Attached files
| file | filename |
|---|---|
| 8-K - REMOTEMDX, INC. FORM 8-K JANUARY 13, 2010 - Track Group, Inc. | rmdx8k20100113.htm |
| EX-3.1 - AMENDMENT TO ARTICLES OF INCORPORATION, DESIGNATION OF RIGHTS AND PRIVILEGES OF SERIES D CONVERTIBLE PREFERRED STOCK - Track Group, Inc. | rmdx8k20100113ex3-1.htm |
| EX-10.2 - FORM OF SERIES D CONVERTIBLE PREFERRED STOCK EXCHANGE AGREEMENT - Track Group, Inc. | rmdx8k20100113ex10-2.htm |
| EX-99.1 - PRESS RELEASE OF JANUARY 14, 2010 - Track Group, Inc. | rmdx8k20100113ex99-1.htm |
Exhibit
10-1
SERIES
D CONVERTIBLE PREFERRED STOCK
PURCHASE
AGREEMENT
This
SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (the “Agreement”) is dated
as of November __, 2009 by and among RemoteMDx, Inc., a Utah corporation (the
“Company”), and
each of the Purchasers of shares of the Series D Convertible Preferred Stock of
the Company for cash (individually, a “Purchaser” and
collectively, the “Purchasers”).
The
parties hereto agree as follows:
ARTICLE
I
Purchase
and Sale of Preferred Stock
Section 1.1 Purchase and Sale of
Stock. Upon the following terms and conditions, the Company shall issue
and sell to the Purchaser identified on the signature page hereof and such
Purchaser shall purchase from the Company the number of shares (the “Preferred Shares”) of
the Company’s Series D Convertible Preferred Stock, par value $0.0001 per share
(the “Preferred
Stock”), at a purchase price of $500.00 per Preferred Share, convertible
into shares of the Company’s common stock, par value $0.0001 per share (the
“Common
Stock”), set forth opposite Purchaser’s name on Exhibit A hereto. The
designation, rights, preferences and other terms and provisions of the Series D
Convertible Preferred Stock are set forth in the Certificate of Designation of
the Relative Rights and Preferences of the Series D Convertible Preferred Stock
attached hereto as Exhibit B (the “Certificate of
Designation”). The Company and the Purchaser are executing and delivering
this Agreement in accordance with and in reliance upon the exemption from
securities registration afforded by Rule 506 of Regulation D (“Regulation D”), as
promulgated by the United States Securities and Exchange Commission (the “Commission”), under
the Securities Act of 1933, as amended (the “Securities Act”),
Section 4(2) of the Securities Act, or Regulation S of the Securities Act
(“Regulation
S”).
Section 1.2 Purchase Price and
Closings. In consideration of and in express reliance upon the
representations, warranties, covenants, terms and conditions of this Agreement,
the Company agrees to issue and sell to the Purchaser and, in consideration of
and in express reliance upon the representations, warranties, covenants, terms
and conditions of this Agreement, the Purchaser agrees to purchase the number of
Preferred Shares set forth opposite Purchaser’s name on Exhibit A. Purchaser
acknowledges that the sale of Preferred Shares to Purchaser is part of an
offering of such securities and that there will be other purchasers of Preferred
Shares in that offering, in each case pursuant to terms of this Agreement or
agreements with terms and conditions substantially the same as this Agreement
and provided
that each such purchaser of Preferred Shares executes a signature page thereto
and to each of the other Transaction Documents (as defined in Section 2.1(b)
hereof) to which said purchasers are a party, and thereby agrees to be bound by
and subject to the terms and conditions hereof and thereof. The
Company may accept or reject any subscription for Preferred Shares, including
Purchaser’s. The initial Closing under this Agreement (the “Initial Closing”)
shall take place on or about December __, 2009, or as soon thereafter as the
Company has identified purchasers (including Purchaser) to invest at least
$2,600,000 in the Preferred Shares (excluding any Purchase Price paid by
cancellation of Company debt) and all other conditions to closing have been
satisfied or waived (the “Initial Closing
Date”). Each subsequent Closing (each, a “Subsequent Closing”)
shall take place upon the mutual agreement of the Company and the purchasers
participating in such Subsequent Closing, but in no event later than sixty (60)
days from the Initial Closing Date (each, a “Subsequent Closing
Date”); provided, however,
that the parties may mutually agree to extend the Subsequent Closing Date beyond
the sixty-day period. The maximum aggregate purchase price paid at
all closings for purchases of the Preferred Shares (including by cancellation of
Company debt) will be $30,000,000 (the aggregate of all such purchase prices
paid at any Closing, the “Purchase Price”).
Each Closing under this Agreement shall take place at the offices of Durham
Jones & Pinegar, P.C., 111 East Broadway, Ninth Floor, Salt Lake City, Utah
84111 at 10:00 a.m., Mountain Time, or at such other time and place as may be
mutually agreed upon. Subject to the terms and conditions of this Agreement, at
each Closing the Company shall deliver or cause to be delivered to each
purchaser participating in such Closing (x) a certificate for the number of
Preferred Shares acquired by said purchaser and (y) any other documents
required to be delivered pursuant to Article IV hereof. At
each Closing, each purchaser shall cause its Purchase Price to be delivered by
wire transfer to the Company, net of wire and bank fees. Wire instructions will
be provided separately by the Company following receipt of this Agreement duly
executed by Purchaser.
1
ARTICLE
II
Representations
and Warranties
Section 2.1 Representations and
Warranties of the Company. The Company hereby represents and warrants to
Purchaser, as of the date hereof and as of the Closing Date (except as set forth
in the schedule of exceptions delivered by the Company to Purchaser at each
Closing in which such Purchaser participates (the “Schedule of
Exceptions”) with
each numbered Schedule corresponding to the section number herein), as
follows:
(a) Organization, Good Standing
and Power. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Utah and has the
requisite corporate power to own, lease and operate its properties and assets
and to conduct its business as it is now being conducted. Except as set forth on
Schedule
2.1(a), the Company and each of its subsidiaries is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the business conducted or property owned by it makes such
qualification necessary, except for any jurisdiction(s) (alone or in the
aggregate) in which the failure to be so qualified could not reasonably be
expected to have a Material Adverse Effect (as defined in Section 2.1(c)
hereof).
(b) Authorization;
Enforcement. The Company has the requisite corporate power and authority
to enter into and perform this Agreement, the Irrevocable Transfer Agent
Instructions (as defined in Section 3.12),
and the Certificate of Designation (collectively, the “Transaction
Documents”) and to issue and sell the Shares in accordance with the terms
hereof. The execution, delivery and performance of the Transaction Documents by
the Company, and the consummation by it of the transactions contemplated hereby
and thereby, have been duly and validly authorized by all necessary corporate
action, and no further consent or authorization of the Company or its Board of
Directors or stockholders is required. This Agreement has been duly executed and
delivered by the Company. The other Transaction Documents will have been duly
executed and delivered by the Company at the Closing. Each of the Transaction
Documents constitutes, or shall constitute when executed and delivered, a valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation,
conservatorship, receivership or similar laws relating to, or affecting
generally the enforcement of, creditor’s rights and remedies or by other
equitable principles of general application.
2
(c) Capitalization. The
authorized capital stock of the Company and the shares thereof currently issued
and outstanding as of the date hereof are set forth on Schedule 2.1(c)
hereto. All of the outstanding shares of the Common Stock have been duly and
validly authorized. Except as set forth on Schedule 2.1(c)
hereto, no shares of Common Stock are entitled to preemptive rights or
registration rights and there are no outstanding options, warrants, scrip,
rights to subscribe to, call relating to, or securities or rights convertible
into, any shares of capital stock of the Company. The Company has furnished or
made available to the Purchasers true and correct copies of the Company’s
Articles of Incorporation as in effect on the date hereof (the “Articles”), and the
Company’s Bylaws as in effect on the date hereof (the “Bylaws”). For the
purposes of this Agreement, “Material Adverse
Effect” means any material adverse effect on the business, operations,
properties, prospects or financial condition of the Company and its
subsidiaries, taken as a whole, and/or any condition, circumstance, or situation
that would prohibit or otherwise impair the ability of the Company to perform
any of its obligations under this Agreement in any material respect; provided, however, that any
adverse effect that that is caused primarily by conditions generally affecting
the U.S. economy shall be deemed not to be a Material Adverse
Effect.
(d) Issuance of Shares.
The Preferred Shares to be issued at the Closing have been duly authorized by
all necessary corporate action and the Preferred Shares, when paid for and
issued in accordance with the terms hereof, shall be validly issued and
outstanding, fully paid and nonassessable and entitled to the rights and
preferences set forth in the Certificate of Designation. When the Conversion
Shares are paid for and issued in accordance with the terms of the Certificate
of Designation, such shares will be duly authorized by all necessary corporate
action and validly issued and outstanding, fully paid and nonassessable, and the
holders shall be entitled to all rights accorded to a holder of Common
Stock.
(e) No Conflicts. Except
as set forth on Schedule 2.1(e)
hereto, the execution, delivery and performance of the Transaction Documents by
the Company, the performance by the Company of its obligations thereunder and
the consummation by the Company of the transactions contemplated herein and
therein do not and will not (i) violate any provision of the Company’s
Certificate or Bylaws, (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond,
license, lease agreement, instrument or obligation to which the Company is a
party or by which it or its properties or assets are bound, (iii) create or
impose a lien, mortgage, security interest, charge or encumbrance of any nature
on any property of the Company under any agreement or any commitment to which
the Company is a party or by which the Company is bound or by which any of its
respective properties or assets are bound, or (iv) result in a violation of
any federal, state, local or foreign statute, rule, regulation, order, judgment
or decree (including Federal and state securities laws and regulations)
applicable to the Company or any of its subsidiaries or by which any property or
asset of the Company or any of its subsidiaries are bound or affected, except,
in all cases other than violations pursuant to clauses (i) and
(iv) above, for such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually or in the
aggregate, have a Material Adverse Effect.
3
(f) Subsidiaries. For the
purposes of this Agreement, “subsidiary” shall
mean any corporation or other entity of which at least a majority of the
securities or other ownership interest having ordinary voting power (absolutely
or contingently) for the election of directors or other persons performing
similar functions are at the time owned directly or indirectly by the Company
and/or any of its other subsidiaries.
(g) No Material Adverse
Change. Other than as disclosed in the Company’s Commission Documents,
since June 30, 2009, neither the Company nor its subsidiaries have experienced
or suffered any Material Adverse Effect.
Section 2.2 Representations, Warranties
and Covenants of the Purchasers. Purchaser hereby makes the following
representations, warranties and covenants to the Company (with respect solely to
itself and not with respect to any other purchaser), as of the date hereof, and
as of each Closing Date in which such Purchaser is participating in a
Closing:
(a) Organization and Standing of
the Purchasers. If the Purchaser is an entity, such Purchaser is a
corporation, partnership or limited liability company duly incorporated or
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization.
(b) Authorization and
Power. Purchaser has the requisite power and authority to enter into and
perform this Agreement and to purchase the Preferred Shares being sold to it
hereunder. The execution, delivery and performance of this Agreement by such
Purchaser and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate or partnership
action, and no further consent or authorization of such Purchaser or its Board
of Directors, stockholders, members, managers or partners, as the case may be,
is required. This Agreement has been duly authorized, executed and delivered by
such Purchaser and constitutes, or shall constitute when executed and delivered,
a valid and binding obligation of such Purchaser enforceable against such
Purchaser in accordance with the terms thereof.
(c) No Conflicts. The
execution, delivery and performance of this Agreement by Purchaser and the
consummation by such Purchaser of the transactions contemplated hereby and
thereby or relating hereto do not and will not (i) result in a violation of
such Purchaser’s charter documents or bylaws or other organizational documents
or (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of any
agreement, indenture or instrument or obligation to which such Purchaser is a
party or by which its properties or assets are bound, or result in a violation
of any law, rule, or regulation, or any order, judgment or decree of any court
or governmental agency applicable to such Purchaser or its properties (except
for such conflicts, defaults and violations as would not, individually or in the
aggregate, have a material adverse effect on such Purchaser’s ability to perform
its obligations hereunder). Such Purchaser is not required to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency in order for it to execute, deliver or perform any
of its obligations under this Agreement or to purchase the Preferred Shares in
accordance with the terms hereof, provided that for
purposes of the representation made in this sentence, such Purchaser is assuming
and relying upon the accuracy of the relevant representations and agreements of
the Company herein.
4
(d) Acquisition for
Investment. Purchaser is acquiring the Preferred Shares in the ordinary
course of its business and solely for its own account for the purpose of
investment and not as a nominee or with a view to or for sale in connection with
distribution. Purchaser does not have a present intention to sell the Preferred
Shares in a manner that would violate the registration requirements of Federal
and state securities laws, nor a present arrangement (whether or not legally
binding) or intention to effect any distribution of the Preferred Shares to or
through any person or entity; provided, however, that by
making the representations herein and subject to Section 2.2(h)
below, Purchaser does not agree to hold the Shares for any minimum or other
specific term and reserves the right to dispose of the Shares at any time in
accordance with Federal and state securities laws applicable to such
disposition. Purchaser will not, directly or indirectly, offer, sell, pledge,
transfer or otherwise dispose of (or solicit any offers to buy, purchase or
otherwise acquire or take a pledge of) any of the Preferred Shares, nor will
such Purchaser engage in any short sale that results in a disposition of any of
the Preferred Shares by such Purchaser, except in compliance with any applicable
state and Federal securities laws. Purchaser acknowledges that it is able to
bear the financial risks associated with an investment in the Preferred Shares
and that it has been given full access to such records of the Company and the
subsidiaries and to the officers of the Company and the subsidiaries and has
carefully reviewed and considered all such information as it has deemed
necessary or appropriate to conduct such Purchaser’s due diligence investigation
and has sufficient knowledge and experience in investing in companies similar to
the Company in terms of the Company’s stage of development so as to be able to
evaluate the risks and merits of its investment in the Company.
(e) Status of Purchaser.
Purchaser either (A) is an “accredited investor” within the meaning of the
Commission’s Rule 501 of Regulation D, as presently in effect, or
(B) (i) certifies that such Purchaser is not a “U.S. person” within
the meaning of the Commission’s Rule 902 of Regulation S, as presently in
effect, and that such Purchaser is not acquiring the Preferred Shares for the
account or benefit of any such U.S. person, (ii) agrees to resell the
Preferred Shares only in accordance with the provisions of such Regulation S,
pursuant to registration under the Securities Act, or pursuant to an available
exemption from registration and agrees not to engage in hedging transactions
with regard to the Preferred Shares unless in compliance with the Securities
Act, (iii) agrees that any certificates for any securities issued to such
Purchaser shall contain a legend to the effect that transfer is prohibited
except in accordance with the provisions of such Regulation S, pursuant to
registration under the Securities Act or pursuant to an available exemption from
registration and that hedging transactions involving such Preferred Shares may
not be conducted unless in compliance with the Securities Act, (iv) agrees
that the Company is hereby required to refuse to register any transfer of any
securities issued to such Purchaser not made in accordance with the provisions
of such Regulation S, pursuant to registration under the Securities Act, or
pursuant to an available exemption from registration. Purchaser is not required
to be registered as a broker-dealer under Section 15 of the Exchange Act
and such Purchaser is not a broker-dealer.
(f)
Opportunities for Additional
Information. Purchaser acknowledges that such Purchaser has had the
opportunity to ask questions of and receive answers from, or obtain additional
information from, the executive officers of the Company concerning the financial
and other affairs of the Company, and to the extent deemed necessary in light of
such Purchaser’s personal knowledge of the Company’s affairs, such Purchaser has
asked such questions and received answers to the full satisfaction of such
Purchaser, and such Purchaser desires to invest in the Company.
5
(g) No General
Solicitation. Purchaser acknowledges that the Preferred Shares were not
offered to such Purchaser by means of any form of general or public solicitation
or general advertising, or publicly disseminated advertisements or sales
literature, including (i) any advertisement, article, notice or other
communication published in any newspaper, magazine, or similar media, or
broadcast over television or radio, or (ii) any seminar or meeting to which
such Purchaser was invited by any of the foregoing means of
communications.
(h) Rule 144. Such
Purchaser understands that the Shares must be held indefinitely unless such
Shares are registered under the Securities Act or an exemption from registration
is available. Such Purchaser acknowledges that such Purchaser is familiar with
Rule 144 of the rules and regulations of the Commission, as amended, promulgated
pursuant to the Securities Act (“Rule 144”), and that
such person has been advised that Rule 144 permits resales only under certain
circumstances. Such Purchaser understands that to the extent that Rule 144 is
not available, such Purchaser will be unable to sell any Shares without either
registration under the Securities Act or the existence of another exemption from
such registration requirement.
(i)
General. Such
Purchaser understands that the Shares are being offered and sold in reliance on
a transactional exemption from the registration requirement of Federal and state
securities laws and the Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and understandings of
such Purchaser set forth herein in order to determine the applicability of such
exemptions and the suitability of such Purchaser to acquire the
Shares.
(j)
Independent
Investment. Except as may be disclosed in any filings with the Commission
by the Purchasers under Section 13 and/or Section 16 of the Exchange
Act, no Purchaser has agreed to act with any other Purchaser for the purpose of
acquiring, holding, voting or disposing of the Shares purchased hereunder for
purposes of Section 13(d) under the Exchange Act, and each Purchaser is
acting independently with respect to its investment in the Shares. Each
Purchaser understands that nothing in the Agreement or any other materials
presented to such Purchaser in connection with the purchase and sale of the
Preferred Shares constitutes legal, tax or investment advice. Purchaser has
consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of the
Preferred Shares.
(k) Risk of Loss; No Public
Market. Purchaser understands that its investment in the Preferred Shares
involves a significant degree of risk, including a risk of total loss of such
Purchaser’s investment. Purchaser understands that there currently is no public
market for the securities of the Company; that the purchase price for the Shares
was established by negotiations between the Company and the Purchaser; and that
no representation is being made as to the future value of any of the Company’s
securities.
6
ARTICLE
III
Covenants
The
Company covenants with the Purchaser as follows, which covenants are for the
benefit of the Purchaser and its permitted assignees hereunder.
Section 3.1 Securities
Compliance. The Company shall notify the Commission in accordance with
its rules and regulations of the transactions contemplated by any of the
Transaction Documents, including filing a Form D with respect to the Preferred
Shares and the Conversion Shares as required under Regulation D and applicable
“blue sky” laws, and shall take all other necessary action and proceedings as
may be required and permitted by applicable law, rule and regulation, for the
legal and valid issuance of the Preferred Shares and the Conversion Shares to
the Purchaser or subsequent holders.
Section 3.2 Compliance with Laws.
The Company shall comply, and cause each subsidiary to comply, with all
applicable laws, rules, regulations and orders, noncompliance with which could
have a Material Adverse Effect.
Section 3.3 Keeping of Records and Books
of Account. The Company shall keep and cause each subsidiary to keep
adequate records and books of account, in which complete entries will be made in
accordance with GAAP consistently applied, reflecting all financial transactions
of the Company and its subsidiaries, and in which, for each fiscal year, all
proper reserves for depreciation, depletion, obsolescence, amortization, taxes,
bad debts and other purposes in connection with its business shall be
made.
Section 3.4 Other Agreements. The
Company shall not enter into any agreement in which the terms of such agreement
would restrict or impair the right or ability of the Company or any subsidiary
to perform under any Transaction Document.
Section 3.5 Reservation of
Shares. So long as any of the Preferred Shares remain outstanding, the
Company shall take all action necessary to at all times have authorized, and
reserved for the purpose of issuance, no less than one hundred ten percent
(110%) of the aggregate number of shares of Common Stock needed to provide
for the issuance of the Conversion Shares.
Section 3.6 Disclosure of
Transaction. The Company shall file with the Commission a Current Report
on Form 8-K (the “Form
8-K”) describing the material terms of the transactions contemplated
hereby (and attaching as exhibits thereto this Agreement and the Certificate of
Designation) as soon as practicable following the Closing Date but in no event
more than four (4) Trading Days following the Closing Date, which Form 8-K
shall be subject to prior review and comment by counsel for the Purchaser.
“Trading Day”
means any day during which the OTC Bulletin Board (or other quotation venue or
principal exchange on which the Common Stock is traded) shall be open for
trading.
Section 3.7 Exchange Agreement.
The Company shall enter into exchange agreements with certain holders of its
debt who agree to convert such debt for the purchase of Preferred Shares under
such agreements, substantially in the form attached hereto as Exhibit C (the “Exchange Agreement”)
and shall issue its Series D Preferred Stock in exchange for conversion of such
debt pursuant to the Exchange Agreements. A list of the debt holders who have
agreed to convert their debt into Series D Preferred Stock is attached hereto as
Exhibit
D.
7
Section 3.8 Registration and
Listing. Unless the Company obtains written consent of Purchasers holding
Preferred Stock representing more than fifty percent (50%) of all
outstanding Preferred Shares and so long as a Purchaser beneficially owns any
shares of the Preferred Stock, the Company shall (a) either (i) cause
its Common Stock to continue to be registered under Section 12(b) or 12(g)
of the Exchange Act, or (ii) continue to voluntarily file all reports
required to be filed as if the Company were so registered, and in any event
shall comply in all respects with its reporting and filing obligations under the
Exchange Act, (b) comply with all requirements related to any registration
statement filed pursuant to this Agreement, and (c) not take any action or
file any document (whether or not permitted by the Securities Act or the rules
promulgated thereunder) to terminate or suspend such registration or to
terminate or suspend its reporting and filing obligations under the Exchange Act
or Securities Act, except as permitted herein. Subject to the terms of the
Transaction Documents, the Company further covenants that it will take such
further action as the Purchasers may reasonably request, all to the extent
required from time to time, to enable the Purchasers to sell the Common Stock of
the Company issuable upon exercise or conversion of the Preferred Stock without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144, unless the Company obtains written consent of Purchasers
holding Preferred Stock representing more than fifty percent (50%) of all
outstanding Preferred Shares and so long as a Purchaser beneficially owns any
shares of the Preferred Stock. Upon the request of the Purchasers, the Company
shall deliver to the Purchasers a written certification of a duly authorized
officer as to whether it has complied with such requirements.
ARTICLE
IV
Conditions
Section 4.1 Conditions Precedent to the
Obligation of the Company to Sell the Shares. The obligation hereunder of
the Company to issue and sell the Preferred Shares to Purchaser is subject to
the satisfaction or waiver, at or before each Closing, of each of the conditions
set forth below. These conditions are for the Company’s sole benefit and may be
waived by the Company at any time in its sole discretion.
(a) Accuracy of Purchaser’s
Representations and Warranties. The representations and warranties of
Purchaser shall be true and correct in all material respects as of the date when
made and as of the Closing Date applicable to such Purchaser as though made at
that time, except for representations and warranties that are expressly made as
of a particular date, which shall be true and correct in all material respects
as of such date.
(b) Performance by the
Purchaser. Purchaser shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by such Purchaser at or
prior to the Closing.
(c) No Injunction. No
statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction which prohibits the consummation of any of
the transactions contemplated by this Agreement.
8
(d) Delivery of Purchase
Price. The Purchase Price for the Preferred Shares has been delivered to
the Company.
(e) Delivery of Transaction
Documents. The Transaction Documents have been duly executed and
delivered by the Purchasers to the Company.
Section
4.2 Consent to Increase in
Authorized Capital of the Company. Purchaser hereby consents
to the increase of the Company’s authorized capital, increasing to 600,000,000
shares the number of shares of Common Stock that the Company is authorized to
issue under its Articles. No further action or consent shall be
required from Purchaser in connection with the Company’s execution and filing of
an amendment to its Articles to effect this increase.
Section 4.2 Conditions Precedent to the
Obligation of the Purchaser to Purchase the Shares. The obligation
hereunder of Purchaser to acquire and pay for the Preferred Shares is subject to
the satisfaction or waiver, at or before each Closing, of each of the conditions
set forth below. These conditions are for Purchaser’s sole benefit and may be
waived by Purchaser at any time in its sole discretion.
(a) Accuracy of the Company’s
Representations and Warranties. Each of the representations and
warranties of the Company in this Agreement shall be true and correct in all
respects as of the date when made and shall be true and correct in all material
respects as of the Closing Date applicable to such Purchaser as though made at
that time (except for representations and warranties that are expressly made as
of a particular date, which shall be true and correct in all material respects
as of such date).
(b) Performance by the
Company. The Company shall have performed, satisfied and complied in all
respects with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Company at or prior
to the Closing.
(c) No Injunction. No
statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction which prohibits the consummation of any of
the transactions contemplated by this Agreement.
(d) No Proceedings or
Litigation. No action, suit or proceeding before any arbitrator or any
governmental authority shall have been commenced, and no investigation by any
governmental authority shall have been threatened, against the Company or any
subsidiary, or any of the officers, directors or affiliates of the Company or
any subsidiary seeking to restrain, prevent or change the transactions
contemplated by this Agreement, or seeking damages in connection with such
transactions.
(e) Certificate of Designation
of Rights and Preferences. Prior to the Closing, the Certificate of
Designation shall have been filed with the Secretary of State of
Utah.
(f)
Certificates. The
Company shall have executed and delivered to the Purchaser the certificate for
the Preferred Shares being acquired by such Purchaser at the Closing (in each
case, in such denominations as such Purchaser shall request).
9
ARTICLE
V
Stock
Certificate Legend
Section 5.1 Legend. Each
certificate representing the Preferred Shares, and, if appropriate, securities
issued upon conversion thereof, shall be stamped or otherwise imprinted with a
legend substantially in the following form (in addition to any legend required
by applicable state securities or “blue sky” laws):
THESE
SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR
ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE
SECURITIES LAWS OR THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT
REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE
PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
ARTICLE
VI
Registration
Rights
Section 6.1 Piggyback Registration
Rights. If at any time when there is not an effective Registration
Statement covering the Conversion Shares, the Company shall determine to prepare
and file with the Commission a registration statement (together with any
registration statement required to be filed under Section 6.2, below, a
“Registration
Statement”) relating to an offering for its own account or the account of
others under the Securities Act of any of its equity securities, other than on
Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their
then equivalents relating to equity securities to be issued solely in connection
with any acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans, the Company shall
send to each holder of the Preferred Shares written notice of such determination
and, if within thirty (30) days after receipt of such notice, or within
such shorter period of time as may be specified by the Company in such written
notice as may be necessary for the Company to comply with its obligations with
respect to the timing of the filing of such Registration Statement, any such
holder shall so request in writing (which request shall specify the Conversion
Shares intended to be disposed of by the Purchasers, if any), the Company will
cause the registration under the Securities Act of all Conversion Shares which
the Company has been so requested to register by the holder, to the extent
required to permit the disposition of the Conversion Shares so to be registered;
provided that
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 register or to delay registration of such securities, the Company may, at
its election, give written notice of such determination to such holder and,
thereupon, (i) in the case of a determination not to register, shall be
relieved of its obligation to register any Conversion Shares in connection with
such registration, and (ii) in the case of a determination to delay
registering, shall be permitted to delay registering any Conversion Shares being
registered pursuant to this Section 6.1 for
the same period as the delay in registering such other securities. The Company
shall include in such Registration Statement all or any part of such Conversion
Shares such holder requests to be registered; provided, however, that the
Company shall not be required to register any Conversion Shares pursuant to this
Section 6.1 that
are eligible for resale without limitations concerning the availability of
current public information pursuant to Rule 144 of the Securities Act. In the
case of an underwritten public offering, if the managing underwriter(s) or
underwriter(s) should reasonably object to the inclusion of the Conversion
Shares in such Registration Statement, then if the Company after consultation
with the managing underwriter should reasonably determine that the inclusion of
such Conversion Shares would materially adversely affect the offering
contemplated in such Registration Statement, and based on such determination
recommends inclusion in such Registration Statement of fewer or none of the
Conversion Shares of the holders, then (x) the number of Conversion Shares
of the holders included in such Registration Statement shall be reduced pro-rata
among such holders (based upon the number of Conversion Shares requested to be
included in the registration), if the Company after consultation with the
underwriter(s) recommends the inclusion of fewer Conversion Shares, or
(y) none of the Conversion Shares of the Holders shall be included in such
Registration Statement, if the Company after consultation with the
underwriter(s) recommends the inclusion of none of such Conversion Shares; provided, however, that if
securities are being offered for the account of other persons or entities as
well as the Company, such reduction shall not represent a greater fraction of
the number of Conversion Shares intended to be offered by the holders than the
fraction of similar reductions imposed on such other persons or entities (other
than the Company).
10
Section
6.2 Demand Registration
Rights. Upon demand by Purchaser, the Company shall include such
Purchaser’s Conversion Shares in a Registration Statement prepared by the
Company and filed with the Commission within thirty (30) days of such
demand; provided, that no
demand shall be made sooner than ninety (90) days of the Closing and the
Purchaser shall be entitled to only one demand to register the resale of the
Conversion Shares pursuant to this Section 6.2;
provided, further, that the Company shall have first increased its authorized
capital as provided in Section 3.5 hereof.
The Registration Statement will be on an appropriate form (as the Company shall
determine in its sole discretion) and will permit the Conversion Shares to be
offered on a continuous basis. The Company shall use its commercially reasonable
efforts to cause the Registration Statement to be declared effective under the
Securities Act by the Commission as promptly as possible after the filing
thereof. The Company shall use its commercially reasonable efforts to keep the
Registration Statement continuously effective under the Securities Act until the
date which is the earliest of (a) the date on which substantially all of
the Conversion Shares have been sold, (b) the date on which all Conversion
Shares may be sold immediately without registration under the Securities Act and
without volume restrictions pursuant to Rule 144(b) of the Securities Act or
(c) one year from the date the Registration Statement is declared effective
by the Commission. The Company’s obligations under this Section 6.2
shall be suspended if (a) the fulfillment of such obligations would require
the Company to make a disclosure that would be detrimental to the Company, and
the Company’s Board of Directors determines that it is in the best interests of
the Company to defer such obligations or (b) the fulfillment of such
obligations would require the Company to prepare financial statements not
required to be prepared by the Company to comply with its obligations under the
Exchange Act at the time the Registration Statement is proposed to be filed (the
period during which either of the preceding conditions is in effect is referred
to as a “Permitted
Black-Out Period”). A Permitted Black-Out Period will end, as applicable,
upon the making of the relevant disclosure by the Company (or, if earlier, when
such disclosure would no longer be necessary or detrimental) or as soon as it
would no longer be necessary to prepare such financial statements to comply with
the Securities Act.
11
Section
6.3 Expenses;
Indemnification. The Company shall pay all costs and expenses incurred by
the Company in connection with the preparation and filing of the Registration
Statement, other than selling commissions and fees which shall be the sole
responsibility of the Purchaser. The Company and Purchaser shall provide each
other with customary indemnification rights in connection with a Registration
Statement prepared and filed with the Commission pursuant to this Section 6.
Section 6.4 Assignment of Registration
Rights. The rights of each Purchaser hereunder, including the right to
have the Company register for resale Conversion Shares in accordance with the
terms of this Agreement, shall be automatically assignable by each Purchaser to
any person who acquires all or a portion of the Preferred Shares if:
(i) the Purchaser agrees in writing with the transferee or assignee to
assign such rights, and a copy of such agreement is furnished to the Company
within a reasonable time after such assignment, (ii) the Company is, within
a reasonable time after such transfer or assignment, furnished with written
notice of (A) the name and address of such transferee or assignee, and
(B) the securities with respect to which such registration rights are being
transferred or assigned, (iii) following such transfer or assignment the
further disposition of such securities by the transferee or assignees is
restricted under the Securities Act and applicable state securities laws unless
such securities are registered in a Registration Statement pursuant to Section 6.1 or
Section 6.2 (in
which case the Company shall be obligated to amend such Registration Statement
to reflect such transfer or assignment) or are otherwise exempt from
registration, (iv) at or before the time the Company receives the written
notice contemplated by clause (ii) of this Section 6.4, the
transferee or assignee agrees in writing with the Company to be bound by all of
the provisions of this Agreement, and (v) such transfer shall have been
made in accordance with the applicable requirements of this Agreement. In
addition, each Purchaser shall have the right to assign its rights hereunder to
any other person with the prior written consent of the Company, which consent
shall not unreasonably be withheld. The rights to assignment shall apply to the
Purchasers (and to subsequent) successors and assigns.
ARTICLE
VII
Miscellaneous
Section 7.1 Fees and Expenses.
Except as otherwise set forth in this Agreement and the other Transaction
Documents, each party shall pay the fees and expenses of its advisors, counsel,
accountants and other experts, if any, and all other expenses, incurred by such
party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement.
Section 7.2 Specific Enforcement,
Consent to Jurisdiction.
(a) The
Company and the Purchaser acknowledge and agree that irreparable damage would
occur in the event that any of the provisions of this Agreement or the other
Transaction Documents were not performed in accordance with their specific terms
or were otherwise breached. It is accordingly agreed that the parties shall be
entitled to seek an injunction or injunctions to prevent or cure breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof or thereof, this being in addition to any other remedy to
which any of them may be entitled by law or equity.
12
(b) Each
of the Company and the Purchaser (i) hereby irrevocably submits to the
jurisdiction of the United States District Court sitting in the District of Utah
and the courts of the State of Utah located in Salt Lake County for the purposes
of any suit, action or proceeding arising out of or relating to this Agreement
or any of the other Transaction Documents or the transactions contemplated
hereby or thereby and (ii) hereby waives, and agrees not to assert in any
such suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of such court, that the suit, action or proceeding is brought
in an inconvenient forum or that the venue of the suit, action or proceeding is
improper. Each of the Company and the Purchaser consents to process being served
in any such suit, action or proceeding by mailing a copy thereof to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing in this Section 7.2
shall affect or limit any right to serve process in any other manner permitted
by law.
Section 7.3 Entire Agreement;
Amendment. This Agreement and the Transaction Documents collectively
contain the entire understanding and agreement of the parties with respect to
the matters covered hereby and, except as specifically set forth herein or in
the Transaction Documents, neither the Company nor the Purchaser makes any
representations, warranty, covenant or undertaking with respect to such matters
and they supersede all prior understandings and agreements with respect to said
subject matter, all of which are merged herein. No provision of this Agreement
may be waived or amended other than by a written instrument signed by the
Company and the Purchaser, and no provision hereof may be waived other than by
an a written instrument signed by the party against whom enforcement of any such
amendment or waiver is sought.
Section 7.4 Notices. Any notice,
demand, request, waiver or other communication required or permitted to be given
hereunder shall be in writing and shall be effective (a) upon hand delivery
or by facsimile at the address or number designated below (if delivered on a
business day during normal business hours where such notice is to be received),
or the first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be:
|
If to the Company:
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150
West Civic Center Drive
Suite
400
Sandy,
Utah 84070
Attn:
Chief Executive Officer
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with
copies to:
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Durham
Jones & Pinegar, P.C.
111
East Broadway, Ninth Floor
Salt
Lake City, Utah 84111
Attn:
Kevin R. Pinegar
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If to Purchaser:
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At
the address of Purchaser set forth on Exhibit A to
this Agreement, with copies to Purchaser’s counsel as set forth on Exhibit A or as
specified in writing by Purchaser.
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13
Any party
hereto may from time to time change its address for notices by giving at least
ten (10) days written notice of such changed address to the other party
hereto.
Section 7.5 Waivers. No waiver by
either party of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any other provisions, condition or requirement hereof, nor
shall any delay or omission of any party to exercise any right hereunder in any
manner impair the exercise of any such right accruing to it
thereafter.
Section 7.6 Headings. The
article, section and subsection headings in this Agreement are for convenience
only and shall not constitute a part of this Agreement for any other purpose and
shall not be deemed to limit or affect any of the provisions
hereof.
Section 7.7 Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of
the parties and their successors and assigns.
Section 7.8 No Third Party
Beneficiaries. This Agreement is intended for the benefit of the parties
hereto and their respective permitted successors and assigns and is not for the
benefit of, nor may any provision hereof be enforced by, any other
person.
Section 7.9 Governing Law. This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Utah, without giving effect to any of the conflicts of law
principles which would result in the application of the substantive law of
another jurisdiction. This Agreement shall not be interpreted or construed with
any presumption against the party causing this Agreement to be
drafted.
Section 7.10 Survival. The
representations and warranties of the Company and the Purchasers shall survive
the execution and delivery hereof and the Closings hereunder for a period of one
year following the last Closing Date.
Section 7.11 Counterparts. This
Agreement may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same Agreement and shall become effective when
counterparts have been signed by each party and delivered to the other parties
hereto, it being understood that all parties need not sign the same counterpart.
In the event that any signature is delivered by facsimile or electronic
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile or electronic signature were the
original thereof.
14
Section 7.12 Severability. The
provisions of this Agreement and the Transaction Documents are severable and, in
the event that any court of competent jurisdiction shall determine that any one
or more of the provisions or part of the provisions contained in this Agreement
or the Transaction Documents shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision of
this Agreement or the Transaction Documents and such provision shall be reformed
and construed as if such invalid or illegal or unenforceable provision, or part
of such provision, had never been contained herein, so that such provisions
would be valid, legal and enforceable to the maximum extent
possible.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
15
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officer as of the date first above
written.
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REMOTEMDX,
INC.
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By:
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David
G. Derrick
Chief
Executive Officer
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[Signature
Page to Series D Stock Purchase Agreement]
16
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officer as of the date first above
written.
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PURCHASER
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By:
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Name:
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Title:
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[Signature
Page to Series D Stock Purchase Agreement]
17
List of
Exhibits
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Exhibit
A
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Purchaser
and Number of Shares Purchased
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Exhibit
B
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Certificate
of Designation
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Exhibit
C
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Form
of Exchange Agreement
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Exhibit
D
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List
of Converting Debt Holders
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18
EXHIBIT
A
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Name
and Address of Purchaser:
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Number
of Shares Purchased
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Name
and Address of Purchaser’s Counsel:
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||
19
EXHIBIT
B
FORM OF
CERTIFICATE OF DESIGNATION
20
EXHIBIT
C
FORM OF
EXCHANGE AGREEMENT
21
EXHIBIT
D
LIST OF
CONVERTING DEBT HOLDERS
22