Document:

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

            	 	
              $

            	
              0Unassociated 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

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