Exhibit 10.22
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THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT MAY NOT
BE TRANSFERRED IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY COMPARABLE STATE LAW, OR AN EXEMPTION THEREFROM UNDER SUCH
ACT. THIS WARRANT AND SUCH SHARES MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH THE
CONDITIONS SPECIFIED IN THIS WARRANT
RemoteMdx, Inc.
COMMON STOCK PURCHASE WARRANT
Warrant Holder: VATAS HOLDING GMBH
Date of Grant: November 9, 2006
Number of Covered Shares: 7,000,000
Exercise Price Per Share: $2.00
Term: November 8, 2009
Effective as of November 9, 2006, RemoteMdx, Inc., a Utah
corporation (the "Company"), for value received, and pursuant to that certain
Securities Purchase Agreement dated as of November 9, 2006, by and between the
Company and VATAS Holding GmbH, a German limited liability company (the
"Holder"), hereby certifies that Holder is entitled to purchase from the
Company, at such times and in such amounts as are permitted herein, Seven
Million (7,000,000) duly authorized shares of the Common Stock, par value $.0001
per share, of the Company (the "Warrant Stock") at a purchase price per share of
$2.00 per share (the "Purchase Price"), all subject to the terms and conditions
set forth below.
1. Exercise of Warrant.
1.1. Manner of Exercise. Holder may, at its option, exercise this
Warrant, in whole or in part, during normal business hours on any business day
by surrendering this Warrant to the Company at the Company's principal office,
accompanied by an executed subscription agreement in substantially the form
annexed hereto as Exhibit "A", as such form may be modified in the discretion of
the Company to comply with any applicable federal or state securities laws, and
by payment, in cash or by certified or official bank check payable to the order
of the Company, or by any combination of such methods, in the amount obtained by
multiplying (a) the number of shares of Warrant Stock designated in such
subscription by (b) the Purchase Price, whereupon Holder shall be entitled to
receive the number of duly authorized, validly issued, fully paid and
nonassessable shares of Warrant Stock as is indicated on the subscription.
1.2. When Exercise Effective. Each exercise of this Warrant shall
be deemed to have been effected immediately prior to the close of business on
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the business day on which this Warrant shall have been surrendered to the
Company as provided in Section 1.1 (the "Exercise Date"), and at such time the
person or persons in whose name or names any certificate or certificates for
shares of Warrant Stock shall be issued upon such exercise shall be deemed for
all corporate purposes to have become the holder of record thereof.
1.3. Delivery of Stock Certificates. As soon as practicable after
each exercise of this Warrant, and in any event within five business days
thereafter, the Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and delivered to
Holder, a certificate or certificates for the number of duly authorized, validly
issued, fully paid and nonassessable shares of Warrant Stock to which Holder
shall be entitled upon such exercise.
1.4. Partial Exercise.
(a) Fractional Shares. In the event of any partial exercise
of this Warrant, the Company will not issue certificates for any fractional
shares of the Warrant Stock to which Holder otherwise may be entitled, and the
Company shall not be obligated to refund an amount of cash comprising the market
value of any fractional share of Warrant Stock for which the Company will not
issue a certificate.
(b) Replacement Warrant. In the event of any partial
exercise of this Warrant, at the request of Holder and upon tender of this
Warrant to the Company, the Company shall issue a new Warrant containing the
same terms and conditions as this Warrant but calling on the face thereof for
the number of shares of Warrant Stock equal to the number of shares called for
on the face of this Warrant minus the number of shares of Warrant Stock issued
upon the partial exercise of this Warrant.
2. Certain Adjustments.
2.1. Mergers, Consolidations or Sale of Assets. If at any time
there shall be a capital reorganization (other than a combination or subdivision
of Warrant Stock otherwise provided for herein), or a merger or consolidation of
the Company with or into another corporation, or the sale of the Company's
properties and assets as, or substantially as, an entirety to any other person,
then, as a part of such reorganization, merger, consolidation or sale, lawful
provision shall be made so that the holder shall thereafter be entitled to
receive upon exercise of this Warrant, during the period specified in this
Warrant and upon payment of the purchase price, the number of shares of stock or
other securities or property of the Company or the successor corporation
resulting from such reorganization, merger, consolidation or sale, to which a
holder of the Common Stock deliverable upon exercise of this Warrant would have
been entitled under the provisions of the agreement in such reorganization,
merger, consolidation or sale if this Warrant had been exercised immediately
before that reorganization, merger, consolidation or sale. In any such case,
appropriate adjustment (as determined in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the holder after the reorganization,
merger, consolidation or sale to the end that the provisions of this Warrant
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(including adjustment of the purchase price then in effect and the number of
shares of Warrant Stock) shall be applicable after that event, as near as
reasonably may be, in relation to any shares or other property deliverable after
that event upon exercise of this Warrant.
2.2. Splits and Subdivisions. If the Company at any time or from
time to time after the date of this Warrant but before expiration effects a
split or subdivision of the outstanding shares of its then outstanding Common
Stock into a greater number of shares of Common Stock, or if the Company effects
a reverse split of the outstanding shares of its Common Stock into a lesser
number of shares of Common Stock, (by reclassification or otherwise than by
payment of a dividend in Common Stock), then, and in each such case, the number
of shares called for on the face of this Warrant (or the face of any replacement
Warrant issued upon partial exercise) shall be adjusted proportionally, and the
exercise price with respect to such adjusted number of shares also shall be
adjusted proportionally.
2.3. Certificate as to Adjustments. In the case of each adjustment
or readjustment of the purchase price pursuant to this Section 2, the Company
will promptly compute such adjustment or readjustment in accordance with the
terms hereof and cause a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based to be delivered to the holder of this Warrant. The Company
will, upon the written request at any time of the holder of this Warrant,
furnish or cause to be furnished to such holder a certificate setting forth:
(a) Such adjustments and readjustments;
(b) The purchase price at the time in effect; and
(c) The number of shares of Warrant Stock and the amount,
if any, of other property at the time receivable upon the exercise of the
Warrant.
2.4. Other Notices. If at any time:
(a) the Company shall declare any cash dividend upon its
Common Stock;
(a) there shall be any capital reorganization or
reclassification of the capital stock of the Company; or consolidation or merger
of the Company with, or sale of all or substantially all of its assets to,
another corporation or other business entity; or
(b) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
(c) then, in any one or more of said cases and in
accordance with Section 7, the Company shall give (i) at least twenty (20) days
prior written notice of the date on which the books of the Company shall close
or a record shall be taken for such dividend or for determining rights to vote
in respect of any such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up, and (ii) in the case of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, at least twenty (20) days prior written notice of the
date when the same shall take place; provided, however, that the Holder shall
make a best efforts attempt to respond to such notice as early as possible after
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the receipt thereof. Any notice given in accordance with the foregoing clause
(i) shall also specify, in the case of any such dividend, the date on which the
holders of Common Stock shall be entitled thereto. Any notice given in
accordance with the foregoing clause (ii) shall also specify the date on which
the holders of Common Stock shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation,
winding-up, conversion or public offering, as the case may be.
3. Restrictions on Transfer.
3.1. Restrictive Legends. Unless the shares issued upon exercise
of this Warrant are registered under the Securities Act of 1933 and under
applicable laws of any state, each certificate for Common Stock issued upon the
exercise of any Warrant, and each certificate issued upon the transfer of any
such Common Stock, shall be stamped or otherwise imprinted with a legend in
substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES
MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF REGISTRATION, OR THE
AVAILABILITY OF AN EXEMPTION FROM REGISTRATION, UNDER THE
SECURITIES ACT OF 1933 AND APPROPRIATE STATE SECURITIES
LAWS. FURTHERMORE, NO OFFER, SALE, TRANSFER, PLEDGE OR
HYPOTHECATION IS TO TAKE PLACE UNLESS THE COMPANY RECEIVES
AN OPINION OF COUNSEL AT SHAREHOLDER'S EXPENSE, AND
SATISFACTORY TO IT, THAT AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
3.2. Notice of Proposed Transfer; Opinions of Counsel. For the
period during which the Warrant Stock is not registered by the Company under an
effective registration statement filed pursuant to the Securities Act of 1933,
the Holder shall give written notice to the Company prior to transferring such
Warrant Stock to any other person, which notice shall (a) state such holder's
intention to transfer such restricted shares and to comply in all other respects
with the transfer requirements of this Warrant; (b) describe the circumstances
of the proposed transfer in sufficient detail to enable counsel to render the
opinions referred to below, and (c) designate counsel for the holder giving such
notice. The Holder giving such notice shall submit a copy thereof to the counsel
designated in such notice and the Company will promptly submit a copy thereof to
its counsel. The following provisions shall then apply:
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(a) If (a) in the opinion of counsel for the holder
designated in the notice the proposed transfer may be effected without
registration of such shares of Common Stock under the Securities Act of 1933 and
any applicable state securities laws, and (b) counsel for the Company shall not
have rendered an opinion within 15 days after receipt by the Company of such
written notice that such registration is required, such holder shall thereupon
be entitled to transfer such shares of Common Stock in accordance with the terms
of the notice delivered by such holder to the Company. Each Warrant or
certificate, if any, issued upon or in connection with such transfer shall bear
the appropriate restrictive legend set forth in Section 3.1, unless in the
opinion of each such counsel such legend is no longer required to insure
compliance with the Securities Act. If for any reason counsel for the Company
(after having been furnished with the information required to be furnished by
clause (a) of this Section 3.2) shall fail to deliver an opinion to the Company
as aforesaid, then for all purposes of this Warrant the opinion of counsel for
the Company shall be deemed to be the same as the opinion of counsel for such
holder.
(b) If in the opinion of either or both of such counsel the
proposed transfer may not legally be effected without registration of such
shares of Common Stock under the Securities Act of 1933 or applicable state
securities laws (such opinion or opinions to state the basis of the legal
conclusions reached therein), the Company will promptly so notify the holder
thereof and thereafter such holder shall not be entitled to transfer such shares
of Common Stock until receipt of a further notice from the holder under Section
3.2 above or until registration of such shares of Common Stock under the
Securities Act or applicable state law has become effective.
4. Reservation of Shares. The Company will at all times reserve
and keep available, solely for issuance and delivery upon the exercise of the
Warrants, the number of shares of Warrant Stock that would be issuable upon the
exercise of all Warrants at the time outstanding. All such shares shall be duly
authorized and, when issued upon such exercise, shall be validly issued, fully
paid and nonassessable with no liability on the part of the holders thereof.
5. Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft of destruction of any Warrant,
upon delivery of indemnity reasonably satisfactory to the Company in form and
amount or, in the case of any such mutilation, upon surrender of such the
Company at its expense will execute and deliver, in lieu thereof, a new Warrant
of like tenor.
6. No Rights or Liabilities as Stockholder. Nothing herein shall
give or shall be construed to give the holder of this Warrant any of the rights
of a shareholder of the Company including, without limitation, the right to vote
on matters requiring the vote of shareholders, the right to receive any dividend
declared and payable to the holders of Common Stock, and the right to a pro-rata
distribution upon the Company's dissolution.
7. Notices. All notices and other communications provided for
herein shall be delivered or mailed by first class mail, postage prepaid,
addressed (a) if to the holders of any Warrant, at the registered address of
such holder as set forth in the register kept at the principal office of the
Company, or (b) if to the Company, at its principal office to the attention of
the Company's Chief Financial Officer, RemoteMdx, Inc., 000 Xxxx Xxxxx Xxxxxx
Xxxxx, Xxxxx 000, Xxxxx, Xxxx 00000, or at the address of such other principal
office of the Company as the Company shall have furnished to each holder of any
Warrants in writing, provided that the exercise of any Warrants shall be
effective only in the manner provided in Section 1.
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8. Assignment. Subject to compliance with applicable federal and
state securities laws, the Warrant and all rights hereunder may be transferred
or assigned, in whole or in part, without charge to the Holder hereof (except
for transfer taxes), upon surrender of this Warrant properly endorsed. Each
taker and holder of this Warrant, by taking or holding the same, consents and
agrees that this Warrant, when endorsed in blank, shall be deemed negotiable,
and that the holder hereof, when this Warrant shall have been so endorsed, may
be treated by the Company, at the Company's option, and all other persons
dealing with this Warrant as the absolute owner hereof for any purpose and as
the person entitled to exercise the rights represented by this Warrant, or to
the transfer hereof on the books of the Company and notice to the contrary
notwithstanding; but until such transfer on such books, the Company may treat
the registered owner hereof as the owner for all purposes.
9. Investment Representations. In connection with its acquisition
of this Warrant, Holder represents and warrants, and (unless the shares
underlying this Warrant are registered pursuant to the Securities Act of 1933)
in connection with any exercise of this Warrant Holder will represent and
warrant, as follows:
9.1. Holder is acquiring the Warrant and the Warrant Stock
(together, the "Securities") for his its own account; no other person has any
direct or indirect beneficial ownership in the Securities.
9.2. Holder is acquiring the Securities for investment, with no
present intention of distributing or selling any of the Securities or any
interest therein.
9.3. Holder has the capacity to protect its own interests in
connection with the acquisition of the Securities. It has such knowledge and
experience in financial and business matters generally, and about the Company in
particular, that it is capable of evaluating the merits and risks of its
acquisition of the Securities.
9.4. Holder acknowledges that as of the date hereof, and as of the
date of any exercise of the Warrants, it has read and analyzed, and retained
copies of this Agreement and the following documents:
(a) The most recent Annual Report on Form 10-KSB of the
Company;
(b) Any and all Quarterly Reports on Form 10-Q of the
Company filed since the latest Form 10-KSB; and
(c) Any and all Current Reports on Form 8-K of the Company
filed since the latest Form 10-KSB.
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9.5. Holder has been informed and understands that there are risks
associated with purchasing the Securities, including those risks of ownership of
Common Stock of the Company identified in the Company's Annual Reports on Form
10-KSB. Holder is capable of bearing the economic risk of ownership of the
Securities including, but not limited to, the possibility of the complete loss
of the value of the Securities and the restrictions on transferability of the
Securities.
10. Modifications, Waivers and Amendments. This Warrant and any
term hereof may be changed, waived, discharged or terminated only by an
instrument in writing signed by the party against which enforcement of such
change, waiver, discharge or termination is sought.
11. Governing Law. This Warrant shall be governed by, interpreted
under and construed in accordance with the internal laws of the State of New
York, without giving effect to any choice-of-law provisions thereof that would
compel the application of the substantive laws of any other jurisdiction.
12. Titles and Headings. The titles headings of this Warrant are
inserted for convenience only and shall not be deemed to constitute a part
hereof.
13. Expiration. The Warrants granted herein shall in no event be
exercisable after November 8, 2009.
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IN WITNESS WHEREOF, this Warrant has been signed effective November 7, 2006.
REMOTEMDX, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Title: CFO
VATAS HOLDING GMBH
By: /s/ Xxxx Xxxxxxxxx
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Title: Managing Director
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EXHIBIT A
SUBSCRIPTION
(To be executed by the holder of the Warrant to exercise the right to purchase
Common Stock evidenced by the Warrant)
To: Chief Financial Officer
RemoteMdx, Inc.
000 Xxxx Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
The undersigned hereby irrevocably subscribes for ___________________ shares of
the Common Stock, par value $______ per share, of RemoteMdx, Inc., a Utah
corporation, pursuant to and in accordance with the terms and conditions of a
Warrant dated effective _________________ (the "Warrant"), and tenders with the
Warrant and this Subscription Agreement payment of $_____________________ as
payment for the shares, and requests that a certificate for such shares be
issued in the name of the undersigned and be delivered to the undersigned at the
address stated below.
NAME: __________________________________________________
ADDRESS: __________________________________________________
__________________________________________________
SOCIAL SECURITY NUMBER:___________________________________
______________________________________________________________
Signed
DATED: __________________________________________________
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