AGREEMENT
THIS AGREEMENT ("Agreement") is entered into effective April 2, 2003,
by and among RemoteMDx, Inc. (the "Company") and ▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"),
▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), and ADP Management Corporation ("ADP"). The parties
agree as follows:
RECITALS
WHEREAS, ADP, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ have heretofore extended and advanced
credit to the Company, secured or guaranteed personally certain of the Company's
debts and obligations in excess of $5,000,000 with personal assets, and
otherwise facilitated the Company's relationships with funding sources,
investors and investment banking firms; and
WHEREAS, the Company owes ADP approximately $709,986 of principal, together
with accrued interest as of the date hereof; and
WHEREAS, the Company owes third party creditors approximately $4,331,625,
as shown in Exhibit A; and
WHEREAS, the Company has contingent liabilities of $736,000, as shown in
Exhibit B; and
WHEREAS, the Company desires to have ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and ADP facilitate an
immediate financing through a third party of $500,000 through the sale of common
stock by the Company at a price of $0.54 per share; and
WHEREAS, ▇▇▇▇▇▇▇ is the Company's Chairman and CEO and ▇▇▇▇▇▇ is
Co-Chairman and as a group ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and ADP beneficially own in excess of
40% of the common equivalent shares of the Company on a fully-diluted basis; and
WHEREAS, the parties wish to enter into an agreement pursuant to which the
debt of the Company will be significantly reduced and it will obtain releases
from creditors and will fully satisfy its obligations to ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and ADP
in anticipation of a proposed restructuring of the Company that will include an
equity raise and the listing of the Company's securities on a stock market.
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
AGREEMENT
1. Allocation of Shares. The Company shall reserve and issue a total of
8,900,000 shares of common stock in connection with the conversion of debt and
releases obtained as described in this Agreement. These shares will, when
issued, be fully paid and non-assessable. The shares will be restricted shares,
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meaning that they will not be freely transferable and may not be transferred
except pursuant to an effective registration statement or an exemption from
registration under the Securities Act of 1933, as amended. The shares will be
issued from time to time as agreed by the Company in satisfaction of obligations
on terms to be negotiated by ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ acting on behalf of the Company
as provided in this Agreement, subject to approval by the Audit Committee of the
Board of Directors, as provided in paragraph 2.
2. Conversion and Assumption of Debt. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall act on
behalf of the Company to negotiate the release and/or conversion of the
Company's outstanding long- and short-term debt into common stock. In connection
with such transactions, if required to facilitate the release of the Company
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ may at their discretion assume or cause ADP to assume an
obligation of the Company on terms negotiated and agreed by the creditor;
provided, that such terms include in every instance the immediate, complete and
unconditional release of the Company from any further liability or obligation
thereunder. It is understood, however, that the preferred method of
restructuring the outstanding obligations will be to convert them into common
stock. The shares of common stock to be used for all purposes under this
Agreement shall be the 8,900,000 shares reserved and allocated under paragraph 1
above. All documentation relating to the settlement of debt, conversion, release
of liens, and other related matters under this Agreement shall be subject to the
approval of the Audit Committee of the Board of Directors of the Company and of
counsel to the Company. No agreement or understanding with any creditor will be
binding upon the Company until such approval has been obtained and the agreement
and related instruments and documents executed and delivered by persons
authorized thereunto by the Audit Committee. Upon approval, a schedule of all
such transactions involving assumption or conversion of debt under this
paragraph 2 will be prepared by the Company and ADP, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ and
appended to this Agreement as Exhibit C, by this reference incorporated in and
made a part of this Agreement.
3. Conversion and Release of Obligations Owing to ADP, ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇. ADP, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ hereby release the Company from any and all
obligation of payment under all outstanding loans, advances and other agreements
involving the extension of credit or the guarantee of corporate debt or
obligations, including, without limitation, the obligations of the Company that
might be assumed by ADP, ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ under paragraph 2 above. Such
obligations shall be deemed paid in full and in payment thereof and in payment
of the amounts owed to ADP totaling $709,986, as well as all other concessions
made by ADP, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ under this Agreement, the Company hereby cancels
that certain subscription receivable, in the amount of $338,300, payable by MK
Financial, and the Company agrees that the balance of 8,900,000 shares shall be
issued to ADP, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ or its respective assignees.
4. Assignment of Certificates of Deposit. ▇▇▇▇▇▇▇ hereby irrevocably
assigns to the Company all ownership, right, title and interest in and to those
certificates of deposit totaling $350,000 that have been pledged by ▇▇▇▇▇▇▇ as
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collateral for the Company's credit line and related obligations at Zions Bank.
▇▇▇▇▇▇▇ agrees to execute and deliver to the Company and to said bank such
documentation as may reasonably be required to effect the transfer of the
certificates of deposit as agreed herein.
5. Successors. This Agreement shall be binding upon and inure to the
benefit of the respective heirs, personal representatives, successors and
assigns of the parties. No party shall delegate its or their duties or
obligations hereunder without the written consent of the other parties, which
consent shall not be unreasonably withheld.
6. Governing Law. The rights and obligations of the parties pursuant to
this Agreement shall be governed by and construed in accordance with the laws of
the State of Utah, without giving effect to any choice or conflict of law rule
or provision (whether of the State of Utah or other jurisdiction) which would
cause the application of any law or rule other than of the State of Utah.
7. Severability. Should any term or provision of this Agreement or the
application thereof to any circumstance, in any jurisdiction and to any extent,
be invalid or unenforceable, such term or provision shall be ineffective as to
such jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable such term or provision in any other
jurisdiction, the remaining terms and provision of this Agreement or the
application of such terms and provisions to circumstances other than those as to
which it is held invalid or unenforceable.
8. Entire Agreement. This Agreement, together with its exhibits,
constitutes the entire agreement among the parties pertaining to the subject
matter herein and supersedes all prior and contemporaneous agreements,
representation and understandings of the parties in connection with the
transactions contemplated hereby. No supplement, modification, or amendment
shall be binding unless executed in writing by all parties.
9. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be considered an original instrument and all
of which together shall be considered one and the same agreement. Delivery and
receipt of executed pages by facsimile transmission shall constitute effective
and binding executing and delivery of this Agreement.
10. Attorneys' Fees. Should any litigation be commenced between the
parties or their representatives concerning any provision of this Agreement or
the rights and duties of any person in relation thereto, the party prevailing in
such litigation shall be entitled, in addition to such other relief as may be
granted, to a reasonable sum as and for its attorneys' fees and costs and court
costs in such litigation which shall be determined by the court in such
litigation or in a separate action brought for that purpose.
11. Approval and Authority. This Agreement has been approved on behalf
of the Company and the person signing below on the Company's behalf has been
authorized to do so by the Audit Committee of the Board of Directors of the
Company.
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IN WITNESS WHEREOF, the parties hereto have signed or caused this Agreement to
be signed in their respective names as of the day and date first above written.
"Company" "ADP"
REMOTEMDX, INC. ADP MANAGEMENT CORPORATION
By: /s/ By: /s/
---------------------------------- --------------------------------
Its: Its:
-------------------------------- --------------------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Individually ▇▇▇▇▇ ▇▇▇▇▇▇, Individually
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EXHIBIT A
Creditor Name Amount Assumed or Converted
▇▇▇▇▇▇▇▇▇▇ $ 800,000
Lintel Corporation 700,000
BADA Financial 436,524
▇▇▇▇▇▇▇ 364,000
Technology Financing 725,000
▇▇▇▇▇▇▇▇▇▇▇▇ 200,000
▇▇▇▇▇ 150,000
▇▇▇▇▇▇▇▇ 50,000
BADA Interest 13,347
▇▇▇▇▇▇ ▇▇▇▇▇ Trust 300,000
▇▇▇ ▇▇▇▇▇▇ 100,000
▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇ 100,000
ADP Management 350,000
Other Interest 42,750
-------------
TOTAL $ 4,331,621
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EXHIBIT B
Redeemable Shares/Contingent Liability
Tobias Quessar $ 96,000
▇▇▇▇▇▇ ▇▇▇▇▇ Trust 135,000
East Bay 300,000
Tennenhaus 175,000
-------
TOTAL $ 736,000
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EXHIBIT C
Shares Converted to Equity
Entity $ Amount Share Amount
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ $200,000 151,334
▇▇▇▇ ▇▇▇▇▇ $150,000 113,500
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $ 50,000 37,834
Shares converted to Equity with a contingent put option that ADP has assumed
Entity $ Amount Share Amount
Technology Financing $725,000 483,333
Debt assumed by ADP with the Company being fully released
Entity $ Amount
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $ 800,000
Bada Financial 436,524
▇▇▇▇▇▇▇ 364,000
▇▇▇▇▇▇ ▇▇▇▇▇ Trust 300,000
▇▇▇ ▇▇▇▇▇▇ 100,000
▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇ 100,000
Pledged CDs (ADP Management) 350,000
------------
Total $ 2,450,524
Debt assumed by ADP with the Company not being fully released
Entity $ Amount
Lintel Corporation $700,000
