Unassociated Document


    ESCROW
      AGREEMENT

     

    This
      ESCROW AGREEMENT (the “Agreement”)
      is
      made and entered into on July 29, 2008 by and among NEOMEDIA TECHNOLOGIES INC.
      (the "Company"),
      YA
      GLOBAL INVESTMENTS, L.P., (the “Buyer”),
      YORKVILLE ADVISORS, LLC (“Investment
      Manager”),
      and
      DAVID GONZALEZ, ESQ., as escrow agent (the “Escrow
      Agent”).
      The
      Company, the Buyer, and Yorkville may be referred to individually as a “Party”
or collectively as the “Parties.” All capitalized terms used herein but not
      defined herein shall have the meanings ascribed to them in that certain
      Securities Purchase Agreement dated July 29, 2008 entered into by and between
      the Company and the Buyer (the “Securities Purchase Agreement”).

     

    R
      E C I T A L S

     

    WHEREAS,
      the
      Company and the Buyer have entered into a Securities Purchase Agreement,
      pursuant to which the Company shall issue and sell to the Buyer, and the Buyer
      shall purchase certain Securities;

     

    WHEREAS,
      at all
      times while the Buyer holds any of the Securities, the Investment Manager shall
      perform monitoring and managing services for the Buyer in connection with the
      Buyer’s purchase and investment in the Securities and the Buyer’s rights and
      obligations under the Securities Purchase Agreement and other related documents
      and agreements, and during such time, the Investment Manager shall be paid
      on a
      monthly basis, a fee from the Buyer for services performed;

     

    WHEREAS,
      pursuant to the Securities Purchase Agreement, the Parties desire that the
      Monitoring Fees (as defined in the Securities Purchase Agreement) be deposited
      into a segregated escrow account to be held by the Escrow Agent and disbursed
      to
      the Investment Manager on a monthly basis as set forth in this Agreement as
      it
      performs its monitoring and managing services for the Buyer;

     

    WHEREAS,
      Escrow
      Agent has agreed to accept, hold, and disburse the Monitoring Fees deposited
      with it hereunder in accordance with the terms of this Agreement.

    


    A
      G R E E M E N T

     

    NOW
      THEREFORE,
      for and
      in consideration of the foregoing, the mutual covenants and agreements
      hereinafter set forth, and other good and valuable consideration, the receipt
      and sufficiency of which is hereby acknowledged, the Parties hereby agree as
      follows:

     

    1. Appointment
      of Escrow Agent.
      The
      Company, the Buyer, and the Investment Manager hereby mutually appoint and
      designate the Escrow Agent to receive, hold and release, as escrow agent, the
      Escrow Funds (as defined below) and Escrow Agent hereby accepts such appointment
      and designation, all in accordance with the terms hereof. 

     

    2. Escrow
      Delivery.
      

     

    2.1.
      Escrow
      Funds.
      Escrow
      Agent is hereby authorized and directed to use its bank account as an escrow
      account for purposes of this Agreement. The Company shall deposit into the
      Escrow Account all of the Monitoring Fees in accordance with the terms and
      conditions of Section 4(g)(ii) of the Securities Purchase Agreement (such
      Monitoring Fee funds actually deposited into the Escrow Account shall be
      referred to as the "Escrow
      Funds").
      Such
      Escrow Funds shall be wired to the following account in accordance with the
      wire
      instructions below and shall be held by Escrow Agent and released only in
      accordance with the terms of this Agreement.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              Bank:

            	
              Wachovia,
                N.A. of New Jersey

            
	
              Routing
                #:

            	
              031201467

            
	
              Account
                #:

            	
              2000014931121

            
	
              Name
                on Account:

            	
              David
                Gonzalez Attorney Trust Account

            
	
              Name
                on Sub-Account:

            	
              NeoMedia
                Technologies Inc./Monitoring Fee

            


    

     

    3. Conditions
      of Escrow.

     

    3.1.
      The
      Escrow Deposit.
      Escrow
      Agent shall hold the Escrow Funds until all funds have been disbursed in
      accordance with this Agreement (the “Term”)
      for
      the benefit of the Buyer. The Escrow Funds shall be deposited into the Escrow
      Account by the Company and the Buyer as set forth in the Securities Purchase
      Agreement. Upon each deposit into the Escrow Account, the Buyer shall provide
      to
      the Escrow Agent a completed Monitoring Fee Schedule in the form attached hereto
      as Exhibit A (a “Monitoring
      Fee Schedule”)
      with
      respect to such deposit into escrow setting forth the date and amount of such
      deposit and the schedule of disbursements to be made from escrow. 

     

    3.2.
      Release
      of Escrow Funds.
      The
      Escrow Agent shall disburse the Escrow Funds in accordance with the following
      procedures: 

     

    (i) The
      Escrow Agent shall disburse the designated portion of the Escrow Funds to the
      Investment Manager in the amounts and at the times set forth on the Monitoring
      Fee Schedules promptly upon receipt from the Buyer of a signed written
      instruction directing the Escrow Agent to make such disbursement. In disbursing
      Escrow Funds, the Escrow Agent is authorized to rely upon such written
      instruction from the Buyer and may accept any signatory from the Buyer that
      Escrow Agent has on file. 

     

    (ii)
       In
      the
      event that the Securities are Fully Retired (as defined in the Securities
      Purchase Agreement) prior to the full disbursement of all the Escrow Funds,
      the
      Buyer and the Company shall execute a joint written instruction directing the
      Escrow Agent to disburse the remaining Escrow Funds to the Company, or to such
      other Person as set forth in such joint written direction, provided however,
      the
      Buyer may instruct, by delivery of a signed written instruction, which the
      Buyer, in its sole determination may provide, the Escrow Agent to disburse
      all
      or a portion of the remaining Escrow Funds to the Buyer, which amount shall
      be
      credited to any fees, costs, expenses, or other amounts owed to the Buyer from
      the Company pursuant to the Securities, the Securities Purchase Agreement,
      or
      any related documents after the Securities are Fully Retired, so long as the
      Buyer first provides the Company with advanced written notice of such amounts
      owed to it and provides the Company with five business days to directly pay
      such
      amounts to the Buyer. 

     

    3.3.
      Conflict.
      If a
      controversy arises between the Parties concerning the release of the Escrow
      Funds hereunder, they shall notify Escrow Agent. In that event (or, in the
      absence of such notification, if in the good faith judgment of Escrow Agent
      such
      controversy exists), Escrow Agent shall not be required to resolve such
      controversy or take an action but shall be entitled to await resolution of
      the
      controversy by joint written instructions from the Parties or may immediately
      return the Escrow Funds to the respective Parties, in which event Escrow Agent
      shall have no further liability hereunder. If a suit is commenced against Escrow
      Agent, it may answer by way of interpleader and name the Parties as additional
      parties to such action, and Escrow Agent may tender the Escrow Funds into such
      court for determination of the respective rights, titles and interests of the
      Parties. Upon such tender, Escrow Agent shall be entitled to receive from the
      Parties its reasonable attorneys’ fees and expenses incurred in connection with
      said interpleader action or in any related action or suit. If and when Escrow
      Agent shall so interplead such Parties, or either of them, and deliver the
      Escrow Funds to the clerk of such court, all of its duties hereunder shall
      cease, and it shall have no further obligation in this regard.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    3.4.
      Cause
      of Action. The
      Company agrees and acknowledges that in no event shall it have any cause of
      action, standing, claim, or any other rights against the Buyer or the Investment
      Manager with respect written instructions provided by the Buyer or disbursements
      made to the Investment Manager in accordance with Section 3.2. hereunder.


     

    4. Escrow
      Agent.
      

     

    4.1.
      Liability
      of Escrow Agent.
      The
      Parties acknowledge, understand and agree that Escrow Agent has accepted Escrow
      Agent’s appointment under this Agreement and shall perform and satisfy Escrow
      Agent’s duties, liabilities and obligations under this Agreement only as an
      accommodation to the Parties. The Parties, jointly and severally, hereby
      indemnify Escrow Agent and each representative of Escrow Agent and hereby agree
      to hold Escrow Agent and each such representative free and harmless from and
      to
      defend and protect Escrow Agent and such representative against any claim made,
      asserted or threatened against Escrow Agent or such representative (including
      any such claim made, asserted or threatened by the Parties), and any claim
      incurred by Escrow Agent or such representative, excluding, however, any claim
      arising from the gross negligence, willful misconduct, criminal conduct or
      intentionally tortuous conduct of Escrow Agent or such representative.


     

    4.2.
      Proceeding.
      Escrow
      Agent, in Escrow Agent’s sole discretion, may commence any judicial proceeding
      necessary or appropriate to determining the respective rights of the Parties
      under this Agreement or to interpreting or enforcing any term, condition or
      other provision of this Agreement. The Parties shall jointly and severally
      be
      liable for any and all costs and expenses (including attorneys fees, expert
      witness fees, accounting fees and related costs) incurred by Escrow Agent in
      connection with such proceeding.

     

    5. Termination.This
      Agreement shall be terminated upon the occurrence of any one of the following:
      (i) the release of all the Escrow Funds in accordance with the terms and
      conditions of Section 3
      hereof;
      or (ii) otherwise by written mutual consent signed by the Parties.

     

    6. Notice.
      All
      notices, demands, requests, or other communications which may be or are required
      to be given, served or sent by any of the Parties or the Escrow Agent to any
      other party pursuant to this Agreement shall be in writing and shall be hand
      delivered (including delivery by courier), sent by facsimile, sent by a
      nationally recognized overnight delivery service, or mailed by first-class,
      registered or certified mail, return receipt requested, postage prepaid,
      addressed to the parties last known address or such other address as the
      addressee may indicate by written notice to the other Parties or the Escrow
      Agent. Each notice, demand, request or communication that is given or made
      in
      the manner described above shall be deemed sufficiently given or made for all
      purposes at such time as it is delivered to the addressee (with the return
      receipt, the delivery receipt or the affidavit of messenger being deemed
      conclusive but not exclusive evidence of such delivery) or at such time as
      delivery is refused by the addressee upon presentation.

     

    7. Benefit
      and Assignment.
      None of
      the Parties may assign this Agreement without the prior written consent of
      all
      Parties and the Escrow Agent. This Agreement shall be binding upon and shall
      inure to the benefit of the parties hereto and their respective successors
      and
      assigns as permitted hereunder. No person or entity other than the Parties
      and
      their respective successors and assigns is or shall be entitled to bring any
      action to enforce any provision in this Agreement against any of the Parties,
      and the covenants and agreements set forth in this Agreement shall be solely
      for
      the benefit of, and shall be enforceable only by, the Parties or their
      respective successors and assigns.

     

    8. Entire
      Agreement; Amendment.
      This
      Agreement, along with the Purchase Agreement and any other agreement executed
      on
      the date hereof between the Parties, contains the entire agreement among the
      parties with respect to the subject matter hereof and supersedes all prior
      oral
      or written agreements, commitments or understandings with respect to such
      matters. This Agreement may not be changed orally, but only by an instrument
      in
      writing signed by the Party against whom enforcement of any waiver, change,
      modification, extension or discharge is sought.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    9. Headings.
      The
      headings of the sections and subsections contained in this Agreement are
      inserted for convenience only and do not form a part or affect the meaning,
      construction or scope thereof.

     

    10. Governing
      Law; Venue.
      This
      Agreement shall be governed and constructed under and in accordance with the
      laws of the State of New Jersey (but not including the conflicts of laws and
      rules thereof). For purposes of any action or proceeding involving this
      Agreement each of the parties to this Agreement expressly submits to the
      jurisdiction of the federal and state courts located in the State of New Jersey
      and consents to the service of any process or paper by registered mail or by
      personal service within or without the State of New Jersey in accordance with
      applicable law, provided a reasonable time for appearance is allowed. Each
      Party
      hereby acknowledges that Hudson County, New Jersey is the proper venue for
      any
      action brought hereunder.

     

    11. Signature
      in Counterparts.
      This
      Agreement may be executed in separate counterparts, none of which need contain
      the signature of all parties, each of which shall be deemed to be an original
      and all of which taken together constitute one and the same instrument. It
      shall
      not be necessary in making proof of this Agreement to produce or account for
      more than the number of counterparts containing the respective signatures of,
      or
      on behalf of, all of the parties hereto.

     

    12. Attorney’s
      Fees.
      Should
      any action be commenced between any of the Parties concerning the matters set
      forth in this Agreement or the right and duties of any other Party in relation
      thereto, the prevailing Party in such action shall be entitled, in addition
      to
      such other relief as may be granted, to a reasonable sum as and for its
      attorney's fees and costs; except that Escrow Agent’s attorney’s fees and costs
      incurred in connection with disputes arising hereunder between Company, the
      Buyer, and the Investment Manager shall be paid by Company, the Buyer and the
      Investment Manager as otherwise provided herein.

     

    13. Conflict
      Waiver.
      The
      Company hereby acknowledge that the Escrow Agent is general counsel to the
      Buyer, a partner of the Investment Manager and counsel to both the Buyer and
      the
      Investment Manager in connection with the transactions contemplated and referred
      herein. The Company agrees 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 Buyer and the Investment Manager and
      the
      Company will not seek to disqualify such counsel. The Company waives any right
      to seek the disqualification of Escrow Agent to act as legal counsel to the
      Buyer or the Investment Manager as a result of Escrow Agent’s duties hereunder.
      The Buyer and the Investment Manager hereby consents to Escrow Agent acting
      as
      escrow agent pursuant to the terms of this Agreement and hereby acknowledge
      that
      in so acting, Escrow Agent shall be bound to act in accordance with this
      Agreement and not in the best interest of the Buyer or the Investment Manager
      and may be required to enforce its rights under this Agreement against the
      Buyer
      or the Investment Manager. The Buyer or the Investment Manager further
      acknowledges and agrees that all communication delivered to Escrow Agent in
      furtherance of this Agreement or Escrow Agent’s duties hereunder may not be kept
      confidential by Escrow Agent and may not be protected by the attorney-client
      privilege. The Buyer or the Investment Manager hereby waive the conflict of
      interest and any potential conflict of interest that may arise as a result
      of
      Escrow Agent’s performance of its duties or exercise of its rights under this
      Agreement. 

     

    [Remainder
      of Page Intentionally Left Blank]


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, each of the parties has caused this Agreement to be duly
      executed and delivered in its name and on its behalf, all as of the date and
      year first above written.

     

    
      	 	
              “Company”

            
	 	 
	 	
              NeoMedia
                Technologies Inc. 

            
	 	 
	 	
              By:

            	/s/
              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

            
	 	 
	 	
              “Investment
                Manager”

            
	 	 
	 	
              Yorkville
                Advisors, LLC

            
	 	 
	 	
              By:

            	/s/
              Mark Angelo
	 	
              Name:
                Mark Angelo

            
	 	
              Title:
                Portfolio Manager

            
	 	 
	 	
              “Escrow
                Agent”

            
	 	 
	 	
              By:

            	/s/
              David Gonzalez, Esq.
	 	
              Name:
                David Gonzalez, Esq.

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBIT
      A

    


    MONITORING
      FEE SCHEDULE 

    RELATING
      TO NEOMEDIA TECHNOLOGIES INC.

    


    
      	To:	
              Escrow
                Agent

            


    

    
      	Date:	
              July
                29, 2008

            


    

    


    In
      accordance with the Agreement, upon each deposit into the Escrow Account, the
      Buyer shall provide to the Escrow Agent a completed Monitoring Fee Schedule
      with
      respect to such deposit into escrow setting forth the date and amount of such
      deposit and the Schedule of Disbursements to be made to the Investment Manager
      from the Escrow Account. Below please find the Monitoring Fee Schedule in
      connection with the Monitoring Fee to be deposited into the Escrow Account
      pursuant to a Closing under the Securities Purchase Agreement: 

    


    Part
      I. Deposits of Monitoring Fee Into Escrow Account

    


    Deposit
      Into Escrow Account $200,000  Date
      of Deposit July
      29, 2008 

    


    Part
      II. Schedule of Disbursements to Investment Manager From Escrow
      Account

    


    
      	
              Disbursement
                Date

            	 	
              Disbursement Amount

            	 	
              Remaining Escrow

              Funds

            	 
	
              Initial
                Deposit

            	 	 	 	 	
              $

            	
              200,000

            	 
	
              August
                1, 2008

            	 	
              $

            	
              100,000

            	 	
              $

            	
              100,000

            	 
	
              February
                1, 2009

            	 	
              $

            	
              16,667

            	 	
              $

            	
              83,333

            	 
	
              March
                1, 2009

            	 	
              $

            	
              16,667

            	 	
              $

            	
              66,667

            	 
	
              April
                1, 2009

            	 	
              $

            	
              16,667

            	 	
              $

            	
              50,000

            	 
	
              May
                1, 2009

            	 	
              $

            	
              16,667

            	 	
              $

            	
              33,333

            	 
	
              June
                1, 2009

            	 	
              $

            	
              16,667

            	 	
              $

            	
              16,667

            	 
	
              July
                1, 2009

            	 	
              $

            	
              16,667

            	 	
              $

            	
              0