Exhibit 10.4

 
IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

March 27, 2007

Worldwide Stock Transfer, LLC
885 Queen Anne Road
Teaneck, NJ 07666

 
RE: NEOMEDIA TECHNOLOGIES, INC.

Ladies and Gentlemen:

Reference is made to that certain Securities Purchase Agreement (the “Securities
Purchase Agreement”) of even date herewith by and between Neomedia Technologies,
Inc., a Delaware corporation (the “Company”), and the Buyers set forth on
Schedule I attached thereto (collectively the “Buyers”). Pursuant to the
Securities Purchase Agreement, the Company shall sell to the Buyers, an the
Buyers shall purchase from the Company, convertible debentures (collectively,
the “Debentures”) in the aggregate principal amount of Seven Million Four
Hundred Fifty Eight Thousand Six Hundred Fifty One Dollars ($7,458,651), plus
accrued interest, which are convertible into shares of the Company’s common
stock, par value $.001 per share (the “Common Stock”), at the Buyers discretion.
The Company has also issued to the Buyer warrants to purchase up to 125,000,000
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 Buyers upon conversion of the
Debentures (“Conversion Shares”).

 

 
2.
Up to 125,000,000 shares of Common Stock to be issued to the Buyers upon
exercise of the Warrant (the “Warrant Shares”).

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

 
1.
Conversion Shares and Warrant Shares.

 

 
a.
Instructions Applicable to Transfer Agent. With respect to the Conversion
Shares, and Warrant Shares, the Transfer Agent shall issue the Conversion Shares
and Warrant Shares to the Buyers 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 Debentures, 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 David Gonzalez, Esq. (the “Escrow Agent”) on behalf of the Company. Upon
receipt of a Conversion Notice or an Exercise Notice, the Transfer Agent shall
within three (3) Trading Days 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 Buyers, credit such aggregate number of shares of Common Stock to which the
Buyers shall be entitled to the Buyer’s or their designees’ balance account with
DTC through its Deposit Withdrawal At Custodian (“DWAC”) system provided the
Buyer causes its bank or broker to initiate the DWAC transaction. For purposes
hereof “Trading Day” shall mean any day on which the Nasdaq Market is open for
customary trading.

 

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b.
The Company hereby confirms to the Transfer Agent and the Buyer that
certificates representing the Conversion Shares and the Warrant 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 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 Securities Act of 1933, as amended, 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 or the Warrant 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.

 

 
d.
Instructions Applicable to Escrow Agent. Upon the Escrow Agent’s receipt of a
properly completed Conversion Notice or Exercise Notice and the Aggregate
Exercise Price (as defined in the Warrant), the Escrow Agent shall, within one
(1) 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.

 

 
2.
All Shares.

 

 
a.
The Transfer Agent shall reserve for issuance to the Buyers a minimum of
500,000,000 shares for issues to the Buyers upon conversion of the Debenture and
exercise of the Warrants. All such shares shall remain in reserve with the
Transfer Agent until the Buyers provides the Transfer Agent instructions that
the shares or any part of them shall be taken out of reserve and shall no longer
be subject to the terms of these instructions.

 

 
b.
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.

 
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c.
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.

 

 
d.
The Company hereby confirms to the Transfer Agent and the Buyers 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.

 
Certain Notice Regarding the Escrow Agent. The Company and the Transfer Agent
hereby acknowledge that the Escrow Agent is general counsel to the Buyers, a
partner of the general partner of the Buyers and counsel to the Buyers 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 Buyers and neither the Company nor the
Transfer Agent will seek to disqualify such counsel.
 
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 Buyers.
 
Any attempt by Transfer Agent to resign as the Company’s transfer agent
hereunder shall not be effective until such time as the Company provides to the
Transfer Agent written notice that a suitable replacement has agreed to serve as
transfer agent and to be bound by the terms and conditions of these Irrevocable
Transfer Agent Instructions.
 
 The Company and the Transfer Agent hereby acknowledge and confirm that
complying with the terms of this Agreement does not and shall not prohibit the
Transfer Agent from satisfying any and all fiduciary responsibilities and duties
it may owe to the Company.
 
The Company and the Transfer Agent acknowledge that the Buyers is relying on the
representations and covenants made by the Company and the Transfer Agent
hereunder and are a material inducement to the Buyers purchasing convertible
debentures under the Securities Purchase Agreement. The Company and the Transfer
Agent further acknowledge that without such representations and covenants of the
Company and the Transfer Agent made hereunder, the Buyers would not purchase the
Debentures.
 
Each party hereto specifically acknowledges and agrees that in the event of a
breach or threatened breach by a party hereto of any provision hereof, the
Buyers 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 a party hereto, including, without limitation, the attempted termination of
the agency relationship created by this instrument, the Buyers 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.
 
Transfer Agent Binding Disclaimer: In consideration for Worldwide Stock
Transfer, LLC 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 instructing Worldwide Stock Transfer,
LLC to issue shares based on the legality of the agreement whereas the issuer is
denying the request in full or partially for whatever reason, the issuer, buyers
and any other third party involved agree for ourselves, our successors, legal
representatives and assigns, at all times to defend, indemnify and save
Worldwide Stock Transfer, LLC, 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.
 
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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/ David A. Dodge
 

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Name: David A. Dodge
 
Title: CFO
         
/s/ David Gonzalez
 

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David Gonzalez, Esq.

Worldwide Stock Transfer, LLC

By: /s/ Yonah Kopstick

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Name: Yonah Kopstick
Title:SVP

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