STOCK AGREEMENT



                                   dated as of



                                  July 30, 2002



                                     between



                             SoftNet Systems, Inc.,



                          Independence Holding Company



                                       and



                          Madison Investors Corporation



                        relating to the purchase and sale



                                       of



                        5,000,000 Shares of Common Stock



                                       of



                              SoftNet Systems, Inc.



                                       by



                          Madison Investors Corporation



                                      from



                         Cyber Net Technologies Limited



<PAGE>



                                 STOCK AGREEMENT



      This AGREEMENT dated as of July 30, 2002 is between SoftNet Systems, Inc.,

a Delaware corporation (the "Corporation"), Independence Holding Company, a

Delaware corporation ("IHC"), and Madison Investors Corporation, a Delaware

corporation ("Buyer"). This agreement shall become effective upon the closing of

the transactions contemplated by the third WHEREAS clause set forth below.



      WHEREAS, the Corporation, IHC and SSH Corp., a Delaware corporation

("SSH Corp."), are entering into an agreement pursuant to which the

Corporation will purchase all outstanding securities of First Standard

Holdings Corp., a Delaware corporation and an Affiliate of Buyer, from SSH

Corp., on the terms set forth in Exhibit A (the "FSSIC Agreement");



      WHEREAS, IHC is an Affiliate of Buyer that benefits from the rights

provided to Buyer hereunder;



      WHEREAS, contemporaneously with the execution of the FSSIC Agreement,

Buyer is purchasing 5,000,000 shares of the Corporation's Common Stock from

Cyber Net Technologies Limited ("Cyber Net") pursuant to an agreement dated as

of July 30, 2002 between Buyer and Cyber Net;



      WHEREAS, pursuant to a Stock Purchase Agreement (the "Old Stock Purchase

Agreement") dated as of October 12, 1999 between the Corporation and Cyber Net,

as successor to Pacific Century Cyberworks Limited, the consent of the

Corporation is required to effect such purchase of shares of Common Stock by

Buyer; and



      WHEREAS, the parties intend to restate the rights and obligations under

the Old Stock Purchase Agreement that will apply to the Corporation and Buyer in

connection with Buyer's ownership of Shares and to terminate and supersede the

Old Stock Purchase Agreement in its entirety.



      NOW, THEREFORE, in consideration of the premises and the mutual

representations, warranties, covenants and undertakings contained herein, and

for other good and valuable consideration, the receipt and sufficiency of which

are hereby acknowledged, the parties hereto agree as follows:



                                   ARTICLE 1

                                   DEFINITIONS



            SECTION 1.01. Definitions. (a) The following terms, as used herein,

have the following meanings:



                                       2

<PAGE>



      "Affiliate" means, with respect to any specified Person, any other Person

which, directly or indirectly, controls, is controlled by or is under direct or

indirect common control with, such specified Person. For the purposes of this

definition, "control" when used with respect to any person means the power to

direct the management and policies of such Person, directly or indirectly,

whether through the ownership of voting securities, by contract or otherwise,

and the terms "affiliated," "controlling," and "controlled" have meanings

correlative to the foregoing.



      "Board of Directors" means the Board of Directors of the Corporation.



      "Closing Date" means the date of the closing of the transactions

contemplated by the FSSIC Agreement.



      "Commission" means the Securities and Exchange Commission.



      "Common Stock" means the shares of common stock, par value $0.01 per

share, of the Corporation.



      "Exchange Act" means the Securities Exchange Act of 1934, as amended, and

the rules and regulations promulgated thereunder.



       "Person" means an individual, corporation, partnership, limited liability

company, association, trust or other entity or organization, including a

government or political subdivision or an agency or instrumentality thereof.



      "Securities Act" means the Securities Act of 1933, as amended, and the

rules and regulations promulgated thereunder.



      "Shares" means 5,000,000 shares of Common Stock purchased by Buyer from

Cyber Net together with any other shares of capital stock of the Corporation

purchased by Buyer or any Affiliate of Buyer.



                                   ARTICLE 2

                                LEGENDS ON SHARES



            SECTION 2.01 Certificates for Shares. (a) Each certificate for

Shares shall bear the following legend for so long as such securities constitute

restricted securities (as such term is defined in the regulations under the

Securities Act):



      "The securities represented hereby have not been registered under the

Securities Act of 1933, as amended, and may not be offered, sold, transferred or

otherwise disposed of except in compliance with such laws."



                                       3

<PAGE>



            (a) The Corporation agrees that, at the request of Buyer or any

Permitted Transferee, it will remove the legend contemplated by this Section

from the certificates representing any Shares in the event that outside counsel

for Buyer or such Permitted Transferee determines that the transfer of such

Shares is no longer restricted by the Securities Act and outside counsel for the

Corporation reasonably concurs in such determination.



            (b) The Shares shall also bear a legend stating that their transfer

or sale is restricted by the terms of this Agreement (which shall be removed

when such restrictions no longer apply).

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