PATENT
      SECURITY AGREEMENT

     

    THIS
      PATENT SECURITY AGREEMENT (“Agreement”),
      is
      entered into and made effective as of July 29, 2008, by and between NEOMEDIA
      TECHNOLOGIES INC., a
      Delaware corporation with its principal place of business located at Two
      Concourse Parkway, Suite 500, Atlanta, GA 30328 (the “Parent”),
      and
      the each subsidiary of the Parent listed on Schedule I attached hereto (each
      a
“Subsidiary,”
and
      collectively and together with the Parent, the “Company”),
      in
      favor of the YA
      GLOBAL INVESTMENTS, L.P. (the
      “Secured
      Party”).

     

    WITNESETH:

     

    WHEREAS,
      the
      Secured Party is the holder of certain secured convertible debentures and notes,
      and other evidence of indebtedness issued by the Parent to the Secured Party
      as
      set forth on Schedule A attached hereto (as may be amended, supplemented and
      restated from time to time, the “Original
      Debentures”);

     

    WHEREAS,
      in
      connection with the Securities Purchase Agreement by and among the Parent and
      the Secured Party of even date herewith (the “Securities
      Purchase Agreement”),
      the
      Parent has agreed, upon the terms and subject to the conditions of the
      Securities Purchase Agreement, to issue to the Secured Party (i) an aggregate
      original principal amount of $8,650,000 of senior secured convertible debentures
      (the “Convertible
      Debentures”),
      which
      shall be convertible into shares of the Company’s Common Stock (the
“Conversion
      Shares”);
      and
      (ii) warrants (the “Warrants”)
      to be
      exercisable to acquire additional shares of Common Stock (the “Warrants
      Shares”)
      initially in that number of shares of Common Stock set forth in the Securities
      Purchase Agreement;

     

    WHEREAS,
      the
      Secured Party and the Parent are parties to the following (collectively, the
      “Prior
      Debt Documents”):
      the
      Original Debentures, the Security Agreement dated August 24, 2007 (the
“Prior
      Security Agreement”)
      and
      any other existing security agreements, guaranty agreements, pledge agreements,
      credit agreement or other facility, mortgage, other debenture agreements or
      instruments, by and between the Secured Party and the Parent, under which there
      may be issued, or by which there may be secured or evidenced any indebtedness
      for borrowed money or evidencing any outstanding obligation of the Parent to
      the
      Secured Party, and any other existing documents executed in connection with
      any
      of the foregoing; and

     

    WHEREAS,
      it
      is a
      condition precedent to the Secured Party purchasing the Convertible Debentures
      and Warrants pursuant to the Securities Purchase Agreement that each Company
      shall have executed and delivered to the Secured Party this Agreement providing
      for the grant to the Secured Party of a security interest in all the Patent
      Collateral (as defined below) of each Company to secure all of the Parent's
      Obligations (as defined below) under the Securities Purchase Agreement, the
      Security Agreement dated July 29, 2008 (the “Security
      Agreement”
and
      collectively along with the Prior Security Agreement, the “Security
      Document”)
      this
      Agreement, the Convertible Debentures, the Warrants, the Prior Debt Documents,
      any other mortgages, pledges, or other collateral documents, and any amendment,
      amendment and restatement, modification or supplement to any of the foregoing
      (collectively, the “Transaction
      Documents”); 


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    WHEREAS,
      the
      Parent has agreed to provide the Secured Party a general security interest
      in
      Pledged Property (as this term is defined in the Security Documents) and to
      enter into this Agreement in addition to, and not in limitation of, the Security
      Documents for the purpose of recording the security interest of the Secured
      Party in the Patent Collateral with the United States Patent and Trade Marks
      Office;

     

    WHEREAS,
      each
      Company has duly authorized the execution, delivery and performance of this
      Agreement;

     

    NOW
      THEREFORE,
      for
      good and valuable consideration, the receipt of which is hereby acknowledged,
      the Company agrees as follows:

     

    SECTION
      1. Definitions.
      Unless
      otherwise defined herein otherwise requires, terms used in this Agreement,
      including its preamble and recitals, have the meanings provided in the
      Securities Purchase Agreement. 

     

    (a) “Obligations”
shall
      have the meaning assigned to it in the Security Agreement.

     

    SECTION
      2. Grant
      of Security Interest.
      For good
      and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, to secure the payment and performance of all of the Obligations
      of
      the Parent, the Parent does hereby mortgage, pledge and hypothecate to the
      Secured Party and grant to the Secured Party a security interest in all of
      the
      following property (the “Patent
      Collateral”),
      now
      owned and existing:

     

    (a) all
      letters patent and applications for letters patent throughout the world,
      including all patent applications in preparation for filing anywhere in the
      world and including each patent and patent application referred to in
Schedule
      B
      hereto;

     

    (b) all
      reissues, divisions, continuations, continuations-in-part, extensions, renewals
      and reexaminations of any of the items described in clause (a);

     

    (c) all
      patent licenses and other agreements providing the Company with the right to
      use
      any of the items of the type referred to in clauses (a) and (b), including
      each
      patent license referred to in Schedule
      B
      hereto;

     

    (d) the
      right
      to sue third parties for past, present or future infringements of any Patent
      Collateral described in clauses (a) and (b) and, to the extent applicable,
      clause (c); and

     

    (e) all
      proceeds of, and rights associated with, the foregoing, (including license
      royalties and proceeds of infringement suits), and all rights corresponding
      thereto throughout the world.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    SECTION
      3. Security
      Agreement.
      This
      Agreement has been executed and delivered by the Parent for the purpose of
      recording the security interest of the Secured Party in the Patent Collateral
      relating to patents referred to in Schedule
      A
      with the
      United States Patent and Trade Marks Office, to the extent it may be so
      registered therein. The security interest granted hereby has been granted as
      a
      supplement to, and not in limitation of, the security interest granted to the
      Secured Party under the Security Documents. The Security Documents (and all
      rights and remedies of the Secured Party thereunder) shall remain in full force
      and effect in accordance with their terms.

     

    SECTION
      4. Release
      of Security Interest.
      Upon
      payment in full of all Obligations the Secured Party shall, at the Parent’s
      expense, execute and deliver to the Company all instruments and other documents
      as may be necessary or proper to release the lien on any security interest
      in
      the Patent Collateral which has been granted hereunder.

     

    SECTION
      5. Acknowledgement.
      The
      Parent does hereby further acknowledge and affirm that the rights and remedies
      of the Secured Party with respect to the security interest in the Patent
      Collateral granted hereby are more fully set forth in the Security Documents,
      the terms and provisions of which (including the remedies provided for therein)
      are incorporated by references herein as if fully set forth herein.

     

    SECTION
      6. Securities
      Purchase Agreement.
      Notwithstanding any other term or provision hereof, in the event that any
      provisions hereof contradict and are incapable of being construed in conjunction
      with the provisions of the Securities Purchase Agreement or the Security
      Documents, the provisions of the Securities Purchase Agreement shall take
      precedence over those contained herein and, in particular, if any act of a
      Company is expressly permitted under the Securities Purchase Agreement or
      Security Documents but is prohibited hereunder, any such act shall be permitted
      hereunder and any encumbrance expressly permitted under the Securities Purchase
      Agreement or Security Documents to exist or to remain outstanding shall be
      permitted hereunder and thereunder. This instrument, document or agreement
      may
      be sold, assigned or transferred by the Agent in accordance with the terms
      of
      the Securities Purchase Agreement.

     

    SECTION
      7. Counterparts.
      This
      Agreement may be executed by the parties hereto in several counterparts, each
      of
      which shall be deemed to be an original and all of which shall constitute
      together but one and the same agreement.

     

    SECTION
      8. Additional
      Subsidiaries.
      The
      Parent agrees work with the Secured Party and any not yet named Subsidiaries
      to
      have this or a similar patent security agreement apply to all Subsidiaries
      of
      the Parent, to the extent legally possible.

     

    [Remainder
      of Page Intentionally Left Blank]


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


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

     

    
      	 	
              NeoMedia
                Technologies Inc.

            
	 	 
	 	
              By: /s/
                J. Scott Womble

            
	 	
              Name: J.
                Scott Womble

            
	 	
              Title: Chief
                Financial Officer

            


    

    


    STATE
      OF ____________________ )
       )
        SS:

      COUNTY
        OF __________________ )

    

    


    BEFORE
      ME,
      a Notary
      Public in and for said County and State, personally appeared the above-named
      _______________________ who acknowledged that he/she did sign the foregoing
      agreement and that the same is his/her free act and deed.

     

    IN
      TESTIMONY WHEREOF,
      I have
      hereunto set my hand an official seal at __________________,
      ____________________, this ___ day of __________, 2008.

     

    
      	 	                                                                                                       
	 	
              Notary
                Public 

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


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

    


    
      	 	
              SECURED
                PARTY:

            
	 	
              YA
                GLOBAL INVESTMENTS, L.P.

            
	 	 
	 	
              By:

            	
              Yorkville
                Advisors, LLC

            
	 	
              Its:

            	
              Investment
                Manager

            
	 	 
	 	
              By: /s/
                Mark Angelo

            
	 	
              Name:
                Mark Angelo

            
	 	
              Title:
                Portfolio Manager

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    SCHEDULE
      I

    


    LEGAL
      NAMES; ORGANIZATIONAL IDENTIFICATION NUMBERS; STATES OF
      ORGANIZATION

     

    
      	
               

              Company’s
                Name

            	 	
              State
                of

              Organization

            	 	
              Employer

              ID

            	 	
              Organizational

              ID

            	 
	
              NeoMedia
                Technologies Inc.

            	 	
              Delaware

            	 	
               

            	 	
               

            	 


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    SCHEDULE
      A

    


    ORIGINAL
      DEBENTURES

    


    
      	
              August
                24, 2006

            	 	
              $

            	
              5,000,000

            	 
	
              December
                29, 2006

            	 	 	
              2,500,000

            	 
	
              March
                27, 2007

            	 	 	
              7,458,651

            	 
	
              August
                24, 2007

            	 	 	
              1,775,000

            	 
	
              April
                10, 2008

            	 	 	
              390,000

            	 
	
              May
                16, 2008

            	 	 	
              500,000

            	 
	
              May
                29, 2008

            	 	 	
              790,000

            	 
	
              July
                10, 2008

            	 	 	
              137,750

            	 


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    SCHEDULE
      B

    


    US
      PATENTS AND APPLICATIONS