8-K out:
Form 8-K for NEOMEDIA TECHNOLOGIES INC
3-Jun-2011
Entry into a Material Definitive Agreement, Unregistered Sale of Equity
Item 1.01. Entry Into a Material Definitive Agreement
Agreement and Debenture Closing, May, 2011
On May 31, 2011, 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 of $450,000 (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 May 31, 2011. 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 $0.15 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 $0.10 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 Tenth Ratification Agreement dated May 31, 2011 (the "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 Ratification Agreement is incorporated by reference herein and attached as Exhibit 10.6 hereto.
In connection with the Agreement, the Company also entered into those certain Irrevocable Transfer Agent Instructions (the "ITAI") with the Buyer, an 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 10.7 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, Ratification Agreement and ITAI 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, and 10.7, respectively, to this Current Report on Form 8-K and incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity Securities
See Item 1.01 herein above.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Exhibits:
EXHIBIT DESCRIPTION LOCATION
Exhibit 10.1 Agreement, dated May 31, 2011, by Provided Herewith
and between the Company and YA
Global Investments, L.P.
Exhibit 10.2 Secured Convertible Debenture, No. Provided Herewith
NEOM-11-5, dated May 31,
2011, issued by the Company to YA
Global Investments, L.P.
Exhibit 10.3 Warrant, No. NEOM-0511, dated May Provided Herewith
31, 2011, issued by the Company to
YA Global Investments, L.P.
Exhibit 10.4 Security Agreement, dated July 29, Incorporated by reference to
2008, by and among the Company, each Exhibit 10.3 in the
of the Company's subsidiaries made a Company's Current Report on
party thereto and YA Global Form 8-K as filed with the
Investments, L.P. SEC on August 4, 2008
Exhibit 10.5 Patent Security Agreement, dated Incorporated by reference to
July 29, 2008, by and among the Exhibit 10.4 in the
Company, each of the Company's Company's Current Report on
subsidiaries made a party thereto Form 8-K as filed with the
and YA Global Investments, L.P. SEC on August 4, 2008
Exhibit 10.6 Ratification Agreement, dated May Provided Herewith
31, 2011, by and among the Company,
each of the Company's subsidiaries
made a party thereto, and YA Global
Investments, L.P.
Exhibit 10.7 Irrevocable Transfer Agent Provided Herewith
Instructions, dated May 31, 2011, by
and among the Company, YA Global
Investments, L.P., David Gonzalez,
Esq. and WorldWide Stock Transfer,
LLC
