Document:

REGISTRATION RIGHTS AGREEMENT

            This Registration Rights Agreement (this "Agreement") is made and
entered into as of January 3, 2005, by and among Zone4Play, Inc., a Nevada
corporation (the "Company"), and each of the purchasers signatory hereto (each
such purchaser, a "Purchaser" and collectively, the "Purchasers").

            This Agreement is made pursuant to the Securities Purchase
Agreement, dated as of the date hereof, by and among the Company and the
Purchasers (the "Purchase Agreement").

            The Company and the Purchasers intending to be legally bound, hereby
agree as follows:

      1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Purchase Agreement shall have the meanings given such
terms in the Purchase Agreement. As used in this Agreement, the following terms
shall have the following meanings:

            "Advice" shall have the meaning set forth in Section 6(c).

            "Effectiveness Date" means, with respect to the Registration
      Statements required to be filed hereunder, the earlier of (a) the day one
      hundred twenty (120) calendar days following the date of the Purchase
      Agreement and (b) the Trading Day following the date, on which the Company
      is notified by the Commission that such Registration Statement will not be
      reviewed or is no longer subject to further review and comments; provided,
      however, that if a Holder fails to comply with the provisions of Section
      3(k), then, as to such Holder only, the Effectiveness Date with respect to
      such Holder's Registrable Securities only shall be extended until ninety
      (90) days following the date of receipt by the Company of such required
      information.

            "Effectiveness Period" shall have the meaning set forth in Section
      2(a).

            "Event" shall have the meaning set forth in Section 2(b).

            "Event Date" shall have the meaning set forth in Section 2(b).

            "Filing Date" means, with respect to the Registration Statements
      required to be filed hereunder, the day forty five (45) calendar days
      following the date of the Purchase Agreement.

            "Holder" or "Holders" means the holder or holders, as the case may
      be, from time to time of Registrable Securities.

            "Indemnified Party" shall have the meaning set forth in Section
      5(c).

            "Indemnifying Party" shall have the meaning set forth in Section
      5(c).

            "Losses" shall have the meaning set forth in Section 5(a).

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            "Proceeding" means an action, claim, suit, investigation or
      proceeding (including, without limitation, an investigation or partial
      proceeding, such as a deposition).

            "Prospectus" means the prospectus included in the applicable
      Registration Statement (including, without limitation, a prospectus that
      includes any information previously omitted from a prospectus filed as
      part of an effective registration statement in reliance upon Rule 430A
      promulgated under the Securities Act), as amended or supplemented by any
      prospectus supplement, with respect to the terms of the offering of any
      portion of the Registrable Securities covered by such Registration
      Statement, and all other amendments and supplements to such Prospectus,
      including post-effective amendments, and all material incorporated by
      reference or deemed to be incorporated by reference in such Prospectus.

            "Registrable Securities" means all shares of Common Stock issued to
      the Purchasers with respect to the Common Stock purchased pursuant to the
      Purchase Agreement or which may be issuable upon any adjustment pursuant
      to any stock split, dividend or other distribution, recapitalization or
      similar event with respect to the foregoing.

            "Registration Statement" means a registration statement required to
      be filed hereunder, including (in each case) the Prospectus, amendments
      and supplements to such registration statement or Prospectus, including
      pre- and post-effective amendments, all exhibits thereto, and all material
      incorporated by reference or deemed to be incorporated by reference in
      such registration statement.

            "Rule 415" means Rule 415 promulgated by the Commission pursuant to
      the Securities Act, as such Rule may be amended from time to time, or any
      similar rule or regulation hereafter adopted by the Commission having
      substantially the same purpose and effect as such Rule.

            "Rule 424" means Rule 424 promulgated by the Commission pursuant to
      the Securities Act, as such Rule may be amended from time to time, or any
      similar rule or regulation hereafter adopted by the Commission having
      substantially the same purpose and effect as such Rule.

            "Shares" means the shares of Common Stock to be issued pursuant to
      the Purchase Agreement.

      2. Registration.

            a. On or prior to the applicable Filing Date, the Company shall
      prepare and file with the Commission a Registration Statement covering the
      resale of all of the Registrable Securities not yet registered that are
      held by Holders that have complied with the provisions of Section 3(k)
      prior to such date for an offering to be made on a continuous basis
      pursuant to Rule 415. Such Registration Statement required hereunder shall
      be on Form SB-2 (except if the Company is not then eligible to register
      for resale the Registrable Securities on Form SB-2, in which case such
      Registration Statement shall be on another appropriate form herewith).
      Subject to the terms of this Agreement, the Company shall use its best
      efforts to cause such Registration Statement to be declared effective
      under the Securities Act as promptly as possible after the filing thereof,
      but in any event not later than the applicable Effectiveness Date, and
      shall use its best efforts to keep such Registration Statement
      continuously effective under the Securities Act until the date when all
      Registrable Securities covered by such Registration Statement have been
      sold or may be sold without volume restrictions pursuant to Rule 144(k) as
      determined by the counsel to the Company pursuant to a written opinion
      letter to such effect, addressed and acceptable to the Company's transfer
      agent and the affected Holders, to the extent that a Holder still holds
      Registrable Securities (the "Effectiveness Period"). Each Holder
      acknowledges and -------------------- agrees that the Company shall be
      permitted to exclude such Holder's Registrable Securities from a
      Registration Statement if such Holder fails to timely comply with the
      Company's request for information pursuant to Section 3(k); provided if
      such Holder provides such information prior to the filing of such
      Registration Statement the Company shall use commercially reasonable
      efforts to include such Registrable Securities on such Registration
      Statement; provided further that this provision does not otherwise waive
      the Company's obligation to register such Registrable Securities pursuant
      to the terms hereunder upon such Holder providing the Company with the
      required information.

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            b. If: (i) a Registration Statement is not filed on or prior to the
      applicable Filing Date (For the avoidance of doubt, if the Company files a
      Registration Statement without affording the Holder or Holders referenced
      in such Registration Statement the opportunity to review and comment on
      the same as required by Section 3(a), the Company shall not be deemed to
      have satisfied this clause (i)), or (ii) the Company fails to file with
      the Commission a request for acceleration in accordance with Rule 461
      promulgated under the Securities Act, within no more than five (5) Trading
      Days of the date that the Company is notified (orally or in writing,
      whichever is earlier) by the Commission that a Registration Statement will
      not be "reviewed," or is not subject to further review, or (iii) prior to
      the date when a Registration Statement is first declared effective by the
      Commission, the Company fails to file a pre-effective amendment and
      otherwise respond in writing to comments made by the Commission in respect
      of such Registration Statement within thirty (30) calendar days after the
      receipt of comments by or notice from the Commission that such amendment
      is required in order for such Registration Statement to be declared
      effective, or (iv) a Registration Statement filed or required to be filed
      hereunder is not declared effective by the Commission on or before the
      applicable Effectiveness Date, or (v) after a Registration Statement is
      first declared effective by the Commission, it ceases for any reason to
      remain continuously effective as to all Shares for which it is required to
      be effective, or the Holders are not permitted to utilize a Prospectus
      therein to resell such Shares, for in any such case fifteen (15)
      consecutive Trading Days but no more than an aggregate of twenty-five (25)
      Trading Days during any twelve (12) month period (which need not be
      consecutive Trading Days) provided that any days during which a
      Registration Statement ceases to be effective due to the filing of a
      post-effective amendment thereto by the Company at the request of the
      Holders in order to amend the Plan of Distribution (as provided for in
      Section 2(a)) shall not be counted towards such fifteen (15) or
      twenty-five (25) Trading Day periods provided the Company uses
      commercially reasonable efforts to cause such post-effective amendment to
      be declared effective (any such failure or breach being referred to as an
      "Event," and for ----- purposes of clause (i) or (iv) the date on which
      such Event occurs, or for purposes of clause (ii) the date on which such
      five (5) Trading Day period is exceeded, or for purposes of clause (iii)
      the date which such thirty (30) calendar days is exceeded, or for purposes
      of clause (v) the date on which such fifteen (15) or twenty-five (25)
      Trading Day period, as applicable, is exceeded being referred to as "Event
      Date"), then in addition to any other rights the Holders may have
      hereunder or under applicable ----------- law: (x) on each such Event Date
      the Company shall pay to each Holder an amount in cash, as partial
      liquidated damages and not as a penalty, equal to 1.5% of the aggregate
      purchase price paid by such Holder pursuant to the Purchase Agreement for
      any Shares then held by such Holder. If the Company fails to pay any
      liquidated damages pursuant to this Section 2(b) in full within seven (7)
      business days after the date payable, the Company will pay interest
      thereon at a rate of 12% per annum (or such lesser maximum amount that is
      permitted to be paid by applicable law) to the Holder, accruing daily from
      the date such liquidated damages are due until such amounts, plus all such
      interest thereon, are paid in full. The liquidated damages pursuant to the
      terms hereof shall apply on a daily pro-rata basis for any portion of a
      month prior to the cure of an Event. Notwithstanding anything herein to
      the contrary, the Company agrees and acknowledges that any extensions to
      the Filing Date or Effectiveness Date on account of a Holder failing to
      timely comply with Section 3(k) relate solely to that Holder and in no way
      effect the Filing Date and Effectiveness Date under this Agreement as they
      relate to any other Holder.

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<PAGE>

      3. Registration Procedures

      In connection with the Company's registration obligations hereunder, the
Company shall:

            a. Not less than five (5) Trading Days prior to the filing of a
      Registration Statement or any related Prospectus or any amendment or
      supplement thereto, the Company shall, (i) furnish to the Holders owning
      Registrable Securities registered under such Registration Statement copies
      of all such documents proposed to be filed (including documents
      incorporated or deemed incorporated by reference to the extent requested
      by such Person) which documents will be subject to the review of such
      Holders, and (ii) cause its officers and directors, counsel and
      independent certified public accountants to respond to such inquiries as
      shall be necessary, in the reasonable opinion of respective counsel to
      conduct a reasonable investigation within the meaning of the Securities
      Act. The Company shall not file any such Registration Statement or any
      such Prospectus or any amendments or supplements thereto to which the
      Holders of a majority of the Registrable Securities registered thereunder
      shall reasonably object in good faith, provided that the Company is
      notified of such objection in writing no later than five (5) Trading Days
      after such Holders have been so furnished copies of such documents.

            b. (i) Prepare and file with the Commission such amendments,
      including post-effective amendments, to a Registration Statement and a
      Prospectus used in connection therewith as may be necessary to keep such
      Registration Statement continuously effective as to the applicable
      Registrable Securities for the applicable Effectiveness Period and prepare
      and file with the Commission such additional Registration Statements in
      order to register for resale under the Securities Act all of the
      Registrable Securities; (ii) cause the related Prospectus to be amended or
      supplemented by any required Prospectus supplement, and as so supplemented
      or amended to be filed pursuant to Rule 424; (iii) respond as promptly as
      reasonably possible to any comments received from the Commission with
      respect to such Registration Statement or any amendment thereto and, as
      promptly as reasonably possible, upon request, provide the Holders true
      and complete copies of all correspondence from and to the Commission
      relating to such Registration Statement; and (iv) comply in all material
      respects during the applicable Effectiveness Period with the provisions of
      the Securities Act and the Exchange Act with respect to the disposition of
      all Registrable Securities covered by such Registration Statement during
      the applicable period in accordance with the Holders' intended methods of
      disposition set forth in such Registration Statement as so amended or in
      such Prospectus as so supplemented.

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<PAGE>

            c. Notify the Holders of Registrable Securities to be sold as
      promptly as reasonably possible (i)(A) when a Prospectus or any Prospectus
      supplement or post-effective amendment to a Registration Statement is
      proposed to be filed; (B) when the Commission notifies the Company whether
      there will be a "review" of a Registration Statement and whenever the
      Commission comments in writing on a Registration Statement (the Company
      shall upon request provide true and complete copies thereof and all
      written responses thereto to each of the Holders); and (C) with respect to
      a Registration Statement or any post-effective amendment, when the same
      has become effective; (ii) of any request by the Commission or any other
      Federal or state governmental authority during the period of effectiveness
      of a Registration Statement for amendments or supplements to such
      Registration Statement or Prospectus or for additional information; (iii)
      of the issuance by the Commission or any other federal or state
      governmental authority of any stop order suspending the effectiveness of a
      Registration Statement covering any or all of such Registrable Securities
      or the initiation of any Proceedings for that purpose; (iv) of the receipt
      by the Company of any notification with respect to the suspension of the
      qualification or exemption from qualification of any of the Registrable
      Securities for sale in any jurisdiction, or the initiation or threatening
      of any Proceeding for such purpose; and (v) of the occurrence of any event
      of which the Company has knowledge as a result of which a Prospectus, as
      then in effect, contains any untrue statement of a material fact or omits
      to state a material fact required to be stated therein or necessary to
      make the statements therein, in light of the circumstances under which
      they were made, not misleading.

            d. Use commercially reasonable efforts to avoid the issuance of, or,
      if issued, obtain the withdrawal of (i) any order suspending the
      effectiveness of a Registration Statement, or (ii) any suspension of the
      qualification (or exemption from qualification) of any of the Registrable
      Securities for sale in any jurisdiction, as promptly as reasonably
      practicable.

            e. Furnish to each Holder, without charge, at least one (1)
      conformed copy of each Registration Statement registering Registrable
      Securities held by such Holder and each amendment thereto, including
      financial statements and schedules, all documents incorporated or deemed
      to be incorporated therein by reference to the extent requested in writing
      by such Person, and all exhibits to the extent requested by such Person in
      writing (including those previously furnished or incorporated by
      reference) promptly after the filing of such documents with the
      Commission.

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<PAGE>

            f. Promptly deliver to each Holder, without charge, as many copies
      of the Prospectus or Prospectuses (including each form of prospectus) and
      each amendment or supplement thereto as such Persons may reasonably
      request in connection with resales by the Holder of Registrable
      Securities. Subject to the terms of this Agreement, the Company hereby
      consents to the use of such Prospectus and each amendment or supplement
      thereto by each of the selling Holders in connection with the offering and
      sale of the Registrable Securities covered by such Prospectus and any
      amendment or supplement thereto, except after the giving of any notice
      pursuant to Section 3(c).

            g. Prior to any resale of Registrable Securities by a Holder, use
      its commercially reasonable efforts to register or qualify or cooperate
      with the selling Holders in connection with the registration or
      qualification (or exemption from the Registration or qualification) of
      such Registrable Securities for the resale by the Holder under the
      securities or Blue Sky laws of such jurisdictions within the United States
      as any Holder reasonably requests in writing, to keep each such
      registration or qualification (or exemption therefrom) effective during
      the Effectiveness Period and to do any and all other acts or things
      reasonably necessary to enable the disposition in such jurisdictions of
      the Registrable Securities covered by the applicable Registration
      Statement; provided, that the Company shall not be -------- required to
      qualify generally to do business in any jurisdiction where it is not then
      so qualified, subject the Company to any material tax in any such
      jurisdiction where it is not then so subject or file a general consent to
      service of process in any such jurisdiction.

            h. If requested in writing by the Holders, cooperate with the
      Holders to facilitate the timely preparation and delivery of certificates
      representing Registrable Securities to be delivered to a transferee
      pursuant to the applicable Registration Statement, which certificates
      shall be free, to the extent permitted by the Purchase Agreement, of all
      restrictive legends, and to enable such Registrable Securities to be in
      such denominations and registered in such names as any such Holders may
      request.

            i. Upon the occurrence of any event contemplated by Section 3(c)(v),
      as promptly as reasonably possible, prepare a supplement or amendment,
      including a post-effective amendment, to the applicable Registration
      Statement or a supplement to the related Prospectus or any document
      incorporated or deemed to be incorporated therein by reference, and file
      any other required document so that, as thereafter delivered, neither such
      Registration Statement nor the Prospectus included therein will contain an
      untrue statement of a material fact or omit to state a material fact
      required to be stated therein or necessary to make the statements therein,
      in light of the circumstances under which they were made, not misleading.
      If the Company notifies the Holders in accordance with clauses (ii)
      through (v) of Section 3(c) above to suspend the use of any Prospectus
      until the requisite changes to such Prospectus have been made, then the
      Holders shall suspend use of such Prospectus. The Company will use its
      commercially reasonable efforts to ensure that the use of a Prospectus may
      be resumed as promptly as is practicable. The Company shall be entitled to
      exercise its right under this Section 3(i) to suspend the availability of
      a Registration Statement and the applicable Prospectus, subject to the
      payment of liquidated damages pursuant to Section 2(b), for a period not
      to exceed sixty (60) Trading Days (which need not be consecutive days) in
      any twelve (12) month period.

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<PAGE>

            j. Comply in all material respects with all applicable rules and
      regulations of the Commission.

            k. The Company may require each Holder, upon three (3) Trading Days'
      notice, to furnish to the Company a certified statement as to, among other
      things, the number of shares of Common Stock beneficially owned by such
      Holder and the person that has voting and dispositive control over such
      Shares.

      4. Registration Expenses. Except as otherwise provided for herein, all
fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to a Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the
Trading Market on which the Common Stock is then listed for trading, and (B) in
compliance with applicable state securities or Blue Sky laws), (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is reasonably requested by the holders of a majority of the
Registrable Securities included in a Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) reasonable fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. In no event shall the Company be
responsible for any broker or similar commissions or, except to the extent
provided for in the Transaction Documents, any legal fees or other costs of the
Holders.

      5. Indemnification

            a. Indemnification by the Company. The Company shall,
      notwithstanding any termination of this Agreement, indemnify and hold
      harmless each Holder, the officers, directors, agents and employees of
      each of them, each Person who controls any such Holder (within the meaning
      of Section 15 of the Securities Act or Section 20 of the Exchange Act) and
      the officers, directors, agents and employees of each such controlling
      Person, to the fullest extent permitted by applicable law, from and
      against any and all losses, claims, damages, liabilities, costs
      (including, without limitation, reasonable attorneys' fees and expenses)
      and expenses (collectively, "Losses"), as incurred, arising out of or
      relating to any untrue statement of a material fact contained in a
      Registration Statement (at the time of its effectiveness), any Prospectus
      or any form of prospectus or in any amendment or supplement thereto or in
      any preliminary prospectus (each as of its date), or arising out of or
      relating to any omission of a material fact required to be stated therein
      or necessary to make the statements therein, in light of the circumstances
      under which they were made, not misleading, except to the extent, but only
      to the extent, that (i) such untrue statements or omissions are based
      solely upon information regarding such Holder furnished in writing to the
      Company by or on behalf of such Holder expressly for use therein, or to
      the extent that such information relates to such Holder or such Holder's
      proposed method of distribution of Registrable Securities and was reviewed
      and expressly approved in writing by such Holder expressly for use in such
      Registration Statement, such Prospectus or such form of Prospectus or in
      any amendment or supplement thereto or (ii) in the case of an occurrence
      of an event of the type specified in Section 3(c)(ii)-(v), the use by such
      Holder of an outdated or defective Prospectus after the Company has
      notified such Holder in writing that such Prospectus is outdated or
      defective and prior to the receipt by such Holder of the Advice
      contemplated in Section 6(d).

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            b. Indemnification by Holders. Each Holder shall, severally and not
      jointly, indemnify and hold harmless the Company, its directors, officers,
      agents and employees, each Person who controls the Company (within the
      meaning of Section 15 of the Securities Act and Section 20 of the Exchange
      Act), and the directors, officers, agents or employees of such controlling
      Persons, to the fullest extent permitted by applicable law, from and
      against all Losses, as incurred, within ten (10) Trading Days of written
      notice thereof to the Indemnifying Party, to the extent arising out of or
      based solely upon: (x) such Holder's failure to comply with the prospectus
      delivery requirements of the Securities Act or (y) any untrue statement of
      a material fact contained in a Registration Statement, any Prospectus, or
      any form of prospectus, or in any amendment or supplement thereto or in
      any preliminary prospectus, or arising out of or relating to any omission
      of a material fact required to be stated therein or necessary to make the
      statements therein not misleading (i) to the extent, but only to the
      extent, that such untrue statement or omission is contained in any
      information so furnished in writing by or on behalf of such Holder to the
      Company specifically for inclusion in such Registration Statement or such
      Prospectus or (ii) to the extent that (1) such untrue statements or
      omissions are based solely upon information regarding such Holder
      furnished in writing to the Company by or on behalf of such Holder
      expressly for use therein, or to the extent that such information relates
      to such Holder or such Holder's proposed method of distribution of
      Registrable Securities and was reviewed and expressly approved in writing
      by such Holder expressly for use in such Registration Statement, such
      Prospectus or such form of Prospectus or in any amendment or supplement
      thereto or (2) in the case of an occurrence of an event of the type
      specified in Section 3(c)(ii)-(v), the use by such Holder of an outdated
      or defective Prospectus after the Company has notified such Holder in
      writing that such Prospectus is outdated or defective and prior to the
      receipt by such Holder of the Advice contemplated in Section 6(c).
      Notwithstanding anything to the contrary contained herein or in the
      Purchase Agreement, in no event shall the liability of any selling Holder
      hereunder be greater in amount than the dollar amount of the net proceeds
      received by such Holder upon the sale of the Registrable Securities giving
      rise to such indemnification obligation.

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            c. Conduct of Indemnification Proceedings. If any Proceeding shall
      be brought or asserted against any Person entitled to indemnity hereunder
      (an "Indemnified Party"), such Indemnified Party shall promptly notify the
      Person from whom indemnity is sought (the "Indemnifying Party") in
      writing, and the Indemnifying Party shall have the right to assume the
      defense thereof, including the employment of counsel reasonably
      satisfactory to the Indemnified Party and the payment of all fees and
      expenses incurred in connection with defense thereof; provided, that the
      failure of any Indemnified Party to give such notice shall not relieve the
      Indemnifying Party of its obligations or liabilities pursuant to this
      Agreement, except (and only) to the extent that such failure shall have
      materially prejudiced the Indemnifying Party's ability to defend such
      action.

            An Indemnified Party shall have the right to employ separate counsel
      in any such Proceeding and to participate in the defense thereof, but the
      fees and expenses of such counsel shall be at the expense of such
      Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed
      in writing to pay such fees and expenses; (2) the Indemnifying Party shall
      have failed promptly to assume the defense of such Proceeding and to
      employ counsel reasonably satisfactory to such Indemnified Party in any
      such Proceeding; or (3) the named parties to any such Proceeding
      (including any impleaded parties) include both such Indemnified Party and
      the Indemnifying Party, and such Indemnified Party shall reasonably
      believe that a material conflict of interest is likely to exist if the
      same counsel were to represent such Indemnified Party and the Indemnifying
      Party (in which case, if such Indemnified Party notifies the Indemnifying
      Party in writing that it elects to employ separate counsel at the expense
      of the Indemnifying Party, the Indemnifying Party shall not have the right
      to assume the defense thereof and the reasonable fees and expenses of one
      (1) separate counsel shall be at the expense of the Indemnifying Party).
      The Indemnifying Party shall not be liable for any settlement of any such
      Proceeding affected without its written consent, which consent shall not
      be unreasonably withheld. No Indemnifying Party shall, without the prior
      written consent of the Indemnified Party, effect any settlement of any
      pending Proceeding in respect of which any Indemnified Party is a party,
      unless such settlement includes an unconditional release of such
      Indemnified Party from all liability on claims that are the subject matter
      of such Proceeding.

            d. Contribution. If a claim for indemnification under Section 5(a)
      or 5(b) is unavailable to an Indemnified Party (by reason of public policy
      or otherwise), then each Indemnifying Party, in lieu of indemnifying such
      Indemnified Party, shall contribute to the amount paid or payable by such
      Indemnified Party as a result of such Losses, in such proportion as is
      appropriate to reflect the relative fault of each of the Indemnifying
      Party and the Indemnified Party in connection with the actions, statements
      or omissions that resulted in such Losses as well as any other relevant
      equitable considerations. The relative fault of such Indemnifying Party
      and Indemnified Party shall be determined by reference to, among other
      things, whether any action in question, including any untrue statement of
      a material fact omission of a material fact, has been taken or made by, or
      relates to information supplied by, such Indemnifying Party or Indemnified
      Party, and the parties' relative intent, knowledge, access to information
      and opportunity to correct or prevent such action, statement or omission.
      The amount paid or payable by a party as a result of any Losses shall be
      deemed to include, subject to the limitations set forth in this Agreement,
      any reasonable attorneys' or other reasonable fees or expenses incurred by
      such party in connection with any Proceeding to the extent such party
      would have been indemnified for such fees or expenses if the
      indemnification provided for in this Section was available to such party
      in accordance with its terms.

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            The parties hereto agree that it would not be just and equitable if
      contribution pursuant to this Section 5(d) were determined by pro rata
      allocation or by any other method of allocation that does not take into
      account the equitable considerations referred to in the immediately
      preceding paragraph. Notwithstanding the provisions of this Section 5(d),
      no Holder shall be required to contribute, in the aggregate, any amount in
      excess of the amount by which the proceeds actually received by such
      Holder from the sale of the Registrable Securities which are the subject
      to the Proceeding exceeds the amount of any damages that such Holder has
      otherwise been required to pay by reason of such untrue or alleged untrue
      statement or omission or alleged omission, except in the case of fraud by
      such Holder.

            The indemnity and contribution agreements contained in this Section
      are in addition to any liability that the Indemnifying Parties may have to
      the Indemnified Parties.

      6. Miscellaneous

            a. Remedies. In the event of a breach by the Company or by a Holder,
      of any of their obligations under this Agreement, each Holder or the
      Company, as the case may be, in addition to being entitled to exercise all
      rights granted by law and under this Agreement, including recovery of
      damages, will be entitled to specific performance of its rights under this
      Agreement. The Company and each Holder agree that monetary damages would
      not provide adequate compensation for any losses incurred by reason of a
      breach by it of any of the provisions of this Agreement and hereby further
      agrees that, in the event of any action for specific performance in
      respect of such breach, it shall waive the defense that a remedy at law
      would be adequate.

            b. Compliance. Each Holder covenants and agrees that it will comply
      with the prospectus delivery requirements of the Securities Act as
      applicable to it in connection with sales of Registrable Securities
      pursuant to a Registration Statement.

            c. Discontinued Disposition. Each Holder agrees by its acquisition
      of such Registrable Securities that, upon receipt of a notice from the
      Company of the occurrence of any event of the kind described in Section
      3(c), such Holder will forthwith discontinue disposition of such
      Registrable Securities under any Registration Statement until such
      Holder's receipt of the copies of the supplemented Prospectus and/or
      amended Registration Statement or until it is advised in writing (the
      "Advice") by the Company that the use of the applicable Prospectus may be
      resumed, and, in either case, has received copies of any additional or
      supplemental filings that are incorporated or deemed to be incorporated by
      reference in such Prospectus or Registration Statement. The Company will
      use its commercially reasonable efforts to ensure that the use of such
      Prospectus may be resumed as promptly as it practicable. The Company
      agrees and acknowledges that any periods during which the Holder is
      required to discontinue the disposition of the Registrable Securities
      hereunder shall be subject to the provisions of Section 2(b).

                                       10
<PAGE>

            d. Piggy-Back Registrations. If at any time during the Effectiveness
      Period there is not an effective Registration Statement covering all of
      the Registrable Securities and the Company shall determine to prepare and
      file with the Commission a registration statement relating to an offering
      for its own account or the account of others under the Securities Act of
      any of its equity securities, other than on Form S-4 or Form S-8 (each as
      promulgated under the Securities Act) or their then equivalents relating
      to equity securities to be issued solely in connection with any
      acquisition of any entity or business or equity securities issuable in
      connection with the stock option or other employee benefit plans, then the
      Company shall send to each Holder a written notice of such determination
      and, if within fifteen (15) days after the date of such notice, any such
      Holder shall so request in writing, the Company shall include in such
      registration statement all or any part of such Registrable Securities such
      Holder requests to be registered, subject to customary underwriter
      cutbacks applicable to all holders of registration rights.

            e. Amendments and Waivers. The provisions of this Agreement,
      including the provisions of this sentence, may not be amended, modified or
      supplemented, and waivers or consents to departures from the provisions
      hereof may not be given, unless the same shall be in writing and signed by
      the Company and each Holder of the then outstanding Registrable
      Securities.

            f. Notices. Any and all notices or other communications or
      deliveries required or permitted to be provided hereunder shall be made in
      accordance with the provisions of the Purchase Agreement.

            g. Successors and Assigns. This Agreement shall inure to the benefit
      of and be binding upon the successors and permitted assigns of each of the
      parties and shall inure to the benefit of each Holder. Each Holder may
      assign their respective rights hereunder in the manner and to the Persons
      as permitted under the Purchase Agreement.

            h. Execution and Counterparts. This Agreement may be executed in any
      number of counterparts, each of which when so executed shall be deemed to
      be an original and, all of which taken together shall constitute one and
      the same Agreement. In the event that any signature is delivered by
      facsimile transmission, such signature shall create a valid binding
      obligation of the party executing (or on whose behalf such signature is
      executed) the same with the same force and effect as if such facsimile
      signature were the original thereof.

            i. Governing Law. All questions concerning the construction,
      validity, enforcement and interpretation of this Agreement shall be
      determined with the provisions of the Purchase Agreement.

                                       11
<PAGE>

            j. Cumulative Remedies. The remedies provided herein are cumulative
      and not exclusive of any remedies provided by law.

            k. Severability. If any term, provision, covenant or restriction of
      this Agreement is held by a court of competent jurisdiction to be invalid,
      illegal, void or unenforceable, the remainder of the terms, provisions,
      covenants and restrictions set forth herein shall remain in full force and
      effect and shall in no way be affected, impaired or invalidated, and the
      parties hereto shall use their commercially reasonable efforts to find and
      employ an alternative means to achieve the same or substantially the same
      result as that contemplated by such term, provision, covenant or
      restriction. It is hereby stipulated and declared to be the intention of
      the parties that they would have executed the remaining terms, provisions,
      covenants and restrictions without including any of such that may be
      hereafter declared invalid, illegal, void or unenforceable.

            l. Headings. The headings in this Agreement are for convenience of
      reference only and shall not limit or otherwise affect the meaning hereof.

            m. Independent Nature of Purchasers' Obligations and Rights. Except
      as otherwise provided for herein, the obligations of each Holder hereunder
      are several and not joint with the obligations of any other Holder
      hereunder, and no Holder shall be responsible in any way for the
      performance of the obligations of any other Holder hereunder. Nothing
      contained herein or in any other agreement or document delivered at any
      closing, and no action taken by any Holder pursuant hereto or thereto,
      shall be deemed to constitute the Holders as a partnership, an
      association, a joint venture or any other kind of entity, or create a
      presumption that the Holders are in any way acting in concert with respect
      to such obligations or the transactions contemplated by this Agreement.
      Each Holder shall be entitled to protect and enforce its rights, including
      without limitation the rights arising out of this Agreement, and it shall
      not be necessary for any other Holder to be joined as an additional party
      in any proceeding for such purpose.

            n. Notice of Disposition of Registrable Securities. Upon the request
      of the Company, each Holder shall promptly provide the Company written
      notice at such time as it no longer holds, directly or indirectly, any
      Registrable Securities.

            o. Fees and Expenses. Each party shall pay the fees and expenses of
      its advisers, counsel, accountants and other experts, if any, and all
      other expenses incurred by such party incident to the negotiation,
      preparation, execution, delivery and performance of this Agreement, except
      that the Company shall pay up to an aggregate of $2,000 for the fees and
      expenses of TRP incurred in connection with the review of the registration
      statement and information submitted by the Purchasers. In addition, the
      Company shall pay all stamp and other taxes and duties levied in
      connection with the sale of the Shares.

                            *************************

                                       12
<PAGE>

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

                                       ZONE4PLAY, INC.

                                            By:  /s/ Shimon Citron
                                                 -------------------------------
                                                 Name: Shimon Citron
                                                 Title: Chief Executive Officer

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

                                       13
<PAGE>

                       [PURCHASER'S SIGNATURE PAGE TO RRA]

Name of Investing Entity:  Ivy MA Holdings
                          ----------------
Signature of Authorized Signatory of Investing Entity:  /s/ Douglas Topky
                                                       ------------------
Name of Authorized Signatory:  Douglas Topky
                              --------------
Title of Authorized Signatory:  Portfolio Manager
                                -----------------

                           [SIGNATURE PAGES CONTINUE]

<PAGE>

                       [PURCHASER'S SIGNATURE PAGE TO RRA]

Name of Investing Entity:  Haystack Capital LP
                          --------------------
Signature of Authorized Signatory of Investing Entity:  /s/ Douglas Topky
                                                       ------------------
Name of Authorized Signatory:  Douglas Topky
                              --------------
Title of Authorized Signatory:  Managing Member
                                ---------------

                           [SIGNATURE PAGES CONTINUE]

<PAGE>

                 [PURCHASER'S SIGNATURE PAGE TO [        ] RRA]

Name of Investing Entity:  First New York Securities LLC
                          ------------------------------
Signature of Authorized Signatory of Investing Entity:  /s/ Donald Erenberg
                                                       --------------------
Name of Authorized Signatory:  Donald Erenberg
                              ----------------
Title of Authorized Signatory:  Managing Member
                                ---------------

                           [SIGNATURE PAGES CONTINUE]

<PAGE>

                       [PURCHASER'S SIGNATURE PAGE TO RRA]

Name of Investing Entity:  Charles Beeler
                          ---------------
Signature of Authorized Signatory of Investing Entity:  /s/ Charles Beeler
                                                       -------------------
Name of Authorized Signatory:  Charles Beeler
                              ---------------
Title of Authorized Signatory:  Partner
                               ----------------

                           [SIGNATURE PAGES CONTINUE]

<PAGE>

                       [PURCHASER'S SIGNATURE PAGE TO RRA]

Name of Investing Entity:  Thomas H. Peterson
                          -------------------
Signature of Authorized Signatory of Investing Entity:  /s/ Thomas H. Peterson
                                                       -----------------------
Name of Authorized Signatory:  Thomas H. Peterson
                              -------------------
Title of Authorized Signatory:  /s/ Thomas H. Peterson
                                ----------------------

                           [SIGNATURE PAGES CONTINUE]

<PAGE>

                       [PURCHASER'S SIGNATURE PAGE TO RRA]

Name of Investing Entity:  David Sappir
                           -------------
Signature of Authorized Signatory of Investing Entity:  /s/ David Sappir
                                                       -----------------
Name of Authorized Signatory:  David Sappir
                              -------------
Title of Authorized Signatory:  NA
                               ------

                           [SIGNATURE PAGES CONTINUE]

<PAGE>

                       [PURCHASER'S SIGNATURE PAGE TO RRA]

Name of Investing Entity:  Graham Partners, LP
                          --------------------
Signature of Authorized Signatory of Investing Entity:  /s/ Harold Berry
                                                       -----------------
Name of Authorized Signatory:  Harold Berry
                              -------------
Title of Authorized Signatory:  Portfolio Manager
                                -----------------

                           [SIGNATURE PAGES CONTINUE]

<PAGE>

                       [PURCHASER'S SIGNATURE PAGE TO RRA]

Name of Investing Entity:  WPG Software Fund, LP
                          ----------------------
Signature of Authorized Signatory of Investing Entity:
                                                /s/ George Boyd / /s/ Ben Taylor
                                                --------------------------------
Name of Authorized Signatory:  George Boyd / Ben Taylor
                              -------------------------
Title of Authorized Signatory:  Head of Equity / Managing Director
                                ----------------------------------

<PAGE>

                       [PURCHASER'S SIGNATURE PAGE TO RRA]

Name of Investing Entity:  Erinch R. Ozada
                          ----------------
Signature of Authorized Signatory of Investing Entity:  /s/ Erinch R. Ozada
                                                       --------------------
Name of Authorized Signatory:  Erinch R. Ozada
                              ----------------
Title of Authorized Signatory:August 9, 2004

Shimon Citron
Chief Executive Officer
Zone4PLay Inc.
3b Hashlosha St.
Tel Aviv 67060
Israel

Dear Mr. Citron:

      This  Agreement  is made and  entered  into this  __th day of ____,  2004,
between Punk, Ziegel & Company,  L.P. ("Punk,  Ziegel") and Zone4Play,  Inc. and
its affiliates and subsidiaries (collectively "Zone4Play" or the "Company").

      In consideration of the mutual promises made herein and for other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the parties hereto agree as follows:

1. The Company hereby engages Punk,  Ziegel upon the terms and conditions as set
forth herein as its exclusive  financial  advisor to render  financial advice to
the Company as an investment banker with respect to Placement Transactions,  M&A
Transactions  (each, as defined below),  joint ventures.  In that regard,  Punk,
Ziegel  will  assist  the  Company  in  identifying,   analyzing,   structuring,
negotiating and financing suitable business  opportunities which the Company may
take  advantage of by purchase or sale of stock or assets (except assets used in
the  ordinary   course  of  business),   assumption  of   liabilities,   merger,
consolidation, tender offer, joint venture, financing arrangement or any similar
transaction or combination thereof.

2. Except as otherwise specified in Paragraph 14 hereof, this Agreement shall be
effective for a period of Six (6) months,  commencing upon the execution  hereof
and shall terminate  thereafter unless and until extended by mutual agreement of
the parties.

3. During the term of this  Agreement,  Punk,  Ziegel shall  provide the Company
with such  regular and  customary  investment  banking  advice as is  reasonably
requested by the Company,  provided  that Punk,  Ziegel shall not be required to
undertake  duties  not  reasonably  within the scope of the  investment  banking
services contemplated by this Agreement.

4. Without  derogating from any of the provisions of this letter,  Punk,  Ziegel
shall render such other financial  advisory and investment  banking  services as
may from time to time be agreed upon in writing by Punk, Ziegel and the Company.

PLACEMENT AGENT

5. The Company hereby engages Punk, Ziegel,  for the term of this agreement,  as
its  exclusive  agent in the  private  placement  of  equity  and  equity-linked
securities (the "Equity Securities"), debt financing (the "Debt Securities"), or
any combination of Equity Securities and Debt Securities  thereof  (collectively
referred to as "Placement  Transactions").  For the purposes of this  Agreement,
Debt  Securities  shall include  acquisition  lines of credit,  any form of bank
lines,  mezzanine or other debt, vendor  financings,  etc. but shall not include
extensions,  renewals,  modifications  or  refinancings  of credit with existing
creditors or their affiliates.  Public offerings,  if any, shall be subject to a
separate  letter  agreement and are  expressly not addressed in this  Agreement.
Should a fairness opinion be required, The Company and Punk, Ziegel enter into a
separate  letter  agreement,  which shall govern the  issuance of such  opinion,
including any fees.

<PAGE>

August 9, 2004
Zone4Play Engagement
Page 2

6. Punk,  Ziegel hereby  accepts the  engagement,  with respect to any Placement
Transaction, and in that connection agrees to:

      (a)   prepare,  if asked, in consultation with the Company, an Information
            Memorandum  (the  "Memorandum")   describing  the  Company  and  the
            Placement Transaction,  which Memorandum shall not be made available
            to potential  investors or lenders until such Memorandum and its use
            shall be approved by the Company;

      (b)   review with the  Company,  and receive its  approval  for, a list of
            prospective  investors  and  lenders  (the  "Contact  List")  to  be
            contacted by Punk, Ziegel in connection with its engagement herein;

      (c)   use its best efforts to  privately  place the Equity  Securities  or
            Debt Securities;

      (d)   prepare,  if asked,  with the assistance and approval of the Company
            any other  communications  to be used in the  Placement  Transaction
            whether in the form of letter, circular, notice or otherwise;

      (e)   assist  in  the  negotiation  of the  terms  and  conditions  of the
            placement of the Equity  Securities or Debt  Securities to investors
            and lenders;

      (f)   advise the Company as to the expected timing,  structure and pricing
            of the Placement Transaction; and

      (g)   provide such other investment  banking services as are customary for
            similar engagements.

7.    As  compensation  for the  services to be rendered by Punk,  Ziegel as the
      Company's  placement  agent,  the  Company  shall  pay to Punk,  Ziegel as
      follows,  subject  to a minimum  fee of Two  hundred  and  fifty  thousand
      dollars ($250,000) for each Placement Transaction (the "Financing Fee").

      (a)   Upon the execution  hereof, a non-refundable  advance payment fee of
            fifty thousand dollars  ($50,000) (the "Retainer Fee"). The Retainer
            Fee shall be paid: (i) $25,000 in cash (paid in 4 installments), and
            (ii) a warrant (the "Retainer  Warrants") to purchase  25,000 of the
            Company's  common stock at an exercise  price of $0.80 per share and
            including other terms and conditions as more fully described below.

      (b)   At the  closing of each  placement  of Equity  Securities  and after
            actual  receipts of funds by the company,  the Company  shall pay in
            cash  to  Punk,  Ziegel  by  wire  transfer  a cash  fee (a  "Equity
            Securities  Placement  Fee") of Six percent  (6.0%) of the Aggregate
            Placement  Consideration  (as defined in  paragraph 9) raised in the
            Placement Transaction The cash advance payment will be deducted from
            the Equity securities placement fee. In a case that the company will
            decide  to  defer  collection,  or to  leave  the  funds in a escrow
            account  after the  closing of such  transaction,  than the  company
            shall pay in cash,  the fee to Punk,  Ziegel.  The Company and Punk,
            Ziegel agree to carve out an amount of  $1,500,000  (one million and
            five hundred dollars,  which shall include $450,000 that the Company
            has  already  raised  and  that  are  currently  held  in an  escrow
            account),  for which,  if raised no later than the close of business
            on  August 31 2004  (the  "Carve  Out"),  Punk,  Ziegel  will not be
            entitled  to any fee.  The carve out shall  terminate  on August 31,
            2004 and any amount  raised  after that  time,  irrespective  of the
            source or the referring party shall be subject to the fee provisions
            of this Agreement.

<PAGE>

August 9, 2004
Zone4Play Engagement
Page 3

      (c)   At the closing of each placement of Equity  Securities,  the Company
            shall  issue  to Punk,  Ziegel  warrants  (the  "Fee  Warrants")  to
            purchase  shares of the Company's  common stock equal to Two percent
            (2.0%) of the  Aggregate  Placement  Consideration  with an exercise
            price per share equal to the price at which common stock was sold or
            valued in the Placement Transactions.

      (d)   The  terms  of the  Warrants  shall  be  set  forth  in one or  more
            agreements   (the  "Warrant   Agreements")  in  form  and  substance
            reasonably satisfactory to Punk, Ziegel and the Company.

      (e)   At the closing of each placement of Debt Securities and after actual
            receipts of funds by the company.,  the Company shall pay in cash to
            Punk,  Ziegel  by  wire  transfer  a cash  fee (a  "Debt  Securities
            Placement  Fee") of three percent (3.0%) of the Aggregate  Placement
            Consideration  (as defined in paragraph  8) raised in the  Placement
            Transaction. The cash advance payment will be deducted from the Debt
            Securities  placement fee. In a case that the company will decide to
            defer  collection , or to leave the funds in a escrow  account after
            the closing of such transaction, than the company shall pay in cash,
            the fee to Punk, Ziegel

      (f)   In avoidance  of doubt,  in the event of a combined  placement  that
            includes equity securities and debt securities,  the advance payment
            will be deducted only once.

8.    In  determining  "Aggregate  Placement   Consideration"  for  purposes  of
      calculating  Punk,  Ziegel's  Placement Fee under  paragraph 7 above,  the
      following principles will apply:

      (a)   Aggregate  Placement  Consideration  shall be deemed to include  the
            total  value  of  Equity  and  Debt  Securities  sold,  directly  or
            indirectly,   by  the  Company  in  connection  with  the  Placement
            Transaction,   including  proceeds  received  by  the  Company  upon
            exercise of options, warrants and/or similar securities, any amounts
            paid into  escrow and any amounts  payable in the future  whether or
            not subject to any contingency  including advances on licensing fees
            and product sales.

<PAGE>

August 9, 2004
Zone4Play Engagement
Page 4

      (b)   If the consideration  received by the Company is to be paid in whole
            or in part  through  installment  payments,  the  portion  of  Punk,
            Ziegel's   Securities   Placement  Fee  relating  thereto  shall  be
            calculated and paid when and as such contingent payments are due.

      (c)   If the consideration  received by the Company is paid in whole or in
            part in the form of securities or other non-cash consideration, such
            consideration  shall be valued at the fair market value thereof,  on
            the day  prior  to the date of  closing  (or  later  date on which a
            contingent  payment  is  made),  provided,  however,  that  if  such
            consideration  consists  of  securities  with  an  existing  trading
            market,  such securities  shall be valued at the average of the last
            sales price for such  securities  on the five  trading days prior to
            the date of closing (or later date on which a contingent  payment is
            made).

M&A ADVISOR

      9.    The Company hereby engages Punk,  Ziegel as its exclusive advisor in
            connection with mergers and acquisitions advisory services.

      10.   Punk,  Ziegel hereby accepts the  engagement and in that  connection
            agrees to assist and advise the  Company in regard to any  potential
            M&A  Transaction,  as defined in section 12 below,  in the following
            manner:

            (a)   evaluate and recommend  financial  and strategic  alternatives
                  with respect to M&A Transactions;

            (b)   identify  potential  parties to M&A  Transactions  and contact
                  such  parties  and/or  their  representatives  and  assist the
                  Company in negotiations relating to a M&A Transaction;

            (c)   assist the Company,  if asked,  in performing  appropriate due
                  diligence on prospective acquisitions;

            (d)   assist  in  the   negotiation  of   prospective   acquisitions
                  including advice  regarding the timing,  structure and pricing
                  of a M&A Transaction;

            (e)   assist the Company,  if asked, in any documentation  necessary
                  to execute the M&A Transaction;

            (f)   assist the Company in  arranging  financing  (as  described in
                  paragraphs 5, 6,7 and 8), as needed; and

            (g)   Provide such other financial  advisory and investment  banking
                  services as are customary for similar  transactions and as may
                  be mutually agreed upon by the Company and Punk, Ziegel.

      11.   At the closing of each M&A Transaction,  the Company shall pay Punk,
            Ziegel a fee equal to: (i) three percent  (3.0%) of the first twenty
            million  dollars  ($20,000,000)  and (ii) one and  one-half  percent
            (1.5%) of the  excess  above  twenty  million of the  Aggregate  M&A
            Consideration (as defined below) of such M&A Transaction, subject to
            a minimum  fee of one  hundred  fifty  thousand  dollars  ($150,000)
            (collectively  referred to as the "M&A  Transaction  Fee").  The M&A
            Transaction Fee shall not include any fairness  opinions that may be
            required in the course of a transaction.  If the  consideration  for
            the  Transaction  is cash,  then the  Compensation  shall be paid in
            cash. If the  consideration  for the Transaction is other than cash,
            then the form of the Compensation shall be: half of the compensation
            will  be as the  same  nature  as  the  consideration  given  in the
            Transaction and the remainder will be paid in cash.

<PAGE>

August 9, 2004
Zone4Play Engagement
Page 5

      12.   For the  purpose of this  Agreement,  "M&A  Transaction"  shall mean
            merger, business combination, purchase or sale of some or all of the
            stock or  assets  of the  Company  or a Target  not in the  ordinary
            course of  business,  joint  venture or any similar  transaction  or
            combination  thereof.  "Aggregate M&A Consideration"  shall mean the
            total  consideration  (cash,  stock,  assets and all other  property
            (real and personal,  tangible or intangible) including debt assumed)
            exchanged  or received,  or to be exchanged or received,  or paid or
            incurred,  directly  or  indirectly  by  the  Company  or any of its
            security  holders in connection with any such M&A  Transaction.  M&A
            Transaction Fees shall be paid by the Company to Punk, Ziegel at the
            first  closing  of  each  M&A  Transaction.  If  the  Aggregate  M&A
            Consideration is to be paid in whole or in part through  installment
            payments,  the  portion  of  Punk,  Ziegel's  M&A  Transaction  Fees
            relating  thereto  shall be  calculated  and  paid  when and as such
            contingent payments are due.

GENERAL

      13.   In the event that the Company completes a transaction in lieu of any
            Placement  Transaction or M&A Transaction  during the course of this
            engagement to which clauses in paragraphs 1 through 12 do not apply,
            Punk, Ziegel shall receive a customary  investment banking fee to be
            mutually  agreed upon between Punk,  Ziegel and the Company based on
            the nature and type of services rendered.

      14.   In  the  event  that  this  Agreement  shall  not be  renewed  or if
            terminated for any reason,  notwithstanding  any such non-renewal or
            termination,  Punk,  Ziegel  shall  be  entitled  to a  full  fee as
            provided herein,  for each Placement  Transaction or M&A Transaction
            for which the  discussions  were  conducted  during the term of this
            Agreement  by the  Company  or by  Punk,  Ziegel  on  behalf  of the
            Company,  which is consummated within a period of twelve (12) months
            after non-renewal or termination of this Agreement. Upon termination
            of this Agreement,  the Company and Punk,  Ziegel shall provide each
            other with a written list of parties with whom they had  discussions
            in connection  with any  Placement  Transaction  or M&A  Transaction
            which list shall govern the operation of this Paragraph.

      15.   In addition to the fees payable  hereunder,  and regardless  whether
            any  Placement   Transaction  or  M&A  Transaction  is  proposed  or
            consummated,  the Company shall reimburse Punk, Ziegel  periodically
            for the term of this Agreement for all out-of-pocket  expenses, fees
            and disbursements incurred in connection with the services performed
            by Punk,  Ziegel  pursuant  to this  Agreement,  including  fees and
            disbursements  of Punk,  Ziegel's  legal  counsel and any  advisers.
            Punk,  Ziegel will seek the Company's  written approval for expenses
            exceeding  $1,000  and  will  supply  the  Company  with  reasonable
            documentation to support its claims for  reimbursement.  The Company
            shall reimburse Punk,  Ziegel its out of pocket expenses incurred in
            the course of any work done with respect to the  Carve-Out,  subject
            to the terms of this Agreement.

<PAGE>

August 9, 2004
Zone4Play Engagement
Page 6

      16.   The Company  acknowledges  that all opinions and advice  (written or
            oral) given by Punk,  Ziegel to the Company in connection with Punk,
            Ziegel's  engagement  hereunder are intended  solely for the benefit
            and use of the Company in considering Placement  Transactions or M&A
            Transactions  to which they relate,  and the Company  agrees that no
            person or entity  other than the  Company be entitled to make use of
            or rely upon the advice of Punk,  Ziegel 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 Punk, Ziegel, or use Punk, Ziegel's name in any annual
            reports or any other reports, releases or electronic publications of
            the Company without Punk, Ziegel's prior written consent.

      17.   The Company acknowledges that Punk, Ziegel and its affiliates are in
            the business of  providing  investment  banking and other  financial
            services and advice.  Nothing herein contained shall be construed to
            limit or restrict  Punk,  Ziegel in  conducting  such  business with
            respect to others, or in rendering such advice to others,  except as
            such  advice  may  relate  to  matters  relating  to  the  Company's
            business.

      18.   The Company  acknowledges and agrees that in performing its services
            under this engagement, Punk, Ziegel may rely upon the data, material
            and other information supplied by the Company without  independently
            verifying  its  accuracy,  completeness  or  veracity.  The  Company
            represents and warrants to Punk,  Ziegel that it shall endeavor that
            all  such  information  provided  by the  Company  will be true  and
            accurate in all  material  respects  and will not contain any untrue
            statement  of a  material  fact  or omit to  state a  material  fact
            necessary in order to make the  statements  therein not  misleading.
            Punk,  Ziegel shall be under no  obligation  to make an  independent
            appraisal  of  assets  or an  investigation  or  inquiry  as to  any
            information   regarding,   or  any  representations  of,  any  other
            participant in a Placement Transaction or M&A Transaction, and shall
            have no liability with regard thereto.  The Company acknowledges and
            agrees  that  Punk,  Ziegel  will be using  and  relying  upon  such
            information  supplied by the Company  and its  officers,  agents and
            others and any other publicly available  information  concerning the
            Company  without  any  independent   investigation  or  verification
            thereof or independent  appraisal by Punk,  Ziegel of the Company or
            its business or assets.

      19.   Since  Punk,  Ziegel  will be acting on  behalf  of the  Company  in
            connection  with its  engagement  hereunder,  the  Company and Punk,
            Ziegel have entered into a separate  indemnification  agreement (the
            "Indemnification Agreement") attached hereto as Schedule A and dated
            the date hereof,  providing for the  indemnification of Punk, Ziegel
            by the  Company.  Punk,  Ziegel has entered  into this  Agreement in
            reliance  on the  indemnities  set  forth  in  such  Indemnification
            Agreement.

<PAGE>

August 9, 2004
Zone4Play Engagement
Page 7

      20.   Punk, Ziegel shall perform its services  hereunder as an independent
            contractor  and not as an employee  of the  Company or an  affiliate
            thereof.  It is  expressly  understood  and agreed to by the parties
            hereto  that  Punk,  Ziegel  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  from
            time to time.

      21.   This  Agreement and the Schedule A attached  hereto  constitute  the
            entire  agreement  and  understanding  of the  parties  hereto,  and
            supersede  any  and  all  previous  agreements  and  understandings,
            whether  oral or written,  between the parties  with  respect to the
            matters set forth herein.

      22.   Any notice or communication permitted or required hereunder shall be
            in writing and shall be deemed  sufficiently given if hand-delivered
            or sent (i)  postage  prepaid by  registered  mail,  return  receipt
            requested,  or (ii) by  facsimile to the  respective  parties as set
            forth below, or to such other address as either party may notify the
            other of in writing:

            if to the Company, to:     Mr. Shimon Citron
                                       Chief Executive Officer
                                       Zone4PLay Inc.
                                       3b Hashlosha St.
                                       Tel Aviv 67060
                                       Israel

            if to Punk, Ziegel, to:    Punk, Ziegel & Company
                                       520 Madison Avenue
                                       New York, NY 10022
                                       Attn: Sagiv Shiv, Managing Director

      23.   During the term of this Agreement, Punk, Ziegel shall have the right
            to place  advertisements  in  financial  and  other  newspapers  and
            journals at its own expense  describing  its services to the Company
            hereunder,  provided  that the Company  shall approve in writing the
            form and content thereof in advance.

      24.   This agreement may not be assigned by either party without the prior
            written  consent of the other.  The benefits of this Agreement shall
            be  binding  upon  and  inure  to  the  benefit  of  the  respective
            successors,  legal  representatives  and  permitted  assigns  of the
            parties hereto and the obligations  and liabilities  assumed in this
            Agreement  by  the  parties  hereto  shall  be  binding  upon  their
            respective successors, legal representatives and permitted assigns.

      25.   This Agreement may be executed in any number of  counterparts,  each
            of  which  together  shall  constitute  one  and the  same  original
            document.

      26.   No provision of this  Agreement may be amended,  modified or waived,
            except in writing signed by all of the parties hereto.

      27.   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.  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 24 hereof.

<PAGE>

August 9, 2004
Zone4Play Engagement
Page 8

      28.   EACH OF PUNK,  ZIEGEL AND THE  COMPANY  WAIVES ALL RIGHT TO TRIAL BY
            JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM (WHETHER BASED
            ON CONTRACT,  TORT OR  OTHERWISE)  RELATED TO OR ARISING OUT OF THIS
            AGREEMENT.

Punk, Ziegel is delighted to accept this engagement and looks forward to working
with you on this  assignment.  Please confirm that the foregoing  correctly sets
forth our  agreement  by signing the  enclosed  duplicate  of this letter in the
space  provided and  returning  it,  whereupon  this letter  shall  constitute a
binding agreement as of the date first above written.

                                       PUNK, ZIEGEL & COMPANY, L.P.

                                       By
                                         ---------------------------------------

                                       By /s/ Sagiv Shiv
                                         ---------------------------------------
                                         Sagiv Shiv
                                         Managing Director

AGREED:

ZONE4PLAY, INC.

By /s/ Shimon Citron
  ----------------------------------
  Shimon Citron
  Chief Executive Officer

By
  ----------------------------------

<PAGE>

SCHEDULE A
August 9, 2004

                           INDEMNIFICATION PROVISIONS

      Zone4Play,  Inc.  (the  "Company")  agrees to indemnify  and hold harmless
Punk, Ziegel & Company, L.P. ("Punk, Ziegel") to the fullest extent permitted by
law,  from  and  against  any  and all  losses,  claims,  damages,  obligations,
penalties,  judgments,  liabilities,  costs, expenses and disbursements (and any
and all actions,  suits,  proceedings and  investigations in respect thereof and
any and all  legal  and  other  costs,  expenses  and  disbursements  in  giving
testimony  or  furnishing  documents  in response  to a subpoena or  otherwise),
including,  without limitation,  the costs,  expenses and disbursements,  as and
when incurred,  of investigating,  preparing or defending any such action, suit,
proceeding or  investigation  (whether or not in connection  with  litigation in
which Punk, Ziegel is a party) by a third party, as and when incurred,  directly
or  indirectly,  caused  by,  relating  to,  based  upon,  arising  out of or in
connection  with (a) Punk,  Ziegel  acting for the  Company  including,  without
limitation,  any  act or  omission  by  Punk,  Ziegel  in  connection  with  its
acceptance of or the performance or  non-performance of its obligations under an
engagement  letter,  dated______ __, 2004, between Punk, Ziegel and the Company,
as it may be  amended  from  time  to time  (the  "Agreement");  (b) any  untrue
statement or alleged  untrue  statement of a material fact  contained in, or any
omission or alleged  omission to state a material  fact required to be stated or
necessary  to make  not  misleading  statements  made in any  offering  document
produced  pursuant  to  the  Agreement,   including  any  amendment  thereof  or
supplement  thereto,  or similar  statements  or  omissions in or from any other
information  furnished by or on behalf of the Company to Punk,  Ziegel or to any
prospective investor/suitor pursuant to this Agreement, including any amendments
thereof or  supplements  thereto,  or any other  activity on their  behalf;  (c)
violations  by  the  Company  of  any  of  its  representations,  warranties  or
agreements  contained  in or  incorporated  into the  Agreement;  (d) all or any
portion  of any  transaction  or (e) the  use of  proceeds  of any  transaction;
provided,  however,  such indemnity  agreement shall not apply to any portion of
any such loss, claim, damage, obligation,  penalty, judgment, liability, cost or
expense to the extent it is found in a final  judgment  by a court of  competent
jurisdiction  (not  subject to further  appeal for whatever  reason,  including,
without  limitation,  the failure to file an appeal in a timely fashion) to have
resulted  directly  from the gross  negligence  or willful  misconduct  of Punk,
Ziegel.

      These  Indemnification  Provisions  shall extend to the  following:  Punk,
Ziegel,  its parent company,  their affiliated  entities,  directors,  officers,
employees,  legal counsel,  and agents of Punk,  Ziegel,  its and the respective
affiliates  and  controlling  persons of Punk,  Ziegel within the meaning of the
federal securities laws. All references to Punk, Ziegel in these Indemnification
Provisions shall be understood to include any and all of the foregoing.

      If any action, suit, proceeding or investigation is commenced, as to which
Punk, Ziegel proposes to demand indemnification,  it shall so notify the Company
with reasonable promptness;  provided, however, that any failure by Punk, Ziegel
to notify  the  Company  shall not  relieve  the  Company  from its  obligations
hereunder. Punk, Ziegel shall have the right to retain counsel of its own choice
to  represent  it, and the Company  shall pay  reasonable  and  customary  fees,
expenses and  disbursements  of such  counsel;  and such counsel  shall,  to the
extent  consistent with its  professional  responsibilities,  cooperate with the
Company and any counsel designated by the Company.  The Company shall pay and be
liable  for any  settlement  of any claim  against  Punk,  Ziegel  made with the
Company's written consent, which consent shall not be unreasonably withheld. The
Company  shall not,  without  the  written  consent of Punk,  Ziegel,  settle or
compromise  any claim or permit a default or consent to entry of any judgment in
respect  thereof unless such  settlement,  compromise or consent  includes as an
unconditional  term  thereof the giving by the  claimant  to Punk,  Ziegel of an
unconditional  and  irrevocable  release  from all  liability in respect of such
claim.

<PAGE>

August 9, 2004
Schedule A - Zone4Play Indemnification
Page 2

      In order to provide for just and  equitable  contribution,  if a claim for
indemnification  pursuant to these Indemnification  Provisions is made but it is
found in a final judgment by a court of competent  jurisdiction  (not subject to
further appeal) that such indemnification may not be enforced in such case, even
though the express  provisions hereof provide for  indemnification in such case,
then the Company,  on the one hand, and Punk,  Ziegel,  on the other hand, shall
contribute to the amount paid or payable by such indemnified persons as a result
of such losses, claims, damages, obligations, penalties, judgments, liabilities,
costs,  expenses and  disbursements  in such  proportion  as is  appropriate  to
reflect the  relative  benefits  received by the Company,  on the one hand,  and
Punk,  Ziegel,  on the other  hand  from any  transactions  contemplated  by the
Agreement,  and also the relative fault of the Company on the one hand and Punk,
Ziegel on the other hand, in connection with the  statements,  acts or omissions
which  resulted  in  such  losses,  claims,  damages,  obligations,   penalties,
judgments, liabilities, costs, expenses and disbursements and any other relevant
equitable considerations shall also be considered.  No person found liable for a
fraudulent  misrepresentation or omission shall be entitled to contribution from
any person who is not also found liable for such fraudulent misrepresentation or
omission.  Notwithstanding the foregoing, Punk, Ziegel shall not be obligated to
contribute  any amount  hereunder  that  exceeds  the amount of fees  previously
received by Punk, Ziegel pursuant to the Agreement.

      The  Indemnification  Provisions  and  contribution  agreements  contained
herein are in addition to any liability  which the Company may otherwise have to
Punk, Ziegel and the other parties.

      Neither  termination nor completion of the engagement of Punk,  Ziegel set
forth in the  Agreement  nor any  investigation  made by or on  behalf  of Punk,
Ziegel  or  the  Company  shall  effect  these  Indemnification  Provisions  and
contribution  agreements  which shall remain and continue to be operative and in
full force and effect.

      We agree that if any indemnity  sought by an Indemnified  Person hereunder
is held by a court to be unavailable for any reason,  then (whether or not Punk,
Ziegel is the Indemnified  Person),  we and Punk, Ziegel shall contribute to the
Claim for which such  indemnity is held  unavailable  in such  proportion  as is
appropriate  to reflect the relative  benefits to us, on the one hand, and Punk,
Ziegel on the other, in connection with Punk,  Ziegel's  engagement  referred to
above,  subject  to the  limitation  that in no event  shall the amount of Punk,
Ziegel's  contribution to such Claim exceed the amount of fees actually received
by Punk, Ziegel from us pursuant to Punk, Ziegel's  engagement.  We hereby agree
that the  relative  benefits  to us,  on the one hand,  and Punk,  Ziegel on the
other,  with respect to Punk,  Ziegel's  engagement shall be deemed to be in the
same  proportion  as (a) the total value paid or proposed to be paid or received
by us or our  stockholders  as the  case  may be,  pursuant  to the  transaction
(whether or not  consummated) for which you are engaged to render services bears
to (b) the fee actually paid to Punk, Ziegel in connection with such engagement.

      Our  indemnity,  reimbursement  and  contribution  obligations  under this
Agreement  shall be in  addition  to,  and  shall in no way  limit or  otherwise
adversely  affect any rights  that any  Indemnified  Party may have at law or at
equity.

      Should  Punk,  Ziegel or its  personnel  be required or requested by us to
provide  documentary  evidence or testimony in  connection  with any  proceeding
arising  from or  relating  to Punk,  Ziegel's  engagement,  we agree to pay all
reasonable  expenses  (including  fees incurred for legal  counsel) in complying
therewith and for sworn testimony or preparation therefor, payable in advance.

<PAGE>

August 9, 2004
Schedule A - Zone4Play Indemnification
Page 3

      We hereby  consent to  personal  jurisdiction  and  service of process and
venue  in any  court  in  which  any  claim  for  indemnity  is  brought  by any
Indemnified Person.

      It is understood that, in connection with Punk, Ziegel's engagement, Punk,
Ziegel may be engaged to act in one or more  additional  capacities and that the
terms of the  original  engagement  or any  such  additional  engagement  may be
embodied in one or more  separate  written  agreements.  The  provisions of this
Agreement shall apply to the original engagement, any such additional engagement
and any  modification of the original  engagement or such additional  engagement
and shall remain in full force and effect following completion or termination of
Punk, Ziegel's engagement(s).

                                       Sincerely,

                                       ZONE4PLAY, INC.

                                       By: /s/ Shimon Citron
                                          --------------------------------------
                                          Shimon Citron
                                          Chief Executive Officer

                                       By:
                                          --------------------------------------

Confirmed and agreed to:
PUNK, ZIEGEL & COMPANY, L.P.

By:
   --------------------------------------

By: /s/ Sagiv Shiv
   --------------------------------------
    Sagiv Shiv
    Managing Director

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