NeoMedia Technologies, Inc (NEOM)

[TradingCharts]

8-K On August 13, 2010, NeoMedia Technologies, Inc., a Delaware corporation (the “Company”), entered into an Agreement (the “ Agreement ”), a copy of which is attached hereto as Exhibit 10.1 and incorporated by reference herein, to issue and sell a secured convertible debenture to YA Global Investments, L.P. (the “Buyer”) in the principal amount $550,000 (the “Debenture”), a copy of which is attached hereto as Exhibit 10.2 and incorporated by reference herein. The closing of the transaction was held on August 13, 2010. In addition to the Debenture, the Company also issued a warrant to the Buyer to purchase 1,000,000 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), for an exercise price of $0.20 per share (the “Warrant”), a copy of which is incorporated by reference herein and attached hereto as Exhibit 10.3.


The Debenture shall mature on July 29, 2012 (the “Maturity Date”) and shall accrue interest at a rate equal to fourteen percent (14%) per annum and such interest shall be paid on the Maturity Date (or sooner as provided in the Debenture) in cash or, provided that certain Equity Conditions are satisfied (as such term is defined in the Debenture), in shares of Common Stock at the applicable Conversion Price (as defined in the Debenture). At any time, the Buyer shall be entitled to convert any portion of the outstanding and unpaid principal and accrued interest thereon into fully paid and non-assessable shares of Common Stock at a price equal to the lesser of $0.20 and ninety-five percent (95%) of the lowest volume weighted average price of the Common Stock during the sixty (60) trading days immediately preceding each conversion date.


The Debenture is secured by certain pledges made with respect to the assets of the Company and its subsidiaries as set forth in the Second Ratification Agreement dated August 13, 2010 (the “Second Ratification Agreement”), and that certain Security Agreement (the “Security Agreement”) and Patent Security Agreement (the “Patent Security Agreement”) both dated July 29, 2008, by and among the Company, each of the Company’s subsidiaries made a party thereto, and the Buyer. Copies of the Security Agreement and the Patent Security Agreement are incorporated by reference herein and attached by reference hereto as Exhibits 10.4 and 10.5, respectively. The Second Ratification Agreement is incorporated by reference herein and attached as Exhibit 10.7 hereto. Pursuant to the Second Ratification Agreement, the Company affirmend the cross-collateralization of all its obligations to the Buyer. In connection with the Second Ratification Agreement, on August 13, 2010 the Company’s wholly-owned subsidiary NeoMedia Europe AG, (“NEOMAG”) entered into an Agreement on the Pledge of Intellectual Property Rights as Collateral (the “IP Pledge”). A copy of the IP Pledge is incorporated by reference herein and attached hereto as Exhibit 10.6. Also on August 13, 2010, NEOMAG and the Buyer entered into a Security Transfer of Moveable Assets (the “Security Transfer”) pursuant to which NEOMAG granted to the Buyer a security interest in the form of a security assignment over its movable assets. A copy of the Security Transfer is incorporated herein by reference and attached hereto as Exhibit 10.9. As a result of the execution of the IP Pledge and the Security Transfer, NEOMAG has become a gurantor of the Company’s obligations to the Buyer.


In connection with the Agreement, the Company also entered into those certain Irrevocable Transfer Agent Instructions with the Buyer, the Escrow Agent and WorldWide Stock Transfer, LLC, the Company’s transfer agent, a copy of which is incorporated herein by reference and attached hereto as Exhibit 10.8 hereto.


The Company shall not affect any conversion, and the Buyer shall not have the right to convert any portion of the Debenture to the extent that after giving effect to such conversion, the Buyer (together with the Buyer’s affiliates) would beneficially own in excess of 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to such conversion, except for not less than sixty-five (65) days prior written notice from the Buyer.


The Company shall have the right to redeem a portion or all amounts outstanding (subject to certain conditions) in the Debenture via Optional Redemption (as defined in the Debenture) by paying the amount equal to the principal amount being redeemed plus a redemption premium equal to ten percent (10%) of the principal amount being redeemed, and accrued interest.


The foregoing descriptions of the Agreement, Debenture, Warrant, Security Agreement, Patent Security Agreement, IP Pledge, Second Ratification Agreement, ITAI and Security Transfer do not purport to be complete and are qualified in their entirety by reference to such documents, which are attached as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7, 10.8 and 10.9 respectively, to this Current Report on Form 8-K and incorporated herein by reference.
http://www.sec.gov/Archives/edgar/data/1022701/000114420410045599/0001144204-10-045599-index.htm