ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made this 14th day of January, 2009 by and between RemoteMDx, Inc., a Utah corporation having an office at 150 West Civic Center Drive, Suite 400, Sandy, Utah 84070 ("Parent"), SecureAlert Enterprise Solutions, Inc., a Utah corporation having an office at 150 West Civic Center Drive, Suite 400, Sandy, Utah 84070 (“Buyer”), Bishop Rock Software, Inc., a California corporation having an office at 22222 Eucalyptus Lane, Lake Forest, California 92630 ("Seller"), and Peter C. Sarna, II, Sol Lizarbram, Steven Florek, Clydesdale Partners I, LLC, a Delaware limited liability company, and Clydesdale Partners II, LLC, a Delaware limited liability company (each a “Stockholder” and collectively “Stockholders”), with reference to the following:

A.         Seller desires to sell and Buyer desires to purchase substantially all of the assets of Seller used in the operation of Seller’s software subscription business (the “Business”), on the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements herein contained, and intending to be legally bound hereby, the parties hereby agree as follows:

1.          SALE OF ASSETS; ASSUMPTION OF LIABILITIES

1.1        Sale of Assets .  (a)   Purchased Assets .  At the Closing (as defined in Section 1.3 below), Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall accept and purchase, all of Seller's right, title and interest in and to all the tangible and intangible assets of Seller as of the Closing (the “Purchased Assets”), insofar as they relate to, are used in or are necessary for the operation of the Business as it is presently conducted and as reflected in Seller’s balance sheet as of September 30, 2008 attached hereto as Exhibit A (the "Balance Sheet") and/or the List of Purchased Assets attached hereto as Exhibit B , including, without limitation, the Assumed Contracts (as defined in Section 2.1(f) below), all furniture, fixtures and equipment, all work in process, inventory and stock in trade, all computer hardware, peripherals and software, all service parts, vehicles and machinery, all accounts receivable, goodwill, customer order backlog, purchase orders, sales leads, customer lists and customer agreements, all engineering files, specifications and drawings, technology, trademarks, trade names, trade secrets, formulae, know-how, processes, patents, patent licenses and techniques, all of Seller's operating permits, licenses and  governmental authorizations necessary to conduct the Business as presently conducted, all of Seller's prepaid expenses and deposits with respect to the Purchased Assets (the "Prepaid Amounts"), and copies of all of Seller's books and records that relate to the Purchased Assets.

(b)         Excluded Assets .  Notwithstanding the foregoing, Buyer shall not purchase, and Seller shall not be deemed to sell, Seller’s cash or cash equivalents (the “Excluded Assets”).

1.2        Assumption of Liabilities .  At the Closing, Buyer shall not assume, nor does Buyer agree to pay, any debts, liabilities or obligations of Seller of any kind whatsoever, except for Seller’s accounts payable as of the Closing Date as set forth on Exhibit C attached hereto in an amount not to exceed $80,798, that certain lease for Dell computer equipment requiring monthly payments after the Closing of approximately $200, and the liabilities arising from and after the Closing under the Assumed Contracts (the “Included Liabilities”).  In particular, and without limiting the generality of the foregoing, Buyer shall not assume, and the Included Liabilities shall not include, any liability for any accounts payable as of the Closing Date in excess of $80,798, any other liabilities reflected on the Balance Sheet, any obligations to pay or contribute any sums to any pension or retirement or similar plan, any compensation or severance or other benefits of any kind due to employees of Seller through the Closing Date (except as set forth on Exhibit C ) or as the result of the Closing, or any tax liabilities.  All of the foregoing, and any other liabilities of Seller, known or unknown, that are not identified herein as Included Liabilities, shall be the responsibility of Seller, and Seller and Stockholders agree to indemnify and hold Buyer harmless against any and all such liabilities, as provided in Section 5 below.

1.3        Closing .  The closing of the purchase and sale of the Purchased Assets (the "Closing") will take place on January 14, 2009 (the "Closing Date") at the offices of Parent, unless another date or place is agreed to in writing by the parties hereto.

(a)         Seller Deliveries .  Seller shall deliver to Buyer at the Closing: (i) a properly executed Bill of Sale in the form attached hereto as Exhibit D ; (ii) such other documents and instruments of conveyance of title, in form reasonably acceptable to Buyer, sufficient to pass good and marketable title to the Purchased Assets to Buyer, free and clear of all liens or encumbrances of any type or nature other than the lien for personal property taxes not yet due and payable; and (iii) consents executed by all necessary parties to permit Buyer to assume the Licenses and Seller's interest in the Assumed Contracts.

1.5        Tax Treatment .  It is the intention of the parties that the transactions contemplated herein shall constitute for tax purposes a tax deferred "reorganization" within the meaning of Section 368(a)(1)(C) of the Code.  The parties agree to take no position at any time which is inconsistent with such intention, except as otherwise required by law.  It is understood that none of the parties warrants to any of the others that the intended treatment will be obtained.

1.6        Further Cooperation .  From time to time after the Closing, Seller and Stockholders at Buyer's request and without further consideration, agree to execute and deliver or to cause to be executed and delivered such other instruments of transfer as Buyer may reasonably request to transfer to Buyer more effectively the right, title and interest in or to the Purchased Assets and to take or cause to be taken such further or other action as may reasonably be necessary or appropriate in order to effectuate the transactions contemplated by this Agreement.

2.          REPRESENTATIONS AND WARRANTIES

2.1        Representations and Warranties of Seller .  Seller and Stockholders represent and warrant to, and agree with, Parent and Buyer as follows:

(b)         Authority To Do Business .  Seller has the requisite corporate power and authority and is in possession of all licenses, permits, consents and approvals necessary to own, lease and operate the Purchased Assets and to carry on the Business as it is now being conducted.  Seller is duly qualified or licensed to do business, and is in good standing, in each jurisdiction where the failure to do so would be materially adverse to Seller or the Business.

(c)         Binding Obligation .  Seller and each Stockholder have all requisite corporate and other power and authority to enter into and perform its obligations under this Agreement, and to carry out the transactions contemplated hereby and thereby.  The Board of Directors of Seller has duly authorized the execution and delivery of this Agreement and the transactions contemplated hereby, and no other proceedings on the part of Seller or any Stockholder are necessary to authorize this Agreement and the transactions contemplated hereby. This Agreement has been duly executed and delivered by Seller and Stockholders and constitutes a valid and binding obligation of Seller and each Stockholder enforceable in accordance with its terms.  The execution, delivery and performance by Seller and each Stockholder of this Agreement do not and will not conflict with, or result in any violation of or default under (i) any provision of the Articles of Incorporation or Bylaws of Seller, (ii) any provision of any ordinance, rule, regulation, judgment, order, decree, agreement, instrument or license applicable to Seller or any Stockholder or to any of its properties or assets, or (iii) any contract, agreement or instrument to which Seller or any Stockholder is a party.  No consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, is required by or with respect to Seller or any Stockholder in connection with its execution, delivery or performance of this Agreement.

(d)         Inventories .  All inventories included in the Purchased Assets have been or will be valued at the lower of cost or market in accordance with generally accepted accounting principles consistently applied (“GAAP”), and consist of items of a quantity and quality that are usable or salable in the ordinary course of the Business.

(e)         Title to Property .  Except for the lien for personal property taxes not yet due, Seller has good and marketable title to all of the Purchased Assets, in each case free and clear of all mortgages, liens, security interests, pledges, charges or encumbrances of any nature whatsoever.

(f)          Contracts .  Except for the contracts described on Schedule 2.1(f) (collectively, the "Contracts"), Seller is not a party to or bound by any lease, agreement, contract or other commitment which relates in any way to the Business or the Purchased Assets.  Each Contract is a valid and binding obligation of Seller and is in full force and effect.  Seller has performed all material obligations required to be performed by it to date under the Contracts, is not (with or without the lapse of time or the giving of notice, or both) in breach or default in any material respect thereunder and is not alleged to be in breach or default in any material respect thereunder.  All Contracts are in the name of Seller, and all Contracts that are to be assumed by Buyer as of the Closing as set forth under the heading “Assumed Contracts” on Schedule 2.1(f) (the “Assumed Contracts”) will be effectively transferred to and assumed by Buyer at the time of the Closing.

(g)         Litigation .  There are no lawsuits, claims, proceedings or investigations pending or threatened by or against or affecting Seller, Stockholder or any of their properties, assets, operations or business that could in any way affect the transactions contemplated by this Agreement or the value to Buyer of the Purchased Assets or Buyer's right to utilize the Purchased Assets.

(i)          Employee and Related Matters .  There are no employment-related claims, actions, proceedings or investigations pending or threatened against or relating to Seller before any court, governmental, regulatory or administrative authority or body, or arbitrator or arbitration panel.  Seller is not subject to any outstanding order, writ, judgment, injunction, decision, award, compliance order, consent decree, conciliation agreement, settlement agreement, affirmative action plan, determination letter or advisory of any court, governmental, regulatory or administrative authority or body, or arbitrator or arbitration panel.  No collective bargaining agreement is binding on Seller. Seller has not experienced any material work stoppage or other material labor difficulty.

(j)          Absence of Changes or Events .  Since September 30, 2008, the Business has been conducted in the ordinary course and there has not been any material adverse change in the financial condition, results of operations, business or assets of the Business or the value or condition of the Purchased Assets.  Without limiting the generality of the foregoing, since September 30, 2008 Seller has not, insofar as the Business or the Purchased Assets are concerned, acquired or agreed to acquire any assets which are material, individually or in the aggregate, to Seller, except in the ordinary course of business consistent with prior practice; sold, leased or otherwise disposed of any of its assets which are material, individually or in the aggregate, to Seller, except in the ordinary course of business consistent with prior practice; or sustained any material loss or damage to its properties, whether or not insured.

(k)         Compliance with Laws .  Seller is not in violation with respect to its conduct of the Business or its operation of the Purchased Assets of any law, order, ordinance, rule or regulation of any governmental authority applicable to Seller.

(l)          No Broker's or Finder's Fees .  No agent, broker, investment banker, person or firm acting on behalf of Seller or any Stockholder is or will be entitled to any broker's or finder's fee or any other commission or similar fee in connection with any of the transactions contemplated hereby.

(m)        Employee Benefit Plans .  There are no plans of Seller in effect for pension, profit sharing, deferred compensation, severance pay, pay for vacation, sick time or other time off, bonuses, stock options, stock purchases, or any other form of retirement or deferred benefit, or for any health, accident or other welfare plan, as to which Buyer will become liable as a result of the transactions contemplated hereby.

(n)         Customers .   Schedule 2.1(n) contains a true and correct list of Seller's largest twenty (20) customers in the Business for 2008.  Seller has no information which would cause it to believe that any such customer will not continue to do business with Buyer after the Closing upon substantially the same terms and at such volumes as such customer did business with Seller prior to the Closing.

(o)        Condition of Equipment .  The furniture, fixtures, vehicles, machinery, tools and equipment included in the Purchased Assets are being sold AS IS.

(p)         Trademarks and Other Intellectual Property .  Except as set forth in Schedule 2.1(p) , there are no patents, trademarks, service marks, trade names, copyrights, or applications therefor or registrations thereof ("Intellectual Property"), which have been used or owned within the last three years by Seller with respect to the Business.   Schedule 2.1(p) contains a true and complete description of the rights of Seller with respect to each of such items of Intellectual Property.  Except as set forth in Schedule 2.1(p) , Seller has sole, full and clear title to all of such items of Intellectual Property, without any liens, encumbrances or restrictions whatsoever, and upon closing of the transactions contemplated hereby, Buyer will possess sole, full and clear title to all of such items of Intellectual Property, without any liens, encumbrances or restrictions whatsoever.  To the best of its knowledge, Seller is not and, during the last two years, has not, with respect to the Business or the Purchased Assets (i) infringed or violated any trademark, service mark, trade name, patent or copyright or other Intellectual Property right; or (ii) unlawfully or improperly used any trade secrets belonging to any third party.

(q)         Software and Information Systems .  For purposes of this Section 2.1(q), the term “Software” means all computer software programs, program specifications, charts, procedures, source codes (including annotations), object codes, input data, diagnostic and other routines, data bases and report layouts and formats, record file layouts, diagrams, functional specifications and narrative descriptions and flow charts owned or used by Seller or employed in the Business.  For the purposes of this Section 2.1(q), the term “computer software programs” includes any set of arithmetic and/or logical instructions meant to run on, or to control the operation of any computer (i) whether those instructions are a complete program, a collection of programs making up a subsystem or system, or are merely subroutines or meant to operate in conjunction with other software, and (ii) whether such instructions must be run throughout another computer program before being useable on a computer, whether such instructions can be used at execution time only in conjunction with another computer program (i.e., an “interpreter”) or whether such instructions are in a form that can be run on a computer “as is”, except for any necessary interfaces with the computer’s microcode, operating system or reference-resolving routines.

Schedule 2.1(q) sets forth an accurate, correct and complete list and summary description of all Software and identifies specifically (A) Software as to which the source code is owned by Seller (“Owned Software”); (B) software which is licensed to Seller by third parties and as to which Seller is in possession of the source code; (C) Software which is licensed to Seller by third parties but as to which Seller does not have possession of the source code; (D) Software purchased by or licensed to Seller solely for resale or sublicense to its customers or which a third party licenses or sells directly to such customers; (E) Software in which Seller has any use, possessory or proprietary rights other than as set forth in (A) through (D) above (Software described in the foregoing subsections (B) through (E) being referred to collectively as the “Third Party Software”); (F) any other Software employed in the Business which is not Owned Software or Third Party Software, other than so called “shrink wrap” Software which in any event is not a component of the Software license or sold to Seller’s customers; (G) in each case whether the particular component of Software is employed in the Software licensed or sold by Seller to its customers; and (H) all Software development projects undertaken within the past two years with persons other than employees, together with an identification of the persons undertaking such projects.   Schedule 2.1(q) also identifies all licenses, contracts and other arrangements with respect to the Third Party Software (collectively the “Third Party Licenses”).

(r)          Environmental Matters .  (i) There have been no private or governmental claims, citations, complaints, notices of violation or letters made, issued to or threatened against Seller by any governmental entity or private or other party for the impairment or diminution of, or damage, injury or other adverse effects to, the environment or public health resulting, in whole or in part, from the ownership, use or operation of the Business.

(ii)        Seller has duly complied with, and the Property is in compliance with, the provisions of all material federal, state and local environmental, health and safety laws, codes and ordinances and all rules and regulations promulgated thereunder applicable to Seller.  Seller agrees to provide Buyer with the most recent Fire Marshal’s report and to identify the licensed hazardous waste hauler used to dispose of any hazardous materials.

(iii)        Seller has been issued all required federal, state and local permits, licenses, certificates and approvals with respect to the Property relating to (A) air emissions, (B) discharges to surface water or groundwater, (C) noise emissions, (D) solid or liquid waste disposal, (E) the use, generation, storage, transportation or disposal of hazardous materials or hazardous wastes, or (F) other environmental, health or safety matters.

(iv)        Seller has not received any notice of, and neither knows of nor suspects, any fact(s) which might constitute violation(s) of any federal, state or local environmental, health or safety laws, codes or ordinances, and any rules or regulations promulgated thereunder, which relate to the use, ownership or occupancy of the Property, and Seller is not in violation of any covenants, conditions, easements, rights of way or restrictions affecting the Property or any rights appurtenant thereto.

(v)        Seller has provided Buyer with true, accurate and complete copies of any written information in the possession of Seller that pertains to the environmental history of the Property. Seller shall also promptly furnish to Buyer true, accurate and complete copies of any sampling and test results which may be obtained by Seller prior to the Closing from all environmental and/or health samples and tests taken at and around the Property.

(s)         Financial Information .  Attached as Schedule 2.1(s) are the Balance Sheet and Seller’s balance sheets as of December 31, 2006 and 2007 and September 30, 2008, and income statements for the periods then ended (collectively, the “Financial Statements”).  The Financial Statements have been prepared in accordance with GAAP, present fairly the financial condition of Seller as of the respective dates thereof and the performance of Seller for the respective periods therein, are correct and complete, and are consistent with the books and records of Seller (which books and records are correct and complete).

(t)          Absence of Undisclosed Liabilities .  Neither Seller nor any Stockholder has any liabilities or obligations in connection with the Business or the Purchased Assets, either direct or indirect, matured or unmatured, or absolute, contingent or otherwise, except: (i) those liabilities or obligations set forth in the Balance Sheet, and (ii) liabilities and obligations of a similar nature arising in the ordinary course of the Business since the date of the Balance Sheet.  For purposes of this Agreement, the term "liabilities" shall include, without limitation, any direct or indirect indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost, expense, obligation or responsibility, fixed or unfixed, known or unknown, asserted or unasserted, liquidated or unliquidated, secured or unsecured.

(u)         Taxes .  There are no taxes on or measured by income or gross receipts or franchise, real and personal property, employment, excise, sales and use or other taxes of any kind properly attributable to periods up to and including the Closing for which Buyer could be held liable which have not been or will not (prior to the Closing) be paid by Seller.  Seller will pay all said taxes attributable to periods up to and including the Closing whenever assessed and Seller and each Stockholder will indemnify Buyer for any costs, expenses, fees or charges whatsoever incurred by Buyer in connection therewith, all as more fully provided in Section 5 below.

(v)         Insurance .   Schedule 2.1(v) contains an accurate and complete description of all policies of fire, liability, worker's compensation and other forms of insurance owned or held by Seller in connection with the Business or the Purchased Assets.  All such policies are in full force and effect; are sufficient for compliance with all requirements of law and of all agreements to which Seller is a party; are valid, outstanding and enforceable policies; provide full insurance coverage for the assets and operations of Seller; will remain in full force and effect through the respective dates set forth in Schedule 2.1(v) ; and will not in any way be affected by, or terminate or lapse by reason of, the transactions contemplated by this Agreement.

2.2        Representations and Warranties of Buyer .  Buyer represents and warrants to, and agrees with, Seller and Stockholders as follows:

(a)         Organization .  Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Utah.

(b)         Authority To Do Business .  Buyer has all requisite power and authority to own or lease and operate its properties and to carry on its business as now conducted.

(c)         Binding Obligation .  Buyer has all requisite corporate and other power and authority to enter into and perform its obligations under this Agreement.  All corporate acts and other proceedings required to be taken by Buyer to authorize the execution, delivery and performance by Buyer of this Agreement, and the transactions contemplated hereby, have been duly and properly taken.  This Agreement has been duly executed and delivered by Buyer and constitutes the legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms.  The execution, delivery and performance by Buyer of this Agreement do not and will not conflict with, or result in any violation of or default under any provision of the Articles of Incorporation or Bylaws of Buyer, any provision of any law, ordinance, rule, regulation, judgment, order, decree, agreement, instrument or license applicable to Buyer or to its property or assets, or any contract, agreement or instrument to which Buyer is a party.  No consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, is required by or with respect to Buyer in connection with its execution, delivery or performance of this Agreement.

(d)         Litigation .  There are no lawsuits, claims, proceedings or investigations pending or, to the best knowledge of Buyer, threatened by or against or affecting Buyer or any of its properties, assets, operations or business which could in any way affect the transactions contemplated by this Agreement.

(e)         Compliance with Laws .  Buyer is not in violation with respect to the conduct of its business of any law, order, ordinance, rule or regulation of any governmental authority applicable to Buyer.

(f)          No Broker's or Finder's Fees .  No agent, broker, investment banker, person or firm acting on behalf of Buyer is or will be entitled to any broker's or finder's fee or any other commission or similar fee in connection with any of the transactions contemplated hereby.

2.3        Representations and Warranties of Parent .  Parent represents and warrants to, and agrees with, Seller and Stockholders as follows:

(a)         Organization .  Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Utah.

(b)         Authority To Do Business .  Parent has all requisite power and authority to own or lease and operate its properties and to carry on its business as now conducted.