SEVERANCE
        AGREEMENT AND RELEASE

      


      This
        Severance Agreement and Release (the "Agreement")
        is
        entered into as of this the 2nd
        day of
        June, 2008, by and between NeoMedia Technologies, Inc., a Delaware corporation
        (the "Company")
        and
        Frank Pazera (the "Executive").

      


      RECITALS:

      


      WHEREAS,
        the
        Executive has tendered his resignation with the Board of Directors of the
        Company on June 2, 2008, a copy of which is attached hereto as Exhibit
        A;
        and

      


      WHEREAS,
        in
        connection with the Executive’s resignation, the Company and the Executive have
        agreed to terminate the Employment Agreement by and between them dated January
        1, 2008 and any subsequent agreements or modifications of the Employment
        Agreement (the "Employment
        Agreement")
        and
        the employment relationship existing thereunder; and

      


      WHEREAS,
        both
        Executive and the Company desire to resolve any differences and/or disputes
        with
        respect to Executive's employment and the Executive’s resignation
        thereof.

      


      AGREEMENT:

      


      NOW
        THEREFORE,
        in
        consideration of the mutual agreements and covenants set forth herein, and
        for
        such other good and valuable consideration, the receipt and sufficiency of
        which
        is hereby acknowledged, the Executive and the Company acknowledge and
        voluntarily agree as follows:

      


      
        	
                1.

              	
                Recitals.
                  The forgoing recitals are true and correct and are incorporated
                  herein by
                  this reference.

              


      

      


      
        	
                2.

              	
                Termination
                  of Employment Agreement.
                  The Executive and the Company shall terminate the Employment Agreement
                  as
                  of 5:00 p.m., Eastern Standard Time on June 2, 2008 the (“Effective
                  Date”).
                  As of the Effective Date, all rights of the Executive thereof shall
                  terminate and all terms of the Employment Agreement shall be of
                  no further
                  force or effect.

              


      

      


      
        	
                3.

              	
                Severance
                  Payment.
                  In consideration of the termination of the Employment Agreement
                  and the
                  other covenants and agreements set forth herein, the Company shall
                  pay to
                  the Executive a severance payment equal to Sixty-Six Thousand Six
                  Hundred
                  Sixty-Seven Dollars ($66,667), which such payment shall be made
                  to the
                  Executive in eight (8) equal semi-monthly installments of Eight-Thousand
                  Three-Hundred Thirty-Three Dollars and Thirty-Eight Cents ($8,333.38)
                  commencing on June 15, 2008 (the “Commencement
                  Date”)
                  in accordance with the Company's customary payroll practices.
                  

              


      

      



      
        
           

        

        
           

          
            

          

        

        
           

        

      


      
        	
                4.

              	
                Benefits.
                  The Executive shall be entitled to continue to participate in or
                  receive
                  medical, life, and disability insurance as the Company provides
                  generally
                  from time to time to its senior executives, and to its employees,
                  generally, through and until the until the earlier of (a) the last
                  day of
                  the month in which the final installment payment is paid in accordance
                  with Section 3 herein above (the “Expiration
                  Date”)
                  and (b) such date that the Executive obtains employment and becomes
                  eligible for benefits of such employer. Nothing herein is intended,
                  or
                  shall be construed to require the Company to institute or continue
                  any, or
                  any particular, plan or benefits. Furthermore, the Executive hereby
                  agrees
                  and acknowledges that he shall be obligated to make all monetary
                  contributions in accordance with each applicable benefit plan for
                  so long
                  as he continues to participate in such
                  plans.

              


      

      


      
        	
                5.

              	
                Bonus.
                  In consideration of the termination of the Employment Agreement
                  and the
                  other covenants and agreements set forth herein, the Company shall
                  pay to
                  the Executive Ten Thousand Dollars ($10,000) within 5 days of the
                  Commencement Date, which such payment represents fifty percent
                  (50%) of
                  the Executive’s first quarter 2008 bonus under the Employment Agreement.
                  

              


      

      


      
        	
                6.

              	
                No
                  Additional Payments.
                  The Executive and the Company agree that except as provided in
                  Sections 3,
                  4 and 5 herein above, the Executive is not entitled to any additional
                  salary, benefits, compensation or other consideration of any nature
                  whatsoever. For the sake of clarity, the parties hereto hereby
                  agree and
                  acknowledge that the Executive is only entitled to receive Ten
                  Thousand
                  Dollars ($10,000) pursuant to Section 5
                  herein.

              


      

      


      
        	
                7.

              	
                Release
                  by Executive.
                  Except with respect to the (i) covenants and agreements of the
                  Company set
                  forth in this Agreement, the Executive, on behalf of himself, his
                  successors, heirs and assigns, hereby agrees to completely and
                  irrevocably
                  discharge and release the Company, its officers, directors, employees,
                  agents, shareholders, affiliate corporations or entities, predecessors,
                  successors and assigns, and their officers, directors, employees,
                  agents
                  and shareholders from any and all claims, demands, actions, damages,
                  lawsuits, obligations, promises, administrative actions, charges
                  and
                  causes of action, and/or liability whatsoever, both known or unknown,
                  in
                  law or in equity, involving any matter arising out of or in any
                  way
                  related, directly or indirectly, to any and all obligations, duties
                  and
                  liabilities under the Employment Agreement and the termination
                  of same,
                  including, but not limited to, any claim of wrongful discharge,
                  breach of
                  contract, and/or employment discrimination in violation arising
                  out of,
                  under, or in relation to the Executive’s employment with the Company, the
                  termination of the Employment Agreement, the Civil Rights Act of
                  1871, the
                  Labor Management Relations Act of 1947, the Equal Pay Act of 1963,
                  Title
                  VII of the Civil Rights Act of 1964, the Occupational Safety and
                  Health
                  Act of 1970, the Rehabilitation Act of 1973, the Health Maintenance
                  Organization Act of 1973, the Employee Retirement Income Security
                  Act of
                  1974, the Immigration Reform and Control Act of 1986, the Civil
                  Rights Act
                  of 1991, Executive Orders 11141, 11246 and 11375 and/or any other
                  state,
                  federal or local Fair Employment Practice law, employment law,
                  or
                  statute.

              


      

      



      
        
           

        

        
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        	8.	
                Release
                  by Company.
                  The Company, for itself and its directors, officers, employees,
                  agents,
                  subsidiaries and affiliated entities, remises, releases, and forever
                  discharges Executive, his heirs, executors, and administrators,
                  successors, assigns, agents, counsel and representatives, of and
                  from all
                  manner of action and actions, cause and causes of action, suits,
                  debts,
                  sums of money, covenants, contracts, agreements, claims and demands
                  whatsoever, in law, or in equity, that Company ever had, now has
                  or may
                  have, for, on, or by reason of any matter, cause, or thing whatsoever,
                  that may have arisen by reason of Executive's employment or affiliation
                  with the Company.

              


      

      


      
        	9.	
                Non-Competition.
                  Commencing on the Effective Date through and until the Expiration
                  Date,
                  the Executive shall not, in the Restricted Area (as defined below),
                  directly or indirectly, engage in, promote, finance, own, operate,
                  develop, sell or manage or assist in or carry on in any business
                  in direct
                  competition with the business of the Company, as such business
                  now exists
                  or as it may exist through and up to the Expiration Date; provided,
                  however,
                  that Executive
                  may at any time own securities of any competitor corporation whose
                  securities are publicly traded on a recognized exchange so long
                  as the
                  aggregate holdings of the Executive in any one such corporation
                  shall
                  constitute not more than five percent (5%) of the voting stock
                  of such
                  corporation. The term “Restricted
                  Area”
                  used in this Agreement includes any geographical location anywhere
                  in the
                  world where Executive had been assigned to perform services on
                  behalf of
                  Company during his employment with the Company and where the Company,
                  its
                  affiliates or subsidiaries either (a) is engaged in business or
                  (b) has
                  evidenced an intention to engage in business. The phrase “directly
                  or indirectly”
                  used in this Agreement includes the Executive either on his own
                  account,
                  or as a partner, owner, promoter, joint venturer, employee, agent,
                  consultant, advisor, manager, executive, independent contractor,
                  officer,
                  director, stockholder, or otherwise, of an
                  entity.

              


      

      


      
        	10.	
                Non-Solicitation
                  of Employees or Independent Contractors.
                  Commencing on the Effective Date through and until the Expiration
                  Date,
                  the Executive shall not, directly or indirectly, solicit or attempt
                  to
                  induce any employee of the Company or independent contractor engaged
                  and/or utilized by the Company in any capacity to terminate his
                  employment
                  with, or engagement by, the Company. Likewise, commencing on the
                  Effective
                  Date through and until the Expiration Date, the Executive shall
                  not,
                  directly or indirectly, hire or attempt to hire for another entity
                  or
                  person any employee of the Company or independent contractor engaged
                  and/or utilized by the Company in any
                  capacity.

              


      

      


      
        	11.	
                Non-Solicitation
                  of Customers, Prospective Customers or Vendors.
                  Commencing on the Effective Date through and until the Expiration
                  Date,
                  the Executive shall not, directly or indirectly, sell, assemble,
                  manufacture or distribute products or services of the type sold
                  or
                  distributed by the Company to any Customer, Prospective Customer
                  or Vendor
                  (as such terms are defined below) of the Company in the Restricted
                  Area
                  through any entity other than the Company. The Executive acknowledges
                  and
                  agrees that the Company has substantial relationships with its
                  Customers
                  and Vendors, which the Company expends significant time and resources
                  in
                  acquiring and maintaining, and that the Company’s relationships with its
                  Customers and Vendors constitute a significant and valuable asset
                  of the
                  Company. The term “Customer”
                  means any person or entity which has purchased goods, products
                  or services
                  from the Company, entered into any contract for products or services
                  with
                  the Company, and/or entered into any contract for the distribution
                  of any
                  products or services with the Company within the one (1) year immediately
                  preceding the Effective Date. The term “Prospective
                  Customer”
                  means any person or entity which has purchased goods, products
                  or services
                  from the Company, entered into any contract for products or services
                  with
                  the Company, and/or entered into any contract for the distribution
                  of any
                  products or services with the Company within the one (1) year immediately
                  preceding the Effective Date. The term “Vendor”
                  means any supplier, person or entity from which the Company has
                  purchased
                  products or services during the one (1) year immediately preceding
                  the
                  Effective Date.

              


      

      



      
        
           

        

        
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        	12.	
                Acknowledgment
                  by Executive.
                  The term “Company”
                  for purposes of Sections 9, 10 and 11 of this Agreement means NeoMedia
                  Technologies, Inc., a Delaware corporation and its affiliated and
                  related
                  entities, including, without limitation, all of NeoMedia Technologies,
                  Inc.’s subsidiaries and joint venturers. It is understood that any
                  affiliated or related entities of NeoMedia Technologies, Inc. are
                  intended
                  third-party beneficiaries of such provisions of this
                  Agreement

              


      

      


      
        	13.	
                Confidentiality.
                  The Executive covenants and agrees that this Agreement and its
                  terms and
                  conditions are, collectively and individually, totally confidential,
                  and
                  that from the date of this Agreement forward shall forever be kept
                  totally
                  confidential and shall not in any manner or for any reason be disclosed
                  by
                  Executive without the express written consent of the Company except
                  (a) to
                  his attorneys, accountants, and family members on a "need to know"
                  basis,
                  all of whom shall be informed of and be bound by the provisions
                  of this
                  Section; (b) as may be required by government agencies, such as
                  the
                  Internal Revenue Service and the U.S. Securities and Exchange Commission;
                  and (c) pursuant to court order or subpoena compelling such disclosure.
                  Should Executive or his representatives receive any such subpoena
                  or court
                  order compelling disclosure, Executive shall immediately notify
                  the
                  Company so that it may have the opportunity to interpose an objection.
                  The
                  provisions of this Section shall not apply in any action brought
                  by the
                  Executive to enforce any provisions of this
                  Agreement.

              


      

      


      
        	14.	
                Non-Disparagement.
                  The Executive shall refrain from making any written or oral statement
                  or
                  taking any action, directly or indirectly, which he knows or reasonably
                  should know to be a disparaging or negative comment concerning
                  the Company
                  or its officers, directors, employees and agents with the intent
                  to injure
                  or damage the Company or its officers, directors, employees and
                  agents,
                  and shall refrain from suggesting that any such disparaging or
                  negative
                  comment concerning the Company or its officers, directors, employees,
                  attorneys and agents be made except as may be compelled by a court
                  of
                  competent jurisdiction. The Company shall refrain from making any
                  written
                  or oral statement or taking any action, directly or indirectly,
                  which it
                  knows or reasonably should know to be a disparaging or negative
                  comment
                  concerning the Executive with the intent to injure or damage the
                  Executive, and shall refrain from suggesting that any such disparaging
                  or
                  negative comment concerning the Executive be made except as may
                  be
                  compelled by a court of competent jurisdiction.


              


      

       

      
        
           

        

        
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        	15.	
                Return
                  of Property.
                  On or before the Effective Date, the Executive will return to the
                  Company
                  any and all documents, lists, data, confidential information, trade
                  secrets, keys, equipment, products or other property in his possession
                  which relate in any
                  manner to the Company;
                  provided, however, that the Executive shall be entitled to retain
                  possession and ownership of his personal cell phone. 

              


      

      


      
        	16.	
                Opportunity
                  to Hire Counsel; Amendments.
                  The Executive and Company each represent and warrant that they
                  have had
                  the opportunity to review and consider the terms of this Agreement
                  with
                  their respective legal counsel (the costs of such counsel having
                  been, and
                  continuing to be, borne exclusively by the Company with respect
                  to
                  Company’s legal counsel, and by Executive with respect to Executive’s
                  counsel), and that neither of them have made any representations
                  concerning the terms or effects of this Agreement other than those
                  contained in this Agreement, it being clearly understood that this
                  Agreement are the only agreements between the parties and they
                  may not be
                  modified or terminated orally, but only in a writing signed by
                  both of
                  them.

              


      

      


      
        	17.	
                Injunctive
                  Relief.
                  The Executive and Company each acknowledge that the other’s breach of the
                  terms of this Agreement would make difficult the assessment of
                  monetary
                  damages that would be sustained from such breach, and it would
                  be
                  difficult, if not impossible, to compensate fully for damages for
                  any such
                  breach, specifically including, but not limited to, breach of the
                  provisions relating to confidentiality, non-competition, non-disparagement
                  and issuance of the Options. Accordingly, each party specifically
                  agrees
                  that the other shall be entitled to temporary and permanent injunctive
                  relief and/or specific performance to enforce this Agreement or
                  to enjoin
                  any unauthorized disclosure of confidential information, and the
                  Party in
                  breach shall expressly waive the defense that a remedy in damages
                  would be
                  adequate and any requirement for the security or posting of any
                  bond in
                  connection with any such injunctive relief. This provision with
                  respect to
                  injunctive relief and/or specific performance shall not, however,
                  diminish
                  the right of the non-breaching party to claim and recover damages
                  in
                  addition to or in lieu of injunctive relief and/or specific
                  performance.

              


      

      


      
        	18.	
                Binding
                  Agreement.
                  All of the terms and provisions of this Agreement shall be binding
                  upon,
                  inure to the benefit of, and be enforceable by the parties and
                  their
                  respective legal representatives, successors and permitted assigns,
                  whether so expressed or not. 

              


      

      


      
        	19.	
                Counterpart
                  Signatures.
                  This Agreement may be executed in one (1) or more counterparts,
                  each of
                  which shall be deemed an original, but all of which taken together
                  shall
                  constitute one and the same instrument. Confirmation of execution
                  by
                  electronic transmission of a facsimile signature page shall be
                  binding
                  upon any party so confirming. 

              


      

      



      
        
           

        

        
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        	20.	
                Attorney
                  Fees.
                  If any legal proceeding is brought for the enforcement of this
                  Agreement,
                  or because of an alleged dispute, breach or threatened breach,
                  default or
                  misrepresentation in connection with any provision of this Agreement,
                  the
                  successful or prevailing party shall be entitled to recover reasonable
                  attorneys’ fees, sales and use taxes, court costs and all expenses even if
                  not taxable as court costs (including, without limitation, all
                  such fees,
                  taxes, costs and expenses incident to arbitration, appellate, bankruptcy
                  and post-judgment proceedings), incurred in that legal proceeding,
                  in
                  addition to any other relief to which such party may be entitled.
                  Attorneys’ fees shall include, without limitation, paralegal fees,
                  investigative fees, administrative costs, sales and use taxes and
                  all
                  other charges billed by the attorney to the prevailing party.
                  

              


      

      


      
        	21.	
                Jurisdiction.
                  Any civil action or legal proceeding arising out of or relating
                  to this
                  Agreement shall be brought in the courts of record of the State
                  of Florida
                  in Miami-Dade County or the United States District Court, Southern
                  District of Florida, Miami Division. Each party consents to the
                  jurisdiction of such court in any such proceeding and waives any
                  objection
                  to the laying of venue of any such proceeding in such court.
                  

              


      

      


      
        	22.	
                Choice
                  of Law.
                  This Agreement shall be construed, interpreted and the rights of
                  the
                  parties determined in accordance with the laws of the State of
                  Florida
                  (without reference to the choice of law provisions of Florida
                  law).

              


      

      


      
        	23.	
                Severability.
                  If any provision of this Agreement is invalidated by a court of
                  competent
                  jurisdiction, then all of the remaining provisions of this Agreement
                  shall
                  remain in full force and effect, provided that both parties may
                  still
                  effectively realize the complete benefit of the promises and
                  considerations conferred hereby.

              


      

      


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      IN
        WITNESS WHEREOF,
        the
        parties have executed this Severance Agreement and Release on the date set
        forth
        above.

      

        
          	 	
                  By:

                	
                  /s/
                    Frank Pazera

                
	 	
                  FRANK
                    PAZERA

                
	 	
                  
                    

                
	 	 
	 	
                  NEOMEDIA
                    TECHNOLOGIES, INC., a

                
	 	
                  Delaware
                    corporation

                
	 	 
	 	
                  By:

                	
                  /s/
                    Iain McCready

                
	 	
                  Name:
                    Iain McCready

                
	 	
                  Title:
                    Chief Executive Officer

                
	 	
                  
                    

                


        

      

       

      
        
           

        

        
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