Document:

Exhibit 10.7

 

IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

 

March 11, 2011

	
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 Agreement (the “Agreement”) of even date herewith by and between Neomedia Technologies, Inc, a Delaware corporation (the “Company”), and YA Global Investments, L.P. (the “Buyer”).  Pursuant to the Agreement, the Company shall sell to the Buyer, and the Buyer shall purchase from the Company, convertible debentures (the “Debenture”) in the aggregate principal amount of $450,000.00, plus accrued interest,
which are convertible into shares of the Company’s common stock, par value $.001 per share (the “Common Stock”), at the Buyer’s discretion.  The Company has also issued to the Buyer warrants to purchase up to 1,000,000 shares of Common Stock, at the Buyer’s 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 Buyer upon conversion of the Debenture (“Conversion Shares”) plus the shares of Common Stock to be issued to the Buyer upon conversion of accrued interest into Common Stock (the “Interest Shares”).

 

	
  

	
2.

	
Up to 1,000,000 shares of Common Stock to be issued to the Buyer 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 Buyer 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 Debenture, 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 Buyer, credit such aggregate number of shares of Common Stock to which the Buyer shall be entitled to the Buyer’s or its 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 Buyer 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 Buyer 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 Buyer has
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 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 Buyer 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 Buyer, a partner of the general partner of the Buyer and counsel to the Buyer 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 Buyer and neither the Company nor the Transfer Agent will seek to disqualify such counsel.

 

	
  

	
4.

	
Company Acknowledgments.

 

	
  

	
a.

	
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 Buyer.

 

	
  

	
b.

	
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.

 

	
  

	
c.

	
The Company acknowledges that the Buyer is relying on the representations and covenants made by the Company hereunder and are a material inducement to the Buyer purchasing the Debenture pursuant to the Agreement.  The Company further acknowledges that without such representations and covenants of the Company made hereunder, the Buyer would not purchase the Debenture.

 

	
  

	
d.

	
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 Buyer 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 Buyer 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.

 

  

  

 

 

	
  

	
5.

	
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 Agreement whereas the Company is denying the request in full or partially for whatever reason, the Company, Buyer 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:

	
/s/ Michael W. Zima

	  	
Name:

	
      Michael W. Zima

	  	
Title:

	
      CFO

	  	  
	  	
BUYER:

	 	 
	  	
YA Global Investments, L.P.

	  	  
	  	
By:

	
 Yorkville Advisors, LLC

	  	
Its:

	
 Investment Manager

	  	  
	  	
By:

	
/s/ Gerald Eicke

	  	
Name:

	
 Gerald Eicke

	  	
Title:

	
 Managing Member

	  	  
	  	
ESCROW AGENT

	  	  
	  	
By:

	
/s/ David Gonzalez

	  	
David Gonzalez, Esq.

	
WorldWide Stock Transfer, LLC

	  
	  	  
	
By:

	
/s/ Yonah J. Kopstick

	  

	
Name

	
Yonah  Kopstick

	  
	
Title:

	
SVPFLOOR PLAN FINANCE AGREEMENT

This Floor Plan Finance Agreement (“Agreement”) is between AVANTAIR, INC., 4311 General Howard Drive, Clearwater, FL  33762, Telephone: 727-539-0071, Fax: 727-539-7007, hereinafter referred to as the "Borrower," and MIDSOUTH SERVICES, INC., or assigns, 611 S. Fort Harrison Ave., Suite 388, Clearwater, FL 33756, Telephone:  727-461-0635, Fax: 727-461-0734, hereinafter referred to as the "Lender."  Escrow agent will be INSURED AIRCRAFT TITLE SERVICE, 4848 S.W. 36th Street, Oklahoma City, OK  73179, Telephone:  800-654-4882, Fax:  405-681-9299, hereinafter referred to as the "Escrow Agent."

WHEREAS, the Borrower has certain Piaggio P-180 Aircraft beginning with Unit #50 with Serial Number 1207 and U.S. Registration Number N195SL (“Aircraft”) that they elect to finance pursuant to this Agreement beginning on or about March 16, 2011 (“Initial Delivery”).  The Net Purchase Price for the Aircraft is attached as “Attachment A”;

WHEREAS, Lender shall loan Borrower the Net Purchase Price on the actual delivery date of each Aircraft listed on Attachment A (“Delivery Date”) pursuant to the terms and conditions of this Agreement.

Now therefore, in consideration of the terms and conditions herein contained, the parties agree as follows:

	
  

	
1.

	
Term.  The term of this Agreement shall commence on the actual date of the Initial Delivery for N195SL and shall terminate automatically twelve (12) months thereafter or on the date that the Net Purchase Price is paid to for the Aircraft to Lender pursuant to this Agreement, whichever is later (“Term”).

    

	
  

	
2.

	
Purchase Price.  On or before each Delivery Date, Lender agrees to pay an amount up to the Net Purchase Price as specified on Attachment A for the applicable Aircraft. Borrower shall provide Lender with an invoice from Piaggio America indicating the balance due for the purchase of the Aircraft.  Lender shall have the option to wire the Net Purchase Price directly to Piaggio America on the Delivery Date in lieu of using the Escrow Account, which shall be determined at their sole discretion.  Borrower shall notify Lender at least ten (10) days prior to the anticipated Delivery Date of their intention to have Lender loan the Net Purchase Price for an Aircraft. In addition, it is agreed between the parties that Lender shall
only be required to loan the Net Purchase Price for one Aircraft at a time pursuant to this Floor Plan Finance Agreement.  However, Lender agrees to loan the Net Purchase Price for each Aircraft listed on Attachment A assuming that Borrower relinquishes the debt for the prior Aircraft prior to Lender loaning the Net Purchase Price for the subsequent Aircraft.

    

	
  

	
3.

	
Transaction Fee.   As consideration for Lender providing the Net Purchase Price for the Aircraft during the Term of this Agreement, Borrower agrees to pay Lender a monthly fee in the amount of Sixty Five Thousand U.S. Dollars ($65,000.00) (“Transaction Fee”).  The initial Transaction Fee shall be due in arrears one month after the Delivery Date of N195SL, which shall be on or around March 16, 2011.  After the Delivery Date of N195SL, the payment of the Transaction Fee shall be due each month thereafter for the remainder of the Term; however, in the event that during the Term Borrower does not have an aircraft financed by Lender pursuant to this Agreement, the Transaction Fee shall be waived for a maximum
of three (3) months for the corresponding months when an aircraft is not financed.    Borrower shall remit the Transaction Fee to Lender via wire transfer.

   

  

Page 1 of 3

  

	
  

	
4.

	
Insurance.  Borrower shall maintain adequate insurance on the Aircraft and provide Lender and Lender’s financial institution with a Certificate of Insurance listing Lender’s financial institution as lien holder and Lender as an additional insured.

	
  

	
5.

	
Title and Liens.  Borrower agrees that on the Actual Delivery Date, Lender shall be permitted to file a lien on the Aircraft securing the amount of the Net Purchase Price paid to manufacturer.  On the Actual Delivery Date, Borrower and Lender may agree to allow title to transfer from Piaggio America to MidSouth Services, Inc, instead of from Piaggio America to Avantair, Inc.  All liens imposed on the Aircraft by Lender must be removed on or before the date that Borrower repays the Net Purchase Price to Lender so that Borrower has free and clear title to the Aircraft, unless Borrower is in default by not paying the Transaction Fee after given a ten (10) day period to cure the default as set forth in Section 7 below.

	
  

	
6.

	
Release of Liens.  Prior to the date that Borrower repays the Net Purchase Price to Lender (“Avantair Actual Delivery Date”), Lender will place any required Release(s) of Lien with Escrow Agent.  Lender shall be notified at least seven (7) days prior to the Avantair Actual Delivery Date.  Lender hereby agrees to fully cooperate with Borrower and Escrow Agent to effect, amend, discharge and/or consent to registrations with respect to the Aircraft on the International Registry for the benefit of Borrower and/or their fractional owners.  Lender also shall provide a letter of instruction to the Escrow Agent or any other person designated by Lender granting the person authority to release any and all liens
on the Aircraft that were imposed by Lender in the event of Lender’s death or incapacity which could preclude such release of liens.

	 	
7.

	
Default.  Upon failure of Lender, without default by Borrower, to comply with the terms and conditions of this Agreement, Borrower may elect to cancel this agreement upon written notice to Lender, however, no breach shall be deemed to have occurred until Lender has ten (10) days to cure, which shall run from the date of receipt of written notice (e-mail or facsimile acceptable).  Borrower retains the right to retain any Transaction Fees owed to Lender, not as forfeiture, but as liquidated damages for Borrower’s breach of this Agreement.

	
  

	
Upon failure of the Borrower, without default of Lender, to comply with the terms and conditions of this Agreement, Lender may elect to cancel this agreement upon written notice to Borrower, however, no breach shall be deemed to have occurred until Borrower has ten (10) days to cure, which shall run from the date of receipt of written notice (e-mail or facsimile acceptable).  In the event of a breach by Borrower, Lender shall be permitted to use any adequate remedy at law to recover damages caused by the breach.  Borrower shall position blank bills of sale with the Escrow Agent so that title in the Aircraft may be transferred to Lender in the event that Borrower’s material default of this Agreement remains uncured following Lender’s notice to cure.

	
  

	
8.

	
Excusable Delay.  Neither Lender nor Borrower shall be liable to each other for any failure or delay in performing any of their obligations hereunder caused by an act of God, the public enemy, strike or labor dispute, governmental regulation or priorities and force majeure not involving the fault or negligence of either party.

	
  

	
9.

	
Assignment.   This Agreement may not be assigned and any purported assignment shall be without force or legal effect unless the assignment is approved in writing by both parties.

	 	
10.

	
Amendment.  This Agreement shall not be modified or amended except by the mutual consent of the parties in writing.

  

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11.

	
Partial Illegality.  If any one or more provisions of this Agreement shall be found to be illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.

	 	
12.

	
Notification.  For the purposes of negotiating and finalizing this Agreement, any document, including this Agreement, transmitted by facsimile or e-mail, shall be treated in all manner and respects as an original document.  The signature of any party on such document shall be considered for these purposes as an original signature. Any such document shall be considered to have the same binding legal effect as an original document. At the request of either party, any such document shall be re-executed by both parties in the original form.  In consideration of the promises made and value received hereunder, the undersigned parties hereby agree
that, after a document has been executed and transmitted by facsimile or e-mail, neither party shall raise the use of a facsimile or e-mail, or the lack of a document bearing an original signature, as a defense to this Agreement and forever waive such defense.

	 	
13.

	
International Registry.  Borrower and Lender shall comply with the Cape Town Convention Protocol for International Registry Regulations and Procedures regarding the International Registration of the Aircraft prior to closing.  Each party shall bear the cost for registration of their company with the International Registry and any fees associated therewith.

	 	
14.

	
General.

 

	 	
A.

	
In all respects, time shall be of the essence in this Agreement.

	 	
B.

	
This agreement shall bind and inure to the benefit of the parties hereto and their executors, administrators, heirs and assigns.

 

	 	
C.

	
This agreement may be executed in two or more counterparts, each of which shall be deemed an original and shall be effective when executed by both parties.

   

Signed, sealed and delivered this 14th day of March, 2011.

	
BORROWER:

	  	
LENDER:

	
AVANTAIR, INC.

	  	
MIDSOUTH SERVICES, INC.

	  	  	  
	
/s/ Richard A. Pytak Jr.

	  	
/s/ Hugh Fuller

	
Signature

	  	
Signature

	  	  	  
	
C.F.O.

	  	
President

	
Title

	  	
Title

	  	  	  
	
March 14, 2011

	  	
March 14, 2011

	
Date

	  	
Date

  

Page 3 of 3

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