IRREVOCABLE TRANSFER AGENT INSTRUCTIONS March 27, 2007
Exhibit
10.4
March
27,
2007
|
Worldwide
Stock Transfer, LLC
|
|
▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
|
|
Teaneck,
NJ 07666
|
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, an the Buyers shall purchase from the Company, convertible debentures
(collectively, the “Debentures”)
in the
aggregate principal amount of Seven Million Four Hundred Fifty Eight Thousand
Six Hundred Fifty One Dollars ($7,458,651), plus accrued interest, which are
convertible into shares of the Company’s common stock, par value $.001 per share
(the “Common
Stock”),
at
the Buyers discretion. The Company has also issued to the Buyer warrants to
purchase up to 125,000,000 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 Buyers upon conversion of the
Debentures (“Conversion
Shares”).
|
|
2.
|
Up
to 125,000,000 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, Inc. (the “Transfer
Agent”)
to do
the following:
|
1.
|
Conversion
Shares and Warrant Shares.
|
|
a.
|
Instructions
Applicable to Transfer Agent.
With respect to the Conversion Shares, and Warrant Shares, the Transfer
Agent shall issue the Conversion Shares and Warrant 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 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 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq. (the “Escrow
Agent”)
on behalf of the Company. Upon receipt of a Conversion Notice or
an
Exercise Notice, the Transfer Agent shall within three (3) Trading
Days
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 the Buyer causes its bank or broker to initiate the
DWAC
transaction. For purposes hereof “Trading
Day”
shall mean any day on which the Nasdaq Market is open for customary
trading.
|
|
b.
|
The
Company hereby confirms to the Transfer Agent and the Buyer that
certificates representing the Conversion Shares and the Warrant 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
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 Securities
Act of
1933, as amended, 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 or the Warrant
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.
|
|
d.
|
Instructions
Applicable to Escrow Agent.
Upon the Escrow Agent’s receipt of a properly completed Conversion Notice
or Exercise Notice and the Aggregate Exercise Price (as defined in
the
Warrant), the Escrow Agent 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.
|
|
2.
|
All
Shares.
|
|
a.
|
The
Transfer Agent shall reserve for issuance to the Buyers a minimum
of
500,000,000 shares for issues to the Buyers upon conversion of the
Debenture and exercise of the Warrants. All such shares shall remain
in
reserve with the Transfer Agent until the Buyers provides the Transfer
Agent instructions that the shares or any part of them shall be taken
out
of reserve and shall no longer be subject to the terms of these
instructions.
|
|
b.
|
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.
|
2
|
c.
|
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.
|
|
d.
|
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.
Any
attempt by Transfer Agent to resign as the Company’s transfer agent hereunder
shall not be effective until such time as the Company provides to the Transfer
Agent written notice that a suitable replacement has agreed to serve as transfer
agent and to be bound by the terms and conditions of these Irrevocable Transfer
Agent Instructions.
The
Company and the Transfer Agent hereby acknowledge and confirm that complying
with the terms of this Agreement does not and shall not prohibit the Transfer
Agent from satisfying any and all fiduciary responsibilities and duties it
may
owe to the Company.
The
Company and the Transfer Agent acknowledge that the Buyers is relying on the
representations and covenants made by the Company and the Transfer Agent
hereunder and are a material inducement to the Buyers purchasing convertible
debentures under the Securities Purchase Agreement. The Company and the Transfer
Agent further acknowledge that without such representations and covenants of
the
Company and the Transfer Agent made hereunder, the Buyers would not purchase
the
Debentures.
Each
party hereto 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 a party hereto,
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 Worldwide Stock Transfer, LLC 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
instructing Worldwide Stock Transfer, LLC to issue shares based on the legality
of the agreement whereas the issuer is denying the request in full or partially
for whatever reason, the issuer, buyers and any other third party involved
agree
for ourselves, our successors, legal representatives and assigns, at all times
to defend, indemnify and save Worldwide Stock Transfer, LLC, 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]
3
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/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
|
|
|
Name: ▇▇▇▇▇
▇. ▇▇▇▇▇
|
|
|
Title: CFO
|
|
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
|
|
|
▇▇▇▇▇
▇▇▇▇▇▇▇▇, Esq.
|
Worldwide
Stock Transfer, LLC
By:
/s/
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇
▇▇▇▇▇▇▇▇
Title:SVP
4