LICENSE AGREEMENT

LICENSE AGREEMENT

This License Agreement (this “ Agreement ”) is made effective February 27, 2009 (the “ Effective Date ”) by and between RemoteMDx, Inc., a Utah corporation (“ RemoteMDx ” or “ Licensor ”) and Volu-Sol Reagents Corporation, a Utah corporation (“ Volu-Sol ” or “ Licensee ”).  Each of Licensor and Licensee may be referred to herein as a “ Party ” or together as the “ Parties .”

RECITALS:

WHEREAS , Licensor holds all rights in certain patents (as defined below, the “ Patents ”) and other intellectual property and has the right to grant the licenses contemplated by this Agreement;

WHEREAS , Licensor, under the Patents, has developed and holds all rights necessary to manufacture, market and distribute a GPS-based tracking and monitoring device used in the healthcare and personal security markets (collectively, the “ Market ”), such product and related versions thereof commonly known as MobilePAL (as defined below, the “ Product ”);

WHEREAS , Licensee is formerly a wholly-owned subsidiary of Licensor and Licensor divested Licensee in February 2009 (the “ Spin-Off ”);

WHEREAS , as part of the Spin-Off, Licensor assigned to Licensee all assets, tangible and intangible, related to the MobilePAL technology and business and the Product; and

WHEREAS , Licensor desires to grant to Licensee, and Licensee desires to accept, an exclusive, royalty-free, world-wide license to manufacture, market and distribute the Product and to otherwise exploit the Patents in the healthcare industry, subject to the terms and conditions of this Agreement.

NOW, THEREFORE , in consideration of the premises and the mutual covenants and promises set forth in this Agreement, the legal sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

1.              Grant of Exclusive Licenses and Other Rights

1.1            Exclusive Patent License .   Licensor hereby grants to Licensee within the Market the exclusive, perpetual, royalty-free, irrevocable, worldwide, transferable, sublicensable license of all rights of any kind conferred by the Patents, including, without limitation, the rights of any kind to, or conferred by, the Patents to (a) use or otherwise practice any art, methods, processes, and procedures covered by the Patents, (b) make, have made, use, offer to sell, sell, import, and otherwise distribute or dispose of any inventions, discoveries, products, services, or technologies covered by the Patents, (c) otherwise exploit any rights granted in the Patents and/or any invention or discovery described in the Patents, and (d) exclude other Persons from exercising any of such rights.

1.2            Assignment of Causes of Action and Other Rights .  Licensor hereby assigns, transfers and conveys to Licensee for the Market all right, title and interest in and to:

(a)           Rights to apply in any or all countries of the world for patents, certificates of invention, utility models, industrial design protections, design patent protections, or other governmental grants or issuances of any type related to any of the Patents and the inventions and discoveries therein;

(b)           All causes of action and enforcement rights of any kind (whether such claims, causes of action or enforcement rights are known or unknown; currently pending, filed, to be filed; or otherwise) under the Patents and/or under or on account of any of the Patents for past, current and future infringement of the Patents, including without limitation, all rights to (i) pursue and collect damages, profits and awards of whatever nature recoverable, (ii) injunctive relief, (iii) other remedies, and (iv) compromise and/or settle all such claims, causes of action and enforcement rights for such infringement by granting an infringing party a sublicense or otherwise; and

(c)           Rights to collect royalties or other payments under or on account of any of the Patents or any of the foregoing.

1.3            Product License .  Licensor hereby grants to Licensee for the Market, and Licensee accepts, an exclusive, perpetual, royalty-free, irrevocable, worldwide, transferable (subject to the provisions hereof), sublicensable license under the Licensed Intellectual Property to make, have made, market, distribute, sell and otherwise commercially exploit the Product, subject to all the terms and conditions of this Agreement.  As used in this Agreement, “exclusive” means that Licensor shall not, during the Term, have any right to make, have made, market, distribute, sell or otherwise commercially exploit the Product in the healthcare or personal safety industries or to authorize any affiliate or third party to do so.

1.4            Trademark Licenses .  

(a)           Licensor hereby grants to Licensee for the Market, and Licensee accepts, an exclusive, perpetual, royalty-free, irrevocable, worldwide, transferable (subject to the provisions hereof), sublicensable license to use the Licensed Trademarks in connection with the Product, Product Marketing Materials relating to the Product, subject to the terms and conditions of this Agreement.  Licensee may, at its option, place Licensed Trademarks on the Product.

(b)           Licensee shall comply with Licensor’s policies and guidelines for use of the Licensed Trademarks, as such policies and guidelines may be issued and revised from time to time, and Licensee shall comply with proper legal standards.  The initial or most prominent use of a Licensed Trademark in all materials shall be followed by the appropriate trademark symbol (® or TM). Licensee acknowledges that the good will and value of the Licensed Trademarks and Licensor’s name may be adversely affected unless the Product and Product Marketing Materials that use any Licensed Trademark meet the quality standards of Licensor.  Upon written request from Licensor, Licensee shall submit to Licensor for review, within a commercially reasonable time, samples of requested Products or Product Marketing Materials that make use of the Licensed Trademarks.  If so requested in writing, Licensee shall make any reasonable changes to such materials, provided that Licensee shall have no obligation to cease use of or destroy materials where the use of the Licensed Trademarks does not vary materially from any trademark use guidelines that are developed by Licensee and Licensor and where the quality of the materials is reasonably consistent with the quality of such materials produced by or for Licensor.

1.5            Copyright License .  Promptly after the Effective Date and from time to time thereafter upon reasonable written request from Licensee, Licensor shall furnish Licensee with electronic data files of artwork and information to create materials for use in connection with the marketing, distribution and sale of the (“ Product Marketing Materials ”).  Licensor hereby grants to Licensee, and Licensee accepts, under Licensor’s copyrights and other Intellectual Property Rights relating to the Product Marketing Materials, an exclusive, perpetual, royalty-free, irrevocable, worldwide, transferable (subject to the provisions hereof), sublicensable right to use, reproduce, prepare derivative works (including translations) of, display and distribute the Product Marketing Materials in connection with the Product within the Market.  If Licensor objects in writing to any versions of the Product Marketing Materials prepared or used by Licensee, the Parties shall cooperate in good faith to resolve Licensor’s concerns.  Licensee agrees to place such notices on Product Marketing Materials and translated versions thereof as are reasonably requested by Licensor to protect its copyrights in such materials and in the Licensed Trademarks used therein.  Nothing in this Section 1.5 shall prevent or restrict Licensee from freely creating, distributing or using any marketing materials for the Product that do not incorporate the Licensed Trademarks and that do not infringe on Licensor’s copyrights or other Intellectual Property Rights.

1.6            Software License .  Licensor hereby grants to Licensee, and Licensee accepts, a non-exclusive, irrevocable, perpetual, royalty free, world-wide, sublicensable and transferable (subject to the provisions hereof) license to access, distribute, display, host, translate into local languages and otherwise commercially exploit the Software in connection with the manufacture, marketing, distribution and sale of Product. Licensor grants to Licensee a non-exclusive, non-sublicensable (except as provided herein) right to use the Source Code to correct, localize, adapt, revise and update the Source Code, and to compile and distribute object and executable code versions of the Software based upon such modified Source Code, provided that (i) Licensee may not disclose any Source Code to any third party other than a Sublicensee, and (ii) other than changes to the Software to localize it to other languages and to comply with local requirements, safety listings or other laws or regulations, Licensee shall obtain Licensor’s consent prior to distributing Products including such modifications to any third parties.  Licensee must strictly protect the Source Code as confidential.  

1.7            Technology Transfer .  Licensor hereby grants to Licensee, and Licensee accepts, an exclusive, perpetual, royalty-free, irrevocable, worldwide, transferable (subject to the provisions hereof), sublicensable license to the Know How to make, have made, market, distribute, sell and otherwise commercially exploit the Product in the Market, subject to all the terms and conditions of this Agreement.  

1.8            Sublicenses .  The exclusive license rights granted Licensee under this Agreement include the right to grant and authorize, from time to time and in Licensee's sole and absolute discretion, one or more sublicenses.  No sublicense granted to any Person pursuant to the terms of this Agreement will be terminable as a result of the termination of this Agreement.

2.             Closing

2.1             Deliverables .   Within thirty (30) days following the later of Effective Date or the date Licensee receives a Transmitted Copy of this Agreement executed by the Licensor, to the extent that Licensor has control of such documents, Licensor will deliver to Licensee copies of the Assignment Agreements and the Prosecution History Files, and copies of all files and original documents owned or controlled by Licensor, which include publicly available documents (including, without limitation, Assignment Agreements, copies of Letters Patent, and other documents necessary to establish that Licensor’s representations and warranties in Section 5 are true and correct) relating to the Patents (“ Initial Deliverables ”).  Licensor acknowledges and agrees that Licensee may request, and Licensor will promptly deliver, additional documents based on Licensee’s review of the Initial Deliverables (such additional documents, related information and the Initial Deliverables, collectively, the “ Deliverables ”) and the Deliverables, and that as a result of Licensee’s review, Exhibits A and B may be revised before and after the Closing to conform these lists to the definition of Patents (and these revisions may require the inclusion of additional provisional patent applications, patent applications, and patents on Exhibit A) and Trademarks.  Licensor shall not be obligated to provide any attorney client confidential information or attorney work product.

2.2            Closing .  Licensor and Licensee will use reasonable efforts to complete the review of the Deliverables and satisfy the conditions to closing described in paragraph 2.3 within thirty (30) calendar days following the later of the Effective Date or the date the last of the Deliverables was received by Licensee (the “ Closing ”), and Licensee may then record Memoranda of Exclusive License/Rights.

2.3            Closing Conditions .  The Closing will occur when Licensee determines that all the following conditions have been satisfied or waived:

(a)            Signature by Licensor .  Licensor timely executed this Agreement and delivered a Transmitted Copy of this Agreement to Licensee’s representatives by not later than May 28, 2009 at 5:00 p.m., Mountain Daylight Time and promptly delivered one (1) executed original of this Agreement to Licensee’s representatives.

(b)            Transmittal of Documents .  Licensor will have delivered to Licensee all the Deliverables.

(c)            Compliance With Agreement .  Licensor performed and complied in all respects with all of the obligations under this Agreement that are to be performed or complied with by it on or prior to the Closing.

(d)            Representations and Warranties True .  Licensee is satisfied that, as of the Effective Date and as of the Closing, the representations and warranties of Licensor contained in Section 5 are true and correct.

(e)            Patents Not Abandoned .  Licensee is satisfied that, as of the Effective Date and as of the Closing, none of the assets that are included in the Patents have expired, lapsed, been abandoned, or deemed withdrawn.

(f)            Delivery of Executed Memorandum .  Licensor will have delivered to Licensee executed and notarized Memoranda of Exclusive License/Rights.

The preceding conditions are conditions precedent to the Closing.

2.4            Further Cooperation .  At the reasonable request of Licensee, Licensor will execute and deliver such other instruments and do and perform such other acts and things as may be reasonably necessary for effecting completely the consummation of the transactions contemplated hereby, including, without limitation, execution, acknowledgment and recordation of other such papers, and using reasonable efforts to obtain the same from the respective inventors, as necessary for fully perfecting and conveying unto Licensee the benefit of the transactions contemplated hereby, including, without limitation, providing and assisting in obtaining execution of any assignments, confirmations, powers of attorney, inventor declarations, and other documents that Licensee may request for prosecuting, maintaining, filing, obtaining issuance of, registering, enforcing, defending, or bringing any proceeding relating to the Patents.  To the extent any attorney-client privilege or the attorney work-product doctrine applies to any portion of the Prosecution History Files, Licensor will ensure that, if any such portion of the Prosecution History File remains under Licensor’s possession or control after the Closing, it is not disclosed to any third party unless (a) disclosure is ordered by a court of competent jurisdiction, after all appropriate appeals to prevent disclosure have been exhausted, and (b) Licensor gave Licensee prompt notice upon learning that any third party sought or intended to seek a court order requiring the disclosure of any such portion of the Prosecution History File.  In addition, Licensor will continue to prosecute, maintain, and defend the Patents at its sole expense.

3.             Filing, Prosecution and Maintenance of Patent Rights

3.1            Costs .  After the Closing, Licensor will continue to be solely entitled and responsible for the preparation, filing, prosecution, maintenance and defense of all Patents (except to the extent of any portion of the Patents abandoned pursuant to the terms of this Agreement).  In the event Licensor fails to fulfill its obligations under this Section 3.1, Licensee may undertake to prepare, file, prosecute, maintain and defense the Patents to the extent reasonably required to protect its interests under this Agreement and Licensor shall reimburse Licensee’s expenses incurred in connection with such actions.

3.2            Copies of Prosecution Documents .  Each Party will, upon the other Party’s reasonable written request, provide such other Party with a copy of documents received or filed by it pertaining to the filing, prosecution, maintenance or defense of Patents, including, without limitation, each patent application, office action, response to office action, request for terminal disclaimer, and request for reissue or reexamination of any patent issuing from such patent application.

3.3            Conduct of Prosecution .  Licensor will execute and deliver to Licensee one or more memoranda in the form of the Memoranda of Exclusive License/Rights and will execute at least one such memorandum prior to the Closing.  The conduct of the preparation, filing, prosecution, maintenance, and defense of the Patents will be under Licensee’s exclusive control and discretion.  Licensee will consult with Licensor on such matters from time to time on Licensor’s reasonable request.  At the reasonable request of Licensee, Licensor will execute and deliver to Licensee such other instruments, and do and perform such other acts and things, as may be reasonably necessary or desirable for confirming in Licensee exclusive right to prosecute, maintain, defend, file, obtain issuance, register, enforce, defend, or bring any proceeding relating to the Patents including, without limitation, execution, acknowledgment and recordation of such papers necessary to convey to Licensee any right or power of attorney in the United States Patent and Trademark Office or other governmental patent office, in respect to prosecution, maintenance, defense, filing, issuance, or registration of the Patents.

3.4            Abandonment of License to Patents .  Licensee will at any time be entitled to abandon its license and other rights to all or any part of the Patents by providing at least thirty (30) days’ advance written notice of such intention to Licensor; provided, Licensee will give such notice not less than sixty (60) days prior to the last allowable date for filing or taking any other action required with respect to such portion of the Patents.  From and after providing such notice of abandonment, Licensee will have no further obligation with respect to such abandoned portion of the Patents.  Any sublicense granted with respect to any Patents abandoned hereunder will not be terminated or altered as a result of such abandonment, provided that such sublicense was granted prior to the effectiveness of such abandonment.

3.5            Licensor’s Assistance .  Licensor will provide Licensee with such advice and assistance as Licensee will reasonably request in connection with the filing, prosecution, maintenance, or defense of the Patents.  Licensee will not be responsible for any costs incurred by Licensor without Licensee’s prior written agreement to bear such costs.

4.             Enforcement of Patents

4.1            Enforcement . Licensee will have the right, but not the obligation, to institute, prosecute, and control any action or proceeding with respect to infringement of the Patents, using counsel of its choice, including any declaratory judgment action arising from such infringement.  In the event Licensee exercises its right to commence such action or proceeding, Licensee will use reasonable efforts to advise Licensor prior to such commencement.  Thereafter, on Licensor's written request no more frequently than every two (2) months, Licensee will report to Licensor reasonable, nonprivileged information on the status of the action or proceeding commenced by Licensee.  Licensor does not have and/or retain any right to, and will not, institute any case, action or other enforcement proceeding with respect to infringement of the Patents.

4.2            Joinder; Cooperation in Litigation .  This Agreement transfers to Licensee all substantial rights under the Patents for the purposes indicated herein and, as a result, Licensee has the right to bring any future action or proceeding to enforce claims under the Patents in its own name, without naming Licensor as a party thereto.  However, if necessary or desirable in Licensee's sole discretion, Licensee may name Licensor as a party in any action or proceeding to enforce the Patents.  If Licensee finds it necessary or desirable, Licensor will execute all papers or perform any other acts or provide any assistance, at Licensee's expense, toward pursuing such action or proceeding, as reasonably required by Licensee.  Licensor will use its best efforts to ensure that any Licensor personnel will be available to cooperate, at Licensee's expense, toward pursuing such action.

4.3            Damages for Breach .  In the event of a material breach of this Agreement by Licensee, subject to the terms and conditions of this Agreement, Licensor may seek exclusively money damages pursuant to the terms and conditions of this Agreement.  In no event, however, will Licensor be entitled to take any action or direct any proceeding with respect to the Patents without Licensee’s express consent and direction unless and until there has been a termination of the Term because of Licensee's proven, continuing and uncured breach.

5.             Representations and Warranties of Licensor

Licensor represents and warrants to Licensee as of the Effective Date and as of the Closing:

5.1            All Substantial Rights .  Licensor intends by this Agreement to transfer to Licensee all substantial rights under the Patents.

5.2            Authority .  Licensor has the full power and authority and has obtained all third party consents, approvals, and/or authorizations required to enter into this Agreement and to carry out its obligations hereunder, including, without limitation, the assignment to Licensee of all causes of action with respect to the Patents.

5.3            Title and Contest .  Licensor owns, and as of the Closing Licensee will hold, all right, title and interest to each right conferred under this Agreement with respect to the Patents, including, without limitation, all rights, title, and interest in and to the causes of action assigned by this Agreement.  Licensor has obtained and properly recorded previously executed assignments for the Patents as necessary to fully perfect its rights and title therein in accordance with governing law and regulation in each jurisdiction.  Each right conferred under this Agreement with respect to the Patents is free and clear of all liens, mortgages, security interests, and restrictions on transfer.  There are no actions, suits, investigations, claims, or proceedings threatened, pending or in progress relating in any way to any right conferred under this Agreement with respect to the Patents.  There are no existing contracts, agreements, options, commitments, proposals, bids, offers, or rights with, to or in any Person to acquire any Patents.

5.4            Existing Licenses and Restrictions on Rights .  No rights, interests, or licenses have been granted under any Patents or retained by prior owners or inventors.  Licensee will not be subject to any covenant not to sue or similar restrictions on its enforcement or enjoyment of any of Patents or the related causes of action as a result of the transactions contemplated in this Agreement or any prior transaction related to the Patents or the Abandoned Assets.

5.5            Validity and Enforceability .  None of the Patents has been found invalid, unpatentable, or unenforceable for any reason in any administrative, arbitration, judicial or other proceeding; and Licensor does not know, has not received any notice or claim from any source suggesting that, the Patents are invalid, unpatentable, or unenforceable.  To the extent “small entity” fees were paid to the United States Patent and Trademark Office for any of the Patents, such reduced fees were then appropriate because the payor qualified to pay “small entity” fees at the time of such payment and specifically had not licensed rights in the any of the Patents to an entity that was not a “small entity.”

5.6            Conduct .  Licensor and its representatives have not engaged in any conduct, or omitted to perform any necessary act, the result of which would invalidate any of th