PATENT SECURITY AGREEMENT
 
THIS PATENT SECURITY AGREEMENT (“Agreement”), is entered into and made effective
as of July 29, 2008, by and between NEOMEDIA TECHNOLOGIES INC., a Delaware
corporation with its principal place of business located at Two Concourse
Parkway, Suite 500, Atlanta, GA 30328 (the “Parent”), and the each subsidiary of
the Parent listed on Schedule I attached hereto (each a “Subsidiary,” and
collectively and together with the Parent, the “Company”), in favor of the YA
GLOBAL INVESTMENTS, L.P. (the “Secured Party”).
 
WITNESETH:
 
WHEREAS, the Secured Party is the holder of certain secured convertible
debentures and notes, and other evidence of indebtedness issued by the Parent to
the Secured Party as set forth on Schedule A attached hereto (as may be amended,
supplemented and restated from time to time, the “Original Debentures”);
 
WHEREAS, in connection with the Securities Purchase Agreement by and among the
Parent and the Secured Party of even date herewith (the “Securities Purchase
Agreement”), the Parent has agreed, upon the terms and subject to the conditions
of the Securities Purchase Agreement, to issue to the Secured Party (i) an
aggregate original principal amount of $8,650,000 of senior secured convertible
debentures (the “Convertible Debentures”), which shall be convertible into
shares of the Company’s Common Stock (the “Conversion Shares”); and (ii)
warrants (the “Warrants”) to be exercisable to acquire additional shares of
Common Stock (the “Warrants Shares”) initially in that number of shares of
Common Stock set forth in the Securities Purchase Agreement;
 
WHEREAS, the Secured Party and the Parent are parties to the following
(collectively, the “Prior Debt Documents”): the Original Debentures, the
Security Agreement dated August 24, 2007 (the “Prior Security Agreement”) and
any other existing security agreements, guaranty agreements, pledge agreements,
credit agreement or other facility, mortgage, other debenture agreements or
instruments, by and between the Secured Party and the Parent, under which there
may be issued, or by which there may be secured or evidenced any indebtedness
for borrowed money or evidencing any outstanding obligation of the Parent to the
Secured Party, and any other existing documents executed in connection with any
of the foregoing; and
 
WHEREAS, it is a condition precedent to the Secured Party purchasing the
Convertible Debentures and Warrants pursuant to the Securities Purchase
Agreement that each Company shall have executed and delivered to the Secured
Party this Agreement providing for the grant to the Secured Party of a security
interest in all the Patent Collateral (as defined below) of each Company to
secure all of the Parent's Obligations (as defined below) under the Securities
Purchase Agreement, the Security Agreement dated July 29, 2008 (the “Security
Agreement” and collectively along with the Prior Security Agreement, the
“Security Document”) this Agreement, the Convertible Debentures, the Warrants,
the Prior Debt Documents, any other mortgages, pledges, or other collateral
documents, and any amendment, amendment and restatement, modification or
supplement to any of the foregoing (collectively, the “Transaction Documents”); 

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WHEREAS, the Parent has agreed to provide the Secured Party a general security
interest in Pledged Property (as this term is defined in the Security Documents)
and to enter into this Agreement in addition to, and not in limitation of, the
Security Documents for the purpose of recording the security interest of the
Secured Party in the Patent Collateral with the United States Patent and Trade
Marks Office;
 
WHEREAS, each Company has duly authorized the execution, delivery and
performance of this Agreement;
 
NOW THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, the Company agrees as follows:
 
SECTION 1. Definitions. Unless otherwise defined herein otherwise requires,
terms used in this Agreement, including its preamble and recitals, have the
meanings provided in the Securities Purchase Agreement.
 
(a) “Obligations” shall have the meaning assigned to it in the Security
Agreement.
 
SECTION 2. Grant of Security Interest. For good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, to secure the payment
and performance of all of the Obligations of the Parent, the Parent does hereby
mortgage, pledge and hypothecate to the Secured Party and grant to the Secured
Party a security interest in all of the following property (the “Patent
Collateral”), now owned and existing:
 
(a) all letters patent and applications for letters patent throughout the world,
including all patent applications in preparation for filing anywhere in the
world and including each patent and patent application referred to in Schedule B
hereto;
 
(b) all reissues, divisions, continuations, continuations-in-part, extensions,
renewals and reexaminations of any of the items described in clause (a);
 
(c) all patent licenses and other agreements providing the Company with the
right to use any of the items of the type referred to in clauses (a) and (b),
including each patent license referred to in Schedule B hereto;
 
(d) the right to sue third parties for past, present or future infringements of
any Patent Collateral described in clauses (a) and (b) and, to the extent
applicable, clause (c); and
 
(e) all proceeds of, and rights associated with, the foregoing, (including
license royalties and proceeds of infringement suits), and all rights
corresponding thereto throughout the world.

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SECTION 3. Security Agreement. This Agreement has been executed and delivered by
the Parent for the purpose of recording the security interest of the Secured
Party in the Patent Collateral relating to patents referred to in Schedule A
with the United States Patent and Trade Marks Office, to the extent it may be so
registered therein. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Secured Party under the Security Documents. The Security Documents (and all
rights and remedies of the Secured Party thereunder) shall remain in full force
and effect in accordance with their terms.
 
SECTION 4. Release of Security Interest. Upon payment in full of all Obligations
the Secured Party shall, at the Parent’s expense, execute and deliver to the
Company all instruments and other documents as may be necessary or proper to
release the lien on any security interest in the Patent Collateral which has
been granted hereunder.
 
SECTION 5. Acknowledgement. The Parent does hereby further acknowledge and
affirm that the rights and remedies of the Secured Party with respect to the
security interest in the Patent Collateral granted hereby are more fully set
forth in the Security Documents, the terms and provisions of which (including
the remedies provided for therein) are incorporated by references herein as if
fully set forth herein.
 
SECTION 6. Securities Purchase Agreement. Notwithstanding any other term or
provision hereof, in the event that any provisions hereof contradict and are
incapable of being construed in conjunction with the provisions of the
Securities Purchase Agreement or the Security Documents, the provisions of the
Securities Purchase Agreement shall take precedence over those contained herein
and, in particular, if any act of a Company is expressly permitted under the
Securities Purchase Agreement or Security Documents but is prohibited hereunder,
any such act shall be permitted hereunder and any encumbrance expressly
permitted under the Securities Purchase Agreement or Security Documents to exist
or to remain outstanding shall be permitted hereunder and thereunder. This
instrument, document or agreement may be sold, assigned or transferred by the
Agent in accordance with the terms of the Securities Purchase Agreement.
 
SECTION 7. Counterparts. This Agreement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.
 
SECTION 8. Additional Subsidiaries. The Parent agrees work with the Secured
Party and any not yet named Subsidiaries to have this or a similar patent
security agreement apply to all Subsidiaries of the Parent, to the extent
legally possible.
 
[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties hereto have executed this Patent Security
Agreement as of the date first above written
 

 
NeoMedia Technologies Inc.
     
By: /s/ J. Scott Womble
 
Name: J. Scott Womble
 
Title: Chief Financial Officer

STATE OF ____________________ )
 ) SS:
COUNTY OF __________________ )

BEFORE ME, a Notary Public in and for said County and State, personally appeared
the above-named _______________________ who acknowledged that he/she did sign
the foregoing agreement and that the same is his/her free act and deed.
 
IN TESTIMONY WHEREOF, I have hereunto set my hand an official seal at
__________________, ____________________, this ___ day of __________, 2008.
 

 
                                                                                                       
 
Notary Public

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IN WITNESS WHEREOF, the parties hereto have executed this Patent Security
Agreement as of the date first above written.

 
SECURED PARTY:
 
YA GLOBAL INVESTMENTS, L.P.
     
By:
Yorkville Advisors, LLC
 
Its:
Investment Manager
     
By: /s/ Mark Angelo
 
Name: Mark Angelo
 
Title: Portfolio Manager

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SCHEDULE I

LEGAL NAMES; ORGANIZATIONAL IDENTIFICATION NUMBERS; STATES OF ORGANIZATION
 
 
Company’s Name
 
State of
Organization
 
Employer
ID
 
Organizational
ID
 
NeoMedia Technologies Inc.
 
Delaware
 
 
 
 
 

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SCHEDULE A

ORIGINAL DEBENTURES

August 24, 2006
 
$
5,000,000
 
December 29, 2006
   
2,500,000
 
March 27, 2007
   
7,458,651
 
August 24, 2007
   
1,775,000
 
April 10, 2008
   
390,000
 
May 16, 2008
   
500,000
 
May 29, 2008
   
790,000
 
July 10, 2008
   
137,750
 

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SCHEDULE B

US PATENTS AND APPLICATIONS

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