REMOTEMDX, INC. EXCHANGE AGREEMENT
Exhibit
10-2
REMOTEMDX,
INC.
This
Exchange Agreement (the “Agreement”) is
entered into as of November __, 2009 by and between RemoteMDx, Inc., a Utah
corporation (the “Company”), and
Tennenhaus (“Debt
Holder”).
R E C I T A L
S
A. The
Company, through its Board of Directors, has decided to authorize and issue a
new series of stock to be designated Series D Convertible Preferred Stock of the
Company (“Series D
Convertible Preferred Stock”).
B. The
Company, through its Board of Directors, has decided to offer the Debt Holder
the right to exchange and convert each $1,000 of the outstanding debt of the
Company held by Debt Holder (hereinafter, the “Obligations”) for one
(1) whole share of Series D Convertible Preferred Stock.
C. The
rights of the Series D Convertible Preferred Stock shall be as set forth in the
Certificate of Designation of the Relative Rights and Preferences of the Series
D Convertible Preferred Stock of the Company (the “Designation”).
NOW
THEREFORE, in consideration of the foregoing and the mutual promises herein
contained, the parties agree as follows:
A G R E E M E N
T
1. Exchange of Obligations for
Series D Convertible Preferred Stock. Subject to the terms and conditions
hereof, Debt Holder and the Company hereby exchange all Obligations held by the
Debt Holder as follows: (i) for each $1,000 owed under such Obligations,
including accrued and unpaid interest through the date of conversion and
exchange, one (1) whole share of Series D Convertible Preferred Stock and
(ii) cash for the balance of such Obligations remaining after conversion
under (i). Fractional shares of the Series D Convertible Preferred Stock shall
not be issued. This Agreement shall only become effective and
accepted by the Company at such time as the Company has sold shares of the
Series D Convertible Preferred Stock for aggregate proceeds of a minimum of
$2,600,000.
2. Closing. Upon
(a) acceptance and execution of this Agreement by the Company, and (b) surrender
of all instruments evidencing the Obligations marked “Paid in Full” or otherwise
evidencing the cancellation and satisfaction thereof, the Company shall issue to
the Debt Holder that number of shares of Series D Convertible Preferred Stock
indicated opposite the Debt Holder’s name on the attached Exhibit
A.
3. Representations and
Warranties of the Company. The Company represents and warrants to the
Debt Holder that (a) the shares of Series D Convertible Preferred Stock
have been duly authorized and validly issued and are fully paid and
non-assessable, and (b) this Agreement has been duly authorized, executed
and delivered by the Company, and this Agreement constitutes the valid and
legally binding obligation of the Company.
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4. Investment
Representations.
4.1 This
Agreement is made in reliance upon the Debt Holder’s representation to the
Company, which by acceptance hereof the Debt Holder hereby confirms, that the
shares of Series D Convertible Preferred Stock to be received by the Debt Holder
will be acquired for investment for the own account of the Debt Holder, not as a
nominee or agent, and not with a view to the sale or distribution of any part
thereof, and that the Debt Holder has no present intention of selling, granting
participation in, or otherwise distributing the same, but subject nevertheless
to any requirement of law that the disposition of the property of the Debt
Holder shall at all times be within the control of the Debt Holder.
4.2 The
Debt Holder understands that the Series D Convertible Preferred Stock is not
registered under the Securities Act of 1933, as amended (the “Securities Act”), on
the basis that the sale provided for in this Agreement and the issuance of
securities hereunder is exempt from registration under the Securities Act
pursuant to Section 4(2) and 3(a)(9) thereof, and that the Company’s
reliance on such exemption is predicated on the Debt Holder’s representations
set forth herein. The Debt Holder realizes that the basis for the exemption may
not be present if, notwithstanding such representations, the Debt Holder has in
mind merely acquiring shares of the Series D Convertible Preferred Stock for a
fixed or determinable period in the future, or for a market rise, or for sale if
the market does not rise. The Debt Holder does not have any such
intention.
4.3 The
Debt Holder understands that the Series D Convertible Preferred Stock may not be
sold, transferred, or otherwise disposed of without registration under the
Securities Act or an exemption therefrom, and that in the absence of an
effective registration statement covering the Series D Convertible Preferred
Stock or an available exemption from registration under the Securities Act, the
Series D Convertible Preferred Stock must be held indefinitely. In particular,
the Debt Holder is aware that the Stock may not be sold pursuant to
Rule 144 (“Rule
144”) promulgated under the Securities Act unless all of the conditions
of Rule 144 are met. Among the conditions for use of Rule 144 is the
availability of current information to the public about the
Company.
4.4 The
Debt Holder either (A) is an “accredited investor” within the meaning of
Securities and Exchange Commission (“SEC”) Rule 501 of Regulation D, as
presently in effect, or (B) (i) certifies that such Debt Holder is not
a “U.S. person” within the meaning of SEC Rule 902 of Regulation S, as presently
in effect, and that such Debt Holder is not acquiring the Series D Convertible
Preferred Stock for the account or benefit of any such U.S. person,
(ii) agrees to resell the Series D Convertible Preferred Stock 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
Series D Convertible Preferred Stock unless in compliance with the Securities
Act, (iii) agrees that any certificates for any securities issued to such
Debt Holder 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 Series D Convertible
Preferred Stock 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 Debt Holder 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.
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5. Miscellaneous
5.1 Counterparts Signature;
Facsimile Delivery. This Agreement may be executed in any number of
counterparts and delivered by facsimile, each of which shall be deemed an
original but all of which together shall constitute one and the same
instrument.
5.2 Additional Documents.
Each party hereto agrees to execute any and all further documents and writings
and to perform such other actions which may be or become necessary or expedient
to effectuate and carry out this Agreement.
5.3 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.
5.4 Severability. In case
any provision in this Agreement shall be held invalid, illegal or unenforceable,
in any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and the remaining provisions shall not in
any way be affected or impaired thereby.
5.5 Notice. Any notice
required to be given under the terms of this Agreement shall be addressed to the
Company in care of its Secretary at the office of the Company at 000 Xxxx Xxxxx
Xxxxxx Xxxxx, Xxxxx 000, Xxxxx, Xxxx 00000, and any notice to be given to Debt
Holder shall be addressed to the Debt Holder at the address given by Debt Holder
beneath the signature to this Agreement, or such other address as either party
to this Agreement may hereafter designate in writing to the other. Any such
notice shall be deemed to have been duly given when enclosed in a properly
sealed envelope or wrapper addressed as aforesaid, registered or certified and
deposited (postage or registration or certification fee prepaid) in a post
office or branch post office regularly maintained by the United
States.
5.6 Successors. This
Agreement shall be binding upon and inure to the benefit of any successor or
successors of the Company. Where the context permits, “Debt Holder” as used
in this Agreement shall include Debt Holder’s executor, administrator or other
legal representative or the person or persons to whom Debt Holder’s rights pass
by will or the applicable laws of descent and distribution.
5.7 California Securities
Law. THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT
HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
CALIFORNIA, AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY
PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL,
UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATION BY
SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE
RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH
QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
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5.8 Consent to Increase of
Authorized Capital. Debt Holder 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 of Incorporation. No further action or consent
shall be required from Debt Holder after issuance of the Series D Preferred
Stock to Debt Holder in connection with the Company’s execution and filing of an
amendment to its Articles of Incorporation to effect this increase.
[THE
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
date first above written.
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REMOTEMDX,
INC.
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a
Utah corporation
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By:
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Its:
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Chief
Executive Officer
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[Signature
Page Exchange Agreement]
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DEBT
HOLDER:
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By:
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Address:
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[Signature
Page Exchange Agreement]
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EXHIBIT
A
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Aggregate
Amount of
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No.
of Preferred
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|||||||
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Debt Holder
Name
|
Obligations
Converted
|
Shares to be
Issued
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||||||
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Xxxxxx
Xxxxxxxx
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$ | 50,000 | 50 | |||||
|
Xxx
Xxxxxx
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$ | 15,000 | 15 | |||||
|
Xxxxx
Xxxxxxxx
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$ | 110,000 | 110 | |||||
|
Xxxxx Xxxxxx
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$ | 115,000 | 115 | |||||
|
Commerce
Financial LLC
|
$ | 2,148,414 | 2,149 | |||||
|
Xxxxx
Xxxxxxx
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$ | 1,800,000 | 1,800 | |||||
|
JBD
Management LLC
|
$ | 1,000,000 | 1,000 | |||||
|
Otter
Capital
|
$ | 212,575 | 213 | |||||
|
Advance
Technology LLC
|
$ | 3,188,630 | 3,189 | |||||
|
Xxxx
Xxxxxxx Trust
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$ | 106,288 | 107 | |||||
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Xxxx
Xxxxxxx
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$ | 106,288 | 000 | |||||
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Xxxxxxxx
Xxxx Xxxxxx
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$ | 75,000 | 75 | |||||
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Group
Investment Solutions
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$ | 250,000 | 250 | |||||
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Xxxxx
Xxxxxxxx
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$ | 106,750 | 107 | |||||
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Xxxxx
Family Trust
|
$ | 205,013 | 205 | |||||
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TFT
Partners, LLC
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$ | 51,254 | 52 | |||||
|
Xxxxxxxx
Xxxxxxxx
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$ | 102,507 | 103 | |||||
|
Xxxxxx
Xxxxx Living Trust
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$ | 102,507 | 103 | |||||
|
Xxxxxxxx
Xxxxx
|
$ | 89,576 | 90 | |||||
|
Anasazi
Partners III, LLC
|
$ | 120,010 | 120 | |||||
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Xxxxxxx
Family Trust
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$ | 590,000 | 590 | |||||
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Clydesdale
Partners II, LLC
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$ | 780,000 | 780 | |||||
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Xxxxxx
X. Xxxx
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$ | 300,000 | 300 | |||||
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Xxxxxxx
X. Xxxxxxxxx
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$ | 300,000 | 300 | |||||
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Xxxx
X. Xxxxxx
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$ | 300,000 | 300 | |||||
|
Lintel
Corporation
|
$ | 902,000 | 902 | |||||
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Xxxxxx
Xxxxxxxxxx
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$ | 166,250 | 167 | |||||
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Xxxxxxx
Xxxxxxxxxx
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$ | 381,750 | 382 | |||||
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Anasazi
Partner III, LLC
|
$ | 131,570 | 000 | |||||
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Xxxxxxx
Xxxxxxx XXX, Xxxxxxxx
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$ | 131,570 | 132 | |||||
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Xxxxxxxxxxx
Xxxxx
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$ | 284,860 | 285 | |||||
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Clydesdale
Partners, LLC
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$ | 355,000 | 355 | |||||
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Xxxxx
Xxxxxxx
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$ | 153,500 | 154 | |||||
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Otter
Capital LLC
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$ | 193,000 | 000 | |||||
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Xxxxx
Xxxxxxxxx
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$ | 43,850 | 44 | |||||
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Xxx
Xxxxxxxxx
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$ | 43,850 | 00 | |||||
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Xxxxx
Xxxxxxxxx
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$ | 175,429 | 176 | |||||
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Xxxxx
& Xxxxxxx Xxxxxx
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$ | 87,714 | 88 | |||||
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Xxxxxx
& Xxxxxxx Saragenti
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$ | 87,714 | 88 | |||||
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Xxxxxxx
Xxxxxxx
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$ | 43,857 | 44 | |||||
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Xxxxx
Xxxxxx
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$ | 43,857 |
44
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|||||
| $ | 15,450,583 | 15,416 | ||||||
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