The Borrower has represented to the Lender that it requires additional financing in order to pursue one or more transactions within the next ninety (90) days and that the expected proceeds from the consummation of such transaction(s) will be sufficient to repay the New Loan (as defined herein) and to fund the Borrower’s ongoing business operations for twelve (12) months.
I concede that I was mistaken when I posted that the pursuit of "one or more transactions" is stated in the Agreement to involve the sale of assets.
However, the transactions most certainly do not involve the sale of Gavitec, NeoMedia's merger with an entity or other business combination transaction as same is ruled out by NeoMedia under No. 10 of Form D, which is at link below.
Page 24 of the 10Q filed 5-17-10 lists the business prospects of NeoMedia, none of which are business prospects capable of producing net proceeds of approximately $7.4 million within 90 days or even 10 years.
The second Neustar Pilot Program Agreement between NeoMedia and Neustar was entered into on 2-12-10. As shown on page 24 of the 10Q there has been NO licensing or sublicensing of NeoMedia's IP post Scanbuy out of Court settlement in October 2009. Note the following Section 5 of the Agreement:
5. IP Licensing Fee Participants doing business in the United States and Mexico who do not have an Intellectual Property Licensing Agreement with NeoMedia Technologies, Inc. (“NeoMedia) , a Delaware corporation with a principal place of business at Two Concourse Parkway, Suite 500, Atlanta, Georgia, 30328, must agree to license the NeoMedia patents from Neustar for transactions being presented to the Global Clearinghouse in the United States under the terms and conditions of the separate license agreement attached as Exhibit 4.
Since page 24 lists NO new licensees or sublicensees since the last license was issued in October 2009, it is concluded there has been NO BUSINESSES willing to participate in the pilot program, with the exception of perhaps Scanbuy and Mobile Tag, the only businesses licensed to operate patent 6,199,048.
Because as stated in the Agreement and noted above that a license is required to participate in the Neustar Pilot Program and the fact that page 24 does not list any licensees or sublicensees subsequent to the last license issued in October 2009, it is concluded that the Neustar pilot program is a flop. And no surprise there. Microsoft Tag is free to businesses and far superior to any other 2D code available on the market today.
NeoMedia has no assets of substantial value. IMO it is an outright lie and known to both NeoMedia and Cornell that there is no transaction that NeoMedia can consummate at any time, let alone within 90 days, that will fetch $2.006 million plus funds required to pay for 12 months of operational costs.
I contend Cornell and NeoMedia were forced by the Klawonn lawsuit to end the relationship and have entered into the Ratification Agreement knowing they plan to take NeoMedia into bankruptcy. Cornell now has a written and executed Agreement from NeoMedia, agreeing on certain matters of importance to Cornell in both the upcoming litigation, Klawonn v YA Global and in the bankruptcy of NeoMedia.
The only option available to Cornell is to pursue NeoMedia's bankruptcy to offset the monetary judgment to be rendered against it in Klawonn v YA Global. NeoMedia is now useless to Cornell as a means to make huge profits from manipulating NEOM common stock since it is now under legal fire for engaging in unlawful short swing trading of NEOM common stock while a beneficial owner of NEOM.
Mandatory Cash Redemption is defined at Section 3(b) of the Debenture.
Mandatory Cash Redemption. At any time after August 26, 2010, the Holder shall have the right to require the Company to redeem (a “Mandatory Redemption”) a portion or all amounts outstanding under this Debenture prior the Maturity Date. In order to require a Mandatory Redemption, the Holder shall first notify the Company in writing (the “Mandatory Redemption Notice”) that it is exercising its right to require a Mandatory Redemption. Upon thirty (30) Business Days (such date, the “Redemption Date”) following receipt by the Company of the Mandatory Redemption Notice, the Company must deliver to the Holder an amount in cash equal to the Mandatory Redemption Amount. The “Mandatory Redemption Amount” shall be an amount in cash equal to the greater of (i) the Principal amount to be redeemed plus accrued Interest through the Redemption Date and (ii) the lesser of (A) the product obtained by multiplying (x) the Conversion Rate (as defined below) based on a Conversion Amount (as defined below) equal to the Principal amount to be redeemed plus accrued Interest through the Redemption Date by (y) lowest Volume Weighted Average Price during the 60 Trading Days immediately preceding the Redemption Date and (B) 149% of the Principal amount to be redeemed less any interest that has been prepaid on such Principal amount in the calendar year in which such Redemption Date occurs.
CORRECTION, NeoMedia has thirty business days from receipt of Cornell's Mandatory Redemption Notice. Previously I had posted the mandatory redemption is payable immediately upon Cornell's notification to NeoMedia.
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