EX-99.5 7 ex99_5.txt EXHIBIT 99.5 BINDING LETTER OF INTENT PROPOSED TRANASACTION BETWEEN NEOMEDIA TECHNOLOGIES, INC. AND SECURE SOURCE TECHNOLOGIES THE TERMS SET FORTH ON THE MEMORANDUM OF TERMS ARE INTERDEPENDENT, AND NO SINGLE ASPECT OF THE MEMORANDUM OF TERMS SHOULD BE CONSIDERED OR VALUED ON A STAND-ALONE BASIS. Secure Source Technologies (SST) and NeoMedia intend to complete a transaction to substantially enhance their respective shareholder values. Secured Source Technologies and NeoMedia seek to: 1. Acquire Secure Source Technologies with NeoMedia Technologies, Inc. common stock. 2. Centralize administrative and management functions. 3. Enhance shareholder value through the increase of cash flow from patent licensing and value added reseller operations as well as by decreasing expenditures through centralization. To effectuate these goals, NeoMedia and Secure Source Technologies have agreed to and will: ACTION STEPS: NEOMEDIA WILL: SECURE SOURCE TECHNOLOGIES WILL: 1. EXCHANGE OF SHARES: NeoMedia Technologies, Inc. Board a) Obtain the necessary of Directors approval has already approval from its approve this transaction subject shareholders in order to to completion of due effectuate a merger with diligence satisfactory to NeoMedia NeoMedia Technologies. Additionally, NeoMedia will obtain Additionally, convert from Secure Source Technologies all outstanding debt, shareholders a total exchange of other than trade its shares for shares of common payables, and all shares stock in NeoMedia Technologies, of preferred stock into Inc. NeoMedia will exchange three shares of common stock million five hundred thousand of of Secure Source its shares for the total Technologies prior to outstanding shares of both common the merger with NeoMedia and preferred stock and any Technologies. outstanding warrants or other share instruments of Secure Source Technologies. 2. MANAGEMENT AND ADMINISTRATION: Secure Source Technologies will turn over all management and administrative responsibilities for the NeoMedia will consolidate all combined entity to NeoMedia senior management and Technologies. Secure Source administrative functions. The Technologies will turn over accounting, legal, treasury, and all existing assets in this Human Resources functions will be transaction. Assets include combined and headquartered at its all tangible and intangible Ft. Myers, Florida home office. assets, Intellectual property (issued and pending and in The Board of Directors of NeoMedia process), all technology Technologies will remain the Board developed, designed, and of Directors for the combined planned, all hardware, entity. software, customer lists, all names, copyrights, trademarks, Neomedia will negotiate in good and all possible assets faith a consulting agreement with including contracts Secure Source management. Secure Source Technologies will receive Piggyback Registration Rights on all shares issued by NeoMedia Technologies, Inc. 3. LOCK-UP: Recipients of the NeoMedia Technologies, Inc. stock Certain NeoMedia Technologies, exchange will have the right Inc. officers and directors are to sell, immediately upon subject to Rule 144 in regards to registration, 500,000 shares the sale of their shares. in the open market, but will be restricted to sell no more than an additional 600,000 shares per month for the following five months. There is no requirement to sell any shares during this period or any subsequent period if SST shareholders desire not to sell. 4. DUE DILIGENCE: Secure Source Technologies will conduct its due diligence NeoMedia will conduct its due utilizing both internal and diligence utilizing both internal outside professionals, as it and outside professionals, as it requires. It will bear the requires. It will bear the costs costs of its own due of its own due diligence, which diligence, which will include, will include, but not be limited but not be limited to, legal to, legal and accounting costs. and accounting costs. SST agrees that until 5. MANAGEMENT CONTRACTS: October 1, 2003 it will not enter into any agreements or NeoMedia has no Management discussions with any third Contracts at this time. parties relative to the sale or transfer of any of its common stock or preferred stock or its assets (including patents). 6. ISSUANCE OF SHARES: Secure Source Technologies will terminate any open NeoMedia will issue management contracts prior to the additional shares of its merger. stock as required in the normal course of business. 7. PRESS RELEASE: Secure Source Technologies and NeoMedia Technologies, Inc. agree to mutually satisfactory press announcement for immediate release once this document is signed. DEFINITIVE The final agreement will set forth the terms and conditions for AGREEMENT: both NeoMedia and Secure Source Technologies and contain representations and warranties, covenants and indemnities consistent with transactions of this type. APPROVALS: This merger has already been approved the respective Board of Directors of NeoMedia Technologies, Inc. and Secure Source Technologies. Due diligence on the SST patents is complete. This Letter is binding subject to due diligence on, liabilities, and a favorable shareholder vote to increase the NeoMedia Technologies, Inc. shares outstanding on Sept 24, 2003, no further approvals are required. This makes this Letter of Intent a binding document once executed by the parties. CLOSING: As soon as practicable, but no later than October 1, 2003 subject to extension by written mutual consent or to satisfy any regulatory requirements. Upon completion of due diligence and definitive documentation, each party will be required to close absent unusual circumstances, failure to deliver required documentation set forth under the definitive agreements, shareholder litigation, regulatory requirements and fraudulent disclosures. Neomedia and Secure Source agree to keep the terms and conditions of this acquisition/merger confidential subject to regulatory requirements. Dated: July 25, 2003 Dated: July 25, 2003 /s/ Charles T. Jensen /s/ Jon Greene ------------------------------ ------------------------------ CHARLES T. JENSEN JON GREENE CEO, NEOMEDIA TECHNOLOGIES CEO, SECURE SOURCE TECHNOLOGIES