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.
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(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)
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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
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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
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NEOMEDIA TECHNOLOGIES, INC.
---------------------------
(Registrant)
Date: OCTOBER 8, 1997 By: /s/ CHARLES W. FRITZ
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Charles W. Fritz, President, Chief Executive
Officer and Chairman of the Board
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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
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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
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STOCK PURCHASE AGREEMENT
NEOMEDIA TECHNOLOGIES, INC.
and
GEORGE LUNTZ and GERALD L. WILLIS
AUGUST 30, 1997
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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
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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
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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
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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
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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
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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.
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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.
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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
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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;
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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;
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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.
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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
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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.
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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
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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
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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
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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.
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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;
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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.
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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
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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:
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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
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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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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.
<PAGE>
ALLEGIANT LEGACY SOLUTIONS, INC.
EXHIBIT 5.2
SCHEDULE OF CAPITAL STOCK
NONE
<PAGE>
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.
<PAGE>
ALLEGIANT LEGACY SOLUTIONS, INC.
EXHIBIT 5.7
SCHEDULE OF EQUITY INVESTMENTS
NONE
<PAGE>
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.
<PAGE>
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.
<PAGE>
ALLEGIANT LEGACY SOLUTIONS, INC.
EXHIBIT 5.15
SCHEDULE OF INSURANCE
(a) NONE
(b)(i) NONE
(b)(ii) NONE
<PAGE>
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
<PAGE>
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
===========
<PAGE>
ALLEGIANT LEGACY SOLUTIONS, INC.
EXHIBIT 5.22
SCHEDULE OF ABSENCE OF LITIGATION
NONE
<PAGE>
ALLEGIANT LEGACY SOLUTIONS, INC.
EXHIBIT 5.23
SCHEDULE OF NO INTEREST IN COMPETITORS
NONE
<PAGE>
ALLEGIANT LEGACY SOLUTIONS, INC.
EXHIBIT 5.24
SCHEDULE OF TAXES
NONE
<PAGE>
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
<PAGE>
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.
<PAGE>
ALLEGIANT LEGACY SOLUTIONS, INC.
EXHIBIT 5.27
SCHEDULE OF NO CONSENTS REQUIRED
NONE
<PAGE>
ALLEGIANT LEGACY SOLUTIONS, INC.
EXHIBIT 5.28
SCHEDULE OF PATENTS, TRADEMARKS, COPYRIGHTS, ETC.
NONE
<PAGE>
ALLEGIANT LEGACY SOLUTIONS, INC.
EXHIBIT 5.29
SCHEDULE OF PERMITS, LICENSES, ETC.
NONE
<PAGE>
ALLEGIANT LEGACY SOLUTIONS, INC.
EXHIBIT 5.30
SCHEDULE OF MARKETABLE TITLE AND NO LIENS
NONE
<PAGE>
ALLEGIANT LEGACY SOLUTIONS, INC.
EXHIBIT 5.31
SCHEDULE OF POWERS OF ATTORNEY
NONE
<PAGE>
ALLEGIANT LEGACY SOLUTIONS, INC.
EXHIBIT 5.32
SCHEDULE OF SUFFICIENCY OF ASSETS AND COMMITMENTS
NONE
<PAGE>
ALLEGIANT LEGACY SOLUTIONS, INC.
EXHIBIT 5.33
SCHEDULE OF LABOR DISPUTES, UNFAIR LABOR PRACTICES
NONE
<PAGE>
ALLEGIANT LEGACY SOLUTIONS, INC.
EXHIBIT 5.34
SCHEDULE OF PAST DUE OBLIGATIONS
NONE
<PAGE>
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
<PAGE>
ALLEGIANT LEGACY SOLUTIONS, INC.
EXHIBIT 10.14
SCHEDULE OF UPDATE OF EXHIBITS
NONE
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
<PAGE>
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.
<PAGE>
"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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<PAGE>
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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<PAGE>
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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<PAGE>
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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<PAGE>
(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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<PAGE>
(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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<PAGE>
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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<PAGE>
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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<PAGE>
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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<PAGE>
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.
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<PAGE>
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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<PAGE>
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
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NeoMedia Technologies, Inc.
Consulting Agreement Dated August 30, 1997 By and Between
NeoMedia Technologies, Inc.
and Gearld L. Willis
Exhibit 99.3
<PAGE>
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.
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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:
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(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;
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(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
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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
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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.
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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
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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
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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.
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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
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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.
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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
NeoMedia Technologies, Inc.
Employment Agreement Dated August 30, 1997
By and Between NeoMedia Technologies, Inc.
and George Luntz
Exhibit 99.4
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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.
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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.
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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.
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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.
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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
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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
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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
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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.
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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.
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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.
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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.
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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
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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.
<PAGE>
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
