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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
NeoMedia Technologies, Inc.
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(NAME OF ISSUER)
Common Stock, $.01 par value per share
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(TITLE OF CLASS OF SECURITIES)
64055 10 3
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(CUSIP NUMBER)
Thomas A. Caneris, Esq.
Thompson Hine & Flory LLP
Suite 1400
312 Walnut Street
Cincinnati, Ohio 45202
(513) 352-6756
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(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
September 25, 1997
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(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with this statement / /.
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CUSIP NO. 64055 10 3 Page 2 of 5 Pages
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1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Gerald L. Willis
11025 Reed Hartman Highway
Cincinnati, Ohio 45242
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
SC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
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7 SOLE VOTING POWER
NUMBER OF 535,000
SHARES --------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
EACH --------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 535,000
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10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
535,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW
(11) EXCLUDES CERTAIN SHARES* / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11)
8.0%
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14 TYPE OF REPORTING PERSON
IN
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ITEM 1. SECURITY AND ISSUER.
This statement relates to the common stock, $.01 par value per share
("Common Stock") of NeoMedia Technologies, Inc. (the "Company"), 2201 Second
Street, Suite 600, Fort Myers, Florida 33901.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c) Gerald L. Willis (the "Shareholder"), whose business address
is 11025 Reed Hartman Highway, Cincinnati, Ohio 45242. The
Shareholder is the President of Allegiant Data Systems, Inc.
("ADS"), a company performing systems integration services.
The Shareholder, through ADS, provides consulting services to
Allegiant Legacy Solutions, Inc. ("ALS").
(d) The Shareholder during the last five (5) years, has not been
convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) The Shareholder during the last five (5) years, has not been a
party to a civil proceeding of a judicial or administrative
body of competent jurisdiction which resulted in his being at
any time subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
(f) United States citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS.
On September 5, 1997, the Company closed a Stock Purchase Agreement
dated August 30, 1997 (the "Agreement") to acquire all of the stock of ALS.
George Luntz and the Shareholder (collectively, the "Sellers") were the owners
of all of the issued and outstanding shares of common capital stock of ALS.
Pursuant to the Agreement, the Sellers exchanged all of their shares in ALS for
an aggregate of 1,070,000 shares of Common Stock (or 535,000 shares of Common
Stock each). Additionally, the Company made a stock option grant to the
Shareholder pursuant to the Company's 1996 Stock Option Plan of an option to
purchase 10,000 shares of Common Stock with an exercise price of $10.88 per
share (the "Option"). The Option becomes exercisable in full on August 30, 1998
and terminates on August 29, 2007.
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ITEM 4. PURPOSE OF TRANSACTION.
This Schedule 13D is being filed to report the Shareholder's
acquisition of beneficial ownership of Common Stock pursuant to the Agreement.
The Shareholder intends to monitor the market for the Common
Stock and may sell some or all of the Common Stock from time to time, depending
on conditions. Such sales could be in one or more public or private
transactions.
The Shareholder has no plans or proposals which relate to or
would result in any of the following events:
(a) The acquisition by any person of additional securities of
the Company, or the disposition of securities of the Company;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of the
Company or any of its subsidiaries;
(d) Any change in the present board of directors or management
of the Company, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or
dividend policy of the Company;
(f) Any other material change in the Company's business or
corporate structure;
(g) Changes in the Company's Certificate of Incorporation or
Bylaws or other actions which may impede the acquisition of control of the
issuer by any person;
(h) Causing a class of securities of the Company to be
delisted from a national securities exchange or to cease to be authorized to be
quoted on an inter-dealer quotation system of a registered national securities
association;
(i) A class of equity securities of the Company becoming
eligible for termination of registration pursuant to Section 12(g)(4) of the
Act; or
(j) Any action similar to any of those enumerated above.
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ITEM 5. INTEREST IN SECURITIES OF ISSUER.
(a) - (b). The Shareholder owns 535,000 shares (8.0%) of the
Common Stock. The Shareholder has registration rights for the Common Stock.
Additionally, the Shareholder owns an option to purchase 10,000 shares of Common
Stock with an exercise price of $10.88 per share. The option does not vest until
August 30, 1998, at which time it will vest in full. The option will terminate
on August 29, 2007.
(c) Except as reported herein, the Shareholder has not
effected any transactions in equity securities of the Company during the past
sixty days.
(d) None
(e) Not Applicable
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
The Shareholder is a party to the following agreements, all of
which are discussed in Item 5 above:
1. Registration Rights Agreement dated September 25, 1997
relating to the Common Stock.
Other than as listed above, the Shareholder is not a party to
any agreement with respect to any securities of the Company, including
agreements with respect to the transfer or voting of any such securities,
finder's fees, joint ventures, loans or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, or the giving or withholding
of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Registration Rights Agreement dated September 25, 1997.
After reasonable inquiry and to the best knowledge and belief
of the undersigned, it is hereby certified that the information set forth in
this statement is true, complete and correct.
Dated: October 3, 1997 /s/ GERALD L. WILLIS
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Gerald L. Willis
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into
as of this _____ 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.
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"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
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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,
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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
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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;
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(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;
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(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.
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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
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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
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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.
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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 100
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.
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<PAGE> 12
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.
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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 FRITZ
----------------------------------------
Name: Charles Fritz
Title: President
/s/ GERALD L. WILLIS
-------------------------------------------
GERALD L. WILLIS
/s/ GEORGE G. LUNTZ
-------------------------------------------
GEORGE G. LUNTZ
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