Unassociated Document


    IRREVOCABLE
      TRANSFER AGENT INSTRUCTIONS

    


    July
      29,
      2008

    


    
      	
              WorldWide
                Stock Transfer , LLC

            
	
              433
                Hackensack Avenue, Level L

            
	
              Hackensack,
                New Jersey 07601

            


    

    


    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 up to $8,650,000, 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 450,000,000 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 450,000,000 shares of Common Stock to be issued to the Buyers
                upon
                exercise of the Warrant (the “Warrant
                Shares”).

            


    

     

    This
      letter shall serve as our irrevocable authorization and direction to WorldWide
      Stock Transfer, LLC (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.”


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              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.

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    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.

    


    Transfer
      Agent Binding Disclaimer:
      In
      consideration for the Transfer Agent agreeing and attesting to all terms in
      the
      above referenced Irrevocable Transfer Agent Instructions, in particular any
      kind
      of lawsuit and or action that may arise from the Buyer’s instructing the
      Transfer Agent to issue shares based on the legality of the Securities Purchase
      Aagreement whereas the Company is denying the request in full or partially
      for
      whatever reason, the Company, Buyers and any other third party involved agree
      for ourselves, our successors, legal representatives and assigns, at all times
      to defend, indemnify and save the Transfer Agent, their successors and assigns,
      free and harmless from and against any and all claims, from actions, suits,
      whether groundless or otherwise, and from and against any and all liabilities,
      taxes, losses, damages, costs, charges, counsel fees, and other expenses of
      every nature and character that arises from this action.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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:
                  J.
                  Scott
                  Womble                            
                  

              
	
              	
                Name:

              	
                J.
                  Scott Womble

              
	 	
                Title:

              	
                Chief
                  Financial Officer

              
	 	 
	 	
                BUYER:

              
	 	
                YA
                  Global Investments, L.P.

              
	 	 
	 	
                By:

              	
                Yorkville
                  Advisors, LLC

              
	 	
                Its:

              	
                Investment
                  Manager

              
	 	 
	 	
                By: /s/
                  Mark
                  Angelo                      
                  

              
	 	
                Name:

              	
                Mark
                  Angelo

              
	 	
                Title:

              	
                Portfolio
                  Manager

              
	 	 
	 	
                ESCROW
                  AGENT

              
	 	 
	 	
                By:
                  /s/ David Gonzalez, Esq.

              
	 	
                David
                  Gonzalez, Esq.

              


      

    

    


    WorldWide
      Stock Transfer, LLC 

    


    
      	
              By: /s/
                Authorized Person

            
	
              Name: Authorized
                Person

            
	
              Title:
                Representative

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    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 $8,650,000
      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. In connection
      with the Company’s obligations under the Securities Purchase 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.

     

    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
      contemplated by the Securities Purchase Agreement. 

     

    Very
      truly yours,

     

    EXHIBIT
      I-


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBIT
      II

     

    TO
      IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

     

    FORM
      OF OPINION

     

    ________________
      200_

    


    VIA
      FACSIMILE AND REGULAR MAIL

    


    WorldWide
      Stock Transfer, LLC

    885
      Queen
      Anne Road

    Teaneck,
      NJ 07666

    


    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



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBIT
      A

     

    Prospectus

     

    EXHIBIT
      A