NEOMEDIA TECHNOLOGIES, INC.
                         NEOMEDIA TELECOM SERVICES INC.
                          2201 Second Street, Suite 402
                           Fort Meyers, Florida 33901

                                                            July 26, 2005

Mr. Guy Fietz
President and Chief Executive Officer
BSD Software, Inc.
8500 MaCleod Trail, S.E., Suite 300E
Calgary, Alberta
Canada T2H 2N1

            Re:   Extension of Outside Date in the Agreement and Plan of Merger
                  --------------------------------------------------------------

Dear Mr. Fietz:

      This letter  agreement  amends  particular  terms of that of that  certain
Agreement and Plan of Merger (the  "Agreement"),  dated as of December 21, 2004,
by and among  NeoMedia  Technologies,  Inc., a Delaware  corporation  ("Buyer"),
NeoMedia Telecom Services,  Inc., a Nevada  corporation  ("Merger Sub"), and BSD
Software,  Inc., a Florida  corporation (the "Company").  Capitalized  terms not
otherwise  defined  herein  shall  have  the  meanings  ascribed  to them in the
Agreement. The Agreement is hereby amended in the following respects:

      Section  8.1.(b) is hereby  amended to delete the  reference to "March 31,
2005" and to replace it with  "October 31,  2005." As a result of the  foregoing
change,  (i) Buyer or the Company shall have the absolute right to terminate the
Agreement,  and the  Merger  would  thereby be  abandoned,  if the Merger is not
consummated  on or before  October  31,  2005,  unless  such date is extended by
mutual consent of the parties to the  Agreement;  and (ii) all references to the
term "Outside Date" which is defined in Section  8.1.(b) of the Agreement  shall
hereinafter refer to October 31, 2005 instead of March 31, 2005.

      This letter agreement may be executed in any number of counterparts,  each
of which shall be deemed an original, and both of which shall constitute one and
the same  instrument.  This letter  agreement  shall be accepted,  effective and
binding, for all purposes, when the parties shall have signed and transmitted to
each other, by telecopier or otherwise,  copies of this letter agreement. In the
event of any litigation arising hereunder, the prevailing party or parties shall
be entitled to recover its reasonable  attorneys'  fees and court costs from the
other party or parties,  including  the costs of bringing  such  litigation  and
collecting upon any judgments.  This letter  agreement shall be binding upon and
shall  inure to the benefit of the parties  hereto and their  respective  heirs,
executors, legal representatives, trustees, successors and assigns.

<PAGE>

      If the foregoing  correctly sets forth the terms of our agreement,  please
so signify by signing this letter  agreement on the line provided below for such
purpose and  transmitting to each of us a signed copy of this letter  agreement,
whereupon this letter agreement will constitute a binding agreement among us.

                                        Very truly yours,


                                        NEOMEDIA TECHNOLOGIES, INC.

                                        By: /s/ Charles T. Jensen
                                            ------------------------------------
                                                Charles T. Jensen
                                                President, CEO, COO & Director


                                        NEOMEDIA TELECOM SERVICES, INC.

                                        By: /s/ David A. Dodge
                                            ------------------------------------
                                                David A. Dodge
                                                Secretary & Treasurer

ACKNOWLEDGED, AGREED TO AND ACCEPTED THIS 26th DAY OF JULY, 2005:

BSD SOFTWARE, INC.


By: /s/ Guy Fietz
    ---------------------------------
        Guy Fietz, President & CEO


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