DISTRIBUTION
AND LICENSE AGREEMENT
  This
Distribution and License Agreement (this “Agreement”) is made
effective May 28, 2009 (the “Effective Date”) by
and between RemoteMDx, Inc., a Utah corporation (“Licensor”), and
euromicron AG, a German corporation (“Licensee”).  Licensor
and Licensee may be referred to herein as a “party” or together as the
“parties.”
  WHEREAS,
Licensor holds all rights in certain patents (as defined below, the “Patents”) and other
intellectual property and has the right to grant the licenses contemplated by
this Agreement;
  WHEREAS, Licensor, under the
Patents, has developed and holds all rights necessary to manufacture, market and
distribute a GPS-based tracking device used by law enforcement agencies and
commonly known as TrackerPAL (as defined below, the “RemoteMDx
Product”);
  WHEREAS, concurrently with
this Agreement, Licensee has agreed to purchase certain securities from Licensor
pursuant to that Securities Purchase Agreement dated as of
May 28, 2009 (the “Securities Purchase
Agreement”), and Licensor has agreed to issue and sell such
securities;
  WHEREAS, concurrently with
this Agreement, Licensee has entered into a separate Distribution and License
Agreement with Volu-Sol Reagents Corporation (“Volu-Sol”) dated as
of May 28, 2009 (the “Volu-Sol Agreement”)
to distribute a certain GPS-based tracking device to be developed for use in the
health-care industry;
  WHEREAS, Licensor desires to
grant to Licensee, and Licensee desires to accept, an exclusive license to
manufacture, market and distribute the RemoteMDx Product  in the
Territory (as defined below), subject to the terms and conditions of this
Agreement.
  NOW, THEREFORE, in
consideration of the premises and the mutual covenants and promises set forth in
this Agreement, the legal sufficiency of which is hereby acknowledged, the
parties hereby agree as follows:
  1.           Definitions.
  .  The
following terms when used in this Agreement shall have the meanings set forth
below.
  1.1.           “Business Day” means
any day, other than Saturday or Sunday, on which commercial banks in the United
States of America are open for business.
  1.2.           “Distributors” has the
meaning set forth in Section 2.6.
  1.3.           “Exercise Date” has
the meaning set forth in Section 2.7.
  1.4.           “Implementation Plan”
has the meaning set forth in Section 3.2(c).
  1.5.           “Intellectual Property
Rights” means any and all now known or hereafter known (a) rights
associated with works of authorship throughout the world, including but not
limited to copyrights and moral rights, (b) trademarks, service marks, trade
name and logo rights and similar rights, (c) trade secret rights and know-how,
(d) patent rights, designs, algorithms and other intellectual property rights,
(e) domain names and Internet keywords and (f) all other intellectual and
industrial property rights (of every kind and nature throughout the world and
however designated), whether arising by operation of law, contract, license, or
otherwise, and (g) all registrations, initial applications, renewals,
extensions, continuations, divisions or reissues thereof now or hereafter in
force (including any rights in any of the foregoing).
  
  1.6.           “Know How” means the
accumulation of skills, processes, information, experience and documents related
to the Licensed Intellectual Property and needed to enable Licensee, itself or
through third-party sublicensees, to practice the Licensed Intellectual Property
to manufacture, service and sell the RemoteMDx Product, including, but not
limited to, any and all materials, technical information, blueprints, process
documents, drawings, CAD-CAM and other electronic files, supplier lists,
specifications, trade secrets, Know How, techniques, discoveries, processes,
procedures, methods, protocols, designs, diagrams, test results, studies, raw
material sources, data, formulation, production technology and other such
materials.
  1.7.           “Licensed Intellectual
Property” means all Intellectual Property Rights in and to the RemoteMDx
Product, including without limitation the Patents, the Licensed Trademarks, the
Product Documentation and any Product Marketing Materials.
  1.8.           “Licensed Trademarks”
means the trademarks of Licensor set forth on Exhibit B, as
amended from time to time by mutual agreement of Licensor and
Licensee.
  1.9.           “Licensee Monitoring
Center” has the meaning set forth in Section 3.2(b).
  1.10.        
“Local Communications
and Customer Service Center” has the meaning set forth in Section
3.2(a).
  1.11.         “Milestones” has the
meaning set forth in Section 2.7.
  1.12.         “Modifications” has
the meaning set forth in Section 7.5.
  1.13.         “New Trademarks” means
any trademark or trade name, whether registered or not, created by or licensed
to Licensee for use in connection with the RemoteMDx Product, but New Trademarks
excludes Licensed Trademarks.
  1.14.         “Patents” means all
patents used in the design or manufacture of the RemoteMDx Product and listed on
Exhibit A.
  1.15.         “Product
Documentation” means all designs, specifications, manuals, instructions,
drawings and other such work created by Licensor describing the manufacture and
performance of the RemoteMDx Product (including such materials relating to
Software incorporated into the RemoteMDx Product).
  1.16.         “Product Marketing
Materials” has the meaning set forth in Section 2.3.
  1.17.         “Purchase Order” has
the meaning set forth in Section 4.3.
  
  1.18.         “Qualified Developer”
has the meaning set forth in Section 2.4.
  1.19.         “RemoteMDx Product”
means the GPS-based personal tracking system used by law enforcement agencies to
track individuals subject to their jurisdiction and currently marketed under the
trademark TrackerPAL, the Software incorporated into such product, all
improvements, modifications and derivatives based on such product or Software,
and all Intellectual Property Rights in any of the foregoing, including, without
limitation, such rights in the Patents.
  1.20.         “RemoteMDx Product
Warranty” has the meaning set forth in Section 4.17.
  1.21.         “Software” means the
entire software application developed by Licensor to provide functionality to
the RemoteMDx Product and to monitor and manage the RemoteMDx Product in the
form used by Licensor as of the Effective Date (including all software and
firmware incorporated into the RemoteMDx Product), expressed in a fully compiled
or assembled series of instructions in machine language, which will guide the
operation of a processor; modifications and improvements made thereto by
Licensor and commercially released from time to time; and all documentation,
manuals, instructions and other similar work prepared by Licensor that is
reasonably necessary to permit Licensee to operate the Software in the manner
intended, as further described on Exhibit E-1, but
Software does not include Third Party Software.
  1.22.         “Source Code” means,
at any time during the Term, the then-latest version of the Software expressed
in a source or human-readable language, and all documentation, manuals,
instructions and other similar work prepared by Licensor that is reasonably
necessary to permit a skilled programmer to make changes to the Source Code as
contemplated by this Agreement.
  1.23.         “Start-up Services”
means the services provided by Licensor as set forth on Exhibits D-1, D-2,
D-3 and D-4 for the purpose of establishing one or more Licensee
Monitoring Center(s) as further described in Section 3.2(b).
  1.24.         “Sublicensees” has the
meaning set forth in Section 2.6.
  1.25.         “Supplied Product” has
the meaning set forth in Section 4.7.
  1.26.         “Term” has the meaning
set forth in Section 9.1.
  1.27.         “Territory” means the
countries listed on Exhibit C.
  1.28.         “Third Party Software”
means all software licensed by Licensor from third parties, other than open
source software, that is integrated into the Software or the RemoteMDx Product,
as set forth on Exhibit F as the
same shall be updated from time to time and in any event promptly after Licensor
obtains any new Third Party Software.
  1.29.         “Translated Materials”
means documents, Software, training materials, product materials, scripts,
technical documentation and related information that has been translated by
Licensee for use in the Territory.
  
  1.30.         “Upgrade” has the
meaning set forth in Section 3.4.
  1.31.         “Warranty Procedures”
has the meaning set forth in Section 4.17.
  2.           License
Grants.
  2.1.           Product
License.  Licensor hereby grants to Licensee (including its
present and future affiliates), and Licensee accepts, an exclusive,
sublicensable and transferable (subject to the provisions hereof) license under
the Licensed Intellectual Property to make, have made, market, distribute, sell
and otherwise commercially exploit the RemoteMDx Product in the Territory during
the Term, subject to all the terms and conditions of this
Agreement.  As used in this Agreement, “exclusive” means that Licensor
shall not, during the Term, have any right to make, have made, market,
distribute, sell or otherwise commercially exploit the RemoteMDx Product in the
Territory or to authorize any affiliate or third party to do so.
  2.2.           Trademark
Licenses.
  (a)           RemoteMDx
hereby grants to Licensee (including its present and future affiliates), and
Licensee accepts, an exclusive, sublicensable and transferable (subject to the
provisions hereof) license to use the Licensed Trademarks in connection with the
RemoteMDx Product, Product Marketing Materials relating to such Product or on
related Translated Materials in the Territory, subject to the terms and
conditions of this Agreement.  Licensee may, at its option, place
Licensed Trademarks or New Trademarks, or a combination of the foregoing, on the
RemoteMDx Product.  Notwithstanding the foregoing, RemoteMDx may use
the trademark REMOTEMDX in the Territory for general corporate purposes,
provided that such RemoteMDx Trademark is not used in connection with the
RemoteMDx Product or any product competitive similar to the RemoteMDx
Product.  Licensee acknowledges that Licensed Trademarks used in
connection with RemoteMDx Products may be visible in the Territory through the
Internet, and such display shall not be deemed a breach of this Agreement if
Licensor has not deliberately targeted customers in the Territory for the sale
of such products.
  (b)           Licensee
shall comply with Licensor’s policies and guidelines for use of the Licensed
Trademarks, as such policies and guidelines may be issued and revised from time
to time, and Licensee shall comply with proper legal standards.  The
initial or most prominent use of a Licensed Trademark in all materials shall be
followed by the appropriate trademark symbol (® or TM). Licensee
acknowledges that the good will and value of the Licensed Trademarks and
Licensor’s name may be adversely affected unless the RemoteMDx Product, Product
Marketing Materials and Translated Materials that use any Licensed Trademark
meet the quality standards of Licensor.  Upon written request from
either of the Licensor, Licensee shall submit to Licensor for review, within a
commercially reasonable time, samples of requested RemoteMDx Products, Product
Marketing Materials or Translated Materials that make use of the Licensed
Trademarks.  If so requested in writing, Licensee shall make any
reasonable changes to such materials, provided that Licensee shall have no
obligation to cease use of or destroy materials where the use of the Licensed
Trademarks does not vary materially from any trademark use guidelines that are
developed by Licensee and Licensor and where the quality of the materials is
reasonably consistent with the quality of such materials produced by or for
Licensor.
  
  2.3.           Copyright
License.  Promptly after the Effective Date and from time to
time during the Term upon reasonable written request from Licensee, Licensor
shall furnish Licensee with electronic data files of artwork and information to
create materials for use in connection with the marketing, distribution and sale
of the RemoteMDx Product (“Product Marketing
Materials”).  Licensor hereby grants to Licensee (including its
present and future affiliates), and Licensee accepts, under Licensor’s
copyrights and other Intellectual Property Rights relating to the Product
Marketing Materials, a non-exclusive, sublicensable and transferable (subject to
the provisions hereof) right to use, reproduce, prepare derivative works
(including translations) of, display and distribute the Product Marketing
Materials in the Territory during the Term in connection with the RemoteMDx
Product.  If Licensor objects in writing to any versions of the
Product Marketing Materials prepared or used by Licensee, the parties shall
cooperate in good faith to resolve Licensor’s concerns.  Licensee
agrees to place such notices on Product Marketing Materials and translated
versions thereof as are reasonably requested by Licensor to protect its
copyrights in such materials and in the Licensed Trademarks used
therein.  Nothing in this Section 2.3 shall prevent or restrict
Licensee from freely creating, distributing or using any marketing materials for
RemoteMDx Products that do not incorporate the Licensed Trademarks and that do
not infringe on Licensor’s copyrights or other Intellectual Property
Rights.
  2.4.           Software
License.
  (a)           Licensor
hereby grants to Licensee (including its present and future affiliates), and
Licensee accepts, a non-exclusive, world-wide, sublicensable and transferable
(subject to the provisions hereof) license to access, distribute, display, host,
translate into local languages in the Territory and otherwise commercially
exploit the Software in connection with the manufacture, marketing, distribution
and sale of RemoteMDx Products in the Territory.  For clarity,
monitoring services may be based outside of the Territory provided such services
are directed at RemoteMDx Products in the Territory.
  (b)           Licensor
grants to Licensee a non-exclusive, non-sublicensable (except as provided
herein) right to use the Source Code to correct, localize, adapt, revise and
update the Source Code, and to compile and distribute object and executable code
versions of the Software based upon such modified Source Code, provided
that (i) Licensee may not disclose any Source Code to any third party other
than a Qualified Developer, and (ii) other than changes to the Software to
localize it to other languages for use in the Territory and to comply with local
requirements, safety listings or other laws or regulations, Licensee shall
obtain Licensor’s consent prior to distributing RemoteMDx Products including
such modifications to any third parties.  Licensee must strictly
protect the Source Code as confidential pursuant to the terms of Section
10.  Licensee may engage reputable third-party software developers
located inside or outside the Territory who (iii) are subject to written
confidentiality and non-use agreements consistent with this Agreement
and (iv) meet the qualification requirements to be mutually agreed upon or
attached hereto as Exhibit E-2
(each, a “Qualified
Developer”) to make permitted modifications of the Source
Code.  Licensor retains the rights to the master copy of the Source
Code.
  
  2.5.           Technology
Transfer.  Licensor hereby grants to Licensee (including its
present and future affiliates), and Licensee accepts, an exclusive,
sublicensable and transferable (subject to the provisions hereof) license to the
Know How to make, have made, market, distribute, sell and otherwise commercially
exploit the RemoteMDx Product in the Territory during the Term, subject to all
the terms and conditions of this Agreement.  If this Agreement
terminates for any reason prior to the termination of the Volu-Sol Agreement,
the license granted in Sections 2.4 and 2.5 shall survive the termination of
this Agreement, without the requirement of any additional fee or payment, and
shall continue in force until the Volu-Sol Agreement terminates, including any
wind-down period provided therein.
  2.6.           Sublicenses.  Licensee
shall have the right to grant written sublicenses consistent with the terms of
this Agreement to third parties with the appropriate skills and qualifications
to exercise such sublicenses (“Sublicensees”).  Licensee
may appoint third-party distributors, resellers, dealers and sales
representatives for the RemoteMDx Product in the Territory (“Distributors”).  Licensee
shall require each Sublicensee and Distributor to agree in writing that it will
comply with the applicable restrictions of this Agreement, and shall take
commercially reasonable measures to ensure that all Sublicensees and
Distributors comply with such terms.  For purposes of clarity,
Qualified Developers alone are permitted to obtain Source Code or modify the
Software or RemoteMDx Product without Licensor’s prior written
consent.
  2.7.           Milestones; Conversion to
Nonexclusive License.
  (a)           Licensee
shall use commercially reasonable efforts to achieve the following development
milestones (the “Milestones”) on or
before the second anniversary of the Effective Date.  Licensee shall,
directly or indirectly:
  i.      
     prepare a written report describing its market
research for the RemoteMDx Product in the Territory on a regional or
country-by-country basis;
  ii.           establish
at least one Local Communications and Customer Service Center, which provides
for monitoring and tracking of in-service devices within the Territory;
and
  iii.          translate
scripts, Software, training materials and technical documentation for at least
one (1) country in the Territory as mutually agreed upon by the
parties.
  (b)           Licensor
acknowledges and agrees that achievement of the Milestones by Licensee will
require the participation and cooperation of Licensor.  Licensor shall
provide all such assistance reasonably requested.  Without limiting
the generality of the previous sentence, Licensor shall obtain manufacturing
certifications for the RemoteMDx Product in a timely manner and shall establish
the technical protocols necessary to host the Local Communications and Customer
Service Center.  Licensor acknowledges and agrees that if it causes
delays that prevent or materially hinder Licensee from achieving the Milestones,
the Exercise Date (as defined below) shall be equitably
extended.
  
  (c)           If,
by the second anniversary of the Effective Date (unless the date is extended as
provided in Section 2.7(b), the “Exercise Date”),
Licensee has not achieved the Milestones and such failure is not the result of
delays by Licensor, then Licensor shall have the right and option to convert the
licenses granted in Sections 2.1, 2.2 and 2.5 from exclusive to
non-exclusive.  Licensor shall exercise the option granted under this
Section 2.7(c) by delivering written notice to Licensee within ten (10)
Business Days after the Exercise Date.  All other terms and conditions
of this Agreement shall continue in force including, without limitation, the
terms and conditions of Sections 5 and 6.
  (d)           Licensor’s
sole and exclusive remedy for Licensee’s failure to meet the requirements of
Section 2.7(a) shall be the option granted in Section
2.7(c).  Licensor acknowledges and agrees that any such failure shall
not be deemed a breach of this Agreement.
  3.           Licensor’s
Services.
  3.1.           Transfer of Know
How.  Within thirty (30) days of the Effective Date,
Licensor shall make available and disclose to Licensee or its designated
representatives all Know How in Licensor’s possession, custody or
control.  In addition, Licensor shall promptly disclose to Licensee
all additional Know How as it becomes available during the Term of the
Agreement.
  3.2.           Establishment of Monitoring
Centers; Software.
  (a)           Licensor
shall assist Licensee in the establishment of at least one Local Communications
and Customer Service Center inside the Territory within two years of the
Effective Date.  A “Local Communications and
Customer Service Center” means a locally staffed surveillance operation
within the Territory, which will fully utilize a hosted RemoteMDx monitoring and
data center infrastructure in support of up to 1,000 in-service devices
within the Territory.
  (b)           Licensor
shall provide the Start-up Services to assist Licensee in the establishment of
one or more Licensee Monitoring Center(s) at location(s) inside or outside the
Territory.  A “Licensee Monitoring
Center” means a dedicated monitoring and data center infrastructure under
Licensee’s financial and operational control and responsibility supporting all
in-service devices throughout the Territory.  The first Licensee
Monitoring Center will be capable of supporting the monitoring and tracking of
more than 1,000 offenders utilizing the Licensor Software and Third Party
Software in a manner consistent with the functionality and performance
maintained by Licensor in its own monitoring centers at the time of
establishment of the Licensee Monitoring Center.
  (c)           Within
thirty (30) days after Licensee so requests in writing, Licensor shall
deliver to Licensee a detailed implementation plan (the “Implementation Plan”)
that sets forth the tasks and timetables required to have the first Licensee
Monitoring Center operational.  The Licensee Monitoring Center will be
deemed operational when a group of reasonably skilled technicians selected by
Licensee can demonstrate the functionality of the RemoteMDx Product in a robust
test environment suitable to show potential customers that the system can be
operated to meet their reasonable requirements, provided that the parties may
agree in writing to establish more detailed acceptance criteria.
  
  (d)           For
the Start-up Services (including, for purposes of clarity, the services provided
by RemoteMDx under the Implementation Plan), Licensee shall pay Licensor the
fees set forth on Exhibit D.
  3.3.           Software
Services.
  (a)           As
part of the Implementation Plan, Licensor shall set forth the requirements to
deliver and install the Software and Third Party Software in Licensee’s computer
environment, including specifications of all hardware required by
Licensee.  Prior to the date on which the Software is to be delivered
and installed, the parties shall agree in writing on the criteria for testing
and demonstrating that the Software is compatible and works with the RemoteMDx
Product in Licensee’s hosted environment.
  (b)           In
addition to any criteria agreed upon by the parties in writing, Licensor
warrants that, at the time the Software is delivered and installed, such
Software, including Third Party Software that is then part of Licensor’s
application, will operate in Licensee’s environment in substantially the same
way as such Software operates in Licensor’s hosted environment.  If
the Software does not meet such standards in Licensee’s hosted environment,
Licensor shall, at its own expense, correct the Software so that it functions
according to the standards provided.  If Licensor is unable to make
the required changes, Licensee may engage its own software developers, subject
to the terms and conditions of this Agreement, to make appropriate fixes to the
Software, and Licensee shall have the right to set off all such reasonable
expenses against payments required to be made by Licensee under this
Agreement.
  3.4.           Upgrades to RemoteMDx
Product and Software.  On at least a quarterly basis, Licensor
shall notify Licensee in writing of any upgrades or modifications to the
Software or the RemoteMDx Product developed by Licensor (directly or indirectly)
that have been made available to its own customers (including any bug-fixes)
(each an “Upgrade”).  Licensor
shall (a) describe such Upgrades and their purpose or functionality in
detail in such notice, and (b) without any additional charge to Licensee,
provide the Upgrade to Licensee in the format agreed upon by the parties, so
that such Upgrade may be used by Licensee according to the terms of this
Agreement.  Any Upgrade to the RemoteMDx Product or Software shall be
deemed part of the RemoteMDx Product or Software for purposes of this
Agreement.  Licensor reserves the right to modify the RemoteMDx
Product at any time.  Licensee may continue to distribute the prior
version of a RemoteMDx Product but will use reasonable efforts to adopt an
Upgrade when feasible.  If Licensor includes Third Party Software in
any Upgrade, Licensor shall use commercially reasonable efforts to ensure the
interoperability of such Third Party Software with the Software as it then
exists.
  3.5.           Additional
Assistance.  From time to time, Licensee may request the
services of Licensor for any training, technical support assistance, marketing
assistance, custom development, and other services.  Licensor shall
give reasonable consideration to such requests, and the parties will reasonably
cooperate to agree upon the assistance to be provided by Licensor, subject to
payment as described in Section 3.6.
  
  3.6.           Professional Services Rates
and Fees.  Except as expressly provided in this Agreement,
Licensee agrees to pay Licensor for any training, technical support assistance,
marketing assistance, custom development, and other services provided by
Licensor to Licensee or its customers under this Agreement at reasonable rates
agreed upon by such parties in writing.  Licensee agrees to reimburse
Licensor for its reasonable travel expenses, provided that Licensee may adopt
reasonable travel policies from time to time regarding expenses that will be
reimbursed.
  4. 
           Supply
Agreement.
  4.1.           Manufacture and
Supply.  Licensor agrees that it will supply Licensee with the
quantities of RemoteMDx Product when so requested by Licensee and as agreed upon
under a Purchase Order, subject to the terms and conditions of this Agreement
and Licensor’s reasonable inventory limitations.  For purposes of
clarity, nothing in this Section 4 shall be
construed to require Licensee to purchase any RemoteMDx Product from
Licensor.
  4.2.           Sales
Forecasts.  Within three (3) months after Licensee places
RemoteMDx Products in service with customers in the Territory, Licensee shall
provide to Licensor a written non-binding forecast for its expected sales of
RemoteMDx Products during the then-following fiscal
quarter.  Thereafter, within sixty (60) days after the beginning
of each of Licensee’s fiscal quarters, Licensee shall deliver to Licensor a
non-binding, rolling forecast of its expected orders for RemoteMDx Products in
each of the following two fiscal quarters.
  4.3.           Purchase
Orders.  Licensee may order RemoteMDx Products by submitting to
Licensor a purchase order that sets forth at minimum (a) a unique purchase order
number, (b) a description of the RemoteMDx Products to be purchased, including
any model number and all necessary technical information (including the country
in the Territory in which the unit will be deployed if applicable), (c) the
quantity of RemoteMDx Products requested, (d) the delivery address and mode of
shipment, (e) the delivery date and (f) the bill-to address (a “Purchase
Order”).  The price for any RemoteMDx Product ordered hereunder
shall be as set forth on Exhibit H
attached hereto.  This Agreement shall govern each Purchase Order, and
any conflict or inconsistency between the terms of this Agreement and a Purchase
Order shall be resolved in favor of this Agreement.  No terms in any
Purchase Order that conflict with this Agreement and no additional or
conflicting terms in any acknowledgement or acceptance from Licensor shall
govern.
  4.4.           Acceptance of Purchase
Orders.  Licensor shall notify Licensee within five (5)
Business Days of receipt of any Purchase Order setting forth either (a) its
acceptance of the Purchase Order; or (b) any proposed amendments to the
delivery date and/or quantities of the RemoteMDx Product
ordered.  Licensor shall use commercially reasonable efforts to
fulfill Licensee’s requests for RemoteMDx Product, provided that Licensor may
reject a Purchase Order if Licensee is past due on any undisputed payments
owed.  Failure by Licensor to notify Licensee within five (5)
Business Days of receipt of a Purchase Order shall be deemed acceptance of the
Purchase Order by Licensor.
  
  4.5.           Lead
Times.  Unless otherwise expressly agreed to in writing by
Licensor, Purchase Orders for RemoteMDx Products must allow for at least forty
five (45) days from the date of receipt of the Purchase Order to the date of
requested shipment of such Products, unless the number of units of RemoteMDx
Products under such Purchase Order exceeds 500, in which case the Purchase Order
must allow for at least ninety (90) days from the date of receipt of the
Purchase Order to the date of requested shipment of such Products.
  4.6.           Cancellations.  A
Purchase Order may be canceled, in whole or in part, upon written notice by
Licensee at any time prior to thirty (30) days before the applicable delivery
date(s) specified in the applicable Purchase Order.  Licensee shall
reimburse Licensor for the actual costs incurred by Licensor that are directly
related to the cancelled Purchase Order and that cannot be mitigated by Licensor
within a reasonable time through returns, reuse or other commercially reasonable
measures.  Licensee shall have no right to cancel a Purchase Order
within thirty (30) days of the delivery date specified in the applicable
Purchase Order.  In no event shall Licensee be liable for any
incidental, special, consequential or punitive damages for cancellation of any
Purchase Orders submitted under this Agreement.
  4.7.           Shipment;
Delivery.  Licensor shall ship RemoteMDx Products in accordance
with each binding Purchase Order (each such Product so shipped by Licensor
including any Software included therewith, a “Supplied
Product”).  Unless otherwise expressly agreed by Licensor, all
Supplied Product deliveries shall be made FCA Incoterms 2000, Licensor’s
place of shipment, with shipping costs and insurance paid by
Licensee.  Title to Supplied Products shall pass to Licensee upon full
payment for the Supplied Products.  Licensee shall bear all risk of
loss or damage to Supplied Products during transit, and is responsible for
filing any necessary claims with the carrier or insurance
company.  All Supplied Products will be new unless the applicable
Purchase Order expressly states that a Supplied Product is reconditioned,
provided that such reconditioned Supplied Product will remain subject to the
RemoteMDx Warranty as if it were new.
  4.8.           Inspection;
Acceptance.  Notwithstanding any written confirmation from the
supplying party, all Supplied Products supplied hereunder shall be received by
Licensee subject to inspection and performance testing in a commercially
reasonable manner.  Licensee shall have ten (10) Business Days from
the date of receipt of each shipment of the Supplied Products to determine to
its reasonable satisfaction whether the Supplied Products are of the correct
count and conform to the applicable Product Documentation (the “Inspection
Period”).  Licensee’s failure to provide notice of acceptance
or rejection (pursuant to Section 4.9 below) to Licensor prior to the end of the
applicable Inspection Period shall be deemed acceptance.  The
acceptance of any Supplied Product shall in no way limit Licensee’s rights under
any warranty or for indemnification hereunder.
  
  4.9.           Rejection.
  (a)           If
Licensee reasonably determines that the Supplied Products do not conform to the
applicable Product Documentation, Licensee may, at its option, reject the same
by giving Licensor written notice thereof by no later than the close of business
on the last day of the applicable Inspection Period.  Licensee may
hold the Supplied Products for Licensor, may require replacements of
non-conforming Supplied Products or may return any rejected Supplied Products to
Licensor for credit for the full price of the rejected Supplied
Product.  If Licensee determines that the Supplied Products are not of
the correct count (excluding a reasonable percentage of excess units shipped by
Licensor as safety stock, as agreed by the parties), Licensee shall promptly
notify Licensor.  If the number of units shipped was excessive,
Licensee may at its option return the excess units at Licensor’s
expense.
  (b)           Licensee
shall maintain a safety stock of RemoteMDx Products, segregated at the premises
of Licensee, in an amount to be agreed upon in writing from time to time by the
parties.  All safety stock shall be the property of Licensor until
Licensee elects to take ownership of and pays for such safety
stock.  Until Licensee elects to take ownership of and pay for such
safety stock, Licensor shall own and maintain such safety stock.  If
Licensor made a good faith effort to deliver all the required RemoteMDx Products
and the number of such units nevertheless was insufficient, Licensor shall have
an additional ten (10) Business Days to deliver the
shortfall.  Licensor may draw on any safety stock to satisfy the
shortfall.
  4.10.        Invoices.  Except
as expressly provided herein, Licensor shall invoice Licensee for the Supplied
Products price upon shipment of the Supplied Products under each Purchase
Order.
  4.11.        Payment.
  (a)           Payment
of undisputed amounts for Supplied Products shall be due thirty (30) days from
the date of receipt by Licensee of an invoice, provided, that if Licensee
rejects such Supplied Products pursuant to Section 4.9, and Licensor thereafter
delivers replacement Supplied Products, then payment shall be due in U.S.
dollars for such replacement Supplied Products within thirty (30) days after
receipt by Licensee of the invoice for replacement Supplied
Products.
  (b)           Notwithstanding
the payment terms of Section 4.11(a), if Licensee places a Purchase Order for
more than 500 units of RemoteMDx Products and Licensor’s third-party
manufacturers require cash prepayment before beginning such work, Licensee
agrees to pre-pay fifty percent (50%) of the estimated cost of such order, which
shall be due upon Licensor’s acceptance of the Purchase
Order.  Licensor agrees to grant to Licensee a Purchase Money Security
Interest in the pre-paid parts, and to take such actions and deliver such
documents as may be required to perfect such security
interest.  Remaining payments under such Purchase Order will be due
and payable according to the provisions of Section 4.11(a).
  
  4.12.        Quality
Standards.  Supplied Products delivered by Licensor pursuant to
this Agreement shall be of the same quality as like products sold by Licensor in
its usual channels of commerce.  Licensor acknowledges that, unless
expressly agreed in writing, Supplied Products will be manufactured to
electrical, technical and regulatory standards applicable to the country in the
Territory in which such Supplied Product will be deployed.
  4.13.        Restrictions.  For
all Supplied Products, except as expressly permitted under this Agreement,
Licensee shall refrain from doing any of the following without the prior written
consent of Licensor:
  (a)           removing
or altering, or permitting the removal or alteration of, any patent markings,
trademarks, logos, trade dress, service marks, trade names, corporate names,
written notices, serial numbers, labels, tags or other identifying marks,
symbols or legends of Licensor (including the Licensed Trademarks) or any third
party or any legal or other industry mandatory markings affixed to the Supplied
Products or their documentation, packaging or labeling; or
  (b)           affixing,
or permitting the affixing of, any of Licensee’s (or any third party’s)
trademarks, identifying marks, symbols or legends other than New Trademarks to
the Supplied Products or their packaging, or taking any other action which may
be detrimental to Licensor’s proprietary interests in the Supplied Products or
Licensor’s trademarks, logos, trade dress, service marks, trade names, domain
names, corporate names, patents, copyrights, trade secrets or any other
intellectual property rights used in connection herewith.
  4.14.        Taxes.  Licensee
shall be responsible for all sales, use, excise, value-added, and other federal,
state or local taxes, tariffs, and customs or import duties, arising out of this
Agreement (other than taxes on Licensor’s net income imposed by the
U.S.).
  4.15.        Records;
Audit.  Licensor shall maintain, for two (2) years from the
calendar year in question, adequate records concerning the manufacturing,
packaging and labeling of Supplied Products.  Licensor agrees that
Licensee may, directly or through its auditors or advisors, inspect, review and
obtain copies of such records from Licensor upon reasonable notice and subject
to confidentiality agreements reasonably satisfactory to Licensor for the
purposes of: (a) confirming that Supplied Products were manufactured in
compliance with this Agreement, and (b) that the prices charged to Licensee were
calculated correctly.  Such audits shall occur not more often than
once per year (unless the previous audit disclosed a material
underpayment).  If an audit shows Licensee overpaid for any Supplied
Product, Licensor shall promptly pay to Licensee the amount of the overpayment
plus interest of 1% per month (12% APR) or the highest amount allowed by law,
whichever is less, accruing from the date on which the overpayment
occurred.
  4.16.        Recall.  If
either party is required by a governmental authority (or voluntarily decides) to
initiate a recall of any RemoteMDx Product, whether or not such recall has been
requested or ordered by any governmental authority or agency having jurisdiction
over either party, the parties shall cooperate in good faith to manage the
recall and to allocate the costs of the recall.
  
  4.17.        Returns.  The
parties acknowledge that Licensor provides a limited manufacturer’s warranty for
Supplied Products (the “RemoteMDx Product
Warranty”).  Licensee agrees to pass the RemoteMDx Product
Warranty through to end customers without alteration except as required to
comply with local law in the Territory.  The RemoteMDx Product
Warranty in effect as of the Effective Date is attached hereto as Exhibit
G-1.  Within ninety (90) days after the Effective Date, the
parties shall cooperate in good faith to establish procedures for processing
claims by Licensee’s customers against the RemoteMDx Product Warranty and shall
attach such procedures as Exhibit G-2 (the
“Warranty
Procedures”)  Licensor shall reimburse Licensee for all its
costs relating to the processing claims against the applicable RemoteMDx Product
Warranty (but not, for purposes of clarity, relating to the process of claims of
additional warranties required by local law in the Territory).  Except
as expressly provided in this Agreement, all sales of Supplied Products by
Licensor to Licensee are final.
  5.     
       Obligations of
Licensee.
  5.1.           Due
Diligence.  During the Term, Licensee shall use commercially
reasonable, diligent efforts to promote and sell the RemoteMDx Product in the
Territory.  Such efforts will include, without limitation, actively
marketing and selling RemoteMDx Product within the Territory and maintaining
adequate inventories of RemoteMDx Product.
  5.2.           Selection of
Manufacturers.  Licensor acknowledges and agrees that Licensee,
in manufacturing the RemoteMDx Product itself, may source parts for RemoteMDx
Products or have the RemoteMDx Products made outside of the
Territory.  At the request of Licensor, Licensee will reasonably
assist in facilitating discussions between Licensor and Licensee’s manufacturers
for Licensor to purchase RemoteMDx Products from such manufacturer(s) for sale
by Licensor outside of the Territory.  Licensee agrees that Licensor
shall be permitted to purchase from approved manufacturers selected or
identified by Licensee under this Section 5.2.
  5.3.           No
Diversion.  Licensee shall use commercially reasonable efforts
to prevent the diversion of RemoteMDx Products outside of the Territory, and
Licensor shall use commercially reasonable efforts to prevent the diversion of
RemoteMDx Products by other of Licensor’s distributors or sublicensees into the
Territory.  Each party shall notify the other of diversion and take
reasonable, mutually agreed-upon actions.  Notwithstanding the
foregoing, the parties agree that it shall not be deemed a breach of this
Agreement if the parties have taken commercially reasonable efforts to prevent
diversion.  Subject to the prior written consent of Licensor, Licensee
may enter into a bulk transaction for the use of RemoteMDx Products with
customers whose operations are substantially within the Territory and shall
permit any such customer to use a portion of the RemoteMDx Products outside of
the Territory.
  5.4.           Staff.  Licensee
will have sufficient technical, sales, and marketing staff to develop a market
for the RemoteMDx Product and to handle inquiries from potential customers in
the Territory regarding the RemoteMDx Product and be able to respond within a
reasonable time to technical support inquiries and to all sales leads provided
by Licensor or others.
  5.5.           Limited
Warranty.  Licensee will ensure that a written limited
warranty, in a form consistent with the RemoteMDx Product Warranty (the “Licensee Product
Warranty”), is provided to each customer in connection with each sale of
a Product unit manufactured by Licensee and bearing a Licensed
Trademark.
  
  5.6.           Customer
Support.  Except as expressly provided in this Agreement
(including, without limitation, Section 11.3 and the Warranty Procedures),
Licensee will be responsible for and adequately provide all necessary warranty
and after-sales support to customers who purchase RemoteMDx Product from
Licensee, directly or indirectly.
  6.    
        Financial
Terms.
  6.1.           Royalties.  In
consideration for the rights and licenses granted by Licensor, Licensee will pay
to Licensor each calendar quarter a royalty as described on Exhibit H attached
hereto for each RemoteMDx Product unit during such quarter that is in service,
active and monitored in the Territory, less credits given to customers because a
unit was active and monitored but no longer in service or other such
reason.  Payment shall be made within thirty (30) days of the end the
applicable calendar quarter.  Any amounts not paid within the
stipulated time shall accrue interest at the rate of 1% per month (12% APR) or
the highest rate allowed by law, whichever is less.  Licensee’s
payment shall be accompanied by a report setting forth the number of RemoteMDx
Product units distributed by Licensee during such quarter in each country in the
Territory, and the calculation of royalties due.
  6.2.           Audit.  Licensee
shall maintain, for two (2) years from the calendar year in question, adequate
records concerning the manufacturing and distribution of RemoteMDx Products
(including RemoteMDx Products units in service but excluding records relating to
Licensee’s manufacturing processes) so that Licensor may determine that the
royalties hereunder were accurately calculated.  Licensee agrees that
Licensor may, directly or through its auditors or advisors, inspect, review and
obtain copies of such records from Licensee upon reasonable notice and subject
to confidentiality agreements reasonably satisfactory to Licensee for the
purposes of confirming that the royalties hereunder were accurately
calculated.  Such audits shall occur not more often than once per year
(unless the previous audit disclosed a material underpayment).  If an
audit shows that royalties were underpaid, Licensee shall promptly pay the
amount due plus interest as set forth above.
  7.     
       Intellectual
Property.
  7.1.           Licensed Intellectual
Property.  Licensee acknowledges that, as between Licensee and
Licensor, Licensor owns all Intellectual Property Rights in and to the RemoteMDx
Product and the Licensed Intellectual Property.  Licensee agrees not
to contest Licensor’s ownership of such Licensed Intellectual Property, and
Licensee hereby assigns to Licensor any rights it may obtain in such Licensed
Intellectual Property.  All goodwill accrued through such use of the
Licensed Trademarks shall inure exclusively to benefit of
Licensor.  Licensee further acknowledges and agrees that, as between
Licensee and Licensor, Licensor shall retain all copyrights to any Product
Marketing Material modified by Licensee (including, for purposes of clarity,
Translated Works) if such Product Marketing Material or Translated Work includes
any Licensed Trademark, and Licensee hereby assigns to Licensor all its
copyrights in such work.  Except as set forth in the preceding
sentence, as between Licensee and Licensor, Licensee shall own all rights in any
of Licensee’s modifications to the Product Marketing Material, subject to
Licensor’s ownership of the original materials.
  
  7.2.           Licensee Intellectual
Property.  Licensor acknowledges that, as between Licensee and
Licensor, Licensee owns all Intellectual Property Rights in and to any New
Trademarks.  Licensor agree not to contest Licensee’s ownership of
such New Trademarks, unless such New Trademark infringes an existing trademark
held by Licensor.  Except as provided in the previous sentence,
Licensor hereby assigns to Licensee any rights it may obtain in such New
Trademarks.
  7.3.           No Confusion. Neither
party shall adopt, use or register any words, phrases or symbols which are
identical to or confusingly similar to the other party’s trademarks, logos,
trade dress, service marks, domain names, trade names or corporate names, except
as expressly permitted herein.  Neither party shall register, nor seek
to have registered, the other party’s trademarks, logos, trade dress, service
marks, trade names, domain names or corporate names.  Except as
expressly provided in this Agreement, each party shall be solely responsible
for, and may exercise its sole discretion in, deciding whether to apply for and
prosecute applications for registration of its own trademarks, logos, trade
dress, service marks, trade names or corporate names or domain names in any
jurisdiction and whether to maintain any such registrations
therefor.
  7.4.           Patent
Marking.  Licensee shall mark all RemoteMDx Products
manufactured by Licensee (whether directly or through third parties) under the
terms of this Agreement in accordance with the applicable patent marking laws of
any country in the Territory where such RemoteMDx Products are
sold.
  7.5.           Modifications.  The
parties agree that all modifications, translations, and other derivative works
of the Software, Source Code, or Product Documentation by Licensee and its
employees and independent contractors hereunder (collectively, “Modifications”) shall
be considered a “work made for hire” under copyright law, and that all right,
title, and interest in such Modifications is and shall be owned by
Licensor.  To the extent such work for hire doctrine is inapplicable
for any reason, in consideration of the rights and licenses granted to Licensee
under this Agreement, Licensee hereby irrevocably assigns to Licensor any and
all of its right, title and interest in and to such Modifications and agrees to
execute any additional documents reasonably requested by Licensor to evidence
Licensor’s ownership of the same.  Licensee shall enter into written
contracts consistent with this Section 7.5 with employees and independent
contractors who undertake Modifications on behalf of Licensee.  All
permitted Modifications created by Licensee or under its direction shall be
subject to the license grant and other terms and conditions of this
Agreement.  On at least a quarterly basis, Licensee will notify
Licensor in writing of any significant Modifications developed by Licensee
relating to the RemoteMDx Product.  Licensee shall (a) describe such
Modifications and their purpose or functionality in detail in such notice, and
(b) if reasonably requested by Licensor, provide the Modification to the
requesting Licensor in the format agreed upon by the parties, without any
additional charge to the requesting Licensor.
  
  7.6.           Filings, Maintenance and
Renewal.
  (a)           Because
some countries require licensors to register trademarks or file a copy of this
Agreement with a government agency, Licensee shall give Licensor advance written
notice of each particular country in which RemoteMDx Products bearing a Licensed
Trademark will be distributed.  The parties agree to cooperate with
regard to the preparation and filing of any applications, renewals or other
documentation necessary or useful to protect Licensor’s Intellectual Property
Rights in the Licensed Trademarks.
  (b)           Licensor
shall have the primary right to determine whether to file or maintain
registrations for any of its Licensed Trademarks in the
Territory.  The parties shall mutually agree upon the initial
registrations to be made in the Territory, and Licensor agrees to make such
registrations at its own cost, not to exceed $25,000.  Thereafter,
Licensee may request that Licensor maintain registrations for a Licensed
Trademark for a country or class in the Territory, and Licensor shall take such
action at Licensor’s expense, provided that Licensor shall incur no additional
expense for initial registrations.  If Licensor does not wish to make
any other initial filing, Licensee may do so at its own expense; provided,
however, that Licensee shall make all such filings and registrations solely in
the name of Licensor or its designee.  Licensor shall be responsible
for all fees related to maintaining registrations.  Licensee may make
renewal filings and deduct the reasonable out-of-pocket costs actually incurred
by Licensee for maintaining registrations from royalties or other amounts
payable to Licensor under this Agreement.
  (c)           Should
local counsel of a party reasonably recommend that Licensee be appointed as a
recorded licensee of Licensor for its Licensed Trademarks in the Territory
because (i) Licensor reasonably determines that such license should be recorded
with the appropriate trademark or customs office as reasonably necessary to
protect Licensor’s rights in its Licensed Trademarks, then Licensor shall
prepare and file the necessary documents subject to Licensee’s approval, which
shall not be unreasonably withheld or delayed; or (ii) Licensee reasonably
determines that such license should be recorded with the appropriate trademark
or customs office as reasonably necessary to protect Licensee’s ability to
enforce its rights in the Territory, Licensor shall prepare and file the
necessary documents on behalf of Licensee.  Licensee agrees to sign
any documents reasonably necessary for Licensor to cause any recordals to be
terminated as to any RemoteMDx Product upon termination of the license
applicable to such Product hereunder.
  7.7.           Registering Patents in
Territory.  Licensor will use its best efforts to register in
each country in the Territory all Patents as promptly as reasonably
practicable.
  8.        
    Enforcement and Defense of
Infringement Claims.
  8.1.           Notification.  The
parties shall reasonably cooperate in providing notice to each other in writing
(a “Notice of Alleged
Infringement”) if a party becomes aware of any use of a Licensed
Intellectual Property in the Territory which may infringe on the rights therein
of Licensor.
  
  8.2.           Action by Licensor to
Enforce.  Licensor shall have the primary right, but not the
obligation, to determine whether to institute and/or pursue any proceedings to
enforce any rights in the Licensed Intellectual Property, as well as the right
to select counsel.  Licensee shall cooperate, in a commercially
reasonable manner, with Licensor in any such suit, including being joined as a
party with respect to such infringement (and execute any documents necessary to
effectuate the same) if necessary under the applicable rules of civil procedure
to effect standing, and Licensee shall be reimbursed for reasonably incurred
expenses.  Licensor will be solely responsible for the costs of such
action and will retain all recoveries and awards, provided that, prior to any
such litigation, Licensor shall offer to Licensee the option to share equally
the expenses of such action and to share equally any recoveries and
awards.  Notwithstanding any other provision to the contrary, in no
event shall Licensee be required to satisfy or comply with any settlement or
other agreement concerning its use of the Licensed Intellectual Property to
which Licensee has not consented (such consent not to be unreasonably withheld
or delayed).  If Licensor declines in writing to institute or pursue a
proceeding under this Section 8.2, Licensee may undertake such action as
provided in Section 8.3 and Licensee shall be entitled to 100% of any
recovery or award in any such action or proceeding.
  8.3.           Action by Licensee to
Enforce.  If applicable law in any jurisdiction in the
Territory requires that Licensee enforce rights in the Licensed Intellectual
Property against alleged infringers, or if Licensor declines in writing to
enforce its rights in the Licensed Intellectual Property with respect to the
alleged infringement set forth in the Notice of Alleged Infringement, Licensee
shall have the right, but not the obligation, to enforce such rights with
respect to Licensed Intellectual Property subject to any direction Licensor
provides.  Licensor shall cooperate, in a commercially reasonable
manner, with Licensee in any such suit, including granting Licensee the right to
bring suit in Licensor’s name (and execute any documents necessary to effectuate
the same) if necessary under the applicable rules of civil procedure to effect
standing, and Licensor, as appropriate, shall be reimbursed for reasonably
incurred expenses.  Any recoveries and awards in excess of Licensee’s
costs and expenses, to the extent that such recoveries and awards are related to
RemoteMDx Product, shall be allocated equally between Licensee and
Licensor.
  8.4.           Licensor Defense of
Third-Party Claims.  Licensor shall have the sole right to
defend the Licensed Intellectual Property against imitation, infringement or any
claim of prior use.  Licensee shall cooperate, in a commercially
reasonable manner, with Licensor, at Licensor’s reasonable request and
Licensor’s expense, in connection with the defense of any such
claim.
  9.        
    Term and
Termination.
  9.1.           Term of
Agreement.  The initial term of this Agreement shall be for the
period beginning on the Effective Date and continuing six (6) years (the “Initial
Term”).  Thereafter, this Agreement shall automatically renew
for two additional terms of two years each (each such term, a “Renewal Term” and
together with the Initial Term, the “Term”) unless
Licensee provides sixty (60) days’ written notice of its intent to terminate
before the end of the Initial Term or any Renewal Term.  Thereafter,
this Agreement may be renewed by mutual agreement of the parties.  If,
as of the first day of any Renewal Term, Licensee has not established any
customers in a country or countries within the Territory, Licensor may remove
such country or countries from the Territory, upon written notice by Licensor
within sixty (60) days of the first day of the Renewal Term.
  
  9.2.           Termination for
Cause.  Either party may terminate this Agreement for a
material breach that remains uncured for sixty (60) days after delivery of
written notice of such breach.
  9.3.           Termination without
Cause.  After two (2) years from the Effective Date, Licensee
may terminate this Agreement for any reason upon thirty (30) days’ notice to
Licensor.
  9.4.           Termination for
Insolvency.  If either party files for bankruptcy, ceases to do
business for more than thirty (30) days or is generally unable to meet its
financial obligations, the other party may terminate this Agreement immediately
by providing written notice.
  9.5.           Effect of
Termination.  Upon termination of this Agreement for any
reason, the parties shall have the following rights and
obligations:
  (a)           All
licenses granted by Licensor to Licensee shall terminate, except as necessary to
permit Licensee to exercise its rights under Section 9.6 and as expressly
provided in Section 2.5;
  (b)           Each
party as a Recipient agrees to return all Confidential Information received from
the Discloser or to certify in writing that such Confidential Information has
been destroyed, except as necessary to permit Licensee to exercise its rights
under Sections 9.6 and 2.5;
  (c)           Licensee,
at its option, may continue to provide service and support with respect to
RemoteMDx Products in service as of the effective date of termination or placed
in service pursuant to Section 9.6(c), for a period of up to three (3) years
after termination of this Agreement, provided, however, that Licensee continues
to pay the applicable royalties in connection with RemoteMDx Product that remain
in service; and
  (d)           Licensor
agrees to repay to Licensee all of its direct, reasonable expenses for
Modifications during Term that are used or repurposed by Licensor or a
subsequent distributor or sublicensee after termination of this Agreement by
paying to Licensee an amount as specified on Exhibit H
attached hereto per day per unit that any product using such Modifications is in
service, active and monitored within the Territory.  The remaining
balance owing to Licensee under this Section 9.5(d) will be due and
payable  to Licensee on the third anniversary of the termination
date.
  9.6.           Termination
Inventory.
  (a)           Within
thirty (30) days after the termination of this Agreement, Licensee shall prepare
and deliver to Licensor a written summary of RemoteMDx Product and Product
Marketing Materials remaining in its inventory, including work in
process.
  (b)           Licensor
shall have the option, exercisable within ten (10) days after receipt of the
written inventory received from Licensee, to purchase all or any portion of
RemoteMDx Products for a purchase price equal to Licensee’s
cost.  Licensee shall deliver to Licensor the RemoteMDx Product
purchased, within five (5) days after receipt of notice exercising its option to
purchase, and Licensor shall pay the purchase price within thirty (30) days
after receipt of all items purchased.  Unless otherwise expressly
agreed by Licensee, all RemoteMDx Product deliveries shall be made FCA
Incoterms 2000, Licensee’s place of shipment, with shipping costs and
insurance paid by Licensor.  Title to RemoteMDx Products shall pass to
Licensor upon full payment for the RemoteMDx Products.  Licensor shall
bear all risk of loss or damage to RemoteMDx Products during transit, and is
responsible for filing any necessary claims with the carrier or insurance
company.
  
  (c)           For
a period of one (1) year after the expiration of Licensor’s option to purchase
inventory under this Section 9.6, Licensee may complete work in process, place
finished RemoteMDx Product in service to customers and use all Product Marketing
Materials remaining in inventory, on a non-exclusive basis and in accordance
with all of applicable terms of this Agreement.  Any items in the
inventory, including RemoteMDx Product manufactured by or for Licensee, not sold
and remaining after the selling period provided for in this Section 9.6 shall be
delivered to Licensor, disposed of, or destroyed in accordance with Licensor’s
written instructions.
  10.           Confidentiality.
  10.1.        “Confidential
Information” means all information disclosed by one party (the “Discloser”) to any
other party (the “Recipient”) (in
writing, orally or in any other form) that is designated, at or before the time
of disclosure, as confidential or that reasonably should be understood by the
Recipient to be confidential, including the Source Code.  Confidential
Information does not include information or material that (a) is now, or
hereafter becomes, through no act or failure to act on the part of the
Recipient, generally known or available; (b) is or was known by the Recipient at
or before the time such information or material was received from the Discloser,
as evidenced by a contemporaneous writing; (c) is furnished to the Recipient by
a third party that is not under an obligation of confidentiality to the
Discloser with respect to such information or material; or (d) is independently
developed by the Recipient, as evidenced by a contemporaneous
writing.
  10.2.        Restrictions on
Use.  The Recipient shall hold Confidential Information in
confidence and shall not disclose to third parties or use such information for
any purpose whatsoever other than as necessary in order to fulfill its
obligations or exercise its rights under this Agreement.  The
Recipient shall take all reasonable measures to protect the confidentiality of
the other party’s Confidential Information in a manner that is at least
protective as the measures it uses to maintain the confidentiality of its own
Confidential Information of similar importance but in any event using reasonable
care.  Notwithstanding the foregoing, the Recipient may disclose the
other party’s Confidential Information (a) to employees and consultants that
have a need to know such information, provided that each such employee and
consultant is under a duty of nondisclosure that is consistent with the
confidentiality and nondisclosure provisions herein, and (b) to the extent the
Recipient is legally compelled to disclose such Confidential Information,
provided that the Recipient shall give advance notice of such compelled
disclosure to the other party, and shall cooperate with the other party in
connection with any efforts to prevent or limit the scope of such disclosure or
use of the Confidential Information.
  
  10.3.        Source Code
Restrictions.  In addition to the obligations under Section
10.2, Licensee agrees that it will disclose the Source Code only to those
employees and Qualified Developers who have a need to know such information and
who have signed a written confidentiality agreement prior to receiving access to
the Source Code, which is consistent with the protections required under this
Agreement.  Licensee shall ensure that all its employees and Qualified
Developers who have access to the Source Code are adequately instructed as to
the Source Code handling requirements hereunder and shall take adequate
precautions to prevent unauthorized use or disclosure of the Source
Code.  Without limiting the foregoing provisions, Licensee and its
employees and Qualified Developers shall protect the Source Code during the Term
by:
  (a)           keeping
all copies of Source Code in secure, locked facilities when such copies are not
in actual use;
  (b)           marking
storage media, printouts, machine-readable files, and other copies or extracts
of the Source Code with a restrictive legend stating that such materials are
proprietary and confidential to Licensor and that their handling is subject to
the terms of this Agreement;
  (c)           maintaining
current records that show: (i) each employee or Qualified Developer authorized
to access the Source Code, and (ii) each physical storage media containing the
Source Code and its location (other than such media under the control of a
Qualified Developer); and
  (d)           implementing
appropriate systems security for Source Code which is stored in soft copy or
electronically in information processing systems, including password protection
and completely overwriting any physical storage media containing Source Code
before it is released for reuse.
  10.4.        Source Code
Audit.  Licensee shall maintain, for two (2) years from the
calendar year in question, adequate records concerning its treatment of the
Source Code so that RemoteMDx may determine that Licensee has taken adequate
precautions to prevent unauthorized use or disclosure of the Source
Code.  Licensee agrees that Licensor may, directly or through its
advisors, inspect, review and obtain copies of such records from Licensee upon
reasonable notice and subject to confidentiality agreements reasonably
satisfactory to Licensee for the purposes of confirming Licensee’s treatment of
the Source Code.  Such audits shall occur not more often than once per
year (unless the previous audit disclosed material deficiencies that made an
inadvertent release highly probable).  The parties agree that the
failure by Licensee to strictly adhere to Sections 10.3(a)-(d) shall not be
deemed a material breach of this Agreement unless such failure causes a release
of the Source Code that cannot be remedied.
  11.           Representations and
Warranties.
  11.1.        Licensor Representations and
Warranties.  Licensor represents and warrants
that:
  (a)           it
is duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, and that it has the requisite
power and authority to execute and deliver this Agreement and to perform all of
its obligations hereunder;
  
  (b)           the
execution, delivery and performance by Licensor of this Agreement have been duly
authorized and approved by all necessary action by Licensor, and assuming due
authorization, execution and delivery by Licensor, this Agreement constitutes
the legal, valid and binding obligations of Licensor, enforceable against
Licensor in accordance with its terms;
  (c)           the
execution and delivery of this Agreement and the performance of Licensor’s
obligations hereunder do not conflict with, violate, breach, constitute a
default under, or require any consent under any contract between Licensor and
any third party;
  (d)           it
has the right to grant all licenses granted to Licensee under this
Agreement;
  (e)           other
than licenses to Third Party Software, Licensor has granted to Licensee all
Intellectual Property Rights necessary to make, have made, market, distribute,
sell and otherwise commercially exploit the RemoteMDx Product in the Territory
in the manner contemplated by this Agreement;
  (f)           the
RemoteMDx Products, Product Marketing Materials, and the Software, and the use
thereof, do not and, during the Term, will not infringe, violate or constitute
misappropriation or unauthorized use of the copyright, patent, trade secret,
license or other intellectual property, proprietary or contract rights of any
third party in any manner that would have an adverse effect on Licensee’s use
and enjoyment thereof;
  (g)           the
Supplied Products delivered by RemoteMDx shall (i) conform to the Product
Documentation and to the quality standards set forth in this Agreement; (ii) be
free and clear of any lien or encumbrance; (iii) be merchantable; and (iv)
except as provided herein, be new;
  (h)           when
installed on Licensee’s servers by Licensor pursuant to the terms of this
Agreement, the Software, including Third Party Software that is then part of
Licensor’s application, will operate in substantially the same way as such
software operates in Licensor’s hosted environment as of such installation
date;
  (i)           the
Software does not and will not contain any computer code (i) designed to
disrupt, disable or harm the operation thereof, or any other associated
software, hardware, computer system or network, (ii) that would disable or
impair the operation thereof based on the elapsing of a period of time, the
exceeding of an authorized number of users or copies, or the advancement to a
particular date or other numeral, or (iii) that would permit access by RemoteMDx
or any third party to cause such disablement or impairment, or any other
harmful, malicious or hidden procedures, routines or mechanisms that would cause
the Software to malfunction or to damage or corrupt data, storage media,
programs, equipment or communications, or otherwise interfere with the
operations of Licensee, its affiliates or its customers;
  
  (j)           the
Software does not and will not contain any computer code that would impose any
requirements on how the products of, or other intellectual property used by,
Licensee are licensed or otherwise distributed to third parties;
and
  (k)           it
does and, during the Term, shall comply with all published laws, regulations,
rules and orders applicable to the performance of its obligations under this
Agreement.
  11.2.        Licensee Representations and
Warranties.  Licensee represents and warrants
that:
  (a)           it
is duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, and that it has the requisite
power and authority to execute and deliver this Agreement and to perform all of
its obligations hereunder;
  (b)           the
execution, delivery and performance by Licensee of this Agreement have been duly
authorized and approved by all necessary action by Licensee, and assuming due
authorization, execution and delivery by Licensee, this Agreement constitutes
the legal, valid and binding obligations of Licensee, enforceable against
Licensee in accordance with its terms;
  (c)           the
execution and delivery of this Agreement and the performance of Licensee’s
obligations hereunder do not conflict with, violate, breach, constitute a
default under, or require any consent between Licensee and any third party;
and
  (d)           it
will not make any warranties to customers for the RemoteMDx Products,
except (i) those warranties contained in the RemoteMDx Product
Warranty for Supplied Products, (ii) additional warranties required
under local law in the Territory, and (iii) warranties contained in
the Licensee Product Warranty.
  11.3.        Manufacturers’
Warranties.  Licensor agrees that the RemoteMDx Product
Warranty shall apply to Licensee’s customers in the Territory for all Supplied
Products, and that Licensor shall be responsible for all valid claims against
Supplied Products under the RemoteMDx Product Warranty.  Licensor
agrees that it will not materially alter the RemoteMDx Product Warranty without
the prior written consent of Licensee.  Subject to the terms of the
Warranty Procedures, Licensor agrees to promptly process any warranty claim
under the RemoteMDx Product Warranty.  Licensee agrees that it shall
be responsible for and process claims under the Licensee Product Warranty for
manufacturing defects of those Products manufactured by
Licensee.  Licensee, to the exclusion of Licensor, shall be solely
responsible for any warranty given by Licensee in excess of the RemoteMDx
Product Warranty.  Licensor is not responsible or liable if changes in
laws, regulations, operation, procedures, or services require modifying the
RemoteMDx Product or render it obsolete.
  11.4.        Disclaimer.  EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE PARTIES HEREBY SPECIFICALLY
DISCLAIM ANY WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY,
ENFORCEABILITY, TITLE AND NON-INFRINGEMENT OF THIRD-PARTY RIGHTS, AND ANY
WARRANTIES THAT MAY ARISE DUE TO COURSE OF PERFORMANCE, COURSE OF DEALING OR
USAGE OF TRADE, WHETHER RELATED TO THE LICENSED INTELLECTUAL PROPERTY OR
OTHERWISE.
  
  12.           Indemnification.
  12.1.        Indemnification by
Licensor.  Licensor shall, at its own expense, indemnify,
defend, and hold harmless Licensee and its affiliates, and their respective
officers, directors, employees and representatives, from and against any claim,
demand, cause of action, liability, expense (including attorney’s fees and
costs), or damages to the extent arising from a third-party claim with respect
to:
  (a)           An
allegation that the RemoteMDx Product or Software infringes any third party
copyright or patent, or misappropriates any trade secret.  If the
RemoteMDx Product or Software is finally held or believed by Licensor to
infringe or its distribution is enjoined, in addition to holding Licensee
harmless as provided in this Section 12.1, Licensor may, at its option, (i)
obtain a license or grant of rights under the rights that have been infringed,
(ii) modify the RemoteMDx Product or Software so it is noninfringing or provide
to Licensee a substitute RemoteMDx Product or Software that is noninfringing, or
(iii) if the foregoing options are not commercially reasonable, Licensor may
terminate this Agreement upon written notice to Licensee.  Licensor
shall have no liability for infringement based on modification of the RemoteMDx
Product or Software by anyone other than Licensor, or the combination or use of
the RemoteMDx Product or Software with any other product, software, equipment,
or process not furnished by Licensor, if use of the RemoteMDx Product or
Software alone and in its unmodified form would not have been an
infringement.
  (b)           Supplied
Products, including any claim alleging product liability or injury to property
or person or the failure of Supplied Products to meet requirements within the
Territory for electrical, technical and regulatory standards;
  (c)           the
design of the RemoteMDx Product or the Software, including any claim alleging
product liability, injury to property or person;
  (d)           the
Product Marketing Materials, including any claim alleging infringement of
intellectual property rights (except to the extent that Licensee is obligated to
provide indemnification for such infringement claim under Section 12.2);
and
  (e)           any
breach by Licensor of this Agreement.
  12.2.        Indemnification by
Licensee.  Licensee shall, at its own expense, indemnify,
defend, and hold harmless Licensor and its affiliates, and their respective
officers, directors, employees and representatives, from and against any claim,
demand, cause of action, liability, expense (including attorney’s fees and
costs), or damages to the extent arising from a third-party claim against
Licensor with respect to:
  (a)           infringement
of intellectual property rights based on Licensee’s Modifications;
  
  (b)           product
liability claims based on (i) Modifications made by Licensee, or (ii)
manufacturing defects in RemoteMDx Products manufactured by Licensee or its
third party manufacturers and not subject to indemnification by Licensor under
Section 12.1(c);
  (c)           acts
by a Sublicensee or Distributor which, if so taken by Licensee, would be a
breach of this Agreement; and
  (d)           any
breach by Licensee of this Agreement.
  12.3.        Procedures.  The
party seeking to be indemnified pursuant to this Section 12 (as applicable,
the “Indemnified
Party”) shall be entitled to indemnification hereunder only (a) if it
gives written notice to the party obligated to provide such indemnification
hereunder (the “Indemnifying Party”)
of any claims, suits or proceedings by third parties which may give rise to a
claim for indemnification with reasonable promptness after receiving written
notice of such claim (or, in the case of a proceeding, is served in such
proceeding); provided, however, that failure to give such notice shall not
relieve the Indemnifying Party of its obligation to provide indemnification,
except if and to the extent that the Indemnifying Party is actually and
materially prejudiced thereby, and (b) once the Indemnifying Party confirms in
writing to the Indemnified Party that it is prepared to assume its
indemnification obligations hereunder, the Indemnifying Party has sole control
over the defense of the claim, at its own cost and expense; provided, however,
that the Indemnified Party shall have the right to be represented by its own
counsel at its own cost in such matters.  Notwithstanding the
foregoing, the Indemnifying Party shall not settle or dispose of any such matter
in any manner which would require the Indemnified Party to make any admission,
or to take any action (except for ceasing use or distribution of the items
subject to the claim) without the prior written consent of the Indemnified
Party, which shall not be unreasonably withheld or delayed.  Each
party shall reasonably cooperate with the other party and its counsel in the
course of the defense of any such suit, claim or demand, such cooperation to
include using reasonable efforts to provide or make available documents,
information and witnesses and to mitigate damages.
  13.           Disputes.
  13.1.        Litigation Rights
Reserved.  If any dispute arises with respect to the
unauthorized use of Confidential Information or the trademarks or other
intellectual property of a party by another party, the aggrieved party may seek
any available remedy at law or equity from a court of competent jurisdiction, in
addition to its right to arbitration as provided in Section 13.2.
  13.2.        Arbitration.  Except
as provided in Section 13.1 above, any dispute, claim or controversy which shall
arise out of or in relation to this Agreement or any Purchase Order, or the
breach thereof, shall be finally settled by binding arbitration at London,
England in accordance with the Rules of the LCIA (the “Rules”), which Rules
are deemed to be incorporated by reference.  Any such arbitration
shall be conducted by three (3) arbitrators appointed by mutual agreement of the
parties or, failing such agreement, in accordance with the Rules.  At
least one (1) arbitrator shall be an experienced business attorney with
background in international licensing and distribution of products under New
York law.  The arbitration shall be conducted in the English
language.  Notwithstanding any contrary provisions in the Rules, each
party shall bear its own costs and expenses of the arbitration and one-half
(1/2) of the fees and costs for the arbitrators unless the arbitrators determine
the fees and costs should be borne by one of the parties.  The
arbitrators may not award or assess punitive damages against either
party.
  
  13.3.        Governing
Law.  This Agreement shall be governed by and interpreted and
construed in accordance with the laws of New York, U.S.A., excluding its choice
of law rules and excluding the United Nations Convention on Contracts for the
International Sale of Goods.
  14.           Miscellaneous.
  14.1.        Limitation of
Liability.  IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE
OTHER, EXCEPT FOR CLAIMS RELATING TO A BREACH OF OBLIGATIONS UNDER SECTION 2
(LICENSE GRANTS), A BREACH OF SECTION 10 (CONFIDENTIALITY) AND PAYMENTS MADE
PURSUANT TO SECTION 12 (INDEMNIFICATION), FOR ANY SPECIAL, CONSEQUENTIAL,
INCIDENTAL, EXEMPLARY, INDIRECT OR PUNITIVE DAMAGES, OR FOR “LOST PROFITS” EVEN
IF ADVISED OF THE POSSIBILITY THEREOF, REGARDLESS OF THE THEORY OF LIABILITY
(INCLUDING WITHOUT LIMITATION, TORT, CONTRACT, NEGLIGENCE OR STRICT
LIABILITY).  EXCEPT AS OTHERWISE PROVIDED, ALL REMEDIES SHALL BE
CUMULATIVE AND NON-EXCLUSIVE.  NOTWITHSTANDING ANYTHING ELSE IN THIS
AGREEMENT, EXCEPT FOR CLAIMS RELATING TO A BREACH OF OBLIGATIONS UNDER SECTION 2
(LICENSE GRANTS), A BREACH OF SECTION 10 (CONFIDENTIALITY) AND PAYMENTS MADE
PURSUANT TO SECTION 12 (INDEMNIFICATION), THE TOTAL CUMULATIVE LIABILITY OF EACH
PARTY FOR ANY CLAIMS ARISING OUT OF THIS AGREEMENT SHALL BE LIMITED TO
U.S. $3,500,000.
  14.2.         Notice.  All
notices, demands and other communications to be given or delivered under or by
reason of the provisions of this Agreement will be in writing, in the English
language, and will be deemed to have been given (a) when delivered if
personally delivered by hand, (b) when received if sent by a nationally or
internationally recognized overnight courier service (receipt requested),
(c) seven (7) Business Days after being mailed, if sent by first class
mail, return receipt requested, or (d) when receipt is acknowledged by an
affirmative act of the party receiving notice, if sent by facsimile, e-mail,
telecopy or other electronic transmission device (provided that such an
acknowledgement does not include an acknowledgment generated automatically by a
facsimile, e-mail, telecopy machine or other electronic transmission
device).  Notices, demands and communications to Licensor and Licensee
will, unless another address is specified in writing, be sent to the address
indicated below:
  If to
Licensee:
  euromicron
AG
 Speicherstrasse
1
 D-60327
Frankfurt am Main
 Germany
 Attn:  Dr.
Willibald Späth, CEO
 Facsimile
No.:  +49 (0) 69 63 15 83-17
  
  With a
copy of legal notices to (which shall not constitute notice):
  Dorsey &
Whitney LLP
 136 South
Main Street, Suite 1000
 Salt Lake
City, Utah  84010
 Attn:  Nolan S.
Taylor
 Facsimile
No.:  (801) 933-7373
  If to
Licensor:
 
 RemoteMDx,
Inc.
 Suite
400
 150 West
Civic Center Drive
 Sandy,
UT  84070
 Attn:  Michael
G. Acton, CFO
 Facsimile
No.: (801) 451-6281
 
 With a
copy of legal notices to (which shall not constitute notice):
  Durham
Jones & Pinegar
 111 East
Broadway, Suite 900
 Salt Lake
City, Utah  84111
 Attn:  Kevin
R. Pinegar
 Facsimile
No.:  (801) 415-3500
  14.3.         Entire Agreement;
Modification.  This Agreement (including all Exhibits attached
hereto), when executed and delivered, contains the complete agreement between
the parties as to the subject matter thereof and supersedes any prior
understandings, agreements or representations by or between the parties, written
or oral.  This Agreement may only be amended or modified by a separate
writing signed by the parties hereto.
  14.4.         Further
Assurances.  Each party shall, at any time, and from time to
time, prior to or after the Effective Date, at reasonable request of the other
party, execute and deliver to the other such instruments and documents and shall
take such actions as may be required to more effectively carry out the terms of
this Agreement.
  14.5.         Waiver.  A
party’s failure to insist on strict performance of any provision of this
Agreement shall not be deemed a waiver of any of its rights or remedies, nor
shall it relieve the other party from performing any subsequent obligation
strictly in accordance with the terms of this Agreement.  No waiver
shall be effective unless it is in writing and signed by the party against whom
enforcement is sought.
  14.6.         Survival.  The
provisions of Sections 2.4, 2.5, 4.14, 4.15, 4.17, 6.2, 7, 8, 9.4, 9.5, 10,
11, 12, 13 and 14 and all defined terms shall survive termination or expiration
of this Agreement for any reason.
  
  14.7.         Assignment.  This
Agreement may not be assigned by any party without the prior written permission
of the other parties, provided, however, that any party may, without permission
of another party, upon written notice to the other parties, assign this
Agreement to any entity that acquires all of or substantially all of its capital
stock or its assets connected to the business to which this Agreement relates,
whether through purchase, merger, consolidation or otherwise.  Any
attempted assignment in violation of this provision shall be void.
  14.8.         Force
Majeure.  No party shall be liable to the other for any loss or
damage attributable to, and neither party shall deemed to be in default
hereunder as a result of, any failure or delay in performance caused by force
majeure.  For purposes of this Agreement, the term “force majeure”
shall include strike, lockout, earthquake, hurricane, flood, fire, or other acts
of God or nature, war, rebellion, civil disorders, piracy, laws, regulations,
acts of civil or military authorities (including the denial or cancellation of
any export or other necessary license), and any other causes beyond the
reasonable control of the party whose performance is affected.  Both
parties shall use all reasonable efforts to minimize the consequences of force
majeure.   Without limiting its obligations under the RemoteMDx
Product Warranty, Licensor is not liable for nonperformance or faulty
performance of RemoteMDx Products caused by any act or omission of an
unaffiliated or unrelated third party (including any emergency services
providers or unauthorized repair persons expressly excluding manufacturers of
RemoteMDx Products), or by equipment failure, equipment or facility shortage,
signal failure or interference (by buildings, tunnels, geographic features,
etc.), or other force majeure events beyond Licensor’s control.
  14.9.         Captions.  The
captions of the various sections and subsections of this Agreement are for the
convenience of reference only and are not binding provisions of this Agreement,
nor shall they have delimiting effect or interpretive weight
hereunder.
  14.10.       Relationship of the
Parties.  This Agreement does not constitute, and is not
intended to give rise to, a partnership or joint venture among the
parties.  Each party will operate under the terms of this Agreement as
an independent entity and not as an agent for, or an employee of, any
other.
  14.11.       Severabililty.  If
any provision of this Agreement is deemed invalid or unenforceable, that
provision shall be modified, if possible, to the minimum extent necessary to
make it valid and enforceable, or if it cannot be so modified, then severed, and
the remainder of this Agreement shall remain in full force and
effect.
  14.12.       Insurance.  Each
party shall maintain comprehensive general liability insurance in effect to
protect Licensor and Licensee, beginning on the date RemoteMDx Products are
first placed in service in the Territory.  Licensee’s insurance shall
be primary coverage and shall name Licensor as an additional
insured.  Licensor’s insurance shall be primary coverage and shall
name Licensee as an additional insured.  Each policy shall provide a
minimum coverage of 2,000,000 Euros or the equivalent in U.S. Dollars as of
the date RemoteMDx Products are first placed in service in the
Territory.  Licensee and Licensor shall provide the other with a
certificate of insurance evidencing its compliance with the terms of this
Section 14.12 within thirty (30) days of the date RemoteMDx Products are
first placed in service in the Territory. That certificate shall specify that
such policies will not be cancelled or terminated without at least
thirty (30) days advance written notice to such additional
insured.
  
  14.13.       Publicity.  Neither
Licensor nor Licensee will make any press release or other public disclosure
regarding this Agreement or the transactions contemplated hereby without the
other party’s express prior written consent, except as required under applicable
law or regulation, including SEC regulation, or by any governmental agency, in
which case the party required to make the press release or public disclosure
shall use commercially reasonable efforts to obtain the approval of the other
party as to the form, nature and extent of the press release or public
disclosure prior to issuing the press release or making the public
disclosure.
  
  IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed as of the date first
set forth above.
  REMOTEMDX,
      INC.
                
                
                
                
                By:/s/ David
      G.
      Derrick
                Name:David G.
      Derrick
                Title:CEO
              
              EUROMICRON
      AG
                
                
                
                
                By:/s/ Edgar
      Bernardi
                Name:Edgar
      Bernardi
                Title:COO