Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Pre-Effective Amendment to Registration Statement 164 762K
(General Form)
2: EX-2.1-4 Plan of Acquisition, Reorganization, Arrangement, 3 12K
Liquidation or Succession
3: EX-4.10 Instrument Defining the Rights of Security Holders 14 63K
4: EX-5.1 Opinion re: Legality 2 13K
5: EX-10.26 Material Contract 29 88K
6: EX-23.1 Consent of Experts or Counsel 1 6K
7: EX-27.1 Financial Data Schedule (Pre-XBRL) 2 9K
EX-10.26 — Material Contract
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LICENSE AGREEMENT
This License Agreement (the "Agreement") is made effective as of the
18th day of October, 2000 (the "Date of Execution") by and between
Digital:Convergence Corporation, a Delaware corporation having its principal
place of business at 9101 N. Central Expy., 6th Floor, Dallas, Texas 75231,
and NeoMedia Technologies, Inc., a Delaware corporation having its principal
place of business at 2201 Second Street, Suite 600, Fort Myers, Florida 33901.
RECITALS
WHEREAS, NeoMedia is the owner of, or has acquired rights under,
numerous U.S. patents and patent applications, as well as foreign patent
applications, relating to methods and systems for using bar code symbols or
other auto-ID media (such as RF-ID tags) to connect users to and transmit
data over the Internet;
WHEREAS, DC is desirous of obtaining a worldwide, non-exclusive
license under the NeoMedia Licensed Patents as defined herein;
WHEREAS, NeoMedia is willing to grant such license under such patent
rights in consideration of royalty payments and equity transfer to be made by
DC;
NOW THEREFORE, in consideration of the premises, DC and NeoMedia
hereby agree as follows:
SECTION 1 - DEFINITIONS
1.1 "Affiliate" means, with respect to a party of this Agreement, any
corporation, company, division, partnership, joint venture or other
firm or entity in which such party to this Agreement directly or
indirectly owns or controls, (a) in the case of a corporate Affiliate,
fifty percent (50%) or more of the participating shares entitled to
vote for the election of directors; or (b) in the case of a non-
corporate Affiliate, fifty percent (50%) or more of
the equity interest or beneficial interest of such non-corporate
Affiliate.
1.2 "DC" refers to Digital:Convergence Corporation, its predecessors,
successors and permitted assigns.
1.3 "NeoMedia" refers to NeoMedia Technologies, Inc, its predecessors,
successors and permitted assigns.
1.4 "DC Annual Gross Revenue" shall mean gross revenue (calculated in
accordance with Generally Accepted Accounting Principles in the United
States) to DC and its Affiliates attributable to operations in the
field of Internet Enhanced Media Operations, net of sales or use taxes,
net of credits to customers for refunds and net of any Affiliate gross
revenue consolidated into DC gross revenue for which the Royalty Rate
is already calculated, for an annual period beginning on October 1 of a
given year and ending on September 30 of the next year.
1.5 "End User Device" shall mean any past, present and future product
including hardware and/or software (source code and object code)
intended for use by or on behalf of an end-user or agent to facilitate
communication by or on behalf of the end-user or agent over a Computer
Network in conjunction with a Switch. An example of an End User Device
includes but is not limited to a bar code scanning device (or other
automatic identification device), regardless of whether such device is
wired, wireless, or mobile, operating in conjunction with computing
means (integral or non-integral to such bar code scanning device),
which is adapted to read a bar code (or other machine-readable indicia)
and use index data read therefrom in communication over a Computer
Network with a Switch to determine the location of a resource located
on another computing device interconnected to the Computer Network.
1.6 "Computer Network" shall mean a network of computers or computer
networks, such as the Internet, comprising one or more computing
devices connected by data transmission means (including wired and/or
wireless).
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1.7 "Internet Enhanced Media Operations" shall mean operations related to
the use of data input technologies for the input, storage, or
transmission of an index or cue such as those disseminated in audio
and/or video media, print media, and physical objects to link to a
computing device, remote storage device, computer peripheral device,
Internet appliance, or the like, to perform a function, wherein such
indexes or cues may include but are not limited to proprietary codes,
ISBN codes, UPC codes, bar codes, audio and/or video cues or codes,
RF-ID tags, magnetic stripe indicia, and other codes. Notwithstanding
anything to the contrary, Internet Enhanced Media Operations shall
include, but are not limited to, all lines of business as described in
the SEC S-1 Amendment No. 1 filed by DC on September 26, 2000.
1.8 "Licensed Patents" shall mean all patents and patent applications
existing and owned by NeoMedia and/or its Affiliates as of the Date of
Execution as well as those obtained or created thereafter, including
those listed in Exhibit A appended hereto, together with all parents,
improvements, provisional applications, continuations,
continuations-in-part, divisions, extensions, re-examinations or
reissues thereof and patents issuing thereon, and any counterpart
foreign patent applications and patents, which relate to Internet
Enhanced Media Operations. Licensed Patents shall also include any
patent relating to Internet Enhanced Media Operations that is owned by
a party other than NeoMedia or any of its Affiliates and licensed to
NeoMedia or any of its Affiliates, but only if (i) NeoMedia or its
Affiliate has been granted rights from the patent owner to grant
further license rights thereunder, such as sublicense rights, and (ii)
upon identification by NeoMedia of any costs actually incurred by
NeoMedia or its Affiliates as a direct result of any election and/or
exploitation by DC of such patent that are in excess of the costs
actually incurred by NeoMedia or its Affiliates for such rights but for
sublicensing such rights to DC, DC elects to compensate NeoMedia for
such additional costs. A patent shall remain a Licensed Patent as long
as one or more of its claims remain valid and enforceable.
1.9 "Switch" shall mean any past, present and future computing product
including hardware and/or software (source code and object code) that
receives data, such as (but not limited
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to) an index or cue, from an End User Device via a Computer Network
and performs a task as a function of the received data. An example of
a Switch includes, but is not limited to, a server or computer that
is programmed to include a database and to receive index data from an
End User Device, retrieve a URL (or IP address, computer name, or
other resource locator) from the database as a function of the index,
and return the URL to the End User Device to enable the End User
Device to communicate with the computing device designated by the URL
and retrieve the resource.
1.10 "Hudetz Patent" shall mean U.S. Patent No. 5,978,773 (that is one of
the Licensed Patents hereunder).
1.11 "DC Stock Price" shall initially mean TEN DOLLARS and NINETY CENTS
($10.90) per share. After the Date of Execution of this Agreement and
before the first public offering of DC's common stock, each time that
DC completes the issuance of additional shares of its common stock, par
value $0.01 per share, or preferred stock, par value $0.01 per share,
in a transaction (or a series of related transactions) exempt from
registration under the Securities Act of 1933 (other than (i) the
issuance of shares of DC's common stock pursuant to the terms of this
Agreement, (ii) the issuance of warrants or stock options to purchase
shares of DC common stock or preferred stock or (iii) the issuance of
shares of DC common stock or preferred stock upon the exercise of any
such stock options or warrants) and DC receives aggregate gross
proceeds of TEN MILLION DOLLARS ($10,000,000.00) or more in such
transaction (or series of related transactions), then "DC Stock Price"
shall thereafter mean the per share price utilized in the private
equity financing (in the case of the issuance of preferred stock,
assuming conversion of such shares of preferred stock into shares of DC
common stock). From and after the first public offering of DC's common
stock, "DC Stock Price" shall mean the current market value per share
of the common stock, par value $0.01 per share, of DC.
The current market value shall mean, on the last business day preceding
the date on which any payment is due under Section 3.5 of this
Agreement, the last reported sale price regular way or, in case no such
reported sale takes place on such day, the average of
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the closing bid and asked prices regular way for such day, in each
case (1) on the principal national securities exchange on which the
shares of DC common stock are listed or to which such shares are
admitted to trading or (2) if the DC common stock is not listed or
admitted to trading on a national securities exchange, in the
over-the-counter market as reported by Nasdaq National or SmallCap
Markets or any comparable system or (3) if the DC common stock is
not listed on Nasdaq National or SmallCap Markets or a comparable
system but a public market for the DC common stock exists, as
furnished by two members of the NASD selected from time to time in
good faith by the Board of Directors of DC for that purpose. In the
absence of all of the foregoing, or if for any other reason the
current market value per share of DC common stock cannot be
determined pursuant to the immediately preceding sentence, then the
current market value shall be the fair market value thereof as
determined in good faith by the Board of Directors of DC and
evidenced by a resolution of such Board, subject to the following
dispute resolution right of NeoMedia. In the event that NeoMedia
disputes the determination of the Board of Directors, NeoMedia shall
notify DC and the current market value shall be determined in a
reasonably prompt manner as follows:
(1) DC and NeoMedia shall each appoint an independent, experienced
appraiser who is a member of a recognized professional association of
business appraisers. The two appraisers shall determine the value of
shares of DC common stock at the relevant date, assuming a sale between
a willing buyer and a willing seller, both of whom have full knowledge
of the financial and other affairs of DC, and neither of whom is under
any compulsion to sell or to buy.
(2) If the higher of the two appraisals is not more than 20% more than
the lower of the appraisals, the current market value per share shall
be the average of the two appraisals. If the higher of the two
appraisals is 20% or more than the lower of the two appraisals, then a
third appraiser shall be appointed by the two appraisers, and if they
cannot agree on a third appraiser, the American Arbitration Association
shall appoint the third appraiser. The third appraiser, regardless of
who appoints him or her, shall have the same qualifications as the
first two appraisers.
5
(3) The current market value per share after the appointment of the
third appraiser shall be the average of the two appraisals that are
closest in value to each other.
(4) The fees and expenses of the appraisers shall be paid one-half by
DC and one-half by NeoMedia.
SECTION 2 - LICENSE GRANT
2.1 Non-Exclusive License Grant. Effective as of March 1, 2000, NeoMedia
hereby grants to DC a personal, non-transferable (except as provided
herein), worldwide, non-exclusive license, under the Licensed Patents
in the field of Internet Enhanced Media Operations, subject to the
terms of this Agreement, to (i) make, have made and use Switch(es) and
components thereof (including software) (but not sell Switches except
as otherwise permitted herein), wherein such Switch(es) may only be
operated by or exclusively on behalf of DC or any of its Affiliates
(hereinafter "Licensed Switches"), (ii) make, have made, use, sell
and/or offer for sale and/or transfer End User Devices and components
thereof for use with a Licensed Switch (hereinafter "Licensed End User
Devices"), and (iii) create, publish, broadcast, sell, lease, offer for
sale, transfer, or otherwise implement an index or cue for the purpose
of operating with a Licensed Switch. The non-exclusive grant provided
hereunder includes flow-through rights sufficient to allow (i) DC's
Affiliates, distributors, business partners, dealers, agents,
franchisees, licensees (direct and indirect), and customers to act in
furtherance of DC's license hereunder but in no circumstances shall
such flow-through rights be construed to grant any independent license
rights whatsoever to any such third party that could be exercised apart
from such third party's activities in furtherance of DC's license; and
(ii) any third party to operate an End-User Device in conjunction with
a Licensed Switch or to create, publish, broadcast, sell, lease, offer
for sale, transfer, or otherwise implement an index or cue for the
purpose of operating with a Licensed Switch. Notwithstanding anything
to the contrary, the activities covered under this license grant shall
include, but are not limited to, all lines of business as described in
the SEC S-1 Amendment No. 1 filed by DC on
6
September 26, 2000. Nothing herein shall prevent DC from selling or
transferring infrastructure (including Licensed Switch(es)) to a
third party for use exclusively on behalf of DC or any of its
Affiliates. No rights are conveyed by this Agreement to operate
an End-User Device with a Switch if such Switch is not licensed
hereunder.
2.2 No Sub-License Rights. DC is granted no rights to grant sublicenses to
third parties under the Licensed Patents.
2.3 License Subject to Previously Granted Rights. The rights granted to DC
in this Section 2 are subject to rights previously granted and
obligations incurred by NeoMedia as set forth in the following
document, which is incorporated by reference herein:
Agent Agreement, dated June 2, 1999 between A.T. Cross Company
and NeoMedia Technologies, Inc.
DC acknowledges that it has been provided with a copy of the document
set forth in this Section 2.3.
2.4 Release. Upon receipt of the first installment of the First Period
Prepaid Royalty as set forth in Section 3.5(a)(i), NeoMedia for itself
and its Affiliates (the "Releasing Parties") irrevocably releases and
waives worldwide any and all claims, including but not limited to, any
and all claims of infringement (direct, contributory or inducement) of
the Licensed Patents in the field of Internet Enhanced Media Operations
that the Releasing Parties have or may discover against DC, its
Affiliates, distributors, business partners, dealers, agents,
franchisees, licensees (direct and indirect), and customers arising
from (i) the manufacture or use of a Switch and components thereof,
including hardware and software, that is owned or operated by or
exclusively on behalf of DC or any of its Affiliates, and (ii) the
manufacture, use, sale or offer for sale of End User Devices and
components thereof for use with a Licensed Switch, including hardware
and software, prior to the Date of Execution.
7
2.5 Reservation of Rights by NeoMedia. NeoMedia reserves all rights under
the Licensed Patents not expressly conveyed to DC under this Agreement.
SECTION 3 - ROYALTIES AND PAYMENT
3.1 Royalty. DC shall pay to NeoMedia (a) the sum of FIVE MILLION DOLLARS
(U.S.) ($5,000,000) for the period running from March 1, 2000 through
the Date of Execution as provided for in Section 3.5 (a) of this
Agreement, and the sum of TEN MILLION DOLLARS (U.S.) ($10,000,000) for
the first license year running from the Date of Execution until one
year thereafter (collectively the "First Period Prepaid Royalty"), such
payment of TEN MILLION DOLLARS ($10,000,000.00) being further defined
in Section 3.5 (a) of this Agreement; and the sum of TEN MILLION
DOLLARS (U.S.) ($10,000,000) per license year thereafter (the "Annual
Minimum Royalty") such payment of TEN MILLION DOLLARS ($10,000,000.00)
being further defined in Section 3.5 (b) of this Agreement; the First
Period Prepaid Royalty and the Annual Minimum Royalty are collectively
referred to hereinafter as "Prepaid Royalties"), as set forth in this
Section 3, as a nonrefundable minimum prepaid annual royalty to be
credited against a total royalty of one and one half percent (1 1/2%)
(the "Royalty Rate") of DC Annual Gross Revenue for that license year
in which the First Period Prepaid Royalty or Annual Minimum Royalty has
been paid.
3.2 Royalty Rate Reduction. At such time that the DC Annual Gross Revenue
exceeds two billion dollars ($2,000,000,000.00) for any given license
year, then the Royalty Rate applied in Section 3.1 shall be reduced to
one percent (1%) for the remainder of that license year. The Royalty
Rate shall reset to one and one half percent (1 1/2%) for the next
license year, subject to the same reduction condition as set forth
herein.
3.3 Most Favored Nations Clause.
(a) If NeoMedia, at any time during the period of forty (40)
months following the Date of Execution, directly or indirectly
(e.g. through sublicense by a third party licensed by
NeoMedia), grants to one or more of the following companies
and/or
8
any of their affiliates (wherein an affiliate as used in this
Section employs the same definition as Affiliate in
Section 1.1, except as used in this Section, an affiliate is
not required to be with respect to a party to this Agreement):
Motorola, Ericsson, Air Click, Symbol Technologies, Edgewater
Capital, Connect Things and/or GoldmanSachs, and/or any joint
venture, partnership, or other entity involving two or more of
the following companies and/or any of their affiliates:
Motorola, Ericsson, Air Click, Symbol Technologies, and/or
Connect Things (each an "ACC Entity") more favorable terms as
compared to the terms herein for rights under the Licensed
Patents that are the same or substantially the same as those
rights granted to DC herein, then all of the terms, conditions
and obligations in this Agreement shall be replaced, at DC's
election, with all of the terms, conditions and obligations in
such agreement with the ACC Entity. Such adjustment will be
effective from the date that NeoMedia granted such more
favorable terms to the ACC Entity. NeoMedia shall, within
thirty (30) days of NeoMedia granting the ACC Entity such more
favorable terms, notify DC in writing of the existence of such
terms, and DC shall have the option of replacing all of the
terms, conditions and obligations of this Agreement with all
of the terms, conditions and obligations of such ACC Entity
agreement, and the effective date for such terms, conditions
and obligations shall be the date on which NeoMedia granted
the more favorable terms to the ACC Entity. DC shall make the
election under its option pursuant to this Section, in
writing, within sixty (60) days of its receipt of written
notification from NeoMedia or discovery of such terms pursuant
to the DC Audit Rights in Section 3.10, subject to the
provisions of Section 3.3(c) below.
(b) If NeoMedia, at any time during the period of forty (40)
months following the Date of Execution of this Agreement,
grants to any third party (other than an Affiliate of NeoMedia
or an ACC Entity) more favorable terms with respect to any one
or more of (i) the Royalty Rate set forth in this Section 3
herein (as may be adjusted hereunder) or (ii) sixty percent
(60%) of the Annual Minimum royalties, for the same or
substantially the same rights under the Licensed Patents as
granted to DC pursuant to this Agreement, NeoMedia shall,
within thirty (30)
9
days of NeoMedia granting the third party such more favorable
terms, notify DC in writing of the existence of such terms,
and DC shall have the option of replacing all of the terms,
conditions and obligations of this Agreement with all of the
terms, conditions and obligations of such third party
agreement, and the effective date for such terms, conditions
and obligations shall be the date on which NeoMedia granted
the more favorable terms to the third party. DC shall make the
election under its option pursuant to this Section, in
writing, within sixty (60) days of its receipt of written
notification from NeoMedia or discovery of such terms pursuant
to the DC Audit Rights in Section 3.10, subject to the
provisions of Section 3.3(c) below.
(c) If, in comparing the terms of this Agreement with the terms in
an agreement with an ACC Entity or a third party under
Sections 3.3(a) or 3.3(b), one or more material terms in such
other agreement is/are not reasonably capable of being met
with similar term(s) in kind in this Agreement, then DC and
NeoMedia shall negotiate in good faith to reach agreement on
the equivalent value of such unmeetable material term(s). If
DC and NeoMedia cannot, after good faith negotiations, agree
on the equivalent value of any such unmeetable term(s), then
the determination of equivalent value for such unmeetable
term(s) shall be made by an independent arbitrator. In the
event an arbitrator is used to make a determination of
equivalent value hereunder, then DC's option to elect to
substitute all of the terms, conditions and obligations shall
be extended to thirty (30) days after receiving notification
of the arbitrator's decision.
3.4 Equity Interest.
(a) As additional consideration for the rights conveyed hereunder,
subject to the truth and accuracy of the representations and
warranties set forth in Exhibit C herein, and further subject
to execution and delivery of the lock-up letter in Exhibit D,
upon receipt of executed waivers or consents from shareholders
and other partners having equity in DC as required as of the
Date of Execution, DC shall irrevocably convey and transfer to
NeoMedia the number of shares of common stock as set forth
Exhibit E ("Number of Shares"), par value $0.01 per share, of
DC as
10
additional consideration for the rights conveyed hereunder
("DC Equity"). DC acknowledges that NeoMedia shall have the
registration rights set forth in the Registration Rights
Agreement dated as of even date herewith, between DC and
NeoMedia, a copy of which is attached as Exhibit F hereto. If,
for any reason whatsoever, DC does not issue the DC Equity to
NeoMedia on or before the one-year anniversary of the Date of
Execution, then DC shall pay in lieu of issuing such DC Equity
to NeoMedia in cash (a) the amount of FIVE MILLION ONE HUNDRED
FORTY THREE THOUSAND NINE HUNDRED TWENTY EIGHT DOLLARS
($5,143,928.00) on first business day following the one-year
anniversary of the Date of Execution, (b) the amount of FIVE
MILLION ONE HUNDRED FORTY THREE THOUSAND NINE HUNDRED TWENTY
EIGHT DOLLARS ($5,143,928.00) on the two-year anniversary of
the Date of Execution, and (c) the amount of FIVE MILLION ONE
HUNDRED FORTY THREE THOUSAND NINE HUNDRED TWENTY EIGHT DOLLARS
($5,143,928.00) on the three-year anniversary of the Date of
Execution.
(b) In consideration of the rights and conveyances granted to
NeoMedia by DC, NeoMedia shall irrevocably convey to DC
warrants to purchase up to ONE MILLION FOUR HUNDRED THOUSAND
(1,400,000) shares of NeoMedia common stock, par value $ 0.01
per share, in accordance with the terms and conditions of the
Warrant Agreement, dated as of even date herewith, between DC
and NeoMedia, a copy of which is attached as Exhibit G
hereto."). NeoMedia acknowledges that DC shall have the
registration rights set forth in the Registration Rights
Agreement dated as of even date herewith, between NeoMedia and
DC, a copy of which is attached as Exhibit H hereto.
3.5 Payment Schedule - Prepaid Royalties
(a) Payment of the First Period Prepaid Royalty set forth in
Section 3.1 above shall be made as follows:
(i) DC shall pay to NeoMedia the nonrefundable amount of
FIVE MILLION DOLLARS ($5,000,000.00) within two (2)
business days of the Date of Execution;
11
(ii) DC shall pay to NeoMedia the nonrefundable amount of
FIVE MILLION DOLLARS ($5,000,000.00) on the earlier
of January 31, 2001 or within 3 days of the date upon
which DC closes its Initial Public Offering; wherein
such payment of FIVE MILLION DOLLARS ($5,000,000.00)
shall include THREE MILLION DOLLARS ($3,000,000.00)
in cash and TWO MILLION DOLLARS ($2,000,000.00) in
the form of either cash or DC stock, at DC's option,
wherein the number of shares of DC stock issued to
NeoMedia shall be determined by dividing said TWO
MILLION DOLLARS ($2,000,000.00) by the DC Stock Price
at the time of the payment under this Section of the
Agreement;
(iii) DC shall pay to NeoMedia the nonrefundable amount of
FIVE MILLION DOLLARS ($5,000,000.00) on or before
April 30, 2001 wherein such payment of FIVE MILLION
DOLLARS ($5,000,000.00) shall be in the form of
either cash or DC stock, at DC's option, wherein the
number of shares of DC stock issued to NeoMedia shall
be determined by dividing said FIVE MILLION DOLLARS
($5,000,000.00) by the DC Stock Price at the time of
the payment under this Section of the Agreement.
(b) Payment of each nonrefundable Annual Minimum Royalty by DC to
NeoMedia subsequent to the First Period Prepaid Royalty shall
be made by DC to NeoMedia in full on each successive one-year
anniversary of the Date of Execution. Each payment of an
Annual Minimum Royalty by DC to Neo Media shall include THREE
MILLION DOLLARS ($3,000,000.00) in cash and SEVEN MILLION
DOLLARS ($7,000,000.00) in the form of either cash or DC
stock, at DC's option, wherein the number of shares of DC
stock issued to NeoMedia shall be determined by dividing said
SEVEN MILLION DOLLARS ($7,000,000.00) by the DC Stock Price at
the time of the payment under this Section of the Agreement.
(c) NeoMedia acknowledges that whenever the anniversary date or
any other payment date under this Agreement falls on a
Saturday, Sunday or National
12
Holiday, such payment shall be made on or before the next
business day subsequent to the anniversary date.
(d) PURCHASE PRICE ADJUSTMENT.
(i) As used herein, (a) "Average Closing Price" means the
average closing price of the common stock, par value
$0.01 per share, of DC (the "DC Stock") on the
National Market System of the National Association of
Securities Dealers Automated Quotation System (or
such other quotation system or securities exchange on
which the DC Stock is then quoted or listed) as
reported by the Wall Street Journal for the 20
consecutive trading days beginning 25 trading days
prior to an Effective Date and (b) the "Effective
Date Price" shall mean the Average Closing Price as
of each date ("Effective Date") that the Securities
and Exchange Commission declares effective under the
Securities Act of 1933, as amended (the "Securities
Act"), any registration statement filed by DC
pursuant to the Registration Rights Agreement entered
into by and between NeoMedia and DC as of the date
hereof (the "Registration Rights Agreement"),
registering shares of DC Stock issued to NeoMedia
pursuant to the terms of this Agreement.
(ii) After each Effective Date:
(a) if the product of the (i) Effective Date
Price multiplied times the (ii) number of
shares of DC Stock held of record by
NeoMedia (the "NeoMedia Shares") and then
registered under the Securities Act, (the
"Effective Date Value"), exceeds the product
of (A) the DC Stock Price(s) applicable to
each of such NeoMedia Shares multiplied
times (B) the number of each of such
NeoMedia Shares (the "Initial Value"),
NeoMedia shall, at its option, either (x)
make a payment in cash to DC equal to the
amount by which the Effective Date Value
exceeds the Initial Value or (y) surrender
to DC the number of NeoMedia Shares equal to
the quotient (rounded to the nearest whole
share) obtained by dividing (A) the amount
by
13
which the Effective Date Value exceeds the
Initial Value by (B) the Effective Date
Price, and
(b) if the Initial Value exceeds the Effective
Date Value, DC shall, at its option, either
(i) make a payment in cash to NeoMedia equal
to the amount by which the Initial Value
exceeds the Effective Date Value or (ii)
issue to NeoMedia an additional number of
shares of DC Stock equal to the quotient
(rounded to the nearest whole share)
obtained by dividing (A) the amount by which
the Initial Value exceeds the Effective Date
Value by (B) the Effective Date Price.
(iii) Any amounts to be paid in cash pursuant to the
provisions of this Section 3.5(d) shall be paid on or
before the fifth (5th) business day following the
applicable Effective Date, by cashier's check or wire
transfer at the address specified in writing by the
recipient. In the event that NeoMedia elects to
surrender DC Stock to DC in accordance with the
foregoing provisions of 3.5(d)(ii)(a), then (a) such
surrender shall be closed on or before the fifth
business day following the applicable Effective Date
at DC's address set forth in Section 6.15 hereof, (b)
at such closing, NeoMedia shall deliver to DC the
certificate(s) representing all such shares of DC
Stock, accompanied by stock powers duly executed by
NeoMedia in blank and (c) such shares shall be
delivered to DC free and clear of all liens, security
interests, claims, rights of another, and
encumbrances of any kind or character (and NeoMedia
and NeoMedia's President shall certify to such effect
at such closing). Any shares of DC stock to be issued
to NeoMedia by DC in accordance with the foregoing
provisions of 3.5(d)(ii)(b) shall be issued on or
before the fifth (5th) business day following the
applicable Effective Date and DC shall deliver to
NeoMedia a certificate representing all such shares
of DC Stock at NeoMedia's address set forth in
Section 6.15 hereof. If permitted by applicable law,
DC shall use reasonable efforts to include any
additional shares of DC Stock issues to NeoMedia
pursuant to Section 3.5(d)(ii)(b) in
14
the Registration Statement on Form S-3 in connection
with which such shares were issued.
(iv) With respect to any shares of DC Stock issued to
NeoMedia (a) pursuant to Sections 3.4(a) and 3.5(a)
hereof, NeoMedia shall make a demand for Registration
pursuant to Section 2A of the Registration Rights
Agreement on or before 5:00 p.m., Dallas, Texas time,
on the fifth (5th) business day after receiving the
DC Notice and (b) pursuant to Section 3.5(b) hereof,
(i) if DC is not at the time of such issuance
eligible to use Form S-3 or any successor form
thereto, then NeoMedia shall make a demand for
Registration pursuant to Section 2A of the
Registration Rights Agreement on or before 5:00 p.m.,
Dallas, Texas time, on the fifth (5th) business day
after receiving the DC Notice, and (ii) if DC is at
the time of such issuance eligible to use Form S-3 or
any successor form thereto, then NeoMedia shall make
a demand for Registration pursuant to Section 2A of
the Registration Rights Agreement on or before 5:00
p.m., Dallas, Texas time, on the fifth (5th) business
day after the date of such issuance. If NeoMedia
shall fail to make a demand for registration as set
forth in this Section 3.5(d)(iv), then the provisions
of this Section 3.5(d) shall immediately become,
without any action by the parties hereto, null and
void and of no further force or effect with respect
to such shares to which NeoMedia had a right to
include in such registration, but shall remain in
effect for further issuances of DC Stock under
Section 3.5. DC shall give notice to NeoMedia as
promptly as reasonably practicable after DC becomes
eligible to use Form s-3 or any successor form
thereto ("the DC Notice").
3.6 Payment Schedule - Royalty Rate. Royalties due pursuant to the Royalty
Rate as set forth in Sections 3.1 and 3.2 above, which exceed the
Prepaid Royalties in any license year, shall be payable quarterly
within forty-five days (45) after the end of each calendar quarter and
shall be accompanied by a report setting forth the computation of the
royalty payment for such quarter, including a computation of the DC
Annual Gross Revenue for that calendar quarter and classified from
revenue sources as reasonably required by
15
NeoMedia (the "Royalty Report"). Such Royalty Report shall be provided
to NeoMedia within forty-five (45) days after the end of each calendar
quarter even if the calculated royalty due under the Royalty Rate is
less than the Prepaid Royalty for the license year, thereby requiring
the remission of no additional payment.
3.7 Payment Location. All royalty payments to NeoMedia, whether pursuant to
the Royalty Rate or Prepaid Royalties, shall be made in U.S. Dollars at
the address specified in Section 6.15 below.
3.8 Payment Schedule - DC Equity. DC shall convey and transfer the DC
Equity to NeoMedia as specified in Section 3.4.
3.9 NeoMedia Audit Rights. In connection with such royalty accruals and
payments under this Section 3, the relevant sales and accounting
records of DC necessary to determine the royalties due NeoMedia
hereunder shall be available for inspection by NeoMedia independent
public accountants during usual business hours and upon reasonable
notice of not less than fifteen (15) days prior to the proposed
beginning of the audit, for the purpose of verifying such reports;
provided, however, that such independent public accountants shall not
transmit to NeoMedia any confidential information, including, without
limitation, customer identities, in connection with such inspection,
other than information strictly necessary to enforce the terms of this
Agreement, which information shall remain confidential and be used
solely for the purpose of the audit or any action arising under the
Agreement relating to the audit. NeoMedia shall have sole discretion in
the selection of its independent public accountants that will conduct
the audit except that such independent public accountants shall be
qualified to practice before the S.E.C. NeoMedia's Audit Rights shall
be limited to a maximum of one (1) audit per DC fiscal year, and such
audit can include only the relevant sales and accounting records of DC
for up to two (2) years prior to the audit, unless a portion of such
two (2) year period has already been the subject of an audit, in which
case only the relevant sales and accounting records of DC for such
un-audited period shall be made available to the NeoMedia auditors.
Such inspection shall be at NeoMedia's expense; however, if the audit
reveals
16
overdue payments in excess of five percent (5%) of the payments owed to
date, DC shall pay the reasonable costs of such audit.
3.10 DC Audit Rights. In connection with the Most Favored Nations Clause of
Section 3.3, the relevant license agreements of NeoMedia and its
licensees or other information necessary to determine the royalty rate,
minimum royalties, or terms for each license involving one or more of
the Licensed Patents shall be available for inspection by DC
independent public accountants during usual business hours and upon
reasonable notice of not less than fifteen (15) days prior to the
proposed beginning of the audit, for the purpose of verifying the
royalty rate or terms of such licenses; provided however, that such
independent public accountants shall not transmit to DC the name(s) of
the licensee(s) involved. DC agrees that the selected independent
public accountants shall be qualified to practice before the S.E.C.
DC's Audit Rights shall be limited to a maximum of one (1) audit per
NeoMedia fiscal year, and such audit can include only the relevant
license agreements or other necessary information of NeoMedia for up to
two (2) years prior to the audit, unless a portion of such two (2) year
period has already been the subject of an audit, in which case only the
relevant license agreements or other necessary information of NeoMedia
for such un-audited period shall be made available to the DC auditors,
which information shall remain confidential and be used solely for the
purpose of the audit or any action arising under the Agreement relating
to the audit.
SECTION 4 - REPRESENTATIONS, COVENANTS, INDEMNIFICATION
4.1 Corporate Power. DC and NeoMedia each represents and warrants that it
has full corporate power and authority to enter into this Agreement and
to carry out the transactions contemplated hereby, and that this
Agreement has been duly and validly authorized, executed and delivered
by each of DC and NeoMedia, and constitutes the legal, valid and
binding obligation of DC and NeoMedia, enforceable against each of them
in accordance with its terms.
4.2 Intellectual Property. NeoMedia represents and warrants that:
17
(a) NeoMedia has the full right, power and authority to enter into
this Agreement and to grant all of the rights and interest to
the Licensed Patents herein granted;
(b) NeoMedia has not transferred ownership of any patent or patent
application, whether U.S. or foreign filed, to another entity
in the calendar year immediately preceding the Date of
Execution;
(c) (i) Any Security Interest in any Licensed Patent
pursuant to Article V of the Purchase Agreement,
dated December 31, 1998, and related Exhibits,
between Solar Communications, Inc. and NeoMedia
Technologies, Inc.; Amendment and Clarification dated
February 15, 1999 between Solar Communications, Inc.
and NeoMedia Technologies, Inc. ("the Solar
Agreement") has been released, and (ii) any rights of
Solar Communications, Inc. in and to any Licensed
Patent under the Solar Agreement have been terminated
and/or extinguished.
(d) NeoMedia shall use commercially reasonable efforts to
maintain each of the Licensed Patents during the term
of this Agreement by timely paying all maintenance
fees, renewal fees, and other such fees and costs
required under the patent laws and regulations.
(e) NeoMedia has an ownership interest in each of the
Licensed Patents set forth in Exhibit A, all of which
are free and clear of any liens, charges and
encumbrances.
(f) As of the Date of Execution, there are no claims,
ownership interests, judgments or settlements to be
paid by NeoMedia or pending claims or litigation
relating to any of the Licensed Patents, other than
those listed in attached Exhibit B that adversely
affect the rights granted to DC hereunder; provided,
however, that the claims disclosed in Exhibit B act
solely as a disclosure and are not an exception to,
or a limitation of, any warranties or representations
stated herein and the claims set forth in Exhibit B
do not adversely affect the rights granted to DC
hereunder.
4.3 Enforcement of Licensed Patents
(a) Obligation to Notify. Should DC become aware of any
infringement or potential
18
infringement of one or more of the Licensed Patents by a
third party, it shall provide NeoMedia with prompt written
notification of such infringement or potential infringement,
including in such notification details and facts that support
such allegation of infringement.
(b) NeoMedia Obligation to Enforce. Upon either (1) receipt of
notice by NeoMedia from DC under this Section, which notice
must be followed by, or simultanteous with, a request to
NeoMedia by DC to pursue a potential third party infringer; or
(2) NeoMedia otherwise discovering a potential third party
infringer, which discovery shall include facts sufficient to
establish a case of infringement, NeoMedia shall, for each
such potential third party infringer identified by DC or
otherwise discovered by NeoMedia, respond within six (6)
months from the receipt by NeoMedia of notice by DC under this
Section or from the date on which NeoMedia otherwise discovers
such potential third party infringer (except as provided in
Section 4.3(c)), by following these procedures, providing
however that the six (6) month period stated in this Section
is to be prospective from the Date of Execution of this
Agreement:
(1) NeoMedia shall, subject to the provisions of Section
4.3(b)(2) below, file and serve an appropriate
infringement action in a court of competent
jurisdiction such as in a United States District
Court or the International Trade Commission and will
seek at least injunctive relief against such third
party. Prior to instituting such action, NeoMedia may
at its discretion first proceed against the third
party believed to be infringing by demanding that
such entity take a license under the Licensed
Patent(s) or stop the infringing activity
immediately, but must institute such action if, after
reasonable efforts, NeoMedia is unable to secure a
license agreement and the third party continues its
infringing activities. Provided, however, that
NeoMedia's obligation to file a lawsuit under Section
4.3(b)(1) shall be stayed for so long as NeoMedia is
engaged in three (3) or more concurrent lawsuits
brought at the request of DC against suspected third
party infringers under this Section 4.3. For all such
lawsuits, NeoMedia agrees to provide full and
meaningful consultation regarding such
19
lawsuits.
(2) If NeoMedia reasonably believes that the suspected
third party infringer is not actually infringing the
Licensed Patents, NeoMedia may refuse to take any
action against the suspected third party infringer by
obtaining a competent opinion of counsel of its
choice that the third party is not infringing based
on the facts provided by DC in its notification under
this Section 4.3 or otherwise known to NeoMedia. DC
shall provide whatever information may be reasonably
required by NeoMedia and/or its counsel in order to
perform its investigation and conclude the opinion.
NeoMedia shall provide a copy of such opinion to DC,
following which DC shall, within a commercially
reasonable time frame, either:
(i) Acquiesce in the position of NeoMedia that
the suspected third party is not infringing,
in which event NeoMedia will have been
deemed to have satisfied its obligations
under this Section 4.3, or
(ii) Obtain a competent opinion of its own
counsel as to whether the suspected third
party is infringing. In the event that DC is
unable to obtain an opinion of counsel
confirming that the third party is
infringing, then DC will be considered to
have acquiesced in NeoMedia's position of
non-infringement under Section 4.3(b)(2)(i)
above. In the event that DC provides to
NeoMedia an opinion of infringement, then
NeoMedia will have a reasonable period of
time to reconsider its position, and may at
its option either proceed against the third
party under Section 4.3(b)(1) above, or
NeoMedia may confirm its position of
non-infringement and elect to join with DC
to seek a third party review by submitting
each party's respective opinions to an
independent patent attorney to be agreed to
by both parties and requesting the
independent patent attorney to provide an
independent opinion of infringement based on
the submissions of the parties and any other
documents or information as may be required.
DC and NeoMedia shall share equally in the
costs of obtaining such independent
20
opinion of infringement. DC and NeoMedia
agree that the decision of the independent
patent attorney shall be final. In the event
that the independent patent attorney decides
that the third party is infringing, then
NeoMedia shall proceed against the third
party under Section 4.3(b)(1) above. In the
event that the independent patent attorney
decides that the third party is not
infringing, then NeoMedia will have been
deemed to have satisfied its obligations
under this Section 4.3.
(3) In the event that NeoMedia becomes obligated to file
suit as a result of a decision by an independent
patent attorney pursuant to Section 4.3(b)(2) above,
NeoMedia may request that DC contribute to payment of
costs (including attorneys fees) for such
infringement action in an amount less than or equal
to fifty (50) percent of such litigation costs. If DC
does not agree to contribute to such costs, then
NeoMedia will not be required to file and serve an
infringement action and NeoMedia will have been
deemed to have satisfied its obligations under this
Section 4.3. If DC agrees to contribute to such costs
as requested by NeoMedia, (a) NeoMedia shall proceed
with such lawsuit in which NeoMedia will seek at
least damages sufficient to compensate for the
infringement; (b) NeoMedia shall use counsel of its
choice in such infringement action and shall remain
in control of such infringement action; and (c) in
the event that damages and/or attorneys fees are
recovered in the action (either through judgment or
settlement), then DC and NeoMedia will share in the
recovered damages in amounts proportionate to the
amounts that each party has funded for the
infringement action, after application of such
damages to reimburse each party for its expenses from
the litigation, which expenses shall be limited to
sums actually expended and not for internal expenses
attributable to work performed by employees of either
party. In no event, if there is a recovery through
settlement shall DC receive less than their
contribution to the costs of the infringement action.
(c) The six (6) month period stated in Section 4.3(b) of this
Agreement shall be
21
stayed for either or both of the following time periods,
if applicable:
(i) the period of time extending from the date
upon which NeoMedia provides an opinion of
counsel under Section 4.3(b)(2), until the
date upon which DC provides an opinion of
counsel under Section 4.3(b)(2)(ii); and
(ii) the period of time extending from the date
upon which NeoMedia requests that DC join
with NeoMedia to seek a third party review
under Section 4.3(b)(2)(ii), until the date
upon which such third party, independent
patent attorney, renders an opinion related
to infringement.
4.4 Re-Examination Of Licensed Patents. In the event that that any one or
more of the Licensed Patents becomes involved in a reexamination
proceeding in the United States Patent and Trademark Office, NeoMedia
will use its commercially reasonable efforts to prosecute such
reexamination in a diligent manner. Neither the pendency of a
reexamination of a Licensed Patent nor an unfavorable outcome of such
reexamination shall be the basis for DC to withhold issuance of any DC
Equity (or cash in lieu thereof) as provided in Section 3.4 or payments
of any royalties under this Agreement.
4.5 Limited Licensor Liability and Indemnification. DC acknowledges and
agrees that NeoMedia, in its capacity, solely as licensor of the
Licensed Patents, will in no way supervise or control (i) the design,
production, marketing, instructions relating to use, notices,
distribution or sales of Licensed End User Devices (and any component
thereof), or (ii) the design, production, marketing, instructions
relating to use, or notices of a Licensed Switch (and any component
thereof). Accordingly, NeoMedia assumes no responsibility or liability
of any kind, express or implied, in connection with any claims,
lawsuits, or charges arising therefrom, and DC agrees to indemnify
NeoMedia against any and all claims, lawsuits and reasonable charges
(including outside attorneys fees incurred by NeoMedia) that are based
on acts of DC. Notwithstanding the above, DC does not by this Agreement
(either expressly or implicitly) indemnify or limit liability in
connection with any claims, lawsuits or charges arising from any
NeoMedia product (or
22
any component thereof) and/or services.
4.6 Prohibition against use of trademarks. Except as may be required by law
in Section 6.7 ("Patent Marking") nothing in this Agreement shall be
construed as conferring upon either party or its Affiliates any right
to include in advertising, packaging or other commercial activities
related to products (and components thereof), processes, methods,
systems, End User Devices, Switches or software in the field of
Internet Enhanced Media Operations, any reference to the other party or
its Affiliates, its trade names, trademarks or service marks in a
manner which would be likely to cause confusion or to indicate that
such products (and components thereof), processes, methods, systems,
End User Devices, Switches or software are in any way certified by the
other party hereto or its Affiliates.
4.7 Publicity. NeoMedia agrees that neither it nor any Affiliate nor any of
their officers, directors, or employees will make any public statement,
whether relating to this Agreement or not, that includes any statements
that DC has infringed or violated any of the Licensed Patents.
4.8 Non-Confidentiality. The parties agree that the contents of this
Agreement are not confidential and may be disclosed by either party
without consent of the other.
SECTION 5 - TERM AND TERMINATION
5.1 Term. This Agreement shall commence on the Date of Execution and shall
continue in full force and effect for a period of ten (10) years,
unless sooner terminated as permitted by this Agreement. In addition,
this Agreement will automatically renew for subsequent one year
periods, unless DC shall provide written notice of cancellation no
greater than ninety (90) days nor less than thirty (30) days prior to
the date of termination. In the event that written notice of
cancellation is not so provided, then the Agreement shall continue to
have full force and effect for a subsequent one-year period, subject to
further one-year renewals as specified herein. In the event that this
Agreement is renewed, then the Annual Minimum Royalty shall become due
to be paid in full as set forth in Section
23
3. In the event that DC provides written notice of cancellation as
provided herein, then the License Grant set forth in Section 2 shall
expire at termination of the Agreement. Renewal of this Agreement by
DC does not invoke any payments of First Period Prepaid Royalty or
additional grants of equity.
5.2 Breach. In case of material breach of this Agreement by a party, the
other party shall have the right to terminate this Agreement if such
material breach remains uncured after written notice to the breaching
party and sixty (60) days opportunity to cure the breach to the
reasonable satisfaction of the other party, except that monetary
breaches shall be cured within twenty five (25) days of notice. Cure
periods for monetary breaches shall not be used as a means to generally
extend terms of payment. Any termination hereunder shall not preclude
the ability of the parties to pursue any other remedies they may have
in law or equity.
5.3 DC Option to Terminate.
(a) In the event that any independent claim of the Hudetz Patent
(i) is finally adjudged to be invalid or unenforceable by a
court of competent jurisdiction or by any applicable patent
office (including the U.S. Patent and Trademark Office) having
jurisdiction over the Hudetz Patent, (ii) is rendered invalid
or unenforceable by operation of law or regulation, or (iii)
is lost to another inventor in a priority contest (such as an
interference) (each of items (i), (ii) and (iii) is
hereinafter referred to as a "Triggering Event"), then DC
shall have the option to terminate this Agreement in
accordance with the procedures set forth below in this Section
5.3. For purposes of this Section 5.3, a judgment of
invalidity or unenforceability is not final until the later of
(i) the expiration of the time period for permitted appeal,
and (ii) if such permitted appeal is taken, the termination of
such appeal.
(b) Upon the occurrence of such Triggering Event, DC may initiate
the termination process by providing written notice of its
intent to terminate this Agreement ("Notice of Intent") at any
time up to (30) thirty days after NeoMedia provides written
notice to DC of such Triggering Event.
24
(c) In the event that DC provides such Notice of Intent, DC and
NeoMedia shall have a ninety (90) day period, starting on the
date that such Notice of Intent is given, in which to
renegotiate the terms of this Agreement ("Renegotiation
Period"). During such Renegotiation Period, this Agreement
shall remain in full force and effect.
(d) If during such Renegotiation Period DC and NeoMedia do not
reach agreement on new terms for this License Agreement, then
DC may elect to either terminate this Agreement or to keep
this Agreement in full force and effect. In the event that DC
elects to terminate this Agreement, DC shall, prior to the end
of such Renegotiation Period provide written notice of its
election to terminate ("Termination Notice"). Upon the giving
of such Termination Notice, then the License Grant set forth
in Section 2 shall expire at termination of the Agreement.
5.4 Accounting. After any termination or expiration of this Agreement, DC
shall render an accounting for all unpaid royalties pursuant to the
license from the last such report up to the termination date. Such
final accounting shall be made within sixty (60) days after the
termination or expiration date.
5.5 Sums Payable. Termination or expiration of this Agreement shall not
excuse DC's obligation to make payments of sums due and payable at the
time of any termination or expiration hereof.
SECTION 6 - MISCELLANEOUS
6.1 Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the parties as to the subject matter hereof, and
supersedes and replaces all prior or contemporaneous agreements,
written or oral, as to the subject matter. This Agreement may be
changed only in a writing that states that it is an amendment or
modification to this Agreement, and is signed by an authorized
representative of each of the parties hereto.
25
6.2 Unenforceability. Any term or provision of this Agreement which is
invalid or unenforceable or in conflict with the law of any
jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity or unenforceability without affecting the
validity of the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms and
provisions of this Agreement in any other jurisdiction. Further, the
parties agree that a court of competent jurisdiction in a particular
jurisdiction may reform a specific term of this Agreement should the
applicability of such term or provision be held invalid or
unenforceable in that jurisdiction so as to reflect the intended
agreement of the parties hereto solely with respect to the
applicability of such provision in said jurisdiction.
6.3 Release. Neither this Agreement nor any provision hereof may be
released, discharged, waived, abandoned or modified in any manner,
except by an instrument in writing signed on behalf of both of the
parties hereto by their duly authorized officers or representatives.
6.4 Waiver. Any waiver of a default or condition hereof by either party
shall not be deemed a continuing waiver of such default or condition.
Any delay or omission by either party to exercise any right or remedy
under this Agreement shall not be construed to be a waiver of any such
right or remedy or any right hereunder. All of the rights of either
party under this Agreement shall be cumulative and may be exercised
separately or concurrently.
6.5 Not a Joint Venture. This Agreement does not constitute a partnership,
joint venture or agency between the parties hereto, nor shall either of
the parties hold itself out as such contrary to the terms hereof by
advertising or otherwise, nor shall either of the parties become bound
or become liable because of any representation, action, or omission of
the other.
6.6 Attorney's Fees. In the event of any dispute arising out of a breach of
or a default under this Agreement by one party, the prevailing party
shall recover from the other, in addition to any other damage assessed,
its reasonable outside attorneys' fees and court costs incurred in
litigating such dispute. As used in this Section, a "prevailing party"
is defined as the party for which a favorable judgment is entered on
all, or substantially all, of the disputed issues between the parties,
after exhaustion of all appeals.
26
6.7 Patent Marking. DC shall abide by the provisions of 35 U.S.C. 287
relating to marking of all licensed products, systems, End User
Devices, Switches and software sold, distributed or provided by it as
soon as is reasonably practicable after the Date of Execution with the
patent numbers applicable thereto and licensed hereunder, which may be
provided in writing from time to time to DC by NeoMedia.
6.8 Headings. The headings of sections and other subdivisions hereof are
inserted only for the purpose of convenient reference and it is
recognized that they may not adequately or accurately describe the
contents of the provisions which they head. Such headings shall not be
deemed to govern, limit, modify or in any other manner affect the
scope, meaning or intent of the provisions of this Agreement or any
part or portion thereof, nor shall they otherwise be given any legal
effect.
6.9 Grammar. Where the context of this Agreement requires, singular terms
shall be considered plural, and plural terms shall be considered
singular.
6.10 Choice of Law. This Agreement shall be governed by, performed under and
construed in accordance with the laws of the State of New York without
giving effect to the conflicts of law principles thereof. Each party
hereto irrevocably consents to jurisdiction and venue in the United
States District Court for the Southern District of New York or other
court of competent jurisdiction within New York County, New York.
6.11 Assignability. This Agreement may not be assigned by a party, or
transferred under operation of law or otherwise by a party, without the
prior written consent of the other party, which consent shall not be
unreasonably withheld, except that this Agreement may be assigned to a
party's Affiliate or to any successor to all or substantially all of
the party's stock, assets or business operations, provided that the
Affiliate or successor of all or substantially all of the assets or
business operations of the party agrees in writing to accept the terms
and conditions of this Agreement, and further provided that if this
Agreement is assigned to a party's Affiliate or successor without
consent of the other party, the assigning party shall maintain
financial accountability for the obligations hereunder. This Agreement
shall be binding on the successors and assigns of NeoMedia, and the
permitted successors and assigns of DC.
27
6.12 Interpretation. The parties and their attorneys have each had
opportunity to review and comment on this Agreement. Accordingly, the
parties agree that the legal rule construing ambiguity against the
drafter shall not apply in interpreting this Agreement.
6.13 Survival of Terms. The provisions of Sections 2.4, 3.1(a), 3.2, 3.4,
3.5(a), 3.6, 3.7, 3.8, 3.9, 3.10, 4.1, 4.2, 4.6, 5.4, 5.5 and all of 6
shall survive termination of this Agreement
6.14 Facsimile Signatures and Counterparts. This Agreement may be executed
in counterparts and by facsimile signatures.
6.15 Notification Address. Except as otherwise set forth herein, all notices
given in connection with this Agreement shall be in writing and shall
be delivered either by personal delivery, by certified or registered
mail, return receipt requested, or by express courier or delivery
service, addressed to the parties hereto at the following addresses:
[Download Table]
To DC: With a copy to:
Digital:Convergence Corporation Digital:Convergence Corporation
9101 N Central Expy. 9101 N Central Expy.
6th Floor 6th Floor
Dallas, TX 75231-5914 Dallas, TX 75231-5914
Attn: Chairman & CEO Attn: Executive Vice President
Fax: 214292-6914 Fax: 214292-6914
With a copy to: With a copy to:
Digital:Convergence Corporation Digital:Convergence Corporation
630 5th. Ave. 9101 N Central Expy.
Suite 640 6th Floor
New York, NY 10111 Dallas, TX 75231-5914
Attn: John Huncke Attn: General Counsel
Fax: 212/218-5263 Fax: 214292-6914
To NeoMedia:
NeoMedia Technologies, Inc.
2201 Second Street
Suite 600
Fort Myers, Florida 33901
Attn: President
Fax: 941/337-3661
28
With a copy to: And a copy to:
NeoMedia Technologies, Inc. Anthony Barkume, Esq.
2201 Second Street Greenberg Traurig, LLP
Suite 600 Met Life Building
Fort Myers, Florida 33901 200 Park Avenue
Attn: General Counsel New York, New York 10166
Fax: 941/337-3661 Fax: 212/801-6400
or at such other address and number as either party shall have
previously designated by written notice given to the other party in the
manner hereinabove set forth. Notices shall be deemed given when
received; and when delivered and receipted for (or upon the date of
attempted delivery where delivery is refused), if hand-delivered, sent
by express courier or delivery service, or sent by certified or
registered mail, return receipt requested.
6.16 Investor Qualification Letter. NeoMedia shall provide DC an Investor
Representation and Warranty Letter in the form attached as Exhibit C,
on the Date of Execution, which is applicable only if the DC Equity is
issued to NeoMedia.
6.17 Lock-up Letter. NeoMedia shall provide DC a Lock-up Letter in the form
attached as Exhibit D, on the Date of Execution, which is applicable
only if the DC Equity is issued to NeoMedia.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year last written below.
Digital:convergence CORPORATION NEOMEDIA TECHNOLOGIES, INC
/s/ J. Jovan Philyaw /s/ Charles W. Fritz
---------------------------------- -------------------------------
BY: J. Jovan Philyaw BY: Charles W. Fritz
TITLE: Chairman & CEO TITLE: Chairman and CEO
Date: October 18, 2000 Date: October 18, 2000
29
Dates Referenced Herein and Documents Incorporated by Reference
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