DISTRIBUTION AGREEMENT



         DISTRIBUTION AGREEMENT, made this 6th day of August, 2001 between

Equitex, Inc., a Delaware corporation (the "Company") and Equitex 2000, Inc., a

Delaware corporation ("E2000")



                                   WITNESSETH:



         WHEREAS, on June 22, 2001, a special meeting of stockholders,

stockholders of the Company approved the distribution by they Company of all its

assets and liabilities to E2000 and the distribution by the Company of all the

outstanding shares of E2000 common stock to the stockholders of the Company on

the basis of one share of common stock of E2000 for each share of common stock

of the Company (the "Distribution");



         WHEREAS, at the special meeting of stockholders, the Company's

stockholders approved a proposal to acquire all the outstanding capital stock of

Key Financial Systems and Nova Financial Systems, Inc. ("Key/Nova");



         WHEREAS, E2000 a wholly-owned subsidiary of the Company.



         NOW, THEREFORE, in consideration of the mutual covenants and agreements

contained herein, and certain other good and valuable consideration, the receipt

and sufficiency of which is hereby acknowledged, the parties hereto covenant and

agree as follows:



                                    ARTICLE 1



                          ACTIONS PRIOR TO DISTRIBUTION



         1.1 TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES. Subject to the

conditions set forth in Article 3, on or before the Distribution Date, as

defined in Section 2.1, below, the Company shall take all necessary action to

sell, assign, transfer and distribute to E2000 all of its assets and E2000

agrees to assume, pay, perform or discharge in due course all of the Company's

liabilities as they exist immediately prior to the Distribution Date. In

exchange for the assumption of certain liabilities of the Company, E2000 will

receive 78,339 shares of the Company's common stock and a warrant exercisable

for five years to purchase up to 78,339 shares of the Company's common stock at

an exercise price of $5.76 per share.



         1.2 ISSUANCE OF STOCK. Prior to the Distribution Date, the Company and

E2000 shall take all steps necessary so that the number of shares of E2000

common stock, $.01 par value per share (the "E2000 Common Stock"), outstanding

and held by the Company shall equal the number of shares of Equitex Common

Stock, $.02 par value per share ("Equitex Common Stock"), outstanding on the

Record Date, as defined in Section 2.1, below.



         1.3 TRANSFERS NOT EFFECTED PRIOR TO THE DISTRIBUTION. To the extent

that any transfers contemplated by this Article 1 shall not have been

consummated by the Distribution Date, the Company and E2000 shall cooperate to

effect such transfers as promptly following the Distribution



                                       -1-

{PAGE}



Date as practicable. Nothing herein shall be deemed to require the transfer of

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