Exhibit 10.7

 

IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

 

June 1, 2012

 

WorldWide Stock Transfer , LLC 433 Hackensack Avenue, Level L Hackensack, New
Jersey 07601

 

RE:    NEOMEDIA TECHNOLOGIES, INC.

 

Ladies and Gentlemen:

 

Reference is made to that certain Agreement (the “Agreement”) of even date
herewith by and between NeoMedia Technologies, Inc, a Delaware corporation (the
“Company”), and YA Global Investments, L.P. (the “Buyer”). Pursuant to the
Agreement, the Company shall sell to the Buyer, and the Buyer shall purchase
from the Company, convertible debentures (the “Debenture”) in the aggregate
principal amount of $450,000.00, plus accrued interest, which are convertible
into shares of the Company’s common stock, par value $.001 per share (the
“Common Stock”), at the Buyer’s discretion. The Company has also issued to the
Buyer warrants to purchase up to 1,000,000 shares of Common Stock, at the
Buyer’s discretion (the “Warrant”). These instructions relate to the following
stock or proposed stock issuances or transfers:

 

1.Shares of Common Stock to be issued to the Buyer upon conversion of the
Debenture (“Conversion Shares”) plus the shares of Common Stock to be issued to
the Buyer upon conversion of accrued interest into Common Stock (the “Interest
Shares”).

 

2.Up to 1,000,000 shares of Common Stock to be issued to the Buyer upon exercise
of the Warrant (the “Warrant Shares”).

 

This letter shall serve as our irrevocable authorization and direction to
WorldWide Stock Transfer, LLC (the “Transfer Agent”) to do the following:

 

 

 

 

1.Conversion Shares, Warrant Shares and Interest Shares.

 

a.Instructions Applicable to Transfer Agent. With respect to the Conversion
Shares, Warrant Shares and the Interest Shares, the Transfer Agent shall issue
the Conversion Shares, Warrant Shares and the Interest Shares to the Buyer from
time to time upon delivery to the Transfer Agent of a properly completed and
duly executed Conversion Notice (the “Conversion Notice”) in the form attached
as Exhibit A to the Debenture, or a properly completed and duly executed
Exercise Notice (the “Exercise Notice”) in the form attached as Exhibit A to the
Warrant, delivered to the Transfer Agent by the Company or on behalf of the
Company by David Gonzalez, Esq. as escrow agent (the “Escrow Agent”). Upon
receipt of a Conversion Notice or an Exercise Notice, the Transfer Agent shall,
as soon as reasonably practical thereafter, (i) issue and surrender to a common
carrier for overnight delivery to the address as specified in the Conversion
Notice or the Exercise Notice, a certificate, registered in the name of the
Buyer or its designees, for the number of shares of Common Stock to which the
Buyer shall be entitled as set forth in the Conversion Notice or Exercise
Notice, or (ii) provided the Transfer Agent is participating in The Depository
Trust Company (“DTC”) Fast Automated Securities Transfer Program, upon the
request of the Buyer, credit such aggregate number of shares of Common Stock to
which the Buyer shall be entitled to the Buyer’s or its designees’ balance
account with DTC through its Deposit Withdrawal At Custodian (“DWAC”) system,
provided that the Buyer causes its bank or broker to initiate the DWAC
transaction, and further provided that a certificate representing such shares of
Common Stock would not be required to bear a legend restricting transfer.

 

b.The Company hereby confirms to the Transfer Agent and the Buyer that
certificates representing the Conversion Shares, Warrant Shares and Interest
Shares shall not bear any legend restricting transfer and should not be subject
to any stop-transfer restrictions and shall otherwise be freely transferable on
the books and records of the Company; provided that Buyer confirm to the
Transfer Agent and the Company that the Conversion Shares, Warrant Shares and
Interest Shares have been or will be sold only pursuant to an effective
registration statement for such securities under the Securities Act of 1933, as
amended (the “Act”), and that the Buyer has complied, or will comply, with all
applicable prospectus delivery requirements; and further provided that counsel
to the Company delivers (i) the Notice of Effectiveness set forth in Exhibit I
attached hereto and (ii) an opinion of counsel in the form set forth in Exhibit
II attached hereto, and that if the Conversion Shares, Warrant Shares and the
Interest Shares are not registered for sale under the Act, then the certificates
for the Conversion Shares, Warrant Shares and Interest Shares shall bear the
following legend:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.”

 

 

 

 

c.In the event that counsel to the Company fails or refuses to render an opinion
as required to issue the Conversion Shares, the Warrant Shares or the Interest
Shares in accordance with the preceding paragraph (either with or without
restrictive legends, as applicable), then the Company irrevocably and expressly
authorizes counsel to the Buyer to render such opinion. The Transfer Agent shall
accept and be entitled to rely on such opinion for the purposes of issuing the
Conversion Shares, the Warrant Shares or the Interest Shares.

 

d.Upon the Company’s or the Escrow Agent’s receipt of a properly completed
Conversion Notice or Exercise Notice (along with evidence that the Aggregate
Exercise Price (as defined in the Warrant) has been delivered to the Company),
the Company or the Escrow Agent, as the case may be, shall, within one Trading
Day thereafter, send to the Transfer Agent the Conversion Notice or Exercise
Notice, as the case may be, which shall constitute an irrevocable instruction to
the Transfer Agent to process such Conversion Notice or Exercise Notice in
accordance with the terms of these instructions. For purposes hereof “Trading
Day” shall mean any day on which the Nasdaq Market is open for customary
trading.

 

2.All Shares.

 

a.The Company hereby irrevocably appoints the Escrow Agent as a duly authorized
agent of the Company for the purposes of authorizing the Transfer Agent to
process issuances and transfers specifically contemplated herein.

 

b.The Transfer Agent shall rely exclusively on the Conversion Notice or the
Exercise Notice, and shall have no liability for relying on such instructions.
Any Conversion Notice or Exercise Notice delivered hereunder shall constitute an
irrevocable instruction to the Transfer Agent to process such notice or notices
in accordance with the terms thereof. Such notice or notices may be transmitted
to the Transfer Agent by facsimile or any commercially reasonable method.

 

c.The Company hereby confirms to the Transfer Agent and the Buyer that no
instructions other than as contemplated herein will be given to Transfer Agent
by the Company with respect to the matters referenced herein. The Company hereby
authorizes the Transfer Agent, and the Transfer Agent shall be obligated, to
disregard any contrary instructions received by or on behalf of the Company.

 

 

 

 

3.Certain Notice Regarding the Escrow Agent. The Company and the Transfer Agent
hereby acknowledge that the Escrow Agent is general counsel to the Buyer, a
partner of the general partner of the Buyer and counsel to the Buyer in
connection with the transactions contemplated and referred herein. The Company
and the Transfer Agent agree that in the event of any dispute arising in
connection with this Agreement or otherwise in connection with any transaction
or agreement contemplated and referred herein, the Escrow Agent shall be
permitted to continue to represent the Buyer and neither the Company nor the
Transfer Agent will seek to disqualify such counsel.

 

4.Company Acknowledgments.

 

a.The Company hereby agrees that it shall not replace the Transfer Agent as the
Company’s transfer agent without the prior written consent of the Buyer.

 

b.The Company agrees that in the event that the Transfer Agent resigns as the
Company’s transfer agent the Company shall engage a suitable replacement
transfer agent that will agree to serve as transfer agent and to be bound by the
terms and conditions of these Irrevocable Transfer Agent Instructions within 5
business days from the effectiveness of such resignation.

 

c.The Company acknowledges that the Buyer is relying on the representations and
covenants made by the Company hereunder and are a material inducement to the
Buyer purchasing the Debenture pursuant to the Agreement. The Company further
acknowledges that without such representations and covenants of the Company made
hereunder, the Buyer would not purchase the Debenture.

 

d.The Company specifically acknowledges and agrees that in the event of a breach
or threatened breach by a party hereto of any provision hereof, the Buyer will
be irreparably damaged and that damages at law would be an inadequate remedy if
these Irrevocable Transfer Agent Instructions were not specifically enforced.
Therefore, in the event of a breach or threatened breach by the Company,
including, without limitation, the attempted termination of the agency
relationship created by this instrument, the Buyer shall be entitled, in
addition to all other rights or remedies, to an injunction restraining such
breach, without being required to show any actual damage or to post any bond or
other security, and/or to a decree for specific performance of the provisions of
these Irrevocable Transfer Agent Instructions.

5.Transfer Agent Binding Disclaimer: In consideration for the Transfer Agent
agreeing and attesting to all terms in the above referenced Irrevocable Transfer
Agent Instructions, in particular any kind of lawsuit and or action that may
arise from the Buyer’s instructing the Transfer Agent to issue shares based on
the legality of the Agreement whereas the Company is denying the request in full
or partially for whatever reason, the Company, Buyer and any other third party
involved agree for ourselves, our successors, legal representatives and assigns,
at all times to defend, indemnify and save the Transfer Agent, their successors
and assigns, free and harmless from and against any and all claims, from
actions, suits, whether groundless or otherwise, and from and against any and
all liabilities, taxes, losses, damages, costs, charges, counsel fees, and other
expenses of every nature and character that arises from this action.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

 

IN WITNESS WHEREOF, the parties have caused this letter agreement regarding
Irrevocable Transfer Agent Instructions to be duly executed and delivered as of
the date first written above.

 

  COMPANY:       NeoMedia Technologies, Inc.         By: /s/ Barry S Baer  
Name: Barry S Baer   Title: Colonel US Army (Retired), Chief Financial Officer  
    YA Global Investments, L.P.       By: Yorkville Advisors, LLC   Its:
Investment Manager         By:  /s/   Name: Gerald Eicke   Title: Managing
Member         ESCROW AGENT         By: /s/   David Gonzalez, Esq.

 

WorldWide Stock Transfer, LLC         By: /s/   Name:   Yonah Kopstick   Title:
SVP  

 

 

 

 

EXHIBIT I

 

TO IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

 

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

 

_________, 20__

 

________

 

Attention:

 

RE:     NEOMEDIA TECHNOLOGIES, INC.

 

Ladies and Gentlemen:

 

We are counsel to NeoMedia Technologies, Inc., (the “Company”), and have
represented the Company in connection with its filing of a registration
statement covering the resale of certain shares (the “Conversion Shares”) of the
Company’s common stock, par value $.001 per share (the “Common Stock”) issued
upon the conversion of the secured convertible debenture purchased by YA Global
Investments, LP (the “Buyer”) pursuant to that certain Agreement, dated as of
June _, 2012 (the “Agreement”), entered into by and among the Company and the
Buyer. On _______, 20__, the Company filed a Registration Statement (File No.
___-_________) (the “Registration Statement”) with the Securities and Exchange
Commission (the “SEC”) relating to the sale of the Conversion Shares.

 

In connection with the foregoing, we advise the Transfer Agent that a member of
the SEC’s staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at ____ P.M.
on __________, 20__ and we have no knowledge that any stop order suspending its
effectiveness has been issued or that any proceedings for that purpose are
pending before, or threatened by, the SEC and the Conversion Shares are
available for sale under the 1933 Act pursuant to the Registration Statement.

 

The statement made herein that “we have no knowledge” is based solely on
information actually known to those attorneys currently practicing with this
firm and engaged in the representation of the Company in connection with the
transactions contemplated by the Agreement.

 

          Very truly yours,

 

 

 

 

EXHIBIT II

 

TO IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

 

FORM OF OPINION

 

________________ 20__

 

VIA FACSIMILE AND REGULAR MAIL

 

WorldWide Stock Transfer, LLC

433 Hackensack Avenue, Level L

Hackensack, New Jersey 07601

 

RE:     NEOMEDIA TECHNOLOGIES, INC.

 

Ladies and Gentlemen:

 

We have acted as counsel to NeoMedia Technologies, Inc., a Delaware corporation
(the “Company”), in connection with the registration under the Securities Act of
1933, as amended (the “Act”), of an offering of up to ____________ shares of the
Company’s common stock, par value $0.001 per share (the “Common Stock”), issued
or to be issued to the selling stockholders (the “Selling Stockholders”) listed
in the selling stockholders table at page __ of the final prospectus, a copy of
which is attached hereto as Exhibit A. We understand that the certificates
representing the Common Stock currently contain a legend (the “Securities Act
Legend”) stating that the Common Stock represented by such certificates may not
be sold or transferred without registration under the Act.

 

The sale of the Common Stock by the Selling Stockholders has been registered
under the Act pursuant to a Registration Statement on Form S-1 (SEC File No.
333-______), filed with the Securities and Exchange Commission (the
“Commission”) on ________ __, 200_ (the “Registration Statement”). The
Registration Statement was declared effective under the Act by the Commission on
________ __, 200_. Therefore, the Common Stock identified in the Registration
Statement, including those shares issued upon exercise of the Convertible
Debentures and Warrants referenced in Exhibit A, may, upon receipt of
confirmation from the Selling Stockholder that the Common Stock has been or will
be sold only pursuant to the Registration Statement and that the Selling
Stockholder has complied, or will comply, with all applicable prospectus
delivery requirements, be issued or reissued, as applicable, without bearing the
Securities Act Legend.

 

          Very truly yours,

 

 

 

 

EXHIBIT A

 

Prospectus