VATAS Holding GmbH Friedrichstrasse 95 D-10117 Berlin, Germany
Exhibit
10.29
VATAS
Holding GmbH
Xxxxxxxxxxxxxxxx
00
X-00000
Xxxxxx,
Xxxxxxx
As
of
July 5, 2007
RemoteMDx,
Inc.
000
Xxxx
Xxxxx Xxxxxx Xxxxx
Xxxxx
000
Xxxxx,
Xxxx 00000
Xxxxxx
Xxxxxx
Attention:
Xxxxxxx Xxxxx
Dear
Xx.
Xxxxx:
This
letter agreement relates to the U.S. $7,800,000 investment made by VATAS
Holding
GmbH, a German limited liability company (“VATAS”), and any
associated investors named by VATAS (collectively, the
“Investors”) as of the date hereof in common stock of
RemoteMDx, Inc., a Utah corporation (the “Company”)
pursuant to the Securities Purchase Agreement (the
“Agreement”), dated July 5, 2007, by and between the Investors
and Xxxxx Xxxxxxx, Xxxxx Xxxxxx and ADP Management Inc. (collectively, the
“Sellers”), whereby the Investors purchased 6,000,000 shares of
Common Stock, par value $.0001 of the Company (the “Purchased
Securities”) from the Sellers.
As
an
inducement for the Investors to further invest in and enlarge their commitment
to the Company, and in connection with the Investors entering into the Agreement
with the Sellers, from which the benefit of having a concentrated, active
and
supportive investor base will accrue to the Company, we hereby agree to the
following terms with respect to the Purchased Securities (capitalized terms
not
otherwise defined herein shall have the meanings ascribed to such terms in
the
Agreement):
1. Registration
Rights. The Company agrees that, not later than thirty (30) days
after the execution of the Agreement (the “Filing Deadline”),
the Company will file with the United States Securities and Exchange Commission
(the “SEC”), on Form SB-2 or such other form as is available to
the Company, a registration statement (the “Registration
Statement”) with respect to all of the Purchased Shares, to register
the resale by the Investors of the Purchased Shares. The Company
shall use its commercially reasonable efforts to cause the Registration
Statement to become effective within thirty (30) days after the date of the
initial filing of the Registration Statement, and in any event as promptly
as
possible after such initial filing date. If the SEC provides comments
to the Registration Statement, the Company will respond to such comments
within
the shortest time reasonably possible, and in any event within ten (10) business
days of receipt of such comments. The Company will use its
commercially reasonable efforts to cause the Registration Statement to be
continuously effective under the United States Securities Act of 1933, as
amended (the “Securities Act”) until the earliest of: (i) when
all such Purchased Shares are sold by the Investors; and (ii) when all of
the
Purchased Shares become eligible for resale under Rule 144(k) (or any successor
provision then in force) under the Securities Act (the “Effectiveness
Period”). The Registration Statement, when declared
effective (including the documents incorporated therein by reference), will
comply as to form with all applicable requirements of the Securities Act
and the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”) and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make
the statements therein not misleading.
2. Failure
to File. The parties hereby agree that in the event that (a) the
Company does not file the Registration Statement by the Filing Deadline,
(b) the
Company does not respond to any SEC comments within ten (10) days of receipt
thereof or (c) the Registration Statement is not declared effective within
one
hundred (100) days of the initial filing date of the Registration Statement,
the
Company shall issue to the Investors, as liquidated damages and not as a
penalty, an additional number of shares equal to five percent (5%) of the
aggregate number of Purchased Shares purchased by such Investor pursuant
to the
Agreement. The parties further agree that for the thirty- (30-) day
period which begins on the thirty-first (31st) day following the Filing
Deadline, and for each successive thirty- (30-) day period, during which
the
Company has not filed the Registration Statement, the Company shall issue
to the
Investors, as liquidated damages and not as a penalty, an additional number
of
shares equal to five percent (5%) of the aggregate number of Purchased Shares
purchased by such Investor pursuant to the Agreement. The Company shall include
all such shares issued to the Investors as liquidated damages pursuant to
this
Section 2 for registration under the Securities Act in the Registration
Statement on the same terms as specified in Section 1 of this
Agreement.
3. Failure
to keep Registration Statement Effective. If the Registration
Statement is filed and declared effective but, during the Effectiveness Period,
shall thereafter cease to be effective or fail to be usable for its intended
purpose, and such suspension shall not be lifted or failure shall not be
remedied within sixty (60) business days, by the filing of a post-effective
amendment to the Registration Statement or otherwise, then, on the sixty-first
(61st) day thereafter and for each successive thirty- (30-) day period
thereafter until such suspension is lifted or such failure is remedied, the
Company shall pay to the Investors, in immediately available funds, as
liquidated damages and not as a penalty, an amount equal to five percent
(5%) of
the amount of the Purchase Price pursuant to the Agreement paid by such
Investors corresponding to the number of shares held by such Investor at
the
time that the Registration Statement ceases to be effective or fails to be
usable for its intended purpose. For example, assume that a
hypothetical Investor pays an aggregate purchase price of $130,000, and
purchases 100,000 shares, and then sells 50,000 of those shares. If
the Registration Statement then ceases to be effective as set forth above,
the
amount of liquidated damages will be five percent (5%) of $65,000 (the purchase
price relating to the remaining 50,000 shares held by the Investor), or $3,250
(65,000 x 0.05 = 3,250).
4. Participation
in Future Offerings. If at any time within two years from the
date of the Agreement, the Company proposes to file (i) a prospectus supplement
to an effective shelf registration statement, including the Registration
Statement, or (ii) any other registration statement in an underwritten offering
for its own account, then, as soon as practicable, the Company shall give
notice
of such proposed offering or filing to the Investors and such notice shall
offer
such Investor the opportunity to include in such underwritten offering or
other
registration statement such number of Purchased Shares as such Investor may
request in writing.
5. Expenses.
The Company will pay all costs, fees and expenses incurred in connection
with
the Company’s compliance under this letter to effect the registration of the
Purchased Shares, including, without limitation, in connection with the
preparation, filing and maintenance of the Registration Statement.
6. Entire
Agreement. This letter agreement contain the entire agreement of
the parties with respect to the subject matter hereof and supersede all other
prior agreements and undertakings with respect to the subject matter
hereof.
7. Assignment. The
foregoing terms are exclusively for the benefit of the Investors with respect
to
the Purchased Shares. Accordingly, such terms shall not, directly or
indirectly, be transferable or assignable to or for the benefit of any other
person without the prior written consent of the Company.
8. Confidentiality.
The Investors hereby agrees to maintain the confidentiality of this letter
agreement and the terms and, except as required by law, not to disclose this
letter agreement or the terms to any other person (other than its professional
advisers and the Sellers in connection with the transactions contemplated
by
this letter agreement and the Agreement) without the prior written consent
of
the Company.
9. Governing
Law. THIS LETTER AGREEMENT, AND ANY CLAIM, ISSUE OR DISPUTE
ARISING OUT OF THIS LETTER AGREEMENT (WHETHER OR NOT SUCH CLAIM, ISSUE OR
DISPUTE IS CONTRACTUAL IN NATURE), WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, NOTWITHSTANDING ANY OTHERWISE
APPLICABLE CONFLICTS OF LAW PRINCIPLES.
10. Waiver,
Modification and Amendment. Any amendment, waiver, discharge or
termination of this letter agreement may be effected only by a written
instrument signed by the parties hereto.
11. Section
Headings and References. The section headings are for the
convenience of the parties and in no way alter, modify, amend, limit r restrict
the contractual obligations of the parties.
12. Counterparts. This
letter agreement may be signed in any number of counterparts, each of which
shall be deemed to be an original hereof. This letter agreement may
be executed by facsimile signatures.
[remainder
of page intentionally blank]
Kindly
confirm receipt of this letter
agreement and its terms by countersigning a copy of this letter in the space
provided below and returning it to VATAS by facsimile at your earliest
convenience.
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VATAS
HOLDING GMBH
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By:
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VATAS
Holding GmbH
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By:
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/s/
Xxxxx
Xxxxxxx
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Name:
Xxxxx Xxxxxxx
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Title:
Managing Director
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Accepted
and agreed this 6th day of July, 2007
REMOTEMDX,
INC.
By: /s/ Xxxxxxx
X. Xxxxx
Name: Xxxxxxx
X. Xxxxx
Title:
CFO
