Document:

rmdx10q20091231ex10-26.htm

    
      Exhibit 10.26

    

    
      

      

    

    [PORTIONS
OF THIS EXHIBIT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]

    

    SETTLEMENT
AGREEMENT

    

    This Settlement Agreement
(“Agreement”), effective as of the Effective Date, is entered into by and
between Satellite Tracking of People, LLC and Michelle Enterprises, LLC on the
one hand, and RemoteMDx, Inc. and SecureAlert, Inc., on the other
hand.

    

    WHEREAS,
the parties to this Agreement are in the business of providing locational
tracking devices, systems and related accessories and services; and

    

    WHEREAS,
the parties have been involved in litigation with one another; and

    

    WHEREAS,
the parties wish to resolve their disputes with one another pursuant to the
terms set forth hereinafter;

    

    NOW,
THEREFORE, in consideration of the releases and mutual promises contained herein
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:

    

    

    
      	
              1.

            	
              Definitions

            	
              Unless
      expressly stated to the contrary, the following definitions shall govern
      the interpretation and enforcement of this
  Agreement:

            

    

     

    
      	
               
      

            	
              The
      term "Subsidiary" shall mean and refer to any corporation or other entity
      (i) the majority of whose shares or other securities entitled to vote for
      election of directors (or other managing authority) is now or hereafter
      controlled by a Party, either directly or indirectly, or (ii) which does
      not have outstanding shares or securities but the majority of whose
      ownership interest representing the right to manage such corporation or
      other legal entity is now or hereafter owned or controlled by a Party,
      either directly or indirectly.  Any such corporation or other
      legal entity shall be deemed to be a Subsidiary of a Party only so long as
      such control or ownership exists.

            

    

     

    
      	
               
      

            	
              The
      term “Effective Date” shall mean and refer to the later to occur of (i)
      the date of the last signature on this Agreement, (ii) the entry of a
      fully executed Stipulation of Dismissal in the form attached hereto as
      Exhibit A, and (iii) the entry of a fully executed Stipulation of
      Dismissal in the form attached hereto as Exhibit
  B.

            

    

     

    
      	
               
      

            	
              The
      term “STOP” shall mean and refer to Satellite Tracking of People, LLC, a
      Delaware limited liability corporation having its principal place of
      business at 1212 North Oak Road, Suite 100, Houston, Texas 77055, and its
      Subsidiaries.

            

    

     

    
      	
               
      

            	
              The
      term “MICHELLE” shall mean and refer to Michelle Enterprises, LLC, a
      Florida limited liability company having its headquarters and principal
      place of business at 19080 S.W. 44th
      Street, Dunnellon, Florida, and its
  Subsidiaries.

            

    

     

    
      	
               
      

            	
              The
      term “RMDX” shall mean and refer to RemoteMDx, Inc., a Utah corporation
      having its principal place of business at 150 West Civic Center Drive,
      Suite 400, Salt Lake City, Utah 84070, and its
    Subsidiaries.

            

    

     

    
      
        	
                 
      

              	
                The
      term “SecureAlert” shall mean and refer to SecureAlert, Inc., a Utah
      corporation having its principal place of business at 150 West Civic
      Center Drive, Suite 400, Salt Lake City, Utah, 84070, and its
      Subsidiaries.

              

      

       

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      	
               
      

            	
              The
      term “the California Litigation” shall mean and refer to certain
      litigation filed by RMDX against STOP in the Central District of
      California, and captioned RemoteMDx, Inc. v. Satellite
      Tracking of People, LLC, Civil Action CV 08-02899.  The
      California Litigation asserts that STOP infringes U.S. Patent No.
      7,330,122.

            

    

     

    
      	
               
      

            	
              The
      term “the Texas Litigation” shall mean and refer to certain litigation
      filed by STOP and MICHELLE against SecureAlert in the Eastern District of
      Texas, and captioned Satellite Tracking of People,
      LLC and Michelle Enterprises, LLC v. Pro Tech Monitoring, Inc., et al.,
      Civil Action No. 2-08 CV-116.  The Texas Litigation
      asserts that SecureAlert and others infringe U.S. Patent No. RE39,909
      (“the ‘909 Patent”).

            

    

     

    
      	
               
      

            	
              The
      term “the ‘122 Patent” shall mean and refer to U.S. Patent No. 7,330,122,
      owned by RMDX and asserted against STOP in the California
      Litigation.

            

    

     

    
      	
               
      

            	
              The
      term “the ‘909 Patent” shall mean and refer to U.S. Patent No. RE39,909,
      licensed to STOP and owned by
MICHELLE.

            

    

     

    
      	
               
      

            	
              The
      term “Licensed STOP Patents” shall mean and refer to the ‘909 Patent, U.S.
      Patent No. 6,774,797, and any U.S. patents issuing from U.S. Patent
      Applications Serial Nos. 11/847,106 and 11/847,146, as well as all foreign
      counterparts of said patents and all patents issuing from continuation,
      divisional, reexamination, and reissue applications claiming priority to
      such patents and patent applications. To the extent patents issue from
      continuation-in-part applications claiming priority to the Licensed STOP
      Patents and include claims that do not rely upon new matter that is
      included for the first time in the continuation-in-part application, such
      claims shall be included within the definition of “Licensed STOP
      Patents.”  A list of all of STOP’s (i) United States and foreign
      counterpart patent applications and (ii) United States and foreign
      counterpart issued patents that fall within the definition of “Licensed
      STOP Patents” is attached hereto as Exhibit C, and shall be updated by
      STOP upon request by RMDX.

            

    

     

    
      	
               
      

            	
              The
      term “STOP Carve-Outs” shall mean and refer to all U.S. patents (and
      foreign counterparts) that issue from U.S. Patent Application Serial No.
      12/576,090 (“the STOP ‘090 Application”) and U.S. Patent Application
      Serial No. 12/576,054 (“the STOP ‘054 Application”) and/or from any
      continuation, continuation-in-part, divisional, reexamination or reissue
      application claiming priority to the STOP ‘090 or ‘054 Applications and
      any reexamination or reissue thereof.  A list of all of STOP’s
      (i) United States and foreign counterpart patent applications and (ii)
      United States and foreign counterpart issued patents that fall within the
      definition of “STOP Carve-Outs” is attached hereto as Exhibit D, and shall
      be updated by STOP upon request by
RMDX.

            

    

     

    
      	
               
      

            	
              The
      term “STOP CNS Patents” shall mean all U.S. and foreign patents owned by
      STOP or which STOP has the right to enforce as of the Effective Date of
      this Agreement, and all patents, U.S. and foreign, that issue from
      continuation, continuation-in-part, divisional, reissue or reexamination
      applications claiming priority to those patents, but NOT including the
      STOP Carve-Outs or the STOP Licensed Patents.  The STOP CNS
      Patents shall also include all patents STOP acquires or obtains the right
      to enforce during the term of the Covenant Not to Sue referenced in
      section 7 of this Agreement.  Notwithstanding the foregoing,
      U.S. Patent No. 6,405,213 ("the '213 Patent") and any reexamination or
      reissues along with any and all foreign counterparts are not included in
      the definition of STOP CNS Patents.  A list of all of STOP’s (i)
      United States and foreign counterpart patent applications and (ii) United
      States and foreign counterpart issued patents that fall within the
      definition of “STOP CNS Patents” is attached hereto as Exhibit E, and
      shall be updated by STOP upon request by
RMDX.

            

    

     

    
      
        	
                 
      

              	
                Subject
      to the carve-outs of section 1.15, the term “Licensed RMDX Patents” shall
      mean and refer to the ‘122 Patent, U.S. Patent No. 7,545,318 B2, and any
      U.S. patents issuing from U.S. Patent Application Serial No. 12/399,151,
      as well as all foreign counterparts of said patents and all patents
      issuing from continuation, divisional, reexamination, and reissue
      applications claiming priority to such patents and patent applications. To
      the extent patents issue from continuation-in-part applications claiming
      priority to the Licensed RMDX Patents and include claims that do not rely
      upon new matter that is included for the first time in the
      continuation-in-part application, such claims shall be included within the
      definition of “Licensed RMDX Patents.”  A list of all RMDX’s (i)
      United States and foreign counterpart patent applications and (ii) United
      States and foreign counterpart issued patents that fall within the
      definition of “Licensed RMDX Patents” is attached hereto as Exhibit F, and
      shall be updated by RMDX upon request by
STOP.

              

      

    

     

      

    
      PORTIONS
OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.  XXXXX
INDICATES REDACTED LANGUAGE.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      	
               
      

            	
              The
      term “RMDX Carve-Outs” shall mean and refer to claims 1-10 of the ‘122
      Patent and any claims of future issued patents (domestic or foreign) owned
      by RMDX or SecureAlert that recite two-way or more than two-way voice
      communication between a locational tracking device and a remote monitoring
      center, law enforcement/parole offices, or other offender-relevant third
      parties, along with other elements.  The RMDX Carve-Outs shall
      also include all claims of existing patents and patent applications
      (domestic or foreign) listed on Exhibit G, which fall outside the Veridian
      Fields of Use.  The RMDX Carve Outs shall also include all
      claims of future patents and patent applications (domestic or foreign),
      claiming priority to any patent or patent application listed on Exhibit G,
      which fall outside the Veridian Fields of Use.  The RMDX
      Carve-Outs shall not apply to the STOP BluFone device and any STOP future
      device that provides voice communications as part of a separate unit (not
      physically integrated into a single device) from the STOP BluTag or other
      similar or replacement device.  A list of all RMDX’s (i) United
      States and foreign counterpart patent applications and (ii) United States
      and foreign counterpart issued patents that fall within the definition of
      “RMDX Carve-Outs” is attached hereto as Exhibit G, and shall be updated by
      RMDX upon request by STOP.

            

    

     

    
      	
               
      

            	
              The
      term “Claims” shall mean and refer to any claims, cross-claims,
      counterclaims, causes of action, liabilities, demands, obligations,
      rights, damages, costs, or expenses of any nature, kind, or character that
      have or could have been brought, asserted, alleged, or proposed in any
      lawsuit, action, arbitration, or proceeding of any kind, nature, or
      description, whether arising under or sounding in common law, contract,
      tort, statute, regulation, or rule for any reason, with respect to any
      dispute, controversy, or injury and for any amount or any form of
      relief.

            

    

     

    
      	
               
      

            	
              The
      term “RMDX CNS Patents” shall mean all U.S. and foreign patents owned by
      RMDX or which RMDX has the right to enforce as of the Effective Date of
      this Agreement, and all patents, U.S. and foreign, that issue from
      continuation, continuation-in-part, divisional, reissue or reexamination
      applications claiming priority to those patents, but NOT including the
      RMDX Carve-Outs or the RMDX Licensed Patents.  The RMDX CNS
      Patents shall also include all claims of existing patents and patent
      applications (domestic or foreign) listed on Exhibit G, which fall within
      the Veridian Fields of Use.  The RMDX CNS Patents shall also
      include all claims of future patents and patent applications (domestic or
      foreign), claiming priority to any patent or patent application listed on
      Exhibit G, which fall within the Veridian Fields of Use.  The
      RMDX CNS Patents shall also include all patents RMDX acquires or obtains
      the right to enforce during the term of the Covenant Not to Sue referenced
      in section 7 of this Agreement.  A list of all RMDX’s (i) United
      States and foreign counterpart patent applications and (ii) United States
      and foreign counterpart issued patents that fall within the definition of
      “RMDX CNS Patents” is attached hereto as Exhibit H, and shall be updated
      by RMDX upon request by STOP.

            

    

     

    
      	
               
      

            	
              The
      term “Licensed Products” shall mean and refer to any products, systems,
      methods or processes falling within the scope of one or more claims of the
      Licensed STOP Patents, in the case of the license to RMDX, or the Licensed
      RMDX Patents, in the case of the license to
  STOP.

            

    

     

    
      	
               
      

            	
              For
      purpose of calculating royalty obligations pursuant to this Agreement, the
      term “License Base Revenues” shall mean and refer to revenues generated by
      sales and other dispositions of Licensed Products
      by RMDX and its Subsidiaries.  For the period from October 1,
      2009 through September 30, 2012, License Base Revenues shall only
      represent revenue from the sale and dispositions of Licensed Products that
      exceed a cumulative total of $XXXXXXX in sales during that total period,
      calculated in the fashion set forth in Exhibit I hereto.  For
      all periods subsequent to September 30, 2012, License Base Revenues shall
      include any and all revenues calculated in the fashion set forth in
      Exhibit I hereto, regardless of the amounts calculated for periods prior
      thereto.  The License Base Revenues shall be reported in RMDX’s
      quarterly and annual SEC filings under a Segment Reporting note found in
      “Notes to Condensed Consolidated Financial Statements.”  License
      Base Revenues shall be subject to royalties, as set forth
      hereinafter.

            

    

     

    
      PORTIONS
OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.  XXXXX
INDICATES REDACTED LANGUAGE.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
    

    
      	
               
      

            	
              The
      term “Veridian Fields of Use” shall mean and refer to the following fields
      of use, irrespective of whether uses in these fields now exist or arise in
      the future:

            

    

     

    
      	
               
      

            	
              1.1.1.

            	
              All
      fields related to the tracking of
offenders;

            

    

     

    
      	
               
      

            	
              1.1.2.

            	
              All
      fields related to the use of tracking devices by or for law enforcement
      agencies, including, without limitation, for the purpose of tracking
      parolees, juvenile offenders, stolen property, gang members and gang
      activities; victims and perpetrators,
etc.

            

    

     

    
      	
               
      

            	
              1.1.3.

            	
              All
      fields related to the national defense of any country or governmental
      subdivision, including, but not limited to applications used by defense
      and intelligence gathering agencies

            

    

     

    
      	
               
      

            	
              1.1.4.

            	
              All
      fields related to terrorism and
  counter-terrorism

            

    

     

    
      	
               
      

            	
              The
      term “Settlement Fee” shall mean the sum of $1,150,000 (One million,
      one  hundred and fifty thousand and 00/100 dollars),
      representing the guaranteed financial obligation of RMDX to STOP payable
      during the first three years after October 1,
  2009.

            

    

     

    
      	
               
      

            	
              “Party”
      shall mean STOP, MICHELLE, RMDX or SecureAlert, as the case may
      be.

            

    

     

    
      
        	
                2.

              	
                General
      Purpose of Agreement The
      purposes of the Parties in entering into this Agreement include, but are
      not limited to, the
following:

              

      

    

     

    
      	
               
      

            	
              Resolve
      the Texas and California
Litigations;

            

    

     

    
      	
               
      

            	
              Cross-license
      the Licensed RMDX Patents and Licensed STOP Patents, pursuant to the terms
      set forth in sections 3-6 hereof;

            

    

     

    
      	
               
      

            	
              Provide
      a mechanism for RMDX and STOP to exchange patent rights so that each party
      recovers the value of its respectively licensed patents and enjoys the
      design freedom resulting from the authorized use of the other party's
      licensed patents; and

            

    

     

    
      	
               
      

            	
              Provide
      for a five-year period in which the Parties will be free from suit based
      on the RMDX CNS Patents and STOP CNS Patents under the terms of a mutual
      covenant not to sue.

            

    

     

    
      	
              3.

            	
              Grant of
      Cross-Licenses

            

    

     

    
      	
               
      

            	
              STOP
      hereby grants to RMDX a non-exclusive license under the Licensed STOP
      Patents to make, have made, use, sell, offer to sell and import Licensed
      Products within the Veridian Fields.  This license does not
      include any license to make, have made, use, sell, offer to sell and
      import products or methods falling within the STOP
      Carve-Outs.  The license shall be personal to RMDX, subject to
      the provisions of this Agreement relating to sub-licensing of Subsidiaries
      (section 3.5) and assignment
      (section 18.1).  The license to RMDX shall be royalty bearing as
      discussed in section 5
below.

            

    

     

    
      PORTIONS
OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.  XXXXX
INDICATES REDACTED LANGUAGE.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    
    

     

    
      	
               
      

            	
              RMDX
      hereby grants to STOP a non-exclusive license under the Licensed RMDX
      Patents to make, have made, use, sell, offer to sell and import Licensed
      Products and related methods.  This license does not include any
      license to make, have made, use, sell, offer to sell or import products or
      methods falling
      within the RMDX Carve-Outs.  The license shall be personal to
      STOP, subject to the provisions of this Agreement relating to
      sub-licensing of Subsidiaries (section 3.5) and assignment (section
      18.1).  The license to STOP shall be fully paid up, based on the
      offset and other consideration set forth in section 5
      below.

            

    

     

    
      	
               
      

            	
              Unless
      earlier terminated for breach (subject to cure period), the license
      granted to RMDX herein shall continue in effect until all of the claims of
      the Licensed STOP Patents have (i) expired, or (ii) have been declared
      invalid or unenforceable by the U.S. Patent and Trademark Office or a
      court of competent jurisdiction and all appellate rights related thereto
      have been exhausted or expired.

            

    

     

    
      	
               
      

            	
              Unless
      earlier terminated for breach (subject to cure period), the license
      granted to STOP herein shall continue in effect until all of the claims of
      the Licensed RMDX Patents have (i) expired, or (ii) have been declared
      invalid or unenforceable by the U.S. Patent and Trademark Office or a
      court of competent jurisdiction and all appellate rights related thereto
      have been exhausted or expired.

            

    

     

    
      	
               
      

            	
              The
      licenses granted herein include the right to grant sublicenses to
      Subsidiaries who are Subsidiaries as of the Effective Date, and any such
      sublicenses shall be retroactively effective as to such
      Subsidiaries.  Any sublicense granted to an entity that becomes
      a Subsidiary after the Effective Date shall be effective from the date of
      grant, but shall have no effect on the liability of such a Subsidiary for
      infringement occurring prior to the grant of the
      sublicense.  Similarly, at such time as a Subsidiary ceases to
      be a Subsidiary, any sublicense granted to it shall immediately
      terminate.  Any sublicense granted under this Agreement shall
      immediately terminate if the sublicensor's license is terminated pursuant
      to the provisions of this Agreement.  Upon granting a
      sublicense, a sublicensing Party shall promptly notify the other Party of
      such sublicense in the manner provided for in this
      Agreement.  Notwithstanding the foregoing, for purposes of this
      section 3.5 only, Omnilink Systems, Inc. and Pro Tech Monitoring, Inc., or
      any affiliates thereof, for so long as the Texas Litigation is pending
      against Omnilink or Pro Tech (including any appeals, but in any case no
      more than three (3) years from the Effective Date hereof), cannot qualify
      as Subsidiaries of any Party to this
Agreement.

            

    

     

    
      	
              4.

            	
              Consideration to
      RMDX

            

    

     

    
      	
               
      

            	
              XXXXX

            

    

    
 

    
      PORTIONS
OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.  XXXXX
INDICATES REDACTED LANGUAGE.

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

    

    
      	
              5.

            	
              Consideration to
      STOP

            

    

     

    
      	
               
      

            	
              XXXXX

            

    

     

    
      	
               
      

            	
              Settlement Fee:
         The Settlement Fee set forth in this section 5.2
      represents an irrevocable financial obligation payable by RMDX to STOP
      under this Agreement.  The Settlement Fee is the net amount
      payable in consideration of the dismissals of the Texas Litigation and the
      California Litigation, and is an obligation of RMDX as of the Effective
      Date, but shall be paid on the schedule provided for in this
      Agreement.

            

    

     

    
    

     

    
      	
              RMDX
      Settlement Fee Schedule (Table)

            
	 
      	 
      	 
      
	
              Term
      Periods

            	
              Annual
      Payment

            	
              Quarterly
      Payment

            
	
              QE
      12-31-09 through QE 09/30/10

            	
              $XXXXXXXXX

            	
              $XXXXXXXXXXX

            
	
              QE
      12-31-10 through QE 09/30/11

            	
              $XXXXXXXXX

            	
              $XXXXXXXXXXX

            
	
              QE
      12-31-11 through QE 09/30/12

            	
              $XXXXXXXXX

            	
              $XXXXXXXXXXX

            
	
                 Total
      Settlement Fee Obligation

            	
              $XXXXXXXXX

            	 
      
	 
      	 
      	 
      
	
              Quarterly Payment
      Schedule

            	
              Payment Due
      Date

            	 
      
	
              Quarters
      Ending 12/31

            	
              March
      1st

            	 
      
	
              Quarters
      Ending 3/31

            	
              June
      1st

            	 
      
	
              Quarters
      Ending 6/30

            	
              September
      1st

            	 
      
	
              Fiscal
      Year Ending 9/30

            	
              December
      1st

            	 
      
	 
      	 
      	 
      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      Royalties      
The
royalty provisions set forth in this Agreement represent the “net” (offset)
value owing by RMDX to STOP, considering all the provisions of this Agreement,
including but not limited to, the exchange of license grants, covenants and the
potential research and development opportunities available from the respective
patents.  That is, but for the above-cited items that are extended by
RMDX to STOP, the royalty amount owed by RMDX to STOP would be
greater.  In consideration of the foregoing, including STOP’s license
of the STOP Licensed Patents, RMDX agrees to pay STOP a royalty, subject to the
adjustments of section 6.  Each Party acknowledges that it is
receiving good and valuable consideration from the other.  RMDX will
pay STOP a royalty of the greater of (i) XXXXX of the License Base Revenues, or
(ii) $XXXXX per covered activated unit per day as described in Exhibit
I.  No royalties shall be due or owed for lost or stolen products.
Payment of the royalties due under this Section 5.3 shall commence at such time
as RMDX realizes revenues from sales qualifying as License Base Revenues under
section 1.19 defined herein.  Such royalties shall be an obligation of
RMDX, and are payable for as long as RMDX realizes License Base Revenues and a
minimum of one (1) claim for any one (1) of the Licensed Stop Patents remains
valid and enforceable.  The royalties payable under this section 5.3
shall be subject to the conditional adjustments of sections 6 and 8 below and
the provisions of this Agreement relating to termination.  The
royalties owed under this section 5.3 shall be payable independent of whether or
not RMDX uses the technology claimed in the Licensed STOP
Patents.  The provisions of this section 5 and related sections are
binding upon RMDX and its successors, including without limitation, any acquirer
of RMDX or its assets, regardless of the form of acquisition, and are therefore
payable by RMDX or its successors to STOP.

    

     

    
      Rolling
Advance   
In order to ensure that STOP is able to collect the amounts due hereunder,
RMDX agrees to maintain an adjustable, Rolling Advance on a quarterly
basis.

    

     

    
      	
               
      

            	
              5.1.1.

            	
              The
      Rolling Advance shall be maintained at an amount which is the greater of
      any quarterly Settlement Fee then owed and the adjusted Rolling Advance
      calculated pursuant to section 5.4.3
below.

            

    

     

    
      	
               
      

            	
              5.1.2.

            	
              The
      first rolling advance payment (“the First Rolling Advance”) is due within
      five (5) business days of the Effective Date, and shall be in the amount
      of $XXXXX.

            

    

     

    
      	
               
      

            	
              5.1.3.

            	
              At
      the end of the quarter in which RMDX realizes License Base Revenues, the
      Rolling Advance will be calculated to determine whether such needs to be
      increased or decreased based upon the royalties actually due, and paid,
      for that quarter.  If the royalties based on actual sales totals
      for that quarter exceed the then Rolling Advance, RMDX shall remit such
      excess with the next quarterly royalty payment to be held as part of the
      Rolling Advance.  If, on the other hand, the then Rolling
      Advance exceeds the royalties actually due for the quarter, such excess
      shall apply as a credit against the next quarter’s royalty payment and the
      Rolling Advance shall be adjusted downwardly
  accordingly.

            

    

     

     

    
      PORTIONS
OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.  XXXXX
INDICATES REDACTED LANGUAGE.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
      In the
event that RMDX does not make any payment set forth in this section, STOP shall
have the right to terminate the licenses and rights granted to RMDX and file a
patent infringement action, or commence a contract action to recover the monies
RMDX owes it under the provisions of this Agreement, the action commenced being
in STOP's sole discretion.  To the extent that applicable law does not
prohibit such a course of action, STOP may further commence a contract action,
decide not to pursue it further, and then commence a patent infringement
action.  Notwithstanding the foregoing, STOP shall not have any claim
for damages for periods, prior to and including periods during which RMDX has
made payments in accordance with this Agreement.  The remedies of this
section 5 are subject to the cure periods of section 13.

    

     

    
      	
              6.

            	
              Adjustment of
      Royalty

            

    

     

    
      	
               
      

            	
              XXXXX

            

    

     

    
      	
              7.

            	
              Covenant Not to
      Sue

            

    

     

     

    PORTIONS
OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.  XXXXX
INDICATES REDACTED LANGUAGE.

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
      	
               
      

            	
              Subject
      to the termination provisions of section 13, STOP shall not sue RMDX for
      infringement of the STOP CNS Patents for a period of five (5) years from
      the Effective Date ("the five-year
period").

            

    

     

    
      	
               
      

            	
              Subject
      to the termination provisions of section 13, RMDX shall not sue STOP for
      infringement of the RMDX CNS Patents during the five-year
      period.

            

    

     

    
      	
               
      

            	
              A
      party's covenant not to sue the other party shall immediately terminate
      during the five-year period upon a covenanting party's termination of its
      licenses to the other party pursuant to the provisions of section 13 of
      this Agreement.  Accordingly, if STOP terminates its license
      grant set forth in section 3.1, its covenant not to sue, as set forth in
      section 7.1, shall also terminate.  Similarly, if RMDX
      terminates its license grant, as set forth in section 3.2, its covenant
      not to sue set forth in section 7.2 shall also
  terminate.

            

    

     

    
      	
               
      

            	
              The
      covenants not to sue granted herein do not include a covenant not to sue
      with respect to the STOP Carve-Outs or the RMDX
  Carve-Outs.

            

    

     

    
      	
               
      

            	
              The
      covenants not to sue granted herein include a covenant not to sue
      Subsidiaries of the Parties to this Agreement who are Subsidiaries as of
      the Effective Date.  For Subsidiaries who become Subsidiaries
      after the Effective Date, the covenants not to sue are effective only on a
      prospective basis, and shall have no effect on liability of such a
      Subsidiary for infringement occurring prior to its becoming a
      Subsidiary.  Similarly, at such time as a Subsidiary ceases to
      be a Subsidiary, the covenants not to sue granted herein shall immediately
      terminate as to that entity.

            

    

     

    
      	
               
      

            	
              Upon
      the expiration or termination of the covenants not to sue granted herein,
      STOP and RMDX shall be free to bring actions for infringement of their
      respective CNS Patents, but only for damages accruing after the expiration
      or termination of the five-year period of the covenant not to
      sue.

            

    

     

    
      	
               
      

            	
              No
      action for infringement of the STOP CNS Patents or RMDX CNS Patents shall
      be brought against any Party to this Agreement upon the expiration or
      termination of the covenants not to sue granted herein, unless and until
      the following procedure has been
completed:

            

    

     

    
      	
               
      

            	
              7.1.1.

            	
              Any
      Party believing that another Party is infringing one or more claims of a
      CNS Patent after the expiration or termination of the five-year covenant
      not to sue granted herein shall notify in writing the Party it believes is
      infringing, and inform that Party of its belief that infringement is
      occurring.

            

    

     

    
      	
               
      

            	
              7.1.2.

            	
              The
      Parties shall thereafter engage in good-faith negotiations for a period of
      not less than four (4) months in an attempt to resolve the claim of
      infringement.

            

    

     

    
      	
               
      

            	
              7.1.3.

            	
              If
      the Parties are unable to resolve the claim of infringement by
      negotiation, the Party asserting infringement may thereafter bring an
      action against the other.

            

    

     

    
      	
               
      

            	
              7.1.4.

            	
              This
      section 7.7 shall not be construed to require any Party to grant a license
      to another Party upon the expiration of the covenant not to
      sue.

            

    

     

    
      	
               
      

            	
              7.1.5.

            	
              Neither
      the notice of infringement required by this section 7.7 nor any statements
      made in the course of the negotiations required by this section 7.7 may be
      asserted as a basis for a claim for declaratory
      judgment.  Similarly, no statement made in the notice or the
      negotiations required by this section may be used in any subsequent
      litigation involving the STOP or RMDX CNS
  Patents.

            

    

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
      	
               
      

            	
              7.1.6.

            	
              If
      infringement of a CNS Patent occurs during the four-month negotiation
      period referenced in this section 7.7, and the Parties are not able to
      come to agreement as to a resolution of that infringement, damages for
      infringement are not waived for the four-month period in which
      negotiations proceeded.

            

    

     

    
      	
              8.

            	
              Most Favored
      Nations

            

    

     

    
      	
               
      

            	
              XXXXX

            	
               

            

    

     

    
      	
              9.

            	
              Audit

            

    

     

    
      	
               
      

            	
              STOP
      shall have the right to have its independent auditors make an audit,
      during normal business hours and upon reasonable notice, of all records
      and accounts of RMDX and its Subsidiaries that bear upon the calculation
      of License Base Revenues.  Such audits shall occur not more than
      once per calendar year.  STOP shall pay the cost of such audit
      unless the audit reveals discrepancies showing underpayments greater than
      10% of those owed under this Agreement.  If such discrepancies
      occur, RMDX shall pay the cost of the
audit.

            

    

     

     

    
      PORTIONS
OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.  XXXXX
INDICATES REDACTED LANGUAGE.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      
        	
                10.

              	
                Disposition of Texas
      and California Litigations

              

      

       

    

    
      	
               
      

            	
              STOP
      and RMDX shall execute a stipulation for dismissal in the form set forth
      in Exhibit A hereto.  Within five (5) business days of the
      execution of this Agreement, RMDX shall file such stipulation for
      dismissal in the California Litigation.  The Parties shall file
      an order of dismissal with the Court in California in the form attached
      hereto as Exhibit J.

            

    

     

    
      	
               
      

            	
              STOP,
      MICHELLE and SecureAlert shall execute a stipulation for dismissal in the
      form set forth in Exhibit B hereto.  Within five (5) business
      days of the execution of this Agreement, STOP and MICHELLE shall file such
      stipulation for dismissal in the Texas Litigation.  The Parties
      shall file an order of dismissal with the Court in Texas in the form
      attached hereto as Exhibit K.

            

    

     

    
      	
               
      

            	
              As
      soon as possible after the filing of the stipulation for dismissal
      referenced in section 10.2 hereof, but not later than 3 business days
      after such filing, SecureAlert and RMDX shall withdraw from any joint
      defense or community of interest arrangement it may have with respect to
      the ‘909 patent and the Texas Litigation.  Notwithstanding the 3
      day maximum time period for withdrawal, immediately upon execution of this
      Agreement by all Parties hereto, RMDX shall cease all participation in any
      joint defense or community of interest
  agreement.

            

    

     

    
      	
              11.

            	
              Agreement not to
      Contest Licensed and CNS
Patents

            

    

     

    
      	
               
      

            	
              STOP
      agrees that it will not, during the existence of the license granted by
      RMDX herein, file any litigation, reexamination, reissue, protest or other
      similar proceeding, in any U.S. or foreign court or in the United States
      Patent and Trademark Office or foreign patent office contesting the
      validity or enforceability of any of the RMDX Licensed Patents, or assert
      or develop any defense or legal challenge to such patents, or assist any
      third party in asserting or developing any defense or other legal
      challenge to the RMDX Licensed
Patents.

            

    

     

    
      	
               
      

            	
              During
      the term of the Covenant Not to Sue, STOP agrees that it will not file any
      litigation, reexamination, reissue, protest or other proceeding, in any
      U.S. or foreign court or in the United States Patent and Trademark Office
      or foreign patent office contesting the validity or enforceability of any
      of the RMDX CNS Patents, or assert or develop any defense or legal
      challenge to such patents, or assist any third party in asserting or
      developing any defense or other legal challenge to the RMDX CNS
      Patents.

            

    

     

    
      	
               
      

            	
              RMDX
      agrees that it will not, during the existence of the license granted by
      STOP herein, file any litigation, reexamination, reissue, protest or other
      proceeding, in any U.S. or foreign court or in the United States Patent
      and Trademark Office or foreign patent office contesting the validity or
      enforceability of any of the STOP Licensed Patents, or assert or develop
      any defense or legal challenge to such patents, or assist any third party
      in asserting or developing any defense or other legal challenge to the
      STOP Licensed Patents.

            

    

     

    
      	
               
      

            	
              During
      the term of the Covenant Not to Sue, RMDX agrees that it will not file any
      litigation, reexamination, reissue, protest or other proceeding, in any
      U.S. or foreign court or in the United States Patent and Trademark Office
      or foreign patent office contesting the validity or enforceability of any
      of the STOP CNS Patents, or assert or develop any defense or legal
      challenge to such patents or assist any third party in asserting or
      developing any defense or other legal challenge to the STOP CNS
      Patents.

            

    

     

    
      	
               
      

            	
              RMDX
      warrants that it has not, prior to the Effective Date, filed or had any
      involvement in any reexamination or reissue proceeding with respect to any
      Licensed STOP Patent or STOP CNS Patent, except with respect to
      reexamination proceeding currently pending for the ‘909 patent and the
      reissue proceeding pending with respect to STOP’s ‘481
    patent.

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      
        	
                 
      

              	
                STOP
      warrants that it has not, prior to the Effective Date, filed or had any
      involvement in any reexamination or reissue proceeding with respect to any
      Licensed RMDX Patent or RMDX CNS
Patent.

              

      

       

    

    
      	
               
      

            	
              Each
      Party represents and warrants to the other that it has not formed or
      acquired any company that meets the definition of Subsidiary between
      October 1, 2009 and the Effective Date.  The parties shall list
      all Subsidiaries as of the Effective Date on Exhibit
  L.

            

    

     

    
      	
               
      

            	
              The
      provisions of section 11 shall apply to any present or future Subsidiary
      of STOP and RMDX to the same extent as they apply to STOP and
      RMDX.

            

    

     

    
      	
              12.

            	
              Releases

            

    

     

    
      	
               
      

            	
              STOP
      hereby releases and forever discharges RMDX and all of its Subsidiaries
      who are Subsidiaries as of the Effective Date, along with their respective
      past and present principals, directors, officers, agents, employees,
      shareholders, and customers (hereinafter collectively, "released parties")
      from and against all Claims (including, but not limited to, Claims
      asserted in the Texas Litigation or that otherwise could have been brought
      or asserted in such litigation), whether known or unknown, existing or
      potential, or suspected or unsuspected, which STOP had or asserted or
      could have asserted, has or asserts or could assert, or may hereafter have
      or assert against RMDX and SecureAlert and all of their present
      Subsidiaries.  This release shall not operate to release
      competitors of STOP who are not Subsidiaries of RMDX as of the Effective
      Date.  This release shall be effective only as to Claims arising
      prior to the Effective Date.

            

    

     

    
      	
               
      

            	
              MICHELLE
      hereby releases and forever discharges RMDX and all of its Subsidiaries
      who are Subsidiaries as of the Effective Date, along with their respective
      past and present principals, directors, officers, agents, employees,
      shareholders, and customers (hereinafter collectively, "released parties")
      from and against all actions, claims, suits, demands, damages, judgments,
      causes of action, debts, liabilities, promises, or controversies of any
      kind whatsoever, whether presently known or unknown, that MICHELLE alone
      or along with STOP has or had or may have against any such released
      parties arising from the Texas Litigation or arising or claimed to arise
      out of any infringement or asserted infringement of the '909 Patent.  This
      release shall not operate to release any competitors of MICHELLE who are
      not Subsidiaries of RMDX as of the Effective Date.  This release
      shall be effective only as to Claims arising prior to the Effective
      Date.

            

    

     

    
      	
               
      

            	
              RMDX
      and Secure Alert hereby release and forever discharge STOP and all of its
      Subsidiaries who are Subsidiaries as of the Effective Date, along with
      their respective past and present principals, directors, officers,
      agents,  employees, and shareholders, and customers (hereinafter
      collectively, "released parties") from and against all Claims (including,
      but not limited to, those Claims asserted in the California Litigation or
      that otherwise could have been brought or asserted in such litigation),
      whether known or unknown, existing or potential, or suspected or
      unsuspected, which RMDX or Secure Alert had or asserted or could have
      asserted, has or asserts or could assert, or may hereafter have or assert
      against STOP and all of its present Subsidiaries.  This release
      shall not operate as a release of competitors of RMDX or Secure Alert who
      are not Subsidiaries of STOP as of the Effective Date.  This
      release shall be effective only as to Claims arising prior to the
      Effective Date

            

    

     

    
      	
              13.

            	
              Termination

            

    

     

    
      	
               
      

            	
              In
      the event of a material breach of this Agreement, the non-breaching Party
      may, in addition to any other remedies it may have, terminate the license
      granted by it in section 3 hereof to any breaching Party by giving not
      less than 120 days written notice of the alleged breach, specifying the
      nature of the breach.  The party alleged to be in breach shall
      have a period of 120 days after receipt of notice to cure any alleged
      breach.  If cure occurs within said 120-day period, the notice
      of breach shall be ineffective.  The non-breaching Party's
      termination of its license to the breaching Party shall also automatically
      and at the same time terminate (i) any and all sublicenses granted by the
      breaching Party and (ii) the covenant not to sue extended by the
      non-breaching Party to the breaching Party and as applicable to any of the
      breaching Party's Subsidiaries.

            

    

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
      	
               
      

            	
              Notwithstanding
      the termination of the rights of a breaching Party hereunder, the
      non-breaching Party shall continue to have the benefit of its license and
      the covenant not to sue as respectively set forth in sections 3 and 7 of
      this Agreement.

            

    

     

    
      	
              14.

            	
              Press Release, Other
      Disclosure and
Confidentiality

            

    

     

    
      	
               
      

            	
              The
      Parties shall agree upon and issue a joint press release within five (5)
      business days hereof.  Other than the express terms of the press
      release, the Parties agree that the terms of this Agreement are
      confidential and shall not be disclosed to any third party for any
      purpose, except to the extent that a Party is required to disclose the
      terms of this Agreement by the Securities and Exchange Commission, GAAP or
      other applicable governmental authority and, in such case, only the terms
      of this Agreement shall be disclosed.  In the event such
      disclosure contains more than the recitation of all or a portion of the
      terms of this Agreement, then the entire disclosure must be approved in
      writing by the Parties prior to its
disclosure.

            

    

     

    
      	
               
      

            	
              Notwithstanding
      the foregoing, STOP shall have the right, in its sole discretion, to use
      and disclose this Agreement, a) in the ‘909 Patent reexamination, redacted
      to disclose only that i) RMDX and SecureAlert have taken a license under
      the ‘909 Patent, ii) RMDX and SecureAlert will pay STOP for such license
      rights, and iii) RMDX and SecureAlert have stipulated that the claims of
      the ‘909 Patent are valid and enforceable; and b) in the Texas Litigation,
      including all of its terms and conditions, provided that STOP takes steps
      to protect its confidentiality, including, but not limited to, production
      as “Confidential” under the terms of the Protective Order in the Texas
      Litigation, and filing any documents containing this Agreement or making
      reference to its terms in the Texas Litigation under seal.  In
      any case, STOP shall be permitted to use and disclose this Agreement as
      part of any trial in the Texas
Litigation.

            

    

     

    
      	
              15.

            	
              Warranties

            

    

     

    
      	
               
      

            	
              STOP
      warrants that it owns all right, title and interest in and to Licensed
      STOP Patents 6,774,797, 11/847,106, 11/847,146, and all foreign
      counterparts thereof as listed on Exhibit C; and to STOP CNS Patents
      6,703,936, 6,992,582, 7,619,513, and all foreign counterparts thereof as
      listed on Exhibit E; and is authorized to grant the license, release and
      covenant not to sue granted herein, except as set forth in section 15.3
      below.

            

    

     

    
      	
               
      

            	
              Michelle
      warrants that it owns all right, title and interest in and to Licensed
      STOP Patents RE 39,909 and 11/806,841, and to STOP CNS Patents 5,867,103;
      6,160,481; 6,218,945; 6,512,456; and RE 38,838; and is authorized to grant
      the license, release and covenant not to sue granted
    herein.

            

    

     

    
      	
               
      

            	
              STOP
      does not warrant that it owns title to the ‘909 Patent, but warrants and
      represents that it has the absolute and unfettered right to grant the
      license and release granted herein with respect to the ‘909
      Patent.  STOP further agrees to indemnify and hold RMDX harmless
      from any and all claims by MICHELLE and/or any third party for
      infringement of the ‘909 Patent, provided such claims arise from STOP's
      breach of its exclusive license agreement with MICHELLE with respect to
      the '909 Patent.  Such indemnity shall include indemnity for any
      award or settlement RMDX is required to pay for infringement of the ‘909
      Patent, as well as all attorneys’ fees and costs associated
      therewith.

            

    

     

    
      	
               
      

            	
              RMDX
      warrants that it owns all right, title and interest in and to the ‘122
      Patent, the Licensed RMDX Patents and RMDX CNS Patents and is authorized
      to grant the license, release and covenant not to sue granted
      herein.

            

    

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      
        	
                 
      

              	
                Each
      Party hereto represents and warrants that it has not transferred, assigned
      or otherwise alienated any of the Claims released herein prior to the
      Effective Date.

              

      

    

     

    
      	
               
      

            	
              Each
      Party hereto represents and warrants that the execution of this Agreement
      and the covenants herein are within its authority and that this Agreement
      is executed pursuant to necessary and customary
      authorizations.

            

    

     

    
      	
              16.

            	
              Notice

            

    

     

    
      	
               
      

            	
              Any
      Notice required under this Agreement shall be in writing, sent by
      certified or registered mail, addressed and served as
    follows:

            

    

     

    To
STOP:

     

    Satellite
Tracking of People, LLC

    1212
North Post Oak Road

    Suite
100

    Houston,
TX  77055

    

    With copy
to:

    

    David E.
De Lorenzi, Esq.

    Gibbons
P.C.

    One
Gateway Center

    Newark,
NJ  07102-5310

    

    To
MICHELLE:

    

    Michelle
Enterprises, LLC

    19080
S.W. 44th
Street

    Dunnellon,
Florida

    

    To RMDX
and SecureAlert:

    

    RemoteMDx,
Inc.

    150 West
Civic Center Drive

    Suite
400

    Salt Lake
City, UT  84070

    

    SecureAlert,
Inc.

    150 West
Civic Center Drive

    Suite
400

    Salt Lake
City, UT  84070

    

    With copy
to:

    

    Brent P.
Lorimer, Esq.

    Workman
Nydegger

    60 East
South Temple,  Suite 1000

    Salt Lake
City, UT  84111

    

    
      	
              17.

            	
              Stipulations of
      Validity and Infringement

            

    

     

    
      	
               
      

            	
              STOP
      hereby stipulates that the claims of the ‘122 Patent are valid,
      enforceable and infringed by the BluTag device and related system software
      and use of same.

            

    

     

    
      	
               
      

            	
              RMDX
      hereby stipulates that the claims of the ‘909 Patent are valid,
      enforceable and infringed by the TrackerPal I and II devices and related
      system software and use of same.

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      
        	
                18.

              	
                Assignment or
      Transfer

              

      

      
      

    

    
      	
               
      

            	
              Subject
      to the provisions of section 3.5 above, the licenses and rights granted
      hereunder shall not be transferable or assignable by the licensed party,
      except to a third party that acquires all or substantially all of the
      business of the licensed Party, provided that the licensing Party has not,
      as of the effective date of the transfer, commenced any action against the
      proposed assignee for infringement of any patent or patents that are
      licensed under the license being transferred or assigned.  For
      the purpose of section 18.1, patent or patents which are licensed by STOP
      include those in the definition of Licensed STOP Patents or STOP CNS
      Patents, and with respect to RMDX, includes any patent or patents which
      are licensed by RMDX that include those in the definition of Licensed RMDX
      Patents or RMDX CNS patents. The restrictions on transfer of the STOP
      and RMDX CNS patents shall expire with the expiration or termination of
      the covenants not to sue of section 7 hereof. Any transfer or
      assignment of licenses or rights granted hereunder shall not operate to
      relieve the transferee of any liability for infringement arising prior to
      the date of assignment or transfer.  Further, any assignment or
      transfer not specifically prohibited above, shall require the written
      consent of the licensing Party, such consent not to be unreasonably
      withheld.

            

    

     

    
      	
              19.

            	
              Miscellaneous

            

    

     

    
      Understanding of
Agreement    
Each of the Parties understands this Agreement, and the terms and conditions
contained herein, and has relied upon its own judgment, belief, knowledge,
understanding and expertise after careful consultation with its own legal
counsel concerning the legal effect of this Agreement and all of the terms and
conditions of this Agreement.

    

     

    
      Final Integrated
Agreement   
This Agreement, and any documents referred to herein, constitute the
entire, final and binding understanding between the parties with respect to the
subject matter hereof.  No other statement or representation, written
or oral, express or implied, has been relied upon in executing this Agreement,
and all prior discussions, statements, and negotiations made or that have
occurred prior to the date of the Agreement are deemed merged into this
Agreement, and shall not be used for any purpose whatsoever.

    

     

    
      Binding
Effect   
This Agreement shall bind and inure to the benefit of the Parties and to
their respective successors and permitted assigns in interest.  This
section shall be subject to the specific prohibitions on assignment set forth
above.

    

     

    
      Severability    
If any provision of the Agreement is held void or for any reason unenforceable,
the remaining portions of this Agreement will remain in full force and
effect.

    

     

    
      Amendment   
This Agreement may not be amended, altered, modified, or otherwise changed
in any respect except by a writing duly executed by the Parties, or their
authorized representatives.

    

     

    
      Joint
Negotiation   
This Agreement has been negotiated and reviewed by each of the Parties, and no
provision of the Agreement shall be construed against any Party on the ground
that such Party was the drafter of that provision of the Agreement or for any
other reason.

    

     

    
      Counterparts   
This Agreement may be executed by the Parties in counterparts, each of which may
be deemed an original and all of which together shall constitute a single
instrument.

    

     

    
      Additional Necessary
Documents     The Parties, and each of them, agree to
do all things necessary, including, but not limited to, execution of additional
documents, as may be reasonably required, in order to carry out the purposes and
intent of this Agreement and to fulfill their obligations under this
Agreement.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      Choice of Law and
Venue    
This Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the State of Delaware, without giving effect to its rules
pertaining to conflict of laws.  The parties hereto agree that
the exclusive jurisdiction and venue for any action under this Agreement if
brought
by STOP shall be the state and federal courts sitting in Texas, and if brought
by RMDX shall be the state and federal courts sitting in Utah, and each of the
parties hereby agree and submits itself to the exclusive jurisdiction and venue
of such courts for such purpose.

    

    
 

    WHEREFORE,
the Parties hereto have caused this Agreement to be duly executed and
acknowledged as of the date set forth below.

    

    SIGNATURES
TO FOLLOW

     

    
 

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
      
        	
                STOP

              	 
      	
                MICHELLE
      ENTERPRISES, LLC

              	 
      
	 
      	 
      	
                (signs
      below to indicate its consent to this Settlement Agreement and its
      obligations under sections 10.2, 12.2 and 15.2.)

              	 
      
	 
      	 
      	 
      	 
      
	
                By:/s/ Steve
      Logan               
                         
      

              	 
      	
                By:/s/ Diana
      Taylor                                    
      

              	 
      
	
                Its:CEO                                        
      

              	 
      	
                Its:
      President                            
                         
      

              	 
      
	 
      	 
      	 
      	 
      
	
                RMDX

              	 
      	
                SECUREALERT

              	 
      
	
                By:/s/ John L. Hastings,
      III                     
      

              	 
      	
                By:/s/ John L. Hastings,
      III                                  
      

              	 
      
	
                Its
      President                                              
      

              	 
      	
                Its
      President                                                           
      

              	 
      

      

    

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    Exhibit
A

     

    Brent P.
Lorimer (Admitted Pro Hac
Vice)

    Thomas R.
Vuksinick (Admitted Pro Hac
Vice)

    Chad E.
Nydegger (Admitted Pro Hac
Vice)

    Workman |
Nydegger A Professional Corporation

    1000
Eagle Gate Tower, 60 East South Temple

    Salt Lake
City, Utah 84111

     

    Gary M.
Anderson (State Bar No. 97385)

    Michael
J. Moffatt (State Bar No. 180343)

    Ken C.
Cheney (State Bar No. 257079)

    Fulwider
Patton LLP

    Howard
Hughes Center

    6060
Center Drive, Tenth Floor

    Los
Angeles, California 90045

     

    Attorneys for
Plaintiff RemoteMDx,
Inc.

     

    UNITED
STATES DISTRICT COURT

     

    CENTRAL
DISTRICT OF CALIFORNIA

     

    WESTERN
DIVISION

     

    
      	
              REMOTEMDx,
      INC.,

               

              Plaintiff and

              Counterdefendant,

               

              v.

               

              SATELLITE
      TRACKING OF

              PEOPLE,
      L.L.C., aka STOP,

              LLC,

               

              Defendant and

              Counterclaimant.

               

            	
              Case
      No. CV-08-02899 ODW (FMOx)

               

               

              STIPULATION
      FOR DISMISSAL OF CLAIMS AND COUNTERCLAIMS WITH PREJUDICE

               

              Assigned
      to the Honorable

              Otis
      D. Wright, II

               

               

               

            

    

     

    Plaintiff
and Counterclaim-Defendant RemoteMDx, Inc. (“RemoteMDx”)  and
Defendant and Counterclaim-Plaintiff Satellite Tracking of People, L.L.C., aka
STOP, LLC (“STOP”), through their respective counsel, hereby stipulate that
RemoteMDx has agreed to dismiss with prejudice all claims asserted against STOP,
and STOP has agreed to dismiss with prejudice all counterclaims and defenses
asserted against RemoteMDx.  Accordingly, RemoteMDx and STOP jointly
stipulate to the dismissal with prejudice of all claims and counterclaims
between them, respectively, asserted in this case.  The parties
further stipulate that they shall each bear their own attorneys’ fees and
costs.  A proposed Order conforming to this Stipulation is submitted
herewith.

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      	
              DATED:  January
      29, 2010

            	
              Respectfully
      submitted,

            	 
      
	 
      	 
      	 
      
	
               

            	
              Workman
      | Nydegger

            	 
      
	 
      	 
      	 
      
	
               

            	
              By /s/
      Brent P. Lorimer

            	 
      
	 
      	
                    
           Brent P. Lorimer

            	 
      
	 
      	 
      	 
      
	 
      	
              Attorneys
      for Plaintiff RemoteMDx, Inc.

            	 
      
	 
      	 
      	 
      
	 
      	
              GIBBONS
      P.C.

            	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By /s/
      Thomas J. Vetter

            	 
      
	 
      	
                      
         Thomas J. Vetter

            	 
      
	 
      	 
      	 
      
	 
      	
              Attorney
      for Defendant Satellite

            	 
      
	 
      	
              Tracking
      of People, L.L.C.

            	 
      

    

     

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    CERTIFICATE
OF SERVICE

    I hereby
certify that on January 29, 2010, I electronically filed the foregoing
STIPULATION FOR DISMISSAL OF CLAIMS AND COUNTERCLAIMS WITH PREJUDICE with the
Clerk of the Court using the CM/ECF system, which will send notification of such
filing to the following:  cdloomis@bakerlaw.com;
tvetter@gibbonslaw.com;
and wstein@gibbonslaw.com.

     

    
      	 
      	 
      	 
      
	 
      	
              /s/
      Brent P. Lorimer

            	 
      
	 
      	  	 
      

    

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
B

    

    UNITED
STATES DISTRICT COURT

    EASTERN
DISTRICT OF TEXAS

    MARSHALL
DIVISION

    

    
      	
              SATELLITE
      TRACKING OF PEOPLE, LLC (a/k/a STOP, LLC) and MICHELLE ENTERPRISES,
      LLC,

               

              Plaintiff,

               

              v.

               

              PRO
      TECH MONITORING, INC., OMNILINK SYSTEMS, INC., and SECUREALERT,
      INC.,

               

              Defendants.

            	 	
              )

              )

              )

              )

              )

              )

              )

              )

              )

              )

              )

              )

              )

               

            	
               

               

              CASE
      NO. 2:08-CV-116 (CE)

               

               

                        JURY
      TRIAL DEMANDED

               

               

               

            

    

    
      

    

    
      
        

      

    STIPULATION
FOR DISMISSAL OF

    CLAIMS
AND COUNTERCLAIMS

    WITH
RESPECT TO SECUREALERT, INC.

    

    Plaintiffs
and Counterclaim-Defendants Satellite Tracking of People, LLC and Michelle
Enterprises, LLC and Defendant and Counterclaim-Plaintiff SecureAlert, Inc.
(“SecureAlert”), through their respective counsel, hereby stipulate that
Plaintiffs have agreed to dismiss with prejudice all claims asserted against
SecureAlert, and SecureAlert has agreed to dismiss with prejudice all
counterclaims and defenses asserted against Plaintiffs.  Accordingly,
Plaintiffs and SecureAlert jointly stipulate to the dismissal with prejudice of
all claims and counterclaims between them, respectively, asserted in this
case.  The parties further stipulate that they shall each bear their
own attorneys’ fees, expenses, and costs.   The Court shall
retain such jurisdiction over SecureAlert as is necessary to effectuate the
terms and conditions of the settlement agreement between Plaintiffs and
SecureAlert.  This stipulation only relates to Plaintiffs’ claims
against SecureAlert and SecureAlert’s claims against
Plaintiffs.  Plaintiffs’ claims against Defendants Omnilink Systems,
Inc. and Pro Tech Monitoring, Inc. remain.  A proposed Order
conforming to this Stipulation is submitted herewith.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    DATED
this 29th day of January, 2010.

    

    Respectfully
submitted,

    

    

    Workman
| Nydegger

     

     

    By /s/ Brent P.
Lorimer

     

              Brent
P. Lorimer

    

    Attorneys for Defendant SecureAlert,
Inc.

    

    GIBBONS P.C.

    

    

    By /s/ Thomas J.
Vetter                                           

    Thomas J. Vetter

    

    Attorneys for Plaintiffs
Satellite

    Tracking
of People, L.L.C. and Michelle Enterprises, LLC

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Exhibit
C

    

    UNITED
STATES PATENTS

    

    
      	
              Patent
      Number

            	
              Issue
      Date

            	
              Title

               

            
	
              RE
      39,909

            	
              November
      6, 2007

            	
              Tracking
      system for locational tracking of monitored persons

            
	
              6,774,797

            	
              August
      10, 2004

            	
              Wireless
      tag and monitoring center system for tracking the activities of
      individuals

            

    

    

    UNITED
STATES PATENT APPLICATIONS

    

    
      	
              Application
      Number

            	
              Filing
      Date

            	
              Title

               

            
	
              11/847,106

               

            	
              August
      29, 2007

            	
              Active
      wireless tag and auxiliary device for use with monitoring center for
      tracking individuals or objects

            
	
              11/847,146

               

            	
              August
      29, 2007

            	
              Wireless
      tag and auxiliary device for use with home monitoring unit for tracking
      individuals or objects

            
	
              11/806,841

            	
              June
      4, 2007

            	
              Monitoring
      system

               

            

    

    

    FOREIGN
PATENTS

    

    None

    

    FOREIGN
PATENT APPLICATIONS

    

    
      	
              Corresponding
      United States Patent or Application Number

            	
              Foreign
      Application Number

            	
              Foreign
      Filing Date

            	
              Foreign
      Application Title

               

            
	
              6,774,797

            	
              EP
      1363258 (A1)

            	
              May
      12, 2003

            	
              Wireless
      tag and monitoring center system for tracking the activities of
      individuals

            
	
              11/847,106

            	
              CA
      2,661,910

               

            	
              August
      29, 2007

            	
              Active
      wireless tag and auxiliary device for use with monitoring center for
      tracking individuals or objects

            
	
              11/847,106

            	
              UK
      GB 0903439.8

               

            	
              August
      29, 2007

            	
              Active
      wireless tag and auxiliary device for use with monitoring center for
      tracking individuals or objects

            
	
              11/847,146

            	
              CA
      2,662,023

            	
              August
      29, 2007

            	
              Wireless
      tag and auxiliary device for use with home monitoring unit for tracking
      individuals or objects

            
	
              11/847,146

            	
              UK
      GB 0903440.6

            	
              August
      29, 2007

            	
              Wireless
      tag and auxiliary device for use with home monitoring unit for tracking
      individuals or objects

            
	
              11/847,146

            	
              Hong
      Kong 09111371.7

            	
              August
      29, 2007

            	
              Wireless
      tag and auxiliary device for use with home monitoring unit for tracking
      individuals or objects

            

    

    
 

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Exhibit
D

    

    UNITED
STATES PATENTS

    

    None

    

    UNITED
STATES PATENT APPLICATIONS

    

    
      	
              Application
      Number

            	
              Filing
      Date

            	
              Title

            
	
              12/576,090

            	
              October
      8, 2009

            	
              Technique
      for detecting tracking device tampering using an auxiliary
      device

            
	
              12/576,054

            	
              October
      8, 2009

            	
              Technique
      for detecting tracking device
tampering

            

    

    

    FOREIGN
PATENTS

    

    None

    

    FOREIGN
PATENT APPLICATIONS

    

    
      	
              Corresponding
      United States Patent or Application Number

            	
              Foreign
      Application Number

            	
              Foreign
      Filing Date

            	
              Foreign
      Application Title

            
	
              12/576,054

            	
              CA
      2,682,072

            	
              October
      10, 2009

            	
              Technique
      for detecting tracking device
tampering

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Exhibit
E

    

    UNITED
STATES PATENTS

    

    
      	
              Patent
      Number

            	
              Issue
      Date

            	
              Title
      of Patent

            
	
              5,867,103

            	
              February
      2, 1999

            	
              Monitored
      Person Tracking System

            
	
              6,160,481

            	
              December
      12, 2000

            	
              Monitoring
      System

            
	
              6,218,945

            	
              April
      17, 2001

            	
              Augmented
      Monitoring System

            
	
              6,512,456

            	
              January
      28, 2003

            	
              Mobile
      Medical Monitoring Device

            
	
              6,703,936

            	
              March
      9, 2004

            	
              System
      and method for tracking movement of individuals

            
	
              RE
      38,838

            	
              October
      18, 2005

            	
              Monitoring
      System

            
	
              6,992,582

            	
              January
      31, 2006

            	
              System
      and method for tracking movement of individuals

            
	
              7,619,513

            	
              November
      17, 2009

            	
              System
      and method for tracking movement of
individuals

            

    

    

    UNITED
STATES PATENT APPLICATIONS

    

    None

    

    FOREIGN
PATENTS

    

    None

    

    FOREIGN
PATENT APPLICATIONS

    

    
      	
              Corresponding
      United States Patent or Application Number

            	
              Foreign
      Application Number

            	
              Foreign
      Filing Date

            	
              Foreign
      Application Title

            
	
              6,703,936

            	
              EP
      1433145 (A1)

               

            	
              September
      26, 2002

            	
              System
      and method for tracking movement of individuals

            
	
              6,703,936

            	
              CA
      2461837 (A1)

            	
              September
      26, 2002

            	
              System
      and method for tracking movement of
individuals

            

    

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Exhibit
F

    

    US
Patents and Applications

    

    
      	
              Title

            	
              Application
      No.

            	
              Patent/
      Registration No.

            
	
              Remote
      Tracking and Communication Device

            	
              11/202427

            	
              7330122*

            
	
              Remote
      Tracking and Communications Device

            	
              12/028088

            	
               Pending*

            
	
              Remote
      Tracking System and Device With Variable Sampling and Sending Capabilities
      Based on Environmental Factors

            	
              11/486991

            	
              7545318

            
	
              A
      System and Method for Monitoring Individuals Using a Beacon and
      Intelligent Remote Tracking Device

            	
              12/399151

            	
               Pending*

            

    

    

    Foreign
Patents and Applications

    

    
      	
              Title

            	
              Application
      No.

            
	
              Remote
      Tracking and Communication Device - EPO

            	
              06836098.1*

            
	
              Remote
      Tracking and Communication Device - Brazil

            	
              PI0614742.9*

            
	
              Remote
      Tracking and Communication Device - Canada

            	
              2617923*

            
	
              Remote
      Tracking and Communication Device - Mexico

            	
              MX/a/2008/001932*

            
	
              A
      System and Method for Monitoring Individuals Using a Beacon and
      Intelligent Remote Tracking Device - PCT

            	
              PCT/US2009/036335*

            

    

    

    
      	
              *

            	
              The
      license of this patent or patent application is limited to issued claims
      that do not fall within the definition of RMDX Carve-Outs, as defined in
      section 1.15 of the Settlement Agreement between the
    parties.

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Exhibit
G

    

    US
Patents and Applications

    

    
      	
              Title

            	
              Application
      No.

            	
              Patent/
      Registration No.

            
	
              PANIC
      BUTTON PHONE

            	
              09/044497

            	
              6044257*

            
	
              Emergency
      Phone with Single-Button Activation

            	
              09/538364

            	
              6636732*

            
	
              Emergency
      Phone With Alternate Number Calling Capability

            	
              09/684831

            	
              7092695*

            
	
              Emergency
      Phone with Single-Button Activation

            	
              11/174191

            	
              7251471*

            
	
              Emergency
      Phone With Single Button Activation

            	
              11/830398

            	
              Pending *

            
	
              Emergency
      Phone for Automatically Summoning Multiple Emergency Response
      Services

            	
              09/173645

            	
              6226510*

            
	
              COMBINATION
      EMERGENCY PHONE AND PERSONAL AUDIO DEVICE

            	
              09/185191

            	
              6285867*

            
	
              Remote
      Tracking and Communication Device

            	
              11/202427

            	
              7330122*

            
	
              Remote
      Tracking and Communications Device

            	
              12/028088

            	
               Pending*

            
	
              ALARM
      AND ALARM MANAGEMENT SYSTEM FOR REMOTE TRACKING DEVICES

            	
              11/486992

            	
               Pending*

            
	
              A
      Remote Tracking Device and a System and Method for Two-Way Voice
      Communication Between the Device and a Monitoring Center

            	
              11/486989

            	
               Pending*

            
	
              A
      Remote Tracking System with a Dedicated Monitoring Center

            	
              11/486976

            	
               Pending*

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Foreign
Patents and Applications

    

    
      	
              Title

            	
              Application
      No.

            	
              Patent/
      Registration No.

            
	
              Emergency
      Phone with Single-Button Activation - Japan

            	
              2001-571568

            	
               Pending*

            
	
              Emergency
      Phone with Single-Button Activation - China

            	
              01807350.6

            	
              01807350.6*

              Pending

            
	
              A
      Remote Tracking System with a Dedicated Monitoring Center -
      EPO

            	
              07812596.0

            	
               Pending*

            
	
              A
      Remote Tracking System with a Dedicated Monitoring Center - Brazil

            	
              PI0714367.2

            	
               Pending*

            
	
              Remote
      Tracking and Communication Device - EPO

            	
              06836098.1

            	
               Pending*

            
	
              Remote
      Tracking and Communication Device - Brazil

            	
              PI0614742.9

            	
               Pending*

            
	
              Remote
      Tracking and Communication Device - Canada

            	
              2617923

            	
               Pending*

            
	
              Remote
      Tracking and Communication Device - Mexico

            	
              MX/a/2008/001932

            	
               Pending*

            

    

    

    
      	
              *

            	
              The
      Carve-Outs for this patent or patent application are limited to issued
      claims that do fall within the definition of RMDX Carve-Outs, as defined
      in section 1.15 of the Settlement Agreement between the
      parties.

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Exhibit
H

    

    US
Patents and Applications

    

    
      	
              Title

            	
              Application
      No.

            	
              Patent/
      Registration No.

            
	
              REMOTELY
      CONTROLLABLE THERMOSTAT

            	
              09/513110

            	
              6260765

            
	
              INTERFERENCE
      STRUCTURE FOR EMERGENCY RESPONSE SYSTEM WRISTWATCH

            	
              09/651523

            	
              6366538

            
	
              PANIC
      BUTTON PHONE

            	
              09/044497

            	
              6044257*

            
	
              Emergency
      Phone with Single-Button Activation

            	
              09/538364

            	
              6636732*

            
	
              Emergency
      Phone With Alternate Number Calling Capability

            	
              09/684831

            	
              7092695*

            
	
              Emergency
      Phone with Single-Button Activation

            	
              11/174191

            	
              7251471*

            
	
              Emergency
      Phone With Single Button Activation

            	
              11/830398

            	
              Pending *

            
	
              Emergency
      Phone for Automatically Summoning Multiple Emergency Response
      Services

            	
              09/173645

            	
              6226510*

            
	
              COMBINATION
      EMERGENCY PHONE AND PERSONAL AUDIO DEVICE

            	
              09/185191

            	
              6285867*

            
	
              ALARM
      AND ALARM MANAGEMENT SYSTEM FOR REMOTE TRACKING DEVICES

            	
              11/486992

            	
               Pending*

            
	
              A
      Remote Tracking Device and a System and Method for Two-Way Voice
      Communication Between the Device and a Monitoring Center

            	
              11/486989

            	
               Pending*

            
	
              A
      Remote Tracking System with a Dedicated Monitoring Center

            	
              11/486976

            	
               Pending*

            

    

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Foreign
Patents and Applications

    

    
      	
              Title

            	
              Application
      No.

            	
              Patent/
      Registration No.

            
	
              A
      Remote Tracking System with a Dedicated Monitoring Center -
      EPO

            	
              07812596.0

            	
               Pending*

            
	
              A
      Remote Tracking System with a Dedicated Monitoring Center - Brazil

            	
              PI0714367.2

            	
               Pending*

            
	
              Emergency
      Phone with Single-Button Activation - Japan

            	
              2001-571568

            	
               Pending*

            
	
              Emergency
      Phone with Single-Button Activation - China

            	
              01807350.6

            	
              01807350.6*

            

    

     

    

    
      	
              *

            	
              The
      inclusion of this patent or patent application as an RMDX CNS Patent is
      limited to issued claims that do not fall within the definition of RMDX
      Carve-Outs, as defined in section 1.15 of the Settlement Agreement between
      the parties.

            

    

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    Exhibit
I

    

    License
Base Revenues

    

    For
purposes of section 1.19 of the Settlement Agreement entered into between RMDX
and STOP, License Base Revenues shall be calculated as set forth in this Exhibit
I.

    

    
      
        	
                1.

              	
                License
      Base Revenues    Subject
      to the provisions of sections 2 and 3 below, License Base Revenues shall
      consist of any and all revenues realized by RMDX and its Subsidiaries from
      the use, sale, importation, lease, distribution or furnishing of any of
      the following:

              

      

    

     

    
      	
               
      

            	
              1.1.

            	
              Revenues
      from any activated locational tracking device that utilizes GPS to
      determine its location and is supported entirely about a single limb of
      the monitored person, regardless of brand or manufacturer (hereinafter the
      “One Piece Tracking Device”).

            

    

     

    
      	
               
      

            	
              1.2.

            	
              Revenues
      from any accessory related to a One Piece Tracking Device, including but
      not limited to related, interactive beacons and victim
      devices.

            

    

     

    
      	
               
      

            	
              1.3.

            	
              Revenues
      from locational tracking database services related to a One Piece Tracking
      Device in section 1.1 or accessory in section
  1.2.

            

    

     

    
      	
               
      

            	
              1.4.

            	
              If
      License Base Revenues are realized from RMDX or SecureAlert Contracts with
      independent third parties, such License Base Revenues shall be the per
      diem rate for each activated covered unit per day, as reflected in the
      respective contract, provided that the resulting royalty is not less than
      the minimum per day royalty per activated covered unit required by the
      Settlement Agreement.

            

    

     

    
      	
               
      

            	
              1.5.

            	
              If
      License Base Revenues are realized by RMDX through intercompany transfers
      or charges, such License Base Revenues shall be the greater of (i) $XXXXX
      per activated covered unit per day, or (ii) the actual contractual
      intercompany charge to that subsidiary related to each individual device,
      but not less than minimum per day royalty per activated covered unit
      required by the Settlement
Agreement.

            

    

     

    
      2.            
Non-Covered
Revenues    License
Base Revenues shall not
include the following:

    

     

    
      	
               
      

            	
              2.1.

            	
              Revenues
      from any devices, accessories and services not falling within section 1
      above.

            

    

     

    
      	
               
      

            	
              2.2.

            	
              Revenues
      from idle One Piece Tracking Devices provided the per day revenue
      therefrom is less than $XXXXX.

            

    

     

    
      	
               
      

            	
              2.3.

            	
              Revenues
      from non-GPS devices not related to GPS device deployment described above
      (e.g. AMS - SCRAM units, drug or alcohol
  devices).

            

    

     

     

    
      PORTIONS
OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION.  XXXXX
INDICATES REDACTED LANGUAGE.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              2.4.

            	
              Revenues
      from non-GPS related House Arrest devices, wherein the device worn by the
      person does not have a GPS
receiver.

            

    

     

    
      	
               
      

            	
              2.5.

            	
              Revenues
      from non-offender – exclusively consumer based services (home security,
      healthcare, Personal Emergency Response Systems,
  etc.).

            

    

     

    
      	
               
      

            	
              2.6.

            	
              Revenues
      from private probation, case management and related services, subject to
      section 3 below.

            

    

     

    
      	
               
      

            	
              2.7.

            	
              Revenues
      from all other products or services, which are unrelated to GPS device
      deployments on a single limb and/or for auxiliary support devices/services
      related thereto.

            

    

     

    
      	
               
      

            	
              2.8.

            	
              Revenues
      related to lost or stolen devices, and itemized billings for: freight
      and/or shipping charges, applicable federal, state and local sales and use
      taxes, insurance, customs and export
duties.

            

    

     

    
      	
               
      

            	
              2.9.

            	
              Revenues
      from any devices solely used to track inanimate
  objects.

            

    

     

    
      	
              3.

            	
              Treatment of License
      Base Revenues Mixed With Revenues From Private Probation, Case Management
      and Related Services

            

    

     

    
      	
               
      

            	
              3.1.

            	
              The
      parties acknowledge that RMDX may provide private probation, case
      management or related services in conjunction with products or services
      that generate License Base Revenues.  The parties further
      acknowledge that the contracts for such services may, or may not, include
      an express allocation of value to License Base
  Revenues.

            

    

     

    
      	
               
      

            	
              3.2.

            	
              When
      RMDX provides private probation, case management or related services
      (“Probation and Case Management Services”) in conjunction with products or
      services that generate License Base Revenues, License Base Revenues shall
      be calculated as follows:

            

    

     

    
      	
               
      

            	
              3.2.1.

            	
              If
      an applicable contract expressly allocates percentages or dollar values
      between Probation and Case Management Services and  License Base
      Revenues, License Base Revenues shall include the greater of the express
      allocation to License Base Revenues or be deemed to include revenues in an
      amount sufficient to produce a royalty not less than the minimum per
      covered activated unit per day royalty provided for in the Settlement
      Agreement.

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      
        	
                 
      

              	
                3.2.2.

              	
                If
      the applicable contract does not expressly allocate percentages or dollar
      values between Probation and Case Management Services
      and  License Base Revenues, License Base Revenues shall be
      deemed to include revenues in an amount sufficient to produce a royalty
      not less than the minimum per covered activated unit per day royalty
      provided for in the Settlement
Agreement.

              

      

       

    

    
      	
              4.

            	
              Reporting

            

    

     

    
      	
               
      

            	
              4.1.

            	
              RMDX
      shall report License Base Revenue in the Management
      Discussion and Analysis section of its SEC 10-K and 10-Q filings as
      follows:

            

    

     

    “For the _____ quarter or year ended
Month, Day and Year, revenue from one piece activated GPS tracking devices
supported entirely about a single limb of the monitored person equated to
$__________.”

     

    
      	
               
      

            	
              4.2.

            	
              RMDX
      will provide STOP with a quarterly report summarizing the royalty payments
      for the current quarter and any adjustments to the rolling advance
      required by section 5 of the Settlement
  Agreement.

            

    

     

    
      	
               
      

            	
              4.3.

            	
              RMDX
      will provide STOP with a separate and confidential report each quarter,
      which will summarize and reconcile the revenues associated with sections
      1, 2, and 3 above, including all individual billable unit days supporting
      the revenues reported herein.  The report will be produced in a
      format mutually acceptable to both parties.  The purpose of this
      separate report will only be to allow STOP to confirm that RMDX has
      calculated royalties consistent with the terms of the Settlement
      Agreement. The content of this report is strictly confidential and shall
      not be used or disclosed by STOP for any purpose other than to confirm
      that RMDX has calculated royalties consistent with the provisions of the
      Settlement Agreement.

            

    

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    RMDX Quarterly Summary
Report to STOP

     

    
      	
              RMDX
      Revenues for the YE/QE 00/00/00

            	
              RMDX
      Revenues

            	
              Rolling
      Advance Adjustment (if any)

            
	
              License
      Base Revenues

            	
              $A

            	
              $ +
      / -

            
	
              Revenues
      from monitoring services not within License Base Revenues

            	
              $B

            	
              N/A

            
	
              Revenues
      from case management and other related services

            	
              $C

            	
              N/A

            
	
              TOTAL
      ties to filings

            	
              $A
      + $B + $C

            	
              $
      +/-

            

    

    

     

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Exhibit
K

    

    UNITED
STATES DISTRICT COURT

    EASTERN
DISTRICT OF TEXAS

    MARSHALL
DIVISION

    

    
      	
              SATELLITE
      TRACKING OF PEOPLE, LLC (a/k/a STOP, LLC) and MICHELLE ENTERPRISES,
      LLC,

               

              Plaintiff,

               

              v.

               

              PRO
      TECH MONITORING, INC., OMNILINK SYSTEMS, INC., and SECUREALERT,
      INC.,

               

              Defendants.

            	
              )

              )

              )

              )

              )

              )

              )

              )

              )

              )

              )

              )

              )

               

            	
               

               

              CASE
      NO. 2:08-CV-116 (CE)

               

               

                        JURY
      TRIAL DEMANDED

               

               

               

            

    

    
      

    

    
      
        

      

    ORDER
DISMISSING CLAIMS AND COUNTERCLAIMS

    WITH
RESPECT TO SECUREALERT WITH PREJUDICE

    

    Upon the
written Stipulation of Plaintiffs and Counterclaim-Defendants Satellite Tracking
of People, LLC and Michelle Enterprises, LLC (“collectively Plaintiffs”) and
Defendant and Counterclaim-Plaintiff SecureAlert, Inc. (“SecureAlert”) on file
herein,

    IT IS
HEREBY ORDERED that each claim asserted by Plaintiffs against SecureAlert in the
above-captioned matter, and each counterclaim and defense asserted by
SecureAlert against Plaintiffs in the above-captioned matter, are hereby
dismissed with prejudice, each party to bear its own attorneys’ fees and
costs.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    The Court
shall retain such jurisdiction over SecureAlert as is necessary to effectuate
the terms and conditions of the settlement agreement between Plaintiffs and
SecureAlert.

     

    SIGNED
this _____ day of ________________, 2010.

    

    

      
        	 
      	 
      	 
	 
      	
                CHARLES
      EVERINGHAM IV

              
	 
      	
                UNITED
      STATES MAGISTRATE JUDGE

              

      

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Exhibit
L

    

    RemoteMDx
Subsidiaries

    

    1.           SecureAlert,
Inc.

    2.           Midwest
Monitoring and Surveillance, Inc.

    3.           Court
Programs, Inc.

    4.           Court
Programs of Florida, Inc.

    5.           Court
Programs of Northern Florida, Inc.

    6.           Court
Programs of Illinois, Inc.

    

    

    STOP
Subsidiaries

    

    1.           Satellite
Tracking of People VQ LLC, a Delaware limited liability company

    2.           Verquis
LLC, a Delaware limited liability companyrmdx10q20091231ex10-27.htm

    
      Exhibit 10.27

    

    
      

      

    

    Sapinda

    

    

    

    November
25, 2009

    

    Mr. David
Derrick

    RemoteMDx,
Inc.

    150 West
Civic Center Drive

    Suite
400

    Sandy,
Utah  84070

    

    Dear Mr.
Derrick,

    

    We are
pleased that RemoteMDx, Inc., a Utah corporation (the "Company") has decided to
retain Sapinda UK Limited ("Sapinda") to provide general financial advisory
services to the Company in regards to the Company's desire to restructure $16
million of debt and raise a net $9 million from existing shareholders and
others.  This letter agreement ("Agreement") will confirm Sapinda's
acceptance of such retention and set forth the terms of our
engagement.  This Agreement also replaces and supersedes all previous
agreements both written and verbal between the Company and Sapinda.

    

    1.           Retention.  The
Company retains Sapinda as its financial advisor to provide general financial
advisory services, and Sapinda accepts such retention on the terms and
conditions set forth in this Agreement.  In such capacity, Sapinda
shall: (i) familiarize itself, to the extent appropriate and feasible, with the
business, operations, properties, financial condition, management and prospects
of the Company; (ii) advise the Company on matters relating to its
capitalization; (iii) evaluate alternative financing structures and
arrangements; (iv); review the Company’s presentation and marketing materials
and other materials used to present the Company to the investment community; (v)
coordinate with the Company in marketing non-deal road shows with existing and
potential investors, and (vi) provide such other financial advisory services
upon which the parties may mutually agree (hereafter collectively referred to as
the “Advisory
Services”).  It is expressly understood and agreed that Sapinda
shall be required to perform only those Advisory Services (i) as may be
necessary or desirable in connection with its engagement hereunder and therefore
may not perform all of the tasks enumerated above during the term of this
Agreement and (ii) which do not require any banking or financial services
license in the US, Germany or elsewhere.  Moreover, it is understood
that Sapinda’s tasks may not be limited to those enumerated in this paragraph,
and that any additional services requested will be contemplated under a separate
agreement.

    

    2.           Information.  In
connection with Sapinda’s rendering the Advisory Services hereunder, the Company
will cooperate with Sapinda and furnish Sapinda upon request with all
information regarding the business, operations, properties, financial condition,
management and prospects of the Company (all such information so furnished being
the “Information”) which
Sapinda deems appropriate and will provide Sapinda with access to the Company’s
officers, directors, employees, independent accountants and legal
counsel.  The Company represents and warrants to Sapinda that all
Information made available to Sapinda hereunder will be complete and correct in
all material respects and will not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein not misleading in light of the circumstances under which such statements
are or will be made.  The Company further represents and warrants that
any projections and other forward-looking information provided by it to Sapinda
will have been prepared in good faith and will be based upon assumptions which,
in light of the circumstances under which they are made, are
reasonable.  The Company recognizes and confirms that Sapinda: (i)
will use and rely primarily on the Information and on information available from
generally recognized public sources in performing the services contemplated by
this Agreement without having independently verified the same and that no
information shall be furnished to outside investors by Sapinda which could be
qualified as insider information under applicable rules; (ii) does not assume
responsibility for the accuracy or completeness of the Information and such
other information; and (iii) will not make an appraisal of any assets of the
Company.  Any advice rendered by Sapinda pursuant to this Agreement
may not be disclosed publicly without Sapinda’s prior written
consent.  Sapinda hereby acknowledges that certain of the Information
received by Sapinda may be confidential and/or proprietary, including
Information with respect to the Company’s technologies, products, business
plans, marketing, and other Information which must be maintained by Sapinda as
confidential.  Sapinda agrees that it will not disclose such
confidential and/or proprietary Information to any other companies in the
industry in which the Company is involved.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    3.           Indemnification.  The
Company agrees to indemnify Sapinda in accordance with the indemnification and
other provisions attached to this Agreement as Exhibit A (the “Indemnification Provisions”),
which provisions are incorporated herein by reference and shall survive the
termination or expiration of this Agreement.

     

    4.           Compensation.  As
consideration for Sapinda's services pursuant to this Agreement, Sapinda shall
be entitled to receive, and the Company agrees to pay Sapinda, the following
compensation:

    

    a.           In
consideration of Sapinda's rendering of the Advisory Services, the Company shall
pay a non-refundable cash retainer of $300,000.00 (the "Initial Retainer") to
Sapinda upon the signing of this Agreement and an additional $2,000,000 upon
Sapinda aiding the Company in restructuring at least $14 million of its debts
into equity and raising an additional $6,000,000 of equity ("2nd
Payment").  Thereafter, Sapinda will receive payments of $100,000 for
each $1,000,000 raised of equity up to a maximum of $700,000 ("Installment
Payments").  The Initial Retainer, 2nd Payment and Installment
Payments shall be paid to Sapinda in cash (USD) by certified check, or by wire
transfer of immediately available funds.

    

    b.           In
addition, in consideration of Sapinda's rendering of the Advisory Services, the
Company shall deliver a warrant to Sapinda (the "Advisory Warrant") to purchase
4,000 RemoteMDx Series D Preferred Shares ("Preferred Shares").  Such
Advisory Warrant will be issued to Sapinda upon the execution of this Agreement,
and shall provide, among other things, that the Advisory Warrant shall (i) be
exercisable at an exercise price equal to $500 per share; (ii) expire four (4)
years from the date of issuance; and (iii) include such other terms as are
normal and customary for warrants of this type.

    

    5.           Expenses.  In
addition to payment to Sapinda of the compensation set forth in Section 4
hereof, the Company shall promptly upon request from time to time reimburse
Sapinda for all reasonable expenses including the reimbursement of fees and
expenses paid to third parties necessary for Sapinda to assist the Company in
restructuring of its debts and raising of $13 million of new
equity.  In particular, the reimbursement of expenses paid to the
consulting firm, Incucomm, for analyzing RemoteMDx's market, business plan, and
operations shall be reimbursed to Sapinda.  In addition, the Company
shall reimburse Sapinda all expenses (including without limitation, fees and
disbursements of counsel and all travel and out of pocket expenses) incurred by
Sapinda in connection with its engagement hereunder.  Said expenses
will be paid and not exceed as follows: December 31, 2009 expenses of $700,000;
and by the conclusion of the raise of $13,000,000 an additional amount not to
exceed $300,000.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    6.           Future
Rights.  To the extent Sapinda shall identify third parties to
the company which subsequently invest more than $ 10 million in aggregate, the
following shall apply:  As additional consideration for its services
hereunder and as an inducement to cause Sapinda to enter into this Agreement, if
at any time during the term of this Agreement or within eighteen (18) months
from the effective date of the termination of this Agreement, the Company
proposes to entrust third parties with the kind of services Sapinda has been
engaged with herein (a “Financial Advisory
Engagement”), the Company shall offer to retain Sapinda as its exclusive
advisor in connection with such Financial Advisory Engagement or other matter,
upon such terms as the parties may mutually agree, such terms to be set forth in
a separate engagement letter or other agreement between the
parties.  Such offer shall be made in writing in order to be
effective.  The Company shall not offer to retain any other advisor in
connection with any such Financial Advisory Engagement or other matter on terms
more favorable than those discussed with Sapinda without offering to retain
Sapinda on such more favorable terms.  Sapinda shall notify the
Company within 30 days of its receipt of the written offer contemplated above as
to whether or not it agrees to accept such retention.  If Sapinda
should decline such retention, the Company shall have no further obligations to
Sapinda, except as specifically provided for herein.

    

    7.           Other
Activities.  The Company acknowledges that Sapinda has been,
and may in the future be, engaged to provide services as finder and advisor to
other companies in the industry in which the Company is
involved.  Subject to the confidentiality provisions of Sapinda
contained in Section 2 hereof, the Company acknowledges and agrees that nothing
contained in this Agreement shall limit or restrict the right of Sapinda or of
any member, manager, officer, employee, agent or representative of Sapinda, to
be a member, manager, partner, officer, director, employee, agent or
representative of, investor in, or to engage in, any other business, whether or
not of a similar nature to the Company’s business, nor to limit or restrict the
right of Sapinda to render services of any kind to any other corporation, firm,
individual or association.  Sapinda may, but shall not be required to,
present opportunities to the Company.

    

    8.           Termination; Survival of
Provisions.  The term of this Agreement shall be six (6) months
commencing on the date of the execution of this
Agreement.  Notwithstanding the foregoing, either Sapinda or the
Company may terminate this Agreement for any reason by observing a notice period
of fifteen (15) days to the end of a calendar month (the “Termination
Date”).  In the event of such termination prior to the
completion of the six (6) month term, the Company shall pay and deliver to
Sapinda for all expenses incurred by Sapinda in connection with its services
hereunder pursuant to Section 4 hereof.  Moreover, as stated in
Section 3 and 4, irrespective of when the Agreement is terminated, all such fees
and reimbursements due to Sapinda pursuant to the immediately preceding sentence
shall be paid to Sapinda on or before the Termination Date (in the event such
fees and reimbursements are earned or owed as of the Termination Date) or upon
the closing of a Financing or any applicable portion thereof (in the event such
fees are due pursuant to the terms of Section 3 and/or
hereof).  Notwithstanding anything expressed or implied herein to the
contrary: (i) any agency agreement entered into between Sapinda and the Company
may only be terminated in accordance with the terms thereof, notwithstanding an
actual or purported termination of this Agreement, and (ii) the terms and
provisions of Sections 3, 4, 5 (including, but not limited to, the
Indemnification Provisions attached to this Agreement and incorporated herein by
reference), 6, 7, 8, 9, 10, 11 and 12 shall survive the termination of this
Agreement.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    9.           Notices.  All
notices provided hereunder shall be given in writing and either delivered
personally or by overnight courier service or sent by certified mail, return
receipt requested, or by facsimile transmission, if to Sapinda, to:

    

    Sapinda
UK Ltd.

    25 Park
Lane

    London
W1K 1RA

    United
Kingdom

    

    And if to
the Company, to the addresses, set forth on the first page of this Agreement,
Attention, Mr. David Derrick.  Any notice delivered personally or by
fax shall be deemed given upon receipt (with confirmation of receipt required in
the case of fax transmissions); any notice given by overnight courier shall be
deemed given on the next business day after delivery to the overnight courier;
and any notice given by certified mail shall be deemed given upon the second
business day after certification thereof.

    

    10.         Governing Law; Jurisdiction;
Waiver of Jury Trial.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be fully performed therein, without regard to conflicts
of law principles.  The Company irrevocably submits to the exclusive
jurisdiction of any court of the State of New York or the United States District
Court for the Southern District of the State of New York for the purpose of any
suit, action or other proceeding arising out of this Agreement, or any of the
agreements or transactions contemplated hereby, which is brought by or against
the Company, and agrees that service of process in connection with any such
suit, action or proceeding may be made upon the Company in accordance with
Section 9 hereof.  The parties hereby expressly waive all rights to
trial by jury in any suit, action or proceeding arising under this
Agreement.

    

    11.         Amendments.  This
Agreement may not be modified or amended except in a writing duly executed by
the parties hereto.

    

    12.         Headings.  The
section headings in this Agreement have been inserted as a matter of reference
and are not part of this Agreement.

    

    13.         Successors and
Assigns.  The benefits of this Agreement shall inure to the
parties hereto, their respective successors and assigns and to the indemnified
parties hereunder and their respective successors and assigns, and the
obligations and liabilities assumed in this Agreement shall be binding upon the
parties hereto and their respective successors and
assigns.  Notwithstanding anything contained herein to the contrary,
neither Sapinda nor the Company shall assign any of its obligations hereunder
without the prior written consent of the other party, provided however that
Sapinda shall be entitled to transfer its rights and duties under this agreement
to any other legal entity.

    

    14.         No Third Party
Beneficiaries.  This Agreement does not create, and shall not
be construed as creating, any rights enforceable by any person or entity not a
party hereto, except those entitled to the benefits of the Indemnification
Provisions.  Without limiting the foregoing, the Company acknowledges
and agrees that Sapinda is not being engaged as, and shall not be deemed to be,
an agent or fiduciary of the Company’s stockholders or creditors or any other
person by virtue of this Agreement or the retention of Sapinda hereunder, all of
which are hereby expressly waived.

    

    15.         Waiver.  Any
waiver or any breach of any of the terms or conditions of this Agreement shall
not operate as a waiver of any other breach of such terms or conditions or of
any other term or condition, nor shall any failure to insist upon strict
performance or to enforce any provision hereof on any one occasion operate as a
waiver of such provision or of any other provision hereof or a waiver of the
right to insist upon strict performance or to enforce such provision or any
other provision on any subsequent occasion.  Any waiver must be in
writing.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    16.           Counterparts.  This
Agreement may be executed in any number of counterparts and by facsimile
transmission, each of which shall be deemed to be an original instrument, but
all of which taken together shall constitute one and the same
agreement.  Facsimile signatures shall be deemed to be original
signatures for all purposes.

    

    If the
foregoing correctly sets forth our agreement, please sign the enclosed copy of
this Agreement in the space provided below and return it to us.

    

    

    

    
      	
               

            	
              Very
      truly yours,

            
	
               

            	
              Sapinda UK
      Limited

            
	 
      	 
      
	 
      	 
      
	
               

            	
              By:
      /s/  Rene
      Klinkhammer                          
      

            
	
               

            	             
      Rene Klinkhammer

    

    

    

    

    Agreed
to and accepted this 25 day of November, 2009

    

    RemoteMDx,
Inc.

    

    

    

    By: /s/ David G.
Derrick___________________________

          Mr.
David Derrick, CEO and Chairman

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