PROMISSORY NOTE

1.         PROMISE TO PAY AND INTEREST.

For value received, the undersigned (“ Borrower ”), promises to pay to David Derrick, an individual (“Lender”), at its above office, or at such other place as Lender may designate in writing, in lawful money of the United States of America, the principal sum of ONE MILLION DOLLARS ($1,000,000.00), with interest thereon from the date advanced at 15% rate per annum (“ Interest Rate ”).  In addition, the Borrower will pay the Lender an origination fee of 5% of the principal sum in the amount of FIFTY THOUSAND DOLLARS ($50,000.00) in cash and ONE HUNDRED THOUSAND (100,000) shares of RemoteMDx restricted common stock.

2.         MATURITY DATE.

Principal and interest shall be due and payable upon the Lender receiving cash proceeds of $1,000,000.00 or more from the sale of common stock or other additional financing activities or seventy-five (75) days from origination and delivery herewith, whichever comes first (“ Maturity Date ”).

On the Maturity Date Borrower shall pay to Lender the unpaid principal, all accrued and unpaid interest, and all other amounts (“ Other Amounts ”) payable by Borrower to Lender under the Promissory Note.

Principal, interest, and Other Amounts not paid when due and any judgment therefor shall bear interest from its due date or the judgment date, as applicable, until paid at a rate (“ Default Rate ”) equal to eighteen percent (18%) per annum.

All interest under the Loan Documents shall be computed on the basis of a 360-day year and accrue on a daily basis for the actual number of days elapsed.  Borrower agrees to pay an effective rate of interest that is the sum of (i) the interest rate provided herein and (ii) any additional rate of interest resulting from any other charges or fees paid or to be paid in connection herewith that are determined to be inte