PATENT SECURITY AGREEMENT
THIS
PATENT SECURITY AGREEMENT (“Agreement”),
is
entered into and made effective as of July 29, 2008, by and between NEOMEDIA
TECHNOLOGIES INC., a
Delaware corporation with its principal place of business located at Xxx
Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000 (the “Parent”),
and
the each subsidiary of the Parent listed on Schedule I attached hereto (each
a
“Subsidiary,”
and
collectively and together with the Parent, the “Company”),
in
favor of the YA
GLOBAL INVESTMENTS, L.P. (the
“Secured
Party”).
WITNESETH:
WHEREAS,
the
Secured Party is the holder of certain secured convertible debentures and notes,
and other evidence of indebtedness issued by the Parent to the Secured Party
as
set forth on Schedule A attached hereto (as may be amended, supplemented and
restated from time to time, the “Original
Debentures”);
WHEREAS,
in
connection with the Securities Purchase Agreement by and among the Parent and
the Secured Party of even date herewith (the “Securities
Purchase Agreement”),
the
Parent has agreed, upon the terms and subject to the conditions of the
Securities Purchase Agreement, to issue to the Secured Party (i) an aggregate
original principal amount of $8,650,000 of senior secured convertible debentures
(the “Convertible
Debentures”),
which
shall be convertible into shares of the Company’s Common Stock (the
“Conversion
Shares”);
and
(ii) warrants (the “Warrants”)
to be
exercisable to acquire additional shares of Common Stock (the “Warrants
Shares”)
initially in that number of shares of Common Stock set forth in the Securities
Purchase Agreement;
WHEREAS,
the
Secured Party and the Parent are parties to the following (collectively, the
“Prior
Debt Documents”):
the
Original Debentures, the Security Agreement dated August 24, 2007 (the
“Prior
Security Agreement”)
and
any other existing security agreements, guaranty agreements, pledge agreements,
credit agreement or other facility, mortgage, other debenture agreements or
instruments, by and between the Secured Party and the Parent, under which there
may be issued, or by which there may be secured or evidenced any indebtedness
for borrowed money or evidencing any outstanding obligation of the Parent to
the
Secured Party, and any other existing documents executed in connection with
any
of the foregoing; and
WHEREAS,
it
is a
condition precedent to the Secured Party purchasing the Convertible Debentures
and Warrants pursuant to the Securities Purchase Agreement that each Company
shall have executed and delivered to the Secured Party this Agreement providing
for the grant to the Secured Party of a security interest in all the Patent
Collateral (as defined below) of each Company to secure all of the Parent's
Obligations (as defined below) under the Securities Purchase Agreement, the
Security Agreement dated July 29, 2008 (the “Security
Agreement”
and
collectively along with the Prior Security Agreement, the “Security
Document”)
this
Agreement, the Convertible Debentures, the Warrants, the Prior Debt Documents,
any other mortgages, pledges, or other collateral documents, and any amendment,
amendment and restatement, modification or supplement to any of the foregoing
(collectively, the “Transaction
Documents”);
WHEREAS,
the
Parent has agreed to provide the Secured Party a general security interest
in
Pledged Property (as this term is defined in the Security Documents) and to
enter into this Agreement in addition to, and not in limitation of, the Security
Documents for the purpose of recording the security interest of the Secured
Party in the Patent Collateral with the United States Patent and Trade Marks
Office;
WHEREAS,
each
Company has duly authorized the execution, delivery and performance of this
Agreement;
NOW
THEREFORE,
for
good and valuable consideration, the receipt of which is hereby acknowledged,
the Company agrees as follows:
SECTION
1. Definitions.
Unless
otherwise defined herein otherwise requires, terms used in this Agreement,
including its preamble and recitals, have the meanings provided in the
Securities Purchase Agreement.
(a) “Obligations”
shall
have the meaning assigned to it in the Security Agreement.
SECTION
2. Grant
of Security Interest.
For good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to secure the payment and performance of all of the Obligations
of
the Parent, the Parent does hereby mortgage, pledge and hypothecate to the
Secured Party and grant to the Secured Party a security interest in all of
the
following property (the “Patent
Collateral”),
now
owned and existing:
(a) all
letters patent and applications for letters patent throughout the world,
including all patent applications in preparation for filing anywhere in the
world and including each patent and patent application referred to in
Schedule
B
hereto;
(b) all
reissues, divisions, continuations, continuations-in-part, extensions, renewals
and reexaminations of any of the items described in clause (a);
(c) all
patent licenses and other agreements providing the Company with the right to
use
any of the items of the type referred to in clauses (a) and (b), including
each
patent license referred to in Schedule
B
hereto;
(d) the
right
to xxx third parties for past, present or future infringements of any Patent
Collateral described in clauses (a) and (b) and, to the extent applicable,
clause (c); and
(e) all
proceeds of, and rights associated with, the foregoing, (including license
royalties and proceeds of infringement suits), and all rights corresponding
thereto throughout the world.
SECTION
3. Security
Agreement.
This
Agreement has been executed and delivered by the Parent for the purpose of
recording the security interest of the Secured Party in the Patent Collateral
relating to patents referred to in Schedule
A
with the
United States Patent and Trade Marks Office, to the extent it may be so
registered therein. The security interest granted hereby has been granted as
a
supplement to, and not in limitation of, the security interest granted to the
Secured Party under the Security Documents. The Security Documents (and all
rights and remedies of the Secured Party thereunder) shall remain in full force
and effect in accordance with their terms.
SECTION
4. Release
of Security Interest.
Upon
payment in full of all Obligations the Secured Party shall, at the Parent’s
expense, execute and deliver to the Company all instruments and other documents
as may be necessary or proper to release the lien on any security interest
in
the Patent Collateral which has been granted hereunder.
SECTION
5. Acknowledgement.
The
Parent does hereby further acknowledge and affirm that the rights and remedies
of the Secured Party with respect to the security interest in the Patent
Collateral granted hereby are more fully set forth in the Security Documents,
the terms and provisions of which (including the remedies provided for therein)
are incorporated by references herein as if fully set forth herein.
SECTION
6. Securities
Purchase Agreement.
Notwithstanding any other term or provision hereof, in the event that any
provisions hereof contradict and are incapable of being construed in conjunction
with the provisions of the Securities Purchase Agreement or the Security
Documents, the provisions of the Securities Purchase Agreement shall take
precedence over those contained herein and, in particular, if any act of a
Company is expressly permitted under the Securities Purchase Agreement or
Security Documents but is prohibited hereunder, any such act shall be permitted
hereunder and any encumbrance expressly permitted under the Securities Purchase
Agreement or Security Documents to exist or to remain outstanding shall be
permitted hereunder and thereunder. This instrument, document or agreement
may
be sold, assigned or transferred by the Agent in accordance with the terms
of
the Securities Purchase Agreement.
SECTION
7. Counterparts.
This
Agreement may be executed by the parties hereto in several counterparts, each
of
which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.
SECTION
8. Additional
Subsidiaries.
The
Parent agrees work with the Secured Party and any not yet named Subsidiaries
to
have this or a similar patent security agreement apply to all Subsidiaries
of
the Parent, to the extent legally possible.
[Remainder
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, the
parties hereto have executed this Patent Security Agreement as of the date
first
above written
|
By: /s/
J. Xxxxx Xxxxxx
|
|
|
Name: J.
Xxxxx Xxxxxx
|
|
|
Title: Chief
Financial Officer
|
STATE
OF ____________________ )
)
SS:
COUNTY
OF __________________ )
BEFORE
ME,
a Notary
Public in and for said County and State, personally appeared the above-named
_______________________ who acknowledged that he/she did sign the foregoing
agreement and that the same is his/her free act and deed.
IN
TESTIMONY WHEREOF,
I have
hereunto set my hand an official seal at __________________,
____________________, this ___ day of __________, 2008.
|
Notary
Public
|
IN
WITNESS WHEREOF, the
parties hereto have executed this Patent Security Agreement as of the date
first
above written.
|
SECURED
PARTY:
|
||
|
YA
GLOBAL INVESTMENTS, L.P.
|
||
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By:
|
Yorkville
Advisors, LLC
|
|
|
Its:
|
Investment
Manager
|
|
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By: /s/
Xxxx Xxxxxx
|
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Name:
Xxxx Xxxxxx
|
||
|
Title:
Portfolio Manager
|
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SCHEDULE
I
LEGAL
NAMES; ORGANIZATIONAL IDENTIFICATION NUMBERS; STATES OF
ORGANIZATION
|
Company’s
Name
|
State
of
Organization
|
Employer
ID
|
Organizational
ID
|
||||
|
Delaware
|
|
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SCHEDULE
A
ORIGINAL
DEBENTURES
|
August
24, 2006
|
$
|
5,000,000
|
||
|
December
29, 2006
|
2,500,000
|
|||
|
March
27, 2007
|
7,458,651
|
|||
|
August
24, 2007
|
1,775,000
|
|||
|
April
10, 2008
|
390,000
|
|||
|
May
16, 2008
|
500,000
|
|||
|
May
29, 2008
|
790,000
|
|||
|
July
10, 2008
|
137,750
|
SCHEDULE
B
US
PATENTS AND APPLICATIONS
