PREFERRED STOCK SUBSCRIPTION AGREEMENT



                           Dated as of July 21 , 2001



                                  By and Among



                     THE INVESTOR LISTED ON EXHIBIT A HERETO



                                       and



                      INTERNATIONAL DISPENSING CORPORATION







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





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                     PREFERRED STOCK SUBSCRIPTION AGREEMENT

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



     PREFERRED STOCK SUBSCRIPTION AGREEMENT (this "Agreement") dated as of July

21, 2001, by and among the Investor listed on Exhibit A hereto (the "Investor"),

and INTERNATIONAL DISPENSING CORPORATION, a Delaware corporation (the

"Company").





                              W I T N E S S E T H :

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



     WHEREAS, the Investor desires to subscribe for, and the Company desires to

issue up to an aggregate of 1,500 shares of the Company's Series D Redeemable

Convertible Preferred Stock, par value $.001 per share (the "Preferred Stock")

for the per share purchase price of $2,000 on the terms and subject to the

conditions set forth herein.





                NOW, THEREFORE, IT IS AGREED:





                                    ARTICLE I

          ISSUANCE OF STOCK AND PAYMENT OF SUBSCRIPTION PRICE; CLOSING

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



                1.1 ISSUANCE OF STOCK . Subject to the terms and conditions set

forth in this Agreement, the Company agrees to sell to the Investor, and the

Investor subscribes for and agrees to purchase for $2,000 per Share, 1,500

shares of Preferred Stock (the "Shares").



                1.2 CLOSING DATES.



                    (a) The purchase and sale of the Shares shall occur at a

closing (the "Closing") at such time as shall be determined by the Company,

subject to the conditions set forth in this Agreement. The Closing shall occur

within three business days after the execution of this Agreement by the Company

and the Investor. The date of the Closing is hereinafter referred to as the

"Closing Date." On the Closing Date the Investor shall purchase One Thousand

Five Hundred (1,500) Shares and shall pay to the Company by certified check or

wire transfer of immediately available funds, THREE MILLION DOLLARS

($3,000,000).



                1.3 LEGENDS. From and after the date hereof, all share

certificates representing Shares, or shares of the Common Stock into which the

Shares are convertible ("Conversion Shares"), shall bear a legend which shall

state as follows:



                       "THE SECURITIES REPRESENTED BY THIS

                CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE



                                       2

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                SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR

                INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE

                SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE

                EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED

                THERETO OR AN OPINION OF COUNSEL FOR THE COMPANY THAT SUCH

                REGISTRATION IS NOT REQUIRED UNDER SUCH ACT."





                                  ARTICLE II

                REPRESENTATIONS AND COVENANTS OF THE COMPANY

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



           2.   REPRESENTATIONS AND COVENANTS OF THE COMPANY. The Company

hereby represents, warrants and agrees as follows:



                2.1  EXISTENCE AND GOOD STANDING. The Company is a corporation

duly organized, validly existing and in good standing under the laws of the

State of Delaware. The Company has the requisite corporate power and authority

to own, lease and operate its properties and to carry on its business as now

being conducted. The Company is duly qualified or licensed to do business and is

in good standing in each jurisdiction in which the character or location of the

properties owned, leased or operated by the Company or the nature of the

business conducted by the Company makes such qualification or license necessary,

except where the failure to be so duly qualified or licensed would not have a

material adverse effect on the business, operations, financial condition or

results of operations of the Company (a "Material Adverse Effect").



                2.2  CAPITAL STOCK. The Company has an authorized capitalization

consisting of 40,000,000 shares of common stock, par value $.001 per share (the

"Common Stock") and 2,000,000 shares of Preferred Stock, par value $.001 per

share. Of the Common Stock, 9,728,396 shares are issued and outstanding. Of the

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