Document:

remotemdx8k092808ex10-1.htm

    
      

      

    

    
      RemoteMDx
Separates from Operations Its Volu-Sol

      Subsidiary
as it Continues to Grow Its Offender

      Tracking
Business

      

      

      SANDY,
UT--(MARKET WIRE) — December 9, 2008 – RemoteMDx, Inc.  (OTC
BB:RMDX.OB),  a national leader in delivering patented monitoring and
integrated GPS/Cellular/RF tracking systems, which observe and track offenders
no matter where they may be, announced that on September 29, 2008, the Company
had effected the separation of the business and assets of its former subsidiary
corporation, Volu-Sol Reagents Corporation ("Volu-Sol"). As a result of steps
taken to date to accomplish the separation, the Company presently holds a
minority interest equivalent to approximately 16% of the issued and outstanding
common stock of Volu-Sol.

      

      The
separation is part of the Company's continuing efforts to focus on its core
business model of tracking, monitoring and case managing criminal offenders, and
to improve operational cash flow, overall profitability and concerted research
and development initiatives.  Over the course of approximately 12
months, the Company has taken steps to divest itself of and to separate from
Volu-Sol, its medical stain and reagents operating
division.  Strategically, both entities are now free to pursue
independent business models and unique development paths.

      

      "RemoteMDx
is focused upon the deployment and expansion of its offender management solution
that is experiencing good growth. Volu-Sol, on the other hand, is focused on
medical diagnostics and creating products that help manage the lives of the
elderly.  As RemoteMDx's management, we feel that the Company's focus
and resources must be singly centered around the growth of its offender tracking
solutions.  Through this separation both entities will better be able
to focus on success," said John Hastings, president of RemoteMDx.

      

      Since its
deployment in August 2008, over 1,900 of the Company’s new TrackerPAL II devices
have been shipped. The Company estimates that as a direct result of these
shipments, the annualized revenues from 13 of the Company’s top 25 accounts will
increase by approximately $1,800,000.  In addition, the Company has
added 30 new agencies, counties or jurisdictions as customers over the past 90
days, which the Company estimates will result in annualized incremental revenues
of approximately $4,000,000.

       

      About
RemoteMDx

       

      RemoteMDx,
through its SecureAlert subsidiary, delivers patented monitoring systems that
observe and track offenders no matter where they may be -- in their car, home or
office. SecureAlert can intervene in real-time with direct voice communication
when an offender is in violation of probation or parole, such as sex offenders
who are prohibited from entering school areas, parks, etc. Highly trained case
managers monitor the offender's activities 24/7 through satellite mapping and
computer systems. The SecureAlert programs allow convicted criminals to re-enter
society by keeping them accountable 24 hours a day, every day, while reducing
the burdens and costs carried by the criminal justice system. To learn more
about RemoteMDx, visit www.remotemdx.com.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Safe
Harbor Statement

       

      This
press release contains forward-looking statements within the meaning of Section
27A of the Securities Act and Section 21E of the Securities Exchange Act,
including future growth and earnings opportunities of the Company. Examples of
forward-looking statements in this release include references to the results of
operations during future periods, the success of implementing future phases of
the company's business plan, and the launch of new products. Actual results
could differ materially from those projected in these forward-looking
statements, which involve a number of risks and uncertainties, including the
Company's ability to retain and to promptly satisfy current backorders and other
economic, competitive, governmental, technological, regulatory, manufacturing
and marketing risks associated with the Company's business and financial plans.
The contents of this release should be considered in conjunction with the risk
factors, warnings, and cautionary statements that are contained in the Company's
most recent filings with the Securities and Exchange Commission.

       

      Non-GAAP
Financial Measures

       

      To
supplement our reporting of operating results, we use non-GAAP financial
measures (such as “annualized revenues” and “annualized incremental revenues”)
which we believe are helpful in understanding our past financial performance and
our future results. Our non-GAAP financial measures are not meant to be
considered in isolation or as a substitute for comparable GAAP measures, and
should be read only in conjunction with our consolidated financial statements
prepared in accordance with GAAP. Our management regularly uses our supplemental
non-GAAP financial measures internally to understand, manage and evaluate our
business and make operating decisions. These non-GAAP measures are among the
primary factors management uses in planning for and forecasting future
periods.

       

       

      SecureAlert,
TrackerPAL(TM) and Offender Monitoring Center are trademarks of SecureAlert.
RemoteMDx is a trademark of RemoteMDx, Inc.

       

      

      Contact:

            

           Investor/Media
Relations

           866-451-6141

           ir@remotemdx.comExhibit 10.1

 

Marquez Trust

PO Box 44354

Denver, CO  80201

 

December 9, 2008

 

Venoco, Inc.

370 17th Street, Suite 3900

Denver, CO 80202

 

Re:  Disgorgement of Profits
Under Section 16(b)

 

To the Members of the Board of Directors:

 

The Marquez Trust (“Holder”) hereby notifies Venoco, Inc.
(the “Company”) that Holder purchased 750,000 shares of the Company’s common
stock (the “Common Stock”) for $2.80 per share on December 8, 2008.  Because Holder is subject to Section 16(b) of
the Securities Exchange Act of 1934, as amended (“Section 16”), and
because Holder sold a total of 44,945 shares of Common Stock on July 14,
2008 for a weighted-average price of $24.0005 per share, Holder understands it
is obligated to pay to the Company the profits realized in connection with such
transactions as calculated pursuant to Section 16.  Holder has calculated such profits, taking
into account certain transaction costs incurred, to be $949,249.67, and hereby
agrees to promptly pay such amount to the Company. We understand that the
company will not assert any claims against Holder in connection with the
foregoing.  Please indicate your
agreement to the terms hereof by signing below.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  /s/ Timothy Marquez

  
	
   

  	
   

  
	
   

  	
  Timothy Marquez

  
	
   

  	
   

  
	
   

  	
   

  
	
  Accepted
  and agreed this 9th day of December, 2008

  	
   

  
	
   

  	
   

  
	
  Venoco, Inc.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Timothy A. Ficker

  	
   

  
	
  Name:
  Timothy A. Ficker

  	
   

  
	
  Title:
  CFOExhibit 10.1

 

THIRTY SECOND AMENDMENT TO LOAN AND SECURITY
AGREEMENT

 

THIS THIRTY SECOND AMENDMENT TO LOAN AND
SECURITY AGREEMENT (this “Amendment”) is dated as of December 9,
2008 between BRAD FOOTE GEAR WORKS, INC. f/k/a BFG Acquisition Corp., an
Illinois corporation (“Borrower”) and BANK OF AMERICA, N.A., a national banking
association, as successor by merger to LaSalle Bank National Association f/k/a
LaSalle National Bank f/k/a LaSalle Bank NI (“Lender”).

 

WHEREAS, Borrower
and Lender have entered in that certain Loan and Security Agreement dated as of
January 17, 1997, as amended by those certain letter amendments dated February 28,
1997 and July 23, 1997 and those certain Third, Fourth, Fifth, Sixth,
Seventh, Eighth, Ninth, Eleventh, Twelfth, Thirteenth, Fourteenth, Fifteenth,
Sixteenth, Seventeenth, Eighteenth, Nineteenth, Twentieth, Twenty-First,
Twenty-Second, Twenty-Third, Twenty-Fourth, Twenty-Fifth, Twenty-Sixth,
Twenty-Seventh, Twenty-Eighth, Twenty-Ninth, Thirtieth and Thirty-First
Amendments to Loan and Security Agreement dated as of March 30, 1998, December 1,
1998, June 1, 1999, December 19, 2000, May 1, 2001, July 1,
2001, April 30, 2002, April 29, 2003, July 3, 2003, April 29,
2004, November 15, 2004, April 29, 2005, June 15, 2005, February 1,
2006, April 29, 2006, November 10, 2006, January 8, 2007, April 29,
2007, June 30, 2007,  October       ,
2007, October 18, 2007, November 1, 2007, January 15, 2008, January 31,
2008,  April       ,
2008, June 30, 2008, August 30, 2008 and September 29, 2008,
respectively, and that certain letter amendment (herein, the “Tenth Amendment”)
dated October 17, 2002 (such agreement, as so amended, the “Loan Agreement”)
with regard to the following loans made by Lender to Borrower: (i) a
$10,000,000.00 revolving line of credit loan (the “Revolving Loan”), (ii) a
consolidated term loan in the original principal sum of $7,899,332.98 (the “Term
Loan”), (iii) an $11,000,000.00 non-revolving equipment line of credit
loan with term conversion feature (the “Equipment Loan”), (iv) a
$9,000,000.00 non-revolving equipment line of credit loan with term conversion
feature (the “Equipment Loan No. 2”) and (v) all other Indebtedness
(as defined in the Loan Agreement); and

 

WHEREAS, Lender has
been asked to  (i) reduce the amount of the
Revolving Loan from $10,000,000.00 to $7,000,000.00; (ii) waive Borrower’s
violation of certain financial covenants set forth in the Loan Agreement; (iii) modify
the interest rate charged on the Term Loan, the Equipment Loan and the
Equipment Loan No. 2; and (iv) make certain other modifications
thereto as described below; and

 

WHEREAS, Lender has
agreed to the foregoing loan requests provided, among other conditions, that
Borrower executes and delivers this Amendment and complies with its terms;

 

1

 

NOW, THEREFORE, for
valuable consideration, the receipt of which is hereby acknowledged, and in
consideration of the foregoing premises, the parties hereto agree as follows:

 

1.             The capitalized
terms used herein without definition shall have the same meaning herein as such
terms have in the Loan Agreement.

 

2.             The definitions of “Commitment
Amount” and “Revolving Loan” in Section 1.1 of the Loan Agreement, are
each amended in their entirety to read as follows:

 

“Commitment Amount”
shall mean, as of any applicable date of determination, Seven Million and
00/100 ($7,000,000.00) Dollars.

 

“Revolving Loan”
shall mean the $7,000,000.00 revolving line of credit loan extended by the
Lender to the Borrower under Section 2 of this Agreement, and any and all
extensions, renewals, amendments, modifications, refinancings, conversions,
consolidations and increases thereof or thereto.

 

3.             The first sentence
of the first paragraph in Section 2.3 of the Loan Agreement is amended to
read as follows:

 

“2.3    Revolving
Note.  The Revolving Loan shall be
evidenced by an amended and restated renewal revolving note, executed by the
Borrower, dated December 9, 2008 and payable to the Lender on January 15,
2009, and in the principal sum of Seven Million and 00/100 ($7,000,000.00)
Dollars (the “Revolving Note”).”

 

Hereafter, all references in the Loan Agreement and in this Amendment
to the term “Revolving Note” shall be deemed to refer to the aforesaid amended
and restated renewal revolving note dated December 9, 2008 in the
principal sum of $7,000,000.00, executed by Borrower, payable to the order of
Lender on January 15, 2009, together with interest payable monthly as
therein described.

 

4.             Lender hereby
waives Borrower’s violation of the following covenants set forth in the Loan
Agreement: (i) Borrower’s violation of the Cash Flow Coverage covenant set
forth in Section 14.1 (e) of the Loan Agreement for the fiscal
quarter ended September 30, 2008, and (ii) Borrower’s violation of
the Minimum EBITDA covenant set forth in Section 14.1 (f) of the Loan
Agreement for the nine month period ended September 30, 2008.  Said waivers are limited solely to such
specific covenant violations for such periods, and shall not waive, suspend, or
affect any other default by Borrower under the Loan Agreement, and Lender
expressly reserves all of its rights and remedies with respect to any such
other default(s).

 

2

 

5.             Section 2 of
the Loan Agreement is hereby amended to add the following new last paragraphs
thereto:

 

“Borrower hereby represents to the Lender that the outstanding
principal balance of the Revolving Loan was paid down by the amount of Three
Million Dollars ($3,000,000.00) from a loan made by Broadwind Energy, Inc.,
which funds were paid to the Lender on December 8, 2008, and Borrower
further covenants and agrees that the Borrower will not repay any portion of
such loan to Broadwind Energy, Inc. without the prior written consent of
the Lender.  The Lender hereby consents
to such debt and agrees that the limitations on Indebtedness owed to or by
Affiliates set forth in Section 14.1 shall not be deemed to prohibit or
apply to such loan.

 

Borrower covenants to the Lender that Borrower will immediately conform
its monthly Borrowing Base Certificate to the Lender’s field examiner
recommended borrowing base calculation dated September 30, 2008, a copy of
which has previously been delivered to Borrower.”

 

6.             The Borrower
acknowledges and agrees that the Loan Agreement is and as amended hereby shall
remain in full force and effect, and that the Collateral is and shall remain
subject to the lien and security interest granted and provided for by the Loan
Agreement as amended hereby, for the benefit and security of (a) all
obligations and indebtedness heretofore, now or hereafter owed by Borrower to
Lender, including, without limitation, the indebtedness evidenced by the
Revolving Note, the Term Note, the Equipment Note, the Equipment No. 2  and all other Indebtedness (including,
without limitation, the repayment of all sums when due under the Subsidiary
Guaranty).

 

7.             Without limiting
the foregoing, the Borrower hereby agrees that, notwithstanding the execution
and delivery hereof, (i) all rights and remedies of the Lender under the
Loan Agreement, (ii) all obligations and indebtedness of the Borrower
thereunder, and (iii) the lien and security interest granted and provided
for thereby are and as amended hereby shall remain in full force and effect for
the benefit and security of all obligations and indebtedness of the Borrower
thereunder, including, without limitation, the indebtedness evidenced by the
Revolving Note, the Term Note, the Equipment Note, the Equipment Note No. 2
and all other Indebtedness (including, without limitation, the repayment of all
sums when due under the Subsidiary Guaranty), it being specifically understood
and agreed that this Amendment shall constitute and be an acknowledgment and
continuation of the rights, remedies, lien and security interest in favor of
the Lender, and the obligations and indebtedness of the Borrower to the Lender,
which exist under the Loan Agreement as amended hereby, each and all of which
are and shall remain applicable to the Collateral.

 

This Amendment confirms and assures a lien and continuing first
priority security interest in the Collateral heretofore granted in favor of the
Lender under the Loan Agreement, and nothing contained herein shall in any
manner impair the priority of such lien and security interest.

 

8.             In order to induce
Lender to enter into this Amendment, the Borrower hereby represents and
warrants to the Lender that as of the date hereof, each of the representations
and warranties

 

3

 

set forth in the Loan Agreement, as amended hereby, are true and
correct in all material respects and the Borrower is in full compliance with
all of the terms and conditions of the Loan Agreement, as amended hereby, and
after giving effect to this Amendment no Event of Default or Default has
occurred and is continuing.

 

9.             Except as
specifically amended and modified hereby, all of the terms and conditions of
the Loan Agreement shall stand and remain unchanged and in full force and
effect.  This instrument shall be
construed and governed by and in accordance with the laws of the State of
Illinois (exclusive of choice of law principles).

 

10.           Borrower agrees to
concurrently pay to Lender a $25,000.00 covenant waiver fee for the financial
covenant waivers set forth above.   Borrower
agrees to pay the Lender for an updated equipment appraisal being ordered by
the Lender on Borrower’s equipment.   In
addition, Borrower further agrees to reimburse the Lender for its reasonable
legal fees incurred in documenting the aforesaid covenant waivers, the
modification of the Borrower’s promissory notes, and all other all other loan
modifications hereinabove described, and any updated search fees and other
out-of-pocket costs incurred by the Lender in connection herewith.

 

(The
signature page follows.)

 

4

 

IN WITNESS WHEREOF, the parties have entered into this Thirty-Second
Amendment to Loan and Security Agreement as of date first above written.

 

Borrower:

 

BRAD FOOTE GEAR WORKS, INC.

 

 

	
  By:

  	
  /s/

  	
  Ralph Placzek

  	
   

  
	
   

  	
  Ralph Placzek

  	
   

  
	
  Title:

  	
  Vice President of Finance

  	
   

  

 

 

Lender:

 

BANK OF AMERICA, N.A.,

a national banking association

as successor by merger to LaSalle Bank

National Association

 

 

	
  By:

  	
  /s/

  	
  Katherine Novey

  	
   

  
	
   

  	
  Katherine Novey

  	
   

  
	
  Title:

  	
  Senior Vice President

  	
   

  

 

5

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