Document:

REGISTRATION RIGHTS AGREEMENT

      THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
September 7, 2004, by and among IPOINT-MEDIA LTD., a company chartered under the
laws of the State of Israel (the "Company"), and NEOMEDIA TECHNOLOGIES, INC, a
Delaware corporation (the "Investor").

      WHEREAS:

      A. In connection with the Investment Agreement (the "Investment
Agreement") of even date herewith between the Company and the Investor, the
Company has agreed, upon the terms and subject to the conditions of the
Investment Agreement, to issue and sell to the Investor ordinary shares (the
"Ordinary Shares") in the Company.

      B. To induce the Investor to execute and deliver the Investment Agreement,
the Company has agreed to provide certain registration rights under the
Securities Act of 1933, as amended, and the rules and regulations there under,
or any similar successor statute (collectively, the "1933 Act"), and applicable
state securities laws.

      NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Investor
hereby agree as follows:

      1. DEFINITIONS.

      As used in this Agreement, the following terms shall have the following
meanings:

            (a) "Person" means a corporation, a limited liability company, an
association, a partnership, an organization, a business, an individual, a
governmental or political subdivision thereof or a governmental agency.

            (b) "Register," "registered," and "registration" refer to a
registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and pursuant to
Rule 415 under the 1933 Act or any successor rule providing for offering
securities on a continuous or delayed basis ("Rule 415"), and the declaration or
ordering of effectiveness of such Registration Statement(s) by the United States
Securities and Exchange SEC (the "SEC").

            (c) "Registrable Securities" means the Ordinary Shares issuable to
the Investor under the Investment Agreement of even date herewith between the
Company and the Investor.

            (d) "Registration Statement" means a registration statement under
the 1933 Act which covers the Registrable Securities.

      2. REGISTRATION.

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            (a) Subject to the terms and conditions of this Agreement, the
Company shall prepare and file, no later than sixty (60) days from the date
hereof (the "Scheduled Filing Deadline"), with the SEC a registration statement
on Form S-1 or SB-2 (or, if the Company is then eligible, on Form S-3) under the
1933 Act (the "Initial Registration Statement") for the registration for the
resale by the Investor of the Registrable Securities. The Company shall cause
the Registration Statement to remain effective until all of the Registrable
Securities have been sold.

            (b) Effectiveness of the Initial Registration Statement. The Company
shall use its best efforts (i) to have the Initial Registration Statement
declared effective by the SEC no later than one hundred fifty (150) days after
the filing thereof (the "Scheduled Effective Deadline") and (ii) to insure that
the Initial Registration Statement and any subsequent Registration Statement
remains in effect until all of the Registrable Securities have been sold,
subject to the terms and conditions of this Agreement. It shall be an event of
default hereunder if the Initial Registration Statement is not declared
effective by the SEC within two hundred seventy (270) days after filing thereof.

            (c) Failure to File or Obtain Effectiveness of the Registration
Statement. In the event the Registration Statement is not filed by the Scheduled
Filing Deadline or is not declared effective by the SEC on or before the
Scheduled Effective Deadline, or if after the Registration Statement has been
declared effective by the SEC, sales cannot be made pursuant to the Registration
Statement (whether because of a failure to keep the Registration Statement
effective, failure to disclose such information as is necessary for sales to be
made pursuant to the Registration Statement, failure to register sufficient
Ordinary Shares or otherwise then as partial relief for the damages to any
holder of Registrable Securities by reason of any such delay in or reduction of
its ability to sell the underlying Ordinary Shares (which remedy shall not be
exclusive of any other remedies at law or in equity), the Company will pay as
liquidated damages (the "Liquidated Damages") to the holder, at the holder's
option, either a cash amount or shares of the Company's Common Stock equal to
two percent (2%) of the Purchase Price (as defined in the Investment Agreement)
as Liquidated Damages for each thirty (30) day period after the Scheduled Filing
Deadline or the Scheduled Effective Deadline as the case may be which shall be
paid on a pro rata basis for any partial thirty (30) day period. Any Liquidated
Damages payable hereunder shall not limit, prohibit or preclude the Investor
from seeking any other remedy available to it under contract, at law or in
equity.

            (d) Liquidated Damages. The Company and the Investor hereto
acknowledge and agree that the sums payable under subsection 2(c) above shall
constitute liquidated damages and not penalties and are in addition to all other
rights of the Investor, including the right to call a default. The parties
further acknowledge that (i) the amount of loss or damages likely to be incurred
is incapable or is difficult to precisely estimate, (ii) the amounts specified
in such subsections bear a reasonable relationship to, and are not plainly or
grossly disproportionate to the probable loss likely to be incurred in
connection with any failure by the Company to obtain or maintain the
effectiveness of a Registration Statement, (iii) one of the reasons for the
Company and the Investor reaching an agreement as to such amounts was the
uncertainty and cost of litigation regarding the question of actual damages, and
(iv) the Company and the Investor are sophisticated business parties and have
been represented by sophisticated and able legal counsel and negotiated this
Agreement at arm's length.

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      3. RELATED OBLIGATIONS.

            (a) The Company shall keep the Registration Statement effective
pursuant to Rule 415 at all times until the earlier of (i) date on which the
Investor shall have sold all the Registrable Securities covered by such
Registration Statement or (ii) the Registrable Securities are eligible to be
sold pursuant to Rule 144(k) under the 1933 Act (the "Registration Period"),
which Registration Statement (including any amendments or supplements thereto
and prospectuses contained therein) shall not contain any 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 in which
they were made, not misleading.

            (b) The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to a Registration
Statement and the prospectus used in connection with such Registration
Statement, which prospectus is to be filed pursuant to Rule 424 promulgated
under the 1933 Act, as may be necessary to keep such Registration Statement
effective at all times during the Registration Period, and, during such period,
comply with the provisions of the 1933 Act with respect to the disposition of
all Registrable Securities of the Company covered by such Registration Statement
until such time as all of such Registrable Securities shall have been disposed
of in accordance with the intended methods of disposition by the seller or
sellers thereof as set forth in such Registration Statement. In the case of
amendments and supplements to a Registration Statement which are required to be
filed pursuant to this Agreement (including pursuant to this Section 3(b)) by
reason of the Company's filing a report on Form 10-KSB, Form 10-QSB or Form 8-K
or any analogous report under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), the Company shall incorporate such report by reference into
the Registration Statement, if applicable, or shall file such amendments or
supplements with the SEC on the same day on which the 1934 Act report is filed
which created the requirement for the Company to amend or supplement the
Registration Statement.

            (c) The Company shall furnish to each Investor whose Registrable
Securities are included in any Registration Statement, without charge, (i) at
least one (1) copy of such Registration Statement as declared effective by the
SEC and any amendment(s) thereto, including financial statements and schedules,
all documents incorporated therein by reference, all exhibits and each
preliminary prospectus, (ii) ten (10) copies of the final prospectus included in
such Registration Statement and all amendments and supplements thereto (or such
other number of copies as such Investor may reasonably request) and (iii) such
other documents as such Investor may reasonably request from time to time in
order to facilitate the disposition of the Registrable Securities owned by such
Investor.

            (d) The Company shall use its best efforts to (i) register and
qualify the Registrable Securities covered by a Registration Statement under
such other securities or "blue sky" laws of such jurisdictions in the United
States as any Investor reasonably requests, (ii) prepare and file in those
jurisdictions, such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition

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thereto to (w) make any change to its certificate of incorporation or by-laws,
(x) qualify to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d), (y) subject itself to general
taxation in any such jurisdiction, or (z) file a general consent to service of
process in any such jurisdiction. The Company shall promptly notify each
Investor who holds Registrable Securities of the receipt by the Company of any
notification with respect to the suspension of the registration or qualification
of any of the Registrable Securities for sale under the securities or "blue sky"
laws of any jurisdiction in the United States or its receipt of actual notice of
the initiation or threat of any proceeding for such purpose.

            (e) As promptly as practicable after becoming aware of such event or
development, the Company shall notify each Investor in writing of the happening
of any event as a result of which the prospectus included in a Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omission 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 (provided that in no event shall such notice contain any
material, nonpublic information), and promptly prepare a supplement or amendment
to such Registration Statement to correct such untrue statement or omission, and
deliver ten (10) copies of such supplement or amendment to each Investor. The
Company shall also promptly notify each Investor in writing (i) when a
prospectus or any prospectus supplement or post-effective amendment has been
filed, and when a Registration Statement or any post-effective amendment has
become effective (notification of such effectiveness shall be delivered to each
Investor by facsimile on the same day of such effectiveness), (ii) of any
request by the SEC for amendments or supplements to a Registration Statement or
related prospectus or related information, and (iii) of the Company's reasonable
determination that a post-effective amendment to a Registration Statement would
be appropriate.

            (f) The Company shall use its best efforts to prevent the issuance
of any stop order or other suspension of effectiveness of a Registration
Statement, or the suspension of the qualification of any of the Registrable
Securities for sale in any jurisdiction within the United States of America and,
if such an order or suspension is issued, to obtain the withdrawal of such order
or suspension at the earliest possible moment and to notify each Investor who
holds Registrable Securities being sold of the issuance of such order and the
resolution thereof or its receipt of actual notice of the initiation or threat
of any proceeding for such purpose.

            (g) At the reasonable request of any Investor, the Company shall
furnish to such Investor, on the date of the effectiveness of the Registration
Statement and thereafter from time to time on such dates as an Investor may
reasonably request (i) a letter, dated such date, from the Company's independent
certified public accountants in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, and (ii) an opinion, dated as of such date, of counsel
representing the Company for purposes of such Registration Statement, in form,
scope and substance as is customarily given in an underwritten public offering,
addressed to the Investor.

            (h) Upon five (5) days prior written notice by the Investor, which
notice shall not be given more than one (1) time per calendar quarter, the
Company shall make available for inspection by (i) any Investor and (ii) one (1)
firm of accountants or other agents retained by the Investor (collectively, the
"Inspectors") all pertinent financial and other records, and pertinent corporate

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documents and properties of the Company (collectively, the "Records"), as shall
be reasonably deemed necessary by each Inspector, and cause the Company's
officers, directors and employees to supply all information which any Inspector
may reasonably request; provided, however, that each Inspector shall agree, and
each Investor hereby agrees, to hold in strict confidence and shall not make any
disclosure (except to an Investor) or use any Record or other information which
the Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (a) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in any
Registration Statement or is otherwise required under the 1933 Act, (b) the
release of such Records is ordered pursuant to a final, non-appealable subpoena
or order from a court or government body of competent jurisdiction, or (c) the
information in such Records has been made generally available to the public
other than by disclosure in violation of this or any other agreement of which
the Inspector and the Investor has knowledge. Each Investor agrees that it
shall, upon learning that disclosure of such Records is sought in or by a court
or governmental body of competent jurisdiction or through other means, give
prompt notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, the Records deemed confidential.

            (i) The Company shall hold in confidence and not make any disclosure
of information concerning an Investor provided to the Company unless (i)
disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor's
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

            (j) The Company shall use its best efforts either to cause all the
Registrable Securities covered by a Registration Statement (i) to be listed on
each securities exchange on which securities of the same class or series issued
by the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange or (ii) the
inclusion for quotation on the National Association of Securities Dealers, Inc.
OTC Bulletin Board for such Registrable Securities. The Company shall pay all
fees and expenses in connection with satisfying its obligation under this
Section 3(j).

            (k) The Company shall cooperate with the Investor who hold
Registrable Securities being offered and, to the extent applicable, to
facilitate the timely preparation and delivery of certificates (not bearing any
restrictive legend) representing the Registrable Securities to be offered
pursuant to a Registration Statement and enable such certificates to be in such
denominations or amounts, as the case may be, as the Investor may reasonably
request and registered in such names as the Investor may request.

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            (l) The Company shall use its best efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to consummate the disposition of such Registrable Securities.

            (m) The Company shall make generally available to its security
holders as soon as practical, but not later than ninety (90) days after the
close of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 under the 1933 Act) covering a twelve (12) month
period beginning not later than the first day of the Company's fiscal quarter
next following the effective date of the Registration Statement.

            (n) The Company shall otherwise use its best efforts to comply with
all applicable rules and regulations of the SEC in connection with any
registration hereunder.

            (o) Within two (2) business days after a Registration Statement
which covers Registrable Securities is declared effective by the SEC, the
Company shall deliver, and shall cause legal counsel for the Company to deliver,
to the transfer agent for such Registrable Securities (with copies to the
Investor whose Registrable Securities are included in such Registration
Statement) confirmation that such Registration Statement has been declared
effective by the SEC in the form attached hereto as Exhibit A.

            (p) The Company shall take all other reasonable actions necessary to
expedite and facilitate disposition by the Investor of Registrable Securities
pursuant to a Registration Statement.

      4. OBLIGATIONS OF THE INVESTOR.

      Each Investor agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 3(f) or the first
sentence of 3(e), such Investor will immediately discontinue disposition of
Registrable Securities pursuant to any Registration Statement(s) covering such
Registrable Securities until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(e) or receipt of
notice that no supplement or amendment is required. Notwithstanding anything to
the contrary, the Company shall cause its transfer agent to deliver unlegended
certificates for Ordinary Shares to a transferee of an Investor in accordance
with the terms of the Securities Purchase Agreement in connection with any sale
of Registrable Securities with respect to which an Investor has entered into a
contract for sale prior to the Investor's receipt of a notice from the Company
of the happening of any event of the kind described in Section 3(f) or the first
sentence of 3(e) and for which the Investor has not yet settled.

      5. EXPENSES OF REGISTRATION.

      All expenses incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers, legal and accounting
fees shall be paid by the Company.

      6. INDEMNIFICATION.

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      With respect to Registrable Securities which are included in a
Registration Statement under this Agreement:

            (a) To the fullest extent permitted by law, the Company will, and
hereby does, indemnify, hold harmless and defend each Investor, the directors,
officers, partners, employees, agents, representatives of, and each Person, if
any, who controls any Investor within the meaning of the 1933 Act or the 1934
Act (each, an "Indemnified Person"), against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys'
fees, amounts paid in settlement or expenses, joint or several (collectively,
"Claims") incurred in investigating, preparing or defending any action, claim,
suit, inquiry, proceeding, investigation or appeal taken from the foregoing by
or before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto ("Indemnified Damages"), to which any of them
may become subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement of a material fact in a
Registration Statement or any post-effective amendment thereto or in any filing
made in connection with the qualification of the offering under the securities
or other "blue sky" laws of any jurisdiction in which Registrable Securities are
offered ("Blue Sky Filing"), or the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; (ii) any untrue statement or alleged untrue statement of
a material fact contained in any final prospectus (as amended or supplemented,
if the Company files any amendment thereof or supplement thereto with the SEC)
or the omission or alleged omission to state therein any material fact necessary
to make the statements made therein, in light of the circumstances under which
the statements therein were made, not misleading; or (iii) any violation or
alleged violation by the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation there under relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement (the matters in the foregoing
clauses (i) through (iii) being, collectively, "Violations"). The Company shall
reimburse the Investor and each such controlling person promptly as such
expenses are incurred and are due and payable, for any legal fees or
disbursements or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(a): (x) shall not apply to a Claim by an Indemnified Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by such Indemnified Person
expressly for use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto; (y) shall not be
available to the extent such Claim is based on a failure of the Investor to
deliver or to cause to be delivered the prospectus made available by the
Company, if such prospectus was timely made available by the Company pursuant to
Section 3(c); and (z) shall not apply to amounts paid in settlement of any Claim
if such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld. Notwithstanding anything to
the contrary herein or in any other agreement entered into between the Company
and the Investor, the Company acknowledges and agrees that it is solely

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responsible and shall indemnify each Indemnified Person for the contents of any
registration statement, prospectus or other filing made with the SEC or
otherwise used in the offering of the Company's securities (except as such
disclosure relates solely to the Investor and then only to the extent that such
disclosure conforms with information furnished in writing by the Investor to the
Company), even if the Investor or its agents as an accommodation to the Company
participate or assist in the preparation of such registration statement,
prospectus or other SEC filing. The Company shall retain its own legal counsel
to review, edit, confirm and do all things such counsel deems necessary or
desirable to such registration statement, prospectus or other SEC filing to
ensure that it does not contain an untrue statement or alleged untrue statement
of material fact or omit or alleged to omit a material fact necessary to make
the statements made therein, in light of the circumstances under which the
statements were made, not misleading. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the transfer of the Registrable Securities
by the Investor pursuant to Section 9 hereof.

            (b) In connection with a Registration Statement, each Investor
agrees to severally and not jointly indemnify, hold harmless and defend, to the
same extent and in the same manner as is set forth in Section 6(a), the Company,
each of its directors, each of its officers, employees, representatives, or
agents and each Person, if any, who controls the Company within the meaning of
the 1933 Act or the 1934 Act (each an "Indemnified Party"), against any Claim or
Indemnified Damages to which any of them may become subject, under the 1933 Act,
the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise
out of or is based upon any Violation, in each case to the extent, and only to
the extent, that such Violation occurs in reliance upon and in conformity with
written information furnished to the Company by such Investor expressly for use
in connection with such Registration Statement; and, subject to Section 6(d),
such Investor will reimburse any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such Claim; provided,
however, that the indemnity agreement contained in this Section 6(b) and the
agreement with respect to contribution contained in Section 7 shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of such Investor, which consent shall not be
unreasonably withheld; provided, further, however, that the Investor shall be
liable under this Section 6(b) for only that amount of a Claim or Indemnified
Damages as does not exceed the net proceeds to such Investor as a result of the
sale of Registrable Securities pursuant to such Registration Statement. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive the transfer of
the Registrable Securities by the Investor pursuant to Section 9.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(b) with respect to any prospectus shall
not inure to the benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the prospectus was corrected and such new
prospectus was delivered to each Investor prior to such Investor's use of the
prospectus to which the Claim relates.

            (c) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving a Claim,
such Indemnified Person or Indemnified Party shall, if a Claim in respect
thereof is to be made against any indemnifying party under this Section 6,
deliver to the indemnifying party a written notice of the commencement thereof,
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one (1) counsel for such

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Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding. The Indemnified
Party or Indemnified Person shall cooperate fully with the indemnifying party in
connection with any negotiation or defense of any such action or claim by the
indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person which
relates to such action or claim. The indemnifying party shall keep the
Indemnified Party or Indemnified Person fully apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. No
indemnifying party shall be liable for any settlement of any action, claim or
proceeding effected without its prior written consent; provided, however, that
the indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such claim or litigation. Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or corporations relating to the matter for which indemnification has been made.
The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this Section 6, except to the extent that the indemnifying party is
prejudiced in its ability to defend such action.

            (d) The indemnification required by this Section 6 shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Damages are incurred.

            (e) The indemnity agreements contained herein shall be in addition
to (i) any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.

      7. CONTRIBUTION.

      To the extent any indemnification by an indemnifying party is prohibited
or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no seller of Registrable Securities guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty of

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fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds received by
such seller from the sale of such Registrable Securities.

      8. REPORTS UNDER THE 1934 ACT.

      With a view to making available to the Investor the benefits of Rule 144
promulgated under the 1933 Act or any similar rule or regulation of the SEC that
may at any time permit the Investor to sell securities of the Company to the
public without registration ("Rule 144") the Company agrees to:

            (a) make and keep public information available, as those terms are
understood and defined in Rule 144;

            (b) file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the Company remains subject to such requirements (it being understood that
nothing herein shall limit the Company's obligations under Section 4(c) of the
Securities Purchase Agreement) and the filing of such reports and other
documents as are required by the applicable provisions of Rule 144; and

            (c) furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested to
permit the Investor to sell such securities pursuant to Rule 144 without
registration.

      9. AMENDMENT OF REGISTRATION RIGHTS.

      Provisions of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or prospectively), only with the written consent of the Company and Investor who
then hold at least two-thirds (2/3) of the Registrable Securities. Any amendment
or waiver effected in accordance with this Section 9 shall be binding upon each
Investor and the Company. No such amendment shall be effective to the extent
that it applies to fewer than all of the holders of the Registrable Securities.
No consideration shall be offered or paid to any Person to amend or consent to a
waiver or modification of any provision of any of this Agreement unless the same
consideration also is offered to all of the parties to this Agreement.

      10. MISCELLANEOUS.

            (a) A Person is deemed to be a holder of Registrable Securities
whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two (2) or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or
election received from the registered owner of such Registrable Securities.

            (b) Any notices, consents, waivers or other communications required
or permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered: (i) upon receipt, when delivered

                                       10
<PAGE>

personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one (1) business day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for such
communications shall be:

If to the Company, to:       iPoint-Media Ltd.
                             2a Habarzel Street
                             Tel-Aviv 61132, Israel
                             Attention:  Muki Geller
                             Telephone:  972-3-7657265
                             Facsimile:   972-3-7657368

With a copy to:              Sichenzia Ross Friedman Ference LLP
                             1065 Avenue of the Americas
                             New York, New York 10018
                             Attn:    Gregory Sichenzia
                             Telephone:        (212) 930-9700
                             Facsimile:        (212) 930-9725

If to an Investor, to its address and facsimile number on the Schedule of
Investor attached hereto, with copies to such Investor's representatives as set
forth on the Schedule of Investor or to such other address and/or facsimile
number and/or to the attention of such other person as the recipient party has
specified by written notice given to each other party five (5) days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

            (c) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

            (d) The laws of the State of Florida shall govern all issues
concerning the relative rights of the Company and the Investor as its
stockholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of Florida, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of Florida or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Florida. Each party hereby irrevocably
submits to the non-exclusive jurisdiction of the Superior Courts of the State of
Florida, sitting in ________ County, Florida and federal courts for the District
of Florida sitting in ________, Florida, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is

                                       11
<PAGE>

brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

            (e) This Agreement and the Investment Agreement constitute the
entire agreement among the parties hereto with respect to the subject matter
hereof and thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein. This
Agreement and the Investment Agreement supersede all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof and thereof.

            (f) This Agreement shall inure to the benefit of and be binding upon
the permitted successors and assigns of each of the parties hereto.

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

            (h) This Agreement may be executed in identical counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same agreement. This Agreement, once executed by a party, may be delivered
to the other party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.

            (i) Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

The language used in this Agreement will be deemed to be the language chosen by
the parties to express their mutual intent and no rules of strict construction
will be applied against any party.

            (j) This Agreement is intended for the benefit of the parties hereto
and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.

                                       12
<PAGE>

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

                                       COMPANY:
                                       IPOINT-MEDIA LTD.

                                       By:_________________________________
                                       Name:_______________________________
                                       Its:________________________________

                                       13
<PAGE>

                                   SCHEDULE I

                               SCHEDULE OF BUYERS

<TABLE>
<CAPTION>
                                                                                               Address/Facsimile
              Name                                    Signature                                 Number of Buyer
-------------------------------    --------------------------------------------    --------------------------------------
<S>                                <C>                                             <C>
NeoMedia Technologies, Inc.        By:                                              2201 Second Street -
                                      -----------------------------------------
                                                                                    Suite 402

                                   Name:    Charles T. Jensen                       Fort Myers, FL 33901

                                   Its:     President & Chief Executive Officer     Facsimile:  (239) 337-3668
</TABLE>

<PAGE>

                                    EXHIBIT A

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

INSERT

Attention:

      Re:   IPOINT-MEDIA LTD.

Ladies and Gentlemen:

      We are counsel to IPOINT-MEDIA LTD. (the "Company"), and have represented
the Company in connection with that certain Securities Purchase Agreement (the
"Securities Purchase Agreement") entered into by and among the Company and the
investor named therein (collectively, the "Investor") pursuant to which the
Company issued to the Investor shares of its Common Stock, par value $0.001 per
share (the "Common Stock"). Pursuant to the Purchase Agreement, the Company also
has entered into a Registration Rights Agreement with the Investor (the
"Registration Rights Agreement") pursuant to which the Company agreed, among
other things, to register the Registrable Securities (as defined in the
Registration Rights Agreement) under the Securities Act of 1933, as amended (the
"1933 Act"). In connection with the Company's obligations under the Registration
Rights Agreement, on ____________ ____, the Company filed a Registration
Statement on Form ________ (File No. 333-_____________) (the "Registration
Statement") with the Securities and Exchange SEC (the "SEC") relating to the
Registrable Securities which names each of the Investor as a selling stockholder
there under.

      In connection with the foregoing, we advise you that a member of the SEC's
staff has advised us by telephone that the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.

                                       Very truly yours,

                                       [COMPANY COUNSEL]

                                       By:
                                          --------------------------
cc:      [LIST NAMES OF INVESTOR]INVESTMENT AGREEMENT

      THIS INVESTMENT AGREEMENT (the "Agreement") is dated as of October ___,
2004, by and between CORNELL CAPITAL PARTNERS, LP, a Delaware limited
partnership (the "Buyer"), and IPOINT-MEDIA LTD., a company chartered under the
laws of the State of Israel (the "Company").

                                    Recitals:

      The parties have reached an agreement pursuant to which the Buyer shall
make an investment in the Company, and the Company shall issue and sell to the
Buyer ordinary shares, par value NIS 1 per share (the "Ordinary Shares"), all in
accordance with the terms hereof.

                                   Agreement:

      NOW, THEREFORE, in consideration of the mutual premises herein set forth
and certain other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:

      1. ISSUANCE OF SHARES AND RELATED TRANSACTIONS.

            1.1. Issuance of Shares. At Closing (as defined below), subject to
the terms, restrictions and conditions of this Agreement, the Buyer shall
acquire, and the Company shall sell, issue and deliver to the Buyer a total of
40,704 ordinary shares (the "Buyer's Stock"). All Buyer's Stock to be issued
hereunder shall be free and clear of all liens, claims, pledges, mortgages,
restrictions, obligations, security interests and encumbrances of any kind,
nature and description (collectively, "Encumbrances").

            1.2. Purchase Price. The purchase price (the "Purchase Price") for
the Buyer's Stock shall be equal to $1,000,000, which shall be paid to the
Company in immediately available funds on the Closing Date (as set forth in
Section 1.3 hereof). The Purchase Price shall be reduced by the Fee described in
Section 11.9 hereof. In addition, the Buyer shall hold-back $75,000, which is
the estimated printing and shipping costs of distributing a prospectus pursuant
to the Registration Rights Agreement of even date herewith. To the extent that
the actual printing and shipping costs are more than the estimate described
herein, then the Company shall pay the balance. To the extent that the actual
printing and shipping costs are less than the estimate, then the Buyer shall
refund the difference to the Company.

            1.3. Closing. The parties to this Agreement shall consummate the
transactions contemplated by this Agreement at a closing (the "Closing") to be
held no later than October ___, 2004; provided, in no event shall the Closing
occur prior to the satisfaction of the conditions precedent set forth in
Sections 6, 7 and 8 hereof. The date of Closing is referred to herein as the
"Closing Date." The Closing shall take place at the offices of counsel to the
Buyer, or at such other place as may be mutually agreed upon by the Buyer and
the Company. At the Closing, the Company shall deliver to the Buyer certificates
representing the Buyer's Stock.

<PAGE>

      2. ADDITIONAL AGREEMENTS.

            2.1. Agreement to Register the Buyer's Ordinary Shares. The Company
shall register the Buyer's Stock with the SEC pursuant to the terms of a
Registration Rights Agreement of even date herewith between the Company and the
Buyer.

            2.2. Access and Inspection, Etc. The Company shall allow the Buyer
and its authorized representatives full access during normal business hours from
and after the date hereof and prior to the Closing Date to all of the
properties, books, contracts, commitments and records of the Company for the
purpose of making such investigations as the Buyer may reasonably request in
connection with the transactions contemplated hereby, and shall cause the
Company to furnish Buyer such information concerning its affairs as Buyer may
reasonably request. The Company has caused and shall cause its personnel to
assist the Buyer in making such investigation and shall use their best efforts
to cause the counsel, accountants, engineers and other non-employee
representatives of the Company to be reasonably available to Buyer for such
purposes.

            2.3. Public Announcements. The parties will consult with each other
before issuing any press releases or otherwise making any public statement with
respect to this Agreement or any of the transactions contemplated hereby and no
party will issue any such press release or make any such public statement
without the prior written consent of the other parties, except as may be
required by law or by the rules and regulations of any governmental authority or
securities exchange.

            2.4. Best Efforts. Subject to the terms and conditions provided in
this Agreement, each of the parties shall use its best efforts in good faith to
take or cause to be taken as promptly as practicable all reasonable actions that
are within its power to cause to be fulfilled those conditions precedent to its
obligations or the obligations of the other parties to consummate the
transactions contemplated by this Agreement that are dependent upon its actions.

            2.5. Further Assurances. The parties shall deliver any and all other
instruments or documents required to be delivered pursuant to, or necessary or
proper in order to give effect to, the provisions of this Agreement, including,
without limitation, to issue the Buyer's Stock and to consummate the
transactions contemplated by this Agreement.

            2.6. Consolidation; Merger. The Company shall not, at any time after
the date hereof, without the prior written consent of the Buyer, effect any
merger or consolidation of the Company with or into, or a transfer of all or
substantially all the assets of the Company to another entity (a "Consolidation
Event"), regardless of whether the Company is the surviving entity, unless such
Consolidation Event would result in the Buyer receiving earning a net return of
100% on the investment made pursuant to that Investment Agreement of even date
herewith.

      3. REPRESENTATIONS, COVENANTS AND WARRANTIES OF THE COMPANY.

                                       2
<PAGE>

      To induce Buyer to enter into this Agreement and to consummate the
transactions contemplated hereby, the Company represents and warrants to and
covenants with the Buyer as follows:

            3.1. Organization; Compliance. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Israel. The Company is: (a) entitled to own or lease its properties and to carry
on its business as and in the places where such business is now conducted, and
(b) duly licensed and qualified in all jurisdictions where the character of the
property owned by it or the nature of the business transacted by it makes such
license or qualification necessary, except where the failure to do so would not
result in a material adverse effect on the Company.

            3.2. Capitalization and Related Matters.

                  (a) The Company has an authorized capital consisting of
20,000,000 Ordinary Shares, of which 297,000 Ordinary Shares are issued and
outstanding as of the date hereof (excluding the Buyer's Stock). All Ordinary
Shares are duly and validly issued, fully paid and nonassessable. No Ordinary
Shares (i) were issued in violation of the preemptive rights of any shareholder,
or (ii) are held as treasury stock.

                  (b) Except as set forth in Schedule 3.2(b), there are no
outstanding any securities convertible into Ordinary Shares or any other capital
stock of the Company nor any rights to subscribe for or to purchase, or any
options for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, such capital stock or securities convertible into such
capital stock (collectively, "Securities Rights"). The Company: (i) is not
subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any of its capital stock; or (ii) has no liability for
dividends or other distributions declared or accrued, but unpaid, with respect
to any capital stock.

                  (c) The Company is not a party to any agreement, understanding
or arrangement, direct or indirect, relating to any class or series of the
Company's capital stock, including, without limitation, any voting agreement,
restriction on resale, shareholder agreement or registration rights agreement.

            3.3. Subsidiaries and Investments.

                  (a) Schedule 3.3 discloses with respect to each Subsidiary (as
defined below) (i) its name, (ii) the jurisdiction of its organization, (iii)
the number of its authorized shares or other equity interests, (iv) the number
of its outstanding shares or other equity interests of each class or series, and
(v) the name of the owner and the number and percentage of outstanding shares or
other equity interests of each class or series of such Subsidiary owned of
record and, if different, owned beneficially by the Company and any other
person. All of the outstanding capital stock and other equity interests of each
of the Subsidiaries is validly issued, fully paid and nonassessable and was
issued in compliance with all applicable federal and state securities or "blue
sky" laws and regulations. There are no Securities Rights relating to any shares
of capital stock, other equity interests or other securities of any of the
Subsidiaries. The Company and the Subsidiaries have good, marketable and

                                       3
<PAGE>

exclusive title to the shares or other equity interests disclosed on Schedule
3.3 as being owned by each of them, free and clear of all Encumbrances. All
rights and powers to vote such shares or other equity interests are held
exclusively by the Company, directly or indirectly through one or more of the
Subsidiaries, as the case may be. Each Subsidiary is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and has the corporate power and authority to own
or lease its properties and to carry on its business as now conducted. For the
purposes hereof, a "Subsidiary" means any corporation, limited liability
company, partnership, joint venture or other entity in which the Company owns,
directly or indirectly, more than 20% of the outstanding voting securities or
equity interests.

                  (b) Except as disclosed in Schedule 3.3, the Company does not
own, nor has it ever owned, any equity interest in any corporation, limited
liability company, partnership, joint venture or other entity.

            3.4. Execution; No Inconsistent Agreements; Etc.

                  (a) This Agreement is a valid and binding agreement of the
Company, enforceable in accordance with its terms, except as such enforcement
may be limited by bankruptcy or similar laws affecting the enforcement of
creditors' rights generally, and the availability of equitable remedies.

                  (b) The execution and delivery of this Agreement by the
Company does not, and the consummation of the transactions contemplated hereby
will not, constitute a breach or violation of the charter or bylaws of the
Company, or a default under any of the terms, conditions or provisions of (or an
act or omission that would give rise to any right of termination, cancellation
or acceleration under) any note, bond, mortgage, lease, indenture, agreement or
obligation to which the Company is a party, pursuant to which the Company
otherwise receives benefits, or to which any of the properties of the Company is
subject.

            3.5. Corporate Records. The statutory records, including the stock
register and minute books of the Company, fully reflect all issuances, transfers
and redemptions of its capital stock, correctly show and will correctly show the
total number of shares of its capital stock issued and outstanding on the date
hereof and on the Closing Date, the charter or other organizational documents
and all amendments thereto, and bylaws as amended and currently in force.

            3.6. Financial Statements.

                  (a) The Company has delivered to the Buyer (i) the
consolidated audited balance sheet of the Company as of December 31, 2002, and
the consolidated audited consolidated profit and loss statement of the Company
for the fiscal year ended December 31, 2002 and (ii) the consolidated unaudited
balance sheet of the Company as of December 31, 2003 and the consolidated
unaudited profit and loss statement of the Company for the twelve months ended
December 31, 2003 (the balance sheet as of December 31, 2003 is hereinafter
referred to as the "2003 Company Balance Sheet"). All the foregoing financial

                                       4
<PAGE>

statements, and any financial statements delivered pursuant to subsection (c)
below, are referred to herein collectively as the "Company Financial
Statements."

                  (b) The Company Financial Statements have been and will be
prepared in accordance with U.S. GAAP, applied on a consistent basis (except
that the unaudited statements do not contain all the disclosures required by
GAAP), and fairly reflect and will reflect in all material respects the
financial condition of the Company as at the dates thereof and the results of
the operations of the Company for the periods then ended.

            3.7. Liabilities. Except as described in Schedule 3.7 hereof, the
Company has no material debt, liability or obligation of any kind, whether
accrued, absolute, contingent or otherwise, except: (a) those reflected on the
2003 Company Balance Sheet, including the notes thereto, and (b) liabilities
incurred in the ordinary course of business since December 31, 2003, none of
which have had or will have a material adverse effect on the financial condition
of the Company.

            3.8. Absence of Changes. Except as described in Schedule 3.8 and in
the other Schedules to this Agreement, from December 31, 2003 to the date of
this Agreement:

                  (a) there has not been any adverse change in the business,
assets, liabilities, results of operations or financial condition of the Company
or in its relationships with suppliers, customers, employees, lessors or others
other than changes in the ordinary course of business, none of which, singularly
or in the aggregate, have had or will have a material adverse effect on the
business, properties or financial condition of the Company; and

                  (b) the Company has complied with the covenants and
restrictions set forth in Section 5 to the same extent as if this Agreement had
been executed on, and had been in effect since, December 31, 2003.

            3.9. Title to Properties. The Company has good and marketable title
to all of its properties and assets, real and personal, including, but not
limited to, those reflected in the 2003 Company Balance Sheet (except as since
sold or otherwise disposed of in the ordinary course of business, or as
expressly provided for in this Agreement), free and clear of all Encumbrances of
any kind or character except: (a) those securing liabilities of the Company
incurred in the ordinary course (with respect to which no material default
exists); (b) liens of 2004 real estate and personal property taxes; and (c)
imperfections of title and Encumbrances, if any, which, in the aggregate (i) are
not substantial in amount; (ii) do not detract from the value of the property
subject thereto or impair the operations of the Company or; and (iii) do not
have a material adverse effect on the business, properties or assets of the
Company.

            3.10. Compliance With Law. The business and activities of the
Company has at all times been conducted in accordance with its articles and
memorandum of association and any applicable law, regulation, ordinance, order,
License (defined below), permit, rule, injunction or other restriction or ruling
of any court or administrative or governmental agency, ministry, or body, except
where the failure to do so would not result in a material adverse effect on the
Company.

                                       5
<PAGE>

            3.11. Taxes. The Company has duly filed all material federal, state,
local and foreign tax returns and reports, and all returns and reports of all
other governmental units having jurisdiction with respect to taxes imposed on it
or on its income, properties, sales, franchises, operations or employee benefit
plans or trusts, all such returns were complete and accurate when filed, and all
taxes and assessments payable by the Company have been paid to the extent that
such taxes have become due. All taxes accrued or payable by the Company for all
periods through December 31, 2003 have been accrued or paid in full, whether or
not due and payable and whether or not disputed. The Company has withheld proper
and accurate amounts from its employees for all periods in full compliance with
the tax withholding provisions of applicable foreign, federal, state and local
tax laws. There are no waivers or agreements by the Company for the extension of
time for the assessment of any taxes. The tax returns of the Company have never
been examined by any authority or other administrative body or court of any
state or country. There are not now any examinations of the income tax returns
of the Company pending, or any proposed deficiencies or assessments against the
Company of additional taxes of any kind. The Company shall duly and timely
prepare and file all material federal, state, local and foreign tax returns and
reports for 2004, and all returns and reports of all other governmental units
having jurisdiction with respect to taxes imposed on the Company or on its
income, properties, sales, franchises, operations or employee benefit plans or
trusts, and all such returns will be complete and accurate when filed.

            3.12. Real Properties. The Company does not have an interest in any
real property, except for the Leases (as defined below).

            3.13. Leases of Real Property. All leases pursuant to which the
Company is lessee or lessor of any real property (the "Leases") are listed in
Schedule 3.13 and are valid and enforceable in accordance with their terms.
There is not under any of such leases (a) any material default or any claimed
material default by the Company or any event of default or event which with
notice or lapse of time, or both, would constitute a material default by the
Company and in respect to which the Company has not taken adequate steps to
prevent a default on its part from occurring, or (b) to the knowledge of the
Company, any material default by any lessee of the Company or any event of
default or event which with notice or lapse of time, or both, would constitute a
material default by any lessee. The copies of the Leases heretofore furnished to
Buyer are true, correct and complete, and such Leases have not been modified in
any respect since the date they were so furnished, and are in full force and
effect in accordance with their terms. The Company is lawfully in possession of
all real properties of which they are a lessee (the "Leased Properties").

            3.14. Contingencies. Except as disclosed on Schedule 3.14, there are
no actions, suits, claims or proceedings pending, or to the knowledge of the
Company threatened against, by or affecting, the Company in any court or before
any arbitrator or governmental agency that may have a material adverse effect on
the Company or which could materially and adversely affect the right or ability
of the Company to consummate the transactions contemplated hereby. To the
knowledge of the Company, there is no valid basis upon which any such action,
suit, claim, or proceeding may be commenced or asserted against it. There are no
unsatisfied judgments against the Company and no consent decrees or similar
agreements to which the Company is subject and which could have a material
adverse effect on the Company.

                                       6
<PAGE>

            3.15. Products Liability; Warranties; Insurance. The Company will
have not loss, damage, liability, fine, penalty, cost and expense (each, a
"Liability") that is not fully covered by insurance relating to any product
manufactured, distributed or sold by the Company prior to the Closing, whether
or not such Liability is related to products that are defective or improperly
designed or manufactured or are in breach of any express or implied product
warranty.

            3.16. Intellectual Property Rights.

                  (a) The Company owns and possesses all right, title and
interest in and to, or has a valid license to use, all of the Proprietary Rights
(as defined below) necessary for the operation of its business as presently
conducted and none of such Proprietary Rights have been abandoned;

                  (b) no claim by any third party contesting the validity,
enforceability, use or ownership of any such Proprietary Rights has been made,
is currently outstanding or, to the knowledge of the Company, is threatened, and
to the knowledge of the Company there is no reasonable basis for any such claim;

                  (c) neither the Company nor any registered agent of any of the
foregoing has received any notice of, nor is the Company aware of any reasonable
basis for an allegation of, any infringement or misappropriation by, or conflict
with, any third party with respect to such Proprietary Rights, nor has the
Company, or any registered agent of any of them received any claim of
infringement or misappropriation of or other conflict with any Proprietary
Rights of any third party;

                  (d) the Company has not infringed, misappropriated or
otherwise violated any Proprietary Rights of any third parties, and the Company
is not aware of any infringement, misappropriation or conflict which will occur
as a result of the continued operation of the Company as presently operated and
as contemplated to be operated or as a result of the consummation of the
transactions contemplated hereby; and

                  (e) all employees who have contributed to or participated in
the conception and/or development of all or any part of the Proprietary Rights
which are not licensed to the Company from a third party either (i) have been
party to a "work-for-hire" arrangement or agreement with the Company, in
accordance with applicable federal and state law, that has accorded the Company
full, effective, exclusive, and original ownership of all tangible and
intangible property thereby arising, or (ii) have executed appropriate
instruments of assignment in favor of the Company as assignee that have conveyed
to the Company full, effective and exclusive ownership of all tangible and
intangible property thereby arising.

                  (f) As used herein, the term "Proprietary Rights" means all
proprietary information of the Company, as the case may be, including all
patents, patent applications, patent disclosures and inventions (whether or not
patentable and whether or not reduced to practice), all trademarks, service
marks, trade dress, trade names, corporate names, domain names, copyrights, all
trade secrets, confidential information, ideas, formulae, compositions,
know-how, processes and techniques, drawings, specifications, designs, logos,

                                       7
<PAGE>

plans, improvements, proposals, technical and computer data, documentation and
software, financial, business and marketing plans, and related information and
all other proprietary, industrial or intellectual property rights relating to
the business of the Company, including those proprietary, industrial or
intellectual property rights found at the Company's websites listed on Schedule
3.16.

                  (g) The consummation of the transactions contemplated by this
Agreement will not adversely affect the right of the Company to continue to use
the Proprietary Rights. To the extent that the registration of any Proprietary
Right is required by law, such Proprietary Right has been duly and validly
registered or filed, and any fees that are necessary to maintain in force any
Proprietary Rights or registrations thereof have been paid. Schedule 3.16 sets
forth a list and description of the copyrights, trademarks, service marks, trade
dress, trade names and domain names used or held by the Company and, where
appropriate, the date, serial or registration number, and place of any
registration thereof.

            3.17. Material Contracts. Schedule 3.17 contains a complete list of
all contracts of the Company which involve consideration in excess of the
equivalent of $25,000 or have a term of one year or more (the "Material
Contracts"). The Company has delivered to Buyer a true, correct and complete
copy of each of the written contracts, and a summary of each oral contract,
listed on Schedule 3.17. Except as disclosed in Schedule 3.17: (a) the Company
has performed all material obligations to be performed by them under all such
contracts, and is not in material default thereof, and (b) no condition exists
or has occurred which with the giving of notice or the lapse of time, or both,
would constitute a material default by the Company or accelerate the maturity
of, or otherwise modify, any such contract, and (c) all such contracts are in
full force and effect. No material default by any other party to any of such
contracts is known or claimed by the Company to exist.

            3.18. Employee Benefit Matters.

                  (a) Except as disclosed in Schedule 3.18, the Company does not
provide, nor is it obligated to provide, directly or indirectly, any benefits
for employees other than salaries, sales commissions and bonuses, including, but
not limited to, any pension, profit sharing, stock option, retirement, bonus,
hospitalization, insurance, severance, vacation or other employee benefits
(including any housing or social fund contributions) under any practice,
agreement or understanding.

                  (b) Each employee benefit plan maintained by or on behalf of
the Company or any other party (including any terminated pension plans) which
covers or covered any employees or former employees of the Company
(collectively, the "Employee Benefit Plan") is listed in Schedule 3.18. The
Company has delivered to Buyer true and complete copies of all such plans and
any related documents. With respect to each such plan: (a) no litigation,
administrative or other proceeding or claim is pending, or to the knowledge of
the Company, threatened or anticipated involving such plan; (b) there are no
outstanding requests for information by participants or beneficiaries of such
plan; and (c) such plan has been administered in compliance in all material
respects with all applicable laws and regulations.

                                       8
<PAGE>

                  (c) The Company has timely made payment in full of all
contributions to all of the Employee Benefit Plans which the Company was
obligated to make prior to the date hereof; and there are no contributions
declared or payable by the Company to any Employee Benefit Plan which, as of the
date hereof, has not been paid in full.

            3.19. Possession of Franchises, Licenses, Etc. The Company: (a)
possesses all material franchises, certificates, licenses, permits and other
authorizations (collectively, the "Licenses") from governmental authorities,
political subdivisions or regulatory authorities that are necessary for the
ownership, maintenance and operation of its business in the manner presently
conducted; (b) are not in violation of any provisions thereof; and (c) have
maintained and amended, as necessary, all Licenses and duly completed all
filings and notifications in connection therewith.

            3.20. Environmental Matters. Except as disclosed in Schedule 3.20:
(i) the Company is not in violation, in any material respect, of any
Environmental Law (as defined below); (ii) the Company has received all permits
and approvals with respect to emissions into the environment and the proper
collection, storage, transport, distribution or disposal of Wastes (as defined
below) and other materials required for the operation of its business at present
operating levels; and (iii) the Company is not liable or responsible for any
material clean up, fines, liability or expense arising under any Environmental
Law, as a result of the disposal of Wastes or other materials in or on the
property of the Company (whether owned or leased), or in or on any other
property, including property no longer owned, leased or used by the Company. As
used herein, (a) "Environmental Laws" means, collectively, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, the
Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation
and Recovery Act, the Toxic Substances Control Act, as amended, the Clean Air
Act, as amended, the Clean Water Act, as amended, any other "Superfund" or
"Superlien" law or any other federal, or applicable state or local statute, law,
ordinance, code, rule, regulation, order or decree (foreign or domestic)
regulating, relating to, or imposing liability or standards of conduct
concerning, Wastes, or the environment; and (b) "Wastes" means and includes any
hazardous, toxic or dangerous waste, liquid, substance or material (including
petroleum products and derivatives), the generation, handling, storage,
disposal, treatment or emission of which is subject to any Environmental Law.

            3.21. Agreements and Transactions with Related Parties. Except as
disclosed on Schedule 3.21, the Company is not, and since January 1, 2002 has
not been, a party to any contract, agreement, lease or transaction with, or any
other commitment to, (a) a shareholder, (b) any person related by blood,
adoption or marriage to shareholder, (c) any director or officer of the Company,
(d) any corporation or other entity in which any of the foregoing parties has,
directly or indirectly, at least five percent (5.0%) beneficial interest in the
capital stock or other type of equity interest in such corporation or other
entity, or (e) any partnership in which any such party is a general partner or a
limited partner having a five percent (5%) or more interest therein (any or all
of the foregoing being herein referred to as a "Related Party" and collectively
as the "Related Parties"). Without limiting the generality of the foregoing,
except as set forth in Schedule 3.21, (a) no Related Party, directly or
indirectly, owns or controls any assets or properties which are or have since
January 1, 2002 been used in the business of the Company, and (b) no Related

                                       9
<PAGE>

Party, directly or indirectly, engages in or has any significant interest in or
connection with any business: (i) which is or which within the last two (2)
years has been a competitor, customer or supplier of, or has done business with,
the Company, or (ii) which as of the date hereof sells or distributes products
or provides services which are similar or related to the products or services of
the Company.

            3.22. Business Practices. Except as disclosed on Schedule 3.22, the
Company has not, at any time, directly or indirectly, made any contributions or
payment, or provided any compensation or benefit of any kind, to any municipal,
county, state, federal or foreign governmental officer or official, or any other
person charged with similar public or quasi-public duties, or any candidate for
political office. The Company's books, accounts and records (including, without
limitation, customer files, product packaging and invoices) accurately describe
and reflect, in all material respects, the nature and amount of the Company's
products, purchases, sales and other transactions. Without limiting the
generality of the foregoing, the Company has not engaged, directly or
indirectly, in: (a) the practice known as "double-invoicing" or the use or
issuance of pro-forma or dummy invoices; or (b) the incorrect or misleading
labeling, marketing or sale of refurbished goods as new goods.

            3.23. Shareholder Matters. Except as disclosed on Schedule 3.23,
none of the matters set forth in this Agreement require the approval of the
Company's shareholders.

            3.24. Full Disclosure. No representation or warranty of the Company
contained in this Agreement, and none of the statements or information
concerning the Company contained in this Agreement and the Schedules, contains
or will contain any untrue statement of a material fact nor will such
representations, warranties, covenants or statements taken as a whole omit a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

      4. REPRESENTATIONS AND WARRANTIES OF BUYER.

      To induce the Company to enter into this Agreement and to consummate the
transactions contemplated hereby, the Buyer represents and warrants to and
covenants with the Company as follows:

            4.1. Organization. Buyer is a limited liability company duly
organized, validly existing and in good standing under the laws of Delaware. The
Buyer has all requisite power and authority to execute, deliver and carry out
the terms of this Agreement and the consummation of the transactions
contemplated herein.

            4.2. Execution; No Inconsistent Agreements; Etc.

                  (a) The execution and delivery of this Agreement and the
performance of the transactions contemplated hereby have been duly and validly
authorized and approved by Buyer and this Agreement is a valid and binding
agreement of Buyer, enforceable against Buyer in accordance with its terms,
except as such enforcement may be limited by bankruptcy or similar laws
affecting the enforcement of creditors' rights generally, and the availability
of equitable remedies.

                  (b) The execution and delivery of this Agreement by Buyer does
not, and the consummation of the transactions contemplated hereby will not,
constitute a breach or violation of the charter or bylaws of Buyer, or a default

                                       10
<PAGE>

under any of the terms, conditions or provisions of (or an act or omission that
would give rise to any right of termination, cancellation or acceleration under)
any material note, bond, mortgage, lease, indenture, agreement or obligation to
which Buyer is a party, pursuant to which any of them otherwise receive
benefits, or by which any of their properties may be bound.

            4.3. Securities Laws.

                  (a) The Buyer is purchasing the Ordinary Shares for investment
purposes and not with a view to the sale or distribution, by public or private
sale or other disposition, and the Buyer has no present intention of selling,
granting any participation in or otherwise distributing or disposing of any of
the Ordinary Shares.

                  (b) Investment Representations. The Buyer has been offered the
opportunity to ask questions of, and receive answers from the Company's
management, and the Buyer has been given full and complete access to all
available information and data relating to the business and assets of the
Company and has obtained such additional information about the Company as the
Buyer has deemed necessary in order to evaluate the opportunities, both
financial and otherwise, with respect to the Company and, except as set forth
herein, has not relied on any representation, warranty or other statement
concerning the Company and its evaluation of the decision to consummate the
transactions contemplated herein. In its judgment, the Buyer is sufficiently
familiar with the Company to enable the Buyer to proceed with the transactions
contemplated hereby.

                  (c) The Buyer is an "accredited investor," as such term is
defined in Rule 501 of Regulation D promulgated under the Securities Act of
1933, as amended (the "Securities Act").

                  (d) The Buyer is a sophisticated investor familiar with the
type of risks inherent in the acquisition of securities such as the shares of
the Company and the Buyer's financial position is such that the Buyer can afford
to retain its shares of Company Ordinary Shares for an indefinite period of time
without realizing any direct or indirect cash return on its investment.

                  (e) The Buyer acknowledges that the certificates evidencing
the Buyer's Stock will contain a legend substantially as follows:

                  THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE
                  NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
                  AMENDED (THE "ACT"). THE SECURITIES HAVE BEEN ACQUIRED FOR
                  INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO DISTRIBUTION
                  OR RESALE, AND MAY NOT BE SOLD, TRANSFERRED, MADE SUBJECT TO A
                  SECURITY INTEREST, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
                  OF UNLESS AND UNTIL REGISTERED UNDER THE ACT, AS AMENDED, OR

                                       11
<PAGE>

                  EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
                  NOT REQUIRED UNDER SUCH ACT.

      5. CONDUCT OF BUSINESS OF THE COMPANY PENDING CLOSING.

      The Company covenants and agrees that between the date hereof and the
Closing Date:

            5.1. Business in the Ordinary Course. Except as set forth in
Schedule 5.1, the business of the Company shall be conducted only in the
ordinary course, and consistent with past practice. Without limiting the
generality of the foregoing, and except as set forth in Schedule 5.1 or as
otherwise approved by Buyer:

                  (a) Except for the transaction contemplated hereby, the
Company shall not enter into any contract, agreement or other arrangement which
would constitute a Material Contract, except for contracts to sell or supply
goods or services to customers in the ordinary course of business at prices and
on terms substantially consistent with the prior operating practices of the
Company;

                  (b) except for sales of personal property in the ordinary
course of its business, the Company shall not sell, assign, transfer, mortgage,
convey, encumber or otherwise dispose of, or cause the sale, assignment,
transfer, mortgage, conveyance, encumbrance or other disposition of any of the
assets or properties of the Company or any interest therein;

                  (c) the Company shall not acquire any material assets, except
expenditures made in the ordinary course of business as reasonably necessary to
enable the Company to conduct its normal business operations and to maintain its
normal inventory of goods and materials, at prices and on terms substantially
consistent with current market conditions and prior operating practices;

                  (d) the books, records and accounts of the Company shall be
maintained in the usual, regular and ordinary course of business on a basis
consistent with prior practices and in accordance with GAAP;

                  (e) the Company shall use its best efforts to preserve its
business organization, to preserve the good will of its suppliers, customers and
others having business relations with the Company, and to retain the services of
key employees and agents of the Company;

                  (f) except as it may terminate in accordance with the terms of
this Agreement, the Company shall keep in full force and effect, and not cause a
default of any of its obligations under, each of their contracts and
commitments;

                  (g) the Company shall duly comply in all material respects
with all laws applicable to it and to the conduct of its business;

                  (h) the Company shall not create, incur or assume any
liability or indebtedness, except in the ordinary course of business consistent
with past practices;

                                       12
<PAGE>

                  (i) other than as contemplated in this Agreement, the Company
shall not apply any of its assets to the direct or indirect payment, discharge,
satisfaction or reduction of any amount payable directly or indirectly to or for
the benefit of any shareholder or any Related Party; and

                  (j) the Company shall not take or omit to take any action
which would render any of the representations or warranties untrue or
misleading, or which would be a breach of any of the covenants.

            5.2. No Material Changes. Except as contemplated in this Agreement,
the Company shall not materially alter its organization, capitalization, or
financial structure, practices or operations. Without limiting the generality of
the foregoing:

                  (a) no change shall be made in the articles and memorandum of
association of the Company;

                  (b) no change shall be made in the authorized or issued
capital stock of the Company;

                  (c) the Company shall not issue or grant any right or option
to purchase or otherwise acquire any of its capital stock or other securities;

                  (d) no dividend or other distribution or payment shall be
declared or made with respect to any of the capital stock of the Company; and

                  (e) no change shall be made affecting the banking arrangements
of the Company.

            5.3. Notification. Each party to this Agreement shall promptly
notify the other parties in writing of the occurrence, or threatened occurrence,
of any event that would constitute a breach or violation of this Agreement by
any party or that would cause any representation or warranty made by the
notifying party in this Agreement to be false or misleading in any respect. The
Company will promptly notify the Buyer of any event that could have a material
adverse effect on the business, assets, financial condition or prospects of the
Company. The Company shall have the right to update the Schedules to this
Agreement immediately prior to Closing; provided, if such update discloses any
breach of a representation, warranty, covenant or obligation of the Company, the
Buyer shall have the right to then exercise its available rights and remedies
hereunder.

      6. CONDITIONS TO OBLIGATIONS OF ALL PARTIES.

      The obligation of Buyer and the Company to consummate the transactions
contemplated by this Agreement are subject to the satisfaction, on or before the
Closing, of each of the following conditions; any or all of which may be waived
in whole or in part by the joint agreement of Buyer and the Company:

            6.1. Absence of Actions. No action or proceeding shall have been
brought or threatened before any court or administrative agency to prevent the
consummation or to seek damages in a material amount by reason of the

                                       13
<PAGE>

transactions contemplated hereby, and no governmental authority shall have
asserted that the within transactions (or any other pending transaction
involving Buyer or the Company when considered in light of the effect of the
within transactions) shall constitute a violation of law or give rise to
material liability on the part of the Company or the Buyer.

            6.2. Consents. The parties shall have received from any suppliers,
lessors, lenders, lien holders or governmental authorities, bodies or agencies
having jurisdiction over the transactions contemplated by this Agreement, or any
part hereof, such consents, authorizations and approvals as are necessary for
the consummation hereof, including, without limitation, the consents listed on
Schedule 6.2.

      7. CONDITIONS TO OBLIGATIONS OF THE BUYER.

      All obligations of the Buyer to consummate the transactions contemplated
by this Agreement are subject to the fulfillment and satisfaction of each and
every of the following conditions on or prior to the Closing, any or all of
which may be waived in whole or in part by Buyer:

            7.1. Representations and Warranties. The representations and
warranties contained in Section 3 of this Agreement and in any certificate,
instrument, schedule, agreement or other writing delivered by or on behalf of
the Company in connection with the transactions contemplated by this Agreement
shall be true, correct and complete in all material respects (except for
representations and warranties which are by their terms qualified by
materiality, which shall be true, correct and complete in all respects) as of
the date when made and shall be deemed to be made again at and as of the Closing
Date and shall be true, correct and complete at and as of such time in all
material respects (except for representations and warranties which are by their
terms qualified by materiality, which shall be true, correct and complete in all
respects).

            7.2. Compliance with Agreements and Conditions. The Company shall
have performed and complied with all material agreements and conditions required
by this Agreement to be performed or complied with by it prior to or on the
Closing Date.

            7.3. Absence of Material Adverse Changes. No material adverse change
in the business, assets, financial condition, or prospects of the Company shall
have occurred, no substantial part of the assets of the Company not
substantially covered by insurance shall have been destroyed due to fire or
other casualty, and no event shall have occurred which has had or will have a
material adverse effect on the business, assets, financial condition or
prospects of the Company.

            7.4. Board Approval. The Company's Board of Directors shall have
taken the action required by them pursuant to Section 2.1 hereof.

            7.5. Registration Rights Agreement. The Company shall have executed
and delivered to the Buyer a Registration Rights Agreement in a form acceptable
to the Buyer.

            7.6. Standby Equity Distribution Agreement. The Company shall have
executed and delivered to the Buyer a Standby Equity Distribution Agreement in a
form acceptable to the Buyer, along with the related Escrow Agreement,

                                       14
<PAGE>

Registration Rights Agreement and Placement Agent Agreement.

            7.7. Corporate Documents. The Company shall have delivered to the
Buyer the articles and memorandum of association of the Company and each
Subsidiary certified by an appropriate official of its respective jurisdiction
of incorporation as being in effect as of a recent date, the bylaws of the
Company and each Subsidiary certified by an appropriate officer as in effect at
the Closing, the minute books and corporate records of the Company and each
Subsidiary and the stock ledger of the Company and each Subsidiary.

            7.8. Other Documents. The Company shall have delivered to the Buyer
such other documents and instruments as the Buyer deems reasonably necessary or
desirable to consummate the transactions contemplated hereby.

            7.9. Certificate of the Company. The Company shall have executed and
delivered, or caused to be executed and delivered, to the Buyer one or more
certificates, dated the Closing Date, certifying in such detail as the Buyer may
reasonably request to the fulfillment and satisfaction of the conditions
specified in Sections 7.1 through 7.8 above.

            All documents delivered to the Buyer shall be in form and substance
reasonably satisfactory to the Buyer.

      8. CONDITIONS TO OBLIGATIONS OF THE COMPANY.

      All of the obligations of the Company to consummate the transactions
contemplated by this Agreement are subject to the fulfillment and satisfaction
of each and every of the following conditions on or prior to the Closing, any or
all of which may be waived in whole or in part by the Company:

            8.1. Representations and Warranties. The representations and
warranties contained in Section 4 of this Agreement and in any certificate,
instrument, schedule, agreement or other writing delivered by or on behalf of
Buyer in connection with the transactions contemplated by this Agreement shall
be true and correct in all material respects (except for representations and
warranties which are by their terms qualified by materiality, which shall be
true, correct and complete in all respects) when made and shall be deemed to be
made again at and as of the Closing Date and shall be true at and as of such
time in all material respects (except for representations and warranties which
are by their terms qualified by materiality, which shall be true, correct and
complete in all respects).

            8.2. Compliance with Agreements and Conditions. Buyer shall have
performed and complied with all material agreements and conditions required by
this Agreement to be performed or complied with by Buyer prior to or on the
Closing Date.

            8.3. Certificate of Buyer. The Buyer shall have delivered to the
Company a certificate, executed by an executive officer and dated the Closing
Date, certifying in such detail as counsel for the Company may reasonably
request to the fulfillment and satisfaction of the conditions specified in
Sections 8.1 through 8.2 above.

                                       15
<PAGE>

      9. INDEMNITY.

            9.1. Indemnification by the Company. The Company (hereinafter
collectively called the "Company Indemnitor") shall defend, indemnify and hold
harmless the Buyer, its direct and indirect parent corporations, subsidiaries
and affiliates, their officers, members, directors, employees, attorneys and
agents (hereinafter collectively called "Buyer Indemnitees") against and in
respect of any and all loss, damage, liability, fine, penalty, cost and expense,
including reasonable attorneys' fees and amounts paid in settlement
(collectively, "Buyer Losses"), suffered or incurred by any Buyer Indemnitee by
reason of, or arising out of:

                  (a) any misrepresentation, breach of warranty or breach or
nonfulfillment of any covenant, obligation or agreement of the Company contained
in this Agreement or in any certificate, schedule, instrument or document
delivered to Buyer by or on behalf of the Company pursuant to the provisions of
this Agreement (without regard to materiality thresholds contained therein); and

                  (b) any liabilities of the Company of any nature whatsoever
(including tax liability, penalties and interest), whether accrued, absolute,
contingent or otherwise, (i) existing as of the date of the 2003 Company Balance
Sheet, and required to be shown therein in accordance with GAAP, to the extent
not reflected or reserved against in full in the 2003 Company Balance Sheet; or
(ii) arising or occurring between December 31, 2003 and the Closing Date, except
for liabilities arising in the ordinary course of business, none of which shall
have a material adverse effect on the Company.

                  (c) Indemnification by Buyer. The Buyer (hereinafter called
the "Buyer Indemnitor") shall defend, indemnify and hold harmless the Company,
its direct and indirect parent corporations, subsidiaries and affiliates, their
officers, members, directors, employees, attorneys and agents (hereinafter
called "Company Indemnitee") against and in respect of any and all loss, damage,
liability, fine, penalty, cost and expense, including reasonable attorneys' fees
and amounts paid in settlement (collectively, "Company Losses"), suffered or
incurred by Company Indemnitee by reason of or arising out of any
misrepresentation, breach of warranty or breach or non-fulfillment of any
material covenant, obligation or agreement of Buyer contained in this Agreement
or in any other certificate, schedule, instrument or document delivered to the
Company by or on behalf of Buyer pursuant to the provisions of this Agreement
(without regard to materiality thresholds contained therein).

            9.2. Defense of Claims.

                  (a) Each party seeking indemnification hereunder (an
"Indemnitee"): (i) shall provide the other party or parties (the "Indemnitor")
written notice of any claim or action by a third party for which an Indemnitor
may be liable under the terms of this Agreement, within ten (10) days after such
claim or action arises and is known to Indemnitee, and (ii) shall give the
Indemnitor a reasonable opportunity to participate in any proceedings and to
settle or defend any such claim or action. The expenses of all proceedings,
contests or lawsuits with respect to such claims or actions shall be borne by
the Indemnitor. If the Indemnitor wishes to assume the defense of such claim or
action, the Indemnitor shall give written notice to the Indemnitee within ten

                                       16
<PAGE>

(10) days after notice from the Indemnitee of such claim or action, and the
Indemnitor shall thereafter assume the defense of any such claim or liability,
through counsel reasonably satisfactory to the Indemnitee, provided that
Indemnitee may participate in such defense at their own expense, and the
Indemnitor shall, in any event, have the right to control the defense of the
claim or action. The failure of an Indemnitee to give any notice required by
this Section shall not affect any of such party's rights under this Section or
otherwise, except and to the extent that such failure is actually prejudicial to
the rights or obligations of the Indemnitor.

                  (b) If the Indemnitor shall not assume the defense of, or if
after so assuming it shall fail to defend, any such claim or action, the
Indemnitee may defend against any such claim or action in such manner as they
may deem appropriate and the Indemnitees may settle such claim or litigation on
such terms as they may deem appropriate but subject to the Indemnitor's
approval, such approval not to be unreasonably withheld; provided, however, that
any such settlement shall be deemed approved by the Indemnitor if the Indemnitor
fails to object thereto, by written notice to the Indemnitee, within fifteen
(15) days after the Indemnitor's receipt of a written summary of such
settlement. The Indemnitor shall promptly reimburse the Indemnitee for the
amount of all expenses, legal and otherwise, incurred by the Indemnitee in
connection with the defense and settlement of such claim or action.

                  (c) If a non-appealable judgment is rendered against any
Indemnitee in any action covered by the indemnification hereunder, or any lien
attaches to any of the assets of any of the Indemnitee, the Indemnitor shall
immediately upon such entry or attachment pay such judgment in full or discharge
such lien unless, at the expense and direction of the Indemnitor, an appeal is
taken under which the execution of the judgment or satisfaction of the lien is
stayed. If and when a final judgment is rendered in any such action, the
Indemnitor shall forthwith pay such judgment or discharge such lien before any
Indemnitee is compelled to do so.

            9.3. Waiver. The failure of any Indemnitee to give any notice or to
take any action hereunder shall not be deemed a waiver of any of the rights of
such Indemnitee hereunder, except to the extent that Indemnitor is actually
prejudiced by such failure.

      10. TERMINATION.

            10.1. Termination. This Agreement may be terminated at any time on
or prior to the Closing:

                  (a) By mutual consent of Buyer and the Company; or

                  (b) At the election of Buyer if: (i) a Company has breached or
failed to perform or comply with any of its representations, warranties,
covenants or obligations under this Agreement; or (ii) any of the conditions
precedent set forth in Section 6 or 7 is not satisfied as and when required by
this Agreement; or (iii) the Closing has not been consummated by June 11, 2004;
or

                  (c) At the election of the Company if: (i) Buyer has breached
or failed to perform or comply with any of its representations, warranties,
covenants or obligations under this Agreement; or (ii) any of the conditions
precedent set forth in Section 6 or 8 is not satisfied as and when required by

                                       17
<PAGE>

this Agreement; or (iii) if the Closing has not been consummated by June 11,
2004.

            10.2. Manner and Effect of Termination. Written notice of any
termination ("Termination Notice") pursuant to this Section 10 shall be given by
the party electing termination of this Agreement ("Terminating Party") to the
other party or parties (collectively, the "Terminated Party"), and such notice
shall state the reason for termination. The party or parties receiving
Termination Notice shall have a period of ten (10) days after receipt of
Termination Notice to cure the matters giving rise to such termination to the
reasonable satisfaction of the Terminating Party. If the matters giving rise to
termination are not cured as required hereby, this Agreement shall be terminated
effective as of the close of business on the tenth (10th) day following the
Terminated Party's receipt of Termination Notice. Upon termination of this
Agreement prior to the consummation of the Closing and in accordance with the
terms hereof, this Agreement shall become void and of no effect, and none of the
parties shall have any liability to the others, except that nothing contained
herein shall relieve any party from: (a) its obligations under Sections 2.3 and
2.4; or (b) liability for its intentional breach of any representation, warranty
or covenant contained herein, or its intentional failure to comply with the
terms and conditions of this Agreement or to perform its obligations hereunder.

                                       18
<PAGE>

      11. MISCELLANEOUS.

            11.1. Notices.

                  (a) All notices, requests, demands, or other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given upon receipt if delivered in person, or upon the expiration of
two (2) days after the date sent, if sent by federal express (or similar
overnight courier service) to the parties at the following addresses:

                  (i) If to Buyer:

                        iPoint-Media Ltd.
                        2a Habarzel Street
                        Tel-Aviv 61132, Israel
                        Attention:       Muki Geller
                        Telephone: 972-3-7657265
                        Facsimile:       972-3-7657368

                      with a copy to:

                        Sichenzia Ross Friedman Ference LLP
                        1065 Avenue of the Americas
                        New York, New York 10018
                        Attn:   Gregory Sichenzia, Esq.
                        Telephone:       (212) 930-9700
                        Facsimile:       (212) 930-9725

                  (ii) If to the Company:

                        Cornell Capital Partners, LP
                        101 Hudson Street -Suite 3700
                        Jersey City, NJ 07302
                        Attention:       Mark Angelo
                                         Portfolio Manager
                        Telephone:       (201) 985-8300
                        Facsimile:       (201) 985-8266

                                       19
<PAGE>

                      With a copy to:

                        Cornell Capital Partners, LP
                        101 Hudson Street -Suite 3700
                        Jersey City, NJ 07302
                        Attention:       Troy J. Rillo, Esq.
                                         Senior Vice President
                        Telephone:       (201) 985-8300
                        Facsimile:       (201) 985-8266

                  (b) Notices may also be given in any other manner permitted by
law, effective upon actual receipt. Any party may change the address to which
notices, requests, demands or other communications to such party shall be
delivered or mailed by giving notice thereof to the other parties hereto in the
manner provided herein.

            11.2. Survival. The representations, warranties, agreements and
indemnifications of the parties contained in this Agreement or in any writing
delivered pursuant to the provisions of this Agreement shall survive any
investigation heretofore or hereafter made by the parties and the consummation
of the transactions contemplated herein and shall continue in full force and
effect after the Closing.

            11.3. Counterparts; Interpretation. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an original, and
all of which shall constitute one and the same instrument. This Agreement
supersedes all prior discussions and agreements between the parties with respect
to the subject matter hereof, and this Agreement contains the sole and entire
agreement among the parties with respect to the matters covered hereby. All
Schedules hereto shall be deemed a part of this Agreement. This Agreement shall
not be altered or amended except by an instrument in writing signed by or on
behalf of all of the parties hereto. No ambiguity in any provision hereof shall
be construed against a party by reason of the fact it was drafted by such party
or its counsel. For purposes of this Agreement: "herein", "hereby", "hereunder",
"herewith", "hereafter" and "hereinafter" refer to this Agreement in its
entirety, and not to any particular subsection or paragraph. References to
"including" means including without limiting the generality of any description
preceding such term. Nothing expressed or implied in this Agreement is intended,
or shall be construed, to confer upon or give any person other than the parties
hereto any rights or remedies under or by reason of this Agreement.

            11.4. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New Jersey without
regard to the principles of conflict of laws. The parties further agree that any
action between them shall be heard exclusively in Hudson County, New Jersey, and
expressly consent to the jurisdiction and venue of the Superior Court of New
Jersey, sitting in Hudson County, New Jersey and the United States District
Court of New Jersey, sitting in Newark, New Jersey, for the adjudication of any
civil action asserted pursuant to this paragraph. Each party hereby irrevocably
waives, to the fullest extent it may effectively do so, the defense of an
inconvenient forum to the maintenance of any such action in the forum selected
hereby.

                                       20
<PAGE>

            11.5. Successors and Assigns; Assignment. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, executors, legal representatives, and successors; provided,
however, that the Company may not assign this Agreement or any rights hereunder,
in whole or in part.

            11.6. Partial Invalidity and Severability. All rights and
restrictions contained herein may be exercised and shall be applicable and
binding only to the extent that they do not violate any applicable laws and are
intended to be limited to the extent necessary to render this Agreement legal,
valid and enforceable. If any terms of this Agreement not essential to the
commercial purpose of this Agreement shall be held to be illegal, invalid or
unenforceable by a court of competent jurisdiction, it is the intention of the
parties that the remaining terms hereof shall constitute their agreement with
respect to the subject matter hereof and all such remaining terms shall remain
in full force and effect. To the extent legally permissible, any illegal,
invalid or unenforceable provision of this Agreement shall be replaced by a
valid provision which will implement the commercial purpose of the illegal,
invalid or unenforceable provision.

            11.7. Waiver. Any term or condition of this Agreement may be waived
at any time by the party which is entitled to the benefit thereof, but only if
such waiver is evidenced by a writing signed by such party. No failure on the
part of a party hereto to exercise, and no delay in exercising, any right, power
or remedy created hereunder, shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or remedy by any such party
preclude any other future exercise thereof or the exercise of any other right,
power or remedy. No waiver by any party hereto to any breach of or default in
any term or condition of this Agreement shall constitute a waiver of or assent
to any succeeding breach of or default in the same or any other term or
condition hereof.

            11.8. Headings. The headings as to contents of particular paragraphs
of this Agreement are inserted for convenience only and shall not be construed
as a part of this Agreement or as a limitation on the scope of any terms or
provisions of this Agreement.

            11.9. Expenses. Except as otherwise expressly provided herein, all
legal and other costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the Buyer or the
Company as each party incurs such expenses. Notwithstanding the foregoing, the
Company shall pay to the Buyer a fee of $75,000 (the "Fee") for due diligence,
legal and structuring fees. The Fee shall be deemed fully earned on the date
hereof, and the payment of which shall be offset against the Purchase Price.

            11.10. Finder's Fees. The Buyer represents to the Company that no
broker, agent, finder or other party has been retained by it in connection with
the transactions contemplated hereby and that no other fee or commission has
been agreed by the Buyer to be paid for or on account of the transactions
contemplated hereby. The Company represents to the Buyer that no broker, agent,
finder or other party has been retained by the Company in connection with the
transactions contemplated hereby and that no other fee or commission has been
agreed by the Company to be paid for or on account of the transactions
contemplated hereby.

                                       21
<PAGE>

            11.11. Gender. Where the context requires, the use of the singular
form herein shall include the plural, the use of the plural shall include the
singular, and the use of any gender shall include any and all genders.

            11.12. Currency. All foreign currency amounts required to be
converted to U.S. Dollars for purposes of this Agreement shall be converted in
accordance with GAAP.

            11.13. Acceptance by Fax. This 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 the signature
pages hereto.

            11.14. Attorneys Fees. If any legal action or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default or misrepresentation in connection with any provision of this
Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees, court costs and all expenses (including, without limitation,
all such fees, costs and expenses incident to appellate, bankruptcy,
post-judgment and alternative dispute resolution proceedings), incurred in that
action or proceeding, in addition to any other relief to which such party may be
entitled.

            11.15. NO JURY TRIAL. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT AND ANY DOCUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION
HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES' ACCEPTANCE OF THIS AGREEMENT.

                                       22
<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Investment Agreement or
caused this Investment Agreement to be duly executed by their duly authorized
officers as of the day and year first above written.

                                    BUYER:

                                    CORNELL CAPITAL PARTNERS, LP

                                    By:     Yorkville Advisors, LLC
                                    Its:    General Partner

                                    By:
                                       ----------------------------------------
                                    Name:   Mark Angelo
                                    Title:  Portfolio Manager

                                    COMPANY:

                                    IPOINT-MEDIA LTD.

                                    By:
                                       ----------------------------------------
                                    Name:
                                          -------------------------------------
                                    Title:
                                          -------------------------------------

                                       23

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