NeoMedia Technologies, Inc.
Registration Rights Agreement Dated September 25, 1997
By and Between NeoMedia Technologies, Inc. and
Xxxxxx X. Xxxxxx and Xxxxxx X. Xxxxx
Exhibit 99.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of
this 25th day of September, 1997 by and between NEOMEDIA TECHNOLOGIES, INC., a
Delaware corporation (the "Company"), and XXXXXX X. XXXXXX and XXXXXX X. XXXXX
(the "Shareholders").
WHEREAS, the Company and the Shareholders are parties to a Stock Purchase
Agreement dated August 30, 1997 (the "Stock Purchase Agreement");
WHEREAS, Section 11.7 of the Stock Purchase Agreement provides that the
Shareholders' obligations under the Stock Purchase Agreement are subject to,
INTER ALIA, the execution of an agreement between the Company and the
Shareholders which provides for the registration on the terms and subject to the
conditions therein of the common stock of the Company which the Shareholders are
entitled to receive under the Stock Purchase Agreement; and
WHEREAS, Section 8.1 of the Stock Purchase Agreement obligates the Company
to use its best efforts to assure that all of the conditions precedent to the
Shareholders' obligations under the Stock Purchase Agreement are satisfied;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
1. DEFINITIONS. In addition to the terms that are defined above, the
following terms shall have the following meanings as used in this Agreement:
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"NASD" shall have the meaning set forth in Section 4(a)(xiii) of this
Agreement.
"NeoMedia Stock" shall mean the common stock, par value $.01 per share, of
the Company.
"Person" shall mean any individual, corporation, association, partnership,
group (as defined in Section 13(d)(3) of the Exchange Act), limited liability
company, joint venture, business trust or unincorporated organization, or a
government or any agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement, with respect
to the terms of the offering of any portion of the Registrable Shares covered by
such Registration Statement and all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated by
reference in such prospectus.
"Registrable Shares" shall mean: (i) any NeoMedia Stock issued to the
Shareholders pursuant to the Stock Purchase Agreement; and (ii) any equity
securities of the Company issued or distributed to the Shareholders after the
date hereof in respect of such NeoMedia Stock by way of any stock dividend,
stock split or other distribution, recapitalization or reclassification, and any
equity securities of the Company acquired by a Shareholder upon exercise or
conversion of any such securities. As to any particular Registrable Share, such
Registrable Share shall cease to be a Registrable Share when (A) it has been
sold, transferred or otherwise disposed of or exchanged pursuant to a
Registration Statement under the Securities Act, (B) it has been distributed to
the public pursuant to Rule 144 (or any successor provision) under the
Securities Act, or (C) it has been otherwise sold, transferred or otherwise
disposed of except in the case of a sale or transfer to a Shareholder's spouse
or issue or a trust for her or their benefit.
"Registration Expenses" shall have the meaning set forth in Section 6(b) of
this Agreement.
"Registration Notice" shall mean the written request which one or both of
the Shareholders may provide to the Company pursuant to the provisions of
Sections 2 or 3 of this Agreement.
"Registration Statement" shall mean any appropriate Registration Statement
of the Company in a registration that covers the sale of any of the Registrable
Shares pursuant to the provisions of Sections 2 or 3 of this Agreement,
including the Prospectus, amendments and supplements to such Registration
Statement, post-effective amendments, all exhibits and all material incorporated
by reference in such Registration Statement.
"SEC" shall mean the Securities and Exchange Commission or any successor
agency thereto.
"Securities Act" shall mean the Securities Act of 1933, as amended.
2. REGISTRATION ON REQUEST.
(a) At any time after the date of this Agreement and after the Company
has publicly reported its financial results for the fourth calendar quarter of
1997, one or both of the Shareholders from time to time may request, pursuant to
a Registration Notice, the registration of all or a portion of the Registrable
Shares. The Shareholder choosing not to participate in such registration shall
not be entitled to exercise his rights under this Section 2 until that
Registration Statement is no longer effective. Such Registration Notice shall
identify each Shareholder who has requested registration and the number of
Registrable Shares to be included in the registration. Within 10 business days
of its receipt of the Registration Notice, the Company shall send the
Shareholder who was not included in the Registration Notice (the "Nonincluded
Shareholder") written notice of the Registration Notice (the "Nonincluded
Shareholder Registration Notice"). The Nonincluded Shareholder within 10
business days of its receipt of the Nonincluded Shareholder Notice shall send
the Company written notice of the number of shares he desires to have registered
in the Registration Statement. If the Nonincluded Shareholder fails to provide
such notice to the Company within the 10 business days period, he shall not be
entitled to have his shares registered
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until that Registration Statement is no longer effective. The Company shall file
within 30 days after its sending of the Nonincluded Shareholder Registration
Notice (or within 30 days after its receipt of the Registration Notice, if no
Nonincluded Shareholder Registration Notice is required to be sent) a
Registration Statement to register the Registrable Shares identified in such
Registration Notice and the written notice of the Nonincluded Shareholder and
thereafter shall use its best efforts to cause the Registration Statement to
become effective. The Shareholders requesting registration pursuant to this
Section 2 may, at any time prior to the effective date of the Registration
Statement relating to such registration, revoke such request by providing a
written notice to the Company revoking such request; PROVIDED, HOWEVER, that in
the event the Shareholders shall have made a written request for registration
which (i) is subsequently withdrawn by the Shareholders before or after the
Company has filed a Registration Statement with the SEC in connection therewith
which has been declared effective by the SEC or (ii) is not declared effective
solely as a result of the failure of Shareholders to take all actions reasonably
required in order to have the registration and the related Registration
Statement declared effective by the SEC then, in any such event, the
Shareholders shall reimburse the Company for a percentage of the Registration
Expenses attributable to the registration as to which the Registrable Shares
were to be included. Such percentage shall be equal to a fraction, the numerator
of which is the Registrable Shares to which such revocation relates and the
denominator of which is all the NeoMedia Shares (including the Registrable
Shares) which were to be included in the registration.
(b) A registration requested pursuant to this Section 2 shall not be
deemed to have been effected unless it has become effective under the Securities
Act and has remained effective for at least 270 days or such shorter period as
all the Registrable Shares included in such registration have actually been sold
thereunder. In addition, if within 60 days after it has become effective, and
unless all of the Registrable Shares to be included in such registration have
been sold, the offering of Registrable Shares pursuant to such registration is
interfered with by any stop order, injunction or other order or requirement of
the SEC or other governmental agency or court, such registration shall be deemed
not to have been effected for purposes of this Section 2.
(c) The Shareholders may not request a registration pursuant to this
Section 2 if (i) the Company has registered pursuant to Section 3 all of the
Registrable Shares that the Shareholders have requested to register pursuant to
such Section 3 and the Shareholders have sold all of the shares registered
pursuant to the Section 3 Registration Statement and (ii) all the Registrable
Shares have been registered at least once under either Sections 2 or 3 and the
Registrable Shares are eligible for sale under Rule 144 of the Securities Act.
Each Shareholder must include on a Registration Notice all of the Registrable
Shares owned by him not previously registered and sold.
3. INCIDENTAL REGISTRATIONS.
(a) Notwithstanding anything to the contrary in this Agreement, the
Company shall file on or before February 27, 1998 a Registration Statement which
includes all the Registrable Shares and thereafter shall use its best efforts to
cause the Registration Statement to become effective to the extent required to
permit the disposition of the Registrable Shares to be registered; PROVIDED,
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HOWEVER, that one or both of the Shareholders shall have the right, exercisable
by giving written notice to the Company on or before February 13, 1998, to
exclude all or a portion of his Registrable Shares from such Registration
Statement.
(b) Each other time the Company shall determine after the date of this
Agreement and after the Company has publicly reported its financial results for
the fourth calendar quarter of 1997, to file a Registration Statement under the
Securities Act in connection with any NeoMedia Stock owned either by the Company
or by any other holders thereof, the Company shall give written notice of its
determination to the Shareholders at least 30 days prior to the anticipated
filing date of such Registration Statement. Within 10 days after their
respective receipt of such notice from the Company, one or both Shareholders may
request, pursuant to a Registration Notice, the inclusion in the registration of
all or a portion of the Registrable Shares. Such Registration Notice shall
identify each Shareholder who has requested registration and the number of
Registrable Shares to be included in the registration. Upon its receipt of any
such Registration Notice, the Company shall include in the Registration
Statement the Registrable Shares identified in such Registration Notice and
thereafter shall use its best efforts to cause the Registration Statement to
become effective to the extent required to permit the disposition of the
Registrable Shares to be registered; PROVIDED, HOWEVER, that (i) if, at any time
after giving written notice of its intention to register any securities and
prior to the effective date of the Registration Statement filed in connection
with such registration, the Company shall determine for any reason not to
proceed with the proposed registration of the securities, the Company may, at
its election, give written notice of such determination to each Shareholder and
thereupon shall be relieved of its obligation to register any Registrable Shares
in connection with such registration (but not from its obligation to pay the
Registration Expenses in connection therewith); and (ii) if such registration
involves an underwritten offering, the Shareholders requesting to be included in
the Company's registration must sell their Registrable Shares to the
underwriters on the same terms and conditions as apply to the Company, with such
differences, including any with respect to indemnification and liability
insurance, as may be customary or appropriate. If a registration requested
pursuant to this Section 3 involves an underwritten public offering, any
Shareholder requesting to be included in such registration may elect, in writing
prior to the effective date of the Registration Statement filed in connection
with such registration, not to register such securities in connection with such
registration. No registration effected under this Section 3 shall relieve the
Company of its obligations to effect registration upon request under Section 2
hereof.
4. REGISTRATION PROCEDURES.
(a) If and whenever the Company is required by the provisions of
Sections 2 or 3 of this Agreement to file, or to include Registrable Shares in,
a Registration Statement and to use its best efforts to effect or cause the
registration of Registrable Shares, the Company also shall as expeditiously as
possible:
(i) prepare and file with the SEC such amendments and supplements to
such Registration Statement and the Prospectus used in connection therewith as
may be necessary
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to keep such Registration Statement effective for not less than 270 days and to
comply with the provisions of the Securities Act, the Exchange Act and the rules
and regulations promulgated thereunder with respect to the disposition of all
the securities covered by such Registration Statement during such period in
accordance with the intended methods of disposition by the Shareholders thereof
set forth in such Registration Statement; PROVIDED, HOWEVER, that (A) before
filing any such amendments or supplements thereto, the Company shall furnish to
the Shareholders covered by such Registration Statement copies of all documents
proposed to be filed and (B) the Company shall notify each Shareholder covered
by such Registration Statement of any stop order issued or threatened by the
SEC, any other order suspending the use of any preliminary prospectus or of the
suspension of the qualification of the Registration Statement for offering or
sale in any jurisdiction, and take all reasonable actions required to prevent
the entry of such stop order, other order or suspension or to remove it if
entered;
(ii) furnish to each Shareholder and each underwriter, if
applicable, of Registrable Shares covered by such Registration Statement such
number of copies of the Registration Statement and of each amendment and
supplement thereto (in each case including all exhibits), such number of copies
of the Prospectus included in such Registration Statement, in conformity with
the requirements of the Securities Act, and such other documents as each
Shareholder covered by such Registration Statement may reasonably request in
order to facilitate the disposition of the Registrable Shares by such
Shareholder;
(iii) use its best efforts to register or qualify such Registrable
Shares covered by such registration statement under the state securities or blue
sky laws of such jurisdictions as each Shareholder covered by such Registration
Statement and, if applicable, each underwriter, may reasonably request, and do
any and all other acts and things which may be reasonably necessary to
consummate the disposition in such jurisdictions of the Registrable Shares owned
by such Shareholder (PROVIDED, HOWEVER, that the Company shall not be required
to (A) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this clause (iii), (B) subject itself
to taxation in any such jurisdiction or (C) consent to general service of
process in any such jurisdiction);
(iv) if, at any time when a Prospectus relating to the Registrable
Shares is required to be delivered under the Securities Act, any event shall
have occurred as the result of which any such Prospectus as then in effect would
include an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, immediately give written notice thereof to each Shareholder and
the managing underwriter or underwriters, if any, of such Registrable Shares and
prepare and furnish to each such Shareholder copies of an amended or
supplemental Prospectus as may be necessary so that, as thereafter delivered to
the purchasers of such Registrable Shares, such Prospectus shall not include an
untrue statement of material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
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(v) use its best efforts to list such Registrable Shares on any
securities exchange on which similar securities of the Company are then listed,
and enter into customary agreements including a listing application and
indemnification agreement in customary form, provided that the applicable
listing requirements are satisfied, and provide a transfer agent and registrar
for such Registrable Shares covered by such Registration Statement not later
than the effective date of such Registration Statement;
(vi) enter into such customary underwriting agreements and take such
other actions as each Shareholder of Registrable Shares being sold or the
underwriter or underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Shares, including customary
indemnification and opinions;
(vii) use its best efforts to obtain a "cold comfort" letter or
letters from the Company's independent public accountants in customary form and
covering matters of the type customarily covered by "cold comfort" letters as
the Shareholders or the underwriters retained by such Shareholders shall
reasonably request;
(viii) make available for inspection by representatives of each
Shareholder covered by such Registration Statement, by any underwriter
participating in any disposition to be effected pursuant to such Registration
Statement and by any attorney, accountant or other agent retained by such
Shareholders or any such underwriter, all financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries'
officers, directors and employees to supply all information and respond to all
inquiries reasonably requested by such Shareholders or any such representative,
underwriter, attorney, accountant or agent in connection with such Registration
Statement;
(ix) promptly prior to the filing of any document which is to be
incorporated by reference into the Registration Statement or the Prospectus
(after initial filing of the Registration Statement), provide copies of such
document to counsel to each Shareholder covered by such Registration Statement
and to the managing underwriter or underwriters, if any, make the Company's
representatives available for discussion of such document and make such changes
in such document prior to the filing thereof as counsel for such Shareholders or
underwriters may reasonably request;
(x) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security holders, as
soon as reasonably practicable after the effective date of the Registration
Statement, an earnings statement which shall satisfy the provisions of Section
11(a) of the Securities Act and the rules and regulations promulgated
thereunder;
(xi) use its best efforts to provide a CUSIP number for all
Registrable Shares not later than the effective date of the applicable
Registration Statement, and provide the applicable transfer agents with printed
certificates for the Registrable Shares;
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(xii) notify counsel for each Shareholder covered by such
Registration Statement and the managing underwriter or underwriters, if any,
immediately and confirm the notice in writing, (A) when the Registration
Statement, or any post-effective amendment to the Registration Statement, shall
have become effective, or any supplement to the Prospectus or any amendment
Prospectus shall have been filed, (B) of the receipt of any comments from the
SEC and (C) of any request of the SEC to amend the Registration Statement or
amend or supplement the Prospectus or for additional information;
(xiii) cooperate with each seller of Registrable Shares and each
underwriter, if any, participating in the disposition of such Registrable Shares
and their respective counsel in connection with any filings required to be made
with the National Association of Securities Dealers, Inc. (the "NASD"); and
(xiv) during the period when the Prospectus is required to be
delivered under the Securities Act, promptly file all documents required to be
filed with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act.
(b) Each Shareholder of Registrable Shares shall, upon receipt of any
notice from the Company of the happening of any event of the type described in
Section 4(a)(iv) hereof, forthwith discontinue disposition of such Registrable
Shares covered by such Registration Statement or related Prospectus until such
Shareholder's receipt of the copies of the supplemental or amended Prospectus
contemplated by Section 4(a)(iv) hereof and, if so directed by the Company,
shall deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Shareholder's possession, of the Prospectus
covering such Registrable Shares at the time of receipt of such notice. In the
event the Company shall give any such notice, the period mentioned in Section
4(a)(i) hereof shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to Section 4(a)(iv)
hereof and including the date when such Shareholder shall have received the
copies of the supplemental or amended Prospectus contemplated by Section
4(a)(iv) hereof. If for any other reason the effectiveness of any Registration
Statement filed pursuant to Sections 2 or 3 hereof is suspended or interrupted
prior to the expiration of the time period regarding the maintenance of the
effectiveness of such Registration Statement required by Section 4(a)(i) hereof
so that Registrable Shares may not be sold pursuant thereto, the applicable time
period shall be extended by the number of days equal to the number of days
during the period beginning with the date of such suspension or interruption to
and ending with the date when the sale of Registrable Shares pursuant to such
Registration Statement may be recommenced.
(c) Each Shareholder shall provide the Company upon request with such
information about such Shareholder to enable the Company to comply with the
requirements of the Securities Act and to execute such certificates as the
Company may reasonably request in connection with such information and otherwise
to satisfy any requirements of law.
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5. UNDERWRITTEN REGISTRATIONS.
(a) Subject to the provisions of Sections 2, 3 and 4 hereof, any of the
Registrable Shares covered by a Registration Statement may be sold, at the
Shareholders' request, in an underwritten offering at the discretion of the
Shareholder thereof. In the case of any underwritten offering pursuant to
Section 2 hereof, the managing underwriter or underwriters that will administer
the offering shall be selected by the Shareholders provided that such
underwriter or underwriters are reasonably satisfactory to the Company. In the
case of an underwritten offering pursuant to Section 3 hereof, the managing
underwriter or underwriters that will administer the offering shall be selected
by the Company. All expenses of any such underwritten offering in excess of the
expense otherwise payable by the Company pursuant to Section 6 of this Agreement
including, but not limited to, printing expenses in excess of the cost to
reproduce a prospectus on a photocopying machine, the fees and disbursements of
underwriters customarily paid by issuers or sellers of securities (including,
but not limited to, expenses relating to "road shows" and other marketing
activities), the fees of counsel of the Shareholders, NASD underwriter
compensation review costs, including NASD filing fees and expenses, fees and
expanses of compliance with securities of blue sky laws (including, without
limitation, fees and disbursements of counsel for the underwriters or the
shareholders, in connection with the blue sky qualifications of the Registrable
Shares) and underwriting commissions and discounts shall be paid by the
Shareholders.
(b) If a registration pursuant to Sections 2 and 3 of this Agreement
involves an underwritten offering and the managing underwriter or underwriters
in good faith advises the Company in writing that, in its opinion, the number of
securities to be included in such registration (including securities of the
Company which are not Registrable Shares) exceeds the largest number of
securities which can be sold in such offering without having an adverse effect
on such offering (including the price at which such securities can be sold),
then the Company will include in such registration, on a prorata basis, to the
extent of the number which the Company is so advised can be sold in such
offering all of the securities of the Company proposed by the Shareholders, the
Company or any other holders thereof to be included in such registration. The
Company shall not grant any registration rights having priorities that conflict
with or are otherwise inconsistent with this Section 5(b).
6. EXPENSES.
(a) The fees, costs and expenses of all registrations in accordance with
Sections 2 and 3 hereof shall be borne by the Company, subject to the provisions
of Sections 2(a) and 6(b) hereof.
(b) Subject to Section 5(a) of this Agreement, the fees, costs and
expenses of registration to be borne as provided in Section 6(a) hereof shall
include, without limitation, all expenses incident to the Company's performance
of or compliance with this Agreement including, without limitation, all SEC and
stock exchange or NASD registration and filing fees and expenses, reasonable
fees and expenses of any "qualified independent underwriter" and its counsel as
may be
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required by the rules of the NASD, fees and expenses of compliance with
securities or blue sky laws (including without limitation reasonable fees and
disbursements of counsel for the underwriters, if any, in connection with blue
sky qualifications of the Registrable Shares), rating agency fees, printing
expenses (including expenses of printing certificates for Registrable Shares and
Prospectuses), messenger, telephone and delivery expenses, the fees and expenses
incurred in connection with the listing of the securities to be registered on
each securities exchange or national market system on which similar securities
issued by the Company are then listed, fees and disbursements of counsel for the
Company and all independent certified public accountants (including the expenses
of any annual audit, special audit and "cold comfort" letters required by or
incident to such performance and compliance), securities laws liability
insurance (if the Company in its sole discretion decides to obtain such
insurance), the fees and disbursements of underwriters customarily paid by
issuers or sellers of securities (including, without limitation, expenses
relating to "road shows" and other marketing activities), the reasonable fees of
counsel for the Shareholders in connection with each such registration, the
reasonable fees and expenses of any special experts retained by the Company in
connection with such registration, and fees and expenses of other persons
retained by the Company (but not including any underwriting discounts or
commissions or transfer taxes, if any, attributable to the sale of Registrable
Shares by such Shareholders) (collectively, "Registration Expenses").
7. INDEMNIFICATION.
(a) The Company shall, and it hereby does, indemnify, defend and hold
harmless each of the Shareholders, each other Person who participates as an
underwriter in an offering or sale of Registrable Shares and each other Person,
if any, who controls such Shareholder or any such underwriter within the meaning
of the Securities Act (collectively, the "Shareholder Indemnified Parties"),
against any and all losses, claims, damages or liabilities, joint or several,
and expenses (including any amounts paid in any settlement effected with the
Company's consent) to which any Shareholder Indemnified Party may become subject
under the Securities Act, state securities or blue sky laws, common law or
otherwise, or otherwise may incur, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof, whether or not such
Shareholder Indemnified Party is a party thereto) or expenses arise out of or
are based upon: (i) the breach by the Company of any of its duties and
obligations under this Agreement; (ii) any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement under
which such securities were registered under the Securities Act, any preliminary,
final or summary Prospectus contained therein, or any amendment or supplement
thereto; (iii) any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; or (iv) any violation by the Company of any federal, state or common
law rule or regulation applicable to the Company and relating to action required
of or inaction by the Company in connection with any such registration, and the
Company shall reimburse such Shareholder Indemnified Party for any legal or any
other expenses reasonably incurred by it in connection with investigating or
defending any such loss, claim, liability, action or proceeding; PROVIDED,
HOWEVER, that the Company shall not be liable to any Shareholder Indemnified
Party in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect
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thereof) or expense arises out of or is based upon: (x) any untrue statement or
alleged untrue statement or omission or alleged omission made in a Registration
Statement or amendment or supplement thereto or in any such preliminary, final
or summary Prospectus in reliance upon and in conformity with written
information with respect to such Shareholder furnished to the Company by such
Shareholder for use in the preparation thereof; or (y) the failure of a
Shareholder Indemnified Party to deliver any amendment or supplement to a
Registration Statement which corrects any untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement to
which such amendment or supplement pertains. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of any
Shareholder Indemnified Party and shall survive the transfer of such securities
by such Shareholder.
(b) Each Shareholder shall, and he hereby does, indemnify, defend and
hold harmless the Company, its directors and officers, each other Person who
participates as an underwriter in an offering or sale of Registrable Shares and
each other Person, if any, who controls the Company or any such underwriter
within the meaning of the Securities Act (collectively, the "Company Indemnified
Parties"), against any and all losses, claims, damages or liabilities, joint or
several, and expenses (including any amounts paid in any settlement effected
with the Company's consent) to which any Company Indemnified Party may become
subject under the Securities Act, state securities or blue sky laws, common law
or otherwise, or otherwise may incur, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof, whether or not such
Company Indemnified Party is a party thereto) or expenses arise out of or are
based upon any act or omission by such Shareholder described in Sections 7(a)(x)
and (y) of this Agreement.
(c) If the indemnification provided for in this Section 7 shall for any
reason be unavailable to any indemnified party under Section 7(a) or 7(b) hereof
or is insufficient to hold it harmless in respect of any loss, claim, damage or
liability, or any action in respect of any loss, claims, damage or liability, or
any action in respect thereof referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect thereof
(i) in such proportion as shall be appropriate to reflect the relative benefits
received by the indemnified party and indemnifying party or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the indemnified party
and indemnifying party with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. Notwithstanding any
other provision of this Section 7(c), no Shareholder shall be required to
contribute an amount greater than the dollar amount of the net proceeds received
by such Shareholder with respect to the sale of any such Registrable Shares
unless any contribution arises out of or is based on any act or omission by such
Shareholder described in Sections 7(a)(x) and (y) of this Agreement. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
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8. RULE 144. The Company shall file in a timely manner the reports required
to be filed by it under the Securities Act and the Exchange Act and the rules
and regulations promulgated thereunder (or, if the Company is not required to
file such reports, it shall, upon the request of any Shareholder, make publicly
available such information), and it will take such further action as any
Shareholder may reasonably request, all to the extent required from time to time
to enable such Shareholder to sell Registrable Shares without registration under
the Securities Act within the limitation of the exemptions provided by (i) Rule
144 under the Securities Act, as such Rule may be amended from time to time or
(ii) any similar rule or regulation hereafter adopted by the SEC. Upon the
request of any Shareholder, the Company shall deliver to such Shareholder a
written statement as to whether it has complied with such requirements.
9. ASSIGNABILITY. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and permitted
assigns; PROVIDED, HOWEVER, that the Shareholders may not assign this Agreement
to any other Person, except a Shareholder's spouse or issue or a trust for her
or their benefit, without the Company's prior written consent. In addition, and
whether or not any express assignment shall have been made, the provisions of
this Agreement which are for the benefit of the parties hereto other than the
Company shall also be for the benefit of and enforceable by any subsequent
holder of any Registrable Shares. The Company may not assign any of its rights
or delegate any of its duties under this Agreement without the prior written
consent of the Shareholders. Any purported assignment in violation of this
Section 9 shall be void.
10. NOTICES. Any and all notices, designations, consents, offers,
acceptances or any other communication shall be in writing and shall be
delivered by certified or registered mail (first class postage prepaid),
guaranteed overnight delivery or confirmed by facsimile:
(a) If to the Company, at:
NeoMedia Technologies, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
With a copy to:
Xxxxxx X. Xxxxxxxx, Esq.
Fishman, Merrick, Miller, Genelly, Springer,
Xxxxxx & Xxxxxxxx, P.C.
Suite 3500
00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
(b) If to any Shareholder, to the address appearing on the books of the
Company or of the transfer agent and registrar for its NeoMedia Stock.
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All such notices and communications shall be deemed to have been duly given
and effective: when delivered by hand, if personally delivered; two business
days after being deposited in the mail, postage prepaid, if mailed by ordinary
United States Mail; the next business day after being delivered for mailing to a
nationally recognized overnight delivery service; and when receipt acknowledged,
if telecopied.
11. NO INCONSISTENT AGREEMENTS. The Company shall not hereafter enter into
any agreement with respect to its securities which is inconsistent with the
rights granted to the Shareholders in this Agreement.
12. SPECIFIC PERFORMANCE. The Company acknowledges that the rights granted
to the Shareholders in this Agreement are of a special, unique and extraordinary
character, and that any breach of this Agreement by the Company could not be
compensated for entirely by damages. Accordingly, if the Company breaches its
obligations under this Agreement, the Shareholders shall be entitled, in
addition to any other remedies that they may have, to enforcement of this
Agreement by a decree of specific performance requiring the Company to fulfill
its obligations under this Agreement.
13. SEVERABILITY. If any provision of this Agreement or any portion thereof
is finally determined to be unlawful or unenforceable, such provision or portion
thereof shall be deemed not to be a part of this Agreement and any portion of
such invalidated provision that is not invalidated by such a determination,
shall remain in full force and effect.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which,
together, shall constitute one and the same instrument.
15. DEFAULTS. A default by any party to this Agreement in such party's
compliance with any of the conditions or covenants hereof or performance of any
of the obligations of such party hereunder shall not constitute a default by any
other party.
16. AMENDMENTS, WAIVERS. This Agreement may not be amended, modified or
supplemented and no waivers of or consents to departures from the provisions
hereof may be given unless consented to in writing by the Company and the
Shareholders.
17. CAPTIONS. The captions contained in this Agreement are for reference
purposes only and are not part of this Agreement.
18. ATTORNEYS' FEES. In any action or proceeding brought to enforce any
provision of this Agreement, the successful party shall be entitled to recover
reasonable attorneys' fees in addition to any other available remedy.
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19. ENTIRE AGREEMENT. This Agreement and the Stock Purchase Agreement
contain the entire agreement among the parties hereto with respect to the
transactions contemplated herein and understandings among the parties relating
to the subject matter hereof. Any and all previous agreements and understandings
between or among the parties hereto regarding the subject matter hereof are,
whether written or oral, superseded by this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date aforesaid.
NEOMEDIA TECHNOLOGIES, INC.
By: /s/ XXXXXXX X. XXXXX
----------------------------------------
Name:
Title:
/s/ XXXXXX X XXXXXX
----------------------------------------
XXXXXX X. XXXXXX
/s/ XXXXXX X. XXXXX
----------------------------------------
XXXXXX X. XXXXX
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