Document:

NEITHER
      THIS DEBENTURE NOR THE SECURITIES INTO WHICH THIS DEBENTURE IS CONVERTIBLE
      HAVE
      BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
      COMMISSION OF ANY STATE. THESE SECURITIES HAVE BEEN SOLD IN RELIANCE UPON AN
      EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
      “SECURITIES
      ACT”),
      AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
      REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
      EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS.

     

    NEOMEDIA
      TECHNOLOGIES, INC.

     

    Secured
      Convertible Debenture

     

    
      	
              Issuance
                Date: April 11, 2008

            	
              Original
                Principal Amount: $390,000

            
	
              No.
                NEO-2008-1

            	 

    

    

    FOR
      VALUE RECEIVED,
      NEOMEDIA
      TECHNOLOGIES, INC., a Delaware corporation (the "Company"),
      hereby promises to pay to the order of YA GLOBAL INVESTMENTS, L.P f/k/a Cornell
      Capital Partners, L.P., or registered assigns (the "Holder")
      the
      amount set out above as the Original Principal Amount (as reduced pursuant
      to
      the terms hereof pursuant to redemption, conversion or otherwise, the
      "Principal")
      when
      due, upon the Maturity Date (as defined below), acceleration, redemption or
      otherwise (in each case in accordance with the terms hereof) and to pay interest
      ("Interest")
      on any
      outstanding Principal at the applicable Interest Rate from the date set out
      above as the Issuance Date (the "Issuance
      Date")
      until
      the same becomes due and payable as set forth below, or upon acceleration,
      conversion, redemption or otherwise (in each case in accordance with the terms
      hereof). This Secured Convertible Debenture (including all Secured Convertible
      Debentures issued in exchange, transfer or replacement hereof, this
      "Debenture")
      is one
      of an issue of Secured Convertible Debentures issued by the Company to the
      Holder (collectively, the "Debentures"
      and
      such other Convertible Debentures, the "Other
      Debentures").
      Certain capitalized terms used herein are defined in Section 17.

     

    (1) GENERAL
      TERMS

     

    (a) Payment
      of Principal.
      On
      the
      Maturity Date, the Company shall pay to the Holder an amount in cash
      representing all outstanding Principal, accrued and unpaid Interest.
The
      "Maturity
      Date"
      shall
      be April 11, 2010, as may be extended at the option of the Holder (i) in the
      event that, and for so long as, an Event of Default (as defined below) shall
      have occurred and be continuing on the Maturity Date (as may be extended
      pursuant to this Section 1) or any event shall have occurred and be continuing
      on the Maturity Date (as may be extended pursuant to this Section 1) that with
      the passage of time and the failure to cure would result in an Event of Default.
      Other than as specifically permitted by this Debenture, the Company may not
      prepay or redeem any portion of the outstanding Principal without the prior
      written consent of the Holder.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) Interest.
      Interest shall accrue on the outstanding principal balance hereof at an annual
      rate equal to fifteen percent (15%) (“Interest
      Rate”).
      Interest shall be calculated on the basis of a 360-day year and the actual
      number of days elapsed, to the extent permitted by applicable law. Interest
      hereunder shall be paid quarterly in arrears, beginning on July 1, 2008, and
      on
      the Maturity Date (or sooner as provided herein) to the Holder or its assignee
      in whose name this Debenture is registered on the records of the Company
      regarding registration and transfers of Debentures at the option of the Company
      in cash. 

     

    (c) Security.
      The
      Debenture is secured by (i) a security interest in all of the assets of the
      Company and of each of the Company's subsidiaries pursuant to the Security
      Agreement dated as of the date hereof (the “Security
      Agreement”)
      and
      (ii) a security interest in all of the patents, trademarks and copyrights of
      the
      Company and of each of the Company's subsidiaries pursuant to the Patent
      Security Agreement dated as of the date hereof, 2007 (the “Patent
      Security Agreement”)
      (the
      Security Agreement and the Patent Security Agreement are collectively referred
      to as the “Security
      Documents”).

     

    (2) EVENTS
      OF DEFAULT. 

     

    (a) An
      “Event
      of Default”,
      wherever used herein, means any one of the following events (whatever the reason
      and whether it shall be voluntary or involuntary or effected by operation of
      law
      or pursuant to any judgment, decree or order of any court, or any order, rule
      or
      regulation of any administrative or governmental body):

     

    (i) the
      Company's failure to pay to the Holder any amount of Principal, Interest, or
      other amounts when and as due under this Debenture (including, without
      limitation, the Company's failure to pay any redemption payments or amounts
      hereunder) or any other Transaction Document;

     

    (ii) The
      Company or any subsidiary of the Company shall commence, or there shall be
      commenced against the Company or any subsidiary of the Company under any
      applicable bankruptcy or insolvency laws as now or hereafter in effect or any
      successor thereto, or the Company or any subsidiary of the Company commences
      any
      other proceeding under any reorganization, arrangement, adjustment of debt,
      relief of debtors, dissolution, insolvency or liquidation or similar law of
      any
      jurisdiction whether now or hereafter in effect relating to the Company or
      any
      subsidiary of the Company or there is commenced against the Company or any
      subsidiary of the Company any such bankruptcy, insolvency or other proceeding
      which remains undismissed for a period of 61 days; or the Company or any
      subsidiary of the Company is adjudicated insolvent or bankrupt; or any order
      of
      relief or other order approving any such case or proceeding is entered; or
      the
      Company or any subsidiary of the Company suffers any appointment of any
      custodian, private or court appointed receiver or the like for it or any
      substantial part of its property which continues undischarged or unstayed for
      a
      period of sixty one (61) days; or the Company or any subsidiary of the Company
      makes a general assignment for the benefit of creditors; or the Company or
      any
      subsidiary of the Company shall fail to pay, or shall state that it is unable
      to
      pay, or shall be unable to pay, its debts generally as they become due; or
      the
      Company or any subsidiary of the Company shall call a meeting of its creditors
      with a view to arranging a composition, adjustment or restructuring of its
      debts; or the Company or any subsidiary of the Company shall by any act or
      failure to act expressly indicate its consent to, approval of or acquiescence
      in
      any of the foregoing; or any corporate or other action is taken by the Company
      or any subsidiary of the Company for the purpose of effecting any of the
      foregoing;

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (iii) The
      Company or any subsidiary of the Company shall default in any of its obligations
      under any other debenture or any mortgage, credit agreement or other facility,
      indenture agreement, factoring agreement or other instrument under which there
      may be issued, or by which there may be secured or evidenced any indebtedness
      for borrowed money or money due under any long term leasing or factoring
      arrangement of the Company or any subsidiary of the Company in an amount
      exceeding $100,000, whether such indebtedness now exists or shall hereafter
      be
      created and such default shall result in such indebtedness becoming or being
      declared due and payable prior to the date on which it would otherwise become
      due and payable;

     

    (iv) If
      the
      Common Stock is quoted or listed for trading on any of the following and it
      ceases to be so quoted or listed for trading and shall not again be quoted
      or
      listed for trading on any Primary Market within five (5) Trading Days of such
      delisting: (a) the American Stock Exchange, (b) New York Stock Exchange, (c)
      the
      Nasdaq Global Market, (d) the Nasdaq Capital Market, or (e) the Nasdaq OTC
      Bulletin Board (“OTCBB”) (each, a “Primary Market”);

     

    (v) The
      Company or any subsidiary of the Company shall be a party to any Change of
      Control Transaction (as defined in Section 6) unless in connection with such
      Change of Control Transaction this Debenture is retired; 

     

    (vi) (RESERVED)

     

    (vii) The
      Company's (A) failure to cure a Conversion Failure by delivery of the required
      number of shares of Common Stock within five (5) Business Days after the
      applicable Conversion Failure or (B) notice, written or oral, to any holder
      of
      the Debentures, including by way of public announcement, at any time, of its
      intention not to comply with a request for conversion of any Debentures into
      shares of Common Stock that is tendered in accordance with the provisions of
      the
      Debentures, other than pursuant to Section 4(c);

     

    (viii) The
      Company shall fail for any reason to deliver the payment in cash pursuant to
      a
      Buy-In (as defined herein) within three (3) Business Days after such payment
      is
      due; 

     

    (ix) The
      Company shall fail to observe or perform any other covenant, agreement or
      warranty contained in, or otherwise commit any breach or default of any
      provision of this Debenture (except as may be covered by Section 2(a)(i) through
      2(a)(vii) hereof) or any Transaction Document (as defined in Section 17) which
      is not cured within the time prescribed.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (x) any
      Event
      of Default (as defined in the Other Debentures) occurs with respect to any
      Other
      Debentures, or with respect to any other debentures issued by the Company to
      the
      Holder.

     

    (b) During
      the time that any portion of this Debenture is outstanding, if any Event of
      Default has occurred, the full unpaid Principal amount of this Debenture,
      together with interest and other amounts owing in respect thereof, to the date
      of acceleration shall become at the Holder's election, immediately due and
      payable in cash; provided however, the Holder may request (but shall have no
      obligation to request) payment of such amounts in Common Stock of the Company.
      If an Event of Default (after giving effect to any specified cure period) occurs
      and for so long as such Event of Default remains uncured, the Interest Rate
      on
      this Debenture shall immediately become twenty-four percent (24%) per annum
      and
      shall remain at such increased interest rate until the applicable Event of
      Default is cured. Furthermore, in addition to any other remedies, the Holder
      shall have the right (but not the obligation) to convert this Debenture at
      any
      time after (x) an Event of Default or (y) the Maturity Date at the lower of
      the
      Conversion Price or the Company Conversion Price. The Holder need not provide
      and the Company hereby waives any presentment, demand, protest or other notice
      of any kind, (other than required notice of conversion) and the Holder may
      immediately and without expiration of any grace period enforce any and all
      of
      its rights and remedies hereunder and all other remedies available to it under
      applicable law. Such declaration may be rescinded and annulled by Holder at
      any
      time prior to payment hereunder. No such rescission or annulment shall affect
      any subsequent Event of Default or impair any right consequent thereon.

     

    (3) COMPANY
      REDEMPTIONS 

     

    The
      Company shall be permitted to prepay this Debenture, in whole or in part, at
      any
      time without penalty. In order to make a redemption pursuant to this Section,
      the Company shall first provide written notice to the Holder of its intention
      to
      make a redemption (the “Redemption
      Notice”)
      setting forth the amount of Principal it desires to redeem (the “Redemption
      Amount”).
      The
      Company shall pay an amount equal to the principal amount being redeemed plus
      a
      redemption premium (“Redemption
      Premium”)
      equal
      to twenty percent (20%) of the Principal amount being redeemed, and accrued
      Interest, (collectively referred to as the “Company
      Additional Redemption
      Amount”).
      In
      order to make a redemption pursuant to this Section, the Company shall first
      provide written notice to the Holder of its intention to make a redemption
      (the
“Redemption
      Notice”)
      setting forth the amount of Principal it desires to redeem. After receipt of
      the
      Redemption Notice the Holder shall have three (3) Business Days to elect to
      convert all or any portion of this Debenture, subject to the limitations set
      forth in Section 4(b). On the fourth (4th) Business Day after the Redemption
      Notice, the Company shall deliver to the Holder the Company Additional
      Redemption Amount with respect to the Principal amount redeemed after giving
      effect to conversions effected during the three (3) Business Day
      period.

     

    (4) CONVERSION
      OF DEBENTURE. This
      Debenture shall be convertible into shares of the Company's Common Stock, on
      the
      terms and conditions set forth in this Section 4.

     

    (a) Conversion
      Right.
      Subject
      to the provisions of Section 4(c), at any time or times on or after the Issuance
      Date, the Holder shall be entitled to convert any portion of the outstanding
      and
      unpaid Conversion Amount (as defined below) into fully paid and nonassessable
      shares of Common Stock in accordance with Section 4(b), at the Conversion Rate
      (as defined below). The number of shares of Common Stock issuable upon
      conversion of any Conversion Amount pursuant to this Section 4(a) shall be
      determined by dividing (x) such Conversion Amount by (y) the Conversion Price
      (the "Conversion
      Rate").
      The
      Company shall not issue any fraction of a share of Common Stock upon any
      conversion. If the issuance would result in the issuance of a fraction of a
      share of Common Stock, the Company shall round such fraction of a share of
      Common Stock up to the nearest whole share. The Company shall pay any and all
      transfer, stamp and similar taxes that may be payable with respect to the
      issuance and delivery of Common Stock upon conversion of any Conversion Amount.
      

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (i) "Conversion
      Amount"
      means
      the portion of the Principal and accrued Interest to be converted, redeemed
      or
      otherwise with respect to which this determination is being made.

     

    (ii) "Conversion
      Price"
      means,
      as of any Conversion Date (as defined below) or other date of determination,
      the
      lesser of (a) $0.015 (the “Fixed
      Conversion Price”),
      subject to adjustment as provided herein, or (b) eighty percent (80%) of
      the lowest Volume Weighted Average Price during the ten (10) Trading Days
      immediately preceding the Conversion Date (the “Market
      Conversion Price”).

     

    (b) Mechanics
      of Conversion.

     

    (i) Optional
      Conversion.
      To
      convert any Conversion Amount into shares of Common Stock on any date (a
      "Conversion
      Date"),
      the
      Holder shall (A) transmit by facsimile (or otherwise deliver), for receipt
      on or
      prior to 11:59 p.m., New York Time, on such date, a copy of an executed notice
      of conversion in the form attached hereto as Exhibit
      I
      (the
      "Conversion
      Notice")
      to the
      Company and (B) if required by Section 4(b)(iv), surrender this Debenture to
      a
      nationally recognized overnight delivery service for delivery to the Company
      (or
      an indemnification undertaking reasonably satisfactory to the Company with
      respect to this Debenture in the case of its loss, theft or destruction). On
      or
      before the third Business Day following the date of receipt of a Conversion
      Notice (the "Share
      Delivery Date"),
      the
      Company shall (X) if legends are not required to be placed on certificates
      of
      Common Stock pursuant to any agreements between the Company and the Holder
      and
      provided that the Transfer Agent is participating in the Depository Trust
      Company's ("DTC")
      Fast
      Automated Securities Transfer Program, credit such aggregate number of shares
      of
      Common Stock to which the Holder shall be entitled to the Holder's or its
      designee's balance account with DTC through its Deposit Withdrawal Agent
      Commission system or (Y) if the Transfer Agent is not participating in the
      DTC
      Fast Automated Securities Transfer Program, issue and deliver to the address
      as
      specified in the Conversion Notice, a certificate, registered in the name of
      the
      Holder or its designee, for the number of shares of Common Stock to which the
      Holder shall be entitled which certificates shall not bear any restrictive
      legends unless required pursuant to any agreement between the Company and the
      Holder. If this Debenture is physically surrendered for conversion and the
      outstanding Principal of this Debenture is greater than the Principal portion
      of
      the Conversion Amount being converted, then the Company shall as soon as
      practicable and in no event later than three (3) Business Days after receipt
      of
      this Debenture and at its own expense, issue and deliver to the holder a new
      Debenture representing the outstanding Principal not converted. The Person
      or
      Persons entitled to receive the shares of Common Stock issuable upon a
      conversion of this Debenture shall be treated for all purposes as the record
      holder or holders of such shares of Common Stock upon the transmission of a
      Conversion Notice. 

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (ii) Company's
      Failure to Timely Convert.
      If
      within three (3) Trading Days after the Company's receipt of the facsimile
      copy
      of a Conversion Notice the Company shall fail to issue and deliver a certificate
      to the Holder or credit the Holder's balance account with DTC for the number
      of
      shares of Common Stock to which the Holder is entitled upon such holder's
      conversion of any Conversion Amount (a "Conversion
      Failure"),
      and
      if on or after such Trading Day the Holder purchases (in an open market
      transaction or otherwise) Common Stock to deliver in satisfaction of a sale
      by
      the Holder of Common Stock issuable upon such conversion that the Holder
      anticipated receiving from the Company (a "Buy-In"),
      then
      the Company shall, within three (3) Business Days after the Holder's request
      and
      in the Holder's discretion, either (i) pay cash to the Holder in an amount
      equal
      to the Holder's total purchase price (including brokerage commissions and other
      out of pocket expenses, if any) for the shares of Common Stock so purchased
      (the
"Buy-In
      Price"),
      at
      which point the Company's obligation to deliver such certificate (and to issue
      such Common Stock) shall terminate, or (ii) promptly honor its obligation to
      deliver to the Holder a certificate or certificates representing such Common
      Stock and pay cash to the Holder in an amount equal to the excess (if any)
      of
      the Buy-In Price over the product of (A) such number of shares of Common Stock,
      times (B) the Closing Bid Price on the Conversion Date.

     

    (iii) Book-Entry.
      Notwithstanding anything to the contrary set forth herein, upon conversion
      of
      any portion of this Debenture in accordance with the terms hereof, the Holder
      shall not be required to physically surrender this Debenture to the Company
      unless (A) the full Conversion Amount represented by this Debenture is being
      converted or (B) the Holder has provided the Company with prior written notice
      (which notice may be included in a Conversion Notice) requesting reissuance
      of
      this Debenture upon physical surrender of this Debenture. The Holder and the
      Company shall maintain records showing the Principal and Interest converted
      and
      the dates of such conversions or shall use such other method, reasonably
      satisfactory to the Holder and the Company, so as not to require physical
      surrender of this Debenture upon conversion.

     

    (c) Limitations
      on Conversions.

     

    (i) Beneficial
      Ownership.
      The
      Company shall not effect any conversions of this Debenture and the Holder shall
      not have the right to convert any portion of this Debenture or receive shares
      of
      Common Stock as payment of interest hereunder to the extent that after giving
      effect to such conversion or receipt of such interest payment, the Holder,
      together with any affiliate thereof, would beneficially own (as determined
      in
      accordance with Section 13(d) of the Exchange Act and the rules promulgated
      thereunder) in excess of 4.99% of the number of shares of Common Stock
      outstanding immediately after giving effect to such conversion or receipt of
      shares as payment of interest. Since the Holder will not be obligated to report
      to the Company the number of shares of Common Stock it may hold at the time
      of a
      conversion hereunder, unless the conversion at issue would result in the
      issuance of shares of Common Stock in excess of 4.99% of the then outstanding
      shares of Common Stock without regard to any other shares which may be
      beneficially owned by the Holder or an affiliate thereof, the Holder shall
      have
      the authority and obligation to determine whether the restriction contained
      in
      this Section will limit any particular conversion hereunder and to the extent
      that the Holder determines that the limitation contained in this Section
      applies, the determination of which portion of the principal amount of this
      Debenture is convertible shall be the responsibility and obligation of the
      Holder. If the Holder has delivered a Conversion Notice for a principal amount
      of this Debenture that, without regard to any other shares that the Holder
      or
      its affiliates may beneficially own, would result in the issuance in excess
      of
      the permitted amount hereunder, the Company shall notify the Holder of this
      fact
      and shall honor the conversion for the maximum principal amount permitted to
      be
      converted on such Conversion Date in accordance with Section 4(a) and, any
      principal amount tendered for conversion in excess of the permitted amount
      hereunder shall remain outstanding under this Debenture. The provisions of
      this
      Section may be waived by a Holder (but only as to itself and not to any other
      Holder) upon not less than 65 days prior notice to the Company. Other Holders
      shall be unaffected by any such waiver.

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (d) Other
      Provisions.

     

    (i) The
      Company shall at all times reserve and keep available out of its authorized
      Common Stock the full number of shares of Common Stock issuable upon conversion
      of all outstanding amounts under this Debenture; and within three (3) Business
      Days following the receipt by the Company of a Holder's notice that such minimum
      number of Underlying Shares is not so reserved, the Company shall promptly
      reserve a sufficient number of shares of Common Stock to comply with such
      requirement.

     

    (ii) All
      calculations under this Section 4 shall be rounded to the nearest $0.0001 or
      whole share.

     

    (iii) The
      Company covenants that it will at all times reserve and keep available out
      of
      its authorized and unissued shares of Common Stock solely for the purpose of
      issuance upon conversion of this Debenture and payment of interest on this
      Debenture, each as herein provided, free from preemptive rights or any other
      actual contingent purchase rights of persons other than the Holder, not less
      than such number of shares of the Common Stock as shall (subject to any
      additional requirements of the Company as to reservation of such shares set
      forth in this Debenture or in the Transaction Documents) be issuable (taking
      into account the adjustments and restrictions set forth herein) upon the
      conversion of the outstanding principal amount of this Debenture and payment
      of
      interest hereunder. The Company covenants that all shares of Common Stock that
      shall be so issuable shall, upon issue, be duly and validly authorized, issued
      and fully paid, nonassessable and, if the Underlying Shares Registration
      Statement has been declared effective under the Securities Act, registered
      for
      public sale in accordance with such Underlying Shares Registration
      Statement.

     

    (iv) Nothing
      herein shall limit a Holder's right to pursue actual damages or declare an
      Event
      of Default pursuant to Section 2 herein for the Company 's failure to deliver
      certificates representing shares of Common Stock upon conversion within the
      period specified herein and such Holder shall have the right to pursue all
      remedies available to it at law or in equity including, without limitation,
      a
      decree of specific performance and/or injunctive relief, in each case without
      the need to post a bond or provide other security. The exercise of any such
      rights shall not prohibit the Holder from seeking to enforce damages pursuant
      to
      any other Section hereof or under applicable law. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (5) Adjustments
      to Conversion Price

     

    (a) Adjustment
      of Conversion Price upon Issuance of Common Stock.
      If the
      Company, at any time while this Debenture is outstanding, issues or sells,
      or in
      accordance with this Section 5(a) is deemed to have issued or sold, any shares
      of Common Stock, excluding shares of Common Stock deemed to have been issued
      or
      sold by the Company in connection with any Excluded Securities, for a
      consideration per share (the “New
      Issuance Price”)
      less
      than a price equal to the Conversion Price in effect immediately prior to such
      issue or sale (such price the "Applicable
      Price")
      (the
      foregoing a "Dilutive
      Issuance"),
      then
      immediately after such Dilutive Issuance the Conversion Price then in effect
      shall be reduced to an amount equal to the New Issuance Price. For purposes
      of
      determining the adjusted Conversion Price under this Section 5(a), the following
      shall be applicable:

     

    (i) Issuance
      of Options.
      If the
      Company in any manner grants or sells any Options and the lowest price per
      share
      for which one share of Common Stock is issuable upon the exercise of any such
      Option or upon conversion or exchange or exercise of any Convertible Securities
      issuable upon exercise of such Option is less than the Applicable Price, then
      such share of Common Stock shall be deemed to be outstanding and to have been
      issued and sold by the Company at the time of the granting or sale of such
      Option for such price per share. For purposes of this Section, the "lowest
      price
      per share for which one share of Common Stock is issuable upon the exercise
      of
      any such Option or upon conversion or exchange or exercise of any Convertible
      Securities issuable upon exercise of such Option" shall be equal to the sum
      of
      the lowest amounts of consideration (if any) received or receivable by the
      Company with respect to any one share of Common Stock upon granting or sale
      of
      the Option, upon exercise of the Option and upon conversion or exchange or
      exercise of any Convertible Security issuable upon exercise of such Option.
      No
      further adjustment of the Conversion Price shall be made upon the actual
      issuance of such share of Common Stock or of such Convertible Securities upon
      the exercise of such Options or upon the actual issuance of such Common Stock
      upon conversion or exchange or exercise of such Convertible
      Securities.

     

    (ii) Issuance
      of Convertible Securities.
      If the
      Company in any manner issues or sells any Convertible Securities and the lowest
      price per share for which one share of Common Stock is issuable upon such
      conversion or exchange or exercise thereof is less than the Applicable Price,
      then such share of Common Stock shall be deemed to be outstanding and to have
      been issued and sold by the Company at the time of the issuance or sale of
      such
      Convertible Securities for such price per share. For the purposes of this
      Section, the "lowest price per share for which one share of Common Stock is
      issuable upon such conversion or exchange or exercise" shall be equal to the
      sum
      of the lowest amounts of consideration (if any) received or receivable by the
      Company with respect to any one share of Common Stock upon the issuance or
      sale
      of the Convertible Security and upon the conversion or exchange or exercise
      of
      such Convertible Security. No further adjustment of the Conversion Price shall
      be made upon the actual issuance of such share of Common Stock upon conversion
      or exchange or exercise of such Convertible Securities, and if any such issue
      or
      sale of such Convertible Securities is made upon exercise of any Options for
      which adjustment of the Conversion Price had been or are to be made pursuant
      to
      other provisions of this Section, no further adjustment of the Conversion Price
      shall be made by reason of such issue or sale.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (iii) Change
      in Option Price or Rate of Conversion.
      If the
      purchase price provided for in any Options, the additional consideration, if
      any, payable upon the issue, conversion, exchange or exercise of any Convertible
      Securities, or the rate at which any Convertible Securities are convertible
      into
      or exchangeable or exercisable for Common Stock changes at any time, the
      Conversion Price in effect at the time of such change shall be adjusted to
      the
      Conversion Price which would have been in effect at such time had such Options
      or Convertible Securities provided for such changed purchase price, additional
      consideration or changed conversion rate, as the case may be, at the time
      initially granted, issued or sold. For purposes of this Section, if the terms
      of
      any Option or Convertible Security that was outstanding as of the Issuance
      Date
      are changed in the manner described in the immediately preceding sentence,
      then
      such Option or Convertible Security and the Common Stock deemed issuable upon
      exercise, conversion or exchange thereof shall be deemed to have been issued
      as
      of the date of such change. No adjustment shall be made if such adjustment
      would
      result in an increase of the Conversion Price then in effect.

     

    (iv) Calculation
      of Consideration Received.
      In case
      any Option is issued in connection with the issue or sale of other securities
      of
      the Company, together comprising one integrated transaction in which no specific
      consideration is allocated to such Options by the parties thereto, the Options
      will be deemed to have been issued for the difference of (x) the aggregate
      fair
      market value of such Options and other securities issued or sold in such
      integrated transaction, less (y) the fair market value of the securities other
      than such Option, issued or sold in such transaction and the other securities
      issued or sold in such integrated transaction will be deemed to have been issued
      or sold for the balance of the consideration received by the Company. If any
      Common Stock, Options or Convertible Securities are issued or sold or deemed
      to
      have been issued or sold for cash, the consideration received therefor will
      be
      deemed to be the gross amount raised by the Company; provided, however, that
      such gross amount is not greater than 110% of the net amount received by the
      Company therefor. If any Common Stock, Options or Convertible Securities are
      issued or sold for a consideration other than cash, the amount of the
      consideration other than cash received by the Company will be the fair value
      of
      such consideration, except where such consideration consists of securities,
      in
      which case the amount of consideration received by the Company will be the
      Closing Bid Price of such securities on the date of receipt. If any Common
      Stock, Options or Convertible Securities are issued to the owners of the
      non-surviving entity in connection with any merger in which the Company is
      the
      surviving entity, the amount of consideration therefor will be deemed to be
      the
      fair value of such portion of the net assets and business of the non-surviving
      entity as is attributable to such Common Stock, Options or Convertible
      Securities, as the case may be. The fair value of any consideration other than
      cash or securities will be determined jointly by the Company and the Holder.
      If
      such parties are unable to reach agreement within ten (10) days after the
      occurrence of an event requiring valuation (the "Valuation
      Event"),
      the
      fair value of such consideration will be determined within five (5) Business
      Days after the tenth (10th)
      day
      following the Valuation Event by an independent, reputable appraiser jointly
      selected by the Company and the Holder. The determination of such appraiser
      shall be deemed binding upon all parties absent manifest error and the fees
      and
      expenses of such appraiser shall be borne by the Company.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (v) Record
      Date.
      If the
      Company takes a record of the holders of Common Stock for the purpose of
      entitling them (A) to receive a dividend or other distribution payable in Common
      Stock, Options or in Convertible Securities or (B) to subscribe for or purchase
      Common Stock, Options or Convertible Securities, then such record date will
      be
      deemed to be the date of the issue or sale of the Common Stock deemed to have
      been issued or sold upon the declaration of such dividend or the making of
      such
      other distribution or the date of the granting of such right of subscription
      or
      purchase, as the case may be.

     

    (b) Adjustment
      of Conversion Price upon Subdivision or Combination of Common
      Stock.
      If the
      Company, at any time while this Debenture is outstanding, shall (a) pay a
      stock dividend or otherwise make a distribution or distributions on shares
      of
      its Common Stock or any other equity or equity equivalent securities payable
      in
      shares of Common Stock, (b) subdivide outstanding shares of Common Stock into
      a
      larger number of shares, (c) combine (including by way of reverse stock split)
      outstanding shares of Common Stock into a smaller number of shares, or (d)
      issue
      by reclassification of shares of the Common Stock any shares of capital stock
      of
      the Company, then the Conversion Price shall be multiplied by a fraction of
      which the numerator shall be the number of shares of Common Stock (excluding
      treasury shares, if any) outstanding before such event and of which the
      denominator shall be the number of shares of Common Stock outstanding after
      such
      event. Any adjustment made pursuant to this Section shall become effective
      immediately after the record date for the determination of stockholders entitled
      to receive such dividend or distribution and shall become effective immediately
      after the effective date in the case of a subdivision, combination or
      re-classification.

     

    (c) Purchase
      Rights.
      If at
      any time the Company grants, issues or sells any Options, Convertible Securities
      or rights to purchase stock, warrants, securities or other property pro rata
      to
      the record holders of any class of Common Stock (the "Purchase
      Rights"),
      then
      the Holder will be entitled to acquire, upon the terms applicable to such
      Purchase Rights, the aggregate Purchase Rights which the Holder could have
      acquired if the Holder had held the number of shares of Common Stock acquirable
      upon complete conversion of this Debenture (without taking into account any
      limitations or restrictions on the convertibility of this Debenture) immediately
      before the date on which a record is taken for the grant, issuance or sale
      of
      such Purchase Rights, or, if no such record is taken, the date as of which
      the
      record holders of Common Stock are to be determined for the grant, issue or
      sale
      of such Purchase Rights.

     

    (d) Other
      Events.
      If any
      event occurs of the type contemplated by the provisions of this Section 4 but
      not expressly provided for by such provisions (including, without limitation,
      the granting of stock appreciation rights, phantom stock rights or other rights
      with equity features), then the Company's Board of Directors will make an
      appropriate adjustment in the Conversion Price so as to protect the rights
      of
      the Holder under this Debenture; provided that no such adjustment will increase
      the Conversion Price as otherwise determined pursuant to this Section
      5.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (e) Other
      Corporate Events.
      In
      addition to and not in substitution for any other rights hereunder, prior to
      the
      consummation of any Fundamental Transaction pursuant to which holders of shares
      of Common Stock are entitled to receive securities or other assets with respect
      to or in exchange for shares of Common Stock (a "Corporate
      Event"),
      the
      Company shall make appropriate provision to insure that the Holder will
      thereafter have the right to receive upon a conversion of this Debenture, at
      the
      Holder's option, (i) in addition to the shares of Common Stock receivable upon
      such conversion, such securities or other assets to which the Holder would
      have
      been entitled with respect to such shares of Common Stock had such shares of
      Common Stock been held by the Holder upon the consummation of such Corporate
      Event (without taking into account any limitations or restrictions on the
      convertibility of this Debenture) or (ii) in lieu of the shares of Common Stock
      otherwise receivable upon such conversion, such securities or other assets
      received by the holders of shares of Common Stock in connection with the
      consummation of such Corporate Event in such amounts as the Holder would have
      been entitled to receive had this Debenture initially been issued with
      conversion rights for the form of such consideration (as opposed to shares
      of
      Common Stock) at a conversion rate for such consideration commensurate with
      the
      Conversion Rate. Provision made pursuant to the preceding sentence shall be
      in a
      form and substance satisfactory to the Required Holders. The provisions of
      this
      Section shall apply similarly and equally to successive Corporate Events and
      shall be applied without regard to any limitations on the conversion or
      redemption of this Debenture.

     

    (f) Whenever
      the Conversion Price is adjusted pursuant to Section 5 hereof, the Company
      shall
      promptly mail to the Holder a notice setting forth the Conversion Price after
      such adjustment and setting forth a brief statement of the facts requiring
      such
      adjustment.

     

    (g) In
      case
      of any (1) merger or consolidation of the Company or any subsidiary of the
      Company with or into another Person, or (2) sale by the Company or any
      subsidiary of the Company of more than one-half of the assets of the Company
      in
      one or a series of related transactions, a Holder shall have the right to (A)
      declare the entire amount due and owing under the Debenture (A) exercise any
      rights under Section 2(b), (B) convert the aggregate amount of this Debenture
      then outstanding into the shares of stock and other securities, cash and
      property receivable upon or deemed to be held by holders of Common Stock
      following such merger, consolidation or sale, and such Holder shall be entitled
      upon such event or series of related events to receive such amount of
      securities, cash and property as the shares of Common Stock into which such
      aggregate principal amount of this Debenture could have been converted
      immediately prior to such merger, consolidation or sales would have been
      entitled, or (C) in the case of a merger or consolidation, require the surviving
      entity to issue to the Holder a convertible Debenture with a principal amount
      equal to the aggregate principal amount of this Debenture then held by such
      Holder, plus all accrued and unpaid interest and other amounts owing thereon,
      which such newly issued convertible Debenture shall have terms identical
      (including with respect to conversion) to the terms of this Debenture, and
      shall
      be entitled to all of the rights and privileges of the Holder of this Debenture
      set forth herein and the agreements pursuant to which this Debentures were
      issued. In the case of clause (C), the conversion price applicable for the
      newly
      issued shares of convertible preferred stock or convertible Debentures shall
      be
      based upon the amount of securities, cash and property that each share of Common
      Stock would receive in such transaction and the Conversion Price in effect
      immediately prior to the effectiveness or closing date for such transaction.
      The
      terms of any such merger, sale or consolidation shall include such terms so
      as
      to continue to give the Holder the right to receive the securities, cash and
      property set forth in this Section upon any conversion or redemption following
      such event. This provision shall similarly apply to successive such
      events.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (6) REISSUANCE
      OF THIS DEBENTURE.

     

    (a) Transfer.
      If this
      Debenture is to be transferred, the Holder shall surrender this Debenture to
      the
      Company, whereupon the Company will forthwith issue and deliver upon the order
      of the Holder a new Debenture (in accordance with Section 6(d)), registered
      in
      the name of the registered transferee or assignee, representing the outstanding
      Principal being transferred by the Holder and, if less then the entire
      outstanding Principal is being transferred, a new Debenture (in accordance
      with
      Section 6(d)) to the Holder representing the outstanding Principal not being
      transferred. The Holder and any assignee, by acceptance of this Debenture,
      acknowledge and agree that, by reason of the provisions of Section 4(b)(iii)
      following conversion or redemption of any portion of this Debenture, the
      outstanding Principal represented by this Debenture may be less than the
      Principal stated on the face of this Debenture.

     

    (b) Lost,
      Stolen or Mutilated Debenture.
      Upon
      receipt by the Company of evidence reasonably satisfactory to the Company of
      the
      loss, theft, destruction or mutilation of this Debenture, and, in the case
      of
      loss, theft or destruction, of any indemnification undertaking by the Holder
      to
      the Company in customary form and, in the case of mutilation, upon surrender
      and
      cancellation of this Debenture, the Company shall execute and deliver to the
      Holder a new Debenture (in accordance with Section 6(d)) representing the
      outstanding Principal.

     

    (c) Debenture
      Exchangeable for Different Denominations.
      This
      Debenture is exchangeable, upon the surrender hereof by the Holder at the
      principal office of the Company, for a new Debenture or Debentures (in
      accordance with Section 6(d)) representing in the aggregate the outstanding
      Principal of this Debenture, and each such new Debenture will represent such
      portion of such outstanding Principal as is designated by the Holder at the
      time
      of such surrender.

     

    (d) Issuance
      of New Debentures.
      Whenever the Company is required to issue a new Debenture pursuant to the terms
      of this Debenture, such new Debenture (i) shall be of like tenor with this
      Debenture, (ii) shall represent, as indicated on the face of such new Debenture,
      the Principal remaining outstanding (or in the case of a new Debenture being
      issued pursuant to Section 6(a) or Section 6(c), the Principal designated by
      the
      Holder which, when added to the principal represented by the other new
      Debentures issued in connection with such issuance, does not exceed the
      Principal remaining outstanding under this Debenture immediately prior to such
      issuance of new Debentures), (iii) shall have an issuance date, as indicated
      on
      the face of such new Debenture, which is the same as the Issuance Date of this
      Debenture, (iv) shall have the same rights and conditions as this Debenture,
      and
      (v) shall represent accrued and unpaid Interest from the Issuance
      Date.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (7) NOTICES. Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms hereof must be in writing and will be deemed to have
      been
      delivered: (i) upon receipt, when delivered 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) Trading 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:

            	
              Neomedia
                Technologies, Inc.

            
	 	
              Two
                Concourse Parkway, Suite 500

            
	 	
              Atlanta,
                GA 30328

            
	 	
              Attention:    
                Frank Pazera

            
	 	
              Telephone:  
                (678)
                638-0460

            
	 	
              Facsimile:     (678)
                638-0467

            
	 	 
	
              With
                a copy to: 

            	
              Kirkpatrick
                & Lockhart Preston Gates Ellis LLP

            
	 	
              200
                South Biscayne Boulevard - Suite 2000

            
	 	
              Miami,
                FL 33131-2399

            
	 	
              Attention:    
                Clayton
                E. Parker, Esq.

            
	 	
              Telephone:   (305)
                539-3300

            
	 	
              Facsimile:     (305)
                358-7095

            

    

    

    
      	
              If
                to the Holder:

            	
              YA
                Global Investments, LP

            
	 	
              101
                Hudson Street, Suite 3700

            
	 	
              Jersey
                City, NJ 07303

            
	 	
              Attention:    
                Mark
                Angelo

            
	 	
              Telephone:  
                (201)
                985-8300

            
	 	 
	
              With
                a copy to:

            	
              David
                Gonzalez, Esq. 

            
	 	
              101
                Hudson Street - Suite 3700

            
	 	
              Jersey
                City, NJ 07302

            
	 	
              Telephone:  
                (201)
                985-8300

            
	 	
              Facsimile:     (201)
                985-8266

            

    

    

    or
      at
      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 three (3) Business Days prior to the effectiveness of such change.
      Written confirmation of receipt (i) given by the recipient of such notice,
      consent, waiver or other communication, (ii) 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 (iii)
      provided by a nationally recognized overnight delivery 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.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (8) Except
      as
      expressly provided herein, no provision of this Debenture shall alter or impair
      the obligations of the Company, which are absolute and unconditional, to pay
      the
      principal of, interest and other charges (if any) on, this Debenture at the
      time, place, and rate, and in the coin or currency, herein prescribed. This
      Debenture is a direct obligation of the Company. As long as this Debenture
      is
      outstanding, the Company shall not and shall cause their subsidiaries not to,
      without the consent of the Holder, (i) amend its certificate of incorporation,
      bylaws or other charter documents so as to adversely affect any rights of the
      Holder; (ii) repay, repurchase or offer to repay, repurchase or otherwise
      acquire shares of its Common Stock or other equity securities other than as
      to
      the Underlying Shares to the extent permitted or required under the Transaction
      Documents; or (iii) enter into any agreement with respect to any of the
      foregoing. 

     

    (9) This
      Debenture shall not entitle the Holder to any of the rights of a stockholder
      of
      the Company, including without limitation, the right to vote, to receive
      dividends and other distributions, or to receive any notice of, or to attend,
      meetings of stockholders or any other proceedings of the Company, unless and
      to
      the extent converted into shares of Common Stock in accordance with the terms
      hereof.

     

    (10) No
      indebtedness of the Company is senior to this Debenture in right of payment,
      whether with respect to interest, damages or upon liquidation or dissolution
      or
      otherwise. Without the Holder’s consent, the Company will not and will not
      permit any of their subsidiaries to, directly or indirectly, enter into, create,
      incur, assume or suffer to exist any indebtedness of any kind, on or with
      respect to any of its property or assets now owned or hereafter acquired or
      any
      interest therein or any income or profits there from that is senior in any
      respect to the obligations of the Company under this Debenture.

     

    (11) This
      Debenture shall be governed by and construed in accordance with the laws of
      the
      State of New Jersey, without giving effect to conflicts of laws thereof. Each
      of
      the parties consents to the jurisdiction of the Superior Courts of the State
      of
      New Jersey sitting in Hudson County, New Jersey and the U.S. District Court
      for the District of New Jersey sitting in Newark, New Jersey in connection
      with
      any dispute arising under this Debenture and hereby waives, to the maximum
      extent permitted by law, any objection, including any objection based on forum
      non conveniens to the bringing of any such proceeding in such jurisdictions.
      

     

    (12) If
      the
      Company fails to strictly comply with the terms of this Debenture, then the
      Company shall reimburse the Holder promptly for all fees, costs and expenses,
      including, without limitation, attorneys’ fees and expenses incurred by the
      Holder in any action in connection with this Debenture, including, without
      limitation, those incurred: (i) during any workout, attempted workout, and/or
      in
      connection with the rendering of legal advice as to the Holder’s rights,
      remedies and obligations, (ii) collecting any sums which become due to the
      Holder, (iii) defending or prosecuting any proceeding or any counterclaim to
      any
      proceeding or appeal; or (iv) the protection, preservation or enforcement of
      any
      rights or remedies of the Holder.

     

    (13) Any
      waiver by the Holder of a breach of any provision of this Debenture shall not
      operate as or be construed to be a waiver of any other breach of such provision
      or of any breach of any other provision of this Debenture. The failure of the
      Holder to insist upon strict adherence to any term of this Debenture on one
      or
      more occasions shall not be considered a waiver or deprive that party of the
      right thereafter to insist upon strict adherence to that term or any other
      term
      of this Debenture. Any waiver must be in writing.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    (14) If
      any
      provision of this Debenture is invalid, illegal or unenforceable, the balance
      of
      this Debenture shall remain in effect, and if any provision is inapplicable
      to
      any person or circumstance, it shall nevertheless remain applicable to all
      other
      persons and circumstances. If it shall be found that any interest or other
      amount deemed interest due hereunder shall violate applicable laws governing
      usury, the applicable rate of interest due hereunder shall automatically be
      lowered to equal the maximum permitted rate of interest. The Company covenants
      (to the extent that it may lawfully do so) that it shall not at any time insist
      upon, plead, or in any manner whatsoever claim or take the benefit or advantage
      of, any stay, extension or usury law or other law which would prohibit or
      forgive the Company from paying all or any portion of the principal of or
      interest on this Debenture as contemplated herein, wherever enacted, now or
      at
      any time hereafter in force, or which may affect the covenants or the
      performance of this indenture, and the Company (to the extent it may lawfully
      do
      so) hereby expressly waives all benefits or advantage of any such law, and
      covenants that it will not, by resort to any such law, hinder, delay or impeded
      the execution of any power herein granted to the Holder, but will suffer and
      permit the execution of every such as though no such law has been
      enacted.

     

    (15) Whenever
      any payment or other obligation hereunder shall be due on a day other than
      a
      Business Day, such payment shall be made on the next succeeding Business
      Day.

     

    (16) 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 OR ANY TRANSACTION
      DOCUMENT 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.

     

    (17) CERTAIN
      DEFINITIONS  For
      purposes of this Debenture, the following terms shall have the following
      meanings:

     

    (a) “Approved
      Stock Plan”
means
      a
      stock option plan that has been approved by the Board of Directors of the
      Company, pursuant to which the Company’s securities may be issued only to any
      employee, officer, or director for services provided to the
      Company.

     

    (b) "Bloomberg"
      means
      Bloomberg Financial Markets.

     

    (c) “Business
      Day”
means
      any day except Saturday, Sunday and any day which shall be a federal legal
      holiday in the United States or a day on which banking institutions are
      authorized or required by law or other government action to close.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (d) “Change
      of Control Transaction”
means
      the occurrence of (a) an acquisition after the date hereof by an individual
      or
      legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the
      Exchange Act) of effective control (whether through legal or beneficial
      ownership of capital stock of the Company, by contract or otherwise) of in
      excess of fifty percent (50%) of the voting securities of the Company (except
      that the acquisition of voting securities by the Holder or any other current
      holder of convertible securities of the Company shall not constitute a Change
      of
      Control Transaction for purposes hereof), (b) a replacement at one time or
      over
      time of more than one-half of the members of the board of directors of the
      Company which is not approved by a majority of those individuals who are members
      of the board of directors on the date hereof (or by those individuals who are
      serving as members of the board of directors on any date whose nomination to
      the
      board of directors was approved by a majority of the members of the board of
      directors who are members on the date hereof), (c) the merger, consolidation
      or
      sale of fifty percent (50%) or more of the assets of the Company or any
      subsidiary of the Company in one or a series of related transactions with or
      into another entity, or (d) the execution by the Company of an agreement to
      which the Company is a party or by which it is bound, providing for any of
      the
      events set forth above in (a), (b) or (c).

     

    (e) “Closing
      Bid Price”
means
      the price per share in the last reported trade of the Common Stock on a Primary
      Market or on the exchange which the Common Stock is then listed as quoted by
      Bloomberg.

     

    (f) “Convertible
      Securities”
means
      any
      stock
      or securities (other than Options) directly or indirectly convertible into
      or
      exercisable or exchangeable for Common Stock.

     

    (g) “Commission”
means
      the Securities and Exchange Commission.

     

    (h) “Common
      Stock”
means
      the common stock, par value $.001, of the Company and stock of any other class
      into which such shares may hereafter be changed or reclassified.

     

    (i) "Company
      Conversion Price"
      means,
      the lower of (i) the applicable Conversion Price and (ii) that price which
      shall
      be computed as seventy five percent (95%) of the lowest daily Volume Weighted
      Average Price of the Common Stock during the thirty (30) consecutive Trading
      Days immediately preceding the applicable Installment Date. All such
      determinations to be appropriately adjusted for any stock split, stock dividend,
      stock combination or other similar transaction.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (j) "Equity
      Conditions"
      means
      that each of the following conditions is satisfied: (i) on each day during
      the
      period beginning two (2) weeks prior to the applicable date of determination
      and
      ending on and including the applicable date of determination (the "Equity
      Conditions Measuring Period"), either (x) the Underlying Shares Registration
      Statement filed pursuant to the Registration Rights Agreement shall be effective
      and available for the resale of all applicable shares of Common Stock to be
      issued in connection with the event requiring determination or (y) all
      applicable shares of Common Stock to be issued in connection with the event
      requiring determination shall be eligible for sale without restriction and
      without the need for registration under any applicable federal or state
      securities laws; (ii) on each day during the Equity Conditions Measuring Period,
      the Common Stock is designated for quotation on the Principal Market and shall
      not have been suspended from trading on such exchange or market nor shall
      delisting or suspension by such exchange or market been threatened or pending
      either (A) in writing by such exchange or market or (B) by falling below the
      then effective minimum listing maintenance requirements of such exchange or
      market; (iii) during the Equity Conditions Measuring Period, the Company shall
      have delivered Conversion Shares upon conversion of the Debentures to the Holder
      on a timely basis as set forth in Section 4(b)(ii) hereof; (iv) any applicable
      shares of Common Stock to be issued in connection with the event requiring
      determination may be issued in full without violating Section 4(c) hereof and
      the rules or regulations of the Primary Market; (v) during the Equity Conditions
      Measuring Period, there shall not have occurred either (A) an Event of Default
      or (B) an event that with the passage of time or giving of notice would
      constitute an Event of Default; and (vii) the Company shall have no knowledge
      of
      any fact that would cause (x) the Registration Statements required pursuant
      to
      the Registration Rights Agreement not to be effective and available for the
      resale of all applicable shares of Common Stock to be issued in connection
      with
      the event requiring determination or (y) any applicable shares of Common Stock
      to be issued in connection with the event requiring determination not to be
      eligible for sale without restriction and without the need for registration
      under any applicable federal or state securities laws.

     

    (k) "Equity
      Conditions Failure"
      means
      that on any applicable date the Equity Conditions have not been satisfied (or
      waived in writing by the Holder).

     

    (l) “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended.

     

    (m) “Excluded
      Securities”
means,
      (a) shares issued or deemed to have been issued by the Company pursuant to
      an
      Approved Stock Plan (b) shares of Common Stock issued or deemed to be issued
      by
      the Company upon the conversion, exchange or exercise of any right, option,
      obligation or security outstanding on the date prior to date hereof, provided
      that the terms of such right, option, obligation or security are not amended
      or
      otherwise modified on or after the date hereof, and provided that the conversion
      price, exchange price, exercise price or other purchase price is not reduced,
      adjusted or otherwise modified and the number of shares of Common Stock issued
      or issuable is not increased (whether by operation of, or in accordance with,
      the relevant governing documents or otherwise) on or after the date hereof,
      (c)
      shares issued in connection with any acquisition by the Company, whether through
      an acquisition of stock or a merger of any business, assets or technologies,
      leasing arrangement or any other transaction the primary purpose of which is
      not
      to raise equity capital, and (d) the shares of Common Stock issued or
      deemed to be issued by the Company upon conversion of this
      Debenture.

     

    (n) “Options”
      means
      any
      rights, warrants or options to subscribe for or purchase shares of Common Stock
      or Convertible Securities.

     

    (o) “Original
      Issue Date”
means
      the date of the first issuance of this Debenture regardless of the number of
      transfers and regardless of the number of instruments, which may be issued
      to
      evidence such Debenture.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (p) “Person”
means
      a
      corporation, an association, a partnership, organization, a business, an
      individual, a government or political subdivision thereof or a governmental
      agency.

     

    (q) “Securities
      Act”
means
      the Securities Act of 1933, as amended, and the rules and regulations
      promulgated thereunder.

     

    (r) “Trading
      Day”
means
      a
      day on which the shares of Common Stock are quoted on the OTCBB or quoted or
      traded on such Primary Market on which the shares of Common Stock are then
      quoted or listed; provided, that in the event that the shares of Common Stock
      are not listed or quoted, then Trading Day shall mean a Business
      Day.

     

    (s) “Transaction
      Documents”
means
      the Securities Purchase Agreements between the Company and the Holder, and
      all
      agreements made or delivered in connection therewith, including, without
      limitation, the Security Documents, the Irrevocable Transfer Agent Instructions,
      and the Registration Rights Agreement (as those terms are defined in the various
      Securities Purchase Agreements).

     

    (t) “Underlying
      Shares”
means
      the shares of Common Stock issuable upon conversion of this Debenture or as
      payment of interest in accordance with the terms hereof.

     

    (u) “Underlying
      Shares Registration Statement”
means
      a
      registration statement meeting the requirements set forth in the Registration
      Rights Agreement, covering among other things the resale of the Underlying
      Shares and naming the Holder as a “selling stockholder” thereunder.

     

    (v) "Volume
      Weighted Average Price"
      means,
      for any security as of any date, the daily dollar volume-weighted average price
      for such security as reported by Bloomberg through its “Historical Price Table
      Screen (HP)” with “Market: Weighted Ave” function selected, or, if no dollar
      volume-weighted average price is reported for such security by Bloomberg, the
      average of the highest closing bid price and the lowest closing ask price of
      any
      of the market makers for such security as reported in the "pink sheets" by
      Pink
      Sheets LLC. 

     

    (w) "Warrants"
      has the
      meaning ascribed to such term in the Securities Purchase Agreements between
      the
      Company and the Holder, and shall include all warrants issued in exchange
      therefor or replacement thereof.

     

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF,
      the
      Company has caused this Secured Convertible Debenture to be duly executed by
      a
      duly authorized officer as of the date set forth above.

     

    
      	 	
              COMPANY:

            
	 	
              NEOMEDIA
                TECHNOLOGIES, INC.

            
	 	 
	 	
              By:  /s/
                Frank Pazera   

            
	 	
              Name:  
                Frank
                Pazera

            
	 	
              Title:    
                Chief
                Financial Officer

            

    

    

    

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      I

    CONVERSION
      NOTICE

     

     

    (To
      be executed by the Holder in order to Convert the
      Debenture)

    
 

    
      	
              TO:
                

            

    

    

    The
      undersigned hereby irrevocably elects to convert $     of
      the
      principal amount of Debenture No. NEO-2008-1 into Shares of Common Stock of
      NEOMEDIA
      TECHNOLOGIES, INC.,
      according to the conditions stated therein, as of the Conversion Date written
      below.

     

    
      	
              Conversion
                Date:

            	 	  
	 
	
              Conversion
                Amount to be converted:

            	 	
              $

            	
                   
                

            	 
	
              Conversion
                Price:

            	 	
              $

            	
                  
                

            	 
	
              Number
                of shares of Common Stock to be issued:

            	 	 	  
 	 
	
              Amount
                of Debenture Unconverted:

            	 	
              $

            	
                 
                

            	 
	 	 	 	
                 
                  

            	 
	 	 	 	 	 
	 
	
              Please
                issue the shares of Common Stock in the following name and to the
                following address:

            
	
              Issue
                to:

            	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
              Authorized
                Signature:

            	 	 	  
 	 
	
              Name:

            	 	 	   
 	 
	
              Title:

            	 	 	    
 	 
	
              Broker
                DTC Participant Code:

            	 	 	 	 
	
              Account
                Number:Unassociated Document

     

    

      AGREEMENT
        BETWEEN

      

      DOCUMENT
        SECURITY SYSTEMS, INC.

      

      AND

      

      ERGONOMIC
        GROUP, INC.

      

      This
        Agreement is effective as of April 11, 2008 between DOCUMENT SECURITY SYSTEMS,
        INC. (“DSS”), a corporation organized and existing under the laws of the State
        of New York with its principal address at First Federal Plaza, Suite 1525,
        28
        East Main Street, Rochester, New York 14614 and ERGONOMIC GROUP, INC.
        (“Ergonomic”), a corporation organized and existing under the laws of
the
        State
        of New York with its principal address at 609-3
        Cantiague Rock Road, Westbury, New York 11590.
        DSS and
        Ergonomic may also be referred to herein individually as a “Party” and together
        as the
        “Parties.”

      

      RECITALS

      

      WHEREAS,
        the Parties are engaged in the business of designing and developing systems
        and
        products relating to security printing and document anti-counterfeiting and
        have
        acquired and developed substantial patented and patent pending technology
        and
        know-how for creating encoded images useful in security printing and document
        anti-counterfeiting, including such printing and anti-counterfeiting implemented
        over communications networks; and

       

      WHEREAS,
        the Parties wish to acquire and grant patent
        licenses to each other and to employ the Technology (as defined below) and
        the
        On Demand Services Know-how (as
        defined below) in a Licensed Field (as defined below) upon the terms and
        conditions contained herein.

      

      NOW,
        THEREFORE, in consideration of the promises and the mutual covenants of this
        Agreement, the Parties hereby agree as follows:

      

      AGREEMENT

      

      
        	1.	
                Definitions

              

      

      

      
        	1.1	
                “Affiliate”
                  shall mean any corporatiaon, partnership or limited liability company
                  of
                  which more than 50% of the voting control and economic ownership
                  is owned,
                  directly or indirectly, by a
                  Party
                  or
                  under common control of a
                  Party.

              

      

      

      
        	1.2	
                “AuthentiGuard
                  Pantograph 4000”
                  shall mean the technology which creates pantograph backgrounds
                  embedding
                  hidden symbols, words and designs into a printed document background
                  that
                  appear when the document is copied using industry standard copiers
                  and computer publishing systems and currently marketed by DSS under
                  the
                  trade
                  name“AuthentiGuard
                  Pantograph 4000TM.”

              

      

       

      
        	1.3	
                “Calendar
                  Quarter”
                  shall mean a three (3) month period denoting the time span over
                  which
                  royalties are to be calculated and paid (pro
                  rated
                  for any partial period(s)).
                  The first Calendar Quarter commences on the Effective Date of this
                  Agreement. Subsequent Calendar Quarters shall begin on the first
                  day
                  following the end of the previous Calendar Quarter (e.g., if the
                  Effective
                  Date is April
                  3, 2008,
                  the first Calendar Quarter would end June 30, 2008 and the second
                  Calendar
                  Quarter would begin July 1, 2008.)

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	1.4	
                “Confidential
                  Information”
                  shall mean any information furnished or made available on a paper,
                  electronic or mechanical medium by one Party to another Party
                  that
                  (a) is confidential and is designated by a Party on the medium
                  as
                  confidential, proprietary, a trade secret or a similar
                  designation; (b)
                  relates to past, present or future research, developments, improvements,
                  inventions, processes, software, programs, Intellectual Property,
                  techniques, designs or other technical data, contact lists or other
                  compilations for marketing or development, or regarding administrative,
                  management, financial or marketing activities of the Party disclosing
                  such
                  information or regarding the identities of customers of the Party
                  disclosing such information;
                  and (c) relates to the subject matter of this Agreement. Confidential
                  Information shall include, without limitation, the Technology and
                  the On
                  Demand Services Know-how.

              

      

       

      
        	1.5	
                “Digital
                  File”
                  shall mean any executable code owned and delivered by a
                  Party for use by the other Party in connection with the Technology
                  (as
                  defined hereinbelow) or On Demand Services Know-how (as defined
                  hereinbelow) to enable the placement of security features in Licensed
                  Products (as defined hereinbelow).

              

      

       

      
        	1.6	
                “Effective
                  Date”
                  shall mean the date set forth in the first paragraph of this
                  Agreement.

              

      

       

      
        	1.7	
                “Gross
                  Margin”
                  shall mean the invoiced amount of a product or service,
                  less the
                  direct, unburdened cost of goods sold; allowances and discounts
                  actually
                  credited; taxes, tariffs and import/export duties (but not value-added
                  taxes assessed on income derived from sales); and reasonable commissions
                  paid to internal sales personnel of a selling Party and independent
                  sales
                  entities that are not in the employ or under the control of a selling
                  Party. Installation and set-up fees charged to a customer by a
                  Party shall
                  not be included in Gross Margin. Commission deductions shall not
                  exceed
                  20% of an invoiced amount.

              

      

      

      
        	1.8	
                “Intellectual
                  Property” shall
                  mean, wherever existing in the world, (i) patents, whether in the
                  form of
                  utility patents, design patents or industrial designs, and all
                  pending
                  applications thereof; (ii) trademarks, trade names, service marks,
                  domain
                  names, designs, logos, trade dress and trade styles, whether or
                  not
                  registered, and all pending applications for registration thereof;
                  (iii)
                  copyrights, whether or not registered, and all pending applications
                  for
                  registration thereof; (iv) know-how, inventions, improvements,
                  methods,
                  processes, operations manuals and procedures, research records,
                  trade
                  secrets, confidential information, product designs, engineering
                  specifications and drawings, technical information, formulas, customer
                  lists, supplier lists and market analyses; (v) computer software
                  and
                  programs, and related flow charts, programmer notes, documentation,
                  updates, and data, whether in object or source code form; and (vi)
                  all
                  other similar proprietary rights, whether or not
                  registered.

              

      

       

      
        	1.9	
                “Licensed
                  Field”
                  shall mean all implementations of the Technology (as subsequently
                  defined
                  herein) which involve the transmission of a file on the Internet,
                  on an
                  intranet or by any other electronic means of communication, which
                  file is
                  printed on paper or viewed on a monitor after transmission, except
                  for (i)
                  a file that is used to batch print at least 1,000 impressions,
                  which
                  impressions contain static information, and (ii) a file
                  of static images utilized for lithographic printing plate processors
                  which
                  output onto materials including, but not limited to, megalith,
                  film,
                  metal, polyester and silver master that are used as printing plates
                  on
                  printing presses.

              

      

      

      
        	1.10	
                “Licensed
                  Patents”
                  shall mean both “DSS
                  Licensed Patents”
                  and “Ergonomic
                  Licensed Patents.” “DSS
                  Licensed Patents”
                  are the patents and patent applications listed on Exhibit A, and
                  all other
                  present and future United States and foreign patents owned by DSS
                  or under
                  which DSS has rights that protect inventions that are practically
                  useful
                  in the Licensed Field.
                  “Ergonomic Licensed Patents”
                  are the patents and patent applications listed on Exhibit B, and
                  all other
                  present and future United States and foreign patents owned by Ergonomic
                  or
                  under which Ergonomic has rights that protect inventions that are
                  practically useful in the Licensed
                  Field.

              

      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      
        	1.11	
                “Licensed
                  Products”
                  shall mean products
                  and services in
                  the Licensed Field that incorporate the Technology (defined below)
                  and/or
                  On Demand Services Know-how (defined below) and/or are covered
                  by the DSS
                  Licensed Patents and/or are covered by the Ergonomic Licensed Patents,
                  and
                  include, but are not limited to, files that are transmitted (for
                  example,
                  a file transmitted from a server operated by one of the Parties)
                  and
                  systems that transmit files (for example, a server furnished by
                  a Party to
                  a customer for use by the customer on its
                  premises).

              

      

      

      
        	1.12	
                “On
                  Demand Services Know-how”
                  shall mean know-how that now or in the future is utilized by Ergonomic
                  for
                  providing over a network, in response to receipt of a communicated
                  document over that network, a secure image of the entire document
                  or a
                  part thereof using pre-stored
                  fonts.

              

      

      

      
        	1.13	
                “Technology”
                  shall mean (i) AuthentiGuard Pantograph
                  4000, AuthentiGuard Survivor
                  21, and all other AuthentiGuardTM technologies
                  including, without limitation, AuthentiGuard Prism, AuthentiGuard
                  Block-Out, AuthentiGuard Laser Moiré, and all Improvements thereon owned
                  by DSS, (ii) all Digital Files now and in the future owned by
                  or under license to DSS,
                  and all Improvements thereon developed and owned by DSS;
                  and (iii) all
                  specialized, novel or unique techniques, practices, inventions,
                  digitized
                  formats, improvements, drawings, computer imaging, computer generated
                  step
                  and repeat, discoveries, know-how, trade secrets, and all related
                  knowledge, skill, experience, technical and other proprietary information
                  and data and other Intellectual Property now or in the future owned
                  by or
                  under license to DSS that are used to secure documents and files
                  and to
                  thwart counterfeiting,
                  which Ergonomic acknowledges includes proprietary, valuable and
                  substantial trade secrets of DSS.

              

      

      

      
        	1.14	
                “Technology
                  Marks”
                  shall mean DSS’s
                  trademarks
                  and service marks which serve to identify DSS as the source of
                  the
                  Technology.

              

      

      

      
        	1.15	
                “Territory”
                  shall mean the
                  entire world including but not limited to the
                  United States of America.

              

      

      

      
        	2.	
                Grant
                  of Licenses

              

      

      

      
        	2.1	
                Grant
                  of License to Ergonomic. DSS
                  hereby grants to Ergonomic for the Term (as defined in paragraph
                  13.1) and
                  in the Territory an exclusive,
                  non-transferable license
                  (except as set forth in paragraphs 2.2 and 2.3) to use its Technology
                  and
                  DSS Licensed Patents in the Licensed Field. Ergonomic
                  shall not have the right to manufacture,
                  market or sell, directly or indirectly, or
                  the right or power to license to any other person the right to
                  manufacture,
                  market or sell, directly or indirectly, blank safety paper which
                  utilizes
                  the Technology. For purposes hereof, the term “blank safety paper” means
                  paper which does not have customer specific information and does
                  not have
                  visible
                  color
                  such as words, symbols, borders, artwork
                  or similar features. Ergonomic understands and agrees that it shall
                  not
                  have the right to print “generic” or “blank safety paper” under
                  this Agreement.

              

      

       

      
        	2.2	
                Grant
                  of Licenses to DSS.
                  Ergonomic hereby grants back to DSS for the Term (as defined in
                  paragraph
                  13.1) and in the Territory a non-exclusive, non-transferable license
                  (except as set forth in paragraph 2.3) to use the Technology and
                  DSS
                  Licensed Patents in the Licensed Field. Ergonomic also grants to
                  DSS for
                  the Term (as defined in paragraph 13.1) and in the Territory a
                  non-exclusive, non-transferable license (except as set forth in
                  paragraph
                  2.3) to use On Demand Services Know-how and Ergonomic Licensed
                  Patents in
                  the Licensed Field.

              

      

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
        	2.3	
                Grant
                  of Licenses to Others.
                  The Parties agree that each grant of a license, sublicense or any
                  other
                  transfer of the Technology, DSS Licensed Patents, On Demand Services
                  Know-how and/or Ergonomic Licensed Patents in the Licensed Field,
                  including, without limitation, to resellers, is prohibited unless
                  the
                  Parties hereinafter agree to such grants on terms mutually agreeable
                  to
                  both, which agreement shall be in writing. The provisions of this
                  paragraph 2.3 shall not apply to all licenses, sublicenses or any
                  other
                  transfers by the Parties of Licensed Products in the Licensed Field,
                  including without limitation, the inclusion of the Technology,
                  DSS
                  Licensed Patents, On Demand Services Know-how and/or Ergonomic
                  Licensed
                  Patents in the sale of “bundles” of related or unrelated products or
                  services.

              

      

       

      
        	2.4	
                Proprietary
                  Rights.
                  Except as expressly set forth in this Agreement, all rights or
                  licenses
                  with respect to the Technology and On Demand Services Know-how,
                  including
                  any Improvements (as defined in paragraph 4.2) or modifications
                  to the
                  Technology and/or On Demand Services Know-how made by the Parties,
                  Technology Marks, Confidential or Proprietary Information or other
                  know-how and Intellectual Property of the Parties belong to the
                  respective
                  Parties.
                  The Parties acknowledge that application of the Technology and
                  On Demand
                  Services Know-how may contain valuable trade secrets and each Party
                  agrees
                  to employ reasonable security precautions to maintain the confidentiality
                  of such trade secrets.
                  Except as otherwise provided herein,
                  neither
                  Party shall
                  knowingly
                  assist any third party
                  to
                  reverse engineer
                  or
                  assemble,
                  produce, use, license, sell or otherwise distribute or exploit
                  the
                  Technology
                  or
                  On Demand Services Know-how or Intellectual Property derived from
                  the
                  other Party or
                  bypass or defeat protection methods for
                  preventing unauthorized access to such Technology or On Demand
                  Services
                  Know-how. Notwithstanding
                  the foregoing, for purposes of this Section 2.4, neither Party
                  shall be in
                  violation of the restrictions provided herein by reason of the
                  sale of
                  Licensed Products to customers otherwise in compliance with this
                  Agreement.

              

      

      

      
        	3.	
                Distribution/Disclosure
                  of Technology and Competition

              

      

       

      
        	3.1	
                Distribution/Disclosure
                  of Technology.
                  Ergonomic and DSS may not disclose the Technology or On Demand
                  Services
                  Know-how, except to the extent that the Technology or On Demand
                  Services
                  Know-how is embedded in Licensed Products furnished by a Party
                  to an
                  existing or potential customer of the Party. Ergonomic
                  and DSS will ensure that their respective employees, consultants,
                  directors, agents and other applicable third parties are contractually
                  bound to honor this provision.

              

      

      

      
        	3.2	
                Patent
                  Marking.
                  Each Party hereby agrees to use reasonable commercial efforts to
                  mark,
                  without charge to the other Party, all
                  Licensed Products made under the terms and conditions of this Agreement
                  with a suitable legend in accordance with statutory requirements
                  and in a
                  form approved in advance by the other Party indicating that the
                  Licensed
                  Products
                  are covered under specified patents of one or both of the respective
                  Parties
                  as
                  the case may be. Should
                  either Party believe that any Licensed
                  Product
                  should
                  be marked in accordance with this Agreement, such Party shall notify
                  in
                  writing that the other Party do so, particularly identifying such
                  Licensed
                  Product
                  and the specific patents which are applicable to such Licensed
                  Products.
                  However, the other Party shall not be required to mark Licensed
                  Products
                  with a degree of care beyond that exercised by the requesting Party
                  to
                  mark its own products.

              

      

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      
        	3.3	
                Competition.
                  The Parties intend to compete in the marketplace for new customers,
                  it
                  being understood that each Party has present customers. The respective
                  customer list of each Party will be made known to the other Party
                  from
                  time to time as reasonably requested by the other Party so as to
                  inform
                  the marketing efforts of the other Party. Such customer list shall
                  include
                  then-current customers of such Party and such additional entities
                  that are
                  then-determined to be potential customers of such Party based upon
                  marketing efforts of such Party. Neither Party shall call on the
                  other’s
                  then-current customers and then-potential customers without
                  permission of the other Party.
                  The customer lists shall be kept confidential at the Board of Directors,
                  CEO and President levels of the Parties, and their respective
                  attorneys.

              

      

      

      
        	4.	
                Improvements

              

      

      

      
        	4.1	
                Ownership
                  of Improvements. During
                  the Term, each Party shall advise the other of any technical improvements,
                  modifications or enhancements relating to the Technology or
                  On Demand Services Know-how created from time to time and
                  useful in the Party’s sole discretion in connection with the Technology or
                  On Demand Services Know-how
                  (collectively
                  referred to as “Improvements”). Any
                  such Improvement shall be the property of the Party that made the
                  Improvement and shall be licensed in accordance with the license
                  grants of
                  Section 2. Improvements that are made jointly by the parties shall
                  be
                  owned jointly and equally. Each Party agrees to execute any and
                  all
                  documents requested by the other to perfect rights to jointly-made
                  Improvements. 

              

      

       

      
        	5.	
                Technical
                  Support; Training and Technology
                  Services

              

      

      

      
        	5.1	
                General
                  Support Services.
                  Each Party shall, at no additional charge to the other, provide
                  to the
                  other Party reasonable assistance and technical support related
                  to On
                  Demand Services Know-how, the Technology, Improvements (other than
                  those
                  Improvements owned by the other Party), Technology Marks and Confidential
                  Information. 

              

      

      

      
        	5.2	
                Limitation
                  on Liability for Support Services.
                  Except in the event of willful misconduct, in no event shall the
                  technicians, employees, officers or agents of either Party or its
                  Affiliates be liable to the other Party for any damages or claims
                  for
                  damages which may occur during the provision of support
                  services.

              

      

      

      
        	5.3	
                Customer
                  Support Services. Each
                  Party shall be responsible for the provision of customer, technical
                  and
                  other support services to its customers and such Party may, at
                  its sole
                  option, receive compensation from its customers for the provision
                  of such
                  services. Each Party agrees to assist the other Party in its provision
                  of
                  any customer, technical and other support services to the customers
                  of
                  such other Party on mutually agreeable terms and
                  conditions.

              

      

      

      
        	6.	
                Royalty
                  Fees

              

      

      

      
        	
                6.1

              	
                Royalty
                  Fees.
                  In consideration of the rights and licenses granted herein to
                  be rendered by each Party to the other and for other good and valuable
                  consideration,
                  each Party agrees to pay royalties to the other Party in
                  the amount of 50% of the Gross Margin on sales of Licensed Products.
                  The
                  Parties agree to reasonably price the Licensed Products and to
                  also keep
                  accurate records of the sale prices for Licensed Products, whether
                  or not
                  such Licensed Products are included in a “bundle” of other products.
                  Notwithstanding the foregoing, DSS shall not have to pay any royalty
                  to
                  Ergonomic far payments received or to be received pursuant to existing
                  agreements between DSS and each of (i) HSBC
                  Fianzas, S.A. Grupo Financiero HSBC,
                  and (ii) Indra
                  Sistemas S.A. with respect to agreements with or related to The
                  Panama
                  Canal Authority.

              

      

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      
        	6.2	
                Each
                  Party shall, concurrent with the delivery of its Sales Report (as
                  defined
                  in Section 7.1 below) for a Calendar Quarter, deliver to the other
                  Party
                  the Royalty Fee payment in U.S. dollars in full for such Calendar
                  Quarter.

              

      

      

      
        	
                6.3

              	
                If
                  a Party disputes any information contained in a Sales Report or
                  the amount
                  of any Royalty Fee payment provided by the other Party, the disputing
                  Party shall, within thirty
                  (30)
                  business days from the date of the disputed Sales Report or payment,
                  as
                  the case may be, notify the reporting Party, in writing, concerning
                  the
                  substance of the dispute and include any supporting documentation
                  related
                  thereto. The Parties agree to work together in good faith to resolve
                  each
                  dispute. The
                  receipt or acceptance by a Party of any Sales Report or Royalty
                  Fee
                  payment shall not prevent that
                  Party
                  from subsequently challenging, within thirty (30)
                  business days from the date of the disputed Report or Royalty Fee
                  payment,
                  the validity or accuracy of such Sales
                  Report
                  or
                  Royalty Fee payment. All
                  fees due hereunder are non-refundable (except as expressly provided
                  herein) and not contingent on any additional services or products
                  to be
                  provided hereunder.

              

      

      

      
        	
                6.4

              	
                Failure
                  to Pay.
                  If
                  a Party fails to pay any amount owed to the other Party under this
                  Agreement when such amount is due and payable, the failing Party
                  shall
                  also pay the
                  other Party interest on
                  the amount of such under-payment or non-payment at
                  the rate equal to three quarters of a percent (0.75%) per month,
                  accruing
                  from
                  the due date until paid. A
                  Party shall also have the right, at its option, to terminate this
                  Agreement should the other Party not cure any default for non-payment
                  within a reasonable time under the circumstances. Any
                  payments received from a failing Party, when there is any amount
                  overdue,
                  shall be applied first to discharge any such accrued late charges.
                  

              

      

      

      
        	7.	
                Sales
                  Reports; Record Inspection and
                  Audit

              

      

      

      
        	
                7.1

              	
                Sales
                  Reports.
                  Within
                  forty-five (45) days after the end of each Calendar Quarter, each
                  Party
                  shall deliver a report to the other Party certified by an authorized
                  officer of such Party showing in detail the dollar value received
                  for
                  Licensed Products sold, and the amount of Royalty Fees due to the
                  other
                  Party for the
                  prior
                  Calendar Quarter (a “Sales Report”). Each Party shall also
                  provide
                  additional supporting information and documentation relating
                  to Licensed
                  Products
                  sold as the other Party may reasonably request.
                  The failure of a Party to deliver a Sales Report on its due date
                  shall be
                  deemed to be a material breach of this
                  Agreement.

              

      

      

      
        	
                7.2

              	
                Maintenance
                  of Books and Records; Record Inspection and Audit. 
                  During the Term and for a period of two
                  (2)
                  years thereafter, each Party agrees to keep and maintain accurate
                  and
                  separate records related to this Agreement, including Customer
                  agreements
                  which resulted in the distribution of Licensed Products. Each
                  Party further agrees that during the Term and for such two (2)
                  year period
                  it
                  shall
                  make these records available for inspection, from
                  time to time, by the other Party, or a
                  third party retained by the
                  other Party, at
                  the Party’s site and at the other Party’s cost.
                  Any audit and/or inspection shall be conducted during regular
                  business hours at a Party’s facilities upon at least three
                  (3)
                  business days prior written notice. Such examination shall be conducted
                  in
                  such a manner as to not unduly interfere with a Party’s business.
                  Subject
                  to Section 7.3, if the audit reveals an underpayment of Royalty
                  Fees by a
                  Party under this Agreement, the Party shall pay to the other Party
                  the
                  full amount of any underpayment revealed by the audit, plus interest
                  on
                  the underpaid amounts accruing at the rate of three quarters of
                  a percent
                  (0.75%) per month until all underpaid amounts are paid in full.
                  Notwithstanding
                  the foregoing, if such audit reveals an underpayment by an amount
                  in
                  excess of twenty percent (20%) for the period covered by the audit
                  report,
                  the Party shall pay
                  to the
                  other Party
                  all of the fees and
                  costs associated with such audit,
                  the amount underpaid, interest due and an additional payment of
                  fifteen
                  percent (15%) of the total amount due for the audited period.
                  

              

      

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      
        	
                7.3

              	
                Audit
                  Dispute Resolution Process.
                  If
                  an audited Party disputes or otherwise desires to obtain third
                  party
                  verification of an audit report previously obtained by an auditing
                  Party,
                  within thirty (30) days from the date of the previous audit report
                  the
                  audited Party shall notify the auditing Party of its intent to
                  verify the
                  audit report. The audited Party shall schedule, with an independent
                  auditor, an audit of the subject records as soon as possible following
                  the
                  date of its notice to the auditing Party hereunder. The auditing
                  Party
                  shall timely cooperate with and provide to the auditor all documentation
                  and other information requested by the auditor. If the results
                  of the
                  independent audit are consistent with the auditing Party’s previous audit
                  results, the audited Party shall pay all amounts due as set forth
                  in
                  Section 7.2 and all costs and fees associated with the independent
                  audit.
                  If the results of the independent audit differ from the previous
                  audit,
                  the Parties shall rely upon the results of the independent audit
                  in
                  determining what, if any, amounts are due pursuant to Section 7.2
                  and both
                  Parties shall equally share the cost and fees of the independent
                  audit.
                  The Parties agree that a final determination of a Party’s underpayment by
                  an amount in excess of twenty percent (20%) for the period covered
                  by the
                  audit report shall be deemed to be a material breach of this
                  Agreement.

              

      

      

      
        	8.	
                Confidentiality

              

      

      

      
        	
                8.1

              	
                The
                  Parties acknowledge that in the course of their performance under
                  this
                  Agreement, they may be furnished with, receive, or otherwise have
                  access
                  to Confidential Information of or concerning the other Party. For
                  the purposes of this Agreement, the Party disclosing Confidential
                  Information shall be referred to as the “Disclosing Party” and the Party
                  receiving Confidential Information shall be referred to as the
“Receiving
                  Party.”

              

      

      

      
        	
                8.2

              	
                A
                  Receiving Party shall not use the Disclosing Party’s Confidential
                  Information for any purpose other than in accordance with this
                  Agreement
                  and shall not disclose, without the prior written consent of the
                  Disclosing Party, Confidential Information to any person,
                  other than persons
                  approved by both Parties who
                  (a) are subject to a nondisclosure obligation comparable in scope
                  to this
                  Section;
                  and (b) have a need to know such Confidential Information.
                  

              

      

      

      
        	
                8.3

              	
                A
                  Receiving Party shall not be liable for disclosure or use of any
                  particular Confidential Information that: (a) is or becomes publicly
                  known
                  through no fault of the Receiving Party; (b) is developed independently
                  by
                  the Receiving Party without reference to any Confidential Information
                  of
                  the Disclosing Party as evidenced by the Receiving Party’s records; (c) is
                  known by the Receiving Party at the time of disclosure by the Disclosing
                  Party if the Receiving Party does not then have a duty to maintain
                  its
                  confidentiality,
                  as
                  evidenced by the Receiving Party’s records; or (d) is rightfully obtained
                  by the Receiving Party from a third party not obligated to preserve
                  its
                  confidentiality. A Receiving Party also may disclose Confidential
                  Information solely to the extent required by a court or other governmental
                  authority, provided that (i) the Receiving Party gives the Disclosing
                  Party prompt prior notice of the required disclosure;
                  (ii) the Receiving Party uses reasonable efforts to resist disclosing
                  the
                  Confidential Information;
                  (iii) the Receiving Party cooperates with the Disclosing Party
                  to
                  obtain
                  a protective order or otherwise limit the disclosure;
                  and (iv) as soon as reasonably possible, the Receiving Party provides
                  a
                  letter from its counsel confirming that the Confidential Information
                  is in
                  fact
                  required to be disclosed. The
                  Parties acknowledge and agree that they may be required under applicable
                  federal securities laws and regulations to disclose the terms of
                  this
                  Agreement, which shall not be deemed a violation of this Section
                  8.

              

      

      

      
        	
                8.4

              	
                All
                  Confidential Information shall remain the property of and be deemed
                  proprietary to the Disclosing Party. At any time upon the Disclosing
                  Party’s request, the Receiving Party shall promptly return to the
                  Disclosing Party all Confidential Information, including all copies
                  thereof, and all documents, materials, or products generated or
                  produced
                  by,
                  or at the request of,
                  the Receiving Party that contain, summarize, outline or otherwise
                  reference the Disclosing Party’s Confidential Information (individually
                  and collectively, “Copies”). At the Disclosing Party’s option,
                  the Receiving Party shall destroy all of
                  the Disclosing Party’s
                  Confidential Information and Copies and
                  certify such destruction to the Disclosing Party. This paragraph
                  shall not
                  apply to Confidential Information that is furnished to a Party
                  under its
                  license rights and that is used in exercising those
                  rights.

              

      

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      
        	8.5	
                A
                  Receiving Party further agrees to receive Confidential Information
                  in
                  strict confidence and to accord such Confidential Information at
                  least the
                  same level of protection against unauthorized use or disclosure
                  that the
                  Receiving Party customarily accords to its own confidential, proprietary
                  or trade secret information of a like nature, but in no event less
                  than a
                  reasonable level of protection. The Receiving Party shall have
                  sole
                  responsibility for the physical security and maintenance of the
                  confidentiality of all Confidential Information delivered to it
                  by the
                  Disclosing Party. The Disclosing Party shall have the right, upon
                  at least
                  three (3) business days prior written notice to the Receiving Party
                  and
                  during the Receiving Party’s normal business hours, to visit and inspect
                  the Disclosing Party’s places of business for the purpose of verifying, to
                  the satisfaction of the Disclosing Party, that the Receiving Party
                  is
                  performing its obligations under this Section
                  8.

              

      

      

      
        	9.	
                Infringement
                  Indemnity; Infringement Lawsuits and Patent
                  Prosecution

              

      

      

      
        	
                9.1

              	
                DSS
                  shall indemnify, defend and hold Ergonomic and its Affiliates,
                  shareholders, directors, officers, members, managers, employees,
                  agents,
                  independent contractors, licensees and representatives (“Ergonomic
                  Indemnified Parties”) harmless for, from and against, any and all suits,
                  actions and proceedings, claims, threats, demands, liabilities,
                  losses,
                  damages, judgments, obligations, fines, expenses (including, without
                  limitation, attorneys’ fees and expert witness fees) and costs
                  (individually and collectively, “Infringement Claims”), made against an
                  Ergonomic Indemnified Party by a third party arising from or in
                  connection
                  with any actual or alleged claims that the Technology, Improvements
                  (other
                  than improvements owned by Ergonomic or jointly owned by Ergonomic),
                  Technology Marks, Confidential Information and/or other proprietary
                  information provided by DSS under this Agreement infringes any
                  patent,
                  trademark, copyright, trade secret or other property right of a
                  third
                  party. The indemnification in this Section 9 is contingent upon
                  (a) the
                  Ergonomic Indemnified Parties promptly notifying DSS in writing
                  of any
                  known claim which may give rise to an Infringement Claim; (b) DSS’s
                  control of the defense and settlement of such Infringement Claims
                  at DSS’s
                  sole expense; provided, however, that any settlement be made with
                  the
                  consent of or with an unconditional full release of the Ergonomic
                  Indemnified Parties; and (c) the Ergonomic Indemnified Parties
                  cooperate
                  with all reasonable requests of DSS (at DSS’s expense) in defending or
                  settling an Infringement Claim. Ergonomic Indemnified Parties reserve
                  the
                  right to retain their own counsel, at Ergonomic’s
                  sole
                  expense
                  to participate in the defense of any Infringement
                  Claims.
                  Ergonomic Indemnified Parties may not take deliberate and willful
                  action
                  that impairs DSS’s defense of the Infringement Claims. DSS will have no
                  obligation to indemnify Ergonomic or Ergonomic personnel for claims
                  that
                  DSS’s Technology, Improvements, Technology Marks, and/or Confidential
                  Information, infringe the intellectual property rights of a third
                  party to
                  the extent such claims arise solely as a result of Ergonomic’s
                  implementation of DSS’s Technology with software and/or hardware not
                  furnished or authorized by DSS, and provided such infringement
                  or claim
                  would have been avoided by using some other reasonable
                  implementation.

              

      

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      
        	
                9.2

              	
                In
                  addition to the rights and obligations of the Parties set forth
                  in Section
                  9.1, if an Infringement Claim is made or threatened, DSS, at its
                  own
                  expense and in its sole discretion, may exercise any of the following
                  remedies: (i) obtain for Ergonomic the right to continue to use
                  the
                  Technology, Improvements, Technology Marks, and/or Confidential
                  Information, as the case may be, consistent with this Agreement;
                  (ii)
                  modify the Technology, Improvements, Technology Marks, and/or Confidential
                  Information, as the case may be, so it is non-infringing, provided
                  the
                  modifications do not interfere with Ergonomic’s sales, orders and customer
                  relationships, or (iii) refund all License Fees paid hereunder
                  by
                  Ergonomic for the prior twelve (12) month period. The foregoing
                  represents
                  DSS’s entire obligation, and Ergonomic’s entire remedy, with respect to
                  Infringement Claims. 

              

      

       

      
        	
                9.3

              	
                Infringement
                  Lawsuits.
                  In the event that a Party learns of the infringement of one or
                  more
                  Licensed Patents of the other Party utilized in the Licensed Field
                  that
                  are actually in substantial use by customers of such Party, the
                  Party may
                  request that the other Party take legal action against the infringement
                  of
                  the Licensed Patents of said other Party. Such request shall be
                  made in
                  writing and shall include reasonable evidence of such infringement
                  and
                  damages to such Party. If the infringing activity has not been
                  abated
                  within one hundred and twenty (120) days following the effective
                  date of
                  such request and the other Party shall not have filed suit against
                  the
                  infringing party, then the requesting Party shall have the right
                  to
                  commence suit on its own account. In such case, (1) the requesting
                  Party
                  shall prosecute the suit at its own expense and shall be the sole
                  beneficiary of any recovery, and (2) the other Party will reasonably
                  cooperate and advance such suit (including becoming a named party
                  to the
                  suit if necessary), but at the requesting Party’s
                  expense.

              

      

       

      
        	
                9.4

              	
                Patent
                  Prosecution.
                  Each Party will diligently prosecute patent applications on its
                  inventions
                  in the Licensed Field and maintain its respective Licensed Patents
                  using
                  counsel of its choice. The Parties shall share equally in the prosecution
                  and maintenance costs with respect to patents that apply to the
                  Licensed
                  Field. The Parties will also diligently prosecute patent applications
                  on
                  any joint inventions in the Licensed Field that both Parties determine
                  is
                  appropriate for patent protection. 

              

      

       

      
        	10.	
                Mutual
                  Indemnifications 

              

      

      

      
        	
                10.1

              	
                Each
                  Party shall
                  indemnify, defend and hold the other Party and its directors, officers,
                  employees, agents and independent contractors (“Indemnified Parties”)
                  harmless from and against, any and all suits, actions and proceedings,
                  claims, liabilities, losses, damages, expenses (including attorneys’ fees)
                  and costs (individually
                  and collectively, “Claims”),
                  made against an Indemnified Party by a third party to the extent
                  arising
                  from
                  the
                  Party’s
                  (or its officers’, directors’, employees’, agents’ and independent
                  contractors’)
                  use of the Technology, On Demand Services Know-how or Licensed
                  Patents as
                  the case may be in an improper manner unauthorized by the other
                  Party. The
                  indemnities
                  in
                  this Section 10 are
                  contingent upon: (a) the Indemnified Parties promptly notifying
                  the Party
                  in writing of any claim which may give rise to a Claim
                  for indemnification hereunder;
                  (b) the Party being allowed to control the defense and settlement
                  of such
                  Claims; provided, however, that any settlement be made with the
                  consent
                  of
                  the Indemnified Parties or includes, as
                  an
                  unconditional part
                  thereof, a full
                  release of the Indemnified Parties; and (c) the Indemnified Parties
                  cooperating
                  with all reasonable requests of the Party (at the Party’s expense) in
                  defending or settling a Claim. Indemnified Parties reserve the
                  right to
                  retain their
                  own counsel, in addition to the Party’s counsel, at their sole expense to
                  participate in the defense of any Claim
                  provided
                  that Indemnified Parties may not take deliberate and willful action
                  that
                  impairs the Party’s defense of the
                  Claim.

              

      

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      
        	11.	
                Limited
                  Warranties; Limitation of
                  Liability

              

      

       

      
        	
                11.1

              	
                Each
                  Party represents and warrants to the other that it has the right,
                  power
                  and authority to enter into this Agreement and that the signatory
                  on
                  behalf of such Party to this Agreement has full authority to enter
                  into
                  and bind the Party to the obligations set forth in this
                  Agreement.

              

      

       

      
        	
                11.2

              	
                Each
                  Party represents and warrants to the other that it has no knowledge
                  of
                  patents or other proprietary rights of another, or a claim by another
                  that
                  it has patents or other proprietary rights, that are infringed
                  respectively by the Technology or On Demand Services Know-how licensed
                  hereunder.

              

      

       

      
        	
                11.3

              	
                DSS
                  represents and warrants to Ergonomic that as of the Effective Date
                  and
                  throughout the Term that: (a) Improvements (except as otherwise
                  provided
                  herein), Technology Marks, and DSS’s Confidential Information are the sole
                  and exclusive property of DSS; (b) that DSS has all right, title
                  and
                  interest in the Technology, Improvements, Technology Marks, and
                  DSS
                  Confidential Information to grant to Ergonomic the rights provided
                  in this
                  Agreement; (c) that nothing contained in this Agreement conflicts
                  with any
                  other obligation or agreement of DSS; and (d) that no liens, claims
                  or
                  other obligations exist that will affect DSS’s use or rights to any
                  Technology, Improvements, Technology Marks, and/or Confidential
                  Information granted under this Agreement.
                  DSS does not warrant that the Technology will meet Ergonomic’s
                  requirements or that the use of the Technology will be uninterrupted
                  or
                  error-free.

              

      

       

       

      
        	
                11.4

              	
                LIMITATION
                  OF LIABILITY.
                  NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT,
                  CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES WHATSOEVER,
                  INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS,
                  BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION, AND THE LIKE,
                  ARISING
                  OUT OF THE USE OF OR INABILITY TO USE THE TECHNOLOGY, ON DEMAND
                  SERVICES
                  KNOW-HOW OR ANY PRODUCTS OR SERVICES PROVIDED HEREUNDER, REGARDLESS
                  OF THE
                  FORM OF ACTION, WHETHER IN CONTRACT, TORT, STRICT LIABILITY OR
                  OTHERWISE,
                  EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
                  SUCH
                  DAMAGES. BECAUSE SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION
                  OF
                  LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES, THE ABOVE LIMITATION
                  MAY NOT APPLY.

              

      

       

      
        	12.	
                Marketing
                  and Advertising Obligations; Technology
                  Marks.

              

      

       

      
        	
                12.1

              	
                Marketing
                  and Advertising Requirements.
                  Both Parties shall actively advertise and promote the Technology
                  during
                  the Term, which promotional efforts shall include, without limitation,
                  attending and presenting at industry trade shows, preparing customer
                  mailings and presentations, brochures or other promotional material
                  and
                  references to the Technology on their respective websites. Subject
                  to
                  paragraph 2.3, each Party shall use reasonable commercial efforts
                  during
                  the Term to license or sublicense the Technology, the DSS
                  Licensed Patents, On Demand Services Know-how and/or Ergonomic
                  Licensed
                  Patents
                  in
                  order to generate royalties pursuant to paragraph 6. During the
                  Term, the
                  parties shall confer on a semi-annual basis to review and plan
                  their
                  promotional activities. Each party shall have the right to pre-approve
                  all
                  promotional materials of the other Party, but pre-approval shall
                  not be
                  withheld unreasonably.
                  The Parties shall cooperate and assist each other on all reasonable
                  requests with respect to the aforementioned marketing and advertising
                  efforts. The failure to adhere to one or more provisions of this
                  paragraph
                  12.1 shall be a material breach of this Agreement.
                  

              

      

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      
        	
                12.2

              	
                License
                  for Technology Marks.
                  DSS hereby grants to Ergonomic a non-exclusive, royalty-free
                  license
                  to
                  use the Technology Marks on Licensed Products, advertising and
                  promotional
                  material, and elsewhere, as contemplated herein. Ergonomic shall,
                  upon reasonable notice from DSS, fully and promptly correct and
                  remedy any
                  deficiencies in its use of the Technology Marks.
                  

              

      

      

      
        	
                12.3

              	
                Ownership
                  of Technology Marks.
                  Ergonomic acknowledges DSS’s claim of sole ownership of the Technology
                  Marks and all associated goodwill. Nothing in this Agreement or
                  in the
                  performance thereof, or that might otherwise be implied by law,
                  shall
                  operate to grant Ergonomic any right, title, or interest in or
                  to the
                  Technology Marks, other than as specified in the limited license
                  grant
                  herein. Ergonomic’s use of the Technology Marks shall inure solely to the
                  benefit of DSS. DSS shall have the sole right to, and in its sole
                  discretion may, commence, prosecute or defend, and control any
                  action
                  concerning the Technology Marks. Ergonomic shall not contest the
                  validity
                  of, by act or omission jeopardize, or take any action inconsistent
                  with,
                  DSS’s rights or goodwill in the Technology Marks, including attempted
                  registration of the Technology Marks, or use or attempt registration
                  of
                  any mark confusingly similar thereto. Ergonomic shall maintain
                  and not
                  alter or remove, without DSS’s consent, any copyright, trademark, patent
                  and other proprietary or protective notices contained in any
                  Technology.

              

      

      

      
        	13.	
                Termination

              

      

       

      
        	
                13.1

              	
                Term.
                  This Agreement will begin as of the effective date in the opening
                  paragraph and will continue for a period of two
                  (2)
                  years (the “Initial Term”), unless earlier terminated in accordance with
                  Section 13.2 below.
                  Upon expiration of the Initial Term, this Agreement shall automatically
                  renew for additional two-year terms (each a “Renewal Term”), unless
                  Ergonomic provides DSS with thirty (30) days written notice prior
                  to the
                  expiration of the Initial Term or any Renewal Term, of its intent
                  NOT to
                  renew the Agreement.
                  The Initial Term and any Renewal Term(s) shall each be referred
                  to as the
                  “Term.” 

              

      

      

      
        	
                13.2

              	
                Termination.
                  Following written notice of a material breach by the other Party,
                  if the
                  breach has not been cured within a reasonable period, or immediately
                  upon
                  written notice to the other Party (i)
                  if the other Party declares or a petition is filed in any court
                  for
                  insolvency or bankruptcy and such petition is not dismissed in
                  sixty (60) days;
                  or
                  (ii) if the other Party is under reorganization under the United
                  States
                  bankruptcy act or
                  any similar statute; or (iii) if the other Party consents to the
                  appointment of a trustee in bankruptcy or a receiver or similar
                  entity,
                  a
                  Party may elect either (a) to cancel this Agreement, or (b) to
                  have the
                  Agreement continue in force but with its royalty obligation reduced
                  to 25%
                  of the Gross Margin on sales of Licensed Products while the royalty
                  obligation of the other Party remains at 50% for the duration of
                  the
                  breach and/or insolvency as the case may be. 

              

      

      

      
        	
                13.3

              	
                In
                  the event of a “change of control” of DSS, other than a “change of
                  control” in which Ergonomic and /or an Affiliate or Affiliates of
                  Ergonomic is the entity or entities triggering such “change of control”,
                  Ergonomic shall have the right, to terminate the licenses of paragraph
                  2.2. Notwithstanding a “change of control” of Ergonomic, the licenses
                  granted in paragraph 2.2 with respect to On
                  Demand Services Know-how and Ergonomic Licensed Patents in the
                  Licensed
                  Field
                  shall continue at DSS’s option, as long as royalty payments continue to be
                  made by DSS as provided in this Agreement. For purposes hereof,
                  the term
                  “change of control” shall mean the ownership of more than 50% of the
                  outstanding stock or voting control of a Party by an entity that
                  is not an
                  Affiliate of such Party as of the Effective
                  Date.

              

      

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      
        	
                13.4

              	
                Effect
                  of Termination. Expect
                  as otherwise provided herein, upon
                  the expiration or
                  termination of this Agreement for
                  any reason,
                  (a)
                  all licenses granted hereunder shall cease; (b)
                  each Party shall return to the other and make no further use of
                  the
                  any
                  of the other Party’s Confidential Information
                  in
                  its possession
                  and all Copies
                  thereof;
                  (c)
                  the Parties shall immediately discontinue any and all promotional
                  activities hereunder and Ergonomic shall cease all use of Technology
                  Marks
                  and promotional materials and return, at no charge, all sales,
                  promotional
                  and display or advertising materials, which were furnished by DSS;
                  and
                  (d)
                  all amounts due to
                  a
                  Party by the other Party
                  through the termination date under the terms of this Agreement
                  shall
                  become immediately due and payable. Upon
                  termination of this Agreement, each Party shall be permitted a
                  reasonable
                  opportunity, not to exceed ninety (90) days, to sell their remaining
                  inventory of finished Licensed Products. The
                  provisions of Sections 2.4,
                  4.1 and 8, 9, 10, 11,
                  12.3, 13, 14 and 15
                  shall survive the termination or expiration of this Agreement. Notwithstanding
                  the foregoing and anything to the contrary in this Agreement, if
                  Ergonomic
                  shall terminate this Agreement pursuant to paragraph 13.1, the
                  licenses
                  provided in paragraph 2.2 shall continue, with the royalty obligation
                  to
                  Ergonomic being reduced from 50% to 15%, until DSS
                  provides Ergonomic with thirty (30) days written notice of its
                  intent NOT
                  to continue with its rights under paragraph
                  2.2.

              

      

       

      
        	14.	
                Notices

              

      

      

      
        	
                14.1

              	
                All
                  notices sent under this Agreement shall be in writing and (i) hand
                  delivered; (ii) transmitted by legible facsimile with a copy sent
                  concurrently by certified mail, return receipt requested; or (iii)
                  delivered by prepaid overnight courier. Notice shall be effective
                  (i) upon
                  receipt if delivered by hand; (ii) one (1) business day after deposit
                  with
                  an overnight courier service; or (iii) three (3) business days
                  after
                  deposit with the United States Postal Service if faxed and then
                  a copy is
                  sent via certified mail. Notices shall be sent to the Parties
                  at
                  the following addresses or such other addresses as the Parties
                  subsequently may provide in accordance with this Section 14.1:

              

      

      

      

      
        	
                If
                  to DSS:

                Document
                  Security Systems, Inc.

                25
                  East Main Street

                Suite
                  1525

                Rochester,
                  NY 14614

                Fax:
                  585-325-2977 

                Attention:
                  Chief Executive Officer 

              	
                With
                  a copy to:

                Document
                  Security Systems, Inc.

                25
                  East Main Street

                Suite
                  1525

                Rochester,
                  NY 14614

                Fax:
                  585-325-2977 

                Attention:
                  General Counsel 

              
	
                If
                  to Ergonomic:

                The
                  Ergonomic Group

                609-3
                  Cantiague Rock Road, 

                Westbury,
                  New York 11590

                Fax:
                  (516) 746-7809

                Attention:
                  Chief Operating Officer

              	
                With
                  a copy to:

                Gottlieb
                  Rackman & Reisman

                New
                  York City, NY 10016

                Fax:
                  (212) 684-3999

                Attn:
                  Michael
                  I. Rackman, Esq.

              

      

      

      
        	15.	
                Miscellaneous
                  

              

      

       

      
        	
                15.1

              	
                Assignment. 
                  Neither Party may assign this Agreement or the rights and obligations
                  hereunder to any third party
                  without the prior express written approval of the other
                  Party. Any
                  purported assignment without consent shall be void. The provisions
                  of this
                  Agreement shall be binding upon, and shall inure to, the benefit
                  of the
                  Parties hereto, their legal representatives, permitted
                  successors
                  and permitted assigns. 

              

      

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      
        	
                15.2

              	
                Governing
                  Law; Jurisdiction.
                  This Agreement shall be governed in accordance with the laws of
                  the State
                  of New York, without regard to conflict of laws principles. All
                  disputes
                  under this Agreement shall be resolved in an appropriate state
                  or federal
                  court located in Rochester, New York.
                  Each
                  Party consents to the jurisdiction of and venue in such courts,
                  agrees to
                  accept service of process in the same manner as notices are to
                  be made as
                  provided in paragraph 14.1 and hereby waives any jurisdictional,
                  lack of
                  venue, or forum defenses otherwise available to it.  

              

      

       

      
        	
                15.3

              	
                Force
                  Majeure.
                  No
                  Party shall be in default or otherwise liable for any delay in
                  or failure
                  of its performance under this Agreement, other than of obligations
                  regarding payments or confidentiality, if such delay or failure
                  is caused
                  by something beyond its reasonable control and without its fault
                  or
                  negligence, including,
                  but not limited to,
                  any act of God, strikes, lockouts, riots, any acts of the common
                  enemy,
                  the elements, earthquakes, floods, fires, epidemics, governmental
                  laws and
                  regulations,
                  inability to secure products or services from other persons, entities
                  or
                  transportation facilities, failures or delay in transportation
                  or
                  communications or power failures. Such delay or failure shall not
                  constitute a breach of this Agreement and shall automatically extend
                  any
                  completion dates for a period equal to the duration of such events.
                  Lack
                  of funds shall not constitute a reason beyond the Party’s reasonable
                  control. 

              

      

      

      
        	
                15.4

              	
                Remedies
                  Cumulative; Waivers.
                  The rights and remedies provided in this Agreement and all other
                  rights
                  and remedies available to either Party
                  at
                  law or in equity are, to the extent permitted by law, cumulative
                  and not
                  exclusive of any other right or remedy now or hereafter available
                  at law
                  or in equity. A Party’s failure to assert any right or remedy shall not
                  constitute a waiver of that right or remedy. No
                  waiver by either Party of any default shall be deemed as a waiver
                  of prior
                  or subsequent default of the same or other provisions of this Agreement.
                  

              

      

      

      
        	
                15.5

              	
                Construction;
                  Severability.
                  The
                  Parties acknowledge that they have reviewed this Agreement and
                  bargained
                  over its terms. Accordingly, this Agreement shall be construed
                  without
                  regard to the Party or Parties responsible for its preparation,
                  and shall
                  be deemed to have been prepared jointly by the Parties.
                  Headings contained in this Agreement are not intended to be full
                  and
                  accurate descriptions of the contents of this Agreement and shall
                  not
                  affect the meaning or interpretation of this Agreement. If any
                  term,
                  clause, or provision hereof is held invalid or unenforceable by
                  a court of
                  competent jurisdiction, such invalidity shall not affect the validity
                  or
                  operation of any other term, clause, or provision and such invalid
                  term,
                  clause, or provision shall be deemed to be severed from the Agreement.
                  This Agreement may be executed in counterparts, each of which shall
                  be
                  deemed to be original but all of which together shall constitute
                  a single
                  instrument. The
                  signatures required for execution may be transmitted to the other
                  Party
                  via facsimile and such signatures shall be deemed a duplicate original.
                  

              

      

      

      
        	
                15.6

              	
                Relationship
                  of Parties.
                  Nothing in this Agreement shall be construed as creating a partnership,
                  joint venture or agency relationship between the Parties,
                  or as authorizing either Party to act as agent for the other.
                  

              

      

      

      
        	
                15.7

              	
                Entire
                  Agreement; Termination of Prior Agreements.
                  This Agreement and Exhibits
                  A and
                  B hereto constitute
                  the entire agreement between the Parties
                  and supersede
                  any and
                  all prior agreements between the Parties
                  concerning the subject matter of this Agreement, including without
                  limitation, that certain Premier Partner Marketing and Distribution
                  Agreement, dated as of December 29, 2006, between the Parties and
                  that
                  certain Limited Exclusive Patent Licensing Agreement, dated as
                  of December
                  29, 2006, between the Parties. No
                  modifications or amendments may be made to this Agreement except
                  as
                  expressed in writing and signed by each Party.
                  

              

      

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      
        	
                15.8

              	
                Publicity.
                  Except as allowed in Section 12, neither Party may refer to the
                  other by
                  name in advertising, promotional materials and publications in
                  connection
                  with this Agreement except upon receiving the prior written consent
                  of the
                  other Party, which consent shall not be unreasonably withheld.
                  

              

      

      

      
        	
                15.9

              	
                Export
                  Control; Government Customers.
                  Anything contained in this Agreement notwithstanding, the obligations
                  of
                  the Parties hereto shall be subject to all laws, present and future,
                  including export control laws and regulations, of any government
                  having
                  jurisdiction over the Parties
                  hereto and to orders, regulations, directions or requests of any
                  such
                  government. Each Party
                  shall undertake to comply with and will be solely responsible for
                  complying with such laws applicable to such party.
                  

              

      

      

      
        	
                15.10

              	
                Irreparable
                  Damage:
                  The
                  Parties acknowledge and agree that any violation of this Agreement
                  would
                  subject the other to irreparable injury for which monetary damages
                  will
                  not be an adequate remedy. Therefore,
                  in addition to any remedies otherwise available, the non-breaching
                  Party
                  will be entitled to any injunctive relief and specific performance
                  to
                  enforce the terms of this Agreement. The
                  breaching Party shall pay all reasonable attorney's fees and costs
                  incurred by the non-breaching Party should it be necessary for
                  the
                  non-breaching Party to enforce the terms of this
                  Agreement.

              

      

      

      [Remainder
        of Page Left Blank]

      

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the Parties
        have
        caused this Agreement to be executed by their respective duly authorized
        officers as of the date first written above.

      

      
        	
                 

                DOCUMENT
                  SECURITY SYSTEMS, INC.

                 

                 

                By:
                  /s/ Patrick
                  White                        
                  

                Name:
                  Patrick White

                Title:
                   Chief
                  Executive Officer

              	
                 

                ERGONOMIC
                  GROUP, INC.

                 

                 

                By:
                  /s/ Karen
                  Girards                                   
                  

                Name:
                  Karen Girards

                Title:
                   Chief
                  Executive Officer

              
	 	 

      

      

      

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A

       

      Document
        Security Systems, Inc.

      

        
          	
                  Patent
                    Report by Invention

                	 	 	 	 	
                  Printed:  
                    

                	
                  03/25/2008

                	
                  Page
                    1

                
	
                  COUNTRY

                	
                  REFERENCE#

                	
                  TYP

                	
                  FILED

                	
                  SERIAL#

                	
                  ISSUED

                	
                  PATENT

                	
                  STATUS

                
	 
	
                  ANTI-PHOTOGRAPHIC/PHOTOCOPY
                    IMAGING PROCESS AND PRODUCT MADE BY SAME

                
	
                  United
                    States

                	
                  91838.000032

                	
                  CON

                	
                  01/03/1997

                	
                  08/778,916

                	
                  04/07/1998

                	
                  5,735,547

                	
                  ISSUED

                
	 
	
                  COUNTERFEIT
                    PROTECTED DOCUMENT

                
	
                  United
                    States

                	
                  91838.000020

                	
                  NEW

                	
                  01/18/1989

                	
                  07/298,020

                	
                  05/28/1991

                	
                  5,018,767

                	
                  ISSUED

                
	 
	
                  COVERT
                    DOCUMENT SYSTEM

                
	
                  United
                    States

                	
                  91838.000050

                	
                  FCA

                	
                  07/31/2006

                	
                  11/495,900

                	 	 	
                  PUBLISHED

                
	
                  United
                    States

                	
                  91838.000125

                	
                  CIP

                	
                  04/26/2007

                	
                  11/740,696

                	 	 	
                  PUBLISHED

                
	
                  WIPO

                	
                  91838.000141

                	
                  CEQ

                	
                  04/26/2007

                	
                  PCT/US07/67537

                	 	 	
                  PUBLISHED

                
	
                  United
                    States

                	
                  91838.000122

                	
                  CIP

                	
                  04/27/2007

                	
                  11/741,394

                	 	 	
                  PUBLISHED

                
	
                  WIPO

                	
                  91838.000143

                	
                  CEQ

                	
                  04/27/2007

                	
                  PCT/US07/67657

                	 	 	
                  PUBLISHED

                
	 
	
                  COVERT
                    DOCUMENT SYSTEM

                
	
                  AUSTRALIA

                	
                  91838.000170

                	
                  DCA

                	
                  08/01/2006

                	
                  PCT/US06/029868

                	 	 	
                  PENDING

                
	
                  BRAZIL

                	
                  91838.000171

                	
                  DCA

                	
                  08/01/2006

                	
                  018080005626

                	 	 	
                  PENDING

                
	
                  CANADA

                	
                  91838.000172

                	
                  DCA

                	
                  08/01/2006

                	
                  PCT/US06/029868

                	 	 	
                  PENDING

                
	
                  EUROPE

                	
                  91838.000178

                	
                  DCA

                	
                  08/01/2006

                	
                  06800589.1

                	 	 	
                  PENDING

                
	
                  INDONESIA

                	
                  91838.000173

                	
                  DCA

                	
                  08/01/2006

                	
                  W00
                    2008 00402

                	 	 	
                  PENDING

                
	
                  ISRAEL

                	
                  91838.000174

                	
                  DCA

                	
                  08/01/2006

                	
                  189116

                	 	 	
                  PENDING

                
	
                  JAPAN

                	
                  91838.000175

                	
                  DCA

                	
                  08/01/2006

                	
                  PCT/US06/029868

                	 	 	
                  PENDING

                
	
                  MEXICO

                	
                  91838.000176

                	
                  DCA

                	
                  08/01/2006

                	
                  MX/a/2008/001531

                	 	 	
                  PENDING

                
	
                  WIPO

                	
                  91838.000051

                	
                  CEQ

                	
                  08/01/2006

                	
                  PCT/US06/029868

                	 	 	
                  NAT
                    PHASE

                
	
                  SOUTH
                    AFRICA

                	
                  91838.000177

                	
                  DCA

                	
                  08/01/2006

                	
                  PCT/US06/029868

                	 	 	
                  PENDING

                
	 
	
                  DOCUMENT
                    CONTAINING SCANNING SURVIVABLE SECURITY
                    FEATURES

                
	
                  AUSTRALIA

                	
                  91838.000093

                	
                  DCA

                	
                  09/06/2005

                	
                  2005282617

                	 	 	
                  PENDING

                
	
                  BRAZIL

                	
                  91838.000094

                	
                  DCA

                	
                  09/06/2005

                	
                  PI
                    0515634-3

                	 	 	
                  PENDING

                
	
                  CANADA

                	
                  91838.000090

                	
                  DCA

                	
                  09/06/2005

                	
                  2,579,226

                	 	 	
                  PENDING

                
	
                  EUROPE

                	
                  91838.000089

                	
                  DCA

                	
                  09/06/2005

                	
                  05793879.7

                	 	 	
                  PUBLISHED

                
	
                  INDONESIA

                	
                  91838.000092

                	
                  DCA

                	
                  09/06/2005

                	
                  W00
                    2007 00765

                	 	 	
                  PENDING

                
	
                  JAPAN

                	
                  91838.000091

                	
                  DCA

                	
                  09/06/2005

                	
                  2007-530423

                	 	 	
                  PENDING

                
	
                  MEXICO

                	
                  91838.000095

                	
                  DCA

                	
                  09/06/2005

                	
                  MX/a/2007/002623

                	 	 	
                  PENDING

                
	
                  WIPO

                	
                  91838.000045

                	
                  FCA

                	
                  09/06/2005

                	
                  PCT/US05/31440

                	 	 	
                  NAT
                    PHASE

                
	
                  SOUTH
                    AFRICA

                	
                  91838.000096

                	
                  DCA

                	
                  09/06/2005

                	
                  2007/02765

                	 	 	
                  PENDING

                
	
                  United
                    States

                	
                  91838.000088

                	
                  DCA

                	
                  03/07/2007

                	
                  11/683,161

                	 	 	
                  PUBLISHED

                
	 
	
                  DOCUMENT
                    CONTAINING SCANNING SURVIVABLE SECURITY
                    FEATURES

                
	
                  United
                    States

                	
                  91838.000124

                	
                  FCA

                	
                  03/15/2007

                	
                  11/686,806

                	 	 	
                  PENDING

                
	
                  United
                    States

                	
                  91838.000126

                	
                  FCA

                	
                  04/27/2007

                	
                  11/741,513

                	 	 	
                  PUBLISHED

                
	
                  WIPO

                	
                  91838.000142

                	
                  CEQ

                	
                  04/27/2007

                	
                  PCT/US07/67680

                	 	 	
                  PUBLISHED

                

        

      

       

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      

        
          	
                  COUNTRY

                	
                  REFERENCE#

                	
                  TYP

                	
                  FILED

                	
                  SERIAL#

                	
                  ISSUED

                	
                  PATENT

                	
                  STATUS

                
	 
	
                  DOCUMENT
                    CONTAINING SECURITY IMAGES

                
	
                  AUSTRIA

                	
                  91838.000127

                	
                  DCA

                	
                  05/10/2004

                	
                  04751747.9

                	
                  03/21/2007

                	
                  1626870

                	
                  ISSUED

                
	
                  BELGIUM

                	
                  91838.000128

                	
                  DCA

                	
                  05/10/2004

                	
                  04751747.9

                	
                  03/21/2007

                	
                  1626870

                	
                  ISSUED

                
	
                  CANADA

                	
                  91838.000070

                	
                  DCA

                	
                  05/10/2004

                	
                  2,526,404

                	
                  PENDING

                	 	 
	
                  SWITZERLAND

                	
                  91838.000137

                	
                  DCA

                	
                  05/10/2004

                	
                  04751747.9

                	
                  03/21/2007

                	
                  1626870

                	
                  ISSUED

                
	
                  CZECH
                    REPUBLIC

                	
                  91838.000129

                	
                  DCA

                	
                  05/10/2004

                	
                  04751747.9

                	
                  03/21/2007

                	
                  1626870

                	
                  ISSUED

                
	
                  GERMANY

                	
                  91838.000130

                	
                  DCA

                	
                  05/10/2004

                	
                  04751747.9

                	
                  03/21/2007

                	
                  60
                    2004 005 448.8

                	
                  ISSUED

                
	
                  EUROPE

                	
                  91838.000047

                	
                  DCA

                	
                  05/10/2004

                	
                  04751747.9

                	
                  03/21/2007

                	
                  1626870

                	
                  NAT
                    PHASE

                
	
                  SPAIN

                	
                  91838.000136

                	
                  DCA

                	
                  05/10/2004

                	
                  04751747.9

                	
                  03/21/2007

                	
                  1626870

                	
                  ISSUED

                
	
                  FRANCE

                	
                  91838.000140

                	
                  DCA

                	
                  05/10/2004

                	
                  04751747.9

                	
                  03/21/2007

                	
                  1626870

                	
                  ISSUED

                
	
                  UNITED
                    KINGDOM

                	
                  91838.000139

                	
                  DCA

                	
                  05/10/2004

                	
                  04751747.9

                	
                  03/21/2007

                	
                  1626870

                	
                  ISSUED

                
	
                  HUNGARY

                	
                  91838.000131

                	
                  DCA

                	
                  05/10/2004

                	
                  04751747.9

                	
                  03/21/2007

                	
                  1626870

                	
                  ISSUED

                
	
                  IRELAND

                	
                  91838.000144

                	
                  DCA

                	
                  05/10/2004

                	
                  04751747.9

                	
                  03/21/2007

                	
                  1626870

                	
                  ISSUED

                
	
                  ITALY

                	
                  91838.000132

                	
                  DCA

                	
                  05/10/2004

                	
                  04751747.9

                	
                  03/21/2007

                	
                  1626870

                	
                  ISSUED

                
	
                  NETHERLANDS

                	
                  91838.000133

                	
                  DCA

                	
                  05/10/2004

                	
                  04751747.9

                	
                  03/21/2007

                	
                  1626870

                	
                  ISSUED

                
	
                  POLAND

                	
                  91838.000134

                	
                  DCA

                	
                  05/10/2004

                	
                  04751747.9

                	
                  03/21/2007

                	
                  1626870

                	
                  ISSUED

                
	
                  ROMANIA

                	
                  91838.000135

                	
                  DCA

                	
                  05/10/2004

                	
                  04751747.9

                	
                  03/21/2007

                	
                  1626870

                	
                  ISSUED

                
	
                  TURKEY

                	
                  91838.000138

                	
                  DCA

                	
                  05/10/2004

                	
                  04751747.9

                	
                  03/21/2007

                	
                  1626870

                	
                  ISSUED

                
	
                  WIPO

                	
                  91838.000059

                	
                  FCA

                	
                  05/10/2004

                	
                  PCT/US04/14517

                	 	 	
                  NAT
                    PHASE

                
	
                  United
                    States

                	
                  91838.000046

                	
                  DCA

                	
                  12/15/2006

                	
                  10/555,936

                	 	 	
                  PUBLISHED

                
	 
	
                  DOCUMENT
                    CONTAINING SECURITY IMAGES

                
	
                  United
                    States

                	
                  91838.000069

                	
                  CIP

                	
                  07/22/2004

                	
                  10/896,072

                	 	 	
                  PUBLISHED

                
	 
	
                  DOCUMENT
                    CONTAINING SECURITY IMAGES

                
	
                  CANADA

                	
                  91838.000073

                	
                  DCA

                	
                  10/09/2003

                	
                  2,501,513

                	 	 	
                  PENDING

                
	
                  EUROPE

                	
                  91838.000071

                	
                  DCA

                	
                  10/09/2003

                	
                  03773245.0

                	 	 	
                  PUBLISHED

                
	
                  WIPO

                	
                  91838.000074

                	
                  FCA

                	
                  10/09/2003

                	
                  PCT/US03/32159

                	 	 	
                  NAT
                    PHASE

                
	
                  SOUTH
                    AFRICA

                	
                  91838.000072

                	
                  DCA

                	
                  10/09/2003

                	
                  2005/05348

                	
                  10/25/2006

                	
                  2005/05348

                	
                  ISSUED

                
	
                  United
                    States

                	
                  91838.000043

                	
                  CIP

                	
                  07/22/2004

                	
                  10/895,822

                	 	 	
                  PUBLISHED

                
	
                  CANADA

                	
                  91838.000159

                	
                  DIV

                	
                  08/13/2007

                	
                  2,597,184

                	 	 	
                  PENDING

                
	
                  United
                    States

                	
                  91838.000149

                	
                  CIP

                	
                  08/16/2007

                	
                  11/839,657

                	 	 	
                  PUBLISHED

                

        

      

       

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      

        
          	
                  COUNTRY

                	
                  REFERENCE#

                	
                  TYP

                	
                  FILED

                	
                  SERIAL#

                	
                  ISSUED

                	
                  PATENT

                	
                  STATUS

                
	 
	
                  EMBEDDED
                    WATERMARK

                
	
                  United
                    States

                	
                  91838.000049

                	
                  NEW

                	
                  07/28/2005

                	
                  11/193,230

                	 	 	
                  PUBLISHED

                
	
                  AUSTRALIA

                	
                  91838.000161

                	
                  DCA

                	
                  07/26/2006

                	
                  PCT/US06/028983

                	 	 	
                  PENDING

                
	
                  BRAZIL

                	
                  91838.000162

                	
                  DCA

                	
                  07/26/2006

                	
                  018080004679

                	 	 	
                  PENDING

                
	
                  CANADA

                	
                  91838.000163

                	
                  DCA

                	
                  07/26/2006

                	
                  PCT/US06/028983

                	 	 	
                  PENDING

                
	
                  EUROPE

                	
                  91838.000169

                	
                  DCA

                	
                  07/26/2006

                	
                  06800349.0

                	 	 	
                  PENDING

                
	
                  INDONESIA

                	
                  91838.000164

                	
                  DCA

                	
                  07/26/2006

                	
                  W00
                    2008 00310

                	 	 	
                  PENDING

                
	
                  ISRAEL

                	
                  91838.000165

                	
                  DCA

                	
                  07/26/2006

                	
                  189049

                	 	 	
                  PENDING

                
	
                  JAPAN

                	
                  91838.000166

                	
                  DCA

                	
                  07/26/2006

                	
                  PCT/US06/028983

                	 	 	
                  PENDING

                
	
                  MEXICO

                	
                  91838.000167

                	
                  DCA

                	
                  07/26/2006

                	
                  MX/a/2008/001349

                	 	 	
                  PENDING

                
	
                  WIPO

                	
                  91838.000052

                	
                  CEQ

                	
                  07/26/2006

                	
                  PCT/US06/028983

                	 	 	
                  NAT
                    PHASE

                
	
                  SOUTH
                    AFRICA

                	
                  91838.000168

                	
                  DCA

                	
                  07/26/2006

                	
                  2008/01692

                	 	 	
                  PENDING

                
	 
	
                  EMBOSSED
                    DOCUMENT PROTECTION METHODS AND PRODUCTS

                
	
                  United
                    States

                	
                  91838.000037

                	
                  NEW

                	
                  10/03/1996

                	
                  08/725,407

                	
                  03/03/1998

                	
                  5,722,693

                	
                  ISSUED

                
	 
	
                  FULL
                    COLOR SCANNING PROTECTION OF DOCUMENT

                
	
                  AUSTRALIA

                	
                  91838.000062

                	
                  DCA

                	
                  06/14/2004

                	
                  2004321079

                	 	 	
                  PENDING

                
	
                  BRAZIL

                	
                  91838.000064

                	
                  DCA

                	
                  06/14/2004

                	
                  PI0418853-5

                	 	 	
                  PENDING

                
	
                  CANADA

                	
                  91838.000042

                	
                  DCA

                	
                  06/14/2004

                	
                  2,570,983

                	 	 	
                  PENDING

                
	
                  EUROPE

                	
                  91838.000041

                	
                  DCA

                	
                  06/14/2004

                	
                  04754986.0

                	 	 	
                  PUBLISHED

                
	
                  INDONESIA

                	
                  91838.000061

                	
                  DCA

                	
                  06/14/2004

                	
                  W00
                    2006 03557

                	 	 	
                  PENDING

                
	
                  JAPAN

                	
                  91838.000060

                	
                  DCA

                	
                  06/14/2004

                	
                  2007-516446

                	 	 	
                  PENDING

                
	
                  MEXICO

                	
                  91838.000065

                	
                  DCA

                	
                  06/14/2004

                	
                  PA/a/2006/014645

                	 	 	
                  PENDING

                
	
                  WIPO

                	
                  91838.000039

                	
                  NEW

                	
                  06/14/2004

                	
                  PCT/US04/018580

                	 	 	
                  NAT
                    PHASE

                
	
                  SOUTH
                    AFRICA

                	
                  91838.000066

                	
                  DCA

                	
                  06/14/2004

                	
                  2007/00308

                	 	 	
                  PENDING

                
	
                  United
                    States

                	
                  91838.000040

                	
                  OTH

                	
                  12/13/2006

                	
                  11/610,290

                	 	 	
                  PUBLISHED

                
	
                  United
                    States

                	
                  91838.000063

                	
                  OTH

                	
                  12/13/2006

                	
                  11/610,323

                	 	 	
                  PUBLISHED

                
	 
	
                  METHOD
                    OF MAKING A NONREPLICABLE DOCUMENT

                
	
                  AUSTRIA

                	
                  91838.000075

                	
                  DCA

                	
                  01/16/1990

                	
                  90904485.1

                	
                  11/24/1999

                	
                  0455750

                	
                  ISSUED

                
	
                  BELGIUM

                	
                  91838.000076

                	
                  DCA

                	
                  01/16/1990

                	
                  90904485.1

                	
                  11/24/1999

                	
                  0455750

                	
                  ISSUED

                
	
                  SWITZERLAND

                	
                  91838.000084

                	
                  DCA

                	
                  01/16/1990

                	
                  90904485.1

                	
                  11/24/1999

                	
                  0455750

                	
                  ISSUED

                
	
                  GERMANY

                	
                  91838.000079

                	
                  DCA

                	
                  01/16/1990

                	
                  90904485.1

                	
                  11/24/1999

                	
                  69033362.5

                	
                  ISSUED

                
	
                  DENMARK

                	
                  91838.000077

                	
                  DCA

                	
                  01/16/1990

                	
                  90904485.1

                	
                  11/24/1999

                	
                  0455750

                	
                  ISSUED

                
	
                  EUROPE

                	
                  91838.000056

                	
                  DCA

                	
                  01/16/1990

                	
                  90904485.1

                	
                  11/24/1999

                	
                  0455750

                	
                  NAT
                    PHASE

                
	
                  SPAIN

                	
                  91838.000082

                	
                  DCA

                	
                  01/16/1990

                	
                  90904485.1

                	
                  11/24/1999

                	
                  0455750

                	
                  ISSUED

                
	
                  FRANCE

                	
                  91838.000078

                	
                  DCA

                	
                  01/16/1990

                	
                  90904485.1

                	
                  11/24/1999

                	
                  0455750

                	
                  ISSUED

                
	
                  UNITED
                    KINGDOM

                	
                  91838.000085

                	
                  DCA

                	
                  01/16/1990

                	
                  90904485.1

                	
                  11/24/1999

                	
                  0455750

                	
                  ISSUED

                
	
                  ITALY

                	
                  91838.000115

                	
                  DCA

                	
                  01/16/1990

                	
                  90904485.1

                	
                  11/24/1999

                	
                  0455750

                	
                  ISSUED

                
	
                  LIECHTENSTEIN

                	
                  91838.000086

                	
                  DCA

                	
                  01/16/1990

                	
                  90904485.1

                	
                  11/24/1999

                	
                  0455750

                	
                  ISSUED

                
	
                  LUXEMBOURG

                	
                  91838.000080

                	
                  DCA

                	
                  01/16/1990

                	
                  90904485.1

                	
                  11/24/1999

                	
                  0455750

                	
                  ISSUED

                
	
                  NETHERLANDS

                	
                  91838.000081

                	
                  DCA

                	
                  01/16/1990

                	
                  90904485.1

                	
                  11/24/1999

                	
                  0455750

                	
                  ISSUED

                
	
                  SWEDEN

                	
                  91838.000083

                	
                  DCA

                	
                  01/16/1990

                	
                  90904485.1

                	
                  11/24/1999

                	
                  0455750

                	
                  ISSUED

                

        

      

       

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      

        
          	
                  COUNTRY

                	
                  REFERENCE#

                	
                  TYP

                	
                  FILED

                	
                  SERIAL#

                	
                  ISSUED

                	
                  PATENT

                	
                  STATUS

                
	 	 	 	 	 	 	 	 
	
                  NONREPLICABLE
                    DOCUMENT AND METHOD FOR MAKING SAME

                
	
                  CANADA

                	
                  91838.000101

                	
                  DCA

                	
                  01/16/1990

                	
                  2045580

                	
                  01/12/1999

                	
                  2,045,580

                	
                  ISSUED

                
	 
	
                  SCANNING
                    PROTECTION OF A DOCUMENT

                
	
                  United
                    States

                	
                  91838.000145

                	
                  FCA

                	
                  05/05/2007

                	
                  11/744,840

                	 	 	
                  PUBLISHED

                
	
                  WIPO

                	
                  91838.000146

                	
                  CEQ

                	
                  05/05/2007

                	
                  PCT/US07/68311

                	 	 	
                  PUBLISHED

                
	 
	
                  SECURITY
                    DOCUMENTS WITH MULTI-ANGLED VOIDS

                
	
                  United
                    States

                	
                  91838.000087

                	
                  NEW

                	
                  08/22/1996

                	
                  08/700,772

                	
                  01/13/1998

                	
                  5,707,083

                	
                  ISSUED

                
	 
	
                  SELF
                    VERIFYING IDENTIFICATION

                
	
                  United
                    States

                	
                  91838.000153

                	
                  FCA

                	
                  07/06/2007

                	
                  11/774,464

                	 	 	
                  PUBLISHED

                
	
                  WIPO

                	
                  91838.000154

                	
                  CEQ

                	
                  07/07/2007

                	
                  PCT/US07/73002

                	 	 	
                  PUBLISHED

                
	 
	
                  TAMPER
                    AND COPY PROTECTED DOCUMENTS

                
	
                  United
                    States

                	
                  91838.000019

                	
                  NEW

                	
                  04/19/1993

                	
                  08/047,402

                	
                  10/03/1995

                	
                  5,454,598

                	
                  ISSUED

                

        

      

       

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      EXHIBIT
        B

       

      THE
        ERGONOMIC GROUP

      

        
          	
                  Patent
                    Report by Country

                	 	 	 	
                  Printed:    4/7/2008

                	
                  Page 1

                
	
                  TITLE

                	 	 	 	 	 
	
                  REFERENCE#

                	
                  FILED

                	
                  SERIAL#

                	
                  ISSUED

                	
                  PATENT#

                	
                  STATUS

                
	 	 	 	 	 	 
	
                  UNITED
                    STATES

                	 	 	 	 	 
	
                  IMPROVED
                    METHOD AND SYSTEM FOR PRODUCING DOCUMENTS, WEBSITES AND THE LIKE
                    HAVING
                    SECURITY 

                
	
                  FEATURES

                	 	 	 	 	 
	
                  5112/0005

                	
                  1/24/2008

                	
                  12/019,304

                	 	 	
                  PENDING

                
	 
	
                  METHOD
                    AND SYSTEM FOR PROVIDING CERTIFIED DOCUMENTS AND THE
                    LIKE

                
	
                  5112/0003
                    US

                	
                  2/23/2007

                	
                  11/678,318

                	 	 	
                  PENDING

                
	 
	
                  SECURITY
                    DOCUMENT WITH FADE-AWAY PORTION

                
	
                  5112/0004
                    US

                	
                  3/18/2008

                	
                  12/050,576

                	 	 	
                  PENDING

                
	 
	
                  SECURITY
                    FONT IMAGE FADE AWAY

                
	
                  5112/0004

                	
                  3/23/2007

                	
                  60/896,555

                	 	 	
                  EXPIRED

                
	 
	
                  SECURITY
                    FONT IMAGES FOR ELECTRONICALLY TRANSMITTED
                    DOCUMENTS

                
	
                  5112/0003

                	
                  1/31/2007

                	
                  60/887,439

                	 	 	
                  EXPIRED

                
	 	 	 	 	 	 
	
                  WIPO

                	 	 	 	 	 
	
                  IMPROVED
                    METHOD AND SYSTEM FOR PRODUCING DOCUMENTS, WEBSITES AND THE LIKE
                    HAVING
                    SECURITY 

                
	
                  FEATURES

                	 	 	 	 	 
	
                  5112/0005
                    PCT

                	
                  1/30/2008

                	
                  PCT/US08/52450

                	 	 	
                  PENDING

                
	 
	
                  SECURITY
                    DOCUMENT WITH FADE-AWAY PORTION

                
	
                  5112/0004
                    PCT

                	
                  3/19/2008

                	
                  PCT/US08/57506

                	 	 	
                  PENDING

                

        

         

        
          	
                   

                	
                   

                	
                   

                	END
                  OF REPORT	
                  TOTAL
                    ITEMS SELECTED =

                	
                  7

                

        

      

       

       

      
        
          
          

        

        
          20

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}]]