 
<PAGE>

COMPETITION 

   The development and marketing of software for financial institutions is 
highly competitive. The Company encounters both direct and indirect 
competition from several different sources which vary depending on the 
particular product or services involved and the size of the customer served. 
Many of these competitors have greater financial resources than the Company. 
In addition, many of the larger financial institutions have developed their 
own systems internally. However, the Company believes its TPII software 
products will continue to be competitive based on cost and technology. 

   The Company's TPII software products face strong competition from 
proprietary (legacy) and UNIX-based software. In the international EFT 
market, well established worldwide competition includes Transaction Systems 
Architects, Inc., Deluxe Data Systems, Inc., SDM International, Inc., S2 
Systems, Inc., a subsidiary of Stratus, SLM Software, Inc., Consolidated 
Software and Oasis Systems, whose products run on Tandem or Stratus fault- 
tolerant computers with proprietary operating systems or on IBM host or 
industry standard computers with UNIX operating systems. 

   The Company also encounters competition from original equipment 
manufacturers such as NCR Corporation, Interbold, Fujitsu and Omron; EFT 
software system integrators such as Kirchman Corporation, Hogan Systems, 
Inc., ARKSYS (formerly known as Arkansas Systems), Jack Henry and Diebold, 
Incorporated; and EFT shared regional networks such as NYCE, MAC and HONOR. 
Price competition is considerable, with discounting from list used as an 
inducement to buy software and mainframes or to become members of the 
Networks. 

   The Company is aware of only a limited number of companies primarily 
marketing UNIX-based products for EFT Systems. The Company is also aware that 
S2 Systems, Inc. has developed its own UNIX-based transaction processing 
package and Transaction Systems Architects, Inc. has begun to market a 
UNIX-based product, TRANS 24. 

   There are numerous companies which offer EFT outsourcing services. These 
third party providers primarily drive ATMs belonging to financial 
institutions. A significant portion of all of ATM transactions are processed 
by these third party providers. The principal companies in this area are: 
Electric Data Systems (EDS), Deluxe Data Corporation, Affiliated Computer 
Services, Inc., Fiserv, Inc., Money Access Services (MAC), Information 
Services and First Data Corporation. 

   The retail POS market is rapidly growing and numerous participants are 
positioning themselves to capture various segments of the market. Most of 
these companies are well established, have greater financial resources than 
the Company and an established customer base. There can be no assurance that 
the Company can make any inroads in this highly competitive marketplace or 
that its efforts will be successful. 

   In the smart card market, the Company is aware of other financial 
institutions attempting to develop their own smart card technology and is 
unable to predict which technology, if any, will become the industry 
standard. 

SOFTWARE DEVELOPMENT AND FUTURE PRODUCTS 

   In an effort to license TPII software products to larger financial 
institutions, the Company will test its software for use in managing EFT 
Systems with a greater number of ATMs and POS terminals than in the EFT 
Systems currently utilizing the Company's TPII software products. 
Establishing this capability will permit the Company to market TPII software 
products to financial institutions with larger EFT Systems which may be 
reluctant to use the Company's TPII software without proof of its 
capabilities in that environment. 

   Competition, technological advances, changes in customer requirements, 
deregulation and other regulatory changes affecting financial institutions 
necessitate an ongoing enhancement and development effort to meet the 
comprehensive processing needs of banks and other financial institutions. As 
a result, the Company will continue ongoing expenditures for enhancement of 
the Company's existing software products that take advantage of technological 
advances and respond to the increasingly sophisticated requirements of its 
customers. Enhancements to existing customers are delivered as add-ons to the 
licensing agreements for additional license fees. 

   
   The Company may devote a portion of the net proceeds of this offering to 
further develop products and services relating to the "loading" of value on 
the smart card. Financial institutions utilizing smart cards must 

                                      27 
    
<PAGE>

   
provide for the personalization of the smart cards as well as a purchase 
terminal system, a collection system and a clearing system. The Company may 
consider developing, itself or jointly, one or all of these products and 
services and may also explore the possibility of providing a turnkey or 
single vendor solution for financial institutions in this area. 
    

   The Company believes that its TPII software products can be adapted for 
telephone and Internet/computer banking. The Company intends to evaluate the 
potential for these markets upon the completion of this offering. 

   The Company will also attempt to market additional services to the EFT 
industry. Such services will include custom services, as well as facilities 
management services. Facilities management services entail the operation on a 
fee-basis of an EFT System by the Company's personnel at the customer's 
facility. 

PROPRIETARY RIGHTS 

   The Company does not own any patents or registered copyrights. The Company 
relies on a combination of trade secret and copyright laws, nondisclosure and 
other contractual provisions and technical measures to protect its 
proprietary rights. The Company distributes its TPII software products under 
software license agreements which typically grant customers nonexclusive 
licenses to use the products. Use of the software products is usually 
restricted to designated computers at specified locations and is subject to 
terms and conditions prohibiting unauthorized reproduction or transfer of the 
software products. The Company also seeks to protect the source code of its 
software products as a trade secret. The Company also obtains confidentiality 
agreements from its employees, customers and others who have access to its 
software products. Despite these precautions, there can be no assurance that 
misappropriation of the Company's software products and technology will not 
occur. 

   Although the Company believes that its intellectual property rights do not 
infringe upon the proprietary rights of third parties, there can be no 
assurance that third parties will not assert infringement claims against the 
Company. Further, there can be no assurance that intellectual property 
protection will be available for the Company's products in certain foreign 
countries. 

REGULATIONS 

   The Company's applications are utilized primarily by financial 
institutions. Such institutions are subject to state, federal or foreign 
regulation. Hence, it is possible that banking regulations may have a 
material effect on the Company's operations. In addition, the TPII software 
products are subject to export regulations, including regulations relating to 
encrypted software, which require prior approval of the licensing of the 
software to customers located in foreign countries. To date, however, the 
Company has not experienced problems complying with these regulations. 

EMPLOYEES 

   
   As of October 31, 1996, the Company had thirty-seven employees, 
thirty-five of whom were full time. Two employees comprise the direct sales 
force; twenty-seven employees are involved in product development, technical 
support and services and eight employees are involved in office 
administration. Additionally, the Company engages various consultants from 
time to time to assist with product development and enhancements to existing 
products. 
    

   The Company believes it can continue to attract skilled personnel for all 
areas and has been able to keep turnover to a minimum. However, the 
competition to employ skillful professionals is intense. None of the 
employees are covered by a collective bargaining agreement and there have 
been no work stoppages. Management believes that relations with its employees 
are good. 

PROPERTIES 

   
   The Company's current headquarters, which consist of approximately 8,500 
square feet of leased office space, is located at 185 Jordan Road, Rensselaer 
Technology Park, Troy, New York. The term of this lease expires on July 31, 
1999. The Company has the option to renew the lease at a mutually agreeable 
rental at least 
    

                                      28 
<PAGE>

   
30 days prior to expiration. The current annual base rental amount is 
$82,476. In addition to base rent, the Company pays a pro-rata share of 
operating costs. 

   In order to have sufficient space for its projected expanded operations, 
the Company entered into a Purchase and Sale Agreement as of December 17, 
1996 for the acquisition of a ground lease expiring on May 25, 2083 and a 
building with approximately 35,000 square feet of space located at 300 Jordan 
Road, Rensselaer Technology Park, Troy, New York. The Company intends to use 
approximately 20,000 square feet of this new facility for its operations. The 
purchase price of such facility is $995,000, of which an initial deposit of 
$20,000 has been paid. An additional deposit of $30,000 is due on February 
28, 1997 and the balance is due on March 14, 1997 on the satisfaction of 
certain matters. The Company estimates that an additional $400,000 will be 
necessary for the renovation of such facility. The Company intends to use 
approximately $600,000 of the net proceeds to fund such purchase and 
renovation with the balance to be funded by a mortgage. There can be no 
assurance that a mortgage will be available on terms acceptable to the 
Company, or at all. If the Company is unable to obtain a mortgage for this 
facility, it would not proceed with the purchase. In such event, it would 
forfeit any deposits paid towards such purchase. If the Company acquires and 
moves into this new facility, the landlord of the Company's current lease has 
agreed to terminate such lease without any further obligations by the 
Company. 

   The Company's European Sales and Marketing office is also leased and is 
located at Salamander Quay (West), Park Lane, Harefield, Uxbridge, Middlesex, 
UB9 6NZ, England. This office consists of approximately 890 square feet. The 
term of this lease expires in June 1999. The current annual base rental 
amount is approximately $22,000. 
    

LEGAL PROCEEDINGS 

   
   On June 15, 1989 the Company commenced an action against SLM Software, 
Inc. ("SLM"), a competitor of the Company, in the Supreme Court of the State 
of New York. The action sought money damages from SLM for fraud and breach of 
contract, and further sought rescission of a certain contract between the 
parties. Thereafter, SLM commenced a separate action against the Company in 
the civil trial courts of the province of Ontario, Canada. All litigation 
between the parties was settled on December 4, 1996 with the Company paying 
$100,000 to SLM. 
    

   The Company is not aware of any other legal proceedings. 

                                      29 
<PAGE>
                                  MANAGEMENT 

DIRECTORS AND EXECUTIVE OFFICERS 

   The directors and executive officers of the Company are as follows: 
<TABLE>
<CAPTION>
 Name                   Age                                Position 
 -------------------   -----   ----------------------------------------------------------------- 
<S>                    <C>    <C>
Frank A. Pascuito  .    40    Chairman of the Board, Chief Executive Officer and Director 
Charles J. Caserta      40    President and Director 
Simon J. Theobald  .    33    Director of Sales and Marketing for the London office and Director 
Carman A. Pascuito      37    Controller and Secretary 
Jerald Tishkoff  ...    59    Director 
Arnold Wells  ......    77    Director 

</TABLE>
   Frank A. Pascuito has been the Chief Executive Officer and Chairman of the 
Board of the Company since 1989. Mr. Pascuito co-founded the Company's 
predecessor company, IFS International, Inc. (formerly named Avant-Garde 
Computer Systems, Inc.), a New York corporation engaged in the development 
and marketing of software (the "Predecessor"), in 1981 and served as its 
President until November 1987 and as its Vice President of Product Planning 
until 1989. Prior to 1981, he was employed by NCR Corporation's ATM software 
development team. As a consultant to NCR in 1979, he assisted in the 
development and performed the installation of the first on-line/off-line ATM 
system for NCR in the United States. Mr. Pascuito has over ten years of 
operating and marketing experience in EFT system design, sales and service. 
Mr. Pascuito is a graduate of the State University of New York at Potsdam 
with a B.S. degree in Computer Science. He is active in several area 
organizations dealing with technology, software, and world trade. 

   Charles J. Caserta has been the President and a director of the Company 
since 1989. Mr. Caserta co-founded the Predecessor in 1981 and served as its 
Chairman until November 1987 and as its Vice President of Sales until 1989. 
Mr. Caserta has over ten years of consulting and marketing experience in EFT 
system design, sales and service. Mr. Caserta is a graduate of Villanova 
University with a B.A. degree in English. 

   Simon J. Theobald has been a director of the Company since December 1994 
and has been the Director of Sales and Marketing of the European Division 
based in London since 1992. From 1986 to April 1992, he was employed by 
Applied Communications Inc., a subsidiary of Transaction Systems Architects, 
Inc. Mr. Theobald has more than fifteen years experience in the electronic 
funds transfer industry. Mr. Theobald is a graduate of De-Havilland College 
with a degree in computer studies and technology. 
   
   Carmen A. Pascuito has been Secretary of the Company since December 1996 
and its Controller since 1989. Mr. Pascuito joined the Predecessor in 1985 as 
a staff accountant and became its controller in 1988. Mr. Pascuito is a 
graduate of Siena College with a B.B.A. degree in Accounting. 
    
   Jerald Tishkoff has been a director of the Company since May 1994. Since 
1991, Mr. Tishkoff has been Director of Marketing and a member of the Board 
of Directors of Allen Technologies, Inc., a private company that provides 
interactive television networks to schools and hospitals. Between 1967 and 
1991, he was Director of Marketing of Wells National Services, a provider of 
interactive television networks to hospitals. He serves on the Advisory Board 
of the Jewish Federation, a charitable organization. He is a graduate of 
Western Reserve University of Cleveland with a B.B.A. degree and attended 
Western Reserve University Law School. 

   Arnold Wells has been a director of the Company since 1986. Since 1976, 
Mr. Wells has been a private investor and consultant in the health and 
communications fields. Mr. Wells organized Wells Television (subsequently 
named Wells National Services). In 1978, Mr. Wells formed WellsArt Limited, a 
company which is engaged in the publishing and licensing work of prominent 
artists. Mr. Wells is a graduate of Western Reserve University with a B.A. 
degree. 
<PAGE>

   
   Frank A. Pascuito and Carman A. Pascuito are brothers. 
    
   Pursuant to the terms of the Underwriting Agreement, the Underwriter will 
have the right to nominate a member of the Board of Directors and the Company 
will use its best efforts to have such nominee elected to the Board. As of 
the date hereof, the Underwriter has not nominated any such person. See 
"Underwriting." 
   
   Promptly after the consummation of this offering, the Company will appoint 
an audit committee. One of the members of such committee will be the 
director, if any, who is designated by the Underwriter and another member of 
such committee will be an independent director. 
    

                                      30 
<PAGE>

EXECUTIVE COMPENSATION 

   The following table sets forth information concerning compensation paid or 
accrued by the Company or its subsidiary for services rendered during the 
fiscal years ended April 30, 1996, 1995 and 1994 to the Company's Chief 
Executive Officer. No executive officer had total annual compensation which 
exceeded $100,000 during such fiscal years. 

                          SUMMARY COMPENSATION TABLE 

<TABLE>
<CAPTION>
                                                                 Other                                                   All 
                                                                 Annual      Restricted     Securities                  Other 
        Name and            Fiscal                              Compen-        Stock        Underlying       LTIP      Compen- 
   Principal Position        Year      Salary(1)      Bonus      sation       Award(s)      Option(s)      Payouts      sation 
 -----------------------   --------   ------------    -------   ---------   ------------   ------------    ---------   --------- 
<S>                        <C>        <C>             <C>       <C>         <C>            <C>             <C>         <C>
Frank Pascuito  ........     1996       $88,000        $-0-       $-0-          $-0-           -0-           -0-         $-0- 
   Chief Executive Officer   1995       $88,000        $-0-       $-0-          $-0-           -0-           -0-         $-0- 
                             1994       $78,454(2)     $-0-       $-0-          $-0-           -0-           -0-         $-0- 
</TABLE>

- ------ 
(1) Does not include accrued interest of $5,706, $5,336 and $4,669 for the 
    fiscal years ended April 30, 1996, 1995 and 1994, respectively, for 
    salaries earned but deferred. The interest rate on such deferred salaries 
    is 12% per annum. See "Certain Transactions." 

(2) Includes deferred salary in the amount of $6,769. 

   Set forth below with respect to Frank Pascuito is further information 
concerning options to purchase Common Stock under the Company's stock option 
plan. 
<TABLE>
<CAPTION>
                                                 
                                                                    Number of Securities             Value of Unexercised 
                           Number of Shares                        Underlying Unexercised                In-the-Money 
                            of Common Stock                     Options as of April 30, 1996    Options as of April 30, 1996(1) 
                              Acquired on                      -------------------------------  ------------------------------- 
           Name                Exercise       Value Realized    Exercisable    Unexercisable     Exercisable     Unexercisable 
 ------------------------   ----------------  --------------   -------------   ---------------  -------------   --------------- 
<S>                 <C>                       <C>              <C>             <C>              <C>             <C>
Frank Pascuito, 
  Chief Executive Officer          0                0             50,773             0             $86,623            $0 
</TABLE>
- ------ 
(1) Based on a market price of $2.50 per share at April 30, 1996. 

EMPLOYMENT AGREEMENTS 
   
   Upon the completion of this offering, Frank A. Pascuito and Charles J. 
Caserta will each enter into a three year employment agreement with the 
Company, effective as of January 1, 1997, which will provide for their 
employment as Chairman of the Board and President, respectively. Under their 
respecive agreements, Messrs. Pascuito and Caserta will each receive a base 
salary of $110,000 per year for each of the first two years and an amount to 
be determined by the Board of Directors for the third year. In addition, 
Messrs. Pascuito and Caserta each will be entitled to commissions of 8% on 
revenues during any fiscal year in excess of $425,000 pursuant to licenses 
agreements generated by their respective sales efforts. The Board of 
Directors may in its discretion grant bonuses to Messrs. Pascuito and 
Caserta. Pursuant to these employment agreements and not pursuant to any 
option plan, Messrs. Pascuito and Caserta also will each receive options to 
purchase 75,000 shares of Common Stock at an exercise price of $5.00 per 
share. Each agreement contains a restrictive covenant requiring the executive 
not to compete with the Company for the term of the agreement and for two 
years following termination of service. Each agreement provides for a car 
allowance. 

STOCK OPTION PLANS 

   The Company has two option plans: the 1996 Stock Option Plan (the "1996 
Plan") and its prior stock option plan (the "Plan"). 

   The 1996 Plan provides for the granting of options which are intended to 
qualify either as incentive stock options ("Incentive Stock Options") within 
the meaning of Section 422 of the Internal Revenue Code of 1986 or as options 
which are not intended to meet the requirements of such section 
("Nonstatutory Stock Options"). The total number of shares of Common Stock 
reserved for issuance under the 1996 Plan is 300,000. Options to purchase 
shares may be granted under the 1996 Plan to persons who, in the case of 
Incentive Stock Options, are 
    
                                      31 
<PAGE>

   
key employees (including officers) of the Company or any subsidiary of the 
Company, or, in the case of Nonstatutory Stock Options, are key employees 
(including officers) or nonemployee directors of, or nonemployee consultants 
to, the Company or any subsidiary of the Company. 

   The 1996 Plan provides for its administration by the Board of Directors or 
a committee chosen by the Board of Directors, which has discretionary 
authority, subject to certain restrictions, to determine the number of shares 
issued pursuant to Incentive Stock Options and Nonstatutory Stock Options and 
the individuals to whom, the times at which and the exercise price for which 
options will be granted. 
    

   The exercise price of all Incentive Stock Options granted under the 1996 
Plan must be at least equal to the fair market value of such shares on the 
date of the grant or, in the case of Incentive Stock Options granted to the 
holder of more than 10% of the Company's Common Stock, at least 110% of the 
fair market value of such shares on the date of the grant. The maximum 
exercise period for which Incentive Stock Options may be granted is ten years 
from the date of grant (five years in the case of an individual owning more 
than 10% of the Company's Common Stock). The aggregate fair market value 
(determined at the date of the option grant) of shares with respect to which 
Incentive Stock Options are exercisable for the first time by the holder of 
the option during any calendar year shall not exceed $100,000. 

   
   As of the date hereof, no options have been granted pursuant to the 1996 
Plan. 

   The Plan provides for the issuance of options to purchase Common Stock to 
key employees, officers, directors and consultants. As of the date hereof, 
there were options outstanding to purchase 258,392 shares of Common Stock 
under the Plan. All options are exercisable at prices ranging from $.66 to 
$3.50 per share and expire in various years between 1997 - 2006. As of the 
date hereof, options to purchase 107 shares of Common Stock were available 
for grant under the Plan. 

   The exercise price of all future option grants will be at least 85% of the 
fair market value of the Common Stock on the date of grant. 
    

                                      32 
<PAGE>

                            PRINCIPAL STOCKHOLDERS 

   
   The following table sets forth certain information regarding beneficial 
ownership of the Common Stock as of December 31, 1996 by (i) each stockholder 
known by the Company to be the beneficial owner of more than 5% of the 
outstanding Common Stock, (ii) each director of the Company and (ii) all 
directors and executive officers as a group. No director, executive officer 
or 5% or greater stockholder is the beneficial owner of any shares of 
Preferred Stock. Except as otherwise indicated, the Company believes that the 
beneficial owners of the Common Stock listed below, based on information 
furnished by such owners, have sole investment and voting power with respect 
to such shares, subject to community property laws where applicable. 
    

<TABLE>
<CAPTION>
                    Name and Address of                        Number Of Shares     Percentage 
                      Beneficial Owner                        Beneficially Owned     of Class 
 ----------------------------------------------------------   ------------------   ------------ 
<S>                                                           <C>                  <C>
Frank Pascuito  ...........................................        307,757(1)          25.8% 
Rensselaer Technology Park 
185 Jordan Road 
Troy, NY 12180 
Charles J. Caserta  .......................................        307,757(2)          25.8% 
Rensselaer Technology Park 
185 Jordan Road 
Troy, NY 12180 
Simon J. Theobald  ........................................         44,604(3)           4.0% 
Little Elms, 12 Green Lane, 
Croxley Green, Rickmansworth, 
Hertfordshire, WD3 3HR England 
Jerald Tishkoff  ..........................................         37,486(4)           3.5% 
2620 S. Glen 
University Heights, Ohio 44122 
Arnold Wells  .............................................          5,500(5)            .5% 
1100 Madison Avenue 
New York, NY 10028 
All directors and executive officers as a group (5 
   persons) ...............................................        703,104(6)          51.1% 
</TABLE>

   
- ------ 
(1) Includes 128,549 shares issuable upon exercise of stock options. 

(2) Includes 128,549 shares issuable upon exercise of stock options. 

(3) Includes 44,584 shares issuable upon exercise of stock options. 

(4) Includes 7,486 shares issuable upon exercise of stock options. 
    

(5) Includes 5,000 shares issuable upon exercise of stock options. 

   
(6) Includes 314,168 shares issuable upon exercise of stock options. 
    

                             CERTAIN TRANSACTIONS 

   
   Frank Pascuito deferred salaries for the five fiscal years ended April 30, 
1995 in the aggregate amount of $60,765. Such deferred salaries bore interest 
at the rate of 12% per annum until September 30, 1996, which interest 
aggregated $31,013 as of such date and was also deferred. As of December 31, 
1996, the Company had repaid $36,396 of deferred salaries and anticipates 
that the balance of the deferred salaries and interest will be paid prior to 
the commencement of this offering. 

   Charles Caserta deferred salaries for the five fiscal years ended April 
30, 1995 in the aggregate amount of $62,439. Such deferred salaries bore 
interest at the rate of 12% per annum until September 30, 1996, which 
interest aggregated $34,464 as of such date and was also deferred. As of 
December 31, 1996, the Company had repaid all of the deferred interest and 
anticipates that the deferred salaries will be paid prior to the commencement 
of this offering. 

                                      33 
    
<PAGE>

   
   Simon J. Theobald, Director of Sales and Marketing for the London office 
of the Company, receives a base salary of $75,000 and a commission in the 
amount of 8% of gross revenues of any licensing agreement for which he 
provides sales and marketing services. During the fiscal years ended April 
30, 1995 and 1996 and the six months ended October 31, 1996, Mr. Theobald 
earned $154,592, $115,500 and $84,133, respectively, in salaries and 
commissions. 
    

   In September 1996, the Company, as part of the Bridge Financing, sold to 
unrelated third parties $500,000 principal amount of the Company's Notes for 
$500,000 and warrants to purchase 100,000 shares of Common Stock for $5,000. 
The Notes bear interest at 12% per annum and are due on the earlier of March 
24, 1998 or closing of this offering. The warrants are exercisable at $2.50 
per share, subject to adjustment, at any time until September 24, 2001. 

   The Company believes that all transactions with officers were made on 
terms no less favorable to the Company than those available from unaffiliated 
parties. All future transactions between the Company and its officers, 
directors and 5% shareholders will be on terms no less favorable than could 
be obtained by independent third parties and will be approved by a majority 
of the independent disinterested directors of the Company. 

                          DESCRIPTION OF SECURITIES 

   
   The following descriptions of the Company's securities are qualified in 
all respects by reference to the Certificate of Incorporation and By-laws of 
the Company, the Certificate of Designation of the Preferred Stock and the 
warrant agreement (the "Warrant Agreement"), dated as of _________, 1997, by 
and between the Company, American Stock Transfer & Trust Company (the 
"Warrant Agent") and the Underwriter, copies of which are filed as Exhibits 
to the Registration Statement of which this Prospectus is a part. The 
Certificate of Incorporation of the Company authorizes the Company to issue 
up to 50,000,000 shares of Common Stock, par value $.001 per share, and 
25,000,000 shares of preferred stock, par value $.001 per share. 
    

COMMON STOCK 

   
   As of the date hereof, there were 1,062,409 shares of Common Stock 
outstanding. The holders of Common Stock are entitled to one vote for each 
share held of record on all matters submitted to a vote of the stockholders. 
Subject to preferential rights with respect to future outstanding preferred 
stock, holders of Common Stock are entitled to receive ratably such dividends 
as may be declared by the Board of Directors out of funds legally available 
therefor. In the event of a liquidation, dissolution or winding up of the 
Company, holders of Common Stock are entitled to share ratably in all assets 
remaining after payment of liabilities and satisfaction of preferential 
rights and have no rights to convert their Common Stock into any other 
securities. All shares of Common Stock have equal, non-cumulative voting 
rights, and have no preference, exchange, preemptive or redemption rights. 
    

PREFERRED STOCK 

   Prior to the date hereof, there were no shares of preferred stock 
outstanding. The Company's Certificate of Incorporation authorizes the 
issuance of the preferred stock with designations, rights and preferences 
determined from time to time by its Board of Directors. The Board of 
Directors has adopted a resolution that 20,000,000 shares of the preferred 
stock be designated as Series A Convertible Preferred Stock (the "Preferred 
Stock"). The holders of Preferred Stock are entitled to one vote for each 
share held of record on all matters submitted to a vote of the stockholders. 
All such matters require approval of the Preferred Stock, voting separately 
as a class, except that with respect to the election of directors, the 
Preferred Stock and Common Stock vote together as one class. No dividends 
will be paid on the Preferred Stock, except that holders of Preferred Stock 
will be entitled to receive dividends if dividends are declared with respect 
to the Common Stock and, in such event, ratably with the holders of Common 
Stock. 

   Each share of Preferred Stock is convertible at the option of the holder 
into one share of Common Stock, subject to adjustment, during the five-year 
period commencing on the date hereof; provided that the Preferred 

                                      34 
<PAGE>

   
Stock must be converted on the earlier of (i) _____________, 2002 or (ii) the 
consummation date of a merger or acquisition of the Company in which the then 
outstanding securities of the Company are surrendered or exchanged for cash, 
property or securities of another entity if the consideration received in any 
such transaction is not less than $5.00 per share on a fully-diluted basis. 
The number of shares of Common Stock into which the Preferred Stock is 
convertible is subject to adjustment in certain circumstances, including a 
stock dividend on, or a stock split, subdivision, combination or 
recapitalization of, the Common Stock or the issuance or sale of Common Stock 
or securities convertible into or exchangable for Common Stock at less than 
$5.00 per share, except in certain circumstances. 
    

   In the event of liquidation, dissolution or winding up of the Company, 
holders of Preferred Stock are entitled, after payment of liabilities and 
satisfaction of any then existing preferential rights of any holders of 
capital stock, to receive up to $5.00 per share of the remaining assets of 
the Company before payment is made to the holders of Common Stock. After 
payment of $5.00 per share to the holders of the Preferred Stock, the holders 
of the Preferred Stock are entitled to share with the holders of the Common 
Stock in the remaining assets of the Company available for distribution to 
its stockholders. 

   
   All shares of Preferred Stock have equal, non-cumulative voting rights and 
have no preemptive or redemption rights. 

   The remaining 5,000,000 shares of preferred stock, which have not been 
designated as Series A Convertible Preferred Stock (the "Shares"), may be 
issued in series, and Shares of each series will have such rights and 
preferences as are fixed by the Board of Directors in the resolutions 
authorizing the issuance of that particular series. In designating any series 
of Shares, the Board of Directors may fix the number of Shares constituting 
that series and fix the dividend rights, dividend rate, conversion rights, 
voting rights (which may be greater or lesser than the voting rights of the 
Common Stock and Preferred Stock), rights and terms of redemption (including 
any sinking fund provisions) and the liquidation preferences of the series of 
Shares. It is possible, without any action of the stockholders of the 
Company, that the holders of any series of Shares, when and if issued, will 
have priority claims to dividends and to any distributions upon liquidation 
of the Company and that they may have other preferences over the holders of 
the Common Stock. The Board of Directors may issue series of Shares without 
action of the stockholders of the Company, except that no series of Shares 
may be issued with liquidation preferences greater than the liquidation 
preferences of the Preferred Stock or with dividend rights on a parity with 
or having a preference over the dividend rights of the Preferred Stock 
without approval of the holders of the Preferred Stock. 

   The issuance of Shares may be used as an anti-takeover device without 
further action on the part of the stockholders. Furthermore, the issuance of 
preferred stock may dilute the voting power of holders of the Common Stock 
and Preferred Stock (such as by issuing preferred stock with super-voting 
rights) and may render more difficult the removal of current management, even 
if such removal may be in the stockholders' best interests. The Company has 
no current plans to issue any of the remaining Shares. 

   The Company has agreed with the Underwriter not to sell or issue any 
Preferred Stock or Shares for a period of 36 months commencing with the 
consummation of this offering. 
    

WARRANTS 

   
   Each Warrant entitles the registered holder thereof to purchase one share 
of Preferred Stock at a price of $6.25 per share, subject to adjustment as 
set forth below, for a period of three years commencing on ________, 1999, 
except that if the Warrants are called for redemption, or the Preferred Stock 
is required to be converted prior to ________, 1999, the Warrants will be 
exercisable from the date on which notice of such redemption or mandatory 
conversion is given by the Company. 

   The Warrants are redeemable by the Company, with the prior consent of the 
Underwriter, at any time commencing on __________, 1998, at a price of $.10 
per Warrant, provided that the last sale price of the Preferred Stock, for a 
period of 20 consecutive days of trading of the Preferred Stock ending not 
more than three days prior to the date of any redemption notice equals or 
exceeds at least $8.00 per share, subject to adjustment. The Warrants shall 
be exercisable until the close of the business day preceding the date fixed 
for redemption. Such notice of redemption will be mailed at least 30 days, 
but not more than 45 days, prior to the date fixed for redemption. 
    

   The Warrants will be issued pursuant to the Warrant Agreement and will be 
evidenced by warrant certificates in registered form. 

                                      35 
<PAGE>

   The exercise price of the Warrants and the number of shares of Preferred 
Stock or other securities and property issuable upon exercise of the Warrants 
are subject to adjustment in certain circumstances, including a stock 
dividend on, or a stock split, subdivision, combination or recapitalization 
of, the Common Stock, and will also be subject to adjustment upon the sale or 
issuance of Common Stock or securities convertible into or exchangeable for 
Common Stock at less than $6.25 per share, except in certain circumstances. 
However, the Warrants are not subject to adjustment for issuances of 
Preferred Stock at a price below the exercise price of the Warrants. 
Additionally, an adjustment will be made upon the sale of all or 
substantially all of the assets of the Company in order to enable holders of 
Warrants to purchase the kind and number of shares of stock or other 
securities or property (including cash) receivable in such event by a holder 
of the number of shares of Preferred Stock that might otherwise have been 
purchased upon exercise of the Warrant. 

   The Warrants do not confer upon the holder any voting or any other rights 
of a stockholder of the Company. 

   Warrants may be exercised upon surrender of the Warrant certificate 
evidencing those Warrants on or prior to the expiration date (or earlier 
redemption date) of the Warrants at the offices of the Warrant Agent with the 
form of "Election to Purchase" on the reverse side of the warrant certificate 
completed and executed as indicated, accompanied by payment of the full 
exercise price (by certified check payable to the order of the Warrant Agent) 
for the number of Warrants being exercised. 

   No Warrant will be exercisable or redeemable unless at the time of 
exercise the prospectus covering the shares of Preferred Stock issuable upon 
exercise of the Warrant is current and the issuance of shares has been 
registered or qualified or is deemed to be exempt from registration or 
qualification under the securities laws of the state of residence of the 
holder of the Warrant. The Company has undertaken to use its best efforts to 
maintain a current prospectus relating to the issuance of shares of Preferred 
Stock upon the exercise of the Warrants until the expiration of the Warrants, 
subject to the terms of the Warrant Agreement. While it is the Company's 
intention to maintain a current prospectus, there is no assurance that it 
will be able to do so. The Company anticipates that the Registration 
Statement, of which this Prospectus forms a part, will remain effective for 
nine months following the date hereof. See "Risk Factors - Need for Current 
Prospectus; Non-Registration in Certain Jurisdictions of Shares Underlying 
Warrants." 

   No fractional shares will be issued upon exercise of the Warrants. 
However, if a Warrantholder exercises all Warrants then owned of record by 
him or her, the Company will pay to that Warrantholder, in lieu of the 
issuance of any fractional share which is otherwise issuable, an amount in 
cash based on the market value of the Preferred Stock on the last trading day 
prior to the exercise date. 

DELAWARE LAW AND CERTAIN CHARTER PROVISIONS 

   The Company will be subject to Section 203 of the Delaware General 
Corporation Law, which prohibits a Delaware corporation from engaging in a 
wide range of specified transactions with any interested stockholder, defined 
to include, among others, any person or entity who in the previous three 
years obtained 15% or more of any class or series of stock entitled to vote 
in the election of directors, unless, among other exceptions, the transaction 
is approved by (i) the Board of Directors prior to the date the interested 
stockholder obtained such status or (ii) the holders of two-thirds of the 
outstanding shares of each class or series owned by the interested 
stockholder. The Company's Certificate of Incorporation and By-laws contain 
certain additional provisions which may have the effect of delaying or 
preventing a change in control of the Company. Such provisions include blank 
check preferred stock (the terms of which may be fixed by the Board of 
Directors without stockholder approval). Accordingly, the Company's Board of 
Directors is empowered, without stockholder approval, to issue preferred 
stock, other than the Preferred Stock, with dividend, liquidation, 
conversion, voting or other rights that could adversely affect the voting 
power or other rights of the holders of the Preferred Stock and/or Common 
Stock. In the event of issuance, the preferred stock could be used, under 
certain circumstances, as a method of discouraging, delaying or preventing a 
change in control of the Company. 

TRANSFER AND WARRANT AGENT 

   The transfer agent for the Preferred Stock and Common Stock and the 
warrant agent for the Warrants is American Stock Transfer & Trust Company. 

                                      36 
<PAGE>

                       SHARES ELIGIBLE FOR FUTURE SALE 

   
   Upon completion of this offering, the Company will have outstanding an 
aggregate of 1,200,000 shares of Preferred Stock and 1,062,409 shares of 
Common Stock. All of the shares of Preferred Stock and 585,318 shares of 
Common Stock will be freely tradable without restriction or further 
registration under the Securities Act. Of the remaining 477,091 shares of 
Common Stock outstanding, 386,936 shares are "restricted" shares that are 
owned by "affiliates" of the Company as such terms are defined under the 
Securities Act and 90,155 shares are "restricted" shares that are owned by 
nonaffiliates of the Company. 
    

   In general, under Rule 144, a person (or persons whose shares are 
aggregated) who has beneficially owned restricted securities within the 
meaning of Rule 144 ("Restricted Shares") for at least two years, including 
the holding period of any securities which converted into the Restricted 
Shares and including the holding period of any prior owner except an 
affiliate of the Company, would be entitled to sell within any three-month 
period a number of shares that does not exceed the greater of 1% of the then 
outstanding shares of Common Stock or the average weekly trading volume of 
the Common Stock reported during the four calendar weeks preceding such sale. 
Sales under Rule 144 are also subject to certain manner of sale provisions, 
notice requirements and the availability of current public information about 
the Company. Any person (or persons whose shares are aggregated with such 
person) who is not deemed to have been an affiliate of the Company at any 
time during the 90 days preceding a sale, and who has beneficially owned 
shares for at least three years (including any period of ownership of 
preceding non-affiliated holders), would be entitled to sell such shares 
under Rule 144(k) without regard to the volume limitations, manner of sale 
provisions, public information requirements or notice requirements. 

   The Company has filed a registration statement under the Securities Act to 
register shares of Common Stock to be issued upon exercise of the Bridge 
Financing warrants, thus permitting the resale of such shares by non- 
affiliates in the public market without restriction under the Securities Act. 
The Company also has granted registration rights to the Underwriter with 
respect to the Underwriter's Warrants and the securities issuable upon 
exercise thereof and to the holder of the Technology Loan with respect to the 
shares of Common Stock issuable upon the conversion thereof. 

                                 UNDERWRITING 

   Duke & Co., Inc. (the "Underwriter") has agreed, subject to the terms and 
conditions contained in the Underwriting Agreement, to purchase 1,200,000 
shares of Preferred Stock and 1,700,000 Warrants to purchase shares of 
Preferred Stock from the Company. The Underwriter is committed to purchase 
and pay for all of the Preferred Stock and Warrants offered hereby if any of 
such securities are purchased. The shares of Preferred Stock and Warrants are 
being offered by the Underwriter subject to prior sale, when, as and if 
delivered to and accepted by the Underwriter and subject to approval of 
certain legal matters by counsel and to certain other conditions. 

   The Underwriter has advised the Company that it proposes to offer the 
Preferred Stock and Warrants to the public at the public offering prices set 
forth on the cover page of this Prospectus. The Underwriter may allow to 
certain dealers who are members of the National Association of Securities 
Dealers, Inc. concessions not in excess of $_____ per share of Preferred 
Stock and $______ per Warrant. 

   The Company has granted to the Underwriter an option exercisable for 45 
days from the date of this Prospectus, to purchase up to 180,000 additional 
shares of Preferred Stock and 255,000 additional Warrants at the public 
offering prices set forth on the cover page of this Prospectus, less the 
underwriting discounts. The Underwriter may exercise this option in whole or, 
from time to time, in part solely for the purpose of covering overallotments, 
if any, made in connection with the sale of the shares of Preferred Stock and 
Warrants offered hereby. The Company has also agreed to pay all expenses in 
connection with qualifying the shares of Preferred Stock and Warrants offered 
hereby for sale under the laws of such states as the Underwriter may 
designate, including expenses of counsel retained for such purposes by the 
Underwriter. 

   The Company has agreed to pay the Underwriter a non-accountable expense 
allowance of 3% of the gross proceeds of this offering, including the 
proceeds of the over-allotment option, if and to the extent exercised. 

                                      37 
<PAGE>

   
   The Company has agreed to sell to the Underwriter and its designees, for 
an aggregate of $290, warrants (the "Underwriter's Warrants") to purchase up 
to 120,000 shares of Preferred Stock at an exercise price of $6.25 per share 
and/or up to 170,000 warrants (each to purchase one share of Preferred Stock 
at an exercise price of $7.8125 per share) at an exercise price of $.125 per 
warrant. The Underwriter's Warrants may not be sold, transferred, assigned or 
hypothecated for one year from the effective date of the Registration 
Statement of which this Prospectus forms a part, except to the officers and 
partners of the Underwriter, co-underwriters, selling group members and their 
officers or partners, and are exercisable during the four-year period 
commencing one year from the effective date of the Registration Statement of 
which this prospectus forms a part (the "Warrant Exercise Term"). During the 
Warrant Exercise Term, the holders of the Underwriter's Warrants are given, 
at nominal cost, the opportunity to profit from a rise in the market prices 
of the Preferred Stock and the Warrants. To the extent that the Underwriter's 
Warrants are exercised, dilution to the interests of the Company's 
shareholders will occur. Further, the terms upon which the Company will be 
able to obtain additional equity capital may be adversely affected, since the 
holders of the Underwriter's Warrants can be expected to exercise them at a 
time when the Company would, in all likelihood, be able to obtain any needed 
capital on terms more favorable to the Company than those provided in the 
Underwriter's Warrants. Any profit realized by the Underwriter on the sale of 
the Underwriter's Warrants, the underlying shares of Preferred Stock or the 
underlying warrants, or the shares of Preferred Stock issuable upon the 
exercise of such underlying warrants, may be deemed additional underwriting 
compensation. The exercise price and number of shares of Preferred Stock or 
the other securities issuable on exercise of the Underwriter's Warrants are 
subject to adjustment in certain circumstances, including in the event of a 
stock dividend, subdivision, reclassification, reorganization, merger or 
recapitalization. An adjustment will also be made in the case of a 
distribution to holders of Preferred Stock of evidence of the Company's 
indebtedness or assets or subscription rights or warrants. Subject to certain 
limitations and exclusions, the Company has agreed, at the request of the 
holders of a majority of the Underwriter's Warrants, at the Company's 
expense, to register under the Securities Act the Underwriter's Warrants, the 
shares of Preferred Stock and warrants underlying the Underwriter's Warrants, 
and the shares of Preferred Stock issuable upon exercise of the underlying 
warrants on one occasion during the four-year period commencing one year from 
the effective date of the Registration Statement of which this Prospectus 
forms a part, and to include, on one occasion, such Underwriter's Warrants 
and such underlying securities in an appropriate registration statement which 
is filed by the Company during the Warrant Exercise Term. 
    

   The Company has agreed, in connection with the exercise of the Warrants 
pursuant to solicitation by the Underwriter (commencing one year from the 
date of this Prospectus), to pay to the Underwriter a fee of 5% of the 
exercise price for each Warrant exercised; provided, however, that the 
Underwriter will not be entitled to receive such compensation in Warrant 
exercise transactions in which (i) the market price of Preferred Stock at the 
time of exercise is lower than the exercise price of the Warrants; (ii) the 
Warrants are held in any discretionary account; (iii) disclosure of 
compensation arrangements is not made, in addition to disclosure provided in 
this Prospectus, in documents provided to holders of the Warrants at the time 
of exercise; (iv) the exercise of Warrants is unsolicited by the Underwriter; 
or (v) the solicitation of exercise of the Warrants was in violation of Rule 
10b-6 promulgated under the Exchange Act. 

   The Company has agreed, for a period of five years from the consummation 
of this offering, to engage the designee of the Underwriter as a non-voting 
advisor to the Company's Board of Directors or, at the Underwriter's request, 
to nominate and use its best efforts to elect a reasonably acceptable 
designee of the Underwriter as a director of the Company. The Underwriter has 
not yet exercised its right to designate such person. 

   The Company has also agreed that it will not, during a period of 24 months 
following this offering, issue or sell any securities of the Company without 
the prior consent of the Underwriter, except in certain circumstances. 

   
   In addition, the Company has agreed to enter into a consulting agreement 
to retain the Underwriter as a financial consultant for a period of two years 
following the consummation of this offering at a fee of $10,000 per year, the 
entire $20,000 payable in full immediately upon the consummation of this 
offering. The consulting agreement will not require the Underwriter to devote 
a specific amount of time to the performance of its duties thereunder. It is 
anticipated that these consulting services will be provided by principals of 
the Underwriter and/or members of the Underwriter's corporate finance 
department who, however, have not been desig- 
    

                                      38 
<PAGE>

nated as of the date hereof. In the event that the Underwriter originates a 
financing or a merger, acquisition, joint venture or other transaction to 
which the Company is a party, the Underwriter will be entitled to receive a 
finder's fee in consideration for origination of such transaction. 

   
   The Company has agreed to indemnify the Underwriter against certain civil 
liabilities, including liabilities under the Securities Act. The Company has 
also agreed to reimburse the Underwriter and its counsel for travel expenses 
incurred in connection with this offering. It is anticipated that this amount 
will not exceed $500. 
    

   Prior to this offering, there has been no public trading market for the 
Preferred Stock or Warrants, and only a very limited trading market for the 
Common Stock. Consequently, the initial public offering prices of the 
Preferred Stock and Warrants and the exercise price of the Warrants have been 
determined by negotiations between the Company and the Underwriter. Among the 
factors considered in determining the initial public offering prices and 
other terms of the securities were the Company's financial condition and 
prospects, management, market prices of similar securities of comparable 
publicly-traded companies, certain financial and operating information of 
companies engaged in activities similar to those of the Company and the 
general condition of the securities markets. 

   Although it has no obligation to do so, the Underwriter intends to engage 
in market-making activities or solicited brokerage activities with respect to 
the purchase or sale of the Preferred Stock and Warrants in The Nasdaq 
SmallCap Market or other over-the-counter market where such securities may 
trade. However, no assurance can be given that the Underwriter will continue 
to participate as a market maker for the securities of the Company or that 
other broker/dealers will make a market in such securities. The Underwriter 
has the right to act as the Company's exclusive agent in connection with any 
future solicitation of holders of the Warrants to exercise their Warrants. 
Unless granted an exemption by the Securities and Exchange Commission from 
Rule 10b-6 under the Exchange Act, the Underwriter will be prohibited from 
engaging in any market-making activities or solicited brokerage activities 
with regard to the Company's securities during a period prescribed by Rule 
10b-6 before the solicitation of the exercise of any Warrant until the later 
of the termination of such solicitation activity or the termination by waiver 
or otherwise of any right the Underwriter may have to receive a fee for the 
exercise of the Warrants following such solicitation. As a result, the 
Underwriter and soliciting broker/dealers may be unable to continue to make a 
market for the Company's securities during certain periods while the Warrants 
are exercisable. Such a limitation, while in effect, could impair the 
liquidity and market prices of the Company's securities. 

   While certain of the officers of the Underwriter have significant 
experience in corporate financing and the underwriting of securities, the 
Underwriter has previously underwritten only three public offerings. 
Accordingly, there can be no assurance that the Underwriter's limited public 
offering experience will not affect the Company's offering of the Preferred 
Stock and Warrants and subsequent development of a trading market, if any. 

   The Underwriter has become aware that there is a formal order of 
investigation by the Commission relating to the Underwriter's trading 
practices and mark-ups in connection with securities of a corporation whose 
January 1995 public offering was underwritten by the Underwriter. Since the 
issuance of the formal order in June 1996, no charges have been brought. The 
Underwriter believes that it has violated no laws or regulations in 
connection with this matter. The Underwriter intends to vigorously defend 
itself against any claims which may be asserted by the Commission, but there 
can be no assurance that the pendency of the investigation or any proceeding 
which may thereafter be instituted or any remedies granted in connection 
therewith would not adversely and materially affect this offering or 
subsequent trading in the Preferred Stock, the Warrants and/or the Common 
Stock of the Company. 

                                LEGAL MATTERS 

   Certain legal matters in connection with the securities being offered 
hereby will be passed upon for the Company by Parker Duryee Rosoff & Haft, 
New York, New York. Zimet, Haines, Friedman & Kaplan, New York, New York, has 
served as counsel for the Underwriter in connection with this offering. 

                                   EXPERTS 

   
   The consolidated financial statements of the Company as of April 30, 1996 
and for each of the two years in the period ended April 30, 1996 included in 
this Prospectus, have been audited by Urbach Kahn & Werlin PC, independent 
certified public accountants, and are included herein and in the Registration 
Statement in reliance upon such reports given upon the authority of said firm 
as experts in auditing and accounting. 
    

                                      39 
<PAGE>

                                   GLOSSARY 

   ATM -- Abbreviation for automated teller machine. Computers that perform 
banking transactions without human intervention. 

   C Programming language -- One of several computer languages that tells a 
computer what functions to perform. 

   Cirrus -- A national ATM Network owned by Mastercard 

   Configuration -- The process of entering data specific to the customer's 
needs and requests. 

   Credit Card -- A card issued by a financial institution or credit 
provider. A sum corresponding to a purchase is charged to the cardholder's 
account. The customer may elect to pay in full each month or revolve the 
balance with a rate of interest fixed by a bank or credit provider. 

   Debit Card -- Generally any payment card, issued by a financial 
institution, the use of which results in a debit to the cardholder's account 
often within a few seconds of the purchase (online). 

   Fault Tolerance -- When duplicate computer hardware and/or software are 
used to provide computer processing. 

   Interface -- The communication between two systems that allow them to 
exchange information. 

   Issuer -- A financial institution that provides cards to its customers. 

   MAC -- An EFT Network of United States banks, primarily located in the 
mid-Atlantic region. 

   Module -- A group of software commands that perform a specific function. 

   
   Network -- Generally owned by a group of banks or non-bank entities. 
Networks may vary in size and configuration. A Network generates revenue by 
charging fees for use of the Network for transaction processing. 
    

   NYCE -- An EFT Network of United States banks, primarily located in the 
Northeast. 

   Object oriented design concepts -- Advanced software development technique 
for developing software applications. 

   Open System -- Computers that can run on various operating systems, as 
well as utilize several different types of software programs. 

   Oracle relational database -- Software, developed and distributed by 
Oracle Corporation, that permits access to data from multiple sources and 
then transforms such data into information that can be used for a specific 
purpose. Oracle 7 is the current release which runs with TPII software 
products. 

   PLUS -- A national ATM Network owned by VISA. 

   POS -- Abbreviation for point of sale. POS terminals are generally used in 
retail outlets to process debit and credit card transactions. 

   Proprietary (legacy) system -- Systems that are vendor specific and do not 
conform to software and hardware industry standards. 

   Smart Cards -- A smart card is a plastic card which contains an electronic 
chip. This can be a memory chip with a programmable logic array, or a 
microprocessor chip. There are two types of smart card, rechargeable or 
non-rechargeable. Rechargeable smart cards are normally microprocessor smart 
cards which may also serve as traditional credit or debit cards, except 
instead of a magnetic stripe they have a microprocessor chip embedded in the 
card. A non-rechargeable or disposable smart card is typically a memory smart 
card with a logical security mechanism or a programmable logical array; the 
most popular use for this card is by public telephone networks. 

   Switch -- EFT Systems designed to link together multiple hosts of 
financial institutions and multiple Network systems. 

   UNIX operating system -- Software, originally developed by AT&T's Bell 
Laboratories in 1969, that acts as the primary interface to the physical 
components of a computer by controlling the operation of such components. 

                                      40 
<PAGE>

                    IFS INTERNATIONAL, INC. AND SUBSIDIARY 

                  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS 

<TABLE>
<CAPTION>
                                                                       Page 
                                                                      -------- 
<S>                                                                   <C>
INDEPENDENT AUDITOR'S REPORT  ....................                      F-2 

CONSOLIDATED FINANCIAL STATEMENTS 
     Balance sheets  .............................                      F-3 
     Statements of operations  ...................                      F-4 
     Statements of shareholders' equity (deficit)                       F-5 
     Statements of cash flows  ...................                      F-6 
     Notes to consolidated financial statements  .                      F-8 

</TABLE>





                                     F-1 
<PAGE>

                         INDEPENDENT AUDITOR'S REPORT 

To the Board of Directors and Shareholders 
IFS International, Inc. 

We have audited the accompanying consolidated balance sheet of IFS 
International, Inc. and subsidiary as of April 30, 1996, and the related 
consolidated statements of operations, shareholders' equity (deficit), and 
cash flows for each of the two years in the period ended April 30, 1996. 
These financial statements are the responsibility of the Company's 
management. Our responsibility is to express an opinion on these financial 
statements based on our audits. 

We conducted our audits in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement. An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements. 
An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall 
financial statement presentation. We believe that our audits provide a 
reasonable basis for our opinion. 

In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the financial position of IFS 
International, Inc. and subsidiary at April 30, 1996, and the results of 
their operations and their cash flows for each of the two years in the period 
ended April 30, 1996, in conformity with generally accepted accounting 
principles. 

   
The consolidated financial statements referred to above have been prepared 
assuming that IFS International, Inc. and subsidiary will continue as a going 
concern. As discussed in Note 14 to the consolidated financial statements, 
the Company has a working capital deficiency and a shareholders' deficit at 
April 30, 1996, that raise substantial doubt about the Company's ability to 
continue as a going concern. Management's plans in regard to these matters 
are also described in Note 14. The consolidated financial statements do not 
include any adjustments that might result from the outcome of this 
uncertainty. 
                                                       URBACH KAHN & WERLIN PC 
Albany, New York 
July 17, 1996, except for the second paragraph of 
  Note 14, for which the date is August 6, 1996 and 
  Note 15, for which the date is January 6, 1997. 
    

                                     F-2 
<PAGE>

   
                    IFS INTERNATIONAL, INC. AND SUBSIDIARY 

                         CONSOLIDATED BALANCE SHEETS 
               APRIL 30, 1996 AND OCTOBER 31, 1996 (UNAUDITED) 
    

<TABLE>
<CAPTION>
                                                                                         October 31, 
                                                                         April 30,          1996 
                                                                           1996          (Unaudited) 
                                                                       -------------   --------------- 
<S>                                                                    <C>             <C>
                                                ASSETS 
CURRENT ASSETS 
     Cash  .........................................................    $   137,462      $    596,504 
     Trade accounts receivable, net of allowance for doubtful 
        accounts of $7,900 .........................................        144,669          399,752 
     Other receivables  ............................................         42,519           22,810 
     Costs and estimated earnings in excess of billings on 
        uncompleted contracts ......................................        432,173          301,077 
     Prepaid expenses and other current assets  ....................         27,549           72,442 
                                                                       -------------   --------------- 
          Total current assets  ....................................        784,372        1,392,585 
                                                                       -------------   --------------- 
PROPERTY, EQUIPMENT, AND IMPROVEMENTS, net  ........................        136,231          182,181 
                                                                       -------------   --------------- 
OTHER ASSETS 
     Software license  .............................................          9,082            7,883 
     Capitalized software costs, net  ..............................        377,482          425,067 
     Deferred offering costs  ......................................             --           62,021 
                                                                       -------------   --------------- 
          Total other assets  ......................................        386,564          494,971 
                                                                       -------------   --------------- 
                                                                        $ 1,307,167      $  2,069,737 
                                                                       =============   =============== 
                                 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) 
CURRENT LIABILITIES 
     Notes payable  ................................................    $        --      $   500,000 
     Current maturities of long-term debt  .........................         38,329           48,886 
     Current portion of capital lease obligations  .................          2,733               -- 
     Accounts payable and other liabilities  .......................        587,170          265,138 
     Accrued salary, commissions, and other expenses  ..............        702,515          823,236 
     Billings in excess of costs and estimated earnings on 
        uncompleted contracts ......................................         32,524          354,705 
     Deferred revenue and customer deposits  .......................        219,326          275,065 
                                                                       -------------   --------------- 
          Total current liabilities  ...............................      1,582,597        2,267,030 
                                                                       -------------   --------------- 
LONG-TERM LIABILITIES 
     Long-term debt, less current maturities  ......................        439,831          423,879 
     Other  ........................................................         12,515           12,515 
                                                                       -------------   --------------- 
          Total long-term liabilities  .............................        452,346          436,394 
                                                                       -------------   --------------- 
COMMITMENTS AND CONTINGENCIES 
SHAREHOLDERS' EQUITY (DEFICIT) 
     Preferred stock, $.001 par value; 25,000,000 shares 
        authorized, no shares issued or outstanding ................             --               -- 
     Common stock $.001 par value; 25,000,000 shares authorized, 
        1,009,361 and 1,059,730 shares issued and outstanding ......          1,010            1,060 
     Additional paid-in capital  ...................................      2,177,611        2,219,598 
     Accumulated deficit  ..........................................     (2,906,397)      (2,854,345) 
                                                                       -------------   --------------- 
          Total shareholders' equity (deficit)  ....................       (727,776)        (633,687) 
                                                                       -------------   --------------- 
                                                                        $ 1,307,167      $ 2,069,737 
                                                                       =============   =============== 
</TABLE>

               See notes to consolidated financial statements. 

                                     F-3 
<PAGE>

   
                    IFS INTERNATIONAL, INC. AND SUBSIDIARY 

                    CONSOLIDATED STATEMENTS OF OPERATIONS 
                   YEARS ENDED APRIL 30, 1996 AND 1995 AND 
            SIX MONTHS ENDED OCTOBER 31, 1996 AND 1995 (UNAUDITED) 
    

<TABLE>
<CAPTION>
                                                                                          Six Months Ended 
                                                            Year Ended                       October 31 
                                                             April 30                       (Unaudited) 
                                                  ------------------------------   ------------------------------ 
                                                       1996            1995             1996            1995 
                                                   -------------   -------------    -------------   ------------- 
<S>                                               <C>              <C>              <C>             <C>
Revenues: 
     Software license and installation contract 
        fees ...................................    $1,982,192      $1,729,284       $1,131,931      $ 455,239 
     Hardware sales  ...........................        45,848          31,893          127,884         35,248 
     Service and maintenance revenue  ..........       412,743         280,080          327,170        204,238 
                                                   -------------   -------------    -------------   ------------- 
                                                     2,440,783       2,041,257        1,586,985        694,725 
                                                   -------------   -------------    -------------   ------------- 
Cost of software license and installation 
   contract fees ...............................       238,130         213,885          171,878         52,818 
Cost of hardware sales  ........................        16,611          23,232          105,359         12,710 
Cost of service and maintenance revenue  .......       250,020         108,659          110,482         97,809 
                                                   -------------   -------------    -------------   ------------- 
                                                       504,761         345,776          387,719        163,337 
                                                   -------------   -------------    -------------   ------------- 
Gross profit  ..................................     1,936,022       1,695,481        1,199,266        531,388 
                                                   -------------   -------------    -------------   ------------- 
Operating expenses: 
     Research and development  .................       397,976         276,026          241,134        235,092 
     Salaries  .................................       679,271         770,352          358,226        320,295 
     Other  ....................................        22,727          19,854           12,227         10,878 
     Rent  .....................................        88,405         109,041           62,435         42,914 
     Selling, general, and administrative  .....       745,273         681,356          346,801        312,431 
                                                   -------------   -------------    -------------   ------------- 
                                                     1,933,652       1,856,629        1,020,823        921,610 
                                                   -------------   -------------    -------------   ------------- 
Income (loss) from operations  .................         2,370        (161,148)         178,443       (390,222) 
Other income (expense): 
     Litigation settlement costs  ..............            --              --         (100,000)            -- 
     Interest expense  .........................       (52,453)        (53,608)         (29,267)       (26,701) 
     Other income  .............................         1,703           9,284            2,875          2,598 
                                                   -------------   -------------    -------------   ------------- 
Income (loss) before income taxes and 
   extraordinary item ..........................       (48,380)       (205,472)          52,051       (414,325) 
Provision for income taxes  ....................            --              --               --             -- 
                                                   -------------   -------------    -------------   ------------- 
Income (loss) before extraordinary item  .......       (48,380)       (205,472)          52,051       (414,325) 
Extraordinary item - gain on debt restructuring 
   and extinguishments .........................            --         377,687               --             -- 
                                                   -------------   -------------    -------------   ------------- 
Net income (loss)  .............................    $  (48,380)     $  172,215       $   52,051      $(414,325) 
                                                   =============   =============    =============   ============= 
Attributable to common shares: 
     Income (loss) before extraordinary item  ..    $    (0.05)     $    (0.21)      $      0.04     $   (0.41) 
     Extraordinary item  .......................          0.00            0.39              0.00          0.00 
                                                   -------------   -------------    -------------   ------------- 
Net income (loss) per common share  ............    $    (0.05)     $     0.18       $      0.04     $   (0.41) 
                                                   =============   =============    =============   ============= 

</TABLE>

               See notes to consolidated financial statements. 

                                     F-4 
<PAGE>

   
                    IFS INTERNATIONAL, INC. AND SUBSIDIARY 

          CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) 
                   YEARS ENDED APRIL 30, 1996 AND 1995 AND 
                SIX MONTHS ENDED OCTOBER 31, 1996 (UNAUDITED) 
    

<TABLE>
<CAPTION>
                                           Common Stock            
                                    --------------------------    Additional 
                                        Shares          Par         Paid-in        Accumulated 
                                      Outstanding      Value        Capital          Deficit           Total 
                                     -------------   ---------    -------------   --------------   -------------- 
<S>                                 <C>              <C>          <C>             <C>              <C>
Balances at April 30, 1994  ......       921,287      $  922       $1,887,110      $(3,030,232)     $(1,142,200) 
Issuance of common stock  ........        71,388          71          137,469               --          137,540 
Net income  ......................            --          --               --          172,215          172,215 
                                     -------------   ---------    -------------   --------------   -------------- 
Balances at April 30, 1995  ......       992,675         993        2,024,579       (2,858,017)        (832,445) 
Issuance of common stock  ........        16,686          17          153,032               --          153,049 
Net loss  ........................            --          --               --          (48,380)         (48,380) 
                                     -------------   ---------    -------------   --------------   -------------- 
Balances at April 30, 1996  ......     1,009,361       1,010        2,177,611       (2,906,397)        (727,776) 
Issuance of common stock 
  (unaudited) ....................        50,369          50           36,987               --           37,037 
Issuance of common stock warrants 
  (unaudited) ....................            --          --            5,000               --            5,000 
Net income (unaudited)  ..........            --          --               --           52,052           52,052 
                                     -------------   ---------    -------------   --------------   -------------- 
Balances at October 31, 1996 
  (unaudited) ....................     1,059,730      $1,060       $2,219,598      $(2,854,345)     $   (633,687) 
                                     =============   =========    =============   ==============   ============== 

</TABLE>

               See notes to consolidated financial statements. 

                                     F-5 
<PAGE>

   
                    IFS INTERNATIONAL, INC. AND SUBSIDIARY 

                    CONSOLIDATED STATEMENTS OF CASH FLOWS 
                   YEARS ENDED APRIL 30, 1996 AND 1995 AND 
            SIX MONTHS ENDED OCTOBER 31, 1996 AND 1995 (UNAUDITED) 
    

<TABLE>
<CAPTION>
                                                                                       Six Months Ended 
                                                             Year Ended                   October 31 
                                                              April 30                    (Unaudited) 
                                                    ---------------------------   --------------------------- 
                                                         1996          1995           1996          1995 
                                                     ------------   -----------    -----------   ------------ 
<S>             <C>                                                 <C>            <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES 
   Net income (loss) .............................    $ (48,380)     $ 172,215     $  52,051      $(414,325) 
   Adjustments to reconcile net income (loss) to 
     net cash provided by operating activities: 
     Depreciation and amortization  ..............      205,015        164,969       134,302         97,115 
     Extraordinary gain on debt restructuring and 
        extinguishments ..........................           --       (377,687)           --             -- 
     Changes in: 
        Trade accounts receivable, net ...........      202,530       (105,169)     (255,081)       202,099 
        Other receivables ........................       (7,226)       (27,553)       19,709         23,801 
        Costs, estimated earnings and billings on 
          uncompleted contracts  .................     (179,770)        17,973       453,277        328,057 
        Other current assets .....................       (5,876)         1,057       (44,893)       (15,883) 
        Accounts payable and other liabilities ...      143,790         64,497      (322,032)         1,368 
        Accrued salary, commissions, and expenses       112,475        199,342       120,721         35,406 
        Deferred revenue and customer deposits ...       47,288         58,078        55,739        (47,839) 
        Other liabilities ........................           --         (4,210)           --             -- 
                                                     ------------   -----------    -----------   ------------ 
          Net cash provided by operating 
             activities ..........................      469,846        163,512       213,793        209,799 
                                                     ------------   -----------    -----------   ------------ 
CASH FLOWS FROM INVESTING ACTIVITIES 
   Purchase of equipment .........................      (62,537)       (42,534)      (71,989)       (17,867) 
   Capitalized license costs .....................       (2,157)        (2,635)         (666)        (2,158) 
   Capitalized software costs ....................     (160,117)      (151,662)     (153,983)       (78,480) 
                                                     ------------   -----------    -----------   ------------ 
          Net cash used in investing activities  .     (224,811)      (196,831)     (226,638)       (98,505) 
                                                     ------------   -----------    -----------   ------------ 
CASH FLOWS FROM FINANCING ACTIVITIES 
   Payments on capital lease obligations .........      (15,081)       (14,056)       (2,733)        (6,189) 
   Principal payments on long-term debt ..........     (103,624)       (63,228)       (5,395)       (99,693) 
   Proceeds from short-term borrowing ............           --             --       500,000             -- 
   Deferred offering costs .......................           --             --       (62,021)            -- 
   Proceeds from issuance of stock ...............        3,049         65,666        37,036             -- 
   Proceeds from issuance of warrants ............           --             --         5,000             -- 
                                                     ------------   -----------    -----------   ------------ 
          Net cash provided by (used in) 
             financing activities ................     (115,656)       (11,618)      471,887       (105,882) 
                                                     ------------   -----------    -----------   ------------ 
Increase/(decrease) in cash  .....................      129,379        (44,937)      459,042          5,412 
Cash: 
   Beginning of year .............................        8,083         53,020       137,462          8,083 
                                                     ------------   -----------    -----------   ------------ 
   End of period .................................    $ 137,462      $   8,083     $ 596,504      $  13,495 
                                                     ============   ===========    ===========   ============ 
</TABLE>

                See notes to consolidated financial statements.

                                     F-6 
<PAGE>

   
                    IFS INTERNATIONAL, INC. AND SUBSIDIARY 

               CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED 
                   YEARS ENDED APRIL 30, 1996 AND 1995 AND 
            SIX MONTHS ENDED OCTOBER 31, 1996 AND 1995 (UNAUDITED) 
    

<TABLE>
<CAPTION>
                                                                                 Six Months Ended 
                                                          Year Ended                October 31 
                                                           April 30                 (Unaudited) 
                                                  --------------------------   --------------------- 
                                                      1996          1995          1996       1995 
                                                   -----------   -----------    ---------   -------- 
<S>                                               <C>            <C>            <C>         <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW 
  INFORMATION 
     Cash paid during the period for: 
        Interest ...............................    $ 29,042      $ 50,167      $40,239     $2,319 
                                                   ===========   ===========    =========   ======== 
        Income taxes ...........................    $  7,476      $     --      $    --     $   -- 
                                                   ===========   ===========    =========   ======== 
SUPPLEMENTAL DISCLOSURES OF 
   NON-CASH INVESTING AND FINANCING TRANSACTIONS 
     Notes payable, salary obligations, and 
        accounts payable restructured and/or 
        extinguished ...........................    $     --      $377,687      $    --     $   -- 
                                                   ===========   ===========    =========   ======== 
     Long-term debt converted to common stock 
        (150,000 shares in 1996, 259,673 in 
        1995) ..................................    $150,000      $ 71,875      $    --     $   -- 
                                                   ===========   ===========    =========   ======== 

</TABLE>

               See notes to consolidated financial statements. 

                                     F-7 
<PAGE>

                    IFS INTERNATIONAL, INC. AND SUBSIDIARY 

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

                                APRIL 30, 1996 

NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES 

ORGANIZATION AND DESCRIPTION OF BUSINESS 

   IFS International, Inc. was incorporated in Delaware in September 1986 
under the name Wellsway Ventures, Inc. The Company was formed with limited 
assets as a blind pool to obtain proceeds from a public offering and then to 
acquire an existing business entity. The Company utilized proceeds from the 
blind pool to acquire its operating subsidiary, IFS International, Inc., a 
New York corporation. 

   IFS International, Inc. is engaged in the design and development of 
computer software for use with automatic teller machines (ATMs), electronic 
fund transfers (EFTs), and point of sale (POS) systems used by financial 
institutions and retailers. The Company also provides its customers with 
support and maintenance services for such systems. 

   Commencing in 1993, a significant portion of the Company's sales and 
revenues were derived from financial institutions and other customers located 
outside of the United States (see Note 12). The Company extends credit to its 
customers and generally requires deposits upon execution of software 
development contracts. With respect to foreign customers, collection may be 
more difficult upon default. 

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

PRINCIPLES OF CONSOLIDATION: 

   The consolidated financial statements include the accounts of IFS 
International, Inc. (formerly Wellsway Ventures, Inc.) and its wholly-owned 
subsidiary, IFS International, Inc. (formerly Avant-Garde Computer Systems, 
Inc.). All significant intercompany accounts and transactions have been 
eliminated. 

PRESENTATION OF INTERIM FINANCIAL STATEMENTS: 

   
   The accompanying unaudited consolidated financial statements include all 
adjustments which management believes necessary for a fair presentation of 
the Company's financial position at October 31, 1996, and the results of its 
operations and its cash flows for the six months ended October 31, 1996 and 
1995. All adjustments are of a normal recurring nature. 
    

USE OF ESTIMATES: 

   The preparation of financial statements in conformity with generally 
accepted accounting principles requires management to make estimates and 
assumptions that affect the reported amounts of assets and liabilities and 
disclosure of contingent assets and liabilities at the date of the financial 
statements and reported amounts of revenue and expenses during the reporting 
period. Actual results could differ from those estimates. 

REVENUE RECOGNITION: 

   
   Revenue from software installation contracts is recognized on the 
percentage-of-completion method, measured by the ratio of costs incurred to 
date to management's estimates of total anticipated costs. This method is 
used because management considers costs incurred to be the best available 
measure of progress on software installation contracts. Because of the 
inherent uncertainties in estimating contracts, it is at least reasonably 
possible that the Company's estimates of costs and revenues will change in 
the near term. Uncertainty inherent in initial estimates is reduced 
progressively as work on the contract nears completion. Deposits received in 
advance for hardware sales are deferred and recognized as revenue upon 
installation and acceptance of the system. Amounts received on service 
contracts are initially deferred and recognized ratably over the life of the 
contract, generally one year. All revenues derived outside of the United 
States are received in U.S. dollars. 
    

                                     F-8 
<PAGE>

          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  - (Continued) 

Note 1. Organization and Significant Accounting Policies  - (Continued) 

ALLOWANCE FOR DOUBTFUL ACCOUNTS: 

   Bad debts are provided for on the allowance method based upon historical 
experience and management's estimation of collection losses on outstanding 
accounts receivable. 

PROPERTY, EQUIPMENT AND IMPROVEMENTS: 

   Property, equipment and improvements are stated at cost, with related 
depreciation provided by the declining-balance and straight-line methods over 
the estimated useful lives of the related assets, generally five years. For 
income tax purposes, the accelerated cost recovery system and the modified 
accelerated cost recovery system are utilized. Assets recorded under capital 
leases are depreciated over the terms of the lease under methods which are 
consistent with the Company's depreciation policy for owned assets. 

CAPITALIZED SOFTWARE COSTS: 

   The cost of adding new functions and features (i.e., enhancements) to 
existing systems and the cost of development of new systems, for which 
technological feasibility has been established and which are not covered by 
outside funding, are capitalized. Costs incurred in the establishment of 
technological feasibility of new systems are expensed as incurred. 

   Capitalized software costs are reported at the lower of unamortized cost 
or net realizable value. Amortization is recorded over the estimated 
five-year marketing lives of the software and is computed on the greater of 
the percent-of-revenue method, based on the total estimated future revenues 
expected to be derived from sales of the software, or the straight-line 
method. 

INCOME TAXES: 

   Current or deferred tax liabilities are recognized for the tax 
consequences of all events recognized in the financial statements. Deferred 
taxes are computed on the differences between the financial reporting and the 
tax reporting basis of assets and liabilities. The Company has not recognized 
the benefit of any net operating loss carryforwards due to the uncertainty of 
the realizability of such carryforwards. 

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHARES: 

   Net income (loss) attributable to common shares is based on the weighted 
average number of shares, as adjusted to reflect a 1 for 10 reverse split 
(Note 15), outstanding during the respective years (approximately 1,002,000 
in 1996 and 953,000 in 1995). The effect of the assumed exercise of options 
and warrants outstanding is anti-dilutive or not material. 

NOTE 2. COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS 

   Costs and estimated earnings on uncompleted contracts are summarized as 
follows: 

<TABLE>
<CAPTION>
<S>                                                                <C>
Expenditures on uncompleted contracts                              $  245,285 
Estimated earnings thereon  ...........                             1,546,947 
                                                                   ----------- 
                                                                    1,792,232 
Less billings to date  ................                             1,392,583 
                                                                   ----------- 
                                                                   $  399,649 
                                                                   =========== 

</TABLE>

                                     F-9 
<PAGE>

          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  - (Continued) 

Note 2. Costs and Estimated Earnings on Uncompleted Contracts  - (Continued) 

   Included in the accompanying balance sheet under the following captions: 

<TABLE>
<CAPTION>
<S>                                                                 <C>
Costs and estimated earnings in excess of billings on 
  uncompleted contracts ..............................              $432,173 
Billings in excess of costs and estimated earnings on 
  uncompleted contracts ..............................               (32,524) 
                                                                    ---------- 
                                                                    $399,649 
                                                                    ========== 

</TABLE>

NOTE 3. PROPERTY, EQUIPMENT AND IMPROVEMENTS 

   Property, equipment and improvements consist of the following: 
<TABLE>
<CAPTION>
<S>                                                                 <C>
Machinery and equipment  ..................                         $391,827 
Equipment under capital leases  ...........                           54,103 
Furniture and fixtures  ...................                           74,780 
Leasehold improvements  ...................                           17,046 
                                                                    ---------- 
                                                                     537,756 
Less accumulated depreciation  ............                          401,525 
                                                                    ---------- 
Property, equipment and improvements, net                           $136,231 
                                                                    ========== 

</TABLE>
   Amortization related to equipment under capital leases was $10,821 for the 
years ended April 30, 1996 and 1995, respectively. 

   Depreciation related to property, equipment, and improvements was $36,917 
and $28,528 for the years ended April 30, 1996 and 1995, respectively. 

NOTE 4. CAPITALIZED SOFTWARE COSTS 

   Capitalized software costs consist of the following: 
<TABLE>
<CAPTION>
<S>                                                                <C>
Capitalized software costs  ...................................    $ 848,878 
Less accumulated amortization .................................     (471,396) 
                                                                   ----------- 
                                                                   $ 377,482 
                                                                   =========== 

</TABLE>
   
   Amortization expense approximated $154,000 and $123,000 for the years 
ended April 30, 1996 and 1995, respectively. 
    

NOTE 5. LONG-TERM DEBT 

   Long-term debt consists of the following: 
<TABLE>
<CAPTION>
<S>                                                                 <C>
Restructured note payable, government agency, 
  interest only payments of $1,375 per month through 
  April 1996 and principal and interest payments of 
  $3,804 per month, thereafter, including interest 
  at 7.5%, due April 2002. This note is unsecured 
  and subordinated to all other debt. ...........................   $220,000 

</TABLE>

                                     F-10 
<PAGE>

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  - (Continued) 

  Note 5. Long-Term Debt  - (Continued) 

<TABLE>
<CAPTION>
<S>                                                                 <C>
 Restructured convertible subordinated debentures 
  payable to a governmental agency due in 
  installments of $80,000, $80,000, and $90,000 in 
  April 1998, 1999, and 2000, respectively. 
  Interest is payable quarterly at 7.5%. The 
  debentures are convertible into shares of common 
  stock at rates ranging from $4.20 per share to 
  $5.70 per share through July, 1997. At April 30, 
  1996, approximately 59,000 shares of common 
  stock were issuable under this conversion 
  feature. .......................................                   250,000 
Other  ...........................................                     8,160 
                                                                    ---------- 
                                                                     478,160 
Less current portion  ............................                    38,329 
                                                                    ---------- 
                                                                    $439,831 
                                                                    ---------- 

</TABLE>

   Certain of the Company's long-term debt obligations require compliance 
with financial and non-financial covenants. As of April 30, 1996, the Company 
was not in compliance with several of these requirements, however, covenant 
violation waivers have been received. 

   Aggregate maturities of long-term debt are as follows: 

<TABLE>
<CAPTION>
 Year Ending April 30 
 -------------------- 
 <S>                                                                 <C>
     1997  ...................................................      $ 38,329 
     1998  ...................................................       112,511 
     1999  ...................................................       115,035 
     2000  ...................................................       127,755 
     2001  ...................................................        40,686 
     Thereafter  .............................................        43,844 
                                                                    ---------- 
                                                                    $478,160 
                                                                    ========== 

</TABLE>

NOTE 6. CAPITAL LEASE OBLIGATIONS 

   The Company is the lessee of computer equipment and a telephone system 
under capital leases expiring in various years through 1997. The assets and 
liabilities under capital leases are recorded at the lower of the present 
value of the minimum lease payment or the fair value of the asset. The assets 
are depreciated/amortized over the lesser of their related lease terms or 
their estimated productive lives. 

   Assets recorded under capital leases include the following: 

<TABLE>
<CAPTION>
<S>                                                                    <C>
Computer and telephone equipment  .................................   $54,103 
Accumulated depreciation  .........................................    43,589 
                                                                     --------- 
  Net capitalized computer and telephone 
     equipment ....................................................   $10,514 
                                                                     ========= 

</TABLE>

   Minimum future lease payments under capital leases as of April 30, 1996, 
are not material. 

                                     F-11 
<PAGE>

          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  - (Continued) 

NOTE 7. OPERATING LEASE COMMITMENTS 

   The Company has operating lease agreements, which begin to expire October 
1997, for the rental of its operating facilities and an automobile. Future 
minimum lease payments on these noncancellable operating lease arrangements 
with terms in excess of one year are as follows: 

<TABLE>
<CAPTION>
 Year Ending April 30 
 -------------------- 
 <S>                                                                <C>
     1997  .....................................................    $138,403 
     1998  .....................................................      90,180 
     1999  .....................................................      85,935 
     2000  .....................................................      21,548 
                                                                    ---------- 
                                                                    $336,066 
                                                                    ========== 

</TABLE>

NOTE 8. INCOME TAXES 

   The provision for income taxes for the years ended April 30, 1996 and 1995 
differs from the amount obtained by applying the U.S. federal income tax to 
pretax income due to the following: 

<TABLE>
<CAPTION>
                                                              1996          1995 
                                                           -----------   ----------- 
<S>                                                        <C>           <C>
Federal income tax benefit at statutory rates  .........    $(23,000)     $(80,100) 
State income tax benefit, net of federal benefits  .....      (3,400)      (10,200) 
Change in valuation allowance for net operating losses        26,400        90,300 
                                                           -----------   ----------- 
Provision for income taxes  ............................    $     --      $     -- 
                                                           ===========   =========== 

</TABLE>

   
   At April 30, 1996, the Company has net operating loss carryforwards of 
approximately $2,200,000, which begin to expire in 2004 to offset future 
federal taxable income. 
    

   Because of the uncertainty as to realizability, the deferred tax benefit 
attributable to net operating loss carryforwards at April 30, 1996 and 1995 
of approximately $816,000 and $790,000, respectively, has been offset by an 
equivalent valuation allowance. 

NOTE 9. STOCK OPTION PLAN 

   
   The Company has a stock option plan which provides for the granting of 
either options intended to qualify as "incentive stock options" under the 
Internal Revenue Code or "supplemental stock options" not intended to 
qualify. An aggregate of 332,779 shares of common stock have been reserved in 
this connection. The Board of Directors determines the exercise and 
expiration dates of the options which may not be later than 10 years from the 
date of the grant. The purchase prices of the shares under option must be at 
least equal to the fair market value of the common stock at the date of 
grant. Options outstanding at April 30, 1996, may be exercised at prices 
ranging from $.66 to $2.50 per share. At April 30, 1996, options to acquire 
50,896 common shares were available for future issuance. (See Note 15). 
    

                                     F-12 
<PAGE>

          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  - (Continued) 

Note 9. Stock Option Plan  - (Continued) 

   The following table summarizes option activity during 1996 and 1995: 

<TABLE>
<CAPTION>
                                                     Shares Under Option 
                                                     Year Ended April 30 
                                               ------------------------------ 
                                                  1996                 1995 
                                                ---------            --------- 
<S>                                            <C>                   <C>
Outstanding beginning of year  ......            269,212             260,115 
Granted  ............................             18,000              23,500 
Exercised ($1.00 to $2.50 per share)              (1,686)             (5,421) 
Canceled  ...........................             (3,742)             (8,983) 
                                                ---------            --------- 
Outstanding end of year  ............            281,884             269,212 
                                                =========            ========= 
Exercisable  ........................            257,077             246,128 
                                                =========            ========= 

</TABLE>

NOTE 10. CONTINGENCIES 

   In June 1989, the Company commenced an action against a software 
manufacturer, seeking various remedies in connection with an agreement which 
gave the Company certain rights to produce and market an application software 
package developed by the manufacturer. In July 1989, subsequent to the 
commencement of the action, the Company was named defendant in a lawsuit 
filed by the manufacturer alleging breach of contract and claiming 
approximately $5,000,000 in damages, interest, and costs and a permanent 
injunction, which, if granted, would restrain the Company from marketing 
certain computer applications. The Company vigorously contests the merits of 
the claim. (See Note 15) 

NOTE 11. RELATED PARTY TRANSACTIONS 

   Included in accrued salary, commissions and other expenses is 
approximately $197,000 due to officers/directors for accrued salary and 
commissions, including amounts earned in prior years, and related interest, 
calculated at 12%. Other long-term liabilities represent amounts due to 
officers/directors under a previous compensation plan. These balances earn 
interest at 12% which is included in accrued expenses. Included in accounts 
payable is approximately $73,000 due to officers/directors. 

NOTE 12. EXPORT SALES, MAJOR CUSTOMERS, CERTAIN CONCENTRATIONS 

   One foreign customer accounted for approximately 12% of total revenues for 
the year ended April 30, 1996. There were no outstanding amounts due from 
this customer at April 30, 1996. Another foreign customer accounted for 
approximately 12% of total revenues for the year ended April 30, 1995. 

   Total revenues considered export sales approximated $2,008,000 and 
$1,862,000, or 82% and 91%, for the years ended April 30, 1996 and 1995, 
respectively. Such revenues were derived primarily from customers located in 
eastern Europe and the Far East. 

   Approximately 14% and 19% of the Company's total revenues for the years 
ended April 30, 1996 and 1995, respectively, were derived pursuant to a 
relationship with one computer manufacturer. 

NOTE 13. FAIR VALUE OF FINANCIAL INSTRUMENTS 

   The fair value of the Company's financial instruments consisting 
principally of accounts receivable, long- term debt, accounts payable and 
accrued expenses has been estimated to approximate their carrying amounts. 

NOTE 14. MANAGEMENT PLANS 

   The accompanying financial statements have been prepared assuming that the 
Company will continue as a going concern and do not include any adjustments 
relating to the recoverability and classification of reported asset amounts 
or the amounts and classification of liabilities that might be necessary 
should the Company be unable to continue as a going concern. A substantial 
portion of the accumulated deficit at April 30, 1996 is 

                                     F-13 
<PAGE>

          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  - (Continued) 

Note 14. Management Plans  - (Continued) 

attributable to losses from operations in several consecutive fiscal years 
prior to 1993. These losses were principally attributable to the Company's 
then existing products becoming antiquated, the write off ($1,040,000) of 
software development costs in fiscal year 1991, and incurring the research 
and development costs associated with its latest software product, TPII. 

   Management believes that cash flows from operations will be sufficient to 
meet debt service requirements and to maintain a current status with its 
trade creditors during 1997. Operating cash flows for fiscal year 1997 are 
expected to be principally attributable to the anticipated revenues to be 
derived from sales of TPII and similar products. Further, in August 1996 the 
Company signed a letter of intent with an underwriter to effect a firm 
commitment equity offering with minimum gross proceeds of $5 million. There 
can be no assurances that the proposed offering will be successful. (See Note 
15) 

   In September 1995, the Company fully converted a note payable to common 
stock. Terms of other notes have been modified to delay or extend the 
repayment periods and in some cases forgive accrued interest. 

   As a result of the Company's efforts to enter joint marketing 
relationships, the Company signed a prime contracting agreement with Digital 
Equipment Corporation in 1994. This agreement has led to several sales for 
TPII. The Company has and will continue to market to distributors of Digital 
Equipment Corporation around the world. The Company has also entered into a 
re-licensing agreement with a Digital distributor, Prime Systems Plus, Inc. 
in the Philippines. 

NOTE 15. SUBSEQUENT EVENTS 

PUBLIC OFFERING: 

   
   The Company has filed a registration statement with the U.S. Securities 
and Exchange Commission in connection with a proposed public offering of 
1,200,000 shares of Series A Convertible Preferred Stock and 1,700,000 
Redeemable Series A Convertible Preferred Stock Purchase Warrants. The 
preferred stock will be convertible, at the option of the holder, into one 
share of the Company's common stock for a period of five years. Each warrant 
will entitle the holder to purchase one share of preferred stock for a period 
of three years. If successful, net proceeds from the offering will 
approximate $5,000,000. 
    

   In October and November 1996, in connection with the proposed public 
offering, the Company approved a 1 for 10 reverse common stock split, 
increased the number of preferred shares authorized to 25,000,000, and 
designated 20,000,000 of the preferred shares as Series A Convertible. Issued 
and outstanding shares of common stock and all share related and per share 
amounts have been restated to give retroactive effect to the split. 

   
   In September 1996, the Company borrowed $500,000 in bridge financing 
pursuant to a private placement. This debt bears interest at 12% and is due 
at the earlier of the closing of the proposed public offering or in March 
1998. The bridge financing lenders also acquired warrants to purchase 100,000 
shares of common stock at a price of $2.50 per share. 
    

CONTINGENCIES: 

   
   In December 1996, the litigation matters referred to in Note 10 were 
settled, resulting in the Company paying the software manufacturer $100,000. 

1996 STOCK OPTION PLAN: 

   In December 1996, the Board of Directors of the Company adopted a second 
stock option plan (the "1996 Plan") to provide for the granting of options 
which are intended to qualify either as "incentive stock options" under the 
Internal Revenue Code or "nonstatutory stock options" not intended to 
qualify. 300,000 shares of Common Stock have been reserved for issuance under 
the 1996 Plan which will be administered by the Board of Directors. The 1996 
Plan is subject to stockholder approval. 

                                      F-14
    
<PAGE>

   
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  - (Continued) 

Note 15. Subsequent Events  - (Continued) 

PURCHASE COMMITTMENT: 

   In December 1996, the Company entered into an agreement for the purchase 
of real estate. The agreement provides for deposits of $50,000 to be paid by 
the Company, with the balance of the purchase price ($945,000) due upon 
closing. The Company intends to renovate the real estate and ultimately house 
its operations at this location. A substantial portion of the purchase cost 
is expected to be financed through borrowing arrangements. 
    









                                      F-15
<PAGE>

============================================================================= 

No dealer, salesperson or other person has been authorized to give any 
information or make any representations other than those contained in this 
Prospectus and, if given or made, such information or representations must 
not be relied upon as having been authorized by the Underwriter. This 
Prospectus does not constitute an offer to sell or a solicitation of an offer 
to buy any securities, to any person in any jurisdiction where such offer or 
solicitation would be unlawful. Neither the delivery of this Prospectus nor 
any sale made hereunder shall under any circumstances create any implication 
that there has been no change in the affairs of the Company since the date 
hereof. 
                                    ------ 
                              TABLE OF CONTENTS 

<TABLE>
<CAPTION>
                                                                       Page 
                                                                      ------ 
<S>                                                                     <C>
Prospectus Summary  ................................................      3 
Risk Factors  .......................................................     7 
Use of Proceeds  ...................................................     13 
Price Range of Common Stock  .......................................     15 
Dividend Policy  ...................................................     15 
Capitalization  ....................................................     16 
Dilution  ..........................................................     17 
Selected Financial Data  ...........................................     18 
Management's Discussion and Analysis of 
  Financial Condition and Results of 
  Operation ........................................................     19 
Business  ..........................................................     22 
Management  ........................................................     30 
Principal Stockholders  ............................................     33 
Certain Transactions  ..............................................     33 
Description of Securities  .........................................     34 
Shares Eligible for Future Sale  ...................................     37 
Underwriting  ......................................................     37 
Legal Matters  .....................................................     39 
Experts  ...........................................................     39 
Glossary  ..........................................................     40 
Index to Financial Statements  .....................................    F-1 

</TABLE>

   
   Until      , 1997 (25 days after the date of this Prospectus), all dealers 
effecting transactions in the Company's securities, whether or not 
participating in this distribution, may be required to deliver a Prospectus. 
This is in addition to the obligation of dealers to deliver a Prospectus with 
respect to their unsold allotments or subscriptions. 
    

============================================================================= 
<PAGE>

============================================================================= 


                           IFS INTERNATIONAL, INC. 





                                     LOGO 

   
                         1,200,000 SHARES OF SERIES A 
                         CONVERTIBLE PREFERRED STOCK 


                        1,700,000 REDEEMABLE SERIES A 
                         CONVERTIBLE PREFERRED STOCK 
                              PURCHASE WARRANTS 



                                    ------ 
                                  PROSPECTUS 
                                    ------ 




                                    [LOGO] 




                               DUKE & CO., INC. 





                                       , 1997 
    

============================================================================= 

<PAGE>

   
             [ALTERNATE PAGE FOR SELLING STOCKHOLDER PROSPECTUS] 


            SUBJECT TO COMPLETION, DATE ____________________, 1997 
PROSPECTUS 
    

                           IFS INTERNATIONAL, INC. 
                        100,000 SHARES OF COMMON STOCK 

   This Prospectus relates to 100,000 shares (the "Selling Stockholders' 
Shares") of Common Stock, $.001 par value per share (the "Common Stock"), of 
IFS International, Inc. (the "Company"), which are being offered for sale by 
certain selling stockholders (the "Selling Stockholders"). The Selling 
Stockholders may not sell or otherwise dispose of any of such securities for 
a period of 12 months. See "Selling Stockholders and Plan of Distribution." 

   The Company will not receive any of the proceeds from the sales of the 
Selling Stockholders' Shares by the Selling Stockholders. The Selling 
Stockholders' Shares may be offered from time to time by the Selling 
Stockholders, their pledgees and/or their donees, through ordinary brokerage 
transactions in the over-the-counter market, in negotiated transactions or 
otherwise, at market prices prevailing at the time of sale at negotiated 
prices. 

   The Selling Stockholders, their pledgees and/or their donees, may be 
deemed to be "underwriters" as defined in the Securities Act of 1933, as 
amended (the "Securities Act"). If any broker-dealers are used by the Selling 
Stockholders, their pledgees and/or their donees, any commissions paid to 
broker-dealers and, if broker- dealers purchase any Selling Stockholders' 
Shares as principals, any profits received by such broker-dealers on the 
resale of the Selling Stockholders' Shares may be deemed to be underwriting 
discounts or commissions under the Securities Act. In addition, any profits 
realized by the Selling Stockholders, their pledgees and/or their donees, may 
be deemed to be underwriting commissions. All costs, expenses and fees in 
connection with the registration of the Selling Stockholders' Shares will be 
borne by the Company except for any commission paid to broker-dealers. 

   The Selling Stockholders' Shares offered by the Prospectus may be sold 
from time to time by the Selling Stockholders, their pledgees and/or their 
donees. No underwriting arrangements have been entered into by the Selling 
Stockholders. The distribution of the Selling Stockholders' Shares by the 
Selling Stockholders, their pledgees and/or their donees, may be effected in 
one or more transactions that may take place on the over-the- counter market, 
including ordinary broker's transactions, privately-negotiated transactions 
or through sales to one or more dealers for resale of such shares as 
principals, at market prices prevailing at the time of sale, at prices 
related to such prevailing market prices or negotiated prices. Usual and 
customary or specifically negotiated brokerage fees or commissions may be 
paid by the Selling Stockholders, their pledgees and/or their donees, in 
connection with sales of the Selling Stockholders' Shares. 

   
   On the date of this Prospectus, a registration statement under the 
Securities Act with respect to an underwritten public offering of 1,200,000 
shares of Series A Convertible Preferred Stock (the "Preferred Stock") and 
1,700,000 Redeemable Series A Convertible Preferred Stock Purchase Warrants 
(the "Warrants") was declared effective by the Securities and Exchange 
Commission. In connection with the offering of the Preferred Stock and 
Warrants, the Company granted Duke & Co., Inc., the underwriter of the public 
offering (the "Underwriter"), a warrant (the "Underwriter's Warrant") to 
purchase up to 120,000 shares of Preferred Stock and up to 170,000 Warrants. 
                                    ------ 
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" COMMENCING 
ON PAGE 7 HEREOF. 
    

   THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES 
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE 
SECURITIES AND EXCHANGE OR ANY STATE SECURITIES COMMISSION PASSED UPON THE 
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY 
IS A CRIMINAL OFFENSE. 

                                      
<PAGE>

             [ALTERNATE PAGE FOR SELLING STOCKHOLDER PROSPECTUS] 

                                 THE OFFERING 

<TABLE>
<CAPTION>
<S>                             <C>
Securities Registered (1)  ...  100,000 shares of Common Stock. See "Description of Securities" and "Selling 
                                Stockholders and Plan of Distribution." 
Risk Factors  ................  This offering involves a high degree of risk. See "Risk Factors." 

</TABLE>

- ------ 
(1) The 100,000 shares of Common Stock are issuable upon exercise of warrants 
    sold to the Selling Stockholders in a private offering. 

                                       
<PAGE>
             [ALTERNATE PAGE FOR SELLING STOCKHOLDER PROSPECTUS] 

                SELLING STOCKHOLDERS AND PLAN OF DISTRIBUTION 

   Upon the exercise of warrants sold to the Selling Stockholders in a 
private offering, the Selling Stockholders may resell up to 100,000 shares of 
Common Stock issuable upon exercise of such warrants pursuant to this 
Prospectus. See "Management's Discussion and Analysis of Financial Condition 
and Results of Operations -- Liquidity and Capital Resources." The Selling 
Stockholders have advised the Company that sales of the shares of Common 
Stock may be effected from time-to-time by themselves, their pledgees and/or 
their donees, in transactions (which may include block transactions) in the 
over-the-counter market, in negotiated transactions, through the writing of 
options on the Common Stock, or a combination of such methods of sale, at 
fixed prices that may be changed, at market prices prevailing at the time of 
sale, or at negotiated prices. The Selling Stockholders, their pledgees 
and/or their donees, may effect such transactions by selling Common Stock 
directly to purchasers or through broker-dealers that may act as agents or 
principals. Such broker-dealers may receive compensation in the form of 
discounts, concessions or commissions from the Selling Stockholder and/or the 
purchasers of shares of Common Stock for whom such broker-dealers may acts as 
agents or to whom they sell as principals, or both. 

   The Selling Stockholders, their pledgees and/or their donees, any 
broker-dealers that act in connection with the sale of the shares of Common 
Stock and Class A Warrants as principals may be deemed to be "underwriters" 
within the meaning of Section 2(11) of the Securities Act and any commissions 
received by them and any profit on the resale of the shares of Common Stock 
as principals might be deemed to be underwriting discounts and commissions 
under the Securities Act. The Selling Stockholders' Shares being registered 
on behalf of the Selling Stockholders are restricted securities while held by 
the Selling Stockholders and the resale of such securities by the Selling 
Stockholders is subject to prospectus delivery and other requirements of the 
Act. The Selling Stockholders, their pledgees and/or their donees, may agree 
to indemnify any agent, dealer or broker-dealer who participates in 
transactions involving sales of the shares of Common Stock against certain 
liabilities, including liabilities arising under the Securities Act. The 
Company will not receive any proceeds from the sales of the Selling 
Stockholders' Shares by the Selling Stockholders. Sales of the Selling 
Stockholders' shares by the Selling Stockholders, or even the potential of 
such sales, would likely have an adverse effect on the market price of the 
Company's securities. 

   At the time a particular offer of the securities is made by or on behalf 
of the Selling Stockholders, to the extent required, a prospectus supplement 
will be distributed which will set forth the number of shares being offered 
and the terms of the offering, including the name or names of any 
underwriters, dealers or agents, the purchase price paid by any underwriter 
for shares purchased from the selling stockholders and any discounts, 
commissions or concessions allowed or reallowed or paid to dealers, and the 
proposed selling price to the public. 

   Under the Securities Exchange Act of 1934, as amended (the "Exchange 
Act"), and the regulations thereto, any person engaged in distribution of 
Company securities offered by this prospectus may not simultaneously engage 
in market-making activities with respect to Company securities during the 
applicable "cooling off" period prior to the commencement of such 
distribution. In addition, and without limiting the foregoing, the Selling 
Stockholders will be subject to applicable provisions of the Exchange Act and 
the rules and regulations thereunder, including without limitation, Rules 
10b-6 and 10-b-7, in connection with transactions in the shares, which 
provisions may limit the timing of purchases and sales of the Company 
securities by the Selling Stockholders. 

                                     
<PAGE>
             [ALTERNATE PAGE FOR SELLING STOCKHOLDER PROSPECTUS] 

   The following table sets forth certain information with respect to persons 
for whom the Company is registering the Selling Stockholders' Shares for 
resale to the public. The Company will not receive any of the proceeds from 
the sale of the Selling Stockholders' Shares. Beneficial ownership of the 
Selling Stockholders' Shares by such Selling Stockholders after this offering 
will depend on the number of Selling Stockholders' Shares sold by each 
Selling Stockholder. The securities held by the Selling Stockholders are 
restricted securities while held by such Selling Stockholders and the resale 
of such securities by the Selling Stockholders is subject to prospectus 
delivery and other requirements of the Act. The Selling Stockholders' Shares 
offered by the Selling Stockholders are not being underwritten by the 
Underwriter. 

<TABLE>
<CAPTION>
                      
                                                                      Beneficial       
                            Beneficial         Total Number      Ownership After this  
   Selling              Ownership Prior to      of Shares       Offering if all Shares 
Stockholder(1)            this Offering      Being Registered          are Sold 
 --------------------   ------------------   ----------------    ---------------------- 
<S>                     <C>                  <C>                <C>
Twinvalley, Inc.  ...         65,000              65,000                   0 
Phil Lifschitz  .....         20,000              20,000                   0 
Roseann Wexler  .....         10,000              10,000                   0 
Wei Ying Wong  ......          5,000               5,000                   0 
                        ------------------   ----------------    ---------------------- 
Total  ..............        100,000             100,000                   0 
                        ==================   ================    ====================== 
</TABLE>

- ------ 
(1) None of such Selling Stockholders has had any material relationship with 
    the Company. 

                                     
<PAGE>

                                   PART II 
                    INFORMATION NOT REQUIRED IN PROSPECTUS 

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS 

   Article NINTH of the Certificate of Incorporation of IFS International, 
Inc. ("Registrant") provides that no director shall have any personal 
liability to Registrant or its stockholders for monetary damages for breach 
of fiduciary duty as a director, except with respect to (1) a breach of the 
director's duty of loyalty to Registrant or its stockholders, (2) acts or 
omissions not in good faith which involve intentional misconduct or a knowing 
violation of law, (3) liability under Section 174 of the Delaware General 
Corporation Law or (4) a transaction from which the director derived an 
improper personal benefit. Article TENTH of the Certificate of Incorporation 
of Registrant provides that Registrant shall indemnify, to the fullest extent 
permitted by Section 145 of the Delaware General Corporation Law, as amended 
from time to time, any and all persons whom it shall have power to indemnify 
under such section. 

   Reference is made to Section 6 of the Underwriting Agreement, which 
provides for indemnification of the officers and directors of Registrant 
under certain circumstances. 

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION 

   The following table sets forth various expenses, other than underwriting 
discounts, which will be incurred in connection with this offering. Other 
than the SEC registration fee, NASD filing fee and the non-accountable 
expense allowance of Duke & Co., Inc. (the "Underwriter"), amounts set forth 
below are estimates: 
than underwriting commissions and expenses, are estimated below. 
<TABLE>
<CAPTION>
     <S>                                                            <C>
     SEC registration fee  ....................                     $  6,456 
     NASD filing fee  .........................                        2,631 
     Underwriter's nonaccountable expense 
        allowance .............................                      185,100* 
     Nasdaq Stock Market listing fee  .........                       10,000 
     Boston Stock Exchange listing fee  .......                       10,000 
     Blue sky legal fees  .....................                       35,000 
     Printing and engraving expenses  .........                       75,000 
     Legal fees  ..............................                      125,000 
     Accounting fees  .........................                       25,000 
     Transfer and Warrant Agent fees  .........                        3,500 
     Miscellaneous expenses  ..................                       22,313 
                                                                    ---------- 
                                                                    $500,000 
                                                                    ========== 
</TABLE>
- ------ 
* Assumes no exercise of the Underwriter's over-allotment option. 

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES 

   The following sets forth information relating to all securities of 
Registrant sold within the past three years without registering the 
securities under the Securities Act of 1933, as amended (the "Securities 
Act"): 
   
   On November 22, 1994, Registrant issued an aggregate of 30,000 shares of 
Common Stock to two non- affiliated persons and 10,000 shares of Common Stock 
to Jerald Tishkoff, a director of Registrant, for an aggregate consideration 
$60,000, or $1.50 per share. 
    
   On June 15, 1994, Registrant issued 350 shares of Common Stock to a 
non-affiliate person pursuant to the exercise of options at $1.50 per share, 
or an aggregate of $525. 

   
   On July 13, 1994, Registrant issued 71 shares of Common Stock to a 
non-affiliate person pursuant to the exercise of options at $2.00 per share, 
or an aggregate of $142. 

   On February 6, 1995, Registrant issued 5,000 shares of Common Stock to a 
non-affiliate person pursuant to the exercise of options at $1.00 per share, 
or an aggregate of $5,000. 
    

                                      II-1
<PAGE>

   In June 1995, New York State Science and Technology Foundation converted 
$71,875 prinicpal amount of debentures into 25,967 shares of Common Stock. 

   On November 13, 1995, Registrant issued 15,000 shares of Common Stock to a 
non-affiliate upon conversion of a note payable in the amount of $150,000. 

   
   On January 11, 1996, Registrant issued 778 shares of Common Stock to a 
non-affiliate person pursuant to the exercise of options at $1.00 per share, 
or an aggregate of $778. 

   On March 12, 1996, Registrant issued 909 shares of Common Stock to a 
non-affiliate person pursuant to the exercise of options at $2.50 per share, 
or an aggregate of $2,272. 

   On June 25, 1996, Registrant issued 1,562 shares of Common Stock to a 
non-affiliate person pursuant to the exercise of options at $2.00 per share, 
or an aggregate of $3,124. 

   On July 23, 1996, Registrant issued 22,401 shares of Common Stock to a 
non-affiliate person pursuant to the exercise of options at $.66 per share, 
or an aggregate of $14,785. 

   On July 24, 1996, Registrant issued 26,405 shares of Common Stock to 
Seymour Pearlman, a former director of Registrant, pursuant to the exercise 
of options at $.66 per share, or an aggregate of $17,428. 
    

   On September 25, 1996, Registrant issued warrants to purchase an aggregate 
of 100,000 shares of Common Stock at $2.50 per share, subject to adjustments, 
to four non-affiliated persons for an aggregate consideration of $5,000, or 
$.05 per warrant. 

   On November 26, 1996, Registrant issued 2,000 shares of Common Stock to a 
non-affiliate person pur- suant to the exercise of options at $2.00 per 
share, or an aggregate of $4,000. 

   On December 16, 1996, Registrant issued 393 shares of Common Stock to a 
non-affiliate person pursuant to the exercise of options at $2.00 per share, 
or an aggregate of $786. 

   
   On December 23, 1996, Registrant issued 286 shares of Common Stock to a 
non-affiliate person pursuant to the exercise of options at $1.50 per share, 
or an aggregate of $429. 
    

   Exemption from registration under the Securities Act is claimed for the 
sales of Common Stock referred to above in reliance upon the exemption 
afforded by Section 4(2) of the Securities Act for transactions not involving 
a public offering. Each certificate evidencing such shares of Common Stock 
bears an appropriate restrictive legend. None of these sales involved 
participation by an underwriter or a broker-dealer. 

ITEM 27. EXHIBITS 

<TABLE>
<CAPTION>
   
<S>          <C>
 1.1**       Form of Underwriting Agreement between Registrant and the Underwriter 
 3.1         Certificate of Incorporation and amendments thereto of Registrant 
 3.2*        By-laws, as amended, of Registrant 
 4.1*        Certificate of Designation of the Series A Convertible Preferred Stock 
 4.2         Form of certificate evidencing shares of Preferred Stock 
 4.3         Form of certificate evidencing Warrants 
 4.4         Form of certificate evidencing shares of Common Stock 
 4.5         Form of Warrant Agreement between Registrant and the Underwriter 
 4.6         Form of Warrant Agreement between Registrant and American Stock Transfer and Trust Company, as Warrant 
             agent 
 4.7         Debenture Investment Agreement, dated July 6, 1989, between Registrant and New York State Science 
             and Technology Foundation, and amendments thereto 
    
</TABLE>

                                      II-2
<PAGE>


<TABLE>
<CAPTION>
   
<S>          <C>
 4.8         Loan Agreement, dated January 11, 1989, between Registrant and North Greenbush Industrial Development 
             Agency and amendments thereto 
 5.1*        Opinion of Parker Duryee Rosoff & Haft A Professional Corporation 
10.1         1996 Stock Option Plan 
10.2**       Lease Agreement, dated October 1, 1986 between Registrant and Renssalaer Polytechnic Institute and 
             amendment thereto (the "Lease Agreement") 
10.3         Digital Prime Contracting Agreement, dated June 6, 1994, between Registrant and Digital Equipment 
             International BV 
10.4         Software Development and License Agreement, dated July 8, 1996, between Registrant and Visa International 
             Service Association 
10.5*        Employment Agreement, dated as of January 1, 1997, between Registrant and Frank A. Pascuito. 
10.6*        Employment Agreement, dated as of January 1, 1997, between Registrant and Charles J. Caserta. 
10.7         Purchase and Sale Agreement, dated as of December 17, 1996, between Registrant and Trustee Bank, 
             National Association. 
10.8         Addendum A to the Lease Agreement, dated January 6, 1997. 
10.9         Form of Consulting and Investment Banking Agreement between Registrant and the Underwriter. 
21.1**       Subsidiaries of Registrant 
23.1         Consent of Urbach Kahn & Werlin PC 
23.2*        Consent of Parker Duryee Rosoff & Haft (included in Exhibit 5.1) 
24.1**       Power of Attorney (included on the signature page of Part II of this Registration Statement) 
</TABLE>

- ------ 
 * To be filed by Amendment to this Registration Statement. 

** Previously filed with this Registration Statement. 
    

ITEM 28. UNDERTAKINGS 

   Registrant hereby undertakes: 

   (1) That for purposes of determining any liability under the Securities 
Act, the information omitted from the form of Prospectus filed as part of 
this Registration Statement in reliance upon Rule 430A and contained in a 
form of Prospectus filed by Registrant pursuant to Rule 424(b)(1) or (4) or 
497(h) under the Securities Act shall be deemed to be part of this 
Registration Statement as of the time it was declared effective. 

   (2) That for the purpose of determining any liability under the Securities 
Act, each post-effective amendment that contains a form of prospectus shall 
be deemed to be a new registration statement relating to the secur- ities 
offered therein, and the offering of such securities at that time shall be 
deemed to be the initial bona fide offering thereof. 

   (3) To file, during any period in which offers or sales are being made, a 
post-effective amendment to this Registration Statement: 

     (a) To include any Prospectus required by Section 10(a)(3) of the 
   Securities Act; 

     (b) To reflect in the Prospectus any facts or events arising after the 
   effective date of the Registration Statement (or the most recent 
   post-effective amendment thereof) which, individually or in the aggregate, 
   represent a fundamental change in the information set forth in the 
   Registration Statement; 

                                      II-3
<PAGE>

     (c) To include any material information with respect to the plan of 
   distribution not previously disclosed in the Registration Statement or any 
   material change to such information in the Registration Statement. 

   (4) To remove from registration by means of a post-effective amendment any 
of the securities being registered which remain unsold at the termination of 
the offering. 

   (5) Insofar as indemnification for liabilities arising under the 
Securities Act may be permitted to directors, officers and controlling 
persons of Registrant pursuant to Item 24 of this Part II to the Registration 
Statement, or otherwise, Registrant has been advised that in the opinion of 
the Securities and Exchange Commission such indemnification is against public 
policy as expressed in the Securities Act, and is, therefore, unenforceable. 
In the event that a claim for indemnification against such liabilities (other 
than the payment by Registrant of expenses incurred or paid by a director, 
officer or controlling person of Registrant in the successful defense of any 
action, suit or proceeding) is asserted by such director, officer or 
controlling person in connection with the securities being registered, 
Registrant will, unless in the opinion of its counsel the matter has been 
settled by controlling precedent, submit to a court of appropriate 
jurisdiction the question whether such indemnification by it is against the 
public policy as expressed in the Securities Act and will be governed by the 
final adjudication of such issue. 

                                      II-4
<PAGE>

                                  SIGNATURES 

   
   In accordance with the requirements of the Securities Act of 1933, 
Registrant certifies that it has reasonable grounds to believe that it meets 
all of the requirements of filing on Form SB-2 and authorized this Amendment 
No. 1 to the Registration Statement to be signed on its behalf by the 
undersigned, in the City of Troy, State of New York, on the 16th day of 
January, 1997. 
                                            IFS INTERNATIONAL, INC. 

                                            By: /s/ Frank A. Pascuito 
                                                --------------------------- 
                                                Frank A. Pascuito 
                                                Chief Executive Officer 

   In accordance with the requirements of the Securities Act of 1933, this 
Amendment No. 1 to the Registration Statement was signed by the following 
persons in the capacities and on the dates stated: 
    

<TABLE>
<CAPTION>
         Signature                                     Title                                    Date 
 --------------------------   -------------------------------------------------------   -------------------- 
<S>                          <C>                                                        <C>
/s/ Frank A. Pascuito        Chairman of the Board, Chief Executive Officer,               January 16, 1997 
- -------------------------    Director (Principal Executive and Financial Officer) 
Frank A. Pascuito 

/s/ Charles J. Caserta       President, Director                                           January 16, 1997 
- ------------------------- 
Charles J. Caserta 

*                            Director of Sales and Marketing for the                       January 16, 1997 
- -------------------------    London Office, Director 
Simon J. Theobald 

/s/ Carmen A. Pascuito       Controller, Secretary (Principal Accounting Officer)          January 16, 1997 
- ------------------------- 
Carmen A. Pascuito 

                             Director 
- -------------------------- 
Arnold Wells 

*                            Director                                                      January 16, 1997 
- -------------------------- 
Jerald Tishkoff 

</TABLE>

   
- ------ 

*  Frank A. Pascuito, pursuant to the Powers of Attorney, (executed by each of
   the officers and directors listed above and indicated as signing above, and
   filed with the Securities and Exchange Commission), by signing his name
   hereto does hereby sign and execute this Amendment to the Registration
   Statement on behalf of each of the persons referenced above.

                                                     /s/ Frank A. Pascuito 
                                                     -------------------------
                                                     Frank A. Pascuito 
January 16, 1997 
    

                                      II-5
<PAGE>

                                EXHIBIT INDEX 
<TABLE>
<CAPTION>
   
<S>            <C>
 Item 27.      Exhibits 
 1.1**         Form of Underwriting Agreement between Registrant and the Underwriter 
 3.1           Certificate of Incorporation and amendments thereto of Registrant 
 3.2*          By-laws, as amended, of Registrant 
 4.1*          Certificate of Designation of the Series A Convertible Preferred Stock 
 4.2           Form of certificate evidencing shares of Preferred Stock 
 4.3           Form of certificate evidencing Warrants 
 4.4           Form of certificate evidencing shares of Common Stock 
 4.5           Form of Warrant Agreement between Registrant and the Underwriter 
 4.6           Form of Warrant Agreement between Registrant and American Stock Transfer and Trust Company, as Warrant 
               agent 
 4.7           Debenture Investment Agreement, dated July 6, 1989, between Registrant and New York State Science and 
               Technology Foundation, and amendments thereto 
 4.8           Loan Agreement, dated January 11, 1989, between Registrant and North Greenbush Industrial Development 
               Agency and amendments thereto 
 5.1*          Opinion of Parker Duryee Rosoff & Haft A Professional Corporation 
10.1           1996 Stock Option Plan 
10.2**         Lease Agreement, dated October 1, 1986 between Registrant and Renssalaer Polytechnic Institute and amendment 
               thereto (the "Lease Agreement") 
10.3           Digital Prime Contracting Agreement, dated June 6, 1994, between Registrant and Digital Equipment International 
               BV 
10.4           Software Development and License Agreement, dated July 8, 1996, between Registrant and Visa International 
               Service Association 
10.5*          Employment Agreement, dated as of January 1, 1997, between Registrant and Frank A. Pascuito. 
10.6*          Employment Agreement, dated as of January 1, 1997, between Registrant and Charles J. Caserta. 
10.7           Purchase and Sale Agreement, dated as of December 17, 1996, between Registrant and Trustee Bank, National 
               Association. 
10.8           Addendum A to the Lease Agreement, dated January 6, 1997. 
10.9           Form of Consulting and Investment Banking Agreement between Registrant and the Underwriter. 
21.1**         Subsidiaries of Registrant 
23.1           Consent of Urbach Kahn & Werlin PC 
23.2*          Consent of Parker Duryee Rosoff & Haft (included in Exhibit 5.1) 
24.1**         Power of Attorney (included on the signature page of Part II of this Registration Statement) 
</TABLE>

- ------ 
 * To be filed by Amendment to this Registration Statement. 
** Previously filed with this Registration Statement. 
    



<PAGE>



                          CERTIFICATE OF INCORPORATION
                          ----------------------------

                                       OF

                         WELLSWAY VENTURES CORPORATION
                         -----------------------------

                                   ----------


     The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known, identified and
referred to as the "General Corporation Law of the State of Delaware"), hereby
certifies that:

     FIRST: The name of the corporation (hereinafter called the "corporation")
is

                         WELLSWAY VENTURES CORPORATION

     SECOND: The address, including street, number, city, and county, of the
registered office of the corporation in the State of Delaware is 229 South State
Street, City of Dover, County of Kent; and the name of the registered agent of
the corporation in the State of Delaware at such address is The Prentice-Hall
Corporation System, Inc.

     THIRD: The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.

     FOURTH: The total number of shares of stock which the corporation shall
have authority to issue is Twenty-Five Million (25,000,000). The par value of
each of such shares is One Mill ($.001). All such shares are of one class and
are shares of Common Stock.

     FIFTH: The name and the mailing address of the incorporator are as follows:

     NAME                               MAILING ADDRESS
     ----                               ---------------
   J.A. Kent           229 South State Street, Dover, Delaware 19901

     SIXTH: The corporation is to have perpetual existence.


<PAGE>


     SEVENTH: Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.

     EIGHTH: For the management of the business and for the conduct of the
affairs of the corporation, and in further definition, limitation and regulation
of the powers of the corporation and of its directors and of its stockholders or
any class thereof, as the case may be, it is further provided:

          1. The management of the business and the conduct of the affairs of
     the corporation shall be vested in its Board of Directors. The number of
     directors which shall constitute the whole Board of Directors shall be
     fixed by, or in the manner provided in, the By-Laws. The phrase "whole
     Board" and the phrase "total number of directors" shall be deemed to have
     the same meaning, to wit, the total number of directors which the
     corporation would have if there were no vacancies. No election of directors
     need be by written ballot.

          2. After the original or other By-Laws of the corporation have been
     adopted, amended, or repealed, as the case may be, in accordance with


                                      -2-


<PAGE>


     the provisions of Section 109 of the General Corporation Law of the State
     of Delaware, and, after the corporation has received any payment for any of
     its stock, the power to adopt, amend, or repeal the By-Laws of the
     corporation may be exercised by the Board of Directors of the corporation;
     provided, however, that any provision for the classification of directors
     of the corporation for staggered terms pursuant to the provisions of
     subsection (d) of Section 141 of the General Corporation Law of the State
     of Delaware shall be set forth in an initial By-Law or in a By-Law adopted
     by the stockholders entitled to vote of the corporation unless provisions
     for such classification shall be set forth in this certificate of
     incorporation.

          3. Whenever the corporation shall be authorized to issue only one
     class of stock, each outstanding share shall entitle the holder thereof to
     notice of, and the right to vote at, any meeting of stockholders. Whenever
     the corporation shall be authorized to issue more than one class of stock,
     no outstanding share of any class of stock which is denied voting power
     under the provisions of the certificate of incorporation shall entitle the
     holder thereof to the right to vote at any meeting of stockholders except
     as the provisions of paragraph (2) of subsection (b) of Section 242 of the
     General Corporation Law of the State of Delaware shall otherwise require;
     provided, that no share of any such class which is otherwise denied voting
     power shall entitle the holder thereof to vote upon the increase or
     decrease in the number of authorized shares of said class.

     NINTH: The personal liability of the directors of the corporation is hereby
eliminated to the fullest extent permitted by paragraph (7) of subsection (b) of
Section 102 of the General Corporation Law of the State of Delaware, as the same
may be amended and supplemented.

     TENTH: The corporation shall, to the fullest extent permitted by Section
145 of the General Corporation Law of the State of Delaware, as the same may be
amended and supplemented, indemnify any and all persons whom it shall have power
to indemnify under said section from and against any and all of the expenses,
liabilities or other matters referred to in or covered by said section, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any By-Law, agreement,
vote of


                                      -3-


<PAGE>


stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to the person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.

     ELEVENTH: From time to time any of the provisions of this certificate of
incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and all
rights at any time conferred upon the stockholders of the corporation by this
certificate of incorporation are granted subject to the provisions of this
Article ELEVENTH.

Signed on September 23, 1986.

                                                  /s/ J.A. Kent
                                             -------------------------
                                                      J.A. Kent
                                                     Incorporator
<PAGE>

                         CERTIFICATE OF AMENDMENT OF
                     THE CERTIFICATE OF INCORPORATION OF
                            WELLSWAY VENTURES, INC.

     1.    The name of the Corporation is Wellsway Ventures, Inc.

     2.    The certificate of its incorporation was filed with the Secretary
           of State on September 23, 1986 under the name Wellsway Ventures
           Corporation and a Certificate of Amendment changing its corporate
           name to Wellsway Ventures, Inc. was filed with the Secretary of
           State on October 21, 1987.

     3.    The amendment to be made by this Certificate of Amendment is to
           change the Corporation's name from Wellsway Ventures, Inc. to IFS
           International, Inc. To effect such change, the provisions of
           paragraph 1 of the Certificate of Incorporation are hereby revised
           to read as follows:

           1.    The name of the Corporation is IFS International, Inc.

     4.    The above amendment to the Certificate of Incorporation was
           authorized at a special meeting of the Board of Directors by a
           majority of the directors, followed by written consent of a
           majority of all outstanding stock entitled to vote thereon, in
           accordance with the applicable provisions of Sections 141, 228 and
           242 of the General Corporation Law of the State of Delaware, with
           written notice of the written consent promptly given to those
           stockholders who had not consented in writing.

     IN WITNESS WHEREOF, we have executed this Certificate and affirm the truth
of the statements herein set forth under penalty of perjury this 9th day of
June, 1989.

ATTEST:                             WELLSWAY VENTURES, INC.



[SEAL]                              BY: /s/ Charles Caserta
                                        ----------------------------
                                        Charles Caserta, President

BY: /s/ Frank Pascuito
    -------------------------
    Frank Pascuito, Secretary

<PAGE>
                            CERTIFICATE OF AMENDMENT
                                       OF
                          CERTIFICATE OF INCORPORATION
                                       OF
                            IFS INTERNATIONAL, INC.

     IFS  INTERNATIONAL,  INC., a corporation  organized and existing  under the
laws of the State of Delaware, hereby certifies as follows:

     1.   The name of the corporation is IFS International, Inc.

     2.   The corporation's original certificate of incorporation was filed with
          the Delaware  Secretary of State on September 23, 1986, under the name
          Wellsway Ventures Corporation. A certificate of amendment was filed on
          October  21,  1987,   changing  the  corporation's  name  to  Wellsway
          Ventures,  Inc. A certificate of amendment was filed on June 19, 1989,
          changing the corporation's name to IFS International, Inc.

     3.   The certificate of incorporation is amended to:

          (a) authorize the issuance of one million  (1,000,000) shares of a new
          class of preferred  stock  divided  into such series,  and having such
          relative    rights   and   preferences,    as  may  be  fixed  by  the
          corporation's board of directors; and 

          (b) change the language of paragraph NINTH to  specifically  eliminate
          and limit the liability of the corporation's directors.

     4.   To effectuate the amendments specified in the preceding paragraph, the
          corporation's certificate of incorporation is amended as follows:

          (a) Paragraph FOURTH of the certificate of incorporation is deleted in
          its entirety and replaced by the following new paragraph FOURTH:

          "FOURTH.  The total  number of shares of stock  which the  corporation
          shall have authority to issue is twenty-six million (26,000,000).  The
          par  value of each of such  shares  is one mill  ($.001).  Twenty-five
          million of such shares shall be shares of Common Stock. One million of
          such shares shall be Preferred  Stock,  which Preferred Stock shall be
          divided  into such  series,  and shall have such  relative  rights and
          preferences,   as  may  be  fixed  by  the   corporation's   board  of
          directors."

          (b) Paragraph NINTH of the certificate of incorporation is deleted
          in its entirety and replaced by the following new paragraph NINTH:

          "NINTH. No director of the corporation shall have any personal
          liability to the corporation or its stockholders for monetary
          damages for breach of fiduciary duty as a director, provided that
          this provision shall not eliminate or limit the liability of a
          director (i) for any breach of the director's duty of loyalty to the
          corporation or its stockholders, (ii) for acts or omissions not in
          good faith which involve intentional misconduct or a knowing
          violation of law, (iii) under Section 174 of the Delaware
          Corporation Law or (iv) for any transaction from which the director
          derived an improper personal benefit. The provisions of this
          paragraph shall not eliminate or limit the liability of a director
          for any act or omission occurring prior to the date on which this
          provision became effective."

     The foregoing amendments to the corporation's certificate of
incorporation were authorized at a special meeting of the board of directors,
by a vote of the majority of directors, held on March 18, 1991, and at the
annual meeting of shareholders, by a majority of the shareholders entitled to
vote thereon, held on March 19, 1991, in accordance with the applicable
provisions Sections 141, 228 and 242 of the General Corporation Law of the
State of Delaware.

     IN WITNESS WHEREOF, the corporation has caused this certificate of
amendment to be signed by Charles Caserta, its President, and Frank Pascuito,
its Secretary, who affirm the truth of the Statements herein set forth under
penalty of perjury this 12th day of April, 1991.


                                   IFS INTERNATIONAL, INC.

                                   By: /s/ Charles Caserta
                                       ---------------------------
                                       Charles Caserta, President

ATTEST:

By: /s/ Frank Pascuito
   --------------------------
   Frank Pascuito, Secretary
<PAGE>


                            CERTIFICATE OF AMENDMENT
                                       OF
                          CERTIFICATE OF INCORPORATION
                                       OF
                             IFS INTERNATIONAL, INC.

     IFS INTERNATIONAL,  INC., a corporation organized and existing under and by
virtue of the  General  Corporation  Law of the State of  Delaware  DOES  HEREBY
CERTIFY:

     That pursuant to a meeting of the Board of Directors of IFS  INTERNATIONAL,
INC. (the  "Corporation")  on September 24, 1996,  resolutions were duly adopted
setting forth a proposed  amendment to the Certificate of  Incorporation of said
Corporation,  declaring  said  amendment to be advisable and directing  that the
stockholders  of said  Corporation  consider  approval  thereof.  The resolution
setting forth the proposed amendment is as follows:

          RESOLVED,  that Article FOURTH of the  Certificate  of  Incorporation,
     relating to the  capitalization  of the Corporation,  is hereby amended and
     restated in its entirety to read as follows:

          "FOURTH:  (a)  the  Corporation  shall  be  authorized  to  issue  the
     following shares:

             Class             Number of Shares           Par Value
             -----             ----------------           ---------

          Common Stock            25,000,000                $.001
          Preferred Stock         25,000,000                $.001



     (b) The  designations  and the  powers,  preferences  and  rights,  and the
qualifictibons or restrictions thereof are as follows:

     The shares of  Preferred  Stock shall be issued from time to time in one or
more series,  with such distinctive  serial  designations as shall be stated and
expressed  in the  resolution  or  resolutions  providing  for the issue of such
shares from time to time adopted by the Board of  Directors of the  Corporation;
and in such resolution or resolutions  providing for the issue of shares of each
particular  series,  the Board of  Directors  of the  Corporation  is  expressly
authorized  to fix the  annual  rate or rates of  dividends  for the  particular
series;  the dividend payment dates for the particular  series and the date from
which dividends on all shares of such series issued prior to the record date for
the first  dividend  payment date shall be cumulative;  the redemption  price or
prices for the particular  series;  the voting powers for the particular series;
the rights, if any, of holders of the shares of the particular series to convert
the same into  shares of any other  series or class or other  securities  of the
Corporation,   with  any  provisions  for  the  subsequent  adjustment  of  such
conversion  rights;  and to classify or reclassify any unissued shares by fixing
or  altering  from  time to time any of the  foregoing  rights,  privileges  and
qualifications.


<PAGE>


     All shares of Preferred  Stock of any one series  shall be  identical  with
each other in all  respects,  except  that  shares of any one  series  issued at
different times may differ as to the dates from which dividends thereon shall be
cumulative; and all shares of Preferred Stock shall be of equal rank, regardless
of series, and shall be identical in all respects,  except as to the particulars
fixed by the Board of Directors of the Corporation as hereinabove provided or as
fixed herein.

     (c) At 5:00 p.m.,  Dover,  Delaware time, on the date of the filing of this
Certificate of Amendment to the Certificate of Incorporation  with the Secretary
of State of the State of Delaware,  all then outstanding  shares of Common Stock
held by each  holder  of record  on such  time and date  shall be  automatically
reduced at the rate of 1-for-10  without  any further  action on the part of the
holders thereof or this  Corporation.  No fractional  shares will be issued.  In
lieu of  issuing  fractional  shares,  the  Corporation  shall  pay  the  holder
otherwise  entitled to such fractional  share a sum in cash equal to the closing
bid price of the  Corporation's  Common  Stock on the date of the filing of this
Certificate of Amendment to the Certificate of Incorporation  multiplied by such
fraction."

     That thereafter,  pursuant to a resolution of the Board of Directors of the
Corporation  directing that such amendment be considered by the  stockholders of
the  Corporation,  the  stockholders  of the  Corporation  holding  more  than a
majority  of the  outstanding  shares of  Common  Stock of the  Corporation,  in
accordance  with  Section  228 of the  General  Corporation  Law of the State of
Delaware,  consented in writing to an approved said amendment and delivered such
written consents to the Corporation.  The Corporation thereafter provided to the
other  stockholders  of the  Corporation the notice called for in Section 228 of
the General Corporation Law.

     That said  amendment was duly adopted in accordance  with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.

     IN WITNESS  WHEREOF,  the  Corporation  has caused this  Certificate  to be
signed  by  Charles  J.  Caserta,  its  President,  and  attested  to by Frank A
Pascuito, its Secretary, this 6th day of November, 1996.



                                            IFS INTERNATIONAL, INC.


                                            By: /s/ Charles J. Caserta
                                               ------------------------------
                                                Charles J. Caserta, President

 Attest:

 By:/s/ Frank A. Pascuito
    -----------------------------
    Frank A. Pascuito, Secretary


                                       2

<PAGE>


                            CERTIFICATE OF AMENDMENT
                                       OF
                          CERTIFICATE OF INCORPORATION
                                       OF
                             IFS INTERNATIONAL, INC.

         IFS INTERNATIONAL, INC., a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware DOES HEREBY
CERTIFY:

         That pursuant to the unanimus written consent of the Board of
Director's of IFS International, Inc. (the "Corporation") on December 26, 1996,
resolutions were duly adopted setting forth a proposed amendment to the
Certificate of Incorporation of said Corporation, declaring said amendment to be
advisable and directing that the stockholders of said Corporation consider
approval thereof. The resolution setting forth the proposed amendment is as
follows:


          RESOLVED, that, subject to stockholder approval, the Certificate of
          Incorporation of the Corporation is hereby amended so as to increase
          the number of authorized shares of common stock of the Corporation
          from 25,000,000 to 50,000,000. Accordingly, Article FOURTH Subsection
          (a) of the Certificate of Incorporation is hereby deleted in its
          entirety and the following is substituted therefor.

                "FOURTH: (a) the Corporation shall be authorized to issue the 
          following shares:

          Class               Number of Shares            Par Value
          -----               ----------------            ---------
          Common Stock          50,000,000                  $.001
          Preferred Stock       25,000,000                  $.001



         That thereafter, pursuant to a resolution of the Board of Directors of
the Corporation directing that such amendment be considered by the stockholders
of the Corporation, the stockholders of the Corporation holding more than a
majority of the outstanding shares of Common Stock of the Corporation, in
accordance with Section 228 of the General Corporation Law of the State of
Delaware, consented in writing to an approved said amendment and delivered such
written consents to the Corporation. The Corporation thereafter provided to the
other stockholders of the Corporation the notice called for in Section 228 of
the General Corporation Law.

         That said amendment was duly adopted in accordance with the provisions
of Section 242 of the General Corporation Law of the State of Delaware.

<PAGE>


         IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by Charles J. Caserta, its President, and attested to by Carmen A.
Pascuito, its Secretary, this 10th day of January, 1997.

                                          IFS INTERNATIONAL, INC.
                                   
                                          By: /s/ Charles J. Caserta
                                          --------------------------------
                                              Charles J. Caserta, President

Attest:


By: /s/ Carmen A. Pascuito
- -----------------------------------
    Carmen A. Pascuito, Secretary


<PAGE>
        SERIES A                                                 SERIES A
 CONVERTIBLE PREFERRED                                     CONVERTIBLE PREFERRED

         NUMBER                                                   NUMBER

                             IFS INTERNATIONAL, INC.

INCORPORATED UNDER THE LAWS                  SEE REVERSE FOR CERTAIN DEFINITIONS
  OF THE STATE OF DELAWARE                           CUSIP 449515 40 2


THIS CERTIFIES THAT 





is the owner of


FULLY PAID AND NONASSESABLE SHARES OF THE SERIES A CONVERTIBLE PREFERRED STOCK,
                         PAR VALUE $.001 PER SHARE, OF


                            IFS INTERNATIONAL, INC.

                              CERTIFICATE OF STOCK


transferable on the books of the Corporation by the holder hereof, in person or
by duly authorized attorney, on surrender of this certificate properly endorsed.

         This certificate is not valid until countersigned and registered by the
Transfer Agent and Registrar.

         Witness the facsimile seal of the Corporation and the fascimile
signatures of its duly authorized officers.

Dated:

                             IFS INTERNATIONAL, INC.

                                   CORPORATE

                                      SEAL

                                    DELAWARE

                                      1986

               SECRETARY                                    PRESIDENT


COUNTERSIGNED AND REGISTERED:
               AMERICAN STOCK TRANSFER & TRUST COMPANY
                              NEW YORK, N.Y.                TRANSFER AGENT
                                                             AND REGISTRAR

BY:

                                                            AUTHORIZED OFFICER

<PAGE>

         THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO
REQUESTS THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL, OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF AND
THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR
RIGHTS.

         The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:


TEN COM - as tenants in common           UNIF GIFT MIN ACT- _____Custodian______
TEN ENT - as tenants by the entireties                      (Cust)       (Minor)
JT TEN  - as joint tenants  
          with right of survivorship              Under Uniform Gifts to Minors
          and not as tenants in common            Act__________________________
                                                            (State)
    Additional abbreviations may also be used though not in the above list.


FOR VALUE RECEIVED, _____________________ hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
   IDENTIFYING NUMBER OF ASSIGNEE

 _______________________________________ 
|                                       |
|                                       |
|_______________________________________|



_______________________________________________________________________________
                   (PLEASE PRINT OF TYPEWRITE NAME AND ADDRESS
                     INCLUDING POSTAL ZIP CODE OF ASSIGNEE)

_______________________________________________________________________________

_______________________________________________________________________________

________________________________________________________________________Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint____________________________________________
___________________________Attorney to transfer the said stock on the books of
the within named Company with full power of substitution in the premises.



Dated:________________________________




                                        ________________________________________
                                        NOTICE: The signature to this assignment
                                        must correspond with the name as written
                                        upon the face of the certificate in
                                        every particular without alteration or
                                        enlargement or any change whatever. The
                                        signature of the person executing this
                                        power must be guaranteed by an Eligible
                                        Guarantor Institution, such as a
                                        Commercial Bank, Trust Company,
                                        Securities Broker/Dealer, Credit Union,
                                        or a Savings Association participating
                                        in a Medallion program approved by the
                                        Securities Transfer Association, Inc.







<PAGE>


                      (FORM OF FACE OF WARRANT CERTIFICATE)


No. _______________________                              _____________  Warrants


                      VOID AFTER ___________________, 2002



        SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE WARRANT CERTIFICATE
              FOR PURCHASE OF SERIES A CONVERTIBLE PREFERRED STOCK


                             IFS INTERNATIONAL, INC.


                     THIS CERTIFIES THAT FOR VALUE RECEIVED


or registered assigns (the "Registered Holder") is the owner of the number of
Series A Convertible Preferred Stock Purchase Warrants ("Warrants") specified
above. Each Warrant initially entitles the Registered Holder to purchase,
subject to the terms and conditions set forth in this Certificate and the
Warrant Agreement (as hereinafter defined), one (1) fully paid and nonassessable
share of Series A Convertible Preferred Stock, $.001 par value (the "Preferred
Stock"), of IFS INTERNATIONAL, INC., a Delaware corporation (the "Company"), at
any time from __________________, 1999 (or earlier in certain circumstances as
provided in the Warrant Agreement referred to below) to the Expiration Date (as
hereinafter defined), upon the presentation and surrender of this Warrant
Certificate with the Subscription Form on the reverse hereof duly executed, at
the corporate office of AMERICAN STOCK TRANSFER & TRUST COMPANY as Warrant
Agent, or its successor (the "Warrant Agent"), accompanied by payment of $6.25
(the "Purchase Price") in lawful money of the United States of America in cash
or by official bank or certified check made payable to the Warrant Agent.

                  This Warrant Certificate and each Warrant represented hereby
are issued pursuant to and are subject in all respects to the terms and
conditions set forth in the Warrant Agreement (the "Warrant Agreement") dated
__________________, 1997, by and among the Company, the Warrant Agent and Duke &
Co., Inc. (the "Underwriter").

                  In the event of certain contingencies provided for in the
Warrant Agreement, the Purchase Price or the number of shares of

                                        1

<PAGE>



Preferred Stock subject to purchase upon the exercise of each Warrant
represented hereby are subject to modifications or adjustments.

                  Each Warrant represented hereby is exercisable at the option
of the Registered Holder, but no fractional shares of Preferred Stock will be
issued. In case of the exercise of less than all the Warrants represented
hereby, the Company shall cancel this Warrant Certificate upon the surrender
hereof and shall execute and deliver a new Warrant Certificate or Warrant
Certificates of like tenor, which the Warrant Agent shall countersign, for the
balance of such Warrants.

                  The term "Expiration Date" shall mean 5:00 p.m. (New York
time) on ____________________, 2002, or such earlier date as the Warrants shall
be redeemed. If such date shall in the State of New York be a holiday or a day
on which the banks are authorized to close, then the Expiration Date shall mean
5:00 p.m. (New York time) the next following day which in the State of New York
is not a holiday or a day on which banks are authorized to close.

                  The Company shall not be obligated to deliver any securities
pursuant to the exercise of this Warrant unless a registration statement under
the Securities Act of 1933, as amended, with respect to such securities is
effective. This Warrant shall not be exercisable by a Registered Holder in any
state in which it would be unlawful for the Company to deliver the shares of
Preferred Stock upon exercise of this Warrant.

                  The Warrant Certificate is exchangeable, upon the surrender
hereof by the Registered Holder at the corporate office of the Warrant Agent,
for a new Warrant Certificate or Warrant Certificates of like tenor representing
an equal aggregate number of Warrants, each of such new Warrant Certificates to
represent such number of Warrants as shall be designated by such Registered
Holder at the time of such surrender. Upon due presentment of this Warrant
Certificate at such office for registration of transfer, together with any
transfer fee and any tax or other governmental charge imposed in connection with
such transfer, a new Warrant Certificate or Warrant Certificates representing an
equal aggregate number of Warrants will be issued to the transferee in exchange
therefor, subject to the limitations provided in the Warrant Agreement.

                  Prior to the exercise of any Warrant represented hereby, the
Registered Holder shall not be entitled to any rights of a stockholder of the
Company, including, without limitation, the right to vote or to receive
dividends or other distributions, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided in the Warrant
Agreement.


                                        2

<PAGE>



                  Commencing ______________, 1998, this Warrant may, with the
prior consent of the Underwriter, be redeemed at the option of the Company, at a
redemption price of $.10 per Warrant, provided the Market Price (as defined in
the Warrant Agreement) for the securities issuable upon exercise of such Warrant
shall exceed $8.00 per share (subject to adjustment as set forth in the Warrant
Agreement) for 20 consecutive trading days ending not more than three days prior
to the date on which the Company gives notice of redemption. Notice of
redemption shall be given not later than the thirtieth day, and not earlier than
the forty fifth day, before the date fixed for redemption, all as provided in
the Warrant Agreement. On and after the date fixed for redemption, the
Registered Holder shall have no rights with respect to this Warrant except to
receive the $.10 per Warrant upon surrender of this Certificate.

                  Prior to due presentment for registration of transfer hereof,
the Company and the Warrant Agent may deem and treat the Registered Holder as
the absolute owner hereof and of each Warrant represented hereby
(notwithstanding any notations of ownership or writing hereon made by anyone
other than a duly authorized officer of the Company or the Warrant Agent) for
all purposes and shall not be affected by any notice to the contrary.

                  The Company has agreed to pay a fee of 5% of the Purchase
Price to the Underwriter upon certain conditions as specified in the Warrant
Agreement upon the exercise of this Warrant.

                  This Warrant Certificate and each Warrant represented hereby
shall be governed by and construed in accordance with the laws of the State of
New York.

                  This Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent.


                                        3

<PAGE>



                  IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed, manually or in facsimile by two of its officers
thereunto duly authorized, and a facsimile of its corporate seal to be imprinted
hereon.

                                             IFS INTERNATIONAL, INC.



                                             By____________________________

                                                Its



                                             By____________________________

                                                Its



Date:____________________________




                                     [Seal]



COUNTERSIGNED:

AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Warrant Agent



By ______________________________

   Its
   Authorized Officer


                                        4

<PAGE>




                    (FORM OF REVERSE OF WARRANT CERTIFICATE)

                                SUBSCRIPTION FORM

                     To Be Executed by the Registered Holder
                          in Order to Exercise Warrants

                  The undersigned Registered Holder hereby irrevocably elects to
exercise ___________ (___________) Warrants represented by this Warrant
Certificate, and to purchase the securities issuable upon the exercise of such
Warrants, and requests that certificates for such securities shall be issued in
the name of


            PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

                          _____________________________

                          _____________________________

                          _____________________________

                          _____________________________




                     [please print or type name and address]

and be delivered to

                          _____________________________

                          _____________________________

                          _____________________________

                          _____________________________

                     [please print or type name and address]

and if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.

                  The undersigned represents that the exercise of the within
Warrant was solicited by a member of the National Association of Securities
Dealers, Inc. ("NASD"). If not solicited by an NASD member, please write
"unsolicited" in the space below.


                                       5

<PAGE>




Please indicate the name of the NASD member firm which solicited the exercise of
the Warrant. Unless otherwise indicated by listing the name of another NASD
member firm or by writing "unsolicited," it will be assumed that the exercise
was solicited by Duke & Co., Inc.


                                                  ______________________________
                                                  Name of soliciting NASD Member



                                                 
Dated: _____________________________              ______________________________
                                                  Signature

                                                  ______________________________
                                                  Street Address

                                                  ______________________________
                                                  City, State and Zip Code

                                                  ______________________________
                                                  Taxpayer ID Number

                                                  ______________________________
                                                  Signature Guaranteed:




                                       6

<PAGE>


                                   ASSIGNMENT

                     To Be Executed by the Registered Holder
                           in Order to Assign Warrants

                  FOR VALUE RECEIVED, the undersigned hereby sells, assigns
and transfers unto

            PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

                          _____________________________

                          _____________________________

                          _____________________________

                          _____________________________


                     [please print or type name and address]

____________________ (____________________) of the Warrants represented by this
Warrant Certificate, and hereby irrevocably constitutes and appoints
_______________________ Attorney to transfer this Warrant Certificate on the
books of the Company, with full power of substitution in the premises.


Dated: ________________________________      ___________________________________
                                             Signature Guaranteed:



                                             ___________________________________

         THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST
CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN
EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER,
AND MUST BE GUARANTEED BY A MEDALLION BANK.



                                        7


<PAGE>





         SHARES                                                   NUMBER
                            WELLSWAY VENTURES, INC.
                                NAME CHANGED TO
                            IFS INTERNATIONAL, INC.

INCORPORATED UNDER THE LAWS                  SEE REVERSE FOR CERTAIN DEFINITIONS
  OF THE STATE OF DELAWARE                           CUSIP 449515 30 3


THIS CERTIFIES THAT 





is the owner of


             FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF
                       THE PAR VALUE $.001 PER SHARE OF


                            WELLSWAY VENTURES, INC.
                                NAME CHANGED TO
                            IFS INTERNATIONAL, INC.

                              CERTIFICATE OF STOCK


(herein called the "Corporation"), transferable on the books of the Corporation
by the holder hereof in person or by authorized attorney upon the surrender of
this certificate properly indorsed. This certificate is not valid unless
countersigned and registered by the Transfer Agent and Registrar.

         Witness the facsimile seal of the Corporation and the fascimile
signatures of its duly authorized officers.

Dated:

                            WELLSWAY VENTURES, INC.
                                NAME CHANGED TO
                            IFS INTERNATIONAL, INC.
                                   CORPORATE

                                      SEAL

                                    DELAWARE

                                      1986

               SECRETARY                                    PRESIDENT


COUNTERSIGNED AND REGISTERED:
               AMERICAN STOCK TRANSFER COMPANY
                              (NEW YORK)                TRANSFER AGENT
                                                             AND REGISTRAR

BY:

                                                           AUTHORIZED SIGNATURE

<PAGE>




         The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:


TEN COM - as tenants in common           UNIF GIFT MIN ACT- _____Custodian______
TEN ENT - as tenants by the entireties                      (Cust)      (Minor)
JT TEN  - as joint tenants  
          with right of survivorship              Under Uniform Gifts to Minors
          and not as tenants in common            Act__________________________
                                                            (State)
    Additional abbreviations may also be used though not in the above list.


FOR VALUE RECEIVED, _____________________ hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
   IDENTIFYING NUMBER OF ASSIGNEE

 _______________________________________ 
|                                       |
|                                       |
|_______________________________________|



_______________________________________________________________________________
                   (PLEASE PRINT OF TYPEWRITE NAME AND ADDRESS,
                        INCLUDING ZIP CODE, OF ASSIGNEE)

_______________________________________________________________________________

_______________________________________________________________________________

________________________________________________________________________Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint____________________________________________
___________________________Attorney to transfer the said stock on the books of
the within named Corporation with full power of substitution in the premises.



Dated________________________________




                                        ________________________________________
                                        NOTICE: The signature to this assignment
                                        must correspond with the name as written
                                        upon the face of the certificate in
                                        every particular, without alternation or
                                        enlargement or any change whatever. 
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       








<PAGE>

                  UNDERWRITER'S WARRANT AGREEMENT dated as of ______________,
1996 between IFS International, Inc., a Delaware corporation (the "Company"),
and Duke & Co., Inc. (the "Underwriter").

                              W I T N E S S E T H:

                  WHEREAS, the Underwriter has agreed, pursuant to the
underwriting agreement (the "Underwriting Agreement") dated _______________,
1997 between the Underwriter and the Company, to act as the underwriter in
connection with the Company's proposed public offering (the "Public Offering")
of 1,200,000 shares of preferred stock, par value $.001 per share ("Preferred
Stock"), and 1,700,000 redeemable Preferred Stock purchase warrants ("Redeemable
Warrants"), plus up to an additional 180,000 shares of Preferred Stock and
255,000 Redeemable Warrants pursuant to the Underwriter's over-allotment option,
which securities are included in a registration statement on Form SB-2 (File No.
333-11653) (hereinafter, the "Public Offering Registration Statement); and

                  WHEREAS, the Company proposes to issue to the Underwriter
warrants, one for the purchase of up to 120,000 shares of Preferred Stock and
the other for the purchase of up to 170,000 Redeemable Warrants; and

                  WHEREAS, the warrants issued pursuant to this Agreement are
being issued by the Company to the Underwriter or officers and partners of the
Underwriter and members of the selling group


<PAGE>

(the "Selling Group") and/or their officers or partners, in consideration for,
and as part of the Underwriter's compensation in connection with, the
Underwriter acting as the underwriter pursuant to the Underwriting Agreement;

                  NOW, THEREFORE, in consideration of the foregoing premises,
the payment by the Underwriter to the Company of an aggregate of $290.00, the
receipt of which is hereby acknowledged by the Company, the agreements herein
set forth and other good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

                  1. Grant. The Underwriter, and/or its designees who are
officers or partners of the Underwriter or members of the Selling Group in
connection with the Public Offering, are hereby granted the right to purchase,
at any time from _____________, 1997 until 5:00 P.M., New York City time, on
______________, 2002 (the "Warrant Exercise Term"), up to (i) 120,000 shares of
Preferred Stock (the "Shares") at an initial exercise price (subject to
adjustment as provided in Article 8 hereof) of $_____ per Share and (ii) 170,000
Redeemable Warrants at an initial exercise price of $____ per Redeemable
Warrant. The right to purchase Shares as described in (i) above is hereinafter
referred to as "Warrant No. 1" and the right to purchase Redeemable Warrants as
described in (ii) above is hereinafter referred to as "Warrant No. 2". Warrant
No. 1 and Warrant No. 2 are hereinafter referred to collectively as the
"Warrants". Except as specifically otherwise provided herein, the Shares and the

                                      - 2 -

<PAGE>

Redeemable Warrants issued pursuant to Warrant No. 1 and Warrant No. 2,
respectively, shall bear the same terms and conditions as described under the
caption "Description of Securities" in the Public Offering Registration
Statement, and the Redeemable Warrants shall be governed by the terms of the
Warrant Agreement dated as of _______________, 1997, executed in connection with
such Public Offering (the "Public Warrant Agreement"), and except that the
holder shall have registration rights under the Securities Act of 1933, as
amended (the "Act"), with respect to the Warrants, the Shares and the Redeemable
Warrants subject thereto, the shares of Preferred Stock underlying the Warrants
issuable upon exercise of Warrant No. 2 and the shares of Common Stock issuable
upon conversion of the Preferred Stock, which registration rights are more fully
described in paragraph 6 of this Warrant Agreement. In the event of any
reduction of the exercise price of the Redeemable Warrants pursuant to the
Public Warrant Agreement, the same changes to the Redeemable Warrants subject to
Warrant No. 2 shall be simultaneously effected.

                  2. Warrant Certificates. The warrant certificates (the
"Warrant Certificates") for Warrant No. 1 and Warrant No. 2 to be delivered
pursuant to this Agreement shall be in the forms set forth as Exhibit A and
Exhibit B attached hereto, respectively, and made a part hereof, with such
appropriate insertions, omissions, substitutions and other variations as
required or permitted by this Agreement.

                                      - 3 -

<PAGE>

                  3. Exercise of Warrants.

                           3.1  Cash Exercise.  The exercise price of the
respective Warrants shall be payable in cash or by check to the order of the
Company, or any combination of cash or check. Upon surrender of the applicable
Warrant Certificate with the annexed Form of Election to Purchase duly executed,
together with payment of the applicable exercise price for the Shares and/or
Redeemable Warrants purchased, at the Company's principal offices, currently
located at Rensselaer Technology Park, 185 Jordan Road, Troy, New York 11280,
the registered holder of a Warrant Certificate ("Holder" or "Holders") shall be
entitled to receive a certificate or certificates for the Shares and/or
Redeemable Warrants so purchased. The purchase rights represented by each
Warrant Certificate are exercisable at the option of the Holder thereof, in
whole or in part (but not as to fractional Shares or fractional Redeemable
Warrants). In the case of the purchase of less than all the Shares or Redeemable
Warrants, as the case may be, purchasable under any Warrant Certificate, the
Company shall cancel said Warrant Certificate upon the surrender thereof and
shall execute and deliver a new Warrant Certificate of like tenor for the
balance of the Shares or Redeemable Warrants, as the case may be, purchasable
thereunder.

                           3.2 Cashless Exercise for Warrant No. 1. At any time
during the Warrant Exercise Term, the Holder may, at its option, exchange
Warrant No. 1, in whole or in part (a "Warrant Exchange"), into the number of
Shares determined in accordance

                                      - 4 -

<PAGE>

with this Section 3.2, by surrendering the Warrant Certificate representing
Warrant No. 1 at the principal office of the Company or at the office of its
transfer agent, accompanied by a notice stating (i) such Holder's intent to
effect such exchange, (ii) the number of Shares to be exchanged and (iii) the
date on which the Holder requests that such Warrant Exchange occur (the "Notice
of Exchange"). The Warrant Exchange shall take place on the date specified in
the Notice of Exchange or, if later, the date the Notice of Exchange is received
by the Company (the "Exchange Date"). Certificates for the Shares issuable upon
such Warrant Exchange and, if applicable, a new warrant of like tenor evidencing
the balance of the Shares remaining subject to this Warrant, shall be issued as
of the Exchange Date and delivered to the Holder within three (3) business days
following the Exchange Date. In connection with any Warrant Exchange, Warrant
No. 1 shall represent the right to subscribe for and acquire the number of
Shares (rounded to the next highest integer) equal to (i) the number of Shares
specified by the Holder in its Notice of Exchange (the "Total Number") less (ii)
the number of Shares equal to the quotient obtained by dividing (A) the product
of the Total Number and the existing exercise price of Warrant No. 1 by (B) the
current market value of a share of Preferred Stock.

                  4. Issuance of Certificates.

                           4.1. Issuance. Upon exercise of the Warrants, the
issuance of certificates for the Shares and/or Redeemable Warrants, as
applicable shall be made forthwith (and in any event

                                      - 5 -

<PAGE>

within three (3) business days thereafter) without charge to the Holder thereof
including, without limitation, any tax which may be payable in respect of the
issuance thereof, and such certificates shall (subject to the provisions of
Article 5 hereof) be issued in the name of, or in such names as may be directed
by, the Holder thereof; provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer involved
in the issuance and delivery of any such certificates in a name other than that
of the Holder, and the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance
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.

                           4.2. Forms of Certificates. The Warrant Certificates
and certificates representing the Shares and/or Redeemable Warrants shall be
executed on behalf of the Company by the manual or facsimile signature of the
present or any future Chairman or Vice Chairman of the Board of Directors or
President or Vice President of the Company under its corporate seal reproduced
thereon, attested to by the manual or facsimile signature of the present or any
future Secretary or Assistant Secretary of the Company. Warrant Certificates
shall be dated the date of execution by the Company upon initial issuance,
division, exchange, substitution or transfer. The Warrant Certificates and, upon
exercise of the Warrants, in part or in

                                      - 6 -

<PAGE>

whole, certificates representing the Shares and/or Redeemable Warrants shall
bear a legend substantially similar to the following:

                  "The securities represented by this certificate have not been
                  registered under the Securities Act of 1933, as amended (the
                  "Act"), and may not be offered or sold except (i) pursuant to
                  an effective registration statement under the Act, (ii) to the
                  extent applicable, pursuant to Rule 144 under the Act (or any
                  similar rule under such Act relating to the disposition of
                  securities), or (iii) upon the delivery by the holder to the
                  Company of an opinion of counsel, reasonably satisfactory to
                  counsel to the Company, stating that an exemption from
                  registration under such Act is available."

                  5. Restriction on Transfer of Warrants.

                  The Holder of a Warrant Certificate, by acceptance thereof,
covenants and agrees that the Warrant is being acquired as an investment and not
with a view to the distribution thereof, and that the Warrant may not be sold,
transferred, assigned, hypothecated or otherwise disposed of, in whole or in
part, for a period of one (1) year from the date hereof, except to officers or
partners of the Underwriter or to any member of the Selling Group participating
in the distribution to the public of the Preferred Stock and Redeemable
Warrants, and/or their respective officers or partners.

                  6. Price.

                           6.1 Initial and Adjusted Exercise Prices. The initial
exercise price of Warrant No. 1 shall be $5.50 per Share and the initial
exercise price of Warrant No. 2 shall be $.11 per

                                      - 7 -

<PAGE>

Redeemable Warrant. The adjusted exercise price shall be the price which shall
result from time to time from any and all adjustments of the initial exercise
price in accordance with the provisions of Article 8 hereof.

                           6.2 Exercise Price. The term "exercise price" herein
shall mean the initial exercise price of Warrant No. 1 or Warrant No. 2, as the
case may be, or the adjusted exercise price, depending upon the context.

                  7. Registration Rights.

                           7.1 Registration Under the Securities Act of 1933.
None of the Warrants, the Shares, the Redeemable Warrants, the Preferred Stock
issuable upon exercise of the Redeemable Warrants (the Underlying Shares") or
the shares of Common Stock issuable upon conversion of the Shares or the
Underlying Shares (the "Conversion Shares") have not been registered for
purposes of public distribution under the Securities Act of 1933, as amended
(the "Act").

                           7.2 Registrable Securities. As used herein the term
"Registrable Securities" means the Warrants, the Shares issuable upon exercise
of Warrant No. 1, the Redeemable Warrants issuable upon exercise of Warrant No.
2, the Underlying Shares, the Conversion Shares and any securities issued upon
any stock split or stock dividend in respect of any of the foregoing; provided,
however, any of such securities shall cease to be Registrable Securities when,
as of the date of determination, (i) it has been effectively registered under
the Act and disposed of

                                      - 8 -

<PAGE>

pursuant thereto, (ii) registration under the Act is no longer required for the
immediate public distribution of such securities or (iii) it has ceased to be
outstanding. In the event of any merger, reorganization, consolidation,
recapitalization or other change in corporate structure affecting the Common
Stock or Preferred Stock, such adjustment shall be made in the definition of
"Registrable Securities" as is appropriate in order to prevent any dilution or
enlargement of the rights granted pursuant to this Article 7.

                           7.3 Piggyback Registration. If, at any time during
the seven years following the date of this Agreement, the Company proposes to
prepare and file one or more post-effective amendments to the Public Offering
Registration Statement filed in connection with the Public Offering or any new
registration statement or posteffective amendments thereto covering equity or
debt securities of the Company, or any such securities of the Company held by
its shareholders (other than pursuant to a Form S-4 relating to a merger or
acquisition or pursuant to a Form S-8) (for purposes of this Article 7,
collectively, a "Registration Statement"), it will give written notice of its
intention to do so by registered mail ("Notice"), at least thirty (30) business
days prior to the filing of each such Registration Statement, to all holders of
the Registrable Securities. Upon the written request of such a holder (a
"Requesting Holder"), made within twenty (20) business days after receipt of the
Notice, that the Company include any of the Requesting Holder's Registrable

                                      - 9 -

<PAGE>

Securities in the proposed Registration Statement, the Company shall, as to each
such Requesting Holder, use its best efforts to effect the registration under
the Act of the Registrable Securities which it has been so requested to register
("Piggyback Registration"), at the Company's sole cost and expense and at no
cost or expense to the Requesting Holders (other than underwriting discounts and
commissions applicable to the sale of such Registrable Securities and the fees
and disbursements, if any, of counsel to the Requesting Holders).

                           7.4 Demand Registration.

                                    (a)  At any time during the Warrant Exercise
Term, any "Demand Holder" (as such term is defined in Section 7.4(d) below) of
the Registrable Securities shall have the right (which right is in addition to
the piggyback registration rights provided for under Section 7.3 hereof),
exercisable by written notice to the Company (the "Demand Registration
Request"), to have the Company prepare and file with the Securities and Exchange
Commission (the "Commission"), on one occasion, at the sole expense of the
Company, a Registration Statement and such other documents, including a
prospectus, as may be necessary (in the opinion of both counsel for the Company
and counsel for such Demand Holder), in order to comply with the provisions of
the Act, so as to permit a public offering and sale of the Registrable
Securities by the holders thereof for nine (9) consecutive months.

                                     - 10 -

<PAGE>

                                    (b) The Company covenants and agrees to give
written notice of any Demand Registration Request to all holders of the
Registrable Securities within ten (10) days from the date of the Company's
receipt of any such Demand Registration Request. After receiving notice from the
Company as provided in this Section 7.4(b), holders of Registrable Securities
may request the Company to include their Registrable Securities in the
Registration Statement to be filed pursuant to Section 7.4(a) hereof by
notifying the Company of their decision to have such securities included within
ten (10) days of their receipt of the Company's notice.

                                    (c)  In addition to the registration rights
provided for under Section 7.3 hereof and subsection (a) of this Section 7.4, at
any time during the Warrant Exercise Term, any Demand Holder (as defined below
in Section 7.4(d)) of Registrable Securities shall have the right, exercisable
by written request to the Company, to have the Company prepare and file with the
Commission, on one occasion in respect of all holders of Registrable Securities,
a Registration Statement so as to permit a public offering and sale of such
Registrable Securities for nine (9) consecutive months; provided, however, that
all costs incident thereto shall be at the expense of the holders of the
Registrable Securities included in such Registration Statement. If a Demand
Holder shall give notice to the Company at any time of its or their desire to
exercise the registration right granted pursuant to this Section 7.4(c), then
within ten (10) days after

                                     - 11 -

<PAGE>

the Company's receipt of such notice, the Company shall give notice to the other
holders of Registrable Securities advising them that the Company is proceeding
with such registration and offering to include therein the Registrable
Securities of such holders, provided they furnish the Company with such
appropriate information in connection therewith as the Company shall reasonably
request in writing.

                                  (d)  The term "Demand Holder" as used in this
Section 7.4 shall mean any holder or any combination of holders of Registrable
Securities, if included in such holders' Registrable Securities are that
aggregate number of shares of Preferred Stock (including Shares already issued
and/or Shares issuable pursuant to the exercise of Warrant No. 1 and Underlying
Shares already issued and/or Underlying Shares issuable pursuant to the exercise
of Redeemable Warrants issued or issuable pursuant to exercise of Warrant No. 2
(the "Total Preferred Shares")) as would constitute 50% or more of the aggregate
number of such total Preferred Shares; provided that, for purposes of such
calculation, if any Holder has converted any Shares and/or Underlying Shares
into Conversion Shares prior to the time that any notice requesting registration
pursuant to this Section 7.4 is given, and the Conversion Shares so issued are
still deemed Registrable Securities hereunder, such conversion shall be
disregarded for purposes of such calculation.

                           7.5 Covenants of the Company With Respect to
Registration.  The Company covenants and agrees as follows:

                                     - 12 -

<PAGE>

                                    (a)  In connection with any registration
under Section 7.4 hereof, the Company shall file the Registration Statement as
expeditiously as possible, but in no event later than thirty (30) business days
following receipt of any demand therefor (unless delayed by the failure of a
holder of Registrable Securities to promptly furnish such information necessary
to complete such registration statement), shall use its best efforts to have any
such Registration Statement declared effective at the earliest possible time,
and shall furnish each holder of Registrable Securities such number of
prospectuses as shall reasonably be requested.

                                    (b)  The Company shall pay all costs, fees
and expenses in connection with all Registration Statements filed pursuant to
Sections 7.3 and 7.4(a) hereof (excluding any underwriting discounts and
commissions which may be incurred in connection with the sale of any Registrable
Securities), including, without limitation, the Company's legal and accounting
fees, printing expenses, and blue sky fees and expenses. The holders of
Registrable Securities included in any Registration Statement filed pursuant to
Section 7.4(c) hereof will pay all costs, fees and expenses in connection with
such Registration Statement, including their own legal fees and expenses, if
any.

                                    (c)  The Company will take all reasonably
necessary action which may be required in qualifying or registering the
Registrable Securities included in a Registration Statement for offering and
sale under the securities or blue sky


                                     - 13 -

<PAGE>

laws of such states as are reasonably requested by the holders of such
securities, provided that the Company shall not be obligated to execute or file
any general consent to service of process or to qualify as a foreign corporation
to do business under the laws of any such jurisdiction.

                                    (d)  The Company shall indemnify any holder
of the Registrable Securities to be sold pursuant to any Registration Statement
and any underwriter or person deemed to be an underwriter under the Act and each
person, if any, who controls such holder or underwriter or person deemed to be
an underwriter within the meaning of Section 15 of the Act or Section 20(a) of
the Securities Exchange Act of 1934, as amended ("Exchange Act"), against all
loss, claim, damage, expense or liability (including all expenses reasonably
incurred in investigating, preparing or defending against any claim whatsoever)
to which any of them may become subject under the Act, the Exchange Act or
otherwise, arising from such Registration Statement to the same extent and with
the same effect as the provisions pursuant to which the Company has agreed to
indemnify the Underwriter contained in Section 6 of the Underwriting Agreement
and to provide for just and equitable contribution as set forth in Section 7 of
the Underwriting Agreement.

                                    (e)  Any holder of Registrable Securities to
be sold pursuant to a Registration Statement, and its successors
and assigns, shall severally, and not jointly, indemnify, the

                                     - 14 -

<PAGE>

Company, its officers and directors and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against all loss, claim, damage, expense or liability (including
all expenses reasonably incurred in investigating, preparing or defending
against any claim whatsoever) to which they may become subject under the Act,
the Exchange Act or otherwise, arising from information furnished in writing by
or on behalf of such holder, or its successors or assigns, for specific
inclusion in such Registration Statement to the same extent and with the same
effect as the provisions contained in Section 6 of the Underwriting Agreement
pursuant to which the Underwriter has agreed to indemnify the Company and to
provide for just and equitable contribution as set forth in Section 6 of the
Underwriting Agreement.

                                    (f)  Nothing contained in this Agreement
shall be construed as requiring any Holder to exercise his Warrants prior to the
initial filing of any Registration Statement or the effectiveness thereof.

                                    (g)  If the Company shall fail to materially
comply with the provisions of this Article 7, the Company shall, in addition to
any other equitable or other relief available to the holders of Registrable
Securities, be liable for any or all actual damages (but not punitive or
consequential damages) sustained by the holders of Registrable Securities,
requesting registration of their Registrable Securities.

                                     - 15 -

<PAGE>

                                    (h)  The Company shall not permit the
inclusion of any securities other than the Registrable Securities to be included
in any Registration Statement filed pursuant to Section 7.4 hereof, or, unless
otherwise required by the terms of a contract existing on the date of this
Agreement, permit any other registration statement to be or remain effective
during the effectiveness of a Registration Statement filed pursuant to Section
7.4 hereof (except for a Form S-4 relating to a merger or acquisition or a Form
S-8 or successor form), without the prior written consent of the Demand Holders,
which consent shall not be unreasonably withheld.

                                    (i)  The Company shall deliver promptly to
each holder of Registrable Securities whose securities are included in a
Registration Statement copies of all correspondence between the Commission and
the Company, its counsel or auditors and all memoranda relating to discussions
with the Commission or its staff with respect to the Registration Statement and
permit each holder of Registrable Securities and underwriters to do such
investigation, upon reasonable advance notice, with respect to information
contained in or omitted from the Registration Statement as it deems reasonably
necessary to comply with applicable securities laws or rules of the National
Association of Securities Dealers, Inc. ("NASD"); provided that each such holder
of Registrable Securities agrees not to disclose such information without the
prior consent of the Company. Such investigation shall include access to books,
records and

                                     - 16 -

<PAGE>

properties and opportunities to discuss the business of the Company with its
officers and independent auditors, all to such reasonable extent and at such
reasonable times and as often as any such holder of Registrable Securities or
underwriter shall reasonably request.

                                    (j)  If, in connection with a registration
which includes Registrable Securities pursuant to this Article 7, the Company
shall enter into an underwriting agreement with one or more underwriters
selected for such underwriting, such agreement shall contain such
representations, warranties and covenants by the Company and such other terms as
are customarily contained in agreements of that type used by the underwriters.
The holders of Registrable Securities shall be parties to any underwriting
agreement relating to an underwritten sale of their Registrable Securities and
may, at their option, require that any or all the representations and warranties
of the Company to or for the benefit of such underwriters shall, to the extent
that they may be applicable, also be made to and for the benefit of such holders
of Registrable Securities. Such holders of Registrable Securities shall not be
required to make any representations or warranties to or agreements with the
Company or the underwriters except as they may relate to such holders of
Registrable Securities and their intended methods of distribution.

                                     - 17 -

<PAGE>

                  8. Adjustments of Exercise Price and Number of Shares.

                           8.1 Stock Dividend, Split, etc. In case the Company
shall (i) declare a dividend or make a distribution on its outstanding shares of
Preferred Stock in shares of Preferred Stock, (ii) subdivide or reclassify its
outstanding shares of Preferred Stock into a greater number of shares, or (iii)
combine or reclassify its outstanding shares of Preferred Stock into a smaller
number of shares, the exercise price under Warrant No. 1 in effect at the time
of the record date for such dividend or distribution or of the effective date of
such subdivision, combination or reclassification shall be adjusted so that it
shall equal the price determined by multiplying the exercise price by a
fraction, the denominator of which shall be the number of shares or Preferred
Stock outstanding after giving effect to such action, and the numerator of which
shall be the number of shares of Preferred Stock outstanding immediately prior
to such action. Public Agreement, in the event an adjustment to the Exercise
Price is effected pursuant to this Section 8.1.

                           8.2 Rights or Warrants. In the case the Company shall
fix a record date for the issuance of rights or warrants to all holders of its
Preferred Stock entitling them to subscribe for or purchase shares of Preferred
Stock (or securities convertible into Preferred Stock) as a price (the
"Subscription Price") (or having a conversion price per share) less than the
current market price of the Preferred Stock (as defined in

                                     - 18 -

<PAGE>

Section 8.5 below) on such record date, the exercise price shall be adjusted so
that it shall thereafter equal the price determined by multiplying the number of
Shares subject to Warrant No. 1 by the product of (i) the exercise price in
effect immediately prior to the date of such issuance and (ii) a fraction, the
numerator of which shall be the sum of the number of shares of Preferred Stock
outstanding on such record date and the number of additional shares of Preferred
Stock which the aggregate offering price of the total number of shares of
Preferred Stock so offered (or the aggregate conversion price of the convertible
securities so offered) would purchase at such current market price per share of
the Preferred Stock, and the denominator of which shall be the sum of the number
of shares of Preferred Stock outstanding on such record date and the number of
additional shares of Preferred Stock offered for subscription or purchase (or
into which the convertible securities so offered are convertible). Such
adjustment shall be made successively whenever such rights or warrants are
issued and shall become effective immediately after the record date for the
determination of shareholders entitled to receive such rights or warrants; and
to the extent that shares of Preferred Stock are not delivered (or securities
convertible into Preferred Stock are not delivered) after the expiration of such
rights or warrants the exercise price shall be readjusted to the exercise price
which would then be in effect had the adjustments made upon the issuance of such
rights or warrants been made upon the basis of

                                     - 19 -

<PAGE>

delivery of only the number of shares of Preferred Stock (or securities
convertible into Preferred Stock) actually delivered.

                           8.3 Evidences of Indebtedness or Assets. In case the
Company shall hereafter distribute to the holders of its Preferred Stock
evidences of its indebtedness or assets (excluding cash dividends or
distributions of securities of the type referred to in Section 8.1 above) or
subscription rights or warrants (excluding those referred to in Section 8.2
above), then in each such case the exercise price of Warrant No. 1 in effect
thereafter shall be determined by multiplying the number of Shares then subject
to Warrant No. 1 by the product of (i) the exercise price in effect immediately
prior thereto and (ii) a fraction, the numerator of which shall be the total
number of shares of Preferred Stock outstanding multiplied by the current market
price per share of Preferred Stock (as defined in Section 8.5 below), less the
fair market value (as determined by the Company's Board of Directors) of said
assets or evidences of indebtedness so distributed or of such rights or
warrants, and the denominator of which shall be the total number of shares of
Preferred Stock outstanding multiplied by such current market price per share of
Preferred Stock. Such adjustment shall be made successively whenever such a
record date is fixed. Such adjustment shall be made whenever any such
distribution is made and shall become effectively immediately after the record
date for the determination of shareholders entitled to receive such
distribution.

                                     - 20 -

<PAGE>

                           8.4 Adjustment of Number of Shares. Whenever the
Exercise Price payable upon exercise of Warrant No. 1 is adjusted pursuant to
Sections 8.1, 8.2 or 8.3 above, the number of Shares purchasable upon exercise
of Warrant No. 1 shall simultaneously be adjusted by multiplying the number of
Shares initially issuable upon exercise of Warrant No. 1 by the exercise price
in effect on the date hereof and dividing the product so obtained by the
exercise price, as adjusted.

                           8.5 Determination of Current Market Value. For the
purpose of any computation under Sections 8.2 and 8.3 above, the current market
price per share of Preferred Stock at any date shall be deemed to be the average
of the daily closing prices for twenty (20) consecutive business days before
such date. The closing price for each day shall be the last sale price regular
way or, in case no such reported sale takes place on such day, the average of
the last reported bid and asked prices regular way, in either case on the
principal national securities exchange on which the Preferred Stock is admitted
to trading or listed, or as reported by National Association of Securities
Dealers, Inc. Automatic Quotation System ("NASDAQ") or other similar
organization if NASDAQ is no longer reporting such information, or if not so
available, the fair market price as determined by the Board of Directors.

                           8.6 No Adjustment for De Minimus Adjustment. No
adjustment in the Exercise Price shall be required unless such adjustment would
require an increase or decrease of at least ten


                                     - 21 -

<PAGE>

cents ($0.10) in such price; provided, however, that any adjustments which by
reason of this Section 8.6 are not required to be made shall be carried forward
and taken into account in any subsequent adjustment required to be made
hereunder. All calculations under this Article 8 shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may be. Anything in
this Article 8 to the contrary notwithstanding, the Company shall be entitled,
but shall not be required, to make such changes in the exercise price, in
addition to those required by this Article 8, as it shall determine, in its sole
discretion, to be advisable in order that any dividend or distribution in shares
of Preferred Stock, or any subdivision, reclassification or combination of
Preferred Stock, hereafter made by the Company shall not result in any Federal
income tax liability to the holders of Preferred Stock or securities convertible
into Preferred Stock (including Redeemable Warrants issuable upon exercise of
Warrant No. 2).

                           8.7 Notice. Whenever on exercise price is adjusted,
as herein provided, the Company shall promptly, but no later than 10 days after
any request for such an adjustment by the Holder, cause a notice setting forth
the adjusted exercise price and adjusted number of Shares and/or Warrants
issuable upon exercise of the Warrants and, if requested, information describing
the transactions giving rise to such adjustments, to be mailed to the Holder, at
the address set forth herein, and shall cause a certified copy thereof to be
mailed to its transfer

                                     - 22 -

<PAGE>

agent, if any. The Company may retain a firm of independent certified public
accountants selected by the Board of Directors (who may be the regular
accountants employed by the Company) to make any computation required by this
Section 8, and a certificate signed by such firm shall be conclusive evidence of
the correctness of such adjustment.

                           8.8 Other Securities. In the event that at any time,
as a result of any adjustment made pursuant to this Article 8, the Holder
thereafter shall become entitled to receive any securities of the Company other
than Preferred Stock and Redeemable Warrants, thereafter the number of such
other securities receivable upon exercise of the Warrants 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 Preferred Stock and Redeemable
Warrants contained in Sections 8.1 to 8.6, inclusive above.

                  9. Exchange and Replacement of Warrant Certificates.

                           9.1 Exchange. Each Warrant Certificate is
exchangeable without expense, upon the surrender hereof by the registered Holder
at the principal executive office of the Company, for a new Warrant Certificate
of like tenor and date representing in the aggregate the right to purchase the
same number of Shares or Redeemable Warrants, as the case may be, in such
denominations as shall be designated by the Holder thereof at the time of such
surrender.

                                     - 23 -

<PAGE>

                           9.2 Replacement. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of any Warrant Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it, and
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of any Warrants, if mutilated, the Company will
make and deliver a new Warrant Certificate of like tenor, in lieu thereof.

                  10. Elimination of Fractional Interests. The Company shall not
be required to issue certificates representing fractions of shares of Preferred
Stock or Redeemable Warrants and shall not be required to issue scrip or pay
cash in lieu of fractional interests, it being the intent of the parties that
all fractional interests shall be eliminated by rounding any fraction up to the
nearest whole number of shares of Preferred Stock or Redeemable Warrants, as the
case may be.

                  11. Reservation and Listing of Securities. The Company shall
at all times reserve and keep available out of its authorized shares of
Preferred Stock, solely for the purpose of issuance upon the exercise of Warrant
No. 1 and the exercise of the Redeemable Warrants subject to Warrant No. 2, such
number of shares of Preferred Stock as shall be issuable upon the exercise
thereof. The Company covenants and agrees that, upon exercise of Warrant No. 1
and payment of the exercise price therefor, all shares of Preferred Stock
issuable upon such exercise shall be

                                     - 24 -

<PAGE>

duly and validly issued, fully paid, non-assessable and not subject to the
preemptive rights of any shareholder, and that, upon exercise of Warrant No. 2
and payment of the exercise price therefor, the Redeemable Warrants will be
valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms. As long as the Warrants shall be outstanding, the
Company shall use its best efforts to cause all shares of Preferred Stock and
all Redeemable Warrants issuable upon the exercise of the Warrants, as well as
the Underlying Shares and the Conversion Shares, to be listed on or quoted by
NASDAQ or listed on such national securities exchanges as reasonably requested
by the Underwriter.

                  12. Notices to Warrant Holders. Nothing contained in this
Agreement shall be construed as conferring upon the Holder or Holders the right
to vote or to consent or to receive notice as a shareholder in respect of any
meetings of shareholders for the election of directors or any other matter, or
as having any rights whatsoever as a shareholder of the Company. If, however, at
any time prior to the expiration of the Warrants and their exercise, any of the
following events shall occur:

                           (a) the Company shall take a record of the holders of
                  its shares of Preferred Stock and/or Redeemable Warrants for
                  the purpose of entitling them to receive a dividend or
                  distribution payable otherwise than in cash, or a cash
                  dividend or distribution payable otherwise than out of current
                  or retained

                                     - 25 -

<PAGE>

                  earnings, as indicated by the accounting treatment of
                  such dividend or distribution on the books of the
                  Company; or

                           (b) the Company shall offer to all the holders of its
                  Preferred Stock and/or Redeemable Warrants any additional
                  shares of capital stock of the Company or securities
                  convertible into or exchangeable for shares of capital stock
                  of the Company, or any option, right or warrant to subscribe
                  therefor; or

                           (c) a dissolution, liquidation or winding up of the
                  Company (other than in connection with a consolidation or
                  merger) or a sale of all or substantially all of its property,
                  assets and business as an entirety shall be proposed;

then, in any one or more of said events, the Company shall give written notice
of such event at least fifteen (15) days prior to the date fixed as a record
date or the date of closing the transfer books for the determination of the
shareholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, options or warrants, or entitled
to vote on such proposed dissolution, liquidation, winding up or sale. Such
notice shall specify such record date or the date of closing of the transfer
books, as the case may be. Failure to give such notice or any defect therein
shall not affect the validity of any action taken in connection with the
declaration or payment of any such dividend or distribution, or

                                     - 26 -

<PAGE>

the issuance of any convertible or exchangeable securities or subscription
rights, options or warrants, or any proposed dissolution, liquidation, winding
up or sale.

                  13. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
duly made when delivered, or mailed by registered or certified mail, return
receipt requested:

                           (a) If to a registered Holder of the arrants, to the
address of such Holder as shown on the books of the Company; or

                           (b) If to the Company, to Rensselaer Technology Park,
185 Jordan Road, Troy, New York 12180, Attn: Chairman, or to such other address
as the Company may designate by notice to the Holders.

                  14. Supplements and Amendments. The Company and the
Underwriter may from time to time supplement or amend this Agreement without the
approval of any Holders of Warrant Certificates in order to cure any ambiguity,
to correct or supplement any provision contained herein which may be defective
or inconsistent with any provisions herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and the
Underwriter may deem necessary or desirable and which the Company and the
Underwriter deem not to adversely affect the interests of the Holders of Warrant
Certificates.

                                     - 27 -

<PAGE>

                  15. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company and the Holders inure to the
benefit of their respective successors and assigns hereunder.

                  16. Termination. This Agreement shall terminate at the close
of business on ______________, 2004. Notwithstanding the foregoing, this
Agreement will terminate on any earlier date when all Warrants have been
exercised and all the Shares issuable upon exercise of Warrant No. 1 and all the
Redeemable Warrants issuable upon exercise of Warrant No. 2 (or the Underlying
Shares) have been resold to the public; provided, however, that the provisions
of Section 7.5 shall survive such termination until the close of business on
_____________, 2007.

                  17. Governing Law. This Agreement and each Warrant Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of New York and for all purposes shall be construed in accordance with the
laws of said State.

                  18. Benefits of This Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the Company
and the Underwriter and any other registered holder or holders of the Warrant
Certificates, Warrants or the underlying securities any legal or equitable
right, remedy or claim under this Agreement; and this Agreement shall be for the
sole and exclusive benefit of the Company and the Underwriter and any other
holder or holders of the Warrant Certificates, Warrants or the underlying
securities.

                                     - 28 -

<PAGE>

                  19. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and such counterparts shall together constitute but one and
the same instrument.













                                     - 29 -

<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first above written.

[SEAL]                                         IFS INTERNATIONAL, INC.

                                               By:______________________________
                                                  Name:
                                                  Title:

Attest:

___________________________
Name:
Title

                                               DUKE & CO., INC.

                                               By:______________________________
                                                  Name:
                                                  Title:

Attest:

___________________________
Name:
Title

                                     - 30 -

<PAGE>

                                                                       EXHIBIT A

THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (i) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE EXTENT APPLICABLE,
PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (iii) UPON THE DELIVERY BY THE HOLDER TO
THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE
COMPANY, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS
AVAILABLE.

THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO 
HEREIN.

                            EXERCISABLE ON OR BEFORE
                  5:00 P.M., NEW YORK TIME, _____________, 2002

No. W-                                                     ___________  Warrants

                               WARRANT CERTIFICATE

                  This Warrant Certificate certifies that _____________or
registered assigns is the registered holder of ___________Warrants to purchase,
at any time from ______________, 1998 until 5:00 P.M. New York City time on
_____________, 2002 ("Expiration Date"), up to ____________shares ("Shares") of
fully-paid and non-assessable preferred stock, par value $.001 per share
("Preferred Stock"), of IFS International, Inc., a Delaware corporation (the
"Company"), at the initial exercise price, subject to adjustment in certain
events (the "Exercise Price"), of $ ________ per Share upon surrender of this
Warrant Certificate and payment of the Exercise Price at an office or agency of
the Company, but subject to the conditions set forth herein and in the warrant
agreement dated as of _____________, 1997 between the Company and Duke & Co.,
Inc. (the "Warrant Agreement"). Payment of the Exercise Price may be made in
cash, or by certified or official bank check in New York Clearing House funds
payable to the order of the Company, or any combination of cash or check.

                  No Warrant may be exercised after 5:00 P.M., New York City
time, on the Expiration Date, at which time all Warrants evidenced hereby,
unless exercised prior thereto, shall thereafter be void.

                  The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Warrants issued pursuant to


                                     - 31 -

<PAGE>

the Warrant Agreement, which Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument and is hereby referred to in a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Company and the holders (the words "holders" or
"holder" meaning the registered holders or registered holder) of the Warrants.

                  The Warrant Agreement provides that upon the occurrence of
certain events, the Exercise Price and/or number of the Company's securities
issuable thereupon may, subject to certain conditions, be adjusted. In such
event, the Company will, at the request of the holder, issue a new Warrant
Certificate evidencing the adjustment in the Exercise Price and the number
and/or type of securities issuable upon the exercise of the Warrants; provided,
however, that the failure of the Company to issue such new Warrant Certificates
shall not in any way change, alter, or otherwise impair, the rights of the
holder as set forth in the Warrant Agreement.

                  Upon due presentment for registration of transfer of this
Warrant Certificate at an office or agency of the Company, a new Warrant
Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Warrants shall be issued to the transferee(s) in
exchange for this Warrant Certificate, subject to the limitations provided
herein and in the Warrant Agreement, without any charge except for any tax, or
other governmental charge imposed in connection therewith.

                  Upon the exercise of less than all of the Warrants evidenced
by this Certificate, the Company shall forthwith issue to the holder hereof a
new Warrant Certificate representing such number of unexercised Warrants.

                  The Company may deem and treat the registered holder(s) hereof
as the absolute owner(s) of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the purpose
of any exercise hereof, and of any distribution to the holder(s) hereof, and for
all other purposes, and the Company shall not be affected by any notice to the
contrary.

                  All terms used in this Warrant Certificate which are defined
in the Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.


                                     - 32 -

<PAGE>

                  IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed under its corporate seal.

Dated:  ____________, 1997                   IFS INTERNATIONAL, INC.

                                             By:______________________________
                                                Name:
                                                Title:

Attest:

________________________________
Name:
Title

                                     - 33 -

<PAGE>

                         [FORM OF ELECTION TO PURCHASE]

         The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase Shares and herewith tenders
in payment for such Shares cash or a certified or official bank check payable in
New York Clearing House Funds to the order of __________________________ in the
amount of $_________, all in accordance with the terms hereof. The undersigned
requests that a certificate for such Shares be registered in the name of
__________________________________, whose address is
________________________________ and that such Certificate be delivered to whose
address is ___________________________________.

Dated:                               Signature:_____________________________

                                     (Signature must conform in
                                     all respects to name of
                                     holder as specified on the
                                     face of the Warrant
                                     Certificate.)

                      _____________________________________

                      _____________________________________
                        (Insert Social Security or Other
                          Identifying Number of Holder)

                                     - 34 -

<PAGE>

                              [FORM OF ASSIGNMENT]

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

         FOR VALUE RECEIVED _______________________________ hereby sells,
assigns and transfers unto _____________________________________________________
(Please print name and address of transferee) this Warrant Certificate, together
with all right, title and interest therein, and does hereby irrevocably
constitute and appoint ________________________, Attorney, to transfer the
within Warrant Certificate on the books of the within-named Company, with full
power of substitution.

Dated:                            Signature:________________________________

                                  (Signature must conform in all respects
                                  to name of holder as specified on the
                                  face of the Warrant Certificate)


___________________________________
___________________________________
(Insert Social Security or Other
Identifying Number of Assignee)

                                     - 35 -

<PAGE>

                                                                       EXHIBIT B

THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (i) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE EXTENT APPLICABLE,
PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (iii) UPON THE DELIVERY BY THE HOLDER TO
THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE
COMPANY, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS
AVAILABLE.

THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.

                            EXERCISABLE ON OR BEFORE
                 5:00 P.M., NEW YORK TIME, ______________, 2002

No. W-                                                 _______________  Warrants

                               WARRANT CERTIFICATE

         This Warrant Certificate certifies that _____________or registered
assigns is the registered holder of __________ Warrants to purchase, at any time
from _____________, 1998 until 5:00 P.M. New York City time on ______________,
2002 ("Expiration Date"), up to _____________redeemable Series A Convertible
Preferred Stock purchase warrants ("Redeemable Warrants"), of IFS International,
Inc., a Delaware corporation (the "Company"), at the initial exercise price,
subject to adjustment in certain events (the "Exercise Price"), of $__________
per Redeemable Warrant upon surrender of this Warrant Certificate and payment of
the Exercise Price at an office or agency of the Company, but subject to the
conditions set forth herein and in the warrant agreement dated as of
_____________, 1997 between the Company and Duke & Co., Inc. (the "Warrant
Agreement"). Payment of the Exercise Price may be made in cash, or by certified
or official bank check in New York Clearing House funds payable to the order of
the Company, or any combination of cash or check.

         No Warrant may be exercised after 5:00 P.M., New York City time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void.

         The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the

                                     - 36 -

<PAGE>

Warrant Agreement, which Warrant Agreement is hereby incorporated by reference
in and made a part of this instrument and is hereby referred to in a description
of the rights, limitation of rights, obligations, duties and immunities
thereunder of the Company and the holders (the words "holders" or "holder"
meaning the registered holders or registered holder) of the Warrants.

         The Warrant Agreement provides that upon the occurrence of certain
events, the Exercise Price and/or number of the Company's securities issuable
thereupon may, subject to certain conditions, be adjusted. In such event, the
Company will, at the request of the holder, issue a new Warrant Certificate
evidencing the adjustment in the Exercise Price and the number and/or type of
securities issuable upon the exercise of the Warrants; provided, however, that
the failure of the Company to issue such new Warrant Certificates shall not in
any way change, alter, or otherwise impair, the rights of the holder as set
forth in the Warrant Agreement.

         Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax, or other governmental charge
imposed in connection therewith.

         Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.

         The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.

         All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.

                                     - 37 -

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.

Dated:  ____________, 1997                   IFS INTERNATIONAL, INC.

                                             By:________________________________
                                                Name:
                                                Title:

Attest:

______________________________
Name:
Title

                                     - 38 -

<PAGE>

                         [FORM OF ELECTION TO PURCHASE]

         The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase Redeemable Warrants and
herewith tenders in payment for such Redeemable Warrants cash or a certified or
official bank check payable in New York Clearing House Funds to the order of
____________________________ in the amount of $ _________________, all in
accordance with the terms hereof. The undersigned requests that a certificate
for such Redeemable Warrants be registered in the name of
___________________________, whose address is _________________________ and that
such Certificate be delivered to whose address is __________________________ .

Dated:                                Signature:________________________

                                      (Signature must conform in
                                      all respects to name of
                                      holder as specified on the
                                      face of the Warrant
                                      Certificate.)

                      ___________________________________

                      ___________________________________
                        (Insert Social Security or Other
                          Identifying Number of Holder)

                                     - 39 -

<PAGE>

                              [FORM OF ASSIGNMENT]

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


         FOR VALUE RECEIVED _______________________________ hereby sells, 
assigns and transfers unto _____________________________________________________
                                   (Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ____________________,
Attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution.

Dated:                               Signature:_______________________________

                                     (Signature must conform in all respects
                                     to name of holder as specified on the
                                     face of the Warrant Certificate)

__________________________________
__________________________________
(Insert Social Security or Other
Identifying Number of Assignee)

                                     - 40 -


<PAGE>

                                WARRANT AGREEMENT


                  AGREEMENT, dated as of January ___, 1997, by and among IFS
INTERNATIONAL, INC., a Delaware corporation (the "Company"), AMERICAN STOCK
TRANSFER & TRUST COMPANY, a New York corporation, as Warrant Agent (the "Warrant
Agent"), and DUKE & CO., INC., a Florida corporation (the "Underwriter").


                               W I T N E S S E T H

                  WHEREAS, in connection with (i) a public offering pursuant to
a Registration Statement on Form SB-2 (Registration No. 333-11653) (the
"Registration Statement") filed pursuant to the Securities Act of 1933, as
amended (the "Act"), and declared effective by the Securities and Exchange
Commission on January __, 1997 of up to 1,200,000 shares of its Series A
Convertible Preferred Stock (the "Preferred Stock") and 1,700,000 Redeemable
Series A Convertible Preferred Stock Warrants (the "Warrants") (and up to
180,000 additional shares of Preferred Stock and up to 225,000 additional
Warrants covered by an over-allotment option granted by the Company to the
Underwriter), and pursuant to an underwriting agreement (the "Underwriting
Agreement") dated January ___, 1997 between the Company and the Underwriter, and
(ii) the issuance to the Underwriter or its designees of warrants to purchase up
to an aggregate of 120,000 shares of Preferred Stock and/or 170,000 Warrants
(the "Underwriter's Warrant"), the Company will issue up to an aggregate of
2,095,000 Warrants; and

                  WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing to so act, in connection
with the issuance, registration, transfer, exchange and redemption of the
Warrants, the issuance of certificates representing the Warrants, the exercise
of the Warrants, and the rights of the holders thereof;

                  NOW THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth and for the purpose of defining the terms and
provisions of the Warrants and the certificates representing the Warrants and
the respective rights and obligations thereunder of the Company, the holders of
certificates representing the Warrants and the Warrant Agent, the parties hereto
agree as follows:

                  SECTION 1.  Definitions.  As used herein, the following
terms shall have the following meanings, unless the context shall
otherwise require:

                  (a) "Corporate Office" shall mean the office of the Warrant
Agent (or its successor) at which at any particular time its principal business
shall be administered, which office is located on the date hereof at 40 Wall
Street, New York, New York 10005.


<PAGE>




                  (b) "Exercise Date" shall mean, as to any Warrant, the date on
which the Warrant Agent shall have received both (i) the Warrant Certificate
representing such Warrant, with the exercise form thereon duly executed by the
Registered Holder thereof or his attorney duly authorized in writing, and (ii)
payment in cash, or by official bank or certified check made payable to the
Warrant Agent, of an amount in lawful money of the United States of America
equal to the applicable Purchase Price.

                  (c) "Initial Warrant Exercise Date" shall mean, as to each
Warrant, January ___, 1999, except that (i) in the event the Company gives
notice of redemption of the Warrants in accordance with Section 8 hereof prior
to January __, 1999 or (ii) in the event the Company gives notice of the
mandatory conversion of the Preferred Stock prior to January ___, 1999 in
accordance with the terms and conditions of the Preferred Stock as set forth in
the Certificate of Designations and Preferences filed with the Secretary of
State of Delaware with respect to the Preferred Stock (the "Certificate of
Designations"), the exercise period of the Warrants will commence on the date on
which notice of such redemption or mandatory conversion is given by the Company.

                  (d) "Market Price" shall mean, if the Preferred Stock is
listed on a national securities exchange or admitted to unlisted trading
privileges on such exchange or listed for trading on The Nasdaq Stock Market,
the last reported sale price of the Preferred Stock on such exchange or The
Nasdaq Stock Market, as the case may be, on the applicable day or, if no such
sale is made on such day, the average of the closing bid and asked prices for
such day on such exchange or The Nasdaq Stock Market, as the case may be.

                  (e) "Preferred Stock" shall mean Series A Convertible
Preferred Stock of the Company, $.001 par value; provided, however, that the
shares issuable upon exercise of the Warrants shall include (i) in the case of
any consolidation, merger, sale or conveyance of the character referred to in
Section 9(d) hereof, the stock, securities, or property provided for in such
section or (ii) in the case of any reclassification or change in the outstanding
shares of Preferred Stock issuable upon exercise of the Warrants as a result of
a subdivision or combination or consisting of a change in par value, or from par
value to no par value, or from no par value to par value, such shares of
Preferred Stock as so reclassified or changed.

                  (f) "Purchase Price" shall mean the price to be paid upon
exercise of each Warrant in accordance with the terms hereof, which price shall
be $6.25 per share, subject to adjustment from time to time pursuant to the
provisions of Section 9 hereof, and subject to the Company's right to reduce the
Purchase Price upon notice to all Warrant Holders.


                                        2

<PAGE>



                  (g) "Redemption Price" shall mean the price at which the
Company may, at its option, redeem the Warrants in accordance with the terms
hereof, which price shall be $.10 per Warrant, subject to adjustment from time
to time pursuant to the provisions of Section 9 hereof.

                  (h) "Registered Holder" shall mean the person in whose name
any certificate representing Warrants shall be registered on the books
maintained by the Warrant Agent pursuant to Section 6.

                  (i) "Transfer Agent" shall mean American Stock Transfer &
Trust Company, as the Company's transfer agent, or its authorized successor, as
such.

                  (j) "Warrant Expiration Date" shall mean, with respect to each
Warrant, 5:00 p.m. (Eastern time) on January ___, 2002, or the Redemption Date
as defined in Section 8, whichever is earlier; provided that if such date shall
in the State of New York be a holiday or a day on which banks are authorized to
close, then 5:00 p.m. (Eastern time) on the next following day which in the
State of New York is not a holiday nor a day on which banks are authorized to
close. Upon notice to all Warrant Holders, the Company shall have the right to
extend the Warrant Expiration Date.

                  SECTION 2. Warrants and Issuance of Warrant Certificates.

                  (a) Each Warrant shall initially entitle the Registered Holder
of the Warrant Certificate representing such Warrant to purchase one (1) share
of Preferred Stock upon the exercise thereof, in accordance with the terms
hereof, subject to modification and adjustment as provided in Section 9.

                  (b) Upon execution of this Agreement, Warrant Certificates
representing the number of Warrants sold pursuant to the Underwriting Agreement
shall be executed by the Company and delivered to the Warrant Agent. Upon
written order of the Company signed by its President or Chairman or a Vice
President and by its Secretary or an Assistant Secretary, the Warrant
Certificates shall be countersigned, issued and delivered by the Warrant Agent.

                  (c) From time to time up to the Warrant Expiration Date, the
Transfer Agent shall countersign and deliver stock certificates in required
whole number denominations representing up to an aggregate of 2,095,000 shares
of Preferred Stock, subject to adjustment as described herein, upon the exercise
of Warrants in accordance with this Agreement.

                  (d) From time to time up to the Warrant Expiration Date, the
Warrant Agent shall countersign and deliver Warrant Certificates in required
whole number denominations to the persons entitled thereto in connection with
any transfer or exchange

                                        3

<PAGE>



permitted under this Agreement; provided that no Warrant Certificates shall be
issued except (i) those initially issued hereunder, (ii) those issued on or
after the Initial Warrant Exercise Date upon the exercise of fewer than all
Warrants represented by any Warrant certificate to evidence any unexercised
Warrants held by the exercising Registered Holder, (iii) those issued upon any
transfer or exchange pursuant to Section 6; (iv) those issued in replacement of
lost, stolen, destroyed or mutilated Warrant Certificates pursuant to Section 7;
(v) those issued pursuant to the Underwriter's Warrant; and (vii) those issued
at the option of the Company, in such form as may be approved by its Board of
Directors, to reflect any adjustment or change in the Purchase Price, the number
of shares of Preferred Stock purchasable upon exercise of the Warrants or the
Redemption Price therefor made pursuant to Section 9.

                  (e) Pursuant to the terms of the Underwriter's Warrant, the
Underwriter and its designees may purchase up to an aggregate of 170,000
Warrants.

                  SECTION 3. Form and Execution of Warrant Certificates.

                  (a) The Warrant Certificates shall be substantially in the
form annexed hereto as Exhibit A, and may have such letters, numbers or other
marks of identification or designation and such legends, summaries or
endorsements printed, lithographed or engraved thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement or
as may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on which
the Warrants may be listed, or to conform to usage. The Warrant Certificates
shall be dated the date of issuance thereof (whether upon initial issuance,
transfer, exchange or in lieu of mutilated, lost, stolen or destroyed Warrant
Certificates) and issued in registered form. Warrants shall be numbered serially
with the letter W on the Warrants.

                  (b) Warrant Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President or any Vice President and by its
Secretary or an Assistant Secretary, by mutual signatures or by facsimile
signatures printed thereon, and shall have imprinted thereon a facsimile of the
Company's seal. In case any officer of the Company who shall have signed any of
the Warrant Certificates shall cease to be such officer of the Company before
the date of issuance of the Warrant Certificates or before countersignature by
the Warrant Agent and issue and delivery thereof, such Warrant Certificates may
nevertheless be countersigned by the Warrant Agent, issued and delivered with
the same force and effect as though the person who signed such Warrant
Certificates had not ceased to be such officer of the Company. After
countersignature by the Warrant Agent, Warrant Certificates shall be delivered
by the Warrant Agent to the Registered Holder

                                        4

<PAGE>



without further action by the Company, except as otherwise provided by Section
4(a).

                  SECTION 4. Exercise

                  (a) Each Warrant may be exercised by the Registered Holder
thereof at any time on or after the Initial Warrant Exercise Date, but not after
the Warrant Expiration Date, upon the terms and subject to the conditions set
forth herein and in the applicable Warrant Certificate. A Warrant shall be
deemed to have been exercised immediately prior to the close of business on the
Exercise Date and the person entitled to receive the securities deliverable upon
such exercise shall be treated for all purposes as the holder upon exercise
thereof as of the close of business on the Exercise Date. As soon as practicable
on or after the Exercise Date, the Warrant Agent shall deposit the cash or check
received from the exercise of a Warrant in an account for the benefit of the
Company and shall notify the Company in writing of the exercise of the Warrants.
Promptly following, and in any event within five (5) days after the date of such
notice from the Warrant Agent, the Warrant Agent, on behalf of the Company,
shall cause to be issued and delivered by the Transfer Agent to the person or
persons entitled to receive the same a certificate or certificates for the
securities deliverable upon such exercise (plus a Warrant Certificate for any
remaining unexercised Warrants of the Registered Holder), provided that the
Warrant Agent shall refrain from causing such issuance of certificates pending
clearance of checks received in payment of the Purchase Price pursuant to such
Warrants. Upon the exercise of any Warrant and clearance of the funds received,
the Warrant Agent shall promptly remit the payment received for the Warrant to
the Company or as the Company may direct in writing. Notwithstanding anything in
the foregoing to the contrary, no Warrant will be exercisable unless at the time
of exercise the Company has filed with the Securities and Exchange Commission a
registration statement under the Act covering the shares of Preferred Stock
issuable upon exercise of such Warrant and such shares have been so registered
or qualified or deemed to be exempt under the securities laws of the state of
residence of the Registered Holder of such Warrant. The Company shall use its
best efforts to have all shares so registered or qualified on or before the date
on which the Warrants become exercisable.

                  (b) If, on the Exercise Date in respect of the exercise of any
Warrant at any time on or after the first anniversary of the date hereof, (i)
the Market Price of the Preferred Stock is greater than the then Purchase Price
of the Warrant, (ii) the exercise of the Warrant was solicited by the
Underwriter at such time as the Underwriter is a member of the National
Association of Securities Dealers, Inc. ("NASD"), (iii) the Warrant was not held
in a discretionary account, (iv) disclosure of the compensation arrangement was
made both at the time of the original offering and at the time of exercise, and
(v) the solicitation of the exercise

                                        5

<PAGE>



of the Warrant was not in violation of Rule 10b-6 (as such rule or any successor
rule may be in effect as of such time of exercise) promulgated under the
Securities Exchange Act of 1934, as amended, then the Underwriter shall be
entitled to receive, upon exercise of the Warrant(s), a fee of five percent (5%)
of the Purchase Price (the "Solicitation Fee"). Within five days after the
exercise, the Warrant Agent shall send to the Underwriter a copy of the reverse
side of the Warrant certificate relating to each Warrant exercised. In the event
the Underwriter is entitled to a Solicitation Fee with respect to any such
exercise, the Underwriter shall deliver to the Company (i) a copy of the reverse
side of the Warrant(s) and (ii) a certificate, executed by the President or Vice
President of the Underwriter, certifying that the conditions set forth above
have been met with respect to such exercise. Within five days after receipt
thereof by the Company, the Company shall remit to the Underwriter the
Solicitation Fees to which the Underwriter is entitled. The Underwriter shall
reimburse the Warrant Agent, upon request, for its reasonable expenses relating
to compliance with this Section 4(b). In addition, the Underwriter and the
Company may, at any time during business hours, examine the records of the
Warrant Agent, including its ledger of original Warrant certificates returned to
the Warrant Agent upon exercise of Warrants. The provisions of this paragraph
may not be modified, amended or deleted without the prior written consent of the
Underwriter and the Company.

                  SECTION 5. Reservation of Shares; Listing; Payment of Taxes;
etc.

                  (a) The Company has reserved, and covenants that it will at
all times reserve and keep available out of its authorized Preferred Stock,
solely for the purpose of issuance upon exercise of Warrants, such number of
shares of Preferred Stock as shall then be issuable upon the exercise of all
outstanding Warrants. The Company covenants that all shares of Preferred Stock
which shall be issuable upon exercise of the Warrants shall, at the time of
delivery, be duly and validly issued, fully paid, nonassessable and free from
all taxes, liens and charges with respect to the issuance thereof (other than
those which the Company shall promptly pay or discharge) and that upon issuance
such shares shall be listed on each national securities exchange, if any, on
which the other shares of outstanding Preferred Stock of the Company are then
listed or, if applicable, The Nasdaq Stock Market.

                  (b) The Company hereby agrees that, so long as any unexpired
Warrants remain outstanding, the Company will file such post-effective
amendments to the Registration Statement as may be necessary to permit it to
deliver to each person exercising a Warrant a prospectus meeting the
requirements of Section 10(a)(3) of the Act and otherwise complying therewith,
and will deliver such a prospectus to each such person.


                                        6

<PAGE>



                  (c) The Company shall pay all documentary, stamp or similar
taxes and other governmental charges that may be imposed with respect to the
issuance of Warrants or the issuance or delivery of any shares upon exercise of
the Warrants; provided, however, that if the shares of Preferred Stock are to be
delivered in a name other than the name of the Registered Holder of the Warrant
Certificate representing any Warrant being exercised, then no such delivery
shall be made unless the person requesting the same had paid to the Warrant
Agent the amount of transfer taxes or charges incident thereto, if any.

                  (d) The Warrant Agent is hereby irrevocably authorized to
requisition the Company's Transfer Agent from time to time for certificates
representing shares of Preferred Stock issuable upon exercise of the Warrants,
and the Company will authorize the Transfer Agent to comply with all such proper
requisitions. The Company will file with the Warrant Agent a statement setting
forth the name and address of the Transfer Agent of the Company for shares of
Preferred Stock issuable upon exercise of the Warrants, unless the Warrant Agent
and the Transfer Agent are the same entity.

                  SECTION 6. Exchange and Registration of Transfer

                  (a) Warrant Certificates may be exchanged for other Warrant
Certificates representing an equal aggregate number of Warrants of the same
class or may be transferred in whole or in part. Warrant Certificates to be
exchanged shall be surrendered to the Warrant Agent at its Corporate Office, and
upon satisfaction of all the terms and provisions hereof, the Company shall
execute and the Warrant Agent shall countersign, issue and deliver in exchange
therefor the Warrant Certificate or Certificates which the Registered Holder
making the exchange shall be entitled to receive.

                  (b) The Warrant Agent shall keep at its office books in which,
subject to such reasonable regulations as it may prescribe, it shall register
Warrant Certificates and the transfer thereof in accordance with its regular
practice. Upon due presentment for registration of transfer of any Warrant
Certificate at such office, the Company shall execute and the Warrant Agent
shall issue and deliver to the transferee or transferees a new Warrant
Certificate or Certificates representing the aggregate number of Warrants so
transferred.

                  (c) With respect to all Warrant Certificates presented for
registration or transfer, or for exchange or exercise, the subscription form on
the reverse thereof shall be duly endorsed, or be accompanied by a written
instrument or instruments of transfer and subscription, in form satisfactory to
the Company and the Warrant Agent, duly executed by the Registered Holder or his
attorney-in-fact authorized in writing.

                                        7

<PAGE>




                  (d) A service charge may be imposed by the Warrant Agent for
any exchange or registration of transfer of Warrant Certificates requested by a
Registered Holder. In addition, the Company may require payment by such
Registered Holder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.

                  (e) All Warrant Certificates surrendered for exercise or for
exchange in case of mutilated Warrant Certificates shall be promptly cancelled
by the Warrant Agent and thereafter retained by the Warrant Agent until
termination of this Agreement or resignation as Warrant Agent, or, with the
prior written consent of the Underwriter, disposed of or destroyed, at the
direction of the Company.

                  (f) Prior to due presentment for registration of transfer
thereof, the Company and the Warrant Agent may deem and treat the Registered
Holder of any Warrant Certificate as the absolute owner thereof and of each
Warrant represented thereby (notwithstanding any notations of ownership or
writing thereon made by anyone other than a duly authorized officer of the
Company or the Warrant Agent) for all purposes and shall not be affected by any
notice to the contrary. The Warrants, which are being publicly offered with
shares of Preferred Stock pursuant to the Underwriting Agreement, may be
purchased separately from the shares and will be immediately transferable
separately from the Preferred Stock.

                  SECTION 7. Loss or Mutilation. Upon receipt by the Company and
the Warrant Agent of evidence satisfactory to them of the ownership of and loss,
theft, destruction or mutilation of any Warrant Certificate and (in case of
loss, theft or destruction) of indemnity satisfactory to them, and (in the case
of mutilation) upon surrender and cancellation thereof, the Company shall
execute and the Warrant Agent shall (in the absence of notice to the Company
and/or Warrant Agent that the Warrant Certificate has been acquired by a bona
fide purchaser) countersign and deliver to the Registered Holder in lieu thereof
a new Warrant Certificate of like tenor representing an equal aggregate number
of Warrants. Applicants for a substitute Warrant Certificate shall comply with
such other reasonable regulations and pay such other reasonable charges as the
Warrant Agent may prescribe pursuant to Section 6(d) or otherwise.

                  SECTION 8. Redemption

                  (a) Commencing January ___, 1998, on not less than thirty (30)
days prior written notice, the Warrants may, with the prior consent of the
Underwriter, be redeemed by the Company at the Redemption Price, provided the
Market Price of the Company's Preferred Stock equals or exceeds $8.00 per share,
subject to adjustment, for 20 consecutive trading days ending not more than
three days prior to the date on which the Company gives notice of

                                        8

<PAGE>



redemption. All Warrants must be redeemed if any of the Warrants are redeemed.

                  (b) In case the Company shall desire to exercise its right to
so redeem the Warrants, it shall request the Warrant Agent, or the Underwriter,
to mail a notice of redemption to each of the Registered Holders of the Warrants
to be redeemed, first class, postage prepaid, not earlier than the forty-fifth
(45th) day before the date fixed for redemption and not later than the thirtieth
(30th) day before the date fixed for redemption, at such Registered Holder's
last address as it shall appear on the records of the Warrant Agent. Any notice
mailed in the manner provided herein shall be conclusively presumed to have been
duly given whether or not the Registered Holder receives such notice.

                  (c) The notice of redemption shall specify (i) the Redemption
Price, (ii) the date fixed for redemption, (iii) the place where the Warrant
Certificates shall be delivered and the Redemption Price paid, (iv) that the
Underwriter will assist each Registered Holder of a Warrant in connection with
the exercise thereof (if the Underwriter has conducted, or caused to be
conducted, the mailing) and (v) that the right to exercise the Warrant shall
terminate at 5:00 p.m. (Eastern time) on the business day immediately preceding
the date fixed for redemption (the "Redemption Date"). No failure to mail such
notice nor any defect therein or in the mailing thereof shall affect the
validity of the proceedings for such redemption except as to a holder (a) to
whom notice was not mailed or (b) whose notice was defective. An affidavit of
the Warrant Agent or of the Secretary or an Assistant Secretary of the
Underwriter or the Company that notice of redemption has been mailed shall, in
the absence of fraud, be prima facie evidence of the facts stated therein.

                  (d) Any right to exercise a Warrant that has been called for
redemption shall terminate at 5:00 p.m. (Eastern time) on the business day
immediately preceding the redemption date. On and after the Redemption Date,
Holders of the redeemed Warrants shall have no further rights except to receive,
upon surrender of the redeemed Warrant, the Redemption Price.

                  (e) From and after the date specified for redemption, the
Company shall, at the place specified in the notice of redemption, upon
presentation and surrender to the Company by or on behalf of the Registered
Holder thereof of one or more Warrants to be redeemed, deliver or cause to be
delivered to or upon the written order of such Holder a sum in cash equal to the
Redemption Price of each such Warrant. From and after the date fixed for
redemption and upon the deposit or setting aside by the Company of a sum
sufficient to redeem all the Warrants called for redemption, such Warrants shall
expire and become void and all rights hereunder and under the Warrant
Certificates, except the right to receive payment of the Redemption Price, shall
cease.

                                        9

<PAGE>




                  SECTION 9. Adjustment of Exercise Price and Number of Shares
of Common Stock or Warrants.

                  (a) (i) Subject to the exceptions referred to in Section 9(h),
in the event the Company shall, at any time or from time to time after the date
hereof, sell any shares of Preferred Stock for a consideration per share less
than the Market Price of the Preferred Stock on the date of sale or issue any
shares of Preferred Stock as a stock dividend to the holders of Preferred Stock,
or subdivide or combine the outstanding shares of Preferred Stock into a greater
or lesser number of shares (any such sale, issuance, subdivision or combination
being herein called a "Change of Shares"), then, and thereafter upon each
further Change of Shares, the applicable Purchase Price in effect immediately
prior to such Change of Shares shall be changed to a price (including any
applicable fraction of a cent) determined by multiplying the Purchase Price in
effect immediately prior thereto by a fraction, the numerator of which shall be
the sum of (A) the total number of shares of Preferred Stock outstanding
immediately prior to such Change of Shares and (B) the number of shares of
Preferred Stock which the aggregate consideration received by the Company upon
such sale, issuance, subdivision or combination (determined in accordance with
subsection g(vi) below) could have purchased at the then current Purchase Price,
and the denominator of which shall be the total number of shares of Preferred
Stock outstanding immediately after such Change of Shares.

                           (ii)  In the event that the Company shall at any
time or from time to time issue or sell any shares of its Common Stock for a
consideration per share of Common Stock less than the then applicable Purchase
Price and more than the then applicable Stated Price of the Preferred Stock (as
determined pursuant to the terms of the Certificate of Designation. The Purchase
Price shall thereupon be reduced to a price determined by dividing (x) an amount
equal to the sum of (i) the number of shares of Common Stock of the Company
outstanding immediately prior to such issue or sale multiplied by the then
applicable Purchase Price plus (ii) the consideration, if any, received by the
Company upon such issuance or sale by (y) the total number of shares of Common
Stock of the Company outstanding immediately after such issuance or sale. For
purposes of determining the number of shares of Common Stock outstanding before
and after such issuance or sale, and the consideration received in connection
therewith, the provisions of Section C.8. of the Certificate of Designations
shall be deemed to apply in all respects.

                  (b) Upon each adjustment of the applicable Purchase Price
pursuant to this Section 9, the total number of shares of Preferred Stock
purchasable upon the exercise of each Warrant shall (subject to the provisions
contained in Section 9(c)) be such number of shares (calculated to the nearest
tenth) purchasable at the applicable Purchase Price immediately prior to such
adjustment

                                       10

<PAGE>



multiplied by a fraction, the numerator of which shall be the applicable
Purchase Price in effect immediately prior to such adjustment and denominator of
which shall be the applicable Purchase Price in effect immediately after such
adjustment.

                  (c) The Company may elect, upon any adjustment of the
applicable Purchase Price hereunder, to adjust the number of Warrants
outstanding, in lieu of adjusting the number of shares of Preferred Stock
purchasable upon the exercise of each Warrant as hereinabove provided, so that
each Warrant outstanding after such adjustment shall represent the right to
purchase one share of Preferred Stock. Each Warrant held of record prior to such
adjustment of the number of Warrants shall become that number of Warrants
(calculated to the nearest tenth) determined by multiplying the number one by a
fraction, the numerator of which shall be the applicable Purchase Price in
effect immediately prior to such adjustment and the denominator of which shall
be the applicable Purchase Price in effect immediately after such adjustment.
Upon each such adjustment of the number of Warrants, the Redemption Price in
effect immediately prior to such adjustment also shall be adjusted by
multiplying such Redemption Price by a fraction, the numerator of which shall be
the Purchase Price in effect immediately after such adjustment and the
denominator of which shall be the Purchase Price in effect immediately prior to
such adjustment. Upon each adjustment of the number of Warrants pursuant to this
Section 9, the Company shall, as promptly as practicable, cause to be
distributed to each Registered Holder of Warrant Certificates on the date of
such adjustment Warrant Certificates evidencing, subject to Section 10, the
number of additional Warrants, if any, to which such Holder shall be entitled as
a result of such adjustment or, at the option of the Company, cause to be
distributed to such Holder in substitution and replacement for the Warrant
Certificates held by such Holder prior to the date of adjustment (and upon
surrender thereof, if required by the Company) new Warrant Certificates
evidencing the number of Warrants to which such Holder shall be entitled after
such adjustment.

                  (d) Unless the Warrants have been called for redemption in
connection with the mandatory conversion of the Preferred Stock as a result of
such transaction, in the case of any consolidation or merger of the Company with
or into another corporation (other than a consolidation or merger in which the
Company is the continuing corporation and which does not result in any
reclassification, capital reorganization or other change of outstanding shares
of Preferred Stock), or in case of any sale or conveyance to another corporation
of the property of the Company as, or substantially as, an entirety (other than
a sale/leaseback, mortgage or other financing transaction), the Company shall
cause effective provision to be made so that each holder of a Warrant then
outstanding shall have the right thereafter, by exercising such Warrant, to
purchase the kind and number of shares of stock or

                                       11

<PAGE>



other securities or property (including cash) receivable upon such
consolidation, merger, sale or conveyance by a holder of the number of shares of
Preferred Stock that might have been purchased upon exercise of such Warrant,
immediately prior to such consolidation, merger, sale or conveyance. Any such
provision shall include provision for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section
9. The foregoing provisions shall similarly apply to successive consolidations,
mergers, sales or conveyances.

                  (e) Irrespective of any adjustments or changes in the Purchase
Price or the number of shares of Preferred Stock purchasable upon exercise of
the Warrants, the Warrant Certificates theretofore and thereafter issued shall,
unless the Company shall exercise its option to issue new Warrant Certificates,
continue to express the applicable Purchase Price per share, the number of
shares purchasable thereunder and the Redemption Price therefor as were
expressed in the Warrant Certificates when the same were originally issued.

                  (f) After each adjustment of the Purchase Price pursuant to
this Section 9, the Company will promptly after the fiscal quarter in which such
adjustment was triggered prepare a certificate signed by the Chairman or
President, and by the Secretary or an Assistant Secretary, of the Company
setting forth: (i) the applicable Purchase Price as so adjusted, (ii) the number
of shares of Preferred Stock purchasable upon exercise of each Warrant after
such adjustment, and, if the Company shall have elected to adjust the number of
Warrants, the number of Warrants to which the Registered Holder of each Warrant
shall then be entitled, and the adjustment in Redemption Price resulting
therefrom, and (iii) a brief statement of the facts accounting for such
adjustment. The Company will promptly file such certificate with the Warrant
Agent and cause a brief summary thereof to be sent by ordinary first class mail
to the Underwriter and to each Registered Holder of Warrants at his or her last
address as it shall appear on the registry books of the Warrant Agent. No
failure to mail such notice nor any defect therein or in the mailing thereof
shall affect the validity thereof except as to the holder to whom the Company
failed to mail such notice, or except as to the holder whose notice was
defective. The affidavit of an officer of the Warrant Agent or the Secretary or
an Assistant Secretary of the Company that such notice has been mailed shall, in
the absence of fraud, be prima facie evidence of the facts stated therein.

                  (g) For purposes of Section 9(a) and 9(c) hereof, the
following provisions (i) to (vi) shall also be applicable.

                           (i) The number of shares of Preferred Stock
outstanding at any given time shall include shares of Preferred Stock owned or
held by or for the account of the Company and the sale or issuance of such
treasury shares or the distribution of any

                                       12

<PAGE>



such treasury shares shall not be considered a Change of Shares for purposes of
said sections.

                           (ii) No adjustment of the Purchase Price shall be
made unless such adjustment would require an increase or decrease of at least
$0.05 in such price; provided that any adjustments which by reason of this
clause (ii) are not required to be made shall be carried forward and shall be
made at the time of and together with the next subsequent adjustment which,
together with any adjustment(s) so carried forward, shall require an increase or
decrease of at least $0.05 in the Purchase Price then in effect hereunder.

                           (iii) In case of (1) the sale by the Company solely
for cash of any rights or warrants to subscribe for or purchase, or any options
for the purchase of, Preferred Stock or any securities convertible into or
exchangeable for Preferred Stock without the payment of any further
consideration other than cash, if any (such convertible or exchangeable
securities being herein called "Convertible Securities"), or (2) the issuance by
the Company, without the receipt by the Company of any consideration therefor,
of any rights or warrants to subscribe for or purchase, or any options for the
purchase of, Preferred Stock or Convertible Securities, in each case, if (and
only if) the consideration payable to the Company upon the exercise of such
rights, warrants or options shall consist solely of cash, whether or not such
rights, warrants or options, or the right to convert or exchange such
Convertible Securities, are immediately exercisable, and the price per share for
which Preferred Stock is issuable upon the exercise of such rights, warrants or
options or upon the conversion or exchange of such Convertible Securities
(determined by dividing (x) the minimum aggregate consideration payable to the
Company upon the exercise of such rights, warrants or options, plus the
consideration received by the Company for the issuance or sale of such rights,
warrants or options, plus, in the case of such Convertible Securities, the
minimum aggregate amount of additional consideration, if any, other than such
Convertible Securities, payable upon the conversion or exchange thereof, by (y)
the total maximum number of shares of Preferred Stock issuable upon the exercise
of such rights, warrants or options or upon the conversion or exchange of such
Convertible Securities issuable upon the exercise of such rights, warrants or
options) is less than the then current Purchase Price immediately prior to the
date of the issuance or sale of such rights, warrants or options, then the total
maximum number of shares of Preferred Stock issuable upon the exercise of such
rights, warrants or options or upon the conversion or exchange of such
Convertible Securities (as of the date of the issuance or sale of such rights,
warrants or options) shall be deemed to be outstanding shares of Preferred Stock
for purposes of Sections 9(a) and 9(c) hereof and shall be deemed to have been
sold for cash in an amount equal to such price per share.


                                       13

<PAGE>



                           (iv) If the exercise or purchase price provided for
in any right, warrant or option referred to in clause (iii) above, or the rate
at which any Convertible Securities referred to in clause (ii) or (iii) above
are convertible into or exchangeable for Preferred Stock, shall change at any
time (other than under or by reason of provisions designed to protect against
dilution) then the Purchase Price in effect at the time of such change will be
readjusted to the Purchase Price that would have been in effect at such time had
such rights, warrants, options or Convertible Securities still outstanding
provided for such changed exercise or purchase price or rate, as the case may
be, at the time initially granted, issued, or sold; such adjustment of the
Purchase Price will be made whether the result thereof is to increase or reduce
the Purchase Price then in effect hereunder. Upon the expiration of any such
right, warrant or option, or the termination of any right to convert or exchange
any Convertible Security, without the exercise of such right, warrant or option,
the Purchase Price then in effect hereunder will be adjusted to the Purchase
Price that would have been in effect at the time of such expiration or
termination had such right, warrant or option or Convertible Security never been
issued, but such subsequent adjustment shall not affect the number of shares of
Preferred Stock issued upon any exercise of this Warrant prior to the date such
adjustment is made. Except as otherwise provided in this paragraph (iv), no
adjustment of the Purchase Price will be made when securities are actually
issued upon the exercise of such rights, warrants or options or upon the
conversion or exchange of such Convertible Securities.

                           (v) In case of the sale for cash of any shares of
Preferred Stock, any Convertible Securities, any rights or warrants to subscribe
for or purchase, or any options for the purchase of, Preferred Stock or
Convertible Securities, the consideration received by the Company therefore
shall be deemed to be the gross sales price therefor after deducting therefrom
any expense paid or incurred by the Company or any underwriting discounts or
commissions or concessions paid or allowed by the Company in connection
therewith.

                  (h) No adjustment to the Purchase Price or to the number of
shares of Preferred Stock purchasable upon the exercise of each Warrant will be
made, however;

                           (i) upon the grant or exercise of any options which
may hereafter be granted or exercised under any employee benefit plan or
director plan of the Company as described in the Registration Statement; or

                           (ii) upon the sale or exercise of the Warrants,
including without limitation the sale or exercise of any of the Warrants
underlying the Underwriter's Warrants; or


                                       14

<PAGE>



                           (iii) upon the sale of any shares of Preferred Stock
in the public offering pursuant to the Registration Statement, including,
without limitation, shares sold upon the exercise of any over-allotment option
granted to the Underwriter in connection with such offering; or

                           (iv) upon the issuance or sale of Preferred Stock or
Convertible Securities upon the exercise of any rights or warrants to subscribe
for or purchase, or any options for the purchase of, Preferred Stock or
Convertible Securities outstanding on the date of the original sale of the
Warrants, or upon the issuance or sale of any securities of the Company referred
to in the Registration Statement; or

                           (v) upon the issuance or sale of Preferred Stock upon
conversion or exchange of any Convertible Securities outstanding on the date of
the original sale of the Warrants; or

                  (i) Any determination as to whether an adjustment in the
Purchase Price in effect hereunder is required pursuant to Section 9, or as to
the amount of any such adjustment, if required, shall be binding upon the
holders of the Warrants and the Company if made in good faith by the Board of
Directors of the Company.

                  (j) If and whenever the Company shall grant to the holders of
Preferred Stock, as such, rights or warrants to subscribe for or to purchase, or
any options for the purchase of, Preferred Stock or securities convertible into
or exchangeable for or carrying a right, warrant or option to purchase Preferred
Stock, the Company shall concurrently therewith grant to each of the then
Registered Holders of the Warrants all of such rights, warrants or options to
which each such holder would have been entitled if, on the date of determination
of stockholders entitled to the rights, warrants or options being granted by the
Company, such holder were the holder of record of the number of whole shares of
Preferred Stock then issuable upon exercise (assuming, for purposes of this
Section 9(j), that the exercise of Warrants is permissible during periods prior
to the Initial Warrant Exercise Date) of his Warrants. Such grant by the Company
to the holders of the Warrants shall be in lieu of any adjustment which
otherwise might be called for pursuant to this Section 9.

                  (k) In case the Company shall, at any time prior to the
exercise of a Warrant, make any distribution of its assets to holders of the
Preferred Stock, then the Registered Holder of such Warrant who exercises his
Warrant after the record date for determination of those Registered Holders of
Preferred Stock entitled to such distribution of assets shall be entitled to
receive, upon exercise of the Warrant, in addition to Preferred Stock, the
amount of such distribution which would have been payable to such Registered
Holder had he been the holder of record of the Preferred Stock receivable upon
exercise of such Warrant on

                                       15

<PAGE>



the record date for the determination of those entitled to such distribution.

                  SECTION 10. Fractional Warrants and Fractional Shares.

                  (a) If the number of shares of Preferred Stock purchasable
upon the exercise of each Warrant is adjusted pursuant to Section 9 hereof, the
Company shall nevertheless not be required to issue fractions of shares, upon
exercise of the Warrants or otherwise, or to distribute certificates that
evidence fractional shares. With respect to any fraction of a share called for
upon any exercise hereof, the Company shall pay to the Holder an amount in cash
equal to such fraction multiplied by the current market value of such fractional
share, determined as follows:

                           (i) If the Preferred Stock is listed on a national
securities exchange or admitted to unlisted trading privileges on such exchange
or listed for trading on The Nasdaq Stock Market, the current value shall be the
last reported sale price of the Preferred Stock on The Nasdaq Stock Market or
such exchange on the last business day prior to the date of exercise of the
Warrant, or if no such sale is made on such day, the average of the closing bid
and asked prices for such day on such exchange; or

                           (ii) If the Preferred Stock is not listed or admitted
to unlisted trading privileges, the current value shall be the mean of the last
reported bid and asked prices reported by the National Quotation Bureau, Inc. on
the last business day prior to the date of the exercise of the Warrant; or

                           (iii) If the Preferred Stock is not so listed or
admitted to unlisted trading privileges and bid and asked prices are not so
reported, the current value shall be an amount determined in such reasonable
manner as may be prescribed by the Board of Directors of the Company.

                  SECTION 11. Warrant Holders Not Deemed Stockholders. No holder
of Warrants shall, as such, be entitled to vote or to receive dividends or be
deemed the holder of Preferred Stock that may at any time be issuable upon
exercise of such Warrants for any purpose whatsoever, nor shall anything
contained herein be construed to confer upon the holder of Warrants, as such,
any of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issuance or reclassification of stock, change of par
value or change of stock to no par value, consolidation, merger or conveyance or
otherwise), or to receive notice of meetings, or to receive dividends or
subscription rights, until such Holder shall have exercised such Warrants and
been issued shares of Preferred Stock in accordance with the provisions hereof.

                                       16

<PAGE>




                  SECTION 12. Rights of Action. All rights of action with
respect to this Agreement are vested in the respective Registered Holders of the
Warrants, and any Registered Holder of a Warrant, without consent of the Warrant
Agent or of the holder of any other Warrant, may, in his own behalf and for his
own benefit, enforce against the Company his right to exercise his Warrants for
the purchase of shares of Preferred Stock in the manner provided in the Warrant
Certificates and this Agreement.

                  SECTION 13. Agreement of Warrant Holders. Every holder of a
Warrant, by his acceptance thereof, consents and agrees with the Company, the
Warrant Agent and every other holder of a Warrant that:

                  (a) The Warrants are transferable only on the registry books
of the Warrant Agent by the Registered Holder thereof in person or by his
attorney duly authorized in writing and only if the Warrant Certificates
representing such Warrants are surrendered at the office of the Warrant Agent,
duly endorsed or accompanied by a proper instrument of transfer satisfactory to
the Warrant Agent and the Company in their sole discretion, together with
payment of any applicable transfer taxes; and

                  (b) The Company and the Warrant Agent may deem and treat the
person in whose name the Warrant Certificate is registered as the holder and as
the absolute, true and lawful owner of the Warrants represented thereby for all
purposes, and neither the Company nor the Warrant Agent shall be affected by any
notice or knowledge to the contrary, except as otherwise expressly provided in
Section 7 hereof.

                  SECTION 14. Cancellation of Warrant Certificates. If the
Company shall purchase or acquire any Warrant or Warrants, the Warrant
Certificate or Warrant Certificates evidencing the same shall thereupon be
delivered to the Warrant Agent and cancelled by it and retired.

                  SECTION 15. Concerning the Warrant Agent. The Warrant Agent
acts hereunder as agent and in a ministerial capacity for the Company, and its
duties shall be determined solely by the provisions of this Agreement. The
Warrant Agent shall not, by issuing and delivering Warrant Certificates or by
any other act hereunder, be deemed to make any representations as to the
validity, value or authorization of the Warrant Certificates or the Warrants
represented thereby or of any securities or other property delivered upon
exercise of any Warrant or whether any stock issued upon exercise of any Warrant
is fully paid and nonassessable.

                  The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of Warrant Certificates to make or cause to be made
any adjustment of the Purchase Price or the Redemption Price provided in this
Agreement, or to determine

                                       17

<PAGE>



whether any fact exists which may require any such adjustments, or with respect
to the nature or extent of any such adjustment, when made, or with respect to
the method employed in making the same. The Warrant Agent shall not (i) be
liable for any recital or statement of facts contained herein or for any action
taken, suffered or omitted by it in reliance on any Warrant Certificate or other
document or instrument believed by it in good faith to be genuine and to have
been signed or presented by the proper party or parties, (ii) be responsible for
any failure on the part of the Company to comply with any of its covenants and
obligations contained in this Agreement or in any Warrant Certificate, or (iii)
be liable for any act or omission in connection with this Agreement except for
its own negligence or willful misconduct.

                  The Warrant Agent may at any time consult with counsel
satisfactory to it (who may be counsel for the Company or for the Underwriter)
and shall incur no liability or responsibility for any action taken, suffered or
omitted by it in good faith in accordance with the opinion or advice of such
counsel.

                  Any notice, statement, instruction, request, direction, order
or demand of the Company shall be sufficiently evidenced by an instrument signed
by the Chairman of the Board, President, any Vice President, its Secretary, or
Assistant Secretary (unless other evidence in respect thereof is herein
specifically prescribed). The Warrant Agent shall not be liable for any action
taken, suffered or omitted by it in accordance with such notice, statement,
instruction, request, direction, order or demand believed by it to be genuine.

                  The Company agrees to pay the Warrant Agent reasonable
compensation for its services hereunder and to reimburse it for its reasonable
expenses hereunder; it further agrees to indemnify the Warrant Agent and save it
harmless against any and all losses, expenses and liabilities, including
judgments, costs and counsel fees, for anything done or omitted by the Warrant
Agent in the execution of its duties and powers hereunder except loses, expenses
and liabilities arising as a result of the Warrant Agent's negligence or willful
misconduct.

                  In the event of a dispute under this Agreement between the
Company and the Underwriter regarding proceeds received by the Warrant Agent
from the exercise of the Warrants, the Warrant Agent shall have the right, but
not the obligation, to bring an interpleader action to resolve such dispute.

                  The Warrant Agent may resign its duties and be discharged from
all further duties and liabilities hereunder (except liabilities arising as a
result of the Warrant Agent's own negligence or willful misconduct), after
giving 30 days' prior written notice to the Company. At least 15 days prior to
the date such resignation is to become effective, the Warrant Agent shall

                                       18

<PAGE>



cause a copy of such notice of resignation to be mailed to the Registered Holder
of each Warrant Certificate at the Company's expense. Upon such resignation, or
any inability of the Warrant Agent to act as such hereunder, the Company shall
appoint a new warrant agent in writing. If the Company shall fail to make such
appointment within a period of 15 days after it has been notified in writing of
such resignation by the resigning Warrant Agent, then the Registered Holder of
any Warrant Certificate may apply to any court of competent jurisdiction for the
appointment of a new warrant agent. Any new warrant agent, whether appointed by
the Company or by such a court shall be a bank or trust company having a capital
and surplus as shown by its last published report to its stockholders, of not
less than Ten Million ($10,000,000.00) Dollars, or a stock transfer company.
After acceptance in writing of such appointment by the new warrant agent is
received by the Company, such new warrant agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
herein as the Warrant Agent, without any further assurance, conveyance, act or
deed; but if for any reason it shall be necessary or expedient to execute and
deliver any further assurance, conveyance, act or deed, the same shall be done
at the expense of the Company and shall be legally and validly executed and
delivered by the resigning Warrant Agent. Not later than the effective date of
any such appointment the Company shall file notice thereof with the resigning
Warrant Agent and shall forthwith cause a copy of such notice to be mailed to
the Registered Holder of each Warrant Certificate.

                  Any corporation into which the Warrant Agent or any new
warrant agent may be converted or merged or any corporation resulting from any
consolidation to which the Warrant Agent or any new warrant agent shall be a
party or any corporation succeeding to the trust business of the Warrant Agent
shall be a successor warrant agent under this Agreement without any further act,
provided that such corporation is eligible for appointment as successor to the
Warrant Agent under the provisions of the preceding paragraph. Any such
successor warrant agent shall promptly cause notice of its succession as warrant
agent to be mailed to the Company and to the Registered Holder of each Warrant
Certificate.

                  The Warrant Agent, its subsidiaries and affiliates, and any of
its or their officers or directors, may buy and hold or sell Warrants or other
securities of the Company and otherwise deal with the Company in the same manner
and to the same extent and with like effects as though it were not Warrant
Agent. Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.

                  SECTION 16. Modification of Agreement. Subject to the
provisions of Section 4(b), the Warrant Agent and the Company may by
supplemental agreement make any changes or corrections in this

                                       19

<PAGE>



Agreement (i) that they shall deem appropriate to cure any ambiguity or to
correct any defective or inconsistent provision or manifest mistake or error
herein contained or (ii) that they may deem necessary or desirable and which
shall not adversely affect the interests of the holders of Warrant Certificates;
provided, however, that this Agreement shall not otherwise be modified,
supplemented or altered in any respect except with the consent in writing of the
Registered Holders of Warrant Certificates representing not less than a majority
of the outstanding Warrants, and provided, further, that no change in the number
of or nature of the securities purchasable upon the exercise of any Warrant, or
the Purchase Price therefor, or the acceleration of the Warrant Expiration Date,
shall be made without the consent in writing of the Registered Holder of the
Warrant Certificate representing such Warrant, other than such changes as are
specifically prescribed by this Agreement as originally executed.

                  SECTION 17. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
made three days after such is mailed first class registered or certified mail,
postage prepaid as follows: if to the Registered Holder of a Warrant
Certificate, at the address of such holder as shown on the registry books
maintained by the Warrant Agent; if to the Company, at Rensselaer Technology
Park, 185 Jordan Road, Troy, New York 12180, Attention: Frank A. Pascuito, or at
such other address as may have been furnished to the Warrant Agent in writing by
the Company, with a copy sent to Parker Duryee Rosoff & Haft, P.C., 529 Fifth
Avenue, New York, New York 10017, Attention: Michael D. DiGiovanna, Esq.; if to
the Warrant Agent, at American Stock Transfer & Trust Company, 40 Wall Street,
New York, New York 10005; if to Duke & Co., Inc., at 909 Third Avenue, 7th
Floor, New York, New York 10022, Attention: President, with a copy sent to
Zimet, Haines, Friedman & Kaplan, 460 Park Avenue, New York, New York 10022,
Attention: James Martin Kaplan, Esq.

                  SECTION 18. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
reference to principles of conflict of laws.

                  SECTION 19. Binding Effect. This Agreement shall be binding
upon and inure to the benefit of the Company, the Warrant Agent and the
Underwriter, and their respective successors and assigns, and the holders from
time to time of the Warrant Certificates. Nothing in this Agreement is intended
or shall be construed to confer upon any other person any right, remedy or
claim, in equity or at law, or to impose upon any other person any duty,
liability or obligation.

                  SECTION 20.  Termination.  This Agreement shall terminate
at the close of business on the Warrant Expiration Date of all the
Warrants or such earlier date upon which all Warrants have been

                                       20

<PAGE>



exercised, except that the Warrant Agent shall account to the Company for cash
held by it and the provisions of Section 15 hereof shall survive such
termination.

                  SECTION 21.  Counterparts.  This Agreement may be
executed in several counterparts, which taken together shall
constitute a single document.

                  IN WITNESS WHEREOF, the parties hereto have caused this
warrant Agreement to be duly executed as of the date first above written.

                                         IFS INTERNATIONAL, INC.



                                         By:_______________________________
                                                Authorized Officer


                                         AMERICAN STOCK TRANSFER
                                           & TRUST COMPANY



                                         By:_______________________________
                                                Authorized Officer


                                         DUKE & CO., INC.



                                         By:_______________________________
                                                Authorized Officer

                                       21

<PAGE>




                                    EXHIBIT A

                      (FORM OF FACE OF WARRANT CERTIFICATE)


No. ______________________                                _____________ Warrants


                      VOID AFTER ___________________, 2002



        SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE WARRANT CERTIFICATE
              FOR PURCHASE OF SERIES A CONVERTIBLE PREFERRED STOCK


                             IFS INTERNATIONAL, INC.


                     THIS CERTIFIES THAT FOR VALUE RECEIVED


or registered assigns (the "Registered Holder") is the owner of the number of
Series A Convertible Preferred Stock Purchase Warrants ("Warrants") specified
above. Each Warrant initially entitles the Registered Holder to purchase,
subject to the terms and conditions set forth in this Certificate and the
Warrant Agreement (as hereinafter defined), one (1) fully paid and nonassessable
share of Series A Convertible Preferred Stock, $.001 par value (the "Preferred
Stock"), of IFS INTERNATIONAL, INC., a Delaware corporation (the "Company"), at
any time from __________________, 1999 (or earlier in certain circumstances as
provided in the Warrant Agreement referred to below) to the Expiration Date (as
hereinafter defined), upon the presentation and surrender of this Warrant
Certificate with the Subscription Form on the reverse hereof duly executed, at
the corporate office of AMERICAN STOCK TRANSFER & TRUST COMPANY as Warrant
Agent, or its successor (the "Warrant Agent"), accompanied by payment of $6.25
(the "Purchase Price") in lawful money of the United States of America in cash
or by official bank or certified check made payable to the Warrant Agent.

                  This Warrant Certificate and each Warrant represented hereby
are issued pursuant to and are subject in all respects to the terms and
conditions set forth in the Warrant Agreement (the "Warrant Agreement") dated
__________________, 1997, by and among the Company, the Warrant Agent and Duke &
Co., Inc. (the "Underwriter").

                  In the event of certain contingencies provided for in the
Warrant Agreement, the Purchase Price or the number of shares of

                                       A-1

<PAGE>



Preferred Stock subject to purchase upon the exercise of each Warrant
represented hereby are subject to modifications or adjustments.

                  Each Warrant represented hereby is exercisable at the option
of the Registered Holder, but no fractional shares of Preferred Stock will be
issued. In case of the exercise of less than all the Warrants represented
hereby, the Company shall cancel this Warrant Certificate upon the surrender
hereof and shall execute and deliver a new Warrant Certificate or Warrant
Certificates of like tenor, which the Warrant Agent shall countersign, for the
balance of such Warrants.

                  The term "Expiration Date" shall mean 5:00 p.m. (New York
time) on ____________________, 2002, or such earlier date as the Warrants shall
be redeemed. If such date shall in the State of New York be a holiday or a day
on which the banks are authorized to close, then the Expiration Date shall mean
5:00 p.m. (New York time) the next following day which in the State of New York
is not a holiday or a day on which banks are authorized to close.

                  The Company shall not be obligated to deliver any securities
pursuant to the exercise of this Warrant unless a registration statement under
the Securities Act of 1933, as amended, with respect to such securities is
effective. This Warrant shall not be exercisable by a Registered Holder in any
state in which it would be unlawful for the Company to deliver the shares of
Preferred Stock upon exercise of this Warrant.

                  The Warrant Certificate is exchangeable, upon the surrender
hereof by the Registered Holder at the corporate office of the Warrant Agent,
for a new Warrant Certificate or Warrant Certificates of like tenor representing
an equal aggregate number of Warrants, each of such new Warrant Certificates to
represent such number of Warrants as shall be designated by such Registered
Holder at the time of such surrender. Upon due presentment of this Warrant
Certificate at such office for registration of transfer, together with any
transfer fee and any tax or other governmental charge imposed in connection with
such transfer, a new Warrant Certificate or Warrant Certificates representing an
equal aggregate number of Warrants will be issued to the transferee in exchange
therefor, subject to the limitations provided in the Warrant Agreement.

                  Prior to the exercise of any Warrant represented hereby, the
Registered Holder shall not be entitled to any rights of a stockholder of the
Company, including, without limitation, the right to vote or to receive
dividends or other distributions, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided in the Warrant
Agreement.


                                       A-2

<PAGE>



                  Commencing ______________, 1998, this Warrant may, with the
prior consent of the Underwriter, be redeemed at the option of the Company, at a
redemption price of $.10 per Warrant, provided the Market Price (as defined in
the Warrant Agreement) for the securities issuable upon exercise of such Warrant
shall exceed $8.00 per share (subject to adjustment as set forth in the Warrant
Agreement) for 20 consecutive trading days ending not more than three days prior
to the date on which the Company gives notice of redemption. Notice of
redemption shall be given not later than the thirtieth day, and not earlier than
the forty fifth day, before the date fixed for redemption, all as provided in
the Warrant Agreement. On and after the date fixed for redemption, the
Registered Holder shall have no rights with respect to this Warrant except to
receive the $.10 per Warrant upon surrender of this Certificate.

                  Prior to due presentment for registration of transfer hereof,
the Company and the Warrant Agent may deem and treat the Registered Holder as
the absolute owner hereof and of each Warrant represented hereby
(notwithstanding any notations of ownership or writing hereon made by anyone
other than a duly authorized officer of the Company or the Warrant Agent) for
all purposes and shall not be affected by any notice to the contrary.

                  The Company has agreed to pay a fee of 5% of the Purchase
Price to the Underwriter upon certain conditions as specified in the Warrant
Agreement upon the exercise of this Warrant.

                  This Warrant Certificate and each Warrant represented hereby
shall be governed by and construed in accordance with the laws of the State of
New York.

                  This Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent.


                                       A-3

<PAGE>



                  IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed, manually or in facsimile by two of its officers
thereunto duly authorized, and a facsimile of its corporate seal to be imprinted
hereon.

                                           IFS INTERNATIONAL, INC.



                                           By:_______________________________

                                              Its



                                           By:_______________________________

                                              Its



Date:_____________________________




                                     [Seal]



COUNTERSIGNED:

AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Warrant Agent



By ____________________________________

   Its
   Authorized Officer


                                       A-4

<PAGE>




                    (FORM OF REVERSE OF WARRANT CERTIFICATE)

                                SUBSCRIPTION FORM

                     To Be Executed by the Registered Holder
                          in Order to Exercise Warrants

                  The undersigned Registered Holder hereby irrevocably elects to
exercise _____________________(________________________ ) Warrants represented
by this Warrant Certificate, and to purchase the securities issuable upon the
exercise of such Warrants, and requests that certificates for such securities
shall be issued in the name of


            PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

                     _____________________________________
                     _____________________________________
                     _____________________________________
                     _____________________________________

                     [please print or type name and address]

and be delivered to

                     _____________________________________
                     _____________________________________
                     _____________________________________
                     _____________________________________

                     [please print or type name and address]

and if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.

                  The undersigned represents that the exercise of the
within Warrant was solicited by a member of the National
Association of Securities Dealers, Inc. ("NASD").  If not solicited
by an NASD member, please write "unsolicited" in the space below.


                                       A-5

<PAGE>




Please indicate the name of the NASD member firm which solicited the exercise of
the Warrant. Unless otherwise indicated by listing the name of another NASD
member firm or by writing "unsolicited," it will be assumed that the exercise
was solicited by Duke & Co., Inc.


                                            ______________________________
                                            Name of soliciting NASD Member


                                            ______________________________
Dated:___________________________           Signature


                                            ______________________________
                                            Street Address

                                            ______________________________
                                            City, State and Zip Code


                                            ______________________________
                                            Taxpayer ID Number

                                            ______________________________
                                             Signature Guaranteed:




                                       A-6

<PAGE>


                                   ASSIGNMENT

                     To Be Executed by the Registered Holder
                           in Order to Assign Warrants

                  FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto

            PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER


                     _____________________________________
                     _____________________________________
                     _____________________________________
                     _____________________________________
                     [please print or type name and address]

____________________ (____________________) of the Warrants represented by this
Warrant Certificate, and hereby irrevocably constitutes and appoints Attorney to
transfer this Warrant Certificate on the books of the Company, with full power
of substitution in the premises.


Dated: ________________________________   ___________________________________
                                          Signature Guaranteed:



                                          ___________________________________


                  THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST
CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN
EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER,
AND MUST BE GUARANTEED BY A MEDALLION BANK.



                                       A-7


                         DEBENTURE INVESTMENT AGREEMENT

                                     Between

                             IFS INTERNATIONAL, INC.

                                       And

                           NEW YORK STATE SCIENCE AND
                            TECHNOLOGY FOUNDATION 
                             99 Washington Avenue,
                             Albany, New York 12210

                                       For

                CONVERTIBLE SEVEN AND ONE-HALF PERCENT DEBENTURES


     WHEREAS, IFS International, Inc., (hereinafter called the "Company"), will
be issuing three (3), seven and one-half percent (7 1/2%) convertible
debentures, two in the face amount of Eighty Thousand and 00/100 Dollars
($80,000.00) each and one in the face amount of Ninety Thousand and 00/100
Dollars ($90,000.00) (hereinafter called the "Debentures"), such Debentures to
be purchased by New York State Science and Technology Foundation, (hereinafter
called the "Purchaser"); and

     WHEREAS, Wellsway Ventures, Inc. (hereinafter called "Wellsway"), the
parent company of IFS International, Inc. will be guaranteeing the repayment by
the Company of the Debentures and the performance by the Company of its
obligations under this Agreement; and 

     WHEREAS, any successor in interest to the Purchaser with respect to any
Debenture issued as aforesaid shall also be included in the definition of
"Purchaser"; and

     WHEREAS, it is intended that the provisions of this Agreement shall apply
to each and 


<PAGE>

every Debenture issued hereunder.

     NOW, THEREFORE, it is agreed by and between the Company and the Purchaser
as follows:

     1. Representations and Warranties of the Company. The Company represents
and warrants as follows:

          (a) The Company is a corporation duly incorporated, validly existing,
     and in good standing under the laws of New York. It is duly qualified in
     the State of Ohio and or will duly qualify as a foreign corporation and
     will remain in good standing in all other jurisdictions, if any, where its
     activities make such qualification necessary. It is duly authorized under
     all applicable provisions of law to carry on its businesses as now
     conducted.

          (b) The Company is duly authorized under all applicable provisions of
     law, its Certificate of Incorporation, and its By-Laws to enter into and
     perform this Agreement. The entering into and performing of this Agreement
     will not result in a breach or a default under any agreement or instrument
     to which it is a party, and will not result in the creating of any security
     interest, lien, charge, or encumbrance upon any of its assets under any
     such agreement or instrument. This Agreement hereinafter provided for is,
     and upon the execution and delivery hereof, it will be a valid and
     enforceable obligation of the Company in accordance with its terms.

                                      -2-
<PAGE>

          (c) The Company's entire authorized stock consists of four million
     (4,000,000) shares of common stock, $.00001 par value, of which four
     thousand (4,000) shares are issued and outstanding and three million
     (3,000,000) shares of convertible preferred stock, $.0001 par value, of
     which two million three hundred sixty four thousand, five hundred
     eighty-seven (2,364,587) shares are issued and outstanding. All such issued
     and outstanding shares have been validly issued and are fully paid and
     non-assessable.

          (d) The Company has delivered or caused to be delivered to the
     Purchaser, the financial statements listed below, upon which financial
     statements the Purchaser has relied in making this investment:

               The balance sheet and the statements of profit and loss and cash
          flows of the Company as of April 30, 1988, as reported on by Coopers &
          Lybrand, and all interim reports requested by Purchaser.

          The Company covenants that the foregoing financial statements were all
     prepared in accordance with generally accepted accounting principles
     consistently applied, and are correct and complete in all material respects
     and fairly represent the financial condition of the Company as of the date
     of said balance sheet and the results of the operations of the Company for
     the periods covered by said financial statements. There has been no
     material adverse change in the financial condition or the assets of the
     Company since the last dated balance sheet or sheets.

                                      -3-
<PAGE>

          (e) The Company has good marketable title to all assets reflected in
     the last dated balance sheet referred to above, except assets sold or
     disposed of in the ordinary course of its business since the date of said
     balance sheet. None of said assets are subject to any mortgages, security
     interests, liens, charges, pledges, or encumbrances not referred to in said
     balance sheet, except liens, if any, in respect to current taxes and other
     encumbrances previously disclosed to Purchaser.

          (f) The Company possesses all patents, trademarks, trade names,
     copyrights, and licenses necessary to carry on its business as now
     conducted without known conflict with the valid patents, trademarks, trade
     names, copyrights and licenses of others.

          (g) With the exception of those matters referred to at Addendum II
     hereof, the Company is not a party to any agreement, or subject to any
     corporate restrictions (including without limitation any agreements among
     stockholders) that materially and adversely affect its business, its
     assets, or its financial condition.

          (h) No material litigation in any court or proceeding before any
     commission or other administrative authority is pending or threatened
     against the Company.

          (i) The Company has filed all tax and similar returns as due and has
     paid or provided for the payment of all taxes and assessments due. The
     Company has no knowledge of any claims for unpaid taxes which might become
     a lien upon its assets.

                                      -4-
<PAGE>

          (j) The Company has completed all financial transactions required to
     be completed prior to the purchase herein all in accord with Addendum III
     hereof.

     2. Affirmative Covenants and Agreements of the Company. The Company
covenants and agrees that, until the earlier of (i) the lapse of five years from
the execution of this Agreement between the parties, or (ii) the Company redeems
all of the Debentures:

          (a) The Company will promptly pay or discharge all taxes, assessments,
     charges, or levies imposed upon it or upon any of its property and all
     lawful claims for labor, material, or supplies which, if unpaid, might
     become a lien or charge upon any such property. The Company may, however,
     contest any such claim deferring payment pending court resolution of the
     dispute unless the Purchaser in its reasonable judgment determines that
     such failure to pay will seriously jeopardize the Company's ability to pay
     the obligations due Purchaser in which event the Company may bond the claim
     and proceed with its defense.

          (b) The Company will do all things necessary to preserve and keep in
     full force and effect its corporate existence and rights except that the
     Company may merge or consolidate with or into Wellsway so long as a major
     portion of the Company's operations now located in the State of New York do
     not relocate outside of New York as a result of such transaction.

                                      -5-
<PAGE>

          (c) The Company will maintain its properties in good repair and
     condition and will make all needed renewals and replacements so that its
     business may be properly and advantageously conducted at all times. It will
     comply with all statutes, ordinances, rules, regulations, and orders of any
     federal, state, municipal authority or official having jurisdiction over
     its property; provided that it may contest in good faith any statutes,
     ordinances, rules, regulations, and orders of such bodies or officials in
     any reasonable manner without adversely affecting its rights under this
     Agreement.

          (d) The Company will at all times keep proper books of record and
     account in accordance with sound bookkeeping practices. The Company hereby
     authorizes the Purchaser, upon ten (10) days' advance notice and at the
     Purchaser's expense, to make or cause to be made, in such manner and at
     such times as the Purchaser may reasonably require: (i) inspection and
     audits of any books, records and papers in the custody or control of the
     Company or others, relating to the Company's financial or business
     conditions, including the making of copies thereof and extracts therefrom,
     and (ii) inspections and appraisals of any of the Company's property or
     assets. In the event that the Debentures or the common shares issued upon
     conversion of the Debentures shall cease to be owned by a bona fide
     investment or financial institution, the right of inspection referred to in
     the previous sentence shall be subject to the consent of the Company, such
     consent not to be unreasonably withheld. The Company hereby authorizes all
     federal, state and municipal authorities to furnish reports of examination,
     records, and other information relating to the conditions and affairs of
     the Company and 


                                      -6-
<PAGE>

     any desired information from reports, returns, files and records of such
     authorities upon request therefor by the Purchaser. The Company will
     furnish to the Purchaser copies of all financial reports and/or audited
     financial statements at the same time said financial reports and/or
     statements are sent to the Company's shareholders or to the shareholders of
     Wellsway.

          (e) The Company will furnish to the Purchaser promptly after their
     effectiveness copies of all amendments or other documents modifying the
     Certificate of Incorporation of the Company certified by the Secretary of
     State, and copies of all amendments to the By-Laws of the Company certified
     by its Secretary.

          (f) The Company will promptly notify the Purchaser in writing upon the
     occurrence of any Event of Default as defined in each Debenture.

          (g) The Company's principals -- Charles Caserta and Frank Pascuito --
     will maintain in the aggregate at least 35% ownership in the Company or in
     any company into which the Company merges or is consolidated.

     3. Negative Covenants and Agreements of the Company. The Company agrees
that without the written consent of the Purchaser:

          (a) The Company will not guarantee the obligations of any person, firm
     or 


                                      -7-
<PAGE>

     corporation, except (i) guarantees of the obligations of Wellsway, or
     (ii) endorsement of negotiable instruments for deposit or collection and
     other activities in the ordinary course of business. The Company will not
     lend or give any preferential treatment, or make any advances, directly or
     indirectly, by way of loan, gift, bonus or otherwise, to any other persons,
     firms or corporations or invest in the securities of any other
     corporations, except in the ordinary course of business;

          (b) The Company will not pledge or otherwise create or suffer the
     imposition of any liens, security interests, charges or encumbrances upon
     any of its properties, except in the ordinary course of business.

          (c) With the exception of a merger or consolidation with Wellsway, the
     Company will not consolidate with or merge into any other corporation, nor
     sell, lease or otherwise dispose of all or any substantial part of its
     assets to any other person, firm or corporation. The Company may sell and
     dispose of such items of machinery and equipment as may become obsolete or
     unfit for use or which in its judgment are no longer necessary for the
     conduct of its business.

          (d) The Company will not change the general character of its business
     as conducted on the date hereof, or engage directly or indirectly in any
     other type of business.

                                      -8-
<PAGE>


          (e) The Company will not pay any dividends on, make any other
     distribution (except distributions of stock or securities) in respect of,
     or apply to the purchase, redemption, or other acquisition for value of,
     any shares of its stock of any class, unless the Company after such action
     shall have retained earnings at least equal to the face value of the
     outstanding principal balance of the Debentures.

          (f) The Company will not pay unreasonable compensation to employees
     owning in excess of ten percent (10%) of the outstanding shares of any
     class or kind of its stock.

          (g) The Company's principals shall not engage in any competing
     activities, loan monies to any competing companies or entities or acquire
     any equity position in any competing company.

          (h) The Company's principals will not pledge their holdings in the
     Company or in any company into which the Company is merged or consolidated.

          (i) The Company will not enter into any severance agreements with its
     employees except in the ordinary course of business.

          (j) Purchaser's consent for any of the foregoing will not be
     unreasonably withheld and will be deemed given if its authorized agents do
     not give the Company written



                                      -9-
<PAGE>

     objections within ten days after Purchaser receives written notice of the
     prospective action Company wishes to take, sent in the manner provided in
     Section 13 hereof.

     4. New York Business. The Company covenants and agrees to keep its
principal place of business and its operations in New York State for five years
or until the Company has consolidated or merged or sold substantially all of its
assets, unless the Purchaser is no longer a creditor of the Company and has sold
substantially all of its interest in the Company. If the Company's principal
place of business or its operations leave New York State as a result of a merger
or the sale of its assets, the Company will, upon demand that the merged
corporation or the purchaser, as the case may be, immediately pay all principal
and interest due on any outstanding Debentures and will cause the repurchase of
any shares of Common Stock purchased by the Purchaser pursuant to its Conversion
Privilege at their then fair market value as part of such transaction. In
addition, the Company covenants and agrees to use the proceeds of the Debentures
so that the economic benefits resulting from the expenditures of such proceeds
shall accrue within New York State.

     5. Conversion Privileges. Subject to the provisions for adjustment
hereinafter set forth in Section 6 and 10, each Debenture shall be convertible
at the option of the holder thereof, upon surrender to the Company of the
Debenture to be converted, into fully paid and non-assessable shares of common
stock of Wellsway ("Common Stock"), at the Conversion Price per share as set
forth in Section 6 of the Debenture (the "Conversion Price"). Any Debentures so
surrendered for conversion shall be surrendered to the Company together with a
written notice to the 


                                      -10-
<PAGE>

Company of the election to make such conversion and of the name or names in
which the certificate or certificates of Common Stock shall be issued. The
Company shall pay all taxes (except taxes upon or measured by the income of the
Purchaser) and other charges in respect of the issue of Common Stock upon any
such conversion.

     6. Adjustment for Stock Changes. The number of shares of the Common Stock
and the number of shares of other stock of Wellsway, if any, into which each
Debenture is convertible shall be subject to adjustment from time to time as
follows:

          (a) Whenever Wellsway shall (i) take a record of the holders of the
     Common Stock for the purpose of determining the holders entitled to receive
     a dividend declared payable in stock of Wellsway, (ii) subdivide the
     outstanding shares of the Common Stock, (iii) combine the outstanding
     shares of the Common Stock into a smaller number of shares, or (iv) issue
     by reclassification of the Common Stock any shares of stock of Wellsway,
     the Conversion Price shall be adjusted so that the holder of each Debenture
     shall thereafter be entitled to receive upon the conversion of such
     Debenture the number of shares of Common Stock of Wellsway which he would
     own or be entitled to receive after the happening of any of the events
     described above had such Debenture been converted immediately prior to the
     happening of such event, subject to such further adjustment as may be
     required by application of the provisions of this Section 6 and Section 10
     hereof prior to the date of conversion.

                                      -11-
<PAGE>

          (b) Whenever Wellsway shall permit any person to subscribe for or
     purchase shares of the Common Stock at a price per share less than the
     Conversion Price, the provisions of Section 10 hereto shall apply.

          (c) Anything in the provisions of sub-paragraph (b) of this Section 6
     to the contrary notwithstanding, if Wellsway shall take a record of the
     holders of the Common Stock for the purpose of determining the holders
     entitled to receive any dividend, subscription or purchase rights and
     shall, thereafter and before the delivery to shareholders of any such
     dividend, subscription or purchase rights, legally rescind the
     authorization or abandon its plan to pay or deliver such dividend,
     subscription or purchase rights, then no adjustment in the number of shares
     of the Common Stock or of other stock of Wellsway into which each Debenture
     is convertible shall be required by reason of the taking of such record.

          (d) Anything in the provisions of sub-paragraph (b) of this Section 6
     to the contrary notwithstanding, no adjustment in the number of shares of
     the Common Stock into which each Debenture is convertible shall be required
     under such provisions as a result of any rights given to employees of the
     Company, Wellsway or any of its subsidiaries under any employee stock
     option or purchase plan now in existence, or hereinafter adopted with the
     consent of the Purchaser.

          (e) Whenever any adjustment is required in respect of the shares of
     the Common 



                                      -12-
<PAGE>

     Stock into which each Debenture is convertible, the Company
     shall forthwith (i) cause to be prepared a statement describing in
     reasonable detail the adjustment and the method of calculation used, and
     certified by an independent firm of public accountants of recognized
     standing selected by the Board of Directors of the Company, and (ii) cause
     a copy of such notice to be mailed to the Purchaser at the close of
     business on the day preceding the effective date of such adjustment.

          (f) No fractions of shares of stock of any class of Wellsway at any
     time authorized shall be issuable upon any conversion of the Debentures. In
     lieu of any such fraction of a share, the person entitled to an interest in
     respect of such fraction shall be entitled, as determined from time to time
     by the Board of Directors of Wellsway, to either (i) a scrip certificate
     for a fraction of a share, with such terms and conditions as the Board of
     Directors of Wellsway shall prescribe, or (ii) the cash equivalent of such
     fraction based upon the Conversion Price per share thereof on the date of
     such conversion.

          (g) The number of shares of the Common Stock outstanding at any time
     shall, for the purposes of sub-paragraph (b) of this Section 6 include
     shares of the Common Stock issuable in respect of outstanding scrip
     certificates at the time still exchangeable for full shares of the Common
     Stock.

          (h) Wellsway shall at all times reserve and keep available out of its
     authorized but unissued stock of each class the full number of shares of
     such stock into which all 



                                      -13-
<PAGE>

     Debentures from time to time outstanding are convertible.

          (i) Conversion may be required by the Purchaser at any time before the
     60th day subsequent to written notice of redemption pursuant to Section 9
     of each Debenture and until a particular Debenture shall have been chosen
     for redemption by the Company.


     7. Key Man Insurance. The Company will, as long as it is bound by the terms
of Section 3 hereof, maintain Key Man Life Insurance policies in the amount of
$125,000.00 each on the lives of Charles Caserta and Frank Pascuito. The
proceeds of any such insurance are to be assigned to the Purchaser. Within 30
days after it receives written notice of the death of either Mr. Caserta or Mr.
Pascuito, the Purchaser shall have the option of requiring the Company to redeem
from the insurance proceeds (and only from the insurance proceeds) any or all
Debentures remaining outstanding, or after conversion a portion, or, if there
are sufficient funds, all of the shares of Common Stock purchased by the
Purchaser pursuant to its Conversion Privilege. The purchase price for shares of
Common Stock to be redeemed pursuant to this Section 7 shall be an amount per
share equal to the purchase price therefor paid by the Purchaser. Such optional
redemption shall be exercised by notice, in writing to the Company, which notice
shall specify the date of redemption (which date shall not be more than 10 days
after receipt of such notice, and in no event later than such 30-day period) and
the amount of Debentures or number of shares of Common Stock to be redeemed.
Upon the written request of the Purchaser, the Company will designate the
Purchaser the beneficiary of such insurance and make such ar-


                                      -14-
<PAGE>

rangements and execute such documents as are necessary to give effect to the
intent of this Section 7. In no event, however, shall the Purchaser receive
greater than the sums due on all outstanding Debentures held by it and the fair
market value of its shares as hereinafter defined.


     8. Registration Rights. The Purchaser shall have the following registration
rights with respect to the Debentures and any shares of Common Stock purchased
pursuant to its Conversion Privilege, Adjustment Shares and Additional Shares as
hereinafter defined ("Shares(s)").

          (a) Restrictions on Transferability. Neither the Shares nor the
     Debentures shall be transferable, except upon the conditions specified in
     this Section 8, which conditions are intended to insure compliance with the
     provisions of the Securities Act of 1933 in the case of Section 8(k)
     hereof, to assist in an orderly distribution. The Purchaser will cause any
     proposed transferee of any Debenture and/or Shares to take and hold the
     Debentures and/or Shares subject to the provisions and upon the conditions
     specified in this Section 8.

          (b) Certain Definitions. As used in this Section 8, the following
     terms shall have the following respective meanings:

          "Commission" shall mean the Securities and Exchange Commission or any
     other federal agency at the time administering the Securities Act of 1933.

                                      -15-
<PAGE>


          "Restricted Securities" shall mean the securities of the Company and
     the securities of Wellsway required to bear or bearing the legend set forth
     in Section 8(c) hereof.

          "Registrable Securities" shall mean (i) the Debentures; (ii) the
     Shares and (iii) any securities issued in respect of Shares pursuant to any
     stock split, stock dividend, recapitalization or similar event.

          The terms "Register", "Registered" and "Registration" shall refer to a
     registration effected by preparing and filing a registration statement in
     compliance with the Securities Act of 1933 and applicable rules and
     regulations thereunder, and the declaration or ordering of the
     effectiveness of such registration statement.

          "Registration Expenses" shall mean all expenses including, without
     limitation, all registration and filing fees, printing expenses, blue sky
     fees and expenses, and the expense of any special audits to or required by
     any such registration (but excluding the compensation of regular employees
     of the Company, which shall be paid in any event by the Company).

          "Selling Expenses" shall mean all underwriting discounts and selling
     commissions applicable to the sale of Registrable Securities and all fees
     and disbursements of counsel for any Holder.

                                      -16-
<PAGE>

          "Holder" shall mean any holder of the outstanding Shares or
     Registrable Securities which have not been sold to the public.

          (c) Restrictive Legend. Each Debenture and each certificate
     representing (i) the Shares, or (ii) other securities issued in respect of
     the Shares pursuant to any stock split, stock dividend, recapitalization,
     merger, consolidation or similar event, shall (unless otherwise permitted
     or unless the securities evidenced by such certificate shall have been
     registered under the Securities Act of 1933) be stamped or otherwise
     imprinted with a legend in the following form (in addition to any legend
     required under applicable state securities laws):


             THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
             ACT OF 1933 OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD
             OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
             REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND
             ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL
             SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
             REQUIRED.


          Upon request of Purchaser, the Company or Wellsway shall remove the
     foregoing legend from the Debentures and/or the certificate or issue to
     Purchaser a new Debenture and/or certificate therefor free of any transfer
     legend, if, with such request, the Company (or Wellsway, as the case may
     be) shall have received either the opinion referred to in Section 8(d)(i)
     hereof or the "no-action" letter referred to in Section 8(d)(ii) hereof, or
     a combination of subsections (i) and (ii) thereof to the effect that any
     transfer by Purchaser



                                      -17-
<PAGE>

     of the securities evidenced by such Debenture and/or certificate will not
     violate the Securities Act of 1933.

          (d) Notice of Proposed Transfers. Purchaser agrees to comply in all
     respect with the provisions of this Section 8(d). At least fifteen days
     prior to any proposed transfer of any Restricted Securities (other than
     under circumstances described in Section 8(g) hereof), Purchaser shall give
     written notice to the Company (or to Wellsway in the case of a proposed
     transfer of the Shares) of Purchaser's intention to effect such transfer.
     Each such notice shall describe the manner and circumstances of the
     proposed transfer in sufficient detail, and shall be accompanied by either
     (i) a written opinion of legal counsel which shall be reasonably
     satisfactory in form and substance to the Company's counsel, to the effect
     that the proposed transfer of the Restricted Securities may be effected
     without Registration under the Securities Act of 1933, or (ii) a
     "no-action" letter from the Commission to the effect that the distribution
     of such securities without Registration under the Securities Act of 1933
     will not result in a recommendation by the staff of the Commission that
     action be taken with respect thereto, or a combination of subsections (i)
     and (ii) immediately herein-above, whereupon the Purchaser shall be
     entitled to transfer such Restricted Securities in accordance with the
     terms of the notice delivered to the Company or Wellsway. Each certificate
     evidencing the Restricted Securities transferred as above provided shall
     bear the appropriate restrictive legend set forth in Section 8(c) above,
     except that such certificate shall not bear such restrictive legend if the
     opinion of counsel referred to above is to the further effect that such
     legend is not required in order 



                                      -18-
<PAGE>

     to establish compliance with the Securities Act of 1933.

          (e) Company Registration.

               (i) If, after the date hereof, Wellsway shall determine to
          Register any of its currently non-registered securities either for its
          own account or the account of a security holder, or holders exercising
          their respective demand Registration rights, other than: (i) a
          Registration relating solely to employee benefit plans, (ii) a
          Registration relating solely to a business combination whether under
          Commission Rule 145 transaction or otherwise; (iii) the 600,000 shares
          to be registered to the account of certain security holders of
          Wellsway pursuant to the Acquisition Agreement under which Wellsway
          became the parent company for the Company; or (iv), a Registration on
          any registration form which does not permit secondary sales or does
          not include substantially the same information as would be required to
          be included in a registration statement covering the sale of
          Registrable Securities, or unless the Managing Underwriter shall
          object to the inclusion of the Purchaser's Registrable Securities in
          the offering, the Company shall, or shall cause Wellsway to:

                    (A) promptly give the Purchaser written notice thereof
               (which shall include a list of the jurisdictions in which
               Wellsway intends to attempt to qualify such securities under the
               applicable blue sky or other


                                      -19-
<PAGE>

                state securities laws); and

                    (B) include in such Registration (and any related
               qualification under blue sky laws or other compliance), and in
               any underwriting involved therein, all the Registrable Securities
               specified in a written request or requests, made by the Purchaser
               within fifteen (15) days after receipt of the written notice
               described in clause (i)(A) above, except as set forth in Section
               8(e)(ii) below. Such written request may specify all or a part of
               the Purchaser's Registrable Securities.

               (ii) Underwriting. If the registration of which the Company or
          Wellsway gives notice is for a registered public offering involving an
          underwriting, the Company or Wellsway shall so advise Purchaser as a
          part of the written notice given pursuant to Section 8(e)(i)(A). In
          such event the right of the Purchaser to Registration pursuant to
          Section 8(e) shall be conditioned upon the Purchaser's participation
          in such underwriting and the inclusion of the Purchaser's Registrable
          Securities in the underwriting to the extent provided herein. If
          Purchaser proposes to distribute its securities through such
          underwriting, Purchaser shall (together with Wellsway and other
          shareholders distributing their securities through such underwriting)
          enter into an underwriting agreement in customary form with the
          underwriter or underwriters selected for underwriting by Wellsway.
          Notwith-

                                      -20-
<PAGE>

          standing any other provision of this Section 8(e), if the
          underwriter determines that marketing factors require a limitation on
          the number of shares to be underwritten, the underwriter may (subject
          to the allocation priority set forth below) limit the number of
          Registrable Securities to be included in the Registration and
          underwriting to such amount as the underwriter may deem appropriate.
          The Company or Wellsway shall so advise Purchaser, and the number of
          shares of securities that are entitled to be included in the
          Registration and underwriting shall be allocated as follows: The
          number of shares that may be included in the Registration and
          underwriting shall be allocated among all selling shareholders, other
          than Wellsway, in proportion, as nearly as practicable, to the
          respective amounts of Registrable Securities so held. If the Purchaser
          disapproves of the terms of any such underwriting, it may elect to
          withdraw therefrom by written notice to the Company or Wellsway and
          the underwriter. Any Registrable Securities or other securities
          excluded or withdrawn from such underwriting shall be withdrawn from
          such Registration.

          (f) Expenses of Registration. All Registration Expenses incurred in
     connection with any Registration, qualification or compliance pursuant to
     this Section 8 shall be borne by the Company or Wellsway, and all Selling
     Expenses shall be borne by the holders of the securities so registered pro
     rata on the basis of the number of their shares so registered.

                                      -21-
<PAGE>

          (g) Registration Procedures. In the case of each registration effected
     pursuant to Section 8, the Company or Wellsway will keep Purchaser advised
     in writing as to the initiation of such Registration and as to the
     completion thereof. At its expense, the Company shall, or shall cause
     Wellsway to:


               (i) Keep such Registration effective for a period of 90 days or
          until the Purchaser has completed the distribution described in the
          registration statement relating thereto, whichever first occurs;

               (ii) Furnish such number of prospectuses and other documents
          incident thereto as Purchaser from time to time may reasonably
          request.

          (h) Indemnification.

               (i) The Company will indemnify Purchaser, each of its officers,
          directors and employees, and each person controlling or controlled by
          the Purchaser, with respect to which Registration, qualification or
          compliance has been effected pursuant to this Section 8, against all
          claims, losses, damages and liabilities (or actions in respect
          thereof) arising out of or based on any untrue statement (or alleged
          untrue statement) of a material fact contained in any prospectus,
          offering circular or other document (including any related
          registration statement, notifi-


                                      -22-
<PAGE>

          cation or the like) incident to any such Registration, qualification
          or compliance, or based on any omission (or alleged omission) to state
          therein a material fact required to be stated therein or necessary to
          make the statements therein not misleading, or any violation by the
          Company or Wellsway of any securities act or any rule or regulation
          thereunder applicable to the Company or Wellsway and relating to
          action or inaction required of the Company or Wellsway in connection
          with such Registration, qualification or compliance and will reimburse
          the Purchaser, each of its officers, directors and employees and each
          person controlling or controlled by the Purchaser, for any legal and
          any other expenses reasonably incurred in connection with
          investigating and/or defending any such claim, loss, damage, liability
          or action, provided that the Company will not be liable in any such
          case to the extent that any such claim, loss, damage, liability or
          expense arises out of or is based on any untrue statement or omission
          resulting from written information furnished by Purchaser and stated
          to be specifically for use in such Registration, qualification or
          compliance.

               (ii) The Purchaser will, if Registrable Securities held by the
          Purchaser are included in the securities as to which such
          Registration, qualification or compliance is being effected, indemnify
          the Company, Wellsway and each of their respective directors and
          officers, each person who controls or is controlled by
          the Company or Wellsway, each other Holder and each of their officers,
          directors 


                                      -23-
<PAGE>

          and employees, and each person controlling or controlled by such
          Holder, against all claims, losses, damages and liabilities (or
          actions in respect thereof) arising out of or based on any untrue
          statement (or alleged untrue statement) of a material fact contained
          in any such registration statement, prospectus, offering circular or
          other document, or any omission (or alleged omission) to state therein
          a material fact required to be stated therein or necessary to make the
          statements therein not misleading, and will reimburse the Company
          and/or Wellsway and such Holders, directors, officers, partners,
          persons, or control persons for any legal or any other expenses
          reasonably incurred in connection with investigating or defending any
          such claim, loss, damage liability or action, in each case to the
          extent, but only to the extent, that such untrue statement (or alleged
          untrue statement) or omission (or alleged omission) is made in such
          registration statement, prospectus, offering circular or other
          document in reliance upon and in conformity with written information
          furnished by the Purchaser and stated to be specifically for use
          therein.

               (iii) Each party entitled to indemnification under this Section
          8(h) ("Indemnified Party") shall give notice to the party required to
          provide indemnification ("Indemnifying Party") promptly after such
          Indemnified Party has actual knowledge of any claim as to which
          indemnity may be sought, and shall permit the Indemnifying Party to
          assume the defense of any such claim or any litigation resulting
          therefrom, provided that counsel for the Indemnifying Party, who shall
          conduct the defense of such claim or any litigation resulting
          therefrom, shall be 


                                      -24-
<PAGE>

          approved by the Indemnified Party (whose approval shall not be
          unreasonably withheld), and the Indemnified Party may participate in
          such defense at such party's expense, and provided further that the
          failure of any Indemnified Party to give notice as provided herein
          shall not relieve the Indemnifying Party of its obligations under this
          Section 8. No Indemnifying Party, in the defense of any such claim or
          litigation, shall, except with the consent of each Indemnified Party,
          consent to entry of any judgment or enter into any settlement which
          does not include as an unconditional term thereof the giving by the
          claimant or plaintiff, to such Indemnified Party, of a release from
          all liability in respect to such claim or litigation. Each Indemnified
          Party shall furnish such information regarding itself or the claim in
          question as an Indemnifying Party may reasonably request in writing
          and as shall be reasonably required in connection with defense of such
          claim and litigation resulting therefrom.


          (i) Information by Purchaser. Purchaser shall furnish such information
     regarding Purchaser and the distribution proposed by Purchaser as the
     Company or Wellsway may reasonably request in writing and as shall be
     reasonably required in connection with any Registration, qualification or
     compliance referred to in this Section 8.

          (j) Transfer or Assignment of Registration Rights. The rights to cause
     Wellsway to Register securities granted under Section 8(e) may be
     transferred or assigned to a 


                                      -25-
<PAGE>

     transferee or assignee of any Registrable Securities, provided Wellsway is
     given written notice at the time of or within a reasonable time after said
     transfer or assignment, stating the name and address of said transferee or
     assignee and identifying the Registrable Securities transferred or assigned
     or the securities with respect to which such Registration rights are being
     transferred or assigned, and provided further that the transferee or
     assignee of such rights is not deemed by the Board of Directors of the
     Company, in its reasonably judgment, to be a competitor of the Company; and
     provided further that the transferee or assignee of such rights assumes the
     obligations of the Purchaser under this Section 8.


          (k) "Market Stand-off" Agreement. The Purchaser agrees, if requested
     by the Company or Wellsway and an underwriter of Common Stock (or other
     securities) of Wellsway, not to sell or to otherwise transfer or dispose of
     any Common Stock (or other securities) of Wellsway held by it during the
     ninety (90) day period following the effective date of a registration
     statement of Wellsway filed under the Securities Act of 1933, except for
     Shares which are the subject to such registration statement.

     9. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to the Company as follows:

          (a) It and/or its officers or employees are experienced in evaluating
     and investing in newly organized, high technology companies such as the
     Company.

                                      -26-
<PAGE>

          (b) It presently intends to acquire the Debentures, and pursuant to
     its Conversion Privileges, Company Shares for investment for its own
     account and not with the view to, or for resale in connection with, any
     distribution thereof. It understands that neither the Debentures nor the
     Shares have not been registered under the Securities Act of 1933 by reason
     of the specified exemption from the registration provisions of such
     Securities Act which depends upon, among other things, the bona fide nature
     of its investment as expressed herein.

          (c) It has had an opportunity to discuss the Company's business,
     management and financial affairs with its management and has had the
     opportunity to review the Company's facilities.

     10. Anti-dilution Protection.

          (a) The Purchaser shall receive additional shares of Common Stock
     ("Additional Shares"), upon conversion or thereafter, in the event Wellsway
     issues Common Stock at any time theretofore or thereafter for a
     consideration (as determined in good faith by Wellsway's Board of
     Directors) ("New Price") less than Forty-Seven cents ($0.47) per Share
     ("Original Price") for Shares purchased upon conversion prior to
     ______________, 1991; Sixty cents ($0.60) per Share ("Original Price") for
     Shares purchased upon conversion after _______________, 1991 but prior to
     _______________, 1992; and Eighty-Two cents ($0.82) per Share ("Original
     Price") for Shares purchased after


                                      -27-
<PAGE>

     _____________, 1993 but prior to _______________, 1994.

          (b) The number of such Additional Shares to be issued to the Purchaser
     shall be equal to the number obtained by (i) subtracting the New Price from
     the applicable Original Price, (ii) multiplying such number thereby
     obtained by the number of shares purchased at such Original Price and held
     by the Purchaser or otherwise obtainable by conversion at that time, and
     then (iii) dividing that product by the New Price.

          (c) For purposes of this provision, the Original Price shall be
     adjusted for stock splits, stock dividends, recombinations,
     reclassifications and the like, and same shall be applicable to the New
     Price as established in Section 10(a).

          (d) This section shall not apply to the issuance of Common Stock
     through (i) Employee Stock Plans or Employee Incentive Stock Options Plans
     or (ii) fringe benefit plans, provided, however, that the total number of
     shares excluded from operation of this Section 10 by subsections (i) and
     (ii) shall not exceed 25 percent of Wellsway's capitalization outstanding
     from time to time on a fully diluted basis.

          (e) The provisions of Section 10(a) hereof shall not apply after (i)
     the lapse of a period of five years from the execution of this Agreement,
     or (ii) the Company completes a public offering of its securities.

                                      -28-
<PAGE>

     11. Meetings. The Company will provide the Purchaser in a timely manner
with notices, agendas, minutes and other relevant documents pertaining to the
Board of Directors' and Shareholders' meetings. At its option, Purchaser's
representatives will be authorized to attend Board and Shareholder meetings as
non-voting participating guests.

     12. Survival of Representations, Warranties, Covenants and Agreements. All
representations and warranties, covenants and provisions in this Agreement or
any certificate or document delivered in connection with this Agreement or
pursuant thereto shall survive the making of the investment provided for herein
and the delivery of the Debentures. Any partial invalidity of the provisions
hereof shall not invalidate the remaining portions hereof.

     13. Notices and Demands. Any notices or demands required by this Agreement
shall be in writing and shall be deemed sufficiently given if (i): delivered
personally; (ii) mailed, certified or registered mail, return receipt requested;
or (iii) sent by overnight courier service providing written evidence of
delivery, to the party entitled to such notice or demand at the address set
forth below opposite its name, or at such other address as either party may
notify the other in writing.


     IFS INTERNATIONAL, INC.                    Rensselaer Technology Park
                                                125 Jordan Road
                                                Troy, New York 12180

     NEW YORK STATE SCIENCE                     99 Washington Avenue, Suite 1730
     AND TECHNOLOGY FOUNDATION                  Albany, New York 12210


                                      -29-
<PAGE>


     14. No Oral Modification or Waiver. This Agreement may not be changed,
modified or rescinded orally. Any change, modification or rescission must be in
writing and signed by the Company and the Purchaser or its transferees and
assignees. Any waiver of the provisions of this Agreement shall not be effective
unless made in writing and signed by the person against whom the enforcement of
any such waiver is sought.

     15. Construction and Miscellaneous.

          (a) Entire Agreement. This Agreement and any Debentures issued
     hereunder contain the entire agreement and understanding of the parties.
     There are no other understandings, terms, or conditions, oral or written,
     and neither party has relied upon any representation, whether oral or
     written, express or implied, not contained herein. All prior
     understandings, terms, conditions, or agreements are deemed superseded
     and/or merged in this Agreement.

          (b) Binding Effect. This Agreement shall bind and inure to the benefit
     of the parties, their respective successors (by merger, consolidation or
     otherwise) and assignees.

          (c) Severability. In the event any parts of this Agreement are found
     to be void or unenforceable, the remaining provisions of the Agreement
     shall nevertheless be binding with the same effect as though the void parts
     were deleted.


                                      -30-
<PAGE>

          (d) Governing Law. This Agreement has been negotiated, executed and
     shall be performed in the State of New York and shall be governed by the
     laws of that State.

          (e) Grammatical Usage. In construing this Agreement, feminine pronouns
     shall be substituted for those masculine in form (and vice versa), and
     plural terms shall be substituted for singular and singular for plural, in
     any place or situation where the context so requires.

          (f) Captions. The captions to this Agreement are inserted only for
     purposes of convenient reference and in no way define, limit or prescribe
     the scope of intent of this Agreement or any part hereof.

          (g) Counterparts. This Agreement may be executed in several
     counterparts, each of which shall be considered a legal original for all
     purposes. Any fully signed counterpart may be introduced into evidence in
     any action or proceeding without having to produce the others.



                                      -31-
<PAGE>


         IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized officers as of the ___ day of
________________. 1989.


                                       IFS INTERNATIONAL, INC.



                                       By:___________________________

                                       Title:________________________


                                       NEW YORK STATE SCIENCE
                                       AND TECHNOLOGY FOUNDATION



                                       By:___________________________

                                       Title:________________________



                                      -32-
<PAGE>



                               GUARANTY AGREEMENT



     WHEREAS, IFS International, Inc., a New York corporation ("IFS"), has made
certain covenants and agreements (collectively, the "Obligations") with the New
York State Science and Technology Foundation, a New York corporation (the
"Foundation"), pursuant to (1) those certain 7.5% Convertible Debentures issued
on _______, 1989 by IFS in favor of the Foundation (the "Debentures) and (2)
that certain Debenture Investment Agreement by and between IFS and the
Foundation dated _________, 1989 (the "Agreement");

     WHEREAS, Wellsway Ventures, Inc. (the "Guarantor") is the parent or holding
company of IFS;

     NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Guarantor hereby guarantees to the Foundation
the prompt performance by IFS of the Obligations and the payment of any losses,
costs and expenses, including reasonable attorneys' fees incurred by the
Foundation (all the foregoing being herein collectively called "Losses") arising
out of the nonperformance of the Obligations; this Guaranty Agreement being upon
the following terms and conditions:

     1. This instrument shall be an absolute and continuing guaranty, and shall
remain in full force and effect for all 


<PAGE>

periods during which IFS or its successors or assigns has any Obligations under
the Debentures and the Agreement.

     2. If Guarantor becomes liable for any obligations of IFS to the Foundation
other than under this Guaranty Agreement,such liability shall not be in any
manner impaired or affected hereby, and the rights of the Foundation hereunder
shall be cumulative of any and all other rights that the Foundation may ever
have against Guarantor. The exercise by the Foundation of any right or remedy
hereunder or under any other instrument, or at law or in equity, shall not
preclude the concurrent or subsequent exercise of any other right or remedy.

     3. In the event of default by IFS in the performance of the Obligations,
Guarantor shall, on demand and without further notice, without any notice having
been given to Guarantor previous to such demand of the acceptance by the
Foundation of this Guaranty Agreement, perform any part of the Obligations or
pay any and all losses incurred by the Foundation as a result of such
nonperformance by IFS, and it shall not be necessary for the Foundation, in
order to enforce such performance or payment by Guarantor, first to institute
suit or exhaust its remedies against IFS.

     4. Guarantor hereby agrees that its obligations under the terms of this
Guaranty Agreement shall not be released, 


                                 
<PAGE>

diminished, impaired, reduced, or affected by the occurrence of any one or more
of the following events:

          (a) Any waiver, change, discharge, amendment, extension, or other
     modification of any nature whatsoever to the terms and provisions of the
     Debentures and/or the Agreement.

          (b) Any neglect, delay, omission, failure or refusal by the Foundation
     to take or prosecute any action against IFS for a breach of the Debentures
     and/or the Agreement;

          (c) Any failure by the Foundation or IFS to notify Guarantor of any
     waiver, change, discharge, amendment, extension, or other modification of
     any of the terms or provisions of the Debentures and/or the Agreement or a
     breach of any nature whatsoever of any of the respective terms or
     provisions thereof by either IFS or the Foundation.

          (d) The merger or consolidation of IFS into any other corporation.

          (e) The insolvency of IFS, any assignment (voluntary or involuntary)
     by IFS for the benefit of its creditors, the institution (or subsequent
     decree) under any voluntary or involuntary proceedings, or the filing of
     any petition under any applicable liquidation, insolvency, reorganization,
     bankruptcy or similar debtor relief laws from time to time in effect.

          (g) The illegality of the Debentures and/or the Agreement.

     5. The provisions of this Guaranty Agreement are binding upon Guarantor and
upon its successors and assigns. Guarantor represents to the Foundation that it
has, or will have, a direct or indirect interest in IFS and Guarantor will
receive direct and indirect material benefits from the performance by IFS of its
Obligations under the terms of the Debentures and the Agreement. Guarantor may
not, without the prior written consent of the Foundation, assign any of its
obligations, rights, liabilities, or duties under this Guaranty Agreement.

     6. This Guaranty Agreement is for the benefit of the Foundation and its
successors and assigns, and in the event of a permitted assignment by the
Foundation of the Agreement and/or the Debentures, or any part thereof, or any
of the rights and benefits thereunder, the rights and benefits hereunder may be
transferred therewith.

     7. All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed 



                                        3
<PAGE>

to have been duly given, if delivered in person, telegraphed, telefaxed or upon
actual receipt if mailed by certified or registered mail, postage prepaid:

                           If Guarantor, to:
                           Wellsway Ventures, Inc.



                           If to the Foundation, to:

                           New York State Science and Technology Foundation
                           99 Washington Avenue
                           Albany, New York 12210

or such other address as the party to be notified shall have furnished to the
other part in writing.

     9. This Guaranty Agreement may be amended or modified only by a written
instrument executed jointly by Guarantor and the Foundation or by their
respective successors or assigns.

     10. This Guaranty Agreement is being executed and delivered, and is
intended to be performed, in the State of New York, and the substantive laws of
such state shall govern the validity, construction, enforcement, and
interpretation hereof.

     11. If any provision of this Guaranty Agreement is held to be illegal,
invalid, or unenforceable under present or future laws effective during the term
hereof, such provision shall be fully severable; the appropriate term or
provision shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this


                                        4
<PAGE>

Guaranty Agreement; and the remaining provisions hereof shall remain in full
force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom. Furthermore, in lieu of
such illegal, invalid, or unenforceable provision there shall be added
automatically as a part of this Guaranty Agreement a provision as similar in
terms to such illegal, invalid, or unenforceable provision as may be possible
and be legal, valid and enforceable.

     12. This Guaranty Agreement embodies the entire agreement between the
parties and supersedes all prior agreements and understandings, if any, relating
to the subject matter hereof.

     13. This Guaranty Agreement shall be binding upon and inure to the benefit
of the Guarantor and the Foundation, and their respective, successors and
assigns.


                                        5

<PAGE>



                             RESTRUCTURING AGREEMENT


     Agreement made as of the 6th day of May, 1993 among IFS INTERNATIONAL, INC.
a New York corporation having its principal place of business at Rensselaer
Technology Park, 125 Jordan Road, Troy, New York 12180 ("IFS"); NEW YORK STATE
SCIENCE AND TECHNOLOGY FOUNDATION a New York corporation having its principal
office and place of business at 99 Washington Avenue, Suite 1730, Albany, New
York 12210 ("Foundation"); and WELLSWAY VENTURES, INC. a Delaware corporation
having its principal place of business at
_____________________________________________________ ("Wellsway").

     WHEREAS, the Foundation previously purchased IFS's seven and one-half
percent (7.5%) Convertible Debenture in the principal amount of $80,000.00 due
July 6, 1992 (referred to herein as Debenture Number 1); IFS's seven and
one-half percent (7.5%) Convertible Debenture in the principal amount of
$80,000.00 due July 6, 1993 (referred to herein as Debenture Number 2) and IFS's
seven and one-half percent (7.5%) Convertible Debenture in the principal amount
of $90,000.00 due July 6, 1994 (referred to herein as Debenture Number 3). These
Debentures were all issued in accordance with the provisions of a certain
Debenture 

                                       -1-

<PAGE>


Investment Agreement between the parties dated July 6, 1989, (the
"Debenture Agreement"); and

     WHEREAS, Wellsway guaranteed IFS repayment of the Debentures and IFS'
performance of its obligations under the Debenture Agreement pursuant to the
provisions of a certain Guaranty Agreement dated July 6, 1989 (referred to
herein as the ("Guaranty"); and

     WHEREAS, upon the request of IFS, the Foundation has agreed to extend and
modify the payment terms of the Debentures and the Foundation has agreed to such
revisions on the terms and conditions set forth herein.

     NOW, THEREFORE, in pursuant of said agreement and in consideration of the
mutual promises, covenants and agreements contained herein and other good and
valuable consideration the receipt of which is hereby acknowledged by the
parties, IFS and the Foundation agree as follows:

     1. Debenture Number 1 is hereby replaced in its entirety by IFS's Debenture
in the principal amount of One Hundred Three 


                                      -2-
<PAGE>

Thousand Dollars ($103,000.00) which Debenture shall be designated as Debenture
Number 4 and shall be due and payable July 6, 1995. The other terms and
conditions of Debenture Number 4 are as more fully set forth in said Debenture a
true copy of which is attached hereto and made a part hereof.

     2. Debenture Number 2 is hereby be replaced in its entirety by IFS's
Debenture in the principal amount of One Hundred Three Thousand Dollars
($103,000.00) which Debenture shall be designed as Debenture Number 5. Debenture
Number 5 shall be due and payable July 6, 1996. The other terms and conditions
of Debenture Number 5 are as more fully set forth in said Debenture a true copy
of which is attached hereto and made a part hereof.

     3. Debenture Number 3 is hereby replaced in its entirety by IFS's Debenture
in the principal amount of One Hundred Fifteen Thousand Eight Hundred
Seventy-five Dollars ($115,875.00) which Debenture shall be designated as
Debenture Number 6. Debenture Number 6 shall be due and payable July 6, 1997.
The other terms and conditions of Debenture Number 6 are as more fully set forth
in said Debenture a true copy of which is attached hereto and made a part
hereof.

                                      -3-
<PAGE>

     4. IFS hereby warrants and covenants to the Foundation that as of the date
of this Agreement there are no disputes, offsets, claims or counter-claims of
any kind or nature whatsoever under the Debentures or the Debenture Agreement or
on the documents executed in connection herewith or therewith or the obligations
represented or evidenced thereby.

     5. Wellsway hereby ratifies and reaffirms the Guaranty and covenants that
the terms of such Guaranty shall remain in full force and effect and shall apply
to Debentures Numbered 4, 5 and 6 and the Debenture Agreement as modified
pursuant to the terms of this Restructuring Agreement.

     6. Any capitalized term not expressly defined herein shall have the meaning
ascribed to it in the Debenture Agreement.

     7. All references in the Debenture Agreement to the Debentures shall be
deemed to include Debentures Numbered 4, 5 and 6 attached hereto.

     8. All other terms of the Debenture Agreement that are not specifically
changed by this Restructuring Agreement remain in full 


                                      -4-
<PAGE>

force and effect and shall apply to the new Debentures. Any reference in the
Debenture Agreement to the term "Debentures" is hereby deemed to include the
Debentures 4, 5 and 6 attached hereto.

     9. This Restructuring Agreement may be executed in one or more
counterparts, each of which shall be considered an original for all purposes,
but all of which together shall constitute one and the same instrument.

     10. This Restructuring Agreement has been negotiated, executed and shall be
performed in the State of New York and shall be governed by and construed in
accordance with the laws of New York State, without regard to principals of
conflict of laws. This Agreement shall be binding upon and inure to the benefit
of IFS, Wellsway, the Foundation and their respective successors and assigns.

     11. No provision of this Agreement may be amended, modified, supplemented,
changed, waived, discharged or terminated unless each party consents thereto in
writing.

     IN WITNESS WHEREOF, the parties hereto have caused this


                                      -5-
<PAGE>

instrument to be executed by their duly authorized officers as of the date first
set above.

                                         IFS INTERNATIONAL, INC.



                                         By:_____________________________
                                            Its:


                                         NEW YORK STATE SCIENCE AND
                                           TECHNOLOGY FOUNDATION



                                         By:_____________________________
                                            Its:


                                         WELLSWAY VENTURES, INC.


                                         By:_____________________________
                                            Its:



                                       -5-

<PAGE>


                         SECOND RESTRUCTURING AGREEMENT


     Agreement made as of the 30th day of April, 1995 among IFS INTERNATIONAL,
INC. a New York corporation having its principal place of business at Rensselaer
Technology Park, 125 Jordan Road, Troy, New York 12180 ("IFS"); NEW YORK STATE
SCIENCE AND TECHNOLOGY FOUNDATION a New York corporation having its principal
office and place of business at 99 Washington Avenue, Suite 1730, Albany, New
York 12210 ("Foundation"); and WELLSWAY VENTURES, INC. a Delaware corporation
having its principal place of business at 185 Jordan Road, Troy, New York 12180
("Wellsway").

         WHEREAS, the Foundation previously purchased IFS's seven and one-half
percent (7.5%) Convertible Debenture in the principal amount of $80,000.00 due
July 6, 1992 (referred to herein as Debenture Number 1); IFS's seven and
one-half percent (7.5%) Convertible Debenture in the principal amount of
$80,000.00 due July 6, 1993 (referred to herein as Debenture Number 2) and IFS's
seven and one-half percent (7.5%) Convertible Debenture in the principal amount
of $90,000.00 due July 6, 1994 (referred to herein as Debenture Number 3). These
Debentures were all issued in accordance with the provisions of a certain
Debenture Investment 


                                       -1-

<PAGE>


Agreement between the parties dated July 6, 1989, (the "Debenture Agreement");
and

     WHEREAS, Wellsway guaranteed IFS's repayment of the Debentures and IFS's
performance of its obligations under the Debenture Agreement pursuant to the
provisions of a certain Guaranty Agreement dated July 6, 1989 (referred to
herein as the ("Guaranty"); and

     WHEREAS, upon the request of IFS, the Foundation agreed to extend and
modify the payment terms of the Debentures on the terms and conditions set forth
in a certain Restructuring Agreement dated as of May 6, 1993 ("First
Restructuring Agreement"). IFS issued Debentures numbered 4, 5 and 6 pursuant to
the First Restructuring Agreement to replace Debentures numbered 1, 2 and 3; and

     WHEREAS, upon the request of IFS, the Foundation has agreed to convert
$71,875 of the principal amount outstanding under Debentures numbered 4, 5, 6
(as defined in the First Restructuring Agreement) into shares of IFS's common
stock; agreed to waive all accrued interest on Debentures numbered 4, 5 and 6
from May 6, 1993 to April 30, 1995; and agreed to restructure the payment terms
of 


                                      -2-
<PAGE>

the remaining principal balance of Debentures numbered 4, 5 and 6 upon the
terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein and other good and valuable consideration, the
receipt of which is hereby acknowledged by the parties, IFS and the Foundation
agree as follows:

     1. A portion of the total principal amount of the Debentures equal to
$71,875 is hereby converted into 259,673 shares of Wellsway Ventures, Inc.
$.00001 par value common stock.

     2. The Foundation hereby waives its right to receive interest accrued on
Debentures numbered 4, 5 and 6 from May 6, 1993 through April 30, 1995 in the
amount of $37,187.52.

     3. Debenture Number 4 is hereby replaced in its entirety by IFS's Debenture
in the principal amount of Eighty Thousand Dollars ($80,000.00), which Debenture
shall be designated as Debenture Number 7 and shall be due and payable April 30,
1998. The other terms and conditions of Debenture Number 7 are as more fully set
forth in said Debenture, a true copy of which is attached hereto 


                                      -3-
<PAGE>

and made a part hereof.

     4. Debenture Number 5 is hereby replaced in its entirety by IFS's Debenture
in the principal amount of Eighty Thousand Dollars ($80,000.00), which Debenture
shall be designated as Debenture Number 8. Debenture Number 8 shall be due and
payable April 30, 1999. The other terms and conditions of Debenture Number 8 are
as more fully set forth in said Debenture, a true copy of which is attached
hereto and made a part hereof.

     5. Debenture Number 6 is hereby replaced in its entirety by IFS's Debenture
in the principal amount of Ninety Thousand Dollars ($90,000.00), which Debenture
shall be designated as Debenture Number 9. Debenture Number 9 shall be due and
payable April 30, 2000. The other terms and conditions of Debenture Number 9 are
as more fully set forth in said Debenture, a true copy of which is attached
hereto and made a part hereof.

     6. IFS hereby warrants and covenants to the Foundation that as of the date
of this Agreement there are no disputes, offsets, claims or counter-claims of
any kind or nature whatsoever under the Debentures or the Debenture Agreement or
on the documents executed


                                      -4-
<PAGE>

in connection herewith or therewith or the obligations represented or evidenced
thereby.

     7. Wellsway hereby ratifies and reaffirms the Guaranty and covenants that
the terms of such Guaranty shall remain in full force and effect and shall apply
to Debentures numbered 7, 8 and 9 and to the Debenture Agreement as modified
pursuant to the terms of this Second Restructuring Agreement.

     8. Any capitalized term not expressly defined herein shall have the meaning
ascribed to it in the Debenture Agreement.

     9. All references in the Debenture Agreement to the Debentures shall be
deemed to include Debentures numbered 7, 8 and 9 attached hereto.

     10. All other terms of the Debenture Agreement that are not specifically
changed by this Restructuring Agreement remain in full force and effect and
shall apply to the new Debentures. Any reference in the Debenture Agreement to
the term "Debentures" is hereby deemed to include Debentures 7, 8 and 9 attached
hereto.

                                      -5-
<PAGE>

     11. This Restructuring Agreement may be executed in one or more
counterparts, each of which shall be considered an original for all purposes,
but all of which together shall constitute one and the same instrument.

     12. This Restructuring Agreement has been negotiated, executed and shall be
performed in the State of New York and shall be governed by and construed in
accordance with the laws of New York State, without regard to principles of
conflict of laws. This Agreement shall be binding upon and inure to the benefit
of IFS, Wellsway, the Foundation and their respective successors and assigns.

     13. No provision of this Agreement may be amended, modified, supplemented,
changed, waived, discharged or terminated unless each party consents thereto in
writing.


                                      -6-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized officers as of the date first set above.

                                            IFS INTERNATIONAL, INC.



                                            By:_____________________________
                                               Its:


                                            NEW YORK STATE SCIENCE AND
                                              TECHNOLOGY FOUNDATION



                                            By:_____________________________
                                               Its:


                                            WELLSWAY VENTURES, INC.


                                            By:_____________________________
                                               Its:



                                      -7-
<PAGE>


               THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
               ACT OF 1933 OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR
               OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
               STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND ANY APPLICABLE
               STATE SECURITIES LAW OR AN OPINION OF COUNSEL SATISFACTORY TO THE
               COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.


                           7.5% CONVERTIBLE DEBENTURE

                         Due: April 30, 1998          No. 7


$80,000.00                                                       April 30, 1995


     FOR VALUE RECEIVED, IFS INTERNATIONAL, INC. (hereinafter called "Borrower")
a New York Corporation with its principal office and place of business at
Rensselaer Technology Park, 125 Jordan Road, Troy, New York 12180, promises to
pay to the order of NEW YORK STATE SCIENCE AND TECHNOLOGY FOUNDATION, 99
Washington Avenue, Albany, New York 12210 (hereinafter called "Holder") Eighty
Thousand and 00/100 Dollars ($80,000.00) at 99 Washington Avenue, Albany, New
York 12210 or at such other address as the Holder shall designate in writing,
with interest at the rate of seven and one-half percent (7.5%) per annum on the
outstanding balance as follows:

     1. Due Date. The outstanding principal amount of this Debenture, together
with all accrued and unpaid interest thereon shall be due on April 30, 1998
unless sooner accelerated by the Holder (see paragraph 7) or redeemed by the
Borrower (see paragraph 9).

     2. Interest Accrual. Interest on all sums advanced will be accrued and
compounded quarterly from the date of issuance to April 30, 1996 and the total
accumulated compounded interest due on that date will thereafter be paid in
accordance with paragraph 3 below.

     3. Interest Payments. Beginning May 1, 1996, and on the 


                                      -1-
<PAGE>

like day of each July, October, January, and April thereafter, accrued and
unpaid interest on the sum of (i) the principal balance outstanding and (ii) the
unpaid balance of deferred interest determined pursuant to paragraph 2 above
will be payable quarterly. In addition to such interest payment, Borrower shall
pay when such interest payment is due one eighth (1/8) of the amount of interest
determined pursuant to paragraph 2. A delinquency charge of four percent (4%)
(plus collection fees) will be immediately due and payable on the unpaid
principal and interest if such principal and/or interest is not paid on the date
it is due.

     4. Issuance as Part of Series. This Debenture is one of a duly authorized
issue of seven and one-half percent (7.5%) Convertible Debentures due 1998
through 2000 and so designated. The Debentures were issued under and pursuant to
a Debenture Investment Agreement dated as of July 6, 1989, as modified pursuant
to the terms of a certain Restructuring Agreement dated as of May 6, 1993
("First Restructuring Agreement") and as further modified pursuant to a certain
second restructuring agreement dated as of April 30, 1995 ("Second Restructuring
Agreement"). The Debenture Investment Agreement as so modified by the First
Restructuring Agreement and the Second Restructuring Agreement is hereinafter
called the "Agreement". The Agreement has been duly executed by the Borrower and
the Holder and the terms and provisions of which are applicable to and
includable in this Debenture as if set forth herein and constitute a description
of the respective rights, limitation or rights, obligations, duties and
immunities of the Borrower, the Holder and all subsequent Holders of the
Debentures.

     5. Registration and Transfer. This Debenture shall be registered in the
Holder's name on the books of the Borrower and may be transferred only by
delivery to a subsequent Holder and registration in the name of such subsequent
Holder on the books of the Borrower. This Debenture shall continue to be subject
to successive transfers and registrations but payment of any obligation
hereunder to the then registered Holder shall constitute full satisfaction of
the obligation represented by such payment.

     6. Conversion Privileges. Subject to the provisions of the Agreement, the
Holder of this Debenture, may convert it into shares of common stock of Wellsway
Ventures, Inc. ("Wellsway"), a Delaware corporation which is the parent or
holding company of the Borrower at any time with seven days' prior notice to the
Borrower. This 


                                      -2-
<PAGE>

Debenture delivered to the Borrower shall command conversion to
common stock of Wellsway in accordance with the prices in the following table,
subject to the provisions of Section 5, 6 and 10 of the Agreement:

                                                                  Price of
                    Period                                      Common Stock
                    ------                                      ------------

         April 30, 1995 - April 30, 1997                      $.42 per share

         May 1, 1997 - April 30, 1998                         $.574 per share


     7. Acceleration by Holder. The entire unpaid principal, deferred interest
and accrued interest shall become due and payable, at the option of the Holder,
upon the happening of any of the following (Event(s) of Default):

          (a) If the Borrower defaults in the payment of any sum due hereunder
     or under the other Debentures or under the Agreement, and such default is
     not cured within five (5) business days from the date the Holder gives
     written notice of default to the Borrower.

          (b) If any judgment in excess of Ten Thousand and 00/100 Dollars
     ($10,000.00) is entered against the Borrower and such judgment is not
     satisfied of record with ten (10) days after written notice from the
     Holder, or if the Borrower fails to file an appeal from such judgment and
     provide a bond sufficient to pay the same or otherwise obtain a stay of
     enforcement of such judgment within ten (10) days after notice from the
     Holder.

          (c) In the event the Borrower makes a general assignment for the
     benefit of creditors, is subject to a proceeding under any bankruptcy or
     insolvency laws, has a receiver appointed for all or substantially all of
     its assets, or suffers an acceleration of or warrant of attachment for any
     other indebtedness in excess of $10,000, and fails to pay any such
     indebtedness within ten (10) days after written notice from the Holder or,
     in the case of any involuntary bankruptcy proceedings, fails to secure a
     discharge or dismissal of such proceedings within sixty (60) days after it
     is commenced.

                                      -3-
<PAGE>

          (d) If any of the Borrower's covenants in the Agreement are not
     performed or complied with within ten (10) days after written notice of
     breach of covenant from any Holder of any Debenture issued under the
     Agreement.

          (e) If any of the Borrower's representations and warranties in the
     Agreement prove to have been materially false when made.

          (f) In the event of destruction or condemnation of Borrower's premises
     and failure of the Borrower to continue its business at a new location
     within a reasonable time after such destruction or condemnation.

     8. No Waiver. No delay by any Holder in exercising and no failure or
omission to exercise and no single or partial exercise of any right or power
hereunder shall preclude other or further exercise hereof or the exercise of any
other right or power by the Holder of any debenture or of any subsequent Holder
thereof.

     9. Redemption by Borrower. Subject to the Holder's rights under Section 6,
hereof, this Debenture is subject to call or redemption by the Borrower at any
time after one year from the date hereof on sixty (60) days' written notice to
the Holder for Eighty Thousand and 00/100 Dollars ($80,000.00) plus all unpaid
accrued interest. If less than all of the Debentures are to be called, the
specific Debenture to be called will first be the Debenture due in 1998, then
the Debenture due in 1999, and finally the Debenture due in 2000.

     10. Attorneys' Fees. If this Debenture is not paid in accordance with its
terms, the Holder may charge and Borrower must pay reasonable attorneys fees to
the Holder should this debenture be referred to counsel for collection.

     11. Construction and Miscellaneous. The provisions of this Debenture and of
the Agreement shall bind and inure to the benefit of the Borrower, the Holder
and their respective successors and assigns, including any subsequent Holders.
This Debenture shall be construed in accordance with the laws of the State of
New York. Any modification of this Debenture must be in writing and signed by
both the Borrower and the Holder in order to become binding. No purported waiver
of any of the provisions of this Debenture shall 


                                      -4-
<PAGE>

be enforceable unless contained in a writing signed by or on behalf of the party
sought to be charged with any such waiver. The captions or paragraph headings of
this Debenture are for convenient reference only and in no way define, limit or
prescribe the meaning and interest of the various provisions hereof.

     IN WITNESS WHEREOF, IFS International, Inc. has caused its corporate seal
to be hereto affixed and this Debenture to be signed by its duly authorized
officer the day and year first written hereinabove.

(SEAL)                                     IFS INTERNATIONAL, INC.



                                           By:__________________________

Attest



- ---------------------------
Secretary



                                      -5-
<PAGE>


               THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
               ACT OF 1933 OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR
               OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
               STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND ANY APPLICABLE
               STATE SECURITIES LAW OR AN OPINION OF COUNSEL SATISFACTORY TO THE
               COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.


                           7.5% CONVERTIBLE DEBENTURE

                       Due: April 30, 1999          No. 8


$80,000.00                                                        April 30, 1995


     FOR VALUE RECEIVED, IFS INTERNATIONAL, INC. (hereinafter called "Borrower")
a New York Corporation with its principal office and place of business at
Rensselaer Technology Park, 125 Jordan Road, Troy, New York 12180, promises to
pay to the order of NEW YORK STATE SCIENCE AND TECHNOLOGY FOUNDATION, 99
Washington Avenue, Albany, New York 12210 (hereinafter called "Holder") Eighty
Thousand and 00/100 Dollars ($80,000.00) at 99 Washington Avenue, Albany, New
York 12210 or at such other address as the Holder shall designate in writing,
with interest at the rate of seven and one-half percent (7.5%) per annum on the
outstanding balance as follows:

     1. Due Date. The outstanding principal amount of this Debenture, together
with all accrued and unpaid interest thereon shall be due on April 30, 1999
unless sooner accelerated by the Holder (see paragraph 7) or redeemed by the
Borrower (see paragraph 9).

     2. Interest Accrual. Interest on all sums advanced will be accrued and
compounded quarterly from the date of issuance to April 30, 1996 and the total
accumulated compounded interest due on that date will thereafter be paid in
accordance with paragraph 3 below.

     3. Interest Payments. Beginning May 1, 1996, and on the


                                      -1-
<PAGE>

like day of each July, October, January, and April thereafter, accrued and
unpaid interest on the sum of (i) the principal balance outstanding and (ii) the
unpaid balance of deferred interest determined pursuant to paragraph 2 above
will be payable quarterly. In addition to such interest payment, Borrower shall
pay when such interest payment is due one eighth (1/8) of the amount of interest
determined pursuant to paragraph 2. A delinquency charge of four percent (4%)
(plus collection fees) will be immediately due and payable on the unpaid
principal and interest if such principal and/or interest is not paid on the date
it is due.

     4. Issuance as Part of Series. This Debenture is one of a duly authorized
issue of seven and one-half percent (7.5%) Convertible Debentures due 1998
through 2000 and so designated. The Debentures were issued under and pursuant to
a Debenture Investment Agreement dated as of July 6, 1989, as modified pursuant
to the terms of a certain Restructuring Agreement dated as of May 6, 1993
("First Restructuring Agreement") and as further modified pursuant to a certain
second restructuring agreement dated as of April 30, 1995 ("Second Restructuring
Agreement"). The Debenture Investment Agreement as so modified by the First
Restructuring Agreement and the Second Restructuring Agreement is hereinafter
called the "Agreement". The Agreement has been duly executed by the Borrower and
the Holder and the terms and provisions of which are applicable to and
includable in this Debenture as if set forth herein and constitute a description
of the respective rights, limitation or rights, obligations, duties and
immunities of the Borrower, the Holder and all subsequent Holders of the
Debentures.

     5. Registration and Transfer. This Debenture shall be registered in the
Holder's name on the books of the Borrower and may be transferred only by
delivery to a subsequent Holder and registration in the name of such subsequent
Holder on the books of the Borrower. This Debenture shall continue to be subject
to successive transfers and registrations but payment of any obligation
hereunder to the then registered Holder shall constitute full satisfaction of
the obligation represented by such payment.

     6. Conversion Privileges. Subject to the provisions of the Agreement, the
Holder of this Debenture, may convert it into shares of common stock of Wellsway
Ventures, Inc. ("Wellsway"), a Delaware corporation which is the parent or
holding company of the Borrower at any time with seven days' prior notice to the
Borrower. This


                                      -2-
<PAGE>

Debenture delivered to the Borrower shall command conversion to common stock of
Wellsway in accordance with the prices in the following table, subject to the
provisions of Section 5, 6 and 10 of the Agreement:

                                                              Price of
                           Period                            Common Stock
                           ------                            ------------

         April 30, 1995 - April 30, 1997                    $.42 per share

         May 1, 1997 - April 30, 1999                       $.574 per share


     7. Acceleration by Holder. The entire unpaid principal, deferred interest
and accrued interest shall become due and payable, at the option of the Holder,
upon the happening of any of the following (Event(s) of Default):

          (a) If the Borrower defaults in the payment of any sum due hereunder
     or under the other Debentures or under the Agreement, and such default is
     not cured within five (5) business days from the date the Holder gives
     written notice of default to the Borrower.

          (b) If any judgment in excess of Ten Thousand and 00/100 Dollars
     ($10,000.00) is entered against the Borrower and such judgment is not
     satisfied of record with ten (10) days after written notice from the
     Holder, or if the Borrower fails to file an appeal from such judgment and
     provide a bond sufficient to pay the same or otherwise obtain a stay of
     enforcement of such judgment within ten (10) days after notice from the
     Holder.

          (c) In the event the Borrower makes a general assignment for the
     benefit of creditors, is subject to a proceeding under any bankruptcy or
     insolvency laws, has a receiver appointed for all or substantially all of
     its assets, or suffers an acceleration of or warrant of attachment for any
     other indebtedness in excess of $10,000, and fails to pay any such
     indebtedness within ten (10) days after written notice from the Holder or,
     in the case of any involuntary bankruptcy proceedings, fails to secure a
     discharge or dismissal of such proceedings within sixty (60) days after it
     is commenced.

                                      -3-
<PAGE>

          (d) If any of the Borrower's covenants in the Agreement are not
     performed or complied with within ten (10) days after written notice of
     breach of covenant from any Holder of any Debenture issued under the
     Agreement.

          (e) If any of the Borrower's representations and warranties in the
     Agreement prove to have been materially false when made.

          (f) In the event of destruction or condemnation of Borrower's premises
     and failure of the Borrower to continue its business at a new location
     within a reasonable time after such destruction or condemnation.

     8. No Waiver. No delay by any Holder in exercising and no failure or
omission to exercise and no single or partial exercise of any right or power
hereunder shall preclude other or further exercise hereof or the exercise of any
other right or power by the Holder of any debenture or of any subsequent Holder
thereof.

     9. Redemption by Borrower. Subject to the Holder's rights under Section 6,
hereof, this Debenture is subject to call or redemption by the Borrower at any
time after one year from the date hereof on sixty (60) days' written notice to
the Holder for Eighty Thousand and 00/100 Dollars ($80,000.00) plus all unpaid
accrued interest. If less than all of the Debentures are to be called, the
specific Debenture to be called will first be the Debenture due in 1998, then
the Debenture due in 1999, and finally the Debenture due in 2000.

     10. Attorneys' Fees. If this Debenture is not paid in accordance with its
terms, the Holder may charge and Borrower must pay reasonable attorneys fees to
the Holder should this debenture be referred to counsel for collection.

     11. Construction and Miscellaneous. The provisions of this Debenture and of
the Agreement shall bind and inure to the benefit of the Borrower, the Holder
and their respective successors and assigns, including any subsequent Holders.
This Debenture shall be construed in accordance with the laws of the State of
New York. Any modification of this Debenture must be in writing and signed by
both the Borrower and the Holder in order to become binding. No 


                                      -4-
<PAGE>

purported waiver of any of the provisions of this Debenture shall be enforceable
unless contained in a writing signed by or on behalf of the party sought to be
charged with any such waiver. The captions or paragraph headings of this
Debenture are for convenient reference only and in no way define, limit or
prescribe the meaning and interest of the various provisions hereof.

     IN WITNESS WHEREOF, IFS International, Inc. has caused its corporate seal
to be hereto affixed and this Debenture to be signed by its duly authorized
officer the day and year first written hereinabove.

(SEAL)                                         IFS INTERNATIONAL, INC.



                                               By:__________________________

Attest



- ---------------------------
Secretary



                                      -5-
<PAGE>

               THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
               ACT OF 1933 OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR
               OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
               STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND ANY APPLICABLE
               STATE SECURITIES LAW OR AN OPINION OF COUNSEL SATISFACTORY TO THE
               COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

                           7.5% CONVERTIBLE DEBENTURE

                        Due: April 30, 2000          No. 9


$90,000.00                                                       April 30, 1995


     FOR VALUE RECEIVED, IFS INTERNATIONAL, INC. (hereinafter called "Borrower")
a New York Corporation with its principal office and place of business at
Rensselaer Technology Park, 125 Jordan Road, Troy, New York 12180, promises to
pay to the order of NEW YORK STATE SCIENCE AND TECHNOLOGY FOUNDATION, 99
Washington Avenue, Albany, New York 12210 (hereinafter called "Holder") Ninety
Thousand and 00/100 Dollars ($90,000.00) at 99 Washington Avenue, Albany, New
York 12210 or at such other address as the Holder shall designate in writing,
with interest at the rate of seven and one-half percent (7.5%) per annum on the
outstanding balance as follows:

     1. Due Date. The outstanding principal amount of this Debenture, together
with all accrued and unpaid interest thereon shall be due on April 30, 2000
unless sooner accelerated by the Holder (see paragraph 7) or redeemed by the
Borrower (see paragraph 9).

     2. Interest Accrual. Interest on all sums advanced will be accrued and
compounded quarterly from the date of issuance to April 30, 1996 and the total
accumulated compounded interest due on that date will thereafter be paid in
accordance with paragraph 3 below.

     3. Interest Payments. Beginning May 1, 1996, and on the like day of each
July, October, January, and April thereafter,


                                      -1-
<PAGE>

accrued and unpaid interest on the sum of (i) the principal balance outstanding
and (ii) the unpaid balance of deferred interest determined pursuant to
paragraph 2 above will be payable quarterly. In addition to such interest
payment, Borrower shall pay when such interest payment is due one eighth (1/8)
of the amount of interest determined pursuant to paragraph 2. A delinquency
charge of four percent (4%) (plus collection fees) will be immediately due and
payable on the unpaid principal and interest if such principal and/or interest
is not paid on the date it is due.

     4. Issuance as Part of Series. This Debenture is one of a duly authorized
issue of seven and one-half percent (7.5%) Convertible Debentures due 1998
through 2000 and so designated. The Debentures were issued under and pursuant to
a Debenture Investment Agreement dated as of July 6, 1989, as modified pursuant
to the terms of a certain Restructuring Agreement dated as of May 6, 1993
("First Restructuring Agreement") and as further modified pursuant to a certain
second restructuring agreement dated as of April 30, 1995 ("Second Restructuring
Agreement"). The Debenture Investment Agreement as so modified by the First
Restructuring Agreement and the Second Restructuring Agreement is hereinafter
called the "Agreement". The Agreement has been duly executed by the Borrower and
the Holder and the terms and provisions of which are applicable to and
includable in this Debenture as if set forth herein and constitute a description
of the respective rights, limitation or rights, obligations, duties and
immunities of the Borrower, the Holder and all subsequent Holders of the
Debentures.

     5. Registration and Transfer. This Debenture shall be registered in the
Holder's name on the books of the Borrower and may be transferred only by
delivery to a subsequent Holder and registration in the name of such subsequent
Holder on the books of the Borrower. This Debenture shall continue to be subject
to successive transfers and registrations but payment of any obligation
hereunder to the then registered Holder shall constitute full satisfaction of
the obligation represented by such payment.

     6. Conversion Privileges. Subject to the provisions of the Agreement, the
Holder of this Debenture, may convert it into shares of common stock of Wellsway
Ventures, Inc. ("Wellsway"), a Delaware corporation which is the parent or
holding company of the Borrower at any time with seven days' prior notice to the
Borrower. This Debenture delivered to the Borrower shall command conversion to

                                      -2-
<PAGE>

common stock of Wellsway in accordance with the prices in the following table,
subject to the provisions of Section 5, 6 and 10 of the Agreement:

                                                            Price of
                           Period                         Common Stock
                           ------                         ------------


         April 30, 1995 - April 30, 1997                 $.42 per share

         May 1, 1997 - April 30, 2000                    $.574 per share


     7. Acceleration by Holder. The entire unpaid principal, deferred interest
and accrued interest shall become due and payable, at the option of the Holder,
upon the happening of any of the following (Event(s) of Default):

          (a) If the Borrower defaults in the payment of any sum due hereunder
     or under the other Debentures or under the Agreement, and such default is
     not cured within five (5) business days of the following (Event(s) of
     Default):

          (a) If the Borrower defaults in the payment of any sum due hereunder
     or under the other Debentures or under the Agreement, and such default is
     not cured within five (5) business days from the date the Holder gives
     written notice of default to the Borrower.

          (b) If any judgment in excess of Ten Thousand and 00/100 Dollars
     ($10,000.00) is entered against the Borrower and such judgment is not
     satisfied of record with ten (10) days after written notice from the
     Holder, or if the Borrower fails to file an appeal from such judgment and
     provide a bond sufficient to pay the same or otherwise obtain a stay of
     enforcement of such judgment within ten (10) days after notice from the
     Holder.

          (c) In the event the Borrower makes a general assignment for the
     benefit of creditors, is subject to a proceeding under any bankruptcy or
     insolvency laws, has a receiver appointed for all or substantially all of
     its assets, or suffers an acceleration of or warrant of attachment for any
     other indebtedness in excess of


                                      -3-
<PAGE>

     $10,000, and fails to pay any such indebtedness within ten (10) days after
     written notice from the Holder or, in the case of any involuntary
     bankruptcy proceedings, fails to secure a discharge or dismissal of such
     proceedings within sixty (60) days after it is commenced.

          (d) If any of the Borrower's covenants in the Agreement are not
     performed or complied with within ten (0) days after written notice of
     breach of covenant from any Holder of any Debenture issued under the
     Agreement.

          (e) If any of the Borrower's representations and warranties in the
     Agreement prove to have been materially false when made.

          (f) In the event of destruction or condemnation of Borrower's premises
     and failure of the Borrower to continue its business at a new location
     within a reasonable time after such destruction or condemnation.

     8. No Waiver. No delay by any Holder in exercising and no failure or
omission to exercise and no single or partial exercise of any right or power
hereunder shall preclude other or further exercise hereof or the exercise of any
other right or power by the Holder of any debenture or of any subsequent Holder
thereof.

     9. Redemption by Borrower. Subject to the Holder's rights under Section 6,
hereof, this Debenture is subject to call or redemption by the Borrower at any
time after one year from the date hereof on sixty (60) days' written notice to
the Holder for Ninety Thousand and 00/100 Dollars ($90,000.00) plus all unpaid
accrued interest. If less than all of the Debentures are to be called, the
specific Debenture to be called will first be the Debenture due in 1998, then
the Debenture due in 1998, and finally the Debenture due in 2000.

     10. Attorneys' Fees. If this Debenture is not paid in accordance with its
terms, the Holder may charge and Borrower must pay reasonable attorneys fees to
the Holder should this debenture be referred to counsel for collection.

     11. Construction and Miscellaneous. The provisions of this Debenture and of
the Agreement shall bind and inure to the benefit


                                      -4-
<PAGE>

of the Borrower, the Holder and their respective successors and assigns,
including any subsequent Holders. This Debenture shall be construed in
accordance with the laws of the State of New York. Any modification of this
Debenture must be in writing and signed by both the Borrower and the Holder in
order to become binding. No purported waiver of any of the provisions of this
Debenture shall be enforceable unless contained in a writing signed by or on
behalf of the party sought to be charged with any such waiver. The captions or
paragraph headings of this Debenture are for convenient reference only and in no
way define, limit or prescribe the meaning and interest of the various
provisions hereof.

     IN WITNESS WHEREOF, IFS International, Inc. has caused its corporate seal
to be hereto affixed and this Debenture to be signed by its duly authorized
officer the day and year first written hereinabove.

(SEAL)                                            IFS INTERNATIONAL, INC.



                                                  By:__________________________

Attest



- ---------------------------
Secretary



                                      -5-


                                 LOAN AGREEMENT

     This Agreement is made by and between North Greenbush Industrial
Development Agency, a municipal corporation organized and existing under the
laws of the State of New York with an address for the transaction of business at
P.O. BOX 39, Wynantskill, New York ("Lender") and IFS International, Inc. a
corporation, organized and existing under the laws of the State of New York with
an office for the transaction of business at 125 Jordan Road, Troy, New York
("Borrower").

                                   WITNESSETH:

     The Borrower desires to obtain a business loan from the Lender, and the
Lender is willing the extend such credit to the Borrower on the terms
hereinafter set forth.

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

     1. Loan. Subject to the terms and conditions stated herein, the Lender
shall lend to the Borrower $225,000.00 to be evidenced by a subordinated
debenture of the Borrower in substantially the form of Exhibit "A" attached
hereto, in the principal amount of $225,000.00 and bearing interest at a rate of
seven and one-half percent (7.5%) per annum until maturity, five (5) years from
the date thereof. The payment terms are more fully set forth in the attached
form of subordinated debenture and provide for interest only for twenty-four
(24) months and then payments of principal and interest in accordance with a 15
year amortization schedule over the balance of the five (5)-year term of the
loan.

     2. Warrant. In consideration of the loan contemplated herein, Borrower
shall grant to Lender a warrant for the purchase of up to 48,188 shares of
Borrower's Preferred A Stock in substantially the form of Exhibit "B" attached
hereto, exercisable by Lender for a period six (6) years from the date thereof
at a price of $2.05 per Share.

     3. Certificate. In further consideration of the loan contemplated herein,
Borrower shall issue to Lender a certificate for 19,207 shares of Borrower's
Preferred A stock. In the event of a reduction of the per share Purchase Price
under the paragraph 2(d) of the Warrant, the number of shares represented

7
                                       l


<PAGE>


by the said certificate shall be correspondingly increased to the number of
shares which when multiplied by the reduced per share Purchase Price equals
$39,374.

     4. Covenants. The borrower covenants and warrants as follows:

          (a) It will exert its best efforts to comply will all applicable laws,
     ordinances, codes, rules and regulations of the state, local and federal
     governments, and all amendments thereto.

          (b) The Borrower will use its best efforts to create new employment
     opportunities over the next five years which will satisfy the standards
     detailed in the local regulations for the North Greenbush Venture Capital
     Fund. Pursuant to this commitment, the Borrower shall undertake to create
     40 new permanent jobs at the North Greenbush location; at least 25 of which
     will be technical or clerical positions available to persons from low or
     moderate income households.

          (c) Prior to the relocation out of the Town of North Greenbush of any
     of the positions or functions identified at Exhibit C, the Borrower shall
     request the approval of the Lender detailing the reasons for such
     relocation and evidence that a majority of the Borrower's Board of
     Directors has approved the relocation. The Lender shall review the request
     and notify the Borrower of the approval or disapproval thereof within
     thirty (30) days after its receipt of the request.

          (d) The Borrower will provide the Town of North Greenbush or its
     designated agents periodic reports (at least quarterly) detailing the
     results of its operations and the status of new employment in the town in
     the form prescribed by Lender.

          (e) Audited financial statements will be provided within 90 days after
     the end of each fiscal year. Duly authorized representatives of the Town of
     North Greenbush, the IDA, HUD and the Comptroller General of the United
     States will have access to all books and records of the Borrower at
     reasonable times.

     5. Call. In the event (i) the Borrower relocates any position or function
appearing at Exhibit C without obtaining the approval of the Lender under
paragraph 4(c) above; or (ii) fails


                                        2


<PAGE>


to  create  the 40 new  permanent  jobs at least 25 of which  are  technical  or
clerical in  accordance  with  paragraph  4(b) above,  the Lender shall have the
right  to call  the  Subordinated  Debenture  and to  require  the  Borrower  to
repurchase  all of  Borrower's  stock  purchased  hereunder at the price paid by
Lender. In the event Lender calls or otherwise accelerates the said subordinated
debenture  hereunder  or  otherwise,  Lender  shall  surrender  that  portion of
Lender's rights under the Warrant  (paragraph 2) and the Certificate  (paragraph
3) which  bears the same  relationship  to the  entirety  of such  rights as the
unexpired term of the subordinated debenture bears to original term thereof. Any
such call by Lender shall be made within ninety (90) days after Lender's receipt
of notice of the occurrence of the underlying event, and repayment shall be made
by  Borrower  within  sixty (60) days  after  receipt of notice of the call from
Lender.

     6. Events of Default. All obligations of the Lender may be terminated and
the entire unpaid balance of the subordinated debenture declared immediately due
and payable at the Lender's election upon the happening of any one of the
following events of default:

          (a) Borrower shall fail to pay when due any principal or interest on
     any indebtedness herein; or

          (b) The pendency of a petition for a declaration of bankruptcy or for
     reorganization of lender pursuant to the Federal Bankruptcy Code or any
     similar law, federal or state if such petition shall not be discharged or
     dismissed within sixty (60) days after the date on which petition was
     filed; or the entry of any order of any court appointing a receiver or
     trustee for Borrower of all or a substantial portion of its property and
     the failure to have such order vacated or stayed within thirty (30) days
     after its entry; or the issuance of a writ or warrant of attachment or
     similar process against all or substantially all of the property of the
     Borrower, and the failure to have such writ or warrant or similar process
     released or bonded within thirty (30) days after its issuance; or

          (c) Borrower shall fail to pay within sixty (60) days after notice of
     and demand for acceleration of payment of principal and/or interest under
     any Senior Debt; or

          (d) Borrower shall breach any one or more of the warranties,
     representations, or covenants contained herein.


                                        3


<PAGE>


and such default shall continue unremedied for a period of sixty (60) days after
written notice thereof has been given to Borrower by Lender.

     7. Closing. The Closing of this loan shall take place at the offices of the
Lender as soon as is reasonably practicable after November 15, 1988, at 10:00
a.m. (the "Closing").

     8. Representations and Warranties of Borrower. The Borrower represents and
warrants to the Lender that each of the following representations and warranties
is true and correct:

          (a) Corporate Existence. The Borrower is a corporation duly
     incorporated, validly existing and in good standing under the laws of the
     State of New York, and has full corporate and other power and authority to
     conduct its business and own its properties as now conducted and owned.

          (b) Power and Authority to Enter this Transaction. The Borrower has
     full power and authority and has taken all required corporate and other
     action necessary to permit it to execute and deliver this Agreement, to
     execute and deliver the subordinated debenture and to issue the warrants as
     provided herein and otherwise carry out the terms of this Agreement and all
     other documents, instruments and transactions required by this Agreement,
     and none of these actions will violate any provisions of the By-Laws of the
     Borrower or of its Certificate of Incorporation or result in the breach of
     or constitute a default under any agreement or instruments to which the
     Borrower is a party or by which it is bound, or result in the creation or
     imposition of any lien, claim or encumbrance on any asset of the Borrower.
     This Agreement has been duly executed and delivered by the Borrower and
     constitutes the valid and binding obligation of the Borrower enforceable
     against the Borrower in accordance with its terms.

          (c) No Approvals Required. The Borrower is not required to obtain any
     order, consent, approval or authorization of, or presently required to make
     declaration or filing with, any governmental authority in connection with
     the execution delivery of this Agreement, or the negotiation, offer, issue,
     sale and delivery of the warrants pursuant to this Agreement, except as
     shall have been fulfilled by the Company.


                                        4


<PAGE>


     9. Representations and Warranties of Lender. The Lender hereby represents
and warrants to Borrower that each of the following warranties and
representations is true and correct:

          (a) Power and Authority to Enter this Transaction. The Lender has full
     power and authority and has taken all required corporate and other action
     to permit it to execute and deliver this and otherwise carry out the terms
     of this Agreement and all other documents, instruments and transactions
     required by this Agreement, and none of these actions will violate any
     provisions of the by-laws of the Lender or of its certificate of
     incorporation or result in the breach of or constitute default under any
     agreement or instrument to which the Lender is a party or by which it is
     bound. This Agreement has been duly executed and delivered by the Lender
     and is enforceable against the Lender in accordance with its terms.

          10. Miscellaneous.

          (a) No modification, rescission, waiver, release or amendment of any
     provision of this Agreement shall be made except by a written agreement
     subscribed by duly authorized officers of the Borrower and the Lender.

          (b) Any notice or demand to be given hereunder or on the subordinated
     debenture shall be deemed to have been duly given and made if delivered or
     mailed by registered or certified mail as follows:

       To the LENDER:                                To the BORROWER:

     Hon. James Flanigan, Chairman                   IFS International Inc.
     North Greenbush Industrial                      Attn: The President
       Development Agency                            125 Jordan Road
     Town Office, Main Avenue                        Troy, NY 12180
     P.O. Box 39                                     (518) 283-7900
     Wynantskill, NY 12198

or at such other addresses as either of the Parties may furnish to the other in
writing as prescribed herein.

          (c) This Agreement, the transaction involved hereby and the obligation
     of the parties hereunder shall be construed and interpreted in accordance
     with the laws of the State of New York.


                                        5


<PAGE>


          (d) This Agreement, the subordinated debenture and the Warrant are
     nonassignable except to an entity in which the Lender and/or its affiliates
     control a majority interest.

          (e) IFS represents and warrants that no broker's or finder's fee is
     payable by IFS in connection with this financing.

          (f) The warranties, representations, and covenants of the parties
     contained herein or made pursuant to this Agreement shall survive the
     execution and delivery of this Agreement at the Closing.

     IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
signed by their duly authorized officers and their corporate seals to be
hereunto affixed, all as of the day and year first above written.

           LENDER                                           BORROWER

North Greenbush Industrial                       IFS INTERNATIONAL, INC.
Development Agency

by: /s/ James Flanigan, Chairman                 by: /s/ [illegible]
    ----------------------------                     ---------------------------

date: 1/11/89                                    date:
     -------------------------                        --------------------------
                                                 Frank A. [ILLEGIBLE]
                                                 Vice-President
                                                 1/11/89


                                       6


<PAGE>


                                                                       $225, 000
                                                                       ---------

                             IFS INTERNATIONAL, INC.

                                 TROY, NEW YORK

                  FIVE YEAR, SUBORDINATED REGISTERED DEBENTURE

     IFS INTERNATIONAL, INC., a corporation organized and existing under the
laws of the State of New York, with principal office at Rensselaer Technology
Park, 125 Jordan Road, Troy, New York 12180 (the "Corporation"), for value
received pursuant to the terms of that certain Loan Agreement entered into
between the parties contemporaneously herewith, promises to pay to the
registered holder hereof the sum of $225,000, with interest on such amount from
the date issued until paid at a rate of seven and one-half percent (7.5%) per
annum. Interest only shall be payable semi-annually for a period of two (2)
years, on the first days of June and December of 1989 and 1990. Thereafter, the
Corporation shall pay the remaining balance in six (6) semiannual installments
on the first day of June and December in each and every year that the debenture
is outstanding, commencing June 1, 1991 and ending December 1, 1993. The first
five such installments shall be based upon a fifteen year amortization schedule,
and the sixth such installment shall fully liquidate the remaining indebtedness
in its entirety. All the interest payable hereon shall be cumulative.

     1. Manner of Payment. Payment of principal will be made in lawful money of
the United States of America at the principal offices of the Corporation upon
presentation of this debenture instrument. Payment of any interest earned and
payable hereon shall be also payable at the principal office of the Corporation
in Troy, New York, except that the Corporation shall, upon request of the
registered holder hereof, mail a check or draft representing such interest to
the registered holder at his address appearing on the Corporation's books of
registration.

     2. Issue. This Subordinated Debenture instrument is the only five year,
7.5% registered debenture limited in the aggregate to Two Hundred Twenty-Five
Thousand Dollars ($225,000), dated as of November 1988.

     3. Redemption. This debenture instrument is subject to redemption at any
time prior to maturity, upon payment of the principal amount thereof and accrued
interest, at the election or option of the Corporation, its successors or
assigns, upon giving notice of its election to redeem, by registered or
certified mail, return receipt requested, directed to the registered holder
hereof, at such registered holder's address as shown on the books of
registration of the Corporation, which notice shall be at least thirty (30) days
prior to the date of redemption. If the


                                       1


<PAGE>


registered holder hereof fails and neglects to present this debenture instrument
at the time and place in such notice specified, this debenture shall cease to
bear interest thereafter unless payment thereof is refused upon presentation of
the same at or after the time specified in such notice.

     4. Registration and Transfer. Books for the registration of this debenture
are kept at the offices of the Corporation at Rensselaer Technology Park, 125
Jordan Road, Troy, New York. No transfer hereof shall be valid unless made on
the Corporation's registration books by the registered holder thereof, in person
or by attorney in fact duly authorized in writing.

     5. Payment and Discharge . Payment to the registered holder hereof of
principal, all accrued interest and any applicable premium shall be a complete
discharge of the Corporation's liability with respect to such payment, but the
Corporation may, at any time, require the presentation of this debenture
instrument as a condition precedent to any such payment.

     6. No Liability. No recourse shall be had for the payment of any principal
of, interest upon, or any premium payable with respect to this debenture
instrument, or for any claim based thereon, or otherwise, against any
incorporator, shareholder, officer, director or attorney, past, present or
future, of the Corporation, whether by virtue of any constitution, statute, rule
of law, enforcement of any assessment, or penalty, or by reason of any matter
prior to the delivery of this debenture instrument, or otherwise, all such
liability by the acceptance hereof and as a part of the consideration of the
issuance hereof, being expressly waived.

     7. Subordination. This income debenture and all other debentures of this
series, whether now or hereafter issued, are in all respects secondary and
subordinate to present or future mortgage bonds, sinking fund bonds, or notes of
the Corporation payable to commercial banks, savings banks, insurance companies
or other lenders. All holders of this debenture instrument accept, and hold the
same subject to the superior rights and claims of the present or future mortgage
bonds, sinking fund bonds, or notes payable to such lenders. No interest,
principal or premium shall be payable on any debenture until all matured
interest and principal obligations due on any sinking fund bonds of mortgage
bonds and all other credit obligations owing to lenders have been paid or
otherwise provided for. All matured claims of the subordinated debenture holders
against the Corporation's holdings or assets shall be, and are hereby made,
superior to those of stockholders, and the Corporation agrees that, in the event
of the complete or partial dissolution or liquidation of the Corporation, the
holder of this subordinated debenture shall be entitled to be paid in full,
including all


                                       2


<PAGE>


principal and accrued interest, before any assets of the Corporation are
distributed to any stockholder, whether common or preferred.

     8. Default. In the case of any default of any of the provisions herein
contained, the Corporation shall be given thirty (30} days written notice before
any legal action may be taken by the owner or holder hereof, or before the
subordinated debenture may be placed in the hands of an attorney for collection.
At the option of the holder, failure of the Corporation to pay any installment
of interest due and payable under the terms hereof, within thirty (30) days
after written demand therefor has been made in the manner designated in the
first sentence of this paragraph, shall mature the principal sum of this
debenture and the same shall forthwith become due and payable.

     9. Call. This debenture is callable by the holder under paragraph five (5)
of the Loan Agreement.

     IN WITNESS WHEREOF, the Corporation has executed and sealed this debenture
instrument as of November ___, 1988.

                                             IFS INTERNATIONAL, INC.

         (seal)

                                             by
                                               ---------------------------------
                                                  Steven H. Puthuff, Chairman


Attest:


- -----------------------------
Charles J. Caserta, Secretary


                                       3


<PAGE>


THE SECURITIES EVIDENCED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT
WITH A VIEW TO THE DISTRIBUTION THEREOF, AND SUCH SECURITIES MAY NOT BE SOLD OR
TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT OR REGULATION A
NOTIFICATION UNDER SUCH ACT COVERING SUCH SECURITIES OR THE COMPANY RECEIVES AN
OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) REASONABLY ACCEPTABLE
TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

                                   Warrant to Purchase 48,188 Shares 
                                   of Preferred A Stock (subject to 
                                   adjustment)

                      WARRANT TO PURCHASE PREFERRED A STOCK
                                       of
                             IFS INTERNATIONAL, INC.
                        Void after _______________, 1994

     This certifies that for value received pursuant to the terms of that
certain Loan Agreement entered into between the parties contemporaneously
herewith, North Greenbush Industrial Development Agency or its registered assign
(the "Holder") is entitled, subject to the terms set forth below, at any time
before 5:00 p.m., New York time on or before the earlier of ___________________,
1994 to purchase from IFS International, Inc. a New York corporation (the
"Company"), 48,188 shares of Preferred A Stock, $0.0001 par value (the "Stock")
of the Company as constituted on the date hereunder (the "Issue Date") upon
surrender hereof at the principal office of the Company referred to below, with
the subscription form attached hereto duly executed, and simultaneous payment
therefor in lawful money of the United States, or otherwise as hereinafter
provided, at the price of $2.05 per share (the "Purchase Price"). The Purchase
Price number and character of such shares of Stock are subject to adjustment as
provided below, and the term Stock shall mean, unless the context otherwise
requires, the stock and other securities and property at the time receivable
upon the exercise of this Warrant. The term "Warrant" as used herein shall
include this Warrant and any warrant delivered in substitution or exchange
thereof as provided herein.

     1. Exercise. This Warrant may be exercised at any time or from time to
time, on any business day, for up to the full number of shares of Stock called
for hereby, by surrendering it at the principal office of the Company, 125
Jordan Road, Troy, New York 12180 with the subscription form duly executed,
together with payment in cash or by certified or official bank check, payable to
the order of the Company, of the Stock called for on the face

                                       1

                                    Exhibit B


<PAGE>


of this Warrant (without giving effect to any adjustment herein) by multiplying
(i) the number of shares of Stock called for on the face of this Warrant
(without giving effect to any adjustment herein by (ii) the appropriate Purchase
Price (without giving effect to any adjustment herein).

     2. If there shall be any change in the stated capital of the Company, the
shares covered by this Warrant and the purchase price payable therefor shall in
each instance be adjusted as follows:

          (a) If a share dividend is declared on the Preferred A shares of the
     Company, there shall be added to the shares under this Warrant the number
     of shares which would have been issuable to the holder had he/she been the
     holder of record of the number of shares under this Warrant but not
     theretofore purchased and issued. Such additional shares resulting from
     such share dividend shall be delivered proportionately, from time to time,
     without additional cost, upon the exercise of this Warrant. Any
     distribution to the holders of the Preferred A shares of the Company, other
     than a distribution of cash as a dividend out of surplus or net profits or
     a distribution by way of the granting of rights to subscribe, shall be
     treated as a share dividend.

          (b) If an increase has been effected in the number of outstanding
     shares by reason of subdivision of such Preferred A shares, the number of
     shares which may thereafter be purchased under this Warrant shall be the
     number of shares which would have been received by the Company on such
     subdivision had the holder been the holder of record of the number of
     shares then under this Warrant but not theretofore purchased and issued.

          (c) If there is any capital reorganization or reclassification of the
     stated capital of the Company, or any consolidation or merger of the
     Company with any other corporation or corporations, or the sale or
     distribution of all or substantially all of the Company's property and
     assets, adequate provision shall be made by the Company so that there shall
     remain and be substituted under this Warrant the shares, securities, or
     assets which would have been issuable or payable in respect of or in
     exchange for the Preferred A shares then remaining under this Warrant and
     not theretofore purchased and issued hereunder, as if the holder of this
     Warrant had been the owner of such shares on the applicable record date.
     Any shares so substituted under this option shall be subject to adjustment
     as provided in this paragraph in the same manner and to the same effect as
     the Preferred A shares covered by this Warrant.


                                        2


<PAGE>


          (d) If during the period in which this Warrant is exercisable (but
     prior to any call under paragraph 5 of the Loan Agreement) the Company
     issues or sells shares of Preferred A stock for a consideration per share
     less than $2.05 (or such other price after taking into consideration
     adjustments pursuant to this Section 2), then upon such issue or sale, the
     Purchase Price hereunder shall be reduced to an amount equal to the
     weighted average of such lesser Purchase Prices.

     3. The holder shall have no rights as a shareholder in respect of shares as
to which the Warrant shall not have been exercised and payment made as herein
provided, and shall have no rights with respect to such shares not expressly
conferred by this Agreement.

     4. The Company shall at all times during the term of this Agreement reserve
and keep available such number of its Preferred A shares as will be sufficient
to satisfy the requirements of this Warrant, and shall pay all original issue
taxes on the exercise of this Warrant and all other fees and expenses
necessarily incurred by the Company in connection therewith.

     5. This Warrant shall not be encumbered or disposed of in whole or in part
except as approved by the Company in writing. All shares purchased pursuant to
this Agreement shall be purchased for investment.

     6. This Agreement shall be binding upon any successor of the Company.

     7. This Warrant is delivered in New York and shall be construed and
enforced in accordance with and governed by the laws of such State.


     IN WITNESS WHEREOF the parties have signed this Agreement.

DATED: _________________, 1988

         HOLDER                                            COMPANY

North Greenbush Industrial                          IFS INTERNATIONAL, INC.
   Development Agency

by:                                                 by:
   -----------------------                             -------------------------


                                       3


<PAGE>


                                SUBSCRIPTION FORM

                (to be executed only upon exercise of Warrant).

     The undersigned registered owner irrevocably exercises this Warrant and
purchases __________ of the number of shares of Preferred A Stock of IFS
International, Inc. purchasable with this Warrant, and herewith makes payment
therefore, all at the price and on the terms and conditions specified in this
Warrant.

DATE: ______________________, 19__

                                        NORTH GREENBUSH INDUSTRIAL
                                        DEVELOPMENT AGENCY

                                        by
                                          --------------------------------------
                                        (Signature of Registered Owner)


                                        ----------------------------------------
                                        (Street Address)


                                        ----------------------------------------
                                        (City)          (State)           (Zip)


                                        4


<PAGE>


                                    Exhibit C

                        Schedule of Positions/Functions

I.   Key Positions to Remain in North Greenbush

     -    President

     -    Vice President of Product Planning

     -    Vice President of Sales

     -    Chief Executive Officer

     -    Chairman of the Board

     -    National Account Manager

     -    Vice President of Marketing

     -    Controller

     -    Executive Assistant

     -    Accountant

     -    Manager of Support

     -    Administrative Assistant

     -    Systems Specialist {2)

II.  Key Functions to Remain in North Greenbush

     -    Corporate Product Planning

     -    Design, manufacture and distribution of cards for end user financial
          service transactions

     -    Marketing and support of end user financial service transactions

     -    Training support and development for financial service transactions

     -    Sales Management - National and Northeast Region of the U.S.

     -    Product support and consumer service - National and Northeast Region
          of the U.S.

     -    Corporate headquarters and various administrative elements of
          headquarters operations


<PAGE>


                                             July 30, 1992

IFS International. Inc.
Rensselaer Technology Park
185 Jordan Road
Troy, NY 12180

ATTN: Frank Pascuito. Chairman

                                             Subject: Town of North Greenbush
                                                      Venture Capital Investment

Dear Frank:

     I am collecting  information needed for the Annual  Performance  Assessment
Report  which must be  submitted  by the Town of North  Greenbush to HUD for the
subject project. The enclosed Employment History details the information we have
regarding  employment  at IFS  since the North  Greenbush  investment  was made.
Please  review  this  list  and make  any  corrections  needed  to  update  that
information.  We are especially  interested in any employees not included on the
list. An Employee Questionnaire should be provided for those individuals. If any
of the  people  on this  list are no longer  employed  at IFS (for any  reason),
please note the date they were terminated in the appropriate column.

     I understand  that the  interest-only  payments  which were due December 1,
1991 and June 1, 1992 have not been made. You have indicated that you hope to be
able  to  begin  making   payments  this  December   (based  on  current  income
projections).  Those plans will be detailed in our report to HUD. That change is
also  reflected in the revised  Amortization  Schedule  which is  enclosed.  The
missed  payments have been  eliminated and interest  accruals have been extended
through  December  l, 1992 when  interest-only  payments  will  begin.  The Loan
Balance  increases  by the  amount  of those  accruals;  and  full  amortization
(principal & interest)  is still  scheduled  to begin  December 1, 1993.  Please
advise if you see any problem with this revision.

     Thank you for your timely  reply to help us get the  Performance  Assesment
Report to HUD on schedule.


                                             Sincerely,
                                             AVALON ASSOCIATES, INC.

                                             /s/ Philip A. Smith
                                             Philip A. Smith
                                             President


pc: James Flanigan, Town Councilman


<PAGE>


                          LOAN MODIFICATION AGREEMENT

     Loan  Modification  Agreement  (this  "Agreement"),  made  this 21st day of
April,  1995 by and between NORTH GREENBUSH  INDUSTRIAL  DEVELOPMENT  AGENCY,  a
municipal  corporation organized and existing under the laws of the State of New
York,  with  an  address  for  the  transaction  of  business  at  P.O.  Box 39,
Wynanskill,  New  York  ("Lender")  and  IFS  INTERNATIONAL,  INC.,  a New  York
corporation,  with offices for the  transaction  of business at 185 Jordan Road,
Troy, New York ("Borrower").

                                   RECITALS:

     A. The Lender made a loan to the Borrower in the original  principal amount
of $225,000  (the  "Loan"),  such Loan  having  been made  pursuant to a written
agreement entitled "Loan Agreement" dated January 11, 1989.

     B.  Pursuant  to the  Loan  Agreement,  Borrower  issued  its  subordinated
debenture,  and certain other  instruments  were  executed at the closing.  Such
documents,  together with the First  Amendment  (defined  below),  are hereafter
collectively called the "Loan Documents."

     C. The terms and conditions of the Loan were previously  modified by mutual
agreement  of the  parties,  as  evidenced  by a letter dated July 30, 1992 (the
"First  Amendment"),  issued by Avalon Associates,  Inc. (the Lender's agent) to
the Borrower.

     D. The parties  desire to further modify and amend the terms and conditions
of the Loan and Loan Documents, all as more particularly set forth herein.

     NOW, THEREFORE, the parties agree as follows:

     1. Balance Due. The parties  mutually agree that, as of April 22, 1995, the
balance due under the Loan is Three Hundred  Fifty-Four  Thousand  Three Hundred
Thirty-Nine  and 37/100  Dollars  ($354,339.37),  including  accrued  and unpaid
interest.

     2.  Interest  Forgiven.  The Lender  does hereby  agree to forgive,  and by
execution of this Agreement does forgive,  unpaid  interest in the amount of One
Hundred Twenty-Nine Thousand Three Hundred Thirty-Nine and 38/100 ($129,339.38).
The $129,339.38 of interest to be forgiven is comprised of two components, being
$66,138.24 of accrued  interest that was previously  capitalized  into principal
pursuant to the First  Amendment  dated July 30,  1992,  together  with a second
component  consisting  of  $63,201.14  of interest  accrued on the  restructured
principal  balance of $291,138.24,  such interest accruing between June 1, 1992,
and April 22, 1995.


<PAGE>


     3. Terms of Modification.  Upon execution of this Agreement,  IFS shall pay
the sum of Five Thousand Dollars  ($5,000.00) to be applied toward the principal
balance of the Loan.  Upon such payment having been made,  the parties  mutually
agree that the  remaining  principal  balance is the sum of Two  Hundred  Twenty
Thousand Dollars ($220,000).

     4.  Modification  of Terms.  The  Borrower  promises  and agrees to pay the
remaining  balance of $220,000,  together with  interest  thereon at the rate of
Seven and One-Half Percent (7.5 %) per annum, in the following manner:

          a)  Interest  only for a period of twelve (12) months from the date of
     this  Agreement,  with each  monthly  installment  of interest to be in the
     amount of One Thousand Three Hundred Seventy-Five Dollars ($1,375.00).  The
     first payment shall be due on May 22, 1995, and  subsequent  payments shall
     be due on the 22nd day of each and every month thereafter.

          b) Equal monthly  installments of principal and interest over a period
     of six (6) years (72 months),  each such installment to be in the amount of
     Three  Thousand  Eight Hundred Three  Dollars and 82/100  ($3,803.82).  The
     first installment shall be due on May 22, 1996, and subsequent installments
     shall  be due on the 22nd day of each and  every  month  thereafter,  until
     April 22, 2002, when the entire remaining balance shall be due and payable.

     5. Attached hereto and made a part hereof as Exhibit "A" is an amortization
schedule,  reflecting due dates for monthly  payments of principal and interest,
application  of  payments  between  interest  and  principal  and the  remaining
balance,  all of which are hereby  incorporated into this Agreement and into the
Loan Documents.

     6.  Ratification.  Except as  expressly  amended  herein,  all of the other
terms,  covenants,  conditions and agreements of the Loan Documents shall remain
in full force and effect,  and are hereby ratified and confirmed by the parties.
The Borrower  and Lender  agree to be bound by, and to comply  with,  all of the
terms and provisions of the Loan Documents,  as amended by the First  Amendment,
and as further amended by this Agreement.

     7.  Construction  and  Miscellaneous.  This  Agreement  contains the entire
agreement and understanding of the parties concerning  amendment of the existing
Loan  Documents.  This  Agreement  shall  bind and inure to the  benefit  of the
parties, their respective heirs, personal representatives, and legal successors.
If any  parts  of this  Agreement  are  found to be void or  unenforceable,  the
remaining  provisions  shall  nevertheless  be binding  with the same  effect as
though the void parts were deleted. This Agreement shall be governed by the laws
of the State of New York. In construing this Agreement,  feminine pronouns shall
be substituted  for those  masculine in form (and vice versa),  and plural terms
shall be  substituted  for singular and singular for plural,  in any place where
the  context so  requires.  This  Agreement  may only be  changed,  modified  or
rescinded  by  written  instrument  signed by all  parties.  Any  waiver of this
Agreement  shall not be effective  unless made in a writing signed by the person
against whom


                                       -2-


<PAGE>


the enforcement of such waiver is sought.  A waiver given in any case shall only
apply to that  particular  act or  omission,  and shall not be  effective  as to
further acts or omissions,  regardless of whether they be of the same or similar
nature.  This Agreement may be executed in several  counterparts,  each of which
shall  be  considered  a legal  original  for all  purposes.  Any  fully  signed
counterpart may be introduced into evidence in any action or proceeding  without
having to produce or account for the others.

     IN WITNESS WHEREOF, the parties have executed this Agreement.

IFS INTERNATIONAL, INC.                        NORTH GREENBUSH
                                               INDUSTRIAL DEVELOPMENT AGENCY

By: /s/ Charles J. Caserta                     By: /s/ James Flanigan
    -----------------------------                  -----------------------------
        Charles J. Caserta                             James Flanigan,
        President                                      Chairman




STATE OF NEW YORK    )
                     ) SS.:
COUNTY OF RENSSELAER )

     On this 20th day of April,  in the year  1995,  before me  personally  came
James  Flanigan,  to me known,  who, being by me duly sworn,  did depose and say
that he resides in North  Greenbush;  that he is the Chairman of NORTH GREENBUSH
INDUSTRIAL  DEVELOPMENT AGENCY, the corporation  described in and which executed
the within  instrument;  and that he signed his name thereto by authority of the
Board of Directors of said corporation.

                                            /s/ Marilyn J. Houser
                                            ---------------------
                                            Notary Public

                                                MARILYN J. HOUSER
                                        NOTARY PUBLIC, STATE OF NEW YORK
                                         QUALIFIED IN RENSSELAER COUNTY
                                                REG. NO. 4814946
                                            TERM EXPIRES Jan 31, 1997
                         

                                       -3-


<PAGE>


Linda Pye                                                                4/20/95

                            IFS INTERNATIONAL. INC.
                    NORTH GREENBUSH RESTRUCTURING AGREEMENT
                       PAYMENTS DURING FIRST TWELVE MONTHS
                                  INTEREST ONLY

                         DATE                         PAYMENT
                         ----                         -------
                        5/22/95                      1,375.00
                        6/22/95                      1,375.00
                        7/22/95                      1,375.00
                        8/22/95                      1,375.00
                        9/22/95                      1,375.00
                       10/22/95                      1,375.00
                       11/22/95                      1,375.00
                       12/22/95                      1,375.00
                        1/22/96                      1,375.00
                        2/22/96                      1,375.00
                        3/22/96                      1,375.00
                        4/22/96                      1,375.00


                             CALCULATED AS FOLLOWS:
                             ----------------------

                         220,000 * 7.5%=  16,500.00
                         16,500/12=        1,375.00



<PAGE>


- --------------------------------------------------------------------------------
NORTH GREENBUSH                      EXHIBIT "A"                   03-14-1995 Pg
- --------------------------------------------------------------------------------

Compounding period.......: Monthly

Nominal annual rate......: 7.500

Effective annual rate....: 7.763

Periodic rate............: 0.6250

Equivalent daily rate....: 0.02055


CASH FLOW DATA

- --------------------------------------------------------------------------------
  Event         Date         Amount         #          Period        End-date
- --------------------------------------------------------------------------------

1 Loan        04-22-96     220,000.00        1
2 Payment     05-22-96       3,803.82       72         Monthly       04-22-02


  AMORTIZATION SCHEDULE - Normal amortization

Pmt     Date           Payment         Interest      Principal          Balance

Loan   04-22-1996                                                     220,000.00
  1    05-22-1996      3,803.82        1,375.00       2,428.82        217,571.18
  2    06-22-1996      3,803.82        1,359.82       2,444.00        215,127.18
  3    07-22-1996      3,803.82        1,344.54       2,459.28        212,667.90
  4    08-22-1996      3,803.82        1,329.17       2,474.65        210,193.25
  5    09-22-1996      3,803.82        1,313.71       2,490.11        207,703.14
  6    10-22-1996      3,803.82        1,298.14       2,505.68        205,197.46
  7    11-22-1996      3,803.82        1,282.48       2,521.34        202,676.12
  8    12-22-1996      3,803.82        1,266.73       2,537.09        200,139.03
1996   totals         30,430.56       10,569.59      19,860.97      

  9    01-22-1997      3,803.82        1,250.87       2,552.95        197,586.08
 10    02-22-1997      3,803.82        1,234.91       2,568.91        195,017.17
 11    03-22-1997      3,803.82        1,218.86       2,584.96        192,432.21
 12    04-22-1997      3,803.82        1,202.70       2,601.12        189,831.09
 13    05-22-1997      3,803.82        1,186.44       2,617.38        187,213.71
 14    06-22-1997      3,803.82        1,170.09       2,633.73        184,579.98
 15    07-22-1997      3,803.82        1,153.62       2,650.20        181,929.78
 16    08-22-1997      3,803.82        1,137.06       2,666.76        179,263.02
 17    09-22-1997      3,803.82        1,120.39       2,683.43        176,579.59
 18    10-22-1997      3,803.82        1,103.62       2,700.20        173,879.39
 19    11-22-1997      3,803.82        1,086.75       2,717.07        171,162.32
 20    12-22-1997      3,803.82        1,069.76       2,734.06        168,428.26
1997   totals         45,645.84       13,935.07      31,710.77      

 21    01-22-1998      3,803.82        1,052.68       2,751.14        165,677.12
 22    02-22-1998      3,803.82        1,035.48       2,768.34        162,908.78
 23    03-22-1998      3,803.82        1,018.18       2,785.64        160,123.14
 24    04-22-1998      3,803.82        1,000.77       2,803.05        157,320.09
 25    05-22-1998      3,803.82          983.25       2,820.57        154,499.52
 26    06-22-1998      3,803.82          965.62       2,838.20        151,661.32
 27    07-22-1998      3,803.82          947.88       2,855.94        148,805.38
 28    08-22-1998      3,803.82          930.03       2,873.79        145,931.59
 29    09-22-1998      3,803.82          912.07       2,891.75        143,039.84
                                                                  


<PAGE>


- --------------------------------------------------------------------------------
NORTH GREENBUSH                                                   03-14-1995 Pg
- --------------------------------------------------------------------------------

Pmt     Date           Payment         Interest      Principal          Balance

 30     10-22-1998     3,803.82          894.00       2,909.82        140,130.02
 31     11-22-1998     3,803.82          875.81       2,928.01        137,202.01
 32     12-22-1998     3,803.82          857.51       2,946.31        134,255.70
1998    totals        45,645.84       11,473.28      34,172.56

 33     01-22-1999     3,803.82          839.10       2,964.72        131,290.98
 34     02-22-1999     3,803.82          820.57       2,983.25        128,307.73
 35     03-22-1999     3,803.82          801.92       3,001.90        125,305.83
 36     04-22-1999     3,803.82          783.16       3,020.66        122,285.17
 37     05-22-1999     3,803.82          764.28       3,039.54        119,245.63
 38     06-22-1999     3,803.82          745.29       3,058.53        116,187.10
 39     07-22-1999     3,803.82          726.17       3,077.65        113,109.45
 40     08-22-1999     3,803.82          706.93       3,096.89        110,012.56
 41     09-22-1999     3,803.82          687.58       3,116.24        106,896.32
 42     10-22-1999     3,803.82          668.10       3,135.72        103,760.60
 43     11-22-1999     3,803.82          648.50       3,155.32        100,605.28
 44     12-22-1999     3,803.82          628.78       3,175.04         97,430.24
1999    totals        45,645.84        8,820.38      36,825.46

 45     01-22-2000     3,803.82          608.94       3,194.88         94,235.36
 46     02-22-2000     3,803.82          588.97       3,214.85         91,020.51
 47     03-22-2000     3,803.82          568.88       3,234.94         87,785.57
 48     04-22-2000     3,803.82          548.66       3,255.16         84,530.41
 49     05-22-2000     3,803.82          528.32       3,275.50         81,254.91
 50     06-22-2000     3,803.82          507.84       3,295.98         77,958.93
 51     07-22-2000     3,803.82          487.24       3,316.58         74,642.35
 52     08-22-2000     3,803.82          466.51       3,337.31         71,305.04
 53     09-22-2000     3,803.82          445.66       3,358.16         67,946.88
 54     10-22-2000     3,803.82          424.67       3,379.15         64,567.73
 55     11-22-2000     3,803.82          403.55       3,400.27         61,167.46
 56     12-22-2000     3,803.82          382.30       3,421.52         57,745.94
2000    totals        45,645.84        5,961.54      39,684.30

 57     01-22-2001     3,803.82          360.91       3,442.91         54,303.03
 58     02-22-2001     3,803.82          339.39       3,464.43         50,838.60
 59     03-22-2001     3,803.82          317.74       3,486.08         47,352.52
 60     04-22-2001     3,803.82          295.95       3,507.87         43,844.65
 61     05-22-2001     3,803.82          274.03       3,529.79         40,314.86
 62     06-22-2001     3,803.82          251.97       3,551.85         36,763.01
 63     07-22-2001     3,803.82          229.77       3,574.05         33,188.96
 64     08-22-2001     3,803.82          207.43       3,596.39         29,592.57
 65     09-22-2001     3,803.82          184.95       3,618.87         25,973.70
 66     10-22-2001     3,803.82          162.34       3,641.48         22,332.22
 67     11-22-2001     3,803.82          139.58       3,664.24         18,667.98
 68     12-22-2001     3,803.82          116.67       3,687.15         14,980.83
2001    totals        45,645.84        2,880.73      42,765.11

 69     01-22-2002     3,803.82           93.63       3,710.19         11,270.64
 70     02-22-2002     3,803.82           70.44       3,733.38          7,537.26



<PAGE>


- --------------------------------------------------------------------------------
NORTH GREENBUSH                                                  03-14-1995 Pg 3
- --------------------------------------------------------------------------------

Pmt     Date           Payment         Interest      Principal          Balance
 71 03-22-2002         3,803.82           47.11       3,756.71          3,780.55
 72 04-22-2002         3,803.82           23.27       3,780.55              0.00
2002 totals           15,215.28          234.45      14,980.83

Grand total          273,875.04       53,875.04     220,000.00

Last interest amount decreased $0.36 due to rounding.



<PAGE>

                             IFS INTERNATIONAL, INC.

                             1996 Stock Option Plan



         1. Purpose of the Plan. The IFS International, Inc. 1996 Stock Option
Plan (the "Plan") is intended to advance the interests of IFS International,
Inc., a Delaware corporation (the "Company"), by inducing persons of outstanding
ability and potential to join and remain with the Company, by encouraging and
enabling employees to acquire proprietary interests in the Company, and by
providing the participating employees with an additional incentive to promote
the success of the Company. This is accomplished by providing for the granting
of "Options" (which term as used herein includes both "Incentive Stock Options"
and "Nonstatutory Stock Options" as later defined) to qualified employees and
nonemployee Directors and consultants.

         2. Administration. The Plan shall be administered by the Board of
Directors of the Company (the "Board of Directors") or by a committee (the
"Committee") consisting of at least two persons chosen by the Board of
Directors. Except as herein specifically provided, the interpretation and
construction by the Board of Directors or the Committee of any provision of the
Plan or of any Option granted under it shall be final and conclusive. The
receipt of Options by Directors, or any members of the Committee, shall not
preclude their vote on any matters in connection with the administration or
interpretation of the Plan, except as otherwise provided by law.

         3. Shares Subject to the Plan. The capital stock subject to grant under
the Plan shall be shares of the Company's common stock, $.001 par value (the
"Common Stock"), whether authorized but unissued or held in the Company's
treasury or shares purchased from stockholders expressly for use under the Plan.
The maximum number of shares of Common Stock which may be issued pursuant to
Options granted under the Plan shall not exceed 300,000 shares, subject to
adjustment in accordance with the provisions of Section 12 hereof. The Company
shall at all times while the Plan is in force reserve such number of shares of
Common Stock as will be sufficient to satisfy the requirements of all
outstanding Options granted under the Plan. In the event any Option granted
under the Plan shall expire or terminate for any reason without having been
exercised in full or shall cease for any reason to be exercisable in whole or in
part, the unpurchased shares subject thereto shall again be available for
Options under the Plan.

         4. Participation. The class of persons which shall be eligible to
receive Options under the Plan shall be (i) with respect to Incentive Stock
Options described in Section 6 hereof, all key employees (including officers) of
either the Company or any subsidiary corporation of the Company, and (ii) with
respect to Nonstatutory Stock Options described in Section 7 hereof, any key
employee (including any officer) of, any nonemployee Director of, or any
nonemployee consultant to, either the Company or any subsidiary corporation of
the Company. The Board of Directors or the Committee, in its sole discretion,
but subject to the provisions of the Plan, shall determine the employees and
nonemployee Directors of and nonemployee consultants to the Company or any
subsidiary corporation of the Company to whom Options shall be granted and the
number of shares, and the vesting thereof, to be covered by each Option taking
into account the nature of the employment or services rendered by the
individuals being considered, their annual compensation, their present and
potential contributions to the success of the Company and such other factors as
the Board of Directors or the Committee may deem relevant.


<PAGE>



         5. Stock Option Agreement. Each Option granted under the Plan shall be
authorized by the Board of Directors or the Committee and shall be evidenced by
a Stock Option Agreement which shall be executed by the Company and by the
person to whom such Option is granted. The Stock Option Agreement shall specify
the number of shares of Common Stock as to which any Option is granted, the
period during which the Option is exercisable and the option price per share
thereof.

         6. Incentive Stock Options. The Board of Directors or the Committee may
grant Options under the Plan which are intended to meet the requirements of
Section 422 of the Internal Revenue Code of 1986, as amended, (the "Code") (such
an Option referred to herein as an "Incentive Stock Option"), and which are
subject to the following terms and conditions and any other terms and conditions
as may at any time be required by Section 422 of the Code:

                  (a) No Incentive Stock Option shall be granted to individuals
         other than key employees of the Company or of a subsidiary corporation
         of the Company.

                  (b) Each Incentive Stock Option under the Plan must be granted
         prior to December 26, 2006, which is within ten years from the date
         the Plan was adopted by the Board of Directors.

                  (c) The option price of the shares subject to any Incentive
         Stock Option shall not be less than the fair market value of the Common
         Stock at the time such Incentive Stock Option is granted; provided,
         however, if an Incentive Stock Option is granted to an individual who
         owns, at the time the Incentive Stock Option is granted, more than ten
         percent (10%) of the total combined voting power of all classes of
         stock of the Company or of a subsidiary corporation of the Company, the
         option price of the shares subject to the Incentive Stock Option shall
         be at least one hundred ten percent (110%) of the fair market value of
         the Common Stock at the time the Incentive Stock Option is granted.

                  (d) No Incentive Stock Option granted under the Plan shall be
         exercisable after the expiration of ten (10) years from the date of its
         grant. However, if an Incentive Stock Option is granted to an
         individual who owns, at the time the Incentive Stock Option is granted,
         more than ten percent (10%) of the total combined voting power of all
         classes of stock of the Company or of a subsidiary corporation of the
         Company, such Incentive Stock Option shall not be exercisable after the
         expiration of five years from the date of its grant. Every Incentive
         Stock Option granted under the Plan shall be subject to earlier
         termination as expressly provided in Sections 10 and 15(c) hereof.

                  (e) For purposes of determining stock ownership under this
         Section 6, the attribution rules of Section 425(d) of the Code shall
         apply.

                  (f) For purposes of the Plan, fair market value shall be
         determined by the Board of Directors or the Committee and, unless
         another reasonable method for determining fair market value is
         specified by the Committee, the closing sale price of a share of Common
         Stock as reported on The Nasdaq Stock Market for the trading date next
         preceding the date in question.

         7. Nonstatutory Stock Options. The Board of Directors or the Committee
may grant Options under the Plan which are not intended to meet the requirements
of Section 422 of the Code, as well as Options which are intended to meet the
requirements of Section 422 of the Code, but the terms of which provide that
they will not be treated as Incentive Stock Options (referred to herein as a
"Nonstatutory Stock Option"). Nonstatutory Stock Options which are not intended
to meet these requirements shall be subject to the following terms and
conditions:


                                        2

<PAGE>



         (a) A Nonstatutory Stock Option may be granted to any person eligible
         to receive an Option under the Plan pursuant to Section 4(ii) hereof.

         (b) The option price of the shares subject to a Nonstatutory Stock
         Option shall be determined by the Board of Directors or the Committee,
         in its absolute discretion, at the time of the grant of the
         Nonstatutory Stock Option.

         (c) A Nonstatutory Stock Option granted under the Plan may be of such
         duration as shall be determined by the Board of Directors or the
         Committee (not to exceed 10 years), and shall be subject to earlier
         termination as expressly provided in Sections 10 and 15(c) hereof.

         8. Rights of Option Holders. The holder of any Option granted under the
Plan shall have none of the rights of a stockholder with respect to the shares
covered by his Option until such shares shall be issued to him upon the exercise
of his Option.

         9. Transferability. No Option granted under the Plan shall be
transferable by the individual to whom it was granted otherwise than by will or
the laws of descent and distribution, and, during the lifetime of such
individual, shall not be exercisable by any other person, but only by him.

         10. Termination of Employment or Death.

         (a) If the employment of an employee of, or the services of either a
         nonemployee Director of or a nonemployee consultant to, the Company or
         a subsidiary corporation of the Company shall be terminated voluntarily
         by the employee, the nonemployee Director or the nonemployee consultant
         or for cause, then his Option shall expire forthwith. Except as
         provided in subsections (b) and (c) of this Section 10, if such
         employment or services shall terminate for any other reason, then such
         Option may be exercised at any time within three months after such
         termination, subject to the provisions of subparagraph (d) of this
         Section 10. Notwithstanding the foregoing, the Board of Directors may
         extend the period of time for exercise pursuant to this paragraph,
         provided that such extension does not cause any Incentive Stock Options
         to be disqualified as such. For purposes of the Plan, the retirement of
         an individual either pursuant to a pension or retirement plan adopted
         by the Company or at the normal retirement date prescribed from time to
         time by the Company shall be deemed to be termination of such
         individual's employment other than voluntarily or for cause. For
         purposes of this subparagraph, an employee who leaves the employ of the
         Company to become an employee of (i) a subsidiary corporation of the
         Company or (ii) a corporation (or its parent or subsidiary) that has
         assumed the Option of the Company as a result of a corporate
         reorganization, etc., shall not be considered to have terminated his
         employment.

         (b) If the holder of an Option under the Plan dies (i) while employed
         by, or while serving as either a nonemployee Director of or a
         nonemployee consultant to, the Company or a subsidiary corporation of
         the Company, or (ii) within three months after the termination of his
         employment or his services other than voluntarily or for cause, then
         such Option may, subject to the provisions of subparagraph (d) of this
         Section 10, be exercised by the estate of the employee, the nonemployee
         Director or the nonemployee consultant or by a person who acquired the
         right to exercise such Option by bequest or inheritance or by reason of
         the death of such employee, nonemployee Director or nonemployee
         consultant at any time within one year after such death.

         (c) If the holder of an Option under the Plan ceases employment because
         of permanent and total disability (within the meaning of Section
         22(e)(3) of the Code) while employed by, or while serving as a
         nonemployee Director of or a nonemployee consultant to, the Company or
         a subsidiary corporation of the Company, then such Option may, subject
         to the provisions

                                        3

<PAGE>



         of subparagraph (d) of this Section 10, be exercised at any time within
         one year after his termination of employment or termination of services
         due to the disability.

         (d) An Option may not be exercised pursuant to this Section 10 except
         to the extent that the holder was entitled to exercise the Option at
         the time of termination of employment, termination of services, or
         death, and in any event may not be exercised after the expiration of
         the Option.

         (e) For purposes of this Section 10, the employment relationship of an
         employee of the Company or of a subsidiary corporation of the Company
         will be treated as continuing intact while he is on military or sick
         leave or other bona fide leave of absence (such as temporary employment
         by the Government) if such leave does not exceed ninety days, or, if
         longer, so long as his right to reemployment is guaranteed either by
         statute or by contract.

         11.      Exercise of Options.

         (a) Unless otherwise provided in the Stock Option Agreement, any Option
         granted under the Plan shall be exercisable in whole at any time, or in
         part from time to time, prior to expiration. The Board of Directors or
         the Committee, in its absolute discretion, may provide in any Stock
         Option Agreement that the exercise of any Option granted under the Plan
         shall be subject (i) to such condition or conditions as it may impose,
         including, but not limited to, a condition that the holder thereof
         remain in the employ or service of the Company or a subsidiary
         corporation of the Company for such period or periods of time from the
         date of grant of the Option, as the Board of Directors or the
         Committee, in its absolute discretion, shall determine; and (ii) to
         such limitations as it may impose, including, but not limited to, a
         limitation that the aggregate fair market value of the Common Stock
         with respect to which Incentive Stock Options are exercisable for the
         first time by any employee during any calendar year (under all plans of
         the Company and its parent and subsidiary corporations) shall not
         exceed One Hundred Thousand Dollars ($100,000). In addition, in the
         event that under any Stock Option Agreement the aggregate fair market
         value of the Common Stock with respect to which Incentive Stock Options
         are exercisable for the first time by any employee during any calendar
         year (under all plans of the Company and its parent and subsidiary
         corporations) exceeds One Hundred Thousand Dollars ($100,000), the
         Board of Directors or the Committee may, when shares are transferred
         upon exercise of such Options, designate those shares which shall be
         treated as transferred upon exercise of an Incentive Stock Option and
         those shares which shall be treated as transferred upon exercise of a
         Nonstatutory Stock Option.

         (b) An Option granted under the Plan shall be exercised by the delivery
         by the holder thereof to the Company at its principal office (attention
         of the Secretary) of written notice of the number of shares with
         respect to which the Option is being exercised. Such notice shall be
         accompanied by payment of the full option price of such shares, and
         payment of such option price shall be made by the holder's delivery of
         his check payable to the order of the Company; provided, however, that
         notwithstanding the foregoing provisions of this Section 11 or any
         other terms, provisions or conditions of the Plan, at the written
         request of the optionee and upon approval by the Board of Directors or
         the Committee, shares acquired pursuant to the exercise of any Option
         may be paid for in full at the time of exercise by (i) the surrender of
         shares of Common Stock of the Company held by or for the account of the
         optionee at the time of exercise to the extent permitted by subsection
         (c)(5) of Section 422 of the Code and, with respect to any person who
         is subject to the reporting requirements of Section 16(a) of the
         Securities Exchange Act of 1934 (the "Act"), to the extent permitted by
         Section 16(b) of that Act and the Rules of the Securities and Exchange
         Commission, without liability to the Company; (ii) subject to the
         approval of the Board of Directors, the issuance

                                        4

<PAGE>



         of a promissory note in compliance with law for a portion of the
         purchase price; or (iii) such other methods approved by the Board of
         Directors, in compliance with law and provided that such methods do not
         disqualify Incentive Stock Options from being treated as such and
         comply with the provisions of Section 16(b) of the Act. In the case of
         (i) above, the fair market value of the surrendered shares shall be
         determined by the Board of Directors or the Committee as of the date of
         exercise in the same manner as such value is determined upon the grant
         of an Incentive Stock Option.

         12.      Adjustment Upon Change in Capitalization.

         (a) In the event that the outstanding Common Stock is hereafter changed
         by reason of reorganization, merger, consolidation, recapitalization,
         reclassification, stock split-up, combination of shares, stock
         dividends or the like, an appropriate adjustment shall be made by the
         Board of Directors or the Committee in the aggregate number of shares
         available under the Plan and in the number of shares and option price
         per share subject to outstanding Options. Any adjustment in the number
         of shares shall apply proportionately to only the unexercised portion
         of the Option granted hereunder. If fractions of a share would result
         from any such adjustment, the adjustment shall be revised to the next
         lower whole number of shares.

         (b) If the Company shall be reorganized, consolidated or merged with
         another corporation, or if all or substantially all of the assets of
         the Company shall be sold or exchanged, the holder of an Option shall
         be entitled to receive upon the exercise of his Option (the timing of
         which, as set forth in Section 11, is in the discretion of the Board of
         Directors or the Committee) the same number and kind of shares of stock
         or the same amount of property, cash or securities as he would have
         been entitled to receive upon the happening of any such corporate event
         as if he had been, immediately prior to such event, the holder of the
         number of shares covered by his Option; provided, however, that in such
         event the Board of Directors or the Committee shall have the
         discretionary power to take any action necessary or appropriate to
         prevent any Incentive Stock Option granted hereunder from being
         disqualified as an "incentive stock option" under the then existing
         provisions of the Code or any law amendatory thereof or supplemental
         thereto.

         13.      Further Conditions of Exercise.

         (a) Unless prior to the exercise of the Option the shares issuable upon
         such exercise have been registered with the Securities and Exchange
         Commission pursuant to the Securities Act of 1933, as amended, the
         notice of exercise shall be accompanied by a representation or
         agreement of the individual exercising the Option to the Company to the
         effect that such shares are being acquired for investment and not with
         a view to the resale or distribution thereof or such other
         documentation as may be required by the Company unless in the opinion
         of counsel to the Company such representation, agreement or
         documentation is not necessary to comply with such Act.

         (b) The Company shall not be obligated to deliver any Common Stock
         until it has been listed on each securities exchange on which the
         Common Stock may then be listed or until there has been qualification
         under or compliance with such state or federal laws, rules or
         regulations as the Company may deem applicable. The Company shall use
         reasonable efforts to obtain such listing, qualifications and
         compliance.

         14. Effectiveness of the Plan. The Plan was originally adopted as of
the Board of Directors on December 26, 1996. The Plan shall be subject to
approval by the affirmative vote of a majority of the outstanding shares of
capital stock of the Company present in person or by proxy at a meeting of
stockholders

                                        5

<PAGE>



of the Company convened for such purposes, or by written consent, prior to
December 26, 1997, which is within one year of adoption of the Plan by the Board
of Directors. In the event such stockholder approval is withheld or otherwise
not received on or before the latter date, the Plan and all Options which may
have been granted thereunder shall become null and void.

         15.      Termination, Modification and Amendment.

         (a) The Plan (but not Options previously granted under the Plan) shall
         terminate on December 25, 2006, which is within ten years of the date
         of its adoption by the Board of Directors, or sooner as hereinafter
         provided, and no Option shall be granted after the termination of the
         Plan.

         (b) The Plan may from time to time be terminated, modified or amended
         by the affirmative vote of the holders of a majority of the outstanding
         shares of capital stock of the Company present in person or by proxy at
         a meeting of stockholders of the Company convened for such purpose.

         (c) The Board of Directors may at any time, on or before the
         termination date referred to in Section 15(a) hereof, terminate the
         Plan, or from time to time make such modifications or amendments to the
         Plan as it may deem advisable; provided, however, that the Board of
         Directors shall not, without approval by the affirmative vote of the
         holders of a majority of the outstanding shares of capital stock of the
         Company present in person or by proxy at a meeting of stockholders of
         the Company convened for such purpose, increase (except as provided by
         Section 12 hereof) the maximum number of shares as to which Incentive
         Stock Options may be granted, or change the designation of the
         employees or class of employees eligible to receive Options or make any
         other change which would prevent any Incentive Stock Option granted
         hereunder which is intended to be an "incentive stock option" from
         disqualifying as such under the then existing provisions of the Code or
         any law amendatory thereof or supplemental thereto.

         (d) No termination, modification or amendment of the Plan may, without
         the consent of the individual to whom an Option shall have been
         previously granted, adversely affect the rights conferred by such
         Option.

         16. Not a Contract of Employment. Nothing contained in the Plan or in
any Stock Option Agreement executed pursuant hereto shall be deemed to confer
upon any individual to whom an Option is or may be granted hereunder any right
to remain in the employ or service of the Company or a subsidiary corporation of
the Company.

         17. Use of Proceeds. The proceeds from the sale of shares pursuant to
Options granted under the Plan shall constitute general funds of the Company.

         18. Indemnification of Board of Directors or Committee. In addition to
such other rights of indemnification as they may have, the members of the Board
of Directors or the Committee, as the case may be, shall be indemnified by the
Company to the fullest extent permitted under applicable law against all costs
and expenses reasonably incurred by them in connection with any action, suit or
proceeding to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any rights
granted thereunder and against all amounts paid by them in settlement thereof or
paid by them in satisfaction of a judgment of any such action, suit or
proceeding, except a judgment based upon a finding of bad faith. Upon the
institution of any such action, suit or proceeding, the member or members of the
Board of Directors or the Committee, as the case may be, shall notify the
Company in writing, giving the Company an opportunity at its own cost to defend
the same before such member or members undertake to defend the same on their own
behalf.

                                        6

<PAGE>


         19. Definitions. For purposes of the Plan, the terms "parent
corporation" and "subsidiary corporation" shall have the same meanings as set
forth in Sections 425(e) and 425(f) of the Code, respectively, and the masculine
shall include the feminine and the neuter as the context requires.

         20. Governing Law. The Plan shall be governed by, and all questions
arising hereunder shall be determined in accordance with, the laws of the State
of New York.



                                        7



                       DIGITAL PRIME CONTRACTING AGREEMENT

                             AGREEMENT NUMBER 18320



        THIS Agreement made as of the date of the last signature between


        (1)     IFS International Inc
                Rensselaer Technology Park
                185 Jordan Road
                Troy, New York 12180
                USA

                ("Licensor")

                                       AND


        (2)     Digital Equipment International BV
                St. Tuenismolenweg 15,
                6534 AG Nijmegen,
                The Netherlands.

                ("Digital").


<PAGE>


                                   BACKGROUND

     Digital and all subsidiaries of Digital Equipment Corporation and its
authorised distributors shall be eligible to acquire licenses of Licensor's
computer software programs and services subject to the terms and conditions of
this Agreement.

     NOW THEREFORE, Digital and Licensor agree as follows:

1. DEFINITIONS

For the purposes of this Agreement, the following expressions shall have the
meanings set forth against them:

     1.1     "Licensed Software" means the computer programs in object code form
             described in Appendix 1, Part I. Such software programs shall
             comply with their program specification attached in Appendix 1,
             Part II, or as may be attached in Appendix 1 from time to time.

     1.2     "Documentation" means all materials of whatever nature and form and
             on any medium connected with the Licensed Software and as detailed
             in Appendix 1, Part III.

     1.3     "Computer System" means the Digital computer systems identified and
             described in Appendix 2.

     1.4     "Updates" means all corrections, modifications, upgrades,


<PAGE>


             and new versions of the Licensed Software and the Documentation as
             described in Clause 13.

     1.5     "Enhancements" means all new modules or additions to existing
             modules to the Licensed Software.

     1.6     "Licensed Product" means the Licensed Software, Documentation and
             Updates collectively.

     1.7     "Functional Specification" means the particular specification
             produced for a Digital Customer which includes the Licensed
             Product.

     1.8     "Derivative Work" means any source, object or documentation which
             is developed by or on behalf of Digital to be owned by Licensor,
             unless otherwise agreed and which is based upon the the Licensed
             Product such as tailoring, menus and configuration.

     1.9     "Source" means the Licensed Product provided in human and machine
             readable form, usually designated as source code or source listings
             which would enable Digital to re-create and maintain the same.

     1.10    "Purchase Order" means Digital's standard order of purchase, a
             specimen copy of which is attached in Appendix 3.

     1.11    "Maintenance and Support" means the services described in Clause 13
             whereby Licensor shall ensure that the Licensed Product complies
             with its specification.

     1.12    "Error Category" shall mean the classification ascribed to each
             defect or bug identified within the Licensed Product as set forth
             in Clause 13.3 below.

     1.13    "Response Time" shall mean the time in which a skilled technical
             Licensor employee shall initially respond to Digital in the event
             that an Error Category is reported in the Licensed Product.

     1.14    "Escrow Material" shall mean those materials identified in Appendix
             7, Part I.

     1.15    "Escrow Agent" shall mean the independent third party identified in
             Appendix 7, Part II and who shall take


<PAGE>


             delivery of the Escrow Material, hold and release the same upon the
             terms and conditions of this Agreement.

     1.16    "Escrow Agreement" shall mean the separate agreement which
             Licensor, Digital and the Escrow Agent shall execute which shall
             embody the appropriate escrow terms and conditions of this
             Agreement.

     1.17    "Digital Customer" shall mean the third party company including its
             subsidiary, holding, associated and affiliated companies wherever
             located who has accepted a Digital bid or tender for hardware and
             software and which includes the Licensed Product.

     1.18    "End Result" shall mean the results of the Licensor providing
             consultancy services to Digital or the Digital Customer as detailed
             in Clause 14 and Appendix 6.

     1.19    "Acceptance Criteria" shall mean those acceptance tests agreed in
             writing between Digital and Licensor.

2. LICENCE GRANTS

     2.1     Upon execution of this Agreement, Licensor shall be deemed to have
             granted Digital following licences in respect of the Licensed
             Product:

             (a) a royalty-free, non-exclusive, world-wide licence to make upto
                 5 (five) copies of the Licensed Product for evaluation,
                 demonstration and non-productive use purposes by Digital in
                 relation to any Digital Customer.

             (b) a royalty-free, non-exclusive world-wide licence to make copies
                 of the Licensed Product to be used by Digital personnel for the
                 support of the Digital Customer.

             (c) subject to Digital making the payments as described in Clause 7
                 and Appendix 4, a non-exclusive, world-wide licence to use,
                 market and distribute either directly or through its authorised
                 distributors by means of perpetual sub- licences the Licensed
                 Product to the Digital Customer.


     2.2     Distribution of the Licensed Product to the Digital Customer


<PAGE>


             shall be covered by Digital's then current applicable software
             licence agreements and shall be in accordance with Digital's then
             current software licensing policies. A copy of Digital's end-user
             standard terms and conditions are attached at Appendix 10.


     2.3     Distribution by Digital shall be in any medium appropriate to the
             hardware configuration to be supplied and where applicable may be
             distributed electronically through Digital's or the Digital
             Customers internal network.

     2.4     The rights and licences herein granted shall include the right to
             license all foreign language versions of the Licensed Product, if
             any, developed or acquired by Licensor during the term of this
             Agreement. In addition, Digital shall have the right to translate
             the Licensed Product into foreign languages and to use, market,
             copy, have copied and distribute the same subject to the terms of
             this Agreement, provided that any portion of the Licensed Product
             included in Digital's translation shall be subject to payments as
             provided for herein.

     2.5     No title to or ownership of any Licensed Product or any patents,
             copyrights, trade secrets or other proprietary rights with respect
             to the Licensed Product is transferred to Digital under this
             Agreement.

     2.6     Should modifications to any Licensed Product be required by Digital
             on behalf of any Digital Customer the provisions of Clause 14 and
             Appendix 6 shall apply.

     2.7     Digital shall acquire Licensed Product licences only by issuing its
             Purchase Order which shall include some or all of the following:

             (a) Licensed Product, media and number of copies required.

             (b) Installation location, CPU type and specification for each copy
                 of the Licensed Product ordered.

             (c) Delivery terms and date.

             (d) Fees to be paid by Digital for the Licensed Product


<PAGE>

 
                 licence.

             (e) Fees to be paid by Digital for Update(s), Maintenance and
                 Support.

     2.8     Licensor shall provide the Licensed Product and Update(s),
             Maintenance and Support in accordance the terms of (1) this
             Agreement, (2) written terms (if any) on the face of any Purchase
             Order, and (3) the preprinted terms of the Purchase Order. If a
             conflict arises between the terms of this Agreement and any
             Purchase Orders issued this Agreement shall prevail.

     2.9     Digital is not obligated to issue any Purchase Orders under this
             Agreement. Licensor should not commence activities or providing
             services without first obtaining an approved Purchase Order number
             which shall be transmitted by Digital to Licensor by facsimile,
             hard copy, electronically or over the telephone PROVIDED THAT the
             latter shall be confirmed by Digital, by any of the afore-mentioned
             means.

     2.10    Inspection and Audit
                
     2.10.1  Licensor authorises Digital to perform site inspection and quality
             assurance audits at Licensor's research and development facilities
             during normal business hours PROVIDED THAT Digital shall have first
             informed Licensor of the reasons for undertaking such inspection
             and audit and have given the Licensor not less than 10 (ten) days
             written notice of its intention to inspect and audit.

     2.10.2  As a result of Digital conducting any inspection and audit Digital
             may recommend changes in Licensor's research and development
             facilities and discuss with the Licensor the ways in which the
             Licensor shall take reasonable steps to improve their production
             process.

     2.10.3  Authorisation by Licensor to Digital in no way relieves Licensor
             from the obligation from shipping compliant Licensed Product to
             Digital nor shall it be construed as a waiver by Digital of its
             rights to inspect and accept any Licensed Product shipped by the
             Licensor.

     2.11    Licensor warrants that all of the prices, terms and


<PAGE>


             conditions contained in this Agreement are equal to or better than
             the prices, terms and conditions being offered by Licensor to any
             other similarly situated customer for any similar licensing
             arrangement. If at any time during the term of this Agreement
             Licensor enters into a like licensing arrangement with any other
             similarly situated customer which provides for better prices, terms
             and conditions than contained herein, this Agreement shall be
             deemed to be amended to provide the same such prices, terms and
             conditions to Digital and notice of any such arrangement shall be
             given to Digital immediately.

3. INSTALLATION AND TRAINING

Licensor shall provide Digital with installation and training in accordance with
the terms of Appendices 4 and 5 respectively.

4. ACCEPTANCE

     4.1     The Licensed Product when installed must pass the Acceptance
             Criteria agreed with Digital's Customer. The Acceptance Criteria
             will be agreed between Digital and Licensor prior to any
             installation of the Licensed Product at a Digital Customer site.

     4.2     In the event the Licensed Product fails the Acceptance Criteria
             Licensor shall correct any problems within 30 (thirty) days to
             ensure Licensed Product passes the Acceptance Criteria, at no
             additional charge to Digital or Digital's Customer.


5. WARRANTIES

     5.1     Licensor warrants as follows:

             (a) that the Licensor has the right to enter this Agreement and has
                 sufficient rights in each Licensed Product identified within
                 Appendix 1 (or subsequently added to Appendix 1) to make the
                 grants and commitments made in this Agreement.


<PAGE>


             (b) that any Licensed Product shall, when delivered, be in good
                 working order and shall for the 90 (ninety) day warranty period
                 after acceptance by Digital, conform to its specification
                 detailed in Appendix A and any agreed specifications in the
                 Digital Customer Functional Specification, when used by Digital
                 according to instructions contained in the Documentation. If
                 the Licensed Product fails in any material respect to so
                 conform during that time Licensor shall correct the problem.
                 Clause 13 identifies the obligations that shall apply in
                 respect of Licensed Product defects during the warranty period.
                 All activities on the part of the Licensor shall be at no
                 charge to Digital. Upon the expiry of the 90 (ninety) day
                 warranty period Licensor shall provide Update(s), Maintenance
                 and Support to any Licensed Product in accordance with the
                 terms of this Agreement.

             (c) that no security measures have been incorporated into the
                 Licensed Product which would impair its use and operation
                 excepting such measures that have been disclosed to Digital
                 prior to acceptance.

             (d) that the Licensed Product does not infringe any third party
                 rights and that Digital shall enjoy uninterrupted use,
                 enjoyment and exploitation of this Agreement and Digital
                 Customers uninterrupted use and enjoyment of any Licensed
                 Product so licensed.

             (e) that installation of the Licensed Product shall be contingent
                 upon the parties having previously obtained all required export
                 and import licences and other applicable government approvals.

             (f) that installation of the Licensed Product shall be contingent
                 on the provision of working Digital computer systems and other
                 necessary components within Digital's control being available
                 at the Customer site.


     5.2     No employee, agent or representative of Licensor has the authority
             to bind Licensor to any oral representation or


<PAGE>


             warranty concerning the Licensed Product and installation. Any
             representation or warranty not expressly contained in this
             Agreement or a duly executed Addendum shall not be enforceable by
             Digital.

     5.3     Except as otherwise provided in this Agreement the warranties
             contained in this Clause 5 are limited warranties and are in lieu
             of all other warranties express or implied by law including all
             warranties of merchantability and fitness for a particular purpose
             with respect to the Licensed Product.

6. UPDATES, MAINTENANCE AND SUPPORT

     6.1     At the end of the 90 (ninety) day warranty period described in
             Clause 5.1, Licensor shall provide Update(s), Maintenance and
             Support to any Licensed Products. Clause 14 details the Update(s),
             Maintenance and Support obligations.

     6.2     The Update(s), Maintenance and Support obligations shall commence
             upon expiry of the warranty period and upon receipt of a covering
             Purchase Order from Digital. Such obligations shall be for minimum
             periods of 12 (twelve) months automatically renewable unless
             terminated by Digital giving the Licensor 30 (thirty) days written
             notice prior to the commencement of any further 12 (twelve) month
             period.

7. LICENCE AND MAINTENANCE FEES AND PAYMENT

     7.1     Digital shall pay Licensor for each and every Licensed Product
             licence obtained by Digital and sub-licensed by Digital to a
             Digital Customer and for providing the Update(s), Maintenance and
             Support service to such Licensed Product following the expiry of
             the 90 (ninety) day Warranty Period. Such fees and their associated
             payment details are in Appendix 4.

     7.2     In the event the Digital Customer wishes to use the Licensed
             Product for the provision of bureau services to other third parties
             in return for a service charge, Licensor and Digital will first
             agree a specific fee on a case by case basis for such Digital
             Customer.


<PAGE>


     7.3     All payments shall be made in United States Dollars.

     7.4     In addition to all other amounts payable under this Agreement,
             Digital agrees to pay all sales, use, excise, personal property or
             other taxes, levied or imposed by any foreign, federal, state,
             local or other governmental unit, however designated, which are
             levied or imposed by reason of the transactions contemplated by
             this Agreement, excepting taxes based on Licensor's income. To the
             extent any such taxes that are not collected from Digital by
             Licensor, Digital shall indemnify and hold Licensor harmless with
             respect to any claim for payment of such taxes and all interest
             and/or penalties imposed thereon.

     7.5     Digital shall be allowed full credit for payments paid for Licensed
             Product(s) that are returned due to Licensor not fulfilling all
             Licensor's obligations as per this Agreement. The credit shall be
             applied to future payments earned under this Agreement.

     7.6     Any Update(s) which Digital at its option distributes to Digital
             Customers shall not be subject to additional licence fees providing
             the Customer has paid a maintenance and support fee.

8. COPYRIGHT

     8.1     Licensor agrees to secure and maintain copyright protection of the
             Licensed Product in the name of Licensor.

     8.2     Digital agrees to include Licensor's copyright notice on all copies
             of the Licensed Product in substantially the following form:

             "Licensed to Digital Equipment International BV, Copyright (c) IFS
             International. 1994. All rights reserved."

9. MARKETING

     9.1     Digital shall have the exclusive right to determine the nature and
             extent of its own marketing efforts in respect of the Licensed
             Product. Both parties shall pay their 


<PAGE>


             own pre-sales costs.

     9.2     Digital and Licensor shall agree and co-ordinate any public or
             press announcements about the subject of this Agreement, including
             the timing of such announcements.


10. SECURITY

     10.1    Digital agrees to use the same degree of security to prevent
             disclosure of any Licensed Product as it uses for its own
             proprietary software of a similar nature.

     10.2    Digital shall have no obligations with respect to any information
             on or about the Licensed Product which:

             (a) was already known to Digital before receipt of the same, or

             (b) is or becomes publicly known through no wrongful act of
                 Digital, or

             (c) is independently developed or acquired by Digital, or

             (d) is required by law to be disclosed, or

             (e) is otherwise exempted from such obligations by this Agreement.

     10.3    By entering this Agreement neither party accepts any obligation of
             confidentiality for any information given to it by the other party
             prior to or whilst this Agreement remains in full force and effect.
             In the event that either party reasonably believes that
             confidential and proprietary information is required to be
             disclosed one to the other, then prior to such disclosure taking
             place both parties shall execute an appropriate non disclosure
             agreement substantially in the form set forth in Appendix 8.



11. SIMILAR PRODUCTS


<PAGE>



Licensor understands that Digital develops and acquires computer software
programs for its own computer products and that existing or planned computer
software programs independently developed or acquired by Digital may contain
ideas and concepts similar or identical to those within the Licensed Product.
Licensor also understands and acknowledges that, over time, Digital's employees
will, through use of the Licensed Product, gain familiarity with the general
concepts and ideas in the same. Licensor agrees that entering this Agreement
shall not preclude or restrict Digital from independently developing or
acquiring similar computer software programs containing such ideas or concepts
for any purpose, without obligation to Licensor, PROVIDED THAT, Digital does not
copy any Licensed Product (in whole or part) for such use.

12. INDEMNIFICATION

     12.1    Licensor warrants to Digital that the Licensed Product does not
             infringe or violate any patent, copyright, trade secret or other
             proprietary right of any third party whatsoever. Provided Digital
             gives Licensor the notice required in clause 12.2, Licensor agrees
             to indemnify and hold Digital (and the Digital Customer) harmless
             from and against all claims, demands, actions or other proceedings
             brought against Digital for infringement or violation of such third
             party rights.

     12.2    Digital agrees to notify Licensor promptly in writing in the event
             of any claim or threat being brought against Digital regarding
             Digital's right (and the right of the Digital Customer) to use any
             Licensed Product and Licensor shall have sole conduct and control
             of all proceedings or the settlement or compromise of any claim so
             referred. However, Digital may, instruct its own lawyers to act in
             its interest if Licensor does not act promptly.

     12.3    If notified promptly in writing of any third party claim or
             assertion of title, Licensor shall, at Licensor's option, either:

             (a) obtain for Digital the right to continue using any Licensed
                 Product for which Digital has obtained a


<PAGE>


                 licence, or

             (b) replace or modify any Licensed Product (at no cost to Digital)
                 so that it is no longer infringing without detracting
                 substantially from the overall performance and functionality of
                 the Licensed Product.

                 Licensor agrees to achieve either of these objectives within a
                 reasonable time and shall keep Digital informed at all times.

     12.4    Licensor agrees to take all reasonable necessary precautions to
             prevent injury to any persons (including employees of the Digital
             Customer) or damage to property (including Digital's and the
             Digital Customer's property) during the term of this Agreement.
             Licensor shall indemnify, defend and hold Digital and its officers,
             agents, directors and employees harmless against all claims, losses
             and expenses and injuries to persons and property, to the extent
             that the claim, loss, expense, or injury resulted from an act,
             omission or negligence on the part of Licensor, or in Licensor's
             performance or failure to perform under this Agreement.

13. INSURANCE

Licensor shall maintain appropriate insurance with a reputable insurance company
with the following minimum coverage:

     (i)     Employers Liability Insurance - in accordance with the provisions
             of any law of the country in which Licensor is incorporated
             relating to compulsory insurance of liability to employees.

     (ii)    Public Liability Insurance - of not less than $ 1,000,000 (One
             million dollars) for any one event.

             A Certificate of Insurance indicating the insurance coverage shall
             be supplied to Digital upon request in writing.


14. MAINTENANCE OF THE LICENSED PRODUCT 


<PAGE>



     14.1    (a) Problem Notification and Diagnosis

             If during this Agreement Digital is notified by a Digital Customer
             of a problem in the usage of the Licensed Product, Digital shall
             notify Licensor in writing (which shall include facsimile
             transmissions) and Licensor shall diagnose the said problem as
             detailed in Clause 13.3 below. Digital may also telephone Licensor
             for the purpose of clarification and discussion and / or to give
             advance information to Licensor prior to Licensor's receipt of
             written notice.

             (b) Problem Correction

             Licensor shall make such modifications as are required to correct
             Licensed Product errors without additional charge to Digital.
             Licensor shall furnish modifications in the form of either a
             program temporary fix or a workaround if the urgency of the problem
             so requires. In all other cases Licensor will respond first with a
             plan to deal with the problem in the form of a Licensed Product
             temporary fix, a workaround or the inclusion of clearance of the
             problem in an Update. The programming services so supplied shall
             restore the Licensed Product to compliance with its specification.

             Notwithstanding the above if it is determined by Digital, after
             consulting with the Licensor, that the cause of such problem is
             attributable to any action or malfunction on the part of any of the
             Digital Customer's, personnel or equipment, or to any modification
             made to the Licensed Product by Digital or Digital's Customer,
             Digital shall pay Licensor its then currently hourly rate for each
             hour or part thereof that Licensor personnel are working in support
             of Digital to solve such problem.


             (c) Telephone Consultation

             Licensor shall make available to Digital telephone support during
             the Licensor's normal business hours in the


<PAGE>


             implementation and/or utilisation of the Licensed Product by
             Digital or any Digital Customer.

             Licensor shall make available a 24 (twenty-four) hour per day
             telephone and fax emergency help service.

             In order for the warranty and maintenance services to become valid
             Digital or Digital Customer must purchase and have available to
             Licensor a World Blazer Telebit modem and a direct
             telecommunications line external to any PABX system that will allow
             for dial up support.


14.2 Error Correction. 

     (a)     Licensor shall notify Digital by telephone and follow up in writing
             of the status of errors in the Licensed Product reported by Digital
             and the progress made by Licensor in rectifying the same.

     (b)     When notified by Digital of a Licensed Product defect Licensor will
             respond to such notification in accordance with the Response Times
             set forth below. Licensor will issue to Digital a software
             correction immediately upon completion of the same in accordance
             with the timescales set forth below.

     (c)     If any correction is due to non-conformity with the Functional
             Specification, defect, or malfunction of the Licensed Product as
             delivered by Licensor, then Licensor shall indemnify Digital
             against all costs in implementing such correction.

             Notwithstanding the above if it is determined by Digital, after
             consulting with the Licensor, that the cause of such problem is
             attributable to any action or malfunction on the part of any of the
             Digital Customer's, personnel or equipment, or to any modification
             made to the Licensed Product by Digital or Digital's Customer,
             Digital shall pay Licensor its then currently hourly rate for each
             hour or part thereof that Licensor personnel are working in support
             of Digital to solve such problem.


<PAGE>



14.3 Error Categories.

     (a)     Reports on bugs or errors in the Licensed Product will be
             classified into the following error categories and reported to
             Licensor by Digital accordingly.

     o       SEVERITY 1

             The bug or error terminates the operation of the Computer System
             and any workstations comprised therein or the bug or error corrupts
             any database used in conjunction with the Licensed Product or a
             major function of normal operation and use of the Licensed Product
             has become unusable and there is no workaround available.

     o       SEVERITY 2

             A major function in normal operation and use of the Licensed
             Product has become unusable and there is an awkward workaround or
             any other function has become unworkable and there is no known
             workaround.

     o       SEVERITY 3

             A minor or major function has become unworkable and there is an
             effective workaround.

     o       SEVERITY 4

             An enhancement to the Licensed Product.


     (b)     Problem Management Timetable

             Bugs or errors falling in to the above categories will be managed
             by Licensor in accordance with the following timetable.



        SEVERITY LEVEL     RESPONSE TIME    TARGET FIX TIME


<PAGE>


     1       Target 4 hours immediately and less than 1 working hour.



     2       Less than 2 3 days working hours.



     3       Less than 24 7 days elapsed hours.



     4       Less than 24 Next Update elapsed hours.


FOR SEVERITY 1 ERRORS LICENSOR SHALL USE ITS BEST ENDEAVOURS TO FIX THE PROBLEM
OR PROVIDE AN ACCEPTABLE WORKAROUND WITHIN THE TARGET FIX TIME.


14.4 Updates and Enhancements 

     Licensor shall use its best endeavours to furnish Digital with Updates to
     the Licensed Product that are necessitated by changes to the Computer
     System and the operating environment(s). Such Updates shall be subject to
     acceptance by Digital prior to distribution to the Digital Customer.
     Licensor agrees that all Updates and Enhancements will be available to
     Digital for evaluation and acceptance after a reasonable period of time
     following the introduction of the new operating environments or changes to
     the Computer System. Such reasonable period shall take into account the
     extent of the changes in the new operating environment.


<PAGE>


14.5 Maintenance Fees

     In consideration of Licensor agreeing to and discharging all of its
     obligations in respect of maintaining the Licensed Product, Digital agrees
     to pay Licensor in accordance with Appendix 4.

15. MODIFICATIONS TO THE LICENSED PRODUCT

     15.1    In the event that Digital or the Digital Customer requires
             modifications to the Licensed Product or consultancy services from
             the Licensor to integrate the Licensed Product with other software
             and hardware that Digital or the Digital Customer may possess,
             Digital may obtain the Licensor's consultancy services as described
             in Appendix 6.

     15.2    Digital shall detail the services required and identify the End
             Result, that the Licensor shall have achieved after providing such
             services either to Digital or the Digital Customer. Digital shall
             then issue its Purchase Order to the Licensor together with such
             supporting documentation regarding the End Result that will allow
             the Licensor to commence the scope of work. The supporting
             documentation shall include some or all of the following:

             (a) detailed scope of work.

             (b) project plan to which the Licensor shall work and deliver the
                 End Result.

             (c) monitoring and performance forms that the Licensor shall
                 observe during the provision of such services.

                 Unless agreed in writing with Digital, Licensor shall retain
                 ownership of all Derivative Work.

16. TERM AND TERMINATION

     16.1    This Agreement and the rights and obligations contained herein
             shall continue in full force for a 7 (seven) year period from the
             date of execution hereof.

     16.2    This Agreement shall automatically be renewed at 2 (two)


<PAGE>


             year intervals after the period stated in Clause 16.1, upon the
             same terms and conditions as the present Agreement in the absence
             of notice to the contrary given by either party to the other. The
             notice period is 6 (six) months advance written notice of the
             eventual termination date.

     16.3    Notwithstanding Clause 16.1 and 16.2 above either party may
             terminate this Agreement:

             (a) if the other party breaches any warranty or fails to perform
                 any material obligation and such breach or failure is not
                 remedied within thirty (30) days after written notice to the
                 party in default; or

             (b) at any time, if the other party shall become insolvent or make
                 an assignment for the benefit of creditors, or if a receiver or
                 similar officer shall be appointed to take charge of all or
                 part of that party's assets.

             (c) in the event that the Digital Customer terminates the
                 maintenance obligations in relation to the Licensed Product in
                 their agreement with Digital, Digital shall upon receipt of
                 notice of such termination send a copy of the same to Licensor
                 which upon receipt shall be deemed to be immediate termination
                 of the maintenance obligations of this Agreement in respect of
                 that particular Digital Customer.

     16.4    Upon termination of this Agreement, the licence granted in Clause
             2.1 shall remain in effect for six (6) months from the effective
             date of termination to permit Digital to honour its contractual
             obligations to Digital Customers whom it has entered agreements for
             the supply of the Licensed Product and which were in existence
             prior to the effective date of termination.

     16.5    The licence granted to Digital herein for support and maintenance
             purposes, the rights and sub-licences which Digital has granted or
             agreed to grant under this Agreement to the Digital Customer and
             any warranties, indemnities, and irrevocable licence grants to
             Digital shall survive any termination of this Agreement.

     16.6    After termination, Digital's obligations shall be to remit to
             Licensor any payments due and upon written request from Licensor
             return, at Licensor's expense, or destroy all copies


<PAGE>



             of Licensed Product held by Digital.

17. RIGHTS AND REMEDIES

The rights and remedies of the parties provided in this Agreement shall not be
exclusive and are in addition to any other rights and remedies provided at law
or in equity.

18. USE OF NAME AND PUBLICITY

     18.1    Digital may use Licensor's name and trademarks in order to promote
             Digital's marketing of the Licensed Product Program pursuant to the
             terms and conditions of this Agreement. Any use of Digital's name
             or trademarks by Licensor shall be subject to the written approval
             of Digital.

     18.2    Both parties agree not to disclose, advertise or make known the
             existence, terms and conditions of this Agreement without the prior
             written consent of the other, such consent not to be unreasonably
             withheld, unless required by law.

19. NON-ASSIGNMENT

Licensor shall not assign this Agreement or any rights or obligations under it
without the prior written consent of Digital, such consent not to be
unreasonably withheld.

20. ARCHIVAL COPIES AND SURVIVAL

Digital shall have the right to retain one complete copy of any Licensed Product
in a secure place, and the right to retain other archival copies of the Licensed
Software which have been merged into storage media no longer accessible by
Digital for operational use. The Licensor agrees that Digital may grant the same
archival rights to the Digital Customer in respect of the Licensed Product as
Digital has granted in respect of its proprietary computer software programs.

21. NOTICES


<PAGE>


All notices to be given under this Agreement shall be in writing and sent by
prepaid registered or recorded post to:

             For Digital:

                (1)     Digital Equipment Co.Limited
                        Wharfedale Road
                        Winnersh
                        Wokingham
                        Berkshire
                        England RG11 5TR

             Attention: Law Department

                (2)     Digital Equipment Co.Limited
                        Gateway House
                        First Avenue
                        Newbury Business Park
                        Newbury
                        Berkshire
                        England RG13 2PZ

             Attention: European Software Acquisition

             For LICENSOR:

                To the address appearing on the front of this Agreement, marked
                for the attention of the President.

                All such notices, if properly addressed, shall be effective when
                received. Either party may change its address for notices, by
                giving notice to the other.

22. SOURCE CODE AVAILABILITY

     22.1    Within 90 (ninety)days of a written notice from Digital Licensor
             shall deliver the Escrow Materials in sealed packages to the Escrow
             Agent.

     22.2    Licensor shall upon dispatch of the Escrow Materials to the Escrow
             Agent notify Digital of such event.

     22.3    In addition to the initial deposit of the Escrow Materials 


<PAGE>


             Licensor shall every six (6) months during the currency of this
             Agreement or as agreed otherwise in writing, deposit all Updates,
             modifications and Source cleared and quality assured copies of the
             Licensed Product with the Escrow Agent if the same have been
             completed during such six (6) month period.

     22.4    Such regular deposit by Licensor shall ensure as far as reasonably
             possible that the latest current release of the Source (and
             accompanying Documentation) is deposited with the Escrow Agent.
             With regard to any replaced Escrow Materials the Escrow Agent shall
             either at Licensor's sole option:

             (a) return the same to Licensor, at Licensor's risk and expense,

                                       OR

             (b) destroy the same and provide Licensor with certification that
                 the same has been so destroyed.

     22.5    The Escrow Agent's duties shall be limited to:

             (a) safekeeping of the Escrow Material in a safe deposit box,
                 secured facility or similar secured location;

             (b) notification to Digital and Licensor in writing of its receipt;

             (c) the disposition of the Escrow Materials to Digital or to
                 Licensor in accordance with the terms and conditions of the
                 Escrow Agreement;

                 For the avoidance of doubt the Escrow Agent shall not be liable
                 for:

                 (i)    the release of the Escrow Materials to Digital in
                        accordance with the terms and conditions of these
                        provisions.

                 (ii)   the accuracy or completeness of the initial deposit of
                        the Escrow Materials and all subsequent deposits.

                 (iii)  Digital or Licensor's failure to comply with any of


<PAGE>


                        the provisions of the Agreement.

                 (iv)   the deterioration or destruction of the Escrow Materials
                        UNLESS the same is due to the wilful act of negligence
                        of the Escrow Agent.

     22.6    For the avoidance of doubt nothing in this Agreement shall entitle
             the Escrow Agent to any lien or right of retention of the Escrow
             Materials.

     22.7    In consideration of the Escrow Agent agreeing to hold the Escrow
             Materials and release the same pursuant to the terms and conditions
             of the Escrow Agreement, the Escrow Agent shall be entitled to
             compensation in accordance with the provisions of Appendix 7. Such
             fees shall be paid by Digital.

     22.8    In the event that any of the following events occur at any time
             during the currency of this Agreement Digital shall be entitled to
             receive the Escrow Materials from the Escrow Agent.

             (a) Licensor convenes a meeting of its creditors OR if a proposal
                 shall be made for a voluntary arrangement OR a proposal for any
                 other composition scheme or arrangement with (or assignment for
                 the benefit of) its creditors OR if Licensor shall be unable to
                 pay its debts OR if a trustee, receiver, administrative
                 receiver or similar officer or person is appointed in respect
                 of all or any part of the business or assets of Licensor.

             (b) Assignment or attempted or purported assignment by Licensor to
                 a Digital Competitor in contravention of Clause 18.

             (c) Persistent and/or deliberate failure on the part of the
                 Licensor to fulfil the Updates, Support and Maintenance
                 obligations as detailed in Clause 14.


     22.9    In the event that the Escrow Agent releases the Escrow Materials to
             Digital pursuant to the above conditions, Digital agrees to accept
             the same subject to all confidentiality provisions of the Agreement
             and further, not to use the Escrow Materials for any purpose other
             than


<PAGE>


             maintenance of the Licensed Product used by Digital and / or
             licensed by Digital to the Digital Customer. Nothing herein confers
             upon Digital any ownership rights to the Escrow Materials.

     22.10   In the event that any of the circumstances in Clause 22.8 arise as
             aforesaid Digital shall send written certification to the Escrow
             Agent which shall be signed by a Digital lawyer. A copy of the
             certification shall also be sent to Licensor. Within 15 (fifteen)
             working days of receipt of the said certification from Digital the
             Escrow Agent shall release to Digital the Escrow Materials in its
             possession at that time. Nothing herein is intended or shall be
             construed as in any way limiting the right on the part of the
             Licensor to seek injunctive relief against both Digital and the
             Escrow Agent preventing release of the Escrow Materials.

     22.11   The escrow obligations as detailed herein shall terminate in the
             event of any of the following occurrences:

             (a) written notification by either Digital or Licensor to the
                 Escrow Agent that this Agreement has terminated or expired and
                 that the need for the escrow is no longer required.

                 In the event that such notification is received by the Escrow
                 Agent, Licensor shall liaise directly with the Escrow Agent
                 concerning the return of the Escrow Materials.

             (b) written notification from the Escrow Agent to Digital or
                 Licensor informing Digital and Licensor that the Escrow Agent
                 wishes to be released from its obligations.

                 In the event that such notification is received by Digital and
                 Licensor, both parties shall discuss and agree the means by
                 which a new escrow agent shall be appointed and Digital shall
                 be responsible for concluding a new agreement with such third
                 party. For the avoidance of doubt the Escrow Agent shall not
                 relinquish the Escrow Materials, nor be absolved from its
                 obligations contained herein until such time as a new escrow
                 agent has been appointed and is capable of taking possession of
                 the Escrow Materials.

     22.12   Digital shall be responsible for producing the agreements detailing
             the escrow obligations which Licensor and the


<PAGE>



             Escrow Agent shall execute.

23. LOAN EQUIPMENT

     23.1    Digital shall loan to Licensor the Digital hardware and software to
             be listed in and on the terms of a Digital "Equipment Loan
             Agreement" a copy of which is attached as Appendix 9.

     23.2    Any loan shall be subject to a maximum loan period of 24
             (twenty-four) months from date of installation of such hardware and
             software, and the loan shall be free-of-charge to Licensor. Upon
             expiry of such period all the hardware and software loaned shall be
             returned to Digital, unless Licensor has purchased said hardware
             and software from Digital prior to the expiry of the loan period.


24. GOVERNING LAW

             This Agreement together with any Licensed Product licences effected
             by Digital to the Digital Customer and the rights and obligations
             of the parties to the same shall be governed by the laws of England
             and any disputes arising out of or in connection with this
             Agreement or any Licensed Product licences shall be submitted to
             the jurisdiction of the English Courts.

25. GENERAL


     25.1    Appendices 1,2,3,4,5,6,7,8,9 and 10 are attached to this Agreement
             and are made a part of this Agreement. The parties are independent
             contractors and neither is the agent of the other. This Agreement
             may not be modified except in writing and signed by authorised
             representatives of both parties.

     25.2    If either party fails to enforce any term, failure to enforce on
             that occasion shall not prevent enforcement on any other occasions.
             Both parties agree that for the waiver of any term to be effective
             such waiver shall be in writing and signed by the party waiving its
             rights.


<PAGE>


     25.3    If any provision of this Agreement is held invalid by any law,
             rule, order, or regulation of any government or by the final
             determination of any court, such invalidity shall not affect the
             enforceability of any other provisions not held invalid.

     25.4    All and any disclaimers included into any Licensed Product that
             conflict with the terms and conditions of this Agreement are hereby
             excluded by mutual consent. This Agreement is the complete, entire
             and exclusive understanding between the parties on this subject
             matter and supersedes all prior discussions or agreements on this
             subject between them.

26. LIMITATION OF LIABILITY

With the exception of Clause 12 above, in no circumstances shall either party be
liable to the other for consequential or indirect loss and damage (which shall
include but not be limited to loss of profits, business, anticipated savings of
whatsoever nature) whether any such liability arises (i) in contract or (ii) in
tort or (iii) for the negligence or (iv) for misrepresentation or (v) for the
breach of duty or (vi) otherwise howsoever and whether caused by a breach of a
fundamental or other term of this Agreement.

Neither parties liability under this Agreement to the other party or the Digital
Customer for direct loss shall exceed the prices paid and due to Licensor for
the Licensed Product and related services to be acquired under each agreement
between Digital and a Digital Customer. In the event no agreement is in place
between Digital and a Digital Customer the maximum liability of each party shall
be no greater than $ 250,000 (two hundred and fifty thousand dollars) in any one
event.


<PAGE>


IN WITNESS WHEREOF, the parties hereto have had their authorised representatives
execute this Agreement.




        Signed:________________________         Signed:_______________________
        For and on behalf of                    For and on behalf of
        "Digital"                               "Licensor"


        _______________________________         ______________________________
        Name and Title:                         Name and Title:



        Date:_______________                     Date:_____________





                             IFS INTERNATIONAL, INC.

                   SOFTWARE DEVELOPMENT AND LICENSE AGREEMENT

     SOFTWARE DEVELOPMENT AND LICENSE AGREEMENT (this "Agreement") by and
between IFS INTERNATIONAL, INC., a New York Corporation having offices at 185
Jordan Road, Troy, New York 12180 ("IFS"), and, Visa International Service
Association, a Delaware Corporation having offices at 900 Metro Center
Boulevard, Foster City, California 94404 ("Visa" or the "Licensee").

                                    RECITALS

     A. Visa is a not-for-profit corporation servicing member banks, and is in
the business of providing products and services for its members involving credit
cards, debit cards and other electronic funds transfer products.

     B. Visa is in the process of developing a product commonly known and
described as a stored value card (hereafter "SVC"). Visa's SVC is sometimes
hereinafter referred to by its trade name, being "Visa Cash".

     C. IFS has experience and capability in the development of application
software for routing, monitoring, and intercepting automated teller machine,
point-of-sale SVC, and other electronic funds transfer transactions.

     D. IFS and Visa have previously entered into a similar software development
and license agreement involving an initial pilot or testing program, conducted
on a limited scope at Visa's headquarters facility.

     E. Visa now desires to expand its Pilot Programs (as defined herein) on a
larger scale, such expanded testing to include seven (7) new separate Pilot
Programs throughout the world.

     F. Licensee desires IFS to develop application software for SVC
applications in accordance with certain functional specifications prepared by
IFS and approved by Licensee and to install such application software on certain
computer equipment to be purchased by Licensee for the purpose of conducting
such further "pilot" or testing programs to be operated by Visa.

     G. IFS desires to grant to Licensee certain limited use rights and licenses
in and to such SVC application software, in accordance with the provisions of
this Agreement.

NOW THEREFORE, in consideration of the mutual covenants and promises set forth
herein, the parties hereto agree as follows:


<PAGE>


                                    ARTICLE 1

                                   DEFINITIONS

     As used in this Agreement, the following words and terms shall have the
following meanings, unless the context or use indicates another or different
meaning or intent.

     "Acceptance" means the acceptance of the Software by Licensee in accordance
with Section 2.6 of this Agreement.

     "Agreement" means this Software Development and Licensing Agreement,
including all schedules or exhibits attached hereto,  and, as of the date of its
acceptance by IFS and Licensee in accordance  with Section  2.1(c)  hereof,  the
Functional Specifications,  as the same may be amended or supplemented from time
to time in accordance with the terms hereof.

     "ATMs" means the automatic teller machines with which the Software is
intended to interface.

     "Designated Site(s)" means up to seven (7) locations to be designated by
Visa as Pilot Program processing sites where the Software is to be installed.

     "Documentation" shall mean all documentation and supportive literature
which explains the use or operation of, or otherwise relates to, the Software,
including, without limitation, all proprietary users or operating manuals,
brochures, or electronic text.

     "Extended Maintenance" means the maintenance and support services provided
by IFS for the Software pursuant to Section 5.3 hereof.

     "Functional Specifications" means the formal document to be prepared by IFS
in accordance with this Agreement and agreed to in writing by IFS and Licensee
and which will set forth the parameters, scope, and characteristics of a system
of computer hardware and Software to be used in implementing SVC transactions,
including ATM functions and various types of SVC related load transactions.

     "Hardware" means the UNIX-based computer hardware and associated equipment
and operating system Software upon which the Software is intended to be operated
and that is to be identified by manufacturer and model number in the Functional
Specifications.

<PAGE>

     "Host Computer" means existing computer system identified in the Functional
Specifications with which the Software and Hardware is intended to interface.

         "Live  Operation"  shall  mean the  operation  of the  Software  on the
Hardware  without  significant  error or down time, in processing real financial
transactions impacting real accounts, but for Pilot Program purposes only.

     "Load Device" means an ATM, POS Hardware or other device which will accept
a request to authenticate an SVC card, to load such card with funds and to
unload funds from such card.

     "Network Computer" means existing computer system which routes and
authorizes transactions for financial institutions on a regional or
international basis.

     "Oracle Software" means the version of the relational database management
system Software developed by the Oracle Corporation that is identified in
Schedule A attached hereto, as adapted by IFS for use with the Software on the
Hardware.

     "POS Hardware" means the point-of-sale machines, cash registers, or other
hardware with which the Software is intended to interface, including (without
limitation) the PIN Pads designated for use with the point-of-sale machines.

     "Pilot Program" means SVC processing systems instituted, operated and
maintained by Visa or any 3rd party designated by Visa, involving Live
Operation, but conducted for the purposes of evaluating the Software and other
aspects of the Visa Cash SVC system, for purposes of determining market
potential, economic viability, systems analysis, and such other systems analysis
and economic factors as Visa may determine appropriate, but not for commercial
use.

     "Software" shall mean the TechNique Plus II ATM message
handler/monitor/router and financial applications interface Software with the
SVC module more particularly identified in Schedule A attached hereto and to be
developed by IFS in accordance with this Agreement and the Functional
Specifications.

     "Use" shall mean the reading into and out of memory of the Software and the
execution of the Software, in whole or in part, by the Hardware.


<PAGE>

                                    ARTICLE 2

              DEVELOPMENT, INSTALLATION, AND ACCEPTANCE OF SOFTWARE

2.1      Functional Specifications

     (a) IFS has previously prepared Functional Specifications for the initial
Pilot Program, which have been agreed upon by Visa. IFS will prepare
modifications to such initial Functional Specifications for each of the
Designated Sites. It is understood and agreed that the Functional Specifications
may vary from site to site, due to differences in the Hardware, differences in
communications protocols or other differences in local conditions at different
sites. In preparing the Functional Specifications, IFS agrees to interview
Licensee's personnel and other necessary personnel and review Licensee's
facilities as required. Licensee agrees, for the purpose of facilitating IFS's
preparation of the Functional Specifications, to provide IFS information
regarding existing computer systems and Operating Software required to complete
the Functional Specification, if necessary (including without limitation,
existing network and/or Host computers and software), and to cooperate in a
timely and diligent manner.

     (b) Upon completion of the Functional Specifications for any Designated
Site by IFS and delivery to Licensee, Licensee shall have a period of twenty
(20) days in which to suggest modifications thereto. Such modifications shall be
incorporated into the Functional Specifications unless such modifications cannot
be made compatible with the Software or are otherwise impracticable or
incompatible with the Hardware or the applications to be performed by the
Software.

     (c) Once the Functional Specifications for each Designated Site have been
completed, a copy thereof shall be signed by a representative of both parties,
and such Functional Specifications shall thereupon become an integral part of
this Agreement and be incorporated herein by reference, even though not
physically attached hereto.

2.2      Development of Software

     IFS shall be responsible for developing the Software in accordance with the
Functional Specifications for each Pilot Site.

2.3      Installation of Software

     (a) Subject to the conditions set forth in this section 2.3, IFS shall be
responsible for installation of the Software on the Hardware at the Designated
Site(s), such installation to be performed by IFS personnel or designated agents
of IFS.


<PAGE>

     (b) The obligation of IFS to install the Software shall be contingent upon
satisfaction of the following conditions by Licensee or by third party vendors
to be retained or employed by Licensee -

     (i)  delivery and installation of the Hardware at the Designated Site(s) in
          operational form and in the approved configuration designated in the
          Functional Specifications,

     (ii) IFS being furnished, free of charge, with dial-up test access to the
          Hardware, the Host Computer, the ATMs and/or the POS Hardware and any
          other hardware peripherals to be used in connection with the Visa Cash
          SVC system, for the period of time required by IFS for installation
          and testing,

     (iii) IFS being furnished with telephone access to the computer networks
          identified in the Functional Specifications for the period of time
          required by IFS for testing and certifying the Software for use in
          interfacing with such computer networks,

     (iv) establishment of such other telephone and communication links as are
          designated in the Functional Specifications or otherwise reasonably
          required by IFS in order to develop the Software,

     (v)  delivery and installation, in operation form, of such other equipment,
          appropriately configured, as shall be identified either in the
          Functional Specifications or otherwise specified by IFS to Licensee in
          written specifications at least thirty (30) days prior to the date
          such equipment is required, and

     (vi) such other conditions as are contained in the Functional
          Specifications.

     (c) The obligation of IFS to install the Software shall be additionally
contingent upon IFS having previously obtained all required export licenses and
other applicable governmental approvals for the installation and licensing to
Licensee of the Software (and if applicable, the Oracle Software) at any of the
Designated Site(s) which are outside of the U.S.A.


<PAGE>

     (d) If, through no fault of IFS, Licensee is not able to satisfy any of the
conditions contained in subsection (b) on a mutually agreeable schedule, any
additional charges incurred by IFS by reason of time lost as a result thereof
shall be billed to Licensee at IFS's then prevailing standard rates.

     (e) Licensee desires to implement its SVC system by delivery and
installation of the Software at each of the Designated Sites on or before the
installation date to be specified in the Functional Specifications applicable to
such Designated Site. IFS will utilize its best efforts to deliver the
application by said date. If, through no fault of Licensee, or any other vendor
associated with Licensee, IFS is unable to meet the specified completion date,
Licensee shall not be obligated to pay any amounts that would otherwise be due
under this Agreement until such time as IFS has completed the implementation and
the results hereof have been accepted by Licensee.


<PAGE>


2.4 Obligations of Licensee

     (a) Licensee shall be responsible for ensuring that each of the conditions
specified in Section 2.3(b) are satisfied in a timely manner.

     (b) For each Pilot Program, Licensee agrees to make available at least one
(1) qualified technical person to work with IFS representatives as a primary
technical representative in connection with the installation and testing of the
Software, and the training of the designated personnel on the Software. Visa
shall also make available such other technical personnel as may be needed to
ensure such timely installation, testing, and training.

     The primary technical representative shall be available at all times to
IFS, and shall have authority to answer questions and make final decisions
binding Visa with respect to the development, installation, testing and training
on the Software. In the event of the illness or other absence of the primary
technical representative, Visa shall designate a substitute to act as primary
technical representative. It shall be the duty of the primary technical
representative to promptly and expeditiously process all requests for
information and to promptly and expeditiously make decisions upon request by
IFS.

2.5 Acceptance of Software

     The Software shall be considered accepted by the Licensee for all purposes
under this Agreement upon the earlier to occur of (i) completion of installation
of the Software by IFS and acceptance by Visa of the Software as being in
substantial conformity with the Functional Specifications after the conclusion
of a thirty (30) day operational test period, or (ii) the completion of ten (10)
days of Live Operation of the Software.

2.6 Training

     (a) IFS shall provide Licensee with basic training on the operation of the
Software for such number of employees, for such duration, as are identified in
the Functional Specifications, but all such training shall be conducted at IFS'
Troy, New York offices unless otherwise expressly agreed in writing by IFS.

     (b) Licensee will be solely responsible for properly training its employees
on the Hardware's UNIX operating system and on the Oracle Software, such
training to be completed prior to IFS commencing training on the Software.


<PAGE>

                                    ARTICLE 3

                                GRANT OF LICENSE

3.1 Software License

     (a) (i) Subject to the terms set forth herein, upon acceptance of the
Software, IFS grants to Licensee and Licensee accepts from IFS, a non-exclusive,
personal, and nontransferable license to use the Software for a term of twenty
four (24) months from initial certification, in object code form only, along
with the Documentation. This license is granted for the limited and restricted
purpose of conducting Pilot Programs concerning the Visa Cash system. IFS
further agrees that, in addition to the testing of the Software with sample
transactions, Visa shall be entitled to go to Live Operation and process real
transactions, but only for purposes of evaluating the Software and other aspects
of the Visa Cash system, for purposes of determining market potential, economic
viability and such other factors as Visa may determine appropriate.

     (ii) Visa can elect to extend the license to use the Software after the
inital twenty four (24) months in increments of 12 months subject to the
additional payment terms detailed in Schedule A.

     (b) With respect to each of the Pilot Programs, the following restrictions
shall apply: 

          (i) up to five (5) member banking organizations shall participate in
     such Pilot Program; In the event that subsequent member banking
     organizations are added to the Pilot Program then the additional licensing
     and maintenance costs detailed in Schedule A shall apply. In the event that
     a member banking organisation leaves the Pilot Program prior to a sixth
     member banking organisation being added, leaving a net total of 5
     organizations, then all that will be payable will be time and materials
     costs detailed in Schedule A in implementing the change.

          (ii) up to three hundred (300) Load Devices shall be permitted per
     Pilot Program; In the event that subsequent member banking organizations
     are added to the Pilot Program then an additional sixty (60) Load Devices,
     per member banking organisation, shall be permitted.

          (iii) In no event is Visa authorized to sublicense the Software to any
     of its member banking organizations or to any other third parties for
     independent testing by such member organization or for Live Operation
     outside of the Pilot Program;


<PAGE>

          (iv) In no event is Visa authorized to incorporate this Software in
     any network systems Visa may set up for the actual commercial use of the
     Software by Visa, by its member banking organizations or other third
     parties.

     (c) Not withstanding the foregoing, it is understood and agreed that Visa
may charge and collect funds or remuneration from its member banking
organizations and other third parties in connection with their use of the
Software as participants in the Pilot Programs.

     IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT THIS LICENSE IS A LIMITED USE
LICENSE FOR PILOT PROGRAM PURPOSES ONLY. Visa shall have the right to obtain
additional licenses pursuant to the fee in Exhibit A for the Software and
Documentation for use by Visa's third party processing contractors for use in
supporting Visa Cash card Pilot Program activities in locations where Visa does
not maintain a processing center.

3.2 Designated Sites

     (a) The Software shall initially be used only at the Designated Site(s).
Visa shall designate sites where the Software is to be installed upon Hardware
supplied by Visa. Visa may designate up to seven (7) such sites. In the event
that a Visa member or members banking organization which has been designated for
a Pilot Program requires software features whose functionality, services or
other requirements are substantially varied from those set forth in this
Agreement and in the Functional Specification provided under this Agreement,
then Visa and IFS shall agree upon specific and separate terms for such member
or members. Such terms shall be incorporated into an addendum to this Agreement,
which addendum shall be signed or initialed by both IFS and Visa. Once a site
has been identified and designated, the parties shall note the location and
other factors applicable to such site on Schedule B of this Agreement. It is
anticipated that Schedule B will be amended during the course of this Agreement
as Designated Sites are identified and designated by Visa. However, the failure
to update Schedule B shall not have any effect upon the construction or
enforcement of this Agreement. These Designated Sites may include Visa-owned
processing facilities around the world, the processing sites of Visa's
designated processing contractors, and the processing sites of members of Visa
engaged in the Visa Cash Pilot Programs.

     (b) Licensee may transfer use of the Software from a current Designated
Site to another location provided (i) Licensee has given prior written notice to
IFS identifying the location of the new proposed Designated Site, and (ii) if
required, IFS has obtained the consent of the export department of the United
States Department of Commerce


<PAGE>

("USDOC") for use of the Software at the proposed new Designated Site. Upon
receipt of such written notice from Licensee specifying the proposed new
Designated Site, IFS agrees to make the proper request to USDOC for such
consent. Upon any change in a Designated Site in accordance with this Section
3.2(b), Licensee shall have the right to operate the Software concurrently at
both the existing Designated Site and the new Designated Site during a
conversion period not to exceed thirty (30) days, but in no event shall use of
the Software at the new Designated Site begin prior to IFS having received the
consent of USDOC, if such consent is required. After the completion of such
conversion period, the new location at which the Software to be used shall for
all purposes under this Agreement be considered a Designated Site, and the old
location shall no longer be considered a Designated Site.

     (c) When the Hardware at a Designated Site is temporarily inoperative for
any reason, the license granted herein shall be automatically extended without
charge or prior consent to permit use of the Software on Hardware located at any
other computer center or centers on an interim basis. When such Designated Site
again becomes operational, Licensee shall promptly return the Software to such
location and the aforementioned temporary extension of the license granted
herein shall cease.

     (d) Use of the Software by Licensee at any location other than a Designated
Site or an interim back-up site in accordance with subsection (c) of this
section shall be the basis for immediate termination of this Agreement. Such
termination shall be in addition to and not in lieu of any equitable remedies
available to IFS.

3.3 Authorized Use of Software

     (a) Licensee shall not use the Software for any purpose other than in
connection with Visa's SVC Pilot Programs. Licensee shall not cause or permit
the reverse engineering, disassembly, or decompilation of the Software.

     (b) Licensee, or its designated processing contractors, shall have the
right to use the Software only to support ATM and/or designated load device Visa
Cash Pilot Program activities at Visa-owned premises, Visa Member-owned premises
or Visa designated third party premises.


<PAGE>

3.4 Copies

     Licensee shall have the right to maintain one complete copy of the Software
and the documentation installed at a Designated Site at an emergency back-up
site designated by Licensee. Licensee shall not have the right to copy the
Software either in printed form or in non-printed, machine-readable form for any
other purpose. Licensee warrants that all copies of the Software and the
Documentation will remain under the control of Licensee and will not be
available for the use or inspection by any third party, except as permitted by
this Agreement.

3.5 No Transfer of Software

     Except as otherwise  provided in this  Agreement,  Licensee shall not lend,
sell,  lease,  sublicense,  or otherwise dispose of any of the Software licensed
under this Agreement,  without the prior written  approval of IFS. Such approval
may be withheld for any reason or for no reason at the sole discretion of IFS.

3.6 Escrow of Source Code

     (a) IFS shall place in the custody of a third party source code escrow
agent reasonably acceptable to Visa a copy of the source code and other
materials describing the Software that are adequate to permit an experienced
programmer to modify, maintain, or enhance the Software.

     (b) The parties shall execute the standard agreement provided by that
escrow agent, provided that at minimum the agreement shall provide that IFS
shall make such additional deposits into escrow of the source code and materials
as are necessary to keep the deposit in conformance with the then current
version in use by Visa, and Visa shall have access to the source code in the
event that IFS is unable to or refuses to maintain the Software, whether by
reason of bankruptcy, insolvency, or otherwise.

                                    ARTICLE 4

                                PRICE AND PAYMENT

4.1 Software

     The fees to be paid by Licensee for the development, delivery,
installation, licensing, and training for use of the Software are as set forth
in Schedule A attached hereto. Such fees shall be paid by Licensee to IFS in
accordance with the payment terms set forth in


<PAGE>

Schedule A. Notwithstanding the foregoing, in the event that IFS is prevented
from performing any particular item or responsibility, upon the completion of
which a payment is called for under such Schedule A, and such delay is due
solely to (i) Licensee having either requested a delay in such performance, or
(ii) Licensee not being ready, willing, and able to accept such performance,
then, in either such case, such payment shall nevertheless be paid by Licensee
to IFS as if such responsibility or task had been performed by IFS.

4.2 Taxes

     In addition to all other amounts payable under this Agreement, Licensee
agrees to pay all sales, use, excise, personal, property, or other taxes levied
or imposed by any foreign, federal, state, local, or other governmental unit,
however designated, which are levied or imposed by reason of the transactions
contemplated by this Agreement, excepting only taxes based upon IFS's net
income. To the extent any such taxes are not collected from Licensee by IFS,
Licensee shall indemnify and hold IFS harmless with respect to any claim for
payment of such taxes and all interest and/or penalties imposed thereon.


<PAGE>


4.3 Expenses

The payment schedule specified in Schedule A is exclusive of expenses. Licensee
agrees to reimburse IFS for all actual out-of-pocket expenses incurred by IFS or
its personnel in developing, delivering, installing, testing, and maintaining
the Software including, without limitation, long distance telephone calls,
facsimile and overnight courier charges, and, in connection with out-of-town
travel, transportation expenses, meals, and lodging.

4.4 Payment in U.S. Dollars

     All prices are denominated and all payments shall be made in United States
dollars.

                                    ARTICLE 5

                      WARRANTIES, LIMITATIONS OF LIABILITY,

                              EXTENDED MAINTENANCE

5.1 Software Warranty

     IFS warrants that for the ninety (90) day period commencing with the date
of Acceptance (as defined in Section 2.5) by Licensee (the "Warranty Period"),
Software will conform, as to all substantial operational features, to the
Functional Specifications. If any modifications are made to the Software by
Licensee during the Warranty Period, the warranty given herein shall immediately
be terminated with respect to that portion of the Software that is modified.
Corrections in the Software for difficulties or defects traceable to Licensee's
errors or systems changes shall be billed to Licensee at IFS's standard time and
material charges.

5.2 Obligations Under Warranty

     During the ninety (90) day Warranty period, IFS will, at no additional
charge (except as provided in subsections and (c) and (d) below), provide
Licensee with the following -

     (a) Any known problem solutions relating to the Software, as such solutions
become known to IFS,

     (b) Corrections for problems that IFS diagnoses as defects in a currently
supported version of the Software,


<PAGE>

     (c) Telephone and facsimile access during IFS's normal business hours, such
access to be available for providing to Licensee advice and counsel regarding
the use and maintenance of the Software, and for responding to inquiries and
receiving notifications of problems, defects, and malfunctions.

     (d) A 24-hour per day, seven (7) days a week, telephone and telecopy
emergency help service for reporting serious system problems and support, via
telephone and dial-up facilities, for resolution of these problems.
Documentation pertaining to each reported problem must be telecopied to IFS. If
it is determined that the cause of such problem was due to a non-conformity,
defect, or malfunction of the Software as delivered by IFS, there shall be no
additional charge for this service. If it is determined that the cause of such
problem is attributable to any action or malfunction on the part of any of
Licensee's personnel or equipment, or to any modification made to the Software
by Licensee, Licensee shall pay IFS its then current hourly rate, multiplied by
1.5 for each hour or part thereof that IFS personnel are working in support of
Licensee to solve such problem.

     (e) Upon request of Licensee, in the event of an emergency situation where
the testing facilities at the IFS Research and Development Facility are
inadequate to either remedy or recreate the situation in an expeditious manner,
IFS will dispatch, on a mutually agreed upon schedule to affected Designated
Site, qualified personnel to attempt to remedy such emergency situation on-site.
If the cause of such emergency is determined to be a nonconformity, defect, or
malfunction of the Software as delivered by IFS, the only charge for this
service shall be reasonable out-of-pocket expenses incurred by IFS. If the cause
is determined to be attributable to any action or malfunction on the part of any
of Licensee's personnel or equipment, or to any modification made to the
Software by Licensee, Licensee shall pay IFS its then current daily rate for
each day or part thereof that IFS personnel are away from the IFS facility in
support of Licensee.

     (f) Whatever service is reasonably required by Licensee in the event of
drastic failure of the Software or any program included in the Software, or any
clerical error rendering the Software inoperable, provided such service is
within the scope of IFS's ability to restore the Software to operation, IFS
shall, to the extent possible, give the highest priority to any such situation.

     (g) All revisions, updates, improvements, modifications, and enhancements
to the Software necessary to maintain the function requirements set forth in the
functional Specifications and such services, if any, as are required to enable
Licensee to continue Licensee's intended use of the Software, as so revised,
updated, improved, modified, or enhanced. If any such revision, update,
improvement modification, or enhancement 


<PAGE>

released by IFS is not acceptable to Licensee, then IFS may, at its discretion,
elect not to maintain the Software.


<PAGE>


5.3 Warranty Disclaimer

     THE WARRANTIES CONTAINED IN THIS ARTICLE 5 ARE LIMITED WARRANTIES AND ARE
THE ONLY WARRANTIES MADE BY IFS WITH RESPECT TO THE SOFTWARE. IFS MAKES, AND
LICENSEE RECEIVES, NO OTHER WARRANTY EXPRESS OR IMPLIED, AND THERE ARE EXPRESSLY
EXCLUDED ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
IFS SHALL HAVE NO LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER THIS AGREEMENT
FOR CONSEQUENTIAL, EXEMPLARY, OR INCIDENTAL DAMAGES, EVEN IF IT HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES. THE STATED EXPRESS WARRANTIES ARE IN LIEU OF
ALL LIABILITIES OR OBLIGATIONS OF IFS FOR DAMAGES ARISING OUT OF OR IN
CONNECTION WITH THE DELIVERY, USE, OR PERFORMANCE OF THE SOFTWARE.

5.4 Limitation on Liability

     LICENSEE AGREES THAT IFS'S LIABILITY ARISING OUT OF CONTRACT, NEGLIGENCE,
STRICT LIABILITY, IN TORT, UNDER WARRANTY OR UNDER ANY OTHER THEORY OF LEGAL
LIABILITY, SHALL NOT EXCEED ANY AMOUNTS PAYABLE BY LICENSEE FOR THE SOFTWARE
LICENSED HEREUNDER.

5.5 Written Warranties Exclusive

     No officer, employee, agent, or representative of IFS has the authority to
bind IFS to any oral representation or warranty, and the only warranties
extended are those written warranties set forth in this Article 5. Any
representation or warranty not expressly contained in this Agreement or a duly
executed subsequent modification to this Agreement shall not be enforceable by
Licensee.

5.6 Extended Maintenance

     (a) Upon the termination of the Warranty Period, IFS agrees to provide
Licensee with Extended Maintenance Services (as hereinafter defined) in
accordance with this Section 5.6.

     (b) Extended Maintenance Services will be provided for that period between
expiration of the 90-day warranty period and the termination of the license for
the Pilot Programs (the "Extended Maintenance Period") at the annual fee
specified in Schedule A. IFS will invoice Licensee for the maintenance fees on
an annual basis, in advance,


<PAGE>

commencing at the end of the Warranty Period and on each anniversary date
thereafter throughout the Extended Maintenance Period. Payment terms will be net
ten (10) days. IFS may adjust the annual fee for Extended Maintenance Services
once in any year. The percent of change of such adjustment may not exceed the
lesser of (i) the percentage of change of the increase in the Consumer Price
Index in the United States since the date of the most recent adjustment, and
(ii) fifteen percent (15%). IFS agrees to provide thirty (30) days prior written
notice to Licensee of any change in the annual fee charged for Extended
Maintenance services.

     (c) During the Extended Maintenance Period, IFS will, at no additional
charge beyond the extended maintenance fee payable pursuant to subsection (b)
above (except as provided in paragraphs (5) and (6) below), provide Licensee
with the following services (the "Extended Maintenance Services") -

     (i)  New releases of the Software, at such times as IFS, in its sole
          discretion, makes these releases generally available to its customers.

     (ii) All revisions, updates, and improvements to the Software necessary to
          maintain the functions, facilities, and standards specified in the
          Functional Specifications, and such additional services, if any, as
          are required to enable Licensee to continue Licensee's intended use of
          the Software, as so revised, updated, or improved, as specified in the
          Functional Specifications.

     (iii) Corrections for problems that IFS diagnoses as defects in a currently
          supported version of the Software.

     (iv) Telephone and facsimile access during IFS's normal business hours,
          such access to be available for providing to Licensee advice and
          counsel regarding the use and maintenance of the Software, and for
          responding to inquiries and receiving notifications of problems,
          defects, and malfunctions.

     (v)  A 24-hour per day, seven (7) day per week telephone and telecopy
          emergency help service for reporting serious system problems and
          support, via telephone and dial-up facilities, for resolution of these
          problems. Documentation pertaining to each reported problem must be
          telecopied to IFS.


<PAGE>

               If the cause of such problem is determined to be a
          non-conformity, defect, or malfunction of the Software as delivered by
          IFS, there shall be no additional charge for this service. If the
          cause of such problem is determined to be attributable to any action
          or malfunction on the part of any of Licensee's personnel or
          equipment, or to any modification made to the Software by Licensee,
          Licensee shall pay IFS its then current hourly rate, multiplied by 1.5
          for each hour or part thereof that IFS personnel are working in
          support of Licensee to solve such problem.

     (vi) Upon request of Licensee, in the event of an emergency situation where
          the testing facilities at the IFS Research and Development Facility
          are inadequate to either remedy or recreate the situation in an
          expeditious manner, IFS will dispatch on a mutually agreed upon
          schedule to the affected Designated Site, qualified personnel to
          attempt to remedy such emergency situation on-site. If the cause of
          such emergency is determined to be a nonconformity, defect, or
          malfunction of the Software as delivered by IFS, the only charge for
          this service shall be reasonable out-of-pocked expenses incurred by
          IFS. If the cause is determined to be attributable to any action or
          malfunction on the part of any of Licensee's personnel or equipment,
          or to any modification made to the Software by Licensee, Licensee
          shall pay IFS its then current daily rate for each day or part thereof
          that IFS personnel are away from the IFS facility in support of
          Licensee.

     (vii) Whatever service is reasonably required by Licensee (in the event of
          drastic failure of the Software or any program included in the
          Software, or any clerical error rendering the Software inoperable,
          provided such service in within the scope of IFS's ability to restore
          the Software to operation), IFS shall, to the extent possible, give
          the highest priority to any such situation.

     (d) Throughout the Extended Maintenance Period, Licensee will be required
to accept all updates, revisions, improvements, and new releases in the Software
to maintain the version of the Software licensed hereunder in conformity with
the then current or last release of the Software, as adapted to conform with the
Functional Specifications. If the Licensee refuses to accept any such revisions,
updates, improvement, or releases, then


<PAGE>

IFS, at it option, shall have no further obligation under this Section 5.6 to
provide Extended Maintenance Services.

5.7 Telephone Access

     Throughout the Warranty and Extended maintenance Periods, Licensee agrees
to provide IFS dial-up telephone access to the Software to enable IFS to perform
warranty and maintenance services.


<PAGE>


                                    ARTICLE 6

                       TITLE TO SOFTWARE, CONFIDENTIALITY,

                               AND INDEMNIFICATION

6.1 Title to Software and Intellectual Property Rights

     The Software, the Documentation, and all copies of both, are proprietary to
IFS, and title thereto remains with IFS. All applicable rights to patents,
copyrights, trademarks, and trade secrets in the Software and the Documentation,
including any modifications made in the Software at Licensee's request are and
shall remain with IFS. Licensee shall not sell, transfer, publish, disclose,
display, or otherwise make available the Software or copies thereof to others.
Licensee agrees to secure and protect the Software, the Documentation, and all
copies of either of the foregoing in a manner consistent with the maintenance of
IFS's rights therein and to take appropriate action by instruction or agreement
with its employees or consultants who are permitted access to the Software or
the Documentation to satisfy its obligations hereunder. All copies made by the
Licensee of the Software, including translations, compilations, partial copies
with modifications, and updated works, are the property of IFS. Violation of any
provision of this Section shall be the basis for immediate termination of this
License Agreement. Notwithstanding the foregoing, Visa warrants with respect to
the modifications to the IFS TechNique Plus Software made pursuant to Section 10
of the Functional Specifications, that it has performed a reasonable patent
search, and is aware of no infringements.

6.2 Confidentiality

     (a) The parties agree to keep and maintain all confidential information
received from the other party in the strictest of confidence, and each shall use
such confidential information only for performing its obligations under this
Agreement and shall not disclose such confidential information to any third
party without the prior written consent of the other party hereto. Confidential
information of a party shall include all information that is marked
"Confidential" or "Proprietary", or any information about the processes,
systems, business, plans, or customers of a party. Confidential information of
Visa shall specifically include the Visa Cash card reload process and
methodology.

     (b) Each of the parties shall ensure that their respective employees,
agents, and subcontractors which are given access to any confidential
information received from the other party, shall be made aware of the
requirements of confidentiality with respect to such information set forth in
this section. Either party may require the other party to verify compliance with
this section.


<PAGE>

     (c) In the event of disclosure of confidential information to a third
party, in violation of the provisions of this section, the defaulting party
shall use all reasonable efforts to assist the party supplying the confidential
information in recovering and preventing such third party from using,
disseminating, selling, or other disposing of such information.

     (d) The provisions of this section shall not prevent either party from
using or disclosing any information where the recipient can satisfactorily
demonstrate and document that such information -

     (i)  was in its possession (with full right to disclose) prior to receiving
          it from the other party,

     (ii) is or substantially becomes part of the public domain other than by
          breach of the receiving party of its obligations hereunder, or

     (iii) is independently developed by the receiving party prior to receipt or
          is received from a party with no obligation of confidentiality.

6.3 Non-disclosure

     Licensee shall not, without IFS's prior written consent, disclose or show
the Software or the Documentation to anyone except: (i) Licensee's authorized
personnel; (ii) third party contractors under obligations of confidentiality;
and (iii) auditors. In this regard, Licensee shall apply all reasonably
necessary precautions and take all necessary steps to prevent the Software and
the Documentation being acquired by unauthorized persons.

6.4 Indemnification Provisions

     (a) Licensee agrees to give IFS prompt written notification of any legal
action or proceeding instituted or threatened against Licensee, based upon a
claim that the Software infringes a United States or foreign patent or
copyright, or the trade secret or other proprietary or property rights of the
third party ("Infringement"). IFS, at its own expense, will defend any action
brought against Licensee to the extent that it is based on such a claim of
Infringement, provided that the Software is being used within the scope of this
Agreement. IFS shall have the right to control the defense of all such claims,
lawsuits, and other proceedings. In no event shall Licensee settle any such
claim, lawsuit, or proceeding 


<PAGE>

without IFS's prior written approval. IFS will pay any damages finally awarded
against Licensee in any action or proceeding, which are attributable to a
judgment or determination that the Licensee's use of Software constitutes an
Infringement. Notwithstanding the foregoing, in the event of a breach by
Licensee of its obligation to conduct a reasonable patent search pursuant to
Section 6.1, IFS shall have no obligation to defend or indemnify Licensee
against infringement claims involving intellectual property rights that Licensee
did not identify as a result of its breach of its warranty in Section 6.1.

     (b) If, as a result of any claim of Infringement against any patent,
copyright, license, or other property right, Licensee is enjoined from using the
Software, or if IFS believes that the Software is likely to become the subject
of a claim of Infringement, IFS, at its option and expense, may procure the
right for Licensee to continue to use the Software, or replace or modify the
Software so as to make it non-infringing. If neither of these two options is
reasonably practicable, IFS may discontinue the license granted herein on one
(1) month's written notice and refund to Licensee that unamortized portion of
the Software license fees hereunder (based on four (4) years of straight-line
amortization, such amortization to commence on the date of this Agreement). The
foregoing states the entire liability of IFS with respect to Infringement of any
copyrights or patents by the Software or any parts thereof.

     (c) IFS shall have no liability for a claim of Infringement based on -

     (i)  use of any version of the Software other than a current, unaltered
          release of the Software, if such Infringement would have been avoided
          by use of such current unaltered release, or

     (ii) use or combination of the Software with other computer programs or
          data not developed by IFS (with the exception of the Oracle Software
          furnished by IFS in connection with this Agreement) or provided to
          Licensee by IFS, if such Infringement would have been avoided in the
          absence of such use or combination.

                                    ARTICLE 7

                    PROVISIONS APPLICABLE TO ORACLE SOFTWARE

7.1 Applicability of this Article

<PAGE>

     This Article 7 shall only apply if there is Oracle  Software  identified on
Schedule A or in the  Functional  Specification  for any  Designated  Site.  The
provisions of this Article 7 shall have no application to the Software.

7.2 Grant of Sublicense

     Subject to the terms set forth herein, IFS grants to Licensee and Licensee
hereby accepts from IFS, a non-exclusive, personal, and non-transferable
sublicense to use, for a term of twenty four (24) months, the Oracle Software,
in object code only. This sublicense to use the Oracle Software is granted
subject to and in accordance with a certain license to market and sublicense
such Oracle Software granted to IFS by Oracle Corporation.

7.3 No Warranties Given by IFS

     IFS MAKES NO WARRANTIES WITH RESPECT TO THE ORACLE SOFTWARE, EXCEPT THAT
IFS WARRANTS THAT (I) IFS IS AUTHORIZED TO SUBLICENSE THE ORACLE SOFTWARE TO
LICENSEE IN CONNECTION WITH LICENSE OF THE SOFTWARE, AND (II) THAT THE
COMBINATION OF THE ORACLE SOFTWARE WITH THE SOFTWARE DOES NOT CAUSE THE ORACLE
SOFTWARE TO INFRINGE ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES. IFS IS
NOT LIABLE TO INDEMNIFY LICENSEE FOR ANY INFRINGEMENT RELATING TO THE ORACLE
SOFTWARE, EXCEPT IN CONNECTION WITH BREACHES OF THE WARRANTIES DESCRIBED IN THE
PRECEDING SENTENCE.

7.4 Additional Restrictions Applicable to Oracle Software

     (a) Licensee shall use the Oracle Software in object code form only, only
at the Designated Site(s) (which, for purposes of this Section 7.4, shall
include all Designated Sites and temporary locations authorized in accordance
with Section 3.2 hereof) and only for Licensee's own internal data processing on
a single computer located at each such Designated Site.

     (b) Licensee shall have the right to duplicate Oracle Software for backup
or archival purposes and to transfer the Oracle Software to a backup computer in
the event of computer malfunction. Licensee shall not make the Oracle Software
available on any timesharing or other rental arrangements.


<PAGE>

     (c) Licensee may not transfer its rights in the Oracle Software under this
Agreement without the permission of IFS.

     (d) Licensee shall not use the Oracle Software for any purpose other than
in connection with the Software as part of an automated teller machine and/or
support of the Visa Cash card program.

     (e) Licensee shall not cause or permit the reverse engineering,
disassembly, or decompilation of the Oracle Software.

     (f) Title to the Oracle Software shall not, by virtue of this Agreement,
pass to the Licensee.

     (g) Oracle Corporation shall not be liable for any damages, whether direct,
indirect, incidental, or consequential, arising from the use of the Oracle
Software.

     (h) Upon termination of this Agreement and the sublicense to use the Oracle
Software granted herein, Licensee shall discontinue using and shall destroy or
return to IFS the Oracle Software, all documentation relating to the Oracle
Software, and all archival or other copies of the Oracle Software.

     (i) Licensee shall not publish any results of benchmark tests run on the
Oracle Software.

     (j) Licensee shall not transfer the Oracle Software from the Designated
Site(s). Licensee agrees to comply fully with all relevant statutes and
regulations of the United States Department of commerce and with the U.S. Export
Administration to assure that the Oracle Software is not exported in violation
of such statutes and regulations.

     (k) To the extent only that this Agreement relates to the Oracle Software,
Oracle shall be a third party beneficiary hereunder.

     (l) The Oracle Software is not specifically developed, manufactured, or
licensed for use in the planning, construction, maintenance, operation, or use
of any nuclear facility or for the flight, navigation, or communication of
aircraft or ground support equipment. Licensee hereby agrees that Oracle shall
not be liable for any claims or damages arising from such use if Licensee uses
the Oracle Software for such applications. Licensee agrees to indemnify and hold
Oracle and IFS harmless from any claims for losses, costs, damages, or liability
arising out of or in connection with the use of the Oracle Software in such
nuclear or aviation applications.


<PAGE>

     (m) NO WARRANTIES, EITHER EXPRESS OR IMPLIED, ARE MADE UNDER THIS AGREEMENT
BY OR ON BEHALF OF ORACLE CORPORATION.

                                    ARTICLE 8

                           TERMINATION, EXCUSED DELAYS

8.1 Termination by IFS

     (a) IFS shall have the right to terminate this Agreement upon the
occurrence of one or more of the following events -

     (i)  the failure of Licensee to make any payment due to IFS under this
          Agreement within ten (10) days after the due date thereof,

     (ii) the use by Licensee of the Software at a location other than a
          Designated Site, in violation of Section 3.2 hereof,

     (iii) the transfer or disclosure by Licensee or any of its employees or
          agents of the Software, the Documentation, or any part of either, to
          any third party, in violation of Section 6.1 hereof, or the violation
          by Licensee of the confidentiality and non-disclosure requirements
          imposed by such Section,

     (iv) the failure of Licensee to observe or perform any covenant, condition,
          or agreement hereunder on its part to be observed or performed (other
          than the obligations referred to in paragraphs (i), (ii), or (iii) of
          this Section 8.1(a)) for a period of thirty (30) days after written
          notice, specifying such failure and requesting it be remedied, is
          provided by IFS to Licensee,

     (v)  the termination or suspension by Licensee of its business, or

     (vi) Licensee becomes insolvent, seeks protection under applicable
          bankruptcy laws (other than as a creditor), makes an assignment for
          the benefit of its creditors, or becomes subject to the direct control
          of a trustee, receiver, or similar authority.


<PAGE>

     (b) Upon termination of this Agreement by IFS in accordance with subsection
(a) of this section, all rights and licenses granted to Licensee in this
Software, and if applicable, the Oracle Software, shall immediately terminate,
and IFS shall have the right, at any time, to take immediate possession of the
Software and the Documentation and all copies of both provided to Licensee,
wherever located, without demand or notice. Within five (5) days after
termination of the license(s) granted hereunder, Licensee shall return to IFS
all copies of the Software and the Documentation provided to Licensee in the
form provided by IFS. Termination of this Agreement in accordance with this
Section 8.1 shall not relieve Licensee of its continuing obligations regarding
confidentiality of the Software and the Documentation.

     (c) Upon termination of this Agreement in accordance with this section 8.1,
all amounts payable by Licensee to IFS hereunder shall become immediately due
and payable.

     (d) Termination of the license(s) and other rights granted to Licensee
hereunder, in accordance with this section 8.1 shall be in addition to, and not
in lieu of, any other rights and remedies available to IFS, in law or in equity.

8.2 Termination by Licensee

     (a) Licensee shall have the right to terminate this Agreement upon the
occurrence of one or more of the following events -

     (i)  the failure by IFS to substantially observe or perform any material
          obligation, covenant, or agreement required to have been observed or
          performed by it hereunder with respect to the development,
          installation, delivery, or maintenance of the Software (referred to in
          this section as a "Software Related Failure"), but only if, after
          receipt by IFS of written notice from Licensee specifying such
          Software Related Failure, IFS fails to attempt diligently to cure such
          Software Related Failure in the manner specified in section 8.2(b),

     (ii) the failure of IFS to observe or perform any covenant, condition, or
          agreement hereunder on its part to be observed or performed (other
          than the obligations referred to in paragraph (i) of this section
          8.2(a)) for a period of thirty (30) days after written notice,
          specifying such failure and requesting it be remedied is provided by
          Licensee to IFS,


<PAGE>

     (iii) the termination or suspension by IFS of its business,

     (iv) IFS becomes insolvent, seeks protection under applicable bankruptcy
          laws (other than as a creditor), makes an assignment for the benefit
          of its creditors, or becomes subject to the direct control of a
          trustee, receiver, or similar authority.

     (b) For purposes of this section 8.2, IFS will be considered to have
attempted diligently to cure a Software Related Failure if it ensures that a
person fully familiar and experienced in the use of the Software commences
investigatory and corrective work with respect to such Software Related Failure
in the fastest time reasonably possible, and such person and/or other suitably
qualified persons diligently continues with all necessary investigatory and
corrective work until such time as IFS demonstrates that such failure has been
satisfactorily rectified.

     (c) Upon termination of this Agreement by Licensee in accordance with this
section 8.2, IFS shall refund to Licensee (i) that portion of the most recent
Extended Maintenance Fee paid by Licensee pursuant to section 6.3 which is
attributable to the remaining unexpired portion of the twelve-month period to
which such fee relates, and (ii) any payments made by Visa to IFS for rights
that Visa has not realized or accomplished under this Agreement, including,
without limitation, the sum of $50,000 for each Designated Site paid for but not
installed by Visa.

8.3 Excused Delays

     Notwithstanding anything in this Agreement to the contrary, except as
provided in this Section 8.3, if, solely by reason of the occurrence of an
"Uncontrollable Event" (as hereinafter defined), either party is unable in whole
or in part to carry out any of its obligations under this Agreement and such
party gives written notice with full particulars of such Uncontrollable Event to
the other party within a reasonable period of time after the occurrence thereof,
such obligations shall be suspended during the continuance of such inability to
perform, which shall include a reasonable period of time for the removal of the
effect of such Uncontrollable Event. Notwithstanding the foregoing provisions of
this section 8.3, the occurrence of an Uncontrollable Event shall not excuse,
delay, or in any way diminish the obligation of Licensee (i) to make the
payments required by Article 4 hereof, or to pay any other amounts then due and
payable to IFS under this Agreement, or (ii) to abide by the confidentiality and
nondisclosure provisions contained in Articles 6 and 7 hereof.


<PAGE>

     For purposes of this section 8.3, "Uncontrollable Events" shall include
acts of God, strikes, lockouts, or other industrial disturbances, acts of public
enemies, orders or acts of governmental authorities, orders or acts of military
authorities, insurrections, riots, epidemics, floods or other natural disasters,
fire, civil disturbances, explosions, breakage, accident to machinery,
communication line failures, power or other utility failures, failures of any
computer or related equipment, or any other similar event not reasonably within
the control of the party claiming an inability to perform.

                                    ARTICLE 9

                                  MISCELLANEOUS

9.1 Additional Construction and Miscellaneous

     (a) Entire Agreement. This Agreement, any schedules, or Exhibits attached
hereto and the Functional Specifications collectively contain the entire
agreement and understanding of the parties. There are no other understandings,
terms, or conditions, oral or written, express or implied, not contained
therein. All prior proposals, understandings, terms, conditions, or agreements,
including, without limitation, the Proposal, are deemed superseded and replaced
by this Agreement.

     (b) Binding Effect. This Agreement shall bind and inure to the benefit of
the parties, their respective heirs, personal representatives, and legal
successors.

     (c) Severability. If any parts of this Agreement are found to be void or
unenforceable, the remaining provisions shall nevertheless be binding with the
same effect as though the void parts were deleted.

     (d) Governing Law. This Agreement and performance hereunder shall be
governed by the laws of the State of New York.

     (e) Grammatical Usage. In construing this Agreement, feminine pronouns
shall be substituted for those masculine in form (and vice versa), and plural
terms shall be substituted for singular and singular for plural, in any place
where the context so requires.

     (f) Captions. The captions to this Agreement are inserted only for purposes
of convenient reference and in no way define, limit, or prescribe the scope or
intent of this Agreement or any party hereof.


<PAGE>

     (g) Counterparts. This Agreement may be executed in several counterparts,
each of which shall be considered a legal original for all purposes. Any
fully-signed counterpart may be introduced into evidence in any action or
proceeding without having to produce the others.

     (h) English Language Version Controls. If counterparts of the Agreement are
written in the English language and in any other language, the English language
version shall control in all respects as to the correct interpretation of all of
the terms and provisions hereof.

9.2 Modification or Waiver

     (a) Modification. This Agreement may only be changed, modified, or
rescinded by written instrument signed by all parties.

     (b) Waiver. Any waiver of this Agreement shall not be effective unless made
in a writing signed by the person against whom the enforcement of such waiver is
sought. A waiver given in any case shall only apply to that particular act or
omission, and shall not be effective as to further acts or omissions, regardless
of whether they be of the same or similar nature.

9.3 Limitation of Actions

     No action, regardless of form, arising out of this Agreement may be brought
by either party more than one (1) year after the cause of action has arisen.

9.4 Legal Fees

     The prevailing party shall have the right to collect from the other party
its reasonable expenses incurred in enforcing or terminating this Agreement,
including attorney's fees.

9.5 Arbitration

The parties agree that any dispute or controversy relating to or arising out of
this Agreement shall be resolved by arbitration in the County of Albany, New
York in accordance with the then existing rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. The prevailing party in such
proceeding shall be entitled to reasonable attorneys' fees.

<PAGE>

IN WITNESS WHEREOF, the undersigned, being duly authorized representatives of
the parties hereto, hereby execute this Agreement.



        IFS INTERNATIONAL, INC.         VISA INTERNATIONAL SERVICE ASSOCIATION

                                        ("LICENSEE")

        ("IFS")

        By                              By

        Name                            Name

        Title                           Title

        Date                            Date




<PAGE>

                           PURCHASE AND SALE AGREEMENT


         Agreement made this 17th day of December, 1996, by and between TRUSTCO
BANK, NATIONAL ASSOCIATION, a banking corporation organized and existing under
the laws of the United States of America, having an address of 320 State Street,
Schenectady, New York 12305 (the "Seller"), and IFS INTERNATIONAL, INC., a New
York corporation having an office at 185 Jordan Road, Troy, New York 12180 (the
"Buyer").

                               W I T N E S E T H:

     WHEREAS, the Seller is the owner of certain a leasehold estate
("Leasehold") pursuant to a Ground Lease between Rensselaer Polytechnic
Institute, as Landlord (the "Landlord"), and PacAmOr Bearings, Inc., as Tenant,
dated May 26, 1983 ("Ground Lease") (the Seller having succeeded to the interest
of the Tenant), together with the improvements thereon ("Improvements"), located
at 300 Jordan Road, Rensselaer Technology Park, North Greenbush, New York (the
Leasehold and Improvements being referred to hereinafter as the "Premises"); and

     WHEREAS, the Seller desires to sell, and the Buyer desires to purchase, the
Premises upon the terms and conditions contained herein;

     NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, it is agreed as follows:

         1.  Sale of Premises.  Subject to the terms and conditions set
forth in this Agreement, the Buyer agrees to purchase the Premises
from the Seller and the Seller agrees to sell, transfer and assign
the Premises to the Buyer.

         2.  Purchase Price.  The total purchase price to be paid by
the Buyer to the Seller for the Premises shall be Nine Hundred
Ninety-five Thousand Dollars ($995,000.00) (the "Purchase Price"),
which shall be payable as follows:

         (a)      $20,000.00 (Initial Deposit) shall be delivered to the Seller
                  upon the Buyer's execution of this Agreement, which Initial
                  Deposit shall be non-refundable except as set forth in
                  Paragraph 9 of this Agreement;

         (b)      $30,000 (Additional Deposit) shall be delivered to the Seller
                  on February 28, 1997. Such Additional Deposit shall be
                  non-refundable except as set forth in Paragraph 9 of this
                  Agreement.


<PAGE>




         (c)      The balance of the Purchase Price, or $945,000.00 shall be
                  paid to the Seller at Closing by certified check, bank check
                  or wire transfer of funds.

                  3.  Closing.

         (a)      The closing (the "Closing") shall be held on or before March
                  14, 1996 (the "Closing Date") at the office of McNamee,
                  Lochner, Titus & Williams, P.C., 75 State Street, Albany, New
                  York, or at such other time and place as may be mutually
                  agreed upon by the parties.

         (b)      Upon payment to the Seller of the Initial Deposit, the
                  Additional Deposit and the balance of the Purchase Price
                  payable at Closing, the Seller shall transfer the Premises to
                  the Buyer by means of an Assignment of Lease, in proper form
                  for recording.

         (c)      The Seller shall transfer, and the Buyer shall accept the
                  Premises subject to all covenants, conditions,
                  restrictions and easements of record and zoning and
                  environmental protection laws, also subject to any unpaid
                  installments of street or other improvement assessments
                  payable after the date of the transfer of the Premises,
                  and any state of facts which an inspection and/or
                  accurate survey may show, provided that nothing in this
                  paragraph renders title to the Leasehold uninsurable.

         (d)      The Buyer and the Seller agree that they shall prorate, as of
                  the Closing Date, all real estates taxes and water and sewer
                  charges.

         4.  Covenants of the Seller and Buyer.

         (a)      The Buyer agrees to accept the Improvements on an "as is"
                  basis and in present condition as of the date hereof, without
                  representation or warranty from the Seller of any kind,
                  subject to reasonable wear, tear and natural deterioration
                  from the date hereof to the date of Closing.

         (b)      Prior to the Closing Date, the Seller will not encumber the
                  Premises, either in whole or in part, or enter into any
                  agreement, sub-lease or transaction or make any commitment
                  relating to the Premises, without the Buyer's prior written
                  consent.

         5. Representations of Seller. The Seller hereby represents and warrants
to Buyer as follows:

         (a)      The Seller is duly authorized by all necessary corporate
                  action to execute, deliver and perform this Agreement;

                                        2

<PAGE>




         (b)      Seller has title to the Premises free and clear of all
                  mortgages and liens, except such mortgages or liens which
                  shall be discharged or released on or prior to the Closing
                  Date;

         (c)      Seller engaged the services of Conley Associates as broker in
                  connection with the transaction contemplated herein, and
                  Seller agrees to pay any commission due as a result thereof;

         (d)      Subject to the provisions of this Agreement, the execution and
                  delivery of this Agreement do not, and, the consummation of
                  the transactions contemplated hereby will not, violate or
                  conflict with (i) the Seller's Certificate of Incorporation or
                  Bylaws; or (ii) any law or regulation or any provision of any
                  mortgage, note, lien, lease, agreement, instrument, order,
                  judgment or degree to which the Seller is a party or by which
                  it is bound;

         (e)      No portion of the Premises is subject to any pending
                  condemnation, taking or other similar proceeding by any public
                  authority, and Seller has no knowledge or grounds to believe
                  that any such condemnation, taking or similar proceeding is
                  threatened;

         (f)      The Premises are vacant and shall remain vacant during the
                  pendency of this Agreement, unless the Seller and the Buyer
                  otherwise agree in writing; and

         (g)      There are no existing agreements affecting the Premises other
                  than the Ground Lease.

         6.  Representations of Buyer.  The Buyer hereby represents and
warrants to the Seller as follows:

         (a)      The execution, delivery and performance of this
                  Agreement, the consummation of the transactions
                  contemplated hereby and compliance with the provisions of
                  this Agreement have been duly authorized by all action of
                  the Buyer and do not and will not (i) require the consent
                  of any party which has not heretofore been received
                  (except as otherwise provided in this Agreement) and will
                  not result in a breach or default under any credit
                  agreement, indenture, business agreement, mortgage, deed
                  of trust, commitment, guarantee or any other agreement or
                  instrument to which the Buyer is a party or by which the
                  Buyer may be bound or affected; or (ii) conflict with or
                  violate any existing law, rule, regulation, judgment,
                  order or decree of any government, governmental
                  instrumentality, agency or court having jurisdiction over
                  the Buyer; and

                                        3

<PAGE>




         (b)      The transactions contemplated herein were not submitted by the
                  Buyer to any broker, finder or similar person who is entitled
                  to commission, fee or like payment thereon, and the actions of
                  Buyer have not given rise to any claim by any person for a
                  commission, fee or like payment against Seller.

         (c)      The Buyer will cooperate with Seller and the Landlord to
                  obtain the Landlord's consent referred to in Paragraph 8(c)
                  below and provide any information to Seller and Landlord which
                  is reasonably necessary to obtain the said consent.

         7.  Tax Matters.

         (a)      The Seller shall pay any and all state and local real estate
                  transfer taxes due and owing in connection with the sale of
                  the Premises.

         8.  Contingencies.

         (a)      The obligations of the Buyer under this Agreement shall be
                  subject to the satisfaction, on or before the Closing Date, of
                  the following conditions:

                  (i)      All of the representations and warranties made by
                           Seller as set forth in this Agreement shall be true
                           and correct as of the Closing Date in all material
                           respects; and

                  (ii)     The Seller shall have performed, observed and
                           complied with all covenants, agreements and
                           conditions required by this Agreement to be performed
                           by Seller at or prior to the Closing commitment
                           application.

         (b)      The obligations of Seller to transfer and assign the Premises
                  to the Buyer pursuant to this Agreement shall be subject to
                  the satisfaction, on or before the Closing Date, of the
                  following conditions:

                  (i)      The representations and warranties of Buyer as set
                           forth in this Agreement shall be true and correct
                           in all material respects as of the Closing Date;

                  (ii)     The Buyer shall have duly performed and complied with
                           all agreements and conditions required by this
                           Agreement to be performed or complied with by the
                           Buyer at or before the Closing Date; and

                  (iii)    The Buyer shall have paid the full amount
                           Purchase Price to Seller on or before the Closing

                                        4

<PAGE>



                            Date in accordance with the terms and provisions of
                            this Agreement.

         (c)      Notwithstanding anything to the contrary contained in this
                  Agreement, this Agreement is contingent upon receipt by the
                  Seller of the Landlord's written consent to the transfer and
                  assignment to the Buyer of the Premises and the Seller's
                  interest therein.

         9.  Remedies.

         (a)      In the event Seller shall be unable to transfer title to
                  the Leasehold in accordance with the terms and provisions
                  of this Agreement, or if any of the conditions set forth
                  in Paragraph 8(a) and 8(c) above (provided Buyer has
                  complied with Paragraph 6(c) above) are not satisfied as
                  of the Closing Date, the Buyer may terminate this
                  Agreement and neither party shall have any liability to
                  the other.  Under such circumstances the Initial Deposit
                  and, if applicable, the Additional Deposit shall be
                  returned to the Buyer, and the Seller shall have no
                  further liability to the Buyer.

         (b)      If the Buyer shall fail to comply with its obligations under
                  this Agreement, the Seller's sole remedy shall be to keep and
                  retain the Initial Deposit and the Additional Deposit as
                  liquidated damages, and neither party shall have any further
                  rights against the other.

         10. Title Insurance and Survey. A title insurance policy and current
survey of the Leasehold, if required by the Buyer, shall be obtained at the
Buyer's expense. The Seller shall cooperate in providing any available existing
survey, abstract of title or title insurance policy information it may possess
without cost to the Buyer.

         11.  Destruction, Damage or Condemnation.

         (a)      The provisions of Section 5-1311 of the New York General
                  Obligations Law shall apply to the purchase and sale of the
                  Premises as contemplated by this Agreement in the event that
                  the Premises are destroyed or damaged.

         (b)      If the whole of the Premises shall be acquired or condemned by
                  eminent domain for any public or quasi-public use or purpose
                  (a "Taking"), then in that event, this Agreement shall
                  terminate and shall be of no further force or effect.

         (c)      In the event of a Taking of less than the whole of the
                  Premises, then, at the Buyer's option, this Agreement shall
                  (i) terminate and shall be of no further force or

                                        5

<PAGE>



                  effect whatsoever; or (ii) cease and expire with respect only
                  to the portion of the Premises so taken, yet all other terms
                  and conditions contained herein shall remain in full force and
                  effect, so long as (x) the Premises may continue to be used in
                  compliance with applicable zoning laws and regulations; and
                  (y) the Seller shall assign the proceeds of any condemnation
                  award to the Buyer.

         12. Condition of Premises. The Buyer does hereby acknowledge,
represent, warrant and covenant for the benefit of the Seller that:

         12.1. Disclaimers.

         (a)      The Buyer is expressly purchasing the Premises in its
                  existing condition "AS IS, WHERE IS AND WITH ALL FAULTS";

         (b)      The Seller shall have no obligation to repair or correct
                  any conditions or defects or to compensate the Buyer for
                  the same;

         (c)      The Buyer hereby assumes all responsibility to inspect
                  and investigate the Premises and of all risk of adverse
                  conditions;

         (d)      The Buyer has undertaken all the physical inspections and
                  examinations of the Premises and all permits and
                  approvals, if any, related thereto, as the Buyer deems
                  necessary or appropriate, and has evaluated the
                  suitability of the Premises for the Buyer's intended use;
                  the Buyer is relying solely upon such inspections and
                  examinations and the advice and counsel of its own
                  agents, legal counsel and consultants;

         (e)      The Seller is not making and has not made any warranty or
                  representation, either express or implied, with respect
                  to the validity or accuracy of the materials or other
                  data provided to the Buyer, the physical condition of the
                  Premises, the existence or nonexistence of any permits or
                  approvals or any other aspect of all or any part of the
                  Premises, either as an inducement to the Buyer to
                  purchase the Premises or for any other purpose, and the
                  Buyer will independently verify the accuracy and
                  reliability of all such matters and items;

         (f)      The Buyer has received a complete copy of the Project Summary
                  and Proposed Investigation Work Plan concerning the Premises
                  dated November 7, 1996, prepared by C.T. Male Associates, P.C.
                  The Seller makes no acknowledgment, representation, warranty
                  or agreement of any kind regarding any hazardous substances or
                  materials, including, but not limited to, whether there has
                  been or

                                        6

<PAGE>



                  there will be escapage, seepage, leakage, spillage,
                  discharge, emission or release on, in, at or under the
                  Premises;

         (g)      The Buyer has independently determined that the
                  Purchase Price is fair; and

         (h)      By reason of all the foregoing, the Buyer shall assume the
                  full risk of any loss or damage occasioned by any fact,
                  circumstance, condition or defect pertaining to the condition
                  of the Premises.

                  Without limiting the generality of the foregoing, the Buyer
                  acknowledges that it has had adequate opportunity to become
                  fully acquainted with the nature and condition, in all
                  respects, of the Premises, the existence or availability of
                  all permits and approvals from governmental authorities, and
                  the condition and state of repair of any improvements situated
                  on the Premises.

         12.2 Hazardous Materials. The Seller has made no representations and
shall have no liability to the Buyer with respect to the condition of the soil,
the existence of nonexistence of hazardous substances or materials or
contamination, or any past use of the Premises. Notwithstanding that the Seller
has provided the Buyer with the environmental report referred to in paragraph
"13.1" of this Agreement, the Buyer has conducted or will conduct such
investigations and inspections as Buyer deems necessary and appropriate. The
Buyer acknowledges that Seller is not in any manner responsible for the presence
of hazardous substances or materials at, on, in, under or relating to the
Premises. The Buyer hereby specifically releases Seller, its shareholders,
officers, directors, employees, agents and personal representatives, their
respective heirs, successors and assigns, from any and all claims, losses,
liabilities, fines, charges, damages, injuries, penalties, response costs and
expenses of any and every kind whatsoever (whether known or unknown) relating to
the presence on, in, at or under, or the escape, seepage, leakage, spillage,
discharge, emission or release of any hazardous substances or material on, in or
at the Premises, whether occurring prior to or following the Closing. This
release shall survive the Closing.

         13.  Notices.  All notices to be given hereunder shall be in
writing and shall be personally delivered or sent by certified or
registered mail, return receipt requested, postmarked before the
required date, addressed as follows:

To Seller:                 Trustco Bank New York
                           320 State Street
                           Schenectady, New York 12305
                           Attn: George W. Wickswat
                                 Vice President

                                        7

<PAGE>



                           (518) 377-3311

With a Copy to:McNamee, Lochner, Titus & Williams, P.C.
                           75 State Street, P. O. Box 459
                           Albany, New York 12201-0459
                           Attn: Thomas P. Connolly, Esq.
                           (518) 447-3200

To Buyer:                  IFS International, Inc.
                           185 Jordan Road
                           Troy, New York 12180

With a Copy to:Harris, Beach & Wilcox
                           20 Corporate Woods Blvd.
                           Albany, New York 12211
                           Attn: Roland M. Cavalier, Esq.
                           (518) 427-9700

         14. Entire Agreement. This Agreement supersedes all prior oral or
written understandings among the parties with respect to the subject matter
herein, and contains the entire agreement among the parties. Neither this
Agreement nor any provision thereof may be changed, waived, modified or amended
orally, but only by a written instrument signed by the party against whom the
enforcement of such change, waiver, modification or amendment is sought.

         15. Binding Effect and Assignment. This Agreement is binding and shall
inure to the benefit of the parties hereto, their personal representatives,
successors and assigns; provided, however, that this Agreement may not be
assigned by the Buyer without the Seller's prior written consent, and no such
assignment shall relieve the Buyer of its obligations hereunder.

         16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.



                                    SELLER:

                                    TRUSTCO BANK, NATIONAL ASSOCIATION

                                    By: /s/ George W. Wickswat
                                        --------------------------
                                        George W. Wickswat
                                        Vice President




                                        8

<PAGE>


                                     BUYER:

                                    IFS INTERNATIONAL, INC.

                                    By: /s/ Frank Pascuito
                                        ----------------------
                                        Frank Pascuito, CEO and
                                        Chairman of the Board

                                        9


<PAGE>

                                   RENSSELAER
                                TECHNOLOGY PARK


100 Jordan Road                                                  Telephone
Troy, New York 12180                                             (518) 283-7102

January 6, 1997

Frank Pasciuto, Founder
IFS International, Inc.
185 Jordan Road
Troy, New York 12180

Re:   Tenant Renewal or Expansion

Dear Frank,

Listed below is Addendum "A" of your lease:

                                  ADDENDUM "A"

                           TENANT RENEWAL OR EXPANSION

     Provided that Tenant is not in default of any of the terms, provisions or
     conditions of this lease, Tenant shall have the option to renew the Lease
     for additional term(s).

     In the event Tenant expands into larger rental quarters adjacent to
     premises or elsewhere in the Park, Tenant may remain in this existing space
     until such time as the new quarters are available for occupancy. Should
     Tenant occupy adjacent or larger rental quarters elsewhere in the Park, an
     amendment to this lease shall be undertaken; term and rate of such Lease
     Amendment shall be negotiated.

     
It is the intent of this amendment to allow a Tenant to void the balance of the
term of their lease when, and only when, they expand within the Park. This
situation would apply regarding your proposed acquisition and move to the
Trustco (formerly PacAmor) facility at 300 Jordan Road.

Should you have any questions or concerns, please feel free to call.

Sincerely,

/s/ Michael H. Wacholder
- ------------------------
    Michael H. Wacholder
    Director


<PAGE>

                   CONSULTING AND INVESTMENT BANKING AGREEMENT

                  This Agreement is made and entered into as of the ___ day of
_____________, 1997 by and between Duke & Co., Inc., a Florida corporation
("Duke"), and IFS International, Inc., a Delaware corporation (the "Company").

                  In consideration of the mutual promises made herein and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:

                  1. Purpose. The Company hereby engages Duke for the term
specified in Paragraph 2 hereof to render consulting advice to the Company as an
investment banker relating to financial and similar matters upon the terms and
conditions set forth herein.

                  2. Term. Except as otherwise specified in Paragraph 4 hereof,
this Agreement shall be effective for a two (2) year period commencing
_________________, 1997 and ending _____________, 1999.

                  3. Duties of Duke. During the term of this Agreement, Duke
shall seek out Transactions (as hereinafter defined) on behalf of the Company
and shall furnish advice to the Company in connection with any such
Transactions.

                  4. Compensation. In consideration for the services rendered by
Duke to the Company pursuant to this Agreement (and in addition to the expenses
provided for in Paragraph 5 hereof), the Company shall compensate Duke as
follows:


<PAGE>



                           (a) The Company shall pay Duke a fee of [$4,166.67]
per month for the term of this Agreement. The aggregate sum of [$100,000] shall
be due and payable upon the execution of this Agreement.

                           (b) In the event that any Transaction occurs during
the term of this Agreement, the Company shall pay fees to Duke as follows:

       Consideration                           Fee
       -------------                           ---

$   - 0 - to $500,000                          $25,000

Above $500,000 to $5,000,000                   5% of Consideration

Above $5,000,000                               $250,000 plus 1% of the
                                               Consideration in excess of
                                               $5,000,000

                  For the purposes of this Agreement, "Consideration" shall mean
the total market value, as determined by the Company's Board of Directors on the
day of the closing of the Transaction, of stock, cash, assets and all other
property (real or personal) exchanged or received, directly or indirectly, by
the Company or any of its security holders in connection with any Transaction.
Any co-broker retained by Duke shall be paid by Duke.

                           (c) For the purposes of this Agreement, a
"Transaction" shall mean (i) any transaction introduced to the Company by Duke,
other than in the ordinary course of trade or business of the Company, whereby,
directly or indirectly, control of, or a material interest in, the Company or
any of its business or substantially all of its assets, is transferred for

                                      - 2 -

<PAGE>



Consideration, or (ii) any transaction introduced to the Company by Duke whereby
the Company acquires any other unaffiliated company or substantially all of the
assets of any other unaffiliated company or a controlling interest in any other
company (an "Acquisition").

                  In the event Duke originates, at the Company's request, a line
of credit with a lender or a corporate partner, the Company and Duke will
mutually agree on a satisfactory fee and the terms of payment of such fee. In
the event Duke introduces the Company to a joint venture partner or customer and
sales develop as a result of the introduction, the Company agrees to pay a fee
of two percent (2%) of total sales generated directly from this introduction
during the first two years following the date of the first sale. Total sales
shall mean gross receipts less any applicable refunds, returns, allowances,
credits, taxes and shipping charges and monies paid by the Company by way of
settlement or judgment arising out of claims made by or threatened against the
Company. Commission payments shall be paid on the 15th day of each third month
following the receipt of the customers' payments. In the event any adjustments
are made to the total sales after the commission has been paid, the Company
shall be entitled, at its option, to an appropriate refund or credit against
future payments under this Agreement.

                           (d) All fees to be paid pursuant to this Agreement,
except as otherwise specified, are due and payable to Duke in cash or company
check at the closing or closings of any

                                      - 3 -

<PAGE>



Transaction specified in Paragraph 4. In the event that the Consideration is
paid out over a period of time, Duke shall be paid its pro-rata portion of such
Consideration as the Company is paid. In the event that this Agreement shall not
be renewed or if terminated for any reason, notwithstanding any such non-renewal
or termination, Duke shall be entitled to a full fee as provided under
Paragraphs 4 and 5 hereof, for any Transaction for which the discussions were
initiated with a third party at the request of the Company during the term of
this Agreement and which is consummated within a period of twelve months after
non-renewal or termination of this Agreement. Nothing herein shall impose any
obligation on the part of the Company to enter into any Transaction.

                  5. Expenses of Duke. In addition to the fees payable hereunder
and regardless of whether any Transaction set forth in Paragraph 4 hereof is
proposed or consummated, the Company shall reimburse Duke for Duke's reasonable
travel and out-of-pocket expenses incurred in connection with the services
performed by Duke pursuant to this Agreement and at the request of the Company,
including without limitation, hotels, food and associated expenses and
long-distance telephone calls.

                  6. Liability of Duke.

                           (1) The Company acknowledges that all opinions and
advice (written or oral) given by Duke to the Company in connection with Duke's
engagement are intended solely for the benefit and use of the Company in
considering the Transaction to

                                      - 4 -

<PAGE>



which they relate, and the Company agrees that no person or entity other than
the Company shall be entitled to make use of or rely upon the advice of Duke to
be given hereunder, and no such opinion or advice shall be used for any other
purpose or reproduced, disseminated, quoted or referred to at any time, in any
manner or for any purpose, nor may the Company make any public references to
Duke, or use Duke's name in any annual reports or any other reports or releases
of the Company without Duke's prior written consent or as required by law.

                           (2) The Company acknowledges that Duke makes no
commitment whatsoever as to making a market in the Company's securities or to
recommending or advising its clients to purchase the Company's securities.
Research reports or corporate finance reports that may be prepared by Duke will,
when and if prepared, be done solely on the merits or judgement of analysis of
Duke or any senior corporate finance personnel of Duke.

                  7. Duke's Services to Others. The Company acknowledges that
Duke or its affiliates are in the business of providing financial services and
consulting advice to others. Nothing herein contained shall be construed to
limit or restrict Duke in conducting such business with respect to others, or in
rendering such advice to others, except that Duke will not provide services to
others when such services may materially and adversely affect the Company.

                                      - 5 -

<PAGE>



                  8. Company Information.

                           (a) The Company recognizes and confirms that, in
advising the Company and in fulfilling its engagement hereunder, Duke will use
and rely on data, material and other information furnished to Duke by the
Company. The Company acknowledges and agrees that in performing its services
under this engagement, Duke may rely upon the data, material and other
information supplied by the Company without independently verifying the
accuracy, completeness or veracity of same.

                           (b) Except as required by applicable law, Duke
shall keep confidential all non-public information provided to it by the
Company, and shall not disclose such information to any third party without the
Company's prior written consent, other than such of its employees and advisors
as Duke reasonably determines to have a need to know, provided that Duke shall
instruct such employees and advisors to keep such information confidential and
Duke shall be liable for any breach of such confidentiality. In the event that
Duke is required by subpoena to disclose such information, the Company shall be
afforded an opportunity to seek an order preserving the confidentiality of such
information.

                  9. Indemnification.

                           (a)  The Company shall indemnify and hold Duke
harmless against any and all liabilities, claims, lawsuits, including any and
all awards and/or judgments to which it may become subject under the Securities
Act of 1933, as amended (the

                                      - 6 -

<PAGE>



"1933 Act"), the Securities Exchange Act of 1934, as amended (the "1934 Act") or
any other federal or state statute, at common law or otherwise, insofar as said
liabilities, claims and lawsuits (including costs, expenses, awards and/or
judgments) arise out of or are in connection with the services rendered by Duke
or any transactions in connection with this Agreement, except for any
liabilities, claims and lawsuits (including awards and/or judgments), arising
out of acts or omissions of Duke. In addition, the Company shall also indemnify
and hold Duke harmless against any and all costs and expenses, including
reasonable counsel fees, incurred relating to the foregoing.

                  Duke shall give the Company prompt notice of any such
liability, claim or lawsuit which Duke contends is the subject matter of the
Company's indemnification and the Company thereupon shall be granted the right
to take any and all necessary and proper action, at its sole cost and expense,
with respect to such liability, claim and lawsuit, including the right to
settle, compromise and dispose of such liability, claim or lawsuit, excepting
therefrom any and all proceedings or hearings before any regulatory bodies
and/or authorities and provided that no such settlement shall be made without
the prior consent of Duke.

                  Duke shall indemnify and hold the Company harmless against any
and all liabilities, claims and lawsuits, including any and all awards and/or
judgments to which it may become subject under the 1933 Act, the 1934 Act or any
other federal or state statute, at common law or otherwise, insofar as said

                                      - 7 -

<PAGE>



liabilities, claims and lawsuits (including costs, expenses, awards and/or
judgments) arise out of or are in connection with the services rendered by Duke
or any transactions in connection with this Agreement. In addition, Duke shall
also indemnify and hold the Company harmless against any and all costs and
expenses, including reasonable counsel fees, incurred relating to the foregoing.

                  The Company shall give Duke prompt notice of any such
liability, claim or lawsuit which the Company contends is the subject matter of
Duke's indemnification and Duke thereupon shall be granted the right to take any
and all necessary and proper action, at its sole cost and expense, with respect
to such liability, claim or lawsuit, including the right to settle, compromise
or dispose of such liability, claim or lawsuit, excepting therefrom any and all
proceedings or hearings before any regulatory bodies and/or authorities and
provided that no such settlement shall be made without the prior consent of the
Company.

                           (b)  In order to provide for just and equitable
contribution in any case in which (i) any person entitled to indemnification
under this Paragraph 9 makes claim for indemnification pursuant hereto but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that

                                      - 8 -

<PAGE>



this Paragraph 9 provides for indemnification in such case, or (ii) contribution
may be required on the part of any such person in circumstances for which
indemnification is provided under this Paragraph 9, then, and in each such case,
the Company and Duke shall contribute to the aggregate losses, claims, damages
or liabilities to which they may be subject (after any contribution from others)
in such proportion taking into consideration the relative benefits received by
each party from the transactions undertaken in connection with this Agreement
(taking into account the portion of the proceeds realized by each), the parties'
relative knowledge and access to information concerning the matter with respect
to which the claim was assessed, the opportunity to correct and prevent any
statement or omission and other equitable considerations appropriate under the
circumstances; and provided, that, in any such case, no person guilty of a
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.

                  Within fifteen (15) days after receipt by any party to this
Agreement (or its representative) of notice of the commencement of any action,
suit or proceeding, such party will, if a claim for contribution in respect
thereof is to be made against another party (the "Contributing Party"), notify
the Contributing Party of the commencement thereof, but the omission so to
notify the Contributing Party will not relieve it from any

                                      - 9 -

<PAGE>



liability which it may have to any other party other than for contribution
hereunder. In case any such action, suit or proceeding is brought against any
party, and such party notifies a Contributing Party or his or its representative
of the commencement thereof within the aforesaid fifteen (15) days, the
Contributing Party will be entitled to participate therein with the notifying
party and any other Contributing Party similarly notified. Any such Contributing
Party shall not be liable to any party seeking contribution on account of any
settlement of any claim, action or proceeding effected by such party seeking
contribution without the written consent of the Contributing Party. The
indemnification provisions contained in this Paragraph 9 are in addition to any
other rights or remedies which either party hereto may have with respect to the
other or hereunder.

                  10. Duke an Independent Contractor. Duke shall perform its
services hereunder as an independent contractor and not as an employee of the
Company or an affiliate thereof. The parties hereto expressly understand and
agree that Duke shall have no authority to act for, represent or bind the
Company or any affiliate thereof in any manner, except as may be agreed to
expressly by the Company in writing from time to time.

                  11.      Miscellaneous.

                           (a) This Agreement between the Company and Duke
constitutes the entire agreement and understanding of the parties hereto, and
supersedes any and all previous agreements and

                                     - 10 -

<PAGE>



understandings, whether oral or written, between the parties with respect to the
matters set forth herein.

                           (b)  All communications hereunder, except as
herein otherwise specifically provided, shall be in writing and, if sent to
Duke, shall be mailed, delivered or telegraphed and confirmed to Duke & Co.,
Inc., 909 Third Avenue, New York, New York 10022, Attention: President, with a
copy to Zimet, Haines, Friedman & Kaplan, 460 Park Avenue, New York, New York
10022, Attention: James Martin Kaplan, Esq., and if to the Company, shall be
mailed, delivered or telegraphed and confirmed to IFS International, Inc.,
Rensselaer Technology Park, 185 Jordan Road, Troy, New York 12180, Attention:
Chairman, with a copy to Parker Duryee Rosoff & Haft, 529 Fifth Avenue, New
York, New York 10017, Attention: Michael D. DiGiovanna, Esq.

                           (c) This Agreement shall be binding upon and inure to
the benefit of each of the parties hereto and their respective successors, legal
representatives and assigns.

                           (d) This Agreement may be executed in any number of
counterparts, each of which together shall constitute one and the same original
document.

                           (e) No provision of this Agreement may be amended,
modified or waived, except in a writing signed by all of the parties hereto.

                           (f) This Agreement shall be construed in accordance
with and governed by the laws of the State of New York, without giving effect to
its conflict of law principles.

                                     - 11 -

<PAGE>



The parties hereby agree that any dispute which may arise between them arising
out of or in connection with this Agreement shall be adjudicated before a court
located in New York City, and they hereby submit to the exclusive jurisdiction
of the courts of the State of New York located in New York, New York and of the
federal courts in the Southern District of New York with respect to any action
or legal proceeding commenced by any party, and irrevocably waive any objection
they now or hereafter may have respecting the venue of any such action or
proceeding brought in such a court or respecting the fact that such court is an
inconvenient forum, relating to or arising out of this Agreement, and consent to
the service of process in any such action or legal proceeding by means of
registered or certified mail, return receipt requested, in care of the address
set forth in Paragraph 11(b) hereof.

                                     - 12 -

<PAGE>


                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.

                                             DUKE & CO., INC.



                                             By:_________________________
                                                Name:
                                                Title:



                                             IFS INTERNATIONAL, INC.



                                             By:_________________________
                                                Name:
                                                Title:


                                     - 13 -


<PAGE>


               CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS





         We hereby consent to the use in this Registration Statement (Amendment
No. 1) on Form SB-2 of our report dated July 17, 1996, except for the second
paragraph of Note 14, for which the date is August 6, 1996 and Note 15, for
which the date is January 6, 1997, relating to the consolidated financial
statements of IFS International, Inc. and subsidiary, and to the reference to
our Firm under the caption "Experts" in the Prospectus.








                                       /s/ URBACH KAHN & WERLIN PC













Albany, New York
January 15, 1997



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