Execution
        Copy



     

    IRREVOCABLE
      TRANSFER AGENT INSTRUCTIONS

     

    


    December
      29, 2006

    
 

    
      	
              American
                Stock Transfer & Trust Company

            
	
              6201
                15th
                Avenue, 3rd
                Floor

            
	
              Brooklyn,
                NY 11219

            


    

    


    
      	
            	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, and the Buyers shall purchase from the Company, convertible debentures
      (collectively, the “Debentures”)
      in the
      aggregate principal amount of Two Million Five Hundred Thousand Dollars
      ($2,500,000), plus accrued interest, which are convertible into shares of the
      Company’s common stock, par value $.01 per share (the “Common
      Stock”),
      at
      the Buyers’ discretion. The Company has also issued to the Buyers warrants to
      purchase up to 42,000,000 shares of Common Stock, at the Buyers’ 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”)
                plus the shares of Common Stock to be issued to the Buyers upon conversion
                of accrued interest and liquidated damages into Common Stock (the
                “Interest
                Shares”).
                

            


    

     

    
      	
            	2.	
              Up
                to 42,000,000 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 American
      Stock Transfer & Trust Company (the “Transfer
      Agent”)
      to do
      the following:

     

    	1.  	
            Conversion
              Shares, Warrant Shares and Interest Shares.
              

          


     

    	a.  	
            Instructions
              Applicable to Transfer Agent.
              With respect to the Conversion Shares, Warrant Shares and the Interest
              Shares, the Transfer Agent shall issue the Conversion Shares, Warrant
              Shares and the Interest Shares to the 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 hereto 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 Company or on behalf of the Company by David
              Gonzalez, Esq. as escrow agent (the “Escrow
              Agent”).
              Upon receipt of a Conversion Notice or an Exercise Notice, the Transfer
              Agent shall, as soon as reasonably practical thereafter, (i) issue
              and
              surrender to a common carrier for overnight delivery to the address
              as
              specified in the Conversion Notice or the Exercise Notice, a certificate,
              registered in the name of the Buyer or its designees, for the number
              of
              shares of Common Stock to which the Buyer shall be entitled as set
              forth
              in the Conversion Notice or Exercise Notice, or (ii) provided the Transfer
              Agent is participating in The Depository Trust Company (“DTC”)
              Fast Automated Securities Transfer Program, upon the request of the
              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 that the Buyer causes its bank or broker to initiate
              the
              DWAC transaction, and further provided that a certificate representing
              such shares of Common Stock would not be required to bear a legend
              restricting transfer. 

          


     

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

          


     

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

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

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

          


     

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

          


     

    	2.  	
            All
              Shares.

          


     

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

          


     

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

          


     

    	c.  	
            The
              Company hereby confirms to the Transfer Agent and the 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.

          


     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    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.

     

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

     

    The
      Company acknowledges that the Buyers are relying on the representations and
      covenants made by the Company hereunder and are a material inducement to the
      Buyers purchasing convertible debentures under the Securities Purchase
      Agreement. The Company further acknowledges that without such representations
      and covenants of the Company made hereunder, the Buyers would not purchase
      the
      Debentures.

     

    The
      Company specifically acknowledges and agrees that in the event of a breach
      or
      threatened breach by a party hereto of any provision hereof, the 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 the Company,
      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.

     

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

     

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    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
              Dodge
	 	
              

              Name: 
                David Dodge

            
	 	
              Title: 
                CFO

            


    

    
      	 	 	 
	 
 	 
 	 
 
	 	 	/s/
              David Gonzalez
	 	
              

              David
                Gonzalez, Esq.

            
	 	 


    

    
      	American Stock Transfer &
              Trust Company	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	By:	/s/ Herbert
              J. Lemmer	 	 	 
	Name:	
              
Herbert
              J. Lemmer	 	 	
            
	Title: 	Vice
              President	 	 	 


    

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    Execution
      Copy

     

     

    SCHEDULE
      I

     

    SCHEDULE
      OF BUYERS 

     

    
      	
              Name

            	 	
              Signature

            	 	
              Address/Facsimile
                

              Number
                of Buyers

            
	 	 	 	 	 
	
              Cornell
                Capital Partners, LP

            	 	
              By: Yorkville
                Advisors, LLC

            	 	
              101
                Hudson Street - Suite 3700

            
	 	 	
              Its: General
                Partner

            	 	
              Jersey
                City, NJ 07303

            
	 	 	 	 	
              Facsimile:
                 (201)
                985-8266

            
	 	 	 	 	 
	 	 	
              By:
                ______________________________

            	 	 
	 	 	
              Name: Mark
                Angelo

            	 	 
	 	 	
              Its: Portfolio
                Manager

            	 	 
	 	 	 	 	 


    

    


    
      
         

      

      
        SCHEDULE
          I-1

        
          

        

      

      
         

      

    

    


    Execution
      Copy

     

     

    EXHIBIT
      I

     

    TO
      IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

     

    FORM
      OF NOTICE OF EFFECTIVENESS

    OF
      REGISTRATION STATEMENT

     

    


    _________,
      200_

    


    ____________

    


    Attention: 

    


    
      	RE:	
              NEOMEDIA
                TECHNOLOGIES, INC.

            


    

    


    Ladies
      and Gentlemen:

    


    We
      are
      counsel to Neomedia Technologies, Inc., (the “Company”),
      and
      have represented the Company in connection with that certain Securities Purchase
      Agreement, dated as of ________________ ____, 200_ (the “Securities
      Purchase Agreement”),
      entered into by and among the Company and the Buyers set forth on Schedule
      I
      attached thereto (collectively the “Buyers”)
      pursuant to which the Company has agreed to sell to the Buyers up to $5,000,000
      of secured convertible debentures, which shall be convertible into shares (the
      “Conversion
      Shares”)
      of the
      Company’s common stock, par value $.01 per share (the “Common
      Stock”),
      in
      accordance with the terms of the Securities Purchase Agreement. Pursuant to
      the
      Securities Purchase Agreement, the Company also has entered into a Registration
      Rights Agreement, dated as of ______________ ___, 200_, with the Buyers (the
      “Investor
      Registration Rights Agreement”)
      pursuant to which the Company agreed, among other things, to register the
      Conversion Shares under the Securities Act of 1933, as amended (the
“1933
      Act”).
      In
      connection with the Company’s obligations under the Securities Purchase
      Agreement and the Registration Rights Agreement, on _______, 200_, the Company
      filed a Registration Statement (File No. ___-_________) (the “Registration
      Statement”)
      with
      the Securities and Exchange Commission (the “SEC”)
      relating to the sale of the Conversion Shares.

     

    In
      connection with the foregoing, we advise the Transfer Agent that a member of
      the
      SEC’s staff has advised us by telephone that the SEC has entered an order
      declaring the Registration Statement effective under the 1933 Act at ____ P.M.
      on __________, 200_ and we have no knowledge that any stop order suspending
      its
      effectiveness has been issued or that any proceedings for that purpose are
      pending before, or threatened by, the SEC and the Conversion Shares are
      available for sale under the 1933 Act pursuant to the Registration
      Statement.

     

    
      
         

      

      
        EXHIBIT
          I-1

        
          

        

      

      
         

      

    

     

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

     

    
      	 	 	Very
              truly
              yours,
	 	 
	 
 	 
 	 
 
	 	 	 
	 	
            
	 	 


    

    


    
      
         

      

      
        EXHIBIT
          I-2

        
          

        

      

      
         

      

    

     

    Execution
      Copy


     


    EXHIBIT
      II

     

    TO
      IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

     

    FORM
      OF OPINION

     

    


    ________________
      200_

    


    VIA
      FACSIMILE AND REGULAR MAIL

    


    American
      Stock Transfer and Trust

    6201
      15th
      Avenue,
      3rd
      Floor

    Brooklyn,
      NY 11212

    


    
      	
            	RE:	
              NEOMEDIA
                TECHNOLOGIES, INC.

            


    

    


    Ladies
      and Gentlemen:

     

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

     

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

    
       

      
        	 	 	Very
                truly
                yours,
	 	 
	 
 	 
 	 
 
	 	 	 
	 	
              
	 	 


      

      


      
        
           

        

        
          EXHIBIT
            II-1

          
            

          

        

        
           

        

      

    

     

    
      Execution
        Copy



EXHIBIT
      A

     

    Prospectus

     

    
      
         

      

      
        EXHIBIT
          A-1