Document:

Consulting
      Agreement - SKS Consulting of South Florida Corp.

    

    

    Term
      of Engagement.
      

    

    The
      Engagement shall be effective for a period of twenty-five (25) months,
      commencing on December 1, 2006 through December 31, 2008 (the “Term”) between
      NeoMedia Technologies, Inc. (“NeoMedia” or the “Company”) and SKS Consulting of
      South Florida Corp. (“SKS”). Thereafter, the Engagement shall automatically
      renew on a month-to-month basis, subject to the right of the Company and/or
      SKS
      to terminate the agreement after the initial 25 month period by giving written
      notice to the other party of at least thirty (30) days prior to the effective
      termination date ("Termination"). The Initial Term plus any automatic monthly
      renewals up to the time of Termination shall hereinafter be referred to as
      the
“Term” or the “Term of the Engagement”.

    

    Compensation.

    

    In
      consideration for the services rendered by SKS to the Company throughout the
      Term of Engagement, the Company shall compensate SKS as follows:

     

    NeoMedia
      agrees that SKS’s daily remuneration will be $1,000 in cash paid on a weekly
      basis for Mr. O’Leary’s time actually spent working on the Company and award SKS
      60,000 shares per month for the period December 1, 2006 through December 31,
      2008. In addition, SKS will receive 60,000 warrants per month @ $0.04/warrant
      for the same period. For that amount, NeoMedia will receive at least 2 weeks
      per
      month of Mr. O’Leary’s time. It is anticipated that these two weeks will be
      spent at NeoMedia offices or elsewhere designated such as acquisition
      subsidiaries, investor meetings or marketing opportunities. 

    

    SKS
      will
      also have the ability to earn warrants up to 500,000 warrant shares at $0.10
      per
      warrant share based upon the following milestones:

    

    
      	
              Successful
                organizational restructuring by 3/31/07

            	
              100,000
                warrant shares

            
	 	 
	
              Successful
                handling of subsidiary repricing by 3/31/07

            	
              100,000
                warrant shares

            
	 	
               

            
	
              Successful
                sale of all non-core business units by 9/30/07

            	
              100,000
                warrant shares

            
	 	 
	
              Company
                at monthly breakeven by 1/01/08

            	
              100,000
                warrant shares

            
	 	 
	
              Stock
                price at $0.20/share for a consecutive 30 day period

            	
              100,000
                warrant shares

            
	 	 
	
              Total

            	
              500,000
                warrant shares

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Shares. 
      For the
      time-based NEOM shares, the parties agree to execute a separate share agreement
      (“Share Agreement”) within 60 days of the start date of this signed agreement.
      The share agreement will contain customary terms and provisions for such an
      agreement, including, but not limited to, provisions for a). “piggy-back”
registration rights related to the upcoming registration and b). an
      anti-dilution clause.

    

    Warrants.
      For the
      time-based $0.04 warrants and the milestone $0.10 warrants in the event that
      any
      milestone warrants become issuable to SKS in connection with any milestone
      event
      hereunder, the parties agree to execute a separate warrant agreement (“Warrant
      Agreement”) for the time-based & milestone warrants within 60 days from the
      start date of this signed agreement. The Warrant Agreement shall be for a term
      of 5 years from the date of issue and shall contain customary terms and
      provisions for such an agreement, including, but not limited to, provisions
      for
      a).“piggy-back” registration rights related to the upcoming registration b). an
      anti-dilution clause and c). a net exercise feature.

     

    Expenses.
      In
      addition to any remuneration payable hereunder, the Company shall reimburse
      SKS,
      promptly upon submission of documentation evidencing such expenses, for all
      fees
      and disbursements of SKS’s travel and out-of-pocket expenses reasonably incurred
      in connection with the services performed by SKS pursuant to this agreement,
      including without limitation, airfare, food, and associated expenses. Said
      expenses shall not exceed $5,000 in any 30-day period of the term unless
      approved in writing by an officer, director or other authorized designee of
      the
      Company. 

     

    Termination.
      After
      a
      period of twenty-five (25) months has lapsed from the start date, the Company
      or
      SKS shall have the right to terminate the Engagement by giving written notice
      to
      the other party at least thirty (30) days prior to the effective termination
      date ("Termination"). Upon such a Termination, the Company shall promptly pay
      all outstanding invoices owed to SKS. 

    

    Non-Disclosure
      Agreement.

     

    Definition
      of “Confidential Information”.
      Confidential Information means proprietary information relating to the Company
      which is not generally known and available to the public, and includes (without
      limitation): Trade Secrets (as defined below) and information relating to trade
      methods; methods of doing business; research and development; invention; the
      identity, prior requirements, and present or future particular needs, of clients
      of the Company; the identity of and background information about purchasing,
      contracting, recruitment, and management personnel of clients of the Company;
      all orders, bids, and quotations, with or related to past, present and
      prospective clients of the Company and all clients and prospect files, lists,
      records, studies, surveys, reports, correspondence and similar materials related
      to the foregoing; the identity, particular skills, work history and evaluations
      of personnel, including personnel listed in any database of the Company,
      especially their most recent work history and skills; profit margins, and
      pricing policies
      and practices, in general and as to particular clients; sales and marketing
      techniques, history, data forecasts, and material, in general and as to
      particular clients; development plans; and personnel training techniques and
      materials; and information in respect of which the Company is bound by an
      obligation of confidence to a third party.  

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Definition
      of "Trade Secrets".
      Trade
      secrets shall mean all information, whether or not Confidential Information,
      included within the definition of "Trade Secrets" under the law of any state
      in
      which SKS provides services for the Company or, in the absence of any such
      definition, as defined in the Uniform Trade Secrets Act

     

    Acknowledgement
      of SKS.
      SKS
      acknowledges that all Confidential Information is owned by and shall continue
      to
      be owned by the Company. 

     

    Return
      of Property.
      Upon
      the termination of this Agreement, regardless of why the Agreement terminates,
      upon written request by the Company, SKS shall return to the Company and/or
      certify that it has been deleted from SKS’s computer all Confidential
      Information indicated by the Company in its notice letter as well as any other
      confidential Information that SKS is aware that it has, in whatever form it
      exists, including
      all copies thereof.. The Company agrees that so long as SKS has made a good
      faith effort to return all such Confidential Information, SKS shall be deemed
      to
      have complied with these provisions. The Company may at anytime call to SKS’s
      attention that it has not received certain additional Confidential Information
      back and SKS shall promptly search for such additional Confidential Information
      and return it to the Company. The Company agrees that SKS may delete any
      information that is proprietary to SKS that may be contained within the
      Company’s Confidential Information prior to SKS returning it to the Company.

     

    Non-Disclosure.
      SKS
      agrees that, during the term of the agreement, unless the Company has consented,
      or unless required by law, a court or agency of the government, SKS will not
      reveal or disclose any such Confidential Information to any third party;
      provided, however, that SKS is authorized to disclose such Confidential
      Information in connection with a potential transaction in a manner consistent
      with customary industry practices in connection with the provision of services
      under this agreement. SKS further agrees that for a period of twelve (12) months
      after the termination of this agreement, regardless of the reason for such
      termination, SKS will not reveal or disclose any such Confidential Information
      to any third party unless the Company has consented, or unless required by
      law,
      a court or agency of the government. Neither the previous paragraph nor any
      restriction, non-disclosure or use limitation or other obligation contained
      in
      this agreement shall apply to any information, data or item of any kind which
      is: (i) in the public domain, through no action of SKS; (ii) already known
      by
      SKS at the time it is provided to him by the Company; (iii) disclosed to SKS
      by
      any person or entity not known by it to be under an obligation of
      confidentiality to Company; or (iv) independently developed or derived by SKS.
      

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Non-Hire.
      SKS
      also shall not, during and at any time prior to two years after termination
      of
      this agreement, directly or indirectly, on behalf of any trade or business
      that
      is competitive with the business of the Company, as it then exists, aid or
      endeavor to solicit or induce then remaining employees of the Company to leave
      their employment with the Company in order to accept employment with another
      person or entity.

    

    I
      would
      like to plan on being on site at least 2 weeks per month to accomplish the
      objectives set. The priority is on getting the organization restructured both
      operationally and financially, selling off non-core subsidiaries, reduce Cornell
      Capital debt, and getting the Company to breakeven and keeping it profitable
      once it hits breakeven. 

    

    Agreed
      by: 

    

     

    
      	SKS Consulting of South Fl. Corp.	NeoMedia Technologies, Inc
	 	 
	 	 
	/s/ George O’Leary, President	/s/ Chas Fritz, Chairman &
              CEO
	 	 
	 	 
	
              December
                18,
                2006                        
                

            	
              December
                18,
                2006                                    
                

            
	
              Date

            	
              DateLetter
      from NeoMedia Technologies (OTC
      BB: NEOM) to Shareholders

    

    

    Dear
      Prospective and Current Shareholders:

    

    It
      is
      with great enthusiasm that I update you on the state of NeoMedia Technologies,
      Inc. 

    

    2007
      holds many promising opportunities for us that we believe we can capitalize
      on
      with a new team, renewed energy, fresh ideas and a more focused vision for
      moving our company forward, and creating shareholder value.

    

    There
      are
      a number of positive developments to report, but none more vital than our
      evolving business model. Following an internal strategic planning meeting in
      late January, NeoMedia is now laser focused on our core code-reading business
      in
      North America, the UK, mainland Europe and China. 

    

    All
      other
      business units (Micro Paint Repair, 12Snap, and Telecom Services) are either
      in
      the process of being sold, or will be sold in the most profitable, timely and
      viable manner possible. The strategic equity earned through the sale of these
      assets will greatly reduce our current burn rate, and help us move closer to
      profitability and provide financial stability for the company. Our goal is
      to
      break even by December 31, 2007 and become profitable by the first quarter
      of
      next year. 

    

    Most
      importantly, the shedding of our non-core assets affords us the ability to
      focus
      all our resources on our core business initiatives. We realize the challenges
      we
      face in the global application of our technology, and can now present qode
      to
      the industry and public in a more systematic and focused approach marketing
      it
      as “the next phase of the Internet” and the wireless Web. 

    

    We
      are
      also making great strides to create a global standard for the wireless Web
      and
      have scheduled a high-level meeting in London this month with some of the
      world’s leading technology firms to begin to define and document this important
      standards-based initiative. 

    

    Building
      on the deals we have completed, we will focus on targeting manufacturers within
      the media and enterprise space, including newspapers, publishers, real estate,
      physical world advertisers, and beverage producers to design their products
      to
      become more interactive. We envision a future in which consumers routinely
“qode
      it” when they want more information on a product or service.

    

    We
      believe the revenues generated by our core business could be significant and
      our
      goals include hiring a new sales force, while penetrating three verticals with
      at least six major customers. Another major goal is to partner with at least
      three major carriers (North American, UK and mainland European) who will embed,
      adopt and commit to utilize every feature qode has to offer. 

    

    We
      recently signed a performance-based agency and licensing agreement with
      NexMobil, LLC, to resell our technology into the Middle East, India, Korea
      and
      Pakistan. 

    

    As
      you
      know, we have numerous issued patents with others in process and we will
      continue to seek to optimize the value of our intellectual property portfolio
      around in the world. That said, I would like to update you on a recent positive
      development in the Scanbuy case. Judge John E. Sprizzo dismissed Scanbuy's
      request for a summary judgment in New York City on Jan. 30. While the case
      is
      not over yet, we continue to remain confident in the final outcome.

    

    Another
      of our key strategic goals is to look to attract a minority equity investment
      from a strategic industry partner to support our current financial structure
      with Cornell Capital Partners. 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    In
      terms
      of new leadership, we expect to name a permanent CEO by mid-year. In addition,
      Roger Pavane has recently been brought in as our SVP of Sales and Marketing
      and
      is heading up the mobile division efforts in the Americas and the UK. Mr. Pavane
      is a wireless industry veteran with 20+ years experience in this space. Prior
      to
      NeoMedia, Mr. Pavane headed up efforts for Mobliss, a wholly owned subsidiary
      of
      the Tokyo-based Index Corporation, and served as Executive Vice President Sales
      of TruePosition, a Liberty Media (NASDAQ GS: LINTA) owned wireless location
      technology software company where he lead the start-up company to record growth.
      We are also very pleased to announce the promotion of Dr. Christian Steinborn,
      current president of Gavitec, who will now also head up the mobile division
      efforts in the rest of the world, with a focus on mainland Europe and China.
      

    

    We
      will
      also be announcing terms of a company-wide stock option re-pricing today. We
      are
      instituting it as a retention tool to align our employees with the new vision
      of
      NeoMedia. The re-pricing is to the current market price for vested options,
      with
      future vesting at a premium to the current market price to better align our
      employees with our shareholders who are expecting increasing stock performance.
       

    

    We
      also
      would like to announce that George O’Leary has been named as a member of our
      Board of Directors. Mr. O’Leary is currently the President of SKS Consulting of
      South Florida Corp. and is working with NeoMedia under a two year consulting
      agreement to help right the ship and currently will lead the execution of the
      strategic plan. Mr. O’Leary started SKS Consulting in 2000 with the mission to
      help companies focus on execution in their core business while shedding their
      non-core business assets. Prior to assuming his duties with NeoMedia, he was
      and
      still is a consultant to NeoGenomics (NGNM.OB) and was acting Chief Operating
      Officer from October 2004 to April 2005 were he helped the turnaround of that
      organization. He is currently a member of their Board of Directors, and the
      stock price has seen a sevenfold increase since his involvement with the
      company. From 1996 to 2000, Mr. O’Leary was CEO and President of Communication
      Resources Incorporated (CRI), where annual revenues grew from $5 million to
      $40
      million during his tenure. Prior to CRI, Mr. O’Leary was Vice President of
      Operations of Cablevision Industries, where he ran $125 million of business
      for
      this major cable operator until it was sold to Time Warner. We look forward
      to
      Mr. O’Leary helping NeoMedia in these arenas as well. 

    

    We
      embrace the challenges ahead and believe we have a streamlined, focused vision
      and game plan, and the dedicated team in place to execute it. 

    

    We
      look
      forward to communicating with you at our next earnings conference call at the
      completion of our 2006 audit and will continue to have quarterly shareholder
      conference calls going forward.

     

    Thank
      you
      for your continued support. 

    

    

    Sincerely,

    

    

    Charles
      W. Fritz

    Interim
      CEO and Chairman

    

    

    This
      letter contains forward-looking statements within the meaning of section 27A
      of
      the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
      1934. With the exception of historical information contained herein, the matters
      discussed in this letter involve risk and uncertainties. Actual results could
      differ materially from those expressed in any forward-looking
      statement.

    

    qode
      is a registered trademark, and qode®reader, qode®window and One Click to Content
      are trademarks of NeoMedia Technologies, Inc. Other trademarks are properties
      of
      their respective owners.”

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