<SEQUENCE>2

<FILENAME>flexex2.txt

<DESCRIPTION>ASSET PURCHASE AGREEMENT, DATED MARCH 31, 2004

<TEXT>





                     ASSET PURCHASE AGREEMENT



      Flexpoint Sensor Systems, Inc., a Delaware corporation ("Buyer"), and

Flexpoint Holdings, LLC, a Utah limited liability company ("Seller") hereby

agree as follows:



                            ARTICLE 1

                   PURCHASE AND SALE OF ASSETS



      1.01.  Assets Being Purchased. Seller shall sell to Buyer and Buyer

shall purchase from Seller on the terms specified in this Agreement all the

assets, both real and personal and both tangible and intangible, of Seller,

herein called "Assets," including but without limitation:



             (a)  All the assets shown on the schedule hereto attached marked

Schedule 1.01.



             (b)  All other assets of Seller, including the goodwill of

Seller, not expressly excluded in this Agreement.



      1.02.  Purchase Price. Buyer has paid or will pay to Seller on or before

Closing the following:



             (a)    Nine Hundred Sixty Three Thousand Dollars ($963,000.00) in

cash which has been paid to Seller; and



             (b)    One Million Six Hundred Thousand (1,600,000) fully paid

and non-assessable shares of Flexpoint Sensor Systems, Inc. Common Stock.



      1.03.  Closing. The sale and purchase described in this Agreement shall

be consummated on or before March 31, 2004 ("Closing" or "Closing Date").



                            ARTICLE 2

             REPRESENTATIONS AND WARRANTIES BY SELLER



      2.01.  Title to Assets. Seller has good and marketable title to all

assets covered by this Agreement, except such stock in trade or inventory

items as it may sell in the ordinary course of business between the date of

this Agreement and the Closing. Seller's title to all assets is free and clear

of any liens, encumbrances, or other defects except as shown on Schedule 2.01

attached hereto.



      2.02.  Authority to Sell. Seller has complied with all the requirements

of any applicable law of the State of Utah relative to the sale of assets

described in this Agreement and that prior to Closing, all of the consents and

approvals that may be required by law or by agreements to which Seller may be

a party will be obtained.



      2.03.  Liabilities. Except for any liabilities set forth in this

Agreement, there are no other liabilities to which Seller or its assets are

subject unless set forth on Schedule 2.03.



      2.04.  Defaults and Violations. Seller is not in default or material

violation of any contracts, agreements, leases, or other instruments or

obligations to be sold and transferred to Buyer pursuant to this Agreement,

and this Agreement and the purchase and sale to be consummated pursuant to

this Agreement will not create or cause a default or material violation of any

contract, agreement, lease or other instrument to which Seller may be a party.



      2.05.  Taxes. All federal, state and local tax returns and payments that

have become due from Seller to the date of this Agreement have been timely

filed and timely paid by it including any returns or taxes due for (1) state

or federal income or franchise tax, (2) personal or real property tax levied

on any of the assets, (3) sales tax, or (4) other tax. All tax returns and

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