Exhibit 10.3 


 


WARRANT


 


THE SECURITIES REPRESENTED BY THIS WARRANT
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 SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES
LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.


 


NEOMEDIA TECHNOLOGIES, INC.


 


Warrant To Purchase Common Stock


 


	Warrant No.: NEOM-0512	Number of Shares:	1,000,000
	 	Warrant Exercise Price:	$0.15
	 	Expiration Date:	June 1, 2017


 


Date of Issuance: June 1, 2012


 


NeoMedia Technologies, Inc., a Delaware
corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, YA Global Investments, L.P.(“YA Global”), the registered holder hereof
or any permitted assigns (each a “Holder” and collectively, the “Holders”), is entitled,
subject to the terms set forth below, to purchase from the Company upon surrender of this Warrant, at any time or times on or after
the date hereof, but not after 11:59 P.M. Eastern Time on the Expiration Date (as defined herein) up to 1,000,000 fully paid
and nonassessable shares of Common Stock (as defined herein) of the Company (the “Warrant Shares”) at the exercise
price per share provided in Section 1(b) below or as subsequently adjusted; provided, however, that in no event shall the
Holder be entitled to exercise this Warrant for a number of Warrant Shares in excess of that number of Warrant Shares which, upon
giving effect to such exercise, would cause the aggregate number of shares of Common Stock beneficially owned by the Holder and
its affiliates to exceed 9.99% of the outstanding shares of the Common Stock following such exercise (however, such restriction
may be waived by Holder (but only as to itself and not to any other Holder) upon not less than 65 days prior notice to the Company).
For purposes of the foregoing proviso, the aggregate number of shares of Common Stock beneficially owned by the Holder and its
affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the
determination of such proviso is being made, but shall exclude shares of Common Stock which would be issuable upon (i) exercise
of the remaining, unexercised Warrants beneficially owned by the Holder and its affiliates and (ii) exercise or conversion
of the unexercised or unconverted portion of any other securities of the Company beneficially owned by the Holder and its affiliates
(including, without limitation, any convertible notes or preferred stock) subject to a limitation on conversion or exercise analogous
to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership
shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended. For purposes of this Warrant,
in determining the number of outstanding shares of Common Stock a Holder may rely on the number of outstanding shares of Common
Stock as reflected in (1) the Company’s most recent Form 10-Q or Form 10-K, as the case may be, (2) a more recent public
announcement by the Company or (3) any other notice by the Company or its transfer agent setting forth the number of shares of
Common Stock outstanding. Upon the written request of any Holder, the Company shall promptly, but in no event later than one (1)
Business Day following the receipt of such notice, confirm in writing to any such Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the exercise
of Warrants (as defined below) by such Holder and its affiliates since the date as of which such number of outstanding shares of
Common Stock was reported.


 



    	 



    	 



    

 


Section 1.


 


(a)          This
Warrant is issued pursuant to the Agreement (“SPA Agreement”) dated1June 1, 2012 between the Company and YA
Global or issued in exchange or substitution thereafter or replacement thereof. Each Capitalized term used, and not otherwise defined
herein, shall have the meaning ascribed thereto in the SPA Agreement.


 


(b)          Definitions.
The following words and terms as used in this Warrant shall have the following meanings:


 


(i)          “Approved
Stock Plan” means a stock option plan that has been approved by the Board of Directors of the Company prior to the date
of the SPA Agreement, pursuant to which the Company’s securities may be issued only to any employee, officer or director
for services provided to the Company.


 


(ii)         
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in the City
of New York are authorized or required by law to remain closed.


 


(iii)        “Closing
Bid Price” means the closing bid price of Common Stock as quoted on the Principal Market (as reported by Bloomberg Financial
Markets (“Bloomberg”) through its “Volume at Price” function).


 


(iv)        “Common
Stock” means (i) the Company’s common stock, par value $0.001 per share, and (ii) any capital stock into
which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock.


 


(v)         “Excluded
Securities” means, (a) shares issued or deemed to have been issued by the Company pursuant to an Approved Stock Plan,
(b) shares of Common Stock issued or deemed to be issued by the Company upon the conversion, exchange or exercise of any right,
option, obligation or security outstanding on the date prior to date of the SPA Agreement, provided that the terms of such right,
option, obligation or security are not amended or otherwise modified on or after the date of the SPA Agreement, and provided that
the conversion price, exchange price, exercise price or other purchase price is not reduced, adjusted or otherwise modified and
the number of shares of Common Stock issued or issuable is not increased (whether by operation of, or in accordance with, the relevant
governing documents or otherwise) on or after the date of the SPA Agreement, and (c) the shares of Common Stock issued or
deemed to be issued by the Company upon conversion of the Convertible Debentures or exercise of the Warrants.


 



    	 



    	 



    

 


(vi)        “Expiration
Date” means the date written on the first page of this Warrant.


 


(vii)       “Issuance
Date” means the date hereof.


 


(viii)      “Options”
means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.


 


(ix)         
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization and a government or any department or agency thereof.


 


(x)          “Primary
Market” means on any of (a) the American Stock Exchange, (b) New York Stock Exchange, (c) the Nasdaq Global Select Market,
(d) the Nasdaq Global Market, (e) the Nasdaq Capital Market, or (e) the Over-the-Counter Bulletin Board (“OTCBB”)


 


(xi)         “Securities
Act” means the Securities Act of 1933, as amended.


 


(xii)        “Warrant”
means this Warrant and all Warrants issued in exchange, transfer or replacement thereof.


 


(xiii)       “Warrant
Exercise Price” shall be $0.15 or as subsequently adjusted as provided in Section 8 hereof.


 


(c)          Other
Definitional Provisions.


 


(i)          Except
as otherwise specified herein, all references herein (A) to the Company shall be deemed to include the Company’s successors
and (B) to any applicable law defined or referred to herein shall be deemed references to such applicable law as the same
may have been or may be amended or supplemented from time to time.


 


(ii)         When
used in this Warrant, the words “herein”, “hereof”, and “hereunder”
and words of similar import, shall refer to this Warrant as a whole and not to any provision of this Warrant, and the words “Section”,
“Schedule”, and “Exhibit” shall refer to Sections of, and Schedules and Exhibits to, this
Warrant unless otherwise specified.


 


(iii)        Whenever
the context so requires, the neuter gender includes the masculine or feminine, and the singular number includes the plural, and
vice versa.


 



    	 



    	 



    

 


Section 2.            Exercise
of Warrant.


 


(a)          Subject
to the terms and conditions hereof, this Warrant may be exercised by the Holder hereof then registered on the books of the Company,
pro rata as hereinafter provided, at any time on any Business Day on or after the opening of business on such Business Day, commencing
with the first day after the date hereof, and prior to 11:59 P.M. Eastern Time on the Expiration Date (i) by delivery of a
written notice, in the form of the subscription notice attached as Exhibit A hereto (the “Exercise Notice”),
of such Holder’s election to exercise this Warrant, which notice shall specify the number of Warrant Shares to be purchased, payment
to the Company of an amount equal to the Warrant Exercise Price(s) applicable to the Warrant Shares being purchased, multiplied
by the number of Warrant Shares (at the applicable Warrant Exercise Price) as to which this Warrant is being exercised (plus
any applicable issue or transfer taxes) (the “Aggregate Exercise Price”) in cash or wire transfer of immediately
available funds and the surrender of this Warrant (or an indemnification undertaking with respect to this Warrant in the case of
its loss, theft or destruction) to a common carrier for overnight delivery to the Company as soon as practicable following such
date (“Cash Basis”) or (ii) if at the time of exercise, the Warrant Shares are not subject to an effective registration
statement, by delivering an Exercise Notice and in lieu of making payment of the Aggregate Exercise Price in cash or wire transfer,
elect instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the
following formula (the “Cashless Exercise”):


 


Net Number = (A x B) – (A x C)


                       B


 


For purposes of the foregoing formula:


 


A = the total number of Warrant Shares with respect
to which this Warrant is then being exercised.


 


B = the Closing Bid Price of the Common Stock on the
date of exercise of the Warrant.


 


C = the Warrant Exercise Price then in effect for the
applicable Warrant Shares at the time of such exercise.


 


In the event
of any exercise of the rights represented by this Warrant in compliance with this Section 2, the Company shall on or before the
fifth Business Day following the date of receipt of the Exercise Notice, the Aggregate Exercise Price and this Warrant (or
an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction) and the receipt of the
representations of the Holder specified in Section 6 hereof, if requested by the Company (the “Exercise Delivery Documents”),
and if the Common Stock is DTC eligible, credit such aggregate number of shares of Common Stock to which the Holder shall be entitled
to the Holder’s or its designee’s balance account with The Depository Trust Company; provided, however, if the Holder
who submitted the Exercise Notice requested physical delivery of any or all of the Warrant Shares, or, if the Common Stock is not
DTC eligible then the Company shall, on or before the fifth Business Day following receipt of the Exercise Delivery Documents,
issue and surrender to a common carrier for overnight delivery to the address specified in the Exercise Notice, a certificate,
registered in the name of the Holder, for the number of shares of Common Stock to which the Holder shall be entitled pursuant to
such request. Upon delivery of the Exercise Notice and Aggregate Exercise Price referred to in clause (i) or (ii) above the
Holder of this Warrant shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with
respect to which this Warrant has been exercised. In the case of a dispute as to the determination of the Warrant Exercise Price,
the Closing Bid Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder the number
of Warrant Shares that is not disputed and shall submit the disputed determinations or arithmetic calculations to the Holder via
facsimile within one (1) Business Day of receipt of the Holder’s Exercise Notice.


 



    	 



    	 



    

 


(b)          If
the Holder and the Company are unable to agree upon the determination of the Warrant Exercise Price or arithmetic calculation of
the Warrant Shares within one day of such disputed determination or arithmetic calculation being submitted to the Holder, then
the Company shall immediately submit via facsimile (i) the disputed determination of the Warrant Exercise Price or the Closing
Bid Price to an independent, reputable investment banking firm or (ii) the disputed arithmetic calculation of the Warrant Shares
to its independent, outside accountant. The Company shall cause the investment banking firm or the accountant, as the case may
be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than forty-eight
hours from the time it receives the disputed determinations or calculations. Such investment banking firm’s or accountant’s
determination or calculation, as the case may be, shall be deemed conclusive absent manifest error.


 


(c)          Unless
the rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, as soon as practicable
and in no event later than five (5) Business Days after any exercise and at its own expense, issue a new Warrant identical in all
respects to this Warrant exercised except it shall represent rights to purchase the number of Warrant Shares purchasable immediately
prior to such exercise under this Warrant exercised, less the number of Warrant Shares with respect to which such Warrant is exercised.


 


(d)          No
fractional Warrant Shares are to be issued upon any pro rata exercise of this Warrant, but rather the number of Warrant Shares
issued upon such exercise of this Warrant shall be rounded up or down to the nearest whole number.


 


(e)          If
the Company or its Transfer Agent shall fail for any reason or for no reason to issue to the Holder within ten (10) days of
receipt of the Exercise Delivery Documents, a certificate for the number of Warrant Shares to which the Holder is entitled or to
credit the Holder’s balance account with The Depository Trust Company for such number of Warrant Shares to which the Holder
is entitled upon the Holder’s exercise of this Warrant, the Company shall, in addition to any other remedies under this Warrant
or otherwise available to such Holder, pay as additional damages in cash to such Holder on each day the issuance of such certificate
for Warrant Shares is not timely effected an amount equal to 0.025% of the product of (A) the sum of the number of Warrant Shares
not issued to the Holder on a timely basis and to which the Holder is entitled, and (B) the Closing Bid Price of the Common Stock
for the trading day immediately preceding the last possible date which the Company could have issued such Common Stock to the Holder
without violating this Section 2.


 



    	 



    	 



    

 


(f)          If
within ten (10) days after the Company’s receipt of the Exercise Delivery Documents, the Company fails to deliver a new Warrant
to the Holder for the number of Warrant Shares to which such Holder is entitled pursuant to Section 2 hereof, then, in addition
to any other available remedies under this Warrant, or otherwise available to such Holder, the Company shall pay as additional
damages in cash to such Holder on each day after such tenth (10th) day that such delivery of such new Warrant is not
timely effected in an amount equal to 0.25% of the product of (A) the number of Warrant Shares represented by the portion
of this Warrant which is not being exercised and (B) the Closing Bid Price of the Common Stock for the trading day immediately
preceding the last possible date which the Company could have issued such Warrant to the Holder without violating this Section 2.


 


Section 3.            Covenants
as to Common Stock. The Company hereby covenants and agrees as follows:


 


(a)          This
Warrant is, and any Warrants issued in substitution for or replacement of this Warrant will upon issuance be, duly authorized and
validly issued.


 


(b)          All
Warrant Shares which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly
issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue thereof.


 


(c)          If
at any time during the period within which the rights represented by this Warrant may be exercised the Company does not have a
sufficient number of shares of Common Stock authorized and available to provide for the exercise in full of the rights represented
by this Warrant, or if the par value of such shares is less than or equal to the applicable Warrant Exercise Price, then upon written
notice from two thirds of the Holders, the Company shall call and hold a special meeting of its stockholders within sixty 
(60) days of such notice for the purpose of increasing the number of authorized shares of Common Stock and/or reducing the par
value of the Common Stock.


 


(d)          If
at any time after the date hereof the Company shall file a registration statement, the Company shall include the Warrant Shares
issuable to the Holder, pursuant to the terms of this Warrant and shall maintain, so long as any other shares of Common Stock shall
be so listed, such listing of all Warrant Shares from time to time issuable upon the exercise of this Warrant; and the Company
shall so list on each national securities exchange or automated quotation system, as the case may be, and shall maintain such listing
of, any other shares of capital stock of the Company issuable upon the exercise of this Warrant if and so long as any shares of
the same class shall be listed on such national securities exchange or automated quotation system.


 


(e)          The
Company will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms to be observed or performed by it hereunder, but will at all times in good faith assist in the carrying out
of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the Holder in order
to protect the exercise privilege of the Holder against dilution or other impairment, consistent with the tenor and purpose of
this Warrant. The Company will not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant
above the Warrant Exercise Price then in effect, and (ii) will take all such actions as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this
Warrant.


 



    	 



    	 



    

 


(f)          This
Warrant will be binding upon any entity succeeding to the Company by merger, consolidation or acquisition of all or substantially
all of the Company’s assets.


 


Section 4.            Taxes.
The Company shall pay any and all taxes, except any applicable withholding, which may be payable with respect to the issuance and
delivery of Warrant Shares upon exercise of this Warrant.


 


Section 5.            Warrant
Holder Not Deemed a Stockholder. Except as otherwise specifically provided herein, no Holder, as such, shall be entitled to
vote or receive dividends or be deemed the holder of shares of capital stock of the Company for any purpose, nor shall anything
contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or
any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights,
or otherwise, prior to the issuance to the holder of this Warrant of the Warrant Shares which he or she is then entitled to receive
upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities
on such holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether
such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 5, the Company will provide
the holder of this Warrant with copies of the same notices and other information given to the stockholders of the Company generally,
contemporaneously with the giving thereof to the stockholders.


 


Section 6.            Representations
of Holder. The Holder, by the acceptance hereof, represents that it is acquiring this Warrant and the Warrant Shares for its
own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution
of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act; provided, however,
that by making the representations herein, the Holder does not agree to hold this Warrant or any of the Warrant Shares for any
minimum or other specific term and reserves the right to dispose of this Warrant and the Warrant Shares at any time in accordance
with or pursuant to a registration statement or an exemption under the Securities Act. The Holder further represents, by acceptance
hereof, that, as of this date, such holder is an “accredited investor” as such term is defined in Rule 501(a)(1)
of Regulation D promulgated by the Securities and Exchange Commission under the Securities Act (an “Accredited Investor”).
Upon exercise of this Warrant the Holder shall, if requested by the Company, confirm in writing, in a form satisfactory to the
Company, that the Warrant Shares so purchased are being acquired solely for the Holder’s own account and not as a nominee
for any other party, for investment, and not with a view toward distribution or resale and that the Holder is an Accredited Investor.
If the Holder cannot make such representations because they would be factually incorrect, it shall be a condition to the Holder’s
exercise of this Warrant that the Company receive such other representations as the Company considers reasonably necessary to assure
the Company that the issuance of its securities upon exercise of this Warrant shall not violate any United States or state securities
laws.


 



    	 



    	 



    

 


Section 7.            Ownership
and Transfer.


 


(a)          The
Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by
notice to the holder hereof), a register for this Warrant, in which the Company shall record the name and address of the person
in whose name this Warrant has been issued, as well as the name and address of each transferee. The Company may treat the person
in whose name any Warrant is registered on the register as the owner and holder thereof for all purposes, notwithstanding any notice
to the contrary, but in all events recognizing any transfers made in accordance with the terms of this Warrant.


 


Section 8.            Adjustment
of Warrant Exercise Price and Number of Shares. The Warrant Exercise Price and the number of shares of Common Stock issuable
upon exercise of this Warrant shall be adjusted from time to time as follows:


 


(a)          Adjustment
of Warrant Exercise Price and Number of Shares upon Issuance of Common Stock. If and whenever on or after the Issuance Date
of this Warrant, the Company issues or sells, or is deemed to have issued or sold, any shares of Common Stock (other than
Excluded Securities) for a consideration per share less than a price (the “Applicable Price”) equal to the Warrant
Exercise Price in effect immediately prior to such issuance or sale, then immediately after such issue or sale the Warrant Exercise
Price then in effect shall be reduced to an amount equal to such consideration per share. Upon each such adjustment of the Warrant
Exercise Price hereunder, the number of Warrant Shares issuable upon exercise of this Warrant shall be adjusted to the number of
shares determined by multiplying the Warrant Exercise Price in effect immediately prior to such adjustment by the number of Warrant
Shares issuable upon exercise of this Warrant immediately prior to such adjustment and dividing the product thereof by the Warrant
Exercise Price resulting from such adjustment.


 


(b)          Effect
on Warrant Exercise Price of Certain Events. For purposes of determining the adjusted Warrant Exercise Price under Section
8(a) above, the following shall be applicable:


 


(i)          Issuance
of Options. If after the date hereof, the Company in any manner grants any Options and the lowest price per share for which
one share of Common Stock is issuable upon the exercise of any such Option or upon conversion or exchange of any convertible securities
issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to
be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price
per share. For purposes of this Section 8(b)(i), the lowest price per share for which one share of Common Stock is issuable upon
exercise of such Options or upon conversion or exchange of such Convertible Securities shall be equal to the sum of the lowest
amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the
granting or sale of the Option, upon exercise of the Option or upon conversion or exchange of any convertible security issuable
upon exercise of such Option. No further adjustment of the Warrant Exercise Price shall be made upon the actual issuance of such
Common Stock or of such convertible securities upon the exercise of such Options or upon the actual issuance of such Common Stock
upon conversion or exchange of such convertible securities.


 



    	 



    	 



    

 


(ii)         Issuance
of Convertible Securities. If the Company in any manner issues or sells any convertible securities and the lowest price per
share for which one share of Common Stock is issuable upon the conversion or exchange thereof is less than the Applicable Price,
then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of
the issuance or sale of such convertible securities for such price per share. For the purposes of this Section 8(b)(ii), the
lowest price per share for which one share of Common Stock is issuable upon such conversion or exchange shall be equal to the sum
of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock
upon the issuance or sale of the convertible security and upon conversion or exchange of such convertible security. No further
adjustment of the Warrant Exercise Price shall be made upon the actual issuance of such Common Stock upon conversion or exchange
of such convertible securities, and if any such issue or sale of such convertible securities is made upon exercise of any Options
for which adjustment of the Warrant Exercise Price had been or are to be made pursuant to other provisions of this Section 8(b),
no further adjustment of the Warrant Exercise Price shall be made by reason of such issue or sale.


 


(iii)        Change
in Option Price or Rate of Conversion. If the purchase price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion or exchange of any convertible securities, or the rate at which any convertible securities
are convertible into or exchangeable for Common Stock changes at any time, the Warrant Exercise Price in effect at the time of
such change shall be adjusted to the Warrant Exercise Price which would have been in effect at such time had such Options or convertible
securities provided for such changed purchase price, additional consideration or changed conversion rate, as the case may be, at
the time initially granted, issued or sold and the number of Warrant Shares issuable upon exercise of this Warrant shall be correspondingly
readjusted. For purposes of this Section 8(b)(iii), if the terms of any Option or convertible security that was outstanding as
of the Issuance Date of this Warrant are changed in the manner described in the immediately preceding sentence, then such Option
or convertible security and the Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have
been issued as of the date of such change. No adjustment pursuant to this Section 8(b) shall be made if such adjustment would
result in an increase of the Warrant Exercise Price then in effect.


 


(iv)        Calculation
of Consideration Received. If any Common Stock, Options or convertible securities are issued or sold or deemed to have been
issued or sold for cash, the consideration received therefore will be deemed to be the net amount received by the Company therefore.
If any Common Stock, Options or convertible securities are issued or sold for a consideration other than cash, the amount of such
consideration received by the Company will be the fair value of such consideration, except where such consideration consists of
marketable securities, in which case the amount of consideration received by the Company will be the market price of such securities
on the date of receipt of such securities. If any Common Stock, Options or convertible securities are issued to the owners of the
non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefore
will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable
to such Common Stock, Options or convertible securities, as the case may be. The fair value of any consideration other than cash
or securities will be determined jointly by the Company and the holders of Warrants representing at least two-thirds (b) of the
Warrant Shares issuable upon exercise of the Warrants then outstanding. If such parties are unable to reach agreement within ten (10)
days after the occurrence of an event requiring valuation (the “Valuation Event”), the fair value of such consideration
will be determined within five (5) Business Days after the tenth (10th) day following the Valuation Event by an
independent, reputable appraiser jointly selected by the Company and the holders of Warrants representing at least two-thirds (b)
of the Warrant Shares issuable upon exercise of the Warrants then outstanding. The determination of such appraiser shall be final
and binding upon all parties and the fees and expenses of such appraiser shall be borne jointly by the Company and the holders
of Warrants.


 



    	 



    	 



    

 


(v)         Integrated
Transactions. In case any Option is issued in connection with the issue or sale of other securities of the Company, together
comprising one integrated transaction in which no specific consideration is allocated to such Options by the parties thereto, the
Options will be deemed to have been issued for a consideration of $0.001.


 


(vi)        Treasury
Shares. The number of shares of Common Stock outstanding at any given time does not include shares owned or held by or for
the account of the Company, and the disposition of any shares so owned or held will be considered an issue or sale of Common Stock.


 


(vii)       Record
Date. If the Company takes a record of the holders of Common Stock for the purpose of entitling them (1) to receive a
dividend or other distribution payable in Common Stock, Options or in convertible securities or (2) to subscribe for or purchase
Common Stock, Options or convertible securities, then such record date will be deemed to be the date of the issue or sale of the
shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase, as the case may be.


 


(c)          Adjustment
of Warrant Exercise Price upon Subdivision or Combination of Common Stock. If the Company at any time after the date of issuance
of this Warrant subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding
shares of Common Stock into a greater number of shares, any Warrant Exercise Price in effect immediately prior to such subdivision
will be proportionately reduced and the number of shares of Common Stock obtainable upon exercise of this Warrant will be proportionately
increased. If the Company at any time after the date of issuance of this Warrant combines (by combination, reverse stock split
or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, any Warrant Exercise
Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares issuable
upon exercise of this Warrant will be proportionately decreased. Any adjustment under this Section 8(c) shall become effective
at the close of business on the date the subdivision or combination becomes effective.


 


(d)          Distribution
of Assets. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its
assets) to holders of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of
cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement
or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each
such case:


 



    	 



    	 



    

 


(i)          any
Warrant Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders
of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record
date, to a price determined by multiplying such Warrant Exercise Price by a fraction of which (A) the numerator shall be the Closing
Sale Price of the Common Stock on the trading day immediately preceding such record date minus the value of the Distribution (as
determined in good faith by the Company’s Board of Directors) applicable to one share of Common Stock, and (B) the denominator
shall be the Closing Sale Price of the Common Stock on the trading day immediately preceding such record date; and


 


(ii)         either
(A) the number of Warrant Shares obtainable upon exercise of this Warrant shall be increased to a number of shares equal to the
number of shares of Common Stock obtainable immediately prior to the close of business on the record date fixed for the determination
of holders of Common Stock entitled to receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately
preceding clause (i), or (B) in the event that the Distribution is of common stock of a company whose common stock is traded on
a national securities exchange or a national automated quotation system, then the holder of this Warrant shall receive an additional
warrant to purchase Common Stock, the terms of which shall be identical to those of this Warrant, except that such warrant shall
be exercisable into the amount of the assets that would have been payable to the holder of this Warrant pursuant to the Distribution
had the holder exercised this Warrant immediately prior to such record date and with an exercise price equal to the amount by which
the exercise price of this Warrant was decreased with respect to the Distribution pursuant to the terms of the immediately preceding
clause (i).


 


(e)          Certain
Events. If any event occurs of the type contemplated by the provisions of this Section 8 but not expressly provided for
by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights
with equity features), then the Company’s Board of Directors will make an appropriate adjustment in the Warrant Exercise
Price and the number of shares of Common Stock obtainable upon exercise of this Warrant so as to protect the rights of the holders
of the Warrants; provided, except as set forth in section 8(c),that no such adjustment pursuant to this Section 8(e) will increase
the Warrant Exercise Price or decrease the number of shares of Common Stock obtainable as otherwise determined pursuant to this
Section 8.


 


(f)          Voluntary
Adjustments By Company. The Company may at any time during the term of this Warrant reduce the then current Exercise Price
to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.


 


(g)          Notices.


 


(i)          Immediately
upon any adjustment of the Warrant Exercise Price, the Company will give written notice thereof to the holder of this Warrant,
setting forth in reasonable detail, and certifying, the calculation of such adjustment.


 



    	 



    	 



    

 


(ii)         The
Company will give written notice to the holder of this Warrant at least ten (10) days prior to the date on which the Company closes
its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, (B) with respect
to any pro rata subscription offer to holders of Common Stock or (C) for determining rights to vote with respect to any Organic
Change (as defined below), dissolution or liquidation, provided that such information shall be made known to the public prior to
or in conjunction with such notice being provided to such holder.


 


(iii)        The
Company will also give written notice to the holder of this Warrant at least ten (10) days prior to the date on which any Organic
Change, dissolution or liquidation will take place, provided that such information shall be made known to the public prior to or
in conjunction with such notice being provided to such holder.


 


Section 9.            Purchase
Rights; Reorganization, Reclassification, Consolidation, Merger or Sale.


 


(a)          In
addition to any adjustments pursuant to Section 8 above, if at any time the Company grants, issues or sells any Options, Convertible
Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Common
Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares
of Common Stock acquirable upon complete exercise of this Warrant immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common
Stock are to be determined for the grant, issue or sale of such Purchase Rights.


 


(b)          Any
recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Company’s
assets to another Person or other transaction in each case which is effected in such a way that holders of Common Stock are entitled
to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common
Stock is referred to herein as an “Organic Change.” Prior to the consummation of any (i) sale of all or substantially
all of the Company’s assets to an acquiring Person or (ii) other Organic Change following which the Company is not a surviving
entity, the Company will secure from the Person purchasing such assets or the successor resulting from such Organic Change (in
each case, the “Acquiring Entity”) a written agreement (in form and substance satisfactory to Holders representing
at least two-thirds of the Warrant Shares issuable upon exercise of the Warrants then outstanding(iii) of the Warrant Shares
issuable upon exercise of the Warrants then outstanding) to deliver to each Holder in exchange for such Warrants, a security of
the Acquiring Entity evidenced by a written instrument substantially similar in form and substance to this Warrant and satisfactory
to the Holders (including an adjusted warrant exercise price equal to the value for the Common Stock reflected by the terms of
such consolidation, merger or sale, and exercisable for a corresponding number of shares of Common Stock acquirable and receivable
upon exercise of the Warrants without regard to any limitations on exercise, if the value so reflected is less than any Applicable
Warrant Exercise Price immediately prior to such consolidation, merger or sale). Prior to the consummation of any other Organic
Change, the Company shall make appropriate provision (in form and substance satisfactory to the Holders representing a majority
of the Warrant Shares issuable upon exercise of the Warrants then outstanding) to insure that each of the Holders will thereafter
have the right to acquire and receive in lieu of or in addition to (as the case may be) the Warrant Shares immediately theretofore
issuable and receivable upon the exercise of the Holder’s Warrants (without regard to any limitations on exercise),
such shares of stock, securities or assets that would have been issued or payable in such Organic Change with respect to or in
exchange for the number of Warrant Shares which would have been issuable and receivable upon the exercise of such holder’s
Warrant as of the date of such Organic Change (without taking into account any limitations or restrictions on the exercisability
of this Warrant).


 



    	 



    	 



    

 


Section 10.        Lost,
Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company shall promptly,
on receipt of an indemnification undertaking (or, in the case of a mutilated Warrant, the Warrant), issue a new Warrant of like
denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.


 


Section 11.         Notice.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Warrant must be
in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt,
when sent by facsimile (provided confirmation of receipt is received by the sending party transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one Business Day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such
communications shall be:


 


	If to the Company, to:	NeoMedia Technologies, Inc.
	 	
        1360 Center Drive

        Suite 210

        Dunwoody, Georgia  30338

        Attention: Chief Executive Officer or Chief Financial Officer

	 	Telephone:      678-638-0460 (x132)
	 	Facsimile:       678-638-0466
	 	 
	With a copy to:	K&L Gates LLP
	 	200 South Biscayne Boulevard – Suite 3900
	 	Miami, FL  33131-2399
	 	Attention:        Clayton E. Parker, Esq.
	 	Telephone:      (305) 539-3300
	 	
        Facsimile:       (305) 358-7095

         

	If to Holder:	YA Global Investments, L.P.
	 	101 Hudson Street – Suite 3700
	 	Jersey City, NJ  07302
	 	Attention:        Mark A. Angelo
	 	Telephone:      (201) 985-8300
	 	Facsimile:       (201) 985-8266


 



    	 



    	 



    

 


	With Copy to:	David Gonzalez, Esq.
	 	101 Hudson Street – Suite 3700
	 	Jersey City, NJ 07302
	 	Telephone:       (201) 985-8300
	 	Facsimile:        (201) 985-8266


 


or at such other address and facsimile
as shall be delivered to the Company upon the issuance or transfer of this Warrant. Each party shall provide five (5) days’
prior written notice to the other party of any change in address or facsimile number. Written confirmation of receipt (A) given
by the recipient of such notice, consent, facsimile, waiver or other communication, (or (B) provided by a nationally recognized
overnight delivery service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally
recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.


 


Section 12.         Date.
The date of this Warrant is set forth on page 1 hereof. This Warrant, in all events, shall be wholly void and of no effect
after the close of business on the Expiration Date, except that notwithstanding any other provisions hereof, the provisions of
Section 8(b) shall continue in full force and effect after such date as to any Warrant Shares or other securities issued upon
the exercise of this Warrant.


 


Section 13.         Amendment
and Waiver. Except as otherwise provided herein, the provisions of the Warrants may be amended and the Company may take any
action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the
written consent of the Holders representing at least two-thirds of the Warrant Shares issuable upon exercise of the Warrants then
outstanding; provided that, except for Section 8(d), no such action may increase the Warrant Exercise Price or decrease the number
of shares or class of stock obtainable upon exercise of any Warrant without the written consent of the holder of such Warrant.


 


Section 14.         Descriptive
Headings; Governing Law. The descriptive headings of the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. The corporate laws of the State of Delaware shall govern all issues concerning
the relative rights of the Company and its stockholders. All other questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by the internal laws of the State of New Jersey, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of New Jersey or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State of New Jersey. Each party hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in Hudson County and the United States District Court for
the District of New Jersey, for the adjudication of any dispute hereunder or in connection herewith or therewith, or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof
to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law.


 



    	 



    	 



    

 


Section 15.         Waiver
of Jury Trial. AS A MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO ENTER INTO THIS WARRANT, THE PARTIES HERETO HEREBY WAIVE
ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS
ASSOCIATED WITH THIS TRANSACTION.


 


REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK


 



    	 



    	 



    

IN WITNESS WHEREOF,
the Company has caused this Warrant to be signed as of the date first set forth above.


 


	 	NEOMEDIA TECHNOLOGIES, INC.
	 	 
	 	By: /s/ Barry S Baer                                              
	 	Name:  Barry S Baer
	 	Title:    Colonel US Army (Retired), Chief Financial Officer


 



    	 



    	 



    

 


EXHIBIT A TO WARRANT


 


EXERCISE NOTICE


 


TO BE EXECUTED

BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT


 


NEOMEDIA TECHNOLOGIES, INC.


 


The undersigned holder
hereby exercises the right to purchase ______________ of the shares of Common Stock (“Warrant Shares”) of NeoMedia
Technologies, Inc. (the “Company”), evidenced by the attached Warrant (the “Warrant”). Capitalized
terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.


 


Specify Method of exercise
by check mark:


 


1. ___  Cash
Exercise


 


(a) Payment
of Warrant Exercise Price. The holder shall pay the Aggregate Exercise Price of $______________ to the Company in accordance
with the terms of the Warrant.


 


(b) Delivery
of Warrant Shares. The Company shall deliver to the holder _________ Warrant Shares in accordance with the terms of
the Warrant.


 


2. ___  Cashless
Exercise


 


(a) Payment
of Warrant Exercise Price. In lieu of making payment of the Aggregate Exercise Price, the holder elects to receive upon such
exercise the Net Number of shares of Common Stock determined in accordance with the terms of the Warrant.


 


(b) Delivery
of Warrant Shares. The Company shall deliver to the holder _________ Warrant Shares in accordance with the terms of
the Warrant.


 


Date: _________________________ __, ______


 


Name of Registered Holder


 


	By:	 
	Name: 	 
	Title:	 


 



    	 



    	 



    

 


 


EXHIBIT B TO WARRANT


 


FORM OF WARRANT POWER


 


FOR VALUE RECEIVED,
the undersigned does hereby assign and transfer to ________________, Federal Identification No. __________, a warrant to purchase
____________ shares of the capital stock of NeoMedia Technologies, Inc. represented by warrant certificate no. _____, standing
in the name of the undersigned on the books of said corporation. The undersigned does hereby irrevocably constitute and appoint
______________, attorney to transfer the warrants of said corporation, with full power of substitution in the premises.


 


	Dated:______________________________	 	 
	 	 	 
	 	 	By:	 
	 	 	Name:	 
	 	 	Title: