Sapinda
Exhibit 10.27
Sapinda
November
25, 2009
Xx. Xxxxx
Xxxxxxx
RemoteMDx,
Inc.
000 Xxxx
Xxxxx Xxxxxx Xxxxx
Xxxxx
000
Xxxxx,
Xxxx 00000
Dear Xx.
Xxxxxxx,
We are
pleased that RemoteMDx, Inc., a Utah corporation (the "Company") has decided to
retain Sapinda UK Limited ("Sapinda") to provide general financial advisory
services to the Company in regards to the Company's desire to restructure $16
million of debt and raise a net $9 million from existing shareholders and
others. This letter agreement ("Agreement") will confirm Sapinda's
acceptance of such retention and set forth the terms of our
engagement. This Agreement also replaces and supersedes all previous
agreements both written and verbal between the Company and Sapinda.
1. Retention. The
Company retains Sapinda as its financial advisor to provide general financial
advisory services, and Sapinda accepts such retention on the terms and
conditions set forth in this Agreement. In such capacity, Sapinda
shall: (i) familiarize itself, to the extent appropriate and feasible, with the
business, operations, properties, financial condition, management and prospects
of the Company; (ii) advise the Company on matters relating to its
capitalization; (iii) evaluate alternative financing structures and
arrangements; (iv); review the Company’s presentation and marketing materials
and other materials used to present the Company to the investment community; (v)
coordinate with the Company in marketing non-deal road shows with existing and
potential investors, and (vi) provide such other financial advisory services
upon which the parties may mutually agree (hereafter collectively referred to as
the “Advisory
Services”). It is expressly understood and agreed that Sapinda
shall be required to perform only those Advisory Services (i) as may be
necessary or desirable in connection with its engagement hereunder and therefore
may not perform all of the tasks enumerated above during the term of this
Agreement and (ii) which do not require any banking or financial services
license in the US, Germany or elsewhere. Moreover, it is understood
that Sapinda’s tasks may not be limited to those enumerated in this paragraph,
and that any additional services requested will be contemplated under a separate
agreement.
2. Information. In
connection with Sapinda’s rendering the Advisory Services hereunder, the Company
will cooperate with Sapinda and furnish Sapinda upon request with all
information regarding the business, operations, properties, financial condition,
management and prospects of the Company (all such information so furnished being
the “Information”) which
Sapinda deems appropriate and will provide Sapinda with access to the Company’s
officers, directors, employees, independent accountants and legal
counsel. The Company represents and warrants to Sapinda that all
Information made available to Sapinda hereunder will be complete and correct in
all material respects and will not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein not misleading in light of the circumstances under which such statements
are or will be made. The Company further represents and warrants that
any projections and other forward-looking information provided by it to Sapinda
will have been prepared in good faith and will be based upon assumptions which,
in light of the circumstances under which they are made, are
reasonable. The Company recognizes and confirms that Sapinda: (i)
will use and rely primarily on the Information and on information available from
generally recognized public sources in performing the services contemplated by
this Agreement without having independently verified the same and that no
information shall be furnished to outside investors by Sapinda which could be
qualified as insider information under applicable rules; (ii) does not assume
responsibility for the accuracy or completeness of the Information and such
other information; and (iii) will not make an appraisal of any assets of the
Company. Any advice rendered by Sapinda pursuant to this Agreement
may not be disclosed publicly without Sapinda’s prior written
consent. Sapinda hereby acknowledges that certain of the Information
received by Sapinda may be confidential and/or proprietary, including
Information with respect to the Company’s technologies, products, business
plans, marketing, and other Information which must be maintained by Sapinda as
confidential. Sapinda agrees that it will not disclose such
confidential and/or proprietary Information to any other companies in the
industry in which the Company is involved.
3. Indemnification. The
Company agrees to indemnify Sapinda in accordance with the indemnification and
other provisions attached to this Agreement as Exhibit A (the “Indemnification Provisions”),
which provisions are incorporated herein by reference and shall survive the
termination or expiration of this Agreement.
4. Compensation. As
consideration for Sapinda's services pursuant to this Agreement, Sapinda shall
be entitled to receive, and the Company agrees to pay Sapinda, the following
compensation:
a. In
consideration of Sapinda's rendering of the Advisory Services, the Company shall
pay a non-refundable cash retainer of $300,000.00 (the "Initial Retainer") to
Sapinda upon the signing of this Agreement and an additional $2,000,000 upon
Sapinda aiding the Company in restructuring at least $14 million of its debts
into equity and raising an additional $6,000,000 of equity ("2nd
Payment"). Thereafter, Sapinda will receive payments of $100,000 for
each $1,000,000 raised of equity up to a maximum of $700,000 ("Installment
Payments"). The Initial Retainer, 2nd Payment and Installment
Payments shall be paid to Sapinda in cash (USD) by certified check, or by wire
transfer of immediately available funds.
b. In
addition, in consideration of Sapinda's rendering of the Advisory Services, the
Company shall deliver a warrant to Sapinda (the "Advisory Warrant") to purchase
4,000 RemoteMDx Series D Preferred Shares ("Preferred Shares"). Such
Advisory Warrant will be issued to Sapinda upon the execution of this Agreement,
and shall provide, among other things, that the Advisory Warrant shall (i) be
exercisable at an exercise price equal to $500 per share; (ii) expire four (4)
years from the date of issuance; and (iii) include such other terms as are
normal and customary for warrants of this type.
5. Expenses. In
addition to payment to Sapinda of the compensation set forth in Section 4
hereof, the Company shall promptly upon request from time to time reimburse
Sapinda for all reasonable expenses including the reimbursement of fees and
expenses paid to third parties necessary for Sapinda to assist the Company in
restructuring of its debts and raising of $13 million of new
equity. In particular, the reimbursement of expenses paid to the
consulting firm, Incucomm, for analyzing RemoteMDx's market, business plan, and
operations shall be reimbursed to Sapinda. In addition, the Company
shall reimburse Sapinda all expenses (including without limitation, fees and
disbursements of counsel and all travel and out of pocket expenses) incurred by
Sapinda in connection with its engagement hereunder. Said expenses
will be paid and not exceed as follows: December 31, 2009 expenses of $700,000;
and by the conclusion of the raise of $13,000,000 an additional amount not to
exceed $300,000.
6. Future
Rights. To the extent Sapinda shall identify third parties to
the company which subsequently invest more than $ 10 million in aggregate, the
following shall apply: As additional consideration for its services
hereunder and as an inducement to cause Sapinda to enter into this Agreement, if
at any time during the term of this Agreement or within eighteen (18) months
from the effective date of the termination of this Agreement, the Company
proposes to entrust third parties with the kind of services Sapinda has been
engaged with herein (a “Financial Advisory
Engagement”), the Company shall offer to retain Sapinda as its exclusive
advisor in connection with such Financial Advisory Engagement or other matter,
upon such terms as the parties may mutually agree, such terms to be set forth in
a separate engagement letter or other agreement between the
parties. Such offer shall be made in writing in order to be
effective. The Company shall not offer to retain any other advisor in
connection with any such Financial Advisory Engagement or other matter on terms
more favorable than those discussed with Sapinda without offering to retain
Sapinda on such more favorable terms. Sapinda shall notify the
Company within 30 days of its receipt of the written offer contemplated above as
to whether or not it agrees to accept such retention. If Sapinda
should decline such retention, the Company shall have no further obligations to
Sapinda, except as specifically provided for herein.
7. Other
Activities. The Company acknowledges that Sapinda has been,
and may in the future be, engaged to provide services as finder and advisor to
other companies in the industry in which the Company is
involved. Subject to the confidentiality provisions of Sapinda
contained in Section 2 hereof, the Company acknowledges and agrees that nothing
contained in this Agreement shall limit or restrict the right of Sapinda or of
any member, manager, officer, employee, agent or representative of Sapinda, to
be a member, manager, partner, officer, director, employee, agent or
representative of, investor in, or to engage in, any other business, whether or
not of a similar nature to the Company’s business, nor to limit or restrict the
right of Sapinda to render services of any kind to any other corporation, firm,
individual or association. Sapinda may, but shall not be required to,
present opportunities to the Company.
8. Termination; Survival of
Provisions. The term of this Agreement shall be six (6) months
commencing on the date of the execution of this
Agreement. Notwithstanding the foregoing, either Sapinda or the
Company may terminate this Agreement for any reason by observing a notice period
of fifteen (15) days to the end of a calendar month (the “Termination
Date”). In the event of such termination prior to the
completion of the six (6) month term, the Company shall pay and deliver to
Sapinda for all expenses incurred by Sapinda in connection with its services
hereunder pursuant to Section 4 hereof. Moreover, as stated in
Section 3 and 4, irrespective of when the Agreement is terminated, all such fees
and reimbursements due to Sapinda pursuant to the immediately preceding sentence
shall be paid to Sapinda on or before the Termination Date (in the event such
fees and reimbursements are earned or owed as of the Termination Date) or upon
the closing of a Financing or any applicable portion thereof (in the event such
fees are due pursuant to the terms of Section 3 and/or
hereof). Notwithstanding anything expressed or implied herein to the
contrary: (i) any agency agreement entered into between Sapinda and the Company
may only be terminated in accordance with the terms thereof, notwithstanding an
actual or purported termination of this Agreement, and (ii) the terms and
provisions of Sections 3, 4, 5 (including, but not limited to, the
Indemnification Provisions attached to this Agreement and incorporated herein by
reference), 6, 7, 8, 9, 10, 11 and 12 shall survive the termination of this
Agreement.
9. Notices. All
notices provided hereunder shall be given in writing and either delivered
personally or by overnight courier service or sent by certified mail, return
receipt requested, or by facsimile transmission, if to Sapinda, to:
Sapinda
UK Ltd.
00 Xxxx
Xxxx
Xxxxxx
X0X 0XX
Xxxxxx
Xxxxxxx
And if to
the Company, to the addresses, set forth on the first page of this Agreement,
Attention, Xx. Xxxxx Xxxxxxx. Any notice delivered personally or by
fax shall be deemed given upon receipt (with confirmation of receipt required in
the case of fax transmissions); any notice given by overnight courier shall be
deemed given on the next business day after delivery to the overnight courier;
and any notice given by certified mail shall be deemed given upon the second
business day after certification thereof.
10. Governing Law; Jurisdiction;
Waiver of Jury Trial. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be fully performed therein, without regard to conflicts
of law principles. The Company irrevocably submits to the exclusive
jurisdiction of any court of the State of New York or the United States District
Court for the Southern District of the State of New York for the purpose of any
suit, action or other proceeding arising out of this Agreement, or any of the
agreements or transactions contemplated hereby, which is brought by or against
the Company, and agrees that service of process in connection with any such
suit, action or proceeding may be made upon the Company in accordance with
Section 9 hereof. The parties hereby expressly waive all rights to
trial by jury in any suit, action or proceeding arising under this
Agreement.
11. Amendments. This
Agreement may not be modified or amended except in a writing duly executed by
the parties hereto.
12. Headings. The
section headings in this Agreement have been inserted as a matter of reference
and are not part of this Agreement.
13. Successors and
Assigns. The benefits of this Agreement shall inure to the
parties hereto, their respective successors and assigns and to the indemnified
parties hereunder and their respective successors and assigns, and the
obligations and liabilities assumed in this Agreement shall be binding upon the
parties hereto and their respective successors and
assigns. Notwithstanding anything contained herein to the contrary,
neither Sapinda nor the Company shall assign any of its obligations hereunder
without the prior written consent of the other party, provided however that
Sapinda shall be entitled to transfer its rights and duties under this agreement
to any other legal entity.
14. No Third Party
Beneficiaries. This Agreement does not create, and shall not
be construed as creating, any rights enforceable by any person or entity not a
party hereto, except those entitled to the benefits of the Indemnification
Provisions. Without limiting the foregoing, the Company acknowledges
and agrees that Sapinda is not being engaged as, and shall not be deemed to be,
an agent or fiduciary of the Company’s stockholders or creditors or any other
person by virtue of this Agreement or the retention of Sapinda hereunder, all of
which are hereby expressly waived.
15. Waiver. Any
waiver or any breach of any of the terms or conditions of this Agreement shall
not operate as a waiver of any other breach of such terms or conditions or of
any other term or condition, nor shall any failure to insist upon strict
performance or to enforce any provision hereof on any one occasion operate as a
waiver of such provision or of any other provision hereof or a waiver of the
right to insist upon strict performance or to enforce such provision or any
other provision on any subsequent occasion. Any waiver must be in
writing.
16. Counterparts. This
Agreement may be executed in any number of counterparts and by facsimile
transmission, each of which shall be deemed to be an original instrument, but
all of which taken together shall constitute one and the same
agreement. Facsimile signatures shall be deemed to be original
signatures for all purposes.
If the
foregoing correctly sets forth our agreement, please sign the enclosed copy of
this Agreement in the space provided below and return it to us.
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Very
truly yours,
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Sapinda UK
Limited
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By:
/s/ Xxxx
Xxxxxxxxxxx
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Xxxx Xxxxxxxxxxx |
Agreed
to and accepted this 25 day of November, 2009
RemoteMDx,
Inc.
By: /s/ Xxxxx X.
Derrick___________________________
Xx.
Xxxxx Xxxxxxx, CEO and Chairman
