-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UiB+mi6XO6WQAdYWcPntvNOYAIdRnJ712Sr30afCAocjlspzNC/2CPvoDkAgDu8A FxvgEnx9eqb4Gzs8zYCHJw== 0001016843-97-000538.txt : 19971009 0001016843-97-000538.hdr.sgml : 19971009 ACCESSION NUMBER: 0001016843-97-000538 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970925 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971008 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEOMEDIA TECHNOLOGIES INC CENTRAL INDEX KEY: 0001022701 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 363680347 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-21743 FILM NUMBER: 97692309 BUSINESS ADDRESS: STREET 1: 2201 SECOND ST STE 600 STREET 2: STE 600 CITY: FORT MYERS STATE: FL ZIP: 33901 BUSINESS PHONE: 6303554404 MAIL ADDRESS: STREET 1: 2201 SECOND STREET STREET 2: SUITE 600 CITY: FORT MYERS STATE: FL ZIP: 33901 FORMER COMPANY: FORMER CONFORMED NAME: DEVSYS INC DATE OF NAME CHANGE: 19960911 8-K 1 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 (Date of earliest event reported): SEPTEMBER 25, 1997 NEOMEDIA TECHNOLOGIES, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) DELAWARE 0-21743 36-3680347 - --------------- ----------- ------------------ (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 2201 SECOND STREET, SUITE 600, FORT MYERS, FLORIDA 33901 - -------------------------------------------------- --------- (Address of principal executive offices) (Zip Code) ITEM 5. OTHER EVENTS. On September 25, 1997, NeoMedia Technologies, Inc. ("NeoMedia") acquired all of the stock of Allegiant Legacy Solutions, Inc. ("ALS"), an Ohio corporation, from its two shareholders, George G. Luntz and Gerald L. Willis (collectively, the "Sellers") in accordance with a Stock Purchase Agreement (the "Agreement") entered into between the parties. ALS is located in Cincinnati, Ohio, and primarily sells licenses to proprietary software tools that identify, seek and automatically correct date data that is stored in various formats across both program code and specific data files. The Sellers were the owners of 200 shares of common stock of ALS, which constituted all of the issued and outstanding shares of common capital stock of ALS. The Sellers sold all of their shares in ALS for an aggregate of 1,070,000 shares of authorized, but unissued common stock of NeoMedia. The number of shares of NeoMedia's common stock received by the Sellers was determined through arms-length negotiations between the parties. As part of the transaction, NeoMedia agreed, pursuant to a Registration Rights Agreement entered into between the parties, to register, as requested from time to time by one or both of the Sellers, all or a portion of the shares issued to the Sellers pursuant to the Agreement after September 25, 1997 and after NeoMedia has publicly reported its financial results for the fourth calendar quarter of 1997. George Luntz, President of ALS, entered into an employment agreement with NeoMedia, and Gerald Willis, Vice President of Sales of ALS, entered into a consulting agreement with NeoMedia. This transaction will be accounted for as a pooling of interests. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements of Businesses Acquired As of September 25, 1997, it is impracticable to provide the required financial statements of ALS. The required financial statements of ALS will be filled as an amendment to this Form 8-K not later than December 9, 1997. (b) Pro Forma Financial Information As of September 25, 1997, it is impracticable to provide the required pro forma financial information. The required pro forma financial information will be filled as an amendment to this Form 8-K not later than December 9, 1997. (c) Exhibits 99.1 Stock Purchase Agreement Dated August 30, 1997 By and Between NeoMedia Technologies, Inc. and George Luntz and Gerald L. Willis 2 99.2 Registration Rights Agreement Dated September 25, 1997 By and Between NeoMedia Technologies, Inc. and Gerald L. Willis and George G. Luntz 99.3 Consulting Agreement Dated August 30, 1997 By and Between NeoMedia Technologies, Inc. and Gerald L. Willis 99.4 Employment Agreement Dated August 30, 1997 By and Between NeoMedia Technologies, Inc. and George Luntz 3 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. --------------------------- (Registrant) Date: OCTOBER 8, 1997 By: /s/ CHARLES W. FRITZ ------------------------------- Charles W. Fritz, President, Chief Executive Officer and Chairman of the Board 4 EXHIBIT INDEX SEQUENTIAL PAGE EXHIBIT NUMBER NUMBER DOCUMENT --------- -------- -------- 6 99.1 Stock Purchase Agreement Dated August 30, 1997 By and Between NeoMedia Technologies, Inc. and George Luntz and Gerald L. Willis 62 99.2 Registration Rights Agreement Dated September 25, 1997 By and Between NeoMedia Technologies, Inc. and Gerald L. Willis and George G. Luntz 76 99.3 Consulting Agreement Dated August 30, 1997 By and Between NeoMedia Technologies, Inc. and Gerald L. Willis 89 99.4 Employment Agreement Dated August 30, 1997 By and Between NeoMedia Technologies, Inc. and George Luntz 5 EX-99.1 2 NeoMedia Technologies, Inc. Stock Purchase Agreement Dated August 30, 1997 By and Between NeoMedia Technologies, Inc. and George Luntz and Gerald L. Willis Exhibit 99.1 STOCK PURCHASE AGREEMENT NEOMEDIA TECHNOLOGIES, INC. and GEORGE LUNTZ and GERALD L. WILLIS AUGUST 30, 1997 TABLE OF CONTENTS PAGE ---- 1. Definitions...........................................................1 1.1 "Assets".......................................................1 1.2 "Commitments"..................................................2 2. Sale and Delivery of ALS Shares.......................................2 2.1 ALS Shares.....................................................2 2.2 No Encumbrances................................................3 2.3 Delivery of Possession.........................................3 2.4 Instruments of Transfer........................................3 3. Issuance and Delivery of NeoMedia Stock...............................3 3.1 NeoMedia Shares................................................3 4. Closing...............................................................3 4.1 Date and Location..............................................3 5. Representations and Warranties of Sellers.............................4 5.1 Title to Shares, Authority.....................................4 5.2 Capital Stock..................................................4 5.3 Incorporation Documents........................................4 5.4 Organization and Good Standing.................................4 5.5 Subsidiaries, Divisions and Affiliates.........................5 5.6 No Outstanding Obligations.....................................5 5.7 Equity Investments.............................................5 5.8 Validity of Agreement..........................................5 5.9 Effect of Agreement............................................5 5.10 Restrictions, Burdensome Agreements............................5 5.11 Governmental and Other Consents................................6 5.12 Financial Statements...........................................6 5.13 Absence of Certain Changes or Events...........................6 5.14 Undisclosed Liabilities........................................8 5.15 Insurance......................................................8 5.16 Compliance with Laws...........................................9 5.17 Employees......................................................9 5.18 Employee Benefit Plans.........................................9 5.19 No Guarantees..................................................9 5.20 Accounts Receivable............................................9 5.21 Books and Records..............................................9 5.22 Absence of Litigation..........................................9 5.23 No Interest in Competitors....................................10 5.24 Taxes.........................................................10 5.25 Contracts and Agreements......................................10 5.26 No Defaults...................................................11 i 5.27 No Consents Required..........................................11 5.28 Patents, Trademarks, Copyrights, etc..........................11 5.29 Permits, Licenses, etc........................................12 5.30 Marketable Title; No Liens....................................12 5.31 Powers of Attorney............................................12 5.32 Sufficiency of Assets and Commitments.........................12 5.33 Labor Disputes, Unfair Labor Practices........................12 5.34 Past Due Obligations..........................................13 5.35 Recent Dividends and Other Distributions......................13 5.36 No Untrue Statements..........................................13 5.37 Shares Held for Investments...................................13 5.38 Restrictive Legend............................................13 5.39 Knowledge of ALS and Sellers..................................14 6. Representations and Warranties of NeoMedia...........................14 6.1 Organization and Good Standing................................14 6.2 Capitalization................................................14 6.3 Corporate Authorization.......................................14 6.4 No Breach or Violation........................................14 6.5 Tax-Free Treatment............................................15 7. Pre-Closing Covenants of the Sellers.................................15 7.1 Conduct of Business Until Closing Date........................15 7.2 Access to Properties, Records, Suppliers, Agents, etc.........16 7.3 Advice of Changes.............................................16 7.4 Conduct.......................................................16 7.5 Employee Benefit Plans........................................17 7.6 Satisfaction of Conditions by Sellers.........................17 7.7 Non-Disclosure of Negotiations and Non-Usage of Documents of NeoMedia...............................................17 8. Pre-Closing Covenants of NeoMedia....................................17 8.1 Satisfaction of Conditions by NeoMedia........................17 8.2 Confidentiality...............................................17 9. Post-Closing Covenants...............................................18 9.1 Further Assurances............................................18 9.2 Acquisitions by NeoMedia of Similar Businesses................18 9.3 Board of Directors' Meetings..................................18 9.4 Continued Business of ALS.....................................18 10. Conditions Precedent to the Obligations of NeoMedia..................18 10.1 Accuracy of Representations and Warranties....................19 10.2 Performance of Agreements.....................................19 10.3 Litigation, etc...............................................19 10.4 Approvals and Consents........................................19 ii 10.5 Seller's Certificate..........................................20 10.6 Officer's Certificate.........................................20 10.7 Good Standing Certificates....................................20 10.8 Material Adverse Change.......................................20 10.9 Actions, Proceedings, etc.....................................20 10.10 Opinion of Counsel to ALS.....................................20 10.11 Licenses, Permits, Consents, etc..............................20 10.12 Documentation of Rights.......................................21 10.13 Officers' Financial Certificate...............................21 10.14 Update of Exhibits............................................21 10.15 Completion of Due Diligence...................................21 10.16 Employment and Consulting Agreements..........................21 10.17 Stock Price...................................................21 10.18 Approval by Joseph Charles & Associates, Inc..................21 11. Conditions Precedent to the Obligations of the Sellers...............21 11.1 Accuracy of Representations and Warranties....................22 11.2 Performance of Agreements.....................................22 11.3 Employment and Consulting Agreements..........................22 11.4 Stock Price...................................................22 11.5 Commission Arrangements.......................................22 11.6 Taxes.........................................................22 11.7 Registration..................................................22 12. Miscellaneous........................................................22 12.1 Nature and Survival of Representations, Warranties, Covenants and Indemnification.........................................22 12.2 Entire Agreement; Amendment...................................23 12.3 Notices.......................................................23 12.4 Severability..................................................24 12.5 Waivers.......................................................24 12.6 Headings; Certain Terms.......................................24 12.7 Counterparts..................................................25 12.8 Expenses......................................................25 12.9 Termination of Agreement......................................25 12.10 Transaction Taxes.............................................25 12.11 Binding Effect; Benefits......................................25 12.12 Disclosures...................................................26 12.13 Section References............................................26 12.14 Brokers and Finders...........................................26 12.15 Public Announcements..........................................26 12.16 No Strict Construction........................................26 12.19 Number and Gender.............................................26 iv STOCK PURCHASE AGREEMENT THIS AGREEMENT is made as of this 30th day of August, 1997, by and between NeoMedia Technologies, Inc. a Delaware corporation ("NeoMedia"), and George Luntz and Gerald L. Willis (collectively, "Sellers"). WHEREAS, Sellers are the owners of 200 shares of common capital stock of Allegiant Legacy Solutions, Inc., an Ohio corporation ("ALS"), which constitutes all of the issued and outstanding shares of common capital stock of ALS; and WHEREAS, ALS has only one class of authorized shares, such class being common stock; WHEREAS, Sellers are willing to sell and exchange all of their shares in ALS for 1,070,000 shares of common stock of NeoMedia, and NeoMedia is willing to issue and deliver to Sellers shares of its common capital stock, $.01 par value, in exchange for all of the issued and outstanding shares of ALS, after which the business of ALS shall be merged into NeoMedia pursuant to the terms and conditions set forth in this Agreement; WHEREAS, the parties intend that the transaction be treated as a tax-free reorganization under Section 368(a)(1)(B) of The Internal Revenue Code; NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, and of the terms, covenants and conditions hereinafter contained, the parties hereto agree as follows: 1. DEFINITIONS 1.1 "ASSETS". As used in this Agreement, the term "Assets" shall mean the assets of ALS (as of the Closing) as follows: 1.1.1 the business of ALS as a going concern, the goodwill pertaining thereto and all of ALS's right, title and interest and to the names Allegiant Legacy Solutions, Inc. and all other names used by ALS, as well as all logos relating thereto; 1.1.2 all items of inventory owned by ALS including, without limitation, all raw materials, work-in-progress and finished goods of ALS (all of which are collectively referred to hereinafter as "Inventory"); 1.1.3 all machinery, equipment (including equipment which has previously been fully depreciated by ALS and equipment loaned to customers), furniture, fixtures and non-inventory supplies of ALS (including containers, packaging and shipping material, tools and spare parts and other similar tangible personal property owned by ALS, which are listed on Exhibit 1.1.3, all of which are collectively referred to hereinafter as the "Equipment"); 1.1.4 all of ALS's right, title and interest in and to the United States and foreign rights of ALS currently owned or used by ALS (and the rights proposed to be used) in the conduct of the business of ALS, with respect to patents, patents pending, copyrights, formulae, licenses, trademarks, trademark rights, trade names, service marks, service mark rights, trade secrets, shop rights, know-how, technical information, techniques, discoveries, designs, proprietary rights and non-public information of ALS and registrations, reissues and extensions thereof and applications and licenses therefor (all of such rights being collectively referred to hereinafter as the "Rights"); 1.1.5 all books and records of ALS including all in-house mailing lists, rented mailing lists, and other customer and supplier lists, trade correspondence, production and purchase records, promotional literature, data storage tapes and computer disks, computer software, order forms, accounts payable records (including invoices, correspondence and all related documents), accounts receivable ledger from November 30, 1996, through the Closing Date, all documents relating to uncollected invoices, and all shipping records from November 30, 1996, through the Closing Date; 1.1.6 all contracts, agreements and orders for goods and services of ALS; 1.1.7 all trade receivables of ALS ("Accounts Receivable") and all advance payments, prepaid items, rights to offset and credits of all kinds of ALS; 1.1.8 all real property owned or leased by ALS together with all fixtures attached thereto; and 1.1.9 all other assets of ALS. 1.2 "COMMITMENTS" shall mean all agreements, indentures, mortgages, plans, policies, arrangements, and other instruments, including all amendments thereto (or where they are verbal, written summaries of the material terms thereof), fixed or contingent. 2. SALE AND DELIVERY OF ALS SHARES. 2.1 ALS SHARES. Subject to and on the terms and conditions hereof, in reliance on the representations and warranties of NeoMedia and in consideration of the issuance to Sellers of 1,070,000 shares of common stock of NeoMedia, Sellers agree to sell, assign, transfer and deliver to NeoMedia at the Closing 200 shares of ALS (the "Shares"), together 2 with all books and records of ALS, after which the business of ALS shall be merged into NeoMedia and shall be accounted for as a pooling of interests. 2.2 NO ENCUMBRANCES. The Shares sold to NeoMedia hereunder shall be fully paid and non-assessable, and shall be free and clear of any and all contracts, commitments, agreements, liens, claims, charges, restrictions or encumbrances of any kind or nature whatsoever, whether or not of record other than restrictions imposed by federal and applicable state securities laws. 2.3 DELIVERY OF POSSESSION. At the Closing, Sellers shall deliver to NeoMedia possession of the certificates representing the Shares. The certificates representing the Shares shall be duly endorsed in blank or accompanied by duly executed stock powers. 2.4 INSTRUMENTS OF TRANSFER. At the Closing, Sellers shall deliver, or cause to be delivered, to NeoMedia such duly executed instruments as may be reasonably requested by NeoMedia, including, without limitation, powers of attorney, in form and substance reasonably satisfactory to NeoMedia and its counsel, for the consummation of the transactions contemplated under this Agreement, for the vesting in NeoMedia of all of Sellers' right, title and interest in and to the Shares, or for the vesting in NeoMedia (after and by reason of the change in ownership) of all right, title and interest in and to the Assets. 3. ISSUANCE AND DELIVERY OF NEOMEDIA SHARES. 3.1 NEOMEDIA SHARES. Subject to and on the terms and conditions hereof, in reliance on the representations and warranties of Sellers herein and in consideration of the sale and transfer to them of the Shares, NeoMedia agrees to issue and deliver to Sellers at the Closing 1,070,000 shares of common stock of NeoMedia ("NeoMedia Shares"). The NeoMedia Shares, when issued and delivered hereunder, shall be duly authorized, validly issued, fully paid and non-assessable and shall be unregistered under the Securities Act of 1933, as amended and shall contain the legend set forth in Section 5.38 hereof. 4. CLOSING. 4.1 DATE AND LOCATION. The closing of the transaction provided for herein ("Closing") shall be held no later than September 30, 1997, at the offices of NeoMedia in Fort Myers, Florida, or at such other time and place as the parties shall agree ("Closing Date"). All Closing transactions shall be deemed to take place simultaneously, and no Closing transaction shall be deemed consummated until all transactions to take place at the Closing have been consummated. 3 5. REPRESENTATIONS AND WARRANTIES OF SELLERS. Sellers each represent and warrant to NeoMedia as follows, each of which representation and warranty is material and is being relied upon by NeoMedia and each of which is true and correct as at the date hereof and shall be true and correct as of the Closing, with the same effect as if each such representation and warranty had been made at and as of the Closing: 5.1 TITLE TO SHARES, AUTHORITY. Sellers are the owners of, and have good and marketable title to, the Shares, free and clear of any and all contracts, commitments, agreements, liens, claims or encumbrances, whether or not of record. Each Seller has all requisite capacity, power and authority to execute and deliver this Agreement and to perform his obligations hereunder. 5.2 CAPITAL STOCK. (a) ALS has authorized capital stock consisting of 850 shares of common stock, no par value, of which 200 shares are issued and outstanding, and all of which are duly authorized, validly issued, fully paid, nonassessable, free of preemptive rights, and were issued in compliance with all federal and applicable state securities laws. (b) Except as set forth in Exhibit 5.2 hereof, there are no outstanding offers, options, warrants, rights, calls, commitments, obligations (verbal or written), conversion rights, plans or other agreements (conditional or unconditional) of any character providing for, requiring or permitting the offer, sale, purchase or issuance of any shares of capital stock of ALS or any other securities (as such term is defined in the Securities Act of 1933, as amended). Except as set forth in Exhibit 5.2, there are no equity securities of ALS that are reserved for issuance or are outstanding. (c) The Common Stock is owned by Sellers free and clear of all liens, charges, encumbrances or claims of any kind whatsoever. 5.3 INCORPORATION DOCUMENTS. True and correct copies of the incorporation documents and by-laws of ALS, together with all amendments thereto, have been delivered to NeoMedia. 5.4 ORGANIZATION AND GOOD STANDING. ALS is a corporation duly organized, validly existing and in good standing under the laws of the State of Ohio and is qualified to conduct business in Ohio and in all other jurisdictions where the nature of its assets and business requires such qualifications and ALS has the full corporate power and authority to own or lease its properties and operate its properties and Assets, and to carry on its business as presently being conducted. 4 5.5 SUBSIDIARIES, DIVISIONS AND AFFILIATES. Except as set forth on Exhibit 5.5, there are no subsidiaries, divisions or affiliates of ALS. Except as set forth on Exhibit 5.5, the business of ALS has been conducted solely by ALS and not through any affiliates, joint venture or other entity, person or under any other name. 5.6 NO OUTSTANDING OBLIGATIONS. There are no contracts, options or other agreements or understandings pursuant to which ALS is or may be obligated to issue shares of its capital, and there are no obligations of ALS outstanding which may be converted into any shares of capital of such corporation and, except as disclosed herein, there are no other shares of ALS issued or outstanding. 5.7 EQUITY INVESTMENTS. Except as set forth in Exhibit 5.7, ALS does not own or have any rights to any equity interest, directly or indirectly, in any corporation, partnership, joint venture, firm or other entity. 5.8 VALIDITY OF AGREEMENT. The execution, delivery and performance of this Agreement has been duly and validly executed and delivered by Sellers. This Agreement constitutes a valid and binding obligation of Sellers enforceable in accordance with its terms, except that such enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors' rights generally. 5.9 EFFECT OF AGREEMENT. The execution, delivery and performance of this Agreement by Sellers and consummation by Sellers of the transactions contemplated hereby, will not, with or without the giving of notice and the lapse of time, or both, (a) violate any provision of law, statute, rule, regulation or executive order to which ALS, or the Sellers, respectively, is subject; (b) violate any judgment, order, writ or decree of any court applicable to ALS, or Sellers, respectively, or (c) result in the breach of or conflict with any term, covenant, condition or provision of, result in the modification or termination of, constitute a default under, or result in the creation or imposition of any lien, security interest, charge or encumbrance upon any of the Assets pursuant to, any corporate charter, by-law, commitment, contract or other agreement or instrument, including any of the Commitments, to which ALS or the Sellers is a party or by which any of the Assets is or may be bound or affected or from which ALS or Sellers derive benefit, which breach, conflict, modification, termination, default or encumbrance described in this clause (c) would be material to the business of ALS or any of its Assets. 5.10 RESTRICTIONS; BURDENSOME AGREEMENTS. Neither ALS nor Sellers is a party to any contract, commitment or agreement, nor is any of them, the ALS Shares or any of the Assets subject to, or bound or affected by, any provision of the articles of incorporation, by-laws, or other corporate restriction, or any order, judgment, decree, law, statute, ordinance, rule, regulation or other restriction of any kind or character, which would, individually or in 5 the aggregate, materially adversely affect ALS's business, the ALS Shares or any of the Assets. 5.11 GOVERNMENTAL AND OTHER CONSENTS. No consent, authorization or approval of, or exemption by, any governmental, public or self-regulatory body or authority is required in connection with the execution, delivery and performance by Sellers of this Agreement or by Sellers of any of the instruments or agreements herein referred to, or the taking of any action hereby contemplated. 5.12 FINANCIAL STATEMENTS. Except as disclosed in Exhibit 5.12 or as otherwise disclosed herein, the interim financial statements for ALS for the period ended July 31, 1997 (the "ALS Financial Statements"), present fairly the financial position of such company as of the date to which they relate and have been prepared as internally generated, unaudited financial statements, and to the best of Sellers' knowledge, all items that could have a material adverse effect on the willingness of a prospective purchaser to acquire ALS have been disclosed in the ALS Financial Statements or in the Exhibits to this Agreement. 5.13 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since July 31, 1997, except as disclosed on Exhibit 5.13, ALS has not suffered any adverse changes in, or the occurrence of any events which, individually or in the aggregate, has or have had, or might reasonably be expected to have, a material adverse affect on, ALS's financial condition, results of operations, business, the value of the Assets or the Shares. Without limiting the generality of the foregoing, except as set forth on Exhibit 5.13: 5.13.1 ALS has not sold, leased, transferred, or assigned any of its Assets, tangible or intangible, other than for fair consideration in the ordinary course of business; 5.13.2 ALS has not entered into any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) either involving more than $50,000 or outside the ordinary course of business or entered into any transactions not in the ordinary course of business which would, individually or in the aggregate, materially adversely affect the Assets or the business of ALS; 5.13.3 no party (including ALS) has accelerated, terminated, modified, or canceled any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) to which ALS is a party or by which it is bound which involves more than $50,000; 6 5.13.4 ALS has not made any capital expenditure (or series of related capital expenditures) either involving more than $50,000 or outside the ordinary course of business; 5.13.5 ALS has not made any capital investment in, any loan to, or any acquisition of the securities or assets of, any other person (or series of related capital investments, loans, and acquisitions) either involving more than $50,000 or outside the ordinary course of business; 5.13.6 ALS has not issued any note, bond, or other debt security or created, incurred, assumed, or guaranteed any indebtedness for borrowed money or capitalized lease obligation either involving more than $50,000 singly or any group of related transactions totaling more than $50,000 in the aggregate; 5.13.7 ALS has not delayed or postponed the payment of accounts payable or other liabilities outside the ordinary course of business; 5.13.8 ALS has not canceled, compromised, waived, or released any right or claim (or series of related rights and claims) or other indebtedness owing to ALS; 5.13.9 Other than distributions necessary to pay Sellers' respective portion of income taxes as approved, or to be approved, by NeoMedia, ALS has not declared, set aside, or paid any dividend or made any distribution with respect to its capital stock (whether in cash or in kind); 5.13.10 ALS has not experienced any damage, destruction, or loss (whether or not covered by insurance) to any of its Assets; 5.13.11 ALS has not made any loan to, or entered into any other transaction with, any of its directors, officers, and employees; 5.13.12 ALS has not granted any increase in the compensation of any of its directors, officers, and employees or made any other change in employment terms for any of its directors, officers, and employees; 5.13.13 ALS has not adopted, amended, modified, or terminated any bonus, profit-sharing, incentive, severance, or other plan, contract, or commitment for the benefit of any of its directors, officers, and employees; 5.13.14 ALS has not made or pledged to make any charitable or other capital contribution outside the ordinary course of business; 7 5.13.15 sold, assigned, transferred or granted any rights under or with respect to any Rights; 5.13.16 there has not been any other material adverse occurrence, event, incident, action, failure to act, or transaction outside the ordinary course of business involving ALS; and 5.13.17 ALS has not committed to any of the foregoing. 5.14 UNDISCLOSED LIABILITIES. ALS has no liability, and, to the best of Sellers' knowledge, there is no basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand against ALS giving rise to any liability, except for (a) liabilities set forth on the face of the balance sheet of ALS dated July 31, 1997, and (b) liabilities which have arisen after the most recent fiscal month end in the ordinary course of business, none of which results from, arises out of, relates to, is in the nature of, or was caused by any breach of contract, breach of warranty, tort, infringement, or violation of law. 5.15 INSURANCE. There are no outstanding or unsatisfied written requirements or repeated verbal recommendations imposed or made by any of ALS's current insurance companies with respect to current policies covering any of the Assets, or by any governmental authority requiring or recommending, with respect to any of the Assets, that any repairs or other work be done on or with respect to, or requiring or recommending any equipment or facilities be installed on or in connection with, any of the Assets. ALS carries, and (with respect to any period for which a claim against ALS may still arise) has always carried worker's compensation insurance in reasonable amounts, and other insurance which is reasonably necessary to the conduct of ALS's business. On Exhibit 5.15 is set forth a correct and complete list of (a) all currently effective insurance policies and fidelity and surety bonds covering the Assets or the business of ALS, and their respective annual premiums (as of the last renewal or purchase of new insurance), and (b) for the fiscal-year period ending on the date hereof, (i) all accidents, casualties or damage occurring on or to the Assets or relating to the business or products of ALS which in the aggregate are in excess of $10,000, and (ii) claims for damages, contribution or indemnification and settlements (including pending settlement negotiations) relating thereto which in the aggregate are in excess of $10,000. Except as set forth on Exhibit 5.15, as of the date hereof there are no disputes with underwriters of any such policies and bonds, and to the best knowledge of Sellers, there is no condition or circumstance applicable to the business of ALS, other than the sale of the ALS Shares pursuant to this Agreement, which may result in such termination or increase. ALS and the Assets are in compliance with all conditions contained in such policies or bonds, except for non-compliance which, individually or in the aggregate, would not have a material adverse affect on the business of ALS or the Assets. 8 5.16 COMPLIANCE WITH LAWS. To the best of Sellers' knowledge, ALS materially has complied, and is currently in material compliance, with all applicable laws, statutes and ordinances, rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and charges of federal, state, local, and foreign governments, and all agencies thereof, and no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand, or notice has been filed or commenced against any of them alleging any failure so to comply. 5.17 EMPLOYEES. The Sellers have delivered to NeoMedia a list, attached as Exhibit 5.17, setting forth the names of all directors, officers and employees (by classification or type) of ALS and their respective rates of compensation, including the portions thereof attributable to bonuses, and any other salary, bonus or other payment arrangement made with or promised to any of them. 5.18 EMPLOYEE BENEFIT PLANS. ALS has not at any time maintained, sponsored, adopted, made contributions to or obligated itself to make contributions to or to pay any benefits or grant rights under or with respect to (1) any pension, profit sharing or other plan of deferred compensation; (2) any medical plan, life insurance plan, short-term or long-term disability plan, severance plan, dental plan or other employee benefit plan or employee welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 ("ERISA"); or (3) any personnel policy, excess benefit, bonus or incentive plan (including stock options, restricted stock, stock bonus, and deferred bonus plans), salary reduction agreements, change-of-control agreements, employment agreements or consulting agreements. 5.19 NO GUARANTEES. ALS is not a guarantor or otherwise liable for any liability or obligation (including indebtedness) of any other person. 5.20 ACCOUNTS RECEIVABLE. Exhibit 5.20 contains a list of the accounts receivable and customer list of ALS as of July 31, 1997. 5.21 BOOKS AND RECORDS. The books of account and other financial and corporate records of ALS are in all material respects complete, correct and up to date, with all necessary signatures, and are in all material respect accurately reflected in the ALS Financial Statements. 5.22 ABSENCE OF LITIGATION. Except as set forth on Exhibit 5.22 hereto: (a) there are no claims, actions, suits, proceedings, arbitrations, investigations or hearings pending, or to the best of the knowledge of Sellers, threatened against or affecting the licenses, business, operations, properties or Assets or the condition, financial or otherwise, of ALS, or in any way involving this 9 Agreement or the transaction contemplated hereby. To the best knowledge of Sellers, ALS has not waived any statute of limitations or other affirmative defense with respect to any of its obligations. There is no continuing order, injunction or decree of any court, arbitrator or governmental or administrative authority to which ALS is a party, or, to the best knowledge of Sellers, to which ALS is subject. Neither ALS nor Sellers, or any other current officer, director, partner or employee of ALS or any affiliate of ALS has been permanently or temporarily enjoined or barred by order, judgment or decree of any court or other tribunal or any agency or self-regulatory body from engaging in or continuing any conduct or practice in connection with the business engaged in by the ALS. (b) there is no order or decree of any court or agency directed to ALS arising out of any judicial, or quasi-judicial, proceeding before any such court or agency with respect to ALS being in default of an order of such court or agency. 5.23 NO INTEREST IN COMPETITORS. Set forth on Exhibit 5.23 is a list describing the extent to which ALS and Sellers or any other officer or director of ALS or any affiliate of any of the foregoing, directly or indirectly, owns more than a five percent (5%) interest in or controls or is an employee, officer, director, or partner of or participant in (but only to the extent such a participation exceeds one percent), or consultant to any corporation, partnership, limited partnership, joint venture, association or other entity which is a competitor, supplier or customer of ALS or has any type of business or professional relationship with ALS. 5.24 TAXES. Except as reflected in the ALS Financial Statements or in Exhibit 5.24 or in respect of taxes accruing with respect to the current fiscal year: (a) ALS has duly filed on a timely basis all tax returns required to be filed by it, and has paid all assessments and reassessments, and all other taxes, governmental charges, penalties, interests and fines due and payable by it on or before the date hereof and which are claimed by any governmental authority to be due and owing; and (b) there are no actions, suits, proceedings, investigations or claims threatened or, to the best of Sellers' knowledge, pending against ALS with respect to taxes, governmental charges or assessments or any other matters under discussion with any governmental authority relating to taxes, governmental charges or assessments asserted by any such authority. 5.25 CONTRACTS AND AGREEMENTS. Exhibit 5.25 sets forth all material contracts, agreements, licenses and leases of all kind to which ALS is a party and, except for the items listed on such schedule, ALS is not a party to any contract, agreement or lease of any kind, and all such contracts, agreements and leases are valid, effective and in good standing, and no party thereto is in default or breach thereof. ALS is not a party to any material contract, agreement, license or lease of any kind, except as set forth on Exhibit 5.25 hereto. 10 5.26 NO DEFAULTS. Except as set forth on Exhibit 5.26, ALS has fulfilled, or has taken all action reasonably necessary to enable it to fulfill when due, all of its obligations under the Commitments, except where the failure to do so would not, individually or in the aggregate, have a material adverse effect on the business of ALS or the Assets. Furthermore, there has not occurred any default by ALS or any event which, with the lapse of time or the election of any person other than ALS, will become a default, nor to the knowledge of Sellers has there occurred any default by others or any event which, with the lapse of time or the election of ALS, will become a default under any of the Commitments, except for such defaults, if any, which (a) have not resulted and will not result in any material loss to or liability of ALS or any of its successors or assigns or (b) have been indicated on Exhibit 5.26. ALS is not in arrears in any material respect with respect to the performance or satisfaction of the terms and conditions to be performed or satisfied by it under any of the Commitments and, to the best of Seller's knowledge and belief, no waiver or variance has been granted by any of the parties hereto. 5.27 NO CONSENTS REQUIRED. After the change in ownership of ALS, except as set forth on Exhibit 5.27, each of the Commitments included in the Assets does not require the consent of the other parties thereto and, with respect to any of the Commitments which do require the consent of the other parties thereto, ALS has obtained or prior to the Closing will obtain such consent and has provided or will provide NeoMedia with copies thereof. 5.28 PATENTS, TRADEMARKS, COPYRIGHTS, ETC. Exhibit 5.28 sets forth (a) the registered and beneficial owner and the expiration date, to the extent applicable, for each of the Rights set forth on such Exhibit and (b) the product or products of ALS which make use of, or are sold, licensed or made under, each such Right. All of the Rights are included in the Assets and constitute all Rights necessary for the conduct of the business of ALS, as such business is currently being conducted. Except as set forth on Exhibit 5.28, ALS has not sold, assigned, transferred, licensed, sub-licensed or conveyed the Rights, or any of them, or any interest in the Rights, or any of them, to any person, and has the entire right, title and interest (free and clear of all security interests, liens and encumbrances of every nature) in and to the Rights necessary to the conduct of the business of ALS as currently being conducted; neither has the validity of such items been, nor is the validity of such items, nor the use thereof by ALS, the subject of any pending or, to the best knowledge of Sellers, threatened opposition, interference, cancellation, nullification, conflict, concurrent use, litigation or other proceeding. To the best knowledge of Sellers, the conduct of the business of ALS as currently operated (including the use by ALS's customers of ALS's products for the uses for which ALS markets its products to its customers in the ordinary course of business) does not and will not conflict with, or infringe, legally enforceable rights of third parties. Except as set forth on Exhibit 5.28, to the best 11 knowledge of Sellers, the Rights owned by or licensed to ALS have not been used, and no use is now being made, by any entity except ALS and other entities duly licensed to use the same. Except as set forth on Exhibit 5.28, to the best knowledge of Sellers, there is no infringement of any proprietary right owned or licensed by ALS. All Rights, if any, previously held or now held by Sellers and relating to the business of ALS in any manner, have been duly and effectively transferred to ALS and all such Rights are included in the Assets. 5.29 PERMITS, LICENSES, ETC. There are no permits, licenses, orders or approvals of governmental or administrative authorities required to permit ALS to carry on its business as currently conducted (other than (a) permit, licenses, orders and approvals which are set forth on Exhibit 5.29, all of which are in full force and effect, and (b) other permits, licenses, orders and approvals, the failure to obtain which would not, individually or in the aggregate, have a material adverse effect on the Assets or on ALS's business). 5.30 MARKETABLE TITLE; NO LIENS. Except as set forth in Exhibit 5.30, or as otherwise disclosed herein, ALS owns and has good and marketable title to all of the personal property and assets, tangible or intangible, as reflected on the ALS Financial Statements (except for assets disposed of in the ordinary course of business since the respective dates of the ALS Financial Statements), free and clear of all contracts of sale, liens, mortgages, pledges, security interests, charges, restrictions, prior assignments, encumbrances and claims of every kind. 5.31 POWERS OF ATTORNEY. Except as set forth on Exhibit 5.31, no person has any power of attorney to act on behalf of ALS in connection with any of ALS's properties or business affairs other than such powers to so act as normally pertain to the officers of ALS. 5.32 SUFFICIENCY OF ASSETS AND COMMITMENTS. Except as set forth in Exhibit 5.32, the Assets and the Commitments, taken in the aggregate, are sufficient to the best knowledge of Sellers, and constitute all of the property and Rights necessary, for the continuation of the business and operations of ALS on a basis consistent with past operations. 5.33 LABOR DISPUTES, UNFAIR LABOR PRACTICES. Except as set forth on Exhibit 5.33, ALS is not engaged in any labor practice which, to the best knowledge of Sellers, would have a material adverse affect on the Assets or ALS's business. There is no pending or affirmatively threatened (a) unfair labor practice complaint, charge, labor dispute, strike, slowdown, walkout or work stoppage before the National Labor Relations Board or any other authority or (b) grievance or arbitration proceeding arising out of or under a collective bargaining agreement involving employees of ALS. There have been no strikes, labor disputes, slowdowns, walkouts, or work stoppages involving employees of ALS during the last three years. To the best knowledge of Sellers, no union representation question exists with respect to the employees of ALS and, to the best knowledge of Sellers, no union organizing activities are taking place. ALS has not received notice from any of its employees of such employee's 12 intent to terminate his or here employment or bring any action against ALS for any reason related to the transactions contemplated by this Agreement or for any other reason. 5.34 PAST DUE OBLIGATIONS. Except as set forth on Exhibit 5.34, no past due obligations of ALS over $5000 have given rise or shall give rise within 5 days after the Closing Date (except as such will be performed by ALS prior to the Closing so as to relieve NeoMedia of all liability therefor) to any additional liability to NeoMedia on account of their being past due. 5.35 RECENT DIVIDENDS AND OTHER DISTRIBUTIONS. There has been no dividend or other distribution of assets or securities whether consisting of money, property or any other thing of value, declared, issued or paid to or for the benefit of Sellers subsequent to the date of the most recent ALS Financial Statements by ALS. 5.36 NO UNTRUE STATEMENTS. Neither this Agreement nor any documents, certificates or statements furnished to NeoMedia by or on behalf of Sellers in connection herewith contains any untrue statement of a material fact or omits to state a material fact (materiality being determined in relation to ALS taken as a whole) necessary in order to make the statements contained herein and therein not misleading. There is no fact known to Sellers, which materially adversely affects, or in the future may materially adversely affect, the business, properties, assets, prospects or financial condition of ALS which has not been set forth in this Agreement or the exhibits hereto or otherwise disclosed in writing to NeoMedia including by means of the financial statements for ALS. 5.37 SHARES HELD FOR INVESTMENT. Sellers are acquiring the NeoMedia Shares hereunder solely for their own account, for investment, and not with a view to the distribution or resale thereof. Sellers represent and warrant that they have no present intention of selling or distributing any of the NeoMedia Shares to be acquired hereunder and that they are not under any present necessity or constraint to dispose of any such NeoMedia Shares to satisfy any existing or contemplated debt or undertaking. 5.38 RESTRICTIVE LEGEND. Sellers confirm their understanding, and agree, that: (a) Certificates for the NeoMedia shares to be issued and delivered to them hereunder will bear substantially the following legend: "The securities represented by this Certificate were issued _____________, without registration under the Securities Act of 1933, as amended. No transfer, sale or distribution of these securities or any interest therein may be made except under an effective registration statement under said Act covering such 13 securities unless the Corporation has received an opinion of counsel satisfactory to it that such transfer or sale does not require registration under said Act." (b) Sellers shall be bound by the terms of the foregoing legend and agree that appropriate restrictions on transfer will be noted on NeoMedia's corporate records and the records of NeoMedia's transfer agent. 5.39 KNOWLEDGE OF ALS AND SELLERS. As to each representation and warranty made by Sellers under this Section 5, any fact or information known to ALS or notice received by ALS, shall be imputed to Sellers as if such fact or information were known to Sellers or such notice was received by Sellers. 6. REPRESENTATIONS AND WARRANTIES OF NEOMEDIA. NeoMedia represents and warrants to Sellers that the following are true and correct as of the date hereof: 6.1 ORGANIZATION AND GOOD STANDING. NeoMedia is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is validly existing and in good standing under its jurisdiction of incorporation and is qualified to do business in the jurisdiction in which such qualification is required and has the full corporate power and authority to own, lease and operate its property and businesses. 6.2 CAPITALIZATION. NeoMedia has an authorized capitalization of 15,000,000 shares of capital stock, all of which is designated as common stock. There are presently issued and outstanding 5,381,701 shares of common stock of NeoMedia. No other stock of such corporation is outstanding. 6.3 CORPORATE AUTHORIZATION. The execution and performance of this Agreement and the issuance and delivery of the NeoMedia shares in accordance with the provisions hereof have been duly authorized by all necessary corporate action on the part of NeoMedia and this Agreement constitutes a valid, binding and enforceable obligation upon NeoMedia except that such performance may be limited by bankruptcy, insolvency, or other similar laws affecting the enforcement of creditors' rights generally. 6.4 NO BREACH OR VIOLATION. The execution and performance of this Agreement and compliance with the provisions hereof by NeoMedia will not violate, with or without the giving of notice or the passage of time, any applicable law or regulation and will not conflict with, or result in the breach of, any of the terms, conditions or provisions of, or constitute a default under, any corporate charter, by-law, indenture, mortgage, agreement or other instrument to which NeoMedia is bound. 14 6.5 TAX-FREE TREATMENT. NeoMedia shall not take any action or fail to take any action which deprives or could deprive the Sellers of their rights to treat the transactions contemplated by this Agreement under Section 368(a)(1)(B) of the Code. 7. PRE-CLOSING COVENANTS OF THE SELLERS. Sellers hereby covenant and agree with NeoMedia that Sellers shall do, or cause ALS to do, the following, between the date of this Agreement and the Closing Date or date of termination of this Agreement, as the case may be: 7.1. CONDUCT OF BUSINESS UNTIL CLOSING DATE. Acknowledging that Sellers cannot control certain factors that are beyond Seller's control and that are external to the business of ALS (e.g., natural disasters, political turmoil and financial market fluctuations) and except as permitted or required hereby or as NeoMedia may otherwise consent in writing, Sellers shall cause ALS to: 7.1.1 operate the business of ALS only in the usual, regular and ordinary manner, and use their best efforts to (a) preserve the present business organization of ALS intact, (b) keep available the services of the present employees of ALS who are listed on Exhibit 5.17, and (c) preserve the current business relationships of ALS with customers, suppliers, distributors and others having business dealings with it; 7.1.2 bear the risk of loss or damage to the Assets on and prior to the Closing Date where such risk of loss is not the legal obligation of another, and maintain all properties necessary for the conduct of the business of ALS, whether owned or leased; 7.1.3 maintain the books, records and accounts of ALS in the usual, regular and ordinary manner, on a basis consistent with prior periods; 7.1.4 duly comply with all laws which, to the best of Sellers' knowledge, apply to ALS and to the conduct of its business; 7.1.5 perform all of the obligations of ALS without default, unless such default is of no significance to ALS and could have no adverse impact on ALS, its Assets or business; 7.1.6 neither (a) amend ALS's Articles of Incorporation or by-laws; (b) merge with or into, consolidate, amalgamate or otherwise combine with, any other entity, or agree to do any of the foregoing; nor (c) change the character of the business of ALS; 15 7.1.7 neither (a) encumber, mortgage, or voluntarily subject to lien any of the existing Assets; (b) transfer, sell, lease, license or otherwise dispose of any of, or any part of, the Assets (other than sales, licensing and usage of Inventory and usage of Equipment in the ordinary course of business); (c) convey, transfer or acquire any Assets or property to, for or on behalf of ALS, other than in the ordinary course of business; (d) enter into any arrangement, agreement or undertaking, with respect to any of ALS's employees relating to the payment of any bonus, severance, profit-sharing or special compensation or any increase in the compensation payable or to become payable to any such employee; nor (e) incur any material fixed or contingent obligation or enter into any agreement, commitment, contract or other transaction or arrangement relating to the business of ALS or the Assets; 7.1.8 not make any distributions or dividends of Assets or securities, nor any changes to the capital structure of ALS; and 7.1.9 neither modify, change or terminate any of its material obligations other than in the ordinary course of business, nor grant any power of attorney with respect to the business of ALS or the Assets to any party except NeoMedia. 7.2 ACCESS TO PROPERTIES, RECORDS, SUPPLIERS, AGENTS, ETC. Sellers shall cause ALS to give NeoMedia and to NeoMedia's counsel, financiers, accountants and other representatives access to and copies of such of ALS's properties, personnel, books, tax returns, contracts, commitments and records as relate to the Assets, suppliers, agents, identities of rented lists, or other aspects of the business of ALS, and shall furnish to NeoMedia and such representatives all such additional instruments, contracts, documents or other written obligations (certified by officers of ALS, if so requested) and financial and other information concerning such business, Assets, suppliers, agents, and other aspects of the business of ALS as NeoMedia or its representatives may from time to time request. 7.3 ADVICE OF CHANGES. If the Sellers become aware of any fact or facts which, if known at the date hereof, would have been required to be set forth or disclosed in or pursuant to this Agreement or which, individually or in the aggregate, could materially adversely affect the business, Assets or common stock of ALS, Sellers shall promptly advise NeoMedia in writing thereof. 7.4 CONDUCT. Except as permitted or required hereby or as NeoMedia may otherwise consent in writing, neither ALS nor Sellers shall enter into any transaction or take any action which would result in any of the representations and warranties of ALS or Sellers contained in this Agreement or in any other document not being true and correct as of the time immediately after such transaction has been entered into or such event has occurred and on the Closing Date. 16 7.5 EMPLOYEE BENEFIT PLANS. Except for payment of ALS's current obligations, Sellers shall cause ALS not to incur any additional obligations and liabilities, including (a) all liabilities for all claims incurred, whether or not reported, on or before the Closing Date under all "employee welfare benefit plans," within the meaning of ERISA, (b) all liabilities or obligations for vacations or sick leave or retiree, medical or life benefits to employees or former employees of ALS, and (c) all liabilities of ALS for all benefits accrued under any "employee pension benefit plan," within the meaning of ERISA under each Employee Benefit Plan. 7.6 SATISFACTION OF CONDITIONS BY SELLERS. Sellers hereby covenant and agree with NeoMedia, that, between the date of this Agreement and the Closing Date or date of termination of this Agreement, as the case may be, Sellers shall use their best efforts to assure that the conditions set forth in Section 10 hereof are satisfied by the Closing Date. 7.7 NON-DISCLOSURE OF NEGOTIATIONS AND NON-USAGE OF DOCUMENTS OF NEOMEDIA. The Sellers hereby covenant and agree with NeoMedia that, except as may be required by law, the Sellers shall not use, show, display, describe or otherwise disclose, directly or indirectly and shall cause ALS not to use, show, display, describe or otherwise disclose, directly or indirectly, in any manner, this Agreement, any Exhibits hereto or any other document created by NeoMedia's counsel, in whole or in part, which was the subject of negotiations between NeoMedia and Sellers, or any of the terms or other aspects of the negotiations between NeoMedia and Sellers, in the event that the Closing shall not occur for any reason. Sellers further agree that they will return and instruct all of their advisors, representatives and other parties to return to NeoMedia all documents or other written materials regarding this transaction that were obtained from NeoMedia or its counsel during the course of the negotiations (including all drafts of all documents). Prior to the Closing, Sellers will use their best efforts to keep confidential any and all information furnished to them by NeoMedia in the course of the negotiations. If for any reason the Closing shall not occur, Sellers will continue to use their best efforts to keep such information confidential, to the extent that it is protectable by law. 8. PRE-CLOSING COVENANTS OF NEOMEDIA. 8.1 SATISFACTION OF CONDITIONS BY NEOMEDIA. NeoMedia hereby covenants and agrees with ALS, that, between the date of this Agreement and the Closing Date or date of termination of this Agreement, as the case may be, NeoMedia shall use its best efforts to assure that the conditions set forth in Section 11 hereof are satisfied by the Closing Date. 8.2 CONFIDENTIALITY. Prior to the Closing, NeoMedia will use its best efforts to keep confidential any and all information furnished to it by ALS or the Sellers in the course of 17 negotiations. If for any reason the Closing shall not occur, NeoMedia will continue to use its best efforts to keep such information confidential, to the extent that it is protectable by law, and will not use it and will return to Sellers all documents or other written material regarding this transaction that were obtained during the course of negotiations (including all drafts of all documents). Prior to Closing, NeoMedia will use its best efforts to keep confidential any and all information furnished to it by Sellers in the course of the negotiations. If for any reason the Closing shall not occur, NeoMedia will continue to use its best efforts to keep such information confidential, to the extent that it is protectable by law. 9. POST-CLOSING COVENANTS. 9.1 FURTHER ASSURANCES. After the Closing hereunder, each party shall, at the request of the other parties, execute, acknowledge and deliver, without further consideration, all such further assignments, conveyances, endorsements, deeds, powers of attorney, consents and other documents and take such other action as may reasonably be requested (a) to transfer to and fully vest in NeoMedia, and protect NeoMedia's right, title and interest in and to, all of the ALS Shares, and ALS's right, title and interest in and to the Assets and (b) otherwise to consummate the transactions contemplated by this Agreement. 9.2 ACQUISITIONS BY NEOMEDIA OF SIMILAR BUSINESSES. Prior to NeoMedia's acquiring any Year 2000 or migration business, NeoMedia shall consult with and seek the advice of Sellers, although Sellers shall not have veto authority over such proposed acquisition. 9.3 BOARD OF DIRECTORS' MEETINGS. As long as Sellers' shares are neither registered for sale nor available for sale under an exemption under The Securities Act of 1933, Sellers shall be invited to attend all Board of Directors' meetings of NeoMedia, except as to matters deemed confidential by the Board. 9.4 CONTINUED BUSINESS OF ALS. Subject to reasonable business judgment, NeoMedia shall use reasonable efforts to keep the operations of ALS, as existing as of the Closing, intact and shall use reasonable efforts to transfer to ALS portions of NeoMedia's existing business of similar nature to that of ALS. 10. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF NEOMEDIA. The obligations of NeoMedia pursuant to this Agreement are subject to the satisfaction at the Closing of each of the following conditions, any or all of which conditions may be waived by NeoMedia in its sole discretion: 18 10.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. All representations and warranties made by the Sellers (contained in this Agreement, any Exhibit hereto, or any certificate or instrument delivered to NeoMedia or its representatives by the Sellers or their representatives) shall be true on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date (I.E., with respect to a representation that a state of facts exists on or as of the date hereof, it is a condition that such state of acts exists on or as of the Closing Date; and with respect to a representation that a state of facts has or has not changed between a date prior to the date hereof and the date hereof, it is a condition that such state of facts has or has not changed between such prior date and the Closing Date), except as affected by the transactions contemplated hereby. 10.2 PERFORMANCE OF AGREEMENTS. Sellers shall have performed and complied with and shall have caused ALS to perform and comply with all covenants, obligations and agreements to be performed or complied with by them on or before the Closing Date pursuant to this Agreement. 10.3 LITIGATION, ETC. 10.3.1 Except as set forth on Exhibit 5.22, no claim, action, suit, proceeding, arbitration, investigation or hearing or notice of hearing shall be pending or, insofar as is known to Sellers, threatened against or affecting ALS or Sellers or any of the Assets, which (a) might result either in an action to enjoin or prevent the consummation of the transactions contemplated by this Agreement; or (b) would materially adversely affect the business of ALS or the ability of NeoMedia to consummate the transactions contemplated by this Agreement or to own the Assets or to operate the business of ALS. 10.3.2 ALS shall not be in violation of any law, statute, ordinance, regulation or executive order, the enforcement of which would, individually or in the aggregate, materially adversely affect the Assets or the business of ALS; or which would, individually or in the aggregate, materially adversely affect the ability of NeoMedia to consummate the transactions contemplated by this Agreement or to own the Assets or to operate the business of ALS. 10.3.3 No law, regulation or decree shall have been proposed, adopted or promulgated, or have become effective, the enforcement of which would materially adversely affect the ability of NeoMedia to consummate the transactions contemplated by this Agreement or to own the Assets or to operate any such business. 10.4 APPROVALS AND CONSENTS. ALS shall have obtained, and NeoMedia shall have received copies of all of the approvals and consents referred to in Section 5.27, each of which 19 approvals and consents shall be in full force and effect and reasonably satisfactory in form and substance to NeoMedia and its counsel. 10.5 SELLER'S CERTIFICATE. NeoMedia shall have received an accurate certificate of Sellers dated the Closing Date, satisfactory in form and substance to NeoMedia and its counsel, certifying (a) as to the fulfillment of the matters specified in Sections 10.1 through 10.3, and (b) any changes that NeoMedia is required to be notified of pursuant to Section 7.3, or that previously had not been disclosed to NeoMedia. 10.6 OFFICER'S CERTIFICATE. NeoMedia shall have received an accurate certificate, dated the Closing Date, of the President of ALS, dated as of the Closing date, stating, among other things, that he is not aware of any material omissions or facts that would materially alter any of the ALS Financial Statements, nor is he aware of any facts or factors that are reasonably likely to occur, or if known to other parties, that could have a material adverse affect on the financial condition, business, operations, Assets, liabilities, management or prospects of ALS. 10.7 GOOD STANDING CERTIFICATES. NeoMedia shall have received (a) a certificate of the Office of the Secretary of State of Ohio, dated within 30 days before the Closing Date, certifying that the records of such state regarding ALS in such state reflect neither a certificate of dissolution, a court order declaring dissolution, a merger or consolidation which terminated its existence, nor suspension of its corporate powers, rights and privileges, and that in accordance with the records of such state, such corporation is authorized to exercise all of its corporate powers, rights and privileges in such state. 10.8 MATERIAL ADVERSE CHANGE. There have been no material adverse changes in the financial condition, business, operations, assets, liabilities, management or prospects of ALS. 10.9 ACTIONS, PROCEEDINGS, ETC. All actions, proceedings, instruments and documents required to carry out the transactions contemplated by this Agreement shall have been reasonably satisfactory to NeoMedia, such approval not to be unreasonably withheld. 10.10 OPINION OF COUNSEL TO ALS. NeoMedia shall have received an opinion of Thompson, Hine & Flory LLP, counsel to Sellers, addressed to NeoMedia, dated the Closing Date, in form and substance satisfactory to NeoMedia and its counsel. 10.11 LICENSES, PERMITS, CONSENTS, ETC. NeoMedia shall have received evidence, in form and substance reasonably satisfactory to counsel for NeoMedia, that such licenses, permits, consents, authorizations or orders of governmental authorities as are necessary to the consummation of the transactions contemplated by this Agreement and the continued operation of the business of ALS have been obtained. 20 10.12 DOCUMENTATION OF RIGHTS. ALS shall have delivered to NeoMedia true and complete copies of all of the documentation held by ALS relating to each of the Rights. 10.13 OFFICERS' FINANCIAL CERTIFICATE. NeoMedia shall have received a certificate as set forth in Exhibit 10.13 from Sellers dated as of the Closing Date, satisfactory in form and substance to NeoMedia and its counsel, certifying that the ALS Financial Statements are true and correct, and accurately present the financial position of ALS during that interim period. 10.14 UPDATE OF EXHIBITS. Sellers shall have furnished to NeoMedia as Exhibit 10.14, immediately prior to the Closing Date, an amendment to the Exhibits to this Agreement which shall update as of the Closing Date all information specifically required to be contained in the Exhibits as of the date hereof which have come into existence between the date hereof and the Closing Date, and the information supplied in the amendment to the Exhibits shall not show the incorrectness or untruthfulness or lack of completeness in any respect of any representation or warranty made by Sellers as of the date hereof or as of the Closing Date, or the breach of any agreement, covenant or condition required by this Agreement to be performed or complied with by the Sellers prior to the Closing Date. 10.15 COMPLETION OF DUE DILIGENCE AND APPROVAL OF EXHIBITS. NeoMedia shall have received sufficient information and access to such information on a timely basis regarding ALS from Sellers and shall have approved all Exhibits to this Agreement. 10.16 EMPLOYMENT AND CONSULTING AGREEMENTS. An employment agreement and a consulting agreement with George Luntz and Gerald Willis, respectively, shall have been entered into on terms acceptable to NeoMedia. 10.17 STOCK PRICE. The quoted bid price of NeoMedia shares on NASDAQ shall not be, as of the Closing, less than $8.50 per share. 10.18 APPROVAL BY JOSEPH CHARLES & ASSOCIATES, INC. Approval for issuance of the shares being sold by NeoMedia hereunder shall have been received from Joseph Charles & Associates, Inc. 11. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLERS. The obligations of Sellers under this Agreement are subject to the satisfaction at the Closing of each of the following conditions, any or all of which conditions may be waived by Sellers in their sole discretion: 21 11.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. All representations and warranties made by NeoMedia in this Agreement shall be true as of the Closing Date with the same force and effect as though made on and as of the Closing Date. 11.2 PERFORMANCE OF AGREEMENTS. NeoMedia shall have performed and complied in all material respects with all covenants, obligations and agreements to be performed or complied with by it on or before the Closing Date pursuant to this Agreement. 11.3 EMPLOYMENT AND CONSULTING AGREEMENTS. An employment agreement and a consulting agreement with George Luntz and Gerald Willis, respectively, shall have been entered into on terms acceptable to each such party. 11.4 STOCK PRICE. The quoted bid price of NeoMedia shares on NASDAQ shall not be, as of the Closing, less than $8.50 per share. 11.5 COMMISSION ARRANGEMENTS. Subject to NeoMedia's review and as long as such employees and representatives perform their duties, NeoMedia shall retain all commission arrangements with all current sales employees and representatives and consultants of ALS for one year, except for James Burnette, whose arrangement shall remain in place for two years. 11.6 TAXES. Sellers shall have accrued, with NeoMedia's approval, a reasonably estimated distribution for income tax liability of Sellers as shareholders of ALS, with the actual distribution to be made following preparation of the fiscal year income tax returns for ALS. 11.7 REGISTRATION. NeoMedia and Sellers shall enter into an agreement that, after NeoMedia has reported one quarter of combined earnings following this transaction, (a) Sellers may request NeoMedia to register the NeoMedia Shares, and thereafter NeoMedia will file no later than February 28, 1998, a request for registration of the NeoMedia Shares under the Securities Act of 1933, as amended, and (b) NeoMedia in any event shall offer Sellers the option to include the NeoMedia Shares if any other request for registration which NeoMedia thereafter may file, if NeoMedia has not filed the NeoMedia Share registrations prior thereto, in accordance with SEC rules. NeoMedia will use its best efforts to make such registration effective. 12. MISCELLANEOUS. 12.1 NATURE AND SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND INDEMNIFICATION. All statements contained in this Agreement or in any exhibit or document delivered in connection with this Agreement shall be deemed representations and warranties by such party hereunder. All representations, warranties, covenants and indemnities made 22 in this Agreement or pursuant hereto shall survive the Closing hereunder until one year from the date of Closing except (a) with respect to any claim, written notice of which shall have been delivered to NeoMedia or Sellers, as the case may be, prior to a date one year from the date of Closing, such claim shall survive the termination of such period and shall survive for as long as such claims is unsettled, and (b) with respect to any litigation which shall have been commenced to resolve such claim on or prior to such date. 12.2 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the documents referred to herein constitute the entire Agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior written or oral warranties, representations, inducements, understandings, commitments, agreements or contracts. No amendment to or modification of the terms or conditions hereof shall be binding unless it is in writing and signed by the party against whom the amendment or modification is charged. No party hereto shall be bound by or charged with any written or oral arguments, representations, warranties, statements, promises or understandings not specifically set forth in this Agreement or in any Exhibit hereto or in certificates and instruments to be delivered pursuant hereto on or before the Closing. 12.3 NOTICES. All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given, delivered and received (a) when delivered, if delivered personally, (b) four days after mailing, when sent by registered or certified mail, return receipt requested and postage prepaid, (c) the next business day after delivery to a private courier service, when delivered to a private courier service providing documented overnight service, and (d) on the date of delivery if delivered by telecopy, receipt confirmed, provided that a confirmation copy is sent on the next business day by registered or certified mail, return receipt requested and postage prepaid, in each case addressed as follows: If to NeoMedia: NeoMedia Technologies, Inc. 2201 Second Street Suite 600 Fort Myers, FL 33901 941-337-3668 - Fax 23 with a copy to: Barton J. Springer, Esq. Fishman, Merrick, Miller, Genelly, Springer, Klimek & Anderson, P.C. 30 N. LaSalle Street, Suite 3500 Chicago, IL 60602 312-726-2649 - Fax If to Sellers: George Luntz 4307 Peppermill Lane Cincinnati, OH 45242 Gerald L. Willis 5170 Rollman Estate Drive Cincinnati, OH 45236 or to such other address as the recipient party may indicate by a notice delivered to the sending party (such change of address notice to be deemed given, delivered and received only upon actual receipt thereof by the recipient of such notice). 12.4 SEVERABILITY. Whenever possible, each paragraph of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law. If any paragraph of this Agreement shall be unenforceable or invalid under applicable law, such paragraph shall be ineffective only to the extent and duration of such unenforceability or invalidity and the remaining substance of such paragraph and the remaining paragraphs of this Agreement shall in such event continue to be binding and in full force and effect. 12.5 WAIVERS. No failure by any party to exercise any of such party's rights hereunder or to insist upon strict compliance with respect to any obligation hereunder, and no custom or practice of the parties at variance with the terms hereof, shall constitute a waiver by any party to demand exact compliance with the terms hereof. Waiver by any party of any particular default by any other party shall not affect or impair such party's rights in respect of any subsequent default of the same or of a different nature, nor shall any delay or omission of any party to exercise any rights arising from any default by any other party affect or impair such party's rights as to such default or any subsequent default. No action taken pursuant to this Agreement, including any investigation by or on behalf of any party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representation, warranty, covenant or agreement contained herein or in any other documents. 24 Any party hereto may, at or before the Closing, waive any conditions to its obligations hereunder which are not fulfilled. 12.6 HEADINGS; CERTAIN TERMS. The section and other headings contained in this Agreement are for reference purposes only and shall not be deemed to be a part of this Agreement or to affect the meaning or interpretation of this Agreement. As used in this Agreement, the term "including" means "including, but not limited to" unless otherwise specified; the word "or" means "and/or," and the word "person" means and refers to any individual, corporation, trust, partnership, joint venture, government or governmental authority, or any other entity. 12.7 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which, when executed, shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument. 12.8 EXPENSES. Except as and to the extent otherwise provided in this Agreement, whether or not the transactions contemplated by this Agreement are consummated, ALS and Seller shall pay their own respective expenses and the fees and expenses of their respective counsel and other experts. 12.9 TERMINATION OF AGREEMENT. This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time, but not later than the Closing Date: (a) by mutual consent of the parties; (b) by either party, if a condition precedent to such party's obligations, as recited in Section 10 or 11, has not been satisfied or waived; or (c) by ALS or Seller if, through no material fault of such party so electing to terminate, the Closing shall not have occurred on or prior to September 30, 1997. In the event of the termination of this Agreement by any party as above provided, without material fault of any party, no party shall have any liability hereunder, including any liability for damages. In the event that a condition precedent to a party's obligation is not met, nothing contained herein shall be deemed to require any party to terminate this Agreement rather than to waive such condition precedent and proceed with the Closing. 12.10 TRANSACTION TAXES. While the parties intend that the sale of ALS shares shall be tax free, Sellers shall pay any and all taxes, if any, imposed upon the sale of the ALS Shares and transfer of ownership of ALS pursuant to this Agreement. 25 12.11 BINDING EFFECT; BENEFITS. This Agreement shall inure to the benefit of the parties hereto and shall be binding upon the parties hereto and their respective successors and permitted assigns. This Agreement may not be assigned by Seller or NeoMedia without the prior express written consent of the other party. Except as otherwise set forth herein, nothing in this Agreement, expressed or implied, is intended to confer on any person other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement. 12.12 DISCLOSURES. Any disclosure by either party hereto pursuant to any specific provision of this Agreement shall be deemed a disclosure for all other purposes of this Agreement. 12.13 SECTION REFERENCES. All references contained in this Agreement to any section number are references to sections of this Agreement unless otherwise specifically stated. 12.14 BROKERS AND FINDERS. Neither NeoMedia nor Sellers has employed any broker, agent or finder or incurred any liability for any brokerage fees, agents' commissions, finders' fees or advisory fees in connection with the transactions contemplated by this Agreement; and Sellers on the one hand, and NeoMedia on the other hand, shall indemnify and hold each other harmless in respect of any such obligation or liability based in any way on agreements or arrangements or understandings claimed to have been made by any thereof with any third party. 12.15 PUBLIC ANNOUNCEMENTS. No press release or other public statement with respect to this Agreement or the transactions contemplated hereby shall be issued by any party without that party having consulted with and obtained the written consent of the other parties hereto; provided, however, notwithstanding the foregoing, NeoMedia, as a company subject to the U.S. securities laws and regulations relating to publicly-held companies, may make such public statements at such time and in such form as may be required under such laws or regulations as advised by its counsel. 12.16 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 person. 12.19 NUMBER AND GENDER. Each defined term used in this Agreement has a comparable meaning when used in its plural or singular form. Each gender-specific term used herein will have a comparable meaning whether used in a masculine, feminine or gender-neutral form. 26 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. NEOMEDIA TECHNOLOGIES, INC. By: /s/ CHARLES W. FRITZ ----------------------------- Charles W. Fritz, President Attest: /s/ WILLIAM E. FRITZ - ------------------------ William E. Fritz Secretary /s/ GEORGE LUNTZ ------------------------------- GEORGE LUNTZ /s/ GERALD L. WILLIS ------------------------------- GERALD L. WILLIS 27 ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 1.1.3 SCHEDULE OF EQUIPMENT HISTORICAL DESCRIPTION COST ----------- ---------- FURNITURE AND FIXTURES - ACCOUNT #1510 1 Filing cabinet $ 127 2 Computer table and file cabinet 138 3 Timmons office furniture 672 4 Partitions 173 5 Receptionist counter 3,275 6 Lobby furniture 3,215 7 Security system 896 ------ Total $8,496 ====== COMPUTER SOFTWARE - ACCOUNT #1520 1 Acucobol 85 operating system $3,450 2 Object COBOL Dev Suite UNIX v4.1 3,021 3 Project v4.1 Windows 95 CD-ROM 417 4 Windows NT server v 4.0 (20 users) 423 5 SCO-UA105-UX74, 5.0.2 70 6 Micrografx Flowcharter 7 139 7 WinFax Pro for Windows 95 and Act III 264 8 Windows NT server v4.0 (5 users) 703 ------ Total $8,487 ====== COMPUTER EQUIPMENT - ACCOUNT #1530 1 Laptop $3,887 2 Pentium Hard Drive 1,132 3 Personal Computer 2,119 4 Personal Computer 1,495 5 Stepnote computer and modem 2,273 6 HP DeskJet 680C 287 7 30% deposit on new phone system 2,625 8 PC and modem 3,216 9 Personal Computer and monitor 954 10 G6-200 Pentium Pro PC and monitor 4,144 (a) 11 Pro/10 & PCI combo adapter, SCSI-2 891 (a) 12 Jet Direct EX Plus Laserjet 6P Printer 1,128 13 Ditto Backup Parallel 2GB Drive 359 14 20 Pack PRO/10 & ISA TPO Adpt 416 15 Superstack II Hub 24 Port Link Cable 544 16 HP Surestore DAT 24 1,509 17 Pentium Pro 200 8,158 18 Pentium 133 1,008 19 Telephone headset 482 20 Network printer card 329 21 DKT2010SD Telephone 353 22 Surestore 81 8BG Int. Driver 935 23 (3) AGI P166 Computers 2,730 ------ Total $40,974 ======= (a) one third owned by ALS. ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 5.2 SCHEDULE OF CAPITAL STOCK NONE ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 5.5 SCHEDULE OF SUBSIDIARIES, DIVISIONS OR AFFILIATES SUBSIDIARIES NONE DIVISIONS NONE AFFILIATES ALLEGIANT DATA SYSTEMS, INC. ALLEGIANT MANAGEMENT ASSISTANCE, INC. ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 5.7 SCHEDULE OF EQUITY INVESTMENTS NONE ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 5.12 SCHEDULE OF FINANCIAL STATEMENTS The financial statements are prepared on a modified accrual basis. Adjustments to the financial statements would include, but not be limited to the following items. Certain transactions for Allegiant Legacy Solutions, Inc. ("ALS") have been recorded in the general ledger of Allegiant Data Systems, Inc. ("ADS"). Revenue has been recognized as billed, rather than on an accrual basis. An allowance for bad debts has not been established for uncollectible trade accounts receivable. Commissions are recorded when paid and not when the sale is recorded. ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 5.13 SCHEDULE OF ABSENCE OF CERTAIN CHANGES OR EVENTS 5.13.3 ALS's exclusive Australian distributor has indicated their desire to terminate the agreement. Their total contribution to sales over the period of the agreement (15 months) was $34,000. 5.13.11 Expenses incurred by employees and officers were submitted and reimbursed during August, 1997. ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 5.15 SCHEDULE OF INSURANCE (a) NONE (b)(i) NONE (b)(ii) NONE ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 5.17 SCHEDULE OF EMPLOYEES OTHER NAME SALARY COMPENSATION - -------------------- -------- ------------ FULL-TIME EMPLOYEES George G. Luntz $132,000 $ 50,000 (Other compensation represents bonus paid in July, 1997) Kevin S. Timmons 61,000 Commissions Howard E. Hawkins 61,000 Commissions Betty Aubrey 40,000 Commissions John C. Schmalfuss 38,000 Commissions Jill Siau 36,000 Commissions James Burnett 30,000 Commissions Dean Luntz 25,000 Commissions PART-TIME EMPLOYEES Adrienne Luntz $20/Hour None Rachel J. Ekeroth $27/Hour Commissions BILLED FROM ALLEGIANT DATA SYSTEMS, INC. Gerald L. Willis $4,844 / month 50,000 (Other compensation represents bonus paid in July, 1997) (After the merger, Mr. Willis to be on salary with ALS) David John Martin 45,000 Commissions (Currently, ADS is charging 50% of his salary to ALS. After the merger all of his salary will be paid by ALS.) Sandy Wieman (Bookkeeper) $833 / month None (Represents 40% of her salary) Cynthia Ballard (Receptionist) $417 / month None (Represents 40% of her salary) Karen Bauer (Order Fullfillment) None None ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 5.20 SCHEDULE OF ACCOUNTS RECEIVABLE AND CUSTOMER LIST ACCOUNTS RECEIVABLE CUSTOMER AS OF 07/31/97 --------- -------------- Allegiant Data Systems, Inc. $ 7,024.25 Allegiant Management 1,600.00 Blue Beacon International, Inc. 0.00 BP Oil Company 0.00 Cardinal Scale Mfg. Co. 0.00 Cipher Systems Ltd. 1,000.00 City of Fairfield 0.00 Cobol, Inc. 0.00 Commonwealth Aluminum 1,000.00 Compsoft International, Inc. 0.00 Countrywide Fund Services, Inc. 27,601.65 CSC Pty. Ltd. 20,000.00 Data General Corporation 3,912.50 David Hagen & Associates 0.00 Easirun Europa, Gmbh 9,995.37 Easirun International 286.00 Easirun USA 19,921.57 EDS 40,000.00 EDS - Miser 0.00 Exacta Corporation 18,866.67 Invacare Corporation 10,631.25 Invesco Funds Group, Inc. 34,586.43 Keane, Inc. 6,000.00 Mason Shoe Company 56,942.99 NeoMedia Technologies, Inc. 5,266.10 PAX / I 0.00 Revo Software 0.00 Sterling Software, Inc. (93.91) Tracor Information Systems Company 0.00 Transoft Ltd. 3,789.72 Transoft, Inc. 0.00 Vauform Industries, Inc. 0.00 ----------- Total $268,330.59 =========== ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 5.22 SCHEDULE OF ABSENCE OF LITIGATION NONE ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 5.23 SCHEDULE OF NO INTEREST IN COMPETITORS NONE ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 5.24 SCHEDULE OF TAXES NONE ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 5.25 SCHEDULE OF CONTRACTS AND AGREEMENTS 1 Software Distribution Agreement between Sinc, Inc. and Allegiant Data Systems, Inc. dated December 31, 1995, and amended with correspondence between Sinc, Inc. and Allegiant Legacy Solutions, Inc. dated February 28, 1996, November 19, 1996 and August 28, 1997 2 Agreement between Allegiant Legacy Solutions, Inc. and CSC Pty Limited dated August 23, 1996 3 Agreement between Allegiant Legacy Solutions, Inc. and Easirun Europa, Gmbh dated November 7, 1996 4 Agreement between Allegiant Legacy Solutions, Inc. and NeoMedia Technologies, Inc. dated March 21, 1997 5 Agreement between Allegiant Legacy Solutions, Inc. and Exacta Corporation dated May 6, 1997 6 Agreement between Allegiant Legacy Solutions, Inc. and Tracor Information Systems Company dated February 19, 1997 7 Agreement between Allegiant Legacy Solutions, Inc. and Transoft, Inc. dated January 16, 1997 8 Master Products and Services Agreement between Allegiant Legacy Solutions, Inc. and Data General Corporation dated November 14, 1996 ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 5.26 SCHEDULE OF NO DEFAULTS Allegiant Legacy Solutions, Inc. is currently engaged in Year 2000 projects for customers, some of which are scheduled to be delivered later than originally planned, and as is common in this type of project-based work. ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 5.27 SCHEDULE OF NO CONSENTS REQUIRED NONE ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 5.28 SCHEDULE OF PATENTS, TRADEMARKS, COPYRIGHTS, ETC. NONE ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 5.29 SCHEDULE OF PERMITS, LICENSES, ETC. NONE ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 5.30 SCHEDULE OF MARKETABLE TITLE AND NO LIENS NONE ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 5.31 SCHEDULE OF POWERS OF ATTORNEY NONE ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 5.32 SCHEDULE OF SUFFICIENCY OF ASSETS AND COMMITMENTS NONE ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 5.33 SCHEDULE OF LABOR DISPUTES, UNFAIR LABOR PRACTICES NONE ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 5.34 SCHEDULE OF PAST DUE OBLIGATIONS NONE ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 10.13 OFFICERS' FINANCIAL CERTIFICATE This internally prepared financial statement of Allegiant Legacy Solutions, Inc. consisting of a balance sheet dated July 31, 1997 and an income statement from December 1, 1996 to July 31, 1997, prepared on the modified accrual basis of accounting, are, to the best of our knowledge, true and correct and accurately present the financial position of Allegiant Legacy Solutions, Inc. 9/1/97 /s/ GEORGE G. LUNTZ - --------- ------------------------- Date George G. Luntz 9/1/97 /s/ GERALD L. WILLIS - --------- ------------------------- Date Gerald L. Willis ALLEGIANT LEGACY SOLUTIONS, INC. EXHIBIT 10.14 SCHEDULE OF UPDATE OF EXHIBITS NONE EX-99.2 3 NeoMedia Technologies, Inc. Registration Rights Agreement Dated September 25, 1997 By and Between NeoMedia Technologies, Inc. and Gerald L. Willis and George G. Luntz Exhibit 99.2 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of this 25th day of September, 1997 by and between NEOMEDIA TECHNOLOGIES, INC., a Delaware corporation (the "Company"), and GERALD L. WILLIS and GEORGE G. LUNTZ (the "Shareholders"). WHEREAS, the Company and the Shareholders are parties to a Stock Purchase Agreement dated August 30, 1997 (the "Stock Purchase Agreement"); WHEREAS, Section 11.7 of the Stock Purchase Agreement provides that the Shareholders' obligations under the Stock Purchase Agreement are subject to, INTER ALIA, the execution of an agreement between the Company and the Shareholders which provides for the registration on the terms and subject to the conditions therein of the common stock of the Company which the Shareholders are entitled to receive under the Stock Purchase Agreement; and WHEREAS, Section 8.1 of the Stock Purchase Agreement obligates the Company to use its best efforts to assure that all of the conditions precedent to the Shareholders' obligations under the Stock Purchase Agreement are satisfied; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows: 1. DEFINITIONS. In addition to the terms that are defined above, the following terms shall have the following meanings as used in this Agreement: "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. "NASD" shall have the meaning set forth in Section 4(a)(xiii) of this Agreement. "NeoMedia Stock" shall mean the common stock, par value $.01 per share, of the Company. "Person" shall mean any individual, corporation, association, partnership, group (as defined in Section 13(d)(3) of the Exchange Act), limited liability company, joint venture, business trust or unincorporated organization, or a government or any agency or political subdivision thereof. "Prospectus" shall mean the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Shares covered by such Registration Statement and all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus. "Registrable Shares" shall mean: (i) any NeoMedia Stock issued to the Shareholders pursuant to the Stock Purchase Agreement; and (ii) any equity securities of the Company issued or distributed to the Shareholders after the date hereof in respect of such NeoMedia Stock by way of any stock dividend, stock split or other distribution, recapitalization or reclassification, and any equity securities of the Company acquired by a Shareholder upon exercise or conversion of any such securities. As to any particular Registrable Share, such Registrable Share shall cease to be a Registrable Share when (A) it has been sold, transferred or otherwise disposed of or exchanged pursuant to a Registration Statement under the Securities Act, (B) it has been distributed to the public pursuant to Rule 144 (or any successor provision) under the Securities Act, or (C) it has been otherwise sold, transferred or otherwise disposed of except in the case of a sale or transfer to a Shareholder's spouse or issue or a trust for her or their benefit. "Registration Expenses" shall have the meaning set forth in Section 6(b) of this Agreement. "Registration Notice" shall mean the written request which one or both of the Shareholders may provide to the Company pursuant to the provisions of Sections 2 or 3 of this Agreement. "Registration Statement" shall mean any appropriate Registration Statement of the Company in a registration that covers the sale of any of the Registrable Shares pursuant to the provisions of Sections 2 or 3 of this Agreement, including the Prospectus, amendments and supplements to such Registration Statement, post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement. "SEC" shall mean the Securities and Exchange Commission or any successor agency thereto. "Securities Act" shall mean the Securities Act of 1933, as amended. 2. REGISTRATION ON REQUEST. (a) At any time after the date of this Agreement and after the Company has publicly reported its financial results for the fourth calendar quarter of 1997, one or both of the Shareholders from time to time may request, pursuant to a Registration Notice, the registration of all or a portion of the Registrable Shares. The Shareholder choosing not to participate in such registration shall not be entitled to exercise his rights under this Section 2 until that Registration Statement is no longer effective. Such Registration Notice shall identify each Shareholder who has requested registration and the number of Registrable Shares to be included in the registration. Within 10 business days of its receipt of the Registration Notice, the Company shall send the Shareholder who was not included in the Registration Notice (the "Nonincluded Shareholder") written notice of the Registration Notice (the "Nonincluded Shareholder Registration Notice"). The Nonincluded Shareholder within 10 business days of its receipt of the Nonincluded Shareholder Notice shall send the Company written notice of the number of shares he desires to have registered in the Registration Statement. If the Nonincluded Shareholder fails to provide such notice to the Company within the 10 business days period, he shall not be entitled to have his shares registered - 2 - until that Registration Statement is no longer effective. The Company shall file within 30 days after its sending of the Nonincluded Shareholder Registration Notice (or within 30 days after its receipt of the Registration Notice, if no Nonincluded Shareholder Registration Notice is required to be sent) a Registration Statement to register the Registrable Shares identified in such Registration Notice and the written notice of the Nonincluded Shareholder and thereafter shall use its best efforts to cause the Registration Statement to become effective. The Shareholders requesting registration pursuant to this Section 2 may, at any time prior to the effective date of the Registration Statement relating to such registration, revoke such request by providing a written notice to the Company revoking such request; PROVIDED, HOWEVER, that in the event the Shareholders shall have made a written request for registration which (i) is subsequently withdrawn by the Shareholders before or after the Company has filed a Registration Statement with the SEC in connection therewith which has been declared effective by the SEC or (ii) is not declared effective solely as a result of the failure of Shareholders to take all actions reasonably required in order to have the registration and the related Registration Statement declared effective by the SEC then, in any such event, the Shareholders shall reimburse the Company for a percentage of the Registration Expenses attributable to the registration as to which the Registrable Shares were to be included. Such percentage shall be equal to a fraction, the numerator of which is the Registrable Shares to which such revocation relates and the denominator of which is all the NeoMedia Shares (including the Registrable Shares) which were to be included in the registration. (b) A registration requested pursuant to this Section 2 shall not be deemed to have been effected unless it has become effective under the Securities Act and has remained effective for at least 270 days or such shorter period as all the Registrable Shares included in such registration have actually been sold thereunder. In addition, if within 60 days after it has become effective, and unless all of the Registrable Shares to be included in such registration have been sold, the offering of Registrable Shares pursuant to such registration is interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court, such registration shall be deemed not to have been effected for purposes of this Section 2. (c) The Shareholders may not request a registration pursuant to this Section 2 if (i) the Company has registered pursuant to Section 3 all of the Registrable Shares that the Shareholders have requested to register pursuant to such Section 3 and the Shareholders have sold all of the shares registered pursuant to the Section 3 Registration Statement and (ii) all the Registrable Shares have been registered at least once under either Sections 2 or 3 and the Registrable Shares are eligible for sale under Rule 144 of the Securities Act. Each Shareholder must include on a Registration Notice all of the Registrable Shares owned by him not previously registered and sold. 3. INCIDENTAL REGISTRATIONS. (a) Notwithstanding anything to the contrary in this Agreement, the Company shall file on or before February 27, 1998 a Registration Statement which includes all the Registrable Shares and thereafter shall use its best efforts to cause the Registration Statement to become effective to the extent required to permit the disposition of the Registrable Shares to be registered; PROVIDED, - 3 - HOWEVER, that one or both of the Shareholders shall have the right, exercisable by giving written notice to the Company on or before February 13, 1998, to exclude all or a portion of his Registrable Shares from such Registration Statement. (b) Each other time the Company shall determine after the date of this Agreement and after the Company has publicly reported its financial results for the fourth calendar quarter of 1997, to file a Registration Statement under the Securities Act in connection with any NeoMedia Stock owned either by the Company or by any other holders thereof, the Company shall give written notice of its determination to the Shareholders at least 30 days prior to the anticipated filing date of such Registration Statement. Within 10 days after their respective receipt of such notice from the Company, one or both Shareholders may request, pursuant to a Registration Notice, the inclusion in the registration of all or a portion of the Registrable Shares. Such Registration Notice shall identify each Shareholder who has requested registration and the number of Registrable Shares to be included in the registration. Upon its receipt of any such Registration Notice, the Company shall include in the Registration Statement the Registrable Shares identified in such Registration Notice and thereafter shall use its best efforts to cause the Registration Statement to become effective to the extent required to permit the disposition of the Registrable Shares to be registered; PROVIDED, HOWEVER, that (i) if, at any time after giving written notice of its intention to register any securities and prior to the effective date of the Registration Statement filed in connection with such registration, the Company shall determine for any reason not to proceed with the proposed registration of the securities, the Company may, at its election, give written notice of such determination to each Shareholder and thereupon shall be relieved of its obligation to register any Registrable Shares in connection with such registration (but not from its obligation to pay the Registration Expenses in connection therewith); and (ii) if such registration involves an underwritten offering, the Shareholders requesting to be included in the Company's registration must sell their Registrable Shares to the underwriters on the same terms and conditions as apply to the Company, with such differences, including any with respect to indemnification and liability insurance, as may be customary or appropriate. If a registration requested pursuant to this Section 3 involves an underwritten public offering, any Shareholder requesting to be included in such registration may elect, in writing prior to the effective date of the Registration Statement filed in connection with such registration, not to register such securities in connection with such registration. No registration effected under this Section 3 shall relieve the Company of its obligations to effect registration upon request under Section 2 hereof. 4. REGISTRATION PROCEDURES. (a) If and whenever the Company is required by the provisions of Sections 2 or 3 of this Agreement to file, or to include Registrable Shares in, a Registration Statement and to use its best efforts to effect or cause the registration of Registrable Shares, the Company also shall as expeditiously as possible: (i) prepare and file with the SEC such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary - 4 - to keep such Registration Statement effective for not less than 270 days and to comply with the provisions of the Securities Act, the Exchange Act and the rules and regulations promulgated thereunder with respect to the disposition of all the securities covered by such Registration Statement during such period in accordance with the intended methods of disposition by the Shareholders thereof set forth in such Registration Statement; PROVIDED, HOWEVER, that (A) before filing any such amendments or supplements thereto, the Company shall furnish to the Shareholders covered by such Registration Statement copies of all documents proposed to be filed and (B) the Company shall notify each Shareholder covered by such Registration Statement of any stop order issued or threatened by the SEC, any other order suspending the use of any preliminary prospectus or of the suspension of the qualification of the Registration Statement for offering or sale in any jurisdiction, and take all reasonable actions required to prevent the entry of such stop order, other order or suspension or to remove it if entered; (ii) furnish to each Shareholder and each underwriter, if applicable, of Registrable Shares covered by such Registration Statement such number of copies of the Registration Statement and of each amendment and supplement thereto (in each case including all exhibits), such number of copies of the Prospectus included in such Registration Statement, in conformity with the requirements of the Securities Act, and such other documents as each Shareholder covered by such Registration Statement may reasonably request in order to facilitate the disposition of the Registrable Shares by such Shareholder; (iii) use its best efforts to register or qualify such Registrable Shares covered by such registration statement under the state securities or blue sky laws of such jurisdictions as each Shareholder covered by such Registration Statement and, if applicable, each underwriter, may reasonably request, and do any and all other acts and things which may be reasonably necessary to consummate the disposition in such jurisdictions of the Registrable Shares owned by such Shareholder (PROVIDED, HOWEVER, that the Company shall not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this clause (iii), (B) subject itself to taxation in any such jurisdiction or (C) consent to general service of process in any such jurisdiction); (iv) if, at any time when a Prospectus relating to the Registrable Shares is required to be delivered under the Securities Act, any event shall have occurred as the result of which any such Prospectus as then in effect would include an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, immediately give written notice thereof to each Shareholder and the managing underwriter or underwriters, if any, of such Registrable Shares and prepare and furnish to each such Shareholder copies of an amended or supplemental Prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Shares, such Prospectus shall not include an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; - 5 - (v) use its best efforts to list such Registrable Shares on any securities exchange on which similar securities of the Company are then listed, and enter into customary agreements including a listing application and indemnification agreement in customary form, provided that the applicable listing requirements are satisfied, and provide a transfer agent and registrar for such Registrable Shares covered by such Registration Statement not later than the effective date of such Registration Statement; (vi) enter into such customary underwriting agreements and take such other actions as each Shareholder of Registrable Shares being sold or the underwriter or underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Shares, including customary indemnification and opinions; (vii) use its best efforts to obtain a "cold comfort" letter or letters from the Company's independent public accountants in customary form and covering matters of the type customarily covered by "cold comfort" letters as the Shareholders or the underwriters retained by such Shareholders shall reasonably request; (viii) make available for inspection by representatives of each Shareholder covered by such Registration Statement, by any underwriter participating in any disposition to be effected pursuant to such Registration Statement and by any attorney, accountant or other agent retained by such Shareholders or any such underwriter, all financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries' officers, directors and employees to supply all information and respond to all inquiries reasonably requested by such Shareholders or any such representative, underwriter, attorney, accountant or agent in connection with such Registration Statement; (ix) promptly prior to the filing of any document which is to be incorporated by reference into the Registration Statement or the Prospectus (after initial filing of the Registration Statement), provide copies of such document to counsel to each Shareholder covered by such Registration Statement and to the managing underwriter or underwriters, if any, make the Company's representatives available for discussion of such document and make such changes in such document prior to the filing thereof as counsel for such Shareholders or underwriters may reasonably request; (x) otherwise use its best efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable after the effective date of the Registration Statement, an earnings statement which shall satisfy the provisions of Section 11(a) of the Securities Act and the rules and regulations promulgated thereunder; (xi) use its best efforts to provide a CUSIP number for all Registrable Shares not later than the effective date of the applicable Registration Statement, and provide the applicable transfer agents with printed certificates for the Registrable Shares; - 6 - (xii) notify counsel for each Shareholder covered by such Registration Statement and the managing underwriter or underwriters, if any, immediately and confirm the notice in writing, (A) when the Registration Statement, or any post-effective amendment to the Registration Statement, shall have become effective, or any supplement to the Prospectus or any amendment Prospectus shall have been filed, (B) of the receipt of any comments from the SEC and (C) of any request of the SEC to amend the Registration Statement or amend or supplement the Prospectus or for additional information; (xiii) cooperate with each seller of Registrable Shares and each underwriter, if any, participating in the disposition of such Registrable Shares and their respective counsel in connection with any filings required to be made with the National Association of Securities Dealers, Inc. (the "NASD"); and (xiv) during the period when the Prospectus is required to be delivered under the Securities Act, promptly file all documents required to be filed with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act. (b) Each Shareholder of Registrable Shares shall, upon receipt of any notice from the Company of the happening of any event of the type described in Section 4(a)(iv) hereof, forthwith discontinue disposition of such Registrable Shares covered by such Registration Statement or related Prospectus until such Shareholder's receipt of the copies of the supplemental or amended Prospectus contemplated by Section 4(a)(iv) hereof and, if so directed by the Company, shall deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such Shareholder's possession, of the Prospectus covering such Registrable Shares at the time of receipt of such notice. In the event the Company shall give any such notice, the period mentioned in Section 4(a)(i) hereof shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to Section 4(a)(iv) hereof and including the date when such Shareholder shall have received the copies of the supplemental or amended Prospectus contemplated by Section 4(a)(iv) hereof. If for any other reason the effectiveness of any Registration Statement filed pursuant to Sections 2 or 3 hereof is suspended or interrupted prior to the expiration of the time period regarding the maintenance of the effectiveness of such Registration Statement required by Section 4(a)(i) hereof so that Registrable Shares may not be sold pursuant thereto, the applicable time period shall be extended by the number of days equal to the number of days during the period beginning with the date of such suspension or interruption to and ending with the date when the sale of Registrable Shares pursuant to such Registration Statement may be recommenced. (c) Each Shareholder shall provide the Company upon request with such information about such Shareholder to enable the Company to comply with the requirements of the Securities Act and to execute such certificates as the Company may reasonably request in connection with such information and otherwise to satisfy any requirements of law. - 7 - 5. UNDERWRITTEN REGISTRATIONS. (a) Subject to the provisions of Sections 2, 3 and 4 hereof, any of the Registrable Shares covered by a Registration Statement may be sold, at the Shareholders' request, in an underwritten offering at the discretion of the Shareholder thereof. In the case of any underwritten offering pursuant to Section 2 hereof, the managing underwriter or underwriters that will administer the offering shall be selected by the Shareholders provided that such underwriter or underwriters are reasonably satisfactory to the Company. In the case of an underwritten offering pursuant to Section 3 hereof, the managing underwriter or underwriters that will administer the offering shall be selected by the Company. All expenses of any such underwritten offering in excess of the expense otherwise payable by the Company pursuant to Section 6 of this Agreement including, but not limited to, printing expenses in excess of the cost to reproduce a prospectus on a photocopying machine, the fees and disbursements of underwriters customarily paid by issuers or sellers of securities (including, but not limited to, expenses relating to "road shows" and other marketing activities), the fees of counsel of the Shareholders, NASD underwriter compensation review costs, including NASD filing fees and expenses, fees and expanses of compliance with securities of blue sky laws (including, without limitation, fees and disbursements of counsel for the underwriters or the shareholders, in connection with the blue sky qualifications of the Registrable Shares) and underwriting commissions and discounts shall be paid by the Shareholders. (b) If a registration pursuant to Sections 2 and 3 of this Agreement involves an underwritten offering and the managing underwriter or underwriters in good faith advises the Company in writing that, in its opinion, the number of securities to be included in such registration (including securities of the Company which are not Registrable Shares) exceeds the largest number of securities which can be sold in such offering without having an adverse effect on such offering (including the price at which such securities can be sold), then the Company will include in such registration, on a prorata basis, to the extent of the number which the Company is so advised can be sold in such offering all of the securities of the Company proposed by the Shareholders, the Company or any other holders thereof to be included in such registration. The Company shall not grant any registration rights having priorities that conflict with or are otherwise inconsistent with this Section 5(b). 6. EXPENSES. (a) The fees, costs and expenses of all registrations in accordance with Sections 2 and 3 hereof shall be borne by the Company, subject to the provisions of Sections 2(a) and 6(b) hereof. (b) Subject to Section 5(a) of this Agreement, the fees, costs and expenses of registration to be borne as provided in Section 6(a) hereof shall include, without limitation, all expenses incident to the Company's performance of or compliance with this Agreement including, without limitation, all SEC and stock exchange or NASD registration and filing fees and expenses, reasonable fees and expenses of any "qualified independent underwriter" and its counsel as may be - 8 - required by the rules of the NASD, fees and expenses of compliance with securities or blue sky laws (including without limitation reasonable fees and disbursements of counsel for the underwriters, if any, in connection with blue sky qualifications of the Registrable Shares), rating agency fees, printing expenses (including expenses of printing certificates for Registrable Shares and Prospectuses), messenger, telephone and delivery expenses, the fees and expenses incurred in connection with the listing of the securities to be registered on each securities exchange or national market system on which similar securities issued by the Company are then listed, fees and disbursements of counsel for the Company and all independent certified public accountants (including the expenses of any annual audit, special audit and "cold comfort" letters required by or incident to such performance and compliance), securities laws liability insurance (if the Company in its sole discretion decides to obtain such insurance), the fees and disbursements of underwriters customarily paid by issuers or sellers of securities (including, without limitation, expenses relating to "road shows" and other marketing activities), the reasonable fees of counsel for the Shareholders in connection with each such registration, the reasonable fees and expenses of any special experts retained by the Company in connection with such registration, and fees and expenses of other persons retained by the Company (but not including any underwriting discounts or commissions or transfer taxes, if any, attributable to the sale of Registrable Shares by such Shareholders) (collectively, "Registration Expenses"). 7. INDEMNIFICATION. (a) The Company shall, and it hereby does, indemnify, defend and hold harmless each of the Shareholders, each other Person who participates as an underwriter in an offering or sale of Registrable Shares and each other Person, if any, who controls such Shareholder or any such underwriter within the meaning of the Securities Act (collectively, the "Shareholder Indemnified Parties"), against any and all losses, claims, damages or liabilities, joint or several, and expenses (including any amounts paid in any settlement effected with the Company's consent) to which any Shareholder Indemnified Party may become subject under the Securities Act, state securities or blue sky laws, common law or otherwise, or otherwise may incur, insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof, whether or not such Shareholder Indemnified Party is a party thereto) or expenses arise out of or are based upon: (i) the breach by the Company of any of its duties and obligations under this Agreement; (ii) any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement under which such securities were registered under the Securities Act, any preliminary, final or summary Prospectus contained therein, or any amendment or supplement thereto; (iii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; or (iv) any violation by the Company of any federal, state or common law rule or regulation applicable to the Company and relating to action required of or inaction by the Company in connection with any such registration, and the Company shall reimburse such Shareholder Indemnified Party for any legal or any other expenses reasonably incurred by it in connection with investigating or defending any such loss, claim, liability, action or proceeding; PROVIDED, HOWEVER, that the Company shall not be liable to any Shareholder Indemnified Party in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect - 9 - thereof) or expense arises out of or is based upon: (x) any untrue statement or alleged untrue statement or omission or alleged omission made in a Registration Statement or amendment or supplement thereto or in any such preliminary, final or summary Prospectus in reliance upon and in conformity with written information with respect to such Shareholder furnished to the Company by such Shareholder for use in the preparation thereof; or (y) the failure of a Shareholder Indemnified Party to deliver any amendment or supplement to a Registration Statement which corrects any untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement to which such amendment or supplement pertains. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of any Shareholder Indemnified Party and shall survive the transfer of such securities by such Shareholder. (b) Each Shareholder shall, and he hereby does, indemnify, defend and hold harmless the Company, its directors and officers, each other Person who participates as an underwriter in an offering or sale of Registrable Shares and each other Person, if any, who controls the Company or any such underwriter within the meaning of the Securities Act (collectively, the "Company Indemnified Parties"), against any and all losses, claims, damages or liabilities, joint or several, and expenses (including any amounts paid in any settlement effected with the Company's consent) to which any Company Indemnified Party may become subject under the Securities Act, state securities or blue sky laws, common law or otherwise, or otherwise may incur, insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof, whether or not such Company Indemnified Party is a party thereto) or expenses arise out of or are based upon any act or omission by such Shareholder described in Sections 7(a)(x) and (y) of this Agreement. (c) If the indemnification provided for in this Section 7 shall for any reason be unavailable to any indemnified party under Section 7(a) or 7(b) hereof or is insufficient to hold it harmless in respect of any loss, claim, damage or liability, or any action in respect of any loss, claims, damage or liability, or any action in respect thereof referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof (i) in such proportion as shall be appropriate to reflect the relative benefits received by the indemnified party and indemnifying party or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the indemnified party and indemnifying party with respect to the statements or omissions which resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. Notwithstanding any other provision of this Section 7(c), no Shareholder shall be required to contribute an amount greater than the dollar amount of the net proceeds received by such Shareholder with respect to the sale of any such Registrable Shares unless any contribution arises out of or is based on any act or omission by such Shareholder described in Sections 7(a)(x) and (y) of this Agreement. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. - 10 - 8. RULE 144. The Company shall file in a timely manner the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations promulgated thereunder (or, if the Company is not required to file such reports, it shall, upon the request of any Shareholder, make publicly available such information), and it will take such further action as any Shareholder may reasonably request, all to the extent required from time to time to enable such Shareholder to sell Registrable Shares without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such Rule may be amended from time to time or (ii) any similar rule or regulation hereafter adopted by the SEC. Upon the request of any Shareholder, the Company shall deliver to such Shareholder a written statement as to whether it has complied with such requirements. 9. ASSIGNABILITY. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns; PROVIDED, HOWEVER, that the Shareholders may not assign this Agreement to any other Person, except a Shareholder's spouse or issue or a trust for her or their benefit, without the Company's prior written consent. In addition, and whether or not any express assignment shall have been made, the provisions of this Agreement which are for the benefit of the parties hereto other than the Company shall also be for the benefit of and enforceable by any subsequent holder of any Registrable Shares. The Company may not assign any of its rights or delegate any of its duties under this Agreement without the prior written consent of the Shareholders. Any purported assignment in violation of this Section 9 shall be void. 10. NOTICES. Any and all notices, designations, consents, offers, acceptances or any other communication shall be in writing and shall be delivered by certified or registered mail (first class postage prepaid), guaranteed overnight delivery or confirmed by facsimile: (a) If to the Company, at: NeoMedia Technologies, Inc. 2201 Second Street Suite 600 Fort Myers, Florida 33901 With a copy to: Barton J. Springer, Esq. Fishman, Merrick, Miller, Genelly, Springer, Klimek & Anderson, P.C. Suite 3500 30 North LaSalle Street Chicago, Illinois 60602 (b) If to any Shareholder, to the address appearing on the books of the Company or of the transfer agent and registrar for its NeoMedia Stock. - 11 - All such notices and communications shall be deemed to have been duly given and effective: when delivered by hand, if personally delivered; two business days after being deposited in the mail, postage prepaid, if mailed by ordinary United States Mail; the next business day after being delivered for mailing to a nationally recognized overnight delivery service; and when receipt acknowledged, if telecopied. 11. NO INCONSISTENT AGREEMENTS. The Company shall not hereafter enter into any agreement with respect to its securities which is inconsistent with the rights granted to the Shareholders in this Agreement. 12. SPECIFIC PERFORMANCE. The Company acknowledges that the rights granted to the Shareholders in this Agreement are of a special, unique and extraordinary character, and that any breach of this Agreement by the Company could not be compensated for entirely by damages. Accordingly, if the Company breaches its obligations under this Agreement, the Shareholders shall be entitled, in addition to any other remedies that they may have, to enforcement of this Agreement by a decree of specific performance requiring the Company to fulfill its obligations under this Agreement. 13. SEVERABILITY. If any provision of this Agreement or any portion thereof is finally determined to be unlawful or unenforceable, such provision or portion thereof shall be deemed not to be a part of this Agreement and any portion of such invalidated provision that is not invalidated by such a determination, shall remain in full force and effect. 14. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, together, shall constitute one and the same instrument. 15. DEFAULTS. A default by any party to this Agreement in such party's compliance with any of the conditions or covenants hereof or performance of any of the obligations of such party hereunder shall not constitute a default by any other party. 16. AMENDMENTS, WAIVERS. This Agreement may not be amended, modified or supplemented and no waivers of or consents to departures from the provisions hereof may be given unless consented to in writing by the Company and the Shareholders. 17. CAPTIONS. The captions contained in this Agreement are for reference purposes only and are not part of this Agreement. 18. ATTORNEYS' FEES. In any action or proceeding brought to enforce any provision of this Agreement, the successful party shall be entitled to recover reasonable attorneys' fees in addition to any other available remedy. - 12 - 19. ENTIRE AGREEMENT. This Agreement and the Stock Purchase Agreement contain the entire agreement among the parties hereto with respect to the transactions contemplated herein and understandings among the parties relating to the subject matter hereof. Any and all previous agreements and understandings between or among the parties hereto regarding the subject matter hereof are, whether written or oral, superseded by this Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date aforesaid. NEOMEDIA TECHNOLOGIES, INC. By: /s/ CHARLES W. FRITZ ---------------------------------------- Name: Title: /s/ GERALD L WILLIS ---------------------------------------- GERALD L. WILLIS /s/ GEORGE G. LUNTZ ---------------------------------------- GEORGE G. LUNTZ - 13 - EX-99.3 4 NeoMedia Technologies, Inc. Consulting Agreement Dated August 30, 1997 By and Between NeoMedia Technologies, Inc. and Gearld L. Willis Exhibit 99.3 CONSULTING AGREEMENT THIS CONSULTING AGREEMENT ("Agreement") is made and entered into as of the 30th day of August, 1997 (the "Effective Date") by and between NEOMEDIA TECHNOLOGIES, INC., a Delaware corporation with offices at 2201 Second Street, Suite 600, Fort Myers, Florida (the "Company") and GERALD L. WILLIS ("Consultant"). WHEREAS, the Company desires to engage Consultant to perform certain services and, in certain instances, to create certain work product for the Company, pursuant to the terms and conditions of this Agreement; and WHEREAS, Consultant desires to accept such engagement; NOW, THEREFORE, in consideration of the foregoing premises and of the terms, covenants and conditions hereinafter recited, the parties hereto agree as follows: 1. CONSULTANT'S DUTIES AND COMPENSATION. 1.1 ENGAGEMENT. The Company hereby engages Consultant as an independent contractor for a period of two years from the effective date of this Agreement and not as an employee to perform the services described on Exhibit A, and under no circumstances shall Consultant be entitled to any benefits from the Company other than as described on Exhibit B, and Consultant hereby accepts such engagement. Consultant shall perform such services in a diligent, lawful and reasonable manner consistent with professional standards in the field. At no time and under no circumstances shall Consultant be deemed to be an employee of the Company. Consultant hereby elects to defer the amount of $450,000 of the amount due to Consultant under this Agreement. In no event shall Consultant accept, nor should Company pay any such sums due Consultant until Consultnat affirmatively makes written election to receive such funds. 1.2 STOCK OPTIONS. In further consideration of Consultant's agreement not to compete with Company as recited herein, Company hereby grants to Consultant under the Company's stock option plan currently in existence upon execution of this Agreement 10,000 stock options at an exercise price equal to the price of the underlying shares on the date of execution. 1.3 NO SUBCONTRACTING. Consultant shall not subcontract any portion of Consultant's duties under this Agreement without the prior written consent of the Company. 1.4 INDEPENDENT CONTRACTOR STATUS. The Company and Consultant acknowledge and agree their relationship is not one of employer and employee, and Consultant shall have no right or authority to enter into any contract or agreement or to make any warranty or representation on behalf of the Company. 1.5 REIMBURSED EXPENSES. During the term hereof, the Company shall reimburse Consultant for all reasonable and necessary expenses incurred by Consultant in the performance of his duties hereunder, including without limitation, travel, meals, lodging, office supplies or equipment subject to such reasonable limitations, restrictions and reporting standards as the Company may from time to time establish. Consultant shall provide to the Company promptly after incurring any such expenses a detailed report thereof and such documentation as the Company shall from time to time require and as shall be sufficient to support the deductibility of all such expenses by the Company for federal income tax purposes. 1.6 TAX REPORTING. The Company shall report all compensation earned by the Consultant without regard to withholding and shall provide Consultant on an annual basis with such tax reporting information as is commensurate with an independent contractor's status. 1.7 COMPLIANCE. Consultant shall comply with all laws, rules and regulations of the State of Ohio, the United States and all other applicable jurisdictions, agencies and courts. If Consultant provides services on the Company's premises, Consultant shall comply with all applicable rules, regulations and policies of the Company. 1.8 CLOSING OF STOCK PURCHASE AGREEMENT. This Consulting Agreement is conditional on the closing of that certain Stock Purchase Agreement between the Company and George Luntz and Gerald L. Willis. In the event of a failure to close such transaction, this Agreement, the stock options granted hereunder and all remaining rights of Consultant arising hereunder shall be void and of no force and effect. 2. NON-COMPETITION AND NON-SOLICITATION. 2.1 NON-COMPETITION. Consultant agrees that, so long as he is engaged by Company pursuant to this Agreement, and for a period of three years following expiration of the term or termination of this Agreement, he will not, directly or indirectly, as a sole proprietor, member of a partnership, stockholder, investor, officer or director of a corporation, or as an employee, agent, associate or consultant of any person, partnership or corporation other than Company or in any other capacity do any of the following: 2 (a) Consultant shall not, in any manner or way whatsoever, own, manage, operate, participate in, perform services for or otherwise carry on a business anywhere in the world performing any of the services provided at any time by, or utilizing or selling any of the products, software or tools developed or owned at any time by, the Company which are related in any manner or way whatsoever, to the business and services of the Company's: (i) Year 2000 business; (ii) Migration business; (iii) Intelligent Document business; (iv) Systems Transition Solutions business; and (v) Document Systems Solutions business; provided, however, notwithstanding the foregoing, Consultant shall be permitted to engage in any business conducted by Allegiant Data Systems, Inc. and Allegiant Management Assistance, Inc. on the date of Closing; provided, further, however, notwithstanding the foregoing allowing Consultant to engage in such business, Consultant shall not, at any time or in any manner or way whatsoever in engaging in such business: (i) use ADAPT-2000, Legacy Liberator or any product which performs the same function or service as either of the foregoing, nor shall Consultant perform any services relating thereto; nor (ii) shall Employee use, in any manner or way whatsoever, any software or tool or product developed or owned by the Company to engage in such business. The ownership of not more than 5% of the issued and outstanding shares of a class of securities of the Company, the securities of which are traded on a national securities exchange or in the over-the-counter market, shall not be deemed ownership of the issuer of such shares for the purposes of this paragraph. (b) Consultant shall not induce or attempt to persuade any employee of Company to terminate such employment relationship in order to enter into any such relationship with such person or to enter into any such relationship on behalf of any other business organization in competition with Company or any of its affiliates; 3 (c) Consultant shall not solicit any business related to the business conducted by Company from any clients, agencies of clients, customers, or prospective or former clients, agencies of clients or customers of Company, except those originated and introduced to Company solely by Consultant; or (d) Consultant shall not perform services of any nature for any entity which engages in or conducts any business that competes with, restricts or interferes with the business of Company, other than services performed by ALS on August 30, 1997. 2.2 NON-SOLICITATION. During the term of this Agreement and for a period of twenty-four (24) months after the termination hereof, for any reason, Consultant shall not solicit any employee of the Company for employ by the Consultant or by any third party. 2.3 REASONABLENESS. Consultant acknowledges and agrees that the limitations set forth in this Agreement are reasonable with respect to scope, duration, geographic area and otherwise, and are properly required to protect the legitimate business interests of the Company. 3. OWNERSHIP OF INTELLECTUAL PROPERTY. 3.1 INTELLECTUAL PROPERTY. The term "Intellectual Property" shall mean all trade secrets, inventions, designs, developments, ideas, devices, methods and processes (whether or not patented or patentable, reduced to practice or included in the Confidential Information) and all patents and patent applications related thereto, all copyrights, copyrightable works and mark works (whether or not included in the Confidential Information) and all registrations and applications for registration related thereto, all Confidential Information, and all other proprietary rights contributed to, or conceived or created by, Consultant (whether alone or jointly with others) at any time during Consultant's engagement by the Company that: (i) relate to the business or to the actual or anticipated research or development of the Company; (ii) result from any work that Consultant performs for the Company; or (iii) are created using the equipment, supplies or facilities of the Company or any Confidential Information. 3.2 OWNERSHIP. All Intellectual Property is, shall be and shall remain the exclusive property of the Company. Consultant hereby assigns to the Company all right, title and interest in and to the Intellectual Property; provided, however, that, when applicable, Company shall own the copyrights in all copyrightable works included in the Intellectual Property pursuant to the "work-made-for-hire" doctrine (rather than by assignment), as such term is defined in the United States Code, Title 17, entitled "Copyrights". All Intellectual Property shall be owned by the Company irrespective of any copyright notices or confidentiality legends to the contrary which may have been placed on such works by 4 Consultant or by others. Consultant shall enure that all copyright notices and confidentiality legends on all work product authored by Consultant shall conform to the Company's practices and shall specify the Company as the owner for the work. 3.3 KEEP RECORDS. Consultant shall keep and maintain adequate and current written records of all Intellectual Property in the form of notes, sketches, drawings, computer files, reports or other documents relating thereto. Such records shall be and shall remain the exclusive property of the Company and shall be available to the Company at all times during Consultant's engagement and shall be turned over to Company at the conclusion of such engagement. 3.4 FURTHER ASSURANCES. During the period of Consultant's engagement by the Company and at all times thereafter, Consultant shall promptly execute any and all declarations, assignments, applications and other instruments which the Company shall deem necessary to apply for and obtain patents and copyright registrations in any country or otherwise to protect the Company's interests in the Intellectual Property. 4. NON-DISCLOSURE AND NON-USE. 4.1 CONFIDENTIAL INFORMATION. The term "Confidential Information" shall mean all information (whether or not specifically labeled or identified as confidential), in any form or medium, that is disclosed to, or developed or learned by, Consultant in the performance of services for the Company and that relates to the business, products, services, research or development of the Company or its suppliers, clients or customers. Such Confidential Information shall include, without limitation, the following: (i) internal business information (including, without limitation, information relating to strategic and staffing plans and practices, business, marketing, promotional and sales plans, practices and programs, training practices and programs, costs, rate and pricing structures and accounting and business methods); (ii) identities of, individual requirements of, specific contractual arrangements with, and information about, the Company's suppliers, clients and customers and their confidential information, suppliers, clients and customers; (iii) compilations of data (including, without limitation, the form or format of information that may comprise or include information otherwise not deemed confidential as provided in the following paragraph) and analyses, processes, methods, techniques, systems, research, records, reports, manuals, documentation, data and data bases relating thereto; (iv) computer software (including, without limitation, operation systems, source code, applications and programs listings), documentation, data and data bases; and (v) trade secrets, inventions, designs, developments, devices, methods and processes (whether or not patentable or reduced to practice). Confidential Information shall not include any information that Consultant can demonstrate: (i) has been made publicly known through no wrongful act or breach of obligation of confidentiality; (ii) was lawfully known to Consultant prior to the time it was 5 disclosed to, or learned by, Consultant during Consultant's engagement by the Company; (iii) was rightfully received by Consultant from a third party without a breach of any obligation of confidentiality by such third party; or (iv) is independently developed by Consultant without any use of the Confidential Information. 4.2 NON-DISCLOSURE. Consultant acknowledges and agrees that Consultant may have access and contribute to information and materials of a highly sensitive nature (including Confidential Information) and that a purpose of this Agreement is to protect the legitimate business interests of the Company therein. Consultant agrees that, during the period of Consultant's engagement by the Company and at all times thereafter, unless Consultant first secures the written consent of the Company, Consultant shall not use for Consultant or anyone else, and shall not disclose to others, any Confidential Information, except to the extent such use or disclosure is required in the performance of Consultant's assigned duties for the Company or by law or court order. Consultant further agrees to use Consultant's best efforts and utmost diligence to safeguard the Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. 4.3 REQUIRED DISCLOSURES. In the event that Consultant is required by law or court order to disclose any Confidential Information, Consultant: (i) shall notify the Company in writing as soon as possible, but in no event later than twenty (20) business days prior to any such disclosure except as required by court of law; (ii) shall cooperate with the Company to preserve the confidentiality of such Confidential Information consistent with applicable law; and (iii) shall use Consultant's best efforts to limit any such disclosure to the minimum disclosure necessary to comply with such law or court order. 5. INJUNCTIVE RELIEF. Without limiting the right of Company or any of its successors or permitted assigns to pursue all other legal and equitable rights available to them for violation of the covenants set forth in Paragraphs 2, 3 and 4 hereof, it is agreed that such other remedies cannot fully compensate Company and its successors and assigns for such a violation and that Company and its successors and assigns shall be entitled to injunctive relief to prevent violation or continuing violation hereof. It is the intent and understanding of each party that if, in any action before any court or agency legally empowered to enforce this covenant, any term, restriction, covenant or promise is found to be unreasonable and for that reason unenforceable, then such term, restriction, covenant or promise shall be deemed modified to the extent necessary to make it enforceable by such a court or agency. 6 6. TERM; TERMINATION. 6.1 TERM. The term of this Agreement shall be twenty-four (24) months. Notwithstanding the foregoing provisions to the contrary, this Agreement and Consultant's engagement with the Company as an independent contractor shall terminate immediately upon Consultant's death, Total Disability, or the termination of his engagement with the Company for "Cause". For purposes of this Agreement: (a) "Total Disability" of Consultant shall be deemed to have occurred hereunder when Consultant shall have failed or been unable to substantially perform his duties hereunder on a full-time basis for an aggregate of 180 days ("Disability Period") and with a certification from Consultant's licensed physician in the State of Ohio that Consultant is permanently disabled from performing his duties hereunder. Where the conclusion of one Disability Period is followed within six months by the start of a second Disability Period and the disabilities are the same or related, both Disability Periods shall be aggregated for purpose of this paragraph. (b) "Cause" shall mean and refer to any one or more of the following: (i) the gross misfeasance in the performance of his services as recited on Exhibit A under this Agreement; (ii) the commission by Consultant of theft, embezzlement or fraud against the Company; (iii) the commission by Consultant of a crime resulting in injury to the business, property or reputation of the Company or any of its affiliates; (iv) Consultant's adjudication as an incompetent; and (v) Consultant's use of non-prescription drugs or habitual intoxication; except that no termination for Cause under (b)(i) can occur until Company provides written notice of the specific items which it alleges constitute the misfeasance by Consultant and afford Consultant no less than thirty (30) days to correct such misfeasance. 6.2 RETURN OF MATERIALS. Upon any expiration or termination of Consultant's engagement by the Company, Consultant shall promptly deliver to the Company all Confidential Information and Intellectual Property in Consultant's possession and control, and all copies thereof, in whatever form or medium, including, without limitation, written records, optical and magnetic media, and all other materials containing any Confidential Information or Intellectual Property. If the Company requests, Consultant shall provide written confirmation that Consultant has returned all such materials. 6.3 ASSIGNMENT AFTER TERMINATION. Consultant acknowledges and agrees that any Intellectual Property conceived or created by Consultant (whether alone or jointly with others) within twelve months after termination of Consultant's engagement by the Company and which relates in any manner to the Company's business or business plans, may have been conceived or created in significant part during, or as a result of, Consultant's 7 engagement by the Company. Accordingly, Consultant agrees that such Intellectual Property will be presumed to have been conceived or created during the period of Consultant's engagement by the Company and shall be deemed Intellectual Property, unless and until established to the contrary by Consultant. 7. REPRESENTATIONS AND WARRANTIES. Consultant represents and warrants that: (i) Consultant has the full power and authority necessary to enter into this Agreement; (ii) Consultant will not breach or violate any other agreement to which Consultant is a party by entering into this Agreement; and (iii) none of the Intellectual Property will infringe, misappropriate or otherwise conflict with the proprietary rights of any third party. 8. GENERAL. 8.1 RELATIONSHIP OF PARTIES. Except as specifically provided herein, neither party shall act or represent or hold itself out as having authority to act as an agent or partner of the other party, or in any way bind or commit the other party to any obligations. Any such act will create a separate liability in the party so acting to any and all third parties affected thereby. The rights, duties, obligations and liabilities of the parties shall be several and not joint or collective, and nothing contained in this Agreement shall be construed as creating a partnership, joint venture, agency, trust or other association of any kind, each party being individually responsible only for its obligations as set forth in this Agreement. 8.2 ASSIGNMENT; BENEFIT. Consultant shall not assign, transfer or encumber this Agreement or any of its rights, duties or obligations hereunder, by operation of law or otherwise, without the prior written consent of the Company. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. 8.3 NOTICES. Any notices, consents or approvals required or permitted to be given hereunder shall be deemed to be given and sufficient when delivered in writing, first class, United States certified or registered letter, return receipt requested, or by overnight delivery or courier service, or by telecopy with written confirmation to the Company at the respective addresses first written above (or such other address provided by either party in accordance with this provision). 8.4 WAIVER. The failure of either party to exercise any power or right hereunder shall not be construed to be either a waiver of such power or right, or a waiver of any other power or right hereunder. 8.5 CHOICE OF LAW. This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Ohio, without giving effect to any choice 8 of law or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of Ohio. 8.6 SEVERABILITY. If any provision of this Agreement or any part hereof or application hereof to any person or circumstance shall be finally determined by a court of competent jurisdiction to be invalid or unenforceable to any extent, the remainder of this Agreement, or the remainder of such provision or the application of such provision to persons or circumstances other than those as to which it has been held invalid or unenforceable, shall not be affected thereby and each provision of this Agreement shall remain in full force and effect to the fullest extent permitted by law. The parties also agree that, if any portion of this Agreement, or any part hereof or application hereof, to any person or circumstance shall be finally determined by a court of competent jurisdiction to be invalid or unenforceable to any extent, any court may so modify the objectionable provision so as to make it valid, reasonable and enforceable. 8.7 SURVIVAL. Paragraphs 2, 3, 4 and 5 shall survive any expiration or termination of this Agreement. 8.8 ENTIRE AGREEMENT. This Agreement and all Exhibits attached hereto and incorporated herein by this reference contain the entire agreement between the parties hereto with respect to the subject matter hereof and supersede any previous understandings or agreements, whether written or oral, in respect of such subject matter. The language used in this Agreement shall be deemed to express the mutual intent of the parties. This Agreement may only be amended by the parties by a subsequent written agreement executed by their duly authorized representatives. 8.9 COUNTERPARTS. This Agreement may be signed in counterparts, each one containing the signature of only one party, but taken together constituting one and same instrument. 8.10 ARBITRATION. All controversies which may arise concerning any transaction, the construction, performance or breach of this Agreement shall be submitted to arbitration in accordance with the rules of The American Arbitration Association at a situs located in or around Cincinnati, Ohio. Any award rendered in arbitration may be enforced in any court of competent jurisdiction, and the party against whom the award is rendered shall pay attorneys' fees and costs of the party to whom the award is made. 8.11 INTERPRETATION. The parties hereto acknowledge and agree that (a) no rule of strict construction shall be applied to the interpretation of any provision hereunder, including, but not limited to, the rule of construction to the effect that any ambiguities are resolved against the drafting party, and (b) the terms and provisions of this Agreement shall be construed fairly as to all parties hereto and not in favor of or against any party, regardless of which party was generally responsible for the preparation of this Agreement. 9 8.12 HEADINGS AND CAPTIONS. The headings and captions of the various subdivisions of this Agreement are for convenience of reference only and shall in no way modify, or affect, or be considered in construing or interpreting the meaning or construction of any of the terms or provisions hereof. Any Exhibit referred to herein shall be construed with and as an integral part of this Agreement to the same extent as if set forth verbatim herein. 9. ACKNOWLEDGMENT. Consultant acknowledges and agrees that Consultant has fully read and understands this Agreement, has had the opportunity to discuss this Agreement with Consultant's attorney, has had any questions regarding its effect or the meaning of its terms answered to Consultant's satisfaction, and, intending to be legally bound hereby, has freely and voluntarily executed this Agreement. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date. COMPANY: NEOMEDIA TECHNOLOGIES, INC. By:/s/ CHARLES T. JENSEN --------------------------------------- Charles T. Jensen, Vice President, Treasurer and Chief Financial Officer CONSULTANT: /s/ GERALD L. WILLIS ------------------------------------------ Gerald L. Willis 10 EXHIBIT A GERALD WILLIS will be the Director of Sales and share the overall responsibilities of managing the Year 2000 and Migration Practices. His focus will be on sales and services as well as building client relationships. Mr. Willis will be a consultant to the Company and will report directly to Mr. Luntz. EXHIBIT B YEAR 1 YEAR 2 ------ ------ Base Salary $105,000 Base Salary $105,000 Addition Salary $137,500 Additional Salary $148,500 -------- -------- $242,500 $253,500 Payment for Non-Compete Agreement $200,000 at End of Year 2 EX-99.4 5 NeoMedia Technologies, Inc. Employment Agreement Dated August 30, 1997 By and Between NeoMedia Technologies, Inc. and George Luntz Exhibit 99.4 E M P L O Y M E N T A G R E E M E N T THIS AGREEMENT is made and entered into as of the 30th day of August, 1997, by and between NEOMEDIA TECHNOLOGIES, INC., a Delaware corporation with offices at 2201 Second Street, Suite 600, Fort Myers, Florida (the "Company") and GEORGE LUNTZ (hereinafter referred to as the "Employee"). WHEREAS, the Company desires to enter into an agreement for the employment of Employee by the Company and to be assured of the continued services of Employee and Employee desires to enter into employment by the Company on the terms provided herein. NOW, THEREFORE, in consideration of the premises and of the terms, covenants and conditions hereinafter contained, the parties hereto agree as follows: 1. EMPLOYMENT, DUTIES AND AUTHORITY. The Company hereby employs Employee and Employee hereby accepts employment by the Company on the terms, covenants and conditions herein contained. The Employee shall have such duties, responsibilities and authority as recited on Exhibit A. During the term of Employee's employment hereunder, Employee shall devote his full time to the performance of his duties and responsibilities hereunder and will perform such duties and responsibilities faithfully and with reasonable care for the welfare of the Company. During the term of his employment hereunder, Employee shall not perform any services for compensation for any person, firm, partnership or corporation other than the Company without the express written consent of the President of the Company. 2. COMPENSATION. 2.1 BASE SALARY. The Company shall pay to Employee during the initial term of employment hereunder and each renewal term the compensation as described in Exhibit B. Employee hereby elects to defer the amount of $450,000 of the amount due to Employee under this Agreement. In no event shall Employee accept, nor should Company pay any such sums due Employee until Employee affirmatively makes written election to receive such funds. 2.2 STOCK OPTIONS. In further consideration of Employee's agreement not to compete with Company as recited herein, Company grants to Employee under the Company's stock option plan currently in existence upon execution of this Agreement 15,000 stock options at an exercise price equal to the price of the underlying shares on the date of execution. 2.3 INCENTIVE PLAN. Employee shall be entitled to participate in Company's Management Incentive Plan based on his Base Salary on Exhibit B at the same level as other Vice-Presidents and Directors of the Company. 2.4 PAYMENT DURING ABSENCES. If Employee shall be absent from work on account of personal injuries or sickness, he shall continue to receive the payments provided for in paragraph 2.1 hereof; provided, however, that any such payment may, at the Company's option, be reduced by the amount which the Employee may receive, for the period covered by any such payments, in disability payments (i) pursuant to any disability insurance which the Company, in its sole discretion, may maintain, or (ii) under any governmental program for disability compensation. 2.5 CLOSING OF STOCK PURCHASE AGREEMENT. This Employment Agreement is conditional on the closing ("Closing") of that certain Stock Purchase Agreement between the Company and George Luntz and Gerald L. Willis. In the event of a failure to close such transaction, this Agreement, the stock options granted hereunder and all remaining rights of Employee arising hereunder shall be void and of no force and effect. 3. BENEFITS; VACATION; EXPENSE REIMBURSEMENT. 3.1 BENEFITS. The Employee shall be entitled to, and shall receive, all other benefits of employment available to other Employees of the Company generally, including, without limitation, participation in any medical, dental or other group health plans or accident benefits, life insurance benefits, pension or profit-sharing plans, as shall be instituted by the Company, in its sole discretion. 3.2 VACATION. Employee shall be entitled to annual vacation in accordance with Company policy. 3.3 EXPENSE REIMBURSEMENT. During the term hereof, the Company shall reimburse Employee for all reasonable and necessary business related expenses incurred by Employee in the performance of his duties hereunder, including without limitation, travel, meals, lodging, office supplies or equipment subject to such reasonable limitations, restrictions and reporting standards the Company may from time to time establish. Employee shall provide to the Company promptly after incurring any such expenses a detailed report thereof and such documentation as the Company shall from time to time require and as shall be sufficient to support the deductibility of all such expenses by the Company for federal income tax purposes. 2 4. TERM. The employment of Employee hereunder shall be for a term commencing on August 30, 1997 and expiring on August 29, 1999. Upon the expiration of the initial term or any renewal term of Employee's employment hereunder, the term of such employment automatically shall be renewed for an additional term of one year unless Employee or the Company shall give notice of the termination of Employee's employment and this Agreement by written notice to the other no less than 60 days prior to the date of expiration of the initial or any renewal term. 5. TERMINATION BY COMPANY. 5.1 COMPANY'S RIGHT TO TERMINATE PRIOR TO EXPIRATION OF TERM. The Company shall be entitled to terminate this Agreement prior to the expiration of its term or any renewal term on the occurrence of either: (a) an event of default with respect to Employee, as provided herein, or (b) Death or Total Disability of Employee, as defined herein, occurring during the term or any renewal term of Employee's employment hereunder. 5.2 EVENT OF DEFAULT BY EMPLOYEE. For purposes of this paragraph, an event of default with respect to Employee shall include: (a) any gross misfeasance by Employee in the performance of his duties as recited on Exhibit A and the failure by Employee to cure such misfeasance within 30 days after written notice thereof shall have been given to Employee by the Company; (b) embezzlement or conversion by Employee of any funds of Company or any client of Company; (c) destruction or conversion by Employee of any property of Company, without Company's consent; (d) Employee's conviction of a felony; (e) Employee's adjudication as an incompetent; (f) Employee's habitual intoxication; or (g) Employee's drug addiction. 3 No termination for Cause under (a) can occur until Company provides written notice of the specific items which it alleges constitute the misfeasance by Employee and afford Employee no less than thirty (30) days to correct such misfeasance. 5.3 TOTAL DISABILITY. Total Disability of Employee shall be deemed to have occurred hereunder when Employee shall have failed or been unable to substantially perform his duties hereunder on a full-time basis for an aggregate of 180 days ("Disability Period") and with a certification from Employee's licensed physician in the State of Ohio that Employee is permanently disabled from performing his duties hereunder. Where the conclusion of one Disability Period is followed within six months by the start of a second Disability Period and the disabilities are the same or related, both Disability Periods shall be aggregated for purpose of this paragraph. 5.4 EFFECT OF TERMINATION. In the event of termination of this Agreement and Employee's employment pursuant to Paragraph 5.1 hereof, all rights and obligations of the Company and Employee hereunder shall terminate on the date of such termination, subject to the following: (a) Employee shall be entitled to receive (subject to any rights of setoff or counterclaim by the Company) all salary, additional compensation and benefits which shall have accrued prior to the date of such termination, and the obligation of the Company for the payment of salary, additional compensation or benefits shall terminate as of the date of such termination; and (b) All rights of the Company or Employee which shall have accrued hereunder prior to the date of such termination, and all provisions of this Agreement which are to survive termination of employment of Employee hereunder, shall survive such termination, and the Company and Employee shall continue to be bound by such provisions in accordance with the terms thereof. 5.5 DEATH OF EMPLOYEE. This Agreement and all rights and obligations of the parties hereunder shall terminate immediately upon the death of Employee except that the Company shall pay to the heirs, legatees or personal representative of Employee all compensation or benefits hereunder accrued but not paid to the date of Employee's death. 6. TERMINATION BY EMPLOYEE. 6.1 EMPLOYEE'S RIGHT TO TERMINATE. Employee shall be entitled to terminate his employment with the Company under this Agreement prior to the expiration of its term upon the occurrence of an event of default with respect to the Company. 4 6.2 EVENT OF DEFAULT BY COMPANY. For purposes of this paragraph, an event of default with respect to the Company shall include: (a) Any failure by the Company to perform its obligations to Employee under this Agreement and (if such failure can be cured) the failure by the Company to cure such failure within thirty (30) days after written notice thereof shall have been given to the Company by Employee; (b) Company's filing a petition for relief under any chapter of Title 11 of the United States Code or a petition to take advantage of any insolvency laws of the United States of America or any state thereof; (c) Company's making an assignment for the benefit of its creditors; (d) Company's consent to the appointment of a receiver of itself or of the whole or any substantial part of its property; or (e) Company's filing a petition or answer seeking reorganization under the Federal Bankruptcy Laws or any other applicable law or statute of the United States of America or any state thereof. 6.3 EFFECT OF TERMINATION. In the event of termination of the Agreement by Employee in accordance with Paragraph 6.1 hereof, all rights and obligations of the Company and Employee hereunder shall terminate on the date of such termination, subject to the following: (a) Employee shall be entitled to receive all salary, additional compensation and benefits which shall have accrued prior to the date of such termination and salary, incentive compensation and other payments due for the remaining term of the Agreement; and (b) All rights of the Company or Employee which shall have accrued hereunder prior to the date of such termination and all provisions of this Agreement which are to survive termination of employment of Employee hereunder except those arising under Section 7 shall survive such termination, and the Employee shall continue to be bound by such provisions in accordance with their terms. 7. NON-COMPETITION AND NON-SOLICITATION. 7.1 NON-COMPETITION. Employee agrees that, so long as he is employed by Company pursuant to this Agreement, and for a period of two years following expiration of the term or termination of this Agreement, other than termination by Employee pursuant to 5 Paragraph 6.1 hereof, he will not, directly or indirectly, as a sole proprietor, member of a partnership, stockholder, investor, officer or director of a corporation, or as an employee, agent, associate or consultant of any person, partnership or corporation other than Company or in any other capacity do any of the following: (a) Employee shall not, in any manner or way whatsoever, own, manage, operate, participate in, perform services for or otherwise carry on a business anywhere in the world performing any of the services provided at any time by, or utilizing or selling any of the products, software or tools developed or owned at any time by, the Company which are related in any manner or way whatsoever, to the business and services of the Company's: (i) Year 2000 business; (ii) Migration business; (iii) Intelligent Document business; (iv) Systems Transition Solutions business; and (v) Document Systems Solutions business. (b) Employee shall not induce or attempt to persuade any employee of Company to terminate such employment relationship in order to enter into any such relationship with such person or to enter into any such relationship on behalf of any other business organization in competition with Company or any of its affiliates; (c) Employee shall not solicit any business related to the business conducted by Company from any clients, agencies of clients, customers, or agencies of clients or customers of Company; or (d) Employee shall not perform services of any nature for any entity which engages in or conducts any business that competes with, restricts or interferes with the business of Company, other than the business performed by ALS on August 30, 1997. 7.2 NON-SOLICITATION. During the term of this Agreement and for a period of twenty-four (24) months after the termination hereof, for any reason, Employee shall not, in any manner or way whatsoever, solicit any employee of the Company for employ by the Employee or by any third party. 7.3 REASONABLENESS. Employee acknowledges and agrees that the limitations set forth in this Agreement are reasonable with respect to scope, duration, geographic area and 6 otherwise, and are properly required to protect the legitimate business interests of the Company. 8. CONFIDENTIAL INFORMATION AND INTELLECTUAL PROPERTY. 8.1. CONFIDENTIAL INFORMATION. The term "Confidential Information" shall mean all information (whether or not specifically labeled or identified as confidential), in any form or medium, that is disclosed to, or developed or learned by, Employee in the performance of services for the Company and that relates to the business, products, services, research or development of the Company or its suppliers, clients or customers. Such Confidential Information shall include, without limitation, the following: (i) internal business information (including, without limitation, information relating to strategic and staffing plans and practices, business, marketing, promotional and sales plans, practices and programs, training practices and programs, costs, rate and pricing structures and accounting and business methods); (ii) identities of, individual requirements of, specific contractual arrangements with, and information about, the Company's suppliers, clients and customers and their confidential information, suppliers, clients and customers; (iii) compilations of data (including, without limitation, the form or format of information that may comprise or include information otherwise not deemed confidential as provided in the following paragraph) and analyses, processes, methods, techniques, systems, research, records, reports, manuals, documentation, data and data bases relating thereto; (iv) computer software (including, without limitation, operation systems, source code, applications and programs listings), documentation, data and data bases; and (v) trade secrets, inventions, designs, developments, devices, methods and processes (whether or not patentable or reduced to practice). Confidential Information shall not include any information that Employee can demonstrate: (i) has been made publicly known through no wrongful act or breach of obligation of confidentiality; (ii) was lawfully known to Employee prior to the time it was disclosed to, or learned by, Employee during Employee's employment by the Company; (iii) was rightfully received by Employee from a third party without a breach of any obligation of confidentiality by such third party; or (iv) is independently developed by Employee without any use of the Confidential Information. 8.2 INTELLECTUAL PROPERTY. The term "Intellectual Property" shall mean all trade secrets, inventions, designs, developments, ideas, devices, methods and processes (whether or not patented or patentable, reduced to practice or included in the Confidential Information) and all patents and patent applications related thereto, all copyrights, copyrightable works and mark works (whether or not included in the Confidential Information) and all registrations and applications for registration related thereto, all Confidential Information, and all other proprietary rights contributed to, or conceived or created by, Employee (whether alone or jointly with others) at any time during Employee's engagement by the Company that: (i) relate to the business or to the actual or anticipated research or development of the Company; (ii) result from any work that Employee performs for the 7 Company; or (iii) are created using the equipment, supplies or facilities of the Company or any Confidential Information. 8.3 OWNERSHIP. All Intellectual Property is, shall be and shall remain the exclusive property of the Company. Employee assigns to the Company all right, title and interest in and to the Intellectual Property; provided, however, that, when applicable, Company shall own the copyrights in all copyrightable works included in the Intellectual Property pursuant to the "work-made-for-hire" doctrine (rather than by assignment), as such term is defined in the United States Code, Title 17, entitled "Copyrights". All Intellectual Property shall be owned by the Company irrespective of any copyright notices or confidentiality legends to the contrary which may have been placed on such works by Employee or by others. Employee shall enure that all copyright notices and confidentiality legends on all work product authored by Employee shall conform to the Company's practices and shall specify the Company as the owner for the work. 8.4 KEEP RECORDS. Employee shall keep and maintain adequate and current written records of all Intellectual Property in the form of notes, sketches, drawings, computer files, reports or other documents relating thereto. Such records shall be and shall remain the exclusive property of the Company and shall be available to the Company at all times during Employee's engagement and shall be turned over to Company at the conclusion of such engagement and keep original documents and computer files at the office and password to computer made known to Director of Human Resources. 8.5 FURTHER ASSURANCES. During the period of Employee's engagement by the Company and at all times thereafter, Employee shall promptly execute any and all declarations, assignments, applications and other instruments which the Company shall deem necessary to apply for and obtain patents and copyright registrations in any country or otherwise to protect the Company's interests in the Intellectual Property. 9. NON-DISCLOSURE AND NON-USE. 9.1 NON-DISCLOSURE. Employee acknowledges and agrees that Employee may have access and contribute to information and materials of a highly sensitive nature (including Confidential Information and Intellectual Property) and that a purpose of this Agreement is to protect the legitimate business interests of the Company therein. Employee agrees that, during the period of Employee's employment by the Company and at all times thereafter, unless Employee first secures the written consent of the Company, Employee shall not use for Employee or anyone else, and shall not disclose to others, any Confidential Information, except to the extent such use or disclosure is required in the performance of Employee's assigned duties for the Company or by law or court order. Employee further agrees to use Employee's best efforts and utmost diligence to safeguard the Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. 8 9.2 REQUIRED DISCLOSURES. In the event that Employee is required by law or court order to disclose any Confidential Information, Employee: (i) shall notify the Company in writing as soon as possible, but in no event later than twenty (20) business days prior to any such disclosure except as required by court of law; (ii) shall cooperate with the Company to preserve the confidentiality of such Confidential Information consistent with applicable law; and (iii) shall use Employee's best efforts to limit any such disclosure to the minimum disclosure necessary to comply with such law or court order. 10. WRITINGS AND WORKING PAPERS. Employee covenants and agrees that any and all books, textbooks, letters, pamphlets, drafts, memoranda or other writings of any kind written by him for or on behalf of the Company or in the performance of Employee's duties hereunder, Confidential Information referred to in paragraph 8 hereof and all notes, records and drawings made or kept by him of work performed in connection with his employment by the Company shall be and are the sole and exclusive property of the Company and the Company shall be entitled to any and all copyrights thereon or other rights relating thereto. Employee agrees to execute any and all documents or papers of any nature which the Company or its successors, assigns or nominees deem necessary or appropriate to acquire, enhance, protect, perfect, assign, sell or transfer its rights under this paragraph. Employee also agrees that upon request he will place all such notes, records and drawings in the Company's possession and will not take with him without the written consent of a duly authorized officer of the Company any notes, records, drawings, blueprints or other reproductions relating or pertaining to or connected with his employment of the business, books, textbooks, pamphlets, documents work or investigations of the Company. The obligations of this paragraph shall survive the term of employment hereunder or the termination or expiration of the term or any renewal term hereof. 11. INJUNCTIVE RELIEF. Without limiting the right of Company or any of its successors or permitted assigns to pursue all other legal and equitable rights available to them for violation of the covenants set forth in Paragraphs 7, 8 and 9, it is agreed that such other remedies cannot fully compensate Company and its successors and assigns for such a violation and that Company and its successors and assigns shall be entitled to injunctive relief to prevent violation or continuing violation hereof. It is the intent and understanding of each party that if, in any action before any court or agency legally empowered to enforce this covenant, any term, restriction, covenant or promise is found to be unreasonable and for that reason unenforceable, then such term, restriction, covenant or promise shall be deemed modified to the extent necessary to make it enforceable by such a court or agency. 9 12. GENERAL. 12.1 ASSIGNMENT. The rights and duties of a party hereunder shall not be assignable by that party, without the express written consent of the other party. 12.2 BINDING EFFECT. This Agreement shall be binding upon the parties hereto and their respective successors in interest, heirs and personal representatives and, to the extent permitted herein, their assigns. 12.3 SEVERABILITY. If any provision of this Agreement or any part hereof or application hereof to any person or circumstance shall be finally determined by a court of competent jurisdiction to be invalid or unenforceable to any extent, the remainder of this Agreement, or the remainder of such provision or the application of such provision to persons or circumstances other than those as to which it has been held invalid or unenforceable, shall not be affected thereby and each provision of this Agreement shall remain in full force and effect to the fullest extent permitted by law. The parties also agree that, if any portion of this Agreement, or any part hereof or application hereof, to any person or circumstance shall be finally determined by a court of competent jurisdiction to be invalid or unenforceable to any extent, any court may so modify the objectionable provision so as to make it valid, reasonable and enforceable. 12.4 SURVIVAL. Paragraphs 7, 8 and 9 shall survive any expiration or termination of this Agreement. 12.5 NOTICES. All notices, or other communications required or permitted to be given hereunder shall be in writing and shall be delivered personally or mailed, certified mail, return receipt requested, postage prepaid, to the parties as follows: If to the Company: NeoMedia Technologies, Inc. 2201 Second Street, Suite 600 Fort Myers, FL 33901 If to Employee: George Luntz 4307 Peppermill Lane Cincinnati, OH 45242 Any notice mailed in accordance with the terms hereof shall be deemed received on the third day following the date of mailing. Either party may change the address to which notices to such party may be given hereunder by serving a proper notice of such change of address to the other party. 10 12.6 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior written or oral negotiations, representations, agreements, commitments, contracts or understandings with respect thereto and no modification, alteration or amendment to this Agreement may be made unless the same shall be in writing and signed by both of the parties hereto. 12.7 WAIVERS. No failure by either party to exercise any of such party's rights hereunder or to insist upon strict compliance with respect to any obligation hereunder, and no custom or practice of the parties at variance with the terms hereof, shall constitute a waiver by either party to demand exact compliance with the terms hereof. Waiver by either party of any particular default by the other party shall not affect or impair such party's rights in respect to any subsequent default of the same or a different nature, nor shall any delay or omission of either party to exercise any rights arising from any default by the other party affect or impair such party's rights as to such default or any subsequent default. 12.8 GOVERNING LAW; JURISDICTION. For purposes of construction, interpretation and enforcement, this Agreement shall be deemed to have been entered into under the laws of the State of Ohio and its validity, effect, performance, interpretation, construction and enforcement shall be governed by and subject to the laws of the State of Ohio. 12.9 JURISDICTION AND VENUE. Any and all suits for any and every breach of this Agreement may be instituted and maintained in any court of competent jurisdiction in the State of Ohio and the parties hereto consent to the jurisdiction and venue in such court and the service of process by certified mail to the addresses for the parties provided for notices herein. 13. ACKNOWLEDGMENT. Employee acknowledges and agrees that Employee has fully read and understands this Agreement, has had the opportunity to discuss this Agreement with Employee's attorney, has had any questions regarding its effect or the meaning of its terms answered to Employee's satisfaction, and, intending to be legally bound hereby, has freely and voluntarily executed this Agreement. 11 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. NEOMEDIA TECHNOLOGIES, INC. By: /s/ CHARLES T. JENSEN ---------------------------------------- Charles T. Jensen, Vice President, Treasurer and Chief Financial Officer EMPLOYEE: /s/ GEORGE LUNTZ ---------------------------------------- George Luntz 12 EXHIBIT A GEORGE LUNTZ will be called the General Manager of Year 2000 and Migration Practices. He will be responsible for the delivery, integration and development of those programs. He will have the overall responsibility for the practices and reports to Kevin Leininger, Vice President of Business Development. Mr. Luntz will be a regular full time employee. EXHIBIT B YEAR 1 YEAR 2 ------ ------ Base Salary $132,000 Base Salary $132,000 Additional Salary $137,500 Additional Salary $148,500 -------- -------- $269,500 $280,000 Payment for Non-Compete Agreement $200,000 At End of Year 2 -----END PRIVACY-ENHANCED MESSAGE-----