Contract
Exhibit
10.1
THIS AGREEMENT (this “Agreement”), dated
December 15, 2010 is entered into by and between NEOMEDIA TECHNOLOGIES, INC.,
a Delaware corporation (the “Company”), and YA GLOBAL INVESTMENTS, L.P.
(the “Buyer”).
WHEREAS:
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A.
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Reference
is made to certain financing arrangements entered into by and between the
Company and certain of its former and/or current subsidiaries
(collectively, the “Obligors”) and
the Buyer, evidenced by, among other things, the documents, instruments,
and agreements listed on Exhibit X
attached hereto and incorporated herein by reference (collectively,
together with all other documents, instruments, and agreements executed in
connection therewith or related thereto, the “Existing Financing
Documents”).
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B.
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Reference
is also made to the Securities Purchase Agreement (the “Securities Purchase
Agreement”) dated as of May 27, 2010, between the Company and the
Buyer pursuant to which the Company has issued and the Buyer has purchased
the Convertible Debentures and Warrants. All capitalized terms
used but not defined herein shall have the meaning ascribed thereto in the
Securities Purchase Agreement.
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C.
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The
parties desire that, upon the terms and subject to the conditions
contained herein, the Company shall issue and sell to the Buyer, as
provided herein, and the Buyer shall purchase (i) a $450,000 secured
convertible debenture in the form attached hereto as “Exhibit A” (the
“Fifth 2010
Convertible Debenture”, which shall be deemed to be included in the
term Convertible Debentures), which shall be convertible into Common Stock
(as converted such shares of Common Stock, shall be Conversion Shares),
and (ii) warrants substantially in the form attached hereto as “Exhibit B” (the
“Fifth 2010
Warrants”, which shall be deemed to be included in the term
Warrants and together with this Agreement, the Fifth 2010 Convertible
Debenture, the Existing Financing Documents and all other documents,
instruments and agreements executed in connection therewith or related
thereto, the “Financing
Documents”), to acquire up to 1,250,000 additional shares of Common
Stock (as exercised, such shares of Common Stock shall be Warrant Shares)
which shall be funded on the date hereof (the “Fifth 2010
Closing”) for a total purchase price of $450,000, (the “Fifth 2010 Purchase
Price”).
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D.
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In
order to induce the Company to issue and the Buyer to purchase the Fifth
2010 Convertible Debenture and the Fifth 2010 Warrants, the parties desire
to enter into this Agreement.
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NOW, THEREFORE, in
consideration of the mutual covenants and other agreements contained in this
Agreement the Company and the Buyer hereby agree as follows:
1. Purchase
and Sale of Fifth 2010 Convertible Debenture and Fifth 2010
Warrants.
(a) Subject
to the satisfaction (or waiver) of the terms and conditions of this Agreement,
the Buyer agrees to purchase at the Fifth 2010 Closing and the Company agrees to
sell and issue to the Buyer at the Fifth 2010 Closing the Fifth 2010 Convertible
Debenture and Fifth 2010 Warrants.
(b) The
Fifth 2010 Closing shall take place at 10:00 a.m. Eastern Standard Time on the
same business day as the date hereof, subject to notification of satisfaction of
the conditions to the Fifth 2010 Closing set forth in this Agreement (or such
other date as is mutually agreed to by the Company and the
Buyer). The Fifth 2010 Closing shall occur at the offices of
Yorkville Advisors, LLC, 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx Xxxx, Xxx Xxxxxx
00000 (or such other place as is mutually agreed to by the Company and the
Buyer).
(c) Subject
to the satisfaction (or waiver) of the terms and conditions of this Agreement,
on the Fifth 2010 Closing Date, (i) the Buyer shall deliver to the Company such
aggregate proceeds for the Fifth 2010 Convertible Debenture and Fifth 2010
Warrants to be issued and sold to such Buyer at the Fifth 2010 Closing, minus
the fees to be paid directly from the proceeds thereof as set forth herein, and
(ii) the Company shall deliver to the Buyer the Fifth 2010 Convertible
Debenture and Fifth 2010 Warrants duly executed on behalf of the
Company.
2. Representations
and Warranties of Buyer.
(a) The
representations and warranties of the Buyer set forth in Section 2 of the
Securities Purchase Agreement are hereby incorporated by reference with such
changes necessary to relate to this Agreement as if set forth in their entirety
herein (the “Buyer
Representations and Warranties”). For the avoidance of doubt,
in the Buyer Representations and Warranties references to “Securities” shall be
deemed references to the Fifth 2010 Convertible Debenture, the Fifth 2010
Warrants and the shares of Common Stock issuable upon conversion or exercise
thereof, references to “Conversion Shares” shall be deemed to reference the
shares of Common Stock issuable upon conversion of the Fifth 2010 Convertible
Debenture, references to “Warrant Shares” shall be deemed to reference the
shares of Common Stock issuable upon exercise of the Fifth 2010 Warrants and any
reference to “Transaction Documents” shall be deemed to include a reference to
this Agreement, the Fifth 2010 Convertible Debenture and the Fifth 2010
Warrants.
(b) The
Buyer hereby represents and warrants that except as may otherwise be disclosed
on a disclosure schedule attached hereto, the Buyer Representations and
Warranties are true and correct on the date hereof (except for Buyer
Representations and Warranties that speak as of a specific date).
3. Representations
and Warranties of the Company.
(a) The
representations and warranties of the Company set forth in Section 3 of the
Securities Purchase Agreement are hereby incorporated by reference with such
changes necessary to relate to this Agreement as if set forth in their entirety
herein (the “Company
Representations and Warranties”). For the avoidance of doubt,
in the Company Representations and Warranties references to “Securities” shall
be deemed references to the Fifth 2010 Convertible Debenture, the Fifth 2010
Warrants and the shares of Common Stock issuable upon conversion or exercise
thereof, references to “Conversion Shares” shall be deemed to reference the
shares of Common Stock issuable upon conversion of the Fifth 2010 Convertible
Debenture, references to “Warrant Shares” shall be deemed to reference the
shares of Common Stock issuable upon exercise of the Fifth 2010 Warrants and any
reference to “Transaction Documents” shall be deemed to include a reference to
this Agreement, the Fifth 2010 Convertible Debenture and the Fifth 2010
Warrants.
(b) The
Company hereby represents and warrants that except as may otherwise be disclosed
on a disclosure schedule attached hereto or as set forth in the SEC Documents,
such Company Representations and Warranties are true and correct on the date
hereof (except for Company Representations and Warranties that speak as of a
specific date).
4. Covenants.
(a) With
the exception of subsections 4(d), 4(g)(ii), 7(e) and 7(h), the covenants set
forth (or referenced) in Section 4 of the Securities Purchase Agreement are
hereby incorporated by reference with such changes necessary to relate to this
Agreement as if set forth in their entirety herein (the “Covenants”). For
the avoidance of doubt, the Covenants’ references to “Securities” shall be
deemed references to the Fifth 2010 Convertible Debenture, the Fifth 2010
Warrants and the shares of Common Stock issuable upon conversion or exercise
thereof, references to “Conversion Shares” shall be deemed to reference the
shares of Common Stock issuable upon conversion of the Fifth 2010 Convertible
Debenture, references to “Warrant Shares” shall be deemed to reference the
shares of Common Stock issuable upon exercise of the Fifth 2010 Warrants and any
reference to “Transaction Documents” shall be deemed to include a reference to
this Agreement, the Fifth 2010 Convertible Debenture and the Fifth 2010
Warrants.
(b) The
Company will use the proceeds from the sale of the Fifth 2010 Convertible
Debenture for the general corporate and working capital purposes of the Company
and its subsidiaries.
5. Ratification
of Financing Documents; Confirmation of Collateral; Cross-Default;
Cross-Collateralization; Further Assurances.
(a) The
Company hereby ratifies, confirms, and reaffirms all and singular the terms and
conditions of the Existing Financing Documents, and acknowledges and agrees
that, subject to the terms and conditions of this Agreement, all terms and
conditions of the Existing Financing Documents shall remain in full force and
effect and the Company remains liable to the Buyer for the payment and
performance of all amounts due under the Existing Documents, without offset,
defense or counterclaim of any kind, nature or description
whatsoever.
(b) The
Company hereby ratifies, confirms, and reaffirms that (i) the obligations
secured by the Financing Documents include, without limitation, all amounts
hereafter owed or due under the Fifth 2010 Convertible Debenture and/or the
Financing Documents (the “Obligations”), and
any future modifications, amendments, substitutions, or renewals thereof, (ii)
all collateral, whether now existing or hereafter acquired, granted to the Buyer
pursuant to the Financing Documents, or otherwise, shall secure all of the
Obligations until the full, final, and indefeasible payment of the Obligations,
and (iii) the occurrence of a default and/or event of default under any
Financing Document shall constitute a default and an event of default under all
of the Financing Documents, it being the express intent of the Company that all
of the Obligations be fully cross-collateralized, cross-guaranteed, and
cross-defaulted.
(c) The
Company has previously granted the Buyer security interests in all of its
assets, and to confirm the same the Company hereby grants the Buyer a security
interest in all of its assets, whether now existing or hereafter acquired,
including, without limitation, all accounts, inventory, goods, equipment,
software and computer programs, securities, investment property, financial
assets, deposit accounts, chattel paper, electronic chattel paper, instruments,
patents, patent applications, copyrights, trademarks, trademark applications,
trade names, domain names, documents, letter-of-credit rights,
health-care-insurance receivables, supporting obligations, notes secured by real
estate, commercial tort claims, and general intangibles including payment
intangibles, to secure the Obligations free and clear of all liens and
encumbrances, except those in favor of the Buyer.
(d) The
Company shall, from and after the execution of this Agreement, execute and
deliver to the Buyer whatever additional documents, instruments, and agreements
that the Buyer may require in order to correct any document deficiencies, or to
vest or perfect the Financing Documents and the collateral granted therein more
securely in the Investor and/or to otherwise give effect to the terms and
conditions of this Agreement and/or any documents, instruments and agreement
required in connection with, related to, or contemplated by this Agreement, and
hereby irrevocably authorizes the Buyer to file any financing statements
(including financing statements with a generic description of the collateral
such as “all assets”), and take any other normal and customary steps, the Buyer
deems necessary to perfect or evidence the Buyer’s security interests and liens
in any such collateral.
(e) The
Company acknowledges and agrees that this Agreement shall constitute an
authenticated record as such term is defined in the Uniform Commercial
Code.
(f) The
Company acknowledges and agrees that nothing contained in this Agreement, the
Fifth 2010 Convertible Debenture, the Fifth 2010 Warrants or in any document,
instrument or agreement required in connection with, related to or contemplated
thereby shall be deemed to constitute (1) a waiver of any defaults or events of
default now existing or hereafter arising, (2) an agreement to forbear by the
Buyer with respect to such defaults or events of default, or (3) an amendment,
modification, extension or waiver of any of the terms of the Financing Documents
or of any of the Buyer’s rights and remedies thereunder.
6. Conditions. The obligation of
the Buyer hereunder to purchase the Fifth 2010 Convertible Debenture is subject
to the Buyer having received an opinion of counsel from counsel to the Company
in a form satisfactory to the Buyer; provided that this condition is for the
Buyer’s sole benefit and may be waived by the Buyer at any time in its sole
discretion.
7. Fees and
Expenses. The
Company shall pay all of its costs and expenses incurred by it connection with
the negotiation, investigation, preparation, execution and delivery of this
Agreement, the Fifth 2010 Convertible Debenture, the Fifth 2010 Warrants or any
document, instrument or agreement required in connection with, related to or
contemplated thereby. The Company shall pay a structuring and
due diligence fee to Yorkville Advisors, LLC, the Buyer’s investment manager, of
$25,000 which shall be paid directly from the proceeds of the
Closing. The Company acknowledges and agrees that the structuring and
due diligence fee paid shall be nonrefundable, fully earned as of the date of
the execution of this Agreement, and retained by the Lender as a fee and not
applied in reduction of any other Obligations.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the
parties have caused this Agreement to be duly executed as of date first above
written.
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COMPANY:
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NEOMEDIA
TECHNOLOGIES, INC.
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By: /s/
Xxxxxxx X.
Xxxx
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Name:
Xxxxxxx X. Xxxx
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Title: Chief
Financial Officer
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BUYER:
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YA
GLOBAL INVESTMENTS, L.P.
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By: Yorkville
Advisors, LLC
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its
Investment Manager
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By: /s/
Xxxxxx
Xxxxx
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Name: Xxxxxx
Xxxxx
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Title: Managing
Member
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