U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: December 2, 2002
NEOMEDIA TECHNOLOGIES, INC.
---------------------------
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 0-21743 36-3680347
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(State or Other (Commission File Number) (IRS Employer
Jurisdiction Identification No.)
Incorporation)
2201 SECOND STREET, SUITE 402, FORT MYERS, FLORIDA 33901
(Address of Principal Executive Offices) (Zip Code)
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(239) - 337-3434
(Registrant's Telephone Number, including Area Code
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ITEM 5. OTHER EVENTS.
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On December 2, 2002, NeoMedia Technologies, Inc. a Delaware corporation
(the "Company") issued to Michael Kesselbrenner, a private investor (the
"Investor"), a Promissory Note (the "Promissory Note") in the principal amount
of $165,000, bearing interest at a rate of 12% per annum, with a maturity of 150
days. The Company will pay an administrative fee of $16,500 and legal fees of
$10,000 relating to the issuance of the Promissory Note, resulting in net
proceeds to the Company of $138,500.
In connection with the default provision of the Promissory Note, the
Company entered into a Pledge Agreement, dated December 2, 2002 (the "Pledge
Agreement"), by and between the Company and the investor under which the Company
issued 53,620,023 shares to an unrelated third party escrow agent as collateral
for the Promissory Note. In the event of default, the third party would issue
the shares from escrow to the Investor, and the Company would issue additional
shares as required to increase the Investor's ownership of securities of the
Company to equal 51% of the Company's fully-diluted outstanding shares at the
time of such default.
ITEM 7. FINANCIAL STATEMENT, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
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EXHIBIT NO. DESCRIPTION LOCATION
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99.1 Promissory Note, dated December Provided herewith
2, 2002, in the principal amount
of $165,000, payable to Michael
Kesselbrenner.
99.2 Pledge Agreement, dated December Provided herewith
2, 2002, by and between the
Company and Michael Kesselbrenner
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NeoMedia Technologies, Inc.
Date: December 3, 2002 By:/s/ Charles T. Jensen
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Charles T. Jensen, President, Chief
Operating Officer, Acting Chief Executive
Officer and Director
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EXHIBIT 99.1
NON NEGOTIABLE PROMISSORY NOTE
DECEMBER 2, 2002
JERSEY CITY, NEW JERSEY $165,000.00
FOR VALUE RECEIVED, the undersigned, NEOMEDIA TECHNOLOGIES INC.,
incorporated and existing under the laws of the State of Delaware with a
principal office located at 2201 Second Street - Suite 402, Fort Myers, Florida
33901 (the "COMPANY"), promises to pay MICHAEL KESSELBRENNER (the "HOLDER") at 1
West Ridgewood Avenue, Suite 303, Paramus, New Jersey 07652 or other address as
the Holder shall specify in writing, the principal sum of ONE HUNDRED SIXTY FIVE
THOUSAND (U.S.) DOLLARS AND 00/100 ($165,000.00), of which Eighty Five Thousand
Dollars ($85,000) shall be funded on the date hereof, together with interest
thereon at the rate of twelve percent (12%) per annum and will be payable
pursuant to the following terms:
1. AMOUNT OF NOTE. The face amount of this Non Negotiable Promissory
Note (this "Note") plus interest at the rate of twelve percent (12%) per annum
shall be payable to the Holder within one hundred fifty (150) days from the date
hereof.
2. WAIVER AND CONSENT. To the fullest extent permitted by law and
except as otherwise provided herein, the Company waives demand, presentment,
protest, notice of dishonor, suit against or joinder of any other person, and
all other requirements necessary to charge or hold the Company liable with
respect to this Note.
3. COSTS, INDEMNITIES AND EXPENSES. The Company agrees to pay all
reasonable fees and costs incurred by the Holder in collecting or securing or
attempting to collect or secure this Note, including reasonable attorneys' fees
and expenses, whether or not involving litigation and/or appellate or bankruptcy
proceedings. The Company agrees to pay any documentary stamp taxes, intangible
taxes or other taxes which may now or hereafter apply to this Note or any
payment made in respect of this Note, and the Company agrees to indemnify and
hold the Holder harmless from and against any liability, costs, attorneys' fees,
penalties, interest or expenses relating to any such taxes, as and when the same
may be incurred.
4. EVENT OF DEFAULT.
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(a) Upon an Event of Default (as defined below), the entire principal
balance and accrued interest outstanding under this Note, and all other
obligations of the Company under this Note, shall be immediately due and payable
without any action on the part of the Holder, and the Holder shall be entitled
to seek and institute any and all remedies available to it. No remedy conferred
under this Note upon the Holder is intended to be exclusive of any other remedy
available to the Holder, pursuant to the terms of this Note or otherwise. No
single or partial exercise by the Holder of any right, power or remedy hereunder
shall preclude any other or further exercise thereof. The failure of the Holder
to exercise any right or remedy under this Note or otherwise, or delay in
exercising such right or remedy, shall not operate as a waiver thereof. An
"EVENT OF DEFAULT" shall be deemed to have occurred upon the occurrence of any
of the following: (i) the Company should fail for any reason or for no reason to
make payment of the outstanding principal balance plus accrued interest pursuant
to this Note within the time prescribed herein or the Company breaches or fails
to satisfy any other obligation or requirement of the Company under this Note;
or (ii) an event of default occurs under the terms of that certain Pledge
Agreement (the "PLEDGE AGREEMENT") of even date herewith among the Holder and
the Company; or (iv) any proceedings under any bankruptcy laws of the United
States of America or under any insolvency, reorganization, receivership,
readjustment of debt, dissolution, liquidation or any similar law or statute of
any jurisdiction now or hereinafter in effect (whether in law or at equity) is
filed by or against the Company or for all or any part of its property.
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(b) If an Event of Default occurs the Company shall issue to the Holder
as outlined in the Pledge Agreement "non-dilutive" shares of the Company's
Common Stock in an amount equal to fifty one percent (51%) of the total
outstanding and voting Common Stock of the Company on a fully diluted basis.
(c) In the event the shares of the Company's Common Stock held pursuant
to the Pledge Agreement dated the date hereof upon release to Holder do not
equal fifty one percent (51%) of the total outstanding and voting Common Stock
of the Company on a fully diluted basis, the Company shall issue to the Holder
with in two (2) days from the date thereof shares of the Company's Common Stock,
in excess of those released to the Holder, so that the total number of shares
issued to the Holder equal fifty one percent (51%) of the total outstanding and
voting Common Stock of the Company on a fully diluted basis.
5. PROHIBITION ON ISSUANCES OF ADDITIONAL SHARES OF COMMON STOCK,
CONSOLIDATION OR MERGER.
(a) As long as principal or interest under this Note remains
outstanding, the Company shall not, without the prior written consent of the
Holder which shall not be unreasonably withheld, issue or sell any capital stock
of the Company except for (i) any issuances for which the proceeds will be used
to pay off the Company's obligations hereunder or (ii) any issuance to pay off
or settle obligations of the Company. Prior to the issuance of any such capital
stock, the Company shall issue an additional number of shares of Common Stock to
the Holder such that the Holder shall at all times have fifty one percent (51%)
of the outstanding Common Stock of the Company on a fully diluted basis.
(b) As long as principal or interest under the Promissory Note remains
outstanding, the Company shall not effect any merger or consolidation of the
Company with or into, or a transfer of all or substantially all the assets of
the Company to another entity.
6. MAXIMUM INTEREST RATE. In no event shall any agreed to or actual
interest charged, reserved or taken by the Holder as consideration for this Note
exceed the limits imposed by New Jersey law. In the event that the interest
provisions of this Note shall result at any time or for any reason in an
effective rate of interest that exceeds the maximum interest rate permitted by
applicable law, then without further agreement or notice the obligation to be
fulfilled shall be automatically reduced to such limit and all sums received by
the Holder in excess of those lawfully collectible as interest shall be applied
against the principal of this Note immediately upon the Holder's receipt
thereof, with the same force and effect as though the Company had specifically
designated such extra sums to be so applied to principal and the Holder had
agreed to accept such extra payment(s) as a premium-free prepayment or
prepayments.
7. CANCELLATION OF NOTE. Upon the repayment by the Company of all of
its obligations hereunder to the Holder, including, without limitation, the face
amount of this Note, plus accrued but unpaid interest, the indebtedness
evidenced hereby shall be deemed canceled and paid in full. Except as otherwise
required by law or by the provisions of this Note, payments received by the
Holder hereunder shall be applied first against expenses and indemnities, next
against interest accrued on this Note, and next in reduction of the outstanding
principal balance of this Note.
8. SECURITY. The Company's obligations under this Note and all amounts
due hereunder are secured by the Pledge Agreement.
9. SEVERABILITY. If any provision of this Note is, for any reason,
invalid or unenforceable, the remaining provisions of this Note will
nevertheless be valid and enforceable and will remain in full force and effect.
Any provision of this Note that is held invalid or unenforceable by a court of
competent jurisdiction will be deemed modified to the extent necessary to make
it valid and enforceable and as so modified will remain in full force and
effect.
10. AMENDMENT AND WAIVER. This Note is non negotiable and may be
amended, or any provision of this Note may be waived, provided that any such
amendment or waiver will be binding on a party hereto only if such amendment or
waiver is set forth in a writing executed by the parties hereto. The waiver by
any such party hereto of a breach of any provision of this Note shall not
operate or be construed as a waiver of any other breach.
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11. SUCCESSORS. Except as otherwise provided herein, this Note shall
bind and inure to the benefit of and be enforceable by the parties hereto and
their permitted successors and assigns.
12. ASSIGNMENT. This Note shall not be directly or indirectly assignable
or delegable by the Company.
13. NO STRICT CONSTRUCTION. The language used in this Note will be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any party.
14. FURTHER ASSURANCES. Each party hereto will execute all documents and
take such other actions as the other party may reasonably request in order to
consummate the transactions provided for herein and to accomplish the purposes
of this Note.
15. NOTICES, CONSENTS, ETC. Any notices, consents, waivers or other
communications required or permitted to be given under the terms hereof must be
in writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) trading day after deposit
with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
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If to the Company: Neomedia Technologies Inc.
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2201 Second Street - Suite 402
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Fort Meyers, Florida 33901
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Attention: Charles T. Jensen
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Telephone: (941) 337-3434
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Facsimile: (941) 337-3668
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With Copies to: Kirkpatrick & Lockhart LLP
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Miami Center, Suite 2000
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201 S. Biscayne Boulevard
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Miami, Florida 33131
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Attention: Clayton E. Parker, Esq
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Telephone: (305) 539-3306
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Facsimile: (305) 358-7095
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If to Holder: Michael Kesselbrenner
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1 West Ridgewood Avenue - Suite 303
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Paramus, New Jersey 07652
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Telephone: (201) 689-9400
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Facsimile: (201) 689-9404
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or at such other address and/or facsimile number and/or to the attention
of such other person as the recipient party has specified by written notice
given to each other party three (3) trading days prior to the effectiveness of
such change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by a nationally recognized overnight delivery
service, shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.
16. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The
Holder's remedies provided in this Note shall be cumulative and in addition to
all other remedies available to the Holder under this Note, at law or in equity
(including a decree of specific performance and/or other injunctive relief), no
remedy of the Holder contained herein shall be deemed a waiver of compliance
with the provisions giving rise to such remedy and nothing herein shall limit
the Holder's right to pursue actual damages for any failure by the Company to
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comply with the terms of this Note. Every right and remedy of the Holder under
any document executed in connection with this transaction, including but not
limited to this Note and the Pledge Agreement or under applicable law may be
exercised from time to time and as often as may be deemed expedient by the
Holder. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder and that the remedy at law
for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened breach, the Holder shall be entitled, in
addition to all other available remedies, to an injunction restraining any
breach, and specific performance without the necessity of showing economic loss
and without any bond or other security being required.
17. GOVERNING LAW; JURISDICTION. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New Jersey, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New Jersey or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New Jersey. Each party
hereby irrevocably submits to the exclusive jurisdiction of the Superior Courts
of the State of New Jersey, sitting in the city of Jersey City, Hudson County,
New Jersey and the Federal District Court for the District of New Jersey sitting
in Newark, New Jersey, for the adjudication of any dispute hereunder or in
connection herewith or therewith, or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
18. NO INCONSISTENT AGREEMENTS. None of the parties hereto will
hereafter enter into any agreement which is inconsistent with the rights granted
to the parties in this Note.
19. THIRD PARTIES. Nothing herein expressed or implied is intended or
shall be construed to confer upon or give to any person or entity, other than
the parties to this Note and their respective permitted successor and assigns,
any rights or remedies under or by reason of this Note.
20. COMMITMENT FEE. As a commitment fee for the Holder to loan the
monies to the Company hereunder, the Company shall pay to Cornell Capital
Partners, LP upon execution hereof, a commitment fee of Sixteen Thousand Five
Hundred (U.S.) dollars ($16,500).
21. LEGAL FEE. The Company shall pay Butler Gonzalez, LLP, upon the
execution hereof, a legal fee of Ten Thousand (U.S.) dollars ($10,000).
22. WAIVER OF JURY TRIAL. AS A MATERIAL INDUCEMENT FOR THE HOLDER TO
LOAN TO THE COMPANY THE MONIES HEREUNDER, THE COMPANY HEREBY WAIVES ANY RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS AGREEMENT
AND/OR ANY AND ALL OF THE OTHER DOCUMENTS ASSOCIATED WITH THIS TRANSACTION.
23. ENTIRE AGREEMENT. This Note (including the recitals hereto) and the
Pledge Agreement set forth the entire understanding of the parties with respect
to the subject matter hereof, and shall not be modified or affected by any
offer, proposal, statement or representation, oral or written, made by or for
any party in connection with the negotiation of the terms hereof, and may be
modified only by instruments signed by all of the parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Note is executed by the undersigned as of the date
hereof.
NEOMEDIA TECHNOLOGIES INC.
By:/s/ Charles T. Jensen
-----------------------------
Name: Charles T. Jensen
Its: President and Chief Operating Officer
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EXHIIBIT 99.2
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT ("AGREEMENT") dated as of December 2, 2002, is
given, by NEOMEDIA TECHNOLOGIES INC., a Delaware Corporation (the "PLEDGOR"
and/or the "COMPANY"), in favor of MICHAEL KESSELBRENNER ("KESELBRENNER").
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in a Non Negotiable Promissory Note of even date
herewith given by the Company to Kesselbrenner (as amended, restated,
supplemented or otherwise modified from time to time, the "PROMISSORY NOTE").
WHEREAS:
A. The Pledgor and Kesselbrenner wish to provide for the funding
contemplated under the Promissory Note in the amount of One Hundred Sixty Five
Thousand (U.S.) Dollars ($165,000).
B. To induce Kesselbrenner to enter into the Promissory Note, the
Pledgor has agreed to secure their obligations under the Promissory Note by a
pledge to Kesselbrenner and grant a first-priority security interest to
Kesselbrenner of "non-dilutive" shares of the Company's Common Stock in an
amount equal to fifty one percent (51%) of the total outstanding and voting
Common Stock of the Company on a fully diluted basis, shares of the Company's
common stock par value $0.01 per share (the "PLEDGED STOCK") which are
authorized and issued to Kesselbrenner and delivered to Kirkpatrick & Lockhart,
LLP as set forth in Section 2 hereof. The Pledged Stock is more fully described
on EXHIBIT A attached hereto constitutes fifty one percent (51%) of the total
outstanding and voting Common Stock of the Company on a fully diluted basis.
C. The Pledgor acknowledges that without this Agreement Kesselbrenner
would not be willing to enter into the Promissory Note.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
set forth herein, and for other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. RECITALS. The above recitals are true and correct and same are
incorporated into this Agreement by this reference.
2. PLEDGE OF STOCK; GRANT OF SECURITY INTEREST. (a) For value
received the Pledgor hereby grants a first-priority security interest in and to
Kesselbrenner, and have delivered to Kirkpatrick and Lockhart LLP, counsel to
the Company, certificates representing or deposited, the Pledged Stock, to
secure the payment and performance of all obligations of the Company to
Kesselbrenner under the Promissory Note (the aforesaid obligations and
liabilities of the Company being herein called the "SECURED OBLIGATIONS", and
all of the documents, agreements and instruments between the Pledgor and/or
Kesselbrenner evidencing or otherwise pertaining to, the Secured Obligations
being herein collectively called the "OPERATIVE DOCUMENTS"). The Pledgor
unconditionally agrees that if the Company fails for any reason or for no reason
to repay Kesselbrenner all amounts owed under the Promissory Note within the
period of time provided in the Promissory Note, that Kesselbrenner shall have
the right to request that Kirkpatrick and Lockhart, LLP transfer such Pledged
Stock to Kesselbrenner, so that Kesselbrenner can take and/or sell the Pledged
Stock.
(b) In the event the Pledged Stock upon release to Kesselbrenner does
not equal fifty one percent (51%) on a non-diluted basis of the total
outstanding and voting Common Stock of the Company on a fully diluted basis, the
Company shall issue to Kesselbrenner with in two (2) days from the date thereof
shares of the Company's Common Stock, in excess of those released to
Kesselbrenner, so that the total number of shares issued to Kesselbrenner equal
fifty one percent (51%) on a non-diluted basis of the total outstanding and
voting Common Stock of the Company.
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3. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and
warrants to, and agree with, Kesselbrenner as follows:
a. The Pledged Stock is represented by the stock certificate or
certificates described on Exhibit A attached hereto under the Kesselbrenner's
name, as applicable, have been delivered to Kirkpatrick and Lockhart, LLP by the
Pledgor. In the Event of Default, Kirkpatrick & Lockhart, LLP, as defined in the
Promissory Note upon notice by Kesselbrenner shall transfer such Pledged Stock
to Kesselbrenner. The Pledged Stock was validly issued, and upon an Event of
Default shall be fully paid and non-assessable. The Pledged Stock is not subject
to any voting agreement, voting trust or similar agreement or arrangement. The
shares of Pledged Stock are restricted securities as such term is defined in
Rule 144 of the Securities Act of 1933. The Pledged Stock is free and clear of
any and all restrictions, liens and encumbrances other than those in favor of
Kesselbrenner. The Pledgor further covenant and agree to keep the Pledged Stock
free and clear of any and all restrictions liens and encumbrances other than
those in favor of Kesselbrenner. If an Event of Default occurs the Pledgor shall
not take any action to hinder or prevent the transfer of the Pledged Stock to
Kesselbrenner. Furthermore, as long as the principal balance of the Promissory
Note is due and outstanding the Pledgor shall not transfer the Pledged Stock
from Kirkpatrick & Lockhart, LLP.
b. The Pledgor has full power, right and authority to enter into and
perform its obligations under this Agreement, and this Agreement has been duly
executed and delivered by the Pledgor and constitutes the valid and binding
obligations of the Pledgor and is enforceable against the Pledgor in accordance
with its terms. No permits, approvals or consents of or notifications to (1) any
governmental entities or (2) any other persons or entities are necessary in
connection with the execution, delivery and performance by the Pledgor of this
Agreement and the consummation by the Pledgor of the actions contemplated
hereby. Neither the execution and delivery of this Agreement by the Pledgor nor
the performance by any of them of the actions contemplated hereby will:
i. violate or conflict with or result in a breach of
any provision of any law, statute, rule, regulation, order, permit, judgment,
ruling, injunction, decree or other decision (collectively, "Rules") of any
court or other tribunal or any governmental entity or agency binding on a
Pledgor or the Pledgor's properties, or conflict with or cause an event of
default under any contract or agreement of a Pledgor; or
ii. require any authorization, consent, approval,
exemption or other action by or notice to any court, administrative or
governmental body, person, entity or any other third party.
4. TITLE; STOCK RIGHTS, DIVIDENDS, ETC. After an Event of Default
the Pledgor will warrant and defend Kesselbrenner 's title to the Pledged Stock,
and the lien herein created, against all claims of all persons, and will
maintain and preserve such security interest. It is understood and agreed that
the collateral hereunder includes any stock rights, stock dividends, liquidating
dividends, new securities, payments, distributions and proceeds (including cash
dividends and sale proceeds) and other property to which the Pledgor may become
entitled by reason of the ownership of the Pledged Stock during the existence of
this Agreement, and any such property received by the Pledgor shall be held in
trust and forthwith delivered to Kirkpatrick & Lockhart, LLP to be held
hereunder in accordance with the terms of this Agreement.
5. EVENTS OF DEFAULT; REMEDIES. Upon the occurrence of any Event
of Default under the Promissory Note, Kesselbrenner shall have all of the rights
and remedies provided by law and/or by this Agreement, including but not limited
to all of the rights and remedies of a secured party under the New Jersey
Uniform Commercial Code, and the Pledgor hereby authorize Kirkpatrick and
Lockhart, LLP to release all of the Pledged Stock to Kesselbrenner for
Kesselbrenner to sell all or any part of the Pledged Stock at public or private
sale and to apply the proceeds of such sale to the costs and expenses thereof
(including the reasonable attorneys' fees and disbursements incurred by
Kesselbrenner ) and then to the payment of the other Secured Obligations as set
forth below. Any requirement of reasonable notice shall be met if Kesselbrenner
sends such notice to the Pledgor within one (1) Trading Day of the date of sale,
disposition or other event giving rise to the required notice. The Pledgor
expressly authorizes such sale or sales of the Pledged Stock in advance of and
to the exclusion of any sale or sales of or other realization upon owed to
Kesselbrenner. Kesselbrenner shall be under no obligation to reserve rights
against prior parties.
6. ADDITIONAL REMEDIES. Upon the occurrence of an Event of
Default under the Promissory Note, Kesselbrenner shall become the outright owner
of the Pledged Stock.
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7. TERMINATION. This Agreement shall terminate upon the
performance and satisfaction of the Secured Obligations, and upon such
termination Kesselbrenner shall assign, transfer and deliver without recourse
and without warranty the Pledged Stock to the Pledgor (and any property received
in respect thereof). Notwithstanding anything to the contrary herein, so long as
the Secured Obligations is zero or would be made zero simultaneously with the
termination hereof, the Pledgor shall have the right to terminate this Agreement
at any time by providing written notice of such termination to Kesselbrenner and
upon such termination, Kesselbrenner shall assign, transfer and deliver without
recourse or without warranties the Pledged Stock to the Pledgor or any property
received in respect thereof and shall instruct Kirkpatrick & Lockhart, LLP to
release the Pledged Stock to the Pledgor.
8. SEVERABILITY. If any provision of this Agreement is, for any
reason, invalid or unenforceable, the remaining provisions of this Agreement
will nevertheless be valid and enforceable and will remain in full force and
effect. Any provision of this Agreement that is held invalid or unenforceable by
a court of competent jurisdiction will be deemed modified to the extent
necessary to make it valid and enforceable and as so modified will remain in
full force and effect.
9. AMENDMENT AND WAIVER. This Agreement may be amended, or any
provision of this Agreement may be waived, provided that any such amendment or
waiver will be binding on a party hereto only if such amendment or waiver is set
forth in a writing executed by the parties hereto. The waiver by any such party
hereto of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any other breach.
10. SUCCESSORS. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by the
parties and their successors and assigns.
11. ASSIGNMENT. This Agreement shall not be directly or indirectly
assignable or delegable by the Pledgor.
12. NO STRICT CONSTRUCTION. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction will be applied against any party.
13. FURTHER ASSURANCES. Each party hereto will execute all
documents and take such other actions as the other parties may reasonably
request in order to consummate the transactions provided for herein and to
accomplish the purposes of this Agreement.
14. Notices, Consents, etc. Any notices, consents, waivers or
other communications required or permitted to be given under the terms hereof
must be in writing and will be deemed to have been delivered: (i) upon receipt,
when delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) trading day after deposit
with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
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If to the Pledgor: Neomedia Technologies Inc.
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2201 Second Street - Suite 402
--------------------------------------------------------------------------------
Fort Meyers, Florida 33901
--------------------------------------------------------------------------------
Attention: Charles T. Jensen
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Telephone: (941) 337-3434
--------------------------------------------------------------------------------
Facsimile: (941) 337-3668
--------------------------------------------------------------------------------
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With Copies to: Kirkpatrick & Lockhart LLP
--------------------------------------------------------------------------------
Miami Center, Suite 2000
--------------------------------------------------------------------------------
201 S. Biscayne Boulevard
--------------------------------------------------------------------------------
Miami, Florida 33131
--------------------------------------------------------------------------------
Attention: Clayton E. Parker, Esq.
--------------------------------------------------------------------------------
Telephone: (305) 539-3306
--------------------------------------------------------------------------------
Facsimile: (305) 358-7095
--------------------------------------------------------------------------------
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If to Holder: Michael Kesselbrenner
--------------------------------------------------------------------------------
1 West Ridgewood Avenue, Suite 303
--------------------------------------------------------------------------------
Paramus, New Jersey 07652
--------------------------------------------------------------------------------
Telephone: (201) 689-9400
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Facsimile: (201) 689-9404
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or at such other address and/or facsimile number and/or to the attention
of such other person as the recipient party has specified by written notice
given to each other party three (3) trading days prior to the effectiveness of
such change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by a nationally recognized overnight delivery
service, shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.
15. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.
Kesselbrenner 's remedies provided in this Agreement shall be cumulative and in
addition to all other remedies available to Kesselbrenner under this Agreement,
at law or in equity (including a decree of specific performance and/or other
injunctive relief), no remedy of Kesselbrenner contained herein shall be deemed
a waiver of compliance with the provisions giving rise to such remedy and
nothing herein shall limit Kesselbrenner 's right to pursue actual damages for
any failure by the Pledgor to comply with the terms of this Agreement. Every
right and remedy of Kesselbrenner under any Operative Document, the Promissory
Note or under applicable law may be exercised from time to time and as often as
may be deemed expedient by Kesselbrenner. The Pledgor acknowledges that a breach
by the Pledgor of its obligations hereunder or the Operative Documents will
cause irreparable harm to Kesselbrenner and that the remedy at law for any such
breach may be inadequate. The Pledgor therefore agree that, in the event of any
such breach or threatened breach by a Pledgor, Kesselbrenner shall be entitled,
in addition to all other available remedies, to an injunction restraining any
breach, or specific performance without the necessity of showing economic loss
and without any bond or other security being required.
16. GOVERNING LAW; JURISDICTION. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New Jersey, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New Jersey or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New Jersey. Each party
hereby irrevocably submits to the exclusive jurisdiction of the Superior Courts
of the State of New Jersey, sitting in the city of Jersey City, Hudson County,
New Jersey and the Federal District Court for the District of New Jersey sitting
in Newark, New Jersey, for the adjudication of any dispute hereunder or in
connection herewith or therewith, or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
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in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
17. COSTS AND EXPENSES. Without limiting any obligations of the
Pledgor hereunder, the Pledgor, jointly and severally, agree to pay all
reasonable fees and costs incurred by Kesselbrenner in enforcing its rights
hereunder, including, without limitation, reasonable attorneys' fees and
expenses, whether or not involving litigation and/or appellate or bankruptcy
proceedings.
18. NO INCONSISTENT AGREEMENTS. None of the parties hereto will
hereafter enter into any agreement which is inconsistent with the rights granted
to the parties in this Agreement.
19. THIRD PARTIES. Nothing herein expressed or implied is intended
or shall be construed to confer upon or give to any person or entity, other than
the parties to this Agreement and their respective permitted successor and
assigns, any rights or remedies under or by reason of this Agreement.
20. WAIVER OF JURY TRIAL. AS A MATERIAL INDUCEMENT FOR
KESSELBRENNER TO LOAN TO THE COMPANY THE MONIES UNDER THE PROMISSORY NOTE AND TO
ACCEPT THIS PLEDGE AGREEMENT, THE PLEDGOR HEREBY WAIVE ANY RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS AGREEMENT AND/OR ANY AND
ALL OF THE OTHER DOCUMENTS ASSOCIATED WITH THIS TRANSACTION.
21. ENTIRE AGREEMENT. This Agreement (including the recitals and
exhibits hereto), and the Promissory Note of even date among the parties hereto,
set forth the entire understanding of the parties with respect to the subject
matter hereof, and shall not be modified or affected by any offer, proposal,
statement or representation, oral or written, made by or for any party in
connection with the negotiation of the terms hereof, and may be modified only by
instruments signed by all of the parties hereto.
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IN WITNESS WHEREOF, the parties have caused this Pledge Agreement to be
duly executed as of the day and year first above written.
NEOMEDIA TECHNOLOGIES INC.
By: /s/ Charles T. Jensen
---------------------
Name: Charles T. Jensen
------------------
Its: President & COO
--------------------------
MICAHEL KESSELBRENNER
By: /s/ Michael Kesselbrenner
---------------------------------
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EXHIBIT A
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DESCRIPTION OF PLEDGED SHARES
SHARES PLEDGED PLEDGOR
Name of Pledgor on Certificate Certificate Number Number of Shares
------------------------------ -------------------- --------------------------
Michael Kesselbrenner 53,620,023
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