Exhibit 10.12
WARRANT TO PURCHASE SHARES
OF COMMON STOCK
OF
NEOMEDIA TECHNOLOGIES, INC.
Warrant to Purchase 4,000,000 Shares
(subject to adjustment as set forth herein)
Exercise Price US$0.227 Per Share
(subject to adjustment as set forth herein)
DATE: March 30, 2005
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (the "Act") OR REGISTERED OR QUALIFIED UNDER
ANY OTHER APPLICABLE FEDERAL OR STATE SECURITIES LAWS. THESE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT OR QUALIFICATION FILED IN ACCORDANCE WITH THE
ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT.
NeoMedia Technologies, Inc. (the "Company") hereby certifies that, for
value received, Thornhill Capital LLC, with principal business address at 10435
Via Balestri Drive, Miromar Lakes, FL, 33913 (the "Holder"), is entitled,
subject to the terms and conditions set forth below, to purchase from the
Company up to 4,000,000 Shares ("Share" in the singular and "Shares" in the
plural) of the Company's $0.01 par value Common Stock at a purchase price per
share equal to US$0.227 (the "Exercise Price").
The number and character of the securities purchasable upon exercise of
this Warrant and the Exercise Price are subject to adjustment as provided below.
The term "Warrant" as used herein shall include this Warrant and any Warrants
issued in substitution for or replacement of this Warrant, or any Warrants into
which this Warrant may be divided or exchanged. The Shares purchasable upon the
exercise of this Warrant are hereinafter referred to as "Warrant Securities."
This Warrant may be assigned, transferred, sold, offered for sale, or
exercised by the Holder upon compliance with all the pertinent provisions
hereof.
1. Exercise of Warrant.
(a) Subject to the other terms and conditions of this Warrant, the
purchase rights evidenced by this Warrant may be exercised in whole or in part
at any time, and from time to time, commencing on issuance, and continuing for a
period of five (5) years from the date of issuance (the "Termination Date"). The
Warrant shall be exercisable by the Holder's presentation and surrender of this
Warrant to the Company at its principal office or at the office of the Company's
stock transfer agent, if any, accompanied by a duly executed Notice of Exercise,
in the form attached to and by this reference incorporated in this Warrant as
Exhibit A, and by payment of the aggregate Exercise Price, in certified funds or
a bank cashier's check, for the number of Shares specified in the Notice of
Exercise. In the event this Warrant is exercised in part only, as soon as is
practicable after the presentation and surrender of this Warrant to the Company
for exercise, the Company shall execute and deliver to the Holder a new Warrant,
containing the same terms and conditions as this Warrant, evidencing the right
of the Holder to purchase the number of Shares as to which this Warrant has not
been exercised.
(b) Upon receipt of this Warrant by the Company as described in
subsection (a) above, the Holder shall be deemed to be the holder of record of
the Warrant Securities issuable upon such exercise, notwithstanding that the
transfer books of the Company may then be closed or that certificates
representing such Warrant Securities may not have been prepared or actually
delivered to the Holder.
2. Exchange, Assignment or Loss of Warrant.
(a) All sales, transfers, assignments or hypothecations of this Warrant
must be in compliance with Section 7 hereof. Any assignment or transfer of this
Warrant shall be made by the presentation and surrender of this Warrant to the
Company at its principal office or the office of its transfer agent, if any,
accompanied by a duly executed Assignment Form, in the form attached to and by
this reference incorporated in this Warrant as Exhibit B. Upon the presentation
and surrender of these items to the Company, the Company, at its sole expense,
shall execute and deliver to the new Holder or Holders a new Warrant or
Warrants, containing the same terms and conditions as this Warrant, in the name
of the new Holder or Holders as named in the Assignment Form, and this Warrant
shall at that time be cancelled.
(b) This Warrant, alone or with other Warrants containing substantially
the same terms and conditions and owned by the same Holder, is exchangeable at
the option of the Holder but at the Company's sole expense, at any time prior to
its expiration either by its terms or by its exercise in full upon presentation
and surrender to the Company at its principal office or at the office of its
transfer agent, if any, for another Warrant or other Warrants, of different
denominations but containing the same terms and conditions as this Warrant,
entitling the Holder to purchase the same aggregate number of Warrant Securities
that were purchasable pursuant to the Warrant or Warrants presented and
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surrendered. At the time of presentation and surrender by the Holder to the
Company, the Holder also shall deliver to the Company a written notice, signed
by the Holder, specifying the denominations in which new Warrants are to be
issued to the Holder.
(c) The Company will execute and deliver to the Holder a new Warrant
containing the same terms and conditions as this Warrant upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction, or mutilation of this Warrant, provided that (i) in the case of
loss, theft, or destruction, the Company receives from the Holder a reasonably
satisfactory indemnification, and (ii) in the case of mutilation, the Holder
presents and surrenders this Warrant to the Company for cancellation. Any new
Warrant executed and delivered shall constitute an additional contractual
obligation on the part of the Company regardless of whether the Warrant that was
lost, stolen, destroyed, or mutilated shall be enforceable by anyone at any
time.
3. Adjustments: Stock Dividends, Reclassification, Reorganization,
Merger and Anti-Dilution Provisions.
(a) If the Company increases or decreases the number of its issued and
outstanding shares of Common Stock, or changes in any way the rights and
privileges of such shares, by means of (i) the payment of a stock dividend or
the making of any other distribution on such shares payable in its Common Stock,
(ii) a forward or reverse stock split or other subdivision of shares, (iii) a
consolidation or combination involving its Common Stock, or (iv) a
reclassification or recapitalization involving its Common Stock, then the
Exercise Price in effect at the time of such action and the number of Warrant
Securities purchasable pursuant to this Warrant at that time shall be
proportionately adjusted so that the numbers, rights, and privileges relating to
the Warrant Securities then purchasable pursuant to this Warrant shall be
increased, decreased or changed in like manner, for the same aggregate purchase
price as set forth in this Warrant, as if the Warrant Securities purchasable
pursuant to this Warrant immediately prior to the event at issue had been
issued, outstanding, fully paid and nonassessable at the time of that event. As
an example, if the Company were to declare a two-for-one forward stock split or
a 100 percent stock dividend, then the unpurchased number of Warrant Securities
subject to this Warrant would be doubled and the Exercise Price for all
unpurchased Warrant Securities would be reduced by 50 percent. These adjustments
would result in the Holder's rights under this Warrant not being diluted by the
stock split or stock dividend and the Holder paying the same aggregate exercise
price.
If the Company shall declare a dividend payable in money on its Common
Stock and at substantially the same time shall offer to its shareholders a right
to purchase new shares of Common Stock from the proceeds of such dividend or for
an amount substantially equal to the dividend, all shares of Common Stock so
issued shall, for purposes of this Warrant, be deemed to have been issued as a
stock dividend.
(b) The Company shall cause effective provision to be made so that the
Holder shall have the right thereafter, by the exercise of this Warrant, to
purchase for the aggregate Exercise Price described in this Warrant the kind and
amount of shares of stock and other securities, and property and interests, as
would be issued or payable with respect to or in exchange for the number of
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Warrant Securities of the Company that are then purchasable pursuant to this
Warrant as if such Warrant Securities had been issued to the Holder immediately
before the occurrence of any of the following events: (i) the reclassification,
capital reorganization, or other similar change of outstanding shares of Common
Stock of the Company, other than as described and provided for in subsection (a)
above; (ii) the merger or consolidation of the Company with one or more other
corporations or other entities, other than a merger with a subsidiary or
affiliate pursuant to which the Company is the continuing entity and the
outstanding shares of Common Stock, including the Warrant Securities purchasable
pursuant to this Warrant, are not affected; or (iii) the spin-off of assets to a
subsidiary or an affiliated entity, or the sale, lease, or exchange of a
significant portion of the Company's assets, in a transaction pursuant to which
the Company's shareholders of record are to receive securities or other
interests in another entity. Any such provision made by the Company for
adjustments with respect to this Warrant shall be as nearly equivalent to the
adjustments otherwise provided for in this Warrant as is reasonably practicable.
The foregoing provisions of this subsection (b) shall similarly apply to
successive reclassifications, capital reorganizations and similar changes of
shares of Common Stock and to successive consolidations, mergers, spin-offs,
sales, leases or exchanges.
(c) If any sale, lease or exchange of all, or substantially all, of the
Company's assets or business or any dissolution, liquidation or winding up of
the Company (a "Termination of Business") shall be proposed, the Company shall
deliver written notice to the Holder or Holders of this Warrant in accordance
with Section 4 below as a condition precedent to the consummation of that
Termination of Business. If the result of the Termination of Business is that
shareholders of the Company are to receive securities or other interests of
another entity, the provisions of subsection (b) above shall apply. However, if
the result of the Termination of Business is that shareholders of the Company
are to receive money or property other than securities or other interests in
another entity, the Holder or Holders of this Warrant shall be entitled to
exercise this Warrant prior to the consummation of the event at issue and, with
respect to any Warrant Securities so purchased, shall be entitled to all of the
rights of the other shareholders of Common Stock with respect to any
distribution by the Company in connection with the Termination of Business. In
the event no other entity is involved and subsection (b) does not apply, all
purchase rights under this Warrant shall terminate at the close of business on
the date as of which shareholders of record of the Common Stock shall be
entitled to participate in a distribution of the assets of the Company in
connection with the Termination of Business; provided, that in no event shall
that date be less than 30 days after delivery to the Holder or Holders of this
Warrant of the written notice described above and in Section 4. If the
termination of purchase rights under this Warrant is to occur as a result of the
event at issue, a statement to that effect shall be included in that written
notice.
(d) Except as otherwise provided in this Section 3, upon any adjustment
of the Exercise Price, the Holder shall be entitled to purchase, at the new
Exercise Price, the number of shares of Common Stock, calculated to the nearest
full share, obtained by multiplying the number of Warrant Securities purchasable
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pursuant to this Warrant immediately prior to the adjustment of the Exercise
Price by the Exercise Price in effect immediately prior to its adjustment and
dividing the product so obtained by the new Exercise Price.
(e) If consideration other than money is received by the Company upon
the issuance or sale of Common Stock, Convertible Securities, or other
securities or interests, the fair market value of such consideration, as
reasonably determined by the Board of Directors of the Company, shall be used
for purposes of any adjustment required by this Section 3. The fair market value
of such consideration shall be determined as of the date of the adoption of the
resolution of the Board of Directors of the Company that authorizes the
transaction giving rise to the adjustment. In case of the issuance or sale of
Common Stock, Convertible Securities, or other securities or interests in
conjunction with the issuance or sale of other securities or property without a
separate allocation of the purchase price, the Board of Directors of the Company
shall reasonably determine an allocation of the consideration among the items
being issued or sold. The reclassification of securities other than Common Stock
into securities including Common Stock shall be deemed to involve the issuance
of that Common Stock for a consideration other than money immediately prior to
the close of business on the date fixed for the determination of shareholders
entitled to receive that Common Stock.
The Company shall promptly deliver written notice of all such
determinations by its Board of Directors to the Holder or Holders of this
Warrant, and those determinations shall be final and binding on the Holder or
Holders.
(f) The provisions of this Section 3 shall apply to successive events
that may occur from time to time but shall only apply to a particular event if
it occurs prior to the expiration of this Warrant either by its terms or by its
exercise in full.
(g) For purposes of this Section 3, shares of Common Stock owned or
held at any relevant time by, or for the account of, the Company, in its
treasury or otherwise, shall not be deemed to be outstanding for purposes of the
calculations and adjustments described.
4. Notice to Holders. If, prior to the expiration of this Warrant
either by its terms or by its exercise in full, any of the following shall
occur:
(i) the Company shall declare a dividend or authorize any
other distribution on its Common Stock; or
(ii) the Company shall authorize the granting to the
shareholders of its Common Stock of rights to
subscribe for or purchase any securities or any other
similar rights; or
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(iii) any reclassification, reorganization or similar
change of the Common Stock, or any consolidation or
merger to which the Company is a party, or the sale,
lease, or exchange of any significant portion of the
assets of the Company; or
(iv) the voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(v) any purchase, retirement or redemption by the Company
of its Common Stock;
then, and in any such case, the Company shall deliver to the Holder or Holders
written notice thereof at least 30 days prior to the earliest applicable date
specified below with respect to which notice is to be given, which notice shall
state the following:
(i) the date on which a record is to be taken for the
purpose of such dividend, distribution or rights, or,
if a record is not to be taken, the date as of which
the shareholders of Common Stock of record to be
entitled to such dividend, distribution or rights are
to be determined;
(ii) the date on which such reclassification,
reorganization, consolidation, merger, sale,
transfer, dissolution, liquidation, winding up or
purchase, retirement or redemption is expected to
become effective, and the date, if any, as of which
the Company's shareholders of Common Stock of record
shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such
reclassification, reorganization, consolidation,
merger, sale, transfer, dissolution, liquidation,
winding up, purchase, retirement or redemption; and
(iii) if any matters referred to in the foregoing clauses
(i) and (ii) are to be voted upon by shareholders of
Common Stock, the date as of which those shareholders
to be entitled to vote are to be determined.
5. Officers' Certificate. Whenever the Exercise Price or the aggregate
number of Warrant Securities purchasable pursuant to this Warrant shall be
adjusted as required by the provisions of Section 3 above, the Company shall
promptly file with its Secretary or an Assistant Secretary at its principal
office, and with its transfer agent, if any, an officers' certificate executed
by the Company's President and Secretary or Assistant Secretary, describing the
adjustment and setting forth, in reasonable detail, the facts requiring such
adjustment and the basis for and calculation of such adjustment in accordance
with the provisions of this Warrant. Each such officers' certificate shall be
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made available to the Holder or Holders of this Warrant for inspection at all
reasonable times, and the Company, after each such adjustment, shall promptly
deliver a copy of the officers' certificate relating to that adjustment to the
Holder or Holders of this Warrant. The officers' certificate described in this
Section 5 shall be deemed to be conclusive as to the correctness of the
adjustment reflected therein.
6. Reservation of Warrant Securities. The Company hereby agrees that at
all times during the term of this Warrant, it will have authorized and will
reserve and keep available for issuance and delivery to the Holder that number
of shares of its Common Stock that may be required from time to time for
issuance and delivery upon the exercise of the then unexercised portion of this
Warrant and all other similar Warrants then outstanding and unexercised and upon
the exercise of any Warrant Securities.
7. Transfer to Comply With the Securities Act of 1933.
(a) This Warrant, the Warrant Securities, and all other securities
issued or issuable upon exercise of this Warrant, may not be offered, sold or
transferred, in whole or in part, except in compliance with the Securities Act
of 1933, as amended (the "Act"), and except in compliance with all applicable
state securities statutes.
(b) The Company may cause the following legend, or its equivalent, to
be set forth on each certificate representing the Warrant Securities, or any
other security issued or issuable upon exercise of this Warrant to the extent
such Common Stock has not been registered for sale by the Company.
"The shares represented by this Certificate have not been registered
under the Securities Act of 1933 ("the Act") and are 'restricted
securities' as that term is defined in Rule 144 under the Act. The
shares may not be offered for sale, sold or otherwise transferred
except pursuant to an effective registration statement under the Act or
pursuant to an exemption from registration under the Act, the
availability of which is to be established to the satisfaction of the
Company."
8. Registration. This Warrant shall have "piggyback" registration
rights. The Company and the undersigned shall cooperate in good faith in
connection with the furnishing of information required for any registration and
the taking of such other actions as may be legally or commercially necessary in
order to effect such registration. The undersigned shall furnish such
information as the Company may reasonably request for inclusion in the
registration statement relating to the shares of Common Stock issuable upon
exercise of the Warrants. Once declared effective by the SEC, the Company shall
cause such registration statement to remain effective until the earlier of (i)
the sale by the undersigned of all shares of Common Stock so registered or (ii)
the term of the Warrants. The Company shall bear all registration expenses
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel for the Company, blue sky fees and
expenses, and accounting fees and expenses incurred in connection with any
registration, qualification or compliance of the Common Stock pursuant to this
Agreement.
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9. Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of all or any part of this
Warrant. With respect to any fraction of a share of any security called for upon
any exercise of this Warrant, the Company shall pay to the Holder an amount in
money equal to that fraction multiplied by the current market value of that
share. The current market value shall be determined as follows:
(i) if the security at issue is listed on a national
securities exchange or admitted to unlisted trading
privileges on such an exchange or listed on the
National Association of Securities Dealers National
Market System, the current value shall be the last
reported sale price of that security on such exchange
or system on the last business day prior to the date
of the applicable exercise of this Warrant or, if no
such sale is made on such day, the average of the
highest closing bid and lowest asked price for such
day on such exchange or system; or
(ii) if the security at issue is not so listed or admitted
to unlisted trading privileges, the current market
value shall be the average of the last reported
highest bid and lowest asked prices quoted on the
National Association of Securities Dealers Automated
Quotations System or, if not so quoted, then by the
National Quotation Bureau, Inc. on the last business
day prior to the day of the applicable exercise of
this Warrant; or
(iii) if the security at issue is not so listed or admitted
to unlisted trading privileges and bid and asked
prices are not reported, the current market value
shall be determined in such reasonable manner as may
be prescribed from time to time by the Board of
Directors of the Company.
10. Rights of the Holder. The Holder shall not be entitled to any
rights as a shareholder in the Company by reason of this Warrant, either at law
or equity, except as specifically provided for herein. The Company covenants,
however, that for so long as this Warrant is at least partially unexercised, it
will furnish any Holder of this Warrant with copies of all reports and
communications furnished to the shareholders of the Company.
11. Charges Due Upon Exercise. The Company shall pay any and all issue
or transfer taxes, including, but not limited to, all federal or state taxes,
that may be payable with respect to the transfer of this Warrant or the issue or
delivery of Warrant Securities upon the exercise of this Warrant.
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12. Warrant Securities to be Fully Paid. The Company covenants that all
Warrant Securities that may be issued and delivered to a Holder of this Warrant
upon the exercise of this Warrant will be, upon such delivery, validly and duly
issued, fully paid and nonassessable.
13. Notices. All notices, certificates, requests, or other similar
items provided for in this Warrant shall be in writing and shall be personally
delivered or deposited in the United States mail, postage prepaid, addressed to
the respective party as indicated in the portions of this Warrant preceding
Section 1. All notices shall be deemed to be delivered upon personal delivery or
upon the expiration of 3 business days following deposit in the United States
mail, postage prepaid. The addresses of the parties may be changed, and
addresses of other Holders of Warrant Securities may be specified, by written
notice delivered pursuant to this Section 13. The Company's principal office
shall be deemed to be the address provided pursuant to this Section for the
delivery of notices to the Company.
14. Applicable Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of Florida, without reference to its
conflict of laws rules and principles, and courts located in Florida shall have
jurisdiction over all disputes arising hereunder.
15. Miscellaneous Provisions.
(a) Subject to the terms and conditions contained herein, this Warrant
shall be binding on the Company and its successors and shall inure to the
benefit of the original Holder, its successors and assigns and all holders of
Warrant Securities and the exercise of this Warrant in full shall not terminate
the provisions of this Warrant as it relates to holders of Warrant Securities.
(b) This Warrant cannot be changed or terminated or any performance or
condition waived in whole or in part except by an agreement in writing signed by
the party against whom enforcement of the change, termination or waiver is
sought.
(c) If any provision of this Warrant shall be held to be invalid,
illegal or unenforceable, such provision shall be severed, enforced to the
extent possible, or modified in such a way as to make it enforceable, and the
invalidity, illegality or unenforceability shall not affect the remainder of
this Warrant.
(d) The Company agrees to execute such further agreements, conveyances,
certificates and other documents as may be reasonably requested by the Holder to
effectuate the intent and provisions of this Warrant.
(e) Paragraph headings used in this Warrant are for convenience only
and shall not be taken or construed to define or limit any of the terms or
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provisions of this Warrant. Unless otherwise provided, or unless the context
shall otherwise require, the use of the singular shall include the plural and
the use of any gender shall include all genders.
NEOMEDIA TECHNOLOGIES, INC.
By: /s/ David A. Dodge
------------------
David A. Dodge, Vice President
and Chief Financial Officer
ATTEST:
/s/ Charles T. Jensen
- ---------------------
Charles T. Jensen, President, Chief
Executive Officer, and Director
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EXHIBIT A
NOTICE OF EXERCISE
(To be executed by a Holder desiring to exercise the right to purchase Shares
pursuant to a Warrant.)
The undersigned Holder of a Warrant hereby
(a) irrevocably elects to exercise the Warrant to the extent
of purchasing ___________ Shares;
(b) makes payment in full of the aggregate Exercise Price for
those Shares in the amount of $_________________ by the delivery of
certified funds or a bank cashier's check in the amount of
$-----------------;
(c) requests that certificates evidencing the securities
underlying such Shares be issued in the name of the undersigned, or, if
the name and address of some other person is specified below, in the
name of such other person:
--------------------------------------------
--------------------------------------------
--------------------------------------------
(Name and address of person other than the
undersigned in whose name Shares are to be
registered)
(d) requests, if the number of Shares purchased are not all
the Shares purchasable pursuant to the unexercised portion of the
Warrant, that a new Warrant of like tenor for the remaining Shares
purchasable pursuant to the Warrant be issued and delivered to the
undersigned at the address stated below.
Dated: ________________________ ______________________________
Signature
(This signature must conform in all
respects to the name of the Holder as
specified on the face of the Warrant.)
_______________________________
Social Security Number ______________________________
or Employer ID Number Printed Name
Address:____________________________
____________________________
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EXHIBIT B
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned, __________________________________, hereby
sells, assigns and transfers unto:
Name: _________________________________________________
(Please type or print in block letters)
Address: ______________________________________________
______________________________________________
the right to purchase _________________ Shares of NeoMedia Technologies, Inc.
(the "Company") pursuant to the terms and conditions of the Warrant held by the
undersigned. The undersigned hereby authorizes and directs the Company (i) to
issue and deliver to the above-named assignee at the above address a new Warrant
pursuant to which the rights to purchase being assigned may be exercised, and
(ii) if there are rights to purchase Shares remaining pursuant to the
undersigned's Warrant after the assignment contemplated herein, to issue and
deliver to the undersigned at the address stated below a new Warrant evidencing
the right to purchase the number of Shares remaining after issuance and delivery
of the Warrant to the above-named assignee. Except for the number of Shares
purchasable, the new Warrants to be issued and delivered by the Company are to
contain the same terms and conditions as the undersigned's Warrant. To complete
the assignment contemplated by this Assignment Form, the undersigned hereby
irrevocably constitutes and appoints as the undersigned's attorney-in-fact to
transfer the Warrants and the rights thereunder on the books of the Company with
full power of substitution for these purposes.
Dated: ________________________ ___________________________________
Signature
(This signature must conform in all
respects to the name of the Holder
as specified on the face of the
Warrant.)
----------------------------------
Printed Name
Address:_________________________________
_________________________________
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